Molson Coors Beverage Company · NYSE:TAP
Molson Coors Beverage — Molson Coors Brewing Company — 2015 Barclays Consumer Staples Conference
46 slides from Molson Coors Beverage's conference presentation, Sep 10, 2015
Slide 1: Molson Coors Brewing Company
M O L S O N C O O R S B R E W I N G C O M PA N Y 2 0 1 5 B A R C L AY S C O N S U M E R S TA P L E S C O N F E R E N C E SEPTEMBER 10, 2015 1
Slide 2: Mark Hunter, President & CEO
MARK HUNTER, PRESIDENT & CEO MOLSON COORS BREWING COMPANY 2
Slide 3: Forward Looking Statement
FORWARD LOOKING STATEMENT 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 for
Slide 4: Molson Coors Overview
MOLSON COORS OVERVIEW UNITED STATES (42%) CANADA EUROPE INTERNATIONAL MARKETS 31% 36% 24% 14% 30% Worldwide 21% Underlying 5% 2014 FY Beer Net Sales(1) 2% Pretax Volume Income(2) 46% 44% 48% Totals may not sum due to rounding. (1) Excludes Corporate and Eliminations from the total. (2) Does not incl
Slide 5: #1 or #2 Market & Brand Positions
#1 OR #2 MARKET & BRAND POSITIONS IN MOST OF OUR MARKETS Market Market Position* Brand Position* Brand USA #2 #2 & #4 Coors Light, Miller Lite Canada #2 #2 & #3 Coors Light, Molson Canadian UK #2 #1 Carling Czech Republic #2 #4 Staropramen Croatia #1 #1 Ozujsko Serbia #1 #1 Jelen Bulgaria #1 #1 Kame
Slide 6: A Strong Record of Long-Term Shareholder Returns
A STRONG RECORD OF LONG-TERM SHAREHOLDER RETURNS • Gaining traction against our commercial strategy • Continue improving the efficiency of our operations • Strategic discipline driving improved financial performance TSR TAP Shares 5 year 78% 3 year 64% 1 year (6%) Total Shareholder Return (TSR) = TA
Slide 7: Our Strategic Platforms Drive Our Business Priorities
OUR STRATEGIC PLATFORMS DRIVE OUR BUSINESS PRIORITIES Develop Build Delight Fuel Great Extraordinary Customers Growth People Brands Molson Coors Consumer Customer Commercial Excellence Excellence Excellence Program 7
Slide 8: Our Strategic Platforms Drive Our Business Priorities
OUR STRATEGIC PLATFORMS DRIVE OUR BUSINESS PRIORITIES AND DEFINE OUR OPERATING MODEL…THE MCBC BREWHOUSE 8
Slide 9: Building Extraordinary Brands
BUILDING EXTRAORDINARY BRANDS ENERGIZING OUR CORE BRANDS 9
Slide 10: Mainstream Premium Segment and Our Core Brands
MAINSTREAM PREMIUM SEGMENT AND OUR CORE BRANDS REMAIN THE ECONOMIC ENGINE • Premium or premium light beers: • Nearly half of US and Canada industry volumes • More than 60% of Europe market • US premium lights: • Include the #1, #2 and #4 beer brands • More than 3 times craft • Coors Light and Miller
Slide 11: Coors Light Emerging as a Global Brand
COORS LIGHT EMERGING AS A GLOBAL BRAND • Available in over 30 countries • One of the largest global brands • Distinctive Rocky Mountain Cold Refreshment positioning Global Volume • Strong historical growth across International markets • MCI + UK & Ireland growth of Europe and International 30% since
Slide 12: Commercial - New Coors Light Ad
• COMMERCIAL – New Coors Light Ad 12
Slide 13: Coors Banquet Growing Strongly
COORS BANQUET GROWING STRONGLY IN UNITED STATES AND CANADA • 9 years of unbroken growth in US • Share growth in Canada and US • Return to western roots: Volume Timeless western masculinity • Quality ingredients, brewing story • Distinctive advertising campaign Canada • Heritage packaging, stubby bot
Slide 14: Miller Lite Stabilizing and Recovering
MILLER LITE STABILIZING AND RECOVERING • The original: established the category in 1975 • Authentic, timeless • Brewed to be a great tasting light Miller Lite Market Share of Segment* pilsner 19.2% • Full visual ID makeover 19.0% 18.8% • “As long as you are you, it’s Miller Time” 18.6% 18.4% 18.2% 1
Slide 15: Molson Canadian Leading the Category in Social Engagement
MOLSON CANADIAN LEADING THE CATEGORY IN SOCIAL ENGAGEMENT • Strong creative execution and integrated supporting programs • Expanded distribution to Quebec • Building brand reach through Molson Canadian Market innovation – Molson Canadian 67 Share of Segment* and Molson Canadian Cider 13.5% • Fully l
Slide 16: Carling Growing & Maintaining Share
CARLING GROWING & MAINTAINING SHARE • UK’s #1 beer brand for 40 years • Strong momentum in Scotland and Ireland Carling Market Share* - UK • Building brand reach through innovation 31.5% – Carling Zest and Carling Cider 31.0% 30.5% 30.0% 29.5% 29.0% 28.5% 2012 2013 2014 Source: UK Industry Data * Sh
Slide 17: Building Extraordinary Brands Driving Share
BUILDING EXTRAORDINARY BRANDS DRIVING SHARE IN ABOVE PREMIUM, CRAFT & CIDER 17
Slide 18: Leading Global Craft Portfolio
LEADING GLOBAL CRAFT PORTFOLIO • #1 CRAFT BREWER in the US with Tenth and Blake • #1 CRAFT BRAND in the US with Blue Moon • #1 SHANDY in the US with Leinenkugel’s • #1 CASK ALE in the UK with Doom Bar • #1 CRAFT BRAND in Ireland with Franciscan Well • LEADING CRAFT BRANDS in Canada with Creemore and
Slide 19: America's Largest Craft Brewer
AMERICA’S LARGEST CRAFT BREWER – TENTH AND BLAKE Blue Moon Volume (STRs) 2009 2010 2011 2012 2013 2014 ® 19
Slide 20: Leading with UK's #1 Cask Brand
LEADING WITH UK’S #1 CASK BRAND AND IRELAND’S # 1 CRAFT BRAND Over the past 3 years, Doom Bar has grown over 80% Doom Bar Volume (HLs) 2011 2012 2013 2014 20
Slide 21: Canada's Craft & Above Premium Portfolio
CANADA’S CRAFT & ABOVE PREMIUM PORTFOLIO Canada Expands Above Premium Portfolio BUILDING MOMENTUM Over the past 5 years, Creemore has grown more than 50% Creemore Volume (HLs) 2010 2011 2012 2013 2014 21
Slide 22: Tapping into Flavor and New Occasions
TAPPING INTO FLAVOR AND NEW OCCASIONS 22
Slide 23: MillerCoors Is a Leader in FMBs
MILLERCOORS IS A LEADER IN FMBS US Market Share of FMBs 25% 20% 15% 10% 5% 0% 2013 2014 YTD 2015 Growing at nearly 60% Redd’s Volume (HLs) Data source: Nielsen cross-channel (YTD is to 8/8/15) 2013 2014 23
Slide 24: We Have Established Cider in All Key Markets
WE HAVE ESTABLISHED CIDER IN ALL KEY MARKETS WITH EXPANSION IN 2015 UK CANADA USA CE Total Cider market 2014 9.5M 0.3M 1.3M 0.1M (HL) MCBC share 1.2% 23% 11% 30% 2014 2015 Innovation Current portfolio Source: Euromonitor, 2014-2017, Globe 24
Slide 25: Building Our International Brand Portfolio
BUILDING OUR INTERNATIONAL BRAND PORTFOLIO 25
Slide 26: Coors Light and Staropramen Lead MCI Portfolio
COORS LIGHT AND STAROPRAMEN LEAD MCI PORTFOLIO Core CL markets: Core MCI Staropramen Mexico, Central markets: America/Caribbean, Ukraine, Sweden, Russia, S. America , China, Germany, UK, US Japan, and Australia 26
Slide 27: MCI Momentum Toward Breakeven Is Building
MCI MOMENTUM TOWARD BREAKEVEN IS BUILDING Volume Underlying Pretax/HL(1) (000 HL) 3,000 $0 5Yr CAGR +33% ($5) 2,500 ($10) 2,000 ($15) 1,500 ($20) 1,000 ($25) 500 ($30) 0 ($35) 2009 2010 2011 2012 2013 2014 2009 2010 2011 2012 2013 2014 MCI to contribute to top and bottom line beyond 2016 1 Non-GAAP
Slide 28: Delighting Our Customers
DELIGHTING OUR CUSTOMERS VIA GREAT QUALITY, STRONG PARTNERSHIPS AND BRILLIANT EXECUTION 28
Slide 29: Adding Capabilities at the Front End of Our Business
ADDING CAPABILITIES AT THE FRONT END OF OUR BUSINESS TO MEET THE EVOLVING CUSTOMER LANDSCAPE Customer Expectations1… Our Response1… “Understand our strategy and 76% commercial model” Commercial Excellence Capabilities “Launch innovation that 64% contributes to category growth” 1. Field Sales Managem
Slide 30: Sharpening & Energizing Performance Through Field Sales Management
SHARPENING & ENERGIZING PERFORMANCE THROUGH FIELD SALES MANAGEMENT (FSM) • Standard sales force processes implemented in Canada and UK • 630 front-line Canadian and UK sales force now operating FSM • Successful deployment of SAP ReX, sales force automation & iPads • Route planning helping to reduce
Slide 31: Driving Customer Value Through Revenue and Partner Management
DRIVING CUSTOMER VALUE THROUGH REVENUE AND PARTNER MANAGEMENT Revenue Management • Improved pricing capability and discipline • Leveraging mix management • Optimizing trade promotion • Improved global support tools Partner Management • Improved customer engagement, including increased category capta
Slide 32: Delivering a World Class Supply Chain & Infrastructure
DELIVERING A WORLD CLASS SUPPLY CHAIN & INFRASTRUCTURE UK Supply Chain Master Plan Canadian Supply Chain Network of the Future MillerCoors Business Transformation Molson Coors One Way Approach World Class Supply Chain Molson Coors Commercial Excellence Program Delivering increased effici
Slide 33: Fuel Growth: Gavin Hattersley, CFO
FUEL GROWTH: GAVIN HATTERSLEY, CFO MOLSON COORS BREWING COMPANY 33
Slide 34: Choice for Consumers & Customers
CHOICE FOR CONSUMERS & CUSTOMERS 34
Slide 35: Driving Total Shareholder Return with PACC Model
DRIVING TOTAL SHAREHOLDER RETURN WITH PACC MODEL • Investing behind core brands BRAND-LED • Driving share in above premium PROFIT • Delivering value-added innovation GROWTH • Commercial excellence PROFIT AFTER • Cost reductions CAPITAL CHARGE • Capital expenditure driving CASH efficiencies GENERATIO
Slide 36: Driving Total Shareholder Return with PACC Model
DRIVING TOTAL SHAREHOLDER RETURN WITH PACC MODEL EARN MORE PROFIT AFTER CAPITAL CHARGE USE LESS (TSR) TOTAL SHAREHOLDER RETURN INVEST WISELY 36
Slide 37: Underlying Earnings Growth Even in Tough Times
UNDERLYING EARNINGS GROWTH EVEN IN TOUGH TIMES… EARN MORE USE LESS INVEST WISELY MCBC Underlying Pretax Income (1) $904 $865 $865 $794 $821 $800 $719 $646 $642 $600 $541 $441 $400 $200 ($millions) $0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Underlying pretax income growth over the past 9 ye
Slide 38: And Steady, Strong, Growing EBITDA
…AND STEADY, STRONG, GROWING EBITDA EARN MORE USE LESS INVEST WISELY Underlying EBITDA(1) $1,600 $1,469 $1,471 $1,398 $1,400 $1,267 $1,212 $1,200 $1,106 $1,100 $1,091 $1,127 $1,000 $800 $600 $400 ($millions) $200 $0 2006 2007 2008 2009 2010 2011 2012 2013 2014 Nearly $8 per share (2014) (1) Non-GAAP
Slide 39: Cost Reductions Help to Drive Top Line and Bottom Line
COST REDUCTIONS HELP TO DRIVE TOP LINE AND BOTTOM LINE EARN MORE USE LESS INVEST WISELY Cumulative Annualized Cost Savings (1) $1,400 $1,333 $1,195 $1,200 $1,078 $1,000 $958 $851 $800 $657 $600 $442 $400 $331 ($millions) $185 $200 $81 $0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 More than $1
Slide 40: Ongoing Cost Efficiencies Will Fuel Growth Investments
ONGOING COST EFFICIENCIES WILL FUEL GROWTH INVESTMENTS EARN MORE USE LESS INVEST WISELY Long-term sustainability • Captured more than $70 million of savings in 2013 and 2014(1) • Expect cost savings of $40-$60 million/year for at least the next 3 years(1) Driven through efficiency and effectiveness
Slide 41: Increasing Working Capital Efficiency
INCREASING WORKING CAPITAL EFFICIENCY EARN MORE USE LESS INVEST WISELY Days Sales Outstanding Days Payables Outstanding 70 62 100 52 90 60 46 86 50 90 40 76 80 30 20 70 10 0 60 2012 2013 2014 2012 2013 2014 Days Inventory Outstanding Cash Conversion Cycle (1) 34 33 30 19 33 20 32 10 31 30 0 29 30 -1
Slide 42: Disciplined Cash Use
DISCIPLINED CASH USE EARN MORE USE LESS INVEST WISELY Cash use priorities 1. Strengthen balance sheet by reducing liabilities • 2014: $796 million reduction in net debt, $75 million of pension contributions(1) • 2015: $227 million discretionary UK pension contribution and $73-93 million of other pen
Slide 43: Growing Cash Returns via Dividends and Stock Repurchases
GROWING CASH RETURNS VIA DIVIDENDS AND STOCK REPURCHASES Dividends Paid (Annual Per Share) $1.64 $1.48 $1.50 $1.24 $1.28 $1.28 $1.08 $1.00 $0.92 $0.76 $0.64 $0.64 (dividend per share) $0.50 $0.00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E Stock repurchases: $321 million in 2011 and $100 mill
Slide 44: Mark Hunter, President & CEO
MARK HUNTER, PRESIDENT & CEO MOLSON COORS BREWING COMPANY 44
Slide 45: Well Positioned to Deliver Growth & Total Shareholder Value
WELL POSITIONED TO DELIVER GROWTH & TOTAL SHAREHOLDER VALUE • Investing behind core brands BRAND-LED • Driving share in above premium PROFIT • Delivering value-added innovation GROWTH • Commercial excellence PROFIT AFTER • Cost reductions CAPITAL CHARGE • Capital expenditure driving CASH efficiencie
Slide 46: Molson Coors Brewing Company
M O L S O N C O O R S B R E W I N G C O M PA N Y 2 0 1 5 B A R C L AY S C O N S U M E R S TA P L E S C O N F E R E N C E SEPTEMBER 10, 2015 46
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