The J.m. Smucker Company · NYSE:SJM
The J.m. Smucker — Deutsche Bank dbAccess Global Consumer Conference 2015
35 slides from The J.m. Smucker's conference presentation, Jun 10, 2015
Slide 1: dbAccess Global Consumer Conference
The J. M. Smucker Company June 10, 2015 dbAccess Global Consumer Conference The J. M. Smucker Company June 10, 2015 Vince Byrd Vice Chairman 2 dbAccess Global Consumer Conference 1
Slide 2: The J. M. Smucker Company
The J. M. Smucker Company June 10, 2015 The J. M. Smucker Company Vince Byrd Vice Chairman Dave West President, U.S. Retail Pet Foods Mark Belgya Chief Financial Officer Aaron Broholm Director, Investor Relations dbAccess Global Consumer Conference 2
Slide 3: $13 Billion Market Cap
The J. M. Smucker Company June 10, 2015 $13 BILLION MARKET CAP $13.3B $800M 2002 2015 Market cap as of April 30, 2002 and June 5, 2015, respectively 6 dbAccess Global Consumer Conference 3
Slide 4: Our Purpose Our Foundation
The J. M. Smucker Company June 10, 2015 OUR PURPOSE “Helping to bring families together to share memorable meals and moments.” 7 OUR FOUNDATION VISION Own and market North America food brands that hold the #1 Market Position in their respective category CORE COMPETENCIES Building Emotional Bonds Dev
Slide 5: The J. M. Smucker Company June 10, 2015 dbAccess Global Consumer Conference
The J. M. Smucker Company June 10, 2015 10 dbAccess Global Consumer Conference 5
Slide 6: 8th Largest: Transformational Growth Through Acquisitions
The J. M. Smucker Company June 10, 2015 Transformational Growth Through Acquisitions NET SALES (in billions) $8.0 $5.5 $3.8 $2.0 $1.3 $0.6 FY02 FY03 FY05 FY09 FY12 FY16E 11 Attractive and Resilient Categories FY15 PRO FORMA SALES BY CATEGORY* 8th LARGEST Other 17% Baking Mixes and Frosting 4% Coffee
Slide 7: Strong Track Record of Innovation
The J. M. Smucker Company June 10, 2015 Strong Track Record of Innovation $370M 7 % FY15 TOTAL COMPANY NET SALES* FY15 NET SALES *Represents “net sales from new products” defined as sales from products introduced in the past three fiscal years 14 dbAccess Global Consumer Conference 7
Slide 8: Meeting Changing Consumer Preferences
The J. M. Smucker Company June 10, 2015 Meeting Changing Consumer Preferences SIMPLE PROTEIN CONVENIENCE INDULGENCE INGREDIENTS 15 dbAccess Global Consumer Conference 8
Slide 9: U.S. Retail Markets
The J. M. Smucker Company June 10, 2015 U.S. RETAIL MARKETS U.S. RETAIL COFFEE U.S. RETAIL CONSUMER FOODS U.S. RETAIL PET FOODS Steve Oakland, President Mark Smucker, President Dave West, President 17 Int’l, Foodservice, and Natural Foods Segment INTERNATIONAL FOODSERVICE NATURAL FOODS 18 dbAccess G
Slide 10: U.S. At-Home Coffee Category
The J. M. Smucker Company June 10, 2015 U.S. At-Home Coffee Category $5.8 Billion $9.0 Billion 2% 37% 5% 6% 8% 6% 11% 31% 23% 47% 30% 2011 2015 Mainstream R&G Premium Instant K-Cup Other Source: Smucker Internal Multi-Outlet Share Report 52 weeks ended January 30, 2011 and May 17, 2015, respectively
Slide 11: Leader in Mainstream Coffee
The J. M. Smucker Company June 10, 2015 Leader in Mainstream Coffee $2.7 Billion Mainstream Roast & Ground Segment Private Label Other #1 53 DOLLAR SHARE Smucker #2 Competitor Source: Smucker Internal Multi-Outlet Share Report 52 weeks ended May 17, 2015 21 Supporting Mainstream Coffee Growth LOWER
Slide 12: The J. M. Smucker Company June 10, 2015 dbAccess Global Consumer Conference
The J. M. Smucker Company June 10, 2015 24 dbAccess Global Consumer Conference 12
Slide 13: U.S. Retail Coffee Summary
The J. M. Smucker Company June 10, 2015 25 U.S. RETAIL COFFEE SUMMARY Branded Leadership Position Continued Innovation Efforts Price and Cost Management 26 dbAccess Global Consumer Conference 13
Slide 14: U.S. Retail Consumer Foods
The J. M. Smucker Company June 10, 2015 Dave West President, U.S. Retail Pet Foods 27 U.S. RETAIL CONSUMER FOODS 28 dbAccess Global Consumer Conference 14
Slide 15: Leader in Peanut Butter and Fruit Spreads
The J. M. Smucker Company June 10, 2015 Leader in Peanut Butter and Fruit Spreads $1.9 Billion $925 Million Peanut Butter Category Fruit Spreads Category DOLLAR SHARE 46 44 DOLLAR SHARE Source: Smucker Internal Multi-Outlet Share Report 52 weeks ended May 17, 2015 30 dbAccess Global Consumer Confere
Slide 16: Commitment to Innovation
The J. M. Smucker Company June 10, 2015 Commitment to INNOVATION Providing Consumers Choices New Flavors, Forms, and Packaging Simple, Natural Ingredients 31 Jif Peanut Hazelnut BARS Powder Swirls Capitalizing on First National Brand First Swirled Spread in $5 Billion to Enter Peanut Powder Category
Slide 17: Uncrustables Sandwiches; Welcoming Big Heart Pet Brands
The J. M. Smucker Company June 10, 2015 Uncrustables Sandwiches 1 MILLION SANDWICHES PRODUCED EACH DAY 33 The J. M. Smucker Company Welcomes Big Heart Pet Brands to the Family A leading producer, distributor, and marketer of premium-quality branded pet food and pet snacks in the U.S. 34 dbAccess Glo
Slide 18: Pet Food and Snacks Category Overview
The J. M. Smucker Company June 10, 2015 Pet Food and Snacks Category Overview U.S. Pet Food Category Retail Sales $21B Cat Snacks 3% Wet Cat 12% TOTAL CATEGORY SALES Dry Cat 15% Dry Dog 46% Dog Food Cat Food & Snacks & Snacks Dog Snacks $15B $6B 14% Wet Dog 10% Source: Smucker Internal Database, All
Slide 19: U.S. Retail Pet Foods
The J. M. Smucker Company June 10, 2015 U.S. Retail Pet Foods 37 dbAccess Global Consumer Conference 19
Slide 20: #1 Position, Channel Exclusive Brands
The J. M. Smucker Company June 10, 2015 #1 POSITION IN DOG SNACKS 52 Week Dollar Share of Dog Snacks Category Retail Sales $2.2 Billion Dog Snacks Category ($ in billions) 38 $2.2 $2.0 $2.0 $1.9 23 $1.8 12 11 #1 #2 #3 Private 2011 2012 2013 2014 2015 Competitor Competitor Label Consistent Growth Sou
Slide 21: Pet Specialty is Large and Growing Rapidly
The J. M. Smucker Company June 10, 2015 Pet Specialty is Large and Growing Rapidly U.S. Pet Food Retail Sales Growth Pet Specialty Outlets 3-Year CAGR by Channel Store Count and Retail Sales by Type ($ in millions) +200bps +5% 8,296 Store Count Sales +3% $4,871 2,942 $2,512 +3% vs YA All Channels Pe
Slide 22: Mark Belgya, Chief Financial Officer
The J. M. Smucker Company June 10, 2015 Mark Belgya Chief Financial Officer 43 dbAccess Global Consumer Conference 22
Slide 23: History of Growth
The J. M. Smucker Company June 10, 2015 Non-GAAP financial results reflect April 30, 2015 year end, excluding the impact of the Pet Food business and financing costs associated with the transaction History of Growth Net Sales EPS EBITDA ($ in billions) (Non-GAAP) ($ in billions) $5.4 $5.38 $1.1 $4.6
Slide 24: FY16 EPS Guidance
The J. M. Smucker Company June 10, 2015 FY16 EPS Guidance LOW HIGH Non-GAAP EPS $5.65 $5.80 Amortization Per Share 1.15 1.15 Adjusted EPS $6.80 $6.95 Approximately 15% increase over the comparable FY15 measure, assuming midpoint of this range. 48 dbAccess Global Consumer Conference 24
Slide 25: FY16 Outlook By Segment
The J. M. Smucker Company June 10, 2015 FY16 Outlook By Segment NET SEGMENT SEGMENT DRIVERS SALES PROFIT Dunkin’ Donuts K-Cups Coffee Favorable green coffee costs New product launches Consumer Foods Peanut butter facility overhead Int’l, Foodservice, Foreign currency headwind and Natural Foods Growt
Slide 26: Investing in Our Business
The J. M. Smucker Company June 10, 2015 INVESTING in Our Business Cash from Operations APPROXIMATELY $800M (in millions) INVESTED IN OUR SUPPLY CHAIN $1,200 $1,050 Consolidated coffee production $1,000 $856 $800 $713 Expanded peanut butter capacity $600 Constructed state-of-the-art fruit $400 spread
Slide 27: Cash Deployment Strategy
The J. M. Smucker Company June 10, 2015 Consistent History of Growing Dividends $2.50 $1.00 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 53 Cash Deployment Strategy Cash from Operations Expected to Average $1.2B Annually Over Next 5 Years CapEx Debt Annual CapEx of 3-3½% of net sales Repay
Slide 28: Keys to Future Growth
The J. M. Smucker Company June 10, 2015 Pro Forma Debt Repayment As of April 30, ($ in billions) 2015 2016 2017 2018 2019 Debt Balance $6.2 $5.8 $5.3 $4.8 $4.3 Leverage 4.1x 3.7x 3.0x 2.6x 2.1x 55 Keys to Future Growth CAPITALIZING ON STRENGTHENING EXECUTING ON INCREASING SYNERGIES FROM LEADERSHIP I
Slide 29: Forward Looking Statement
The J. M. Smucker Company June 10, 2015 The J. M. Smucker Company Forward Looking Statement This presentation contains forward-looking statements, such as projected net sales, operating results, earnings, and cash flows, that are subject to known and unknown risks and uncertainties that could cause
Slide 30: Non-GAAP Measures
The J. M. Smucker Company June 10, 2015 The J. M. Smucker Company Non-GAAP Measures The Company uses non-GAAP financial measures including: net sales adjusted for the noncomparable impact of the Big Heart Pet Brands (“Big Heart”) acquisition; operating income, income, and income per diluted share, e
Slide 31: Non-GAAP Reconciliation
The J. M. Smucker Company June 10, 2015 The J. M. Smucker Company Non-GAAP Reconciliation ($ in millions) Year Ended April 30, 2015 Adjusted operating income before Big Heart and excluding certain items affecting comparability Operating income excluding certain items affecting comparability Reconcil
Slide 32: Non-GAAP Reconciliation
The J. M. Smucker Company June 10, 2015 The J. M. Smucker Company Non-GAAP Reconciliation ($ in millions) Year Ended April 30, 2015 Before Tax After Tax Adjusted income before Big Heart and excluding certain items affecting comparability Income excluding certain items affecting comparability $ 610.3
Slide 33: Non-GAAP Reconciliation
The J. M. Smucker Company June 10, 2015 The J. M. Smucker Company Non-GAAP Reconciliation ($ in millions) Years Ended April 30, 2015 2010 2005 Earnings before interest, taxes, depreciation, and amortization Reconciliation to net income: Net income $ 344.9 $ 494.1 $ 129.1 Income taxes 178.1 236.6 74.
Slide 34: Non-GAAP Reconciliation
The J. M. Smucker Company June 10, 2015 The J. M. Smucker Company Non-GAAP Reconciliation ($ in millions) Company Guidance Year Ending April 30, 2016 Low High Operating income excluding certain items affecting comparability Reconciliation to operating income: Operating income $ 1,090.0 $ 1,140.0 Spe
Slide 35: Additional Information
The J. M. Smucker Company June 10, 2015 The J. M. Smucker Company Non-GAAP Reconciliation ($ in millions) Company Guidance Year Ending April 30, 2016 Free Cash Flow Reconciliation to cash provided by operating activities: Cash provided by operating activities $ 1,050.0 Additions to property, plant,
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