Campbell Outlines Growth Plans for U.S. Condensed Soup Business

Comprehensive Measures Span All Aspects of Condensed Soup: Enhanced Quality, Healthier Offerings, New MarketingReiterates Fiscal 2010 Full-Year Adjusted Net EPS and EBIT Guidance, Lowers Full-Year Sales GuidanceCAMDEN, N.J., Feb 17, 2010 (BUSINESS WIRE) — Campbell Soup Company (NYSE: CPB) today announced a comprehensive
plan to boost the performance of its condensed soup portfolio in the
United States, a business that generated more than $1 billion in net
sales in fiscal 2009. Campbell plans to enhance more than 60 percent of
its condensed line with product improvements, further sodium reduction,
more contemporary packaging, improved shelving systems and new marketing
aimed at the simple meals category.

These upcoming plans for condensed soup build on Campbell’s substantial
investments in its entire U.S. Soup business over the last several
years, designed to improve the quality, convenience, variety and
wellness profile across its portfolio. As a result of these investments,
Campbell has increased net sales of U.S. soup every year since 2003.

Douglas R. Conant, Campbell’s President and CEO, said, “We are committed
to accelerating the performance of our existing portfolio, most notably
in U.S. soup, and continuing to lay the foundation for superior
long-term growth. We are going to fire up our important condensed soup
business and step up the competitive posture of our ready-to-serve
products to accelerate both our top- and bottom-line growth.”

Conant continued, “With the improvements and innovations we’ve made over
the past several years and our plans for next year, we will be able to
unleash soup’s full competitiveness against the simple meals category.
We are now in a position to reframe the way we compete in the broader
simple meals category. Our new marketing efforts will further position
soup as a key part of a healthy, well-balanced simple meal and help
consumers make more informed choices. We will build on the success of
our high-margin, market-leading condensed soup franchise–enhancing its
quality, making it healthier and increasing its relevance. We are
confident that our continued investments will make ‘Campbell’s’
condensed soup even more relevant and contemporary for today’s

Updated Fiscal 2010 Guidance

Campbell reiterated its full-year guidance for adjusted earnings before
interest and taxes (EBIT) growth of 6 to 7 percent and adjusted net
earnings per share growth of 9 to 11 percent from the fiscal 2009
adjusted base of $2.21. The company revised its fiscal 2010 guidance for
sales growth to 2.5 to 3.5 percent from the prior range of 4 to 5
percent. A detailed reconciliation of the adjusted fiscal 2009
information to the reported information is included at the end of this
news release.

Major Plans for Condensed Soup

Campbell has a number of innovations planned for its U.S. condensed soup
business in fiscal 2011:

  • Expanded Healthy Offerings. Campbell plans to expand its
    industry-leading sodium reduction program and to reduce the sodium
    content in 23 of its condensed soups by up to 45 percent. Following
    this effort, almost half of “Campbell’s” condensed soup portfolio will
    have sodium levels at 480 milligrams or less per serving, considered
    healthy by the U.S. government. Every major condensed variety will
    either be reduced in sodium or be available in a lower sodium option.
    Additionally, Campbell will improve the flavor in all 26 varieties of
    its chicken soups and use a specially roasted chicken meat.
  • More Contemporary Appeal. Campbell will update the labels of
    its popular condensed soups with a more contemporary design and new
    photography that will highlight the soup’s appearance and appeal. The
    familiar red and white colors will remain, but changes to other visual
    elements will evoke a new and different way for consumers to think
    about “Campbell’s” condensed soup. Campbell conducted extensive
    research with consumers to ensure the new labels hit the mark,
    including cutting-edge research methods that measured consumers’
    biometric responses along with ethnographic interviews. Research
    indicated that the new labels increased purchase intent among
    consumers. The company plans to use the new labels, which retain key
    brand equity elements, on all varieties of its condensed soup, except
    Chicken Noodle, Cream of Mushroom and Tomato.
  • Improved Shopping Experience. Campbell plans to redesign its
    popular gravity-fed shelving system, installed at 24,000 retailers
    nationally and credited for rejuvenating the soup aisle, expanding the
    category and vastly improving the shopping experience. Designed to
    make the category easier to browse and to spur incremental purchases,
    the new configuration will include improved navigation, color coding,
    more striking graphics and a new layout across four key eating and
    cooking consumer-focused segments: Classic Favorites, Taste
    Sensations, Healthy & Delicious and Healthy Kids. Partnering with its
    retail customers, Campbell plans to convert all 24,000 systems over
    the next 12 months. Campbell also used biometric and ethnographic
    research techniques to redesign the gravity-fed shelving system. In
    addition, the company plans to roll-out new portable gravity-fed
    systems, called “Canvertables,” providing ideal secondary displays
    throughout a store. Campbell has more than 8,000 portable units in
    place and plans to increase that number to more than 12,000 this year
    and 15,000 in fiscal 2011.
  • New Marketing within Simple Meals. Campbell has new advertising
    in development to position soup and dishes made with soup as a simple
    meal. The new campaign will highlight the fact that soups are an
    affordable, tasty and nourishing alternative versus several other
    popular simple meals. The company also intends to better leverage its
    scale in its U.S. soup marketing efforts and is developing an
    overarching ad campaign designed to create stronger linkage across its
    soup brands.
  • Celebrating American-grown Ingredients. Campbell will promote
    the fact that the vegetables in “Campbell’s” condensed soup are grown
    on American farms, including carrots, celery, potatoes and tomatoes.
    The company will continue to highlight its relationships with American
    family farmers that date back several generations.

The new and improved soups will be available at retail in August 2010.

Conant will share details with investors and the news media at the
Consumer Analyst Group of New York (CAGNY) conference in Boca Raton,
Fla., today at 10:30 a.m. Eastern Time. A webcast of the presentation
will be available at
under the “Shareholder Event / Webcast Information” banner.

About Campbell Soup Company

Campbell Soup Company is a global manufacturer and marketer of
high-quality foods and simple meals, including soup, baked snacks, and
healthy beverages. Founded in 1869, the company has a portfolio of
market-leading brands, including “Campbell’s,” “Pepperidge Farm,”
“Arnott’s,” and “V8.” For more information on the company, visit
Campbell’s website at

Forward-Looking Statements

This release contains “forward-looking statements” that reflect the
company’s current expectations about the impact of its future plans and
performance on sales, earnings, and margins. These forward-looking
statements rely on a number of assumptions and estimates that could be
inaccurate and which are subject to risks and uncertainties. The factors
that could cause the company’s actual results to vary materially from
those anticipated or expressed in any forward-looking statement include
(1) the impact of strong competitive responses to the company’s efforts
to leverage its brand power in the market; (2) the risks associated with
trade and consumer acceptance of the company’s initiatives; (3) the
company’s ability to realize projected cost savings and benefits; (4)
the company’s ability to manage changes to its business processes; (5)
the increased significance of certain of the company’s key trade
customers; (6) the impact of fluctuations in the supply or costs of
energy and raw and packaging materials; (7) the risks associated with
portfolio changes; (8) the uncertainties of litigation; (9) the impact
of changes in currency exchange rates, tax rates, interest rates, debt
and equity markets, inflation rates, economic conditions and other
external factors; (10) the impact of unforeseen business disruptions in
one or more of the company’s markets due to political instability, civil
disobedience, armed hostilities, natural disasters or other calamities;
and (11) other factors described in the company’s most recent Form 10-K
and subsequent Securities and Exchange Commission filings. The company
disclaims any obligation or intent to update the forward-looking
statements in order to reflect events or circumstances after the date of
this release.

Reconciliation of GAAP and Non-GAAP Financial Measures
Year 2009 Net Earnings Per Share

Campbell Soup Company uses certain non-GAAP financial measures as
defined by the Securities and Exchange Commission in certain
communications. These non-GAAP financial measures are measures of
performance not defined by accounting principles generally accepted in
the United States and should be considered in addition to, not in lieu
of, GAAP reported measures.

Items Impacting Diluted Net Earnings
Per Share

The company believes that financial information excluding certain
transactions not considered to be part of the ongoing business improves
the comparability of year-to-year results. Consequently, the company
believes that investors may be able to better understand its earnings
results if these transactions are excluded.

The following items impacted diluted net earnings per share:

(1) In fiscal 2008, the company announced initiatives to improve
operational efficiency and long-term profitability, including selling
certain salty snack food brands and assets in Australia, closing certain
production facilities in Australia and Canada, and streamlining the
company’s management structure. In fiscal 2009, the company recorded
expenses related to these initiatives of $15 million after tax, or $0.04
per share.

(2) In the fourth quarter of fiscal 2009, as part of the company’s
annual review of intangible assets, a non-cash impairment charge of $47
million after tax, or $0.13 per share, was recorded related to certain
European trademarks, primarily in Germany and the Nordic region.

(3) In the second quarter of fiscal 2009, the company recorded a $4
million tax benefit, or $0.01 per share, in discontinued operations
related to the sale of the Godiva Chocolatier business.

The table below reconciles financial information, presented in
accordance with GAAP, to financial information excluding certain

Year Ended
Aug. 2, 2009
Diluted net earnings per share, as reported (a) $ 2.05
Add: Net adjustment from restructuring related costs (1) 0.04
Add: Net non-cash impairment charge on intangible assets (2) 0.13
Deduct: Tax benefit from the sale of the Godiva Chocolatier business
Adjusted Diluted net earnings per share (a) $ 2.21

(a) In the first quarter of fiscal 2010, the company adopted and
retrospectively applied new accounting guidance related to the
calculation of earnings per share. The retrospective application of the
provision resulted in a reduction of the previously reported and
adjusted diluted net earnings per share of $0.01 for fiscal 2009.

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SOURCE: Campbell Soup Company

Campbell Soup Company
Anthony Sanzio (Media)
John Faulkner (Media)
Jennifer Driscoll (Analysts)