Flowers Foods, Inc. · NYSE:FLO
Flowers Foods — Q4 2020 Earnings Presentation
23 slides from Flowers Foods's earnings presentation, Feb 11, 2021
Slide 1: Fourth Quarter 2020 Review
Fourth Quarter 2020 Review February 11, 2021
Slide 2: Regarding Forward-Looking Statements
Regarding Forward-Looking Statements Statements contained in this slide 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
Slide 3: Key Messages
Key Messages • Q4 reflected continued strength in branded retail, helped by new product introductions • Margin improvement in Q4 driven by mix shift and portfolio and supply chain optimization benefits • Four strategic priorities guiding our investment in future growth, including transformational di
Slide 4: Q4 2020 Financial Highlights
Q4 2020 Financial Highlights • Sales increase reflecting the continued impact of the COVID-19 pandemic, extra week, new product introductions, improved promotional efficiency, and a reduction in product returns • Mix shift to branded retail products drove cost leverage and margin increase • Extra we
Slide 5: Q4 2020 Financial Review
Q4 2020 Financial Review NET SALES CASH FLOWS – FY20 $1.023B +11.5% v PY Cash from Ops Dividends $454.5M $167.3M • Price/Mix +7.7%; Volume -4.4%; Extra week +8.2% • Growth from branded retail more than offsetting Capex lower store-branded retail and foodservice sales $97.9M ADJ. EBITDA1 GAAP DILUTED
Slide 6: Fiscal 2021 Guidance (Provided February 11, 2021)
Fiscal 2021 Guidance (Provided February 11, 2021) Fiscal 2021 SALES1 ADJ. EPS2 Considerations • Persistence of pandemic -4.0% to -2.0% $1.07 to $1.17 and impact on mix • Promotional environment • Ability to offset potential OTHER inflationary costs Depreciation & amortization — Effective tax rate —
Slide 7: Flowers’ Market Share
Flowers’ Market Share FLO Bread Share FLO Cake Share 18.0 17.4 17.6 17.0 17.1 16.8 16.8 16.4 16.0 7.5 7.5 7.4 7.7 7.0 7.1 7.3 7.2 7.1 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 7 Source: Flowers Custom Database – IRi Total US Mulo + C Store
Slide 8: Category Review: Fresh Packaged Breads
Category Review FRESH PACKAGED BREADS Dollar Sales % Chg Unit Sales % Chg 21.4% 19.3% 18.4% 16.4% 14.8% 14.4% 13.4% 10.9% 6.3% 5.6% 5.4% 5.0% 2.6% 2.7% 1.2% 0.9% -0.4% -0.1% Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 8 Source: Flowers Custom Database – IRi Total US Mulo
Slide 9: Category Review: Commercial Cake
Category Review COMMERCIAL CAKE Dollar Sales % Chg Unit Sales % Chg 12.4% 11.0% 7.0% 6.0% 5.0% 2.9% 1.8% 1.0% 0.0% -1.5% -1.7% -2.5% -4.0% -3.2% -3.6% -3.1% -4.8% -5.5% -5.6% -6.0% -6.7% -9.0% -8.0% Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 9 Source: Flowers Custom Data
Slide 10: Organics Generating Growth
Organics Generating Growth ORGANIC FRESH PACKAGED BREADS XFLO FLOWERS ORGANICS FLOWERS SHARE OF ORGANICS $1,000.0 80.0 67.9 $900.0 70.0 64.5 $800.0 60.0 60.0 $700.0 52.2 50.0 $600.0 42.3 $593.5 $500.0 36.9 $468.6 40.0 $383.1 $400.0 $270.6 30.0 $300.0 $160.1 $109.5 20.0 $200.0 $247.8 $255.7 $257.7 $2
Slide 11: Gluten-free Generating Growth
Gluten-free Generating Growth GLUTEN FREE FRESH PACKAGED BREADS XFLO FLOWERS GLUTEN FREE FLOWERS SHARE OF GLUTEN FREE $350.0 40.0 31.7 30.0 $300.0 23.7 20.0 13.8 $93.1 $250.0 8.1 5.3 5.8 $61.1 10.0 $32.6 $200.0 $11.9 $17.2 - $9.8 (10.0) $150.0 (20.0) $100.0 (30.0) $50.0 $173.9 $194.5 $196.3 $202.9 $
Slide 12: Branded Products Gaining Share from Store Brands
Branded Products Gaining Share from Store Brands Fresh Packaged Breads Store Brand Share 25.8 24.7 24.2 23.8 23.1 20.4 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Source: IRI Custom Database Total US + Convenience 12
Slide 13: Key Drivers to Achieving our Long-term Growth Targets
Key Drivers to Achieving our Long-term Growth Targets LONG-TERM GROWTH +1-2% +4-6% +7-9% TARGETS1 SALES ADJ. EBITDA2 ADJ. EPS3 Focus on leading, iconic brands to grow share ROADMAP TO DELIVERING LONG-TERM TARGETS Portfolio strategy prioritizes higher-priced, higher-profit FY2020 FY2021 FY2022 produc
Slide 14: 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 15: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Reconciliation of Earnings per Share to Adjusted Earnings per Share F o r the 13 We e k F o r the 12 We e k P e rio d Ende d P e rio d Ende d J a nua ry 2, 2021 De c e m be r 28, 2019 Net income per diluted common share $ 0.26 $ 0.01 Loss (recovery) on i
Slide 16: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Reconciliation of Gross Margin (000s omitted) F o r t h e 13 We e k F o r the 12 We e k P e rio d E n d e d P e rio d Ende d J a n u a ry 2 , 2 0 2 1 De c e m be r 28, 2019 Sales $ 1,023,036 $ 917,759 M aterials, supplies, labor and other production cost
Slide 17: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Reconciliation of Selling, Distribution and Administrative Expenses to Adjusted SD&A (000s omitted) F o r t h e 13 We e k F o r the 12 We e k P e rio d E n d e d P e rio d Ende d J a n u a ry 2 , 2 0 2 1 De c e m be r 28, 2019 Selling, distribution and a
Slide 18: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Reconciliation of Net Income to EBITDA and Adjusted EBITDA (000s omitted) F o r t h e 13 We e k F o r the 12 We e k P e rio d E n d e d P e rio d Ende d J a n u a ry 2 , 2 0 2 1 De c e m be r 28, 2019 Net income $ 55,824 $ 2,219 Income tax expense (benef
Slide 19: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Reconciliation of Income Before Income Taxes to Adjusted EBT (000s omitted) For the 13 Week For the 12 Week Period Period Ended Ended January 2, 2021 December 28, 2019 Income before income taxes $ 74,630 $ 1,172 Project Centennial consulting costs 1,504
Slide 20: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Reconciliation of Income Tax Expense to Adjusted Income Tax Expense (000s omitted) F o r t h e 13 We e k F o r the 12 We e k P e rio d E n d e d P e rio d Ende d J a n u a ry 2 , 2 0 2 1 De c e m be r 28, 2019 Income tax expense (benefit) $ 18,806 $ (1,0
Slide 21: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Reconciliation of Net Income to Adjusted Net Income (000s omitted) F o r t h e 13 We e k F o r the 12 We e k P e rio d E n d e d P e rio d Ende d J a n u a ry 2 , 2 0 2 1 De c e m be r 28, 2019 Net income $ 55,824 $ 2,219 Loss on inferior ingredients 80
Slide 22: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Reconciliation of Net Income to EBITDA and Adjusted EBITDA (000s omitted) F o r t h e 5 3 We e k F o r the 52 We e k P e rio d P e rio d E n d e d Ende d J a n u a ry 2 , 2 0 2 1 De c e m be r 28, 2019 Net income $ 152,318 $ 164,538 Income tax expense 48
Slide 23: Reconciliation of Non-GAAP Financial Measures
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 January 2, 2021 Current maturities of long-term debt $ — Long-term debt 960,103 Total debt 960,103 Less: Cash and cash equi