DEL MONTE FOODS 2007 ANALYST AND INVESTOR DAY JULY 10, 2007 DEL - - PowerPoint PPT Presentation

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DEL MONTE FOODS

2007 ANALYST AND INVESTOR DAY

JULY 10, 2007

DEL MONTE FOODS

Lehman Brothers Back-to-School Consumer Conference September 2007

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FORWARD LOOKING STATEMENT DISCLAIMER

During the course of our discussion today, we will make statements that may constitute projections, expectations, beliefs or similar forward-looking statements. We would like to caution you that the Company’s actual results could differ materially from the results anticipated or projected in these forward-looking statements. Additional detailed information concerning important factors that could cause Del Monte’s actual future results to differ materially from the information we will give you today is included in our public filings, including our most recent annual report on Form 10-K and

• ur current report on Form 8-K dated August 30, 2007, which

are available on the SEC’s EDGAR database or on our

• website. The Company does not undertake to update any of

these forward-looking statements in light of new information

• r future events.

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COMPANY OVERVIEW

RICK WOLFORD CHAIRMAN AND CEO

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READY TO GO

BRANDED LEADER

Simplified, brand-focused portfolio – Pet and Consumer Strong brands – across each portfolio Categories – large and healthy with positive trends Innovation – brand-based, value-added, consumer-driven

COMPETITIVE STRENGTHS

Go-to-market platform with scale Supply chain structure focused on U.S. retail market

STRONG INTEGRATED BUSINESS FUNDAMENTALS

High margin/growth strategic-focus businesses Combined with stable, cash generating businesses

TALENT TO LEAD

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GO-FORWARD FOCUS

Four key areas of focus with action plans in place

Addressing Enhancing

Drive Value-Added Innovation Offset Inflationary and Other Costs Offset Inflationary and Other Costs Stabilize StarKist Stabilize StarKist Build Share Strength

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DEL MONTE – BRANDED LEADER

Branded portfolio works well together

Common/Shared Drivers

Same branded retail disciplines – marketing, sales Common customer base Similar center store promotional merchandising execution Combined center store events - creates scale impact for customer Shared go-to-market platform with scale bandwidth Same dry grocery supply chain Common brand-focused talent support

Consumer Products ~60% Pet Products ~40% Consumer Products ~40% Pet Products ~60%

F07 Net Sales F07 Operating Income

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LARGE AND GROWING CATEGORIES

Del Monte participates in nine categories with dollar sales of ~$1B

• r greater, all growing

F07 Size ($B) '04-'07 CAGR Fruit $2.3 6.4% Vegetable $1.9 1.7% Tomato $1.3 3.9% Broth $0.6 13.7% $6.1 4.9% Tuna $1.6 1.2% Total $7.7 4.1%

Pet Categories Consumer Categories

F07 Size ($B) '04-'07 CAGR Dry Dog $6.6 10.4% Dry Cat $2.8 5.8% Pet Snacks $2.2 12.9% $11.6 9.7% Wet Cat $2.0 4.8% Wet Dog $1.7 6.6% $3.7 5.6% Total $15.3 8.6%

Source: Nielsen All-Outlet Household Panel and internal estimates ended Fiscal 2007

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DEL MONTE – BRANDED LEADER

Structure is strong

1. Branded leadership drives growth and margin expansion 2. Participation in large and growing categories 3. Innovation strategies and disciplines aligned against consumer growth platforms

• ~90% of Del Monte’s net sales are

branded

• ~80% of Del Monte’s net sales are

branded #1 or #2

• Large Brands
• 1 > ~$1B in sales
• 1 > ~$500M in sales
• 4 = ~$200-$300M in sales
• Consumer Categories ’04-’07 CAGR =

~4%

• Pet Categories ‘04-’07 CAGR = ~9%
• Broad array of consumer innovation
• pportunities enabled by brand

platforms

• Robust pipeline of value-added new

products in place

• Line extensions and white space
• pportunities

Source: Nielsen All-Outlet Household Panel and internal estimates ended Fiscal 2007

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DEL MONTE – BRANDED LEADER

Structure is strong

5. Powerful go-to-market platform with competitive scale 6. Integrated supply chain drives competitive cost structure 7. Strong cash flow generator 8. Integrated portfolio generates earnings and cash flow

• 1. Excluding beverage companies. Source: Nielsen All-Outlet Household Panel and internal estimates ended Fiscal 2007
• Top 10 dry-grocer marketer in the

center store1

• Direct sales – majority customer base
• Leveragable and expandable platform
• >98% customer service levels
• Cost advantaged in consumer
• Cost parity in pet
• Cash flow yield = ~6.6% - top quartile
• f peer set
• NSV = ~60% Consumer and ~40% Pet
• OI = ~40% Consumer and ~60% Pet

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GO-FORWARD FOCUS

RICK WOLFORD CHAIRMAN AND CEO

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GO-FORWARD FOCUS

Four key areas of focus with action plans in place

Addressing Enhancing

Drive Value-Added Innovation Offset Inflationary and Other Costs Offset Inflationary and Other Costs Stabilize StarKist Stabilize StarKist Build Share Strength

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OFFSET INFLATIONARY AND OTHER COSTS

VIP and Transformation Plan savings combat escalating costs and build the overall competitiveness of the business

100 150 200 250 300 350 400 450 500 550 F05 F06 F07 F08e

$M

VIP Cost Reduction Programs

• Lean Operations
• Hedging
• Global Sourcing
• Economic Return Projects

Transformation Plan Savings

• Supply Chain Optimization
• Dry Pet Food Distributed

Manufacturing

Key Drivers

$120 $270 $415 $560 $100 $205 $295 $355 VIP and Transformation Savings

% of Cost Increases Offset in that year

~15% ~30% ~40% ~60%

Cumulative Gross Cost Change Cumulative Net Cost Change

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GO-FORWARD FOCUS

Four key areas of focus with action plans in place

Addressing Enhancing

Drive Value-Added Innovation Offset Inflationary and Other Costs Offset Inflationary and Other Costs Stabilize StarKist Stabilize StarKist Build Share Strength

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STABILIZE STARKIST

StarKist experiencing cost pressures

May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

Source: Internal Estimates

Fish costs now at levels ~$40M over previous 10 year average Low catch rates Pricing actions not able to offset recent spike in fish costs Pricing needed to cover higher costs would result in levels well above those experienced this decade Do not believe that that recent fish costs levels reflect a permanent new cost structure Projecting YOY higher fish costs Projecting fish costs that track to seasonal trends, including a Fall declining trend

F08 Expectations SkipJack Seasonality ($/ton)

3 Year Avg

Winter Seasonality

F08E

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STABILIZE STARKIST

Market strategy to stabilize StarKist

Improve Pouch Stabilize Halves Business

Moderated merchandising strategy Grew share in Q1F08 in chunk light halves - first time in 12 quarters

Re-launch Specialty Tuna

Volume driver Center store traffic generator Primary source of low-cost protein for millions of Americans Pouch product upgrade expected in Q2F08 Growth and margin driver New label positioning and marketing Sequential share gain in Q1F08 Margin driver Value-add product

• rientation

Loyal consumer

Status Potential Timing

~6 Months ~3 Months Now

Drive Innovation

Innovation pipeline on track Value-add product

• rientation

Tuna usage expansion potential ~9 Months

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GO-FORWARD FOCUS

Four key areas of focus with action plans in place

Addressing Enhancing

Drive Value-Added Innovation Offset Inflationary and Other Costs Offset Inflationary and Other Costs Stabilize StarKist Stabilize StarKist Build Share Strength

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DRIVE VALUE-ADDED INNOVATION

Brand driven innovation – key strategic focus

Powerful, Branded Platform Opportunity

~80% of Del Monte’s net sales are branded #1 or #2 Strong, differentiated equities Experienced R&D Strategic focus on priority segments On-trend businesses

Competitive Advantage

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DRIVE VALUE-ADDED INNOVATION

Consumer insights and brand platforms drive scalable innovation Consumer Insights Consumer Insights Brand Platforms Brand Platforms Business Platforms Business Platforms

Healthy Snacking

Portable; Freeze & Eat

Wholesome Prepared Meals and Sides

Portable; Heat & Serve

Consumer Examples

Del Monte

Fruit Naturals; Fruit Chillers

StarKist

Tuna Creations

Brand based platforms supporting cumulative innovation

Process Technology Sourcing Selling Distribution

Relationship/Lifestyle

Convenient Meals Interactive Snacks

Health & Wellness

Health-Oriented Snacks Premium Nutrition

Pet Examples

Meow Mix

Market Select Cups

Milk-Bone

Steak Chew

Nature’s Recipe

Farm Stand Selects

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DRIVE VALUE-ADDED INNOVATION

Fruit Chillers

Consumer Insights Benefit Platform – Healthy Snacking Product Platform – Freeze & Eat Brand Platform: Del Monte Fruit Chillers Focuses Del Monte brand into healthy but tasty shelf-stable snacks Business Platform Incorporates: Process Technology – Proprietary blending and sealing technology Sourcing – Existing Selling - Existing Distribution - Existing Size of the Prize Size of the Prize

• Single Serve Plastic Fruit
• Size: ~$800M
• Growth: ~14% vs. YAG

Results Results

• Driven ~50% of category growth

in single serve (past 3 months)

• ~6.4% share with ACV of >86%

Source: Nielsen Homescan Panel All Outlet Estimates – FY2007

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DRIVE VALUE-ADDED INNOVATION

Meow Mix Market Select Cups

Consumer Insights Benefit Platform – Relationship/Lifestyle Product Platform – Convenient Meals Brand Platform Meow Mix Market Select Cups New product accelerates extension of this power brand into new segments (premium wet) Business Platform Incorporates: Process Technology – New forming technology; Packaging (patent-pending) Sourcing – Asia-based strategic partner Selling - Existing Distribution - Existing

Size of the Prize Size of the Prize Results Results

• Premium Wet Cat
• Size: ~$1.0B
• Growth: +13% vs. YAG
• Exceeded forecasts in Q1F08
• Strong YOY growth across all

major channels

Source: Nielsen Homescan Panel All Outlet Estimates – FY2007

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GO-FORWARD FOCUS

Four key areas of focus with action plans in place

Addressing Enhancing

Drive Value-Added Innovation Offset Inflationary and Other Costs Offset Inflationary and Other Costs Stabilize StarKist Stabilize StarKist Build Share Strength

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BUILD SHARE STRENGTH – Price Gaps

Increased price gaps – Share performance

Price Gaps to Private Label1

• vs. All Outlet Shares2

27% 25% 25% 25% 0% 5% 10% 15% 20% 25% 30% F05 F06 F07 Q1F08 36% 34% 33% 36% 0% 5% 10% 15% 20% 25% 30% 35% 40% F05 F06 F07 Q1F08 20% 20% 20% 22% 0% 5% 10% 15% 20% 25% F05 F06 F07 Q1F08

Price Gaps to Private Label

Fruit Vegetables Tomatoes

28% 34% 38% 42% 70% 75% 72% 68% 59% 59% 71% 64%

• 1. Price gaps to private label for major core fruit, core vegetables and solid tomatoes. 2 Market share represented by case share.

Source: Del Monte MRD based on Nielsen SCANTRACK grocery estimates for price gaps and Nielsen Homescan Panel All Outlet Estimates for market share.

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BUILD SHARE STRENGTH – Focus on the Shelf

Category Thought Leadership – Practical applications of category management

Pet Snacks “STAR Set” Brand Block Set B E F O R E B E F O R E B E F O R E B E F O R E A F T E R A F T E R A F T E R A F T E R

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BUILD SHARE STRENGTH – Innovative Marketing

Driving customer business through effective marketing and merchandising

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FINANCIAL FOCUS

DAVE MEYERS CFO

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VALUE PROPOSITION

Del Monte – Financial Drivers

F08 Drivers LT Targets

Driven By: NSV acceleration Improved portfolio Delivery of Transformation savings Full Synergy capture Addressing: Continued cost headwinds StarKist health

Revenue Target EPS Target

3-5% 7-9%

Operating Margin

~12%

Cash Flow

$200M++ Revenue and EPS Growth Rates Operating Margin Cash Flow1

1 Reflects cash provided by operating activities less cash used in investing activities.

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F08 DRIVER: NSV ACCELERATION

Improved portfolio driving 5 to 7% NSV growth

Price increase in pet food Partial year impact

• f F07 fruit pricing

F07 F08E

Pricing: Volume: +2.8% +11.1% +13.9% +5-7% ~1% ~4-6%

F08 Drivers

Innovation Full year of Pet acquisitions Meow Mix, Milk-Bone and legacy business growth Increased levels of Marketing Full Fruit supply

Pet +6 to 9% Consumer +3 to 6% F08 NSV Growth By Segment

TOTAL:

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F08: Addressing Inflationary Costs

Operational costs expected to remain elevated

$150 $30 $120 $145 ~$145 $0 $20 $40 $60 $80 $100 $120 $140 $160 F04 F05 F06 F07 F08E

Gross Inflationary Cost Increases

• vs. Preceding Year

(Excludes Savings Initiatives) $M

Key Operational Cost Components

Cost Bucket Packaging Logistics Raw Products Other Total % of Op Costs ~25% ~15% ~35% ~25% 100% F08 Increase ($M) ~$15-20 ~$0-5 ~$85-95 ~$35-40 ~$145 F07 Increase ($M) ~$25 ~$15 ~$60 ~$45 ~$145 % Increase ~6% ~6% ~6%

• Reflects additional higher projected fish

costs

• Reflects additional higher expected fats and
• ils costs relating to increased demand for

alternative fuels

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DEL MONTE – CASH FLOW GENERATOR

Strong cash flow generator with cash flow yield at the top of its peer group

9% 7% 6% 5% 5% 4% 4% 3% 3% 3% 3% 3% 5% 9% 0% 2% 4% 6% 8% 10%

CF Yield (%) = Cash Flow/Market Cap

1 Reflects the cash flow yield of peers’ fiscal year which is most equivalent to DLM’s fiscal 2008. Peer group includes CPB, CAG, DF, GIS, HNZ, HSY, HRL, K, KFT, MKC, SJM,

TSN, WWY. Source: Deutsche Bank Estimates, 8/17/07

F08E1 Cash Flow Yield

Peer Average = 4.7%

DLM ~7.3% DLM ~7.3%

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F08: OPERATING CASH FLOW

Significant cash flow provides flexibility beyond base business needs

F08E Uses of Operating Cash Flow1

(1Adjusted for transformation and incremental pension contribution) Potential Uses of “Other” Cash Flow

Dividend2 & CAPEX (ex. Transformation)

2 The actual declaration and payment of future dividends and the establishment of record and payment dates, if any, is subject to final determination by our Board of Directors each

quarter after its review of our then current strategy, applicable debt covenants and financial performance and position, among other things

Further reduce debt

Transformation & Incremental Pension Contribution Scheduled Debt Payments Other

Regularly evaluate other uses of cash flow, including dividend and share repurchase Pursue M&A

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LONG-TERM TARGETS: EPS DRIVERS

Topline growth, margin expansion and continued investment driving LT EPS growth

3 to 5% NSV Growth @ 12% OI margin

~ 4 to 7% EPS growth ~ 1 to 3% EPS dilution for investments ~ 4 to 5% EPS growth

Investments in further innovation

7-9% EPS Growth

Debt reduction of $150 to $200M/year

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CONCLUDING REMARKS

RICK WOLFORD CHAIRMAN AND CEO

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DEL MONTE FOODS – STRATEGIC VISION

Branded leader leveraging competitive strengths to deliver margin expansion, increased cash flow and growing ROIC

Portfolio Improvement Portfolio Improvement Brand Driven Innovation Brand Driven Innovation Improved Costs Improved Costs M&A M&A Financial Flexibility Financial Flexibility

Strategic resource allocation - higher growth/margin businesses

• Continued healthy, cash flow businesses

Business Platform innovation model execution Innovation driving topline growth and margin expansion Aggressive cost reduction – Lean Enhanced purchasing scale Superior customer service execution Evaluation of lower cost sourcing Maintaining vigilance in strategic fit higher margin/growth categories Optimize strong cash flow to enhance shareholder value

Strong growth Improved mix Higher margins Greater return on investment

What Tomorrow Holds

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DEL MONTE FOODS

2007 ANALYST AND INVESTOR DAY

JULY 10, 2007

DEL MONTE FOODS

Q&A