Campbell's cagny 2015

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Denise MorrisonPresident & Chief Executive OfficerCampbell Soup Company

2015CAGNY Presentation

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CHANGES UNDERWAY

Far reaching implications

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Shift our center of gravity

Create value for shareholders by driving sustainable, profitable net sales growth

DUAL MANDATE

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TRENDS AND DYNAMICS IN FOOD

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Redefining the framework of our relationships with our customers and consumers

SEISMIC SOCIAL SHIFTS

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REVOLUTIONARY CHANGES IN THE DEFINITION AND COMPOSITION OF THE FAMILY

Increasing diversity, new economic realities and powerful social transformations

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CONSUMER PREFERENCES AND PRIORITIES WITH RESPECT TO FOOD

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IMPACT OF DIGITAL TECHNOLOGIES AND E-COMMERCE

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Middle class expanding in developing markets

GLOBAL ECONOMIC REALIGNMENT

ASIA

USA+ EU

2BPEOPLETODAY

ALLOTHER

ASIAUSA+ EU

4.9BPEOPLEIN 2030

ALLOTHER

Source: Mario Pezzini, “An emerging middle class” OECD Observer, 2012.

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IMPORTANT STEPS TAKEN TO DIVERSIFY OUR PORTFOLIOAcquisitions contributing more than $1 billion in sales

August 6, 2012 June 13, 2013 August 8, 2013

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Clear portfolio rolesImproved product qualityBreakthrough innovation

IMPROVED COMPETITIVENESSACROSS MUCH OF OUR CORE PORTFOLIO

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Closed 5 manufacturingfacilitiesReduced costs by

IMPROVEMENT IN COST STRUCTURE

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Valuable Steps Taken

Announced closure of Marshall, MI plant

Announced exit of operations in Russia

Sold Campbell seed business and Davis, CA facility

Announced closure of South Plainfield, NJ plant

Partnership agreement with La Costena and Jumex; announced closing of Mexico plant

Acquired Plum Organics

Acquired Bolthouse Farms

Announced closure of Aiken, SC plant

Acquired Kelsen Group

Articulated new company Purpose and Growth Agenda

Sold European simple meals business

Announced closure of Sacramento plant

June 28, 2011

August 6, 2012

September 27, 2012

June 13, 2013April, 2014

October 28, 2013

August 8, 2013

June 27, 2013February 14, 2013

September 19, 2012

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Fundamental Changes Needed• How our business is organized

and managed• How we deploy resources

and assets• How we communicate and

connect with consumers

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A game-changing development in Campbell’s evolution

HOW OUR BUSINESS IS ORGANIZED AND MANAGED

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Organized and managed for moderate growth and higher profit

AMERICAS SIMPLE MEALS AND BEVERAGES ~ $4.5 Billion in Sales FY14

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AMERICAS SIMPLE MEALS AND BEVERAGES

Define more moderate goals for growth

Expand margins

Manage costs

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Focus on scale innovationplatformsExpand points of distribution and presence in growth channels


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Smarter approach to engagement and execution with customers

Reduce cost and complexity

in our supply chain

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Pivotal change in our structure

GLOBAL BISCUITS AND SNACKS~ $2.8 Billion in Sales FY14

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Unlock potentialLeverage portfolio scale

GLOBAL BISCUITS AND SNACKS

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Global Biscuits and Snacks

Core Markets with sizable presence

Export Markets

Core Markets with manufacturing presence

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PACKAGED FRESH

~ $1 Billion in Sales FY14

CONTINUE TO DELIVER ROBUST SALES PERFORMANCE IN BOLTHOUSE FARMS

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Super-premium cold pressed beverages

PACKAGED FRESH

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Building scale in the perimeter beyond produce

PACKAGED FRESHA FASTER-GROWING $18.6 BILLION CATEGORY

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New Business Divisions Organized by Category Americas

Simple Mealsand Beverages

Global Biscuitsand Snacks

PackagedFresh

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New Business Divisions Organized by Category

Mark AlexanderPresident

Americas Simple Meals and Beverages

Luca MigniniPresident


Jeff DunnPresident

Packaged Fresh

AmericasSimple Meals

and BeveragesGlobal Biscuits

and SnacksPackaged

Fresh

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Unlock the potential of our assets Align spending with critical growth opportunities

HOW WE DEPLOYOUR RESOURCES AND ASSETS

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Clean sheet of paper

Unlock funds for growth

REEXAMINING OUR COSTS

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UNLOCK THE POWER OF OUR HUMAN RESOURCES & ASSETS

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CONNECT WITHCONSUMERS

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GAME CHANGINGDEVELOPMENTS FOR CAMPBELL

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CAMPBELL IS ON THE CUSP OF SOME MAJOR TRANSITIONS

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Anthony DiSilvestroSenior Vice President – Chief Financial OfficerCampbell Soup Company

2015CAGNY Presentation

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• Fiscal 2015 guidance

• Enabling our strategies– Three new divisions– Cost-reduction program

• Priorities for uses of cash

Agenda

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Fiscal 2015 Guidance

* See non-GAAP reconciliation

2014 Base*(52 weeks)

Previous 2015 Growth Rates

Revised 2015 Growth Rates

Currency Headwinds

Net Sales $8,139 0% to +2% -1% to +1% -2 pts

Adjusted EBIT* $1,244 -1% to +2% -7% to -5% -2 pts

Adjusted EPS* $2.45 -1% to +2%$2.42-$2.50

-5% to -3%$2.32-$2.38

-2 pts -$0.05

Continuing Operations(U.S. $ millions, except per share)

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Three New Divisions

55%34%

11%

F’14 Net Sales

70%

25%

5%

F’14 Operating Earnings*

*Excludes unallocated corporate expenses, items impactingcomparability and based on historical expense allocations; see non-GAAP reconciliation

Americas Simple Meals and Beverages


Packaged Fresh

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Americas Simple Meals & Beverages

Global Biscuits & Snacks

Packaged Fresh

Leading Brands Across All Divisions

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Americas Simple Meals & Beverages

Global Biscuits & Snacks

Packaged Fresh

Three New Divisions – Portfolio Roles

• Moderate growth, consistent with categories• Margin expansion

• Accelerate sales growth • Expand into new categories

• Invest to grow in existing markets• Expand internationally

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Re-examining Our Cost Structure

6.9 4.6

2.3

TotalCost*

DirectProduct & Other**

AddressableSpend

• Analyzed $2.3 billion spend across P&L

• Completed benchmarking versus “Best-in-Class”

• Identified $200 million+ annual cost opportunity

• Adopting “Zero-Based Budgeting” methodology

*52-week sales base less adjusted EBIT base; see non-GAAP reconciliation**Primarily direct labor, ingredients, packaging and depreciation

U.S. $ billions

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Headcount Costs – Organization Redesign

Strategy• Simplify organization

structure

• Implement integrated global services

• Simplify and standardize end-to-end processes

• Too many layers

• Sub-optimal spans of control

• Not leveraging common processes across business units

Situation Assessment

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Non-Headcount Cost Reduction

Strategy• Target savings for each

category

• Adopt ZBB approach for fiscal 2016 budgeting process

• Develop plans to address complex cost categories over time

• Reviewed cost categories – Simple categories – Complex categories

• Completed benchmarking and identified areas of opportunity

Situation Assessment

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Headcount Non-Headcount Total

Adopting Zero-Based Budgeting Methodology

• Organization redesign to deliver new strategy

• Expense reduction across multiple categories

• $200MM+ annual savings target over next 3 years– 2 - 3% of annual sales

• Funding for growth and margin expansion

Cost Savings OpportunityU.S. $ million

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Strong Operating Cash Flows

0

250

500

750

1,000

1,250

FY10 FY11 FY12 FY13 FY14 FY15 est

Cash from Operations

Interest Coverage13 times*

Net Debt/EBITDA2.4 times*

Credit RatingsA3/BBB+

U.S. $ Millions

*See non-GAAP reconciliation

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Priorities for Uses of Cash

1 Capital Expenditures

2 Dividends

3 External Development

4 Share Repurchases

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-400

0

400

800

1,200

1,600

2,000

2,400

2,800

FY10 FY11 FY12 FY13 FY14 FY15 est

Cash Allocation History(U

.S. $

mill

ions

)

Capital Expenditures DividendsFY10-FY14 Total:

Ext Dev* Share Repurchases

*FY14 external development activity includes proceeds from European divestiture

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• Increased Capacity– Bolthouse beverage &

salad dressing– Goldfish crackers– Indonesia biscuits– Aseptic broth

• Cost Savings– Soup common platform– Australia automation project

Investing Capital for Capacity and Productivity

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Maintaining a Competitive Dividend

$-

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14

Dividends Paid Payout Ratio ~ 50%

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> $1 Billion in Annual Sales+1 point of Organic Sales Growth

External Development Accelerating Growth

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• Guided by our “Dual Mandate”• Understand the trends and dynamics in the food industry• New enterprise structure to align our businesses with our

growth strategies• Adopting zero-based budgeting methodology to capture

$200+ million annual savings opportunity• Our goal is to improve our growth profile and create value

for our shareholders

Wrap-up

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Forward-looking StatementsThis presentation contains “forward-looking statements.” Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “believes,” “estimates,” “expects” and similar references to future periods. Examples of forward-looking statements include, but are not limited to, statements we make on guidance for 2015, on our cost-saving initiatives, on our new enterprise and management structure, on our ability to execute our new business strategies successfully, and on our expectations that we can accelerate innovation across our portfolio, integrate acquisitions and expand our international footprint. Forward-looking statements are based on our current expectations and assumptions regarding our business, our industry and other future conditions. Forward-looking statements are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements due to factors such as our ability to manage organizational change effectively; our ability to realize projected benefits and cost savings from the new structure and our cost-saving initiatives; the impact of strong competitive responses to our marketing strategies; risks associated with trade and consumer acceptance of our new and improved products; the effectiveness of our promotional programs; the impact of portfolio changes, and the other factors described in “Risk Factors” in the company’s most recent Form 10-K and in subsequent SEC filings. We undertake no obligation to update these statements to reflect new information or future events.

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Non-GAAP Measures

This presentation includes certain “non-GAAP” measures as defined by SEC rules. We have provided a reconciliation of those measures to the most directly comparable GAAP measures, which is posted on our investor Web site, which can be found at investor.campbellsoupcompany.com.

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Appendix

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Reconciliation of GAAP and Non-GAAP Financial Measures

($ millions, except per share)

Fiscal YearDiluted

Net Sales EBIT EPS*

2014 - As Reported 8,268$ 1,192$ 2.33$

Add: Restructuring charges and related costs - 58 0.11

Add: Pension settlement charges - 22 0.04

Add: Loss on foreign exchange forward contracts - 9 0.02

Add: Tax expense associated with sale of business - - 0.02

2014 - Adjusted 8,268$ 1,281$ 2.53$

Deduct: Impact of 53rd week (129) (37) (0.08)

Adjusted 2014 base 8,139$ 1,244$ 2.45$

*May not add due to rounding

Continuing Operations

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Fiscal Year Operating Earnings2014

EBIT - As Reported 1,192$

Add: Unallocated corporate expenses 149

Add: Restructuring Charges 55

Operating Earnings 1,396$

($ millions)Continuing Operations

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($ millions)Continuing Operations

Total CostAdjusted 201452-week base

Adjusted Net Sales base 8,139$

Deduct: Adjusted EBIT base (1,244)

Total Cost 6,895$

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($ millions)Fiscal Year Ended

Adjusted Interest Coverage August 3, 2014

Adjusted EBIT 1,281$

As Reported Depreciation and Amoritization 305

Adjusted EBITDA 1,586$

Interest, Net 119$ Adjusted Interest Coverage 13

Continuing Operations

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($ millions)


Net Debt to Adjusted EBITDAAugust 3, 2014

Short-Term Borrowings 1,771$

Long-Term Debt 2,244

Total Debt 4,015$

Less: Cash and Cash Equivalents (232)

Net Debt 3,783$

Adjusted EBITDA 1,586$

Net Debt to Adjusted EBITDA 2.4

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