Aramark · NYSE:ARMK
Aramark — Q2 2023 Earnings Presentation
24 slides from Aramark's earnings presentation, May 9, 2023
Slide 1: Aramark Business Review
Aramark Business Review MAY 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements Special Note About Forward-Looking Statements This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect our current expectations as to future events based on certain assumpti
Slide 3: Agenda
Agenda 1 Strong Business Performance 2 Positioning Uniform Services Spin-Off for Success 3 Additional Balance Sheet Optimization 4 Fiscal 2023 Outlook 3
Slide 4: Strong Business Performance
Strong Business Performance Second Quarter ➢Revenue +19%; Organic Revenue +19% o Performance driven by net new business, pricing, and base business growth o Contributions to growth from every reportable segment ➢Operating Income +28%; Adjusted Operating Income (AOI) +30%1 o Operating Income Margin +
Slide 5: Driving Revenue Growth Across All Segments
Driving Revenue Growth Across All Segments +19% Organic Growth Driven by net new business, pricing, and base business growth with contribution from every reportable segment ($67) +19% +31% +6% Organic Growth Organic Growth Organic Growth *Charts displayed in $ millions 5
Slide 6: Positioning Uniform Services Spin-Off for Success
Positioning Uniform Services Spin-Off for Success - Creating two industry-leading, distinctly focused independent companies - Continued to make significant progress with respect to the spin-off of the Uniforms business - Will continue to monitor macroeconomic and capital market conditions, as well a
Slide 7: Additional Balance Sheet Optimization
Additional Balance Sheet Optimization Continued Balance Sheet Strengthening Since quarter-end, repaid approximately $530 million in total debt In early April, completed divestiture of 50% non-controlling interest in AIM Services Newly signed agreement to sell portion of ownership stake in San Antoni
Slide 8: Adjusted Operating Income Growth and Margin Expansion
Adjusted Operating Income Growth and Margin Expansion Second Quarter AOI AOI Margin $225 $213 4.8% 4.7% $200 4.7% $175 $166 4.6% $150 4.5% +40bps $125 +30% 4.4% $100 4.3% 4.3% $75 $50 4.2% $25 4.1% $0 4.0% Q2 '22 Q2 '23 Q2 '22 Q2 '23 Improvement was driven by operating leverage from higher revenue g
Slide 9: Quarterly Cadence of Free Cash Flow
Quarterly Cadence of Free Cash Flow Free Cash Flow (in millions) Q1 Q2 Q3 Q4 FY $229 FY23 As expected, Q2 ’23 was a cash inflow ($706) $717 Historic Q1 and Q4 experience large outflow/inflow driven by seasonal start up and shut down of Collegiate $278 $330 Hospitality and Destination businesses FY22
Slide 10: Fiscal 2023 Outlook
Fiscal 2023 Outlook Organic Revenue growth >13%, comprised of… Global FSS ~15% Uniform Services ~5.5% Adjusted Operating Income growth ~32%, comprised of… Global FSS ~45% Uniform Services ~7% Free Cash Flow ~$475 million Deferred payroll taxes related to the CARES Act $64 million Spin-off and restru
Slide 11: Quarterly Cadence of AOI Margin
Quarterly Cadence of AOI Margin AOI Margin Historic “U-shaped” cadence driven primarily by higher profitability in Q1 8.7% and Q4 related to seasonal peak activity in Education sector and the 8.1% Sports & Entertainment and Destinations businesses Drivers of AOI Margin 6.9% • Typical seasonality • O
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Slide 13: Appendix
APPENDIX aramark 3 WW Reach For Remarkable SERVICE. INNOVATION. GROWTH 13
Slide 14: Revenue by Segment
Revenue by Segment Q1 '23 Q2 '23 H1 '23 Three Months Ended Change Three Months Ended Change Six Months Ended Change 12/30/22 12/31/21 % 3/31/23 4/1/22 % 3/31/23 4/1/22 % Revenue (as reported) FSS United States: Business & Industry $ 331.5 $ 230.7 44% $ 343.2 $ 243.8 41% $ 674.7 $ 474.5 42% Education
Slide 15: CapEx and Client Payments
CapEx and Client Payments ($ in thousands) Three Months Ended Three Months Ended Six Months Ended 12/30/22 12/31/21 3/31/23 4/1/22 3/31/23 4/1/22 Purchases of property and equipment and other $ 102,559 $ 73,722 $ 100,352 $ 99,313 $ 202,911 $ 173,035 Payments made to client contracts 33,868 8,353 51,
Slide 16: Selected Operational and Financial Metrics
Selected Operational and Financial Metrics Adjusted Revenue (Organic) Adjusted Revenue (Organic) represents revenue growth, adjusted to eliminate the effect of certain material acquisitions and the impact of currency translation. Adjusted Operating Income Adjusted Operating Income represents operati
Slide 17: Non-GAAP Schedules
Non-GAAP Schedules e h For Remarkable aramark 3” » neat ERVICE. INNOVATION. GROWTH 17
Slide 18: Adjusted Operating Income Margin
Adjusted Operating Income Margin 18
Slide 19: Adjusted Operating Income Margin
Adjusted Operating Income Margin ARAMARK AND SUBSIDIARIES RECONCILIATION OF NON-GAAP MEASURES ADJUSTED OPERATING INCOME MARGIN (Unaudited) (In thousands) Three Months Ended Three Months Ended Six Months Ended Three Months Ended Three Months Ended Fiscal Year Ended December 30, 2022 March 31, 2023 Ma
Slide 20: Adjusted Operating Income Margin
Adjusted Operating Income Margin ARAMARK AND SUBSIDIARIES RECONCILIATION OF NON-GAAP MEASURES ADJUSTED OPERATING INCOME MARGIN (Unaudited) (In thousands) Three Months Ended Three Months Ended Three Months Ended Three Months Ended Three Months Ended Three Months Ended June 29, 2018 September 28, 2018
Slide 21: Adjusted Net Income & Adjusted Earnings Per Share
Adjusted Net Income & Adjusted Earnings Per Share 21
Slide 22: Free Cash Flow
Free Cash Flow ARAMARK AND SUBSIDIARIES RECONCILIATION OF NON-GAAP MEASURES FREE CASH FLOW (Unaudited) (In thousands) Three Months Ended Three Months Ended Six Months Ended Three Months Ended Nine Months Ended Three Months Ended Fiscal Year Ended December 30, 2022 March 31, 2023 March 31, 2023 June
Slide 23: FSS International excluding Government Reimbursements
FSS International excluding Government Reimbursements ARAMARK AND SUBSIDIARIES FSS INTERNATIONAL SEGMENT RECONCILIATION OF NON-GAAP MEASURES ADJUSTED OPERATING INCOME MARGIN COMPARISON (Unaudited) (In thousands) Three Months Ended March 31, 2023 Revenue (as reported) $ 1,073,007 Effect of Currency T
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