The J.m. Smucker Company · NYSE:SJM
The J.m. Smucker — Investor Presentation (June 2016)
27 slides from The J.m. Smucker's investor presentation, Jun 14, 2016
Slide 1: The J. M. Smucker Company June 2016: Why Invest in Smucker
The J. M. Smucker Company June 2016 The J. M. Smucker Company June 2016 Why Invest in Smucker 2
Slide 2: The J. M. Smucker Company / Our Purpose
The J. M. Smucker Company June 2016 The J. M. Smucker Company Founded in 1897 by JEROME M. SMUCKER and began trading on NYSE in 1965 FIVE GENERATIONS of Smucker family management with only SIX CEOs in Company’s history Committed to CORE VALUES AND PRINCIPLES upon which the Company was founded 3 Our
Slide 3: Our Vision Guides Our Strategy / A Period of Transformational Growth
The J. M. Smucker Company June 2016 Our Vision Guides Our Strategy “Engage, delight, and inspire consumers through trusted food brands that bring joy throughout their lives.” A portfolio that combines #1 AND LEADING BRANDS with EMERGING, ON-TREND BRANDS will drive balanced growth. 5 A Period of Tran
Slide 4: Our Key Acquisitions / Three Platforms for Growth
The J. M. Smucker Company June 2016 Our Key Acquisitions Acquisitions have brought new brands, categories, and capabilities CY 7 Three Platforms for Growth CONSUMER AND PET FOOD COFFEE NATURAL FOODS AND SNACKS 8
Slide 5: U.S. Retail Markets: Strong Food Presence and Category Leadership
The J. M. Smucker Company June 2016 Strong Food Presence With our increased scale, we are a key supplier to our customers Source: Smucker Internal Multi-Outlet Share Report 52 weeks ended April 17, 2016 9 Our Category Leadership #1 branded position in 7 center of store categories NATURAL SHORTENING
Slide 6: Meeting Changing Consumer Preferences
The J. M. Smucker Company June 2016 Meeting Changing Consumer Preferences SIMPLE NUTRIENT ADDED MINDFUL INGREDIENTS RICH CONVENIENCE SNACKING 11 Strong Track Record of Innovation 10% oflaunched FY16 net sales were from products within the last three years 12
Slide 7: Corporate Sustainability / Segment Overview
The J. M. Smucker Company June 2016 Corporate Sustainability Established environmental goals and sourcing initiatives *From 2014 baseline 13 Segment Overview
Slide 8: Segment Reporting – FY16 Results
The J. M. Smucker Company June 2016 Segment Reporting – FY16 Results CONSUMER INT’L & COFFEE PET FOODS FOODS FOODSERVICE ($ in millions) NET SALES $2,239 $2,270 $2,250 $1,052 YoY CHANGE 8% -3% N/A 0% % of Total Net Sales 29% 29% 29% 13% SEGMENT PROFIT $646 $460 $392 $157 YoY CHANGE 18% 0% N/A 12% Se
Slide 9: Leader in At-Home Coffee Dollar Share
The J. M. Smucker Company June 2016 Leader in At-Home Coffee 27 Dollar Share of $9.4B Category Competitor #3 Source: Smucker Internal Multi-Outlet Share Report 52 weeks ended May 15, 2016 17 At-Home Coffee Category Growth Category has increased significantly since 2011 driven by One Cup $9.4B 10% 5-
Slide 10: Our Brands Compete in Key Segments
The J. M. Smucker Company June 2016 Our Brands Compete in Key Segments COMBINED DOLLAR SHARE MAINSTREAM 55 PREMIUM 16 ONE CUP 15 INSTANT 29 Source: Smucker Internal Multi-Outlet Share Report 52 weeks ended May 15, 2016 19 Coffee Makers in U.S. Households Household penetration for
Slide 11: U.S. Retail Consumer Foods Segment
The J. M. Smucker Company June 2016 U.S. Retail Consumer Foods Segment $2.3B FY16 Net Sales Note: FY16 net sales includes 8 months of sales for the divested U.S. canned milk business 21 Consumer Foods Category Participation Size CATEGORY (in billions) Snack Bars $5.2 Frozen Handheld 4.3 Shortening a
Slide 12: Leader in Nut Butter / Growing Jif To A Billion Dollar Brand
The J. M. Smucker Company June 2016 Leader in Nut Butter Category 37 Dollar Share of $2.4B Category Source: Smucker Internal Multi-Outlet Share Report 52 weeks ended May 15, 2016 23 Growing Jif To A Billion Dollar Brand Total Company net sales of approximately $625 million in FY16 24
Slide 13: Leader in Fruit Spreads / Smucker's Uncrustables
The J. M. Smucker Company June 2016 Leader in Fruit Spreads Category 45 Dollar Share of $944M Category Instant Source: Smucker Internal Multi-Outlet Share Report 52 weeks ended May 15, 2016 25 Smucker’s Uncrustables Sandwiches Total Company net sales of approximately $200 million in FY16 17 consecut
Slide 14: U.S. Retail Pet Foods Segment
The J. M. Smucker Company June 2016 U.S. Retail Pet Foods Segment $2.3B FY16 Net Sales 27 Drivers of Pet Food Growth Anticipate overall sales growth of 4-5% over the long term. Over the next 12-18 months, challenges in Mainstream Pet Food are expected to result in overall growth slightly below long-
Slide 15: Pet Food is a Large and Attractive Category
The J. M. Smucker Company June 2016 Pet Food is a Large and Attractive Category • 3rd largest category in grocery • Pet population growing in the U.S. • Premiumization driving growth in pet specialty • Accelerated growth in pet snacks • Growth opportunities in e-commerce Note: 2015 sales; (1)Include
Slide 16: Financial Highlights
The J. M. Smucker Company June 2016 International and Foodservice Each contributed net sales of over $500 million in FY16 Beverage 31 Financial Highlights
Slide 17: History of Long-Term Growth / Long-Term Growth Targets
The J. M. Smucker Company June 2016 History of Long-Term Growth NET SALES NON-GAAP EPS $7.8B $6.57 $4.8B $4.69 5-Year 5-Year CAGR CAGR 10% 7% FY11 FY16 FY11 FY16 EBITDA FREE CASH FLOW $1.6B $1.3B $1.0B 5-Year 5-Year CAGR CAGR 9% $211M 43% FY11 FY16 FY11 FY16 33 Long-Term Growth Targets 34
Slide 18: Fiscal 2017 Outlook / Adjusted EPS Bridge
The J. M. Smucker Company June 2016 Fiscal 2017 Outlook Net Sales* -1% (YoY change) Net Sales Excluding Impact of Divested Business +1% (YoY change) Adjusted Non-GAAP Income per Diluted Share $7.60 - $7.75 Free Cash Flow $1.0B Capital Expenditures $240M Effective Tax Rate 34.0% *Net sales decline re
Slide 19: Amortization Expense by Segment / Fiscal 2017 Outlook by Segment
The J. M. Smucker Company June 2016 Amortization Expense by Segment Beginning in fiscal 2017, we are transitioning to a non-GAAP earnings per share metric which excludes noncash intangible amortization. Amortization expense will also be removed from our definition of segment profit, non-GAAP operati
Slide 20: Targeting Synergies of $200M by FY18
The J. M. Smucker Company June 2016 Targeting Synergies of $200M by FY18 DIRECT • Consolidate supplier base MATERIALS • Negotiate improved terms $60M • Eliminate redundant distribution centers OPERATIONS & SUPPLY CHAIN • Optimize logistics and transportation $40M • Leverage manufacturing best practi
Slide 21: Current Cash Deployment Strategy / Leverage Ratio Progression
The J. M. Smucker Company June 2016 Current Cash Deployment Strategy Cash from Operations Expected to Average $1.25B Annually Over Next 5 Years CapEx of 3-3.5% of net sales Maintain current dividend payout ratio Apply 40-45% towards debt repayment In addition, we will deploy cash for opportunistic s
Slide 22: Cash Returned to Shareholders / History of Dividend Growth
The J. M. Smucker Company June 2016 Cash Returned to Shareholders $2.9 BILLION returned over the past 5 years $800 $700 $600 Millions $500 $400 $300 $200 $100 $0 FY12 FY13 FY14 FY15 FY16 Dividends Share Repurchases 43 History of Dividend Growth 5-Year CAGR 10% $2.65 $1.64 FY11 FY12 FY13 FY14 FY15 FY
Slide 23: U.S. Retail Segments - Sales by Channel / Forward-Looking Statement
The J. M. Smucker Company June 2016 U.S. Retail Segments - Sales by Channel Note: Excludes Natural Foods sales (1)Other includes Military, Mass Retail, Convenience, and E-commerce 45 Forward-Looking Statement This presentation contains forward-looking statements, such as projected net sales, operati
Slide 24: Additional Information
The J. M. Smucker Company June 2016 Additional Information The Company is the owner of all trademarks and logos referenced herein, except for the following, which are used under license: Pillsbury ® is a trademark of The Pillsbury Company, LLC; Carnation® is a trademark of Societe des Produits Nestl
Slide 25: Non-GAAP Reconciliation
The J. M. Smucker Company June 2016 Non-GAAP Reconciliation Year Ended April 30, ($ in millions, except per share data) 2016 2011 Net income reconciliation: Net income $ 688.7 $ 479.5 Income tax expense 289.2 237.7 Unallocated derivative gains (12.0) (1.2) Cost of products sold – special project cos
Slide 26: Non-GAAP Reconciliation
The J. M. Smucker Company June 2016 Non-GAAP Reconciliation Year Ended April 31, ($ in millions) 2016 2011 EBITDA Reconciliation: Net income $ 688.7 $ 479.5 Income tax expense 289.2 237.7 Interest expense – net 171.1 67.1 Depreciation 221.7 165.8 Amortization 208.4 73.8 Earnings before interest, tax
Slide 27: The J. M. Smucker Company June 2016 – Additional Information
The J. M. Smucker Company June 2016 Additional Information: jmsmucker.com/investor-relations AARON BROHOLM Vice President, Investor Relations aaron.broholm@jmsmucker.com Phone: 330.684.7682 53
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