SpartanNash — Investor Presentation (January 2020)
28 slides from SpartanNash's investor presentation, January 2020
Slide 1: January 2020
) “% SpartanNash. Taking food places* January 2020
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation includes “forward-looking statements” about the plans, strategies, objectives, goals or expectations of SpartanNash Company. These forward-looking statements are identifiable by words or phrases indicating that the Company is “positioned” or “poised” for
Slide 3: Who We Are
Who We Are
Slide 4: Company Highlights
Company Highlights • Leading consumer-centric distributor and food retailer Sales Mix • TTP Sales of $8.4 Billion through 10/5/2019 3Q2019 – Q3 Food Distribution sales were up 3.6% excl Martin’s elimination over prior year – Q3 Military Distribution sales were down 0.1% over prior year – Retail sale
Slide 5: Investment Highlights
Investment Highlights Experienced Financial Leadership Stability Senior team averages Net Long-term debt to nearly 30 years in Adjusted BITDA the industry ratio of 3.6x(1) • Strong balance sheet • Return of capital to shareholders through annual dividend of $0.76 per common share: Expansive • Yield
Slide 6: SpartanNash Network
SpartanNash Network % SpartanNash
Slide 7: Key Business Trends
Key Business Trends
Slide 8: Key Business Trends
Key Business Trends • Price competition pressures • Consolidation continues in Retail and Distribution ECONOMIC • Opportunity with non-traditional CONSUMER distribution space • Fresh Prepared good growth • CPGs performance-based funding • Moderate growth • Priorities - food safety, • Low food inflat
Slide 9: Strategic Initiatives
Strategic Initiatives
Slide 10: Strategic Objective
Strategic Objective To be a growth company focused on developing and leveraging a national, highly efficient, distribution platform to service a diversified customer base • Driven by an efficient and versatile supply chain, servicing four business units that complement each other and augment Spartan
Slide 11: Our Business Segments
Our Business Segments
Slide 12: Food Distribution
Food Distribution • Full service value-added distributor of choice to 2,100 independent grocery stores - Offering comprehensive private brand program - Providing market-leading products and best-in-class services • Distribution Facilities covering 50 states supporting independent grocers, national c
Slide 13: Food Distribution
Food Distribution Key Food Distribution Initiatives: • Expand customer base and increase purchase concentration • Elevate private brands to a best-in-class offer • Transform Fresh and Fresh-Prepared offer into a strategic differentiator and increase share • Ensure Value Added Service (VAS) offer is
Slide 14: Military Food Distribution
Military Food Distribution • Premier full line, food and related product supplier Sales to Commissaries for military commissaries (supermarkets) and ($ Billions) exchanges for the U.S. government • Distribute to over 160 Commissaries located within SpartanNash (Grocery, Meat the Continental US and E
Slide 15: Military Food Distribution
Military Food Distribution Key Military Initiatives: • Continue efforts to grow the business through additional product offerings to DeCA • Partner with DeCA to leverage private brands as a sales driver within the commissary offer • Capitalize on opportunities to expand MDV offerings into adjacent o
Slide 16: Retail Locations
Retail Locations • Currently operating 156 supermarkets offering value and a quality shopping experience - Average size of 42,400 sq ft and sales of $11.5 million per year - 37 fuel centers and 100 (1) locations with pharmacies 105 stores 12 stores 10 stores 26 stores (1) Includes 90 pharmacies oper
Slide 17: Retail
Retail Key Retail Initiatives: • Leveraging data analytics through Yes Rewards® loyalty program • Deploying capital, merchandising, and marketing efforts - Brand Positioning – Family Fare - Store Remodels - including 14 stores in greater Grand Rapids in May 2019 - Loyalty and Merchandising Programs
Slide 18: Retail
Retail Family Fare Brand Positioning: Whether in the store or online the customer’s experience with our brand will include…… • Value Beyond Price • Affordable Wellness • Focus on Local • Indulgence and Discovery • Socially Conscious and Responsible 18
Slide 19: Financial Highlights
Financial Highlights
Slide 20: Sales
Sales (In Millions) $9,000 $8,000 $8,435 $7,964 $8,065 $7,000 $6,000 $6,538 $6,168 $5,000 $4,000 $3,000 $2,000 $1,000 (1) (1) (1) FY 2017 FY 2018 TTP 2019 YTD 2018 YTD 2019 (1) TTP reflects 52 week period ending 10/5/2019 and YTD reflects 40 week periods ending 10/6/2018 and 10/5/2019 respectively.
Slide 21: Operating Earnings/Adjusted Operating Earnings
Operating(1)Earnings/Adjusted Operating Earnings (In Millions) Adjusted Operating Earnings (1) $150 $143 Adjustments to Operating Earnings (1) Operating Earnings $120 $116 $89 $93 $90 $45 $11 $67 $60 $55 $22 $250 $82 $30 $71 $34 $45 $0 FY 2018 TTP 2019 (2) YTD 2018 (2) YTD 2019 (2) -$107 -$30 -$60 -
Slide 22: Adjusted EBITDA
(1) Adjusted EBITDA (In Millions) $250 $236 $200 $209 $185 $150 $165 $141 $100 $50 $0 FY 2017 FY 2018 TTP 2019 (2) YTD 2018 (2) YTD 2019 (2) . (1) Adjusted EBITDA is a non-GAAP financial measure, please see Adjusted EBITDA Note on page 27. (2) TTP reflects 52 week period ending 10/5/2019 and YTD ref
Slide 23: Net Long-Term Debt to Adj. EBITDA
(1) Net Long-Term Debt to Adj. EBITDA (In Millions) 5.0 4.5 4.0 3.5 3.8x 3.6x 3.6x 3.0 3.1x 3.1x 3.1x 3.2x 3.1x 2.5 2.8x 2.7x 2.7x 2.0 1.5 1.0 0.5 0.0 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 2Q2018 3Q2018 4Q2018 1Q2019 2Q2019 3Q2019 (1) Net Long-Term Debt and Adjusted EBITDA are a non-GAAP financial meas
Slide 24: Dividend
(1) Dividend (In Millions) $1.00 $0.90 16.0% CAGR $0.80 $0.70 $0.76 $0.72 $0.60 $0.66 $0.60 $0.50 $0.54 $0.48 $0.40 $0.30 $0.35 $0.31 $0.20 $0.25 $0.20 $0.10 $0.00 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (1) 2019 represents annualized dividend, based on most recent quarterly dividend rate.
Slide 25: Balance Sheet & Operating Metrics
Balance Sheet & Operating Metrics As of October 5, 2019: • TTP Sales of $8.43 billion and Adjusted EBITDA(1) of $184.8 million • Net Long-Term Debt to Adjusted EBITDA of 3.6-to-1.0 • Return of capital to shareholders through annual dividend of $0.76 per common share with a yield of 5.6%, dividend ha
Slide 26: Adjusted Operating Earnings Note (000's)
Adjusted Operating Earnings Note (000’s) FY 2017 FY 2018 TTP 2019 FY 2018 FY 2019 52 Weeks 52 Weeks 52 Weeks 40 Weeks 40 Weeks ending ending ending ending ending 12/30/2017 12/29/2018 10/5/2019 10/6/2018 10/5/2019 Operating (Loss) Earnings ($106,675) $70,512 $33,498 $82,372 $45,358 Add (Subtract): R
Slide 27: Adjusted EBITDA Note (000's)
Adjusted EBITDA Note (000’s) FY 2017 FY 2018 TTP 2019 FY 2018 FY 2019 52 Weeks 52 Weeks 52 Weeks 40 Weeks 40 Weeks Ending Ending Ending Ending Ending 12/30/2017 12/29/2018 10/5/2019 10/6/2018 10/5/2019 Consolidated net (loss) earnings ($52,845) $33,572 ($13,690) $47,580 $318 Add (Subtract): Loss fro
Slide 28: Net Long-Term Debt Note (000's)
Net Long-Term Debt Note (000’s) Reconciliation of Long-Term Debt and Finance Lease Obligations to Total Net Long-Term Debt and Finance Lease Obligations (A Non-GAAP Financial Measure) (In thousands) (Unaudited) 12/30/2017 12/29/2018 10/5/2019 Current maturities of long-term debt and finance lease ob