The J.m. Smucker Company · NYSE:SJM
The J.m. Smucker — Investor Day (December 2024)
37 slides from The J.m. Smucker's investor day presentation, Dec 10, 2024
Slide 1: Financial Priorities & Growth
THE JM. SMUCKER Co FINANCIAL PRIORITIES & sO
Slide 2: Tucker Marshall, Chief Financial Officer
TUCKER MARSHALL Chief Financial Officer
Slide 3: Bringing the Story Together
Bringing the STORY TOGETHER Key Growth World-Class Consumer-Led Our People Platforms Capabilities Innovation & Culture DELIVER RESULTS & CREATE VALUE
Slide 4: Financial Priorities
FINANCIAL PRIORITIES Commitment to business strategy & value creation for our shareholders Consistent A Focus on Prioritization of Balanced Active & Execution Productivity Highest & Capital Transparent Toward Financial & Cost Best Return Deployment Communication Targets Initiatives Opportunities Mod
Slide 5: Building Blocks
BUILDING BLOCKS to our portfolio of leading brands Leading brands in Net sales & attractive categories earnings growth Balanced top-line & Strong profit margins bottom-line approach & cash flow Reinvest in the Business & Return Cash to Shareholders
Slide 6: Maintaining Business Momentum
MAINTAINING BUSINESS MOMENTUM RESPONDING & TO CONSUMERS Capitalizing on our Portfolio of Brands Net Sales has Grown We will continue our consumer-centric approach by making strategic investments to +7% CAGR STRENGTHEN OUR BRANDS & Over the Past 4 Fiscal Years, When Excluding Divestitures and Acquisi
Slide 7: Long-Term Growth Targets
LSD NET SALES LONG-TERM MSD ADJUSTED OPERATING INCOME GROWTH TARGETS HSD ADJUSTED EPS 10%+ TOTAL SHAREHOLDER RETURN
Slide 8: Our Long-Term Objectives
OUR LONG-TERM OBJECTIVES A steady, compelling, and compounding algorithm DIVIDENDS DEBT REPAYMENT & SHARE OPERATING REPURCHASE MARGIN EXPANSION 10%+ HSD MSD LSD Net Sales Adj. Operating Adj. EPS Total Growth Income Growth Growth Shareholder Return
Slide 9: Net Sales
OU R LONG - T ERM OB J ECT IV E NET SALES LOW-SINGLE-DIGIT Percentage Growth LSD + OUR SUCCESS Net Sales Growth is driven by our KEY GROWTH PLATFORMS Long-Term Algorithm
Slide 10: Long-Term Net Sales Growth
LONG-TERM NET SALES GROWTH driven by growth in each of our businesses Frozen Handheld Sweet Baked International & Coffee Pet & Spreads Snacks Away From Home +1-2% +3-4% +3-4% +4% +3-4% Driven by our KEY GROWTH PLATFORMS
Slide 11: Adjusted Operating Income
OU R LONG - T ERM OB J ECT IV E ADJUSTED OPERATING INCOME MID-SINGLE-DIGIT Percentage Growth MSD Improved volume/mix Adj. Op. Supply chain improvements Income Growth Benefits from transformation efforts Realization of synergies Mitigation of stranded overhead Long-Term Algorithm
Slide 12: Improving Volume/Mix
OU R LONG - T ERM OB J ECT IV E Adjusted Operating Income Divested low-margin businesses Prioritize fast-growth platforms IMPROVING VOLUME/MIX Margin accretive acquisition with our optimized portfolio Exit co-manufacturing sales
Slide 13: Supply Chain Improvements
OU R LONG - T ERM OB J ECT IV E Adjusted Operating Income SUPPLY CHAIN IMPROVEMENTS Moderation of Commodity Stabilization in Supply & Input Inflation Chain & Manufacturing FOCUS ON COST PRODUCTIVIT Y
Slide 14: Transformation Workstreams
OU R LONG - T ERM OB J ECT IV E Adjusted Operating Income TRANSFORMATION WORKSTREAMS DRIVING OWNERSHIP & ACCOUNTABILITY Execution of Cost & Productivity Initiatives 3-YEAR Stranded Overhead ROADMAP OF I N I T I AT I V E S Synergies SUPPORT MARGIN IMPROVEMENT & PORTFOLIO REINVESTMENTS
Slide 15: Acquisition Synergies
OU R LONG - T ERM OB J ECT IV E Adjusted Operating Income ACQUISITION SYNERGIES $50M in FY25 $50M in FY26 TOTAL COST SYNERGIES OF ~$100M 75% 25% SG&A Benefit Gross Margin Benefit
Slide 16: Mitigate Stranded Overhead
OU R LONG - T ERM OB J ECT IV E Adjusted Operating Income MITIGATE STRANDED OVERHEAD ANTICIPATE RELIEF FROM STRANDED OVERHEAD COSTS NEXT FISCAL YEAR
Slide 17: Adjusted Earnings Per Share
OU R LONG - T ERM OB J ECT IV E ADJUSTED EARNINGS PER SHARE HIGH-SINGLE-DIGIT Percentage Growth HSD GROWTH DRIVEN BY O U R C A P I TA L Adj. EPS D E P LO Y M E N T Growth MODEL Debt Repayment & Share Repurchases Long-Term Algorithm
Slide 18: Capital Deployment Model
OU R LONG - T ERM OB J ECT IV E Capital Deployment Capital Dividends & Expenditures Share Repurchases A Balanced CAPITAL CASH FROM OPERATIONS DEPLOYMENT MODEL Strategic Debt Investments Repayment
Slide 19: Free Cash Flow
OU R LONG - T ERM OB J ECT IV E Free Cash Flow Business Growth Long-Term Objective $1B Managing Working Capital FREE CASH FLOW ANNUALLY Reducing Capital Expenditures
Slide 20: Capital Expenditures
OU R LONG - T ERM OB J ECT IV E Capital Expenditures CAPITAL EXPENDITURES $587M $477M $450M $418M $307M Long-Term Objective 3.5% NET SALES ANNUALLY FY21 FY22 FY23 FY24 FY25E % of NS 3.8% 5.2% 5.6% 7.2% 5.1% (A) ® Elevated due to Uncrustables sandwiches capacity expansion (A) BASED ON MIDPOINT OF FY2
Slide 21: Supporting Organic Growth
SUPPORTING ORGANIC GROWTH of our highest return opportunities
Slide 22: Debt Reduction
DEBT REDUCTION Prioritize debt Maintain reduction following Hostess Brands INVESTMENT GRADE acquisition debt rating 4.9x Prioritizing 4.1x $500M OF DEBT REPAYMENT this fiscal year and 2.5x 2.7x 2.3x each of the next two years 3.0x Net Debt to EBITDA FY21 FY22 FY23 FY24 FY25 Q2 by end of FY27
Slide 23: Dividend Growth
DIVIDEND GROWTH 6% $4.20 23 10-YEAR CAGR Consecutive Fiscal Years of Growth $2.26 40-45% Adjusted EPS Payout Target FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
Slide 24: Share Repurchases
SHARE REPURCHASES Return Cash to our Shareholders $2.5B of share repurchases in the last 10 years FY16 FY17 FY21 FY22 FY23 FY24
Slide 25: Long-Term Growth Targets
LSD NET SALES LONG-TERM MSD ADJUSTED OPERATING INCOME GROWTH TARGETS HSD ADJUSTED EPS 10%+ TOTAL SHAREHOLDER RETURN
Slide 26: Our Key Elements
OUR KEY ELEMENTS WORLD-CLASS LEGACY CONFIDENCE IN THE MARKETING, BUSINESS IS HOSTESS BRAND ® COMMERCIAL, & DELIVERING 4% LONG-TERM MANUFACTURING STRONG GROWTH GROWTH TARGET CAPABILITIES ~85% OF OUR STRATEGIC FURTHER SALES NET SALES RATIONALE GROWTH & MARGIN REMAINS STRONG EXPANSION
Slide 27: Value Creation for Our Shareholders
OUR Strategy & culture, Strength of portfolio & business execution & commitment to deliver our long-term algorithm and capital deployment model ARE THE FOUNDATION OF VALUE CREATION FOR OUR SHAREHOLDERS
Slide 28: Thank You
THANK YOU
Slide 29: The J.M. Smucker Co. Investor Day
THE JM. SMUCKER Co INVESTOR DAY
Slide 30: 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 31: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES The Company uses non-GAAP financial measures, including: net sales excluding acquisition, divestitures, and foreign currency exchange; adjusted gross profit; adjusted operating income; adjusted income; adjusted earnings per share; earnings before interest, taxes, deprecia
Slide 32: Unaudited Non-GAAP Financial Measures
UNAUDITED NON-GAAP FINANCIAL MEASURES (Dollars in millions) Three Months Ended TTM Ended January 31, April 30, July 31, October 31, October 31, 2024 2024 2024 2024 2024 EBITDA (as adjusted) reconciliation: Net income (loss) $120.4 $245.1 $185.0 ($24.5) $526.0 Income tax expense 75.1 68.0 61.0 91.3 2
Slide 33: Unaudited Non-GAAP Financial Measures
UNAUDITED NON-GAAP FINANCIAL MEASURES (Dollars in millions) Three Months Ended Year Ended July 31, October 31, January 31, April 30, April 30, 2023 2023 2024 2024 2024 EBITDA (as adjusted) reconciliation: Net income (loss) $183.6 $194.9 $120.4 $245.1 $744.0 Income tax expense 54.8 54.5 75.1 68.0 252
Slide 34: Unaudited Non-GAAP Financial Measures
UNAUDITED NON-GAAP FINANCIAL MEASURES (Dollars in millions) Three Months Ended Year Ended July 31, October 31, January 31, April 30, April 30, 2022 2022 2023 2023 2023 EBITDA (as adjusted) reconciliation: Net income $109.8 $191.1 $208.5 ($600.7) ($91.3) Income tax expense 31.3 61.8 66.9 (77.9) 82.1
Slide 35: Unaudited Non-GAAP Financial Measures
UNAUDITED NON-GAAP FINANCIAL MEASURES (Dollars in millions) Three Months Ended Year Ended July 31, October 31, January 31, April 30, April 30, 2021 2021 2022 2022 2022 EBITDA (as adjusted) reconciliation: Net income $153.9 $206.0 $69.7 $202.1 $631.7 Income tax expense 51.3 62.8 39.9 58.1 212.1 Inter
Slide 36: Unaudited Non-GAAP Financial Measures
UNAUDITED NON-GAAP FINANCIAL MEASURES (Dollars in millions) Three Months Ended Year Ended July 31, October 31, January 31, April 30, April 30, 2020 2020 2021 2021 2021 EBITDA (as adjusted) reconciliation: Net income $237.0 $230.8 $261.5 $147.0 $876.3 Income tax expense 76.6 72.7 100.0 46.3 295.6 Int
Slide 37: Additional Information
ADDITIONAL INFORMATION The J.M. Smucker Co. is the owner of all trademarks referenced herein, ® except as set forth below and ® for Dunkin’ , which is a trademark of DD IP Holder LLC. The Dunkin’ brand is licensed to The J.M. Smucker Co. for packaged coffee products sold in retail channels such as g
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