Flowers Foods, Inc. · NYSE:FLO
Flowers Foods — Q1 2023 Earnings Presentation
25 slides from Flowers Foods's earnings presentation, May 19, 2023
Slide 1: First Quarter 2023 Review
FIRST QUARTER 2023 REVIEW May 18, 2023
Slide 2: Regarding Forward-Looking Statements
REGARDING FORWARD-LOOKING STATEMENTS Statements contained in this filing 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-look
Slide 3: Key Messages
KEY MESSAGES • Strong sales increase due to pricing actions to offset inflationary pressures • Leading brands continue to perform well, driven by investments in innovation and marketing • Dave’s Killer Bread snack bar launch progressing well • Adjusted 2023 guidance to reflect the slow start to the
Slide 4: Q1 2023 Financial Highlights
Q1 2023 FINANCIAL HIGHLIGHTS Sales grew due to price increases to mitigate inflation, partly offset Adjusted EBITDA decreased primarily due to inflationary by lower volume and increased product returns pressures, partly offset by higher sales Net income decreased 17.4% to $70.7 million from $85.6 mi
Slide 5: Q1 2023 Financial Review
Q1 2023 FINANCIAL REVIEW NET SALES CASH FLOWS Cash from Ops Dividends $1.534B +6.9% v PY $58.0M $49.1M • Price/Mix +13.6%1 • Volume -7.3%2 Capex • Papa Pita acquisition +0.6% $34.0M • Price increases to mitigate inflation, partly offset by lower volume and increased product returns NET INCOME GAAP D
Slide 6: Fiscal 2023 Guidance
FISCAL 2023 GUIDANCE (Provided May 18, 2023) SALES ADJ. EBITDA1 ADJ. EPS1 Fiscal 2023 $5.086 to $494 to $1.15 to Considerations $5.141B $528M $1.25 • Demand reversion • Ability to mitigate inflation OTHER • Consumer resiliency Depreciation & amortization Effective tax rate • Timing of cost savings i
Slide 7: Long-Term Growth Target Scorecard
LONG-TERM GROWTH TARGET SCORECARD (1) Off FY’19 base (2) FY’20 was a 53-week year (3) Implied return using FY’23 guidance midpoint (4) No reconciliation of the forecasted range for Adjusted EPS to Diluted EPS and adjusted EBITDA to net income for the 52-week Fiscal 2023 is included in this press rel
Slide 8: Portfolio Strategy
PORTFOLIO STRATEGY 3 BALANCE GROWTH 11 ACCELERATE GROWTH High Grow at or slightly above the category rate Grow at or near double-digit rate Store Brand Foodservice • LOAF • PRIORITY • PRIORITY • PRIORITY • LOAF • LOAF • ALL Right To Win 4 MAXIMIZE PROFITABLITY 2 LEARN AND PROVE Improve profitability
Slide 9: Innovation in Action
INNOVATION IN ACTION Agile innovation team bringing new products to market—available on Creationsbyflowersfoods.com 9
Slide 10: Flowers' Market Share
FLOWERS’ MARKET SHARE FLO Bread Share FLO Cake Share 17.9 18.2 18.1 17.9 17.9 17.7 17.3 17.4 16.8 7.3 7.2 7.1 7.0 7.1 6.8 6.4 6.2 6.3 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Source: Flowers Custom Database – Circana Total US Mulo + C Store 10
Slide 11: Flowers Fresh Packaged Breads
FLOWERS FRESH PACKAGED BREADS Dollar Sales % Chg Unit Sales % Chg 11.1% 9.6% 9.6% 9.9% 4.9% 3.4% 3.6% -0.3% -2.3% -2.3% -2.9% -3.0% -3.6% -4.4% -4.9% -6.0% -5.5% -9.9% Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Source: Flowers Custom Database – Circana Total US Mulo + C
Slide 12: Flowers Commercial Cake
FLOWERS COMMERCIAL CAKE Dollar Sales % Chg Unit Sales % Chg 12.1% 9.3% 7.2% 4.3% 4.7% 4.2% 1.9% -0.4% -2.5% -2.2% -3.9% -4.6% -5.0% -7.0% -10.1% -14.0% -15.0% -16.3% Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Source: Flowers Custom Database – Circana Total US Mulo + C St
Slide 13: Organic Category Sales
ORGANIC CATEGORY SALES ORGANIC FRESH PACKAGED BREAD MINUS DKB FLOWERS ORGANICS FLOWERS SHARE OF ORGANIC 1200.0 80.0 1120.0 74.3 73.2 1040.0 70.7 67.6 70.0 960.0 64.0 880.0 59.4 800.0 60.0 720.0 640.0 731.2 748.9 594.6 657.3 50.0 560.0 480.0 470.2 384.7 400.0 40.0 320.0 240.0 30.0 160.0 262.7 264.4 2
Slide 14: Gluten-Free Category Sales
GLUTEN-FREE CATEGORY SALES GF minus FLOWERS FLOWERS GF FLOWERS SHARE OF GF 400.0 35.2 35.0 40.0 32.5 29.0 350.0 21.8 20.0 12.5 300.0 128.7 130.6 93.5 108.0 0.0 250.0 32.8 61.8 200.0 -20.0 150.0 -40.0 229.7 229.1 237.4 242.7 221.7 224.9 100.0 -60.0 50.0 0.0 -80.0 FY 2018 FY 2019 FY 2020 FY 2021 FY 20
Slide 15: Branded vs Store Brand Market Share
BRANDED VS STORE BRAND MARKET SHARE FRESH PACKAGED BREAD CATEGORY 79.6 80.7 80.4 80.0 76.2 76.9 23.8 23.1 20.4 19.3 19.5 19.9 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 L52 WE 4-23-23 Branded Store Branded Source: Flowers Custom Database – Circana Total US Mulo + C Store 15
Slide 16: 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 17: Earnings Per Share to Adjusted Earnings Per Share
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF EARNINGS PER SHARE TO ADJUSTED EARNINGS PER SHARE For the 16‐ For the 16‐ Week Period Week Period 22‐Apr‐23 23‐Apr‐22 Net income per diluted common $ 0.33 $ 0.40 Business process improvement costs 0.02 0.03 Restructuring charges 0.01 —
Slide 18: Gross Margin Excluding Depreciation and Amortization
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF GROSS MARGIN EXCLUDING DEPRECIATION AND AMORTIZATION TO GROSS MARGIN (000S OMITTED) For the 16 Week For the 16 Week Period Ended Period Ended April 22, 2023 April 23, 2022 Sales $ 1,534,493 $ 1,435,932 Materials, supplies, labor and oth
Slide 19: SD&A Expenses to Adjusted SD&A
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF SELLING, DISTRIBUTION AND ADMINISTRATIVE EXPENSES TO ADJUSTED SD&A (000S OMITTED) For the 16 Week For the 16 Week Period Ended Period Ended April 22, 2023 April 23, 2022 Selling, distribution and administrative expenses $ 591,943 $ 554,
Slide 20: Net Income to EBITDA and Adjusted EBITDA
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA (000S OMITTED) For the 16 Week For the 16 Week Period Ended Period Ended April 22, 2023 April 23, 2022 Net income $ 70,710 $ 85,589 Income tax expense 19,255 24,523 Interest expense, net 3,886 2,
Slide 21: Income Tax Expense to Adjusted Income Tax Expense
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF INCOME TAX EXPENSE TO ADJUSTED INCOME TAX EXPENSE (000S OMITTED) For the 16 Week For the 16 Week Period Ended Period Ended April 22, 2023 April 23, 2022 Income before income taxes $ 89,965 $ 110,112 Business process improvement costs 6,
Slide 22: Net Income to Adjusted Net Income
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME (000S OMITTED) For the 16 Week For the 16 Week Period Ended Period Ended April 22, 2023 April 23, 2022 Net Income $ 70,710 $ 85,589 Business process improvement costs 4,664 6,798 Impairment of assets ‐
Slide 23: Net Income to EBITDA and Adjusted EBITDA (Trailing 52 Weeks)
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA (000S OMITTED) For the 12 For the 12 For the 16 Trailing 52 Week Period Week Period For the 12 Week Week Period Week Period Ended Ended Period Ended Ended Ended July 16, 2022 October 8, 2022 Dece
Slide 24: Debt to Net Debt and Net Debt to Adjusted EBITDA Ratio
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF DEBT TO NET DEBT AND CALCULATION OF NET DEBT TO TRAILING TWELVE MONTH ADJUSTED EBITDA RATIO (000S OMITTED) As of April 22, 2023 Current maturities of long‐term debt $ ‐ Long‐term debt 1,063,242 Total debt 1,063,242 Less: Cash and cash e
Slide 25: EPS Full Year Fiscal 2023 Guidance Range Estimate
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF EARNINGS PER SHARE - FULL YEAR FISCAL 2023 GUIDANCE RANGE ESTIMATE Range Estimate Net income per diluted common share $ 1.11 to $ 1.21 Business process improvement costs 0.02 0.02 Restructuring charges 0.01 0.01 Acquisition-related cost