Flowers Foods, Inc. · NYSE:FLO
Flowers Foods — Q2 2022 Earnings Presentation
24 slides from Flowers Foods's earnings presentation, Aug 11, 2022
Slide 1: Second Quarter 2022 Review
SECOND QUARTER 2022 REVIEW August 11, 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 gain market share despite higher prices, driven by investments in innovation and marketing • Executing portfolio strategy by focusing capacity on higher-margin, higher-growth
Slide 4: Q2 2022 Financial Highlights
Q2 2022 FINANCIAL HIGHLIGHTS Sales grew due to price increases to mitigate inflation, Adjusted EBITDA decreased due to inflationary pressures, partly offset by lower volume and mix shift partly offset by price increases, and lower labor and marketing expenses and distributor distribution fees Net in
Slide 5: Q2 2022 Financial Review
Q2 2022 FINANCIAL REVIEW NET SALES CASH FLOWS — YTD Cash from Ops Dividends $1.129B +11.0% v PY $183.8M $93.4M • Price/Mix +14.4% • Volume -3.4% Capex • Price increases to mitigate inflation, partly offset by lower volume and mix shift $97.9M NET INCOME GAAP DILUTED EPS $53.7M -4.8% v PY $0.25 -$0.0
Slide 6: Fiscal 2022 Guidance
FISCAL 2022 GUIDANCE (Provided August 11, 2022) SALES ADJ. EPS1 Fiscal 2022 10.0% 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 cost
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 SHARE FLO Bread Share FLO Cake Share 17.7 18.0 17.9 17.4 17.5 17.6 17.5 17.1 17.1 7.6 7.2 7.1 7.3 7.2 7.1 7.0 7.1 6.8 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Source: Flowers Custom Database – IRi Total US Mulo + C Store 9
Slide 10: Category Review: Flowers Fresh Packaged Breads
CATEGORY REVIEW FLOWERS FRESH PACKAGED BREADS Dollar Sales % Chg Unit Sales % Chg 18.4% 15.9% 14.7% 14.4% 12.8% 10.9% 9.7% 9.5% 3.5% 3.6% -0.1% -2.2% -2.1% -2.8% -3.0% -5.4% -6.0% -9.9% Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Source: Flowers Custom Database – IRi Tota
Slide 11: Category Review: Flowers Commercial Cake
CATEGORY REVIEW FLOWERS COMMERCIAL CAKE Dollar Sales % Chg Unit Sales % Chg 12.0% 11.8% 9.8% 7.7% 6.7% 4.8% 5.2% 4.7% 3.9% 0.7% 0.0% -1.6% -1.6% -2.1% -4.2% -4.1% -6.6% -10.5% Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Source: Flowers Custom Database – IRi Total US Mulo
Slide 12: Organic Category Sales
ORGANIC CATEGORY SALES ORGANIC FRESH PACKAGED BREAD XFLO FLOWERS ORGANIC FLOWERS SHARE OF ORGANIC 90.0 $1,040.0 70.8 72.3 $960.0 67.9 64.2 70.0 59.6 $880.0 51.5 $800.0 50.0 $720.0 $640.0 30.0 $701.0 $657.2 $560.0 $594.6 $480.0 $470.2 10.0 $384.7 $400.0 $273.4 $320.0 (10.0) $240.0 $160.0 (30.0) $257.
Slide 13: Gluten-Free Category Sales
GLUTEN-FREE CATEGORY SALES GLUTEN FREE FRESH PACKAGED BREAD XFLO FLOWERS GLUTEN FREE FLOWERS SHARE OF GLUTEN FREE $400.0 40.0 34.4 32.4 29.0 30.0 $350.0 21.8 20.0 $300.0 12.5 $119.9 $93.5 $108.0 7.3 10.0 $250.0 $32.8 $61.8 $17.4 - $200.0 (10.0) $150.0 (20.0) $221.1 $229.9 $221.8 $229.3 $224.9 $228.9
Slide 14: Branded Products Continue Share Gains
BRANDED PRODUCTS CONTINUE SHARE GAINS FRESH PACKAGED BREAD CATEGORY BRANDED VS. STORE BRAND MARKET SHARE 79.7 80.8 81.0 75.8 76.3 77.0 24.2 23.7 23.0 20.3 19.2 19.0 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 LATEST 52WKS ENDING 7-17-22 Branded Store Branded Source: Flowers Custom Database – IRi Total U
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: Reconciliation of Non-GAAP Financial Measures: EPS
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF EARNINGS PER SHARE TO ADJUSTED EARNINGS PER SHARE F o r t he 12 - We e k Fo r the 12-Week P e rio d E nde d P erio d Ended J uly 16 , 2 0 2 2 July 17, 2021 Net i ncome per di l uted common s ha re $ 0.25 $ 0.26 Bus i nes s proces s i mp
Slide 17: Reconciliation of Non-GAAP Financial Measures: 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 July 16, 2022 July 17, 2021 Sales $ 1,129,051 $ 1,017,309 Materials, supplies, labor and other
Slide 18: Reconciliation of Non-GAAP Financial Measures: 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 July 16, 2022 July 17, 2021 Selling, distribution and administrative expenses $ 438,350 $ 407,70
Slide 19: Reconciliation of Non-GAAP Financial Measures: 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 July 16, 2022 July 17, 2021 Net income $ 53,680 $ 56,358 Income tax expense 16,689 16,586 Interest expense, net 1,504 1,07
Slide 20: Reconciliation of Non-GAAP Financial Measures: Income Tax
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 July 16, 2022 July 17, 2021 Income tax expense $ 16,689 $ 16,586 Tax impact of: Business process improvement cons
Slide 21: Reconciliation of Non-GAAP Financial Measures: 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 July 16, 2022 July 17, 2021 Net Income $ 53,680 $ 56,358 Business process improvement consulting costs 8,743 9,904 Legal settleme
Slide 22: Reconciliation of Non-GAAP Financial Measures: Trailing 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 For the 16 Week For the 12 Week Trailing 52 Week Period Ended Period Ended Period Ended Period Ended Period Ended October 9, 2021 January 1, 2022 Ap
Slide 23: Debt to Net Debt and Net Debt to Adjusted EBITDA
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 July 16, 2022 Current maturities of long‐term debt $ ‐ Long‐term debt 891,241 Total debt 891,241 Less: Cash and cash equiva
Slide 24: EPS - 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 $ 1.16 to $ 1.21 Business process improvement co