Campbell Soup Company (CPB)

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Campbell Soup (CPB)

Q4 2011 Earnings Call

September 02, 2011 10:00 am ET

Executives

B. Owens - Chief Administrative Officer, Chief Financial Officer and Senior Vice President

Jennifer Driscoll - Vice President of Investor Relations

Denise Morrison - Chief Operating Officer, Executive Vice President and Director

Anthony DiSilvestro - Principal Accounting Officer and Senior Vice President of Finance

Analysts

Jessica Schmidt - JP Morgan Chase & Co

Judy Hong - Goldman Sachs Group Inc.

Andrew Lazar - Barclays Capital

Christopher Growe - Stifel, Nicolaus & Co., Inc.

Adam Josephson - KeyBanc Capital Markets Inc.

Robert Dickerson - Consumer Edge Research, LLC

Robert Moskow - Crédit Suisse AG

Bryan Spillane - BofA Merrill Lynch

Edward Aaron - RBC Capital Markets, LLC

David Driscoll - Citigroup Inc

David Palmer - UBS Investment Bank

Presentation

Operator

Good day, ladies and gentlemen, and welcome to the Campbell Soup's Fourth Quarter 2011 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Jennifer Driscoll, Vice President, Investor Relations. Please begin.

Jennifer Driscoll

Thank you, Mary. Good morning, everyone. Welcome to the Campbell Soup Co.'s fourth quarter earnings call and webcast. With me here in New Jersey today are Denise Morrison, President and CEO; Craig Owen, Senior Vice President, Chief Financial Officer and Chief Administrative Officer; and Anthony DiSilvestro, Senior Vice President of Finance. Today, Denise will give an overview of our strategies and comment on our performance for the fourth quarter, followed by a detailed discussion from Craig that also includes our expectations for fiscal 2012. Following the wrap-up from Denise, all of us will take questions from analysts and investors. As usual, we've created slides to accompany our presentation. You will find the slides posted on our website this morning at investor.campbellsoupcompany.com. Please keep in mind that this call is open to members of the media who are participating in listen-only mode.

As a reminder, our presentation today includes certain forward-looking statements that reflect the company's current expectations about future plans and performance. These forward-looking statements rely on a number of assumptions and estimates, which could be inaccurate and which inherently are subject to risks. Please refer to Slide 4 in our presentation or to the company's most recent Form 10-K and subsequent SEC filings for a list of the factors that could cause our actual results to vary materially from those anticipated in any forward-looking statement.

The results presented today have been adjusted for items impacting comparability, including those that the company announced in June, comprised of a series of initiatives to improve supply chain efficiency and to reduce overhead costs across the organization, as well as the charges related to the decision to close the company's Moscow office and exit the Russian market. As a result of these initiatives in the fourth quarter, we recorded pretax restructuring costs of $63 million or $41 million after tax, which equals about $0.12 per share.

Since our presentation includes non-GAAP measures as defined by SEC rules, we have provided a reconciliation of the measures to the most directly comparable GAAP measures as an appendix to the slides accompanying the presentation. These slides, as well as our earnings release and selected quarterly financial data, can be found on the website.

We've also made a change in our reportable segments, you can see it on Slide 6. Consistent with our strategy and recent management changes effective this quarter, we are reporting the businesses that formally constituted the U.S. Soup, Sauces and Beverages segment as 2 separate reporting segments. First is the U.S. Simple Meals, which includes our U.S. Soup and Sauce portfolio; and the second is U.S. Beverages. We also now have geographic designations on all of our segments, so Baking and Snacking becomes Global Baking and Snacking with no change to the elements that comprise it. International Soup, Sauces and Beverages becomes International Simple Meals and Beverages to match our U.S. naming convention. North America Foodservice doesn't change a name, yet beginning with the fourth quarter of 2011, costs associated with restructuring activities are not included in segment results, and this change affected Foodservice comparisons for the fiscal year. All of our segments results for prior periods have been modified to conform to the current presentation. Further information on historical beverages performances by quarter will be disclosed, along with our first quarter earnings in November 22nd -- it's the 22nd. We'll give you first through third quarters at the time. And with that, I'll turn it over to Denise Morrison.

Denise Morrison

Good morning, everyone. Thank you for joining us for Campbell's fourth quarter earnings conference call for fiscal 2011. This is my first call as Campbell's CEO, and it's an honor and a privilege for me to represent Campbell's here today. I look forward to having an ongoing candid dialogue with all of you about our company, our performance and our progress on the growth strategies we outlined in July at our Analyst Day. In fiscal 2011, after a very weak first half, our focus was on improving our bottom line performance in the back half, while developing a strategic framework for Campbell's future growth. I'll share my observations on our performance in a moment.

As I stated in our Analyst Day in July, our primary goal is to create value by driving sustainable, profitable net sales growth. To achieve that goal, we are pursuing 3 growth strategies. First, we will stabilize then profitably grow North America Soup and Simple Meals. Second, we will invest to expand our international presence. And third, we will continue to drive growth in healthy beverages and baked snacks. We are confident in and committed to these new growth strategies. We're heartened by the constructive feedback we've received from many of you regarding our plans, yet we also recognize, as you do, that the key to success is our ability to execute these strategies.

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