The Campbell's Company · NASDAQ:CPB
The Campbell's — Campbell Soup Company — Q3 2021 Earnings Presentation
43 slides from The Campbell's's earnings presentation, Jun 9, 2021
Slide 1: Q3 2021 Earnings Presentation
Q3 2021 Earnings Presentation 1
Slide 2: Rebecca Gardy, Vice President Investor Relations
Rebecca Gardy Vice President Investor Relations 2
Slide 3: Forward-Looking Statements
Forward-Looking Statements The factors that could cause actual results to vary materially from those anticipated or expressed in any forward-looking statement include: impacts of, and associated responses to, the COVID-19 pandemic on our business, suppliers, customers, consumers and employees; our a
Slide 4: Agenda
Agenda Consolidated Results Division Highlights Q3 Financial Highlights Full-Year Guidance Q&A Q3 FY21 4
Slide 5: Mark Clouse, CEO Perspective
Mark Clouse President and Chief Executive Officer Q3 Fiscal 2021 Earnings Presentation CEO Perspective 5
Slide 6: Q3 Performance Overview
Q3 Performance Overview ▪ Topline came in as expected, given challenging comparison ▪ Continued brand strength: market share gains, strong household retention, recovery on shelf ▪ Margin headwinds, mostly anticipated but some pressures intensified ▪ Plans are already underway; pricing in place as we
Slide 7: Sales in-line with our expectations; Clear brand strength
Sales in-line with our expectations; Clear brand strength Net Sales & Organic Growth Rate* Brand Strength Continuing Operations 9% consumption vs. 2YA1 ($ billions) $2.24 +17% $1.98 $1.95 (12%) ~75% of Portfolio Gained or Held Share1 Q3 FY19 Q3 FY20 Q3 FY21 * See Non-GAAP reconciliation 1 Total IRI
Slide 8: Margin Impact
Margin Impact Adjusted EBIT’ Easing of Margin Pressures into Fiscal 2022 Continuing Operations ($ millions) $386 Q3FY21 Q4F FY22 $204 PRINS Tension TT > Q3FY19 Q3FY20 Q3FY21 Executional — > 15.1% 17.2% 14.3% Adj EBIT Margin* * See Non-GAAP reconciliation Camptli Q3 FY21 Real food, Real results
Slide 9: Meals & Beverages Division Performance
Meals & Beverages Division Performance Win in Soup Key M&B Brands 9 th Consecutive Quarter +2pts #1 Share for 24 1 Record U.S. Soup Straight Months of Condensed Share1 Share1 Gains vs PY Growth vs PY 2 Double- Repeat rates ahead of pre- Digit Net Sales COVID-19 levels Growth vs +0.6 pts 2YA +9% +28%
Slide 10: Snacks Division Performance
Snacks Division Performance ▪ +14% Power Brands consumption1 vs 2YA ▪ Repeat rates2 on 7 of 9 power brands ahead of pre-COVID-19 levels ▪ Salty snacks consumption1growth nearly 20% vs 2YA ▪ Goldfish returned to share1 growth vs PY ▪ Launch of limited-edition Goldfish® Frank’s RedHot crackers 1 Total
Slide 11: Mick Beekhuizen, CFO Perspective
Mick Beekhuizen EVP & Chief Financial Officer Q3 Fiscal 2021 Earnings Presentation CFO Perspective 11
Slide 12: Financial Summary
Financial Summary Continuing Operations ($ millions, except per share data) Q3 Change vs. PY YTD Change vs. PY FY21 $ % FY21 $ % Net Sales $1,984 ($254) (11%) $6,603 $20 0% Organic Net Sales* ($264) (12%) $34 1% Adjusted EBIT* $283 ($103) (27%) $1,139 ($3) 0% Adjusted EPS* $0.57 ($0.26) (31%) $2.43
Slide 13: Components of Net Sales Change
Components of Net Sales Change Continuing Operations (12) pts - - (12%) - (11%) Q3PY Qtr FY20 Volume & Mix Price & Sales Promotional CY Q3Qtr Org FY21 Currency CY FY21 Q3 Qtr Net Sales Allowances Spending Organic Net Sales * See Non-GAAP reconciliation Net Sales* Numbers may not add due to rounding.
Slide 14: Adjusted Gross Margin Bridge
Adjusted Gross Margin* Bridge Continuing Operations -290 bps 34.7% (110) bps (110) bps +30 bps (310) bps +60 bps 31.8% +150 bps Q3 PYFY20 Qtr Mix Operating Net Pricing Inflation/ Productivity Cost Savings CYFY21 Q3 Qtr Leverage1 Other 2 Improvements Initiatives * See Non-GAAP reconciliation 1 Reflec
Slide 15: Other Operating Items
Other Operating Items Continuing Operations ($ millions) -14% A&C Marketing Adjusted & Selling Expenses Administrative Expenses* -15% $239 $202 -1% $144 $142 Q3 PY FY20 Q3CY FY21 Q3PY FY20 Q3CY FY21 * See Non-GAAP reconciliation Q3 FY21 15
Slide 16: Cost Savings & Value Capture
Cost Savings & Value Capture Continuing Operations ($ millions) $850 ▪ Total savings of $20 million realized in Q3 ▪ Additional $20 million expected in Q4 to deliver aggregate $75 million in FY21 with the majority from Snyder's-Lance integration $780 million ▪ Tracking to cumulative savings target o
Slide 17: Adjusted EBIT Bridge
Adjusted EBIT* Bridge Continuing Operations ($ millions) $386 ($88) -27% ($58) +$37 +$5 +$1 $283 PYFY20 Q3 Qtr Net Sales Adjusted Gross Marketing & Adjusted Adjusted Other CYFY21 Q3 QTr Impact** Margin Impact Selling Administrative & Income Expenses R&D Expenses * See Non-GAAP reconciliations for al
Slide 18: Adjusted EPS Bridge
Adjusted EPS* Bridge Continuing Operations $0.83 ($0.26) -31% $0.01 ($0.01) $0.57 Q3 PYFY20 Qtr Adjusted EBIT Interest Adjusted Taxes Q2 Q3 FY21 * See Non-GAAP reconciliations for all adjusted financial measures presented. Q3 FY21 18
Slide 19: Segment Results
Segment Results ($ millions) Net Sales & Organic Growth Rate* Operating Earnings $1,210 -15% $1,039 -35% $275 $179 Q3 FY20 Q3 FY21 Q3 FY20 Q3 FY21 * See Non-GAAP reconciliation Q3 FY21 19
Slide 20: Segment Results
Segment Results ($ millions) Net Sales & Organic Growth Rate* Operating Earnings $1,028 -8% $945 -29% $154 $109 Q3 FY20 Q3 FY21 Q3 FY20 Q3 FY21 * See Non-GAAP reconciliation Q3 FY21 20
Slide 21: Cash Flow
Cash Flow Total Company ($ millions) YTD FY20 YTD FY21 Net Cash Flows from Operations $1,125 $881 Of which changes in working capital (net of divestitures) $85 ($178) Net Cash Flows from Investing Activities $2,318 ($177) Of which capital expenditures ($220) ($190) Of which sales of businesses (net
Slide 22: Fiscal 2021 Guidance for Continuing Operations
Fiscal 2021 Guidance for Continuing Operations ($ in millions, except per share) Previous Updated Fiscal 2020 Fiscal 2021 Fiscal 2021 Results Guidance Guidance Net Sales $8,691 -3.5% to -2.5% -3.5% to -3.0% Organic Net Sales $8,492* -1.5% to -0.5% -1.2% to -0.7% Adjusted EBIT $1,449* -1% to +1%1 -5%
Slide 23: Summary
Summary ▪ Confident in our response and transformation ▪ Positive indicators of long-term business health and improving trajectory ▪ Committed to unlocking Campbell’s full potential ▪ More to come at Investor Day Q3 FY21 23
Slide 24: Q&A
Q&A Mark Clouse Mick Beekhuizen President and EVP and Chief Financial Officer Chief Executive Officer Q3 FY21 24
Slide 25: Appendix
Appendix Camptli Real food, Keal results, ..
Slide 26: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions) Third Quarter % Change Net Sales, Impact of Organic Net Sales, Organic May 2, 2021 As Reported Currency Net Sales As Reported Net Sales Meals & Beverages $ 1,039 $ (9) $ 1,030 -14% -15% Snacks 945 (1) 944 -8% -
Slide 27: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions) Nine Months % Change Net Sales, Impact of Organic Net Sales, Organic May 2, 2021 As Reported Currency Net Sales As Reported Net Sales Meals & Beverages $ 3,681 $ (11) $ 3,670 1% 1% Snacks 2,922 - 2,922 -1% 0% T
Slide 28: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions, except per share amounts) Third Quarter EBIT EBIT Margin % Earnings Diluted EPS* 2021 – As Reported $ 272 13.7% $ 166 $ 0.54 Add: Restructuring charges, implementation costs and other related costs 15 11 0.04 D
Slide 29: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions, except per share amounts) Nine Months EBIT EBIT Margin % Earnings Diluted EPS* 2021 – As Reported $ 1,134 17.2% $ 720 $ 2.36 Add: Restructuring charges, implementation costs and other related costs 43 32 0.10 A
Slide 30: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions) Third Quarter Gross Margin GM % EBT Tax Tax Rate 2021 – As Reported $ 628 31.7% $ 219 $ 53 24.2% Add: Restructuring charges, implementation costs and other related costs 2 15 4 Deduct: Pension settlement - (4)
Slide 31: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions) Adjusted EBIT Impact from Adjusted Gross Margin Third Quarter 2021 – Adjusted Gross Margin $ $ 630 2021 – Reported Net Sales $ 1,984 2020 – Adjusted Gross Margin % 34.7% 2021 – Adjusted Gross Margin $ at 2020 A
Slide 32: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions) Third Quarter Administrative Other Expenses / Expenses (Income) 2021 – As Reported $ 153 $ (23) Deduct: Restructuring charges, implementation costs and other related costs (11) - Add: Pension settlement - 4 202
Slide 33: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions, except per share amounts) Third Quarter – Adjusted Diluted EPS Impact from Adjusted EBIT EBIT 2021 – Adjusted $ 283 2020 – Adjusted 386 $ Change $ (103) Add: Adjusted tax rate impact on EBIT 24 Impact to Net Ea
Slide 34: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions, except per share amounts) Adjusted Diluted EPS Impact from Change in Adjusted Tax Rate Third Quarter 2021 – Adjusted EBT $ 230 Change in Adjusted Tax Rate 0.7% Adjusted EBT multiplied by the Change in Adjusted
Slide 35: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions, except per share amounts) Full Year Diluted EBIT Earnings EPS* 2020 – As Reported $ 1,107 $ 592 $ 1.95 Add: Restructuring charges, implementation costs and other related costs 69 52 0.17 Add: Pension settlement
Slide 36: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions) Full Year Fiscal 2021 Guidance Organic Net Sales % Change Net Sales, Impact of Impact of Organic Fiscal 2020 As Reported 53rd Week Divestitures Net Sales Low End High End Total Net Sales $ 8,691 (151) (48) $ 8,
Slide 37: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions) Third Quarter % Change Net Sales, Impact of Organic Net Sales, Organic April 26, 2020 As Reported Currency Net Sales As Reported Net Sales Meals & Beverages $ 1,210 $ 3 $ 1,213 20% 21% Snacks 1,028 (1) 1,027 9%
Slide 38: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions) Third Quarter EBIT EBIT Margin % 2019 – As Reported $ 245 12.5% Add: Restructuring charges, implementation costs and other related costs 21 Add: Pension settlement 28 2019 – Adjusted $ 294 15.1% Q3 FY21 38
Slide 39: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions, except per share amounts) Full Year Diluted EBIT Earnings EPS 2019 – As Reported $ 979 $ 474 $ 1.57 Add: Restructuring charges, implementation costs and other related costs 121 92 0.30 Add: Pension settlement 2
Slide 40: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions) Third Quarter % Change Net Sales, Impact of Organic Net Sales, Organic May 2, 2021 As Reported Currency Net Sales As Reported Net Sales Meals & Beverages $ 1,039 $ (6) $ 1,033 3% 3% Snacks 945 - 945 0% 3% Total
Slide 41: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions) Fourth Quarter Net Sales, Impact of Organic July 28, 2019 As Reported Divestitures Net Sales Total Net Sales $ 1,780 (61) $ 1,719 Q3 FY21 41
Slide 42: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions) Full Year Net Sales, Impact of Organic Fiscal 2019 As Reported Divestitures Net Sales Total Net Sales $ 8,107 (155) $ 7,952 Q3 FY21 42
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