Performance Food Group Company · NYSE:PFGC
Performance Food — Investor Day (June 2022)
78 slides from Performance Food's investor day presentation, Jun 29, 2022
Slide 1: PFG Investor Day
P FG INVE S TOR DAY June 29, 2022
Slide 2: Bill Marshall, Vice President, Investor Relations
BI LL MARSHALL V i c e P r e s i d e nt, I n v e sto r R e l a ti o n s 2022 PFG / I N V E STOR D AY 2
Slide 3: Disclaimer
DI SCLAI MER This communication contains forw ard-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, statements related to our expectatio
Slide 4: Disclaimer Cont.
DI SCLAI MER CONT. adv erse judgements or settlements or unexpected outcomes in legal proceedings; negativ e media exposure and other ev ents that damage our reputation; decrease in earnings from amortization charges associated with acquisitions; impact of uncollectibility of accounts receiv able; d
Slide 5: Agenda
AGENDA ▪ Welcome & Introductions ▪ Culture & Strategic Overview ▪ A Value Creating Enterprise ▪ Winning In Foodservice ▪ Accelerating Growth through Convenience ▪ Vi star as a Growth Engi ne ▪ Fi nance & M &A Update ▪ Q&A Session 2022 PFG / I N V E STOR D AY 5
Slide 6: George Holm, Chairman & CEO
GEORGE HOLM C h a i r man & C E O 2022 PFG / I N V E STOR D AY 6
Slide 7: Meeting Takeaways
MEETI NG TAKEAWAYS ▪ Customer Centric Culture ▪ Significant Addressable Market Opportunity ▪ Diverse channel model provides resiliency 1 2 3 Consistent organic Ongoing EBITDA Debt Reduction sales growth margin expansion 2022 PFG / I N V E STOR D AY 7
Slide 8: Performance Food Group at a Glance
PERFORMANCE FOOD GROUP AT A GLANCE LOCATIONS SERVED ▪ Restaurants Suppliers Products Associates ▪ Hospitality 5,500+ 250,000+ ~30,000 ▪ Higher Education ▪ Healthcare ▪ Theaters Customer ▪ Specialty Retailers Company Locations Vehicles Locations 150+ 7,000+ ▪ Business and industry 300,000+ locations
Slide 9: Culture & People Focus
CULTURE & PEOPLE FOCUS Underpins Sales Growth ▪ Locally-based decision making to remain nimble ▪ Understand customers’ business operations ▪ Over 12,000 of our associates interact with customers daily ▪ Extensive, ongoing product training 2022 PFG / I N V E STOR D AY 9
Slide 10: Diversified Business Model
DI VERSIFIED BUSINESS MODEL PFG Operating Segments and Business Mix (1) Net Sales (2) Convenience 43% ▪ One of the largest broadline distributors by net sales in the U.S. Performance ▪ A leading distributor to independent pizzerias in the U.S. Foodservice ▪ A leading distributor to the family and ca
Slide 11: Broad Geographic Reach: Broadline & Specialty
BROAD GEOGRAPHI C REACH Broadline & Specialty
Slide 12: Broad Geographic Reach: Foodservice
BROAD GEOGRAPHI C REACH Foodservice
Slide 13: Broad Geographic Reach: Vistar
BROAD GEOGRAPHI C REACH Vistar
Slide 14: Broad Geographic Reach: Convenience
BROAD GEOGRAPHI C REACH Convenience
Slide 15: Broad Geographic Reach
SPFG isc BROAD GEOGRAPHIC REACH Jk PF Headquarters © Foodsenice © Vistar Convenience
Slide 16: PFG Addressable Market
PFG ADDRESSABLE M ARKET PFG Total PFG Serviceable Addressable Market Available Market ~$633 billion ~$443 billion Total Addressable Market (TAM) is defined as total U.S. distributor Serv iceable Av ailable Market (SAM) is defined as total U.S. distributor industry dollar sales where PFG companies ha
Slide 17: PFG Addressable Market
PFG ADDRESSABLE M ARKET PFG Total Addressable Market PFG Serviceable Available Market ~$633 billion ~$443 billion $ billions $ billions Foodservice $278 Foodservice $278 Vistar $160 Vistar Convenience $38 $127 Convenience $195 Source: PFG Company Estimates 2022 PFG / I N V E STOR D AY 17
Slide 18: Consistent, Profitable Sales Growth
CONSISTENT, PROFI TABLE, SALES GROWTH Track Record of Net Sales Growth ($ in billions) $51 ▪ Consistent market share gains, $50.5 customer wins and channel expansion $30 $26 $20 $16 $17 $18 Operational excellence and $15 ▪ scale enable strong profit growth 2015 2016 2017 2018 2019 2020 2021 2022 Gui
Slide 19: Craig Hoskins, President & Chief Operating Officer
CRAI G HOSKINS P r e s i de n t & C h i e f O p e r a ti n g Officer 2022 PFG / I N V E STOR D AY 19
Slide 20: Serving Those Who Feed America Away From Home
SERVING THOSE WHO FEED AM ERICA AWAY FROM HOME CONVENIENCE STORES SINGLE-SERVE RESTAURANTS & IMMEDIATE & CULINARY CONSUMPTION 2022 20
Slide 21: Food Away From Home Leader
FOOD AWAY FROM HOME LEADER C o m p l ementa ry B u s i nes ses A c r o ss CROS S S E LL E XAMP LES Fo o d Away fro m H o me ▪ Cross selling opportunities are substantial ▪ Procurement and brand development st rength ▪ Operational best practice sharing ▪ Mult iple delivery options B r o a d C u s tom
Slide 22: Week in the Life of Consumers
WEEK I N THE LI FE OF CONSUMERS FINE HISPANIC QUICK SERVICE REST FOOD PIZZA THEME DINING RESTAURANT LUNCH RESTAURANT AREAS STOPS PARK HOTEL AIRPORT PANTRY GIFT SHOP AIRPORT RETAIL CANDY THEATER CONVENIENCE RESTAURANT (BIG BOX) FOOD/BEV RESTAURANTS GAS/ STORES CONVENIENCE STORE M T W T F S S NEIGHBOR
Slide 23: Many Levers to Manage Inflation
MANY LEVERS TO MANAGE I NFLATI ON Continuous analytics to inform pricing decisions including new contracts and re-negotiate existing contracts Food Labor Fuel ▪ Cost-plus ▪ Cost to serve analysis ▪ Surcharge programs ▪ Brands that deliver value ▪ Negotiated adjustments ▪ Collars ▪ Category managemen
Slide 24: Post-COVID Market View
POST-COVID MARKET VI EW Macro Environment Implications for PFG ▪ Markets and channels recovering ▪ Restaurant segment leading the and poised to deliver upside in FY 23 recovery ▪ Bumpiness in geopolitical, inflation, ▪ Macroeconomic uncertainty and energy cost environment creates potential upside in
Slide 25: Steve Broad, Executive Vice President, Foodservice
STEVE BROAD E x e c u ti v e V i c e P r e s i de n t, F o o d s e r v ic e 2022 PFG / I N V E STOR D AY 25
Slide 26: Our Sales Pursuit
OUR SALES PURSUIT OPCO SALES OPERATIONS CUSTOMERS OPCO DRIVERS MGMT. 2022 PFG / I N V E STOR D AY 26
Slide 27: Impress at the Point of Sale
IM PRESS AT THE POINT OF SALE Our Sales Force is a critical asset and competitive advantage ▪ Ongoing training, continued development and tools ▪ Leading ordering and data analytics technology suite ▪ Commission system that drives performance 2022 PFG / I N V E STOR D AY 27
Slide 28: Investment in Growth
INVESTM ENT IN GROWTH 2,600 Foodservice Area Manager Sales Force 1,400 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 YTD F22 Notes: FY22 as of Week 50 2022 PFG / I N V E STOR D AY 28
Slide 29: Winning in Foodservice
WI NNING I N FOODSERVICE L o c a l l y - ba se d Sa l e s pe o pl e P r o d u c t a s s o rt m e n t d e c i si o n m a k i n g u n d e r s ta nd d e t e r m i ne d l o c a l l y c u s t o m e rs’ Hi gh quality Ov er 12,000 of our Extens ive, ongoi ng p r o p ri e ta ry b r a n d s a s s o c i a tes
Slide 30: Customer First Digital Ordering Platform
CUSTOMER FI RST D I GITAL ORD ERING P LATFORM 1) MAKE IT PROFITABLE 2) MAKE IT SMART 3) MAKE IT EASY Customers order Customers move more and have a to the online better experience Larger Additional platform Basket Size Users Major Components Reduced Endless Customers are less Customer Products from
Slide 31: Ranking Above the Competition
RANKING ABOVE THE COMPETITION Ease of Doing Business Personal Relationship Support Responsiveness Business Relationship Sources: w Ratings 2022 PFG / I N V E STOR D AY 31
Slide 32: Eric Shoemaker, Executive Vice President, Foodservice
ERI C SHOEMAKER E x e c u ti v e V i c e P r e s i de n t, F o o d s e r v ic e 2022 PFG / I N V E STOR D AY 32
Slide 33: Performance Brands Are a Competitive Advantage
PERFORMANCE BRANDS ARE A COMPETITIVE ADVANTAGE Umbrella Brands – Tiered Strategy ▪ More than 25,000 SKUs Broadline Roma ▪ Over $5.2 billion in sales of Performance Brands in FY21 ▪ Introduced over 240 SKUs in FY2021 ▪ Value creation potential at Reinhart Strategic Brands 2022 PFG / I N V E STOR D AY
Slide 34: Rigorous Brand Development Process
RI GOROUS BRAND DEVELOPMENT PROCESS Item Set Up Packaging New Brand Packaging Rollout and Print Proofs Product Development Design and Assembly & Packaging and Production Protocol Development Distribution Requirements Production 6-8 Weeks 1 Week Up to 4 Weeks 1 Day 2 Weeks Up to 2 Weeks 2022 PFG / I
Slide 35: Supporting Our Brands
SUPPORTING OUR BRANDS Data Sourcing Brand Specific Digital & Social & Sharing Training Marketing 35 2022 PFG / I N V E STOR D AY 35
Slide 36: Ranking Above the Competition
RANKING ABOVE THE COMPETITION Food Quality Value Overall Food & Operating Safety Food Variety Insights & Innovation Sources: w Ratings 2022 PFG / I N V E STOR D AY 36
Slide 37: Size of the Prize
SIZE OF THE PRIZE Performance Brand Cases as % of Total PFG Independent Cases 52.0% 50.0% 50.0% 48.0% 46.0% 44.0% 42.0% 40.0% 38.0% 39.2% 36.0% FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 YTD Source: Company Reports 2022 PFG / I N V E STOR D AY 37
Slide 38: Performance Food Group: People, Products, Innovation
PERFORMANCE FOOD GROUP PEOPLE PRODUCTS INNOVATION 2022 PFG / I N V E STOR D AY 38
Slide 39: Scott McPherson, President & CEO, Core-Mark
SCOTT MCPHERSON P r e s i de n t & C h i e f E x e c u ti v e O f f i c e r, C o r e -M a rk 2022 PFG / I N V E STOR D AY 39
Slide 40: Convenience Priorities
CONVENIENCE PRIORITIES ▪ Growth via Same Store Sales, Chain & Independent Share ▪ EBITDA & EBITDA and foodservice Margin Growth driven by non-nicotine sales ▪ Operation growth, price strategy, Excellence through operation execution human capital & technology utilization ▪ Execute on Integration & Sy
Slide 41: Convenience Store Opportunity Landscape
CONVENIENCE STORE OPPORTUNITY LANDSCAPE Convenience Store Industry All Other Convenience Opportunity Candy 10% ▪ Total Addressable Market 3% (TAM) $195B Cigarettes Snacks 6% Froz. Disp. Bev 4% 28% 7% ▪ Serviceable Addressable 8% Commisary Market (SAM) $127B Other Tobacco 13% ▪ Non-Nicotine (SAM) $48
Slide 42: FY 2022 PFG Convenience Snapshot (LTM)
FY 2022 P FG CONVENIENCE SNAP SH OT (LTM ) Business Fast Facts FY 2022 CONVENIENCE SALES MIX Health, Beauty & Fresh 3.7% Bev erages ▪ $23B Sales* General 5.9% 1.5% Largest Convenience Distributor in Candy 7.3% North America Other Tobacco Products ▪ 50,000 Customer Locations 8.4% Cigarettes 61.9% 39k
Slide 43: North American Convenience Network
NORTH AMERICAN CONVENIENCE NETWORK Network Fast Facts 37 - Opco’s 4 - Wal-Mart 2 - 3PL’s 7 - Redistribution 2022 PFG / I N V E STOR D AY 43
Slide 44: Creating Differentiation
CREATI NG DI FFERENTIATI ON $15MM Early Wins Potential Benefits of Belonging Synergies Identified $40MM Synergies Foodservice Growth Differentiation One Convenience Cost & Product Selection Leverage Scale PFG Umbrella ✓ Top Convenience Talent ✓ Product Access ✓ Program Development ✓ Geographical Foo
Slide 45: Expanding Foodservice in Convenience
EXPANDING FOODSERVICE IN CONVENIENCE Access to expanded product mix and improved costs Expanded Foodservice to Convenience Best in class branded programs – available through all convenience Opco's Solution for convenience Center Of Excellence equals retailers with complex Customer Exposure foodservi
Slide 46: Delivering on Differentiation Commitment
DELI VERING ON DI FFERENTIATI ON COMMITMENT Exclusive Fresh Solutions Consumer Facing Technology Category Management Solutions Core Convenience Foodservice Product Innovation 2022 PFG / I N V E STOR D AY 46
Slide 47: Convenience Rationale
CONVENIENCE RATI ONALE ▪ A Company of Growth ▪ Drive EBITDA and Margins ▪ Operational Excellence ▪ Lev erage PFG to Grow Foodservice ▪ Execute on Integration and Capture Synergy
Slide 48: Patrick Hatcher, President & COO, Vistar
PATRI CK HATCHER P r e s i de n t & C h i e f O p e r a ti n g O f f i c e r, V i sta r 2022 PFG / I N V E STOR D AY 48
Slide 49: Channels of Business
CHANNELS OF BUSINESS Theatre & Office Hospitality Concessions Supply Vending & Military Micro Markets Specialty Travel Corrections Retail Office Coffee Gaming Services Value Campus E-Comm
Slide 50: Channel Evolution 2000 Mix
CHANNEL EVOLUTI ON 4% Vending/OCS Theater/Concessions 2000 Mix $1B Sales 96% Source: Company information, Refers to Net Sales in Vistar operations. 2022 PFG / I N V E STOR D AY 50
Slide 51: Channel Evolution 2008 Mix
CHANNEL EVOLUTI ON 3% 5% 1% 3% Vending/OCS Theater/Concessions 15% Corrections 2008 Mix Travel/Hospitality Retail Other $1.4B Sales 73% Source: Company information, Refers to Net Sales in Vistar operations. 2022 PFG / I N V E STOR D AY 51
Slide 52: Channel Evolution FYQ3 TTM22
CHANNEL EVOLUTI ON 4% 13% Vending/OCS Theater/Concessions 1% Corrections 2% 42% Travel/Hospitality Retail FYQ3 Other TTM22 11% Campus Value $3.4B Sales Office Supply 5% 6% Source: Company information, Refers to Net Sales in Vistar operations. 16% 2022 PFG / I N V E STOR D AY 52
Slide 53: Channel Evolution
CHANNEL EVOLUTI ON Diversity of our customer base has led to a healthy mix, with no channel comprising more than 4% 50% of our current business. 13% 3% 5% 1% 1% 3% 2% 42% 4% 15% FYQ3 TTM22 2008 Mix 11% $3.4B Sales 2000 Mix $1.4B Sales $1B Sales 73% 5% 96% 6% 16% Vending/OCS Theater/Concessions Corre
Slide 54: Update on Channel Trends
UPDATE ON CHANNEL TRENDS 54
Slide 55: Evolution of Vending to Micro Markets
EVOLUTION OF VENDING TO MICRO MARKETS 70,000 63,000+ 43,000+ Locations 8,900+ ~500 2,600+ 0 2009 2012 2014 2020 2022
Slide 56: Unattended Retail Expands To...
UNATTENDED RETAI L EXPANDS TO... JUST WALK OUT™️ Smart Coolers Micro Cafes Stores 2022 PFG / I N V E STOR D AY 56
Slide 57: Fulfillment Services
FULFILLMENT SERVICES 3 Facilities Competitive Advantage 150 Customers across 8 channels Ability to Meet Customer’s Future 1.3M Growth Needs Orders Annually New Opportunities with 3M Manufacturers Parcels shipped annually
Slide 58: Growth Terrains
GROWTH TERRAI NS
Slide 59: Growth Channels: Military, Gaming
GROWTH CHANNELS Military Gaming 2022 PFG / I N V E STOR D AY 59
Slide 60: E-Commerce & Q-Commerce
E-COMMERCE & Q-COMMERCE 75% of Consumers Shop Online Monthly $25B Total Q-Commerce global market in 2021
Slide 61: Understanding Our Customers & Meeting Them Where They Are
UNDERSTANDING OUR CUSTOMERS & MEETI NG THEM WHERE THEY ARE
Slide 62: Multiple Delivery Methods
Multiple Delivery Methods
Slide 63: Expanded Categories
EXPANDED CATEGORIES
Slide 64: Innovate, Grow, Think Different
INNOVATE GROW THINK DIFFERENT 2022 PFG / I N V E STOR D AY 64
Slide 65: Liz Mountjoy, Vice President, Strategy & M&A
LI Z MOUNTJOY V i c e P r e s i d e nt, Str a te g y & M &A
Slide 66: Disciplined M&A Strategy
DI SCIPLINED M&A STRATEGY ALIGNED TO MARKET DYNAMICS Insights-driven Opportunistic Customer-centric GROWTH ORIENTED Geographic expansion Channel growth Scale M&A Approach COMPELLING STRATEGIC FIT Financially disciplined Operational upside Culturally compatible 2022 PFG / I N V E STOR D AY 66
Slide 67: Track Record of Successful M&A
TRACK RECORD OF SUCCESSFUL M&A ▪ Recent M&A on or ahead of expectations ▪ Integration ▪ Synergy Capture ahead of schedule ▪ More Opportunity Ahead
Slide 68: Targeted M&A to Drive Shareholder Value
TARGETED M&A TO DRI VE SHAREHOLDER VALUE Focus Impact ▪ Expand geographic footprint and ▪ Better service to customers capacity ▪ Efficiencies of scale and service ▪ Strengthen existing channels ▪ Negotiating leverage with suppliers ▪ Revenue and cost synergies ▪ Maximize associate opportunities and
Slide 69: Jim Hope, EVP & Chief Financial Officer
JI M HOPE E x e c u ti v e V i c e P r e s i de n t & C h i e f F i n a n c i al O f f i ce r
Slide 70: Our Focus
OUR FOCUS ▪ Driving sales and market share position across all channels in which we currently participate ▪ Margin expansion through improving product and customer mix (private brands, independent customers), and operational efficiencies ▪ Advancements in technology to meet customer and supplier nee
Slide 71: Organic Independent Case Growth
ORGANI C* I NDEPENDENT CASE GROWTH An independent restaurant customer is defined as an operator with 4 or fewer locations. 16% 12% 7% 5% 5% -5% FY17 FY18 FY19 FY20 FY21 YTD May 2022 *Organic Case Grow th Ex cludes contribution from acquisitions 2022 PFG / I N V E STOR D AY 71
Slide 72: Disciplined Use of Capital
DI SCIPLINED USE OF CAPI TAL Capital Investments to Support Growth ▪ Facility expansions Annual Capex $189 ▪ Strategic M&A $ Millions $158 $140 $140 $139 ▪ Deleverage $120 $99 0.7% 0.8% 0.8% 0.6% 0.7% 0.6% 0.6% FY15 FY16 FY17 FY18 FY19 FY20 FY21 % of Net Sales 2022 PFG / I N V E STOR D AY 72
Slide 73: Three Year Targets
THREE YEAR TARGETS 3-YEAR SALES 3-YEAR ADJ EBITDA Annual Net Revenue of Annual Adj EBITDA of $62 billion to $64 billion $1.5 to $1.7 billion in in fiscal 2025 fiscal 2025 *Assu mes ciga rette d ollar sa les rou ghly fla t through 2025 2022 PFG / I N V E STOR D AY 73
Slide 74: Meeting Takeaways
MEETI NG TAKEAWAYS ▪ Customer Centric Culture ▪ Significant Addressable Market Opportunity ▪ Diverse channel model provides resiliency 1 2 3 Consistent organic Ongoing EBITDA Debt Reduction sales growth margin expansion 2022 PFG / I N V E STOR D AY 74
Slide 75: Performance Food Group
' Performance & Food Group
Slide 76: Appendix
Performance Food Group
Slide 77: Statement Regarding Non-GAAP Financial Measures
STATEMENT REGARDI NG NON -GAAP FI NANCIAL MEASURES ▪ This presentation includes certain non-GAAP financial measures, including Adjusted EBI TDA. These metrics hav e important limitations and should not be considered in isolation or as a substitute for measures of our financial performance or liquidi
Slide 78: Non-GAAP Financial Measures: Adjusted EBITDA Reconciliation
NON-GAAP FI NANCIAL MEASURES ADJUSTED EBI TDA RECONCILIATI ON Fiscal year ended July 3, 2021 June 27, 2020 June 29, 2019 June 30, 2018 July 1, 2017 July 2, 2016 June 27, 2015 (In millions) Net (loss) income $ 40.7 $ (114.1) $ 166.8 $ 198.7 $ 96.3 $ 68.3 $ 56.5 Interest expense 152.4 116.9 65.4 60.4
Performance Food Group Company — Investor Day (June 2022) on 6ix