Molson Coors Beverage Company · NYSE:TAP
Molson Coors Beverage — Coors Adolph — Merger or Acquisition (September 2004)
32 slides from Molson Coors Beverage's merger presentation, Sep 27, 2004
Slide 1: Link to searchable text of slide shown above
Link to searchable text of slide shown above
Slide 2: Daniel J. O'Neill
Daniel J. O'Neill MOLSON @)
Slide 3: Forward Looking Statements
Forward Looking Statements ‘This presentatenindudes “oraard ooking statemert wihin fe messing of he US. federal sacuiies lave, Fonvardloshing statement are commeely dented by such teims and phases as "woul may’, wd, "expect of “expected to” and othe teens wih suat meaning indicat posible tute vents
Slide 4: Molson's Vision has Remained Consistent
Molson’s Vision has Remained Consistent 1. To become one of the best performing brewers in the world, as measured by... 2. To remain one of the best performing brewers in the world, as measured by... 3. To regain the position as one of the best performing brewers in the world, as measured by... Long
Slide 5: Molson Has Delivered Best in Class Returns to Shareholders
Molson Has Delivered Best in Class Returns to Shareholders in Last Five Years Fiscal 2004 uimes SABMiler Lon Nathan ‘Cervecerias Unidas FEMSA Lon Nathan SABMiler Scottish & Newcastle ‘Cervecerias Unidas. FEMSA Fosters Group ‘Adolph Coors ‘Anheuser-Busch Carlsberg Adolph Coors Interorew Carlsberg Gru
Slide 6: Current Footprint has Experienced Challenges in Last Six Months
Current Footprint has Experienced Challenges in Last Six Months Increasing Risks of Previous Plan Clear Priorities Exist in Each of the Existing Businesses Growth Beyond Core! Export + Regions youn Coors focus on 23 consolidation Strategic Pricing DIStbutton price status markets Provide potential fo
Slide 7: Global Industry Consolidation Driving Partners to Moves
Global Industry Consolidation Driving Partners to Moves that Could Impact Molson Value + Interbrew / AmBev deal is a potential ‘trigger’ for ‘next wave’ of bigger consolidation moves — All players revisiting their M&A growth game plan — Mid-sized players realizing that they are likely sellers - Gian
Slide 8: Consolidation Could Lead to Value Destruction
Consolidation Could Lead to Value Destruction Most Immediate Impact with Coors and/or Heineken Potential Deals with Risk to Molson Conflict with Molson Portfolio of Brands InterbrewAmBev + Coors brand in Canada + Molson brands in US (CCT WE) Heineken + Heineken and Coors brands in Canada + Risk they
Slide 9: Molson and Coors: The Right Combination
Molson and Coors: The Right Combination + North America’s oldest brewer + Established in 1873 by Adolph Coors + 13 largest brewer in the world + 8” largest brewer in the world + Leading position in Canada; + Leading brands in US and UK beer growth opportunity in Brazil markets Rich Brewing Heritag x
Slide 10: Merger Improves Likelihood of Regaining the Vision
Merger Improves Likelihood of Regaining the Vision * To secure the current commercial relationship with Coors, which represents 20% of Molson’s total shareholder value + To identify and obtain $175 million in synergies, which would not be available to Molson otherwise: — Capitalizes on Molson’s prov
Slide 11: Leo Kiely
Leo Kiely MOLSON @)
Slide 12: Makes Perfect Sense
Makes Perfect Sense + Creates top-5 brewer with the operational scale to succeed in the global brewing industry — Strong market positions in some of the world's largest beer markets — Broader geographic base provides diversified sources of revenue, profit and cash + Experienced management team to en
Slide 13: With Broad Scope & Scale
With Broad Scope & Scale + Pro forma LTM net sales and EBITDA“ of approximately US$6.0 billion and US$1.0 billion, respectively + Combined 2003 volume of 60M hi/51M US bbls + Combined product portfolio of more than forty brands eS IKEYSTONETCE sd GiNADINN Med ay fe Bets Oo nO + Distribution and/or l
Slide 14: Enhanced Platform in Developed Markets, Balanced Emerging Market Exposure
Enhanced Platform in Developed Markets, Balanced Emerging Market Exposure * Strong positions in world’s highest margin beer markets + Growth opportunities through underdeveloped regions/brands in mature markets and Brazil 2003 Volume 60M hi LTM Net Sales US$6B LTM EBITDA US$1B most (1) tntusee Coors
Slide 15: With Leading Positions in Key Markets
With Leading Positions in Key Markets All Brands Top Brand Rank Canada re #1 43% cal United States Brazil alse’ #8 11% #8 Source Datamonitor and Brenets of Canada @e02)
Slide 16: Enhanced Financial Strength
Enhanced Financial Strength Pro Forma LTM Molson Coors (USSM) Net sales $6,036 Operating income 694 Margin 19.5% EBITDA 996 Margin 16.5% Free cash flow" 723 *Defined as EBITDA CAPEX CADIUSD exchange rate of 1.34 Excludes potential synergies LT (ast twelve months) ended June 20, 2004 Financi | streng
Slide 17: And Balanced Board & Management Team
.. And Balanced Board & Management Team ec Independent eel Independent Molson Coors Independent Office of Synergies & Integration | Geo Molson Vice Chairman CEO Coors Independent Neill L Kiely Independent Molson Coors Family Family Coors Family
Slide 18: Synergies
Synergies Expected Savings % of Pro Forma (UssM) Cost Base Brewery Network Optimization $60 1.1% Procurement Savings 43 08 SGA 40 08 Best In Class Savings 12 0.2 Organizational Design 10 0.2 Other 10 0.2 Total $175 3.3% Molson Coors has identified a clear path to substantial synergies MOLSON @) Cook
Slide 19: Profit Impact and Estimated Timing
Profit Impact and Estimated Timing Impact on EBITDA of 100% Synergies Expected Timing of Synergies usst 500m os ~ — #5 sum eo 8 $900 4% $600 seo $200 $0 inion aay Re rme Syades later ews vert vers Coors 50% of synergy capture to occur in the first 18 months MOLSON @) Cooks
Slide 20: Significant Opportunity for Margin Expansion
Significant Opportunity for Margin Expansion EBITDA to Net Sales Molson Coors Without With 100% Cys9 CYOO CYO1 CYO2_ CYS ineSies Synergies 183% 189% 209% 229% 228% 165% —> 195% Coors 121% 12.2% 122% 141% 19.6% AmBev 211% 28.7% 30.6% 36.9% + [35.4% AB 259% 264% 276% © 262% [286%] Inerorew «28.3% 21.2
Slide 21: Revenue Growth Opportunities
Revenue Growth Opportunities Canada + Unleash Coors Light; redirect dollars from Canadian Light to Canadian + Support value entry to regain share and drive volume savings * Utilize the ARC technology from UK to drive on-premise listings USA + Continue to support Coors Light in developmental regions,
Slide 22: Financially Compelling Combination
Financially Compelling Combination Synergies drive profits and value creation Combined enterprise value of approximately US$8.4B US$6.0B in pro forma last twelve months net revenue and US$1.0B in pro forma last twelve months EBITDA pre-synergies Pro forma free cash flow* in excess of US$700M Enhance
Slide 23: Last Twelve Months Pro Forma Income Statement
Last Twelve Months Pro Forma Income Statement (USsM) Molson Coors Net sales 1,890 4146 BIT 365 331 696 871 Margin 19.3% 8.0% 11.5% 14.8% EBITDA 413 585 998 4,173 Margin 21.8% 14.1% 16.5% 19.4% Net income 187 174 361 4750 Free cash flow" 348 3mT 725 900 Sabo emtane et 194 (Suerte 25% Eiches purchase
Slide 24: Pro Forma Balance Sheet
Pro Forma Balance Sheet (ussm) Molson Coors Combined Cash $108 $36.2 $47.41 Total current assets $367.6 $1,1285 $1,496.1 PP&E 7423 14110 2,153.3 Total assets 929312 $4532.0 $7,463.1 Total current liabilities $760.9 $1,175.9 $1,936.8 Total debt 840.6 1,142.4 1,982.7 Minority interests 93.5 298 123.2
Slide 25: Coors Performance Overview: 2003
Coors Performance Overview: 2003 In the most recent fiscal year, Coors emerged a stronger company in a very tough year. * Improvements made in key areas of the business * Continued investments in future growth * Generated cash and exceeded debt repayment goals * Strengthened financial position; stre
Slide 26: Coors Americas Segment
Coors Americas Segment Coors Brewing Company Continued strong U.S. pricing environment Share maintained in a flat, highly competitive beer market Refined marketing strategy gaining traction with key demographic groups Sales organization strengthened and making progress in key markets (Hispanic) and
Slide 27: Coors Europe Segment
Coors Europe Segment Coors Brewers Limited * Carling #1 U.K. beer brand — 30% larger than #2 brand * Significant improvements in balancing volume and margins * Achievements in productivity and cost reductions (new packaging lines in Burton, outsourcing of kegs and pub servicing) * Long-term market t
Slide 28: 2003 UK Market Share Grew 1.2% to 20.3%
2003 UK Market Share Grew 1.2% to 20.3%... Total Trade On Trade Off Trade Coors Owned Brands 2002 2003 % % 19.1 20.3 20.2 21.7 17.2 18.2 Growth PPs + 1:2 4 18 +1.0 Source: BBPA
Slide 29: Consistent Strong Growth in the On-Trade
...Which Is a Continuation of Consistent Strong Growth in Both the On-Trade... Owned Brand Market Share - On Trade 22% 21.7% 1% 20.2% 20% 19.7% 19.3% a ia 18% + 2000 2001 2002 2003 On-Trade of CBL volume) MOLSON @) Cooks
Slide 30: ...and the Off-Trade
...and the Off-Trade Owned Brand Market Share - Off-Trade 19% 18.2% 18% 18% an 17.2% 7% 17% 16% ice 15.4% 15% 18% 14% + 2000 2001 2002 2003 Off-Trade > of CBL volume) MOLSON @®) Coots
Slide 31: Molson Coors — A Key Strategic Step
Molson Coors — A Key Strategic Step Value Creation Critical Mass + Transaction unlocks shareholder value through US$175M of merger synergies + Experienced management team can deliver upon key objectives Enhanced position MOLSON (@ Creates top-5 brewer with global scale and diversity Strong cash flow
Slide 32: Searchable text section of graphics shown above
Searchable text section of graphics shown above Mol son Coors Brewing Company Reshaping the Competitive Brewing Landscape September 2004 Leo Kiely Daniel J. O’Neill President and President and Chief Executive Officer Chief Executive Officer Coors Brewing Company Molson Inc. [LOGO] [LOGO] Dan iel J.
Coors Adolph — Merger or Acquisition (September 2004) on 6ix