Slide 1: Sysco 1Q17 Earnings Results
Sysco 1Q17 Earnings Results November 7, 2016
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements made in this presentation or in our earnings call for the first quarter of fiscal 2017 that look forward in time or that express management’s beliefs, expectations or hopes are forward-looking statements within the meaning of the Private Securities Litigation Re
Slide 3: Bill DeLaney, CEO
Bill DeLaney CEO
Slide 4: 1Q17 Financial Highlights (excluding Brakes)
1Q17 Financial Highlights – (excluding Brakes) Adjusted1 Reported $MM, except per share YOY % YOY % data 1Q17 1Q17 Change Change Sales $12,685 1.0% $12,685 1.0% Gross Profit $2,349 5.0% $2,349 5.0% Operating Expense $1,765 1.9% $1,802 3.3% Operating Income $584 15.3% $547 10.8% SYSCO 1Q17 EARNINGS R
Slide 5: Industry & economic trends remain uneven
Industry & economic trends remain uneven U.S. Consumer Confidence - Two Years Unemployment Rate & Non-Farm Payroll Trend 110.0 7.0% 500,000 U.S. Unemployment Rate 103.5 Change in U.S. Non-Farm Payroll 6.5% 102.6 400,000 100.0 Average 6.0% 5.5% 5.3% 4.9% 5.5% 5.0% 5.0% 5.1% 5.0% 4.9% 300,000 5.0% 5.0
Slide 6: Strong quarter in legacy business enhanced with the acquisition of Brakes Group
Strong quarter in legacy business enhanced with the acquisition of Brakes Group Reaping the benefits of multi- year foundational work Brakes Group Supporting the success of our customers Support growth with experienced and talented leadership team Drive out transformative SYSCO 1Q17 EARNINGS
Slide 7: Tom Bené, President & COO
Tom Bené President & COO
Slide 8: Operating performance achieved by continued strong execution on the key levers of our three-year plan
Operating performance achieved by continued strong execution on the key levers of our three-year plan U.S. Foodservice To Be Our Customers’ Most Valued and Trusted Business Operations1 Partner Grow Gross Leverage Reduce Sales growth: 0.8% Profit Supply Administrative Chain Costs • Accelerate local
Slide 9: Enhanced industry leading processes and improved brand performance drove GP growth and margin expansion
Enhanced industry leading processes and improved brand performance drove GP growth and margin expansion Category Management Sysco Brand Revenue Management Variety Mix Management Tools and Value Insights SYSCO 1Q17 EARNINGS RESULTS 11.07.16 PAGE 9 Innovation Disciplined © 2016 All Rights Reserved. Sy
Slide 10: Continued focus to implement sales training and support tools enabling our customers to succeed
Continued focus to implement sales training and support tools enabling our customers to succeed Investing in our Sales Organization through training programs: local, chain, leadership Reducing non-value added work from our sales teams Strategically deploying our resources by leveraging data to
Slide 11: Solid expense management led to a $0.04 improvement in cost per case
Solid expense management led to a $0.04 improvement in cost per case1 OPCO Standardize best practices in transportation and t warehousing to improve quality, cost and safety Productivity Use best-in-class capacity planning to defer capital. Facilities t Standardize maintenance, construction and real
Slide 12: International Foodservice Operations and SYGMA performing well
International Foodservice Operations and SYGMA performing well Sales increased $1.3 billion Adjusted Operating Income improved $50 million International Foodservice Brakes – Positive results in U.K., France and Operations1 Sweden Canada – Effectively managing deflation and soft market enviro
Slide 13: Joel Grade, CFO
Joel Grade CFO
Slide 14: 1Q17 Financial Highlights (including Brakes)
1Q17 Financial Highlights (including Brakes) Adjusted1 Reported $MM, except per share YOY % YOY % data FY17 FY17 Change Change Sales $13,969 11.2% $13,969 11.2% Gross Profit $2,692 20.3% $2,692 20.3% Operating Expense $2,065 19.3% $2,125 21.8% Operating Income $627 23.8% $567 14.9% SYSCO 1Q17 EARNIN
Slide 15: Strong operating performance
Strong operating performance Total Sysco Operating Leverage (excluding Brakes)1 8.0% 6.8% 7.0% 6.0% 6.0% 5.0% 6.0% 6.1% 4.7% 5.0% 4.5% 4.1% 4.0% 3.4% 3.0% 3.1% 3.0% 3.1% 2.0% 2.3% 2.2% 1.0% 1.8% 1.7% 1.9% 1.5% 0.0% 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 GP growth OPEX growth SYSCO 1Q17 EARNING
Slide 16: Cash Flow & Balance Sheet
Cash Flow & Balance Sheet Quarterly Cash Flow1 $1,200 $1,000 $800 $600 $400 $200 $- $(200) 2013 2014 2015 2016 2017 2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016 $(400) Q1 Q2 Q3 Q4 $(600) Net cash provided by operating activities (GAAP) Free Cash Flow (Non-GAAP) Cash flow Cash from
Slide 17: Business updates
Business updates Brakes Group Accretion to adjusted EPS will be high-single-digits in FY 2017 Approximately $0.04 accretive for the first quarter1 Seasonality - Performance of the business is more heavily weighted to the first half of Sysco’s fiscal year Fuel Update Favorable benefit wil
Slide 18: Summary
Summary Quality quarter reflecting continued momentum from improved underlying business performance Disciplined approach to case growth Strong GP growth Good cost management SYSCO 1Q17 Committed to serving our customers and delivering a high level EARNINGS RESULTS of execution in all areas
Slide 19: Non-GAAP Reconciliations
Non-GAAP Reconciliations
Slide 20: New Segment Reporting Structure
New Segment Reporting Structure Sysco Corporation and its Consolidated Subsidiaries COMPARATIVE SEGMENT DATA RECLASSIFIED FOR NEW SEGMENT REPORTING STRUCTURE (Unaudited) (In Thousands) In connection with the Acquisition, the company has reassessed its reportable segments based on how the chief opera
Slide 21: New Segment Reporting Structure
New Segment Reporting Structure Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items (In Thousands, Except for Share and Per Share Data) Q1 FY17 Q1 FY16 Q2 FY16 Q3 FY16 Q4 FY16 53-Week Oct. 1, 2016 Sep. 26, 2015 Dec. 26, 2015 Mar. 26, 2016 J
Slide 22: New Segment Reporting Structure
New Segment Reporting Structure Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items (In Thousands, Except for Share and Per Share Data) Q1 FY17 Q1 FY16 Q2 FY16 Q3 FY16 Q4 FY16 53-Week Oct. 1, 2016 Sep. 26, 2015 Dec. 26, 2015 Mar. 26, 2016 J
Slide 23: Impact of Certain Items
Impact of Certain Items Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items Sysco’s results of operations are impacted by restructuring costs consisting of (1) severance charges, (2) professional fees related to our three-year strategic pla
Slide 24: Impact on Certain Items
Impact on Certain Items Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items and Brakes (In Thousands, Except for Share and Per Share Data) 13-Week 13-Week 13-Week 13-Week Period Ended Period Ended Period Change Period Oct. 1, 2016 Sep 26, 2
Slide 25: Impact on Certain Items
Impact on Certain Items Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items and Brakes (In Thousands, Except for Share and Per Share Data) 13-Week 13-Week 13-Week 13-Week Period Ended Period Ended Period Change Period Oct. 1, 2016 Sep 26, 2
Slide 26: Impact on Certain Items
Impact on Certain Items (1 ) Includes $28 million in accelerated depreciation associated with our revised business technology strategy and $10 million related to severance charges, professional fees on 3-year financial objectives, restructuring expenses within our Brakes operations and costs to conv
Slide 27: Cost per Case
Cost per Case Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Cost per Case Cost per case is an important metric management uses to measure our expense performance. This metric is calculated by taking the total operating expense of our U.S. Broadline companies
Slide 28: Free Cash Flow
Free Cash Flow Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Free Cash Flow (In Thousands) Free cash flow represents net cash provided from operating activities less purchases of plant and equipment and includes proceeds from sales of plant and equipment. Sy