Kroger Company (the) · NYSE:KR
Kroger Company (the) — The Kroger — Jefferies 2011 Global Consumer Conference
20 slides from Kroger Company (the)'s conference presentation, Jun 22, 2011
Slide 1: Jefferies 2011 Global Consumer Conference
Kroger Jefferies 2011 Global Consumer Conference June 22, 2011
Slide 2: Forward-Looking Statements
roger Forward-Looking Statements This presentation includes forward-looking statements which are subject to risks and uncertainties. Actual results might differ materially from those projected in the forward-looking statements. Additional information concerning factors that could cause actual result
Slide 3: Best-In-Class Retailer
Best-In-Class Retailer Significant scale with +2,400 stores in 31 states driving $80+ billion annual revenues #1 or #2 market share in 38 of our 42 major markets Proprietary consumer insights driving strong customer loyalty Outstanding positive identical store sales momentum Consistent record of rew
Slide 4: National Presence Across Banners And Formats
if) a National Presence Across Banners And Formats Supermarkets COTS — Wilandee = FrediMeyer = SRE] ag: Foms@. VQ Oper bhe Marketplace Convenience Jewelry Pharmacy Manufacturing Prepaid Wireless Personal Finance (> Loaf Mug : Ged be : a Frnt rhefftoinc F wireless KROGER ee ke ns FINANCE, * Cptomtmms
Slide 5: Unparalleled Reach With Leadership In Key Markets
) Unparalleled Reach With Leadership In Key Markets & 38 markets With #1 or #2 Share Note: Figures in brackets represent number of supermarkets per state. 4
Slide 6: Strengthening Our Competitive Position In Today's Environment
(Tam Environment Industry Trend Challenging macro environment continuing to affect consumer behavior Increasing importance of private label sales for US food retailers Re-emergence of inflation following a deflationary period » » Strengthening Our Competitive Position In Today’s Kroger Positioning K
Slide 7: Growing Share In A Highly Competitive Sector
Growing Share In A Highly Competitive Sector (+20bps) 4.3% (Obps) (+40bps) 22.4% (-110bps) = Kroger = Other Food Retailers =Mass “Warehouse «Drug Dollar Other Source: Nielsen Homescan Fiscal Year Sales Trends — January 29, 2011 Note: Figures may not add to 100% due to rounding
Slide 8: Customer 1st: A Cycle Of Value Creation
Customer ist: A Cycle Of Value Creation Improve Connection . i Strong ID Sales with Customers Growth Invest in Shopping Operating Cost Experience — Leverage
Slide 9: Industry Leading Loyalty Program Provides Unique Customer Insights
Industry Leading Loyalty Program Provides Unique Customer Insights... Kroger Plus Card dunnhumby Relationship * Drives loyal household growth ¢ Global leader in data management, * 90% of transactions involve loyalty customer analysis and insight-led card planning * 50% of households in the United ¢
Slide 10: Compelling Tiered Corporate Brand Strategy Is A Significant Driver Of Value Creation
Compelling Tiered Corporate Brand Strategy Is A Significant Driver Of Value Creation... Value Banner Brands Private Selection ° Offers our price ¢ Represents the « Premium quality sensitive majority of Kroger brand, made from customers a branded goods only the finest choice of basic ingredients prod
Slide 11: Differentiating Kroger From Our Competitors
...Differentiating Kroger From Our Competitors 40.0% - 35.0% + 30.0% - 25.0% + 20.0% + 15.0% - 10.0% + 5.0% + 0.0% + Supermarket Industry Kroger mUnitShare Dollar Share Source: Private Label Manufacturing Association 2Q10 data as reported in Barclays Capital U.S. Supermarket Industry Review — 10 Fal
Slide 12: Consecutive Quarters Of Positive ID Sales Growth
Kader 30 Consecutive Quarters Of Positive ID Sales Growth Kroger ID Supermarket Sales Growth (ex fuel) 7.0% > 6.0% ~ 5.0% ~ 4.0% ~ 3.0% ~ 2.0% ~ 1.0% ~ 0.0% + 11
Slide 13: Our Growth Strategy
Our Growth Strategy » Expand earnings through steady increases in identical sales together with modest growth in operating margin (ex fuel) » Target annual EPS growth averaging 6% to 8% over a rolling three- to five-year time horizon « Including dividend, target a total shareholder return of ~8% to
Slide 14: Strong Financial Performance Through Downturn
Koaer Strong Financial Performance Through Downturn 5 Year Sales Growth ($bn) 5 Year EPS Growth? ($) FY2005 FY2010 FY2005 FY2010 1. Represents Diluted EPS excluding extraordinary items 13
Slide 15: Attractive Cash Generation And Capital Structure
Kroger Attractive Cash Generation And Capital Structure 10 Year Net Total Debt Reduction ($bn) 10 Year Deleveraging+ 10 Year Share Count Reduction (m) $8.3 Qe ez) % Q. (47 %6, 2.3x %2y % ? 9% FY2000 FY2010 FY2000 FY2010 FY2000 FY2010 @ Weighted Avg Shares O/S (Diluted) Kroger’s Strong Investment Gra
Slide 16: Consistent Record Of Rewarding Shareholders Through Share Repurchases And Dividends
Consistent Record Of Rewarding Shareholders Through Share Repurchases And Dividends Yearly Cash Deployment as a % of Net Income ($m) Total: $1,623 Total: $795 Total: $773 Total: $864 FY2006 FY2007 FY2008 FY2009 FY2010 Dividends ™ Repurchase ‘Total Payout To Shareholders Has Averaged ~70% Of Net Inco
Slide 17: Fiscal 2011 Annual Guidance
Fiscal 2011 Annual Guidance » ID supermarket sales growth (ex fuel): 3.5% to 4.5% » Annual EPS: $1.85 to $1.95 » Expect to be near the top end of this range » Q2 & Q3 growth rates expected to be near the low end of this new range 16
Slide 18: Best-In-Class Retailer
Best-In-Class Retailer Significant scale with +2,400 stores in 31 states driving $80+ billion annual revenues #1 or #2 market share in 38 of our 42 major markets Proprietary consumer insights driving strong customer loyalty Outstanding positive identical store sales momentum Consistent record of rew
Slide 19: Forward-Looking Statements
@ Forward-Looking Statements The remarks contain certain forward-looking statements about the future performance of the Company. These statements are based on management's assumptions and beliefs in light of the information currently available to it. Such statements are indicated by words or phrases
Slide 20: Slide 20
The Kroger — Jefferies 2011 Global Consumer Conference on 6ix