Hormel Foods Corporation · NYSE:HRL
Hormel Foods — Q4 2023 Earnings Presentation
25 slides from Hormel Foods's earnings presentation, Nov 29, 2023
Slide 1: Fourth Quarter Fiscal 2023 Supplemental Information
Fourth Quarter Fiscal 2023 SUPPLEMENTAL INFORMATION COMPANY MANAGEMENT RINGING THE CLOSING BELL AT THE NEW YORK STOCK EXCHANGE, OCTOBER 11, 2023
Slide 2: Forward-Looking Statements and Non-GAAP Information
Quarterly Quarterly DISCLAIMERS Supplement Supplement Forward-Looking Statements This presentation contains “forward-looking” information within the meaning of the federal securities laws. The “forward-looking” information may include statements concerning the Company’s outlook for the future as wel
Slide 3: Continuing to Deliver on Our Commitments
ESG Quarterly UPDATE Supplement Continuing to Deliver on Our Commitments To consumers, team members and the communities where we live and work Honored as “Best for Vets” Employer for 11 Straight Years Again Identified for Leading Internship Program “Our company has a long history of supporting the “
Slide 4: Fans of the Brand Helped Support Maui Relief Efforts
COMMUNITY Quarterly COMMITMENT Supplement Fans of the Brand Helped Support Maui Relief Efforts When the August wildfires first broke out on the island of Maui, the team behind the SPAM® brand responded with a donation of cash and product with a retail value of more than $1,000,000 to directly help t
Slide 5: Historic Safety Achievement
EMPLOYEE Quarterly SAFETY Supplement Historic Safety Achievement 2023 was our safest year ever, thanks to our dedicated team members Total Case Incident Rate for Hormel Foods * “We are pleased to announce 2023 as our 10.0 safest year in company 9.0 history! From Speaking Up 8.0 to Creating Solutions
Slide 6: Innovating Across Our Portfolios
Quarterly INNOVATION Supplement Innovating Across Our Portfolios Bringing exciting innovation to the marketplace and for the holiday season The makers of the Skippy® Actress Francia Raísa and the Herdez® habanero hot sauce Hormel® Black Label® Hormel Foodservice brand introduce new makers of the La
Slide 7: Fiscal 2023 Business Highlights
FISCAL 2023 Fiscal 2023 HIGHLIGHTS Fiscal 2023 Business Highlights • We achieved a second consecutive year of net sales in excess of $12 billion, continued to reinvest in leading brands, drove strong operating cash flows of $1 billion and returned a record amount of cash to shareholders in the form
Slide 8: Second Consecutive Year of Net Sales Exceeding $12B
FINANCIAL Fiscal 2023 METRICS Second Consecutive Year of Net Sales Exceeding $12B While continuing to reinvest in the growth of our leading brands Net Sales Advertising (in billions) (in millions) +5% 4-yr CAGR $12.1 $160 +6% $157 4-yr CAGR $139 $9.5 $131 $124 2019 2023 2019 2020 2021 2022 2023 Net
Slide 9: Progress Addressing Near-term Challenges
ADDRESSING Fiscal 2023 CLEAR PRIORITIES Progress Addressing Near-term Challenges Including inventory, margins and our snack nuts business Improving the Planters® Lowering Inventory Stabilizing Margins Snack Nuts Business2 Finished Goods Inventory Adjusted ($ millions) Operating Margin1 $992 9.9% $98
Slide 10: Continuing to Generate Strong and Consistent Cash Flow
OPERATING CASH Fiscal 2023 FLOW & LEVERAGE Continuing to Generate Strong and Consistent Cash Flow Supporting our disciplined capital allocation strategy and shareholder commitments Operating Cash Flow Cash & Mkt Sec. Debt (in billions) $1.13 $1.00 $1.13 $1.05 $753M $3.3B $0.92 Current Net EBITDA (LT
Slide 11: Returning Cash to Shareholders
COMMITMENT TO Fiscal 2023 DIVIDEND Returning Cash to Shareholders Announced 58th consecutive increase to the annual dividend* 58 11%10-yr CAGR $1.13 Consecutive Years of Dividend Increases $1.10 $0.84 $0.93 $0.98 $1.04 95+ Years of Dividend $0.75 Payments $0.68 Without Interruption $0.58 $0.50 $0.40
Slide 12: Additional Fiscal 2023 Financial Disclosures
ADDITIONAL Fiscal 2023 DISCLOSURES Additional Fiscal 2023 Financial Disclosures • Advertising investments were $160 million, compared to $157 million last year. • The effective tax rate was 21.8%, compared to 21.7% for the previous year. • Capital expenditures were $270 million, compared to $279 mil
Slide 13: Fourth Quarter Key Messages
BUSINESS Fourth Quarter HIGHLIGHTS Fiscal 2023 Fourth Quarter Key Messages • We delivered results in line with the low end of our revenue and adjusted diluted net earnings per share1 expectations. • We drove double-digit segment profit growth in Foodservice due to higher volumes and improved mix. •
Slide 14: Making Progress on Our Six Strategic Priorities
Making Progress on Our Six Strategic Priorities Drive focus and growth in Expand leadership Aggressively develop our Retail business in foodservice our global presence ▪ We grew volume and sales in the marketplace during the ▪ We delivered volume growth during the fourth quarter ▪ In collaboration w
Slide 15: Fourth Quarter Financial Metrics
Q4 FINANCIAL Fourth Quarter METRICS Fiscal 2023 Fourth Quarter Financial Metrics Strength in Foodservice offset by pressure in Retail and International segments Volume Net Sales Diluted Net EPS Adjusted Diluted Net EPS1 Even (3)% (18)% $3.28B (29)% $0.51 $0.51 $0.42 1.16B 1.16B $3.20B $0.36 $2.86B Q
Slide 16: Retail
RETAIL Fourth Quarter SEGMENT RESULTS Fiscal 2023 Retail Segment profit declined on lower net sales, unfavorable mix, increased brand investments Segment Results Segment Highlights Q4 • Volume and net sales growth from the value-added meats, Retail Segment YoY Percent Change (%) emerging brands and
Slide 17: Foodservice
FOODSERVICE Fourth Quarter SEGMENT RESULTS Fiscal 2023 Foodservice Higher volumes and improved mix drove increased segment profit Segment Results Segment Highlights Foodservice Segment Q4 • Volume and net sales for the quarter increased, YoY Percent Change (%) driven by a significant recovery across
Slide 18: International
INTERNATIONAL Fourth Quarter SEGMENT RESULTS Fiscal 2023 International Results impacted by softness in China, lower branded export demand Segment Results Segment Highlights International Segment Q4 • As anticipated, net sales declined as a result of YoY Percent Change (%) lower branded export volume
Slide 19: Fiscal 2024 Outlook
FISCAL 2024 Quarterly OUTLOOK Supplement Fiscal 2024 Outlook Expecting net sales growth, investment in transformation and modernization initiative Fiscal 2024 Outlook Commentary Fiscal 2024 Outlook Fiscal 2023 The Company expects: Net Sales (in billions) $12.2 – $12.5 $12.1 • Net sales growth of 1%
Slide 20: Additional Information
David Dahlstrom Additional Director of Investor Relations Information dwdahlstrom@hormel.com 20
Slide 21: Non-GAAP Financial Measures
Quarterly APPENDIX Supplement Non-GAAP Financial Measures • The non-GAAP financial measures of adjusted selling, general and administrative expenses as a percent of net sales, adjusted operating income, adjusted operating margin, adjusted earnings before income taxes, adjusted diluted net earnings p
Slide 22: Reconciliation from GAAP to Non-GAAP Adjusted Measures
Quarterly APPENDIX Supplement The tables below show the calculations to reconcile from the GAAP measures to the non-GAAP adjusted measures 22
Slide 23: Adjusted Segment Profit
Quarterly APPENDIX Supplement Adjusted Segment Profit 23
Slide 24: Net Debt/EBITDA
Quarterly APPENDIX Supplement Net Debt/EBITDA 24
Slide 25: Fiscal 2024 Outlook
Quarterly APPENDIX Supplement Fiscal 2024 Outlook Our fiscal 2024 outlook for adjusted diluted net earnings per share is a non-GAAP financial measure that excludes, or has otherwise been adjusted for, items impacting comparability, including estimated charges associated with the transformation and m