Sprouts Farmers Market, Inc. · NASDAQ:SFM
Sprouts Farmers Market — Investor Presentation (August 2014)
25 slides from Sprouts Farmers Market's investor presentation, Aug 20, 2014
Slide 1: Investor Deck August 2014
Exhibit 99.1 Investor2014 August Deck
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking GAAP Certain statements similar expected presentation. to ability and information In in additional well combination collectively, connection diluted income disposal These reported Company’s consider 1 measures. successfully accordance addition Exchange asnon-GAAP to Financial earning
Slide 3: Overview of Sprouts
Overview of Sprouts
Slide 4: Sprouts offers healthy living for less
Sprouts Healthy Less! offers Broad One organic Significant 3 opportunity offresh, consumer the foods retailers Delivers grocery largest momentum white natural at great store appeal Healthy space natural and that prices Living and for
Slide 5: Sprouts Go-to-Market Strategy
Sprouts Go-to-Market HEALTH Complete Organic An Performance 4 Engaged, has Offering Natural SELECTION aand Loyal Differentiated Strategy Significant &Customer VALUE New Base SERVICE Unit Leading Growth to Strong Opportunity Financial
Slide 6: 7.5x Sprouts Consumers Significant Growth Opportunity
7.5x Sprouts Consumers Significant 1 2 Conventional Sproutshas isMarket Seek aOutpacing Long Consumers Healthy Opportunity Runway Relevant Products a Superior for As Growth Segments at Sprouts Experience a Great as Offers Value Sprouts $600B SFM Natural Market 5.0x 0.4% 4.2x Organic: 9% U.S. 1.0x 2.
Slide 7: Sprouts Grocery Store Model
offering Sprouts Grocery aProduce complete “Flips” Store surrounded grocery Model the Conventional by assortment Differentiated quality, alternatives healthy of high- Farmers inspired, layout displays with market open lowstore profile 25 – 28k sq. ft. small-box: Convenient, Comfortable, shop environ
Slide 8: Broad Customer Appeal in a Variety of Markets
Broada Customer With Successful Broadin Appeal, a Variety Demographics Sprouts of Markets isDraw Traffic in Variety of Markets Middle Los Colorado Successful “Sprouts Angeles income Proves and inand new Oklahoma and That EIasup Paso well Eating Densely “Natural as highly Healthy populated, / competi
Slide 9: Fresh Produce Offering and Regional Distribution Model
Freshand Offering Regional In-House Produce Current Supply customers Focus growth Prices trial 8 Produce on significantly chain Produce Local is traffic Buying freshness, Relationships a common system is Sourcing, Distribution at Model the below speed-to-market scalable denominator Core Centers Sour
Slide 10: Reaching Both Traditional and Digital Mediums
throughout Reaching Both More Reinforces Traditional thana12 health-focused, the Broad million store and Base Digital weekly of Consumers value Mediums circulars offering in 30+ increased Digital ¹and 9 Represents tomorrow annual andbasket social promotions1, planned size platforms promotions and wh
Slide 11: Increasing Share of Consumers' Food Wallet Over Time
“FoodTime Increasing Over LIFESTYLE Sprouts Grocery Then TRANSITION Number Consumers TRIAL High 10 Quality Shop Retail Their Grows Store ofAverage Make Departments an Start Wallet” Produce Primary Increasing itswith Share Basket of Size Consumers’ and Gross Margin Over Time
Slide 12: Estimated Proven Growth Opportunity: Store Count Potential
Estimated Proven Growth Strong Opened 24 years Demographics Utah Nevada ~1,200 4 Kansas 77 New California 2 5 Mexico C 6 Georgia South 182 Texas 1.6x 30 Alabama Existing As Target ¹Mississippi 2014 11 75Based olorado arolina 1new of300 Missouri Markets Carolina August 2Near performance Concept: stor
Slide 13: Sprouts' Competitive Case Study
Sprouts’ Competitive Case ($ (1) Wal-Mart +10% Sales +7% Target Whole Frys +30% re-opened +15% Average opened 2004 Broad 1 12Not inopened ‘000s) Study 2005 +3% indicative Appeal opened added Foods +1% Consistent Trader 2006 +11% +4% ofMarkets P-Fresh Makes a Sprouts of 2007 Joe’s every Growth Sprout
Slide 14: Business & Financial Performance
Business & Financial 13 Performance
Slide 15: A Consistent Growth Engine
and A Consistent 10%+ Performance Natural Across Organic Geographies Growth Powerful Vintages Comp Store-Level /Existing Sector and Store Long-Term Economics Growth Compelling Markets Margin Expansion One Stores Opportunities Infrastructure Leverage of Growth the inWhite inthe Best forPublic Engine
Slide 16: Pro Forma Net Sales History and Comparable Growth
History 1 Pro ($ ‘08-’13 20.4% 10.7% 14.8% $1,991 $1,490 9.7% 2.6% $1,239 2008 2.3% 5.1% 4.9% 7.4% 2009 Prior ¹Balanced “Openings 2 including growth 15 Comparable Pro 2inForma mm) forma Period 2009 2010 $1,059 $2,438 $1,723 11.6% of CAGR: ofSales all the Organic Net 2010 2011 net Current stores stor
Slide 17: Consistent Net Sales Growth
Consistent Net ($ ‘11-’13 Pro $1,723 $1,991 $1,196 $2,438 $1,466 Note: 16 inForma Sales mm) Pro CAGR forma and 2011Strong 19.0% Pro financial Forma YoY Sales information Growth: 2012 Growth 2013 22.6% on 1Hthis 2013slide 1Hgives 2014effect to the Henry’s Transaction and the Sunflower Transaction for
Slide 18: Highlights Continued Through Q2
Highlights Continued Through Q2 Momentum Consumers focus on value and health continues to generate strong same store sales, customer traffic and top-line sales 20% Q2 2014 Sales Growth Opened 6 new stores in Q2 and 15 YTD, on track for annual target of 24 openings Continued P 1 growth 20.3 11.1 9.4
Slide 19: Robust Adjusted EBITDA and Net Income Growth
Robust Adj. ($ YoY $105 $66 $147 2012 $40 M % 7.4% ²¹Note: 18 See argin in EBITDA¹ Growth: mm) the $195 $37 2013 8.0% Financial Earnings 10.0% Appendix $67 ($ 1H 8.8% in33% 2013 Adj. mm) information Growth YoY toNet 1H this 2014 Growth: Income² presentation on2012 this 40%2013 slide YoY for1H for aG
Slide 20: Compelling Target Store Unit Economics
Compelling Target Store Net First Initial Pre-Tax ¹35%-40% 19 Includes Cash Year Size Sales New Cash-on-Cash Investment¹ Sales store within 25Store Unit Growth – 28k build-out ~$10 Economics 3-4 Economics sq. 20-30% years –$2.8 Returns ft. $12(net million million over of contributions 3 – 4 years fr
Slide 21: Long-Term Financial Targets
Long-Term Unit Comparable ~14% Total EBIT Net Note: 20%+ control material. described Exchange 20 Income Growth Sales Growth These ofFor under the Commission. Growth Financial Growth targets Store discussion Company 17the –Sales 20% ~15% are caption Targets forward-looking Nothing and of Growth some
Slide 22: Why Sprouts is a Compelling Investment
Investment Why Sprouts is a Compelling AuthenticatFresh, Offering Great Natural Value and Organic Food Fast Growing Industry with Strong Segment Macro of theTailwinds U.S. Supermarket Significantby Supported New Broad Store Demographic Growth Opportunity Appeal Proven and Replicable Compelling Unit
Slide 23: Appendix: Supplemental Materials
Appendix: Supplemental Materials
Slide 24: Non-GAAP Reconciliation
Non-GAAP The ended Thirteen June Income Store Costs Loss/(gain) Secondary Loss Interest Depreciation, Net Per Adjusted a(a) write-off close (b) adjusted of (c) Company comparability (d) associated because (e) rates operations 23liability its Adjusted Store Secondary Loss/(gain) Loss share income fol
Slide 25: It's Healthy. For less.
It’s Healthy For less Living
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