Brown Forman Inc · NYSE:BF.A
Brown Forman — Shareholder Meeting (July 2024)
55 slides from Brown Forman's shareholder meeting presentation, Jul 25, 2024
Slide 1: A World of Opportunity: Annual Meeting of Stockholders
A World of OPPORTUNITY ANNUAL MEETING OF STOCKHOLDERS July 25, 2024
Slide 2: Opening video placeholder slide
Opening video placeholder slide.
Slide 3: Sue J. Perram, VP Director Investor Relations
A World of OPPORTUNITY SUE J. PERRAM VP Director Investor Relations
Slide 4: Conduct of the Annual Meeting
Conduct of the Annual Meeting In the interest of a fair and orderly meeting, the following rules will be in effect: ○ The meeting will proceed in the order set forth in the agenda. ○ The only business to be conducted at the meeting are the matters set forth in the Notice of Annual Meeting and Proxy
Slide 5: Forward-Looking Statement
Forward-Looking Statement Today's presentation may contain forward-looking statements, which are any predictions, projections, or other statements about future events based on current expectations and assumptions. Actual results may differ materially from these forward-looking statements because of
Slide 6: Campbell P. Brown, Chair of the Board
A World of OPPORTUNITY CAMPBELL P. BROWN Chair of the Board of Directors
Slide 7: 2024 Annual Meeting of Stockholders Agenda
2024 ANNUAL MEETING OF STOCKHOLDERS Agenda | July 25, 2024 Welcome, Call to Order and Introductions Campbell P. Brown Chair of the Board of Directors Report on Notice and Quorum Michael E. Carr, Jr. EVP General Counsel and Secretary Election of Directors Ratification of the Selection of the Independ
Slide 8: Michael E. Carr, Jr., EVP General Counsel and Secretary
A World of OPPORTUNITY MICHAEL E. CARR, JR. EVP General Counsel and Secretary
Slide 9: Campbell P. Brown and Michael E. Carr, Jr.
A World of OPPORTUNITY CAMPBELL P. BROWN Chair of the Board of Directors MICHAEL E. CARR, JR. EVP General Counsel and Secretary
Slide 10: AMS.B-F.COM voting information
AMS.B-F.COM If you are a Class A stockholder and you did not send in a proxy card or vote via telephone or online, or you did but would like to change your vote, you may vote online now at this website and use the “VOTE HERE” button. A World of OPPORTUNITY 2024 ANNUAL MEETING OF S TOCKHOLDERS | JULY
Slide 11: Annual Meeting of Stockholders
A World of OPPORTUNITY ANNUAL MEETING OF STOCKHOLDERS July 25, 2024
Slide 12: Lawson E. Whiting, President and CEO
A World of OPPORTUNITY LAWSON E. WHITING President and Chief Executive Officer
Slide 13: A Tradition of Excellence
A Tradition of Excellence A World of OPPORTUNITY 2024 ANNUAL MEETING OF S TOCKHOLDERS | JULY 2 5, 2024 page 13
Slide 14: 100 Years of Strategic Agility
100 Years of Strategic Agility 1920 1950 1980 1990 2000 2010 TODAY Staying Steady as Spreading Surging A Changing Building ALIVE SHE GOES THE RISK AHEAD LANDSCAPE FOREVER A World of OPPORTUNITY 2024 ANNUAL MEETING OF S TOCKHOLDERS | JULY 2 5, 2024 page 14
Slide 15: Fiscal 2024 Headlines
Fiscal 2024 Headlines October 10, 2023 21/09/2023 Nov. 29, 2023 Are GLP-1 drugs for weight How big is the slowdown in Young Adults Used Less Tobacco loss a threat to the alcohol the US beverage alcohol And Alcohol After Cannabis market, and how long will it industry? last? Legalization 19/02/2024 Ap
Slide 16: Our Assessment of Today's Highly Dynamic Environment
Our Assessment of Today’s Highly Dynamic Environment Macro HEADWINDS TAILWINDS Spirits trends normalizing Industry-leading portfolio Challenging consumer trends Attractive categories Economic volatility Long-term pricing strategy Cost pressures Expanded route-to-consumer A World of OPPORTUNITY 2024
Slide 17: Reliable Long-Term Growth
Reliable Long-Term Growth ORGANIC NET SALES ORGANIC OPERATING INCOME 5-year CAGR | 5% 5-year CAGR | 7% 12% 7% 7% 7% 8% 5% 5% 4% 5% 2% FY15 FY19 FY15 FY19 See appendix for reconciliations of non-GAAP measures to the comparable GAAP measures, non-GAAP definitions, and additional information. The five-
Slide 18: Reliable Long-Term Growth
Reliable Long-Term Growth ORGANIC NET SALES ORGANIC OPERATING INCOME 27% 5-year CAGR | 6% 5-year CAGR | 4% 17% 10% 8% 2% 2% -1% -2% -3% -5% FY20 FY24 FY20 FY24 See appendix for reconciliations of non-GAAP measures to the comparable GAAP measures, non-GAAP definitions, and additional information. The
Slide 19: Reliable Long-Term Growth
Reliable Long-Term Growth ORGANIC NET SALES ORGANIC OPERATING INCOME 27% 10-year CAGR | 5% 10-year CAGR | 6% 17% 12% 10% 7% 7% 7% 8% 8% 5% 5% 4% 5% 2% 2% 2% -1% -2% -3% -5% FY15 FY24 FY15 FY24 See appendix for reconciliations of non-GAAP measures to the comparable GAAP measures, non-GAAP definitions
Slide 20: Evolving to Unlock Opportunities
Evolving to Unlock OPPORTUNITIES A World of OPPORTUNITY 2024 ANNUAL MEETING OF S TOCKHOLDERS | JULY 2 5, 2024 page 20
Slide 21: Building a Premium Portfolio
Building a $50 PREMIUM PORTFOLIO Approximate RSV $0 A World of OPPORTUNITY 2024 ANNUAL MEETING OF S TOCKHOLDERS | JULY 2 5, 2024 page 21
Slide 22: Building a Premium Portfolio
Building a PREMIUM PORTFOLIO A World of OPPORTUNITY 2024 ANNUAL MEETING OF S TOCKHOLDERS | JULY 2 5, 2024 page 22
Slide 23: Building a Premium Portfolio
Building a PREMIUM PORTFOLIO 5% Organic Net Sales 5-year CAGR See appendix for reconciliations of non-GAAP measures to the comparable GAAP measures, non-GAAP definitions, and additional information. The five-year compound annual growth rates were determined by calculating the geometric mean of the o
Slide 24: Ways for Brands to Grow
7 WAYS FOR TO GROW Engage new fans via passion points Offer two iconic global brands in one can Capture super- premium opportunities Enhance route-to- Leverage influence Make new friends Inspire with world- consumer in music with new occasions class creative A World of OPPORTUNITY 2024 ANNUAL MEETIN
Slide 25: Building a Premium Portfolio
Building a PREMIUM PORTFOLIO 10% 16% 5% 23% 9% Organic Net Sales 5-year CAGRs See appendix for reconciliations of non-GAAP measures to the comparable GAAP measures, non-GAAP definitions, and additional information. The five-year compound annual growth rates were determined by calculating the geometr
Slide 26: Building a Premium Portfolio
Building a PREMIUM PORTFOLIO A World of OPPORTUNITY 2024 ANNUAL MEETING OF S TOCKHOLDERS | JULY 2 5, 2024 page 26
Slide 27: Investing in Broadening Our Geographic Reach
Investing in Broadening Our Geographic Reach 55% 60% 40% 30% FY04 FY24 * Reported Net Sales. International also includes net sales of used barrels, contract bottling, and non-branded bulk whiskey and wine, regardless of customer location. A World of OPPORTUNITY 2024 ANNUAL MEETING OF S TOCKHOLDERS |
Slide 28: Unparalleled Leadership and Culture
Unparalleled LEADERSHIP and CULTURE Mike Carr Michael Masick Diane Nguyen Yiannis Pafilis EVP, General Counsel and EVP, President, Emerging EVP, Chief People, Places and EVP, President, Europe Secretary International Communications Officer A World of OPPORTUNITY 2024 ANNUAL MEETING OF S TOCKHOLDERS
Slide 29: Investing for Future Growth
Investing for FUTURE GROWTH Over the past 5 years… $724M in Capital Investments $2.7B Returned to Shareholders Including $400M Share Repurchase in Fiscal 2024 A World of OPPORTUNITY 2024 ANNUAL MEETING OF S TOCKHOLDERS | JULY 2 5, 2024 page 29
Slide 30: A World of Opportunity: Premium Portfolio in Fastest-Growing Categories
A World of Premium Portfolio in OPPORTUNITY Fastest-Growing Categories A World of OPPORTUNITY 2024 ANNUAL MEETING OF S TOCKHOLDERS | JULY 2 5, 2024 page 30
Slide 31: Best-in-Class Governance
A World of OPPORTUNITY Best-in-Class Governance A World of OPPORTUNITY 2024 ANNUAL MEETING OF S TOCKHOLDERS | JULY 2 5, 2024 page 31
Slide 32: Talented People Guided by Timeless Values
A World of OPPORTUNITY Talented People Guided by Timeless Values A World of OPPORTUNITY 2024 ANNUAL MEETING OF S TOCKHOLDERS | JULY 2 5, 2024 page 32
Slide 33: Long Runway for Continued Global Growth
A World of OPPORTUNITY Long Runway for Continued Global Growth A World of OPPORTUNITY 2024 ANNUAL MEETING OF S TOCKHOLDERS | JULY 2 5, 2024 page 33
Slide 34: Excellent Margins, Strong Cash Flows, and High Returns on Capital
A World of OPPORTUNITY Excellent Margins, Strong Cash Flows, and High Returns on Capital A World of OPPORTUNITY 2024 ANNUAL MEETING OF S TOCKHOLDERS | JULY 2 5, 2024 page 34
Slide 35: Lawson E. Whiting: Thank you!
A World of OPPORTUNITY LAWSON E. WHITING President and Chief Executive Officer Thank you!
Slide 36: Campbell P. Brown, Chair of the Board
A World of OPPORTUNITY CAMPBELL P. BROWN Chair of the Board of Directors
Slide 37: Annual Meeting of Stockholders
A World of OPPORTUNITY ANNUAL MEETING OF STOCKHOLDERS July 25, 2024
Slide 38: Non-GAAP Measures
Non-GAAP Measures Use of Non-GAAP Financial Information. We use some financial measures in this presentation that are not measures of financial performance under U.S. generally accepted accounting principles (GAAP). These non-GAAP measures, defined below, should be viewed as supplements to (not subs
Slide 39: Non-GAAP Measures
Non-GAAP Measures Fiscal year ended April 30, 2017 • “Acquisitions and divestitures.” In fiscal 2016, we sold our Southern Comfort and Tuaca brands and related assets to Sazerac Company, Inc. In fiscal 2017, we acquired The BenRiach Distillery Company Limited (BenRiach). See discussion below and Not
Slide 40: Non-GAAP Measures
Non-GAAP Measures Fiscal year ended April 30, 2018 • “Acquisitions and divestitures.” This adjustment removes (a) any non-recurring effects related to our acquisitions and divestitures (e.g., transaction gains or losses, transaction costs, and integration costs), and (b) the effects of operating act
Slide 41: Non-GAAP Measures
Non-GAAP Measures Fiscal year ended April 30, 2019 • “Acquisitions and divestitures.” This adjustment removes (a) any non-recurring effects related to our acquisitions and divestitures (e.g., transaction gains or losses, transaction costs, and integration costs), and (b) the effects of operating act
Slide 42: Non-GAAP Measures
Non-GAAP Measures Fiscal year ended April 30, 2020 • “Acquisitions and divestitures.” This adjustment removes (a) any non-recurring effects related to our acquisitions and divestitures (e.g., transaction gains or losses, transaction costs, and integration costs), and (b) the effects of operating act
Slide 43: Non-GAAP Measures
Non-GAAP Measures Fiscal year ended April 30, 2021 • “Acquisitions and divestitures.” This adjustment removes (a) the gain or loss recognized on sale of divested brands, (b) any non-recurring effects related to our acquisitions and divestitures (e.g., transaction, transition, and integration costs),
Slide 44: Non-GAAP Measures
Non-GAAP Measures Fiscal year ended April 30, 2022 • “Acquisitions and divestitures.” This adjustment removes (a) the gain or loss recognized on sale of divested brands, (b) any non-recurring effects related to our acquisitions and divestitures (e.g., transaction, transition, and integration costs o
Slide 45: Non-GAAP Measures
Non-GAAP Measures Fiscal year ended April 30, 2023 • “Acquisitions and divestitures.” This adjustment removes (a) the gain or loss recognized on sale of divested brands, (b) any non-recurring effects related to our acquisitions and divestitures (e.g., transaction, transition, and integration costs o
Slide 46: Non-GAAP Measures
Non-GAAP Measures Fiscal year ended April 30, 2024 • “Acquisitions and divestitures.” This adjustment removes (a) the gain or loss recognized on sale of divested brands, (b) any non-recurring effects related to our acquisitions and divestitures (e.g., transaction, transition, and integration costs o
Slide 47: Non-GAAP Measures
Non-GAAP Measures Fiscal year ended April 30, 2024 (continued) • “Other Items.” Other Items include the additional items outlined below. “Foundation.” During the fourth quarter of fiscal 2024, we committed $23 million to the Brown-Forman Foundation and Dendrifund (the Foundation and Dendrifund) to s
Slide 48: Definitions
Definitions Below, we define the brand aggregations used in this presentation. “Jack Daniel’s family of brands” includes Jack Daniel’s Tennessee Whiskey (JDTW), JD RTD/RTP, Jack Daniel’s Tennessee Honey (JDTH), Gentleman Jack, Jack Daniel’s Tennessee Apple (JDTA), Jack Daniel’s Tennessee Fire (JDTF)
Slide 49: Total B-F Organic Net Sales Reconciliation
Total B-F Organic Net Sales Reconciliation Percentage change versus prior fiscal year 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Change in reported net 4% -2% -3% 8% 2% 1% 3% 14% 8% -1% sales (GAAP) Acquisitions and divestitures 0% 1% 3% 0% 0% 0% 0% 2% 0% -1% New accounting standard 0% 0% 0%
Slide 50: Total B-F Organic Operating Income Reconciliation
Total B-F Organic Operating Income Reconciliation Percentage change versus prior fiscal year 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Change in reported net 6% 49% -35% 4% 9% -5% 7% 3% -6% 25% sales (GAAP) Acquisitions and divestitures 0% -46% 35% 0% 0% 0% -10% 14% 4% -27% Impairment charge
Slide 51: Jack Daniel's Family
Jack Daniel’s Family Percentage change versus prior fiscal year 2020 2021 2022 2023 2024 Change in reported net sales (GAAP) 1% 1% 15% 4% -5% Acquisitions and divestitures 0% 0% 0% 0% 0% Foreign exchange 1% -1% 3% 5% 1% Change in organic net sales 2% 0% 17% 9% -4% (non-GAAP) Note: Results may differ
Slide 52: Woodford Reserve
Woodford Reserve Percentage change versus prior fiscal year 2020 2021 2022 2023 2024 Change in reported net sales (GAAP) 23% 16% 16% 26% 2% Acquisitions and divestitures 0% 0% 0% 0% 0% Foreign exchange 0% 0% 0% 1% 0% Change in organic net sales 23% 16% 16% 27% 3% (non-GAAP) Note: Results may differ
Slide 53: el Jimador
el Jimador Percentage change versus prior fiscal year 2020 2021 2022 2023 2024 Change in reported net sales (GAAP) 8% 2% 27% 13% 0% Acquisitions and divestitures 0% 0% 0% 0% 0% Foreign exchange 0% 1% -1% 1% -1% Change in organic net sales 9% 3% 27% 14% -1% (non-GAAP) Note: Results may differ due to
Slide 54: Herradura
Herradura Percentage change versus prior fiscal year 2020 2021 2022 2023 2024 Change in reported net sales (GAAP) 11% 15% 29% 11% -10% Acquisitions and divestitures 0% 0% 0% 0% 0% Foreign exchange -1% 2% -1% -1% -3% Change in organic net sales 10% 16% 28% 10% -13% (non-GAAP) Note: Results may differ
Slide 55: Old Forester
Old Forester Percentage change versus prior fiscal year 2020 2021 2022 2023 2024 Change in reported net sales (GAAP) 30% 35% 24% 14% 11% Acquisitions and divestitures 0% 0% 0% 0% 0% Foreign exchange 0% 0% 0% 0% 0% Change in organic net sales 30% 35% 24% 14% 11% (non-GAAP) Note: Results may differ du