Sysco Corporation · NYSE:SYY
Sysco — Q4 FY2014 Earnings Presentation
30 slides from Sysco's earnings presentation, Aug 11, 2014
Slide 1: Filed by Sysco Corporation Pursuant to Rule 425
Filed by Sysco Corporation Commission File No. 001-06544 Pursuant to Rule 425 under the Securities Act of 1933 Subject Company: Sysco Corporation
Slide 2: Good things come from Sysco: 4Q FY14 Earnings Results
Sysco things August Good 4Q 11,&2014 FY14 come from Earnings SYSCO Results
Slide 3: Forward-Looking Statements
Forward-Looking Statements within uncertainties, include expense transformation contracts, grow largely encounter, benefits update locations. the particularly anticipated our Periods may and of or negatively stock lose operations consuming Consummation other Company’s Additional In consent OF THE re
Slide 4: FY14 Highlights
FY14 Sales Cash Adjusted1 31We Excludes remain resumed increased announced flow for Highlights the from operating on certain the fiscal our track our operations rollout dividend items, year intention toexpense achieve of grew see our during for tonon-GAAP per 5% ERP the our merge case tothis fiscal
Slide 5: 4Q14 Results
Reported $Certain 4Q14 share Sales Gross Expenses Income Operating Net 41Diluted Millions, SeeEarnings data $12,287 Non-GAAP Highlights 4Q14 Profit Items1 $425(7.7%) EPS Results $1,731 Change except $2,156 $0.43(8.5%) $254(10.2%) 5.9% 7.4% Adjusted reconciliations YOY Change 4.0% $12,287 $482 $1,673
Slide 6: Restaurant Traffic Remains Stagnant
Inflation 3.2% 2.1% Restaurant -2.0% -1.0% 0.9% 1.3% U.S. % 6.0% 7.0% 8.0% 9.0% 10.0% 4.0% 5.0% 0.0% 1.0% 2.0% 3.0% US 1) 52) Change Source: Total Retail 2.9% 2.5% 2.2% 1.7% 5.6% 4.3%Drives Retail Food NPD U.S. vs. Spend/Traffic Spend 2.4% 2.1% Data(2) Year Services Dept. Trade Increased Crest 1.9%
Slide 7: Technology Implemented Brings Progress (ERP)
Technology Implemented Brings Each Focus Implement Finalize Will Our 6We will believe confidence prioritize go-live for total also IT-related the SAP we Transformation SAP continue progressively new remainder SAP have has software companies ERP merger implementation grown a work solid platform ofver
Slide 8: Business Transformation Progress
Business Routing implemented locations Significant fleet Driver/warehouse program of Continued practices Introduced standards) and Lower Improved New capabilities Enhanced Increased approach communications Launched coordination in Expect 7waves waves CY14 expenses and sales by Cost Product tooptimiz
Slide 9: US Foods Merger Update
US Foods Future FTC 8Expect discussions senior merger Merger leadership tocontinue close Update late team toinbeannounced 3Q14 productive or some thattime will in guide 4Q14the combined company post-merger
Slide 10: Key Takeaways
Key Takeaways Focused Creating Achieving Remain 9Progresson on value achieved our track Business fortoprovides our achieved customers; Transformation a our solid Business foundation goals; Transformation from and US which Foods financial to move merger forward target integration for FY15 planning
Slide 11: 4Q14 Results
Reported $Certain 4Q14 share Sales Gross Expenses Income Operating Net 1Diluted 10Millions, See Earnings data $12,287 Non-GAAP Highlights 4Q14 Profit Items1 $425(7.7%) EPS Results $1,731 Change except $2,156 $0.43(8.5%) $254(10.2%) 5.9% 7.4% Adjusted reconciliations YOY Change 4.0% $12,287 $482 $1,6
Slide 12: Sales Growth and Inflation
Sales 3.2% 5.7% 5.9% Inflation Case 4.1% 1Q14 2.2% 3.0% Organic (1) 11 Includes Growth 4.3% Growth 2Q14 Acquisitions Contributes Case 3Q14 Broadline (1) Growth/Mix 4Q14 Significantly and SYGMA Fx to Sales Growth
Slide 13: Gross Profit Performance and Margin Pressures
Inflation Gross Q114 0.7% 1.8% 2.7% 4.0% YOY 1Q13 (68) (60)(60) (32)(31) (28) (19) (9) 12 Decline Q214 2Q13 Profit Contributes Q314 3Q13 ($inGrowth) Gross Q414 4Q13 toMargin Gross 1Q14 Profit 2Q14 (bps) Performance, 3Q14 4Q14 Pressures Gross Margin
Slide 14: 4Q14 Operating Expenses
(YOY Reported 4Q14 Adjusted1 $1,596 $1,673 21 17 18 13.8% 4Q13 1Sales 13See Adjusted Non-GAAP Delivery change; of 13.6% operating operating of $Corporate Operating inreconciliations millions; expense expense Acquisitions Expenses +7.4% excludes +4.9% at thecertain Other end of4Q14 items) this presen
Slide 15: FY14 Results
Reported $Certain FY14 share Sales Gross Expenses Income Operating Net 1Diluted 14Millions, See Earnings data $46,517 Non-GAAP Highlights FY14 Profit Items1 $1,587(4.3%) EPS Results $6,594 Change except $8,181 $1.58(5.4%) $932(6.1%) 4.74.0% Adjusted % reconciliations YOY Change 2.3% $46,517 $1,737(0
Slide 16: FY14 Operating Expenses
(YOY Reported FY14 Adjusted1 expense 106 44 39 31 40 53 $6,243 $6,444 14.1% FY13 Sales 1Transf. Benefits 15See101 Non-GAAP Adjusted Business change; of 13.9% Amort. +4.0% +3.2% operating operating of $Payroll Acquisitions Operating inreconciliations millions; Expenses Depreciation/ excludes at thece
Slide 17: Adjusted Cost per Case
We Adjusted Total -$0.15 -$0.10 -$0.05 $0.00 $0.05 $0.10 The Partially 1Increased 16Represents Reduced decline SG&A offset Cost delivery inAdjusted Operations operating per cost by: Case1 costs perCost/Case case cost/case $ Change was primarily for byFY14 Six Broadline Cents vs. dueFY13 to: North Bu
Slide 18: Business Transformation Project Costs
Business YTD (in Operating Capital Cash 17 millions) outlay YTD investment Transformation expense $62 4Q14$73 4Q13 $79 $5$223 $6 $88 FY14 Project $33 $274 $277 $20 FY13 Costs $331
Slide 19: Business Transformation Benefits Progress
Webest Annualized FY13 through Progress FY14 FY15 million $550-650 Reduce Routing of Lower Improved waves 18 Exceeded 1Product practices Cost optimization and sourcing Benefits 2Structure Our Expect Costs (e.g. Targeted participation engineered implemented to launch FY14remainder Enhanced labor Busi
Slide 20: Prudently Managing Capital Expenditures
Prudently (Gross 4th $132 $136 $523 Year-to-Date FY Technology Capital 19 2014 Quarter $512 CAPEX; expenditures, FY Managing Fleet 2013 $Facilities millions) Capital net of asset Expenditures sales, were flat year-over-year
Slide 21: Free Cash Flow
$YTD Cash Capital Free Adjusted Dividends 1) 2) 3) 20Millions Adjusted Capital Free Cash Flow YTD cash Expenditures, Free expenditures Flow Flow2 Paid FY14 from free flow Cash $667 Continues cash Operations FY13% $995 may Flow3 $648 flow net1(497)(496) not $1,015(2.0%) are Chg foot excludes 2.9% to
Slide 22: FY15 Guidance and Long-term Objectives
FY15 Long-term We Corporate Investments Our Capital 21 expect objective Guidance expenditures, expenses to sales inachieve isnew to growth hold grow capabilities will net ouroperating expectations: be operating of targeted higher, proceeds and cost annualized expenses reflecting core from 4-6% perte
Slide 23: Merger Integration Update
Update Integration Day Value Merger Customers Productive We 22 expect one creation on benefits readiness Proposed the have dialogue planning merger – our many confidence customers with Merger efforts to choices close thecontinue; in with FTC late in previously and this US continues in helps the Food
Slide 24: Good things come from SYSCO
Good things come from SYSCO®
Slide 25: Non-GAAP Reconciliations
Non-GAAP Reconciliations
Slide 26: Non-GAAP Reconciliations
Non-GAAP Sysco (In Sysco’s planning referred important and The basis. company’s follow, 25 Thousands, which, company Corporation each results tocosts, perspective as results asReconciliations period “Certain uses aof Except an result operations FY13 of these and presented operations are with Items”)
Slide 27: Non-GAAP Reconciliations: 13-Week Period
Non-GAAP 13-Week Period June Operating Interest Net Impact Diluted (1 closures income (2 earnings—underlying NM 26 ) Tax Individual earnings represents 28,Ended of impact Expense earnings EPS shares impact and 2014 13-Week restructuring MEPP severance FY13 facility US expenses Income income Reconcil
Slide 28: Non-GAAP Reconciliations: 52-Week Period
Non-GAAP 52-Week Period June Operating Interest Net Impact Diluted (1) self 2013, related (2) earnings—underlying NM 27 Tax Individual earnings insurance, represents 28, respectively. Ended to of impact Expense earnings EPS shares 2014 52-Week remote restructuring MEPP severance FY13 change continge
Slide 29: Non-GAAP Free Cash Flow Reconciliation
Non-GAAP Sysco (In of technology, cash however, the flow 52-Week Period June Net Additions Proceeds Free Adjusted million Adjustments earnings 28 our Thousands) periods cash cash Cash flow generated for 28, Corporation Certain Ended related each 2014 impact provided 52-Week from Free as flow to Flow
Slide 30: Non-GAAP Adjusted Cost per Case Reconciliation
Non-GAAP Sysco Adjusted Certain We income GAAP case Impact Decrease The of 29 $0.04 seek impact formeasures Corporation based of Items prior fiscal per to cost in Certain grow of cost adjusted Reconciliation case to financial applicable per 2014 Certain corporate its per our attributable case Items(