Attached files
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| 8-K - FORM 8-K - Pinnacle Foods Finance LLC | d8k.htm |
 Pinnacle
Foods 2011 Wells Fargo Securities Consumer,
Gaming & Lodging Conference
May 24, 2011
Exhibit 99.1 |
 2
Forward-Looking Statements and GAAP Reconciliation
Forward-looking
statements
should
not
be
read
as
a
guarantee
of
future
performance
or
results,
and
will
not
necessarily
be
accurate
indications
of
the
times
at,
or
by
which,
such
performance
or
results
will
be
achieved
or
whether
such
performance
or
results
will
ever
be
achieved.
Forward-looking
information
is
based
on
information
available
at
the
time
and
management’s
good
faith
belief
with
respect
to
future
events,
and
is
subject
to
risks
and
uncertainties
that
could
cause
actual
performance
or
results
to
differ
materially
from
those
expressed
in
the
statements.
Forward-looking
statements
speak
only
as
of
the
date
the
statements
are
made.
Pinnacle
Foods
Finance
LLC
(“Pinnacle
Foods,”
“Pinnacle”
or
the
“Company”)
assumes
no
obligation
to
update
forward-looking
statements
to
reflect
actual
results,
changes
in
assumptions
or
changes
in
other
factors
affecting
forward-looking
information
except
to
the
extent
required
by
applicable
securities
laws.
If
the
Company
does
update
one
or
more
forward-looking
statements,
no
inference
should
be
drawn
that
the
Company
will
make
additional
updates
with
respect
thereto
or
with
respect
to
other
forward-looking
statements.
SEC
rules
regulate
the
use
of
“non-GAAP
financial
measures”
in
public
disclosures,
such
as
“Free
Cash
Flow”,
“EBITDA”
“Adjusted
EBITDA”
and
“Consolidated
EBITDA”,
that
are
derived
on
the
basis
of
methodologies
other
than
in
accordance
with
generally
accepted
accounting
principles,
or
“GAAP.”
These
rules
govern
the
manner
in
which
non-GAAP
financial
measures
may
be
publicly
presented
and
prohibit
in
all
filings
with
the
SEC,
among
other
things:
•
exclusion
of
charges
or
liabilities
that
require,
or
will
require,
cash
settlement
or
would
have
required
cash
settlement,
absent
an
ability
to
settle
in
another
manner,
from
a
non-GAAP
financial
measure;
and
•
adjustment
of
a
non-GAAP
financial
measure
to
eliminate
or
smooth
items
identified
as
non-recurring,
infrequent
or
unusual,
when
the
nature
of
the
charge
or
gain
is
such
that
it
has
occurred
in
the
past
two
years
or
is
reasonably
likely
to
recur
within
the
next
two
years.
We
have
included
non-GAAP
financial
measures
in
this
presentation,
including
Free
Cash
Flow,
EBITDA,
Adjusted
EBITDA
and
Consolidated
EBITDA,
that
may
not
comply
with
the
SEC
rules
governing
the
presentation
of
non-GAAP
financial
measures.
In
addition,
the
Company’s
measurements
of
Consolidated
EBITDA
are
based
on
definitions
of
EBITDA
included
in
certain
of
the
Company’s
debt
agreements
and,
as
a
result,
may
not
be
comparable
to
those
of
other
companies.
Also,
Free
Cash
Flow
may
not
be
comparable
to
similarly
titled
amounts
presented
by
other
companies. |
 3
In a Tough Environment, Pinnacle Delivered Solid
Results in 2010.
* Product Contribution = Gross Margin less consumer marketing and brokerage
**After adjusting actual results for adjustments per Senior Credit Facility and Bond
Indentures |
 4
Q1 2011 performance in line with our expectations
*After adjusting actual results for adjustments per Senior Credit Facility and Bond
Indentures |
 5
Key Performance Drivers
•
Brand strength
•
Pinnacle brands hold #1 or #2 market position in 8 of 12 major category segments in which
they compete
•
Limited private label penetration
•
Enhanced innovation capabilities driving improved pipeline
•
New agency partners |
 6
Category Segments
Major Brands
Market Position
IRI Market
Share
Frozen Vegetables
#1
26.7
Shelf-Stable Pickles, Peppers and Relish
#1
18.4
Baking Mixes and Frostings
#2
17.1
Frozen Complete Bagged Meals
#2
18.4
Table Syrups
#2
18.9
Frozen Prepared Seafood
#2
19.0
Frozen Waffles, Pancakes and French Toast
#2
12.4
Frozen Breakfast Entrées / Savory
Handhelds
#2
7.1
Canned Meat
#3
8.7
Bagels
#3
7.1
Single-Serve Frozen Dinners and Entrées
#4
8.4
Frozen Pizza-for-One
#4
10.4
Source: IRI -
52 week end May 1, 2011 -
Total US Food
Iconic, Leading Brand Equities
Pinnacle holds the #1 or #2 market position in 8 of the 12 major
category segments |
 7
Enhanced Innovation Capabilities Driving Improved Pipeline
New Consumers
Health & Wellness
Premium /
Experience
New Segment |
 8
Improved Marketing/Alignment with New Agency Partners
Agency
Key Clients
BBDO (Creative Advertising)
Starbucks, GE, Fed Ex, Mars, Diageo, Gillette
TBWA (Creative Advertising)
Apple, Absolute, Adidas, Visa, McDonalds, P+G
Zenith Optimedia (Media Buying)
HP, Lexus, Nestle, Verizon, Darden, P+G |
 9
Media coverage for new campaigns has been positive |
 10
Duncan Hines Advertising |
 11
Aunt Jemima Advertising |
 12
Key Performance Drivers
•
Brand strength
•
Pinnacle brands hold #1 or #2 market position in 8 of 12 major category segments in which
they compete
•
Limited private label penetration
•
Enhanced innovation capabilities driving improved pipeline
•
New agency partners
•
Portfolio diversification
•
Participation in a broad set of categories
•
Scale where needed –
5
th
largest frozen food company |
 13
Participation in a Broad Set of Categories
___________________________
LTM Net Sales as of 12/26/10.
Duncan Hines Grocery Division
Birds Eye Frozen Division
Specialty Foods Division |
 14
$ Sales ($MM)
$5,342
16.8
$1,712
5.4
$1,508
4.7
$1,450
4.6
$1,288
4.0
$1,231
3.9
$913
2.9
$801
2.5
$618
1.9
$553
1.7
$ Share
Source: SymphonyIRI Group InfoScan Reviews -
52 week end Dec. 26, 2010 -
Total US Food
Pinnacle Ranks Fifth in Frozen Foods |
 15
Key Performance Drivers
•
Brand strength
•
Pinnacle brands hold #1 or #2 market position in 8 of 12 major category segments in which they
compete •
Limited private label penetration
•
Enhanced innovation capabilities driving improved pipeline
•
New agency partners
•
Portfolio diversification
•
Participation in a broad set of categories
•
Scale
where
needed
–
5
th
largest
frozen
food
company
•
Nimble, responsive organization
•
Experienced senior team
•
Management alignment to value creation
•
Speed –
Birds Eye integration |
 16
Pinnacle Management Team
•
Joined
Pinnacle
–
June
2005
•
EVP,
CFO
and
CAO
of
Cendant
Timeshare
•
CFO
of
International
Home
Foods
Inc.
•
Joined
Pinnacle
–
November
2008
•
CMO
Trane
Inc.
(formerly
American
Standard)
•
GM
&
Marketing
and
Sales
roles
at
Campbell’s
and
Kraft
•
Joined
Pinnacle
–
March
2008
•
SVP
Human
Resources
for
Toys
R
Us
•
Senior
VP
HR
Roles
at
Nabisco
and
Bloomingdales
•
Joined
Pinnacle
–
April
2006
•
Senior
Marketing
&
Sales
roles
at
Campbell’s
and
Nabisco
•
Joined
Pinnacle
–
June
2004
•
Regional
Team
Leader
Sales
for
Campbell’s
•
Sales
&
Customer
Service
Roles
for
Quaker
Foods
•
Joined
Pinnacle
–
May
2001
•
General
Counsel
for
International
Home
Foods
Inc.
•
VP
and
General
Counsel
at
Stella
Foods
•
Joined
Pinnacle
–
June
2010
•
SVP
New
Ventures
at
Frito
Lay
•
President,
Quaker
Foods
and
Snacks
•
Joined
Pinnacle
–
February
2011
•
SVP
Operations
Excellence
at
Kraft
•
Chief
Supply
Chain
Officer
at
Cadbury
•
Joined
Pinnacle
-
July
2009
•
North
American
President
for
Mars
Inc.
•
President
of
Major
League
Baseball
Properties
•
GM,
marketing,
and
strategy
roles
at
General
Foods
/
Kraft |
 17
Birds Eye integration has been well executed |
 18
Key Performance Drivers
•
Brand strength
•
Pinnacle brands hold #1 or #2 market position in 8 of 12 major category segments in which they
compete •
Limited private label penetration
•
Enhanced innovation capabilities driving improved pipeline
•
New agency partners
•
Portfolio diversification
•
Participation in a broad set of categories
•
Scale
where
needed
–
5
th
largest
frozen
food
company
•
Nimble, responsive organization
•
Experienced senior team
•
Management alignment to value creation
•
Speed –
Birds Eye integration
•
Dependable financial model
•
Solid 2010 financial results;
•
Q1 2011 performance was consistent with internal expectations
•
Refinanced debt; extending maturity and lowering debt service cost
•
Accelerating productivity / pricing actions |
 19
Financial Performance |
 20
Fiscal 2010 and Q1 2011 Financial Summary
___________________________
1.
Prior Year reflects Pro forma for Birds Eye acquisition.
to Prior Year
(1)
Q1
to Prior Year
($s in millions)
Fiscal '10
%
Fiscal '11
%
Net sales
$ 2,437
-4.4%
$ 606
-7.6%
North American Retail (ex. exited businesses)
2,012
-1.2%
509
-6.6%
Gross profit
602
-1.8%
153
-1.9%
% Net sales
24.7%
25.2%
Advertising and consumer
59
-29.8%
15
-37.5%
% Net sales
2.4%
2.5%
SG&A and other
278
1.8%
53
-24.3%
% Net sales
11.4%
8.7%
Reported EBIT
$ 265
3.5%
$ 85
37.1%
% Net sales
10.9%
14.0%
Depreciation & Amortization
78
-6.0%
20
0.0%
Reported EBITDA
$ 343
1.2%
$ 105
28.0%
% Net sales
14.1%
17.3%
Adjusted EBITDA
$ 447
14.3%
$ 107
-6.1%
% Net sales
18.3%
17.7%
Variance
Variance |
 21
Fiscal 2010 and Q1 2011 Consolidated EBITDA
Reconciliation |
 22
Current Debt Structure
($s in millions)
Dec-10
Mar-11
Revolving Credit Facility
$
-
$ -
Term Loan B
1,199
1,199
Term Loan D
368
368 9.25% Senior Notes
625
625 8.25% Senior Notes
400
400 10.625% Senior Subordinated Notes
199
199 Other Debt
16
15 Total Debt
$ 2,807
$ 2,806
Cash
(115)
(176)
Total Net Debt
$ 2,692
$ 2,630
Total Leverage Ratio (per Senior Credit Facility and Bond Indentures)
5.7
5.8
|
 23
Accelerating Core Supply Chain Productivity Initiatives
Targeting
the
high
end
of
our
range
of
3.5%
-
-
4.0%
of
cost
of
products
sold
Productivity
and
pricing
actions
offsetting
inflation
Full
line
of
sight
on
2011
input
costs
Structured,
multi-functional
team
and
process
in
place
Multi-year
capital
investment
to
accelerate
productivity
including
2011
footprint
consolidations
___________________________
1.
Excluding Birds Eye |
 24
We have taken steps to drive a step change in productivity by
consolidating our manufacturing footprint.
•
Canned Meat Consolidation: Tacoma, Washington into Fort Madison,
Iowa
•
Announced:
December 1, 2010
•
Tacoma closure:
Q2 2011
•
Fort Madison start-up:
Q3 2011
•
Frozen Vegetables / Meals Consolidation: Fulton, New York into Darien,
Wisconsin and Waseca, Minnesota
•
Announced:
April 15, 2011
•
Fulton closure:
Q4 2011
•
Darien / Waseca start-up:
Q1 2012 |
 25
We have announced list pricing to partially offset
inflation.
PFG Category
PFG Pricing Action / Date
Waffles
3/28/11
Bagels
3/28/11
Vegetables
low tier -
5/2/11
Seafood
5/2/11
Hungry-Man (classic fried chicken)
5/2/11
Baking Mixes/Frosting/Brownies
1/03/11
Frosting/Brownies/Decadent Cake/Cookies
6/20/11
Syrups
Mrs. Butterworth’s/Log Cabin
Mrs. Butterworth’s/Log Cabin/Country Kitchen
3/07/11
7/18/11
Vlasic
7/18/11
Armour
7/18/11
Nalley’s Chili
7/18/11 |
 Food for
Thought: Solid 2010 Financial Results in
a Challenging Environment;
Q1 on track with internal
expectations
Successful Integration of
Birds Eye Acquisition
Re-energized Innovation
Pipeline
Accelerating Productivity,
including footprint
consolidation |