The Marzetti Company · NASDAQ:MZTI
The Marzetti — Lancaster Colony — Investor Presentation (March 2022)
40 slides from The Marzetti's investor presentation, Mar 22, 2022
Slide 1: Lancaster Colony Corporation
Lancaster Colony Corporation March 22, 2022
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation was prepared by Lancaster Colony Corporation for information purposes only and is not an offer or solicitation with respect to the purchase or sale of Company securities. We desire to take advantage of the “safe harbor” provisions of the Private Securities Lit
Slide 3: About Lancaster Colony Corporation
About Lancaster Colony Corporation P3 • Manufacturer and Marketer of Specialty Food Products • Established in 1961 • Headquartered in Westerville, Ohio • FY21 Net Sales of $1.5 Billion (primarily U.S.) • 15 Production Facilities in Nine States • Approximately 3,200 Employees
Slide 4: Company Highlights
Company Highlights P4 • Leading Market Share Positions in Retail Food Categories • Supplier to 18 of the Top 30 National Restaurant Chains • Growing and Consumer-Relevant Retail Licensing Program • Long History of Sustained Organic Sales Growth • Strong Cash Flows • One of 13 U.S. Companies to have
Slide 5: In 2016, We Defined Our "Better Food Company" Strategy
In 2016, We Defined Our"Better Food Company" Strategy P5 1. Defined Winning - Pursue Top Quartile Financial Performance • Grow Organic Sales Volumes Low- to Mid-Single Digit (pounds shipped basis) • Grow Operating Margins 2. Developed Strategy • Strategic Growth Initiatives - Accelerate Base Busines
Slide 6: Retail Sales Mix (57% of Total Net Sales)
Retail Sales Mix (57% of Total Net Sales) P6 Refrigerated Frozen Dressings, Dips Breads & Other 37% 27% Shelf-Stable Dressings, Sauces & Croutons 36% * * * Based on approximated net sales for the 12 months ending June 30, 2021. Calculation of Retail Sales at 57% of Total Net Sales excludes Foodservi
Slide 7: Foodservice Sales Mix (43% of Total Net Sales)
Foodservice Sales Mix (43% of Total Net Sales) P7 Branded & Other 22% National Accounts 78% QSR Customers Based on approximated net sales for the 12 months ending June 30, 2021. Excludes Foodservice sales attributed to a temporary supply agreement resulting from the November 2018 acquisition of Omni
Slide 8: Retail Segment Growth Initiatives
Retail Segment Growth Initiatives P8 Initiative Brand/(Retailer) Products Initial Ship Date Innovation/Renovation Fall 2021 3-Cheese Bread Sticks July 2019 Jalapeno & Cheddar Bread Sticks September 2021 Simply Plant Based Salad Dressings and Dips Spring 2022 Regional Launch April 2021 (National Dist
Slide 9: Chick-fil-A Retail Channel Distribution Overview
Retail Segment Growth Initiatives P9 Chick-fil-A Retail Channel Distribution Overview Wave One Wave Two Wave Three Wave Four Florida Pilot Test Initial Shipments Initial Shipments Initial Shipments March 2020 Start Late Oct 2020 Feb 2021 Late April 2021 Sales at Retail Totaled $121.3 MM for the 52 w
Slide 10: Strategic Growth Initiatives: Simplify Supply Chain
Strategic Growth Initiatives P10 Simplify Supply Chain Lean Six Sigma Program • 14 waves of Green Belts trained • > 100 Green Belt graduates to date • Monthly calls with Directors to review progress and share best practices • Training program has achieved cost savings of >$4MM annually Six Sigma for
Slide 11: Strategic Growth Initiatives: Strategic Procurement
Strategic Growth Initiatives P11 Simplify Supply Chain Strategic Procurement • Should-Cost Modeling • More Extensive Competitive Bidding • Strategic Supplier Selection • Extending Payment Terms
Slide 12: Strategic Growth Initiatives: Project T²
Strategic Growth Initiatives P12 Simplify Supply Chain Transportation and Warehousing Initiatives Project T² • Transportation Management System • Expanded Base of Dedicated Carriers • Lane and Truckload Optimization • Mixing Centers • Added New Columbus-Based Warehouse Location and Pursuing Other In
Slide 13: Successful Track Record of Growth through Acquisitions
Successful Track Record of Growth through Acquisitions P13 $ in Millions $1,500 11%* Compound Annual Growth Rate 2018 2016 $1,000 2003 2015 2000 $500 1997 1989 1978 1969 1971 1980 1990 2000 2010 2021 Net sales information is presented as originally reported in Lancaster Colony's Annual Report for th
Slide 14: Strengthened Organization
Strengthened Organization P14 Strengthened Leadership Team • Supply Chain • R&D and Quality • Retail • Foodservice • Information Technology • Finance Established Transformation Program Office • ERP Initiative Aligned Compensation Incentives with Sales Growth, Operating Income Growth and Shareholder
Slide 15: Investing in Plants to Drive Efficiency and Support Growth
Strengthened Organization P15 Investing in Plants to Drive Efficiency and Support Growth Significant Capacity Expansion Project for Dressings and Sauces * * * • Adds 192,000 square feet to existing facility in Horse Cave, KY • Provides increased processing, warehousing and utilities to expand produc
Slide 16: Lancaster Colony's Commitment to ESG
Lancaster Colony’s Commitment to ESG P16 Building a Solid Foundation for ESG Disclosure and Performance INVESTORS, Materiality assessment, disclosure frameworks, CUSTOMERS, ESG ratings & disclosure best practices COMMUNITY & EMPLOYEES RATING FIRMS STAKEHOLDER Executing repeatable disclosure strategy
Slide 17: Published First Corporate Sustainability Report in Jan. 2022
Lancaster Colony’s Commitment to ESG P17 Published First Corporate Sustainability Report in Jan. 2022 – ESG Rating Scores Improved to Top Quartile in Packaged Foods Industry (per Sustainalytics) Strong Percentile Rankings! Pre-Disclosure Post-Disclosure Published First Corporate Sustainability Repor
Slide 18: Strong Growth in Retail; Foodservice Demand Impacted by COVID-19
Strong Growth in Retail P18 Foodservice Demand Impacted by COVID-19 Net Sales Results Fiscal First Half – Six Month Periods Ended December 31 $ in Millions $1,000 $820 +13.3% $800 $692 $724 +4.6% +3.9% $352 $600 $308 + 14.1% $340 -9.4% +7.2% $400 $469 $200 $416 $352 +12.7% +0.9% +18.2% $- FY20 - H1
Slide 19: FY22 First Half Gross Profit Impacted by Inflationary Costs
FY22 First Half Gross Profit Impacted by Inflationary Costs, P19 Supply Chain Disruptions and Other COVID-19 Factors Gross Profit Results Fiscal First Half – Six Month Periods Ended December 31 $ in Millions $200 $199 $192 $189 $150 $100 FY20 - H1 FY21 - H1 FY22 - H1 Six Months Ended Six Months Ende
Slide 20: FY22 First Half EBITDA Impacted by Inflationary Costs
FY22 First Half EBITDA Impacted by Inflationary Costs, P20 Supply Chain Disruptions and Other COVID-19 Factors Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)* Fiscal First Half – Six Month Periods Ended December 31 $ in Millions $150 $125 $124 $109 $100 $50 $- FY20 - H1 FY21
Slide 21: Strong Balance Sheet
Strong Balance Sheet P21 $ in Millions June 30 Dec 31 2019 2020 2021 2021 Cash and Equivalents $196 $198 $188 $114 Total Debt $0 $0 $0 $0 • Debt Free • Credit Revolver of $150 Million, Expandable up to $225 Million • Investments in Capacity Expansion Projects and ERP System to Support Continued Grow
Slide 22: Investing to Grow While Returning Cash to Shareholders
Investing to Grow While Returning Cash to Shareholders P22 FY21 – Major Cash Uses Cash Priorities Share Repurchases • Invest in Existing Business Regular Dividend - FY22 capital expenditures estimated at Payments Capital Expenditures $170 to $190 Million (including ~$100 Million for significant capa
Slide 23: Appendix A: Financial Information
Appendix A Financial Information
Slide 24: Results of Consolidated Operations – Most Recent Periods
Results of Consolidated Operations – Most Recent Periods A1 RESULTS OF CONSOLIDATED OPERATIONS (Dollars in thousands, Three Months Ended Six Months Ended except per share data) December 31, December 31, 2021 2020 Change 2021 2020 Change Net Sales $ 428,427 $ 375,015 $ 53,412 14 % $ 820,483 $ 724,252
Slide 25: EBITDA Calculation Details
EBITDA Calculation Details A2 Calculation of Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) * ($ in Millions) Six Months Ended December 31, 2019 2020 2021 Income Before Income Taxes ** $106 $107 $86 Depreciation and Amortization $18 $21 $23 Change in Contingent Consideration
Slide 26: Capital Expenditure History
Capital Expenditure History A3 $ in Millions $88 $83 $71 $31 $23 $26 $18 $17 $15 $16 12 13 14 15 16 17 18 19 20 21 Fiscal years ended June 30. Note: Capital Expenditure values noted above represent only those expenditures attributed to the company’s Retail and Foodservice operations.
Slide 27: Regular Cash Dividends Per Share
Regular Cash Dividends Per Share A4 $ Per Share $2.95 $2.75 $2.55 $2.35 $2.15 $1.96 $1.82 $1.72 $1.52 $1.41 12 13* 14 15 16 * 17 18 19 20 21 Regular cash dividends for the fiscal years ended June 30. * Excludes special cash dividends of $5.00 per share paid in FY13 and $5.00 per share paid in FY16.
Slide 28: Appendix B: Retail Brand Market Share and Related Information
Appendix B Retail Brand Market Share and Related Information
Slide 29: Portfolio of Strong Brands and Licensing Relationships
(Sales and Market Share Portfolio of Strong Brands and Licensing Relationships Data per IRI*) B1 Marzetti® Marzetti® Simply Dressed® Olive Garden SM ^ Ref. Dressing Dips $ Sales: 69.9MM $ Sales: 132.9MM $ Sales: 41.7MM $ Sales: 133.6MM $ Share: 14.1% $ Share: 82.0% $ Share: 8.4% $ Share: 6.4% (Exclu
Slide 30: Marzetti Refrigerated Dressing Market Share
Refrigerated Dressing Market Share B2 All Others Marzetti 21.1% 22.9% Bolthouse 12.3% Litehouse 24.4% Marie’s 19.3% Total Category Sales: $495.2 MM 52 weeks ending 6/27/21, Source: IRI, Total U.S. Multi-Outlet
Slide 31: Marzetti Refrigerated Dressing Distribution
Marzetti Refrigerated Dressing Distribution B3 ACV Distribution 41 - 70% 71 - 90% Total U.S. Multi-Outlet 70.9% ACV Weighted Distribution 52 weeks ending 6/27/21, Source: IRI, Total U.S. Multi-Outlet
Slide 32: Marzetti Produce Dip Market Share
Produce Dip Market Share B4 Marzetti 82.0% Private Label 2.3% All Others 2.5% Litehouse 12.0% Concord 1.2% Total Category Sales: $162.0 MM 52 weeks ending 6/27/21, Source: IRI, Total U.S. Multi-Outlet
Slide 33: Marzetti Dip Distribution
Marzetti Dip Distribution B5 ACV Distribution 21 - 80% 81 - 100% Total U.S. Multi-Outlet 73.8% ACV Weighted Distribution 52 weeks ending 6/27/21, Source: IRI, Total U.S. Multi-Outlet
Slide 34: New York Bakery Frozen Garlic Bread Market Share
Frozen Garlic Bread Market Share B6 Pepperidge Farm New York Bakery 12.7% 41.2% All Others 5.9% Private Label 31.6% Cole’s 8.6% Total Category Sales: $632.2 MM 52 weeks ending 6/27/21, Source: IRI, Total U.S. Multi-Outlet
Slide 35: New York Bakery Frozen Garlic Bread Distribution
New York Bakery Frozen Garlic Bread Distribution B7 ACV Distribution 90 - 100% Total U.S. Multi-Outlet 92.8% ACV Weighted Distribution 52 weeks ending 6/27/21, Source: IRI, Total U.S. Multi-Outlet
Slide 36: Sister Schubert's Frozen Roll Market Share
Frozen Roll Market Share B8 Private Label Sister Schubert’s 4.3% 51.6% All Others 16.4% Rhodes 27.7% Total Category Sales: $266.3 MM 52 weeks ending 6/27/21, Source: IRI, Total U.S. Multi-Outlet
Slide 37: Sister Schubert's Distribution
Sister Schubert's Distribution B9 ACV Distribution 21 - 40% 41 - 70% 71 - 100% Total U.S. Multi-Outlet 81.0% ACV Weighted Distribution 52 weeks ending 6/27/21, Source: IRI, Total U.S. Multi-Outlet
Slide 38: Crouton Market Share
Crouton Market Share B10 Marzetti, Cardini’s, Mrs. Cubbison’s / New York Bakery, Fresh Gourmet 23.9% Chatham Village 35.2% All Others 2.3% Private Label 34.2% Rothbury Farms 4.4% Total Category Sales: $260.6 MM 52 weeks ending 6/27/21, Source: IRI, Total U.S. Multi-Outlet
Slide 39: New York Bakery Crouton Distribution
New York Bakery Crouton Distribution B11 ACV Distribution 71 - 100% Total U.S. Multi-Outlet 86.1% ACV Weighted Distribution 52 weeks ending 6/27/21, Source: IRI, Total U.S. Multi-Outlet
Slide 40: Lancaster Colony Corporation contact details
Lancaster Colony Corporation • 380 PolarisParkway, Suite 400 • Westerville, Ohio 43082 www.lancastercolony.com MAR22
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