Flowers Foods, Inc. · NYSE:FLO
Flowers Foods — Q1 2022 Earnings Presentation
26 slides from Flowers Foods's earnings presentation, May 19, 2022
Slide 1: First Quarter 2022 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 ¢ Strong sales increase driven by pricing actions to offset inflationary pressures, positive mix shift, and improved promotional efficiency * Leading brands continue to gain market share and grow volumes despite higher prices, driven by investments in innovation and marketing * Increase
Slide 4: Q1 2022 Financial Highlights
Q1 2022 FINANCIAL HIGHLIGHTS Sales increased due to price increases to mitigate inflation, Adjusted EBITDA increased as inflation-driven pricing positive mix shift, and improved promotional efficiency, actions more than offset significant input and logistics cost partly offset by lower volume. incre
Slide 5: Q1 2022 Financial Review
Q1 2022 FINANCIAL REVIEW NET SALES S1.436B +10.3% v PY + Price/Mix +13.5% * Volume -3.2% + Price increases to mitigate inflation, positive mix shift ADJ. EBITDA’ S165.5M +2.4% v py * 11.5% of sales, down 90 bps + Inflation-driven pricing actions more than offset significant input and logistics cost
Slide 6: Fiscal 2022 Guidance
FISCAL 2022 GUIDANCE (Provided May 19, 2022) SALES 10.0% to 12.0% OTHER Depreciation & amortization $135 - $145M Net interest expense ~$7M Capital expenditures $150 - $160M? ADJ. EPS! $1.20 to $1.30 Effective tax rate 24.0% - 24.5% Diluted shares outstanding ~213.5M * Ability to mitigate inflation *
Slide 7: Long-Term Growth Target Scorecard
LONG-TERM GROWTH TARGET SCORECARD Continuing to exceed financial targets ‘AGR' LT Targets! Sales 1-2% 6.4% 2.5% 5.2% Adj EBITDA 4-6%* 23.4% 7.8% N/A Adj EPS 7-9%4 36.5% 13.7% 9.2% () OFF FY base (2) FY'20 was a 53-week year (3) Implied return using FY'22 guidance midpoint (4) No reconciliation of th
Slide 8: Foodservice
Foodservice • • • • • • • Foodservice • • • • • • • • • •
Slide 9: Flowers' Market Share
FLOWERS’ MARKET SHARE FLO Bread Share =FLO Cake Share 18.0 18.0 79 17.6 17.7 V4 v5 Al Al | : | : | | : | : | : | Qi 2020 Q2 2020 Q3 2020 Q4 2020 Qi 2021 Q2 2021 Q3 2021 Q4 2021 Q1 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 mDollar Sales % Chg == Unit Sales % Chg 21.3% 19.3% 18.4% 15.9% 14.7% 14.4% 12.8% 10.9% | 3.5% = [] = -2.2% -2.1% -6.0% 5.4% 9.9% Qi 2020 Q2 2020 Q3 2020 Q4 2020 Qi 2021 Q2 2021 Q3 2021 Source: Flowers Custom Database — iRi Total US Mulo + C Store 9.7% =
Slide 11: Category Review: Flowers Commercial Cake
CATEGORY REVIEW FLOWERS COMMERCIAL CAKE 12.0% 17% 47% 1.2% if 0.7% |__| — 3.7% Qi 2020 Q2 2020 Q3 2020 Source: Flowers Custom Database - IRi Total US Mulo + C Store = Dollar Sales % Chg = Unit Sales % Chg 3.9% 0.0% -1.6% "21% 4.2% 6.6% Q4 2020 Qi 2021 Q2 2021 9.8% ; : ) “1.6% Q3 2021 Q4 2021 11.8% 4
Slide 12: Organic Category Sales
ORGANIC CATEGORY SALES mmm ORGANIC FRESH PACKAGED BREADS X FLO mms FLOWERS ORGANIC ——FLOWERS SHARE OF ORGANIC 71.4 72.4 64.9 68.5 60.3 52.5 $686.2 $594.6 $657.3 $470.2 $384.7 $273.4 $247.5 $253.5 $254.0 $273.0 $263.0 $261.2 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 52 WKs ending 4-24-22 Source: Flower
Slide 13: Gluten-Free Category Sales
GLUTEN-FREE CATEGORY SALES wm GLUTEN FREE FRESH PACKAGED BREAD XFLO 12.5 7.3 $32.8 $17.4 $221.1 $229.9 FY 2017 FY 2018 Source: Flowers Custom Database - iRi Total US Mulo + C Store 21.8 $61.8 $221.8 FY 2019 mmm FLOWERS GLUTEN FREE ——FLOWERS SHARE OF GLUTEN FREE 32.4 33.5 29.0 $93.5 $108.0 $114.5 $22
Slide 14: Branded Products Continue Share Gains
BRANDED PRODUCTS CONTINUE SHARE GAINS FRESH PACKAGED BREAD BRANDED VS. STORE BRAND MARKET SHARE 80.8 81.0 797 75.8 76.2 76.9 24.2 23.8 231 20.3 19.2 19.0 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 LATEST S2WKS ENDING =Branded ™Store Branded Source: Flowers Custom Database - IRi Total US Mulo + C Store
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: Net income per diluted common share reconciliation
For the 16-Week For the 16-Week Period Ended Period Ended April 23, 2022 April 24, 2021 Net income per diluted common share $ 0.40 $ 0.34 Loss on inferior ingredients — NM Business process improvement consulting costs 0.03 0.02 Impairment of assets NM — Loss on extinguishment of debt — 0.06 Adjusted
Slide 17: Gross margin excluding depreciation and amortization
For the 16 Week For the 16 Week Period Ended Period Ended April 23, 2022 April 24, 2021 Sales $ 1,435,932 $ 1,302,168 Materials, supplies, labor and other production costs (exclusive of depreciation and amortization) 724,592 643,576 Gross Margin excluding depreciation and amortization 711,340 658,59
Slide 18: Adjusted SD&A expenses reconciliation
For the 16 Week For the 16 Week Period Ended Period Ended April 23, 2022 April 24, 2021 Selling, distribution and administrative expenses $ 554,952 $ 501,973 Less: Business process improvement consulting costs (9,064) (4,958) Adjusted selling, distribution and administrative expenses $ 545,888 $ 497
Slide 19: EBITDA and Adjusted EBITDA reconciliation
For the 16 Week For the 16 Week Period Ended Period Ended April 23, 2022 April 24, 2021 Net income $ 85,589 $ 71,655 Income tax expense 24,523 23,231 Interest expense, net 2,101 4,201 Loss on extinguishment of debt - 16,149 Depreciation and amortization 43,423 41,386 EBITDA 155,636 156,622 Other pen
Slide 20: Adjusted income tax expense reconciliation
For the 16 Week For the 16 Week Period Ended Period Ended April 23, 2022 April 24, 2021 Income tax expense $ 24,523 $ 23,231 Tax impact of: Business process improvement consulting costs 2,266 1,240 Loss on inferior ingredients - 31 Loss on extinguishment of debt - 4,037 Asset Impairment 248 - Adjust
Slide 21: Adjusted net income reconciliation
For the 16 Week For the 16 Week Period Ended Period Ended April 23, 2022 April 24, 2021 Net Income $ 85,589 $ 71,655 Business process improvement consulting costs 6,798 3,718 Loss on inferior ingredients - 91 Loss on extinguishment of debt - 12,112 Asset Impairment 742 - Adjusted net income $ 93,129
Slide 22: Trailing 52-week Adjusted EBITDA reconciliation
For the 12 Week For the 12 Week For the 12 Week For the 16 Week Trailing 52 Week Period Ended Period Ended Period Ended Period Ended Period Ended July 17, 2021 October 9, 2021 January 1, 2022 April 23, 2022 April 23, 2022 Net income $ 56,358 $ 38,852 $ 39,322 $ 85,589 $ 220,121 Income tax expense 16
Slide 23: Net debt to Adjusted EBITDA, April 23, 2022
As of April 23, 2022 Current maturities of long-term debt $ - Long-term debt 891,007 Total debt 891,007 Less: Cash and cash equivalents 205,147 Net Debt $ 685,860 Adjusted EBITDA for the Trailing Twelve Months Ended April 23, 2022 $ 494,736 Ratio of Net Debt to Trailing Twelve Month Adjusted EBITDA
Slide 24: Fiscal 2022 guidance EPS reconciliation
Range Estimate Net income per diluted common share $ 1.17 to $ 1.27 Business process improvement consulting costs 0.03 0.03 Impairment of Assets NM NM Adjusted net income per diluted common share $ 1.20 to $ 1.30 NM - not meaningful. Certain amounts may not add due to rounding.
Slide 25: Net debt to Adjusted EBITDA, January 1, 2022
As of January 1, 2022 Current maturities of long-term debt $ - Long-term debt 890,609 Total debt 890,609 Less: Cash and cash equivalents 185,871 Net Debt $ 704,738 Adjusted EBITDA for the Trailing Twelve Months Ended January 1, 2022 $ 490,861 Ratio of Net Debt to Trailing Twelve Month Adjusted EBITD
Slide 26: FY 2019 net income per diluted share reconciliation
For FY 2019 December 28, 2019 Net income per diluted common share $ 0.78 Restructuring and related impairment charges 0.08 Legal settlements and related costs 0.10 Executive retirement agreement NM Project Centennial consulting costs NM Recovery on inferior ingredients NM Acquisition costs NM Adjust