Constellation Brands, Inc. · NYSE:STZ
Constellation Brands — Q4 2024 Earnings Presentation
36 slides from Constellation Brands's earnings presentation, Apr 11, 2024
Slide 1: Fiscal Year 2024 Financial Results & Fiscal Year 2025 Outlook
FISCAL YEAR 2024 FINANCIAL RESULTS & FISCAL YEAR 2025 OUTLOOK April 11, 2024
Slide 2: Forward-Looking Statements
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
Slide 3: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS 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
Slide 4: Use of Non-GAAP Financial Measures, Disclaimers
USE OF NON-GAAP FINANCIAL MEASURES, DISCLAIMERS, CAUTION REGARDING OUTDATED MATERIAL, AND LOCATION OF DEFINED TERMS This presentation may contain non-GAAP financial measures.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 us
Slide 5: Fiscal Year 2024 Financial Highlights
FISCAL YEAR 2024 FINANCIAL HIGHLIGHTS Enterprise 1 Recognized again as the #1 growth leader among large CPG companies1 Exceeded FY24 net sales growth and EPS guidance Delivered operating cash flow of $2.8B at high of FY24 guidance and free cash flow of $1.5B exceeding FY24 guidance2 Beer Business De
Slide 6: Delivering Against Our Strategic Initiatives in Fiscal Year 2024
DELIVERING AGAINST OUR STRATEGIC INITIATIVES IN FISCAL YEAR 2024 DEVELOP DEPLOY CAPITAL EMPOWER OPERATE IN A WAY CONTINUE TO BUILD CONSUMER-LED IN-LINE WITH ENTERPRISE TO THAT IS GOOD FOR POWERFUL BRANDS INNOVATIONS DISCIPLINED AND ACHIEVE BEST IN BUSINESS AND GOOD THAT PEOPLE LOVE ALIGNED WITH BALA
Slide 7: Fiscal Year 2024 Financial Summary Tables
FISCAL YEAR 2024 FINANCIAL SUMMARY TABLES Operating Net Income (Loss) Adjusted EPS Excluding ENTERPRISE Net Sales Income (Loss) Attributable to CBI EBIT EPS Canopy EIE Fiscal Year 2024 | In millions, except per share data Reported $9,962 $3,170 $1,727 $2,658 $9.39 NA % Change 5% 11% NM NM NM NA Comp
Slide 8: Net Sales FY24 vs FY23 Results
NET SALES FY24 VS FY23 RESULTS FY24 $10B ENTERPRISE VS FY23 +5% Beer Business Wine and Spirits Business $134 $8,163 $1,988 $565 $ MILLIONS $1,949 $(39) Net sales of brands divested in $7,465 FY23 $25 $1,799 $(175) FY23 Wine FY23 Volume Price / 1 FY24 FY23 Volume Price / Mix FY24 Divestiture Organic
Slide 9: Operating Income FY24 vs FY23 Results
OPERATING INCOME FY24 VS FY23 RESULTS REPORTED $3.2B1 | +11% VS FY23 ENTERPRISE COMPARABLE $3.2B1 | +7% VS FY23 Beer Business Wine and Spirits Business $440 $453 $(37) $434 $3,094 $(20) $ MILLIONS $(127) $(12) $(32) CAM of $18 $399 Total FY24 brands MKTG. Total FY24 divested in $16 8.4% of Other SG&
Slide 10: Net Sales FY25 Outlook vs FY24 Results
NET SALES FY25 OUTLOOK VS FY24 RESULTS ENTERPRISE 6% to 7% Growth Beer Business Wine and Spirits Business Price Total YoY Per 1-2% Total YoY Algorithm +7% to +9% Per +MSD% Algorithm $ MILLIONS Total YoY Total YoY –MSD% +MSD% (0.5)% to +0.5% $1,799 $8,163 FY24 Volume Price / Mix FY25 FY24 Volume Pric
Slide 11: Operating Income FY25 Outlook vs FY24 Results
OPERATING INCOME FY25 OUTLOOK VS FY24 RESULTS +10% to +12% REPORTED1 ENTERPRISE +8% to +10% COMPARABLE 1 Beer Business Wine and Spirits Business ~$(20) $399 +10% $ MILLIONS to (11)% +12% to (9)% Total YoY ~9% of Further ~8.5% of Just under -MSD to Net Sales ~16% of details on Net Sales 5% of Net -HS
Slide 12: Beer Business Other COGS Detail
BEER BUSINESS OTHER COGS DETAIL FY24 Results FY25 Outlook Beer Business Other COGS Share of Total % Change YoY Share of Total % Change YoY COGS (absolute basis) COGS (absolute basis) ~Mid-point of Packaging & Raw Materials +16% ~55-60% +MSD to +HSD 55%-60% Logistics Just over 20% +3% ~20% +MSD Labor
Slide 13: Fiscal Year 2024 Results & Fiscal Year 2025 Outlook
FISCAL YEAR 2024 RESULTS & FISCAL YEAR 2025 OUTLOOK (% CHANGE YoY) FY24 Results FY25 Outlook 1 Other FY25 Outlook Considerations Enterprise $10.0B I +5% Enterprise +6% to +7% Net Sales Beer $8.2B | +9% Beer +7% to +9% Beer ~55% of volumes expected in H1 $1.8B | (9%) Reported W&S ~45% of volumes expe
Slide 14: Appendix
Constellati
Slide 15: Defined Terms
DEFINED TERMS
Slide 16: Defined Terms
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 T
Slide 17: Shipment and Depletion Historical Cadence
SHIPMENT AND DEPLETION HISTORICAL CADENCE
Slide 18: Beer Business Historical Shipment Volume Cadence
BEER BUSINESS HISTORICAL SHIPMENT VOLUME CADENCE H1 H1 H1 56% H1 H2 51% 55% H2 H1 H2 55% 50% H2 H2 44% 50% 49% Q2 45% Q2 45% Q2 Q2 Q1 30% Q2 Q3 Q3 Q1 Q1 28% 29% Q3 29% 26% Q3 Q1 27% 27% Q4 Q1 26% Q4 26% 25% 26% Q3 Q4 Q4 24% Q4 23% 23% 22% 23% 23% 21% 20% 21% FY20 FY21 FY22 FY23 FY24 Note: Totals may
Slide 19: Beer Business Historical Depletion Volume Cadence
BEER BUSINESS HISTORICAL DEPLETION VOLUME CADENCE H1 H1 H1 H1 H1 55% 54% 54% 54% 54% H2 H2 H2 H2 H2 45% 46% 46% 46% 46% Q2 Q2 Q2 Q2 Q2 30% Q1 Q3 Q1 29% Q3 Q1 29% Q3 Q1 29% Q3 Q1 29% Q3 25% 24% Q4 25% 25% Q4 25% 25% Q4 25% 25% Q4 25% 25% Q4 21% 21% 21% 21% 21% FY20 FY21 FY22 FY23 FY24 Note: Totals ma
Slide 20: Wine and Spirits Business Historical Shipment Volume Cadence
WINE AND SPIRITS BUSINESS HISTORICAL SHIPMENT VOLUME CADENCE H1 H2 H2 H2 H1 H2 50% H1 53% H1 H2 H1 52% 48% 50% 50% 50% 50% 50% 47% Q3 Q2 Q3 Q4 Q2 Q4 Q2 29% Q1 Q3 Q3 Q1 Q3 Q1 Q2 Q1 Q2 Q4 27% 26% 26% 27% 26% 27% 26% 26% Q1 25% 25% Q4 25% 25% 23% 24% 24% Q4 24% 21% 22% 22% FY20 FY21 FY22 FY23 FY24 Note
Slide 21: Wine and Spirits Business Historical Depletion Volume Cadence
WINE AND SPIRITS BUSINESS HISTORICAL DEPLETION VOLUME CADENCE H2 H1 H2 H1 H1 H2 H1 H1 H2 H2 51% 52% 48% 50% 51% 49% 49% 48% 52% 50% Q4 Q3 Q4 Q2 Q2 Q2 Q1 Q2 Q2 Q3 Q4 Q4 Q1 Q3 27% 27% Q3 Q1 Q3 26% 26% 27% Q1 26% 25% 27% Q1 26% 27% 24% 25% 24% Q4 23% 24% 24% 24% 25% 21% 22% FY20 FY21 FY22 FY23 FY24 Not
Slide 22: Financial Information
FINANCIAL INFORMATION
Slide 23: Condensed Consolidated Balance Sheets
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in millions) (unaudited) February 29, February 28, 2024 2023 ASSETS Current assets: Cash and cash equivalents $ 152.4 $ 133.5 Accounts receivable 832.8 901.6 Inventories 2,078.3 1,898.7 Prepaid expenses and other 666.
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 Years Ended February 29, February 28, February 29, February 28, 2024 2023 2024 2023 Sales $ 2,300.3 $ 2,147.6 $ 10,711.0 $ 10,177.2 Excise taxes (161.
Slide 25: Consolidated Statements of Cash Flows
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (unaudited) Years Ended February 29, February 28, 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ 1,765.2 $ (38.5) Adjustments to reconcile net income (loss) to net cash provided by (us
Slide 26: Consolidated Statements of Cash Flows
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (unaudited) Years Ended February 29, February 28, 2024 2023 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of long-term debt 1,144.4 3,344.9 Principal payments of long-term debt (809.7) (2,15
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 Years Ended February 29, February 28, Percent February 29, February 28, Percent 2024 2023 Change 2024 2023 Change Beer (branded product, 24-pack, 12-ounce case equ
Slide 29: Summarized Segment, Unconsolidated Investments, and 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 Years Ended Februar
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) Transition services agreements activity We recognized costs in connection with transition services agreements related to the previous sale o
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) Years Ended February 29, 2024 February 28, 2023 Income (loss) (Provision for) Income (loss) (Provision for) before income benefit from Effec
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) (1) Comparable adjustments include: (2) Estimated for the Year Actual for the Ending Year Ended February 28, February 29, 2025 2024 Transiti
Slide 36: Free Cash Flow Guidance
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