1. Kannu Priya Min-Min Chen Varinthorn(Build) Saengpanyarak Pattharaporn(Pauline) Lertphaiboonsiri May 1 st 2012

2. Agenda Introduction Stock Market Prospect Industry Hormel Business Financial Analysis Multiples DCF Recommendation

3. Introduction GIC : 30 Consumer Staple 30202030 Packaged Foods & Meats “Hormel is a multinational manufacturer and distributer of a variety of value-added meat and food products sold to retail and food-service clients.” Over 5 years Market Cap7.56 B (NYSE) Current Price (April29)$28.97 52 week high30.50 52 week low25.87 EPS(ttm)1.67 P/E(ttm)17.33 PEG1.74 Div. Yld2.10% 1 year Implied EPS growth17% 7-10 growth4.44% EBIT/TangEBIT/EVTotal Greenblatt39%10%49%

4. Stock Market Prospect Hormel Food Last Price: 28.94 Dow Jones EPS $1.08 EPS $1.74 Source: Yahoo! Finance

5. Industry Overview- Busy life 62 % of meals at home Prep time ≤ 6 mins Meat to Meals Source: Hormel annual report 2011

6. Time for better burger Americans eat 40 bill burgers/ Year A person eats 150 Burgers/ Year Better burgers A person saves 10 or 15 pounds/ year Source: http://eatthis.menshealth.com/content/worst-burgers-america

7. Meat Processing Industry Current Market Size 2012 Annual Growth 07-12 Annual Growth 12-17 179.4 B2.4%1.4% Life Cycle: Mature Concentration: Medium Revenue Volatility: Medium Barrier to entry: Medium Source: IBIS World report 31161 Meat, Beef, and Poultry processing in the US 2012

8. External Market Drivers Households with higher incomes are able to spend more on meat. Drive by meat price and public health perception from medical studies. Source: IBIS World report 31161 Meat, Beef, and Poultry processing in the US 2012

9. External Market Driver Meat price Demand & Supply Source: IBIS World, Hormel annual report 2011

10. External Market Driver International Trade& Regulation Higher Disposable Income in emerging market Free Trade Agreement Export Growth Intensive US meat production -World’s largest beef and poultry producer -3rd-largest pork producer Tariffs protect domestic producers Import 6% of Domestic Demand Source: IBIS World report 31161 Meat, Beef, and Poultry processing in the US 2012

11. Company’s Business More than 500 products Brand and Unbranded Products One of the most vertically integrated company in processed foods industry Founded in 1891 Engraved in people’s lifestyle Named “R&D Team of year” by Food Processing Magazine Balanced Diversified Portfolio (Λ Total Volume/ Λ Price) = 0.3 Source: “Company Profile” page from www.hormelfoods.com, Hormel Foods Investor day presentation 2011www.hormelfoods.com

12. Company’s Business Building Brand Innovation Focus Operating Efficiency

13. Company’s Products Grocery Products Refrigerated Foods Jennie-O Turkey Store Specialty Food All Other (International) Segment Sales 2011 13% 53% 19% 11% 4% Hormel Chilli, Mexican Products, Compleats Microwave meals, and SPAM product family Meal ingredients and side-dish, Pepperoni minis, Country Crock, Natural Choice, Party trays, Lloyds barbeque tubs Fresh Turkey, Turkey bacon, Turkey burgers, whole Turkey, Nacho platters Diamond Crystle Brand, Century Foods International, Nutritional Foods, Supplements 1990s: Partnerships within Mexico, China, Philippines and Japan for SPAM, microwave meals Source: Hormel Foods Annual Report 2011

14. Trusted Brand Legacy Brands Source: Hormel Foods 2011 Investor Day

15. Trusted Brand #1 22 brands #1 market shares Over 75% of Refrigerated products represent #1 or #2 in their category Grocery products position inhibit #1-#3 share position Jennie-O-Turkey is ranked #2 in Turkey segment Products in specialty segment exceed 60% market share Source: Hormel Foods 2011 Investor Day

16. Building Brand Marketing their trusted brands Advocate fun and healthy food through variety of media Advertising spending increased by 20% in 2011 Source: Hormel Foods 2011 Investor Day, Hormel Annual Report 2011

17. Innovate Solutions 21% of sales from new products introduce since 2000 Social gatherings The Center of a Great Meal Natural Choice Foodservice Solutions Source: Hormel Foods 2011 Investor Day

18. Innovate Solutions 2011 New Products – Quick Prep Meals Source: Hormel Foods 2011 Investor Day

19. Operating Efficiency Source: Hormel Foods 2011 Investor Day

20. Operating Efficiency Market Conditions impact both input costs and potential revenue Margins have improved from 10% to 15% Source: Hormel Foods 2011 Investor Day

21. Growth Potential Market its existing trusted Brands Innovate Life-style Product Solutions Operating Efficiency International Markets Acquisitions success Source: Hormel Foods 2011 Investor Day

22. Acquisitions Effective February 1, 2010, the Company completed the acquisition of the Country Crock chilled side dish business from Unilever United States Inc. This line of microwaveable, refrigerated side dishes complements Lloyd’s barbeque product lines within the Refrigerated Foods segment. Country Crock remains a registered trademark of the Unilever Group of Companies and is being used under license. Internationally, the Company markets its products through Hormel Foods International Corporation (HFIC), a wholly owned subsidiary. Source: Hormel annual report 2011

23. Acquisitions On October 26, 2009, the Company completed the formation of MegaMex Foods, LLC,a 50 percent owned joint venture which markets Mexican Foods in the United States. During the Company’s fourth quarter of fiscal 2010, MegaMex acquired Don Miguel Foods Corp., a leading provider of branded frozen and fresh authentic Mexican line of Snacks During the Company’s fourth quarter of fiscal 2011, MegaMex also acquired Fresherized Foods. GroceryRefrigerated Specialty (in thousands)ProductsFoodsJOTSFoodsAll OtherTotal Balance as of October 25, 2009 $ 123,316$85,923 $ 203,214 $ 207,028$674 $ 620,155 Goodwill acquired -8,868 - - - Balance as of October 31, 2010 $ 123,316$94,791 $ 203,214 $ 207,028$674 $ 629,023 Goodwill acquired -1,861 - - - Balance as of October 30, 2011 $ 123,316$96,652 $ 203,214 $ 207,028$674 $ 630,884 Source: Hormel annual report 2011

24. Revenue Growth Source: Hormel annual report 2011

25. Financial Position & Performance Figures in Thousands ($) 200620072008200920102011 Depreciation121,101126,738126,189127,138125,591114,689 CAPEX141,516125,795125,89096,96189,823104,118 Acquisitions78,925125,10127,22570128,1047,207 Repurchases36,97886,79469,55138,14769,574152,930 Dividends Paid75,84081,09295,531101,376109,374129,975

26. Financial Position & Performance The growth in EPS on a diluted basis, has been growing after the recessionary impact in the years 2008 to 2009 The Debt to Asset ratio of (0.03) for Hormel is the lowest compared to other companies operating in the similar business

27. Financial Position & Performance Although the revenue growth got a setback in 2009 due to economic slowdown and change in consumer preferences, Hormel’s operating margin, EBITDA and net profit margin have been gradually increasing over the years.

28. Return on Equity

29. Comparable Companies StockTickerStock Price Trailing P/E Enterprise Value/Reven ue Enterprise Value/EBIT DA EPSRevenueEBITDA ConAgra Foods, Inc.CAG25.9113.891.018.141.87130601620 Sara Lee CorpSLE22.0225.551.4110.880.8690201170 Smithfield Foods Inc.SFD21.239.190.44.652.31130001120 Tyson Foods Inc.TSN18.2211.310.255.161.61329801560 Dole Food Co.DOLE8.4819.360.326.380.447220359.23 H. J. Heinz CompanyHNZ53.3117.771.8410.653.00114901990 HormelHRL29.0817.380.919.151.678010861.448 Mean26.1415.941.007.841.7713494.291328.46 Median22.0214.541.018.141.87114901480

30. Comparable Companies Multiples Implied price Per Share Enterprise Value P/E$27.02 EV/EBITDA$26.40$6,959.33 EV/Revenue$27.90$7,357.05

31. DCF Assumption Source: Hormel’s Food Corporation: Outperformance, Zack’s Equity Research

32. Recommendation Buy 100 shares Hormel at market price Market price@04/30/201229.06weight Multiple price26.4020% DCF price36.3680% Fair Value34.37