The J.m. Smucker Company · NYSE:SJM
The J.m. Smucker — 2018 Barclays Global Consumer Staples Conference
39 slides from The J.m. Smucker's conference presentation, Sep 4, 2018
Slide 1: The J.M. Smucker Company
The J.M. Smucker Company 2018 BARCLAYS GLOBAL CONSUMER STAPLES CONFERENCE Tuesday, September 4, 2018
Slide 2: Strategy and Business Update; Financial Update
Strategy and Business Update Mark Smucker President and Chief Executive Officer Financial Update Mark Belgya Vice Chair and Chief Financial 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: Consumer-Centric Corporate Strategy
CONSUMER-CENTRIC CORPORATE STRATEGY 4
Slide 5: Transforming Our Portfolio
Transforming Our Portfolio FY14 NET SALES FY19 PROFORMA NET SALES CANNED MILK BAKING PRODUCTS PET FOOD & COFFEE OTHER PET SNACKS COFFEE FROZEN HANDHELD PEANUT BUTTER SHORTENING OTHER & OILS PEANUT FRUIT BUTTER SPREADS FRUIT FROZEN SPREADS SHORTENING HANDHELD & OILS 5
Slide 6: Improving Our Coffee Category Position
Improving Our Coffee Category Position FY14 NET SALES FY19E NET SALES INSTANT INSTANT ONE CUP ONE CUP MAINSTREAM MAINSTREAM PREMIUM PREMIUM 6
Slide 7: Balanced Portfolio of Brands
Balanced Portfolio of Brands ICONIC, LEADING BRANDS HIGH-GROWTH, ON-TREND BRANDS #1 IN FRUIT SPREADS #1 IN NUT BUTTERS #1 IN COFFEE #1 IN PET SNACKS Source: Smucker Internal Multi-Outlet Share Report 52 weeks ended August 12, 2018. 7
Slide 8: High-Growth Brands Fueling Success
High-Growth Brands Fueling Success HIGH-GROWTH, ON-TREND BRANDS APPROXIMATELY $2B IN NET SALES EXPECTED 5-YR CAGR +HSD 8
Slide 9: Strategic Roadmap
Strategic Roadmap TOP-LINE GROWTH COST SAVINGS EPS GROWTH INNOVATION INVESTMENTS COST SAVINGS ACQUISITIONS 9
Slide 10: Progress on Our Strategic Roadmap
Progress on Our Strategic Roadmap ACQUIRED AINSWORTH CREATED CENTERS OF EXCELLENCE DIVESTED U.S. BAKING BUSINESS ENHANCED K-CUP® PARTNERSHIP LAUNCHED 1850™ & JIF® POWER UPS™ IMPLEMENTED ZERO-BASED BUDGETING INCREASED MARKETING INVESTMENT ACHIEVED $200M PET FOOD SYNERGIES EXPANDING MARKETING CAPABILI
Slide 11: Strategy for Growth
Strategy for Growth PET FOOD COFFEE SNACKS A portfolio that combines LEADING BRANDS with EMERGING, ON-TREND BRANDS to drive growth 11
Slide 12: Ainsworth Acquisition
Ainsworth Acquisition $800M +20% PROJECTED FY19 NET SALES YoY NET SALES 12
Slide 13: Rachael Ray Nutrish
Rachael Ray Nutrish ® ® $600M +30% PROJECTED FY19 NET SALES YoY NET SALES 13
Slide 14: Ainsworth Sales by Channel
Ainsworth Sales by Channel CLUB DRUG DOLLAR OTHER E-COMMERCE PET SPECIALTY GROCERY & MASS FY19E NET SALES 14
Slide 15: Rachael Ray Nutrish
Rachael Ray Nutrish ® ® Capitalizing on pet parents’ desire for an AFFORDABLE, PREMIUM option 15
Slide 16: U.S. Retail Pet Foods Segment
U.S. Retail Pet Foods Segment DOG FOOD 65% CAT FOOD DOG FOOD OF SALES ARE IN PREMIUM & SUPER-PREMIUM SEGMENTS PET SNACKS FY19E NET SALES $2.9B 16
Slide 17: U.S. Retail Pet Foods Segment
U.S. Retail Pet Foods Segment PET SNACKS CAT FOOD #1 IN CATEGORY DOG FOOD 23% MARKET SHARE PET SNACKS FY19E NET SALES $2.9B Source: Smucker Internal Multi-Outlet Share Report 52 weeks ended August 12, 2018. 17
Slide 18: U.S. Retail Pet Foods Segment
U.S. Retail Pet Foods Segment CAT FOOD CAT FOOD SIGNIFICANT GROWTH DOG FOOD OPPORTUNITY IN THE PREMIUM CAT FOOD SEGMENT PET SNACKS FY19E NET SALES $2.9B 18
Slide 19: U.S. Retail Pet Foods
U.S. Retail Pet Foods 3-4% $55M ANTICIPATED TOP-LINE GROWTH AINSWORTH ACQUISITION SYNERGIES 19
Slide 20: Strong Pet Food & Pet Snacks Business
Strong Pet Food & Pet Snacks Business 20
Slide 21: Aligning Our Portfolio for Growth
Aligning Our Portfolio for Growth PET FOOD COFFEE SNACKS Committed to allocating resources to areas critical to our GROWTH 21
Slide 22: The J.M. Smucker Company
The J.M. Smucker Company 2018 BARCLAYS GLOBAL CONSUMER STAPLES CONFERENCE Tuesday, September 4, 2018
Slide 23: Financial Update
Financial Update Mark Belgya Vice Chair and Chief Financial Officer
Slide 24: First Quarter Fiscal 2019 Results
First Quarter Fiscal 2019 Results FY19 Q1 YoY Increase ($ in millions, except per share data) Net Sales $1,903 9% Adjusted Gross Profit $700 8% Adjusted Operating Income $317 5% Adjusted EPS $1.78 18% Included $0.07/share unfavorable impact related to adjusting Ainsworth inventory to fair market val
Slide 25: Full-Year Fiscal 2019 Outlook
Full-Year Fiscal 2019 Outlook Current Previous(1) Net Sales $8.0B $8.3B Adjusted EPS $8.40 - $8.65 $8.40 - $8.65 Free Cash Flow $770M - $820M $800M - $850M Net Proceeds from Divestiture(2) $315M - Capital Expenditures $350M - $370M $350M - $370M Effective Tax Rate 24.5% 24.5% (1) Previous outlook wa
Slide 26: Fiscal 2019 Net Sales Guidance (Q2 – Q4)
Fiscal 2019 Net Sales Guidance (Q2 – Q4) STRONG PERFORMANCE FROM KEY GROWTH BRANDS ORGANIC NET SALES GROWTH OF CONTRIBUTIONS FROM NEW PRODUCTS 1% - 2% FOR THE LAST NINE IMPROVED PERFORMANCE FOR MONTHS OF FY19 JIF® AND FOLGERS® 26
Slide 27: Jif Peanut Butter
Jif Peanut Butter ® EXPECT NET SALES GROWTH IN FY19 STRONG BACK TO SCHOOL MERCHANDISING 27
Slide 28: Folgers Roast & Ground Coffee
Folgers Roast & Ground Coffee ® FY19 GREEN COFFEE FAVORABILITY COMPETITIVE PRICING & MERCHANDISIG 28
Slide 29: Baking Divestiture Impact on Fiscal 2019 Adjusted EPS
Baking Divestiture Impact on Fiscal 2019 Adjusted EPS Forgone Profit - Gain on Sale + Reduced Interest Expense + TSA Income + Impact on FY19 Adjusted EPS Neutral MAINTAINED FY19 EPS GUIDANCE OF $8.40 - $8.65 29
Slide 30: Fiscal 2019 Adjusted Gross Margin Guidance (Q2-Q4)
Fiscal 2019 Adjusted Gross Margin Guidance (Q2-Q4) SEQUENTIAL IMPROVEMENT IN AINSWORTH PROFITABILITY ADJUSTED GROSS MARGIN TO AVERAGE BENEFIT OF FAVORABLE MIX 39% FOR THE LAST NINE GREEN COFFEE FAVORABILITY MONTHS OF FY19 30
Slide 31: Baking Divestiture Impact on Fiscal 2020 Adjusted EPS
Baking Divestiture Impact on Fiscal 2020 Adjusted EPS OPPORTUNITIES TO NET IMPACT ON REDUCE IMPACT ADJUSTED EPS •SHARE REPURCHASES $0.20 •COST SAVINGS •INNOVATION 31
Slide 32: The J.M. Smucker Company
The J.M. Smucker Company 2018 BARCLAYS GLOBAL CONSUMER STAPLES CONFERENCE Tuesday, September 4, 2018
Slide 33: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements, such as projected net sales, operating results, earnings, and cash flows that are subject to risks and uncertainties that could cause actual results to differ materially from future results expressed or implied by thos
Slide 34: Non-GAAP Financial Measures
Non-GAAP Financial Measures The Company uses non-GAAP financial measures, including: net sales excluding acquisition and foreign currency exchange; adjusted gross profit, operating income, income, and earnings per share; earnings before interest, taxes, depreciation, amortization, and impairment cha
Slide 35: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ in millions) Three Months Ended July 31, 2018 2017 Gross profit reconciliation: Gross profit $ 678.2 $ 662.1 Unallocated derivative losses (gains) 22.0 (12.6) Cost of products sold – special project costs - 0.7 Adjusted gross profit $ 700.2 $ 650.2 Operating income reconci
Slide 36: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ and shares in millions, except per share data) Three Months Ended July 31, 2018 2017 Net income reconciliation: Net income $ 133.0 $ 126.8 Income tax expense (benefit) 40.1 62.2 Amortization 60.5 51.5 Unallocated derivative losses (gains) 22.0 (12.6) Cost of products sold
Slide 37: Non-GAAP Reconciliation
Non-GAAP Reconciliation Company Guidance Year Ending April 30, 2019 ($ in millions, except per share data) Low High Net income per common share – assuming dilution reconciliation: Net income per common share – assuming dilution $ 6.34 $ 6.59 Special project costs 0.40 0.40 Amortization 1.66 1.66 Adj
Slide 38: Additional Information
Additional Information The Company is the owner of all trademarks and logos referenced herein, except for the following, which are used under license: Dunkin' Donuts® is a registered trademark of DD IP Holder LLC, and Rachael Ray® is a registered trademark of Ray Marks Co. LLC. The following tradema
Slide 39: The J.M. Smucker Company
The J.M. Smucker Company 2018 BARCLAYS GLOBAL CONSUMER STAPLES CONFERENCE Tuesday, September 4, 2018
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