The J.m. Smucker Company · NYSE:SJM
The J.m. Smucker — Investor Day (October 2018)
27 slides from The J.m. Smucker's investor day presentation, Oct 9, 2018
Slide 1: Financial Overview
Financial Overview Mark Belgya Vice Chair and Chief Financial Officer 1
Slide 2: International & Away From Home
International & Away From Home INT’L & AFH 14% U.S. RETAIL 86% FY19E NET SALES $1.1B 2
Slide 3: Away From Home Net Sales
Away From Home Net Sales BEVERAGE 45% FOOD 55% FY19E NET SALES $600M 3
Slide 4: Away From Home Net Sales Growth
Away From Home Net Sales Growth +4% FY18 +3% FY19 GROWTH SUPPORTED BY EXPANDED CHANNEL PRESENCE 4
Slide 5: New Operating Model
New Operating Model CONSOLIDATED NORTH AMERICAN TEAM SUPPORTING OUR STRATEGY TO BE WHERE U.S. AWAY FROM HOME OUR CONSUMERS SHOP NORTH AMERICA AWAY FROM HOME CANADA AWAY FROM HOME CONVENIENCE CHANNEL TRANSFER PET U.S. RETAIL COFFEE AWAY FROM HOME CONSUMER 5
Slide 6: International Net Sales
International Net Sales EXPORT CANADA FY19E NET SALES $500M 6
Slide 7: Canada
Canada LEADING CANADIAN BRANDS #1 IN OILS #1 IN PICKLES #1 IN FRUIT SPREADS #1 IN BAKING #1 IN CANNED MILK Canada 7
Slide 8: Canadian Growth Opportunities
Canadian Growth Opportunities EXPAND EXPAND LAUNCH LAUNCH PRESENCE OF JIF® NATURE’S RECIPE® NUTRISH® 1850™ 8
Slide 9: Canadian Tariffs $5M
Canadian Tariffs FY19 ESTIMATED NET IMPACT $5M Source: Department of Finance, Canada 9
Slide 10: Financial Outlook
Financial Outlook TOTAL NET SALES EARNINGS SHAREHOLDER RETURN 10
Slide 11: Long-Term Growth Objectives
Long-Term Growth Objectives CORE, LEADING BRANDS HIGH-GROWTH, ON-TREND BRANDS #1 IN FRUIT SPREADS #1 IN NUT BUTTERS #1 IN COFFEE #1 IN PET SNACKS ANNUAL NET SALES GROWTH +2% - +3% 11
Slide 12: Cost of Goods Sold
Cost of Goods Sold TOP 5 RAW MATERIALS FREIGHT 7% 1. Coffee LABOR/ 2. Meats & Protein Meals OVERHEAD INGREDIENTS 66% 77% 15% OF TOTAL RAW 3. Nuts MATERIALS PACKAGING 12% 4. Resin 5. Fats & Oils 12
Slide 13: Increased Marketing Spend
Increased Marketing Spend +44% FY17 FY18 FY19E 13
Slide 14: Cost Management Program
Cost Management Program FY19 ACHIEVED $80 MILLION K-CUP® AGREEMENT RIGHT SPEND ORGANIZATIONAL RUN MODEL $450 MILLION TOTAL ANNUAL COST $300 MILLION FY20 REDUCTION BY FY20 ANNUAL COST SAVINGS & SYNERGIES TO DATE $70 MILLION CONTINUED SAVINGS FROM ONGOING COST MANAGEMENT PROGRAMS 14
Slide 15: Cost Savings Initiatives
Cost Savings Initiatives ORGANIZATIONAL K-CUP® AGREEMENT RIGHT SPEND RUN MODEL 5% ANNUAL OPERATING INCOME GROWTH OVER STRATEGIC HORIZON 15
Slide 16: Long-Term Guidance
Long-Term Guidance OPERATING NET SALES INCOME +2% - +3% +5% 16
Slide 17: Free Cash Flow Allocation
Free Cash Flow Allocation PROJECTED LEVERAGE RATIO DEBT REDUCTION ADDS 4.1X 1% 3X ANNUAL EARNINGS GROWTH 2X 2018 2021 2023 17
Slide 18: Long-Term Guidance
Long-Term Guidance OPERATING INCOME NET SALES INCOME BEFORE TAXES +2% - +3% +5% +6% 18
Slide 19: Achieve Long-Term Earnings
Achieve Long-Term Earnings CPG MARKETING INTEREST INDUSTRY SUPPORT RATES LONG-TERM EARNINGS GUIDANCE +8% 19
Slide 20: Long-Term Guidance
Long-Term Guidance OPERATING INCOME NET SALES EPS INCOME BEFORE TAXES +2% - +3% +5% +6% +8% 20
Slide 21: Capital Deployment
Capital Deployment INVESTING IN THE BUSINESS RETURNING CASH TO SHAREHOLDERS CAPEX ACQUISITIONS DIVIDENDS SHARE 3.5% NET SALES REPURCHASES +10% $1.3B 10 Year CAGR Past 5 Years 21
Slide 22: New Smucker’s Uncrustables Plant
New Smucker’s Uncrustables Plant ® ® 22
Slide 23: Returning Cash to Our Shareholders
Returning Cash to Our Shareholders Dividend Growth 10% $3.50 $3.00 10-YEAR CAGR $2.50 S&P HIGH-YIELD $2.00 DIVIDEND ARISTOCRATS® $1.50 $1.00 $0.50 $0.00 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 23
Slide 24: Returning Cash to Our Shareholders
Returning Cash to Our Shareholders TOTAL EPS DIVIDENDS SHAREDHOLDER RETURN +8% +2% - +3% +10% - +11% 24
Slide 25: Free Cash Flow Growth
Free Cash Flow Growth CASH FROM CAPEX OPERATIONS FREE CASH FLOW $1B 25
Slide 26: Investor Day Goals
Investor Day Goals GET TO KNOW THE PLANS FOR CONFIDENCE IN LEADERSHIP TEAM GROWTH ACHIEVING FINANCIAL OBJECTIVES 26
Slide 27: Question & Answer Session
Question & Answer Session 27
The J.M. Smucker Company — Investor Day (October 2018) on 6ix