Hormel Foods Corporation · NYSE:HRL
Hormel Foods — Q3 2022 Earnings Presentation
21 slides from Hormel Foods's earnings presentation, Sep 1, 2022
Slide 1: Supplemental Information Third Quarter Fiscal 2022
SUPPLEMENTAL INFORMATION Third Quarter Fiscal 2022 APPLEGATE FARMS, LLC CELEBRATED NATIONAL HOT DOG DAY BY GIVING AWAY THOUSANDS OF ITS APPLEGATE NATURALS® DO GOOD DOG™ HOT DOGS – THE FIRST NATIONALLY AVAILABLE HOT DOG MADE WITH BEEF RAISED ON VERIFIED REGENERATIVE U.S. GRASSLANDS 1
Slide 2: Disclaimers
Third Quarter Disclaimers DISCLAIMERS Fiscal 2022 Forward-Looking Statements This presentation contains “forward-looking” information within the meaning of the federal securities laws. The “forward-looking” information may include statements concerning the company’s outlook for the future as well as
Slide 3: Continuing to Deliver on Our ESG Commitments
ESG Third Quarter UPDATE Fiscal 2022 Continuing to Deliver on Our ESG Commitments Launched our 16th Annual Global Impact Report* Ranked #15 on Top 50 Best Companies to Sell For “For over 130 years, we’ve been making a difference, with our people, in our communities and with our products. We do this
Slide 4: Supporting Our Safety First Cultural Belief
EMPLOYEE Third Quarter SAFETY Fiscal 2022 Supporting Our Safety First Cultural Belief Regular assessments and training to ensure safe practices companywide Approximately More than 1,000 Safety Assessments* 15,000 Team Members Performed Each Month Attend Safety Training Monthly* More than Approximate
Slide 5: Making Progress on Our Six Strategic Priorities
SIX STRATEGIC Third Quarter PRIORITIES Fiscal 2022 Making Progress on Our Six Strategic Priorities Expand leadership Protect and grow Aggressively develop in foodservice our core brands our global presence ▪ U.S. foodservice channel net sales +14% in the ▪ U.S. retail channel net sales +4% in the th
Slide 6: We Announced Our GoFWD Initiative
GoFWD Third Quarter INITIATIVE Fiscal 2022 We Announced Our GoFWD Initiative The next step in our evolution as a global branded food company New Strategic Operating Model Strategic Rationale • Elevates our clear strategic growth priorities: consumer-centric retail and customer-solution-oriented food
Slide 7: Key Messages
KEY Third Quarter MESSAGES Fiscal 2022 Key Messages • We delivered record sales and double-digit operating income growth in the third quarter of fiscal 2022. • We increased our full year net sales guidance range and lowered our full year diluted earnings per share guidance range. • We announced the
Slide 8: Third Quarter Business Highlights
BUSINESS Third Quarter HIGHLIGHTS Fiscal 2022 Third Quarter Business Highlights • Achieved 7th consecutive quarter of record net sales, with net sales up 6% and organic net sales* up 3% • Delivered 4th consecutive quarter of earnings growth and drove margin improvement compared to last year • Overca
Slide 9: Third Quarter Financial Metrics
FINANCIAL Third Quarter METRICS Fiscal 2022 Third Quarter Financial Metrics We delivered record sales and double-digit diluted EPS growth Volume Net Sales Diluted EPS -9% $3.03B $0.40 +6% +25% 1.18B 1.07B $2.86B $0.32 Q3 Q2 2021 FY21 Q3 Q2 2022 FY22 Q3 2021 Q2 FY21 Q3 2022 Q2 FY22 Q3 2021 Q2 FY21 Q3
Slide 10: Quarterly Organic Net Sales Growth
ORGANIC NET Third Quarter SALES GROWTH Fiscal 2022 Quarterly Organic Net Sales* Growth Our brands remain healthy and continue to generate growth Brands Driving Organic Net Sales* Growth 32% 14% 13% 10% 3% Q3 2021 Q4 2021** Q1 2022 Q2 2022 Q3 2022 *Non-GAAP financial measure. See appendix to this pre
Slide 11: Refrigerated Foods
REFRIGERATED Third Quarter FOODS RESULTS Fiscal 2022 Refrigerated Foods Value-added earnings growth more than offset higher costs, lower commodity profits Segment Results Business Highlights Q3 • Net sales increased due to continued strong results from the Refrigerated Foods YoY Percent Change (%) f
Slide 12: Grocery Products
GROCERY PRODUCTS Third Quarter RESULTS Fiscal 2022 Grocery Products Top-line growth and Planters® contribution offset by inflationary pressures Segment Results Business Highlights Q3 • Volume and sales increased significantly, led by strong demand Grocery Products YoY Percent Change (%) across the n
Slide 13: Jennie-O Turkey Store
JENNIE-O TURKEY Third Quarter STORE RESULTS Fiscal 2022 Jennie-O Turkey Store Delivering outstanding growth despite challenges related to HPAI Segment Results Business Highlights Jennie-O Turkey Store Q3 • As anticipated, volume and sales declined as a result YoY Percent Change (%) of the supply imp
Slide 14: International & Other
INTERNATIONAL & Third Quarter OTHER RESULTS Fiscal 2022 International & Other Restrictions in China and export logistics challenges continued to impact results Segment Results Business Highlights Q3 • Higher global sales of SPAM® luncheon meat and improved International & Other YoY Percent Change (%
Slide 15: Third Quarter Channel Highlights
CHANNEL Third Quarter HIGHLIGHTS Fiscal 2022 Third Quarter Channel Highlights Growth across the company’s U.S. channels, led by foodservice Third Quarter YTD Q3 Net Sales YoY Percent Change (%) YoY Percent Change (%) U.S. Retail +4 +12 U.S. Foodservice +14 +30 International (13) (6) Total +6 +16 • D
Slide 16: Continuing to Generate Strong Cash Flows
OPERATING CASH Third Quarter FLOW AND Fiscal 2022 LEVERAGE Continuing to Generate Strong Cash Flows Focused on driving cash flows and maintaining an investment-grade rating Operating Cash Flow (in millions) Cash & Mkt Sec. Debt $763 $869M $3.3B $438 Current Net $186 EBITDA (LTM) * Debt/EBITDA* $77 Q
Slide 17: Additional Financial Disclosures
ADDITIONAL Third Quarter FINANCIAL Fiscal 2022 DISCLOSURES Additional Financial Disclosures • Advertising spend was $37 million, compared to $31 million in the prior year. • The effective tax rate was 24.5%, compared to 13.3% for the previous year. Last year's rate reflected the benefit from a large
Slide 18: Fiscal 2022 Outlook
FISCAL 2022 Third Quarter OUTLOOK Fiscal 2022 Fiscal 2022 Outlook Sales and diluted EPS guidance ranges revised Fiscal 2022 Outlook Fiscal 2022 Expectations Previous Updated • From a top-line perspective, we expect to benefit from strong demand for our foodservice and center store grocery brands, hi
Slide 19: Additional Information
David Dahlstrom Additional Director of Investor Relations Information dwdahlstrom@hormel.com 19
Slide 20: Non-GAAP Financial Measures
NON-GAAP Third Quarter Non-GAAP Financial Measures APPENDIX Fiscal 2022 NON-GAAP FINANCIAL MEASURES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES The non-GAAP adjusted financial measures of organic net sales and organic volume are presented to provide investors with additional information to facilit
Slide 21: Non-GAAP Financial Measures
NON-GAAP Third Quarter Non-GAAP Financial Measures APPENDIX Fiscal 2022 NON-GAAP FINANCIAL MEASURES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES The non-GAAP adjusted financial measures of net debt, EBITDA Net Debt and Adjusted EBITDA are useful to management and investors Quarter Ended as indicato