Tag Archives: CPB

Campbells Soup FY 4Q17 Earnings Call Notes

Posted on by

Denise Morrison

Yes these are challenging times

“Yes, I think that the – again, as I said, I think the retailer environment right now is hypercompetitive. I mean, you’ve got the Amazon acquisition of Whole Foods, the expansion of Leadle and Aldie, creating some new retail formats and some escalated competition in the marketplace.= However, I’m optimistic that retail continues to morph. I mean, I remember and I’m going way back when club stores and supercenters were a new format. And the retailer market and companies like ours adjust to that. So we’re really focused on making our brands accessible in multiple channels, and we believe that the new sales design that we have will help us in that effort. So, yes, I do think these are challenging times. And I do think that, as the consumer changes, retailers will change with the consumer and we’ve got to do the same.”

Anthony Di Silvestro

Expecting sales down 0-2%

“Now, I’ll review our 2018 outlook. We expect sales to change by minus 2% to 0%, adjusted EBIT to change by minus 1% to plus 1% and adjusted EPS to change by 0% to plus 2%. This guidance assumes that the impact of currency translation will be nominal. We are forecasting sales growth in both Global Biscuits and Snacks and Campbell Fresh. However, we expect sales in Americas Simple Meals and Beverages to decline.”

Saltzberg Miscellaneous Notes 3.31.2016

Posted on by

Source: United Technologies 2015 Annual Report

United Technologies (UTX) CEO Greg Hayes said the company benefits from the global trend of urbanization towards the cities

“We are well-positioned to benefit from three megatrends that are shaping the world— urbanization, an expanding middle class and extraordinary growth in commercial aviation. Every day 180,000 people move to urban areas. By 2050 cities will be home to 2.5 billion more people than today, generating a need for more apartment buildings, airports and mass-transit systems —all of which will be equipped with elevators and escalators, climate systems, and fire and security systems.”

Source: Aflac 2015 Annual Report

Aflac (AFL) CEO Dan Amos explains the power of the company’s brand

“Maintaining our powerful and respected brand is essential because it represents who we are – the spirit of our people in Japan and the United States who represent the face of our products and who build trust with businesses, policyholders, consumers, our field force and brokers. We’re pleased that the Aflac brand is also both well known and well respected. Having a trusted and compassionate brand has opened many doors for Aflac. Our brand represents who we are as a company and reflects how our constituents see us, so we’re very protective of maintaining our reputation.”

Source: ABB 2015 Annual Report

Swedish Industrical congolmerate ABB CEO Ulrich Speishoffer highlighted several trends in renewable energy affecting his industry

“There is a shift towards renewables, which is accelerating despite the low oil price – 2015 was a strong year for investment in renewables, with 121 gigawatts of capacity added. This results in unprecedented demands to manage the complexity of the “digital grid” of the future. In power generation, renewables are transforming the energy mix, putting pressure on traditional producers to rethink their business models while lessening environmental impact and dramatically increasing grid complexity. The future grid will be far more complex with multiple feed-in points from traditional power plants to large-scale renewables on the supply side, and a coexistence of traditional demand patterns and microgrids and nanogrids on the demand side. Managing this complexity will require intelligently automated, digital power grids that can anticipate demand and supply patterns, while routing and transporting power to the ever-increasing number of consumption points of electricity.”

Geographically, he expects India to be a driver of growth

“Our markets remain challenging, with slower growth in China and steady conditions in Europe and the United States. We expect India to invest in power infrastructure and industrial development, but see continuing weakness in other emerging markets.”

Source: Markel 2015 Annual Report

Markel (MKL) Co-CEO Tom Gaynor explains the company’s flexible culture and ability to adapt to the operating environment

“We are encouraged to look for a better way to do things…to challenge management. We have the ability to make decisions or alter a course quickly. The Markel approach is one of spontaneity and flexibility. This requires a respect for authority but a disdain of bureaucracy.”

Big data and analytics continue to be an area of increased emphasis to drive improved decision making in their insurance operations

“The tools and techniques of big data continue to increase in affordability and utility. Simply put, information is king. Every transaction and data point continues to become more robust and informative about what the ultimate risk and outcome will be. Technology and digitization change the tools used in the task, not the task itself.”

Source: Accenture 2015 Annual Report

Accenture (ACN) CEO Pierre Nanterme said they have long term relationships with their top clients so they focus on making the business relationship mutually beneficial

“We serve more than 80 percent of the Fortune Global 500 and 94 of the top 100. We also continue to build strong and enduring client relationships. All of our top 100 clients have been clients for at least five years, and 97 have been clients for at least 10 years. Quite simply, our client relationships are second to none, and our continued success underscores our ability to address our clients’ most complex and strategic issues.”

Source: Suncor 2015 Annual Report

Suncor (SU) CEO Steve Williams said 2915 will be the year that energy companies focused on reducing their costs in order to be able to survive the downturn in the oil sector

“Without question, 2015 was one of the most dramatic years in recent memory. It was a year of managing challenges and capturing opportunities. We were well positioned to take immediate action as oil prices fell to their lowest levels in over a decade. We responded swiftly to reduce capital and operating costs. We looked for efficiencies in every corner of our organization.”

Suncor (SU) CEO Steve Williams said the best companies are often strengthened through downturns in the industry

“The market downturn may continue to present opportunities – ones that we’re able to take advantage of because of the strong foundation we’ve built in recent years. Seeking these types of opportunities are strategic and another way we’re building shareholder value for the long term. In fact, I believe that strong companies are often built during downturns and our approach is to view this difficult period as an opportunity and a challenge.”

Source: Campbell 2015 Annual Report

Campbell (CPB) CEO Denise Morrison wants consumers to know exactly what goes into all of their products

“Our purpose has created the conditions for Campbell to become increasingly open about our food with the goal of setting the standard for transparency in the food industry. In fiscal 2015, we initiated an important project to increase consumer trust by providing greater access to information about our products, especially in our core U.S. soups, sauces and beverages.”

Intend to grow their online presence meaningfully

“Over the past several years, we have built stronger digital, social and mobile capabilities and have steadily increased our digital budget. In fiscal 2016, we plan to spend nearly 40 percent of our overall media budget on digital media. We also remain focused on growing our e-commerce capabilities, as this is becoming increasingly important to our consumers and our customers.”

Source: Torchmark 2015 Annual Report

Torchmark (TMK) CEO Gary Coleman said they have been repurchasing their own shares for nearly 30 consecutive years now

“We have been conducting our share repurchase program for thirty years now. During that time, the only year we didn’t repurchase stock was in 1995 due to the acquisition of American Income. Since 1986 we have spent $6.5 billion to repurchase 78% of the outstanding shares of the Company.”

Torchmark (TMK) CEO Gary Coleman said that as a result of “industry experts,” they expect oil to rebound to $45 per barrel

“Based on a consensus of industry expert views, we believe oil is more likely to increase to over $45 a barrel during the next 12 to 24 months than remain at the $30 a barrel level we saw in 2015. We believe the companies in our portfolio can continue to operate for a very long time with oil prices at $45 to $50 a barrel. However, even if oil was around $30 a barrel for the next 12 to 24 months, we wouldn’t expect to have significant defaults during that period.”

Source: ICICI Bank Annual Report

ICICI Bank(IBN) CEO Chanda Kochhar reiterated India’s strong demographics and strengthening growth trajectory

“As I had mentioned last year, the decisive mandate in the general elections was a very positive development for the economy. The immediate impact was felt in the form of a strong improvement in sentiment. India’s inherent strengths are well-known – the demographic dividend and the vast potential for investment. It is these strengths that propelled us on a high growth path for several years.”

The Indian government is fostering a more pro-investment environment

“Over the last year, the Government has taken a number of important steps. There has been a focus on improving governance; enhancing the ease of doing business; creating a conducive environment for investment by both international and domestic participants; and adopting a stable and prudent fiscal policy. At the same time, the Government has sought to bring about the engagement of more and more people in the economic mainstream. While the impact of these measures will be seen over the medium term, the steps taken are clearly in the right direction.”

ICICI Bank(IBN) CEO Chanda Kochhar said effectively utilizing technology allows them to reduce their cost of serving customers

“ICICI Bank has been at the forefront in leveraging technology including the current and emerging transformational trends of mobility, digitisation and rapid growth of social media, to bring value to our customers. We have leveraged our technology capabilities to facilitate faster and convenient processes, create best-in-class technology platforms and reduce transaction costs. Over 50% of all banking transactions are now done over mobile phone or on the internet.”

Miscellaneous Earnings Call Notes 2.26.16

Posted on by

Dean Foods FY 1Q16 Earnings Call

Gregg Tanner

Global milk production continues to increase

“We expect global dairy fundamentals to continue to be overall supportive to our business as production growth continues to outpace demand. Year-over-year, total milk production from the top seven exporters continues to increase, albeit at a much slower pace compared to the initial robust expansion experienced in 2014.”

Export volumes continue to decline

“I think the other thing that wasn’t in our prepared remarks is that we’re seeing export volumes continue to decline, so it’s leaving more milk in the U.S., which I think will help us longer term to kind of keep the prices more manageable as well.”

Greenlight Capital Re’s (GLRE) David Einhorn on Q4 2015

Entered 2016 with lowest short exposure ever

We entered 2016 with 16% net exposure, the lowest we’ve entered any year. The Greenlight Re investment portfolio returned 1.2% in January while the S&P 500 fell about 5%. Our shorts have been helpful and returned 7% in January. We started to see some reversion in the market in January and February as the markets have sold off we become a little more net long as our shorts have fallen in value and we found a few things to buy.”

Consumer could come to the rescue

“On the bright side, the U.S. consumer may come to the rescue as we are nearing full employment, wages are slowly rising and there is an effective tax cut in the form of low energy prices. It remains to be seen whether the U.S. consumer will provide support for corporate earnings and if not at least we hope they buy iPhones, GM cars, and Michael Kors bags particularly at Macy’s.”

Heidrick & Struggles International’s (HSII) CEO Tracy Wolstencroft on Q4 2015 Results

Everyone is focused on the volatility but no one is frozen by it

“We are all like you looking at the opening of 2016 and seeing the volatility, whether it would be how it emanates from Asia, from the energy markets, consequent knock-down effects in financial services, etcetera. We find in our client dialogue that while everyone is focused on it, no one is frozen by it. That may – does that that evolve? We will see. But I would say that every – certainly myself in meetings with clients as well as in meetings with our consultants, we are trying to get a barometer on what you are asking every single day. And it would be very difficult for us to give a broader trend line to what I just described.”

Rich Pehlke

Certainly seeing volatility in economic conditions affect client decisions

“We certainly are seeing the current volatility in the economic conditions factoring the client decisions about what they are doing and what they are thinking about the growth of their business and how they are going to deploy capital. The good news is as we have said many times is that talent is the hot agenda item for most leaderships and boards today. But at the same time, capital deployment certainly has an impact on driving our business. Where we have probably seen the most is as is consistent with what you have read in the news, where we probably see the biggest volatility right now is in the APAC region, simply because of the impact of China and what you see going on there in terms of people thinking about the region itself. And then certainly from a sector standpoint, we have seen more discussions and commentary in areas like financial services, which really are driven by large financial institutions from larger banks and obviously they moved and certainly have an influence on some of that. ”

Edison International (EIX) Theodore F. Craver, Jr. on Q4 2015 Results

SCE is a “wires focused business”

“We have positioned SCE as a wires-focused business, consistent with our views on industry transformation and in alignment with California’s public policy objectives to move the state to a low carbon economy.’

Bank of Montreal (BMO) William A. Downe on Q1 2016 Results

Surjit Rajpal – Chief Risk Officer, BMO Financial Group

Delinquency tick ups because the quarter ended on a Sunday?

“The question that you asked relates to the fact that this quarter again was on a weekend. And the difference between this quarter and the last quarter was that this quarter was on a Sunday, as opposed to ending on a Saturday, which really means that two days of payments that you would normally receive had to be deferred to the Monday following. And that explains the difference, because right after the weekend, the delinquency rate did go back to normal levels. So, I wouldn’t read too much into the early-stage delinquencies that you see in the chart there.”

90 day delinquencies have increased in Alberta

“So, when I look at the 90 days, you did notice that there was a quarterly increase of 14 basis points year-over-year, and that is telling in some ways. And we looked at Alberta in that respect as well, because your question if it’s more related to what’s going on in Alberta. In Alberta, year-over-year, there has been an increase of 34 basis points, which is actually much more telling. ”

Stifel Financial (SF) Ronald J. Kruszewski on Q4 2015 Results

IPOs were down 65% in 2015

“The number of priced U.S. IPOs in the fourth quarter of 2015 decreased to 32 from 68 during the same time period. That’s really down 53%. For the full year of 2015, the overall U.S. IPO market was down in terms of both number of transactions, which were down 41%, and dollars raised, down 65%. Certainly a difficult year in the IPO market and not starting off particularly strong this year.”

The reality versus the market’s perception are completely different

“The reality sometimes of what’s going on versus the market’s perception are completely different. This is one of those times.”

Target (TGT) Q4 2015 Results John J. Mulligan – Chief Operating Officer

Customers trust that you’re in stock

“What I think is much more important, when you talk about essential categories, ultimately this is about the guests trusting that you will have the merchandise they want when they come in our stores. If a new mom takes her baby out in 10-degree weather for diapers and formula, you better have diapers and formula in your store.”

HP (HPQ) Dion J. Weisler on Q1 2016 Results

Haven’t seen stimulation of demand from Windows 10

“I would say that Windows 10, whilst I still believe it’s a tremendous operating system platform and universal apps and continuing computing make devices like the Elite x3 a reality, we have not yet seen the anticipated Windows 10 stimulation of demand that we would have hoped for, and we’re carefully monitoring any sort of price developments that could further weaken demand. ”

Campbell Soup (CPB) Denise M. Morrison on Q2 2016 Results

Weather had some impact

“Finally, weather is not something we control and it’s certainly not the main reason for the decline in our soup business, but we believe the unusually warm winter had a negative impact on the entire category in the first half. ”

Campbell Soup FY 1Q16 Earnings Call Notes

Posted on by

Campbell Soup’s (CPB) CEO Denise Morrison on Q1 2016 Results

The operating environment remains challenging

“Looking at the operating environment, conditions remain challenging. In the United States, the economic situation is mixed. Unemployment continues to improve, but consumers remain very cautious. We’re continuing to see Americans save more and spend less amid the uncertain economic climate. Outside the U.S., we’re seeing macro-economic challenges in other markets where we have significant operations, including Canada, China and Indonesia.”

The industry is creating value through consolidation, spin-offs and cost cutting

“Generating growth in this environment has been and remains difficult. As a result, the industry continues to respond with consolidation, spin-offs, aggressive cost cutting programs, and other measures to improve operational efficiency. Meanwhile, food retailers continue to respond by reconfiguring existing stores with a focus on the perimeter by launching new, smaller formats and by investing heavily in e-commerce capabilities.”

Consolidation and intensified competition are disrupting the landscape

“these are unprecedented times of change marked by challenging economic conditions. In the food world, consolidation and intensified competition are disrupting and altering the landscape. At Campbell, we remain clear-eyed about our challenges, focused on the consumer, responsive to our customers, and dedicated to delivering against our purpose”

We’re shifting 40% of our ad spend to digital

“we’re shifting our spend overall to about 40% of our spend in digital, and that is creating a different dynamic between working and non-working media. ”

We’re establishing a beachhead in fresh food

“we’re establishing a real beachhead in fresh food, bringing Campbell’s suite of capabilities to that faster growing part of the food business. We are being really transparent about our products with our new website, whatsinmyfood.com. We are talking to consumers about what’s in our food, and the ingredients we use, and how it’s made. And these are just steps that really distinguish us and are very true to activating our purpose with the consumer.”

Campbell Soup 4Q13 Earnings Call Notes

Posted on by
Reply

A digest of some of the top insights that I’ve gathered from this week’s earnings calls.  Full notes can be found here.

A tough environment

“We are in the midst of a turbulent period. Retailers are wrestling with challenged consumers who remain under pressure and consumer behavior is becoming less predictable. We believe the weakness that Campbell and other food companies experienced in January was partially related to the extreme weather conditions which dealt a blow to the U.S. economy.”

5% Revenue growth, 2-4% EPS growth

“Campbell reiterated our annual guidance this morning. We expect continuing operations to grow sales by 4% to 5%, adjusted EBIT by 4% to 6% and adjusted EPS by 2% to 4%.”

Weather has pluses and minuses

“We have assessed that weather is neutral to us in this quarter. We definitely acknowledge a benefit of cold temperatures, but we think it was offset by unfavorable weather disruptions. We had plant closures for a while, retail store closures and some lost business in the Foodservice sector.”

Working with Green Mountain in soups, but not in cold beverages

“We continue to work with Green Mountain on the development of the new Fresh-Brewed Soup K-Cup product and we do not have plans at this point for V8 or Bolthouse Farms execution.”

Weather impacting gross margin

“Gross margin has been negatively impacted in the first quarter. Well, actually really in the first-half, but particularly in the second quarter. In the first quarter, we had the Plum recall and in the half, we have had some project expense work that’s fallen into cost of sales, maybe a little bit higher than what we originally anticipated. We have had some weather related costs. The weather has been so severe, we actually had soup freeze in some of our transportation and have to be destroyed and that sort of thing. So we have had some kind of one-off impacts in cost of sales in the first-half.”

Different moving pieces in commodities markets

“As we look forward to next year, you are right. The drought in California is probably going to have an impact on our tomato and our processed tomato cost structure. Obviously you are right about grains, a little bit relief for Pepperidge going forward. But not much impact in the second-half. As you know, we have got a commodity buying program that keeps us out a little bit ahead of the curve and we are pretty well locked in for the balance of this year.”