Conagra Brands, Inc. · NYSE:CAG
Conagra Brands — Investor Day (February 2020)
119 slides from Conagra Brands's investor day presentation, Feb 18, 2020
Slide 1: CAGNY 2020
Exhibit 99.2 C A G N Y 2020 1Exhibit 99.2 C A G N Y 2020 1
Slide 2: Legal Disclosure Note on Forward-Looking Statements
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: What We Want You to Take Away from Today
What We Want You to Take Away from Today 1 We compete in attractive categories with consumer-preferred brands We deploy our assets via modern, repeatable, and scalable 2 processes that work 3 We have made tremendous progress, and despite Q3 category softness, have a long runway of growth ahead 3What
Slide 4: Agenda
Agenda CONAGRA BRANDS OVERVIEW 1. OUR BRAND BUILDING MODEL 2. WHAT COMES NEXT 3. 4Agenda CONAGRA BRANDS OVERVIEW 1. OUR BRAND BUILDING MODEL 2. WHAT COMES NEXT 3. 4
Slide 5: Agenda: Conagra Brands Overview
Agenda CONAGRA BRANDS OVERVIEW 1. OUR BRAND BUILDING MODEL 2. WHAT COMES NEXT 3. 5Agenda CONAGRA BRANDS OVERVIEW 1. OUR BRAND BUILDING MODEL 2. WHAT COMES NEXT 3. 5
Slide 6: Conagra Brands Is a Highly Focused Portfolio
Conagra Brands Is a Highly Focused Portfolio Net Sales, Last 4 Quarters Net Sales, Last 4 Quarters Domestic vs. International Retail vs. Foodservice International Foodservice 9% 10% ~$10.5B ~$10.5B 91% 90% Retail Domestic 6 Source: Conagra Internal Data, Data for most recent 4 quarters ended Q2 FY20
Slide 7: We Are the Fifth Largest Food Company in America
We Are the Fifth Largest Food Company in America Food xBeverage Total Retail Dollar Sales in Billions (U.S. Retail – Latest 52 Weeks ended January 19, 2020) $22.5 $18.5 $12.2 $12.0 $11.6 $8.9 $8.6 $8.6 $8.6 $7.6 $7.5 $6.6 $5.4 $4.6 $4.3 7 Source: IRI POS, MULO+C, Latest 52 weeks ended January 19, 20
Slide 8: We Compete in Attractive Categories
We Compete in Attractive Categories Our categories are growing +2.1% vs. YA, outpacing Food at +1.6% 1 71% of portfolio resides in growing categories, compared to 41% for portfolio owned five years ago Private label development remains low at 16% in Conagra categories vs. 21% in Food overall 2 We ha
Slide 9: Spanning Three Domains with Iconic and Emerging Brands
Spanning Three Domains with Iconic and Emerging Brands Growth Cash Frozen Snacks Staples 41% 25% 34% % of Retail Dollar Sales 9 Source: IRI POS, MULO+C, Latest 52 weeks ended January 19, 2020Spanning Three Domains with Iconic and Emerging Brands Growth Cash Frozen Snacks Staples 41% 25% 34% % of Ret
Slide 10: Conagra Has the Largest Frozen Retail Business
nd Conagra Has the 2 Largest Frozen Retail Business Total Frozen (Retail Dollars Sales in Billions) $7.4B $5.1B $3.8B $2.8B $1.9B 10 Source: IRI POS, MULO+C, L52 week ended January 19, 2020nd Conagra Has the 2 Largest Frozen Retail Business Total Frozen (Retail Dollars Sales in Billions) $7.4B $5.1B
Slide 11: A $2 Billion Ready-to-Eat Snacking Portfolio
…and a $2 Billion Ready-to-Eat Snacking Portfolio 11 Source: IRI POS, MULO+C, Latest 52 weeks ended January 19, 2020…and a $2 Billion Ready-to-Eat Snacking Portfolio 11 Source: IRI POS, MULO+C, Latest 52 weeks ended January 19, 2020
Slide 12: Our Snacking Portfolio Is Among the Fastest Growing
Our Snacking Portfolio Is Among the Fastest Growing Ready-to-Eat Snacking Universe – Top Manufacturer Overview (Retail Dollar % Change vs. YA) +8.6% 5.6% 4.9% 3.7% 3.4% 2.6% 2.2% 2.1% 1.8% 1.7% 1.2% 1.1% 0.8% -1.3% -2.4% 12 Source: IRI POS, MULO+C, Latest 52 weeks ended January 19, 2020 Note: Snacki
Slide 13: Portfolio Breadth Enables Us to Access More Demand
Portfolio Breadth Enables Us to Access More Demand Better For You Ethnic Indulgent Frozen Single Serve Meal Demand Conagra’s brands reach 61% more of available demand vs. nearest competitor 13 Source: IRI Household Panel, Total US All Outlets, Latest 52 weeks ended January 26, 2020, Conagra Frozen S
Slide 14: Fueled by a Differentiated Culture
Fueled by a Differentiated Culture Agile, perpetually reinventing Lean, right-sized organization how we work Disciplined resource deployment Collaborative, silo-free Highly energized, motivated people Entrepreneurial mindset 14Fueled by a Differentiated Culture Agile, perpetually reinventing Lean, r
Slide 15: Perpetually Reshaping the Portfolio for Better Growth and Margins
We Are Committed to Perpetually Reshaping the Portfolio for Better Growth and Better Margins Divest brands Add new brands Strengthen the that don’t fit to make us brands we own or are stronger chronic drags 15We Are Committed to Perpetually Reshaping the Portfolio for Better Growth and Better Margin
Slide 16: Agenda: Our Brand Building Model
Agenda CONAGRA BRANDS OVERVIEW 1. OUR BRAND BUILDING MODEL 2. WHAT COMES NEXT 3. 16Agenda CONAGRA BRANDS OVERVIEW 1. OUR BRAND BUILDING MODEL 2. WHAT COMES NEXT 3. 16
Slide 17: Our Brand-Building Approach Is Rooted in The Conagra Way
Our Brand-Building Approach Is Rooted in “The Conagra Way” Enabled by Disciplined Repeatable & Relentlessly differentiated portfolio scaleable principle-based capabilities management processes 17Our Brand-Building Approach Is Rooted in “The Conagra Way” Enabled by Disciplined Repeatable & Relentless
Slide 18: Strong, Consistent Marketing Investments
We Support Our Brands with Strong, Consistent Marketing Investments Total Marketing Investments Consistent Over Time (Total Marketing Spend as % of Gross Sales) Steady Investment Fiscal 2018 Decreased Low ROI Increased High ROI Four Fiscal Quarters A&P Initiatives Retailer & Packaging Ended Q2 FY20
Slide 19: Spend Focused on Aggressive Innovation in Frozen and Snacks
Our Spend is Focused on Supporting Aggressive Innovation in Frozen and Snacks Marketing Focused on Growth Businesses Reported Net Sales Total Marketing Spend ~80% ~65% ~35% ~20% Frozen & Snacks Staples 19 Source: Conagra Reported Financials, Conagra Internal Data Note: Total Marketing Investments in
Slide 20: Our Innovation is Working
Our Innovation is Working… % of Annual Retail Sales from Innovation (Total Conagra Brands, Rolling 3 Years) 18% 17% 12% 9% 1 1 FY15 FY16 FY19 CY19 20 1. IRI POS, MULO+C, Conagra Brands, Fiscal Year 2019, Calendar Year 2019 (Data ended December 22, 2019)Our Innovation is Working… % of Annual Retail S
Slide 21: Innovation Has Outperformed Peers Overall
…and Has Outperformed Peers, Both Overall… Innovation TPD Growth Innovation Retail Dollar Sales Growth 1 1 (Year 1 to Year 2, FY17-19 ) (Year 1 to Year 2, FY17-19 ) 245% 117% 71 pts 44 pts 174% 72% All Parent Companies Conagra All Parent Companies Conagra 21 Source: IRI POS, MULO+C, Conagra Brands,
Slide 22: Outperforming in Frozen and Snacks Growth Domains
…and in Our Growth Domains of Frozen and Snacks Frozen Single Serve Meals Innovation Sales Ready-to-Eat Snacks Innovation TPDs (Retail Dollar Sales in MM) (Total Points of Distribution) $61 200 163 139 $32 $10 Peer 1 Peer 2 Conagra Peer 1 Peer 2 22 Source (Left Chart): IRI Market Advantage, POS, New
Slide 23: MEGA and POWER Platforms Show Our Model Is Sustainable
MEGA and POWER Platforms Show Our Model Is Sustainable MEGA Nearly $150MM in Retail Sales POWER Reaches $100MM in Retail Sales $149 $101 $88 $122 $38 $41 $15 FY17 FY18 FY19 L52 FY17 FY18 FY19 L52 23 Source: IRI MA POS data, CAG Custom Category, TUS-MULO, Retail Sales, Conagra Fiscal Years, Latest 52
Slide 24: We Take a Modern Approach to Brand Building
We Take a Modern Approach to Brand Building Superior Food pep Always-On, Customer Tailored Collaboration Communication 24We Take a Modern Approach to Brand Building Superior Food pep Always-On, Customer Tailored Collaboration Communication 24
Slide 25: We Take a Modern Approach to Brand Building
We Take a Modern Approach to Brand Building Superior Food pep Always-On, Customer Tailored Collaboration Communication 25We Take a Modern Approach to Brand Building Superior Food pep Always-On, Customer Tailored Collaboration Communication 25
Slide 26: We Combine Science and Art to Create Superior Food
We Combine Science and Art to Create Superior Food Culinarily Advantaged Chefs State of the Art Facilities Granular Behavioral Data Data Integration 26 Collaborative Innovation CouncilsWe Combine Science and Art to Create Superior Food Culinarily Advantaged Chefs State of the Art Facilities Granular
Slide 27: Our Aim Is to Design Provocative Food Experiences
Our Aim Is to Design Provocative Food Experiences Bigger & Bolder Modern Health Experiential 27 Note: Packaging under development; subject to changeOur Aim Is to Design Provocative Food Experiences Bigger & Bolder Modern Health Experiential 27 Note: Packaging under development; subject to change
Slide 28: Healthy Choice Innovation Outperforms Peers
Superior Food Is Driving Healthy Choice Innovation to Outperform Peers 1 Top 10 BFY Frozen Single-Serve Meal Launches Healthy Healthy Healthy Healthy Healthy PP ee er 1 er PP ee ee r 1 r Healthy PP ee ee r 1 r Healthy Choice Choice Choice Choice Choice Choice Choice Product 1 Product 2 Product 3 Hea
Slide 29: Consumer Pull at Shelf on Indulgent Meals
Superior Food Is Driving Consumer Pull at Shelf on Indulgent Meals Innovation Indulgent Frozen Single-Serve Meal Launches Conagra driving 35% of segment innovation dollars Peer Peer Peer Company 2 Company 3 Company 1 29 Source: IRI POS, Conagra Custom Category, MULO+C, Latest 52 Weeks ended January
Slide 30: Slim Jim Innovation Is Outperforming Peers
Superior Slim Jim Innovation Is Outperforming Peers Meat Stick Launches Slim Jim innovation 2.8x the size of closest peer Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 30 Source: IRI POS, Conagra Custom Category, MULO+C, Latest 52 Weeks ended January 19, 2020, Meat SticksSuperior Slim Jim Innovation Is Outperf
Slide 31: We Take a Modern Approach to Brand Building
We Take a Modern Approach to Brand Building Superior Food pep Always-On, Customer Tailored Collaboration Communication 31We Take a Modern Approach to Brand Building Superior Food pep Always-On, Customer Tailored Collaboration Communication 31
Slide 32: Our Portfolio Is Vital to Retailers
Our Portfolio Is Vital to Retailers Compete in #1 in number of aisles Little to no presence in 9 out of 10 with greater than 50% bottom 10 aisles top aisles, which drive household penetration ~75% of Food $ sales 32 Source: IRI Household Panel, Total US All Outlets, Latest 52 Weeks ended January 26,
Slide 33: Our Portfolio Is a Strong Traffic Driver for Retailers
Our Portfolio Is A Strong Traffic Driver for Retailers Total In-Store Trips Where a Company’s Product Is Purchased (Food xBeverage, U.S. Retail – Latest 52 Weeks ended January 26, 2020, in billions) 3.3 3.0 2.3 2.2 1.8 1.8 1.7 1.7 1.6 1.5 1.5 1.0 1.0 0.9 0.8 33 Note: Packaging under development; sub
Slide 34: Driving Growth in Frozen Meals and Snacks
We Are Driving Growth in Frozen Meals and Snacks Frozen Single Serve Meals Ready-to-Eat Snacks (Retail Dollar Sales % Change vs. YA) (Retail Dollar Sales % Change vs. YA) +5.7% +3.6% +5.0% +4.5% (0.2)% (2.9)% Category Conagra Brands Category xConagra Category Conagra Category xConagra 34 Source (Lef
Slide 35: Snacks Is Outperforming Across Categories
Snacks Is Outperforming Across Categories Conagra Growth vs Category excl. Conagra (Dollar Sales % Change vs. YA) Meat Snacks Microwave Popcorn Ready-to-Eat Popcorn +230 bps +800 bps +70 bps Seeds Hot Cocoa +770 bps +690 bps 35 Source: IRI POS, Conagra Custom Categories, MULO+C, Latest 52 Weeks ende
Slide 36: Investments with Retailers Go Far Beyond Traditional Areas
Investments with Retailers Go Far Beyond Traditional Areas Traditional Retailer Investments Non-Traditional Retailer Investments Incremental Shelf Space Online Merchandising & Activation Retailer Data Access In-Store Displays Circulars, Featured Ads Retailer Media Services 36Investments with Retaile
Slide 37: Partnering with Retailers to Drive Distribution
We Are Partnering with Retailers to Drive Distribution Traditional Distribution Non-Traditional Distribution Grocery & Mass Dollar Club C-Store Checkout Lane 37 Note: Packaging under development; subject to changeWe Are Partnering with Retailers to Drive Distribution Traditional Distribution Non-Tra
Slide 38: Partnering with Retailers on In-Store Activation
We Are Partnering with Retailers on In-Store Activation Signage, Sampling, and Endcaps Disruptive Merchandising 38 Note: Packaging under development; subject to changeWe Are Partnering with Retailers on In-Store Activation Signage, Sampling, and Endcaps Disruptive Merchandising 38 Note: Packaging un
Slide 39: Unique Product Activations on E-Commerce
We Are Leveraging Unique Product Activations on E-Commerce Modern Health Solution Bundles Occasion Boxes Online Exclusives Attributes 39We Are Leveraging Unique Product Activations on E-Commerce Modern Health Solution Bundles Occasion Boxes Online Exclusives Attributes 39
Slide 40: Conagra E-Commerce Is Accelerating and Gaining Share
Conagra E-Commerce Is Accelerating and Gaining Share Conagra E-Commerce Sales Conagra E-Commerce vs. Category Peer Set (% Change vs. YA) (% Share of Dollar Sales) +68.2% Total F&B 3.5% +53% 3.3% +48% 2.1% 2.1% 1.4% 1.3% 1.0% 0.8% CY 2016 CY 2017 CY 2018 CY 2019 CY 2016 CY 2017 CY 2018 CY 2019 Top 10
Slide 41: Combining Traditional and Non-Traditional Retailer Investments Is Synergistic
Combining Traditional and Non-Traditional Retailer Investments Is Synergistic Event Performance When Combining “Traditional” and “Non-Traditional” Investments vs. Only “Traditional” Investments +31% +35% +40% Consumer Trips Units Purchased $ Spent 41 Source: Customer data for Conagra-specific events
Slide 42: We Take a Modern Approach to Brand Building
We Take a Modern Approach to Brand Building Superior Food pep Always-On, Customer Tailored Collaboration Communication 42We Take a Modern Approach to Brand Building Superior Food pep Always-On, Customer Tailored Collaboration Communication 42
Slide 43: Media Investments Shifted to High Reach Digital Vehicles
Our Media Investments Have Shifted from High-Frequency Mass Vehicles to High Reach Digital Vehicles Conagra Media Spend Digital Mass 19% 72% eCommerce on Retailer Platforms 81% Search Social 28% FY15 H1 FY20 43 Source: Conagra Internal DataOur Media Investments Have Shifted from High-Frequency Mass
Slide 44: We Are Reaching Nearly All Consumers
In Doing so, We Are Reaching Nearly All Consumers Q2 FY20 Reach (U.S. Consumers Age 18+) 250 million 250 222 million 222 Reached 89% of all possible buyers in Q2 Total US Consumers Total Conagra Reach Total U.S. 18+ Consumers 18+ 44 Source: Nielsen Total Media Fusion. Does not include Hulu, Conversa
Slide 45: Always-On Advertising Drives Mental Availability
“Always-On” Advertising Drives Mental Availability 45“Always-On” Advertising Drives Mental Availability 45
Slide 46: |46 |
46 46 |46 46 |
Slide 47: Strong Mental Availability Leads to Passionate Brand Advocacy
Strong Mental Availability Can Also Lead to Passionate Brand Advocacy From Fans Online Meet The Long Boi Gang Social Media Instagram Followers Figures in Thousands 814 566 485 302 284 260 34 32 Slim Jim Dr. Pepper Mountain Bud Light Cheetos Skittles Jack Link's Oberto Dew Driving Tremendous Results
Slide 48: Retailers' Platforms Offer Opportunities to Engage with Consumers
Retailers’ Platforms Now Offer High-Quality Opportunities to Engage with Consumers BROAD REACH RELEVANT AUDIENCES EFFECTIVE MESSAGE STRONG CONVERSION v v v 70% of eCommerce snack Top retailer platforms Data-driven audiences Demand space purchases start on the top reach over 90% of US find 5.5X more
Slide 49: Brand Building Model Has Driven Increased Household Penetration
Our Brand Building Model Has Driven Increased Household Penetration Household Penetration Change (Number of Households, Calendar 2017-2019) 1.4 mil 1.4 lion 1.3 million 1.3 1 Frozen Single Serve Meals Ready-to-Eat Snacks 49 Source: IRI Household Panel, Total US All Outlets, Calendar 2017-2019, NBD A
Slide 50: Agenda: What Comes Next
Agenda CONAGRA BRANDS OVERVIEW 1. OUR BRAND BUILDING MODEL 2. WHAT COMES NEXT 3. 50Agenda CONAGRA BRANDS OVERVIEW 1. OUR BRAND BUILDING MODEL 2. WHAT COMES NEXT 3. 50
Slide 51: Key Priorities
Key Priorities • Deliver synergy target • Restore top line momentum • Continue exploring smart divestitures 51Key Priorities • Deliver synergy target • Restore top line momentum • Continue exploring smart divestitures 51
Slide 52: We Will Continue to Deliver on Synergies
We Will Continue to Deliver on Synergies Synergy Capture Progression (Dollars in Millions) $305 $20 million to be reinvested $180 $112 Total cumulative synergies FY20 Cumulative Synergy Target FY22 Total Synergy Target captured through end of Q2 FY20 52We Will Continue to Deliver on Synergies Synerg
Slide 53: We Will Restore Top Line Momentum
We Will Restore Top Line Momentum • Industry-wide consumption weakness in Q3 has impacted our fiscal year, despite our share gains • Recent industry consumption trends show “air pocket” is abating • Our FY20 innovation slate is performing well and will maintain momentum through year end • Our forthc
Slide 54: Unexpected Q3 Headwinds Are Affecting FY20 Guidance
Unexpected Q3 Headwinds Are Affecting FY20 Guidance • Greater than expected industry softness during our Q3 − Foodservice impacted in December − Retail impacted in January • Share gains have not been enough to offset sudden slowdown • Our recent consumption and shipment data supports transitory natu
Slide 55: Foodservice Traffic Declines Larger Than Expected in December
Foodservice Industry Traffic Declines Were Larger Than Expected in December Foodservice Industry Sales and Traffic (% Change vs. YA) 4% 2% Sales $ 0% (2)% Traffic (4)% (6)% Dec ‘18 Dec ‘19 55 Source: Black Box Intelligence (formerly TDn2K) data based on weekly sales from over 47,000 restaurants and
Slide 56: Conagra Retail Sales Softer Than Expected in January
Conagra Retail Sales Softer Than Expected in January Behind Category Softness Conagra Brands Retail Sales (% Change vs. YA, 4 Week Periods) 0.6% (1.3%) (4.4%) 12-01-19 12-29-19 01-26-20 56 Source: IRI POS, MULO+C, 4 Week Periods, Data Ended January 26, 2020Conagra Retail Sales Softer Than Expected i
Slide 57: Strong Brand Health Enabled Share Gains in Key Categories
Conagra’s Strong Brand Health Enabled Us to Gain Share in Key Categories During This Transitory Dip Key Category Examples Frozen Single-Serve Meals Frozen Vegetables & Sides Canned Tomatoes (Category Dollar Sales % Change vs. YA, (Category Dollar Sales % Change vs. YA, (Category Dollar Sales % Chang
Slide 58: Recent Data Shows Trends Improving
Recent Data Shows Trends Improving Conagra Brands Retail Sales (% Change vs. YA) Recent Shipment Patterns Also Improving 5.3% 0.6% (1.3%) (4.3%) (4.4%) 4 WE 12-1-19 4 WE 12-29-19 4 WE 1-26-20 1 WE 2-2-20 1 WE 2-9-20 58 Source: IRI POS, MULO+C, 4 Week Periods Data Ended January 26, 2020, 1 Week Perio
Slide 59: Recent Innovation Is Working, and Gaining Momentum
Recent Innovation Is Working, and Gaining Momentum Retail Dollar Sales From Innovation FY19 Launches Continue to Grow FY20 Launches Larger Than FY19 (Retail Sales from FY19 Innovation) Launches in Comparable Periods +75% +38% FY19 Launches FY19 Launches FY19 Launches FY20 Launches in H1 FY19 in H1 F
Slide 60: New Power Bowls Winning at Shelf
NEW POWER BOWLS WINNING AT SHELF GRAIN-FREE BOWLS TOP FROZEN BFY SINGLE SERVE MEAL LAUNCH OF 2019 Launched H1 FY20 60 Source: IRI POS, Conagra Custom Category, MULO+C, Latest 52 Weeks ended January 19, 2020NEW POWER BOWLS WINNING AT SHELF GRAIN-FREE BOWLS TOP FROZEN BFY SINGLE SERVE MEAL LAUNCH OF 2
Slide 61: Modernization Gaining Traction: Duncan Hines
MODERNIZATION GAINING TRACTION DUNCAN HINES REINVENTION CLASSIC CAKE MIX +2% | SIGNATURE CAKE MIX +6% TIER 1 BROWNIES +1% Launched H1 F20 61 Source: IRI POS, Custom Category, Total US MULO, Latest 13 Weeks ended January 19, 2020, Dollar Sales % Chg vs. YAMODERNIZATION GAINING TRACTION DUNCAN HINES R
Slide 62: Bending the Trend: Wishbone Renovation
BENDING THE TREND WISHBONE RENOVATION +6% $ SALES | +0.2 PTS SHARE Launched 62 H1 FY20 Source IRI POS, Conagra Custom Category, MULO+C, Latest 13 Weeks ended January 19, 2020BENDING THE TREND WISHBONE RENOVATION +6% $ SALES | +0.2 PTS SHARE Launched 62 H1 FY20 Source IRI POS, Conagra Custom Category
Slide 63: MEGA Success: Bone-In Meats
MEGA SUCCESS MEGA BONE-IN MEATS 18% HIGHER DOLLAR VELOCITY THAN CATEGORY AVERAGE ON #1 ITEM Launched H1 FY19 63 Source: IRI Total US MULO Data 52 Weeks ended January 19, 2020MEGA SUCCESS MEGA BONE-IN MEATS 18% HIGHER DOLLAR VELOCITY THAN CATEGORY AVERAGE ON #1 ITEM Launched H1 FY19 63 Source: IRI To
Slide 64: Contemporary Comfort Bowl Transformation
CONTEMPORARY COMFORT BOWL TRANSFORMATION +36% VELOCITY INCREASE +32% TPD INCREASE Launched H1 FY19 64 Source: IRI POS Total US MULO, Marie Callender’s Bowls Latest 52 Weeks ended January 19, 2020 vs. Pre-Conversion 2YACONTEMPORARY COMFORT BOWL TRANSFORMATION +36% VELOCITY INCREASE +32% TPD INCREASE
Slide 65: Delivering Growth: Restaurant-Style Ramen
DELIVERING GROWTH RESTAURANT-STYLE RAMEN DRIVING 34% OF P.F. CHANG’S HOME MENU GROWTH IN MULTI-SERVE MEALS Launched H1 FY20 65 Source: IRI POS, MULO+C, Latest 26 Weeks ended January 19, 2020 Note: P.F. Chang’s and P.F. Chang’s Home Menu are registered trademarks of P.F. Chang’s China Bistro, Inc., u
Slide 66: Off to a Savage Start
OFF TO A SAVAGE START SAVAGE STICK #2 SELLING MEAT STICK INNOVATION BASE VELOCITY 4X CATEGORY AVERAGE Launched H2 FY20 66 Source: IRI POS data, TUS-MULO+C, Latest 13 Weeks ended January 19, 2020OFF TO A SAVAGE START SAVAGE STICK #2 SELLING MEAT STICK INNOVATION BASE VELOCITY 4X CATEGORY AVERAGE Laun
Slide 67: Picking Up Momentum: Pork Rinds
PICKING UP MOMENTUM PORK RINDS #2 SELLING PORK RINDS INNOVATION IN L13 WEEKS Launched H1 FY20 67 Source: IRI POS data, TUS-MULO+C, Latest 13 Weeks ended January 19, 2020, Dollar SalesPICKING UP MOMENTUM PORK RINDS #2 SELLING PORK RINDS INNOVATION IN L13 WEEKS Launched H1 FY20 67 Source: IRI POS data
Slide 68: Bold Snack Fry Experience: Fire Fries
BOLD SNACK FRY EXPERIENCE FIRE FRIES MORE HEAT | MORE FLAVOR ICONIC SNAP Launched H2 FY20 68BOLD SNACK FRY EXPERIENCE FIRE FRIES MORE HEAT | MORE FLAVOR ICONIC SNAP Launched H2 FY20 68
Slide 69: Off to a Fanta-stic Start
OFF TO A FANTA-STIC START FANTA GELS TURNING 1.5X FASTER THAN CATEGORY AVERAGE Launched H2 FY20 69 Source: IRI POS data, TUS-Food, 13 weeks ended and 52 weeks ended January 19, 2020, Note: FANTA is a trademark of The Coca-Cola Company. © The Coca-Cola Company. All Rights Reserved.OFF TO A FANTA-STIC
Slide 70: Accelerate Momentum with FY21 Innovation
ACCELERATE MOMENTUM WITH FY21 INNOVATION 70ACCELERATE MOMENTUM WITH FY21 INNOVATION 70
Slide 71: Millennials Love Frozen Foods
Millennials Love Frozen Foods Annual Frozen Eating Occasions Millennials Household Composition (% Change of Occasions by Household Composition) (Age & Presence of Children in Household) +44% +33% 33% 48% Kids 6+ No Kids Milennial Non- Milennial Parents Milennial Parents 19% Parents with Kids <6 Only
Slide 72: Authentic Restaurant-Style Single-Serve Ramen
AUTHENTIC RESTAURANT-STYLE SINGLE-SERVE RAMEN +60% RAMEN 4 YR MENU GROWTH 72 Source: Datassential 2019 Note: P.F. Chang’s and P.F. Chang’s Home Menu are registered trademarks of P.F. Chang’s China Bistro, Inc., used under licenseAUTHENTIC RESTAURANT-STYLE SINGLE-SERVE RAMEN +60% RAMEN 4 YR MENU GROW
Slide 73: QSR Inspired Mega Meat Meals
QSR INSPIRED MEGA MEAT MEALS BIG FLAVOR | HIGH PROTEIN 73QSR INSPIRED MEGA MEAT MEALS BIG FLAVOR | HIGH PROTEIN 73
Slide 74: Hunger-Crushing Portions: Double Meat Bowls
HUNGER-CRUSHING PORTIONS DOUBLE MEAT BOWLS MAX PROTEIN | AMERICAN CLASSICS 74HUNGER-CRUSHING PORTIONS DOUBLE MEAT BOWLS MAX PROTEIN | AMERICAN CLASSICS 74
Slide 75: Contemporary Comfort Bowl Expansion
CONTEMPORARY COMFORT BOWL EXPANSION REINVENTED CLASSICS | RESTAURANT QUALITY 75CONTEMPORARY COMFORT BOWL EXPANSION REINVENTED CLASSICS | RESTAURANT QUALITY 75
Slide 76: Plant-Based Lifestyle Bowls
PLANT-BASED LIFESTYLE BOWLS VEGAN | VEGETARIAN TRENDING RESTAURANT RECIPES 76PLANT-BASED LIFESTYLE BOWLS VEGAN | VEGETARIAN TRENDING RESTAURANT RECIPES 76
Slide 77: BFY Handhelds
BFY HANDHELDS LOW CARB LIFESTYLE | HIGH PROTEIN 77BFY HANDHELDS LOW CARB LIFESTYLE | HIGH PROTEIN 77
Slide 78: Meat Replacement Platform: Plant-Based Burger
MEAT REPLACEMENT PLATFORM ULTIMATE PLANT-BASED BURGER PLANT-BASED | REAL MEAT TASTE 78MEAT REPLACEMENT PLATFORM ULTIMATE PLANT-BASED BURGER PLANT-BASED | REAL MEAT TASTE 78
Slide 79: Meat Replacement Platform: Gardein Inside
MEAT REPLACEMENT PLATFORM GARDEIN INSIDE ICONIC BRANDS | MADE WITH GARDEIN 79 Note: Packaging under development; subject to changeMEAT REPLACEMENT PLATFORM GARDEIN INSIDE ICONIC BRANDS | MADE WITH GARDEIN 79 Note: Packaging under development; subject to change
Slide 80: Low Carb Lifestyle Meals
LOW CARB LIFESTYLE MEALS evol-UTION KETO FRIENDLY | HIGH PROTEIN 100% GRAIN-FREE CRUST 80 Note: Packaging under development; subject to changeLOW CARB LIFESTYLE MEALS evol-UTION KETO FRIENDLY | HIGH PROTEIN 100% GRAIN-FREE CRUST 80 Note: Packaging under development; subject to change
Slide 81: Carb Replacement Veggie Lasagna
CARB REPLACEMENT VEGGIE LASAGNA ZUCCHINI & LENTIL PASTA 81 Note: Packaging under development; subject to changeCARB REPLACEMENT VEGGIE LASAGNA ZUCCHINI & LENTIL PASTA 81 Note: Packaging under development; subject to change
Slide 82: Contemporary Veggies Modern Sides
CONTEMPORARY VEGGIES MODERN SIDES CULINARY INSPIRED | PLANT-BASED 82 Note: Packaging under development; subject to changeCONTEMPORARY VEGGIES MODERN SIDES CULINARY INSPIRED | PLANT-BASED 82 Note: Packaging under development; subject to change
Slide 83: Restaurant Inspired Baked Sides
RESTAURANT INSPIRED BAKED SIDES CRAVEABLE FAVORITES | FLEXIBLE PREP 83 Note: Packaging under development; subject to changeRESTAURANT INSPIRED BAKED SIDES CRAVEABLE FAVORITES | FLEXIBLE PREP 83 Note: Packaging under development; subject to change
Slide 84: Restaurant Quality Recipes: Asian Veggies
RESTAURANT QUALITY RECIPES ASIAN VEGGIES +20% ASIAN APP MENU GROWTH 84 Source: Datassential 2018 Note: Packaging under development; subject to change; P.F. Chang’s and P.F. Chang’s Home Menu are registered trademarks of P.F. Chang’s China Bistro, Inc., used under licenseRESTAURANT QUALITY RECIPES AS
Slide 85: Snacking Shows No Signs of Slowing Down
Snacking Shows No Signs of Slowing Down Projected Annual Eatings of Snack Foods (In Billions) 405 423 440 1 2019 2024E 2014 85 Source: The NPD Group SnackTrack ® 1. 2024 forecastSnacking Shows No Signs of Slowing Down Projected Annual Eatings of Snack Foods (In Billions) 405 423 440 1 2019 2024E 201
Slide 86: Expanding Consumption: New Shelf Sets
EXPANDING CONSUMPTION NEW SHELF SETS CHECKLANE | LUNCHBOX CENTER STORE 86 Note: Packaging under development; subject to changeEXPANDING CONSUMPTION NEW SHELF SETS CHECKLANE | LUNCHBOX CENTER STORE 86 Note: Packaging under development; subject to change
Slide 87: Feeding the Savage Platform
FEEDING THE SAVAGE PLATFORM SAVAGE STRIP SO MEATY, IT’S SAVAGE 87 Note: Packaging under development; subject to changeFEEDING THE SAVAGE PLATFORM SAVAGE STRIP SO MEATY, IT’S SAVAGE 87 Note: Packaging under development; subject to change
Slide 88: Crafted Quality Smoked Beef Strips
CRAFTED QUALITY SMOKED BEEF STRIPS SMALL BATCH SMOKED | 3g SUGAR PER SERVING 88 Note: Packaging under development; subject to changeCRAFTED QUALITY SMOKED BEEF STRIPS SMALL BATCH SMOKED | 3g SUGAR PER SERVING 88 Note: Packaging under development; subject to change
Slide 89: Meat Replacement Platform: Plant-Based Jerky
MEAT REPLACEMENT PLATFORM ULTIMATE PLANT-BASED JERKY PLANT-BASED | REAL MEAT TASTE HIGH PROTEIN 89 Note: Packaging under development; subject to changeMEAT REPLACEMENT PLATFORM ULTIMATE PLANT-BASED JERKY PLANT-BASED | REAL MEAT TASTE HIGH PROTEIN 89 Note: Packaging under development; subject to chan
Slide 90: BFY On-the-Go Snackable Pickles
BFY ON-THE-GO SNACKABLE PICKLES NO ARTIFICIAL DYES | LOW CARB LIFESTYLE NO ADDED BRINE 90 Note: Packaging under development; subject to changeBFY ON-THE-GO SNACKABLE PICKLES NO ARTIFICIAL DYES | LOW CARB LIFESTYLE NO ADDED BRINE 90 Note: Packaging under development; subject to change
Slide 91: Cultural Phenomenon: Rosé Kettle Corn
CULTURAL PHENOMENON ROSÉ KETTLE CORN INSTAGRAM-WORTHY | LTO 91 Note: Packaging under development; subject to changeCULTURAL PHENOMENON ROSÉ KETTLE CORN INSTAGRAM-WORTHY | LTO 91 Note: Packaging under development; subject to change
Slide 92: Healthy Fats Are Poppin': Avocado Oil Popcorn
HEALTHY FATS ARE POPPIN’ AVOCADO OIL POPCORN 100% AVOCADO OIL 92 Note: Packaging under development; subject to changeHEALTHY FATS ARE POPPIN’ AVOCADO OIL POPCORN 100% AVOCADO OIL 92 Note: Packaging under development; subject to change
Slide 93: Tapping into Culture: Trending Kid Thematics
TAPPING INTO CULTURE TRENDING KID THEMATICS FUN | EXPERIENTIAL | BUZZWORTHY 93 Note: Packaging under development; subject to change; Lucky Charms and associated words and designs are trademarks of General Mills, used under licenseTAPPING INTO CULTURE TRENDING KID THEMATICS FUN | EXPERIENTIAL | BUZZW
Slide 94: Modern Health Sweet Treats
MODERN HEALTH SWEET TREATS KETO FRIENDLY CUPS #1 DIET IN AMERICA | 5g NET CARBS 0g ADDED SUGAR 94 Source: NPD's Health Aspirations & Behavioral Tracking Service; Data Period: April '19 - November '19, excludes “My Own Diet”MODERN HEALTH SWEET TREATS KETO FRIENDLY CUPS #1 DIET IN AMERICA | 5g NET CAR
Slide 95: Snackable Sweets New Platforms
SNACKABLE SWEETS NEW PLATFORMS BAKERY & RESTAURANT INSPIRED ULTRA CONVENIENT FPO 95 Note: Packaging under development; subject to changeSNACKABLE SWEETS NEW PLATFORMS BAKERY & RESTAURANT INSPIRED ULTRA CONVENIENT FPO 95 Note: Packaging under development; subject to change
Slide 96: Dairy Alternatives: Non-Dairy Hot Cocoa
DAIRY ALTERNATIVES NON-DAIRY HOT COCOA MADE WITH COCONUT MILK NO ARTIFICIALS 96 Note: Packaging under development; subject to changeDAIRY ALTERNATIVES NON-DAIRY HOT COCOA MADE WITH COCONUT MILK NO ARTIFICIALS 96 Note: Packaging under development; subject to change
Slide 97: Indulgent Collection White Chocolate
INDULGENT COLLECTION WHITE CHOCOLATE PREMIUM QUALITY 97 Note: Packaging under development; subject to changeINDULGENT COLLECTION WHITE CHOCOLATE PREMIUM QUALITY 97 Note: Packaging under development; subject to change
Slide 98: How We Think about Staples
How We Think about Staples • Overall goal is reliable contribution − Large business, resource-light − Need top-line to be stable − Good margins, right-sized investment • Our brands are strong 1 − #1 or #2 combined branded share in 71% of our Staples categories • Categories are very important to reta
Slide 99: Six Brands Drive Half of Domain Sales
Six Brands Drive Half of Domain Sales Top 6 Brands 50% of Staples Dollar Sales 99 Source: IRI POS, MULO+C, Latest 52 weeks ended January 19, 2020, Conagra Major BrandsSix Brands Drive Half of Domain Sales Top 6 Brands 50% of Staples Dollar Sales 99 Source: IRI POS, MULO+C, Latest 52 weeks ended Janu
Slide 100: How We Operate the Business
How We Operate the Business Selective Competitive Maximize Distribution Renovation/Innovation Share of Voice Close distribution gaps on high Maintain competitive levels of performing items A&P spend Leverage promotional scale 100How We Operate the Business Selective Competitive Maximize Distribution
Slide 101: Selective Innovations Incorporate On-Trend Attributes
Selective Innovations Incorporate On-Trend/Modern Attributes Pockets of Growth (Dollar Sales, % Change vs. YA) Plant-Based Sauces & Veggie-Based Pasta Ethnic Flavors Condiments $5.9B, +4% $135MM, +12% $192MM, +17% 101 Source: IRI POS, Total US MULO+C, Latest 52 Weeks ended January 19, 2020Selective
Slide 102: Restaurant Menu Inspired Wishbone Dressing
RESTAURANT MENU INSPIRED WISHBONE DRESSING BOLD FLAVORS | CRAVEABLE COMBINATIONS 102 Note: Packaging under development; subject to changeRESTAURANT MENU INSPIRED WISHBONE DRESSING BOLD FLAVORS | CRAVEABLE COMBINATIONS 102 Note: Packaging under development; subject to change
Slide 103: Plant-Based Lifestyle Power Dressing
PLANT-BASED LIFESTYLE POWER DRESSING VEGETABLE POWERED | <50 CAL NO SOY INGREDIENTS 103PLANT-BASED LIFESTYLE POWER DRESSING VEGETABLE POWERED | <50 CAL NO SOY INGREDIENTS 103
Slide 104: Kid Favorites Veggie Pasta Cups
KID FAVORITES VEGGIE PASTA CUPS PASTA MADE WITH CAULIFLOWER ½ CUP OF VEGETABLES 104 Note: Packaging under development; subject to changeKID FAVORITES VEGGIE PASTA CUPS PASTA MADE WITH CAULIFLOWER ½ CUP OF VEGETABLES 104 Note: Packaging under development; subject to change
Slide 105: Will Continue to Explore Smart Divestitures
Will Continue to Explore Smart Divestitures • Limited coherence with portfolio objectives • Chronic drag; disadvantaged category fundamentals Strategic Fit • Low priority for innovation or investment • Divestiture logic immediately evident • Consistent business underperformance • Lower-than-average
Slide 106: Summary
Summary We have an advantaged process for how to build brands in the 1 modern era We have a long runway of growth ahead of us, led by 2 frozen and snacks We will continue to re-shape the portfolio for better growth and 3 better margins 106Summary We have an advantaged process for how to build brands
Slide 107: Dave Marberger, EVP and Chief Financial Officer
DAVE MARBERGER EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER 107DAVE MARBERGER EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER 107
Slide 108: Significant Progress Since Closing on Pinnacle
Significant Progress Since Closing on Pinnacle • Pinnacle brand • Corporate SAP performance conversion completed improving • Plants now being • Synergies converted to SAP accelerating • Exited Wesson, Gelit, • Started executing • Closed Transaction DSD Snacks, Private value-over-volume • Transitione
Slide 109: Updated FY20 Guidance
Updated FY20 Guidance rd Fiscal 2020 Guidance as Updated Fiscal 2020 Metric (All Metrics Include a 53 Week 1 2 2 Except Organic Net Sales Growth) of Q2 Earnings Guidance 3 Organic Net Sales Growth +1.0% to +1.5% Flat to +0.5% Reported Net Sales Growth +12.4% to +12.9% +10.0% to +10.5% 4 Adj. Op. Mar
Slide 110: Drivers of Revised FY20 Outlook
Drivers of Revised FY20 Outlook • Lender’s bagel business divestiture, which closed in early Q3 • ~$90 million reduction to net sales guidance driven by industry-wide consumption weakness in Q3 − Q3 organic net sales expected to be down vs. prior year − Q4 organic net sales expected to be up vs. pri
Slide 111: Impacts of Recently Exited Businesses
Impacts of Recently Exited Businesses Impact to Year-over-Year Net Sales Growth Rate (in basis points) FY20 Q3 FY20 Q4 FY21 Q1 FY21 Q2 FY21 Q3 FY20 ~(40) bps ~(150) bps ~(220) bps ~(250) bps ~(280) bps ~(420) bps Impact to Year-over-Year Adj. EPS (in dollars) FY20 Q3 FY20 Q4 FY21 Q1 FY21 Q2 FY21 Q3
Slide 112: Remain Committed to FY22 Targets
Remain Committed to FY22 Targets 1 2 Metric Target 3 +1% to +2% Organic Net Sales Growth (3 YR CAGR ending FY22) (no change) 18% to 19% 4 FY22 Adj. Operating Margin (no change) $2.66 to $2.76 FY22 Adj. Diluted EPS from Cont. Ops. (reduced $0.02 for recent divestitures) 95%+ Free Cash Flow Conversion
Slide 113: Capital Allocation Policy
Capital Allocation Policy Dividend Debt • De-lever to 3.6x to 3.5x • Maintain current annualized dividend (~$400MM / year) by FY21 Priority • Modest increases subject to • Solid investment grade credit rating Board of Directors approval Share Repurchase M&A • Acquisitions only if ahead of • Only if
Slide 114: Committed to Solid Investment Grade Credit Rating
Committed to Solid Investment Grade Credit Rating Remain Committed to Debt Reduction On-Track Continued De-Leveraging Progress FY21 Leverage Target 1 (Net Debt Balances, Dollars in millions) 2 (Net Leverage Ratio ) $11,121 4.9x • Additional $450 million of debt $10,845 paid down in Q3 3.5x to 3.6x •
Slide 115: What We Want You to Take Away From Today
What We Want You to Take Away From Today 1 We compete in attractive categories and have the right brands We deploy our assets via modern, repeatable, and scalable 2 processes that work 3 We have made tremendous progress and despite near term headwinds, have a long runway of growth ahead 115What We W
Slide 116: Appendix
APPENDIX 116APPENDIX 116
Slide 117: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures (in millions) Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Notes payable $ 0.9 $ — $ 1.0 $ 56.0 $ 0.5 Current installments of long-term debt 17.2 19.9 20.6 150.1 1,173.8 Senior long-term debt, excluding current installments 11,3
Slide 118: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures (in millions) 3 Q2 FY20 LTM Net Debt $ 10,278.2 Net income attributable to Conagra Brands, Inc. $ 802.8 Add Back: Income tax expense 211.6 Income tax expense attributable to noncontrolling interests 0.5 Interest expense, ne
Slide 119: Conagra Brands
RS tarFex. CONAGRA - BRANDS ¢