Sprouts Farmers Market, Inc. · NASDAQ:SFM
Sprouts Farmers Market — Investor Presentation (May 2015)
27 slides from Sprouts Farmers Market's investor presentation, May 11, 2015
Slide 1: Investor Deck May 2015
Exhibit 99.1 INVESTOR DECK MAY 2015
Slide 2: Forward-Looking Statements
Forward-Looking Certain statements similar expected presentation. to ability and information In accordance additional well combination collectively, in adjusted interest with These reported Company’s consider 2 measures. successfully connection addition Exchange as the non-GAAP to expressions) aexpe
Slide 3: Overview of Sprouts
by P _ OVERVIEW OF SPROUTS —
Slide 4: Healthy Living Leader with Broad Appeal
Sprouts Healthy Broad One Industry Significant 4 ofconsumer the is grocery leading Well largest white Positioned store results appeal space and that fastest opportunity offers to Meet growing fresh, the andnatural Needs natural strongof and and new Today’s organic organic storeHealth economics retai
Slide 5: Significant Market Opportunity: $620B Industry
Significant $620B SFM Natural Our Other, SPINS Pro ($ Sprouts 2014 2013 2012 2011 2010 2009 2008 $1,059 $1,239 $1,490 $1,723 $1,991 $2,438 ¹$2,967 2 5 Source: Pro inForma Potential mm) Current forma incl. U.S. projects & isProgressive benefiting Organic: Net Growth Market1 Conventional Supermarket n
Slide 6: Sprouts Health Focus: Changing the Way People Shop
Sprouts HEALTH Continue Full-line SELECTION Full 2400+ Produce VALUE Highly Promote Convenient, SERVICE Trusted, 6 selection organic promotional—communicate isknowledgeable has prices value healthy toChanging evolved benefit friendly of2700+ across significantly unique grocery from from the and the
Slide 7: Sprouts—A Differentiated Small-Box Value Leader
Sprouts—A Value-leader Produce Differentiated High Fresh, Don’t Farmers Convenient, Comfortable, 7 standard sell natural surrounded market most Healthy small-box: in easy &assortment private fresh national inspired, organic toby Grocery produce shop label aaverage branded offering complete open of e
Slide 8: Reaching the Broad Middle
Reaching Broad Middle Medium Boomers, Diverse Value Brand Strong More 30+ Digital Increasing Over ¹Sprouts’ 8 Represents annual 1.1 than conscious Awareness Customer marketing & income ethnic You to million asocial Gen-X, 14 word-of-mouth above Broad promotions1 actual Tube million backgrounds and p
Slide 9: Sprouts' Segment Adoption
Sprouts’ Segment Adoption DIET Follow Do ENTHUSIAST HEALTH Does Shop CONVENIENCE-FOCUSED Are ¹VALUE-FOCUSED 9 Company not always not at FOLLOWERS follow aSprouts Consumers Description specific live CURIOUS consumer looking the a strict primarily healthiest diet for are (1) or insight because the at
Slide 10: Sprouts Consumers Grow Over Time
Sprouts Consumers TRAFFIC Then TRIAL Over TRANSITION 10 TRUSTTime Shop Grows Make an Start Increasing itswith Sprouts Consumers’ High Number Their Quality Average Primary ofProduce Departments Basket Grocery Size Store and the Stores’ Gross Margin
Slide 11: Sprouts' Grocery Share of Wallet Opportunity
Sprouts’ Grocery More Our Significant Sprouts Other Traditional Specialty ¹Mass 59% 11 Company average than Club Origin Store Main 50% opportunity Grocery consumer consumer’s Competitor of ofConsumer Sprouts’ insight tomonthly increase isconsumers (1) the study Traditional spending trialare andcomin
Slide 12: Proven Model with Store Growth Potential
Nevada 1200 Proven Sprouts’ Demographics Model Successful Balanced 14% 5 New unit Utah potential works Concept: California 82 25 Colorado 29 Arizona 6 2 Kansas 7 footprint growth unit Mexico Oklahoma in “natural/lifestyle” well growth store allow 205 for and incount the for densely stores with near-
Slide 13: Sprouts Succeeds Among Competitive Markets
1 Sprouts Case ($ Average Wal-Mart Target Whole Trader +1% +15% +30% +11% +3% +7% +4% +10% Costco Frys 2004 Over 13 in Marketplace ‘000s) Study this 2005 added Joe’s Foods opened Not Succeeds Weekly time opened 2006 of indicative opened P-Fresh opened aperiod Sprouts 2007 Sales Among re-opened 2002
Slide 14: Sprouts Responsible Food Retailing
Sprouts Responsible Food Cardboard Piloting LED LEED Launched Transcritical Energy Donated Established Created Foundation Building 2014 Promoted RESPONSIBLE Received & Developing 14 tracking lighting Rescue equivalent retro is more composting approximately almost health Leaping more EMC Growing and
Slide 15: Business & Financial Performance
BUSINESS & FINANCIAL PERFOMANCE
Slide 16: Powerful Growth Compelling Leverage
Powerful 9%+ Compelling Leverage One 32 14% Cumulative Deleveraged 16 consecutive of new Natural theGrowth Infrastructure store Best pro-forma Store-Level capital and unit quarters White Organic Business growth, structure Space EBITDA for of Economics Sector positive “Scale strong Results Opportunit
Slide 17: Balanced Growth Across Store Sales
Balanced ($ 2008 $1,059 $1,239 $1,490 $1,723 $1,991 $2,438 $2,967 Pro 2009 9.9% 20.6% 10.7% 20.4% 9.7% 14.8% 5.1% 7.4% 2.3% 4.9% 2.6% 11.6% Prior ¹History 2 including “two-year 17Pro “Comparable inForma mm) forma Period 2009 2010 ofSales all stacked Growth Net Comparable 2010 2011 net Current stores
Slide 18: Consistent Net Sales Growth
Consistent Net ($ Pro $858 $723 $2,967 $2,438 $1,991 Note: 18 inForma Sales mm) Pro forma Strong 2012 financial 2013 Sales 2014 Growth information Q1 2014 Continues Q1 on2015 this slide gives effect to the Henry’s Transaction and the Sunflower Transaction for all periods presented.
Slide 19: Two-Year Stacked Comps Highlights
Two-Year Highlights Tightness Weather Produce 19% 10 Continued Comparable 20.8 12.8 20.3 9.5 19.2 9.0 22.3 8.5 17.6 4.8 Q1 2-Year 1. 19 “Comparable new Comps 2014 %% Q1Stacked stores deflation 2015 &Q2 in Stacked growth impacted labor produce Store 2014 in Sales store opened challenges Q3 Sales in C
Slide 20: Strong Earnings Performance: Adjusted EBITDA and Net Income
ASee $84 $78 $265 $195 $147 Adjusted Adj. ($ 2012 $39 $35 $111 $67 $40 ²¹Note: 20History in Net EBITDA¹ mm) the 2013 Financial Appendix Income² EBITDA of 2014 Strong information Q1Margin toEarnings 2014 this Q1 presentation 7.4% on2015 Performance this 8.0% slide 8.9% forfor a reconciliation 10.7% f
Slide 21: Compelling New Store Economics
Compelling Target Store Net Average $2.8 ~$10 ¹Pre-Tax 21 Includes Cash million to Size New $12 Cash-on-Cash 28k Investment¹ store Store Unit million square build-out Economics Economics feet 20-30% First Returns (net Year over ofofSales contributions 335%-40% to 4Initial yearswithin Sales fromGrowt
Slide 22: Aggressive Long-Term Financial Targets
Aggressive Unit Comparable ~14% 17 Note: 20%+ control material. described Exchange 22 – 20% Growth These 6%+ ofFor under the Commission. Long-Term ~15% targets Store discussion Company theSales are caption forward-looking Financial Nothing and of Growth some “Risk its management, Total of in Targets
Slide 23: Why Sprouts
WhyCAGR Authentic Fast Significant Proven Appeal Resilient Passionate Significantly 9% 1,200 Target 9.9% 23 Growing Sprouts 1-year potential 35% and Business Fresh, Team to New Replicable –&lower is 40% $135B Segment 20.6% stores aStore with Natural Compelling Model cash-on-cash prices in (6x a2-yea
Slide 24: Appendix: Supplemental Materials
APPENDIX: SUPPLEMENTAL MATERIALS
Slide 25: Adjusted Net Income Reconciliation, Thirteen Weeks Ended December 2014
Appendix ended Thirteen December 2014 Income Store Costs IPO Secondary Loss Interest Depreciation, Net Per Adjusted (a) with The these (b) Henry’s (c) and (d) operations. adjusted (e) comparability (f) Company directly (g) rates operations 25 Loss Store Loss Secondary Adjusted Costs IPO share income
Slide 26: Adjusted Net Income Reconciliation, Thirteen Weeks Ended March 2015
Appendix 2015 Thirteen March Income Store Loss Secondary Interest Depreciation, Net Per Adjusted (a) with period-to-period (b) and (c) operations. Company comparability (d) rates The reflective 26 Store Secondary Adjusted Loss share income adjusted following Company landlords. for on and closure 29,
Slide 27: Thank you!
Thank you!
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