The Marzetti Company · NASDAQ:MZTI
The Marzetti — Lancaster Colony — Investor Presentation (September 2021)
38 slides from The Marzetti's investor presentation, Sep 22, 2021
Slide 1: Lancaster Colony Corporation
Lancaster Colony Corporation September 22, 2021
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation was prepared by Lancaster Colony Corporation for information purposes only and is not an offer or solicitation with respect to the purchase or sale of Company securities. We desire to take advantage of the “safe harbor” provisions of the Private Securities Lit
Slide 3: About Lancaster Colony Corporation
About Lancaster Colony Corporation P3 • Manufacturer and Marketer of Specialty Food Products • Established in 1961 • Headquartered in Westerville, Ohio • FY21 Net Sales of $1.5 Billion (primarily U.S.) • 16 Production Facilities in Nine States • Approximately 3,200 Employees
Slide 4: Company Highlights
Company Highlights P4 • Leading Market Share Positions in Retail Food Categories • Supplier to 15 of the Top 25 National Restaurant Chains • Long History of Sustained Organic Sales Growth • Strong Cash Flows • One of 13 U.S. Companies to have Increased Regular Cash Dividend for 58 Consecutive Years
Slide 5: In 2016, We Defined Our "Better Food Company" Strategy
In 2016, We Defined Our"Better Food Company" Strategy P5 1. Defined Winning - Pursue Top Quartile Financial Performance • Grow Organic Sales Low- to Mid-Single Digit • Grow Operating Margins 2. Developed Strategy • Strategic Growth Initiatives - Accelerate Base Business Growth - Simplify Supply Chai
Slide 6: Retail Sales Mix (57% of Total Net Sales)
Retail Sales Mix (57% of Total Net Sales) P6 Refrigerated Frozen Dressings, Dips Breads & Other 37% 27% Shelf-Stable Dressings, Sauces & Croutons 36% * * * Based on approximated net sales for the 12 months ending June 30, 2021. Calculation of Retail Sales at 57% of Total Net Sales excludes Foodservi
Slide 7: Foodservice Sales Mix (43% of Total Net Sales)
Foodservice Sales Mix (43% of Total Net Sales) P7 Branded & Other 22% National Accounts 78% QSR Customers Based on approximated net sales for the 12 months ending June 30, 2021. Excludes Foodservice sales attributed to a temporary supply agreement resulting from the November 2018 acquisition of Omni
Slide 8: Retail Segment Growth Initiatives
Retail Segment Growth Initiatives P8 Initiative Innovation/Renovation Brand/(Retailer) Products Initial Ship Date Fall 2021 Cheese Sticks July 2019 Jalapeno & Cheddar Snack Sticks September 2021 Simply Plant Based Salad Dressings and Dips Spring 2022 * April 2021 (National Distribution) Licensing *
Slide 9: Chick-fil-A Retail Channel Distribution Overview
Retail Segment Growth Initiatives P9 Chick-fil-A Retail Channel Distribution Overview Wave One Wave Two Wave Three Wave Four Florida Pilot Test Initial Shipments Initial Shipments Initial Shipments March 2020 Start Late Oct 2020 Feb 2021 Late April 2021 Sales at Retail Totaled $38.1 MM for the 13 we
Slide 10: Strategic Growth Initiatives: Simplify Supply Chain
Strategic Growth Initiatives P10 Simplify Supply Chain Lean Six Sigma • 14 waves of Green Belts trained • > 100 Green Belt graduates to date • Monthly calls with Directors to review progress and share best practices • Training program has saved >$4MM annually Six Sigma for Scientists • New training
Slide 11: Strategic Growth Initiatives: Strategic Procurement
Strategic Growth Initiatives P11 Simplify Supply Chain Strategic Procurement • Should-Cost Modeling • More Extensive Competitive Bidding • Strategic Supplier Selection • Extending Payment Terms
Slide 12: Strategic Growth Initiatives: Transportation Initiatives, Project T²
Strategic Growth Initiatives P12 Simplify Supply Chain Transportation Initiatives Project T² • Transportation Management System • Expanded Base of Dedicated Carriers • Lane and Truckload Optimization • Mixing Centers • Other Initiatives Underway
Slide 13: Successful Track Record of Growth through Acquisitions
Successful Track Record of Growth through Acquisitions P13 $ in Millions $1,500 11%* Compound Annual Growth Rate 2018 2016 $1,000 2003 2015 2000 $500 1997 1989 1978 1969 1971 1980 1990 2000 2010 2021 Net sales information is presented as originally reported in Lancaster Colony's Annual Report for th
Slide 14: Strengthened Organization
Strengthened Organization P14 Strengthened Leadership Team • Supply Chain • R&D and Quality • Retail • Foodservice • Information Technology • Finance Established Transformation Program Office • ERP Initiative Aligned Compensation Incentives with Sales Growth, Operating Income Growth and Shareholder
Slide 15: Investing in Plants to Drive Efficiency and Support Growth
Strengthened Organization P15 Investing in Plants to Drive Efficiency and Support Growth Significant Capacity Expansion Project for Dressings and Sauces * * * • Adds 192,000 square feet to existing facility in Horse Cave, KY • Provides increased processing, warehousing and utilities to expand produc
Slide 16: Lancaster Colony's Commitment to ESG
Lancaster Colony’s Commitment to ESG P16 Environmental • Developing ESG Data Collection Process and Platform for Future Reporting • Identifying Relevant Metrics for Ongoing Data Monitoring and Evaluation Social • Adopted Diversity Hiring Statement • Established Employee Resource Groups • Launched Ma
Slide 17: Strong Fourth Quarter Results
Strong Fourth Quarter Results P17 Fiscal 2021 – Fourth Quarter Financial Performance $ in Millions (Except Per Share Values) FY21 Q4 Results vs. Prior Year (Three Months Ended June 30, 2021) Value $ Change % Change Consolidated $385.6 $64.7 20% Net Sales Gross Profit $96.7 $7.6 9% SG&A $55.8 $6.9 14
Slide 18: Strong Growth in Retail with Recovery in Foodservice
Strong Growth in Retail with Recovery in Foodservice P18 Net Sales Summary Fiscal Years Ended June 30, 2019 through June 30, 2021 $ in Millions Consolidated $1,308 $1,334 $1,467 Net Sales +6.9% +2.0% +9.9% $1,400 $1,200 $634 Total $632 Total Total Foodservice $598 Foodservice + 6.1% +10.3% Foodservi
Slide 19: Consistent Growth in EBITDA
Consistent Growth in EBITDA P19 Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)* Fiscal Years Ended June 30, 2019 through June 30, 2021 $ in Millions $225 $225 $217 $211 $175 FY19 FY20 FY21 * Calculation of EBITDA values presented above exclude non-cash change in contingent c
Slide 20: Strong Balance Sheet
Strong Balance Sheet P20 $ in Millions June 30 2019 2020 2021 Cash and Equivalents $196 $198 $188 Total Debt $0 $0 $0 • Debt Free • Credit Revolver of $150 Million, Expandable up to $225 Million
Slide 21: Investing to Grow While Returning Cash to Shareholders
Investing to Grow While Returning Cash to Shareholders P21 FY21 – Major Cash Uses Cash Priorities Share Repurchases • Invest in Existing Business Regular Dividend - FY22 capital expenditures estimated at Payments Capital Expenditures $170 to $190 Million (including ~$100 Million for significant capa
Slide 22: FY 2022 Outlook
FY 2022 Outlook P22 * * * • Top Line Growth Fueled by Foodservice Recovery and New Retail Items • Manage Crosswinds - Pace of Economic Recovery and COVID Impacts - Commodity Inflation - Pricing Actions in Place - Labor Challenges • Ongoing Investments to Support Long-Term Growth * Products for these
Slide 23: Appendix A: Financial Information
Appendix A Financial Information
Slide 24: EBITDA Calculation Details
EBITDA Calculation Details A1 Calculation of Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) * ($ in Millions) Fiscal Years Ended June 30, 2019 2020 2021 Income Before Income Taxes $195.542 $179.077 $185.745 Depreciation and Amortization $31.848 $37.963 $44.509 Change in Cont
Slide 25: Capital Expenditure History
Capital Expenditure History A2 $ in Millions $88 $83 $71 $31 $23 $26 $18 $17 $15 $16 12 13 14 15 16 17 18 19 20 21 Fiscal years ended June 30. Note: Capital Expenditure values noted above represent only those expenditures attributed to the company’s Retail and Foodservice operations.
Slide 26: Regular Cash Dividends Per Share
Regular Cash Dividends Per Share A3 $ Per Share $2.95 $2.75 $2.55 $2.35 $2.15 $1.96 $1.82 $1.72 $1.52 $1.41 12 13* 14 15 16 * 17 18 19 20 21 Regular cash dividends for the fiscal years ended June 30. * Excludes special cash dividends of $5.00 per share paid in FY13 and $5.00 per share paid in FY16.
Slide 27: Appendix B: Retail Brand Market Share and Related Information
Appendix B Retail Brand Market Share and Related Information
Slide 28: Portfolio of Strong Brands and Licensing Relationships
Portfolio of Strong Brands and Licensing Relationships (Sales and Market Share Data per IRI*) B1 Marzetti® Marzetti® Simply Dressed® Olive Garden SM ^ Ref. Dressing Dips $ Sales: 69.9MM $ Sales: 132.9MM $ Sales: 41.7MM $ Sales: 133.6MM $ Share: 14.1% $ Share: 82.0% $ Share: 8.4% $ Share: 6.4% (Exclu
Slide 29: Marzetti Refrigerated Dressing Market Share
Refrigerated Dressing Market Share B2 All Others Marzetti 21.1% 22.9% Bolthouse 12.3% Litehouse 24.4% Marie’s 19.3% Total Category Sales: $495.2 MM 52 weeks ending 6/27/21, Source: IRI, Total U.S. Multi-Outlet
Slide 30: Marzetti Refrigerated Dressing Distribution
Marzetti Refrigerated Dressing Distribution B3 ACV Distribution 41 - 70% 71 - 90% Total U.S. Multi-Outlet 70.9% ACV Weighted Distribution 52 weeks ending 6/27/21, Source: IRI, Total U.S. Multi-Outlet
Slide 31: Marzetti Produce Dip Market Share
Produce Dip Market Share B4 Marzetti 82.0% Private Label 2.3% All Others 2.5% Litehouse 12.0% Concord 1.2% Total Category Sales: $162.0 MM 52 weeks ending 6/27/21, Source: IRI, Total U.S. Multi-Outlet
Slide 32: Marzetti Dip Distribution
Marzetti Dip Distribution B5 ACV Distribution 21 - 80% 81 - 100% Total U.S. Multi-Outlet 73.8% ACV Weighted Distribution 52 weeks ending 6/27/21, Source: IRI, Total U.S. Multi-Outlet
Slide 33: New York Bakery Frozen Garlic Bread Market Share
Frozen Garlic Bread Market Share B6 Pepperidge Farm New York Bakery 12.7% 41.2% All Others 5.9% Private Label 31.6% Cole’s 8.6% Total Category Sales: $632.2 MM 52 weeks ending 6/27/21, Source: IRI, Total U.S. Multi-Outlet
Slide 34: New York Bakery Frozen Garlic Bread Distribution
New York Bakery Frozen Garlic Bread Distribution B7 ACV Distribution 90 - 100% Total U.S. Multi-Outlet 92.8% ACV Weighted Distribution 52 weeks ending 6/27/21, Source: IRI, Total U.S. Multi-Outlet
Slide 35: Sister Schubert's Frozen Roll Market Share
Frozen Roll Market Share B8 Private Label Sister Schubert’s 4.3% 51.6% All Others 16.4% Rhodes 27.7% Total Category Sales: $266.3 MM 52 weeks ending 6/27/21, Source: IRI, Total U.S. Multi-Outlet
Slide 36: Sister Schubert's Distribution
Sister Schubert's Distribution B9 ACV Distribution 21 - 40% 41 - 70% 71 - 100% Total U.S. Multi-Outlet 81.0% ACV Weighted Distribution 52 weeks ending 6/27/21, Source: IRI, Total U.S. Multi-Outlet
Slide 37: Crouton Market Share
Crouton Market Share B10 Marzetti, Cardini’s, Mrs. Cubbison’s / New York Bakery, Fresh Gourmet 23.9% Chatham Village 35.2% All Others 2.3% Private Label 34.2% Rothbury Farms 4.4% Total Category Sales: $260.6 MM 52 weeks ending 6/27/21, Source: IRI, Total U.S. Multi-Outlet
Slide 38: New York Bakery Crouton Distribution
New York Bakery Crouton Distribution B11 ACV Distribution 71 - 100% Total U.S. Multi-Outlet 86.1% ACV Weighted Distribution 52 weeks ending 6/27/21, Source: IRI, Total U.S. Multi-Outlet
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