Conagra Brands, Inc. · NYSE:CAG
Conagra Brands — Investor Day (February 2021)
67 slides from Conagra Brands's investor day presentation, Feb 16, 2021
Slide 1: Conagra Brands
Re tarFex. CONAGRA “BRANDS -s GAGNY 20 2 4
Slide 2: Legal Disclosure Note on Forward-Looking Statements
Legal Disclosure Note on Forward-Looking Statements This document contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Reader
Slide 3: What We Want You to Take Away from Today
What We Want You to Take Away from Today We compete in attractive categories with consumer-preferred brands We deploy our assets via modern, repeatable, and scalable processes that work We are well-positioned for long-term success and significant value creation We are reaffirming our fiscal 2022 fin
Slide 4: Agenda
WHO WE ARE 1. HOW WE WIN 2. COVID-19’s IMPACT ON THE FUTURE 3. Agenda
Slide 5: Agenda: Who We Are
WHO WE ARE 1. HOW WE WIN 2. COVID-19’s IMPACT ON THE FUTURE 3. Agenda
Slide 6: Conagra Brands Is a Highly Focused Portfolio
Conagra Brands Is a Highly Focused Portfolio Source: Conagra Internal Data, Data for most recent 4 quarters ended Q2 fiscal 2021 Note: International net sales include sales by domestic segments to customers located outside the Untied States Net Sales, Last 4 Quarters Domestic vs. International Net S
Slide 7: We Compete in Three Domains with Leading Brands
Frozen Snacks Staples 45% 19% 36% Source: IRI Custom Database, MULO+C, Latest 52 Weeks Ended December 27, 2020 % of Retail Dollar Sales Growth Cash We Compete in Three Domains with Leading Brands
Slide 8: We Are the Largest Player in Frozen Food
We Are the Largest Player in Frozen Food Source: IRI Market Advantage Syndicated Data, MULO+C, 52 Weeks Ended December 27, 2020, Product: Frozen sorted by Parent Company Total US Frozen Dollar Sales (Latest 52 Weeks, $ in millions) Branded Frozen L52W: $55.2B
Slide 9: We Know How to Drive Growth in Frozen
(1.9)% +5.0% +1.5% +7.0% +13.0% Frozen Renaissance Began Conagra Frozen Retail Sales % Change vs. YA Source: IRI Syndicated POS, Total US MULO+C, Conagra Fiscal Years, Latest 52 Weeks Ended December 27, 2020 $1 Billion in Growth We Know How to Drive Growth in Frozen
Slide 10: We Have a Strong ~$2 Billion Snacks Business
We Have a Strong ~$2 Billion Snacks Business Strong Portfolio of Leading Snack Brands Industry-Leading Growth Continued Share Gains #1 or #2 Share in 79% of Our Categories 79% of Snack portfolio gaining share fastest growing Snack company1 #2 Higher growth than Snacks 3.3x Source (Left, Middle): IRI
Slide 11: We Know How to Drive Growth in Snacks
Stood Up a Snacking Company Conagra Snacks Retail Sales (% Change vs. YA) Source: IRI Syndicated POS, Total US MULO+C, Fiscal Years, Latest 52 Weeks Ended December 27, 2020. Snacking Universe consists of Snacks, Candy, Cookies & Crackers Aisles & Bakery Snacks, Pasty/Doughnuts, Pudding/Gelatin, Refr
Slide 12: Staples Portfolio Is a Reliable Contributor
Conagra Staples Retail Sales (Latest 52 Weeks, Share of Staples Portfolio) Source (Left): IRI Custom POS, Total US MULO+C, Latest 52 Weeks Ended December 27, 2020, Conagra Brands Source (Right): IRI Custom Database, Total US MULO + C, Conagra Fiscal Years, Building FY21 (30 Weeks Ended December 27,
Slide 13: Culture Focused on Both Performance and Purpose
Culture Focused on Both Performance and Purpose People Planet Communities Over 10 years of employee-led Sustainable Development Awards Goal to have 100% of plastic packaging being renewable, recyclable, or compostable by 2025 Long track record of supporting employee and supplier diversity Expect to
Slide 14: Agenda: How We Win
WHO WE ARE 1. HOW WE WIN 2. COVID-19’s IMPACT ON THE FUTURE 3. Agenda
Slide 15: We Create Connections Between Our Consumers and Our Brands
We Create Connections Between Our Consumers and Our Brands
Slide 16: We Deploy Marketing Investments Via a Modern Brand Building Approach
Perpetual Modernization Brick & Mortar eCommerce Saliency Relevancy We Deploy Marketing Investments Via a Modern Brand Building Approach Superior Products Physical Availability Mental Availability 1 2 3
Slide 17: We Begin with Identifying Growth Pockets Within Consumer Behavior Data
We Begin with Identifying Growth Pockets Within Consumer Behavior Data MODERN SIDES & PREP METHODS ELEVATED CULINARY EXPERIENCES MODERN HEALTH PLANT-BASED PROTEIN PROVOCATIVE FORMS & FLAVORS SUSTAINABILITY
Slide 18: We Build Products Viewed As More Modern Than Peers'
We Build Products That Are Viewed As More Modern Than Peers’ Products Frozen Single-Serve Meals (% Implicit Association of “Modern” Fit) Better-for-You Meal Brands Peer 1 Peer 2 Peer 3 Indulgent Meal Brands Peer 1 Peer 2 Source: MARU Custom Study November 30 – December 4, 2020, Implicit Association
Slide 19: Next, We Invest in Omni-Channel Availability
Next, We Invest in Omni-Channel Availability Conagra Channel Dollar Sales (FY2020 2-Year CAGR) Source: IRI Custom Database, Total Edible x Bev, Parent Company = Conagra Brands, Conagra Fiscal 2020 2-Year CAGR, Logos represent a few retailers included in the total channel Dollar data is Nielsen, tota
Slide 20: Our ~$1 Billion eCommerce Business Has Outpaced the Industry
Our ~$1 Billion eCommerce Business Has Outpaced the Industry and Gained Share in Our Categories % of Conagra’s Sales Growing Share in eCommerce (Latest 52 Weeks) Note: only ~84% of Conagra eCommerce brand sales measured; Latest weeks subject to change due to data stability Source (Left): Source: IRI
Slide 21: We Drive Mental Availability By Reaching Consumers Efficiently
Then, We Drive Mental Availability By Reaching Consumers in an Efficient Way By 2024, cord-cutter households to reach 46.6 million, more than one-third of all U.S. households The Right People In The Right Place At The Right Time With The Right Message Source (Left): Tech Crunch “Pandemic Accelerated
Slide 22: Closer-to-Purchase Media Drives Higher Lifts
Closer-to-Purchase Media Drives Higher Lifts Return on advertising spend (ROAS) per dollar invested in the U.S. in 2018 by medium (in US dollars) 2X Lift on Paid Search vs. Other Media Source: Various Sources (Benchmarking) OAAA Statista 2020; Additional Information: United States Various Sources (B
Slide 23: We Have Continuously Optimized Our Brand Building Investments
We Have Continuously Optimized Our Brand Building Investments Total Brand Building Investments Consistent Over Time (Total Brand Building Investments as % of Gross Sales) Source: Conagra Reported Financials, Conagra Internal Data Note: Total Marketing Investments include working trade, slotting, cou
Slide 24: Our Model Has Been Successful in Aggregate
Our Model Has Been Successful in Aggregate Source: IRI Custom Database, MULO+C, Conagra Fiscal Years, Building fiscal 2021 (30 Weeks Ended December 27, 2020), Weighted Dollar Share Total Conagra Weighted Dollar Share Conagra Domain Weighted Share (Point Change FY21 YTD vs. FY17) Frozen +2.2 pts Snac
Slide 25: Our Model Has Worked While Investing More Efficiently
Our Model Has Worked While Investing More Efficiently than the Competition Measured Media Spend (Latest 52 Weeks) Note: Competitor A represented is consistent across all data points. Numerator does not account for Search, Social and eCommerce Source (Left): Conagra Marie Callender’s Internal Data; C
Slide 26: Agenda: COVID-19's Impact on the Future
WHO WE ARE 1. HOW WE WIN 2. COVID-19’s IMPACT ON THE FUTURE 3. Agenda
Slide 27: The Pandemic Drove a Broad-Based Acceleration of Our Performance
The Pandemic Drove a Broad-Based Acceleration of Our Strong Performance Conagra Retail Sales (Total COVID-19 Time Period, % Change vs. YA) Total Conagra +0.4pts of category share vs. YA Source (Growth Rates): IRI Custom Database, Total US MULO+C, Total COVID-19 (Weeks Ended March 1, 2020-December 27
Slide 28: COVID Accelerated New Buyer Acquisition; Winning with Younger Consumers
COVID Significantly Accelerated New Buyer Acquisition; We Are Winning with Younger Consumers Source (Left): IRI National Consumer Panel, Total US All Outlets, Fiscal 2018, Fiscal 2019, 44 Weeks Ended December 27, 2020 Source (Right): IRI National Consumer Panel, Custom Conagra Categories, Gen Z & Mi
Slide 29: These New, Younger Buyers Are Stickier
These New, Younger Buyers Are “Stickier” Repeat Rate (% of Buyers Repeating) Source: IRI National Consumer Panel, Custom Conagra Categories, total US All Outlets, 44 Weeks Ended December 27, 2020, New Brand Buyers = purchased in 44 Weeks Ended Dec 27, 2020 and not in prior 52 Weeks Ended February 23
Slide 30: Behavioral Trends That COVID-19 Accelerated
We Will Capitalize On The Behavioral Trends That COVID-19 Accelerated Cooking, Eating Together Enjoying The Convenience of Frozen Home Entertainment, Snacking
Slide 31: New Cooking and Eating Habits Have Been Created
New Cooking and Eating Habits Have Been Created Source: The NPD Group / National Eating Trends; Sourced from Home/Retail, September-November 2020 vs. 2019, Quarterly Occasions per Capita +28% Families Continue Eating Together (Shared Meal Occasions) Cooking Remains Elevated (Meal Occasions with Prep
Slide 32: Remote Work Leads to Higher Engagement in Cooking at Home
Remote Work Leads to Higher Engagement in Cooking and Eating at Home If COVID-19 was not a concern, how often do you think an employee should be in the office, if at all, in order to maintain a distinctive culture for the company? Remote Workforce Adoption Expected to be Permanent Work-from-Home Ind
Slide 33: Our Portfolio Uniquely Meets These Consumer Needs
Our Portfolio Uniquely Meets These Consumer Needs Hyper-Convenient Frozen Meals & Sides Bold, Anytime Snacks & Sweet Treats Simple Cooking Aids & Meal Enhancers Source: TAKIS and FUEGO are registered trademarks owned by GRUPO BIMBO, S.A.B. DE C.V. used with permission.
Slide 34: Consumers Have Accelerated Their Consumption of Frozen Foods
Consumers Have Accelerated Their Consumption of Frozen Foods during the Pandemic Source: The NPD Group / National Eating Trends; Sourced from Home/Retail, March-November 2020 vs. 2019, Gen Z aged 18+ Gen Z and Millennials Driving Outsized Frozen Food Growth +14% Consumers Are Eating More Frozen Food
Slide 35: Frozen Expected to Accelerate As Millennials Enter High Consumption Years
Frozen Expected to Accelerate As Millennials Enter High Consumption, Family Formation Years Source (Left Chart): IRI Household Panel, Total US All Outlets, Latest 52 Weeks Ended December 27, 2020, Custom Hierarchy Total Frozen, Bars represent Annual Dollars per Buyer and Percent represents change vs
Slide 36: We Are Winning in Frozen and Well-Positioned
We Are Winning in Frozen and Well-Positioned Category All Other Competitors Frozen Single-Serve Meals Retail Sales Growth (Dollar Sales Change FY17-FY20) Source (Left): IRI Market Advantage, Conagra Custom Database, MULO+C, Frozen Single Serve Meals Category, Conagra FY17-FY20 Source (Right) : IRI C
Slide 37: Significant, Lasting Shift to At-Home Entertainment
Significant, Lasting Shift to At-Home Entertainment Time spent viewing digital video grew +42%; 76% of online video watchers plan to consume as much content post-pandemic1 70% would rather watch new movies at home3; home theatres projected +9% through 20254 Studios release movies direct-to-home; ves
Slide 38: These Changes Are Propelling At-Home Snacking
These Changes Are Propelling At-Home Snacking Snacking during leisure activities +8% during COVID-19 Source (Left): The NPD Group / National Eating Trends; Sourced from Home/Retail, September-November 2019 vs. 2020 Source (Right): The NPD Group / Snack Track; Snack Foods excl Cough Drops, Data for A
Slide 39: Our Snacks Businesses Have Outperformed
Our Snacks Businesses Have Outperformed and Are Well-Positioned Source: Conagra Custom Database, Total COVID Time Period = weeks ended March 1, 2020 to December 27, 2020, Total US MULO + C, Logos are just a representation of brands included in total Conagra categories Total Retail Dollar Sales (Tota
Slide 40: What's Coming Next: FY22 Innovation
WHAT’S COMING NEXT FY22 INNOVATION
Slide 41: Tapping into New Benefit Areas
TAPPING INTO NEW BENEFIT AREAS HEALTHY CHOICE MAX HIGH PROTEIN | 40% LARGER THAN POWER BOWLS 33-34G PROTEIN PER BOWL Note: Packaging under development; subject to change
Slide 42: Unlocking New Occasions
UNLOCKING NEW OCCASIONS MEGA PIZZA FAMOUS FOOD FORMS | MEGA PROTEIN | DOUBLE STUFFED Note: Packaging under development; subject to change
Slide 43: Meat Replacement Platform
MEAT REPLACEMENT PLATFORM REIMAGINING PLANT-BASED PLANT-BASED | QSR FAVORITES NEW QSR INSPIRED FORMS MODERNIZED MEATLESS Note: Packaging under development; subject to change
Slide 44: Expanding Low Sugar Lifestyle
EXPANDING LOW SUGAR LIFESTYLE KETO FRIENDLY CONVENIENCE MEALS | TREATS | SWEETS Note: Packaging under development; subject to change
Slide 45: Contemporary Comfort
CONTEMPORARY COMFORT POT PIE WITH CRUST MADE WITH CAULIFLOWER REINVENTED CLASSICS | MODERN WELLNESS Note: Packaging under development; subject to change
Slide 46: Restaurant Flavors at Home
RESTAURANT FLAVORS AT HOME P.F. CHANG’S HOME MENU COMPLETE MEAL OPTIONS Note: Packaging under development; subject to change; P.F. Chang’s and P.F. Chang’s Home Menu are registered trademarks of P.F. Chang’s China Bistro, Inc., used under license CENTER PLATE PROTEINS RESTAURANT INSPIRED DRESSINGS
Slide 47: Value-Added Solutions
VALUE-ADDED SOLUTIONS MODERN MEAL HELPERS ONE-STEP CONVENIENCE | CONTEMPORARY CLASSICS Note: Packaging under development; subject to change TRENDING RECIPES REIMAGINED FAMILY FAVORITES
Slide 48: Modern Vegetable Sides
MODERN VEGEGETABLE SIDES SIMPLE SOLUTIONS NEW PREP METHODS | MODERN WELLNESS Note: Packaging under development; subject to change NEW PREP METHODS CONTEMPORARY VEGETABLES
Slide 49: Expanding Consumption
Note: SONIC and the Double-Delta logo are registered trademarks of America’s Drive-In Brand Properties LLC used under license. Packaging under development; subject to change EXPANDING CONSUMPTION PROVOCATIVE FLAVORS, NEW SIZES BIG | BOLD | SNACKABLE
Slide 50: Bold Experiences
BOLD EXPERIENCES SALTY SNACKING FUN | FLAVORFUL | AT-HOME ENTERTAINMENT Note: Packaging under development; subject to change AT-HOME SOLUTIONS EXPERIENTIAL & SEASONAL
Slide 51: Sweet Treats
SWEET TREATS EPIC EXPERIENCES POPULAR | ICONIC | SWEET ACTIVITIES Note: Packaging under development; subject to change.
Slide 52: Favorites in New Formats
FAVORITES IN NEW FORMATS CONVENIENT PACKS HEAT & EAT | SNACKIFIED Note: Packaging under development; subject to change
Slide 53: Sustainability Evolution
SUSTAINABILITY EVOLUTION RESPONSIBLE CITIZENSHIP RECYCLABLE PLASTIC | PLANT-BASED FIBER BOWLS HEALTHY CHOICE PLANT-BASED FIBER BOWLS SWISS MISS RECYCLABLE PLASTIC CUBES EXPANDING IN FY22 Note: Packaging under development; subject to change
Slide 54: Dave Marberger, EVP and Chief Financial Officer
DAVE MARBERGER EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
Slide 55: First Half Performance Summary
First Half Performance Summary Note: “Adjusted” financial measures and organic net sales are non-GAAP. See the end of this presentation for a reconciliation of these measures to the most directly comparable GAAP measures. Organic net sales excludes the impact of foreign exchange and divested busines
Slide 56: Pinnacle Foods Acquisition Delivering Across All Commitments
Pinnacle Foods Acquisition Delivering Across All Commitments Employees Transitioned to Chicago & Omaha Closed Pinnacle Corporate Facilities Processes Completed SAP Conversion On-Track with Plant SAP Conversions Executing Value over Volume Strategy Rebuilt Innovation Pipeline Synergy Realization On-T
Slide 57: Reiterating Q3 Guidance
Reiterating Q3 Guidance Metric2 Fiscal 2021 Q3 Guidance1, 5 Organic Net Sales3 Growth +6% to +8% Adj. Operating Margin4 16.0% to 16.5% Adj. Diluted EPS from cont. ops. $0.56 to $0.60 The inability to predict the amount and timing of the impacts of future items makes a detailed reconciliation of thes
Slide 58: Multiple Levers to Manage Inflation and Drive Margin Improvement
We Have Multiple Levers to Manage Inflation and Drive Margin Improvement Cost Savings Realized Productivity COVID-19 Costs Synergies Pricing List Pricing Trade Optimization Mix Brand Mix Segment Mix Product Mix Margin Accretive Innovation Channel Mix Other Fixed Cost Leverage Acquisitions & Divestit
Slide 59: Adjusting FY22 Targets For Peter Pan Divestiture
Adjusting FY22 Targets For Peter Pan Divestiture The inability to predict the amount and timing of the impacts of future items makes a detailed reconciliation of these forward-looking financial measures impracticable. “Adjusted” financial measures, free cash flow, and organic net sales are non-GAAP
Slide 60: Track Record of Balanced Capital Allocation
Track Record of Balanced Capital Allocation Focused on Driving Value ~$2B of share repurchases across fiscal ‘17 & ‘18 Recently approved +29% increase Dividend Share Repurchases Paid down ~$2.3B of debt since acquiring Pinnacle Maintained solid investment grade credit rating Debt Sculpted the portfo
Slide 61: What We Want You to Take Away from Today
What We Want You to Take Away from Today We compete in attractive categories with consumer-preferred brands We deploy our assets via modern, repeatable, and scalable processes that work We are well-positioned for long-term success and significant value creation We are reaffirming our fiscal 2022 fin
Slide 62: Appendix
APPENDIX
Slide 63: Reconciliation of Non-GAAP Financial Measures: Net Sales
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures (in millions)Q2 FY21 YTD Grocery & Snacks Refrigerated& Frozen International Foodservice Total Conagra Brands Net Sales $2,419.5 $2,378.6 $468.8 $407.2 $5,674.1 Impact of foreign exchange — — 18.1 — 18.1 Net sales from dive
Slide 64: Reconciliation of Non-GAAP Financial Measures: Operating Profit
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures (in millions)Q2 FY21 YTD Grocery & Snacks Refrigerated & Frozen International Foodservice Corporate Expense Total Conagra Brands Operating Profit $600.0 $504.4 $78.0 $47.2 $(188.5) $1,041.1 Restructuring plans 21.7 12.9 (0.
Slide 65: Reconciliation of Non-GAAP Financial Measures (Q2 FY21 YTD)
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures (in millions) Operating profit is derived from taking Income from continuing operations before income taxes and equity method investment earnings, adding back Interest expense, net and removing Pension and postretirement no
Slide 66: Reconciliation of Non-GAAP Financial Measures (Q2 FY20 YTD)
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures (in millions) Operating profit is derived from taking Income from continuing operations before income taxes and equity method investment earnings, adding back Interest expense, net and removing Pension and postretirement no
Slide 67: Conagra Brands
Re tarFex. CONAGRA “BRANDS -s