Molson Coors Beverage Company · NYSE:TAP
Molson Coors Beverage — Molson Coors Brewing Company — Deutsche Bank Global Consumer Conference 2018
52 slides from Molson Coors Beverage's conference presentation, Jun 13, 2018
Slide 1: Deutsche Bank Global Consumer Conference
DEUTSCHE BANK GLOBAL CONSUMER CONFERENCE JUNE 13, 2018 1
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation 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 similar expressions identify fo
Slide 3: Corporate Overview and Strategic Focus
Deutsche Bank Global Consumer Conference , JUNE 13, 2018 MARK HUNTER, CEO Corporate Overview and Strategic Focus T R A C E Y J O U B E R T, C F O Strategies to grow profit, cash, total shareholder return CLOSING REMARKS Q&A
Slide 4: Key Takeaways
2018 KEY TAKEAWAYS COMMITTED TO DEBT PAYDOWN ACCELERATE REWARD 2018 GUIDANCE & MAXIMIZING TOP-LINE VIA SHAREHOLDERS DESPITE Q1 CASH, PROTECT COMMERCIAL WITH CAPITAL CHALLENGES BOTTOM-LINE EXCELLENCE RETURNS 4
Slide 5: Molson Coors Today – A Bigger, Better Business
MOLSON COORS TODAY – A BIGGER, BETTER BUSINESS MILLERCOORS TRANSACTION ALMOST DOUBLED COMPANY SIZE Absolute FY 2015 FY 2017 Growth Worldwide Brand 58 million 94 million 62% Volume (HL)* Net Sales* $6.8 billion $11.0 billion 62% Underlying EBITDA $1.3 billion $2.5 billion 88% Underlying FCF $704 mill
Slide 6: Earning More to Drive Value
EARNING MORE TO DRIVE VALUE TRANSACTION STEP CHANGES EBITDA SCALE UNDERLYING EBITDA (1) (USD MILLIONS) 29% $3,000 27% $2,497 $2,500 $2,404 25% $2,000 23% $1,469 $1,471 22.7% $1,500 $1,398 $1,331 $1,267 21.9% 21% $1,000 19.6% 19.8% 19% 19.5% 19.5% 18.9% $500 17% $0 15% 2011 2012 2013 2014 2015 2016PF
Slide 7: Molson Coors 2017
MOLSON COORS 2017 WORLDWIDE UNDERLYING BRAND VOLUME EBITDA Actual 5% (FY 2017) 16% <1% 25% 13% Net Sales $11.0B 62% 8% 71% WW Brand Volume 94M HLs Underlying EBITDA $2.5B USA Canada Europe International Note: Non-GAAP underlying earnings before interest, tax, depreciation and amortization (EBITDA) i
Slide 8: Earn More Use Less Invest Wisely
FOCUS: DELIVERING GROWTH & LONG-TERM SHAREHOLDER VALUE A DISCIPLINED APPROACH TO EARNING MORE, USING LESS AND INVESTING WISELY EARN MORE USE LESS INVEST WISELY BUILD BRAND LED EXTRAORDINARY DRIVE GROWTH BRANDS SYNERGIES OPPORTUNITIES AND COST STRENGTHEN STRENGTHEN SAVINGS BALANCE CUSTOMER EXCELLENCE
Slide 9: The World's Most Refreshing Beer
THE WORLD'S MOST = REFRESHING ge BEER Z af i,
Slide 10: Commercial Excellence Drivers
EARN MORE : COMMERCIAL EXCELLENCE DRIVERS COMMERCIAL EXCELLENCE E N H A N C E D C O M M E R C I A L C A PA B I L I T I E S W I L L D R I V E TO P & B OT TO M L I N E BUILD EXTRAORDINARY STRENGTHEN CUSTOMER DRIVE DISRUPTIVE BRANDS EXCELLENCE GROWTH ENERGIZE CORE BRANDS EXPAND PORTFOLIO GROW ABOVE PRE
Slide 11: Energizing Core Brands
ENERGIZING CORE BRANDS ALMOST HALF OF BEER SOLD IN US, CANADA & EUROPE IS PREMIUM OR PREMIUM LIGHTS (MAINSTREAM) No.2 No.1 No.3 No.2 IMPROVING SHARE TREND IN CANADA GAINING SEGMENT SHARE x14 QS MAINTAINED SHARE POSITION AND #1 POSITION 11 OF LAST 12 Qs OF SEGMENT GROWTH IN THE US 11
Slide 12: Energize U.S. Core Brands – Continue to Grow Share in Premium
EARN MORE ENERGIZE U.S. CORE BRANDS – CONTINUE TO GROW SHARE IN PREMIUM 9.4 24.0 20.0 9.2 9.0 23.5 8.8 19.5 8.6 8.4 23.0 8.2 19.0 8.0 22.5 7.8 7.6 7.4 22.0 18.5 2015 2016 2017 2015 2016 2017 2015 2016 2017 Growing volume, 2017 marked 11th straight Coors Light improved +2.7% in L4 as of 5/26 year of
Slide 13: Commercials-ML, CL
COMMERCIALS‐ML, CL 13 13
Slide 14: National Champions
NATIONAL CHAMPIONS ELEVEN NO.1 OR NO.2 POSITIONS IN CORE MARKET SEGMENTS STAROPRAMEN STAROPRAMEN SLOVAKIA #2 COORS LIGHT MOLSON CZECH #4 CANADA #2 CANADIAN CANADA #4 BORSODI #2 MILLER UK HUNGARY BERGENBIER LITE ROMANIA #2 USA #3 CARLING CZECH CANADA UK #1 SLOVAKIA OZUJSKO HUNGARY CROATIA #1 ROMANIA
Slide 15: Growing Above Premium & Craft
GROWING ABOVE PREMIUM & CRAFT CRAFT, CIDER, FMBS AND IMPORTS CRAFT CIDER FMBS IMPORTS ABOVE PREMIUM BRANDS : 20% OF MCBC PORTFIOLIO AND GROWING AT 21% MCI 82% PORTFOLIO Above Premium % and growth figures based on Full Year 2017 volume 15
Slide 16: Blue Moon Belgian White & Leinenkugel's
EARN MORE ACCELERATE U.S. PERFORMANCE IN ABOVE PREMIUM - CRAFTS Blue Moon L52 weeks ending Belgian White & 5/26/18 Nielsen Leinenkugel’s Summer Shandy are #1 & #3 crafts in the US … And our regional craft brewers continue to +28.6% +60.0% +13.7% +25.0% outperform industry crafts 2017 Q1 18 2017 Q1 1
Slide 17: Building on #2 FMBs Position via Innovation
EARN MORE ACCELERATE U.S. PERFORMANCE IN ABOVE PREMIUM – FLAVORED MALT BEVERAGES, CIDER Building on #2 FMBs position via innovation Ciders - fastest 2.4m growing segment YTD CASES 1.9m CASES 1.4m 3.2m CASES • Crispin is outpacing the industry, CASES led by Crispin Rosé • Crispin Rosé is #4 growth br
Slide 18: Strong 1-2 Punch in Large and Profitable Imports
EARN MORE ACCELERATE U.S. PERFORMANCE IN ABOVE PREMIUM - IMPORTS 21.5 260.2 % change 16.3 15.0 % change 52 wk 52 wk 10.6 9.5 26 wk 26 wk 114.5 13 wk 13 wk 6.1 4 wk 4 wk 49.4 1.9 0.8 16.6 14.9 1.4 -3.1 -2.8 10.6 11.3 10.9 -0.1 -1.9 -2.7 -2.7 -4.1 Corona Modelo Heineken Stella Artois Source: 2018 BMI
Slide 19: Commercials-Sol
COMMERCIALS‐Sol 19 19
Slide 20: Building Global Brands
BUILDING GLOBAL BRANDS ACCELERATING INTERNATIONAL PLANS 50 MARKETS 20 MARKETS 40 MARKETS 5 MARKETS 20+ MARKETS 35 MARKETS NEW VISUAL IDENTITY ROLLED NEW VISUAL ID DRIVING DOUBLE IN ITS 5th YEAR, MGD MUSIC COORS LIGHT +5% GROWTH ACCELERATION OF BLUE OUT IN 20 COUNTRIES DIGIT GROWTH (OUTSIDE CZ) SUPPO
Slide 21: Customer Excellence
dacs daca ci a cae BE hs he bs he hs f ey
Slide 22: Strengthening Customer Excellence
STRENGTHENING CUSTOMER EXCELLENCE MOLSON COORS ADVANTAGE - BUSINESS BUILDING FOR CUSTOMERS 70+ CATEGORY CAPTAINCIES & 30 SUPPLIER AWARDS IN 2 YEARS SURVEY No.1 RANKED #1 IN TAMARRON 2 YEARS RUNNING 22
Slide 23: Customer Excellence in Action
CUSTOMER EXCELLENCE IN ACTION DRIVING PROFITABLE CATEGORY GROWTH BUILDING FOUNDATIONS FOR GROWTH WITH AMAZON BEST IN CLASS UK ONLINE PARTNERSHIP +132% +120% +37% +223% +31% BEER CATEGORY VOLUME TURNAROUND IN LCBO EUROPE : FIRST CO-BRANDED SOLUTION WITH NESTLE 23
Slide 24: Drive Disruptive Growth
DRIVE DISRUPTIVE GROWTH
Slide 25: Expanding Portfolio
EXPANDING PORTFOLIO DRIVING & EXPANDING CATEGORY VALUE GROW THE BEER CATEGORY GROW SHARE OF BEER/FMB/CIDER ENHANCING CONSUMER & CUSTOMER EXPERIENCE ENHANCING CONSUMER & CUSTOMER EXPERIENCE GROW BEYOND BEER CREATE VALUE IN SUPPLY CHAIN BREWED, FERMENTED OR DISTILLED BREWING PROCESS INNOVATION ? 25
Slide 26: Accelerating International Growth
ACCELERATING INTERNATIONAL GROWTH MOLSON COORS INTERNATIONAL – GROWING CONTRIBUTOR TO TOP & BOTTOM-LINE CONSUMER EXCELLENCE CUSTOMER EXCELLENCE GROW FOCUS BRANDS GROW EMERGING BRANDS OPTIMIZE ROUTEROUTE TO EARN MORE IN OPTIMIZE EXPLORE SUPPLY CHAIN AGGRESSIVELY SELECTIVELY TO MARKET MARKET FOCUS MAR
Slide 27: Progress to $20-25 Million EBITDA
ACCELERATING INTERNATIONAL GROWTH PROGRESS TO $20-25 MILLION EBITDA Underlying EBITDA ($ millions) ($29.1) Q1 2018 Results E INTERNATIONAL FOCUS BRANDS 27
Slide 28: Earn More Use Less Invest Wisely
FOCUS: DELIVERING GROWTH & LONG-TERM SHAREHOLDER VALUE A DISCIPLINED APPROACH TO EARNING MORE, USING LESS AND INVESTING WISELY EARN MORE USE LESS INVEST WISELY BUILD BRAND LED EXTRAORDINARY DRIVE GROWTH BRANDS SYNERGIES OPPORTUNITIES AND COST STRENGTHEN STRENGTHEN SAVINGS BALANCE CUSTOMER EXCELLENCE
Slide 29: Leading Through Tough Times: UK Case Study
DISCIPLINED APPROACH LEADING THROUGH TOUGH TIMES : UK CASE STUDY UK BEER VOLUME SITUATION 2007 2008 2009 2010 2011 2012 (3.6%) (5.1%) (4.0%) (3.5%) (2.3%) (5.1%) DECLINED (21.5%) OVER SIX YEARS (2007-2012) EARN MORE USE LESS INVEST WISELY RESPONSE Reshape Portfolio 2009+ 2008+ UK Supply Reset Custom
Slide 30: Tracey Joubert, CFO
TRACEY JOUBERT, CFO 30
Slide 31: Earn More Use Less Invest Wisely
FOCUS: DELIVERING GROWTH & LONG-TERM SHAREHOLDER VALUE A DISCIPLINED APPROACH TO EARNING MORE, USING LESS AND INVESTING WISELY EARN MORE USE LESS INVEST WISELY BUILD BRAND LED EXTRAORDINARY DRIVE GROWTH BRANDS SYNERGIES OPPORTUNITIES AND COST STRENGTHEN STRENGTHEN SAVINGS CUSTOMER BALANCE EXCELLENCE
Slide 32: Earning More
EARNING MORE STRONG, STABLE FCF AND EBITDA PERFORMANCE (UNDERLYING) UNDERLYING EBITDA (1) UNDERLYING FREE CASH FLOW (USD MILLIONS) (USD MILLIONS) 29% $3,000 $1,500 $2,497 27% $2,500 $2,404 $1,449 +/‐ 10% 25% $2,000 23% $1,469 $1,471 $1,500 $1,398 $1,331 22.7% $864 $1,267 21% 21.9% $1,000 19.6% 19.8%
Slide 33: Committed to Guidance
COMMITTED TO GUIDANCE 2018 AND BEYOND MEDIUM-TERM EBITDA MARGIN UNCHANGED +30-60bps annual average over 3-4 years 2018 COGS/HL UNCHANGED but inflationary pressures remain COST SAVINGS UNCHANGED $210 million (part of 2017-2019 savings target of $600m) 2018 UNDERLYING FCF UNCHANGED $1.5 billion +/- 10
Slide 34: Use Less
USE LESS
Slide 35: $600 Million Cost Savings
USE LESS D R I V I N G T H E B OT TO M - L I N E BY E X PA N D I N G E B I T D A M A R G I N E N H A N C E D C O M M E R C I A L C A PA B I L I T I E S W I L L D R I V E TO P & B OT TO M L I N E EARN MORE USE LESS INVEST WISELY DRIVE SYNERGIES & COST SAVINGS INCREASE PRODUCTIVITY N. AMERICA SUPPLY C
Slide 36: Drive Synergies and Cost Savings
DRIVE SYNERGIES AND COST SAVINGS C O S T S AV I N G S P R O G R A M 2017-2019 $600 3 YEAR PROGRAM ESTIMATED COST SAVINGS million PROGRAM SAVINGS DRIVERS TARGET OF $600M $135 • Improved efficiency in million N. AMERICA SUPPLY CHAIN cost to capture savings 2018E 40% • Cost to capture of $250m $210 • ~
Slide 37: U.S.: Use Less, Invest Wisely
U.S.: USE LESS, INVEST WISELY REDUCING COSTS WHILE MAINTAINING MARKETPLACE PRESSURE MAINTAINING MARKETPLACE PRESSURE WITH REDUCING MG&A SMARTER, MORE EFFICIENT MARKETING INVESTMENT MG&A Expense YR3 Benefit YR2 Benefit YR1 Benefit 2015 2016 2017 2015 Pro forma 2016 Pro forma 2017 Cumulative % EBITDA
Slide 38: Productivity Drivers
PRODUCTIVITY DRIVERS DRIVING GLOBAL EFFICIENCIES VIA SUPPLY CHAIN A LOWER COST, MORE EFFICIENT SUPPLY CHAIN WCSC 2.0 WILL DELIVER ‘ONE WAY’ BUSINESS RESULTS US BUSINESS UNIT Brewery rationalization -Closed Eden, North Carolina, Q3 2016 CANADA BUSINESS UNIT 2 greenfield breweries -British Columbia br
Slide 39: GBS Roadmap
PRODUCTIVITY DRIVERS IMPROVING SCALE AND VALUE WITH GLOBAL BUSINESS SERVICES (GBS) GBS CENTERS CONTRIBUTING NEAR & LONG TERM OPPORTUNITIES ARE OPEN IN TO CURRENT TO IMPROVE SCALE & VALUE BUCHAREST, AND FUTURE • Finance • Commercial ROMANIA and SAVINGS • Supply Chain • HR MILWAUKEE, WI • Data • Repor
Slide 40: Improving Working Capital
I M P R O V I N G W O R K I N G C A P I TA L A S % O F N E T S A L E S TRACK RECORD OF IMPROVING WORKING CAPITAL & DRIVING HIGHER CASH RETURNS 15% Consistently driving WORKING 2012 working capital 10% improvements CAPITAL since 2012 Expecting $100m in additional 2013 5% 2014 improvement by the end o
Slide 41: Capital Allocation
I N V E S T W I S E LY CAPITAL ALLOCATION
Slide 42: Capital Allocation Priorities
INVEST WISELY DRIVING SHAREHOLDER RETURN EARN MORE USE LESS INVEST WISELY CAPITAL ALLOCATION PRIORITIES BRAND LED GROWTH STRENGTHEN RETURN CASH TO OPPORTUNITIES BALANCE SHEET SHAREHOLDERS Underpinned by PACC model 42
Slide 43: Cash Use Priorities
I N V E S T W I S E LY C L E A R C A P I TA L A L L O C AT I O N P R I O R I T I E S CASH USE PRIORITIES USE LESS INVEST WISELY BRAND GROWTH STRENGTHEN RETURN CASH TO OPPORTUNITIES BALANCE SHEET SHAREHOLDERS Invest in organic Maintain Reward existing growth and investment grade shareholders via cons
Slide 44: Focus on Paying Down Debt
STRENGTHEN BAL ANCE SHEET FOCUS ON PAYING DOWN DEBT S&P, MOODY’S DEBT / EBITDA 6x S&P 5.3x 5.1x Moody's 5x Net debt reduced by 4.7x 4.4x 4.4x 4.3x >$1.5 billion ~4x 4x ~3.75x 3.0x COMMITMENT TO MAINTAINING 3x 2.8x 2.6x 2.4x 2.1x 2.2x 2x INVESTMENT- 1x GRADE RATING 0x 2012 2013 2014 2015 2016 PF 2017
Slide 45: Return Cash to Shareholders
R E T U R N C A S H TO S H A R E H O L D E R S STRONG TRACK RECORD $2.00 DIVIDENDS PAID (ANNUAL PER SHARE) $1.80 $1.64 $1.64 $1.64 $1.60 $1.48 $1.40 $1.24 $1.28 $1.28 $1.20 $1.08 $1.00 $0.92 $0.80 $0.76 $0.64 $0.60 $0.40 $0.20 $0.00 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 45
Slide 46: Reinstitute Dividend Payout Ratio
R E T U R N C A S H TO S H A R E H O L D E R S R E I N S T I T U T E D I V I D E N D PAY O U T R AT I O We expect a Dividend Payout Ratio of 20%-25% of trailing annual underlying EBITDA after achieving ~3.75x leverage around mid 2019 • ~40% to ~75% higher than the current level (using FY’17 underlyi
Slide 47: Stepping Dividend Up to Competitive Payout
RETURN CASH TO SHAREHOLDERS STEPPING DIVIDEND UP TO COMPETITIVE PAYOUT Step up to Expected future EBITDA pay 65% above average out ratio implies underlying net income payout ratio of AVERAGE 57% for peer group PAYOUTS 50%-65% 50% 37% 36% CONSUMER GOODS BEER & SPRITS TODAY FUTURE TODAY TODAY Note: Mo
Slide 48: Earn More Use Less Invest Wisely
FOCUS: DELIVERING GROWTH & LONG-TERM SHAREHOLDER VALUE A DISCIPLINED APPROACH TO EARNING MORE, USING LESS AND INVESTING WISELY EARN MORE USE LESS INVEST WISELY BUILD BRAND LED EXTRAORDINARY DRIVE GROWTH BRANDS SYNERGIES OPPORTUNITIES AND COST STRENGTHEN STRENGTHEN SAVINGS BALANCE CUSTOMER EXCELLENCE
Slide 49: Mark Hunter, CEO
MARK HUNTER, CEO 49
Slide 50: Earn More Use Less Invest Wisely
FOCUS: DELIVERING GROWTH & LONG-TERM SHAREHOLDER VALUE A DISCIPLINED APPROACH TO EARNING MORE, USING LESS AND INVESTING WISELY EARN MORE USE LESS INVEST WISELY BUILD BRAND LED EXTRAORDINARY DRIVE GROWTH BRANDS SYNERGIES OPPORTUNITIES AND COST STRENGTHEN STRENGTHEN SAVINGS BALANCE CUSTOMER EXCELLENCE
Slide 51: Key Takeaways
2018 KEY TAKEAWAYS COMMITTED TO DEBT PAYDOWN IMPROVE THE REWARD 2018 GUIDANCE & MAXIMIZING TOP-LINE VIA SHAREHOLDERS DESPITE Q1 CASH, PROTECT COMMERCIAL WITH CAPITAL CHALLENGES BOTTOM-LINE EXCELLENCE RETURNS 51
Slide 52: Deutsche Bank Global Consumer Conference
DEUTSCHE BANK GLOBAL CONSUMER CONFERENCE JUNE 13, 2018 52
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