August 8, 2023
Fellow Shareholders,
We delivered record financial results in fiscal 2023. Specifically, the entire Lamb Weston team worked together to manage a difficult inflationary environment to deliver sales of nearly $5.4 billion and drive strong profit growth in each of our core business segments through a combination of pricing actions, mix improvement, and supply chain productivity. In addition, we returned more than $190 million of cash to shareholders by increasing our dividend for the sixth straight year and executing against our share repurchase plan.
My leadership team and I are proud of these results and our Lamb Weston colleagues’ commitment to supporting our customers, growing our business, and building operating momentum so that we can create value for our stakeholders over the long term.
Investing for Growth
Global category demand for frozen fries is strong, and we remain confident in our long-term growth opportunities. In fiscal 2023, we continued our efforts to position the company for future growth through acquisitions and strategic investments.
We strengthened our global capabilities with the purchase of the remaining interest in our European joint venture, which added nearly 1,500 new colleagues in Europe, the Middle East and Africa (“EMEA”), as well as six processing facilities capable of producing nearly two billion pounds of finished goods each year. The integration of the EMEA operations is well underway, and we believe this strategic transaction reinforces our capabilities to serve customers as a unified, global Lamb Weston.
We also acquired a controlling interest in our joint venture in Argentina, and broke ground on a 250-million-pound capacity expansion, which will support our ability to serve the growing South American market.
We made progress on major capital expansion projects in China, Idaho, and The Netherlands, all of which are on track to be completed within the next 18 to 24 months. These capacity investments, along with scheduled projects to modernize our existing facilities, will ensure that we continue to provide the quality products and service our customers expect from Lamb Weston.
Building and Strengthening Our Capabilities
Our investments this fiscal year extended beyond our global expansion efforts to encompass capability building across the organization. This work includes a range of investments in our people, communities, and capabilities – from expanding our learning and development opportunities, to ensuring our technology infrastructure will enable our future growth.
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We established the Lamb Weston Learning Academy, expanding our training and development opportunities for all global team members focused on capability building that will support their career growth.
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We established our Team Member Relief Fund, which provides financial support to our Lamb Weston team members during times of hardship.
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We contributed $4 million dollars to Lamb Weston Foundation to support grant making in our communities.
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We opened an Innovation Center in Bergen op Zoom, The Netherlands, where in close partnership with our Innovation Center in Richland, Washington, we’ll develop and test new product and processing ideas for customers in Europe and around the world.
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We invested in productivity initiatives at our manufacturing facilities, which helped to stabilize our supply chain during a challenging crop cycle and drive down costs over time.
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We continued to strengthen our operational infrastructure by completing the design work for the next phase of our new enterprise resource planning system. We expect to begin implementing this new system across a portion of our supply chain in North America in fiscal 2024.