Flowers Foods, Inc. · NYSE:FLO
Flowers Foods — Q4 2023 Earnings Presentation
27 slides from Flowers Foods's earnings presentation, Feb 9, 2024
Slide 1: Fourth 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 brand results, gaining unit and dollar share for the first time since 1Q’22 * Dave's Killer Bread continues to outperform category, eclipsing $1 billion in 2023 estimated retail sales * Volume trends improved sequentially, reflecting waning private label strength * 2024 financi
Slide 4: Q4 2023 Financial Highlights
Q4 2023 FINANCIAL HIGHLIGHTS Sales grew due to price increases to mitigate inflation and the Adjusted EBITDA increased slightly primarily due to improved acquisition contribution, partly offset by lower volume gross margin from moderating input cost inflation and greater sales, partly offset by high
Slide 5: Q4 2023 Financial Review
Q4 2023 FINANCIAL REVIEW NET SALES CASH FLOWS — FY’23 © Cash from Ops Dividends $1.129B +4:3% vy $349.4M $195.2M + Price/Mix +5.6%! * Volume -2.4%? Capex * Papa Pita acquisition +1.1% $129.1M + Price increases to mitigate inflation and acquisition contribution, partly offset by lower volume NET INCO
Slide 6: Fiscal 2024 Guidance
FISCAL 2024 GUIDANCE (Provided February 8, 2024) SALES ADJ. EBITDA' ADJ. DIL. EPS! $5.091.. $524. $1.20. $5.172B $553M_ $1.30 + Consumer resiiency * Promotional environment OTHER + Ability to mitigate cost inflation Depreciation & amortization Effective tax rate + Business rationalizations $160 = S1
Slide 7: Guidance Drivers
GUIDANCE DRIVERS P| — 120-130 1.20 FY'23 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 interest
Slide 8: Long-Term Growth Target Scorecard
LONG-TERM GROWTH TARGET SCORECARD . Sales 1-2% 6.4% 2.5% 5.2% 5.4% 4.5% Adj -6% 23.4% 7.8% 5.9% 4.4% 5.0%4 EBITDA Asie. 7-9% 36.5% 13.7% 9.8% 5.7% 5.4%4 ()__ Off FY'19 base. No reconciliation of the forecasted range for adjusted diluted EPS to diluted EPS and adjusted EBITDA to net income is include
Slide 9: FLO Total and FLO Grocery trends
FLO Total FLO Grocery 0.20 0.20 0.20 0.10 0.10 0.00 0.00 -0.10 1Q'23 2Q'23 3Q'23 4Q'23
Slide 10: Quarterly volume trends
1Q'23 2Q'23 3Q'23 4Q'23 1Q'23 2Q'23 3Q'23 4Q'23 1Q'23 2Q'23 3Q'23 4Q'23 -0.3% -1.1% -1.5% -2.4% -4.1% -4.4% -6.1% -6.3% -7.4% -7.3% -8.2% -10.5%
Slide 11: Total bread category and private label
Total bread category PL Grocery PL 0.70 0.50 0.40 0.10 (0.20) (0.30) (0.40) (0.60) 1Q'23 2Q'23 3Q'23 4Q'23
Slide 12: Category and private label quarterly trends
-2.1% -2.2% -2.6% -4.2% 1Q'23 2Q'23 3Q'23 4Q'23
Slide 13: Branded and Store Branded Dollar Share
Branded Dollar Share Store Branded Dollar Share 82 25 24.2 23.8 80.8 80.5 24 23.1 79.7 80 79.3 23 22 78 76.9 20.6 21 20.3 76.2 76 75.8 20 19.5 19.2 19 74 18 17 72 16 70 15 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023
Slide 14: Flowers' Market Share
FLOWERS’ MARKET SHARE =FLO Bread Dollar Share = = FLO Cake Dollar Share 18.1 79 17.7 : 17.7 173 168 17.3 17.0 7.0 71 68 | : : : : : : : Q4 2021 Qi 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 17.6 Source: Flowers Custom Database - Circana Total US Mulo + C Store 14
Slide 15: Flowers Fresh Packaged Breads
FLOWERS FRESH PACKAGED BREADS mDollar Sales % Chg == Unit Sales % Chg 11.0% 9.6% 9.6% 9.9% 49% 3.6% i 23% — LJ U ~ 0 -2.3% -2.9% “3.0% -3.6% -4.4% -4.9% @4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Source: Flowers Custom Database - Circana Total US Mulo + C Store Q3 2023 Q4 2023 15
Slide 16: Flowers Commercial Cake
FLOWERS COMMERCIAL CAKE mDollar Sales % Chg == Unit Sales % Chg 12.1% 9.3% 7.2% 47% 42% i LI] = 1.0% 13% 4.79% -2.5% ° 3.9% -3.7% -4.9% 10.1% “14.0% 14.9% 16.3% Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 = Source: Flowers Custom Database - Circana Total US Mulo + C Store
Slide 17: Organic Category Sales
ORGANIC CATEGORY SALES mmm ORGANIC FRESH PACKAGED BREADS xFLO mms FLOWERS ORGANICS ——FLOWERS SHARE OF ORGANICS 73.2 74.7 70.7 67.6 64.0 2 c s $594.6 = $470.2 $266.4 $288.4 FY 2019 FY 2020 FY 2021 Source: Flowers Custom Database - Circana Total US Mulo + C Store FY 2022 FY 2023 17
Slide 18: Gluten-Free Category Sales
GLUTEN-FREE CATEGORY SALES mmm GLUTEN FREE FPB XFLO = mm FLOWERS GF 32.5 ——FLOWERS SHARE OF GF 35.2 33.7 29.0 21.8 $229.1 FY 2019 FY 2020 FY 2021 Source: Flowers Custom Database ~ Ci Total US Mulo + C Store FY 2022 FY 2023 18
Slide 19: 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 20: Adjusted diluted EPS reconciliation
For the 12 Week For the 12 Week Period Ended Period Ended December 30, 2023 December 31, 2022 Net income per diluted common share $ 0.17 $ 0.23 Business process improvement costs 0.01 0.02 Impairment of assets 0.02 — FASTER Act, net of recovery on inferior ingredients — NM Restructuring charges NM —
Slide 21: Gross margin reconciliation, 12 weeks ended December 30, 2023
For the 12 Week For the 12 Week Period Ended Period Ended December 30, 2023 December 31, 2022 Sales $ 1,129,027 $ 1,082,670 Materials, supplies, labor and other production costs (exclusive of depreciation and amortization) 587,719 575,698 Gross Margin excluding depreciation and amortization 541,308
Slide 22: Adjusted SD&A reconciliation, 12 weeks
For the 12 Week For the 12 Week Period Ended Period Ended December 30, 2023 December 31, 2022 Selling, distribution and administrative expenses $ 447,905 $ 409,929 Gain on sale and lease termination gain - $ 6,107 Business process improvement costs (2,900) (4,303) Acquisition-related costs - (936) A
Slide 23: EBITDA reconciliation, 12 weeks
For the 12 Week For the 12 Week Period Ended Period Ended December 30, 2023 December 31, 2022 Net income $ 35,676 $ 48,597 Income tax expense 10,398 15,346 Interest expense, net 3,885 330 Depreciation and amortization 37,016 32,713 EBITDA 86,975 96,986 Other pension benefit (62) (179) FASTER Act, ne
Slide 24: Adjusted income tax expense
For the 12 Week For the 12 Week Period Ended Period Ended December 30, 2023 December 31, 2022 Income tax expense $ 10,398 $ 15,346 Tax impact of: Gain on sale and lease termination gain - (1,527) Business process improvement costs 725 1,075 FASTER Act, net of recovery on inferior ingredients - 59 Ac
Slide 25: Adjusted net income reconciliation
For the 12 Week For the 12 Week Period Ended Period Ended December 30, 2023 December 31, 2022 Net income $ 35,676 $ 48,597 Business process improvement costs 2,175 3,228 FASTER Act, net of recovery on inferior ingredients - 177 Gain on sale and lease termination gain - (4,580) Acquisition-related co
Slide 26: EBITDA reconciliation, 52 weeks
For the 52 Week Period Ended December 30, 2023 Net income $ 123,416 Income tax expense 33,691 Interest expense, net 16,032 Depreciation and amortization 151,709 EBITDA 324,848 Other pension benefit (269) Restructuring charges 7,099 Impairment of assets 7,298 Legal settlements and related costs 137,5
Slide 27: Net debt to adjusted EBITDA
As of December 30, 2023 Current maturities of long-term debt $ - Long-term debt 1,048,144 Total debt 1,048,144 Less: Cash and cash equivalents 22,527 Net Debt $ 1,025,617 Adjusted EBITDA for the Trailing Twelve Months Ended December 30, 2023 $ 501,738 Ratio of Net Debt to Trailing Twelve Month Adjus