The J.m. Smucker Company · NYSE:SJM
The J.m. Smucker — Consumer Analyst Group of New York Conference 2016
37 slides from The J.m. Smucker's conference presentation, Feb 17, 2016
Slide 1: Corporate Update
CAGNY 2016 | The J. M. Smucker Company Consumer Analyst Group of New York Conference The J. M. Smucker Company February 17, 2016 Corporate Update Richard Smucker 1
Slide 2: Agenda
CAGNY 2016 | The J. M. Smucker Company Investor Day – October 20, 2015 Fifty years of being listed on the New York Stock Exchange. 3 AGENDA CORPORATE UPDATE RICHARD SMUCKER Chief Executive Officer U.S. RETAIL BUSINESS UPDATE MARK SMUCKER President, Consumer and Natural Foods FINANCIAL UPDATE MARK BE
Slide 3: Forward-Looking Statement
CAGNY 2016 | The J. M. Smucker Company Forward-Looking Statement This presentation contains forward-looking statements, such as projected net sales, operating results, earnings, and cash flows, that are subject to known and unknown risks and uncertainties that could cause actual results to differ ma
Slide 4: Three Platforms for Growth
CAGNY 2016 | The J. M. Smucker Company Three Platforms for Growth COFFEE CONSUMER AND PET FOOD NATURAL FOODS AND SNACKS 7 VINCE BYRD Retiring after 39 Years of Valuable Contributions 8 4
Slide 5: The J. M. Smucker Company
CAGNY 2016 | The J. M. Smucker Company The J. M. Smucker Company Founded in 1897 by Jerome M. Smucker Five Generations of Smucker Family Management Committed to Core Values and Principles upon which the Company was Founded 9 Consumer Landscape We are well-positioned to compete in this current enviro
Slide 6: Our Largest Categories
CAGNY 2016 | The J. M. Smucker Company Our Largest Categories Participating in categories with favorable attributes. PET FOOD COFFEE NUT BUTTERS Pet Adoption and High Growth Convenient Premiumization and and Affordable Driving Growth On-Trend Source of Protein 11 Our Vision Guides Our Strategy “Enga
Slide 7: Our Approach to Achieving Growth
CAGNY 2016 | The J. M. Smucker Company Our Approach to Achieving Growth INNOVATION MARKETING OMNI-CHANNEL GO-TO-MARKET LEADERSHIP INVESTMENTS PRESENCE STRATEGY 13 Track Record of Innovation 10% of FY16 Projected Net Sales from Products Launched within the Last Three Years 14 7
Slide 8: Meeting Changing Consumer Preferences
CAGNY 2016 | The J. M. Smucker Company Meeting Changing Consumer Preferences SIMPLE NUTRIENT ADDED MINDFUL INGREDIENTS RICH CONVENIENCE SNACKING 15 Strengthening Brand Equity through Marketing Digital, in combination with traditional media, expands our consumer reach. 16 8
Slide 9: Connecting with Consumers through Social Media
CAGNY 2016 | The J. M. Smucker Company Connecting with Consumers through Social Media We Engage with Consumers through OVER 100 Online and Social Media Properties 17 U.S. Olympic Team Sponsor Broadens our engagement across multiple generations of consumers. 18 9
Slide 10: E-Commerce Channel
CAGNY 2016 | The J. M. Smucker Company E-Commerce Channel Double-digit growth rates expected to continue. Supporting Expanding FAST GROWING the Online Our Relationship Component of with Traditional “Pure Play” Brick and Mortar Online Retailers Retailers 19 Big Heart Key Integration Activities CONSOL
Slide 11: Synergy Realization
CAGNY 2016 | The J. M. Smucker Company Pet Food Business Location Decisions SALES OFFICES Consolidate Locations PITTSBURGH, PENNSYLVANIA OFFICE Location to be Closed Near the End of FY16 SAN FRANCISCO, CALIFORNIA OFFICE Pet Food Business will Continue to be Led from this Location SOUTHERN CALIFORNIA
Slide 12: U.S. Retail Business Update
CAGNY 2016 | The J. M. Smucker Company Key Messages STRATEGY Remains on Point in an Evolving Landscape ABILITY TO EXECUTE Depth of Strong Leadership Team BRAND LEADERSHIP Leading and Emerging, On-Trend Brands INTEGRATION Integration and Cost Savings Activities Remain on Track 23 U.S. Retail Business
Slide 13: U.S. Retail Markets
CAGNY 2016 | The J. M. Smucker Company Our U.S. Retail Segments Coffee Pet Foods Consumer Foods 25 Our Category Leadership #1 brand in seven key center of the store categories. Natural Shortening Nut Dog Fruit Shelf Stable Ice Cream Coffee and Oils Butters Snacks1 Spreads Juices2 Toppings 100 U.S. R
Slide 14: U.S. Retail Pet Foods Segment
CAGNY 2016 | The J. M. Smucker Company U.S. Retail Pet Foods Segment A year ago we entered the pet food category by acquiring Big Heart Pet Brands. FY16 SALES Premium Pet Food Mainstream Pet Food Pet Snacks 27 Drivers of Pet Food Success BEST-IN-CLASS LEADERSHIP STRATEGIC CONSUMER IN PRODUCT CUSTOME
Slide 15: Pet Food is an Attractive and Growing Category
CAGNY 2016 | The J. M. Smucker Company Pet Food is an Attractive and Growing Category SALES BY CHANNEL All Other* $29 Billion Traditional Retail Pet PET FOOD CATEGORY Specialty Source: Euromonitor September 2015 *Includes farm and feed stores, internet retailing, and veterinary clinics 29 Pet Popula
Slide 16: Leadership in Dog Snacks
CAGNY 2016 | The J. M. Smucker Company Leadership in Dog Snacks Retail sales for our brands grew 7% over the past year. 39 DOLLAR SHARE Source: Smucker Internal Multi-Outlet Share Report 52 weeks ended January 30, 2016 31 Strengthening Position in Pet Specialty Channel Well-executed launch of Natura
Slide 17: Expanding Presence in Cat Food and Snacks
CAGNY 2016 | The J. M. Smucker Company Expanding Presence in Cat Food and Snacks #2 position in dry cat food with growth opportunities in adjacent areas. DRY CAT FOOD WET CAT FOOD CAT SNACKS Source: Smucker Internal Multi-Outlet Share Report 52 weeks ended January 30, 2016 33 Mainstream Dry Dog Food
Slide 18: U.S. Retail Coffee Segment
CAGNY 2016 | The J. M. Smucker Company U.S. Retail Coffee Segment Leader in the at-home coffee category. FY16 SALES 27 K-Cup DOLLAR SHARE Instant Mainstream Roast and Ground Premium Source: Smucker Internal Multi-Outlet Share Report 52 weeks ended January 24, 2016 35 Coffee Consumption Remains Stron
Slide 19: At-Home Coffee Category Growth
CAGNY 2016 | The J. M. Smucker Company At-Home Coffee Category Growth Category has increased significantly since 2011 driven by One Cup. $9.4B 10% 2% 5-Year $5.8B CAGR 39% 5% 6% 7% 11% 31% 23% 47% 28% 2011 2011 2016 2016 Mainstream R&G Premium Instant One Cup Other Source: Smucker Internal Multi-Out
Slide 20: Mainstream Roast and Ground Segment
CAGNY 2016 | The J. M. Smucker Company Mainstream Roast and Ground Segment Conversion to smaller canisters in FY16 is driving growth. RESULTS FOR LATEST 12 WEEKS Outperformed Overall Segment with 6% Unit Growth Gained 3 Points of Dollar Share 57 DOLLAR SHARE Source: Smucker Internal Multi-Outlet Sha
Slide 21: Dunkin' Donuts K-Cups
CAGNY 2016 | The J. M. Smucker Company Dunkin’ Donuts K-Cups Successful launch and continued momentum. $150M Retail Sales for K-Cups Since May 2015 Launch RESULTS FOR LATEST 12 WEEKS 6% Dollar Share of the K-Cup Segment ACV of over 90% Source: Smucker Internal Multi-Outlet Share Report 52 and 12 wee
Slide 22: Our K-Cup Portfolio Includes
CAGNY 2016 | The J. M. Smucker Company Keurig Green Mountain Partnership Our K-Cup Portfolio Includes Folgers, Dunkin’ Donuts, and Café Bustelo Brands 43 U.S. Retail Consumer Foods Segment Iconic and emerging brands in core, consumer staple categories. FY16 SALES Other Frozen Handheld Milk Peanut Bu
Slide 23: Category Participation
CAGNY 2016 | The J. M. Smucker Company Category Participation CATEGORY SIZE (IN BILLIONS) Snack Bars $5.1 Frozen Handheld 4.1 Shortening and Oils 3.5 $23B Baking and Ingredients Nut Butters 2.8 2.4 10 Largest Categories Pancake, Waffles, and Syrups 1.2 in which We Participate Trail Mix (1) 1.1 Fruit
Slide 24: Transforming the Peanut Butter Category
CAGNY 2016 | The J. M. Smucker Company Transforming the Peanut Butter Category Convenience Natural and Fortified Snacking Flavors 47 Expanding the Presence of Jif Specialty Snack Peanut Spreads Bars Powder 48 24
Slide 25: Smucker's Uncrustables Sandwiches
CAGNY 2016 | The J. M. Smucker Company Smucker’s Uncrustables Sandwiches Estimated total Company net sales of approximately $200 million for FY16. 15 Consecutive Quarters of Double-Digit Volume Growth* 1.5 MILLION Sandwiches Produced Daily *In U.S. Retail Consumer Foods Segment 49 Balanced Approach
Slide 26: Expanding Smucker's Brand into New Categories
CAGNY 2016 | The J. M. Smucker Company Expanding Smucker’s Brand into New Categories Leveraging Brand Equity FRUIT SIMPLE AUTHENTIC TRUSTED 51 Natural Food and Beverages Long-Standing Leadership Position in Natural and Organic Foods Space 52 26
Slide 27: Acquired Minority Interest in Numi, Inc.
CAGNY 2016 | The J. M. Smucker Company Acquired Minority Interest in Numi, Inc. A leading organic and fair trade tea brand. Aligns with Our Vision to Invest in Emerging, On-Trend Brands Expands and Compliments Our Existing Beverage Business 53 Three Platforms for Growth COFFEE CONSUMER AND PET FOOD
Slide 28: Financial Update
CAGNY 2016 | The J. M. Smucker Company Financial Update Mark Belgya History of Long-term Growth Compounded annual growth rate from FY11 to estimated FY16. NET SALES OPERATING INCOME (NON-GAAP) 10% 7% EBITDA DIVIDENDS 9% 10% 56 28
Slide 29: Fiscal 2016 Guidance
CAGNY 2016 | The J. M. Smucker Company Discussion Topics COMMENTARY ON 2016 EARNINGS INITIAL THOUGHTS ON 2017 EPS SYNERGY UPDATE CASH AND LEVERAGE 57 Fiscal 2016 Guidance Range Non-GAAP EPS Guidance – As of June 2015 $5.65 - $5.80 Coffee Outperformance + Under-absorbed Overhead – Milk Divestiture Di
Slide 30: Fiscal 2017 Guidance Considerations
CAGNY 2016 | The J. M. Smucker Company Additional Factors Benefiting Fiscal 2016 GAIN FROM MILK DIVESTITURE $0.14 Per Share Gain Recognized in Q3 DEFERRED TAX BENEFIT Expected to be Recognized in Q4 59 Fiscal 2017 Guidance Considerations FULL YEAR GUIDANCE TO BE PROVIDED DURING Q4 EARNINGS CALL ANTI
Slide 31: Areas of Synergies
CAGNY 2016 | The J. M. Smucker Company Fiscal 2016 Guidance – Amortization Impact As of November 2015. LOW HIGH Non-GAAP EPS $5.70 $5.80 Amortization Per Share 1.15 1.15 Adjusted EPS $6.85 $6.95 61 Areas of Synergies Targeting $200 million by FY18. DIRECT Consolidate Supplier Base MATERIALS • • Nego
Slide 32: Synergy Realization Timing
CAGNY 2016 | The J. M. Smucker Company Synergy Realization Timing $200M Annual Synergies by FY18 $200M $135M $35M FY16E FY17P FY18P 63 Current Cash Deployment Strategy Cash from Operations Expected to Average $1.25B CapEx Annually Over Next 5 Years Debt Repayment Approximately 25% Towards CapEx Main
Slide 33: Accelerating Debt Paydown
CAGNY 2016 | The J. M. Smucker Company Working Capital Improvement Target REDUCTION OF Reducing Finished Goods Inventory Days $200MBY END OF FY17 will be a Key Driver Expect to Achieve Nearly $100M in FY16 65 Accelerating Debt Paydown Expect to exceed our debt reduction target for FY16. FY15 FY16E A
Slide 34: Other Strategic Uses of Cash
CAGNY 2016 | The J. M. Smucker Company Other Strategic Uses of Cash Achieving 3x leverage will provide opportunities to consider other uses of cash. SHARE REPURCHASES ACQUISITIONS Repurchased 18.7M Continuing to Shares From FY11-FY14 Explore Enabling and Bolt-On Acquisitions Represents 16% of the Tr
Slide 35: Strengths of Smucker
CAGNY 2016 | The J. M. Smucker Company Strengths of Smucker Clearly Defined Strategy Proven Execution Leading Brands History of Growth Strong Cash Generation Culture and Continuity 69 Consumer Analyst Group of New York Conference The J. M. Smucker Company February 17, 2016 35
Slide 36: Forward-Looking Statement
CAGNY 2016 | The J. M. Smucker Company The J. M. Smucker Company Forward-Looking Statement This presentation contains forward-looking statements, such as projected net sales, operating results, earnings, and cash flows, that are subject to risks and uncertainties that could cause actual results to d
Slide 37: Non-GAAP Measures
CAGNY 2016 | The J. M. Smucker Company The J. M. Smucker Company Non-GAAP Measures The Company uses non-GAAP financial measures including: non-GAAP operating income, income, and income per diluted share; adjusted non-GAAP income and income per diluted share; earnings before interest, taxes, deprecia
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