The J.m. Smucker Company · NYSE:SJM
The J.m. Smucker — Barclays Global Consumer Staples Conference 2022
30 slides from The J.m. Smucker's conference presentation, Sep 6, 2022
Slide 1: Barclays Global Consumer Staples Conference
BARCLAYS GLOBAL CONSUMER STAPLES CONFERENCE September 6, 2022
Slide 2: Mark Smucker
MARK SMUCKER Chair of the Board, President and Chief Executive Officer 2
Slide 3: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements, such as projected net sales, operating results, earnings, and cash flows, that are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from any future results, perf
Slide 4: FY23 Financial Outlook
FY23 Financial Outlook Net Sales* Adjusted EPS** Free Cash Flow 4.0% - 5.0% $8.20 - $8.60 $550M Comparable Basis (Mid-Point): +6.5% +4% vs. Prior Guidance +10% vs. Prior Guidance CONTINUED MOMENTUM MODEST LEADING SHARE INVESTMENTS PRODUCTS THAT LOW RISK FROM PRICE ELASTICITY IN GREAT IN ICONIC SPAN
Slide 5: Our Business Strategy
Our Business Strategy Leading in the attractive categories of: PET FOOD COFFEE SNACKING Brands growing or Our products are 80% of maintaining dollar found in over U.S. Retail Sales from share account for 80% of all categories where we 78% of our U.S. Households hold the #1 or #2 U.S. Retail Business
Slide 6: Our Vision
Our Vision GUIDES OUR STRATEGY Engage, delight and inspire consumers by building brands they love and leading in growing categories 6
Slide 7: Delivering Our Strategy
Delivering Our Strategy Executional Priorities DRIVE STREAMLINE RESHAPE UNLEASH OUR COMMERCIAL OUR COST OUR ORGANIZATION EXCELLENCE INFRASTRUCTURE PORTFOLIO TO 7
Slide 8: Uncrustables Growth
Uncrustables Growth ® NEWLY LAUNCHED INNOVATION: Started Shipping 9/1 Expanding capacity to meet demand Distribution to new channels and geographies Anticipate doubling household penetration 8
Slide 9: Coffee Portfolio
Coffee Portfolio 3 of the top 8 at-home coffee brands Our K-Cup®offerings have outpaced category growth over the past year Bold initiatives to strengthen Two of the Fastest Growing Brands in ® the Folgers brand the At-Home Coffee Category 9 SOURCE: SMUCKER INTERNAL MULTI-OUTLET SHARE REPORT 12 AND 5
Slide 10: Milk-Bone & Meow Mix
Milk-Bone & Meow Mix ® ® GREW OVER 2X THE CATEGORY YOY NET SALES GROWTH IN RATE IN THE PAST YEAR 18 OF LAST 19 QUARTERS 10 SOURCE: SMUCKER INTERNAL MULTI-OUTLET SHARE REPORT 52 WEEKS ENDED AUGUST 07, 2022.
Slide 11: Shareholder Value Creation
Shareholder Value Creation Focus on execution and growth in our POSITIONED pet food, coffee, and snacking categories TO DELIVER LONG-TERM GROWTH AND SHAREHOLDER Capital allocation focused on the VALUE highest-and-best return investments Responsible and shareholder-friendly corporate governance 11
Slide 12: Tucker Marshall
TUCKER MARSHALL Chief Financial Officer 12
Slide 13: Financial Priorities
Financial Priorities ACTIVE AND EXECUTION PRIORITIZING MAINTAINING BALANCED TRANSPARENT TO CREDIBLE HIGHEST- PRODUCTIVITY CAPITAL COMMUNICATION TARGETS RETURN FOCUS AND DEPLOYMENT OPPORTUNITIES COST CONTROL CREATE LONG-TERM SHAREHOLDER VALUE 13
Slide 14: FY23 Outlook Considerations
FY23 Outlook Considerations BUSINESS STRENGTH: Continued PRICE ELASTICITY: Consumer reaction brand momentum and expansion; ongoing to price increases due to overall inflationary recovery for our Away From Home business pressures PRICING: Full year of price increases SUPPLY CHAIN: Incremental costs f
Slide 15: Investments for Future Growth
Investments for Future Growth SMUCKER’S ® MARKETING TO TRANSFORMATION ® SUPPORT OUR OF COMMERCIAL UNCRUSTABLES BRANDS ACTIVITIES EXPANSION 15
Slide 16: Productivity & Profit Growth
Productivity & Profit Growth Enterprise-wide continuous improvement strategies to establish new ways of working, sustainable efficiencies and cost reduction NET REVENUE DESIGN TO VALUE OPERATIONS SUPPLY CHAIN OPTIMIZATION CUSTOMER PROCUREMENT MARKETING SG&A PROFITABILITY 16
Slide 17: Long-Term Growth Targets
Long-Term Growth Targets NET SALES LSD ADJUSTED OPERATING INCOME MSD ADJUSTED EPS HSD TOTAL SHAREHOLDER RETURN 10+% 17
Slide 18: Balanced Capital Deployment
Balanced Capital Deployment Capital Dividends & Expenditures Share Repurchases CASH FROM 50% OPERATIONS 50% Strategic Debt Investments Repayment 18
Slide 19: Cash Deployment | FY21 & FY22
Cash Deployment | FY21 & FY22 Balancing reinvestment in the business and returning cash to shareholders Capital Expenditures Debt Repayment Dividend Payments Share Repurchases $0.7B $1.1B $0.8B $0.9B Exceeding net sales target Paid down and refinanced Over 20 consecutive years Repurchased 7% of of 3
Slide 20: Near-Term Focus
Near-Term Focus Maintain Make MINIMIZE NAVIGATE business STRATEGIC the impact of any business MOMENTUM INVESTMENTS cost inflation disruption 20
Slide 21: Total Shareholder Return
Total Shareholder Return Goal: Top quartile of package food peers POSITIONED TO DELIVER 1-Year 3-Year 5-Year LONG-TERM CAGR CAGR CAGR GROWTH AND SJM 17% 13% 9% SHAREHOLDER VALUE Peer Group Avg. 17% 11% 8% S&P Packaged Foods 9% 6% 4% S&P 500 -11% 12% 12% NOTE: DATA AS OF AUGUST 31, 2022. ASSUMES DIVI
Slide 22: The J.M. Smucker Co
pe THE JM. SMUCKER Co
Slide 23: Supporting Materials
Supporting Materials
Slide 24: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements, such as projected net sales, operating results, earnings, and cash flows that are subject to risks and uncertainties that could cause actual results to differ materially from future results expressed or implied by thos
Slide 25: Fiscal 2023 Outlook
FISCAL 2023 OUTLOOK Net Sales Increase 4.0% – 5.0% Adjusted EPS – Assuming Dilution $8.20 - $8.60 Free Cash Flow (in millions) $550 Capital Expenditures (in millions) $550 Adjusted Effective Income Tax Rate 24.2% Please refer to the press release dated August 23, 2022 for details related to the unfa
Slide 26: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES The Company uses non-GAAP financial measures, including: net sales excluding divestitures and foreign currency exchange; adjusted gross profit; adjusted operating income; adjusted income; adjusted earnings per share; earnings before interest, taxes, depreciation, amortiza
Slide 27: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Company Guidance Year Ending April 30, 2023 Low High Net income per common share – assuming dilution reconciliation: Net income per common share – assuming dilution $ 6.26 $ 6.66 Change in net cumulative unallocated derivative gains and losses (A) 0.27 0.27 Amortization 1.58
Slide 28: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Company Guidance ($ in millions) Year Ending April 30, 2023 Free cash flow reconciliation: Net cash provided by operating activities $ 1,100 Additions to property, plant, and equipment (550) Free cash flow $ 550 28
Slide 29: Additional Information
ADDITIONAL INFORMATION The J.M. Smucker Co. is the owner of all trademarks and logos referenced herein, except for the following, which are used under license: Dunkin’® is a trademark of DD IP Holder LLC, and Rachael Ray® is a trademark of Ray Marks II LLC. The Dunkin’® brand is licensed to The J.M.
Slide 30: Additional Information
ADDITIONAL INFORMATION: Aaron Broholm Vice President, Investor Relations ir.team@jmsmucker.com Phone: (330) 682-3000 Investor Relations Website: https://investors.jmsmucker.com/ 30
The J.M. Smucker Company — Barclays Global Consumer Staples Conference 2022 on 6ix