Andy Morton

Analysis - Hockey "bounce" won't save Molson Coors Canada

By | 7 August 2013

Molson Coors released its H1 results yesterday

Molson Coors released its H1 results yesterday

Molson Coors' sponsorship deal with the National Hockey League will boost the brewer's volumes later this year in underperforming Canada, according to an analyst.

The deal, which was affected last year by an industrial dispute will give a Q4 “volumes bounce” in Canada when the latest season begins in October, Stifel's Mark Swartzberg said yesterday (6 August). However, Swartzberg still lowered his second-half operating profit estimates for Molson Coors' Canada unit by 10%, admitting that his earlier estimate “was too optimistic”.

In Molson's second-quarter results yesterday, sales to retailers in Canada fell by 4.3% while sales volumes dropped by 2.6% over the same period.

Molson Coors started sponsoring the NHL last year, however an NHL lockout last season meant only 48 games were played, curtailing the company's sponsorship activities. The new season starts on 1 October.

Molson Coors is also sponsoring the Canadian Winter Olympics team, and yesterday CEO Peter Swinburn said most of the companies activities will be focussed on hockey, Canada's national sport.

Meanwhile, MillerCoors, the US-based JV between Molson Coors and SABMiller, is on course for a brighter second-half of the year after sales-to-retailers improved to low-single digits last month, Swartzberg said. In second-quarter results released yesterday, MillerCoors net profits dropped by 5.8%. CEO Tom Long admitted it “was a tough volume quarter for us”.

Expert analysis

Molson Coors Brewing Company - Mergers & Acquisitions (M&A), Partnerships & Alliances and Investment Report

MarketLine's Company Mergers & Acquisitions (M&A), Partnerships & Alliances and Investments reports offer a comprehensive breakdown of the organic and inorganic growth activity undertaken by an organization to sustain its competitive advantage.

Sectors: Beer & cider, Company results

Companies: SABMiller, Molson Coors

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Analysis - Hockey "bounce" won't save Molson Coors Canada

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