Hormel Foods Corporation · NYSE:HRL
Hormel Foods — Q4 2022 Earnings Presentation
23 slides from Hormel Foods's earnings presentation, Nov 30, 2022
Slide 1: Supplemental Information Fourth Quarter Fiscal 2022
SUPPLEMENTAL INFORMATION Fourth Quarter Fiscal 2022 1 THE JENNIE-O® BRAND, CATEGORY LEADER AND TRUSTED BRAND FOR TURKEY PRODUCTS, RECENTLY LAUNCHED ITS “QUEEN OF PROTEIN” CAMPAIGN TO SHOWCASE THE PROTEIN THAT REIGNS SUPREME — TURKEY.
Slide 2: Disclaimers
Quarterly Disclaimers DISCLAIMERS Supplement Forward-Looking Statements This presentation contains “forward-looking” information within the meaning of the federal securities laws. The “forward-looking” information may include statements concerning the Company’s outlook for the future as well as othe
Slide 3: Recognized for Our Commitment
ESG Quarterly UPDATE Supplement Recognized for Our Commitment To consumers, team members and the communities where we live and work Named One of the Top Corporate Citizens in the U.S. Recognized for Continued ESG Efforts Hormel Foods was ranked for the first time on The 2022 ranking recognizes the I
Slide 4: Keeping Employee Safety the Top Priority
EMPLOYEE Quarterly SAFETY Supplement Keeping Employee Safety the Top Priority Continuing a long track record of better-than-industry* safety performance 10.0 Hormel Foods 9.0 Industry Average 8.0 Total Case Incident Rate* 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 *U.S. Bureau of Labor Statistics Injury and Il
Slide 5: Fiscal 2022 Business Highlights
FISCAL 2022 Fiscal 2022 HIGHLIGHTS Fiscal 2022 Business Highlights • We reported record sales and double-digit profit growth compared to fiscal 2021, benefitting from a full-year contribution from the Planters® business. • We made considerable progress on our six strategic priorities. • We delivered
Slide 6: Delivered Record Sales and Strong Profit Growth
FINANCIAL Fiscal 2022 METRICS Delivered Record Sales and Strong Profit Growth Record sales driven by Planters® business and growth from foodservice businesses Net Sales Operating Income Integrated Planters® (in billions) (in billions) Business $12.46 +9% $1.31 3-yr CAGR $11.39 +17% $9.50 $9.61 $1.12
Slide 7: Fiscal 2022 Channel Highlights
CHANNEL Fiscal 2022 HIGHLIGHTS Fiscal 2022 Channel Highlights Growth across the company’s U.S. channels, led by foodservice Note: The fourth quarter and full year of fiscal 2022 reflect one fewer week compared to the prior year. Fourth Quarter YTD Q4 Net Sales YoY Percent Change (%) YoY Percent Chan
Slide 8: Fiscal 2022 Highlights - Our Six Strategic Priorities
SIX STRATEGIC Fiscal 2022 PRIORITIES Fiscal 2022 Highlights - Our Six Strategic Priorities Protect & grow Amplify scale in snacking Enhance growth of our ethnic & Food our core brands & entertaining Forward portfolio ▪ U.S. retail channel net sales +7% in fiscal 2022 ▪ Continued growth from Columbus
Slide 9: Generating Strong and Consistent Cash Flow
OPERATING CASH Fiscal 2022 FLOW & LEVERAGE Generating Strong and Consistent Cash Flow Supporting our disciplined capital allocation strategy and shareholder commitments Operating Cash Flow (in billions) Cash & Mkt Sec. Debt $1.24 $1.13 $1.13 $1.0B $3.3B $1.00 $0.92 Current Net EBITDA (LTM) * Debt/EB
Slide 10: Returning Cash to Shareholders
COMMITMENT TO Fiscal 2022 DIVIDEND Returning Cash to Shareholders Announced 57th consecutive increase to the annual dividend* 57 12% 10 Year CAGR $1.04 $1.10 Consecutive Years of Dividend Increases $0.98 $0.93 $0.75 $0.84 94+ $0.68 Years of Dividend Payments $0.58 Without Interruption $0.50 $0.40 $0
Slide 11: Additional Financial Disclosures
ADDITIONAL Fiscal 2022 DISCLOSURES Additional Financial Disclosures • Advertising spend for fiscal 2022 was $157 million, compared to $139 million in the prior year, with higher investments in all segments. • The effective tax rate was 21.7%, compared to 19.3% for the previous year. Last year's rate
Slide 12: Taking the Next Step in Our Evolution - GoFWD
GoFWD Fiscal 2022 INITIATIVE Taking the Next Step in Our Evolution - GoFWD Better aligning our structure with our proven strategy New Strategic Operating Model Implementation Focus • Adopting new organizational design and management structures • Continuing to fully integrate Jennie-O Turkey Store in
Slide 13: Fourth Quarter Business Highlights
BUSINESS Fourth Quarter HIGHLIGHTS Fiscal 2022 Fourth Quarter Business Highlights • Delivered diluted earnings per share comparable with record results last year, which included an additional week of sales • Drove operating income growth of +3%, to $367 million • Made progress across our supply chai
Slide 14: Fourth Quarter Financial Metrics
Q4 FINANCIAL Fourth Quarter METRICS Fiscal 2022 Fourth Quarter Financial Metrics Diluted earnings per share comparable with record results last year Note: The fourth quarter and full year of fiscal 2022 reflect one fewer week compared to the prior year. Volume Net Sales Diluted EPS 1.38B -16% -5% $0
Slide 15: Actions to Offset Inflationary Pressures are Working
PROFITABILITY Fourth Quarter MARGINS Fiscal 2022 Actions to Offset Inflationary Pressures are Working Margin improvement driven by Jennie-O Turkey Store and strategic pricing actions Gross Profit Margin Operating Margin (% of Net Sales) (% of Net Sales) 17.3% 17.4% 11.2% 16.9% $3.03B $3.03B 16.7% +6
Slide 16: Refrigerated Foods
REFRIGERATED Fourth Quarter FOODS RESULTS Fiscal 2022 Refrigerated Foods Lower commodity profitability and higher operational costs impacted results Note: The fourth quarter of fiscal 2022 reflects one fewer week compared to the prior year. Segment Results Business Highlights Q4 • Products such as H
Slide 17: Grocery Products
GROCERY PRODUCTS Fourth Quarter RESULTS Fiscal 2022 Grocery Products Organic top-line growth was offset by continued inflationary pressures Note: The fourth quarter of fiscal 2022 reflects one fewer week compared to the prior year. Segment Results Business Highlights Q4 • Net sales increased due to
Slide 18: Jennie-O Turkey Store
JENNIE-O TURKEY Fourth Quarter STORE RESULTS Fiscal 2022 Jennie-O Turkey Store Delivering another quarter of growth despite challenges related to HPAI Note: The fourth quarter of fiscal 2022 reflects one fewer week compared to the prior year. Segment Results Business Highlights Jennie-O Turkey Store
Slide 19: International & Other
INTERNATIONAL & Fourth Quarter OTHER RESULTS Fiscal 2022 International & Other Growth in China was offset by lower export sales and higher logistics costs Note: The fourth quarter of fiscal 2022 reflects one fewer week compared to the prior year. Segment Results Business Highlights International & O
Slide 20: Fiscal 2023 Outlook
FISCAL 2023 Quarterly OUTLOOK Supplement Fiscal 2023 Outlook Expecting to grow both sales and earnings in fiscal 2023 Fiscal 2023 Outlook Commentary Guidance Comp. vs FY ‘22 • We enter fiscal 2023 well-positioned for the current Net Sales (in billions) $12.6 - $12.9 +1 - 3% macroeconomic climate and
Slide 21: Additional Information
David Dahlstrom Additional Director of Investor Relations Information dwdahlstrom@hormel.com 21
Slide 22: Non-GAAP Financial Measures
NON-GAAP Quarterly Non-GAAP Financial Measures APPENDIX Supplement NON-GAAP FINANCIAL MEASURES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES The non-GAAP adjusted financial measurements of organic volume and organic net sales are presented to provide investors with additional information to facilita
Slide 23: Non-GAAP Financial Measures
NON-GAAP Quarterly Non-GAAP Financial Measures APPENDIX Supplement NON-GAAP FINANCIAL MEASURES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES The non-GAAP adjusted financial measures of net debt, EBITDA Net Debt and Adjusted EBITDA are useful to management and investors Quarter Ended as indicators of