Slide 1: First Quarter of Fiscal 2021 Earnings Call
First Quarter of Fiscal 2021 Earnings Call September 2, 2020
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains statements, estimates, and projections that are “forward-looking statements” as defined under U.S. federal securities laws. Words such as “aim,” “anticipate,” “aspire,” “believe,” “can,” “continue,” “could,” “envision,” “estimate,” “expect,” “exp
Slide 3: Our Values & Strategy Lead the Way
Our Values & Strategy Lead the Way 3
Slide 4: Shifting Consumer Trends
Shifting Consumer Trends On-premise Closures & Everyday Luxuries Developed vs Emerging Phased Re-Openings From Traditional to Modern Media E-commerce Strength Convenience & Flavor 4
Slide 5: Ready-to-Drink Story
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Slide 6: First Quarter of Fiscal 2021 Highlights
First Quarter of Fiscal 2021 Highlights Net Sales Gross Margin Operating Income & Diluted EPS • Underlying net sales grew 3% (-2% Reported1) • Declined 320bps • Underlying Operating Income grew 15% (+56% Reported1) • Underlying key drivers: ◦ Higher input costs ◦ Geography ◦ A&P phasing largely ◦ Un
Slide 7: Reports Solid First Quarter Results Amidst Continued Uncertainty
Reports Solid First Quarter Results Amidst Continued Uncertainty Reported Acquisitions Foreign Estimated Underlying Change & Divestitures Exchange Net Change In Change (%) (+/-) Impact Distributor (%)* (+/-) Inventories (+/-) Net Sales -2% —% —% 5% 3% Gross Profit -7% —% —% 5% -1% Advertising -33% -
Slide 8: Results Have Improved Except for Travel Retail, but Noise Exists
Results Have Improved Except for Travel Retail, but Noise Exists March & April 2020 Underlying Net Sales Growth 1Q21 Underlying Net Sales Growth U.S. 1% U.S. 9% Developed International (17)% Developed International 12% Emerging (35)% Emerging (3)% Travel Retail (50)% Travel Retail (63)% Note - Chang
Slide 9: First Quarter of Fiscal 2021 Gross Margin
First Quarter of Fiscal 2021Gross Margin 320 bps decline due primarily to unfavorable mix and higher input costs 64.9% (1.1)% 0.3% 61.7% (2.4)% FY20 YTD Price/Mix Cost Foreign Exchange FY21 YTD 9
Slide 10: Fiscal 2021 Outlook
Fiscal 2021 Outlook The company continues to face substantial uncertainty due to the rapidly evolving environment with the COVID-19 pandemic and its effect on the global economy. As a result of this ongoing uncertainty and expected volatility, the company remains unable to provide quantitative guida
Slide 11: Financial Strength
Financial Strength • A1 and A- ratings by Moody's and Standard & Poor’s, respectively • Net Cash position $519M ◦ Cash and cash equivalents: $908M ◦ Short-term borrowings: $389M • $800M undrawn credit facility • $2.3B long-term debt with next maturity January 2023 for $250M 11
Slide 12: Appendix
Appendix NOTHING Better n the
Slide 13: Non-GAAP Reconciliation
Non-GAAP Reconciliation We use certain financial measures in this presentation that are not measures of financial performance under U.S. GAAP. These non-GAAP measures, defined below, should be viewed as supplements to (not substitutes for) our results of operations and other measures reported under
Slide 14: Definitions
Definitions From time to time, to explain our results of operations or to highlight trends and uncertainties affecting our business, we aggregate markets according to stage of economic development as defined by the International Monetary Fund (IMF), and we aggregate brands by spirits category. Below
Slide 15: Definitions
Definitions Other Metrics. • “Depletions.” We generally record revenues when we ship our products to our customers. “Depletions” is a term commonly used in the beverage alcohol industry to describe volume. Depending on the context, “depletions” means either (a) our shipments directly to retail or wh
Slide 16: Reconciliation – March and April 2020 Net Sales Growth by Geographic Area
Reconciliation – March and April 2020 Net Sales Growth by Geographic Area* Estimated Net Change Geographic Area Reported Foreign Exchange (+/-) in Distributor Underlying Inventories (+/-) United States 14% —% -13% 1% Developed International -9% 1% -8% -17% Emerging -34% 5% -5% -35% Travel Retail -50
Slide 17: Reconciliation – First Quarter of Fiscal 2021 Net Sales Growth by Geographic Area
Reconciliation – First Quarter of Fiscal 2021 Net Sales Growth by Geographic Area* Three months ended July 31, 2020 Estimated Net Change in Geographic Area Reported Foreign Exchange (+/-) Underlying Distributor Inventories (+/-) United States 3% —% 5% 9% Developed International 13% -5% 5% 12% Emergi