Flowers Foods, Inc. · NYSE:FLO
Flowers Foods — Q3 2022 Earnings Presentation
24 slides from Flowers Foods's earnings presentation, Nov 10, 2022
Slide 1: Third Quarter 2022 Review
THIRD QUARTER 2022 REVIEW November 10, 2022
Slide 2: Regarding Forward-Looking Statements
REGARDING 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 forwar
Slide 3: Key Messages
KEY MESSAGES • Strong sales increase driven by pricing actions to offset inflationary pressures • Leading brands continue to perform well, driven by investments in innovation and marketing • Mitigating inflationary costs through operational efficiencies and pricing actions • Raising the bottom end o
Slide 4: Q3 2022 Financial Highlights
Q3 2022 FINANCIAL HIGHLIGHTS Sales grew due to price increases to mitigate inflation, partly offset Adjusted EBITDA increased due to higher sales, partly offset by by lower volume inflationary pressures Net income increased 4.3% to $40.5 million from $38.9 million in the same quarter of 2021 due to
Slide 5: Q3 2022 Financial Review
Q3 2022 FINANCIAL REVIEW NET SALES CASH FLOWS — YTD Cash from Ops Dividends $1.158B +12.7% v PY $291.5M $140.1M • Price/Mix +17.8%1 • Volume -5.1%2 Capex • Price increases to mitigate inflation, partly offset by lower volume $128.4M NET INCOME GAAP DILUTED EPS $40.5M +4.3% v PY $0.19 +$0.01 v PY ADJ
Slide 6: Fiscal 2022 Guidance
FISCAL 2022 GUIDANCE (Provided November 10, 2022) SALES ADJ. EPS1 Fiscal 2022 11.0% to $1.25 to Considerations 12.0% $1.30 • Ability to mitigate inflation • Demand elasticity OTHER • Supply chain disruptions and availability of materials Depreciation & amortization Effective tax rate • Timing of cos
Slide 7: Long-Term Growth Target Scorecard
LONG-TERM GROWTH TARGET SCORECARD Continuing to exceed financial targets (1) Off FY’19 base (2) FY’20 was a 53-week year (3) Implied return using FY’22 guidance midpoint (4) No reconciliation of the forecasted range for adjusted EBITDA or adjusted EPS is included in this presentation because we are
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: Flowers' Market Share
FLOWERS’ MARKET SHARE1 FLO Bread Share FLO Cake Share 17.6 17.9 17.8 17.7 17.5 17.6 17.5 17.1 17.1 7.2 7.1 7.3 7.2 7.1 7.0 7.1 6.8 6.4 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Source: Flowers Custom Database – IRi Total US Mulo + C Store 9 1. Market share in dollars
Slide 10: Flowers Fresh Packaged Breads
FLOWERS FRESH PACKAGED BREADS Dollar Sales % Chg Unit Sales % Chg 1 15.9% 14.3% 12.7% 10.9% 11.1% 9.7% 9.6% 3.5% 3.6% -0.1% -2.2% -2.1% -2.8% -2.9% -3.5% -5.4% -6.1% -10.0% Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Source: Flowers Custom Database – IRi Total US Mulo + C
Slide 11: Flowers Commercial Cake
FLOWERS COMMERCIAL CAKE Dollar Sales % Chg Unit Sales % Chg1 12.3% 9.6% 10.0% 7.6% 7.4% 5.0% 5.0% 4.3% 4.3% 3.7% 0.6% 0.0% -0.5% -1.7% -2.1% -2.6% -3.6% -5.0% -4.6% -7.0% -10.0% -9.9% -15.0% -13.9% Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Source: Flowers Custom Databas
Slide 12: Organic Category Sales
ORGANIC CATEGORY SALES ORGANIC FRESH PACKAGED BREAD XFLO FLOWERS ORGANIC FLOWERS SHARE OF ORGANIC $1,200.0 80.0 $1,120.0 72.8 $1,040.0 70.8 67.8 70.0 $960.0 64.1 $880.0 59.6 $800.0 60.0 $720.0 51.5 $640.0 $718.7 $594.6 $657.3 50.0 $560.0 $480.0 $470.2 $384.7 $400.0 $273.4 40.0 $320.0 $240.0 30.0 $16
Slide 13: Gluten-Free Category Sales
GLUTEN-FREE CATEGORY SALES GLUTEN FREE MINUS FLOWERS FLOWERS GLUTEN FREE FLOWERS SHARE OF GLUTEN FREE $400.0 40.0 34.9 32.4 29.0 30.0 $350.0 21.8 20.0 $300.0 12.5 $124.7 $93.5 $108.0 7.3 10.0 $250.0 $32.8 $61.8 $17.4 - $200.0 (10.0) $150.0 (20.0) $220.9 $229.7 $221.7 $229.1 $224.9 $232.4 $100.0 (30.
Slide 14: FPB Category: Branded vs. Store Brand Share
FPB CATEGORY: BRANDED VS. STORE BRAND SHARE1 79.6 80.7 80.7 75.8 76.2 76.9 24.2 23.8 23.1 20.4 19.3 19.3 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 LATEST 52WKS ENDING 10-09-22 Branded Store Branded Source: Flowers Custom Database – IRi Total US Mulo + C Store 14 1. Market share in dollars
Slide 15: 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 16: 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 12‐Week For the 12‐Week Period Ended Period Ended October 8, 2022 October 9, 2021 Net income per diluted common share $ 0.19 $ 0.18 Business process improvement consulting costs
Slide 17: Gross Margin Excluding Depreciation and Amortization to Gross Margin
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF GROSS MARGIN EXCLUDING DEPRECIATION AND AMORTIZATION TO GROSS MARGIN (000S OMITTED) For the 12 Week For the 12 Week Period Ended Period Ended October 8, 2022 October 9, 2021 Sales $ 1,158,169 $ 1,027,800 Materials, supplies, labor and o
Slide 18: Selling, Distribution and Administrative 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 12 Week For the 12 Week Period Ended Period Ended October 8, 2022 October 9, 2021 Selling, distribution and administrative expenses $ 447,363 $ 42
Slide 19: 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 12 Week For the 12 Week Period Ended Period Ended October 8, 2022 October 9, 2021 Net income $ 40,528 $ 38,852 Income tax expense 13,759 12,048 Interest expense, net 1,342
Slide 20: 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 12 Week For the 12 Week Period Ended Period Ended October 8, 2022 October 9, 2021 Income tax expense $ 13,759 $ 12,048 Tax impact of: Legal settlements and related
Slide 21: Net Income to Adjusted Net Income
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME (000S OMITTED) For the 12 Week For the 12 Week Period Ended Period Ended October 8, 2022 October 9, 2021 Net Income $ 40,528 $ 38,852 Legal settlements and related costs 4,125 17,316 Business process im
Slide 22: Net Income to EBITDA and Adjusted EBITDA (Trailing)
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA (000S OMITTED) For the 12 For the 16 For the 12 For the 12 Trailing 52 Week Period Week Period Week Period Week Period Week Period Ended Ended Ended Ended Ended January 1, 2022 April 23, 2022 Jul
Slide 23: 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 October 8, 2022 Current maturities of long‐term debt $ ‐ Long‐term debt 891,542 Total debt 891,542 Less: Cash and cash equi
Slide 24: Earnings Per Share - Full Year Fiscal 2022 Guidance Range Estimate
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF EARNINGS PER SHARE - FULL YEAR FISCAL 2022 GUIDANCE RANGE ESTIMATE Reconciliation of Earnings per Share ‐ Full Year Fiscal 2022 Guidance Range Estimate Net income per diluted common share $ 1.04 to $ 1.09 Legal settlements and related c