Molson Coors Beverage Company · NYSE:TAP
Molson Coors Beverage — Q3 2019 Earnings Presentation
28 slides from Molson Coors Beverage's earnings presentation, Oct 30, 2019
Slide 1: Q3'19 Results & Revitalization Plan
Q3’19 Results & Revitalization Plan October 30, 2019
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation includes “forward-looking statements” within the meaning of the U.S. federal securities laws. Generally, the words “believe,” “expect,” “intend,” “anticipate,” “project,” “will,” “outlook,” and similar expressions identify forward-looking statements, whic
Slide 3: Introduction
Introduction We are one of the world’s leading brewers with beers that have stood the test of time In the face of changing consumer behavior and taste, we must change to get to consistent topline growth We are implementing a plan to invest in our brands, making President & hard choices to unlock res
Slide 4: Chief Financial Officer Tracey Joubert
Chief Financial Officer Tracey Joubert
Slide 5: Third Quarter 2019
Third Quarter 2019 KEY TAKEAWAYS NSR UNDERLYING COGS/HL UNDERLYING EBITDA ( c o n s t a n t c u r r e n c y) ( c o n s t a n t c u r r e n c y) ( c o n s t a n t c u r r e n c y) • Strong pricing in all BUs • Positive global sales mix -2.0% +5.9% -5.6% • Offset by volume declines • Inflation, volume
Slide 6: United States Q3 2019 Performance
United States Q3 2019 Performance KEY TAKEAWAYS • Strong pricing, mix positive NSR COGS/HL UNDERLYING EBITDA for first time since Q2 2017 • Unfavorable brand volume -2.3% +6.6% -8.6% and negative impacts of timing of distributor inventory levels • Inflation, volume deleverage, unanticipated increase
Slide 7: Europe Q3 2019 Performance
Europe Q3 2019 Performance NSR COGS/HL UNDERLYING EBITDA KEY TAKEAWAYS (c ons tant c ur r enc y) (c ons tant c urrenc y) ( c ons tant c urrenc y) • Positive pricing and mix • Volume down slightly +1.7% +3.5% +0.6% • COGS/HL increase driven by inflation • Lower incentive compensation • Higher total m
Slide 8: Canada Q3 2019 Performance
Canada Q3 2019 Performance NSR COGS/HL UNDERLYING EBITDA KEY TAKEAWAYS (c ons tant c ur r enc y) (c ons tant c urrenc y) (c ons tant c urrenc y) • Continued positive pricing -4.9% +9.7% -12.3% • Lower brand and contract volumes • Volume deleverage, cycling PY distribution gains, brewery start-up cos
Slide 9: International Q3 2019 Performance
International Q3 2019 Performance NSR COGS/HL UNDERLYING EBITDA KEY TAKEAWAYS (c ons tant c ur r enc y) (c ons tant c urrenc y) (USD m illions , % c ons tant c urrenc y) • Volume decline driven by Paraguay, India, -15.5% +6.1% +189.7% Puerto Rico, and shipment timing $7.7 • Net sales decrease driven
Slide 10: 2019 Outlook
2019 Outlook COST SAVINGS ~$700M 2017-2019 2019 CONSOLIDATED Mid-single digit percentage increase constant currency UNDERLYING COGS/HL 2019 CONSOLIDATED $275M +/- 5% INTEREST EXPENSE 2019 CAPITAL SPENDING $700M +/- 10% 2019 UNDERLYING D&A ~$850M 2019 UNDERLYING FCF $1.4 billion +/- 10% 10
Slide 11: Revitalization Plan
Revitalization Plan
Slide 12: We Have The Scale & Brands To Compete Successfully
We Have The Scale & Brands To Compete Successfully Above Premium Adjacencies ◼ $10.5 billion in net sales revenue ◼ Nearly 90 million HL brand volume ◼ $2.3 billion in underlying EBITDA Premium Economy ◼ $1.3 billion in underlying free cash flow ____________________ Note: For the 12-months ended Sep
Slide 13: Financial Discipline
Financial Discipline Cost Savings $700M expected savings from 2017-2019 Strong Cash Flow Anticipated 3 year average FCF delivery of more than $1.4B (1) Balance Sheet $2.7B debt reduction (2) Strength Strong Cash Increased dividend by ~40% in September 2019 Return ____________________ (1) Fiscal year
Slide 14: What Has Affected Molson Coors Performance
What Has Affected Molson Coors Performance Fundamental Changes in Growth Drivers… …Opportunity to improve ◼ Rapidly shifting drinking preferences and behaviors ◼ Increase exposure to growing segments ◼ Innovation and direct customer communication led by ◼ Bigger and faster innovations disruptive bra
Slide 15: Our Revitalization Plan
Our Revitalization Plan Strategic Organizational Invest in our Aggressively Expand in Increase Streamline our iconic brands grow above adjacencies investment in company to premium and beyond marketing and enable growth beer beer capabilities 15
Slide 16: Invest In Iconic Brands
Invest In Iconic Brands Stabilize brand performance and position for sustainable growth ◼ Accelerating investment behind our largest brands ◼ Focusing on recruitment of new legal drinking age consumers ◼ Driving relevance with breakthrough marketing ◼ Innovating on core brands to attract new legal a
Slide 17: Making Progress on Coors Light, Our Top Priority
Making Progress on Coors Light, Our Top Priority Coors Light Sales Volume % Change (1) (1.2%) (2.4%) (4.4%) ▪ Attracting new legal age drinkers 2 billion ▪ Refreshed brand purpose; stronger emotional relevancy (6.3%) PR impressions ▪ Breakthrough new creative highlighting new occasions earned in Q3
Slide 18: Redefining "Miller Time" For a New Generation
Redefining “Miller Time” For a New Generation Miller Lite Volume % Change (1) 1.6% 0.4% (0.7%) (1.9%) 2018 L52W L13W L4W 20 quarters of consecutive segment share gain ____________________ (1) Nielsen All Outlet as of October 19, 2019. 18
Slide 19: Aggressively Grow Above Premium
Aggressively Grow Above Premium BLUE MOON OVER 30% OF EUROPE BELGIAN WHITE’S PORTFOLIO IS ABOVE BEST QUARTER PREMIUM (1) SINCE 2017 IN THE US +53% YEAR OVER YEAR, FASTEST +40% YTD GROWING TOP-30 IN CANADA (1) IMPORT IN THE US (2) ____________________ (1) Internal data. YTD through September 30,2019
Slide 20: Exciting New Innovation Pipeline for 2020
Exciting New Innovation Pipeline for 2020 Premiumize Develop Above Premium Brands to Enhance Value The ultimate light beer One-of-a-kind taste, lower Pure light beer – organic calories ingredients National distribution to start in 2020 To launch in 2020 To launch in March 2020 20
Slide 21: Recent Success Expanding into Adjacencies
Recent Success Expanding into Adjacencies CARLING BLACK TOP 10 GROWTH FRUITS DRAUGHT BRAND (2) +75% YEAR OVER YEAR (1) TWO #1 NEW FMB BRAND FRANCHISE IN 2018 AND 2019 WINE SPRITZERS, A LIGHT & REFRESHING RAPID SCALE-UP LEVERAGING ALTERNATIVE TO DISTRIBUTION BEER, PLATFORM 4 MONTHS TO MARKET ________
Slide 22: Strong Pipeline of Additional Adjacencies
Strong Pipeline of Additional Adjacencies INTRODUCING POSITIVE MARKET VIZZY! TEST RESULTS THE FIRST HARD CAPITALIZING ON RTD SELTZER INFUSED COFFEE GROWTH WITH SUPER FRUITS EARLY MOVER ICONIC BRAND ADVANTAGE DELIVERING A LOW FULL PORTFOLIO OF SUGAR AND LOW THC AND CBD NON- CALORIE RECIPE ALC BEVERAG
Slide 23: Molson Coors Beverage Company
Molson Coors Beverage Company
Slide 24: Increased Investment in Capabilities
Increased Investment in Capabilities TARGETED INSIGHTS AND NEW ECOMMERCE FORMS OF INNOVATION NEXT-GEN IN-HOUSE MARKETING PRECISION MARKETING CAPABILITIES 24
Slide 25: Reorganizing to Simplify and Fund Growth
Reorganizing to Simplify and Fund Growth Streamlining our company… …To Support Our Growth ◼ Consolidating operations for the U.S. and Canada ◼ Delivers nimble, faster moving company ◼ Two business units: North America and Europe ◼ Creates more accountability within the leadership team ◼ Consolidatin
Slide 26: Outlook And Capital Allocation
Outlook And Capital Allocation 2020 Guidance • A Transition Year • Net Sales Revenue expected to be flat to down low-single-digits on a constant currency basis • Underlying EBITDA expected to be down mid-single-digits on a constant currency basis from trailing twelve months (1) • Expected Underlying
Slide 27: Molson Coors Beverage Company
Molson Coors Beverage Company
Slide 28: Questions & Answers
Questions & Answers
Molson Coors Beverage Company — Q3 2019 Earnings Presentation on 6ix