TAP Molson Coors Beverage Dashboard

Management Discussion

• Net sales of approximately $2.9 billion in the second quarter of 2021 increased 17.4% from the prior year, primarily due to higher financial volumes, favorable brand and channel mix as well as positive pricing. Financial volume growth of 5.5% was primarily due to improved brand volume growth, particularly in Europe as a result of an increase in on-premise re-openings, as well as favorable shipment timing in the U.S., higher contract brewing and wholesaler volumes. Improved brand volume growth, particularly in Europe, was due to on-premise re-openings, higher above premium and core brand volumes, partially offset by lower economy brand volumes.
• During the second quarter of 2021, we recognized net income attributable to MCBC of $388.6 million compared to $195.0 million in the prior year. The increase was primarily due to higher financial volumes, favorable net pricing, positive brand and channel mix, lower tax expense, lower special items charges, as well as favorable unrealized gains in our mark-to-market commodity positions, partially offset by higher marketing, general and administrative ("MG&A") expense and higher cost of goods sold inflation, including higher transportation, brewery and packaging material costs.
• •In our North America segment, income before income taxes increased 4.1% to $428.2 million in the second quarter of 2021, compared to $411.5 million in the prior year primarily due to net pricing increases, lower special items charges, favorable brand mix in the U.S., cost savings in cost of goods sold, higher financial volumes and the cycling of prior year charges for temporary "thank you" pay for certain essential North America brewery employees, partially offset by higher MG&A expense and inflation within cost of goods sold, including higher transportation, brewery and packaging material costs, increased inventory obsolescence, as well as the cycling of favorable prior year resolution of a property tax appeal for the Golden, Colorado brewery. The higher MG&A expense reflects increased marketing investment on innovation brands as well as the cycling of lower spending in the prior year in areas impacted by the coronavirus pandemic.