Molson Coors Beverage Company · NYSE:TAP
Molson Coors Beverage — Molson Coors Brewing Company — Investor Day (June 2018)
81 slides from Molson Coors Beverage's investor day presentation, Jun 6, 2018
Slide 1: Q1 Earnings - May 2, 2018
Q1 EARNINGS - MAY 2, 2018 1
Slide 2: Forward Looking Statements
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,” “will,” and similar expressions identify fo
Slide 3: Investors Presentation - New York, June 6, 2018
INVESTORS PRESENTATION - NEW YORK, JUNE 6, 2018 M A RK H U N T E R, C E O, M O L S O N CO O RS Corporate Overview and Strategic Focus G A V I N H A T T E R S L E Y, C E O , M I L L E R C O O R S US Context and Strategy T R A C E Y J O U B E RT, C F O, M O L S O N C O O R S Strategies to grow profit,
Slide 4: Key Takeaways
2018 KEY TAKEAWAYS COMMITTED TO DEBT PAYDOWN ACCELERATE REWARD 2018 GUIDANCE & MAXIMIZING TOP-LINE VIA SHAREHOLDERS DESPITE Q1 CASH, PROTECT COMMERCIAL WITH CAPITAL CHALLENGES BOTTOM-LINE EXCELLENCE RETURNS 4
Slide 5: Molson Coors Today – A Bigger, Better Business
MOLSON COORS TODAY – A BIGGER, BETTER BUSINESS MILLERCOORS TRANSACTION ALMOST DOUBLED COMPANY SIZE Absolute FY 2015 FY 2017 Growth Worldwide Brand 58 million 94 million 62% Volume (HL)* Net Sales* $6.8 billion $11.0 billion 62% Underlying EBITDA $1.3 billion $2.5 billion 88% Underlying FCF $704 mill
Slide 6: Earning More to Drive Value
EARNING MORE TO DRIVE VALUE TRANSACTION STEP CHANGES EBITDA SCALE UNDERLYING EBITDA (1) (USD MILLIONS) 29% $3,000 27% $2,497 $2,500 $2,404 25% $2,000 23% $1,469 $1,471 22.7% $1,500 $1,398 $1,267 $1,331 21.9% 21% $1,000 19.6% 19.8% 19% 19.5% 19.5% 18.9% $500 17% $0 15% 2011 2012 2013 2014 2015 2016PF
Slide 7: Molson Coors 2017
MOLSON COORS 2017 WORLDWIDE UNDERLYING BRAND VOLUME EBITDA Actual 5% (FY 2017) 16% <1% 25% 13% Net Sales $11.0B 62% 8% 71% WW Brand Volume 94M HLs Underlying EBITDA $2.5B USA Canada Europe International Note: Non-GAAP underlying earnings before interest, tax, depreciation and amortization (EBITDA) i
Slide 8: Employee Engagement: Building from Purpose to Performance
EMPLOYEE ENGAGEMENT BUILDING FROM PURPOSE TO PERFORMANCE EMPLOYEE 18,000 EMPLOYEES WORLDWIDE 81% ENGAGEMENT 2017 CANADA UK IRELAND CZECH SLOVAKIA SOUTH ROMANIA CROATIA KOREA BULGARIA USA DOMINICAN SERBIA JAPAN SPAIN ITALY REPUBLIC MONTENEGRO BOSNIA&HZ MEXICO TURKS & PUERTO HONDURAS CAICOS RICO GUATE
Slide 9: Earn More, Use Less, Invest Wisely
FOCUS: DELIVERING GROWTH & LONG-TERM SHAREHOLDER VALUE A DISCIPLINED APPROACH TO EARNING MORE, USING LESS AND INVESTING WISELY EARN MORE USE LESS INVEST WISELY BUILD BRAND LED EXTRAORDINARY DRIVE GROWTH BRANDS SYNERGIES OPPORTUNITIES AND COST STRENGTHEN STRENGTHEN SAVINGS BALANCE CUSTOMER EXCELLENCE
Slide 10: Use Less
USE LESS D R I V I N G T H E B OT TO M - L I N E B Y E X PA N D I N G E B I T D A M A R G I N E N H A N C E D C O M M E R C I A L C A PA B I L I T I E S W I L L D R I V E TO P & B OT TO M L I N E EARN MORE USE LESS INVEST WISELY DRIVE SYNERGIES & COST SAVINGS INCREASE PRODUCTIVITY • Track record of
Slide 11: Invest Wisely: Capital Allocation Priorities
INVEST WISELY DRIVING SHAREHOLDER RETURN EARN MORE USE LESS INVEST WISELY CAPITAL ALLOCATION PRIORITIES BRAND LED GROWTH STRENGTHEN RETURN CASH TO OPPORTUNITIES BALANCE SHEET SHAREHOLDERS Underpinned by PACC model 11
Slide 12: Earn More
THE WORLD'S MOST / REFRESHING gf BEER ve
Slide 13: Commercial Excellence Drivers
COMMERCIAL EXCELLENCE EARN MORE : COMMERCIAL EXCELLENCE DRIVERS E N H A N C E D C O M M E R C I A L C A PA B I L I T I E S W I L L D R I V E TO P & B OT TO M L I N E BUILD EXTRAORDINARY STRENGTHEN CUSTOMER DRIVE DISRUPTIVE BRANDS EXCELLENCE GROWTH ENERGIZE CORE BRANDS EXPAND PORTFOLIO GROW ABOVE PRE
Slide 14: Earn More: Build Extraordinary Brands
EARN MORE BUILD EX TRAORDINARY BRANDS
Slide 15: Global Insight & Analytics
INSIGHT & ANALYTICS “CONNECT” & “SOCIALIZE” ACCOUNT FOR ~60% OF ALCOHOL OCCASIONS RELAX CONNECT SOCIALIZE CELEBRATE 25% OF SERVINGS 25% OF SERVINGS 33% OF SERVINGS 10% OF SERVINGS PILSNER WHEAT LAGER GLOBAL LOCAL MAPPING COVERS OCCASIONS AND KEY PRICE POINTS, AS WELL AS FUNCTIONAL AND EMOTIONAL BENE
Slide 16: Energizing Core Brands
ENERGIZING CORE BRANDS ALMOST HALF OF BEER SOLD IN US, CANADA & EUROPE IS PREMIUM OR PREMIUM LIGHTS (MAINSTREAM) No.2 No.1 No.3 No.2 IMPROVING SHARE TREND IN CANADA GAINING SEGMENT SHARE x14 QS MAINTAINED SHARE POSITION AND #1 POSITION 11 OF LAST 12 Qs OF SEGMENT GROWTH IN THE US 16
Slide 17: National Champions
NATIONAL CHAMPIONS ELEVEN NO.1 OR NO.2 POSITIONS IN CORE MARKET SEGMENTS STAROPRAMEN STAROPRAMEN SLOVAKIA #2 COORS LIGHT MOLSON CZECH #4 CANADA #2 CANADIAN CANADA #4 BORSODI #2 MILLER UK HUNGARY BERGENBIER LITE ROMANIA #2 USA #3 CARLING CZECH CANADA UK #1 SLOVAKIA OZUJSKO HUNGARY CROATIA #1 ROMANIA
Slide 18: Growing Above Premium & Craft
GROWING ABOVE PREMIUM & CRAFT CRAFT, CIDER, FMBS AND IMPORTS CRAFT CIDER FMBS IMPORTS ABOVE PREMIUM BRANDS : 20% OF MCBC PORTFIOLIO AND GROWING AT 21% MCI 82% PORTFOLIO Above Premium % and growth figures based on Full Year 2017 volume 18
Slide 19: The World's No.1 Craft Portfolio
GROWING ABOVE PREMIUM & CRAFT THE WORLD’S NO.1 CRAFT PORTFOLIO CANADA USA EUROPE +7.2% global craft portfolio growth 2016-2017 19
Slide 20: Building Global Brands
BUILDING GLOBAL BRANDS ACCELERATING INTERNATIONAL PLANS 50 MARKETS 20 MARKETS 40 MARKETS 5 MARKETS 20+ MARKETS 35 MARKETS NEW VISUAL IDENTITY ROLLED NEW VISUAL ID DRIVING DOUBLE IN ITS 5th YEAR, MGD MUSIC COORS LIGHT +5% GROWTH ACCELERATION OF BLUE OUT IN 20 COUNTRIES DIGIT GROWTH (OUTSIDE CZ) SUPPO
Slide 21: Customer Excellence
CUSTOMER EXCELLENCE
Slide 22: Strengthening Customer Excellence
STRENGTHENING CUSTOMER EXCELLENCE MOLSON COORS ADVANTAGE - BUSINESS BUILDING FOR CUSTOMERS 70+ CATEGORY CAPTAINCIES & 30 SUPPLIER AWARDS IN 2 YEARS SURVEY No.1 RANKED #1 IN TAMARRON 2 YEARS RUNNING 22
Slide 23: Customer Excellence in Action
CUSTOMER EXCELLENCE IN ACTION DRIVING PROFITABLE CATEGORY GROWTH BUILDING FOUNDATIONS FOR GROWTH WITH AMAZON BEST IN CLASS UK ONLINE PARTNERSHIP +132% +120% +37% +223% +31% BEER CATEGORY VOLUME TURNAROUND IN LCBO EUROPE : FIRST CO-BRANDED SOLUTION WITH NESTLE 23
Slide 24: Drive Disruptive Growth
DRIVE DISRUPTIVE GROWTH
Slide 25: Leveraging Digital Transformation
LEVERAGING DIGITAL TRANSFORMATION DRIVING THE FIRST CHOICE AGENDA DIGITAL MARKETING PERSONALIZED CUSTOMER EXPERIENCE LEAD DIGITAL DISRUPTION PERSONALIZED EXPERIENCE CUSTOMER 360 ECOMMERCE • Global consumer segmentation SEAMLESS SELLING TOOLS • Best digital brand experience • Marketing Mix Analytics
Slide 26: Expanding Portfolio
EXPANDING PORTFOLIO DRIVING & EXPANDING CATEGORY VALUE GROW THE BEER CATEGORY GROW SHARE OF BEER/FMB/CIDER ENHANCING CONSUMER & CUSTOMER EXPERIENCE ENHANCING CONSUMER & CUSTOMER EXPERIENCE GROW BEYOND BEER CREATE VALUE IN SUPPLY CHAIN BREWED, FERMENTED OR DISTILLED BREWING PROCESS INNOVATION ? 26
Slide 27: The Keg Room Reimagined
EXPANDING PORTFOLIO DRAFTFOX – CREATING A NEW STANDARD IN DRAFT BEER THE KEG ROOM REIMAGINED 27
Slide 28: Accelerating International Growth
ACCELERATING INTERNATIONAL GROWTH MOLSON COORS INTERNATIONAL – GROWING CONTRIBUTOR TO TOP & BOTTOM-LINE CONSUMER EXCELLENCE CUSTOMER EXCELLENCE GROW FOCUS BRANDS GROW EMERGING BRANDS OPTIMIZE ROUTEROUTE TO EARN MORE IN OPTIMIZE EXPLORE SUPPLY CHAIN AGGRESSIVELY SELECTIVELY TO MARKET MARKET FOCUS MAR
Slide 29: Progress to $20-25 Million EBITDA
ACCELERATING INTERNATIONAL GROWTH PROGRESS TO $20-25 MILLION EBITDA Underlying EBITDA ($ millions) ($29.1) Q1 2018 Results E INTERNATIONAL FOCUS BRANDS 29
Slide 30: Earn More, Use Less, Invest Wisely
FOCUS: DELIVERING GROWTH & LONG-TERM SHAREHOLDER VALUE A DISCIPLINED APPROACH TO EARNING MORE, USING LESS AND INVESTING WISELY EARN MORE USE LESS INVEST WISELY BUILD BRAND LED EXTRAORDINARY DRIVE GROWTH BRANDS SYNERGIES OPPORTUNITIES AND COST STRENGTHEN STRENGTHEN SAVINGS BALANCE CUSTOMER EXCELLENCE
Slide 31: Leading Through Tough Times: UK Case Study
DISCIPLINED APPROACH LEADING THROUGH TOUGH TIMES : UK CASE STUDY UK BEER VOLUME SITUATION 2007 2008 2009 2010 2011 2012 (3.6%) (5.1%) (4.0%) (3.5%) (2.3%) (5.1%) DECLINED (21.5%) OVER SIX YEARS (2007-2012) EARN MORE USE LESS INVEST WISELY RESPONSE Reshape Portfolio 2009+ 2008+ UK Supply Reset Custom
Slide 32: Leading Through Tough Times: UK Case Study
DISCIPLINED APPROACH LEADING THROUGH TOUGH TIMES : UK CASE STUDY BEFORE BEFORE AFTER 32
Slide 33: Gavin Hattersley, CEO, MillerCoors
Q1 EARNINGS - MAY 2, 2018 GAVIN HATTERSLEY C EO, Miller C oor s 33
Slide 34: Our #1 Priority: Consistent, Solid Delivery
OUR #1 PRIORITY CONSISTENT, SOLID DELIVERY AGAINST OUR BOTTOM-LINE 1,950 26 1,900 25 1,850 Underlying EBITDA ($M) 24 EBITDA Margin % 1,800 1,750 23 1,700 22 1,650 21 1,600 20 1,550 1,500 19 2015 2016 PF 2017 Underlying EBITDA EBITDA Margin % WHILE OUR VOLUME TRAJECTORY HAS NOT YET IMPROVED, WE’VE CO
Slide 35: US Beer Industry
US BEER INDUSTRY BEER STILL REPRESENTS – BY FAR – THE LARGEST SEGMENT IN TOTAL ALCOHOL BEVERAGES 15.6% Beer BEER Spirits 49.4% Wine 34.9% 2017 TAB CONSUMPTION IN THE US 35 Source: Brewer’s Almanac 2016; Strategy Team Forecast
Slide 36: US Beer Industry: A Lot of Volume and Value
US BEER INDUSTRY : A LOT OF VOLUME AND VALUE FOR THE TAKING WE NEED TO CONTINUE COMPETING IN THE LARGEST SEGMENTS & PROFIT POOLS WITH THE MOST LOYAL CONSUMERS ECONOMY PREMIUM ABOVE PREMIUM ~50M BBLS / 17% of Revenue ~85M BBLS / 39% of Revenue ~68M BBLS / 44% of Revenue All Other 9% 3% 31% 60% 59% 10
Slide 37: US Beer Industry
US BEER INDUSTRY HEALTHY ECONOMY IS DRIVING ABOVE PREMIUM GROWTH WHILE UNEMPLOYMENT REBOUNDED SINCE THE …AND WE EXPECT DISPOSABLE INCOME TO CONTINUE RECESSION, LABOR FORCE PARTICIPATION HAS MORE TO IMPROVE, SUPPORTING GROWTH OF ABOVE RECENTLY IMPROVED… PREMIUM BRANDS Unemployment and Labor Participa
Slide 38: US Beer Economy
US BEER ECONOMY CONSUMER PREFERENCES DRIVING NEW DYNAMICS LATINO DRINKERS GENERATIONAL SHIFTS FEMALE DRINKERS LATINO DRINKERS OVER-INDEX IN BEER YOUNGER LDA DRINKERS DRIVE EMERGING US BEER HAS TRADITIONALLY ALIENATED CONSUMPTION AND WILL CONTINUE TO TRENDS WHILE GEN X & BOOMER DRINKERS ARE WOMEN, BU
Slide 39: US Beer Industry: Taking Action
US BEER INDUSTRY TAKING ACTION TO ADDRESS THE CHANGING LANDSCAPE GROWING PREFERENCE SHIFTING INCREASING ACCEPTANCE PREMIUMIZATION LIFESTYLE AWAY FROM TRADITIONAL BEER OF CANNABIS “This is the Original Lite beer. Brewed to be everything you want in a beer. And less.” More Taste. Only 96 Calories. Onl
Slide 40: Delivering Growth & Long-Term Shareholder Value
DELIVERING GROWTH & LONG-TERM SHAREHOLDER VALUE A DISCIPLINED APPROACH TO EARNING MORE, USING LESS AND INVESTING WISELY EARN USE INVEST MORE LESS WISELY 40
Slide 41: Earn More: US Underlying EBITDA
EARN MORE CONSISTENT, SOLID DELIVERY AGAINST OUR BOTTOM-LINE US UNDERLYING EBITDA ($M) 1,950 26 1,900 25 1,850 24 Underlying EBITDA ($M) 1,800 EBITDA Margin % 1,750 23 1,700 22 Despite Q1 weather and 1,650 21 Golden inventory challenges, 1,600 we expect our volume and 1,550 20 margin to ramp up in t
Slide 42: Earn More, Use Less, Invest Wisely
EARN MORE, USE LESS, INVEST WISELY WE’VE CLOSED OUR EBITDA MARGIN GAP TO ABI BY ESTIMATED 600 BPS SINCE 2012 U.S. EBITDA MARGIN COMPARISON: ABI U.S. VS. MILLERCOORS GAP GAP (22%) (16%) MillerCoors underlying EBITDA margins have increased 550bps from 2012-17 ABI US EBITDA margins have decreased 50bps
Slide 43: Use Less: MillerCoors Cost Savings
USE LESS PROVEN PERFORMANCE IN DRIVING COST SAVINGS/SYNERGIES, OPTIMIZING ORG EFFICIENCY MillerCoors Cost Savings ($M) $325 $300 $275 $250 $225 $200 $175 $150 $125 $100 $75 $50 $25 $- 43 2008 H2 2009 2010 2011 2012 2013 2014 2015 2016 2017
Slide 44: Use Less, Invest Wisely
USE LESS, INVEST WISELY REDUCING COSTS WHILE MAINTAINING MARKETPLACE PRESSURE MAINTAINING MARKETPLACE PRESSURE WITH REDUCING MG&A SMARTER, MORE EFFICIENT MARKETING INVESTMENT MG&A Expense YR3 Benefit YR2 Benefit YR1 Benefit 2015 2016 2017 2015 Pro forma 2016 Pro forma 2017 Cumulative % EBITDA benefi
Slide 45: Earn More
EARN MORE ENERGIZE CORE BRANDS, ACCELERATE PERFORMANCE IN ABOVE PREMIUM CONTINUE TO GROW STABILIZE ECONOMY TO PROTECT ACCELERATE PERFORMANCE IN SHARE IN PREMIUM AND EXPAND THE BEER CATEGORY ABOVE PREMIUM 67% of beer volume comes from buyers who purchase more than one price tier Among Above Premium b
Slide 46: Energize Core Brands – Grow Share in Premium
EARN MORE ENERGIZE CORE BRANDS – CONTINUE TO GROW SHARE IN PREMIUM 9.4 24.0 20.0 9.2 9.0 23.5 8.8 19.5 8.6 8.4 23.0 8.2 19.0 8.0 22.5 7.8 7.6 7.4 22.0 18.5 2015 2016 2017 2015 2016 2017 2015 2016 2017 Growing volume, 2017 marked 11th straight Coors Light improved +2.7% in L4 as of 5/26 year of growt
Slide 47: Energize Core Brands – Grow Share in Premium
EARN MORE ENERGIZE CORE BRANDS – CONTINUE TO GROW SHARE IN PREMIUM Increased local media Evolve campaign, Increased media spend spend celebrating re-anchoring position and bolder, more independent spirit as the World’s Most competitive positioning Refreshing Beer ‘Carry the West’ ‘Know Your Beer’ re
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Slide 49: Stabilize Economy
EARN MORE STABILIZE ECONOMY MILLERCOORS ECONOMY PORTFOLIO SHARE OF SEGMENT CHANGE OUR ECONOMY PORTFOLIO GAINED SHARE OF INDUSTRY IN BOTH Q4’17 AND Q1’18 Top-ten industry growth brand 49 Source: Nielsen
Slide 50: Accelerate Performance in Above Premium - Crafts
EARN MORE ACCELERATE PERFORMANCE IN ABOVE PREMIUM - CRAFTS Blue Moon L52 weeks ending Belgian White & 5/26/18 Nielsen Leinenkugel’s Summer Shandy are #1 & #3 crafts in the US … And our regional craft brewers continue to +28.6% +60.0% +13.7% +25.0% outperform industry crafts 2017 Q1 18 2017 Q1 18 201
Slide 51: Accelerate Performance in Above Premium - Crafts
EARN MORE ACCELERATE PERFORMANCE IN ABOVE PREMIUM - CRAFTS BELGIAN WHITE DEMONSTRATES BLUE MOON FAMILY OF BRANDS CONTINUED GROWTH #1 IN CRAFT BMBW Volume (mm BBLs) 2017 Share of Craft by Brand Family 1.9 BBLs 10 pts 8 pts 1.8 BBLs 6 pts 1.7 BBLs 4 pts 1.6 BBLs 2 pts 0 pts 1.5 BBLs 2013 2014 2015 201
Slide 52: Flavored Malt Beverages, Cider
EARN MORE ACCELERATE PERFORMANCE IN ABOVE PREMIUM – FLAVORED MALT BEVERAGES, CIDER Building on #2 FMBs position via innovation Ciders - fastest 2.4m growing segment YTD CASES 1.9m CASES 1.4m 3.2m CASES • Crispin is outpacing the industry, CASES led by Crispin Rosé • Crispin Rosé is #4 growth brand Y
Slide 53: Accelerate Performance in Above Premium - Imports
EARN MORE ACCELERATE PERFORMANCE IN ABOVE PREMIUM - IMPORTS 21.5 260.2 % change 16.3 15.0 % change 52 wk 52 wk 10.6 9.5 26 wk 26 wk 114.5 13 wk 13 wk 6.1 4 wk 4 wk 49.4 1.9 16.6 14.9 0.8 10.6 11.3 10.9 1.4 -3.1 -2.8 -0.1 -1.9 -2.7 -2.7 -4.1 Corona Modelo Heineken Stella Artois Source: 2018 BMI Stron
Slide 54: Accelerate Performance in Above Premium
EARN MORE ACCELERATE PERFORMANCE IN ABOVE PREMIUM VELOCITY STEADILY IMPROVING SIGNIFICANT DISTRIBUTION UPSIDE 350 329 312 294 100 92 90 300 268 87 86 84 Distribution Rate (%ACV) 90 82 250 80 71 Top 15 Import Brands 66 70 57 200 60 54 53 50 43 43 42 150 37 40 100 30 50 20 10 0 0 2014 2015 2016 2017 P
Slide 55: Significant Distribution Upside, Volume Lift
EARN MORE ACCELERATE PERFORMANCE IN ABOVE PREMIUM Significant distribution upside 45,000 Volume lift just starting 40,000 Cinco de STRs (Cases) 35,000 Independent Mayo 30,000 Chain 25,000 20,000 15,000 10,000 5,000 Retail: 100K new placements 0 12/24/2017 2/18/2018 5/27/2018 10/8/2017 • Triple-digit
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Slide 57: Drive Customer Excellence
DRIVE CUSTOMER EXCELLENCE ADVANCING OUR GO-TO-MARKET STRENGTH OFFERING MORE VALUE TO BUILDING E-COMMERCE EVOLVING BRAND BOLDER RETAIL PARTNERSHIPS CAPABILITIES EXPERIENCES DISTRIBUTORS 57
Slide 58: Building Captaincy Wins and Supplier Awards
DRIVE CUSTOMER EXCELLENCE BUILDING CAPTAINCY WINS AND SUPPLIER AWARDS Category Advisor Wins Supplier Awards 58
Slide 59: Delivering Growth & Long-Term Shareholder Value
FOCUS: DELIVERING GROWTH & LONG-TERM SHAREHOLDER VALUE A DISCIPLINED APPROACH TO EARNING MORE, USING LESS AND INVESTING WISELY EARN MORE USE LESS INVEST WISELY ENERGIZE CORE BRANDS CONTINUE TO DRIVE DELIVER PROFIT GROW SHARE IN PREMIUM COST SAVINGS AND GROWTH TO DRIVE STABILIZE/PROTECT ECONOMY SYNER
Slide 60: Tracey Joubert, CFO, Molson Coors
Q1 EARNINGS - MAY 2, 2018 TRACEY JOUBERT CFO, MOLSON COORS 60
Slide 61: Earn More, Use Less, Invest Wisely
FOCUS: DELIVERING GROWTH & LONG-TERM SHAREHOLDER VALUE A DISCIPLINED APPROACH TO EARNING MORE, USING LESS AND INVESTING WISELY EARN MORE USE LESS INVEST WISELY BUILD BRAND LED EXTRAORDINARY DRIVE GROWTH BRANDS SYNERGIES OPPORTUNITIES AND COST STRENGTHEN STRENGTHEN SAVINGS CUSTOMER BALANCE EXCELLENCE
Slide 62: Earning More: Strong, Stable FCF and EBITDA
EARNING MORE STRONG, STABLE FCF AND EBITDA PERFORMANCE (UNDERLYING) UNDERLYING EBITDA (1) UNDERLYING FREE CASH FLOW (USD MILLIONS) (USD MILLIONS) 29% $3,000 $1,500 $2,497 27% $2,500 $2,404 $1,449 +/- 10% 25% $2,000 23% $1,469 $1,471 $1,500 $1,398 $1,331 22.7% $864 $1,267 21% 21.9% $1,000 19.6% 19.8%
Slide 63: Committed to Guidance
COMMITTED TO GUIDANCE 2018 AND BEYOND MEDIUM-TERM EBITDA MARGIN UNCHANGED +30-60bps annual average over 3-4 years 2018 COGS/HL UNCHANGED but inflationary pressures remain COST SAVINGS UNCHANGED $210 million (part of 2017-2019 savings target of $600m) 2018 UNDERLYING FCF UNCHANGED $1.5 billion +/- 10
Slide 64: Use Less
USE LESS
Slide 65: Use Less: $600 Million Cost Savings Program
USE LESS D R I V I N G T H E B OT TO M - L I N E BY E X PA N D I N G E B I T D A M A R G I N E N H A N C E D C O M M E R C I A L C A PA B I L I T I E S W I L L D R I V E TO P & B OT TO M L I N E EARN MORE USE LESS INVEST WISELY DRIVE SYNERGIES & COST SAVINGS INCREASE PRODUCTIVITY N. AMERICA SUPPLY C
Slide 66: Drive Synergies and Cost Savings
DRIVE SYNERGIES AND COST SAVINGS CO S T S AV I N G S P RO G R A M 2017-2019 $600 ESTIMATED 3 YEAR PROGRAM COST SAVINGS million PROGRAM SAVINGS DRIVERS TARGET OF $600M $135 • Improved efficiency in million N. AMERICA SUPPLY CHAIN cost to capture savings 2018E 40% • Cost to capture of $250m $210 • ~60
Slide 67: Productivity Drivers
PRODUCTIVITY DRIVERS DRIVING GLOBAL EFFICIENCIES VIA SUPPLY CHAIN A LOWER COST, MORE EFFICIENT SUPPLY CHAIN WCSC 2.0 WILL DELIVER ‘ONE WAY’ BUSINESS RESULTS US BUSINESS UNIT Brewery rationalization -Closed Eden, North Carolina, Q3 2016 CANADA BUSINESS UNIT 2 greenfield breweries -British Columbia br
Slide 68: GBS Roadmap
PRODUCTIVITY DRIVERS IMPROVING SCALE AND VALUE WITH GLOBAL BUSINESS SERVICES (GBS) GBS CENTERS CONTRIBUTING NEAR & LONG TERM OPPORTUNITIES ARE OPEN IN TO CURRENT TO IMPROVE SCALE & VALUE BUCHAREST, AND FUTURE • Finance • Commercial ROMANIA and SAVINGS • Supply Chain • HR MILWAUKEE, WI • Data • Repor
Slide 69: Working Capital
I M P R O V I N G W O R K I N G C A P I TA L A S % O F N E T S A L E S TRACK RECORD OF IMPROVING WORKING CAPITAL & DRIVING HIGHER CASH RETURNS 15% Consistently driving WORKING 2012 working capital 10% improvements CAPITAL since 2012 Expecting $100m in 2013 5% additional 2014 improvement 2015 0% by t
Slide 70: Invest Wisely: Capital Allocation
I N V E S T W I S E LY CAPITAL ALLOCATION
Slide 71: Capital Allocation Priorities
INVEST WISELY DRIVING SHAREHOLDER RETURN EARN MORE USE LESS INVEST WISELY CAPITAL ALLOCATION PRIORITIES BRAND LED GROWTH STRENGTHEN RETURN CASH TO OPPORTUNITIES BALANCE SHEET SHAREHOLDERS Underpinned by PACC model 71
Slide 72: Cash Use Priorities
I N V E S T W I S E LY C L E A R C A P I TA L A L L O C AT I O N P R I O R I T I E S CASH USE PRIORITIES USE LESS INVEST WISELY BRAND GROWTH STRENGTHEN RETURN CASH TO OPPORTUNITIES BALANCE SHEET SHAREHOLDERS Invest in organic Maintain Reward existing growth and investment grade shareholders via cons
Slide 73: Strengthen Balance Sheet
STRENGTHEN BAL ANCE SHEET FOCUS ON PAYING DOWN DEBT S&P, MOODY’S DEBT / EBITDA 6x S&P 5.3x 5.1x Moody's 5x 4.7x 4.3x 4.4x Net debt reduced by 4.4x >$1.5 billion ~4x 4x ~3.75x 3.0x COMMITMENT 3x 2.8x 2.1x 2.6x 2.2x 2.4x TO MAINTAINING 2x INVESTMENT- 1x GRADE RATING 0x 2012 2013 2014 2015 2016 PF 2017
Slide 74: Return Cash to Shareholders
R E T U R N C A S H TO S H A R E H O L D E R S STRONG TRACK RECORD DIVIDENDS PAID $2.00 (ANNUAL PER SHARE) $1.80 $1.64 $1.64 $1.64 $1.60 $1.48 $1.40 $1.24 $1.28 $1.28 $1.20 $1.08 $1.00 $0.92 $0.80 $0.76 $0.64 $0.60 $0.40 $0.20 $0.00 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 74
Slide 75: Reinstitute Dividend Payout Ratio
R E T U R N C A S H TO S H A R E H O L D E R S R E I N S T I T U T E D I V I D E N D PAY O U T R AT I O We expect a Dividend Payout Ratio of 20%-25% of trailing annual underlying EBITDA after achieving ~3.75x leverage around mid 2019 • ~40% to ~75% higher than the current level (using FY’17 underlyi
Slide 76: Stepping Dividend Up to Competitive Payout
RETURN CASH TO SHAREHOLDERS STEPPING DIVIDEND UP TO COMPETITIVE PAYOUT Step up to Expected future EBITDA pay 65% above average out ratio implies underlying net income payout ratio of AVERAGE 57% for peer group PAYOUTS 50%-65% 50% 37% 36% CONSUMER GOODS BEER & SPRITS TODAY FUTURE TODAY TODAY Note: Mo
Slide 77: Delivering Growth & Long-Term Shareholder Value
FOCUS: DELIVERING GROWTH & LONG-TERM SHAREHOLDER VALUE A DISCIPLINED APPROACH TO EARNING MORE, USING LESS AND INVESTING WISELY EARN MORE USE LESS INVEST WISELY BUILD BRAND LED EXTRAORDINARY DRIVE GROWTH BRANDS SYNERGIES OPPORTUNITIES AND COST STRENGTHEN STRENGTHEN SAVINGS BALANCE CUSTOMER EXCELLENCE
Slide 78: Mark Hunter, CEO, Molson Coors
Q1 EARNINGS - MAY 2, 2018 MARK HUNTER CEO, MOLSON COORS 78
Slide 79: Delivering Growth & Long-Term Shareholder Value
FOCUS: DELIVERING GROWTH & LONG-TERM SHAREHOLDER VALUE A DISCIPLINED APPROACH TO EARNING MORE, USING LESS AND INVESTING WISELY EARN MORE USE LESS INVEST WISELY BUILD BRAND LED EXTRAORDINARY DRIVE GROWTH BRANDS SYNERGIES OPPORTUNITIES AND COST STRENGTHEN STRENGTHEN SAVINGS BALANCE CUSTOMER EXCELLENCE
Slide 80: Key Takeaways
2018 KEY TAKEAWAYS COMMITTED TO DEBT PAYDOWN IMPROVE THE REWARD 2018 GUIDANCE & MAXIMIZING TOP-LINE VIA SHAREHOLDERS DESPITE Q1 CASH, PROTECT COMMERCIAL WITH CAPITAL CHALLENGES BOTTOM-LINE EXCELLENCE RETURNS 80
Slide 81: Q&A
Q1 EARNINGS - MAY 2, 2018 Q&A 81
Molson Coors Brewing Company — Investor Day (June 2018) on 6ix