Good morning and welcome to Campbell’s Fourth Quarter and Full-Year Fiscal 2020 Earnings Presentation. I’m Rebecca Gardy, Vice President of Investor Relations. As usual, we've created slides to accompany our earnings presentation. You will find these slides posted on our website this morning at investor.campbellsoupcompany.com. In addition to this earnings presentation, we will host an analyst Q&A-only session later this morning at 8:30 a.m. Eastern. A replay of the webcast and a transcript of this earnings presentation, as well as of the Q&A session, will also be available on the website at investor.campbellsoupcompany.com. As part of our remarks this morning, we will make forward-looking statements, which reflect our current expectations. These statements rely on assumptions and estimates, which could be inaccurate and are subject to risk. Please refer to Slide 3 or our SEC filings for a list of factors that could cause our actual results to vary materially from those anticipated in forward-looking statements. Because we use non-GAAP measures to describe our business performance, we have provided a reconciliation of these measures to the most directly comparable GAAP measures, which is included in the appendix of this presentation and will be posted to the IR section of our website as part of the transcript of today’s call. On Slide 4, you can see our agenda. You will hear from Mark Clouse, Campbell’s President and CEO; and Mick Beekhuizen, Chief Financial Officer. Mark will share his thoughts on our performance in the quarter and on the year, and Mick will then walk through the financial details and share our outlook for the first quarter of fiscal 2021. With that, let me turn it over to Marl. Mark?

Thanks Rebecca. As we continue to navigate the COVID-19 crisis, we hope all of you listening today and your families, are staying safe and healthy. Our thoughts remain with all those impacted during these challenging times. Our most important responsibility is to take care of our people. Ensuring their health, safety and well-being continues to be our highest priority. We also remain focused and committed to helping the communities where our people live and work. Our support, both financially and in food donations to Campbell hometowns across North America now stands at $6 million since the onset of the pandemic. Before I review our financial results, I must once again express my deepest gratitude, pride, and appreciation for the extraordinary performance across Campbell, starting with our front-line teams. We have been operating in this challenging environment for six months, and our teams continue to exhibit determination, commitment, and resilience. They have adapted to heightened safety protocols to get our products to customers and consumers across North America, and they have been there for one another and for their communities. I am also sincerely thankful for our sales team and the close partnerships with our customers during these uncertain times. I truly believe the level of collaboration and transparency that has been displayed during this difficult and complicated period will create an environment for continuing to build and grow our businesses together well into the future. Finally, I’d like to thank our headquarters team for demonstrating such tremendous commitment and passion in supporting the business and our teams in the field. I’m so proud of how they have adapted to not only a virtual work environment, but also the way in which they have found new and more efficient ways to work. Now, let’s turn to our performance. Campbell’s simplified, focused…

Thanks Mark. As Mark shared, our fourth quarter results were significantly impacted by the COVID-19 pandemic. Our net sales increased as demand remained elevated throughout the quarter and we continued to invest in our brands. At the same time, we were able to more than offset incremental COVID-19 related costs resulting in gross margin expansion, and strong EBIT and EPS growth. Finally, we generated significant operating cash flow and divestiture proceeds in fiscal 2020, enabling us to reduce our leverage and achieve our original target of 3 times adjusted EBITDA, a year earlier than originally anticipated while we continued to invest in the business and maintain our dividend. For the fourth quarter, we delivered total topline organic growth of 12% compared to the prior year. Organic net sales for Meals & Beverages increased 19% for the quarter, driven by double-digit gains across a majority of our retail brands. In Snacks, we delivered organic net sales growth of 7% driven by gains in 8 of our 9 power brands and our fresh bakery products. We are pleased with our adjusted gross margin improvement stemming primarily from the benefits of supply chain productivity improvements and cost savings initiatives, mark to market gains on outstanding commodity hedges, improved operating leverage and favorable product mix, offset partially by higher supply chain costs related to COVID-19 and moderate cost inflation. The combination of strong top line growth and gross margin improvement combined with continued investment in our brands, resulted in 22% adjusted EBIT growth in the quarter. Year-over-year adjusted EPS growth was 50% for the quarter reflecting our strong adjusted EBIT performance, and the benefit of lower net interest expense as a result of successful deleveraging. Looking at the full year, I’m pleased with the financial results for fiscal 2020, we grew the top line…

Thank you, Mick. As we just reviewed, fiscal 2020 was a year like no other in recent memory and an exceptional year of performance for Campbell. And, we have already jumped right into fiscal 2021. I thought a good discipline from last year was to provide our key proof points or milestones that help frame our priorities for fiscal 2021 and help keep everyone aligned to what is working and what is not. Key metrics to measure our progress going forward include. Retention of new households, returning to positive soup shares, sustained progress on Snacks, and better contribution from innovation are all key areas of focus on our growth agenda. And finally, this growth will be supported by continued value capture and Snacks margin, closely managing COVID-19 costs and key capital initiatives. We will be continuing to prioritize the safety and well-being of our people and investing to expand our capabilities to meet the evolving consumer and retail environment. Thank you for your time this morning. Rebecca, over to you.

Thanks, Mark. This concludes our prepared remarks. Our live Q&A call will begin at 8:30 a.m. Eastern this morning.

Ladies and gentlemen, thank you for standing by and welcome to the Q4 and fiscal 2020 Campbell Soup Company live Q&A session. At this time, all participants’ lines are in a listen-only mode. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions] I would now like to hand the conference over to Rebecca Gardy, Vice President, Investor Relations. Ma’am you may begin.

Thank you, operator. I hope everyone has had the chance this morning to read our press release and listen to our pre-recorded management presentation, both of which are available on the Investor Relations section of campbellsoupcompany.com. In addition, we have posted a transcript of the pre-recorded presentation. After the conclusion of today's live Q&A session, we will post the transcript and an audio replay of this call. Please note that during today's Q&A session we may make forward-looking statements, which reflect our current expectations about our business plans, our first quarter 2021 guidance and the impact of the COVID-19 pandemic on our business. These statements rely on assumptions and estimates which could be inaccurate and are subject to risk. We will also refer to certain non-GAAP measures. Please refer to today's earnings release available on the Investors section of our website campbellsoupcompany.com for a list of factors that could cause our actual results to vary materially from those anticipated in forward-looking statements, and for reconciliations of non-GAAP measures to their most directly comparable GAAP measures. Joining me today are Mark Clouse, Campbell's President and CEO; and Mick Beekhuizen, Chief Financial Officer. We kindly ask that you limit yourself to one question. And now with that, I'll now turn it over to the operator for the first question. Operator?

Thank you. And our first question comes from Andrew Lazar from Barclays. Your line is open.

Thanks for the question. Mark, I know that fiscal ‘21 was sort of initially as the way you laid it out in the multi-year plan, thought to be a pretty good year in terms of reframing the Soup category for Campbell through innovation and other means. And I'm trying to get a sense of what's maybe changed or what needs to change around the strategy for this Soup journey, if anything, given recent trends, because if you think about it, Campbell has picked up so many new households and users that I'm thinking the focus maybe now shifts more from retaining -- or to retaining users rather than maybe slowly gaining new ones. I'm trying to get a sense of how that, if at all, changes the sort of the approach and the journey around Soup?

Yes, no, great question. I think, the good news is that a lot of the strategic framework of what we had set out to accomplish on Soup initially was laid out in such a way where the primary goal or the objective was to improve relevance of the category and begin to add or recover households that had lost. As you point out, I think the best way to describe where we are right now is that we've, through the pandemic, been able to jump forward on that strategic journey. And if you go back and kind of think about what did we set out to do in '20, it was really to strengthen the base, improve quality, make some material investments in the business to begin to re-establish or rebuild that relevancy, and then begin to build back the innovation funnel. If you kind of think about what we then accomplished in ‘20, really across the board, we well went beyond what our expectations are. So as we go into '21, although I do think it is more about retaining those households, a lot of the strategies and the things that we had planned to do are things that we will continue to do I think just with a higher degree of probability of success and a better set of insights on what's compelling consumers and what's been working or not working. So, a lot of -- I think there's been a lot of discussion or debate about when you kind of come through all this, how do you feel about where you are in the strategic journey on Soup, and that is why to some degree I tried to cover in the remarks that this to me on Soup is a little bit less about peaks and valleys…

Our next question comes from Ken Goldman from JP Morgan. Your line is open.

Mark, you said that the operating environment is creating opportunities I think to evaluate future efficiencies as you learn from COVID. Can you maybe elaborate on what that means? How big the opportunity might be? I know it's hard to know for sure right now, but a lot of your peers have discussed this in sort of rough terms, maybe some travel costs can be reduced. I'm just trying to get a sense from you of what you're seeing and the size of that if possible?

Yes. Sure, you're right. It's hard to quantify. I think the way I would describe it is, it's creating drill sites for us for future productivity. And that's I think quite helpful because we've been able to create this kind of, I'd say real world case studies and laboratory to test a few things. I think there's three primary areas though that we see as future opportunity. I think the first is in optimizing the portfolio, right? So where -- are we over-skewed, under-skewed, where are we really getting incrementality from certain extensions of our portfolio, how do we really think about optimizing the effectiveness of our offerings to really match what consumers’ needs are and to create room for what we think is going to be meaningful innovation, while setting up a more efficient overall approach to the portfolio. I think the second area is, as we've seen kind of full utilization across our entire supply chain and route to market, I think it's enabled us to understand some places almost out of necessity in the short term that we've done that we think in the longer term our ability to create certain consolidations, how to think about perhaps hubs to supply in a more efficient way, especially as you think about our Snacks business, where you've got a little bit more complicated route to market. I think we've been able to find even if it's in the face of some higher costs in this year, but as pointed out places where if we can improve that architecture structure, I see opportunity to save money. And then the third, where I think a lot of people spend time talking is how do you learn from this virtual work environment, ways to operate companies more efficiency -- efficiently. Do you…

Thank you. Our next question comes from Nik Modi from RBC Capital Markets. Your line is open.

Hey, Mark. I just wanted to revisit the discussion on these new households. So, it's going to obviously be important part of how your growth curve looks over the next couple of quarters and in the next couple of years. So can you just talk about the composition of these new households, and how they might differ from kind of what you were seeing pre-COVID? And just give an example, from the data we've reviewed, which suggests new Prego consumers are younger singles, spend higher online than the average due to vegan and vegetarians, and tend to dine out two to five times a week. So I'm just curious if this is consistent with what you've been observing in your data?

Yes, it's very consistent. So we would see, essentially in the households we've added just shy of 50% of those new households are coming from younger consumers. That’s combination of different size households, can be a little bit older Millennials who are now just beginning, young families working with a little bit of a different budget perhaps than they did when they were younger, as well as much smaller households. And I think, as we think about this going forward, those become as you would imagine a very, very high priority for us. And one of the great things about Q4 and I know even coming out of Q3, I had a lot of questions about, okay, even as you're navigating some of the supply pressure, you continue to invest at a very high level. And I think that was incredibly valuable for us in the fourth quarter. And it really prove some terrific learnings and results. One of the things that I think harder to see in the numbers in Q4. But if you take e-commerce as an example where we know there's a higher index to where these particular younger consumers are shopping and gaining information, 86% of our spending on our Meals & Beverage business in the fourth quarter was on digital to support this through a combination of retailers platforms, as well as a whole range of different tactics to really try to understand what works and what doesn't. So as we go into this year, we're going to be more effective. But what we found is we can have a big impact with that population. Our e-commerce business was up over 100% in the fourth quarter. It now represents for us as a company, it essentially doubled in 2020, it’s kind of low-single-digits. Now it's…

Thank you. Our next question comes from Jason English from Goldman Sachs. Your line is open.

Two reasonably straightforward questions. First, in the press release, you mentioned some gains on commodity hedges. You explained to effectively account the majority of corporate costs decrease, which implies like $37 million. But in the presentation, you say it only partially offset the commodity inflation, which suggests less than $15 million. So, first question, what is the magnitude of that? Second question -- I'm going to just bundle these together, net pricing. It was surprising to see that your trade spend is still up year-on-year and promos and net drag on sales. I think it's surprising in context of what's happening with the promotional line overall. So, two parts to that question. One, where's money going? Two, as we think forward, we're hearing from pretty much every company that they're expecting promotions to kind of come back into the market and become more elevated going forward. Do you expect that to happen as well? And given that it's already negative, would you expect that net drag to increase as we go forward? Thank you.

Yes. Okay. Why don't I take the first one, Jason? So, with regard to your first question to clarify, the mark-to-market gains on commodity hedges, it’s in and around $20 million.

Got it. Thank you.

Yes. On the promotional, what we're seeing promotionally is, is pricing. I mean we have framed it a little bit as a relatively neutral position in the quarter. I think our net pricing as a contributor within our gross margin bridge was essentially flat. There's a couple of things that are underlying that. We are seeing in -- especially in categories where there is more pressure on supply, some pullback in promotion. I think one of the things we're trying to wrestle with a little bit through all this is okay, I promote the -- if I promote the business with retailers, I may drive a growth rate of 10% or 15%. I can supply maybe 5% or 6% growth. And if I don't promote, I only grow 2%, right? So we're trying to figure out how to calibrate the right kind of promotion and support to get to the best position possible. I do expect as we go through ‘21, that's going to moderate and return to more normality. I think it'll be a little choppier in the first quarter. But as we start to get into Soup season and beyond, I think you'll see a much more consistent promotional calendar and schedule as we advance. I think in the near term, what we are seeing though is in the absence of some of those and as we shift, mix the things where we may have more the supply and better position, I think you're seeing us continue to promote fairly aggressively. And again, I think we're working very collaboratively with the retailers to try to make sure too that if you're a -- I mentioned this last time, if you're a high-low retailer versus an EDLP retailer, and you're pulling back on promotions, it does create a little bit more of a disadvantage in certain customers. And we're trying to work hard to make sure that we're equitable in our approach and that we're supporting customers navigate through that in the best way possible. So there's a little bit of mix that may be elevating as well. I think from my perspective though, I think how I would have depicted it is relatively neutral with a trajectory to increase as we go into ‘21. Mick, anything to add kind of the financial bridge side of it?

No, I agree with that. I think that's pricing -- I mean that you also see in one of our bridges in the materials, it was actually net neutral.

Thank you. Our next question comes from Chris Growe from Stifel. Your line is open.

I just -- I had a question for you. I heard about some supply chain challenges in certain parts of your business, and at the same time, inability to ship out of consumption, some of the orders I think like in Soup. So I want to get a better sense if I could about your production capabilities, especially the areas in which you're investing to improve your supply chain. And then just to get a sense around retail inventory or were there still some areas that they build-up or they -- kind of where you stand on retail inventories overall?

Great question. So, let me kind of chunk that into the three pieces you kind of asked. First, as far as the supply chain capability and our execution, I feel great about how the team has shown up. A lot of discussion in the Q3 earnings call and as we kind of guided to Q4, the real improvement or the uptake in what we guided to, to where we landed, was improvement in capacity as it related to Soup, which enabled us to replenish inventory at a higher level, which was our goal. Not fully complete yet. I think you'll continue to see that going forward. But just on the basis of -- when I talk about supply chain challenges, these are not executional challenges. This is not us performing. This is not COVID-related impact. This is simply the sustained level of demand in certain businesses, where we may have a little less flexibility to be able to kind of move to that higher level. So first off, that's kind of the starting point. I think what you're seeing in this quarter is some variation between businesses, right? If we were in Q3, we were talking a little bit about the depletion of inventory on Soup. I think the great news in Q4 is, we were able to replenish in many areas. One of the dynamics that's happening as you'll see throughout Q1 is the return of the vast majority of the SKUs that we had removed. That there will be some that we choose not to come back with that we think are just good business decisions. But that pipeline still remains. And I would still expect to see our ability to ship ahead of consumption as it relates to Soup as we go through the first quarter. And…

Thank you. Our next question comes from Robert Moskow from Credit Suisse. Your line is open.

Two quick ones. The sales guidance for 1Q, do you expect in total to ship to consumption in 1Q or does that include some degree of shipping above consumption in that range? And secondarily, I think you quantified last quarter exactly how much inventory you needed to reload. I think the number was up $200 million. Maybe you can give us an update on that. And last thing, there was a lot of margin compression on Snacks, I think attributed to the A&C investment in quarter. But you also talked about COVID costs really hitting Snacks harder. So, why is there margin compression in Snacks related to COVID? But in Soup the margins are actually going higher. Is it just different businesses in terms of how the COVID costs went through them?

Yes. So, let me first talk a little bit about inventory, again, and what we expect in Q1. So we have a couple of things that are going on in Q1 that I think are important for people try to calibrate on. And I know you're coming out of a quarter where your organic growth is 12%, seeing a guide of 5% to 7% may feel to some a little bit like, okay, well, that's not -- why aren't we just running at the rate going forward. I think there's a couple of variables in there and then I'll -- and then on the tail end I'll catch your inventory piece. The first thing is that we do expect demand -- consumption demand to be elevated, especially on the Meals & Beverage side. But one thing that is worth noting is it's a significantly bigger base in the first quarter. So although I do think growth will be there, I just think the absolute numbers are going to be a little bit moderated from where we are. Right now what we have planned is to continue to recover some inventory on the Meals & Beverage side. But to be honest, we're pushing the team hard to try to create room to recover even more. I would say from a total inventory recovery position across the company, we're probably about half way done. So I still think further ahead on Soup, not as far ahead on some of the other businesses, so I would still expect there to be over the course of Q1, some may even bleed a little bit into Q2. But I'm still expecting about half of that, Rob, to come back over the first half, primarily Q1 but over the first half of the year. And again,…

Yes, sure. Okay. So let me give you a little bit of context around the COVID cost, we had about $25 million of COVID cost in Q3. If you look at Q4 -- because Q3 was obviously only half impacted by COVID, Q4 we had a full quarter, the overall costs were double that, give or take about $50 million. If you look at the distribution between the two divisions, you see that about two-thirds of that is Snacks, which is really driven by the nature of the manufacturing footprint of the Snacks division i.e. we have many more facilities obviously there. Then the other piece -- so on the one end you had more COVID costs in Snacks than we had in Meals & Beverages. And the other piece that kind of looking through the quarter, we had increased operating leverage disproportionately within the M&B business driven by obviously much more volume than what we saw on the Snacks side. So, hopefully that gives you a little bit of a sense of the dynamic there.

Yes. And just to add a little more color. As you go then into the first quarter and into '21, we essentially are modeling those COVID costs to be 50% or closer to Q3 I think.

Yes, basically more in line with it. I agree with that, yes.

Thank you. And we will take our last question from John Baumgartner from Wells Fargo. Your line is open.

Mark, I just wanted to build on Jason's question in that, the Snyder's-Lance brands, those tended to over promote relative to the categories in the past and given the continued reductions in promo we're seeing in conjunction with I guess limited moderation in base volume growth into Q1, I guess I'm curious: A, how do you feel about the ability to use an environment to sort of wean consumers off at higher promo, especially if you're getting higher ROI on the marketing dollars; and then B, to what extent you see the environment offering opportunities to maybe accelerate any sort of increase in the share of your own brands as opposed to the aisle adder partner brands? Thank you.

Yes. Well, as I've said a couple of times before, I think what's unique about our Snacks business is the differentiated position that we're in, in the sense that we tend to play in a little more added value segments within larger categories. And I think that, that does position us to be in a position where we should be less dependent on merchandising and promotion. I think the reality is though on something, for example, like Snyder’s, Hanover in the pretzel business, it's a very competitive segment as it is in Kettle chips right now as well. So, I think, one of the things we've learned last year, if you remember turning back the clock, actually all the way back to '19, our ability to get to the right price points on promotion just given the nature of snacking, the right level of frequency will always be an important underpinning to execution in Snacks. But I think that if you pair that then with where we’ve really been building added value as it relates to the equity of the businesses, as we've turned campaigns back on, especially on the Snyder’s businesses, we've been able to see continued progress. Let me point to late July as a great example, first national campaign that we've ever turned on or had on the business. We turned that on in the fourth quarter. That business grew 30% on a 52-week basis and share gains of over 1 point and a fairly contested tortilla chips segment. But because of the premium positioning, relative to which lies great communication, we could do that in a way where we were able to achieve that without necessarily having to drop down into the price points that more mainstream players have. So, that's the balancing act we're trying to walk and I think if we get that formula right as we have on brands, like Milano and Farmhouse and on Pepperidge Farm, even Goldfish, although that one is -- again, you've got a very habitual program calendar for Goldfish that when we see -- when that deviates, that does put pressure on the business. But as we get back into normality on that, as we roll through the year, I think most of these businesses we're going to be able to do trade in a more efficient way than perhaps history. But we still got to have enough there that we remain competitive on display. And making sure that we recognize what's happening around us competitively.

Thank you. And that does conclude our question-and-answer session for today's conference. I'd now like to turn the conference back over to Mark Clouse for any closing remarks.

Yes. Thanks, everybody, for joining. I hope you're appreciating the new format. I think we will kind of stick with this where we try to publish our comments earlier and give people a chance to kind of digest and read through and then focus our time together in Q&A when we're on the call. I know there's a lot to digest in this. I know it's a tricky time too. We've certainly tried to build as much conviction and I guess credibility in being as transparent as we can to give the information as we get it and give perspective. Of course, that always creates a little bit of a dynamic that we need to make sure that we're updating it as we go. And we will. I think as we navigate this year, we'll try to make sure that as we see things change or as capacity or demand moves, we'll be as upfront as possible. I don't know that, that translates and I don't think it will to quarterly guidance each time. But we're certainly trying to keep everybody as informed as we can be. And I just would close with something that I talked about in my comments, which is, if you take a step back and you take stock of where the company is right now, and you say, okay, where -- a year ago, where were we expecting to be and how do we feel about navigating this kind of moment in time? I have to say that across the board strategically I see tremendous benefit that we've been able to extract from a tough moment. And I think that, that is going to set us up very well for the future. And if I think about, again, not perhaps the peaks and the valleys…

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation and you may now disconnect. Everyone, have a wonderful day.