Upload
tranminh
View
218
Download
2
Embed Size (px)
Citation preview
Welcome Ontario Brewers Date: January 14th 2015
Time: 2:00 pm EST
Please note all lines will be muted throughout the presentation. If you have any questions, please click on the Q&A box and enter your questions which will be answered by the host or presenter.
Legal Disclaimer
This presentation is for information purposes only and does not constitute a legal offer to sell or a solicitation to purchase shares of The Beer Store (TBS). This presentation is intended to provide prospective purchasers with current information about TBS and is being provided only to prospective purchasers that are familiar with TBS through business contacts. It is only for the confidential use of those persons. Any subsequent issuance of shares to any person will be in reliance on an exemption from the registration or prospectus requirements of applicable securities laws. This presentation contains summary information only. TBS does not make any representations or warranties as to the accuracy or completeness of the information in this presentation. The prospective purchaser should ensure that it receives, reviews and understands the information contained in the Due Diligence and Ownership Documents prior to making a decision to purchase shares of TBS. The prospective purchaser should consult with its legal, financial and other advisors before making a decision to purchase. Certain information contained in this presentation constitutes “forward looking statements”, all of which are based on certain material factors, assumptions and conditions, some of which may be unknown to TBS. Forward-looking statements are inherently uncertain and actual events or results can and will differ from those projected. Therefore, undue reliance should not be placed on such forward looking statements.
Page 3
Objectives of this webinar session to answer your questions
Provide further information on our proposal for system change Extend an invitation to become an owner of The Beer Store (TBS) Describe the rights and benefits you will receive as an owner Highlight how rates will be affected and what savings you can expect Share the governance changes to give you a voice / seat at the table Explain the process to evaluate this offer and to access ownership
Page 4
Our proposal: Increasing access to TBS for all small brewers Regardless of ownership
Page 5
2 free SKU listings in 5 local stores proximate to your brewery • One-time listing fee waived for additional stores, only pay per store fee • Applies to all brewers with <1M liters / year sold through TBS
2 free seasonal SKUs swaps for 1 existing listed SKU • Potential to sell three seasonal brands through TBS at no additional cost • Applies to all brewers
1
2
1
2
Seasonal SKUs Listed SKU
Our proposal: Inviting you to become an owner of TBS
Page 6
Future owners
All Ontario-based brewers that meet the following conditions:
1. Licensed by AGCO & CRA 2. Conduct full brewing process in ON 3. Either (a) produce only in ON
or (b) have an ON plant that has >10M L / yr capacity and
produces >2.5M L / yr 4. Have signed TBS User Agreement
Current owners
Many benefits of new ownership structure
Page 7
For Small Brewer Owners (under 5 million litres/yr)
For Large Brewer Owners (over 5 million litres/yr)
Fees based on net costs of business Lower fees than large owners
• Share in all revenues, most costs • Do not pay certain capital & pension /
benefits costs Governance access: Board representation Transparent reporting: financial & operating Ownership cost: $100
Fees based on net costs of business Same fees paid for same services
• Will uniquely pay capital investments (above depreciation) & pension / benefit costs
Governance access: Board representation Transparent reporting: financial & operating Ownership cost: $1,000
What will happen to your rates?
Today: The Beer Store operates on a break-even basis • Owner user fees determined based on spreading net operating costs • Estimated based on budget costs and volumes; trued-up at end of year
In our proposal, similar approach will apply to ALL owners • All TBS operating costs and revenues shared across all owners • Basic fees for owners based on share of net operating costs
Changes will reduce 2015 costs for new owners
• Owner service fees will be based on net costs of the business – Owners >5 million litres/yr: All pay the same fees for same services – Owners <5 million litres/yr: Get discounted fees as not responsible for certain
capital and pension / benefit deficit costs) • If any end of year adjustments are required, all owners will participate pro rata • Through representation on the Board, all owners will have insight into costs, fee
structure to increase transparency. This will alleviate any perceived inequities
Page 8
Participating in ownership projected to reduce your costs Average savings for Class F-eligible Ontario-based brewers
Page 9
Small brewer owner savings vs. projected '15
TBS rates
2%
Small brewer owner savings vs. large
brewer owners rates
9%
Small brewer owner savings vs. '15 non-
tiered rate sheet
13%
Based on 2015 TBS budget and projected 2015 rate sheet given November YTD inflation
Governance model will evolve to allow representation
Page 10
Prior structure New structure
Board of directors: • Molson: 4 nominees • Labatt: 4 nominees
Executive committee:
• Molson: 1 representative • Labatt: 1 representative
Board of directors: • Molson: 5 nominees • Labatt: 5 nominees • Sleeman: 2 nominees • Other owners > 5M L / yr: 2 nominees • Other owners < 5M L / yr: 1 nominee
Executive committee:
• Molson: 1 representative • Labatt: 1 representative • Other brewers: 1 representative
Goal: New governance structure will take effect in May
All owners through their Board representatives will have an opportunity to participate in TBS oversight, so they can contribute and provide direction on policy, financing and operations decisions
Anticipated timeline to implement changes
Page 11
Coming weeks / months May By end of the year
New listing fees / policies available immediately Ontario-based breweries conduct diligence and join TBS
TBS Board of Directors elections take place and new governance structure implemented
• New owners can vote & stand for seat on board
New ownership service fees in effect on the 1st Monday of May
Year-end reconciliation payment to all owners who joined in the year Current tiered rate sheet eliminated Jan 1 for Ontario non-owners
There is no deadline to accept – however, accepting before May allows you to participate in Board of Directors
elections
Note: What will be included in the Due Diligence and Ownership documents?
Page 12
Financial impact estimate specific to your brewery
TBS pro-forma estimates for 2014 LE & 2015 budget
Audited financial statements of TBS for fiscal year 2013
Summary of Shareholder rights
and obligations
Framework Agreement between the LCBO and TBS
1 2 3
5 6
Subscription and Shareholders Agreements
4
The path forward to evaluate and pursue ownership offer
Express interest in becoming an owner by contacting Ted Moroz Sign & return Non-Disclosure Agreement
• You will then be sent a copy of the Due Diligence and Ownership Documents
Review the Due Diligence and Ownership Documents and consult with your advisors Sign and return 2 copies of Ownership Documents to TBS
• Enclose certified cheque for Cdn $100 payable to Brewers Retail Inc.
On closing in May, receive Share Certificate for 1 Class F Share registered in your name and 1 signed copy of Ownership Documents for your records
Page 13
1
2
3
4
5
Summary: What rights and benefits does ownership provide to you?
By purchasing one Class F Share for Cdn$100, you receive:
Notice of, and right to attend, all annual and special meetings of owners Right to vote at meetings of owners held to elect Directors of TBS
• Representation on the Board / executive committee • Share in decision-making
Periodic reporting of financial information relating to TBS Basic service fees that are the same or better than the current owners
• Larger brewer owners will make additional payments relative to capital expenditures and to cover pension and benefit deficits
Page 14
1
2
3
4
Summary: What rights and benefits does ownership not provide to you?
As a Class F shareholder, you will not be contributing to capital expenditures above depreciation & amortization, and you will not:
• Share in the value of TBS assets because you are shielded from the cost of having to pay for a portion of those assets
• Be entitled to receive a distribution of assets on liquidation of TBS As a Class F shareholder, your liability is limited to the amount that you invested to purchase your Class F Share ($100)
• No obligation to invest, lend or pay any additional amount to TBS • No additional responsibility to pay for debts, liabilities or obligations of TBS
(including matters arising from litigation) except as reflected in basic fees
Page 15