Constellation Brands, Inc. (NYSE: STZ), a leading beverage alcohol
company, will today reinforce its strategic foundation for
continued growth at its Investor Day hosted at 2:00 p.m. EDT at the
New York Stock Exchange in New York City. The event will provide
investors, analysts, and other stakeholders with a comprehensive
overview of the company's continued value creation opportunities
supported by its strategic priorities.
“We remain extremely optimistic about the future outlook of our
business and look forward to sharing our plans to continue to
deliver shareholder value,” said Bill Newlands, Constellation
Brands’ President and Chief Executive Officer. “We are confident in
our ability to deliver sustained, strong profitable growth through
our strategy, which remains focused on continuing to drive our
iconic high-end portfolio, consumer-led innovation, disciplined
capital allocation, and advancing our ESG commitments.”
“We are pleased to see Constellation Brands’ continued
commitment to profitable growth, prudent capital allocation and
enhanced governance,” said Marc Steinberg, Elliott Management
Senior Portfolio Manager, and Michael Goldberg, Elliott Management
Portfolio Manager. “As investors will see today, the Company’s
strategy includes a double-digit earnings-per-share growth target
supported by the Beer Business’ sustainable volume trajectory and a
capital-allocation approach prioritizing organic investment and
shareholder returns. We look forward to continuing to work with
Bill and the team as they drive further shareholder value
creation.”
During the event, members of Constellation Brands' executive and
broader leadership teams will present insights into the company's
leading performance and plans for ongoing success, including
through:
Continuing to Deliver Best-in-Class Growth and
Profitability from Beer BusinessConstellation remains
committed to delivering best-in-class ~7-9% annual net sales growth
for its Beer Business over the medium term, mainly driven by strong
volume growth due to continued high consumer demand for its brands.
The company’s core beer brands continue to have significant
momentum, with Modelo Especial becoming the #1 dollar sales beer
brand in U.S. tracked channels, Corona Extra also holding a top
five spot across the entire market, and Pacifico doubling in size
since fiscal 2019 to a top 10 high-end brand. The company also
expects its Beer Business to deliver operating margins of ~39-40%
and achieve increased cash generated over the medium term. This
will support, among other things, an optimized investment plan for
brewing capacity expansions amounting to 18 million hectoliters
from its fiscal year 2024 through fiscal year 2028. The revised
expansion plans account for capacity additions from brewery
efficiency and optimization initiatives, which will reduce
previously anticipated capital expenditures by approximately $1
billion.
Driving Growth and Higher Profitability of Wine &
Spirits BusinessThe company anticipates sequential
improvement in the top-line and profitability of its Wine &
Spirits Business, reaching ~1-3% net sales growth and ~25-26%
operating margins over the medium term. Constellation’s Wine &
Spirits portfolio underwent significant transformation over the
last several years, doubling its number of fine wine and craft
spirits brands since fiscal year 2019. Notable higher-end
acquisitions, including Casa Noble, Meiomi, The Prisoner Wine
Company, High West, and My Favorite Neighbor, have underpinned this
transformation with further growth delivered through innovative
varietal, betterment, and ready-to-drink cocktail extensions to
these brands. The Wine & Spirits Business is also making
progress broadening its avenues for growth by significantly
increasing sales in direct-to-consumer channels and expanding share
in international markets.
Targeting Low Double-Digit Diluted EPS Growth (Excluding
Canopy EIE) and Incremental Cash FlowsStrong outlooks in
both the Beer and Wine & Spirits Business give the company
confidence to aim to deliver double-digit diluted EPS growth
(excluding Canopy EIE) as part of its medium-term algorithm. In
addition, the company anticipates a step-up in operating cash flow
growth, which combined with optimized organic investments primarily
focused on supporting incremental brewing capacity, are expected to
enable the company to deliver between $10 and $12 billion in free
cash flow from its fiscal year 2024 to fiscal year 2028.
Reinforced Capital Allocation Priorities, $2 Billion
Increase in Share Repurchase AuthorizationThe company
remains committed to maintaining a disciplined financial foundation
while balancing investments and additional returns. Its capital
allocation priorities, originally introduced in its fiscal year
2020, are being reinforced, including strengthening its balance
sheet; delivering significant cash returns to shareholders;
continuing to invest in organic growth opportunities, particularly
in its Beer Business; and executing tuck-in acquisitions, primarily
to close gaps in its Wine & Spirits portfolio in-line with
prior successful transactions. Notably, the company’s Board
recently authorized an incremental $2 billion in share
repurchases.
ESG Progress Aligned with Business
ObjectivesBeginning in its fiscal year 2020, the company
adopted an evolved approach to its environmental and social
initiatives in an effort to more strategically align its ESG
efforts to its business objectives. Constellation’s ESG focus areas
include serving as good stewards of the environment and natural
resources, enhancing social equity within its industry and
communities, and promoting the responsible consumption of beverage
alcohol. Progress made in these areas, including surpassing its
original target of restoring 1.1 billion gallons of water
withdrawals ahead of schedule, are detailed in the company’s 2023
ESG Impact Report.
Presentation materials and a live video webcast of the event
will be made available through the company’s investor relations
website at ir.cbrands.com under the News & Events section. When
the presentation begins, financial information discussed in the
presentation, and a reconciliation of reported GAAP financial
measures with comparable and other non-GAAP financial measures,
will also be available on the company’s investor relations website
under the Financial History section. For anyone unable to
participate in the webcast, a replay will be available on the
company’s investor relations website through the close of business
on May 2, 2024.
ABOUT CONSTELLATION BRANDSConstellation Brands
(NYSE: STZ) is a leading international producer and marketer of
beer, wine, and spirits with operations in the U.S., Mexico, New
Zealand, and Italy. Our mission is to build brands that people love
because we believe elevating human connections is Worth Reaching
For. It’s worth our dedication, hard work, and calculated risks to
anticipate market trends and deliver more for our consumers,
shareholders, employees, and industry. This dedication is what has
driven us to become one of the fastest-growing, large CPG companies
in the U.S. at retail, and it drives our pursuit to deliver what’s
next.
Every day, people reach for our high-end, iconic imported beer
brands such as those in the Corona brand family like the flagship
Corona Extra, Modelo Especial and the flavorful lineup of Modelo
Cheladas, Pacifico, and Victoria; our fine wine and craft spirits
brands, including The Prisoner Wine Company, Robert Mondavi Winery,
Casa Noble Tequila, and High West Whiskey; and our premium wine
brands such as Kim Crawford and Meiomi.
As an agriculture-based company, we have a long history of
operating sustainably and responsibly. Our ESG strategy is embedded
into our business and our work focuses on serving as good stewards
of the environment, enhancing social equity within our industry and
communities, and promoting responsible beverage alcohol
consumption. These commitments ground our aspirations beyond
driving the bottom line as we work to create a future that is truly
Worth Reaching For.
To learn more, visit www.cbrands.com and follow us on X,
Instagram, and LinkedIn.
FORWARD-LOOKING STATEMENTSThis news release
contains forward-looking statements. All statements other than
statements of historical fact are forward-looking statements. The
word “expect” and similar expressions are intended to identify
forward-looking statements, although not all forward-looking
statements contain such identifying words. These statements may
relate to business strategy and objectives, strategic priorities,
growth plans, innovation, new products, future operations,
financial position and targets, including expected net sales,
operating margins, diluted EPS growth, operating cash flow, free
cash flow, capital expenditures, capital allocation priorities,
amount, manner, and timing of share repurchases under share
repurchase authorizations, continued value creation opportunities,
organic investments, ESG initiatives and efforts, investor day
activities, and future prospects, plans, and objectives of
management, as well as information concerning expected actions of
third parties. All forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially
from those set forth in, or implied by, such forward-looking
statements. No assurances can be given that any of the events
anticipated by the forward-looking statements will transpire or
occur.
The forward-looking statements are based on management’s current
expectations and should not be construed in any manner as a
guarantee that such results will in fact occur. All forward-looking
statements speak only as of the date of this news release and
Constellation does not undertake any obligation to update or revise
any forward-looking statements, whether as a result of new
information, future events, or otherwise.
In addition to risks and uncertainties associated with ordinary
business operations, the forward-looking statements contained in
this news release are subject to other risks and uncertainties,
including the accuracy of all projections and other factors and
uncertainties disclosed from time-to-time in Constellation Brands’
filings with the Securities and Exchange Commission, including its
Annual Report on Form 10-K for the fiscal year ended February 28,
2023 and its Quarterly Report on Form 10-Q for the fiscal quarter
ended August 31, 2023, which could cause actual future performance
to differ from current expectations.
SUPPLEMENTAL FINANCIAL INFORMATIONThe company
discusses free cash flow, a non-GAAP measure, in this news release.
Free cash flow, as defined in the reconciliation below, is
considered a liquidity measure and is considered to provide useful
information to investors about the amount of cash generated, which
can then be used, after required debt service and dividend
payments, for other general corporate purposes. A limitation of
free cash flow is that it does not represent the total increase or
decrease in the cash balance for the period. Free cash flow should
be considered in addition to, not as a substitute for, or superior
to, cash flow from operating activities prepared in accordance with
GAAP.
|
Range forFiscal 2024 to Fiscal 2028 |
(in millions) |
|
|
|
Net cash provided by operating activities
(GAAP) |
$ |
15,000.0 |
|
|
$ |
17,000.0 |
|
Purchase of property, plant, and equipment |
|
(5,000.0 |
) |
|
|
(5,000.0 |
) |
Free cash flow
(Non-GAAP) |
$ |
10,000.0 |
|
|
$ |
12,000.0 |
|
MEDIA CONTACTS |
INVESTOR RELATIONS CONTACTS |
Amy Martin |
585-678-7141 |
amy.martin@cbrands.com |
Joseph Suarez |
773-551-4397 |
joseph.suarez@cbrands.com |
Carissa Guzski |
315-525-7362 |
carissa.guzski@cbrands.com |
Snehal Shah |
847-385-4940 |
snehal.shah@cbrands.com |
|
|
|
DavidPaccapaniccia |
585-282-7227 |
david.paccapaniccia@cbrands.com |
A downloadable PDF copy of this news release can be found
here: http://ml.globenewswire.com/Resource/Download/f47885b3-26e7-43e4-95be-4f30662f94da
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