Brendan Foley Chairman, President and Chief Executive Officer 3rd Quarter 2025 McCormick & Company, Inc. Business Update, Financial Results, and Outlook | October 7, 2025 The following slides accompany an October 7, 2025 earnings release conference call. This information should be read in conjunction with the press release issued on that date. Actual results could differ materially from those projected in the forward-looking statements. The Company undertakes no obligation to update or revise publicly any f ...

Industry Trends & Dynamics - The food and drink industry is experiencing a period of mergers, decoupling, splitting, and brand movement, indicating a search for focus and efficiency [1] - Companies benefited from raising prices in recent years, but with inflation easing, they must find new growth areas, often through deals and product innovation [3] - Consumer fatigue due to inflation and higher costs is driving a switch from name brands to store brands [2] - Changing consumer preferences, including health concerns and the rise of GLP-1 medications, are impacting demand for sugary drinks, boxed foods, and condiments [4][5] - Hot sauce is becoming a fundamental condiment alongside ketchup in restaurants, reflecting evolving tastes [6] Company Strategies - Companies are focusing on what works, potentially spinning off underperforming assets into separate entities to improve the narrative of the core business [7] - A strategy involves creating a "good CO" and a "bad CO," with the latter burdened with debt [7] - Soda companies are re-emphasizing water as a growth area [3] Financial Implications - Restructuring activities will result in fees for bankers and lawyers [2] - Companies are burdened with debt [7] Brand Performance - Ketchup continues to be a popular condiment [8] - Cereal consumption is declining due to health concerns [4]

Acquisition Overview - McCormick will acquire an additional 25% ownership in McCormick de Mexico for $750 million, increasing its total ownership to 75%[11, 11] - The acquisition is expected to close early in 2026[13, 38] - The company expects the acquisition to be accretive to earnings in year 1, inclusive of eliminating 25% of McCormick de Mexico's Net Income[13] Financial Impact - McCormick de Mexico has approximately $810 million in net sales and $180 million in EBITDA, with $16 million in annual management fees[13, 40] - The transaction value implies a multiple of 12x 2025 EBITDA and annual management fees[38] - The company anticipates adjusted operating margin accretion, primarily in the Consumer segment, in year 1[13, 38] - The company expects mid-single digit sales growth, aligned with long-term objectives[38] - The company anticipates approximately $10 million - $12 million in transaction costs[38] Strategic Rationale - The acquisition advances flavor leadership in Mexico, an attractive and growing market[12, 48] - The acquisition expands the global condiment platform and capitalizes on the growing demand for flavor[12] - The acquisition reinforces mayonnaise as a core component of the condiments and sauces portfolio[12, 48] - The acquisition provides a strategic platform for broader growth across Latin America[12, 23, 48]

Financial Data and Key Metrics Changes - In the first quarter, total organic sales increased by 2%, primarily driven by volume and product mix growth, partially offset by pricing [9][43] - Adjusted operating income declined by 5%, with a 3% decrease on a constant currency basis, primarily due to increased SG&A expenses [50][52] - First quarter adjusted earnings per share was $0.60 compared to $0.63 for the same period last year [54] Business Line Data and Key Metrics Changes - In the Global Consumer segment, organic sales increased by 1%, with a 3% volume growth offset by a 2% impact from pricing investments [44] - The Flavor Solutions segment saw organic sales growth of 3%, driven by a 2% volume increase and a 1% contribution from price [47] - In the Americas, Flavor Solutions organic sales increased by 4%, reflecting a strong performance with faster-growing flavor customers [48] Market Data and Key Metrics Changes - In EMEA, consumer organic sales grew by 4%, driven by a 2% increase in volume and a 2% increase in price [45] - Asia Pacific region saw consumer organic sales increase by 3%, with a 2% volume increase and a 1% contribution from price [46] - Flavor Solutions organic sales in Asia Pacific increased by 15%, with volume growth of 16%, driven by QSR customer promotions and new products [49] Company Strategy and Development Direction - The company remains growth-oriented, leveraging demand for flavor and the strength of its brands, with a focus on innovative brand marketing and category management initiatives [6][20] - The strategy includes expanding presence in growing channels such as mass, club, and e-commerce, while aligning with consumer trends towards healthier eating [20][21] - The company plans to continue investing in brand marketing and technology to drive volume growth and maintain competitive positioning [37][64] Management's Comments on Operating Environment and Future Outlook - Management noted increasing consumer uncertainty and concern over inflation, impacting consumer sentiment, particularly among lower-income consumers [15][16] - The company expects to deliver total volume growth across both segments for the year, with organic net sales growth projected between 1% and 3% [62][64] - Management remains confident in achieving the 2025 financial outlook, supported by strong sales performance and strategic investments [41][67] Other Important Information - The company plans to offset costs related to U.S. import tariffs on China with cost savings and targeted price adjustments [59][60] - Cash flow from operations for the first quarter was $116 million, down from $138 million in the previous year, primarily due to higher cash used for working capital [55][56] - The company is committed to maintaining a strong investment-grade rating while delivering strong cash flow in 2025 [57] Q&A Session Summary Question: Operating profit decline in Consumer segment - Management acknowledged the decline in operating profit was anticipated due to timing shifts in stock-based compensation and brand investments, but remains confident in full-year guidance [75][76][81] Question: Pricing dynamics in Americas Consumer business - Management indicated that pricing in the Americas is expected to be flat going forward, with some incremental pricing adjustments in EMEA to address commodity pressures [87][93] Question: Growth in Flavor Solutions and customer dynamics - Management highlighted strong performance from high-growth customers and QSRs, which offset weakness from larger CPG customers [103][110] Question: Reformulation efforts in response to consumer trends - Management noted an uptick in reformulation activity among customers, aligning with health and wellness trends, but emphasized that McCormick's portfolio has minimal use of artificial colors [111][113] Question: Key tariff risks and actions - Management confirmed that known tariffs on China are accounted for in forecasts, and they are prepared to manage potential future tariff impacts [117][120]