AGM 2021

May 26, 2021

Good day, and welcome to the Shareholder Meeting for Molson Coors Beverage Company. I would now like to turn the conference over to Andrew Molson, Chairman of the Board. Please go ahead. Good morning, ladies and gentlemen. My name is Andrew Mollson, and as Chairman of the Board, I will be conducting our meeting today. Last year, About this time, I said that my sincere hope was to see you all in Montreal as we return to our tradition of alternating annual meetings Between Montreal and Golden, Colorado. Unfortunately, we are meeting virtually again this year due to the pandemic. Now the pandemic has had a major impact on all of our lives with economic consequences that have touched almost every business in the world, Including, of course, the beer and the rest of the beverage industry. Throughout 2020, we experienced government restrictions That led to bars and restaurants closing. Sporting and other entertainment events were canceled and these shutdowns had a financial impact On our business. But this is not the first time that Molson Coors has been faced with unprecedented times, Whether it be prohibition, a prior pandemic or even shifts in consumer demands. In Molson Coors' long and storied history, we have had all kinds of situations. And in each case, we have come out a stronger and more determined company. With this pandemic, we see a light at the end of the tunnel. We now have vaccines And this gives us much hope for the future. Restrictions in the U. S. And the U. K. Are starting to lift And we sincerely hope that Canada will soon follow. And Molson Coors is well positioned because our company has never lost sight of our revitalization plan. In 2020, the company focused on strengthening our core brands, core brands like Coors, Miller and of course, Moulson. The company continued to innovate in the above premium space with products like Vizy and Blue Moon Light Sky, Which by the way managed to skyrocket last year. And there is already a lot of excitement for Topo Chico Heart Seltzer in the U. S, Our seltzers in Canada and 3 fold and Madri Excepcionale in the U. K. This year. The company also expanded beyond the beer aisle with La Colonde and Zoa and others. And the company expanded seltzer production capabilities, Invested in the future of our Coors Brewery in Golden, started construction on our new brewery in Quebec and established e commerce capabilities that will continue to enhance Sales into the future. That all of this work progressed in unison, let alone during a pandemic, He's a testament to our CEO, Gavin's leadership and to the resilience of our enterprise and the people working at our firm. 2020 brought significant challenges, but I am confident we will continue moving forward with success. Gavin will share a little more a little later on the progress against our revitalization plan. But let me say on behalf of our entire Board That we are fully supportive of the strategy our leadership team is executing. And I look forward to seeing how we continue to evolve In the years ahead, on behalf of our employees, our communities, all of our partners and of course, our shareholders. At this point, I also would like to take this time to add my thanks to all of our directors who are on the call today. I would like to thank them for all their support and total engagement in our business. Our Board members play an important role in our strategic decision And all of them have been extremely committed to supporting our growth agenda. And I'd like to take some time also to sincerely thank Ian Napier. Ian Napier is retiring from our Board. I want to thank Ian for being a good friend, For his valuable contributions to our Board and our enterprise and his commitment to the company for the past 13 years. We will certainly miss Ian's stage guidance and judgment, and of course, we will miss his beautiful Scottish humor. Now I'd like to formally open the business portion of this meeting. And let me begin by introducing the individuals who have joined us for this virtual meeting. Gavin Hattersley is the President and Chief Executive Officer of Molson Coors and a member of our Board. Also joining us is Lee Reichardt, Chief Legal and Government Affairs Officer and Secretary, and he will be acting as Secretary of this Annual Meeting. Next, I'd like to introduce the other members of our current Board of Directors and the Director nominee who are attending this virtual meeting. They are Pete Kourous, Vice Chair of the Board Julia Brown, a Director nominee David Kourous Mary Lynn Ferguson McHugh, Charles Harrington, Jeff Moulson, Nessa O'Sullivan, Sandy Reilly, Doug Tuff, Louis Vachon and Sandy Winnefeld. We also have here at the virtual meeting today, Tom Holman and Courtney Awkwood, both representatives from PricewaterhouseCoopers, our independent registered public accounting firm. They will be available to respond to questions and may make a statement if they so desire. And finally, the company has appointed Broadridge Financial Services to act as Inspector of Election. Chris Woods, a representative of Broadridge is with us today and has taken the oath of Inspector of Election earlier today. Now let's proceed to today's business. And I'd just like to remind you that we plan to wrap up this meeting no later than 12 pm Eastern Standard Time. Here's how the meeting will flow. First, I'd like to assure you we will cover each issue adequately and give as many stockholders as possible an Only validated stockholders are authorized to comment and ask questions in the designated field on the web portal. There are 4 proposals we will vote on at this meeting. Here's how we'll conduct comments to the 4 proposals and the question and answer session with regard to After all the proposals are presented, if you would like to make a comment or you have a question for us regarding any of the proposals, Please submit your question or comment through the designated field on the web portal. If you don't have a question or comment on a specific proposal, Who would like to address the meeting, you'll have an opportunity to do so in our general Q and A session coming up shortly after the formal business portion of the meeting is concluded. So we may not be able to answer every question. We will do our best to provide a response to as many as possible, And we will address any unanswered germane questions on our corporate website shortly after the meeting, and the questions and answers will remain available for 1 month after our posting. Out of consideration for others, please limit yourself to one question. And please note that this meeting is being recorded. However, no one attending via the webcast or telephone is permitted to use any audio recording device. Lee, would you please present the Secretary's report? Thank you, Andrew. Broadridge has provided the company with a written affidavit confirming that the notice of Internet availability of proxy materials for this annual meeting was mailed on or about April 8, 2021 to all stockholders of record as of April 1, 2021. Our Inspector of Election also from Broadridge advises that we have a quorum with respect to both Class A shares and Class B shares as follows. Approximately 96% of the total Class A shares eligible to vote are present in person or by means of remote communication or by proxy And approximately 80% of the total Class B shares eligible to vote are present in person or by means of remote communication or by proxy. Thank you very much, Lee. The polls are now open and will remain open until the end of the business portion of this meeting. Lee, could you please present each of the 4 matters to be voted on today? The first matter is the election of Class A and Class B Directors. The Company's bylaws require that each Class A and Class B Directors stand for election each year. The holders of Class A shares as of the record date are entitled and are being asked to vote for the election of the Class A Directors. The following individuals have been nominated for election as Class A Directors for 1 year terms expiring at the 2022 Annual Meeting. Julia Brown, David Coors, Pete Coors, Mary Lynn Ferguson McHugh, Gavin Hattersley, Andrew Moulson, Jeffrey Moulson, Nessa O'Sullivan, Doug Tough, Louis Vachon and James Sandy Winnefeld. The holder of Class B shares as of the record date are entitled and are being asked to vote for the election of the Class B Directors. The following individuals have been nominated for election as Class B Directors for 1 year terms expiring at the 2022 Annual Meeting. Roger Eaton, Charles Harrington and Sandy Riley. 2nd, The Board is asking the holders of the Class A shares and Class B shares as of the record date, voting together as a single class To approve on an advisory basis the compensation of the company's named executive officers. This proposal is also referred to as a say on pay vote. Next, the Board is being asked the Board is asking the holders of Class A shares as of the record date To approve the amendment and restatement of the Molson Coors Beverage Company incentive compensation plan, including the authorization of additional shares for issuance under the plan An extension of the term of the plan. And finally, the Board is asking the holders of Class A shares as of the record date to ratify the appointment of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for fiscal year 2021. If any stockholder would like to ask a question or make a comment regarding any of the proposals, Please submit your question or comment through the designated field on the web portal. Andrew, we do not have any have not received any questions that are proper for Thank you, Lee. The polls are now open. Any stockholder who hasn't yet voted or wishes to change their vote may do so by clicking on the voting button on the web portal and following the instructions there. Stockholders who have sent in proxies or voted via telephone or Internet and do not want to change their vote do not need to take any further action at this time. So before I close the meeting and move to a report from our President and CEO and of course our Q and A thereafter, I would like to ask Lee for the preliminary vote this morning. Thank you, Andrew. The Inspector of Election reports That each nominee for election as a Class A Director and each nominee for election as a Class B Director has received A sufficient number of votes cast in favor of his or her election. Therefore, all of the Class A and Class B Director candidates have been elected The Service Directors until the 2022 Annual Meeting. The non binding advisory vote to approve the compensation of named executive officers has Then approved on the applicable voting requirements. The amendment or restatement of The Molson Coors Beverage Company incentive compensation plan, Including the authorization of additional shares for issuance under the plan and extension of the term of the plan has been approved Under the applicable voting requirements, including the applicable NYSE rules. The proposal to ratify the appointment of PricewaterhouseCoopers, Cooper's LLP as the company's independent registered public accounting firm for fiscal year 2021 has been approved under the applicable voting requirements. Thank you, Lee, and thanks to all of you for voting. Now that everyone has had the opportunity to vote, I hereby declare the polls closed. Is there any further business properly brought before this meeting, Lee? Andrew, there is no other business properly brought before the meeting. Thank you, Lee. I hereby close the formal portion of this meeting. And it's now my turn to invite Gavin Hattersley, our President and CEO, to share his view on the state of our business, which will be followed by a Q and A. Gavin? Thank you, Andrew, and good day, everyone. On behalf of the team here from Molson Coors, Thank you for joining us today. Before we start, I'd like to share our Safe Harbor language. Our presentation today contains forward looking statements within the meaning of U. S. Federal Securities Laws. Important factors that could cause actual results to differ materially from the company's projections and expectations Are disclosed in the company's filings with the Securities and Exchange Commission. Regarding any non U. S. GAAP performance measures that we may discuss today, Please visit the Investor Relations page of our website, www.moulsoncoors.com, for a reconciliation of these measures to the nearest U. S. GAAP 2020 was an incredibly challenging year for everyone, Molson Coors included. The world came to a complete halt almost overnight. We had to fight to remain open as an essential business. Despite all of these challenges, we never lost sight of our goals. And in many respects, I consider us lucky. The revitalization plan we put in place in October of 2019 positioned us well to weather the storms of 2020. Our business is leaner and more agile, which put us in a better position to conserve resources as the circumstances dictated And to deploy them effectively as the circumstances allowed. And in 2020, we were able to continue working on strengthening our core brands, Growing our above premium portfolio, expanding beyond the beer aisle and investing in our capabilities and people. Let me tell you more about these efforts. In 2020, we focused investments against our best known brands to stay top of mind. With significant economic uncertainty, consumers turn to the big brands they trust them. In fact, with pantry loading, we saw double digit growth trends for both Coors Light and Miller Lite in the U. S. Per Nielsen. And that continued into the Q1 this year with Coors Light and Miller Lite outperforming the combination of Bud Light and Michelob Ultra in U. S. Industry share performance versus the prior year according to IRI. The performance is even more impressive when you look at our biggest brand and our biggest family of brands. Coors Light finished the quarter with its strongest Category share performance since Q1 of 2017 in the United States. Coors Banquet has posted its best quarterly volume performance in over 4 years in the U. S. And let's not forget that during the 1st few months of the year, the Molson family of brands in Canada have also improved share in premium and above premium segments. We're also focused on growing our above premium portfolio. And in above premium beers, Blue Moon Light Sky ended 2020 is the number one new beer in the United States per Nielsen, and it is currently the number one share gainer in U. S. Craft beer in 2021. Our regional kraft portfolio in the U. S. Also grew 17% per Nielsen, outpacing the kraft segment once again. And don't forget about our new joint venture with Yingling. The joint venture plans to bring Yingling to one of America's biggest beer drinking states, Texas. Reception has already been incredible and there is significant upside potential with Yingling as the JV begins its westward expansion. In 2020, we also doubled our share of seltzers in the U. S. With the launch of Vizzy and Coors Seltzer. Vizzy continues To surpass expectations since debuting last spring, and we are already seeing excitement around variety pack number 2 and Busy Lemonade, which ranks as the 2nd fastest turning lemonade hard seltzer in the U. S. And of course, 2020 marked the exclusive agreement With The Coca Cola Company to bring Topo Chico Hard Seltzer to the United States. In a single week, Topo Chico Hard Seltzer jumped to a 3.2 share of the U. S. Seltzer Despite only launching in 16 markets and it achieved a 20% share in Texas. Now I know it's early days, but that is a stunning fact that speaks to the opportunity with this brand. We've also made significant headway with our hard seltzers in Canada And in Europe as well. After just over a monthly market, Vizzy and Coors Seltzer are top 5 hard seltzer brands with some of the leading Canadian retailers. And in the U. K, our new threefold hard sulfur brand launched in March with our new brand Y in Central and Eastern Europe launching just When it comes to our plans to expand beyond beer, in 2020, we made a lot of news As we took on a number of partnerships to build a competitive portfolio. Zohr gives us a strong entry into the $16,000,000,000 U. S. Energy and performance space And is positioned to take a meaningful share of the category within a matter of months. It's already hitting shelves and by Memorial Day, We expect ZOWA will have over 80,000 points of distribution. And by the end of summer, that number is expected to climb to nearly 150,000. Locolone gives us the number one above premium player in the RTD coffee space in the U. S. And I am excited to report that we're ahead of plan on all of our And Trust Canada, our joint venture with Hexa, netted the number one dollar share spot in the entire Canadian cannabis beverage market last year. This entire lineup represents tremendous growth opportunities for our business and is helping us drive our emerging growth division Towards our $1,000,000,000 revenue business ambition by 2023. In 2020, we also made major investments that would help grow The top line. We invested in our e commerce capabilities all around the globe and it paid off with 2 30% growth in e commerce in the U. S. Alone. We completed a sleek can production line capable of manufacturing approximately 750,000,000 sleek cans annually. We have laid the foundation to meet innovation demand with increases of approximately 400% in capacity in the U. S. For both hard seltzers and Blue Moon LightScrub. And just last week, we announced an investment to increase our hard sell for production capacity in Canada by 300%. We also continue to invest in sustainability in areas such as water efficiency, sustainable agriculture and waste reduction. For example, with the brewery modernization project in Golden, the company tends to significantly reduce CO2 emissions from the brewery, Reduce energy usage by 15% and reduce water usage by 100,000,000 gallons per year. Construction on the Longay Brewery will transform 1 of the oldest breweries in Canada to a modern facility that will use advanced technology to achieve low energy consumption And reduce our carbon footprint. But we will also maintain our presence in Montreal with the heritage center that will sit along the St. Laurence River where the Montreal Brewery once stood. And during the Q1 of this year, we became the 1st major U. K. Brewer to operate entirely by green electricity. Soon, every one of the £1,000,000,000 of beer we produce annually in the U. K. Will be made with 100% green electricity. But we didn't stop there. We are also removing plastic rings from all of our major packs across the UK. Last but certainly not least is how we're supporting our people and our communities. This one is particularly important to me. When I took over as CEO, I made it clear that I wanted Molson Coors to have a people first culture, and that approach guided our decision making throughout last year. We doubled our annual investments in our hometown communities, which included support for 25 national and local organizations working to address social injustice, And we proudly signed up to the Black Canada initiative. We launched a new scholarship program supporting people of color and LGBTQ plus students Seeking degrees in brewing or fermentation sciences through Tint and Blake. And just this April, we announced our investment in True Colors, a A North Carolina based brewery that was founded on the premise of aligning rival gang members under the same roof with a common goal in both mitigate street violence And create economic opportunity. Our work in this space is nowhere near done, but we are making important progress. In 2020, we set a goal of increasing the representation on people of color in the U. S. By 25% by the end of 2023 across the country, among employees and their leadership positions. Each remarket availability shows we have room for improvement. And we've committed to spend a total of $1,000,000,000 with diverse suppliers in North America over the next 3 years. We have made progress towards both these And we expect to continue to do so. Now you may be wondering why I'm so confident given the pandemic and other factors, which continue to impact our business In the Q1 of this year. None of us could have planned for a global pandemic of this scale or magnitude, but we have weathered the storm. Vaccines are becoming more accessible in our major markets. Bars, restaurants and sporting events are opening and we remain focused on Our goal of returning this business to long term top line growth. That is what has helped us successfully navigate 2020 and that is what has created a tremendous springboard for 2021 and beyond. So Again, thank you for being here today and for your ongoing support. And at this point, I'll turn it back over to Andrew. Thank you, Gavin. We will now go to the Q and A session. We will take stockholders' questions that are being answered today on the web portal. Please note that we will attempt to answer as many questions as our time allows, but only questions that are germane to this meeting will be addressed. Answers to any questions that we did not get to will be posted on our website as soon as practical after the Annual Meeting, And these answers will remain available 1 month after posting. Any questions coming in? Andrew, we do not have any questions on the web portal. Thank you, Lee. So having addressed all questions and comments, I would now like to close the meeting by announcing our new Board Chair. Under our bylaws, we alternate our Board Chair and Vice Chair positions every 2 years, And this is a year that the positions alternate. Our Board is an amazing group of men and women and it has been my honor to serve as Chair for the past 2 years. And I am excited to turn the position over to Pete Coors, who brings a great deal of knowledge and passion to our Board every time we see each other. Pete? Thanks very much, Andrew, and thank you for your Service, leadership and dedication as our Board Chair, you've been a great Chairman. You and I both know that Molson Coors is a company steeped in history Backed by generations of passion for brewing the world's greatest beers. In projects like the new Longuee Brewery in Quebec and the Golden Brewery modernization that Gavin discussed not only represent a commitment to sustainability, But also pay tribute to the groundwork played by both the Molson and Coors families and serves as an investment in our bright future. Nearly 150 years ago, my great grandfather settled on Clear Creek here in Golden, Colorado to brew his beer. And over 230 years ago, John Molson set up his brewery alongside the shores of the St. Lawrence River in Montreal. And over the years, our 2 families have brewed some of the best beers in the world, from Coors Banquet to Coors Light To Molson Canadian, to Molson Export. I'm proud of how far we've come and all that we've been able to accomplish. But more importantly, I'm excited and enthusiastic for where we are headed. Molson Coors is committed to becoming a true Beverage Company and that starts by expanding beyond beer into wine and spirits, non alcohol drinks, seltzer And much more. And it's that commitment to growth and innovation that will keep us competitive for generations to come. I'm honored to serve as the next Board Chair, and I look forward to working to help carry out our revitalization plan And serve the best interest of our shareholders and stakeholders. So finally, thank you for attending our Annual Meeting. We appreciate your Support and we look forward to seeing you next year here in Golden, Colorado when we return to our tradition of alternating annual meetings Between Montreal and Golden. Have a wonderful day. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.