Filed by The J. M. Smucker Company
Commission File No. 001-05111
333-68416
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: The Procter & Gamble Company
Commission File No. 001-00434
This document is being filed pursuant to Rule 425 under the Securities Act of
1933 and is deemed filed pursuant to Rule 14a-12 under the Securities Exchange
Act of 1934.
This presentation supersedes all previously filed presentations.
THE J. M. SMUCKER COMPANY
[GRAPHIC OF JIF, SMUCKER'S & CRISCO]
[SMUCKER'S LOGO] [JIF LOGO]
THE J. M. SMUCKER COMPANY
FORWARD LOOKING INFORMATION
THIS PRESENTATION CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS THAT ARE SUBJECT
TO RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY.
THESE INCLUDE STATEMENTS REGARDING ESTIMATES OF FUTURE EARNINGS AND CASH FLOWS
AND EXPECTATIONS AS TO THE CLOSING OF THE TRANSACTION. OTHER UNCERTAINTIES
INCLUDE, BUT ARE NOT LIMITED TO, GENERAL ECONOMIC CONDITIONS WITHIN THE U.S.,
STRENGTH OF COMMODITY MARKETS FROM WHICH RAW MATERIALS ARE PROCURED AND THE
RELATED IMPACT ON COSTS, ABILITY TO OBTAIN REGULATORY AND SHAREHOLDERS'
APPROVAL, INCLUDING WITHOUT LIMITATION A PRIVATE LETTER RULING FROM THE INTERNAL
REVENUE SERVICE, INTEGRATION OF THE ACQUIRED BUSINESSES IN A TIMELY AND COST
EFFECTIVE MANNER, AND OTHER FACTORS AFFECTING SHARE PRICES AND CAPITAL MARKETS
GENERALLY. OTHER RISKS AND UNCERTAINTIES THAT MAY MATERIALLY AFFECT THE COMPANY
ARE DETAILED FROM TIME TO TIME IN REPORTS FILED BY THE COMPANY WITH THE
SECURITIES AND EXCHANGE COMMISSION, INCLUDING FORMS 10-Q AND 10-K.
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DISCLOSURE
THE COMPANY WILL FILE A PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS
CONCERNING THE PROPOSED MERGER OF THE JIF AND CRISCO BUSINESSES WITH AND INTO
THE COMPANY WITH THE SEC. INVESTORS ARE URGED TO READ THE PROXY STATEMENT/
PROSPECTUS WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH
THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ON THE PROPOSED MERGER.
INVESTORS WILL BE ABLE TO OBTAIN THE DOCUMENTS FREE OF CHARGE AT THE SEC'S WEB
SITE (WWW.SEC.GOV). IN ADDITION, DOCUMENTS FILED WITH THE SEC BY THE COMPANY
WITH RESPECT TO THE PROPOSED TRANSACTION MAY BE OBTAINED FREE OF CHARGE BY
CONTACTING THE J. M. SMUCKER COMPANY, STRAWBERRY LANE, ORRVILLE, OHIO, 44667,
ATTENTION: INVESTOR RELATIONS OR BY TELEPHONE AT (330) 682-3000. THE COMPANY AND
ITS DIRECTORS AND EXECUTIVE OFFICERS MAY BE DEEMED TO BE PARTICIPANTS IN THE
SOLICITATION OF PROXIES FROM THE COMPANY'S SHAREHOLDERS. A LIST OF THE RESUMES
OF THOSE DIRECTORS AND EXECUTIVE OFFICERS AND DESCRIPTIONS OF THEIR INTEREST IN
THE COMPANY IS CONTAINED IN THE COMPANY'S PROXY STATEMENT DATED JULY 10, 2001,
WHICH IS FILED WITH THE SEC. THE COMPANY'S SHAREHOLDERS MAY OBTAIN ADDITIONAL
INFORMATION ABOUT THE INTERESTS OF DIRECTORS AND EXECUTIVE OFFICERS IN THE
PROPOSED MERGER BY READING THE PROXY STATEMENT PROSPECTUS WHEN IT BECOMES
AVAILABLE. INVESTORS SHOULD READ THE PROXY STATEMENT/PROSPECTUS CAREFULLY WHEN
IT BECOMES AVAILABLE BEFORE MAKING ANY VOTING OR INVESTMENT DECISION.
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AGENDA
- The "New" J. M. Smucker Company
- Transaction Overview
- Category & Product Overview
- Enhanced Shareholder Value
- The J. M. Smucker Company Overview
- Summary
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THE "NEW" J. M. SMUCKER COMPANY
[GRAPHIC OF JIF, SMUCKER'S & CRISCO PRODUCTS]
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[GRAPHIC OF FAMILY DINNER]
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THREE LEADING AMERICAN ICON BRANDS
--------------------------
ENHANCED SHAREHOLDER VALUE
--------------------------
[UP ARROW]
----------------------------------------------------
THE "NEW"
J. M. SMUCKER
COMPANY
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[UP ARROW] [UP ARROW] [UP ARROW]
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[SMUCKER'S LOGO] [JIF LOGO]
THE "NEW" J. M. SMUCKER COMPANY
[JIF LOGO] [SMUCKER'S LOGO] [CRISCO LOGO]
- Three #1 American Icon Food Brands
- Highly accretive transaction
- Strong Cash Flow and Balance Sheet
- Platform for Future Growth
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SMUCKER'S, JIF AND CRISCO
-- A POWERFUL COMBINATION --
- Three #1 American icon brands
- Strengthened platform for future growth
- Natural, strategic fit
- Same distribution channels, similar customers and consumers, quality
reputation, and sold in center of aisle within the retail store
- Highly accretive to earnings - expect to increase net income to $95 - $105
million in first full year and potential to grow EPS by 30% - 40%
- Provides substantial cash flow creating greater opportunities to acquire
additional leading brands
- Complements Smucker's extensive broker network to provide more critical
mass to better serve customers
- Expertise in managing and leveraging leading brands
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THE "NEW" J. M. SMUCKER COMPANY
[JIF LOGO]
- Market leader in peanut butter category for 20 years
- 34% share in $860 million peanut butter category
- Superior distribution
- 99% of ACV
- Strong brand equity
[SMUCKER'S LOGO]
- Leader in fruit spreads, toppings, and health foods beverages
- 40% share in $745 million fruit spread category
- Participates in multiple distribution channels
- Superior distribution -
99% of ACV
- Strong brand equity
[CRISCO LOGO]
- Market leader in cooking oil and shortening
- 24% share in $1.5 billion category
- Superior distribution -
99% of ACV
- Strong brand equity
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TRANSACTION OVERVIEW
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TERMS OF THE DEAL
- Transaction uses a "Revised Morris Trust" Structure
- Benefits
- The "new" Smucker emerges as a financially strong company with a
solid balance sheet to support future growth
- Allows Smucker to approximately double sales and nearly triple
earnings from current levels by FY 2003 without leveraging balance
sheet
- Tax-free to both P&G and its shareholders
- Details
- Jif and Crisco and associated assets and certain liabilities spun
off from P&G and immediately merged with Smucker
- P&G shareholders receive one share of "New" Smucker stock for
every 50 shares of P&G
- Smucker shareholders exchange each of their existing shares for
an expected .96 share of "New" Smucker
- Transaction subject to regulatory and Smucker shareholder
approvals and a private letter ruling from the IRS confirming the
tax-free treatment
- Expected Close - 2nd Calendar Quarter 2002
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CATEGORY & PRODUCT OVERVIEW
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THE "NEW" SMUCKER
BRAND LEADERSHIP
[BAR CHART]
SIZE OF % DOLLAR
CATEGORY SHARE OF CATEGORY
FRUIT SPREADS $745 million
SMUCKER'S 40.0%
NEXT BRAND 15.0%
PEANUT BUTTER $860 million
JIF 34.0%
NEXT BRAND 21.0%
COOKING OILS $1.3 billion
CRISCO 25.0%
NEXT BRAND 18.0%
SHORTENING $200 million
CRISCO 73.0%
NEXT BRAND 9.0%
OCTOBER 2001
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SMUCKER
BRAND LEADERSHIP
[BAR CHART]
SIZE OF % DOLLAR
CATEGORY SHARE OF CATEGORY
FRUIT SPREADS $745 million
SMUCKER'S 40.0%
NEXT BRAND 15.0%
NATURAL PEANUT BUTTER $49 million
SMUCKER'S 70.7%
NEXT BRAND 15.2%
ICE CREAM TOPPINGS $105 million
SMUCKER'S 61.9%
NEXT BRAND 23.6%
NATURAL BEVERAGES $100 million
R.W. KNUDSEN 52.9%
NEXT BRAND 15.8%
OCTOBER 2001
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NET SALES BY PRODUCT CATEGORY
BEFORE
------
(Sales: $650 million)
[PIE CHART]
Fruit Spreads 47%
Other 7%
Hand-Held 5%
Formulated 15%
Beverage 10%
Peanut Butter 7%
Toppings/Syrups 9%
AFTER
-----
(Sales: $1.3 billion)
[PIE CHART]
Fruit Spreads 24%
Shortening/Oil 25%
Other 4%
Hand-Held 2%
Formulated 10%
Beverage 5%
Peanut Butter 26%
Toppings/Syrups 4%
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ENHANCED SHAREHOLDER VALUE
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[SMUCKER'S LOGO] [JIF LOGO]
FINANCIAL PERFORMANCE
Actual Estimated Projected
Standalone Standalone Combined
FYE 4/30 FYE 4/30 FYE 4/30
($ in Millions) 2001(1) 2002 2003(2)
---------------- -------- -------- ---------
Revenues $ 651 $ 675 $ 1,355
EBITDA $ 83 $ 92 $ 210-$225
Margin 13% 14% 15%-17%
Net Income $ 33 $ 32-$33 $ 95-$105
E.P.S. $ 1.30 $1.33-$1.37 $1.90-$2.10
- Excludes nonrecurring and changes in accounting method
- Assumes that FY 2003 represents first full year of integration
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SHAREHOLDER VALUE
- Potential for a higher multiple
- Increased liquidity of the shares
- Move to mid-cap stock
- Strong historical dividend practice
- Earnings Accretion
- Current level of earnings will nearly triple
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MAXIMIZING VALUE
- Create Revenue Growth
- Increased and focused marketing expenditures on Jif and Crisco
- New product introductions
- Acquisitions of other leading brands
- Seamless Integration
- Employee transition, information systems & back office/administration
- Utilization of existing broker network
- Capture Synergies
- Leverage marketing, sales, and administrative infrastructure to
support Jif and Crisco
- Complements broker network giving more critical mass to better serve
customers
- Leverage purchasing synergies
- Brand management
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THE J. M. SMUCKER COMPANY OVERVIEW
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[SMUCKER'S LOGO] [JIF LOGO]
SMUCKER BASIC BELIEFS
BASIC BELIEFS ARE AN EXPRESSION OF THE COMPANY'S VALUES AND PRINCIPLES THAT
GUIDE STRATEGIC BEHAVIOR AND DIRECTION. THE BASIC BELIEFS ARE DEEPLY ROOTED IN
THE PHILOSOPHY AND HERITAGE OF THE COMPANY'S FOUNDER, JEROME MONROE SMUCKER.
QUALITY
Quality applies to our products, our manufacturing methods, our marketing
efforts, our people, and our relationships with each other.
PEOPLE
We will be fair with our employees and maintain an environment that encourages
personal responsibility within the Company and the community.
ETHICS
The same, strong ethical values on which our Company was founded provide the
standards by which we conduct our business as well as ourselves.
GROWTH
Along with day-to-day operations, we are also concerned with the potential of
our Company and its employees.
INDEPENDENCE
We have a strong commitment to stewardship of the Smucker name and heritage.
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THE SMUCKER ADVANTAGE
- Consistency of top management team/leadership
- Financial strength and capabilities
- Excellence in marketing and distribution
- Proven ability to grow market share
- History of maximizing potential of leading brands
- Key strategic partnering relationships
- New product expertise
- Commitment to employees and basic beliefs
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[SMUCKER'S LOGO] [JIF LOGO]
SUMMARY
[CRISCO LOGO] [SMUCKER'S LOGO]
[SMUCKER'S LOGO] [JIF LOGO]
THE "NEW" J. M. SMUCKER COMPANY
[JIF LOGO] [SMUCKER'S LOGO] [CRISCO LOGO]
- Three #1 American Icon Food Brands
- Highly accretive transaction
- Strong Cash Flow and Balance Sheet
- Platform for Future Growth
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[SMUCKER'S LOGO] [JIF LOGO]
THE J. M. SMUCKER COMPANY
OTHER INFORMATION
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SMUCKER COMPANY HISTORY
The J. M. Smucker Company was founded in 1897, when the Company's namesake
and founder, Jerome M. Smucker opened a small, custom apple cider mill in
Orrville, Ohio. He began selling his first product apple butter from the back of
a horse-drawn wagon.
[PHOTO]
Today, The J. M. Smucker Company is the market leader in fruit spreads,
ice cream toppings, health and natural foods beverages and natural peanut butter
in North America. Smucker is also known internationally through other brand
names: "Double Fruit," "Shirriff," and "Good Morning" in Canada, and "IXL" in
Australia.
[PHOTO]
For over 100 years, The J. M. Smucker Company has been headquartered in
Orrville, Ohio and has been family run for four generations. The Company has
over 2,000 employees worldwide and distributes products in more than 70
countries.
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STRATEGIC BUSINESS AREAS:
MARKETS SERVED
BUSINESS AREA
- CONSUMER Grocery, Military, Mass Retail, Warehouse Club
- INDUSTRIAL Formulated ingredients for use in products of other
food manufacturers
- FOODSERVICE Restaurants, Transportation, Healthcare, and
Education
- BEVERAGE Health & Natural Foods and Grocery
- SPECIALTY Specialty, Gourmet shops, and Grocery
- INTERNATIONAL Canada, Australia, Mexico and Export (primarily
China and the Pacific Rim, Latin America,
Eastern Europe, and the Middle East)
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CATEGORIES AND MAJOR BRANDS
FRUIT SPREADS
- SMUCKER'S
- TRADITIONAL
- LOW SUGAR
- SIMPLY 100% FRUIT
- SUGAR FREE
- SNACKERS
- MARY ELLEN
- LOST ACRES
- DICKINSON'S
- DOUBLE FRUIT (CANADA)
- GOOD MORNING (CANADA)
- SHIRRIFF (CANADA)*
- IXL (AUSTRALIA)
- ALLOWRIE (AUSTRALIA)
DESSERT TOPPINGS
- SMUCKER'S
- SPOONABLES
- SUNDAE SYRUPS
- SPECIAL RECIPE
- MAGIC SHELL
- DOVE*
- 3 MUSKETEERS*
- SUGAR FREE
- PLATESCAPERS
- DICKINSON'S
PEANUT BUTTER
- SMUCKER'S
- NATURAL
- GOOBER
- LAURA SCUDDER'S
- ADAMS
BEVERAGES
- R. W. KNUDSEN
- SPRITZER
- SIMPLY NUTRITIOUS
- RECHARGE
- SANTA CRUZ ORGANIC
- AFTER THE FALL
- NATURAL BREW
- ROCKET JUICE
- SMUCKER'S POWDERED LEMONADE
SPECIALTIES
- UNCRUSTABLES
- FRUIT SYRUPS
- MUSTARDS & CONDIMENTS
- MARINADES, SAUCES, DRESSINGS
- FRUIT BARS (IXL)
CONFECTIONS**
- SMUCKER'S
- JELLY BEANS
*LICENSED TRADEMARKS
** MARKETED UNDER LICENSE BY BRACH
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MANAGEMENT WITH SUCCESSFUL TRACK
RECORD IN BRANDED FOOD
TIMOTHY SMUCKER Chairman & Co-CEO
- 4th generation of family management
- 30+ years of leadership in the food industry
RICHARD SMUCKER President & Co-CEO
- 4th generation of family management
- 30+ years of leadership in the food industry
STEVE ELLCESSOR Vice President, Finance & Administration & General Counsel
- 15 years with The J. M. Smucker
VINCENT BYRD Vice President & General Manager, Consumer Market
- 25 years with The J. M. Smucker Company
- Treasurer; Managing Director, Henry Jones Foods
(Australia); and Vice President, International Markets
STEVE OAKLAND Vice President & General Manager, Crisco
- 18 years with The J. M. Smucker Company
- General Manager, J. M. Smucker (Canada); Vice President
& General Manager, Foodservice Market
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ACQUISITIONS SINCE 1996
1997 Kraft (U.S. Retail) Fruit Spreads
1998 Silvan Foods (Allowrie Brand) Fruit Spreads - Australia
1998 Garratt & Gunn Ltd. (Mrs. Wiggle's Brand) Juice Beverages
1998 Beta Fruit Bars - Australia
1998 Carriere Sweet Spreads - Canada
1998 menUSAvers Frozen PB&J Sandwich -
Foodservice
1999 Adams Natural Peanut Butter
1999 Danone S.A. Fruit Ingredients - Brazil
2000 Taylor's Foods Pty. Ltd. Marinades, Sauces, and
Salad Dressings - Australia
2000 Glen Ewin Fruit Spreads - Australia
2001 IFF Fruit Preparation Business Ingredients - U.S.
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NET SALES
[BAR CHART]
ANNUALIZED GROWTH RATE
10 YEAR = 4.2%
5 YEAR = 4.4%
$ IN MILLIONS
-------------
1991 $430.8
1992 $459.3
1993 $465.5
1994 $479.1
1995 $512.3
1996 $525.5
1997 $534.7
1998 $574.9
1999 $612.7
2000 $641.9
2001 $651.2
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EARNINGS & CASH FLOW PER SHARE
[BAR AND LINE CHART]
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
$ PER SHARE
EPS 1.07 1.16 1.27 1.10 1.12 1.01 1.06 1.25 1.30 1.26 1.30
CASH FLOW 1.47 1.59 1.71 1.61 1.67 1.61 1.81 2.03 2.10 2.17 2.36
Excludes nonrecurring and cumulative effect adjustment
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THE J. M. SMUCKER COMPANY
[GRAPHIC OF JIF, SMUCKER'S & CRISCO]