Kroger Company (the) · NYSE:KR
Kroger Company (the) — The Kroger — TAG 4th Annual Spring Consumer Conference 2012
21 slides from Kroger Company (the)'s conference presentation, Mar 28, 2012
Slide 1: TAG 4th Annual Spring Consumer Conference, New York
TAG 4th ANNUAL SPRING CONSUMER CONFERENCE, NEW YORK March 28, 2012
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation includes forward-looking statements which are subject to risks and uncertainties. Actual results might differ materially from those projected in the forward-looking statements. Additional information concerning factors that could cause actual results to m
Slide 3: Best-In-Class Retailer
Best-In-Class Retailer Significant scale with +2,400 stores in 31 states driving $90+ billion annual revenues #1 or #2 market share in 38 of our 42 major markets Proprietary consumer insights driving strong customer loyalty Outstanding positive identical store sales momentum Consistent rec
Slide 4: National Presence Across Banners And Formats
National Presence Across Banners And Formats Supermarkets Convenience Jewelry Pharmacy Manufacturing Prepaid Wireless Personal Finance 3
Slide 5: Unparalleled Reach With Leadership In Key Markets
Unparalleled Reach With Leadership In Key Markets 38 markets With #1 or #2 Share WA (122) MT ND ME (4) MN OR VT (56) WI NH ID (14) SD MI NY MA (132) WY (9) RI PA CT IA OH NV NE IN (210) NJ (54) (11) MD (143) WV UT DE IL (46) (50) (55) VA CA KS MO KY (364) (66) (17) (61) (109) NC AZ TN (16) AR (124)
Slide 6: Strengthening Our Competitive Position In Today's Environment
Strengthening Our Competitive Position In Today’s Environment Industry Trend Kroger Positioning • Challenging macro environment • Kroger’s consumer insights and continuing to affect consumer competitive pricing have increased behavior loyal households and driven market share gains • Increasing impor
Slide 7: Growing Share In A Highly Competitive Sector
Growing Share In A Highly Competitive Sector FY 2007 2.0% FY 2011 (+30bps) 1.7% 19.1% 9.3% 4.4% 21.1% 10.1% (+200bps) 4.3% (-80bps) (+10 bps) 10.9% 11.8% (+90bps) 23.5% 30.6% 22.4% 29.2% (-110bps) (-140bps) Kroger Other Food Retailers Mass Warehouse Drug Dollar Other Source: Nielsen Homescan Fiscal
Slide 8: Customer 1st: A Cycle Of Value Creation
Customer 1st: A Cycle Of Value Creation Improve Connection Strong ID Sales with Customers Growth Invest in Shopping Operating Cost Experience Leverage 7
Slide 9: Industry Leading Loyalty Program Provides Unique Customer Insights
Industry Leading Loyalty Program Provides Unique Customer Insights… Kroger Plus Card dunnhumby Relationship • Drives loyal household growth • Global leader in data management, • Almost 90% of sales involve loyalty customer analysis and insight-led card planning • Close to 50% of households in the •
Slide 10: Compelling Tiered Corporate Brand Strategy
Compelling Tiered Corporate Brand Strategy Is A Significant Driver Of Value Creation… Value Banner Brands Private Selection • Offers our price • Represents the • Premium quality sensitive majority of Kroger brand, made from customers a branded goods only the finest choice of basic ingredients produc
Slide 11: Differentiating Kroger From Our Competitors
…Differentiating Kroger From Our Competitors 40% 35% 30% 25% 20% 15% 10% 5% 0% Supermarket Industry Kroger Unit Share Dollar Share Source: Private Label Manufacturing Association and Company Reports 10
Slide 12: 33 Consecutive Quarters Of Positive ID Sales Growth
1.0% 2.0% 3.0% 4.0% 6.0% 7.0% 0.0% 5.0% Q4-03 Q1-04 Q2-04 Q3-04 Q4-04 Q1-05 Q2-05 Q3-05 Q4-05 Q1-06 Q2-06 Q3-06 Q4-06 Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Kroger ID Supermarket Sales Growth (ex fuel) Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 11 33 Consecutive
Slide 13: Our Growth Strategy
Our Growth Strategy Expand earnings through steady increases in identical sales together with modest growth in operating margin (ex fuel) Target annual EPS growth averaging 6% to 8% Including dividend, target a total shareholder return of ~ 8% to 10% Compare favorably to the S&P 500 returns
Slide 14: Strong Financial Performance Through Downturn
Strong Financial Performance Through Downturn 5 Year Sales Growth ($bn) 5 Year EPS Growth¹ ($) $ 2.00 $90.3 $ 1.54 $66.2 FY2006 FY2011 FY2006 FY2011 1. Represents Diluted EPS excluding extraordinary items 13
Slide 15: Attractive Cash Generation And Capital Structure
Attractive Cash Generation And Capital Structure 10 Year Net Total Debt Reduction ($bn) 10 Year Deleveraging¹ 10 Year Share Count Reduction (m) 795 2.27 x $8.5 $8.2 2.00 x 561 FY2001 FY2011 FY2001 FY2011 FY2001 FY2011 Kroger’s Strong Investment Grade Credit Rating Provides Significant Financial Flex
Slide 16: Consistent Record Of Rewarding Shareholders Through Share Repurchases And Dividends
Consistent Record Of Rewarding Shareholders Through Share Repurchases And Dividends Yearly Cash Deployment as a % of Net Income ($m) Total: $1,804 Total: $1,623 129.7% Total: $864 Total: $795 120.4% Total: $456 48.3% 50.3% 19.4% 17.1% 17.9% 21.2% 22.2% 21.5% FY2007 FY2008 FY2009 FY2010 FY2011 Divide
Slide 17: Fiscal 2012 Annual Guidance
Fiscal 2012 Annual Guidance ID supermarket sales growth (ex fuel): 3.0% to 3.5% Annual EPS: $2.28 to $2.38, which includes: Benefit of 53 rd week Lower LIFO Benefit of increased stock repurchase activity in 2011 Benefit of pension contribution Benefit from Express Scripts Rx transfers
Slide 18: Fiscal 2012 Annual Guidance
Fiscal 2012 Annual Guidance EPS growth rates by quarter: First quarter flat to slightly positive Second quarter in line with business model Third and fourth quarters stronger Sales growth starts stronger, trends down as drugs come off patent Slightly expanding non-fuel FIFO operating mar
Slide 19: Best-In-Class Retailer
Best-In-Class Retailer Significant scale with +2,400 stores in 31 states driving $90+ billion annual revenues #1 or #2 market share in 38 of our 42 major markets Proprietary consumer insights driving strong customer loyalty Outstanding positive identical store sales momentum Consistent rec
Slide 20: Forward-Looking Statements
Forward-Looking Statements The remarks contain certain forward-looking statements about the future performance of the Company. These statements are based on management’s assumptions and beliefs in light of the information currently available to it. Such statements are indicated by words or phrases s
Slide 21: Slide 21
The Kroger — TAG 4th Annual Spring Consumer Conference 2012 on 6ix