Flowers Foods, Inc. · NYSE:FLO
Flowers Foods — Q4 2022 Earnings Presentation
24 slides from Flowers Foods's earnings presentation, Feb 9, 2023
Slide 1: Fourth Quarter 2022 Review
FOURTH QUARTER 2022 REVIEW February 9, 2023
Slide 2: Regarding Forward-Looking Statements
REGARDING FORWARD-LOOKING STATEMENTS Statements contained in this presentation and certain other written or oral statements made from time to time by Flowers Foods, Inc. (the “company”, “Flowers Foods”, “Flowers”, “us”, “we”, or “our”) and its representatives that are not historical facts are forwar
Slide 3: Key Messages
KEY MESSAGES • Strong sales increase driven by pricing actions to offset inflationary pressures • Leading brands continue to perform well, driven by investments in innovation and marketing • Mitigating inflationary costs through operational efficiencies and pricing actions • Planned acquisition of P
Slide 4: Q4 2022 Financial Highlights
Q4 2022 FINANCIAL HIGHLIGHTS Sales grew due to price increases to mitigate inflation, partly offset Adjusted EBITDA increased primarily due to higher sales, partly by lower volume offset by inflationary pressures Net income increased 23.6% to $48.6 million from $39.3 million in the same quarter of 2
Slide 5: Q4 2022 Financial Review
Q4 2022 FINANCIAL REVIEW NET SALES CASH FLOWS — FY’22 Cash from Ops Dividends $1.083B +10.1% v PY $360.9M $186.5M • Price/Mix +16.7%1 • Volume -6.6%2 Capex • Price increases to mitigate inflation, partly offset by lower volume $169.1M NET INCOME GAAP DILUTED EPS $48.6M +23.6% v PY $0.23 +$0.05 v PY
Slide 6: Fiscal 2023 Guidance
FISCAL 2023 GUIDANCE (Provided February 9, 2023) SALES ADJ. EBITDA1 ADJ. EPS1 Fiscal 2023 $5.176 to $513 to $1.20 to Considerations $5.242B $543M $1.30 • Ability to mitigate inflation • Consumer resiliency OTHER • Timing of cost savings initiatives Depreciation & amortization Effective tax rate • Pr
Slide 7: Long-Term Growth Target Scorecard
LONG-TERM GROWTH TARGET SCORECARD (1) Off FY’19 base (2) FY’20 was a 53-week year (3) Implied return using FY’23 guidance midpoint (4) No reconciliation of the forecasted range for Adjusted EPS to Diluted EPS and adjusted EBITDA to net income for the 52-week Fiscal 2023 is included in this press rel
Slide 8: Portfolio Strategy
PORTFOLIO STRATEGY 3 BALANCE GROWTH 11 ACCELERATE GROWTH High Grow at or slightly above the category rate Grow at or near double-digit rate Store Brand Foodservice • LOAF • PRIORITY • PRIORITY • PRIORITY • LOAF • LOAF • ALL Right To Win 4 MAXIMIZE PROFITABLITY 2 LEARN AND PROVE Improve profitability
Slide 9: Innovation in Action
INNOVATION IN ACTION Agile innovation team bringing new products to market—available on Creationsbyflowersfoods.com 9
Slide 10: Flowers' Market Share
FLOWERS’ MARKET SHARE FLO Bread Share FLO Cake Share 17.6 17.9 17.8 17.6 17.6 17.5 17.1 17.0 16.5 7.1 7.3 7.2 7.1 7.0 7.1 6.8 6.4 6.3 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Source: Flowers Custom Database – IRi Total US Mulo + C Store 10
Slide 11: Flowers Fresh Packaged Breads
FLOWERS FRESH PACKAGED BREADS Dollar Sales % Chg Unit Sales % Chg 15.9% 12.7% 11.1% 9.7% 9.7% 9.8% 3.5% 3.6% -0.1% -2.2% -2.1% -2.8% -2.9% -3.5% -4.5% -5.4% -6.1% -10.0% Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Source: Flowers Custom Database – IRi Total US Mulo + C St
Slide 12: Flowers Commercial Cake
FLOWERS COMMERCIAL CAKE Dollar Sales % Chg Unit Sales % Chg 12.1% 9.3% 7.3% 4.3% 4.7% 4.2% 3.8% 2.0% -0.4% -1.6% -2.5% -2.2% -3.8% -4.6% -7.0% -10.1% -14.0% -16.3% Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Source: Flowers Custom Database – IRi Total US Mulo + C Store 12
Slide 13: Organic Category Sales
ORGANIC CATEGORY SALES ORGANIC minus FLOWERS FLOWERS ORGANIC FLOWERS SHARE OF ORGANIC 73.2 1040.0 70.7 67.6 70.0 960.0 64.0 880.0 59.4 800.0 60.0 720.0 51.4 640.0 731.1 594.6 657.3 50.0 560.0 480.0 470.2 384.7 400.0 273.5 40.0 320.0 240.0 30.0 160.0 258.5 262.7 264.4 284.3 272.5 267.0 80.0 0.0 20.0
Slide 14: Gluten-Free Category Sales
GLUTEN-FREE CATEGORY SALES GLUTEN FREE minus FLOWERS FLOWERS GLUTEN FREE FLOWERS SHARE OF GLUTEN FREE 400.0 40.0 350.0 30.0 20.0 300.0 10.0 250.0 - 200.0 (10.0) 150.0 (20.0) 100.0 (30.0) 50.0 (40.0) - (50.0) FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
Slide 15: Branded vs Store Brand Market Share
BRANDED VS STORE BRAND MARKET SHARE FRESH PACKAGED BREAD CATEGORY 79.6 80.7 80.4 75.8 76.2 76.9 24.2 23.8 23.1 20.4 19.3 19.5 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Branded Store Branded Source: Flowers Custom Database – IRi Total US Mulo + C Store 15
Slide 16: Information Regarding Non-GAAP Financial Measures
INFORMATION REGARDING NON-GAAP FINANCIAL MEASURES Information Regarding Non-GAAP Financial Measures The company prepares its consolidated financial statements in accordance with U.S. Generally Accepted Accounting Principles (GAAP). However, from time to time, the company may present in its public st
Slide 17: Reconciliation of Earnings per Share to Adjusted EPS
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF EARNINGS PER SHARE TO ADJUSTED EARNINGS PER SHARE For the 12‐Week For the 12‐Week Period Ended Period Ended December 31, 2022 January 1, 2022 Net income per diluted common share 0.23 $ 0.18 Business process improvement consulting costs
Slide 18: Reconciliation of Gross Margin Excluding D&A
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF GROSS MARGIN EXCLUDING DEPRECIATION AND AMORTIZATION TO GROSS MARGIN (000S OMITTED) For the 12 Week For the 12 Week Period Ended Period Ended December 31, 2022 January 1, 2022 Sales $ 1,082,670 $ 983,490 Materials, supplies, labor and o
Slide 19: Reconciliation of SD&A to Adjusted SD&A
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF SELLING, DISTRIBUTION AND ADMINISTRATIVE EXPENSES TO ADJUSTED SD&A (000S OMITTED) For the 12 Week For the 12 Week Period Ended Period Ended December 31, 2022 January 1, 2022 Selling, distribution and administrative expenses $ 409,929 $
Slide 20: Reconciliation of Net Income to EBITDA and Adjusted EBITDA
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA (000S OMITTED) For the 12 Week For the 12 Week Period Ended Period Ended December 31, 2022 January 1, 2022 Net income $ 48,597 $ 39,322 Income tax expense 15,346 12,720 Interest expense, net 330
Slide 21: Reconciliation of Income Tax Expense to Adjusted
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF INCOME TAX EXPENSE TO ADJUSTED INCOME TAX EXPENSE (000S OMITTED) For the 12 Week For the 12 Week Period Ended Period Ended December 31, 2022 January 1, 2022 Income tax expense $ 15,346 $ 12,720 Tax impact of: Pension plan settlement los
Slide 22: Reconciliation of Net Income to Adjusted Net Income
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME (000S OMITTED) For the 12 Week For the 12 Week Period Ended Period Ended December 31, 2022 January 1, 2022 Net Income $ 48,597 $ 39,322 Business process improvement consulting costs 3,228 2,923 Pension
Slide 23: Reconciliation of Net Income to EBITDA (52 Weeks)
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA (000S OMITTED) For the 52 Week Period Ended December 31, 2022 Net income $ 228,394 Income tax expense 70,317 Interest expense, net 5,277 Depreciation and amortization 141,957 EBITDA 445,945 Other
Slide 24: Reconciliation of Debt to Net Debt
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF DEBT TO NET DEBT AND CALCULATION OF NET DEBT TO TRAILING TWELVE MONTH ADJUSTED EBITDA RATIO (000S OMITTED) As of December 31, 2022 Current maturities of long‐term debt $ ‐ Long‐term debt 891,842 Total debt 891,842 Less: Cash and cash eq