Molson Coors Beverage Company · NYSE:TAP
Molson Coors Beverage — Molson Coors Brewing Company — Barclays Back to School Conference 2014
30 slides from Molson Coors Beverage's conference presentation, Sep 4, 2014
Slide 1: Molson Coors Brewing Company – Barclays Back to School Conference
M O L S O N C O O R S B R E W I N G C O M PA N Y B A R C L AY S B A C K T O S C H O O L C O N F E R E N C E SEPTEMBER 4, 2014 1
Slide 2: Peter Swinburn, President & CEO
PETER SWINBURN, PRESIDENT & CEO MOLSON COORS BREWING COMPANY 2
Slide 3: Forward Looking Statement
FORWARD LOOKING STATEMENT 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 for
Slide 4: Last Year to This Year – Key Takeaways
LAST YEAR TO THIS YEAR – KEY TAKEAWAYS • Investing behind core brands BRAND-LED • Driving share in above premium • Delivering value-added innovation PROFIT • Commercial excellence GROWTH • Cost reductions Profit After Capital Charge CASH • Capital expenditure driving efficiencies (TSR) • Working Cap
Slide 5: Strong Performance During Tough Times
STRONG PERFORMANCE DURING TOUGH TIMES • Generated more than $860 million in synergies and cost savings since 2008 • Increased underlying free cash flow generation by nearly 76% • To $892 million in 2013, from $508 million in 2008 • Grown underlying EBITDA every year since 2008 • Increased underlying
Slide 6: Molson Coors Overview
MOLSON COORS OVERVIEW UNITED STATES CANADA EUROPE INTERNATIONAL MARKETS 34% 36% 26% 14% 28% Worldwide 18% Underlying 4% 2% Beer Net Sales Operating Volume Income1 46% 44% 48% 1 Does not include underlying operating losses for Corporate and MCI. Totals may not sum due to rounding. Non GAAP underlying
Slide 7: Context – Improving Economies in Our Core Markets
CONTEXT – IMPROVING ECONOMIES IN OUR CORE MARKETS GDP – Real Change % (Per Annum) Recorded Unemployment % 7.0 25.0 5.0 20.0 3.0 1.0 15.0 (1.0) 10.0 (3.0) (5.0) 5.0 (7.0) 2008 2009 2010 0.0 2008 2009 2010 2011 2011 2012 2012 2013 2013 2014F 2014F 2015F 2015F 2016F 2016F 2008 2009 2010 2011 2012 2013
Slide 8: Context – Rapidly Changing Consumer Dynamics
CONTEXT -- RAPIDLY CHANGING CONSUMER DYNAMICS BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL • Fewer beer–only drinkers • Demand for more innovation in beer • Growing interest in craft • Brand marketing requires more two-way engagement with consumers online • Greater consumer interest in c
Slide 9: Growth Strategy Aligned with These Trends
GROWTH STRATEGY ALIGNED WITH THESE TRENDS • Investing behind core brands BRAND-LED • Driving share in above premium PROFIT • Delivering value-added innovation GROWTH • Commercial excellence • Cost reductions CASH • Capital expenditure driving efficiencies GENERATION • Working capital improvements CA
Slide 10: Brand-Led Growth Enablers
BRAND-LED GROWTH ENABLERS INVESTING BEHIND DRIVING SHARE CORE BRANDS IN ABOVE PREMIUM DELIVERING VALUE DRIVE COST SAVINGS AND ADDED INNOVATION COMMERCIAL EXCELLENCE 10
Slide 11: Investing Behind Core Brands
INVESTING BEHIND CORE BRANDS BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL • Core brands account for nearly 70% of total volume • Strong brand positions in the most profitable beer markets • The US premium light category is 6x larger than the craft category • US - Coors Light (#2) and Mil
Slide 12: Driving Share in Above Premium
DRIVING SHARE IN ABOVE PREMIUM BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL • Tenth and Blake is the leading craft brewer in the US • Blue Moon is the largest craft brand in US • Leinenkugel’s the fifth-largest craft brand in US • Canada above premium portfolio captures more than 26% of
Slide 13: Delivering Value Added Innovation
DELIVERING VALUE ADDED INNOVATION BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL • A leader in the industry • Creates brand loyalty • Attracts new drinkers • Builds excitement in the category • Delivered 5.8% of NSR in 2013 • On-target for nearly 7% of 2014 NSR 13
Slide 14: Performance Is Underpinned by Commercial Excellence
PERFORMANCE IS UNDERPINNED BY COMMERCIAL EXCELLENCE BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL CAPABILITIES PILOT AREA: OUTCOMES CONSISTENT GLOBAL UK: VOLUME IMPROVEMENT FRAMEWORK +6.5% -- Distribution vs. Control Field Sales Management +18% -- Brilliant Execution Revenue Management +6
Slide 15: Financial Update: Gavin Hattersley, CFO
FINANCIAL UPDATE: GAVIN HATTERSLEY, CFO MOLSON COORS BREWING COMPANY 15
Slide 16: Driving Total Shareholder Return with PACC Model
DRIVING TOTAL SHAREHOLDER RETURN WITH PACC MODEL • Investing behind core brands BRAND-LED • Driving share in above premium PROFIT • Delivering value-added innovation GROWTH • Commercial excellence • Cost reductions Profit • Capital expenditure driving After CASH efficiencies GENERATION • Working cap
Slide 17: Underlying Earnings Growth in Tough Times
UNDERLYING EARNINGS GROWTH IN TOUGH TIMES… MCBC Underlying Pretax Income (*) $865 $865 $794 $821 $800 $719 $646 $642 $600 $541 $441 $437 $400 $359 $200 ($millions) $0 2005 2006 2007 2008 2009 2010 2011 2012 2013 1H'13 1H'14 Pretax income growth over the past 8 years totaled 96% * Non-GAAP underlying
Slide 18: …and Steady, Strong, Growing EBITDA
…AND STEADY, STRONG, GROWING EBITDA Underlying EBITDA1 $1,600 $1,469 $1,398 $1,400 $1,267 $1,212 $1,200 $1,106 $1,100 $1,091 $1,127 $1,000 $800 $727 $667 $600 $400 ($millions) $200 $0 2006 2007 2008 2009 2010 2011 2012 2013 1H'13 1H'14 2013: +5.1%, to nearly $8 per share; 2014 1H: +9% 1 Non-GAAP und
Slide 19: Growing Cash Returns via Dividends
GROWING CASH RETURNS VIA DIVIDENDS Dividends Paid (Annual Per Share) $1.48 $1.50 $1.28 $1.28 $1.24 $1.08 $1.00 $0.92 $0.76 $0.64 $0.64 (dividend per share) $0.50 $0.00 2006 2007 2008 2009 2010 2011 2012 2013 2014E New dividend payout ratio of 18%-22% of trailing underlying EBITDA 19
Slide 20: Cost Reductions Help to Drive Top Line and Bottom Line
COST REDUCTIONS HELP TO DRIVE TOP LINE AND BOTTOM LINE BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL Cumulative Annualized Cost Savings (*) $1,195 $1,200 $1,078 $1,000 $958 $851 $800 $657 $600 $442 $400 $331 ($millions) $185 $200 $81 $0 2005 2006 2007 2008 2009 2010 2011 2012 2013 Nearly
Slide 21: Ongoing Cost Efficiencies Will Fuel Growth Investments
ONGOING COST EFFICIENCIES WILL FUEL GROWTH INVESTMENTS BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL Long-term sustainability • Captured more than $70 million of savings in 2013* • Savings of $40-$60 million/year for at least the next 4 years* • Near the high end of the range for the next
Slide 22: Capital Efficiency Drives Cash and Value
CAPITAL EFFICIENCY DRIVES CASH AND VALUE BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL Capital Spending • 2014 outlook: $315 million* • Supply chain work in Canada • Innovation in Canada and Europe • Higher than maintenance capital • Expect to maintain similar capital spend levels in 2015
Slide 23: Increasing Working Capital Efficiency
INCREASING WORKING CAPITAL EFFICIENCY BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL Day Sales Outstanding Days Payables Outstanding 65 62 90 86 60 85 55 52 80 76 50 75 45 70 2012 2013 2012 2013 Days Inventory Outstanding Cash Conversion Cycle (*) 19 34 33 20 15 32 10 29 30 5 -4 0 28 -5 26
Slide 24: Profit, Capital Efficiency & Structure Drive Cash Flow
PROFIT, CAPITAL EFFICIENCY & STRUCTURE DRIVE CASH FLOW BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL MCBC Underlying Free Cash Flow (*) $1,000 $887 $892 $865 $800 $775 $681 $618 $600 $508 $426 $400 $315 $200 ($millions) $0 2006 2007 2008 2009 2010 2011 2012 2013 2014F (1) Very cash genera
Slide 25: Short-Term Cash Use Priority: Deleverage
SHORT-TERM CASH USE PRIORITY: DELEVERAGE BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL 5x 4.5x 4.3x 4x 2.9x 2.8x 2.9x 3.0x 3x 2.7x 2.3x 2.4x 1.9x 2.0x 2x(+/-) 2x 2.3x 0.8x <2x 1x 0.7x 0.6x 0x 2009 2010 2011 2012 2013 2015 Pro Forma Goal S&P Adjusted Debt/EBITDA* Moody's Adjusted Debt/EBIT
Slide 26: Key Value Driver: Disciplined Cash Use
KEY VALUE DRIVER: DISCIPLINED CASH USE BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL Cash use priorities • Strengthen balance sheet by reducing liabilities • Return cash to shareholders • Brand-led growth opportunities Short-term focus: Balance sheet, especially debt (to pre-Central Europ
Slide 27: Strong Base, Driving TSR
STRONG BASE, DRIVING TSR BRAND-LED PROFIT GROWTH Strategy, PACC Model Drive Value, Alignment 2013 Results: • Achieved higher underlying CASH pretax and EPS GENERATION • Grew underlying EBITDA • Exceeded cost savings targets • Improved cash conversion cycle • Generated nearly $900 million in CASH AND
Slide 28: Peter Swinburn, President & CEO
PETER SWINBURN, PRESIDENT & CEO MOLSON COORS BREWING COMPANY 28
Slide 29: Molson Coors Is Well Positioned
MOLSON COORS IS WELL POSITIONED • The fundamentals of our business are strong and improving • We have a disciplined growth strategy that is yielding improved financial results • Delivering an increasing share of revenue from innovation • Strong growth of core brands • Accelerated success in the abov
Slide 30: 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 B A R C L AY S B A C K T O S C H O O L C O N F E R E N C E SEPTEMBER 4, 2014 30
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