Sprouts Farmers Market, Inc. · NASDAQ:SFM
Sprouts Farmers Market — Investor Presentation (August 2015)
26 slides from Sprouts Farmers Market's investor presentation, Aug 13, 2015
Slide 1: Sprouts Farmers Market Investor Deck August 2015
Exhibit 99.1 SPROUTS FARMERS INVESTOR DECK AUGUST MARKET 2015
Slide 2: Forward-Looking Statements
Forward-Looking SPROUTS Certain statements similar expected presentation. to ability and information In accordance additional well combination collectively, in adjusted interest with These reported Company’s consider 2 measures. successfully connection addition Exchange as the non-GAAP to expression
Slide 3: Overview of Sprouts
SPROUTS FARMERS OVERVIEW OF SPROUTS MARKET
Slide 4: Healthy Living Well Positioned to Meet Needs of Health Conscious Consumers
Sprouts SPROUTS Healthy Broad One Industry Significant 4 ofconsumer the is grocery leading Well largest white FARMERS Positioned store results appeal space and that fastest MARKET opportunity offers to Meet growing fresh, the andnatural Needs natural strongof and and new Today’s organic organic stor
Slide 5: Significant Market Opportunity and Progressive Growth
&Pro SPROUTS Significant $620B SFM Natural Our Other, SPINS Pro ($ ’08 2008 $2,967 $2,438 $1,991 $1,723 $1,490 $1,239 $1,059 Sprouts 1 2 5 Source: Organic in–Forma Potential mm) 2009 Current ’14 forma incl. U.S. projects & isCAGR: Progressive benefiting Organic: Channel Net 2010 Growth Market1 FARME
Slide 6: Sprouts Is Changing the Way People Perceive and Shop for Healthy Food
SPROUTS Sprouts HEALTH Continue Full-line SELECTION Full Produce VALUE Highly Promote Convenient, SERVICE Trusted, 6 selection promotional isknowledgeable has prices value healthy toChanging FARMERS evolved benefit friendly ofacross significantly unique grocery from -from the and communicate the MAR
Slide 7: Differentiated Value-leader Store Model
Sprouts SPROUTS Value-leader Produce Differentiated High Fresh, Don’t Farmers Convenient, Comfortable, FROZEN DAIRY VITAMINS GROCERY BULK PRODUCE PROMOTIONAL ENTRANCE FLORAL CHECKSTANDS BEER 7 BAKERY DELI MEAT standard SEATING sell natural & FOODS -market surrounded WINE AFOODS most FARMERS Healthy
Slide 8: Reaching a Broad Customer Base
Reaching SPROUTS Broad Middle Medium Boomers, Diverse Value Brand Strong More 30+ Digital Increasing Over Sprouts’ VITAMIN Don’t EXTRAVAGANZA Yes, DOUBLE Twice Gluten 25% Jubilee 1 8 Represents annual Everything OFF 1.2 than conscious Miss Awareness as Customer marketing FREE & income ethnic You to
Slide 9: Sprouts' Broad Consumer Segments
Sprouts’ SPROUTS Segment DIET HEALTH Follow VALUE-FOCUSED CONVENIENCE-FOCUSED Do Does Shop Are 1 9 Company not always not at FOLLOWERS follow aSprouts Consumers Description specific live ENTHUSIAST CURIOUS FARMERS looking consumer the a strict primarily healthiest diet for are (1) or because insight
Slide 10: Sprouts Consumers Grow Over Time
Sprouts SPROUTS Consumers TRAFFIC COFFEE Cereal Then TRIAL Over TRANSITION 10 TRUSTTime Shop Grows Make an FARMERS Start Increasing itswith Sprouts Consumers’ High MARKET Number Their Quality Average Primary ofProduce Departments Basket Grocery Size Store and the Stores’ Gross Margin Over Time
Slide 11: Sprouts' Significant Opportunity to Increase Trial and Basket Size
Sprouts’ SPROUTS More Our Significant Sprouts 1 59% Grocery Traditional Specialty Mass Club Other 11Company average than Origin Main 50% opportunity FARMERS consumer consumer’s Competitor of ofConsumer Sprouts’ insight MARKET tomonthly increase isconsumers (1) the study Traditional spending trialare
Slide 12: Proven Model Supports Balanced Growth Footprint
1200 SPROUTS Proven Sprouts’ Demographics Model Successful “natural/lifestyle” Balanced 14% U Nevada 5 M Kansas 26 C A 2 Tennessee 82 S Oklahoma 29 New Arkansas T 7 6 N 3 35 Existing Florida Mississippi Alabama Louisiana Georgia Mid-Term 1 12exas outh olorado alifornia tah rizona orth Based issouri
Slide 13: Sprouts Succeeds Among Competitive Markets
Sprouts SPROUTS Case ($ Average Whole Wal-Mart Target Trader +10% +4% +7% +3% +11% +30% +15% +1% Costco Frys 2004 Over 1 13Not in Marketplace ‘000s) Study this 2005 indicative added Joe’s Foods opened Succeeds Weekly time opened 2006 FARMERS ofopened P-Fresh opened aperiod Sprouts of 2007 Sales Amon
Slide 14: Responsible Operations
Sprouts SPROUTS Responsible Food Program Cardboard Piloting LED LEED •Launched Established Created Building Promoted RESPONSIBLE Received Working Developing 14 Transcritical Energy lighting Rescue equivalent is more composting –retro with health Leaping more EMC Growing Donated and FARMERS Healthy p
Slide 15: Business & Financial Performance
SPROUTS FARMERS BUSINESS & FINANCIAL MARKET PERFOMANCE
Slide 16: Compelling Growth Powerful Economics
Powerful SPROUTS 9%+ Compelling Leverage One 33 14% Cumulative Deleveraged 16 consecutive of new Natural theGrowth Infrastructure store Best FARMERS pro-forma Store-Level capital and unit quarters White Organic Business growth, structure Space EBITDA MARKET for of Economics Sector positive –Scale st
Slide 17: Balanced Pro Forma Sales Growth
Balanced SPROUTS ($ ‘08 2008 $1,059 $1,239 $1,490 $1,723 $1,991 $2,438 $2,967 Pro 2009 9.9% 20.6% 10.7% 20.4% 9.7% 14.8% 5.1% 7.4% 2.3% 4.9% 2.6% 11.6% Prior History 1 2 including growth 17Pro “Comparable in–Forma mm) Period 2009 2010 ‘14 forma of ofCAGR: Sales all the Growth Net Comparable 2010 201
Slide 18: Consistent Net Sales Growth
Consistent SPROUTS Net ($ ‘12 YoY Pro $1,991 $1,466 2014 $2,967 2013 $2,438 1H $1,760 Note: 18 in2015 2014 –Forma Sales Growth: mm) ‘14 Pro CAGR forma Strong 2012 FARMERS 20% financial 22% SalesMARKET Growth information Continues on this slide gives effect to the Henry’s Transaction and the Sunflowe
Slide 19: Two-Year Stacked Comps Highlights
Two-Year SPROUTS Highlights Produce Strong 21% Cannibalization 8 Continued Specialty, Comparable 20.3 9.5 19.2 9.0 Q3 22.3 8.5 Q4 17.6 4.8 Q1 14.6 5.1 Q2 2-Year 1. 19 new “Comparable Comps 2014 2015 %% Q2 stores produce Stacked deflation 2015 attribute Stacked growth impacted FARMERS Store opened Sa
Slide 20: Strong Adjusted EBITDA Performance
ASee SPROUTS Adj. $265 $195 $147 $162 Adjusted ($ Margin ‘12 YOY $66 2014 $111 2013 $67 2012 $40 1H $74 Note: 1 2 20 History in2015 2014 –EBITDA1 mm) ‘14 Growth: the Financial Appendix EBITDA CAGR: ofFARMERS Strong 11% 12% information 34% 67% 7.4% to Earnings this MARKET 8.0% presentation onPerforma
Slide 21: Compelling New Store Unit Economics
Compelling SPROUTS Target Store Net First Initial Average $2.8 ~$10 20-30% Pre-Tax 1 21Includes Cash million Year to Size Sales New $12 Cash-on-Cash over 28k Investment1 Sales store FARMERS Store Unit Growth million square 3 tobuild-out Economics 4Economics years feetReturns MARKET (net ofofcontribu
Slide 22: Aggressive Long-Term Financial Targets
Aggressive SPROUTS Unit Comparable Total EBIT Net 17 ~15% 6%+ ~14% Note: 20%+ control material. described Exchange 22 –Income 20% Growth Sales Growth These ofFor under the Commission. FARMERS Growth Long-Term Growth targets Store discussion Company theSales are caption forward-looking MARKET Financi
Slide 23: Why Sprouts: Authentic Fast Growing Business
WhyCAGR SPROUTS Authentic Fast Significant Resilient Passionate Significantly 9% 1,200 Target 23 Growing Sprouts potential 35%Business Fresh, Team to New FARMERS – lower is 40% $135B Segment stores aStore with Natural Compelling Model cash-on-cash prices in (6x aGrowth of MARKET 2018 Customer-Focuse
Slide 24: Appendix: Supplemental Materials
SPROUTS FARMERS APPENDIX: SUPPLEMENTAL MARKETMATERIALS
Slide 25: Non-GAAP Measure Reconciliation
SPROUTS Appendix The ended Sprouts Non-GAAP (In (Unaudited) thousands) following June Farmers FARMERS 28, Measure table 2015 Market, shows and Reconciliation MARKET June Inc. a reconciliation and 29, Subsidiaries 2014: of adjusted net income and adjusted EBITDA to net income and adjusted earnings pe
Slide 26: Thank you!
FARMERS SPROUTS Thank you! MARKET
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