Mr. Gavin Hattersley reports

MOLSON COORS BEVERAGE COMPANY REPORTS 2023 SECOND QUARTER RESULTS

Molson Coors Canada Inc. parent Molson Coors Beverage Company has provided results for the 2023 second quarter. All dollar amounts are in U.S. dollars unless otherwise stated.

2023 second quarter financial highlights

• Net sales increased 11.8 per cent reported and 12.1 per cent in constant currency, primarily due to positive net pricing and favourable sales mix as well as higher financial volumes.
• Net sales per hectolitre increased 8.7 per cent reported and 9.0 per cent in constant currency, primarily due to positive net pricing and favourable sales mix driven by geographic mix and premiumization.
• U.S. GAAP (generally accepted accounting principles) income before income taxes of $441.1-million increased $386.2-million.
• Underlying (non-GAAP) income before income taxes of $502.2-million improved 52.6 per cent in constant currency.
• U.S. GAAP net income attributable to Molson Coors of $342.4-million, $1.57 per share on a diluted basis. Underlying (non-GAAP) diluted earnings per share (EPS) of $1.78 per share increased 49.6 per cent.
• Molson Coors to host a strategy day in New York on Oct. 3, 2023.

Chief executive officer and chief financial officer perspectives

In the second quarter of 2023, Molson Coors delivered its single strongest quarter of U.S. GAAP reported net sales since the merger of Molson and Coors in 2005 and grew income before income taxes by 703 per cent reported and by 53 per cent on an underlying constant currency basis. After growing both top-line and bottom-line metrics on an underlying basis for the full year in 2022, and again in the first quarter of 2023, the company continued its trajectory of sustained growth in the second quarter, buoyed by strong performance across its portfolio and across both business units.

Molson Coors, in the second quarter, grew volume and net sales in its largest markets -- U.S., Canada and the United Kingdom. In the U.S., Molson Coors achieved its best quarterly brand volume trend since the MillerCoors Joint Venture in 2008, as Coors Light, Miller Lite and Coors Banquet each grew volume double-digits. In Canada, both Coors Light and the Molson brand franchise grew volume and net sales in the quarter. Additionally, the U.K. grew volume and net sales in the second quarter backed by triple-digit volume growth from Madri. As of June 30, 2023, Madri was the company's fourth largest above premium brand by volume in the ocmpany's global portfolio. Furthermore, as of the second quarter, the above premium portfolio accounted for more than half of the net sales generated by brand volumes in the company's Europe, Middle East and Asia and Asia-Pacific segment.

Gavin Hattersley, president and chief executive officer, statement:

"Our second quarter results represent tremendous growth across our global business, as well as our portfolio. We are proud to report the best quarter of U.S. GAAP reported net sales since the merger of Molson and Coors in 2005, but make no mistake: this is not simply a measure of the three months in the second quarter. These results are a measure of the past three years and a long-term strategy that has made our brands, our supply chain and our breweries demonstrably stronger. Collectively, the investments we have made over the past three years have made us more nimble, more prepared and singularly focused on strengthening our business, attracting consumers, meeting demand and sustaining our results."

Tracey Joubert, chief financial officer, statement:

"We are extremely pleased with our second quarter performance, with both business units achieving double-digit net sales and underlying income before income tax growth. We did this while continuing to invest in our business, reduce net debt and return cash to shareholders. While we remain mindful of the dynamic global macro economic environment and beer industry softness, our robust second quarter performance coupled with the strong foundation we have laid over the last three years, provide us the confidence to significantly raise our 2023 annual guidance. Our strategy is working, positioning us to deliver top and bottom-line growth in 2023 and beyond."

Quarterly consolidated highlights (versus second quarter 2022 results)

• Net sales: The attached table highlights the drivers of the change in net sales and net sales per hectolitre for the three months ended June 30, 2023, compared with June 30, 2022 (in percentages).

• Net sales increased 11.8 per cent driven by favourable price and sales mix, as well as higher financial volumes partially offset by unfavourable foreign currency impacts. Net sales increased 12.1 per cent in constant currency.
• Financial volumes increased 2.8 per cent, primarily due to higher financial volumes in the Americas segment, partially offset by a decrease in EMEA and APAC financial volumes.
• Brand volumes improved 5.0 per cent due to an 8.0-per-cent increase in the Americas, partially offset by a 2.9-per-cent decline in EMEA and APAC.
• Price and sales mix favorably impacted net sales and net sales per hectolitre by 9.3 per cent and 9.0 per cent, respectively, 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 geographic mix and premiumization.
• Cost of goods sold (COGS): decreased 2.6 per cent on a reported basis, primarily due to lower cost of goods sold per hectolitre and favourable foreign currency impacts, partially offset by the impact of higher financial volumes. Cost of goods sold per hectolitre: decreased 5.3 per cent primarily due to changes in the company's unrealized mark-to-market derivative positions of $210.1-million, volume leverage and cost savings initiatives, partially offset by cost inflation related to material and manufacturing expenses and unfavourable mix.
• Underlying COGS per hectolitre: increased 5.9 per cent in constant currency, primarily due to cost inflation related to materials and manufacturing expenses and unfavourable mix, partially offset by volume leverage and cost savings initiatives.
• Marketing, general and administrative (MG&A): increased 3.9 per cent on a reported basis, primarily due to higher incentive compensation expense and increased marketing investment on innovation brands.
• Underlying MG&A: increased 4.1 per cent in constant currency.
• U.S. GAAP income (loss) before income taxes: increased $386.2-million on a reported basis, primarily due to changes in the company's unrealized mark-to-market commodity positions of $210.1-million, increased net pricing to customers, higher financial volumes and favourable sales mix, partially offset by cost inflation related to material and manufacturing expenses, as well as higher MG&A expense.
• Underlying income (loss) before income taxes: improved 52.6 per cent in constant currency, primarily due to increased net pricing to customers, higher financial volumes and favourable sales mix, partially offset by cost inflation related to material and manufacturing expenses, as well as higher MG&A expense.

Quarterly segment highlights (versus second quarter 2022 results)

Americas segment

• Net sales: The attached table highlights the drivers of the change in net sales and net sales per hectolitre for the three months ended June 30, 2023, compared with June 30, 2022 (in percentages).

• Net sales increased 10.7 per cent driven by favourable price and sales mix and an increase in financial volumes, partially offset by unfavourable foreign currency impacts. Net sales increased 11.5 per cent in constant currency.
• Financial volumes increased 5.0 per cent primarily due to an increase in U.S. domestic shipments driven by volume growth in the company's premium brands, as well as higher shipments in Canada mainly attributed to cycling the prior year impacts of the Quebec labour strike. The increase in U.S. volume was impacted by a shift in consumer purchasing behaviour largely within the premium segment. Americas brand volumes increased 8.0 per cent, including an 8.7-per-cent increase in the U.S., driven by growth in the company's core brands, with Coors Light, Miller Lite and Coors Banquet each growing double-digits. Canada brand volumes increased 11.3 per cent mainly driven by cycling the prior year impacts of the Quebec labour strike. Latin America volume decreased 5.9 per cent largely due to industry softness in some of the company's major markets in the region.
• Price and sales mix favourably impacted net sales and net sales per hectolitre by 6.5 per cent and 6.2 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.
• U.S. GAAP and underlying income (loss) before income taxes: improved 40.0 per cent on a reported U.S. GAAP basis and underlying basis in constant currency primarily due to increased net pricing, higher financial volumes including volume leverage, lower logistics expenses and favourable sales mix, partially offset by cost inflation related to material and manufacturing expenses, as well as higher MG&A expense. Higher MG&A spend was primarily due to higher incentive compensation expense and increased marketing investment on innovation brands.

EMEA and APAC segment

• Net sales: The attached table highlights the drivers of the change in net sales and net sales per hectolitre for the three months ended June 30, 2023, compared with June 30, 2022 (in percentages).

• Net sales increased 16.3 per cent driven by favourable price and sales mix as well as by favourable foreign currency impacts, partially offset by a decline in financial volumes. Net sales increased 14.7 per cent in constant currency.
• Financial volumes decreased 3.0 per cent and brand volumes declined 2.9 per cent primarily due to declines in Central and Eastern Europe due to industry softness including the inflationary pressures on the consumer, partially offset by resilient demand and growth in above premium volumes in the U.K.
• Price and sales mix favorably impacted net sales and net sales per hectolitre by 17.7 per cent and 18.3 per cent, respectively, primarily due to increased net pricing to customers including the rollover benefits from price increases taken in the previous year and favourable sales mix driven by premiumization and geographic mix.
• U.S. GAAP and underlying income (loss) before income taxes: U.S. GAAP income before income taxes improved 86.6 per cent on a reported basis and underlying income before income taxes improved 82.7 per cent in constant currency, primarily due to increased net pricing to customers and favourable sales mix, partially offset by lower financial volumes and cost inflation on materials, logistics and manufacturing expenses.

2023 outlook

The company is raising its 2023 key financial guidance metrics to reflect the continued strength it is seeing in its core brands in the U.S. while remaining mindful of the softness in the beer industry and continued caution around the consumer:

• Net sales: high single-digit increase versus 2022 on a constant currency basis from the company's previous guidance of a low single-digit increase;
• Underlying income (loss) before income taxes: 23-per-cent to 26-per-cent increase compared with 2022 on a constant currency basis from the company's previous guidance of a low single-digit increase;
• Underlying free cash flow: $1.2-billion, plus or minus 10 per cent, from the company's previous guidance of $1.0-billion, plus or minus 10 per cent;
• Consolidated net interest expense: $225-million, plus or minus 5 per cent from the company's previous guidance of $240-million, plus or minus 5 per cent.

The company continues to expect the following targets for full year 2023:

• Capital expenditures: $700-million incurred, plus or minus 5 per cent;
• Underlying depreciation and amortization: $690-million, plus or minus 5 per cent;
• Underlying effective tax rate: In the range of 21 per cent to 23 per cent for 2023.

On July 13, 2023, the company's board of directors declared a cash dividend on its Class A and Class B common shares of 41 cents per share, payable Sept. 15, 2023, to shareholders of record on Sept. 1, 2023. Similarly, the board of directors of Molson Coors Canada Inc., an indirect wholly owned subsidiary of the company, on July 13, 2023, declared a quarterly dividend of approximately 53 Canadian cents per share (the Canadian dollar equivalent of the dividend declared on Molson Coors stock) payable on Sept. 15, 2023, to its Class A and Class B exchangeable shareholders of record on Sept. 1, 2023.

The company repaid its $500-million (Canadian) 2.84 per cent notes upon maturity on July 15, 2023, using cash on hand.

Notes

Unless otherwise indicated in this release, all dollar amounts are in U.S. dollars, and all quarterly comparative results are for the company's second quarter ended June 30, 2023, compared with the second quarter ended June 30, 2022. Some numbers may not sum due to rounding.

2023 second quarter investor conference call

Molson Coors Beverage will conduct an earnings conference call with financial analysts and investors at 11 a.m. Eastern Time today to discuss the company's 2023 second quarter results. The live webcast will be accessible via the company's website. An on-line replay of the webcast will be available until 11:59 p.m. Eastern Time on Nov. 1, 2023. The company will post this release and related financial statements on its website today.

2023 strategy day

Molson Coors will host a strategy day in New York on Oct. 3, 2023, to provide an update on the company's strategic initiatives, capital allocation and outlook. The event will include presentations and a question-and-answer session with members of Molson Coors's leadership team. Due to venue capacity, in-person attendance for institutional investors and financial analysts will be by invitation only. However, presentation materials and an interactive live video stream of the event, as well as a video replay following the event, will be made available through the company's investor relations website.

Overview of Molson Coors Beverage Company

For more than two centuries Molson Coors Beverage 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.

The company'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 the company's reporting segments, it 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 the company's 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 cost is reported within each operating segment, and all other components remain unallocated.

The company'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. Its 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, as described in Molson Coors'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.

We seek Safe Harbor.