The Marzetti Company · NASDAQ:MZTI
The Marzetti — Lancaster Colony — Investor Presentation (June 2024)
44 slides from The Marzetti's investor presentation, Jun 10, 2024
Slide 1: May 2024
May 2024
Slide 2: Safe Harbor Statement
Safe Harbor Statement p2 This presentation was prepared by Lancaster Colony Corporation for information purposes only and is not an offer or solicitation with respect to the purchase or sale of Company securities. We desire to take advantage of the “safe harbor” provisions of the Private Securities
Slide 3: About Lancaster Colony Corporation
About Lancaster Colony Corporation p3 • Manufacturer and Marketer of Specialty Food Products • Established in 1961 • Headquartered in Westerville, Ohio • Fiscal 2023 Net Sales of $1.8 Billion (primarily U.S.) • 13 Production Facilities in Seven States • Approximately 3,600 Employees
Slide 4: Company Highlights
Company Highlights p4 • Leading Market Share Positions in Retail Food Categories • Supplier to 18 of the Top 30 National Restaurant Chains • Growing and Consumer-Relevant Retail Licensing Program • Long History of Sustained Organic Sales Growth • Strong Cash Flows • One of 13 U.S. Companies to have
Slide 5: Evolution of Our "Better Food Company" Strategy
Evolution of Our "Better Food Company" Strategy p5 1. Defined Winning - Pursue Top Quartile Financial Performance • Grow Organic Sales Volumes Low- to Mid-Single Digit (pounds shipped basis) • Grow Operating Margins 2. Developed Strategy • Strategic Growth Initiatives – Accelerate Base Business Grow
Slide 6: Retail Sales Mix (53% of Total Net Sales)
Retail Sales Mix (53% of Total Net Sales) p6 Refrigerated Dressings, * Frozen Dips & Other Breads 21% 35% Shelf-Stable Dressings, Sauces & Croutons 44% * * * * Based on reported net sales for the fiscal year ended June 30, 2023. * Products for these brands are produced and sold under exclusive licen
Slide 7: Foodservice Sales Mix (47% of Total Net Sales)
Foodservice Sales Mix (47% of Total Net Sales) p7 Branded & Other 21% National Accounts 79% QSR Customers Based on reported net sales for the fiscal year ended June 30, 2023.
Slide 8: Retail Segment Growth Initiatives: Licensing
Retail Segment Growth Initiatives p8 Initiative Brand Products Initial Ship Date Larger 24 oz. Chick-fil-A Sauce and new BBQ and Siracha Flavors * National Launch March 2023 Chick-fil-A Licensing Refrigerated Dressings National Launch May 2023 Southwestern * Ranch Flavor, Larger 20oz. Medium and Par
Slide 9: Retail Segment Growth Initiatives: Renovation and Innovation
Retail Segment Growth Initiatives p9 Initiative Brand Products Initial Ship Date Texas Roadhouse Steak Sauces National Launch * March 2024 Licensing Texas Roadhouse Dinner Rolls Pilot Launch June 2024 * New Flavor Expansion Caesar March 2023 Balsamic March 2024 Restaged Lineup of Marzetti Simply Ref
Slide 10: Consumer-Relevant Retail Licensing Program
Retail Segment Growth Initiatives p10 Consumer-Relevant Retail Licensing Program • Successfully developed exclusive licensing agreements through our proven culinary expertise, strong reputation and longstanding relationships in the foodservice channel combined with our demonstrated sales execution i
Slide 11: FY24 Supply Chain Path Forward … Execute to Grow
Strategic Growth Initiatives p11 FY24 Supply Chain Path Forward … Execute to Grow • Maintain continuous supply across the entire supply chain • With successful implementation of new ERP system complete, shift to leveraging the system’s capabilities • With strategic manufacturing asset (Horse Cave dr
Slide 12: Simplify Supply Chain and Reduce Costs: Value Engineering
Strategic Growth Initiatives p12 Simplify Supply Chain and Reduce Costs Value Engineering (VE) to Help Offset Cost Inflation and Improve Profitability Identify opportunities to reduce product and VE Approach packaging costs that consumer doesn’t value • Lower-cost packaging materials • Alternative/s
Slide 13: Simplify Supply Chain and Reduce Costs: Strategic Procurement
Strategic Growth Initiatives p13 Simplify Supply Chain and Reduce Costs Strategic Procurement • Should-Cost Modeling • More Extensive Competitive Bidding • Strategic Supplier Selection • Extending Payment Terms
Slide 14: Simplify Supply Chain: Transportation and Warehousing Initiatives
Strategic Growth Initiatives p14 Simplify Supply Chain and Reduce Costs Transportation and Warehousing Initiatives Project T² • Installed New Transportation Management System • Adopted One-Touch Strategy for Truckload Optimization • Improved Carrier Management Through Data Analytics and Collaborativ
Slide 15: Long History of Sustained Growth
Long History of Sustained Growth p15 $ in Millions $2,000 11% Compound Annual Growth Rate a $1,500 2003 $1,000 2000 1997 $500 1989 1978 1969 1971 1980 1990 2000 2010 2023 Net sales information is presented as originally reported in Lancaster Colony's Annual Report for the fiscal years ending June 30
Slide 16: Strengthened Organization
Strengthened Organization p16 Strengthened Leadership Team • Supply Chain • R&D and Quality • Retail • Foodservice • Information Technology • Finance Established Transformation Program Office • ERP Initiative Aligned Compensation Incentives with Sales Growth, Operating Income Growth and Shareholder
Slide 17: Investing to Drive Efficiency and Support Growth
Strengthened Organization p17 Investing to Drive Efficiency and Support Growth Significant Capacity Expansion Project for Dressings and Sauces * * * * * * • Added 192,000 square feet to existing facility in Horse Cave, KY • Fully operational beginning in March 2023 • Provides increased processing, w
Slide 18: Fiscal 2024 – Year-To-Date Financial Performance
Fiscal 2024 – Year-To-Date Financial Performance p18 $ in Millions FY24 Year-To-Date Results vs. Prior Year (Except Per Share Values) (Nine Months Ended March 31, 2024) Value $ Change % Change Consolidated Net Sales $1,418.9 $51.1 3.7% Gross Profit $334.7 $39.3 13.3% SG&A $164.9 ($0.5) (0.3)% Restru
Slide 19: Summarized Earnings Per Share Waterfall – Fiscal Year-To-Date FY23 to FY24
Summarized Earnings Per Share Waterfall – Fiscal Year-To-Date FY23 to FY24 p19 Nine Months Ended March 31, 2023 to Nine Months Ended March 31, 2024 (Diluted Earnings Per Share) $0.74 $4.50 $3.71 $0.46 ($0.41) Cost to Exit Net Reduction Improved Business FY23 FYTD FY24 FYTD Perimeter-of-the-Store In
Slide 20: Strong Balance Sheet
Strong Balance Sheet p20 $ in Millions June 30 Mar 31 2021 2022 2023 2024 Cash and Equivalents $188 $60 $88 $165 Total Debt $0 $0 $0 $0 • Debt Free • Credit Revolver of $150 Million, Expandable up to $225 Million • Recent Investments in Capacity Expansion Projects and ERP System (Project Ascent) to
Slide 21: Investing to Grow While Returning Cash to Shareholders
Investing to Grow While Returning Cash to Shareholders p21 Cash Priorities Fiscal 2023 – Major Cash Uses Project Ascent Share Repurchases $29.9 MM $9.2 MM • Invest in Existing Business Regular Dividend - Fiscal 2024 capital expenditures Payments $92.4 MM estimated at $65 Million Capital Expenditures
Slide 22: Supplemental Financial Information
Appendix A Supplemental Financial Information
Slide 23: Results of Consolidated Operations – Current Fiscal Year-To-Date Periods
Results of Consolidated Operations – Current Fiscal Year-To-Date Periods A1
Slide 24: Results of Consolidated Operations – Most Recent Fiscal Year Periods
Results of Consolidated Operations – Most Recent Fiscal Year Periods A2
Slide 25: Summarized Earnings Per Share Waterfall – Fiscal Year 2022 to 2023
Summarized Earnings Per Share Waterfall – Fiscal Year 2022 to 2023 A3 Twelve Months Ended June 30, 2022 to Twelve Months Ended June 30, 2023 (Diluted Earnings Per Share) $0.28 $4.04 $0.25 $0.36 $3.25 ($0.10) Business Impact of FY22 Net Reduction Net Reduction FY22 In ERP (Project In Restructuring &
Slide 26: Fiscal Year Net Sales Results
Fiscal 23 and 22 Sales Gains Driven by Pricing Actions Taken to Offset Inflation A4 Fiscal 21 Sales Impacted by COVID-19 Demand Shifts Fiscal Year Net Sales Results Fiscal Years Ended June 30 $ in Millions $2,000 $1,823 $1,676 +8.7% +14.3% $1,467 +9.9% $1,500 $857 $761 +12.6% +19.3% $638 +2.9% $1,00
Slide 27: Fiscal EBITDA Improves With Pricing Actions Taken to Offset Inflation
Fiscal 23 EBITDA Improves With Pricing Actions Taken to Offset Inflation A5 Fiscal 22 Impacted by Inflationary Costs, Supply Chain Disruptions and Other COVID-19 Factors Fiscal Year Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)* Fiscal Years Ended June 30 $ in Millions $250
Slide 28: Fiscal Year EBITDA Calculation Details
Fiscal Year EBITDA Calculation Details A6 Calculation of Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) * ($ in Millions) Fiscal Years Ending June 30, 2021 2022 2023 Income Before Income Taxes ** $186 $112 $140 Depreciation and Amortization $45 $46 $51 Change in Contingent C
Slide 29: Capital Expenditure History
Capital Expenditure History A7 $ in Millions $132 $88 $90 $83 $71 $31 $27 $16 $18 $17 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Fiscal years ended June 30.
Slide 30: Regular Cash Dividends Per Share
Regular Cash Dividends Per Share A8 $ Per Share $3.35 $3.15 $2.95 $2.75 $2.55 $2.35 $2.15 $1.96 $1.82 $1.72 * 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Regular cash dividends for the fiscal years ended June 30. * Excludes special cash dividend of $5.00 per share paid in FY16.
Slide 31: Retail Brand Market Share and Related Information
Appendix B Retail Brand Market Share and Related Information
Slide 32: Portfolio of Strong Brands and Licensing Relationships
Portfolio of Strong Brands and Licensing Relationships (Retailer Sales and Market Share Data per Circana*) B1 Marzetti® Sister Schubert’s® Licensed Brands ^ Ref. Dressing** Dips $ Sales: 156.8MM Olive GardenSM $ Sales: 136.7MM $ Sales: 139.2MM $ Sales: 154.4MM $ Share: 79.0% $ Share: 54.8% $ Share:
Slide 33: Refrigerated Dressing Market Share
Refrigerated Dressing Market Share B2 All Others Marzetti * 19.2% & Chick-fil-A® 26.2% Bolthouse 11.8% Litehouse 23.3% Marie’s 19.5% Total Category Sales: $522.0 MM 52 weeks ending 12/31/23, Source: Circana, Total U.S. Multi-Outlet *Chick-fil-A® sales accounted for $25 million, or a 4.8% dollar shar
Slide 34: Marzetti Refrigerated Dressing Distribution
Marzetti Refrigerated Dressing Distribution B3 ACV Distribution 41 - 70% 71 - 90% Total U.S. Multi-Outlet 69.9% ACV Weighted Distribution 52 weeks ending 12/31/23, Source: Circana, Total U.S. Multi-Outlet
Slide 35: Produce Dip Market Share
Produce Dip Market Share B4 Marzetti 79.0% Litehouse 9.1% All Others 11.9% Total Category Sales: $176.1MM 52 weeks ending 12/31/23, Source: Circana, Total U.S. Multi-Outlet
Slide 36: Marzetti Dip Distribution
Marzetti Dip Distribution B5 ACV Distribution 21 - 80% 81 - 100% Total U.S. Multi-Outlet 66.1% ACV Weighted Distribution 52 weeks ending 12/31/23, Source: Circana, Total U.S. Multi-Outlet
Slide 37: Frozen Garlic Bread Market Share
Frozen Garlic Bread Market Share B6 Pepperidge Farm New York Bakery 8.9% 43.2% All Others 11.4% Private Label 36.5% Total Category Sales: $785.1 MM 52 weeks ending 12/31/23, Source: Circana, Total U.S. Multi-Outlet
Slide 38: New York Bakery Frozen Garlic Bread Distribution
New York Bakery Frozen Garlic Bread Distribution B7 ACV Distribution 70 - 89 90 - 100% Total U.S. Multi-Outlet 90.3% ACV Weighted Distribution 52 weeks ending 12/31/23, Source: Circana, Total U.S. Multi-Outlet
Slide 39: Frozen Roll Market Share
Frozen Roll Market Share B8 Private Label Sister Schubert’s 4.3% 54.8% All Others 9.3% Rhodes 31.6% Total Category Sales: $286.0 MM 52 weeks ending 12/31/23, Source: Circana, Total U.S. Multi-Outlet
Slide 40: Sister Schubert's Distribution
Sister Schubert's Distribution B9 ACV Distribution 21 - 40% 41 - 70% 71 - 100% Total U.S. Multi-Outlet 81.2% ACV Weighted Distribution 52 weeks ending 12/31/23, Source: Circana, Total U.S. Multi-Outlet
Slide 41: Crouton Market Share
Crouton Market Share B10 Marzetti, Cardini’s, New York Bakery, Mrs. Cubbison’s / Chatham Village Fresh Gourmet 19.0% 33.0% Private Label 39.7% All Sugar Foods All Others 5.3% 3.0% Total Category Sales: $291.1 MM 52 weeks ending 12/31/23, Source: Circana, Total U.S. Multi-Outlet
Slide 42: New York Bakery Crouton Distribution
New York Bakery Crouton Distribution B11 ACV Distribution 71 - 100% Total U.S. Multi-Outlet 83.1% ACV Weighted Distribution 52 weeks ending 12/31/23, Source: Circana, Total U.S. Multi-Outlet
Slide 43: Lancaster Colony Is The Leader Amongst Our Peers In The Retail Channel
Lancaster Colony Is The Leader Amongst Our Peers In The Retail Channel B12 For Both Dollar Sales Growth and Unit Sales Growth Per Circana * Compound Annual Growth Rates - Calendar Year 2020 to 2023 Dollar Sales Sales Volume (lbs) Company 3-Yr CAGR 3-Yr CAGR LANCASTER COLONY 11.1% 4.1% Peer A 5.8% -4
Slide 44: Lancaster Colony Corporation
Lancaster Colony Corporation • 380 Polaris Parkway, Suite 400 • Westerville, Ohio 43082 www.lancastercolony.com JUNE 24