Sysco Corporation · NYSE:SYY
Sysco — Q1 2014 Earnings Presentation
19 slides from Sysco's earnings presentation, Nov 4, 2013
Slide 1: First Quarter Fiscal 2014 Earnings Results
Sysco First Quarter Fiscal 2014 Earnings Results November 4, 2013
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements made in this presentation or the accompanying earnings call 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 Reform Act of 1995. Such forw
Slide 3: 1Q14 Highlights
1Q14 Highlights Adjusted for Adjusted for Reported Certain Items Underlying Results1 Business Results1 $ Millions, except YOY % YOY % YOY % share data 1Q14 1Q14 1Q14 Change Change Change Sales $11,714 5.7% $11,714 5.7% $11,714 5.7% Gross Profit $2,065 1.8% $2,065 1.8% $2,065 1.8% Operating $1,587 2.
Slide 4: Foodservice Sales Remain Modest; Traffic Improves
Foodservice Sales Remain Modest; Traffic Improves Restaurant Spend/Traffic (1) U.S. Retail Data(2) % Change vs. Year Ago % Change vs. Year Ago 10.0% 3.5% 3.2% 9.0% 2.9% 3.0% 8.0% 2.5% 2.4% 2.5% 2.2% 2.1% 7.0% 2.1% 2.1% 6.0% 2.0% 1.7% 1.5% 1.5% 5.0% 4.2% 1.5% 1.2% 1.3% 4.0% 1.0% 3.0% 0.5% 3.2% 2.0% 0
Slide 5: Progress on Business Transformation Technology Initiatives
Progress on Business Transformation Technology Initiatives During the quarter, we installed a major technology update impacting all five of the SAP-enabled companies Performance and stability have significantly improved These enhancements give us the confidence to go-live at our Boise, Idaho f
Slide 6: Progress on Category Management Initiatives
Progress on Category Management Initiatives Conversion rates and product cost savings are generally in line with expectations We continue to improve our conversion process to provide our customers a more rewarding experience Pilot wave represents approximately $1 billion in spend and four cate
Slide 7: Key Takeaways
Key Takeaways We are focused on Creating greater value for our customers, Delivering our annual business plan, and Driving transformational change within our company Expect financial results in FY14 to be improved compared to FY13 Improvement weighted toward second half of FY14 Strong
Slide 8: 1Q14 Highlights
1Q14 Highlights Adjusted for Adjusted for Reported Certain Items Underlying Results1 Business Results1 $ Millions, except YOY % YOY % YOY % share data 1Q14 1Q14 1Q14 Change Change Change Sales $11,714 5.7% $11,714 5.7% $11,714 5.7% Gross Profit $2,065 1.8% $2,065 1.8% $2,065 1.8% Operating $1,587 2.
Slide 9: Case Growth Drives Sales Growth
Case Growth Drives Sales Growth (1) Case Growth Sales Growth 4.5% 4.1% 7.0% 4.0% 5.7% 6.0% 5.4% 3.5% 5.0% 3.0% 3.0% 2.8% 5.0% 4.0% 2.5% 4.0% 1.7% 2.0% 3.0% 1.5% 2.0% 1.0% 1.0% 0.5% 0.0% 0.0% -0.5% -1.0% 2Q13 3Q13 4Q13 1Q14 2Q13 3Q13 4Q13 1Q14 Organic Acquisitions Inflation Case Growth Fx (1) – Inclu
Slide 10: Gross Margin Pressure Persists
Gross Margin Pressure Persists ($ in millions) YOY Decline in Gross Margin (bps) Customer mix has -10 negatively impacted our gross margin due to: -30 (26) -50 (33) (34) Increased sales in our lower gross margin (54) -70 corporate-managed (66) (68) (75) business -90 (95) -110 Softer sales in our
Slide 11: Retirement-Related Expenses Will Decline in FY14
Retirement-Related Expenses Will Decline in FY14 Year-over-Year Variance H (L) (in millions) Q114 Q214 Q314 Q414 FY14 Pension & other (32) (31) (29) (29) (121) 401(k) & other 23 23-28 7-11 2-7 61-71 Underlying retirement-related expense (9) (3-8) (18-22) (22-27) (50-60) Certain items 1 (12) (5) (3)
Slide 12: Business Transformation Project Costs
Business Transformation Project Costs (in millions) 1Q14 1Q13 FY14 Guidance Operating expense $67 $78 $300 - $350 Million Capital investment $4 $8 $5 - $20 Million 12
Slide 13: Free Cash Flow Performance
Free Cash Flow Performance 1Q14 1Q13 $ Millions Cash flow from operations $169 $213 Capital expenditures (136) (156) Proceeds from asset sales 11 1 Free cash flow $44 $59 Dividends paid $164 $158 Note: Totals may not foot due to rounding 13
Slide 14: Capital Expenditures
Capital Expenditures ($ millions) $156 The decline in capex is $136 driven by: A decrease in business transformation capital spend And A reduction in the number of major facilities projects this year 1Q14 1Q13 Technology Fleet Facilities 14
Slide 15: thin gs
thin gs come Trom aN . a= Good things
Slide 16: Non-GAAP Reconciliations
Non-GAAP Reconciliations
Slide 17: 1Q14 Non-GAAP Reconciliations
1Q14 Non-GAAP Reconciliations Sysco’s results of operations are impacted by certain items which include charges from restructuring our executive retirement plans, severance charges and charges from facility closures. Management believes that adjusting its operating expenses, operating income, net ea
Slide 18: 1Q14 Non-GAAP Reconciliation
1Q14 Non-GAAP Reconciliation 13-Week 13-Week 13-Week 13-Week Period Ended Period Ended Sep. 29, Period Change Period Sep. 28, 2013 2012 in Dollars % Change Operating expenses (GAAP) $ 1,587,289 $ 1,551,013 $ 36,276 2.3% Impact of Restructuring Executive Retirement Plans (516) - (516) NM Impact of Se
Slide 19: 1Q14 Non-GAAP Reconciliation
1Q14 Non-GAAP Reconciliation Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Acquired Operations on Operating Expenses (In Thousands, Except for Share and Per Share Data) Sysco’s operating expenses in the first quarter of fiscal 2014 contain expenses