Molson Coors Beverage Company · NYSE:TAP
Molson Coors Beverage — Molson Coors Brewing Company — Investor Day (March 2010)
90 slides from Molson Coors Beverage's investor day presentation, Mar 3, 2010
Slide 1: Molson Coors Brewing Company Annual New York Analyst/Investor Meeting
Molson Coors Brewing Company Annual New York Analyst/Investor Meeting March 3, 2010
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Slide 3: Peter Swinburn, Chief Executive Officer, Molson Coors
Peter Swinburn Chief Executive Officer, Molson Coors 3
Slide 4: Forward-Looking Statement
Forward‐Looking Statement This presentation includes “forward‐looking statements” within the meaning of the federal securities laws, and language indicating trends, such as “trend improvements ” “progress improvements,” “progress,”” “anticipated “anticipated,”” “expected “expected,”” “improving sale
Slide 5: Agenda
Agenda • Peter Swinburn, CEO, Molson Coors − Introductions and strategic g overview • Business Updates − Leo Kiely, CEO, MillerCoors − Dave Perkins, CEO, Molson Coors Canada − Mark Hunter, CEO, Molson Coors U.K. − Kandy K d A Anand, d President, P id t Molson M l Coors C International I t ti l • Ste
Slide 6: Well Positioned to Grow
Well Positioned to Grow “By investing in brands, innovation and managing our costs, we can fare well in the hard times, and flourish in the good times.” 6
Slide 7: What Sets Molson Coors Apart
What Sets Molson Coors Apart • A strongg track record of consistentlyy exceedingg cost‐ reduction targets • A drive to invest in value‐enhancing innovation, regardless of economic cycles • A long‐standing commitment to building strong brands that excite and inspire beer drinkers 7
Slide 8: Focus on Cost, Innovation & Brands
Focus on Cost, Innovation & Brands A yyear that exceeded cost savings g targets g Cost Savings g Delivered/Targets / g Molson Coors RFG completed $270mm delivered vs. $250mm target Molson Coors RFG2 Additional Savings targeted MillerCoors synergies $273mm of $500mm target Other MC cost savings Addit
Slide 9: Focus on Cost, Innovation & Brands
Focus on Cost, Innovation & Brands A year of value‐enhancing innovation 9
Slide 10: Focus on Cost, Innovation & Brands
Focus on Cost, Innovation & Brands A year of investing in great brands 10
Slide 11: Molson Coors is Well Positioned to Grow
Molson Coors is Well Positioned to Grow STRATEGY OBJECTIVES •Stronger competitor, balance Smart Cost sheet Management •Resources to grow top line and bottom line SHAREHODLER VALUE •Maintain or grow market share Brands & Innovation = •Increase revenue per barrel Consumer Value, Growth •Deliver innova
Slide 12: Leo Kiely, Chief Executive Officer, MillerCoors
Leo Kiely Chief Executive Officer, MillerCoors
Slide 13: wosontal
© MillerCoors” wosontal
Slide 14: Becoming America's Best Beer Company
Becoming America’s Best Beer Company • Build a winningg culture • Leverage our powerful brands • Win at retail • Save to reinvest in our brands and people • Grow our business the right way 14
Slide 15: Full Year Profit Solid Despite Volume Declines
Full Year Profit Solid Despite Volume Declines Year End 2009 Results • Underlying net income 18.4% • Total T l revenue 1 7% 1.7% • Domestic NRPB 3.7% • STRs (1.7%) 15
Slide 16: 4th Q Profit Down Driven by Volume Declines
4th Q Profit Down Driven by Volume Declines 4th Quarter 2009 Results • Underlying net income (21.6%) • Total revenue (1.6%) • Domestic NRPB 2 3% 2.3% • STRs (3.6%) 16
Slide 17: Critical to Build on Strong Synergy/Cost Savings
Critical to Build on Strong Synergy/Cost Savings Savings committed by 2012: $750 million Total Committed Savings Achieved Savings ($M) to Date ($M) Synergies 500 273 Other Cost Savings 250 76 Total Savings 750 349 17
Slide 18: Invest in the Core
Invest in the Core Full Year 2009 Retail Volume by Brand MGD/ Miller Keystone Miller Lite Coors Light MGD 64 High Life Light Blue Moon All Others Total Retail Adjusted for Trading Days 18
Slide 19: Invest in the Core: Premium Lights
Invest in the Core Premium Lights • Coors Light • Miller Lite • MGD 64 19
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Slide 21: Invest in the Core: Premium Lights
Invest in the Core Premium Lights • Grow share • Aggressive media plans • Invest in innovation 21
Slide 22: Innovation: Home Draft
Innovation Home Draft 22
Slide 23: Innovation: Aluminum Pint Bottle
Innovation Aluminum Pint Bottle 23
Slide 24: Innovation: Vortex Bottle
Innovation Vortex Bottle 24
Slide 25: Innovation: Window Pack
Innovation Window Pack 25
Slide 26: Invest in the Core: Below Premiums
Invest in the Core Below Premiums 26
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Slide 28: Invest in the Core: Above Premium
Invest in the Core Above Premium 28
Slide 29: Leinenkugel's and Peroni
Leinenkugel’s and Peroni 29
Slide 30: Invest in the Core
Invest in the Core MOLSON Cooks. 30
Slide 31: Where We Want to Be
Where We Want to Be • Driving value and volume in premium light • Driving value and volume for High Life and Keystone Light • Driving value and volume in Above Premium • Strong net revenue management • Growth in chain outperforming company • Drive synergy savings 31
Slide 32: Dave Perkins, Chief Executive Officer, Molson Coors Canada
Dave Perkins Chief Executive Officer, Molson Coors Canada
Slide 33: Molson Coors Canada Managed Through a Challenging 2009
Molson Coors Canada Managed Through a Challenging 2009 Key Challenges Economy & weather drive 0.4% Strong consumer decline in industry volumes response to price & value Accomplishments Molson 3 new brands & Comparable Canadian Quarter point Granville Island COGS/HL flat revitalization share gain in
Slide 34: Molson Coors Canada - Priorities
Molson Coors Canada ‐ Priorities • Brand portfolio development • Deliver cost savings • Optimize price/volume balance 34
Slide 35: 2009 Industry Overview
2009 Industry Overview West Ontario Quebec Atlantic % of total I d t Industry 31% 35% 27% 7% MCC size in region #2 2 #1 #1 #2 Molson Coors Canada is largest brewer in the key Ontario & Quebec markets 35
Slide 36: Canada Industry Dominated by Premium / Premium Light Segment
The Industry in Canada is Still Dominated by the Premium / Premium Light Segment • Strong in 23% 20% Premium/Premium light Above Premium • Opportunity exists for MCC in the Above Premium & Premium 59% 66% Value segments • Gaining fair share would yield: • 1 million illi hl in i volume l Value 17% 14
Slide 37: Coors Light – Continuing the Momentum
37 Coors Light – Continuing the Momentum Cumulative % growth since 2000 131% Industry • Strong start to Q1 2010 with Olympic Coors Light programming p g g • Rocky Mountain Cold obsession • Engage consumers through improved retail presence and innovation • Leverage North America scale to drive effici
Slide 38: Molson Canadian Repositioned
Molson Canadian Repositioned • Organize the brand around Made From Canada “Made Canada” • Molson Canadian is made f from the h bbest this hi lland dhhas to offer – Canadian water, prairie ii bbarley l and d no preservatives • Updated brand design / graphics 38
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Slide 40: Molson Canadian 67 Launched
Molson Canadian 67 Launched • Health & wellness single g largest consumer trend • 1/2 the calories of mainstream beer • 1/2 the calories of wines and spirits • All b brand d elements l t wellll received 40
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Slide 42: Launched Molson M in Quebec
Launched Molson M in Quebec to Address Consumer Shift to Easy Drinking Mainstream • Brewing technology (microcarbonated™) • Consumer appeal high in concept testing and taste testing • Launched in Quebec Nov 2009 • Introductoryy p period exceedingg expectations • Strong trial behind solid execution •
Slide 43: Continue to Focus on Above Premium Segment
We Will Continue to Focus on Above Premium Segment with Our Leading Portfolio World Class Domestic Above Microbreweries Imports Premium • National availability • Slowly expand • Full marketing • Full marketing distribution & support support geographic coverage • Draught/on premise • On‐premise is ke
Slide 44: Drive for Our Fair Share of the Value Segment
…and also Drive for Our Fair Share of the Value Segment OLD NEW • Carlingg redesign g completed p in Q4 / 2009 • Keystone Light/Lager launch in West and Ontario ‐ Q1 / 2010 • Strong brand in the US (#10) (#10), growing at double digit rates • Leverage US insights and marketing investment 44
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Slide 46: Price Competitiveness Restored
Price Competitiveness Restored • Aggressive price discounting impacted the Quebec market in 2008 • Fully competitive beginning Q2, 2009 • We will be price competitive in all markets • We will win in the market by delivering value to consumers in the form of innovative products & packaging • MCC comp
Slide 47: Increased Portfolio Strength in Above Premium & Value Segments
Our Increased Portfolio Strength in Above Premium & Value Segments Designed to Address Competitor Growth Smaller Brewers 10.4% Industry 9.4% Smaller Brewers FY % Volume Change vs. PY 6.8% 5.7% 5.7% 5.1% 3.8% 2.3% 2.4% 1.8% 2.0% 0 9% 0.9% 0 8% 0.8% 1.0% 1.2% 1.0% 0.4% ‐0.4% 2001 2002 2003 2004 2005 2
Slide 48: Continue to Drive Cost Efficiency to Reinvest
We Continue to Drive Cost Efficiency to Reinvest g Behind Brand Building % IMPACT ON 2009 COGS vs PY Q1 Q2 Q3 Q4 FY Comparable COGS before RFG 3.0% 4.7% 3.2% ‐0.4% 2.7% RFG Savings ‐0.9% ‐2.9% ‐3.1% ‐2.9% ‐2.8% Comparable COGS after RFG 2.1% 1.8% 0.1% ‐3.3% ‐0.1% • We remain focused on RFG opportuni
Slide 49: Established the Platform for Growth in 2010
Molson Coors Canada has Established the Platform for Growth in 2010 • We strengthened our brand portfolio in late 2009, providing platform for brand led growth • Innovation based on consumer insight will drive more consumer excitement and value • Price / value issues are being actively managed acros
Slide 50: Mark Hunter, Chief Executive Officer, Molson Coors U.K.
Mark Hunter Chief Executive Officer, Molson Coors U.K.
Slide 51: The UK Beer Market and Economy Remain Challenging
The UK Beer Market and Economy Remain Challenging • Continuing underlying volume decline − 14% decline 2000‐2009 2000 2009 with rate of decline slowing 2008 to 2009 • Continuing industry overcapacity − Estimated at 6 million barrels with capacity being cut • Shift of volume to major off‐premise cust
Slide 52: In 2009, We Exceeded our Performance Expectations
In 2009, We Exceeded our Performance Expectations Despite a Tough Beer Industry and Economic Backdrop • 49% underlying pretax income growth in local currency (£) − 36% iin US$ US$, iincluding l di 14% off currency h headwinds d i d iin 2009* • Pricing growth for 12 consecutive quarters • Gross margi
Slide 53: 2009 Underlying £ Earnings Grew by 49%
2009 Underlying £ Earnings Grew by 49% (in millions) U.K. Underlying Pretax Income* £75 £70 £65 £60 £55 £50 £45 £40 2005 2006 2007 2008 2009 US$ Underlying Pretax Income $80.4 $100.9 $92.2 $80.8 $109.7 The difference between reported underlying pretax income in US$ and British £ results is due to fl
Slide 54: 2009 Financial Performance Moved Forward Positively
2009 Financial Performance Moved Forward Positively Measure((1)) 2008 2009 +/‐ +/ Return on Sales(2) 6.0% 8.9% 2.9 pts Gross Profit 32.4% 35.1% 2.7 pts …and substantially improved free cash flow generation (1)In US$. (2) Underlying pretax income, excluding special and other one‐time items, divided b
Slide 55: Competitive Shares Relatively Constant Over Five Years
Competitive Shares Have Been Relatively Constant Over the Past Five Years Brewer Volume Share of Beer 2004‐09 (% Total Trade) 30% 25% 20% 15% 10% 5% 0% 2004 2005 2006 2007 2008 2009 Molson Coors Carlsberg UK S&N Heineken AB Inbev Note: Based on 2009 brewers’ portfolios 55 Source: MCBC (UK) Insight b
Slide 56: Value Ahead of Volume Delivered 12 Quarters of Pricing Growth
Focus on ‘Value Ahead of Volume’ Has Delivered 12 Consecutive Quarters of Pricing Growth NSR / Barrel NSR % Change h % Change h 2004 ‐ 2008 ‐2% ‐16% 2009 18% 6% NSR = Comparable Net Sales Revenue for owned brands (excludes factored brand sales, contract brewing, and changes in the duty-paid componen
Slide 57: Commitment to Build a Portfolio of Extraordinary Brands
At the Heart of Our Strategy is Our Commitment to Build a Portfolio of Extraordinary Brands Grow Selectively ‐ Above Premium Harvest Grow Aggressively Focus ‐ Tactical investments ‐ Scale investment ‐Targeted investment to sustain profitability 57
Slide 58: Carling Continues to Lead the Beer Category
Carling Continues to Lead the Beer Category, Selling 1.5 Million more Pints Daily than the No.2 Brand Our promotion to get 1 million more people back ‘down the pub’ voted ‘Best Promotion’ in 2009 by Morning Advertiser 2009 saw significant improvements in brand health with the p product at the heart
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Slide 60: Carling Industry-Leading Digital Program
Carling Continues to Build a Competitive Advantage through its Industry‐Leading Digital Program Carling Beerfinder is an on on‐ premise social network connecting consumers with pubs Carling.com members area visits growing by Most popular App in USA is 180% driven by new Facebook ‐ E‐letter i th in t
Slide 61: Coors Light Growing Double-Digits
Coors Light Growing Double‐Digits, Continues to Bring to Life its Rocky Mountain Cold Refreshment Positioning Up‐weighted direct to consumer spend in both traditional and new media formats New cold activated can and glass ware Cold availability focus in both ‘Peak Points’ rewards loyal on‐premise dr
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Slide 63: Grolsch Repositioning to Above Premium
Grolsch Repositioning to an Above Premium, ‘Esteem’ Brand to Maximize Value Growth is Underway Clear focus on enhancing consumer experience Rollout of ‘Continental Serve’ in both on and off premise Focus on higher value The world’s most iconic beer smaller packs bottle…. marketing investment with it
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Slide 65: Cobra's 'Perfect with Curry' Positioning
Cobra’s ‘Perfect with Curry’ Positioning Exploits the Explosive Growth in Food Occasions…. • Originally crafted in Bangalore to be smoother and less gassy than other beers ‐‐ the perfect accompaniment with Indian food • Formed in June 2009, The Cobra Beer P Partnership hi is i chaired h i d by b C C
Slide 66: Increased Investment Behind Relentless Innovation
Increased Investment Behind Relentless Innovation to Broaden and Strengthen the Portfolio …. Strengthen Strategic Brands Build our ‘Above Premium’ portfolio Wm Worthington’s Home Draught Red Shield Brewed in our very own craft Carling’s brewery Blue Moon Wheat Ale Taste Lock Launched on draught in c
Slide 67: Drive Earnings and Maximize Cash Flow
We Will Continue to Drive Earnings and Maximize Cash Flow with a Focus on Brand Value Growth • Up‐weighting our investment in our brands and portfolio innovation • Leveraging the strength of Carling with a “value ahead of volume” focus • Growing market share through: − Cobra, Singha and Coors Light
Slide 68: Kandy Anand, President, Molson Coors International
Kandy Anand President, Molson Coors International
Slide 69: Approach to International Expansion
Approach to International Expansion • Establish Coors Light as our flagship and drive further scale with other strategic g brands − Consistent global position – focus on mass premium segment − Sustained efforts as we seed new markets − Leverage innovation • Tight geographic focus, with clear market
Slide 70: Coors Light – Fast Growing International Brand
Coors Light – Fast Growing International Brand Top International Beer Brands Represent 14% of Global Volume 60 0.6% 2008 TOTAL BRAND % GROWTH 50 -3.6% International Volume 40 Millions HL 0.4% 4.2% Local Volume 5.8% 30 14 4% 14.4% 20 1.5% 3.0% -2.4% 0.3% 10.0% 0.3% 10 0 Guinness Beck's Bud Light Hein
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Slide 72: Focus on High Potential International Markets
Continued Focus on High Potential International Markets China 430 mm HL Spain p 32 mm HL Ease of Access Beer Market Attractiveness
Slide 73: Coors Light Grows in Largest Developing Country
Coors Light Grows in Largest Developing Country • Number 3 super premium brand in China volume (000 HL) China 200 • G Growing i att more ththan 25% • Available in 40 cities • Sales team in China supplements its extensive t i distribution di t ib ti system t with ith a customer‐focused sales and fiel
Slide 74: Carling Expands in Europe's 4th Largest Market
Carling Expands in Europe’s 4th Largest Market • Contract brewing and distribution agreement for Carling with leading brewer Mahou – San Miguel • Expands distribution of UK’s #1 beer in Europe’s 4th largest beer market • Healthy, stable European market with growing premium segment • Market ggrowingg
Slide 75: Molson Coors International
Molson Coors International Molson Coors International A disciplined approach to driving international growth 75
Slide 76: Stewart Glendinning, Chief Financial Officer, Molson Coors
Stewart Glendinning Chief Financial Officer, Molson Coors
Slide 77: Business Strategies Drive Long-Term Value
Business Strategies Drive Long‐Term Value • Innovation builds brands and margins • MCBC cost reduction program updates: RFG and RFG2 • MillerCoors synergy program and additional cost reduction highlights • Strategies strengthen balance sheet, generate cash and drive value • Disciplined cash use stra
Slide 78: Innovation: Accelerate to Differentiate Brands
Innovation: Accelerate to Differentiate Brands, Achieve Financial Targets We define innovation as: • A new brand to a country, new package structure, new category • A new draught d h technology h l in h home or on‐premise or a new promotionall technology h l • A product improvement or enhancement th
Slide 79: Enterprise Collaboration Drives Innovation Projects
Enterprise Collaboration Drives Innovation Projects 1. Home Draft 2. “Know It’s Cold” Cartons 3. Aluminum and Vortex Bottles 4 Micro‐Carbonated 4. Mi C b t d LLager 5 Keystone in Canada 5. 6. Low Calorie 79
Slide 80: Cost Reduction Programs: RFG Completed
Cost Reduction Programs: RFG Completed Annual Cost Savings 2005 2006 2007 2008 2009 Total (US$ millions) Resources for Growth (‘07‐’09) ‐‐ ‐‐ 91 87 92 270 Merger synergies (‘05‐’07) 59 66 55 ‐‐ ‐‐ 180 P Pre‐merger programs (‘05‐’06) (‘05 ’06) 22 38 ‐‐ ‐‐ ‐‐ 60 Total 81 104 146 87 92 510 Completed RF
Slide 81: RFG2 – Three-Year Goal: $150 million
RFG2 – Three‐Year Goal: $150 million RFG2 Annual Cost Savings 2010 2011 2012 Total (US$ millions) Annual Delivery Targets 45 48 57 150 • RFG2 program developed: $150 million of new savings, 2010‐2012 • Significant reductions in logistics, waste, utilities and maintenance • Systems improvements and p
Slide 82: MillerCoors Synergies on Target
MillerCoors Synergies on Target Annual Cost Savings 2H 1H 2009 2010 Total (US$ millions) 2008 2011 MillerCoors Synergies ‐ Delivered 28 245 ‐‐ ‐‐ 273 MillerCoors Synergies ‐ Anticipated ‐‐ ‐‐ 177 50 227 Total 28 245 177 50 500 • On target to deliver $450 million of cumulative synergies by year end,
Slide 83: 2009 Underlying Free Cash Flow
2009 Underlying Free Cash Flow 2009 Reported FCF = $691 million Incremental MillerCoors‐related MillerCoors related cash: $93 million MillerCoors cash held in margin: ($55) million 2009 Underlying y g FCF = $729 $ million* * Versus 2009 underlying FCF goal of $575 million, +/‐ 10%. Underlying free c
Slide 84: Building Cash Flow and Balance Sheet Strength
Building Cash Flow and Balance Sheet Strength 2010 Underlying Free Cash Flow Goal: $760 million, +/‐ 10% • 32% higher than 2009 goal − 12% over 2009 actual without $53 million Canadiens sale • Driven by: − Operating earnings − Changes in working capital − MillerCoors cash generation continues to ram
Slide 85: Cash Use Priorities Drive Long-Term Value
Cash Use Priorities Drive Long‐Term Value • Growth opportunities − Recent examples: MillerCoors, Cobra (U.K.), Granville (Canada) − Selectively considered and brand‐led, all shapes and sizes, investments in high‐return innovation and capital projects − Value‐enhancing in‐market and select strategic
Slide 86: Business Strategies Drive Long-Term Value
Business Strategies Drive Long‐Term Value • Innovation p programs g build brands and margins g • Exceeded cost reduction targets – MCBC and MillerCoors − New aggressive goals • Ramping up cash generation • Strategies strengthen balance sheet, generate cash Disciplined cash use strategies drive long‐
Slide 87: Peter Swinburn, Chief Executive Officer, Molson Coors
Peter Swinburn Chief Executive Officer, Molson Coors
Slide 88: Molson Coors is Well Positioned to Grow
Molson Coors is Well Positioned to Grow STRATEGY OBJECTIVES •Stronger competitor, balance Smart Cost sheet Management •Resources to grow top line and bottom line SHAREHODLER VALUE M i i or grow market •Maintain k share h Brands & Innovation = •Increase revenue per barrel Consumer Value, Growth •Deli
Slide 89: wosontal
wosontal
Slide 90: Molson Coors Brewing Company
Molson Coors Brewing Company Annual New York Analyst/Investor Meeting March 3, 2010
Molson Coors Brewing Company — Investor Day (March 2010) on 6ix