Molson Coors Beverage Company · NYSE:TAP
Molson Coors Beverage — Molson Coors Brewing Company — Investor Day (June 2015)
81 slides from Molson Coors Beverage's investor day presentation, Jun 17, 2015
Slide 1: Molson Coors New York Investor / Analyst Meeting
M O L S O N C O O R S B R E W I N G C O M PA N Y 2 0 1 5 N E W Y O R K I N V E S T O R / A N A LY S T M E E T I N G JUNE 17, 2015 1
Slide 2: Mark Hunter, President & CEO
MARK HUNTER, PRESIDENT & CEO MOLSON COORS BREWING COMPANY 2
Slide 3: Forward Looking Statement
FORWARD LOOKING STATEMENT This presentation includes estimates or projections that constitute “forward-looking statements” within the meaning of the U.S. federal securities laws. Generally, the words “believe,” "expect,” "intend,” "anticipate,” “project,” “will,” and similar expressions identify for
Slide 4: Today's Agenda
TODAY’S AGENDA Mark Hunter, CEO, Molson Coors • Introductions, strategic overview and growth opportunities Gavin Hattersley, CFO, Molson Coors • Strategies to grow profit, cash, total shareholder return Closing Remarks Q&A with Full Leadership Team • Mark Hunter, CEO, Molson Coors • Gavin Hattersley
Slide 5: Molson Coors Overview
MOLSON COORS OVERVIEW UNITED STATES (42%) CANADA EUROPE INTERNATIONAL MARKETS 31% 36% 24% 14% 30% Worldwide 21% Underlying 5% 2014 FY Beer Net Sales(1) 2% Pretax Volume Income(2) 46% 44% 48% Totals may not sum due to rounding. (1) Excludes Corporate and Eliminations from the total. (2) Does not incl
Slide 6: #1 or #2 Market & Brand Positions in Most of Our Markets
#1 OR #2 MARKET & BRAND POSITIONS IN MOST OF OUR MARKETS Market Market Position* Brand Position* Brand USA #2 #2 & #4 Coors Light, Miller Lite Canada #2 #2 & #3 Coors Light, Molson Canadian UK #2 #1 Carling Bulgaria #1 #1 Kamenitza Croatia #1 #1 Ozujsko Serbia #1 #1 Jelen Czech Republic #2 #4 Starop
Slide 7: Proven Strength in Building Iconic Brands, Engaged Consumers and Strong Customer Partnerships
PROVEN STRENGTH IN BUILDING ICONIC BRANDS, ENGAGED CONSUMERS AND STRONG CUSTOMER PARTNERSHIPS • Iconic brands in all of our markets • Strong, distinctive brand propositions • Enriching brand equity through new creative and innovation • Engaging consumers though new social/digital channels • Strong c
Slide 8: A Strong Record of Shareholder Returns
A STRONG RECORD OF SHAREHOLDER RETURNS • Gaining traction against our commercial strategy • Continue to improve the efficiency of our operations • Strategic discipline driving improved financial performance TSR TAP Shares 5 year 104% 3 year 106% 1 year 14% Total Shareholder Return (TSR) = TAP stock
Slide 9: Our Strategic Platforms Drive Our Business Priorities
OUR STRATEGIC PLATFORMS DRIVE OUR BUSINESS PRIORITIES Develop Build Delight Fuel Great Extraordinary Customers Growth People Brands Molson Coors Consumer Customer Commercial Excellence Excellence Excellence Program 9
Slide 10: Strategic Platforms Define Our Operating Model: The MCBC Brewhouse
OUR STRATEGIC PLATFORMS DRIVE OUR BUSINESS PRIORITIES AND DEFINE OUR OPERATING MODEL…THE MCBC BREWHOUSE 10
Slide 11: Strategic Platforms Define Our Operating Model: The MCBC Brewhouse
OUR STRATEGIC PLATFORMS DRIVE OUR BUSINESS PRIORITIES AND DEFINE OUR OPERATING MODEL…THE MCBC BREWHOUSE 11
Slide 12: Changes in Consumer Preferences Are Accelerating
CHANGES IN CONSUMER PREFERENCES ARE ACCELERATING… HIGHLIGHTING THE NEED TO ENHANCE BRAND RELEVANCE AND INNOVATION Changing Demographics • Millennials - sweeter profiles / higher alcohol / more choice / technology • Aging population - health Health & Wellness / Lifestyle and wellness focused Local /
Slide 13: Building Extraordinary Brands
BUILDING EXTRAORDINARY BRANDS ENERGIZING OUR CORE BRANDS 13
Slide 14: Mainstream Premium Segment and Our Core Brands Remain the Economic Engine
MAINSTREAM PREMIUM SEGMENT AND OUR CORE BRANDS REMAIN THE ECONOMIC ENGINE • Nearly half of all beer volumes in the US and Canada – and more than 60% in Europe– are premium or premium light beers. • US premium light category alone is more than 3 times larger than craft category. • The #1, #2 and #4 b
Slide 15: Building Distinctiveness, Relevance and Share of Segment
BUILDING DISTINCTIVENESS, RELEVANCE AND SHARE OF SEGMENT 15
Slide 16: Coors Light Emerging as Global Extraordinary Brand
COORS LIGHT EMERGING AS GLOBAL EXTRAORDINARY BRAND • Available in over 30 countries Global Volume • One of the largest growing global brands • Distinctive Rocky Mountain Europe and Cold Refreshment positioning International Canada • Strong historical growth US across International markets • MCI + UK
Slide 17: Rocky Mountain Cold Refreshment
“ROCKY MOUNTAIN COLD REFRESHMENT” 17
Slide 18: Commercial #1
• COMMERCIAL #1 18
Slide 19: Building Distinctiveness, Relevance and Share of Segment
BUILDING DISTINCTIVENESS, RELEVANCE AND SHARE OF SEGMENT 19
Slide 20: Coors Banquet Growing Strongly in US and Canada
COORS BANQUET GROWING STRONGLY IN US AND CANADA • 9 years of unbroken growth in US • Share growth in Canada and US Volume • Return to Western roots: Timeless Western masculinity Canada • Quality ingredients, US brewing story • Distinctive advertising campaign • Heritage packaging, 2010 2011 2012 201
Slide 21: Welcome to Golden Molson
4 a a ee || SS iI] y =a L Ree f TF ij 1 4) > i ae i WELCOME TO GOLDEN ay ae vei MOLSON 21
Slide 22: Commercial #1
• COMMERCIAL #1 22
Slide 23: Building Distinctiveness, Relevance and Share of Segment
BUILDING DISTINCTIVENESS, RELEVANCE AND SHARE OF SEGMENT 23
Slide 24: Commercial #1
• COMMERCIAL #1 24
Slide 25: Miller Lite Stabilizing and Recovering
MILLER LITE STABILIZING AND RECOVERING • The original: established the category in 1975 Miller Lite Market • Authentic, timeless Share of Segment* 19.2% • Brewed to be a 19.0% great tasting light pilsner 18.8% 18.6% • Full visual ID makeover 18.4% 18.2% • “As long as you are you, 18.0% it’s Miller T
Slide 26: The Original Light Beer
cy “THE ORIGINAL LIGHT BEER” - gs astonaas ane tdered, g | = LONG AS’ ‘YOU #ITSMILLERTIME c= LI maerocrenens lite \@ 26
Slide 27: Commercial #1
• COMMERCIAL #1 27
Slide 28: Building Distinctiveness, Relevance and Share of Segment
BUILDING DISTINCTIVENESS, RELEVANCE AND SHARE OF SEGMENT 28
Slide 29: Made From Canada
“MADE FROM CANADA” • Strong creative execution and integrated supporting programs • Expanded distribution Molson Canadian Market Share of Segment* to Quebec 13.5% • Building brand reach 13.0% through innovation – 12.5% Molson Canadian 67 and 12.0% Molson Canadian Cider 11.5% • Fully leveraged Hockey
Slide 30: Molson Canadian Leading the Category in Social Engagement
MOLSON CANADIAN LEADING THE CATEGORY IN SOCIAL ENGAGEMENT Beer Fridge campaigns have driven global acclaim in Social, Digital and PR Coverage Ranked #2 Canadian Generated from all of Social Campaign $160M in the Top 10 Marketer in of the year PR Value News Canada for Bronze Lion Globally Networks in
Slide 31: Commercial #1
• COMMERCIAL #1 31
Slide 32: Building Distinctiveness, Relevance and Share of Segment
BUILDING DISTINCTIVENESS, RELEVANCE AND SHARE OF SEGMENT 32
Slide 33: Carling Grew & Maintained Share
CARLING GREW & MAINTAINED SHARE Carling Market Share* - UK • UK’s #1 beer brand for 31.5% 40 years 31.0% • Strong momentum in 30.5% Scotland and Ireland 30.0% • Building brand reach through 29.5% innovation – Carling Zest 29.0% and Carling Cider 28.5% 2012 2013 2014 Q1 2015 Source: UK Industry Data
Slide 34: Brilliantly British, Brilliantly Refreshing
“BRILLIANTLY BRITISH, BRILLIANTLY REFRESHING” 34
Slide 35: 35
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Slide 36: Building Extraordinary Brands Driving Share in Above Premium, Craft & Cider
BUILDING EXTRAORDINARY BRANDS DRIVING SHARE IN ABOVE PREMIUM, CRAFT & CIDER 36
Slide 37: Strongest Craft Portfolio of Any Global Brewer
STRONGEST CRAFT PORTFOLIO OF ANY GLOBAL BREWER • #1 CRAFT BREWER in the US with Tenth and Blake • #1 CRAFT BRAND in the US with Blue Moon • #1 SHANDY in the US with Leinenkugel’s • #1 CASK ALE in the UK with Doom Bar • #1 CRAFT BRAND in Ireland with Franciscan Well • LEADING CRAFT BRANDS in Canada w
Slide 38: America's Largest Craft Brewer – Tenth and Blake
AMERICA’S LARGEST CRAFT BREWER – TENTH AND BLAKE ® 38
Slide 39: Blue Moon – America's #1 Craft Beer
BLUE MOON – AMERICA’S #1 CRAFT BEER Blue Moon Volume (STRs) 2009 2010 2011 2012 2013 2014 39
Slide 40: UK's #1 Cask Brand and Ireland's #1 Craft Brewery
UK’S #1 CASK BRAND AND IRELAND’S #1 CRAFT BREWERY . We are focused on beer styles that can deliver scale Premium Stout / Pilsner Cask IPA White Cider Black 40
Slide 41: Doom Bar – UK's #1 Cask Ale
DOOM BAR – UK’S # 1 CASK ALE Over the past 3 years, Doom Bar has grown over 80% Doom Bar Volume (HLs) … And opened the Mariners as we attempt to develop a concept, the “Atlantic Beer Kitchen”, capable of rolling out elsewhere in the South West. 2011 2012 2013 2014 41
Slide 42: Canada's Craft & Above Premium Portfolio
CANADA’S CRAFT & ABOVE PREMIUM PORTFOLIO Canada Expands Above Premium Portfolio BUILDING MOMENTUM B C ALB MAN QC SASK ONT ATL 42
Slide 43: Creemore – Big Taste From a Tiny Place
CREEMORE – BIG TASTE FROM A TINY PLACE Over the past 5 years, Creemore has grown more than 50% Creemore Volume (HLs) 2010 2011 2012 2013 2014 43
Slide 44: Tapping Into Flavor and New Occasions
TAPPING INTO FLAVOR AND NEW OCCASIONS 44
Slide 45: MillerCoors Is a Leader in FMBs
MILLERCOORS IS A LEADER IN FMBS US Market Share of FMBs 25% 20% 15% 10% 5% 0% 2013 2014 Q1 2015 Growing at nearly 60% Redd’s Volume (HLs) Data source: Nielsen cross-channel 2013 2014 45
Slide 46: We Have Established Cider in All Key Markets
WE HAVE ESTABLISHED CIDER IN ALL KEY MARKETS WITH EXPANSION PLANNED IN 2015 UK CANADA USA CE Total Cider market 2014 9.5M 0.3M 1.3M 0.1M (HL) MCBC share 1.2% 23% 11% 30% 2014 2015 Innovation Current portfolio Source: Euromonitor, 2014-2017, Globe 46
Slide 47: US – Coors Peak
US – COORS PEAK TAPPING GROWING GLUTEN-FREE OPPORTUNITY • Tapping into gluten- free awareness and interest • Recently introduced into Pacific Northwest of the US • Building Coors brand reach 47
Slide 48: Canada – Coors Altitude
CANADA – COORS ALTITUDE TAPPING INTO MILLENNIAL HIGH-ENERGY OCCASION • Designed specifically for Millennial audience • Media plan driving strong levels of brand awareness • Unique digital launch approach resonating with Millennial consumers 48
Slide 49: Building Our International Brand Portfolio
BUILDING OUR INTERNATIONAL BRAND PORTFOLIO 49
Slide 50: Coors Light and Staropramen Lead MCI Portfolio
COORS LIGHT AND STAROPRAMEN LEAD MCI PORTFOLIO Core CL Markets: Core MCI Staropramen Mexico, Central markets: America/Caribbean, Ukraine, Sweden, Russia, S. America , China, Germany, UK, US Japan, and Australia 50
Slide 51: Coors Light – 4 Years of International Growth
COORS LIGHT – 4 YEARS OF INTERNATIONAL GROWTH Coors Light Global Volume* Factors driving success: 1. Authenticity 2. Rocky Mountain Cold Europe and International Refreshment positioning Canada 3. Innovation US 4. Perfect outlet execution 2010 2011 2012 2013 2014 Coors Light Growth in Latin America*
Slide 52: Staropramen Emerging as a Global Brand
STAROPRAMEN EMERGING AS A GLOBAL BRAND Factors driving success: Europe Sales Volume, excl. Czech (KHL) 1. Spirit of Prague brand positioning 2. Full brand support with 360°activation 3. Geographic expansion 2009 2010 2011 2012 2013 2014 4. Strong on-on trade proposition 5. New packaging Global Volum
Slide 53: Staropramen Added to UK Portfolio
STAROPRAMEN ADDED TO UK PORTFOLIO • Carlsberg distribution contract terminated • Owned in all channels from January 2016 • Rounds out UK portfolio Historically, Staropramen UK volume has been reported in MCI. 53
Slide 54: Mount Shivalik Acquisition in India
BUILDING SHARE IN FAST GROWING BEER MARKET MOUNT SHIVALIK ACQUISITION IN INDIA • Acquired two breweries in Punjab and Haryana • Doubles our total India capacity • Acquired leading brand – Thunderbolt PUNJAB • Builds market share in North HARYANA • Creates new opportunities to introduce BIHAR MCBC br
Slide 55: MCI Momentum Toward Breakeven Is Building
MCI MOMENTUM TOWARD BREAKEVEN IS BUILDING Volume Underlying Pretax/HL(1) (000 HL) 3,000 $0 5Yr CAGR +33% ($5) 2,500 ($10) 2,000 ($15) 1,500 ($20) 1,000 ($25) 500 ($30) 0 ($35) 2009 2010 2011 2012 2013 2014 2009 2010 2011 2012 2013 2014 MCI to contribute to top and bottom line beyond 2016 1 Non-GAAP
Slide 56: Delighting Our Customers via Great Quality, Strong Partnerships and Brilliant Execution
DELIGHTING OUR CUSTOMERS VIA GREAT QUALITY, STRONG PARTNERSHIPS AND BRILLIANT EXECUTION 56
Slide 57: Adding Capabilities at the Front End of Our Business
ADDING CAPABILITIES AT THE FRONT END OF OUR BUSINESS TO MEET THE EVOLVING CUSTOMER LANDSCAPE Customer Expectations1… Our Response1… “Understand our strategy and 76% commercial model” Commercial Excellence Capabilities “Launch innovation that 64% contributes to category growth” 1. Field Sales Managem
Slide 58: Sharpening & Energizing Performance Through Field Sales Management
SHARPENING & ENERGIZING PERFORMANCE THROUGH FIELD SALES MANAGEMENT (FSM) • Standard sales force processes implemented in Canada and UK • 630 front-line Canadian and UK sales force now operating FSM • Successful deployment of SAP ReX, sales force automation & iPads • Route planning helping to reduce
Slide 59: Driving Customer Value Through Revenue and Category Management
DRIVING CUSTOMER VALUE THROUGH REVENUE AND CATEGORY MANAGEMENT Revenue Management • Improved pricing capability and discipline • Leveraging mix management • Optimizing trade promotion • Improved global support tools Category Management • Improved customer engagement, including increased category cap
Slide 60: Our Journey to Become 1st Choice for Customers
OUR JOURNEY TO BECOME 1ST CHOICE FOR CUSTOMERS RESULTS*** RANKED 1ST in Beer, Molson Coors ranked #1 supplier in Beer, Wine and Spirits in 2014 Wine and Spirit 2014 MCBC ranked MARKET SHARE +7% 4 OUT OF 186 suppliers Sainsbury’s is the UK’s second-largest Grocery Retailer with 12.5% Value Share* 201
Slide 61: Delivering a World Class Supply Chain & Infrastructure
DELIVERING A WORLD CLASS SUPPLY CHAIN & INFRASTRUCTURE UK Supply Chain Master Plan Canadian Supply Chain Network of the Future MillerCoors Business Transformation MCBC One Way Approach World Class Supply Chain Molson Coors Commercial Excellence Program Delivering increased efficiency, fl
Slide 62: Financial Update: Gavin Hattersley, CFO
FINANCIAL UPDATE: GAVIN HATTERSLEY, CFO MOLSON COORS BREWING COMPANY 62
Slide 63: Driving Growth Through Focus on Strategies and PACC Model
DRIVING GROWTH THROUGH FOCUS ON STRATEGIES AND PACC MODEL PACC 63
Slide 64: PACC
CHOICE FOR CONSUMERS & CUSTOMERS 64
Slide 65: Driving Total Shareholder Return With PACC Model
DRIVING TOTAL SHAREHOLDER RETURN WITH PACC MODEL • Investing behind core brands BRAND-LED • Driving share in above premium PROFIT • Delivering value-added innovation GROWTH • Commercial excellence PROFIT AFTER • Cost reductions CAPITAL CHARGE • Capital expenditure driving CASH efficiencies GENERATIO
Slide 66: Driving Total Shareholder Return With PACC Model
DRIVING TOTAL SHAREHOLDER RETURN WITH PACC MODEL EARN MORE PROFIT AFTER CAPITAL CHARGE USE LESS (TSR) TOTAL SHAREHOLDER RETURN INVEST WISELY 66
Slide 67: Underlying Earnings Growth Even in Tough Times
UNDERLYING EARNINGS GROWTH EVEN IN TOUGH TIMES… EARN MORE USE LESS INVEST WISELY MCBC Underlying Pretax Income (1) $904 $865 $865 $794 $821 $800 $719 $646 $642 $600 $541 $441 $400 $200 ($millions) $0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Underlying pretax income growth over the past 9 ye
Slide 68: Steady, Strong, Growing EBITDA
…AND STEADY, STRONG, GROWING EBITDA EARN MORE USE LESS INVEST WISELY Underlying EBITDA(1) $1,600 $1,469 $1,471 $1,398 $1,400 $1,267 $1,212 $1,200 $1,106 $1,100 $1,091 $1,127 $1,000 $800 $600 $400 ($millions) $200 $0 2006 2007 2008 2009 2010 2011 2012 2013 2014 Nearly $8 per share (2014) (1) Non-GAAP
Slide 69: Profit, Capital Efficiency & Structure Drive Cash Flow
PROFIT, CAPITAL EFFICIENCY & STRUCTURE DRIVE CASH FLOW EARN MORE USE LESS INVEST WISELY MCBC Underlying Free Cash Flow (1) $1,000 $957 $887 $892 $865 $800 $681 $618 $600 $550 $508 $426 $400 $315 $200 ($millions) $0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E (2) 2014 & 2015 Underlying FCF tot
Slide 70: Cost Reductions Help to Drive Top Line and Bottom Line
COST REDUCTIONS HELP TO DRIVE TOP LINE AND BOTTOM LINE EARN MORE USE LESS INVEST WISELY Cumulative Annualized Cost Savings (1) $1,400 $1,333 $1,195 $1,200 $1,078 $1,000 $958 $851 $800 $657 $600 $442 $400 $331 ($millions) $185 $200 $81 $0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Over $1.3 bi
Slide 71: Ongoing Cost Efficiencies Will Fuel Growth Investments
ONGOING COST EFFICIENCIES WILL FUEL GROWTH INVESTMENTS EARN MORE USE LESS INVEST WISELY Long-term sustainability • Captured more than $70 million of savings in 2013 and 2014(1) • Expect cost savings of $40-$60 million/year for at least the next 3 years(1) Driven through efficiency and effectiveness
Slide 72: Capital Efficiency Drives Cash and Value
CAPITAL EFFICIENCY DRIVES CASH AND VALUE EARN MORE USE LESS INVEST WISELY Capital Spending • 2015 outlook: $300 million(1) • Supply chain work in Canada • Keg purchases in Europe • Innovation in Canada and Europe Maintaining working capital improvements • Accounts payable • Accounts receivable • Inv
Slide 73: Increasing Working Capital Efficiency
INCREASING WORKING CAPITAL EFFICIENCY EARN MORE USE LESS INVEST WISELY Days Sales Outstanding Days Payables Outstanding 70 62 100 52 90 60 46 86 50 90 40 76 80 30 20 70 10 0 60 2012 2013 2014 2012 2013 2014 Days Inventory Outstanding Cash Conversion Cycle (1) 34 33 30 19 33 20 32 10 31 30 0 29 30 -1
Slide 74: Stronger Balance Sheet, Balanced Cash-Use Priorities
STRONGER BALANCE SHEET, BALANCED CASH-USE PRIORITIES EARN MORE USE LESS INVEST WISELY 5x 4.5x 4.3x 4x 2.9x 2.8x 2.9x 3.0x 2.8x 3x 2.7x 2.3x 2.4x 2.0x 2.1x 1.9x 2x 2.3x 0.8x 1.7x 1x 0.7x 0.6x 0x 2009 2010 2011 2012 2013 2014 Pro Forma S&P Adjusted Debt/EBITDA(1) Moody's Adjusted Debt/EBITDA Net debt/
Slide 75: Growing Cash Returns via Dividends and Stock Repurchases
GROWING CASH RETURNS VIA DIVIDENDS AND STOCK REPURCHASES Dividends Paid (Annual Per Share) $1.64 $1.48 $1.50 $1.24 $1.28 $1.28 $1.08 $1.00 $0.92 $0.76 $0.64 $0.64 (dividend per share) $0.50 $0.00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E Stock repurchases: $321 million in 2011 and $50 milli
Slide 76: Disciplined Cash Use
DISCIPLINED CASH USE EARN MORE USE LESS INVEST WISELY Cash use priorities 1. Strengthen balance sheet by reducing liabilities • 2014: $796 million reduction in net debt, $75 million of pension contributions(1) • 2015: $227 million discretionary U.K. pension contribution and $73-93 million of other p
Slide 77: Continue to Expand PACC
CONTINUE TO EXPAND PACC EARN MORE PROFIT AFTER CAPITAL CHARGE USE LESS (TSR) TOTAL SHAREHOLDER RETURN INVEST WISELY 77
Slide 78: Strong Base, Driving TSR
STRONG BASE, DRIVING TSR BRAND-LED PROFIT GROWTH Strategy, PACC Model Drive Value, Alignment 2014 Results: • Higher underlying pretax and EPS CASH • Grew underlying EBITDA GENERATION • Exceeded cost savings targets • Improved cash conversion cycle • Generated $957 million in underlying free cash flo
Slide 79: Mark Hunter, President & CEO
MARK HUNTER, PRESIDENT & CEO MOLSON COORS BREWING COMPANY 79
Slide 80: Well Positioned to Deliver Growth & Total Shareholder Value
WELL POSITIONED TO DELIVER GROWTH & TOTAL SHAREHOLDER VALUE • Investing behind core brands BRAND-LED • Driving share in above premium PROFIT • Delivering value-added innovation GROWTH • Commercial excellence PROFIT AFTER • Cost reductions CAPITAL CHARGE • Capital expenditure driving CASH efficiencie
Slide 81: Molson Coors New York Investor / Analyst Meeting
M O L S O N C O O R S B R E W I N G C O M PA N Y 2 0 1 5 N E W Y O R K I N V E S T O R / A N A LY S T M E E T I N G JUNE 17, 2015 81
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