Molson Coors Beverage Company · NYSE:TAP
Molson Coors Beverage — Molson Coors Brewing Company — Barclays Back-to-School Consumer Conference 2013
38 slides from Molson Coors Beverage's conference presentation, Sep 4, 2013
Slide 1: Barclays Back-to-School Consumer Conference
Molson Coors Brewing Company Barclays Back-to-School Consumer Conference September 4, 2013
Slide 2: Gavin Hattersley, Chief Financial Officer
Gavin Hattersley Chief Financial Officer Molson Coors Brewing Company 2
Slide 3: Forward-Looking Statement
Forward-Looking Statement Forward-Looking Statements: This presentation may include 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 s
Slide 4: Agenda
Agenda • Molson Coors global overview • Historical performance context − Steady, growing pretax profit, even in difficult times − Strong, stable EBITDA − Substantial cash generation and cash return to shareholders − Growing total shareholder returns • Growth strategy • Driving total shareholder retu
Slide 5: Core Market Strengths + Emerging Global Presence
Molson Coors: Core Market Strengths + Emerging Global Presence EUROPE Carling Kamenitza CANADA Coors Light Ozujsko RUSSIA 39% Share WESTERN EUROPE Staropramen Niksicko Carling Molson Canadian Staropramen Bergenbier Borsodi Staropramen Coors Light Jelen US (MILLERCOORS) JAPAN 29% Share SPAIN Zima Car
Slide 6: Volume, Net Sales and Profitability by Geography
Volume, Net Sales and Profitability by Geography 2012 Pro Forma Worldwide Beer Volume 2012 Pro Forma Underlying Operating Income1 14.0% 4.9% 38.4% 14.4% 21.1% 4.3% 11.0% 46.6% 45.8% 2012 Pro Forma Net Sales 16.8% 27.1% 2.1% 10.8% MillerCoors (42%) Central Europe 43.4% UK Canada MCI (1) Does not incl
Slide 7: Net Income Variability Masks…
Net Income Variability Masks… ($millions) Net Income Attributable to MCBC $800 $720 $708 $700 $676 $600 $492 $500 $443 $400 $361 $379 $314 $300 $200 $185 $100 $0 2006 2007 2008 2009 2010 2011 2012 1H 12 1H 13 U.S. GAAP net income attributable to MCBC 7
Slide 8: …Underlying Earnings Growth in Tough Times…
…Underlying Earnings Growth in Tough Times… MCBC Underlying Pretax Income ($millions) $865 $794 $821 $800 $719 $646 $642 $600 $541 $441 $406 $383 $400 $200 $0 2005 2006 2007 2008 2009 2010 2011 2012 1H 12 1H 13 Pretax income growth over the past 7 years totaled 96% Non-GAAP underlying income is calc
Slide 9: … And Steady, Strong, Growing EBITDA
… And Steady, Strong, Growing EBITDA ($millions) $1,600 Underlying EBITDA* $1,398 $1,400 $1,267 $1,212 $1,200 $1,106 $1,100 $1,091 $1,127 $1,000 $800 $690 $630 $600 $400 $200 $0 2006 2007 2008 2009 2010 2011 2012 1H 12 1H 13 Underlying EBITDA per share: +13% in 2012, to nearly $8/share * Non-GAAP un
Slide 10: Growing Cash Returns Via Dividends
Growing Cash Returns Via Dividends ($millions) Dividends Paid $250 $1.24 $1.28 (Annual Per Share) $1.08 $200 $0.92 $150 $0.76 $0.64 $0.64 $100 $50 $0 2006 2007 2008 2009 2010 2011 2012 7 ½ year total: $1.3 billion, plus $321 million share repurchases in 2011 10
Slide 11: Molson Coors Growth Strategy
Molson Coors Growth Strategy Maximizing Accelerating Growth and Profit Growth in M&A in Developed Developing Markets Markets Strong Cost Management Discipline 11
Slide 12: Central Europe Acquisition: Growth, Value
Central Europe Acquisition: Growth, Value Czech Slovakia (1) Republic #3 Market Position #2 Market Position Czech Republic Slovakia (2) Hungary Romania #3 Market Position Hungary #3 Market Position Romania Croatia Bosnia (2) Croatia Serbia Bulgaria Bulgaria #1 Market Position #1 Market Position Mont
Slide 13: MCI: Growing Volumes & Reducing Investment
MCI: Growing Volumes & Reducing Investment (000s HL) MCI Total Volume MCI Underlying Pretax Income(Loss)/HL1 $0 2,000 ($5) 1,500 ($10) ($15) 1,000 ($20) ($25) 500 ($30) 0 ($35) 2009 2010 2011 2012 2009 2010 2011 2012 2013 2014 2015 2016 1Non-GAAP underlying pretax income (loss) is calculated by excl
Slide 14: Driving TSR with PACC Model
Driving TSR with PACC Model • Core brand investments Brand-Led • Innovation Profit Growth • Cost reductions Profit • Revenue and mix management After Cash • Capital expenditure efficiencies Capital Generation • Working Capital improvements Charge • Disciplined cash use Cash and • Return-driven crite
Slide 15: Enablers – 2013 and Beyond
Molson Coors Growth Brand-Led Profit Cash Cash and Capital Generation Enablers – 2013 and Beyond Growth Allocation Delivering Investing Driving Share Drive Cost Value Behind in Above Savings & Added Core Premium Commercial Innovation Brands Excellence 15
Slide 16: Delivering Value Added Innovation
Delivering Value Added Innovation
Slide 17: $100 Million of Gross Profit from Innovation
$100 Million* of Gross Profit Brand-Led Profit Cash Cash and Capital Generation from Innovation Growth Allocation Adding News & Excitement Delivering New Options for Behind Core Brands Changing Preferences *Past 3 years (2010-2012) 17
Slide 18: Investing Behind Our Core Brands
Investing Behind Our Core Brands
Slide 19: Coors Light - Owns Rocky Mountain Cold Refreshment Globally
Coors Light - Owns Rocky Mountain Brand-Led Profit Cash Cash and Capital Generation Cold Refreshment Globally Growth Allocation US Canada UK 19
Slide 20: Molson Canadian
“Made from Canada” – Brand-Led Profit Cash Cash and Capital Generation Molson Canadian Growth Allocation Absolute Volume & Market Share – Molson Canadian (000 HL) 20
Slide 21: Carling Regaining Momentum
“Brilliantly British Refreshment” Brand-Led Profit Cash Cash and Capital Generation - Carling Regaining Momentum Growth Allocation Absolute Volume & Market Share – Carling UK (000 HL) Carling % Share of Beer 20.0% 15.0% 10.0% 5.0% 0.0% Total Trade On-Trade Off-Trade 1H 2012 1H 2013 21
Slide 22: Staropramen - The Spirit of Prague
“The Spirit of Prague” - Brand-Led Profit Cash Cash and Capital Generation Staropramen Growth Allocation Absolute Volume & Market Share– Staropramen (000 HL) 22
Slide 23: Miller Lite - Commitment to Great Taste & Innovation
A Commitment to Great Taste & Brand-Led Profit Cash Cash and Capital Generation Innovation - Miller Lite Growth Allocation Absolute Volume & Market Share – Miller Lite (000 HL) 23
Slide 24: Driving Share in Above Premium
Driving Share in Above Premium
Slide 25: America's Largest Craft Brewer - Tenth and Blake
America’s Largest Craft Brand-Led Profit Cash Cash and Capital Generation Brewer - Tenth and Blake Growth Allocation ® 25 11
Slide 26: Canada Expands Above Premium Portfolio
Canada Expands Above Brand-Led Profit Cash Cash and Capital Generation Premium Portfolio Growth Allocation 26
Slide 27: Building AP Portfolio in Europe - Led by UK
Building AP Portfolio in Europe Brand-Led Profit Cash Cash and Capital Generation -Led by UK Growth Allocation 27
Slide 28: Driving TSR with PACC Model
Driving TSR with PACC Model • Core brand investments Brand-Led • Innovation Profit Growth • Cost reductions Profit • Revenue and mix management After Cash • Capital expenditure efficiencies Capital Generation • Working Capital improvements Charge • Disciplined cash use Cash and • Return-driven crite
Slide 29: >$1 Billion of Cost Reductions Fuel Top-Line and Profit Growth
>$1 Billion of Cost Reductions Brand-Led Profit Cash Cash and Capital Generation Fuel Top-Line and Profit Growth Allocation ($millions) Cumulative Annualized Cost Savings $1,200 $1,000 $800 $600 $400 $200 $0 2005 2006 2007 2008 2009 2010 2011 2012 Molson Coors 42% of MillerCoors Nearly $1.1 billion
Slide 30: Ongoing Cost Efficiencies Will Fuel Growth Investments
Ongoing Cost Efficiencies Will Brand-Led Profit Cash Cash and Capital Generation Fuel Growth Investments Growth Allocation • Long-term sustainability − Savings of $40-$60 million/year for at least the next 5 years* − Includes Central Europe deal synergies • Driven through: efficiency and effectivene
Slide 31: Capital Efficiency Drives Cash and Value
Capital Efficiency Drives Cash Brand-Led Profit Cash Generation Cash and Capital and Value Growth Allocation • Capital Spending − 2013 outlook: $450-$500 million* • Business transformation in US • Information systems in Europe • Innovation in Canada, US and Europe • Higher than maintenance capital −
Slide 32: Working Capital and Asset Intensity: $300 Million Target
Working Capital and Asset Brand-Led Profit Cash Generation Cash and Capital Intensity: $300 Million Target Growth Allocation Days Sales Outstanding Days Payables Outstanding 70 70 68 60 66 50 64 40 62 30 60 20 58 10 56 0 2009 2010 2011 2012 2009 2010 2011 2012 Days Inventories Outstanding Cash Conve
Slide 33: Profit, Capital Efficiency/Structure Drive FCF
Profit, Capital Brand-Led Profit Cash Generation Cash and Capital Efficiency/Structure Drive FCF Growth Allocation ($millions) MCBC Underlying Free Cash Flow $1,000 $887 $865 $800 $681 $700 $618 $600 $508 $426 $400 $315 $200 $0 2006 2007 2008 2009 2010 2011 2012 2013F Underlying free cash flow is de
Slide 34: Business Drives Substantial FCF Per Share
Business Drives Substantial Brand-Led Profit Cash Generation Cash and Capital FCF Per Share Growth Allocation MCBC Underlying Free Cash Flow/Share ($millions) $5 $4.73 $4.76 $4 $3.66 $3.32 $3 $2.74 $2.46 $1.99 $2 $1.74 $1.85 $1 $0 2006 2007 2008 2009 2010 2011 2012 1H 12 1H 13 Underlying free cash f
Slide 35: Short-Term Cash Use Priority: Deleverage
Short-Term Cash Use Priority: Brand-Led Profit Cash Cash and Capital Generation Deleverage Growth Allocation Debt/EBITDA 5x 4.4x 2 4x 3.6x 3.0x 3.0x 2.9x 2.8x 2.8x 2.9x 2.8x 3x 2x 1.8x 1.6x 1.4x 0.7x <2x 1x 0.8x 0.6x 0x 2006 2007 2008 2009 2010 2011 2012 2015 Pro Forma Goal S&P Adjusted Debt / EBITD
Slide 36: Key Value Driver: Disciplined Cash Use
Key Value Driver: Disciplined Brand-Led Profit Cash Cash and Capital Generation Cash Use Growth Allocation • Cash use priorities − Strengthened balance sheet by reducing liabilities − Returning cash to shareholders − Brand-led growth opportunities • Short-medium term focus: Balance sheet, especially
Slide 37: Strong Base, Driving Total Shareholder Return
Strong Base, Driving Total Brand-Led Profit Cash Cash and Capital Generation Shareholder Return Growth Allocation • Molson Coors global overview • Historical performance context − Steady, growing pretax profit, even in difficult times − Strong, stable EBITDA − Substantial cash generation and cash re
Slide 38: Q&A
Q&A Molson Coors Brewing Company Barclays Back-to-School Consumer Conference September 4, 2013
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