Brown Forman Inc · NYSE:BF.A
Brown Forman — Shareholder Meeting (July 2017)
23 slides from Brown Forman's shareholder meeting presentation, Jul 27, 2017
Slide 1: Annual Stockholders' Meeting July 27, 2017
FOCUSING ON TODAY. BUILDING FOR Annual Stockholders’ Meeting TOMORROW. July 27, 2017
Slide 2: Geo. Garvin Brown IV, Chairman of the Board
Annual Stockholders’ Meeting Geo. Garvin Brown IV July 27, 2017 Chairman of the Board
Slide 3: Paul C. Varga, Chairman and CEO
Annual Stockholders’ Meeting Paul C. Varga July 27, 2017 Chairman and CEO
Slide 4: The Cost of Service
The Cost of Service 2003 Today
Slide 5: TSR CAGR (Local currency with dividends reinvested)
TSR CAGR (Local currency with dividends reinvested) 10 Year 5 Year BFB 14% Campari 17% Campari 12% S&P 500 14% Diageo 11% BFB 13% Consumer Staples 10% Consumer Staples 13% Comp Set 10% Diageo 11% Remy 9% Comp Set 11% S&P 500 7% Pernod 10% Pernod 7% Remy 4% 3 Year 1 Year Campari 22% Remy 31% Remy 16%
Slide 6: Chapter 1: FY17 Highlights
Chapter 1: FY17 Highlights Underlying Growth FX Headwinds American Whiskey Impact from Portfolio Reshaping Geographic Balance Used Barrel Sales Emerging Market Slowdown Investments for Future Less Impact from Innovation Portfolio Reshaping Operating Leverage / Cost Discipline
Slide 7: Outgrowing the Competition
Outgrowing the Competition Organic Operating Income (Compound Annual Growth Rate) Source: Company Reports and FactSet for the Competitive Set, which is based on a weighted average of fiscal year operating income (USD) for Diageo, Pernod, Bacardi, LVMH, Remy and Campari. The 1, 3, and 5 year comparis
Slide 8: FY18 Priorities
FY18 Priorities Accelerate Net Sales Leverage Existing Assets and Prior Investments Invest with Improved Effectiveness and Efficiency Innovative Mindset Execute with Heightened Competitiveness Collaborate with Sense of Urgency
Slide 9: Striving For Consistency
Striving For Consistency Sustainable Organic Growth Operating Margin Return on Invested Capital
Slide 10: Growing with Top Tier Margins and ROIC
Growing with Top Tier Margins and ROIC 30% 15% ROIC CONSUMER STAPLES COMPETITIVE SET S&P 500 0% 20% 40% Operating Margin Source: Company information and Factset for the indices and Competitive Set, which is based upon weighted average operating income for Diageo, Pernod, Campari, and Remy. ROIC is d
Slide 11: Strong and Improving Operating Margins
Strong and Improving Operating Margins Brown-Forman Reported Operating Margin (2008 – 2017) Source: Factset. The reported operating margin excludes the gains from the sale of our Hopland based wine business in FY11 and Southern Comfort and Tuaca in FY16.
Slide 12: Consistently High ROIC
Consistently High ROIC 25% 20% 15% 10% 5% 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: Company Information. ROIC excludes the gain from the sale of our Southern Comfort and Tuaca in FY16.
Slide 13: Looking Back – Consistency of Growth
Looking Back – Consistency of Growth Underlying Sales Underlying Operating Income 10% 15% 10% 5% 5% 0% 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Slide 14: Woodford Reserve – Two Decades of Uninterrupted Growth
Woodford Reserve – Two Decades of Uninterrupted Growth 700 600 500 400 300 200 100 - 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: B-F Depletion Data
Slide 15: Jack Daniel's Family of Brands
Jack Daniel’s Family of Brands From regional US brand with 200k cases to more than ~16 million cases in 165+ countries 61-year CAGR +7% 15 +7% 10 5 0 JD FoB JDTW Source: Internal data; IWSR Note: RTS cases converted to 80 proof whiskey equivalents
Slide 16: Consistently Delivering Top Tier Returns for Shareholders
Consistently Delivering Top Tier Returns for Shareholders BFB 14% = $355 Campari 12% = $323 Diageo 11% = $289 Consumer Staples 10% = $267 Comp Set 10% = $250 Remy 9% = $229 10 Year TSR of 14% S&P 500 7% = $200 (Local Currency Compound Annual Growth) Pernod 7% = $191 Source: Factset 16
Slide 17: Large Remaining Global Expansion Opportunity
Large Remaining Global Expansion Opportunity Non-US Total Spirits Market 2.9B 9L cases Other Whiskey National Spirits Source : IWSR 2016
Slide 18: Ever-Changing Landscape
TABLE of CONTENTS 01 Craft Spirits Competition Focusing On Today. Marijuana Legalization Building For The Local Movement Tomorrow. Classic Cocktails Surging Premiumization the EVER-CHANGING LANDSCAPE Off-Premise Outpaces On-Premise Multi-Cultural Ready-to-Drink (RTDs) Free Delivery On-Demand / Self-
Slide 19: Investing For Both Today And Tomorrow
Investing For Both Today And Tomorrow
Slide 20: Innovation
I N N O VAT I O N
Slide 21: Brown-Forman is not for sale
. . . Brown-Forman does not comment on market rumors or speculation. However, it is important to reiterate that Brown-Forman is not for sale. For nearly 150 years, the Company and the Brown family have been committed to preserving Brown- Forman as a thriving, family controlled, independent company.
Slide 22: Our Story: Building Forever
ont STORY: OE. FOREVER @) BROWN-FORMAN 2190-9) } |) ARARR RM RER SES £ TED +
Slide 23: Annual Stockholders' Meeting July 27, 2017
FOCUSING ON TODAY. BUILDING FOR Annual Stockholders’ Meeting TOMORROW. July 27, 2017