MOLSON COORS BREWING COMPANY ANNUAL NEW YORK INVESTOR/ANALYST MEETING

Transcription

1 MOLSON COORS BREWING COMPANY ANNUAL NEW YORK INVESTOR/ANALYST MEETING JUNE 25,

2 PETER SWINBURN, PRESIDENT & CEO MOLSON COORS BREWING COMPANY 2

3 FORWARD LOOKING STATEMENT Forward Looking Statements: This press release 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 forward looking statements, which generally are not historic in nature. Although the Company believes that the assumptions upon which its forward looking statements are based are reasonable, it can give no assurance that these assumptions will prove to be correct. Important factors that could cause actual results to differ materially from the Company s historical experience, and present projections and expectations are disclosed in the Company s filings with the Securities and Exchange Commission ( SEC ). These factors include, among others, impact of competitive pricing and product pressures; health of the beer industry and our brands in our markets; economic conditions in our markets; pension plan costs; availability or increase in the cost of packaging materials; our ability to maintain manufacturer/distribution agreements; our ability to implement our strategic initiatives, including executing and realizing cost savings; our ability to successfully integrate our Central Europe business; changes in legal and regulatory requirements, including the regulation of distribution systems; increase in the cost of commodities used in the business; our ability to maintain brand image, reputation and product quality; our ability to maintain good labor relations; changes in our supply chain system; additional impairment charges; the impact of climate change and the availability and quality of water; risks relating to operations outside North America; success of our joint ventures; lack of full control over the operations of MillerCoors; and other risks discussed in our filings with the SEC, including our Annual Report on Form 10 K for the year ended December 31, 2013, which are available from the SEC. All forward looking statements in this press release are expressly qualified by such cautionary statements and by reference to the underlying assumptions. You should not place undue reliance on forward looking statements, which speak only as of the date they are made. We do not undertake to update forward looking statements, whether as a result of new information, future events or otherwise. Reconciliations to Nearest U.S. GAAP Measures: The following presentation includes certain "non GAAP financial measures" as defined in Regulation G under the Securities Exchange Act of A schedule is posted on the Company s website at MolsonCooors.com (in the Investor Relations" section) which reconciles our results as reported under Generally Accepted Accounting Principles and the non GAAP financial measures included in the following presentation. 3

4 LAST YEAR TO THIS YEAR KEY TAKEAWAYS BRAND-LED PROFIT GROWTH Investing behind core brands Driving share in above premium Delivering value-added innovation Commercial excellence Cost reductions Profit After Capital Charge CASH GENERATION CASH AND CAPITAL ALLOCATION Capital expenditure driving efficiencies Working Capital improvements Disciplined cash use Return-driven criteria Short-term priority: deleverage (TSR) TOTAL SHAREHOLDER RETURN Gaining traction against our commercial strategy Continue to improve the efficiency of our operations Strategic discipline driving improved financial performance 4

5 STRONG PERFORMANCE DURING TOUGH TIMES Generated more than $860 million in synergies and cost savings since 2008 Increased underlying free cash flow generation by nearly 76% To $892 million in 2013, from $508 million in 2008 Grown EBITDA every year since 2008 Increased underlying after-tax profit since 2008 at a compound annual rate of nearly 8% Increased our quarterly dividend by 16 percent in 2014 Adopted dividend payout ratio target 5

6 TODAY S AGENDA FOCUS ON CORE MARKETS Peter Swinburn, CEO, Molson Coors Tom Long, CEO, MillerCoors Stewart Glendinning, CEO, Molson Coors Canada Mark Hunter, CEO, Molson Coors Europe Gavin Hattersley, CFO, Molson Coors Closing Remarks Q&A with Full Leadership Team Reception 6

7 MOLSON COORS OVERVIEW UNITED STATES CANADA EUROPE INTERNATIONAL MARKETS 36% Worldwide Beer Volume 14% 4% 28% Net Sales 26% 2% 18% 34% Underlying Operating Income 1 46% 44% 48% 1 Does not include underlying operating losses for Corporate and MCI. Totals may not sum due to rounding. Non GAAP underlying income is calculated by excluding special and other non-core items from the nearest U.S. GAAP earnings. See reconciliation to nearest U.S. GAAP measures on our website. 7

8 CONTEXT IMPROVING ECONOMIES IN OUR CORE MARKETS GDP Real Change % (Per Annum) Recorded Unemployment % (1.0) (3.0) 10.0 (5.0) 5.0 (7.0) F 2014F 2015F 2015F 2016F 2016F USA CANADA UNITED KINGDOM BULGARIA CROATIA CZECH REPUBLIC SERBIA F 2015F 2016F USA CANADA UNITED KINGDOM BULGARIA CROATIA CZECH REPUBLIC SERBIA Improving GDP trends in North America, slower in Europe Employment outlook improving across most markets Growing consumer confidence Source: EIU (The Economist Intelligence Unit), May 2014 GDP = Gross Domestic Product 8

9 CONTEXT -- RAPIDLY CHANGING CONSUMER DYNAMICS BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL Fewer beer only drinkers Demand for more innovation in beer Growing interest in craft Brand marketing requires more two-way engagement with consumers online Greater consumer interest in corporate social responsibility 9

10 GROWTH STRATEGY ALIGNED WITH THESE TRENDS BRAND-LED PROFIT GROWTH Investing behind core brands Driving share in above premium Delivering value-added innovation Commercial excellence Cost reductions CASH GENERATION Capital expenditure driving efficiencies Working capital improvements CASH AND CAPITAL ALLOCATION Disciplined cash use Return-driven criteria Short-term priority: deleverage 10

11 BRAND-LED GROWTH ENABLERS INVESTING BEHIND CORE BRANDS DRIVING SHARE IN ABOVE PREMIUM DELIVERING VALUE ADDED INNOVATION DRIVE COST SAVINGS AND COMMERCIAL EXCELLENCE 11

12 INVESTING BEHIND CORE BRANDS BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL Core brands account for nearly 70% of total volume Strong brand positions in the most profitable beer markets The US premium light category is 6x larger than the craft category US - Coors Light (#2) and Miller Lite (#4) Canada - Coors Light (#1) and Molson Canadian (#3) Carling - UK s #1 selling beer All of our leading brands across Central Europe are premium, most #1 or #2 12

13 DRIVING SHARE IN ABOVE PREMIUM BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL Tenth and Blake is the leading craft brewer in the US Blue Moon is the largest craft brand in US Leinenkugel s the fifth-largest craft brand in US Canada above premium portfolio captures more than 26% of the overall segment (*) Doom Bar is largest on-premise cask ale in the UK UK craft portfolio growing at over 25% per year Continued strength of Staropramen across Europe * Excludes the Modelo brands in Canada 13

14 DELIVERING VALUE ADDED INNOVATION BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL A leader in the industry Creates brand loyalty Attracts new drinkers Builds excitement in the category Delivered 5.8% of NSR in 2013 On-target for nearly 7% of 2014 NSR 14

15 PERFORMANCE IS UNDERPINNED BY COMMERCIAL EXCELLENCE BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL CAPABILITIES CONSISTENT GLOBAL FRAMEWORK Field Sales Management Revenue Management PILOT AREA: OUTCOMES UK: VOLUME IMPROVEMENT +6.5% -- Distribution vs. Control +18% -- Brilliant Execution +6 calls/day -- Call Coverage Management and People ENABLERS Global Standard Technology Commercial Excellence Academy CANADA: VOLUME IMPROVEMENT +2.2% -- Distribution vs. Control +14% -- Brilliant Execution +4 calls/day -- Call Coverage 15

16 MOLSON COORS INTERNATIONAL A CRITICAL PART OF OUR BRAND-LED GROWTH STRATEGY 16

17 MCI STRATEGY ASSET-LIGHT, INTEGRATED MARKETING & BRILLIANT EXECUTION Disruptive Marketing Perfect Outlet Execution Great Quality Beer 17

18 BUILDING A FAST GROWING GLOBAL PORTFOLIO OF ABOVE PREMIUM BRANDS BRAND-LED PROFIT GROWTH Coors Light International Volume* (000s Hl) CASH GENERATION CASH AND CAPITAL MCI Total Volume* (000s Hl) ,500 2, , , , % CAGR +36% CAGR * Including sales volume and royalty volume 18

19 MCI ON TRACK FOR 2016 PROFITABILITY BRAND-LED PROFIT GROWTH CASH GENERATION MCI Underlying Pretax Income(loss) per HL 1 CASH AND CAPITAL $5 -$ $15 -$25 -$35 MCI will move past breakeven to deliver meaningful profit growth beyond Non-GAAP underlying pretax income (loss) is calculated by excluding special and other non-core items from the nearest U.S. GAAP earnings. See reconciliation to nearest U.S. GAAP measures on our website. HL includes financial and royalty volume. 19

20 MOLSON COORS IS WELL POSITIONED The fundamentals of our business are strong and improving We have a disciplined growth strategy that is yielding improved financial results Delivering an increasing share of revenue from innovation Strong growth of core brands Accelerated success in the above premium category Increased operational efficiency, and Strong commercial execution Well positioned to grow as economic conditions continue to improve 20

21 U.S. UPDATE: TOM LONG, CEO MILLERCOORS 21

22 A STRONGER, MORE COMPETITIVE BREWER Since 2008 launch More than $1 billion in savings/synergies More than $6 billion in underlying net income since inception Net cash distributions to parent companies of nearly $5.5 billion Major Breweries 22

23 STRONG REVENUE GROWTH AND MARGIN EXPANSION 20.0% 4.0% 19.0% 3.5% 3.4% 3.3% 3.5% 18.0% 17.0% 16.0% 2.3% 2.4% 15.8% 16.5% 16.3% 3.0% 2.5% 15.0% 14.4% 14.8% 2.0% 14.0% 1.5% 13.0% 12.0% 1.0% 11.0% 0.5% 10.0% Q1 0.0% Underlying Net Income Margin% Domestic Net Revenue per HL Growth * Non-GAAP underlying Net Income is calculated excluding special and other non-core items from U.S. GAAP earnings. See reconciliation to nearest U.S. GAAP measures on our website. 23

24 MILLENNIALS DRIVING SIGNIFICANT CHANGE IN TOTAL BEVERAGE ALCOHOL MARKET TBA servings distribution among consumers ages % 70% 60% 50% 40% 30% 20% 10% 0% Generation X: 1999 Millennials: 2012 Millennial tastes have shifted An explosion of new brewers 24

25 EVOLVE OUR PORTFOLIO 2013 MillerCoors* 9% 2016 MillerCoors* 13% 56% 56% 5% 30% 4% 27% Above Premium Premium Light Premium Regular Economy *Percent of Total Volume Source: MillerCoors projections 25

26 RIGHT STRATEGY Drive core brands 26

27 COMMERCIAL #1 27

28 RIGHT STRATEGY Drive core brands 28

29 COMMERCIAL #1 29

30 RIGHT STRATEGY Capture Above Premium Growth 30

31 COMMERCIAL #1 31

32 RIGHT STRATEGY Capture Above Premium Growth 32

33 RIGHT STRATEGY Accelerate innovation 33

34 DRIVING NET PRODUCER REVENUE INCREASE THROUGH INNOVATION Brand Innovation % of Total Domestic Net Producer Revenue 9% 8% 7% 7.1% 6% 5.8% 5% 4% 3% 2% 1% 0% 0.2% 0.4% 1.2% Q1'14 34

35 MILLERCOORS GAINING CHAIN CATEGORY LEADERSHIP 24% 47% MillerCoors Category Captain 60% 50% 45% 47% 40% 30% 24% 30% 35% 20% 10% 0% CM Profit group named MillerCoors the number-one alcohol beverage supplier 35

36 RETAILERS SEE STRONGER CATEGORY GROWTH WITH MILLERCOORS AS CAPTAIN 3 ABI Captain pts. over ABI MillerCoors Captain Good for retailers. Good for distributors. Good for MillerCoors. Source Nielsen Latest 52 weeks Dec

37 BUILDING WITH BEER Goal: Accelerate Premium Light growth by 2% trend improvement Through May, more than 165 distributors have been trained Nearly half are seeing positive or flat trend improvement on Premium Lights Pilot distributors, on average, are seeing 1.9% Premium Light trend improvement 37

38 SMARTSKU Over $4.0M in distributor revenue gained so far through the initiative Distributors who have used SmartSKU have seen positive results: Programs completed in May, 64% of SKUs placed on the shelf were reordered, nearly double the average rate historically Source Nielsen Latest 52 weeks

39 REVENUE MANAGEMENT Optimizing price and mix Cutting-edge tools Power of premium lights on premise Better insights to grow independents/small accounts 39

40 BRAND-LED GROWTH ENABLERS 40

41 CANADA UPDATE: STEWART GLENDINNING, CEO CANADA 41

42 CANADA CANADA Major Breweries 42

43 DESPITE HEADWINDS, OUR CANADA BUSINESS IS DRIVING CHANGE Challenging Beer Category Average annual decline of 1% since 2009 Lingering unemployment limiting growth Continuing challenges from wine and spirits Margins have been under pressure as discounting and promotions have been more frequent Focused on driving change Strong brand building led to market share gains by Molson Canadian best performance in 10 years Double digit growth in our craft brands Creemore Springs and Granville Island Increasing share of above premium with successful rollout of Coors Banquet Grew share in 2013 in value brands Attacking our cost base and increasing our execution capability We have a clear plan for addressing underperformance by Coors Light 43

44 BRAND-LED GROWTH ENABLERS INVESTING BEHIND CORE BRANDS DRIVING SHARE IN ABOVE PREMIUM DELIVERING VALUE ADDED INNOVATION DRIVE COST SAVINGS AND COMMERCIAL EXCELLENCE 44

45 INVESTING BEHIND OUR CORE BRANDS BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL What Strong marketing support Innovation driving news Sponsorships provide important activation opportunities How 50% of volume, over 60% of marketing spend Vented cans for a smoother pour, widemouth aluminum bottle NHL, football, music Core brands are the backbone of our business 45

46 BRAND BUILDING: LEADING POSITIONS ACROSS CANADA BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL Market Size Lead Brands Market Position Total MCBC Share Ontario Coors Light / Canadian 1 st, 2 nd Quebec Coors Light 1 st Alberta Molson Canadian 3 rd BC Molson Canadian 2 nd Manitoba Coors Light 6 th Saskatchewan Coors Light / Canadian 1 st, 2 nd Nova Scotia Coors Light 3 rd New Brunswick Coors Light 3 rd Newfoundland Coors Light / Canadian 1 st, 3 rd PEI Coors Light / Canadian 2 nd, 3 rd 46

47 BRAND BUILDING CORE: MOLSON CANADIAN GROWING SHARE BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% Molson Canadian National Market Share Q Turnaround a result of: Strong creative execution and integrated supporting programs Fully leveraged hockey and music pillars Innovation behind core lager and extended trademark 47

48

49 BRAND BUILDING CORE: MOLSON CANADIAN GROWING SHARE BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% Molson Canadian National Market Share Q Turnaround a result of: Strong creative execution and integrated supporting programs Fully leveraged hockey and music pillars Innovation behind core lager and extended trademark 49

50

51 LEVERAGING LEARNING'S FOR COORS LIGHT BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL Coors Light National Market Share Areas of focus: 16.0% 14.0% 12.0% 10.0% 8.0% Strong creative execution and integrated supporting programs Innovation behind core lager and extended trademark 6.0% 4.0% 2.0% 0.0%

52 LEVERAGING LEARNINGS FOR COORS LIGHT TURNAROUND New creative platform: Re-engage with Millennial and Generation X with a new creative More integrating programs: We will bring back optimized integrated programs that are more competitive across both retail & on-premise Innovation: Focus on rollout of Banquet across the country, as well as, the launch of vented cans Win at the point of sale: Improved store execution leveraging the power of the Coors master brand and appropriate local promotions to support demand 52

53 CONNECTING WITH CONSUMERS EMOTIONALLY Our campaign aims to connect more closely with Millennials and Gen Xers Our marketing focus has been more on functional benefits Our social media sites have a large following of actively engaged consumers COORS LIGHT LOVESEAT Coors Light is at its best when it s humorous and edgy with a point of view Coors Light is getting back to its roots 53

54 OWNED ABOVE PREMIUM VOLUME IS UP OVER 50% SINCE 2009 BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL (HL 000s) Molson Coors Canada Owned Above Premium Volume Key Strategies: 6 Pints expansion into Quebec 6 Pints added to portfolio for Mainstream selling organization Portfolio expansion with more experimental offerings E.g. Mad and Noisy Innovation driving news with retailers more limited time / seasonal offerings 54

55 HIGH REVENUE INNOVATION BUILDING MARGINS BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL $40 $45 Craft $30 Value $35 Premium Above Premium Innovation 3% of volume; 4% of revenue * 24 bottle equivalent Based on 2014 rates in all provinces 55

56 COMMERCIAL EXCELLENCE DRIVING IMPROVED EFFICIENCY BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL From To 4 regional selling organizations 2 regional selling organizations Separate sales and marketing leads One Chief Commercial Officer Local back office Local sales autonomy and non-standard processes Global one way approach for back-office functions Standard field sales management disciplines across the country Supported by revenue management capability 56

57 RESETTING OUR COST BASE Right sizing the business Set ourselves up with a sustainable business model, and a competitive cost base Reduced headcount; bigger, fewer roles Standardize and simplify processes Reducing our spend Improve our manufacturing efficiency and productivity Eliminate non-working dollars Use global purchasing power to drive lower costs Driving sustainable cost savings 57

58 BRAND-LED GROWTH ENABLERS INVESTING BEHIND CORE BRANDS DRIVING SHARE IN ABOVE PREMIUM DELIVERING VALUE ADDED INNOVATION DRIVE COST SAVINGS AND COMMERCIAL EXCELLENCE 58

59 EUROPE UPDATE: MARK HUNTER, CEO EUROPE 59

60 EUROPE SHAPED BY STARBEV DEAL AND INTEGRATION OF UK AND IRELAND BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL IRELAND #3 CZECH REPUBLIC#2 SLOVAKIA #3 ROMANIA #3 UNITED KINGDOM #2 BULGARIA #1 HUNGARY #3 CROATIA #1 BOSNIA & MONTENEGRO HERZEGOVINA #1 #1 SERBIA #1 Molson Coors Europe was shaped by the Starbev acquisition in 2012 and the integration of the UK and Ireland business with central Europe in 2013 Overall MCE market share position and lead brand in each market 60

61 MOLSON COORS EUROPE IS A SCALE BUSINESS ($ in millions) 2013 % of Molson Coors Market Share 21.0% Net Sales $2, % Gross Profit $ % Underlying Pretax Income* $ % Underlying EBITDA* $ % Europe drives 28% of MCBC sales, nearly 27% of underlying EBITDA * Non-GAAP underlying pretax income and EBITDA (Earnings before interest, taxes, depreciation and amortization) are calculated excluding special and other non-core items from U.S. GAAP earnings. See reconciliation to nearest U.S. GAAP measures on our website. 61

62 ACQUISITION AND INTEGRATION DELIVER ON BENEFITS Executive Leadership team changes completed Starbev/MCBC systems and process integration completed/on track Synergies ahead of plan UK and Ireland integration with Central Europe accelerated by 12 months Significant transfer of best practice taking place Supply Chain, Commercial, IS and HR Governance and cultural integration all on track Delivering profit and share growth and margin expansion, despite difficult European trading conditions 62

63 POSITIVE PERFORMANCE PROGRESS ($ in millions) Q Q Change Sales Volume (000s HL) 4,085 3, % Net Sales $437.6 $ % Gross Profit Margin 34.6% 30.8% 380 bp Underlying Pre-tax Income* $16.2 $(5.3) n/a Underlying EBITDA* $59.3 $ % We have made positive performance progress, and 2014 has started strongly * Non-GAAP underlying pretax income and EBITDA (Earnings before interest, taxes, depreciation and amortization) are calculated excluding special and other non-core items from U.S. GAAP earnings. See reconciliation to nearest U.S. GAAP measures on our website. 63

64 EUROPEAN OPERATING CONTEXT SLUGGISH GDP GROWTH LEADING TO VOLATILE DEMAND GROWTH IN VALUE SEGMENT SHIFT TO KEY ACCOUNTS GROWTH IN LOWER-MARGIN PACKS GDP FUTURE FORECASTS IMPROVING INNOVATION AND CORE+/ABOVE PREMIUM ACCELERATION ENHANCED JOINT BUSINESS PLANNING CAPABILITY ENHANCED REVENUE MANAGEMENT CAPABILITY The European operating context remains challenging but with a number of emerging tailwinds 64

65 MC EUROPE IS BRAND-DRIVEN, WITH BROAD AND DEEP PORTFOLIO STRENGTH. INCLUDING PARTNER BRANDS BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL Segment UK Bulgaria Croatia Czech Hungary Montenegro Romania Serbia Above Premium #2 #1 #1 #5 #3 #1 #4 #1 Mainstream #1 #1 #1 #2 #2 #1 #3 #1 Value #5 #1 #1 #3 #1 #5 #1 Note: excludes Ireland, Bosnia and Slovakia 65

66 OUR MC EUROPE STRATEGIC FRAMEWORK IS CLEAR AND ALIGNED WITH GLOBAL MCBC PRIORITIES GROW CORE BRANDS DOUBLE ABOVE PREMIUM GROW TOP LINE WITH INNOVATIONS One Way Approach MC Commercial Excellence Program World Class Supply Chain Engagement and Talent Our ambition is to be the fastest-growing beer company in Europe 66

67 CARLING HAS PERFORMED STRONGLY OVER LAST 18 MONTHS Mainstream Lager Carling Carling Volume Evolution in the U.K. 15% 13% 10% 9% 7% 5% 3% 1% 1% 0% 2% NEW ADVERTISING ADVERTISING -5% -10% -2% -6% -5% Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 ON-TRADE FOCUS FLAVORED EXTENSIONS 35% Carling Segment Market Share in the U.K. 34% 30% 29% 31% 32% CIDER CONSUMER PROMOTIONS 25% Q1'13 Q1'14 Source: UK Industry Data 67

68 COMMERCIAL #1 68

69 OZUJSKO IN CROATIA DEMONSTRATES THE STRENGTH OF OUR BRAND-BUILDING CAPABILITY Mainstream Lager Ozujsko NEW BOTTLE Ozujsko Volume Evolution in Croatia 8% 6% 4% 2% 0% -2% -4% -6% -8% -10% 6% 3% 2% 2% -1% -4% -5% -6% -7% -8% Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 DIGITAL BRILLIANT EXECUTION Ozujsko Segment Market Share 50% 40% 30% 41% 43% 42% 43% NEW FLAVORS SUPER DRY EXTENSION 20% Q1'13 Q1'14 Source: Nielsen 69

70 COMMERCIAL #1 70

71 ABOVE-PREMIUM AND CRAFT PORTFOLIO GROWING RAPIDLY BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL 1,800 Above-Premium Beer Sales Volume in HL (000s) 1,600 1,400 1,200 1, % compound annual growth rate 71

72 OUR PORTFOLIO IS GROWING RAPIDLY COORS LIGHT BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL 800 Coors Light U.K. Sales Volume in HL (000s) Coors Light has built momentum and scale in the UK, +40% CAGR 72

73 OUR PORTFOLIO IS GROWING RAPIDLY -- STAROPRAMEN BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL 500 Europe Sales Volume Outside Czech in HL (000s) Staropramen is growing strongly outside of the Czech Republic, +22% CAGR 73

74 OUR PORTFOLIO IS GROWING RAPIDLY DOOM BAR BRAND-LED PROFIT GROWTH Sales Volume in HL (000s) CASH GENERATION CASH AND CAPITAL Doom Bar growing rapidly and became #1 cask ale in the UK On trade, +22% CAGR 74

75 INNOVATION PIPELINE FROM 2012 TO 2014 HAS DRIVEN IMPROVED PORTFOLIO PERFORMANCE AND MARGIN EXPANSION BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL NEW FLAVORS FLAVORED BEERS AND COOLERS PACKAGING INNOVATIONS BREWERS LEMONADE CIDER SUPER DRY On track to generate 7% of net sales from innovations 75

76 PERFORMANCE IS UNDERPINNED BY COMMERCIAL EXCELLENCE, WHICH IS NOW BEING LIFTED AND SHIFTED GLOBALLY BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL CAPABILITIES CONSISTENT GLOBAL FRAMEWORK Field Sales Management Revenue Management PILOT AREA: OUTCOMES UK: VOLUME IMPROVEMENT +6.5% Distribution vs. Control +18% Brilliant Execution +6 calls/day Call Coverage Management and People ENABLERS Global Standard Technology Commercial Excellence Academy CANADA: VOLUME IMPROVEMENT +2.2% Distribution vs. Control +14% Brilliant Execution +4 calls/day Call Coverage 76

77 MOLSON COORS EUROPE DRIVING SHAREHOLDER VALUE Acquisition and integration has gone smoothly Synergies ahead of plan UK and Ireland integration with Central Europe accelerated by 12 months Positive performance, 2014 started strongly Brand-driven business with broad and deep portfolio Strategic framework: Grow core brands Double above premium Grow top line with innovations Commercial Excellence Ambition: To be the fastest growing beer company in Europe 77

78 FINANCIAL UPDATE: GAVIN HATTERSLEY, CFO MOLSON COORS BREWING COMPANY 78

79 DRIVING TOTAL SHAREHOLDER RETURN WITH PACC MODEL BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL ALLOCATION Investing behind core brands Driving share in above premium Delivering value-added innovation Commercial excellence Cost reductions Capital expenditure driving efficiencies Working capital improvements Disciplined cash use Return-driven criteria Short-term priority: deleverage Profit After Capital Charge (TSR) TOTAL SHAREHOLDER RETURN 79

80 UNDERLYING EARNINGS GROWTH IN TOUGH TIMES MCBC Underlying Pretax Income (*) $800 $646 $642 $719 $794 $821 $865 $865 $600 $400 $441 $541 ($millions) $200 $ Q1'13 Q1'14 $55 $107 Pretax income growth over the past 8 years totaled 96% * Non-GAAP underlying pretax income is calculated by excluding special and other non-core items from the nearest U.S. GAAP earnings. See reconciliation to nearest U.S. GAAP measures on our website. 80

81 AND STEADY, STRONG, GROWING EBITDA Underlying EBITDA 1 $1,600 $1,400 $1,200 $1,106 $1,100 $1,091 $1,127 $1,212 $1,267 $1,398 $1,469 $1,000 $800 $600 ($millions) $400 $200 $0 $ Q1'13 Q1'14 $ : +5.1%, to nearly $8 per share; st Q: +20.4% 1 Non-GAAP underlying EBITDA (Earnings before interest, taxes, depreciation and amortization) is calculated excluding special and other non-core items from U.S. GAAP earnings. See reconciliation to nearest U.S. GAAP measures on our website. Includes 42% of MillerCoors. 81

82 GROWING CASH RETURNS VIA DIVIDENDS $1.50 $1.00 $0.64 $0.64 Dividends Paid (Annual Per Share) $1.24 $1.08 $0.92 $0.76 $1.28 $1.28 $1.48 (dividend per share) $0.50 $ E New dividend payout ratio of 18%-22% of trailing underlying EBITDA 82

83 COST REDUCTIONS HELP TO DRIVE TOP LINE AND BOTTOM LINE BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL $1,200 Cumulative Annualized Cost Savings (*) $1,078 $1,195 $1,000 $851 $958 $800 $657 $600 $400 $331 $442 ($millions) $200 $0 $81 $ Nearly $1.2 billion of cost savings delivered in past 9 years * Including 42% of MillerCoors cost savings 83

84 ONGOING COST EFFICIENCIES WILL FUEL GROWTH INVESTMENTS BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL Long-term sustainability Captured more than $70 million of savings in 2013* Savings of $40-$60 million/year for at least the next 4 years* Near the high end of the range for the next 1-2 years Includes Central Europe deal synergies Driven through: efficiency and effectiveness Restructuring U.K., Canada, International Reduced overhead expenses, primarily Canada Global procurement Substantial % of savings reinvested for profitable growth * Excludes MillerCoors cost savings. 84

85 CAPITAL EFFICIENCY DRIVES CASH AND VALUE BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL Capital Spending 2014 outlook: $330 million* Supply chain work in Canada Innovation in Canada and Europe Higher than maintenance capital Expect to maintain similar capital spend levels in 2015 Maintaining working capital improvements Accounts payable Accounts receivable Inventories PACC drives focus on cash and capital efficiency * Excludes MillerCoors capital spending 85

86 INCREASING WORKING CAPITAL EFFICIENCY BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL Day Sales Outstanding Days Payables Outstanding Days Inventory Outstanding Cash Conversion Cycle (*) Driving future improvements, including in supply chain financing * Note: Cash Conversion Cycle = DSO+DIO-DPO Totals may not sum due to rounding 86

87 PROFIT, CAPITAL EFFICIENCY & STRUCTURE DRIVE CASH FLOW BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL $1,000 MCBC Underlying Free Cash Flow (*) $887 $865 $892 $800 $600 $426 $508 $681 $618 $700 $400 $315 ($millions) $200 $ E (1) Very cash generative business, even after substantial investments in brands, etc. * Underlying free cash flow is defined as operating cash flow, less capital spending, plus or minus investing cash from/to MillerCoors and plus or minus the cash impact of special and other non-core items. See reconciliation to nearest U.S. GAAP measures on our website. (1) Forecast, plus or minus 10%. 87

88 SHORT-TERM CASH USE PRIORITY: DELEVERAGE BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL 5x 4.4x 4x 3x 2.8x 3.0x 3.0x 3.6x 2.8x 2.9x 2.8x 3.2x 2.3x 2.9x 2x 1x 1.8x 1.6x 1.4x 0.8x 0.6x 0.7x <2x 0x Pro Forma S&P Adjusted Debt / EBITDA Net debt to EBITDA (1) Goal (1) Total debt less cash, divided by the sum of underlying pretax income, plus interest and depreciation & amortization expense (incl. 42% of MillerCoors). See reconciliations to nearest US GAAP measures on our website. 88

89 KEY VALUE DRIVER: DISCIPLINED CASH USE BRAND-LED PROFIT GROWTH CASH GENERATION CASH AND CAPITAL Cash use priorities Strengthen balance sheet by reducing liabilities Return cash to shareholders Brand-led growth opportunities Short-term focus: Balance sheet, especially debt (to pre-central Europe levels) 16% increase in dividend 1st Q 2014 New payout ratio: 18-22% of trailing year EBITDA Share buy-backs can be considered after deleverage Consistent return-driven criteria Short-term earnings accretion ROIC/WACC within 3-5 years 89

90 STRONG BASE, DRIVING TSR BRAND-LED PROFIT GROWTH CASH GENERATION Strategy, PACC Model Drive Value, Alignment 2013 Results: Achieved higher underlying pretax and EPS Grew underlying EBITDA Exceeded cost savings targets Improved cash conversion cycle CASH AND CAPITAL ALLOCATION Generated nearly $900 million in underlying free cash flow Paid down more than $800 million in debt and cross-currency swaps Strategy working, committed to PACC 90

91 PETER SWINBURN, PRESIDENT & CEO MOLSON COORS BREWING COMPANY 91

92 MOLSON COORS IS WELL POSITIONED TO GROW The fundamentals of our business are strong and improving We have a disciplined growth strategy that is yielding improved financial results We have a strong team that has consistently delivered on its promises Molson Coors is well positioned to grow as economic conditions continue to improve 92

93 MOLSON COORS BREWING COMPANY ANNUAL NEW YORK INVESTOR/ANALYST MEETING JUNE 25,