Hormel Foods Hrl Presentation June 2008
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- Pages: 28
Jody H. Feragen Sr. Vice President and CFO
June 2008
©Hormel Foods Corporation 2008
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 that appear on pages 25-30 in the company’s Form 10-Q for the quarter ended April 26, 2008.
©Hormel Foods Corporation 2008
Hormel Foods Corporation
Q2 Statement of Operations In millions except per share
sales tonnage (lbs.) net earnings net earnings per share
Copyright 2008 ©Hormel Foods Corporation
2008
2007
change
$1,594
$1,505
+6%
1,148
1,096
+5%
$78
$68
+14%
0.56
0.49
+14%
2008 Q2 review of
Operating Profit Grocery Products
Refrigerated Foods
Jennie‐O Turkey Store
Specialty Foods
All Other
-4
-2
0
2
4
$ Chg (in millions) Copyright 2008 ©Hormel Foods Corporation
6
8
10
12
14
Live hog prices 70.00 60.00 50.00 40.00
2008
30.00
2007
20.00
5 Yr Avg.
10.00 0.00 Jan Feb Mar Apr May Jun
Copyright 2008 ©Hormel Foods Corporation
Jul
Aug Sep Oct Nov Dec
Grain prices Corn
SBM
7.00
400.00 350.00 300.00 250.00 200.00 150.00 100.00 50.00 0.00
6.00 5.00 4.00 3.00 2.00 1.00
Ja
n M 06 ar M 06 ay 06 Ju l0 Se 6 p No 06 v0 Ja 6 n M 07 ar M 07 ay 07 Ju l Se 07 p No 07 v0 Ja 7 n M 08 ar M 08 ay 08
-
Copyright 2008 ©Hormel Foods Corporation
Corn SBM
Strong Free Cash Flow Millions $
500 450 400 350 300 250 200 150 100 50 0
CF from Ops Cap Ex
2004
2005
Copyright 2008 ©Hormel Foods Corporation
2006
2007
Ready for Growth
Investing in the Future New Dubuque Plant • • • • •
•
$89 million investment 60 minutes from Logistic Service Inc. in Eldridge, Iowa 327,000 square-foot facility Operational by November 2009 180 new jobs will be created with more expected in future phases Operated by a wholly-owned subsidiary of Hormel Foods Corporation
Copyright 2008 ©Hormel Foods Corporation
Acquisition Path
Provena Foods, Inc.
2001
2002
Copyright 2008 ©Hormel Foods Corporation
2003
2004
2005
2006
2007 Acquisition of
Burke Corporation
Copyright 2008 ©Hormel Foods Corporation
Review of
Annual Dividend History 42 consecutive annual increases
$0.80
$0.74
$0.70 $0.60 $0.50 $0.40 $0.30 $0.20 $0.10 $0.00 66
68 70
72 74 76
78 80
Copyright 2008 ©Hormel Foods Corporation
82 84 86
88 90 92
94 96
98 00 02
04 06
08
Share repurchases (millions $)
$90 $80 $70 $60 $50 $40 $30 $20 $10 $2004
2005
2006
2007
2008 (thru 2nd Qtr)
3.6 million share authorization remains Copyright 2008 ©Hormel Foods Corporation
Balanced Model
Packa ge Foods d
Copyright 2008 ©Hormel Foods Corporation
Prote in
The Billion Dollar Challenge NewProduct Product Sales: 2000-2007 New Sales, Corp: 2000-2007
1200
All Other
Sales in $ Million
1000
Precept Foods
800
Specialty Foods
600
JOTS
400
Foodservice Meat Products
200
Grocery Products
0 2000
2001
2002
Copyright 2008 ©Hormel Foods Corporation
2003
2004
2005
2006
2007
Microwave
An Appetite for
Convenient Products
500 400 2004
300 200 100 0 index Copyright 2008 ©Hormel Foods Corporation
2005 2006 2007
Microwave
An Appetite for
Convenient Products What’s Next…
Copyright 2008 ©Hormel Foods Corporation
HORMEL Party Trays
An Appetite for
Convenient Products • Store-made deli trays are made to order. • Typical shelf life of store-made deli trays is 3-5 days. • Hormel Party Trays are available year-round in the refrigerated section, ready for spontaneous gatherings any time.
300 250 200 150
2005
100
2006
50 0 index
Copyright 2008 ©Hormel Foods Corporation
2004
2007
HORMEL Party Trays
An Appetite for
Convenient Products What’s Next…
Copyright 2008 ©Hormel Foods Corporation
AUSTIN BLUES
An Appetite for
Fresher, Bolder Flavors
200 150
2004
100
2005
50 0 index
Copyright 2008 ©Hormel Foods Corporation
2006 2007
An Appetite for
Fresher, Bolder Flavors What’s Next… Pulled Chicken
Copyright 2008 ©Hormel Foods Corporation
AUSTIN BLUES
JENNIE-O TURKEY STORE Turkey Burgers
An Appetite for
Better, Healthier Options • A turkey burger…how innovative is this? • How about a turkey burger that tastes good? 800 600
2004
400
2005 2006
200
2007
0 index Copyright 2008 ©Hormel Foods Corporation
An Appetite for
Better, Healthier Options
HORMEL NATURAL CHOICE
Foods that fit your health-conscious lifestyle •100% All Natural Ingredients •No Preservatives •No Additives •Full of Flavor
250 200 150
2006
100
2007
50 0 index
Copyright 2008 ©Hormel Foods Corporation
An Appetite for
Better, Healthier Options What’s Next…
Copyright 2008 ©Hormel Foods Corporation
HORMEL NATURAL CHOICE
Sales in $ Millions
Go for 2 by ‘12
Copyright 2008 ©Hormel Foods Corporation
Innovation focus areas • • • • •
Refrigerated ready meals Microwave meals NATURAL CHOICE branded products Value-added turkey Ethnic Foods
• Health and Wellness • Packaging – design, performance, and sustainability
Copyright 2008 ©Hormel Foods Corporation
An Appetite for
Supporting Our Brands
Copyright 2008 ©Hormel Foods Corporation
Hormel Foods Corporation
Total Company Growth net sales
$7.0
$ in Billions
$6.0
EPS
10% R G A C
$2.50 $2.00
$5.0 $4.0
$1.50
$3.0
$1.00
$2.0
R1 G CA
3% $2.17
$1.33
$0.50
$1.0
$0.00
$0.0 2003
2007
Copyright 2008 ©Hormel Foods Corporation
2003
2007
Thank you
Copyright 2008 ©Hormel Foods Corporation
June 2008
©Hormel Foods Corporation 2008
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 that appear on pages 25-30 in the company’s Form 10-Q for the quarter ended April 26, 2008.
©Hormel Foods Corporation 2008
Hormel Foods Corporation
Q2 Statement of Operations In millions except per share
sales tonnage (lbs.) net earnings net earnings per share
Copyright 2008 ©Hormel Foods Corporation
2008
2007
change
$1,594
$1,505
+6%
1,148
1,096
+5%
$78
$68
+14%
0.56
0.49
+14%
2008 Q2 review of
Operating Profit Grocery Products
Refrigerated Foods
Jennie‐O Turkey Store
Specialty Foods
All Other
-4
-2
0
2
4
$ Chg (in millions) Copyright 2008 ©Hormel Foods Corporation
6
8
10
12
14
Live hog prices 70.00 60.00 50.00 40.00
2008
30.00
2007
20.00
5 Yr Avg.
10.00 0.00 Jan Feb Mar Apr May Jun
Copyright 2008 ©Hormel Foods Corporation
Jul
Aug Sep Oct Nov Dec
Grain prices Corn
SBM
7.00
400.00 350.00 300.00 250.00 200.00 150.00 100.00 50.00 0.00
6.00 5.00 4.00 3.00 2.00 1.00
Ja
n M 06 ar M 06 ay 06 Ju l0 Se 6 p No 06 v0 Ja 6 n M 07 ar M 07 ay 07 Ju l Se 07 p No 07 v0 Ja 7 n M 08 ar M 08 ay 08
-
Copyright 2008 ©Hormel Foods Corporation
Corn SBM
Strong Free Cash Flow Millions $
500 450 400 350 300 250 200 150 100 50 0
CF from Ops Cap Ex
2004
2005
Copyright 2008 ©Hormel Foods Corporation
2006
2007
Ready for Growth
Investing in the Future New Dubuque Plant • • • • •
•
$89 million investment 60 minutes from Logistic Service Inc. in Eldridge, Iowa 327,000 square-foot facility Operational by November 2009 180 new jobs will be created with more expected in future phases Operated by a wholly-owned subsidiary of Hormel Foods Corporation
Copyright 2008 ©Hormel Foods Corporation
Acquisition Path
Provena Foods, Inc.
2001
2002
Copyright 2008 ©Hormel Foods Corporation
2003
2004
2005
2006
2007 Acquisition of
Burke Corporation
Copyright 2008 ©Hormel Foods Corporation
Review of
Annual Dividend History 42 consecutive annual increases
$0.80
$0.74
$0.70 $0.60 $0.50 $0.40 $0.30 $0.20 $0.10 $0.00 66
68 70
72 74 76
78 80
Copyright 2008 ©Hormel Foods Corporation
82 84 86
88 90 92
94 96
98 00 02
04 06
08
Share repurchases (millions $)
$90 $80 $70 $60 $50 $40 $30 $20 $10 $2004
2005
2006
2007
2008 (thru 2nd Qtr)
3.6 million share authorization remains Copyright 2008 ©Hormel Foods Corporation
Balanced Model
Packa ge Foods d
Copyright 2008 ©Hormel Foods Corporation
Prote in
The Billion Dollar Challenge NewProduct Product Sales: 2000-2007 New Sales, Corp: 2000-2007
1200
All Other
Sales in $ Million
1000
Precept Foods
800
Specialty Foods
600
JOTS
400
Foodservice Meat Products
200
Grocery Products
0 2000
2001
2002
Copyright 2008 ©Hormel Foods Corporation
2003
2004
2005
2006
2007
Microwave
An Appetite for
Convenient Products
500 400 2004
300 200 100 0 index Copyright 2008 ©Hormel Foods Corporation
2005 2006 2007
Microwave
An Appetite for
Convenient Products What’s Next…
Copyright 2008 ©Hormel Foods Corporation
HORMEL Party Trays
An Appetite for
Convenient Products • Store-made deli trays are made to order. • Typical shelf life of store-made deli trays is 3-5 days. • Hormel Party Trays are available year-round in the refrigerated section, ready for spontaneous gatherings any time.
300 250 200 150
2005
100
2006
50 0 index
Copyright 2008 ©Hormel Foods Corporation
2004
2007
HORMEL Party Trays
An Appetite for
Convenient Products What’s Next…
Copyright 2008 ©Hormel Foods Corporation
AUSTIN BLUES
An Appetite for
Fresher, Bolder Flavors
200 150
2004
100
2005
50 0 index
Copyright 2008 ©Hormel Foods Corporation
2006 2007
An Appetite for
Fresher, Bolder Flavors What’s Next… Pulled Chicken
Copyright 2008 ©Hormel Foods Corporation
AUSTIN BLUES
JENNIE-O TURKEY STORE Turkey Burgers
An Appetite for
Better, Healthier Options • A turkey burger…how innovative is this? • How about a turkey burger that tastes good? 800 600
2004
400
2005 2006
200
2007
0 index Copyright 2008 ©Hormel Foods Corporation
An Appetite for
Better, Healthier Options
HORMEL NATURAL CHOICE
Foods that fit your health-conscious lifestyle •100% All Natural Ingredients •No Preservatives •No Additives •Full of Flavor
250 200 150
2006
100
2007
50 0 index
Copyright 2008 ©Hormel Foods Corporation
An Appetite for
Better, Healthier Options What’s Next…
Copyright 2008 ©Hormel Foods Corporation
HORMEL NATURAL CHOICE
Sales in $ Millions
Go for 2 by ‘12
Copyright 2008 ©Hormel Foods Corporation
Innovation focus areas • • • • •
Refrigerated ready meals Microwave meals NATURAL CHOICE branded products Value-added turkey Ethnic Foods
• Health and Wellness • Packaging – design, performance, and sustainability
Copyright 2008 ©Hormel Foods Corporation
An Appetite for
Supporting Our Brands
Copyright 2008 ©Hormel Foods Corporation
Hormel Foods Corporation
Total Company Growth net sales
$7.0
$ in Billions
$6.0
EPS
10% R G A C
$2.50 $2.00
$5.0 $4.0
$1.50
$3.0
$1.00
$2.0
R1 G CA
3% $2.17
$1.33
$0.50
$1.0
$0.00
$0.0 2003
2007
Copyright 2008 ©Hormel Foods Corporation
2003
2007
Thank you
Copyright 2008 ©Hormel Foods Corporation
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