Flowers Foods, Inc. · NYSE:FLO
Flowers Foods — Q4 2021 Earnings Presentation
26 slides from Flowers Foods's earnings presentation, Feb 10, 2022
Slide 1: Fourth Quarter 2021 Review
FOURTH QUARTER 2021 REVIEW February 10, 2022
Slide 2: Regarding Forward-Looking Statements
REGARDING 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 forwar
Slide 3: Key Messages
KEY MESSAGES • Sales increased in 4Q’21 and FY’21, excluding the extra week in prior year period • Investments in innovation and marketing driving market share gains for leading brands • Implemented additional price increases in January to mitigate impact of inflation in 2022; consumer demand relati
Slide 4: Q4 2021 Financial Highlights
Q4 2021 FINANCIAL HIGHLIGHTS Sales decreased due to impact of 53rd week in prior year Adjusted EBITDA decreased due to lower sales, cost and lower volume; excluding 53rd week, sales increased inflation, prior year reimbursement for indirect losses 3.8% due to price increases to mitigate inflation, p
Slide 5: Q4 2021 Comparison to Pre-Pandemic Results
Q4 2021 COMPARISON TO PRE-PANDEMIC RESULTS Sales increased due to higher demand for branded retail Price increases to mitigate inflation and mix shift to products caused by the pandemic and internal growth branded retail products drove EBITDA increase initiatives COMPONENTS OF Q4’21 SALES GROWTH VS
Slide 6: Q4 2021 Financial Review
Q4 2021 FINANCIAL REVIEW NET SALES CASH FLOWS — FY’21 $983.5M -3.9% v PY Cash from Ops $344.6M Dividends $175.9M • Price/Mix +6.2%; Volume -2.4%; PY 53rd Week -7.7% Capex • Impact of extra week in prior year, and lower volume; excluding extra week, sales increased 3.8% due to price increases to miti
Slide 7: Fiscal 2022 Guidance
FISCAL 2022 GUIDANCE (Provided February 10, 2022) SALES ADJ. EPS1 Fiscal 2022 7.6% to $1.25 to Considerations 8.4% $1.35 • Ability to mitigate inflation • Demand elasticity OTHER • Persistence of pandemic and impact on mix Depreciation & amortization Effective tax rate • Promotional environment $135
Slide 8: Long-Term Growth Target Scorecard
LONG-TERM GROWTH TARGET SCORECARD Continuing to exceed financial targets (1) Off FY’19 base (2) FY’20 was a 53-week year (3) Implied return using FY’22 guidance midpoint (4) No reconciliation of the forecasted range for adjusted EBITDA or adjusted EPS is included in this presentation because we are
Slide 9: Innovation in Action
INNOVATION IN ACTION Agile innovation team bringing new products to market 9
Slide 10: Flowers' Market Share
FLOWERS’ MARKET SHARE FLO Bread Share FLO Cake Share 18.0 17.7 18.0 17.4 17.5 17.7 17.1 17.1 16.3 7.3 7.6 7.1 7.2 7.1 7.3 7.2 7.1 7.0 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Source: Flowers Custom Database – IRi Total US Mulo + C Store 10
Slide 11: Category Review: Flowers Fresh Packaged Breads
CATEGORY REVIEW FLOWERS FRESH PACKAGED BREADS Dollar Sales % Chg Unit Sales % Chg 21.3% 19.3% 18.4% 16.4% 14.7% 14.4% 13.4% 10.9% 3.7% 3.6% 2.7% -0.1% -2.0% -1.9% -2.8% -5.1% -5.8% -9.6% Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Source: Flowers Custom Database – IRi Tot
Slide 12: Category Review: Flowers Commercial Cake
CATEGORY REVIEW FLOWERS COMMERCIAL CAKE Dollar Sales % Chg Unit Sales % Chg 12.0% 9.9% 7.6% 5.3% 4.7% 4.8% 4.1% 1.2% 0.6% -0.1% -1.7% -1.3% -1.7% -2.1% -3.7% -4.3% -5.6% -6.7% Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Source: Flowers Custom Database – IRi Total US Mulo
Slide 13: Organic Category Sales
ORGANIC CATEGORY SALES ORGANIC FRESH PACKAGED BREADS X FLO FLOWERS ORGANIC FLOWERS SHARE OF ORGANIC 90.0 $1,040.0 71.3 $960.0 68.7 65.3 70.0 60.9 $880.0 53.2 $800.0 50.0 43.5 $720.0 $640.0 30.0 $655.3 $560.0 $593.5 $480.0 $468.6 10.0 $383.1 $400.0 $270.7 $320.0 (10.0) $159.0 $240.0 $160.0 (30.0) $23
Slide 14: Gluten-Free Category Sales
GLUTEN-FREE CATEGORY SALES GLUTEN FREE FRESH PACKAGED BREADS XFLO FLOWERS GLUTEN FREE FLOWERS SHARE OF GLUTEN FREE $400.0 40.0 32.5 28.9 30.0 $350.0 21.6 20.0 $300.0 12.4 $93.1 $107.7 7.2 10.0 5.4 $250.0 $32.6 $61.1 $17.2 - $11.9 $200.0 (10.0) $150.0 (20.0) $221.0 $229.8 $222.3 $229.2 $224.0 $100.0
Slide 15: Branded Products Continue Share Gains
BRANDED PRODUCTS CONTINUE SHARE GAINS FRESH PACKAGED BREAD BRANDED VS. STORE BRAND MARKET SHARE 79.7 80.8 75.8 76.2 76.9 75.2 24.8 24.2 23.8 23.1 20.3 19.2 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Branded Store Branded Source: Flowers Custom Database – IRi Total US Mulo + C Store 15
Slide 16: 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 17: Earnings Per Share to Adjusted Earnings Per Share
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF EARNINGS PER SHARE TO ADJUSTED EARNINGS PER SHARE For the 12 Week For the 13 Week Period Ended Period Ended January 1, 2022 January 2, 2021 Net income per diluted common share $ 0.18 $ 0.26 Project Centennial consulting costs — 0.01 Los
Slide 18: Gross Margin to Gross Margin Excluding Depreciation and Amortization
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF GROSS MARGIN TO GROSS MARGIN EXCLUDING DEPRECIATION AND AMORTIZATION (000S OMITTED) For the 12 Week For the 13 Week Period Ended Period Ended January 1, 2022 January 2, 2021 Sales $ 983,490 $ 1,023,036 Materials, supplies, labor and oth
Slide 19: SD&A Expenses to Adjusted SD&A
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF SELLING, DISTRIBUTION AND ADMINISTRATIVE EXPENSES TO ADJUSTED SD&A (000S OMITTED) For the 12 Week For the 13 Week Period Ended Period Ended January 1, 2022 January 2, 2021 Selling, distribution and administrative expenses $ 383,542 $ 38
Slide 20: Net Income to EBITDA and Adjusted EBITDA
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA (000S OMITTED) For the 16 Week For the 12 Week For the 12 Week For the 12 Week Trailing 52 Week Period Ended Period Ended Period Ended Period Ended Period Ended April 24, 2021 July 17, 2021 Octob
Slide 21: Income Tax Expense to Adjusted Income Tax Expense
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF INCOME TAX EXPENSE TO ADJUSTED INCOME TAX EXPENSE (000S OMITTED) For the 12 Week For the 13 Week Period Ended Period Ended January 1, 2022 January 2, 2021 Income tax expense $ 12,720 $ 18,806 Tax impact of: Project Centennial consulting
Slide 22: Net Income to Adjusted Net Income
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME (000S OMITTED) For the 12 Week For the 13 Week Period Ended Period Ended January 1, 2022 January 2, 2021 Net Income $ 39,322 $ 55,824 Project Centennial consulting costs - 1,128 ERP road mapping consult
Slide 23: Debt to Net Debt and Net Debt to Adjusted EBITDA Ratio
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 1, 2022 Current maturities of long-term debt $ - Long-term debt 890,609 Total debt 890,609 Less: Cash and cash equi
Slide 24: Debt to Net Debt and Net Debt to Adjusted EBITDA Ratio
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 October 9, 2021 Current maturities of long-term debt $ - Long-term debt 890,180 Total debt 890,180 Less: Cash and cash equi
Slide 25: Net Income to EBITDA and Adjusted EBITDA
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA (000S OMITTED) For the 12 Week For the 13 Week Period Ended Period Ended January 1, 2022 January 2, 2021 Net income $ 39,322 $ 55,824 Income tax expense 12,720 18,806 Interest expense, net 1,419
Slide 26: Net Income to EBITDA and Adjusted EBITDA
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA (000S OMITTED) For the 13 Week For the 12 Week Period Ended Period Ended January 2, 2021 December 28, 2019 Net income $ 55,824 $ 2,219 Income tax expense (benefit) 18,806 (1,047) Interest expense