Hormel Foods Corporation · NYSE:HRL
Hormel Foods — 2017 Consumer Analyst Group of Europe (CAGE) Conference
40 slides from Hormel Foods's conference presentation, Mar 21, 2017
Slide 1: Hormel Foods: A Long-Term Growth Story
Hormel Foods A Long-Term Growth Story Jim Snee President and Chief Executive Officer 1
Slide 2: Legal Disclosure
Legal Disclosure This presentation contains forward-looking information based on management’s current views and assumptions. Actual events may differ materially. Please refer to the cautionary statement regarding Forward-Looking Statements and Risk Factors on pages 30-37 in the Company’s Form 10-Q f
Slide 3: Why Hormel Foods?
Why Hormel Foods? • TRACK RECORD OF SUCCESS • Positioned To Compete • A Clear Strategy For Long-Term Growth 3
Slide 4: Track Record of Success
We are TRACK RECORD OF SUCCESS Hormel Foods * *Includes 2017 declared increase 4
Slide 5: Track Record of Success: Business Segments
TRACK RECORD OF SUCCESS Refrigerated Jennie-O Grocery Specialty International Foods Turkey Store Products Foods & Other 5
Slide 6: Refrigerated Foods
Refrigerated Foods Fiscal 2016 Data 6
Slide 7: Jennie-O Turkey Store
Jennie-O Turkey Store Fiscal 2016 Data 7
Slide 8: Grocery Products
Grocery Products Fiscal 2016 Data 8
Slide 9: Specialty Foods
Specialty Foods Fiscal 2016 Data 9
Slide 10: International & Other
International & Other Fiscal 2016 Data 10
Slide 11: Grown Earnings
We have TRACK RECORD OF SUCCESS Grown Earnings 28 Out of 31 Years $2.00 $1.50 $1.00 $0.50 $0.00 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 11
Slide 12: Achieving Our Long-Term Growth Goals
Achieving Our TRACK RECORD OF SUCCESS Long-Term Growth Goals Net Sales Diluted EPS +5% +12% $9.5 BILLION $1.64 $5.7 BILLION $0.51 2006 2016 2006 2016 12
Slide 13: Driving Shareholder Value
Driving TRACK RECORD OF SUCCESS Shareholder Value INVESTING $3.9B Cash from Operations RETURNING IN THE CASH TO BUSINESS 2012 - 2016 SHAREHOLDERS CAPEX ACQUISITIONS DIVIDENDS BUYBACKS $0.8B $985 $2,362 $2.2B $0.3B $1.1B 13
Slide 14: Consistently High ROIC
Consistently TRACK RECORD OF SUCCESS 40.0 High ROIC 40% 35.0 35% 30.0 30% 25.0 25% 20.0 20% 15.0 15% 10.0 10% 5.0 5% - 0% (5.0) (5%) (10.0) (10%) Factset data based on fiscal 2012-2016 data for Hormel Foods and time relative data for peers listed in Company 2016 proxy statement. 14
Slide 15: Why Hormel Foods?
Why Hormel Foods? • Track Record of Success • POSITIONED TO COMPETE • A Clear Strategy For Long-Term Growth 15
Slide 16: Strong, Branded Presence Across the Food Space
Strong, Branded Presence POSITIONED TO COMPETE Across the Food Space Other 3% International 5% Retail 65% Foodservice 27% Net Sales Fiscal 2016 Data 16
Slide 17: Positioned to Compete
POSITIONED TO COMPETE *IRI Total U.S. MULO 52 weeks ended 2/12/2017 17
Slide 18: Exceeding Industry Growth in the Foodservice Channel
POSITIONED TO COMPETE Exceeding Industry Growth in the Foodservice Channel Segments Products Restaurants Convenience Hotels College & University Healthcare K-12 Schools * Technomic Inc. and Internal Data 18
Slide 19: Three Go-To-Market Strategies For International Growth
Three Go-To-Market Strategies POSITIONED TO COMPETE For International Growth 19
Slide 20: Industry-Leading Expertise
Industry-Leading POSITIONED TO COMPETE Expertise Value-Added Shelf Stable Direct Managing Protein Products Sales Force Iconic Brands 20
Slide 21: Deep Connections to Customers, Consumers, and Operators
Deep Connections to POSITIONED TO COMPETE Customers, Consumers, and Operators Insights Direct Sales Force Cultural Anthropologist Customer, Consumer, or Operator Consumer Insights Team Innovation Need Originate. Don’t Imitate. -George A. Hormel Chefs 21
Slide 22: Annemarie Vaupel, Foodservice Innovation Manager
Annemarie Vaupel, Foodservice Innovation Manager, Refrigerated Foods 22
Slide 23: Unique Ownership Fosters a Long-Term Outlook
Unique POSITIONED TO COMPETE Ownership Fosters a Long-Term Outlook * *Includes 2017 declared increase 23
Slide 24: Experienced Senior Management Team
Experienced POSITIONED TO COMPETE Senior Management Team Senior YEARS Management Team Average 24 TENTURE 24
Slide 25: Why Hormel Foods?
Why Hormel Foods? • Track Record of Success • Positioned To Compete • A CLEAR STRATEGY FOR LONG-TERM GROWTH 25
Slide 26: Our Formula for Success
Our Formula A CLEAR STRATEGY FOR LONG-TERM GROWTH for Success Building Innovation Acquisitions Balanced Brands Portfolio + + + 26
Slide 27: Laser Focused on Four Strategic Growth Areas
A CLEAR STRATEGY FOR LONG-TERM GROWTH Laser Focused on Four Strategic Growth Areas Healthy/ On-the-go Global Multicultural Holistic 27
Slide 28: Growth through Brand Building
A CLEAR STRATEGY FOR LONG-TERM GROWTH Growth through Brand Building Protein Mexican Ground Beverages, Bars, Nut Meat Sauces, Salsas Natural and Turkey and Powder Butters Snacks and Dips Organic Meats *IRI consulting analysis ending 11/20/16 28
Slide 29: We Continue to Invest in Our Brands
A CLEAR STRATEGY FOR LONG-TERM GROWTH We Continue to Invest in Our Brands +40% +27% +27% $145 $204 $90 $114 MILLION MILLION MILLION MILLION 2013 2014 2015 2016 *Internal data – advertising investment BRAND 29
Slide 30: Supporting Our Brands
A CLEAR STRATEGY FOR LONG-TERM GROWTH Supporting Our Brands
Slide 31: Growth through Innovation
A CLEAR STRATEGY FOR LONG-TERM GROWTH Growth through Innovation 12.6% of total net sales 2016 *Internal data 31
Slide 32: Growth through Strategic Acquisitions
A CLEAR STRATEGY FOR LONG-TERM GROWTH Growth through Strategic Acquisitions • #1 or #2 brands • Accretive • Bring more than cash • Support existing businesses 32
Slide 33: Our Balanced Model In Action
A CLEAR STRATEGY FOR LONG-TERM GROWTH Our Balanced Model In Action Protein Packaged Foods Nuts, Avocados, Pork and Turkey Tomatoes Retail Foodservice Financially Innovative Conservative Culture Refrigerated Jennie-O Turkey International Grocery Products Foods Store Specialty Foods & Other 33
Slide 34: Bridging to our 2020 Sales Goal
Bridging to our A CLEAR STRATEGY FOR LONG-TERM GROWTH 2020 Sales Goal 5% Organic Sales $11.6B Acquisitions Innovation Divestitures $9.5B 2016 2020 *Internal data Actual Goal 34
Slide 35: Margin Expansion Will Come in Many Ways
Margin Expansion A CLEAR STRATEGY FOR LONG-TERM GROWTH Will Come in Many Ways Continuous Top Improvement Quartile Improved of Our Mix Peer Innovation Group Acquisitions 13.9% *Internal data 2016 2020 35
Slide 36: Enhancing Our Product Mix
Enhancing A CLEAR STRATEGY FOR LONG-TERM GROWTH Our Product Mix Value-Added Sales Growth Consistently Adding Value to Our Products Refrigerated Foods Approximately 80% Approximately 70% 2012 2016 *Internal data – Excludes Farmer John related sales 36
Slide 37: A Culture of Continuous Improvement
A Culture of A CLEAR STRATEGY FOR LONG-TERM GROWTH Continuous Improvement Yield Cost Improvement Management Raw Material Capacity Utilization Optimization 37
Slide 38: A Long-Term Growth Story
Hormel Foods A Long-Term Growth Story • Track Record Of Success • Positioned To Compete • A Clear Strategy For Long-Term Growth 38
Slide 39: Driving Shareholder Returns
Driving Shareholder Returns $600 Hormel Foods $500 $459 $400 S&P 500 Pkg Food & Meats $300 $298 $200 S&P 500 $100 $197 $0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 $100 invested on 1/31/07 in stock or index – including reinvestment of dividends 39
Slide 40: Hormel Foods: A Long-Term Growth Story
Hormel Foods A Long-Term Growth Story Jim Snee President and Chief Executive Officer 40
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