Good day, and welcome to the Molson Coors Beverage Company's Second Quarter Fiscal Year 2022 Earnings Conference Call. You can find related slides on the Investor Relations page of Molson Coor's website. Our speakers today are Gavin Hattersley, President and Chief Executive Officer; and Tracey Joubert, Chief Financial Officer. With that, I'll hand over to Greg Tierney, Vice President of FP&A and Investor Relations to begin. Greg, please go ahead.

Thank you, operator, and hello, everyone. Following prepared remarks today from Gavin and Tracey, we will take your questions. In an effort to address as many questions as possible, we ask that you limit yourself to 1 question. If you have more than 1 question, we'll answer your first question and then ask you to re-enter the queue for any additional or follow-up questions. If you have technical questions on the quarter, please pick them up with our IR team in the days and the weeks that follow. Today's discussion includes forward-looking statements. Actual results or trends could differ materially from our forecast. For more information, please refer to the risk factors discussed in our most recent filings with the SEC. We assume no obligation to update forward-looking statements. GAAP reconciliations for any non-U.S. GAAP measures are included in our news release and also unless otherwise indicated, all financial results the company discusses are versus the comparable prior year period in U.S. dollars and in constant currency when discussing percentage changes from the prior year period. With that, over to you, Gavin.

Thanks, Greg. In the second quarter of 2022, we achieved our expectations and continued to execute our revitalization plan, despite a soft industry, global inflationary pressures and Quebec labor strike at our Montreal brewery. Globally, we have now recorded revenue growth on a constant currency basis. Molson Coors grew dollar share in the U.S. in the 13-week quarter, both of which have not been achieved in over a decade. What’s more, we’re 1 of only 2 major beer companies to achieve dollar share growth in the 13-week time frame. In Canada, Molson Coors grew volume and share when you factor out Quebec due to the Quebec labor strike. In the U.K., Molson Coors grew share and achieved the highest on-premise trailing 12-month average share also in over a decade. And we are currently the largest share gainer of the U.K. beer industry. So in aggregate, across our 3 largest markets, we are outpacing the industry and continuing to grow the top line globally. And these results are no accident. They're not a coincidence. These are the rewards of our continued commitment to and execution of the revitalization plan. So our plan is working and that fact gives us continued confidence that we are on track to deliver on our guidance for 2022. You can see it in our core brands with stronger brand fundamentals and consistent investments since we launched the revitalization plan of paying off. In the second quarter, Coors Light and Miller Lite achieved the best quarterly industry share performance in the U.S. in nearly 7 years. While Miller Lite grew share of industry in the quarter, as I mentioned last quarter, these results are driven by clear distinctive positioning of our 2 biggest brands and more effective marketing. We are demonstrating the power of our biggest brands,…

For the second quarter, we delivered another quarter of top line growth on a constant currency basis and achieved income before income tax at the favorable end of our anticipated range, while we continue to invest in our business, reduce net debt and return cash to shareholders. We did this while navigating global inflationary pressures, the Quebec labor strike and starting a strong shipment quarter in the prior year. Our performance and our organizational agility demonstrates our successes against our revitalization plan. And it's the efforts and outcomes of that plan that provide us the confidence to reaffirm our guidance which calls for both top and bottom line growth for the year. Now I'll take you through our core key performance and our outlook. Consolidated net sales revenue increased 2.2%, driven by strong EMEA and APAC growth. As restrictions have eased, we have seen sequential improvement in the on-premise performance with variations by market and total net sales revenues returned to 99% of 2019 levels. Consolidated net sales revenue growth was driven by strong global net pricing, favorable sales mix from portfolio premiumization, and positive channel mix. These factors were partially offset by lower financial volumes. Consolidated financial volumes decreased 4.6% as we cycle distributed inventory recovery efforts in the second quarter of 2021. The impacts of the Quebec labor strike as well as lower U.S. economy brand volumes driven by our SKU deprioritization and rationalization program that started in the second quarter of 2021. These factors were partially offset by strong financial and volume growth both in EMEA and APAC due to higher brand volumes and factored volumes, along with growth in our U.S. Above Premium portfolio. Net sales per hectolitre on a brand volume basis increased 7.1% driven by global net pricing and positive brand and channel mix,…

Our first question comes from Kevin Grundy of Jefferies.

I wanted to pick up on your guidance, perhaps a question for both of you. So reaffirm for the year, the back half still implies a pretty sharp ramp in underlying EBT growth. So I'm not asking you to kind of go through or parse through all of that again. But it would appear that the market seems to harbor some concern on the achievability of that. Maybe just discuss your visibility on the mid-single-digit, underlying sales growth for the year, some of the building blocks around that category growth, brand growth, et cetera. And then also just touch on the visibility from a cost perspective and some of the margin drivers in order to deliver sharply higher EBT growth in the back half of the year.

Thanks, Kevin. Look, you're right, okay, I won't rehash everything, Tracey said in her opening remarks, but let me just start off by saying we did in the second quarter, exactly what we said we were going to do. In fact, we did it at the lower end or the better end of the guidance that we gave the market after the second quarter -- the first quarter, sorry, in the second quarter. So where do we stand right now, right? I mean we had an 11-week strike in the second quarter, which we obviously knew about the strike, and that's why we guided you to where we did. But we grew dollar share in the U.S. on a 13-quarter week basis. And we're 1 of only 2 major beer companies to actually achieve dollar share growth in the 13-week time frame. We've got the fastest-growing Hard Seltzer portfolio. Coors Light and Miller Lite are really strong, and they had their best quarterly industry share performance in the U.S., our both premium brands hit record highs. Our U.S. economy beer portfolio has had its best quarterly performance versus the industry in 3 years. Our revenue is holding up. That's evidenced by the fact that our share is doing really well despite the fact that we put a price increase in the earlier part of this year. It gives us confidence to put another price increase then, as Tracey said, in the back half of the year. So notwithstanding everything that's happened, our brand portfolio is strong, whether that's in the United States or whether it's in Canada or whether it's in Europe, and we feel very good about building off of that. And as I said, look, I'm not going to rehash everything Tracey said, and I don't think you should either, but I mean do you want to make a comment about the cost environment that Kevin referenced.

Yes. So Kevin, maybe just a little bit of context, I'll just talk about firstly our COGS per hectoliter in Q2. So we reported an 11.5% underlying cost per hectoliter increase. So if I break that down, inflation was 570 basis points of that. And then the mix, our premiumization of our portfolio was 300 basis points. So we always look at that as a good thing driving the premiumization. And then deleverage was 210 basis points driven by, as we said, the inventory goals last year in the U.S. and the Quebec strike. So those are the big drivers of our COGS per hectolitre in the second quarter. As we look out then to the balance of the year, I mean, we expect inflationary pressures to continue. But we do expect to mitigate some of that through our hedging and our cost savings program. So in terms of the hedging coverage, as we look out over the balance of 2022, we're very comfortable with our hedge position. We continue to make good progress against our cost savings program, and we expect the realization of some of those savings under our program to be weighted to the fourth quarter of this year. And then as I also mentioned, I think it's very important to understand that the deleverage that we saw in Q2, we don't expect to see a similar deleverage impact in the second half of the year to what we saw in Q2. So I would just consider those big drivers as you look out at the back half of the year as it relates to our costs.

Our next question comes from Eric Serotta of Morgan Stanley.

I know you guys don't give monthly STRs anymore, but Gavin, hoping to get some at least qualitative color for you -- from you as to what you're seeing in terms of the beer market -- the U.S. beer market as the summer has unfolded. Heard July 4 was generally solid for most of the industry, but then have heard some mixed things as July unfolded. Hoping to get your perspective.

Yes. Thanks, Eric. Look, you're right. I mean we don't give monthly guidance. We stopped doing that a while ago. I think you can see our performance in the share data that comes out from a Nielsen or an IRR basis, which is publicly available data. And I can reiterate what I just said from a share point of view. Our brands are growing share, not only in the United States from a dollar point of view, but also in Canada and also in our third other big market, which is the U.K. So we're continuing to build on the strength which we delivered in Q2. We've got some really positive innovations, which have only just hit the market. I talked about Simply Spiked. That brand has really just taken off. We've already exceeded our business case for the year. We're ramping up supply as quickly as we possibly can to meet demand, which has frankly surprised us. We've accelerated the in-housing of Simply into the Fort Worth brewery for 2 -- I mean, we weren't planning to do that until next year, frankly, but demand is so strong that we brought it in-house, and we did that in a record time. I think it took us about 6 weeks to get it into the brewery and we're getting cost savings and ramping up supply into the market. So I would expect our share trends in the flavored malt beverage space to accelerate as we're going forward. And without wishing to rehash everything I said about Miller Lite and Coors Light and our Above Premium space, we're in a great share position. And Tracey mentioned some of the headwinds which go away for us in the second half. I mean we -- essentially last Christmas in the U.K. and Europe, and it's a really important time period for that business last year, and we're obviously not expecting to lose it again this year. And we're coming out of the Canadian Montreal, Quebec strike. All of Canada's volume loss that took place in the second quarter came out of Quebec. If it hadn't been for the strike, we would have -- but we did grow volumes outside of Quebec. And as we ramp up supply into the third quarter and specifically the fourth quarter, I would expect to see the improvements there. So I think we had a strong quarter. We had a strong quarter, despite the soft industry, despite the global inflationary pressures and the labor strike and we delivered what we said we're going to deliver and at the better end of that.

Our next question comes from Nadine Sarwat of Alliance Bernstein.

So first question, you mentioned 3% to 5% in certain markets in Q4. Can I just confirm that this is incremental, so in addition to pricing taken year to date, what is the pricing impact at a national level? Not just certain markets but national. And is this fully baked into your mid-single-digit top line guidance? And then 1 very quick follow-up. I appreciate you already gave some comments on COGS, and you touched on your hedging strategy, should imply you do have good visibility into next year. So are you expecting your COGS headwinds from input costs in 2023 to be smaller or greater than the headwinds you're expecting to face in full year '22?

Thanks, Nadine. I'll let Tracey answer the COGS question, but from a pricing point of view, just -- let me just clarify some of those comments you made. So the 3% to 5% is on a national average basis. So we expect to take pricing in that range on a national basis on average in the -- it will hit primarily in the fourth quarter and probably that will come towards the end of the third. That means that in some markets, we'll take above 5%, and in some markets, we'll take below 3%. But on average, we expect it to land in that range. And then secondly, yes, it is incremental to the pricing we already took in the beginning of this year. And yes, it is bakes into our expectations for the full year. Trace, do you want to take COGS, cover the COGS question?

So Nadine, from a COGS point of view, the 1 thing I can tell you is, I think I've spoken about our hedging program and how we hedge. And so if I look at 2023, I mean we're comfortable with our hedge position as we stand today. In terms of other drivers of our cost for next year, we haven’t given guidance on that. But there’s a couple of things obviously, looking at commodities all the time. We see freight rates coming down on some commodities that are growing up, so it’s a little bit of a mix bag at the moment. And costs going forward – there’s still a lot of uncertainty, but its something that obviously we continue to look at as we get into next year, we’ll talk a little bit more about our asset for 2023.

Our next question comes from Bryan Spillane of Bank of America.

So I just -- again, just thinking about the back half of the year, I guess, if I'm just replaying what we've heard on the call today, you've got some incremental pricing, which will flow through the fourth quarter. There is a residual impact from the Canadian strike, which now you have to absorb. And then the only other piece that's really changed is, I think, Gavin, you talked about just, I don't know, some expectation for the market to moderate. So I had that right, and I'm not sure how big Canadian residual is, but it really just seems like if anything, the pricing still gives you net a little bit more cushion, if you will. And with regards to which way the market might move if it gets more slows more or not. So I just want to make sure that I'm contextualizing that right? Because I think, again, as I think Kevin Grundy pointed out, I think there's still a lot of concerned about the back half, and it seems like 2Q, you landed right in the middle of the fairway. It always implied that a lot of the leverage in the back was always going to be in the back half of the year. It just seems like you actually have a little bit more cushion with the pricing now than you did before, even in the context of some of the maybe incremental headwinds.

Well, Bryan, to advance that golfing, yes, I think we landed in the middle of the fairway, maybe about 10 yards further than than we expected. We didn’t really – we didn’t obviously head into our guidance the voluntary product withdrawal. I think the Montreal went on just a couple of weeks longer than we were expecting it to. And despite all that, as you said, we landed in the middle of the fairway. Well, what's changed, right? I mean we knew we were going to take a price increase in the fall. We're probably going to get a little more than we were expecting. So it was our expectation that we're going to get it. But we're probably taking a little bit more, as I said. I think the overall industry is maybe just a little softer than we had expected. And when you add all of these things up, that gives us the confidence to deliver what we said we're going to deliver, Bryan. I don't know if that's helpful.

Yes. No, that is helpful, but that's helpful. And Gavin, if I could just follow up the softness. Is that more on-premise versus off-premise? Just if you could give us a little context of just where you're starting to see a little bit of that softening, just as we're watching it from the outside, maybe what we should be monitoring?

Well, if you look at our 3 big markets, Bryan, in the U.K. from an on-premise point of view, it's settled down very close to 2019 levels. So I think in the first part of the quarter, it was a tad below and in June, it was a tad above. So call it, 98% of 2019 prepandemic levels in the U.K. In Canada, it's a little bit more tricky for us, right, because Quebec is an important on-premise market, and we were constrained in supply in Quebec. But even outside of the Quebec market, Canada has lagged the rest of the world in terms of consumers' propensity to get back into the on-premise. And in the U.S., Bryan, which is obviously our biggest market, it has settled down in the sort of 85% to at the top end sometimes 90% level. And I think that's probably where it's going to settle until circuit back into the big cities like New York and Chicago, and start visiting bars and restaurants on a more regular basis. I think commuting and office work habits have changed fairly meaningfully through the pandemic. And obviously, that's hitting the bigger market. So I would say it's probably more in the off-premise side than in the on-premise side that, that comment applies to.

Our next question comes from Chris Carey of Wells Fargo.

So I just had one quick confirmation and then just a follow-up on Bryan's question around pricing. So just on the confirming 1 thing around the Economy SKU exit. Had you always expected those to go into the back half of the year? My understanding was those would mostly be done by Q2, but perhaps it's just taking a little bit longer to get those out of the system. So that's just kind of a follow-up. And then maybe just -- trying to maybe frame just a level of confidence on the pricing in Q4. Specifically, if you're pricing, I guess the category, which you expect to be a little bit softer in the back half from a volume perspective, right, because the volumes are weaker, and that was kind of what drove the deleveraging on the cost per hectoliter line. And so it sounds like you're being pretty targeted about the pricing in some areas over 5, some areas below 5. So it certainly sounds like you're pricing in areas where gives confidence that brands can withstand the higher rate. But I'd love to maybe just get a little bit more context on just the level of comfort that the pricing won't accelerate elasticities. So thanks for the follow up on the SKU axis and that commentary around pricing.

Thanks, Chris. Okay. So on the SKU rationalization and the discontinuation of some of our Economy brands, there's 2 sides to this, right? From an STW perspective, that has a quicker impact than an STR or brand volume perspective. Because obviously, from an STR perspective, both our distributors and our retailers had inventory on hand of the brands that we discontinued. And so they continued to sell those until they sort of ran out, right? And that would take place, frankly, more towards the back end of the third quarter and into the fourth. From a shipment point of view, obviously, when we had the cybersecurity attack, we stopped shipping a bunch of Economy brands and we started picking those back up again, some of them towards the end of Q2, but predominantly in the end of Q3. So from a shipment point of view, the benefit is sooner than from an STR point of view. So if that -- hope I explained that, that okay. From a pricing point of view, look, I mean, we feel confident about putting pricing into the marketplace behind our brands. If you look at the peer CPI versus the national average CPI, even after putting these price increases into the market, we'll still be less than that and we're substantially less than some of the other products, which consumers are buying, whether it's eggs or bread or milk or gas, whatever. I mean we're substantially lower than those levels and lower than overall national average CPI. Our brands have also held up really well in the last sort of 4, 5 months since we put the overall price increase in place. I mean I don't think it's a coincidence as I said, that we're growing share. We’re 1 of only 2 major beer companies in the United States to deliver dollar share growth in the 13-week time period. So we feel very good about the strength of our brands and the ability of them to absorb more pricing in the fall.

Our next question comes from Kaumil Gajrawala of Credit Suisse.

A question on the volume deleverage, 210 basis points, I guess. Are you able to break out how much of that was onetime related to the brewery issues and such versus just a slower overall industry volume growth rate?

I guess you're asking to break down the industry -- the shipment decline, Kaumil. And I would say that the overall North American shipment decline was driven primarily by 2 things, right? One was the strike in Canada, which was the entirety of the Canadian volume loss. And the second 1 was obviously the -- I think I said this on the call last time around, we pulled out every stop we possibly could in the second quarter of last year to try and recover from a devastating cybersecurity attack. So we were shipping beer all over the country, we were -- folks were working long hours, over time, everything to try and make sure that we got as much beer out to the distributors. And that was inefficient and it cost us a bunch of money last year to do that. Obviously, this year, we're in a much more normal environment given our inventory levels. And we're not making sort of -- we -- our service levels are where we need them to be. So we're not having to ship beer all over the country at a higher cost in the second and the third quarters to meet that demand. And because of that, obviously, our shipments are a lot less. So that would be the biggest impact from a deleverage point of view. And the second biggest would be obviously our Canadian volumes. Our overall plan for the year is to ship to consumption, Kaumil. So that's generally our plan. We have shipped less than retail so far. And we'll get the deleverage benefit going forward. I don't really think deleverage will be a driver for us in Q2. In other words, a negative drag. Sorry, not in the second half -- yes, it won't be a negative driver for us in H2.

Got it. Okay. That's what I was going to clarify. Just to make sure on the spread between shipments and takeaway. Obviously, you've got this wild comp. But if you're happy with inventory levels, does that mean in the back half shipments to roughly align with STRs?

our plan for the full year is to shift to consumption, Kaumil. We've got work to do in Canada to catch up with what happened with the strike, right? I mean, obviously, having an 11-week strike at a really big plant like that is not a positive for us. And it will take us the whole of Q3 and into Q4 to recover from that. So certainly from a Canadian point of view, we will be shipping -- my expectation we would be shipping higher than we were selling. In the U.S., I think we shipped below STRs in the first half. And so you can expect that we will align that over the full year.

Our next question comes from Andrea Teixeira of JPMorgan.

This is Drew Levine on for Andrea. I just really had two clarifications, if I may. On the incremental pricing slated for the fourth quarter, it sounded like the company is not really building in any sort of incremental volume decline or elasticity from the pricing increase, relative to kind of what was built into the guidance before? And then the second 1 is just on the MG&A. I think in the first quarter, you said it was slated to be up double digit on marketing and then in the second quarter, and it came in somewhat below that. Just curious if there was anything you saw to pull back on or if it was just kind of didn't see enough opportunity to deploy more spending?

Thanks, Drew. Look, I mean, from a marketing perspective, obviously, we don't manage our marketing spend on a quarter-by-quarter basis. We manage it over the year, and we manage it long -- for the long term. And we frankly don't always spend marketing in the same quarter as we did in the previous year, depending on what happens. Specifically to your question, though, obviously, the Quebec strike went on a little longer than we expected, and it made no sense for us to be marketing up in Canada when we were not able to supply. And so we did spend less in marketing, particularly in Canada than we were originally intending, because of the fact that we had the strike and at some point, we didn't have any beer to sales. So that was, I think, probably a good decision on our part. Outside of Quebec, we increased our marketing spend across the board. And we had some marketing spend. Simply launch, as I said, has just been off the charts good. And we don't normally launch innovations in the time period that we'd launched Simply. We normally do them earlier than that. So there's a bit of marketing spend that's coming through in Q2 there. From a pricing point of view, obviously, we do watch what our brand's performance is when we put pricing into the market. We watch very carefully how it performs and what the elasticity is. I think we said on the Q1 call that elasticity wasn't as high as 1 would have expected given the pricing that we put into the marketplace in January and February of this year. And we'll do the same thing again with this price increase. We'll watch the elasticities and we'll watch how our brands perform in the market very carefully. But without rehashing what I said, our brand performance from a share point of view is strong, and we're pleased with it.

Our next question comes from Vivien Azer from Cowen.

Gavin, I wanted to get your perspective on the interaction that you're seeing in some of the important subcategories that you participate. In the U.S., we've heard from 1 of your key competitors in the Hard Seltzer category that they believe that there is some heightened interaction between Hard Seltzers and Premium Lights, I'd love to get your perspective on that.

Thanks, Vivien. Look, I mean, the strength of Miller Lite and Coors is like long predated, the softness of some of our competitors seltzers. So you can take from that what you wish. But I think our Miller Lite and Coors Light brand performance has been very strong for quite some time now. And that's because they've got great differentiated marketing programs and are really nice and healthy. I mean we had the best quarterly industry share performance in the U.S. in nearly 7 years. And potentially when you look at the outstanding performance of Topo Chico Hard Seltzer, its something which might be driving the softness of some of our competitors. I mean our market share has grown 25%, as I said, and that's largely driven by Topo Chico, which is actually doing really well in markets where the Topo Chico name is not necessarily that well known. We're getting we're getting strong growth in market shares in those markets. So I guess that's what I would say, Vivien.

Our next question comes from Lauren Lieberman of Barclays.

We've covered so much on the call, so I'll let it go and look forward to catching up with you guys in person soon.

Our next question comes from Steve Powers of Deutsche Bank.

I'll ask 1 just to keep it going. So I wanted to pick up on the marketing comments, Gavin. You explained the 2 key dynamics, I think, pretty clearly. And Tracey called at the start, your overall comfort with second half marketing plans. I guess what I'm just left with is on a full year basis, have marketing intentions or plans undergone any changes versus where we were coming out of the first quarter, whether either in overall magnitude or focus, given what you've seen in the marketplace, some of the pockets of softness you called out? I mean, that's really the main question. I guess the second part of that would be things trend a little bit better than maybe your base case in the back half given places where you've got momentum like Simply or Topo Chico or what have you -- would the -- is the -- is the bias that you would invest some of that upside against some of those momentum? Or is the marketing plan pretty well fixed at this point?

I think, Steve, one of the -- any positives that come out of the pandemic. One of them is that it's driven us to be way more flexible and agile than we were maybe 3 years ago. And our marketing team is a particular personification of that. They really are agile in terms of how they spend their money and where they spend their money, pushing behind things that are working, shifting dollars to things that are really doing great and maybe dialing back on things where they're not doing that well. So I would say to you that we are very flexible. We are very agile and we're very happy to lean into things that are working. I think Simply would be an example of that. It's performing so much better than we expected. And I would expect that we'll put a bit more fuel behind that fire as we go forward. So we're very flexible, Steve. We obviously do have a plan that we come into the year with and the team adjusts as and when it makes more sense for us. I mean the work which that they have done together with finance and the other teams from an ROI point of view continues to get better and better and the teams know what works and what doesn't work and pretty flexible in changing that on the fly.

Our Next question comes from Rob Ottenstein of Evercore.

Two questions, maybe borrowing 1 from Lauren. First, can you give us -- I mean, a lot of moving pieces here, trying to understand the U.S. business given the rationalization of the Economy SKUs and then the addition of all the different seltzers. I was just wondering if you could give us a sense of what kind of the core traditional beer business did on an apples-to-apples basis in terms of volumes. Is that something you can ballpark for us?

Well, look, from an overall perspective, I think Miller Lite and Coors Light, which is 2/3 of our U.S. business, Robert, both of those brands grew the top line in the quarter. They grew share in the quarter, and they are doing -- they're well positioned and doing well. In terms of individual brand volumes, Robert, we don't have plans to disclose that at this point.

No, I understand that, but just in aggregate is -- just in terms of a volume number in aggregate, the core beer volumes, so we can adjust for the impact of the Economy brands and all the seltzers.

Yes. Robert, I'm not going to give you individual brand volume -- that brand volume performance. We don't do that, and I don't plan to.

Okay. Well, you're gaining share, as you had mentioned, and that was 1 of the main drivers and goals of the -- utilization. So kind of stepping back at this point and looking at that plan, are you pretty much done? Is it just kind of continuation of the measures that you've put in place? Or are there particular finishing elements of the revitalization plan that still need to be done? And over the last number of years, you've taken out a lot of costs, part of the program pretty much done now. So just trying to kind of get a sense of where we are with the revitalization plan, given that you've turned around, as you said, Coors Light and gaining share?

Tracey has pointed out that I can tell you that our brand volume declines in the U.S. were driven by the Economy brands. So you can assume from that, that everything else in total grew. So just that piece of context. As far as the revitalization plan is concerned, Robert, from a cost point of view, I mean we're pretty much done. There is a little bit more cost still to come out from the revitalization plan, but it's not meaningful. On -- from a cost point of view, though, we are always looking at taking more efficient ways of doing things in our business. We invest capital in a variety of ways to achieve that. The Simply in-housing, for example, is a fine example of that, right, where we can take our cost down without actually much capital investments in the process. So revitalization costs pretty much done. Ongoing, we've always been looking for ways to be more efficient and that won’t change. From a revitalization plan point of view, obviously, our goal ultimately with the revitalization plan was to drive top line and bottom line growth at the same time and on a consistent basis. And that obviously remains our goal. And this year, we've got guidance out there that says that we will do it. And it's obviously not intended to be a one-off goal for us. It's supposed to be an ongoing goal for us. In terms of making sure that our core brands are healthy and strong. I don't think that 1 can ever say that it's done. We need to stay strong and vigilant behind that, but I think we've made amazing progress there. And we've still got lots of work that we want to do in the Above Premium and the Beyond beer space, Robert. We are doing well. Above Premium is exceeding our economy share of our portfolio. But our ambitions to drive our Above Premium volumes and revenue up doesn't stop there. So we'll continue to invest behind that space, to invest behind the innovations and to drive our emerging growth division with some of the great new brands and relationships that we've got in that space. ZOA, obviously, being 1 of the lead ones.

Terrific. Congratulations on the progress.

Our final question today comes from Peter Grom of UBS.

So Tracey, I know last quarter was a bit of an anomaly in terms of providing a quarterly outlook. But I guess a lot of the commentary from the call today seems to suggest a much stronger fourth quarter versus third quarter. You mentioned pricing, fully lapping the economy headwinds, kind of the brewery disruption in the rearview. So is there any way to kind of frame how we should be thinking about the weighting of growth in the third quarter versus the fourth quarter?

Yes. Let me just say -- let me reiterate our guidance for the full year. But let me kind add some color for you for the third and fourth quarter. So firstly, from a phasing point of view, I would tell you that in Q3, just remember that we're still going to be cycling to some degree, the Economy SKU rationalization. And again, as Gavin mentioned, the Quebec labor strike, even though ended in June, it will take time to ramp that brewery back up with normal shipments not resuming until Q4. So that's in Q3. When we look at Q4, there's several positive drivers, as I've mentioned, that's going to help offset the headwinds in Q3. We spoke about incremental pricing. We've spoken about the top line comparisons really beginning to ease in the fourth quarter with the on-premise restrictions in the fourth quarter of last year. I mentioned the World Cup, which is taking place in November. So that's a big beer drinking event. And then just from an investment point of view, I think Gavin mentioned that we expect to invest more in 2022 than we did in 2021. But in the second half of the year, we expect marketing investment to be down, but in Q3, higher relative year-over-year investments in the third quarter. And then in the fourth quarter, we don't anticipate increases. And then just a final thing to mention is the deleverage impact in the second half of the year. I mean we don't expect to see that deleverage impact that we saw in Q2 of this year. So yes, that's about as much color, I think, that I can give here.

And then just -- that's helpful. Okay. Yes. No. Maybe just a follow-up on 4Q, I mean just what is embedded in terms of the on-premise related COVID-related restrictions? Are you assuming a return to normal or pre-pandemic like environment? Or is it just -- is that comment simply just an expectation for stronger performance versus a year ago?

I think what we're trying to say there is that we're not expecting to have the situation in the fourth quarter of last year as we had in the fourth -- this year, as we had in the fourth quarter last year. So if you -- if you think back to what was happening in Q4 of 2021, the Omicron was fairly rampant, and we pretty much lost the Christmas season in the U.K., which is a big season for us. So we're not assuming the same thing to happen. We're not also assuming unrealistic expectations in terms of, if the U.S. is at 85%, we're assuming something pretty similar to that. But we are assuming better performance out of Canada and U.K. when you compare it with last year, yes. Over to you, Greg.

All right. Very good. Thank you, everyone, for joining us today. I know we did run a little bit over, and there may not -- there may be additional questions we weren't able to answer today. But if you do have further questions, just please follow up with me and the Investor Relations team, and we will look forward to talking with many of you as the rest of the year progresses. Thanks, everybody, and have a great day.

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