Brown Forman Inc · NYSE:BF.A
Brown Forman — H1 FY2023 Earnings Presentation
20 slides from Brown Forman's earnings presentation, Dec 7, 2022
Slide 1: First Half Fiscal 2023 Results
First Half Fiscal 2023 Results
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains statements, estimates, and projections that are “forward-looking statements” as defined under U.S. federal securities laws. Words such as “aim,” “anticipate,” “aspire,” “believe,” “can,” “continue,” “could,” “envision,” “estimate,” “expect,” “exp
Slide 3: First Half Fiscal 2023 Highlights
First Half Fiscal 2023 Highlights Double-digit reported +11% and organic +17% top line results Jack Daniel’s Tennessee Whiskey Woodford Reserve +9% reported net sales growth (+18% organic) +39% reported net sales growth (+40% organic) Ready-to-Drink +14% reported net sales growth (+20% organic) Repo
Slide 4: First Half Fiscal 2023 Results
First Half Fiscal 2023 Results Reported Reported Acquisitions and Impairment Foreign Organic Change1 ($ in millions, Change Divestitures Charges Exchange except per share (%) (+/-) (+/-) (+/-) (%) amount) Net Sales $2,101 11% —% —% 6% 17% Gross Profit $1,235 8% —% —% 9% 17% Advertising $231 19% —% —
Slide 5: Net Sales Across Brands
First Half Fiscal 2023 Net Sales Across Brands 1 REPORTED ORGANIC 13% 20% Whiskey Whiskey 8% 11% Jack Daniel’s Family 9% Jack Daniel’s Family 17% of Brands 9% of Brands 9% Jack Daniel’s 9% Jack Daniel’s 18% Tennessee Whiskey 14% Tennessee Whiskey 14% 39% 40% Premium Bourbons Premium Bourbons 11% 11%
Slide 6: Net Sales Across Geographic Clusters
First Half Fiscal 2023 Net Sales Across Geographic Clusters REPORTED ORGANIC1 REPORTED ORGANIC1 CHANGE CHANGE CHANGE CHANGE 14% 14% 14% 11% 11% 3% 3% —% U.S. FY23 FY22 FY23 FY22 DEVELOPED FY23 FY22 FY23 FY22 REPORTED ORGANIC1 REPORTED ORGANIC1 CHANGE CHANGE CHANGE CHANGE 60% 67% 26% 27% 24% 38% 38%
Slide 7: Gross Margin Decreased Basis Points
First Half Fiscal Year 2023 Gross Margin Decreased 130 Basis Points 60.1% 1.4% 0.1% 2.4% 58.8% (1.4)% (3.8)% 1H FY22 Cost Price/Mix Removal of Acquisitions & Foreign 1H FY23 (excluding Tariffs Divestitures Exchange tariffs) 7
Slide 8: Next Generation of Growth
First Half Fiscal Year 2023 Next Generation of Growth McLAREN RACING JACK & COKE DIPLOMÁTICO GIN MARE 8
Slide 9: Fiscal 2023 Outlook
Fiscal 2023 Outlook Organic net sales growth expected to be in the high-single digit range. Projected reported gross margin to be consistent with the first half of fiscal 2023. Anticipate high-single digit organic operating income growth. Expect fiscal 2023 effective tax rate to be in the range of a
Slide 10: Appendices
Appendices NOTHING BETTER IN THE MARKET. @ BROWN-FORMAN 10
Slide 11: Non-GAAP Reconciliation: First Half FY 2023 vs. First Half FY 2022
Non-GAAP Reconciliation: First Half FY 2023 vs. First Half FY 2022 Use of Non-GAAP Financial Information.We use some financial measures in this presentation that are not measures of financial performance under U.S. generally accepted accounting principles (GAAP). These non-GAAP measures, defined bel
Slide 12: Non-GAAP Reconciliation: First Half FY 2023 vs. First Half FY 2022 (cont.)
Non-GAAP Reconciliation: First Half FY 2023 vs. First Half FY 2022 (cont.) As of the third quarter ended January 31, 2022, we changed certain non-GAAP financial measures that we have historically used. We no longer report “underlying changes” in certain measures of the statements of operations; inst
Slide 13: Non-GAAP Reconciliation: First Half FY 2022 vs. First Half FY 2021
Non-GAAP Reconciliation: First Half FY 2022 vs. First Half FY 2021 Use of Non-GAAP Financial Information.We use some financial measures in this presentation that are not measures of financial performance under U.S. generally accepted accounting principles (GAAP). These non-GAAP measures, defined bel
Slide 14: Non-GAAP Reconciliation: First Half FY 2022 vs. First Half FY 2021 (cont.)
Non-GAAP Reconciliation: First Half FY 2022 vs. First Half FY 2021 (cont.) We use the non-GAAP measure “organic change,” along with other metrics, to: (a) understand our performance from period to period on a consistent basis; (b) compare our performance to that of our competitors; (c) calculate com
Slide 15: Definitions
Definitions From time to time, to explain our results of operations or to highlight trends and uncertainties affecting our business, we aggregate markets according to stage of economic development as defined by the International Monetary Fund (IMF), and we aggregate brands by beverage alcohol catego
Slide 16: Definitions (continued)
Definitions (continued) • “Tequila” includesthe Herradura family of brands (Herradura), el Jimador, and other tequilas. • “Wine” includes Korbel California Champagne and Sonoma-Cutrer wines. • “Vodka” includes Finlandia. • “Non-branded and bulk” includes our net sales of used barrels, contract bottl
Slide 17: Definitions (continued)
Definitions (continued) Other Metrics. • “Shipments.” We generally record revenues when we ship or deliver our products to our customers. In this document, unless otherwise specified, we refer to shipments when discussing volume. • “Depletions.” This is a term commonly used in the beverage alcohol i
Slide 18: Geographic Reconciliation - First Half Fiscal 2023
Geographic Reconciliation - First Half Fiscal 2023 Acquisitions & Six months ended October 31, 2022 Reported Foreign Exchange (+/-) Organic1 Divestitures (+/-) United States 11% —% —% 11% Developed International 3% —% 11% 14% Emerging 14% —% 13% 27% Travel Retail 60% —% 7% 67% Acquisitions & Six mon
Slide 19: Brand Reconciliation - Net Sales Growth
Brand Reconciliation - First Half Fiscal 2023 Net Sales Growth Acquisitions & Six months ended October 31, 2022 Reported Foreign Exchange (+/-) Organic1 Divestitures (+/-) Whiskey 13% —% 7% 20% Jack Daniel’s Family of Brands 9% —% 8% 17% Jack Daniel’s Tennessee Whiskey 9% —% 8% 18% Premium Bourbons
Slide 20: Brown-Forman
@) BROWN-FORMAN