Slide 1: FY24 Q4 Earnings Presentation
FY24 Q4 Earnings Presentation July 11, 2024 1
Slide 2: Legal Disclosure
Legal Disclosure Note on Forward-Looking Statements This document contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Reader
Slide 3: Sean Connolly, President and Chief Executive Officer
Sean Connolly President and Chief Executive Officer 3
Slide 4: Agenda
Agenda Business Update Looking Ahead 4
Slide 5: Key Messages
Key Messages • Solid progress through FY24 amidst challenging consumer environment • Saw continued impact from investments in our brands o Sequential volume improvement in Domestic Retail business o Strengthened share position, especially in key Frozen and Snacks domains o Strong innovation pipeline
Slide 6: FY24 Q4 and Full Year Results
FY24 Q4 and Full Year Results Q4 vs. FY24 2YR Q4 FY24 CAGR or YA vs. YA Change Organic Net Sales1 $2,901 (2.4)% $12,022 (2.1)% +2.2% Adj. Gross Margin1 27.6% +62 bps 27.7% +58 bps +284 bps Adj. Operating Margin1 14.8% +22 bps 16.0% +34 bps +159 bps Adj. EPS1 $0.61 (2.0)% $2.67 (3.6)% +6.4% 1. Non-GA
Slide 7: Five Year Key Performance Indicators
Five Year Key Performance Indicators Reported Net Sales Operational Margin 1 $12.1 16.0% 15.4% $9.5 ONS1+3.8% 1,2 CAGR Adj. Op. Margin Volume (1.6)% +55 bps Price Mix +5.3% FY19 FY20 FY21 FY22 FY23 FY24 FY19 FY20 FY21 FY22 FY23 FY24 Adjusted EPS 1 Net Leverage 1 $2.67 5.53 $2.01 3.37 Adj. EPS 1 Net
Slide 8: Volume Trajectory Improved as the Year Progressed
Volume Trajectory Improved as the Year Progressed Total Domestic Retail Shipments (Conagra CSU Volume, % Change vs. YA) -1.8% -5.2% H1 FY24 H2 FY24 Note: Total Domestic Retail consists of Refrigerated and Frozen and Grocery and Snacks segments. Data represents Conagra shipments which equates to repo
Slide 9: Consumption Continued to Improve in Key Snacks and Frozen Domains
Consumption Continued to Improve in Key Snacks and Frozen Domains Conagra Retail Sales (Volume Sales, % Change vs. YA) Snacks Frozen +0.4% (0.4)% (2.5)% (2.5)% (3.0)% (2.8)% (5.0)% (7.5)% Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Source: Circana POS, Total US- MULO+ with Conven
Slide 10: Strong Share Gains Throughout FY24
Strong Share Gains Throughout FY24 % of Conagra Portfolio Holding or Gaining Volume Share 65.1% 57.4% 37.2% 39.8% 80% For Strategic Frozen & Snacks Domains Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Source: Circana POS, Total US-MULO+ with Convenience, Syndicated Hierarchy, Fiscal Quarters 10
Slide 11: Strong Conagra Share Performance, Near Top of Peer Set
Strong Conagra Share Performance, Near Top of Peer Set % of Portfolio Holding or Gaining Volume Share (13 Weeks Ended May 26, 2024) 86% 65% 65% 22% 15% 5% Peer A Peer B Peer C Peer D Peer E Source: Circana POS, Total US-MULO+ with Convenience, Syndicated Hierarchy, 13 Weeks Ended May 26, 2024 11
Slide 12: Conagra Drove Category Improvement in Frozen Single-Serve Meals
In FY24, Conagra Drove Category Improvement in Frozen Single-Serve Meals Frozen Single-Serve Meals Volume Sales % Change vs. YA Total SSMs Conagra SSMs +1.0% (2.5)% (2.1)% SSM Category (4.4)% (5.3)% (6.8)% (9.2)% (9.3)% Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Source: Circana POS, Total US-MULO+ with Conveni
Slide 13: Investments in Frozen Single-Serve Meals Contributed to Record Share
Our Investments in Frozen Single-Serve Meals Contributed to Record Share Levels Conagra Frozen Single-Serve Meals Volume Share of Category Enhanced Investments 52.6% 52.0% 52.0% +1.3 pts vs. YA +1.5 pts +1.6 pts 50.5% 50.4% vs. YA vs. YA +0.2 pts +0.6 pts 49.2% vs. YA vs. YA NC vs. YA Q3 FY23 Q4 FY2
Slide 14: Investments in Frozen Vegetables Helped Improve Volume Trends
Investments in Frozen Vegetables Helped Improve Volume Trends Frozen Vegetables Volume Sales % Change vs. YA Total Fz Veg Birds Eye -0.1% -2.5% -2.7% Category -3.8% -4.1% -5.2% -6.4% -9.5% Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Source: Circana POS, Total US-MULO+ with Convenience, Conagra Custom Hierarchy,
Slide 15: Frozen Meals: 40-Years of Growth in Consumer Usage Occasions
Frozen Meals: 40-Years of Growth in Consumer Usage Occasions Frozen Meals Share of In-Home Occasions +4% 4 0 - Ye a r CAGR 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 2020 2023 Source: Circana / National Eating Trends; Sourced IH/Retail, 1984-2019 12 Months Ended December; 2020-2023
Slide 16: Positive Momentum in Q4 on Key Snacking Brands
Positive Momentum in Q4 on Key Snacking Brands CAG Outpacing Total Snacks Growth Drivers Q4 Volume Sales Q4 Volume Sales % Change vs. YA % Change vs. YA +0.4% +1.3% +2.1% -1.5% +11.4% Total Snacks Source: Circana POS, Total US-MULO+ with Convenience, Conagra Custom Hierarchy, Fiscal Quarters – 13 We
Slide 17: Staples Remains a Work In Progress
Staples Remains a Work In Progress Staples Volume Sales • Supply Disruption Recovery: % Change vs. YA +17.5% Q4 volume sales increase on canned meat and chili H1: (6.3)% H2: (1.9)% (1.6)% • FY24 Brand Building Investments: (2.3)% +3.7% Q4 volume sales increase on select refrigerated brands • FY25 Br
Slide 18: Our Strong Innovation Track Record Continued
Our Strong Innovation Track Record Continued Conagra Innovation Retail Sales (Dollars in Millions) $1,512MM $387MM FY19 FY20 FY21 FY22 FY23 FY24 The Wendy’s name and design and Cameo design are registered trademarks of Quality Is Our Recipe, LLC, used with permission Source: Circana POS, Total US-MU
Slide 19: Full Year Adj. Gross Margin Expansion Fueled Significant Brand Building Investments
Full Year Adj. Gross Margin Expansion Fueled Significant Brand Building Investments Strong Supply Chain Productivity REDUCED CASH SAVINGS AS SERVICE LEVELS2 CONVERSION % OF COGS1 CYCLE 3.9 % 97% 95% 5 DAYS Remain on track to deliver $1B of cost savings by end of FY25 1 Includes productivity and othe
Slide 20: Agenda
Agenda Business Update Looking Ahead 20
Slide 21: Still Progressing Towards A Normalized Operating Environment
Still Progressing Towards A Normalized Operating Environment FY25 Normalized Inflation Consumer COVID Operating Super-Cycle Adaptation Environment 21
Slide 22: FY25 Assumptions
FY25 Assumptions • Expect brands to continue to benefit from ongoing investments • Volumes will further improve as year progresses: Q1 volumes will be lowest • Expect to achieve 4% cost savings as a percent of COGS that will more than offset projected inflation and support investments to drive compe
Slide 23: Fiscal 2025 Guidance
Fiscal 2025 Guidance 1 1 Updated Guidance Organic Net Sales1 Growth (vs. FY24) (1.5)% to Flat Adj. Operating Margin1 15.6% to 15.8% Adj. EPS1 $2.60 to $2.65 1. Forward-looking non-GAAP financial measure. See the appendix for more information. 23
Slide 24: Dave Marberger, Executive Vice President and Chief Financial Officer
Dave Marberger Executive Vice President and Chief Financial Officer 24
Slide 25: Performance Summary
Performance Summary Dollars in Millions, except per share data Increase/(Decrease) Q4 vs. YA FY24 vs. YA Reported Net Sales $2,906 (2.3)% $12,051 (1.8)% Organic Net Sales1 Growth (2.4)% (2.1)% Adj. Gross Profit1 803 Flat 3,336 +0.3% Adj. Gross Margin1 27.6% +62 bps 27.7% +58 bps A&P 73 5.6% 290 (0.2
Slide 26: Net Sales Bridge vs. Year Ago
Net Sales Bridge vs. Year Ago Q4 Drivers of Net Sales Change (% Change vs. YA) Organic Net Sales1: (2.4)% +0.1% (0.6)% (1.8)% (2.3)% Volume Price/Mix Foreign Total (incl. Retailer Exchange Conagra Investments) Brands 1. Non-GAAP financial measure. See the appendix for certain definitions and reconci
Slide 27: Net Sales by Segment
Net Sales by Segment Dollars in Millions Increase/(Decrease) Q4 1 1 1 Organic Net Sales Price/Mix Volume vs. YA Grocery & Snacks $1,175 (2.1)% 1.5% (3.6)% Refrigerated & Frozen 1,173 (3.8)% (4.7)% 0.9% International 267 +4.3% 0.2% 4.1% Foodservice 291 (3.9)% 6.4% (10.3)% Total Conagra Brands $2,906
Slide 28: Q4 Operating Margin Bridge
Q4 Operating Margin Bridge Q4 Adj. Operating Margin1 (% Change vs. YA) Adj. Gross Margin1: +62 bps vs. YA 1 2 1. Non-GAAP financial measure. See the appendix for certain definitions and reconciliations to the most directly comparable GAAP measure. 2. COGS Inflation reflects market inflation net of m
Slide 29: Segment Adjusted Operating Profit & Margin Summary
Segment Adjusted Operating Profit1 & Margin1 Summary Q4 Adj. Operating Profit1 & Margin1 Dollars in Millions Increase/(Decrease) Adj. Op. Profit1 Adj. Op. Margin1 1 1 Q4 vs. YA Q4 vs. YA Grocery & Snacks $255 +8.9% 21.8% +220 bps Refrigerated & Frozen 190 (13.1)% 16.2% (172) bps International 29 (15
Slide 30: Q4 & FY Adjusted EPS Bridge
Q4 & FY Adjusted EPS1 Bridge Drivers of Q4 Adjusted EPS1 vs. YA Flat Flat 1 1 1 1 1 Drivers of FY Adjusted EPS1 vs. YA 1 1 1 1 1 1. Non-GAAP financial measure. See the appendix for certain definitions and reconciliations to the most directly comparable GAAP measure. Numbers may not add due to roundi
Slide 31: Key Balance Sheet & Cash Flow Metrics
Key Balance Sheet & Cash Flow Metrics May 26, May 28, (dollars in millions) 2024 2023 Debt $8,441 $9,234 Cash $78 $93 Ending Net Debt1 $8,364 $9,140 (dollars in millions) FY24 FY23 Net Cash Flow from Operating $2,016 $995 Activities Capital Expenditures $388 $362 Free Cash Flow1 $1,628 $633 Dividend
Slide 32: Historical Net Leverage Ratio
Historical Net Leverage Ratio1 FY19-FY24 Net Leverage Ratio1 5.53x 3.99x 3.63x 3.37x FY19 FY22 FY23 FY24 1. Non-GAAP financial measure. See the appendix for certain definitions and reconciliations to the most directly comparable GAAP measure. Numbers may not foot due to rounding. 32
Slide 33: Fiscal 2025 Guidance
Fiscal 2025 Guidance 1 1 Updated Guidance Organic Net Sales1 Growth (vs. FY24) (1.5)% to Flat Adj. Operating Margin1 15.6% to 15.8% Adj. EPS1 $2.60 to $2.65 1. Forward-looking non-GAAP financial measure. See the appendix for more information. 33
Slide 34: FY25 P&L Considerations
FY25 P&L Considerations • Expect lowest volume & top line in Q1 with sequential improvement after Top Line • Continued brand-building investments • Q2: wrapping tomato-based pricing; new targeted cocoa pricing • Q1 lowest margin due to tough comp, investments, & seasonality Gross Margin / • ~3% for
Slide 35: Dividend Update
Dividend Update • Dividend to remain at $0.35 per quarter or $1.40 annualized • Represents a 53% payout ratio based on FY25 guidance 35
Slide 36: Appendix
<b VY wbx CONAGRA “BRANDS -° Appendix
Slide 37: Notes on Non-GAAP Financial Measures
Notes on Non-GAAP Financial Measures This document includes certain non-GAAP financial measures. Management considers GAAP financial measures as well as such non-GAAP financial information in its evaluation of the company’s financial statements and believes these non-GAAP financial measures provide
Slide 38: Reconciliation of Q4 FY24 Organic Net Sales by Segment
Reconciliation of Q4 FY24 Organic Net Sales by Segment (in millions) & YOY Change 38
Slide 39: Reconciliation of FY19 to FY24 Organic Net Sales and CAGR
Reconciliation of FY19 to FY24 Organic Net Sales (in millions) and CAGR FY24 FY23 FY22 FY21 FY20 Net Sales $ 12,050.9 $ 12,277.0 $ 11,535.9 $ 11,184.7 $ 11,054.4 Impact of foreign exchange (28.6) 20.9 (16.2) 1.4 18.2 Impact of 53rd week1 — — — — (211.8) Net sales from acquired businesses — — — — (1,
Slide 40: Reconciliation of Q4 FY24 Adj. Operating Profit by Segment
Reconciliation of Q4 FY24 Adj. Operating Profit by Segment (in millions)– YOY Change 40
Slide 41: Reconciliation of Q4 FY24 Adj. Operating Profit by Segment Cont.
Reconciliation of Q4 FY24 Adj. Operating Profit by Segment (in millions) – YOY Change Cont. 41
Slide 42: Reconciliation of Q4 FY24 Adj. Gross Margin and Adj. EPS
Reconciliation of Q4 FY24 Adj. Gross Margin, Adj. Gross Profit, Adj. SG&A, Adj. Net Income, (in millions) and Adj. EPS – YOY Change 1. Operating profit is derived from taking Income before income taxes, adding back Interest expense, net and removing Pension and postretirement non-service income and
Slide 43: Reconciliation of Q4 FY24 Adj. Gross Margin and Adj. EPS Cont.
Reconciliation of Q4 FY24 Adj. Gross Margin, Adj. Gross Profit, Adj. SG&A, Adj. Net Income, (in millions) and Adj. EPS – YOY Change Cont. 1. Operating profit is derived from taking Income before income taxes, adding back Interest expense, net and removing Pension and postretirement non-service incom
Slide 44: Reconciliation of FY24 Adj. Gross Margin and Adj. EPS
Reconciliation of FY24 Adj. Gross Margin, Adj. Gross Profit, Adj. SG&A, Adj. Net Income, (in millions) and Adj. EPS – YOY Change & CAGR FY24 Diluted EPS from income Net income attributable to Selling, general attributable to Conagra Brands, and administrative Conagra Brands, Inc common Gross profit
Slide 45: Reconciliation of FY23 Adj. Gross Margin and Adj. EPS
Reconciliation of FY23 Adj. Gross Margin, Adj. Gross Profit, Adj. SG&A, Adj. Net Income, (in millions) and Adj. EPS – YOY Change FY23 Diluted EPS from income Net income attributable to Selling, general attributable to Conagra Brands, and administrative Conagra Brands, Inc common Gross profit expense
Slide 46: Reconciliation of FY22 Adj. Gross Margin and Adj. EPS
Reconciliation of FY22 Adj. Gross Margin, Adj. Gross Profit, Adj. SG&A, Adj. Net Income, (in millions) and Adj. EPS – YOY Change FY22 Diluted EPS from income Net income attributable to Selling, general attributable to Conagra Brands, and administrative Conagra Brands, Inc common Gross profit expense
Slide 47: Reconciliation of FY21 Adj. Gross Margin and Adj. EPS
Reconciliation of FY21 Adj. Gross Margin, Adj. Gross Profit, Adj. SG&A, Adj. Net Income, (in millions) and Adj. EPS – YOY Change FY21 Diluted EPS from income Net income attributable to Selling, general attributable to Conagra Brands, and administrative Conagra Brands, Inc common Gross profit expense
Slide 48: Reconciliation of FY20 Adj. Gross Margin and Adj. EPS
Reconciliation of FY20 Adj. Gross Margin, Adj. Gross Profit, Adj. SG&A, Adj. Net Income, (in millions) and Adj. EPS – YOY Change FY20 Diluted EPS from income Net income attributable to Selling, general attributable to Conagra Brands, and administrative Conagra Brands, Inc common Gross profit expense
Slide 49: Reconciliation of FY19 Adj. Gross Margin and Adj. EPS
Reconciliation of FY19 Adj. Gross Margin, Adj. Gross Profit, Adj. SG&A, Adj. Net Income, (in millions) and Adj. EPS – YOY Change FY19 Diluted EPS from income from continuing operations Net income attributable to Selling, general attributable to Conagra Brands, and administrative Conagra Brands, Inc
Slide 50: Reconciliation of FY24 Free Cash Flow and Net Debt
Reconciliation of FY24 Free Cash Flow and FY19, FY22 to FY24 Net Debt (in millions) Q4FY24 Q4 FY23 Q4 FY22 Q4 FY19 Notes payable $ 928.4 $ 636.3 $ 180.0 $ 1.0 Current installments of long-term debt 20.3 1,516.0 707.3 20.6 Senior long-term debt, excluding current installments 7,492.6 7,081.3 8,088.2
Slide 51: Reconciliation of Net Leverage Ratio
Reconciliation of FY19, FY22 to FY24 Net Leverage Ratio (in millions) FY24 FY23 FY22 FY19 Net Debt $ 8,363.6 $ 9,140.3 $ 8,893.3 $10,440.7 Net income attributable to Conagra Brands, Inc. $ 347.2 $ 683.6 $ 888.2 $ 678.3 Less: Loss from discontinued operations, net of tax and noncontrolling interest —
Slide 52: Reconciliation of Q4 FY24 EBITDA
Reconciliation of Q4 FY24 EBITDA (in millions) 1. Excludes comparability items related to depreciation 2. Excludes comparability items attributable to noncontrolling interests. 52
Slide 53: Reconciliation of FY24 EBITDA
Reconciliation of FY24 EBITDA (in millions) 1. Excludes comparability items related to depreciation 2. Excludes comparability items attributable to noncontrolling interests. 53