Conagra Brands, Inc. · NYSE:CAG
Conagra Brands — Conagra Foods — CAGNY 2013
63 slides from Conagra Brands's conference presentation, Feb 19, 2013
Slide 1: CAGNY 2013
CAGNY 2013 Feb. 19, 2013
Slide 2: Note on forward-looking statements
Note on forward-looking statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act af 1995. These forward-looking statements are based on ConAgra Foods’ Current expectations and are subject to uncertainty and changes in circums
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Slide 4: Ralcorp acquisition
4 Ralcorp acquisition Strategic addition to ConAgra Foods portfolio Creates ~$18B company Largest private brand company in North America Accretive to top-line and bottom-line goals Ralcorp acquisition • • Strategic addition to ConAgra Foods portfolio • • Creates ~$18B company • • Largest private bra
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Slide 8: Clarity + Alignment * Engagement
> Clarity + Alignment * Engagement
Slide 9: Dow Jones Sustainability Indexes
Dow Jones Sustainability Indexes Member 2012/13 CARBON DISCLOSURE PROJECT Citizenship * Governance « Philanthropy * People
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Slide 12: André Hawaux, President Consumer Foods
12 Feb. 19, 2013 André Hawaux President Consumer Foods CAGNY 2013 Feb. 19, 2013 André Hawaux President Consumer Foods CAGNY 2013
Slide 13: ‘Source: IRI calendar years ending 12/31/2010, 12/31/2011, 2/31/2012
‘Source: IRI calendar years ending 12/31/2010, 12/31/2011, 12/31/2012
Slide 14: Baked-from-the-microwave innovation
Baked-from-the-microwave innovation
Slide 15: Baked microwave innovation
Baked microwave innovation Leveraging technology BY
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Slide 17: Sweet growth: frozen desserts
Sweet growth: frozen desserts Frozen Pie Category Premium Brands Driving Growth Millions of Dollars: Millons of Dolars: ie ae , OMerie Matie Callender’s am $453 ggg Caleneos — $445 $120 S $435, $434 $100 3425 $417 $80 mts $415 $60 $405 a Sara Lee $395 $20 Fastest $285 30 growing 2010 2011 2012 2009
Slide 18: Frozen breakfast: strong growth
Frozen breakfast: strong growth Frozen Breakfast Category (Total US FDMx + Walmart) $3.0 i +299 2 $2.5 9% $2.7 3s ome) $2.4 s = oe 2006 -2007.-«= «2008 ~= 2009S 2010S 2011 significant opportunity 18 Source: IR calendar years ending 12912011
Slide 19: Marie Callender's growth
Marie Callender’s growth Net sales - indexed 200 189 3-yr CAGR 18.7% 5-yr CAGR 50 13.6% 0 FY08 FYo9 FY10 FY11 FY12 Indexed to 100 3 6 19 Sources: CAG FYDS- FY13E financials
Slide 20: Hunt's...center store growth
Hunt’s...center store growth Driving +4% category and +2 points unit share growth 2x increase in purchase motivation Source: IRI MULO Week ending 01/27/2013 Usage Insights O£ Purchased for 65 % specific recipe Drive Meal Solution programs Chill pallet in Action Alley Consumption Trends Canned Tomato
Slide 21: Hunt's Commercial
Hunt’s Commercial 21 Hunt’s Commercial
Slide 22: Reddi-wip...always in season
Reddi-wip...always in season Easy dessert solutions with a variety of host foods Consumption trends, ahs * Secondary placements * Partnerships ee * Cross-merchandising L52 L13 L4 Source: IRI MULO Week ending 01/27/2013
Slide 23: Reddi-wip Commercial
Reddi-wip Commercial 23 Reddi-wip Commercial
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Slide 25: Paul Maass, President Commercial Foods
25 Feb. 19, 2013 Paul Maass President Commercial Foods CAGNY 2013 Feb. 19, 2013 Paul Maass President Commercial Foods CAGNY 2013
Slide 26: Lamb Weston international
Lamb Weston international In 120 countries dnctudes JVs) 26
Slide 27: 2013 2014 2015 2016 2017
2013 2014 2015 2016 2017
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Slide 31: Private brand growth
Private brand growth Private Label outperformance vs. branded, in points of growth 1998 2011 Branded Private Label CAGR * +3% CAGR * +6% a Souite: Nielsen, Reflects excess growth of private label vs. branded food in terms ofyear-over-year dollarsales growth,
Slide 32: U.S. private brand market: underdeveloped
U.S. private brand market: underdeveloped Private Label Share of Packaged Food $ Swizeiend Ty 22% United Kingdom [x 36% Sermany TY 32" Netherlands x 33% pein I 22% a_i Portugal EEE 26% France | 24% Denmark | | 21% Austria ———i | 20% fend foo 15% ‘ym 1% Sourte: IR! report on Private Label fram Novemb
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Slide 34: Sales mix before and after
Sales mix before and after 34 Source: LTM revenue tix
Slide 35: Ralcorp retail sales and private label rank
Segment retail Ralcorp rank among sales ($ billion) PL offerings Ready-to-Eat Cereal $9.5 #1 Crackers 5.6 #1 Snack nuts 3.5 #1 Pasta 22 #1 Refrigerated dough 1.9 #1 Peanut butter 1.9 1 ~$40B Jams 0.9 “1 at retail Frozen waffles 0.9 #1 Table syrups 0.7 #1 5 Others 45 #1 Cookies 6.6 #2 Hot cereal 1.2
Slide 36: Managing consumer brands & private brands
Managing consumer brands & private brands ‘Sourte: Ratcon Management Presentation (Oct. 31, 2012); Public Mings; Industy iterature:
Slide 37: Combined capabilities
Combined capabilities Growing in relevancy with our customers Scale, expertise, portfolio Complementary and little overlap 37 Combined capabilities • • Growing in relevancy with our customers • • Scale, expertise, portfolio • • Complementary and little overlap
Slide 38: CPG experience to private brands
CPG experience to private brands Innovation Category and shopper insights Shopper marketing Joint business planning Packaging Procurement Transportation and warehousing Supply chain expertise Food safety expertise 38 CPG experience to private brands • • Innovation • • Category and shopper insights •
Slide 39: Example: Category growth opportunity
Example: Category growth opportunity 39 Consumer insights & Category analytics Segment emulation Consumer preferred flavors Simplified nutrition Platform emulations & Product innovation Shopper insights & Consumer activation Innovative bars flavors New bar types Bars expansion Consumer preferred pro
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Slide 41: Customer reaction
Customer reaction get “First off, congratulations! The acquisition has the potential to be a “win-win® — a win for ConAgra anda win for private brands. We look forward to working with the newly joined companies.” Frank Muschetto, Executive Vice President “Congratulations! This is a great acquisition
Slide 42: Clarity and energy at ConAgra Foods
Clarity and energy at ConAgra Foods 42 Significant progress on growth strategy Unique and relevant portfolio in the food industry Commitment to ongoing, accelerated growth Clarity and energy at ConAgra Foods • • Significant progress on growth strategy • • Unique and relevant portfolio in the food in
Slide 43: Chief Financial Officer
43 Feb. 19, 2013 Chief Financial Officer CAGNY 2013 Feb. 19, 2013 Chief Financial Officer CAGNY 2013
Slide 44: for growth
for growth
Slide 45: Annualized net sales and acquisition financing
¢ Annualized net sales: $4.3B ¢ Employs = 10,000 people ¢ Important private brand categories ¢ Strong customer relationships « Acquisition financing: — = $6.2B of new debt — = $800MM of cash — = $270MM of new CAG equity — = $200MM of commercial paper/revolver
Slide 46: Branded, Private Brand, Commercial / Foodservice
Branded Private Brand Commercial / Foodservice
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Slide 49: EPS contribution FY13 and FY14
_ -FY13: = $0.05/share | FY14: ~$0.25/share Jeamings per share, adjusted for items impacting comparability
Slide 50: Capital allocation priorities
— Debt repayment — Maintain strong dividend — Dividends, M&A, share repurchase — Debt repayment (lesser focus)
Slide 51: Cash flow
Cash flow * Sirong earnings fundamentals — Top line — Margin management — SG8A discipline © Working capital efficiency Capital expenditure discipline a1
Slide 52: Cash flow: Annualized snapshot
Cash flow: Annualized snapshot (Based on FY13) =$1.75B =$650MM oe 5 a
Slide 53: Balance sheet
Balance sheet - Post-close estimated Debt / EBITDA*: = 4.1X Agency Ratings Outlook Standard & Poor’s BBB - Stable Moody’s Baa2 Negative Fitch Ratings BBB - Stable and amount of future items makes a detailed reconciliation of projections for 1 G purposes impracticable.
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Slide 56: EPS and ROIC guidance adjusted for items impacting comparability
“EPS and ROIC guidance discussed in this presentation has been adjusted for items impacting comparability. EPS quidance is based on diluted EPS, adjusted for items impacting comparability. The inability to predict the ‘ming and amount of future items impacting comparability makes a detailed reconcil
Slide 57: Ralcorp strategically and financially important
Ralcorp strategically and financially important — Adding = $0.05 to FY13 EPS* — Adding = $0.25 to FY14 EPS* Fiscal 2013 diluted EPS* outlook: = $2.15* Focused on cash flow and near-term debt reduction Long-term financial performance improvements — Will share with CAG FY13 Q4 release this summer when
Slide 58: Questions & Answers
58 Questions & Answers Questions & Answers
Slide 59: Appendix
59 Appendix Appendix
Slide 60: Ralcorp Contribution – EPS Assumptions
Ralcorp Contribution – EPS* Assumptions Ralcorp Contribution – EPS* Assumptions
Slide 61: EPS assumptions
- Net Sales: = $18B - EBITDA*: = $2,500MM - Total Debt: = $10B - Annualized/Share Dividend: $1.00 + Annualized interest expense: = $400MM Tax rate: = 34% Total company D&A: = $600MM “APEX: = $650MM weighted avg. shares outstanding: = 425MM+ “*Adjusted for items impacting comparability. The inability
Slide 62: Regulation G Disclosure
62 Regulation G Disclosure Regulation G Disclosure
Slide 63: CAGNY 2013
CAGNY 2013 Feb. 19, 2013