McCormick & Company, Incorporated Voting CS Barclays 19th Annual Global Consumer Conference

I would like to welcome back McCormick to our conference, and with us today are President and CEO, Brendan Foley, and CFO, Marcos Gabriel. Welcome, gentlemen. It's truly great to be back with you in Boston. In lieu of a fireside chat, Brendan and Marcos will be walking us through some prepared remarks. Brendan, over to you, and then we'll take it to the breakout afterwards. Thanks again for being here.

Thank you. There we go. Hopefully you can all hear me?

Yep. Yeah. Okay, great. Thank you, Andrew, and good morning.

It's a pleasure to be back at the Barclays Conference in Boston. I'm going to flip to this next slide. Before we begin, let me first acknowledge the forward-looking information. Great. There we go. Make sure everyone reads that word for word. With that noted, today's presentation is organized around four key themes that reflect the strength of our business and the opportunities ahead. First, we'll highlight how we're building on a strong flavor-centric foundation, grounded in our leadership in flavor, our advantage portfolio, and the trusted brands and capabilities that differentiate McCormick. Second, we'll discuss how we're expanding our flavor focus and growth opportunities through the combination with Unilever Foods.

Third, we'll cover how we're preparing for integration and synergy capture, and with a focus on disciplined execution, operational readiness, and the actions needed to unlock value as we bring the capabilities together. Finally, we'll address how we're supporting value creation and deleveraging, reinforcing our commitment to strong financial discipline, cash generation, and long-term shareholder value. Together, these themes frame the conversation for today and demonstrate how we're positioning the business for sustainable growth, stronger execution, and continued leadership in flavor. Let's start with an introduction to McCormick. At McCormick, we create and deliver flavors that enhance the taste of food and beverages. For nearly 140 years, we've been focused on our purpose to make life more flavorful, guided by our vision to be the most trusted source of flavor across food and beverage.

Our portfolio includes leading brands in the flavor industry, household names that consumers trust for their quality and taste, and they are trusted by our customers. In fact, globally, McCormick flavors are enjoyed by nearly a half a billion people every single day. This speaks to the power of our brands, the flavor they deliver, our capabilities, reach, and our growth potential. We serve a broad range of customers and operate across every channel, from traditional brick and mortar to e-commerce, and from food service to CPG customers. We operate in advantaged categories across both of our segments, and they continue to project strong growth. In our consumer segment, we offer products at every price point, from premium to value, to meet all needs. Our brands have been part of kitchens and families for generations, and we continue to innovate.

We are winning over younger consumers who are shaping new cooking and eating behaviors, and many aligned with health and wellness trends. In flavor solutions, we flavor some of the world's iconic brands, as well as fast-growing emerging brands and private label, making us a key part of the innovation that guides the food industry. Our two segments complement each other, and this reinforces what differentiates McCormick. The scale, insights, and technology that are leveraged from both are meaningful and uniquely position us to cater to the entire flavor market and shape its future direction. Flavor is one of the most attractive, fastest-growing categories within food. It is underpinned by structural tailwinds and offers meaningful runway for the company to capture future growth. It is the number one purchase driver across cuisines, occasions, and demographics.

It transcends age, culture, dietary preferences, and income levels, making it both resilient and highly relevant in a dynamic consumer environment. We are differentiated among food and beverage peers, and let me explain how. Others compete for calories every day. We flavor them. While many peer companies compete across multiple categories every day, we are intentionally focused on flavor, enabling us to be present in every consumption opportunity. Our differentiation lies in where and how we compete. As preferences evolve and calories shift, the demand for flavor continues to grow, and McCormick is uniquely positioned to capture that growth. We see the world of food and beverage through the lens of flavor. We deliver it more broadly and more deeply than anyone else.

Our portfolio of herbs, spices, seasonings, condiments, and sauces is strongly positioned to support today's health and wellness priorities, the continued appeal of cooking at home, and emerging flavor trends. Gen Z, who are our new and future consumers, over-index to flavor. They are leaning into and exploring higher quality, premium global flavors, and they're looking to create those restaurant-quality meals at home. McCormick is a global leader in flavor with strong scale, category expertise, innovation, and consumer insights. Our growth strategy focuses on advantaged categories, productivity through CCI, and targeted investments in high return opportunities, supported by a resilient business model operating across environments. That resilience remains important today. Let me use this moment now to provide an updated perspective on the current environment.

Starting with EMEA and Asia Pacific, we are seeing a continuation of strong performance led by our consumer segment and continued strength in McCormick de Mexico. In the Americas region, the consumer backdrop, particularly in the U.S., is increasingly challenging. We are managing through uneven category and channel dynamics, which have become more pronounced recently. Across the U.S. food industry, we continue to see volume declines. Consumers remain under pressure, and we are making deliberate choices to stretch their budgets. We are seeing behaviors such as using more of what's already in the pantry, making meals from leftovers, and looking for simple, affordable ways to add flavor at home. These behaviors reinforce the relevance of our portfolio, particularly in herbs, spices, and seasonings.

We are encouraged by the signs of progress from several of the growth initiatives we outlined in our last call, including revenue growth management, targeted value marketing, and innovation alongside expanded distribution. These actions are helping to drive consumption improvement in our core categories, even in an increasingly challenging backdrop. Specifically, our consumption trends are meaningfully improving in herbs, spices and seasonings and condiments and sauces, including hot sauce. These are indicators of continued consumer engagement with flavor and at-home meal preparation. At the same time, we continue to work through categories such as recipe mixes and other parts of the portfolio where performance remains pressured. We are encouraged by the recent momentum in core categories. Our shipments for the quarter roughly reflect our improved consumption. In flavor solutions, we continue to see solid organic sales growth in the global segment.

Although we now expect the mix of growth to be more pricing driven with flattish volume. Softer trends in the U.S. are impacting some of our customers, primarily QSRs and some food manufacturers. Even with this near-term softness, the segment remains well-positioned through reformulation and innovation, supported by customer relationships, technical capabilities, and flavor expertise. Overall, our plans and initiatives are designed for these conditions, and we are moving in the right direction, and we remain on track with our outlook for FY 2026. Grounded in the resilience of our model and long-term growth strategy, we are looking ahead to the next chapter for McCormick with Unilever Foods. M&A has been an important part of McCormick's long-term value creation model and a capability that has been proven over many years.

It has strengthened our leadership in flavor, expanded us into advantage categories, built scale, and enhanced our capabilities across both consumer and flavor solutions. Over the past decade, acquisitions contributed approximately 2 points of growth on top of a 4% organic sales CAGR in constant currency, while also delivering synergies, earnings accretion, and stronger brand equity. Importantly, our integration playbook is repeatable, tested, and grounded in strong strategic rationale and proven value creation. Building on that proven playbook, the transaction with Unilever Foods represents a compelling next step in McCormick's journey as a global flavor leader. We're making good progress on the transaction, and as previously noted, today, we are sharing additional context on growth, synergies, and integration plans. Starting with the strategic rationale, the transaction strengthens our competitive advantages and creates a pure-play global flavor leader with $20 billion in sales.

Together, we will have an expanded portfolio of globally recognized brands supported by industry-leading investment. The combined company will also have a balanced geographic profile and a more diverse global distribution to bring these brands to market. We see multiple levers to drive growth, supporting margin expansion and enabling continued brand reinvestment. We also see meaningful cost synergy that will support reinvestments as well as earnings accretion by year one post-close. This is about building a stronger global flavor company with focused scale in attractive and growing categories. We are also excited about the operating model we announced in July, led by four divisions, each with a compelling growth outlook. This model is designed to place consumers and customers at the center of the combined business, enabling disciplined execution, enhanced innovation, and sustainable long-term growth.