The Marzetti Company · NASDAQ:MZTI
The Marzetti — Lancaster Colony — Investor Presentation (November 2022)
45 slides from The Marzetti's investor presentation, November 2022
Slide 1: Lancaster Colony Corporation November 2022
Lancaster Colony Corporation November 2022
Slide 2: Safe Harbor Statement
Safe Harbor Statement P2 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
Slide 3: Evolution of Lancaster Colony
Evolution of Lancaster Colony … P3 1961 – 2013 2014 – 2022 2023 and Beyond • Portfolio streamlined to exclusively food with sale of Candle business in 2014 • Beginning in 2019, a period of investment in assets and capabilities to grow and support the next phase of our business. Key investments: • Pe
Slide 4: About Lancaster Colony Corporation
About Lancaster Colony Corporation P4 • Manufacturer and Marketer of Specialty Food Products • Established in 1961 • Headquartered in Westerville, Ohio • FY22 Net Sales of $1.7 Billion (primarily U.S.) • 15 Production Facilities in Nine States • Approximately 3,200 Employees
Slide 5: Company Highlights
Company Highlights P5 • 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 6: In 2016, We Defined Our "Better Food Company" Strategy
In 2016, We Defined Our"Better Food Company" Strategy P6 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 7: Retail Sales Mix (55% of Total Net Sales)
Retail Sales Mix (55% of Total Net Sales) P7 Refrigerated Dressings, Dips Frozen & Other Breads 23% 36% Shelf-Stable Dressings, Sauces & Croutons 41% * * * Based on approximated net sales for the 12 months ending June 30, 2022. * Products for these brands are produced and sold under exclusive licens
Slide 8: Foodservice Sales Mix (45% of Total Net Sales)
Foodservice Sales Mix (45% of Total Net Sales) P8 Branded & Other 23% National Accounts 77% QSR Customers Based on approximated net sales for the 12 months ending June 30, 2022.
Slide 9: Retail Segment Growth Initiatives: Licensing
Retail Segment Growth Initiatives P9 Initiative Brand Products Initial Ship Date Added Larger 24 oz. Chick-fil-A Sauce Fall 2022 BBQ & Sriracha Flavors * National Launch March 2023 Pilot Test Now Underway for Refrigerated Dressings Licensing National Launch Planned May 2023 * Arby’s Sauce and Horsey
Slide 10: Retail Segment Growth Initiatives: Renovation
Retail Segment Growth Initiatives P10 Initiative Brand Products Initial Ship Date Adding new Licensing * Caesar flavor to Olive Garden Product Line March 2023 Filled Bites Fall 2022 Renovation Innovation & Restage Lineup of Marzetti Simply Refrigerated Dressings March 2023 * Products for these brand
Slide 11: Consumer-Relevant Retail Licensing Program
Retail Segment Growth Initiatives P11 Consumer-Relevant Retail Licensing Program • Successfully developed exclusive licensing agreements through our proven culinary expertise, strong reputation and longstanding relationships in the foodservice channel combined with our demonstrated sales execution i
Slide 12: Strategic Growth Initiatives: Lean Six Sigma Program
Strategic Growth Initiatives P12 Simplify Supply Chain and Reduce Costs Lean Six Sigma Program Since introduction in FY18, program has focused on personnel development and cost savings … • Volunteers across the company representing all areas of the business • Significant cost savings As the program
Slide 13: Simplify Supply Chain: Value Engineering
Strategic Growth Initiatives P13 Simplify Supply Chain and Reduce Costs Value Engineering (VE) to Help Offset Cost Inflation and Improve Profitability VE Approach Identify opportunities to reduce product and packaging costs that consumer doesn’t value • Lower-cost packaging materials • Alternative/s
Slide 14: Simplify Supply Chain: Strategic Procurement
Strategic Growth Initiatives P14 Simplify Supply Chain and Reduce Costs Strategic Procurement • Should-Cost Modeling • More Extensive Competitive Bidding • Strategic Supplier Selection • Extending Payment Terms
Slide 15: Simplify Supply Chain: Transportation and Warehousing Initiatives
Strategic Growth Initiatives P15 Simplify Supply Chain and Reduce Costs 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
Slide 16: Successful Track Record of Growth through Acquisitions
Successful Track Record of Growth through Acquisitions P16 $ in Millions $1,750 11%* Compound Annual Growth Rate $1,500 2016 2003 2015 $1,000 2000 1997 $500 1989 1978 1969 1971 1980 1990 2000 2010 2022 Net sales information is presented as originally reported in Lancaster Colony's Annual Report for
Slide 17: Strengthened Organization
Strengthened Organization P17 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 18: Investing to Drive Efficiency and Support Growth
Strengthened Organization P18 Investing 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 production capac
Slide 19: Lancaster Colony's Commitment to ESG
Lancaster Colony’s Commitment to ESG P19 Building a Solid Foundation for ESG Disclosure and Performance Materiality assessment, disclosure frameworks, INVESTORS, ESG ratings & disclosure best practices CUSTOMERS, COMMUNITY & EMPLOYEES RATING FIRMS STAKEHOLDER Executing repeatable disclosure strategy
Slide 20: Developing Enterprise Sustainability & ESG Program
Lancaster Colony’s Commitment to ESG P20 Developing Enterprise Sustainability & ESG Program ► Evaluating conformance with established reporting and disclosure frameworks ► Performing gap assessments of our sustainability program elements to identify areas for improvement ► Benchmarking selected indu
Slide 21: Fiscal 2023 – First Quarter Financial Performance
Fiscal 2023 – First Quarter Financial Performance P21 $ in Millions (Except Per Share Values) FY23 Q1 Results vs. Prior Year (Three Months Ended September 30, 2022) Value $ Change % Change Consolidated Net Sales $425.5 $33.5 8.5% Gross Profit $99.1 $6.7 7.2% SG&A $49.8 ($2.1) (4.0%) Operating Income
Slide 22: Strong Balance Sheet
Strong Balance Sheet P22 $ in Millions June 30 Sep 30 2020 2021 2022 2022 Cash and Equivalents $198 $188 $60 $64 Total Debt $0 $0 $0 $0 • Debt Free • Credit Revolver of $150 Million, Expandable up to $225 Million • Investing in Capacity Expansion Projects and ERP System (Project Ascent) to Support C
Slide 23: Investing to Grow While Returning Cash to Shareholders
Investing to Grow While Returning Cash to Shareholders P23 FY22 – Major Cash Uses Cash Priorities Share Repurchases Project Ascent Regular Dividend • Invest in Existing Business Payments - FY23 capital expenditures estimated at $90 to $110 Million (including ~$50 Million to Capital Expenditures comp
Slide 24: Supplemental Financial Information
Appendix A Supplemental Financial Information
Slide 25: Results of Consolidated Operations – Most Recent Fiscal Quarter
Results of Consolidated Operations – Most Recent Fiscal Quarter A1
Slide 26: Results of Consolidated Operations – Most Recent Fiscal Year Periods
Results of Consolidated Operations – Most Recent Fiscal Year Periods A2
Slide 27: Fiscal Year Net Sales Results
Strong Growth in Retail; Foodservice Demand Impacted by COVID-19 A3 FY22 Sales Gains Driven by Pricing Actions Taken to Offset Inflation Fiscal Year Net Sales Results Fiscal Years Ended June 30 $ in Millions $2,000 $1,676 +14.3% $1,334 $1,467 $1,500 +9.9% +2.0% $761 $638 +19.3% +2.9% $620 $1,000 -4.
Slide 28: Fiscal Year Gross Profit Results
Gross Profit Impacted by Inflationary Costs, Supply Chain Disruptions A4 and Other COVID-19 Factors Fiscal Year Gross Profit Results Fiscal Years Ended June 30 $ in Millions $400 $387 $358 $356 $300 $200 $100 $- FY 2020 FY 2021 FY 2022
Slide 29: EBITDA Impacted by Inflationary Costs, Supply Chain Disruptions
EBITDA Impacted by Inflationary Costs, Supply Chain Disruptions A5 and Other COVID-19 Factors Fiscal Year Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)* Fiscal Years Ended June 30 $ $250 in Millions $226 $215 $200 $187 $150 $100 $50 $- FY 2020 FY 2021 FY 2022 ** Expenditure
Slide 30: Fiscal Year EBITDA Calculation Details
Fiscal Year EBITDA Calculation Details A6 Calculation of Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) * ($ in Millions) Fiscal Years Ending June 30, 2020 2021 2022 Income Before Income Taxes ** $177 $186 $112 Depreciation and Amortization $38 $45 $46 Change in Contingent C
Slide 31: Capital Expenditure History
Capital Expenditure History A7 $ in Millions $132 $88 $83 $71 $27 $31 $23 $16 $18 $17 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Fiscal years ended June 30.
Slide 32: Regular Cash Dividends Per Share
Regular Cash Dividends Per Share A8 $ Per Share $3.15 $2.95 $2.75 $2.55 $2.35 $2.15 $1.96 $1.82 $1.72 $1.52 2013* 2014 2015 2016* 2017 2018 2019 2020 2021 2022 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 s
Slide 33: Retail Brand Market Share and Related Information
Appendix B Retail Brand Market Share and Related Information
Slide 34: Portfolio of Strong Brands and Licensing Relationships
Portfolio of Strong Brands and Licensing Relationships (Retailer Sales and Market Share Data per IRI*) B1 Marzetti® Sister Schubert’s® New York Brand® Bakery Ref. Dressing Dips $ Sales: 147.4MM $ Sales: 283.9MM $ Sales: 113.1MM $ Sales: 135.3MM $ Share: 80.1% $ Share: 53.0% $ Share: 41.5% $ Share: 2
Slide 35: Marzetti Refrigerated Dressing Market Share
Refrigerated Dressing Market Share B2 All Others Marzetti 20.1% 23.2% Bolthouse 12.3% Litehouse 25.0% Marie’s 19.5% Total Category Sales: $487.8 MM 52 weeks ending 6/26/22, Source: IRI, Total U.S. Multi-Outlet
Slide 36: Marzetti Refrigerated Dressing Distribution
Marzetti Refrigerated Dressing Distribution B3 ACV Distribution 41 - 70% 71 - 90% Total U.S. Multi-Outlet 67.6% ACV Weighted Distribution 52 weeks ending 6/26/22, Source: IRI, Total U.S. Multi-Outlet
Slide 37: Marzetti Produce Dip Market Share
Produce Dip Market Share B4 Marzetti 80.1% Litehouse 12.0% All Others 2.7% Concord 1.4% Jimmy’s 1.2% Total Category Sales: $169.0 MM 52 weeks ending 6/26/22, Source: IRI, Total U.S. Multi-Outlet
Slide 38: Marzetti Dip Distribution
Marzetti Dip Distribution B5 ACV Distribution 21 - 80% 81 - 100% Total U.S. Multi-Outlet 82.1% ACV Weighted Distribution 52 weeks ending 6/26/22, Source: IRI, Total U.S. Multi-Outlet
Slide 39: New York Bakery Frozen Garlic Bread Market Share
Frozen Garlic Bread Market Share B6 Pepperidge Farm New York Bakery 11.3% 41.5% All Others 6.0% Private Label 32.3% Cole’s 8.8% Total Category Sales: $684.1 MM 52 weeks ending 6/26/22, Source: IRI, Total U.S. Multi-Outlet
Slide 40: New York Bakery Frozen Garlic Bread Distribution
New York Bakery Frozen Garlic Bread Distribution B7 ACV Distribution 81 - 90% 91 - 100% Total U.S. Multi-Outlet 92.2% ACV Weighted Distribution 52 weeks ending 6/26/22, Source: IRI, Total U.S. Multi-Outlet
Slide 41: Sister Schubert's Frozen Roll Market Share
Frozen Roll Market Share B8 Private Label Sister Schubert’s 3.4% 53.0% All Others 14.8% Rhodes 28.8% Total Category Sales: $278.4 MM 52 weeks ending 6/26/22, Source: IRI, Total U.S. Multi-Outlet
Slide 42: Sister Schubert's Distribution
Sister Schubert's Distribution B9 ACV Distribution 21 - 40% 41 - 70% 71 - 100% Total U.S. Multi-Outlet 81.1% ACV Weighted Distribution 52 weeks ending 6/26/22, Source: IRI, Total U.S. Multi-Outlet
Slide 43: Crouton Market Share
Crouton Market Share B10 Marzetti, Cardini’s, Mrs. Cubbison’s / Fresh Gourmet New York Bakery, 19.3% Chatham Village 34.2% All Others 7.4% Private Label 35.2% Rothbury Farms 3.9% Total Category Sales: $266.6 MM 52 weeks ending 6/26/22, Source: IRI, Total U.S. Multi-Outlet
Slide 44: New York Bakery Crouton Distribution
New York Bakery Crouton Distribution B11 ACV Distribution 71 - 100% Total U.S. Multi-Outlet 83.6% ACV Weighted Distribution 52 weeks ending 6/26/22, Source: IRI, Total U.S. Multi-Outlet
Slide 45: Lancaster Colony Corporation contact details
Lancaster Colony Corporation • 380 PolarisParkway, Suite 400 • Westerville, Ohio 43082 www.lancastercolony.com NOV 22
Lancaster Colony — Investor Presentation (November 2022) on 6ix