 Goldman
Sachs Global Staples Summit
May 13, 2014
Exhibit 99.1 |
 2
This
presentation
contains
certain
forward-looking
statements
with
respect
to
the
financial
condition,
results
of
operations
and
business
of
Hillshire
Brands
and
the
combined
businesses
of
Pinnacle
and
Hillshire
Brands
and
certain
plans
and
objectives
of
Hillshire
Brands
with
respect
thereto,
including
the
expected
benefits
of
the
proposed
merger
.
These
forward-looking
statements
can
be
identified
by
the
fact
that
they
do
not
relate
only
to
historical
or
current
facts.
Forward-looking
statements
often
use
words
such
as
“anticipate”,
“target”,
“expect”,
“estimate”,
“intend”,
“plan”,
“goal”,
“believe”,
“hope”,
“aim”,
“continue”,
“will”,
“may”,
“would”,
“could”
or
“should”
or
other
words
of
similar
meaning
or
the
negative
thereof.
There
are
several
factors
which
could
cause
actual
plans
and
results
to
differ
materially
from
those
expressed
or
implied
in
forward-looking
statements.
Such
factors
include,
but
are
not
limited
to,
the
expected
closing
date
of
the
transaction;
the
possibility
that
the
expected
synergies
and
value
creation
from
the
proposed
merger
will
not
be
realized,
or
will
not
be
realized
within
the
expected
time
period;
the
risk
that
the
businesses
will
not
be
integrated
successfully;
disruption
from
the
merger
making
it
more
difficult
to
maintain
business
and
operational
relationships;
the
risk
that
unexpected
costs
will
be
incurred;
changes
in
economic
conditions,
political
conditions,
trade
protection
measures,
licensing
requirements
and
tax
matters;
the
possibility
that
the
merger
does
not
close,
including,
but
not
limited
to,
due
to
the
failure
to
satisfy
the
closing
conditions,
including
the
receipt
of
approval
of
both
Hillshire
Brands’
stockholders
and
Pinnacle
Foods’
stockholders;
and
the
risk
that
financing
for
the
transaction
may
not
be
available
on
favorable
terms.
These
forward-looking
statements
are
based
on
numerous
assumptions
and
assessments
made
by
Hillshire
Brands
in
light
of
its
experience
and
perception
of
historical
trends,
current
conditions,
business
strategies,
operating
environment,
future
developments
and
other
factors
it
believes
appropriate.
By
their
nature,
forward-looking
statements
involve
known
and
unknown
risks
and
uncertainties
because
they
relate
to
events
and
depend
on
circumstances
that
will
occur
in
the
future.
The
factors
described
in
the
context
of
such
forward-looking
statements
in
this
announcement
could
cause
Hillshire
Brands’
plans
with
respect
to
Pinnacle
Foods,
actual
results,
performance
or
achievements,
industry
results
and
developments
to
differ
materially
from
those
expressed
in
or
implied
by
such
forward-looking
statements.
Although
it
is
believed
that
the
expectations
reflected
in
such
forward-looking
statements
are
reasonable,
no
assurance
can
be
given
that
such
expectations
will
prove
to
have
been
correct
and
persons
reading
this
announcement
are
therefore
cautioned
not
to
place
undue
reliance
on
these
forward-looking
statements
which
speak
only
as
at
the
date
of
this
announcement.
Hillshire
Brands
assumes
no
obligation
to
update
the
information
contained
in
this
announcement
(whether
as
a
result
of
new
information,
future
events
or
otherwise),
except
as
required
by
applicable
law.
A
further
list
and
description
of
risks
and
uncertainties
can
be
found
in
Hillshire
Brands’
Annual
Report
on
Form
10-K
for
the
fiscal
year
ended
June
29,
2013
and
in
its
reports
on
Form
10-Q
and
Form
8-K.
Disclosure |
 3
•
Creates $7 billion company with iconic brands and leading positions
in frozen, refrigerated and grocery categories
•
Unites complementary companies focused on brand building and
innovation while maintaining lean cost structure
•
Will deliver enhanced scale, margin expansion and input cost
diversification
•
Compelling financial impact –
expect immediate accretion, significant
synergies and meaningful revenue opportunities
•
Strong combined cash flows will enable continued investment to
support growth and drive long-term shareholder returns
Key Elements of the New Hillshire
Brands |
 4
The New Hillshire Brands Portfolio
Highlights
Three >$1B Brands
One >$500M Brand
Three >$250M Brands
Three Up-and-Coming Brands
Refrigerated
Frozen
Grocery |
 5
Source: Company filings and IRI U.S. Multi-Outlet data for the 52 weeks ended
March 30, 2014 Leading Market Shares
Brand
Category
Market
Position
IRI Market Share %
Breakfast Sausage
#1
30%
Frozen Protein Breakfast
#1
54%
Smoked Sausage
#1
25%
Lunchmeat
#3
9%
Frozen Vegetables
#1
26%
Hot Dogs
#1
22%
Cake / Brownie Mixes & Frostings
#2
24%
Shelf-Stable Pickles
#1
35%
Frozen Complete Bagged Meals
#1
29%
Table Syrups
#2/#3
21%
Italian Dressing
#1
25% |
 6
New Avenues for Further Growth
Combined Scale and Co-Branding
Applying Hillshire’s Scale and Capabilities to
Pinnacle Brands
Coupling Hillshire’s Brands and Innovation
Capabilities With Pinnacle’s Scale
Frozen
Refrigerated
Center Store
Grocery |
 7
Operating Income Margin
(1)
Note:
Figures
based
on
Hillshire’s
FY’14
year
to
date
1)
Estimate
includes
three
quarters’
impact
of
$140
million
in
expected
run-rate
synergies
2)
Estimate
represents
approximate
contribution
to
FY2013
total
COGS
Stronger Margin Profile and More
Diversified Input Costs
Input
Cost
Diversification
(2)
Protein
Other |
 8
1) SG&A as % of sales is adjusted to exclude certain items for
comparability 2) Excludes MAP and distribution
(2)
(incl expected
synergies)
Lean Cost Structure
Adjusted
Core
SG&A
as
%
of
Sales
(1)
(2) |
 9
Meaningful Cost Synergies Drive Strong
Accretion
•
Estimated cost synergies of approximately $140 million by end of
Year 3
-
Primarily derived from supply chain enhancements and
consolidation of overhead expenses
•
Approximately $180 million in estimated costs to achieve synergies
•
Integration teams from both organizations ready to go; will
implement plans to achieve synergies and facilitate a smooth
integration after closing
•
Expected to be immediately accretive to EPS; 15%+ accretive in
year 3 |
 10
Capital Allocation
Invest in the
Business
Debt Reduction
Dividends
•
$0.70/share annual dividend will remain in place
•
Plan to target a payout ratio competitive with peers over time
•
Focused on de-levering to return to investment grade
Share
Repurchase
and M&A
•
Suspending current share repurchase program
•
Augment growth with opportunistic M&A
•
Overall top priority to support continued organic growth
•
Support of seamless integration of Pinnacle Foods |
 Q&A |
 12
Additional
Information
and
Where
to
Find
It
The
proposed
merger
transaction
involving
Hillshire
Brands
and
Pinnacle
Foods
will
be
submitted
to
the
respective
stockholders
of
Hillshire
Brands
and
Pinnacle
Foods
for
their
consideration.
In
connection
with
the
proposed
merger,
Hillshire
Brands
will
prepare
a
registration
statement
on
Form
S-4
that
will
include
a
joint
proxy
statement/prospectus
for
the
stockholders
of
Hillshire
Brands
and
Pinnacle
Foods
to
be
filed
with
the
Securities
and
Exchange
Commission
(the
“SEC”),
and
each
will
mail
the
joint
proxy
statement/prospectus
to
their
respective
stockholders
and
file
other
documents
regarding
the
proposed
transaction
with
the
SEC.
Hillshire
Brands
and
Pinnacle
Foods
urge
investors
and
stockholders
to
read
the
joint
proxy
statement/prospectus
when
it
becomes
available,
as
well
as
other
documents
filed
with
the
SEC,
because
they
will
contain
important
information.
Investors
and
security
holders
will
be
able
to
receive
the
registration
statement
containing
the
proxy
statement/prospectus
and
other
documents
free
of
charge
at
the
SEC’s
web
site,
http://www.sec.gov.
These
documents
can
also
be
obtained
(when
they
are
available)
free
of
charge
from
Hillshire
Brands
upon
written
request
to
the
Investor
Relations
Department,
400
South
Jefferson
Street,
Chicago,
Illinois
60607,
telephone
number
(312)
614-8100
or
from
Hillshire
Brands’
website,
http://investors.pinnaclefoods.com,
or
from
Pinnacle
Foods
upon
written
request
to
the
Investor
Relations
Department,
399
Jefferson
Road,
Parsippany,
New
Jersey,
07054,
telephone
number
(973)
434-2924,
or
from
Pinnacle
Foods’
website,
http://investors.pinnaclefoods.com.
Participants
in
Solicitation
Hillshire
Brands,
Pinnacle
Foods
and
their
respective
directors
and
executive
officers
and
other
members
of
management
and
employees
may
be
deemed
to
be
participants
in
the
solicitation
of
proxies
from
the
respective
stockholders
of
Hillshire
Brands
and
Pinnacle
Foods
in
favor
of
the
merger.
Information
regarding
the
persons
who
may,
under
the
rules
of
the
SEC,
be
deemed
participants
in
the
solicitation
of
the
respective
stockholders
of
Hillshire
Brands
and
Pinnacle
Foods
in
connection
with
the
proposed
merger
will
be
set
forth
in
the
joint
proxy
statement/prospectus
when
it
is
filed
with
the
SEC.
You
can
find
information
about
Hillshire
Brands’
executive
officers
and
directors
in
its
definitive
proxy
statement
for
its
2013
Annual
Meeting
of
Stockholders,
which
was
filed
with
the
SEC
on
September
12,
2013.
You
can
find
more
information
about
Pinnacle
Foods’
executive
officers
and
directors
in
its
definitive
proxy
statement
for
its
2014
Annual
Meeting
of
Stockholders,
which
was
filed
with
the
SEC
on
April
30,
2014.
You
can
obtain
free
copies
of
these
documents
from
Hillshire
Brands
and
Pinnacle
Foods
using
the
contact
information
above.
Non-Solicitation
This
communication
shall
not
constitute
an
offer
to
sell
or
the
solicitation
of
an
offer
to
sell
or
the
solicitation
of
an
offer
to
buy
any
securities,
nor
shall
there
be
any
sale
of
securities
in
any
jurisdiction
in
which
such
offer,
solicitation
or
sale
would
be
unlawful
prior
to
registration
or
qualification
under
the
securities
laws
of
any
such
jurisdiction.
No
offer
of
securities
shall
be
made
except
by
means
of
a
prospectus
meeting
the
requirements
of
Section
10
of
the
Securities
Act
of
1933,
as
amended.
Additional Disclosure |