Performance Food Group Company · NYSE:PFGC
Performance Food — 2020 ICR Conference
32 slides from Performance Food's conference presentation, Jan 12, 2020
Slide 1: Performance Food Group Investor Presentation
Performance Food Group Investor Presentation January 2020
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Performance Food Group Company (“us” or the “Company”) solely for information purposes. This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Secti
Slide 3: Performance Food Group at a glance
Performance Food Group at a glance One of the leading foodservice distributors in the U.S. by revenue LTM Q1 FY2020 LTM Q1 FY2020 Net Sales Adj. EBITDA(3) Participates in the growing $299 billion foodservice distribution industry(1) $21.4 $508 billion million Serves a diverse mix of customers
Slide 4: PFG segment overview
PFG segment overview PFG Operating Segments Business mix Net Sales(1) One of the largest broadline distributors by net sales in the U.S. Vistar 28% A leading distributor to independent pizzerias in the U.S. Around $3 billion sales of proprietary Performance Brands Foodservice Also includes t
Slide 5: PFG has a long standing track record of delivering consistent growth
PFG has a long standing track record of delivering consistent growth Track record of net sales growth Category leader in an attractive industry ($ in billions) Customer-centric business model with local $26 (1) decision making $20 $18 $16 $17 $15 − Driving consistent market share gains, new $12
Slide 6: Continued consistent growth in reported Q1 2020
PFG has continued its consistent track record of growth in reported Q1 2020 FY2019 % growth Q1 2020 % growth Commentary Double-digit sales and Adjusted EBITDA growth driven by: Net Revenues $19.7bn 12.1% $6.2bn 37.5% Continued momentum in Vistar with improved sales mix of customer channels and p
Slide 7: Reinhart Overview
=I — Performance = Food Group
Slide 8: Acquisition of Reinhart offers a compelling strategic rationale
Acquisition of Reinhart offers a compelling strategic rationale Expands geographic reach and overall scale Enhances PFG’s distribution platform and market density Combined pro forma net sales of ~$30 billion for FY2019(1) Complementary customer-centric operating models Consistent go-to-marke
Slide 9: Summary financials
Illustrative pro forma snapshot Strategic transaction expands geographic reach and enhances PFG’s market density Enhances PFG’s diverse customer base, including a solid base of independent customers, and broadens its proprietary brands offering Compelling margin profile Strong deleveraging p
Slide 10: Reinhart snapshot
Reinhart snapshot Business description Second largest privately held foodservice distributor in the U.S. with over $6 billion in net sales and $165(1) million in Adj. EBITDA throughout the LTM 6/29/2019 period One of the country’s leading private distributors serving independent restaurants, hea
Slide 11: Reinhart enhances PFG's presence in key geographies
Reinhart enhances PFG's presence in key geographies Geographic benefits Customer benefits Fills out Midwest Increased density of sales representatives enables more face time with customers Strengthens Northeast Leverage combined portfolio to enhance offering to Enhances South customers Per
Slide 12: Significant synergy potential
Significant synergy potential PFG is a disciplined and proven acquirer with a history of successful integration Business functions analyzed during the diligence process included: Procurement, Logistics, Operations and others Cost synergies by business area ($ in millions) Estimated Cost Synergie
Slide 13: Reinhart has benefited from strong and stable topline
Reinhart has benefited from strong & stable topline with focus on increasing margins Net sales Gross profit ($ in millions) ($ in millions) $6,025 $6,125 $820 $835 13.6% 13.6% FY2017 FY2018 FY2017 FY2018 Gross profit margin EBITDA Free cash flow(1) ($ in millions) ($ in millions) $168 $165 $116 $105
Slide 14: Key Investment Highlights
=I — Performance = Food Group
Slide 15: Key Investment Highlights
Key Investment Highlights 1 Attractive Industry Fundamentals 2 Market Leader with Substantial Scale 3 Customer-Centric Business Model 4 Motivated Sales Force Expanding Customers and Channels 5 Track Record of Growing Most Profitable Customers and Brands 6 Disciplined and proven acquirer with further
Slide 16: Attractive industry fundamentals
1 Attractive industry fundamentals Food away from home market size(1) PFG operates in the $299 billion U.S. foodservice ($ in billions) distribution industry $792 $734 $756 $697 $646 − Supplies the $792 billion food-away-from- $586 $610 $499 $513 $504 $520 $553 home industry(1) $445 $473 Demogra
Slide 17: Market leader enhanced by Reinhart acquisition
2 Market leader enhanced by Reinhart acquisition Estimated revenues of top U.S. food distributors (1) ($ in millions) $299,000 $59,646 $29,524 Top 3 $27,375 $116,546 players Reinhart FSA #4 U.S. #10 U.S. distributor distributor $23,300 Other (5) ~3x ~15x Top 10 $10,400 Rest of $23,399 (4) $6,125 $15
Slide 18: Customer-centric business model underpins sustainable growth
3 Customer-centric business model underpins sustainable growth Net Revenue Growth Locally-based decision making and customer service to 200% remain nimble at the point of transaction 186% 180% Salespeople understand customers’ business operations 160% and economics 140% 142% Product assortment
Slide 19: Motivated sales force expanding customers and channels
4 Motivated sales force expanding customers and channels Leading industry independent sales growth Increase in experienced sales Independent case growth last fiscal year personnel provides natural ramp- 6% up 4.9% 5% 3.8% Focus on growth of independent 4% 3.1% (1) business and Performance 3% Bra
Slide 20: Track record of growing most profitable customers and brands
5 Track record of growing most profitable customers and brands Sales strategy Independent foodservice mix Focus on selling to our most profitable customers (independent locations) and selling our most profitable brands (Performance Brands) 33.8% Higher Performance Brand sales drive higher 25.6%
Slide 21: Performance Brands are a key strategic advantage
5 Performance Brands are a key strategic advantage Proprietary brands are a key competitive advantage in the industry − PFG generates around $3 billion in sales of proprietary Performance Brands PFG launched or extended 242 branded items in FY2019 Chefs demand PFG’s Performance Brands and reco
Slide 22: Disciplined and proven acquirer with further opportunities
6 Disciplined and proven acquirer with further opportunities PFG has a strong track record of sourcing, executing and integrating accretive acquisitions Over the past eleven years, PFG has completed 28 acquisitions − Acquisitions have typically been completed at attractive valuation multiples an
Slide 23: Strong free cash flow profile and track record of deleveraging
7 Strong free cash flow profile and track record of deleveraging Robust free cash flow profile developed through investment Strong continued growth in Free Cash Flow (2)… in accretive opportunities over time Free Cash Flow(1) $371 ($ in millions) $336 Successful execution of strategic M&A − Vist
Slide 24: Experienced and invested management team
8 Experienced and invested management team Years Name Industry PFG Title Prior experience George Holm 41 17 Chief Executive Officer Jim Hope 31 5 Chief Financial Officer Pat Hagerty 38 25 EVP, CEO - Vistar Craig Hoskins 29 29 EVP, CEO – PFG Foodservice Brent King 4 4 SVP, General Counsel - PFG Don B
Slide 25: Key takeaways
Key takeaways PFG has a long standing track record of delivering consistent growth with strong momentum Acquisition of Reinhart expands geographic reach and overall scale, enhancing PFG’s attractive customer base and product offerings Acquisition of Eby-Brown enables PFG to enter the fast-grow
Slide 26: Appendix
=I — Performance = Food Group
Slide 27: Foodservice segment
Foodservice segment Provides a “broadline” range of products serving Customer Mix(1) restaurants and other away-from-home concepts FY2019 Sales: $15.1bn Customer Locations(2): 100,000+ − Restaurants account for 84% of sales − Educational institutions, health care facilities and other locations acc
Slide 28: Vistar segment
Vistar segment A leading distributor to vending and office coffee service Customer Mix(1) distributors, theaters, retail impulse, and other channels FY2019 Sales: $4.6bn Customer Locations: 70,000+ Broad ~30,000 SKUs in candy, snacks, beverages, and other items Hospitality/ All Other Travel 5% O
Slide 29: Statement regarding non-GAAP financial measures
Statement regarding non-GAAP financial measures This presentation includes financial measures that are not calculated in accordance with GAAP, including Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Free Cash Flow Conversion and Adjusted Diluted EPS. Such measures are not recognized ter
Slide 30: Adjusted EBITDA reconciliation – PFG
Non-GAAP financial measures Adjusted EBITDA reconciliation – PFG Pro Forma Historical As Adjusted Three months Fiscal year Fiscal year ended ended ended June 30, June 29, June 28, June 27, July 2, July 1, June 30, June 29, September 29, September 28, June 29, ($ in millions) 2012 2013 2014 2015 2016
Slide 31: Adjusted Diluted EPS reconciliation – PFG
Non-GAAP financial measures Adjusted Diluted EPS reconciliation – PFG Fiscal year ended Three months ended ($ in millions, except share and per share data) June 29, 2019 September 28, 2019 Diluted earnings per share (GAAP) $ 1.59 $ 0.34 Impact of non-cash items 0.19 0.06 Impact of acquisition, integ
Slide 32: Performance Food Group
——— IT PF G Performance — Food Group