Flowers Foods, Inc. · NYSE:FLO
Flowers Foods — Q3 2023 Earnings Presentation
23 slides from Flowers Foods's earnings presentation, Nov 10, 2023
Slide 1: Third Quarter 2023 Review
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 * Sales growth driven by pricing actions to offset inflationary pressures * Volume trends improved sequentially, reflecting strong branded retail performance and diminished impact of business rationalizations * Maintained unit share in challenging consumer environment * Dave’s Killer Br
Slide 4: Q3 2023 Financial Highlights
Q3 2023 FINANCIAL HIGHLIGHTS Sales grew due to price increases to mitigate inflation and the Adjusted EBITDA increased primarily due to improved gross acquisition contribution, partly offset by lower volume margin from greater sales, partly offset by higher SD&A Net income decreased $87.3 million to
Slide 5: Q3 2023 Financial Review
Q3 2023 FINANCIAL REVIEW NET SALES CASH FLOWS — YTD ° Cash from Ops Dividends $1.199B «25% v Py $257.3M $146.7M + Price/Mix +6.3%! + Volume -4.1%2 Capex + Papa Pita acquisition +1.3% $97.0M + Price increases to mitigate inflation and acquisition contribution, partly offset by lower volume NET (LOSS)
Slide 6: Fiscal 2023 Guidance
FISCAL 2023 GUIDANCE (Provided November 9, 2023) SALES ADJ. EBITDA' ADJ. DIL. EPS? $5.085.. $495. $1.18. $5.104B $515M $1.25 + Demand reversion * Ability to mitigate inflation OTHER * Consumer resiliency Depreciation & amortization Effective tax rate + Business rationalizations $150 = $155M APPROX.
Slide 7: Long-Term Growth Target Scorecard
LONG-TERM GROWTH TARGET SCORECARD LT CAGR! 6.4% 2.5% 5.2% 5.4% Sales Adj 4 EBITDA 23.4% 7.8% 5.9% 4.5% Adj dil. - 5 EPS 7-9% 36.5% 13.7% 9.8% 6.1% ()__ Off FY'19 base. No reconciliation of the forecasted range for adjusted diluted EPS to diluted EPS and adjusted EBITDA to net income is included in t
Slide 8: Flowers' Market Share
FLOWERS’ MARKET SHARE =FLO Bread Dollar Share = = FLO Cake Dollar Share 18.2 18.1 179 73 v7 os 73 176 77 7 7.0 7A 68 : | : | : | : : : Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Source: Flowers Custom Database - Circana Total US Mull + C Store 8
Slide 9: Flowers Fresh Packaged Breads
FLOWERS FRESH PACKAGED BREADS mDollar Sales % Chg == Unit Sales % Chg 11.0% 9.6% 9.6% 9.9% 49% 3.4% 3.0% U U - [] [| a U _ U a -2.3% 2.1% 23% 2.9% “3.0% “3.6% “4.4% -4.9% @3 2021 @4 2021 Q1 2022 Q2 2022 @3 2022 @4 2022 Q1 2023 Q2 2023 @3 2023 Source: Flowers Custom Database - Circana Total US Mull +
Slide 10: Flowers Commercial Cake
FLOWERS COMMERCIAL CAKE 12.1% 9.3% 43% 47% -2.2% -3.9% Q3 2021 @Q4 2021 Q1 2022 = Source: Flowers Custom Database - Circana Total US Mulo + C Store mDollar Sales % Chg == Unit Sales % Chg 7.2% 4.2% 19% -10.1% 14.0% -16.3% Q2 2022 Q3 2022 Q4 2022 4.9% 14.8% Q1 2023 Q2 2023 Q3 2023 10
Slide 11: Organic Category Sales
ORGANIC CATEGORY SALES mms FLOWERS ORGANICS FLOWERS SHARE OF ORGANICS mmm ORGANIC FRESH PACKAGED BREADS xFLO 732 74.7 70.7 67.6 64.0 59.4 $783.2 2 $731.1 s enante $657.3 = $470.2 $384.7 $262.8 $264.4 $284.5 $273.1 $269.0 $260.3 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 L52 WE 10-08-23 1 Source: Flower
Slide 12: Gluten-Free Category Sales
GLUTEN-FREE CATEGORY SALES mmm GLUTEN FREE FPB XFLO = mm FLOWERS GF-_-~=Ss FLOWERS SHARE OF GF 35.2 32.5 34.0 29.0 21.8 12.5 $229.7 $229.1 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 L52 WE 10-08-23 Source: Flowers Custom Database - Circana Total US Mulo + C Store 12
Slide 13: Branded vs Store Brand Market Share
BRANDED VS STORE BRAND MARKET SHARE FRESH PACKAGED BREAD CATEGORY 79.6 76.2 76.9 23.8 23.1 20.4 FY 2018 FY 2019 FY 2020 = Branded Dollar Share Source: Flowers Custom Database - Circana Total US Mulo + C Store 80.7 19.3 FY 2021 = Store Brand Dollar Share 80.5 19.5 FY 2022 79.5 L52 WE 20.5 10-08-23 13
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: Adjusted net income per diluted share reconciliation
12-Week Period 12-Week Period Ended Ended October 7, 2023 October 8, 2022 Net (loss) income per diluted common share $ (0.22) $ 0.19 Business process improvement costs 0.02 0.03 Plant closure costs and impairment of assets NM 0.02 Restructuring charges NM — Acquisition-related costs — 0.04 Legal set
Slide 16: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF GROSS MARGIN EXCLUDING DEPRECIATION AND AMORTIZATION TO GROSS MARGIN (OOOS OMITTED) For the 12 Week For the 12 Week Period Ended Period Ended October 7, 2023 October 8, 2022 Sales $ 1,199,260 $ 1,158,169 Materials, supplies, labor and o
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 (OOOS OMITTED) For the 12 Week For the 12 Week Period Ended Period Ended October 7, 2023 October 8, 2022 Selling, distribution and administrative expenses $ 603,954 $ 44
Slide 18: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF NET (LOSS) INCOME TO EBITDA AND ADJUSTED EBITDA (O0OS OMITTED) Net (loss) income Income tax (benefit) expense Interest expense, net Depreciation and amortization EBITDA Other pension benefit Business process improvement costs Restructur
Slide 19: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF INCOME TAX (BENEFIT) EXPENSE TO ADJUSTED INCOME TAX EXPENSE (000S OMITTED) For the 12 Week For the 12 Week Period Ended Period Ended October 7, 2023 October 8, 2022 Income tax (benefit) expense $ (16,567) $ 13,759 Tax impact of: Busines
Slide 20: Net income to adjusted net income reconciliation
For the 12 Week For the 12 Week Period Ended Period Ended October 7, 2023 October 8, 2022 Net (loss) income $ (46,730) $ 40,528 Business process improvement costs 4,361 6,108 Restructuring charges 134 - Legal settlements and related costs 103,147 4,125 Plant closure costs and impairment of assets 77
Slide 21: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA (O0OS OMITTED) Forthe12Week —_For the 16 Week Forthe12Week —Forthe12Week —_Tralling 52 Week Period Ended Period Ended Period Ended Period Ended Period Ended December 31,2022 April 22, 2023
Slide 22: Reconciliation of Debt to Net Debt
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF DEBT TO NET DEBT AND CALCULATION OF NET DEBT TO TRAILING TWELVE MONTH ADJUSTED EBITDA RATIO (OOOS OMITTED) As of October 7, 2023 Current maturities of long-term debt $ - Long-term debt 1,037,843 Total debt 1,037,843 Less: Cash and cash
Slide 23: Guidance adjusted diluted EPS reconciliation
Range Estimate Net income per diluted common $ 0.60 to $ 0.67 Business process improvement costs 0.07 0.07 Plant closure costs and impairment of NM NM Restructuring charges 0.02 0.02 Acquisition-related costs 0.01 0.01 Legal settlements and related costs 0.48 0.48 Adjusted net income per diluted $ 1