Post on 07-Aug-2018
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Monday, November 17, 2014
PLMA Investor Day
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Forward-looking Statements
This presentation may contain “forward-looking statements within the meaning of the PrivateSecurities Litigation Reform Act of 1995.” Forward-looking statements include all statements thatdo not relate solely to historical or current facts, and can generally be identified by the use ofwords such as “guidance,” “may,” “should,” “could,” “expects,” “seeks to,” “anticipates,” “plans,”
“believes,” “estimates,” “approximately,” “nearly,” “intends,” “predicts,” “projects,” “potential”
“promises” or “continue” or the negative of such terms and other comparable terminology. These
statements are only predictions. The outcome of the events described in these forward-looking
statements is subject to known and unknown risks, uncertainties and other factors that may causethe Company or its industry’s actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance or achievementexpressed or implied by these forward looking statements. TreeHouse’s Form 10-K for the periodending December 31, 2013 and other filings with the SEC, discuss some of the risk factors thatcould contribute to these differences. You are cautioned not to unduly rely on such forward-
looking statements, which speak only as of the date made, when evaluating the informationpresented during this conference call. The Company expressly disclaims any obligation orundertaking to disseminate any updates or revisions to any forward-looking statement containedherein, to reflect any change in its expectations with regard thereto, or any other change in events,conditions or circumstances on which any statement is based.
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Today’s Agenda
Topic Presenter
Financial Review Tim Young
The Branding of Private Label Sam K. Reed
Building The TreeHouse Brand Through Customer Intimacy Chris Sliva
Following the Private Label Consumer Rachel Bishop
Winning in Single Serve Harry Overly
Flagstone Foods Paul Lapadat
Center of Store Growth Mike Axelrod
2015 Working Assumptions Dennis Riordan
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Financial Review
Tim Young
Vice President and Controller
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September 2014 YTD Results
2014 2013
Sales $2,042,589 $1,633,606
COGS 1,615,333 1,294,603
Gross Profit 427,256 339,003
Operating Expenses 284,416 212,486
Other Expenses 58,262 35,908
Pre-Tax Income 84,578 90,609
Income Taxes 28,615 26,405
Net Income $55,963 $64,204
Fully Diluted Shares 39,259 37,353
Fully Diluted EPS $1.43 $1.72
Adjusted Net Income $99,119 $82,503
Adjusted EPS $2.52 $2.21
Nine months ended September 30
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September 2014 YTD Results
2014 2013 2014 2013
Sales $2,042,589 $1,633,606 $2,042,589 $1,633,606
COGS 1,615,333 1,294,603 1,600,061 1,274,924
Gross Profit 427,256 339,003 442,528 358,682
20.9% 20.8% 21.7% 22.0%
Operating Expenses 284,416 212,486 267,233 206,384
Other Expenses 58,262 35,908 29,282 36,098
Pre-Tax Income 84,578 90,609 146,013 116,200
Income Taxes 28,615 26,405 46,894 33,697
Net Income $55,963 $64,204 $99,119 $82,503
Fully Diluted Shares 39,259 37,353 39,259 37,353
Earnings Per Share $1.43 $1.72 $2.52 $2.21
Nine months ended September 30 Nine months ended September 30
Reported Adjusted
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September 2014 Operating Segments
Nine months ended September 30
($ in thousands)
2014 2013 Inc/(Dec) 2014 2013 Inc/(Dec) 2014 2013 Inc/(Dec)
Net Sales $1,489,014 $1,163,733 28.0% $284,633 $264,357 7.7% $268,942 $205,516 30.9%
DOI $230,901 $188,705 22.4% $33,837 $35,888 -5.7% $45,546 $38,038 19.7%
DOI % 15.5% 16.2% 11.9% 13.6% 16.9% 18.5%
North American Retail Grocery Food Away From Home Industrial & Export
Strong topline growth, both organic and throughstrategic acquisitions, complemented by operating
efficiencies. DOI margin improvement, however,
reflects the effect of recent acquisitions.7
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Volume Analysis –Nine Months 2014
($ in thousands) Retail Food Away Industrial
Grocery From Home & Export Total
2013 Net sales 1,163,733$ 100.0% 264,357$ 100.0% 205,516$ 100.0% 1,633,606$ 100.0%
Volume / Mix 64,483 5.5% (1,546) -0.6% 6,189 3.0% 69,126 4.2%
Pricing (4,274) -0.4% 1,139 0.4% (979) -0.5% (4,114) -0.3%
Net from operations 60,209 5.2% (407) -0.2% 5,210 2.5% 65,012 4.0%
Acqs / rationalization 275,863 23.7% 22,644 8.6% 58,492 28.5% 356,999 21.9%
Foreign currency (10,791) -0.9% (1,961) -0.7% (276) -0.1% (13,028) -0.8%
2014 Net sales 1,489,014$ 128.0% 284,633$ 107.7% 268,942$ 130.9% 2,042,589$ 125.0%
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Outstanding asof 9/30/2014
Availability Interest Rate Expiration
Revolving Credit (1) $654 mm $235 mm(3) L+120 bps(4) May 2019
Term Loan(5) $299 mm ― L+175 bps May 2021
Acquisition Term Loan $199 mm ― L+200 bps May 2019
High Yield Notes $400 mm ― 4.875% Fixed March 2022
Total Debt $1,552 mm(2)
TreeHouse Debt Capacity
Notes:(1) Entered into a new revolving credit agreement in May 2014, with an expiration date of May 2019(2) Includes $10.8 million of tax increment financing and other debt(3) Excludes outstanding letters of credit totaling $10.9 million that are issued but undrawn(4) Applicable rate as of September 30, 2014
Proforma leverage is expected to be less than 3.5 times debt to EBITDA at 12/31/14.
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Growing Strong, Standing Tall
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Sam K. Reed
Chairman, President & Chief Executive Officer
The Branding of Private Label
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The Evolution of Private Label
It is not the strongest nor the most intelligent that
survives, it is the one most adaptable to change.
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A Decade of Change…
THEN NOWBaby Boomers Consumer Millennials
Generic NBE Products OPP Premium Organic
3 Squares Meal Occasions Grazing
Lite & Diet Nutrition Phytochemicals
Eco-friendly Social Responsibility "Locavores" & B4U
…in Food
…in Grocery
…in Private Label
Super Centers Stores Aldi & Whole Foods
Private Label Store Brands Destination Brands
Center of Store Shopping Perimeter Racetrack
Coupons Deals Apps
Peapod Convenience AmazonFresh
Mass Marketing Communication Social Media
Meta Data
Allergens Food Safety GMOs
…in Technology
Lowest Landed Cost Competitive Advantage Value Without Compromise
Cott & Ralcorp Leaders Perrigo &
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TreeHouse Foods DNA
Brand Innovation
CustomerMarketing
Lowest Cost
Fast Follower
NBE Quality
Product
Brand
Service
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Elements of THS Strategy
Our strategic construct is rooted in six fundamental tenets:• Customer brands and custom products provide an unparalleled opportunity for sustained
growth across the North American food and beverage industry.
• Our Go-To-Market scheme is based upon a portfolio strategy of categories,customers and channels designed to generate economic scale, customer preference
and financial premium.• It is our business system of partnership with strategic customers that brands THS as
offering “value without compromise,” thereby creating and sustaining our competitive
advantage.
• Economic advantage in private label, unlike brands that rely upon a few large scale, marketwide elements, must be derived from a multitude of small scale, category and customerdifferentials in product, pricing, cost and service.
• Our financial imperative is to optimize long term shareholder value on a risk adjusted basis,subject to fulfilling our obligations to others in the greater TreeHouse community.
• Given that acquisitions fuel our growth, our culture must foster a collaborative ethic ofexcellence across all functions, egalitarianism across all legacy predecessors and
organizational unity across diverse businesses.16
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THS Portfolio Strategy: 2005
Categories
P r o f i t a b i l i t y
Growth
• Product Based
• Baby Boomers
• Supermarkets
• NBE
• Lowest Cost
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0%
5%
10%
15%
20%
25%
30%
35%
0
5,000
10,000
15,000
20,000
25,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014*
Private Label Share of New Products in US Food & Drink
Number of New Products Private Label % of New Products
Growth Thru Innovation
TreeHouse Era
Source: Mintel GNPD, as of August 2014*2014 Year to date figure annualized
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THS Portfolio Strategy: 2010
Customers
P r i v
a t e L a b e l S t r a
t e g y
Collaboration
• Service Based
• Frugal Consumers
• Alternate Channels
• Tiered Offerings
• Cost To Serve
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Growth Thru Customer Alignment
=$1Bn in PL Sales
-3%
-2%
-1%
0%
1%
2%
3%
4%
-11% -9% -7% -5% -3% -1% 1% 3% 5% 7% 9% 11%
P e r c e n t
C h a n g e i n A v e r a g e P r i c e v s . Y A
Percent Change in Units vs. YA
Private Label Food & Beverage Trends by Retailer
Source: IRI Market Advantage, Last 52 weeks ending 10/26/2014; “Food & Beverage” refers to the aggregation of the General Food and Beverage Departments
Min Max
Units -10.0% +9.8%
Price -2.5% +3.2%
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THS Portfolio Strategy: 2015
Consumers
V a l u e s & L i f e s t y l e
Demographics
• Destination Brand Based
• Millennials
• Store Perimeter
• B4U + Relevance
• Store Brand Premium
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Growth Thru Acquisitions
Source: Euromonitor
Packaged Food &Drinks, 31%
UHT Soup, 66%
Nuts, 124%
0%
20%
40%
60%
80%
100%
120%
140%
2009 2010 2011 2012 2013 2014F 2015F 2016F 2017F 2018F
P e r c e n t
C h a n g e i n U
. S . D
o l l a r S a
l e s
Category Growth Trends
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THS Portfolio Strategy: 2020
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The THS Brand: Growth Thru Change
$0
$100
$200
$300
$400
2010 2011 2012 2013 2014Fcst
2015Plan
2016Plan
N e t S a l e s i n M i l l i o n s
Single Serve BeverageGrowth & Plans
Actual Original Plan Revised Plan24
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Salad DressingsMexican & OtherSauces
Jams
Dry Dinners
Aseptic & Other
Soup
Pickles
BeverageEnhancers
Cereals
Healthy Snacks
Beverages
Protenergy
A Decade of Change
60%Value
40%Growth
Pickles
NDC
Other
THS 2005 Portfolio$700M Net Sales
100%Value
THS Portfolio 2014 Pro Forma$3.5Bn Net Sales
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A Decade of Growth
$5Bn+
$500
$1,000 $1,500
$2,000
$2,500
$3,000 $3,500
$4,000
$4,500
$5,000 $5,500
Jun-05 Apr-06 Feb-07 Dec-07 Nov-08 Sep-09 Jul-10 Jun-11 Apr-12 Feb-13 Dec-13 Nov-14
T E V ( $ i n M i l l i o n s )
THS Total Enterprise Value
Note: Total Enterprise Value = Market Capitalization + Interest Bearing Debt + Preferred Stock – Excess CashSource: CapitalIQ and internal data 26
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The Branding of Private Label
Making THS the Home of Customer Brands
• Growth
• Simplification
• Vision-Mission-Values
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Growing Strong, Standing Tall
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Building The TreeHouse BrandThrough Customer Intimacy
Chris Sliva
Executive Vice President, TreeHouse Foods &
President, Bay Valley Foods
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Value Disciplines
Value Disciplines
Customer Intimacy
Product Leadership Operational Excellence
30
http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=ZZ7UKWO29lIlUM&tbnid=Flp61hOT67GVrM:&ved=0CAUQjRw&url=http://bostinno.streetwise.co/2013/01/13/confirmed-apple-has-2-employees-in-the-cic-but-wont-tell-anyone-what-theyre-up-to-yet/apple-logo-2/&ei=ZV-BUu3oFsHD2QXk9oCwBA&bvm=bv.56146854,d.b2I&psig=AFQjCNHCIdVvUSbRCtPOoF1LDPg2q4xFZQ&ust=1384296654173004
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BVF Business ModelFocuses on Customer Intimacy
Customer Intimacy EfficientDistribution
Marketing
Insights, ProductDevelopment,Category
Management
Quality, Food Safety,Service
Broadening ProductPortfolio
GrowingCentralized and
Customer-Focused
Capabilities
StrategicCustomers
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Strategic CustomersGarner the Most BVF Resources
TacticalCollaboration
StrategicPartner
CommoditySupplier
StrategicSupplier
GROWTH
LOW HIGH
L O W
H I G H
V O L U M E
CustomizedServices
Product Differentiation
Operational Efficiency
CUSTOMERS
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SKU Productivity isDeclining in the Food Industry
100102.4
96.2
91.1
87.586.4
75
80
85
90
95
100
105
2009 2010 2011 2012 2013 2014
V e l o c i t y / S K
U
(
I n d e x v s B a s e l i n e )
TUS–
Multi-Outlet General Food and Beverage, Source: IRI
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Focus on Top Customer Growth and SimplificationAre Yielding Improved SKU Productivity
90
95
100
105
110
115
120
Q213 Q313 Q413 Q114 Q214 Q314
100
107
114113 113
118
Velocity PerSKU Produced
I n d e x v s B a s e l
i n e
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TreeHouse Drives DisproportionatePrivate Label Growth
Source: IRI General Food & Beverage last 52 weeks, ending 10/26/14
4.96%
36.63%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
THS Net Sales Share THS YOY Share of Growth
S h a r e o f P r i v a t e L a b e l S a l e s
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The TreeHouse Brand
Values Enhancing our customers’ brandsthrough focus on their priorities
Simplification Driving product brand andcategory productivity
Growth Delivering 7x fair share growthrates in private label
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Growing Strong, Standing Tall
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Following The Private LabelConsumer
Rachel Bishop
Senior Vice President, Chief Strategy Officer
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Slow Recovery in Consumer Sector
-4%
-2%
0%
2%
4%
6%
Q 1 ' 0 0
Q 3 ' 0 0
Q 1 ' 0 1
Q 3 ' 0 1
Q 1 ' 0 2
Q 3 ' 0 2
Q 1 ' 0 3
Q 3 ' 0 3
Q 1 ' 0 4
Q 3 ' 0 4
Q 1 ' 0 5
Q 3 ' 0 5
Q 1 ' 0 6
Q 3 ' 0 6
Q 1 ' 0 7
Q 3 ' 0 7
Q 1 ' 0 8
Q 3 ' 0 8
Q 1 ' 0 9
Q 3 ' 0 9
Q 1 ' 1 0
Q 3 ' 1 0
Q 1 ' 1 1
Q 3 ' 1 1
Q 1 ' 1 2
Q 3 ' 1 2
Q 1 ' 1 3
Q 3 ' 1 3
Q 1 ' 1 4
Q 3 ' 1 4
Real US Personal Consumption Expenditures
Total Personal Expenditures Expenditures on Food at Home
Source: Bureau of Economic Analysis; Seasonally adjusted39
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Confidence Slowly Returns
Source: US Bureau of Labor Statistics; Survey Research Center: University of Michigan; Index March 1996 = 100
40
50
60
70
80
90
100
110
120
6%
8%
10%
12%
14%
16%
18%
Jan '00 Jan '01 Jan '02 Jan '03 Jan '04 Jan '05 Jan '06 Jan '07 Jan '08 Jan '09 Jan '10 Jan '11 Jan '12 Jan '13 Jan '14
C on s um er S en t i m en t U
n e m p l o y m e n t R a t e s
Unemployment and Consumer Sentiment
Unemployed & Underemployed Consumer Sentiment
40
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Generational Shift In Progress
Source: IRI, CSIA, Total U.S. – Multi Outlet, last 52 weeks ending 6/15/2014
Millenials
21.9%
Gen X
22.7%Boomers42.5%
Greatest
Generation
12.9%
$710+ Bn
Current Grocery Spend by Generation
Source: U.S. Census Bureau, includes only individuals aged 18 and older
Shifts in U.S. Population by Generation
0%
5%
10%
15%
20%
25%
30%
35%
40%
% o
f U . S . P
o p u l a t i o n ( 1 8 y e a r s o f a g
e + )
Millennials
Gen X
Boomers
Greatest
Generation
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The New Definition of Premium
Premium ≠ Branded
Source: IRI, “Premium Products Primed to Perform”, July 2014; IRI MarketPulse Survey Q2, 2014
15% of consumers report thatthey will increase usage of
premium brands in the next 12months 25%
64%
89%
Higher inPrice
Makes LifeMore
Convenient
QualityIngredients
Consumers Define Premium
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Retailers Respond
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TreeHouse Is Well Positioned
Soup &
Gravy
Dry
Dinners
Dressings Hot Cereal Beverages Snacks
BFY
Premium
NBE
OPP
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Practical Innovation
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Practical Innovation
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Practical Innovation
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A Private Label Thanksgiving
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Growing Strong, Standing Tall
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Winning in Single Serve
Harry OverlyChief Customer Officer
Bay Valley Foods
50
Sustainable Growth in Single Serve
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Sustainable Growth in Single ServeBeverages
ExistingCustomers
New Customers
TechnologyImplementation
Usage Occasions
51
Single Serve Coffee Driving
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Single Serve Coffee DrivingCategory Growth
IRI Market Advantage, Total US MULO, Latest 52 weeks ending Oct 26, 2014 52
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Driving Growth Through Variety
Source: IRI Market Advantage | Single Cup Beverage | Latest 13 Week Pd Ending 09-28-14
16
12 11 11 13
2
1 1 2
41 1
1
11
2
2
Wegmans A B C D
Customer Brand Items Per SegmentCOFFEE CAPPUCCINO HOT COCOA CIDER TEA
1
6
58% 42% 23% 39% 31%
CustomerBrand Share
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Specialty Beverages Continue to Grow
• #2 of ALL Single Serve itemsTop 20
Retailer
• #7 of ALL Single Serve#13 of ALL Grocery
Top OnlineRetailer
• #5 of ALL Single Serve ItemsTop 5
Retailer
• #7 of ALL Single Serve Items• #1 Private Label SS item
Top 5Retailer
• #1 Private Label SS itemTop 5
Retailer
Source: IRI Market Advantage, Single Cup CAPPUCCINOS, Total US - Multi Outlet, Latest 52 Week Pd ending 09-28-14
French Vanilla Cappuccino Delivers+37% Growth!
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TreeHouse Continues to Lead
IRI Market Advantage, Latest 52 w/e 3.30.14 Customers Win with TreeHouse
TreeHouse partnered with key retailers to establish strongest Private Label shares sinceprogram inception
32.0
37.2
6.8
5.0
9.9
Regional Grocer D
Regional Grocer C
Regional Grocer B
Regional Grocer A
US MULO
Private Label Single Cup Coffee: Unit Share
Brand Suppliers
PL Manufacturer
THS Supplied
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Solution…Delivered
Commercialize
Operational Efficiency & Quality Validation
Product & Process Design
Consumer Exploration
Replicate Taggant Technology
TreeHouse Launched the ONLY NBE Technology Solution
ON Schedule! 56
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Innovation Driving Growth
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Growing Strong, Standing Tall
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Flagstone Foods
Paul LapadatChief Executive Officer, Flagstone Foods
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Agenda
• Company History / Vision
• Category Overview
• Innovation
• Retail Partnerships
• Platform for Future Growth
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Flagstone Foods Introduction
Company History
1962 Amport Foods is the #1 private label dried fruit manufacturer and marketer in the U.S. with abroad line-up of healthy snacks and leadership position in perimeter of the store snacking.
1973 Ann’s House of Nuts was established as a family business and is now the #1 private label trail mix
manufacturer and marketer in the world with a broad line up of snack nuts and other wholesomesnacks.
2010 November 2010 Gryphon Investors acquired Ann’s House of Nuts and Amport Foods to create a
$390MM healthy snacks company focused on store brands.
2012 Announced parent company name change to Flagstone Foods in July 2012 in conjunction withrelocating its headquarters to St. Paul, MN while the company realized double-digit growth.
2014 Acquired by TreeHouse Foods on July 29 creating a new platform for growth!
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Flagstone Vision
• Broad range of high quality, “better-for-you” snack products
• Focus on store brands and control brands
• Product innovation leadership
• Value-added category management with insights and analytics
To build a large scale healthy snacks company that will be the preferred
supplier and partner of the retail trade and be distinguished by our:
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Healthy Snacking Is a Growth Sector
• Healthy snacks represents the fastest growing space in all of food, particularly in private label• Flagstone is responsible for the growth of private label outpacing brands in healthy snacks
($ in billions)
$5.5
$5.9
$6.4
$6.9$7.1
$4.0
$5.0
$6.0
$7.0
$8.0
2009 2010 2011 2012 2013
Healthy Snacks Private Label Healthy Snacks
$1.5
$1.6
$1.8
$1.9
$2.1
$1.0
$1.5
$2.0
$2.5
2009 2010 2011 2012 2013
Total Food Industry
$362$381 $390
$396
$200
$300
$400
$500
2010 2011 2012 2013
($ in billions) ($ in billions)
Note: Healthy snacks includes snack nuts, trail mix and dried fruitsSource: Nielsen 63
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Snack Nuts Trail Mix Dried Fruit Total Market
Market Size ($MM) $6,539 $986 $718 $8,243
CAGR (’11 – ‘13) 7% 8% 1% 7%
CAGR (’13 – ‘18) 7% 7% 4% 7%
Branded Share
Private Label Share
Flagstone Core Categories Overview
70%
30%
46%
54%
25%
75% 67%
33%
Flagstone participates in categories with sizable PL presence, with significant runway to gain share
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Organic Growth Through Innovation
• Track record of driving organic growth by leading with category innovation:
– Bring consumer packaged goods branded mindset and talent to Private Label
– Leverage shopper insights from variety of sources including custom research
– Rapidly develop & prototype new brands, new products, new packaging and new categories
– Best speed to market from idea to shelf
Shopperand
CustomerInsights
New ItemPrototyping
andFeedback
Customer
InnovationPipelines:
SustainableTop and
Bottom LineGrowth
New Brands New Products New Packaging New Categories
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Innovation Platforms
Unsalted Segment
VeggieSegment
Organic & Better For
You Segments
Nature’s Harvest BrandCreation
Recent Flagstone Product Innovation
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Innovation Platforms
Licensing /Co-Branding Segment
Seasoned Almond Segment
On The Go PackagingForms
Premium Snack BarSegment
Recent Flagstone Product Innovation
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Partnering with Top Retailers
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Flagstone Is a Platform for Growth
1) Flagstone competes in high growth categories Categories continuing to see robust growth in the latest 52 weeks:
Private Label Nuts +10.9%
Private Label Trail Mix +9.3%
Private Label Dried Fruit +4.4%
2) Categories are highly responsive to innovation
Lead with innovation at key retailers and increase share of shelf
Flagstone is organized internally to facilitate innovation and growth
3) Platform Company ready for acquisitions
Infrastructure already in place for add-on acquisitions
Aligned M&A strategy and actively working M&A targets
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Growing Strong, Standing Tall
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Center of Store Growth
Michael AxelrodChief Operating Officer
Bay Valley Foods
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Overall Real Growth in U.S. Grocery is Stagnant
$699 $714$740 $760
$771 $774
245 248 250 250 251 251
2009 2010 2011 2012 2013 52 w/e 4/12/14
B i l l i o
n s
Dollar Sales Unit Volume
Source: Nielsen, Total U.S. All Outlets Combined (plus Convenience), All Departments, All Brands (UPC), % Change, 52 week periods vs. year ago
Total Grocery
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Areas of Growth Exist
¹Nielsen Strategic Planner, Total U.S. – All Outlets Combined (xAOC), 52 weeks ending 12/26/2009 vs. 52 weeks ending 4/12/2014, UPC coded
• Private label has achieved 18.7% growth since 2009 to reach $112 Bn whilebrands grew only 8.3% over the same time period¹.
Private Label
• Over the course of the last 6 years, many customers have struggled, but othershave managed to deliver consistent growth above the consumer price index.
Winning Customers
• While overall growth has been limited, certain categories have been able tosucceed at the expense of others through innovation, often led by new marketentrants.
Category Innovation
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Health & Wellness Value Convenience
3 Keys to Driving Growth
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k f G h h C f h S
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Pockets of Growth in the Center of the Store
Source: IRI, Market Advantage, Total U.S. – Multi Outlet, volume growth in units, CY2011 vs. CY 2013
Milk &Creamers
CottageCheese &Sour Cream
Butter &Margarine
Rfg Dips &Condi-
ments
Bakery
FreshBread
CheeseEggs Yogurt Rfg Dough &Baked Goods
RfgDesserts Rfg Meats
Rfg Meals
Fresh
Produce
Carbon-ated SoftDrinks
NonCarbon-ated SoftDrinks
Juices
Sports &EnergyDrinks
BottledWater
DrinkMixes
RTDCoffee &
Tea
Pkg’d
Milks &Modifiers
Coffee
Tea
Baby Food
GumCandy
Condi-ments &Sauces
Jams /Jellies /Spreads
Pickles /Olives /Relishes
Dressings&
Toppings
Cookies
Crackers
BakingSupplies
Baking
Mixes
Sugar &Sweete-
ners
DessertSyrups &Toppings
Pudding &Dessert
Mixes
Shorten-ing & Oil
Cereals
BreakfastFoods
SnackNuts &Seeds
Snacks
DriedFruit
Soup &
Gravy
Pasta
EthnicFoods
CannedMeat &Seafood
CannedFruit
CannedVeget-ables
SSDinners &
Mixes
BakedBeans
Spices &Season-
ings
RfgBeverages
Dry Beans& Grains
2011-2013 CAGR
>3.0%
1.0 to 3.0%
-1.0 to 1.0%
-1.0 to -2.0%
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The Soup Opportunity
Opportunity Areas
Private Label Share
Brand Share
Source: IRI MULO latest 52 weeks ending 8/24/14; Internal Analysis
VOLUME 25% 25% 1%
(UNITS)
20%
31% 33%
75% 75% 99% 94% 80%
69% 67%
Cooking CansCTN CTN CANS CARTON
Units (MM) 502 1 37 226 295
Y/Y Growth -4.5% 14% 19% -11.0% 15.7%
Condensed Wet Soup ($1.6B, -4.5%) RTS Soup ($1.9B -1.8%) Broth $0.9B (+4.6%)
6%
Eating Cans Value Cans
-4.5% -1.8%
752 992
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Convenience Broth and RTS Soup
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1995 2000 2005 2010 2015 2020 2025 2030
60%
40%
30%
20%
10%0%
90%
50%
100%
80%70%
RTS Soup
Broth
US Retail Share of Soup Segments for Carton Packaging Format% soup segment share (units)
Source: IRI Market Advantage Unit share data for 2011-2014 (Actual); Projections from 1997-2010 based on Nielsen AOCx historical CAGR rates (Estimated); Projections from 2015-2030based upon Euromonitor growth CAGR rates (Estimated)
Convenience - Broth and RTS Soup
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Health & Wellness – PL Soup
12.3%
15.0%
16.3%15.8%
18.9%19.2%
10%
12%
14%
16%
18%
20%
CY '09 CY '10 CY '11 CY '12 CY '13 LTM '14
Private Label Organic Soup% of Total Organic Soup (Sales $)
Sources: IRI, Market Advantage, Total US – Multi Outlet, Latest 52 weeks as of 9/29/14
(1) Soup categories include all sub-categories as defined by IRI.
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BVF is Well Positioned to Win with Soup
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BVF is Well Positioned to Win with Soup
• A full line of products in all segments
• Strategic customer/channel segmentation/ targetingCategoryManagement
Innovation
OperationalExcellence
• Industry leading innovation, design, R&D, and food safety
• Agility/flexibility to support growth and innovation
• End-to-end supply chain built for lowest cost
Critical Enablers Description
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Growing Strong, Standing Tall
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2015 Working Assumptions
Dennis RiordanExecutive Vice President and Chief Financial Officer
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2015 Working Assumptions
• Highest sales growth will come from hot beverages, snacks,and new soups and broths.
• Legacy categories will continue to grow modestly, despitechallenging food industry run rates.
• Input cost changes are not expected to be significant intotal, but there will be variability in certain commodities.We will need to address the probability of wider
movements (up or down) as the year progresses.
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2015 Working Assumptions
• Recent acquisitions will have lower than average grossmargins – more than 700 bps lower than Legacy:
Year to Date Gross Margins:
Nine Months ended: 2014 2013
Total Company As Reported 20.9% 20.8%
Total Company As Adjusted 21.7% 22.0%
Legacy Acquired Total Legacy Acquired Total
Net Sales 1,672,146$ 370,442$ 2,042,588$ 1,612,021$ 21,584$ 1,633,605$
Gross Margins 385,942$ 56,585$ 442,527$ 354,820$ 3,862$ 358,682$
Gross Margin % 23.1% 15.3% 21.7% 22.0% 17.9% 22.0%
Nine Months 2014 Nine Months 2013
Above financial data is derived from previously disclosed information in filings, earnings releases and calls
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2015 Working Assumptions
• We expect to apply the synergistic and operationalexpertise of our legacy business to the new acquisitions,although due to the higher raw material content, the impactmay be less in the better-for-you snacks business.
• We still anticipate 100 bps of margin improvement fromour on-going business next year, driven by simplificationprograms and reducing low volume / low margin SKU’s
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2015 Working Assumptions
• 2015 SG&A spending:– Possible increase in IT spending to address the conversion of recent
acquisitions and continued roll out to legacy locations
– Expect SG&A leverage to very modestly increase as a percent of net sales in2015
– Stock Compensation expense will increase by about 1/3 due to earningsgrowth of the company and additional participants from acquisitions
• Interest rates will rise only slightly in 2015 due to anticipated
high-yield issuance and general market conditions• Tax rates should be a the high end of the historic average of
about 34% - 35% due to the increased mix of US income
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2015 Working Assumptions
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2015 Working Assumptions
• Shares– Share count grows each year in the last week of June due to normal
annual grants
– There is very little effect on average shares outstanding until Q3 and Q4
– With the additions of new participants from acquisitions, the new
grants will likely grow by 1/3 compared to historic growth
• Insider Selling– We are approaching the 10 year anniversary of the Company, so
insiders have to sell options due to their 10 life
– Original grants were larger than normal annual grants, so expect moresales over the next six months
– Management still retains a substantial stake in the Company
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Growing Strong Standing Tall
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Growing Strong, Standing Tall