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SPICIN’ UP McCORMICK & COMPANY, INC.Team Spice Girls & Guy Kristen Adams, Emily Clark, Sarah Fabiano, Christie Kennedy & Matt Pennell

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“LET THE JOURNEY BEGIN…”Company OverviewSWOT AnalysisSMART ObjectivesStrategic Initiative #1Strategic Initiative #2Strategic Initiative #3

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“To save your world from boring food”

“McCormick & Company is the global frontrunner in the manufacturing, advertising, and distribution of spices, herbs, seasonings, and

flavorings.”

INDUSTRY: SEASONING & DRESSING MANUFACTURING

McCormick divides its business into two segments: consumer & industrialConsumer Segment: 61% of total salesIndustrial Segment: 39% of total sales

COMPANY OVERVIEW

SWOT ANALYSIS

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Strengths

Successful acquisitions of well-developed brands Successful implementation of diverse product line Digital marketing efforts Health-conscious and environmentally aware

Opportunities

Entrance into new market segments Increase sales in Quarter 2 & Quarter 3 Capitalize on digital marketing efforts Change in flavor trends & emerging health trends

Weaknesses

Seasonality of sales (significantly lower sales in Q2 & Q3) Business-to-Consumer Segment

Threats

Weather fluctuations & availability of materials

Competition in potential new market segments

Conditions in other countries Currency risk and exchange rate fluctuations

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Internal/External Factors

Objective

Strategies

Increase sales by an average of

$25 million

Increase sales by an average of

$500 million

Increase bbq sales by 5% more than

industry average

Successful entrance into new market segments

Successful acquisitions of well-established

brands

Lower sales in Q2 & Q3; Capitalize on digital

marketing efforts & adapt to new flavor preferences

Relauch of Stubb’s Barbeque

Brand

Acquisition of Hidden Valley

Partnership with Perdue

SMART OBJECTIVES

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ACQUISITION OF Acquisition of Hidden Valley, along with K.C. Masterpiece, from The Clorox Company to capitalize on all aspects of the Seasoning & Dressing Manufacturing Industry

STRATEGY #1:

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STRATEGY#1: RATIONALECore Competency:

Successful acquisition of various brands Increase in total sales of $60 million in 2015 due to inorganic growth

Objective: Expand our product portfolio into all aspects of the Seasoning & Dressing

Manufacturing Industry Via entrance into unfamiliar dressing market

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STRATEGY #1: FINANCIAL VALUATION

Clorox Total Sales = $5.761 billionHidden Valley & KC Masterpiece % of Sales = 9%

Hidden Valley & KC Masterpiece 2016 Total Sales = $518.49 million

Value of Enterprise (2016 to 2020 Projection) ≈ $1,135.80 billion

Total Liabilities ≈ $399.47 millionValue of Equity ≈ $736.33 million

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Acquisition Price ≈ $736.33 million(Financed through Cash and Long-Term Debt)

Payment in Cash = $355,598,176 Payment in Long-Term Debt ≈ $380,733,577.07

Total Interest ≈ $44,663,486.24 (Interest Rate of 3.75%)

STRATEGY #1: FINANCIAL VALUATION

NPV ≈ $658.46 million | IRR ≈ 24.73%

NPV > 0, accept. IRR > required rate of return, accept.Required Rate of Return =

8%

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STRATEGY #1: FINANCIAL RESULTS

Incremental Increase in SalesIn Millions 2016 2017* 2018* 2019* 2020*

Due to Acquisition $518.49 $525.34 $532.28 $539.31 $546.43

Average incremental increase in sales of $532.37 million

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STRATEGY #2:PARTNERSHIP WITHSell McCormick Perfect Pinch line of spices to Perdue to create co-branded pre-marinated and pre-seasoned value-added chicken options for consumers

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STRATEGY #2: RATIONALECore Competency:

Successful entrance into new business segments

How will value be created for Perdue? Offers McCormick Perfect Pinch flavor options to consumers with busier lifestyles

& eliminates prep-time for meals Attracts health-conscious consumer with a taste you can trust

Objective: Enter new business segment via partnership with poultry Increase total sales Increase brand awareness Add legitimacy to sales force

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Perdue % Total Total Chickens 100% 700,000,000Retail Grocery Chickens 55% 385,000,000Value-Added Chickens 41.5% 159,775,000Marinated/Spiced Chickens 15% 23,996,250

Wholesale Price of Spices: $1.98

1 Spice Container seasons 22.78 Chickens 1,052,074.19 Spice Containers required to season 23,996,250

Chickens

STRATEGY #2: FINANCIAL RESULTS

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STRATEGY #2: FINANCIAL RESULTS

Incremental Increase In Sales:In Millions 2016* 2017* 2018* 2019* 2020*

Sale of Spice $2.08 $2.54 $3.04 $3.57 $4.16

3% Co-Branding Fee $16.90 $20.80 $25.24 $30.30 $36.03

Total $18.98 $23.34 $28.28 $33.87 $40.19

Average incremental sales increase of $28.93 million

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STRATEGY #3:RELAUNCH OFTo increase sales during Q2 & Q3 and achieve growth in annual sales, McCormick will relaunch its Stubb’s brand via a digital marketing campaign promoting summer barbeques at participating grocery stores.

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STRATEGY #3: RATIONALEStrategic Issue:

Lower sales in Quarter 2 & Quarter 3 due to product seasonality

Objective: Increase sales in Quarter 2 & Quarter 3 Achieve an overall increase in annual sales Capitalize on praised digital marketing efforts

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STRATEGY #3: SUMMER BARBEQUE

SUMMER BBQ

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STRATEGY #3: DIGITAL MEDIA

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STRATEGY #3: FINANCIAL RESULTS

Average Growth of Barbeque Industry = 2.3%2015 Increase of McCormick Sales due to marketing/relaunching = 6%

PROJECTION: McCormick can grow barbeque sales by 6% more than the industry average.

McCormick – Stubb’s Growth Rate ≈ 2.43%Incremental Increase In Sales:In Millions 2016* 2017* 2018* 2019* 2020*Due to Relaunch $22.43 $22.97 $23.53 $24.10 $24.69

Incremental average sales increase of $23.54 million

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OVERALL PRO FORMA STATEMENT:

In Millions 2016*   2017*   2018*   2019*   2020*  Net Sales 4954.69 100.00% 5064.46 100.00% 5176.78 100.00% 5291.72 100.00% 5409.35 100.00%COGS 2949.92 59.54% 3014.01 59.51% 3079.56 59.49% 3146.61 59.46% 3215.21 59.44%Gross Profit 2004.77 40.46% 2050.45 40.49% 2097.22 40.51% 2145.11 40.54% 2194.15 40.56%SG&A Expenses 1176.30 23.74% 1201.10 23.72% 1226.44 23.69% 1252.35 23.67% 1278.84 23.64%Special Charges 70.92 1.43% 72.50 1.43% 74.10 1.43% 75.75 1.43% 77.43 1.43%Operating Income 757.55 15.29% 776.86 15.34% 796.68 15.39% 817.01 15.44% 837.88 15.49%Interest Expense 75.94 1.53% 74.60 1.47% 73.19 1.41% 71.72 1.36% 70.18 1.30%Other Income 1.27 0.03% 1.30 0.03% 1.33 0.03% 1.35 0.03% 1.38 0.03%Income before Income Taxes 680.34 13.73% 700.97 13.84% 722.16 13.95% 743.94 14.06% 766.32 14.17%Income Taxes 151.42 3.06% 154.78 3.06% 158.21 3.06% 161.72 3.06% 165.32 3.06%Net Income from Consolidated Operations 528.92 10.68% 546.19 10.78% 563.95 10.89% 582.22 11.00% 601.00 11.11%Income from Unconsolidated Operations 42.32 0.85% 43.26 0.85% 44.22 0.85% 45.20 0.85% 46.21 0.85%Net Income 571.24 11.53% 589.45 11.64% 608.17 11.75% 627.42 11.86% 647.21 11.96%                     Incremental Growth in Sales 2016*   2017*   2018*   2019*   2020*  In Millions 559.90   568.93   578.19   587.72   597.52                       % Growth 12.74%   12.66%   12.57%   12.49%   12.42%  

Average Incremental Growth in Sales = $578.45 million | Average % Growth = 12.58%

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Incremental average sales increase of $25 million

Objective:Incremental

average sales increase of

$28.93 million

SUMMARY OF STRATEGIC RESULTS:

Increase sales by an average of $500 million

Increase sales by an average of

$532.37 million

Result:

Increase bbq sales by 5% more than

industry average

Increase bbq sales by 6% more than

industry average

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QUESTIONS?Thank you for your thyme!

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STRATEGY #2#2 Pro Forma Due To Perdue Purchase of Spices & Co-Branding#2 Perdue Annual Growth Rate#2 Perdue Projected Sales

SUPPORTING SLIDESSTRATEGY #1

#1 Hidden Valley’s Pro Forma#1 Hidden Valley Strategy Pro Forma#1 Value of Equity Calculation#1 NPV / IRR

STRATEGY #3#3 Pro Forma Income Statement#3 Projected Increase in Sales

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#1 HIDDEN VALLEY’S PRO FORMA

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#1 HIDDEN VALLEY STRATEGY PRO FORMA

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#1 VALUE OF EQUITY CALCULATION

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#1 NPV / IRRMenu

In Millions Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

OCF $73.848 $74.823 $75.812 $76.813 $77.828 + $1603.26 (TV)

- FA $736.33 - - - - -- WC - $1.5 - - - - -FCF - $734.83 $73.847 $74.823 $75.812 $76.813 $1,681.09

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#2 PRO FORMA: DUE TO PERDUE PURCHASE OF SPICES & CO-BRANDING % OF SALES

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#2 PERDUE ANNUAL GROWTH RATE

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#2 PERDUE PROJECTED SALES

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#3 PRO FORMA INCOME STATEMENT

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#3 PROJECTED INCREASE IN SALES

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