Flowers Foods, Inc. · NYSE:FLO
Flowers Foods — Q1 2021 Earnings Presentation
28 slides from Flowers Foods's earnings presentation, May 20, 2021
Slide 1: First Quarter 2021 Review
First Quarter 2021 Review May 20, 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 • Q1 reflected continued, though moderating, strength in branded retail and continuing recovery for non-retail and other • Equaled prior year period’s strong adjusted EPS despite lower sales • Investing in innovation and marketing to continue momentum and drive future branded retail gro
Slide 4: Q1 2021 Financial Highlights
Q1 2021 Financial Highlights • Sales decrease reflects comparison to record results in the prior year as the onset of the pandemic drove a dramatic increase in demand for branded retail products in 1Q’20 • Adjusted EBITDA margins increased due to improved price/mix, partially offset by lower product
Slide 5: Q1 2021 Comparison to Pre-Pandemic Results
Q1 2021 Comparison to Pre-Pandemic Results • Sales increased due to higher, though moderating, demand for branded retail products caused by the pandemic • Mix shift to branded retail products drove cost leverage and margin increase COMPONENTS OF Q1’21 SALES GROWTH VS Q1’19 (MILLIONS) ADJUSTED EBITDA
Slide 6: Q1 2021 Financial Review
Q1 2021 Financial Review NET SALES CASH FLOWS – 1Q’21 $1.302B -3.5% v PY Cash from Ops Dividends $98.0M $42.5M • Price/Mix +3.4%; Volume -6.9% • Partial recovery of non-retail and other sales Capex offset by moderation of branded retail and continued declines in store branded sales $27.3M ADJ. EBITD
Slide 7: Fiscal 2021 Guidance (Provided May 20, 2021)
Fiscal 2021 Guidance (Provided May 20, 2021) Fiscal 2021 SALES1 ADJ. EPS2 Considerations • Persistence of pandemic -3.5% to -2.0% $1.10 to $1.17 and impact on mix • Promotional environment • Ability to offset OTHER inflationary costs Depreciation & amortization — Effective tax rate — • Investments a
Slide 8: Flowers' Market Share
Flowers’ Market Share FLO Bread Share FLO Cake Share 18.0 17.4 17.6 17.7 16.8 17.0 17.1 16.8 16.4 7.5 7.4 7.7 7.0 7.1 7.3 7.2 7.1 7.3 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 8 Source: Flowers Custom Database – IRi Total US Mulo + C Store
Slide 9: Category Review: Flowers Fresh Packaged Breads
Category Review FLOWERS 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% 6.2% 5.6% 5.4% 2.6% 2.7% 1.2% 0.9% -0.1% -6.0% -9.7% Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 9 Source: Flowers Custom Database – IRi Total
Slide 10: Category Review: Flowers Commercial Cake
Category Review FLOWERS COMMERCIAL CAKE Dollar Sales % Chg Unit Sales % Chg 12.4% 7.0% 5.0% 2.9% 1.8% 0.0% -0.8% -1.7% -2.5% -3.1% -3.6% -4.8% -4.9% -5.5% -5.6% -6.0% -6.7% -8.0% Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 10 Source: Flowers Custom Database – IRi Total US
Slide 11: Organics Generating Growth
Organics Generating Growth ORGANIC FRESH PACKAGED BREADS XFLO FLOWERS ORGANICS FLOWERS SHARE OF ORGANICS $1,000.0 75.0 68.7 69.4 $900.0 65.2 65.0 60.6 $800.0 52.7 55.0 $700.0 42.2 45.0 $600.0 $593.5 $616.9 $500.0 35.0 $467.9 $381.5 $400.0 $267.7 25.0 $300.0 $155.6 15.0 $200.0 $240.8 $248.0 $250.1 $2
Slide 12: Gluten-free Generating Growth
Gluten-free Generating Growth GLUTEN FREE FRESH PACKAGED BREADS XFLO FLOWERS GLUTEN FREE FLOWERS SHARE OF GLUTEN FREE $400.0 45.0 31.7 33.1 35.0 $350.0 23.7 25.0 $300.0 13.8 15.0 $250.0 8.0 $93.1 $99.0 5.8 $61.1 5.0 $32.6 $200.0 $11.9 $17.2 (5.0) $150.0 (15.0) $100.0 $194.4 $196.4 $202.9 $196.9 $200
Slide 13: Branded Products Gaining Share from Store Brands
Branded Products Gaining Share from Store Brands FRESH PACKAGED BREADS STORE BRAND SHARE 26.0 24.7 24.2 23.8 23.1 20.4 20.0 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 L52 WE Q1 2021 Source: IRI Custom Database Total US + Convenience 13
Slide 14: 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 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
Reconciliation of Non-GAAP Financial Measures Reconciliation of Earnings (Loss) per Share to Adjusted Earnings per Share For the 16 Week For the 16 Week Period Ended Period Ended April 24, 2021 April 18, 2020 Net income (loss) per diluted common share $ 0.34 $ (0.03 ) Loss on inferior ingredients NM
Slide 17: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Reconciliation of Gross Margin (000s omitted) For the 16 Week For the 16 Week Period Ended Period Ended April 24, 2021 April 18, 2020 Sales $ 1,302,168 $ 1,349,444 Materials, supplies, labor and other production costs (exclusive of depreciation and amort
Slide 18: 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) For the 16 Week For the 16 Week Period Ended Period Ended April 24, 2021 April 18, 2020 Selling, distribution and administrative expenses $ 501,973 $ 522,
Slide 19: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Reconciliation of Net Income to EBITDA and Adjusted EBITDA (000s omitted) For the 12 For the 12 For the 16 Trailing 53 Week Period Week Period For the 13 Week Week Period Week Period Ended Ended Period Ended Ended Ended July 11, 2020 October 3, 2020 Janu
Slide 20: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Reconciliation of Income (Loss) Before Income Taxes to Adjusted EBT (000s omitted) For the 16 Week For the 16 Week Period Ended Period Ended April 24, 2021 April 18, 2020 Income (loss) before income taxes $ 94,886 $ (7,791) Project Centennial consulting
Slide 21: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Reconciliation of Income Tax Expense (Benefit) to Adjusted Income Tax Expense (000s omitted) For the 16 Week For the 16 Week Period Ended Period Ended April 24, 2021 April 18, 2020 Income tax expense (benefit) $ 23,231 $ (2,019) Tax impact of: Loss on in
Slide 22: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Reconciliation of Net Income (Loss) to Adjusted Net Income (000s omitted) For the 16 For the 16 Week Period Week Period Ended Ended April 24, 2021 April 18, 2020 Net Income (loss) $ 71,655 $ (5,772) Project Centennial consulting costs - 2,544 Loss on inf
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 April 24, 2021 Current maturities of long-term debt $ - Long-term debt 889,577 Total debt 889,577 Less: Cash and cash equiv
Slide 24: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Reconciliation of Earnings per Share - Full Year Fiscal 2021 Guidance Range Estimate Net income per diluted common share $ 1.02 to $ 1.09 Business process improvement consulting costs 0.02 0.02 Loss on inferior ingredients NM NM Loss on extinguishment of
Slide 25: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Reconciliation of Net (Loss) Income to EBITDA and Adjusted EBITDA (000s omitted) Trailing 53 Week Period Ended January 2, 2021 Net (loss) income $ 152,318 Income tax (benefit) expense 48,393 Interest expense, net 12,094 Depreciation and amortization 141,
Slide 26: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Reconciliation of Net (Loss) Income to EBITDA and Adjusted EBITDA (000s omitted) For the 16 Week For the 16 Week Period Ended Period Ended April 18, 2020 April 20, 2019 Net (loss) income $ (5,772) $ 65,866 Income tax (benefit) expense (2,019) 20,199 Inte
Slide 27: 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
Slide 28: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Reconciliation of Earnings per Share to Adjusted Earnings per Share For the 52 Week Period Ended December 28, 2019 Net income per diluted common share $ 0.78 Loss (recovery) on inferior ingredients NM Restructuring and related impairment charges 0.08 Pro