INVESTOR FACT SHEET
|
JUNE 2017
|
NYSE: FLO
|
Market Cap: $3.9B
Business: The second-largest producer and marketer of packaged bakery foods in the U.S. 2016 sales: $3.9 billion Bakeries: 49 efficient
bakeries in 18 states Employees: Approx. 10,800 Products: Breads, buns, rolls, snack cakes, tortillas Top brands: Nature’s Own, Wonder,
Dave’s Killer Bread, Cobblestone Bread Co., Tastykake, Mrs. Freshley’s Market: Retail and foodservice. Fresh bakery foods to +85% of the
U.S. population through a network of independent distributors; frozen bakery items and snack cakes to customers’ warehouses nationwide.
VISION
FY 2016 SNAPSHOT
6% Frozen
breads, rolls
5%
Convenience store
1% Mixes1
16%
Direct to
customers’
warehouses
17% Fresh
snack cakes
76% Fresh breads,
buns, rolls,
and tortillas
23%
Foodservice
30%
Mass
merchandiser/
discount
84% Direct store
delivery (DSD)
PRODUCT MIX
5% Other2
DISTRIBUTION
37%
Supermarket/
Drug
SALES CHANNELS
Mix business sold 1/17. 2Thrift stores, vending, all other
Chart data should not be used for historical comparisons since some business has shifted between segments and because of changes
in geographic definition.
1
49 BAKERIES & FRESH/FROZEN DISTRIBUTION
COMPANY STRENGTHS
• Strong brands and a team committed
to transforming the company
• Clear objectives to grow sales, expand
margins, and deliver shareholder value
• Executing today on initiatives to
reinvigorate the core, obtain fuel
for growth, and improve financial
performance
Fresh/DSD
Frozen/Warehouse
• Designing an operating model to
deliver sustainable, long-term growth
As America’s premier baker, we craft
foods that make people smile. We are
driven by a passion to boldly grow our
business through inspiring leadership,
teamwork, and creativity.
VALUE CREATION STRATEGIES
Reinvigorate core business Align brands
to consumers, invest in brand growth and
innovation, support distributor partners
Capitalize on product adjacencies Build
leading foodservice position, grow
in-store bakery, seek opportunities in
healthy snacking
Reduce costs to fuel growth Simplify
and streamline operating model; better
leverage national footprint
Invest in capabilities & growth Enhance
financial planning and analyst capabilities,
performance management system
LONG-TERM GOALS
Sales growth: 2% - 4%
EBITDA margin: 13% - 14%
EPS growth:
8% - 10%
BRAND STRENGTH
BRAND SHARE, TOTAL U.S.
Breads, Buns, Rolls
4.1% Flowers store brand
14.8% Flowers
branded
• In total U.S., Nature’s Own Honey Wheat
is the #1 fresh packaged bread item and
Nature’s Own Butterbread is the #1 white
loaf item.
CATEGORY STRENGTH
$28.0 billion retail sales*
$7.4 billion foodservice sales**
• Wonder, nearing the century mark, has
98% consumer awareness in the U.S.
20.9%
Other bakers’
store brands
23.8%
Independent/
specialty bakers
• Nature’s Own is the #1 loaf bread brand
in total U.S. with $1.0 billion in retail sales
in 2016.
30.4%
BBU/Sara Lee
• Dave’s Killer Bread is the #1 organic bread
brand in total U.S.
• CBC breads and buns make every day
eating occasions more special.
• The iconic snack cake brand from Philly is
capturing new fans around the country.
6.0% Pepperidge Farm
• Award-winning Mrs. Freshley’s offers a
wide variety of snack cakes sold through
warehouse distribution nationwide.
• Regional white bread brands have been
family favorites for generations.
IRI Flowers Custom Database Total US MultiOutlet
– 52 weeks ending 01/01/17. Flowers Private Label
Sales SDW. Chart data should not be used
for historical comparison because of changes
in geographic definition.
• Across the grocery store segment, fresh
bread and rolls is the third-largest category,
in dollars, behind only carbonated
beverages and beer/ale/alcoholic cider.***
• Bread is the No. 1 grocery category in
weekly true profits.****
• 98.6% of households buy fresh packaged
bread.***
*IRI Custom Database – 52 weeks ending 01/01/17
**Technomic FY2016
***IRI Custom Database – 52 weeks ending 12/25/16
****Willard Bishop Super Study 2015 Kroger/Safeway/Ahold
IRI Flowers Custom Database – 52 weeks ending 01/01/17
Numbers should not be used for historical comparison because
of change in IRI data.
FLOWERS FOODS’ OPERATING SEGMENTS
SALES
in millions
DIRECT STORE DELIVERY (DSD) — 84% OF SALES
DSD SALES BY CATEGORY1
Approx. % of FY16 sales
14%
Store-branded
retail
16
15
•Broad product range—breads, buns, rolls,
snack cakes, tortillas
•$3.3 billion in sales for FY16
•Access to more than 85% of US population
•Fresh bakery foods delivered daily
•Motivated independent distributor partners
64%
Branded retail
$3,779
14
0.8%
$3,749
0.4%
GROSS MARGIN*
48.4%
16
22%
Restaurant/
institutional/
other
% growth
$3,927 3.9%
INDEPENDENT DISTRIBUTOR (ID) MODEL
•Independent distributors who control and
direct independent businesses
•Entrepreneurial model that motivates IDs to
increase sales through outstanding service
and merchandising
•Approximately 5,100 territories
•More info at flowersfoods.com/IDprogram
15
48.0%1
14
48.0%
COMPONENTS OF ADJ. EBITDA*
% of FY16 Sales
11.4%
Adj.
EBITDA
15.2%
All Other2
28.9%
Ingredients
+ Packaging
21.8%
22.7%
Shipping +
Distribution Conversion1
WAREHOUSE DELIVERY — 16% OF SALES
Includes direct labor & indirect manufacturing expenses
Includes selling & administrative expenses
1
2
•
Fresh snack cakes, frozen breads and rolls
•
$642.7 million in sales for FY16
•
National distribution
•
Direct to customers’ warehouses by frozen
and non-frozen contract carriers
WAREHOUSE SALES BY CATEGORY1
Approx. % of FY16 sales
ADJUSTED EBITDA*
26%
Branded
retail
18%
Storebranded
retail
1
15
37%
Foodservice
11%
Vending
14
4% Other
4% Contract production
16
15
FY16
$360.1
FY15
$621.3
FY14
$238.0
FY13
$631.4
11.4%
11.7%
$429
11.4%
1
% of sales
in thousands
14
FY12
$4411
ADJUSTED NET INCOME*
CAPITAL ALLOCATION in millions
*In addition to cash,
stock and debt are used
to fund acquisitions.
$447
1
16
Segment charts should not be used for historical comparisons since some business has been shifted between segments.
Cap ex
Dividends
Share repurchases
Pension
Acquisitions*
% margin
in thousands
$1911
$1971 5.2%
$1921
ADJUSTED DILUTED EPS*
5.1%
% change
16
1
$.91
<1.1>%
15
$.921
2.2%
14
$509.1
4.9%
$.90
1
<1.1>%
Excluding one-time events; 2014 was a 53-week year.
*Reconciliations of non-GAAP measures are available
at flowersfoods.com. Click on Investor Center and select
Financial Documents.
1
DIVIDENDS PER SHARE 2003 - 2016
$0.70
$0.60
$0.50
$0.40
$0.30
$0.20
$0.10
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Contact: J.T. Rieck, VP IR/Financial Analysis, 229.227.2253, [email protected], Flowers Foods, 1919 Flowers Cir., Thomasville, GA 31757, flowersfoods.com