The Campbell's Company · NASDAQ:CPB
The Campbell's — Campbell Soup — Investor Day (December 2021)
112 slides from The Campbell's's investor day presentation, Dec 14, 2021
Slide 1: Investor Day | Fiscal 2022
INVESTOR DAY | FISCAL 2022 Campbell Soup Company NYSE: CPB December 14, 2021 Exhibit 99.1
Slide 2: Welcome to Investor Day Fiscal 2022
Welcome to Investor Day Fiscal 2022 Rebecca Gardy Vice President, Investor Relations
Slide 3: Forward-looking statements
The factors that could cause actual results to vary materially from those anticipated or expressed in any forward-looking statement include: impacts of, and associated responses to, the COVID-19 pandemic on our business, suppliers, customers, consumers and employees; our ability to execute on and re
Slide 4: Today's Presenters
Today’s Presenters Mark Clouse President & Chief Executive Officer 25+yrs Consumer Packaged Goods Chris Foley EVP & President, Meals & Beverages 20+ yrs Campbell Soup Company Valerie Oswalt EVP & President, Snacks 25+ yrs Consumer Packaged Goods Mick Beekhuizen EVP & Chief Financial Officer 20+yrs F
Slide 5: Today's Agenda
Today's Agenda Welcome & Opening Remarks Rebecca Gardy| Vice President, Investor Relations Advantaged for the Future Mark Clouse | President & CEO Elevating Snacking Growth and Margins Valerie Oswalt | EVP & President, Snacks Transforming Center of Store For the Next Generation Chris Foley | EVP &
Slide 6: Please submit questions via Q&A feature
Please submit questions throughout the duration of today’s broadcast by using the Q&A feature beneath the video player
Slide 7: Advantaged for the Future
Advantaged for the Future Mark Clouse President & Chief Executive Officer
Slide 8: Key Messages
Reset Campbell’s foundation through focus and execution; over-delivered on top-line and adjusted EPS commitments, while navigating a tough environment Advantaged for the future with a focused portfolio well-positioned for growth, improving capabilities, and strong cash flow that enables optionality
Slide 9: What We Said, What We Did FY19-FY21
WHAT WE SAID WHAT WE DID FY19-FY21 Simplify and focus A North America focus, with two divisions & 13 categories Transform team and culture Deep bench of experienced talent Added external perspective Diverse Board with relevant and strategic experience Deliver growth in Snacks and Stabilize Meal
Slide 10: Strong Focused Foundation Is In Place
Strong Focused Foundation Is In Place *Based on Fiscal 2021 Net Sales and total IRI US MULO $ Consumption latest 52 weeks ending 8/1/2021. 13 CORE CATEGORIES ~80%* of BUSINESS with Leading Brands in Every Category 1 GEOGRAPHY DIVISIONS 2
Slide 11: Brand Powerhouse Positioned for Advantaged Growth and Value Creation
ACCELERATED GROWTH & MARGINS SUSTAINED PROFITABLE GROWTH Brand Powerhouse Positioned for Advantaged Growth and Value Creation FY21 Net Sales $8.5B 47% 53%
Slide 12: A World Class Leadership Team in Place
A World Class Leadership Team in Place Average 20 Years of CPG Experience Mark Clouse President & CEO Valerie Oswalt EVP, President Snacks Bob Furbee EVP, Global Supply Chain Mick Beekhuizen EVP, CFO Craig Slavtcheff EVP, Chief R&D and Innovation Officer Chris Foley EVP, President Meals & Beverages
Slide 13: Evolved Our Board of Directors
Evolved Our Board of Directors, Expanding Relevant and Strategic Experience 4 Women 9 Men 3 Ethnically Diverse 12 Independent 1 Employed w/CPB 3 10+ Years 8 0-5 Years 1 6-10 Years 9 Year Average Tenure Experience Finance / Capital Allocation Corporate Governance 75% Food / CPG Industry Experience Bu
Slide 14: Compelling Purpose and Values Support Mission and Strategy
Compelling Purpose and Values Support Mission and Strategy
Slide 15: Renewed Focus on Growth Paid Off
Renewed Focus on Growth Behind Increased Marketing and Innovation Paid Off Source: 1Total IRI US MULO $ Consumption latest 52 weeks ending 8/1/2021 of Portfolio Gained or Held Share FY21 vs FY19 1 >70% Increased A&C Investment +15% Increased Innovation as a % of Net Sales +1pt
Slide 16: Win in Soup Strategy Achieved
Win in Soup Strategy Achieved This Included a Dramatic Turnaround in Soup Source: 1 Total IRI US MULO $ Consumption latest 13 weeks ending 8/1/2021; 2 Total IRI US MULO $ Consumption latest 52 weeks ending 8/1/2021 3 IRI Total US All Outlets; NBD Dollars latest 52 weeks ending 8/1/2021 10 Condensed
Slide 17: Delivered Cost Savings Goal While Integrating Snyder's-Lance
Key Areas of Integration Progress: Org Structure Streamlined Manufacturing Network Optimization Manufacturing Waste & Efficiency Warehousing & Distribution Optimization Procurement Scale and Synergies Delivered Cost Savings Goal While Successfully Integrating the Snyder’s-Lance Business Savings Targ
Slide 18: Great Progress on Debt Reduction and Cash Flow
Great Progress on Debt Reduction and Cash Flow $8.5B* $6.2B $5.1B $1.4B $2.8B $3.8B Cumulative Operating Cash Flow Total Debt (in $billions) FY21 Leverage of 3.0x** * Excludes debt of discontinued operations **See Non-GAAP reconciliation
Slide 19: 2019 Long-term Growth Algorithm vs Results
Reflects accelerated inflation and COVID-19 related challenges 2019 Investor Day Long-term Growth Algorithm* FY19-21 CAGR** Organic Net Sales Growth 1-2% 3% Adjusted EBIT Growth 4-6% 3% Adjusted EPS Growth 7-9% 11% Over-delivering on Our Top-line and EPS Expectations from Fiscal 2019 *A non-GAAP rec
Slide 20: COVID-19 Created Challenges and Opportunities
COVID-19 Created Challenges and Opportunities Opportunities Broad, increased household penetration Renewed interest in quality, trusted national brands Strengthened customer relationships & collaboration Positive consumer macro trends Challenges Supply chain disruptions Delayed capital projects Dela
Slide 21: Three Advantages for Campbell Going Forward
Given Our Strong Foundation, We See Three Advantages for Campbell Going Forward Focus Brands Growth Potential PORTFOLIO Marketing Innovation E-Commerce ESG Cash Flow Capital Priorities CAPABILITIES VALUE CREATION 1 2 3
Slide 22: Advantaged for the Future: Portfolio
Advantaged for the Future Focus Brands Growth Potential PORTFOLIO Marketing Innovation E-Commerce ESG Cash Flow Capital Priorities CAPABILITIES VALUE CREATION 1 2 3
Slide 23: Snacks Will Continue to be the Growth Engine
Snacks Will Continue to be the Growth Engine Source: IRI MULO $ consumption latest 52 weeks ending 10/31/2021. 1 Cookies excludes ” Little Debbie Nutty Bar” and “Little Debbie Peanut Clusters”. 2 Fresh Bakery is defined as Fresh Bread & Rolls. SNACKS Categories Size ($B) 2yr CAGR 4yr CAGR Share Posi
Slide 24: Well-Positioned M&B Division Can Contribute to Growth
And a Well-Positioned M&B Division Can Also Contribute to Growth Source: IRI MULO $ consumption latest 52 weeks ending 10/31/2021. 1 Salsa/Picante is defined as Total Mexican Sauce (excluding Refrigerated). MEALS & BEVERAGES Total Categories $18.1B 6% 2yr CAGR 3% 4yr CAGR Categories Size ($B) 2yr CA
Slide 25: Leading Power Brands Fueled Category Growth
Both Divisions Have Leading Power Brands that Have Fueled Category Growth Source: IRI MULO $ consumption latest 52 weeks ending 10/31/2021. *% excludes Bakery from FY21 Snacks division net sales SNACKS 2yr CAGR Share 4% 8% 7% 1% 6% 8% 11% 13% % of FY21 Snacks Net Sales* from these Power Brands: ~80%
Slide 26: Clear Growth Roadmaps in Place
Clear Growth Roadmaps in Place Transforming Center of Store For the Next Generation Sustain Growth Win in Soup 2.0 $1B Sauces Plan Powering Plant Based Positive Top-Line Elevated Experiences Within Arm's Reach Accelerate Growth Proven Growth Model Innovate to Elevate Power Brand Expansion Improve Ma
Slide 27: Advantaged for the Future: Capabilities
Advantaged for the Future Focus Brands Growth Potential PORTFOLIO Marketing Innovation E-Commerce ESG Cash Flow Capital Priorities CAPABILITIES VALUE CREATION 1 2 3
Slide 28: Transformed Our Marketing Strategies and Tactics
Campbell Has Transformed Our Marketing Strategies and Tactics Right Message, Right Place, Right Time Younger Targets Broader All Family Breaking Through in Unexpected Ways Core Consumer Focus One Size Fits All Traditional Advertising Approach Contemporizing the Classics to Reach a Broader Audience D
Slide 29: Contemporizing the Classics
Contemporizing the Classics Reframing our core brands to be more relevant Goldfish +10% Households without Kids1 Source: 1IRI $ consumption latest 26 weeks ending 10/3/2021, NBD volume adjustment, 2IRI National Consumer Panel, Total U.S. All Outlets, purchased 3/1/2020 through 10/17/2021, and not 52
Slide 30: Dynamic Communication
Dynamic Communication Engaging consumers where and when we can have the greatest impact Now at 65%+ Social /Digital
Slide 31: Power Partnerships
Power Partnerships Driving breakthrough with high impact partners Official Partner Official Soup Sponsor Media ROI Improvement +15%
Slide 32: Transformed Innovation Capabilities Through Technology and Culture
We Have Transformed Our Innovation Capabilities Through Technology and Culture AI, Machine learning based tool, scans 300 billion data points to shape our innovation and activation Internal Incubator leverages rapid prototyping to seed and evaluate new innovations Technology Culture
Slide 33: Innovation Pipelines Aligned with Consumer Trends
Our Pipelines Have Never Been Stronger and Better Aligned with Consumer Trends Twists on the Familiar Permissible Indulgence Expand Occasions SNACKS MEALS & BEVERAGES Relevancy with the Core Inspire Cooking & Meal Solutions Solo Easy Eating Expand Functional Wellness No HFCS
Slide 34: Innovation as a Catalyst to Sustain Growth
Innovation Will Provide a Meaningful Catalyst to Sustain Growth for Both Divisions Best-in-class Goals % of Net Sales Best-in-class Goals % of net sales Segment Industry Campbell by FY25 Snacks 4-5% 4% M&B 2-3% 3% Total 3-4% 3.5% Campbell % of Net Sales from Innovation
Slide 35: Strong E-Commerce Execution Driving Sales and Share Growth
Key Drivers: Accelerating shift to e-commerce Investing in core strategic areas Leaning into fast growing partnerships Driving strong millennial engagement Expanding our shoppable media enabling seamless consumer journey Leveraging technology to drive efficiencies Strong E-Commerce Execution Driving
Slide 36: Comprehensive and High Impact ESG Platform
Comprehensive and High Impact ESG Platform TRUSTED FOOD VIBRANT COMMUNITIES THRIVING PEOPLE HEALTHY ENVIRONMENT We make delicious, wholesome, accessible food people rely on every day; made with quality ingredients they can trust. We help build vibrant communities where we live and work, and we sourc
Slide 37: Advantaged for the Future: Value Creation
Advantaged for the Future Focus Brands Growth Potential PORTFOLIO Marketing Innovation E-Commerce ESG CAPABILITIES Cash Flow Capital Priorities VALUE CREATION 1 2 3
Slide 38: Strong Balance Sheet and Cash Flow: Multiple Ways to Create Value
With a Strong Balance Sheet and Significant Cash Flow, Campbell Has Multiple Ways to Create Value * See Non-GAAP Reconciliation Capital Priorities Leverage ~3x* Annual Operating Cash Flow >$1B Invest in the business Maintain competitive dividend 3. Strategic, tuck-in M&A 4. Share repurchases
Slide 39: Long-term Growth Algorithm
Compelling and Credible Long-term Growth Algorithm* * Note: A non-GAAP reconciliation is not provided for long-term targets as the company is unable to reasonably estimate the full-year financial impact of items such as actuarial gains or losses on pension and postretirement plans because these imp
Slide 40: Momentum Will Build to Full Growth Potential
Momentum Will Build as We Unlock the Full Growth Potential of the Company Transitional Accelerate FY22 FY23-24 BUILDING MOMENTUM Full Potential FY25 Long-Term Growth Target Trajectory
Slide 41: Key Messages
Reset Campbell’s foundation through focus and execution; over-delivered on top-line and adjusted EPS commitments, while navigating a tough environment Advantaged for the future with a focused portfolio well-positioned for growth, improving capabilities, and strong cash flow that enables optionality
Slide 42: Elevating Snacking Growth and Margins
Elevating Snacking Growth and Margins Valerie Oswalt EVP, President, Snacks
Slide 43: Snacking Key Messages
Snacking growth will continue, and our portfolio is well-positioned to meet consumers' desire for elevated snacking experiences Key Messages We have a clear roadmap to increase and sustain margins 1 2
Slide 44: The $151B Snacking Market Continues to Grow
The $151B Snacking Market Grew Before AND During COVID-19 and is Expected to Continue to Grow Source: 1IRI MULO+C; 2IRI State of Snacking 2021; 3NPD Group/National Eating Trends®, 2021 vs 2016; 4Kantar COVID-19 Weekly Pulse (S), 4/5/2020 More snacking throughout the day4 Increase in between-meal eat
Slide 45: Campbell Snacks Power Brands Have Been Winning
7of 8 of Power Brands Grew/Held Share1 And Campbell Snacks Power Brands Have Been Winning Source: 1IRI MULO $ Consumption latest 52 weeks ending 10/31/2021. 2IRI Panel, All Outlets, NBD Volume Adjusted latest 52 weeks ending 8/1/2021. *% excludes Bakery from FY21 Snacks division net sales % of FY21
Slide 46: Successfully Integrated into a Leading Snacks Business
SNACKS We Have Successfully Integrated into a Leading Snacks Business Strong team in place, including an integrated sales force Investment and innovation levels increased Integration to SAP in progress Reduced significance of lower margin partner brands Delivered approximately $300M through Q1 FY22
Slide 47: Margin Remains an Opportunity Going Forward
Addressable Structural Despite Growth and Value Capture, Margin Remains an Opportunity Going Forward Source: 2021 Financial statements for each competitor (Kellogg North America, Mondelez North America, General Mills U.S. Retail, Frito Lay North America); Snacks FY21 per Form 8-K filed on 12/8/2021
Slide 48: Moving from Integration to Accelerating Growth While Improving Margins
Moving from Integration Focus to Accelerating Growth While Improving Margins Elevated Experiences Within Arm's Reach Accelerate Growth Proven Growth Model Innovate to Elevate Power Brand Expansion Improve Margins Fundamentals Network and Costs Route-to-Market Investment AT or ABOVE Category Rates 17
Slide 49: Driving Accelerated Snacks Growth from Several Areas
Driving Accelerated Snacks Growth from Several Areas Well-Positioned Power Brands Strong Marketing, Investment and Innovation Proven Growth Model 1 Geographic Channel Power Brand Expansion 3 Twists On The Familiar Permissible Indulgence Expand Occasions Innovate to Elevate 2 Grow At or Above Categor
Slide 50: Power Brands Well-Positioned Against Strongest Snack Trends
PERMISSIBLE INDULGENCE Power Brands Well-Positioned Against Strongest Snack Category Trends Source: IRI MULO latest 52 weeks ending 10/31/2021 *% reflects two-year CAGR TRUE INDULGENCE 2X GROWTH OF TOTAL SNACKS CATEGORY ~25% of Snacking Category ~$32B Size 4% Growing ~30% of Snacking Category ~$40B
Slide 51: Proven Growth Model Applied to Power Brands
Proven Growth Model Applied to Power Brands Source: IRI MULO $ Consumption latest 52 weeks ending 10/31/2021 +11% 2yr growth +1.7pts 2yr share gain Largest 2yr share winner in kettle chips category SNACKS GROWTH MODEL Differentiated Brand World-Class Marketing Innovation that Strengthens Equity Expa
Slide 52: Consumer Expansion of Classic and New Brands
Successful Consumer Expansion of Classic and New Brands Will Add Incremental Growth Source: 1Piper Sandler “Taking Stock with Teens” Fall 2021 Survey For all other data points: IRI Total US - All Outlets, Rolling 52 weeks ending 10/31/2021, NBD_Volume #1 Snack brand among teens1 Household Penetratio
Slide 53: Consumer Insight and Innovation to Drive Bigger Ideas
Stronger Consumer Insight and Focus on Innovation to Drive Bigger Ideas EXPAND OCCASIONS PERMISSIBLE INDULGENCE TWISTS ON THE FAMILIAR
Slide 54: Pretzels: The Power of Innovation
Pretzels Are an Excellent Example of the Power of Innovation Source: Total IRI US MULO $ Consumption latest 52 weeks ending 10/31/2021 Twists on the Familiar Expand Occasions $ Consumption 2yr CAGR +7% +2pts $ Share Growth Snack Factory Pretzel Brand & Deli Brand #1 Preferred taste vs. competition L
Slide 55: Expanding Power Brands to Further Accelerate Growth
Expanding Power Brands is an Opportunity to Further Accelerate Growth Source: Panel = IRI NCP, FY21, Total US All Outlets, NBD Volume; POS = IRI Market Advantage (Custom Mega Hierarchy), Total US MULO + C, FY21; eCom Data = IRI OmniChannel Solution, 52 weeks ending 8/8/2021; Total Omnichannel eCom s
Slide 56: Snacks Will Add Margin Expansion to Growth Profile
Snacks Will Now Add Margin Expansion to Strong Growth Profile Elevated Experiences Within Arm's Reach Accelerate Growth Proven Growth Model Innovate to Elevate Power Brand Expansion Improve Margins Fundamentals Network and Costs Route-to-Market Investment AT or ABOVE Category Rates 17% Operating Mar
Slide 57: Snacks Value Capture Progress and Short-term Headwinds
Snacks Has Made Significant Progress on Value Capture; Some Short-term Headwinds Driven by Inflation and COVID-19 Value Capture Planned Investments & Inflation Transitional Headwinds (200)bps of Margin FY18-21 Integration Journey ~
Slide 58: Snacks Margin Roadmap
The Snacks Margin Roadmap Provides a Good Mix of Near-in Improvements and Longer-term Pipeline * Reflected in the total $1B expanded enterprise saving program Price to offset inflation Improve plant performance post SAP integration Improve mix through continued shift to Power Brands Price/pack archi
Slide 59: Margin Roadmap Building Blocks
Margin Roadmap Building Blocks * Reflected in the total $1B expanded enterprise saving program 17% Operating Margin by FY25 | 400bps of Expansion 13% 17% +200bps (100)bps +250bps +50bps ~ ~ ~ ~
Slide 60: Snacking Key Messages
Snacking growth will continue, and our portfolio is well-positioned to meet consumers' desire for elevated snacking experiences Key Messages We have a clear roadmap to increase and sustain margins 1 2 AT or ABOVE Category Rates 17% Operating Margin by FY25 ~
Slide 61: Transforming Center of Store For the Next Generation
Transforming Center of Store For the Next Generation Chris Foley EVP, President, Meals & Beverages
Slide 62: Meals & Beverages Key Messages
Sustain growth with well-positioned and category-leading brands Key Messages Deliver attractive margins, paired with improved topline, to drive steady value expansion 1 2
Slide 63: Center Store Category Growth Rates Significant
Center Store Edible Category Growth Rates Have Been Significant Source: IRI TSV, MULO, latest 52 weeks ending 10/31/2021, all syndicated definitions not CSC custom 2yr CAGR Total Edible (Shelf Stable) Soups Sauces Plant- Based Beverages +6% +7% +9% +7% 90% of the M&B Division
Slide 64: Leadership Positions in Three Strong Center of Store Categories
Soups #1 Soup #1 Broth #1 Organic Broth/Stock #1 Soup and Broth in Canada #1 Branded Soup & Broth in Foodservice Plant-Based Beverages #1 Vegetable Juice #1 Natural Channel Shelf Stable Plant-Based Beverage 3 Sauces #1 Italian Sauce #2 Branded Mexican Sauce We Have Leadership Positions in Three of t
Slide 65: Consumer Trends Building Evidence for Sustained Growth
More At Home Weekday Lunch Occasions More Beneficial E-Commerce Growth Model More At Home Cooking Occasions More Simplified Meals Consumer Behavior Trends are Building Evidence for Sustained Growth Beyond COVID-19 Source: The NPD Group/National Eating Trends®; data trends through September 2021. Sou
Slide 66: Significant Acceleration Over the Past Two Years
Soups Plant-Based Beverages Sauces Significant Acceleration Over the Past Two Years Source for 2yr share gains: IRI TSV, MULO, Campbell latest 52 weeks ending 8/1/2021, all syndicated definitions not CSC custom; FY15-FY21 Net Sales and Advertising & Consumer Promotion (A&C) are for US Retail. 2yr sh
Slide 67: Growth Led by Soup and Prego
Growth Led by Soup and Prego Source: 1 IRI National Consumer Panel, Total U.S. All Outlets, purchased 3/1/2020 through 10/17/2021, and not 52 weeks prior NBD volume adjusted, 2Total IRI US MULO $ Consumption latest 52 weeks ending 8/1/2021 #1 Italian Sauce Brand2 +5M New Millennial Households1 Added
Slide 68: Pacific Foods Has Become a Full-Force Growth Brand
Pacific Foods Has Become a Full-Force Growth Brand Growth vs. Soup / Broth Category 3X #1 Organic Soup/ Broth Brand Retail Sales since FY18 +18% Source: IRI FY19-FY21, latest 52 weeks ending 8/1/2021
Slide 69: Next Chapter Will Sustain Profitable Growth
Next Chapter Will Sustain Profitable Growth Transforming Center of Store For the Next Generation Sustain Growth Win in Soup 2.0 $1B Sauces Plan Powering Plant Based Solidify Historical Margins Improving Network Performance Operational Excellence Positive Top-Line 21% Operating Margin by FY25 Growth
Slide 70: What Has Changed on Soup
What Has Changed on Soup Share of Buyers2 +2.4pts At Home Soup Occasions per Week1 92M vs. -2% FY15-19 +6% 22M Millennial Soup Occasions Per Week1 Share of Millennial Buyers2 Net Sales FY19-21 CAGR3 +19% Increase in A&C Spend3 FY19-21 CAGR Source: 1 IRI NCP Consumer Panel, Total US All Outlets, late
Slide 71: Win in Soup 2.0
Win in Soup 2.0 1 2 3 Continue to Modernize Broaden the Strength in Portfolio Ramp up Innovation
Slide 72: Win in Soup 2.0 – Continue to Modernize
Win in Soup 2.0 – Continue to Modernize In Culture Marketing Elevated Design Shoppable Content FPO In Culture Marketing Elevated Design Shoppable Content
Slide 73: Win in Soup 2.0 – Broaden the Strength in Portfolio
Win in Soup 2.0 – Broaden the Strength in Portfolio Ready-to-create meal starter, concentrated with simple goodness Eat well, feel well with a nutritionally dense wellness routine Crafted foods with purpose rooted in organic values Soup that eats like a meal with superior taste and 10+ grams of prot
Slide 74: Win in Soup 2.0 – Ramp Up Innovation
Win in Soup 2.0 – Ramp Up Innovation Relevancy with the Core Inspire Cooking & Meal Solutions Solo Easy Eating Expand Functional Wellness
Slide 75: Transformed Meal Destination in Store
All of This Lands in a Transformed Meal Destination in Store ...
Slide 76: ...And on Screens
..And on Screens Servea INVESTOR DAY
Slide 77: Win in Soup 2.0
Win in Soup 2.0 Continue to Modernize Broaden the Strength of Portfolio Ramp up Innovation
Slide 78: Sauces Represent a Significant Opportunity
Sauces Represent a Significant Opportunity Sources: IRI TSV, MULO, latest 52 weeks ending 10/31/2021 vs 2YA, all syndicated definitions not CSC custom, Mexican is defined as Total Mexican Sauce (excluding Refrigerated).; internal research (Cooking Trends Exploration Oct 2021 n=1005). Sustained At Ho
Slide 79: The Campbell $1B Sauces Growth Engine
Italian Sauce Mexican Sauce Dinner/ Cooking Sauce New Adjacent Sauce Mainstream Premium The Campbell $1B Sauces Growth Engine Potential M&A Or New Brand Potential M&A Or New Brand
Slide 80: Sauce Growth Strategies Combine New and Core
The Sauce Growth Strategies Combine New and Core to Win in Quick Scratch Meals Innovate Against Core Brands Expand in Adjacent Categories Differentiated Growth with New Brands in Premium
Slide 81: Powering Plant-Based Growth with V8 and Pacific Foods
The Original Plant-Powered Innovating on V8 Plus Non-Dairy Growth with Baristas & In-Store Powering Plant-Based Growth with V8, While Adding Pacific Foods to the Mix
Slide 82: M&B Division Delivering Sustained Growth in All Scale Segments
M&B Division Delivering Sustained Growth in All Scale Segments Plant-Based Beverages All Other Sauces Soups 2x Division rate, accretive growth 1x Division rate, sustained growth FY22-25 growth profile Total $4.6B FY21 Net Sales Modest declines
Slide 83: Next Chapter Will Sustain Growth and Relevance
Next Chapter Will Sustain Growth and Relevance Transforming Center of Store For the Next Generation Sustain Growth Win in Soup 2.0 $1B Sauces Plan Powering Plant Based Solidify Historical Margins Improving Network Performance Operational Excellence Positive Top-Line 21% Operating Margin by FY25 Grow
Slide 84: Solidify and Sustain Historical Margins
Solidify and Sustain Historical Margins Source: Form 8-K filed on 12/8/2021 Meals & Beverages Operating Margins (%) Key initiatives to counter margin headwinds: Drive Strategic Pricing Accelerate Portfolio Prioritization Expand Operational Excellence Deliver the Growth Pre-COVID-19 Mid-COVID-19: lab
Slide 85: Meals & Beverages Key Messages
Sustain growth with well-positioned and category-leading brands Key Messages Deliver attractive margins, paired with improved topline, to drive steady value expansion 1 2 Positive Sales Growth 21% Operating Margin by FY25 ~
Slide 86: Creating Differentiated Shareholder Value
Creating Differentiated Shareholder Value Mick Beekhuizen EVP, Chief Financial Officer
Slide 87: Financial Key Messages
Entering Fiscal 2022 with elevated base driven by increased demand for our products and an improved balance sheet while mitigating inflation Key Messages Create significant shareholder value by delivering upon our long-term growth algorithm, strong cash flow generation and disciplined capital alloca
Slide 88: Elevated Foundation with FY22 Expected Above Pre-COVID-19 Levels
Continuing Operations ($ in millions, except per share) Elevated Foundation with FY22 Expected to be Significantly Above Pre-COVID-19 Levels *See Non-GAAP reconciliation. **Note: A non-GAAP reconciliation is not provided for long-term targets as the company is unable to reasonably estimate the full-
Slide 89: Operating During a Transition Period
Operating During a Transition Period Demand transitioning – remaining at an elevated base Mitigating inflation with strategic pricing and productivity initiatives Internal capability building and invest for future growth FY22 $
Slide 90: Two Key Focus Areas for Shareholder Value Creation
Two Key Focus Areas to Support Significant Shareholder Value Creation Going Forward Executing Our Long-Term Growth Algorithm Strong Cash Flow Generation & Disciplined Capital Allocation Significant Shareholder Value Creation
Slide 91: Executing Our Long-Term Growth Algorithm
Focused on Shareholder Value Creation Executing Our Long-Term Growth Algorithm Strong Cash Flow Generation & Disciplined Capital Allocation Significant Shareholder Value Creation
Slide 92: Our Long-term Growth Algorithm
Our Long-term Growth Algorithm* ~2% Organic Sales 4-6% Adj. EBIT 6-8% Adj. EPS *A non-GAAP reconciliation is not provided for long-term targets as the company is unable to reasonably estimate the full-year financial impact of items such as actuarial gains or losses on pension and postretirement plan
Slide 93: Grow Topline Through Core Expansion and Increased Innovation
Grow Topline Through Core Expansion and Increased Innovation Power Brand focus and investment to grow/hold shares Best-in-class innovation, targeting 3.5% Net Sales contribution ~3% ~1% Annual Category Growth Strategy & Execution ~2% Organic Sales* Snack Categories Center of Store Categorie
Slide 94: Accelerate Bottom Line Through Margin Expansion
Top-line growth Inflation mitigation Snacks full potential margin program Increase cost savings program to $1B by FY25 Continue to invest in our brands to drive top-line growth Corporate expenses ~1.5% of consolidated net sales ~17% Operating Margin Target by FY25 ~21% Operating Margin Target by FY
Slide 95: Expanding Enterprise Cost Savings Program to $1B
*A non-GAAP reconciliation is not provided for long-term targets as the company is unable to reasonably estimate the full-year financial impact of items such as actuarial gains or losses on pension and postretirement plans because these impacts are dependent on future changes in market conditions. T
Slide 96: EPS Expansion Supported by Growth and Capital Deployment
EPS Expansion Supported by Strong Growth and Disciplined Capital Deployment Strong EBIT growth supports continued EPS growth Relatively stable interest expense assuming 3.0x leverage level Potential further EPS accretion in case of accretive M&A Share repurchases can support incremental EPS growth
Slide 97: Strong Cash Flow Generation & Disciplined Capital Allocation
Focused on Shareholder Value Creation Strong Cash Flow Generation & Disciplined Capital Allocation Significant Shareholder Value Creation Executing Our Long-Term Growth Algorithm
Slide 98: Strong Sustainable Cash Flow Generation
Strong Sustainable Cash Flow Generation to Support Business Growth and Value Creation Operating cash flow from discontinued operations immaterial to total company in FY20 Estimated Operating cash flow from discontinued operations Operating cash flow from continuing operations Expect to generate $4B+
Slide 99: Strong Balance Sheet Allows Attractive Capital Deployment
Achieved target 3.0x leverage level Maintain investment grade rating Significant excess liquidity ($1.85B undrawn revolver) Our Strong Balance Sheet Allows Us to Pursue Attractive Capital Deployment Initiatives Net Debt*: $8.4B $5.3B $5.0B Adj. EBITDA*: $1.6B $1.8B $1.7B Net Debt* / Adjusted EBITD
Slide 100: Shifting Our Capital Allocation Priorities
Shifting Our Capital Allocation Priorities Invest in the Business Competitive Dividend Debt Reduction Tuck-in Acquisitions Share Repurchases 1 2 3 Previous Today
Slide 101: Capital Allocation Strategy Focused on Shareholder Value Creation
Capital Allocation Strategy Focused on Shareholder Value Creation Invest for Growth Competitive Dividend Disciplined investments to support revenue growth and margin improvement Grow in-line with earnings Tuck-in Acquisitions Disciplined strategic and financial criteria combined with execution asses
Slide 102: Invest in Our Business to Support Growth and Margin Expansion
Maintain our existing assets Support innovation Select capacity expansions Snacks margin improvement Invest in Our Business to Support Topline Growth and Margin Expansion Capital Expenditures % of Net Sales (Continuing Operations) ~4-5% of Net Sales per year FY23-25
Slide 103: Disciplined and Strategic Approach to M&A
Disciplined and Strategic Approach to M&A Aligned with consumer trends Fit within defined playing field Access to capabilities Value creation opportunity Timing of value creation Financing profile Identify risks and opportunities in due diligence Utilize existing capabilities to capture synergies an
Slide 104: Successful Acquisitions Shaping Integration Playbook
Transformational acquisition that created a snacking powerhouse Focused on harnessing the "Best of Both" mindset Dedicated resources to manage integration/cost savings and to run daily business Fast integration of supply chain and non-customer/consumer facing activities Delivered an organic and prem
Slide 105: An Attractive Proposition Supporting Significant Value Creation
An Attractive Proposition Supporting Significant Value Creation Executing Our Long-Term Growth Algorithm Strong Cash Flow Generation & Disciplined Capital Allocation Significant Shareholder Value Creation
Slide 106: Financial Key Messages
Entering Fiscal 2022 with elevated base driven by increased demand for our products and an improved balance sheet while mitigating inflation Key Messages Create significant shareholder value by delivering upon our long-term growth algorithm, strong cash flow generation and disciplined capital alloca
Slide 107: What We Would Like to Leave You With Today
Much stronger business today than three years ago Focus, portfolio, team and capabilities We are in Advantaged Categories In Snacks and M&B We have Advantaged Brands Well-positioned and growing Clear top and bottom-line roadmaps in place We have an Advantaged Investor Proposition Compelling and cred
Slide 108: Appendix
PPP Appendix
Slide 109: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures EBIT Full Year EBIT Margin % Earnings Diluted EPS* 2021 – As Reported $ 1,545 18.2% $ 1,008 $ 3.30 Add: Restructuring charges, implementation costs and other related costs 53 40 0.13 Deduct: Commodity mark-to-market adjustments (50) (38) (0.12)
Slide 110: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures EBIT Full Year EBIT Margin % Earnings Diluted EPS* 2021 – As Reported $ 1,545 18.2% $ 1,008 $ 3.30 Add: Restructuring charges, implementation costs and other related costs 53 40 0.13 Deduct: Commodity mark-to-market adjustments (50) (38) (0.12)
Slide 111: Net Debt Reconciliation
Net Debt July 28, 2019 August 2, 2020 August 1, 2021 Short-Term Borrowings $ 1,371 $ 1,202 $ 48 Long-Term Debt 7,103 4,994 5,010 Total Debt $ 8,474 $ 6,196 $ 5,058 Less: Cash and Cash Equivalents (31) (859) (69) Net Debt $ 8,443 $ 5,337 $ 4,989 Continuing Operations ($ millions) Reconciliation of GA
Slide 112: Adjusted EBITDA and Net Debt to EBITDA Reconciliation
($ millions) Twelve Months Ended July 28, 2019 Twelve Months Ended August 2, 2020 Twelve Months Ended August 1, 2021 Adjusted Earnings before interest and taxes $ 1,271 $ 1,447 $ 1,356 Depreciation and amortization, as reported $ 446 $ 328 $ 317 Add (Deduct): Restructuring charges, implementation co