com cagny 2017 · coca-cola company (ko - 42.48 ... • prior to its presentation at the...

-Please Refer To Important Disclosures On The Last Page Of This Report-

CAGNY 2017

Sarah Donnelly (914) 921-5197 Joseph Gabelli (914) 921-8331 Damian Witkowski (914) 921-5022 Zamane Bodini (914) 921-5284

Companies Ticker Price Exchange Companies Ticker Price ExchangeCampbell Soup Company (CPB - $59.54 - NYSE) J.M. Smucker Company (SJM - $140.49 - NYSE)

Church & Dwight Co., Inc. (CHD - 49.85 - " ) Mondelēz International, Inc (MDLZ - 43.73 - NASDAQ)

Coca-Cola Company (KO - 42.48 - " ) Newell Brands (NWL - 49.34 - NYSE)

Danone (BN - 62.53€ - Paris ) PepsiCo, Inc. (PEP - 110.56 - " )

General Mills, Inc. (GIS - $60.73 - NYSE) Snyder's Lance (LNCE - 39.81 - NASDAQ)

Int'l Flavors & Fragrances, Inc. (IFF - 125.13 - " ) Spectrum Brands (SPB - 137.69 - NYSE)

March 6, 2017

G.research, LLC One Corporate Center Rye, NY 10580-1422 Tel (914) 921-5150 www.gabellisecurit ies.com

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HIGHLIGHTS FROM 2017 CAGNY CONFERENCE Our team attended the 2017 Consumer Analyst Group of New York (“CAGNY”) conference the week of February 21st in Boca Raton, Florida; where a number of food, beverage and household/personal care companies addressed the investment community, including:

Sarah Donnelly is the food, household and personal care products research analyst at Gabelli & Company. In 2013, she was named the Health & Wellness research platform leader. Sarah joined GAMCO Investors, Inc. in 1999 as a junior research analyst working with the consumer staples and media analysts. Sarah received a B.S. in Business Administration with a concentration in Finance and minor in History from Fordham University. She is also on the advisory board of the Gabelli Center for Global Security Analysis at Fordham University. Joseph Gabelli joined the firm in 2008 as a research analyst covering consumer staples companies. He began his business career as a research associate with Boston-based, Integrity Capital Management. He is a graduate of both Boston College, with a B.A. in English, and Columbia Business School, with an MBA. Damian Witkowski joined Gabelli & Co. in 2007 as a research analyst covering non-alcoholic beverage companies. He began his career at GE Capital evaluating and executing early to mid-stage private equity transactions. Following GE Capital, Damian spent five years working for INVESCO Private Capital as a Portfolio Manager co-managing a $1.5 billion portfolio of private investments. Prior to joining Gabelli & Co., he worked on analyzing and selecting public securities for the Lynch Foundation. Damian graduated with Honors from University of Connecticut with a B.S. degree in Finance. Zamane Bodini joined Gabelli & Company in 2014 as a research analyst covering consumer products companies. She graduated from Fordham University magna cum laude with a B.S. in Finance and a specialization in Value Investing.

CompaniesBunge Limited Hostess Brands, Inc. Newell BrandsCampbell Soup Company Ingredion Incorporated PepsiCo, Inc.Church & Dwight Co., Inc. International Flavors & Fragrances, Inc. The Procter & Gamble CompanyThe Clorox Company J.M. Smucker Company Snyder's Lance, Inc.The Coca-Cola Company Johnson & Johnson Spectrum BrandsColgate-Palmolive Company Kellogg Company Sysco CorporationConstellation Brands, Inc. L’Oréal Tyson Foods, Inc.Danone Mondelēz International, Inc UnileverGeneral Mills, Inc. Nestle SA


March 6, 2017

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-2017 CAGNY HIGHLIGHTS-

Several trends continue to dominate the industry, including: • 3G’s Presence & Cost Reduction: On Friday, February 17, the week prior to the start of the conference, The

Kraft Heinz Company confirmed its proposal to acquire Unilever for cash and stock, an offer which had been rejected. Two days later, Kraft Heinz abandoned the offer. Consequently, the overarching question across the consumer staples sector remains- who is next? At the same time, slower growth, price competition and the presence of 3G are inciting incremental cost cutting and restructuring programs across most consumer packaged goods companies in order to fund earnings growth.

• Decelerating Growth: The presenting manufacturers addressed decelerating consumption trends, and market research firm, IRI, estimates total CPG growth has slowed to 1.7% in 2016 compared to compounded annual growth of 2.5% from 2011-2015. Macroeconomic uncertainty, political instability, shifting shopping and eating trends and increased promotions are all factors relating to the slowdown. While, volatility is likely to persist, the stabilization of commodity prices across both agricultural and petrochemical-based inputs are expected to lead to more rational pricing going forward as lower prices have failed to stimulate incremental consumption.

• Consolidation Big & Small: While overall industry growth has decelerated, it has also shifted to smaller more innovative companies which are outpacing the growth of their larger counterparts at approximately a 4% rate, according to IRI. As a result, smaller CPG companies have gained approximately 3.1% market share from larger companies over the last five years. This continues to influence M&A decisions, as larger domestic and multinationals add sources of growth.

• E-commerce: The e-commerce market today is small for consumer packaged goods but growing at an

accelerated rate and CPGs are preparing for it by investing in technology, packaging and distribution capabilities. According to IRI, e-commerce CPG revenue is expected to grow from $11 billion in 2015 to $42 billion in 2020. Research by the Food Marketing Institute and Nielsen suggests that by 2025, 40% of center-store volume will go online.

• Snacking: The $1.2 trillion global snacking market is growing faster than overall food, driven by an increased

consumer demand for convenient foods. An IRI snacking survey found that 50% of all US eating occasions in 2016 were snacks, and many companies were vocal in highlighting their snack offerings and innovations.

• Health & Wellbeing: Health and wellbeing continues to be a priority for food and beverage companies, as

consumers’ perception of healthy is benefiting categories that are perceived as natural, less processed or fresh. Virtually every company presented innovations with increased health, wellness, and sustainability credentials, noting that significantly higher growth rates for such products.

• DSD vs. Direct: With companies under pressure to cut costs, and with retailers’ direct warehouse distribution capabilities improving, some investors and management teams are questioning the merits of maintaining high-cost, direct-store distribution (DSD) systems. Kellogg notably announced its intention to eliminate its DSD system in favor of a direct model over the next year, arguing that less money can be spent more effectively by increasing merchandising spending. Other companies that utilize DSD, such as MDLZ and LNCE, offered up a full-throated defense of the model, noting that there is no substitution for the in-store customer contact it provides.


March 6, 2017

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Campbell Soup Company2016 - 2021P

Fiscal year end 7/31 2016 2017E 2018P 2019P 2020P 2021P CAGR($ in millions, except per share)

Revenue 7,961$ 7,947$ 8,069$ 8,221$ 8,381$ 8,549$ 1.4 %% Growth -1.5% -0.2% 1.5% 1.9% 1.9% 2.0%

EBITDA 1,775 1,783 1,849 1,905 1,980 2,038 2.8 Margin 22.3% 22.4% 22.9% 23.2% 23.6% 23.8%

EPS, cont ops $2.94 $3.05 $3.20 $3.40 $3.60 $3.80 5.4 % Growth 10.8% 3.2% 6.3% 5.3% 6.8% 5.5%

TEV/EBITDA Multiple 12.3x 12.2x 11.8x 11.5x 11.0x 10.7xP/E Multiple 20.3 19.6 18.5 17.5 16.4 15.6

CapEx 341 320 320 316 324 333 Source: Company data and Gabelli & Company estimates.

Campbell Soup Company (CPB - $59.54 - NYSE) Buy FYE: 7/31 EPS P/E PMV 2019P $3.40 17.5x $76 Dividend: $1.40 Current Return: 2.4% 2018P 3.20 18.5 72 Shares O/S: 307.1 million 2017E 3.05 19.6 68 52-Week Range: $67.89 - $52.58 2016A 2.94 20.3 --

COMPANY OVERVIEW Campbell Soup Company based in Camden, New Jersey is the leading soup manufacturer in the US with its iconic Campbell brand. In addition to soup, the company’s other products include Bolthouse Farms beverages, Plum organics, V8 beverages, Pepperidge Farm and Arnott’s bakery products and Prego and Pace sauces. Campbell is expected to generate revenue of $7.9 billion, EBITDA of $1.8 billion and earnings of $3.05 per share for the fiscal year ending July 31, 2017.

HIGHLIGHTS • Prior to its presentation at the conference, Campbell reported 2Q results and reiterated guidance for fiscal

2017: revenue flat to +1%, adjusted operating profit +1-4%, which will result in adjusted EPS growth of 2-5% to $3.00-3.09. Management also extended and raised its cost savings target to $450 million by 2020, from the previous target of $300 million which will be achieved this fiscal year, as the packaged food companies continue to push harder on cost savings in order to offset sales softness across many center-store categories.

• Management reviewed the changing environment driven by demographic shifts, trends towards well-being, technological advancements and socioeconomic forces. Accordingly, CPB continues to evolve the company’s portfolio while also improving the execution of its core through a focus on real food and health and well-being; however, disruptions and volatility in its C-Fresh segment this year have partially offset the improved sales and profitability of its legacy businesses.

• The company’s four growth platforms and areas for reinvestment are centered around e-commerce, snacking, nutritional systems, including personalized food options and the trend towards fresh and sustainable foods. For these reasons, CPB will continue to pursue merger opportunities, particularly around snacking and health and well-being, and invest a portion of its cost savings to fund opportunities across marketing, innovation and distribution.

• Long-term targets are net sales growth of 1-3%, adjusted EBIT of 4-6% and adjusted EPS of 5-7%, excluding the impact from currency. Cash priorities remain: capital expenditures, dividends, external development and share repurchases.

RECOMMENDATION Efforts to stabilize revenue growth and expand through new initiatives, coupled with cost savings and repurchases in the absence of acquisitions, should generate at least mid-single digit growth over the next five years. Management also has the balance sheet flexibility to continue to make acquisitions; it continues to seek additional scale in packaged fresh and capitalize on the growth in snacking. If the current strategy does not meet expectations in this challenging environment then we may see the Board, particularly members of the Dorrance family that own over 40% of shares and hold three board seats, consider strategic alternatives, including consolidation or financial engineering to surface value for shareholders. Shares currently trade at 12.2x FY 2017E EBITDA and 19.6x earnings. CPB remains a Buy, we calculate a PMV of $72 per share based on fiscal 2018 estimates.

Table 1

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Campbell Soup Company Private Market Value Analysis2016-2021P

Fiscal year end 7/31 2016 2017E 2018P 2019P 2020P 2021P($ in millions, except per share)

Americas Simple Meals & BeveragesRevenue 4,380$ 4,381$ 4,406$ 4,454$ 4,505$ 4,559$ EBITDA 1,186 1,235 1,264 1,299 1,336 1,363 Valuation Multiple 13.5x 13.5x 13.5x 13.5x 13.5x 13.5xSegment Value 16,011 16,667 17,058 17,539 18,042 18,403

Global Biscuits & SnackingRevenue 2,564$ 2,598$ 2,650$ 2,706$ 2,763$ 2,822$ EBITDA 518 523 544 561 579 597 Valuation Multiple 13.5x 13.5x 13.5x 13.5x 13.5x 13.5xSegment Value 6,993 7,055 7,350 7,575 7,810 8,056

Campbell FreshRevenue 1,017$ 968$ 1,013$ 1,061$ 1,113$ 1,168$ EBITDA 137 85 117 123 146 161 Valuation Multiple 13.5x 13.5x 13.5x 13.5x 13.5x 13.5xSegment Value 1,850 1,148 1,576 1,659 1,968 2,169

Corporate & EliminationsExpense (66) (59) (76) (78) (81) (83) Valuation Multiple 13.5x 13.5x 13.5x 13.5x 13.5x 13.5xSegment Value (891) (796) (1,026) (1,056) (1,088) (1,120)

Total Private Market Value 23,963 24,074 24,957 25,716 26,732 27,508 Less: Net Debt (3,237) (2,981) (2,731) (2,457) (2,156) (1,838) Less: Other Liabilities (174) (174) (174) (174) (174) (174) Less: Options Payments (a) (247) (254) (272) (289) (310) (328) Equity Private Market Value 20,305$ 20,665$ 21,781$ 22,796$ 24,092$ 25,168$

Shares Outstanding 308 305 302 299 296 293 PMV per share $66 $68 $72 $76 $81 $86Current Market - Discount to PMV 10% 12% 18% 22% 27% 31%

(a) After-tax payments to buy out options holders at Private Market Value.

Source: Company data and Gabelli & Company estimates.

Table 2

I, Sarah Donnelly, the Research Analyst who prepared this report, hereby certify that the views expressed in this report accurately reflect the analyst’s personal views about the subject companies and their securities. The Research Analyst has not been, is not and will not be receiving direct or indirect compensation for expressing the specific recommendation or view in this report. Sarah Donnelly (914) 921-5197 Gabelli & Company 2017

Important Disclosures

ONE CORPORATE CENTER RYE, NY 10580 GABELLI & COMPANY TEL (914) 921-5130 FAX (914) 921-5098 Gabelli & Company is the marketing name for the registered broker dealer G.research, LLC, which was formerly known as G.research, Inc., Gabelli & Company ("we" or "us") attempts to provide timely, value-added insights into companies or industry dynamics for institutional investors. Our research reports generally contain a recommendation of "buy," "hold," "sell" or "non-rated.” We do not undertake to "upgrade" or "downgrade" ratings after publishing a report. We currently have reports on 607 companies, of which 47%, 35%, 3% and 14% have a recommendation of buy, hold, sell or non-rated, respectively. The percentage of companies so rated for which we provided investment banking services within the past 12 months is 0%, 0%, 0% and less than 1%. Ratings Analysts’ ratings are largely (but not always) determined by our “private market value,” or PMV methodology. Our basic goal is to understand in absolute terms what a rational, strategic buyer would pay for an asset in an open, arms-length transaction. At the same time, analysts also look for underlying catalysts that could encourage those private market values to surface. A Buy rated stock is one that in our view is trading at a meaningful discount to our estimated PMV. We could expect a more modest private market value to increase at an accelerated pace, the discount of the public stock price to PMV to narrow through the emergence of a catalyst, or some combination of the two to occur. A Hold is a stock that may be trading at or near our estimated private market value. We may not anticipate a large increase in the PMV, or see some other factors at work. A Sell is a stock that may be trading at or above our estimated PMV. There may be little upside to the value, or limited opportunity to realize the value. Economic or sector risk could also be increasing. We prepared this report as a matter of general information. We do not intend for this report to be a complete description of any security or company and it is not an offer or solicitation to buy or sell any security. All facts and statistics are from sources we believe to be reliable, but we do not guarantee their accuracy. We do not undertake to advise you of changes in our opinion or information. Unless otherwise noted, all stock prices reflect the closing price on the business day immediately prior to the date of this report. We do not use "price targets" predicting future stock performance. We do refer to "private market value" or PMV, which is the price that we believe an informed buyer would pay to acquire 100% of a company. There is no assurance that there are any willing buyers of a company at this price and we do not intend to suggest that any acquisition is likely. Additional information is available on request. As of January 31, 2017 our affiliates beneficially own on behalf of their investment advisory clients or otherwise approximately less than 1% of Campbell Soup Co. Because the portfolio managers at our affiliates make individual investment decisions with respect to the client accounts they manage, these accounts may have transactions inconsistent with the recommendations in this report. These portfolio managers may know the substance of our research reports prior to their publication as a result of joint participation in research meetings or otherwise. No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this research report. In addition, the undersigned lead analyst(s) has not and will not receive any compensation for providing a specific recommendation or view in this report. The analyst that wrote this report, or members of her household, owns no shares of Campbell Soup Co.

Campbell Soup Company - Price Performance

Source: Public data. As of March 6, 2014 CPB had a BUY recommendation

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March 6, 2017

Church & Dwight Co., Inc.2015 - 2021P

Fiscal year ended 12/31 2015 2016 2017E 2018P 2019P 2020P CAGR'16-'21P

($ in millions, except per share)

Revenue 3,395$ 3,490$ 3,643$ 3,765$ 3,895$ 4,037$ 3.7 %% Growth 2.9% 2.8% 4.4% 3.4% 3.4% 3.7%

EBITDA 784 830 871 930 991 1,063 6.5 Margin 23.1% 23.8% 23.9% 24.7% 25.5% 26.3%

EPS, cont ops 1.61$ 1.75$ 1.90$ 2.05$ 2.25$ 2.45$ 8.9 % Growth 7.2% 8.3% 7.7% 9.4% 8.9% 9.4%

TEV/EBITDA Multiple 17.8x 16.8x 16.2x 15.1x 14.2x 13.2xP/E Multiple 30.9 28.5 26.5 24.2 22.2 20.3

CapEx 62 54 63 65 67 69

Source: Company data and Gabelli & Company estimates

Church & Dwight Co., Inc. (CHD - $49.85 - NYSE) Hold Year EPS P/E PMV 2019P $2.25 22.2x $60 Dividend: $0.76 Current Return: 1.5% 2018P 2.05 24.2 55 Shares O/S: 254.6 million 2017E 1.90 26.5 51 52-Week Range: $53.68 - $42.56 2016A 1.75 28.5 ---

COMPANY OVERVIEW Church & Dwight based in Ewing, New Jersey manufactures and markets consumer and specialty products, such as baking soda, laundry detergent, deodorizers and personal care products. Its oldest and most recognizable brand name is Arm & Hammer. The portfolio is split 60% premium brands and 40% value brands. In 2017, we expect CHD to generate $3.6 billion of revenue, $871 million of EBITDA and earnings of $1.90 per share. HIGHLIGHTS • Through its strong portfolio of 40 % value and 60% premium brands, Church & Dwight’s management team

has successfully outperformed its competitors through cost control and operational excellence while reinvesting across its 10 Power brands to support new products, product extensions and brand equities. A recent new product introduction is triple-chamber Arm & Hammer laundry pods, which compete in the fastest growing segment of the laundry category (+19% in 4Q), but where CHD is underrepresented (4% share) relative to its liquid laundry share (14.1%).

• 2017 Outlook: Organic revenue growth of approximately 3% (today categories are growing approximately 1.0-1.5%. slightly below the projection of 2%), operating margin +40bps and EPS of $1.89 per share including approximately -1% from currency. Increased marketing and amortization costs are reducing operating margins by about 20bps. Long-term the financial model remains the same: organic sales +3%, operating margin +50bps and EPS growth of 8%.

• CHD is a strong cash flow generator, as capital expenditure is around $55 million and as management strives to reduce working capital to industry-leading levels. Priorities for free cash flow remain acquisitions, reinvestment in the business and returning to shareholders through dividends and share repurchases. Management has an impressive acquisition history but more recently has only completed small bolt-ons adding products in niche areas. Acquisition criteria: leading brands, higher growth and higher margins, asset light, ability to leverage CHD’s infrastructure and deliver sustainable competitive advantage. The priority is in North America but management also considers opportunities in Europe, Asia and the specialty division.

RECOMMENDATION Church & Dwight is well-positioned in diverse categories and continues to shift its focus to faster-growing, higher margin businesses to drive industry-leading EPS growth over the next five years. The company continues to improve gross margins through strong operational execution, cost saving initiatives, while it may be further enhanced by improved personal care growth and additional acquisitions. Absent acquisitions, we expect the company to continue to repurchase shares. CHD remains a Hold based on valuation as shares are currently trading at 16.2x 2017E EBITDA estimates and 26.5x P/E, we calculate a PMV of $55 per share based on 2018 estimates.

Table 1

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Church & DwightPrivate Market Value Analysis

2016- 2021PFYE 12/31 2016 2017E 2018P 2019P 2020P 2021P($ in millions, except per share)

Domestic ConsumerRevenue 2,677$ 2,818$ 2,911$ 3,009$ 3,119$ 3,232$ EBITDA 683 729 776 825 883 943Valuation Multiple 16x 16x 16x 16x 16x 16xSegment Value 10,935$ 11,661$ 12,423$ 13,198$ 14,129$ 15,089$

International ConsumerRevenue 528$ 534$ 558$ 583$ 609$ 637$ EBITDA 87 81 91 101 113 125Valuation Multiple 16x 16x 16x 16x 16x 16xSegment Value 1,397$ 1,296$ 1,455$ 1,623$ 1,802$ 1,992$

C&D SPD Revenue 285$ 291$ 297$ 302$ 309$ 315$ EBITDA 57 59 61 63 65 67Valuation Multiple 16x 16x 16x 16x 16x 16xSegment Value 918$ 948$ 978$ 1,009$ 1,041$ 1,074$

Corporate (34) (35) (37) (38) (40) (42)

Total Private Market Value 13,250$ 13,905$ 14,855$ 15,830$ 16,972$ 18,155$ Less: Net Debt (1,034) (885) (824) (766) (709) (662)Less: Options Payments (a) (219) (256) (302) (350) (405) (461)Plus: Equity Investments 9 9 9 9 9 9Equity Private Market Value 12,006$ 12,773$ 13,737$ 14,723$ 15,867$ 17,041$

Shares Outstanding 255.0 251.9 249.0 246.3 243.8 241.6 PMV per share $47 $51 $55 $60 $65 $71Current Market - Discount to PMV -6% 2% 10% 17% 23% 29%

(a) After-tax payments to buy out options holders at Private Market Value.


Table 2



ONE CORPORATE CENTER RYE, NY 10580 GABELLI & COMPANY TEL (914) 921-5130 FAX (914) 921-5098 Gabelli & Company is the marketing name for the registered broker dealer G.research, LLC, which was formerly known as G.research, Inc., Gabelli & Company ("we" or "us") attempts to provide timely, value-added insights into companies or industry dynamics for institutional investors. Our research reports generally contain a recommendation of "buy," "hold," "sell" or "non-rated.” We do not undertake to "upgrade" or "downgrade" ratings after publishing a report. We currently have reports on 607 companies, of which 47%, 35%, 3% and 14% have a recommendation of buy, hold, sell or non-rated, respectively. The percentage of companies so rated for which we provided investment banking services within the past 12 months is 0%, 0%, 0% and less than 1%. Ratings Analysts’ ratings are largely (but not always) determined by our “private market value,” or PMV methodology. Our basic goal is to understand in absolute terms what a rational, strategic buyer would pay for an asset in an open, arms-length transaction. At the same time, analysts also look for underlying catalysts that could encourage those private market values to surface. A Buy rated stock is one that in our view is trading at a meaningful discount to our estimated PMV. We could expect a more modest private market value to increase at an accelerated pace, the discount of the public stock price to PMV to narrow through the emergence of a catalyst, or some combination of the two to occur. A Hold is a stock that may be trading at or near our estimated private market value. We may not anticipate a large increase in the PMV, or see some other factors at work. A Sell is a stock that may be trading at or above our estimated PMV. There may be little upside to the value, or limited opportunity to realize the value. Economic or sector risk could also be increasing. We prepared this report as a matter of general information. We do not intend for this report to be a complete description of any security or company and it is not an offer or solicitation to buy or sell any security. All facts and statistics are from sources we believe to be reliable, but we do not guarantee their accuracy. We do not undertake to advise you of changes in our opinion or information. Unless otherwise noted, all stock prices reflect the closing price on the business day immediately prior to the date of this report. We do not use "price targets" predicting future stock performance. We do refer to "private market value" or PMV, which is the price that we believe an informed buyer would pay to acquire 100% of a company. There is no assurance that there are any willing buyers of a company at this price and we do not intend to suggest that any acquisition is likely. Additional information is available on request. As of January 31, 2017 our affiliates beneficially own on behalf of their investment advisory clients or otherwise less than 1% of Church and Dwight. Because the portfolio managers at our affiliates make individual investment decisions with respect to the client accounts they manage, these accounts may have transactions inconsistent with the recommendations in this report. These portfolio managers may know the substance of our research reports prior to their publication as a result of joint participation in research meetings or otherwise. No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this research report. In addition, the undersigned lead analyst(s) has not and will not receive any compensation for providing a specific recommendation or view in this report. The analyst, who wrote this report, or members of her household, owns no shares of Church & Dwight Co.

Church & Dwight - Price Performance

Source: Public data. As of March 6, 2014 CHD had a HOLD recommendation

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G.research, LLC One Corporate Center Rye, NY 10580-1422 Tel (914) 921-5150 www.gabellisecurities.com

March 6, 2017

The Coca-Cola Company (KO - $42.48 - NYSE) Hold Year EPS P/E PMV 2019P $2.05 20.7x $44 Dividend: $1.48 Current Return: 3.5% 2018P 1.95 21.7 42 Shares O/S: 4,293 million 2017E 1.85 22.9 43 52-Week Range: $47.13 - $39.88 2016A 1.91 22.2 ---

COMPANY OVERVIEW The Coca-Cola Company (KO), headquartered in Atlanta, GA, is the world’s largest beverage company. Products bearing the Coca-Cola trademarks have been sold in the U.S. since 1886. Today, the company owns or licenses over 500 brands and sells more than 3,500 different sparkling and still beverage products in over 200 countries. Reason For Comment: The incoming Coca-Cola CEO James Quincey and CFO Kathy Waller presented at CAGNY:

• KO is in the process of transforming its system back to a franchise model allowing the company to focus on its core competency of building strong brands. The planned refranchising of the KO system in Europe has been completed, while North America, Japan, China and Africa refranchising is expected to be completed by the end of 2017. This refranchising will result in KO losing revenue but improving its gross margin rate (+800bps), operating margin rate (+900bps) while reducing capex by about $1.0-1.3 billion.

• KO’s incremental investments and focus on revenue growth that began in mid-2014 is working despite a challenging macro environment. In 2016, core revenue grew 4% and profit improved by 8% on a comparable and currency-neutral basis. Some of these improvements have been masked by currency and structural headwinds; currency had a 9% negative impact on 2016 results with structural (refranchising) headwind of 3%.

• Beverage industry on a global basis remains vibrant, with 4% revenue growth since 2014, a pace of growth that KO believes is sustainable through 2019, with Water and Energy drink categories growing the fastest (5% to 8% range). KO has a dominating +50% value share of the global CSD category, but only around 15% or less share of the remaining categories. KO expects to capture share by building out a portfolio for every occasion by innovating locally (500+ new products launched during 2016, with same planned for 2017), scaling brands globally (e.g. smartwater, Honest Tea), and M&A (e.g. Fairlife).

• KO aims to reduce its sugar footprint through focus on Zeros (e.g. Coca-Cola Zero Sugar), smaller packages in both the take-home and immediate consumption channels, and through portfolio expansion of low to no sugar added drinks.

Investment Case KO shares trade at 21.7x our 2018P EPS of $1.95 and provide a current return of 3.5%. We find the current valuation fair considering the challenging global demand environment, currency and structural headwinds over the next two years.

Table 1 The Coca-Cola Company Earnings Model 2015-2021P

Source: Public filings and Gabelli & Company estimates

(in millions, except per share data) 2015 2016 2017E 2018P 2019P 2020P 2021PTotal Revenue 44,270$ 41,893$ 34,927$ 30,871$ 31,703$ 32,567$ 33,461$ (4) %####EBITDA 12,579 12,003 10,854 10,955 11,511 12,114 12,700 1

EPS 1.99$ 1.91$ 1.85$ 1.95$ 2.05$ 2.20$ 2.35$ 4 TEV/EBITDA 15.4 x 16.1 x 17.8 x 17.6 x 16.8 x 16.0 x 15.2 xP/E Multiple 21.2 22.2 22.9 21.7 20.7 19.3 18.0 CapEx 2,553$ 2,262$ 2,000$ 1,500$ 1,500$ 1,500$ 1,500$ Net Debt/(Cash) 23,363 23,508 24,408 25,376 26,364 27,364 28,302

CAGR5-Year

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Table 2 The Coca-Cola Company Private Market Value Analysis

2016-2021P


I, Damian Witkowski the Research Analyst who prepared this report, hereby certify that the views expressed in this report accurately reflect the analyst’s personal views about the subject companies and their securities. The Research Analyst has not been, is not and will not be receiving direct or indirect compensation for expressing the specific recommendation or view in this report.

Damian Witkowski (914) 921-5022 Gabelli & Company 2017 Important Disclosures

ONE CORPORATE CENTER RYE, NY 10580 GABELLI & COMPANY TEL (914) 921-5130 FAX (914) 921-5098 Gabelli & Company is the marketing name for the registered broker dealer G.research, LLC, which was formerly known as G.research, Inc., Gabelli & Company ("we" or "us") attempts to provide timely, value-added insights into companies or industry dynamics for institutional investors. Our research reports generally contain a recommendation of "buy," "hold," "sell" or "non-rated.” We do not undertake to "upgrade" or "downgrade" ratings after publishing a report. We currently have reports on 607 companies, of which 47%, 35%, 3% and 14% have a recommendation of buy, hold, sell or non-rated, respectively. The percentage of companies so rated for which we provided investment banking services within the past 12 months is 0%, 0%, 0% and less than 1%. Ratings Analysts’ ratings are largely (but not always) determined by our “private market value,” or PMV methodology. Our basic goal is to understand in absolute terms what a rational, strategic buyer would pay for an asset in an open, arms-length transaction. At the same time, analysts also look for underlying catalysts that could encourage those private market values to surface. A Buy rated stock is one that in our view is trading at a meaningful discount to our estimated PMV. We could expect a more modest private market value to increase at an accelerated pace, the discount of the public stock price to PMV to narrow through the emergence of a catalyst, or some combination of the two to occur. A Hold is a stock that may be trading at or near our estimated private market value. We may not anticipate a large increase in the PMV, or see some other factors at work. A Sell is a stock that may be trading at or above our estimated PMV. There may be little upside to the value, or limited opportunity to realize the value. Economic or sector risk could also be increasing. We prepared this report as a matter of general information. We do not intend for this report to be a complete description of any security or company and it is not an offer or solicitation to buy or sell any security. All facts and statistics are from sources we believe to be reliable, but we do not guarantee their accuracy. We do not undertake to advise you of changes in our opinion or information. Unless otherwise noted, all stock prices reflect the closing price on the business day immediately prior to the date of this report. We do not use "price targets" predicting future stock performance. We do refer to "private market value" or PMV, which is the price that we believe an informed buyer would pay to acquire 100% of a company. There is no assurance that there are any willing buyers of a company at this price and we do not intend to suggest that any acquisition is likely. Additional information is available on request. As of January 31, 2017, our affiliates beneficially own on behalf of their investment advisory clients or otherwise less than 1% of The Coca-Cola Company. Because the portfolio managers at our affiliates make individual investment decisions with respect to the client accounts they manage, these accounts may have transactions inconsistent with the recommendations in this report. These portfolio managers may know the substance of our research reports prior to their publication as a result of joint participation in research meetings or otherwise. No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this research report. In addition, the undersigned lead analyst(s) has not and will not receive any compensation for providing a specific recommendation or view in this report. The analyst, who wrote this report, or members of his household, owns no shares of the above mentioned companies.

(in millions, except per share data) 2016 2017E 2018P 2019P 2020P 2021PConcentrate & Finished Goods Revenue 22,109$ 19,891$ 19,286$ 20,002$ 20,748$ 21,525$

" EBITDA 11,382 10,983 10,939 11,482 12,053 12,666 " Multiple 17x 17x 17x 17x 17x 17x " Segment Value 193,502$ 186,718$ 185,965$ 195,196$ 204,902$ 215,321$

Bottling Revenue 19,784$ 15,036$ 11,586$ 11,701$ 11,818$ 11,937$ " EBITDA 1,526 705 673 705 768 772 " Multiple 10x 10x 10x 10x 10x 10x " Segment Value 15,255$ 7,050$ 6,729$ 7,055$ 7,677$ 7,723$

Total Private Market Value 208,757$ 193,768$ 192,694$ 202,250$ 212,579$ 223,044$ Less: Net Debt (23,508) (24,394) (25,345) (26,315) (27,296) (28,215) Less: Options Payments (a) (3,498) (2,857) (2,782) (3,141) (3,536) (3,934) Less: Options Payments (a) - - - - - - Plus: 16.7% stake in MNST 1,633 1,633 1,633 1,633 1,633 1,633 Plus: Hidden Assets 14,692 14,692 14,692 14,692 14,692 14,692 Equity Private Market Value 198,077$ 182,842$ 180,892$ 189,119$ 198,072$ 207,220$

Shares Outstanding 4,293 4,284 4,279 4,278 4,274 4,273 PMV per share 46$ 43$ 42$ 44$ 46$ 48$ Current Market - Discount to PMV 8% 0% 0% 4% 8% 12%(a) After-tax payments to buy out options holders at Private market Value.

The Coca-Cola Company - Price Performance

Source: Public data. As of March 6, 2014, 2014 KO was rated BUY and changed to HOLD on October 22, 2014

March 6, 2017

-9-


( € in millions, except per share data)FYE 12/30 2014 2015 2016 2017E 2018P 2019P 2020P 2021P

Revenues 21,144€ 22,412€ 21,944€ 25,601€ 27,884€ 29,152€ 30,484€ 31,886€ % Growth -0.7% 6.0% -2.1% 16.7% 8.9% 4.5% 4.6% 4.6%

EBITDA 3,369€ 3,645€ 3,766€ 4,457€ 5,145€ 5,725€ 6,253€ 6,812€ % Margin 15.9% 16.3% 17.2% 17.4% 18.5% 19.6% 20.5% 21.4%% Growth -4.3% 8.2% 3.3% 18.3% 15.4% 11.3% 9.2% 8.9%

EPS 2.62€ 2.93€ 3.10€ 3.50€ 4.05€ 4.60€ 5.05€ 5.55€ % Growth -5.8% 12.0% 5.6% 12.2% 17.2% 12.8% 10.0% 9.8%

Source: Company f ilings, Gabelli & Company estimates.

Danone (BN - €62.53 - Paris) Buy Year EPS P/E PMV 2019P €4.60 13.0x €88 Dividend: €1.70 Current Return: 2.7% 2018P 4.05 14.8 77 Shares O/S: 616 million 2017E 3.50 17.2 67 52-Week Range: €70.53 - €57.66 2016A 3.10 19.3 --

COMPANY OVERVIEW Paris, France based Danone is a food and beverage manufacturer with a focus on “better-for-you” categories including: fresh dairy (yogurt), bottled water and aqua drinks, baby food and formula and medical nutrition products. The company is currently working to complete its $12 billion acquisition of WhiteWave foods, a deal which will double the size of its US business and extend Danone’s reach into plant-based food and beverages, coffee creamers and organic dairy and produce. Management is also stepping up its cost reduction and efficiency efforts to drive €1 billion of savings over the next three years as part of a plan to drive sustainable, profitable growth. Including nine months of WWAV, we expect Danone to generate 2017 revenue, EBITDA, and EPS of €25.6 billion, €4.4 billion, and €3.50 per share.

HIGHLIGHTS • Danone used its CAGNY presentation to emphasize its €3 billion North American business, and specifically its

business in the United States, which is one of the company’s better performing markets. The US business is anchored by $2.5 billion of revenue from yogurt, a category which Danone continues to outperform despite a nearly 40% market share. Management continues to contend that the fresh dairy category in the US is still in the early stages of development due to low per capita consumption relative to major European markets, and believes that it can drive further growth through innovation in the coming years. Notably, Danone intends to convert its three largest US yogurt brands, Dannon, Danimals and Oikos, to non-GMO by mid-2018.

• Outside of yogurt, the company is also driving strong growth in its smaller US waters, baby food and medical nutrition businesses. Evian is growing at twice the 25% growth rate of the US premium water category, which is being supported by consumer shift away from CSDs to healthier options. Happy Family, the number one organic baby food brand in the US, is growing 30% vs. 22% category growth, driven by strong packaging innovation. The medical nutrition business, while small, is focused on specialized niches such as severe allergies and metabolic disorders, and has doubled over the past several years.

• Management also devoted considerable time reiterating the case for the WhiteWave transaction, which the company still expects will close in Q1. While recent WWAV results have been pressured by execution issues (mismanaged SAP integration at Earthbound, consumer confusion following a packaging change at Silk), WhiteWave continues to enjoy leading shares in fast-growing, better-for-you categories that have relatively low household penetration and are nicely adjacent to Danone’s core fresh dairy business. The deal increases Danone’s exposure to a more-stable US market, but will be accretive to both growth rates and margin.

RECOMMENDATION Outside the US, Danone continues to face headwinds in European fresh dairy, as well as both waters and early life nutrition in China, but we believe those issues are largely transitory and the company’s focus on health and well-ness categories will drive accelerating growth in the coming years. We continue to believe that Danone’s current share price does not adequately reflect the contribution and synergies from the WhiteWave acquisition, and that the deal’s close (and subsequent guidance revisions) will act as a catalyst for shares. Danone shares trade at a 19% dis-count to our €77 per share PMV, which grows to €109 per share in 2021. We continue to recommend investors Buy Danone.

Table 1

Danone Earnings Model 2014-2021P

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Table 2 Danone Private Market Value Analysis 2015-2021P

I, Joseph A. Gabelli, the Research Analyst who prepared this report, hereby certify that the views expressed in this report accurately reflect the analyst’s personal views about the subject companies and their securities. The Research Analyst has not been, is not and will not be receiving direct or indirect com-pensation for expressing the specific recommendation or view in this report.

Joseph A. Gabelli (914) 921-8331 Gabelli & Company 2017 Important Disclosures

ONE CORPORATE CENTER RYE, NY 10580 GABELLI & COMPANY TEL (914) 921-5130 FAX (914) 921-5098 Gabelli & Company is the marketing name for the registered broker dealer G.research, LLC, which was formerly known as G.research, Inc., Gabelli & Company ("we" or "us") attempts to provide timely, value-added insights into companies or industry dynamics for institutional investors. Our research reports generally contain a recommendation of "buy," "hold," "sell" or "non-rated.” We do not undertake to "upgrade" or "downgrade" ratings after publishing a report. We currently have reports on 607 companies, of which 47%, 35%, 3% and 14% have a recommendation of buy, hold, sell or non-rated, respectively. The per-centage of companies so rated for which we provided investment banking services within the past 12 months is 0%, 0%, 0% and less than 1%. Ratings Analysts’ ratings are largely (but not always) determined by our “private market value,” or PMV methodology. Our basic goal is to understand in absolute terms what a rational, strategic buyer would pay for an asset in an open, arms-length transaction. At the same time, analysts also look for underlying catalysts that could encourage those private market values to surface. A Buy rated stock is one that in our view is trading at a meaningful discount to our estimated PMV. We could expect a more modest private market value to increase at an accelerated pace, the discount of the public stock price to PMV to narrow through the emergence of a catalyst, or some combination of the two to occur. A Hold is a stock that may be trading at or near our estimated private market value. We may not anticipate a large increase in the PMV, or see some other factors at work. A Sell is a stock that may be trading at or above our estimated PMV. There may be little upside to the value, or limited opportunity to realize the value. Economic or sector risk could also be increasing. We prepared this report as a matter of general information. We do not intend for this report to be a complete description of any security or company and it is not an offer or solicitation to buy or sell any security. All facts and statistics are from sources we believe to be reliable, but we do not guarantee their accuracy. We do not undertake to advise you of changes in our opinion or information. Unless otherwise noted, all stock prices reflect the closing price on the business day immediately prior to the date of this report. We do not use "price targets" predicting future stock performance. We do refer to "private market value" or PMV, which is the price that we believe an informed buyer would pay to acquire 100% of a company. There is no assurance that there are any willing buyers of a company at this price and we do not intend to suggest that any acquisition is likely. Additional information is available on request. As of January 31, 2017 our affiliates beneficially own on behalf of their investment advisory clients or otherwise approximately less than 1% of Danone and 1.86% of White Wave. Because the portfolio manag-ers at our affiliates make individual investment decisions with respect to the client accounts they manage, these accounts may have transactions inconsistent with the recommendations in this report. These portfolio managers may know the substance of our research reports prior to their publication as a result of joint participation in research meetings or otherwise. No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this research report. In addition, the undersigned lead analyst(s) has not and will not receive any compensation for providing a specific recommendation or view in this report. The analyst that wrote this report, or members of his household, owns no shares of the above mentioned companies.

( € in millions, except per share data)FYE 12/31 2015 2016 2017E 2018P 2019P 2020P 2021P

Fresh Dairy ProductsEBITDA 1,498€ 1,477€ 1,539€ 1,629€ 1,721€ 1,815€ 1,910€ Valuation Multiple 12.0x 12.0x 12.0x 12.0x 12.0x 12.0x 12.0x Segment Value 17,980 17,722 18,472 19,545 20,652 21,776 22,921

WatersEBITDA 720€ 697€ 724€ 770€ 818€ 867€ 918€ Valuation Multiple 9.0x 9.0x 9.0x 9.0x 9.0x 9.0x 9.0x Segment Value 6,484 6,272 6,518 6,930 7,360 7,803 8,261

Early Life NutritionEBITDA 1,076€ 1,209€ 1,248€ 1,318€ 1,403€ 1,492€ 1,587€ Valuation Multiple 14.0x 14.0x 14.0x 14.0x 14.0x 14.0x 14.0x Segment Value 15,066 16,923 17,472 18,447 19,638 20,893 22,217

Medical NutritionEBITDA 337€ 369€ 386€ 415€ 445€ 478€ 512€ Valuation Multiple 14.0x 14.0x 14.0x 14.0x 14.0x 14.0x 14.0x Segment Value 4,716 5,168 5,410 5,809 6,236 6,689 7,171

WhiteWaveEBITDA 726€ 898€ 1,079€ 1,189€ 1,310€ Valuation Multiple 14.0x 14.0x 14.0x 14.0x 14.0x Segment Value 10,158 12,572 15,105 16,648 18,339

Total Private Market Value 44,246€ 46,085€ 58,030€ 63,302€ 68,991€ 73,810€ 78,909€ Less: Net Debt (6,938) (7,471) (18,416) (17,410) (16,185) (14,710) (12,971) Less: Put Options (699) (699) (699) (699) (699) (699) (699) Less: Options Payments (42) (48) (54) (88) (126) (161) (199) Less: Minority Interest (37) (37) (37) (37) (37) (37) (37) Plus: Equity investments 2,409 2,409 2,409 2,409 2,409 2,409 2,409 Equity Private Market Value 38,940€ 40,239€ 41,233€ 47,478€ 54,352€ 60,611€ 67,412€

Shares outstanding 615 616 616 616 616 616 616 PMV per share 63€ 65€ 67€ 77€ 88€ 98€ 109€ Current discount to PMV 1.4% 4.4% 6.7% 18.9% 29.2% 36.5% 42.9%

Source: Company f ilings, Gabelli & Company estimates.

Danone Price Performance

Source: Public data. As of March 6, 2014 BN had a BUY recommendation

Other Companies Mentioned: WhiteWave Foods (WWAV – NASDAQ)

March 6, 2017

-11-


General Mills, Inc. Earnings Model2014 - 2021P

Fiscal year end 5/31 2014 2015 2016 2017E 2018P 2019P 2020P 2021P CAGR($ in millions, except per share) '16-'21PRevenue 17,910$ 17,630$ 16,563$ 15,820$ 15,892$ 16,270$ 16,661$ 17,066$ 0.6 %% Growth 0.8% -1.6% -6.1% -4.5% 0.5% 2.4% 2.4% 2.4% `

EBITDA 3,495 3,396 3,392 3,455 3,610 3,765 3,938 4,121 4.0 Margin 19.5% 19.3% 20.5% 21.8% 22.7% 23.1% 23.6% 24.1%

EPS, cont ops 2.83$ 2.86$ 2.92$ 3.05$ 3.25$ 3.50$ 3.70$ 3.95$ 6.3 % Growth 5.2% 1.1% 2.2% 4.9% 6.4% 6.6% 6.8% 6.8%

TEV/EBITDA Multiple 12.7x 13.1x 13.1x 12.9x 12.3x 11.8x 11.3x 10.8xP/E Multiple 21.5 21.2 20.8 19.8 18.6 17.5 16.3 15.3


General Mills, Inc. (GIS - $60.73 - NYSE) Buy FYE 5/31 EPS P/E PMV 2019P $3.50 17.5x $76 Dividend: $1.92 Current Return: 3.2% 2018P 3.25 18.6 72 Shares O/S: 580 million 2017E 3.05 19.8 68 52-Week Range: $72.95 - $58.70 2016A 2.92 20.8 --

COMPANY OVERVIEW General Mills is a leading producer of packaged foods based in Minneapolis, MN. Its diverse portfolio includes leading brands, such as Cheerios, Yoplait yogurt, Pillsbury refrigerated dough, Betty Crocker baked goods, Nature Valley snack bars and Progresso soup. GIS also owns a 51% stake in Yoplait SAS and 50% stakes in two major unconsolidated joint ventures, Cereal Partners Worldwide (CPW) and the Haagen-Dazs business in Japan.

HIGHLIGHTS • General Mills opened the conference following its announcement on the Friday before that it was reducing its

full year outlook for 2017, as sales are expected to decline 4% (previously down 3-4%) and earnings per share to grow 5-7% (previously +6-8%). The earnings guidance includes a lower than anticipated tax rate which is compensating for the lower revenue and profit growth.

• US category trends remain challenging, particularly across two of its largest businesses: cereal is declining low-single digits while the yogurt category is down 3% fiscal year to date. Meanwhile, General Mills’ trends in yogurt remain dismal, as sales are down 18%, due to competitive pricing, reductions in brand support and lack of innovation across key trends. Although it will take more time, the need to stabilize this business is imperative given Yoplait’s #2 global position in the attractive $78 billion global category.

• Through several initiatives, including Holistic Margin Management and recent restructuring projects such as Project Century, Catalyst and Compass, GIS expects to realize cumulative cost savings of $700 million by 2018 by streamlining the supply chain, reducing overhead and combining operating functions in order to reinvest in the business, as well as to improve profitability. The savings are likely to be used to fund reinvestment in growth opportunities, as reductions in promotions and marketing may have exacerbated the revenue declines in key categories. The 20% margin target for 2018 was not reaffirmed by management, which should give the company more flexibility to address near-term issues.

• Management reiterated its long-term targets of low single-digit revenue growth and mid-single digit operating profit growth, which coupled with 2% net share repurchases and 2-3% dividend yield resulting in double-digit total shareholder return.

RECOMMENDATION General Mills is focused on its five global platforms to generate revenue growth, while profit improvement is derived from mix and savings initiatives, such as holistic margin management initiatives, overhead reductions and capacity rationalization. GIS will also benefit as it utilizes its increased local and international scale, including the acquisitions of Annie’s and Yoki, and refocuses on accelerating growth through new product innovation and brand support. We expect the combination of the company’s profit improvement initiatives to drive mid to high single-digit EPS growth long-term, which includes share repurchases absent acquisitions. Shares trade at 12.3x estimated EBITDA and 18.6x earnings for the year ending May 2018 plus yield a current return of 3.2%. We calculate a PMV of $72 per share, as GIS may be an attractive acquisition target, based on fiscal 2018 estimates.

Table 1

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General Mills, Inc. Private Market Value Analysis2016 - 2021P

(in millions, except per share data)

Fiscal year end 5/31 2016 2017E 2018P 2019P 2020P 2021PU.S. Retail

Revenue 10,007 9,386 9,330 9,490 9,654 9,822 Operating Profit 2,179 2,216 2,249 2,306 2,374 2,445

Convenience Stores & FoodserviceRevenue 1,924$ 1,856$ 1,879$ 1,917$ 1,955$ 1,994$ Operating Profit 379 405 413 427 442 457

InternationalRevenue 4,632$ 4,578$ 4,682$ 4,863$ 5,052$ 5,249$ Operating Profit 441 406 518 602 692 787

Private Market Value Revenue 16,563$ 15,820$ 15,892$ 16,270$ 16,661$ 17,066$ Operating Profit 2,784 2,839 2,987 3,138 3,305 3,481 D&A 608 616 623 627 633 639 EBITDA 3,392 3,455 3,610 3,765 3,938 4,121 Valuation Multiple 14.0x 14.0x 14.0x 14.0x 14.0x 14.0x

Total Private Market Value 47,482$ 48,369$ 50,540$ 52,712$ 55,133$ 57,690$

Less: Net Debt (7,667)$ (8,642)$ (8,714)$ (8,827)$ (8,994)$ (9,231)$ Less: Minority & Redeemable Interests (1,223) (1,147) (1,147) (1,147) (1,147) (1,147) Less: Option Payment (a) (771) (811) (908) (1,005) (1,112) (1,224) Plus: Joint Ventures 1,529 1,647 1,711 1,776 1,843 1,911 Equity Private Market Value 39,351$ 39,417$ 41,483$ 43,509$ 45,722$ 47,999$

Shares Outstanding 597 582 576 570 564 558 PMV per share $66 $68 $72 $76 $81 $86Current Market - Discount to PMV 8% 10% 16% 20% 25% 29%(a) After-tax payments to buy out options holders at Private Market Value.


Table 2



ONE CORPORATE CENTER RYE, NY 10580 GABELLI & COMPANY TEL (914) 921-5130 FAX (914) 921-5098 Gabelli & Company is the marketing name for the registered broker dealer G.research, LLC, which was formerly known as G.research, Inc., Gabelli & Company ("we" or "us") attempts to provide timely, value-added insights into companies or industry dynamics for institutional investors. Our research reports generally contain a recommendation of "buy," "hold," "sell" or "non-rated.” We do not undertake to "upgrade" or "downgrade" ratings after publishing a report. We currently have reports on 607 companies, of which 47%, 35%, 3% and 14% have a recommendation of buy, hold, sell or non-rated, respec-tively. The percentage of companies so rated for which we provided investment banking services within the past 12 months is 0%, 0%, 0% and less than 1%. Ratings Analysts’ ratings are largely (but not always) determined by our “private market value,” or PMV methodology. Our basic goal is to understand in absolute terms what a rational, strategic buyer would pay for an asset in an open, arms-length transaction. At the same time, analysts also look for underlying catalysts that could encourage those private market values to surface. A Buy rated stock is one that in our view is trading at a meaningful discount to our estimated PMV. We could expect a more modest private market value to increase at an accelerated pace, the discount of the public stock price to PMV to narrow through the emergence of a catalyst, or some combination of the two to occur. A Hold is a stock that may be trading at or near our estimated private market value. We may not anticipate a large increase in the PMV, or see some other factors at work. A Sell is a stock that may be trading at or above our estimated PMV. There may be little upside to the value, or limited opportunity to realize the value. Economic or sector risk could also be increasing. We prepared this report as a matter of general information. We do not intend for this report to be a complete description of any security or company and it is not an offer or solicitation to buy or sell any se-curity. All facts and statistics are from sources we believe to be reliable, but we do not guarantee their accuracy. We do not undertake to advise you of changes in our opinion or information. Unless oth-erwise noted, all stock prices reflect the closing price on the business day immediately prior to the date of this report. We do not use "price targets" predicting future stock performance. We do refer to "pri-vate market value" or PMV, which is the price that we believe an informed buyer would pay to acquire 100% of a company. There is no assurance that there are any willing buyers of a company at this price and we do not intend to suggest that any acquisition is likely. Additional information is available on request. As of January 31, 2017 our affiliates beneficially own on behalf of their investment advisory clients or otherwise approximately less than 1% of GIS. Because the portfolio managers at our affiliates make individual investment decisions with respect to the client accounts they manage, these accounts may have transactions inconsistent with the recommendations in this report. These portfolio managers may know the substance of our research reports prior to their publication as a result of joint participation in research meetings or otherwise. No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this research report. In addition, the undersigned lead analyst(s) has not and will not receive any compensation for providing a specific rec-ommendation or view in this report. The analyst that wrote this report, or members of her household, owns no shares of the above mentioned companies.

General Mills – Price Performance

Source: Public data. As of March 6, 2014 GIS had a BUY recommendation

-13-


March 6, 2017

International Flavors & Fragrances Earnings M odel2014 - 2021P

Fiscal year ended 12/31 2014 2015 2016 2017E 2018P 2019P 2020P 2021P CAGR

($ in millions, except per share)

Revenue 3,089$ 3,023$ 3,116$ 3,274$ 3,424$ 3,581$ 3,746$ 3,919$ 4.7 %% Growth 4.6% -2.1% 3.1% 5.0% 4.6% 4.6% 4.6% 4.6%

EBITDA 686 702 722 763 813 864 917 975 6.2 Margin 22.2% 23.2% 23.2% 23.3% 23.7% 24.1% 24.5% 24.9%



CapEx 143 101 126 153 153 141 137 143


International Flavors & Fragrances Inc. (IFF - $125.13 - NYSE) Hold Year EPS P/E PMV 2019P $6.95 17.9x $163 Dividend: $2.56 Current Return: 2.0% 2018P 6.40 19.5 150 Shares O/S: 79.4 million 2017E 5.85 21.4 137 52-Week Range: $143.64 - $104.60 2016A 5.51 22.7 --

COMPANY OVERVIEW International Flavors & Fragrances Inc., based in New York, is a leading global supplier of flavor and fragrance systems and ingredients used in food, beverage, and personal and household care products. In 2017, we expect IFF to generate revenue of $3.3 billion, EBITDA of $763 million and earn $5.85 per share.

HIGHLIGHTS • IFF competes in the estimated $20 billion flavor and fragrance industry, which is growing approximately 2-3%

annually. The company supplies not only the flavors and fragrances, which typically represents 1-5% of the cost of the final product, but also provides consumer insights, research and development and regulatory expertise, which are integral to collaborating with customers to develop and to launch new products. Core strategy remains: strengthen innovation platform; lead in key markets, categories and customers; execution with excellence and expand the portfolio through acquisitions and collaborations.

• IFF has recently completed several acquisitions adding cosmetic actives to its portfolio as well as enhancing its scale in the US and with faster-growing small and mid-sized customers. Meanwhile, its investments in new technologies such as encapsulation and modulation now account for approximately 10% of the portfolio and continue to grow at a robust double-digit pace.

• 2017 Outlook: Revenue growth of 5-6%, including 2.5% from recent acquisitions, operating profit +3.5-4.5%, as profitability is constrained by higher incentive compensation (-3.5%) and unfavorable currency (-2%). Consequently 2017 earnings guidance of +4-5% is below its long-term target; however, management reaffirmed its commitment to returning to its long-term financial growth targets in 2018, excluding any impact from currency.

• Long term currency-neutral financial objectives include revenue growth of 4-6%, operating profit +7-9% and EPS of +10%. At current rates, 2018 will be negatively impacted by the Euro due to IFF’s hedge positions (approximately 70% at $1.12) compared to today’s rate of $1.06. The company is a strong cash generator with opportunities for further improvement as earnings revert to its long-term targets, capital expenditures moderate and working capital metrics improve. We expect management to pursue additional acquisition opportunities to further enhance its growth rate as the company looks to supplement its technology, geographic reach and or/expands into relevant adjacencies.

RECOMMENDATION IFF is expected to continue to benefit from favorable demographic trends, including the growing middle class in emerging markets, which will drive the development and expansion of packaged good categories and the trends towards health and wellness. Over the next five years, we expect IFF to generate high single-digit earnings growth. Our estimates include continued share repurchases and unfavorable currency, but exclude additional acquisitions, which may further enhance the growth rate as the company looks to supplement its technology, geographic and customer reach and/or expansion into relevant adjacencies. IFF remains a Hold, as shares trade at 14.5x 2017E EBITDA and 21.4 x P/E. We calculate a PMV of $150 per share based on 2018 estimates.

Table 1

-14-

International Flavors & FragrancesPrivate Market Value Analysis

2016 - 2021PFYE 12/31 2016 2017E 2018P 2019P 2020P 2021P($ in millions, except per share) Flavors

Revenue 1,497$ 1,583$ 1,663$ 1,744$ 1,829$ 1,919$ EBITDA 388 411 438 461 486 511Valuation Multiple 16x 16x 16x 16x 16x 16xSegment Value 6,212$ 6,568$ 7,013$ 7,381$ 7,770$ 8,182$

FragrancesRevenue 1,620$ 1,690$ 1,760$ 1,837$ 1,917$ 2,000$ EBITDA 380 407 431 461 493 527Valuation Multiple 16x 16x 16x 16x 16x 16xSegment Value 6,084$ 6,505$ 6,890$ 7,375$ 7,891$ 8,439$

CorporateCorp expense (46)$ (54)$ (56)$ (59)$ (61)$ (64)$ Valuation Multiple 16x 16x 16x 16x 16x 16xSegment Value (735)$ (863)$ (901)$ (940)$ (981)$ (1,024)$

Total Private Market Value 11,560$ 12,210$ 13,003$ 13,816$ 14,680$ 15,597$ Less: Net Debt (1,001) (1,124) (1,005) (848) (671) (475)Less: Options Payments (a) (234) (247) (269) (293) (319) (347)Equity Private Market Value 10,325$ 10,839$ 11,728$ 12,675$ 13,690$ 14,775$

Shares Outstanding 79.4 78.9 78.4 77.9 77.4 76.9 PMV per share $130 $137 $150 $163 $177 $192Current Market - Discount to PMV 4% 10% 20% 30% 42% 54%

(a) After-tax payments to buy out options holders at Private Market Value.Source: Company data and Gabelli & Company estimates.

Table 2



ONE CORPORATE CENTER RYE, NY 10580 GABELLI & COMPANY TEL (914) 921-5130 FAX (914) 921-5098 Gabelli & Company is the marketing name for the registered broker dealer G.research, LLC, which was formerly known as G.research, Inc., Gabelli & Company ("we" or "us") attempts to provide timely, value-added insights into companies or industry dynamics for institutional investors. Our research reports generally contain a recommendation of "buy," "hold," "sell" or "non-rated.” We do not undertake to "upgrade" or "downgrade" ratings after publishing a report. We currently have reports on 607 companies, of which 47%, 35%, 3% and 14% have a recommendation of buy, hold, sell or non-rated, respectively. The percentage of companies so rated for which we provided investment banking services within the past 12 months is 0%, 0%, 0% and less than 1%. Ratings Analysts’ ratings are largely (but not always) determined by our “private market value,” or PMV methodology. Our basic goal is to understand in absolute terms what a rational, strategic buyer would pay for an asset in an open, arms-length transaction. At the same time, analysts also look for underlying catalysts that could encourage those private market values to surface. A Buy rated stock is one that in our view is trading at a meaningful discount to our estimated PMV. We could expect a more modest private market value to increase at an accelerated pace, the discount of the public stock price to PMV to narrow through the emergence of a catalyst, or some combination of the two to occur. A Hold is a stock that may be trading at or near our estimated private market value. We may not anticipate a large increase in the PMV, or see some other factors at work. A Sell is a stock that may be trading at or above our estimated PMV. There may be little upside to the value, or limited opportunity to realize the value. Economic or sector risk could also be increasing. We prepared this report as a matter of general information. We do not intend for this report to be a complete description of any security or company and it is not an offer or solicitation to buy or sell any security. All facts and statistics are from sources we believe to be reliable, but we do not guarantee their accuracy. We do not undertake to advise you of changes in our opinion or information. Unless otherwise noted, all stock prices reflect the closing price on the business day immediately prior to the date of this report. We do not use "price targets" predicting future stock performance. We do refer to "private market value" or PMV, which is the price that we believe an informed buyer would pay to acquire 100% of a company. There is no assurance that there are any willing buyers of a company at this price and we do not intend to suggest that any acquisition is likely. Additional information is available on request. As of January 31, 2017 our affiliates beneficially own on behalf of their investment advisory clients or otherwise 1.80% of IFF. Because the portfolio managers at our affiliates make individual investment decisions with respect to the client accounts they manage, these accounts may have transactions inconsistent with the recommendations in this report. These portfolio managers may know the substance of our research reports prior to their publication as a result of joint participation in research meetings or otherwise. No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this research report. In addition, the undersigned lead analyst(s) has not and will not receive any compensation for providing a specific recommendation or view in this report. The analyst, who wrote this report, or members of her household, owns no shares of International Flavors & Fragrances.

IFF - Price Performance

Source: Public data. As of March 6, 2014 IFF had a BUY recommendation and changed to a HOLD on August 10, 2016

-15-


March 6, 2017

J.M . Smucker Company Earnings M odelCY2014 - CY2020P

Fiscal year end 4/30* 2014 2015 2016E 2017P 2018P 2019P 2020P CAGR12 17P($ in millions, except per share)

Revenue 5,693$ 7,811$ 7,362$ 7,508$ 7,508$ 7,674$ 7,841$ 0.5 %% Growth 1.5% 37.2% -5.7% 2.0% 2.0% 2.2% 4.4%

EBITDA 1,175 1,686 1,686 1,762 1,812 1,862 1,918 2.6 Margin 20.6% 21.6% 22.9% 23.5% 24.1% 24.3% 24.5%

EPS, cont ops 5.38$ 6.00$ 6.45$ 6.85$ 7.40$ 7.95$ 8.55$ 7.4 % Growth -4.6% 11.6% 7.1% 6.8% 7.6% 7.7% 7.6% 12 17PEPS, excl. amortization 6.10$ 7.23$ 7.60$ 8.05$ 8.60$ 9.15$ 9.80$ 6.2 % Growth -2.8% 18.7% 5.4% 5.8% 6.6% 6.6% 6.8%

TEV/EBITDA Multiple 18.2x 12.7x 12.7x 12.2x 11.8x 11.5x 11.2xP/E Multiple 26.1 23.4 21.9 20.5 19.0 17.7 16.4 P/E Multiple, excl. amort. 23.0 19.4 18.4 17.4 16.3 15.3 14.4 12 17PCapEx 248 201 240 320 320 306 245 *Note: years denoted end April 30th of the following year, i.e. “2016E” ends 4/30/2017Source: Company data and Gabell i & Company estimates.

J.M. Smucker Company (SJM - $140.49 - NYSE) Buy FYE: 4/30 EPS* P/E PMV 2018P $8.60 16.3x $182 Dividend: $3.00 Current Return: 2.1% 2017P 8.05 17.4 169 Shares O/S: 116.4 million 2016E 7.60 18.4 154 52-Week Range: $157.31 - $122.05 2015A 7.23 19.4 --

Note: years denoted end April 30th of the following year, i.e. “2016E” ends 4/30/2017.*EPS estimates exclude amortization

COMPANY OVERVIEW The J.M. Smucker Company is the manufacturer and marketer of Smucker’s fruit spreads and dessert toppings, Jif peanut butter, Folgers coffee, Crisco oils and shortening, Pillsbury mixes and frosting, Hungry Jack syrup and mixes, and other grocery items. Over the last decade, Smucker made several acquisitions diversifying its product assortment while increasing its scale in North America.

HIGHLIGHTS • Management reviewed its strategy and highlighted its portfolio of leading brands in large and growing

categories, such as coffee (27% market share in $9.5 billion category), nut butters (37% share, $2.4 B) and pet food and snacks (39% share, $30 B).

• SJM announced an incremental $100 million cost savings program bringing cumulative savings to $350 million through 2020. The savings will be generated from operational efficiencies, revenue growth management, simplification through SKU rationalization and procurement. The preliminary estimate is for $25-30 million of savings to be realized in the fiscal year ending April 2018.

• Smucker primarily competes in mainstream roast and ground coffee with 55% market share under the Folgers brand. This segment of the category remains under pressure as consumers shift to premium and single-serve coffee, where SJM competes with the Dunkin Donuts and Café Bustelo brands and through its K-cups business. Collectively, these categories have grown 17% over the last five years. Accordingly, this shift and effective management of the business have led to significant profit improvement since it was acquired in 2008, despite low-single digit volume declines. Going forward, management reiterated its commitment to improving the profitability of the K-cup business either through renegotiation of its contract with Keurig or alternative options. Coffee prices have stabilized for the moment, the ICO index price is $1.37 per pound compared to $1.27 in 2016.

• The pet food industry is also undergoing significant shifts as the mainstream pet food segment remains highly price competitive and as consumers shift to premium products. SJM plans to capitalize on this trend through its Natural Balance and Nature’s Recipe brands across the specialty and mass channels. Long-term pet remains an attractive category growing 4% in value.

• 2017 Outlook: Revenue -5% and earnings of $7.60-7.70 per share. The long-term growth targets are unchanged: sales +3%, operating profit +6% and 8% EPS.

RECOMMENDATION We continue to recommend investors Buy SJM based on valuation and the improvement in earnings potential given the acquisition of Big Heart Pet Brands, which diversifies the Smucker portfolio, as pet will generate approximately one-third of sales and EBITDA, diluting some of the earnings impact related to volatility in the coffee business. Shares are trading at 12.2x EBITDA for the fiscal year ending April 2018 (CY2017) and 17.4x P/E. We calculate a PMV of $169 per share, 17% discount to the current share price, based upon estimates for the fiscal year ending April 2018 (CY2017).

Table 1

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Private Market Value Analysis(in millions, except per share data) CY2014 - CY2020PFiscal year end 4/30 2014 2015 2016E 2017P 2018P 2019P 2020P

U.S. Retail CoffeeRevenue 2,076$ 2,239$ 2,072$ 2,115$ 2,190$ 2,264$ 2,340$ EBITDA 652 750 705 717 748 775 803 Valuation Multiple 13.0x 13.0x 13.0x 13.0x 13.0x 13.0x 13.0xSegment Value 8,475$ 9,749$ 9,160$ 9,323$ 9,721$ 10,070$ 10,435$

U.S. Retail Consumer FoodsRevenue 2,331$ 2,270$ 2,090$ 2,123$ 2,150$ 2,179$ 2,209$ EBITDA 519 495 493 510 525 538 554 Valuation Multiple 13.0x 13.0x 13.0x 13.0x 13.0x 13.0x 13.0xSegment Value 6,742$ 6,439$ 6,414$ 6,636$ 6,826$ 6,988$ 7,204$

U.S. Retail Pet FoodsRevenue 2,300$ 2,250$ 2,164$ 2,208$ 2,252$ 2,297$ 2,343$ EBITDA 425 557 553 574 583 597 612 Valuation Multiple 15.0x 15.0x 15.0x 15.0x 15.0x 15.0x 15.0xSegment Value 6,375$ 8,354$ 8,291$ 8,614$ 8,743$ 8,962$ 9,186$

International & FoodserviceRevenue 1,047$ 1,052$ 1,036$ 1,062$ 1,082$ 1,102$ 1,122$ EBITDA 201 223 226 233 239 245 251 Valuation Multiple 13.0x 13.0x 13.0x 13.0x 13.0x 13.0x 13.0xSegment Value 2,614$ 2,899$ 2,933$ 3,035$ 3,106$ 3,182$ 3,261$

CorporateEBITDA (243) (339) (290) (274) (283) (292) (302) Valuation Multiple 13.5x 13.5x 13.5x 13.5x 13.5x 13.5x 13.5xSegment Value (3,279)$ (4,575)$ (3,916)$ (3,694)$ (3,818)$ (3,947)$ (4,079)$

Total Private Market Value 20,927$ 22,865$ 22,882$ 23,915$ 24,578$ 25,255$ 26,007$ Less: Net Debt (6,045) (6,045) (4,952) (4,668) (4,303) (3,907) (3,520) Less: Option Payment (a) (61) (81) (93) (109) (124) (140) (157) Equity Private Market Value 14,820$ 16,739$ 17,837$ 19,138$ 20,152$ 21,208$ 22,331$

Shares Outstanding 116 116 115 113 111 109 106 PMV per share $127 $144 $154 $169 $182 $195 $210Current Market - Discount to PMV -10% 2% 9% 17% 23% 28% 33%

(a) After-tax payments to buy out options holders at Private Market Value.Note: years denoted end April 30th of the following year, i.e. “2016E” ends 4/30/2017Source: Company data and Gabell i & Company estimates.

Table 2



ONE CORPORATE CENTER RYE, NY 10580 GABELLI & COMPANY TEL (914) 921-5130 FAX (914) 921-5098 Gabelli & Company is the marketing name for the registered broker dealer G.research, LLC, which was formerly known as G.research, Inc., Gabelli & Company ("we" or "us") attempts to provide timely, value-added insights into companies or industry dynamics for institutional investors. Our research reports generally contain a recommendation of "buy," "hold," "sell" or "non-rated.” We do not undertake to "upgrade" or "downgrade" ratings after publishing a report. We currently have reports on 607 companies, of which 47%, 35%, 3% and 14% have a recommendation of buy, hold, sell or non-rated, respectively. The percentage of companies so rated for which we provided investment banking services within the past 12 months is 0%, 0%, 0% and less than 1%. Ratings Analysts’ ratings are largely (but not always) determined by our “private market value,” or PMV methodology. Our basic goal is to understand in absolute terms what a rational, strategic buyer would pay for an asset in an open, arms-length transaction. At the same time, analysts also look for underlying catalysts that could encourage those private market values to surface. A Buy rated stock is one that in our view is trading at a meaningful discount to our estimated PMV. We could expect a more modest private market value to increase at an accelerated pace, the discount of the public stock price to PMV to narrow through the emergence of a catalyst, or some combination of the two to occur. A Hold is a stock that may be trading at or near our estimated private market value. We may not anticipate a large increase in the PMV, or see some other factors at work. A Sell is a stock that may be trading at or above our estimated PMV. There may be little upside to the value, or limited opportunity to realize the value. Economic or sector risk could also be increasing. We prepared this report as a matter of general information. We do not intend for this report to be a complete description of any security or company and it is not an offer or solicitation to buy or sell any security. All facts and statistics are from sources we believe to be reliable, but we do not guarantee their accuracy. We do not undertake to advise you of changes in our opinion or information. Unless otherwise noted, all stock prices reflect the closing price on the business day immediately prior to the date of this report. We do not use "price targets" predicting future stock performance. We do refer to "private market value" or PMV, which is the price that we believe an informed buyer would pay to acquire 100% of a company. There is no assurance that there are any willing buyers of a company at this price and we do not intend to suggest that any acquisition is likely. Additional information is available on request. As of January 31, 2017, our affiliates beneficially own on behalf of their investment advisory clients or otherwise less than 1% of Dunkin’ Brands Group and J.M. Smucker. Because the portfolio managers at our affiliates make individual investment decisions with respect to the client accounts they manage, these accounts may have transactions inconsistent with the recommendations in this report. These portfolio managers may know the substance of our research reports prior to their publication as a result of joint participation in research meetings or otherwise. No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this research report. In addition, the undersigned lead analyst(s) has not and will not receive any compensation for providing a specific recommendation or view in this report. The analyst, who wrote this report, or members of her household, owns no shares of J.M. Smucker.

J.M. Smucker - Price Performance

Source: Public data. As of March 6, 2014 SJM had a BUY recommendation.

Other Companies Mentioned: Dunkin’ Brands Group (DNKN – NASDAQ)

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March 6, 2017

Mondelēz International, Inc. Earnings Model2015R - 2021P

Fiscal year end 12/31 2015R 2016 2017E 2018P 2019P 2020P 2021P CAGR($ in millions, except per share) '16-'21PRevenue 26,792$ 25,923$ 25,769$ 26,465$ 27,326$ 28,219$ 29,146$ 2.4 %% Growth -9.8% -3.2% -0.6% 2.7% 3.3% 3.3% 3.3%

EBITDA 4,387 4,776 5,080 5,449 5,767 6,108 6,467 6.2 Margin 16.4% 18.4% 19.7% 20.6% 21.1% 21.6% 22.2%

EPS, cont ops 1.62$ 1.94$ 2.15$ 2.35$ 2.55$ 2.80$ 3.05$ 9.5 % Growth 17.6% 10.2% 10.7% 8.5% 9.1% 8.8%

TEV/EBITDA Multiple 17.7x 16.2x 15.2x 14.2x 13.4x 12.6x 12.0xP/E Multiple 27.0 22.6 20.5 18.5 17.1 15.7 14.4

Source: Company data and Gabelli & Company estimates

Mondelēz International, Inc. (MDLZ - $43.73- NASDAQ) Buy Year EPS P/E PMV 2019P $2.55 17.1x $56 Dividend: $0.76 Current Return: 1.7% 2018P 2.35 18.5 52 Shares O/S: 1,526.6 million 2017E 2.15 20.5 48 52-Week Range: $46.40 - $39.21 2016A 1.94 22.6 --

COMPANY OVERVIEW Mondelēz International, Inc. headquartered in Deerfield, Illinois is the renamed Kraft Foods Inc. following the tax-free spin-off to shareholders on October 1, 2012 of the North American grocery business. Approximately 85% of Mondelēz’s revenue is derived from snacking.

HIGHLIGHTS • Mondelēz competes in the faster-growing $1.2 trillion global snacking market with leading positions in

biscuits, chocolate, candy and gum. Approximately 76% is from outside North America, including 35% from emerging markets. Although category growth has decelerated, over the long-term management expects the rate to accelerate as per capita consumption is highly correlated to GDP growth, consumption is underdeveloped in emerging markets and consumption is expandable, which is expected to benefit MDLZ, as approximately 85% of its revenue is from snacking.

• Management reviewed its strategy: focus on the portfolio (emphasize snacks, bolt-on acquisitions and selected divestures), reduce costs (zero-based budgeting, supply chain reinvention, global shared services) and invest for growth (innovation, distribution and expansion into whitespace). Improvement will also come from contemporizing not only the portfolio but the company’s analytics to include more real-time data, dynamic pricing capabilities and improving digital and in-store execution.

• Well-being was a prominent topic this year at CAGNY and expands upon health & wellness to trends such as free-from (allergens, GMO or artificial ingredients) foods to ethically-sourced and/or sustainable ingredients. To capitalize on these trends Mondelēz introduced a new brand, Vea, which will launch its first product in July, a savory grain-based herb cracker.

• 2017 Outlook: organic growth of at least 1%, operating margin mid-16% and double-digit earnings growth, excluding the impact of unfavorable currency, which is estimated to reduce earnings by approximately $0.03 per share. It reaffirmed its target of 17-18% operating margins in 2018. In 2017, MDLZ should generate approximately $2 billion of free cash flow, which should accelerate in 2018 and beyond as capital expenditures and cash restructuring costs moderate.

RECOMMENDATION Mondelēz is a global leader within snacking, including biscuits and confectionery, which have inherently faster growth rates and attractive margins. As a result of higher revenue growth and margin improvement initiatives, the company is expected to generate industry-leading results over the next five years, including high single-digit operating profit and double-digit EPS growth, excluding currency. This growth trajectory, coupled with strong free cash flow and balance sheet validates a premium valuation compared to its peers. MDLZ remains a Buy, as shares trade at 15.2x 2017E EBITDA and 20.5x earnings, we calculate a PMV of $52 per share based on 2018 estimates.

Table 1

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Mondelēz International, Inc.Private Market Value Analysis

2016 - 2021PFYE 12/31 2016 2017E 2018P 2019P 2020P 2021P($ in millions, except per share)

North AmericaRevenue 6,960$ 6,824$ 7,008$ 7,220$ 7,438$ 7,662$ EBITDA 1,574 1,650 1,737 1,831 1,932 2,037Valuation Multiple 15.5x 15.5x 15.5x 15.5x 15.5x 15.5xSegment Value 24,397$ 25,573$ 26,923$ 28,382$ 29,944$ 31,579$

InternationalRevenue 18,963$ 18,945$ 19,457$ 20,106$ 20,781$ 21,484$ EBITDA 3,415 3,650 3,938 4,169 4,416 4,676Valuation Multiple 15.5x 15.5x 15.5x 15.5x 15.5x 15.5xSegment Value 52,933$ 56,571$ 61,040$ 64,619$ 68,441$ 72,482$

Corporate (213) (219) (226) (233) (240) (247)

Total Private Market Value 77,330$ 82,144$ 87,963$ 93,001$ 98,385$ 104,060$ Less: Net Debt (15,458) (15,125) (15,175) (14,948) (14,600) (14,116)Less: Minority Interest (54) (54) (54) (54) (54) (54)Less: Options Payments (a) (1,012) (1,190) (1,391) (1,581) (1,785) (2,002)Hidden Assets: 5,585 5,585 5,585 5,585 5,585 5,585Equity Private Market Value 66,390$ 71,360$ 76,928$ 82,004$ 87,531$ 93,474$

Shares Outstanding 1,527 1,502 1,478 1,456 1,436 1,419 PMV per share $43 $48 $52 $56 $61 $66Current Market - Discount to PMV -1% 8% 16% 22% 28% 34%

(a) After-tax payments to buy out options holders at Private Market Value.Source: Company data and Gabelli & Company estimates.

Table 2



ONE CORPORATE CENTER RYE, NY 10580 GABELLI & COMPANY TEL (914) 921-5130 FAX (914) 921-5098 Gabelli & Company is the marketing name for the registered broker dealer G.research, LLC, which was formerly known as G.research, Inc., Gabelli & Company ("we" or "us") attempts to provide timely, value-added insights into companies or industry dynamics for institutional investors. Our research reports generally contain a recommendation of "buy," "hold," "sell" or "non-rated.” We do not undertake to "upgrade" or "downgrade" ratings after publishing a report. We currently have reports on 607 companies, of which 47%, 35%, 3% and 14% have a recommendation of buy, hold, sell or non-rated, respectively. The percentage of companies so rated for which we provided investment banking services within the past 12 months is 0%, 0%, 0% and less than 1%. Ratings Analysts’ ratings are largely (but not always) determined by our “private market value,” or PMV methodology. Our basic goal is to understand in absolute terms what a rational, strategic buyer would pay for an asset in an open, arms-length transaction. At the same time, analysts also look for underlying catalysts that could encourage those private market values to surface. A Buy rated stock is one that in our view is trading at a meaningful discount to our estimated PMV. We could expect a more modest private market value to increase at an accelerated pace, the discount of the public stock price to PMV to narrow through the emergence of a catalyst, or some combination of the two to occur. A Hold is a stock that may be trading at or near our estimated private market value. We may not anticipate a large increase in the PMV, or see some other factors at work. A Sell is a stock that may be trading at or above our estimated PMV. There may be little upside to the value, or limited opportunity to realize the value. Economic or sector risk could also be increasing. We prepared this report as a matter of general information. We do not intend for this report to be a complete description of any security or company and it is not an offer or solicitation to buy or sell any security. All facts and statistics are from sources we believe to be reliable, but we do not guarantee their accuracy. We do not undertake to advise you of changes in our opinion or information. Unless otherwise noted, all stock prices reflect the closing price on the business day immediately prior to the date of this report. We do not use "price targets" predicting future stock performance. We do refer to "private market value" or PMV, which is the price that we believe an informed buyer would pay to acquire 100% of a company. There is no assurance that there are any willing buyers of a company at this price and we do not intend to suggest that any acquisition is likely. Additional information is available on request. As of January 31, 2017, our affiliates beneficially own on behalf of their investment advisory clients or otherwise less than 1% of Mondelēz International. Because the portfolio managers at our affiliates make individual investment decisions with respect to the client accounts they manage, these accounts may have transactions inconsistent with the recommendations in this report. These portfolio managers may know the substance of our research reports prior to their publication as a result of joint participation in research meetings or otherwise. No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this research report. In addition, the undersigned lead analyst(s) has not and will not receive any compensation for providing a specific recommendation or view in this report. The analyst, who wrote this report, or members of her household, owns no shares Mondelēz.

Mondelēz International - Price Performance

Source: Public data. As of March 6, 2014 MDLZ had a BUY recommendation.

March 6, 2017

-19-

Newell Brands (NWL - $49.34 - NYSE) Buy Year EPS P/E PMV 2019P $4.05 12.2x $82 Dividend: $0.76 Current Return: 1.5% 2018P 3.60 13.7 72 Shares O/S: 482.4 million 2017E 3.05 16.2 59 52-Week Range: $55.45 - $38.13 2016A 2.89 17.1 ---

COMPANY OVERVIEW Headquartered in Hoboken, New Jersey, Newell Brands is a leading player in the consumer durable and discretionary space with a highly-diversified portfolio of iconic brands, including Sharpie, Rubbermaid, Graco, Yankee Candle and Mr. Coffee. It is the rebranded Newell Rubbermaid after its merger with Jarden on April 15, 2016. Jarden nearly triples legacy Newell Rubbermaid’s size, making it the fourth- largest competitor in its peer group. In 2017, Newell Brands is expected to generate revenue of $14.6 billion, EBITDA of $2.9 billion, and earnings of $3.05 per share.

HIGHLIGHTS • Newell Brands competes in a fragmented $65 billion subset of the fast-moving consumer goods (FMCG) market,

growing 2-3%. On average, the top-three companies control 38% of the market in its categories (vs. 75% average for FMCG), suggesting outsized opportunities for share gains and acquisitions. Management intends to progress on both fronts by leveraging its new infrastructure to build scale in key categories and geographies and complementing its accelerating organic growth agenda with M&A.

• After identifying additional productivity savings in the supply chain and distribution network, Newell Brands is doubling its synergy target to $1 billion by 2021. The incremental $500 million in synergies will be realized from mid-2018 to 2021, of which we estimate ~55% will flow to margin and the remainder reinvested back into the business to stimulate top line growth, expanding EBITDA margins by 570 bps to 24.6% in 2021.

• Management reaffirmed 2017 guidance of 2.5-4.0% pro forma core sales growth and $2.95-3.15 EPS, as well as introduced 2018-2021 guidance of 3-5% core sales growth and double-digit EPS growth. E-commerce is expected to contribute to 50% of the growth, increasing to 20% of global revenue by 2021.

• NWL expects operating cash flow of $10 billion in 2017-2021. The company plans to pay out $2.6 billion in dividends, invest $2.4 billion in capital expenditures, repurchase $500 million shares, and pay down $4 billion in debt. Following deleveraging to 3.5x by the end of 2017, NWL will have the financial flexibility to make larger acquisitions in its win-bigger businesses, a critical component to NWL’s long-term strategy. By 2021, NWL will have $7.5 billion in available cash and standalone debt capacity.

RECOMMENDATION Newell Brands shares currently trade at 11.9x EBITDA and 16.2x 2017E earnings, undervaluing the company’s above industry organic growth profile and strong management team with a successful track record of creating shareholder value. We may see further earnings upside if the company acquires new businesses. We calculate a 2018 Private Market Value of $72 per share and reaffirm our Buy recommendation.

Table 1 Newell Brands Earnings Model 2014-2021P


Fiscal year end 12/31 2014 2015 2016A 2017E 2018P 2019P 2020P 2021P CAGR(in millions, except per share data) '17-'21PRevenue 5,727$ 5,916$ 13,264$ 14,629$ 14,730$ 15,324$ 15,946$ 16,595$ 3.2 %% Growth 2.1% 3.3% 124.2% 10.3% 0.7% 4.0% 4.1% 4.1%

EBITDA 949 1,020 2,502 2,876 3,282 3,537 3,796 4,081 9.1 Margin 16.6% 17.2% 18.9% 19.7% 22.3% 23.1% 23.8% 24.6%



CapEx 160 211 441 475 414 431 450 469 Source: Company data and Gabelli & Company estimates.Note: 2017 estimates include Smith Mountain acquisition completed on 1/13/17, assume Sistema Plastics acquisition completed on 6/30/2017 and assume the tools and consumer storage divestitures completed on 3/31/17 and all other divestitures (including skis, heaters, humidifiers and fire logs) on 6/30/17.

Gabelli & Company

- 20 -

Table 2 Newell Brands Private Market Value Analysis

2017P-2021P

(a) After-tax payments to buy out options holders at Private Market Value. Source: Public filings and Gabelli & Company estimates

I, Zamane Bodini, the Research Analyst who prepared this report, hereby certify that the views expressed in this report accurately reflect the analyst’s personal views about the subject companies and their securities. The Research Analyst has not been, is not and will not be receiving direct or indirect compensation for expressing the specific recommendation or view in this report.

Zamane Bodini (914) 921-5284 © Gabelli & Company 2017 Important Disclosures

ONE CORPORATE CENTER RYE, NY 10580 GABELLI & COMPANY TEL (914) 921-5284 FAX (914) 921-5098 .Gabelli & Company is the marketing name for the registered broker dealer G.research, LLC, which was formerly known as G.research, Inc., Gabelli & Company ("we" or "us") attempts to provide timely, value-added insights into companies or industry dynamics for institutional investors. Our research reports generally contain a recommendation of "buy," "hold," "sell" or "non-rated.” We do not undertake to "upgrade" or "downgrade" ratings after publishing a report. We currently have reports on 607 companies, of which 47%, 35%, 3% and 14% have a recommendation of buy, hold, sell or non-rated, respectively. The percentage of companies so rated for which we provided investment banking services within the past 12 months is 0%, 0%, 0% and less than 1%. Ratings Analysts’ ratings are largely (but not always) determined by our “private market value,” or PMV methodology. Our basic goal is to understand in absolute terms what a rational, strategic buyer would pay for an asset in an open, arms-length transaction. At the same time, analysts also look for underlying catalysts that could encourage those private market values to surface. A Buy rated stock is one that in our view is trading at a meaningful discount to our estimated PMV. We could expect a more modest private market value to increase at an accelerated pace, the discount of the public stock price to PMV to narrow through the emergence of a catalyst, or some combination of the two to occur. A Hold is a stock that may be trading at or near our estimated private market value. We may not anticipate a large increase in the PMV, or see some other factors at work. A Sell is a stock that may be trading at or above our estimated PMV. There may be little upside to the value, or limited opportunity to realize the value. Economic or sector risk could also be increasing. We prepared this report as a matter of general information. We do not intend for this report to be a complete description of any security or company and it is not an offer or solicitation to buy or sell any security. All facts and statistics are from sources we believe to be reliable, but we do not guarantee their accuracy. We do not undertake to advise you of changes in our opinion or information. Unless otherwise noted, all stock prices reflect the closing price on the business day immediately prior to the date of this report. We do not use "price targets" predicting future stock performance. We do refer to "private market value" or PMV, which is the price that we believe an informed buyer would pay to acquire 100% of a company. There is no assurance that there are any willing buyers of a company at this price and we do not intend to suggest that any acquisition is likely. Additional information is available on request. As of January 31, 2017, our affiliates beneficially own on behalf of their investment advisory clients or otherwise approximately less than 1% of Newell Because the portfolio managers at our affiliates make individual investment decisions with respect to the client accounts they manage, these accounts may have transactions inconsistent with the recommendations in this report. These portfolio managers may know the substance of our research reports prior to their publication as a result of joint participation in research meetings or otherwise. The analyst who wrote this report may receive commissions from our customers' transactions in the securities mentioned in this report. Our affiliates may receive compensation from the companies referred to in this report for non-investment banking securities-related services, or may be soliciting these companies as clients for non-investment banking securities-related services. The analyst who wrote this report, or members of her household, owns no shares of Newell Brands.

FYE 12/31 2017P 2018P 2019P 2020P 2021P($ in millions, except per share)

Writing Revenue 2,015$ 2,136$ 2,264$ 2,400$ 2,543$ EBITDA 543 582 624 669 716 Valuation Multiple 15.0x 15.0x 15.0x 15.0x 15.0xSegment Value 8,149 8,734 9,360 10,029 10,745

Home SolutionsRevenue 1,497$ 1,598$ 1,646$ 1,695$ 1,746$ EBITDA 277 300 316 329 343 Valuation Multiple 12.0x 12.0x 12.0x 12.0x 12.0xSegment Value 3,319 3,598 3,788 3,947 4,111

Baby & ParentingRevenue 950$ 978$ 1,007$ 1,038$ 1,069$ EBITDA 157 166 176 184 192 Valuation Multiple 12.0x 12.0x 12.0x 12.0x 12.0xSegment Value 1,889 1,997 2,112 2,208 2,307

Commercial ProductsRevenue 789$ 828$ 870$ 913$ 959$ EBITDA 154 165 177 188 199 Valuation Multiple 12.0x 12.0x 12.0x 12.0x 12.0xSegment Value 1,851 1,984 2,126 2,255 2,393

ToolsRevenue 209$ 33$ 34$ 35$ 36$ EBITDA 28 5 5 5 5 Valuation Multiple 13.0x 13.0x 13.0x 13.0x 13.0xSegment Value 368 59 61 63 64

Jarden CorpRevenue 9,170$ 9,157$ 9,503$ 9,865$ 10,242$ EBITDA 1,579 1,623 1,725 1,833 1,947 Valuation Multiple 13.0x 13.0x 13.0x 13.0x 13.0xSegment Value 20,532 21,093 22,425 23,831 25,316

SynergiesEBITDA 235$ 534$ 609$ 684$ 775$ Valuation Multiple 13.0x 13.0x 13.0x 13.0x 13.0xSegment Value 3,055 6,947 7,922 8,897 10,075

CorporateEBITDA (152)$ (144)$ (142)$ (141)$ (138)$ Valuation Multiple 10.0x 10.0x 10.0x 10.0x 10.0xSegment Value (1,517) (1,437) (1,423) (1,406) (1,384)

Total Private Market Value 37,647$ 42,975$ 46,370$ 49,824$ 53,628$ Less: Net Debt (8,599) (7,428) (6,115) (4,675) (2,985) Less: Minority Interest 36 36 36 36 36 Less: Options Payments (a) (158) (196) (223) (251) (282) Equity Private Market Value 28,926$ 35,387$ 40,069$ 44,934$ 50,396$

Shares Outstanding 490 489 489 489 489 PMV per share 59$ 72$ 82$ 92$ 103$ Current Market - Discount to PMV 16% 32% 40% 46% 52%

-21-


March 6, 2017

PepsiCo, Inc. (PEP - $110.56 - NYSE) Buy Year EPS P/E PMV 2019P $6.15 18.0x $137 Dividend: $3.01 Current Return: 2.7% 2018P 5.60 19.7 126 Shares O/S: 1,427 million 2017E 5.10 21.7 117 52-Week Range: $110.94 - $98.02 2016A 4.85 22.8 --

COMPANY OVERVIEW PepsiCo Inc. based in Purchase, NY, is a global snacks and non-alcoholic beverages company, with an estimated 30% share of the $102 billion global savory snacks market (Lay’s, Doritos, Cheetos, Ruffles), and a number-two position in the $750 billion global soft drinks market (Pepsi, Mountain Dew, Gatorade, Tropicana). PEP total global sales are split about 53% and 47% between Snacks and Beverages, respectively. About 58.5% of PEP 2016 total sales were derived from the US, with Mexico (5.4% of total sales), Canada (4.3%), Russia (4.2%) and the UK (2.7%) rounding out the company’s top-five markets.

Reason For Comment: PepsiCo North America team comprised of Al Carey, CEO of PepsiCo North America, Kirk Tanner, President of North America Beverages and Vivek Sankaran, President of Frito-Lay North America, presented at this year’s CAGNY event with their presentation focused on three key North America priorities: 1) innovation with focus towards healthier products, 2) serving the customer as “one PepsiCo” and 3) making the Direct Store Delivery (DSD) system more efficient and effective.

• First priority covered was the ongoing transformation of PEP’s portfolio towards healthier offerings through innovation. PEP has stepped up its R&D investments in recent years, with the majority of it resulting in introduction of healthier products. The examples given of healthier beverage products rolled out this year included LIFEWTR, Tropicana Probiotic, Pepsi Zero-Calorie, and lower-calorie soft drinks IZZE and LEMON LEMON, as well as new varieties of ready-to-drink tea. PEP reiterated its appetite for smaller tuck-in acquisitions to supplement its own innovation, and highlighted its recent acquisition of KeVita, a non-dairy probiotic kombucha beverage company that fits well into its portfolio of healthier products. On the snack side PEP highlighted its “Simply” line of non-GMO organic and clean-label snack products that are growing “rapidly”. PEP is also changing how it markets some of these healthier products with this year’s football playoffs, Super Bowl, and the Grammys featuring Mountain Dew Kickstart, LIFEWTR and Pepsi Zero Sugar instead of the usual full-sugar products advertised in the past. PEP’s “helloGoodness” vending machines and coolers containing only the healthier, better-for-you products have seen good results.

• PEP’s second and third priorities focused on highlighting the “power of one” and use of scale with top accounts to better serve them, as well as the opportunity both businesses provide to better serve the growing foodservice business. PEP has recently won the top spot in Kantar Rankings for the first time in addition to garnering Vendor of the Year awards from three of its largest customers. As always, PEP continues to get more efficient, with a lot of opportunity to implement Snacks best practices into beverages.

Investment Case We value PEP’s snacks business at $90 per share and the beverages business at $48 per share which, after deducting $13 per share in net debt, we calculate a 2018P PMV of $126 per share.

Table 1 PepsiCo Earnings Model 2016-2021P

2016 2017E 2018P 2019P 2020P 2021PTotal Revenue 62,799$ 62,848$ 64,682$ 66,721$ 68,840$ 71,044$ 2 %

EBITDA 13,056 13,422 14,131 15,040 16,050 17,133 6 EPS (con't ops) 4.85$ 5.10$ 5.60$ 6.15$ 6.70$ 7.20$ 8 EBITDA Multiple 13.7x 13.3x 12.6x 11.9x 11.1x 10.4xP/E Multiple 22.8 21.7 19.7 18.0 16.5 15.4

Capex 3,040 3,029 3,119 3,220 3,325 3,433 Net Debt 20,820 19,376 17,774 17,526 19,952 22,002 Source: Public fi l ings and Gabell i & Company estimates

CAGR2015-20P

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Table 2 PepsiCo Private Market Value Analysis

2016-2021P


I, Damian A. Witkowski, the Research Analyst who prepared this report, hereby certify that the views expressed in this report accurately reflect the analyst’s personal views about the subject companies and their securities. The Research Analyst has not been, is not and will not be receiving direct or indirect compensation for expressing the specific recommendation or view in this report.

Damian A. Witkowski (914) 921-5022 Gabelli & Company 2017 Important Disclosures

ONE CORPORATE CENTER RYE, NY 10580 GABELLI & COMPANY TEL (914) 921-5130 FAX (914) 921-5098 Gabelli & Company is the marketing name for the registered broker dealer G.research, LLC, which was formerly known as G.research, Inc., Gabelli & Company ("we" or "us") attempts to provide timely, value-added insights into companies or industry dynamics for institutional investors. Our research reports generally contain a recommendation of "buy," "hold," "sell" or "non-rated.” We do not undertake to "upgrade" or "downgrade" ratings after publishing a report. We currently have reports on 607 companies, of which 47%, 35%, 3% and 14% have a recommendation of buy, hold, sell or non-rated, respectively. The percentage of companies so rated for which we provided investment banking services within the past 12 months is 0%, 0%, 0% and less than 1%. Ratings Analysts’ ratings are largely (but not always) determined by our “private market value,” or PMV methodology. Our basic goal is to understand in absolute terms what a rational, strategic buyer would pay for an asset in an open, arms-length transaction. At the same time, analysts also look for underlying catalysts that could encourage those private market values to surface. A Buy rated stock is one that in our view is trading at a meaningful discount to our estimated PMV. We could expect a more modest private market value to increase at an accelerated pace, the discount of the public stock price to PMV to narrow through the emergence of a catalyst, or some combination of the two to occur. A Hold is a stock that may be trading at or near our estimated private market value. We may not anticipate a large increase in the PMV, or see some other factors at work. A Sell is a stock that may be trading at or above our estimated PMV. There may be little upside to the value, or limited opportunity to realize the value. Economic or sector risk could also be increasing. We prepared this report as a matter of general information. We do not intend for this report to be a complete description of any security or company and it is not an offer or solicitation to buy or sell any security. All facts and statistics are from sources we believe to be reliable, but we do not guarantee their accuracy. We do not undertake to advise you of changes in our opinion or information. Unless otherwise noted, all stock prices reflect the closing price on the business day immediately prior to the date of this report. We do not use "price targets" predicting future stock performance. We do refer to "private market value" or PMV, which is the price that we believe an informed buyer would pay to acquire 100% of a company. There is no assurance that there are any willing buyers of a company at this price and we do not intend to suggest that any acquisition is likely. Additional information is available on request. As of January 31, 2017, our affiliates beneficially own on behalf of their investment advisory clients or otherwise less than 1% of PepsiCo. Because the portfolio managers at our affiliates make individual investment decisions with respect to the client accounts they manage, these accounts may have transactions inconsistent with the recommendations in this report. These portfolio managers may know the substance of our research reports prior to their publication as a result of joint participation in research meetings or otherwise. No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this research report. In addition, the undersigned lead analyst(s) has not and will not receive any compensation for providing a specific recommendation or view in this report. The analyst, who wrote this report, or members of his household, owns no shares of the above mentioned companies.

Global Snacks 2016 2017E 2018P 2019P 2020P 2021P

North America Snack Revenue 18,113$ 18,320$ 19,021$ 19,751$ 20,512$ 21,304$ " EBITDA 5,764 6,077 6,346 6,731 7,168 7,623 " Multiple 15 x 15 x 15 x 15 x 15 x 15 x

Segment Value 86,461 91,159 95,196 100,970 107,518 114,350

International Snack Revenue 14,024 13,879 14,316 14,849 15,405 15,983 " EBITDA 2,232 2,221 2,332 2,486 2,663 2,865 " Multiple 15 x 15 x 15 x 15 x 15 x 15 x

Segment Value 33,486 33,308 34,980 37,286 39,940 42,969

Total Global Snacks Value 119,947 124,468 130,176 138,256 147,458 157,319 " Revenue 32,137 32,199 33,337 34,601 35,917 37,287 " EBITDA 7,996 8,298 8,678 9,217 9,831 10,488

25% 26% 26% 27% 27% 28%

Global Beverages

N America Beverages Revenue 21,312 21,396 21,801 22,220 22,654 23,101 " EBITDA 3,807 3,864 4,059 4,261 4,470 4,688 " Multiple 12 x 12 x 12 x 12 x 12 x 12 x

Segment Value 45,680 46,371 48,708 51,132 53,646 56,252

International Beverages Revenue 9,350 9,253 9,544 9,900 10,270 10,656 " EBITDA 1,826 1,817 1,908 2,034 2,179 2,344 " Multiple 12 x 12 x 12 x 12 x 12 x 12 x

Segment Value 21,918 21,802 22,896 24,405 26,142 28,125

Total Global Beverages Value 67,598 68,173 71,604 75,537 79,788 84,377 " Revenue 30,662 30,649 31,345 32,120 32,924 33,757 " EBITDA 5,633 5,681 5,967 6,295 6,649 7,031

18% 19% 19% 20% 20% 21%Corporate EBITDA (573) (556) (514) (471) (429) (386)

Multiple 11.0 x 11.0 x 11.0 x 11.0 x 11.0 x 11.0 xTotal Corporate Value (6,305) (6,117) (5,653) (5,186) (4,717) (4,246)

Total Segments Value 181,240 186,523 196,127 208,607 222,529 237,450 Less: Net Debt (20,820) (19,376) (17,774) (17,526) (19,952) (22,002)

" Options (837) (937) (1,099) (1,300) (1,491) (1,705) " Pension - - - - - -

Equity Market Value 159,583 166,210 177,254 189,780 201,087 213,743 Shares Outstanding (basic) 1,428 1,420 1,410 1,390 1,370 1,350 PMV 112$ 117$ 126$ 137$ 147$ 158$ Discount to PMV 1% 6% 12% 19% 25% 30%PMV by Segment (2) Snacks 81$ 85$ 90$ 97$ 105$ 114$

Beverages 45 46$ 48 52 56 60 Debt (15) (14)$ (13) (13) (15) (16) PMV 112$ 117$ 126$ 137$ 147$ 158$

PepsiCo. - Price Performance

Source: Public data. As of March 6, 2014 PEP had a BUY recommendation

March 6, 2017

-23-


Snyder’s-Lance, Inc. (LNCE - $39.81 - NASDAQ) Buy Year EPS P/E PMV 2019P $1.75 22.7x $50 Dividend: $0.64 Current Return: 1.6% 2018P 1.60 24.8 45 Shares O/S: 96 million 2017E 1.35 29.5 38 52-Week Range: $40.28 - $28.92 2016A 1.11 35.9 ---

COMPANY OVERVIEW Charlotte, NC based Snyder’s-Lance, Inc. is a pure-play manufacturer and distributor of branded snack-food in the United States. The company owns leading brands including Snyder’s of Hanover pretzels, Kettle and Cape Cod kettle-cooked potato chips, Lance sandwich crackers, Pop Secret popcorn, Late July organic tortilla chips, and Pretzel Crisps pretzel chips. LNCE sells its products through both its national network of over 3,000 independently-owned direct-store-distribution (DSD) routes and directly to retailers. The company is currently in the process of integrating its recent acquisition of Diamond Foods, which we expect to generate substantial synergies. We expect Snyder’s-Lance to generate 2017 Revenue, EBITDA, and EPS of $2.3 billion, $340 million, and $1.35, respectively. Our 2018P PMV is $45 per share and grows to $55 per share by 2020P.

HIGHLIGHTS • In its first presentation at the CAGNY conference, Snyder’s-Lance described its journey since the 2010 merger of

Lance, Inc. and Snyder’s of Hanover, which combined two large regional snack companies to create a national distribution platform. Since then, the company has completed four additional acquisitions, and divested both its private brands business and Diamond’s culinary nut business, driving revenues from $1.3 billion in 2011 to $2.1 billion in 2016, and EBIT margins from 4.5% to 8.8%. Today, LNCE owns a leading pure-play branded snack portfolio, as well as the distribution “railroad tracks” to grow both organically and through further acquisitions.

• Organic growth, which management believes it can sustain at 3-5% per year, will be driven primarily by innovation and renovation in the core portfolio and continued distribution gains. Over the past several years, LNCE has successfully relaunched its Cape Cod, Lance, and Snyder’s of Hanover brands with refreshed packaging and new products, supported by increased advertising. These relaunches were highly successful, and all three brands are growing ahead of their categories, gaining share. Following this blueprint, the company highlighted an ambitious innovation slate for 2017, led by its new Wholey Cheese crackers, and also plans to relaunch its recently acquired Pop Secret and Emerald brands, which have underperformed.

• On the cost side, LNCE still has significant room to improve its cost structure relative to CPG peers, and has committed to continuous margin improvement over time. This ambition will be aided by $50-55 million of net cost synergies expected from the acquisition of Diamond Foods, as well as the recent adoption of zero-based budgeting. That said, increasing volumes and leveraging the fixed-costs of the company’s DSD system will be the largest driver of future margin growth, in our view. The mid-point of management’s guidance implies EBIT margins of 10-11% in 2017 (vs. 8.8% in 2016), and we believe that margins can approach the mid-teens over time.

RECOMMENDATION We believe that Snyder’s-Lance owns excellent assets in a snacking category that is benefiting from a long-term con-sumer trend towards more snacking and convenient foods. Its shares trade at an 11% discount to our 2018P PMV of $45 per share, which grows to $55 per share by 2020P, and we expect that demonstrating that it can execute on its organic growth and margin goals will result in that discount narrowing over time. We also continue to believe that, given Snyder’s-Lance’s leading positions in attractive snacking categories and its small size relative to competitors, the com-pany could garner significant interest from strategic acquirers, which limits potential downside in its shares.

Table 1 Snyder’s-Lance Earnings Model 2014-2020P

($ in millions except per share data) Includes 10 Months DMNDFYE 12/31 2014 2015 2016 2017E 2018P 2019P 2020P

Revenue 1,621$ 1,656$ 2,109$ 2,268$ 2,363$ 2,462$ 2,565$ % Growth 2.2% 27.3% 7.5% 4.2% 4.2% 4.2%

EBITDA 174$ 191$ 289$ 341$ 373$ 399$ 426$ % Margin 10.8% 11.5% 13.7% 15.0% 15.8% 16.2% 16.6%% Growth 9.6% 51.0% 18.2% 9.5% 6.8% 6.7%

EPS 0.92$ 1.01$ 1.11$ 1.35$ 1.60$ 1.75$ 1.90$ % Growth 9.5% 9.6% 21.7% 18.7% 9.4% 8.6%

Source: Company reports, Gabelli & Company estimates.

-24-

Table 2 Snyder’s-Lance

Private Market Value Analysis 2015-2020P

I, Joseph A. Gabelli, the Research Analyst who prepared this report, hereby certify that the views expressed in this report accurately reflect the analyst’s personal views about the subject companies and their securities. The Research Analyst has not been, is not and will not be receiving direct or indirect com-pensation for expressing the specific recommendation or view in this report.

Joseph A. Gabelli (914) 921-8331 Gabelli & Company 2017 Important Disclosures

ONE CORPORATE CENTER RYE, NY 10580 GABELLI & COMPANY TEL (914) 921-5130 FAX (914) 921-5098 Gabelli & Company is the marketing name for the registered broker dealer G.research, LLC, which was formerly known as G.research, Inc., Gabelli & Company ("we" or "us") attempts to provide timely, value-added insights into companies or industry dynamics for institutional investors. Our research reports generally contain a recommendation of "buy," "hold," "sell" or "non-rated.” We do not undertake to "upgrade" or "downgrade" ratings after publishing a report. We currently have reports on 607 companies, of which 47%, 35%, 3% and 14% have a recommendation of buy, hold, sell or non-rated, respectively. The per-centage of companies so rated for which we provided investment banking services within the past 12 months is 0%, 0%, 0% and less than 1%. Ratings Analysts’ ratings are largely (but not always) determined by our “private market value,” or PMV methodology. Our basic goal is to understand in absolute terms what a rational, strategic buyer would pay for an asset in an open, arms-length transaction. At the same time, analysts also look for underlying catalysts that could encourage those private market values to surface. A Buy rated stock is one that in our view is trading at a meaningful discount to our estimated PMV. We could expect a more modest private market value to increase at an accelerated pace, the discount of the public stock price to PMV to narrow through the emergence of a catalyst, or some combination of the two to occur. A Hold is a stock that may be trading at or near our estimated private market value. We may not anticipate a large increase in the PMV, or see some other factors at work. A Sell is a stock that may be trading at or above our estimated PMV. There may be little upside to the value, or limited opportunity to realize the value. Economic or sector risk could also be increasing. We prepared this report as a matter of general information. We do not intend for this report to be a complete description of any security or company and it is not an offer or solicitation to buy or sell any security. All facts and statistics are from sources we believe to be reliable, but we do not guarantee their accuracy. We do not undertake to advise you of changes in our opinion or information. Unless otherwise noted, all stock prices reflect the closing price on the business day immediately prior to the date of this report. We do not use "price targets" predicting future stock performance. We do refer to "private market value" or PMV, which is the price that we believe an informed buyer would pay to acquire 100% of a company. There is no assurance that there are any willing buyers of a company at this price and we do not intend to suggest that any acquisition is likely. Additional information is available on request. As of January 31, 2017 our affiliates beneficially own on behalf of their investment advisory clients or otherwise approximately 4.01% of Snyder’s Lance. Because the portfolio managers at our affiliates make individual investment decisions with respect to the client accounts they manage, these accounts may have transactions inconsistent with the recommendations in this report. These portfolio managers may know the substance of our research reports prior to their publication as a result of joint participation in research meetings or otherwise. No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this research report. In addition, the undersigned lead analyst(s) has not and will not receive any compensation for providing a specific recommendation or view in this report. The analyst that wrote this report, or members of his household, owns no shares of the above mentioned companies.

($ in millions USD, except per share data)FYE 12/31 2015 2016 2017E 2018P 2019P 2020P

Snack FoodsEBITDA 191$ 289$ 341$ 373$ 399$ 426$ Valuation Multiple 14 x 14 x 14 x 14 x 14 x 14 xSegment Value 2,675 4,040 4,774 5,227 5,583 5,960

Total Private Market Value 2,675$ 4,040$ 4,774$ 5,227$ 5,583$ 5,960$ Less: (Debt)/Cash (349) (1,260) (992) (783) (615) (427) Less: Options Payments (21) (15) (30) (39) (46) (54) Equity Private Market Value 2,306$ 2,765$ 3,753$ 4,405$ 4,922$ 5,479$

Shares Outstanding (year-end) 96 98 98 99 100 PMV per share 29$ 38$ 45$ 50$ 55$ Discount to PMV -39% -4% 11% 20% 27%

Source: Company Reports, Gabelli & Company estimates.

Snyder’s Lance Price Performance

Source: Public data. As of March 6, 2014 LNCE had a BUY recommendation

March 6, 2017

-25-

Spectrum Brands (SPB - $137.69 - NYSE) Hold FYE 9/30 EPS P/E PMV 2019P $7.30 18.8x $169 Dividend: $1.68 Current Return: 1.2% 2018P 6.60 20.8 155 Shares O/S: 59.4 million 2017E 5.85 23.5 140 52-Week Range: $138.95 - $97.25 2016A 5.20 26.4 --

COMPANY OVERVIEW Headquartered in Middleton, Wisconsin, Spectrum Brands Holdings, Inc. (SPB) emerged from bankruptcy in 2009 and through acquisitions has transformed itself into a diversified global manufacturer of household products within consumer batteries (Rayovac), kitchen & home products (George Foreman, Black & Decker), pet supplies (IAMS, Tetra), home & garden control products (Cutter, Black Flag), residential locksets (Baldwin) and builders’ hardware (Stanley).

HIGHLIGHTS • When Andreas Rouvé assumed the role of CEO on April 1, 2015, he introduced the Spectrum First growth

initiative, focused on becoming the partner of choice of its retailers, employees and shareholders by developing a continuous flow of innovation, bundling shipments to reduce costs and leveraging its diverse portfolio and international footprint to introduce more products in more channels and more countries. In fiscal 2016, this strategy led to accelerating organic revenue growth of 3.8%, excluding non-strategic business exits vs. 3% growth in fiscal 2015.

• The company is focused on leveraging the same playbook in 2017: - Batteries & Appliances: Broaden U.S. battery distribution ($4.5 billion market) to include food, drug and

dollar channels and expand into adjacencies in appliances, such as steam irons and skin care electronics. - Hardware & Home Improvement: Build on 50% market share within the $1.5 billion US residential security

market by expanding the consumer base to include private label and high-end. - Pet Supplies: Increase investment in R&D to revamp the entire portfolio, while expanding distribution into

underpenetrated food, drug and mass channels. US pet market valued at $14 billion. - Home and Garden: Leverage the new aerosol manufacturing facility in St. Louis to support the company’s

repellant and household control expansion into adjacent applications. - Auto Care: Extend leading brands Armor All (30% market share) and STP into adjacent categories, such as

wax, air fresheners and diesel additives, within the $2.1 billion U.S. appearance and performance categories.

• Management reiterated 2017 free cash flow guidance of $575-590 million and announced 2017-2019 cumulative operating cash flow guidance of $2.1 billion. The company plans to repurchase $300 million worth of its shares, pay $300 million in dividends and invest $300 million in capital expenditures. Of the remaining $1.2 billion of uncommitted cash, Spectrum has prioritized deleveraging and bolt-on acquisitions in adjacent categories of Global Auto Care, Hardware & Home Improvements, Home and Garden and Global Pet Supplies segments.

RECOMMENDATION We continue to estimate that Spectrum will generate strong cash flow and 11% earnings growth over the next five years fueled by strong sales growth, annual cost savings of 3-5% and deleveraging. At 12.4x September 2017 expected EBITDA and 23.5x P/E, we reaffirm our Hold recommendation as Spectrum Brands is trading in-line with its peers.

Table 1 Spectrum Brands Earnings Model 2014-2021P


Fiscal year end 9/30 2014 2015 2016A 2017E 2018P 2019P 2020P 2021P CAGR(in millions, except per share data) '16-'21PRevenue 4,429$ 4,690$ 5,040$ 5,072$ 5,205$ 5,344$ 5,487$ 5,636$ 2.3 %% Growth 8.4% 5.9% 7.4% 0.6% 2.6% 2.7% 2.7% 2.7%

EBITDA 683 753 897 935 977 1,019 1,063 1,108 4.3 Margin 15.4% 16.1% 17.8% 18.4% 18.8% 19.1% 19.4% 19.7%

EBITDA , excl. stock comp 724 801 953 999 1,040 1,082 1,126 1,172 4.2 Margin 16.4% 17.1% 18.9% 19.7% 20.0% 20.2% 20.5% 20.8%



CapEx 73 89 95 116 119 122 124 127 Source: Company data and Gabelli & Company estimates.

Gabelli & Company

- 26 -

Table 2 Spectrum Brands Private Market Value Analysis 2017E-2021P (a) After-tax payments to buy out options holders at Private Market Value. Source: Public filings and Gabelli and Company estimates

I, Zamane Bodini, the Research Analyst who prepared this report, hereby certify that the views expressed in this report accurately reflect the analyst’s personal views about the subject companies and their securities. The Research Analyst has not been, is not and will not be receiving direct or indirect compensation for expressing the specific recommendation or view in this report.

Zamane Bodini (914) 921-5284 © Gabelli & Company 2017 Important Disclosures

ONE CORPORATE CENTER RYE, NY 10580 GABELLI & COMPANY TEL (914) 921-5284 FAX (914) 921-5098 .Gabelli & Company is the marketing name for the registered broker dealer G.research, LLC, which was formerly known as G.research, Inc., Gabelli & Company ("we" or "us") attempts to provide timely, value-added insights into companies or industry dynamics for institutional investors. Our research reports generally contain a recommendation of "buy," "hold," "sell" or "non-rated.” We do not undertake to "upgrade" or "downgrade" ratings after publishing a report. We currently have reports on 607 companies, of which 47%, 35%, 3% and 14% have a recommendation of buy, hold, sell or non-rated, respectively. The percentage of companies so rated for which we provided investment banking services within the past 12 months is 0%, 0%, 0% and less than 1%. Ratings Analysts’ ratings are largely (but not always) determined by our “private market value,” or PMV methodology. Our basic goal is to understand in absolute terms what a rational, strategic buyer would pay for an asset in an open, arms-length transaction. At the same time, analysts also look for underlying catalysts that could encourage those private market values to surface. A Buy rated stock is one that in our view is trading at a meaningful discount to our estimated PMV. We could expect a more modest private market value to increase at an accelerated pace, the discount of the public stock price to PMV to narrow through the emergence of a catalyst, or some combination of the two to occur. A Hold is a stock that may be trading at or near our estimated private market value. We may not anticipate a large increase in the PMV, or see some other factors at work. A Sell is a stock that may be trading at or above our estimated PMV. There may be little upside to the value, or limited opportunity to realize the value. Economic or sector risk could also be increasing. We prepared this report as a matter of general information. We do not intend for this report to be a complete description of any security or company and it is not an offer or solicitation to buy or sell any security. All facts and statistics are from sources we believe to be reliable, but we do not guarantee their accuracy. We do not undertake to advise you of changes in our opinion or information. Unless otherwise noted, all stock prices reflect the closing price on the business day immediately prior to the date of this report. We do not use "price targets" predicting future stock performance. We do refer to "private market value" or PMV, which is the price that we believe an informed buyer would pay to acquire 100% of a company. There is no assurance that there are any willing buyers of a company at this price and we do not intend to suggest that any acquisition is likely. Additional information is available on request. As of January 31, 2017, our affiliates beneficially own on behalf of their investment advisory clients or otherwise approximately less than 1% of Spectrum Brands Because the portfolio managers at our affiliates make individual investment decisions with respect to the client accounts they manage, these accounts may have transactions inconsistent with the recommendations in this report. These portfolio managers may know the substance of our research reports prior to their publication as a result of joint participation in research meetings or otherwise. The analyst who wrote this report may receive commissions from our customers' transactions in the securities mentioned in this report. Our affiliates may receive compensation from the companies referred to in this report for non-investment banking securities-related services, or may be soliciting these companies as clients for non-investment banking securities-related services. The analyst who wrote this report, or members of her household, owns no shares of Spectrum Brands.

Spectrum Brands – Price Performance

Source: Public data. As of July 9, 2015 SPB had a HOLD recommendation.

Fiscal year end 9/30 2017E 2018P 2019P 2020P 2021PGlobal Batteries & Appliances

Revenue 2,001$ 2,023$ 2,044$ 2,067$ 2,089$ EBITDA 315 323 330 338 346 Valuation Multiple 10.0x 10.0x 10.0x 10.0x 10.0xSegment Value 3,153 3,227 3,302 3,380 3,459

Hardware & Home ImprovementRevenue 1,266$ 1,330$ 1,396$ 1,466$ 1,539$ EBITDA 261 278 296 315 335 Valuation Multiple 12.0x 12.0x 12.0x 12.0x 12.0xSegment Value 3,128 3,332 3,549 3,779 4,023

Global Pet SuppliesRevenue 818$ 836$ 854$ 873$ 892$ EBITDA 145 151 157 164 171 Valuation Multiple 11.0x 11.0x 11.0x 11.0x 11.0xSegment Value 1,597 1,663 1,732 1,803 1,877

Home and Garden BusinessRevenue 526$ 543$ 560$ 578$ 596$ EBITDA 141 147 152 157 162 Valuation Multiple 12.0x 12.0x 12.0x 12.0x 12.0xSegment Value 1,696 1,764 1,824 1,886 1,950

Global Auto CareRevenue 461$ 475$ 489$ 504$ 519$ EBITDA 166 171 176 181 186 Valuation Multiple 10.0x 10.0x 10.0x 10.0x 10.0xSegment Value 1,656 1,706 1,757 1,810 1,864

CorporateEBITDA (93)$ (92)$ (92)$ (92)$ (92)$ Valuation Multiple 0.0x 0.0x 0.0x 0.0x 0.0xSegment Value - - - - -

Total Private Market Value 11,229$ 11,692$ 12,164$ 12,657$ 13,172$ Less: Net Debt (3,021) (2,577) (2,199) (1,795) (1,364) Less: Option Payment (a) - - - - - Less: Minority interest (44) (44) (44) (44) (44) Plus: NOL 123 77 - - - Equity Private Market Value 8,288$ 9,148$ 9,922$ 10,819$ 11,764$

Shares Outstanding 59 59 59 59 58 PMV per share 140$ 155$ 169$ 185$ 201$ Current Market - Discount to PMV 2% 11% 19% 26% 32%

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Bunge Limited (BG - $81.65 - NYSE) NR Year EPS P/E PMV 2019P $6.99 11.7x NA Dividend: $1.68 Current Return: 2.1% 2018P 6.63 12.3 NA Shares O/S: 139.5 million 2017E 6.07 13.5 NA 52-Week Range: $82.66 - $51.56 2016A 4.67 17.5 NA

Source: First Call consensus estimates

COMPANY OVERVIEW Bunge Limited, headquartered in White Plains, New York, is the leading global oilseed processor and grain exporter, as well as the leading global exporter of soy products. The company operates in four operating divisions: agribusiness (71% of segment profit), food and ingredients (21%), sugar and bioenergy (5%), and fertilizer (3%). In 2016, Bunge generated revenue of $42.9 billion, EBITDA of $1.6 billion and earnings of $4.67 per share. HIGHLIGHTS • Oilseeds and grains remain the foundation of global food supply, accounting for 90% of the calories in

commercial livestock feed, while vegetable and grains account for 40-60% of calories in vegetable oils consumed by humans. By 2025, the global food supply is projected to increase by 20% and global trade by 40%. Bunge originates approximately 70 million metric tons of grain and oilseed globally and has 32 port terminals. Bunge is the global leader in oil seeding processing with 52 million tons of soy and softseed crush capacity.

• 2017 outlook reaffirmed: agribusiness to generate $895-1,050 million in operating profit given an expected record crop for soybeans in South America and a return in farmer selling; food & ingredients $270-290 million as performance improvement initiatives continue to drive productivity and as synergies from the Pacifico wheat milling acquisition are unlocked; sugar & bioenergy $100-120 million with the majority of 2017 sugar production hedged; and fertilizer $30 million.

• Post 2017, Bunge expects to realize $120-200 million in incremental agribusiness operating profit as greater demand for meat and vegetable oil is expected to increase soy capacity utilization by 5-8% and crush margins by $3-5 a ton. An incremental $100-125 million is expected in food & ingredients as the company grows its value-added portfolio, which is faster growth and higher margin. A 10% increase in value-added sales translates into $30 million operating profit improvement.

• Bunge continues to pursue possible strategic alternatives to reduce its exposure to sugar milling in Brazil, including a possible sale of the business.

• Capital allocation priorities remain maintaining a BBB credit rating, repurchasing $800 million of stock, increasing dividends by 10% annually and exploring bolt-on acquisitions to expand the company’s value-added business and extend its geographic footprint.


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The Clorox Company (CLX - $136.92- NYSE) NR Year: 6/30 EPS P/E PMV 2019P $6.10 22.4x NA Dividend: $3.20 Current Return: 2.3% 2018P 5.73 23.9 NA Shares O/S: 128 million 2017E 5.33 25.7 NA 52-Week Range: $140.47 - $111.24 2016A 4.96 27.6 NA


COMPANY OVERVIEW The Clorox Company, headquartered in Oakland, California, is a leading global consumer products company that manufactures and sells cleaning, household, and lifestyle products. Clorox owns a number of strong brands including: Clorox, Glad, Kingsford, Burt’s Bees, Pine Sol, Hidden Valley and Brita, and seeks to dominate mid-sized categories where its primary competitor is typically private label. In its fiscal year ended June 2016, Clorox generated revenue of $5.8 billion and EBITDA of $1.2 billion. HIGHLIGHTS • Clorox’s primary message at CAGNY was that its economic profit focused strategy was working as intended:

80% of its revenue is generated by brands that hold #1 or #2 share of high-return categories, which should grow low-single digits with margins benefiting from an ongoing cost improvement focus. The portfolio is positioned to capitalize on consumer trends around health and wellness, sustainability, affordability and fragmentation, and over 75% of its brands have expanding or stable household penetration.

• The company continues its focus on 3D innovation – drawing from consumer insights to develop new and

adjacent products. Major innovation initiatives for 2017 include Clorox Scentiva cleaning products (higher quality scent profile), Burt’s Bees protein drink, and the Brita stream (faster filtration) and LONGLAST filter (targeting private label filters with more value). These innovations will be supported by stepped up advertising, which is increasingly digital (45% of media spend).

• Reaffirmed 2017 guidance: revenues +3-4% as 1% category growth, 3% from new innovations, and 2% from

the renew life acquisition are offset by 2-3% of negative currency and mix. This growth combined with EBIT margins +25-50bp and earnings are projected to be between $5.23-5.38 per share. Longer-term the company continues to believe it has opportunities to reduce SG&A as a percent of sales from 14%, which already puts them at the low-end of its CPG peers.

• The company reiterated its long-term algorithm goals of achieving sales growth of 3-5%, EBIT margin expansion of 25-50 bps and free cash flow of 10-12% of sales annually. Domestic sales are expected to grow 2-4%, and international sales are expected to grow 5-7%. Domestic markets generate approximately 80% of sales, while international markets comprise the remaining 20%.

• Priorities for free cash flow remain business growth, including targeted acquisitions with sales in the range of

$50-250 million, dividends, debt pay down and share repurchase.


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Colgate-Palmolive Company (CL - $73.59 - NYSE) NR Year EPS P/E PMV 2019P $3.43 21.5x NA Dividend: $1.56 Current Return: 2.1% 2018P 3.17 23.2 NA Shares O/S: 882.9 million 2017E 2.93 25.1 NA 52-Week Range: $75.38 - $63.43 2016A 2.81 26.2 NA


COMPANY OVERVIEW Headquartered in New York, Colgate Palmolive is a leading global consumer products company with a presence in over 200 countries and territories. The company competes in oral (47% of net sales), personal (20%), household surface and fabric care (18%) categories, as well as pet nutrition (15%). Its portfolio of brands includes Colgate, Irish Spring, Softsoap, Palmolive, Ajax and Hill’s brands. In 2016, Colgate generated revenue of $15.2 billion, EBITDA of $4.4 billion and earnings of $2.81 per share. HIGHLIGHTS • Colgate continues to lead the global toothpaste with 44% market share, more than 3x larger the next leading

competitor. Likewise, the company is the global leader in manual toothbrushes with 33.2% market share, nearly 2x larger than its leading competitor. Management highlighted market share gains in Brazil (74% market share), Philippines (65%) and rural India (58%) in 2016.

• Over the last five years, the company has delivered consistent 4-6% organic sales growth and expanded gross margins by 200 bps to 60.3% in 2016, reaching its long-term target of exceeding 60%. Colgate delivered these results despite macroeconomic challenges, unfavorable foreign exchange, and most recently a slowdown in category growth due to its strong brands, localized execution strategy and rigorous cost savings focus.

• In 2017, the company expects to deliver organic top-line growth of 4-7% and gross margin expansion of 75-125 bps. Management guided to the low-end of the revenue guidance due to continued category slowdown and inventory adjustments at key retailers in the Q1, and the high-end of gross margin guidance as the company completes the Global Growth and Efficiency Program.

• The Global Growth and Efficiency undertakings include the expansion of commercial hubs, the extension of shared business services, the streamlining of global functions and the optimization of the global supply chain. Total savings are estimated to be in the range of $400-475 million after tax by 2017.

• Other areas of focus for Colgate include expanding market penetration in China, Russia and India, introducing localized innovations, increasing consumer engagement by shifting 20% of media spending to digital and enhancing commercial strategies in-store and online.


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Constellation Brands, Inc. (STZ - $158.76 - NYSE) NR FYE:2/28 EPS P/E PMV 2018P $8.50 18.7x NA Dividend: $1.60 Current Return: 1.0% 2017P 7.53 21.1 NA Shares O/S: 176 million Cls A | 23 million Cls B 2016E 6.65 23.8 NA 52-Week Range: $173.55 - $137.85 2015A 5.43 29.2 NA

Source: First Call consensus estimates COMPANY OVERVIEW Constellation Brands, based in Victor, NY is the largest manufacturer and seller of premium imported beer in the United States. It is the world’s leading premium wine company, and owns and sells a number of spirits brands including, most notably, Svedka Vodka and Casa Noble tequila. The company controls a vast brand portfolio anchored by its flagship Mexican beer brand, Corona Extra, the #1 imported beer brand in the United States, and that also includes: Modelo, Pacifico and Ballast Point beers, as well as Robert Mondavi, Woodbridge, Clos du Bois, Dreaming Tree, Kim Crawford, Meomi, and Black Box wines (among many others). Through a combination of top-line growth, and mix-driven margin improvement, the company expects to deliver EPS growth in excess of 10% per year through 2020, ranking it among the fastest growing CPG companies at CAGNY. HIGHLIGHTS • Constellation’s presentation at CAGNY provided a broad overview of its position as the #1 multi-category

supplier in the US total beverage alcohol (TBA) market, which is $50 billion market growing 4% per year versus a total US CPG market growing 1.5%. This growth is disproportionately weighted towards premium-priced products, which make up the vast majority of Constellation’s portfolio. As a result, STZ was the single-largest contributor to total category growth, accounting for ~25% of TBA growth in 2016, and expects to be able to continue capturing an outsized portion of future growth.

• In beer, where STZ holds the #1 share in imports and the #3 share overall in the US, the company has a significant opportunity to drive continued distribution gains, as many of its smaller brands have meaningfully lower ACV than both its own Corona brand and national competitors despite generating higher profits for retailers. Additionally, STZ has opportunities to grow into new formats and occasions as it is underpenetrated in both cans and draft. Finally, Constellation’s largely Mexican beer portfolio stands to benefit from the growing population and purchasing power of Hispanic consumers in the US.

• In wine & spirits, while volumes stand to grow due to increasing wine and spirit consumption by millennials, Constellation is primarily focused on premiumizing its portfolio, improving the overall mix and margin profile. The company has made the strategic decision to focus advertising dollars behind a smaller group of high potential brands, in an attempt to build brand equity at the high-end of the category, while managing lower value brands for cash. This strategy has yielded strong margin improvement in the wine and spirits portfolio that is expected to continue.

• These growth initiatives have and will continue to require significant capital investments in support them. The company is in the midst of a major capacity expansion at its primary brewery in Mexico, is in the early stages of construction on a second Greenfield brewery in Mexicali, and recently acquired a third brewery from AB InBev. It is also constructing a large glass plant, and has supplemented its assets with several brand acquisitions ranging from craft beer to whiskey over the past several years. While these investments will limit free cash flow generation in the near term, the company expects to exit 2019 generating in excess of $1 billion of free cash flow per year.


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Hostess Brands, Inc. (TWNK - $15.58 - NASDAQ) NR Year EPS P/E PMV 2019P $1.00 15.6x NA Dividend: None Current Return: Nil 2018P 0.84 18.5 NA Shares O/S: 135.4 million 2017E 0.69 22.6 NA 52-Week Range: $15.93 – $9.50 2016A 0.85 18.3 NA


COMPANY OVERVIEW On November 4, 2016, Gores Holdings, Inc., a blank check company, acquired Hostess Brands, LLC for cash and stock, forming Hostess Brands, Inc. Hostess is a leading manufacturer of baking products including snack cakes, donuts, pastries and bread under brands, such as Twinkies, Ding Dongs and Mini Muffins. HIGHLIGHTS • Hostess cakes brands were relaunched in 2013 following the exit of bankruptcy proceedings and a complete

overhaul of the company while privately owned. The products were reformulated to extend the shelf-life (60 days vs. 30), the manufacturing base was reduced to three automated production facilities and management shifted its distribution from DSD to warehouse. In just three years back on shelf, revenue was $718 million for the first nine-months of 2016.

• Profitability has been significantly improved as a result of the changes previously made and today the company generates industry-leading EBITDA margins of 29%. Hostess products are premium-priced; the average price point is $4.75 per pound for Hostess compared to an average price of $3.64 for the sweet baked goods category.

• Management expects to grow ahead of the category, which it projects to grow low-single digits, over the medium-term. Growth drivers: expand distribution across alternative retail channels, including drug, dollar, convenience stores and foodservice, rebuild the distribution of core products and introduce new ones, and extend into adjacencies, including the $8.2 billion in-store bakery segment, which is growing 4%. In May 2016, Hostess acquired Superior Cake Products, a premium sweet-baked goods company with distribution across in-store bakery which it plans to leverage using the Hostess Bake Shop brand.

• Management highlighted it will continue to look for acquisition opportunities, likely in-store bakery but over time it may consider other opportunities across the broader snacking category.

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Ingredion Incorporated (INGR - $121.84 - NYSE) NR Year EPS P/E PMV 2019P $8.53 14.3x NA Dividend: $2.00 Current Return: 1.6% 2018P 8.10 15.0 NA Shares O/S: 72 million 2017E 7.59 16.1 NA 52-Week Range: $140.00 - $103.31 2016A 7.13 17.1 NA

Source: First Call consensus estimates COMPANY OVERVIEW Headquartered in Westchester, Illinois, Ingredion is a leading global manufacturer of sweeteners, starches, nutrition ingredients and biomaterials, providing its customers with more than 1,000 ingredient solutions in over 100 countries. Approximately 60% of sales are generated in North America, with the remaining in South America (18%), EMEA (10%) and Asia Pacific (12%). In 2016, Ingredion generated $5.7 billion in sales, $1.0 billion in EBITDA and $7.13 in EPS. HIGHLIGHTS • Specialty ingredients (25% of sales) remain a key focus at Ingredion. The company expects this division to grow

mid-single digits to high-single digits, outpacing the core business growth of low-single digits. By 2019, specialty ingredients sales are projected to reach $2 billion (30% of sales), accelerating the top-line growth and driving the majority of the projected margin expansion in the long term as specialty ingredients generate more than twice the operating margin of the core business.

• Within the $160 billion global food ingredient space, seven key consumer trends are expected to drive growth: clean label, health & wellness, protein fortification, snacking, indulgence and convenience. Of Ingredion’s six growth platforms sweetness, wholesome, texture, nutrition, delivery systems and biomaterial solutions, the company highlighted texture as a high potential growth area, growing 4-5%. Over the last five years, texture claims on new food product launches increased 91%.

• Texturizers account for 25% of the global food ingredient industry, or $36 billion, of which $21 billion is proteins, $6 billion hydrocolloids, $5 billion starched and the remaining emulsifiers, cultures and enzymes. Ingredion is the leader in texture and strengthened its leadership position through the acquisition of hydrocolloid company TIC Gum in 2016 and Penford Corporation and Kerr Concentration, two complementary high-value specialty products companies, in 2015.

• Management expects to drive low-double digit EPS growth in the long term, driven by +2-4% from volume growth, +6-8% from margin improvements and +4% from capital deployment, via M&A, share repurchases and/or debt repayments. Management also targets to achieve 10%+ return on capital employed.


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Johnson & Johnson (JNJ - $123.79 - NYSE) NR Year EPS P/E PMV 2019P $7.79 15.9x NA Dividend: $3.20 Current Return: 2.6% 2018P 7.38 16.8 NA Shares O/S: 2,713.3 million 2017E 7.04 17.6 NA 52-Week Range: $126.07 - $105.49 2016A 6.73 18.4 NA

Source: First Call consensus estimates COMPANY OVERVIEW Headquartered in New Brunswick, NJ, Johnson & Johnson is the world’s largest healthcare company. JNJ operates in three segments: pharmaceuticals (47% of net sales), medical devices (35%) and consumer (19%). In pharmaceuticals, treatment areas include immunology, cardiovascular, neuroscience and oncology. Medical devices encompass products and services for orthopedics, surgery and vision care and other, while consumer encompasses beauty, OTC, baby care and other. In 2016, Johnson & Johnson generated $71.9 billion of sales, $24.9 billion of EBITDA and earnings of $6.73 per share. HIGHLIGHTS • Worldwide Chairman and Executive Vice President of Consumer Jorge Mesquite reviewed the consumer segment

of Johnson & Johnson, which generated $13.3 billion in revenue and $3 billion in EBITDA in 2016.

• JNJ is the leader in OTC ($100 billion global market), beauty ($160 billion), oral care ($40 billion), women’s health ($30 billion), baby toiletry ($15 billion) and wound care ($3 billion). These six categories combined are valued at $350 billion, growing 4-7%, nearly twice the rate of the consumer goods industry growth rate of 3-4%, driven by consumer trends and changing demographics, including health & wellness, the aging population, lifestyle issues and 135 million births each year.

• Twelve brands, including Johnson’s, Neutrogena, Listerine, Aveeno, Band-Aid, Zyrtec and Tylenol, are mega brands, which account for 65% of total company revenues. By 2020, the company is focused on building these brands to generate over 75% of sales.

• In 2016, the company set to exceed market growth, expand profit margins and accelerate through acquisition, all of which JNJ completed, delivering 4.2% organic growth vs. 2.9% market growth, expanding operating margins by 560 bps to 19.9% and completing six acquisitions. In the last twelve months, JNJ acquired premium hair care brand OGX, light therapy company La Lumiere, global allergy brand Rhinocort, dermo-cosmetic brands NeoStrata and Dr. i:Labo.

• In 2017-2020, management is targeting 1-2% above the market growth rate per year and earnings growth greater than that of sales.

• Key priorities: reduce the number of products launched by 50% by 2018 to focus on fewer bigger innovations with global appeal; build a strong consumer analytics engine to drive precision marketing; leverage existing retailer partnerships to globalize brands; reduce complexity in the supply chain, optimize trade spending and eliminate non-value-added costs in SG&A to drive profitability and margin expansion; and use acquisitions to build scale in OTC, beauty and baby, as well as fill in gaps in the company’s geographic footprint.


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Kellogg Company (K - $74.47 - NYSE) NR Year EPS P/E PMV 2019P $4.60 16.2x NA Dividend: $2.08 Current Return: 2.8% 2018P 4.34 17.2 NA Shares O/S: 351.1 million 2017E 3.94 18.9 NA 52-Week Range: $87.16 - $70.74 2016A 3.74 19.9 NA


COMPANY OVERVIEW Kellogg Company based in Battle Creek, Michigan was founded in 1906. The company competes primarily in two categories, cereal and snacks, which represented 42% and 51% of sales, respectively. Along with Keebler, the number two cookie and cracker producer in the United States, Kellogg’s brands include Special K, Rice Krispies, Pop-Tarts, Nutri-Grain, Eggo, Cheez-It, Carr’s and Morningstar Farms. The company added Pringles to its snack portfolio when it acquired the company in May 2012 for $2.7 billion. In 2016, Kellogg generated $13 billion of revenue, $2.5 billion of EBITDA and earnings of $3.74 per share. HIGHLIGHTS • Kellogg management reviewed its growth strategy of winning in breakfast, building a global snacking

powerhouse, doubling its business in emerging markets and investing in sales capabilities, which includes shifting to a single distribution model as it adds its US snacks business to its warehouse system.

• On February 8, Kellogg announced its intention to reorganize its US snacks business and transition it from direct-store-delivery (DSD) to warehouse distribution. Nearly $2 billion or 60% of US snack sales are distributed through its company-owned DSD system. This compares to the large DSD systems operated by its competitors, primarily Mondelez (MDLZ), Pepsi (PEP) owned Frito-Lay, Campbell Soup (CPB) owned Pepperidge Farm and Snyder’s-Lance (LNCE). This transformation will take its route drivers out of the store as it shifts responsibility to its retail partners, reducing the amount of influence Kellogg has in-store but also significantly reducing distribution costs, which K expects to reinvest in growth supporting activities, such as brand support and innovation. Today, approximately 75% of US sales utilize its warehouse system.

• Paul Norman, the President of the North American division reviewed the portfolio prioritization for North America which is aimed at improving revenue growth and margins. The priorities are to improve the performance of the core (40% of revenue), including growing share of the core six cereal brands (23% market share of US cereal), sustain the momentum of growth brands (25%) such as Cheez-It, Pringles, Pop-Tarts and returning Eggo to growth, realize the potential (15%) of better-for-you brands Kashi, Morningstar Farms and Special K, and manage for profit (20%) smaller brands and products, which may be rationalized over time. Aside from portfolio prioritization, management is also looking to improve the investments it’s making in marketing, revenue growth management and productivity.

• In 2017, currency-neutral net sales are expected to decline by approximately 2%, operating profit +7-9% and earnings per share +8-10% or $4.03-4.09 (excluding $0.02 from Venezuela). Cash flow is expected to be approximately $1.1-1.2 billion, which includes additional spending for Project K and $200-300 million of costs associated with the conversion of snacks to warehouse distribution.

• Management reiterated its expectation of achieving approximately 18% operating margins by 2018.

• Cash flow priorities remain the dividend (40-50% payout), share repurchase and acquisitions which contribute to its expansion in emerging markets, global snacks or natural and/or organic foods.

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L’Oréal (OR.PA - €176.45 - Paris) NR Year EPS P/E PMV 2019P €7.98 22.1x NA Dividend: €3.30 Current Return: 1.9% 2018P 7.41 23.8 NA Shares O/S: 561.9 million 2017E 6.96 25.3 NA 52-Week Range: €177.90 - €151.20 2016A 6.46 27.3 NA


COMPANY OVERVIEW Headquartered in Paris, France, L’Oréal is the world leader in beauty, serving consumers in more than 140 countries across all distribution channels, categories and price points. Through its four divisions Consumer Products, Professional Products, L’Oréal Luxe and Active Cosmetics, the company markets its products under well-known brands, including L’Oreal, Maybelline, Garnier, Urban Decay, YvesSaintLaurent, SkinCeuticals and essie. For the 2016, L’Oréal generated €25.8 billion in sales, €5.6 billion in EBITDA and earned €6.46 earnings per share. HIGHLIGHTS • L’Oréal leads the global beauty market with 12.6% market share. In Western Europe (33% of sales) and North

America (27%), its market share is higher at 20% and 14%, respectively. L’Oréal continues to gain share globally, outpacing global market growth of 4% in 2016 by 70 bps. In North America, revenue +5.8% vs. market growth of 4%, Western Europe +2.4% vs. +1%, and new markets +6.2% vs. +5%.

• The future of the beauty industry remains attractive as consumers are spending a larger share of their wallet on beauty, trading up faster than any other category in the consumer goods industry. Consumers want personal relationships with brands and customized advice even at the cost of premium. In addition, social media is causing a stir in the industry with the 2 trillion selfies shared each year driving double the growth in the makeup category. As the year leader in beauty, L’Oréal is uniquely positioned to capitalize on evolving dynamics expected to drive 4% market growth in 2017.

• Management sees particularly strong growth opportunities in e-commerce as consumers continue to go online to educate themselves on how to address their personal care needs. In 2016, L’Oréal generated €1.7 billion in e-commerce sales, a 33% increase over the prior year. In China, e-commerce sales have grown to 30% of consumer sales in less than five years to more than €3 billion in sales, twice the size of the next leading competitor.

• L’Oréal has a strong track record for acquiring small brands and growing them into large, international brands. Under one year of ownership, the company grew mass brand NYX Professional Cosmetics 125% through social media engagement efforts and international expansion. Management believes the same growth potential lays within newly acquired brands IT Cosmetics, CeraVe, Atelier Cologne and Saint-Gervais Mont Blanc. L’Oréal continues to pursue acquisitions of brands in the early stage of development.

• 2017 guidance of above category revenue growth reaffirmed, as well as the company’s intent to divest its €1 billion Body Shop business after struggling to improve profitability since acquiring the cosmetic retailer in 2006.


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March 6, 2017

Nestle (NESN - CHF74.65 SWX) NR Year EPS P/E PMV 2019P CHF4.05 18.4x NA Dividend: CHF 2.30 Current Return: % 2018P 3.79 19.7 NA Shares O/S: 3,085 million 2017E 3.53 21.1 NA 52-Week Range: CHF79.70 – CHF67.00 2016A 3.40 22.0 --

Source: First Call consensus estimates COMPANY OVERVIEW Nestle SA is the world’s leading food and beverage company. The company’s broad product portfolio includes coffee, bottled water, infant formula, frozen meals, and pet food, and as well as approximately 130 million shares in cosmetics maker L’Oreal. In recent years, Nestlé has increased its focus on health and wellness: it acquired businesses in infant and adult nutrition (Novartis Medical Nutrition, Gerber, Pfizer Infant Nutrition) and created Nestlé Health Science S.A. and the Nestlé Institute of Health Sciences in order to develop health science nutrition to prevent and treat conditions such as diabetes, obesity, cardiovascular disease, and Alzheimer’s disease. In 2016, Nestle generated revenue of CHF89.5 billion, EBITDA of CHF16.9 billion and EPS of 3.40 per share.

HIGHLIGHTS • Nestle is the world’s largest food and beverage company operating in 190 countries and generating CHF 90

billion. Its largest markets include the US, where it generates CHF 27 billion and China, CHF 7 billion. Nestle’s largest category is beverages, accounting for 22% of sales, which is mostly comprised of coffee, followed by milk products and ice cream (16%), prepared dishes (13%), pet care (14%, where is the global leader), confectionery (10%) and water (8%). Nutrition and health sciences comprise the remaining 17% of sales.

• Nestle had the presidents of two businesses which have overcome some recent issues, including the President of Zone AOA (Asia, Oceania and sub-Saharan Africa) who highlighted the progress it is making in the region which generates CHF 22.5 billion of revenue. Gradually, AOA has overcome product issues in India and reaccelerated growth across most countries despite macroeconomic challenges. In US Frozen Meals, its president reviewed the significant product and portfolio changes implemented across this CHF 2.7 billion business, where Nestle is the category leader. The business is growing following several years of decline for the category, as Nestle renovated its products and improved its packaging and consumer communication, which has led to market share gains for Nestle.

• Long-term targets include mid-single digit organic growth by 2020 by investing in categories and regions with strong potential, addressing underperforming businesses, investing in product innovation as well as digital capabilities. Meanwhile, cost efficiency programs continue to focus across its manufacturing footprint and efficiency, global procurement and standardizing processes and enhancing shared services. Cash flow will continue to support the dividend, while merger/acquisition opportunities will remain a consideration. Aside from its general strategy, few additional details were disclosed but over time more is likely to be divulged, as the presenters were hesitant to comment in more detail given Mark Schneider, Nestle’s CEO, was only appointed to his position effective January 1, 2017.

March 6, 2017

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The Procter & Gamble Company (PG - $90.50 - NYSE) NR FYE: 6/30 EPS P/E PMV 2019P $4.42 20.5x NA Dividend: $2.68 Current Return: 3.0% 2018P 4.13 21.9 NA Shares O/S: 2,556 million 2017E 3.84 23.6 NA 52-Week Range: $91.89 - $79.10 2016A 3.67 24.7 NA

Source: First Call consensus estimates COMPANY OVERVIEW The Procter & Gamble Company based in Cincinnati, Ohio is the largest, global manufacturer and marketer of personal and household care items. The company has leading shares in multiple categories, including Tide laundry detergent, Pampers diapers, Head & Shoulders shampoo and Gillette razors, which represent only a few of its twenty-three billion dollar brands and 50 leadership brands. In 2016, P&G generated $65.3 billion of revenue, $17.1 billion of EBITDA and earned of $3.67 per share. HIGHLIGHTS • CFO, John Moeller highlighted the progress the company is making transforming the portfolio following the

divestiture of Duracell and the Beauty business in 2016. The focus is now on the 50 country/category combinations, SKU simplification and expanding P&G’s participation across all segment tiers to attract new users to its brands.

• In conjunction with this, PG announced that Gillette’s blades and razors business effective March 30 would

take an average 12% price reduction in order to improve consumer value. Globally, shaving generates nearly $6 billion in revenue for P&G and is very profitable; however, the category has become increasingly price competitive. As a result of its price adjustments, P&G management expects its systems to be more competitively priced across all price tiers, including those where it does not compete today. Accordingly, P&G expects to more effectively contend with lower-priced competitors, such as Edgewell’s Schick and private label products (Mach3 compatible cartridge), and shave clubs.

• Over the next several years, P&G expects to generate up to $10 billion in productivity savings not only across

manufacturing, transportation, warehousing, raw materials and packaging but also across marketing and promotional spending effectiveness. With a stronger, simplified portfolio, P&G’s management expects to accelerate growth through new innovation, improved distribution and reinvestment across all demand drivers.

• Outlook: For 2017, revenue is projected to be flat and core EPS growth up mid-single digits. Long-term

targets are predicated on revenue growth at or above category growth, which today has decelerated to approximately 2%, gradual pretax margin improvement and strong cash generation (90%+ FCF productivity), of which a portion of cash will be returned to shareholders through dividends and share repurchases in order to achieve top-tier total shareholder return.

March 6, 2017

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G.research, LLC One Corporate Center Rye, NY 10580-1422 Tel (914) 921-5150 www.gabellisecurit ies.com Sysco Corp (SYY - $52.19 - NYSE) NR

Year EPS P/E PMV 2019P $3.00 17.4x NA Dividend: $1.32 Current Return: 2.5% 2018P 2.75 18.9 NA Shares O/S: 540.2 million 2017E 2.50 20.9 NA 52-Week Range: $57.07 - $44.64 2016A 2.06 22.6 NA

Source: First Call consensus estimates COMPANY OVERVIEW Sysco (SYY) is the global leader in selling, marketing and distributing food products to restaurants, healthcare and educational facilities, lodging establishments and other customers in the food-away-from-home industry. SYY operates 198 distribution facilities and serves over 500,000 customers spanning thirteen countries. HIGHLIGHTS Bill DeLaney (CEO), Tom Bene (President and COO) and Joel Grade (CFO) provided a market and strategy update, along with a financial overview of the company at CAGNY: • The $279 billion U.S. foodservice market is the foundation of SYY business with meaningful (although not

quantified) growth potential according to the company. SYY has been the largest player in the U.S. for over thirty years.

• Canada is a $32 billion market that is strategically important to SYY with a lot of common customers and suppliers. This market does present some unique challenges considering its vast geography, but there is a lot of opportunity to grow the business and run it more efficiently. Canada only has one other major foodservice player besides SYY.

• Looking five years out the company expects Central and South America markets to become a more meaningful contributor to growth as it continues to expand its presence there by finding good partners through JVs or acquisitions.

• Last year SYY entered Europe with its acquisition of Brakes Group, a leading food distributor in Europe. Brakes Group operates primarily in the UK, France, Sweden and Ireland and provides a growth platform in Europe with a strong management team.

• Sysco’s vision is to be its customers’ most valued and trusted business partner. This is not just a slogan, but is embedded deeply in the company’s culture. The pillars that support that vision are continually improving customer experience and enhanced associate engagement. Most profitable sale is a sale to an existing customer.

• Three-year strategic plan calls for local case growth in the 2-3% range; has been averaging +2.4% over the last six quarters (although slower recently). Gross profit growth of 4%; +3.7% over the last six quarters. Expense growth of 3%; average last six quarters of +1.7%.

• SYY three-year plan calls for operating income to improve by $600-650 million (vs. the original plan of “at least” $400 million), with $350 million already realized at the halfway point of the plan.

• Capital allocation priorities include investing back in the business (fleet, facilities, technology), growing the dividend, strategic M&A, debt reduction, and opportunistic share buybacks.

March 6, 2017

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Tyson Foods, Inc. (TSN - $63.60 - NYSE) NR Year EPS P/E PMV 2019P $5.04 12.6x NA Dividend: $0.90 Current Return: 1.4% 2018P 4.98 12.8 NA Shares O/S: 357 million 2017E 5.00 12.7 NA 52-Week Range: $77.05 - $55.72 2016A 4.39 14.5 NA

Source: First Call consensus estimates COMPANY OVERVIEW Tyson Foods, Inc. is a leading processor and manufacturer of fresh and prepared protein products with $37 billion of revenue. The company is the largest chicken processor (21% share, 30% of sales), the largest beef processor (24% share, 38% of sales), and the third largest pork processor (18% share, 11% of sales) in the United States. That said, Tyson’s CAGNY presentation focused primarily on its $7.3 billion value-add prepared foods business which is one of the country’s leading producers of protein-based prepared foods (20% of sales) with leading positions across a broad range of categories, and a portfolio of strong brands including its namesake Tyson, as well as Hillshire Farms, Jimmy Dean, Ball Park, and State Fair, among others. HIGHLIGHTS • Tom Hayes, who assumed the role of Tyson CEO at the start of 2017, outlined the company’s strategy, which

is to drive efficiency and throughput in the company’s commodity businesses to generate cash to feed the prepared food businesses, with the goal of delivering 3% annual value added growth, driving high single-digit EPS growth, and top 1/3 total shareholder return. The company has successfully delevered (to 1.7x) after the 2014 acquisition of Hillshire Brands, and intends to continue to pursue value-add M&A of “protein-packed’ brands.

• As the company highlighted last year, protein continues to benefit from strong consumer demand, and serves as a significant tailwind for Tyson’s business. In the past year, 54% of US consumers sought to add more protein to their diets, and “good source of protein” is the #1 desired health and wellness attribute sought in food. Consumers are also increasing their consumption of fresh food from the perimeter of the store as well as snacks and convenience food, all of which play into Tyson’s portfolio attributes. Altogether, Tyson is a leading player in a $98 billion packaged protein industry, and packaged foods that include meat are growing 70% faster than the overall category.

• Positive trends notwithstanding, the core of Tyson’s growth strategy continues to be innovation driven by

consumer insights and driving household penetration of their brands. Innovation accounted for 14% of 2016 sales, up from 12% in 2014 with highly supported innovations such as Hillshire small plates performing better than expected. In 2017 the company intends to drive sales of its Tastemakers ready to cook entrees, fresh ground chicken, and a number of on-the-go breakfast offerings, among others. The company is also stepping up its health, wellness, and sustainability efforts, announcing that all branded Tyson chicken will be antibiotic free by June 2017 and investing capital to research farming best-practices.

• Finally, the company discussed several of its more speculative initiatives such as its Tyson New Ventures corporate venture capital venture, which is investing in new technologies such as plant-based meat alternatives, its tastemakers e-commerce initiative, which is growing rapidly, and its successful traceability initiatives in China. While the impact of these opportunities is currently limited, longer-term they align with the company’s sustainability goals and could be important drivers of future growth.

• During Q&A, management received questions about the ongoing SEC collusion investigation, and was unable to provide any updated information aside from the fact that it is cooperating and that it believes that the accusations are without merit.


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March 6, 2017

Unilever (UNA - €44.57 - AEX) NR Year EPS P/E PMV 2019P €2.46 18.2x NA Dividend: €1.28 Current Return: 2.9% 2018P 2.24 20.0 NA Shares O/S: 2,840 million 2017E 2.05 21.8 NA 52-Week Range: €45.12 – 36.22 2016A 1.88 23.8 NA


COMPANY OVERVIEW Headquartered in London, United Kingdom, Unilever is a leading global health and well-being company. The company operates in four segments: personal care (38% of sales), food (35%), refreshments (19%) and home care (18%). Its portfolio of iconic brands includes Dove, Axe, Tresemme, Hellmann’s and Lipton. In 2016, the company generated revenue of €52.7 billion, EBITDA of €9.5 billion and earnings of €1.88 per share.

HIGHLIGHTS • In the wake of a proposal from the Kraft Heinz Company to acquire the company, which was subsequently

rejected, Unilever presented on Friday morning highlighting the past but also recognizing that its perspective on the future had abruptly changed. Over the last several years, Unilever has generated average underlying sales growth of nearly 4%, while also implementing savings programs, including zero-based budgeting, to expand margins and reinvest across its brands.

• The portfolio has also been strengthened as it focuses on faster growing categories through both organic growth and through acquisitions/divestitures. Personal care has expanded to 38% of sales, while food is focused on faster-growing and more attractive segments. 60% of its business is gaining market share.

• 2017-2019 Outlook: Underlying sales growth ahead of market rates, operating margin expansion of 40-80bps

based upon savings programs which have already been implemented and cash conversion of 90%. For 2017, Unilever expects to achieve the higher-end of its 40-80bps margin expansion target.

• Addressing the acquisition proposal, CFO, Graeme Pitkethly, gave two primary reasons for the rejection

including, valuation, as well as the conviction Unilever’s management has in the long long-term value creation opportunities of the company, compared to the KHC approach which includes the use of leverage, short-term earnings gains absent sales growth and the dependence on continuous merger activity.

• Longer-term, Unilever expects to accelerate value for shareholders through underlying sales growth of 3-5%,

as well as improved margins generated from €600 million of cost savings and the efforts it has made around efficiency and sustainability. Management anticipates disclosing further details on its future plans following the strategic review which will conclude in early April 2017.

Gabelli & Company

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Companies Mentioned:

We, Sarah Donnelly, Joseph Gabelli, Damian Witkowski and Zamane Bodini, the Research Analysts who prepared this report, hereby certify that the views expressed in this report accurately reflect the analysts’ personal views about the subject companies and their securities. The Research Analysts have not been, are not and will not be receiving direct or indirect compensation for expressing the specific recommendation or view in this report.

Sarah Donnelly (914)921-5197 Damian Witkowski (914)921-5022 Joseph Gabelli (914)921-8331 Zamane Bodini (914) 921-5284

Gabelli & Company 2017


ONE CORPORATE CENTER RYE, NY 10580 GABELLI & COMPANY TEL (914) 921-5130 FAX (914) 921-5098 Gabelli & Company is the marketing name for the registered broker dealer G.research, LLC, which was formerly known as G.research, Inc. Gabelli & Company ("we or "us") attempts to provide timely, value-added insights into companies or industry dynamics for institutional investors. Our research reports generally contain a recommendation of "buy," "hold," "sell" or "non-rated.” We do not undertake to "upgrade" or "downgrade" ratings after publishing a report. We currently have reports on 607 companies, of which 47%, 35%, 3% and 14% have a recommendation of buy, hold, sell or non-rated, respectively. The percentage of companies so rated for which we provided investment banking services within the past 12 months is 0%, 0%, 0% and less than 1%. Ratings Analysts’ ratings are largely (but not always) determined by our “private market value,” or PMV methodology. Our basic goal is to understand in absolute terms what a rational, strategic buyer would pay for an asset in an open, arms-length transaction. At the same time, analysts also look for underlying catalysts that could encourage those private market values to surface. A Buy rated stock is one that in our view is trading at a meaningful discount to our estimated PMV. We could expect a more modest private market value to increase at an accelerated pace, the discount of the public stock price to PMV to narrow through the emergence of a catalyst, or some combination of the two to occur. A Hold is a stock that may be trading at or near our estimated private market value. We may not anticipate a large increase in the PMV, or see some other factors at work. A Sell is a stock that may be trading at or above our estimated PMV. There may be little upside to the value, or limited opportunity to realize the value. Economic or sector risk could also be increasing. We prepared this report as a matter of general information. We do not intend for this report to be a complete description of any security or company and it is not an offer or solicitation to buy or sell any security. All facts and statistics are from sources we believe to be reliable, but we do not guarantee their accuracy. We do not undertake to advise you of changes in our opinion or information. Unless otherwise noted, all stock prices reflect the closing price on the business day immediately prior to the date of this report. We do not use "price targets" predicting future stock performance. We do refer to "private market value" or PMV, which is the price that we believe an informed buyer would pay to acquire 100% of a company. There is no assurance that there are any willing buyers of a company at this price and we do not intend to suggest that any acquisition is likely. Additional information is available on request. As of January 31, 2017, our affiliates beneficially own on behalf of their investment advisory clients or otherwise approximately 5.65% of Edgewell Personal Care, 4.01% of Snyder’s Lance, 1.86% of WhiteWave Foods, 1.80% of International Flavors and Fragrances and less than 1% of all other companies mentioned. One of our affiliates serves as an investment adviser to Edgewell Personal Care. or an affiliated entity and has received compensation within the past 12 months for these non-investment banking securities-related services. Because the portfolio managers at our affiliates make individual investment decisions with respect to the client accounts they manage, these accounts may have transactions inconsistent with the recommendations in this report. These portfolio managers may know the substance of our research reports prior to their publication as a result of joint participation in research meetings or otherwise. No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this research report. In addition, the undersigned lead analyst(s) has not and will not receive any compensation for providing a specific recommendation or view in this report. The analysts who wrote this report, or members of their households, own no shares of the above mentioned companies.

Anheuser-Busch InBev (BUD - NYSE) J.M. Smucker Company (SJM - NYSE)Bunge Limited (BG - " ) Johnson & Johnson (JNJ - " )Campbell Soup Company (CPB - " ) Kellogg Company (K - " )Church & Dwight Co., Inc. (CHD - " ) L’Oréal (OR - Paris)The Clorox Company (CLX - " ) Mondelēz International, Inc (MDLZ - NASDAQ)The Coca-Cola Company (KO - " ) Nestle SA (NESN - Swiss)Colgate-Palmolive Company (CCL - " ) Newell Rubbermaid, Inc. (NWN - NYSE)Constellation Brands, Inc. (STZ - " ) PepsiCo Inc. (PEP - " )Danone (BN - Paris) The Procter & Gamble Company (PG - " )Dunkin' Brands (DNKN - NASDAQ) Snyder's Lance (LNCE - NASDAQ)Edgewell Personal Care (EPC - NYSE) Spectrum Brands (SPB - NYSE)General Mills, Inc. (GM - " ) Sysco Corporation (SYY - " )Hostess Brands, Inc. (TWNK - NASDAQ) Tyson Foods, Inc. (TSN - " )Ingredion Incorporated (INGR - " ) Unilever plc (UL - " )International Flavors & Fragrances (IFF - NYSE) The White Wave Foods Company (WWAV - NASDAQ)

com cagny 2017 · coca-cola company (ko - 42.48 ... • prior to its presentation at the...

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