The J.m. Smucker Company · NYSE:SJM
The J.m. Smucker — Barclays Global Consumer Staples Conference 2015
38 slides from The J.m. Smucker's conference presentation, Sep 8, 2015
Slide 1: Barclays Global Consumer Staples Conference
Barclays Global Consumer Staples Conference Sept. 8, 2015 Barclays Global Consumer Staples Conference September 8, 2015 Richard Smucker Chief Executive Officer The J. M. Smucker Company 1
Slide 2: The J. M. Smucker Company
Barclays Global Consumer Staples Conference Sept. 8, 2015 The J. M. Smucker Company RICHARD SMUCKER Chief Executive Officer DAVE WEST President, Big Heart Pet Food and Snacks MARK BELGYA Chief Financial Officer AARON BROHOLM Director, Investor Relations 3 FORWARD-LOOKING STATEMENT This presentation
Slide 3: Agenda
Barclays Global Consumer Staples Conference Sept. 8, 2015 Agenda Corporate Strategy Integration and Synergy Update U.S. Retail Segments Financial Update 5 FY16 First Quarter Results Delivered solid results, primarily driven by the addition of Big Heart Pet Brands and the strong performance of our co
Slide 4: Why Invest in Smucker? Our Purpose
Barclays Global Consumer Staples Conference Sept. 8, 2015 Why Invest in Smucker? Clear Strategy Proven Execution Leading Brands History of Growth Strong Cash Generation Culture and Continuity 7 Our Purpose “Helping to bring families together to share memorable meals and moments.” 8 The J. M. Smucker
Slide 5: Our Vision Guides Our Strategy
Barclays Global Consumer Staples Conference Sept. 8, 2015 Our Vision Guides Our Strategy “To own and market food brands that hold THE #1 MARKET POSITION in their respective category, with an emphasis on North America, while maintaining a global perspective.” 9 Our Categories FY15 PRO FORMA SALES BY
Slide 6: Strong CPG Presence; History of Long-term Growth
Barclays Global Consumer Staples Conference Sept. 8, 2015 Strong CPG Presence Category expansion through innovation and acquisitions. Total Category Sales* Leading Share (in billions) in Key Categories Category (U.S. Retail Markets) Size $40+ Coffee 27 15 11 $9.2B Nut Butter 38 14 17 $2.4B $15 **Dog
Slide 7: Continued Innovation; Our Strategic Architecture
Barclays Global Consumer Staples Conference Sept. 8, 2015 Continued Innovation Target 2% annual sales growth from new products. New Platforms Line Extensions New Flavor Varieties Packaging Innovation 13 Our Strategic Architecture Good and Good For All of Us Easy for You Makes You Smile Bringing Prod
Slide 8: Meeting Changing Consumer Preferences
Barclays Global Consumer Staples Conference Sept. 8, 2015 Meeting Changing Consumer Preferences Focus on innovation ensures we bring new, on-trend products to market. SIMPLE SOURCE OF ADDED INGREDIENTS PROTEIN CONVENIENCE 15 Meeting Consumer Needs Access to products in a variety of channels. Grocery
Slide 9: Natural and Organic Offerings
Barclays Global Consumer Staples Conference Sept. 8, 2015 Natural and Organic Offerings Pioneers in the natural foods and organic industry. 17 Smucker’s Innovation Delicious, simple-ingredient product offerings. 18 The J. M. Smucker Company 9
Slide 10: Pillsbury Purely Simple; Jif Innovation
Barclays Global Consumer Staples Conference Sept. 8, 2015 Pillsbury Purely Simple Delicious homemade taste – no colors, preservatives, or artificial flavors. PURELY SIMPLE BUTTERCREAM FROSTING INGREDIENTS: SUGAR, CORN STARCH, BUTTERMILK. 19 Jif Innovation Affordable sources of protein and added conv
Slide 11: Sahale Snacks; Dunkin' Donuts K-Cups
Barclays Global Consumer Staples Conference Sept. 8, 2015 Sahale Snacks Great-tasting and convenient snack options. 21 Dunkin’ Donuts K-Cups Fulfilling consumer desire for Dunkin’ Donuts K-Cups within retail channels. 22 The J. M. Smucker Company 11
Slide 12: Pet Food Innovation; Integration and Synergy Efforts
Barclays Global Consumer Staples Conference Sept. 8, 2015 Pet Food Innovation Pet parents are looking for limited-ingredient, high-protein food and snack options for their pets. 23 Integration and Synergy Efforts Confident in our proven ability to execute a seamless integration. Identify Best Practi
Slide 13: In Summary
Barclays Global Consumer Staples Conference Sept. 8, 2015 In Summary Larger, Focused on Positioning the Stronger, Integration Company for More and Long-term Diversified Achieving Growth Company Synergies 25 Dave West President, Big Heart Pet Food and Snacks The J. M. Smucker Company 13
Slide 14: U.S. Retail Segments
Barclays Global Consumer Staples Conference Sept. 8, 2015 U.S. Retail Segments Expected to account for over 85% of FY16 net sales, and an even greater percentage of profits. U.S. RETAIL COFFEE U.S. RETAIL CONSUMER FOODS U.S. RETAIL PET FOODS 27 U.S. Retail Pet Foods Driving growth through focused in
Slide 15: #1 Position in Dog Snacks
Barclays Global Consumer Staples Conference Sept. 8, 2015 #1 Position in Dog Snacks Led by the Milk-Bone brand and driven by innovation. $2.1 Billion Dog Snacks Category Other #1 Private Label Smucker #3 Competitor #2 Competitor Source: Smucker Internal Share Report 52 weeks ended August 1, 2015 29
Slide 16: Mainstream Pet Food Brands
Barclays Global Consumer Staples Conference Sept. 8, 2015 Mainstream Pet Food Brands Profitable and highly cash flow generative – fueling investments across the rest of our portfolio. $2.4 Billion* Projected FY16 Net Sales Premium Pet Food Mainstream Pet Food Pet Snacks *Includes an estimated $50 mi
Slide 17: U.S. At-Home Coffee Category
Barclays Global Consumer Staples Conference Sept. 8, 2015 U.S. At-Home Coffee Category 2011 2015 $5.8 Billion Category $9.2 Billion Category Other Other K-Cup Instant Mainstream Mainstream R&G K-Cup R&G Premium Premium Instant PERCENT OF TOTAL CATEGORY Mainstream R&G 47% Mainstream R&G 30% Premium 3
Slide 18: Leader in Mainstream Coffee
Barclays Global Consumer Staples Conference Sept. 8, 2015 Leader in Mainstream Coffee $2.7 Billion Mainstream Roast & Ground Segment Private Other 53 DOLLAR SHARE Label #1 Smucker #2 Competitor Source: Smucker Internal Multi‐Outlet Share Report 52 weeks ended August 9, 2015 35 Folgers Perfect Measur
Slide 19: Improving Our Pricing in Mainstream
Barclays Global Consumer Staples Conference Sept. 8, 2015 Improving Our Pricing in Mainstream Passing along cost savings to our customers and consumers. Folgers Reduced Lower Green Canister Size Coffee Costs On Shelf in Announced 6% Price 80% of Retail Market Decline on July 1 37 Leading Presence in
Slide 20: Expanding the Dunkin' Donuts Portfolio
Barclays Global Consumer Staples Conference Sept. 8, 2015 Expanding the Dunkin’ Donuts Portfolio Successful launch of Dunkin’ Donuts K-Cups with an ACV of 75%. Over 100 MILLION K-Cups Shipped in Q1 Nearly 40,000 Retail Displays Source: Smucker Internal Multi‐Outlet Share Report 12 weeks ended August
Slide 21: Mark Belgya; U.S. Retail Consumer Foods
Barclays Global Consumer Staples Conference Sept. 8, 2015 Mark Belgya Chief Financial Officer U.S. Retail Consumer Foods A large and diverse portfolio of brands. $2.3 Billion Projected FY16 Net Sales 42 The J. M. Smucker Company 21
Slide 22: Leader in Nut Butter and Fruit Spreads
Barclays Global Consumer Staples Conference Sept. 8, 2015 Leader in Nut Butter and Fruit Spreads Driven by product innovation, brand building, and supply chain investments. $2.4 Billion $925 Million Nut Butter Category Fruit Spreads Category DOLLAR SHARE 38 44 DOLLAR SHARE Source: Smucker Internal M
Slide 23: Smucker's Fruit Spreads Innovation; Uncrustables
Barclays Global Consumer Staples Conference Sept. 8, 2015 Smucker’s Fruit Spreads Innovation Meeting consumer preference for naturally sweetened products. Natural Fruit & Honey Fruit Spreads Spreads 45 Smucker’s Uncrustables Convenient and great-tasting, on-the-go option for peanut butter and jelly.
Slide 24: Growing Presence in Natural and Organic
Barclays Global Consumer Staples Conference Sept. 8, 2015 Growing Presence in Natural and Organic Over $200 MILLION in Annual Net Sales 47 Positioning Natural Foods for Growth Realigning this business as part of our Consumer Foods Segment. U.S. RETAIL CONSUMER FOODS 48 The J. M. Smucker Company 24
Slide 25: FY16 First Quarter Results
Barclays Global Consumer Staples Conference Sept. 8, 2015 FY16 First Quarter Results FY16 Q1 vs. PY Total Company Net Sales $1.95B +47% Non-GAAP Gross Profit Margin 38.0% +20bps Non-GAAP Earnings per Share $1.32 -1% Adjusted Non-GAAP Earnings per Share $1.60 +7% 49 FY16 Q1 Net Sales Key Drivers Amou
Slide 26: FY16 Q1 Net Sales Key Drivers; FY16 Guidance
Barclays Global Consumer Staples Conference Sept. 8, 2015 FY16 Q1 Net Sales Key Drivers Amounts may not add due to rounding. U.S. RETAIL PET FOODS INTERNATIONAL AND FOODSERVICE Volume/Mix(a) +8% Volume/Mix(a) +6% Price(b) -2% Price(b) +2% Acquisition(c) +5% Foreign Exchange(d) -6% NET SALES +5% NET
Slide 27: FY16 EPS Guidance
Barclays Global Consumer Staples Conference Sept. 8, 2015 FY16 EPS Guidance LOW HIGH Non-GAAP EPS $5.65 $5.80 Amortization Per Share 1.15 1.15 Adjusted Non-GAAP EPS $6.80 $6.95 Approximately 15% increase over the comparable FY15 measure, assuming midpoint of Adjusted Non-GAAP EPS range. 53 FY16 EPS
Slide 28: Synergy Update
Barclays Global Consumer Staples Conference Sept. 8, 2015 Synergy Update $200M $200M Targeted Annual Synergies by FY18 $25M FY16 FY18 Cost savings somewhat Targeted working equally split between capital reduction of $200M, COGS and SG&A primarily inventory 55 FY16 Free Cash Flow Projection ($ in mil
Slide 29: FY16 Outlook by Segment
Barclays Global Consumer Staples Conference Sept. 8, 2015 FY16 Outlook by Segment NET SEGMENT SEGMENT DRIVERS SALES PROFIT • Dunkin’ Donuts K-Cups Coffee • Favorable green coffee costs • Higher marketing expense • New product launches Consumer Foods • Impact of price declines • Peanut butter facilit
Slide 30: Projected Leverage
Barclays Global Consumer Staples Conference Sept. 8, 2015 Projected Leverage Debt repayments will average approximately $500 million on an annual basis. As of April 30, 2015 2016 2017 2018 2019 Leverage 4.1x 3.7x 3.0x 2.6x 2.1x Achieving 3x leverage will provide opportunities to consider other strat
Slide 31: Forward-Looking Statement
Barclays Global Consumer Staples Conference Sept. 8, 2015 Barclays Global Consumer Staples Conference The J. M. Smucker Company Forward-Looking Statement This presentation contains forward-looking statements, such as projected net sales, operating results, earnings, and cash flows, that are subject
Slide 32: Additional Information
Barclays Global Consumer Staples Conference Sept. 8, 2015 The J. M. Smucker Company Additional Information The Company is the owner of all trademarks and logos referenced herein, except for the following, which are used under license: Pillsbury® and the doughboy character are trademarks of The Pills
Slide 33: Non-GAAP Reconciliation
Barclays Global Consumer Staples Conference Sept. 8, 2015 The J. M. Smucker Company Non-GAAP Reconciliation ($ in millions) Year Ended April 30, 2015 Net sales reconciliation: Net sales $ 5,692.7 Big Heart net sales (244.5) Net sales adjusted for the non comparable $ 5,448.2 impact of the Big Heart
Slide 34: Non-GAAP Reconciliation
Barclays Global Consumer Staples Conference Sept. 8, 2015 The J. M. Smucker Company Non-GAAP Reconciliation Year Ended April 30, 2015 Non-GAAP income per common share before Big Heart – assuming dilution – reconciliation: $ 3.88 Non-GAAP income per common share – assuming dilution Impact of adjusted
Slide 35: Non-GAAP Reconciliation
Barclays Global Consumer Staples Conference Sept. 8, 2015 The J. M. Smucker Company Non-GAAP Reconciliation ($ in millions) Three Months Ended July 31, 2015 2014 Operating income reconciliation: Operating income $ 267.1 $ 191.6 Unallocated derivative losses 10.0 21.4 Cost of products sold – special
Slide 36: Non-GAAP Reconciliation
Barclays Global Consumer Staples Conference Sept. 8, 2015 The J. M. Smucker Company Non-GAAP Reconciliation ($ in millions) Three Months Ended July 31, 2015 2014 Free cash flow reconciliation: Net cash provided by (used for) operating $ 305.1 $ (8.1) activities Additions to property, plant, and equi
Slide 37: Non-GAAP Reconciliation
Barclays Global Consumer Staples Conference Sept. 8, 2015 The J. M. Smucker Company Non-GAAP Reconciliation Company Guidance ($ in millions) Year Ending April 30, 2016 Low High Operating income reconciliation: Operating income $ 1,090.0 $ 1,140.0 Special project costs 110.0 110.0 Non-GAAP operating
Slide 38: Additional Information
Barclays Global Consumer Staples Conference Sept. 8, 2015 Additional Information: jmsmucker.com/investor-relations AARON BROHOLM Director, Investor Relations aaron.broholm@jmsmucker.com Phone: 330.684.7682 75 The J. M. Smucker Company 38
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