425 1 l92863ae425.txt J.M. SMUCKER CO./PROCTER & GAMBLE CO. 425 Filed by The J. M. Smucker Company Commission File No. 333-73830 Subject Company: The Procter & Gamble Company Pursuant to Rule 425 under the Securities Act of 1933 This document is being filed pursuant to Rule 425 under the Securities Act of 1933 and is deemed filed pursuant to Rule 14a-12 under the Securities Exchange Act of 1934. [SMUCKER'S LOGO] [SMUCKER'S LOGO] [JIF LOGO] THE J. M. SMUCKER COMPANY FORWARD LOOKING INFORMATION THIS PRESENTATION CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS THAT ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY. THESE INCLUDE STATEMENTS REGARDING ESTIMATES OF FUTURE EARNINGS AND CASH FLOWS AND EXPECTATIONS AS TO THE CLOSING OF THE TRANSACTION. OTHER UNCERTAINTIES INCLUDE, BUT ARE NOT LIMITED TO, GENERAL ECONOMIC CONDITIONS WITHIN THE U.S., STRENGTH OF COMMODITY MARKETS FROM WHICH RAW MATERIALS ARE PROCURED AND THE RELATED IMPACT ON COSTS, ABILITY TO OBTAIN REGULATORY AND SHAREHOLDERS' APPROVAL, INCLUDING WITHOUT LIMITATION A PRIVATE LETTER RULING FROM THE INTERNAL REVENUE SERVICE, INTEGRATION OF THE ACQUIRED BUSINESSES IN A TIMELY AND COST EFFECTIVE MANNER, AND OTHER FACTORS AFFECTING SHARE PRICES AND CAPITAL MARKETS GENERALLY. OTHER RISKS AND UNCERTAINTIES THAT MAY MATERIALLY AFFECT THE COMPANY ARE DETAILED FROM TIME TO TIME IN REPORTS FILED BY THE COMPANY WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING FORMS 10-Q AND 10-K. [CRISCO LOGO] [SMUCKER'S LOGO] 2 [SMUCKER'S LOGO] [JIF LOGO] DISCLOSURE THE COMPANY HAS FILED A PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS CONCERNING THE PROPOSED MERGER OF THE JIF AND CRISCO BUSINESSES WITH AND INTO THE COMPANY WITH THE SEC. INVESTORS ARE URGED TO READ THE PROXY STATEMENT/ PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC BECAUSE THEY CONTAIN IMPORTANT INFORMATION ON THE PROPOSED MERGER. INVESTORS ARE ABLE TO OBTAIN THE DOCUMENTS FREE OF CHARGE AT THE SEC'S WEB SITE (WWW.SEC.GOV). IN ADDITION, DOCUMENTS FILED WITH THE SEC BY THE COMPANY WITH RESPECT TO THE PROPOSED TRANSACTION MAY BE OBTAINED FREE OF CHARGE BY CONTACTING THE J. M. SMUCKER COMPANY, STRAWBERRY LANE, ORRVILLE, OHIO, 44667, ATTENTION: INVESTOR RELATIONS OR BY TELEPHONE AT (330) 682-3000. THE COMPANY AND ITS DIRECTORS AND EXECUTIVE OFFICERS MAY BE DEEMED TO BE PARTICIPANTS IN THE SOLICITATION OF PROXIES FROM THE COMPANY'S SHAREHOLDERS. A LIST OF THE RESUMES OF THOSE DIRECTORS AND EXECUTIVE OFFICERS AND DESCRIPTIONS OF THEIR INTEREST IN THE COMPANY IS CONTAINED IN THE COMPANY'S PROXY STATEMENT DATED JULY 10, 2001, WHICH IS FILED WITH THE SEC. THE COMPANY'S SHAREHOLDERS MAY OBTAIN ADDITIONAL INFORMATION ABOUT THE INTERESTS OF DIRECTORS AND EXECUTIVE OFFICERS IN THE PROPOSED MERGER BY READING THE PROXY STATEMENT PROSPECTUS. INVESTORS SHOULD READ THE PROXY STATEMENT/PROSPECTUS CAREFULLY BEFORE MAKING ANY VOTING OR INVESTMENT DECISION. [CRISCO LOGO] [SMUCKER'S LOGO] 3 THE J.M. SMUCKER COMPANY [JIF, SMUCKER'S, AND CRISCO PHOTO] [SMUCKER'S LOGO] [JIF LOGO] THE "NEW" J. M. SMUCKER COMPANY [JIF LOGO] [SMUCKER'S LOGO] [CRISCO LOGO] - Three #1 American Icon Food Brands - Highly Accretive Transaction - Strong Cash Flow and Balance Sheet - Platform for Future Growth [CRISCO LOGO] [SMUCKER'S LOGO] 5 [SMUCKER'S LOGO] [JIF LOGO] SMUCKER'S, JIF AND CRISCO -- A POWERFUL COMBINATION -- - #1 American icon brands - Strategic fit - Complements broker network - Similar customers and consumers - #1 market position - Profitable, "center of store" [CRISCO LOGO] [SMUCKER'S LOGO] 6 [SMUCKER'S LOGO] [JIF LOGO] [JIF, SMUCKER'S, AND CRISCO PICTURE] [CRISCO LOGO] [SMUCKER'S LOGO] [SMUCKER'S LOGO] [JIF LOGO] [SMUCKER'S PICTURE] [SMUCKER'S PICTURE] [SMUCKER'S PICTURE] [R.W. KNUDSEN PICTURE] [CRISCO LOGO] [SMUCKER'S LOGO] 8 [SMUCKER'S LOGO] [JIF LOGO] SMUCKER BRAND LEADERSHIP [BAR GRAPH]
Size of % Dollar Share Category of Category ------------ -------------- FRUIT SPREADS $747 million Smucker's Brand 41.0% Next Brand 11.2% NATURAL PEANUT BUTTER $51 million Smucker's Brand 70.6% Next Brand 15.1% ICE CREAM TOPPINGS $106 million Smucker's Brand 61.5% Next Brand 23.8% NATURAL BEVERAGES $100 million R.W. Knudsen Brand 52.8% Next Brand 16.7%
Source IRI - 52-week ending December 2001 and SPINS ending November 2001 [CRISCO LOGO] [SMUCKER'S LOGO] 9 [SMUCKER'S LOGO] [JIF LOGO] THE "NEW" SMUCKER BRAND LEADERSHIP [BAR GRAPH]
Size of % Dollar Share Category of Category ------------ -------------- PEANUT BUTTER $860 million Jif Brand 33.1% Next Brand 22.2% COOKING OILS $900 million Crisco Brand 24.0% Next Brand 19.2% SHORTENING $200 million Crisco Brand 64.1% Next Brand 3.5%
Source IRI - 52-week ending May 2001 [CRISCO LOGO] [SMUCKER'S LOGO] 10 [SMUCKER'S LOGO] [JIF LOGO] OPPORTUNITIES FOR GROWTH [BAR GRAPH]
Current Smucker "New" Smucker Categories Categories $ in Billions $1.0 Billion $3.0 Billion
[CRISCO LOGO] [SMUCKER'S LOGO] 11 [SMUCKER'S LOGO] [JIF LOGO] NET SALES BY PRODUCT CATEGORY BEFORE (SALES: $650 MILLION) [PIE CHART]
Fruit Peanut Spreads Other Snacks Formulated Beverage Butter Toppings/Syrups ------- ----- ------ ---------- -------- ------ --------------- 47% 7% 5% 15% 10% 7% 9%
AFTER (SALES: $1.3 BILLION) [PIE CHART]
Fruit Peanut Spreads Shortening/Oil Other Snacks Formulated Beverage Butter Toppings/Syrups ------- -------------- ----- ------ ---------- -------- ------ --------------- 26% 26% 4% 2% 6% 5% 27% 4%
[CRISCO LOGO] [SMUCKER'S LOGO] 12 [SMUCKER'S LOGO] [JIF LOGO] BRANDED RETAIL SALES*
% OF COMPANY'S U.S. RETAIL SALES #1 BRANDS Smucker 97% Kraft 80% General Mills 70% Campbell 60% Quaker Oats 51% H.J. Heinz 41% Kellogg 32% ConAgra 21%
[CRISCO LOGO] [SMUCKER'S LOGO] * Lehman Brothers (Smucker Added) 13 [SMUCKER'S LOGO] [JIF LOGO] SMUCKER LEADERSHIP GROWTH 25-YEAR HISTORICAL TREND [BAR GRAPH]
1977 2002 % SOM 20.0% 41.0%
[CRISCO LOGO] [SMUCKER'S LOGO] SOURCE: IRI NIELSEN 14 [SMUCKER'S LOGO] [JIF LOGO] ENHANCED SHAREHOLDER VALUE [CRISCO LOGO] [SMUCKER'S LOGO] [SMUCKER'S LOGO] [JIF LOGO] FINANCIAL PERFORMANCE
Actual Estimated Projected Standalone Standalone Combined FYE 4/30 FYE 4/30 FYE 4/30 ($ in Millions) 2001(1) 2002 2003(2) --------------- ------- ---- ------- Revenues $ 651 $ 675 $1,355 EBITDA $ 83 $ 92 $ 210 - $ 225 EBITDA Margin 13% 14% 15% - 17% Net Income $ 33 $ 32 - $ 33 $ 95 - $ 105 E.P.S. $ 1.30 $ 1.33 - $1.37 $ 1.90 - $ 2.10
(1) Excludes nonrecurring charges and changes in accounting method (2) Assumes that FY 2003 represents first full year of integration [CRISCO LOGO] [SMUCKER'S LOGO] 16 [SMUCKER'S LOGO] [JIF LOGO] SMUCKER SHARE PRICE PERFORMANCE JANUARY 1, 2000 THROUGH DECEMBER 31, 2001 Date Share Price ---------- 1/3/2000 $18.12 2/1/2000 16.72 3/1/2000 14.94 4/3/2000 16.82 5/1/2000 15.12 Class A and Class B Share Combination Announced: $15.47 6/1/2000 17.65 7/3/2000 19.12 8/1/2000 17.81 Class A and Class B Share Combination Effective: $18.50 9/1/2000 19.88 10/2/2000 24.44 11/1/2000 22.38 12/1/2000 24.63 1/2/2001 26.40 2/1/2001 24.95 3/1/2001 25.95 4/2/2001 25.28 5/1/2001 25.98 6/1/2001 25.45 7/2/2001 25.99 8/1/2001 27.16 9/4/2001 28.32 10/1/2001 25.00 Jif and Crisco Merger Announced: $35.50 11/1/2001 33.99 12/3/2001 35.32 NOTE: SMUCKER'S SHARE PRICE FROM 1/1/00 THROUGH 8/28/00 REPRESENTS A WEIGHTED AVERAGE OF CLASS A AND CLASS B SHARES. [CRISCO LOGO] [SMUCKER'S LOGO] 17 [SMUCKER'S LOGO] [JIF LOGO] INCREASED SHAREHOLDER VALUE POTENTIAL FOR HIGHER MULTIPLE - Small-cap to mid-cap - Increased liquidity: 24MM - 49MM shares outstanding - Increase in share value - Greater earnings growth potential - Strong dividend practice will continue [CRISCO LOGO] [SMUCKER'S LOGO] 18 [SMUCKER'S LOGO] [JIF LOGO] ENTERPRISE VALUE/EBITDA [BAR GRAPH] Wrigley 20.4x General Mills 18.6x Tootsie Roll 16.2x HJ Heinz 15.4x Tyson Foods 13.7x Nestle 12.5x Kellogg 12.5x Hershey 12.3x Kraft 12.0x Dole Food 11.7x Campbell 11.2x Sara Lee 10.9x Conagra 10.0x Smucker 8.5x
(1) REPRESENTS PRO FORMA TOTAL VALUE OF $1.8 BILLION AND PROFORMA EBITDA (AS OF 4/30/02) OF $210 MILLION. [CRISCO LOGO] [SMUCKER'S LOGO] 19 [SMUCKER'S LOGO] [JIF LOGO] GROWTH STRATEGY
AVERAGE ANNUAL GROWTH RATE ----------- Market Share 3% New Products 1% Acquisitions 4% ---- Total 8%
[CRISCO LOGO] [SMUCKER'S LOGO] 20 [SMUCKER'S LOGO] [JIF LOGO] [PHOTO OF SMUCKER'S UNCRUSTABLES] [CRISCO LOGO] [SMUCKER'S LOGO] 21 [SMUCKER'S LOGO] [JIF LOGO] GROWTH STRATEGY - Acquisitions - Leading brand position - North American geographic emphasis - Leverage raw material synergies and plant capacity - Enabling acquisitions [CRISCO LOGO] [SMUCKER'S LOGO] 22 [SMUCKER'S LOGO] [JIF LOGO] TOTAL DEBT/EBITDA [BAR GRAPH] Tyson Foods 7.3x General Mills 6.9x Dole Foods 4.8x HJ Heinz 4.4x Kellogg 4.2x Conagra 3.5x Sara Lee 3.0x Campbell 2.9x Kraft 2.8x Hershey 1.3x Nestle 1.3x Smucker 0.6x Tootsie Roll 0.1x Wrigley 0.0x
(1) REPRESENTS PRO FORMA TOTAL DEBT OF $135 MILLION AND PROFORMA EBITDA (AS OF 4/30/02) OF $210 MILLION. [CRISCO LOGO] [SMUCKER'S LOGO] 23 [SMUCKER'S LOGO] [JIF LOGO] SUMMARY [CRISCO LOGO] [SMUCKER'S LOGO] [SMUCKER'S LOGO] [JIF LOGO] THE SMUCKER ADVANTAGE - Proven ability to grow market share - Leverage broker network - Category management - Financial strength and capabilities - Consistency of top management team/leadership [CRISCO LOGO] [SMUCKER'S LOGO] 25 [SMUCKER'S LOGO] [JIF LOGO] SMUCKER BASIC BELIEFS BASIC BELIEFS ARE AN EXPRESSION OF THE COMPANY'S VALUES AND PRINCIPLES THAT GUIDE STRATEGIC BEHAVIOR AND DIRECTION. THE BASIC BELIEFS ARE DEEPLY ROOTED IN THE PHILOSOPHY AND HERITAGE OF THE COMPANY'S FOUNDER, JEROME MONROE SMUCKER. QUALITY Quality applies to our products, our manufacturing methods, our marketing efforts, our people, and our relationships with each other. PEOPLE We will be fair with our employees and maintain an environment that encourages personal responsibility within the Company and the community. ETHICS The same, strong ethical values on which our Company was founded provide the standards by which we conduct our business as well as ourselves. GROWTH Along with day-to-day operations, we are also concerned with the potential of our Company and its employees. INDEPENDENCE We have a strong commitment to stewardship of the Smucker name and heritage. [CRISCO LOGO] [SMUCKER'S LOGO] 26 [SMUCKER'S LOGO] [JIF LOGO] THE "NEW" J. M. SMUCKER COMPANY [JIF LOGO] [SMUCKER'S LOGO] [CRISCO LOGO] - Three #1 American Icon Food Brands - Highly Accretive Transaction - Strong Cash Flow and Balance Sheet - Platform for Future Growth [CRISCO LOGO] [SMUCKER'S LOGO] 27 [SMUCKER'S LOGO] [JIF LOGO] [CRISCO LOGO]