![]() Exhibit 99.1 |
![]() Ralcorp Holdings, Inc. Barclays Back to School Conference September 5th, 2012 |
![]() 2 Forward Looking Statements Forward Looking Statements Please note that this presentation contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. The words “anticipate,” “plan,” “estimate,” “expect,” “intend,” “will,” “should” and similar expressions, as they relate to us, are intended to identify forward-looking statements. These statements reflect management’s current beliefs, assumptions and expectations and are subject to a number of factors and risks that may cause actual results to differ materially. These factors and risks include but are not limited to: (i) changes in actual or expected results of operations; (ii) our ability to effectively manage future sales growth along with the growth from acquisitions or continue to make acquisitions at the rate at which we have been acquiring in the past; (iii) significant increases in the costs of certain commodities, packaging or energy used to manufacture our products; (iv) our ability to continue to compete in our business segments and our ability to retain our market position; (v) our ability to maintain a meaningful price gap between our products and those of our competitors, successfully introduce new products or successfully manage costs across all parts of the Company; (vi) significant competition within the private brand business; (vii) the timing and expected costs and benefits associated with restructuring initiatives and cost reduction programs; (viii) the loss of a significant customer; (ix) allegations that our products cause injury or illness, product recalls and product liability claims and other litigation; (x) our ability to anticipate changes in consumer preferences and trends; (xi) our ability to service our outstanding debt or obtain additional financing; (xii) disruptions in the U.S. and global capital and credit markets; (xiii) fluctuations in foreign currency exchange rates; (xiv) the termination or expiration of current co-manufacturing agreements; (xv) consolidations among the retail grocery and foodservice industries; (xvi) change in estimates in critical accounting judgments and changes to or new laws and regulations affecting our business; (xvii) termination of existing anti-dumping measures imposed against certain foreign imports of dry pasta; (xviii) losses or increased funding and expenses related to our qualified pension plan; (xix) labor strikes or work stoppages by our employees; (xx) bankruptcy of a significant customer; (xxi) impairment in the carrying value of goodwill or other intangibles; (xxii) our ability to integrate acquisitions and achieve the expected amount of accretion; and (xxiii) changes in weather conditions, natural disasters and other events beyond our control; and other risks and uncertainties described from time to time in our periodic reports filed with the Securities and Exchange Commission. Ralcorp does not assume any obligation to update any forward-looking statements or the information contained herein as a result of new information or future events or developments, except as required by law. This presentation includes certain non-GAAP financial measures. The required reconciliations from these non-GAAP financial measures to their comparable GAAP financial measures are included in the appendix to this presentation. |
![]() 3 Additional Information Additional Information Market and Industry This presentation includes industry and trade association data, forecasts and information that we have prepared based, in part, upon data, forecasts and information obtained from independent trade associations, industry publications and surveys and other independent sources available to us. Some data also are based on our good faith estimates, which are derived from management’s knowledge of the industry and from independent sources. These third-party publications and surveys generally state that the information included therein is believed to have been obtained from sources believed to be reliable. We have not independently verified any of the data from third-party sources nor have we ascertained the underlying economic assumptions on which such data are based. Similarly, we believe our internal research is reliable, even though such research has not been verified by any independent sources. Other Data Financial data regarding the Sara Lee private-brand dough business have been prepared based upon information provided by Sara Lee Company. We have not independently verified any of the data nor have we ascertained the underlying economic assumptions on which such data are based. |
![]() Agenda Agenda About Ralcorp The Private-Brand Opportunity Positioning Ralcorp for Long-Term Sustainable Growth Growth-Through-Acquisition Strategy Fiscal 2013 Headwinds / Tailwinds The Ralcorp Cash Story Conclusion 4 |
![]() 5 Ralcorp Today Ralcorp Today The leader in private-brand food production and a major producer of foodservice products in North America Completed Post spin-off on Feb 3, 2012 Sales: $4.2 billion (1) Categories: 22 major product categories Geographies: United States, Canada, Italy Employees: 10,000 Plants: 41 Note: (1) Management estimates based on FY 2011; excludes Post; Includes Refrigerated Dough. |
![]() $114 $127 $140 $165 $179 $193 $244 $256 $324 $396 $536 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 $1,178 $1,280 $1,304 $1,558 $1,675 $1,850 $2,233 $2,644 $2,821 $3,061 $3,787 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 6 Consistent Private-Brand Operating Performance Consistent Private-Brand Operating Performance Margin Source: Company filings for 2002-2011. Note: Excludes non-cash unusual and non-recurring items. Net Sales and Adjusted EBITDA pro forma for separation of Post. (1) Adjusted EBITDA is defined as earnings before interest, income taxes, depreciation, and amortization, excluding Post separation costs, merger and integration costs, provision for legal settlement, adjustments for economic hedges, accelerated depreciation, gains / losses on forward sale contracts, gain on sale of securities, acquired inventory valuation adjustments, goodwill and trademark impairment losses, merger termination fees, and equity method earnings in Vail Resorts, Inc. A reconciliation from Adjusted EBITDA to the comparable GAAP financial measure is included in the appendix. A reconciliation from Adjusted EBITDA to the comparable GAAP financial measure is included in the appendix. Adjusted EBITDA metrics not pro forma for acquisitions. FY 2008-FY 2011. ($ in millions) Net Sales Adjusted EBITDA (1) 10% 10% 11% 11% 11% 10% 11% 10% 12% 13% 14% Average Organic Growth = 3.6% |
![]() 7 Source: FactSet (includes dividends), Post treated as special dividend. Note: Reflects shareholder return since August 31, 2002 through August 31, 2012. Note: Large Cap Food: Campbell, ConAgra, General Mills, Heinz, Hershey, Kellogg, Kraft; Mid Cap Food: B&G Foods, Flowers Foods, Hain, Lancaster, McCormick, Snyder’s-Lance, TreeHouse. Total Shareholder Return Proven Record of Delivering Strong Returns to Shareholders Proven Record of Delivering Strong Returns to Shareholders 54% 27% 193% 263% Ralcorp Mid Cap Food Large Cap Food S&P 500 |
![]() 8 The Private-Brand Opportunity The Private-Brand Opportunity |
![]() 9 Private-Brand Food Key Takeaways Private-Brand Food Key Takeaways U.S. private-brand market has $100 billion in annual sales and remains highly fragmented Private-brand has grown steadily and is expected to continue growing Private-brands deliver greater profitability to retailers than branded products Ralcorp is uniquely positioned to capitalize on the private-brand opportunity with leading positions in key product categories |
![]() Highly Fragmented Market With Substantial Growth Highly Fragmented Market With Substantial Growth Opportunities Opportunities EBITD A Margin U.S. Private-Brand Market Growth 10 2011 U.S. Private-Brand Market Share 78% 6% 16% Consolidated Competitors ($ in billions) All Others Source: Company filings, presentations and other materials; Packaged Facts – The Future of Food Retailing in the U.S., 3rd Edition. Note: Consolidated competitors include Dean Foods, Cott, TreeHouse and Smithfield. Market share calculations based on LTM Sep 2011 sales as a percentage of estimated 2011 total U.S. private label sales (food and beverage). |
![]() Private-Brand Food Has Grown Throughout the Private-Brand Food Has Grown Throughout the Economic Cycle Economic Cycle 11 Source: A.C. Nielsen. 4% 4% 4% 2% 3% 3% 3% 3% 5% 3% 3% 4% 3% 1% 5% 10% 4% 9% 5% 7% 7% 4% 6% 5% 10% 7% 6% 4% (6)% (4)% (2)% 0% 2% 4% 6% 0% 2% 4% 6% 8% 10% 12% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Branded Private Brand Y-O-Y GDP Growth |
![]() 12 Retailer Concentration a Major Driver in Private-Brand Retailer Concentration a Major Driver in Private-Brand Growth Growth Source: Symphony IRI Special Report – Private Label in Europe; Wall Street estimates. |
![]() 13 Private-Brand Food Economics Are Powerful for Private-Brand Food Economics Are Powerful for Retailers and Consumers Retailers and Consumers Source: Wall Street research. National Brand Private-Brand $10.00 Price to Consumer $7.00 Price to Consumer $7.50 Retailer's Cost $4.00 Retailer's Cost $2.50 Retailer's Gross Profit $3.00 Retailer's Gross Profit Consumer saves 30% Retailer’s gross profit increases 20% and inventory costs are lower Significant Margin Opportunity for Retailers and Price Benefit for Consumers |
![]() Ralcorp Leads Private-Brands in Attractive Categories Ralcorp Leads Private-Brands in Attractive Categories 14 Source: IRI FDMx 52-weeks ending October 2, 2011. #1 #2 #1 #1 #1 #1 #1 #1 60% 30% 65% 45% 70% 90% 50% 70% Cereal Cookies Crackers Snack Nuts Pasta Refrigerated Dough Peanut Butter Jams Ralcorp Position: |
![]() 15 Positioning Ralcorp for Long-term Positioning Ralcorp for Long-term Sustainable Growth Sustainable Growth |
![]() 16 Strategic Restructuring Background Strategic Restructuring Background Cereal Products Legacy private-brand ready-to-eat and hot cereal business Operationally linked to Post branded cereals when Ralcorp owned Post Became a standalone business following spin-off of Post in February 2012 Snacks, Sauces & Spreads Pasta The result of 16 acquisitions and integrations Competes in 14 dry grocery categories In the fall of 2011, completed the consolidation of five different sub- segment into St. Louis, MO headquarters Acquired American Italian Pasta Company in July 2010 Operates as a standalone business headquartered in Kansas City, MO Effective October 1, 2012, the three businesses will be combined into one business headquartered in St. Louis; AIPC’s Kansas City office will be closed by calendar year end |
![]() 17 Ralcorp Center Store Strategy Ralcorp Center Store Strategy Vision World class Private-Brand Company, with superior Sales, Marketing, R & D and Operations capabilities across 20 food categories One voice to our customers Highly efficient supply chain with superior service capabilities Superior logistics network Superior sales and marketing value-added capabilities Best-in-class Research and Development capabilities Efficient divisional and corporate support infrastructure Key Elements |
![]() 18 The Ralcorp Center Store Food Business The Ralcorp Center Store Food Business $3.2 billion private-brand food business Significant Savings Due to Consolidation $26 - $31 million in Fiscal 2013 Leading market positions overall and within our categories # 1 private-brand share in 14 categories # 2 private-brand share in 3 categories Led by Rich Koulouris 33 years experience Experienced leadership team |
![]() 19 Growth-through-Acquisition Strategy Growth-through-Acquisition Strategy |
![]() 20 We Have Completed 30 Acquisitions Since 1997, Totaling We Have Completed 30 Acquisitions Since 1997, Totaling Over $3.3 Billion in Combined Annual Sales Over $3.3 Billion in Combined Annual Sales ($ in millions) Flavorhouse Apr-98 $62 Sales Sugarkake Aug-98 $30 Sales Nutcracker Sep-98 $42 Sales Martin Gillet Mar-99 $70 Sales Cascade Cookies Jan-00 $19 Sales Southern Roasted Mar-99 $28 Sales Linette May-00 $28 Sales Ripon Foods Oct-99 $64 Sales Red Wing Jul-00 $348 Sales Wortz Apr-97 $69 Sales Lofthouse Jan-02 $70 Sales Bakery Chef Dec-03 $171 Sales Concept 2 Bakers Feb-04 $34 Sales Medallion Foods Jun-05 $43 Sales Western Waffles Nov-2005 $75 Sales Parco Foods Feb-06 $50 Sales Cottage Bakery Nov-06 $125 Sales Bloomfield Bakers Mar-07 $188 Sales Torbitt & Castleman Jan-01 $80 Sales Beta Brands Jan-07 $10 Sales J.T.Bakeries May-10 $39 Sales N.A.B. / PL Floods May-10 $57 Sales Sepp’s Jun-10 $29 Sales Harvest Manor Mar-09 $180 Sales AIPC Jul-10 $569 Sales Pastries Plus Aug-07 $10 Sales Refrigerated Dough Oct-11 $306 Sales Refrigerated Dough Pastificio Annoni Dec-11 $13 Sales Petri May-12 $50 Sales Gelit S.r.l. June-12 $40 Sales Ralcorp Management Has a Successful Track Record of Identifying and Integrating Acquisitions |
![]() 21 Ralcorp’s Acquisition Pipeline is Robust with Nearly 50 Ralcorp’s Acquisition Pipeline is Robust with Nearly 50 Potential Private-Brand M&A Targets Potential Private-Brand M&A Targets ($ in millions) Category growth potential Attractive margins or margin expansion opportunities Strong cash flow characteristics Earnings accretion Attractive returns Acquisition Criteria High Low Synergies >$500 Revenue Scale: >$100 <$500 <$100 |
![]() (1) Based on FY 2011 Frozen Bakery products segment profit plus depreciation and amortization. (2) Based on 9.5x LTM EBITDA multiple. Total Price Paid $ 725 million Implied EBITDA Multiple (1) 5.7x Implied Value at Current Multiple (2) $ 1,208 million Implied Value Creation (%) 22 Case Study: Building Platform – Case Study: Building Platform – Frozen Bakery Division Frozen Bakery Division ($ in millions) Target Revenue Cascade Cookie Company $19 Lofthouse Foods 70 Bakery Chef 171 C2B 34 Western Waffles 75 Parco 50 Cottage Bakery 125 Pastries Plus 10 Sepp’s 29 Total $583 |
![]() 23 Fiscal 2013 Fiscal 2013 |
![]() Fiscal 2013 Headwinds / Tailwinds Fiscal 2013 Headwinds / Tailwinds Volume Loss of Bloomfield customer Higher tax rate (35.25%) Lower commodity costs (slight deflation in base business) Restructuring impact ($26-$31 million) Oklahoma plant closure ($10-$12 million) Bloomfield inefficiencies Refrigerated Dough synergies ($6-$8 million) Petri / Gelit acquisition accretion ($0.10 / share) 24 Headwinds Tailwinds |
![]() 25 The Ralcorp Cash Story The Ralcorp Cash Story |
![]() 26 The Ralcorp Cash Story – The Ralcorp Cash Story – “50 / 50” “50 / 50” Utilizing free cash flow to drive balanced revenue, EPS, and EBITDA growth through acquisitions and share repurchases to enhance organic growth Free Cash Flow EPS Growth and Shareholder Returns 50% 50% Share Repurchases Acquisitions |
![]() 27 Key Economics of “50 / 50” Key Economics of “50 / 50” Model Model Annual cash flow of $250 - $300 million* Cash deployed as follows • 50% to acquisitions (illustrative 8x purchase multiple) • 50% to stock repurchases *Estimate assumes maintenance capital expenditures of $40 - $50 million 2.5x – 3.0x leverage |
![]() Illustration of Model in Practice Illustration of Model in Practice 50% Cash Flow Toward Acquisitions 28 50% Cash Flow Toward Share Repurchases Note: Mid-point of acquisition model assumes 1) 8x EBITDA purchase multiple, 2) 7x EBITDA post-synergy purchase multiple, 3) EBIT at 75% of EBITDA, 4) new amortization expense at 30% of EBITDA, 5) tax rate of 35.25%, 6) shares outstanding of 56.5 million. Mid-point of repurchase model assumes share price of $70 and shares outstanding of 56.5 million. $150 million $150 million $0.10 - $0.15 GAAP accretion $0.15 - $0.25 cash accretion 3% - 5% shares retired Leverage Acquired EBITDA for Additional Growth |
![]() Ralcorp Long-Term Growth Objectives Ralcorp Long-Term Growth Objectives Revenue Cash EPS Combination of continued organic growth in private-brand coupled with flow of acquisitions Driven by acquisition-based growth model (excludes acquisition based intangible amortization) Long-Term Goal Commentary Low double digit Mid single digit GAAP EPS High single digit 29 Driven by acquisition-based growth model Enhanced by productivity gains, share repurchases and acquisition synergies |
![]() Our Perspective on Shareholder Value Our Perspective on Shareholder Value Proven record of delivering strong returns to shareholders Post spin-off has unlocked shareholder value Long term private-brand fundamentals remain strong and outlook for next year has more tailwinds than headwinds Executional issues largely behind us Commitment to utilizing free cash flow to drive balanced growth through acquisitions and share repurchases Compelling total shareholder return opportunity 30 |
![]() 31 Appendix Appendix |
![]() 32 Ralcorp – Ralcorp – Adjusted EBITDA Reconciliation Adjusted EBITDA Reconciliation Source: Company filings and management estimates. ($ in millions) FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 LTM 12/31/11 Net Earnings $ 39.9 $ 53.8 $ 7.4 $ 65.1 $ 71.4 $ 68.3 $ 31.9 $ 167.8 $ 290.4 $ 208.8 $ (187.2) $ (193.2) Interest expense, net $ 15.9 $ 5.9 $ 3.3 $ 13.1 $ 16.5 $ 27.3 $ 42.3 $ 54.6 $ 99.0 $ 107.8 $ 134.0 $ 132.7 Income taxes 22.1 30.7 16.9 37.2 36.6 29.9 7.5 86.7 156.9 105.3 83.0 78.9 Depreciation and amortization 41.6 35.8 38.7 47.5 55.8 66.8 82.4 99.5 144.7 166.8 226.5 234.0 Adjustments for economic hedges - - - - - - - - - - 28.9 39.5 Post separation costs - - - - - - - - - - 2.8 5.5 Merger and integration costs - - - - - - - 7.9 31.6 33.1 2.5 7.9 Impairment of intangible assets - - 59.0 - - - - - - 39.9 503.5 503.5 Provision for legal settlement - - - - - - - - - 7.5 2.5 - Restructuring/plant closures (excluding depreciation) 2.6 - 14.3 2.4 2.7 0.1 0.9 1.7 0.5 2.5 3.7 3.7 Acquired inventory valuation adjustment - - - - - - - 23.4 0.4 - - - (Gain) loss on forward sale contracts - - - - - 10.6 87.7 (111.8) (17.6) - - - Gain on sale of securities - - - - - (2.6) - (7.1) (70.6) - - - Merger termination fee, net of related expenses (4.2) - - - - - - - - - - - Equity earnings in Vail Resorts, Inc. (3.9) 0.8 0.4 (0.4) (4.5) (7.0) (8.9) (14.0) (9.8) - - - Adjusted EBITDA $ 114.0 $ 127.0 $ 140.0 $ 164.9 $ 178.5 $ 193.4 $ 243.8 $ 308.7 $ 625.5 $ 671.7 $ 800.2 $ 812.5 Pro Forma Acquisition Adjusted Food EBITDA 2.1 1.4 - 8.8 8.9 2.9 12.5 223.7 6.8 143.9 - 37.0 Pro Forma Adjusted EBITDA $ 116.1 $ 128.4 $ 140.0 $ 173.7 $ 187.4 $ 196.3 $ 256.3 $ 532.4 $ 632.3 $ 815.6 $ 800.2 $ 849.5 Post Segment Profit $ - $ - $ - $ - $ - $ - $ - $ 43.3 $ 250.6 $ 220.6 $ 206.0 $ 191.2 Post Depreciation and Amortization - - - - - - - 9.8 50.6 55.4 58.7 59.0 Post Adjusted EBITDA $ - $ - $ - $ - $ - $ - $ - $ 53.1 $ 301.2 $ 276.0 $ 264.7 $ 250.2 Private Brand Adjusted Food EBITDA $ 114.0 $ 127.0 $ 140.0 $ 164.9 $ 178.5 $ 193.4 $ 243.8 $ 255.6 $ 324.3 $ 395.7 $ 535.5 $ 562.3 Private Brand Pro Forma Adjusted EBITDA $ 116.1 $ 128.4 $ 140.0 $ 173.7 $ 187.4 $ 196.3 $ 256.3 $ 255.6 $ 331.1 $ 539.6 $ 535.5 $ 599.3 |
![]() Higher D&A Driven By Amortization of Acquired Higher D&A Driven By Amortization of Acquired Intangibles Intangibles 33 AIPC (July 2010) Post Foods RMT (Aug 2008) Cash $ 39.4 Receivables 42.9 Inventories 48.1 Other current assets 21.0 Property 252.2 Goodwill 534.1 Other intangible assets 568.2 Other assets 1.1 Total assets acquired $ 1,507.0 Accounts payable (24.1) Other current liabilities (29.9) Deferred income taxes (238.3) Other liabilities (4.9) Total liabilities assumed (297.2) Net assets acquired $ 1,209.8 Cash $ 73.3 Receivables 2.6 Inventories 103.9 Other current assets - Property 470.5 Goodwill 1,794.1 Other intangible assets 946.8 Other assets - Total assets acquired $ 3,391.2 Accounts payable - Other current liabilities (17.0) Long-term debt (964.5) Deferred income taxes (448.0) Other liabilities (74.0) Total liabilities assumed (1,503.5) Net assets acquired $ 1,887.7 Definite Lived Assets Amount Amortizable $259.6 $384.4 $245.1 % of Total Assets Acquired 45% 26% 7% Annual Amortization Impact per Share (1) ($0.20) ($0.28) ($0.14) Transaction Value ~$545mm ~$1.2bn ~$2.6bn (1) Assumes 36% tax rate and shares outstanding as of end of respective fiscal year. Cash $ 0.9 Receivables 14.7 Inventories 23.1 Other current assets 0.1 Property 62.6 Goodwill 216.6 Other intangible assets 259.6 Total assets acquired $ 577.6 Accounts payable (14.1) Other current liabilities (8.8) Other liabilities (3.2) Total liabilities assumed (26.1) Net assets acquired $ 551.5 Refrigerated Dough (Oct 2011) |
![]() Ralcorp Segment and Product Overview Ralcorp Segment and Product Overview Pro Forma Net Sales by Segment Pro Forma Net Sales by Product Pasta 14% Crackers & Cookies 12% Nutritional Bars, Other 8% Snack Nuts, Candy & Chips 14% Sauces & Spreads 13% Ready-to-Eat Cereal 11% Refrigerated Dough 7% Griddle 7% Hot Cereal 1% Cookies 5% Breads 5% Frozen, Other 2% Center Store Private Brand 74% Frozen Bakery 26% 34 Source: Company filings. Note: Reflects trailing 12 months as of September 30, 2011. Pro forma for acquisition of Sara Lee Dough. Numbers may not add to 100% due to rounding. Includes: Pasta Snacks, Sauces & Spreads Cereal Products |
![]() Ralcorp Ingredients and Packaging Overview Ralcorp Ingredients and Packaging Overview Base business 2013 Estimate 35 Source: Management estimates Nuts 24% Wheat 19% Packaging 19% Fruit & Veg 4% Cocoa 2% Flavoring 2% Sweeteners 9% Oil 8% All Other 19% Oats 2% Corn 2% |