Jim Snee. President and Chief Operating Officer

Transcription

1 Jim Snee President and Chief Operating Officer 1

2 Legal Disclosure This presentation contains forward-looking information based on management s current views and assumptions. Actual events may differ materially. Please refer to the cautionary statement regarding Forward-Looking Statements and Risk Factors on pages in the Company s Form 10-Q for the fiscal quarter ended January 24, 2016 for more details. 2

3 2016 Second Quarter Results Revenue Earnings per share In millions 2015 Q2 $2, Q2 $2, % 2015 Q2 $ Q2 $ % Record sales and earnings for the quarter Four of five segments delivered operating profit growth 3

4 2016 Second Quarter Segment Results Grocery Products Refrigerated Foods Jennie-O Turkey Store Specialty Foods International & Other Net Sales Change + 1% + 7% - 4% - 5% - 17% Segment Profit Change + 21% + 13% + 20% + 74% - 33% 4

5 2016 Outlook EPS Grocery Products and Refrigerated Foods Jennie-O Turkey Store + 18% to 21% Value-added growth Favorable input costs Recovery from Avian Influenza $1.32* $1.56 to $1.60 Specialty Foods International Contribution from CytoSport Updated margin guidance 11%-14% Improved export demand *Based on non-gaap earnings which excludes certain adjustments during fiscal See appendix for comparable GAAP measures 5

6 Growth Amidst Volatility $2.00 Hormel Foods EPS Avian Influenza $1.56 to $1.60 $1.50 Higher Input Costs High Grain Costs PEDv $1.00 Stock Market Woes Recession $

7 A Formula For Success Building brands Innovation Acquisitions Balanced Portfolio

8 Positioning Our Portfolio for Future Growth Global Multicultural Healthy / Holistic On-the-Go 8

9 Strong Branded Portfolio 9

10 Our Brand Leadership Healthy/ Holistic Total Awareness Jennie-O Brand

11 Is Driving Future Growth Healthy/ Holistic Turkey s Share of Ground Meats Jennie-O Lean Ground Turkey Tray Ranks #2 Among All Exact Weight Items in the Meat Department Nationally* 7.4% 8.3% 8.7% 9.3% 10.6% 11.8% 12.6% Source: IRI FreshLook 11

12 Fueling Brand Strength (Advertising Expense) +27% +27%

13 Brand Investments 13

14 Leveraging the Iconic SKIPPY Brand Global Healthy/ Holistic On-the-Go 14

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16 Innovative Foodservice Solutions 16

17 Innovative Go-To-Market Strategy 17

18 Growth Through Acquisitions Global Multi-Cultural Healthy/ Holistic On-the-Go 18

19 Healthy/ Holistic On-the-Go 19

20 An Excellent Strategic Fit Healthy/ Holistic On-the-Go Source: IRI Custom DB MULO 52 Wk End 12/27/

21 Global Healthy/ Holistic On-the-Go 21

22 Portfolio Alignment with Consumers Millennials Gen X Boomers Matures Source: IRI Custom DB MULO 52 Wk End 12/27/

23 Our Balanced Model Protein Packaged Foods Pork and Turkey Nuts, Avocados, Tomatoes Retail Foodservice Financially Conservative Innovative Culture Grocery Products Refrigerated Foods Jennie-O Turkey Store Specialty Foods International 23

24 A Formula For Success Building brands Innovation Acquisitions Balanced Portfolio

25 Equals Impressive Growth = & & * * *5-year CAGR based on FY

26 01/03/11 02/03/11 03/03/11 04/03/11 05/03/11 06/03/11 07/03/11 08/03/11 09/03/11 10/03/11 11/03/11 12/03/11 01/03/12 02/03/12 03/03/12 04/03/12 05/03/12 06/03/12 07/03/12 08/03/12 09/03/12 10/03/12 11/03/12 12/03/12 01/03/13 02/03/13 03/03/13 04/03/13 05/03/13 06/03/13 07/03/13 08/03/13 09/03/13 10/03/13 11/03/13 12/03/13 01/03/14 02/03/14 03/03/14 04/03/14 05/03/14 06/03/14 07/03/14 08/03/14 09/03/14 10/03/14 11/03/14 12/03/14 01/03/15 02/03/15 03/03/15 04/03/15 05/03/15 06/03/15 07/03/15 08/03/15 09/03/15 10/03/15 11/03/15 12/03/15 01/03/16 02/03/16 03/03/16 04/03/16 05/03/16 That Drives Shareholder Return $450 Comparison of Cumulative Return $400 $350 $300 $250 $200 $150 $100 Hormel Foods Corporation $345 S&P 500 Pkg Food and Meats $243 S&P 500 $182 $50 $ $100 invested on 1/3/06 in stock or index including reinvestment of dividends

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28 Adjusted Financial Measures Adjusted segment operating profit, net earnings, and diluted net earnings per share exclude charges relating to the closure of the Stockton, California, manufacturing facility and the exit from international joint venture businesses in the first quarter, and charges relating to the goodwill impairment charge associated with the Diamond Crystal Brands business and an adjustment to the contingent consideration accrual for CytoSport in the fourth quarter. The tables below show the calculations to reconcile from the non-gaap adjusted measures to the GAAP measures for the full year. Full Year (In thousands, except per share amounts) 2015 Non- GAAP Adjusted Earnings Stockton Plant Closure International Business Exit Diamond Crystal Brands Impairment CytoSport Contingent Consideration Adjustment 2015 GAAP Earnings 2014 Earnings Grocery Products $195,064 $239,108 $(10,526) $228,582 Refrigerated Foods 338, , ,968 Jennie-O Turkey Store 272, , ,217 Specialty Foods 71, ,925 $(21,537) $8,870 93,258 International & Other 84,745 87,864 $(9,546) 78,318 Total segment 961,705 1,134,082 (10,526) (9,546) (21,537) 8,870 1,101,343 operating profit General corporate expense (33,434) (35,199) (35,199) Net interest & investment expense (9,468) (10,177) (10,177) Earnings before income taxes 918,803 1,088,706 (10,526) (9,546) (21,537) 8,870 1,055,967 Income taxes (316,126) (374,334) 3, (369,879) Net earnings attributable to Hormel Foods Corporation $602,677 $714,372 $ (6,841) $ (8,776) $ (21,537) $ 8,870 $ 686,088 Diluted net earnings per share* $ 1.12 $ 1.32 $ (0.02) $ (0.02) $ (0.04) $ 0.02 $ 1.27 *Earnings per share does not sum across due to rounding 28