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dean foods Jack Callahan Investor Day
1.
2. The following statements made in this presentation are โforward lookingโ and are made pursuant to the safe
harbor provision of the Private Securities Litigation Reform Act of 1995: statements relating to (1) projected
sales (including for individual segments, for specific product lines and for the company as a whole), profit
margins, net income and earnings per share, (2) our growth strategy, (3) our branding initiatives (4) our
integration, innovation, and research and development plans, and (5) our cost-savings initiatives. These
statements involve risks and uncertainties that may cause results to differ materially from those set forth in this
presentation. Financial projections are based on a number of assumptions. Actual results could be materially
different than projected if those assumptions are erroneous. Sales, profit margins, net income and earnings
per share can vary based on a variety of economic, governmental and competitive factors, which are identified
in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K (which
can be accessed on our website at www.deanfoods.com or the website of the Securities and Exchange
Commission at www.sec.gov). The Company's ability to profit from its branding initiatives depends on a
number of factors including consumer acceptance of the Company's products. All forward looking statements
in this presentation speak only as of the date of this presentation. We expressly disclaim any obligation or
undertaking to release publicly any updates or revisions to any such statements to reflect any change in our
expectations with regard thereto or any changes in the events, conditions or circumstances on which any such
statement is based.
3. Certain non-GAAP financial measures contained in this presentation,
including adjusted diluted earnings per share, free cash flow,
consolidated adjusted operating income and consolidated adjusted net
income, have been adjusted to eliminate the net expense or net gain
related to certain items identified in our press releases. A full
reconciliation of these measures calculated according to GAAP and on
an adjusted basis is contained in the appendix of this presentation
and in such press releases, which are publicly available on our web site
at www.deanfoods.com/investors.
10. 40%
30%
20%
Limited activity in the past
10%
Leadership in place
0%
-10% Policy and process under
-20%
refinement
-30% Evaluating targeted positions
-40%
1995 2008
11.
12.
13. Clear opportunity to lower
cost structure
Multi-year productivity
Extend Our program in place
Low Cost
Position
14. Depreciation 3%
Energy 6%
People
Costs
Milk All 28%
Cost Other
46% 54% Indirect
Purchases
24%
$5.4B $6.4B
Direct
Materials
39%
15. $ Millions DSD Distribution Procurement
$50 $50
WhiteWave
$50
Conversion
$85
Network Optimization
$65
17. Fuel/Freight Fuel/Freight
Other Other
People People
Costs Costs
2007 2008
18. Large stable category
Share opportunity
WhiteWave: A unique
value-added platform
Drive Revenue Advantaged go-to-market
& Profit in systems
Our Core
19. Sequence capability
investments
High return projects
Invest for Acquisition pipeline
Growth
20. WhiteWave โ 2004 Supply Chain Information Systems
Procurement โ 2006 R&D โ DSD Dairy
Finance โ 2006 DSD Marketing & Selling โ Morningstar
Human Resources โ 2007 Innovation DSD Front Line Selling
Capability
Strategy โ 2008 Hero JV
New Growth Platforms
DSD Distribution โ 2008 Standard Process
and Training
22. Commodity volatility and financial crisis have stressed
industry players
Pipeline more robust than two years ago
Largely tuck-in dairy acquisitions
25. At least
$1.55
$1.30 +19%
$1.20
2007 2008 2009
26.
27. 6.25x
5.94x
5.75x
4.92x 5.00x
4.50x 4.50x
2007 2008 2009 2010 2011
* As defined by Credit Agreements
28. Continued focus on reducing overall
leverage levels
Re-align our balance sheet to diversify our
capital sources over time
Maintain flexibility to fund high-return projects
and strategic acquisitions
29. Public Bonds
$4.8B
18%
Institutional 1.8
Receivables
Investors
Facility
11%
$2.0-2.5B
Bank Debt
71%
Traditional 3.0
Banks
*Estimate: JP Morgan
32. January results and updated Q1 forecast
indicate a strong start to 2009
Increase Q1 EPS guidance to โat least $0.41โ
Increase FY2009 EPS guidance to
โat least $1.55โ
33. Well positioned to sustain double-digit EPS growth
โ $300 million of productivity improvements identified
โ Continued WhiteWave growth
โ Conservative volume growth assumptions across balance of portfolio
โ Acquisitions a potential upside
Strong cash flows support continued deleveraging and targeted
reinvestment in the business
Realign balance sheet over time
โ Consistent with reality in credit markets
โ Maintain flexibility to reinvest in growth