Conagra Brands, Inc. · NYSE:CAG
Conagra Brands — Conagra Foods — 2006 Prudential Back-to-School Conference
42 slides from Conagra Brands's conference presentation, Sep 7, 2006
Slide 1: 2006 Prudential Back-to-School Conference
Gary Rodkin President and CEO 2006 PRUDENTIAL BACK-TO-SCHOOL CONFERENCE September 7, 2006
Slide 2: Note on Forward-Looking Statements
Note on Forward-Looking Statements This presentation, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current views and assumptions of future events and financial performance and are subject to
Slide 3: Portfolio: Strong Consumer Brands
Portfolio: Strong Consumer Brands Meals & Entrees Condiments & Sides Snacks & Desserts
Slide 4: Portfolio: Strong Business-to-Business Brands
Portfolio: Strong Business-to-Business Brands Onion Garlic Vegetables Chili Peppers French Fries Mashed Potatoes Hash Browns Dough-Enrobed Hand Helds Appetizers Wheat Flours Oat Products Barley Products Seasoning Blends Flavors Bases Spices Agricultural Commodities Energy Commodities Commodity Servi
Slide 5: The New CAG: A true operating company
The New CAG: A true operating company that delivers sustainable profitable growth
Slide 6: FY08-FY09 Goals
FY08-FY09 Goals FY08 – FY09 Net Sales Ramp to 2% - 3% annual growth EPS* Achieve 7% - 9% annual growth ROIC Gradually move to 12%+ * Excludes impairment, restructuring and other special charges, the timing and impact of which cannot be reasonably estimated at this time. Also excludes EPS impact of d
Slide 7: Capital Allocation
Capital Allocation Share repurchases: Benchmark for overall capital allocation decisions Maintain balance sheet flexibility Attractive, sustainable dividend
Slide 8: Major Areas of Focus: Building the New ConAgra Foods
Major Areas of Focus: Building the New ConAgra Foods CULTURE & ORGANIZATION PORTFOLIO COSTS
Slide 9: Culture & Organization
[ cuvtures ORGANIZATION
Slide 10: Vision
Vision company growing by nourishing lives and finding a better way today …one bite at a time!
Slide 11: Culture: Implementing Change
Culture: Implementing Change Execute with Excellence Results Simplicity Collaboration Accountability Results
Slide 12: Rewire: Must-Dos
Rewire …to unleash a better way Attack cost structure & enhance margins …to fund growth Optimize the portfolio …to drive return on investment Innovate …to achieve sustainable growth Exceed customer and consumer expectations …to deliver the promise Nourish our people …to build a winning culture “Must
Slide 13: Incentive Programs
Incentive Programs Long-term Incentives: Structured Around a Combination of EBIT Growth and ROIC Improvement EBIT Performance Decline Flat Growth ROIC Performance Growth Flat Decline Significant Reward: Combination of EBIT, ROIC Growth Annual Short-term Incentives: Multiplier Effect for Achieving Co
Slide 14: Portfolio
PORTFOLIO
Slide 15: Portfolio: Divestiture Update
Portfolio: Divestiture Update EARLIER THAN EXPECTED GETS RID OF DISTRACTIONS, ALLOWS US TO ATTACK OVERHEAD COSTS SOONER Ham, Seafood: Closed Q4 FY06 Cheese: Closed Q1 FY07 Packaged Meats: Agreement Q1 FY07 Pretax Proceeds To Be Generated $1.1 Billion
Slide 16: Brand Portfolio: More and Better Marketing Focus
Brand Portfolio: More and Better Marketing Focus and Target Investments Prior Model New Model $425MM to $450MM 9% - 10% on Prioritized Brands$350MM 4% on Everything “All Brands Created Equal” Old Revenue Base New Revenue Base
Slide 17: Hebrew National: Leveraging Insights on Kosher Quality
Hebrew National: Leveraging Insights on Kosher Quality
Slide 18: Healthy Choice: Leveraging Insights on Taste and Nutrition
Healthy Choice: Leveraging Insights on Taste and Nutrition Breakthrough Advertising Packaging Redesign
Slide 19: Blank for Commercial
Blank for Commercial
Slide 20: Leveraging "The Popcorn Expert"
Leveraging “The Popcorn Expert”
Slide 21: Retro Campaign
Retro Campaign
Slide 22: Retro Campaign Results
Retro Campaign Results Retro campaign began in June Among top 1% of all ASI ads Strong Orville sales results
Slide 23: [LOGO]
[LOGO]
Slide 24: Targeted advertising to young adult males and C-store channel
Drive relevancy with young adult males through targeted advertising and expanded C-store channel
Slide 25: Introducing the Snapalope
Introducing.... The Snapalope Starting in Q2 FY07
Slide 26: What is a Snapalope?
What is a Snapalope? Snapalope \ ‘snapalope\: 1. Member of the family Snap; rises thirty-eight inches in stature; skittish by nature; no known predators aside from man who hunt them for their delicious spicy meat and exquisite yellow and red hide.
Slide 27: Blank for Commercial
Blank for Commercial
Slide 28: Integrated Campaign
Integrated Campaign Web Site: www.snapalope.com Snapalope Gear Grassroots Marketing
Slide 29: Innovation: Focused on Health, Wellness, Convenience
Innovation: Focused on Health, Wellness, Convenience R&D Vision Inventing Tomorrow’s Products Today Enhance Process Engineering Become a Leader in Packaging Strengthen Nutrition Frozen Canning Focus on Owning Five Platforms Aerosols Kosher “Quick Hits”: Fiscal 2007 Larger Platforms: 2 years Microwav
Slide 30: Portfolio: Gold Store Initiative
Portfolio: Gold Store Initiative FOCUS Sales Execution on Top 10 Categories Grow Key Categories Grow Priority Brands Flawless In-Store Execution Microwave Popcorn Meat Snacks Whipped Toppings Canned Tomatoes Premium Hot Dogs Canned Pasta Liquid Eggs Cooking Sprays Frozen Meals Sloppy Joe Mix OBJECTI
Slide 31: Gold Store 10: Popcorn Category
Gold Store 10: Popcorn Category Rich Flavors Butter Light Healthy Better For You Popcorn Growth: +7 to 9%
Slide 32: Sales Channel Progress
Sales Channel Progress 100,000 new shelf placements Adds $25mm annual revenue Dollar Stores Home Improvement Office Supplies Sporting Goods
Slide 33: Low Investment Brands: Recent Success Stories
Low Investment Brands: Recent Success Stories $14+ million incremental net sales growth this year Opened doors for high priority brands
Slide 34: Costs
COSTS
Slide 35: Cost Structure: Product Supply Commitment
Cost Structure: Product Supply Commitment Manufacturing Rationalization Fixed Cost Focus $100MM $100MM permanent reduction in fixed costs by FY09 $25-$40MM 3% Logistics $250-$300MM/yr by FY09 3-5% Manufacturing Productivity 3% Procurement Annual Savings $ Annual Productivity % $1B $2B $5.5-$6B Annua
Slide 36: Cost Savings: A Mentality to Win
Cost Savings: A Mentality to Win G&A, COGS, Working Capital Reduction Reduce complexity Cross functional initiatives Incentive systems ROI culture Right people in right jobs
Slide 37: Cost Structure Progress: Procurement
Cost Structure Progress: Procurement 3% Procurement Annual Savings $ Annual Productivity % $5.5-$6B Variable Cost Focus $150-$175MM Consolidating suppliers as we leverage our purchasing scale "Clean Sheet" - modeling supplier economics to retool copacker and supplier network Partnering with R&D to r
Slide 38: Cost Structure Progress: Manufacturing Productivity
Cost Structure Progress: Manufacturing Productivity 3-5% Manufacturing Productivity $2B $75+MM Annual Savings $ Annual Productivity % Variable Cost Focus Annual Spend $B ConAgra Performance System Implementing Best Practices in: Productivity Cost Safety Yield Quality
Slide 39: Cost Structure Progress: Logistics
Cost Structure Progress: Logistics $25-$40MM3% Logistics $1B Annual Savings $ Annual Productivity % Variable Cost Focus Annual Spend $B Reducing total miles and number of product touches Leveraging scale to renegotiate vendor terms and prices for temperature control network - First Time Ever Reducin
Slide 40: Cost Structure Progress: Manufacturing Network
Cost Structure Progress: Manufacturing Network Fixed Cost Focus: Manufacturing Rationalization $100MM Phase 1 : 10-12 plants identified for consolidation Specifics on some of these offered within the next several weeks Phase 2 and beyond: Leveraging Overall Equipment Effectiveness further benefits c
Slide 41: Summary: A Good Start
Summary: A Good Start Culture Driving Results Cost savings materializing faster than expected Plans for increased marketing in 2 nd half Provide regular updates
Slide 42: 2006 Prudential Back-to-School Conference
2006 PRUDENTIAL BACK-TO-SCHOOL CONFERENCE
Conagra Foods — 2006 Prudential Back-to-School Conference on 6ix