Flowers Foods, Inc. · NYSE:FLO
Flowers Foods — Q1 2020 Earnings Presentation
21 slides from Flowers Foods's earnings presentation, May 14, 2020
Slide 1: First Quarter 2020 Review
FIRST QUARTER 2020 REVIEW M AY 1 4 , 2 0 2 0
Slide 2: Information Regarding Forward-Looking Statements
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS Statements contained in this presentation that are not historical facts are forward-looking statements. Forward-looking statements relate to current expectations regarding our future financial condition, performance and results of operations and the u
Slide 3: Key Messages
KEY MESSAGES • COVID-19-related priorities • Maintaining safety of employees • Meeting obligation as key part of nation’s food supply • Supporting the communities we serve • Achieved record sales and adjusted earnings • Second consecutive quarter of adjusted EBITDA margin improvement • Expanded mark
Slide 4: Q1 2020 Financial Review
Q1 2020 FINANCIAL REVIEW NET SALES $1,349.4B +6.8% v PY CASH FLOWS • Cash from Ops = $106.2 million • Price/Mix +6.2%; Volume +0.6% • Capex = $21.7 million • The COVID-19 pandemic drove growth in branded retail offset by declines in non-retail • Dividends = $40.3 million • $203.8M increase in net bo
Slide 5: Flowers' Market Share
FLOWERS’ MARKET SHARE FLO Bread Share FLO Cake Share 18.2 16.9 16.9 17.2 16.4 16.5 16.1 16.1 16.2 8.1 8.0 7.8 7.6 7.7 7.5 7.5 7.2 7.3 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Source: Flowers Custom Database – IRi Total US Mulo + C Store 5
Slide 6: Category Review: Fresh Packaged Breads
CATEGORY REVIEW FRESH PACKAGED BREADS Dollar Sales % Chg Unit Sales % Chg 12.9% 9.8% 1.6% 1.4% 1.5% 0.3% 0.2% 0.4% 0.0% -0.3% -0.4% -0.9% -1.2% -1.3% -2.8% -2.5% -3.2% -3.4% Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Source: Flowers Custom Database – IRi Total US Mulo +
Slide 7: Category Review: Commercial Cake
CATEGORY REVIEW COMMERCIAL CAKE Dollar Sales % Chg Unit Sales % Chg 3.7% 2.9% 3.2% 3.1% 2.8% 2.4% 2.0% 0.0% -0.1% -0.3% -0.2% -0.7% -1.3% -1.2% -1.7% -1.6% -1.8% -2.1% Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Source: Flowers Custom Database – IRi Total US Mulo + C Stor
Slide 8: Organics Generating Growth
ORGANICS GENERATING GROWTH TOTAL ORGANIC FRESH PACKAGED BREADS FLO DOLLAR SHARE OF TOTAL ORGANICS $745.2 $696.3 64.5 65.8 $614.7 60.0 $499.3 52.4 42.6 $366.7 37.1 $284.8 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 LTM FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 LTM DKB IS DRIVING FLOWERS’ MARKET SHARE GAINS
Slide 9: Differentiated Products Gaining Share
DIFFERENTIATED PRODUCTS GAINING SHARE Fresh Packaged Breads Store Brand Share Organic Fresh Packaged Bread Market 25.6 Flowers organic bread share: $745.2 24.5 $696.3 24.1 65.8 $614.7 23.6 $499.3 22.9 22.2 $366.7 $284.8 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 LTM FY 2015 FY 2016 FY 2017 FY 2018 FY 2
Slide 10: FY 2020 Guidance (Provided May 13, 2020)
FY 2020 GUIDANCE (PROVIDED MAY 13, 2020) REVENUE CHG(1) +2.0% to +4.0% OTHER Depreciation & amortization $140 to $145 million GAAP EPS $0.57 to $0.65 Approx. $2 million Other pension expense ADJ. EPS(2) $1.00 to $1.08 Net interest expense $8 to $10 million Effective tax rate Approx. 24% (1) Week 53
Slide 11: Long-Term Goals
LONG-TERM GOALS • Deliver organic sales growth above category averages • Pursue accretive M&A opportunities • Target long-term sales growth of 2% to 4% • Execute on initiatives to realize 250 bps of EBITDA margin expansion • Achieve long-term diluted EPS CAGR of 8%-10% • Dividend yield of 2%+ Taking
Slide 12: 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 statements, press releases and SEC filings, non-GAAP
Slide 13: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Flowers Foods, Inc. Reconciliation of GAAP to Non-GAAP Measures (000's omitted, except per share data) Reconciliation of (Loss) Earnings per Share to Adjusted Earnings per Share For the 16 Week For the 16 Week Period Ended Period Ended April 18, 2020 Apr
Slide 14: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Flowers Foods, Inc. Reconciliation of GAAP to Non-GAAP Measures (000's omitted, except per share data) Reconciliation of Gross Margin For the 16 Week For the 16 Week Period Ended Period Ended April 18, 2020 April 20, 2019 Sales $ 1,349,444 $ 1,263,895 Ma
Slide 15: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Flowers Foods, Inc. Reconciliation of GAAP to Non-GAAP Measures (000's omitted) Reconciliation of Selling, Distribution and Administrative Expenses to Adjusted SD&A For the 16 Week For the 16 Week Period Ended Period Ended April 18, 2020 April 20, 2019 S
Slide 16: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Flowers Foods, Inc. Reconciliation of GAAP to Non-GAAP Measures (000's omitted, except per share data) Reconciliation of Net (Loss) Income to EBITDA and Adjusted EBITDA For the 16 Week For the 16 Week Period Ended Period Ended April 18, 2020 April 20, 20
Slide 17: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Flowers Foods, Inc. Reconciliation of GAAP to Non-GAAP Measures (000's omitted, except per share data) Reconciliation of Income Tax (Benefit) Expense to Adjusted Income Tax Expense For the 16 Week For the 16 Week Period Ended Period Ended April 18, 2020
Slide 18: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Flowers Foods, Inc. Reconciliation of GAAP to Non-GAAP Measures (000's omitted, except per share data) Reconciliation of Net (Loss) Income to Adjusted Net Income For the 16 Week For the 16 Week Period Ended Period Ended April 18, 2020 April 20, 2019 Net
Slide 19: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Flowers Foods, Inc. Reconciliation of GAAP to Non-GAAP Measures Reconciliation of Earnings per Share - Full Year Fiscal 2020 Guidance Range Estimate Net income per diluted common share $ 0.57 to $ 0.65 Project Centennial consulting costs 0.01 0.01 Legal
Slide 20: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Flowers Foods, Inc. Reconciliation of GAAP to Non-GAAP Measures (000's omitted) Reconciliation of Net Income to EBITDA and Adjusted EBITDA For the 12 For the 12 For the 16 Trailing 52 Week Period Week Period For the 12 Week Week Period Week Period Ended
Slide 21: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Flowers Foods, Inc. Reconciliation of GAAP to Non-GAAP Measures (000's omitted) Reconciliation of Debt to Net Debt and Calculation of Net Debt to Trailing Twelve Month Adjusted EBITDA Ratio As of April 18, 2020 Current maturities of long-term debt $ 1,24