Okay. Well, good morning, ladies and gentlemen. Good morning, ladies and gentlemen. It's my pleasure to welcome you to our AGM. My name is Pete Coors, and as Chairman of the Board, I will be conducting our meeting today. I'll try to do this in French. I'm pleased to see our Quebec employees and shareholders today. Thank you for joining us. It is always a pleasure to be in the beautiful city of Montreal for this year's annual assembly. They couldn't understand my French. I'm just very pleased to see our Quebec employees and shareholders today. Thank you for joining us. It is always a pleasure to be in the beautiful city of Montreal for this year's annual meeting.
As you know, our company is headquartered both here in Montreal and in Denver. We rotate the venue of our annual meeting every year, which gives us a chance to talk with our shareholders and employees in both our headquarter cities. I'll start the meeting with a few opening remarks. Then we'll move right into the formal business of the meeting. 2018 was a difficult year for us in many ways. We faced some tough industry conditions, but we also had a few missteps as well that were within our control that hurt our performance during the year. Despite this, we delivered financial and commercial results that demonstrate our balanced priorities on the top and bottom line.
We delivered strong free cash flow, underlying EBITDA growth, and further scaled our cost savings program, which insulated us in part from the effects of weaker industry demand in North America, higher than anticipated input inflationary pressures, and challenges associated with the implementation of our U.S. Brewery IT system. Our integration work streams drove added productivity and savings. Our commercial teams strengthened our brand portfolio and our customer relationships. The important thing is that we learned a great deal from last year, and we have picked up the pace as a company in terms of transforming our business to ignite growth and deliver stronger returns for our shareholders. We continue to retool at the front end of our business in terms of delivering our portfolio. As we increase investment behind our innovation agenda, we have more arrows in our quiver as we look ahead.
At the same time, we are transforming our support functions and building a more efficient supply chain network globally. You all know that we have a new brewery coming online this summer in Chilliwack, British Columbia. We have broken ground on the new brewery we are building in the greater Montreal area. Evidently, the foundation is now pretty much poured. We're making great progress in that regard. There is still much more work to be done. Mark, the executive leadership team, and the rest of our global leaders can be proud as they have helped build Molson Coors into what is now one of the world's leading global brewers.
To be sure, the beer industry has been challenging environment, we are committed to doing a better job on our brands in terms of volume performance, particularly in North America, and to accelerating our growth opportunities internationally. We certainly won't be thrown off by a tough year. Mark is going to share more this morning on specific strategies to grow our business and to drive long-term shareholder returns. Let me say on behalf of the rest of the board that we are fully supportive of the strategy that this leadership team has laid out in terms of the focus and commercial excellence, building out the high end of our portfolio, innovation, and strict cost discipline.
I know we have a very talented and capable team across the organization, I look forward to seeing how we can take advantage of our new growth opportunities in the years ahead. At this point, let me also take this time to add my thanks to our other directors who are here today, who I'll introduce in a bit, for their support and total engagement in our business. Our board members play a critical role in our strategic decision-making, all of them have been very committed to supporting the company's growth agenda. As you know, every two years, we rotate the chairmanship of the board between Molson and the Coors families. This meeting marks the end of my two-year term as chairman.
Pursuant to this, the Class A-M Nominating Subcommittee has asked the board to concur with its appointment of Andrew Molson as the next chairman of Molson Coors Brewing Company starting tomorrow. I get a few more hours. Andrew is the seventh-generation member of the Molson family and is our long and shared heritage in family brewing that makes the rotating chairmanship such a special and important practice for us. At this point in time, I'd like to have Andrew come up and offer a few introductory remarks as well before we get started with the official proceedings. Andrew.
Merci, Pete. Thanks, Pete. [Foreign language] Good morning, everyone. It's with great pleasure and enthusiasm that I start my mandate as head of the board of directors for the two next years. Pete, I would like to thank our board of directors for their contribution and dedication to Molson Coors Brewing Company. I know that Mark and his team value the input of each and every one of our board members as our company strives towards continuous improvement. Pete, thank you for chairing our board meetings for the past two years. Most of all, thank you for continuing to share your deep industry knowledge with all of us. As long-term committed shareholders in beer, the contribution of our savoir faire, our knowledge, is essential for the culture and the future of our company.
Our focus on passion, commitment, and hard work has enabled us, as a company, to stand the test of time successfully. Pete, you represent those things. Thank you. As you will hear from Mark in a moment, Molson Coors is more dynamic than ever, with entrepreneurial activity in Europe, the United States, Canada, and elsewhere. Mark will also speak about our role as a corporate citizen. We continue to promote responsible consumption and conduct our brewing in a sustainable way. In closing, I would like to also thank our shareholders, our employees, our customers, and all of our business partners for their ongoing trust. Thanks to you, it is with determination, optimism, and pleasure that we launch into our 233rd year in operation in an industry flush with many challenges and extraordinary opportunities. Merci. Thank you.
Andrew, thank you very much. It's not in my script, but I would like to recognize Geoff Molson, who has served over the last 2 years as our Vice Chairman and who sits up here on the dais with us. He's been a good source of inspiration and support during the last couple of years. I'd also like to recognize Eric Molson, who's our director of Americas, and Jane, who's with him here today. Eric and I cobbled this thing together more than almost 15 years ago, I guess, Eric.
Yeah.
It was before that when we started chatting and thinking about this would be a good thing, and it's been a fantastic relationship, and it's great to have you here with us today. I'd like to formally open the business portion of the meeting. Let me begin by introducing the individuals who are seated with me at this table. To my right is Geoff, who we've already introduced as Vice Chairman of the board for another 6 hours or so. To his right is Andrew Molson, who is incoming Chairman. To Andrew's right is Mark Hunter, President, Chief Executive Officer, and member of the board, whom you'll be hearing from shortly. On my left is Tracey Joubert, who is our Chief Financial Officer.
To her left is Lee Reichert, Chief Legal and Corporate Affairs Officer and Corporate Secretary, who will act as secretary of this annual meeting. Next, I'd like to introduce the other members of our board of directors who are present this morning. I'd like to ask them to stand briefly and be recognized as I call their names. Peter J. Coors, Betty DeVita, Roger Eaton, Mary Lynn Ferguson-McHugh, Charles Herington, Franklin Fritz Hobbs, Iain Napier, Sandy Riley, Douglas "Doug" Tough, and Louis Vachon. We also have here today Tom Holman and Ray Garcia, representatives from PricewaterhouseCoopers, our independent registered public accounting firm. They will be available to respond to questions and may make a statement if they so desire later in the meeting. Let's proceed to today's business. We plan to wrap up the meeting no later than noon. Here's how the meeting should flow.
I'd like to assure you that we will cover each issue adequately and give as many stockholders as possible an opportunity to speak if they so desire. Only stockholders or their duly appointed proxies are authorized to address this annual meeting. There are three proposals we will vote on at this meeting. Here's how we'll conduct the comments to the three proposals and the question and answer session with regard to these proposals. After all the proposals are presented, if you would like to make a comment or have a question for us regarding the proposals, make your way to the microphone here in the middle of the room and form a single line.
If you don't have a comment on a specific proposal but would like to address the meeting, you will have an opportunity to do so in the general Q&A session after the business portion of the meeting is concluded. If you have a comment, please come to one of the microphones at the front of the room. When it is your turn to speak, I will acknowledge you. Please introduce yourself and whom you represent if you're an appointed proxy. Then proceed with your comment or question. Please address all your questions to the chair. I'll answer your question, or will ask one of my colleagues to respond where and when appropriate. One final point, if you need a ballot, please raise your hand now. We'll have somebody bring you one.
Please note that you do not need a ballot if you have already voted, unless you wish to change your vote. Anybody want a ballot at this point? I don't see any hands. We'll proceed. The polls will be open until the end of the business portion of the meeting, at which time all the ballots will be collected and reported. Lee, would you please present the secretary's report?
Thank you, Pete. Broadridge Financial Solutions has provided the company with a written affidavit confirming that the notice of internet availability of proxy materials for this annual meeting was mailed on or about April 4th, 2019, to all stockholders of record as of March 28th, 2019. Our Inspector of Elections, also from Broadridge, advises that we have a quorum with respect to both Class A shares and Class B shares as follows. Approximately 96% of the total Class A shares eligible to vote are present in person or by proxy. Approximately 89% of the total Class B shares eligible to vote are present in person or by proxy.
Thank you, Lee. The polls are now open and will remain open until the end of the business portion of the meeting. Lee, would you please present each of the three matters to be voted upon?
The first matter is the election of the Class A and Class B directors. The company's bylaws require that each Class A and Class B director stand for election each year. The holders of the Class A shares as of the record date are entitled and are being asked to vote on the election of the Class A directors. The following individuals have been nominated for election as Class A directors for one-year terms expiring at the 2020 annual meeting: Peter J. Coors, Peter J. Coors, Betty DeVita, Mary Lynn Ferguson-McHugh, Franklin Hobbs, Mark Hunter, Andrew Molson, Geoff Molson, Iain Napier, Doug Tough, and Louis Vachon. The holders of the Class B shares as of the record date are entitled and are being asked to vote on the election of the Class B directors.
The following individuals have been nominated for election as Class B directors for one-year terms expiring at the 2020 annual meeting: Roger Eaton, Charles Herington, and Sanford Riley. Secondly, the board of directors is asking the holders of the Class A shares and Class B shares as of the record date, voting together as a single class to approve on an advisory basis the compensation of the company's named executive officers. This proposal is also referred to as a say on pay vote. Finally, the board of directors is asking the holders of the Class A shares as of the record date to ratify the appointment of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the fiscal year 2019.
Thank you, Lee. Is there any discussion or questions about these proposals to come before us today? Okay. Hearing none, we will move on to the voting procedures. Again, the polls remain open for voting, if anybody wants to change their vote or vote initially. Until the polls close, any stockholder of record or duly appointed proxy may revoke or change a prior vote on any matter. However, upon the closing of the polls, no ballots, proxies, or votes, nor any revocations or changes would be accepted. For those of you completing ballots this morning, please raise your hand now and an attendant in the room will collect your ballot. Your vote will be tallied this afternoon and included in the final vote. Okay.
Before I close the meeting and move to a report from our President and Chief Executive Officer and our question and answer period, I would like to ask Lee Reichert for the preliminary vote this morning.
Thank you, Pete. The Inspector of Election reports that each nominee for election as a Class A director and each nominee for election as a Class B director has received a sufficient number of votes cast in favor for his or her election. Therefore, all of the Class A and Class B director candidates have been elected to serve as directors until the 2020 annual meeting. The non-binding advisory vote to approve the compensation of named executive officers has also been approved. Finally, the proposal to ratify the appointment of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for fiscal year 2019 has also been approved.
Thank you again, Lee Reichert, and thank you all for voting. Since those desiring to vote by ballot have done so, I can now declare the polls closed. Is there any other business properly brought before this meeting? I see none. If not, I hereby close the business portion of this meeting, and now we'd like to invite Mark Hunter, our President and Chief Executive Officer, to share his view on the state of the business, which will be followed by a Q&A. Mark?
Thank you, Pete. [Foreign language] and Good morning. Thank you for being here in Canada. I only speak a little French, and I will speak in English, please. I'm relieved. Good day, everyone. On behalf of the team here from Molson Coors, thank you for joining us today. Before we start, I'd like to share our safe harbor language. Our presentation today contains forward-looking statements within the meaning of U.S. federal securities laws. Important factors that could cause actual results to differ materially from the company's projections and expectations are disclosed in the company's filings with the Securities and Exchange Commission. Regarding any non-U.S. GAAP performance measures that we may discuss today, please visit the investor relations page of our website at www.molsoncoors.com for a reconciliation of these measures to the nearest U.S. GAAP results.
Today, I'll cover an overview of Molson Coors and our business strategy designed to build our competitive position and deliver value to our shareholders. In 2018, we generated net sales of approximately $10.8 billion, worldwide brand volume of approximately 92 million hectoliters, and underlying EBITDA of approximately $2.5 billion. As you can see, our business is anchored in developed markets, with the U.S. as our largest business unit, followed by Europe and Canada, and then a rapidly developing international business. Our portfolio of international beer brands and operating model at the core of our business offers an attractive source of accelerating growth and cash flow across multiple markets.
At the end of 2016, we completed the largest transaction in our company's history, we've made steady progress since the MillerCoors acquisition, delivering on all integration work streams and initiatives, guiding to synergies and cost savings now totaling $700 million for the period 2017 through 2019, exceeding our initial estimate for the period. Also guiding to an additional $450 million of cost savings for the period 2020 through 2022, while maintaining strong employee engagement and alignment behind our first choice ambition. Over a longer time period since the formation of Molson Coors back in 2005, our progress is also evident in our performance. We've produced consistently strong results, the MillerCoors acquisition has taken us to new levels of profit. These profits have driven strong, growing free cash flow and earnings per share.
In 2018, we delivered on our commitment to protect the bottom line, offsetting a difficult U.S. market and global inflation environment through a number of measures, including over-delivery and cost savings. As a result, full-year underlying EBITDA reduced slightly, and we returned to EBITDA growth in the second half of the year. Additionally, in 2018, we scaled EBITDA from our international business, accelerated our focus on portfolio premiumization, launched a range of disruptive growth initiatives, including Truss, our cannabis-infused non-alcoholic beverage JV here in Canada, and we met our deleverage commitments. As a result, we have increasing flexibility to allocate capital beyond debt paydown. Our ambition is to be first choice for consumers and customers in the geographies and segments where we compete. To deliver against this ambition, our teams focus on five key strategic priorities that make up what we call our brewhouse.
These priorities are, firstly, building scale, transforming our business, and driving top-line growth. Secondly, developing great people who are passionate beer lovers, dedicated to delighting the world's beer drinkers and playing to win. Building a portfolio of extraordinary brands with meaning that drive real value. Delighting our customers and partners by delivering value-enhancing solutions that build the category, and fueling growth through strong cost management discipline underpinned by a profit after capital charge or PAC model. Having engaged, motivated employees who believe in our ambition and our plans is critically important to us. 80% of respondents to our most recent employee survey believe strongly in the goals and objectives of Molson Coors. Over 70% believe we have a unified culture, showing continuous improvement since the MillerCoors integration. Our approach to sustainability and growth is also reflected in our Our Beer Print.
In 2017, we launched Our Beer Print 2025 agenda, which is our next generation strategy around our continued commitment to responsible drinking, sustainable brewing, and investing in our people and communities. Our efforts have been recognized by the Dow Jones Sustainability North America Index for eight consecutive years. Our Beer Print is integral to how we will build long-term value for society and our shareholders while having a positive impact on our communities, our environment, and our business. Our continued focus on earning more, using less, and investing wisely is closely aligned with our brewhouse priorities. We'll earn more through our commercial excellence agenda, which is focused on growing our top line by building extraordinary brands, delivering customer excellence, and driving disruptive growth.
We'll use less through our ongoing focus on cost savings and productivity improvements, facilitated by an enterprise approach across Global Business Services, global procurement, and our productivity-driving World Class Supply Chain approach. Finally, we'll invest wisely through our capital allocation strategy, whether that's investing back into the business, further strengthening our balance sheet, paying down debt, dropping savings to the bottom line, or returning cash to shareholders via our dividend policy. As I mentioned, earning more is driven by extraordinary brands, customer excellence, and disruptive growth. Looking each in turn. Building extraordinary brands is at the heart of what we do, and our commitment to energizing our core brands is paying off. In our largest market, Coors Light trends began improving last fall with the brand regaining positive segment share momentum, and Miller Lite continues taking segment share while also holding share of the total U.S. beer market.
We're intensifying our efforts and our focus on premiumization. In the first quarter of this year, we posted strong double-digit or even stronger brand volume growth for Arnold Palmer Spiked, Sol, Henry's Hard Sparkling, and Peroni in the U.S., and upper single-digit growth for Coors Light in the U.K., while we drive the national rollout of Pravha from Staropramen also in the U.K. Our global brands remain a priority. Brand volume of Miller Lite grew strong double digits in our international business in the first quarter of this year, and Staropramen brand volume grew almost 16%, including growth in the Czech Republic in the first quarter. Blue Moon and Belgian Moon brand volume grew strong double digits in each of International, Europe, and Canada in the first quarter. We also go to market with one of the world's strongest portfolios of high-growth above-premium craft brands.
We have the number one craft brand in most of our core markets through the strength of leading brands such as Blue Moon, Leinenkugel's, Saint Archer, Terrapin, Hop Valley, Revolver, and Colorado Native in the U.S., Sharp's, Franciscan Well, and La Sagra in Europe, and Creemore Springs, Granville Island, Trou du Diable, and Belgian Moon in Canada. This collection of brands is powerful and comprehensive and offers additional potential because of our international reach. Let's spend a few minutes reviewing recent commercials in the U.S., Canada, and Europe for some of our largest and some of our newest brands.
Molson, it's the name on the label, but there's a lot behind it, like John Molson's thirst for something better in a new country, a family brewery built to last generations, and Canada's first railway connecting us to our neighbors. Today, there's 3,000 of us keeping that legacy alive through the beer we brew and everything we do. Because the best way to honor history is to keep making it. We, the jury, find the defendant Oh, it's non-alcoholic. Double brewed. Coors Edge. Refreshingly Coors. Surprisingly non-alcoholic. We, the jury, find Coors Light. The refreshing taste of Coors with a flavor of orange. Just a hint of orange.
Who says more flavor means more compromise? New Cape Line sparkling cocktails. All the flavor, just six simple ingredients, and nothing artificial. Welcome to Cape Line.
Although our love won't ride up so high. Baby, when I think of what you got for me. I've been looking so hard, I can't find you. I.
150 seconds to enjoy the view. 150 minutes to make it taste great.
I was blind, now I can see.
150 hours of learning their favorite song by heart.
I was blind, now I can see.
150 days to realize your pet project. 150 months of sharing memorable moments.
Living out a rock 'n' roll life.
It doesn't really matter how much time you've got on your hands.
I found my thaw.
It only matters that you make every moment count. 150 years of brewing a perfectly balanced beer. Staropramen, life your way. Hopefully, you enjoyed those. Continuous development of our customer excellence capability also remains a focus and is evident across our business. We continue to be a leader in category management in the U.S., as demonstrated by a first-place result overall in the most recent annual Advantage Survey and a first-place on-premise result in the most recent annual CM Profit Group survey. Retailers trust us to grow the size and value of their beer category, we constantly outperform our competition in this area. In Europe, customers rate us with an industry-leading net promoter score of 60-plus in a majority of the countries in which we operate. Our U.K. business was again ranked number one by on-premise chain accounts.
In Canada, we continue to help customers drive category growth through sophisticated assortment initiatives and value-driving joint business plans. We're also improving our intensity behind disruptive growth, premiumizing and extending using new and existing brands to meet the expanding array of consumer tastes and occasions. In the U.S., our stepped-up innovation approach is demonstrated by the introduction of Saint Archer Gold in test markets, Sol Chelada's national introduction, and innovations beyond beer, including the national launch of Cape Line sparkling cocktails, the launch of Movo wine spritzers to test market, and the anticipated launch of La Colombe hard coffee, also to test market. Here in Canada, Coors Slice, Aquarelle Hard Seltzer, and Bella Amari are rolling out as we speak. In international, our portfolio is benefiting from the continued expansion of Blue Moon, now available in 20 international markets.
Disruption also features in our route to market, presenting new service opportunities and revenue streams as we step change our digital and e-commerce capabilities across our business. We're also excited about the disruptive potential of Truss, which remains on track to be a first mover when non-alcoholic cannabis-infused beverages are legalized in Canada later this year. Our partnership is advantaged. After conducting a highly competitive search, we selected HEXO for its strong reputation as a reliable and responsible producer and a leading innovator in the fast-moving cannabis space. Our team is advantaged. Truss' CEO, Brett Vye, previously served as chief commercial and strategy officer of our international business and heads a team that's practiced in the testing, learning, and scaling necessary to make Truss a success. Our technology is advantaged, too.
By combining Molson Coors' extensive beverage expertise with HEXO's innovation capabilities in cannabis, we're confident that Truss will deliver safe, consistent, and great-tasting beverages to meet consumer demands. Our market insights are advantaged. We're a major branded goods supplier operating across Canada, affording us the insights and experience only a player with our experience can have. HEXO has segmented the cannabis market into multiple business streams, allowing it to concentrate management attention on the greatest market opportunities. Alongside earning more, we remain disciplined on using less, and our record here is strong. We expect to deliver more than $200 million of cost savings in 2019, and another $450 million of cost savings over the period 2020 to 2022.
Underlying these commitments are several enterprise productivity and capability-driving initiatives, namely World Class Supply Chain 2.0, Global Business Services, which has now scaled to almost 600 people, principally in Romania, with a secondary site in Milwaukee, IT consolidation, and procurement savings from multiple sources. All remain on track and include development of our two greenfield breweries here in Canada, including our British Columbia brewery, which is on plan to begin brewing in the third quarter of this year. Advantages in technology and management know-how present exciting new opportunities for many industries, and brewing is no exception. Our new Canadian breweries will be state-of-the-art facilities, providing multiple benefits, including an improved cost structure, better inventory management, and better demand fulfillment, as well as the high-quality products that we're famous for.
We believe that PAC, profit after capital charge, is closely correlated with total shareholder return, and we're committed to delivering on the opportunity PAC discipline creates. This includes taking advantage of our strengthening balance sheet, investing in brand-led opportunities, and our board's intention to reinstitute a dividend payout ratio in the range of 20%-25% of annual trailing underlying EBITDA for the second half of 2019 and ongoing thereafter. Molson Coors is now a bigger, stronger, first-choice-focused organization. As I said at the outset, we're focused on driving our first choice for consumer and customer agenda to ensure we're earning more, using less, and investing wisely in order to deliver long-term shareholder value. At this point, thanks for your time and attention. I'll hand back over to Pete.
Thanks very much, Mark. Well done. We will now go to the Q&A session. If you have a general question about the business, please approach one of the microphones at the front of the meeting room and form a line. You may address the meeting only after I have recognized you. Please introduce yourself and whom you represent if you are an appointed proxy. Please direct your questions or comments to me, and I will direct them to members of our leadership team as appropriate. In the interest of time and to allow everyone to ask questions within the time allotted for the meeting, I would also ask that you please limit yourself to one question and any remarks to no more than five minutes. Let's get with it. Are there any questions or comments regarding the general business affairs of the company right now?
I thought maybe one of our staff members would jump up and No questions or comments. Excellent. Hearing none, I will declare this annual meeting closed. Thank you, everyone. Merci beaucoup. Thank you for coming. The beer bar is now open. Enjoy.