American Italian Pasta — Investor Presentation (March 2009)
27 slides from American Italian Pasta's investor presentation, Mar 9, 2009
Slide 1: March Investor Presentation
March Investor Presentation
Slide 2: Forward Looking Statements
This presentation contains statements concerning potential future events. These forward-looking statements are based upon assumptions by our management, including assumptions about risks and uncertainties faced by us. Readers can identify these forward-looking statements by the use of verbs such as
Slide 3: Table of Contents
About American Italian Pasta Company Pasta Industry Operating Strategy Financial Results Questions & Answers Table of Contents
Slide 4: Company history timeline 1988 to present
1988 Present 1991 1997 2000 2001 2002 2003 2006 2008 • Citigroup Venture Capital purchased a 50% stake of AIPC for $50mm • Opened the Excelsior Springs, MO Plant Morgan Stanley Private Equity acquired a 74% stake in AIPC AIPC completed a $23mm private placement from current shareholders, including M
Slide 5: Vision, Mission, Operating Model and Values
Vision (What we will achieve) - To be, and to be seen as, the best developer of category solutions for our customers in dry grocery Mission (What we will do) - Focus on dry goods categories where we can leverage our relationships and capabilities, to develop private label, branded, and ingredient so
Slide 6: Plant Locations - Competitive Advantage
Plant Locations - Competitive Advantage
Slide 7: Business Channels
Sold as: Customer Brands/Private Label or AIPC Brands Traditional Grocery Retailers Mass Merchandisers Club Stores Discount/Value Channel Retail - - 75% Sold as: Customer Brands/Private Label or AIPC Brands Foodservice Distributors Food Processors Contract Institutional - - 25% Business Channels
Slide 8: AIPC Brands
AIPC Brands
Slide 9: Private Label and AIPC Brands Market Share
Private Label Market Share 1 st 2 nd 3 rd Top share all markets except NE Strong SE - Weak NE & West 1 st 2 nd 3 rd 4 th -5 th AIPC Brands Market Share Private Label and AIPC Regional Brand Market Share
Slide 10: Pasta Industry
Pasta Industry About American Italian Pasta Company Operating Strategy Financial Results Questions & Answers Table of Contents
Slide 11: Dry Pasta comprises nearly one-quarter of the Mega Pasta Category
23.2% 25.2% 5.7% 11.0% 10.0% 24.0% 23.0% 21.0% 5.7% 8.7% 8.8% 33.3 % Frozen Italian Meals Canned Pasta Soup Mixes Dry Pasta Dinners Froz/Ref Pasta Dry Pasta $6.4B Source: Nielsen Total FDM x Wal-Mart; Excludes Canned Soup, data through 9/06/08 • Dry Pasta has maintained it’s dollar share over time $
Slide 12: Dry Pasta Pound Consumption Highest since 2003
Dry Pasta Pound Consumption Highest since 2003 (Grocery + Wal-Mart) Source: Nielsen Data ending 1/17/09 combined w/ rvsd Wal-Mart Homescan Data ending 1/17/09 Atkins Trough • Dry Pasta consumption continues increasing, with current levels matching 2003 pre-Atkins levels • Pasta pounds in the last 52
Slide 13: Healthy Pasta Trends
Healthy Pasta Trends (Grocery + Wal-Mart) • Much of Pasta’s Category dollar improvement has been driven by increases in sales of Health SKUs, which now make up 11% of all category pounds and 16% of category dollars • Health pound consumption across both Grocery and Wal-Mart has grown 23.4% in the la
Slide 14: Recent Pasta Trends
Recent Pasta Trends (Grocery + Wal-Mart) • Health has consistently been the growth driver of the category throughout the last year, but recent growth in semolina products has benefited the total category • The most recent 4-week Semolina growth of 7M pounds was driven in part by promotional volume,
Slide 15: US Dry Pasta - Dollar & Pound Share
Source: Nielsen Data latest 13 weeks ending 1/17/09 • Store Brands have the largest pound share and have grown the most US Dry Pasta - Dollar & Pound Share (Grocery Channel Only)
Slide 16: Operating Strategy
Operating Strategy About American Italian Pasta Company Pasta Industry Financial Results Questions & Answers Table of Contents
Slide 17: Strategy as a private-label champion
AIPC underwent a thorough self-evaluation, category review and market review and identified a strategy to capture upside in enterprise value • AIPC will achieve growth in enterprise value by pursuing a strategy as a private-label champion within the pasta category and beyond AIPC’s strategy is focus
Slide 18: Core strategic principles
The situation assessment suggested a few core strategic principles • This industry is in the midst of a structural shift (channel shifting, private label growth, category segmentation) - as the category leader, AIPC will drive the change, not be driven by it • Given AIPC’s current position and preva
Slide 19: Double Down in Private Label; Brand Portfolio Management; Optimize foodservice
Double Down in Private Label Adopt Brand Portfolio Management Approach Optimize foodservice and ingredient contribution • Aggressively seek to grow within the pasta category in 4 ways – Further penetrate current customers – Expand the premium private-label offering – Capture competitive accounts whe
Slide 20: Role of private label in category
Source: McKinsey retail practice, AC Nielsen “Protected” High role Low role 100% “Battleground” “Gone to private label” Highest private label share Role of private label in category Average = 31% Highest shares are in the high 50% range • AIPC will leverage its customer intimacy capabilities to assi
Slide 21: Clear strategy, reduced complexity
Clear strategy Reduced complexity • Enables closer collaboration with customers and focus on building their pasta category performance – AIPC’s category management expertise provides insight on how to optimize their results for pasta by providing the best execution for the Customer Brand and the Tra
Slide 22: Key Company Issues
Input Costs Industry Pricing Consumption Trends • Durum volatility • Other cost inflation – Packaging – Energy – Additives – Health costs • Customer pressure • Competitive pressure • Macro economics Key Company Issues
Slide 23: Financial Results
Financial Results About American Italian Pasta Company Pasta Industry Operating Strategy Questions & Answers Table of Contents
Slide 24: Statement of Operations
• Retail up 56%, Institutional up 43% • Volume adjusted for extra week: Total ↑6 %, Retail ↑9%, Institutional flat • $0.6M increase in both brokerage & package design • Lower interest rates (8.3% vs. 11.2%) • $1.4M increase in non-restatement professional fees related to normal audit fees (FY’08 aud
Slide 25: Balance Sheet
• Continued to generate cash after $34M in payments (Debt, DOJ, Annual Bonuses) • Debt pay down Balance Sheet
Slide 26: Net Debt, Liquidity and EBITDA Reconciliation
in Thousands As-of Fiscal Year End 2008 Net Debt Domestic Term Loan $s 217,000 $ 239,900 Italy Gross Debt 1,752 2,013 Less Total Cash & ST investment (43,775) (40,993) Net Debt $ 174977, —$ _ 200,920 Variance $ 25,943, Linuiity Domestic Revolver Less Letters of Credit Plus Total Cash & ST Invesmment
Slide 27: Questions & Answers
Questions & Answers About American Italian Pasta Company Pasta Industry Operating Strategy Financial Results Table of Contents
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