Sysco Corporation · NYSE:SYY
Sysco — Investor Day (May 2024)
109 slides from Sysco's investor day presentation, May 22, 2024
Slide 1: Investor Day
Investor Day May 22, 2024 | NYSE
Slide 2: Kevin Kim, VP of Investor Relations
KEVIN KIM VICE PRESIDENT OF INVESTOR RELATIONS
Slide 3: Forward-Looking Statements
Forward-Looking Statements Statements made in this presentation that look forward in time or that express management’s beliefs, expectations or hopes are forward-looking statements under the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the views of manage
Slide 4: Agenda
Time Event 9:00 AM – 12:00 PM Investor Day Presentation & Q&A E.T. • Kevin Hourican, Chair of the Board and Chief Executive Officer • Greg Bertrand, EVP, Global Chief Operating Officer • Neil Russell, Chief Administrative Officer • Victoria Gutierrez, Chief Merchandising Officer • Kenny Cheung, EVP,
Slide 5: Kevin Hourican, Chair and CEO
KEVIN HOURICAN CHAIR OF THE BOARD AND CHIEF EXECUTIVE OFFICER
Slide 6: Executive Summary
We are a purpose driven corporation, with tangible differentiating assets, and a clearly defined strategy Sysco operates within a large and growing Total Addressable Market: $371billion. We are growing, profitably, faster than the overall market Sysco has an industry leadership position in the follo
Slide 7: Market Leader in the Highly Fragmented and Growing Foodservice Distribution Industry
Market Leader in the Highly Fragmented and Growing Foodservice Distribution Industry Total Addressable Market Since 2000 $371 B $353 B $360 B $300 B 17% $268 B $224 B $231 B $197 B $161 B $371B 2000 2005 2010 2015 2020 2021 2022 2023 2024 Source: Technomic U.S. Foodservice Industry Wallchart for Cal
Slide 8: Sysco is Winning in the Marketplace
Sysco is Winning in the Marketplace Sysco has Outperformed the Total Foodservice Market U.S. Foodservice Operations Revenue Indexed to 2019 vs Technomic Market 100 index Estimated Indexed to 2019 FY FY2021 2021 FY FY2022 2022 FY 2023 FY2023 FY 2024 FY2024 Sysco Market Excl Sysco Source: Sysco U.S. O
Slide 9: Sysco Business at a Glance
Sysco Business at a Glance Sales by Segment Other SYGMA 1% 334 >74,000 10% ~$79 billion Distribution Global in Annual Sales Facilities Colleagues International Foodservice ~7,500 ~725K Operations #1 Market 19% Sales Customer Professionals Share1 Locations U.S. Foodservice Operations 70% 1 Leading ma
Slide 10: Sysco Has Consistently Grown Sales for 50+ Years
Sysco Has Consistently Grown Sales for 50+ Years Sales by Customer Type Travel and Leisure Fiscal Year Sales Other 8% $80 15% Billions $70 $60 Healthcare 7% $50 $40 Education and $30 Government $20 8% $10 Restaurants $0 62% 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1
Slide 11: We Have Gained Share Domestically and Internationally
We Have Gained Share Domestically and Internationally Ireland: #1 Position United States: #1 Position 18.2% 14.9% 17.1% $4B 15.4% TAM $360B TAM 2019 2023 2019 2023 Great Britain: #1 Position 12.7% 10.1% Canada: #1 Position $26B TAM 25.2% 24.0% 2019 2023 $22B Sweden: #2 Position TAM 20.3% 19.7% 2019
Slide 12: We Have Substantially Grown Our Specialty Portfolio
We Have Substantially Grown Our Specialty Portfolio. We Believe Specialty Will Continue to Deliver Strong Top and Bottom-Line Growth Over the Next Three Years. $9.3B Share of Specialty Market $8.0B $6.8B Sysco Specialty Share of Specialty Market $3.8B 9.8% 8.4% 7.7% 5.9% FY21 FY22 FY23 FY24 Anticipa
Slide 13: Sysco is Led by a Capable & Experienced Management Team
Sysco is Led by a Capable Ronald L. Phillips & Experienced Management Team Executive Vice President and Chief Human Resources Officer Tenure 3 years Greg D. Bertrand Jenny Johnson Daniel T. Purefoy Executive Vice President and Global Chief Senior Vice President and Chief Senior Vice President and Ch
Slide 14: Sysco's Purpose Motivates our Colleagues
Sysco’s Purpose Motivates our Colleagues, Fuels our Customer Engagements, and Prioritizes our Work Focus
Slide 15: Our Leadership Team is Focused on Improving Today, While Transforming for Tomorrow
Our Leadership Team is Focused on Improving Today, While Transforming for Tomorrow Continue to Advance Improving Our Core Business Our Recipe For Growth Local Case Growth Merchandising Leverage Supply Chain Efficiency and Costs
Slide 16: Improving Our Core Business Performance
Improving Our Core Business Performance Supply Chain Efficiency Local Case Growth Merchandising Leverage and Cost Margin Operating Volume Management Expenses
Slide 17: Actions Being Taken to Drive Local Sales / Volume Growth
Actions Being Taken to Drive Local Sales / Volume Growth Incremental Sales Consultant Total Team Optimize Sales Sales Performance Selling – Driving Consultant Headcount Management Specialty Compensation – CRM tools
Slide 18: Actions Being Taken to Improve Merchandising Leverage
Actions Being Taken to Improve Merchandising Leverage Strategic Sysco Brand – Price Optimization – Italian and Asian Sourcing New Architecture, Relevant & Agile Expansion International Pricing Expansion & CMU focus
Slide 19: Actions Being Taken to Improve Supply Chain Efficiency and Cost
Actions Being Taken to Improve Longer-term, we are Supply Chain Efficiency and Cost focused on key items that improve operating expense • Routing Technology • Omni-channel • DC Automation Employee Supply Chain Colleague Product Retention Productivity Safety Shrink
Slide 20: Our Leadership Team is Focused on Improving Today, While Transforming for Tomorrow
Our Leadership Team is Focused on Improving Today, While Transforming for Tomorrow Continue to Advance Improving Our Core Business Our Recipe For Growth Local Case Growth Merchandising Leverage Supply Chain Efficiency and Costs
Slide 21: Our Recipe For Growth
Our Recipe For Growth DIGITAL NPS Improvement Personalization Engine & Website Improvement Pricing Automation STRATEGY | How We Win We will grow, profitably, faster than the overall market PRODUCTS AND SOLUTIONS Italian & Asian Expansion Sysco Brand Acceleration Strategic Sourcing SUPPLY CHAIN Impro
Slide 22: Digital
Digital Improved Product Deals For You Tab Recommendations Improved Improved Suggested Order Pricing Agility 22
Slide 23: Products and Solutions
Products and Solutions Italian Asian Expansion Expansion Strategic Sysco Brand Sourcing Acceleration 23
Slide 24: Supply Chain
Supply Chain Improved Improved Fill Productivity Rates Future: Omni-channel Improved Upgraded routing NPS 10 new DCs globally (capacity expansion) 24
Slide 25: Customer Teams
Customer Teams Adding ‘net’ ~400-500 Sales Sysco Your Way Professionals Per Year Sysco Perks! Total Team Selling 25
Slide 26: Future Horizons
Future Horizons Continued M&A Structural (Focus on Cost-Out Specialty) Specialty IFG and Acceleration International 26
Slide 27: We Have Evolved Sysco's Business Model and Operational Approach
We Have Evolved Sysco’s Business Model and Operational Approach, Complementing Our Growth Strategy
Slide 28: We Have Meaningfully Transformed Our Business Over Past Four Years
We Have Meaningfully Transformed Our Business Over Past Four Years FUNCTION CURRENT STATE % DONE Strategic sourcing & product innovation Merchandising Hybrid approach, with commodity products managed centrally and fresh products managed locally 31 Regional leaders; consistent selling approach Sales
Slide 29: Delivering Many Wins & Identifying Areas for Focus & Improvement
Delivering Many Wins & Identifying Areas for Focus & Improvement Highlights of Wins Opportunities to Improve Global Operating Model Pricing Agility Digital Capabilities Supply Chain Fill Rate International Growth and Profitability Supply Chain Retention and Productivity Capacity Investments For Futu
Slide 30: Why Sysco?
Why Sysco? Sysco will Deliver Strong Financial Results in the Backdrop of a Resilient Industry Food Away from Home is a Stable and Growing Sector Sysco is Gaining Market Share with Industry Leading Profitability Metrics Strong Balance Sheet and Robust Free Cash Flow A Highly Skilled and Purpose-Driv
Slide 31: Greg Bertrand, EVP, Global Chief Operating Officer
GREG BERTRAND EVP, GLOBAL CHIEF OPERATING OFFICER
Slide 32: Sysco Has an Opportunity to Significantly Grow Local Sales Globally
Sysco Has an Opportunity to Significantly Grow Local Sales Globally Accelerating Growth Vectors U.S. Local Sales Specialty International
Slide 33: Local Sales Excellence Globally: The Core Four
Local Sales Excellence Globally: The Core Four Incremental Sales Consultant Total Team Optimize Sales Sales Performance Selling – Driving Consultant Headcount Management Specialty Compensation – CRM tools
Slide 34: Our Salespeople Remain a Differentiating Asset
Incremental Sales Headcount Our Salespeople Remain a Differentiating Asset and Core to Sysco’s Growth Strategy USBL Local Sales Headcount +1,200 to +1,500 FTEs ~7,200 to Competitive Advantage of Local Salespeople ~7,500 ~6,000 Attribute Score (0 – 10 Scale) Gap vs. Other Broadliners Sales rep relati
Slide 35: What Is Total Team Selling? What Is New?
Total Team Selling Driving Specialty What Is Total Team Selling? What Is New? Fosters collaboration to sell together, Collaboration is evolving beyond produce and protein to a strategy to Broadline + Specialty Sales Teams work together to displace competitors and gain market share in all categories
Slide 36: Accelerated Growth When We Leverage Total Team Selling
Total Team Selling Driving Specialty Accelerated Growth When We Leverage Total Team Selling Average Sales per Customer, Annualized USBL + Two Specialty Companies 6X more Avg. Sales per Customer USBL + One Specialty Company 3X more Avg. Sales per Customer USBL Only
Slide 37: Sales Compensation Journey
Optimize SC Compensation Sales Compensation Journey Post Covid: FY24 FY25 FY21 • Shift from commissions to • Established YOY growth as • Remix pay from base bonus Base + Bonus central element of bonus • Increase importance of profit • Bonus based largely on initiative • Uncapped a portion of bonus
Slide 38: Specialty Growth Vectors
Specialty Growth Vectors • Leading U.S. • High-growth Asian • Leading U.S. • Leading U.S. • Leading U.S. fresh specialty meat platform specialty Italian specialty produce platform platform platform foodservice • Planned U.S. equipment and • Expanding Grab-n- • Expanding expansion beyond • Over 60% g
Slide 39: Winning with Specialty
Today, 50% of Total Sysco Customers have quick Winning with Specialty access to Specialty capabilities, products and experts due to our many locations Specialty Company Current Footprint Expansion Next Steps • Recent expansion in Southern California through acquisition of Jacmar Foodservice • Future
Slide 40: Sysco's Go-to-Market Strategy is Global
Global Operating Model Sysco’s Go-to-Market Strategy is Building on #1 Market Global Positions Sysco Your Way Strategic Sourcing Sysco Perks! Sysco Brand Penetration Sales Center of Excellence – Canada & US Total Team Selling Operations Best Business Practices & Tools Talent Development and From FY1
Slide 41: Global Operating Model - Increased Penetration of Sysco Brand Globally
46.8% USBL Local Case Mix Global Operating Model - Increased Penetration of Sysco Brand Globally 40.1% Canada Local Sales Mix 36.0% Europe Local Sales Mix Accelerating Sysco Brand Mix Europe Example Globally to Improve Profitability and • Brand architecture 12.0% Customer Retention standardization u
Slide 42: Operational Excellence: Improved Operations Execution and Leveraging Technology
Supply Chain Productivity Operational Excellence: Improved Operations Execution and Leveraging Technology
Slide 43: Our Five Global Supply Chain Levers
Our Five Global Supply Chain Levers Are Derived From Being Brilliant at the Basics and Layering in Technology to Go Further Retention Productivity Safety Shrink Transportation Improvement Efficiency Excellence Reduction Optimization • Improved Quality • Staffing to Volume • Observations and • Improv
Slide 44: Our Five Global Supply Chain Levers
Our Five Global Supply Chain Levers Are Derived From Being Brilliant at the Basics and Layering in Technology to Go Further Retention Productivity Safety Shrink Transportation Improvement Efficiency Excellence Reduction Optimization >15% >15% Pieces per >13% PPLH Incident Reduction Trip+ Low to poin
Slide 45: In Summary
In Summary • Commitment to grow Local Sales globally • Continue to accelerate growth in our Specialty Business through new acquisitions and expanded capabilities • Leverage our global footprint to fuel our growth and execute our strategy the Sysco Way • Reduce cost by improving retention and being B
Slide 46: Neil Russell, Chief Administrative Officer
NEIL RUSSELL CHIEF ADMINISTRATIVE OFFICER
Slide 47: Sysco's Recipe For Growth is Creating Multiple Vectors to Drive Growth
DIGITAL Sysco’s Recipe For Growth Enrich the customer experience through personalized digital tools that reduce is Creating Multiple friction in the purchase experience and introduce innovation to our customers Highlights today: Personalization, Marketplace Vectors to Drive Long-term, Profitable PRO
Slide 48: Sysco Your Way: Unique Service and Delivery Model for Restaurant-dense Neighborhoods
Customer Teams is a Game-changer – Providing a Unique Service and Delivery Model for North End - Boston ‘Restaurant-dense’ Neighborhoods TARGET NEIGHBORHOODS ARE: Operator-dense SUPERIOR DELIVERY FOCUSED TEAM-SELLING FLEXIBILITY TO NEIGHBORHOOD WITH DEDICATED SUPPORT Small, walkable geography • 6 da
Slide 49: Sysco Your Way is Live Globally in 500+ Neighborhoods
Customer Teams is Live Globally in 500+ Neighborhoods Driving Double-digit Top and Bottom-line Growth $400M+ Global program, driving growth with new and existing customers Additional SYW growth opportunities exist INCREMENTAL SALES GROWTH IN At scale in U.S. and expanding Grow in existing neighborho
Slide 50: Sysco Perks! Loyalty Program for Top Independent Customers
Customer Teams Sysco Perks! Customers are… is a Pioneering Customer Loyalty Program for Our Top 2X the size of the Independent Customers average Independent customer Benefits Include: • Flexible Delivery up to 6 days per week 50%+ less likely • Exclusive Offers and Monthly Promotions to churn 5/1 •
Slide 51: Sysco Perks! Customers are Highly Satisfied and Loyal
Customer Teams Customers are Highly Satisfied and Loyal to Sysco $200M+ INCREMENTAL SALES GROWTH NPS Scores TO DATE 61 11% 53 FY24 – FY27E SALES CAGR 42 35 36 $500M+ 16 PROJECTED SALES GROWTH AT MATURITY Broadline Sysco Perks! will continue to grow competitors Independents • Increased member enrollm
Slide 52: Personalization Drives Profitable Growth
Digital Personalization is Bringing Data-informed, Unique $450M Offers to Foodservice That Drive Profitable Growth INCREMENTAL SALES GROWTH TO DATE Leveraging Our Data and Relationships… …to Deliver Relevant and Value Adding …by a Team Using B2C Tactics to Drive 15% Experiences… Engagement and Growt
Slide 53: How We Deliver Personalized Experiences to Different Customers
Digital DEMO Let’s Look at How We Deliver Personalized Experiences to Different Customers1 High end Italian High end Chinese High end Burgers & Mid-level Burger Budget-friendly restaurant in restaurant in Los Steak restaurant in restaurant in Burger restaurant in Brooklyn, NY Angeles, CA Miami, FL H
Slide 54: Digital Demo: Early Tenure High End Restaurant
Digital DEMO For an early tenure high end burger/steak restaurant, our eCommerce experience is personalized with relevant recommendations and content
Slide 55: Digital Demo: Mature Customers with Sysco Brand Affinity
Digital DEMO For more mature customers with affinity to Sysco Brand, we currently provide them with opportunities to swap to Sysco Brand while they are ordering
Slide 56: Digital Demo: Price Sensitive Customers
Digital DEMO Today, customers who are price sensitive receive deals and offers to grow their share of wallet with us with content and deals personalized to them and campaign themes
Slide 57: Digital Demo: Banners, Popups, and Eyebrows
Digital DEMO Banners, Popups, and Eyebrows help draw customers’ attention to Get a $190 reward when you order $6,900 by 04/27/2024! promotions and deals that are most relevant to As of 04/16/2024, you have spent $2,580 Activate Offer them
Slide 58: Digital Demo: Multi-channel Personalized Experience
Digital DEMO Customers’ personalized experience goes beyond Shop and is multi-channel, including email, SMS, and even their trusted sales consultants
Slide 59: Digital Demo: Multi-channel Personalized Experience
Digital DEMO Customers’ personalized experience goes beyond Shop and is multi-channel, including email, SMS, and even their trusted sales consultants
Slide 60: Making Our Sales Team More Effective Through Personalized Insights
Digital DEMO We Are Making Our Sales Team More Effective Through Customer-level Personalized Insights Personalized Targeted Desired Opportunity SC Action Outcome Purchases beef patties, Vendor-funded SC wins Fries, growing buns, and cheeses promotional offer for account by 15% Does not purch
Slide 61: Third Party Products on Our E-commerce Platform: Sysco Marketplace
Digital We Recently Started to Offer Third Party Products on Our E-commerce Platform Shop Broadline Assortment Sysco Marketplace Products directly Third Party products available from available to customers our DCs Marketplace offers Specialty Products to Broadline more breadth and Specialty Company
Slide 62: Sysco Customers Will Have Increased Breadth and Depth of Products
Digital Sysco Customers Will Have Increased Breadth and Depth of Products They Need $25M+ PROJECTED PROFIT (EBIT) POTENTIAL AT MATURITY Broader Assortment Higher Scalability Increased Seamless Shopping 10,000+ new products with no extra capacity Profitability Fully integrated CX • Niche (e.g., organ
Slide 63: Our Approach to Responsible Growth
Future Horizons Our Approach to Responsible Growth… Global Good donations and PEOPLE volunteerism to fight hunger Drive business growth through the PRODUCTS sustainability of our products Enable customers to achieve their PLANET goals as a sustainable supply chain leader
Slide 64: Our Values & Targets Drive Trust and Alignment with Stakeholders
Future Horizons Values driving value Our Values & Targets Drive Trust and Alignment with Our Stakeholders • Driving sales growth through our One Planet. One Table. product assortment – the largest in foodservice with +3,500 products • Gaining advantage with customers through sourcing sustainable and
Slide 65: Our Winning Recipe
Fp RECIPE FOR GROWTH Our Winning Recipe Ml Game-changing growth programs Ml Continued differentiation (expanding our moat)
Slide 66: Victoria Gutierrez, Chief Merchandising Officer
VICTORIA GUTIERREZ CHIEF MERCHANDISING OFFICER
Slide 67: Merchandising is a Key Lever to Industry-leading Gross Margins and Growth
Merchandising is a Key Lever to Delivering Industry-leading Gross Margins and Growth Sysco Brand Strategic Sourcing Digital Cuisine Expansion Accelerating Sysco Leveraging Sysco’s size Leading the industry in Expanding offerings Brand growth globally to and scale to drive bringing our portfolio for
Slide 68: Sysco Brand Products Represent a $22 Billion Global Portfolio
Sysco Brand Products Represent a $22 Billion Global Portfolio Sysco Brand Sales as a % We have 11 brands >$500M1 of Local Cases2 ~$5B ~$1B 47.2% 46.8% 44.5% ~$500M 1 - US Foodservice Sales. 2 - U.S. Broadline
Slide 69: Investing in New Capabilities to Continue to Grow Sysco Brand Globally
Sysco Brand Investing in New Capabilities to Continue to Grow Sysco Brand Globally Sysco Brand will grow > $1 Billion incremental revenue each of the next three years • Focusing where it matters: top-performing items and new innovation • Partnering with National Customers to continue to drive Sysco
Slide 70: Introducing Sysco Brand Alternatives in The Moments That Matter
Sysco Brand Introducing Sysco Brand Alternatives in The Moments That Matter Swap & Save: 45k+ local customers have engaged Customer Savings: >10% average
Slide 71: Evolving Brand Visuals to Better Meet Customer Needs
Sysco Brand Evolving Brand Visuals to Better Meet The Needs and Expectations of Our Customers Use Less, Pay Less Good, Better, Best Transitioning packaging from white to kraft Revisiting portfolio, brand positioning on 270M boxes1, using 17% less material, and visual identity to meet the needs of ~3
Slide 72: Continuing to Evolve Strategic Sourcing
Strategic Sourcing Continuing to Evolve Strategic Sourcing • Increasing overall Supply Chain resilience and supplier fill rates by introducing new Suppliers to Sysco • Finding ways to stay nimble: optimizing at a global level for key items, while ensuring we take advantage of local opportunities 3%
Slide 73: Leveraging New Cost Management Tool
Strategic Sourcing Leveraging New Cost Management Tool Item Cost Model built Negotiations for based on Models run for proactive reductions Choice of margin raw materials 10k products and ahead of market expansion 500+ indices vs. passing savings on
Slide 74: Running the Play Internationally: Strategic Sourcing Levers
Strategic Sourcing Running the Play Internationally: Strategic Sourcing Levers Continuing to Expand Cost savings 5.3% 4.7% 3.6% 3.1% Canada Great Britain Ireland France Imported Shrimp global sourcing savings +1% +9% +8% U.S. Europe Canada
Slide 75: Leveraging New Digital Capabilities to Commercialize Supplier Investments
Digital Leveraging New Digital Capabilities to Commercialize Supplier Investments • Tailoring personalized offers to customers via Shop, E-mail Campaigns, and compelling online offers • Driving engagement and growth through more breadth and depth of products, including specialty, 3rd party, local...
Slide 76: Shop Priorities Improving Customer Engagement
Digital +6% Shop Priorities Improving Weekly Customer Visits Customer Engagement • Investing in ways to make Shop easier and more practical to use weekly; e.g. Shop en Español +2% Number of Customer Orders • Continuously refining navigation, deals, banners, and cuisine pages to drive shopping behavi
Slide 77: Expanding Sysco's Italian Cuisine Capabilities
Cuisine Expansion Expanding Sysco’s Italian Cuisine Capabilities • Pursuing $11.3B opportunity with expansion of Italian assortment • Focusing on key pizza ingredients encompassing critical national brands, with a healthy mix of Sysco Brand • Leveraging both Greco’s and Sysco’s resources to capture
Slide 78: Expect Asian Foods to Deliver ~$500M in Incremental Revenue by FY27
Cuisine Expansion Expect Asian Foods to Deliver ~$500M Specialized Sales Model in Incremental Revenue by FY27 • Pursuing $10B opportunity with expansion of Asian assortment • 50% of potential opportunity is in states where Sysco is already beginning expansion work Specialty + Sysco Brand • Operating
Slide 79: Continuing to Transform Merchandising to Support Industry-leading Margins
Key Takeaways Continuing to Transform Merchandising to Support Industry-leading Margins and Fund Growth Sysco Brand Strategic Sourcing Digital Cuisine Expansion Accelerating Sysco Leveraging Sysco’s size Leading the industry in Expanding offerings Brand growth globally to and scale to drive bringing
Slide 80: Kenny Cheung, EVP and Chief Financial Officer
KENNY CHEUNG EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
Slide 81: Investor Feedback
Investor Feedback Deliver consistent performance and sustainability of earnings Set achievable targets and expectations Improve local case growth Provide more clarity around execution priorities Drive profitability through cost improvements and productivity
Slide 82: Achievements – Advancing Our #1 Position
Achievements – Advancing Our #1 Position Net Sales Operating Cash Flow ($B) ($B) Attractive Return Profile ~$3 ~6% ~$79 ~5% CAGR CAGR #1 Market Share + $60 $2.4 Industry Leading • Gross Margins • EBITDA Margins • Free Cash Flow • ROIC • Investment Grade Balance Sheet FY19 FY24E FY19 FY24E Note: Year
Slide 83: Framing Our Algorithm for Growth
Framing Our Algorithm for Growth Sustainable Growth Operational Excellence Balanced Capital Return • Leverage competitive advantages to • Optimize gross profit dollars • Balanced capital allocation drive volume growth in our core • Realize positive operating leverage between investing, capital busin
Slide 84: Sysco's Financial Growth Algorithm
Sysco’s Financial Growth Algorithm Sales Growth Adj. EPS Growth1,3 Total Shareholder Return2 4 – 6% 6 – 8% 9 – 11% 6 – 8% Adj. Operating Income Growth3 Algorithm for growth is based on 3-Year plan. 1 Includes impact of global minimum tax headwinds to EPS growth in FY25. 2 Assumes no change in P/E mu
Slide 85: Driving Sustainable Sales Growth
Sustainable Growth Driving Sustainable Sales Growth Accelerating Top-line Growth Assumptions Growth Vectors 90% Core Drivers + 1.5% - 3.5% Volume Local/Chain (+Low to Mid-Single Digit Sales Growth) + 2% Inflation Specialty1 (+High-Single Digit Sales Growth) + 0.5% M&A International (+Mid to High-Sin
Slide 86: Customer Mix Benefits
Sustainable Growth Customer Mix Benefits National Customers Advantages & Local Customers Advantages +Low to +Mid Route Density Higher Margin Customer Single Digit Sales Growth Steady, Contract Driven FCF Sysco Brand Penetration TARGET CONTRIBUTION LOCAL/NATIONAL CUSTOMERS Portfolio Diversification E
Slide 87: Accretive Specialty Growth
Sustainable Growth +High Single Accretive Specialty Growth Digit Sales Growth $9B+ +11% TARGET CONTRIBUTION SPECIALTY FY24E Net Sales FY19-24E Net Sales CAGR • Largest specialty meat business Enhanced Margin Significant Cross Selling in the U.S. Profile Opportunities • Largest fresh produce business
Slide 88: Focus on International
Sustainable Growth Focus on International +Mid to +High International Net Sales ($B) Single Digit +25% $14.4 Sales Growth $11.5 Case Study: Ireland TARGET CONTRIBUTION Recipe for Growth Benefits INTERNATIONAL from Global Operating Model • Contributing high growth with #1 market share • Local penetra
Slide 89: Enable Growth with Investments
Sustainable Growth Enable Growth with Investments Target Capital Expenditures (~1% of sales) Total capital includes growth and maintenance over the Technology Fleet Buildings next three years Advancements in B2B tech Investments in 10 new facilities stack enhances the modern fleet allows delivering
Slide 90: Systematic and Disciplined Approach to M&A
Sustainable Growth 0.5% Sales Growth Systematic and Disciplined Approach to M&A TARGET CONTRIBUTION M&A M&A Philosophy Framework & Objective • Enhance Sysco’s customer proposition • Businesses that benefit from and enhance our strategic advantages • Retain competitive advantages • Synergy potential
Slide 91: Spotlight on Recent M&A
Sustainable Growth Spotlight on Recent M&A Strategic Rationale Strategic Rationale • Leading Independent Italian Specialty Distributor • Leading Distributor of Foodservice • Key Owned and Exclusive Brands Equipment, Supplies and Disposables • Cross-selling Opportunity with Sysco Business • Adds Stra
Slide 92: Optimizing Gross Profit Dollars Drivers
Operational Excellence Optimizing Gross Profit Dollars Drivers Customer Mix Sysco Brand: Sysco Brand Margin $1B+ of Incremental Sales each of the next three Management years TARGET CONTRIBUTION Price Optimization Strategic Sourcing
Slide 93: GSC Expense Discipline Through Next 3 Years
Operational Excellence GSC Expense Discipline Through Next 3 Years GSC Expenses (% of Sales) GSC Corporate Expenses 2.0% • Target: ~1% of sales by FY27E, and GSC (HQ) costs 1.6% improving each year Target: ~1% of Sales • Cost out opportunities: GSC cost discipline, 1.2% refine professional fees and
Slide 94: Supply Chain Drivers
Operational Excellence Supply Chain Drivers Retention Leveraging Our Scale to Achieve Positive Operating Leverage Productivity Efficiency • Expected to return to 2019 productivity levels through basket of supply chain improvements Transportation • Efficient and Scaled Network: 334 distribution Optim
Slide 95: Solid FCF Growth & Conversion Rates Expected
Operational Excellence Solid FCF Growth & Conversion Rates Expected Free Cash Flow1 ($B) Adj. EBITDA/FCF1 Conversion Rates Target FY25E-FY27E $2.0 +15% $1.7 ~50% • FCF will fuel capital allocation priorities of investing in the business and returning cash back to shareholders FY19 LTM 1 See Non-GAAP
Slide 96: Attractive Performance and Return Profile
Attractive Performance and Return Profile Sysco delivers better performance and returns relative to Consumer Staples peers, providing attractive value opportunity for potential investors Revenue Growth EPS Growth ROIC2,5 Dividend Yield3 NTM P/E4 Next 3-Year CAGR1 Next 3-Year CAGR1 16.4% 2.7% 17.7x 1
Slide 97: Underpinned by Balanced Capital Allocation
Underpinned by Balanced Capital Allocation 1 2 3 Capex Commitment to Balanced Investments ~1% IG with Leverage Shareholder of Annual Sales Target of Return with 2.5 – 2.75x1 Growing Dividend Maintain Invest for Return Cash to a Strong Growth Shareholders Balance Sheet 1 In arriving at Adjusted EBITD
Slide 98: Over $4.1 Billion in Share Repurchases Over 5 years
Total Returns Over $4.1 Billion in Share Repurchases Over 5 years Cumulative Share Repurchase ($ B) Share Repurchase Approach ~$7 • Target: Share repurchases of ~$1 Billion per year will fluctuate based on level of capital expenditures and M&A $4.1 • Contributes to shareholder return algorithm • Str
Slide 99: Commitment to Growing Dividend
Total Returns Commitment to Growing Dividend Annual Dividend ($ B) Dividend Approach ~5% $1.0 • Expected to return over $3 billion of cumulative CAGR dividends in the next 3 years $0.8 • Target: Operate within a healthy payout ratio of 40%-50% of Adj. EPS • Dividend aristocrat with consistent track
Slide 100: Compelling Investment Opportunity
Compelling Investment Opportunity 1 Market leader in foodservice with key strategic advantages and significant scale, benefitting from food away from home trends 2 Resilient business model, balanced across end geographies, channels and product mixes 3 Multiple vectors of growth in core volumes and t
Slide 101: Sysco: At the heart of food and service
S/sco At the heart of food and service
Slide 102: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS [: the heart of food and service
Slide 103: Impact of Certain Items
Impact of Certain Items The discussion of our results includes certain non-GAAP financial measures, including EBITDA and adjusted EBITDA, that we believe provide important perspective with respect to underlying business trends. Other than EBITDA and free cash flow, any non-GAAP financial measures wi
Slide 104: International Foodservice Operations Non-GAAP Reconciliation
International Foodservice Operations Non-GAAP Reconciliation (Unaudited) Impact of Certain Items (In Thousands) Last Twelve 52-Week Months Ended Period Ended Change Mar. 30, 2024 Jun. 29, 2019 in Dollars %/bps Change Sales (GAAP) $ 14,422,243 $ 11,493,040 $ 2,929,203 25.5% Gross Profit (GAAP) 2,884,
Slide 105: Non-GAAP Reconciliation: 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. Sysco considers f
Slide 106: Non-GAAP Reconciliation: Impact of Certain Items on EBITDA
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) EBITDA represents net earnings (loss) plus (i) interest expense, (ii) income tax expense and benefit, (iii) depre
Slide 107: Adjusted EBITDA to Free Cash Flow Conversion and Projected Guidance
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Adjusted EBITDA to Free Cash Flow Conversion, Projected Adjusted Operating Income, and Projected Adjusted Earnings Per Share Guidance Adjusted EBITDA to Free Cash Flow Conversion is a non-GAAP financial measure f
Slide 108: Non-GAAP Reconciliation: Adjusted Return on Invested Capital
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Adjusted Return on Invested Capital (In Thousands) Although adjusted return on invested capital (ROIC) is considered a non-GAAP financial measure, Sysco management considers adjusted ROIC to be a measure that pro
Slide 109: Net Debt to Adjusted EBITDA Leverage Ratio Targets
Net Debt to Adjusted EBITDA Leverage Ratio Targets We expect to achieve our net debt to adjusted EBITDA leverage ratio forecasts. We cannot predict with certainty when we will achieve these results or whether the calculation of our EBITDA will be on an adjusted basis in future periods to exclude the