The J.m. Smucker Company · NYSE:SJM
The J.m. Smucker — Barclays Global Consumer Staples Conference 2024
44 slides from The J.m. Smucker's conference presentation, Sep 3, 2024
Slide 1: Barclays Global Consumer Staples Conference
BARCLAYS GLOBAL CONSUMER STAPLES CONFERENCE September 3, 2024
Slide 2: Mark Smucker, Chair of the Board, President & CEO
MARK SMUCKER CHAIR OF THE BOARD, PRESIDENT & CHIEF EXECUTIVE OFFICER
Slide 3: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements, such as projected net sales, operating results, earnings, and cash flows, that are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from any future results, perf
Slide 4: Today's Themes
RESILIENCE OF OUR BUSINESS TODAY’S THEMES EVOLVING TO MEET THE NEEDS OF THE CONSUMER POSITIONED TO DELIVER LONG-TERM GROWTH & INCREASE SHAREHOLDER VALUE 4
Slide 5: A Strong Start to the Fiscal Year
A STRONG START TO THE FISCAL YEAR Sales and Earnings Growth ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ∙∙∙∙∙ Demonstrating the resilience of our business and our transformed portfolio 5
Slide 6: FY25 Financial Outlook
FY25 FINANCIAL OUTLOOK Provided with Q1 Earnings Release NET SALES GROWTH ADJUSTED EPS FREE CASH FLOW 8.5% - 9.5% $9.60 - $10.00 $875M Evolving our Business ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙∙ ∙ ∙ ∙ Positionin
Slide 7: Our Vision Guides Our Strategy
OUR VISION GUIDES OUR STRATEGY Engage, delight and inspire consumers by building brands they love and leading in growing categories 7
Slide 8: One of the Fastest Growing Brands in At-Home Coffee
One of the Fastest Growing Brands in At-Home Coffee is now in the Refrigerated Aisle ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ New Multi-Serve Ready-to-Drink Combines the flavor of espresso style roast with the cold and refreshing taste of an iced coffee SOURCE: SMUCKER INTE
Slide 9: Video Commercial Playing in Room
Video Commercial Playing in Room
Slide 10: Café Bustelo
CAFÉ BUSTELO ® Driving accessibility of Cafe Bustelo ® coffee to consumers across the U.S. through geographic and format expansion ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ 34% 5% 2% 7% 4% 10% 31% 7% Share of Café Bustelo® Brand Dollar Sales SOURCE: SMUCKER INTERNAL MULTI-OUTLET SHARE REPORT
Slide 11: Jif Innovation
JIF INNOVATION ® DATA DRIVEN INSIGHTS ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ Expand the Jif brand to meet growing ® usages of spreads for snacking PEANUT CHOCOLATE THE PERFECT BUTTER FLAVORED MERGER + = SPREADS Plant-Based Delicious Familiar Flavor Nostalgic 11
Slide 12: Video Commercial Playing in Room
Video Commercial Playing in Room
Slide 13: The Launch Has Exceeded Our Expectations
THE LAUNCH HAS EXCEEDED OUR EXPECTATIONS #1 The Perfect Merger New Item in Nut Based Spreads Category SOURCE: SMUCKER INTERNAL MULTI-OUTLET+C SHARE REPORT 52 WEEKS ENDED JULY 14, 2024. 13
Slide 14: Expect to Grow to $1 Billion
Expect to grow to $1 BILLION in annual net sales by the end of fiscal year 2026 NATIONAL ADVERTISING DISTRIBUTION GAINS NEW MERCHANDISING 14
Slide 15: Innovation in Stores this Month
Innovation in Stores this Month NEW VARIETIES SEASONALS 15
Slide 16: Milk-Bone Innovation
MILK-BONE INNOVATION ® The Delicious Taste of Combining the REAL Peanut Butter #1 Dog Treat and in a Convenient Bite! #1 Peanut Butter Brands WILL BE AVAILABLE N AT I O N A L LY I N JA N U A R Y SOURCE: SMUCKER INTERNAL MULTI-OUTLET SHARE REPORT 52 WEEKS ENDED AUGUST 11, 2024. 16
Slide 17: Video Commercial Playing in Room
Video Commercial Playing in Room
Slide 18: Part of the Family
PART OF THE FAMILY CONSUMERS VIEW THEIR PETS AS FAMILY MEMBERS This Innovation: ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ Nurtures Relationships and Bonds Between Pet and Family Drives Growth through Premiumization 18
Slide 19: The Hostess Brand
THE HOSTESS BRAND ® Strong Track Record of Innovation 1st Product Launched by the Hostess Brand that can be Microwaved ® TRANSFORMS WHEN WARMED RESTAURANT-INSPIRED LAVA CAKE CONVENIENT & SNACKABLE PRODUCT DESIGN 19
Slide 20: Innovation Across Our Brands
INNOVATION ACROSS OUR BRANDS Innovation Launched this Year ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙∙ ∙ ∙ ∙ ∙ ∙ Anticipated to contribute over a point of growth to net sales for fiscal 2025 20
Slide 21: Portfolio of Leading Brands
COFFEE Portfolio of Leading BRANDS FROZEN HANDHELD & SPREADS 95% of U.S. retail channel sales from categories where we hold the #1 or #2 PET FOODS branded position(A) Our products are found in in over 90% of SWEET BAKED SNACKS U.S. homes (A) INCLUDES NET SALES WITHIN OUR U.S. RETAIL SEGMENTS AND THE
Slide 22: Investor Day, December 10, 2024
INVESTOR DAY Tuesday, December 10, 2024 22
Slide 23: The J.M. Smucker Co
® THE JM. SMUCKER Co Ne CAFE: (Mn KeRONE? Folgers BUSTELO stn, iF! CHIMEEONE, - DUNKIN’ —\\nWWStabjeg CUP!
Slide 24: Tucker Marshall, Chief Financial Officer
TUCKER MARSHALL CHIEF FINANCIAL OFFICER
Slide 25: Strategic Priorities
STRATEGIC PRIORITIES ACHIEVE OUR DELIVER OUR INTEGRATE & FINANCIAL CORE BUSINESS DELIVER HOSTESS ASPIRATIONS GROW VOLUME ALIGN SYSTEMS & PROCESSES TRANSFORMATION ACHIEVE COST SYNERGIES & OPERATE WITH EXCELLENCE COST DISCIPLINE GROWTH AMBITIONS PRIORITIZE RESOURCES NURTURE A UNIFIED CULTURE CASH GENE
Slide 26: Our Long-Term Objectives
OUR LONG-TERM OBJECTIVES ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙A ∙ ∙ steady, ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ compelling, ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ and ∙ ∙ ∙ ∙ ∙ ∙compounding ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ algorithm ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ DIVIDENDS SHARE REPURCHASE & DEBT REPAYMENT OPERATING MARGIN EXPANSION 10%
Slide 27: Our Long-Term Objective: Net Sales
OUR LONG-TERM OBJECTIVE NET SALES LOW-SINGLE-DIGIT Percentage Growth
Slide 28: Key Growth Platforms
KEY GROWTH PLATFORMS Coffee Growth The The Milk-Bone ® Sweet Baked Brands, K-Cup® Uncrustables ® & Meow Mix ® Snacks & Liquid Coffee Brand Brands Segment 28
Slide 29: Our Long-Term Objective: Adjusted Operating Income
OUR LONG-TERM OBJECTIVE ADJUSTED OPERATING INCOME MID-SINGLE-DIGIT Percentage Growth
Slide 30: Profit Improvement
PROFIT IMPROVEMENT Improved Benefits from cost Realization of Relief from Moderation of volume/mix & productivity synergies stranded commodity & savings overhead input inflation 30
Slide 31: Our Long-Term Objective: Adjusted Earnings Per Share
OUR LONG-TERM OBJECTIVE ADJUSTED EARNINGS PER SHARE HIGH-SINGLE-DIGIT Percentage Growth
Slide 32: A Balanced Capital Deployment Model
A BALANCED CAPITAL Capital Dividends & Expenditures Share Repurchases DEPLOYMENT MODEL CASH FROM OPERATIONS LONG-TERM OBJECTIVE $1B free cash flow annually Strategic Debt Investments Repayment 32
Slide 33: Capital Expenditures
CAPITAL EXPENDITURES $587M LONG-TERM $477M OBJECTIVE $418M $450M 3.5% OF NET SALES $307M $269M NEAR TERM ELEVATION DUE TO UNCRUSTABLES ® SANDWICHES CAPACITY EXPANSION FY20 FY21 FY22 FY23 FY24 FY25E % of NS 3.4% 3.8% 5.2% 5.6% 7.2% 5.0% (A) (A) BASED ON MIDPOINT OF FY25 NET SALES GUIDANCE RANGE PROVI
Slide 34: Debt Profile
DEBT PROFILE Maintain Investment Grade Debt Rating 3.0x 2.5x - 3.0x Net Debt to EBITDA by end of FY27 Target Debt Leverage Ratio Prioritizing $500M of debt repayment this fiscal year and each of the next two years 34
Slide 35: Dividend Growth
DIVIDEND GROWTH $4.20 6% 10-YEAR CAGR $2.26 40-45% ADJUSTED EPS PAYOUT TARGET FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 35
Slide 36: The J.M. Smucker Co
pe THE JM. SMUCKER Co
Slide 37: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements, such as projected net sales, operating results, earnings, and cash flows that are subject to risks and uncertainties that could cause actual results to differ materially from future results expressed or implied by thos
Slide 38: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES The Company uses non-GAAP financial measures, including: net sales excluding acquisition, divestitures, and foreign currency exchange; adjusted gross profit; adjusted operating income; adjusted income; adjusted earnings per share; earnings before interest, taxes, deprecia
Slide 39: Unaudited Non-GAAP Financial Measures
UNAUDITED NON-GAAP FINANCIAL MEASURES (Dollars in millions) Three Months Ended July 31, Increase 2024 2023 (Decrease) % Net sales reconciliation: Net sales $2,125.1 $1,805.2 $319.9 18% Hostess Brands acquisition (333.7) - (333.7) (18) Canada condiment divestiture - (17.6) 17.6 1 Sahale Snacks® dives
Slide 40: Unaudited Non-GAAP Financial Measures
UNAUDITED NON-GAAP FINANCIAL MEASURES (Dollars and shares in millions, except per share data) Three Months Ended July 31, 2024 2023 Net income reconciliation: Net income $185.0 $183.6 Income tax expense 61.0 54.8 Amortization 56.0 39.8 Loss (gain) on divestitures – net - (1.2) Change in net cumulati
Slide 41: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Company Guidance Year Ending April 30, 2025 Low High Net income per common share – assuming dilution reconciliation: Net income per common share – assuming dilution $7.01 $7.41 Change in net cumulative unallocated derivative gains and losses (A) 0.16 0.16 Amortization 1.59 1.
Slide 42: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Company Guidance Year Ending (Dollars in millions) April 30, 2025 Free cash flow reconciliation: Net cash provided by operating activities $1,325 Additions to property, plant, and equipment (450) Free cash flow $875 42
Slide 43: Additional Information
ADDITIONAL INFORMATION The J.M. Smucker Co. is the owner of all trademarks and logos referenced herein, except for Dunkin’®, which is a trademark of DD IP Holder LLC. The Dunkin’® brand is licensed to The J.M. Smucker Co. for packaged coffee products sold in retail channels such as grocery stores, m
Slide 44: Additional Information
ADDITIONAL INFORMATION Crystal Beiting Vice President, Investor Relations & FP&A ir.team@jmsmucker.com Phone: (330) 682-3000 Investor Relations Website: https://investors.jmsmucker.com/ 44
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