Brown Forman Inc · NYSE:BF.A
Brown Forman — Investor Day (September 2021)
139 slides from Brown Forman's investor day presentation, Sep 2, 2021
Slide 1: Virtual Investor Day
Virtual Investor Day September 2, 2021 BIOGRAPHIES
Slide 2: Lawson Whiting
Lawson Whiting PRESIDENT AND CHIEF EXECUTIVE OFFICER Lawson Whiting is the president and chief executive officer of Brown-Forman Corporation. Lawson has served on the company’s Executive Leadership Team since 2013. Prior to being appointed CEO, he served as executive vice president and chief operati
Slide 3: Matias Bentel
Matias Bentel SVP CHIEF BRANDS OFFICER Matias Bentel is the chief brands officer and a senior vice president of Brown-Forman Corporation. He is responsible for the global marketing function. Matias joined Brown Forman in 2008 as Marketing Director for Latin America & Caribbean. He became Chief of St
Slide 4: Sophia Angelis
Sophia Angelis SVP MANAGING DIRECTOR, JACK DANIEL’S BRANDS Sophia Angelis started her career with Brown-Forman in 2001 as Marketing Manager for Southern Comfort in the UK & Ireland. Over the course of the next twenty years, she held a variety of local, regional and global marketing roles. She set up
Slide 5: John Hayes
John Hayes SVP PRESIDENT, USA & CANADA John Hayes is the senior vice president and president for the United States of America and Canada commercial organization. John has served on the Executive Leadership Team since 2013. He joined Brown-Forman in 1987 as the marketing services manager for Brown-Fo
Slide 6: Marshall Farrer
Marshall Farrer SVP PRESIDENT, EUROPE Marshall Farrer is president, Europe division, Brown-Forman. He serves on Brown-Forman’s Executive Leadership Team, the Board of Directors, and is executive co-sponsor for the Supporting and Elevating Ethnic Diversity (SEED) employee resource group. Farrer began
Slide 7: Thomas Hinrichs
Thomas Hinrichs SVP PRESIDENT, EMERGING INTERNATIONAL Thomas Hinrichs is president, Emerging International division, Brown-Forman. He also serves on Brown-Forman’s Executive Leadership Team and is executive co-sponsor for the Growing Remarkable and Outstanding Women (GROW) employee resource group. H
Slide 8: Alex Alvarez
Alex Alvarez SVP CHIEF PRODUCTION AND SUSTAINABILITY OFFICER Alex Alvarez is the senior vice president, chief production and sustainability officer for Brown-Forman. Alex has served on the Executive Leadership Team since 2014. He leads the Brown-Forman global supply chain which includes our manufact
Slide 9: Kirsten Hawley
Kirsten Hawley SVP CHIEF PEOPLE, PLACES, & COMMUNICATIONS OFFICER Kirsten Hawley is the senior vice president, chief people, places, and communications officer. Kirsten has served on the Executive Leadership Team since 2013. She has worked at Brown-Forman for over two decades and has served in a var
Slide 10: Ralph de Chabert
Ralph de Chabert SVP CHIEF DIVERSITY INCLUSION/GLOBAL COMMUNITY RELATIONS OFFICER Ralph de Chabert serves as the senior vice president, chief diversity and global community relations officer for Brown-Forman. Ralph has served on the Executive Leadership Team since 2015. In this role, he leads our di
Slide 11: Leanne Cunningham
Leanne Cunningham SVP CHIEF FINANCIAL OFFICER Leanne Cunningham has progressed through a series of roles including accounting and finance, corporate strategy, and production operations leadership since joining the organization in 1995. Most recently she served as senior vice president, shareholders
Slide 12: Campbell Brown
Campbell Brown BOARD CHAIR As a fifth-generation descendant of Brown-Forman and Old Forester founder, George Garvin Brown, Board Chair Campbell Brown has intimate knowledge, understanding and passion for Brown-Forman. He knows that what happens to Brown-Forman not only affects his family, but the Lo
Slide 13: Sue Perram
Sue Perram DIRECTOR INVESTOR RELATIONS Sue Perram is Director Investor Relations. Perram started her career with Brown-Forman in 2009 as the Brand Analytics Manager for Southern Comfort and Finlandia in the North American region. Over the next decade, she held a variety of local, regional and global
Slide 14: Virtual Investor Day: Presentation Slides
Virtual Investor Day September 2, 2021 PRESENTATION SLIDES
Slide 15: Sue Perram
Sue Perram DIRECTOR INVESTOR RELATIONS
Slide 16: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation contains statements, estimates, and projections that are “forward-looking statements” as defined under U.S. federal securities laws. Words such as “aim,” “anticipate,” “aspire,” “believe,” “can,” “continue,” “could,” “envision,” “estimate,” “expect,” “exp
Slide 17: 2021 Brown-Forman Virtual Investor Day Agenda
Sue Perram Director Investor Relations 2021 Brown-Forman Lawson Whiting President and Chief Executive Officer Virtual Investor Day Matias Bentel SVP Chief Brands Officer Agenda Sophia Angelis SVP Managing Director – Jack Daniel’s Brands John Hayes SVP President - USA & Canada September 2, 2021 Marsh
Slide 18: Lawson Whiting
Lawson Whiting PRESIDENT AND CHIEF EXECUTIVE OFFICER
Slide 19: Slide 19
Slide 20: Portfolio
PORTFOLIO Lead in Premium American Whiskey and increase focus on Super Premium Portfolio Categories Premiumization
Slide 21: Geography
GEOGRAPHY Deliver balanced geographic growth and competitive routes to consumer Developed International United States Emerging International Travel Retail Non-branded and Bulk
Slide 22: Investment
INVESTMENT Deliver top-tier TSR through shareholder-friendly capital allocation & balanced investments to fuel growth Invest in the business Pay increasing dividends Return cash to shareholders
Slide 23: People
PEOPLE Empower our people to lead beyond their roles, rapidly develop new capabilities, and live by our timeless values
Slide 24: Environmental. Social. Governance.
ENVIRONMENTAL. SOCIAL. GOVERNANCE.
Slide 25: Environmental. Social. Governance.
ENVIRONMENTAL. SOCIAL. GOVERNANCE.
Slide 26: Slide 26
Slide 27: Matias Bentel
VIDEO PLACEHOLDER Matias Bentel SVP CHIEF BRANDS OFFICER
Slide 28: Our Winning Portfolio
Our WINNING Portfolio
Slide 29: Jack Daniel's Family of Brands
Jack Daniel’s Family of Brands
Slide 30: Super Premium American Whiskey
Super Premium American Whiskey
Slide 31: Tequila Portfolio
Tequila Portfolio
Slide 32: Emerging Brands
Emerging Brands
Slide 33: Ready-to-Drink
Ready-to-Drink
Slide 34: World-class creative, industry-leading marketing organization
World-class creative Industry-leading Increased media marketing spend organization Reimagining Digital & eCommerce innovation (Now IMC)
Slide 35: World-Class Creative
WORLD-CLASS CREATIVE Identified Best-in-class Partners Revised Brand Positioning Enhanced Creative Development Process
Slide 36: Make It Count
you ey MAKE IT
Slide 37: Increasing Media Spend
INCREASING MEDIA SPEND Gaining Share of Voice in 8 of top 10 BMUs
Slide 38: Engaging Consumers in a Digital World
ENGAGING CONSUMERS IN A DIGITAL E-COMMERCE MEDIA PERFORMANCE SEARCH CONTENT WORLD
Slide 39: Jack Daniel's social media campaign recap video
(Jack Daniel’s social media campaign recap video)
Slide 40: Driving Innovation at Scale
VING INNOVATION AT SCALE FEWER. BIGGER. BETTER.
Slide 41: Industry-Leading Marketing Organization
INDUSTRY-LEADING MARKETING ORGANIZATION Next Generation Talent Diversity & Inclusion World Class Marketing Capabilities
Slide 42: Sophia Angelis
VIDEO PLACEHOLDER Sophia Angelis SVP Managing Director, Jack Daniel’s Brands
Slide 43: A Long Runway for Growth
A LONG RUNWAY FOR GROWTH } i : ig ba Ao Z re 1& Cs
Slide 44: Strategic Priorities
STRATEGIC PRIORITIES JDTW Growth Portfolio Premiumization New Consumers & Occasions
Slide 45: Starting From a Position of Strength
STARTING FROM A POSITION OF STRENGTH 2000 – 2020 Retail Sales Value JACK DANIEL’S SMIRNOFF HENNESSY JOHNNIE WALKER BACARDI TITO’S MARTELL JIM BEAM CAPTAIN MORGAN CROWN ROYAL $0 $6,000,000
Slide 46: Enable Growth on JDTW
ENABLE GROWTH ON JDTW Recruit Next Generation of Consumers Geographic Expansion
Slide 47: ta4.— &
ta4.— 14 &
Slide 48: It's Not So Much a Bottle of Whiskey
IT’S NOT SO MUCH A BOTTLE OF WHISKEY... INVITATION TO ‘¢ B OLD MAKE IT
Slide 49: Slide 49
Slide 50: Always Go Against the Grain
ALWAYS GO AGAINST “GRAIN EXCEPT WHEN MAKING , WHISKEY |!
Slide 51: Jack Daniel's Make it Count commercial video
(Jack Daniel’s “Make it Count” commercial video)
Slide 52: Early Campaign Indicators Are Very Positive
EARLY CAMPAIGN INDICATORS ARE VERY POSITIVE Advertising awareness increases Campaign recognition & unique attribution Brand imagery increases Reaches & engages next gen consumers
Slide 53: Slide 53
Slide 54: Attractive Category With Continued Momentum
ATTRACTIVE CATEGORY WITH CONTINUED MOMENTUM 8% 9% 7% 7% 11% 7% 7% 6% 4% 9%
Slide 55: Jack Daniel's Share of Each Category
JACK DANIEL’S SHARE OF EACH CATEGORY P+ US P+ TDS Whiskey Whiskey 38% 13% 2%
Slide 56: Opportunity for Geographic Expansion
OPPORTUNITY FOR GEOGRAPHIC EXPANSION
Slide 57: Opportunity for Geographic Expansion
OPPORTUNITY FOR GEOGRAPHIC EXPANSION JD over-indexes JW
Slide 58: Opportunity for Geographic Expansion
OPPORTUNITY FOR GEOGRAPHIC EXPANSION JD over-indexes JW JD at parity with JW
Slide 59: Opportunity for Geographic Expansion
OPPORTUNITY FOR GEOGRAPHIC EXPANSION JD over-indexes JW JD at parity with JW JD under-indexes JW
Slide 60: Accelerate Portfolio Premiumization
ACCELERATE PORTFOLIO PREMIUMIZATION Geographic Expansion Portfolio Development & Innovation
Slide 61: Gentleman Jack Milestones commercial video
(Gentleman Jack “Milestones” commercial video)
Slide 62: Getting Our Fair Share of Super Premium Whiskey
GETTING OUR FAIR SHARE OF SUPER PREMIUM WHISKEY JD Super Premium Whiskey Growth 2010 - 2020 7% Total SP+ Whiskey ’20-’25 CAGR 2010 2020 GENTLEMAN JACK SINGLE BARREL OTHER
Slide 63: Getting Our Fair Share of Super Premium Whiskey
GETTING OUR FAIR SHARE OF SUPER PREMIUM WHISKEY JOHNNIE WALKER JACK DANIEL’S STANDARD PREMIUM SUPER PREMIUM+
Slide 64: New Consumers + Occasions
NEW CONSUMERS + OCCASIONS Portfolio Growth & Innovation Geographic Expansion
Slide 65: New Consumers + Occasions
NEW CONSUMERS + OCCASIONS Portfolio Growth & Innovation Geographic Expansion
Slide 66: Slide 66
Slide 67: Leverage Momentum on Flavors
LEVERAGE MOMENTUM ON FLAVORS JD Flavor Growth 2010 - 2020 7% Flavored Whiskey Category ’20-’25 CAGR 2011 2020 JDTH JDTF JDTA
Slide 68: Jack Daniel's RTD product
“arrue LigueUR ENDED WITH JACK DANIELS
Slide 69: Leverage Momentum on RTDs
LEVERAGE MOMENTUM ON RTDs JD RTD Growth 2010 - 2020 13% Total RTD ’20-’25 CAGR 2010 2020 JD & COLA JD COUNTRY COCKTAILS OTHER JD RTDs
Slide 70: Slide 70
Slide 71: A Long Runway for Growth
A LONG RUNWAY FOR GROWTH ATTRACTIVE CATEGORY POSITION OF STRENGTH PORTFOLIO DEVELOPMENT GEOGRAPHIC EXPANSION
Slide 72: Cheers
CHEERS TO BEING ABLE TO CHEERS & yong MAKE IT COUNT HERE'S TO US ALL. SIP RESPONSIBLY.
Slide 73: John Hayes
John Hayes SVP PRESIDENT, USA & CANADA
Slide 74: USA + Canada Portfolio
USA + CANADA PORTFOLIO
Slide 75: Current Growth Drivers
CURRENT GROWTH DRIVERS +10% AMERICAN WHISKEY +11% TEQUILA
Slide 76: Future Growth Drivers
FUTURE GROWTH DRIVERS +14% IRISH WHISKEY +11% SINGLE MALTS
Slide 77: Winning Across the Portfolio
WINNING ACROSS THE P O R T F O L I O Malt- Spirit- Korbel Sonoma- based based Champagne Cutrer RTD RTD
Slide 78: Brown-Forman has the 3rd Most Premium Portfolio
Brown-Forman has the 3rd Most Premium Portfolio 97%
Slide 79: Business Environment
BUSINESS ENVIRONMENT Major Category Strength ( a y/A\N Premiumization + Pricing »\ 14 On-premise Reopening 1
Slide 80: Growth Strategies: Imperatives
GROWTH STRATEGIES IMPERATIVES 1Jack Daniel’s acceleration 2Super Premium Whiskey 3Strength of Tequila business 4Emerging Brands momentum 5Revenue Growth Management
Slide 81: Growth Strategies: Investment
GROWTH STRATEGIES INVESTMENT 1Make It Count 2Woodford Reserve and Herradura campaigns 3ePremise investment 4Integrated Marketing Communications 5Investment in people + D&I
Slide 82: Marshall Farrer
Marshall Farrer SVP President, Europe
Slide 83: Growing our Portfolio Internationally
Growing our Portfolio Internationally
Slide 84: Spirits is the Winning Category
Spirits is the WINNING CATEGORY… 22% 19% 18% 37% 42% 45% 41% 38% 37%
Slide 85: Super Premium+ is the Winning Segment
…and, Super Premium+ is the WINNING SEGMENT S U P E R P R E M I U M + 12% 13% 16% P R E M I U M 9% 9% 11% V A L U E / S T A N D A R D 79% 78% 73%
Slide 86: Trends Fueling Premiumization
Trends Fueling Premiumization SOPHISTICATED IN-HOME CONSUMPTION
Slide 87: Trends Fueling Premiumization
Trends Fueling Premiumization eCOMMERCE
Slide 88: Trends Fueling Premiumization
Trends Fueling Premiumization BREADTH OF OCCASIONS
Slide 89: Portfolio Capitalizing on the Key Growth Categories
Portfolio Capitalizing on the Key Growth Categories Source: IWSR 2020; Super Premium+ excludes Baiju, category shares
Slide 90: Our Portfolio is Positioned for the Opportunity
Our Portfolio is Positioned for the Opportunity
Slide 91: Strategically Expanding into Key Super Premium+ Markets
We are Strategically Expanding into the KEY Super Premium+ Markets EUROPE AUSTRALIA RUSSIA CHINA
Slide 92: Growth Pillars
Growth Pillars Growing our Portfolio Internationally PORTFOLIO INVESTMENT PEOPLE RTC
Slide 93: Thomas Hinrichs
Thomas Hinrichs SVP PRESIDENT, EMERGING INTERNATIONAL
Slide 94: South Korea, Poland
1999 2020 SOUTH POLAND CZECHIA AUSTRALIA MEXICO GERMANY BRAZIL TURKEY FRANCE SPAIN UK THAILAND KOREA
Slide 95: RTC Has Been a Growth Contributor With Significant Opportunity Ahead
RTC HAS BEEN A GROWTH CONTRIBUTOR WITH SIGNIFICANT OPPORTUNITY STILL AHEAD 82% AVERAGE OD% 3RD PARTY OWN DISTRIBUTION DIAGEO PERNOD BEAM BACARDI LVMH WM. CAMPARI EDRINGTON REMY RICARD SUNTORY GRANT COINTREAU
Slide 96: Guiding Principles
GUIDING principles Increased Access To Consumer + Customer Financial Attractiveness Materiality Balanced Risk + Reward Competitive Landscape
Slide 97: Looking Back: UK Own Distribution
LOOKING BACK UK Own Dist., MAY 2020 Unlock B-F portfolio potential Consolidate portfolio to control value chain Win in the biggest spirit market in Europe Build an engaged, competitive, agile organization Nothing Better in the Market
Slide 98: Looking Ahead: Russia Own Distribution
LOOKING AHEAD Russia Own Dist., JULY 2022 Expand distribution + improve execution Invest for the future Long-term growth potential of Russia Limited risk and organization agility gains Gain competitiveness
Slide 99: 5 Minute Break
5 Minute Break
Slide 100: Alex Alvarez
Alex Alvarez SVP Chief Production and Sustainability Officer
Slide 101: Geography, People
GEOGRAPHY PEOPLE
Slide 102: Responsibly growing our brands and company
Responsibly growing our brands and company while protecting and enriching the natural environment on which we depend.
Slide 103: Celebrating a long history of environmental stewardship
Celebrating a long history of environmental stewardship… Climate action Zero waste Water stewardship 20 21
Slide 104: Sustainability Focus Areas
SUSTAINABILITY F CUS AREAS Climate action Water stewardship Circular economy Sustainable packaging Sustainable forestry Sustainable agriculture
Slide 105: Sustainability targets 2021-2030
2021 2025 2030 Engage with 100% of •Halve greenhouse gas (GHG) emissions •Achieve watershed balance for key watersheds Announce new targets farmers on regenerative •100% renewable electricity •Offer 100% recyclable/reusable primary packaging + commitments farming practices •Integrate circular econom
Slide 106: Sustainability targets 2035-2045
2035 2045 Source 50% of white Achieve net-zero GHG oak logs from emissions in our operations sustainable forests and supply chain
Slide 107: Business Integration of Sustainability
BUSINESS INTEGRATION OF SUSTAINABILITY Board Employee and Focus on Increased Leveraging our oversight & external material issues disclosure of voice in policy executive stakeholder sustainability and advocacy leadership engagement performance where appropriate
Slide 108: B-F environmental commitment video
(B-F environmental commitment video)
Slide 109: Kirsten Hawley
Kirsten Hawley SVP CHIEF PEOPLE, PLACES, AND COMMUNICATIONS OFFICER
Slide 110: We know that it's our people that build brands
…we know that it’s our people that build brands… O W S L E Y B R O W N I I
Slide 111: 4,700
4,700 50
Slide 112: Average Tenure
AVERAGE TENURE 11 years US 6 years Europe, Asia, Latin America
Slide 113: USA 55% + ROW 45%
DERERERERERERERERERF USA 55% + ROW 45% Note: Largest percentage of our employees’ metric includes salaried and hourly employees, including individuals that work on a fixed-term or part-time basis, but excluding individuals that work on a temporary basis.
Slide 114: Nearly 56,000 training activities
Nearly 56,000 training activities LEADERSHIP | INCLUSION | BRAND | FINANCE Roughly 8% took on new roles
Slide 115: Global Best Employers
GLOBAL BEST EMPLOYERS BRAZIL FRANCE GERMANY INDIA MEXICO SPAIN UNITED KINGDOM FRANCE 2021
Slide 116: Employee testimonials
I think B-F has done a terrific job in having already invested in the IT capabilities to allow us to work remotely…I think the situation has actually brought us all closer together as teams and people. I work in the on-premise and though challenging, it has been fun creating new ways of working, eng
Slide 117: People priorities
1 Better leverage the Brown-Forman brand 2 Keep investing in leadership development and resilience 3 Foster a culture of inclusion 4 Build agile organizational structures 5 Use analytics to continuously improve the employee experience 6 Develop innovative total rewards
Slide 118: Ralph de Chabert
Ralph de Chabert SVP Chief Diversity Inclusion/Global Community Relations Officer
Slide 119: Geography, People
GEOGRAPHY PEOPLE
Slide 120: Creating an Inclusive Culture
CREATING AN INCLUSIVE CULTURE
Slide 121: Driving Representation Through Accountability
Driving Representation Through Accountability Progress as of April 30, 2021 Women in senior leadership 40% positions globally 39% People of color in our U.S. 25% workforce 19% Women in professional- and 50% leader-level positions globally 48% % Of US charitable 10% contributions to organizations tha
Slide 122: Enriching Life with Moderation & Care
Enriching Life with Moderation & Care
Slide 123: Building Stronger Communities
Building Stronger Communities
Slide 124: Leanne Cunningham
Leanne Cunningham SVP CHIEF FINANCIAL OFFICER
Slide 125: Sustained Net Sales Growth
Sustained Net Sales Growth 5% Underlying Reported NS CAGRs 0% 35 YR 25 YR 15 YR 5 YR FY21
Slide 126: Gross Margin Pressure
Gross Margin Pressure 0.7% -5.5% 69.4% -2.5% -0.5% -1.1% 60.5% FY16 Price/Mix Costs Tariffs F/X Other FY21
Slide 127: Financial Stewardship is Strong
Financial Stewardship is Strong CONSUMER STAPLES COMP SET S&P 500
Slide 128: Investment in the Business, Dividends for 77 Years
INVESTMENT IN THE DIVIDENDS FOR 77 BUSINESS YEARS CASH TO ACQUISITIONS SHAREHOLDERS
Slide 129: $6.6B Cash Returned to Shareholders
Top-Tier Shareholder Return Brown-Forman S&P 500 Comp Set 17% Consumer Staples 14% 13% 11% 2011 $6.6B Cash Returned to Shareholders 2021
Slide 130: Campbell Brown
VIDEO PLACEHOLDER Campbell Brown BOARD CHAIR
Slide 131: 5 Minute Break
5 Minute Break
Slide 132: Q&A
Q&A
Slide 133: Appendix: Reconciliation Documents
Virtual Investor Day September 2, 2021 APPENDIX: RECONCILIATION DOCUMENTS
Slide 134: Non-GAAP Reconciliation
Non-GAAP Reconciliation We use certain financial measures in this presentation that are not measures of financial performance under U.S. generally accepted accounting principles (GAAP). These non-GAAP measures, defined below, should be viewed as supplements to (not substitutes for) our results of op
Slide 135: Definitions
Definitions From time to time, to explain our results of operations or to highlight trends and uncertainties affecting our business, we aggregate markets according to stage of economic development as defined by the International Monetary Fund (IMF), and we aggregate brands by beverage alcohol catego
Slide 136: Definitions
Definitions Other Metrics. “Depletions.” We generally record revenues when we ship our products to our customers. “Depletions” is a term commonly used in the beverage alcohol industry to describe volume. Depending on the context, “depletions” usually means either (a) our shipments directly to retail
Slide 137: Reconciliation of Non-GAAP Underlying Changes
Reconciliation of Non-GAAP Underlying Changes Fiscal year ended April 30, 2017 2018 2019 2020 2021 Change in reported net sales -3% 8% 2% 1% 3% Acquisitions & Divestitures 3% - - - - Foreign exchange 2% -1% 2% 1% -1% Estimated net change in distributor inventories 1% -1% - -2% 4% New accounting stan
Slide 138: Reconciliation of Non-GAAP Underlying Changes
Reconciliation of Non-GAAP Underlying Changes Twelve Months Ended April 30, 2021 Estimated Acquisition Reported Foreign Net Change in Underlying Brand & Change Exchange Distributor Change Divestitures Inventories Wines 10% - - 3% 14% Note: Totals may differ due to rounding 138
Slide 139: Thank You
Virtual Investor Day September 2, 2021 THANK YOU!