Brown Forman Inc · NYSE:BF.A
Brown Forman — Q2 2022 Earnings Presentation
19 slides from Brown Forman's earnings presentation, Dec 8, 2021
Slide 1: Second Quarter and First Half Fiscal 2022 Earnings Call
Brown-Forman Second Quarter and First Half Fiscal 2022 Earnings Call
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: Tariffs
Tariffs 3 3
Slide 4: Current Business Environment
Current Business Environment On-Premise Tourism Prior-Year Comparison Healthy Spirits Industry Strong Brand Portfolio Supply Chain 4 3
Slide 5: Net Sales Comparisons
Net Sales Comparisons First Half Fiscal 2022 Brown-Forman Corporation Jack Daniel's Tennessee Whiskey Jack Daniel's RTD & RTP Reported Underlying1 Reported Underlying1 Reported Underlying1 37% 34% 14% 15% 12% 9% 4% 6% 4% (1)% (7)% (12)% 1H21 1H22 1H21 1H22 1H21 1H22 Notes - Change is versus prior-ye
Slide 6: Strong Net Sales Growth
Strong Net Sales Growth First Half Fiscal 2022 6 6 4
Slide 7: Sustainability
Sustainability Climate Action Water Stewardship Circular Economy Supply Chain 7 8
Slide 8: First Half Fiscal 2022
First Half Fiscal 2022 Net Sales Gross Margin Operating Income & Diluted EPS • Reported net sales grew 9% (+12% Underlying1) • Declined 10 bps • Reported operating income declined 15% ◦ Higher input costs (+13% Underlying1) ◦ Developed international, emerging markets and the Travel Retail channel de
Slide 9: Net Sales Growth
Net Sales Growth Reported Underlying 1 3% 9% U.S. U.S. —% 6% Developed 10% Developed 10% International 14% International 12% (13)% —% Emerging Emerging 26% 25% (49)% -59% Travel Retail Travel Retail 38% 64% 1H21 1H22 1H21 1H22 Notes - Change is versus prior-year period. Totals may differ due to roun
Slide 10: First Half Fiscal 2022 Results
First Half Fiscal 2022 Results Acquisitions Estimated Reported Foreign and Net Change Underlying Change Impairment Exchange Divestitures In Change (%) Charges Impact (+/-) Distributor (%)1 (+/-) (+/-) Inventories (+/-) Net Sales 9% 2% —% -1% 2% 12% Gross Profit 9% 1% —% -1% 3% 12% Advertising 24% —%
Slide 11: Gross Margin Declined 10 bps
Gross Margin Declined 10 bps Higher input costs and the impact of supply chain constraints largely offset by the effect of acquisitions and divestitures 60.2% 60.1% 0.4% —% (0.1)% (0.4)% 1H21 Price/Mix Cost Acquisitions & Foreign 1H22 Divestitures Exchange 11 11
Slide 12: Revised Fiscal 2022 Outlook
Revised Fiscal 2022 Outlook Despite challenges, we expect: Prior Guidance Revised Guidance Underlying1 Net Sales MSD HSD Reported Gross Margin Flat to Slight Decline Flat to Slight Decline Underlying1 Operating Expenses MSD HSD Underlying1 Operating Income MSD HSD 1 See appendix for non-GAAP definit
Slide 13: Appendix
Appendix 15
Slide 14: Non-GAAP Reconciliation
Non-GAAP Reconciliation We use certain 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 below, should be viewed as supplements to (not substitutes for) our results of op
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
Definitions Other Metrics. • “Depletions.” We generally record revenues when we ship our products to our customers. “Depletions” is a term commonly used in the beverage alcohol industry to describe volume. Depending on the context, “depletions” usually means either (a) our shipments directly to reta
Slide 17: Reconciliation – First Half Fiscal 2022 Net Sales Growth
Reconciliation – First Half Fiscal 2021 & First Half Fiscal 2022 Net Sales Growth* Estimated Net Acquisitions & Foreign Exchange Six months ended October 31, 2020 Reported Change in Distributor Underlying Divestitures (+/-) (+/-) Inventories (+/-) Brown-Forman Corporation -1% —% 1% 4% 4% Estimated N
Slide 18: Reconciliation – Net Sales Growth by Geographic Area
Reconciliation – First Half Fiscal 2021 & First Half 2022 Net Sales Growth by Geographic Area* Six months ended October 31, 2020 Estimated Net Acquisitions & Foreign Exchange Geographic Area Reported Change in Distributor Underlying Divestitures (+/-) (+/-) Inventories (+/-) United States 3% —% —% 6
Slide 19: Reconciliation – Net Sales Growth
Reconciliation – First Half Fiscal 2022 Net Sales Growth* Estimated Net Acquisitions & Foreign Exchange Six months ended October 31, 2021 Reported Change in Distributor Underlying Divestitures (+/-) (+/-) Inventories (+/-) Premium Bourbons 11% —% —% 7% 18% Estimated Net Acquisitions & Foreign Exchan