Molson Coors Beverage Company · NYSE:TAP
Molson Coors Beverage — Molson Coors Brewing Company — Investor Day (June 2013)
108 slides from Molson Coors Beverage's investor day presentation, Jun 18, 2013
Slide 1: Investor Day/Seminar
Investor Day/Seminar Gary Leibowitz Senior Vice President, Investor Relations SABMiller Dave Dunnewald Vice President, Global Investor Relations Molson Coors Brewing Company
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation includes ‘forward-looking statements’. These statements contain the words “anticipate”, “believe”, “intend”, “estimate”, “expect” and words of similar meaning. All statements other than statements of historical facts included in this presentation, includi
Slide 3: World's 2nd largest brewer, with superior revenue and profit growth
World’s 2nd largest brewer, with superior revenue and profit growth • F13 organic, cc revenues +7%, EBITA +9%, and adjusted eps +11% • #1 or 2 position in > 90% of markets • Leading brands and portfolios, shaped by deep local insights, building beer category and profit pools • c. 75% of EBITA derive
Slide 4: 2012 Pro Forma Worldwide Beer Volume
2012 Pro Forma Worldwide Beer Volume 2012 Pro Forma Underlying Operating Income1 14.0% 38.4% 4.9% 14.4% 21.1% 4.3% 11.0% 45.8% 46.6% 2012 Pro Forma Net Sales 16.8% 27.1% 10.8% 2.1% MillerCoors (42%) Central Europe UK 43.4% Canada MCI (1) Does not include underlying operating losses for Corporate and
Slide 5: Tom Long
Tom Long CEO
Slide 6: Since launch …
Since launch … • Nearly $900 million in savings/synergies • More than $5 billion in net income since inception • More than 63 percent shareholder return 6
Slide 7: Since launch …
Since launch … • Coors Light number 2 beer • Tenth and Blake is largest craft brewer • Elevated brewing and packaging quality • Chain is an advantage • Building capability MillerCoors Advantage 7
Slide 8: Rapid consumer changes
New Brewers Distributors Retailers Rapid consumer changes Adaptive industry Accelerated fragmentation 8
Slide 9: Winning in Beer 2.0
Winning in Beer 2.0 Earn Customer Preference Evolve Our Portfolio • Deliver best-in-category retail execution • Take share in Premium Lights • Drive disproportionate growth in chains • Accelerate share in Crafts and Imports • Enable the most effective distributor network • Maintain Economy portfolio
Slide 10: Evolve Our Portfolio
% of Industry Volume Economy Premium Light Premium Regular Above Premium Evolve Our Portfolio 2012 Industry 2012 MillerCoors 2016 MillerCoors 7% 11% 30% 57% 57% 35% 11% 5% 4% 31% 28% 24%
Slide 11: Drive Tenth and Blake portfolio
• Drive Tenth and Blake portfolio • Accelerate innovation • Increase investment 11
Slide 12: Take share in Premium Light
• Take share in Premium Light • Win with multicultural • Continuous innovation 12
Slide 13: SIMPLIFY Reduce Costs and Inefficiencies
SIMPLIFY AMPLIFY Elevate and Grow Share of Reduce Costs and Expand Expand Targeted Economy Inefficiencies “Classic”/ Higher ABV Innovation Lights Regular Brands Portfolio Optimization 13
Slide 14: MillerCoors Segment Share Change
MillerCoors Segment Share Change Total MillerCoors Above Premium Economy Premium Regular Premium Lights - 0.20 0.40 0.60 Source: AC Nielsen All Outlet Data - 12 Weeks Ending 3/30/13
Slide 15: © MillerCoors:
© MillerCoors:
Slide 16: Andy England
Andy England Executive Vice President & Chief Marketing Officer
Slide 17: Millennial Truths Reaction
Millennial Truths Reaction Diversity Inclusivity Environmental concerns Looking for shared values Corporations can’t be trusted Go small (or “authentic”) Income disparity and Value un/underemployment Two-way conversation Technology driving information and fragmentation 17
Slide 18: Average adult consumes 12 hours of media every day
• Average adult consumes 12 hours of media every day • More than 100MM smartphone and tablet users in the U.S. • Media is being consumed – and generated – everywhere, by everyone, all the time • Paid-owned-earned model 18
Slide 19: ..and Evolving Our Portfolio
..and Evolving Our Portfolio
Slide 20: Economy market declining 1% per annum...
Economy market ...with ~30% lower ...resulting in ~75% …and MC has 3x declining 1% sales compared to average lower number of brands... per annum... our key competitor... sales per brand Est. Economy Market Size ($B) Number of Brands Sales Volume (M bbl) Sales Volume Per Brand (M bbl) 25 30 -29% 5 -1
Slide 21: AMPLIFY Grow Share of Economy Lights
AMPLIFY Elevate and Expand Grow Share of “Classic”/ Expand Higher ABV Targeted Innovation Economy Lights Regular Brands Portfolio Optimization 21
Slide 22: Volume
Net Producers Net Volume Revenue Contribution 56% 59% 63% Premium Lights Source: MillerCoors LLC - Income Statement by Brand - YTD May CY2013 22
Slide 23: Recruiting new drinkers
• Recruiting new drinkers • Addressing on-premise losses • Driving social relevance 23
Slide 24: The New Look of Miller Time
6 THe NeW LOOK OF MILLER TIME. gi TSMR 1) TIME.
Slide 25: Rebuilt the body. Kept the engine.
i is REBUILT THE BODY. ea KEPT THE ENGINE. a IT'sc “TIME
Slide 26: The new bottle
ey THE NEW BOTTLE. ASK YOUR BARTENDER TO INTRODUCE YOU IT'S TIME. |
Slide 27: Video: Miller Lite See and Say - New Bottle spot
Video: Miller Lite “"See and Say" - New Bottle spot 27
Slide 28: Attracting multicultural drinkers
• Attracting multicultural drinkers • Engaging our drinkers through digital • Delivering innovation and great design 28
Slide 29: World's Most Refreshing Beer
's MosT © & BEER: '*" THE WORLD REFRESHING 29
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Slide 32: Roll video: Summer Magic
Roll video: Summer Magic 32
Slide 33: MillerCoors 2012 vs Industry 2012
MillerCoors 2012 Industry 2012 31% 24% 5% 5% Craft 9% Craft 11% 13% Import 7% 30% 2% Import 8% Specialty 57% 35% 0.3% Specialty Premium Light Premium Regular Economy Above Premium Source: MillerCoors 2012 Internal STR Reporting, Beer Institute, BMI, industry sources 33
Slide 34: Opportunity
Craft and Imports 150+ Index Opportunity Only 66% of Opportunity consumer demand is met by the market 110-150 Index Premium 100-110 Index 34
Slide 35: Fawn
FAWN Hy (SYOUR CALLING YOU NEVER we L | KKK EXOORS! LASS AT tee ff” 35
Slide 36: 100% of authorized distributors ordering
• 100% of authorized distributors ordering • 106k PODs, 110% of target • Share and velocity equivalent to historical Shock Top • 0.08 all-outlet case share • Rite Aid: – 3rd largest craft beer ($ and case share) – Higher velocity than Sam Adams • 7-Eleven: – 6-pack is 4th best selling craft multipac
Slide 37: Video: Jimmy Fallon spot
Video: Jimmy Fallon spot 37
Slide 38: Strong Growth in FMBs
Strong Growth in FMBs ee Wiad oo | ss ies iS rf 38
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Slide 41: Granny Smith Blush
GRANNY SMITH BLUSH. BRANCH OUT. CRISP LIKE AN APPLE. BREWED LIKE AN ALE. {rom & FIND Us ON FACEBOOK
Slide 42: Branch Out
“9) _séODOIFFERENT TO 9 .:\ ‘THE CORE. BRANCH OUT. CRISP LIKE AN APPLE. BREWED LIKE AN ALE.
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Slide 44: Atrevete a probar algo nuevo
ATREVETE A PROBAR ALGO NUEVO. DELICIOSA COMO MANZANA. ELABORADA COMO CERVEZA.
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Slide 46: #5 fastest growing brand in the category
• #5 fastest growing • Sourcing 86% of its sales brand in the category1 from outside of the • 161k PODs, MillerCoors portfolio2 137% of target • 0.21 all outlet case share • Redd’s velocities are 2x Mike’s, Twisted and Smirnoff1 Source:1Nielsen- L13wk US XAOC/Conv, 2Dunnhumby loyalty card data 46
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Slide 48: Video: Redd's Bar
Video: Redd’s “Bar” 48
Slide 49: Innovation Ideas
Large team of millennial-focused, innovation experts fully resourced to drive evolution of the portfolio Exploration Development Launch Innovation Ideas 185 25 49
Slide 50: Millennial Truths Reaction MillerCoors Action
Millennial Truths Reaction MillerCoors Action Diversity Inclusivity Inclusive communications Brand-led Environmental concerns Looking for shared values responsibility campaigns Corporations can’t • Tenth and Blake Go small (or “authentic”) be trusted • Authentic brands Income disparity and • Trade-i
Slide 51: Tom Cardella
Tom Cardella President & CEO Tenth and Blake
Slide 52: Volume % Chg vs YA
Volume % Chg vs YA 30% 27% 23% 25% 22% 20% 17% 15% 2010 15% 11% 11% 10% 2011 10% 2012 5% 4% 0% TOTAL T&B BLUE MOON LEINIE'S FAMILY FAMILY Source: One View 52
Slide 53: Strategic Pillars
Strategic Pillars @LUE } MOON BREWING COMPANYw S e | al, 4 a" SUPER-PREMIUM Zp WA NATURAL HARD APPLE CIDERS 1B LEINENKUGEL BREWING COMPANY & 53
Slide 54: 2 million barrels
• 2 million barrels • Highest velocity per POD • ~50% higher than competition • Seasonals up 60% 54
Slide 55: Variety Pack Upside
Variety Pack Upside Average # of Items C-Store Upside Volume +43% vs. YA Lags lead competitor Low penetration Outlets Buying Average # Items Carried 140,000 BMBW Penetration of Through 6/1/13 YTD MillerCoors C-Store Outlets Nielsen Total Food YTD 5/4/13 120,000 250,000 7 100,000 200,000 6 80,000 5 1
Slide 56: Experimentation Exploration Invitation
Experimentation Exploration Invitation 56
Slide 57: Artful
f <- of AD 2) Arfful
Slide 58: Video: Brewmaster's Touch
VIDEO: “Brewmaster’s Touch” 58
Slide 59: Sources of Growth
Sources of Growth — Bue Moon BREWING Hispanic Growth “a in Craft 59
Slide 60: Sources of Growth
Sources of Growth _— GLUE: BREWING alud, Papa. fi ¢ : } Gwe Moon > srEwineco aa | Pe: a con una naranja. Pruébala con una rebanada de naranja y « disfruta de su aroma y sabor citricos. 4 = /
Slide 61: ao5 = /f
ao5 = /f oe / j LG o ie ( “a — - os i LEINENKUGEL BREWING COMPANY 61
Slide 62: Volume Growth +125% outside Great Lakes
Volume Growth Velocity Driven With Room to Grow +125% outside Turns faster than Low penetration Great Lakes the average craft Summer Shandy Volume (Excl GL) Summer Shandy Summer Shandy Outlet BBLs 1,000 Velocity Index to Craft Average Penetration 71 281 230 54% 32 29% Penetration of MC Penetration o
Slide 63: ACV % by Region
ACV % by Region Great Lakes: 73 Northeast: 25 Central: 33 Pacific: 27 Southeast: 36 Source: Nielsen Total Leinenkugel’s Summer Shandy Grocery/C-Store ACV Selling Latest 12 Weeks Thru 5/18/13 63
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Slide 65: Video: Summer Shandy Ad #1 Bottle
VIDEO: Summer Shandy Ad #1 “Bottle” 65
Slide 66: Ranking of Select Brands - Case Sales Per TDP
Ranking of Select Brands - Case Sales Per TDP 2,500 TOTAL FOOD LATEST 4 WEEKS THRU 4 WEEKS ENDING 6/1/13 2,000 1,500 1,000 500 - TOTAL TOTAL BLUE TOTAL SAMUEL TOTAL SAMUEL TOTAL SIERRA TOTAL NEW TOTAL BUD TOTAL BUD LEINENKUGEL'S MOON ADAMS ADAMS NEVADA PALE BELGIUM FAT LIGHT LIME-A- LIGHT SEASONAL B
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Slide 68: Experimentation Invitation
Experimentation Invitation 68
Slide 69: 100% cider-category growth
• 100% cider-category growth • 250% Crispin growth 69
Slide 70: High-end focus
• High-end focus • Priced $15/case higher • Fresh-juice advantage 70
Slide 71: Superior American liquid
• Superior American liquid • Build worth-more credentials • Build the male franchise 71
Slide 72: Peroni
Peroni ALAN TRADITION OF ES WITH THE CRISP 8 TASTE OF 72
Slide 73: Batch
Batch 19 73
Slide 74: Great Beer and Cider Merchants
Great Beer and Cider Merchants
Slide 75: Blue Moon
© MillerCoors ®LUE ©} MOON BREWING COM PAN Yw ] 75
Slide 76: Ed McBrien
Ed McBrien President, Sales & Distributor Operations
Slide 77: MillerCoors Advantage
Working with Our Largest Retailers MillerCoors Advantage 77
Slide 78: MillerCoors Advantage
MillerCoors Advantage “Best Alcohol #1 Chain Beverage Supplier” Sales Team 78
Slide 79: MillerCoors Advantage
MillerCoors Advantage “Best Alcohol #1 Chain Beverage Supplier” Sales Team 79
Slide 80: Meijer outperforming since MillerCoors named category captain
12.0 • Meijer outperforming MEIJER MEIJER COMPETITION 10.3 10.0 8.8 since MillerCoors 8.4 8.0 6.4 named category captain 6.0 5.0 5.3 4.0 • Total beer category 2.6 2.8 2.6 2.0 +41% since 2009 0.0 • Sustained and -2.0 -4.0 -1.9 consistent growth 2009 2010 2011 2012 YTD 2013 $ Vol %Chg vs YA Source: AC
Slide 81: U.S. Chain Benefits
U.S. Chain Benefits MillerCoors: Category first • Solutions rooted in insights • Build the base, Premium Lights • Fuel growth, 3-Year Study crafts and variety • Optimize selection and Chain influence benefits MillerCoors • Total distribution: +5% merchandising • Premium Light distribution: +6% • Vol
Slide 82: 17% of MillerCoors Volume
17% of MillerCoors Volume Framework for growth: DBI Columbia • Commitment to outperform ABI • Expectation to be among our best Andrews KEG 1 • Aligned annual business plan goals • Shared local investment Glazer’s Gold Coast • Strong management routines • Local scorecards Reyes • Monthly reviews • Tw
Slide 83: VIDEO: Ray G.
VIDEO: “Ray G.” 83
Slide 84: Early results: Framework for Growth Scorecard
Early results: Framework for Growth Scorecard • Senior management engaged Gate City Beverage, April 2013 • Scorecards driving collaboration • More focus on execution at retail • Commitment to beating peer groups 84
Slide 85: New Distributor Standards focus on what matters most
New Distributor Standards focus on what matters most • Quality is at the heart of our business • Distribution is foundational • Displays matter • Draught critical to on-premise • Competitive service levels required • Seamless execution drives chain 85
Slide 86: Distributor Standards
Distributor Standards New standards effective July 1st Tracking matrix for all standards First review of compliance by year-end 86
Slide 87: Channel Blueprints
Channel Blueprints 500+ Channel Blueprints Beer surveys to evaluate execution Monthly gap-closing reviews 87
Slide 88: Display Reporting
Display Reporting Weekly display tracking Goal is more beer on the floor Raise the bar across the network 88
Slide 89: Sales Improvements
Sales Improvements Benchmark groups Quarterly performance reviews Stepped-up intervention Fully-dedicated improvement team 89
Slide 90: Management Routines
CorpU “Best Corporate University” • Built by sales for sales • All training “leader led” • Field certification required • New management routines and tools Management Pre-Plan GM Coaching Complete Action Routines Distributor Call Conversation Item Planner 90
Slide 91: Targeted distribution: Independent small format opportunity
Targeted distribution: Independent small format opportunity Segment outlets to identify Identify gaps in highly right SKUs by store productive SKUs Building automated tools New Brands and Packages for expansion 91
Slide 92: VIDEO: MCDC BR Distribution
VIDEO: MCDC BR Distribution 92
Slide 93: North Carolina Pilot: Distribution +7.9% Volume +5.3% vs.
Targeted distribution: Independent small format opportunity Segment outlets to identify Identify gaps in highly right SKUs by store productive SKUs North Carolina Pilot: Distribution +7.9% Volume +5.3% vs. benchmark group Building automated tools New Brands and Packages for expansion 93
Slide 94: Winning in Chain New Standards Sales Academy
Winning in Chain New Standards Sales Academy MillerCoors Advantage Framework for Growth Targeted Distribution 2016 MillerCoors 94
Slide 95: Tracey Joubert
Tracey Joubert Chief Financial Officer
Slide 96: Top Line Revenue Growth and Cost Management
Portfolio Evolution Top Line Route to Market Revenue Growth Enhanced Revenue Management Productivity Acceleration Initiatives Cost Brewing Process Management Logistics 96
Slide 97: Brand Segment
Industry MillerCoors AVG. CASE PRICE BY SEGMENT Brand Segment Mix Mix MILLERCOORS $35.00 Premium Light 34.7 57.3 $30.00 $27.38 $25.00 Premium Regular 11.4 4.5 $20.00 $19.49 $18.99 $15.00 $15.00 Above Premium 30.3 7.3 $10.00 $5.00 $- Economy 23.6 30.9 Premium PREMIUM LIGHT Premium Light PREMIUM Above
Slide 98: Expected Profit Pool Growth
Expected Profit Pool Growth HIGH Drive Share Drive Both Margin/Share LOW Drive Margin LOW HIGH Relative Market Share Planning Unit 98
Slide 99: Key Principles
Regional Vice President Key Principles 1. Drive greater consistency in ways of working Director of on revenue management General Business Managers Development & Strategy 2. Enhance depth of revenue management capability Director of Revenue Management 3. Strengthen the link between corporate, regiona
Slide 100: Execute Promotion Analyze and Track Effectiveness
Analyze and Track Resource Reallocation Execute Promotion Effectiveness Assessment Reallocate to stronger Trade Promotion Tracker promotion events Eliminate Measures Excellent Good Fair Poor Volume Lift ROI ROI Average Display Facts Average Discount Depth Price Points (PTC) Share of promo spend (%)
Slide 101: Delivered nearly $900M of cost savings since JV formation
• Delivered nearly $900M of cost savings since JV formation $892 101
Slide 102: Reduce energy and water use
• Reduce energy and water use • Packaging labor – standardizing team structure, teamwork and manufacturing flexibility • Asset management – increase machine availability and efficiency while lowering maintenance cost 102
Slide 103: Unwavering commitment to quality while continually improving our brewery flexibility and capabilities
Unwavering commitment to quality while continually improving our brewery flexibility and capabilities • Increasing fermenting efficiency and effectiveness • Ensuring brewing procedures are in alignment with global best practices increasing throughout • Implementing technological advances to improve
Slide 104: Strategic sourcing effort to review capability, capacity, service, rates and solutions within logistics
Strategic sourcing effort to review capability, capacity, service, rates and solutions within logistics, resulting in: • Cost reductions • Reduced carriers: 250 to 150 • Improved fuel: 5.5 MPG to 6.25 MPG • Improved network load weight: 300 pounds/load • Expanded use of natural gas 104
Slide 105: Based on actions, confidence in increasing margin guidance to 30-60 bps
• Based on actions, confidence in increasing margin guidance to 30─60 bps 2013-2015 E – Medium-term guidance over a three-year period 105
Slide 106: Approximate 3-4 year CAGR ranges
Approximate 3-4 year CAGR ranges Volume • Flat to -1% Revenue per barrel • +2-4% EBITA margin • +30−60 bps average per year (subject to volume trends) 106
Slide 107: © MillerCoors:
© MillerCoors:
Slide 108: © MillerCoors:
© MillerCoors:
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