The Campbell's Company · NASDAQ:CPB
The Campbell's — Campbell Soup Company — Q2 2021 Earnings Presentation
44 slides from The Campbell's's earnings presentation, Mar 10, 2021
Slide 1: Q2 2021 Earnings Presentation
Q2 2021 Earnings Presentation 1
Slide 2: Rebecca Gardy, VP Investor Relations
Rebecca Gardy Vice President Investor Relations 2
Slide 3: Forward-Looking Statement
Forward-Looking Statement The factors that could cause actual results to vary materially from those anticipated or expressed in any forward-looking statement include: impacts of, and associated responses to, the COVID-19 pandemic on our business, suppliers, customers, consumers and employees; our ab
Slide 4: Agenda
Agenda Consolidated Results Division Highlights Q2 Financial Highlights Full-Year Guidance Keys to Future Growth Q&A Q2 FY21 4
Slide 5: Mark Clouse: CEO Perspective
Mark Clouse President and Chief Executive Officer Q2 Fiscal 2021 Earnings Presentation CEO Perspective 5
Slide 6: Strong Consolidated Results
Strong Consolidated Results +5% +8% +17% 75% Organic Sales* Adj. EBIT* Adj. EPS* of Portfolio Gained or Held Share1 Key Highlights ▪ Strong execution across both divisions ▪ Returned to improved positive share growth as planned ▪ E-commerce in-market dollar consumption growth +89%2 ▪ Provided full-y
Slide 7: Meals & Beverages Division Performance
Meals & Beverages Division Performance Win in Soup Key M&B Brands +10% 8th #1 Share for 21 Net Sales Consecutive Quarter of Condensed Share Straight Months1 Growth1 4th Consecutive Double-Digit Quarter of Share Net Sales Growth Growth1 +25% +2pts Pacific Foods Chunky Share1 Share Gains 1 Consumption
Slide 8: Snacks Division Performance
Snacks Division Performance ▪ +8% Power Brands consumption1 ▪ Double-digit consumption growth in Salty snacks1 ▪ Exceptional results in Pepperidge Farm Farmhouse ▪ Goldfish improving as supply recovered ▪ Significant progress on value capture with remaining runway on improving Snacks profitability 1
Slide 9: Strong Snacks Innovation Pipeline
Strong Snacks Innovation Pipeline Q2 FY21 9
Slide 10: Mick Beekhuizen: CFO Perspective
Mick Beekhuizen EVP & Chief Financial Officer Q2 Fiscal 2021 Earnings Presentation CFO Perspective 10
Slide 11: Financial Summary
Financial Summary Continuing Operations ($ millions, except per share data) Q2 Change vs. PY H1 Change vs. PY FY21 $ % FY21 $ % Net Sales $2,279 $117 5% $4,619 $274 6% Organic Net Sales* $116 5% $298 7% Adjusted EBIT* $393 $29 8% $856 $100 13% Adjusted EPS* $0.84 $0.12 17% $1.86 $0.35 23% *See Non-G
Slide 12: Components of Net Sales Growth
Components of Net Sales Growth Continuing Operations +4 pts (1) pt +2 pts +5% - +5% Q2FY20 Q2 FY20 Volume & Mix Price & Sales Promotional Q2 FY21 Currency Q1 Q2FY21 FY21 Net Sales Allowances Spending Organic Organic Net Sales Net Sales* * See Non-GAAP reconciliation Q2 FY21 12
Slide 13: Adjusted Gross Margin Performance
Adjusted Gross Margin* Performance Continuing Operations -10 bps +90 bps (330) bps 34.4% (10) bps +50 bps +50 bps 34.3% +140 bps Q2 FY20 Q2 FY20 Mix Operating Net Pricing Inflation/ Productivity Cost Savings Q2 FY21 Leverage1 Other2 Improvements Initiatives * See Non-GAAP reconciliation 1. Reflects
Slide 14: Other Operating Items
Other Operating Items Continuing Operations ($ millions) 8 + % A&C Adjusted Marketing Adjusted & Selling Expenses* Administrative Expenses* -1% $235 $232 +13% $135 $152 Q2FY20 FY20 Q2 FY21 FY20 Q2 FY20 FY20 Q2 FY21 FY21 * See Non-GAAP reconciliation Q2 FY21 14
Slide 15: Cost Savings & Value Capture
Cost Savings & Value Capture Continuing Operations ($ millions) $850 $760 • Total savings of just over $20 million realized in Q2 ▪ Target of approximately $75 - $85 million for FY21 with Snyder's-Lance synergies representing the majority of savings ▪ Tracking to cumulative savings target of $850 mi
Slide 16: Adjusted EBIT Growth
Adjusted* EBIT Growth Continuing Operations ($ millions) +8% +$40 ($3) +$3 ($15) +$4 $393 $364 Q2 Q2 FY20 FY20 Net Sales Adjusted Gross Adjusted Adjusted Adjusted Other Q2 FY21 Q2 FY21 Growth** Margin Impact Marketing & Administrative & Income Selling R&D Expenses Expenses *See Non-GAAP reconciliati
Slide 17: Adjusted EPS Performance
Adjusted* EPS Performance +17% Continuing Operations $0.04 $0.01 $0.84 $0.07 $0.72 Q2 FY20 Q2 FY20 Adjusted EBIT Adjusted Interest Adjusted Taxes Q2 FY21 * See Non-GAAP reconciliations for all adjusted financial measures presented. Q2 FY21 17
Slide 18: Segment Results
Segment Results ($ millions) Net Sales & Organic Growth Rate* Operating Earnings $1,300 +6% $1,224 +7% $242 $258 Q2 FY20 Q2 FY21 Q2 FY20 Q2 FY21 * See Non-GAAP reconciliation Q2 FY21 18
Slide 19: Segment Results
Segment Results ($ millions) Net Sales & Organic Growth Rate* Operating Earnings $979 $938 +4% +6% $136 $144 Q2 FY20 Q2 FY21 Q2 FY20 Q2 FY21 * See Non-GAAP reconciliation Q2 FY21 19
Slide 20: Cash Flow
Cash Flow Total Company ($ millions) YTD FY20 YTD FY21 Net Cash Flows from Operations $663 $611 Of which changes in working capital (net of divestitures) ($37) ($178) Net Cash Flows from Investing Activities $2,368 ($120) Of which capital expenditures ($167) ($132) Of which sales of businesses (net
Slide 21: Fiscal 2021 Guidance for Continuing Operations
Fiscal 2021 Guidance for Continuing Operations ($ in millions, except per share) Fiscal 2020 Fiscal 2021 Results Guidance Net Sales $8,691 -3.5% to -2.5% Organic Net Sales $8,515* -1.5% to -0.5% Adjusted EBIT $1,449* -1% to +1%1 +3% to +5%1 Adjusted EPS $2.95* $3.03 to $3.11 * See Non-GAAP reconcili
Slide 22: Keys to Future Growth
Keys to Future Growth Sustain or accelerate Snacks growth while improving margins Solidify M&B business as a steady and stable contributor Deploy financial flexibility to create value Q2 FY21 22
Slide 23: Consumer Research
Consumer Research Clear insights on consumer 4/5 consumers highly satisfied1 70% better than competition1 drivers for retention of new households1 1Numerator New User Surveys, May 2020 (n=5,303) & Jan 2021 (n=2,893) Q2 FY21 23
Slide 24: Clear Mission
Clear Mission Sustain or accelerate Snacks growth while improving margins Solidify M&B business as a steady and stable contributor Deploy financial flexibility to create value Q2 FY21 24
Slide 25: Q&A
Q&A Mark Clouse Mick Beekhuizen President and EVP and Chief Financial Officer Chief Executive Officer Q2 FY21 25
Slide 26: Appendix
Appendix Camptli Real food, Real results, ..
Slide 27: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions) Second Quarter % Change Net Sales, Impact of Organic Net Sales, Organic January 31, 2021 As Reported Currency Net Sales As Reported Net Sales Meals & Beverages $ 1,300 $ (2) $ 1,298 6% 6% Snacks 979 1 980 4% 4%
Slide 28: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions) First Half % Change Net Sales, Impact of Organic Net Sales, Organic January 31, 2021 As Reported Currency Net Sales As Reported Net Sales Meals & Beverages $ 2,642 $ (2) $ 2,640 9% 9% Snacks 1,977 1 1,978 3% 4%
Slide 29: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions, except per share amounts) Second Quarter EBIT EBIT Margin % Earnings Diluted EPS* 2021 – As Reported $ 401 17.6% $ 245 $ 0.80 Add: Restructuring charges, implementation costs and other related costs 22 16 0.05
Slide 30: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions, except per share amounts) First Half EBIT EBIT Margin % Earnings Diluted EPS 2021 – As Reported $ 862 18.7% $ 554 $ 1.82 Add: Restructuring charges, implementation costs and other related costs 28 21 0.07 Add:
Slide 31: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions) Second Quarter Gross Margin GM % EBT Tax Tax Rate 2021 – As Reported $ 783 34.4% $ 347 $ 102 29.4% Add (Deduct): Restructuring charges, implementation costs and other related costs (2) 22 6 Deduct: Deferred tax
Slide 32: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions) Adjusted EBIT Impact from Adjusted Gross Margin Second Quarter 2021 – Adjusted Gross Margin $ $ 781 2021 – Reported Net Sales $ 2,279 2020 – Adjusted Gross Margin % 34.4% 2021 – Adjusted Gross Margin $ at 2020
Slide 33: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions) Second Quarter Marketing and Administrative R&D Other Expenses / Selling Expenses Expenses Expenses (Income) 2021 – As Reported $ 232 $ 158 $ 19 $ (45) Deduct: Restructuring charges, implementation costs and ot
Slide 34: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions) Second Quarter Interest, net 2021 – As Reported $ 54 2020 – As Reported $ 146 Deduct: Loss on extinguishment of debt (75) 2020 – Adjusted $ 71 $ Change $ (17) % Change (24)% Q2 FY21 34
Slide 35: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions, except per share amounts) Second Quarter – Adjusted Diluted EPS Impact from Adjusted EBIT and Adjusted Interest EBIT Interest, net 2021 – Adjusted $ 393 $ 54 2020 – Adjusted 364 71 $ Change $ 29 $ (17) Add (Ded
Slide 36: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions, except per share amounts) Adjusted Diluted EPS Impact from Change in Adjusted Tax Rate Second Quarter 2021 – Adjusted EBT $ 339 Change in Adjusted Tax Rate -0.7% Adjusted EBT multiplied by the Change in Adjuste
Slide 37: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions, except per share amounts) Full Year Diluted EBIT Earnings EPS* 2020 – As Reported $ 1,107 $ 592 $ 1.95 Add: Restructuring charges, implementation costs and other related costs 69 52 0.17 Add: Pension settlement
Slide 38: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions) Full Year Fiscal 2021 Guidance Organic Net Sales % Change Net Sales, Impact of Impact of Net Sales, Fiscal 2020 As Reported 53rd Week Divestiture Organic Low End High End Total Net Sales $ 8,691 (151) (25) $ 8,
Slide 39: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions) Net Debt January 31, 2021 Short-Term Borrowings $ 1,025 Long-Term Debt 4,996 Total Debt $ 6,021 Less: Cash and Cash Equivalents (946) Net Debt $ 5,075 Q2 FY21 39
Slide 40: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures (a) (b) (c) = (a)-(b)+(c) Twelve Months Six Months Six Months Trailing Twelve Ended Ended Ended Months Ended (TTM) ($ millions) August 2, 2020 January 26, 2020 January 31, 2021 January 31, 2021 Adjusted Earnings before interest and taxes $ 1,449
Slide 41: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions) (a) (b) = (a) – (b) Twelve Months Six Months Six Months Ended Ended Ended July 28, 2019 January 27, 2019 July 28, 2019 Net Sales, As Reported $ 8,107 $ 4,374 $ 3,733 Impact of Divestiture (129) (60) (69) Net Sa
Slide 42: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions) (a) (b) = (a) - (b) Twelve Months Six Months Six Months Ended Ended Ended July 28, 2019 January 27, 2019 July 28, 2019 EBIT – As Reported $ 979 $ 651 $ 328 Add: Restructuring charges, implementation costs and o
Slide 43: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures ` (a) (b) = (a) - (b) Continuing Operations Twelve Months Six Months Six Months ($ millions, except per share amounts) Ended Ended Ended July 28, 2019 January 27, 2019 July 28, 2019 Earnings – As Reported $ 474 $ 356 $ 118 Add: Restructuring cha
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