Flowers Foods, Inc. · NYSE:FLO
Flowers Foods — Q1 2024 Earnings Presentation
30 slides from Flowers Foods's earnings presentation, May 16, 2024
Slide 1: First Quarter 2024 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 ¢ Portfolio strategy drives solid 1Q’24 results as momentum built throughout the quarter * Volume trajectory continued to improve—branded retail volumes rose 0.3% and outperformed the bread category ¢ Brand strength, market execution, and innovation drove strong brand performance in cha
Slide 4: Q1 2024 Financial Highlights
Q1 2024 FINANCIAL HIGHLIGHTS Sales grew due to prior year price increases to mitigate inflation Adjusted EBITDA increased due to higher sales and gross margin, and the acquisition contribution, partly offset by lower volume partly offset by higher labor and repairs and maintenance expense Net income
Slide 5: Q1 2024 Financial Review
Q1 2024 FINANCIAL REVIEW NET SALES CASH FLOWS — 1Q’24 © Cash from Ops Dividends $1.577B +22% vy $105.1M $51.1M + Price/Mix +3.1%! + Volume -0.8%2 Capex + Papa Pita acquisition +0.5% $33.3M + Prior year price increases to mitigate inflation and acquisition contribution, partly offset by lower volume
Slide 6: Fiscal 2024 Guidance
FISCAL 2024 GUIDANCE (Provided May 16, 2024) SALES ADJ. EBITDA' ADJ. DIL. EPS? Fiscal 2024 Considerations Consumer resiliency Promotional environment OTHER Ability to mitigate cost inflation Depreciation & amortization Effective tax rate Business rationalizations Timing and effectiveness of cost sav
Slide 7: Guidance Drivers
GUIDANCE DRIVERS P| — 1.20-1.30 1.20 FY'23 EBITDA D&A Net Int Exp Inc Tax Exp FY'24 + Pricing actions — Higher capital - Increased debt from | - Higher tax rate due employed from PP acquisition and to fewer discrete + Share gains acquisition and ERP CA transition benefits + innovation — Lower intere
Slide 8: Long-Term Growth Target Scorecard
LONG-TERM GROWTH TARGET SCORECARD . Sales 1-2% 6.4% 2.5% 5.2% 5.4% 4.5% Adj -6% 23.4% 7.8% 5.9% 4.4% 5.0%4 EBITDA Asie. 7-9% 36.5% 13.7% 9.8% 5.7% 5.4%® ()__ Off FY'19 base. No reconciliation of the forecasted range for adjusted diluted EPS to diluted EPS and adjusted EBITDA to net income is include
Slide 9: Fresh Packaged Bread Category
FRESH PACKAGED BREAD CATEGORY Bread category outperforming overall food CATEGORY % UNIT CHANGE (Y/Y) "Fresh packaged bread "Overall food 0.0% 1.5% i - 1.7% 1.9% -3.0% -3.5% 2.1% 2.9% 3.6% -3.5% 10°23 2023 3Q'23 4Q'23 10°24 Source: Flowers Custom Database - Circana Total US Mulo + C Store Due to a ch
Slide 10: Private Label Momentum Fading
PRIVATE LABEL MOMENTUM FADING CHANGE IN PRIVATE LABEL UNIT SHARE (Y/Y) 1.0 0.8 0.7 0.6 a 1Q'23 2Q'23 3Q'23 4Q'23 10'24 Source: Flowers Custom Database - Circana Total US Mulo + C Store Due to a change in methodology and sources, data provided previously by Circana may not be comparable to current da
Slide 11: Away-From-Home
Away-From-Home • • • • • • • • • • • • • • • •
Slide 12: Improving Volume Trends
IMPROVING VOLUME TRENDS Branded retail business inflecting positively FLO Volume % Change (Y/Y ) TOTAL COMPANY BRANDED RETAIL OTHER 1Q'23 2Q'23 3Q'23 4Q'23 10'24 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24 03% a = | -0.3% -0.8% "LI% 15% 2.4% 2.2% “41% 4.4% 6.1% 6.3% -73% “7.4% 8.2% 1
Slide 13: Branded Dollar Share
Branded Dollar Share Store Branded Dollar Share 79.0 27.0 25.5 78.1 78.0 77.6 77.1 25.0 77.0 23.9 24.0 22.9 76.1 76.0 76.0 22.4 23.0 21.9 75.0 74.5 21.0 74.0 73.0 19.0 72.0 17.0 71.0 70.0 15.0 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 L52 WE 04-21-24
Slide 14: Flowers' Market Share
FLOWERS’ MARKET SHARE =FLO Bread Dollar Share = = FLO Cake Dollar Share 74 17.3 17.0 16.2 16.7 16.8 16.3 6.9 ; : | | : | | | Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Source: Flowers Custom Database - Circana Total US Muio + C Store Due to a change in methodology and sources, data prov
Slide 15: Flowers Fresh Packaged Breads
FLOWERS FRESH PACKAGED BREADS mDollar Sales % Chg == Unit Sales % Chg 11.0% 9.6% 9.8% 7.1% 5.0% 43% 2.9% zs 2.5% L| 0.1% 1.9% -2.3% -2.1% -3.0% “3.6% -4.5% “1.8% Q2 2022 @3 2022 Q4 2022 Q1 2023 Q2 2023 @3 2023 4 2023 Q1 2024 Source: Flowers Custom Database - Circana Total US Mulo + C Store 15 Due to
Slide 16: Flowers Commercial Cake
FLOWERS COMMERCIAL CAKE Dollar Sales % Chg == Unit Sales % Chg 8.1% 46% 17% =z = a | 1.7% “13% 1.6% sax "39% 30% -5.1% 74% 9.4% 13.7% -15.0% -16.5% Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Source: Flowers Custom Database - Circana Total US Mulo + C Store 16 Due to a change in
Slide 17: Organic Category Sales
ORGANIC CATEGORY SALES mms FLOWERS ORGANICS FLOWERS SHARE OF ORGANICS mmm ORGANIC FRESH PACKAGED BREADS xFLO 72.6 72.7 70.8 68.8 65.9 62.2 $816.5 a $730.1 g $596.0 $657.9 = $469.0 $284.9 $308.0 $297.9 $300.7 $306.8 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 L52 WE 04-21-24 17 Source: Flowers Custom Dat
Slide 18: Gluten-Free Category Sales
GLUTEN-FREE CATEGORY SALES mmm GLUTEN FREE FPB XFLO = mm FLOWERS GF 31.5 ——FLOWERS SHARE OF GF 34.4 33.1 33.3 28.2 21.2 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 L52 WE 04-21-24 18
Slide 19: 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 20: Adjusted diluted EPS reconciliation
For the 16-Week For the 16-Week Period Ended Period Ended 20-Apr-24 22-Apr-23 Net income per diluted common share $ 0.34 $ 0.33 Business process improvement costs 0.01 0.02 Impairment of assets 0.01 — Restructuring charges NM 0.01 Restructuring-related implementation costs NM — Acquisition-related c
Slide 21: Gross margin reconciliation, 16 weeks ended April 20, 2024
For the 16 Week For the 16 Week Period Ended Period Ended April 20, 2024 April 22, 2023 Sales $ 1,576,818 $ 1,534,493 Materials, supplies, labor and other production costs (exclusive of depreciation and amortization) 797,186 800,852 Gross Margin excluding depreciation and amortization 779,632 733,64
Slide 22: Adjusted SD&A reconciliation
For the 16 Week For the 16 Week Period Ended Period Ended April 20, 2024 April 22, 2023 Selling, distribution and administrative expenses $ 625,251 $ 591,943 Business process improvement costs (3,683) (6,219) Acquisition-related costs - (3,223) Restructuring-related implementation costs (1,344) - Ad
Slide 23: EBITDA and adjusted EBITDA reconciliation
For the 16 Week For the 16 Week Period Ended Period Ended April 20, 2024 April 22, 2023 Net income $ 73,043 $ 70,710 Income tax expense 23,052 19,255 Interest expense, net 5,611 3,886 Depreciation and amortization 48,235 43,735 EBITDA 149,941 137,586 Other pension benefit (158) (83) Business process
Slide 24: Adjusted income tax expense reconciliation
For the 16 Week For the 16 Week Period Ended Period Ended April 20, 2024 April 22, 2023 Income tax expense $ 23,052 $ 19,255 Tax impact of: Business process improvement costs 921 1,555 Acquisition-related costs - 806 Restructuring charges 150 1,049 Impairment of assets 1,000 - Restructuring-related
Slide 25: Adjusted net income reconciliation
For the 16 Week For the 16 Week Period Ended Period Ended April 20, 2024 April 22, 2023 Net income $ 73,043 $ 70,710 Business process improvement costs 2,762 4,664 Acquisition-related costs - 2,417 Restructuring charges 448 3,146 Impairment of assets 3,000 - Restructuring-related implementation cost
Slide 26: 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 15, 2023 October 7, 2023 December 30, 2023 April 20, 2024 April 20, 2024 Net income (loss) $ 63,760 $ (46,730) $ 35,676 $ 73,043 $ 125,749 Income tax
Slide 27: Net debt to adjusted EBITDA ratio
As of April 20, 2024 Current maturities of long-term debt $ - Long-term debt 1,043,543 Total debt 1,043,543 Less: Cash and cash equivalents 15,818 Net Debt $ 1,027,725 Adjusted EBITDA for the Trailing Twelve Months Ended April 20, 2024 $ 510,006 Ratio of Net Debt to Trailing Twelve Month Adjusted EB
Slide 28: Fiscal 2024 adjusted EPS guidance reconciliation
Net income per diluted common share $ 1.16 to $ 1.26 Business process improvement costs 0.01 0.01 Impairment of assets 0.01 0.01 Restructuring charges NM NM Restructuring-related implementation costs NM NM Adjusted net income per diluted common share $ 1.20 to $ 1.30 NM – Not meaningful. Certain amo
Slide 29: FY 2019 adjusted EPS reconciliation
For the 52-Week Period Ended 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 Acquisitio
Slide 30: FY 2019 adjusted EBITDA reconciliation
For the 52 Week Period Ended December 28, 2019 Net income $ 164,538 Income tax expense 47,545 Interest expense, net 11,097 Depreciation and amortization 144,228 EBITDA 367,408 Other pension cost 2,248 Project Centennial consulting costs 784 Acquisition-related costs 22 Restructuring and related impa