Constellation Brands, Inc. · NYSE:STZ
Constellation Brands — Q3 2024 Earnings Presentation
36 slides from Constellation Brands's earnings presentation, Jan 5, 2024
Slide 1: January 5, 2024
J AN U A RY 5 , 2 0 2 4
Slide 2: Forward-looking statements
This presentation contains forward-looking statements that are based on certain assumptions, estimates, expectations, plans, analyses, and opinions made by management in light of their experience and perception of historical trends, current conditions, and expected future developments, as well as ot
Slide 3: Forward-looking statements (continued)
In addition to the risks and uncertainties of ordinary business operations and conditions in the general economy and markets in which we compete, our forward-looking statements contained in this presentation are also subject to the risk, uncertainty, and possible variance from our current expectatio
Slide 4: Non-GAAP financial measures
This presentation may contain non-GAAP financial measures. These and other non-GAAP financial measures, the purposes for which management uses them, why management believes they are useful to investors, and reconciliations to the most directly comparable GAAP financial measures may be found in the a
Slide 5: Q3 FY24 highlights: Beer, Wine and Spirits, capital allocation
Beer Business 1 Mid-single digit net sales growth in Q3 100bps operating margin expansion in Q3 Increased operating income growth outlook for FY24 Wine and Spirits Business 2 High-single digit net sales decline in Q3 80bps operating margin expansion in Q31 Decreased net sales and operating income ou
Slide 6: Continue to build powerful brands and strategic priorities
CONTINUE TO BUILD DEVELOP CONSUMER- D E P L O Y C A P I TA L O P E R AT E I N A WAY POWERFUL BRANDS L E D I N N O VAT I O N S IN-LINE WITH T H AT I S G O O D F O R T H AT P E O P L E L O V E ALI GNED WI TH DI SCI PLI NED AND BUSI NESS AND GOOD EMERGING TRENDS BALANCED PRIORITIES FOR THE WORLD Q3 FY2
Slide 7: Enterprise, Beer, Wine and Spirits Q3 results
ENTERPRISE Operating Net Income (Loss) Adjusted Diluted Net Income (Loss) Per EPS Excluding Net Sales Income (Loss) Attributable to CBI EBIT Share Attributable to CBI (EPS) Canopy EIE Third Quarter Fiscal Year 20241 | In millions, except per share data Reported $2,471 $797 $509 $755 $2.76 NA % Chang
Slide 8: Enterprise net sales Q3 FY24
Q3 FY24 $2.5B ENTERPRISE VS Q3 FY23 +1% $ MILLIONS Net sales of Brands Divested in Q3 FY23 1 Note: Totals may not sum due to rounding 1 Other includes nonbranded sales
Slide 9: Enterprise comparable operating income Q3 FY24
Q3 FY24 $820M 1 2 ENTERPRISE VS Q3 FY23 +7% $ MILLIONS MKTG. CAM of 8.7% of Brands Net Sales Divested in Q3 FY23 1 Comparable basis 2 Inclusive of $65M of corporate expense.
Slide 10: Enterprise net sales FY24 outlook
ENTERPRISE ~4% to ~5% Growth +8% to +9% Price Total $ MILLIONS YoY Per 1-2% Net sales Algorithm of Brands Divested in Q3 FY23 Total YoY +LSD% -9% to -7% Total YoY –LDD% to –HSD% Total YoY Per +MSD% Algorithm Note: Totals may not sum due to rounding.
Slide 11: Enterprise operating income FY24 outlook
ENTERPRISE ~6% to ~7% Growth $(35) - Total -8% to $ MILLIONS $(40) +6% YoY CAM of -HSD% -6% to Total Brands YoY +7% Divested Further -HSD% Total Total YoY details Total -MSD% YoY on next YoY +LSD% page +LSD% 1 Enterprise comparable operating income inclusive of $65M of corporate expense and $23M of
Slide 12: Beer business FY24 COGS outlook
FY24 Outlook Beer Business Other COGS Share % Change YoY Packaging & Raw Materials 55-60% +HSD (OF TOTAL COGS) Freight 20-25% +HSD (OF TOTAL COGS) Labor & Overhead 10-15% +HT (OF TOTAL COGS)
Slide 13: Q3 FY24 results and FY24 outlook
(% CHANGE YoY) Q3 FY24 Results FY24 Outlook Other FY24 Outlook Considerations Beer $2B | +4% Beer +8% to +9% Beer ~45% of volumes expected in H2 Net Sales $502M | (8%) Reported W&S W&S (9%) to (7%) Organic2 W&S ~55% of volumes expected in H2 (7%) Organic1 ~25% of COGS variable Beer $757M | +7% Beer
Slide 14: Appendix
Slide 15: Defined Terms
Slide 16: Defined terms
Unless the context otherwise requires, the terms “Company,” “CBI,” "STZ," “we,” “our,” or “us” refer to Constellation Brands, Inc. and its subsidiaries. We use terms in this presentation that are specific to us or are abbreviations that may not be commonly known or used. Term Meaning Term Meaning AB
Slide 17: Shipments
SHIPMEN Va Constellation Brands
Slide 18: Shipment seasonality by quarter, FY19-FY23
Q4 Q4 Q4 Q4 Q4 21% 21% 22% 23% 20% H2 H2 H2 H2 H2 ~44% ~44% ~50% ~49% ~45% Q3 Q3 Q3 23% 23% Q3 Q3 25% 27% 26% Q2 Q2 Q2 30% 30% Q2 Q2 29% 27% 28% H1 H1 H1 H1 H1 ~56% ~56% ~50% ~51% ~55% Q1 Q1 Q1 Q1 Q1 26% 26% 23% 23% 26% FY19 FY20 FY21 FY22 FY23 Note: Totals may not sum due to rounding
Slide 19: Shipment seasonality by quarter, FY19-FY23
Q4 Q4 Q4 Q4 Q4 20% 21% 21% 21% 21% H2 H2 H2 H2 H2 ~44% ~45% ~46% ~46% ~46% Q3 Q3 Q3 Q3 Q3 24% 24% 25% 25% 25% Q2 Q2 Q2 Q2 Q2 31% 30% 29% 29% 29% H1 H1 H1 H1 H1 ~56% ~55% ~54% ~54% ~54% Q1 Q1 Q1 Q1 Q1 25% 25% 25% 25% 25% FY19 FY20 FY21 FY22 FY23 Note: Totals may not sum due to rounding
Slide 20: Shipment seasonality by quarter, FY19-FY23
Q4 Q4 Q4 Q4 Q4 25% 21% 22% 26% 26% H2 H2 H2 H2 H2 ~50% ~50% ~50% ~53% ~48% Q3 Q3 Q3 Q3 Q3 29% 26% 25% 24% 27% Q2 Q2 Q2 Q2 Q2 27% 27% 27% 26% 25% H1 H1 H1 H1 H1 ~50% ~50% ~50% ~47% ~52% Q1 Q1 Q1 Q1 Q1 23% 23% 24% 22% 25% FY19 FY20 FY21 FY22 FY23 Note: Totals may not sum due to rounding
Slide 21: Shipment seasonality by quarter, FY19-FY23
Q4 Q4 Q4 Q4 Q4 21% 27% 27% 27% 26% H2 H2 H2 H2 H2 ~51% ~51% ~48% ~52% ~50% Q3 Q3 Q3 27% Q3 Q3 24% 24% 25% 24% Q2 Q2 Q2 Q2 Q2 26% 27% 25% 26% 27% H1 H1 H1 H1 H1 ~49% ~49% ~52% ~48% ~50% Q1 Q1 Q1 Q1 Q1 22% 24% 26% 22% 23% FY19 FY20 FY21 FY22 FY23 Note: Totals may not sum due to rounding
Slide 22: Financial Statements
FINANCIAL STATEMENTS:
Slide 23: Condensed Consolidated Balance Sheets
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in millions) (unaudited) November30, February 28, 2023 2023 ASSETS Current assets: Cash and cash equivalents S 78.7 S$ 133.5 Accounts receivable 897.3 901.6 Inventories 1,988.0 1,898.7 Prepaid expenses and other 587.4
Slide 24: Consolidated Statements of Operations
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share data) (unaudited) Three Months Ended Nine Months Ended November 30, November 30, November30, November 30, 2023 2022 2023 2022 Sales $ 2,658.2 S 2,624.6 § 8,410.7 S$ 8,029.6 Excise taxes (
Slide 25: Consolidated Statements of Cash Flows
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (unaudited) Nine Months Ended November30, November 30, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ 1,360.8 S$ (261.7) Adjustments to reconcile net income (loss) to net cash provided
Slide 26: Consolidated Statements of Cash Flows (financing)
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (unaudited) Nine Months Ended November30, November 30, 2023 2022 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of long-term debt 744.8 2,845.8 Principal payments of long-term debt (807.5) (1
Slide 27: Reconciliation of Reported and Organic Net Sales
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES RECONCILIATION OF REPORTED AND ORGANIC NET SALES (in millions) (unaudited) For periods of acquisition, we define organic net sales as current period reported net sales less net sales of products of acquired businesses reported for the current period, as ap
Slide 28: Supplemental Shipment and Depletion Information
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES SUPPLEMENTAL SHIPMENT AND DEPLETION INFORMATION (in millions) (unaudited) Three Months Ended Nine Months Ended November30, November 30, Percent November30, November 30, percent 2023 2022 Change 2023 2022 Change Beer (branded product, 24-pack, 12-ounce case
Slide 29: Summarized segment, unconsolidated investments, D&A information
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES SUMMARIZED SEGMENT, INCOME (LOSS) FROM UNCONSOLIDATED INVESTMENTS, AND DEPRECIATION AND AMORTIZATION INFORMATION (in millions) (unaudited) Management excludes items that affect comparability from its evaluation of the results of each operating segment as t
Slide 30: Reconciliations of GAAP to Non-GAAP Financial Measures
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES (in millions, except per share data) (unaudited) We report our financial results in accordance with GAAP. However, non-GAAP financial measures, as defined in the reconciliation tables below, are provid
Slide 31: Reconciliations of GAAP to Non-GAAP Financial Measures (continued)
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES (continued) (in millions, except per share data) (unaudited) The comparable adjustments that impacted comparability in our results for each period are as follows: Three Months Ended Nine Months Ended N
Slide 32: Reconciliations of GAAP to Non-GAAP Financial Measures (continued)
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES (continued) (in millions, except per share data) (unaudited) Recovery of (loss on) inventory write-down We recognized a gain from a change in estimate on reserved bulk wine inventory and certain grapes
Slide 33: Reconciliations of GAAP to Non-GAAP Financial Measures (continued)
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES (continued) (in millions, except per share data) (unaudited) Canopy Equity Earnings (Losses) and Related Activities (“Canopy EIE”) Non-GAAP Canopy EIE financial measures are provided because management
Slide 34: Reconciliations of GAAP to Non-GAAP Financial Measures (continued)
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES (continued) (in millions, except per share data) (unaudited) Three Months Ended November 30, 2023 November 30, 2022 Income (loss) _ (Provision for) Income (loss) (Provision for) before income __ benefi
Slide 35: Reconciliations of GAAP to Non-GAAP Financial Measures (continued)
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES (continued) (in millions, except per share data) (unaudited) Actual for the Year Ended February 28, 2023 EPS (GAAP) °) $ (0.11) Reclassification (Non-GAAP) “*) (0.27) Comparable adjustments (Non-GAAP)
Slide 36: Free Cash Flow Guidance reconciliation
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES (continued) (in millions, except per share data) (unaudited) Free Cash Flow Guidance Free cash flow, as defined in the reconciliation below, is considered a liquidity measure and is considered to provi