Dean Foods — Investor Presentation (May 2014)
23 slides from Dean Foods's investor presentation, May 21, 2014
Slide 1: FOCUS May 2014
FOCUS May 2014 Exhibit 99.1
Slide 2: Forward-looking statements
2 The following statements made in this presentation are “forward-looking” and are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995: statements relating to (1) projected sales (including specific product lines and the company as a whole), profit marg
Slide 3: Today's agenda
3 Today ’ s agenda Who we are Business strategy and company advantages Financial performance Conclusion
Slide 4: Who we are
4 1. Source IRI 2. As of 5/15/2014 Who we are Largest U.S. processor and distributor of fluid milk with 50+ trusted regional brands Manufacturing facilities: 70+ Total employees: 18,000 ; HQ: Dallas Volume ~ 2.8B gallons annually Best-in-class nationwide refrigerated DSD distribution system More tha
Slide 5: Scale: Dean Foods is the largest player in milk
5 Scale: Dean Foods is the largest player in milk We have the #1 or #2 position, as measured by sales of branded white milk, in 80% of the IRI defined geographies in which we operate 36% 34% 30% ~150 Players averaging 0.2% share each
Slide 6: Today's agenda
6 Today ’ s agenda Who we are Business strategy and company advantages Financial performance Conclusion
Slide 7: Operational imperatives
Never compromise on quality, safety or customer service Volume Performance Cost Productivity Effective Pricing Drive volume growth at appropriate economic returns Gain share through low cost, high service, valued brands model Augment volumes with differentiated products like TruMoo ® Build on unique
Slide 8: Distribution: Broad nationwide distribution across channels
8 * Totals are based on DF fluid milk volumes Schools 6% Foodservice and Other 15% Small Format 12% Large Format 67% Distribution: Broad nationwide distribution across channels The country ’ s only coast-to-coast processor and distributor of fresh milk*
Slide 9: Brands: Growing TruMoo
9 Brands: Growing TruMoo Flavored milk is a $1B category, and TruMoo is the largest flavored milk brand TruMoo is Dean Foods ’ largest national brand at approximately $650M of retail and school sales in 2013 No high fructose corn syrup, lower total sugar, low fat, all the great nutrition of milk Lau
Slide 10: Dean Foods: Focused, disciplined, profitable
10 Dean Foods: Focused, disciplined, profitable Extend our sustainable competitive advantages Our relative size and capabilities afford us significant advantages versus our competitive set – we plan to extend those advantages Continued focus on cost, volume outperformance, effective pricing Lay the
Slide 11: Today's agenda
11 Today ’ s agenda Who we are Business strategy and company advantages Financial performance Conclusion
Slide 12: Fluid milk share performance
12 DF fluid milk volume up 1.1% excluding RFP and customer vertical integration impact – significantly better than 2.1% category decline 1 1Q14 USDA includes March month estimates based on Federal Milk Marketing Order receipts and Class I utilization. 2 Source: IRI Fluid milk share performance Dean
Slide 13: Volume and operating profit performance
* See Reconciliation of Non-GAAP Financial Measures in our earnings releases for the relevant quarters and in the appendix to this presentation for computations and reconciliations 13 Volume and operating profit performance Adjusted Operating Income per Gallon ($) $48 $7 $74 $65 $42
Slide 14: 2013 international milk supply fell in export regions
14 * Source: Rabobank In 2013, milk supply fell in export regions, reducing supply on the international market Milk prices were low Feed costs were high Weather was poor
Slide 15: Chinese milk production fell heavily
15 * Source: Rabobank Meanwhile, Chinese milk production fell heavily Drivers: Structural: high costs of production Medium term: exit of small farmers, challenges of operating large farms Temporary: weather and disease Milk production appears to have fallen around 6% in 2013
Slide 16: US milk prices driven up by world market pricing
16 * Source: Rabobank US milk prices were thus driven up in line with international market pricing Exports have surged U.S. stocks have been reduced Commodity prices dragged up by world market
Slide 17: Focus on cash flow generation and total shareholder returns
Productivity Investment Growth Investment Debt Paydown Share Repurchase and Regular Dividend 17 Free Cash Flow Growt h Focus on cash flow generation & total shareholder returns Future Shareholder Returns Mid-single Avg EBIT Growth Liability Mgmt Cap-Ex Reduction Over Time We expect at least $125 mil
Slide 18: 2014 Expectations
At least $0.60 per share Approximately $150 – 175 million FY 13 Capital Expenditures FY 14 Adjusted Diluted EPS* 18 ($0.02) – ($0.08) per share Q2 Adjusted Diluted EPS* * See Reconciliation of Non-GAAP Financial Measures in the Q1 2014 earnings release earnings tables for computation At least $125 m
Slide 19: Today's agenda
19 Today ’ s agenda Who we are Business strategy and company advantages Financial performance Conclusion
Slide 20: Summary
20 Summary We have built sustainable competitive advantages through our scale and capabilities. We are working to extend these advantages. We are putting pieces in place to build for the future through: Reducing and variablizing our cost structure Improving pricing tools and protocols to reduce vola
Slide 21: Reconciliation of Non-GAAP Financial Measures
21 - - - - - - - - - - - - - - Appendix: Reconciliation of Non-GAAP Financial Measures Three months ended March 31, 2014 Asset write-downs Facility closing, and (gain) loss on reorganization & Morningstar WhiteWave Other Income sale of assets realignment costs sale spin-off adjustments tax GAAP (a)
Slide 22: Reconciliation of Non-GAAP Financial Measures (cont)
22 - - - - Appendix: Reconciliation of Non-GAAP Financial Measures (cont) DEAN FOODS COMPANY Reconciliation of GAAP to Pro Forma Adjusted Earnings (Unaudited) (In thousands, except per share data) Twelve months ended December 31, 2013 Asset write-downs Facility closing, Deal, integration Loss on ear
Slide 23: FOCUS May 2014
FOCUS May 2014