Molson Coors Beverage Company (NYSE: TAP; TSX: TPX) today
reaffirms key financial guidance for full year 2021 and provides an
update on the impacts to its business resulting from the systems
outages caused by a cybersecurity incident previously disclosed on
March 11, 2021 as well as the eleven-day closure of the Fort Worth,
Texas brewery caused by the winter storms in February 2021.
Molson Coors has made substantial progress in restoring its
systems following the recent cybersecurity incident. Globally, all
breweries are currently producing and shipping products, and are
ramping up to near normal operating levels. Despite this progress
led by the significant efforts of the Molson Coors team, along with
the support of leading forensic information technology firms and
other advisors, the Company has experienced and continues to
experience some delays and disruptions in its business, including
brewery operations, production and shipments in the U.K., Canada
and the U.S. Additionally, the cybersecurity incident was preceded
by an unprecedented February winter storm in Texas that forced
local government authorities to impose energy restrictions, causing
the Fort Worth brewery to be offline for eleven days. Lastly, the
ongoing on-trade shutdowns in the U.K. due to the coronavirus
pandemic continue to be a challenge. All three of these events will
negatively impact first quarter 2021 financial results.
Molson Coors’ President and Chief Executive Officer Gavin
Hattersley commented, “Over the past few weeks, we have faced
significant and unforeseeable obstacles. While these obstacles will
have a negative impact on our first quarter shipments and financial
results, we believe the fundamentals of our revitalization plan are
strong and our future remains bright. We continue to build on the
strength of our core brands, aggressively grow our above premium
portfolio, expand beyond beer, invest in our capabilities and
support our people and our communities.”
Notwithstanding these incidents and the uncertainty that remains
due to the ongoing coronavirus pandemic, including the timing and
strength of the recovery, Molson Coors reaffirms its key financial
guidance for full year 2021 as it continues to expect a mid-single
digit increase in net sales revenue in 2021 on a constant currency
basis, approximately flat underlying EBITDA in 2021 compared to
2020 on a constant currency basis and a net debt-to-underlying
EBITDA ratio of approximately 3.25x by the end of 2021 and below
3.0x by the end of 2022. In addition, Molson Coors continues to
expect that its board of directors will be in a position to
reinstate a dividend in the second half of 2021.
Molson Coors currently estimates that the impacts of the
cybersecurity incident and the February winter storms in Texas will
shift between 1.8 and 2.0 million hectoliters of production and
shipments from the first quarter 2021 to the balance of fiscal year
2021 and will also shift between $120 million to $140 million of
underlying EBITDA from the first quarter 2021 to the balance of
fiscal year 2021. Molson Coors also expects to incur incremental
one-time costs in both our first and second quarters 2021 as a
result of the cybersecurity incident.
A further update on these matters, and the Company’s first
quarter results will be provided on its upcoming investor earnings
call and webcast on April 29, 2021 at 11:00 am ET.
Answers to certain frequently asked questions related to the
press release follow:
1. What will the financial impact be to the Company from
these incidents?
The cybersecurity incident and the February winter storms in
Texas will have a negative impact on first quarter 2021 results and
we expect between 1.8 and 2.0 million hectoliters of production and
shipments to shift from the first quarter 2021 to the balance of
the year and will also shift between $120 million to $140 million
of underlying EBITDA from the first quarter 2021 to the balance of
fiscal year 2021. We expect to incur certain incremental one-time
costs related to consultants, experts and data recovery efforts in
both our first and second quarters 2021 as a result of the
cybersecurity incident.
2. How will the Company disclose the costs related to the
cybersecurity incident in its financial statements and public
filings?
We expect to incur certain incremental one-time costs related to
consultants, experts and data recovery efforts in both our first
and second quarters 2021 as a result of the cybersecurity incident.
The incremental costs net of related insurance recoveries will be
reported in our GAAP financial statements but excluded from
underlying results and reported as a non-GAAP item. The timing and
recognition of related costs may differ from the timing or
recognition of any insurance reimbursement. Any incremental costs
associated with the Fort Worth brewery weather incident will be
reported through underlying results.
3. What will be the impact to the Company’s long-term
financial health from the cybersecurity incident?
We do not believe the first quarter incidents will impact our
long-term financial health or our ability to execute against our
revitalization plan announced in October 2019. We believe the
impact is short-term in nature and have reaffirmed our key
financial guidance for 2021 as we continue to expect a mid-single
digit increase of net sales revenue on a constant currency basis in
2021 compared to 2020, approximately flat underlying EBITDA on a
constant currency basis compared to 2020 and a net
debt-to-underlying EBITDA ratio of approximately 3.25x by the end
of 2021 and below 3.0x by the end of 2022. In addition, our current
expectation remains that our board of directors will be in a
position to reinstate a dividend in the second half of 2021. The
Company generates meaningful cash flow each year and we intend to
maintain our investment grade rating.
4. What steps were taken in response to the cybersecurity
incident?
Immediately upon learning of the cybersecurity incident, we
activated our incident response plan and communicated with our
employees and business partners about the issue. We have also
engaged leading forensic IT experts and legal counsel to assist our
investigation, restore operations and identify the root cause. We
have made substantial progress in restoring our systems and all of
our breweries are producing and shipping products. We notified law
enforcement and are cooperating in their investigation. We also
have notified and are working with all of our relevant insurance
companies.
5. Will this impact your innovation pipeline?
The impact of the cybersecurity incident and Texas storms on our
innovation pipeline have been minimal and we are excited about our
launches. The second Vizzy variety pack and Vizzy Lemonade are
already in the market, Topo Chico Hard Seltzer and Proof Point are
expected to launch on March 29, 2021, as planned, and we expect new
variety packs for Coors Seltzer and Topo Chico Ranch Water to
follow.
About Molson Coors
For more than two centuries Molson Coors has been brewing
beverages that unite people to celebrate all life’s moments. From
Coors Light, Miller Lite, Molson Canadian, Carling, and Staropramen
to Coors Banquet, Blue Moon Belgian White, Blue Moon LightSky,
Vizzy, Coors Seltzer, Leinenkugel’s Summer Shandy, Creemore
Springs, Hop Valley and more, Molson Coors produces many beloved
and iconic beer brands. While the company’s history is rooted in
beer, Molson Coors offers a modern portfolio that expands beyond
the beer aisle as well.
Our reporting segments include: North America, operating in the
U.S., Canada and various countries in Latin and South America; and
Europe, operating in Bulgaria, Croatia, Czech Republic, Hungary,
Montenegro, the Republic of Ireland, Romania, Serbia, the U.K.,
various other European countries, and certain countries within
Africa and Asia Pacific. In addition to our reporting segments, we
also have certain items that are unallocated to our reporting
segments and reported as "Unallocated", which primarily include
financing related costs and impacts of other treasury-related
activities. The company’s commitment to raising industry standards
and leaving a positive imprint on our employees, consumers,
communities and the environment is reflected in Our Imprint and our
2025 sustainability targets. To learn more about Molson Coors
Beverage Company, visit molsoncoors.com, MolsonCoorsOurImprint.com
or on Twitter through @MolsonCoors.
Forward-Looking Statements
This Press Release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. From time to time, the Company may also provide oral or
written forward-looking statements in other materials the Company
releases to the public. Such forward-looking statements are subject
to the safe harbor created by the Private Securities Litigation
Reform Act of 1995.
Statements that refer to future events or circumstances are
forward-looking statements, and include, but are not limited to,
the Company’s expectations regarding the cybersecurity incident,
volume, net sales, income and other financial results. In addition,
statements that the Company makes in this press release that are
not statements of historical fact may also be forward-looking
statements. Words such as “expects,” “intend,” “goals,” “plans,”
“believes,” “continues,” “may,” “anticipate,” “seek,” “estimate,”
“outlook,” “trends,” “future benefits,” “potential,” “projects,”
“strategies,” and variations of such words and similar expressions
are intended to identify forward-looking statements.
Forward-looking statements are subject to risks and
uncertainties that could cause actual results to be materially
different from those indicated (both favorably and unfavorably).
These risks and uncertainties include, but are not limited to, the
ongoing remediation related to the cybersecurity incident, material
legal, financial and reputational risks resulting from a breach of
our information systems, operational disruptions to key facilities
due to the cybersecurity incident, and our reliance on third party
service providers and internal and outsourced systems as further
described in Part I—Item 1A “Risk Factors”, the other factors
discussed in Part I—Item 1A “Risk Factors” in the Company’s 2020
Annual Report on Form 10-K, filed with the SEC on February 11,
2021, and those described from time to time in the Company’s past
and future reports filed with the SEC. Caution should be taken not
to place undue reliance on any such forward-looking statements.
Forward-looking statements speak only as of the date when made and
the Company undertakes no obligation to update any forward-looking
statement, whether as a result of new information, future events or
otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20210326005398/en/
Investor Relations Greg
Tierney, (414) 931-3303 Traci Mangini, (415) 308-0151
News Media Marty Maloney,
(312) 496-5669
Molson Coors Beverage (NYSE:TAP.A)
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