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Campbell to Discuss Plans to Redesign Enterprise Structure, Drive Approximately $200 Million in Annual Cost Savings and Streamline Organization Structure

CAMDEN, N.J.–(BUSINESS WIRE)–Feb. 18, 2015–
Campbell Soup Company (NYSE: CPB) will provide additional
information today at the Consumer Analyst Group of New York (CAGNY)
Conference in Boca Raton, Florida, on its plans to implement the new
enterprise structure that the company announced on Jan. 29, 2015. The
company will also discuss a major new cost reduction initiative and a
significant initiative to simplify its organization structure in order
to improve its agility in the marketplace. Campbell expects these steps
to generate annual cost savings of at least $200 million over a
three-year period.

Campbell President and Chief Executive Officer Denise Morrison and
Senior Vice President – Chief Financial Officer Anthony DiSilvestro will
present at 10:30 a.m. EST today. Campbell’s presentations will be
webcast live at investor.campbellsoupcompany.com.

“The changes now underway at Campbell have far-reaching implications for
the conduct of our business and the future of our company,” said
Morrison. “Our new enterprise design will align our structure directly
with our core growth strategies and enable us to invest more of our
resources in the areas of our business that can deliver the greatest
growth. Through our critical new cost management initiative, we will
generate significant additional funds for growth and margin expansion.
And through our organization redesign, we will unleash the power of our
people by reducing complexity, driving faster commercialization and
delivering more rapid deployment of our talent against our largest
opportunities.

“Since 2011, we have had a clear and consistent strategic framework for
driving our company’s growth by strengthening our core business and
expanding into faster-growing spaces,” Morrison continued. “We remain
fully committed to this dual mandate. The important transitions we are
implementing now represent changes not in the ‘what,’ but in the ‘how.’
They are transformational steps to unlock the potential of our assets,
advance our growth agenda and create value for our shareholders.”

Under the new enterprise design announced last month, Campbell’s
businesses will be organized in three new divisions structured mainly by
product categories rather than by geographies or brand groups. Each
division will have meaningful scale, a clearly defined role in the
company’s portfolio, and appropriate targets for growth.

  • Americas Simple Meals and Beverages, the largest division, will
    include Campbell’s current U.S. Retail and foodservice businesses,
    Plum Organics, and the company’s simple meals and shelf-stable
    beverage businesses in Canada, Mexico and Latin America. With
    aggregate net sales of approximately $4.5 billion, the businesses that
    will comprise this new division represented 55% of total company sales
    and generated about 70% of total operating earnings in fiscal 2014.
  • Global Biscuits and Snacks will unify the Pepperidge Farm,
    Arnott’s and Kelsen businesses into a fully integrated global biscuits
    and snacks portfolio. The company’s simple meals and beverage
    businesses in Asia Pacific and Asia, including its soup and broth
    business in Hong Kong and China, and Pepperidge Farm’s U.S. bakery
    business, will also be operated within this division. With
    approximately $2.8 billion in net sales, the businesses that will be
    part of this new division generated about 33% of company sales and 25%
    of operating earnings in fiscal 2014.
  • Packaged Fresh will focus on building scale and accelerating
    growth in rapidly expanding packaged fresh categories across the
    retail perimeter. It will include Bolthouse Farms’ portfolio of fresh
    carrots, super-premium beverages and salad dressings, as well as
    Campbell’s retail refrigerated soup business. These businesses
    accounted for approximately $1 billion of net sales – about 11% of
    company sales – and generated 5% of company operating earnings in
    fiscal 2014.

The division operating earnings above exclude unallocated corporate
expenses and items impacting comparability, and are based on historical
expense allocations (see the non-GAAP reconciliation attached to the end
of this press release).

As part of its planning for the new enterprise structure, Campbell has
also been rigorously re-examining its cost structure and organization
design. Based on this analysis, the company believes it has identified
opportunities to reduce its annual overhead expenses over time by at
least $200 million, or 2-3% of its annual sales, over and above the
savings delivered through its longstanding annual productivity program.

Campbell will begin to capture these opportunities in fiscal 2016
through a zero-based budgeting process that will target cost savings in
specific budget categories. The company is also developing plans to
simplify and streamline its organization structure by eliminating excess
layers of management and suboptimal spans of control, standardizing
common processes across the business divisions, and implementing an
integrated global services organization that will leverage the company’s
scale and improve its capabilities through dedicated centers of
excellence. Campbell expects that full execution of the organization
redesign and the new cost reduction initiative will require about three
years. The company does not expect to deliver significant savings from
this initiative in the current fiscal year.

Today’s presentation will be archived on investor.campbellsoupcompany.com
and available for replay beginning approximately two hours after the
conclusion of the presentation.

About Campbell Soup Company

Campbell (NYSE:CPB) is driven and inspired by our Purpose, “Real food
that matters for life’s moments.” The Company makes a range of products
from high-quality soups and simple meals to snacks and healthy
beverages. For generations, people have trusted Campbell to provide
authentic, flavorful and readily available foods and beverages that
connect them to each other, to warm memories, and to what’s important
today. Led by its iconic Campbell’s brand, the
company’s portfolio includes Pepperidge FarmGoldfishBolthouse
Farms
V8SwansonPregoPacePlum
Organics
Arnott’sTim TamRoyal
Dansk
 and Kjeldsens. Founded in 1869, Campbell has
a heritage of giving back and acting as a good steward of the planet’s
natural resources. The company is a member of the Standard & Poor’s 500
and the Dow Jones Sustainability Indexes. For more information, visit www.campbellsoupcompany.com
or follow company news on Twitter via @CampbellSoupCo.

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 the company’s business or financial results. These
forward-looking statements include statements made regarding the
company’s new enterprise structure and cost reduction initiative.
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 company’s ability to manage
organizational change effectively; (2) the company’s ability to realize
projected benefits and cost savings from the new structure; (3) the
impact of strong competitive responses to the company’s efforts to
leverage its brand power in the market; (4) the impact of changes in
consumer demand for the company’s products; (5) the risks associated
with trade and consumer acceptance of the company’s initiatives,
including its trade and promotional programs; (6) the practices and
increased significance of certain of the company’s key trade customers;
(7) the impact of fluctuations in the supply or costs of energy and raw
and packaging materials; (8) the impact of portfolio changes; (9) the
uncertainties of litigation; (10) the impact of changes in currency
exchange rates, tax rates, interest rates, debt and equity markets,
inflation rates, economic conditions and other external factors; (11)
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 (12) 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 to Non-GAAP Financial Measures

2014 Operating Earnings

 
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.
 
Continuing Operations Year Ended
($ millions) August 3, 2014
Earnings before interest and taxes, as reported $ 1,192
Add: Unallocated corporate expenses 149
Add: Restructuring charges 55
Operating Earnings $ 1,396

Source: Campbell Soup Company

Campbell Soup Company
INVESTOR CONTACT:
Jennifer
Driscoll, 856-342-6081
[email protected]
or
MEDIA
CONTACT:
Carla Burigatto, 856-342-3737
[email protected]