Mr. Gavin Hattersley reports

MOLSON COORS BEVERAGE COMPANY REPORTS 2023 FIRST QUARTER RESULTS

Molson Coors Beverage Company's Molson Coors Canada Inc. has released results for the 2023 first quarter. Unless otherwise indicated in this release, all dollar amounts are in U.S. dollars, and all quarterly comparative results are for the company's first quarter ended March 31, 2023, compared with the first quarter ended March 31, 2022. Some numbers may not sum due to rounding.

2023 first quarter financial highlights:

• Net sales increased 5.9 per cent reported and 8.2 per cent in constant currency, primarily due to positive net pricing and favourable sales mix, partially offset by a slight decline in financial volume.
• Net sales per hectolitre increased 6.1 per cent reported and 8.4 per cent in constant currency, primarily due to positive net pricing and favourable sales mix driven by premiumization.
• U.S. GAAP (generally accepted accounting principles) income before income taxes of $101.9-million declined 41.3 per cent reported and 45.3 per cent in constant currency.
• Underlying (non-GAAP) income before income taxes of $157.8-million improved 82.8 per cent in constant currency.
• U.S. GAAP net income attributable to Molson Coors Beverage of $72.5-million, 33 cents per share on a diluted basis. Underlying (non-GAAP) diluted earnings per share (EPS) of 54 cents per share increased 86.2 per cent.

Chief executive officer and chief financial officer perspectives

In the first quarter of 2023, Molson Coors delivered strong net sales growth and increased its underlying income before income taxes on a constant currency basis by high double digits. These results benefited from particularly strong rollover pricing compared with the prior year and were achieved despite continued macroeconomic pressures. After growing both these metrics on a full-year basis in 2022, the company continues to deliver against its priorities, growing revenue across both business units in the first quarter and reaffirming its full-year 2023 guidance.

Molson Coors's core brands in the United States continue to see strong, stable performance, and in Canada, Molson Canadian and Coors Light both grew brand volume in the quarter. In the United Kingdom, Carling remains the No. 1 brand in the market, and more broadly, Molson Coors's EMEA (Europe, Middle East, Africa) and APAC (Asia Pacific) business grew total financial volume in the quarter. This growth was supported by Molson Coors's global premiumization strategy and the continued strength of Madri, which is now the eighth-largest brand in the U.K. In the U.S., Molson Coors continued to expand its presence beyond traditional beer, including Simply Spiked, a top five industry growth brand, and the release of Simply Spiked Peach. In addition, the company launched its first foray into ready-to-drink spirits under the Topo Chico Spirited banner.

Gavin Hattersley, president and chief executive officer, statement:

"Our results in the first quarter of 2023 demonstrate the strength of Molson Coors's foundation across our portfolio of winning brands and business units. These results also reaffirm our belief that we've laid the right groundwork to continue growing sustainably in 2023 and in the future. We've delivered our eighth consecutive quarter of top-line growth and increased our bottom line on an underlying and constant currency basis by high double digits. Our iconic core brands remain healthy, and our premiumization strategy is working as we see continued momentum across our newest brands in Above Premium Beer and beyond."

Tracey Joubert, chief financial officer, statement:

"We are pleased with our first quarter performance, achieving strong net sales revenue and underlying income before taxes growth, while continuing to invest in our business and return cash to shareholders. While we remain mindful of the dynamic global macroeconomic environment and beer industry softness, our first quarter performance, coupled with the strong foundation we have laid over the last three years, provide us confidence to reaffirm our 2023 annual guidance. Achievement of this guidance would mark another year of growth on a constant-currency basis -- delivering on our goal of sustainable top- and bottom-line growth."

Quarterly consolidated highlights (versus first quarter 2022 results):

• Net sales increased 5.9 per cent reported and 8.2 per cent in constant currency, driven by favourable price and sales mix offset by a slight decline in financial volume.
• Financial volumes decreased 0.2 per cent, primarily due to lower volumes in the Americas segment, partially offset by an increase in EMEA and APAC financial volumes. Brand volumes declined 2.1 per cent due to a 1.5 per cent decline in the Americas as well as a decline in EMEA and APAC.
• Price and sales mix favourably impacted net sales and net sales per hectolitre by 8.4 per cent due to increased net pricing to customers, including the rollover benefit of taking several price increases in the previous year as well as favourable sales mix driven by premiumization and geographic mix.
• Cost of goods sold (COGS) increased 22.4 per cent on a reported basis, primarily due to higher cost of goods sold per hectolitre, partially offset by favourable currency impacts. Cost of goods sold per hectoliter increased 22.7 per cent primarily due to changes to the company's unrealized mark-to-market commodity positions driving more than two-thirds of the increase, cost inflation related to materials, conversion and energy costs, and mix impacts due to portfolio premiumization, partially offset by Molson Coors's cost savings initiatives. Underlying COGS per hectolitre increased 7.4 per cent in constant currency, primarily due to cost inflation related to materials, conversion and energy costs, and mix impacts due to portfolio premiumization, partially offset by the company's cost savings initiatives.
• Marketing, general and administrative (MG&A) decreased 9 per cent on a reported basis, primarily due to cycling the recording of a $56-million accrued liability related to potential losses as a result of the continuing Keystone litigation case. Underlying MG&A increased 1.3 per cent in constant currency.
• U.S. GAAP income (loss) before income taxes declined 41.3 per cent on a reported basis, primarily due to unfavourable changes to the company's unrealized mark-to-market commodity positions of $223-million and cost inflation related to materials, conversion and energy costs, partially offset by increased net pricing to customers, lower MG&A expense due to cycling the recording of a $56-million accrued liability related to potential losses as a result of the continuing Keystone litigation case, the cycling of the non-cash impairment charge taken on the company's Truss LP joint venture asset group in the prior year, and favourable sales mix.
• Underlying income (loss) before income taxes improved 82.8 per cent in constant currency, primarily due to increased net pricing to customers and favourable sales mix, partially offset by cost inflation related to materials, conversion and energy costs.

Quarterly segment highlights (versus first quarter 2022 results)

Americas segment:

• Net sales increased 5.6 per cent reported and 6.5 per cent in constant currency, driven by price and sales mix, partially offset by a decline in financial volume.
• Financial volumes decreased 0.5 per cent primarily due to industry softness, lower Latin America financial volumes and lower contract volumes, partially offset by an increase in U.S. domestic shipments to build distributor inventory levels to a stronger position compared with the prior year, primarily in the company's core brands. Americas brand volumes decreased 1.5 per cent, including a 1.2-per-cent decline in the U.S. driven by softer industry performance and lower economy portfolio volumes, partially offset by the timing impact related to one more trading day in the current quarter. Canada brand volumes increased 4.9 per cent due to growth in core brands and in part due to cycling softer on-premise performance in the prior year due to Omicron restrictions. Latin America declined 12.4 per cent, largely due to industry softness in some of Molson Coors's major markets in the region.
• Price and sales mix favourably impacted net sales and net sales per hectolitre by 7 per cent and 7.1 per cent, respectively, primarily due to increased net pricing to customers, including the rollover benefit of several price increases taken in the previous year and favourable sales mix driven by brand mix and geographic mix.
• U.S. GAAP income (loss) before income taxes improved 168 per cent on a reported basis, primarily due to increased net pricing, lower MG&A expense driven by cycling the recording of a $56-million accrued liability related to potential losses as a result of the continuing Keystone litigation case, the cycling of the non-cash impairment charge taken on the company's Truss LP joint venture asset group in the prior year, and favourable sales mix, partially offset by cost inflation mainly on materials, conversion and energy costs.
• Underlying income (loss) before income taxes improved 37.7 per cent in constant currency, primarily due to increased net pricing and favourable sales mix, partially offset by cost inflation mainly on materials, conversion and energy costs.

EMEA and APAC segment:

• Net sales increased 7.6 per cent reported and 16.1 per cent in constant currency, driven by favourable price and sales mix and an increase in financial volume.
• Financial volumes increased 0.8 per cent, primarily due to above premium volumes in the U.K. and higher factored volumes, partially offset by inflationary pressures impacting Central and Eastern European consumers' discretionary purchases. EMEA and APAC brand volumes declined 3.9 per cent, primarily due to the Russia-Ukraine conflict and inflationary pressures impacting Central and Eastern European countries, partly offset by growth in Western Europe.
• Price and sales mix favourably impacted net sales and net sales per hectolitre by 15.3 per cent and 15.1 per cent, respectively, primarily due to increased net pricing to customers, including the rollover benefits from price increases taken in the previous year as well as favourable sales mix driven by premiumization and geographic mix.
• U.S. GAAP income (loss) before income taxes loss of $25.4-million improved 21.1 per cent on a reported basis, primarily due to increased net pricing to customers, favourable sales mix and higher financial volumes, partially offset by cost inflation on materials, transportation and energy, as well as higher MG&A spend. Higher MG&A spend was primarily due to cost inflation.
• Underlying income (loss) before income taxes loss of $21.8-million improved 27.6 per cent in constant currency, primarily due to increased net pricing to customers, favourable sales mix and higher financial volumes, partially offset by cost inflation on materials, transportation and energy, as well as higher MG&A spend.

Cash flow and liquidity highlights:

• U.S. GAAP cash from operations: Net cash provided by operating activities was $3.4-million for the three months ended March 31, 2023, which improved $122.7-million compared with the prior year, primarily due to higher net income adjusted for non-cash add-backs, which includes a $222.1-million change in the add-back related to the company's unrealized mark-to-market commodity positions, as well as the favourable timing of working capital in the Americas.
• Underlying free cash flow: Cash used of $173.7-million for the three months ended March 31, 2023, which represents a decrease in cash used of $185.1-million from the prior year, primarily due to higher net cash provided by operating activities and lower capital expenditures as result of the timing of capital projects.
• Debt: Total debt as of March 31, 2023, was $6,590.4-million and cash and cash equivalents totalled $328.2-million, resulting in net debt of $6,262.2-million and a net debt to underlying EBITDA (earnings before interest, taxes, depreciation and amortization) ratio of 2.98 times. As of March 31, 2022, the company's net debt to underlying EBITDA ratio was 3.28 times.
• Dividends: On Feb. 20, 2023, the company's board of directors declared a cash dividend of 41 cents per share, paid on March 17, 2023, to shareholders of Class A and Class B common stock of record on March 3, 2023. Shareholders of exchangeable shares received the Canadian-dollar equivalent of dividends declared on Class A and Class B common stock, equal to 55 Canadian cents per share.
• Share repurchase program: For the three months ended March 31, 2023, the company repurchased 275,000 shares under the share repurchase program, which was approved on Feb. 17, 2022, at a weighted average price of $52.95 per share, including brokerage commissions, for an aggregate value of $14.6-million.

Other results:

• The increase in the company's first quarter U.S. GAAP effective tax rate was primarily due to an increase in net discrete tax expense. Molson Coors recognized discrete tax expense of $7.5-million in the first quarter of 2023 versus discrete tax benefit of $900,000 in the prior year.

2023 outlook

Molson Coors continues to expect to achieve the following key financial targets for full-year 2023. However, inherent uncertainties still exist with beer industry softness and the impacts of continued global inflationary cost pressures.

• Net sales -- low-single-digit increase versus 2022 on a constant currency basis;
• Underlying income (loss) before income taxes -- low-single-digit increase compared with 2022 on a constant currency basis;
• Capital expenditures -- $700-million incurred, plus or minus 5 per cent;
• Underlying free cash flow -- $1-billion, plus or minus 10 per cent;
• Underlying depreciation and amortization -- $690-million, plus or minus 5 per cent;
• Consolidated net interest expense -- $240-million, plus or minus 5 per cent;
• Underlying effective tax rate -- in the range of 21 per cent to 23 per cent for 2023.

2023 first quarter investor conference call

Molson Coors Beverage Company will conduct an earnings conference call with financial analysts and investors at 11 a.m. Eastern Time today to discuss the company's 2023 first quarter results. The live webcast will be accessible through the Molson Coors website. An on-line replay of the webcast will be available until 11:59 p.m. Eastern Time on July 31, 2023. The company will post this release and related financial statements on its website today.

Overview of Molson Coors Beverage Company

For more than two centuries, Molson Coors Beverage Company 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, Vizzy Hard Seltzer, Leinenkugel's Summer Shandy, Miller High Life 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.

Molson Coors Beverage's reporting segments include: Americas, operating in the U.S., Canada and various countries in the Caribbean, Latin and South America; and EMEA and APAC, 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 the Middle East, Africa and Asia Pacific. In addition to its reporting segments, Molson Coors Beverage also has certain activity that is not allocated to its reporting segments and reported as unallocated, which primarily includes financing-related costs such as interest expense and income, foreign exchange gains and losses on intercompany balances related to financing and other treasury-related activities, and the unrealized changes in fair value on its commodity swaps not designated in hedging relationships recorded within cost of goods sold, which are later reclassified when realized to the segment in which the underlying exposure resides. Additionally, only the service cost component of net periodic pension and OPEB (other postemployment benefits) cost is reported within each operating segment, and all other components remain unallocated.

Molson Coors Beverage's environmental, social and governance (ESG) strategy is focused on people and planet with a strong commitment to raising industry standards and leaving a positive imprint on its employees, consumers, communities and the environment.

About Molson Coors Canada Inc.

Molson Coors Canada is a subsidiary of Molson Coors Beverage Company. Molson Coors Canada Class A and Class B exchangeable shares offer substantially the same economic and voting rights as the respective classes of common shares of Molson Coors Beverage, as described in Molson Coors Beverage's annual proxy statement and Form 10-K filings with the U.S. Securities and Exchange Commission. The trustee holder of the special Class A voting stock and the special Class B voting stock has the right to cast a number of votes equal to the number of then outstanding Class A exchangeable shares and Class B exchangeable shares, respectively.

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