Molson Coors Beverage Company · NYSE:TAP
Molson Coors Beverage — Molson Coors Brewing Company — Investor Day (June 2013)
60 slides from Molson Coors Beverage's investor day presentation, Jun 12, 2013
Slide 1: Annual New York Analyst/Investor Meeting
Molson Coors Brewing Company Annual New York Analyst/Investor Meeting June 12, 2013
Slide 2: Peter Swinburn, Chief Executive Officer
Peter Swinburn Chief Executive Officer Molson Coors Brewing Company 2
Slide 3: Forward-Looking Statement
Forward-Looking Statement Forward-Looking Statements: This presentation may include 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 s
Slide 4: Today's Agenda
Today’s Agenda • Peter Swinburn, CEO, Molson Coors − Introductions, strategic overview and growth opportunities • Gavin Hattersley, CFO, Molson Coors − Strategies to grow profit, cash, total shareholder return • Closing Remarks • Q&A with Leadership Team − Peter Swinburn, CEO, Molson Coors − Gavin H
Slide 5: Core Market Strengths + Emerging Global Presence
Molson Coors: Core Market Strengths + Emerging Global Presence EUROPE Carling Kamenitza CANADA Coors Light Ozujsko RUSSIA 39% Share WESTERN EUROPE Staropramen Niksicko Carling Molson Canadian Staropramen Bergenbier Borsodi Staropramen Coors Light Jelen US (MILLERCOORS) JAPAN 29% Share SPAIN Zima Car
Slide 6: Strong Performance Despite Recession
Strong Performance Despite Recession • Generated nearly $750 million in synergies and cost savings since 2008 • Increased our underlying free cash flow generation by 70% from $508 million in 2008 to $865 million in 2012 • Grown EBITDA every year since 2008 • Increased underlying after-tax profit sin
Slide 7: Molson Coors Growth Strategy
Molson Coors Growth Strategy Strong Cost Management Discipline 7
Slide 8: M&A: StarBev Acquisition- Scale, Growth, Returns
M&A: StarBev Acquisition- Scale, Growth, Returns • €2.65 billion ($3.4 billion1) in cash and debt • Under 10.8x EBITDA (2011 PF) • Increases exposure to higher-growth markets with strong historical consumption trends • Market leader with top-three positions in nine countries and a portfolio of brand
Slide 9: Central Europe Enhances Growth/Profit Profile
Central Europe Enhances Growth/Profit Profile 2012 Pro Forma Worldwide Beer Volume 2012 Pro Forma Underlying Operating Income1 4.3% 14.4% 46.6% 38.4% 45.8% 14.0% 21.1% 11.0% 4.9% 2012 Pro Forma Net Sales 2.1% 27.1% 43.4% MillerCoors (42%) 16.8% Central Europe UK 10.8% Canada MCI (1) Does not include
Slide 10: Developing Markets Push: Molson Coors International
Developing Markets Push: Molson Coors International Molson Coors International • Retail volume growth of 59% • Liquidating China JV • Restructured China Coors Light business • Expanding business in India • Integrated Staropramen Export business 10
Slide 11: MCI: Growing Volumes & Reducing Investment
MCI: Growing Volumes & Reducing Investment (000s HL) MCI Total Volume MCI Underlying Pretax Income(Loss)/HL1 $0 2,000 ($5) 1,500 ($10) ($15) 1,000 ($20) ($25) 500 ($30) 0 ($35) 2009 2010 2011 2012 2009 2010 2011 2012 2013 2014 2015 2016 1Non-GAAP underlying pretax income (loss) is calculated by excl
Slide 12: Growth in Developed Markets: Drive Top and Bottom Line
Growth in Developed Markets: Drive Top and Bottom Line US, Canada & Europe • Coors Light grew share in US, UK and Canada • Strengthened above premium portfolio in Canada • Introduced Carling Zest in UK • Purchased Crispin Cider in US • Double digit growth for Tenth & Blake • Double digit growth for
Slide 13: 2012: Mixed Results, Foundation for Growth
2012: Mixed Results, Foundation for Growth • Enterprise (reported) • UK −World Wide Beer Volume: +13.9% −STR Volume: (9.8%) −NSR: +$400.8M or 11.4% −NSR: ($67.2M) or (5.0%) −Underlying Pre Tax Profit: +$44.3M or 5.4% −Underlying Pre Tax Profit: ($41.9M) or (41.3%) • US @ 100% • Central Europe (pro-f
Slide 14: Molson Coors Growth Enablers – 2013 and Beyond
Molson Coors Growth Enablers – 2013 and Beyond Delivering Investing Driving Share Drive Cost Value Behind in Above Savings & Added Power Premium Commercial Innovation Brands Excellence 14
Slide 15: Delivering Value Added Innovation
Delivering Value Added Innovation
Slide 16: $100 Million of Gross Profit from Innovation
$100 Million* of Gross Profit from Innovation Adding News & Excitement Delivering New Options for Behind Core Brands Changing Preferences *Past 3 years (2010-2012) 16
Slide 17: Investing Behind Our Core Brands
Investing Behind Our Core Brands
Slide 18: Coors Light - Owning Rocky Mountain Cold Refreshment Globally
Coors Light - Owning Rocky Mountain Cold Refreshment Globally US Canada UK 18
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Slide 20: “Made from Canada” – Molson Canadian
“Made from Canada” – Molson Canadian Absolute Volume & Market Share – Molson Canadian (000 HL) 20
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Slide 22: Carling Regaining Momentum
“Brilliantly British Refreshment” - Carling Regaining Momentum Absolute Volume & Market Share – Carling UK (000 HL) Carling % Share of Beer 20.0% 15.0% 10.0% 5.0% 0.0% Total Trade On-Trade Off-Trade Q1 2012 Q1 2013 22
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Slide 24: Carling Regaining Momentum
“Brilliantly British Refreshment” - Carling Regaining Momentum Absolute Volume & Market Share – Carling UK (000 HL) Carling % Share of Beer 20.0% 15.0% 10.0% 5.0% 0.0% Total Trade On-Trade Off-Trade Q1 2012 Q1 2013 24
Slide 25: “The Spirit of Prague” - Staropramen
“The Spirit of Prague” - Staropramen Absolute Volume & Market Share– Staropramen (000 HL) 25
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Slide 27: “The Spirit of Prague” - Staropramen
“The Spirit of Prague” - Staropramen Absolute Volume & Market Share– Staropramen (000 HL) 27
Slide 28: A Commitment to Great Taste & Innovation - Miller Lite
A Commitment to Great Taste & Innovation - Miller Lite Absolute Volume & Market Share – Miller Lite (000 HL) 28
Slide 29: Leading Brand Positions Across Central Europe
Leading Brand Positions Across Central Europe Country Flagship Brand Position 2012 Brand Share* Other MCCE Brands Montenegro #1 62% Croatia #1 33% Serbia #1 35% Hungary #1 12% Bulgaria #1 19% Romania #4 8% Czech Republic #3 9% *Market share in total beer 29
Slide 30: Driving Share in Above Premium
Driving Share in Above Premium
Slide 31: America's Largest Craft Brewer - Tenth and Blake
America’s Largest Craft Brewer - Tenth and Blake ® 31 11
Slide 32: New Brand Launches
PROGISITION STYLE Late 1g MOLSON 32
Slide 33: Canada Expands Above Premium Portfolio
Canada Expands Above Premium Portfolio 33
Slide 34: Building AP Portfolio in Europe, Led by UK
Building AP Portfolio in Europe, Led by UK 34
Slide 35: Stronger Focus on Commercial Excellence & Standardization
Stronger Focus on Commercial Excellence & Standardization • Field Sales Execution • Revenue Management • Standardization of Back Office Support • Sustainability Initiatives 35
Slide 36: Key Priorities for Growth for 2013 and Beyond
Key Priorities for Growth for 2013 and Beyond Delivering Investing Drive Cost Driving Share Value Behind Savings & in Above Added Power Commercial Premium Innovation Brands Excellence 36
Slide 37: Gavin Hattersley, Chief Financial Officer
Gavin Hattersley Chief Financial Officer Molson Coors Brewing Company 37
Slide 38: Agenda
Agenda • Historical performance context: − Steady, growing pretax profit, even in difficult times − Strong, stable EBITDA − Substantial cash generation and cash return to shareholders − Growing total shareholder returns • Driving total shareholder returns − Brand-led profit growth − Cash generation
Slide 39: Net Income Variability Masks…
Net Income Variability Masks… ($millions) Net Income Attributable to MCBC $800 $720 $708 $700 $676 $600 $492 $500 $443 $400 $361 $379 $300 $200 $100 $0 2006 2007 2008 2009 2010 2011 2012 U.S. GAAP net income attributable to MCBC 39
Slide 40: …Underlying Earnings Growth in Tough Times…
…Underlying Earnings Growth in Tough Times… ($millions) MCBC Underlying Pretax Income $865 $794 $821 $800 $719 $646 $642 $600 $541 $400 $200 $0 2006 2007 2008 2009 2010 2011 2012 Pretax income growth over the past 7 years totaled 96% Non-GAAP underlying income is calculated by excluding special and
Slide 41: … And Steady, Strong, Growing EBITDA
… And Steady, Strong, Growing EBITDA ($millions) $1,600 Underlying EBITDA* $1,398 $1,400 $1,212 $1,267 $1,200 $1,106 $1,100 $1,091 $1,127 $1,000 $800 $600 $400 $200 $- 2006 2007 2008 2009 2010 2011 2012 Underlying EBITDA per share: +13% in 2012, to nearly $8/share * Non-GAAP underlying EBITDA (Earni
Slide 42: Growing Cash Returns Via Dividends
Growing Cash Returns Via Dividends ($millions) Dividends Paid $250 $1.24 $1.28 (Annual Per Share) $1.08 $200 $0.92 $150 $0.76 $0.64 $0.64 $100 $50 $0 2006 2007 2008 2009 2010 2011 2012 7 year total: $1.2 billion, plus $321 million share repurchases in 2011 42
Slide 43: Upside Potential in Tangible Returns
Upside Potential in Tangible Returns Underlying Return on Tangible Assets* 13.8% 14% 13.0% 13.2% 12.7% 11.9% 12.0% 12.0% 12% 10% 8% 6% 4% 2% 0% 2006 2007 2008 2009 2010 2011 2012 * Non-GAAP underlying Return on Tangible Assets is calculated excluding intangible amortization expense and special and o
Slide 44: Key Focus: Long-Term Total Shareholder Return
Key Focus: Long-Term Total Shareholder Return Index Total Shareholder Return 160 150 140 130 120 110 100 90 80 70 60 2006 2007 2008 2009 2010 2011 2012 May-13 Molson Coors S&P 500 The above graph compares Molson Coors cumulative total stockholder return with the Standard & Poor’s 500 Index. Assumes
Slide 45: Driving TSR with PACC Model
Driving TSR with PACC Model • Core brand investments Brand-Led • Innovation Profit Growth • Cost reductions Profit • Revenue and mix management After Cash • Capital expenditure efficiencies Capital Generation • Working Capital improvements Charge • Disciplined cash use Cash and • Return-driven crite
Slide 46: Molson Coors Growth Enablers – 2013 and Beyond
Molson Coors Growth Brand-Led Profit Cash Cash and Capital Growth Generation Allocation Enablers – 2013 and Beyond Delivering Investing Driving Share Drive Cost Value Behind in Above Savings & Added Power Premium Commercial Innovation Brands Excellence 46
Slide 47: Driving TSR with PACC Model
Driving TSR with PACC Model • Core brand investments Brand-Led • Innovation Profit Growth • Cost reductions Profit • Revenue and mix management After Cash • Capital expenditure efficiencies Capital Generation • Working Capital improvements Charge • Disciplined cash use Cash and • Return-driven crite
Slide 48: >$1 Billion of Cost Reductions Fuel Top-Line and Profit
>$1 Billion of Cost Reductions Brand-Led Profit Cash Cash and Capital Growth Generation Allocation Fuel Top-Lineand Profit ($millions) Cumulative Annualized Cost Savings $1,200 $1,000 $800 $600 $400 $200 $0 2005 2006 2007 2008 2009 2010 2011 2012 Molson Coors 42% of MillerCoors Nearly $1.1 billion o
Slide 49: Ongoing Cost Efficiencies Will Fuel Growth Investments
Ongoing Cost Efficiencies Will Brand-Led Profit Cash Cash and Capital Growth Generation Allocation Fuel Growth Investments • Long-term sustainability − Savings of $40-$60 million/year for at least the next 5 years* − Includes Central Europe deal synergies • Driven through: efficiency and effectivene
Slide 50: Capital Efficiency Drives Cash and Value
Capital Efficiency Drives Cash Brand-Led Profit Cash Generation Cash and Capital Growth Allocation and Value • Capital Spending − 2013 outlook: $450-$500 million* • Business transformation in US • Information systems in Europe • Innovation in Canada, US and Europe • Higher than maintenance capital −
Slide 51: Working Capital and Asset Intensity: $300 Million Target
Working Capital and Asset Brand-Led Profit Cash Generation Cash and Capital Growth Allocation Intensity: $300 Million Target Days Sales Outstanding Days Payables Outstanding 70 70 68 60 66 50 64 40 62 30 60 20 58 10 56 0 2009 2010 2011 2012 2009 2010 2011 2012 Days Inventories Outstanding Cash Conve
Slide 52: Profit, Capital Efficiency/Structure Drive FCF
Profit, Capital Brand-Led Profit Cash Generation Cash and Capital Growth Allocation Efficiency/Structure Drive FCF ($millions) MCBC Underlying Free Cash Flow $1,000 $887 $865 $800 $681 $700 $618 $600 $508 $426 $400 $315 $200 $0 2006 2007 2008 2009 2010 2011 2012 2013F Underlying free cash flow is de
Slide 53: Business Drives Substantial FCF Per Share
Business Drives Substantial Brand-Led Profit Cash Generation Cash and Capital Growth Allocation FCF Per Share MCBC Underlying Free Cash Flow/Share ($millions) $5 $4.73 $4.76 $4 $3.66 $3.32 $3 $2.74 $2.46 $2 $1.74 $1 $0 2006 2007 2008 2009 2010 2011 2012 Underlying free cash flow is defined as operat
Slide 54: Short-Term Cash Use Priority: Deleverage
Short-Term Cash Use Priority: Brand-Led Profit Cash Cash and Capital Growth Generation Allocation Deleverage Debt/EBITDA 5x 4.4x 2 4x 3.6x 3.0x 3.0x 2.9x 2.8x 2.8x 2.9x 2.8x 3x 2x 1.8x 1.6x 1.4x 0.7x 1x 0.8x 0.6x 0x 2006 2007 2008 2009 2010 2011 2012 2015 Pro Forma Goal S&P Reported Debt / EBITDA Ne
Slide 55: Key Value Driver: Disciplined Cash Use
Key Value Driver: Disciplined Brand-Led Profit Cash Cash and Capital Growth Generation Allocation Cash Use • Cash use priorities − Strengthened balance sheet by reducing liabilities − Returning cash to shareholders − Brand-led growth opportunities • Short-medium term focus: Balance sheet, especially
Slide 56: Strong Base, Driving Total Shareholder Return
Strong Base, Driving Total Brand-Led Profit Cash Cash and Capital Growth Generation Allocation Shareholder Return • Historical performance context: − Steady, growing pretax profit, even in difficult times − Strong, stable EBITDA − Substantial cash generation and cash return to shareholders − Growing
Slide 57: Peter Swinburn, Chief Executive Officer
Peter Swinburn Chief Executive Officer Molson Coors Brewing Company 57
Slide 58: Focus on Total Shareholder Return
Focus on Total Shareholder Return Returning Cash TOTAL M&A SHAREHOLDER Top-line RETURN Growth Developing Markets Bottom-line Growth Growth in Developed Markets Building long-term, sustainable shareholder returns through disciplined growth and capital allocation strategy 58
Slide 59: Q&A
Q&A Molson Coors Brewing Company Annual New York Analyst/Investor Meeting June 12, 2013
Slide 60: Annual New York Analyst/Investor Meeting
Molson Coors Brewing Company Annual New York Analyst/Investor Meeting June 12, 2013
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