1. Consumer Staples Company Presentation Chad Hackett Adam Gale

2. Consumer Staples Analysis + Dividends, Dividend yield is higher than S&P 500 - Earnings are declining relative to S&P 500 - Growing economy – Sector performs poorly during growth relative to S&P 500

3. Consumer Staples Composition SIM Companies Procter & Gamble, 4.20% (Household Products) Walgreens, 2.11% (Retail Drugs) Anheuser-Busch, 3.94% (Beverage - Alcoholic)

4. Procter & Gamble

5. Business Analysis Businesses  Baby, feminine & family care  Fabric & home care  Health care  Beauty care  Food & beverage Main Brands  Pampers, Always  Tide, Bounty, Downy  Crest, Pepto Bismol  Cover Girl, Pantene, Herbal Essences  Folgers, Pringles

6. Business: Demand Expected EPS for 2005 : $2.59  11% increase from 2004 Solid marketing and product innovation skills Established brand recognition both domestic and international Constant demand for P&G products

7. Business: Supply P&G’s growth for the future relies on foreign acquisitions and internal expansion overseas  i.e. Wella AG acquisition in 2003 India and China remain strong growth drivers Increased business in health and beauty- care by purchasing Clairol

8. Financial: DuPont Analysis

9. Valuation Analysis

11. Recommendation Hold Procter & Gamble. Remaining a strong player in the consumer staples sector  Internal growth abroad  Foreign market expansion through acquisition James Gamble - 1837 William Proctor – 1837

12. Anheuser-Busch

13. Business Analysis Businesses:  Domestic and International Beer  Packaging  Theme Parks Main Products  Budweiser  Michelob  Busch  Natural Light

14. Business: Demand Consumption is up.8% from 2003 International growth has contributed to at least 20% of A-B’s earnings over the past five years Anheuser-Busch and Tsingtao Close China Investment Agreement  Increased profits in China by 45% Demographics – Growth of the 21 to 27 year old age group Inelastic demand for alcohol in general

15. Financial: DuPont Analysis

16. Valuation Analysis

18. Recommendation Sell Anheuser-Busch Issues  Revenues shrinking from year to year  Pre-tax margins at all-time high, but price to sales and price to earnings at median levels  Hugely competitive market with Miller, other brewers

19. Sysco Corporation

20. Business Analysis Businesses:  Food distributor  Supply distributor (plates, silverware, etc Main Customers  Restaurants  Health-care facilities  Education facilities

21. Business: Demand Revenue is increasing from year-to-year Expected increase in the number of people in healthcare facilities Growing economy stimulates consumer spending (dining out)

22. Financial: DuPont Analysis

23. Valuation Analysis

25. Recommendation Buy Sysco Corporation Reasons  Growth rate estimates at an all-time high relative to consumer staples sector  Price-to-earnings and price-to-sales do not reflect this expectation  Certain demand increases via healthcare and increased discretionary consumer spending

26. CVS versus Walgreen Corporation

27. CVS versus Walgreen Business Walgreen currently largest U.S. Retail Drug Store with 37.5 billion dollars in sales CVS is second with 22.6 billion dollars in sales

28. Demand Increased need for prescription drugs as population continues to grow older Continued expansion in opening of new stores for both companies  CVS through acquisition (Eckerd from J.C. Penny)

29. Dupont - CVS

30. Dupont - Walgreen

31. Valuation – CVS versus Walgreens CVSWAGIndustry Market Cap:18.50B40.34B285.75M Employ­ees:110,000117,000530 Rev. Growth (ttm):10.00%13.30% Revenue (ttm):29.12B37.51B573.99M Gross Margin (ttm):26.21%27.19%26.21% EBITDA (ttm):1.94B2.14B11.62M Oper. Margins (ttm):5.31%5.71%2.27% Net Income (ttm):912.60M1.36B6.20M EPS (ttm):2.2331.3190.38 PE (ttm):20.7129.9322.84 PEG (ttm):1.681.71.22 PS (ttm):0.641.070.66

32. Recommendation Sell Walgreen Corporation to acquire CVS  More potential for growth in 2005  Retail drug market is expanding  Large acquisition of Eckerd will be more beneficial in 2005  Walgreen Corporation above industry ratios

33. Questions