Hormel Foods Corporation · NYSE:HRL
Hormel Foods — BMO Farm to Market Conference 2015
21 slides from Hormel Foods's conference presentation, May 20, 2015
Slide 1: Jeff Ettinger, Chairman, President and CEO
Jeff Ettinger Chairman, President and CEO 1
Slide 2: 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 29-36 in the Company’s Form 10-Q f
Slide 3: 2015 Second Quarter Results
2015 Second Quarter Results Revenue Earnings per share In millions 2014 Q2 $2,245 2014 Q2 $0.52 2015 Q2 $2,279 2015 Q2 $0.67 + 2% + 29% • Record sales and earnings for the quarter • All five segments delivered operating profit growth
Slide 4: 2015 Second Quarter Segment Results
2015 Second Quarter Segment Results Net Sales Segment Profit Change Change Grocery Products + 1% + 1% Refrigerated Foods - 8% + 52% Jennie-O Turkey Store + 15% + 41% Specialty Foods + 32% + 11% International & Other - 7% + 2% 4
Slide 5: 2015 Outlook: Growth Amidst Volatility
2015 Outlook Growth Amidst Volatility EPS* Grocery Products and Refrigerated Foods + 12% to 17% Input cost deflation $2.50 to Specialty Foods $2.23 $2.60 Improved 2H15 contribution from CytoSport International Growth in China Jennie-O Turkey Store Avian Influenza 2014 2015 *2015 EPS range excludes p
Slide 6: Avian Influenza
Avian Influenza • Turkey impact greatest in Minnesota • Approximately 55 farms affected in the Jennie-O Turkey Store supply chain • Spread of virus seems to be slowing in Minnesota • Continuing to work with USDA, APHIS, and other veterinary organizations • Jennie-O Turkey Store projected impact • 2H
Slide 7: Strong Brands Supporting Growth
Strong Brands Supporting Growth 7
Slide 8: Supporting Brand Growth
( Hormel ) Foods Supporting Brand Growth
Slide 9: Recent Acquisitions
Recent Acquisitions Complement Growth and Diversify Portfolio 9
Slide 10: Accelerating Growth: New Product Development
Accelerating Growth New Product Development 10
Slide 11: Distribution Growth
Distribution Growth Percent of Individuals Consuming Distribution Growth Hormel Foods Products + 8% 35 CAGR 30 29 25 24 23 20 21 21 19 18 15 17 16 10 13 5 0 2010 2011 2012 2013 2014 96 98 00 02 04 06 08 10 12 14 IRI Total US – Multi Outlet - 12/2010 thru 12/2014 – Reported in an average two week per
Slide 12: Long Runway for Growth
Long Runway for Growth Low Household Penetration (HHP) Refrigerated Turkey Burgers 3% REV® 4% Party Trays 6% Hormel® Guacamole 7% Category 6% Category 30% Category 7% Natural Choice® 7% Category 14% Category 80% Hormel® COMPLEATS® 9% SPAM® 12% Ground Turkey 13% Pepperoni 22% Category 14% Category 14
Slide 13: Recent Trip to London
y (Hormel Foods BMO CAPITAL MARKETS Recent Trip to London FINANCIAL TIMES WORLD BUSINESS NEWSPAPER Warren’s buffet OOD A it OS Se Mondelez : CampbellSoup : General Mills: Kellogg Co : Hormel Foods : Hershey JM Smucker 138 120 £124 #49119 £124 £135 119 FT Graphic. Sources: Bloomberg; S&P Capital IQ;
Slide 14: Small Town Headquarters
Small Town Headquarters Austin, Minnesota • Fosters long-term careers • Good corporate citizen • Financially conservative • Foundation ownership enables long-term financial perspective Town of 25,000 located in Southern Minnesota 14
Slide 15: Dividend Growth
Dividend Growth + 19% +25% Dividend Stock Performance $1.00 HRL $0.80 $0.68 .SPX $0.42 15
Slide 16: Investing for the Future
Investing for the Future (2010-2014) Generating consistent and strong free cash flow $2.9 billion invested or returned to shareholders since 2010 Return to Shareholders Invest in the Business (Share Repurchase and Dividends) (Capex and M&A) $1,200,000 $900,000 $600,000 $300,000 $0 Share Dividends Ca
Slide 17: Talented Experienced Team
Talented Experienced Team Senior Management Team Average 26 YEARS TENURE 17
Slide 18: Thriving Vital Portfolio
Thriving Vital Portfolio FOUNDATION SHARING FOSTER OWNERSHIP PROFITS SUSTAINABILITY LONG-TERM EFFORTS CAREERS Small conservative good Talented, Town HQ financially corporate experienced team citizen
Slide 19: Financial Performance Goals
Financial Performance Goals 5% Revenue Growth 10% Operating Income Growth $3 Billion by 2016 New Product Development New Products Introduced Since 2000 <1% Operating Expense Growth 19
Slide 20: Sales and EPS Growth
Sales and EPS Growth Exceeding long-term targets Sales EPS + 7% + 12% billions CAGR CAGR $10.00 + 6% $2.50 $9.3 $2.23 $8.00 $2.00 $6.00 $6.5 $1.50 $1.27 $4.00 $1.00 $2.00 $0.50 $0.00 $0.00 09 10 11 12 13 14 09 10 11 12 13 14 20
Slide 21: (Hormel! )
4 (Hormel! ) Foods BMO CAPITAL MARKETS Reis Farm to Market anference \S