Hormel Foods Corporation · NYSE:HRL
Hormel Foods — BMO Farm to Market Conference 2014
23 slides from Hormel Foods's conference presentation, May 20, 2014
Slide 1: Jeff Ettinger, Chairman, President and CEO
Jeff Ettinger BMO Capital Markets Chairman, President and CEO 1
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking information based on management’s current views and assumptions. Actual events may differ materially. Please refer to the cautionary statement and risk factors on pages 28-35 in the Company’s Form 10Q filed on March 7, 2014. 2
Slide 3: Q2 2014 Performance
Q2 2014 Performance In millions except per share 2014 2013 Change Sales $2,245 $2,153 + 4% Tonnage (lbs.) 1,224 1,240 - 1% Net earnings per share $0.52 $0.46 + 13% • Record sales and earnings for the quarter • Four of five segments delivered operating profit growth • Unusually harsh winter and high
Slide 4: Q2 2014 - Segment Results
Q2 2014 - Segment Results Net Sales Segment Profit Change Change Grocery Products Flat + 16% Refrigerated Foods + 10% + 38% Jennie-O Turkey Store - 1% + 2% Specialty Foods - 12% - 26% International + 23% + 34% • Domestic and International distribution gains for SKIPPY® brand • Beneficial pork operat
Slide 5: Fiscal 2014 Outlook
Fiscal 2014 Outlook • Higher input costs for beef, pork, turkey and avocados, due to tight supplies, expected in 2H14 • Continued growth of value-added product portfolio expected, albeit slower than previously planned • Guidance expected toward lower end of previously stated range of $2.17 to $2.27
Slide 6: Keys to Long-Term Growth
Keys to Long-Term Growth • Balanced model • Leading brands • Innovation • Growth categories • Strategic acquisitions • Experienced team 6
Slide 7: Balanced Model
Balanced Model Protein Packaged Foods Retail Foodservice Pork and Turkey Peanuts, Tomatoes, Avocados Financially Conservative Innovative Culture 7
Slide 8: Innovation
Innovation NPD as % of Total Sales 26% 24% 21% 22% 12% 2005 2010 2011 2012 2013 8
Slide 9: Innovation
Innovation Hormel ® REV ® wraps SKIPPY ® singles Jennie-O ® turkey Wholly Guacamole® creamy peanut butter breakfast items SPAM® brand 100-calorie minis 9
Slide 10: Strategic Acquisitions
Strategic Acquisitions International & Other: China Grocery Products: Traditional Jennie-O: Value-Added Turkey 2014 2006 2013 2001 Refrigerated Foods: Value-Added Protein Grocery Products: Mexican Provena Foods, Inc. 2004 2006 2006 2007 2005 2009 2010 2011 Refrigerated Foods: Convenience Meals Speci
Slide 11: Uses of Cash
Uses of Cash (2009-2013) Generating consistent and strong free cash flow $2.4 billion invested or returned to shareholders since 2009 Return to Shareholders Invest in the Business (Share Rep and Dividends) (Capex and M&A) Share Dividends Capex M&A* Repurchase *Includes investments in MegaMex Foods j
Slide 12: Leading Brands
Leading Brands More than 30 brands have #1 or #2 market share positions in their category These categories are across Grocery Products, Refrigerated Foods, and Jennie-O Turkey Store 12
Slide 13: Supporting Our Brands
Supporting Our Brands GROWTH! 13
Slide 14: Growth Categories
Growth Categories SKIPPY® Brand SnackingSKIPPY and Gatherings Mexican Foods Better-for-You Products International 14
Slide 15: SKIPPY brand – One Year Later
SKIPPY® brand – One Year Later • #1 share in “natural” and #2 overall share • Distribution gains and improved feature activity • Gaining shelf space – more in line with category share • Improved household penetration • National advertising campaign – Fall 2014 Data Source: IRI 12 Wks Ending 5/11/201
Slide 16: Snacks and Gatherings
Snacks and Gatherings • Convenient, on-trend, and better-for-you snacking alternatives • Dominant retail positions in party trays and pepperoni • REV® wraps meet snacking-on-the-go needs of busy consumers 16
Slide 17: Mexican Foods
Mexican Foods • Growing ethnic portfolio with broad array of products • Authentic and mainstream items appeal to a variety of consumers • Wholly Guacamole® - #1 selling brand of refrigerated guacamole IRi May 2014 17
Slide 18: Better-for-You Products
Better-for-You Products • Jennie-O Turkey Store offers a wide variety of better-for-you, innovative, and delicious products for all eating occasions • Hormel® Natural Choice® products offer great taste with no artificial preservatives 18
Slide 19: International
International Delivering Accelerated Growth Revenues Segment Profit In millions In millions $448.2 $71.5 $240.4 $27.0 2008 2009 2010 2011 2012 2013 2008 2009 2010 2011 2012 2013 Fresh Pork China 19
Slide 20: Foodservice in China
Foodservice in China HFIC China Foodservice Sales China Hormel Foods China named Papa John’s International Supplier of the Year 2010 2011 2012 2013 Source: The NPD Group / CREST 20
Slide 21: Long Runway for Growth
Long Runway for Growth Low Household Penetration (HHP) Jennie-O® turkey 4% burgers and chubs Hormel ® Natural Choice® deli meats and Hormel ® 6% party trays Jennie-O® 9% fresh tray pack Hormel ® Compleats® 11% microwave meals SPAM® family 12% of products Hormel® pepperoni 20% SKIPPY® peanut butter 2
Slide 22: Hormel Foods
Hormel Foods • Strong management team • Average tenure nearly 26 years • Proven ability to execute • Solid long-term growth record • Sales, EPS, and dividends EPS $1.95 $1.04 2008 2009 2010 2011 2012 2013 22
Slide 23: BMO Capital Markets Farm to Market Conference 2014
2014 Farm to Market Conference