Flowers Foods, Inc. · NYSE:FLO
Flowers Foods — Q2 2024 Earnings Presentation
29 slides from Flowers Foods's earnings presentation, Aug 16, 2024
Slide 1: Second Quarter 2024 Review
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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 * Solid top- and bottom-line performance ¢ Brands gained the most unit and dollar share of any company in fresh packaged bread category * Improved profitability in away-from-home and private label businesses * Execution of savings initiatives helped drive strong margin improvement * Mai
Slide 4: Q2 2024 Financial Highlights
Q2 2024 FINANCIAL HIGHLIGHTS Sales declined modestly as lower volume, largely due to away- Adjusted EBITDA increased primarily due to lower materials, from-home business exits, was partly offset by improved mix supplies, labor, and other production costs, partly offset by softer sales Net income inc
Slide 5: Q2 2024 Financial Review
Q2 2024 FINANCIAL REVIEW NET SALES CASH FLOWS — YTD ° Cash from Ops Dividends $1.225B .02%.vy $168.4M $101.9M + Price/Mix +1.0%! * Volume -1.2%? Capex + Improved mix, partly offset by lower volume $61 aM NET INCOME GAAP DILUTED EPS S67.0M +5.0% v PY $0.32 +$0.02 v PY ADJ. EBITDA? ADJ. DILUTED EPS* $
Slide 6: Fiscal 2024 Guidance
FISCAL 2024 GUIDANCE (Provided August 16, 2024) SALES ADJ. EBITDA' ADJ. DIL. EPS? Fiscal 2024 Consideration Consumer resiliency Promotional environment OTHER Ability to mitigate cost inflation Depreciation & amortization Effective tax rate Business rationalizations New business wins Timing and effec
Slide 7: Guidance Drivers
GUIDANCE DRIVERS P| — 120-130 1.20 FY'23 Adj. 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 i
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%® ()__ 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: Fresh Packaged Bread Category
FRESH PACKAGED BREAD CATEGORY Bread category outperforming overall food CATEGORY % UNIT CHANGE (Y/Y) "Fresh Packaged Breads =" General Food 10% i 1.4% 1.7% “1.8% -2.0% -2.3% 3.2% -3.2% 10'23 20'23 3Q'23 4Q'23 Source: Flowers Custom Database - Circana Total US Muiot with Conv Due to a change in metho
Slide 10: Private Label Momentum Fading
PRIVATE LABEL MOMENTUM FADING CHANGE IN PRIVATE LABEL UNIT SHARE (Y/Y) 1 0.9 0.8 0.6 a 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24 Source: Flowers Custom Database - Circana Total US Mulo+ with Conv Due to a change in methodology and sources, data provided previously by Circana may not be comparable to current dat
Slide 11: Volume Trends
VOLUME TRENDS + Branded retail benefitting from stronger bread performance, offset by cake softness * Other pressured by business exits and weakness in away-from-home, partly offset by strength in private label and new business wins FLO Volume % Change (Y/Y ) TOTAL COMPANY BRANDED RETAIL OTHER 3Q'23
Slide 12: Branded Dollar Share
Branded Dollar Share Store Branded Dollar Share 78.00 27.00 26.2 77.3 77.00 76.8 24.9 76.4 24.6 25.00 76.00 23.6 23.1 75.3 22.7 75.1 23.00 75.00 74.00 73.7 21.00 73.00 19.00 72.00 17.00 71.00 70.00 15.00 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 L52 WE 07-14-24
Slide 13: Flowers Market Share
FLOWERS MARKET SHARE =FLO Bread Dollar Share FLO Cake Dollar Share 17.0 165 165 16.3 16.9 16.9 15.9 16.0 | | | : Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q12024 Q2 2024 13
Slide 14: Flowers Fresh Packaged Breads
FLOWERS FRESH PACKAGED BREADS mDollar Sales % Chg == Unit Sales % Chg 11.3% 10.1% 7.8% 5.6% 4.4% 3.3% 3.0% 2.2% 15% - im 18% “1.9% 1.7% -3.4% 4.2% 4.4% @3 2022 Q4 2022 Q1 2023 Q2 2023 Q@3 2023 Q4 2023 Q1 2024 Q2 2024 Source: Flowers Custom Database - Circana Total US Mulo+ with Conv 14 Due to a chan
Slide 15: Flowers Commercial Cake
FLOWERS COMMERCIAL CAKE mDollar Sales % Chg == Unit Sales % Chg 47% 19% 19% |_| || “16% 18% | = | “3.4% 3.3% 26% 44% 5.2% 75% -7.5% 71% “18.7% “15.1% “16.4% Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Source: Flowers Custom Database - Circana Total US Mulot with Conv 15 Due to a
Slide 16: Organic Category Sales
ORGANIC CATEGORY SALES Millions mmm ORGANIC FRESH PACKAGED BREADS xFLO mms FLOWERS ORGANICS ——FLOWERS SHARE OF ORGANICS 73.1 74.3 74.3 71.3 68.8 65.9 $925.3 $956.5 $848.4 $703.2 $765.9 $557.2 $288.6 $318.6 $308.7 $312.9 $320.8 $331.7 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 L52 WE 07-14-24 Source: Fl
Slide 17: Gluten-Free Category Sales
GLUTEN-FREE CATEGORY SALES mmm GLUTEN FREE FPB XFLO = mm FLOWERS GF ——FLOWERS SHARE OF GF 35.5 35.7 36.6 31.8 27.8 21.2 $111.9 $61.1 $227.4 $240.2 FY 2019 FY 2020 FY 2021 fal US Mulot with Conv data provided previously by Circana may not be comparable to current data Source: Flowers Custom Database.
Slide 18: 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 19: Adjusted net income per diluted share reconciliation
For the 12 Week For the 12 Week Period Ended Period Ended July 13, 2024 July 15, 2023 Net income per diluted common share $ 0.32 $ 0.30 Business process improvement costs 0.01 0.02 Impairment of assets NM — Restructuring charges 0.02 0.01 Restructuring-related implementation costs 0.01 — Acquisition
Slide 20: Gross margin excluding depreciation and amortization
For the 12 Week For the 12 Week Period Ended Period Ended July 13, 2024 July 15, 2023 Sales $ 1,224,983 $ 1,228,050 Materials, supplies, labor and other production costs (exclusive of depreciation and amortization) 613,362 626,097 Gross Margin excluding depreciation and amortization 611,621 601,953
Slide 21: Adjusted SD&A reconciliation
For the 12 Week For the 12 Week Period Ended Period Ended July 13, 2024 July 15, 2023 Selling, distribution and administrative expenses $ 471,400 $ 475,916 Business process improvement costs (1,606) (6,588) Acquisition-related costs - (489) Restructuring-related implementation costs (1,635) - Adjust
Slide 22: Adjusted EBITDA reconciliation
For the 12 Week For the 12 Week Period Ended Period Ended July 13, 2024 July 15, 2023 Net income $ 66,967 $ 63,760 Income tax expense 23,455 20,605 Interest expense, net 4,908 4,251 Depreciation and amortization 36,827 34,984 EBITDA 132,157 123,600 Other pension benefit (118) (62) Business process i
Slide 23: Adjusted income tax expense reconciliation
For the 12 Week For the 12 Week Period Ended Period Ended July 13, 2024 July 15, 2023 Income tax expense $ 23,455 $ 20,605 Tax impact of: Business process improvement costs 401 1,647 Restructuring charges 1,701 624 Acquisition-related costs - 122 Impairment of assets 344 - Restructuring-related impl
Slide 24: Adjusted net income reconciliation
For the 12 Week For the 12 Week Period Ended Period Ended July 13, 2024 July 15, 2023 Net income $ 66,967 $ 63,760 Business process improvement costs 1,205 4,941 Restructuring charges 5,104 1,875 Acquisition-related costs - 367 Impairment of assets 1,033 - Restructuring-related implementation costs
Slide 25: Trailing 52-week Adjusted EBITDA reconciliation
For the 12 Week For the 12 Week For the 16 Week For the 12 Week Trailing 52 Week Period Ended Period Ended Period Ended Period Ended Period Ended October 7, 2023 December 30, 2023 April 20, 2024 July 13, 2024 July 13, 2024 Net income (loss) $ (46,730) $ 35,676 $ 73,043 $ 66,967 $ 128,956 Income tax
Slide 26: Net debt to adjusted EBITDA
As of July 13, 2024 Current maturities of long-term debt $ - Long-term debt 1,068,844 Total debt 1,068,844 Less: Cash and cash equivalents 6,866 Net Debt $ 1,061,978 Adjusted EBITDA for the Trailing Twelve Months Ended July 13, 2024 $ 520,354 Ratio of Net Debt to Trailing Twelve Month Adjusted EBITD
Slide 27: Fiscal 2024 adjusted EPS guidance reconciliation
Net income per diluted common share $ 1.12 to $ 1.22 Business process improvement costs 0.02 0.02 Impairment of assets 0.02 0.02 Restructuring charges 0.03 0.03 Restructuring-related implementation costs 0.01 0.01 Adjusted net income per diluted common share $ 1.20 to $ 1.30 NM – Not meaningful. Cer
Slide 28: FY2019 adjusted EPS reconciliation
For the 52-Week Period Ended December 28, 2019 Net income per diluted common share $ 0.78 Restructuring and related impairment charges 0.08 Legal settlements and related costs 0.10 Executive retirement agreement NM Project Centennial consulting costs NM Recovery on inferior ingredients NM Acquisitio
Slide 29: FY2019 adjusted EBITDA reconciliation
For the 52 Week Period Ended December 28, 2019 Net income $ 164,538 Income tax expense 47,545 Interest expense, net 11,097 Depreciation and amortization 144,228 EBITDA 367,408 Other pension cost 2,248 Project Centennial consulting costs 784 Acquisition-related costs 22 Restructuring and related impa