Brown Forman Inc · NYSE:BF.A
Brown Forman — Q1 2022 Earnings Presentation
18 slides from Brown Forman's earnings presentation, Sep 1, 2021
Slide 1: Brown-Forman First Quarter Fiscal 2022 Earnings Call
Brown-Forman First Quarter Fiscal 2022 Earnings Call
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: Current Business Environment
Current Business Environment On-Premise Tourism Prior-Year Comparison Broad Geographic Growth Healthy Brand Portfolio Gross Margin 3 3
Slide 4: Underlying Net Sales Comparisons First Quarter Fiscal 2022
Underlying Net Sales Comparisons First Quarter Fiscal 2022 Brown-Forman Corporation Jack Daniel's Tennessee Whiskey Jack Daniel's RTD & RTP 37% 21% 18% 3% 3% 1Q21 1Q22 1Q21 1Q22 (10)% Notes - Change is versus prior-year period. Totals may differ due to rounding. See appendix for non- GAAP definition
Slide 5: Double-Digit Underlying Net Sales Growth
Double-Digit Underlying Net Sales Growth First Quarter Fiscal 2022 5 5 4
Slide 6: Gross Margin Declined 70 bps
Gross Margin Declined 70 bps Higher input costs and the impact of supply chain constraints, partially offset by favorable portfolio mix 0.9% 61.7% 0.3% 61.0% (1.5)% (0.4)% 1Q21 Price/Mix Cost Acquisitions & Foreign 1Q22 Divestitures Exchange 6 11
Slide 7: First Quarter Fiscal 2022
First Quarter Fiscal 2022 Net Sales Gross Margin Operating Income & Diluted EPS • Underlying1 net sales grew 18% (+20% reported) • Declined 70 bps • Underlying1 operating income grew 15% (-25% ◦ Growth across all three geographic clusters reported) ◦ Higher input costs and Travel Retail channel ◦ A&
Slide 8: Accelerating Underlying Net Sales
Accelerating Underlying Net Sales 1Q21 Change 1Q22 Change U.S. 9% U.S. 16% Developed Developed 12% 12% International International Emerging (3)% Emerging 34% Travel Retail (63)% Travel Retail 74% Notes - Change is versus prior-year period. See appendix for non-GAAP to GAAP reconciliations, definitio
Slide 9: First Quarter Fiscal 2022 Results A Strong Start
First Quarter Fiscal 2022 Results A Strong Start Acquisitions Estimated Reported Foreign and Foundation Net Change Underlying Change Impairment Exchange Divestitures (+/-) In Change (%) Charges Impact (+/-) Distributor (%) (+/-) (+/-) Inventories (+/-) Net Sales 20% 2% —% —% —% -4% 18% Gross Profit
Slide 10: Fiscal 2022 Outlook
Fiscal 2022 Outlook Despite challenges, we expect: • Mid-single digit growth in underlying net sales • Gross margin to be flat to slightly down • Mid-single digit growth in underlying operating expenses • Mid-single digit growth in underlying operating income 10 14
Slide 11: Appendix
Appendix 15
Slide 12: Non-GAAP Reconciliation
Non-GAAP Reconciliation We use certain financial measures in this presentation that are not measures of financial performance under U.S. generally accepted accounting principles (GAAP). These non-GAAP measures, defined below, should be viewed as supplements to (not substitutes for) our results of op
Slide 13: 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 beverage alcohol catego
Slide 14: 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” usually means either (a) our shipments directly to reta
Slide 15: Reconciliation – First Quarter Fiscal 2021 & Fiscal 2022 Net Sales Growth
Reconciliation – First Quarter Fiscal 2021 & Fiscal 2022 Net Sales Growth* Estimated Net Acquisitions & Foreign Exchange Three months ended July 31, 2020 Reported Change in Distributor Underlying Divestitures (+/-) (+/-) Inventories (+/-) Brown-Forman Corporation -2% —% —% 5% 3% Estimated Net Acquis
Slide 16: Reconciliation – Net Sales Growth by Geographic Area
Reconciliation – First Quarter Fiscal 2021 & 2022 Net Sales Growth by Geographic Area* Three months ended July 31, 2020 Estimated Net Acquisitions & Foreign Exchange Geographic Area Reported Change in Distributor Underlying Divestitures (+/-) (+/-) Inventories (+/-) United States 3% —% —% 5% 9% Deve
Slide 17: Reconciliation – First Quarter Fiscal 2022 Net Sales Growth
Reconciliation – First Quarter Fiscal 2022 Net Sales Growth* Estimated Net Acquisitions & Foreign Exchange Three months ended July 31, 2021 Reported Change in Distributor Underlying Divestitures (+/-) (+/-) Inventories (+/-) Premium Bourbons 34% —% —% 2% 36% Estimated Net Acquisitions & Foreign Exch
Slide 18: Reconciliation – Fiscal 2021 Net Sales Growth
Reconciliation – Fiscal 2021 Net Sales Growth* Estimated Net Acquisitions & Foreign Exchange Twelve months ended April 30, 2021 Reported Change in Distributor Underlying Divestitures (+/-) (+/-) Inventories (+/-) Brown-Forman Corporation 3% —% -1% 4% 6% Estimated Net Acquisitions & Foreign Exchange