The Hershey Company · NYSE:HSY
The Hershey — Hershey — Shareholder Meeting (May 2020)
43 slides from The Hershey's shareholder meeting presentation, May 12, 2020
Slide 1: Annual Meeting of Stockholders May 12, 2020
ANNUAL MEETING OF STOCKHOLDERS MAY 12, 2020
Slide 2: Chairman, President and Chief Executive Officer
chairman, president and chief executive officer
Slide 3: Items of Business: Election of Directors
ITEMS OF BUSINESS ELECTION OF 13 DIRECTORS
Slide 4: Nominated Directors
NOMINATED DIRECTORS Robert Malcolm AnthonyPalmer Juan Perez WendySchoppert David Shedlarz Michele Buck Pamela Arway James Brown Victor Crawford Charles Davis Mary Kay Haben James Katzman Diane Koken
Slide 5: Board Recommendation
BOARD RECOMMENDATION The board recommends a vote for each of the director nominees
Slide 6: Items of Business: Ratification of Independent Auditors
ITEMS OF BUSINESS ELECTION OF 13 DIRECTORS RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Slide 7: Board recommendation on auditor ratification
Board recommendation. The board recommends a vote for ratification of the appointment of Ernst & Young LLP as independent auditors for 2020
Slide 8: Items of Business: Advise on Named Executive Officer Compensation
ITEMS OF BUSINESS ELECTION OF 13 DIRECTORS RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS ADVISE ON NAMED EXECUTIVE OFFICER COMPENSATION
Slide 9: Board recommendation on executive compensation
The Board recommends a vote FOR approval, on a non-binding advisory basis, of the Company’s named executive officer compensation The Board recommends a vote FOR approval, on a non-binding advisory basis, of the Company’s named executive officer compensation
Slide 10: Items of Business: Voting
ITEMS OF BUSINESS ELECTION OF 13 DIRECTORS RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS ADVISE ON NAMED EXECUTIVE OFFICER COMPENSATION VOTING
Slide 11: Items of Business: Business Review
ITEMS OF BUSINESS ELECTION OF 13 DIRECTORS RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS ADVISE ON NAMED EXECUTIVE OFFICER COMPENSATION VOTING BUSINESS REVIEW
Slide 12: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Many of these forward-looking statements can be identified by the use of words such as “intend,” “believe,” “expect,” “anticipate,” “should,” “
Slide 13: What We Want You to Leave With Today
Our long-term strategies remain unchanged; we are investing in key differentiators that will continue to enable us to respond to the rapidly changing environment We are reassured by our financial stability to manage through the pandemic, while endeavoring to create peer-leading shareholder value ove
Slide 14: Our Top Priority Is the Well-Being of Our Team
OUR TOP PRIORITY IS ENSURING THE PHYSICAL, MENTAL AND FINANCIAL WELL-BEING OF OUR TEAM MANUFACTURING CORP & COMMERCIAL MANUFACTURING Personal Protective Equipment Flexible scheduling limiting time in-store to least amount of shoppers Option to stay-at-home, incentives for those who choose to remain
Slide 15: Our Key Partners in the Broader Value Chain
AND OUR KEY PARTNERS IN THE BROADER VALUE CHAIN WHO RELY ON US farmers | raw ingredient suppliers | manufacturing | distributors | retailers | consumers PERSEVERING THROUGH TODAY ENSURE HEALTH & SAFETY & MAINTAIN FOOD SUPPLY
Slide 16: Our Teams Have Risen to the Challenge
OUR TEAMS HAVE RISEN TO THE CHALLENGE <15 POSITIVE CASES PERSEVERING THROUGH TODAY >98% CASE FILL RATE ~+3pts CMG MARKET SHARE ENSURE HEALTH & SAFETY & MAINTAIN FOOD SUPPLY Source: IRI 6 weeks ending 04/26/20
Slide 17: Supporting Our Communities: COVID-19 Response
MILLIONS IN CASH, PRODUCT DONATIONS & TECHNICAL RESOURCES TO SUPPORT COVID-19 RESPONSE EFFORTS DONATING PRODUCTS TO HOSPITALS PARTNERING WITH PERSEVERING THROUGH TODAY INVESTING IN EQUIPMENT AND RESOURCES TO PRODUCE MASKS SUPPORT OUR COMMUNITIES
Slide 18: COVID-19 Is Affecting Consumers in Numerous Ways
CONSUMER BEHAVIOR COVID-19 IS AFFECTING CONSUMERS IN NUMEROUS WAYS Shelter in place guidelines MACRO AND RETAIL CHANGES PERSEVERING THROUGH TODAY ADAPT WITH CONSUMER Encouraged to wear masks in public Retailers limiting occupancy and store hours Households experiencing heightened financial pressure
Slide 19: Many Impacts on Our Business
AND HAS HAD MANY IMPACTS ON OUR BUSINESS —Incentives and rewards for front-line employees in manufacturing and sales —Enhanced sanitation —Reduced away from home consumption —Chocolate World store closures —Emerging market softness —Reduced Gum/Mint use while social distancing —E-Commerce accelerati
Slide 20: Securing Tomorrow
CORE BUSINESS STRATEGIES REMAIN INVESTING IN KEY DIFFERENTIATORS FOR LONG-TERM GROWTH SECURING TOMORROW
Slide 21: Strategies Remain
WE DO THIS… BECAUSE WE BELIEVE THIS... There’s more moments of goodness to be made Drive Core U.S. Confection Capture Better For You Snacking Occasions Deliver Profitable International Growth Invest in people, capabilitiesand communities SECURING TOMORROW STRATEGIES REMAIN
Slide 22: Long-Standing Values
Long-standing values make our company a special place to work excellence making a difference integrity togetherness SECURING TOMORROW STRATEGIES REMAIN
Slide 23: Building High Performing and Diverse Teams and Cultures
BUILDING HIGH PERFORMING AND DIVERSE TEAMS AND CULTURES Board of Directors & Executive* 50% $.99 Peer-Leading Overall* 42% Total Workforce 50% on the dollar compared to men** Senior Leaders 32% DIVERSITY GENDER REPRESENTATION ENGAGEMENT 84% +3pts vs worldwide benchmark Enterprise Wide Engagement 89%
Slide 24: Advancing Our Sustainability Work
ADVANCING OUR SUSTAINABILITY WORK SECURING TOMORROW INVESTING FOR GROWTH Released Comprehensive Environmental Policy Released Human Rights Policy Joined Science Based Target Initiative On track to deliver 100% certified cocoa goal in 2020 Signed UN Global Compact
Slide 25: Focusing Where We Can Make the Greatest Impact
FOCUSING WHERE WE CAN MAKE THE GREATEST IMPACT ENVIRONMENT Expand focus from owned facilities to entire greenhouse gas footprint SUSTAINABLE FARMING ETHICAL PRODUCTION PACKAGING AND PLASTIC WASTE CLIMATE CHANGE HUMAN RIGHTS HUMAN RIGHTS PACKAGING SOURCING Specific targets and measurements for those
Slide 26: Our Vision: An Innovative Snacking Powerhouse
OUR VISION: AN INNOVATIVE SNACKING POWERHOUSE #2 IN U.S. SNACKING SECURING TOMORROW STRATEGIES REMAIN Source: IRI ending 12/29/19
Slide 27: Market Share Leadership Across US Confection Segments
HERSHEY MARKET SHARE LEADERSHIP ACROSS US CONFECTION SEGMENTS Source: IRI ending 12/29/19 #1 44.4% #3 7.8% #1 36.7% #3 11.2% SECURING TOMORROW STRATEGIES REMAIN
Slide 28: Diversifying to Capture Incremental Growth
6% 20% 2019 Aspiration 11% 25% 2019 Aspiration DIVERSIFYING TO CAPTURE INCREMENTAL GROWTH BFY SNACKS % OF SALES INTERNATIONAL & OTHER % OF SALES Source: Company Financials; 2019 includes annualized ONE sales SECURING TOMORROW STRATEGIES REMAIN
Slide 29: Balanced Plan for 2020
BALANCED PLAN FOR 2020 MORE BRANDS ACTIVATED STRONG INNOVATION ADVANCE BFY PORTFOLIO
Slide 30: Incremental Investments in Capabilities
INCREMENTAL INVESTMENTS IN CAPABILITIES Digital Commerce ERP / Data / Technology Addressable Media Category Management Supply Chain Revenue Management SECURING TOMORROW INVESTING FOR GROWTH
Slide 31: Delivering Today: Driving Shareholder Value
DELIVERING TODAY FINANCIAL STABILITY TO MANAGE THROUGH THE PANDEMIC DELIVERING PEER-LEADING SHAREHOLDER VALUE DRIVING SHAREHOLDER VALUE
Slide 32: Strong Financial Foundation
STRONG FINANCIAL FOUNDATION $8B Net Sales Adj Operating Profit Margin 21.1% Adj EPS Operating Cash Flow $1.7B $5.78 +7.8% +10% +50bps +2.5% +40% TOTAL SHAREHOLDER RETURN 2019 See appendix for reconciliation between GAAP and Non-GAAP for 2019 and 2018. Source: Company Financials FINANCIAL STABILITY D
Slide 33: Strong Track Record of Returning Cash to Shareholders
$263 $263 $283 $404 $466 $394 $283 $304 $341 $394 $440 $476 $500 $526 $563 $610 $100 $125 $202 $403 $420 $159 $140 $150 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Share Buyback Dividends STRONG TRACK RECORD OF RETURNING CASH TO SHAREHOLDERS Source: Hershey Financials *Excludes shares repurcha
Slide 34: A Solid Investment Over the Long Term
0 100 200 300 400 500 600 700 800 900 1/1/1999 6/1/1999 11/1/1999 4/1/2000 9/1/2000 2/1/2001 7/1/2001 12/1/2001 5/1/2002 10/1/2002 3/1/2003 8/1/2003 1/1/2004 6/1/2004 11/1/2004 4/1/2005 9/1/2005 2/1/2006 7/1/2006 12/1/2006 5/1/2007 10/1/2007 3/1/2008 8/1/2008 1/1/20096/1/2009 11/1/2009 4/1/2010 9/1/
Slide 35: Long-Term Guidance Remains the Same
NET SALES GROWTH +2-4% EPS GROWTH +6-8% LONG-TERM GUIDANCE REMAINS THE SAME SHAREHOLDER RETURN DRIVING SHAREHOLDER VALUE
Slide 36: Years of Managing Through Challenging Moments in Time
126 YEARS OF MANAGING THROUGH CHALLENGING MOMENTS IN TIME “The more closely we work together, the more effectively we can contribute to the better health of mankind.” Milton Hershey 1894 2020
Slide 37: #strongertogether
#strongertogether
Slide 38: Items of Business: Questions and Answers
ITEMS OF BUSINESS ELECTION OF 13 DIRECTORS RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS ADVISE ON NAMED EXECUTIVE OFFICER COMPENSATION VOTING BUSINESS REVIEW QUESTIONS AND ANSWERS
Slide 39: Questions & Answers
QUESTIONS & ANSWERS Keep questions brief Limit to one topic *All questions and answers will be posted on the Investor Relations’ website by May 19th, including those we are unable to get to during the live meeting today
Slide 40: Items of Business: Voting Results
ITEMS OF BUSINESS ELECTION OF 13 DIRECTORS RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS ADVISE ON NAMED EXECUTIVE OFFICER COMPENSATION VOTING BUSINESS REVIEW QUESTIONS AND ANSWERS VOTING RESULTS
Slide 41: Hershey's
HERSHEYS
Slide 42: Reconciliation of GAAP to Non-GAAP Information, 2019
Appendix Reconciliation of GAAP to Non-GAAP Information For the year ended December 31, 2019
Slide 43: Reconciliation of GAAP to Non-GAAP Information, 2018
Appendix Reconciliation of GAAP to Non-GAAP Information For the year ended December 31, 2018