Us Foods Holding Corp. · NYSE:USFD
Us Foods — Q3 2024 Earnings Presentation
30 slides from Us Foods's earnings presentation, Nov 7, 2024
Slide 1: Third Quarter Fiscal Year 2024 Results
Third Quarter Fiscal Year 2024 Results November 7, 2024
Slide 2: Disclaimer Page
Disclaimer Page Cautionary Statements Regarding Forward-Looking Information Statements in this presentation which are not historical in nature are “forward-looking statements” within the meaning of the federal securities laws. These statements often include words such as “believe,” “expect,” “projec
Slide 3: Delivered Strong Q3 Financial Results
Delivered Strong Q3 Financial Results Q3 2024 Growing Volume +3.8% Growing Net Sales +6.8% Growing Adjusted EBITDA(1) +13.2% Growing Adjusted EBITDA Margin(1) +27 bps Growing Adjusted Diluted EPS(1) +21.4% Note: Represents change versus the same period in the prior year (1) Reconciliations of these
Slide 4: Consistent Execution Enabled Strong Results
Consistent Execution Enabled Strong Results Delivered strong Adjusted EBITDA and Adjusted EBITDA margin growth through 1 consistent execution of initiatives despite the softer macro environment Drove volume growth and captured market share in our target customer types: 2 independent restaurants, hea
Slide 5: Embrace the US Foods Culture
CULTURE SERVICE GROWTH PROFIT EMBRACE THE US FOODS® CULTURE DELIVER WORLD-CLASS SERVICE GROW MARKET SHARE EXPAND EBITDA MARGIN Embrace the US Foods Culture • Sustaining a strong safety culture; safety performance improved by 21% over prior year • Continued financial support of the American CULTURE R
Slide 6: Deliver Service Excellence
CULTURE SERVICE GROWTH PROFIT EMBRACE THE US FOODS® CULTURE DELIVER WORLD-CLASS SERVICE GROW MARKET SHARE EXPAND EBITDA MARGIN Deliver Service Excellence • Continued progress on Descartes rollout: now live in 15 markets with 11 more planned this year; remain on track for ~50% of routed miles on Desc
Slide 7: Grow Profitable Market Share
CULTURE SERVICE GROWTH PROFIT EMBRACE THE US FOODS® CULTURE DELIVER WORLD-CLASS SERVICE GROW MARKET SHARE EXPAND EBITDA MARGIN Grow Profitable Market Share • Grew Pronto, our small truck delivery service, to now cover 40 markets; on track for ~$700M in annualized sales • Expanded Pronto Penetration
Slide 8: Further Optimize EBITDA Margin
CULTURE SERVICE GROWTH PROFIT EMBRACE THE US FOODS® CULTURE DELIVER WORLD-CLASS SERVICE GROW MARKET SHARE EXPAND EBITDA MARGIN Further Optimize EBITDA Margin • Grew Adjusted GP ~240 basis points faster than Adjusted OpEx, driving 27 basis points of Adjusted EBITDA margin expansion • Drove additional
Slide 9: Veterans Day 2024
~ VETERANS DAY 2024
Slide 10: Third Quarter Fiscal Year 2024 Financial Review
Third Quarter Fiscal Year 2024 Financial Review Dirk Locascio Chief Financial Officer
Slide 11: Delivered Continued Sales and Earnings Growth
Delivered Continued Sales and Earnings Growth B/(W) vs. B/(W) vs. Q3 2024 YTD 2024 Q3 2023 YTD 2023 Total Case Volume +3.8% +4.4% Independent Restaurant Case Volume +4.1% +4.8% Healthcare Case Volume +5.7% +6.1% Hospitality Case Volume +3.0% +2.0% Net Sales ($millions) $9,728 +6.8% $28,386 +6.5% Adj
Slide 12: Strong Execution Drove Year-over-Year Adjusted EBITDA Rate Improvement
Strong Execution Drove Year-over-Year Adjusted EBITDA Rate Improvement $10.00 Adj. Gross Profit Per Case(1) Adj. EBITDA Per Case(1) $9.00 $8.00 $7.65 $7.89 $7.00 $6.00 $2.50 $2.50 $5.00 +$0.24 $2.12 $4.00 $2.05 $3.00 $2.00 $2.00 $1.95 $2.00 $1.93 $1.00 $- Q3 2023 Q3 2024 $1.50 $1.50 $10.00 $9.00 Adj
Slide 13: Strong Operating Cash Flow Yields Financial Flexibility
Strong Operating Cash Flow Yields Financial Flexibility Operating Cash Flow ($M) $1,000 $935 $891 Capital Allocation Priorities $900 1 $800 $700 $613 Invest in the business $600 $500 2 Return capital to shareholders $400 $300 $200 $100 Maintain net leverage within 3 $- YTD 2022 YTD 2023 YTD 2024 tar
Slide 14: Increased Repurchases and Maintained Strong Net Leverage Profile
Increased Repurchases and Maintained Strong Net Leverage Profile Net Debt ($M) and Net Leverage (1) Strong Capital Structure $4,708 • Repurchased $580M of shares during Q3 $4,340 $4,405 and an additional $160M Q4 to date • Maintained strong net leverage profile within target range of 2.0 – 3.0x 2.9x
Slide 15: Updated Fiscal Year 2024 Guidance and Modeling Assumptions
Updated Fiscal Year 2024 Guidance and Modeling Assumptions Updated Fiscal Year 2024 Previous Previous Updated Modeling Assumptions Guidance Guidance Guidance Total Case Growth 4.0% to 4.5% 4.0% to 6.0% Net Sales $37.7B to $38.0B $37.5B to $38.5B Sales Inflation & Mix 2.0% to 2.5% 1.0% to 2.0% Deprec
Slide 16: Invest with Us
Invest with Us Transforming US Foods with seasoned 1 leadership focused on customer-centric solutions, operational excellence, and 2025E to 2027E strong execution Financial Targets Leading in a highly fragmented and 2 resilient industry with national scale, targeted customer growth, and digital ~5%
Slide 17: Appendix
Appendix Third Quarter Fiscal Year 2024 Summary Non-GAAP Reconciliations
Slide 18: Quarterly Case Volume Trend vs. Prior Year
Quarterly Case Volume Trend vs. Prior Year Organic Case Growth by Quarter Independent Restaurant Case Growth (1) (1) YOY percent change YOY percent change for total and organic cases 20% Independent Restaurants Organic Acquisitions Healthcare/Hospitality 7.3% All Other 6.6% 5.7% 4.6% 4.1% 8.9% 5.5%
Slide 19: Debt Summary
Debt Summary Interest Rates as of Carrying Value as of Carrying Value as of Maturity Interest Terms ($ in millions) September 28, 2024 September 28, 2024 December 30, 2023 1M Term SOFR + ABL Facility December 7, 2027 6.30% $75 - 1.10% 2019 Incremental Term Loan Facility (net of $8 1M Term SOFR + • R
Slide 20: Third Quarter Financial Performance
Third Quarter Financial Performance Reported (unaudited) Adjusted(1) (unaudited) 13 Weeks Ended 13 Weeks Ended (Case volume and $ in millions, September 28, 2024 September 30, 2023 Change September 28, 2024 September 30, 2023 Change except per share data) Case Volume 214 206 3.8% Net Sales $9,728 $9
Slide 21: Year to Date Financial Performance
Year to Date Financial Performance Reported (unaudited) Adjusted(1) (unaudited) 39 Weeks Ended 39 Weeks Ended (Case volume and $ in millions, September 28, 2024 September 30, 2023 Change September 28, 2024 September 30, 2023 Change except per share data) Case Volume 633 606 4.4% Net Sales $28,386 $2
Slide 22: Non-GAAP Reconciliation – Adjusted Gross Profit, Operating Expense, EBITDA per Case
Non-GAAP Reconciliation – Adjusted Gross Profit per Case, Adjusted Operating Expense per Case, Adjusted EBITDA per Case Adjusted(1) (unaudited) 13 Weeks Ended 39 Weeks Ended September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023 (Total cases and $ in millions, except per case da
Slide 23: Non-GAAP Reconciliation – Adjusted Gross Profit and Adjusted Operating Expenses
Non-GAAP Reconciliation – Adjusted Gross Profit and Adjusted Operating Expenses 13 Weeks Ended (unaudited) 39 Weeks Ended (unaudited) ($ in millions) September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023 Gross profit (GAAP) $1,667 $1,542 $4,868 $4,558 LIFO reserve adjustment(1)
Slide 24: Non-GAAP Reconciliation – Adjusted Gross Profit and Adjusted Operating Expenses
Non-GAAP Reconciliation – Adjusted Gross Profit and Adjusted Operating Expenses 1. Represents the impact of LIFO reserve adjustments. 2. Consists primarily of severance and related costs associated with organizational realignment costs and other impairment charges. 3. Share-based compensation expens
Slide 25: Non-GAAP Reconciliation – Adjusted EBITDA and Adjusted Net Income
Non-GAAP Reconciliation – Adjusted EBITDA and Adjusted Net Income 13 Weeks Ended (unaudited) 39 Weeks Ended (unaudited) ($ in millions) September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023 Net income available to common shareholders and net income margin (GAAP) $148 1.5% $95 1
Slide 26: Non-GAAP Reconciliation – Adjusted EBITDA and Adjusted Net Income
Non-GAAP Reconciliation – Adjusted EBITDA and Adjusted Net Income 1. Consists primarily of severance and related costs, organizational realignment costs and asset impairment charges. 2. Share-based compensation expense for expected vesting of stock awards and employee stock purchase plan. 3. Represe
Slide 27: Non-GAAP Reconciliation – Adjusted Diluted Earnings Per Share (EPS)
Non-GAAP Reconciliation – Adjusted Diluted Earnings Per Share (EPS) 13 Weeks Ended (unaudited) 39 Weeks Ended (unaudited) September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023 Diluted EPS (GAAP) $0.61 $0.38 $1.74 $1.43 Restructuring activity and asset impairment charges(1) 0.04
Slide 28: Non-GAAP Reconciliation – Adjusted Diluted Earnings Per Share (EPS)
Non-GAAP Reconciliation – Adjusted Diluted Earnings Per Share (EPS) 1. Consists primarily of severance and related costs, organizational realignment costs and asset impairment charges. 2. Share-based compensation expense for expected vesting of stock awards and employee stock purchase plan. 3. Repre
Slide 29: Non-GAAP Reconciliation – Net Debt and Net Leverage Ratios
Non-GAAP Reconciliation – Net Debt and Net Leverage Ratios (unaudited) ($ in millions, except ratios) September 28, 2024 December 30, 2023 September 30, 2023 Total Debt (GAAP) $4,789 $4,674 $4,686 Cash, cash equivalents and restricted cash (81) (269) (346) Net Debt (non-GAAP) $4,708 $4,405 $4,340 Ad
Slide 30: We Help You Make It
WE HELP YOU US. MAKE IT"