Constellation Brands, Inc. · NYSE:STZ
Constellation Brands — Q4 2023 Earnings Presentation
26 slides from Constellation Brands's earnings presentation, Apr 6, 2023
Slide 1: Fiscal Year 2023 Financial Results & Fiscal Year 2024 Outlook
FISCAL YEAR 2023 FINANCIAL RESULTS & FISCAL YEAR 2024 OUTLOOK
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 (Cont.)
FORWARD-LOOKING STATEMENTS (CONT.) 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 v
Slide 4: Use of Non-GAAP Financial Measures, Disclaimer, Caution Regarding Outdated Material
USE OF NON-GAAP FINANCIAL MEASURES, DISCLAIMER, CAUTION REGARDINGOUTDATED MATERIAL,AND LOCATION OF DEFINEDTERMS This presentation may contain non-GAAP financial measures. These measures, the purposes for which management uses them, why management believes they are useful to investors, and a reconcil
Slide 5: Fiscal Year 2023 Financial Highlights
FISCAL YEAR 2023 FINANCIAL HIGHLIGHTS Diluted Net Income (Loss) Per Share Net Operating Net Income (Loss) Attributable to CBI Diluted EPS Sales Income Attributable to CBI EBIT (EPS) Excluding Canopy Fiscal Year 2023 (1) | In millions, except per share data Reported $9,453 $2,843 $(71) NA $(0.11) NA
Slide 6: Fiscal Year 2023 Key Takeaways
FISCAL YEAR 2023 KEY TAKEAWAYS COMPANY DELIVERS RECORD NET SALES OF $9.5 BILLION AND IS RECOGNIZED AS A CPG GROWTH LEADER FOR 10TH CONSECUTIVE YEAR (1) BEER BUSINESS DELIVERS 7.5% DEPLETION GROWTH AND OUTPERFORMS NET SALES AND OPERATING INCOME GROWTH OUTLOOK (2) WINE AND SPIRITS BUSINESS FURTHER PRE
Slide 7: Delivering Against Our Strategic Initiatives in Fiscal Year 2023
DELIVERING AGAINST OUR STRATEGIC INITIATIVES IN FISCAL YEAR 2023 FY23 DEPLETION GROWTH (1) 1 CONTINUE TO BUILD POWERFUL BRANDS THAT PEOPLE LOVE • MODELO ESPECIAL: ~9% • CORONA EXTRA: ~4% • PACIFICO: ~30% • MODELO CHELADA BRANDS: ~45% • MEIOMI: ~5% • KIM CRAWFORD: ~7% • THE PRISONER WINE CO.: ~10% •
Slide 8: Beer Business Maintained Its Industry-Leading Performance
BEER BUSINESS MAINTAINED ITS INDUSTRY-LEADING PERFORMANCE FY23 VS FY22 RESULTS ($ IN MILLIONS) FY24 OUTLOOK VS FY23 RESULTS ($ IN MILLIONS) +7% $250 to +9% $464 PRICE TOTAL PRIMARILY PRICE YOY PER 1-2% (TOTAL YOY ALGORITHM ABOVE 1-2% ALGORITHM) TOTAL YOY PER +MSD% ALGORITHM TOTAL FY23 MKTG. $492 9.1
Slide 9: Beer Business Other COGS Affected by Inflationary Pressures
BEER BUSINESS OTHER COGS AFFECTED BY INFLATIONARY PRESSURES FY23 RESULTS FY24 OUTLOOK BEER BUSINESS OTHER COGS SHARE % CHANGE YOY SHARE % CHANGE YOY IMPORT PORTION OF BEER BUSINESS (1) JUST OVER 55% +16% 55-60% PACKAGING & RAW MATERIALS (OF IMPORT PORTION (OF IMPORT PORTION +HSD (+8% PER CASE (2) )
Slide 10: Wine & Spirits Business Continued to Advance Its Strategy
WINE & SPIRITS BUSINESS CONTINUED TO ADVANCE ITS STRATEGY FY23 VS FY22 RESULTS ($ IN MILLIONS) FY24 OUTLOOK VS FY23 RESULTS ($ IN MILLIONS) -0.5% to +0.5% $111 TOTAL YOY FLAT TO TOTAL YOY NET SALES NET SALES +LSD% OF BRANDS OF BRANDS -LSD% DIVESTED IN $(148) DIVESTED IN Q3 FY23 PRIMARILY Q3 FY23 MIX
Slide 11: Fiscal Year 2023 Results & Fiscal Year 2024 Outlook
FISCAL YEAR 2023 RESULTS & FISCAL YEAR 2024 OUTLOOK (% CHANGESYOY) FY23 RESULTS FY24 OUTLOOK OTHER FY24 OUTLOOK CONSIDERATIONS NET SALES Beer: $7.5B | +11% Beer: +7% to +9% Beer: ~55% of volumes expected in H1 W&S: $2.0B | (4%) Reported, W&S: (0.5%) to +0.5% W&S: ~55% of volumes expected in H2 (2%)
Slide 12: Appendix: Defined Terms & Additional Financial Information
APPENDIX DEFINED TERMS & ADDITIONAL FINANCIAL INFORMATION |
Slide 13: 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 2
Slide 14: Condensed Consolidated Balance Sheets
CONDENSED CONSOLIDATED BALANCE SHEETS (in millions) (unaudited) February 28, February 28, 2023 2022 ASSETS Current assets: Cash and cash equivalents $ 133.5 $ 199.4 Accounts receivable 901.6 899.0 Inventories 1,898.7 1,573.2 Prepaid expenses and other 562.3 658.1 Total current assets 3,496.1 3,329.7
Slide 15: Consolidated Statements of Operations
CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share data) (unaudited) Three Months Ended Years Ended February 28, February 28, February 28, February 28, 2023 2022 2023 2022 Sales $ 2,147.6 $ 2,268.8 $ 10,177.2 $ 9,529.1 Excise taxes (149.8) (166.3) (724.6) (708.4) Net sales 1,997.8
Slide 16: Consolidated Statements of Cash Flows
CONSOLIDATED STATEMENTS OF CASH FLOWS in millions) (unaudited) Years Ended February 28, February 28, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ (38.5) $ 1.0 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Unrealized net (gain) loss on
Slide 17: Consolidated Statements of Cash Flows (Continued)
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) | 16
Slide 18: Reconciliation of Reported and Organic Net Sales
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 appropriate. For periods of divestiture, we de
Slide 19: Supplemental Shipment and Depletion Information
SUPPLEMENTAL SHIPMENT AND DEPLETION INFORMATION (in millions) (unaudited) Three Months Ended Years Ended February 28, February 28, Percent February 28, February 28, Percent 2023 2022 Change 2023 2022 Change Beer (branded product, 24-pack, 12-ounce case equivalents) Shipments 78.7 83.2 (5.4%) 389.2 3
Slide 20: Summarized Segment Information
SUMMARIZED SEGMENT INFORMATION (in millions) (unaudited) Management excludes items that affect comparability from its evaluation of the results of each operating segment as these comparable adjustments are not reflective of core operations of the segments. Segment operating performance and the incen
Slide 21: Reconciliations of GAAP to Non-GAAP Financial Measures
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 provided because we use this information in evalua
Slide 22: Reconciliations of GAAP to Non-GAAP Financial Measures (Continued)
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES (CONTINUED) | 21
Slide 23: Reconciliations of GAAP to Non-GAAP Financial Measures (Continued)
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES (CONTINUED) (in millions, except per share data) (unaudited) (7) We recognized costs in connection with transition services agreements related to the previous sale of a portion of our wine and spirits business. (8) We recognized costs in connect
Slide 24: Reconciliations of GAAP to Non-GAAP Financial Measures (Continued)
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES (CONTINUED) | 23
Slide 25: Reconciliations of GAAP to Non-GAAP Financial Measures (Continued)
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES (CONTINUED) (in millions, except per share data) (unaudited) EPS Guidance Range for the Year Ending February 29, 2024 Forecasted EPS (GAAP) $ 11.60 $ 11.90 Comparable adjustments (Non-GAAP)(1) 0.10 0.10 Forecasted comparable EPS, excluding Canop
Slide 26: Reconciliations of GAAP to Non-GAAP Financial Measures (Continued)
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 provide useful information to investors about the