Constellation Brands has reported consolidated net sales growth of 3% to $8.6 billion in its financial year ended 28 February 2021.
The company’s consolidated organic net sales increased by 7% in this period compared to the previous financial year.
The beer division saw a year-on-year net sales growth of 8% to $6.07 billion during the financial year, while its wine and spirits business witnessed a 7% decline to $2.5 billion.
Earnings per share amounted to $10.23 despite COVID-related headwinds.
The company generated operating and free cash flow of $2.8 billion and $1.9 billion, respectively, and reduced debt by $1.7 billion during the financial year.
'A Dynamic And Rewarding Year'
Bill Newlands, president and chief executive officer of Constellation Brands, said, “Fiscal 2021 was a dynamic and rewarding year as we produced excellent results while managing the challenges of the pandemic. I’d like to thank the Constellation team for driving success in the face of continued adversity.”
The beer segment saw strong performance in off-premise channels, which more than offset the 51% reduction in on-premise channels due to COVID-19.
The financial year also marked the 11th consecutive year of volume growth in the division, reinforcing Constellation’s position as a leader in the high-end of the US beer industry, driven by the Modelo and Corona Brand Families.
Modelo Especial emerged as the third top-selling beer in the US and continued to be one of the fastest-growing, major imported beer brands with a depletion growth of 12%.
Growth in the Corona Brand Family was fuelled by the successful launch of Corona Hard Seltzer and nearly 20% depletion growth of Corona Premier.
'Strong And Resilient' Performance
Chief financial officer of Constellation Brands, Garth Hankinson, said, “Constellation’s performance remained strong and resilient throughout the pandemic, driving record cash flow results for the year.
“In fiscal 2022, we expect to continue to have significant capital allocation flexibility, which will enable ongoing progress in returning cash to shareholders while making strategic investments to support long-term growth opportunities.”
In the wine and spirits category, efforts to increase distribution of key brands resulted in double-digit distribution gains in off-premise channels for Kim Crawford, Meiomi, The Prisoner Brand Family and High West.
The division’s operating margin decreased 150 basis points to 24.5%, as benefits from price and mix were more than offset by the negative impact of wildfires on COGS, wine and spirits divestitures, and increased marketing and SG&A spend.
In its financial year 2022, Constellation Brands expects net sales in the beer division to grow by 7% - 9%, while operating income is projected to increase in the range of 3% - 5%.
The wine and spirits division will see an overall net sales decline of 22% - 24%, while organic net sales is likely to grow by 2% - 4%.
According to the company’s estimates, operating cash flow will range between $2.4 - $2.6 billion. Capital expenditure will amount to $1.0- $1.1 billion, including approximately $900.0 million targeted for expanding the beer business in Mexico.
Newlands added, “As we head into fiscal 2022, we’re operating from a position of strength. We’re well-positioned for continued execution of our growth and premiumisation strategy with a great portfolio of iconic brands and an exciting innovation agenda.”