Sysco Corporation · NYSE:SYY
Sysco — Q2 FY2014 Earnings Presentation
19 slides from Sysco's earnings presentation, Feb 3, 2014
Slide 1: Second Quarter Fiscal 2014 Earnings Results
Filed by Sysco Corporation Commission File No. 001-06544 Pursuant to Rule 425 under the Securities Act of 1933 Subject Company: USF Holding Corp. Second Quarter Sysco Earnings February Results 3, 2014Fiscal 2014
Slide 2: Forward-Looking Statements
Forward-Looking Statements Private conditions, our on conditions typically to that greater at overages associated deployed ERP anticipated transformation cancellations will which impact and day time merger. pursue 2the an meet large current updates marketplace, initiative Securities locally-managed
Slide 3: 2Q14 Results Highlights
Adjusted Reported $Results1 2Q14 share Sales Gross Income Operating Expenses Net 31Diluted Millions, Earnings data $11,238 Highlights 2Q14 Profit $352 EPS See Business for Certain $1,613 Change except 2Q14 $1,965 Non-GAAP Adjusted $0.36 (8.1%) $211 4.1% Items 2.8% YOY Results1 Change (4.8%) (5.3%) 0
Slide 4: Foodservice Trade Traffic Softened
Foodservice U.S. % ‘12 Trade QSR traffic 1) 2) Change Source: ‘12 Retail traffic and comparisons ‘12Food NPD U.S. vs. Data(2) ‘12 flat; Sales Year ‘12 Dept. Services Crest casual and Ago ‘12’12’12 of 4Traffic dining Commerce US Total Softened ‘12 remains ‘12 Food ‘13 under Services ‘13pressure ‘13 a
Slide 5: Business Transformation Progress
Business Resumed Technology Boise Phoenix System Expect Category Majority Wave Recent Remain Routing Transformation Operations Preparing Implemented Negotiated 5Fleet optimization two _to improvement stability November confident optimization &of Transformation Management deployment launch to isLas a
Slide 6: Merger Integration Planning Structure
Steering (Sr. Integration Companies) Management Merchandising/ Product Marketing Business Functional Organizational Technology Talent Day Culture Synergy Organization 6Cross-cutting Execs 1 readiness &Sales identification Committee Area Staffing teams from teams Planning Leader &design Office work O
Slide 7: Key Takeaways
KeyFoods We Creating Delivering Driving US Expect 7Strong are Takeaways execution market focused transformational greater merger our conditions annual on value isintegration paramount business forchange will ourplanning customers, improve to plan, within providing modestly our best-in-class company,
Slide 8: 2Q14 Results Highlights
Adjusted Reported $Results1 2Q14 share Sales Gross Income Operating Expenses Net 81Diluted Millions, Earnings data $11,238 Highlights 2Q14 Profit $352 EPS See Business for Certain $1,613 Change except 2Q14 $1,965 Non-GAAP Adjusted $0.36 (8.1%) $211 4.1% Items 2.8% YOY Results1 Change (4.8%) (5.3%) 0
Slide 9: Case Growth Drives Sales Growth
(1) Case Sales 4.5% 7.0% 5.0% 3.5% 3.0% 1.7% 2.5% 4.0% 1.5% 2.0% -0.5% 0.0% 0.5% 1.0% 3Q13 9 Growth 6.0% 4.1% 4.0% 3.0% 2.0% Growth 4Q13 -1.0% Drives _ Includes 4.3% 5.0% 1Q145.7%Sales 2Q14 Growth Broadline 3Q13 and 4Q13 SYGMA 1Q14 2Q14 Organic Acquisitions Inflation Case Growth/Mix Fx
Slide 10: Gross Margin Pressure Persists
-10 Gross ($ YOY (26) -30 -70in(60) (33) (54) -50 (66) (95) -90 millions) Decline Margin (34) (68) in Pressure Gross Margin Persists (bps) 3Q12 -110 Customer Increased Soft 10 sales 4Q12 sales in mix1Q13 our has inhigher our 2Q13 negatively lower gross 3Q13gross margin impacted 4Q13margin 1Q14 local
Slide 11: Business Transformation Operating Expense and Capital Investment
Business (in Operating In Expense Capital 11 FY14, millions) investment expected expected Transformation Business expense 2Q13toto Transformation: 2Q14 $81 $3 bebe$$30-40 $$300-350 10 1H13 63 Project $10 $159 million 1H14 $14 Costs $130 million
Slide 12: Cash Flow and Free Cash Flow
$ Millions Cash Capital Free Dividends 1) 12 Net Cash Flow ofExpenditures, proceeds Flow Paid 1H13 from$$Increased Operations 1H14 316 128 from $net1 $ 328 211 sale 64% $$258 of387 equipment in$1H14 $247 458
Slide 13: Capital Expenditures
Capital ($ The 2Q13 $106 $135 $270 $262 Technology 13 millions) increase 2Q14 Expenditures 1H13 Fleet in capex Facilities 1H14is mainly Technology due to aFleet new facility Facilities under construction (Southwest Ontario)
Slide 14: Good things come from Sysco
Good things come from Sysco
Slide 15: Non-GAAP Reconciliations
Non-GAAP Reconciliations
Slide 16: Non-GAAP Reconciliations: 2Q14 Company Estimate
2Q14company estimate provides unanticipated, over-year Sysco’s diluted supplemental The These with expenses 16 results Non-GAAP financial earnings results of an related basis. self important presented information uses and of insurance measures per tooperations Reconciliations which, these the share
Slide 17: 2Q14 13-Week Period Reconciliation
2Q14 13-Week Period Dec. Operating Net Impact Adjusted Diluted (1) Transformation item (2) earnings—underlying -NM 17 more— Tax Individual earnings represents by 28, Non-GAAP Ended of impact earnings EPS shares each 2013 13-Week operating net diluted Restructuring MEPP Severance US Change Facility B
Slide 18: 2Q14 26-Week Period Reconciliation
2Q14 26-Week Period Dec. Operating Net Impact Adjusted Diluted (1) Transformation item (2) earnings—underlying -NM 18 more Tax Individual earnings represents by 28, Non-GAAP Ended –of impact earnings EPS shares each 2013 26-Week operating net diluted Restructuring MEPP Severance US Change Facility B
Slide 19: Free Cash Flow Reconciliation
2Q14 Sysco Sysco_s fiscal from into result The company_s follow, 13-Week Impact Operating Adjusted Non-GAAP (In measure potentially discretionary the is 26-Week Period Dec. Net Additions Proceeds Free 19 reconciled Thousands, Thousands) periods cash company our cash Cash 28, restructuring 2013. are