TAP
#Thanks, <UNK>.
Hello, <UNK>.
<UNK>, thanks for the question.
I'll ask <UNK> to pick up some of the detail.
Just a couple of context points.
Firstly, we have started seeing a couple of markets a shift into the economy segment.
Just as consumers make choices about where their constrained disposable income is going to be used.
So that's one dynamic that has started to emerge, and the team are cognizant of and they are obviously wrapped into it.
And then to your second point.
From a promotional perspective, there's no real new news there.
The European market remains competitive.
But, <UNK>, do you want to give a little bit more color to specifically what is happening.
Yes, <UNK>.
I think you've covered the headlines.
Thanks for the question, <UNK>.
As <UNK> said, there is some move driven I think by the consumers being economically challenged, particularly in some of the markets post the flood.
So there's some move towards the economy and value segment in some of our markets.
We've chosen not to play aggressively in those parts of the market.
And to your question on the UK.
This is always fairly volatile in terms of promotion intensity.
But Q1 has been, I would say, a little bit more intense on the promotional lines in the, particularly in the multiple grocers channel, and again, we've chosen not to participate in some of those more aggressive deals.
So that's really what we are referencing when we made the headline results.
<UNK>, we haven't given a specific number on that yet.
No.
<UNK>, yes, it will be a positive contribution.
But I'd point you back to our guidance that we have of $40 million to $60 million worth of cost savings in this financial year.
We obviously have a lot of moving parts, things that move around, so that guidance has remained unchanged.
Thanks, <UNK>.
Hello, <UNK>.
Yes.
So, <UNK>, I will ask <UNK> to talk in a little bit more detail shortly.
Let me just give you a couple of headlines.
<UNK> and the team are in the middle of a very significant transformation of our business in Canada in terms of total restructuring of the supply chain, a big cost down program.
And ensuring that our portfolio is fit for future.
From a Canada perspective, in the first quarter, I was personally pleased with the progress <UNK> and the team made on pricing.
The Coors Light trend has improved versus 2014, that we saw strong growth in Coors Banquet, and with our above-premium portfolio.
And we've been encouraged by our share growth position in both Alberta and Quebec, which are critical markets for us.
At headline level, I would say overall, we're disappointed with our total performance.
And we'll certainly ensure a far more effective and ruthless execution of our plans in the balance of the year.
Take it from me, we'll be running even harder and faster in Canada.
We've got a great set of plans, and it's very much about the quality of execution of those plans through the balance of the year.
To build on some of the strong points at our American and our Canadian Business.
But, <UNK>, do you want to just jump a little bit deeper into some of the detail in Canada as per <UNK>'s question.
Not a lot I can add to it.
<UNK>, I think that the quarter was a bit better for the beer industry, no question about it.
The shift I think from Easter from Q2 into Q1 was absolutely a help.
If you look at the marketplace, the market trends were not dissimilar to what we saw last quarter, in the sense that the West was much stronger than the East.
And so part of our under performance came from geographic mix, part of it came from cycling the big promotion of Molson Canadian around the Winter Olympics last year, and part of it came from just under performance.
On the under performance side, we've got a very clear view on what's driving that, and we're working very aggressively to change those things.
Probably there is also worth mentioning looking at the big picture of things.
Our goal is to grow share, and our goal is to grow the profit.
And we have been focused against the strategy of overhauling the portfolio, driving our cost base down, and improving our executional capabilities.
And I think we've made good progress on all of those, as <UNK> commented.
If you look back at last year, we saw improving share trends for the first three quarters of last year.
And the last two quarters have been more challenged.
But as I say, I think we've got a clear line on where the under performance is coming from, and we'll be working to address that.
Thanks, <UNK>.
I believe that's the case.
Yes, <UNK>.
I'll give you a little bit of context, and I will ask <UNK> to talk specifically about the opportunity that we see in India.
But I think have been pretty clear that as we look at building our international brands really around the double act of the Coors trademark and Staropramen.
We're looking to drive that business principally on a license and export model, with the exception of a couple of markets were we believe that we can invest really for the medium to long-term, and India fits really nicely there.
I think we did their apprenticeship in India through our initial foray into the country, and we see a very clear path to strong position across three states.
And when you think about the population in these states, across the three of them, we're talking 150 million to 200 million people.
So these are big markets with real long-term potential.
So we'll be selective with our international cash investments, as I say, principally on a license and export model, we're a small number of markets where we can see long-term growth potential.
On India itself, <UNK>, do you want to just give a little bit more color to where we are in the marketplace.
Building on what <UNK> said, we see India as an attractive long-term market.
It's currently at ---+ the market size is 23 million to 24 million hectoliters.
It's been growing double-digits steadily.
And yet the per capita consumption of beer is only two liters per person per year, which means in the long-term we expect this market to continue to grow.
Our strategy in India has been taking positions in attractive states, and building up leadership positions within those states.
With that, in our first state, Vehar, which has worked out successfully.
With the recent acquisition, I believe we do that in two other states when started leading positions.
And our strategy will be successful in these states and roll at a steady pace that we can continue to drive that strategy versus a pan India.
Specifically within that, we have local brands.
So this acquisition gives us a brand called Thunderbolt, which is a very strong brand, and it also gives us a platform to build our global brands on top of these regional brands.
And that's, broadly speaking, our strategy in India.
Obviously any investment in any international markets goes through our pack model.
And we will be very judicial in our use of cash, as per the framework that we've described on a very consistent basis.
But we're certainly very excited about the medium to long-term potential around the geographical platform we've now given ourself in India.
To take the second part of your question first.
We have a 50/50 governance model within MillerCoors.
So the Board is constructed with equal Directors from both SAB and from Molson Coors.
And it's fair to say I think Alan Clark and myself are absolutely aligned on what we need to get done in the US business.
We both harbor the same ambition to build a winning beer business in the US, and we both hold the intent of ensuring that we have a great leader to lead the MillerCoors organization.
We are looking broadly for a new leader.
I don't want to get into the detail of the process.
The process is well underway, and I think people are just going to have to be patient.
Asking an executive from one of the shareholders to step in and run one of the businesses is not unusual in many organizations.
So I don't think were doing anything unusual, and I would really encourage people not to read anything beyond the headlines into this.
We have an interim requirement, we have an interim solution, and in the process for a permanent leader continues.
Great.
Thank you, <UNK>.
Thank you, <UNK>.
Thanks.
Hello, <UNK>, let me pick that up.
So what we said was as we move through towards the end of 2016, we expect our international business to be at least at breakeven, if not in profit.
We still believe that we will deliver that, when you put to one side the impact of FX that has clearly impacted the business since we made that statement back at the end of 2013.
We expect the FX impact relative to our plan at that point in time to affect us by mid to high single-digit millions of dollars.
So when you include that, it will make it challenging to get to breakeven.
And when you exclude that impact of FX, we are still very confident that we will get to breakeven FX excluded.
<UNK>, would you like to pick that up.
Happy to address that.
So first of all, let me work backwards.
SAB's entering into the market has been in the last 30 days, so nothing I can really comment on there.
I think we've got a terrific portfolio, and we'll be able to address all commerce.
In terms of competition in the marketplace, it's a competitive beer market.
Certainly more and more brewers added to the market as the cross the space grows, but I don't think anything has changed in that over the last quarter.
Relative to your question around pricing, pricing was, I'd say broadly in line with inflation across the country.
The amounts in excess of that I would put down to mix, as both the above-premium import and the above-premium domestic segments of the market grew.
More specifically than that, I would say pricing was weakest in Quebec and strongest between in Ontario and the West.
Thanks, <UNK>.
I'm not sure really that is true.
Only in that the beer store will continue to operate, will continue to be run by a Board as it is today.
And it will continue to exist in a format that provides opportunities for any brewers to get their beer to market.
So in that sense, I don't think anything changes.
As you will have read, there are a lot of changes that are coming to Ontario.
But there's not a lot I can add to what has already been announced publicly.
So a couple of things, so maybe mixing two things there.
On the pricing side, the province has instituted some restrictions on pricing for a period that ends in 2017.
But the beer tax, which at the beginning of the process looked like it could all come in one year, will be phased in over four years.
So they bring that in at 25% a year.
And, <UNK>, just to be clear, that four-year period begins in November of this year.
So really think about 2016, 2017, 2018 and 2019 is the four-year period
Well I don't think Heineken brand's have dramatically changed our mix.
We've brought other Heineken brand's on board that tend to be much smaller.
But just to give you a sense of the split.
When you look at that 3.8%, about two-thirds is driven by net price and the remainder was from mix.
Thanks, <UNK>.
I do, thank you.
I'd just like to thank everybody for joining us today and for your interest in Molson Coors Brewing Company.
We look forward as a senior team to meet with many of you in New York on June the 17th.
And just finally, best wishes again to Tom and also to <UNK> as we work our way through this transition.
Thanks for your interest this morning, and we will see you soon.
