Market Overview

Campbell Announces Significant Actions Following Board-Led Strategy and Portfolio Review

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  • Focusing Portfolio on Campbell Snacks and Campbell Meals and Beverages
    in North America, Leveraging Iconic Brands and Leading Market Positions
  • Pursuing Divestitures of Campbell International (including Arnott's
    and the Kelsen Group) and Campbell Fresh to Increase Focus; Proceeds
    will be Used to Significantly Reduce Debt
  • Raising Overall Cost Savings Target to $945 Million by FY2022;
    Includes Snyder's-Lance Savings and $150 Million in New Actions
  • Updates Long-term Targets

Campbell Soup Company (NYSE:CPB) today announced significant
actions it is taking as part of its Board-led strategy and portfolio
review to improve performance and drive shareholder value. The actions
include:

1. Focusing the company on two distinct businesses, Campbell Snacks and
Campbell Meals and Beverages, in its core North American market;
2.
Pursuing the divestitures of non-core businesses to focus and improve
the company's portfolio; proceeds will be used to significantly reduce
debt; and,
3. Increasing its cost savings target to $945 million by
FY2022, including the expected Snyder's-Lance savings.

Campbell's interim President and CEO Keith McLoughlin said, "Campbell's
Board of Directors considered a full slate of strategic options,
including optimizing the portfolio, divesting businesses, splitting the
company, and pursuing a sale. The Board concluded that, at this time,
the best path forward to drive shareholder value is to focus the company
on two core businesses in the North American market with a proven
consumer packaged goods business model. Importantly, the Board remains
open and committed to evaluating all strategic options to enhance value
in the future.

"Our plan will build upon our existing strengths. Our new leadership
team will concentrate on significantly improving operational discipline
through a rigorous management model that aligns the enterprise from
strategy through execution. We are moving forward with a sense of
urgency to complete these changes in fiscal 2019, setting the foundation
for sustainable, profitable growth in fiscal 2020 and beyond. The Board
and management team are committed to deleveraging the company, retaining
our investment grade credit rating and maintaining our dividend. We will
pursue further actions in addition to those announced today to optimize
our portfolio and performance."

Building a Focused North American Company

Campbell will continue to provide consumers with great tasting,
high-quality real food. Across the portfolio, the company's brands will
leverage consumer insights and trends to drive relevance, including
health and well-being, snacking and convenience. Each of Campbell's
brands will be managed within a focused and disciplined framework of two
differentiated portfolio roles:

  • Drive Profitable Growth – These powerful and exciting brands
    will be managed to grow disproportionately relative to the categories
    in which they compete. These include leading brands such as Cape
    Cod, Goldfish, Kettle Brand, Lance, Late July, Pace, Pacific,
    Pepperidge Farm Farmhouse
    and Milano cookies, Prego and
    Snyder's of Hanover.
    Investments in innovation and consumer
    engagement will enable these brands to leverage evolving consumer
    tastes and trends.
  • Maximize Margin & Cash Flow – These at-scale brands will be
    managed to generate consistent profit and cash flow. These include
    leading brands such as Campbell's soup, Pepperidge Farm
    fresh bakery, SpaghettiOs and V8. These brands will be
    managed with disciplined focus and aligned investments to support
    their strong market positions, to optimize operating margins and cash
    flow and to fulfill their equally important role in Campbell's
    portfolio.

Pursuing Divestitures of Non-Core Businesses;
Significantly Reduce Debt

Campbell has engaged Goldman Sachs and Centerview Partners to commence a
process to divest its Campbell International and Campbell Fresh
businesses in a manner that maximizes value. Campbell International
consists of Arnott's and the Kelsen Group, along with the company's
manufacturing operations in Indonesia and Malaysia and its businesses in
Hong Kong and Japan. Campbell Fresh includes Bolthouse Farms, Garden
Fresh Gourmet and the company's refrigerated soup business. Fiscal 2018
net sales of these businesses totaled approximately $2.1 billion.
Proceeds from the divestitures will be used to significantly reduce debt.

Increased Cost Savings

As a result of this more focused portfolio, Campbell is increasing its
cost savings target by $150 million. The company plans to achieve these
additional savings by streamlining its organizational structure,
expanding its zero-based budgeting efforts and continuing to optimize
its manufacturing network. These savings are in addition to the
company's prior target of $500 million and the previously announced $295
million in target synergies and run-rate cost savings from Campbell's
integration of Snyder's-Lance. Combined, these programs will bring
Campbell's total cost savings target to $945 million by the end of
fiscal 2022.

Updated Long-Term Targets*

Campbell has adjusted its long-term targets to reflect the company's
actions and more focused portfolio.

  • Organic net sales growth of 1 to 2 percent
  • Adjusted EBIT growth of 4 to 6 percent
  • Adjusted EPS growth of 7 to 9 percent

In addition, Campbell expects a net debt to adjusted EBITDA ratio of
3.0x by 2021.

These targets reflect expectations beyond fiscal 2019 and assume the
completion of the planned divestitures of Campbell International and
Campbell Fresh.

*A non-GAAP reconciliation is not provided since certain items are
not estimable, such as pension and postretirement mark-to-market
adjustments, and these items are not considered to reflect the company's
ongoing business results.

Conference Call and Webcast

Campbell will host a 90-minute conference call to discuss its earnings
results and the outcome of its strategic review today at 8:30 a.m. EDT.
To join, dial +1 (844) 428-1627 in the U.S. or +1 (409) 350-3941
internationally. The access code is 5676627. Access to a live webcast of
the call with accompanying slides, as well as a replay of the call, will
be available at investor.campbellsoupcompany.com.
A recording of the call will also be available until 11:59 p.m. on Sept.
13, 2018, at +1 (404) 537-3406. The access code for the replay is
5676627.

About Campbell Soup Company

Campbell (NYSE:CPB) is driven and inspired by our Purpose, "Real food
that matters for life's moments." For generations, people have trusted
Campbell to provide authentic, flavorful and affordable snacks, soups
and simple meals, and beverages. Founded in 1869, Campbell has a
heritage of giving back and acting as a good steward of the planet's
natural resources. The company is a member of the Standard and Poor's
500 and the Dow Jones Sustainability Indexes. For more information,
visit www.campbellsoupcompany.com
or follow company news on Twitter via @CampbellSoupCo.
To learn more about how we make our food and the choices behind the
ingredients we use, visit www.whatsinmyfood.com.

Forward-Looking Statements

This release contains "forward-looking statements" that reflect the
company's current expectations about the impact of its future plans and
performance on the company's business or financial results. These
forward-looking statements, including any statements made regarding
sales, EBIT and EPS guidance, rely on a number of assumptions and
estimates that could be inaccurate and which are subject to risks and
uncertainties. The factors that could cause the company's actual results
to vary materially from those anticipated or expressed in any
forward-looking statement include: (1) the company's ability to execute
on and realize the expected benefits from the actions it intends to take
as a result of its recent strategy and portfolio review; (2) the ability
to differentiate its products and protect its category leading
positions, especially in soup; (3) the ability to complete and to
realize the projected benefits of planned divestitures and other
business portfolio changes; (4) the ability to realize the projected
benefits, including cost synergies, from the recent acquisitions of
Snyder's-Lance and Pacific Foods; (5) the ability to realize projected
cost savings and benefits from its efficiency and/or restructuring
initiatives; (6) the company's indebtedness and ability to pay such
indebtedness; (7) disruptions to the company's supply chain, including
fluctuations in the supply of and inflation in energy and raw and
packaging materials cost; (8) the company's ability to manage changes to
its organizational structure and/or business processes, including
selling, distribution, manufacturing and information management systems
or processes; (9) the impact of strong competitive responses to the
company's efforts to leverage its brand power with product innovation,
promotional programs and new advertising; (10) the risks associated with
trade and consumer acceptance of product improvements, shelving
initiatives, new products and pricing and promotional strategies; (11)
changes in consumer demand for the company's products and favorable
perception of the company's brands; (12) changing inventory management
practices by certain of the company's key customers; (13) a changing
customer landscape, with value and e-commerce retailers expanding their
market presence, while certain of the company's key customers maintain
significance to the company's business; (14) product quality and safety
issues, including recalls and product liabilities; (15) the costs,
disruption and diversion of management's attention associated with
campaigns commenced by activist investors; (16) the uncertainties of
litigation and regulatory actions against the company; (17) the possible
disruption to the independent contractor distribution models used by
certain of the company's businesses, including as a result of litigation
or regulatory actions affecting their independent contractor
classification; (18) the impact of non-U.S. operations, including trade
restrictions, public corruption and compliance with foreign laws and
regulations; (19) impairment to goodwill or other intangible assets;
(20) the company's ability to protect its intellectual property rights;
(21) increased liabilities and costs related to the company's defined
benefit pension plans; (22) a material failure in or breach of the
company's information technology systems; (23) the company's ability to
attract and retain key talent; (24) changes in currency exchange rates,
tax rates, interest rates, debt and equity markets, inflation rates,
economic conditions, law, regulation and other external factors; (25)
unforeseen business disruptions in one or more of the company's markets
due to political instability, civil disobedience, terrorism, armed
hostilities, extreme weather conditions, natural disasters or other
calamities; and (26) other factors described in the company's most
recent Form 10-K and subsequent Securities and Exchange Commission
filings. The company disclaims any obligation or intent to update the
forward-looking statements in order to reflect events or circumstances
after the date of this release.

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