Baird 2017 Global Consumer, Technology & Services Conference

Transcription

1 Lancaster Colony Corporation Baird 2017 Global Consumer, Technology & Services Conference Presenters: Jay Gerlach, Chairman and Chief Executive Officer Dave Ciesinski, President and Chief Operating Officer June 7, 2017

2 Safe Harbor Statement This presentation was prepared by Lancaster Colony Corporation for information purposes only and is not an offer or solicitation with respect to the purchase or sale of Company securities. We desire to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (the PSLRA ). Any statements concerning the Company s future performance included in this presentation or made orally to the recipients of this presentation are forward looking statements within the meaning of the PSLRA and other applicable securities laws. Such statements can be identified by the use of the forward-looking words anticipate, estimate, project, believe, intend, plan, expect, hope or similar words. These statements discuss future expectations; contain projections regarding future developments, operations or financial conditions; or state other forward-looking information. Such statements are based upon assumptions and assessments made by us in light of our experience and perception of historical trends, current conditions, expected future developments and other factors we believe to be appropriate. These forward-looking statements involve various important risks, uncertainties and other factors that could cause our actual results to differ materially from those expressed in the forward-looking statements. Actual results may differ as a result of factors over which we have no, or limited, control. Management believes these forward-looking statements to be reasonable; however, you should not place undue reliance on such statements that are based on current expectations. For example, fluctuations in the market price of material or freight costs or general economic conditions for domestic consumers, over which we have no control, may significantly influence our financial results. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update such forward-looking statements. More detailed statements regarding significant events that could affect our financial results are included in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission and available at

3 About Lancaster Colony Corporation Established in 1961 Headquartered in Columbus, Ohio Manufacturer and Marketer of Specialty Food Products FY16 Net Sales of $1.2 Billion (primarily U.S.) 16 Production Facilities in Eight States Approximately 2,700 Employees 1

4 Company Highlights Leading Market Share Position in Six Retail Food Categories Supplier to 18 of the Top 25 National Restaurant Chains Long History of Sustained Organic Sales Growth Strong Cash Flows One of 14 U.S. Companies to have Increased Regular Cash Dividend for 54 Consecutive Years 2

5 Specialty Foods - Product Mix Retail 52% Foodservice 48% Frozen 20% National Accounts 36% Produce & Deli 19% Grocery 13% Industrial 2% Branded 10% Based on approximated net sales for the 12 months ending June 30,

6 Retail Sales Mix Grocery 24% Frozen 39% Produce & Deli 37% Based on approximated net sales for the 12 months ending June 30, 2016 Note: Olive Garden SM dressings are produced and sold to retailers under a licensing agreement with Darden Restaurants. 4

7 Refrigerated Dressing Market Share Marzetti 25.1% All Others 20.2% Bolthouse 12.3% Litehouse 21.0% Marie s 21.4% 52 weeks ending 7/10/16, Source: IRI, Total U.S. Multi-Outlet 5

8 Produce Dip Market Share Marzetti 82.5% Private Label 3.5% All Others 1.1% Litehouse 10.6% Jimmy s 2.3% 52 weeks ending 7/10/16, Source: IRI, Total U.S. Multi-Outlet 6

9 Frozen Garlic Bread Market Share New York Bakery 40.1% Pepperidge Farm 15.3% All Others 5.3% Cole s 10.7% Private Label 28.6% 52 weeks ending 7/10/16, Source: IRI, Total U.S. Multi-Outlet 7

10 Frozen Roll Market Share Sister Schubert s 51.2% Private Label 6.3% All Others 12.5% Rhodes 30.0% 52 weeks ending 7/10/16, Source: IRI, Total U.S. Multi-Outlet 8

11 Crouton Market Share Marzetti, Cardini s, New York Bakery, Chatham Village 36.7% Mrs. Cubbison s / Fresh Gourmet 27.7% All Others 6.2% Rothbury Farms 10.2% Private Label 19.2% 52 weeks ending 7/10/16, Source: IRI, Total U.S. Multi-Outlet 9

12 Flatbread/Healthy Wraps/Pita Bread Market Share Flatout 22.4% Joseph s 14.2% Toufayan 14.1% Tumaros 6.9% Mission 3.8% All Others 38.6% 52 weeks ending 7/10/16, Source: IRI, Total U.S. Multi-Outlet 10

13 Foodservice Sales National Accounts 75% Branded 21% Industrial 4% Based on approximated net sales for the 12 months ending June 30,

14 Foodservice Products Dressings Sauces Breads Pasta 11

15 Lancaster Colony Corporation Dave Ciesinski President and Chief Operating Officer 13

16 Specialty Foods Net Sales $ in Millions $1,200 Compound Annual Growth Rate 12% $1,191.1 $600 $ Net sales information is presented as originally reported in Lancaster Colony's Annual Report for the fiscal years ending June 30. Therefore, certain years may not reflect adjustments for subsequent accounting changes. *Compound Annual Growth Rate calculated from fiscal year 1972 through fiscal year

17 Portfolio of Strong Brands Marzetti Ref. Dressing Dips $ Sales: 63.3MM $ Sales: 128.5MM $ Share: 16.0% $ Share: 82.5% Marzetti Simply Dressed $ Sales: 36.0MM $ Share: 9.1% Olive Garden SM $ Sales: 57.9MM $ Share: 3.3% New York Brand Bakery Sister Schubert s Flatout $ Sales: 209.6MM $ Share: 40.1% $ Sales: 109.7MM $ Share: 51.2% $ Sales: 53.7MM $ Share: 22.4% *Retailer sales and market share data for the 52 weeks ended 7/10/16. Source: IRI, Total U.S. Multi-Outlet Note: Olive Garden SM dressings are produced and sold to retailers under a licensing agreement with Darden Restaurants. 15

18 Demographic Changes Impacting the Food Industry Consumers More Diverse Millennials - Largest Cohort/Slow to Launch Trends are Shifting Resulting in a Disruptive Change in Food 16

19 Demographic Changes Impacting the Food Industry Layout of Typical Grocery Store +6% Meat Dairy +5% +3% +4% +1% +1% +5% Produce Dry Grocery (Unit sales declining) Frozen Food (Unit sales declining) Beer / Wine Now traffic heavily favors the store perimeter High Foot Traffic Category Total Category $ Sales Growth Rate Low Foot Traffic Category *Branded Specialty Bakery Products & Deli Prep Source: IRI. (Annualized changes for the three-year period ended 4/16/17). 17

20 Demographic Changes Impacting the Food Industry Retail Food Industry (Yesterday) Large Food Co s Organic/ Natural Co s Private Label Co s 18

21 Demographic Changes Impacting the Food Industry Retail Food Industry (Today/Tomorrow) Large Food Co s Organic/ Natural Co s Company Company 2+6 Company Private Label Co s 19

22 Lancaster Colony - Positioned To Win Retail Food Industry (Today/Tomorrow) Large Food Co s Organic/ Natural Co s Company Company 2+6 Company LANC Private Label Co s 20

23 Growth Portfolio Segmentation 1 st Choice is where we ll play.portfolio Segmentation Some Brands/Categories are Well Positioned for Strong Top-Line Growth Growth Businesses Focus, Invest, Grow Produce Dressings/ Dips Fresh Dips Branded Specialty Bakery Some Brands/Categories are Well Positioned for Strong OI and Cash Flow Foundation Businesses Support, Invest, Sustain Frozen Bakery Dry Grocery Other Categories Note: Olive Garden SM dressings are produced and sold to retailers under a licensing agreement with Darden Restaurants. 21

24 Growth Three Imperatives 2nd Choice is how we ll win Focus on Three Imperatives Lancaster Colony = Growth Expand Core w/ Focused M&A + Simplify Our Supply Chain + Accelerate Base Business Growth 2016 Time

25 Growth Three Imperatives Accelerate Base Business Growth Growth Lancaster Colony = Expand Core w/ Focused M&A + Simplify Our Supply Chain + Accelerate Base Business Growth Operating Priorities 1. Launch New Innovation Platforms 2. Renovate Existing Products/Brands 3. Win at the Shelf 2016 Time

26 Growth Three Imperatives Simplify Our Supply Chain Growth Lancaster Colony = Expand Core w/ Focused M&A + Simplify Our Supply Chain + Accelerate Base Business Growth Operating Priorities 1. Lean Six Sigma/ Operational Excellence 2. Integrated Business Planning 3. Optimize Supply Chain Capabilities 2016 Time

27 Growth Three Imperatives Expand Core with Focused M&A Growth Lancaster Colony = Expand Core w/ Focused M&A + Simplify Our Supply Chain + Accelerate Base Business Growth Operating Priorities 1. Drive Profitable Growth 2. Focus on Branded Retail 2016 Time

28 Successful Track Record of Growth through Acquisitions Net Sales $ in Millions $1,200 Compound Annual Growth Rate 12% * $ $ Net sales information is presented as originally reported in Lancaster Colony's Annual Report for the fiscal years ending June 30. Therefore, certain years may not reflect adjustments for subsequent accounting changes. *Compound Annual Growth Rate calculated from fiscal year 1972 through fiscal year

29 Lancaster Colony Corporation The Better Food Company Better People, that Make Better Products, in a Better Corporate Culture, that Work in Unison to Make the World a Little Bit Better Place 27

30 Lancaster Colony Corporation BAIRD June 2017 Global Consumer, Technology & Services Conference