Transcript
The following statements made in this presentation are “forward looking” and are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995: statements relating to (1) projected sales (including for individual segments, for specific product lines and for the company as a whole), profit margins, net income and earnings per share, (2) our growth strategy, (3) our branding initiatives (4) our integration, innovation, and research and development plans, and (5) our cost-savings initiatives. These statements involve risks and uncertainties that may cause results to differ materially from those set forth in this presentation. Financial projections are based on a number of assumptions. Actual results could be materially different than projected if those assumptions are erroneous. Sales, profit margins, net income and earnings per share can vary based on a variety of economic, governmental and competitive factors, which are identified in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K (which can be accessed on our website at www.deanfoods.com or the website of the Securities and Exchange Commission at www.sec.gov). The Company's ability to profit from its branding initiatives depends on a number of factors including consumer acceptance of the Company's products. All forward looking statements in this presentation speak only as of the date of this presentation. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in our expectations with regard thereto or any changes in the events, conditions or circumstances on which any such statement is based.
Certain non-GAAP financial measures contained in this presentation, including adjusted diluted earnings per share, free cash flow, consolidated adjusted operating income and consolidated adjusted net income, have been adjusted to eliminate the net expense or net gain related to certain items identified in our press releases. A full reconciliation of these measures calculated according to GAAP and on an adjusted basis is contained in the appendix of this presentation and in such press releases, which are publicly available on our web site at www.deanfoods.com/investors.
$495517
554
619
676
2002 2003 2004 2005 2006
$ Millions
EPS $1.02 1.25 1.48 1.83 2.12
5Yr Avg = $12.73
C1Mover
Merger Synergies
Milk Share Gains
Establishment of WhiteWave
Favorable Commodity Environment
and Dean’s Dips
Favorable Credit Environment
$4.8B Credit Facility
Extended Maturities
$15 Cash Dividend
$1.4 Billion in Share Repurchases
$12.7311.88
18.14
+53%
$21.91 Peak
Competitors Industry
+40%
~25%
~55%
2005-2007 Category Growth
23%
5 Year Average
2006 2007
$255
324
109
2005 2006 2007
$619
676
590
$14.40
11.88
18.14
2005 2006 2007
C1 Mover
$ Millions
$619
676
590631
$14.40 11.88
18.14 18.00
2005 2006 2007 2008
$255324
109
462
2005 2006 2007 2008
C1 Mover
$ Millions
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
1995 2008
Limited activity in the past
Leadership in place
Policy and process under refinement
Evaluating targeted positions
Extend OurLow Cost Position
Clear opportunity to lower cost structure
Multi-year productivity program in place
All Other 54%
Milk Cost 46%
Direct Materials
39%
Indirect Purchases
24%
People Costs 28%
Energy 6%Depreciation 3%
$5.4B $6.4B
Conversion$85
Procurement$50
Network Optimization$65
WhiteWave$50
DSD Distribution$50
$ Millions
2006 2008
MilkMilk
OtherOther
2007 2008
Other Other
People Costs
People Costs
Fuel/FreightFuel/Freight
Drive Revenue & Profit in Our Core
Large stable categoryShare opportunityWhiteWave: A unique value-added platformAdvantaged go-to-market systems
Invest for Growth
Sequence capability investments
High return projects
Acquisition pipeline
WhiteWave – 2004
Procurement – 2006
Finance – 2006
Human Resources – 2007
Strategy – 2008
DSD Distribution – 2008
Supply Chain
R&D
DSD Marketing & Selling
Innovation
Hero JV
Standard Process and Training
Information Systems
– DSD Dairy
– Morningstar
DSD Front Line Selling Capability
New Growth Platforms
*includes nominal amount of corporate capital spending
146 166 152
230
77 58 83
4014 17
2230
2006 2007 2008 2009 2010+
Morningstar
257
~300
241$237
300+
WhiteWave
DSD Dairy
$ Millions
Commodity volatility and financial crisis have stressed industry playersPipeline more robust than two years agoLargely tuck-in dairy acquisitions
2009 Examples:Supply ChainR&DInnovationStandard Process/TrainingHero JV
2007 2008 2009
$1.20
$1.30
At least$1.55
+19%
5.94x
4.92x
6.25x
5.75x
5.00x 4.50x 4.50x
2007 2008 2009 2010 2011
* As defined by Credit Agreements
Continued focus on reducing overall leverage levels
Re-align our balance sheet to diversify our capital sources over time
Maintain flexibility to fund high-return projects and strategic acquisitions
*Estimate: JP Morgan
Bank Debt
Public Bonds
Receivables Facility
71%
18%
11%
3.0
1.8InstitutionalInvestors
TraditionalBanks
$4.8B
$2.0-2.5B
2009 2010 2011 2012 2013 2014 2015 2016 2017
Public Bonds
Bank Debt
500
281
1,692
862
243150
$ Millions
2009-2011 Maturities = $1.4 billion
Unused Revolving Facilities ~ $1.5 billion + free cash flow
$315
January results and updated Q1 forecast indicate a strong start to 2009
Increase Q1 EPS guidance to ‘at least $0.41’
Increase FY2009 EPS guidance to ‘at least $1.55’
Well positioned to sustain double-digit EPS growth– $300 million of productivity improvements identified– Continued WhiteWave growth– Conservative volume growth assumptions across balance of portfolio– Acquisitions a potential upside
Strong cash flows support continued deleveraging and targeted reinvestment in the business
Realign balance sheet over time– Consistent with reality in credit markets– Maintain flexibility to reinvest in growth
top related