Molson Coors Beverage Company · NYSE:TAP
Molson Coors Beverage — Molson Coors Brewing Company — Investor Day (June 2017)
101 slides from Molson Coors Beverage's investor day presentation, Jun 7, 2017
Slide 1: Molson Coors Brewing Company Annual 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 A N N U A L 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 7, 2017
Slide 2: Mark Hunter, President and CEO
MARK HUNTER PRESIDENT AND CEO M O L S O N C O O R S B R E W I N G C O M PA N Y
Slide 3: Forward Looking Statements
F O R WA R D L O O K I N G S TAT E M E N T Forward Looking Statements 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,”
Slide 4: Today's Agenda
T O D AY ’ S A G E N D A MARK HUNTER, CEO, MOLSON COORS • Introductions, corporate overview, and strategic priorities ENTERPRISE GROWTH TEAM & BUSINESS UNIT PRESENTATIONS • Kandy Anand, Chief Growth Officer, Enterprise Growth Team • Gavin Hattersley, CEO, MillerCoors • Fred Landtmeters, CEO, Molson
Slide 5: A Focus On Delivering Growth & Long Term Shareholder Value
A FOCUS ON DELIVERING GROWTH & LONG TERM S H A R E H O L D E R VA L U E PA C C R E M A I N S K E Y D E C I S I O N D R I V E R • Investing behind core brands BRAND-LED • Driving share in above premium PROFIT GROWTH • Delivering value-added innovation • Commercial excellence PROFIT AFTER • Cost reduc
Slide 6: Acquiring MillerCoors & Miller International
A C Q U I R I N G M I L L E R C O O R S & M I L L E R I N T E R N AT I O N A L A UNIQUE AND GAME-CHANGING OPPORTUNITY FOR MOLSON COORS Consistent with Molson Coors’ PREMIUM IMPORT/ FMB/CIDER CRAFT ECONOMY strategic vision INT’L Iconic American beer brands support global growth Drives substantial fin
Slide 7: Purchased At An Attractive Valuation
P U R C H A S E D AT A N AT T R A C T I V E VA L U AT I O N O N E O F T H E L O W E S T I N D U S T RY P U R C H A S E M U LT I P L E S 9.2x based on 2014 EV/EBITDA (adjusted for ANNOUNCED MULTIPLE net present value of expected tax benefits) 8.5x based on MillerCoors 2016 EBITDA, UPDATED MULTIPLE in
Slide 8: Molson Coors: Yesterday Vs. Today
M O L S O N C O O R S : Y E S T E R D AY V S . T O D AY N E A R LY D O U B L E S T H E S I Z E O F T H E C O M PA N Y YESTERDAY TODAY 42% OF MILLERCOORS PRO FORMA – 100% (FY 2015) OF MILLERCOORS (FY 2016) Net Sales* $6.8 $11.0 BILLION BILLION Underlying EBITDA $1.3 $2.4 BILLION BILLION WW Brand Volu
Slide 9: Molson Coors Today
M O L S O N C O O R S T O D AY $ 11 B I L L I O N O F R E V E N U E A N D $ 2 . 4 B I L L I O N O F E B I T D A WORLDWIDE NET UNDERLYING BRAND SALES (1) EBITDA(2) VOLUME 4% 1% 16% 12% 23% 14% 13% 8% 70% 74% 65% UNITED STATES EUROPE CANADA INTERNATIONAL MARKETS (1) Excludes Corporate and Eliminations
Slide 10: Our Strategic Framework – MCBC Brewhouse
O U R S T R AT E G I C F R A M E W O R K – M C B C B R E W H O U S E DRIVING OUR FIRST CHOICE AMBITION 10
Slide 11: 2017 Global Priorities
2017 GLOBAL PRIORITIES STRATEGIC • Embed Our Brew & Our Brewhouse • Execute Integration & Cost Savings Plan • Drive Commercial Excellence Globally – Top Line Growth • Enterprise Growth Team • Accelerate World Class Supply Chain 2.0 • Build Footprint and Scale via MCI • Deliver Talent & Capability Ag
Slide 12: 2017 Global Priorities
2017 GLOBAL PRIORITIES FINANCIAL • Deliver $1.2 Billion in Free Cash Flow, +/- 10% • Pay Down Debt – Retain Investment Grade Status • Top and Bottom-Line Performance • Drive TSR • Increased Earnings Visibility • Cash Tax Benefit • Phasing of Cost Savings • Medium Term EBITDA Guidance Driving sustain
Slide 13: First Choice Agenda Across All Business Units
FIRST CHOICE AGENDA ACROSS ALL BUSINESS UNITS DRIVING TOP-LINE GROWTH US • Flat Volume by 2018, Volume Growth by 2019 & Beyond CANADA • Reigniting Growth EUROPE • Portfolio Premiumization & Building Off of a Strong Base INTERNATIONAL • Above Premium Portfolio Focus in High Growth Markets Focus on be
Slide 14: Enterprise Growth Team
ENTERPRISE GROWTH TEAM S U P P O R T I N G T H E A C C E L E R AT I O N O F T O P - L I N E G R O W T H BUILD WORLD CLASS COMMERCIAL CAPABILITIES DRIVE TRANSFORMATIONAL ACCELERATOR INITIATIVES GLOBAL FSM ________ INNOVATION BRANDS NPS INSIGHTS DIGITAL Delivered in close collaboration with the busine
Slide 15: Kandy Anand
KANDY ANAND CHIEF GROWTH OFFICER M O L S O N C O O R S B R E W I N G C O M PA N Y
Slide 16: Igniting Top And Bottom Line Growth
IGNITING TOP AND BOTTOM LINE GROWTH T W O P R O N G E D S T R AT E G Y T O A C C E L E R AT E O U R G R O W T H T R A J E C T O RY BUILD WORLD CLASS COMMERCIAL CAPABILITIES DRIVE TRANSFORMATIONAL ACCELERATOR INITIATIVES GLOBAL FSM ________ INNOVATION BRANDS NPS INSIGHTS DIGITAL Delivered in close co
Slide 17: Commercial Capabilities
C O M M E R C I A L C A PA B I L I T I E S QUICK WINS: LIFT AND SHIFT OPPORTUNITIES CATEGORY SELLING • Increases core brand distribution RETURN ON MARKETING INVESTMENT (ROMI) • Delivers ~3% efficiency annually CUSTOMER EXCELLENCE • NPS drives demonstrated First Choice achievement 17
Slide 18: Commercial Capabilities
C O M M E R C I A L C A PA B I L I T I E S QUICK WINS: ALIGNED ON GLOBAL APPROACHES COMMERCIAL EXCELLENCE FRAMEWORK • Supports best practice and world class capabilities • Global processes and tools 18
Slide 19: Commercial Capabilities
C O M M E R C I A L C A PA B I L I T I E S Q U I C K W I N S : G L O B A L S E G M E N TAT I O N • 1 global map; 8 demand occasions; 3 price tiers • Distinct role for every brand in portfolio Relax Connect Socialize Celebrate Desire to ‘Relax’ mindset Need to ‘impress’ Desire to ‘celebrate’ ‘connect
Slide 20: Global Priority Brands
GLOBAL PRIORITY BRANDS G L O B A L S C A L E & D E M A N D S PA C E Present in ~40 countries Present in ~70 countries Present in 37 countries Present in ~25 countries Global priority brands grew 6.6% in Q1 20
Slide 21: Acquired Miller Volume
ACQUIRED MILLER VOLUME 2017 EXPECTED VOLUME BY BUSINESS UNIT TOTAL CONTRIBUTION • ~3 Million HL Annual Financial and Royalty Volume CANADA CONTRIBUTION • ~10% Financial Volume EUROPE CONTRIBUTION • ~25% Financial & Royalty Volume MC INTERNATIONAL CONTRIBUTION • ~65% Financial & Royalty Volume Attrac
Slide 22: Accelerator Initiatives
A C C E L E R AT O R I N I T I AT I V E S GLOBAL PRIORITY BRANDS • Upgrading Miller Lite • Launched MGD SoundClash • Upgrading Czech visual identity by Platform to accelerate Staropramen visual aligning with US awareness identity to align with global • Currently available in • Endorsed by global sup
Slide 23: Accelerator Initiatives: Digital Leadership
A C C E L E R AT O R I N I T I AT I V E S D I G I TA L L E A D E R S H I P F O R T H E F U T U R E DIGITAL PLATFORMS TO DELIGHT OUR CUSTOMERS • Connect all customer touchpoints on one platform MULTI-CHANNEL E-COMMERCE • Engage in direct-to-consumer PRECISION MARKETING • Give consumers topical reason
Slide 24: Accelerator Initiatives: Breakthrough Innovation
A C C E L E R AT O R I N I T I AT I V E S D R I V E B R E A K T H R O U G H I N N O VAT I O N GROW CORE BRANDS BY CREATING GROW THE BEER CATEGORY BY EXTRAORDINARY EXPERIENCES MAKING BEER MORE ACCESSIBLE GROW BEYOND BEER IMPROVE PACC 25
Slide 25: Growth Through Strategic Partnerships
A C C E L E R AT O R I N I T I AT I V E S G R O W T H T H R O U G H S T R AT E G I C PA R T N E R S H I P S Closing gaps in our portfolio & looking at new categories 27
Slide 26: Igniting Top And Bottom Line Growth
IGNITING TOP AND BOTTOM LINE GROWTH T W O P R O N G E D S T R AT E G Y T O A C C E L E R AT E O U R G R O W T H T R A J E C T O RY BUILD WORLD CLASS COMMERCIAL CAPABILITIES DRIVE TRANSFORMATIONAL ACCELERATOR INITIATIVES GLOBAL FSM ________ INNOVATION BRANDS NPS INSIGHTS DIGITAL Delivered in close co
Slide 27: Gavin Hattersley
GAVIN HATTERSLEY CEO, MILLERCOORS M O L S O N C O O R S B R E W I N G C O M PA N Y
Slide 28: Flat By 2018
M I L L E R C O O R S G R O W T H I M P E R AT I V E Flat by 2018 Total volume growth by 2019 Not a rallying cry – it’s our plan 30
Slide 29: Share Performance
SHARE PERFORMANCE Share of Industry YTD Share L13 YTD Share L13 YTD Share L13 Change Total Volume 26.4 (0.4) 48.6 (0.9) 8.0 1.0 Share of Segment YTD Share L13 YTD Share L13 YTD Share L13 Change Premium Light 43.6 0.9 55.9 (0.9) Premium Regular 12.6 0.5 75.7 (1.6) Above Premium 7.6 (0.7) 25.6 (0.2) 2
Slide 30: Volume Performance
VOLUME PERFORMANCE STR PERCENT CHANGE VS. PRIOR YEAR 1.0 0.5 0.0 Industry -0.5 Estimate -1.0 -1.5 -2.0 -2.5 Gap 0.4% -3.0 MillerCoors -3.5 Gap 2.5% -4.0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2015 2015 2016 2016 2016 2016 2017 Gap to industry continues to narrow Source: Public industry estimates and internal STR data
Slide 31: Portfolio Strategy
P O R T F O L I O S T R AT E G Y H O W W E ’ L L A C H I E V E O U R G R O W T H I M P E R AT I V E Continue to grow share in Premium Accelerate growth in Above Premium Stabilize Economy to protect and expand the beer category Every segment plays a role in achieving growth 33
Slide 32: Continue To Grow Share In Premium
CONTINUE TO GROW SHARE IN PREMIUM R E J U V E N AT E & R E S T O R E R E S P E C T F O R O U R A M E R I C A N L A G E R S • Gained segment • Gained segment • On its way to an 11th share for 8 share for 10 consecutive year of consecutive quarters consecutive quarters growth Maintaining strong PL seg
Slide 33: Accelerate Growth In Above Premium
A C C E L E R AT E G R O W T H I N A B O V E P R E M I U M C R E AT E A N D S C A L E B R A N D S I N N E W A N D G R O W I N G S E G M E N T S LEVERAGE NATIONAL ESTABLISH AND GROW CRAFTS PRESTIGE IMPORTS • Belgian White: up • Peroni: best performance low- single digits in Q1 since Q1 2012 • Leinenk
Slide 34: High-Potential Authentic Mexican Import
A C C E L E R AT E G R O W T H I N A B O V E P R E M I U M HIGH-POTENTIAL AUTHENTIC MEXICAN IMPORT Strong brand credentials Driving incremental growth within the high-end and fastest-growing segment 37
Slide 35: Growth In FMB
A C C E L E R AT E G R O W T H I N F M B G R O W T H S I G N I F I C A N T LY H I G H E R T H A N A B I A N D M I K E ’ S MILLERCOORS FMB 35.5% CAGR SINCE 2013 2013 2014 2015 2016 MIKE'S FMB ABI FMB 7.1% CAGR SINCE 2013 -6.2% CAGR SINCE 2013 2013 2014 2015 2016 2013 2014 2015 2016 Source: Nielsen 38
Slide 36: Stabilize Economy
S TA B I L I Z E E C O N O M Y COMPETE INTELLIGENTLY TO PROTECT AND EXPAND THE BEER CATEGORY • Best performance • Best performance since Q3 2009 since Q2 2010 • Declined low double-digits • Up low • Up high-teens double-digits Significant trend improvement in Q1 vs. past several years Source: Intern
Slide 37: NSR And Brand Strategies
N S R A N D B R A N D S T R AT E G I E S L O W E R N S R / H L R E S U LT S I N Q 1 D R I V E N B Y M A N Y FA C T O R S PRO FORMA NSR/HL GROWTH 2.0% 1.5% 1.0% 0.5% 0.0% FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 -0.5% Sales Mix Net Price Excise Tax Drawback Expect improvement in full-year mix
Slide 38: Marketing, Platforms, Investment
M A R K E T I N G , P L AT F O R M S , I N V E S T M E N T RIGHT PERSON, RIGHT PLACE, RIGHT MESSAGE Media strategies with proven ROI, scalable opportunities Leveraging ROMI to ensure spend efficiency and effectiveness 41
Slide 39: Expanding Building With Beer
E X PA N D I N G B U I L D I N G W I T H B E E R C O M M O N WAY O F S E L L I N G A C R O S S O U R S Y S T E M • +1% in Core 4 distribution • Participating distributors growing singles faster than balance of market • Display Support of Feature • Pilot distributors +6.1% (L13 weeks 4/29) growing di
Slide 40: Winning In Chain
WINNING IN CHAIN CHAIN BUSINESS DRIVING IMPROVED TRENDS Supplier of the Year Awards Condon Oil 2016 chain volume trends outperformed independents by 250 bps 43
Slide 41: Customer Excellence
CUSTOMER EXCELLENCE MC 3.61 BBC 3.59 CBBD 3.46 HUSA 3.14 MHL 3.06 NBB 3.03 SNB 2.95 DGUSA 2.82 PBC 2.68 YNG 2.65 CBA 2.56 ABI 2.48 44 Ranked #1 supplier in Tamarron Distributor Survey 44
Slide 42: Driving Our Growth Imperative
D R I V I N G O U R G R O W T H I M P E R AT I V E Build momentum across all segments 45
Slide 43: Frederic Landtmeters
FREDERIC LANDTMETERS CEO MOLSON COORS CANADA
Slide 44: Canada's Business Imperative
C A N A D A’ S B U S I N E S S I M P E R AT I V E TOP-LINE GROWTH COUPLED WITH COST EFFICIENCIES • Investing behind core brands • Driving share in above premium REIGNITING GROWTH • Delighting Consumers & Customers • Optimizing sales & marketing spend REDUCING COST BASE • Capturing Global Synergies t
Slide 45: Canadian Beer Industry
CANA DI A N BEER INDUSTRY C O N S U M E R S S H I F T I N G TO WA R D S A B O V E P R E M I U M TOTAL CANADIAN BEER INDUSTRY BY SEGMENT INDUSTRY CAGR 2014-16 10.0 +14.0% MCBC FOCUS: 15.6 +3.8% • Re-energize Mainstream 8.4 -1.7% • Accelerate growth within the Above Premium segment 45.2 -2.9% AP Craft
Slide 46: Energizing The Core
ENERGIZING THE CORE PREMIUM SEGMENT SHARE TREND IMPROVING YTD 2017 • Coors Light Q1 improvement in share trend at TBS & LCBO – strong start to closing trial gap with LDA+ audience • Molson Canadian 30% increase in display space Difference makers improving share trend for Coors Light and Molson Canad
Slide 47: Energizing The Core: Coors Light
ENERGIZING THE CORE COORS LIGHT DIFFERENCE MAKERS TO DRIVE SHARE OF SEGMENT GROWTH • Strengthen communications & share of voice (highest creative score in 5 years) • Improve quality & taste perceptions • Breakthrough innovation • Reclaim lapsed consumers via multi-channel reach strategy 1st Q Moment
Slide 48: Energizing The Core: Molson Canadian
ENERGIZING THE CORE MOLSON CANADIAN DIFFERENCE MAKERS TO WIN DURING CANADA’S 150TH YEAR • Grow share through emotional connection nationally & increased trials in Quebec • Maximize effectiveness of hockey sponsorships • Quality campaign testing top 1% in Canada; 95% short-term sales likelihood Q1 Mo
Slide 49: Growing Above Premium & Craft
GROWING ABOVE PREMIUM & CRAFT RESHAPING PORTFOLIO TO PURSUE AREAS OF GROWTH1 CRAFT VOLUME AP IMPORT CIDER VOLUME VOLUME +17.4% +13.1% +9.8% 2014 2015 2016 2014 2015 2016 2014 2015 2016 Industry CAGR: 14.0% Industry CAGR: 3.8% Industry CAGR: 9.6% MCC’s AP & Craft brands are outperforming the overall
Slide 50: Belgian Moon
GROWING ABOVE PREMIUM & CRAFT BELGIAN MOON LEVERAGING THE #1 CRAFT BEER IN THE UNITED STATES • Capitalize on High Growth Craft Segment • Leading Wheat Beer Serves as Entry to Craft • Investing Wisely With Tactical Media Approach to Media Spend Belgian Moon grew more than 8x in 2016 vs. prior year 55
Slide 51: Mad Jack
MAXIMIZING ADJACENCY BRANDS MAD JACK DIFFERENCE MAKERS CONTINUE TO DRIVE AWARENESS (+5pts) and TRIAL (+3.6pts) GAINS • Capitalize on fastest growing RTD sub-category with innovations • Drive awareness of TM and new innovations • Recruit new users - i.e. partnership with worldgaming.com for e-gaming
Slide 52: Re-Introducing Miller To MC Canada
RE-INTRODUCING MILLER TO MC CANADA MILLER BRANDS IN CANADA DRIVING AWARENESS & BRAND RELEVANCE OF MILLER IN CANADA • Leverage strong brand health • Capitalize on global marketing assets • Simplify economy portfolio with Miller High Life introduction Miller Brands are fully integrated into MCC and se
Slide 53: Delighting Consumers & Customers
DELIGHTING CUSTOMERS & CONSUMERS FIELD SALES MANAGEMENT DELIGHTING CONSUMERS & CUSTOMERS THROUGH EXCEPTIONAL OUTLET EXECUTION • Global tools & Miller Coors best practices: +10% increase in outlet compliance • Improved call coverage: +20% vs. 2015 • Territory management and outlet routing optimizatio
Slide 54: Delivering Exceptional Quality
DELIVERING EXCEPTIONAL QUALITY CUSTOMER NET PROMOTER SCORE STUDY (NPS) SUCCESSFUL PERFORMANCE WITH A FOCUS ON NPS • Our first choice for customers mandate supported through NPS metrics • Retail: score of 38 • On Premise: score of 56 • Transformed customers into MCC promoters • Retail Promoters grew
Slide 55: Reducing Cost Base
REDUCING COST BASE ENABLING GROWTH THROUGH EFFICIENT INFRASTRUCTURE MEASURES TO IMPROVE MARKETING SPEND EFFECTIVENESS • Return on Marketing Investment (ROMI) being integrated into decision-making Transparency • Enhancing Zero Based Budgeting (ZBB) discipline across the business Change of Mind Set •
Slide 56: Supply Chain Transformation
S U P P LY C H A I N T R A N S F O R M AT I O N A S S E T R E N E WA L , P R O D U C T I V I T Y G A I N , C O S T R E D U C T I O N NEW ASSETS GEARED TO STEP-CHANGE COST REDUCTION • Breaking ground for new Fraser Valley, BC brewery • Transforming Western supply chain with diversified production abi
Slide 57: Canada's Business Imperative
C A N A D A’ S B U S I N E S S I M P E R AT I V E TOP-LINE GROWTH COUPLED WITH COST EFFICIENCIES • Investing behind core brands • Driving share in above premium REIGNITING GROWTH • Delighting Consumers & Customers • Optimizing sales & marketing spend REDUCING COST BASE • Capturing Global Synergies t
Slide 58: Simon Cox
SIMON COX CEO MOLSON COORS EUROPE
Slide 59: MCE Has A Strong Base, With Upside Potential
MCE HAS A STRONG BASE, WITH UPSIDE POTENTIAL SOLID EARNINGS GROWTH EUROPE UNDERLYING EARNINGS* (M€) 163 +14% 142 *At constant currency Excluding Indirect Tax provision 2012 2016 Europe Underlying EBITDA* (M€) 310 +14% 274 *At constant currency Excluding Indirect Tax provision 2012 2016 64
Slide 60: MCE Has Been Re-Shaped To Cover All Markets
MCE HAS BEEN RE-SHAPED TO COVER ALL MARKETS (EXPORT AND LICENSE) • More cost efficient and effective operations • Consistent management of brands across the region • Pan European customer and partner management 65
Slide 61: Opportunities For Top- And Bottom-Line Growth
OPPORTUNITIES FOR TOP- AND BOTTOM-LINE GROWTH GROWING ABOVE PREMIUM ENERGIZING CORE BRANDS AND CRAFT FIRST CHOICE FOR CUSTOMERS 2012 2016 On Premise 6th 2nd Off Premise – Mult Grocers 15th 1st Off Premise – Impulse 12th` 1st 66
Slide 62: UK Is Our Largest MCE Business
UK IS OUR LARGEST MCE BUSINESS – PERFORMING S T R O N G LY A N D S E T U P F O R F U R T H E R S U C C E S S CUSTOMER CARLING PORTFOLIO EXCELLENCE 2012 2016 CAGR +23% On Premise 6th 2nd Off Premise – Mult Grocers 15th 1st Off Premise – Impulse 12th` 1st 2012 2016 CAGR +16% No. 1 in 2012 2016 Market
Slide 63: Cider Progress Is Rapid With More To Play For
CIDER PROGRESS IS RAPID WITH MORE T O P L AY F O R …But still have a lot of opportunity 68
Slide 64: Energize Core Brands
E N E R G I Z E C O R E B R A N D S – M A I N TA I N I N G STRONG NO.1 POSITIONS OR BUILDING MOMENTUM Ozujsko Amber OZUJSKO SHARE IN MAINSTREAM 45 43 Launched in 41 December 2015 39 37 35 2014 2015 2016 2008 2009 2010 2011 2012 2013 2014 2015 2016 Bergenbier Ale +29% Launched in November 2015 2013 2
Slide 65: Staropramen Growing Strongly Across Europe
STAROPR AME N GROWING STRONGLY ACROSS EUROPE ALIGNED NEW BRAND PORTFOLIO PRAVHA in UK IDENTITY 70
Slide 66: Staropramen Growing Strongly Across Europe
STAROPRAME N GROWING STRONGLY ACROSS E U R O P E GROWTH 2016 vs. 2012 41% 74% 176% 215% BULGARIA CROATIA ROMANIA HUNGARY All at above average margin 71
Slide 67: We Are Premiumizing The Portfolio
WE ARE PREMIUMIZING THE PORTFOLIO… 72
Slide 68: And We Know How To Win With Craft
…AND WE KNOW HOW TO WIN WITH CRAFT DOOM BAR #1 Cask Ale in the On FRANCISCAN WELL (Chieftain IPA) Trade and #1 Premium Bottle Ale in • #1 Craft brand in Republic of Ireland the Off Trade • With 11% share, significantly over CAGR indexed to On Trade +16% 2012 2016 BLUE MOON CAGR 31% LA SAGRA #1 CRAFT
Slide 69: We Are First Choice In UK And Replicating In Europe
WE ARE FIRST CHOICE IN UK AND R E P L I C AT I N G I N E U R O P E UK EUROPE NET PROMOTER SCORE 2012 2016 On Premise 6th 2nd Off Premise – Mult. Grocers 15th 1st Off Premise – Impulse 12th 1st NUMBER 1 IN: 75
Slide 70: Opportunities For Top- And Bottom-Line Growth
OPPORTUNITIES FOR TOP- AND BOTTOM-LINE GROWTH GROWING ABOVE PREMIUM ENERGIZING CORE BRANDS AND CRAFT FIRST CHOICE FOR CUSTOMERS 2012 2016 On Premise 6th 2nd Off Premise – Mult Grocers 15th 1st Off Premise – Impulse 12th` 1st 76
Slide 71: Stewart Glendinning
STEWART GLENDINNING CHIEF EXECUTIVE OFFICER M O L S O N C O O R S I N T E R N AT I O N A L ( M C I )
Slide 72: MCI Priorities
MCI PRIORITIES M C I I S F O C U S E D O N D R I V I N G G R O W T H O F F A S T R O N G P L AT F O R M Post acquisition business status 2017 priorities • Increased scale • Wrap up remaining transition activities • More powerful and complementary portfolio • Leverage global brands and commercial exc
Slide 73: MCI Priorities: Miller Brands Increase Scale
MCI PRIORITIES MILLER BRANDS INCREASE SCALE FOR MCI MCI volumes have been step changed by acquisition of the Miller brands REPORTED BRAND VOLUME (KHL) 4 2 - 2012 2013 2014 2015 2016 Q1 2016 Q1 2017 Base MCI Europe Miller Puerto Rico Note: Puerto Rico volumes are included Q1 2017 for MCI, but capture
Slide 74: MCI Footprint
MCI FOOTPRINT S T R O N G I N T E R N AT I O N A L R E A C H MCI regions account for 54% of global profits and 85% of the global population 80
Slide 75: Our Core Portfolio
OUR CORE PORTFOLIO CLEAR BRAND PROPOSITION AND FOCUS IS KEY TO GROWTH BRAND PURPOSE: BRAND PURPOSE: BRAND PURPOSE: Celebrate the climb Experience the exceptional Inspire creativity STRATEGIC FOCUS: STRATEGIC FOCUS: STRATEGIC FOCUS: Grow share in connect Grow share in higher energy Grow by taking sha
Slide 76: Coors Light Volume Growth
COORS LIGHT VOLUME GROWTH MCI Coors Light volume has more than doubled over the last four years COORS LIGHT VOLUME +22% CAGR 2012 2016 82
Slide 77: Miller Genuine Draft: Always On
M I L L E R G E N U I N E D R A F T: A LWAY S O N G L O B A L P L AT F O R M – B R A N D AWA R E N E S S RETAIL TOOLS ON AND OFF PREMISE EQUITY COMMUNICATION EXPERIENTIAL 83
Slide 78: Craft Strategy
C R A F T S T R AT E G Y Leverage Blue Moon to build credibility in new markets • Lead the craft category in underdeveloped and developing beer markets • Play in the craft/premium social BLUE MOON segments VOLUME • Use “Face, Place and Story” to build credentials and credibility +99% CAGR 2012 2016
Slide 79: Customer Excellence
CUSTOMER EXCELLENCE FSM, NPS AND DISTRIBUTOR MANAGEMENT FSM • Driving discipline and quick execution • New markets on the horizon NPS • +10 percentage points vs. 2016 DISTRIBUTOR MANAGEMENT • Partner selection to distribute Miller and Coors trademarks • Launched beer champion program 86
Slide 80: MCI Priorities
MCI PRIORITIES M C I I S F O C U S E D O N D R I V I N G G R O W T H O F F A S T R O N G P L AT F O R M Ongoing profit drivers 2017 Modeling input • Growing volumes • Early volatility • Lower NSR/hl with partners • G&A organization not fully in place in Q1 • Higher marketing investments • Total gros
Slide 81: MCI Priorities
MCI PRIORITIES M C I I S F O C U S E D O N D R I V I N G G R O W T H O F F A S T R O N G P L AT F O R M Post acquisition business status 2017 priorities • Increased scale • Wrap up remaining transition activities • More powerful and complementary portfolio • Leverage global brands and commercial exc
Slide 82: Tracey Joubert
TRACEY JOUBERT CFO M O L S O N C O O R S B R E W I N G C O M PA N Y
Slide 83: Driving Growth Through Focus On Strategies and PACC Model
DRIVING GROWTH THROUGH FOCUS ON S T R AT E G I E S A N D PA C C M O D E L PA C C M O D E L 90
Slide 84: Delivering Growth & Long Term Shareholder Value
DELIVERING GROWTH & LONG TERM S H A R E H O L D E R VA L U E PA C C R E M A I N S K E Y D E C I S I O N D R I V E R • Investing behind core brands BRAND-LED • Driving share in above premium PROFIT GROWTH • Delivering value-added innovation • Commercial excellence PROFIT AFTER • Cost reductions CAPIT
Slide 85: Delivering Growth & Long Term Shareholder Value
DELIVERING GROWTH & LONG TERM S H A R E H O L D E R VA L U E PA C C R E M A I N S K E Y D E C I S I O N D R I V E R EARN MORE PROFIT AFTER CAPITAL CHARGE TOTAL USE LESS SHAREHOLDER RETURN (TSR) INVEST WISELY 92
Slide 86: Consistent Financial Performance
CONSISTENT FINANCIAL PERFORMANCE STEP CHANGE IN SCALE ($ millions) UNDERLYING EBITDA (1) $3,000 25% 24% $2,500 $2,322 $2,383 23% 22% $2,000 21.7% 21% $1,469 $1,471 $1,500 $1,398 20% 20.7% $1,267 19.8% 19% 19.6% 19.5% $1,000 18.9% 18% 17% $500 16% $- 15% 2011 2012 2013 2014 2015 PF 2016 PF EBITDA Mar
Slide 87: Focus On Paying Down Debt
F O C U S O N PAY I N G D O W N D E B T S&P, MOODY’S DEBT / EBITDA 6x 5.3x 5.1x Net debt reduced by 5x 4.4x +1.5 billion 4.3x 4x 3.0x 3x 2.8x S&P 2.6x 2.4x 2.1x 2.2x Moody's 2x 1x 0x 2012 2013 2014 2015 2016 PF Commitment to maintaining investment-grade debt ratings Note: 2016 PF leverage ratio repr
Slide 88: Committed To Cash Returns Via Dividends
COMMITTED TO CASH RETURNS VIA DIVIDENDS DIVIDENDS PAID (ANNUAL PER SHARE) $2.00 $1.80 $1.64 $1.64 $1.60 $1.48 $1.40 $1.28 $1.24 $1.28 $1.20 $1.08 $0.92 $1.00 $0.76 $0.80 $0.64 $0.60 $0.40 $0.20 $0.00 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Will revisit dividend policy once deleveraging is
Slide 89: Disciplined Cash Use
DISCIPLINED CASH USE CASH-USE PRIORITIES Brand-led STRENGTHEN RETURN CASH GROWTH Balance sheet to shareholders OPPORTUNITIES 96
Slide 90: Global Priorities
GLOBAL PRIORITIES FINANCIAL • Deliver $1.2 Billion in Free Cash Flow, +/- 10% • Pay Down Debt – Retain Investment Grade Status • Top and Bottom-Line Performance • Drive TSR • Increased Earnings Visibility • Cash Tax Benefits • Phasing of Cost Savings • Medium-Term EBITDA Guidance Driving sustainable
Slide 91: Cash Tax Benefits Forecast
C A S H TA X B E N E F I T S F O R E C A S T PROJECTED TRANSACTION-RELATED CASH TAX BENEFITS BY YEAR (in millions - USD) 425 400 375 350 325 300 Expect Peak $400 million; 15 year average of >$275/year 275 250 225 200 175 150 125 100 75 50 25 0 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2
Slide 92: Increased Costs Savings Visibility
I N C R E A S E D C O S T S AV I N G S V I S I B I L I T Y $550 million 20% Shared Services/ $165 million IT/G&A 40% Supply Chain $210 million 40% Procurement $175 million 2017 2018 2019 Estimated Total Savings ~$350 MILLION ESTIMATED ONE-TIME COSTS TO DELIVER SAVINGS: • ~50% - ‘Non-Core’ Expense; e
Slide 93: New And Clarified Guidance
NEW AND CLARIFIED GUIDANCE CORPORATE UNDERLYING MG&A GUIDANCE $170 MILLION, +/- 10% • INVESTMENTS AHEAD OF THE CURVE IN 2017 • ~$50 MILLION INCREASE OVER PRIOR YEAR, PRIMARILY DUE TO: • 50% driven by Global Growth Agenda • 40% Centers of Excellence, world-class performance across global functions •
Slide 94: New And Clarified Guidance
NEW AND CLARIFIED GUIDANCE CORPORATE UNDERLYING MG&A GUIDANCE $170 MILLION, +/- 10% • INVESTMENTS AHEAD OF THE CURVE IN 2017 • ~$50 MILLION INCREASE OVER PY DRIVEN PRIMARILY BY: • 50% driven by Global Growth Agenda • 40% Centers of Excellence, world-class performance across global functions • 10% no
Slide 95: New And Clarified Guidance
NEW AND CLARIFIED GUIDANCE CORPORATE UNDERLYING MG&A GUIDANCE $170 MILLION, +/- 10% • INVESTMENTS AHEAD OF THE CURVE IN 2017 • ~$50 MILLION INCREASE OVER PY DRIVEN PRIMARILY BY: • 50% driven by Global Growth Agenda • 40% Centers of Excellence, world-class performance across global functions • 10% no
Slide 96: EBITDA Margin And Underlying FCF
E B I T D A M A R G I N A N D U N D E R LY I N G F C F UNDERLYING EBITDA MARGIN GUIDANCE +30bp to +60bp PER YEAR AVERAGE NEXT 3-4 YEARS REVISED UNDERLYING FREE CASH FLOW GUIDANCE: $1.2 BILLION +/- 10% FOR FY 2017 • Revision driven by cash tax benefits increase to ~$400 million in 2017 Note: Underlyi
Slide 97: Areas Of Focus
3 AREAS OF FOCUS CASH GENERATION/DELEVERAGE COST SAVINGS COMMITMENT MEDIUM-TERM EBITDA MARGIN GUIDANCE 104
Slide 98: Mark Hunter
MARK HUNTER PRESIDENT AND CEO M O L S O N C O O R S B R E W I N G C O M PA N Y
Slide 99: 2017 Global Priorities
2017 GLOBAL PRIORITIES STRATEGIC • Embed Our Brew & Our Brewhouse • Execute Integration & Cost Savings Plan • Drive Commercial Excellence Globally – Top-Line Growth • Accelerate World Class Supply Chain 2.0 • Build Footprint and Scale • Deliver Talent & Capability Agenda Building for the future 106
Slide 100: A Focus On Delivering Growth & Long Term Shareholder Value
A FOCUS ON DELIVERING GROWTH & LONG TERM S H A R E H O L D E R VA L U E PA C C R E M A I N S K E Y D E C I S I O N D R I V E R • Investing behind core brands BRAND-LED • Driving share in above premium PROFIT GROWTH • Delivering value-added innovation • Commercial excellence PROFIT AFTER • Cost reduc
Slide 101: Molson Coors Brewing Company
M O L S O N C O O R S B R E W I N G C O M PA N Y A N N U A L 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 7, 2017
Molson Coors Brewing Company — Investor Day (June 2017) on 6ix