Molson Coors Brewing Company (TAP)

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Molson Coors Brewing Company (TAP)

Q4 2009 Earnings Call

February 09, 2010 11:00 am ET

Executives

Peter Swinburn - President and CEO

Stewart Glendinning - CFO

Dave Perkins - President and CEO, Molson Coors Canada

Mark Hunter - President and CEO, Molson Coors U.K.

Analysts

Judy Wong - Goldman Sachs

Kaumil Gajrawala - UBS

John Faucher - JPMorgan

Carlos Laboy - Credit Suisse

Mark Swartzberg - Stifel Nicolaus

Raghavan Selvaratnam - MainFirst

Presentation

Operator

Thank you all for attending Molson Coors Brewing Company 2009 fourth quarter and year end earnings conference call. I’d now like to read a prepared statement. Before we get started, we want to paraphrase the company’s Safe Harbor language. Some of the discussion today may include forward-looking statements. Actual results could differ materially from what the company projects today, so please refer to its most recent 10-K, 10-Q and proxy filings for a more complete description of factors that could affect these projections.

The company does not undertake to publicly update forward-looking statements, whether a result of new information, future events, or otherwise. Regarding any non-U.S. GAAP measures that may be discussed during the call, please visit the company’s website www.molsoncoors.com for a reconciliation of all these measures to the nearest U.S. GAAP results.

I would now like to introduce your host for today’s conference Mr. Peter Swinburn the President and Chief Executive Officer of Molson Coors Brewing, Sir you may begin.

Peter Swinburn

Thank you again hello and welcome everybody and thanks for joining us today. With me on the call are Stewart Glendinning, Molson Coors CFO, Leo Kiely, CEO of MillerCoors, Gavin Hattersley the CFO of MillerCoors, Dave Perkins, CEO of Molson Coors Canada, Mark Hunter, CEO of Molson Coors U.K., Sam Walker, Molson Coors Chief Legal Officer, Bill Waters, Molson Coors Controller, and Dave Dunnewald, Molson Coors Vice President of Investor Relations.

On this morning I would also want to extend the special welcome to Kandy Anand who has joined Molson Coors as President of our international business in Asia, continently Europe and Latin America. Kandy brings with him more than 20 years of global brand and marketing experience most recently with Coke and Unilever, and we are delighted to have him on board with the Molson Coors team.

On the earnings call today, Stewart and I will take you through highlights of our fourth quarter and full year 2009 results for Molson Coors Brewing Company. Along with some initial perspectives on 2010, and then as usual we will open the call for questions.

So, we will get started. Underlying earnings for our company increased more than 85% in the fourth quarter versus the year ago driven by one time reduction in tax rate. Behind the headline number, our results were affected by weak volumes across all markets.

Cost increase in the U.S. and UK and brand investments in Canada. Overall, consumer demand remains sluggish and we see these conditions continuing to impact volume and mix in the near term. Our strategy remains consistent however, as we are focused on investing in innovation on our brands, on ensuring we maintain the strong sheet so that when the market conditions improve we are better positioned to accelerate our growth and capitalize on opportunities.

Our forums in the quarter and over the past year has benefited from this strategic focus. While our underlying earnings in the fourth quarter were aided by one time reduction in our tax rate, it’s important to point out that we grew or held our net pricing and market share in both the U.S. and Canada.

Our Canada share performance represented a significant trend improvement in previous quarters. In the UK we continue to forgo low profit volume and share which helps us drive positive pricing and margins. For the full year, we expanded our brand portfolios in Canada and the UK, exceeded our goals for cost savings and maintain price discipline all of which contributed to a significant increase in our full year underlying earnings. Looking at the regional headlines for the fourth quarter our Canada team launched three new products and new (Audio Gap).

Operator

Your line is now reconnected sir.

Peter Swinburn

Okay, well my apologies everybody, I am not quite sure what happened there and I don’t know how much everybody. So, for completeness I am going to start from the beginning again.

Underlying earnings for our company increased more than 85% in the fourth quarter versus a year ago driven by a one time reduction in tax rate. Behind the headline number our results were affected by weak volumes across all market cost inflation in the U.S. and UK and brand investments in Canada.

Overall consumer demand remained sluggish and we see these conditions continuing to impact volume and mix in the near term. Our strategy remains consistent however, as we are focused on investing and innovation on our brands and ensuring we maintain a strong balance sheet so that when market conditions improve we are better positioned to accelerate our growth and capitalize on opportunities.

Our performance in the quarter under the past year has benefited from the strategic focus. While our underlying earnings in the fourth quarter were aided by one time reduction in our tax rate, it’s important to point out that we grew or held our net pricing our market share in both the U.S. and Canada. Our Canada share performance represented a significant trend improvement from previous quarters.

In the UK we continued to forego low profit volume and share which helps us drive positive pricing and margins. For the full year we expanded our brand portfolios in Canada and the UK exceeded our goals for cost savings and maintained price discipline all of which contributed to a significant increase in our full year underlying earnings.

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