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Campbell to Provide Update on Growth Strategies and Outline Key Initiatives for Fiscal 2018

Reaffirms Fiscal 2017 Full-year Guidance and Long-Term Targets

CAMDEN, N.J.–(BUSINESS WIRE)–Jul. 19, 2017–
Campbell Soup Company (NYSE: CPB), led by President and Chief
Executive Officer Denise Morrison, will meet with investors today to
discuss Campbell’s strategic imperatives designed to diversify its
portfolio and meet consumers’ changing preferences.

Morrison will outline steps Campbell is taking to deliver sustainable,
profitable topline growth in the rapidly-changing food industry by
strengthening its core business while expanding into faster-growing
spaces. These plans include building greater trust with consumers
through real food, transparency and sustainability; accelerating digital
marketing and e-commerce efforts; continuing to diversify Campbell’s
portfolio in health and well-being; and broadening how Campbell views
the faster-growing snacking category.

Management will also provide an overview of Campbell’s plans for its
three divisions for the upcoming fiscal year, as well as review the
company’s cost savings initiatives and plans to reinvest in the business.

Reaffirms Fiscal 2017 Guidance

Campbell reaffirmed its previous full-year guidance for fiscal 2017,
which ends July 30, 2017. For the year, Campbell continues to expect net
sales to change by -1 to 0 percent; adjusted Earnings Before Interest
and Taxes (EBIT) to increase by 2 to 4 percent; and adjusted Earnings
Per Share (EPS) to increase by 3 to 5 percent, or $3.04 to $3.09 per
share.*

Campbell plans to provide fiscal 2018 guidance for net sales, adjusted
EBIT and adjusted EPS when it reports fourth-quarter fiscal 2017 results
on Aug. 31, 2017.

Cost Savings Initiatives and Cash Flow

Campbell expects to reach approximately $310 million in annual cost
savings by the end of fiscal 2017. The company also continues to expect
its current cost savings initiatives to deliver $450 million, or
approximately 6 percent of sales, in annual savings by the end of fiscal
2020. This cost savings goal is incremental to the company’s ongoing
supply chain productivity program. Campbell expects an adjusted gross
margin of approximately 38 percent* for fiscal 2017, and expects to
generate approximately $1.25 billion in cash flow from operations in
fiscal 2017.

Long-Term Growth Targets

Campbell reiterated its long-term targets for organic sales and
earnings. The company is targeting long-term organic sales growth of 1
to 3 percent. Excluding currency translation, the company is targeting
adjusted EBIT growth of 4 to 6 percent and adjusted EPS growth of 5 to 7
percent.

An audio and video webcast of the event, along with accompanying slides,
will be broadcast simultaneously at investor.campbellsoupcompany.com
beginning at 12:15 p.m. EDT today. A replay and transcript will be
available after the event.

About Campbell Soup Company

Campbell (NYSE:CPB) is driven and inspired by our Purpose: “Real food
that matters for life’s moments.” We make a range of high-quality soups
and simple meals, beverages, snacks and packaged fresh foods. 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 our
iconic Campbell’s brand, our portfolio includes Pepperidge
Farm, Bolthouse Farms, Arnott’s, V8, Swanson, Pace, Prego, Plum, Royal
Dansk, Kjeldsens
and Garden Fresh Gourmet. 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.
To learn more about how we make our food and the choices behind the
ingredients we use, visit www.whatsinmyfood.com.

*Non-GAAP Reconciliation

A reconciliation of the fiscal 2016 reported (GAAP) financial
information to the adjusted financial information is included at the end
of this news release. A non-GAAP reconciliation is not provided for 2017
guidance since certain items are not estimable, such as pension and
postretirement mark-to-market adjustments, and these items are not
considered to be part of the company’s ongoing business results.

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, including the statements made regarding
fiscal 2017 sales, gross margin, EBIT and EPS guidance and long-term
growth targets, 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 changes to its
organizational structure and/or business processes; (2) the company’s
ability to realize projected cost savings and benefits from its
efficiency programs; (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 and
favorable perception of the company’s brands; (5) the impact of product
quality and safety issues, including recalls and product liabilities;
(6) the risks associated with trade and consumer acceptance of the
company’s initiatives, including its trade and promotional programs; (7)
the impact of a changing customer landscape, with value and e-commerce
retailers expanding their market presence, while certain of the
company’s key customers continue to increase their significance to the
company’s business; (8) the impact of changing inventory management
practices by certain of the company’s key customers; (9) the impact of
disruptions to the company’s supply chain, including fluctuations in the
supply of and inflation in energy and raw and packaging materials cost;
(10) the impact of non-U.S. operations, including trade restrictions,
public corruption and compliance with foreign laws and regulations; (11)
the ability to complete and to realize the projected benefits of
acquisitions, divestitures and other business portfolio changes; (12)
the uncertainties of litigation and regulatory actions against the
company; (13) the possible disruption to the independent contractor
distribution models used by certain of the company’s businesses,
including as a result of litigation or regulatory actions affecting
their independent contractor classification; (14) the company’s ability
to protect its intellectual property rights; (15) the impact of an
impairment to goodwill or other intangible assets; (16) the impact of
increased liabilities and costs related to the company’s defined benefit
pension plans; (17) the impact of a material failure in or breach of the
company’s information technology systems; (18) the company’s ability to
attract and retain key talent; (19) the impact of changes in currency
exchange rates, tax rates, interest rates, debt and equity markets,
inflation rates, economic conditions, law, regulation and other external
factors; (20) the impact of unforeseen business disruptions in one or
more of the company’s markets due to political instability, civil
disobedience, terrorism, armed hostilities, natural disasters or other
calamities; and (21) 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 Fiscal Year
Ended July 31, 2016

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.

The company believes that financial information excluding certain items
that are not considered to be part of the ongoing business, such as
those listed below, improves the comparability of year-to-year results.
Consequently, the company believes that investors may be able to better
understand its earnings results excluding these items. In addition,
management uses these non-GAAP financial measures in making financial,
operating and planning decisions and in evaluating the company’s
performance.

The following tables reconcile financial information, presented in
accordance with GAAP, to financial information excluding certain items.

 
Year Ended July 31, 2016
(millions, except per share amounts)   EBIT  

Net Earnings
Attributable to
Campbell
Soup

Company

 

Diluted Earnings Per Share –
Net Earnings
Attributable to

Campbell Soup Company

2016, As reported

$ 960   $ 563   $ 1.81
Add: Pension and postretirement benefit mark-to-market adjustments
(1)
313 200 0.64
Add: Restructuring charges, implementation costs and other related
costs (2)
78 49 0.16
Deduct: Claim settlement (3) (25 ) (25 ) (0.08 )
Add: Impairment charges (4)   141     127     0.41  
Adjusted 2016 $ 1,467   $ 914   $ 2.94  
 

(1) In fiscal 2016, the company incurred losses of $313 million in Costs
and expenses ($200 million after tax, or $.64 per share) associated with
mark-to-market adjustments for defined benefit pension and
postretirement plans.

(2) In fiscal 2015, the company implemented a new enterprise design and
initiatives to reduce costs and to streamline its organizational
structure. In fiscal 2016, the company recorded Restructuring charges of
$35 million and implementation costs and other related costs of $47
million in Administrative expenses related to the fiscal 2015
initiatives. The company also recorded a reduction to Restructuring
charges of $4 million related to the fiscal 2014 initiatives. The
aggregate after-tax impact of Restructuring charges, implementation
costs and other related costs was $49 million, or $.16 per share.

(3) In fiscal 2016, the company recorded a gain of $25 million in Other
expenses / (income) ($.08 per share) from a settlement of a claim
related to the Kelsen acquisition.

(4) In fiscal 2016, as part of the annual review of intangible assets,
the company recorded a non-cash impairment charge of $141 million in
Other expenses / (income) ($127 million after tax, or $.41 per share)
related to the intangible assets of the Bolthouse Farms carrot and
carrot ingredients reporting unit.

Source: Campbell Soup Company

Campbell Soup Company
INVESTOR CONTACT:
Ken
Gosnell, 856-342-6081
Ken_Gosnell@campbellsoup.com
or
MEDIA
CONTACT:
Thomas Hushen, 856-342-5227
Thomas_Hushen@campbellsoup.com