Flowers Foods, Inc. · NYSE:FLO
Flowers Foods — Q2 2023 Earnings Presentation
23 slides from Flowers Foods's earnings presentation, Aug 11, 2023
Slide 1: Second Quarter 2023 Review
Slide 2: 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 forward-looking statements as defined in th
Slide 3: Key Messages
KEY MESSAGES * Strong sales growth driven by pricing actions to offset inflationary pressures * Branded Retail business performed well, driven by investments in innovation and marketing * Dave's Killer Bread snack bar launch on track * Margins improved as price initiatives mitigated inflationary pre
Slide 4: Q2 2023 Financial Highlights
Q2 2023 FINANCIAL HIGHLIGHTS Sales grew due to price increases to mitigate inflation and the Adjusted EBITDA increased primarily due to improved gross acquisition contribution, partly offset by lower volume margin from increased sales, partly offset by higher SD&A Net income increased 18.8% to $63.8
Slide 5: Q2 2023 Financial Review
Q2 2023 FINANCIAL REVIEW NET SALES CASH FLOWS — YTD Cash from Ops Dividends 1.228B +8.8% v py $1. oY $128.9M $98.1M + Price/Mix +13.3%! + Volume -6.1%2 Capex + Papa Pita acquisition +1.6% $68.4M + Price increases to mitigate inflation and acquisition contribution, partly offset by lower volume NET I
Slide 6: Fiscal 2023 Guidance
FISCAL 2023 GUIDANCE (Provided August 10, 2023) SALES ADJ. EBITDA' ADJ. DIL. EPS! $5.095.. $503. $1.18. $5.141B $528M = $1.25 + Demand reversion * Ability to mitigate inflation OTHER * Consumer resiliency Depreciation & amortization Effective tax rate + Timing of cost savings initiatives $155 = $S16
Slide 7: Long-Term Growth Target Scorecard
LONG-TERM GROWTH TARGET SCORECARD . Sales 6.4% 2.5% 5.2% 5.5% Adj 4-6%4 23.4% 7.8% 5.9% 5.1% EBITDA * . . . Adj dil. “oes EPS 7-9%' 36.5% 13.7% 6.1% () OFF FY 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
Slide 8: Flowers' Market Share
FLOWERS’ MARKET SHARE =FLO Bread Dollar Share = = FLO Cake Dollar Share 18.2 18.1 179 179 7.3 v7 168 17.3 17.4 7.2 7A 7.0 7A 68 | : : | ; : ; : : Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Source: Flowers Custom Database - Circana Total US Mull + C Store 8
Slide 9: Flowers Fresh Packaged Breads
FLOWERS FRESH PACKAGED BREADS mDollar Sales % Chg 9.6% 5.5% Q2 2021 Q3 2021 Q4 2021 Q1 2022 Source: Flowers Custom Database - Circana Total US Mulo + C Store 9.6% Q2 2022 Unit Sales % Chg Q3 2022 9.9% -4.4% Q4 2022 4.9% Q1 2023 6.9% Q2 2023 9
Slide 10: Flowers Commercial Cake
FLOWERS COMMERCIAL CAKE Dollar Sales % Chg == Unit Sales % Chg 12.1% 9.3% 7.2% 4.3% 4.7% 4.2% LI] LI] = — “25% -2.2% 3.9% -4.9% “10% 6.5% 10.1% “14.0% 14.9% 16.3% Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 = Source: Flowers Custom Database - Circana Total US Mulo + C Sto
Slide 11: Organic Category Sales
ORGANIC CATEGORY SALES mms FLOWERS ORGANICS FLOWERS SHARE OF ORGANICS mmm ORGANIC FRESH PACKAGED BREADS xFLO 732 74.7 70.7 67.6 64.0 59.4 o $731.1 $769.6 S ca $657.3 = $470.2 $384.7 $262.7 $264.4 $284.3 $272.5 $267.3 $261.3 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 L52 WE 7-16-23 1 Source: Flowers Cus
Slide 12: Gluten-Free Category Sales
GLUTEN-FREE CATEGORY SALES mmm GLUTEN FREE FPB XFLO = mm FLOWERS GF-_ = FLOWERS SHARE OF GF 35.2 34.5 32.5 29.0 21.8 $130.4 12.5 $229.7 $229.1 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 52 WE 7-16-23 Source: Flowers Custom Database - Circana Total US Mulo + C Store 12
Slide 13: Branded vs Store Brand Market Share
BRANDED VS STORE BRAND MARKET SHARE FRESH PACKAGED BREAD CATEGORY 79.6 76.2 76.9 23.8 231 20.4 FY 2018 FY 2019 FY 2020 = Branded Dollar Share Source: Flowers Custom Database - Circana Total US Mulo + C Store 80.7 19.3 FY 2021 =Store Brand Dollar Share 80.5 19.5 FY 2022 79.8 20.2 L52 WE 7-16-23 13
Slide 14: 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 15: Adjusted net income per diluted share reconciliation
For the 12 Week For the 12 Week Period Ended Period Ended July 15, 2023 July 16, 2022 Net income per diluted common share $ 0.30 $ 0.25 Business process improvement costs 0.02 0.04 Restructuring charges 0.01 — Acquisition-related costs NM — Severance and lease termination — 0.01 Legal settlement — 0
Slide 16: Gross margin excluding depreciation and amortization
For the 12 Week For the 12 Week Period Ended Period Ended July 15, 2023 July 16, 2022 Sales $ 1,228,050 $ 1,129,051 Materials, supplies, labor and other production costs (exclusive of depreciation and amortization) 626,097 586,084 Gross Margin excluding depreciation and amortization 601,953 542,967
Slide 17: Adjusted SD&A reconciliation
For the 12 Week For the 12 Week Period Ended Period Ended July 15, 2023 July 16, 2022 Selling, distribution and administrative expenses $ 475,916 $ 438,350 Business process improvement costs (6,588) (11,658) Legal settlement - (2,000) Severance and lease termination costs - (1,717) Acquisition-relat
Slide 18: Adjusted EBITDA reconciliation
For the 12 Week For the 12 Week Period Ended Period Ended July 15, 2023 July 16, 2022 Net income $ 63,760 $ 53,680 Income tax expense 20,605 16,689 Interest expense, net 4,251 1,504 Depreciation and amortization 34,984 32,922 EBITDA 123,600 104,795 Other pension benefit (62) (178) Business process i
Slide 19: Adjusted income tax expense
For the 12 Week For the 12 Week Period Ended Period Ended July 15, 2023 July 16, 2022 Income tax expense $ 20,605 $ 16,689 Tax impact of: Business process improvement costs 1,647 2,915 Restructuring charges 624 - Legal settlement - 500 Severance and lease termination costs - 429 Acquisition-related
Slide 20: Adjusted net income reconciliation
For the 12 Week For the 12 Week Period Ended Period Ended July 15, 2023 July 16, 2022 Net Income $ 63,760 $ 53,680 Business process improvement costs 4,941 8,743 Restructuring charges 1,875 - Legal settlement - 1,500 Severance and lease termination costs - 1,288 Acquisition-related costs 367 - Adjus
Slide 21: Trailing 52-week adjusted EBITDA reconciliation
For the 12 Week For the 12 Week For the 16 Week For the 12 Week Trailing 52 Week Period Ended Period Ended Period Ended Period Ended Period Ended October 8, 2022 December 31, 2022 April 22, 2023 July 15, 2023 July 15, 2023 Net income $ 40,528 $ 48,597 $ 70,710 $ 63,760 $ 223,595 Income tax expense 1
Slide 22: Net debt to adjusted EBITDA
As of July 15, 2023 Current maturities of long-term debt $ - Long-term debt 1,074,544 Total debt 1,074,544 Less: Cash and cash equivalents 11,711 Net Debt $ 1,062,833 Adjusted EBITDA for the Trailing Twelve Months Ended July 15, 2023 $ 500,840 Ratio of Net Debt to Trailing Twelve Month Adjusted EBIT
Slide 23: Fiscal 2023 adjusted diluted EPS guidance reconciliation
Range Estimate Net income per diluted common share $ 1.10 to $ 1.17 Business process improvement costs 0.05 0.05 Restructuring charges 0.02 0.02 Acquisition-related costs 0.01 0.01 Adjusted net income per diluted common share $ 1.18 to $ 1.25