Molson Coors Beverage Company · NYSE:TAP
Molson Coors Beverage — Coors Adolph — Merger or Acquisition (October 2004)
31 slides from Molson Coors Beverage's merger presentation, Oct 13, 2004
Slide 1: Reshaping the Competitive Brewing Landscape
Molson Coors Brewing Company Reshaping the Competitive Brewing Landscape Leo Kiely Daniel J. O'Neill Presid e Officer Chief ‘ors Company Molsor MOLSON @) October 2004
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: 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 Share Gain: Share Gain: + Segments + With price + Regions + Outlets Yolume: Strategic Pricing _PlStribution Innovatio
Slide 5: 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 6: 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 7: 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 8: 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 9: Ability to Focus Investments on Highest-Margin Sectors: Canada and UK
Ability to Focus Investments on Highest- Margin Sectors: Canada and UK $50 $40 $30 $20 7. $0 Canada MEBITDA/HI mi Mktg/hl Allocation of incremental mark margin segment g spend behind growth , markets and channels
Slide 10: Molson Canada: Pricing and Margin Drive Operating Leverage
Molson Canada Pricing and Margin Drive Operating Leverage Amount Percent) Volume 1% $3M $0.04 3% Pricing 1% $25M $0.13 8% EBITDA Margin 1% $15M $0.08 5% ws Historically, Molson has delivered a combination of these profit drivers. Note: (1) Based on CADS2.10 EPS LTM excluding special tems and 1.34 ex
Slide 11: Coors Americas Leverage: 1997-2001 vs. 2003
Coors Americas Leverage: 1997-2001 vs. 2003 Volume: Pricing: COGS per barrel: MG&A per barrel: Pre-tax income:
Slide 12: Coors Americas: Operating Leverage Offers Significant Upside
Coors Americas Operating Leverage Offers Significant Upside Amount Percent) Volume 1% $11M $0.21 4% Pricing 1% $28M $0.47 11% Reinvest in the business Note: (1) Based on 2003 diluted EPS of $4.77
Slide 13: Coors Global Growth Model
Coors Global Growth Model Leverage strength in high-share markets to grow more strong markets U.S. — 1%:distribution, 2"4: invest with distributors (50/205) — Drivers: YAM, Hispanic programming, trial channels U.K. - Scotland, SE/London, Carling X-Cold, Coors Fine Light International: — Mexico: Expo
Slide 14: Coors Americas Segment: Coors Brewing Co
Coors Americas Segment: Coors Brewing Co + 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 (Hispanic)
Slide 15: Coors Europe Segment: Coors Brewers Ltd
Coors Europe Segment: Coors Brewers Ltd + 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 tren
Slide 16: 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 17: ...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 18: 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 19: 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 20: 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 21: Pro Forma Balance Sheet
Pro Forma Balance Sheet (ussm) Molson Coors Combined Cash $108 $36.2 $47.41 Total current assets $367.6 $1,1285 $1,496.1 PP&E 7423 14110 2,153.3 Total assets 929312 $4532.0 $7,463.1 Total current liabilities $760.9 $1,175.9 $1,936.8 Total debt 840.6 1,142.4 1,982.7 Minority interests 93.5 298 123.2
Slide 22: Pro Forma Credit Statistics
Pro Forma Credit Statistics Interest Coverage Debt to EBITDA " aT 0 636 Molson Coors. Molson Including Molson Coors. Moon —_Includi Coors Synergies Coors Synergies LIMas of Jue 9, 20 CALYUSD exchange rate 1.94 tee purhace aeouning adamant: tre ovarape* EBITOAY tee pace ves financial
Slide 23: Solid Canada and UK Base with Major US Growth Sector and Brazil Option
Solid Canada and UK Base with Major US Growth Sector and Brazil Option United lea International Activities Scale benefits TBD Close part of TBD cost gap Coors Light On-trade Regional Rescale and Development support distribution development reposition markets + + spend + Reallocation Regional Export
Slide 24: Revenue Growth Opportunities
Revenue Growth Opportunities Incremental market investment in Canada; unleash Coors Light Redirect dollars from Canadian Light to Canadian Support value entry to regain share and drive volume savings Continue to enhance Coors Light focus/positioning Leverage Molson brands in full US system Expand te
Slide 25: 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 26: Supplemental Information
Supplemental Information MOLSON @)
Slide 27: 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 28: ... and Makes Perfect Sense
... and 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 te
Slide 29: 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
Slide 30: 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 31: Searchable text section of graphics
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 Adolph Coors Company Molson Inc. [LOGO] [LOGO] For ward Looki