Hormel Foods Corporation · NYSE:HRL
Hormel Foods — dbAccess Global Consumer Conference 2018
30 slides from Hormel Foods's conference presentation, Jun 11, 2018
Slide 1: dbAccess Global Consumer Conference
dbAccess Global Consumer Conference
Slide 2: Jim Snee, Chairman, President, and CEO
Jim Snee Chairman, President, and CEO
Slide 3: Legal Disclosure
Legal Disclosure This presentation contains forward-looking information based on management’s current views and assumptions. Actual events may differ materially. Please refer to the cautionary statement regarding Forward- Looking Statements and Risk Factors on pages 34-40 in the Company’s Form 10-Q
Slide 4: Why Hormel Foods?
Why Hormel Foods? • TRACK RECORD OF SUCCESS • Highly Differentiated Business Model • A Clear Strategy For Long-Term Growth
Slide 5: Includes 2018 declared increase
* *Includes 2018 declared increase
Slide 6: Strong, Branded Presence Across the Food Space
Strong, Branded Presence Across the Food Space *IRI 52 weeks ending 10/22/2017 - MULO
Slide 7: Hormel Foods: A Global Branded Food Company
Hormel Foods: A Global Branded Food Company International 7% U.S. Retail 54% U.S. Deli 9% Net U.S. Foodservice 28% 27% Sales *Fiscal 2018, H1 Data
Slide 8: A History of Growth, Transformation and Evolution
A History of Growth, Transformation and Evolution 1997 2017 INNOVATIONS A COMMODITY A GLOBAL BRANDED COMPANY FOOD COMPANY MERGERS & ACQUISITIONS $3.1 BILLION $9.2 BILLION NET SALES NET SALES 5.5% 14.0% OPERATING OPERATING MARGIN MARGIN *Internal data
Slide 9: We Have Grown Earnings 28 Out of 32 Years
We Have Grown Earnings 28 Out of 32 Years 2018 EPS Guidance $1.81 - $1.95 +15% - 24% $2.00 $1.50 $1.00 $0.50 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 *Internal data
Slide 10: Disciplined and Strategic Capital Allocation
Disciplined and Strategic Capital Allocation INVESTING $5.0B Cash from Operations RETURNING IN THE CASH TO BUSINESS 2013 – 2018 Q2 SHAREHOLDERS CAPEX ACQUISITIONS DIVIDENDS REPURCHASES $1.0B $985 $2,362 $3.6B $0.4B $1.5B *Internal data
Slide 11: Disciplined Investments Deliver High ROIC
Disciplined Investments Deliver High ROIC ROIC 17% % 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 PEERS *Factset data based on fiscal 2013-2017 data for Hormel Foods and time relative data for peers listed in Company 2017 proxy statement.
Slide 12: Commitment to Returning Cash to Our Shareholders
Commitment to Returning Cash to Our Shareholders Dividends Per Share *Internal data; includes 2018 declared increase
Slide 13: Why Hormel Foods?
Why Hormel Foods? • Track Record of Success • HIGHLY DIFFERENTIATED BUSINESS MODEL • A Clear Strategy For Long-Term Growth
Slide 14: A Highly Differentiated Business Model
A Highly Differentiated Business Model Leveraging Unmatched Strengths 1. Maintaining & Growing Leading Brands 2. Direct Sales Forces in Retail, Deli & Foodservice 3. Insight-Driven Innovation & Marketing 4. Unique Ownership & Culture 5. Strong Financial Position
Slide 15: Leading Market Shares
Leading 39% 89% Market Shares 56% 34% 36% 42% 42% *IRI 52 weeks ending 4/22/2018 – MULO; **SPINS 52 weeks ending 4/22/2018 – Total US Natural (excluding Trader Joes)
Slide 16: A Customer-Focused, Solutions-Based Direct Sales Force
A Customer-Focused, Solutions-Based Direct Sales Force OVER 800 SALES PROFESSIONALS Retail Foodservice Deli • Relationship Driven • Understanding of Needs and Challenges • Insight Leadership
Slide 17: Industry-Leading Innovation Firsts
1 st 1 st Industry-Leading, Utilizing Pre-Cooked Canned Meat Innovation Firsts High Pressure Pasteurization for Lunchmeat 1 st “Originate, st Using Don’t Imitate.” 1 Pillow Pack ® Freezer-to-Oven Packaging Turkey Products Technology – George A. Hormel st st 1 st 1 1 Fortified, Shelf- Perfectly Cooke
Slide 18: Unique Ownership and Culture
Unique Ownership And Culture
Slide 19: Strong Financial Position
Strong Financial Cash from Operations Position $1,038 M $282M 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 *Internal data
Slide 20: Why Hormel Foods?
Why Hormel Foods? • Track Record of Success • Highly Differentiated Business Model • A CLEAR STRATEGY FOR LONG-TERM GROWTH
Slide 21: Our Formula for Success
Our Formula for Success Building Innovation Acquisitions Balanced Brands Portfolio + + +
Slide 22: Hormel Foods Our Path Forward
Hormel Foods Our Path Forward % Priorities from Investor Day - June 2017 EVOLVING to a broader food company 5 TOP LINE GROWTH % EXPANDING and accelerating foodservice BECOMING a more global food company 10 BOTTOM LINE GROWTH % REDUCING volatility and increasing balance 15 INNOVATION BY 2020 DIVESTIN
Slide 23: Evolving to a Broader Food Company
Evolving to a Broader Food Company Meat Protein Company Broader Food Company Non-Meat Protein + Flavor Enhancers
Slide 24: Expanding and Accelerating Foodservice
Expanding and Accelerating Foodservice
Slide 25: Becoming a More Global Food Company
Becoming a More Global Food Company Recreating the U.S. Model Globally China Capacity Geographic Lbs Expansion 1. #1 or #2 brands Approximately 2. Product mix – shelf-stable & +2x 160M perishable Approximately 3. Channel mix – foodservice & retail 80M At Full Production 4. No vertical integration 20
Slide 26: Reducing Volatility and Increasing Balance
Reducing Volatility and Increasing Balance Protein Packaged Foods Reducing Volatility By: 1. Continuing to shift our mix Retail Foodservice to value-added products Domestic International 2. Minimizing commodity sales 3. Expanding our portfolio of Beef, Nuts, Tomatoes Pork and Turkey raw materials an
Slide 27: Modernizing Our Supply Chain
Modernizing Our Supply Chain SIMPLIFY MORE THAN MORE THAN MORE THAN MODERNIZE 30 PRODUCTION BROAD CO-PACKER 10,000 10,000 OPTIMIZE FACILITIES NETWORK SUPPLY ITEMS SKUs RATIONALIZE Internal data
Slide 28: Supply Chain Integration on Track
Supply Chain Integration on Track
Slide 29: Hormel Foods A Long-Term Growth Story
Hormel Foods A Long-Term Growth Story • Track Record of Success • Highly Differentiated Business Model • A Clear Strategy For Long-Term Growth
Slide 30: dbAccess Global Consumer Conference
dbAccess Global Consumer Conference
Hormel Foods — dbAccess Global Consumer Conference 2018 on 6ix