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The following statements made in this presentation are “forward looking” and are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995: statements relating to (1) projected sales (including for individual segments, for specific product lines and for the company as a whole), profit margins, net income and earnings per share, (2) our growth strategy, (3) our branding initiatives (4) our integration, innovation, and research and development plans, and (5) our cost-savings initiatives. These statements involve risks and uncertainties that may cause results to differ materially from those set forth in this presentation. Financial projections are based on a number of assumptions. Actual results could be materially different than projected if those assumptions are erroneous. Sales, profit margins, net income and earnings per share can vary based on a variety of economic, governmental and competitive factors, which are identified in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K (which can be accessed on our website at www.deanfoods.com or the website of the Securities and Exchange Commission at www.sec.gov). The Company's ability to profit from its branding initiatives depends on a number of factors including consumer acceptance of the Company's products. All forward looking statements in this presentation speak only as of the date of this presentation. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in our expectations with regard thereto or any changes in the events, conditions or circumstances on which any such statement is based.
Certain non-GAAP financial measures contained in this presentation, including adjusted diluted earnings per share, free cash flow, consolidated adjusted operating income and consolidated adjusted net income, have been adjusted to eliminate the net expense or net gain related to certain items identified in our press releases. A full reconciliation of these measures calculated according to GAAP and on an adjusted basis is contained in the appendix of this presentation and in such press releases, which are publicly available on our web site at www.deanfoods.com/investors.
Extend OurLow CostPosition
WhiteWave$50
DSD Distribution$50
$ Millions
Extend OurLow CostPosition
Buy our inputs at lower prices
Reduce our conversion costs by operating our plants more effectively
Design a better network to lower our landed costs
Unconnected with no direct authority over plants
Limited supply chain expertise
No common metrics or analytical frameworks for improvement
Dedicated,specialized
support
Centralized supply chain expertise, analytical capability and leadership
One Dean Foods Supply
Chain
No scale in purchasing raw materialsHigh conversion cost from in-plant complexitySystem-wide underutilization of assets
Small, inefficient plantsOpportunity for quality improvementHigh waste of raw materials and energy
Lack of analysis for decision supportNo understanding of baseline performance levels or benchmarks for improvement
Procurement$50M
Leverage purchasing scale today
Simplify what we produce to reduce our procurement costs in the future
$50M+ in savings to date
Significant consolidation of supply base
Improved quality, service
More favorable payment terms
Professional procurement organization
Spend management
Compliance tracking
86 colors9 styles3 materials3 suppliers
37 cup sizes10 lid sizes4 cup styles2 lid styles3 materials
60 formulas8 types
70 mixes282 flavors
Conversion$85M
Standardize how we manage our plants to ensure efficient operation
Design and resource a process to continually identify and attack cost opportunities
Simplify our product portfolio to increase run sizes and throughput
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
0 2,000,000 4,000,000 6,000,000 8,000,000
Manufactured Gallons
Conversion Cost/Gallon
Type in week beginning, Monday 3/28/04 66% efficiencyThis brings up data for w/b 22 Mar 04 19,728 DZ made
SICP - BT #1 Lost Time, week beginning 22 Mar 04
0% 2% 4% 6% 8% 10% 12%
Error
VDL
SHORT SHIFT
WRAPPER
BOXER
HELP
Slow Running
SUPPLIES
WAITED FOR
FILLER HEAD
STICK MACHINE
TEST RUN
MIX
HUMAN ERROR
COLLATOR
SAM 2
PCS
FREEZER
TUNNEL
SAM 1
SAM 3
GUMBALL HOPPER
Last Week 5 week Average
Click here to make Pareto
Weekly Efficiency of SICP - BT #1 - Last 12 weeks
30%
40%
50%
60%
70%
80%
90%
12/2
9/20
03
1/5/
2004
1/12
/200
4
1/19
/200
4
1/26
/200
4
2/2/
2004
2/9/
2004
2/16
/200
4
2/23
/200
4
3/1/
2004
3/8/
2004
3/15
/200
4
3/22
/200
4
Daily Efficiency of SICP - BT #1 - Last 28 days
0%
20%
40%
60%
80%
100%
2/29
/200
4
3/2/
2004
3/4/
2004
3/6/
2004
3/8/
2004
3/10
/200
4
3/12
/200
4
3/14
/200
4
3/16
/200
4
3/18
/200
4
3/20
/200
4
3/22
/200
4
3/24
/200
4
3/26
/200
4
Weekly Summary:Efficiency calculated from repported line hours only - ie no set-up and no sanitation time has been accounted for.Slow running represents the difference between runnng the maximum speed of 1500 DZ/hour and the current speed.Error represents the difference between the total reported time and the sum of calculated runtime and reported downtime.
Type in week beginning, Monday 3/28/04 66% efficiencyThis brings up data for w/b 22 Mar 04 19,728 DZ made
SICP - BT #1 Lost Time, week beginning 22 Mar 04
0% 2% 4% 6% 8% 10% 12%
Error
VDL
SHORT SHIFT
WRAPPER
BOXER
HELP
Slow Running
SUPPLIES
WAITED FOR
FILLER HEAD
STICK MACHINE
TEST RUN
MIX
HUMAN ERROR
COLLATOR
SAM 2
PCS
FREEZER
TUNNEL
SAM 1
SAM 3
GUMBALL HOPPER
Last Week 5 week Average
Click here to make Pareto
Weekly Efficiency of SICP - BT #1 - Last 12 weeks
30%
40%
50%
60%
70%
80%
90%
12/2
9/20
03
1/5/
2004
1/12
/200
4
1/19
/200
4
1/26
/200
4
2/2/
2004
2/9/
2004
2/16
/200
4
2/23
/200
4
3/1/
2004
3/8/
2004
3/15
/200
4
3/22
/200
4
Daily Efficiency of SICP - BT #1 - Last 28 days
0%
20%
40%
60%
80%
100%
2/29
/200
4
3/2/
2004
3/4/
2004
3/6/
2004
3/8/
2004
3/10
/200
4
3/12
/200
4
3/14
/200
4
3/16
/200
4
3/18
/200
4
3/20
/200
4
3/22
/200
4
3/24
/200
4
3/26
/200
4
Weekly Summary:Efficiency calculated from repported line hours only - ie no set-up and no sanitation time has been accounted for.Slow running represents the difference between runnng the maximum speed of 1500 DZ/hour and the current speed.Error represents the difference between the total reported time and the sum of calculated runtime and reported downtime.
Gallon Filler Output
Pre-standardizationPost-standardization
187
18
1,300
159
13
10
-90% -90%
Manufacture the right products in the right places
Consolidate volumes to more efficient facilities whether existing or new
Network Optimization
$65M
Conversion$85
Procurement$50
Network Optimization$65
WhiteWave$50
DSD Distribution$50
$ Millions
Note: includes nominal amount of corporate capital spending
146 166 152
230
77 58 83
4014 17
2230
2006 2007 2008 2009 2010+
Morningstar
257
~300
241$237
300+
WhiteWave
DSD Dairy
$ Millions
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