dean foods harrald kroeker investor day
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The following statements made in this presentation are “forward looking” 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.
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.
Other Fluid Dairy 8%
Other 2%
Cultured 5%
Other Beverages
5%
Ice Cream 9%
Fresh Milk 71%
Other 8%
Retailers 64%
Convenience Stores
7%
Distributors 7%
Food Service 14%
National footprint, local dairy heritage to deliver differentiated selling proposition
Brands and private label
Unmatched size and resources to be the low cost leader
Customers consolidating
Consumers trading down
Local competitors challenged
-4.0%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
1Q 06 2Q 06 3Q 06 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08
DSD Dairy
DSD Dairy Competition
Competition
YOY Change
Leverage our scaleInvest in industry-leading technology and expertise
Strengthen our selling and delivery capabilities
Test ability to leverage our selling and delivery infrastructure to drive top line growth
DistributionProcurementConversionNetwork Optimization
Common market structure MarketingSelling capabilityStandard in store execution
Define and execute the value maximizing role of DSD in Dean FoodsTuck-in acquisitions
Conversion
Procurement
Network Optimization
WhiteWave$50
DSD Distribution$50
$ Millions
5,800 company-owned routes
160,000 locations served
200 million miles a year
48 million diesel gallons
2007 20082006 2007 2008
National selling structure
Key account plans
Standard selling skills and approach
Multiple points of contact per customer
Limited account visibility
Varying degrees of selling skills
Drive distribution
Expand inventory
Increase margins
Centrally coordinated
Data, process driven
Consumer relevant
Decentralized
Opaque
Internally focused
187
18
Pre-standardizationPost-standardization
1,300
159
13
10
-90% -90%
3.2%
0.1%
-9.5%
-4.1%
Nestle Unilever
DeanCategory
To drive impact, we must change how we operate the business– Data driven– Simplified, standardized– National point of view
Our starting point, while challenging, creates massive opportunities– Small changes can have a large impact
Cost / efficiency
Standardization
Standard go-to-market strategy and approach by channel
Use DSD system to grow the top line
Conservative volume growth
Limited pricing – highly competitive markets
Margin enhancement driven by productivity
Sustained reinvestment in core capability areas