Sprouts Farmers Market, Inc. · NASDAQ:SFM
Sprouts Farmers Market — Investor Presentation (April 2014)
27 slides from Sprouts Farmers Market's investor presentation, Apr 11, 2014
Slide 1: Investor Deck April 2014
Investor Deck April 2014 Exhibit 99.1 Investor Deck April 2014
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non- GAAP Financial Measures Forward-Looking Statements and Non- GAAP Financial Measures Certain statements in this presentation are forward-looking as defined in the Private Securities Litigation Reform Act of 1995. Any statements contained herein (including, but not
Slide 3: Overview of Sprouts
Overview of Sprouts Overview of Sprouts
Slide 4: Sprouts at a Glance
Sprouts at a Glance Sprouts at a Glance High-growth, value-oriented fresh, natural and organic food retailer Broad consumer appeal One of the largest natural and organic retailers Significant momentum Significant white space opportunity
Slide 5: Benefitting from Long-Term Macro Trends
Benefitting from Long-Term Macro Trends Strong Market Opportunity 1 Supported by Strong Macro Tailwinds Sprouts is Outpacing Relevant Segments 2 Benefitting from Long-Term Macro Trends Sprouts growing at 7x U.S. Supermarkets 2008-2012 CAGR: 2.4% 6.1% 8.6% 10.3% 17.1% U.S. Supermarkets Vitamins & Sup
Slide 6: Sprouts Targets the Conventional Supermarket Customer
Sprouts Targets the Conventional Supermarket Customer Broad Customer Demographics Successful Across Markets Sprouts Targets the Conventional Supermarket Customer Middle income and up Educated Wide spectrum of demographic and ethnic makeups Wanting to eat healthier Looking for value “Natural / lifest
Slide 7: Sprouts has a Differentiated Go-to-Market Strategy
Sprouts has a Differentiated Go-to-Market Strategy Complete Natural & Organic Offering HEALTH SELECTION VALUE SERVICE Sprouts has a Differentiated Go-to-Market Strategy An Engaged, Loyal Customer Base Leading to Strong Financial Performance and Significant New Unit Growth Opportunity
Slide 8: Sprouts "Flips" the Conventional Grocery Store Model
Sprouts “Flips” the Conventional Grocery Store Model Sprouts “Flips” the Conventional Grocery Store Model Produce surrounded by a complete grocery offering Differentiated assortment of high- quality, healthy alternatives Farmers market inspired, open store layout with low profile displays Convenient
Slide 9: Fresh Produce is at the Core of Sprouts' Offering
Fresh Produce is at the Core of Sprouts’ Offering Produce is a common denominator among customers Supply chain system scalable to support growth Focus on freshness, speed-to-market and value Prices significantly below competitors drive trial and traffic Fresh Produce is at the Core of Sprouts’ Offer
Slide 10: Reaching a Broad Base of Consumers in Both Traditional and Digital Mediums
Reaching a Broad Base of Consumers in Both Traditional and Digital Mediums Reaching a Broad Base of Consumers in Both Traditional and Digital Mediums More than 12 million weekly circulars Reinforces value offering 30+ annual department promotions ¹ , which drive transition to increased basket size a
Slide 11: Slide 11
Slide 12: Estimated 15+ Years of New Store Growth Potential
Estimated 15+ Years of New Store Growth Potential U.S. Store Count ¹ New Mexico Texas Colorado Utah Arizona Nevada California Oklahoma Kansas Georgia Estimated 15+ Years of New Store Growth 1 Based on an assumed new store growth rate of 12% per year and research conducted by Buxton Company in 2012.
Slide 13: Sprouts' Consistent Growth in Competitive Markets
Sprouts’ Consistent Growth in Competitive Markets Broad Appeal Makes Sprouts a Formidable Competitor Sprouts’ Consistent Growth in Competitive Markets Case Study of a Sprouts Phoenix Location 1 Not indicative of every store location. Whole Foods opened 2002 Wal-Mart opened Trader Joe’s opened Frys M
Slide 14: Business & Financial Performance
Business & Financial Performance Business & Financial Performance
Slide 15: A Powerful Long-Term Growth Engine
A Powerful Long-Term Growth Engine A Powerful Long-Term Growth Engine High, balanced sales growth Margin expansion in existing stores Operating leverage from scale and infrastructure Deleverage capital structure Long-Term Net Earnings Growth Target of 20%+
Slide 16: Compelling Unit Economics
Compelling Unit Economics Target New Store Economics Pre-Tax Cash-on-Cash Returns 35%-40% within 3-4 years Compelling Unit Economics ¹ Includes store build-out (net of contributions from landlords), inventory (net of payables) and cash pre-opening expenses. Store Size 25 – 28k sq. ft. Net Cash Inves
Slide 17: History of Organic Growth
History of Organic Growth Pro Forma Comparable Store Sales Growth 2 Pro Forma Net Sales 1 Balanced Sales Growth Across Comparable Store Sales Growth and New Store Openings History of Organic Growth ¹ Pro forma net sales reflect the net sales of our predecessor entity and Sunflower as if the Henry’s
Slide 18: Robust Earnings Growth
Robust Earnings Growth Adj. EBITDA ¹ Adj. Net Income ² Robust Earnings Growth Note: Financial information on this slide for fiscal gives pro forma effect to the Sunflower Transaction as if it had been consummated on the first day of fiscal 2012. ¹ See the Appendix to this presentation for a reconcil
Slide 19: Momentum Continued Through Q1
Momentum Continued Through Q1 Pro Forma Comparable Store Sales Growth 1 Highlights Momentum Continued Through Q1 1. “Comparable store sales growth” refers to the percentage change in our comparable store sales as compared to the prior comparable period. Pro forma comparable store sales growth is cal
Slide 20: Long-Term Financial Targets
Long-Term Financial Targets Unit Growth ~12% Comparable Store Sales Growth 6%+ Total Sales Growth ~15% EBIT Growth 17 – 20% Net Income Growth 20%+ Long-Term Financial Targets Note: These targets are forward-looking statements, are subject to significant business, economic, regulatory and competitive
Slide 21: Why Sprouts is a Compelling Investment
Why Sprouts is a Compelling Investment Significantly lower prices 11% CAGR to $113B in 2020 1,200 potential stores (7.2x current base) Target 35 – 40% cash-on- cash returns 20% 2-year comps Why Sprouts is a Compelling Investment Authentic Natural and Organic Food Offering at Great Value Fast Growing
Slide 22: Appendix: Supplemental Materials
Appendix: Supplemental Materials
Slide 23: Non-GAAP Reconciliation
Non-GAAP Reconciliation Non-GAAP Reconciliation The following table shows a reconciliation of adjusted and pro forma adjusted net income , and adjusted and pro forma adjusted EBITDA to net income for the thirteen and fifty-two weeks ended December 29, and pro forma net income for the thirteen and fi
Slide 24: Pro Forma Reconciliation
Pro Forma Reconciliation Pro Forma Reconciliation SPROUTS FARMERS MARKET, INC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS For the Thirteen Weeks Ended December 30, 2012 (in thousands, except per share amounts)
Slide 25: Pro Forma Reconciliation
Pro Forma Reconciliation Pro Forma Reconciliation SPROUTS FARMERS MARKET, INC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS For the Fifty-two Weeks Ended December 30, 2012 (in thousands, except per share amounts)
Slide 26: Pro Forma Reconciliation
Pro Forma Reconciliation Pro Forma Reconciliation SPROUTS FARMERS MARKET, INC. NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION 1. Basis of Presentation and Description of Transactions Effective May 29, 2012, the Company acquired all of the outstanding common and preferred s
Slide 27: Farmers Market
FARMERS MARKET
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