Flowers Foods, Inc. · NYSE:FLO
Flowers Foods — Q3 2024 Earnings Presentation
28 slides from Flowers Foods's earnings presentation, Nov 8, 2024
Slide 1: Third Quarter 2024 Review
"=Flowers FOODS THIRD QUARTER 2024 REVIEW November 8, 2024
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 execution in a challenging environment, growing both dollars and units of fresh packaged bread while category declined * Generated category leading market share gains as each of our primary bread brands grew in tracked channels ¢ Execution of portfolio strategy and savings init
Slide 4: Q3 2024 Financial Highlights
Q3 2024 FINANCIAL HIGHLIGHTS Net sales! declined modestly as lower volume, largely in fast food Adjusted EBITDA increased primarily due to lower ingredient costs and cake, was partly offset by improved price/mix and distributor distribution fees, partly offset by higher labor expenses and softer sal
Slide 5: Q3 2024 Financial Review
) (2) ) (4) (6) Q3 2024 FINANCIAL REVIEW NET SALES $1.191B -07% v py + Price/Mix +1.7%! + Volume -2.4%? NET INCOME S65.0M +$11.7M v PY ADJ. EBITDA? $133.3M +10.0% v PY + 11.2% of sales, up 110 bps * Higher gross margin, partly offset by higher adjusted SD&A expenses® and lower sales Calculated as (c
Slide 6: Fiscal 2024 Guidance
FISCAL 2024 GUIDANCE (Provided November 8, 2024) NET SALES ADJ. EBITDA' ADJ. DIL. EPS? Fiscal 2024 Consideration Consumer resiliency Promotional environment OTHER Ability to mitigate cost inflation Depreciation & amortization Effective tax rate Business rationalizations New business wins Timing and
Slide 7: Guidance Drivers
GUIDANCE DRIVERS P| — 124-128 1.20 FY'23 Adj. EBITDA D&A Net Int Exp Inc Tax Exp FY'24 + Pricing actions - Higher capital = Increased debt from | - Higher tax rate due employed from PP acquisition and to fewer discrete + Share gains acquisition and ERP | CA transition benefits + Innovation — Lower i
Slide 8: Long-Term Growth Target Scorecard
LONG-TERM GROWTH TARGET SCORECARD . Net 1-2% 6.4% 2.5% 5.2% 5.4% 4.5% Sales Adj -6% 23.4% 7.8% 5.9% 4.4% 4.9%4 EBITDA . . ° . . auc 7-9% 36.5% 13.7% 9.8% 5.7% 5.6%5 ()__ Off FY'19 base. No reconciliation of the forecasted range for adjusted diluted EPS to diluted EPS and adjusted EBITDA to net incom
Slide 9: Private Label Momentum Fading
PRIVATE LABEL MOMENTUM FADING CHANGE IN PRIVATE LABEL UNIT SHARE (Y/Y) 0.9 09 0.7 if -0.2 -0.4 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 3Q'24 Source: Flowers Custom Database - Circana Total US Muiot with Conv Due to a change in methodology and sources, data provided previously by Circana may not be comparable
Slide 10: Volume Trends
VOLUME TRENDS * Branded retail benefitting from stronger bread performance, more than offset by cake softness * Other pressured by weakness in away-from-home and business exits, partly offset by new business wins FLO Volume % Change (Y/Y) TOTAL COMPANY BRANDED RETAIL OTHER 3Q'23. 4Q'23 10'24 2Q'24 3
Slide 11: Branded Dollar Share
Branded Dollar Share Store Branded Dollar Share 78.00 27.00 26.2 77.3 77.00 76.8 25.0 76.3 24.6 25.00 76.00 23.6 23.1 75.3 22.7 23.00 75.0 75.00 74.00 73.7 21.00 73.00 19.00 72.00 17.00 71.00 70.00 15.00 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 L52 WE 10-06-24
Slide 12: Flowers' Market Share
FLOWERS’ MARKET SHARE =FLO Bread Dollar Share = = FLO Cake Dollar Share : 16.9 165 165 167 16.9 16.8 15.9 16.0 | : | ; | : : | : : : : Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Source: Flowers Custom Database - Circana Total US Muiot with Conv 12 Due to a change in methodology
Slide 13: Flowers Fresh Packaged Breads
FLOWERS FRESH PACKAGED BREADS mDollar Sales % Chg == Unit Sales % Chg 10.2% 76% 5.6% 4.3% 4% 3 2.9% [| 0.2% 15% 19% “18% -4.2% “4.4% Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Source: Flowers Custom Database - Circana Total US Muiot with Conv Due to a change in methodology and sources, data pro
Slide 14: Flowers Commercial Cake
FLOWERS COMMERCIAL CAKE mDollar Sales % Chg == Unit Sales % Chg 19% 19% |_| LJ 17% 18% | = | -3.4% “34% 2% -4.5% 45% 5.2% 55% 75% “75% 11% “15.1% 16.4% Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Qi 2024 Q2 2024 Q3 2024 Source: Flowers Custom Database - Circana Total US Mulot with Conv 14 Due to a chang
Slide 15: Organic Category Sales
ORGANIC CATEGORY SALES mms FLOWERS ORGANICS FLOWERS SHARE OF ORGANICS mmm ORGANIC FRESH PACKAGED BREADS xFLO 73.0 74.2 74.1 71.3 68.8 65.9 2 $925.2 $961.5 2 $848.4 = $703.2 $765.9 $557.2 $288.8 $318.7 $308.7 $313.9 $320.9 $336.2 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 L52 WE 10-06-24 15 Source: Flow
Slide 16: Gluten-Free Category Sales
GLUTEN-FREE CATEGORY SALES mmm GLUTEN FREE FPB XFLO = mm FLOWERS GF-_-~=Ss FLOWERS SHARE OF GF 36.6 35.5 35.7 318 27.8 21.2 46.9 $141.4 GH $1.9 $240.2 SE FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Source: Flowers Custom Database - Circana Total US Mulo+ with Conv Due to a change in methodology and sour
Slide 17: 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 18: Net income per diluted common share reconciliation
For the 12 Week For the 12 Week Period Ended Period Ended October 5, 2024 October 7, 2023 Net income (loss) per diluted common share $ 0.31 $ (0.22) Business process improvement costs NM 0.02 Plant closure costs and impairment of assets 0.02 NM Restructuring charges - NM Legal settlements and relate
Slide 19: Gross margin reconciliation, 12 weeks ended October 5, 2024
For the 12 Week For the 12 Week Period Ended Period Ended October 5, 2024 October 7, 2023 Net sales $ 1,190,561 $ 1,199,260 Materials, supplies, labor and other production costs (exclusive of depreciation and amortization) 598,209 617,468 Gross Margin excluding depreciation and amortization 592,352
Slide 20: Adjusted SD&A reconciliation
For the 12 Week For the 12 Week Period Ended Period Ended October 5, 2024 October 7, 2023 Selling, distribution and administrative expenses $ 460,359 $ 603,954 Business process improvement costs (490) (5,814) Legal settlements and related costs (827) (137,529) Adjusted selling, distribution and admi
Slide 21: Adjusted EBITDA reconciliation
For the 12 Week For the 12 Week Period Ended Period Ended October 5, 2024 October 7, 2023 Net income (loss) $ 64,984 $ (46,730) Income tax expense (benefit) 20,536 (16,567) Interest expense, net 4,778 4,010 Depreciation and amortization 37,331 35,974 EBITDA 127,629 (23,313) Other pension benefit (11
Slide 22: Adjusted income tax expense reconciliation
For the 12 Week For the 12 Week Period Ended Period Ended October 5, 2024 October 7, 2023 Income tax expense (benefit) $ 20,536 $ (16,567) Tax impact of: Business process improvement costs 123 1,453 Restructuring charges - 45 Legal settlements and related costs 207 34,382 Plant closure costs and imp
Slide 23: Adjusted net income reconciliation
For the 12 Week For the 12 Week Period Ended Period Ended October 5, 2024 October 7, 2023 Net income (loss) $ 64,984 $ (46,730) Business process improvement costs 367 4,361 Restructuring charges - 134 Legal settlements and related costs 620 103,147 Plant closure costs and impairment of assets 3,361
Slide 24: Trailing 52-week adjusted EBITDA reconciliation
For the 12 Week For the 16 Week For the 12 Week For the 12 Week Trailing 52 Week Period Ended Period Ended Period Ended Period Ended Period Ended December 30, 2023 April 20, 2024 July 13, 2024 October 5, 2024 October 5, 2024 Net income $ 35,676 $ 73,043 $ 66,967 $ 64,984 $ 240,670 Income tax expense
Slide 25: Net debt to adjusted EBITDA
As of October 5, 2024 Current maturities of long-term debt $ - Long-term debt 1,054,143 Total debt 1,054,143 Less: Cash and cash equivalents 14,975 Net Debt $ 1,039,168 Adjusted EBITDA for the Trailing Twelve Months Ended October 5, 2024 $ 532,483 Ratio of Net Debt to Trailing Twelve Month Adjusted
Slide 26: Fiscal 2024 guidance EPS reconciliation
Net income per diluted common share $ 1.15 to $ 1.19 Business process improvement costs 0.02 0.02 Plant closure costs and impairment of assets 0.03 0.03 Restructuring charges 0.03 0.03 Restructuring-related implementation costs 0.01 0.01 Legal settlements and related costs NM NM Adjusted net income
Slide 27: FY2019 diluted EPS reconciliation
For the 52-Week Period Ended December 28, 2019 Net income per diluted common share $ 0.78 Restructuring and related impairment charges 0.08 Legal settlements and related costs 0.10 Executive retirement agreement NM Project Centennial consulting costs NM Recovery on inferior ingredients NM Acquisitio
Slide 28: FY2019 adjusted EBITDA reconciliation
For the 52 Week Period Ended December 28, 2019 Net income $ 164,538 Income tax expense 47,545 Interest expense, net 11,097 Depreciation and amortization 144,228 EBITDA 367,408 Other pension cost 2,248 Project Centennial consulting costs 784 Acquisition-related costs 22 Restructuring and related impa