FLO Investor Fact Sheet

www.flowersfoods.com INVESTOR FACT SHEET SEPTEMBER 2016
NYSE: FLO
Business: The second-largest producer and marketer of packaged bakery foods in the U.S.
2015 sales: $3.8 billion
Nature’s Own
is the #1 bread
brand in America.
Products: Breads, buns, rolls, snack cakes, tortillas
Top company brands: Nature’s Own, Wonder, Whitewheat, Cobblestone Bread Co., Dave’s Killer Bread,
Tastykake, Mrs. Freshley’s
Top regional/franchised brands: Sunbeam, Merita, Home Pride, Butternut, Bunny, Captain John Derst’s,
Evangeline Maid, ButterKrust, Mary Jane, Betsy Ross, Roman Meal, Country Kitchen, Barowsky’s Organics
Market: Retail and foodservice. Fresh bakery foods to more than 85% of the U.S. population in the Northeast,
South, Southern Midwest, Southwest, Pacific Northwest, and California through a network of independent
distributors; frozen bakery items and snack cakes delivered to customers’ warehouses nationwide
Bakeries: 49 highly efficient bakeries in 18 states
OPERATING STRATEGIES
Grow sales Develop new/core markets
through new customers, new products,
strong brands, acquisitions
OPERATING SEGMENTS - FY2015
DIRECT STORE DELIVERY (DSD)
84% of sales
WAREHOUSE DELIVERY
16% of sales
3% Other
14%
Invest wisely Use technology and
23%
Branded
retail
Store-branded
retail
efficiencies to be the low-cost producer
of delicious bakery foods
20%
Restaurant/
institutional
Give extraordinary service Go beyond
63%
Branded retail
the expected to meet customer needs
12%
Vending
Bake smart Innovate to improve
processes, enhance quality, reduce costs,
conserve resources
Appreciate team Respect every
individual, embrace diversity, promote
career growth
37%
Foodservice
19%
Storebranded
retail
5% Other
4% Contract production
DSD SALES BY CATEGORY 2
WAREHOUSE SALES
BY CATEGORY 2 Approx. % of sales
Approx. % of sales
• $3.2 billion in sales for FY15
• Access to more than 85% of US pop.
• Fresh bakery foods delivered daily
• Motivated independent distributors
• Broad product range — breads, buns, rolls,
sandwich rounds, snack cakes, tortillas
• $
599.2 million in sales for FY15
• Direct to customers’ warehouses by frozen
and non-frozen contract carriers
• National distribution of fresh snack cakes
and frozen breads and rolls
Charts should not be used for historical comparisons since some business has been shifted between segments.
2
LONG-TERM GROWTH OBJECTIVES
Sales growth 2% to 4%
DSD TERRITORY & 49 BAKERY LOCATIONS
EBITDA margin 12% to 14%
• Higher efficiencies
• Fewer returns/stales
• Reduced carrying costs
EPS growth 8% to 10%
MARKET FACTS — FLO
Stock info updated 9/02/16
52-week price range:
High $26.40
Low $14.20
Shares outstanding: Approx.
206.8 million
Fresh/DSD
Frozen/Warehouse
6% Frozen
bread, rolls
1% Mixes
INDEPENDENT DISTRIBUTOR MODEL
• Independent distributors who
control and direct independent
businesses
• Entrepreneurial model that
motivates IDs to increase sales through outstanding service and merchandising
• More info at:
www.flowersfoods.com/IDprogram
FY2015
16%
Direct to
customers’
warehouses
18% Fresh
snack cakes
75% Fresh bread,
buns, rolls,
and tortillas
84% Direct store
delivery (DSD)
Market cap: Approx. $3.05 billion
Fiscal year end: Saturday closest
to 12/31
PRODUCT MIX
DISTRIBUTION
6%
Convenience
store
5% Other
28%
Mass
merchandiser/
discount
38%
Supermarket/
drug
23%
Foodservice
SALES CHANNELS
Pie chart data for FY 2015 - Chart data should not be used for historical comparisons since some business has shifted between segments and
because of changes in geographic definition.
A LEADING PRODUCER AND MARKETER OF PACKAGED BAKERY FOODS FOR RETAIL AND FOODSERVICE CUSTOMERS
HISTORICAL PERFORMANCE IN MILLIONS
% growth
SALES
$3,779 0.8%
15
14
0.4%
$3,749
13
$3,733
23.1%
CATEGORY
STRENGTH: $23.9 billion retail sales / $7.2 billion foodservice sales*
• Across the grocery store segment, fresh bread and rolls is the third-largest category,
in dollars, behind only carbonated beverages and milk.**
• Bread is the No. 2 grocery category in weekly true profits.***
• 98.6% of households buy fresh packaged bread.**
* Source: IRi/Technomic. Retail sales include bread, cake, and tortillas. Numbers should not be used for historical comparison because of change in IRi data.
PRIMARY BRANDS
GROSS MARGIN*
15
48.0%1
14
48.0%
47.2%
13
Excludes depreciation & amortization. See
reconcilliation to GAAP gross margin on the
company’s website, www.flowersfoods.com.
*
Breads, Buns, Rolls
Updated Q4 2015
COST OF GOODS SOLD – 2015
15.3%
Other*
27.1%
Labor
4.0% Flowers store brand
BRAND SHARE
14.9% Flowers
branded
21.9%
Other bakers’
store brands
48.6%
Ingredients
Oils/Short., 6.9%
• Nature’s Own is the #1 loaf bread brand in total U.S.**
• Nature’s Own reached $1.1 billion in retail sales in 2015.†
Flour, 45.1%
23.2%
Independent/
specialty bakers
BRAND STRENGTH*
• In the total U.S., Nature’s Own Honey Wheat is the #1 fresh packaged bread item and Nature’s Own Butterbread is the #1 White Bread loaf.**
30.0%
BBU/Sara Lee
Sweeteners, 11.6%
Other, 36.5%
6.0% Pepperidge Farm
9.0%
Packaging
*
Includes natural gas, lease expenses,
repairs/maintenance, freight
I N D U S T R Y M A R K E T S H A R E — T O TA L U S 1
IRi Total US Census Region MultiOutlet data 52 weeks ending 01/03/16;
chart data should not be used for historical comparison because of changes in
geographic definition.
1
% of sales
EBITDA*
15
$441
11.7%
14
$4291
11.4%
13
$4211
11.3%
1
*Source: IRi/Technomic **IRi †Internal Data
***Source: Willard Bishop 2014 Grocery SuperStudy
MARKET GROWTH
DSD GEOGRAPHIC EXPANSION
Current population served — approximately 85%
2005-2015 expansion — population added 156.8 million
* Reconciliation of Net Income to EBITDA from
Continuing Operations is available at
www.flowersfoods.com. Click on Investor Center and select Financial Documents.
NET INCOME
15
$1971
5.2%
14
$1921
5.1%
13
$1921
5.2%
% of sales
Acquisitions account
for $2.0 billion in revenue
over the past 10 years.
IRi South
DILUTED EPS
% change
15
$.92
2.2%
14
$.901
<1.1>%
13
$.911
31.9%
1
FLO market outside IRi South
Potential market expansion
FLO USES OF CASH
Cap ex
Dividends
Share repurchases
Pension
Acquisitions** $509.1
IN MILLIONS
$631.4
$621.3
Excluding one-time events
NOTE: 2014 was a 53-week year
• 100+ acquisitions since 1968; operational fit a priority, disciplined buyer
$238.0
11
12
excluding operating leases
• $120.4 million in dividends paid in 2015; payout ratio 61.7%
$361.6
1
• $93.8 million for cap expenditures in 2015,
13
14
15
• Authorized to repurchase up to 74.6 million shares;
through 2015 acquired approx. 60.9 million shares
for $504.1 million (average $8.27 per share)
**In addition to cash, stock and debt are used to fund acquisitions.
Contact: J.T. Rieck, Vice President IR/Financial Analysis, 229.227.2253, [email protected], Flowers Foods, 1919 Flowers Circle, Thomasville, GA 31757