March 1, 2017 / 3:35 PM / 9 months ago

BRIEF-Hershey CEO says to cut back on distribution levels in 2017 compared with 2016

March 1 (Reuters) - Hershey Co at Analyst Day Conference

* CEO Michele Buck at analyst conference-“we believe M&A will play an important role in diversifying our portfolio going forward”

* CEO Michele Buck at analyst conference- company’s 2017 distribution will not be at same levels as 2016

* CEO Michele Buck- will reset international investment; expect about half of margin for growth dollar savings to be in international

* CEO Michele Buck at analyst day- will reverse the trend of increasing SG&A expenses, cut cost of goods sold

* Hershey CEO Michele Buck- China business will undergo transformation over next three yrs; expect to streamline business, remove low velocity SKUs

* CEO Michele Buck-expect international operating income trend to grow meaningfully and believe it will be in the black soon

* CEO Michele Buck-co will now focus more on snacking products than confectionary; will seek M&A in snacking category

* CEO Michele Buck- in 2017, Co’s focus will be on building brand awareness of core products

* Hershey-Now expect to grow topline in 2-4 percent range annually from prior forecast of 3-5 percent; sales growth will be at lower end of long term targets

* Hershey CEO Michele Buck - no change to long term EPS growth forecast with growth expected to be at upper end

* Hershey CEO Michele Buck - expect to expand operating income margins to 22-23 percent in 2019 from 20.4 percent in 2016 from cost saving initiatives

* Hershey CEO Michele Buck - expect to increase adjusted gross margin to more than 46 percent in 2019 from 45.6 percent in 2016

* For “right” strategic acquisition co would consider net debt to adjusted EBITDA ratio of more than 2 times

* Expects that 2019 run rate of sg&a as a percentage of sales (excluding. advertising/marketing spend) will be 100 bps lower than 2016 Further company coverage:

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