Sprouts Farmers Market, Inc. · NASDAQ:SFM
Sprouts Farmers Market — Investor Presentation (March 2015)
24 slides from Sprouts Farmers Market's investor presentation, Mar 3, 2015
Slide 1: Investor Deck March 2015
Exhibit 99.1 INVESTOR DECK March 2015
Slide 2: Forward-Looking Statements
Forward-Looking 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 expressions) aexpe
Slide 3: Overview of Sprouts
OVERVIEW OF SPROUTS 3
Slide 4: Sprouts is Well Positioned to Meet Needs of Health Conscious Consumers
Sproutsofis Needs Healthy Significant 4 grocery Today’s Well white Positioned store space Health that opportunity Conscious offers to Meetfresh, the and Consumers natural strong and neworganic store economics foods at great prices Broad consumer appeal One of the largest and fastest growing natural
Slide 5: Significant Growth Opportunity in Natural and Organic
Significant $620B SFM Natural 14% Our Opportunity ~86% SPINS Pro ($ $1,991 $2,438 2008 ¹Sprouts 2 5 Source: Pro inForma Potential /mm) 2009 Current forma $89 /U.S. projects $1,723 ~$531 & isProgressive benefiting $2,967 Market bn Net 2010 Growth Market1 Supermarket net Conventional Other, bn $1,490
Slide 6: Sprouts Has Evolved into a Healthy Grocery Store
Sproutspromotional HEALTH Continue Full-line SELECTION Produce VALUE Highly Promote Friendly Convenient, SERVICE Trusted, 6 isknowledgeable has prices value and healthy toChanging evolved benefit easy-to-shop across significantly grocery from -communicate from the theWay and consumer’s store a Speci
Slide 7: Sprouts: A Differentiated Small-Box Healthy Grocery Store
Sprouts—A Produce High Farmers 7 standard surrounded market Healthy private inspired, by Grocery label a complete open Fresh, Store store natural grocery layout&with offering organic lowDifferentiated offering profile displays Don’tassortment sell Convenient, most national of high-quality, small-box
Slide 8: Reaching a Broad Middle-Income Customer Base
Reaching Broad Middle Brand Strong More ¹Increasing 8 Represents than Awareness Customer marketing income a14 word-of-mouth Broad planned million and Demographics & and Base up Recognition promotions weekly pre-opening Medium of Consumers andcirculars grass-root toatabove programs each Throughhrough
Slide 9: Sprouts' Consumer Segments and Stages of Adoption
Sprouts’ DIET ¹HEALTH VALUE-FOCUSED CONVENIENCE-FOCUSED Segment Follow Do Does Shop Are 9 Company not always not at FOLLOWERS follow aSprouts Consumers Description specific live ENTHUSIAST CURIOUS consumer looking the a strict primarily healthiest diet for are (1) or insight because the at specific
Slide 10: Consumers Transition from Trial to Loyalty
Sprouts TRANSITION TRIAL Consumers 10 LOYALTY Grows Startitswith Consumers’ Then LIFESTYLE Shop Average an Over Basket TimeSize Makeand High the Quality Stores’ Gross Produce Margin Increasing Over Time Number of Sprouts Their Departments Primary Grocery Store
Slide 11: Significant Opportunity to Increase Consumer Basket Size
Sprouts’ More Our ¹Significant Sprouts 100% Traditional Specialty 11 59% Company average than Other Origin Main 50% opportunity Grocery consumer Club consumer’s Competitor of ofConsumer Mass Sprouts’ insight tomonthly increase isconsumers (1) the study Traditional spending trialare andcoming will ba
Slide 12: Drivers of Comparable Store Sales Growth
Drivers Pro 20.4% 14.8% 2.6% 11.6% 10.7% 7.4% 5.1% 2009 1 including growth Broad Appeals Growth Grew Continued Non-GMO, Middle 12“Comparable Forma 2010 9.7% 4.9% 2.3% private customer 20.6% 9.9% of income of in toall the Comp private innovation Comparable 2011 everyday organics, stores label period
Slide 13: Proven Store Concept and Market Expansion
Estimated Proven Sprouts’ penetration Successful ¹“natural/lifestyle” Note: Nevada 5 Colorado 81 California Missouri 28 6 South 1 Existing Mid-Term 13Based Utah Kansas Georgia Carolina 625 Store 2 Concept: on footprint Market 115+ North Expansion Texas an in in count assumed markets Years Arizona 19
Slide 14: Sprouts' Phoenix Case Study
Sprouts’ Case ($ Target +4% Sales Whole +11% Weekly Average 2004 Over 1 14 in ‘000s) +7% Study this 2005 +3% added Foods Not opened opened Consistent time +7% 2006 of indicative +10% +30% aperiod 2002 Sprouts 2007 Growth P-Fresh Frys sales 2008 ofPhoenix every +15% growth 2009 in Wal-Mart Competitiv
Slide 15: Growing Responsibly
Growing Responsible Food Cardboard, Piloting LED LEED Launched Transcritical Energy Established Created Promoted RESPONSIBLE Received Working Developing 15 lighting Rescue equivalent retro 3000 composting with Responsibly Leaping more “Green EMC pallet Charitable produce private retailing commission
Slide 16: Business & Financial Performance
BUSINESS & FINANCIAL PERFORMANCE 16
Slide 17: Best-in-Class Business Results and Powerful Leverage
Powerful Leverage 3 (organic 17straightgrowth) Growth One yearsofofthe of Business 9%+ more Best comp than 9%+ – Results sales 150% Natural growth, over esults Compelling the Driven 31past consecutive three Infrastructure years quarters Deleveraged White of positive Space capital comp andstructure O
Slide 18: Balanced Pro Forma Net Sales Growth History
Balanced Pro ($ $1,991 $2,438 2008 ’08-’14 20.4% 14.8% 2.6% 11.6% 10.7% 7.4% 5.1% 2009 ¹History 2 including growth 18Pro “Comparable inForma mm) forma 2009 2010 9.7% 4.9% 2.3% 20.6% 9.9% $1,723 of CAGR: ofSales all the $2,967 Growth Net 2010 2011 net stores period $1,490 Sales1 sales store Growth 18
Slide 19: Momentum Continues: Comparable Store Sales Highlights
Momentum Consumers Highlights specialty Pro 22.4 20.3 19.2 85 13.8 12.8 Q4 2-Year 1. including adding 19 “Comparable .2013 Forma % % Stacked the 20.8 9.5 9.0 Q1 and all pro Comparable %focus Continues % 2014 stores attribute forma 22.3 store on Q2 acquired % value comparable sales 2014 based Store a
Slide 20: Impressive Adj. EBITDA and Adj. Net Income Growth
Impressive $265 Adj. ($ $67 2012 ’12 ²¹Note: 20 See in–$111 EBITDA¹ Net mm) the $195 2013 ’14 Financial Appendix Income² CAGR: CAGR:67% $40 $147 2014 Earnings information %34% Margin toGrowth this presentation 7.4% on this 8.0% slide 8.9% forfor a reconciliation fiscal 2012 gives of adjusted pro for
Slide 21: Compelling Target Store Economics
Compelling Target Store ¹Pre-Tax 21 Includes Size New Cash-on-Cash store Average Store Unitbuild-out Economics Economics 28kReturns sq.(net ft. Net ofofcontributions 35%-40% Cash Investment¹ within from 3-4 landlords), $2.8years millioninventory First Year (net Sales of payables) ~$10 – $12andmillio
Slide 22: Why Sprouts: Growing Authentic and Fast
WhyGrowing Authentic Fast Significant Proven Resilient Passionate prices 22 Sprouts Significantly and Business Fresh, Team New Replicable isSegment aStore with Natural Compelling Model lower aGrowth Store of Customer-Focused and Delivering the 2018 Model Organic U.S. Investment Opportunity 9%Superm
Slide 23: Appendix: Supplemental Materials
APPENDIX: SUPPLEMENTAL MATERIALS 23
Slide 24: Adjusted Net Income Reconciliation
TheLoss Appendix ended Thirteen December 2014 Income Store Costs IPO Secondary Loss Interest Depreciation, Net Per Adjusted (a) with period-to-period (b) professional because (c) and (d) operations. adjusted (e) comparability (f) Company directly (g) rates operations 1 Store Loss Secondary Adjusted
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