Flowers Foods, Inc. · NYSE:FLO
Flowers Foods — BofA Securities Consumer & Retail Conference 2024
50 slides from Flowers Foods's conference presentation, March 2024
Slide 1: BofA Securities Consumer & Retail Conference
bp \ 4 2, a a *Flowers FOODS B OF A SECURITIES | CONSUMER & RETAIL CONFERENCE March 12-13, 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
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Slide 4: Investment Highlights
INVESTMENT HIGHLIGHTS Operate the #1 loaf, organic, and gluten-free bread brands; gaining share in stable categories throughout the economic cycle Brand-focused portfolio strategy drives above-market growth via innovation, improved brand presence and relevance, and M&A Attractive cash flow generatio
Slide 5: 100+ Year History of Growth and Evolution
100+ YEAR HISTORY OF GROWTH AND EVOLUTION ac » fies 2 2 D fy HIKE Na WonDen & canon} V #1 loaf, organic, and gluten-free bread brands in the U.S. v46 operating bakeries v 2nd-largest baked foods company in U.S. Y Proven business model V Efficient bakeries & distribution v Experienced team One family
Slide 6: Business Overview
BUSINESS OVERVIEW Diverse product line across the Majority of business composed Diversified channel mix with broad baked foods spectrum of faster-growing, higher-margin distribution reach and e-Commerce branded retail products upside 2023 SALES MARKET SHARE! SALES MIX BY CHANNEL? = Flowers Branded =
Slide 7: Large and Stable U.S. Fresh Bakery Market
LARGE AND STABLE U.S. FRESH BAKERY MARKET ESTIMATED $50B' U.S. MARKET FOR US FRESH BAKERY RETAIL SALES FRESH AND FROZEN BAKERY ATRETAIL (in bilions) Large and stable U.S. Fresh Bakery category $29 with sales of $29B+2 $2 Present in 97.4% of households; buy the $25 $25 category every 16 days? $22 Con
Slide 8: Strategic Priorities
STRATEGIC PRIORITIES Aligned to long-term targets and disciplined capital policies LONG-TERM GROWTH TARGETS'2 Develop Team Focus on Brands Invest in team to drive portfolio Pursue targeted innovation and optimization through brand growth, marketing to enhance relevancy innovation and enhanced capabi
Slide 9: Developing Our Team with Enhanced Organizational Structure
DEVELOPING OUR TEAM WITH ENHANCED ORGANIZATIONAL STRUCTURE PRIORITIZING BRAND BUILDING AND ENABLING STRATEGIC INITIATIVES Chief Growth Officer to lead growth initiatives, product development, innovation Chief Innovation Officer heads stand-alone innovation function Chief Supply Chain Officer focused
Slide 10: Foodservice
Foodservice • • • • • • • Foodservice • • • • • • • • • •
Slide 11: Branded Retail and Non-branded Sales CAGR
CAGR CAGR 7.1% $ 3.3 B 0.4% $ 2.5 B CAGR 2.7% $ 1.8 B $ 1.6 B Branded Retail Sales Non-branded and Non-retail Sales Flowers' Share
Slide 12: Expanding Brand Presence Geographically
EXPANDING BRAND PRESENCE GEOGRAPHICALLY Under-developed markets offer significant growth potential 9 CAPITALIZING ON BRAND 7.3% GROWTH POTENTIAL BY 13.9% INCREASING PRESENCE 3.9% + Expand breadth and depth of distribution Drive awareness, trial, and repeat : with increased advertising and 9 18.3% sh
Slide 13: (1) Circana Scan Data - Flowers Custom Database December 31, 2023
(1) Circana Scan Data - Flowers Custom Database December 31, 2023 (2) 2019-2023
Slide 14: Portfolio Strategy Drives Margins
PORTFOLIO STRATEGY DRIVES MARGINS POST-PANDEMIC Significant margin increase as Combining right portfolio mix Recent results reflect impact of RESULTS SHOW branded retail business grew to with improved bakery network inflationary pressures on POTENTIAL BENEFIT a larger percentage of sales enhances ma
Slide 15: Margin and efficiency initiatives
• Backhaul utilization • Bakery of the future • Optimize strategic • Staffing optimization sourcing strategies • Cube optimization • Autonomous planning • Testing and • Leverage scale with implementing • Depot consolidation • SKU rationalization centralized buying maintenance and • Optimize number •
Slide 16: Positioned for Growth Through Smart M&A
POSITIONED FOR GROWTH THROUGH SMART M&A Proven track record fi 4 DAVE'S KILLER BREAD! &, CANYON BAKEHOUSE? of acquiring and growing TRACKED RETAIL SALES ($M) TRACKED RETAIL SALES ($M) differentiated bakery brands #1 organic Loaf $798 #1 Gluten-free Loaf s08 eens i eee 5YR CAGR platform brands in + %
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Slide 18: 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 19: 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 20: 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 restiency * Promotional environment OTHER + Ability to mitigate cost inflation Depreciation & amortization Effective tax rate + Business rationalizations $160 = S16
Slide 21: 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 22: Adj Diluted EPS Guidance Drivers
ADJ DILUTED EPS GUIDANCE DRIVERS $1.20 FY'23 KEY CONSIDERATIONS EBITDA D&A Pricing actions - Higher capital employed from Share gains acquisition and ERP innovation Moderating ingredient inflation Savings initiatives Category declines Business exits Promotional activity Strategic investments. Net In
Slide 23: Consistent Sales and Margin Profile
CONSISTENT SALES AND MARGIN PROFILE Stable performance in a variety of economic environments Billions x mmm Sales. ——=EBITDA margin” Recession | vit HUUIIIIII oo a eh ®t oP kh a gt of ge oP ro < Pa * 53-week year ** Adjusted for items affecting comparability oe a A 12% 10% 8% 6% 4% 2% 0% 23
Slide 24: Steady Free Cash Flow
STEADY FREE CASH FLOW Free cash flow! to fuel accretive investments Strong free cash flow CASH FLOW DRIVERS FREE CASH FLOW TYPICALLY IN EXCESS OF NET growth supports + Growing sales INCOME (MILLIONS) 2 investments in the business, M&A + Focus on cash *, margins Free Cash Flow* Net i GAAP. strategy a
Slide 25: FY'19 FY'20 FY'21
• $275 • • • $35 $46 • $1 $10 $7 $176 $187 $195 $160 $167 FY'19 FY'20 FY'21 FY'22 FY'23
Slide 26: Track Record of De-leveraging Post M&A
TRACK RECORD OF DE-LEVERAGING POST M&A REVENUE! (MILLIONS) ADJ. EBITDA’ (MILLIONS) Ce $491 $502 2015 2016 2017 2018 2019 2020 2021 2022 2023 2015 2016 2017 2018 2019 2020 2021 2022 2023 NET DEBT? (MILLIONS) NET DEBT? / ADJ. EBITDA’ $1,026] ; DA ce 24 2.0 20 of $705 fm $727 14 14 13 . . 2015 2016 201
Slide 27: Long Track Record of Growth
LONG TRACK RECORD OF GROWTH SALES GROWTH COMPONENTS! (MILLIONS) TOTAL SHAREHOLDER RETURNS? $989 $5,091 10-year TSR CAGR +3.8% FY14 Acquisitions Core Business FY'23 Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec 13°14 15 16 ‘7 18 1. Source: Company filings. 2. Total Shareholder Return (TSR) assumes rein
Slide 28: Our Vision Has Never Been Clearer
>» FF OUR VISION HAS NEVER BEEN CLEARER Right structure with a passionate team committed to continued success Emotional connection of fresh bread offers innovative brands the opportunity to appeal powerfully to consumers Competitive, leading operator with combination of strong brands and scale Oppor
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Slide 30: FLO Total and Grocery category 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 31: Quarterly category 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 32: Bread category and private label trends
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 33: Private label trends
-2.1% -2.2% -2.6% -4.2% 1Q'23 2Q'23 3Q'23 4Q'23
Slide 34: 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 35: 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 | , 6.4 62 63 61 61 6.1 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 17.6 Source: Flowers Custom Database - Circana Total US Mull + C Store 35
Slide 36: 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 36
Slide 37: Flowers Commercial Cake
FLOWERS COMMERCIAL CAKE Dollar 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 38: 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 38
Slide 39: 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 Millions FY 2019 FY 2020 FY 2021 Source: Flowers Custom Database ~ Circana Total US Mulo + C Store FY 2022 FY 2023 39
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Slide 41: 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 42: 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 43: Q4 Adjusted EBITDA 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 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 44: Q4 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 45: Fiscal year EBITDA reconciliation
For the Fiscal Year For the Fiscal Year For the Fiscal Year For the Fiscal Year For the Fiscal Year For the Fiscal Year For the Fiscal Year For the Fiscal Year Ended Ended Ended Ended Ended Ended Ended Ended December 30, 2023 December 31, 2022 January 1, 2022 January 2, 2021 December 28, 2019 Decemb
Slide 46: Fiscal Year Ended January 2, 2016 reconciliation
For the Fiscal For the Fiscal Year For the Fiscal Year For the Fiscal Year For the Fiscal Year Year Ended Ended Ended Ended Ended January 2, 2016 January 3, 2015 December 28, 2013 December 29, 2012 December 31, 2011 Net Income $ 189,191 $ 175,739 $ 230,894 $ 136,121 $ 123,428 Income tax expense 103,
Slide 47: Fiscal Year Ended January 1, 2011 reconciliation
For the Fiscal Year For the Fiscal Year For the Fiscal Year For the Fiscal Year For the Fiscal Year Ended Ended Ended Ended Ended January 1, 2011 January 2, 2010 January 3, 2009 December 29, 2007 December 30, 2006 Net Income attributable to Flowers Foods, Inc. $ 137,047 $ 130,297 $ 119,233 $ 94,615
Slide 48: Sales and Adjusted EBITDA margin history
Adj EBITDA Sales Adj EBITDA Margin FY'23 5,090,830 501,738 9.9% FY'22 4,805,822 502,030 10.4% FY'21 4,330,767 490,861 11.3% FY'20 4,387,991 521,690 11.9% FY'19 4,123,974 422,726 10.3% FY'18 3,951,852 410,936 10.4% FY'17 3,920,733 443,250 11.3% FY'16 3,926,885 447,468 11.4% FY'15 3,778,505 433,597 11
Slide 49: Net debt to Adjusted EBITDA
December 30, 2023 December 31, 2022 January 1, 2022 January 2, 2021 December 28, 2019 December 29, 2018 December 30, 2017 December 31, 2016 January 2, 2016 Total debt* $ 1,048,144 $ 891,842 $ 890,609 $ 960,103 $ 866,508 $ 979,594 $ 805,086 $ 927,730 $ 988,389 Less: Cash and cash equivalents 22,527 1
Slide 50: Free cash flow reconciliation
Cash Provided by Purchase of Plant, Operating Property and Time Period Activities Equipment Free Cash Flow FY'23 349,353 129,078 220,275 FY'22 360,889 169,071 191,818 FY'21 344,610 135,964 208,646 FY'20 454,464 97,929 356,535 FY'19 366,952 103,685 263,267 * Cash provided by operating activities less
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