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THE FLOWERS WAY
November 2008
THE FLOWERS WAY
INVEST WISELYBAKE SMARTMANAGE RESOURCESINNOVATEAPPRECIATE TEAMDELIVER VALUESERVE THE MARKETGROW
PRODUCT MIX
76%Fresh bread,buns, rolls
15%Fresh snack
cakes, pastries
9% Frozen
bread, rolls
81% Direct storedelivery (DSD)
19% Direct tocustomers’
warehouses
DISTRIBUTION CHANNELS
WE UNDERSTAND OUR CUSTOMERS
72%Retail
28%Foodservice
OUR STRATEGY IS WORKING
CORE MARKETS – IRI data for calendar year 2007Supermarket/Drug only (does not include Mass)
24%Flowersbranded
11%Flowers private label
5%Bimbo
7%Pepperidge
Farm
6%IBC
9%Weston
11%Sara Lee
14%Otherprivate label
13%Others
MARKET CAPITALIZATION -- FLO
0
0.5
1
1.5
2
2.5
2003 2004 2005 2006 2007 2008
In billions
$
$1.662
$1.365
$1.144
($27.33 stock price)
$1.632
$2.198
2003-2007 CAGR: 17.73%
YTD
21.8% <1.9%> 34.7%19.3%% increaseor decrease
$2.535
THE FLOWERS WAY
BUILDING VALUE FOR SHAREHOLDERS2001 $1.24 billion to shareholders on sale of Keebler;
Spin-off of Flowers Foods ($400 million market cap)
Nov. 13, 2008 $2.1 billion in market cap created since spin-off
2008 and beyond Build additional shareholder value through operational and financial strengths
STRATEGY
BAKE SMART THE FLOWERS WAY
Efficiency…Quality…Innovation…New Products…Efficiency…Quality…
BAKING SMART
39 POWERFUL BAKERIES
$480 million invested in our bakeries since 2001
FLOWERS FOODS MARKET/BAKERY LOCATIONS
DSD territory $1.65 billion in sales (2007)
Warehouse delivery $387 million in sales (2007)
BAKING SMART
THE FLOWERS WAY
RECENT ACQUISITIONS
Holsum Bakeries• Annual sales of $150 million• Arizona-based with two bakeries/fresh breads and rolls• Independent distributors serve Arizona, New Mexico, Nevada
and Southern California• Completed on August 11, 2008
ButterKrust Bakery• Annual sales of $70 million• One bakery in Lakeland, Florida• Serves customers throughout Florida• Completed on August 4, 2008
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EXPANSION OF DSD TERRITORY*
Growth since 2004
Current territory
GROWING STRONG
*Flowers’ fresh breads
Population served with DSD143 million
STRATEGY
INNOVATE THE FLOWERS WAY
Processes…Bakeries…Delivery Systems…Information…Products…Processes...
Information TechnologyPARTNERING WITH CUSTOMERS
Efficient Bakeries• New capacity—strategically located• Innovations• Technology
Distribution Strengths• DSD/motivated distributors• National reach
-Frozen foodservice-Snack cakes
BAKING SMART
THE FLOWERS WAY
STRATEGYSERVE THE MARKET
Customers…Consumers…Extreme Service…Right Products…Right Locations
WE UNDERSTAND CONSUMERS’ NEEDS
STRATEGY
PRODUCT INNOVATION
$750 million in annual sales, up 18% YTD#1 bread brand in the US#1 selling soft variety brand in the U.S.Honey wheat is #1 selling loaf in the IRI South Market100% Whole Wheat is #2 loaf in the IRI South Market
SOFT VARIETY BREAD
Sources: Category Numbers IRI; Brand internal SDW
SUPER PREMIUM BREAD
Sources: Category Numbers IRI; Brand internal SDW
$37 million in annual salesPositive consumer and retailer acceptanceBetter-for-you position with all-natural and made with organic flour
Using brand strength to grow share in the breakfast category
Developed and introduced new products
Leveraging nutritional position as a point of difference
BREAKFAST SELECTIONS
First healthier white bread on market$135 million in sales Meets market’s demand for healthier white bread
WHITE BREAD
Specialty rolls to make meal occasions special
Taking foodservice trends to supermarket
SPECIALTY SANDWICH ROLLS
SNACK CAKES
100-calorie snacks
Traditional snacks
BRAND STRENGTH
MARKETING STRATEGY
THE FLOWERS WAY
STRATEGYDELIVER VALUE
SALESEARNINGSMARKET CAPDIVIDENDS
FINANCIAL REPORT
0
0.5
1
1.5
2
2003* 2004 2005 2006 2007 2008*
6.8%
$
$1.55
$1.89
$1.72
10.6% 10.1%
In billions
$1.45
9.4%% Annualgrowth
$2.42 b - $2.43 b
18.8% - 19.3%
Projected
$2.04
7.8%
* 53-week year
FLOWERS FOODS SALES GROWTH
CAGR: 8.91%
Actual YTD$1.79 b+14.7%
Note: Includes recent acquisitionsCAGR excludes 2008 projected
0
0.5
1
1.5
2
2003* 2004 2005 2006 2007
$
In billions
AcquisitionGrowth
3.2%0.8%
0.4%
3.3%0.4%
10.6% 10.1% 7.8%6.8%9.4%% Growth
6.2%
6.0%10.2%
6.8%7.4%
OrganicGrowth
SALES
* 53-week year
EBITDA
0
40
80
120
160
200
240
2003* 2004 2005 2006 2007
In millions
$
$131.8 $139.0
$158.6
$182.7
9.0% 9.2%9.1%% of Sales 9.7%
5.5% 14.1%9.4%% Growth 15.2%
10.3%
15.4%
$210.8
* 53-week year
CAGR: 12.46%
INCOME FROM CONTINUING OPERATIONS
0
20
40
60
80
100
2003* 2004 2005 2006 2007 2008*
In millions
$
$62.9
$54.3$52.8
$74.9
3.5% 3.7% 4.0%3.6%% of Sales 4.6%
$113.6 m to $117.3 m
4.7% - 4.8%
Projected
$94.6
CAGR: 15.69%
* 53-week year
Actual YTD$87.1 m4.9% of sales
15.8% 19.1%2.8%% Growth 26.4%21.4%
Note: Includes recent acquisitionsCAGR does not include 2008 projected
20.1% - 24.0%
DILUTED EPS FROM CONTINUING OPERATIONS
0
0.2
0.4
0.6
0.8
1
1.2
2003* 2004 2005 2006 2007 2008*
$
$.66
$.54$.51
$.81
$1.02
5.9% 22.2% 22.7%21.4%% Annualgrowth 25.9%
$1.22- $1.26
Projected
19.6% - 23.5%
CAGR: 18.92%
* 53-week year
Actual YTD$0.94
+19.0%
Note: Includes recent acquisitionsCAGR does not include 2008 projected
THE FLOWERS WAY
STRATEGY
INVEST WISELY
Invest in… Bakeries… Products… Brands… Information… People…
CASH ALLOCATION*
* Major cash expenditures
** In addition to cash, stock and debt are used to fund acquisitions.
$88.1 millionCapital
Expenditures$42.1 millionDividends
In millions
$
Acquisitions**
Pension
Sharerepurchases
Dividends
Capitalexpenditures
0153045607590
105120
2003 2004 2005 2006 2007
RETURN ON INVESTMENT
02468
10121416
2003* 2004 2005 2006 2007 2008*** 53-week year
7.4%
9.1%
10.6%
12.1%
Numerator – Income from continuing operationsDenominator – Average beginning and ending shareholders equity and debt
%
13.0%
14.2%
** Trailing 13 periods ended October 4, 2008
2008
THE FLOWERS WAY
Sales* $1,793.3 $1,563.0 14.7%
Net income* $87.1 $73.2 19.1%
Earnings per share $0.94 $0.79 19.0%
*in millions
$2,420 – $2,430 $2,037 18.8 – 19.3%
$113.6 – $117.3 $94.6 20.1 – 24.0%
$1.22 – 1.26 $1.02 19.6 – 23.5%
2007 Change2008
Guidance 2007 Change
40 Weeks FULL YEAR
Note: Includes recent acquisitions
36
LONG-TERM GOALS
LONG-TERM GOALS*
Sales growth of 5% to 8% 7.8% 14.7% $1,793.3
EBITDA margin of 10% to 12% 10.3% 10.4% $187.2
ROI of 13% to 15% 14.2% 13.0%
2007 Actual 40 Weeks 2008In millions
*3 – 5 year time horizon**For the trailing 13 periods ended October 4, 2008
**
THE FLOWERS WAY
INVEST WISELYBAKE SMARTMANAGE RESOURCESINNOVATEAPPRECIATE TEAMDELIVER VALUESERVE THE MARKETGROW
THE FLOWERS WAY
CALENDAR OF EVENTS
One-on-one meetings in Baltimore, Philadelphia, Boston
Company sponsored analysts event in NY
Flowers Foods Q4 earnings release and fiscal ’08 results and conference call
Nov. 17-18
Feb. 5
Contact: Marta Jones TurnerExec. VP, Corporate Relations229-227-2348 – [email protected]
Dec. 2
Today’s presentation includes forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, particularly statements regarding future financial and operating results of Flowers Foods and its business. These statements are based on management's current expectations or beliefs, and are subject to uncertainty and changes in circumstances.
Actual results may vary materially from those expressed or implied by the statements, due to changes in economic, business, competitive, strategic or regulatory factors, and factors affecting the operation of the business of Flowers Foods.
More detailed information about these factors may be found in filings by Flowers Foods with the Securities and Exchange Commission, especially its Form 10-K, in the sections entitled “Forward Looking Statements.” Flowers Foods is under no obligation and expressly disclaims any such obligation to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.
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