Molson Coors Brewing (NYSE: TAP) reported Q4 EPS of $0.40, $0.37 worse than the analyst estimate of $0.77. Revenue for the quarter came in at $2.29 billion versus the consensus estimate of $2.4 billion.

Fourth Quarter Highlights:

• Fourth Quarter Net Sales Revenue decreased 7.7% reported and 8.3% in constant currency, primarily driven by Europe and Canada declines resulting from restrictions in the on-premise channel as a result of the coronavirus pandemic.
• Fourth Quarter Net Sales Revenue in the U.S., the Company's largest market, increased 1.9%, on a brand volume basis, partially offsetting the Europe and Canada results.
• Fourth Quarter U.S. GAAP Net Loss of $1.4 billion ($6.32 per share) primarily driven by $1.5 billion Europe goodwill impairment charge. Fourth Quarter Non-GAAP EPS of $0.40 decreased 60.8%.
• Fourth Quarter Underlying (Non-GAAP) EBITDA of $375 million decreased 33.6% in constant currency.

2021 Outlook

While uncertainty remains regarding the coronavirus pandemic, including the timing and strength of the recovery, we currently expect the following for full year 2021, which we consider a year of investment:

• Net sales revenue: mid-single digit increase on a constant currency basis.
• Underlying EBITDA: approximately flat compared to 2020 on a constant currency basis.
• Deleverage: We intend to maintain our investment grade rating as demonstrated by our continued deleveraging. We expect to achieve 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.
• Underlying depreciation and amortization: approximately $800 million.
• Consolidated net interest expense: approximately $270 million, plus or minus 5%.
• Underlying effective tax rate: in the range of 20% to 23% for 2021.

In addition, our current expectation is that our board of directors will be in a position to reinstate a dividend in the second half of 2021.

Outlook Highlights:

• Molson Coors is reinstating financial guidance for 2021, including current expectation that our board of directors will be in a position to reinstate a dividend in the second half of 2021.
• Strong progress against our revitalization plan, which aims to drive long-term revenue and underlying EBITDA growth.

Molson Coors president and chief executive officer Gavin Hattersley commented, "The revitalization plan we announced in October 2019 positioned our company well to weather the storms of 2020. We built on the strength of our iconic core and in the second half of 2020, we achieved a record high portion of our U.S. portfolio in above premium products. We expanded beyond the beer aisle and we set the stage to build our emerging growth division into a $1 billion revenue business by 2023. We invested in our capabilities while supporting our people and our communities."

Hattersley further explained that the company was able to accomplish all of this even with the challenges presented by the coronavirus pandemic, particularly in Europe where the continued restrictions in the European on-premise channel had a significant impact on the year and quarterly results. “The fact is our plan is working,” added Hattersley. “When you consider what we set out to do under our revitalization plan and what we were faced with during the year, we accomplished an incredible amount in 2020 and that has given us a tremendous springboard for 2021.”

Molson Coors chief financial officer Tracey Joubert said, "We are proud of our resilience and financial performance, including substantial improvements in our balance sheet, as we have navigated through these unprecedented times. While on-premise restrictions, and in particular our Europe business, drove declines in the top- and bottom-line in both the fourth quarter and for the full year, we enter 2021 with improved financial flexibility and have determined to reinstate guidance for the year. While uncertainty and on-premise challenges remain, particularly in Europe, we anticipate 2021 to be a year of both top-line growth, as we begin to benefit from the early successes of our revitalization plan, and of investment, as we continue to drive toward long-term revenue and underlying EBITDA growth."

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