Slide 1: MillerCoors seminar
MillerCoors seminar Leo Kiely, Chief Executive Officer MillerCoors Gavin Hattersley, Chief Financial Officer MillerCoors Ed McBrien, President of Sales MillerCoors Gary Leibowitz, SVP Investor Relations, SABMiller Dave Dunnewald, VP Global Investor Relations, MCBC New York, December 2, 2010
Slide 2: Forward looking statements
Forward looking statements This presentation includes „forward-looking statements‟. These statements contain the words “anticipate”, “believe”, “intend”, “estimate”, “expect” and words of similar meaning. All statements other than statements of historical facts included in this presentation, includi
Slide 3: Our speakers today: Leo Kiely
Our speakers today Leo Kiely (1993) 2008 President and Chief Executive Officer, MillerCoors 2005 President and Chief Executive Officer, Molson Coors Brewing Company 2000 Chief Executive Officer, Coors Brewing Company 1993 Chief Operating Officer, Coors Brewing Company MillerCoors Seminar November De
Slide 4: Our speakers today: Gavin Hattersley
Our speakers today Gavin Hattersley (1997) 2010 Executive Vice President and Chief Financial Officer , MillerCoors 2008 Chief Financial Officer, MillerCoors 2002 Senior Vice President, Finance, Miller Brewing Company 1999 Chief Financial Officer, SAB Limited, South Africa 1997 Joined SAB Limited 198
Slide 5: Our speakers today: Ed McBrien
Our speakers today Ed McBrien (1994) 2010 President, Sales and Distributor Operations - MillerCoors 2008 President, Western Division Sales - MillerCoors 2005 Chief Revenue Officer - Coors Brewing Company 2003 Vice President and General Manager, National Accounts - Coors Brewing Company 1999 Vice Pre
Slide 6: North America in context
North America in context North America – a significant contributor to group EBITA** Twelve months to 30 September 2010 Volumes* Revenue EBITA** 16% 19% 15% 11% 12% 11% 17% 16% 20% 2% 7% 19% 21% 22% 20% 23% 32% 17% Latin America Europe North America Africa Asia South Africa * Excludes contract brewin
Slide 7: North America in context
North America in context Stronger organization 800 ROIC > WACC 16% 700 14% 600 12% EBITA margin on gross revenue More effective brand marketing & innovation 500 10% $million EBITA 400 8% 300 6% Stronger chain and field sales capabilities 200 4% 100 2% 0 0% Better cost efficiency F06 F07 F08
Slide 8: SABMiller Investor Relations Seminar
SABMiller Investor Relations Seminar Leo Kiely, Chief Executive Officer Gavin Hattersley, Chief Financial Officer Ed McBrien, President of Sales
Slide 9: © MillerCoors:
© MillerCoors:
Slide 10: 2008 – 2010 Recap
What we’ve accomplished 2008 – 2010 Recap Synergy Savings: $500 million Cost Savings: $250 million On target Merged brewery networks Created best team in beer Delivered successful, business-driving innovations Created local market model Created successful chain team Created Tenth and B
Slide 11: MillerCoors Outperforms CPGs
MillerCoors Outperforms CPGs Percentage Change in Operating Income vs. Prior Year Wine & Spirits Division Source: Company 10Ks and quarterly earnings
Slide 12: Delivered $1 Billion in EBITA in 9 months
Delivered $1 Billion in EBITA in 9 months
Slide 13: © MillerCoors:
© MillerCoors:
Slide 14: Organic growth strategy
Organic growth strategy • Driving Premium Lights – Positioning, innovation, multicultural • Growing in Imports/Crafts – Tenth and Blake • Winning at Retail – Distributors, execution, revenue management, chain The MillerCoors Advantage
Slide 15: Industry Environment
Industry Environment Gavin Hattersley Chief Financial Officer
Slide 16: U.S. Beer Shipments
Thousands of Barrels 170,000 175,000 180,000 185,000 190,000 195,000 200,000 205,000 210,000 215,000 220,000 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 U.S. Beer Shipments 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Slide 17: Unemployment
Unemployment • Key beer drinkers (KBDs), Hispanics and African-Americans each have higher unemployment rates than the general population.
Slide 18: Unemployment impact on beer category
Unemployment impact on beer category Beer Institute Shipment Data vs Unemployment Rate 215,000 12% 214,000 10% 213,000 212,000 Unemployment Rate 8% Shipments ('000) 211,000 210,000 6% 209,000 4% 208,000 207,000 2% 206,000 205,000 0% 10/1/2008 10/1/2009 10/1/2007 1/1/2007 4/1/2007 1/1/2008 4/1/2008 1
Slide 19: Beer has lost volume and servings share to wine and spirits
Beer has lost volume and servings share to wine and spirits due to price discounting
Slide 20: Beer has increased in value relative to wine and spirits
Beer has increased in value relative to wine and spirits
Slide 21: © MillerCoors:
© MillerCoors:
Slide 22: Premium Lights are the drivers for growth
Premium Lights are the drivers for growth Premium Lights are: • 35% of industry revenue
Slide 23: Winning in multicultural
Winning in multicultural • Latinos represent 24% of 21 to 25 year olds … • And that soars to 31% in 5 years • Index higher on beer consumption, premium lights
Slide 24: Craft and Imports
Craft and Imports • In 2010, Imports and Crafts have both grown and are expected to continue to grow. Source: Beer Marketers Insights, Impact, Addams, Craft Brewers Association
Slide 25: Winning with Big Brands
Winning with Big Brands Leo Kiely Chief Executive Officer
Slide 26: Core brands outperforming
Core brands outperforming • Outperforming the category • Outperforming in Premium Light, Craft, Below Premium • Coors Light, Keystone Light, Blue Moon and Miller Lite gaining share
Slide 27: Premium Light strengths
Premium Light strengths • Biggest segment and profit pool • Refreshment and sociability are key drivers for KBDs • Over-index among Hispanic consumers
Slide 28: Winning share in premium light
Winning share in premium light • Coors Light accelerating, Miller Lite rebounding 5.0% 0.5% 4.0% 0.4% 0.4% 4.0% 4.1% 3.0% 0.3% 3.0% 0.3% 2.0% 0.2% 0.2% 2.0% 2.1% 1.0% 0.1% 0.1% 1.3% 1.0% 0.1% 0.1% 0.1% 0.7% 0.0% 0.0% -0.1% -1.0% -0.1% -2.0% -0.2% -2.0% -0.2% -3.0% -0.3% 4 Week 12 Week YTD Sources: N
Slide 29: Innovation driving business results
Innovation driving business results
Slide 30: Winning in multicultural
Winning in multicultural African Hispanic All Other American Share of Population 11.5% 13.2% 75.3% Share of Beer 13.6% 15.9% 70.5% Index 118 120 94
Slide 31: Multicultural strategy is delivering … and we're investing more
Multicultural strategy is delivering … and we’re investing more • Multicultural (Hispanic + AA) Premium Light volume share and STRs continue to grow faster than general market: – YTD multicultural volume share up +1.2pts vs. general market
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Slide 33: MGD has maintained its share despite Bud Select 55
Even with launch of Bud Select 55, MGD 64 has maintained its share 1.40 Nielsen Grocery: MGD 64 and Bud Select 55 Share Trend 1.20 MGD 64 Bud Select 55 1.00 Mlt/Cdr Share 0.80 0.60 0.40 0.20 0.00 4 W/E 4 W/E 4 W/E 4 W/E 4 W/E 4 W/E 4 W/E 4 W/E 4 W/E 4 W/E 4 W/E 4 W/E 4 W/E 4 W/E 4 W/E 4 W/E 08/15/09
Slide 34: Miller Lite trends improving
Miller Lite trends improving 12/6/08 11/6/10
Slide 35: MME =
MME = =o SUMMER COUNT ES 5a C) MillerCoors
Slide 36: Driving Coors Light momentum
Driving Coors Light momentum 12/6/08 11/6/10
Slide 37: New innovation: Super Cold Activation
New innovation: Super Cold Activation
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Slide 40: Craft and Imports
Seoea' in QLZEN. CZECH he cungimas Pitot (@ MillerCoors
Slide 41: Goal: Accelerate share and profit growth
Goal: Accelerate share and profit growth
Slide 42: Craft and Imports strategy built on three platforms
Craft and Imports strategy built on three platforms Brand Portfolio - Acceleration of Current Assets - Create / Build / Expand Operating Model Distributor - Independent New Division - Focused Sales Coverage - Beer Merchant Culture / Capability - Strategic Plans / Portfolio Strategy
Slide 43: Blue Moon seasonals
Blue Moon seasonals Painted With Strokes of Honey: Honey Moon’ Summer Ale Is Back. A Study in Lime. Rising ing Moon: Spritig” Ale Is Back
Slide 44: • +8% (Nielsen) • Draft up nearly 10%
• +8% (Nielsen) • Draft up nearly 10%
Slide 45: Winning at Retail
Winning at Retail Ed McBrien President – Sales and Distributor Operations
Slide 46: Beer is a local business
Beer is a local business • U.S. beer business is highly variable • Local distributors are important • Competition is fierce and things move fast 8 to 1 5 to 1
Slide 47: Tamarron Survey: Ahead of the pack
Tamarron Survey: Ahead of the pack National View – All Respondents Scale: 1=Poor 2=Fair 3=Good 4=Very Good 5=Excellent
Slide 48: Tamarron Survey: Ahead of industry on key sales measures
Tamarron Survey: Ahead of industry on key sales measures MILLERCOORS AVERAGE PERFORMANCE SCORE INDUSTRY AVERAGE PERFORMANCE SCORE Field Sales – Communication 3.47 Field Sales – Execution 3.36 Trade/Retail Marketing 3.35 National Accounts – Off Premise 3.35 Innovation 3.31 Brand Marketing 3.30 Distri
Slide 49: Building execution excellence at retail
Building execution excellence at retail
Slide 50: Gap Closing Ideas…
BEER GAP ANALYSIS Bonbright Distributing March 2010 Results Gap Closing Ideas… • Internal display incentive for all MillerCoors brands in April/May • Set summer display targets and pre-sell displays for the entire summer Displays • Goal of 90% execution on DSOF for Memorial Day • One week POS off-pr
Slide 51: Building execution excellence at retail
Building execution excellence at retail
Slide 52: Driving distribution
Driving distribution 4.0% 8.8%
Slide 53: Improving display support of feature
Improving display support of feature Up 7.5 Pts Bud Light YTD08 YTD09 YTD10 YTD08 YTD09 YTD10 YTD08 YTD09 YTD10
Slide 54: Display differential
Display differential ABI 3.2 vs 2.8
Slide 55: National display management routine
National display management routine Close the display gap to ABI Goals Rally the total system Establish and track against unambiguous goals “4 on the Floor” Selling Tools Relentless Measurement Above Premium Miller Family Coors Family Below Premium
Slide 56: GMs direct local pricing
GMs direct local pricing • Beer pricing is fragmented • GMs responsible for profitable share growth • Price gaps matter
Slide 57: Managing price gaps
Managing price gaps • Consumers will trade down from premiums if gaps get too wide • Shrinking the price gap drives share and improves mix • Optimal gaps vary by market and segment PREMIUM PRICE GAP TO BELOW PREMIUM: DALLAS $4.30 4.0 $4.10 Avg Case Price Gap $4.15 2.7 3.0 $4.13 $4.09 $3.90 2.0 Case
Slide 58: MillerCoors trends continuing to improve in Premiums
MillerCoors trends continuing to improve in Premiums MillerCoors $ Share Change of Premium Lights 4 Weeks 12 Weeks 24 Weeks Source: AC Nielsen Grocery /C-Store data ending 11/06/10
Slide 59: Winning in Chain
Winning in Chain 2009 Results •Top 25 of all CPGs •Top 20 Category Management MillerCoors Advantage
Slide 60: Supplier of the Year
Winning in Chain Supplier of the Year MillerCoors Advantage
Slide 61: Category Management
Category Management • Category Management matters to… – Distributors – MillerCoors – Retailers
Slide 62: Category captaincy
Category captaincy Captaincy = +2.5% MillerCoors Advantage Out performance
Slide 63: Our category approach benefits retailers
Our category approach benefits retailers • MillerCoors captained accounts outperformed competitive markets Retailer Dollar Sales % Chg vs. YA Source - Nielsen data, 52 wks end 12/26/09 vs. YAG. Accounts with available „Remaining Comp Market‟ Data as well as either AB or MillerCoors listed as Captain
Slide 64: Winning share of outlets
Winning share of outlets % Outlets Controlled by Set Captain Role Total U.S. 30% ~30% 27% 20% 24% 10% 0% 2008 2009 2010
Slide 65: Financial Highlights
Financial Highlights Gavin Hattersley Chief Financial Officer
Slide 66: $750 million in synergies and cost savings by 2012
$750 million in synergies and cost savings by 2012 $800 $700 $50 million $200 Dollars in millions $600 million $500 $750 $400 $500 Million $300 million $200 $100 $ 0
Slide 67: 2010 Q3 Results
2010 Q3 Results Q3 10 Q3 09 Change % Underlying EBITA $371M $277M 33.9% • Underlying EBITA +33.9% • Net Producer‟s Revenue +0.1% • Domestic NRPB +2.4% • STRS -4.0% • COGS per barrel down 0.2% • Synergy and cost savings delivering $83 million MillerCoors IFRS
Slide 68: 95% of synergies attained in 2.5 years
95% of synergies attained in 2.5 years
Slide 69: Origin of synergies
Origin of synergies 55% 45% • Of total $500 million in synergies, split between MSG&A and Supply COGS / Supply Chain Chain MSG&A • Balance of remaining 60% 40% synergies come from COGS / Supply Chain
Slide 70: Origin of cost savings
Origin of cost savings 25% 75% • Lion‟s share of cost savings come from COGS / Supply Chain COGS / Supply Chain MSG&A
Slide 71: Brewery optimization
Brewery optimization • 14.5 million barrels of annual beer production transitioned • 7 breweries Milwaukee Golden Shenandoah producing Trenton Eden new products Irwindale Albany • 38 products and Fort Worth packages moved
Slide 72: Agency consolidation
GH} Cole Activated Bottle (@ MillerCoors
Slide 73: Less spending … more value
Less spending … more value $ 30 Million $ 20 Million
Slide 74: C) MillerCoors
C) MillerCoors
Slide 75: Mexican Primera Division Soccer
Mexican Primera Division Soccer
Slide 76: COGS
COGS • After 7 quarters of mid single digit growth, H2 of 2010 and 2011 COGS per barrel will be roughly flat (IFRS)
Slide 77: Commodities
Commodities • MillerCoors hedging programs have helped avoid large swings in commodity costs Aluminum Gas 250 Day Moving Average 2005 2006 2007 2008 2009 2010 250 Day Moving Average 2005 2006 2007 2008 2009 2010
Slide 78: Pricing strong despite a tough economy
Pricing strong despite a tough economy • Net revenue per barrel up +2.5% over PY $115 $135M + DUE TO $110 $ per barrel STRONG $105 PRICING $100 2009 YTD 2010 YTD
Slide 79: Capital expenditures
Capital expenditures • By end of 2010, we will have invested nearly $750 million to improve our supply chain • Moving forward, we see capital spending dropping to range of 4 to 4.5% of NPR beginning with 2010 capital expenditures Capital spending as a % of Net Producer revenue 2008 2009 2010 (e) 201
Slide 80: Mid term guidance
Mid term guidance • We expect roughly 300 basis points of additional expansion through 2013 EBITA margin expansion since inception 800 700 Basis Points 600 500 400 300 200 100 0 2009 2010 (e) 2011-2013 (e)
Slide 81: © MillerCoors:
© MillerCoors:
Slide 82: MillerCoors Medium-term value driver outlook
MillerCoors Medium-term value driver outlook Volume growth As employment levels improve among key beer drinkers, anticipated eventual return to average annual growth of 0.5-1.0% Revenue per hl In line with recent performance EBITA margin Growth of +100 bps average per year, weighted towards F1
Slide 83: © MillerCoors:
© MillerCoors: