Presentation by Jim Sheehan for Hormel Foods 2017 Investor Day

1. Jim Sheehan
Senior Vice President,
Chief Financial Officer Hormel Foods Career History
Oct 2016: Senior Vice President and Chief Financial Officer
March 2016: Vice President and Chief Accounting Officer
2000: Vice President and Controller
1999: Treasurer, Hormel Foods Corporation
1998: President, Hormel Financial Services
Favorite Hormel Foods Product
39 Years with
Hormel Foods

2. Hormel Foods
Jim Sheehan
Senior Vice President &
Chief Financial Officer
A Long-Term Growth Story

3. Shareholders
Returning Cash to
SHAREHOLDER RETURN
Internal Data

4. Shareholder Returns
Leading Our Peers in 10-Year Total SHAREHOLDER RETURN
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Total shareholder returns including reinvestment of dividends 4/27/07 – 4/27/17 (Peer set as disclosed in 2016 Company Proxy Statement)
TotalReturn

5. Strong Cash Flow
A Strategy That Delivers STRATEGY
2012-2016
Internal Data

6. Jennie-O Turkey
Store
Grocery Products
Refrigerated
Foods
Specialty Foods
International
& Other
Financially
Conservative
Innovative
Culture
Retail Foodservice
Protein Packaged Foods
Pork and Turkey
Beef, Nuts, Avocados,
and Tomatoes
Model
Our Balanced STRATEGY
Our Business is Resilient During Various Economic Conditions

7. Margin Expansion
A Focus on
+460bps
9.3%
13.9%
2011
Actual
2016
Actual
STRATEGY
2020
Goal
Top
Quartile
of Our
Peer
Group
Operating Margins
2011 – 2016 Internal Data
Acquisitions
Innovation
Product Mix
Cost Containment
Divestitures

8. STRATEGY
Our Margins
Transforming
ACQUISITIONS
Mid-Teens
Combined Operating Margin
DIVESTITURES
Low Single Digits
BRAND

9. $800M$2.2B
Internal Data 2012 – 2016
STRATEGY
In Growth
$3 Billion Investment
CapexAcquisitions

10. -5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
1 2 3 4 5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
High ROIC
Resulting in Consistently
Factset data based on fiscal 2012-2016 data for Hormel Foods and time-relative data for peers listed in Company 2016 proxy statement.
STRATEGY
• Rigorous Valuation Process
• Long-Term Weighted Average
Cost of Capital
• Post Investment Analysis
Investment Principles

11. • Strategic cost
management
• Improving our
cash cycle
• Optimizing our
capital structure
Strategy
Our Financial

12. • Allocate resources to
support strategic initiatives
and long-term goals
• Minimize expense in less
mission-critical areas
• Enhance our culture of
continuous improvement
Strategic Cost
Management

13. Corporate-Driven Projects
A Focus on Cost Management
FUTURE GROWTH
Promotion Strategy
Portfolio Management
Advertising Strategy
Reformulation Close California Facility
Move Production Equipment
Overhead Management
SKU Rationalization
Sales and MarketingSupply Chain
Research and
Development

14. Employee-Driven Projects
A Focus on Cost Management
• Projects submitted by employees
across the organization
• 1,000+ projects each year
FUTURE GROWTH

15. 50
48
2013 2016 2018
Aggressive
ImprovementDays
FUTURE GROWTH
Our Cash Cycle
Improving
Cash Conversion Cycle
• Obtain industry-leading
accounts payable terms
• Aggressively enforce
selling terms
• Optimize inventory levels
Internal Data

16. FUTURE GROWTH
For Growth
Optimizing the Balance Sheet
Internal data as of fiscal Q2 2017

17. FUTURE GROWTH
Cash to Shareholders
Commitment to Returning
Internal Data
Dividends
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
$0.80

18. $0
$100
$200
$300
$400
$500
$600
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
$100 invested on 4/27/07 in stock or index – including reinvestment of dividends
Hormel
Foods
$442
S&P 500 Pkg
Food & Meats
$287
S&P 500
$198
for our Shareholders
Delivering Returns
FUTURE GROWTH

19. Key
Takeaways
FUTURE GROWTH
A Strong Financial Formula for Growth
1. Utilize capital to grow the business
2. Maintain a strong balance sheet
3. Strategic cost management
4. Maintain dividend growth

20. Hormel Foods
Jim Sheehan
Senior Vice President &
Chief Financial Officer
A Long-Term Growth Story