The Campbell's Company · NASDAQ:CPB
The Campbell's — Campbell Soup — Proxy Contest (October 2018)
41 slides from The Campbell's's proxy contest presentation, Oct 12, 2018
Slide 1: Campbell Files Investor Presentation (press release)
If you have questions or need assistance, please contact: INNISFREE M&A Incorporated Shareholders Call Toll-Free: (877) 687-1866 Banks & Brokers Call Collect: (212) 750-5833 FOR IMMEDIATE RELEASE INVESTOR CONTACT: MEDIA CONTACT: Ken Gosnell Thomas Hushen (856) 342-6081 (856) 342-5227 ken_gosnell@cam
Slide 2: Preliminary Working Draft October 12, 2018
Preliminary Working Draft October 12, 2018
Slide 3: Forward-Looking Statements
Forward-Looking Statements This presentation contains “forward-looking statements” that reflect our current expectations about the impact of future plans and performance on our business or financial results. These forward-looking statements rely on a number of assumptions and estimates that could be
Slide 4: Important Additional Information and Where to Find It
Important Additional Information and Where to Find It Campbell has filed a definitive proxy statement on Schedule 14A and form of associated GOLD Proxy Card with the Securities and Exchange Commission (“SEC”) in connection with the solicitation of proxies for its 2018 Annual Meeting of Shareholders
Slide 5: Overview
4 Overview Campbell: Where We Areand How We Got Here The Campbell Board’s Plan to Revitalize a Great Company Third Point’s Empty Agenda The Situation OurSolution TheRisk The Campbell Board Strongly Believes Its Strategic Plan to Improve the Focus and Financial Performance of the Company Represents t
Slide 6: The Situation: Campbell: Where We Are and How We Got Here
5 The Situation:Campbell: Where We Are and How We Got Here
Slide 7: Factors Impacting Branded Food Industry Growth Has Slowed Over a Decade
Consumer megatrend of health & well-beingEvolving consumer preferences Inflationary cost environment Demographic shiftsDynamic retail environment and new channelsGrowth of private label Reset growth expectations for certain brands and categoriesContinue driving cost efficienciesInvest aggressively i
Slide 8: Universal Acknowledgment That All Food Companies Must Adapt
7 Sources: Wall Street Research. Universal Acknowledgment That All Food Companies Must Adapt Their Strategies and Financial Targets “The US Packaged Food industry is undergoing disruptive change: decelerating sales growth, changing food preferences… driving a new era of industry challenges.” UBS (Au
Slide 9: Food Industry Faced Significant Challenges That Require Action
8 Sources: Wall Street Research. We and the Rest of the Food Industry Have All Faced Significant Industry Challenges That Require Action “From an industry standpoint, we continue to see pretty challenging conditions, including a dynamic retail and consumer landscape, a very competitive environment a
Slide 10: Campbell Pursued a Multi-Faceted Growth Strategy
Specifically, Campbell Pursued a Multi-Faceted Growth Strategy Created a platform to penetrate the growing sector via Campbell Fresh Adapted innovation to drive growth and consumer engagementPursued acquisitions of disruptor and snacking brands to align with consumer trendsLeveraged venture capital
Slide 11: Historically, Our Returns Were in Line with Peers Through Fiscal 2016
Historically, Our Returns Were in Line with Peers Through Fiscal 2016 10 Source: FactSet as of August 31, 2016.Note: Peers considered include selected food companies with portfolios with center-of-store exposure; Kraft Heinz excluded because of lack of historical data. FY2016 end reflects August 31,
Slide 12: Our Performance Since FY2016 Has Been Unacceptable
11 30-Year Stock Price Performance - Campbell vs S&P 500 Our Performance Since FY2016 Has Been Unacceptable,but Is a Break from Our 30 Year History… Source: Bloomberg as of October 5, 2018.
Slide 13: Not Unlike Recent Share Price Declines in the Food Industry
…And Is Not Unlike the Recent Share Price Declines in the Overall Food Industry 12 Source: Market data as of October 5, 2018.1. Center of Store Peers includes General Mills, Conagra, Kellogg, J.M. Smucker and Kraft Heinz; Market Weighted. FY2016 End considered August 31, 2016 (day prior to FY2016 Fu
Slide 14: The Board Appropriately Took Action During Underperformance
The Board Appropriately Took Action During This Period of Underperformance Numerous actions and changes in strategy taken under prior CEO had mixed successCost cutting was highly successful and pivot to snacking was well-groundedHowever, Fresh and core businesses were more challengedThe Board recogn
Slide 15: We Have Publicly Assessed Our Own Performance with Candor
We Have Publicly Assessed Our Own Performance with Candor “A person who never made a mistake never tried anything new.” - Albert Einstein 14 Challenges Strengths “We lost focus strategically. We had too many initiatives that made the Company unnecessarily complex.”“We aggressively pursued the import
Slide 16: Our Solution: The Campbell Board's Plan to Revitalize a Great Company
15 Our Solution:The Campbell Board’s Plan to Revitalize a Great Company
Slide 17: What Campbell Is Doing Right Now to Improve Performance
What Campbell Is Doing Right Now to Improve Performance The Campbell Board is active and engaged, having identified the need for change, and is implementing a plan to make Campbell strongerSimplify, focus & optimize portfolio to focus on core North American marketDivest non-core businesses, using th
Slide 18: Timeline of Key Events 2016-2018
2016 2018 2017 May 23Roberto Leopardi named President, Meals & Beverages Dec 18Campbell announces acquisition of Snyder's-Lance Mar 21 Tessa Hilado added to the Board Apr 5Campbell names Luca Mignini COO and Ana Dominguez President of C-Fresh Jul 11Diego Palmieri named CMO and VP, Meals & Beverages
Slide 19: Strategy and Portfolio Review Highlights
Highly engaged Board and Leadership teamBest-in-class outside advisors engagedObjective review of alternativesConsidered full range of strategic options to maximize shareholder valueDivest assets and businessesEnhance strategy and marginsSplit the companySale of companyConsidered all factors that le
Slide 20: Campbell's Strategic Path Forward
Simplify, focus & optimize portfolio Divest non-core businesses, including Campbell International and Campbell Fresh; proceeds to be used to significantly reduce debt; target of 3.0x EBITDA1 leverage ratio by end of FY2021 Improve execution, speed & efficiency, including an additional $150M cost sav
Slide 21: Our Focus Will Build a Stronger Company
20 Sources: Public Filings.1. IRI MULO L52W through 6/24/18; IRI MULO L52W through 7/29/18; Market Position determined by Manufacturer rank.2. IRI All-Outlet for 52 Weeks Ending 7/29/18.3. Campbell's consumer perception survey conducted July 2018. Leading market share in 6 categories (#1 or #2) incl
Slide 22: Investing in Snacks and Meals & Beverages
Most recommended pretzel brand and highest customer satisfactionInvesting in innovations and marketing Investing to capture incremental revenue& marginStrong real food credentials, healthier ingredients Investing in innovation, marketing and e-commerceLeveraging organic credentials to grow share Lev
Slide 23: Pursuing Non-Core Business Divestitures
Proposed divestitures represented ~$2.1 billion in annual net sales (FY2018)Financial advisors engaged / work commencedProceeds to be used to pay down debt and strengthen balance sheet; target of 3.0x EBITDA1 leverage ratio by the end of 2021Additional actions to further focus and refine portfolio a
Slide 24: Increased Cost Savings and Capital Efficiency
23 Expanding cost savings efforts by $150 million by FY2022Streamline organization, expand ZBB and optimize manufacturing networkIncremental to existing $500 million program and previously announced $295 million in target savings from Snyder’s-Lance integrationTotal savings target of $945 million by
Slide 25: Continued Commitment to Returning Capital to Shareholders
$9.1 billion of cumulative dividends paid in last 28 fiscal years~ $11.2 billion of cumulative share repurchases in last 28 fiscal years $20.3 billion of total capital returned to shareholders in last 28 fiscal years Total Capital Return 24 Growth in Dividend Paid/Share Campbell remains committe
Slide 26: A More Focused Company That Preserves All Strategic Alternatives
Source: Company presentations.1. A non-GAAP reconciliation is not provided since certain items are not estimable, such as pension and postretirement mark-to-market adjustments, and these items are not considered to reflect the company’s ongoing business results. STRONG PLAN: A More Focused Company T
Slide 27: Transformed Management Team with Deep Bench of Talent
Name Experience Keith McLoughlinInterim President and Chief Executive Officer Anthony DiSilvestroSVP & Chief Financial Officer Luca MigniniSVP & Chief Operating Officer Roberto LeopardiPresident, Campbell Meals & Beverages Carlos Abrams-RiveraPresident, Campbell Snacks Name Experience Adam CiongoliS
Slide 28: Our CEO Search Is Well Underway
The Board took decisive action to install a highly qualified interim CEO to lead the Company until the search process is completeThe Board, with the support of leading candidate assessment and executive search firms, has been examining qualified candidates for months who possess a track record of pr
Slide 29: Strong Board and Governance Actions
11 out of 12 directors are independent (Mr. Keith McLoughlin, as the interim CEO, is the only management director, and was independent when appointed to the Board)4 out of 12 directors are femaleOngoing refreshment: 4 new independent directors added since 2016, and 5 since 2014 Strong and timely act
Slide 30: The Campbell Board Has Relevant Skills That Align with Our Strategy
STRONG BOARD: The Campbell Board has Relevant Skills that Align with our Strategy 29 Director Nominees Senior Leadership 75% Food or Consumer Products Industry 66% Marketing 50% Strategic Transactions; M&A 66% Capital Allocation 92% Financial Expertise 50% Information Technologies Significant Shareh
Slide 31: The Risk: Third Point's Empty Agenda
30 The Risk:Third Point’s Empty Agenda
Slide 32: All Approaches Presented by Third Point Appear Aimed at a Sale
All Approaches Presented by Third Point Appear to be Aimed Exclusively at a Sale of the Company “Campbell is an iconic asset that could command an attractive price from multiple parties.”Third Point, Presentation, Oct. 1, 2018 “Only a reconstituted Board… will be able to objectively explore all stra
Slide 33: Campbell's Long-Term Performance Is Misconstrued by Third Point
8.2% annualized TSR over 30 year period despite recent performance Source: Bloomberg, as of October 5, 2018.Note: FY2016 End considered August 31, 2016 (day prior to FY2016 Full Year Earnings Release).1. Third Point LLC’s “Refresh the Recipe” presentation, released October 1, 2018. Third Point refer
Slide 34: Third Point's Slate Is Not in the Best Interest of All Shareholders
Third Point’s Slate Is Not in the Best Interest of All Shareholders Director nominees are not qualified to oversee the CompanyNo incremental ideas proposed for how to run the businessDespite claiming openness, has publicly called for a sale as the only option with a recommended range of acquisition
Slide 35: Third Point's Empty Plan Is Full of Generalizations
Third Point’s Empty Plan Is Full of Simple Generalizations and Vague Recommendations Third Point’s “Plan” Underscores Their SuperficialUnderstanding of the Company Generalizations Third Point Action Plan? “Focus on growing soup business” O None “Stem margin declines in fresh food through more discip
Slide 36: Third Point Has Failed to Put Forward Any New Ideas
Third Point Has Failed to Put Forward Any Ideas Not Already Considered or Included in the Board’s Plan Third Point’s Ideas New Idea? Campbell’s Plan Turnaround Soup No! Outlined plan on 8/30 Stabilize Fresh Food No! Divesting C-Fresh; outlined rationale on 8/30 Renovate & Innovate No! Core tenet of
Slide 37: Third Point's Nominees Lack the Experience of Our Current Board
Third Point’s Nominees Lack the Experience of our Current Board * In the past 5 years 36 Existing Board Third Point Nominees Public Company CEO Experience 5 P 1 O Experience in Food / CPG Industry 8 P 5 O Financial Expertise 6 P 4 O Operational Experience 9 P 3 O Marketing Experience 6 P 3 O Outside
Slide 38: Third Point Poses an Unacceptable Risk
Third Point Poses an Unacceptable Risk 37 Third Point has not offered a thoughtful plan to improve Campbell Third Point’s plan is full of generalizations and business school buzz words Third Point has a one point agenda: to sell the Company
Slide 39: Our Commitment: Full Commitment to Maximizing Shareholder Value
Our Commitment:The Campbell Board’s Full Commitment to Maximizing Shareholder Value 38
Slide 40: The Campbell Board's Commitment
39 The Campbell Board’s Commitment After a thorough, Board-led strategic review, Campbell strongly believes it has:Plan in place to maximize value for all shareholdersTeam actively executing against the planActive Board with the skill and experience to oversee the planOur Commitment to You:The Campb
Slide 41: Preliminary Working Draft October 12, 2018
Preliminary Working Draft October 12, 2018