Flowers Foods, Inc. · NYSE:FLO
Flowers Foods — Investor Presentation (June 2012)
23 slides from Flowers Foods's investor presentation, June 2012
Slide 1: Building Shareholder Value: The Flowers Way
6/25/2012 June 2012 1 Building Shareholder Value THE FLOWERS WAY Grow Sales Accelerate profitable growth --core markets --new markets --acquisitions --expand footprint for DSD Give Extraordinary Service Defend/expand leading market position Bake Smart Maintain high quality and execution standards In
Slide 2: Flowers Foods' Strengths and Company Overview
6/25/2012 Flowers Foods’ Strengths g Focus on bakery foods category Proven strategies Supply chain excellence Technology advantage Experienced team Company culture 3 Company Overview 8% Frozen bread, rolls 1% Mixes 13% Fresh snack cakes, o NYSE: FLO IPO 1968, NYSE since 1982 pastries o Founded in 19
Slide 3: U.S. Fresh Bakery Category and Industry Consolidation
6/25/2012 U. S. Fresh Bakery Category Total $26.8 Billion Retail outlets total sales Symphony IRI Panel for All Outlets for Calendar Year 2011 Foodservice and Outlets* +$6.3 billion in bread and $20.5 billion* rolls sales • White bread • Soft variety bread Cake • Specialty bread Fresh $4.3 billion •
Slide 4: Flowers Foods: Strong Position
6/25/2012 Flowers Foods: Strong Position 2011 Total Dollar Sales* For breads, buns, rolls, 2011 bagels, English muffins 12.4% in IRI South Market Others 22.7% FLOWERS $3.4 billion 6.1% Hostess BRANDED 7.5% Pepperidge Farm 8.6% 2007 Total Dollar Sales** FLOWERS For breads, buns, rolls, PRIVATE LABEL
Slide 5: Grow Sales – Acquisitions & New Markets
6/25/2012 Grow Sales – Acquisitions & New Markets Current population served through FLO & Tasty DSD systems – 64% 2016 goal – 75% Acquisitions since 2004 2004 Sara Lee TX bakery 2005 Royal Direct Store Delivery Systems 2006 Derst 2007 Key Mix Existing territory 2004 2008 Holsum Bakery Territory grow
Slide 6: Strong Brands: Nature's Own
6/25/2012 Strong Brands 11 Nature’s Own #1 soft variety bread brand in total U.S. #2 loaf bread in U.S. in pounds and dollars Source: IRI 12 12 6
Slide 7: Leading Fresh Bread Brands
6/25/2012 Leading Fresh Bread Brands Data for 52 weeks ended 04/15/12 Total U.S. supermarkets, drugstores, mass (excluding Walmart) Total U.S. – F/D/Mx Dollar Volume Latest 52 weeks ending April 15, 2012 Change Change Dollar Sales vs. PY % Volume Sales vs. PY % Total Arnold, Oroweat, & Brownberry $7
Slide 8: Recent New Product Successes
6/25/2012 Recent New Product Successes 2005 Whitewheat Sandwich Buns/Rolls • The first better-for-you white buns on the market • The top-selling better-for-you hamburger and hot dog bun in the South 2009 Nature’s Own 100% Whole Grain Soft Variety • Contains 11 different whole grains • Risen to the t
Slide 9: Foodservice Sales
6/25/2012 Foodservice Sales Total U.S. foodservice bread sales: $6.3 billion Flowers’ share of foodservice sales Flowers 52% 50% 46% 29% 31% 24% 25% 23% 15% 11% 10% 1% 4% 1% 2% 3% 4% 4% Loaf// Commodityy Sandwich Tortillas Dinner breads Bagels g English g Biscuits Total pan breads buns rolls & wraps
Slide 10: 5 Year Growth Objectives and Sales Growth
6/25/2012 5 Year Growth Objectives Annual Sales Growth of 5% to 10% Organic Growth Acquisitions/Mergers 3% to 5% 2% to 5% EBITDA Margin of 11% to 13% EPS double digits 19 Sales Growth 2012 Guidance – 7% to 9% growth CAGR: 7.99% 2007 - 2011 CAGR In billions $3 Price/mix 4.25% $2.77 Volume $2 60 $2.60
Slide 11: EBITDA and Gross Margin
6/25/2012 EBITDA* CAGR: 10.0% 2007 - 2011 In millions $ 300 $287.3 $291.0 $294.3*** 250 • Focus on $256 0 $256.0 EBITDA 200 expansion $210.8 150 • Grow EBITDA dollars 100 $89.0 % Growth 15.4% 21.5% 12.2% 1.3% 1.1% <0.6>% **** • Improve 50 EBITDA % of Sales 10.3% 10.6% 11.0% 11.3% 10.6% 9.9% margins
Slide 12: Efficiencies and Cost of Goods Sold Components
6/25/2012 Efficiencies and Productivity Net Sales / Employee In thousands $300 $296 $295 $292 290 Production Efficiency % $274 280 96 270 $261 260 93 7% 93.7% 250 94 240 92.3% 92 2007 2008* 2009 2010 2011 91.0% 90.5% 90 87.9% Net Income / Employee 88 87.2% In thousands $ 20 $15 $16 86 $14 $14** 15 $
Slide 13: Selling, Distribution & Admin Costs and Earnings
6/25/2012 Selling, Distribution, & Admin Costs % of sales 40.0 38 7% 38.7% • Leverage revenue 37.1% expansion 36.8% 36.4% 36.4%** 35.6% • Control growth to low single digits • Leverage technology 30.0 2007 2008* 2009 2010 2011 Q1 2012 * 53-week year **Excluding one-time charges 25 Earnings Income Di
Slide 14: Strong Cash Flow and Allocation of Cash Flow
6/25/2012 Strong Cash Flow Total Expenditures 2007 to 2011 In millions Uses of Cash (In millions) $ 400 Capital ex $361.6 $425.2 $354.2 350 Acquisitions 300 $360.1 250 Dividends $209.4 $307.5 $199.8 200 $166.1 Share repurchases 150 $183.7 100 Pension $14.6 50 Free Cash Flow** Flow 0 (In millions) 20
Slide 15: Debt and Bakery Investments
6/25/2012 Debt (000 omitted) 2007 2008 2009 2010 2011 Debt $29,428 $286,417 $251,668 $127,302 $326,174 Interest Expense $3 450 $3,450 $6 137 $6,137 $11 587 $11,587 $8 164 $8,164 $10 172 $10,172 Leverage** 0.1X 1.1X 0.9X 0.4X 1.1X Interest Coverage*** 61.1X 41.7X 24.8X 35.6X 27.9X Debt Maturities* 20
Slide 16: Return on Invested Capital and Dividends
6/25/2012 Return on Invested Capital % 15 2007 English muffin line 15 14.7% Montgomery, AL 2009 14 Bardstown, KY 14.0% 14.4% $55.5 million 14 13.6% 2010 6 new lines added (1 bun, 2 sandwich round, & 3 cake) 13 13.0%** 2010 to 2011 13 Shipping automation implemented at 13 bakeries 12 2007 2008* 2009
Slide 17: Total Shareholder Return and 2001–2011 Growth
6/25/2012 Total Shareholder Return Comparison of cumulative total return – 12/30/06 to 12/31/11 $200 $150 $100 $50 $0 12/30/06 12/29/07 01/03/09 01/02/10 01/01/11 12/31/11 Flowers Foods S&P 500 Index S&P 500 Packaged Foods S&P MidCap 400 Index & Meats Index 33 2001 – 2011 Growth 2001 2011 CAGR Sales
Slide 18: 2012 Outlook and FLO Growth
6/25/2012 2012 Outlook Sales growth 7% to 9% Gross profit margin Forecast flat • Input costs still volatile Tax rate Approximately 35.5% to 36.0% • Continued economic EPS growth 3.5% to 8.0%* pressures • Consumer confidence Shares outstanding 137.0 million • Industry consolidation— Capital expenditu
Slide 19: Investment Highlights
6/25/2012 Investment Highlights Category • Focused on $26.8 fresh bakery foods market Market Position • #2 baking company in a consolidating industry; FLO has access to 61% of U.S. population through DSD systems Leadership • Dedicated and experienced management team with average tenure of 29 years B
Slide 20: Pending Acquisition – Lepage Bakeries: Strategic Rationale
6/25/2012 Pending Acquisition--Lepage Bakeries (announced May 31, 2012) Strategic rationale As a best-in-class independent baking company, Lepage enhances Flowers Foods’ position as the 2nd largest baking company in U.S. • Expands Flowers’’ presence to New England and parts off New York, adding acce
Slide 21: Strong fit with Flowers' DSD Segment
6/25/2012 Lepage Bakeries Acquisition Strong fit with Flowers’ DSD Segment • Established DSD platform with 253 company-owned routes serving key retail and foodservice customers in New England and parts of New York • Offers new markets for Nature’s Own and Tastykake; expansion of Barowsky’s organics
Slide 22: Lepage Financial Highlights and Forward-looking Statement
6/25/2012 Lepage Bakeries Acquisition Financial Highlights • Acquisition for $370 million--$320 million in cash and $50 million in FLO stock --8.7x Lepage’s adjusted 2011 EBITDA, net of certain tax benefits • Expected to contribute $.03 to $.05 to EPS in 2012, excluding transaction costs and $.08 to
Slide 23: Investor Relations Contacts
6/25/2012 Flowers Foods Investor Relations Contacts: Marta Jones Turner Executive Vice President of Corporate Relations Phone: 229.227.2348 E-mail: [email protected] Libby Marshall Investor Relations Specialist Phone: 229 229.227.2317 227 2317 E-mail: [email protected] 45 4