B&g Foods, Inc. · NYSE:BGS
B&g Foods — Barclays Global Consumer Staples Conference 2019
63 slides from B&g Foods's conference presentation, Sep 4, 2019
Slide 1: Barclays Global Consumer Staples Conference
BARCLAYS GLOBAL CONSUMER STAPLES CONFERENCE 09.04.2019 | InterContinental Boston
Slide 2: Forward Looking Statements
Forward Looking Statements These materials and the oral statements made from time to time by executive officers of B&G Foods may contain “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act
Slide 3: About Non-GAAP Financial Measures
About Non-GAAP Financial Measures This presentation includes “non-GAAP (Generally Accepted Accounting Principles) financial measures.” “Adjusted diluted earnings per share” (which we define as diluted earnings per share adjusted for certain items that affect comparability), “EBITDA” (which we define
Slide 4: About Non-GAAP Financial Measures (cont'd)
About Non-GAAP Financial Measures (cont’d) B&G Foods provides earnings guidance only on a non-GAAP basis and does not provide a reconciliation of our company’s forward-looking adjusted EBITDA and adjusted diluted earnings per share guidance to the most directly comparable GAAP financial measures bec
Slide 5: Presenters
Presenters Ken Romanzi Bruce Wacha President and Chief Executive Officer Executive Vice President of Finance and Chief Financial Officer 4
Slide 6: Overview of B&G Foods
OVERVIEW OF B&G FOODS
Slide 7: B&G Foods is a Unique Food Stock
B&G Foods is a Unique Food Stock Value driven by growth through disciplined acquisition strategy Cash Flow Focus Commitment to returning a substantial portion of our cash stockholders in the form of dividends to 6
Slide 8: B&G Foods Since IPO Has Had an Extended Period of Steady Growth
B&G Foods Since IPO Has Had an Extended Period of Steady Growth $1701 $1646 $1372 $959 $837 $725 $634 $544 $513 $501 $487 $471 $411 $379 $373 $60 2004 IPO(1) $62 2005 $69 2006 $94 2007 $89 2008 $103 2009 $120 2010 $131 2011 $169 2012 $184 2013 $194 2014 $218 2015 $322 2016 $333 2017 $314 2018 Net Sa
Slide 9: Longstanding Commitment to Returning Cash to Shareholders
B&G Foods Has Maintained a Longstanding Commitment Returning Cash to Shareholders of Cash Returned to Shareholders ($ in millions, except for per share data) $957 $67(2) SHARE REPURCHASES $890 CUMULATIVE DIVIDENDS $1.90 $0.848 Annual Dividend Rate per share at IPO(1) Current Dividend Rate per share
Slide 10: Superior Shareholder Returns Since Transferring to the NYSE
B&G Foods Has Delivered Superior Since Transferring to the NYSE Shareholder Returns Source: Factset. Note: Transferred to NYSE on 5/23/2007. Market data as of 8/23/2019. 1.Returns the compound total return, with dividends reinvested by default on the ex-date, for dates requested. The prices used in
Slide 11: We Have Assembled a Portfolio of More than 50 Brands
We Have Assembled a Portfolio of More than 50 Brands 1998 ACQUISITION JULY 1999 ACQUISITION FEBRUARY Polane MARCH 2004 IPO OCTOBER 2006 2007 ACQUISITION FEBRUARY •Molas•ses ACQUISITION JANUARY CREAM WHEAT . B•G fOODS, INC. • TRANSFER TO NYSE MAY MAY BGS lllmD NYSE l ll l1 iii l 2012 ACQUISITION OCTO
Slide 12: We Have a Diverse Portfolio Across Core Pillars
We Have a Diverse Portfolio Across 5 Core Pillars PLANT BASED 33% SNACKS 7% CONDIMENTS 23% SPICES 21% MEALS 17% 1) Excludes net sales of Clabber Girl and Pirate Brands. 11
Slide 13: A Portfolio of Large, Established & Defensible Niche Brands
A Portfolio of Large, Established & Defensible Niche Brands BR7ANDS ANNUAL NET SALES BY BRAND $500+ Million plus Spices & Seasonings account for ~71% or $1.2 billion of net sales(1) $100+ Million $50-$70 Million <$50 Million 1. Pro forma for the sale of Pirate Brands on 10/17/2018 and the acquisitio
Slide 14: We Have a Brand in Nearly Every Household
We Have a Brand in Nearly Every Household 81% of consumers Have at least 1 B&G Foods brand In their home Source: Ask Suzy Poll: General population consumers polled as of August 15, 2019. 13
Slide 15: We Have a Brand in Every Aisle
We Have a Brand in Every Aisle SNACKS CONDIMENTS BREAKFAST CANNED MEATS HB&A SOUPS DRESSINGS SEASONINGS MEXICAN SAUCES CRACKERS BAKING CHECKOUTS 14 FROZEN FLORAL DELI DAIRY DAIRY & EGGS POULTRY MEAT FISH & VEGETABLES BAKERY PHARMACY ENTRANCE ENTRANCE FROZEN PRODUCE
Slide 16: 75% of Our Brands Compete in Growing Categories
75% of Our Brands Compete in Growing Categories Fruit Juice Sweetened Preserves Full Service Mexican Bagel Chips Baked Beans Baking Powder Baking Soda Meat Spreads Canned Tomatoes Enchilada Sauces Frozen Vegetables Wine Vinegars Grilling Spices Traditional Spices Ingredient Beans Super Premium Pasta
Slide 17: Many of Our Brands are #1 or #2 in Their Categories
Many of Our Brands are #1 or #2 Nationally or Regionally in the Categories or Markets Where They Compete BRAND IN CATEGORY OR MARKET Spices & Seasonings Brands Sources: B&G Foods management estimates, AC Nielsen data. 16
Slide 18: Our Largest Brands Are Driving Growth
Our Largest Brands Are Driving Growth 8.9% Frozen 3.9% Shelf Stable 1.9% (1.0%) 1.4% Total Company Sales Source: Nielsen AOD – TTL US xAOC, 52 week data as of 7/27/19. 17 Spices & Seasonings Brands(1.9%) 1.5% 3.7% 4.3% Latest 52 – Weeks Retail Sales Growth 9.3%
Slide 19: Recent Performance
RECENT PREFORMANCE
Slide 20: Top Line Growth Has Stalled, Earnings Growth Has Accelerated
While Recent Top Line Growth Has Stalled Growth Has Accelerated, Earnings $1701 $1646 $1372 $959 $837 $725 $634 $544 $513 $501 $487 $471 $411 $379 $373 $60 2004 IPO(1) $62 2005 $69 2006 $94 2007 $89 2008 $103 2009 $120 2010 $131 2011 $169 2012 $184 2013 $194 2014 $218 2015 $322 2016 $333 2017 $314 2
Slide 21: We Doubled in Size From 2014 to 2018
We Doubled in Size From 2014 to 2018 Net Sales ($mm) Increased net sales by $864 million $1701 Increased adj. EBITDA by $120 million Increased inventory by ~$295 million Spices & Seasonings Brands Increased employees by ~1,700 $837 Added 15 manufacturing facilities, warehouses, and distribution faci
Slide 22: We Experienced Growing Pains
We Experienced Growing Pains × Financial Performance ($mm) Grew net sales but margins declined Financial Performance ($mm) $1701 × $1646 Increased inventory ~ $150 million in 2017 Reduced inventory ~ $100 million in 2018 $1372 × 23.5% Unprecedented industry-wide freight inflation 20.2% 18.5% $333 $3
Slide 23: Our Total Shareholder Returns Have Suffered
And Our Total Shareholder Returns Have Suffered Total Shareholder Return (1) Source: Factset. Note: Transferred to NYSE on 5/23/2007. Market data as of 8/23/2019. 1.Returns the compound total return, with dividends reinvested by default on the ex-date, for dates requested. The prices used in the tot
Slide 24: We Have Taken Steps to Return to Growth
We Have Taken Steps to Return to Growth Appointed first outside CEO in recent years Net Sales ($mm) Enhanced leadership structure & people $1665 - $1700 $1700 Implemented price increases in 2018 and 2019 Initiated a comprehensive cost savings program Divestiture of Acquisition of Completed successfu
Slide 25: B&G Foods Vision
B&G FOODS VISION
Slide 26: Our Vision: To Be a Part of Every Eating Occasion
Our Vision: To Be a Part of Every Eating Occasion SNACKING & ENTERTAINING FAMILY GATHERINGS BAKING & COOKING GRILLING GREATNESS BREAKFAST TRADITIONS 25
Slide 27: Our Mission
Our Mission Acquire and nurture undervalued brands Innovate to meet consumers’ needs Deliver shareholder value 26
Slide 28: Our Long Term Goals
Our Long Term Goals $3 billion in net sales 27.5% to sales 30% gross profit as % net 20% adjusted EBITDA as % net sales 27
Slide 29: Our Strategic Imperatives
Our Strategic Imperatives DRIVE ORGANIC GROWTH IMPROVE MARGINS ACQUIRE & INTEGRATE BUSINESS BUILD A WINNING WORKPLACE 28
Slide 30: Drive Organic Growth
Drive Organic Growth Manage brand portfolio for 0% to 2% organic growth Drive growth on key brands Manage and maintain remaining for cash flow brands Focus on fewer, bigger, better innovations Invest in underdeveloped channels 29
Slide 31: Manage Our Brand Portfolio to 0%-2% Organic Growth
We Will Growth Manage Our Brand Portfolio to 0%-2% Organic NTAIN Medium Size Low High 30 Growth Potential High Low MANAGE Profitability Seasonings MAI Shelf Stable Pure Maple Molasses Meals BFY Snacks Frozen
Slide 32: We Have Re-Awakened the Giant
We Have Re-Awakened the Giant Total Green Giant* - $ Retail Sales (2016 – Aug 2019) +7.0% 693,601,060 +7.2% 665,394,647 +14.4% 2015 2016 2017 2018 2019 1.*Total GG= GG Frz Veg+Pizza Crust+Bowls+LGS+GG SS+LS SS; Nielsen AOD, TTL US xAOC; 52 weeks ending 8/24/2019. 31 621,063,480620,818,390 542,899,93
Slide 33: We Have Re-Awakened the Giant
We Have Re-Awakened the Giant Brand Awareness(3) Riced and +8.9% 1. 2. 3. Nielsen. Includes B&G Foods’ net sales of Green Giant shelf stable and frozen products and third party licensees’ net sales of Green Giant Fresh products. Nielsen TTL xAOC, 52 Weeks Ending 7/27/19. FRC, Vegetable Attitude & Us
Slide 34: Green Giant Innovation Drives Growth
Green Giant Innovation Drives Growth Over $423mm in Retail Sales Since Launch! $61mm $170mm $56mm $110mm $13mm $5mm $7mm $4mm Note: Represents sales at retail per Nielsen TTL xAOC, 52 Weeks Ending 7/27/19 33
Slide 35: Innovation Launched in Q4 2018
Innovation Launched in Q4 2018 CAULlFLOWER PIZZA CRUST K. a:wmt DWR 80% 16g 0# CARBS CAULIFLOWER : ......-.m -------B&G FOODS, INC. 34 R ICED VEGGIES TUSCAN ORIGINAL
Slide 36: Green Giant Core Frozen Renovation 2019
Green Giant Core Frozen Renovation 2019 -------B&G FOODS, INC. 35
Slide 37: Green Giant Core Frozen Innovation
Green Giant Core Frozen Innovation "Riced'V SIMPLY STEAM.. "Ricedty SIMPLY STEAM "Riced'V SIMPLY STEAM "Rlcedr'VeuuLM siMPLY STEAM" . I RICED CAULIFLOWER, CED CAULIFLOWER CASSEROLE BROCCOLI FLORETS & CHEESE SAUCE "1TH C.:l!t: :..t ION$ & CHEESE SAUCE -------B&G FOODS,INC. 36 R\ RlCED CAULIFLOWER
Slide 38: Green Giant Planned Innovation Fall 2019
Green Giant Planned Innovation Fall 2019 37 B&G FOODS, INC.
Slide 39: Mama Mary's Restage
Mama Mary’s Restage New Packaging! New: Premium Line of Cucina Di Casa Pizza Crust, Kits & Sauces 38
Slide 40: Back to Nature Restage: Current State
Back to Nature Restage: Current State b a ck to : . -------B&G FOODS, INC. 39 NffTUE b n ck to N6JURE
Slide 41: To Be The Leader in Plant Based Snacks
To Be The Leader New Packaging & In Plant Based Snacks Innovation Coming in 2020 Q4 2019 New Base Line Packaging 2020 New Innovation 40
Slide 42: Mrs. Dash Restage
Mrs. Dash Restage Vision: Re-introduce Mrs. Dash To Core Consumer & Increase Household Penetration Dieticians Brand Refresh Baby Boomers Joy Bauer, MS, RDN 41
Slide 43: Ortega Vision
Ortega Vision: Reinvent Shelf Stable Mexican Squeezable Bottles! Convenient Kits! New, Healthier Ingredients! 42
Slide 44: Invest in Underdeveloped Channels
Invest in Underdeveloped Channels Club Away From Home E-Commerce 43
Slide 45: Improve Margins
Improve Margins Optimize logistics network Optimize manufacturing network Rationalize product and packages Optimize Net Pricing Leverage SG&A 44
Slide 46: Optimize Logistics Network: Houston to Fontana, CA
Optimize Logistics Network: Houston to Fontana, CA 45 •Houston to Fontana, CA estimated to save 4mm miles & $6mm annually •So. Cal/No. Cal/Pac NW markets serviced from Fontana saving miles •Replenishment costs mitigated through higher use of intermodal
Slide 47: Optimize Logistics Network: W. Memphis to Ft. Worth
Optimize Logistics Network: W. Memphis to Ft. Worth Leadership 46 •West Memphis to Ft. WorBth&eGsFtiomoadsteSdutpoplsyaCvheain $3MM annually. •Most large customers located in the DFW area. •Estimated to reduce 1MM miles annually.
Slide 48: Optimize Manufacturing Network
Optimize Manufacturing Network Opportunities exist to make our manufacturing network more efficient VT • • • Single shift Lack of automation Infrastructure issues NH MA CT • Large mix of co-manufacturers with overlap in capabilities St. Evariste, QC St. Johnsbury, VT Portland, ME Brooklyn, NY Rosela
Slide 49: Acquire & Integrate Businesses
Acquire & Integrate Businesses Branded food products with defensible market positions Center store opportunities with high and stable margins Acquire “like” products to facilitate sales, distribution and G&A synergies Cash flow driven M&A strategy focused on acquiring brands at accretive multiples 4
Slide 50: Clabber Girl: A Perfect Fit
Clabber Girl: A Perfect Fit #1 Baking Powder #2 Baking Soda #2 Corn Starch 49
Slide 51: Building A Winning Workplace
Building A Winning Workplace Enhance organization, systems processes & Foster learning & development Promote best-in-class work environment & culture 50
Slide 52: We Have A Highly Engaged Organization
We Have A Highly Engaged Organization t!YA From: Employee Engagement Survey-May 2019. Results from 461 salaried employees (92% of those surveyed in U.S., Canada, & Mexico responded). 51 B&G FOODS, INC.
Slide 53: Financial Update
FINANCIAL UPDATE
Slide 54: 2019 Full Year Guidance
2019 Full Year Guidance Net Sales $1,665 - $1,700 Adj. EBITDA $305 – $320 Adj. Diluted EPS $1.85 – $2.00 53 MetricGuidance (mm)
Slide 55: B&G Foods Long Term Growth Objectives
B&G Foods Long Term Growth Objectives enhance growth through accretive M&A Cash Interest and Cash Taxes 54 Net Sales Growth 0% – 2% base business with ability to Adjusted EBITDA as % of Net Sales 18.5% – 20.0% Adjusted EBITDA less CapEx, Cash Interest and Cash Taxes ~ 50% to 60% of Adjusted EBITDA D
Slide 56: We Are Now Poised to Execute our Vision for Growth
We Are Now Poised to Execute our Vision for Growth 2024 27.5% - 30% Gross Profit $3bn in Net Sales 20% Adj. EBITDA SG&A Benefits channels Acquisitions acquisitions 55 BEST-IN-CLASS WORK ENVIRONMENT AND CULTURE + FOCUSED AND EFFECTIVE MANAGEMENT TEAM Leverage Gross Profit Accretive Generate 0–2% top-
Slide 57: Thank You!
THANK YOU!
Slide 58: Appendix
APPENDIX
Slide 59: Historical Financial Performance
Historical Financial Performance Net Sales % growth $ 543.9 5.9% $ 633.8 16.5% $ 725.0 14.4% $ 837.3 15.5% $ 958.9 14.5% $ 1,372.3 43.1% $ 1,646.4 20.0% $ 1,700.8 3.3% $ 783.9 (4.4%) Gross Profit % margin $ 177.8 32.7% $ 223.3 35.2% $ 242.9 33.5% $ 237.1 28.3% $ 282.1 29.4% $ 429.0 31.3% $ 440.6 26.
Slide 60: Non-GAAP Reconciliations – Net Income to EBITDA and Adjusted EBITDA
Non-GAAP Reconciliations – Net Income to EBITDA and Adjusted EBITDA Net Income Income Tax Expense (Benefit) Interest Expense, Net Depreciation and Amortization Loss on Extinguishment of Debt(1) EBITDA $ 50 27 37 16 - $ 59 32 48 19 10 $ 52 29 42 24 31 $ 41 23 47 27 6 $ 69 52 51 29 - $ 109 68 74 37 3
Slide 61: Non-GAAP Reconciliations – Net Income to Adj. Net Income and Adj. Diluted EPS
Non-GAAP Reconciliations – Net Income to Adj. Net Income and Adj. Diluted Earnings Per Share Net Income Non-recurring adjustment to deferred taxes Loss on extinguishment of debt, net of tax Acquisition-related expenses, net of tax Inventory reduction plan impact, net of tax Non-cash adjustments on i
Slide 62: Capitalization and Credit Statistics
Capitalization and Credit Statistics Revolver 4.625% Senior Notes due June 2021 5.25% Senior Notes due April 2025 $ 215.0 700.0 900.0 Total Debt Cash $ 1,815.0 (19.9) Net Debt $ 1,795.1 Net Debt / 2019E Adjusted EBITDA before Share-based Comp (1) 5.67 x 2019E Adjusted EBITDA (1) 2019E Adjusted EBITD
Slide 63: Barclays Global Consumer Staples Conference
BARCLAYS GLOBAL CONSUMER STAPLES CONFERENCE 09.04.2019 | InterContinental Boston
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