BARCLAYS GLOBAL CONSUMER STAPLES CONFERENCE SEPTEMBER 2018 1 - PowerPoint PPT Presentation

BARCLAYS GLOBAL CONSUMER STAPLES CONFERENCE SEPTEMBER 2018 1

REGARDI RDING F FORWARD RD-LOOKI KING S STATEM EMEN ENTS Statements contained in this press release that are not historical facts are forward-looking statements. Forward-looking statements relate to current expectations regarding our future financial condition, performance and results of operations, planned capital expenditures, long-term objectives of management, supply and demand, pricing trends and market forces, and integration plans and expected benefits of transactions and are often identified by the use of words and phrases such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "should," "will," "would," "is likely to," "is expected to" or "will continue," or the negative of these terms or other comparable terminology. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those projected. Other factors that may cause actual results to differ from the forward-looking statements contained in this release and that may affect the company's prospects in general include, but are not limited to, (a) general economic and business conditions and the competitive conditions in the baked foods industry, including promotional and price competition, (b) changes in consumer demand for our products, including changes in consumer behavior, trends and preferences, including health and whole grain trends, and the movement toward more inexpensive store-branded products, (c) the success of productivity improvements and new product introductions, (d) a significant reduction in business with any of our major customers including a reduction from adverse developments in any of our customer's business, including as a result of product recalls or safety concerns related to our products, (e) fluctuations in commodity pricing, (f) energy and raw material costs and availability and hedging and counterparty risk, (g) our ability to fully integrate recent acquisitions into our business, (h) our ability to achieve cash flow from capital expenditures and acquisitions and the availability of new acquisitions that build shareholder value, (i) our ability to successfully implement our business strategies, including those strategies the company has initiated under Project Centennial, which may involve, among other things, the integration of recent acquisitions or the acquisition or disposition of assets at presently targeted values, the deployment of new systems and technology and an enhanced organizational structure, (j) consolidation within the baking industry and related industries, (k) disruptions in our direct-store delivery system, including litigation or an adverse ruling from a court or regulatory or government body that could affect the independent contractor classification of our independent distributors, (l) increasing legal complexity and legal proceedings that we are or may become subject to, (m) product recalls or safety concerns related to our products, and (n) the failure of our information technology systems to perform adequately, including any interruptions, intrusions or security breaches of such systems. The foregoing list of important factors does not include all such factors, nor necessarily present them in order of importance. In addition, you should consult other public disclosures made by the company, including the risk factors included in our most recently filed Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission ("SEC") and disclosures made in other filings with the SEC and company press releases, for other factors that may cause actual results to differ materially from those projected by the company. We caution you not to place undue reliance on forward-looking statements, as they speak only as of the date made and are inherently uncertain. The company undertakes no obligation to publicly revise or update such statements, except as required by law. 2

PRESEN ENTERS A AND AGEN ENDA R. Steve Kinsey Allen L. Shiver Chief Financial Officer & President & Chief Administrative Officer Chief Executive Officer • Business & Category Overview • Profit Initiatives Update • Growth Initiatives Update • Financial Review & Outlook 3

LEADIN ING F FRE RESH SH B BAKERY B BRA RANDS DRI DRIVE O OUR R BUSIN SINESS Sales Overview Brand Portfolio Highlights TTM* Sales $3.9 billion #1 loaf bread brand Branded breads 49% Store branded #1 organic bread brand retail 16% Branded retail 59% Non-retail & other 98% consumer awareness 24% Branded snack cakes Iconic snack cakes since 1914 11% * 52 weeks ended Q2 2018 4 Source: SDW DSD + WD 52 Weeks Ending July 14, 2018

BR BROAD SCA CALE I IS A A PLA LATFORM F FOR PR PROFI FITABLE G GROWTH 47 47 Channels s served Grocery / Mass / Club • Operating bakeries Natural & Organic • Discount / C-store • Foodservice & Vending • Dire rect-store re-di distribu bution a n acces cess s to E-commerce • 85 85 % of t f the U e U.S. 5, 5,500 500 populati tion 9,800 9, 800 independent employees Warehouse distribution NATIO IONWID IDE distributors Information as of year-end fiscal 2017 5

MULT LTI-YEAR AR T TRANSFORMATION U N UND NDERWAY PROJECT CENTENNIAL FY17 STRATEGIC PRIORITIES • Attacked indirect spend • Clarified brand roles DRIVE • Reinvigorate the Core FY18 GROWTH • Capitalize on Adjacencies • Streamlining organization • Investing in capabilities and brands • Generate Fuel for Growth IMPROVE FY19 and beyond PROFITABILITY • Develop Leading Capabilities • Optimize supply chain • Grow sales with innovation, adjacencies, and proactive M&A • EBITDA margin goal: 13-14% 6

FRESH B H BAKERY M MARKET I IS L LARGE GE A AND G GROWING Outlets (1) 1) US Fres US esh B Baker ery - Retail O Retail Outlets = $24.1 billion (1) Billions $24. $24.1 $23. $23.9 $23. $23.7 $23.1 $23. $25.0 $22.5 $22. Fresh packaged breads • $20.0 Commercial cake • $15.0 Tortillas • $10.0 Foodservice = $7.4 billion (2) $5.0 $0.0 Fresh and frozen breads, buns, rolls • 2013 2014 2015 2016 2017 (1) Data for Retail Outlets sourced from IRI. FY 2017. 7 (2) Data for Foodservice sourced from Techonomic 2017

STRONG C COM OMPET PETITIVE POS OSITION Flowers is growing share with differentiated products Fresh Packag aged B Bread ad D Dollar Share Flo lowers D Dolla llar S Share Fre resh h Packaged B Bre reads 15.9 FLOWERS, 15.9 STORE BRAND, 15.4 24.5 15.1 15.1 BBU, 29.6 INDEPENDENT 14.7 BAKERS, 24.2 PEPPERIDGE Q2 2014 Q2 2015 Q2 2016 Q2 2017 Q2 2018 FARM, 5.8 IRI Flowers custom data base Total US Multi Outlet + Convenience – 12 weeks ending July 15, 2018 8

POSITIVE U E UNDER ERLYING CON ONSUMER ER T TREN ENDS Strong demand for differentiated products Organic Fresh Packaged Bread Market Organi nic F Fresh P h Packaged B ed Bread d Mark rket et Store Br Brand F Fresh P Pack ckaged Br Breads Shar are $566.1 26.9% Flower ers o s organic $490.4 26.5% brea ead s share: e: 26.0% 58.5 58.5 $357.8 $275.5 24.9% $220.9 24.6% 24.4% $179.8 13 FY 14 FY 15 FY 16 FY 17 FY 52 WE 07/15/18 13 FY 14 FY 15 FY 16 FY 17 FY 52 WE 07/15/18 Source: IRI Custom Database Total US Multi Outlet + Convenience. 9

TODAY’S C CONS NSUMER The market is changing as consumers expect more from their food MORE RELEVANT MORE INNOVATIVE MORE CHANNELS Fitting lifestyle, values Seeking the different Increasing accessibility 10

ST STRATE TEGIC IC P PRI RIORITIE ITIES T TO C CRE REATE V VALUE DRIVE G GROW OWTH IMPR PROVE PR PROF OFITABILITY • Reinvigorate the Core • Generate Fuel for Growth • Capitalize on Adjacencies • Develop Leading Capabilities 11

RE REINVIG IGORATIN TING T THE C CORE RE B BUSIN SINESS SS New Nature’s Own Perfectly Crafted reflects investments in brand growth and innovation The Wonder/USO partnership drove in-store displays 12

DKB G DK GROWTH C CONTIN TINUES Product launch in 17Q2 more than doubled share in Breakfast Segment To Total D DKB Ret etail S Sales es (in m millions) $83.0 +45. 45.8% $56.9 17Q2 18Q2 Source: IRI Custom Database Total US Multi Outlet + Convenience, 12 weeks ended July 15, 2018 13

MARKET S SHA HARE OPPORTU TUNIT ITIE IES S BEYOND L LOAF B BRE READS #1 in Traditional Loaf Brand extensions and M&A in adjacent segments $4.5 $4.0 Billions $4.0 $3.4 $3.5 $3.0 $2.5 $1.9 $1.9 $1.6 $2.0 $1.5 $1.0 $0.3 $0.3 $0.1 $0.5 $0.0 Traditional Loaf Specialty/Premium Loaf Sandwich Bun/Roll Breakfast/Dinner/Other Total Branded FLO IRI Flowers custom data base Total US Multi Outlet + Convenience – 52 weeks ending July 15, 2018 14

UND NDERDEVELOPED G GEOGR GRAPHI HIES A ALSO A A STRATEGI GIC F FOCUS Bolt-on acquisitions are a key part of our growth strategy Great Lakes & Plains 7.2 California & West 4.7 37.8 13.7 32.3 24.5 27.1 41.8 37.0 22.7 24.8 26.4 Northeast FLOWERS 22.1 28.2 Mid South, South Central, BBU & Southeast STORE BRAND 24.1 25.6 OTHER BRAND IRI Flowers custom data base Total US Multi Outlet + Convenience – 12 weeks ending July 15, 2018 15