Brown Forman Inc · NYSE:BF.A
Brown Forman — Q3 2021 Earnings Presentation
18 slides from Brown Forman's earnings presentation, Mar 3, 2021
Slide 1: Nine Month's Results January 31, 2021
BROWN-FORMAN NINE MONTH’S RESULTS JANUARY 31, 2021 March 3, 2021
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains statements, estimates, and projections that are “forward-looking statements” as defined under U.S. federal securities laws. Words such as “aim,” “anticipate,” “aspire,” “believe,” “can,” “continue,” “could,” “envision,” “estimate,” “expect,” “exp
Slide 3: Continuous Long-Term Succession Planning
Continuous Long-Term Succession Planning Geo. Garvin Brown IV Campbell P. Brown 3
Slide 4: Spirits Continue to Take Share
Spirits Continue to Take Share Resilience from Both Beer and Wine 45% 41% 39% 38% 35% 30% 23% 21% 20% 2% 2% 2% Beer Wine RTD's Spirits CY10 CY15 CY19 Source: IWSR value data 4 4
Slide 5: Attractive Business Model
Attractive Business Model Operating Margin* Return on Average Invested Capital (ROIC)* 40% 25% 20% 30% 15% 20% 10% 10% 5% —% —% FY16 FY20 FY16 FY20 Brown-Forman S&P 500 Consumer Staples Brown-Forman S&P 500 Consumer Staples * See appendix for non-GAAP to GAAP reconciliations, definitions, and additi
Slide 6: Super-Premium Brands
Super-Premium Brands @ sROWN-FORMAN ®) WOODFORD RESERVE
Slide 7: Convenience & Mixability
Convenience & Mixability @ sROWN-FORMAN i — > LEMONADE , JACK APPLE ; : l CRANBERRY
Slide 8: Year-to-Date Fiscal 2021 Highlights
Year-to-Date Fiscal 2021 Highlights Net Sales Gross Margin Operating Income & Diluted EPS • Underlying1 net sales grew 2% (flat reported) • Declined 280bps • Underlying1 operating income grew 3% (+10% • Key drivers: reported) ◦ Higher input costs ◦ Developed Markets (U.S. & International) ◦ A&P phas
Slide 9: Resilient Underlying Net Sales Growth
Resilient Underlying Net Sales Growth YTD20 Change YTD21 Change U.S. 6% U.S. 7% Developed Developed 2% 7% International International Emerging 6% Emerging 1% Travel Retail -3% Travel Retail -54% Note - Change versus prior-year period See appendix for non-GAAP to GAAP reconciliations, definitions, an
Slide 10: Year-to-Date Fiscal 2021 Gross Margin Declined 280bps
Year-to-Date Fiscal 2021 Gross Margin's Declined 280bps Due primarily to higher input costs, lower fixed cost absorption, and mix shifts 63.1% (0.6)% 0.1% 60.3% (2.1)% (0.2)% YTD20 Price/Mix Cost/Mix Acquisition & Foreign YTD21 Divestiture Exchange 10
Slide 11: Resilient Year-to-Date Fiscal 2021 Results Amidst Continued Uncertainty
Resilient Year-to-Date Fiscal 2021 Results Amidst Continued Uncertainty Reported Acquisitions Foreign Estimated Underlying Change & Divestitures Exchange Net Change In Change (%) (+/-) Impact Distributor (%) (+/-) Inventories (+/-) Net Sales —% —% —% 3% 2% Gross Profit -5% —% —% 3% -1% Advertising -
Slide 12: Fiscal Year 2021 Outlook
Fiscal Year 2021 Outlook • Uncertainty and low visibility of the timing of recovery remain • Business and financial fundamentals remain strong • The Company is optimistic for the remainder of fiscal year 2021 and beyond this fiscal year 12
Slide 13: Appendix
Appendix 13
Slide 14: Non-GAAP Reconciliation
Non-GAAP Reconciliation We use certain financial measures in this presentation that are not measures of financial performance under U.S. GAAP. These non-GAAP measures, defined below, should be viewed as supplements to (not substitutes for) our results of operations and other measures reported under
Slide 15: Definitions
Definitions From time to time, to explain our results of operations or to highlight trends and uncertainties affecting our business, we aggregate markets according to stage of economic development as defined by the International Monetary Fund (IMF), and we aggregate brands by spirits category. Below
Slide 16: Definitions
Definitions Other Metrics. • “Depletions.” We generally record revenues when we ship our products to our customers. “Depletions” is a term commonly used in the beverage alcohol industry to describe volume. Depending on the context, “depletions” means either (a) our shipments directly to retail or wh
Slide 17: Reconciliation – YTD Fiscal 2021 and 2020 Net Sales Growth by Geographic Area
Reconciliation – YTD Fiscal 2021 and 2020 Net Sales Growth by Geographic Area* Nine months ended January 31, 2021 Estimated Net Acquisitions & Foreign Exchange Geographic Area Reported Change in Distributor Underlying Divestitures (+/-) (+/-) Inventories (+/-) United States 3% —% —% 4% 7% Developed
Slide 18: Reconciliation – Non-GAAP Adjusted Operating Margin & ROIC
Reconciliation – Non-GAAP Adjusted Operating Margin & ROIC* Fiscal year ended April 30, 2016 Reported Less: Adjustment** Adjusted Operating Margin 50.4% 15.7% 34.7% ROIC* 34.1% 11.1% 23.0% *See Non-GAAP Reconciliation above for ROIC definition **Operating margin and ROIC for fiscal 2016 were adjuste