The Campbell's Company · NASDAQ:CPB
The Campbell's — Campbell Soup Company — Q1 2025 Earnings Presentation
53 slides from The Campbell's's earnings presentation, Dec 4, 2024
Slide 1: Q1 Fiscal 2025 Earnings Presentation
Q1 Fiscal 2025 Earnings Presentation
Slide 2: Agenda
Rebecca Gardy Chief Investor Relations Officer Welcome Today’s Mark Clouse Strategy and Agenda Chief Executive Officer Business Update Carrie Anderson Financial Results Chief Financial Officer and Outlook 2
Slide 3: Forward-looking Statements
Forward-looking Statements Safe Harbor Regarding Forward-Looking Statements This presentation contains "forward-looking" statements within the meaning of the federal securities laws. These forward-looking statements reflect our current expectations regarding our future results of operations, economi
Slide 4: Strategy and Business Updates
Strategy and Business Updates Mark Clouse Chief Executive Officer 4
Slide 5: Q1 Performance In Line With Expectations, With Sovos Brands Driving Growth
Q1 FY25 Key Messages Q1 Performance In Line With Expectations, With Sovos Brands Driving Growth +10% Net Sales Growth vs PY Q1 performance generally in line with our expectations (1)% Organic Net Sales* vs PY Highly relevant Leadership brands with growth in consumption and $ share; up +2% in-market
Slide 6: Campbell's momentum accelerated with the addition of Sovos Brands
Campbell's momentum accelerated with the addition of Sovos Brands Q1 FY25 Q1 FY25 Pro Forma Combined1 Organic Net +0% Sales* Net Sales (1)% vs. PY vs. PY Volume/Mix Flat +1% vs. PY vs. PY *See Non-GAAP reconciliation 1 Pro forma combined basis presented to reflect results as if the Sovos Brands acqu
Slide 7: Food overall showing improvement with favorable trends
Food overall showing improvement with favorable trends Full recovery expected into remainder of FY25 Top 50 Stabilizing food volume Improving Consumer Top Edible 50 Edible Categories2 Stabilizing food volume as as prices normalize3 Confidence1 Categories2 prices normalize3 50% +11% vs.PY; up sequent
Slide 8: Leadership Brands outpacing respective categories
Leadership Brands outpacing respective categories Q1 FY vs. PY Meals & Beverages2 Total +4% $ consumption Leadership Brands2 vs. PY1 +0.7 pts $ share vs. PY1 +2 % $ Consumption vs. PY1 Snacks +0.2 pts $ Share vs. PY1 (1)% $ consumption vs. PY1 Flat $ share vs. PY1 1 Circana Total US MULO+, 13 weeks
Slide 9: Meals & Beverages: Key highlights
Meals & Beverages Meals & Beverages: Key highlights Organic net sales impacted by movements in inventory influenced by later timing of Thanksgiving holiday Meals & Pro forma Beverages2 combined3 Q1 FY25 vs. PY Q1 FY25 vs. PY Organic net sales* +0% +2% Volume/mix +1% +3% Dollar consumption1 +2% +5% *
Slide 10: Campbell's outpacing or in line with category growth in all soup categories
Meals & Beverages Campbell’s outpacing or in line with category growth in all soup categories $ Consumption Q1 FY25 vs. PY Wet Soup Broth Condensed RTS Category 1% +5% (2)% (0.2)% Campbell’s +1% +8% (2)% +0.2% 3rd consecutive quarter Swanson benefiting from 4th consecutive quarter of Strong performa
Slide 11: $1B Sauces Portfolio building momentum
Meals & Beverages $1B Sauces Portfolio building momentum Continued strength on Rao’s and steady Prego performance Campbell’s Italian Sauce Consumption vs. PY1 Category $ Consumption $ Consumption Consumption1 +11% +8% vs Q1 FY241 vs Q1 FY241 Dollars Volume +15% +5% +6% Dollars Share change vs. PY1 $
Slide 12: Rao's sauce growth continues: Strong runway still ahead
Meals & Beverages Rao’s sauce growth continues: Strong runway still ahead Momentum Continues + Runway Ahead +210 bps ~50% Q1 FY25 HHP vs. PY1 HHP vs. Prego1 Outpacing YoY dollar category growth by +9 bps +19 bps 60% Avg. # items vs. Prego4 Q1 FY252 FY242 Growing with millennials +15% 2.3X +30 pt gap
Slide 13: Sourcing volume from competition beyond the shelf
Sourcing volume from competition beyond the shelf Restaurant Take-out ~$80 $31.50 VS $3 $5 $8 $12 $3.50 incl. salad, breadsticks, and meatballs 13
Slide 14: Snacks: Key highlights
Snacks Snacks: Key highlights Organic Net sales impacted by 1pt headwind from Partner Brands and competitive pressure in select categories Snacks Q1 FY25 vs. PY Organic net sales* (2)% Volume/mix (1)% Dollar consumption1 (1)% *See Non-GAAP reconciliation. 1 Circana Total US MULO+, 13 weeks ending 10
Slide 15: Shares mixed in Q1, pressure focused in Salty/Cookies
Snacks Shares mixed in Q1, pressure focused in Salty/Cookies Crackers Fresh Bakery Deli Salty Cookies Strong Q2 action plans expected to improve share performance, building momentum into 2H Strong holiday activation plans on Pepperidge Farm Cookies and Snyder's of Hanover Elevated innovation includi
Slide 16: Robust Salty Snacks Innovation
Snacks Robust Salty Snacks Innovation 16
Slide 17: Holidays are made for Campbell's Snacks
Snacks Holidays are made for Campbell’s Snacks 17
Slide 18: Wrap up
Solid start to the fiscal 25; Consumer and category dynamics continue to show positive progress, key holiday window next important milestone Q1 Stepped up support in Q2 to match competitive environment, remaining disciplined and agile. Q2 expected Wrap up to show sequential improvement on topline an
Slide 19: Financial Results and Outlook
Financial Results and Outlook Carrie Anderson Chief Financial Officer 19
Slide 20: Stable Q1; results generally aligned with our expectations
$ Millions, except per share Q1 FY25 Key Financial Results Stable Q1; results generally aligned with our expectations Sovos Brands neutral to adj. EPS Net Sales Adjusted EBIT* Adjusted EPS* $2,772 $432 $0.91 $0.89 $2,518 $407 +6% (2)% +10% vs. PY vs. PY vs. PY Q1 FY24 Q1 FY25 Q1 FY24 Q1 FY25 Q1 FY24
Slide 21: Q1 FY25 Net Sales Bridge
$ Millions Q1 FY25 Net Sales Bridge Sovos Brands outperformed expectations; organic results reflect uneven category recovery Organic net sales decreased as lower net price realization offset flat volume/mix 11 pts $2,772 $2,518 0 pts (1) pt $2,463 0 pts (1)% +10% vs. PY vs. PY Q1 FY24 Net Sales Volu
Slide 22: Adj. gross profit margin decrease primarily reflects the impact of the acquisition
Q1 FY25 Adjusted Gross Profit Margin* Bridge Adj. gross profit margin decrease primarily reflects the impact of the acquisition Productivity improvements and cost savings largely offset price, inflation and other supply chain costs in base business 32.1 % + 20 bps (80) bps (140) bps + 150 bps + 40 b
Slide 23: Other operating items as % of Net Sales remained flat
$ Millions Q1 FY25 Other Operating Items Other operating items as % of Net Sales remained flat Adjusted Marketing & Selling Expenses* Adjusted Administrative Expenses* $241 1 $164 1 $220 $150 A&C +13% vs. PY1 +10% +9% vs. PY vs. PY 9% 9% 6% 6% % of Net Sales: 8% % of Net Sales: Q1 FY24 Q1 FY25 Q1 FY
Slide 24: Adj. EBIT +6% driven by acquisition contribution
Q1 FY25 Adjusted EBIT* Bridge $ Millions Adj. EBIT +6% driven by acquisition contribution Lower adj. EBIT margin reflects lower adj. gross margin driven by impact of acquisition $63 ($21) ($16) ($1) $432 $407 +6% vs. PY Q1 FY24 Adjusted Gross Adjusted Marketing Adjusted Adjusted Other Q1 FY25 Profit
Slide 25: Adj. EPS moved modestly lower with EBIT growth more than offset by higher interest
Q1 FY25 Adjusted EPS* Bridge Adj. EPS moved modestly lower with EBIT growth more than offset by higher interest expense The impact of the Sovos Brands acquisition was approximately neutral to adj. EPS $0.06 ($0.09) $0.91 $0.01 ($0.01) $0.89 (2)% vs. PY Q1 FY24 Adjusted EBIT* Interest Adjusted Taxes*
Slide 26: Q1 FY25 Meals & Beverages Results
$ Millions Q1 FY25 Meals & Beverages Results Net Sales Operating Earnings $1,706 $337 $1,404 $287 +22% +17% vs. PY vs. PY Q1 FY24 Q1 FY25 Q1 FY24 Q1 FY25 Vol / Mix (6)% 1% Operating Margin 20.4% 19.8% Net Price Realization 2% (1)% Organic Net Sales* vs. PY (3)% 0% *See Non-GAAP reconciliation; Numbe
Slide 27: Q1 FY25 Snacks Results
$ Millions Q1 FY25 Snacks Results Net Sales Operating Earnings $1,114 $1,066 $161 $142 (4)% (12)% vs. PY vs. PY Q1 FY24 Q1 FY25 Q1 FY24 Q1 FY25 Vol / Mix (4)% (1)% Operating Margin 14.5% 13.3% Net Price Realization 5% (1)% Organic Net Sales* vs. PY 1% (2)% *See Non-GAAP reconciliation. 27
Slide 28: Strong operating cash flow and a disciplined focus on shareholder value creation
$ Millions Capital Allocation Strong operating cash flow and a disciplined focus on shareholder value creation Returned $170M to shareholders in Q1 FY25. Dividend increased by 5% to $0.39 per share beginning with Q3 FY25 payout Net Cash Flows from Operations Capital Allocation $225 Q1 FY24 Q1 FY25 I
Slide 29: FY25 Guidance Reaffirmed
Outlook FY25 Guidance Reaffirmed FY25 Assumptions • Net sales growth reflects a full twelve-month contribution from Sovos Brands, expect sales growth on a pro forma basis3 FY24 FY25 Guidance of slightly above 10% and accretive adjusted EPS impact for $ Millions, Except Per Share Results (includes 53
Slide 30: Q1 FY25 & Looking Ahead
Wrap Up Q1 FY25 & Looking Ahead Q1 performance generally as expected Strong performance by Sovos Brands expected to continue Self-help fueling investments for share growth FY25 Guidance reaffirmed with sequential organic growth improvement in Q2 Mick Beekhuizen to succeed Mark Clouse effective Febru
Slide 31: Q&A
Q&A Mark Clouse Carrie Anderson President & Chief Executive Officer EVP & Chief Financial Officer 31
Slide 32: Appendix
Slide 33: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures ($ millions) First Quarter % Change Net Sales, Impact of Impact of Organic Net Sales, Organic Impact of Impact of October 27, 2024 As Reported Currency Acquisition Net Sales As Reported Net Sales Divestiture Acquisition Meals & Beverages $ 1,706
Slide 34: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures ($ millions) First Quarter % Change Net Sales, Impact of Organic Net Sales, Organic October 29, 2023 As Reported Currency Net Sales As Reported Net Sales Meals & Beverages $ 1,404 $ 3 $ 1,407 (4)% (3)% Snacks 1,114 (1) 1,113 (1)% 1% Total Net Sa
Slide 35: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures ($ millions) First Quarter % Change Net Sales, Impact of Organic Net Sales, Organic October 30, 2022 As Reported Currency Net Sales As Reported Net Sales Meals & Beverages $ 1,455 $ 7 $ 1,462 15% 15% Snacks 1,120 - 1,120 15% 15% Total Net Sales
Slide 36: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures ($ millions, except per share amounts) First Quarter EBIT EBIT Margin % Earnings Diluted EPS* 2025 – As Reported $ 367 13.2% $ 218 $ 0.72 Costs associated with cost savings and optimization initiatives 35 27 0.09 Postretirement actuarial losses
Slide 37: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures ($ millions, except per share amounts) First Quarter EBIT EBIT Margin % Earnings Diluted EPS* 2024 – Adjusted $ 407 16.2% $ 272 $ 0.91 2023 – As Reported $ 436 16.9% $ 297 $ 0.99 Costs associated with cost savings and optimization initiatives 3
Slide 38: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures ($ millions, except per share amounts) First Quarter EBIT EBIT Margin % Earnings Diluted EPS* 2023 – Adjusted $ 449 17.4% $ 307 $ 1.02 2022 – As Reported $ 376 16.8% $ 261 $ 0.86 Costs associated with cost savings and optimization initiatives 4
Slide 39: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures ($ millions) First Quarter Gross Profit GP % EBT Tax Tax Rate 2025 – As Reported $ 867 31.3% $ 284 $ 66 23.2% Costs associated with cost savings and optimization initiatives 8 35 8 Postretirement actuarial losses - 2 1 Commodity mark-to-market g
Slide 40: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures ($ millions) First Quarter Marketing & Other Expenses / Selling Expenses (Income) 2025 – As Reported $ 250 $ 43 Costs associated with cost savings and optimization initiatives (9) - Postretirement actuarial losses - (2) Charges associated with d
Slide 41: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures ($ millions) First Quarter Administrative R&D Expenses Expenses Total 2025 – As Reported $ 175 $ 26 $ 201 Costs associated with cost savings and optimization initiatives (11) (1) (12) Cybersecurity incident recoveries 1 - 1 Certain litigation ex
Slide 42: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures ($ millions, except per share amounts) First Quarter – Adjusted Diluted EPS Impact from Adjusted EBIT EBIT 2025 – Adjusted $ 432 2024 – Adjusted 407 $ Change $ 25 Deduct: 2024 Adjusted tax rate impact on EBIT (6) Impact to Net Earnings $ 19 Firs
Slide 43: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures ($ millions, except per share amounts) Adjusted Diluted EPS Impact from Change in Adjusted Tax Rate First Quarter 2025 – Adjusted EBT $ 349 Decrease (Increase) in Adjusted Tax Rate 0.7% Adjusted EBT multiplied by the Change in Adjusted Tax Rate
Slide 44: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures ($ millions) Fiscal 2024 Organic Sales Base for Fiscal 2025 Guidance Full Year Organic Net Sales Net Sales, Impact of Base for FY2025 July 28, 2024 As Reported Divestiture* Guidance Meals & Beverages $ 5,258 $ - $ 5,258 Snacks 4,378 (111) 4,267
Slide 45: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures ($ millions) Q2 Fiscal 2024 Organic Sales Base for Fiscal 2025 Guidance Second Quarter Organic Net Sales Net Sales, Impact of Base for Fiscal January 28, 2024 As Reported Divestiture 2025 Guidance Meals & Beverages $ 1,382 $ - $ 1,382 Snacks 1,0
Slide 46: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures ($ millions, except per share amounts) Full Year EBIT Earnings Diluted EPS* 2024 – As Reported $ 1,000 $ 567 $ 1.89 Costs associated with cost savings and optimization initiatives 109 83 0.28 Pension and postretirement actuarial losses 33 25 0.0
Slide 47: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures ($ millions) Net Debt October 29, 2023 October 27, 2024 Short-Term Borrowings $ 206 $ 1,212 Long-Term Debt 4,500 6,705 Total Debt $ 4,706 $ 7,917 Less: Cash and Cash Equivalents (91) (808) Net Debt $ 4,615 $ 7,109 47
Slide 48: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures ($ millions) = (a)-(b)+(c)+(d) (a) (b) (c) (d) Trailing Twelve Twelve Months Three Months Three Months Sovos November Months Ended Ended Ended Ended 2023 – March 11, (TTM) October 27, July 28, 2024 October 29, 2023 October 27, 2024 2024 2024 Net
Slide 49: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures ($ millions) (b) (c) = (a)-(b)+(c) (a) Three Months Three Months Trailing Twelve Twelve Months Ended Ended Ended Months Ended (TTM) July 30, 2023 October 30, 2022 October 29, 2023 October 29, 2023 Net Earnings, as reported $ 858 $ 297 $ 234 $ 79
Slide 50: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures ($ millions) Net Debt July 28, 2024 Short-Term Borrowings $ 1,423 Long-Term Debt 5,761 Total Debt $ 7,184 Less: Cash and Cash Equivalents (108) Net Debt $ 7,076 50
Slide 51: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures (a) (b) =(a)+(b) Twelve Months Sovos August Combined Twelve ($ millions) Ended 2023 – March 11, Months Ended July 28, 2024 2024 July 28, 2024 Net Earnings, as reported $ 567 $ 24 $ 591 Taxes 190 13 203 Interest, net 243 21 264 Earnings before in
Slide 52: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures ($ millions) First Quarter Net Sales Total Net Sales 2025 $ 2,772 Add: Impact of Currency 1 Total $ 2,773 Total Net Sales 2024 $ 2,518 Deduct: Impact of Divestiture (21) Add: Sovos Brands, Inc. July 31, 2023 – October 29, 2023 273 Pro Forma Comb
Slide 53: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures ($ millions) First Quarter Net Sales Sovos Net Sales 2025 $ 310 Sovos Brands, Inc. July 31, 2023 – October 29, 2023 $ 273 % Change 14% 53
Campbell Soup Company — Q1 2025 Earnings Presentation on 6ix