RALCORP HOLDINGS INC /MO - FORM 8-K - EX-99.1

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8-K - 8-K - RALCORP HOLDINGS INC /MO	d406497d8k.htm

Exhibit 99.1

Ralcorp Holdings, Inc.

Barclays Back to School Conference

September 5th, 2012

Forward Looking Statements

Please note that this presentation contains forward-looking statements as defined in the Private Securities Litigation

Reform

Act

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

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

result

new

information

future

events

developments,

except

required

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.

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

us.

Some

data

also

are

based

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

ascertained

the

underlying

economic

assumptions

which

such

data

are

based.

Similarly,

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

Sara

Lee

Company.

have

not

independently

verified

any

the

data

nor

have

ascertained

the

underlying economic assumptions on which such data are based.

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

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

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

forward

sale

contracts,

gain

sale

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%

11%

10%

11%

10%

12%

13%

14%

Average Organic Growth = 3.6%

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

54%

27%

193%

263%

Ralcorp

Mid Cap Food

Large Cap Food

S&P 500

The Private-Brand Opportunity

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

Opportunities

EBITD

Margin

U.S. Private-Brand Market Growth

2011 U.S. Private-Brand Market Share

78%

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

Economic Cycle

Source: A.C. Nielsen.

10%

(6)%

(4)%

(2)%

10%

12%

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Branded

Private Brand

Y-O-Y GDP Growth

Retailer Concentration a Major Driver in Private-Brand

Growth

Source: Symphony

IRI

Special

Report

–

Private

Label

Europe;

Wall

Street

estimates.

Private-Brand Food Economics Are Powerful for

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

Source: IRI FDMx 52-weeks ending October 2, 2011.

60%

30%

65%

45%

70%

90%

50%

70%

Cereal

Crackers

Snack Nuts

Pasta

Refrigerated

Dough

Peanut

Butter

Jams

Ralcorp

Position:

Positioning Ralcorp for Long-term

Sustainable Growth

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

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

The Ralcorp Center Store Food Business

$3.2 billion private-brand food business

Significant Savings Due to Consolidation

$26

$31

million

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

Growth-through-Acquisition Strategy

We Have Completed 30 Acquisitions Since 1997, Totaling

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

Ralcorp’s Acquisition Pipeline is Robust with Nearly 50

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 (%)

Case Study: Building Platform –

Frozen Bakery Division

($ in millions)

Target

Revenue

Cascade Cookie

Company

$19

Lofthouse Foods

Bakery Chef

171

C2B

Western Waffles

Parco

Cottage Bakery

125

Pastries Plus

Sepp’s

Total

$583

Fiscal 2013

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)

Headwinds

Tailwinds

The Ralcorp Cash Story

The Ralcorp Cash Story –

“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%

Share Repurchases

Acquisitions

Key Economics of “50 / 50”

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

$40

$50

million

2.5x –

3.0x leverage

Illustration of Model in Practice

50% Cash Flow Toward Acquisitions

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

$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

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

Driven by acquisition-based

growth model

Enhanced by productivity gains,

share repurchases and

acquisition synergies

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

Appendix

Ralcorp –

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

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

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

Intangibles

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%

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

Pro

Forma

Net

Sales

Segment

Pro

Forma

Net

Sales

Product

Pasta

14%

Crackers &

12%

Nutritional

Bars, Other

Snack Nuts,

Candy & Chips

14%

Sauces &

Spreads

13%

Ready-to-Eat

Cereal

11%

Refrigerated

Dough

Griddle

Hot Cereal

Breads

Frozen, Other

Center Store

Private Brand

74%

Frozen

Bakery

26%

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

Base business 2013 Estimate

Source: Management estimates

Nuts

24%

Wheat

19%

Packaging

19%

Fruit & Veg

Cocoa

Flavoring

Sweeteners

Oil

All Other

19%

Oats

Corn

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