Orrville / OH. (sc) At a virtual investor day the J. M. Smucker Company outlined its strategic goals and operational priorities to create long-term and sustainable shareholder value. The Company has also reaffirmed its fiscal year 2021 outlook and shared long-term financial targets.
«We are implementing a focused strategic plan, including reshaping our portfolio, streamlining our organization, and updating our commercial model to transform how we deliver for our customers and consumers, as well as deliver sustainable shareholder value,» said Mark Smucker, President and Chief Executive Officer. During the virtual investor day, the Company’s leadership team shared steps being taken by the organization to work sharper, stronger, and together:
- Sharper: How the Company is prioritizing investments in brands, products, and channels to drive revenue and earnings growth.
- Stronger: How the Company is transforming its capabilities and cost structure to expand competitive advantage, deliver growth, and maximize returns.
- Together: How the Company is bringing its Purpose to life by «Feeding connections that help us thrive.»
This includes an increased focus on execution excellence, which the Company’s leadership team will detail through the four pillars of its operational priorities for the next 12 to 18 months:
- Driving commercial excellence: Transformation of both the marketing and sales model to increase focus on both the consumer and the customer, including the creation of a dedicated pet food sales organization.
- Streamlining its cost infrastructure: A continued commitment to productivity and a focus on minimizing expenses that do not support sales or profit growth, generating USD 50 million of annual cost savings in each of the next three fiscal years.
- Reshaping its portfolio: Reprioritization of investments in the areas of highest growth potential and exit of brands and businesses that are not consistent with the Company’s long-term strategic focus.
- Unleashing the organization to win: Delayering and streamlining the organization to improve decision making and achieve greater agility, unlocking the power of the Smucker family of employees.
Long-Term Growth Targets
Based on its strategic framework and in-depth portfolio review, the Company provided long-term annual growth targets, including:
- Net Sales growth of 2 percent
- Operating Income growth of 5 percent
- Adjusted EPS growth of 8 percent
- Total Shareholder Return of 10 percent or greater
Fiscal Year 2021 Financial Outlook
The Company reiterated its fiscal year 2021 financial guidance of net sales growth to be flat to up 1 percent, adjusted earnings per share to range from USD 8.35 to USD 8.65, and free cash flow to range from USD 975 million to USD 1,025 million. The guidance reflects the removal of five months of divested net sales of approximately USD 100 million and the removal of adjusted earnings per share of USD 0.20, excluding any potential benefit from the use of proceeds from the sale. The guidance does not reflect any impact of the pending «Natural Balance» divestiture, which is anticipated to be immaterial to fiscal year 2021 earnings. The Company anticipates offsetting the earnings dilution and using the after-tax proceeds for share repurchases, over time.