![]() Exhibit 99.2 |
![]() Agenda Agenda Gary Rodkin – Overview Greg Smith – Supply Chain André Hawaux – Financial Metrics |
![]() Gary Rodkin, CEO Gary Rodkin, CEO |
![]() This release contains forward-looking statements. These statements are based on management’s current views and assumptions of future events and financial performance and are subject to uncertainty and changes in circumstances. The Company undertakes no responsibility to update these statements. Readers of this release should understand that these statements are not guarantees of performance or results. Many factors could affect the Company’s actual financial results and cause them to vary materially from the expectations contained in the forward-looking statements. These factors include, among other things, future economic circumstances, industry conditions, the Company’s ability to execute its operating and restructuring plans, availability and prices of raw materials, product pricing, competitive environment and related market conditions, operating efficiencies, the ultimate impact of the Company’s recalls, access to capital, actions of governments and regulatory factors affecting the Company’s businesses and other risks described in the Company’s reports filed with the Securities and Exchange Commission. The Company cautions readers not to place undue reliance on any forward-looking statements included in this release, which speak only as of the date made. Note on Forward-Looking Statements Note on Forward-Looking Statements |
![]() Early Focus Vision Culture Wiring Portfolio Changes Cost – “Low Hanging Fruit” Current Focus Innovation / Renovation Marketing Impact Pricing Next Wave of Productivity “Player-Coach” Approach Becoming a True Operating Company that Becoming a True Operating Company that Delivers Sustainable, Profitable Growth Delivers Sustainable, Profitable Growth |
![]() Consumer Foods Segment: Consumer Foods Segment: Sticky Innovation Marketing Impact Smart Pricing Top-Line Growth Drivers |
![]() Liquid Eggs $125 MM Number 1 Cocoa Mix $150 MM Number 1 Whipped Toppings $125 MM Number 2 Cooking Spray $125 MM Number 1 Frozen $1.9 B Number 2 Canned Pasta $475 MM Number 1 Popcorn $425 MM Number 1 Canned Tomatoes $275 MM Number 1 Shelf Stable Desserts $175 MM Number 1 Sizable Equities in Attractive Categories Meat Snacks $225 MM Number 2 Meat Snacks ranking includes convenience stores |
![]() High Quality Sales Trends for Many Brands High Quality Sales Trends for Many Brands Chef Boyardee Orville Redenbacher's Greater than 5% Sales Growth: Rolling 3-Qtr Period Blue Bonnet Egg Beaters Healthy Choice Hebrew National Libby’s Marie Callender's Rosarita Wesson Snack Pack |
![]() Innovation Platform: Innovation Platform: Amazing Taste Health & Wellness Extreme Convenience Key Drivers |
![]() Healthy Choice Cafe Steamers Healthy Choice Cafe Steamers |
![]() Healthy Choice Cafe Steamers Healthy Choice Cafe Steamers On-Track for $100 MM + Year 1 Raising the Bar Toward Restaurant Quality Meeting Strict Health & Wellness Guidelines Delivering Extreme Convenience |
![]() Healthy Choice Cafe Steamers Ad Video |
![]() Healthy Choice Panini Healthy Choice Panini |
![]() Healthy Choice Meals Healthy Choice Meals * Includes 3 Month Allocation on Café Steamers + 8% Avg Price + 0.3% (Measured Channels) Mkt Share + 19% (All Channels) Net Sales Healthy Choice Meals FY ’08 YTD* vs. Year AGO |
![]() Orville Naturals Orville Naturals |
![]() Orville Naturals Orville Naturals Bold Flavors All Natural One-Step Convenience |
![]() Orville Naturals Ad Video |
![]() Hunt’s Hunt’s |
![]() Hunt’s Hunt’s + 1.7% + 9% Mkt Share + 1.1% Mkt Share Net Sales + 5% Net Sales 10/07 – 1/08 * vs. Year AGO FY ’08 YTD vs. Year AGO Hunt’s Canned Tomatoes * Period of Increased Advertising & New Products |
![]() Hunt’s Ad Video |
![]() Chef Boyardee Chef Boyardee |
![]() Chef Boyardee Chef Boyardee + 2.6% Mkt Share + 6.5% Net Sales FY ’08 YTD Chef Boyardee |
![]() Winter 2008 Product News |
![]() 6g 6g Protein 75 40 Calories 210mg 50mg Cholesterol 5g 1.5 g Fat Shell Eggs (Large) Egg Beaters with Yolk Egg Beaters – Egg Beaters – Now with Yolk Now with Yolk Taste at Parity with Shell Eggs |
![]() Egg Beaters Ad Video |
![]() Orville Redenbacher’s Smart Cakes Orville Redenbacher’s Smart Cakes |
![]() External Focus Early Prototyping Iterative Feedback Final Testing Launch Fewer, Bigger, Better, Faster to Market Innovation Process: Innovation Process: Brands – Brands – Categories – Categories – Technologies Technologies |
![]() More Product News: More Product News: Game Changing Snacks Game Changing Meals Fiscal Year 2009 Pipeline Focusing on: • Healthy • Flavor • All Natural • Portable |
![]() Marketing Investment Marketing Investment Effectiveness Significantly Improving Long-Term A&P Target: 6-7% of Sales for Consumer Foods Segment Investment will Accelerate for High-ROI Opportunities |
![]() Pricing Actions Pricing Actions Latest Round Effective March 24th – 95%+ Portfolio – Significant $ Impact Very Clear Direction - Initiative Led by CEO |
![]() Commercial Operations Commercial Operations Food & Ingredients Segment – Sales = $1.9 Billion + 13% – Operating Profit = $252 Million + 14% Trading & Merchandising Segment – Sales = $873 Million + 74% – Operating Profit = $240 Million + 341% Outstanding Fiscal 2008 H1 Performance |
![]() Another Key Another Key CAG Growth Driver CAG Growth Driver $2.0 Billion Annual Sales # 1 Potato Company in North America, # 2 Worldwide 20% International Strong Double Digit Export Growth Past 5 Years Margin & ROIC Accretive 3 Year Trends Sales 8% + CAGR |
![]() Trading & Merchandising Trading & Merchandising Fertilizer Wholesale Distribution Grain and By-Products Merchandising Energy and Agricultural Commodities Trading Proactive Risk Governance & Controls Linking Supply & Demand – Managing Logistical & Price Risk |
![]() Organization Organization Direct CEO Leadership of Largest Operating Segment Managed as One Portfolio “Player – Coach” Approach Transition in Process |
![]() Greg Smith, Supply Chain Greg Smith, Supply Chain |
![]() Supply Chain Supply Chain End-To-End Initiatives to Lower Total Delivered Cost Procurement Manufacturing Logistics Customer Service |
![]() Supply Chain Priorities Supply Chain Priorities Safety / Quality Customer Service Cost Management |
![]() Biggest $ Impact Scale & Supplier Base Overall Equipment Effectiveness Yield & Waste Reduction Touches & Miles End-To-End Initiatives COGS Opportunities COGS Opportunities Logistics $5.0 B COGS Base Manufacturing Procurement $0.6 B $1.1 B $3.3 B Biggest Opportunity = Consumer Foods Segment Represents More than 50% of the Total CAG COGS Base |
![]() Example: Example: Procurement Increased Contracted Volume, Less Spot Buys Reduced Safety Stock and Obsolescence Lower Input Delivery Costs Manufacturing Optimize Plant Based Run Strategies Improved Overall Equipment Effectiveness Logistics Reduced Working Capital Improved Customer Service Vendor Supply Chain Synchronization $50 MM Opportunity |
![]() Example: Example: Procurement Reduces Can Varieties from 100 to 20 Enables Purchasing Leverage Manufacturing Fewer Changeovers Utilize Capacity Across Multiple Regions Logistics Standard Pallets Reduce Network Miles by 15% Increase Direct Plant Shipments $20 MM Opportunity Component Consolidation and Rationalization |
![]() Logistics Consumer Foods Cost Opportunities: Consumer Foods Cost Opportunities: Current View Current View $225 Million (4-5%) Fiscal 2010 $225 Million (4-5%) Fiscal 2009 $225 Million (4-5%) Fiscal 2008 Current View of COGS Cost Savings Potential COGS Inflation for Fiscal ‘08 is $400 Million, or > 8% Approaching $5.0 Billion in Annual COGS Procurement Manufacturing Source of Savings $275 Million Achieved in Fiscal 2007 |
![]() André André Hawaux, EVP & CFO Hawaux, EVP & CFO |
![]() Financial Outlook Financial Outlook |
![]() Financial Outlook: Sales, EPS and ROIC Financial Outlook: Sales, EPS and ROIC 12% + 8% - 10% 4% + Near Term 13% + ROIC 8% - 10% EPS 4% Sales Long Term New Guidance All EPS and ROIC guidance discussed in this presentation excludes items impacting comparability. The inability to predict the timing and amount of future items impacting comparability makes a detailed reconciliation of projections impracticable. |
![]() Sales: 4% + Financial Outlook Financial Outlook Innovation Strong Performance in Food & Ingredients Accelerated Pricing More Effective A&P Spend – Target 6-7% of Consumer Foods Sales |
![]() Financial Outlook Financial Outlook List Pricing Trade Spend Effectiveness Portfolio Management / Mix Accelerated Pricing: |
![]() Financial Outlook Financial Outlook Mix – Innovation is Gross Margin Accretive Productivity – COGS: $225 MM / YR Consumer Foods segment Ultimate Margin Impact Depends on Inflation – SG&A: Zero Growth for “Core Overhead” SAP as an Enabler Capital Allocation Key Items Driving 8-10% EPS Growth from 4%+ Sales Growth |
![]() Financial Outlook Financial Outlook CAPEX $450 MM Per Year – Quality / Food Safety – Innovation – Productivity Depreciation $350 MM Per Year Share Buyback Remains Benchmark for Capital Allocation – $500 MM Authorization |
![]() Summary Summary More Balanced Algorithm – Higher Sales Growth Expectations – Mix – Productivity – G&A Initiatives – Capital Allocation Long Term EPS Goals Unchanged : 8-10% EPS Growth* – Assumes normal ( $200 mm/yr) Trading & Merchandising profits – Unusually high T&M Profits normalized in determining EPS base yr-to-yr CAG expects 8-10% EPS growth long-term after normalizing high T&M profits * Excluding items impacting comparability. |
![]() Summary Summary Today’s News Release : Q3 2008 Better than Planned – Very strong Trading & Merchandising results – Food & Ingredients momentum also ahead of expectations – As expected, Consumer Foods margin pressure Pricing benefit starting to show in Q3, more in Q4 Solid Q3 volumes Input cost increases continue to be high – Q3 EPS Strength = Upside to $1.55 + FY 2008 EPS* – Q3 Not Yet Closed & Increased Investment Levels TBD – Details on March 27 (Earnings Release) * Excluding items impacting comparability, see Appendix C. |
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![]() Margin % Goals and Margin $ Goals Very Different in an Inflationary Environment CAG Commitment to $ Growth. Margin % Goals Relevant at Later Date. 42% 50% Profit Margin % After Inflation & Pricing Before Inflation & Pricing 10% $ Profit Growth $1.10 $1.00 Profit $ $1.50 $1.00 Costs $2.60 $2.00 Sales Example: Appendix A: Margin % Goals Appendix A: Margin % Goals $ Profit Grows, % Erodes |
![]() Appendix B: Appendix B: Consumer COGS – Consumer COGS – Major Components Major Components Logistics $5.0 B COGS Base Manufacturing Procurement $0.6 B $1.1 B $3.3 B Proteins 20.0% Fats and Oils 15.0% Dairy 5.0% Grains and Other Ingredients 10.0% Seeds and Nuts 5.0% Fruits, Vegetables, Legumes 10.0% Sweeteners, Starches, Other 5.0% Packaging 30.0% |
![]() Appendix C: Regulation G Appendix C: Regulation G Fiscal 2008 EPS Reconciliation for Regulation G purposes Quarter 1 Quarter 2 Fiscal Year Total Diluted EPS from Continuing Operations, rounded 0.36 $ 0.50 $ Items Impacting Comparability: Benefit from Restructuring Charges (0.02)* Peter Pan Recall Costs 0.01 * Non-Operating Gain on Merger (0.01)* Benefit of Lower than Normal Tax Rate (0.01)* Banquet Pot Pie Recall Costs 0.03 *** Additional company commentary will be provided on upward revisions to full fiscal 2008 EPS guidance at the company's third quarter conference call scheduled for March 27, 2008. ** ** ** The timing and amount of items impacting comparability cannot be determined at this time. Diluted EPS Excluding items impacting comparability $ 0.34 $ 0.53 Above $1.55*** Quarters 3 & 4 * Items affecting comparability are each rounded to the nearest penny; the sum of items will not equal $0.34 due to rounding. Above $0.70 total*** |
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