Performance Food Group Company · NYSE:PFGC
Performance Food — Investor Day (September 2017)
118 slides from Performance Food's investor day presentation, Sep 12, 2017
Slide 1: Investor Day
Investor Day September 12, 2017
Slide 2: Welcome
Welcome Michael Neese, VP Investor Relations 1
Slide 3: Agenda
Agenda I. Michael Neese VP Investor Relations, PFG Corporate II. George Holm President and CEO, PFG Corporate III. Dave Flitman President and CEO, Performance Foodservice IV. Fred Sanelli SVP Marketing & Sales, Performance Foodservice V. Jim Hope EVP Operations, PFG Corporate / Specialty VI. Craig H
Slide 4: Forward-Looking Statements
Forward-Looking Statements • This presentation includes, and our response to various questions may include, certain forward‐looking statements, estimates, and projections with respect to our anticipated future performance, including the statements in the “Fiscal 2018 Outlook” section of this present
Slide 5: Non-GAAP Financial Measures
Non-GAAP Financial Measures • This presentation and the accompanying financial statement tables include several financial measures that are not calculated in accordance with GAAP, including EBITDA, Adjusted EBITDA, and Adjusted Diluted Earnings per Share. Such measures are not recognized terms under
Slide 6: Performance Food Group
Performance Food Group George Holm, President and CEO 5
Slide 7: Delivering Success
Delivering Success Our mission: to be a leader in the foodservice distribution industry by delivering world-class innovative products and value-added services that enable our customers’ success and support enduring supplier relationships 6
Slide 8: Who We Are
Who We Are • Market leader with scale • Differentiated strategy with customer-centric approach • Unique performance brands private label business • Growing specialty market offering • National candy, snack and beverage distributor • Disciplined and proven acquirer with ample opportunities • Track re
Slide 9: Broad Geographic Footprint
Broad Geographic Footprint Headquarters Performance Foodservice 37 Customized 8 Vistar 28 Specialty 3 76 As of year-end Fiscal 2017 8
Slide 10: Solid Industry Fundamentals
Solid Industry Fundamentals… Food Away From Home $ Billions CAGR 6% $800 $555 2010 2011 2012 2013 2014 2015 2016 U.S. Foodservice Market Size $ Billions CAGR 4% $278 $268 $256 $247 $239 $225 $228 2010 2011 2012 2013 2014 2015 2016 Note: U.S. Department of Commerce for Food Away from Home; Technomic
Slide 11: Combined with Market Share Gains
…Combined with Market Share Gains… CAGR 4% $ Billions 289.0 278.0 268.0 256.0 247.0 239.0 228.0 90.0 31% 85.0 82.2 75.7 80.2 71.9 Top 3: 29% 67.2 185.8 193.0 199.0 69% Others: 71% 167.1 171.3 175.8 160.8 2011 2012 2013 2014 2015 2016 2017 Note: Technomic and company filings for Sysco, PFG, and US Fo
Slide 12: And Unique Barriers to Entry
… And Unique Barriers to Entry • Relationship-driven business • Trucks have trailers with multi-temp coolers with large drop sizes • Nationally branded, high-quality, specialized foodservice products • SKUs are complex and have varying pack sizes • Last mile logistics 11
Slide 13: We've Delivered Industry-Leading Case Growth
We’ve Delivered Industry-Leading Case Growth… CAGR 6% 12.0% 10.0% 8.0% Acquisitions 6.0% Impact 4.0% 2.0% 0.0% 2010 2011 2012 2013 2014 2015 2016 2017 12
Slide 14: Strong Sales Growth
…Strong Sales Growth Net Sales Growth + 6.1%* $16,762 $ Millions $16,105 JUNE JUNE JUNE JUNE JUNE JUNE JUNE JUNE JUNE FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 We have delivered consistent sales growth over a long-term economic cycle *Results shown on a comparable 13 or 52 week basis have been ad
Slide 15: And Solid EBITDA Growth
…And Solid EBITDA Growth PFG Adjusted EBITDA(1) $ Millions $391 CAGR 11% $367 $329 $286 $271 $241 $220 $193 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 (1) For reconciliation of non-GAAP to GAAP measures see the Appendix 14
Slide 16: Fragmented U.S. Foodservice Marketplace
Fragmented U.S. Foodservice Marketplace 2017 Market Size = ~ $289 $ Billions Top 3 ~$90 4-10 Regional ~$29 Broadliners 11-15,000+ All Other ~$170 Note: Technomic and company filings for Sysco, PFG, and US Foods. U.S. Sales only, where available; PFG estimates. 15
Slide 17: Two-Year M&A Activity
Two-Year M&A Activity Annual Sales Acquisition Acquired Location ($ Millions) Broadline Ellenbee Leggett $ 73 Q3 FY2017 Ohio Presto Foods $ 140 Q4 FY2017 Ohio • Acquired eight companies in Broadline, JSC Jenny Service Co. $ 40 Q1 FY2017 Nevada Vistar, and Specialty • Robust pipeline $ 63 Q2 FY2017 I
Slide 18: Performance Foodservice
Performance Foodservice Dave Flitman, President and CEO 17
Slide 19: Segment Overview
Segment Overview Segment Highlights Product Mix • Channels served: Chemicals − Focus on Independent Operations: 1% Refrigerated • Leading distributor in Pizza/Italian Segment 2% Center of the Plate 45% • Family Dining Other Dairy 4% • Bar and Grill Beverage • Fast Casual Produce 5% 4% Disposables −
Slide 20: Segment Overview
Segment Overview Industry Leading Growth Driven By: • Customer-centric strategy • Laser focus on faster growing independent restaurants • Expanding portfolio of strategic Performance Brands • Evolving technology to enhance customer experience and salesforce effectiveness Net Sales EBITDA $ Billions
Slide 21: Strategic Focus - Plan for Growth
Strategic Focus - Plan for Growth Put Safety First • Zero is the goal: personal and management accountability • Leverage enhanced DriveCam technology to combat fatigue 1 Drive Sales Growth Hit the Accelerators • Invest in sales force (AM) • Execute acquisition synergies capacity • Continue to make a
Slide 22: Improving Mix of Business
Improving Mix of Business Drive Profitability Independent Mix of Broadline Sales Performance Brand Mix of Independent 44.4% 44.6% 550 bps 630 bps 39.1% 38.1% FY12 FY17 FY12 FY17 • Seven consecutive years of 6% to 10% Independent case growth • Mix shift of 630 bps in Independent mix of Broadline sale
Slide 23: Consistently Outperforms Competition
Consistently Outperforms Competition % PY Total Independent Case Volume 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Q1 FY16 Q2 FY16 Q3 FY16 Q4 FY16 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 PFG Sysco US Foods Note: YOY growth in Total Independent case volume (PFG and USF) and U.S. Broadline Local case growth (Sysco). All
Slide 24: Independent Case Growth Sources
Independent Case Growth Sources Target Mid-Teen Double-Digit • 1,700+ sales force New Growth • Competitive environment High Single-Digit To Reach and restaurant closings Lost Decline Our • Strong loyalty and Mid Single-Digit Growth relationships New Penetrated Growth Goals • 7 years of best-in-class
Slide 25: EBITDA Margin Growth
EBITDA Margin Growth Percent of Net Sales 3.5% 3.31% 3.0% 99 bps +43% 2.5% 2.32% 2.0% FY13 FY17 24
Slide 26: Pillars of Customer-Centric Strategy
Pillars of Customer-Centric Strategy Through partnership and innovation, Performance Foodservice will enable the long-term success of our customers and ourselves 1 Deliver Best Customer Experience 2 Commitment to Operational Excellence 3 Lead in Innovative Products and Services Within each pillar we
Slide 27: Customer Experience
Customer Experience Our technology pushes sales past consultative selling to INSIGHT SELLING COMPLEMENTARY ITEMS & DIGITAL BEHAVIOR MARKETING CUSTOMIZES EXPERIENCE INSIGHT SELLING ORDER ENTRY/ PRICE SHOP • Predict and anticipate based on customer behavior INSIGHT • Same data set influences customers
Slide 28: Technology Enabled Customer Experience
Technology Enabled Customer Experience • Provide a device agnostic “Digital First” suite of solutions for our customers that keeps them within our ecosystem MAKE IT MAKE IT MAKE IT EASY SMART PROFITABLE PILLAR 2 Digital business with us should be simple Empower operators to make informed and timely
Slide 29: Our Digital Strategy
Our Digital Strategy • “Digital First” is our development focus • Our touchpoints are responsive with content Responsive designed to be consumed on any device design consumable on any device 28
Slide 30: Digital Content is Customer Specific
Digital Content is Customer Specific • No two customers are alike – leveraging content marketing via digital touchpoints Websites Email Marketing Social & Blog Always Responsive Design/Mobile Friendly Content Strategy Appeals to ALL Customers Insights Funneled to Sales 29
Slide 31: Digital Campaigns and Promotions
Digital Campaigns and Promotions • Tools provided to our Area Managers coordinate and complement customer facing technology • Reach target accounts with content specific promotions & campaigns 30
Slide 32: Digital Rebates and Coupon Redemption
Digital Rebates and Coupon Redemption • Track, present, and redeem manufacturer and exclusive brand product rebates through the customer landing page 31
Slide 33: Delivering Our Strategy Through Innovation
Delivering Our Strategy Through Innovation • Our customer-centric approach puts the customer at the center of all we do and develop • This evolutionary approach services our customers’ current needs while anticipating future developments • Full portal launch expected by calendar year end 2017 Place
Slide 34: Technology Enables Sales Success
Technology Enables Sales Success Prospects and CRM • In use by area managers to find, create, track, and convert prospect activity through geo-location Find qualified Capture CRM Geo Location prospects & information activated customers 33
Slide 35: e-Commerce Growth
e-Commerce Growth e-Commerce Sales by Year $ Millions 200 55% 180 160 50% % of e-Commerce 140 Weekly Sales 120 45% 100 80 40% 60 40 35% 20 0 30% 2014 2015 2016 2017 Total Weekly Sales Percentage of e-Commerce Source: Estimated PFS e-commerce sales; fiscal years 34
Slide 36: Market Watch Independent Margin Initiative
MARKET WATCH Independent Margin Initiative • Provides salesforce with critical insights and identifies margin opportunities in real time • Includes customer segmentation analytics and peer comparisons My Alerts My Customers My Commission Weekly opportunity review Prepare for a meeting Monthly review
Slide 37: Strategic Initiative: Improving Engagement
Strategic Initiative: Improving Engagement Net Promoter, Net Promoter Score, and NPS are registered trademarks of Satmetrix NPS is based on PFS customer feedback Systems, Inc., Bain & Company, Inc., and Fred Reichheld. 36
Slide 38: Summary
Summary • Best-in-class* independent case growth driven by: − Customer-centric strategy − Laser focus on faster growing independent segment − Expanding portfolio of strategic Performance Brands − Evolving technology to enhance customer experience and salesforce effectiveness • Customer feedback rein
Slide 39: Performance Brands
Performance Brands Fred Sanelli, SVP Marketing and Sales Development 39
Slide 40: Performance Brands
Performance Brands o Brand Development and What Makes Them Unique o Why Brands? o PerformanceFoodservice.com o Brand Spotlight: Braveheart & Bacio o Delivering Results 40
Slide 41: Branded Product Approach
Branded Product Approach PERFORMANCE EXCLUSIVE BRANDS ARE DEFINED AS: Foodservice Products developed by a Foodservice Company - Specifically to meet and exceed the needs of Foodservice Operators. We Live in the Brand… PERFORMANCE Brand Manifesto 100+ years of product development Quality tiers to
Slide 42: Why Branded Products?
Branded Product Approach WHY BRANDED PRODUCTS? OPERATOR The PERFORMANCE “Triple Win” Committed to Innovation, Quality, Consistency & Versatility 1. Cost of Goods Advantage — Operator COMPANY 2. Increased Gross Margin — Company AREA 3. Increased Commission Earnings — Area MANAGER Manager 42
Slide 43: Brand Development
Brand Development Umbrella Brands & Strategic Brands 43
Slide 44: PerformanceFoodservice.com
PerformanceFoodservice.com 44
Slide 45: PerformanceFoodservice.com: Ask the Chef
PerformanceFoodservice.com ASK THE CHEF… o Recipe Center most visited o Increased Chef collaboration o Featuring our People, Products and Brands 45
Slide 46: Branded Video & Training Center
PerformanceFoodservice.com Branded Video & Training Center o Supplier Training Videos and Materials 46
Slide 47: Exclusive Brand Lineup
Exclusive Brand Lineup Strategic Brands BRAVEHEART BLACK ANGUS BEEF® Black Angus beef to satisfy operators’ needs with a serious commitment to quality, food safety (traceability) and state-of-the-art processing via our exclusive PathProven® program. Black Cattle raised in the Midwest and fed on loca
Slide 48: Why Braveheart?
Braveheart Black Angus Beef WHY BRAVEHEART? Braveheart Black Angus Beef® redefines premium beef, setting a higher bar for quality, taste, tenderness, consistency and ethical production processes. All done by controlling our supply chain. o Our cattle are born and raised in the upper Midwest of the U
Slide 49: Braveheart Black Angus Beef
Braveheart Black Angus Beef What people are saying TASTE It's a combination of things that make Braveheart the best meat I've seen and tasted in 76 years in the business. Braveheart has its own taste – nothing like it. It exceeds anything that's out there. — Frank Murphy, Oakes Farms, FL QUALITY Bes
Slide 50: Braveheart Black Angus Beef: In the News
Braveheart Black Angus Beef In the News Braveheart Black Angus Beef to Sponsor James Beard Foundation Awards Gala Reception For Second Year PERFORMANCE Foodservice and Braveheart® Black Angus Beef are taking center stage as an official sponsor of the 2016 James Beard Foundation Awards gala reception
Slide 51: Braveheart Annual Growth
Braveheart Annual Growth CAGR 10% (LBS) FY12 FY13 FY14 FY15 FY16 FY17 52 51
Slide 52: Why Bacio?
Bacio Premium Cheeses WHY BACIO? Bacio is a uniquely crafted, all-natural combination of creamy mozzarella and a signature Kiss of Buffalo Milk™. o Premium Ingredients: Highest quality & all-natural ingredients like Grade A milk and buffalo milk. o Delicious Taste: Authentically smooth and creamy wi
Slide 53: Bacio Premium Cheeses – Customer Touchpoints
Bacio Premium Cheeses – Customer Touchpoints MEMBERS-ONLY MARKETING SUPPORT Bacio isn’t just a premium cheese supplier, we’re also a partner to our pizzerias and do everything we can to help Gold Club succeed. o Custom printing for menus o Location signage o Website creation o Loyalty programs o Pro
Slide 54: Bacio Annual Growth
Bacio Annual Growth CAGR 35% (LBS) FY12 FY13 FY14 FY15 FY16 FY17 56
Slide 55: Delivering Results Drives Profitability
Delivering Results Drives Profitability Independent Mix of Broadline Sales Performance Brand Mix of Independent 44.4% 44.6% 550 bps 630 bps 39.1% 38.1% FY12 FY17 FY12 FY17 o Seven consecutive years of 6% to 10% Independent case growth o Mix shift of 630 bps in Independent mix of Broadline sales o Br
Slide 56: Summary
Summary o Live in the Brand − Committed to innovation, quality, consistency, and versatility − Product portfolio developed specific to foodservice operation − Quality tiers to meet and exceed the needs of all operators − Reach our operators on a multitude of platforms o Our efforts are resonating wi
Slide 57: Specialty Operations
Specialty Operations Jim Hope, EVP Operations 59
Slide 58: Specialty Overview
Specialty Overview • Three stand-alone companies acquired in Footprint FY2017 ‒ Bar Harbor Seafood ‒ Larry Kline Meats ‒ T.F. Kinnealey • Eight existing Broadline OpCos with protein processing capabilities ‒ Seven USDA inspected meat cutting facilities ‒ One seafood importing and processing facility
Slide 59: Strategic Rationale
Strategic Rationale • Enhanced sales growth • Drive higher operating margins • Responds to customer preferences • Good cultural fit 61
Slide 60: Enhanced Sales Growth
Enhanced Sales Growth • Grow the acquired company’s direct sales • Grow nearby PFG company’s sales within the specialty product category • Grow through “cross selling” with our nearby Broadline company 62
Slide 61: Drive Operating Margins
Drive Operating Margins Indexed Gross Profit/Case by Category FY2017 Seafood 1.41 Meats 1.27 Disposables 1.22 Poultry 1.20 Dairy 1.18 All Categories 1.00 Grocery, Dry 0.98 Produce 0.97 Frozen 0.93 Fresh/Refr FD 0.79 Beverage 0.67 Source: PFS data 63
Slide 62: Responding to Our Customers
Responding to Our Customers Specialty Companies operate differently than traditional Broadline distributors, in a way that delights their customers • White tablecloth customers prefer dedicated specialists • Willing to pay a premium Specialty Traditional Broadline • Order Cut Offs are flexible and a
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Slide 64: Creating Meaningful Synergies
Creating Meaningful Synergies • Sell through adjacent PFS Broadline OpCos providing service with a “vested interest” Market Penetration • Product line expansion for the Broadline OpCo • Outlet for by-products of processing that our Broadline OpCos are unable to sell • Claim the profit we currently p
Slide 65: Cultural Fit
Cultural Fit PFG’s management philosophy is uniquely suited to fit Specialty Premium Processing companies and their customer intimate and product-centric approach • PFG employs a more autonomous management approach • We encourage the owners to continue to lead the company • We allow our Specialty co
Slide 66: Current Company Profiles
Current Company Profiles Specialty Total Location Brockton, MA Deerfield Beach, FL Orlando, FL Processed, Primary Live, fresh, and Custom cut meats Custom cut meats value-added Focus frozen seafood products Total Square Footage 99,120 22,200 60,726 182,046 Under Roof Acquisition 10/14/16 10/21/16 01
Slide 67: Summary
Summary • Specialty offers value-added services, strong case growth, and higher margins • Driving sales and profitability • Restaurants want specialized meats and seafood • Cross-selling opportunities • Synergies • Cultural fit 69
Slide 68: PFG Customized
PFG Customized Craig Hoskins, President and CEO 70
Slide 69: Overview
Overview Segment Highlights Footprint • 8 distribution centers • More than 5,000 customer locations • Specifically meets the special needs of family and casual dining chains across the United States • Long-standing relationships with many iconic American restaurant concepts • Excellent operations: −
Slide 70: Customized Growth Strategy
Customized Growth Strategy • Continue to bring on the right customers with the right economics • Expand targets to include the right fast casual chains • Continually work to gain efficiencies through operational improvements Net Sales EBITDA $ Billions $ Millions CAGR 6% CAGR (8%) $3.8 $3.8 $3.8 $38
Slide 71: Executive Overview and Strategy
Executive Overview and Strategy 1 3 • Safety in the center • Capital light model with working capital • Resources and actions that build safety culture initiatives which do not impact customer experience • Training and resources and actions that drive compliance • Match organization structure and si
Slide 72: Casual Dining - Large Segment
Casual Dining - Large Segment 2016 Sales • Large segment with scale and efficiencies $ Millions ‒ Represents $42.3 billion in consumer expenditures from tens of millions of customer $42,300 visits ‒ Select concepts are growing and holding their own; other concepts are closing underperforming restaur
Slide 73: Strong, Long-Term Relationships
Strong, Long-Term Relationships +25 Years +10 Years Plus Newer Relationships 75
Slide 74: Technology
Technology • Largely self Developed ERP • 100% of orders placed on line • Customized to meet the needs of chain restaurants • Real time inventory views and customer reporting • POD Scanners Deployed • Rolling out ring scanners in warehouse to further improve service and reduce shrink • Descartes Rou
Slide 75: Improving the Customer Portfolio
Improving the Customer Portfolio • PFG entered into an agreement to distribute to Red Lobster’s 670+ U.S. restaurants • Winning Red Lobster as a customer solidified PFG Customized’s position as a premier distributor to chains with scale who require value added services • Red Lobster’s network of U.S
Slide 76: Austell Closure Update
Austell Closure Update • Closed Austell facility on June 30, 2017 − Historically unprofitable location − Served only two customers – both quick serve restaurants − Small cost savings due to lack of profitability and headcount reduction − Rationalize portfolio and reviewing customer base 78
Slide 77: Summary
Summary • Casual dining is a large industry with tens of millions of customers per year • Customer base has scale and provides efficiencies • Expanding mix into fast casual where economics, culture, and requirements fit our network • Operators that execute well are growing; some operators are removi
Slide 78: Vistar
Vistar Patrick Hagerty, President and CEO 80
Slide 79: Segment Overview
Segment Overview Segment Highlights Footprint • Leading distributor of candy, snacks, and beverages and other single serve, impulse, immediate consumption items • Channels served: − Vending Distributors − Office Coffee Service Distributors − Theaters, Stadium and Arenas − Retail Impulse − Hospitalit
Slide 80: Delivering Growth
Delivering Growth Growth Strategy • Utilize strengths to grow both core and emerging channels • Improve mix • Improve cost structure through utilization of technology • Enter new channels and develop new capabilities through acquisitions Net Sales EBITDA $ Billions $ Millions CAGR 9% CAGR 16% $3.0 $
Slide 81: A History of Evolution
A History of Evolution • The type of products we sell defined us: − Single Serve − Impulse − Immediate consumption • What began as candy, chips, and soda evolved to protein bars, energy drinks and meal replacement options • SKU growth continues to evolve as consumers More continue to evolve Customer
Slide 82: A History of Channel Evolution: Vending
A History of Channel Evolution: Vending 84
Slide 83: A History of Channel Evolution: Office Coffee
A History of Channel Evolution: Office Coffee 85
Slide 84: A History of Channel Evolution: Theater
A History of Channel Evolution: Theater 86
Slide 85: A History of Evolution
A History of Evolution FY 2002 FY2008 FY2017 $1.0B Net Sales $1.4B Net Sales $3.0B Net Sales 17% 4% 3% 15% 6% 96% 1% 6% 73% 59% 5% 3% 6% 2% 2% Vend/OCS Vend/OCS 2% Theater Theater/Concession 1% Retail Hospitality/Travel Vend/OCS Theater/Concession Corrections Other Retail All Other Campus Office Sup
Slide 86: Customers
Customers • More than 20,000 SKUs carried to service a broad range of customers • 45% growth in customer base since 2013 • As customers have evolved so have we by expanding services they want while continuing to evolve our customer base Number of Customers 2013 2014 2015 2016 2017 0 10,000 20,000 30
Slide 87: Customers – Vending / OCS
Customers - Vending / OCS VISTAR. os Reaching Higher. aap 4 Achieving More. UNI US ED STRATEGIES / | GROUP" /] Canta i * sodexo AT
Slide 88: Customers – Theater
Customers - Theater VISTAR. INE AR The Best Seat in Town
Slide 89: Customers – Hospitality
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Slide 90: Customers – Retail
Customers -— Retail esr] Berea = ©) SatljMillss « EEKSE=] GameStop Vil * K'S| Best \ FedEx Kinkos DOLLAR TREE "SUGAR. ey wi HIBBETT SPORTS: (A BARNES; NOBLE = 2 Surlington COGANDERyn, ——"Tancock Fabris Cond Michaels Office JCPenney JOANN cones: lM LOWE'S J hae ce vA r. r r THE a SHOPS PAUTOS Rural K
Slide 91: Suppliers
Suppliers • An evolving supplier network to meet customer needs and expand SKU offerings • Vistar is the 3rd-largest distributor of MARS Chocolate in North America and the 3rd-largest distributor of Frito-Lay − We are the 2nd-largest distributor of Mrs. Freshley’s snack division and the 3rd-largest
Slide 92: Nationwide Coverage
Nationwide Coverage Wholesale candy, snack, and beverage specialists Delivering solutions from one box to a truckload 94
Slide 93: Nationwide Coverage
Nationwide Coverage Wholesale candy, snack, and beverage specialists Retail solutions with nationwide coverage 95
Slide 94: Evolving Beyond a Distributor
Evolving Beyond a Distributor • Continue to build upon our core competencies in distribution centers and logistics • Ongoing evolution and expansion of product offerings in the impulse, single serve, immediate consumption category • Invest in the continued growth of automated facilities and IT infra
Slide 95: Automated Technology
Automated Technology • Vistar Retail Central – an automated parcel distribution facility in Southaven, Mississippi • Allows for significant enhancement to product availability and outbound order shipping capacity • Software and conveyor technology provide significant enhancements to operational proc
Slide 96: The Future of Automated Facilities
The Future of Automated Facilities • Three current retail facilities with one automated site • Two additional automated facilities on the West and East coasts planned for FY2018-FY2019 • 2020 vision of 6 total automated facilities 99
Slide 97: Retail: Traditional vs. e-Commerce
Retail: Traditional vs. e-Commerce • Legacy retailers are restructuring their footprints with large retailers such as 7.4x Total Retail Aeropostale, JC Penney, Gap, Walmart, Macy’s shuttering 10.1 stores in 2016 2.3x Total Retail Sales Growth % 6.1x Total Retail 7.4 • Retail bankruptcies (or 6.1 pen
Slide 98: Plans for Growth
Plans for Growth “e-Commerce Distributor of Candy & Snacks” Production MANUFACTURERS Distribution Centers & Delivery Logistics VISTAR Other Smaller Distributors E-Commerce Retailers Direct to E-Comm Consumers Boutique (Vistar E-Comm for business, Large Retailers Retailers club sports programs, consu
Slide 99: Summary
Summary • Leading distributor of candy, snacks, and beverages and other single serve / impulse items • Leverage a national footprint that allows new customers and segments • Unparalleled inventory variety • Tremendous e-Commerce growth opportunities • M&A pipeline remains strong 102
Slide 100: Performance Food Group
Performance Food Group Tom Ondrof, EVP and CFO 103
Slide 101: Fiscal 2017 Financial Performance
Fiscal 2017 Financial Performance FY2017 Growth vs. PY* Cases 6.2% Net Sales $16.8B 6.1% Gross Profit $2.1B 7.9% Operating Expense $1.9B 8.0% Net Income $96.3MM 45.5% Diluted EPS $0.93 38.8% Adjusted EBITDA1 $390.7MM 9.0% Adj. EBITDA1/Gross Profit 18.4% 20 bps Adjusted Diluted EPS1 $1.24 27.8% *Resu
Slide 102: Strong Track Record of Growth
Strong Track Record of Growth Net Sales 170% 160% 159% 150% 140% 137% 130% 120% 124% 110% 100% 90% CY2010 CY2011 CY2012 CY2013 CY2014 CY2015 CY2016 1H CY2017 Adjusted EBITDA 190% 188% 180% 170% 160% 150% 137% 140% 130% 120% 136% 110% 100% 90% CY2010 CY2011 CY2012 CY2013 CY2014 CY2015 CY2016 1H CY201
Slide 103: Looking Ahead: Our Focus
Looking Ahead: Our Focus • Continued investment in growth • Expanding operating margins • Disciplined use of capital 106
Slide 104: Investment in Growth
Investment in Growth PFS AM Sales Force 21% Growth 1,700 1,400 FY12 FY13 FY14 FY15 FY16 FY17 Notes: FY totals are rounded IFH Acquired May 2012; Fox River acquired December 2012 107
Slide 105: Expanding Margins
Expanding Margins 2.33% • Productivity − OpEx innovation − Pricing tool 2.09% − Brand penetration • Leverage − Supplier negotiations − New supplier billing process − Overhead control • Mix − Mix shift to Independent FY12 FY13 FY14 FY15 FY16 FY17 − Specialty growth at higher margin Note; Adjusted EBI
Slide 106: Disciplined Use of Capital
Disciplined Use of Capital 1. Investment in the business = facility expansions − 149,000 sq. ft. added in FY2016 Net Debt and Leverage − 426,000 sq. ft. added in FY2017 $ Millions − 750,000 sq. ft. planned in FY2018 $1,469 $1,454 $1,413 2. Strategic M&A $1,289 $1,197 5.3x $1,135 − Specialty 5.1x 4.4
Slide 107: FY2018 Outlook
FY2018 Outlook PFGC provides fiscal 2018 Adjusted EBITDA1 growth 8% to 11% versus PY: PFGC provides fiscal 2018 Adjusted Diluted EPS1 growth 13% to 18% versus PY outlook: 1 This presentation includes several metrics, including EBITDA, Adjusted EBITDA and Adjusted Diluted Earnings per Share that are
Slide 108: 3-Year Financial Goals
3-Year Financial Goals 5% 10% 15bps TOTAL CASES ADJ. EBITDA ADJ. EBITDA MARGIN GROWTH GROWTH GROWTH 3-year financial goals are on an annual compounded basis 111
Slide 109: Summary
Summary • Industry-leading growth company • Continue to focus and grow independent cases • Profitably grow our share in a fragmented marketplace • Performance Brands private label business is unique with higher margins • Specialty has higher margin of cross-selling opportunities • Rationalizing port
Slide 110: Questions
Questions —=PFG =:
Slide 111: Appendix
Appendix —PFG ==
Slide 112: EBITDA and Adjusted EBITDA Reconciliation
EBITDA and Adjusted EBITDA Reconciliation Non-GAAP Financial Measures Refer to Item 7. Management Discussion and Analysis of Financial Condition and Results of Operations included in the annual report on Form 10-K for the fiscal year ended July 1, 2017 for statements regarding our use of non-GAAP fi
Slide 113: Speaker Biographies
Speaker Biographies George Holm – President and CEO, PFG Corporate George Holm became President and Chief Executive Officer of PFG when it was acquired by Vistar Corporation in May 2008. Prior to that, he served as President and Chief Executive Officer of Vistar, which he founded in 2002. George gre
Slide 114: Speaker Biographies
Speaker Biographies Jim Hope – EVP Operations, PFG Corporate Jim Hope was named Executive Vice President of Operations for PFG in July 2014. Prior to joining PFG, Jim spent 26 years in executive leadership roles at Sysco Corporation. Most recently he was Executive Vice President of Business Transfor
Slide 115: Speaker Biographies
Speaker Biographies Tom Ondrof – EVP and CFO, PFG Corporate Tom Ondrof joined PFG as Executive Vice President and Chief Financial Officer in October 2016. Prior to this current role, Tom had a 24-year career with Compass Group North America, a $14-billion global leader in contract foodservice. Durin
Slide 116: Foodservice Industry Customer Verticals
Foodservice Industry Customer Verticals PFG Total Industry Total Retail / Hospitality Retail / Regional / Hospitality Education National Education Regional / Chains National Chains Healthcare Other Healthcare Other Independent Independent • Continue to improve mix of independents customers • Focus o
Slide 117: PFG Overview
PFG Overview • Third largest foodservice EBITDA Profit Margins distributor in the U.S. and a leading distributor to a Sysco PFGC 16% PFG Customized 0.7% wide variety of channels US 6% Foods • Operates primarily in 9% three segments: Performance Foodservice 3.3% − Performance Foodservice Others 69% −
Slide 118: PFG Overview
PFG Overview Independent Cases Net Sales $ Millions 25% $16,762 $16,105 $15,270 $13,686 Acquisitions $12,827 $11,506 Impact 6% 0% FY11* FY12 FY13 FY14 FY15 FY16* FY17* 2012 2013 2014 2015 2016 2017 Adjusted EBITDA(1) $ Millions, % of Gross Profit $391 $367 $329 $286 $271 $241 18.4% 18.2% 17.8% 17.2%
Performance Food Group Company — Investor Day (September 2017) on 6ix