The J.m. Smucker Company · NYSE:SJM
The J.m. Smucker — Consumer Analyst Group of New York (CAGNY) Conference 2015
21 slides from The J.m. Smucker's conference presentation, Feb 17, 2015
Slide 1: CAGNY 2015
The J. M. Smucker Company Feb. 17, 2015 CAGNY 2015 Richard Smucker Chief Executive Officer Consumer Analyst Group of New York Conference The J. M. Smucker Company February 17, 2015 AGENDA The J. M. Smucker Company Forward Looking Statement During this presentation, management of The J. M. Smucker Co
Slide 2: Strength of Smucker
The J. M. Smucker Company Feb. 17, 2015 CAGNY 2015 Leadership Team Effective April 1, 2015 STRENGTH of Smucker Vince Byrd, Vice Chairman Mark Smucker, President, Consumer and Natural Foods Clearly Proven ability Portfolio of History of Cash Culture and defined to execute leading long-term generation
Slide 3: Welcomes Big Heart Pet Brands to the Family
The J. M. Smucker Company Feb. 17, 2015 CAGNY 2015 The J. M. Smucker Company Welcomes Big Heart Pet Brands Business Overview Big Heart Pet Brands to the Family Largest stand-alone producer, distributor, and marketer $5.8 Billion of premium-quality branded pet TRANSACTION food and pet snacks in the U
Slide 4: Consistent with Our Purpose and Vision
The J. M. Smucker Company Feb. 17, 2015 CAGNY 2015 Consistent with Our Purpose and Vision Creates Presence in Large and Growing Category Our Purpose: Our Vision: Total Category Sales* (in billions) $40 • Acquisition increases the total size of “Helping to bring families together to Leading Brands ma
Slide 5: Provides Significant Synergy Opportunities
The J. M. Smucker Company Feb. 17, 2015 CAGNY 2015 Provides Significant Synergy Opportunities Provides Compelling Financial Benefits Net Sales (in billions) Raw Materials Supply Chain Overhead $8.0 • Accretive to non-GAAP earnings per Significant overlap Distribution and Ability to leverage $5.6 sha
Slide 6: Dave West, Big Heart Pet Brands President & CEO
The J. M. Smucker Company Feb. 17, 2015 CAGNY 2015 Dave West, Big Heart Pet Brands President & CEO Dave West Big Heart Pet Brands President and CEO Joining Smucker to continue pet food leadership and integration Will serve as president of the pet food business and be nominated to join Smucker’s Boar
Slide 7: Pet Food and Snacks Category Overview
The J. M. Smucker Company Feb. 17, 2015 CAGNY 2015 Path to a $2.2 Billion Pet Company A Large and Growing CPG Category 2013 U.S. CPG Category Sales 2007 – 2013 Category Sales CAGR (in billions) CY 2002 2006 2011 2013 2014 25 Source: Euromonitor (1) Includes dog and cat food and snacks sales 26 Pet F
Slide 8: Pets Are Increasingly Important
The J. M. Smucker Company Feb. 17, 2015 CAGNY 2015 Pets Are Increasingly Important Pet Ownership by Age(1) (% of U.S. Households) 60% 57% 57% 57% 57% 58% We nurture the bond 53% 52% 48% 53% ’13 Overall: ~53% ’08 Overall: ~50% between pets and the 41% 35% people who love them – +4.1pp +8.4pp +0.1pp +
Slide 9: Strong Brand Portfolio
The J. M. Smucker Company Feb. 17, 2015 CAGNY 2015 Strong Brand Portfolio Driving Growth Through Focused Investment MAINSTREAM DOG AND PET BRANDS CAT SNACKS SPECIALTY Highly Cash Flow Attractive Highest Growth Generative Growth and Margin Channel Profiles 33 34 #1 POSITION A Leader in Dry Cat Food I
Slide 10: Competitive Advantages
The J. M. Smucker Company Feb. 17, 2015 CAGNY 2015 • BHPB has Two Great Channel Exclusive Brands Mainstream pet food brands collectively CHANNEL EXCLUSIVE BRANDS delivered topline growth from FY12 - FY14 Kibbles ’n Bits and Meow Mix account for vast majority of profit Mainstream has been strong and
Slide 11: Continued Innovation
The J. M. Smucker Company Feb. 17, 2015 CAGNY 2015 $3.6 Billion Spent on Canine Oral Health Milk-Bone Brushing Chews A Growing and Underserved Segment Dog Oral Health Spending Expect $75M Annual Retail Sales Only 54% of Dog Owners Know They Should As Effective As in First Year of Launch Dental Produ
Slide 12: Driving Gross Margin Expansion
The J. M. Smucker Company Feb. 17, 2015 CAGNY 2015 Successfully Driving Gross Margin Expansion Reinvesting Gross Margin Into Brand Investment Gross Profit ($ in millions, % margin) Marketing Spend (1) $781 50% $688 $641 35.7% 34.4% 34.6% Increase in Marketing Spend FY12 FY13 FY14 Gross Profit Growth
Slide 13: Key Growth Initiatives
The J. M. Smucker Company Feb. 17, 2015 CAGNY 2015 KEY Growth Initiatives Meeting Changing Consumer Preferences Innovate In-line with Consumer Preferences Drive Growth in Coffee Grow Jif and Smucker’s Brands SIMPLE PROTEIN ADDED SWEET 49 INGREDIENTS OPTIONS CONVENIENCE INDULGENCE 50 U.S. RETAIL COFF
Slide 14: Key Growth Drivers
The J. M. Smucker Company Feb. 17, 2015 CAGNY 2015 Innovation Capitalizing on CONVENIENCE KEY GROWTH DRIVERS #2 IN PREMIUM K-CUP Volume Up 5% COFFEE SPACE Q3 FY15 Year-to-Date PERFECT MEASURES ICED CAFÉ ADD TO MILK A CONVENIENT, NO MESS OPTION ON DEMAND CONVENIENCE 100% GROUND COFFEE, NO ADDITIVES P
Slide 15: Jif Peanut Hazelnut
The J. M. Smucker Company Feb. 17, 2015 CAGNY 2015 Jif Peanut Hazelnut Growing to a Billion Dollar Brand BARS Powder Swirls NEW Capitalizing on First National Brand First Swirled Spread in $5 Billion to Enter Peanut $500 Million Powder Category FLAVORS Snack Bar Category Specialty Spreads Category F
Slide 16: Key Inquiries Related to the Big Heart Pet Brands Acquisition
The J. M. Smucker Company Feb. 17, 2015 CAGNY 2015 Mark Belgya FY15 Third Quarter Review ($ in millions, except per share data) Senior Vice President and Chief Financial Officer QTD YTD Net Sales -2% -3% Non-GAAP Gross Profit -6% -3% Non-GAAP Income -8% -3% Non-GAAP EPS -6% +1% Free Cash Flow $379 $
Slide 17: Big Heart Pet Brands' Sales Growth by Category
The J. M. Smucker Company Feb. 17, 2015 CAGNY 2015 Big Heart Pet Brands’ Sales Growth by Category Smucker’s Current Long-Term Growth Algorithm Approx. % of NET SALES 6% Growth Rate Organic Growth Acquisitions Total Sales Brand Building and Innovation Enabling, Bolt-On, and Transformational Mainstrea
Slide 18: Significant Synergies and Margin Expansion Potential
The J. M. Smucker Company Feb. 17, 2015 CAGNY 2015 Significant Synergies EBITDA – Margin Expansion Potential • Target $200M annually to be fully-realized 8% of BHPB FY15E FY18 within the first three full years of ownership FY16 Net Sales • Synergy identification process Smucker(1) 21.1% Increase by:
Slide 19: Cash Deployment and Pro Forma Debt Repayment
The J. M. Smucker Company Feb. 17, 2015 CAGNY 2015 Future Cash Deployment Strategy Pro Forma Debt Repayment ($ in billions) Cash from operations expected to average $1.1B annually from FY16 – FY19 As of April 30, Cap CapEx At Close 2016 2017 2018 2019 DebtDebt Ex • Focus on timely deleveraging Debt
Slide 20: Non-GAAP Measures
The J. M. Smucker Company Feb. 17, 2015 CAGNY 2015 The J. M. Smucker Company Non-GAAP Measures The J. M. Smucker Company Non-GAAP Reconciliation The J. M. Smucker Company (“Company”) uses non-GAAP financial measures including: gross profit, income, and income per diluted ($ in millions) share, exclu
Slide 21: Non-GAAP Reconciliation
The J. M. Smucker Company Feb. 17, 2015 CAGNY 2015 The J. M. Smucker Company Non-GAAP Reconciliation Big Heart Pet Brands Non-GAAP Measures ($ in millions) Big Heart Pet Brands reports its financial results in accordance with generally accepted accounting principles in Three Months Ended Nine Months
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