Conagra Brands Annual Report 2019
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Conagra Brands Annual Report 2019 Conagra Brands, Inc., Annual Report 2019 Inc., Brands, Conagra 222 Merchandise Mart Plaza Suite 1300 Chicago, IL 60654 ©Conagra Brands, Inc. All rights reserved. 66397_AR2019_Cover.indd 1 7/23/19 11:31 AM DEARDEAR FELLOWFELLOW SHARSHAREHOEHOLDERSLDERS BOARDBOARD OFOF DIRECTORSDIRECTORS LEADERSHIPLEADERSHIP InIn eacheach ofof thethe lastlast fourfour years,years, mymy letterletter toto youyou hashas focusedfocused ofof netnet salessales growth.growth. OurOur fiscalfiscal 20192019 grossgross profitprofit increasedincreased AnilAnil AroraArora RichardRichard H.H. LennyLenny SeanSean ConnollyConnolly onon aa commoncommon theme:theme: thethe incredibleincredible transformationtransformation 12.8%,12.8%, againagain drivendriven byby thethe PinnaclePinnacle acquisition.acquisition. AdjustedAdjusted DirectorDirector andand FormerFormer ViceVice ChairmanChairman ofof FormerFormer ChairmanChairman andand ChiefChief ExecutiveExecutive ChiefChief ExecutiveExecutive OfficerOfficer underunder wayway herehere atat ConagraConagra Brands.Brands. ThisThis year’syear’s letterletter grossgross profitprofit increasedincreased 15.5%.15.5%.22 TheThe impactimpact ofof ourour financingfinancing Envestnet,Envestnet, Inc.;Inc.; FormerFormer ChiefChief ExecutiveExecutive OfficerOfficer ofof TheThe HersheyHershey CompanyCompany andand PresidentPresident willwill notnot breakbreak fromfrom thatthat tradition.tradition. DuringDuring fiscalfiscal 2019,2019, wewe forfor thethe PinnaclePinnacle acquisitionacquisition ledled toto aa 21.5%21.5% declinedecline inin diluteddiluted ofof EnvestnetEnvestnet || YodleeYodlee DirectorDirector sincesince MarchMarch 20092009 andand Non-Non- continuedcontinued ourour workwork toto strengthenstrengthen Conagra’sConagra’s portfolio,portfolio, earningsearnings perper shareshare fromfrom continuingcontinuing operationsoperations (EPS)(EPS) DirectorDirector sincesince JulyJuly 20182018 ExecutiveExecutive ChairmanChairman sincesince MayMay 20182018 ColleenColleen BatchelerBatcheler capabilitiescapabilities andand cultureculture toto accelerateaccelerate growthgrowth andand maximizemaximize inin fiscalfiscal 2019,2019, andand aa declinedecline inin adjustedadjusted EPSEPS ofof 4.7%.4.7%.22 ExecutiveExecutive ViceVice President,President, valuevalue creation.creation. Ultimately,Ultimately, fiscalfiscal 20192019 waswas anotheranother yearyear ofof However,However, thethe companycompany continuedcontinued itsits historyhistory ofof strongstrong ThomasThomas K.K. BrownBrown MelissaMelissa LoraLora GeneralGeneral CounselCounsel andand remarkableremarkable transitiontransition forfor ConagraConagra Brands.Brands. cashcash flowflow generationgeneration fromfrom itsits earnings.earnings. WeWe generatedgenerated $1.1$1.1 RetiredRetired GroupGroup ViceVice PresidentPresident ofof GlobalGlobal RetiredRetired PresidentPresident ofof TacoTaco BellBell CorporateCorporate SecretarySecretary billionbillion inin netnet cashcash flowsflows fromfrom operatingoperating activitiesactivities (continuing(continuing PurchasingPurchasing atat FordFord MotorMotor CompanyCompany International,International, aa partpart ofof TransformationTransformation ofof ourour portfolioportfolio hashas beenbeen aa keykey prioritypriority ofof operations)operations) inin fiscalfiscal 20192019 andand $761$761 millionmillion22 ofof freefree cashcash DirectorDirector sincesince OctoberOctober 20132013 YUM!YUM! Brands,Brands, Inc.Inc. DaveDave BieggerBiegger oursours sincesince mymy tenuretenure withwith thethe companycompany began.began. InIn fiscalfiscal flow,flow, bothboth ofof whichwhich werewere aboveabove expectations.expectations. DirectorDirector sincesince JanuaryJanuary 20192019 ExecutiveExecutive ViceVice President,President, 2019,2019, wewe mademade significantsignificant stridesstrides inin thisthis regard.regard. First,First, wewe StephenStephen G.G. ButlerButler ChiefChief SupplySupply ChainChain OfficerOfficer launchedlaunched anan expansiveexpansive innovationinnovation slate,slate, particularlyparticularly inin ourour OurOur strongstrong cashcash flowflow resultsresults enabledenabled usus toto remainremain onon tracktrack RetiredRetired ChairmanChairman andand RuthRuth AnnAnn MarshallMarshall frozenfrozen foodfood andand snackingsnacking businesses.businesses. TerrificTerrific newnew productsproducts withwith ourour post-Pinnaclepost-Pinnacle deleveragingdeleveraging plan.plan. WeWe reducedreduced debtdebt ChiefChief ExecutiveExecutive OfficerOfficer ofof KPMGKPMG LLPLLP RetiredRetired PresidentPresident ofof MasterCardMasterCard CharisseCharisse BrockBrock acrossacross brandsbrands likelike HealthyHealthy Choice,Choice,®® MarieMarie Callender’sCallender’s®® andand byby $886$886 millionmillion fromfrom thethe closeclose ofof thethe acquisitionacquisition throughthrough DirectorDirector sincesince MayMay 20032003 International’sInternational’s AmericasAmericas divisiondivision ExecutiveExecutive ViceVice President,President, BanquetBanquet®® enabledenabled ourour frozenfrozen single-servesingle-serve mealsmeals portfolioportfolio thethe endend ofof thethe fiscalfiscal year.year. WeWe remainremain fullyfully committedcommitted DirectorDirector sincesince MayMay 20072007 ChiefChief HumanHuman ResourcesResources OfficerOfficer toto drivedrive growthgrowth forfor thethe entireentire category.category. WithinWithin snacks,snacks, toto achievingachieving ourour goalgoal ofof aa netnet debtdebt toto adjustedadjusted EBITDAEBITDA SeanSean M.M. ConnollyConnolly ourour innovationinnovation ledled growthgrowth beyondbeyond ourour expectationsexpectations andand leverageleverage ratioratio ofof 3.63.6 toto 3.53.5 timestimes byby thethe endend ofof fiscalfiscal 20212021 PresidentPresident andand ChiefChief ExecutiveExecutive OfficerOfficer CraigCraig P.P. OmtvedtOmtvedt DerekDerek DeDe LaLa MaterMater contributionscontributions fromfrom everyevery keykey snackingsnacking vertical:vertical: popcorn,popcorn, andand maintainingmaintaining aa solidsolid investmentinvestment gradegrade creditcredit rating.rating. ofof ConagraConagra Brands,Brands, Inc.Inc. RetiredRetired SeniorSenior ViceVice PresidentPresident ExecutiveExecutive ViceVice President,President, meatmeat snacks,snacks, sweetsweet treatstreats andand seeds.seeds. OurOur fiscalfiscal 20192019 sincesince AprilApril 20152015 andand ChiefChief FinancialFinancial OfficerOfficer ofof ChiefChief CustomerCustomer OfficerOfficer innovationinnovation initiativesinitiatives helpedhelped ConagraConagra deliverdeliver organicorganic netnet WeWe alsoalso continuedcontinued toto prioritizeprioritize returningreturning capitalcapital toto ourour DirectorDirector sincesince AprilApril 20152015 FortuneFortune Brands,Brands, Inc.Inc. salessales growthgrowth forfor thethe secondsecond yearyear inin aa row.row. shareholdersshareholders inin fiscalfiscal 2019.2019. DuringDuring thethe year,year, wewe paidpaid cashcash DirectorDirector sincesince NovemberNovember 20162016 JonJon HarrisHarris dividendsdividends ofof $356$356 million.million. JoieJoie A.A. GregorGregor SeniorSenior ViceVice President,President, BeyondBeyond innovatinginnovating ourour existingexisting portfolioportfolio inin fiscalfiscal 2019,2019, RetiredRetired ManagingManaging DirectorDirector ScottScott OstfeldOstfeld ChiefChief CommunicationsCommunications OfficerOfficer wewe acceleratedaccelerated thethe nextnext wavewave ofof changechange throughthrough thethe DeliveringDelivering onon financialfinancial commitmentscommitments toto shareholdersshareholders willwill forfor LeadershipLeadership DevelopmentDevelopment PartnerPartner ofof JANAJANA PartnersPartners LLCLLC acquisitionacquisition ofof PinnaclePinnacle Foods.Foods. PinnaclePinnacle waswas anan obviousobvious alwaysalways remainremain ourour priority.priority. However,However, wewe firmlyfirmly believebelieve thatthat atat WarburgWarburg Pincus,Pincus, LLCLLC andand co-portfolioco-portfolio managermanager ofof JANA’sJANA’s DavidDavid MarbergerMarberger fitfit forfor Conagra,Conagra, andand thethe acquisitionacquisition increasedincreased ourour scale,scale, wewe cancan dodo wellwell byby doingdoing good.good. DuringDuring fiscalfiscal 20192019 wewe mademade DirectorDirector sincesince FebruaryFebruary 20092009 engagementengagement strategy.strategy. ExecutiveExecutive ViceVice President,President, enhancedenhanced ourour frozenfrozen platformplatform andand addedadded leading,leading, iconiciconic greatgreat progressprogress onon ourour CorporateCorporate SocialSocial ResponsibilityResponsibility DirectorDirector sincesince FebruaryFebruary 20192019 ChiefChief FinancialFinancial OfficerOfficer brandsbrands inin attractiveattractive categories.categories. SinceSince completingcompleting thethe (CSR)(CSR) agendaagenda andand II inviteinvite youyou toto visitvisit ourour websitewebsite toto RajiveRajive JohriJohri transactiontransaction inin OctoberOctober 2018,2018, we’vewe’ve mademade tremendoustremendous readread ourour citizenshipcitizenship report.report. TheThe reportreport providesprovides detaildetail onon FormerFormer PresidentPresident andand DirectorDirector TomTom McGoughMcGough progressprogress integratingintegrating thethe business,business, realizingrealizing synergiessynergies ourour fourfour CSRCSR focusfocus areas—Betterareas—Better Planet,Planet, GoodGood Food,Food, ofof FirstFirst NationalNational BankBank ofof OmahaOmaha ExecutiveExecutive ViceVice President,President, andand positioningpositioning Pinnacle’sPinnacle’s largestlargest brands—Bird’sbrands—Bird’s