hsh hillshire brands sept 2013 investor slide deck powerpoint ppt pdf
TRANSCRIPT
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$4B Revenue North American,
Focused Food Company
3Source: Company Financial Statement information
74%
26%
Retail Foodservice
89%
11%
Branded Unbranded
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B d B ildi d I i K
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Brand Building and Innovation Key to
Growth Agenda
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Brand Building Innovation
Brand positioning
World-class advertising
Category management
Upgrade existing
quality and packaging
New line extensions
Adjacent innovations
I i I i MAP B hi d O
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Increasing Investment in MAP Behind Our
Core Brands
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3.5%
4.4% 5%
Historic Average FY13 FY15E
MAP Spending as % of Sales
Wh W I MAP S W S
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FY13 YoY Percent Change in Sales
Where We Increase MAP Support We See
Good Growth
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Other
FY13 MAP Increase Allocation
High single digitsLow single digits
High single digits
I ti F d Diff ti t d
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Innovation Focused on Differentiated,
Value-Added Products
12Source: Company Financial Statement information
0% 5% 10% 15% 20% 25% 30% 35% 40%
D
ifferentiation/Value-Added
Gross Margin
Commodity
Unbranded
BrandedMeal
Components
BrandedReadyMeals
$0.5B
$2.6B
$0.8B
O $300MM i R F P d t
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Over $300MM in Revenue From Products
Introduced Within the Last Three Years
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Well on Our Way to Achieve Our Innovation Goals
14*Percent annual revenue from past three years rolling innovations, Retail segment only
9%
11%
13%-
15%
Past 4 Years FY13 FY15E
2013 Editors' Top New Picks
Revenue From NewInnovations*
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W Will A ti t O C B d B hi d
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We Will Activate Our Core Brands Behind
Broadened Brand Positionings
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Farm House
Qual i ty Meats
Hearty
Comfor t Food
Better Guy
Food fo r Better
Guy Times
Smart and
Sensible
Family Choices
Authent ic
Ingredients,
Exceptional Tastes
Artisanal
Italian Meats
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Jimmy Dean Expanding Hispanic Reach
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M&A Will Complement Organic Growth
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Value-added categories
Strong brands
Complementary / additive
capabilities
Scale with suppliers and customers
Top-line growth
EPS contribution Attractive financial returns
Alignmentwith
Strategic
Vision
Shareholder
ValueCreation
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Golden Island Acquisition Provides Initial Entry
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Golden Island Acquisition Provides Initial Entryto the Attractive Meat Snacking Market
Source: Symphony IRI Group, Total U.S. FDMx data, ending CY 2011
$59B2.6% CAGR
$0.9B+5% CAGR
Meat-CentricSnacks
Total Snacking Market
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Maria Henry, EVP & CFO
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Total Hillshire Brands Income Statement
26Adjusted terms are non-GAAP financial measures. See our reconciliation to the most directly comparable
GAAP measure in our press release dated August 8, 2013 and at the end of this presentation.
Continuing Operations($ millions, excluding significant items) FY12 FY13 YoY
Adjusted Net Sales $3,903 $3,920 +0.4%
Adjusted Op Income 323 363 +12.5%
Adjusted Op Margin 8.3% 9.3% +100 bps
Adjusted Diluted EPS $1.45 $1.72 +18.6%
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Cost Management Programs Progressing
On track for $145MM of efficiencies
Achieved $40MM cost savings goal in FY13
Plans in place to execute remaining $105MM
Efficiency programs will also strengthen core
capabilities for sustainable growth and profitability
Company culture embracing efficiency mindset
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Strong Balance Sheet
28Adjusted terms are non-GAAP financial measures. See our reconciliation to the most directly comparable
GAAP measure in our press release dated August 8, 2013 and at the end of this presentation.
($ millions, excluding significant items) FY13
Adjusted Cash Flow $ 312
Adjusted EBITDA $ 509
Cash $ 400
Debt $ 951Net Debt $ 551
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Capital Allocation Strategy
Continue to invest in the business
Increased dividend 40% to $0.70 per share
annual rate
Targeting $200 million in share repurchases over thenext two years
Committed to M&A as a value creation lever
No plans to significantly reduce debt at this time
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Q&A
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Appendix
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