Mccormick & Company, Incorporated · NYSE:MKC

Mccormick & — Q3 2024 Earnings Presentation

29 slides from Mccormick &'s earnings presentation, Oct 1, 2024

  1. Slide 1: 3rd Quarter 2024 and Outlook Financial Results

    3rd QUARTER 2024 and Outlook Financial Results McCORMICK & COMPANY, INC. October 1, 2024 The following slides accompany a October 1, 2024, earnings release conference call. This information should be read in conjunction with the press release issued on that date. 1

  2. Slide 2: Forward-Looking Information

    FORWARD-LOOKING INFORMATION Certain information contained in this presentation, including statements concerning expected performance such as those relating to net sales, gross margin, earnings, cost savings, special charges, acquisitions, brand marketing support, volume and product mix, income tax e

  3. Slide 3: Brendan Foley, President and Chief Executive Officer

    Brendan Foley President and Chief Executive Officer 3

  4. Slide 4: Third Quarter Performance

    THIRD QUARTER PERFORMANCE RESULTS DEMONSTRATE SUCCESS OF PRIORITIZED INVESTMENTS 1 Comparable net sales reflects 1% volume growth offset by pricing investments Consumer-led total volume growth; sequential volume improvement in Consumer & Flavor Solutions Second-half 2024 operating profit on target w

  5. Slide 5: Third Quarter 2024 Sales Growth

    THIRD QUARTER 2024 SALES GROWTH Areas of Success Areas of Pressure Consumer Consumer Spices and seasonings consumption growth across major markets Short-term impacts on hot sauce share and volume Recipe mix volume growth in Americas and UK Flavor Solutions Mustard unit and volume share gains in Amer

  6. Slide 6: Executing on Growth Plans

    EXECUTING ON GROWTH PLANS Brand Marketing Innovation Category Management Proprietary Technologies Differentiated Customer Engagement 6

  7. Slide 7: Mike Smith, Executive Vice President and Chief Financial Officer

    Mike Smith Executive Vice President and Chief Financial Officer 7

  8. Slide 8: 3Q 2024 Sales Results

    3Q 2024 SALES RESULTS TOTAL COMPANY 0.1% constant currency 0.6% -0.2% -0.3% -0.4% -0.3% Acquisitions/ Volume/Mix Price Divestitures Divestitures Currency Net Sales CONSUMER FLAVOR SOLUTIONS 0.2% constant currency -0.2% constant currency 1.0% 0.0% 0.0% 0.4% 0.0% -0.2% -0.8% -0.6% -0.5% -0.7% Acquisit

  9. Slide 9: 3Q 2024 Sales Results: Consumer Segment (Americas)

    3Q 2024 SALES RESULTS: CONSUMER SEGMENT AMERICAS CONSUMER  Constant currency results comparable reflecting: -0.2% constant currency – Volume and mix growth in core categories, offset by price investments 0.7% 0.0% -0.2% -0.4% -0.9% Acquisitions/ Volume/Mix Price Divestitures Divestitures Currency N

  10. Slide 10: 3Q 2024 Sales Results: Consumer Segment (EMEA)

    3Q 2024 SALES RESULTS: CONSUMER SEGMENT EMEA CONSUMER 2.6% constant currency  Constant currency sales growth reflects: – Broad based volume and mix growth in major markets 3.5% partially offset by price 2.9% 0.0% 0.3% -0.9% Acquisitions/ Volume/Mix Price Divestitures Acquisitions Currency Net Sales

  11. Slide 11: 3Q 2024 Sales Results: Consumer Segment (APAC)

    3Q 2024 SALES RESULTS: CONSUMER SEGMENT APAC CONSUMER  Constant currency results comparable reflecting: 0.0% constant currency – Macro environment in China – Broad-based volume-led growth outside of China 0.6% 0.0% -0.6% -0.9% -0.9% Acquisitions/ Volume/Mix Price Divestitures Currency Net Sales 11

  12. Slide 12: 3Q 2024 Sales Results

    3Q 2024 SALES RESULTS TOTAL COMPANY 0.1% constant currency 0.6% -0.2% -0.3% -0.4% -0.3% Acquisitions/ Volume/Mix Price Divestitures Divestitures Currency Net Sales CONSUMER FLAVOR SOLUTIONS 0.2% constant currency -0.2% constant currency 1.0% 0.0% 0.0% 0.4% 0.0% -0.2% -0.8% -0.6% -0.5% -0.7% Acquisit

  13. Slide 13: 3Q 2024 Sales Results: Flavor Solutions (Americas)

    3Q 2024 SALES RESULTS: FLAVOR SOLUTIONS SEGMENT AMERICAS FLAVOR SOLUTIONS 2.6% constant currency  Constant currency sales growth reflects: – Volume and mix growth driven by timing of customer activities and branded foodservice 1.6% 1.8% 1.0% – Pricing contribution of 1% 0.0% -0.8% Acquisitions/ Vol

  14. Slide 14: 3Q 2024 Sales Results: Flavor Solutions (EMEA)

    3Q 2024 SALES RESULTS: FLAVOR SOLUTIONS SEGMENT EMEA FLAVOR SOLUTIONS  Constant currency sales growth reflects: -9.0% constant currency – 3% impact from divestiture of canning business – Volume and mix driven by softness in QSR customers’ demand 0.6% – Pricing decrease of 1% -1.4% -3.1% -4.5% -8.4%

  15. Slide 15: 3Q 2024 Sales Results: Flavor Solutions (APAC)

    3Q 2024 SALES RESULTS: FLAVOR SOLUTIONS SEGMENT APAC FLAVOR SOLUTIONS  Constant currency results comparable reflecting: -0.1% constant currency – Slower QSR traffic outside of China – Offset by growth in China attributable to QSR customer promotions 0.3% 0.0% -0.4% -1.2% -1.3% Acquisitions/ Volume/

  16. Slide 16: Gross Margin

    GROSS MARGIN 3Q (in millions) 3Q 2024 3Q 2023 Fav/(Unfav) Change Gross Margin 38.7% 37.0% 170 bps  Favorable gross margin impacts:  Favorable Flavor Solutions product mix  Comprehensive Continuous Improvement (CCI) savings program 16

  17. Slide 17: Operating Income

    OPERATING INCOME 3Q (in millions) 3Q 2024 3Q 2023 Fav/(Unfav) Change Selling, general & administrative expenses as percent of net sales 21.5% 22.1% 60 bps Operating income $286.5 $245.0 17% Adjusted operating income $288.4 $251.1 15% Consumer 186.8 173.3 8% Flavor Solutions 101.6 77.8 31%  SG&A exp

  18. Slide 18: Interest Expense and Income Taxes

    INTEREST EXPENSE AND INCOME TAXES 3Q (in millions) 3Q 2024 3Q 2023 Fav/(Unfav) Change Interest Expense $53.5 $52.7 (2%) Income tax rate 16.7% 21.4% 470 bps Adjusted income tax rate 16.8% 21.4% 460 bps  Benefit of discrete tax items more significant in 3Q 2024 − Expect tax rate to be approximately 2

  19. Slide 19: Income from Unconsolidated Operations

    INCOME FROM UNCONSOLIDATED OPERATIONS 3Q (in millions) 3Q 2024 3Q 2023 Fav/(Unfav) Change Income from Unconsolidated Operations $17.9 $13.4 34%  Increase driven by strong performance in largest joint venture, McCormick de Mexico 19

  20. Slide 20: Earnings Per Share

    EARNINGS PER SHARE 3Q 3Q 2024 3Q 2023 Fav/(Unfav) Change Earnings per share $0.83 $0.63 32% Adjusted earnings per share $0.83 $0.65 28% Change in adjusted earnings per share Increase in adjusted operating income 0.11 Decrease in tax rate 0.04 Increase in unconsolidated income 0.02 Increase in intere

  21. Slide 21: Marcos Gabriel, Incoming Executive Vice President and CFO

    Marcos Gabriel Incoming Executive Vice President and Chief Financial Officer 21

  22. Slide 22: Balance Sheet and Cash Flow

    BALANCE SHEET AND CASH FLOW  Year-to-date cash flow provided from operations of $463 million BALANCED – Decrease from $660 million year-to-date 2023 USE OF CASH – Benefit from increase in earnings more than offset by cash used for working capital, increased incentive compensation, and timing of cas

  23. Slide 23: 2024 Outlook

    2024 OUTLOOK Updated 2024 Outlook Previous 2024 Outlook Reported & Constant Currency Constant Currency Sales growth -1% to 1% -1% to 1% Adjusted operating income increase 4% to 6% 4% to 6% Cost inflation Low single-digit increase Low single-digit increase Adjusted gross profit margin Up 50 to 100 bp

  24. Slide 24: Key Takeaways

    KEY TAKEAWAYS DRIVING DIFFERENTIATED RESULTS Third quarter volume growth demonstrates effectiveness of plans and investments Strategies executed with speed and agility, and in alignment with consumer trends Margin expansion and cost management achieved while investing in the business Profit realizat

  25. Slide 25: 3rd Quarter 2024 and Outlook Financial Results

    3rd QUARTER 2024 and Outlook Financial Results McCORMICK & COMPANY, INC. October 1, 2024 The following slides accompany a October 1, 2024, earnings release conference call. This information should be read in conjunction with the press release issued on that date. 25

  26. Slide 26: Non-GAAP Financial Measures

    NON-GAAP FINANCIAL MEASURES The following tables include financial measures of adjusted operating income, adjusted operating income margin, adjusted income tax expense, adjusted income tax rate, adjusted net income and adjusted diluted earnings per share. These represent non-GAAP financial measures,

  27. Slide 27: Non-GAAP Financial Measures

    NON-GAAP FINANCIAL MEASURES (in millions except per share data) Three Months Ended 8/31/2024 8/31/2023 Operating income $286.5 $245.0 1) Operating income margin, impact of special charges, and adjusted operating income margin are Impact of special charges 1.9 6.1 calculated as operating income, impa

  28. Slide 28: Non-GAAP Financial Measures

    NON-GAAP FINANCIAL MEASURES Because we are a multi-national company, we are subject to variability of our reported U.S. dollar results due to changes in foreign currency exchange rates. Those changes have been volatile over the past several years. The exclusion of the effects of foreign currency exc

  29. Slide 29: Non-GAAP Financial Measures

    NON-GAAP FINANCIAL MEASURES The following provides a reconciliation of our estimated earnings per share to adjusted earnings per share for 2024 and actual results for 2023: Year Ended 2024 Projection 11/30/2023 Earnings per share - diluted $2.81 to $2.86 $2.52 Impact of special charges 0.04 0.18 Adj

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