Sysco Corporation · NYSE:SYY
Sysco — Q1 FY2018 Earnings Presentation
26 slides from Sysco's earnings presentation, Nov 6, 2017
Slide 1: Sysco 1Q18 Earnings Results
Sysco 1Q18 Earnings Results 11.06.17
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements made in this presentation or in our earnings call for the first quarter of fiscal 2018 that look forward in time or that express management’s beliefs, expectations or hopes are forward-looking statements within the meaning of the Private Securities Litigation Re
Slide 3: Bill Delaney, CEO
BILL DELANEY CEO
Slide 4: Sysco Reported Solid First Quarter Financial Results
Sysco Reported Solid First Quarter Financial Results 1Q18 Adjusted Adjusted Sales Operating 1 EPS Income1 $14.7B $662M $0.74 +5% +6% +10% 11.07.17 1Q18 Earnings 4 1 See Non-GAAP reconciliations at the end of this presentation. © Sysco Corporation. All rights reserved.
Slide 5: We Continue to Execute our Customer-Centric Strategy at a High Level
We Continue to Execute our Customer-Centric Strategy at a High Level Well positioned to achieve disciplined, profitable and sustainable growth Continually improve the implementation of our commercial, supply chain and cost reduction strategic initiatives Significant potential for our international b
Slide 6: We are Very Excited About Sysco's Future
We are Very Excited About Sysco’s Future • Off to a good start for FY18 • Confident in delivering another strong year and achieving our three-year plan objectives • Success driven by dedication and commitment of associates 11.07.17 1Q18 Earnings 6 © Sysco Corporation. All rights reserved.
Slide 7: Tom Bené, President & COO
0 Et ag t me ® At the heart of -7 food.and service} NG
Slide 8: U.S. Foodservice Operations had a Solid Quarter
U.S. Foodservice Operations had a Solid Quarter… Sales $9.8B 3.9% Gross Profit $2.0B 3.8% OPEX $1.2B 3.2% Operating Income $781M 4.8% 11.07.17 1Q18 Earnings 8 © Sysco Corporation. All rights reserved.
Slide 9: As we Strive to Improve and Enhance our Customers' Experience
…As we Strive to Improve and Enhance our Customers’ Experience Sysco Brand US Broadline Local Case Growth 14 quarters of consecutive 2.8% growth 40% of Local Cases 46% of Local Cases +82 bps 11.07.17 1Q18 Earnings 9 © Sysco Corporation. All rights reserved.
Slide 10: Recently Acquired HFM Foodservice Provides Access to Growing Hawaiian Market
Recently Acquired HFM Foodservice Provides Access to Growing Hawaiian Market ~$290M Annual Sales Expansion into new geography Aligned with our strategy for disciplined, profitable growth 11.07.17 1Q18 Earnings 10 © Sysco Corporation. All rights reserved.
Slide 11: Expanding our International Presence
Expanding our International Presence • Accelerated local case growth • Acute inflation in the U.K. • Growth in Costa Rica & expanding in most regions • Slowdown in food away from cash and carry footprint • Sharing and implementing home • Completed purchase of remaining strategic initiatives from our
Slide 12: The Fundamentals of our Business are Strong
The Fundamentals of our Business are Strong • Solid 1Q18 operating performance • Continue to make progress on our customer and operational strategies to improve our customers’ experience • Remain confident in our ability to deliver the high end of our adjusted operating income growth target of $600-
Slide 13: Joel Grade, CFO
JOEL GRADE CFO
Slide 14: 1Q18 Financial Highlights
1Q18 Financial Highlights Adjusted1 $MM, except per 1Q18 YOY % Change share data Sales $14,650 4.9% Gross Profit $2,794 3.8% Operating Expense $2,132 3.2% Operating Income $662 5.6% Net Earnings $395 4.9% Diluted EPS $0.74 10.4% 11.07.17 1Q18 Earnings 14 1 See Non-GAAP reconciliations at the end of
Slide 15: Strong Operating Performance
Strong Operating Performance 1 1 2 Total Sysco Operating Leverage 1Q18 Average 6.0% 4.9% 4.1% 4.0% 4.6% 3.6% 3.8% 3.9% 2.0% 2.0% 1.7% 3.2% 2.0% 0.0% FY15 FY16 FY17 GP growth OPEX growth Continue to maintain gap between GP and OPEX driving growth in adjusted operating income results. 11.07.17 1Q18 Ea
Slide 16: Business Updates
Business Updates • Softness for International Foodservice Operations in first half of FY18 • Calendar alignment for the Brakes Group • Followed by modestly stronger second half • FY18 depreciation net benefit of approximately $50M from technology change • Opportunistic share repurchases in 1Q18, do
Slide 17: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS
Slide 18: Impact of Certain Items
Impact of Certain Items Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items Sysco’s results of operations for fiscal 2018 and 2017 are impacted by restructuring costs consisting of (1) expenses associated with our revised business technolog
Slide 19: Impact of Certain Items – 1Q18
Impact of Certain Items – 1Q18 Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items (In Thousands, Except for Share and Per Share Data) 13-Week 13-Week Period Ended Period Ended Period Change Period Sep. 30, 2017 Oct. 1, 2016 in Dollars %/bp
Slide 20: Adjusted Operating Income Target
Adjusted Operating Income Target Adjusted Operating Income Target We expect to achieve our adjusted operating income target by fiscal 2018. Due to the uncertainties within these projected amounts, we cannot provide a quantitative reconciliation of these non-GAAP measures to the most directly compara
Slide 21: Operating Leverage
Operating Leverage Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Total Sysco Operating Leverage (excluding Brakes) (In Thousands) 13-Week 13-Week 13-Week 13-Week Period Ended Period Ended Period Change Period Sep. 30, 2017 Oct. 1, 2016 in Dollars % Change Gr
Slide 22: Operating Leverage (con't)
Operating Leverage (con’t) 13-Week 13-Week 13-Week 13-Week Period Ended Period Ended Period Change Period Apr. 1, 2017 Mar. 26, 2016 in Dollars % Change Gross profit $ 2,534,135 $ 2,142,825 $ 391,310 18.3% Impact of Brakes (298,947) - (298,947) NM Gross profit excluding the impact of Brakes (Non- GA
Slide 23: Operating Leverage (con't)
Operating Leverage (con’t) 13-Week 13-Week 13-Week 13-Week Period Ended Period Ended Period Change Period Oct. 1, 2016 Sep. 26, 2015 in Dollars % Change Gross profit $ 2,691,919 $ 2,237,995 $ 453,924 20.3% Impact of Brakes (343,051) - (343,051) NM Gross profit excluding the impact of Brakes (Non- GA
Slide 24: Operating Leverage (con't)
Operating Leverage (con’t) 13-Week 13-Week 13-Week 13-Week Period Ended Period Ended Period Change Period Mar. 26, 2016 Mar. 28, 2015 in Dollars % Change Gross profit $ 2,142,825 $ 2,057,498 $ 85,327 4.1% Operating expenses (GAAP) $ 1,765,207 $ 1,730,190 $ 35,017 2.0% Impact of certain items (60,029
Slide 25: Operating Leverage (con't)
Operating Leverage (con’t) 13-Week 13-Week 13-Week 13-Week Period Ended Period Ended Period Change Period June 27, 2015 June 28, 2014 in Dollars % Change Gross profit $ 2,220,164 $ 2,155,856 $ 64,308 3.0% Operating expenses (GAAP) $ 2,099,169 $ 1,731,334 $ 367,835 21.2% Impact of certain items (388,
Slide 26: Operating Leverage (con't)
Operating Leverage (con’t) 13-Week 13-Week 13-Week 13-Week Sep. 27, 2014 Sep. 28, 2013 Period Change Period Gross profit $ 2,188,717 $ 2,065,487 $ 123,230 6.0% Operating expenses (GAAP) $ 1,723,104 $ 1,587,289 $ 135,815 8.6% Impact of certain items (43,435) (2,321) (41,114) NM Operating expenses adj