On this page of StockholderLetter.com we present the 8/4/2023 shareholder letter from CONAGRA BRANDS INC. — ticker symbol CAG. Reading current and past CAG letters to shareholders can bring important insights into the investment thesis.
Conagra Brands Annual Report 2023
Dear Shareholders, Fiscal 2023 was a year that saw unique challenges from continued input cost inflation, supply chain challenges, and operational disruptions. But that didn t stop Conagra Brands from delivering another strong year. I m proud of the way our team navigated a dynamic operating environment to execute against our fiscal 2023 priorities and deliver strong revenue growth, margin improvement, and profitable results. We will continue to benefit from our strong brands, processes, and people as we execute our playbook to drive sustainable growth. Fiscal 2023 highlights include: Our organic net sales1 increased 6.6% during fiscal 2023 We delivered a 17.4% increase in adjusted earnings per share1 (EPS) versus a year ago The Company increased adjusted operating margin1 125 basis points to 15.6% We reduced our net leverage ratio1 to 3.63x, from 3.99x at the end of the prior year Our board of directors continued to prioritize returning capital to shareholders, as we paid $624 million in dividends, up from $582 million paid in fiscal 2022. One constant for Conagra Brands was our focus on corporate social responsibility. We published our annual Citizenship Report in March 2023, which outlines Conagra s progress against key environmental, social, and governance (ESG) initiatives and actions. I m proud of the team s achievements in the past year, which include: Diversity and Inclusion: Our goal is to create a culture of belonging, where everyone can experience inclusion. Our multi-year diversity and inclusion strategy supports three key areas of focus: recruitment, advocacy, and development. In fiscal year 2023, we continued to execute comprehensive plans to support delivery of our D&I strategy. Our focus on diversity recruitment has resulted in a strong pipeline of diverse early talent and experienced hires, resulting in recognition from organizations like the Talent Board. Sustainable Development Awards: Conagra Brands Sustainable Development Awards program continues to be the cornerstone for engaging employees and recognizing their innovative ideas related to improving our production and business practices. Through this initiative, which began in 2009, Conagra Brands has: Conserved 3.7 billion gallons of water Decreased Conagra s carbon footprint by 215,000 metric tons Reduced waste by 122,700 tons Decreased packaging materials by more than 32,000 tons Saved over $280 million Employee Volunteerism: Conagra employees are dedicated, engaged, and generously give their time and talents to volunteer yearround at organizations that are important to them and their local communities. Throughout fiscal year 2023, Conagra employees volunteered thousands of hours at more than 100 different nonprofit agencies that serve the communities where we do business. In fiscal 2024, we expect to transition toward a more normalized operating environment. Of course, our focus on innovation will continue to be at the forefront of our efforts and we are excited to introduce our biggest slate of new products to date. Our fiscal 2024 lineup features a compelling mix of convenient, value-added meals, at-home restaurant experiences, and exciting licensed products. As always, we will support our new products by investing in our modern approach to marketing to drive sales. At Conagra, we are all working together to drive sustainable growth and margin expansion and it s our people who really make it happen. Every day, I m proud of our team s dedication, expertise, and willingness to get the job done. Their efforts are why our business is well-positioned to drive shareholder value for many years to come. On behalf of everyone at Conagra Brands, I thank you for your support. Sincerely, Sean M. Connolly, President and Chief Executive Officer 1 Organic net sales (which excludes, from reported net sales, the impacts of foreign exchange), adjusted EPS, adjusted operating margin, and net leverage ratio are measures not calculated in accordance with U.S. generally accepting accounting principles ( GAAP ). Please see pages 83-85 for reconciliations of these measures to the most directly comparable GAAP measures.
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CAG 8/4/2023 Shareholder/Stockholder Letter Transcript:

Conagra Brands
Annual Report
2023

Dear Shareholders,
Fiscal 2023 was a year that saw unique challenges from continued input cost inflation, supply chain challenges, and operational
disruptions. But that didn   t stop Conagra Brands from delivering another strong year. I   m proud of the way our team navigated a dynamic
operating environment to execute against our fiscal 2023 priorities and deliver strong revenue growth, margin improvement, and
profitable results. We will continue to benefit from our strong brands, processes, and people as we execute our playbook to drive
sustainable growth. Fiscal 2023 highlights include:



Our organic net sales1 increased 6.6% during fiscal 2023
We delivered a 17.4% increase in adjusted earnings per share1 (EPS) versus a year ago
The Company increased adjusted operating margin1 125 basis points to 15.6%
We reduced our net leverage ratio1 to 3.63x, from 3.99x at the end of the prior year
Our board of directors continued to prioritize returning capital to shareholders, as we paid $624 million in dividends, up from
$582 million paid in fiscal 2022.
One constant for Conagra Brands was our focus on corporate social responsibility. We published our annual Citizenship Report in
March 2023, which outlines Conagra   s progress against key environmental, social, and governance (ESG) initiatives and actions. I   m
proud of the team   s achievements in the past year, which include:
Diversity and Inclusion: Our goal is to create a culture of belonging, where everyone can experience inclusion. Our multi-year diversity
and inclusion strategy supports three key areas of focus: recruitment, advocacy, and development. In fiscal year 2023, we continued to
execute comprehensive plans to support delivery of our D&I strategy. Our focus on diversity recruitment has resulted in a strong pipeline of
diverse early talent and experienced hires, resulting in recognition from organizations like the Talent Board.
Sustainable Development Awards: Conagra Brands    Sustainable Development Awards program continues to be the cornerstone for
engaging employees and recognizing their innovative ideas related to improving our production and business practices. Through this
initiative, which began in 2009, Conagra Brands has:
Conserved 3.7 billion gallons of water
Decreased Conagra   s carbon footprint by 215,000 metric tons
Reduced waste by 122,700 tons
Decreased packaging materials by more than 32,000 tons
Saved over $280 million
Employee Volunteerism: Conagra employees are dedicated, engaged, and generously give their time and talents to volunteer yearround at organizations that are important to them and their local communities. Throughout fiscal year 2023, Conagra employees
volunteered thousands of hours at more than 100 different nonprofit agencies that serve the communities where we do business.
In fiscal 2024, we expect to transition toward a more normalized operating environment. Of course, our focus on innovation will continue
to be at the forefront of our efforts and we are excited to introduce our biggest slate of new products to date. Our fiscal 2024 lineup
features a compelling mix of convenient, value-added meals, at-home restaurant experiences, and exciting licensed products. As always,
we will support our new products by investing in our modern approach to marketing to drive sales.
At Conagra, we are all working together to drive sustainable growth and margin expansion     and it   s our people who really make it
happen. Every day, I   m proud of our team   s dedication, expertise, and willingness to get the job done. Their efforts are why our business
is well-positioned to drive shareholder value for many years to come.
On behalf of everyone at Conagra Brands, I thank you for your support.
Sincerely,
Sean M. Connolly, President and Chief Executive Officer
1
Organic net sales (which excludes, from reported net sales, the impacts of foreign exchange), adjusted EPS, adjusted operating
margin, and net leverage ratio are measures not calculated in accordance with U.S. generally accepting accounting principles (   GAAP   ).
Please see pages 83-85 for reconciliations of these measures to the most directly comparable GAAP measures.


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