Molson Coors posted its H1 results late last week

Molson Coors posted its H1 results late last week

Late last week, Molson Coors reported a marked fall in half-year net profits on a near-15% drop in sales. Here, just-drinks takes a closer look at the brewer’s Q2 & H1 performance by region:

  • US (MillerCoors)

Earlier in the week, the MillerCoors JV with SABMiller posted a 7.5% lift in half-year net profits on flat sales. Underlying net profits in the second quarter rose by 9.3%, with the subsidiary crediting "lower brewing and packaging materials and fuel costs, as well as higher net pricing and supply chain cost savings".
In volume terms, sales-to-retailers were down by 3.2% in Q2, with sales-to-wholesalers dipping by 1.6%. However, net revenue-per-hectolitre including contract brewing and company-owned-distributor sales was up by 1.4%.
Cost-of-goods-sold per hectolitre were down, despite "higher costs associated with brand innovation".

  • Canada

Foreign currency movements hit Molson Coors' Canadian operations, with underlying pre-tax profits in the second quarter taking a US$11.8m hit. Stripping out ForEx, underlying pre-tax profits rose by 4.3%, thanks to "positive net pricing and sales mix, along with substantial cost savings".
The unit's volumes in the second quarter were down by 6.6%, while net sales-per-hectolitre rose by 4.1%.

  • Europe

The termination of contracts for Anheuser-Busch InBev's Modelo stable and for Heineken in the UK hit Molson Coors particularly badly in the second quarter. Underlying pre-tax profits in the quarter dropped by 21.5%. Unfavourable ForEx was also blamed for the poor performance. In volume terms, the company saw European sales dip by 1.1%, with net sales-per-hectolitre falling by 2.6%.
Excluding the terminated contracts, the brewer "increased net sales-per-hectolitre in all of our major Europe markets apart from Serbia".

  • International

Despite posting a 17.8% leap in volumes, Molson Coors' international operations were affected by a price promotion expense of $3.6m following its restructure of its China business. Also, ForEx movements hit underlying pre-tax profits by $1.1m.
India volumes were boosted by the purchase of Mount Shivalik Breweries in the country in April. Meanwhile, the Coors Light brand generated double-digit growth in Latin America.
International net sales-per-hectolitre were down by 35% due primarily to the fore-mentioned price promotion expenses.