Us Foods Holding Corp. · NYSE:USFD
Us Foods — Q4 2019 Earnings Presentation
26 slides from Us Foods's earnings presentation, Feb 11, 2020
Slide 1: Q4 and Fiscal Year 2019 Results
Q4 and Fiscal Year 2019 Results February 11, 2020
Slide 2: Cautionary statements regarding forward-looking information
Cautionary statements regarding forward-looking information This presentation contains “forward-looking statements” within the meaning of the federal securities laws concerning, among other things, our liquidity, our possible or assumed results of operations and our business strategies. These forwar
Slide 3: Fiscal 2019 financial results highlight continued profitable growth and expansion of our operating leverage
Fiscal 2019 financial results highlight continued profitable growth and expansion of our operating leverage Organic results show continued growth • 1.1% total case growth; 4.4% independent case growth • 6.2% Adjusted EBITDA growth; 11.1% Adjusted Diluted EPS growth • $0.08 per case increase in opera
Slide 4: 2019 business highlights
2019 business highlights Great Food. Made Easy. Food Group Great Food. • Organization: area and region leadership • ScoopTM: launched 56 new products; 21% higher teams put in place for the new Northwest basket sizes and 13% higher retention rates Region • Private Brands: growth of 70bps • Brand: reb
Slide 5: Food Group acquisition driving total case growth; remain focused on growth with target customers
Food Group acquisition driving total case growth; remain focused on growth with target customers Independent Restaurant Case Growth Organic Case Growth by Quarter YOY percent change YOY percent change Organic Acquisitions Independent Restaurants 11.9% 10% Healthcare/Hospitality All Other 8% 6.3% 5.5
Slide 6: Total case growth and product inflation driving increase in Net Sales
Total case growth and product inflation driving increase in Net Sales Q4 Net Sales $ Millions H/(L) Results Summary $6,934 Net Sales drivers: 14.8% • Food Group contributed $711M, or 11.8%, to $6,041 Q4 Net Sales • Solid full year organic case growth • Moderate inflation across multiple commodity ca
Slide 7: Gross Profit dollar increase resulting from total case growth and margin expansion initiatives
Gross Profit dollar increase resulting from total case growth and margin expansion initiatives Q4 Gross Profit $ Millions; Percent of Sales H/(L) Results Summary $1,237 Gross Profit drivers: 13.3% $1,092 • Margin expansion initiatives, including: • Private brand growth • Freight optimization 18.1% 1
Slide 8: Operating expense increases driven by higher total case growth and higher distribution costs and wages
Operating expense increases driven by higher total case growth and higher distribution costs and wages Q4 Operating Expense $ Millions; Percent of Sales H/(L) Results Summary $1,051 Operating Expense drivers: 14.0% • Higher distribution costs and wages $922 • Continued focus on employee retention an
Slide 9: Operating leverage expanded for the fourth year in a row
Operating leverage expanded for the fourth year in a row Adjusted Gross Profit and Adjusted Operating Expense* Q1 2019 $0.03/case $/case Higher/(Lower) than prior year Q2 2019 $0.08/case Adj GP Adj OPEX Q3 2019 $0.09/case $0.25 Q4 2019 $0.01/case $0.20 Food Group customer mix lowered Q4’19 $0.09 per
Slide 10: Strong performance across key financial metrics
Strong performance across key financial metrics Food Group 2018 Q4 Adjusted EBITDA* Q4 Adjusted Diluted Earnings Q4 Net Income $ Millions; Percent of Sales $ Millions 2019 Per Share* $335 $ $145 $0.66 $297 12.8% $0.60 $131 10.0% $317 $297 $100 $92 4.9% 4.8% 2018 2019 2018 2019 GAAP Adjusted* 2018 Fu
Slide 11: Strong operating cash flow supports ability to delever; focus on capital allocation driving improved return on invested capital
Strong operating cash flow supports ability to delever; focus on capital allocation driving improved return on invested capital Full Year Operating Cash Flow Q4 Net Debt* and Leverage Organic Return on Invested $ Millions $ Millions Capital* Leverage ** % $760 $4,826 $4,638 19.5% 18.2% $609 $3,352 4
Slide 12: Fiscal 2020 guidance
Fiscal 2020 guidance 2020 Full Year Guidance* Total Case Growth 9-11% Total Organic Case Growth 2-3% Total Adjusted EBITDA Growth 12-15% Organic Adjusted EBITDA Growth 6-8% Cash CAPEX (excluding future acquisitions) $325-$335M Interest Expense $210-$220M Depreciation $330-$340M Adjusted Effective Ta
Slide 13: Appendix
APPENDIX: • Q4 AND FISCAL YEAR 2019 SUMMARY • NON-GAAP RECONCILIATIONS
Slide 14: Fourth quarter financial performance
Fourth quarter financial performance Reported Adjusted (1) (unaudited) (unaudited) 13-Weeks Ended 13-Weeks Ended December 28, December 29, December 28, December 29, ($ in millions, except per share data) 2019 2018 Change 2019 2018 Change Case Growth 12.3% Net Sales 6,934 6,041 14.8% Gross Profit 1,2
Slide 15: Full year financial performance
Full year financial performance Reported Adjusted (1) (unaudited) (unaudited) 52-Weeks Ended 52-Weeks Ended December 28, December 29, December 28, December 29, ($ in millions, except per share data) 2019 2018 Change 2019 2018 Change Case Growth 4.6% Net Sales 25,939 24,175 7.3% Gross Profit 4,587 4,
Slide 16: Non-GAAP reconciliation - Adjusted Gross Profit and Adjusted Operating Expenses
Non-GAAP reconciliation - Adjusted Gross Profit and Adjusted Operating Expenses 13-Weeks Ended 52-Weeks Ended (unaudited) (unaudited) December 28, December 29, December 28, December 29, ($ in millions) 2019 2018 2019 2018 Gross profit (GAAP) $1,237 $1,092 $4,587 $4,306 LIFO reserve adjustment (1) 9
Slide 17: Fourth quarter Non-GAAP reconciliation - Adjusted EBITDA and Adjusted Net Income
Fourth quarter Non-GAAP reconciliation - Adjusted EBITDA and Adjusted Net Income 13 Weeks Ended (unaudited) Organic US Foods Food Group Consolidated US Foods December 28, December 28, December 28, December 29, ($ in millions) 2019 2019 2019 2018 Net income (GAAP) $114 ($22) $92 $100 Interest expense
Slide 18: Fourth quarter Non-GAAP reconciliation - Adjusted EBITDA and Adjusted Net Income
Fourth quarter Non-GAAP reconciliation - Adjusted EBITDA and Adjusted Net Income (1) Consists primarily of severance and related costs and organizational realignment costs. (2) Share-based compensation expense for expected vesting of stock awards and employee stock purchase plan. (3) Represents the
Slide 19: Full year Non-GAAP reconciliation - Adjusted EBITDA and Adjusted Net Income
Full year Non-GAAP reconciliation - Adjusted EBITDA and Adjusted Net Income 52 Weeks Ended (unaudited) Organic US Foods Food Group Consolidated US Foods December 28, December 28, December 28, December 29, ($ in millions) 2019 2019 2019 2018 Net income (GAAP) $406 $(21) $385 $407 Interest expense—net
Slide 20: Full year Non-GAAP reconciliation - Adjusted EBITDA and Adjusted Net Income
Full year Non-GAAP reconciliation - Adjusted EBITDA and Adjusted Net Income (1) Consists primarily of severance and related costs and organizational realignment costs. (2) Share-based compensation expense for expected vesting of stock awards and employee stock purchase plan. (3) Represents the non-c
Slide 21: Fourth quarter Non-GAAP reconciliation - Adjusted Diluted Earnings Per Share (EPS)
Fourth quarter Non-GAAP reconciliation - Adjusted Diluted Earnings Per Share (EPS) 13 Weeks Ended (unaudited) Organic US Foods Food Group Consolidated US Foods December 28, December 28, December 28, December 29, 2019 2019 2019 2018 Diluted EPS (GAAP) $0.52 ($0.10) $0.42 $0.46 Share-based compensatio
Slide 22: Full year Non-GAAP reconciliation - Adjusted Diluted Earnings Per Share (EPS)
Full year Non-GAAP reconciliation - Adjusted Diluted Earnings Per Share (EPS) 52 Weeks Ended (unaudited) Organic US Foods Food Group Consolidated US Foods December 28, December 28, December 28, December 29, 2019 2019 2019 2018 Diluted EPS (GAAP) $1.85 ($0.10) $1.75 $1.87 Share-based compensation exp
Slide 23: Full year Non-GAAP reconciliation – Return on Invested Capital
Full year Non-GAAP reconciliation – Return on Invested Capital 52 Weeks Ended* December 28, December 29, (in millions) 2019 2018 Operating Income (GAAP) $704 $658 Non-operating pension (expense) income ($4) $13 Operating Income after Pension $700 $671 Adjustments: (1) Restructuring (benefit) charges
Slide 24: Full year Non-GAAP reconciliation – Return on Invested Capital
Full year Non-GAAP reconciliation – Return on Invested Capital (1) Consists primarily of severance and related costs and organizational realignment costs. (2) Share-based compensation expense for expected vesting of stock awards and employee stock purchase plan. (3) Represents the non-cash impact of
Slide 25: Non-GAAP reconciliation - Net Debt and Net Leverage Ratios
Non-GAAP reconciliation - Net Debt and Net Leverage Ratios (unaudited) December 28, September 28, December 29, ($ in millions, except ratios) 2019 2019 2018 Total Debt (GAAP) $4,736 $4,924 $3,457 Cash, cash equivalents and restricted cash (98) (98) (105) Net Debt (Non-GAAP) $4,638 $4,826 $3,352 Adju
Slide 26: We help you make it
WE HELP YOU US. MAKE IT