The Campbell's Company · NASDAQ:CPB
The Campbell's — Campbell Soup Company — Q4 2022 Earnings Presentation
48 slides from The Campbell's's earnings presentation, Sep 1, 2022
Slide 1: Q4 Fiscal 2022 Earnings Presentation
Q4 Fiscal 2022 Earnings Presentation 1
Slide 2: Rebecca Gardy, Senior Vice President Investor Relations
Rebecca Gardy Senior Vice President Investor Relations I N T RO D U C T I O N 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 Key Messages and Q4 FY22 Highlights Division Highlights Q4 FY22 and Full-year FY22 Financial Results FY23 Outlook Summary Q&A 4
Slide 5: Mark Clouse, President & Chief Executive Officer
Mark Clouse President & Chief Executive Officer I N T RO D U C T I O N 5
Slide 6: Key Messages
Key Messages • Delivered full-year adjusted EPS* at the high end of our original FY22 guidance range, despite volatile environment • Strong execution through improved supply chain performance • Effective revenue management to counter inflation • Solid foundation and momentum will enable us to unlock
Slide 7: Key Financial Highlights
CONTINUING OPERATIONS Change vs. Prior Year except as noted Key Financial Highlights Q4 FY22 Net Sales Adj. EBIT* Adj. EPS* Consumption1 $2.0B $269M $0.56 +8% Organic Net Sales* +5% +8% +21% vs. 3YA +6% FY22 Net Sales Adj. EBIT* Adj. EPS* Consumption2 $8.6B $1.3B $2.85 +4% Organic Net Sales* +2% (4)
Slide 8: Well-positioned for Today and Tomorrow
Well-positioned for Today and Tomorrow Portfolio Innovation • Advantaged brands in resilient • Innovation drove a ~2% growth rate categories, strengthening/growing during across both divisions economic challenges • Strong FY23 pipeline delivering against • Leadership share1 position in most of our i
Slide 9: Most Key Brands Q4 Share Remained at or above FY19 levels
Most Key Brands Q4 Share Remained at or above FY19 levels +1 pt. +1 pt. +0.4 pts. +3 pts. +3 pts. vs. 3YA vs. 3YA vs. 3YA vs. 3YA vs. 3YA +1 pt. +2 pts. +1 pt. +1 pt. +0.3 pts. vs. 3YA vs. 3YA vs. 3YA vs. 3YA vs. 3YA Source: Total IRI US MULO $ Consumption latest 13 weeks ending 7/31/2022 9
Slide 10: Meals & Beverages: Key Highlights
CONTINUING OPERATIONS Meals & Beverages: Key Highlights Q4 FY22 Growth vs. PY Organic Net Sales* +7% +22% vs. 3YA Consumption1 +8% *See Non-GAAP reconciliation 1 Total IRI US MULO $ Consumption latest 13 weeks ending 7/31/2022 10
Slide 11: Campbell is Advantaged as Consumers Turn to Shelf-stable Simple Meals
Campbell is Advantaged as Consumers Turn to Shelf-stable Simple Meals Q4 FY22: Volume Share vs. PY Shelf Stable Simple Meals Refrigerated Simple Meals Frozen Simple Meals All Households Millenials Source: IRI Scan Panel, Total US All Outlets, 13 weeks ending 7/31/22 vs. PY, Volume share among Total
Slide 12: Some Private Label Pressure, Offset by Share and Category Strength
Some Private Label Pressure, Offset by Share and Category Strength Wet Soup Condensed Total Share $ Consumption Total Share $ Consumption of Category Growth of Category Growth Q4 FY22 Q4 FY22 Q4 FY22 Q4 FY22 12% 12% 9% 57% 8% 17% 43% 83% Campbell's Wet Soup Competitors Category Campbell's Campbell's
Slide 13: Meals & Beverages: Win in Soup 2.0
Meals & Beverages: Win in Soup 2.0 Q4 FY22 Condensed Icons Chunky Cans Added 1M+ buyers2 vs. 3YA +4.1 pts. +29.6% +1.3 pts. +20.3% Q4 dollar share Q4 consumption Q4 dollar share Q4 consumption vs. PY1 vs. PY1 vs. PY1 vs. PY1 +5.7 pts. +8.6% +2.3 pts. +26.8% Q4 dollar share Unit change vs. Q4 dollar
Slide 14: Relevant Timely Innovation to Meet Growing Shelf-stable Demand
Relevant Timely Innovation to Meet Growing Shelf-stable Demand Recent Innovation 14
Slide 15: Swanson's Differentiation Key to Winning in Broth
Swanson’s Differentiation Key to Winning in Broth Quality + Convenience FY 23 Focus Areas+ Value New Formula Full Range of Quick and Low-cost Meal Solutions Price/Pack Options Superior to Private Label 15
Slide 16: Meals & Beverages: Building a $1B Sauce Business
Meals & Beverages: Building a $1B Sauce Business Q4 FY22 Prego Pace #1 in Italian +12.4% +4.0 pts. +0.4 pts. Category Q4 consumption Q4 repeat rate Q4 dollar share 39th consecutive vs. PY2 vs. 3YA3 vs. PY2 month1 +14.5% Q4 dollar consumption vs. PY2 +5.9 pts. Q4 repeat rate vs. 3YA3 1 Total IRI US M
Slide 17: Continuing to Fuel Quick Scratch Cooking Behaviors
Continuing to Fuel Quick Scratch Cooking Behaviors FY23 Innovation Introducing Campbell’s FlavorUp!TM Re-introducing Campbell’s Cooking Sauces ✓ Restaurant Quality Flavor: Only 1 tablespoon adds complex flavor to a dish ✓ Modernized Look & Feel: New design to appeal to today’s busy cook ✓ Time & Ste
Slide 18: Snacks: Key Highlights
CONTINUING OPERATIONS Snacks: Key Highlights Q4 FY22 Growth vs. PY Organic Net Sales* +6% +20% vs. 3YA Consumption1 +8% Completed Value Capture *See Non-GAAP reconciliation 1 Total IRI US MULO $ Consumption latest 13 weeks ending 7/31/2022 18
Slide 19: Snacks Power Brands Consumption
Snacks Power Brands Consumption1: +11% vs. PY, +26% vs. 3YA Q4 FY22 +10% +27% +11% +37% +10% +29% +7% +10% vs. PY vs. 3YA vs. PY vs. 3YA vs. PY vs. 3YA vs. PY vs. 3YA +21% +29% +27% +44% (2)% +28% +8% +25% vs. PY vs. 3YA vs. PY vs. 3YA vs. PY vs. 3YA vs. PY vs. 3YA 1 Total IRI US MULO $ Consumption
Slide 20: Recovering Share in Snacks and Winning Critical Unit Share
Recovering Share in Snacks and Winning Critical Unit Share Improved unit share driven by supply chain execution which Our Power Brands within Salty Snacks* had noticeably higher enabled reintroduction of promotional activity unit change2 in Q4 than our major competitors & PL Q3 FY22 Q4 FY22 Sequenti
Slide 21: Goldfish Limited Time Offer Drumbeat Continues
Goldfish Limited Time Offer Drumbeat Continues Summer 2021 Fall 2022 Summer 2022 Fall 2022 60% incremental to Goldfish1 #1 velocity innovation in category during launch2 1 IRI, All Outlets, NBD Volume, Frank’s & Jalapeno Popper, 26 weeks, w/e 10/31/21, did not purchase in prior 27 weeks; 2 IRI, MULO
Slide 22: Looking Forward
Looking Forward • We enter fiscal year 2023 with strengthened fundamentals, a powerful brand portfolio in advantaged categories and the agility to navigate continued inflation • We remain focused on what we can control, executing our strategy to modernize our core and continuing to build our innovat
Slide 23: Mick Beekhuizen, EVP & Chief Financial Officer
Mick Beekhuizen EVP & Chief Financial Officer C FO P E RS P EC T I V E 23
Slide 24: Q4 FY22 Key Messages
Q4 FY22 Key Messages • Strong performance during Q4 FY22 across all three key metrics: Net Sales, Adjusted EBIT* and Adjusted EPS* • Delivered FY22 Adjusted EPS at the high end of the original guidance range • Strengthened supply chain execution throughout the year • Significant progress regarding i
Slide 25: Financial Summary
CONTINUING OPERATIONS ($ MILLIONS, EXCEPT PER SHARE) Financial Summary Q4 Change vs. PY Full-year Change vs. PY FY22 $ % FY22 $ % Net Sales $1,987 $114 6% $8,562 $86 1% Organic Net Sales Growth* 6% 2% Adjusted EBIT* $269 $13 5% $1,297 $(59) (4)% Adjusted EBIT Margin* 13.5% (20) bps 15.1% (90) bps Ad
Slide 26: Q4 FY22 Net Sales Bridge
CONTINUING OPERATIONS ($ MILLIONS) Q4 FY22 Net Sales Bridge Net Sales growth reflects inflation-driven pricing partially offset by volume declines and increased promotional spending +6% +14 pts (3) pts +6% - - $1,987 $1,873 (4) pts Q4 FY21 Net Volume / Mix Price & Sales Promotional Q4 FY22 Divestitu
Slide 27: Q4 FY22 Adjusted Gross Margin % Bridge
CONTINUING OPERATIONS Q4 FY22 Adjusted Gross Margin %* Bridge Inflation-driven pricing combined with productivity improvements and cost savings offset inflation / other and unfavorable volume / mix +840 bps (810) bps +40 bps 30.9% (170) bps +150 bps +30 bps 31.3% Q4 FY21 Volume / Mix 1 Net Price Inf
Slide 28: Mitigating Accelerating Core Inflation
Mitigating Accelerating Core Inflation NET PRICING CORE INFLATION RATE 11% 11% 15% 15% 7% 6% 11% 9% 2% 6% Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 FY22 • Pricing and Trade Optimization • Supply Chain Productivity Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 FY22 • Cost Savings Initiatives • Manage Discretionary Spending
Slide 29: Other Operating Items
CONTINUING OPERATIONS ($ MILLIONS) Other Operating Items ADJUSTED MARKETING & SELLING EXPENSES* ADJUSTED ADMINISTRATIVE EXPENSES* +10% $174 $178 $153 A&C (3)% $139 vs. PY Q4 FY21 Q4 FY22 Q4 FY21 Q4 FY22 *See Non-GAAP reconciliation 29
Slide 30: Q4 FY22 Adjusted EBIT Bridge
CONTINUING OPERATIONS ($ MILLIONS) Q4 FY22 Adjusted EBIT* Bridge Adjusted EBIT increased 5% in the quarter primarily due to an 8% or $44 million increase in Adjusted Gross Margin +5% $76 $(4) $(14) $(13) $269 $256 $(32) Q4 FY21 Sales Volume Adjusted Gross Margin Adjusted Marketing & Adjusted Adjuste
Slide 31: Q4 FY22 Adjusted EPS Bridge
CONTINUING OPERATIONS Q4 FY22 Adjusted EPS* Bridge Higher adjusted EBIT leading driver of 8% increase in adjusted EPS +8% $0.03 $0.01 - - $0.56 $0.52 Q4 FY21 Adjusted EBIT Interest Adjusted Taxes Share Count Q4 FY22 *See Non-GAAP reconciliations for all adjusted financial measures presented 31
Slide 32: Q4 FY22 Meals & Beverages Segment Results
($ MILLIONS) Q4 FY22 Meals & Beverages Segment Results NET SALES & OPERATING EARNINGS ORGANIC GROWTH RATE* +7% $935 $878 +18% $137 $161 Q4 FY21 Q4 FY22 Q4 FY21 Q4 FY22 *See Non-GAAP reconciliation 32
Slide 33: Q4 FY22 Snacks Segment Results
($ MILLIONS) Q4 FY22 Snacks Segment Results NET SALES & OPERATING EARNINGS ORGANIC GROWTH RATE* +6% $1,052 $995 +3% $137 $141 Q4 FY21 Q4 FY22 Q4 FY21 Q4 FY22 *See Non-GAAP reconciliation 33
Slide 34: Cash Flow
TOTAL COMPANY ($ MILLIONS) Cash Flow Strong FY22 Cash Flow generation with over $600 million returned to shareholders FY21 FY22 Net Cash Flows from Operations $1,035 $1,181 of which changes in working capital $(289) ($41) Net Cash Flows from Investing Activities $(158) $(230) of which capital expend
Slide 35: FY23 Guidance
CONTINUING OPERATIONS FY23 Guidance FY23 Assumptions ($ MILLIONS, FY22 FY23 EXCEPT PER SHARE) • Core inflation in the low-teens range Results Guidance1 • ~3% productivity improvements Net Sales $8,562 +4% to +6% • ~$60 million of cost savings Organic Net Sales +4% to +6% • Interest expense of ~$190
Slide 36: Summary
Summary • Solid fourth quarter and full-year results despite a volatile operating environment • Delivered full-year adjusted EPS at the high end of our original guidance range • Executed with agility, an improved supply chain, effective revenue management and a strong, advantaged brand portfolio • S
Slide 37: Q&A Forum
Q&A Forum Mark Clouse Mick Beekhuizen President & Chief Executive Officer EVP & Chief Financial Officer 37
Slide 38: Appendix
Connecting people through food they love. Appendix 38
Slide 39: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions) Fourth Quarter % Change Net Sales, Impact of Organic Net Sales, Organic July 31, 2022 As Reported Currency Net Sales As Reported Net Sales Meals & Beverages $ 935 $ 5 $ 940 6% 7% Snacks 1,052 - 1,052 6% 6% Tota
Slide 40: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions) Twelve Months % Change Net Sales, Impact of Organic Net Sales, Organic July 31, 2022 As Reported Currency Net Sales As Reported Net Sales Meals & Beverages $ 4,607 $ (2) $ 4,605 0% 1% Snacks 3,955 - 3,955 3% 3%
Slide 41: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions, except per share amounts) Fourth Quarter EBIT EBIT Margin % Earnings Diluted EPS* 2022 – As Reported $ 170 8.6% $ 96 $ 0.32 Add: Restructuring charges, implementation costs and other related costs 16 12 0.04 Ad
Slide 42: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions, except per share amounts) Twelve Months EBIT EBIT Margin % Earnings Diluted EPS* 2022 – As Reported $ 1,163 13.6% $ 757 $ 2.51 Add: Restructuring charges, implementation costs and other related costs 31 24 0.08
Slide 43: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions) Fourth Quarter Gross Margin GM % EBT Tax Tax Rate 2022 – As Reported $ 571 28.7% $ 125 $ 29 23.2% Add: Restructuring charges, implementation costs and other related costs - 16 4 Add: Pension and postretirement
Slide 44: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions) Twelve Months Net Interest Gross Margin GM % Expense EBT Tax Tax Rate 2022 – As Reported $ 2,627 30.7% $ 188 $ 975 $ 218 22.4% Add: Restructuring charges, implementation costs and other related costs 5 - 31 7 A
Slide 45: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions) Adjusted EBIT Impacts from Sales Volume and Adjusted Gross Margin Rate Fourth Quarter 2022 – Change in Net Sales Attributable to Volume $ (102) Multiplied by: 2021 – Adjusted Gross Margin % 30.9% Adjusted EBIT
Slide 46: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions) Fourth Quarter Administrative R&D Expenses Expenses Total 2022 – As Reported $ 163 $ 23 $ 186 Deduct: Restructuring charges, implementation costs and other related costs (10) - (10) 2022 – Adjusted $ 153 $ 23 $
Slide 47: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions) Fourth Quarter Marketing & Other Expenses / Selling Expenses (Income) 2022 – As Reported $ 179 $ 31 Deduct: Restructuring charges, implementation costs and other related costs (1) - Deduct: Pension and postreti
Slide 48: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations ($ millions, except per share amounts) Fourth Quarter – Adjusted Diluted EPS Impact from Adjusted EBIT EBIT 2022 – Adjusted $ 269 2021 – Adjusted 256 $ Change $ 13 Deduct: 2021 Adjusted tax rate impact on EBIT (3) Impact to
Campbell Soup Company — Q4 2022 Earnings Presentation on 6ix