Dave Marberger - Home | Conagra Brands...“Adjusted” financial measures and organic net sales (excl. Trenton) are non-GAAP financial measures 3. Organic net sales growth (excl

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Dave MarbergerCHIEF FINANCIAL OFFICER

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DAVE MARBERGERCHIEF FINANCIAL OFFICER

With Conagra since 2016

Previous Experience

Prestige Brands: 1 year

Godiva Chocolatier: 7 years

Tasty Baking Company: 5 years

Campbell’s: 10 years

PricewaterhouseCoopers: 6 years

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Key Messages

We have made significant progress reshaping Legacy Conagra

over the last four years

The acquisition of Pinnacle is the next step forward in our value

creation playbook

Our long-term targets and capital allocation policy create a

compelling investment opportunity

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What I Will Cover

Our Journey

Continuing the Transformation With Pinnacle

The New Conagra Brands

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What I Will Cover

Our Journey



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Four Years Ago ConAgra Foods Was…

A conglomerateAllocating resources to both branded businesses & private label

Reporting weak marginsLagging peers across key metrics

Struggling to grow profitablyPushing volume at the expense of profitability

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As the Newly Minted Conagra Brands, We Committed to

Transform the Business

Investor Day 2016 Commitments Through FY201,2

Organic Net Sales4

(3 YR CAGR)+1% to +2%

Adjusted Operating Margin3

(reflecting pension accounting changes)~15.5%

Adjusted EPS Growth (3 YR CAGR)

+10%

Working Capital Savings(3 YR CAGR ending FY19)

$400MM

Conagra Is On Track to Deliver Its Commitments

Note: Assumes no additional acquisitions or divestitures.

1. The inability to predict the amount and timing of future items makes a detailed reconciliation of these forward-looking financial measures impracticable

2. “Adjusted” financial measures and organic net sales (excl. Trenton) are non-GAAP financial measures

3. Adjusted operating margin excludes equity method investment earnings and has been restated for pension accounting

4. Organic net sales growth (excl. Trenton) excludes the impact of foreign exchange, the Trenton facility sale, and divested businesses, as well as acquisitions (until the anniversary date of the acquisitions)

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Heavy Lifting Led to a Higher-Quality Business

Higher-quality net sales baseModernizing brands to meet consumer preferences

Increased marginsEffectively pulling our six margin levers

Better growth prospectsInvesting meaningfully behind innovation

• Value Over Volume

• $200MM SG&A reduction program

• $100MM trade efficiency program

Operational

• New Management

• New Vision, Mission, Values

• New Headquarters

Cultural

• Lamb Weston

• Spicetec

• JM Swank

• Private Brands

• Trenton

• Del Monte Canada

• Wesson Oil

Divestitures & Spin

• Frontera

• Thanasi

• Angie’s

• Sandwich Bros.

Acquisitions

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Our Actions Show in the Numbers

Organic Net Sales

Growth3

Adj. Operating

Margin2

(5.4)%

+0.1%~ +1%

FY17 FY18 FY19(Guidance)

Adj. Diluted EPS

from Cont. Ops.

10.8%11.9%

14.9% 15.0%

FY15 FY16 FY17 FY18

$1.22 $1.30

$1.74

$2.11

FY15 FY16 FY17 FY18

Note: “Adjusted” financial measures and organic net sales (excl. Trenton) are non-GAAP financial measures.

1. The inability to predict the amount and timing of future items makes a detailed reconciliation of these forward-looking financial measures impracticable. Guidance assumes no additional

acquisitions or divestitures.

2. Adjusted operating margin excludes equity method investment earnings and has been restated for pension accounting


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Cash Deployment over the Last Four Years

Strategic

AcquisitionsCapEx

Share

RepurchasesDividends

Cumulative Business Investment

$1.7 billion

Cumulative Shareholder Return

$3.6 billion

Note: Time period shown inclusive of FY15 through FY18

$1.0 billion $700 million $1.6 billion $2.0 billion

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What I Will Cover

Our Journey



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Pinnacle Is the next Step in Our Transformation

Strategic Rationale

Leading brands

Complementary businesses

Increased scale

Enhanced frozen position

Robust innovation platform

Financial Rationale

Attractive top-line prospects

Significant synergies

IRR > WACC

EPS accretion

Strong cash flow generation

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Key Pinnacle Integration Milestones on Track

Employees transition to

Chicago & Omaha by

FY20 Q1

Corporate SAP

conversion FY20 Q1

Plant SAP conversions

over the next two yearsClosed acquisition

FY19 Q2

Re-confirmed strategic

priorities post-close

Majority of key milestones will be complete less than one year post-close

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Cost Synergies Expected to Exceed Initial Targets

Original Updated

SG&A +

A&P

COGS

Trade

Efficiency

9.2%

8.0%

Conagra + Pinnacle Peer Median

$285MM Updated Estimate Favorable $70MM vs. Previously Communicated

Strong Synergies Compared

to Past CPG Deals1

(Synergies as % of Target’s Net Sales)

$215MM

$285MM Expected Synergy

Timing

• ~55% achieved by

end of FY20

• ~95% achieved by

end of FY21

Synergy Update

• Trade

• Procurement

• Systems

• Contracts

• Headcount

• Real Estate

1. Source: Company filings, press releases, news reports, investor presentations, wall street research

$99MM

$116MM

$119MM

$146MM

$20MM

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Cash Costs to Achieve Favorable to Original Expectations

Original Updated

OpEx

CapEx

$320MM Updated Estimate Favorable $35MM vs. Previously Communicated

• Closures

• Systems

• Repatriation

CapEx

• System integration

• Vendor transition

• Headcount

OpEx

• ~65% by end of FY20

• ~95% by end of FY21

Cash Costs Expected

$355MM

$320MM

$142MM

$213MM

$85MM

$235MM

• Eliminated lower-ROI network consolidation investments

• Additional OpEx drives additional synergies and supports

systems conversion

Costs to Achieve Update

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Pinnacle Turnaround Cadence

Synergy capture

accelerates

FY20 Q2

Introduction of

innovation

FY20 H2Consumption &

distribution

declines moderate

FY20 H2

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What I Will Cover

Our Journey



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FY18 Pro Forma Net Sales

Grocery & Snacks

30%

Refrigerated & Frozen

25%

Pinnacle28%

Foodservice9%

International8%

Key Brands

~$11.1B

Net Sales

Note: References to pro forma items include historical financial results for Pinnacle Foods prior to completion of the acquisition of Pinnacle Foods by the Company. These items have been

adjusted to align with the Company’s fiscal calendar and accounting policies to the extent that is practicable. Comparison to pro forma results allows the Company to discuss and evaluate

performance of the Pinnacle segment when a comparable period is not available due to the recency of the acquisition.

Source: Net Sales figures provided in Registration Statement on Form S-4 as filed with the SEC on September 13, 2018

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Reiterating FY19 Guidance1,2

Key Financial MetricsLatest FY19

Guidance

Organic Net Sales Growth4

(excl. Trenton impact)Approx. +1%

Adj. Gross MarginBelow Range

29.3% to 29.6%

Adj. Op Margin3 Above Range

14.9% to 15.2%

Adj. Effective Tax Rate 24% to 25%

Adj. Net Interest ExpenseBelow Range

$390MM to $395MM

Avg. Diluted Shares ~446MM

Adj. Diluted EPS from Cont. Ops. $2.03 to $2.08

FY19 SynergiesAbove

$20MM

FY19 Transaction-Related Amortization $17MM

Total Conagra

Key Financial MetricsLatest FY19

Guidance

Reported Net Sales $1.71B to $1.73B

Adj. Op Margin3 Near High-End

14.6% to 14.9%

Pinnacle(incl. Pinnacle-related corporate expense)




3. Adjusted operating margin excludes equity method investment earnings


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Preliminary FY20 Outlook1,2





Metric Preliminary FY20 Outlook

Organic Net Sales Growth3 Approx. +1%

Adj. Diluted EPS from Cont. Ops. $2.10 to $2.20

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Financial Progress Accelerates Through FY221,2

Metric Target

Organic Net Sales Growth4

(3 YR CAGR ending FY22)+1% to +2%

FY22 Adj. Operating Margin3 18% to 19%

FY22 Adj. Diluted EPS from Cont. Ops. $2.70 to $2.80

Free Cash Flow Conversion(% of Adj. Net Income; 3 YR avg. ending FY22)

95%+

Leverage Ratio(Net Debt to LTM Adj. EBITDA)

3.6x to 3.5x in FY21



2. “Adjusted” financial measures, organic net sales (excl. Trenton) and free cash flow are non-GAAP financial measures



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Key Factors Driving Sales Growth1,2

Frozen growth

above category

Snacks growth

in-line or

above category

Maintain share

in lower growth

categories

Condiments and

enhancers

becoming fully

competitive

Trade efficiency

synergies

+1% to +2% Organic Net Sales3 CAGR Through FY22(3 YR CAGR ending FY22)




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Margin Expansion Attributable to Multiple Factors

Sales

Gross Margin

COGS

SG&A / A&P

Innovation

Realized

Productivity

Pricing/TradeCustomer

Investments

Channel & Brand

MixSynergies

Lean SG&A Brand Investments Synergies

Inflation

18% - 19% Adj. Operating Margin1,2,3

(Full-year FY22)

Product & Packaging

Investments

Sales & COGS Mix

Synergies





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FY19 Adj. EPSGuidance

FY22 Adj. EPSTarget

Key Drivers of EPS Growth

Organic Net

Sales Growth3

Synergies

Margin

Expansion

Wesson Divestiture,

Interest Expense &

Share Count

Tax

Rate

$2.03 to $2.08

$2.70 to $2.80

JV

Income





1,2 1,2

Full Year of

Pinnacle

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$668 ~$700

~$1,000

>$1,200 >$1,300

FY18 FY19F FY20F FY21F FY22F

Free Cash Flow to Increase Rapidly

Annual Free Cash Flow2,4

(Dollars in Millions)Key Drivers

• Adjusted earnings growth

• OpEx to achieve synergies: $235MM

• CapEx: 3% to 4% of net sales

• Incl. $85MM of CapEx to achieve synergies

• $300MM of working capital improvements

95%+ FCF2,4 Conversion(% of Adj. Net Income; 3 YR avg. ending FY22)



2. “Adjusted” financial measures and Free Cash Flow (FCF) are non-GAAP financial measures.

3. See the end of this presentation for a reconciliation of this measure to the most directly comparable GAAP measure.

4. Free cash flow is calculated from net cash flow from operating activities from continuing operations less additions to property, plant and equipment. Cash flow contribution from discontinued operations would be incremental.

Strong Free Cash Flow Supports Dividend and De-leveraging

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Go Forward Capital Allocation Policy

Priority• Maintain current annualized

dividend (~$400MM / year)

• Modest increases subject to

Board of Directors approval

Dividend

• De-lever to 3.6x to 3.5x

by FY21

• Solid investment grade

credit rating

Debt

• Acquisitions only if ahead of

de-leveraging targets

• Divestitures are a potential

de-leveraging accelerator

M&A

• Only if ahead of

de-leveraging targets

Share Repurchase

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Disciplined Approach to Acquisitions…

Modernizing

Acquisitions

• Tend to be smaller

• Consistent with emerging trends

• Provide platform for expansion

Synergistic

Acquisitions

• Tend to be larger

• Can enhance network and capabilities

• Can offer material economic benefit

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…And Divestitures

• Limited coherence with portfolio

objectives

• Disadvantaged category fundamentals

• Low priority for innovation or investment

• Divestiture logic immediately evident

Strategic Fit

• Consistent business underperformance

• Lower-than-average returns

• Outside buyer offering value in excess

of internal value

• Divestiture value creation potential

immediately evident

Financial Fit

• Accelerate de-leveraging path

• Balance EPS dilution with de-leveraging

• ~$2.8B gross (~$700MM net) tax asset expires at end of FY21

Other Considerations

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Conclusion

We have made significant progress reshaping Legacy Conagra

over the last four years

The acquisition of Pinnacle is the next step forward in our value

creation playbook

Our long-term targets and capital allocation policy create a

compelling investment opportunity

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Appendix

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Reconciliation of Non-GAAP Financial Measures to

Reported Financial Measures (in millions)

FY18 Gross profit

Selling, general

and

administrative

expenses Operating profit 1

Income from continuing

operations before income

taxes and equity method

investment earnings

Income tax

expense

(benefit)

Income

tax rate

Net income

attributable to

Conagra

Brands, Inc.

Diluted EPS from

income from

continuing operations

attributable to

Conagra Brands, Inc

common stockholders

Reported $ 2,351.5 $ 1,398.4 $ 953.1 $ 874.8 $ 174.6 18.0 % $ 808.4 $ 1.95

% of Net Sales 29.6 % 17.6 % 12.0 %

Restructuring plans 7.8 30.2 38.0 38.0 11.0 27.0 0.07

Acquisitions and divestitures 0.6 15.1 15.7 15.7 4.8 10.9 0.03

Corporate hedging losses (gains) (6.2) — (6.2) (6.2) (1.6) (4.6) (0.01)

Pension settlement and valuation adjustment — — — 5.4 1.7 3.7 0.01

Intangible impairment charges — 4.8 4.8 4.8 1.1 3.7 0.01

Early exit of an unfavorable lease contract by purchasing

the building — 34.9 34.9 34.9 9.3 25.6 0.06

Gain on substantial liquidation of an international joint

venture — — — — (1.4) (2.9) (0.01)

Advertising and promotion expenses 2 — 278.6 — — — — —

Legal matters — 151.0 151.0 151.0 37.7 113.3 0.28

Wesson valuation allowance adjustment — — — — (78.6) 78.6 0.19

Tax reform adjustments — — — — 233.3 (233.3) (0.57)

Unusual tax items — — — — (42.1) 42.1 0.10

Income from discontinued operations, net of

noncontrolling interests — — — — — (14.3) —

Adjusted $ 2,353.7 $ 883.8 $ 1,191.3 $ 1,118.4 $ 349.8 28.9 % $ 858.2 $ 2.11

% of Net Sales 29.7 % 11.1 % 15.0 %

FY18 vs FY15 % of net sales change - reported 419 bps 162 bps 257 bps

FY18 vs FY15 % of net sales change - adjusted 373 bps (58) bps 425 bps

FY15 - FY18 CAGR – reported 23.3 %

FY15 - FY18 CAGR - adjusted 20.0 %

1. Operating profit is derived from taking Income from continuing operations before income taxes and equity method investment earnings, adding back Interest expense, net and removing

Pension and postretirement non-service income.

2. Advertising and promotion expense (A&P) has been removed from adjusted selling, general and administrative expense because this metric is used in reporting to management, and

management believes this adjusted measure provides useful supplemental information to assess the Company’s operating performance. Please note that A&P is not removed from adjusted

profit measures.

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profit measures.

FY17 Gross profit

Selling,

general and

administrative


Income from

continuing

operations before

income taxes and

equity method

investment earnings

Income

tax

expense

(benefit)

Income

tax rate

Net income

attributable

to Conagra

Brands, Inc.

Diluted EPS from

income from

continuing

operations

attributable to

Conagra Brands,

Inc common

stockholders

Reported $ 2,343.8 $ 1,474.0 $ 869.8 $ 729.5 $ 254.7 31.8% $ 639.3 $ 1.25

% of Net Sales 29.9 % 18.8 % 11.8%

Gain on sale of Spicetec and J.M. Swank

businesses — (197.4) (197.4) (197.4) (129.0) (68.4) (0.16)


Acquisitions and divestitures 0.5 30.9 31.4 31.4 11.8 19.6 0.05

Corporate hedging losses (gains) 5.1 — 5.1 5.1 1.9 3.2 0.01

Goodwill and intangible impairment charges — 304.2 304.2 304.2 46.5 257.7 0.59

Early extinguishment of debt — 93.3 93.3 93.3 33.1 60.2 0.14

Salaried pension plan lump sum settlement — — — 13.8 5.3 8.5 0.02


Legal matters — (5.7) (5.7) (5.7) (2.0) (3.7) (0.01)

Tax adjustment of valuation allowance — — — — 91.3 (91.3) (0.21)

Unusual tax items — — — — 14.6 (14.6) (0.03)

Income from discontinued operations, net of

noncontrolling interests — — — — — (95.2) —

Adjusted $ 2,364.9 $ 874.0 $ 1,162.6 $ 1,037.8 $ 350.4 31.6% $ 756.7 $ 1.74

% of Net Sales 30.2 % 11.2 % 14.9%

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profit measures.

FY16 Gross profit

Selling, general

and

administrative


Income from continuing

operations before

income taxes and equity

method investment

earnings

Income tax

expense

(benefit)

Income

tax rate

Net income

(loss)

attributable to

Conagra

Brands, Inc.

Diluted EPS from income

from continuing operations

attributable to Conagra

Brands, Inc common

stockholders

Reported $ 2,429.2 $ 1,720.8 $ 708.4 $ 108.8 $ 46.4 26.5 % $ (677.0) $ 0.29

% of Net Sales 28.0 % 19.9 % 8.2 %


Acquisitions and divestitures — — — — — — —

Corporate hedging losses (gains) (16.4) — (16.4) (16.4) (6.3) (10.1) (0.02)

Pension valuation adjustment — — — 348.5 133.4 215.1 0.49

Intangible impairment charges — 50.1 50.1 50.1 18.5 31.6 0.07



Legal matters — 5.0 5.0 5.0 1.9 3.1 0.01

Unusual tax items — — — — (11.0) 11.0 0.03

Loss from discontinued operations, net of

noncontrolling interests — — — — — 803.6 —

Rounding — — — — — — (0.02)

Adjusted $ 2,461.8 $ 1,087.7 $ 1,027.0 $ 801.7 $ 295.0 34.0 % $ 570.9 $ 1.30

% of Net Sales 28.4 % 12.6 % 11.9 %

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profit measures.

FY15 Gross profit

Selling,

general and

administrative


Income from

continuing operations

before income taxes

and equity method

investment earnings

Income

tax

expense

(benefit)

Income

tax rate

Net income

(loss)

attributable to

Conagra

Brands, Inc.

Diluted EPS from income

from continuing

operations attributable to

Conagra Brands, Inc

common stockholders

Reported $ 2,297.7 $ 1,445.5 $ 852.2 $ 584.6 $ 212.7 32.0 % $ (252.6) $ 1.04

% of Net Sales 25.4 % 16.0 % 9.4 %


Corporate hedging losses (gains) 24.6 — 24.6 24.6 9.3 15.3 0.03

Pension valuation adjustment — — — 6.9 2.7 4.2 0.01

Goodwill and intangible impairment charges — 25.7 25.7 25.7 2.6 23.1 0.05


Integration of former Ralcorp business — 5.0 5.0 5.0 1.9 3.1 0.01

Advertising and promotion expenses 2 — 312.6 — — — —

Legal matters — (7.0) (7.0) (7.0) — (7.0) (0.02)

Unusual tax items — — — — 5.2 (5.2) (0.01)

Loss from discontinued operations, net of

noncontrolling interests — — — — — 701.4

Adjusted $ 2,341.9 $ 1,058.0 $ 971.3 $ 712.1 $ 261.4 33.0 % $ 527.6 $ 1.22

% of Net Sales 25.9 % 11.7 % 10.8 %

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FY17 YTD Q4 FY18 Q3 FY19 YTD

Trailing 4 Quarters

(as of FY19 Q3)

Net Sales $ 2,652.7 $ 690.7 $ 2,117.3 $ 2,808.0

Net sales from acquired businesses (5.8) (17.3) (25.7) (43.0)

Organic Net Sales $ 2,646.9 $ 673.4 $ 2,091.6 $ 2,765.0

Year-over-year change - Net Sales (7.5 )% 7.9 % 2.7 % 3.9 %

Net sales from acquired businesses (pp) 0.2 (2.7) (1.3) (1.6)

Organic Net Sales Growth (7.7 )% 5.2 % 1.4 % 2.3 %


Trailing 4 Quarters

(as of FY18 Q3)

Net Sales $ 2,867.8 $ 640.2 $ 2,062.3 $ 2,702.5

Net sales from acquired businesses — — — —

Organic Net Sales $ 2,867.8 $ 640.2 $ 2,062.3 $ 2,702.5


Trailing 4 Quarters

(as of FY19 Q3)

Operating Profit $ 445.8 $ 122.9 $ 365.0 $ 487.9

Restructuring plans 6.2 — 1.0 1.0

Adjusted Operating Profit $ 452.0 $ 122.9 $ 366.0 $ 488.9

Operating Profit Margin 16.8 % 17.8 % 17.2 % 17.4 %

Adjusted Operating Profit Margin 17.0 % 17.8 % 17.3 % 17.4 %

Reconciliation of Refrigerated & Frozen Organic Net Sales and Adjusted Operating Profit

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FY18 FY17

Net Sales $ 7,938.3 $ 7,826.9

Impact of foreign exchange (27.9) 29.2

Net sales from acquired businesses (169.1) (36.5)

Net sales from divested businesses (283.2) (370.0)

Net sales from sold Trenton plant (79.1) (86.8)

Organic Net Sales ex Trenton $ 7,379.0 $ 7,362.8

Year-over-year change - Net Sales 1.4 % (9.7 )%

Impact of foreign exchange (pp) (0.4) 0.3

Net sales from acquired businesses (pp) (2.1) (0.6)

Net sales from divested businesses (pp) 1.1 4.6

Net sales from sold Trenton plant (pp) 0.1 —

Organic Net Sales ex Trenton Growth 0.1 % (5.4 )%

FY17 FY16

Net Sales $ 7,826.9 $ 8,664.1

Net sales from divested businesses (370.0) (797.4)

Net sales from sold Trenton plant (86.8) (86.1)

Organic Net Sales ex Trenton $ 7,370.1 $ 7,780.6

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May 29, 2016

Receivables, less

allowance for

doubtful accounts Inventories Accounts payable Working capital

Reported 1 $ 650.1 $ 1,044.1 $ 706.7 $ 987.5

Divested businesses 2 (28.4) (12.2) (49.1) 8.5

Adjusted $ 621.7 $ 1,031.9 $ 657.6 $ 996.0

For the Fiscal Year Ended

May 27, 2018

Net cash flows from operating activities - continuing operations $ 919.7

Additions to property, plant and equipment (251.6)

Free cash flow $ 668.1

Reconciliation of Adjusted Working Capital

Reconciliation of Free Cash Flow

1. Balances are as reported in the Annual Report on Form 10-K for the fiscal year ended May 28, 2017.

2. Balances related to divested businesses that were not reported as assets and liabilities held for sale in the Annual Report on Form 10-K for the fiscal year ended May 28, 2017.

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Dave Marberger - Home | Conagra Brands...“Adjusted” financial measures and organic net sales (excl. Trenton) are non-GAAP financial measures 3. Organic net sales growth (excl