William Blair Growth Stock Conference

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The J. M. Smucker Company
William Blair Growth Stock Conference June 24,
2004
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(No Transcript)
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Agenda

• Strategy Overview
• Multifoods Acquisition
• State of the Business
• 2005 Outlook

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The J. M. Smucker Company
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Defining Moments
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New Brands Added to the Smucker Family
Multifoods Acquisition
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The J. M. Smucker Company

• Founded in 1897
• Headquartered in Orrville, Ohio
• Initial public offering in 1959
  (NYSE SJM)
• Family run for four generations
• Commitment to integrity, trust and quality

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Our Basic Beliefs
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Strategy

• We will own and market 1 food brands, found in
  the center of the store, with key emphasis on
  North America
• We will achieve balanced future growth through
• Increased market share of our core brands
• New products that provide convenience, are good
  and good for you, and make the consumer smile
• Acquisitions of other leading food brands

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Growth Strategy
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Growth Strategy

• Acquisition Opportunities
• Seek leading brand positions - retail table-top
  foodservice
• North American geographic emphasis
• Leverage sales, marketing and distribution
  infrastructure
• Enabling acquisitions

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Impact of Multifoods Acquisition
2.3B
1.3B
670MM
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Brand Portfolio Overview
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Brand Portfolio Overview
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Brand Portfolio Overview
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Brand Portfolio Overview
What are the similarities between the brands?

• Icon Brands with strong traditions
• Leadership positions with their respective
  categories
• Strong net sales performance
• Collectively, they represent a platform for
  continued growth

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Multifoods Acquisition

• Transaction Overview
• Supports our vision
• North American focus
• Icon brands
• Center of the store
• Expected to be significantly accretive over a
  three-year period
• Supports sales earnings growth objectives
• Provides platform for future growth
• Benefits all constituents shareholders,
  customers, consumers employees

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Multifoods Acquisition
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Multifoods Acquisition

• Transaction Details
• Purchase price of approximately 840mm
• 25 per share for Multifoods stock
• 80 SJM stock
• 20 cash
• Assumption of approximately 340mm in debt
• Number of SJM shares to be issued, approximately
  8 million.
• Estimated synergies of 40-60mm, including
  synergies the purchase price represents an EBITDA
  multiple of 6-7 times
• Smucker assumes a 100mm NOL carryforward

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Multifoods Acquisition - Synergies
Smucker Brands
IMC US Foodservice
IMC Canadian Foods
IMC US Consumer
JMS Infrastructure
Operations Sales Marketing Supply
Chain Corporate/Admin.
Synergies

• Allowing JMS to
• Reinvest in the new brands 3) Increase
  profile in the baking aisle
• 2) Improve margins 4) Reduce debt

• Synergies
• 40 60mm expected over a 3-year period
• Efficiencies in combining the two companies
• Supply chain opportunities
• Leverage current selling, marketing
  distribution network

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Multifoods Acquisition - Synergies
Smucker Brands
IMC US Foodservice
IMC Canadian Foods
IMC US Consumer
JMS Infrastructure
Operations Sales Marketing Supply
Chain Corporate/Admin.
Synergies
Sales Marketing Supply Chain
Corporate/Admin.
10 45 45
40-60 mm
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Multifoods Acquisition

• Transaction Details - Debt
• Debt Balance (pro forma)
• Long-Term
• 135mm existing Smucker debt
• 200mm Multifoods notes
• 100mm new debt
• Short-Term
• 90mm new bank debt
• Total 525mm debt upon close

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Multifoods Acquisition

• Noteworthy Changes to Smuckers Financials
• Debt
• Long-term ( in millions)

Short-term 90-100 mm short-term revolver at
approximately 1.50-2.00
Total Debt 525-535 mm
Note With interest rate swaps, effective rate
on debt is approximately 5.25
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Keys to a Successful Acquisition
Implementation and Execution

• Attention to detail
• Sense of urgency
• Right people in the right seats
• Empowerment (being responsible for everything
  around you)

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Multifoods Acquisition

• 100 Day Plan
  
• Key Milestones from Day-One
• U.S. Order to Cash integration 8/1
• Canada to broker network 8/16
• U.S. Accounts payable to Oracle 9/1
• Distribution network analysis complete 9/1
• Canada office consolidation into one location
  Target October

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Keys to a Successful Acquisition
Plan(s)
Action(s)
Status

• Smooth transition with customers
• Timely integration
• Blending cultures - (People basic belief)
• Achieve synergies
• Invest in the brands

• Customer interfacing plans developed
• Integration underway
• Clear and consistent communication fair approach
  to people aspects
• Synergies refined and plan implementation in
  process
• Marketing plans developed

• In-Process
• In-Process
• In-Process
• Complete
• In-Process

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State of the Business
Continued momentum in our base business.
Market Share

• Dollar sales for the fruit spreads category
  were up 0.1
• Smucker grew 5.2

• Dollar sales for the peanut butter category
  were up 4.4
• Jif grew 6.1

• Dollar sales for the oils category were up
  11.9
• Crisco grew 10.7

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2004 Financial Overview
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New Items
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Key Initiatives
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Key Initiatives - Restructuring Project
Benefit
Restructuring plan benefit estimated to be 10mm
per annum
Plan
Status

• Incur 18 million restructuring charge over
  3-year period
• Close three production facilities
• Reduce number of SKUs by 1000
• Consolidate Uncrustables into Scottsville facility

• 12 million incurred in 2004, approximately
  3.5mm in 2005
• On target to close facilities in the next 3-6
  months
• Approximately 85 of SKUs eliminated
• Facility opened in Scottsville in May 2004, with
  overlap of 3-6 months

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Other Current Issues

• Obesity we support the GMAs position, and we
  continue to stay attuned to our consumers needs
• Trans-fat we are reviewing all of our products
  as it relates to this issue, we will consider 1)
  reformulation, 2) notification of trans-fat
  content in our products, and 3) the introduction
  of new products
• Electronic Commerce we are taking the lead on
  EC technology implementation within the industry
• Low Carb Craze we offer a number of low-carb
  alternatives, and we continue to evaluate
  consumers needs

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FY 2005 Outlook - considerations

• Factors to Consider
• JMS expects to meet 8 strategic goal
• FY04 financials will be restated to exclude the
  impact of HJF, 0.04 per share
• Watsonville gain of 0.02 will be nonrecurring
• Significant opportunities to spend behind the new
  brands to develop brand awareness with
  consumers

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Multifoods Acquisition

• Noteworthy Financial Changes
• Expected Free Cash Flow Components for 2005
• Depreciation/Amortization 70
• Dividends ( 54 )
• CapEx ( 80 85 )
• Merger related costs ( 90 )
• NOL 7

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The J. M. Smucker Company William Blair Growth
Stock Conference June 24, 2004