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Campbells cagny 2014
 

Campbells cagny 2014

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Campbell's Strategy Presentation at the Feb 2014 CAGNY Event

Campbell's Strategy Presentation at the Feb 2014 CAGNY Event

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    Campbells cagny 2014 Campbells cagny 2014 Presentation Transcript

    • 1
    • 2 Denise Morrison President & Chief Executive Officer
    • 3 Anthony DiSilvestro Senior Vice President & CFO Effective May 1, 2014
    • 4
    • 5
    • 66 • 2% increase in net sales, 1% organic net sales decline* • 5% decrease in adjusted EBIT* • 4% decline in adjusted EPS, which decreased to $1.42 per share* Q2 and First-Half Results – Continuing Operations • 6% increase in net sales, 3% organic net sales growth* • 15% growth in adjusted EBIT* • 19% increase in adjusted EPS, which rose to $0.76 per share* * See Non-GAAP reconciliation
    • 77 Q2 – U.S. Soup +4% +5% U.S. Soup Sales FLAT +21% 7
    • 888 Q2 – Global Baking & Snacking +14% Total Sales
    • 999 Q2 – Bolthouse Farms +6% Sales
    • 1010 Campbell Fiscal Year 2014 Guidance 2013 Base 2014 Growth Rates Net Sales $8,052 4% to 5% Adjusted EBIT* $1,232 4% to 6% Adjusted Net Earnings per Share* $2.48 2% to 4% * See Non-GAAP reconciliation ($ millions, except per share) Continuing Operations ($2.53 - $2.58)
    • 11 • Why we are on the right course • Highlights of our progress • How we are driving productivity • Work that lies ahead The Bigger Picture . . . Our Strategic Vision
    • 1212
    • 1313 to to to Long-term Growth Targets
    • 1414 TUMULTUOUS TIME in the FOOD INDUSTRY
    • 1515
    • 16 in the 16
    • 1717
    • 1818
    • 1919
    • 2020
    • 2121 Maintaining Our Focus In Our Three Core Categories SnacksSimple Meals Healthy Beverages 21 Thinking Bigger & Acting Bolder
    • 2222
    • 23 > Profitably grow North America Soup and Simple Meals > Expand our International presence > Grow faster in Snacks and Healthy Beverages
    • 24
    • 2525 Strengthen and Grow the Core • Optimized marketing spend • Improved marketing effectiveness • Disciplined execution against all drivers of demand • Consumer-driven innovation & brand building
    • 26 MOVES 26
    • 27 1st MOVE 27
    • 28 2nd MOVE 28
    • 29 3rd MOVE 29
    • 30 4th MOVE 30
    • 3131
    • 3232 Highlights of Our Progress
    • 3333 Highlights of Our Progress
    • 3434 Highlights of Our Progress
    • 3535 Highlights of Our Progress
    • 3636 Highlights of Our Progress Trio of New Growth Engines
    • 3737 Highlights of Our Progress James Wong President of Greater China and Far East Ümit Subaşi President of Asia Pacific
    • 3838
    • 39 • Exited business in Russia • Closed five plants • Reduced headcount by more than 2,000 • Restructuring programs provide annualized savings of approximately $160 million Significant Progress in Managing Our Costs
    • 40 Things We Still Have to Accomplish Execute new strategy for shelf-stable Beverages
    • 41 Things We Still Have to Accomplish Execute new strategy for shelf-stable Beverages Restore growth in core business in Australia
    • 42 Things We Still Have to Accomplish Execute new strategy for shelf-stable Beverages Restore growth in core business in Australia Realize the full benefits of innovation platforms, acquisitions and channel initiatives
    • 43 Things We Still Have to Accomplish Execute new strategy for shelf-stable Beverages Restore growth in core business in Australia Realize the full benefits of innovation platforms, acquisitions and channel initiatives Maintain our focus on smart external development
    • 4444
    • 4545
    • 46 Anthony DiSilvestro Senior Vice President – Finance
    • 47 Agenda • Performance Overview • Priorities for Uses of Cash
    • 48 Growth Rates F’12 Actual F’13 Actual F’14 Guidance Net Sales 0% 12% 4-5% Organic Net Sales* 0% 2% 1% EBIT* (8%) 6% 4-6% EPS* (3%) 7% 2-4% Continuing Operations * Adjusted results; please refer to the non-GAAP reconciliations in the appendix.
    • 49 Continuing Operations – Fiscal 2014 * Adjusted results; please refer to the non-GAAP reconciliations in the appendix. Growth Rates Q2 First Half Full-Year Guidance Net Sales 6% 2% 4-5% Organic Net Sales* 3% (1%) 1% EBIT* 15% (5%) 4-6% EPS* 19% (4%) 2-4%
    • 50 • Improved sales performance, benefitting from stronger promotional programs and accelerated new products • Accelerating productivity gains including benefits from a robotics installation in Australia • SG&A reductions from restructuring programs and lower incentive compensation • An extra week in the fourth quarter Second-half Performance Drivers
    • 51 Cost Management Initiatives $70 $30 $10 $13 $40 $163 $- $50 $100 $150 $200 4Q11 1Q13 2Q13 4Q13 1Q14 Total • Plant Closures • Overhead Reductions • Automation – Workforce Reductions Annualized Savings in U.S. $Millions Restructuring Programs
    • 52 Agenda • Performance Overview • Priorities for Uses of Cash
    • 53 0 200 400 600 800 1,000 1,200 FY09 FY10 FY11 FY12 FY13 Cash from Operations Strong Operating Cash Flows Interest Coverage 12 times* Net Debt/EBITDA 2.7 times* Credit Ratings A2/BBB+ *See non-GAAP reconciliation U.S. $ Millions
    • 54 1. Capital Expenditures 2. Dividends 3. External Development 4. Share Repurchases Priorities for the Use of Cash
    • 5555 Cash Allocation History(U.S.$millions) 0 500 1,000 1,500 2,000 2,500 F'09 F'10 F'11 F'12 F'13 Capital Expenditures Dividends 5-YR Totals: M&A Share Repurchases
    • 56 Current Projects: • Increased capacity for: – Goldfish crackers – Bolthouse beverages – Swanson broth • Soup common platform • Australia automation project Investing Capital in the Core Business
    • 57 $- $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 EST Dividends Paid Maintaining a Competitive Dividend • Payout ratio of 48-49% (FY14 forecast) • Increased by 8% last fall to nearly $1.25 annualized
    • 5858 External Development to Reshape the Portfolio Acquiring Brands with Faster Growth Profiles Divested our European Simple Meals Business
    • 5959 1st Year Assessment of Bolthouse Farms • No. 1 share position in super-premium beverages* • Salad dressings growing consumption and share • Carrots delivering growth 0% 5% 10% 15% 20% 25% 30% 35% 40% Bolthouse Naked Odwalla Pom Super Premium Beverages $Share* U.S. $ Millions F’13 F’14 H1 Sales $756 $392 EBIT $63 $32 *Source: IRI Total U.S. Multi-Outlet Data for 52-week period ending Jan. 26, 2014
    • 60 Long-Term Targets Sales 3-4% Adjusted EBIT 4-6% Adjusted EPS 5-7% Positioned for Improving Growth • Pursue dual mandate – Sustainable, profitable growth in the core – Expanding into higher growth spaces • Improve financial performance • Return to long-term targets
    • 61 Forward-looking Statements This presentation contains “forward-looking statements.” Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “believes,” “estimates,” “expects” and similar references to future periods. Examples of forward-looking statements include, but are not limited to, statements we make on guidance for 2014 and on our long-term growth targets, on our uses of our cash, on our ability to execute our new business strategies successfully, and on our expectations that we can accelerate innovation across our portfolio, integrate acquisitions and expand our international footprint. Forward- looking statements are based on our current expectations and assumptions regarding our business, our industry and other future conditions. Forward-looking statements are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements due to factors such as the impact of strong competitive responses to our marketing strategies; risks associated with trade and consumer acceptance of our new and improved products; the effectiveness of our promotional programs; the impact of portfolio changes; our ability to realize projected cost savings; and the other factors described in “Risk Factors” in the company’s most recent Form 10-K and in subsequent SEC filings. We undertake no obligation to update these statements to reflect new information or future events.
    • 62 This presentation includes certain “non-GAAP” measures as defined by SEC rules. We have provided a reconciliation of those measures to the most directly comparable GAAP measures, which is posted on our investor Web site, which can be found at investor.campbellsoupcompany.com. Non-GAAP Measures
    • 63 Q&A Anthony DiSilvestro SVP-Finance Denise Morrison President and CEO Jennifer Driscoll VP-IR B. Craig Owens SVP, CFO and CAO
    • 64
    • 6565 Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations Net Sales, Impact of Impact of Organic Net Sales, Organic July 28, 2013 As Reported Acquisitions Currency Net Sales As Reported Net Sales Net Sales from continuing operations 8,052$ (770)$ 13$ 7,295$ 12% 2% Net Sales, Impact of Impact of Organic Net Sales, Organic July 29, 2012 As Reported Acquisitions Currency Net Sales As Reported Net Sales Net Sales from continuing operations 7,175$ -$ (2)$ 7,173$ 0% 0% Net Sales, July 31, 2011 As Reported Net Sales from continuing operations 7,143$ Organic Net Sales For the Fiscal Year Ended ($ millions) % Change % Change
    • 6666 Reconciliation of GAAP and Non-GAAP Financial Measures Continuing Operations Net Sales, Impact of Impact of Impact of Organic Net Sales, Organic January 26, 2014 As Reported Acquisitions Currency Net Accounting Net Sales As Reported Net Sales Net Sales from continuing operations 2,281$ (109)$ 40$ 7$ 2,219$ 6% 3% January 27, 2013 Net Sales from continuing operations 2,162$ Net Sales, Impact of Impact of Impact of Organic Net Sales, Organic January 26, 2014 As Reported Acquisitions Currency Net Accounting Net Sales As Reported Net Sales Net Sales from continuing operations 4,446$ (190)$ 71$ 10$ 4,337$ 2% -1% January 27, 2013 Net Sales from continuing operations 4,367$ For the Six Months Ended % Change Organic Net Sales ($ millions) % ChangeFor the Three Months Ended
    • 6767 Reconciliation of GAAP and Non-GAAP Financial Measures ($ millions, except per share) Second Quarter Diluted EBIT EPS* 2014 - As Reported 361$ 0.74$ Add: Restructuring charges and related costs 13 0.02 2014 - Adjusted 374$ 0.76$ 2013 - As Reported 277$ 0.54$ Add: Restructuring charges and related costs 48 0.09 2013 - Adjusted 325$ 0.64$ % Change 15% 19% Continuing Operations *May not add due to rounding
    • 6868 Reconciliation of GAAP and Non-GAAP Financial Measures ($ millions, except per share) Six Months Diluted EBIT EPS 2014 - As Reported 666$ 1.32$ Add: Restructuring charges and related costs 36 0.06 Add: Loss on foreign exchange forward contracts 9 0.02 Add: Tax expense associated with sale of business - 0.02 2014 - Adjusted 711$ 1.42$ 2013 - As Reported 645$ 1.28$ Add: Restructuring charges and related costs 91 0.18 Add: Acquisition transaction costs 10 0.02 2013 - Adjusted 746$ 1.48$ % Change -5% -4% Continuing Operations
    • 6969 Reconciliation of GAAP and Non-GAAP Financial Measures *May not add due to rounding Continuing Operations EBIT July 28, 2013 July 29, 2012 July 31, 2011 As Reported 1,080$ 1,155$ 1,212$ Add: Restructuring charges and related costs 142 7 60 Add: Acquisition transaction costs 10 5 - Adjusted 1,232$ 1,167$ 1,272$ % Change 6% -8% Diluted EPS July 28, 2013* July 29, 2012 July 31, 2011 As Reported 2.17$ 2.29$ 2.26$ Add: Restructuring charges and related costs 0.28 0.01 0.12 Add: Acquisition transaction costs 0.02 0.01 - Adjusted 2.48$ 2.31$ 2.38$ % Change 7% -3% EBIT and EPS For the Fiscal Year Ended ($ millions, except per share)
    • 7070 ($ millions) Reconciliation of GAAP and Non-GAAP Financial Measures Adjusted Interest Coverage July 28, 2013 As Reported Depreciation & Amortization 407$ Discontinued Operations (11) Restructuring Related Costs (86) Adjusted Depreciation & Amortization 310$ Adjusted EBIT 1,232 Adjusted EBITDA 1,542$ Interest, Net 125$ Adjusted Interest Coverage 12 Continuing Operations
    • 7171 ($ millions) Reconciliation of GAAP and Non-GAAP Financial Measures July 28, 2013 Short-Term Borrowings 1,909$ Long-Term Debt 2,544 Total Debt 4,453$ Less Cash and Cash Equivalents (333) Net Debt 4,120$ Adjusted EBITDA 1,542$ Net Debt/Adjusted EBITDA 2.7 Net Debt/ Adjusted EBITDA