Molson Coors Beverage Company · NYSE:TAP
Molson Coors Beverage — Molson Coors Brewing Company — Investor Day (June 2014)
93 slides from Molson Coors Beverage's investor day presentation, Jun 25, 2014
Slide 1: Molson Coors Brewing Company Annual New York Investor/Analyst Meeting
M O L S O N C O O R S B R E W I N G C O M PA N Y A N N U A L N E W Y O R K I N V E S T O R / A N A LY S T M E E T I N G JUNE 25, 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 Forward‐Looking Statements: This press release 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 sim
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 EBITDA every year since 2008 • Increased underlying after-tax
Slide 6: Today's Agenda – Focus On Core Markets
TODAY’S AGENDA – FOCUS ON CORE MARKETS • Peter Swinburn, CEO, Molson Coors • Tom Long, CEO, MillerCoors • Stewart Glendinning, CEO, Molson Coors Canada • Mark Hunter, CEO, Molson Coors Europe • Gavin Hattersley, CFO, Molson Coors • Closing Remarks • Q&A with Full Leadership Team • Reception 6
Slide 7: 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 8: 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 9: 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 10: 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 11: 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 11
Slide 12: 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 13: 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 14: 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 14
Slide 15: 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 16: Molson Coors International A Critical Part Of Our Brand-Led Growth Strategy
MOLSON COORS INTERNATIONAL A CRITICAL PART OF OUR BRAND-LED GROWTH STRATEGY 16
Slide 17: MCI Strategy
MCI STRATEGY ASSET-LIGHT, INTEGRATED MARKETING & BRILLIANT EXECUTION Disruptive Marketing Perfect Outlet Execution Great Quality Beer 17
Slide 18: Building A Fast Growing Global Portfolio Of Above Premium Brands
BUILDING A FAST GROWING GLOBAL PORTFOLIO OF ABOVE PREMIUM BRANDS BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL Coors Light International Volume* (000s Hl) MCI Total Volume* (000s Hl) 800 2,500 697 2,250 2,000 600 445 1,500 400 1,000 666 200 500 0 0 2009 2013 2009 2013 +12% CAGR +36% CAGR
Slide 19: MCI On Track For 2016 Profitability
MCI ON TRACK FOR 2016 PROFITABILITY BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL MCI Underlying Pretax Income(loss) per HL1 $5 2009 2010 2011 2012 2013 2014 2015 2016 -$5 -$15 -$25 -$35 MCI will move past breakeven to deliver meaningful profit growth beyond 2016 1 Non-GAAP underlying pre
Slide 20: 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 21: U.S. Update: Tom Long, CEO MillerCoors
U.S. UPDATE: TOM LONG, CEO MILLERCOORS 21
Slide 22: A Stronger, More Competitive Brewer
A STRONGER, MORE COMPETITIVE BREWER Since 2008 launch … • More than $1 billion in savings/synergies • More than $6 billion in underlying net income since inception • Net cash distributions to parent companies of nearly $5.5 billion Major Breweries 22
Slide 23: Strong Revenue Growth And Margin Expansion
STRONG REVENUE GROWTH AND MARGIN EXPANSION 20.0% 4.0% 3.5% 3.4% 19.0% 3.3% 3.5% 18.0% 3.0% 17.0% 2.4% 16.5% 2.3% 16.3% 15.8% 2.5% 16.0% 15.0% 14.8% 2.0% 14.4% 14.0% 1.5% 13.0% 1.0% 12.0% 0.5% 11.0% 10.0% 0.0% 2010 2011 2012 2013 2014 Q1 Underlying Net Income Margin% Domestic Net Revenue per HL Growt
Slide 24: Millennials Driving Significant Change In Total Beverage Alcohol Market
MILLENNIALS DRIVING SIGNIFICANT CHANGE IN TOTAL BEVERAGE ALCOHOL MARKET TBA servings distribution among consumers ages 21-34 80% 70% 60% 50% 40% 30% 20% 10% 0% Generation X: 1999 Millennials: 2012 Millennial tastes have shifted An explosion of new brewers 24
Slide 25: Evolve Our Portfolio
EVOLVE OUR PORTFOLIO 2013 MillerCoors* 2016 MillerCoors* 9% 13% 56% 56% 5% 4% 30% 27% Above Premium Premium Light Premium Regular Economy *Percent of Total Volume Source: MillerCoors projections 25
Slide 26: Right Strategy: Drive Core Brands
RIGHT STRATEGY Drive core brands 26
Slide 27: Commercial #1
• COMMERCIAL #1 27
Slide 28: Right Strategy: Drive Core Brands
RIGHT STRATEGY Drive core brands 28
Slide 29: Commercial #1
• COMMERCIAL #1 29
Slide 30: Right Strategy: Capture Above Premium Growth
RIGHT STRATEGY Capture Above Premium Growth 30
Slide 31: Commercial #1
• COMMERCIAL #1 31
Slide 32: Right Strategy: Capture Above Premium Growth
RIGHT STRATEGY Capture Above Premium Growth 32
Slide 33: Right Strategy: Accelerate Innovation
RIGHT STRATEGY Accelerate innovation 33
Slide 34: Driving Net Producer Revenue Increase Through Innovation
DRIVING NET PRODUCER REVENUE INCREASE THROUGH INNOVATION Brand Innovation % of Total Domestic Net Producer Revenue 9% 8% 7.1% 7% 6% 5.8% 5% 4% 3% 2% 1.2% 1% 0.2% 0.4% 0% 2010 2011 2012 2013 Q1'14 34
Slide 35: MillerCoors Gaining Chain Category Leadership
MILLERCOORS GAINING CHAIN CATEGORY LEADERSHIP 24% 47% MillerCoors Category Captain 60% 50% 47% 45% 40% 35% 30% 30% 24% 20% 10% 0% 2009 2010 2011 2012 2013 CM Profit group named MillerCoors the number-one alcohol beverage supplier 35
Slide 36: Retailers See Stronger Category Growth With MillerCoors As Captain
RETAILERS SEE STRONGER CATEGORY GROWTH WITH MILLERCOORS AS CAPTAIN ABI Captain MillerCoors Captain + 3.2 pts. 3 over ABI 3 2 2 +2.7 1 1 0 -0.5 0 -1 -1 Good for retailers. Good for distributors. Good for MillerCoors. Source Nielsen Latest 52 weeks Dec. 2013 36
Slide 37: Building With Beer
BUILDING WITH BEER Goal: Accelerate Premium Light growth by 2% trend improvement • Through May, more than 165 distributors have been trained • Nearly half are seeing positive or flat trend improvement on Premium Lights • Pilot distributors, on average, are seeing 1.9% Premium Light trend improvement
Slide 38: SmartSKU
SMARTSKU Over $4.0M in distributor revenue gained so far through the initiative Distributors who have used SmartSKU have seen positive results: • Programs completed in May, 64% of SKUs placed on the shelf were reordered, nearly double the average rate historically Source Nielsen Latest 52 weeks 12-7
Slide 39: Revenue Management
REVENUE MANAGEMENT • Optimizing price and mix • Cutting-edge tools • Power of premium lights on premise • Better insights to grow independents/small accounts 39
Slide 40: Brand-Led Growth Enablers
BRAND-LED GROWTH ENABLERS 40
Slide 41: Canada Update: Stewart Glendinning, CEO Canada
CANADA UPDATE: STEWART GLENDINNING, CEO CANADA 41
Slide 42: Canada
CANADA CANADA Major Breweries 42
Slide 43: Despite Headwinds, Our Canada Business Is Driving Change
DESPITE HEADWINDS, OUR CANADA BUSINESS IS DRIVING CHANGE Challenging Beer Category Focused on driving change • Average annual decline of 1% • Strong brand building led to market since 2009 share gains by Molson Canadian – best performance in 10 years • Lingering unemployment limiting growth • Double
Slide 44: 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 44
Slide 45: Investing Behind Our Core Brands
INVESTING BEHIND OUR CORE BRANDS BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL What How Strong marketing 50% of volume, over 60% support of marketing spend Vented cans for a Innovation driving news smoother pour, wide- mouth aluminum bottle Sponsorships provide important activation NHL, f
Slide 46: Brand Building: Leading Positions Across Canada
BRAND BUILDING: LEADING POSITIONS ACROSS CANADA BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL Market Size Lead Brands Market Position Total MCBC Share Ontario Coors Light / Canadian 1st, 2nd Quebec Coors Light 1st Alberta Molson Canadian 3rd BC Molson Canadian 2nd Manitoba Coors Light 6th
Slide 47: Brand Building – Core: Molson Canadian Growing Share
BRAND BUILDING – CORE: MOLSON CANADIAN GROWING SHARE BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL Molson Canadian National Market Share Turnaround a 12.00% result of: 10.00% • Strong creative execution and 8.00% integrated supporting programs 6.00% • Fully leveraged 4.00% hockey and musi
Slide 48: Slide 48
Slide 49: Brand Building – Core: Molson Canadian Growing Share
BRAND BUILDING – CORE: MOLSON CANADIAN GROWING SHARE BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL Molson Canadian National Market Share Turnaround a 12.00% result of: 10.00% • Strong creative execution and 8.00% integrated supporting programs 6.00% • Fully leveraged 4.00% hockey and musi
Slide 50: Slide 50
Slide 51: Leveraging Learnings For Coors Light
LEVERAGING LEARNING'S FOR COORS LIGHT BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL Coors Light National Market Share Areas of focus: • Strong creative execution and 16.0% integrated supporting 14.0% programs 12.0% • Innovation behind 10.0% core lager and extended trademark 8.0% 6.0% 4.0%
Slide 52: Leveraging Learnings For Coors Light Turnaround
LEVERAGING LEARNINGS FOR COORS LIGHT TURNAROUND New creative platform: • Re-engage with Millennial and Generation X with a new creative More integrating programs: • We will bring back optimized integrated programs that are more competitive across both retail & on-premise Innovation: • Focus on rollo
Slide 53: Connecting With Consumers Emotionally
CONNECTING WITH CONSUMERS EMOTIONALLY • Our campaign aims to connect more closely with Millennials and Gen Xers • Our marketing focus has been more on functional benefits • Our social media sites have a COORS LIGHT LOVESEAT large following of actively engaged consumers • Coors Light is at its best w
Slide 54: Owned Above Premium Volume Is Up Over 50% Since 2009
OWNED ABOVE PREMIUM VOLUME IS UP OVER 50% SINCE 2009 BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL Molson Coors Canada Owned Above Premium Volume Key Strategies: 700 • 6 Pints expansion into 600 Quebec 500 • 6 Pints added to portfolio for 400 Mainstream selling organization 300 • Portfoli
Slide 55: High Revenue Innovation Building Margins
HIGH REVENUE INNOVATION BUILDING MARGINS BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL $45 Craft $40 Above Premium $35 Premium $30 Value Innovation 3% of volume; 4% of revenue * 24 bottle equivalent – Based on 2014 rates in all provinces 55
Slide 56: Commercial Excellence Driving Improved Efficiency
COMMERCIAL EXCELLENCE DRIVING IMPROVED EFFICIENCY BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL From To 4 regional selling organizations 2 regional selling organizations Separate sales and marketing leads One Chief Commercial Officer Global “one way” approach for Local back office back-of
Slide 57: Resetting Our Cost Base
RESETTING OUR COST BASE Right sizing the business • Set ourselves up with a sustainable business model, and a competitive cost base • Reduced headcount; bigger, fewer roles • Standardize and simplify processes Reducing our spend • Improve our manufacturing efficiency and productivity • Eliminate non
Slide 58: Brand-Led Growth Enablers
BRAND-LED GROWTH ENABLERS INVESTING BEHIND DRIVING SHARE CORE BRANDS IN ABOVE PREMIUM DELIVERING VALUE DRIVE COST SAVINGS AND ADDED INNOVATION COMMERCIAL EXCELLENCE 58
Slide 59: Europe Update: Mark Hunter, CEO Europe
EUROPE UPDATE: MARK HUNTER, CEO EUROPE 59
Slide 60: Europe Shaped By Starbev Deal And Integration Of UK And Ireland
EUROPE SHAPED BY STARBEV DEAL AND INTEGRATION OF UK AND IRELAND BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL CZECH IRELAND #3 REPUBLIC #2 SLOVAKIA #3 ROMANIA #3 UNITED KINGDOM #2 BULGARIA #1 HUNGARY #3 BOSNIA & SERBIA #1 CROATIA #1 HERZEGOVINA #1 MONTENEGRO #1 Molson Coors Europe was sha
Slide 61: Molson Coors Europe Is A Scale Business
MOLSON COORS EUROPE IS A SCALE BUSINESS ($ in millions) 2013 % of Molson Coors Market Share 21.0% Net Sales $2,128.3 28.4% Gross Profit $770.8 26.1% Underlying Pretax Income* $213.3 24.6% Underlying EBITDA* $391.1 26.6% Europe drives 28% of MCBC sales, nearly 27% of underlying EBITDA * Non-GAAP unde
Slide 62: Acquisition And Integration Deliver On Benefits
ACQUISITION AND INTEGRATION DELIVER ON BENEFITS • Executive Leadership team changes completed • Starbev/MCBC systems and process integration completed/on track • Synergies ahead of plan • UK and Ireland integration with Central Europe accelerated by 12 months • Significant transfer of best practice
Slide 63: Positive Performance Progress
POSITIVE PERFORMANCE PROGRESS ($ in millions) Q1 2014 Q1 2013 Change Sales Volume (000s HL) 4,085 3,868 +5.6% Net Sales $437.6 $406.4 +7.7% Gross Profit Margin 34.6% 30.8% 380 bp Underlying Pre-tax Income* $16.2 $(5.3) n/a Underlying EBITDA* $59.3 $40.0 +48.3% We have made positive performance progr
Slide 64: European Operating Context
EUROPEAN OPERATING CONTEXT SLUGGISH GDP GROWTH LEADING TO VOLATILE DEMAND GDP FUTURE FORECASTS GROWTH IN VALUE SEGMENT IMPROVING SHIFT TO KEY ACCOUNTS INNOVATION AND CORE+/ABOVE PREMIUM GROWTH IN LOWER-MARGIN ACCELERATION PACKS ENHANCED JOINT BUSINESS PLANNING CAPABILITY ENHANCED REVENUE MANAGEMENT
Slide 65: MC Europe Is Brand-Driven, With Broad And Deep Portfolio Strength
MC EUROPE IS BRAND-DRIVEN, WITH BROAD AND DEEP PORTFOLIO STRENGTH…. INCLUDING PARTNER BRANDS BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL Segment UK Bulgaria Croatia Czech Hungary Montenegro Romania Serbia Above Premium #2 #1 #1 #5 #3 #1 #4 #1 Mainstream #1 #1 #1 #2 #2 #1 #3 #1 Value #5
Slide 66: Our MC Europe Strategic Framework Is Clear And Aligned
OUR MC EUROPE STRATEGIC FRAMEWORK IS CLEAR AND ALIGNED WITH GLOBAL MCBC PRIORITIES GROW CORE • One Way Approach BRANDS • MC Commercial GROW TOP Excellence Program LINE WITH • World Class Supply INNOVATIONS Chain DOUBLE • Engagement and Talent ABOVE PREMIUM Our ambition is to be the fastest-growing b
Slide 67: Carling Has Performed Strongly Over Last 18 Months
CARLING HAS PERFORMED STRONGLY OVER LAST 18 MONTHS Mainstream Lager Carling NEW ADVERTISING ADVERTISING Carling Volume Evolution in the U.K. 15% 13% 10% 9% 7% 5% 3% 2% 1% 1% 0% -5% -2% ON-TRADE FOCUS FLAVORED -6% -5% -10% EXTENSIONS Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Carling Segment Market Share in the U
Slide 68: Commercial #1
• COMMERCIAL #1 68
Slide 69: Ozujsko In Croatia Demonstrates The Strength Of Our Brand-Building Capability
OZUJSKO IN CROATIA DEMONSTRATES THE STRENGTH OF OUR BRAND-BUILDING CAPABILITY Mainstream Lager Ozujsko NEW BOTTLE Ozujsko Volume Evolution in Croatia 8% 6% 6% 4% 3% 2% 2% 2% 0% -2% -1% -4% -6% -4% -5% DIGITAL BRILLIANT EXECUTION -8% -6% -7% -10% -8% Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Ozujsko Segment Mark
Slide 70: Commercial #1
• COMMERCIAL #1 70
Slide 71: Above-Premium And Craft Portfolio Growing Rapidly
ABOVE-PREMIUM AND CRAFT PORTFOLIO GROWING RAPIDLY BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL Above-Premium Beer Sales 1,800 Volume in HL (000s) 1,600 1,400 1,200 1,000 800 600 400 200 0 2011 2012 2013 +27% compound annual growth rate 71
Slide 72: Our Portfolio Is Growing Rapidly – Coors Light
OUR PORTFOLIO IS GROWING RAPIDLY – COORS LIGHT BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL Coors Light U.K. Sales Volume in HL (000s) 800 600 400 200 0 2011 2012 2013 Coors Light has built momentum and scale in the UK, +40% CAGR 72
Slide 73: Our Portfolio Is Growing Rapidly -- Staropramen
OUR PORTFOLIO IS GROWING RAPIDLY -- STAROPRAMEN BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL Europe Sales Volume Outside 500 Czech in HL (000s) 400 300 200 100 0 2011 2012 2013 Staropramen is growing strongly outside of the Czech Republic, +22% CAGR 73
Slide 74: Our Portfolio Is Growing Rapidly – Doom Bar
OUR PORTFOLIO IS GROWING RAPIDLY – DOOM BAR BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL Sales Volume in HL (000s) 300 200 100 0 2011 2012 2013 Doom Bar growing rapidly and became #1 cask ale in the UK On trade, +22% CAGR 74
Slide 75: Innovation Pipeline From 2012 To 2014 Has Driven Improved Portfolio Performance
INNOVATION PIPELINE FROM 2012 TO 2014 HAS DRIVEN IMPROVED PORTFOLIO PERFORMANCE AND MARGIN EXPANSION BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL NEW FLAVORS FLAVORED BEERS PACKAGING INNOVATIONS AND COOLERS BREWERS LEMONADE CIDER SUPER DRY On track to generate 7% of net sales from innova
Slide 76: Performance Is Underpinned By Commercial Excellence, Lifted And Shifted Globally
PERFORMANCE IS UNDERPINNED BY COMMERCIAL EXCELLENCE, WHICH IS NOW BEING LIFTED AND SHIFTED GLOBALLY 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%
Slide 77: Molson Coors Europe Driving Shareholder Value
MOLSON COORS EUROPE DRIVING SHAREHOLDER VALUE • Acquisition and integration has gone smoothly • Synergies ahead of plan • UK and Ireland integration with Central Europe accelerated by 12 months • Positive performance, 2014 started strongly • Brand-driven business with broad and deep portfolio • Stra
Slide 78: Financial Update: Gavin Hattersley, CFO
FINANCIAL UPDATE: GAVIN HATTERSLEY, CFO MOLSON COORS BREWING COMPANY 78
Slide 79: 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 80: 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 $400 $200 $107 ($millions) $55 $0 2005 2006 2007 2008 2009 2010 2011 2012 2013 Q1'13 Q1'14 Pretax income growth over the past 8 years totaled 96% * Non-GAAP underlying
Slide 81: 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 $600 $400 $209 $251 ($millions) $200 $0 2006 2007 2008 2009 2010 2011 2012 2013 Q1'13 Q1'14 2013: +5.1%, to nearly $8 per share; 2014 1st Q: +20.4% 1 Non-GA
Slide 82: 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 82
Slide 83: 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 84: 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 85: 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: $330 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 86: 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 87: 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 $681 $700 $618 $600 $508 $426 $400 $315 $200 ($millions) $0 2006 2007 2008 2009 2010 2011 2012 2013 2014E (1) Very cash genera
Slide 88: Short-Term Cash Use Priority: Deleverage
SHORT-TERM CASH USE PRIORITY: DELEVERAGE BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL 5x 4.4x 4x 3.6x 3.2x 3.0x 3.0x 2.8x 2.9x 3x 2.8x 2.8x 2.9x 2.3x 2x 1.8x 1.6x 1.4x <2x 0.7x 0.8x 0.6x 1x 0x 2006 2007 2008 2009 2010 2011 2012 2013 2015 Pro Forma Goal (1) S&P Adjusted Debt / EBITDA Net
Slide 89: 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 90: 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 91: Peter Swinburn, President & CEO
PETER SWINBURN, PRESIDENT & CEO MOLSON COORS BREWING COMPANY 91
Slide 92: Molson Coors Is Well Positioned To Grow
MOLSON COORS IS WELL POSITIONED TO GROW • The fundamentals of our business are strong and improving • We have a disciplined growth strategy that is yielding improved financial results • We have a strong team that has consistently delivered on its promises • Molson Coors is well positioned to grow as
Slide 93: Molson Coors Brewing Company Annual New York Investor/Analyst Meeting
M O L S O N C O O R S B R E W I N G C O M PA N Y A N N U A L N E W Y O R K I N V E S T O R / A N A LY S T M E E T I N G JUNE 25, 2014 93
Molson Coors Brewing Company — Investor Day (June 2014) on 6ix