Molson Coors Beverage Company · NYSE:TAP
Molson Coors Beverage — Coors Adolph — Merger or Acquisition (October 2004)
30 slides from Molson Coors Beverage's merger presentation, Oct 1, 2004
Slide 1: Molson Coors Brewing Company: Reshaping the Competitive Brewing Landscape
Molson Coors Brewing Company Reshaping the Competitive Brewing Landscape Leo Kiely Daniel J. O'Neill nels October 2004 MOLSON @)
Slide 2: Forward Looking Statements
Forward Looking Statements ‘This presentatenindudes “oraard ooking statemert wihin fe messing of he US. federal sacuiies lave, Fonvardloshing statement are commeely dented by such teims and phases as "woul may’, wd, "expect of “expected to” and othe teens wih suat meaning indicat posible tute vents
Slide 3: Molson's Vision Has Remained Consistent
Molson’s Vision Has Remained Consistent 1. To become one of the best performing brewers in the world, as measured by... 2. To remain one of the best performing brewers in the world, as measured by... 3. To regain the position as one of the best performing brewers in the world, as measured by... Long
Slide 4: Molson Has Delivered Best in Class Returns to Shareholders in Last Five Years
Molson Has Delivered Best in Class Returns to Shareholders in Last Five Years Fiscal 2004 uimes SABMiler Lon Nathan ‘Cervecerias Unidas FEMSA Lon Nathan SABMiler Scottish & Newcastle ‘Cervecerias Unidas. FEMSA Fosters Group ‘Adolph Coors ‘Anheuser-Busch Carlsberg Adolph Coors Interorew Carlsberg Gru
Slide 5: Current Footprint has Experienced Challenges in Last Six Months
Current Footprint has Experienced Challenges in Last Six Months Increasing Risks of Previous Plan Clear Priorities Exist in Each of the Existing Businesses Growth Beyond Core! Export + Regions youn Coors focus on 23 consolidation Strategic Pricing DIStbutton price status markets Provide potential fo
Slide 6: Global Industry Consolidation Driving Moves that Could Impact Molson Value
Global Industry Consolidation Driving Partners to Moves that Could Impact Molson Value + Interbrew / AmBev deal is a potential ‘trigger’ for ‘next wave’ of bigger consolidation moves — All players revisiting their M&A growth game plan — Mid-sized players realizing that they are likely sellers - Gian
Slide 7: Consolidation Could Lead to Value Destruction
Consolidation Could Lead to Value Destruction Most Immediate Impact with Coors and/or Heineken Potential Deals with Risk to Molson Conflict with Molson Portfolio of Brands InterbrewAmBev + Coors brand in Canada + Molson brands in US (CCT WE) Heineken + Heineken and Coors brands in Canada + Risk they
Slide 8: Molson and Coors: The Right Combination
Molson and Coors: The Right Combination + North America’s oldest brewer + Established in 1873 by Adolph Coors + 13 largest brewer in the world + 8” largest brewer in the world + Leading position in Canada; + Leading brands in US and UK beer growth opportunity in Brazil markets Rich Brewing Heritag x
Slide 9: Merger Improves Likelihood of Regaining the Vision
Merger Improves Likelihood of Regaining the Vision * To secure the current commercial relationship with Coors, which represents 20% of Molson’s total shareholder value + To identify and obtain $175 million in synergies, which would not be available to Molson otherwise: — Capitalizes on Molson’s prov
Slide 10: Makes Perfect Sense
Makes Perfect Sense + Creates top-5 brewer with the operational scale to succeed in the global brewing industry — Strong market positions in some of the world's largest beer markets — Broader geographic base provides diversified sources of revenue, profit and cash + Experienced management team to en
Slide 11: With Broad Scope & Scale
With Broad Scope & Scale + Pro forma LTM net sales and EBITDA“ of approximately US$6.0 billion and US$1.0 billion, respectively + Combined 2003 volume of 60M hi/51M US bbls + Combined product portfolio of more than forty brands eS IKEYSTONETCE sd GiNADINN Med ay fe Bets Oo nO + Distribution and/or l
Slide 12: Enhanced Platform in Developed Markets, Balanced Emerging Market Exposure
Enhanced Platform in Developed Markets, Balanced Emerging Market Exposure * Strong positions in world’s highest margin beer markets + Growth opportunities through underdeveloped regions/brands in mature markets and Brazil 2003 Volume 60M hi LTM Net Sales US$6B LTM EBITDA US$1B most (1) tntusee Coors
Slide 13: With Leading Positions in Key Markets
With Leading Positions in Key Markets All Brands Top Brand Rank Canada re #1 43% cal United States Brazil alse’ #8 11% #8 Source Datamonitor and Brenets of Canada @e02)
Slide 14: Coors Growth Model
Coors Growth Model + Leverage strength in high-share markets to grow more strong markets * U.S. - 1%tdistribution, 2": invest with distributors (60/205) — Drivers: YAM, Hispanic programming, trial channels + U.K. — Scotland, SE/London, Carling X-Cold, Coors Fine Light + International: — Mexico: Expo
Slide 15: Coors Performance Overview: 2003
Coors Performance Overview: 2003 * Improvements made in key areas of the business * Continued investments in future growth « Generated cash and exceeded debt repayment goals * Strengthened financial position; strengthened and grew returns on capital In the most recent fiscal year, Coors emerged a st
Slide 16: Coors Americas Segment: Coors Brewing Company
Coors Americas Segment: Coors Brewing Company + Continued strong U.S. pricing environment + Share maintained in a flat, highly competitive beer market + Refined marketing strategy gaining traction with key demographic groups * Sales organization strengthened and making progress in key markets (Hispa
Slide 17: Coors Europe Segment: Coors Brewers Limited
Coors Europe Segment: Coors Brewers Limited + Carling #1 U.K. beer brand - 30% larger than #2 brand * Significant improvements in balancing volume and margins + Achievements in productivity and cost reductions (new packaging lines in Burton, outsourcing of kegs and pub servicing) + Long-term market
Slide 18: In the UK, Consistent Strong Growth in the On-Trade
In the UK, Consistent Strong Growth in Both the On-Trade... Owned Brand Market Share - On Trade 22% 21.7% 1% 20.2% 20% 19.7% 19.3% a ia 18% + 2000 2001 2002 2003 On-Trade of CBL volume) MOLSON @) Cooks
Slide 19: ...and the Off-Trade
...and the Off-Trade Owned Brand Market Share - Off-Trade 19% 18.2% 18% 18% an 17.2% 7% 17% 16% ice 15.4% 15% 18% 14% + 2000 2001 2002 2003 Off-Trade > of CBL volume) MOLSON @®) Coots
Slide 20: Balanced Board & Management Team
Balanced Board & Management Team Molson Chairman Coors Independent Molson Independent Molson = 7 7 Coors indenendert Office of Synergies & Integration independant Molson ice Chairman Independent [il D. J. O'Neill Family
Slide 21: Synergies
Synergies Expected Savings % of Pro Forma (UssM) Cost Base Brewery Network Optimization $60 1.1% Procurement Savings 43 08 SGA 40 08 Best In Class Savings 12 0.2 Organizational Design 10 0.2 Other 10 0.2 Total $175 3.3% Molson Coors has identified a clear path to substantial synergies MOLSON @) Cook
Slide 22: Profit Impact and Estimated Timing
Profit Impact and Estimated Timing Impact on EBITDA of 100% Synergies Expected Timing of Synergies usst 500m os ~ — #5 sum eo 8 $900 4% $600 seo $200 $0 inion aay Re rme Syades later ews vert vers Coors 50% of synergy capture to occur in the first 18 months MOLSON @) Cooks
Slide 23: Significant Opportunity for Margin Expansion
Significant Opportunity for Margin Expansion EBITDA to Net Sales Molson Coors Without With 100% Cys9 CYOO CYO1 CYO2_ CYS ineSies Synergies 183% 189% 209% 229% 228% 165% —> 195% Coors 121% 12.2% 122% 141% 19.6% AmBev 211% 28.7% 30.6% 36.9% + [35.4% AB 259% 264% 276% © 262% [286%] Inerorew «28.3% 21.2
Slide 24: Revenue Growth Opportunities
Revenue Growth Opportunities Canada + Unleash Coors Light; redirect dollars from Canadian Light to Canadian + Support value entry to regain share and drive volume savings + Utilize the ARC technology from UK to drive on-premise listings USA + Continue to support Coors Light in developmental regions,
Slide 25: Enhanced Financial Strength
Enhanced Financial Strength Pro Forma LTM Molson Coors (USSM) Net sales $6,036 Operating income 694 Margin 19.5% EBITDA 996 Margin 16.5% Free cash flow" 723 *Defined as EBITDA CAPEX CADIUSD exchange rate of 1.34 Excludes potential synergies LT (ast twelve months) ended June 20, 2004 Financi | streng
Slide 26: Molson Coors — A Key Strategic Step
Molson Coors — A Key Strategic Step Value Creation Critical Mass + Transaction unlocks = - shareholder value through US$175M of merger synergies + Experienced management team can deliver upon key objectives MOLSON (@) Creates top-5 brewer with global scale and diversity Strong cash flow and balance
Slide 27: Q&A
Q&A MOLSON @)
Slide 28: Supplemental Information
Supplemental Information MOLSON @)
Slide 29: Last Twelve Months Pro Forma Income Statement
Last Twelve Months Pro Forma Income Statement (USsM) Molson Coors Net sales 1,890 4146 BIT 365 331 696 871 Margin 19.3% 8.0% 11.5% 14.8% EBITDA 413 585 998 4,173 Margin 21.8% 14.1% 16.5% 19.4% Net income 187 174 361 4750 Free cash flow" 348 3mT 725 900 Sabo emtane et 194 (Suerte 25% Eiches purchase
Slide 30: Searchable text section of graphics shown above
Searchable text section of graphics shown above Mol son Coors Brewing Company Reshaping the Competitive Brewing Landscape Leo Kiely Daniel J. O’Neill October 2004 President and President and Chief Executive Officer Chief Executive Officer Coors Brewing Company Molson Inc. [LOGO] [LOGO] For ward Look