The J.m. Smucker Company · NYSE:SJM
The J.m. Smucker — CAGNY Conference 2023
86 slides from The J.m. Smucker's conference presentation, Feb 22, 2023
Slide 1: CAGNY Conference 2023
THE JM. SMUCKER Co CONFERENCE 2023
Slide 2: Mark Smucker
MARK SMUCKER Chair of the Board, President and Chief Executive Officer
Slide 3: 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 known and unknown risks and uncertainties that could cause actual results to differ materially from any future results, perf
Slide 4: Business Update and Financial Update
MARK SMUCKER TUCKER MARSHALL Chair of the Board, President Chief Financial Officer and Chief Executive Officer BUSINESS UPDATE FINANCIAL UPDATE
Slide 5: Continue Delivering Results & Growth
CONTINUE DELIVERING RESULTS & GROWTH KEY TRANSFORMATION OFFICE 2 2 GROWTH PLATFORMS INITIATIVES Uncrustables ® Increase Margins Dog Snacks & Cat Food Fund Investments For Growth Coffee Portfolio 5
Slide 6: Strong First Half Results
STRONG FIRST HALF RESULTS OUR PERFORMANCE REFLECTS: Strength of our Focus on Advancement of Iconic Brands Execution Strategic Priorities 6
Slide 7: Our Strategy
OUR STRATEGY Drive Improve Transform Nurture & Improve Prioritization Profitability & Our Portfolio Invest In Our Diversity & & Best-In-Class Cost Discipline Culture Foster Inclusion Execution & Equity 7
Slide 8: Brand Growth Flywheel
BRAND GROWTH FLYWHEEL CULTURALLY RELEVANT MARKETING FUNDAMENTAL INTELLIGENT SALES MEDIA EXECUTION BRAND GROWTH FLYWHEEL STRATEGIC INNOVATION CUSTOMER & DESIGN PARTNERSHIPS REVENUE OPTIMIZATION 8
Slide 9: Improving Profitability & Cost Discipline
IMPROVING PROFITABILITY & COST DISCIPLINE OUR TRANSFORMATION OFFICE EFFORTS ARE EXPECTED TO ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ CENTERED AROUND SUPPORT LONG-TERM CONTINUOUS IMPROVEMENT PROFITABILITY TARGETS FOCUSED ON VALUE IMPROVE CREATION PROFIT MA
Slide 10: Our Portfolio
TRANSFORM OUR PORTFOLIO #1 #2 IN DOG IN CAT SNACKS FOOD SOURCE: SMUCKER INTERNAL IRI MULTI-OUTLET SHARE REPORT 52 WEEKS ENDED JANUARY 29, 2023. 10
Slide 11: Investing in Culture & Diversity
INVESTING IN CULTURE & DIVERSITY Competitive Maximizes Progress at Advantage Performance All Levels 11
Slide 12: A Focused Portfolio
A FOCUSED PORTFOLIO FY20 FY23 PRO FORMA* % Net Sales % Net Sales Other Other Divested Dog Food Businesses Frozen Handheld Coffee Cat Food Coffee Frozen Pet Handheld Snacks Cat Food Spreads1 Pet Spreads1 Snacks *ADJUSTED TO REMOVE NET SALES OF PRODUCTS INCLUDED IN THE RECENTLY ANNOUNCED DIVESTITURE O
Slide 13: U.S. Retail Pet Foods
U.S. RETAIL PET FOODS OTHER BUSINESSES DIVESTED 2% $2.8B FY22 NET SALES DOG FOOD SNACKS 31% 33% CAT FOOD 32% NOTE: AMOUNTS MAY NOT ADD DUE TO ROUNDING. 13
Slide 14: Future Pet Portfolio
FUTURE PET PORTFOLIO PET CATEGORIES as a % of Net Sales MARGIN PROFILE 33% 40% Pet Snacks Cat Food 33% Dog Food 60% 33% PET DIVESTITURE* WILL IMPROVE MARGIN & MIX Current Pet Portfolio Pet Portfolio After Divestiture* *RELATED TO THE RECENTLY ANNOUNCED DIVESTITURE OF SEVERAL PET BRANDS, SUBJECT TO C
Slide 15: The Strategic Importance of Dog Snacks
THE STRATEGIC IMPORTANCE OF DOG SNACKS MARKET LEADER WITH 23% DOLLAR SHARE DELIVERS SIGNIFICANTLY HIGHER MARGINS THAN PET FOOD YOY NET SALES GROWTH IN 16 OF LAST 18 QUARTERS EXPECT DOG SNACKS TO GROW TO $1B IN NET SALES IN THE NEXT SEVERAL YEARS SOURCE: SMUCKER INTERNAL IRI MULTI-OUTLET SHARE REPORT
Slide 16: Growth in Dog Snacks
GROWTH IN DOG SNACKS EXPAND LEADERSHIP IN CONTINUE BUILDING A BISCUITS AND SOFT & MEANINGFUL PRESENCE IN CHEWY SEGMENTS LONG-LASTING CHEWS Breakthrough Expanding Evolving & Igniting Marketing & Seasons & Optimizing Premium Engagement Occasions Assortment Innovation 16
Slide 17: Strong Brand Momentum
STRONG BRAND MOMENTUM MILK-BONE WILL LEAD OUR GROWTH ® IN DOG SNACKS #1 2X +18% DOLLAR CATEGORY CONSUMER SHARE GROWTH RATE TAKEAWAY SOURCE: SMUCKER INTERNAL MULTI-OUTLET SHARE REPORT 52 WEEKS ENDED JANUARY 29, 2023. 17
Slide 18: Growth in Special Occasions
GROWTH IN SPECIAL OCCASIONS Benefit from Seasonal innovation humanization of pets plays a key role 18
Slide 19: Cat Food Momentum
CAT FOOD MOMENTUM Net Sales growth last 19 of 20 quarters Meow Mix outpacing category growth ® Leverage momentum in dry cat food to drive growth in wet food SOURCE: SMUCKER INTERNAL MULTI-OUTLET SHARE REPORT 52 WEEKS ENDED JANUARY 29, 2023. 19
Slide 20: Focus on Dry Cat Food
FOCUS ON DRY CAT FOOD LEVERAGING CURRENT MOMENTUM ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ We will maintain strong distribution, satisfy existing consumers and attract new ones 20
Slide 21: Unlocking Growth in Wet
UNLOCKING GROWTH IN WET 20% GROWTH 50% OF OPPORTUNITY OF CATEGORY MEOW MIX ® DOLLAR SALES SALES ARE WET ARE WET SOURCE: SMUCKER INTERNAL MULTI-OUTLET SHARE REPORT 52 WEEKS ENDED JANUARY 29, 2023. 21
Slide 22: Revitalizing Wet Cat Food
REVITALIZING WET CAT FOOD LAUNCHED ENHANCED WET OFFERINGS WITH NEW PACKAGING AND ADVERTISING CAMPAIGN 22
Slide 23: U.S. Retail Coffee
U.S. RETAIL COFFEE $2.5B INSTANT 8% FY22 NET SALES PREMIUM 17% MAINSTREAM 46% ONE CUP 30% NOTE: AMOUNTS MAY NOT ADD DUE TO ROUNDING. 23
Slide 24: Coffee Strength
COFFEE STRENGTH #1 U.S. BRANDED AT-HOME COFFEE MANUFACTURER 3 of TOP 8 26% Share of Market coffee brands SOURCE: SMUCKER INTERNAL MULTI-OUTLET SHARE REPORT 52 WEEKS ENDED JANUARY 29, 2023. 24
Slide 25: Successful Portfolio Shift
SUCCESSFUL PORTFOLIO SHIFT KEY DRIVERS OF GROWTH K-CUP PODS ® Continue expansion into faster-growing formats 25
Slide 26: Opportunity to Increase Dual Users
O P P O R T U N I T Y TO I N C R E A S E D UA L U S E R S* G R O W T H P OT E N T I A L IN COLD COFFEE *INDIVIDUALS WHO BUY AT DUNKIN’ RESTAURANTS AND FOR AT-HOME OCCASIONS. ® 26
Slide 27: Expanding Dunkin' Cold
EXPANDING DUNKIN’ COLD ® OFFERING NEW FORMATS ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ Single Serve & Concentrates M O R E IN N O VATIO N TO CO M E 27
Slide 28: Platform for Growth
PLATFORM FOR GROWTH Expect annual net sales $1 BILLION of in the next 4 years 28
Slide 29: One of Our Fastest Growing Brands
O N E O F O U R FA S T E S T GROWING BRANDS Expect annual net sales $300M of in the next 2 years 29
Slide 30: Café Bustelo Momentum
CAFÉ BUSTELO MOMENTUM ® CONSUMER TAKEAWAY +24% LAST YEAR ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ Fastest growing brand in the at-home coffee category 8th #1 #1 Largest Brand Espresso Latin in the Category Coffee Coffee SOURCE: SMUCKER INTERNAL MULTI-OUTLET SHARE REPORT 52 WEEKS ENDED JANUAR
Slide 31: An Iconic Coffee Brand
AN ICONIC COFFEE BRAND POSITIVE Grew the most REACTION from DOLLAR SHARE brand reinvigoration last year SOURCE: SMUCKER INTERNAL MULTI-OUTLET SHARE REPORT 52 WEEKS ENDED JANUARY 29, 2023. 31
Slide 32: Growth Through Varieties
GROWTH THROUGH VARIETIES A D A R K E R , S M O OT H E R E X P E R I E N C E #1 #1 Dark Roast Fastest Growing Canister Dark Roast Canister DOLLAR SALES & MILLENNIALS & DOLLAR SHARE G E N E R AT I O N X SOURCE: SMUCKER INTERNAL MULTI-OUTLET SHARE REPORT 52 WEEKS ENDED JANUARY 29, 2023. 32
Slide 33: K-Cup Pods
K-CUP PODS ® C O N T I N U E S TO H AV E M O M E N T U M Expect annual net sales $1 BILLION of in next 5 years 33
Slide 34: Expanding to New Formats
EXPANDING TO NEW FORMATS Opportunities in liquid concentrates, multi-serve, and ready-to-drink Investments in Establish Explore manufacturing a dedicated portfolio & partnerships team additions 34
Slide 35: Leveraging Our Powerful Brands
LEVERAGING OUR POWERFUL BRANDS CONTINUE TO BENEFIT FROM EMERGING TRENDS ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ Deep expertise in coffee sourcing, roasting, and category advisership 35
Slide 36: U.S. Retail Consumer Foods
U.S. RETAIL CONSUMER FOODS OTHER $1.7B TOPPINGS 2% DIVESTED & SYRUPS 4% BUSINESSES FY22 NET SALES FRUIT SPREADS PEANUT BUTTER 18% 44% FROZEN HANDHELD 25% NOTE: AMOUNTS MAY NOT ADD DUE TO ROUNDING. 36
Slide 37: Uncrustables Growth
UNCRUSTABLES GROWTH ® $650M+ $511M 15% 10-YEAR CAGR ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ON TRACK TO EXCEED $220M $650M NET SALES IN FY23 $126M $94M $12M FY01 FY07 FY12 FY17 FY22 FY23E 37
Slide 38: A Category Leader
A CATEGORY LEADER #1 2 of the top 9 SKUs #1 in households in frozen category with kids 10% share of the category & fastest growing #1 velocity #1 repeat rate growth rate SOURCE: SMUCKER INTERNAL MULTI-OUTLET SHARE REPORT 13 AND 52 WEEKS ENDED JANUARY 29, 2023. 38
Slide 39: Fueling Future Growth
FUELING FUTURE UNLOCKING GROWTH GROWTH IN WET Expect to grow to $1 BILLION in annual net sales by FY26 MANUFACTURING EXPANSION ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ Scottsville | Longmont | McCalla 2019 2022 2025 39
Slide 40: Shifting the Portfolio
SHIFTING THE PORTFOLIO TODAY FUTURE % Net Sales % Net Sales SUPPORTING MARGIN EXPANSION 40
Slide 41: All SKUs Are Back on Shelf
ALL SKU’S ARE BACK ON SHELF #1 position Leader in in the category HOUSEHOLD PENETRATION SOURCE: SMUCKER INTERNAL MULTI-OUTLET SHARE REPORT 13 WEEKS ENDED JANUARY 29, 2023. 41
Slide 42: The Strength of Jif
THE STRENGTH OF JIF ® ® EXPECT CONTINUED GROWTH IN THE LONG-TERM ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ Plan to drive dollars per ounce through innovation & net revenue optimization 42
Slide 43: Fruit Spreads
FRUIT SPREADS REDUCED COMPLEXITY & OPTIMIZED SKU COUNT Dollar share leader Clean label & sugar-free options Brand equity investments SOURCE: SMUCKER INTERNAL MULTI-OUTLET SHARE REPORT 52 WEEKS ENDED JANUARY 29, 2023. 43
Slide 44: Meeting Consumer Needs
MEETING CONSUMER NEEDS CONVENIENT AND ON-THE-GO SQUEEZABLE FORMATS ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ Continue to expand usage occasions and consumer reach 44
Slide 45: International & Away From Home
INTERNATIONAL & AWAY FROM HOME $1.0B OTHER INT’L FY22 NET SALES 9% AFH – BEVERAGE CANADA 20% 40% AFH – FOOD & PET 32% 4 5 NOTE: AMOUNTS MAY NOT ADD DUE TO ROUNDING. 45
Slide 46: Continued Focus on Uncrustables, Coffee, & Portion Control
SEGMENT GROWTH DRIVERS AWAY FROM HOME INTERNATIONAL CONTINUED FOCUS LEVERAGING ON UNCRUSTABLES, COFFEE, GROWTH OPPORTUNITIES ® & PORTION CONTROL CONSISTENT WITH U.S. RETAIL Additional Expand Reach Launching In Longmont to Young Canada Early Capacity Consumers Next Fiscal Year 46
Slide 47: Guides Our Strategy
Our Vision GUIDES OUR STRATEGY Engage, delight and inspire consumers by building brands they love and leading in growing categories 47 47
Slide 48: Our Purpose
OUR PEOPLE OUR PURPOSE Feeding connections that help us thrive – life tastes better together. ENSURING ACCESS TO SUPPORTING ACCESS PROMOTING MAKING SUPPORTING A QUALITY FOOD TO EDUCATION EQUITABLE AND CONNECTIONS TO HEALTHIER PLANET ETHICAL TREATMENT COMMUNITY FOR ALL RESOURCES 48
Slide 49: Key Takeaways
KEY Transformed Increased into a Stronger Organizational Company Agility TAKEAWAYS ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ Continued Commitment to Leadership in Long-Term Communities Growth DELIVERING ON RESULTS AND EXECUTIONAL PRIORITIES Powered by Our Unique Culture 49 49 CONFIDENTIAL
Slide 50: Tucker Marshall
TUCKER MARSHALL Chief Financial Officer
Slide 51: A Strong Start to the Fiscal Year
A STRONG START TO THE FISCAL YEAR FIRST HALF RESULTS EXCEEDED EXPECTATIONS ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ Driven by positive momentum in the business 51
Slide 52: FY23 Financial Outlook
FY23 FINANCIAL OUTLOOK Provided with Q2 Earnings Release NET SALES GROWTH* ADJUSTED EPS** FREE CASH FLOW 5.5% -2 6.5% $8.35 - $8.75 $550M Comparable Basis (Mid-Point): +8% +2% vs. Prior Guidance Positioned to deliver ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ LONG-TERM GROWT
Slide 53: Fiscal 2023 Third Quarter Earnings Q&A Session
FISCAL 2023 THIRD QUARTER EARNINGS Q&A SESSION Tuesday, February 28, 2023 | 9:00 a.m. EST PARTICIPANTS MATERIALS MARK SMUCKER PRESS RELEASE, Chair of Board, President & Chief Executive Officer PRE-RECORDED REMARKS, AND SUPPORTING MATERIALS TUCKER MARSHALL Chief Financial Officer AVAILABLE AT 7:00 AM
Slide 54: Positioned for Long-Term Growth
POSITIONED FOR LONG-TERM GROWTH Strengthening our Reinvesting Delivering Financial Position in the Business Shareholder Value 54
Slide 55: Financial Priorities
FINANCIAL PRIORITIES CREATE LONG-TERM SHAREHOLDER VALUE Active & Execution to Prioritizing Maintaining Balanced Transparent Credible Highest-Return Productivity Focus Capital Communication Targets Opportunities & Cost Control Deployment 55
Slide 56: Total Shareholder Return
TOTAL SHAREHOLDER RETURN Goal: Consistent top quartile performer in food industry DELIVERING 1-Year 3-Year 5-Year LONG-TERM CAGR CAGR CAGR GROWTH AND SJM 12% 14% 7% SHAREHOLDER VALUE Peer Group Avg. 8% 9% 7% S&P Packaged Foods 2% 5% 4% S&P 500 -5% 8% 10% NOTE: DATA AS OF FEBRUARY 17, 2023. ASSUMES D
Slide 57: Long-Term Growth Targets
LONG-TERM GROWTH TARGETS NET SALES LSD ADJUSTED OPERATING INCOME MSD ADJUSTED EPS HSD TOTAL SHAREHOLDER RETURN 10+% 57
Slide 58: Our Long-Term Objectives
OUR LONG-TERM OBJECTIVES ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙A ∙ ∙ ∙steady, ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙compelling, ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙and ∙ ∙ ∙ ∙ ∙compounding ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙algorithm ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ DIVIDENDS SHARE REPURCHASE & DEBT REPAYMENT OPERATING MARGIN EXPANSION 10%+ HSD MSD LSD Net Sa
Slide 59: Net Sales
Strengthened portfolio NET SALES Projected growth in our categories Improved market share trends LOW-SINGLE-DIGIT Percentage Growth Focused growth initiatives 59
Slide 60: Drivers of Top-Line Growth
DRIVERS OF TOP-LINE GROWTH SMUCKER’S ® PET GROWTH COFFEE GROWTH CONTINUED UNCRUSTABLES ® DRIVEN BY DRIVEN BY GROWTH IN GROWTH TO $1B IN MILK-BONE® & DUNKIN’ ® & AWAY FROM ANNUAL SALES MEOW MIX ® CAFÉ BUSTELO® HOME BUSINESS 60
Slide 61: Operating Income
ADJUSTED Improved volume / mix OPERATING Stabilized supply chain INCOME Benefits from Transformation Office Productivity savings for SD&A MID-SINGLE-DIGIT Percentage Growth 61
Slide 62: Transformation Office
TRANSFORMATION OFFICE OPERATIONS SUPPLY PROCUREMENT DESIGN CHAIN TO VALUE SG&A NET REVENUE SALES MARKETING OPTIMIZATION Supports long-term growth targets, addressing stranded overhead costs, and realization of synergies 62
Slide 63: Earnings Per Share
ADJUSTED EARNINGS Expect our PER SHARE capital deployment model to DRIVE GROWTH HIGH-SINGLE-DIGIT Percentage Growth 63
Slide 64: Cash Deployment | FY21 & FY22
CASH DEPLOYMENT | FY21 & FY22 Balanced capital deployment, while ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ maintaining investment grade debt rating Capital Expenditures Debt Repayment Dividend Payments Share Repurchases $0.7B $1.1B $0.8B $0.9B Above ne
Slide 65: Balanced Capital Deployment Model
BALANCED CAPITAL DEPLOYMENT MODEL Capital Dividends & Expenditures Share Repurchases CASH FROM 50% OPERATIONS 50% Strategic Debt Investments Repayment 65
Slide 66: Capital Expenditures
CAPITAL EXPENDITURES $550M LONG-TERM $418M OBJECTIVE $369M 3.5% OF NET SALES $307M $269M NEAR TERM ELEVATION DUE TO UNCRUSTABLES ® CAPACITY EXPANSION FY19 FY20 FY21 FY22 FY23E % of NS 4.7% 3.4% 3.8% 5.2% 6.5%* *NOTE: BASED ON MIDPOINT OF FY23 NET SALES GUIDANCE PROVIDED ON NOVEMBER 21, 2022. 66
Slide 67: Long-Term Debt Maturity
LONG-TERM DEBT MATURITY 43% ($ in billions) $1.9 AVERAGE 23% COST OF DEBT $1.0 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ 3.4% 11% 23% $0.5 0% $1.0 0 - 1.5 Yr 1.5 - 3 Yr 3 - 5 Yr 5 - 10 Yr > 10 Yr 67
Slide 68: Debt Reduction
DEBT REDUCTION 4.0x 3.6x MAINTAIN 3.5x INVESTMENT GRADE DEBT RATING ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ 3.0x 2.8x 2.8x 3.0x 2.5x - 3.0x TARGET LEVERAGE 2.5x-3.0x Target Debt Leverage Ratio 2.5x 2.0x Q2 FY20 Q2 FY21 Q2 FY22 Q2 FY23 LONG-TERM 68
Slide 69: Share Repurchases
SHARE REPURCHASES $672 ($ in millions) $2.9B $495 $430 $426 $359 $305 OF SHARE $262 REPURCHASES IN LAST 10-YEARS Weighted Avg. Cost per Share | $108.33 Weighted FY12 FY13 FY14 FY16 FY17 FY21 FY22 Avg. Cost $74.51 $89.83 $100.19 $128.10 $139.14 $116.34 $131.23 per Share 69
Slide 70: Dividend Growth
DIVIDEND GROWTH 7% 10-YEAR CAGR $4.08 21 CONSECUTIVE FISCAL YEARS OF GROWTH $2.08 40-45% ADJUSTED EPS PAYOUT TARGET FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 70
Slide 71: Acquisitions
ACQUISITIONS CONTINUED ROLE IN ASSESS RESULTING REASONABLENESS OF OUR STRATEGY IMPACT TO ROIC MULTIPLES PAID 71
Slide 72: FY24 Considerations: Top-Line
FY24 CONSIDERATIONS TOP-LINE TAILWINDS HEADWINDS Lapping the sales Uncrustables growth ® impact of the Jif recall from additional capacity ® Lapping net sales from Inflationary pressures anticipated pet divestiture* impacting consumers Continued brand Supply chain momentum improvements *RELATED TO T
Slide 73: FY24 Considerations: Bottom-Line
FY24 CONSIDERATIONS BOTTOM-LINE BASE BUSINESS AFTER PET DIVESTITURE* Recovery of Jif recall impact Lapping of lost earnings from divestiture ® Volume and mix benefits ? Timing and use of transaction proceeds ? Input, labor, manufacturing & supply chain costs Net impact of stranded costs, TSA & co-pa
Slide 74: Anticipated Pet Food Divestiture
ANTICIPATED PET FOOD DIVESTITURE SUBJECT TO CLOSING CONDITIONS, INCLUDING THE RECEIPT OF REQUIRED REGULATORY APPROVALS $0.45 REPLACE 2.5x-3.0x FULL-YEAR EPS DILUTION EARNINGS MAINTAIN LEVERAGE (Before Any Benefits From Use of Proceeds THROUGH SHARE TARGET THROUGH DEBT and the Impact Of Stranded Over
Slide 75: Key Takeaways
KEY Continue to Transformed Deliver Strong into a Stronger Results Company TAKEAWAYS ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ Delivering Improve the Growth Through Product Mix of Key Platforms Pet Business LONG-TERM SUSTAINABLE GROWTH & SHAREHOLDER VALUE Commitment to Increasing Financial Shareholder Dis
Slide 76: CAGNY Conference 2023
THE JM. SMUCKER Co CONFERENCE 2023
Slide 77: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements, such as projected net sales, operating results, earnings, and cash flows that are subject to risks and uncertainties that could cause actual results to differ materially from future results expressed or implied by thos
Slide 78: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES The Company uses non-GAAP financial measures, including: net sales excluding divestitures and foreign currency exchange; adjusted gross profit; adjusted operating income; adjusted income; adjusted earnings per share; earnings before interest, taxes, depreciation, amortiza
Slide 79: Unaudited Non-GAAP Financial Measures
UNAUDITED NON-GAAP FINANCIAL MEASURES ($ in millions) Three Months Ended TTM Ended January 31, April 30, July 31, October 31, October 31, 2022 2022 2022 2022 2022 EBITDA (as adjusted) reconciliation: Net income $69.7 $202.1 $109.8 $191.1 $572.7 Income tax expense 39.9 58.1 31.3 61.8 191.1 Interest e
Slide 80: Unaudited Non-GAAP Financial Measures
UNAUDITED NON-GAAP FINANCIAL MEASURES ($ in millions) Three Months Ended TTM Ended January 31, April 30, July 31, October 31, October 31, 2021 2021 2021 2021 2021 EBITDA (as adjusted) reconciliation: Net income $261.5 $147.0 $153.9 $206.0 $768.4 Income tax expense 100.0 46.3 51.3 62.8 260.4 Interest
Slide 81: Unaudited Non-GAAP Financial Measures
UNAUDITED NON-GAAP FINANCIAL MEASURES ($ in millions) Three Months Ended TTM Ended January 31, April 30, July 31, October 31, October 31, 2020 2020 2020 2020 2020 EBITDA (as adjusted) reconciliation: Net income $187.4 $226.3 $237.0 $230.8 $881.5 Income tax expense 55.1 72.1 76.6 72.7 276.5 Interest
Slide 82: Unaudited Non-GAAP Financial Measures
UNAUDITED NON-GAAP FINANCIAL MEASURES Three Months Ended TTM Ended ($ in millions) January 31, April 30, July 31, October 31, October 31, 2019 2019 2019 2019 2019 EBITDA (as adjusted) reconciliation: Net income $121.4 $71.5 $154.6 $211.2 $558.7 Income tax expense 35.8 30.4 52.1 67.9 186.2 Interest e
Slide 83: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Company Guidance Year Ending April 30, 2023 Low High Net income per common share – assuming dilution reconciliation: Net income per common share – assuming dilution $ 6.28 $ 6.68 Change in net cumulative unallocated derivative gains and losses (A) 0.41 0.41 Amortization 1.58
Slide 84: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Company Guidance ($ in millions) Year Ending April 30, 2023 Free cash flow reconciliation: Net cash provided by operating activities $ 1,100 Additions to property, plant, and equipment (550) Free cash flow $ 550 84
Slide 85: Additional Information
ADDITIONAL INFORMATION The J.M. Smucker Co. is the owner of all trademarks and logos referenced herein, except for the following, which are used under license: Dunkin’® 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 ret
Slide 86: Additional Information
ADDITIONAL INFORMATION Aaron Broholm Vice President, Investor Relations ir.team@jmsmucker.com Phone: (330) 682-3000 Investor Relations Website: https://investors.jmsmucker.com/ 86