Brown Forman Inc · NYSE:BF.A
Brown Forman — Q1 FY2018 Earnings Presentation
17 slides from Brown Forman's earnings presentation, Aug 30, 2017
Slide 1: 1Q18 Results
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Slide 2: 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,” “continue,” “could,” “envision,” “estimate,” “expect,” “expectatio
Slide 3: 1Q18 Highlights
1Q18 Highlights Underlying Reported Operating Fiscal 2018 Net Sales(1) Results Leverage Outlook Underlying net sales growth Reported results Operating expense Reaffirmed 4-5% growth continued to accelerate as helped by distributor leverage continued in underlying net sales execution of strategic pri
Slide 4: 1Q18 Growth Rates
1Q18 Growth Rates Reported Acquisitions Foreign Net Change Underlying Change & Divestitures Exchange In Estimated Change (%) (+/-) Impact Distributor (%) (+/-) Inventories (+/-) Net Sales 9% 1% -1% -3% 6% Gross Profit 9% —% 1% -3% 6% Advertising 8% —% -1% —% 6% SG&A -1% —% —% —% -1% Operating Income
Slide 5: Reported and Underlying Net Sales Growth
1Q18 Reported and Underlying Net Sales Growth +1% +9% -1% +6% -3% Reported Acquisitions & Foreign Net Change in Underlying Divestitures Exchange Estimated Distributor Inventories
Slide 6: Net Sales by Geography
Net Sales by Geography Reported Underlying 1Q18 1Q18 +27% +19% +12% +10% +9% 6% +5% +4% +2% —% US Developed - ex US Emerging Travel Retail Total US Developed - ex US Emerging Travel Retail Total * See appendix for additional details
Slide 7: Net Sales in Top Ten Markets
1Q18 Net Sales in Top Ten Markets Reported/Underlying United States France +10%/+5% +8%/+4% Broad-based growth Volume led growth United Kingdom Poland +6%/-6% +29%/+20% Stable consumer demand Led by JDTW against difficult comparison Australia Japan +12%/+17% -25%/-14% Buy-in ahead of August 1, 2017
Slide 8: Emerging Markets' Trends Have Rebounded
Emerging Markets’ Trends Have Rebounded Underlying Net Sales Contribution 4% 3% 2% 1% 0% -1% -2% 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18
Slide 9: Brand Highlights - Underlying Net Sales Change
1Q18 Brand Highlights - Underlying Net Sales Change +6% +17% * See appendix for additional details +17%
Slide 10: Reported Gross Margin Impacted by FX
1Q18 Reported Gross Margin Impacted by FX +0.6% 68.5% —% 68.1% -1.0% FY17 Underlying Change/ Acquisitions & Foreign FY18 Other Divestitures Exchange
Slide 11: Operating Performance
1Q18 Operating Performance Three Months Ended July 31, 2017 Reported Change Underlying Change (%) (%) Net Sales 9% 6% Gross Profit 9% 6% Advertising 8% 6% SG&A -1% -1% Operating Income 14% 12% Gross margin -0.4% points Operating margin 1.5% points Effective tax rate -6.1% points Share count -2% Dilu
Slide 12: FY18 Outlook
FY18 Outlook Underlying Underlying Net Operating Diluted EPS Sales Income 4 – 5% 6 – 8% $1.85 - $1.95 (prior range of $1.80 - $1.90)
Slide 13: Appendix
Appendix
Slide 14: Non-GAAP Reconciliation
Non-GAAP Reconciliation We use certain financial measures in this report that are not measures of financial performance under GAAP. These non-GAAP measures, defined below, should be viewed as supplements to (not substitutes for) our results of operations and other measures reported under GAAP. The n
Slide 15: Reconciliation
Reconciliation 1Q 2018 Net Sales Growth by Geography Three Months Ending July 31, 2017 Acquisitions & Net Change in Estimated Geographic area Reported (%) Foreign Exchange (+/-) Underlying (%) Divestitures (+/-) Distributor Inventories (+/-) US 10% —% —% -5% 5% Developed – ex US 2% —% -4% 3% —% Emer
Slide 16: Reconciliation
Reconciliation 1Q18 Net Sales Growth by Top Markets Net Change in Estimated Acquisitions & Geographic area Reported % Foreign Exchange +/- Distributor Inventories Underlying % Divestitures +/- +/- United States 10% —% —% -5% 5% United Kingdom 6% -1% -11% —% -6% Germany 6% -1% -5% —% -1% France 8% —%
Slide 17: Reconciliation
Reconciliation 1Q 2018 Net Sales Growth for Aggregated Brands Net Change in Estimated Aggregated Brands Reported % Foreign Exchange +/- Distributor Inventories Underlying % +/- Old Forester & Woodford 13% —% 3% 17% Reserve el Jimador, Herradura, & 16% 1% —% 17% New Mix