8-K - HSY - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

May 12, 2020

Date of Report (Date of earliest event reported)

THE HERSHEY COMPANY

(Exact name of registrant as specified in its charter)

Delaware	1-183	23-0691590
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

19 East Chocolate Avenue

Hershey, PA 17033

(Address of principal executive offices)

(Zip Code)

(717) 534-4200

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, one dollar par value	HSY	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging Growth Company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.	☐
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Item 7.01.	Regulation FD Disclosure.
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On May 12, 2020, The Hershey Company (the “Company”) will be hosting its 2020 Annual Meeting of Stockholders via live webcast, during which it will provide a general business review update. The presentation materials to be utilized during the meeting, a copy of which is attached hereto as Exhibit 99.1, are hereby incorporated into this Item 7.01 by reference.

The information in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01.	Financial Statements and Exhibits.
(d)	Exhibits.
	Exhibit Number	Description
	99.1	2020 Annual Meeting of Stockholders Presentation Materials
	104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		THE HERSHEY COMPANY
Date: May 12, 2020	By:	/s/ Damien Atkins
		Damien Atkins<br>Senior Vice President, General Counsel and Secretary

EXHIBIT INDEX

Exhibit Number	Description
99.1	2020 Annual Meeting of Stockholders Presentation Materials
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

Document

ANNUAL MEETING OF STOCKHOLDERS MAY 12, 2020

chairman, president and chief executive officer

ITEMS OF BUSINESS ELECTION OF 13 DIRECTORS

NOMINATED DIRECTORS<br><br><br>Robert Malcolm<br>AnthonyPalmer<br>Juan Perez<br>WendySchoppert<br>David Shedlarz<br>Michele Buck<br><br>Pamela Arway<br>James Brown<br>Victor Crawford<br>Charles Davis<br>Mary Kay Haben<br>James Katzman<br>Diane Koken

BOARD RECOMMENDATION The board recommends a vote for each of the director nominees

ITEMS OF BUSINESS

ELECTION OF 13 DIRECTORS

RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

Board recommendation. The board recommends a vote for ratification of the appointment of Ernst & Young LLP as independent auditors for 2020

ITEMS OF BUSINESS

ELECTION OF 13 DIRECTORS

RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

ADVISE ON NAMED EXECUTIVE OFFICER COMPENSATION

The Board recommends a vote FOR approval, on a non-binding advisory basis, of the Company’s named executive officer compensation<br><br>The Board recommends a vote FOR approval, on a non-binding advisory basis, of the Company’s named executive officer compensation

ITEMS OF BUSINESS

ELECTION OF 13 DIRECTORS

RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

ADVISE ON NAMED EXECUTIVE OFFICER COMPENSATION

VOTING

ITEMS OF BUSINESS

ELECTION OF 13 DIRECTORS

RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

ADVISE ON NAMED EXECUTIVE OFFICER COMPENSATION

VOTING

BUSINESS REVIEW

FORWARD-LOOKING STATEMENTS

This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Many of these forward-looking statements can be identified by the use of words such as “intend,” “believe,” “expect,” “anticipate,” “should,” “planned,” “projected,” “estimated,” and “potential,” among others. These statements are made based upon current expectations that are subject to risk and uncertainty. Because actual results may differ materially from those contained in the forward-looking statements, you should not place undue reliance on the forward-looking statements when deciding whether to buy, sell or hold the company's securities. Factors that could cause results to differ materially include, but are not limited to: risks related to the impact of the COVID-19 global pandemic on our business, suppliers, distributors, consumers, customers, and employees; the scope and duration of the pandemic; government actions and restrictive measures implemented in response to the pandemic, including the continuation of social distancing guidelines and stay at home orders; disruptions or inefficiencies in our supply chain due to the loss or disruption of essential manufacturing or supply elements or other factors; issues or concerns related to the quality and safety of our products, ingredients or packaging; changes in raw material and other costs, along with the availability of adequate supplies of raw materials; the company’s ability to successfully execute business continuity plans to address the COVID-19 pandemic and resulting changes in consumer preferences and the broader economic and operating environment; selling price increases, including volume declines associated with pricing elasticity; market demand for our new and existing products; increased marketplace competition; failure to successfully execute and integrate acquisitions, divestitures and joint ventures; changes in governmental laws and regulations, including taxes; political, economic, and/or financial market conditions; risks and uncertainties related to our international operations; disruptions, failures or security breaches of our information technology infrastructure; our ability to hire, engage and retain a talented global workforce; our ability to realize expected cost savings and operating efficiencies associated with strategic initiatives or restructuring programs; complications with the design or implementation of our new enterprise resource planning system; and such other matters as discussed in our Annual Report on Form 10-K for the year ended December 31, 2019 and our Quarterly Report on Form 10-Q for the quarterly period ended March 29, 2020. The company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company’s expectations.

Our long-term strategies remain unchanged; we are investing in key differentiators that will continue to enable us to respond to the rapidly changing environment

We are reassured by our financial stability to manage through the pandemic, while endeavoring to create peer-leading shareholder value over the long-term

We remain confident in the strength of our category and brandsand our team, who is proactive and agile in managing our performance as the pandemic unfolds

WHAT WE WANT YOU TO LEAVE WITH TODAY

OUR TOP PRIORITY IS ENSURING THE PHYSICAL, MENTAL AND FINANCIAL WELL-BEING OF OUR TEAM

MANUFACTURING CORP & COMMERCIAL MANUFACTURING

Personal Protective Equipment Flexible scheduling limiting time in-store to least amount of shoppers

Option to stay-at-home, incentives for those who choose to remain active

Working remotely Equipment and technology to support remote work

Increased safety measures and stringent operating protocols Personal Protective Equipment

Option to stay-at-home, incentives for those who choose to come to work

SALES CORP & COMMERICAL PERSEVERING THROUGH TODAY

ENSURE HEALTH & SAFETY & MAINTAIN FOOD SUPPLY

AND OUR KEY PARTNERS IN THE BROADER VALUE CHAIN WHO RELY ON US

PERSEVERING THROUGH TODAY

ENSURE HEALTH & SAFETY & MAINTAIN FOOD SUPPLY

OUR TEAMS HAVE RISEN TO THE CHALLENGE

<15

POSITIVE CASES

PERSEVERING THROUGH TODAY

>98%

CASE FILL RATE

~+3pts

CMG MARKET

ENSURE HEALTH & SAFETY & MAINTAIN FOOD SUPPLY

Source: IRI 6 weeks ending 04/26/20

MILLIONS IN CASH, PRODUCT DONATIONS &

TECHNICAL RESOURCES

TO SUPPORT COVID-19 RESPONSE EFFORTS

DONATING PRODUCTS TO HOSPITALS

PARTNERING WITH

PERSEVERING THROUGH TODAY

INVESTING IN EQUIPMENT AND RESOURCES TO PRODUCE MASKS

SUPPORT OUR COMMUNITIES

CONSUMER BEHAVIOR COVID-19 IS AFFECTING CONSUMERS IN NUMEROUS WAYS

Shelter in place guidelines MACRO AND RETAIL CHANGES PERSEVERING THROUGH TODAY

ADAPT WITH CONSUMER Encouraged to wear masks in public

Retailers limiting occupancy and store hours

Households experiencing heightened financial pressure

E-Commerce struggling to keep pace with demand

Reduced number of trips and length of time in store; bigger basket size per trip

Shopping priorities have changed

Decreased discretionary income

Shift to online shopping

AND HAS HAD MANY IMPACTS ON OUR BUSINESS

—Incentives and rewards for front-line employees in manufacturing and sales

—Enhanced sanitation —Reduced away from home consumption

—Chocolate World store closures —Emerging market softness —Reduced Gum/Mint use while social distancing

—E-Commerce acceleration —Increased at-home chocolate consumption

—More family baking —Lower travel and entertainment expenses —Investment optimization and prioritization

PERSEVERING THROUGH TODAY

ADAPT WITH CONSUMER

CORE BUSINESS STRATEGIES REMAIN

INVESTING IN KEY DIFFERENTIATORS FOR LONG-TERM GROWTH

SECURING TOMORROW

WE DO THIS… BECAUSE WE BELIEVE THIS...

There’s more moments of goodness to be made

Drive Core U.S. Confection

Capture Better For You Snacking Occasions

Deliver Profitable International Growth

Invest in people, capabilitiesand communities

SECURING TOMORROW

STRATEGIES REMAIN

Long-standing values make our company a special place to work

excellence making a difference integrity togetherness

SECURING TOMORROW STRATEGIES REMAIN

BUILDING HIGH PERFORMING AND DIVERSE TEAMS AND CULTURES

Board of Directors & Executive* 50% $.99

Peer-Leading Overall* 42% Total Workforce 50%

on the dollar compared to men**

Senior Leaders 32% DIVERSITY GENDER REPRESENTATION

ENGAGEMENT 84% +3pts vs worldwide benchmark

Enterprise Wide Engagement

89% Top 20% Worldwide

Salaried SECURING TOMORROW STRATEGIES REMAIN

* As of the proxy record date of 03/13/20.

** Based on salaried workforce in the U.S.

Source: Perceptyx, 2019 Gender Diversity Index (GDI) report published by Business Wire

ADVANCING OUR SUSTAINABILITY WORK

SECURING TOMORROW

INVESTING FOR GROWTH

Released Comprehensive Environmental Policy

Released Human Rights Policy

Joined Science Based Target Initiative

On track to deliver 100% certified cocoa goal in 2020

Signed UN Global Compact

FOCUSING WHERE WE CAN MAKE THE GREATEST IMPACT

ENVIRONMENT

Expand focus from owned facilities to entire greenhouse gas footprint

SUSTAINABLE FARMING

ETHICAL PRODUCTION

PACKAGING AND PLASTIC WASTE

CLIMATE CHANGE HUMAN RIGHTS HUMAN RIGHTS PACKAGING SOURCING

Specific targets and measurements for those who contribute to our success (employees + partners)

Increaserecycledcontentand reduceoverall materials across the entire packaging cycle

Expand direct sourcingand commodity focus with increased visibility

SECURING TOMORROW INVESTING FOR GROWTH

OUR VISION:

AN INNOVATIVE SNACKING POWERHOUSE

IN U.S. SNACKING

SECURING TOMORROW

STRATEGIES REMAIN

Source: IRI ending 12/29/19

HERSHEY MARKET SHARE

LEADERSHIP ACROSS US CONFECTION SEGMENTS

Source: IRI ending 12/29/19

#1 44.4%

#3 7.8%

#1 36.7%

#3 11.2%

SECURING TOMORROW

STRATEGIES REMAIN

6% 20% 2019

Aspiration

11% 25% 2019

Aspiration

DIVERSIFYING TO CAPTURE INCREMENTAL GROWTH

BFY SNACKS % OF SALES

INTERNATIONAL & OTHER % OF SALES

Source: Company Financials; 2019 includes annualized ONE sales

SECURING TOMORROW

STRATEGIES REMAIN

BALANCED PLAN FOR 2020

MORE BRANDS ACTIVATED

STRONG INNOVATION

ADVANCE BFY PORTFOLIO

INCREMENTAL INVESTMENTS IN CAPABILITIES

Digital Commerce

ERP / Data / Technology

Addressable Media

Category Management

Supply Chain

Revenue Management

SECURING TOMORROW

INVESTING FOR GROWTH

DELIVERING TODAY

FINANCIAL STABILITY TO MANAGE THROUGH THE PANDEMIC

DELIVERING PEER-LEADING SHAREHOLDER VALUE

DRIVING SHAREHOLDER VALUE

STRONG FINANCIAL FOUNDATION

$8B Net Sales

Adj Operating Profit Margin 21.1%

Adj EPS Operating

Cash Flow $1.7B

$5.78 +7.8%

+10% +50bps +2.5% +40%

TOTAL SHAREHOLDER RETURN 2019

See appendix for reconciliation between GAAP and Non-GAAP for 2019 and 2018.

Source: Company Financials

FINANCIAL STABILITY

DRIVING SHAREHOLDER VALUE

$263 $263 $283 $404 $466 $394 $283 $304 $341 $394 $440 $476 $500 $526 $563 $610

$100 $125 $202 $403 $420 $159 $140 $150

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Share Buyback Dividends

STRONG TRACK RECORD OF RETURNING CASH TO SHAREHOLDERS

Source: Hershey Financials *Excludes shares repurchased in connection with the exercise of stock options

$402 Committed to a dividend payout ratio of at least 50%

~$6B in dividends and share repurchases* over the last 10 years

$M 362nd Consecutive Dividend FINANCIAL STABILITY DRIVING SHAREHOLDER VALUE

0 100 200 300 400 500 600 700 800 900

1/1/1999 6/1/1999 11/1/1999 4/1/2000 9/1/2000 2/1/2001 7/1/2001 12/1/2001 5/1/2002 10/1/2002 3/1/2003 8/1/2003 1/1/2004 6/1/2004 11/1/2004 4/1/2005 9/1/2005 2/1/2006 7/1/2006 12/1/2006 5/1/2007 10/1/2007 3/1/2008 8/1/2008 1/1/20096/1/2009 11/1/2009 4/1/2010 9/1/2010 2/1/2011 7/1/2011 12/1/2011 5/1/2012 10/1/2012 3/1/2013 8/1/2013 1/1/2014 6/1/2014 11/1/2014 4/1/2015 9/1/2015 2/1/2016 7/1/2016 12/1/2016 5/1/2017 10/1/2017 3/1/2018 8/1/2018 1/1/2019 6/1/2019 11/1/2019 4/1/2020

S&P 500 A SOLID INVESTMENT OVER THE LONG TERM

THE S&P 500 OVER THE LAST 20 YEARS

TOTAL SHAREHOLDER RETURN TOTAL SHAREHOLDER RETURN 2.0x

SHAREHOLDER RETURN DRIVING SHAREHOLDER VALUE

Source: Bloomberg

NET SALES GROWTH +2-4%

EPS GROWTH +6-8%

LONG-TERM GUIDANCE REMAINS THE SAME

SHAREHOLDER RETURN

DRIVING SHAREHOLDER VALUE

126 YEARS OF MANAGING THROUGH CHALLENGING MOMENTS IN TIME

“The more closely we work together, the more effectively we can contribute to the better health of mankind.” Milton Hershey

1894 2020

#strongertogether

ITEMS OF BUSINESS

ELECTION OF 13 DIRECTORS

RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

ADVISE ON NAMED EXECUTIVE OFFICER COMPENSATION

VOTING

BUSINESS REVIEW

QUESTIONS AND ANSWERS

QUESTIONS & ANSWERS

Keep questions brief Limit to one topic

*All questions and answers will be posted on the Investor Relations’ website by May 19th, including those we are unable to get to during the live meeting today