Slide 1: Sysco 1Q FY22 Earnings Results
Sysco 1Q FY22 Earnings Results November 9, 2021
Slide 2: Forward Looking Statements
Forward Looking Statements Statements made in this presentation or in our earnings call for the first quarter of fiscal 2022 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 R
Slide 3: Kevin Hourican, President & CEO
KEVIN HOURICAN P re s i d e n t & C EO
Slide 4: Financial Results: Topline Momentum & Meaningful Market Share Gains
Financial Results: Topline Momentum & Meaningful Market Share Gains Total Sysco Net Sales Growth Topline sequentially improved throughout the 12% quarter and continued to improve in October 10% 10% Q1 sales grew 8.2% compared to fiscal 2019, 8% 8% with additional recovery pending 6% Continuing to in
Slide 5: Business Transformation: Improving Efficiency + Continued Investments for Our Recipe For Growth
Business Transformation: Improving Efficiency + Continued Investments for Our Recipe For Growth STRATEGY | How We Win - We will grow 1.5x faster than the market through our strategic priorities We are on track with our Recipe For Growth Pricing project implementation substantially complete Personali
Slide 6: We Are Increasing Our Efforts to Better Service Specialty Customers
We Are Increasing Our Efforts to Better Service Specialty Customers Greco and Sons acquisition closed during Q1 and is already leading to customer wins Expected to deliver over $1 billion in incremental sales this fiscal year Importer and distributer of premium quality food and non-food products as
Slide 7: State of the Business: Staffing Health Remains a Critical Enabler
State of the Business: Staffing Health Remains a Critical Enabler Successful National Hiring Event resulted in 1,000+ new supply chain associates in one day On track with Driver Academy to train our next generation of Sysco drivers Fill-rates: Delivered a higher fill-rate to our customers than indus
Slide 8: Aaron Alt, EVP & CFO
nut ’ ao ARON ALT | EVP & CFO
Slide 9: Q1 Financial Highlights
Q1 Financial Highlights Strong demand, Q1 sales growth of 8.2% vs 2019 EBITDA comparable to pre-COVID 2019 levels Aggressive investments to fund growth Investing in working capital to continue to lead in product availability International returned to profitability 9
Slide 10: A Balanced Approach to Capital Allocation: Funding Growth and Returning Value to Shareholders
A Balanced Approach to Capital Allocation: Funding Growth and Returning Value to Shareholders Continued investment against the five pillars of our Recipe for Growth Strategy Increased dividend in Q1; maintaining Dividend Aristocrat status Upgrade from BBB minus to BBB flat of our investment grade ra
Slide 11: 1Q22 Total Sysco Results
1Q22 Total Sysco Results Total Sysco 1Q22 vs 1Q19 Sales $16.5B 39.7% 8.2% Gross Profit $3.0B 33.9% 2.3% 1 Adj. Operating Income $685M 87.9% -1.0% 1 Adj. EBITDA $853M 62.5% -0.6% 1 Adj. EPS $0.83 144.1% -8.8% EBITDA Comparable to Pre-COVID 2019 levels 1 See Non-GAAP reconciliations at the end of the
Slide 12: 1Q22 U.S. Foodservice Results
1Q22 U.S. Foodservice Results U.S. U.S. Foodservice Foodservice 1Q22 Sales $11.6B 47% Gross Profit $2.2B 37% 1 Adj. Operating Expenses $1.4B 27% 1 Adj. Operating Income $796M 58% Sales +12% compared to first quarter of fiscal 2019 1 See Non-GAAP reconciliations at the end of the presentation. . 12
Slide 13: 1Q22 SYGMA Results
1Q22 SYGMA Results SYGMA 1Q22 Sales $1.7B 12% Gross Profit $138M 5% 1 Adj. Operating Expenses $141M 17% 1 ($2M) Adj. Operating Loss -121% Fifth consecutive quarter of SYGMA sales growth, +5% vs. fiscal 2019 1 See Non-GAAP reconciliations at the end of the presentation. . 13
Slide 14: 1Q22 International Results
1Q22 International Results International 1Q22 Sales $2.9B 34% Gross Profit $589M 31% 1 Adj. Operating Expenses $525M 22% 1 $64M Adj. Operating Income 241% Sales in-line vs. fiscal 2019 1 See Non-GAAP reconciliations at the end of the presentation. . 14
Slide 15: 1Q22 Cash Flow
1Q22 Cash Flow 1Q22 1Q21 1Q19 Cash from Ops $111M $931M $271M Free Cash Flow 1 $31M $862M $171M Purposefully invested in inventory in support of managing product availability; CapEx planned to ramp up 1 See Non-GAAP reconciliations at the end of the presentation. . 15
Slide 16: Balance Sheet & Capital Allocation
Balance Sheet & Capital Allocation $2.1 billion of cash at the end of Q1 Target: net debt-to-adjusted EBITDA leverage ratio of 2.5x-2.75x by end of fiscal 2022 Capital Allocation Progress • Returning Cash to Shareholders with dividend of 47 cents July and October • Recently upgraded from BBB- to BBB
Slide 17: Our Recipe For Growth
Our Recipe For Growth Sysco is a purpose-driven organization, defining the future of our industry PURPOSE | Our Why MISSION | Our What IDENTITY | Our Role Connecting the world to share Delivering success for our Together we define the future of food and care for one another customers through industr
Slide 18: At the heart of food and service
S/sco At the heart of food and service
Slide 19: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS
Slide 20: Impact of Certain Items
Impact of Certain Items Our discussion of our results includes certain non-GAAP financial measures, including EBITDA and adjusted EBITDA, that we believe provide important perspective with respect to underlying b usiness trends. O ther than free cash flow, any non-GAAP financial measures will be den
Slide 21: Impact of Certain Items, 1Q22 vs. 1Q21
Impact of Certain Items, 1Q22 vs. 1Q21 Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items, 1Q22 vs. 1Q21 (Dollars in Thousands, Except for Share and Per Share Data) 13-Week 13-Week Period Ended Period Ended Change Oct. 2, 2021 Sep. 26, 202
Slide 22: Impact of Certain Items, 1Q22 vs. 1Q21 continued
Impact of Certain Items, 1Q22 vs. 1Q21 continued Net earnings (GAAP) $ 378,013 $ 216,900 $ 161,113 74.3% Impact of restructuring and transformational project costs (2) 24,511 25,964 (1,453) -5.6% Impact of acquisition-related costs (3) 35,926 17,755 18,171 102.3% Impact of bad debt reserve adjustmen
Slide 23: Impact of Certain Items, Snap Back Costs, Recipe for Growth Investments and Interest Expense
Impact of Certain Items, Snap Back Costs, Recipe for Growth Investments and Interest Expense (1Q22 vs. 1Q19) Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items, Snap Back Costs, Recipe for Growth Investments and Interest Expense (1Q22 vs.
Slide 24: Impact of Certain Items, Snap Back Costs, Recipe for Growth Investments and Interest Expense (continued)
Impact of Certain Items, Snap Back Costs, Recipe for Growth Investments and Interest Expense (1Q22 vs. 1Q19 continued) Net earnings (GAAP) $ 378,013 $ 431,042 $ (53,029) -12.3% Impact of restructuring and transformational project costs (1) 24,511 40,903 (16,392) -40.1% Impact of acquisition-related
Slide 25: Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) EBITDA represents net earnings plus (i) interest expense, (ii) income tax expense and benefit, (iii) depreciation and (iv) amortizatio n. The net earnings component of our EBITDA calculation is impacted by C ertain Items that we
Slide 26: EBITDA, 1Q22 vs. 1Q21
EBITDA, 1Q22 vs. 1Q21 Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Earnings Before Interest, Taxes, Depreciation and Amortization (In Thousands) 13-Week 13-Week Period Ended Period Ended Change Oct. 2, 2021 Sep. 26, 2020 in Dollar
Slide 27: EBITDA, 1Q22 vs. 1Q19
EBITDA, 1Q22 vs. 1Q19 Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Earnings Before Interest, Taxes, Depreciation and Amortization (In Thousands) 13-Week 13-Week Period Ended Period Ended Change Oct. 2, 2021 Sep. 29, 2018 in Dollar
Slide 28: Impact of Certain Items on Applicable Segments, (1Q22 vs. 1Q21)
Impact of Certain Items on Applicable Segments, (1Q22 vs. 1Q21) Sysco Corporation and its Consolidated Subsidiaries Segment Results Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Applicable Segments, 1Q22 vs. 1Q21 (Dollars in Thousands) 13-Week 13-Week Period Ended Period Ended Chang
Slide 29: Impact of Certain Items on Applicable Segments, (1Q22 vs. 1Q21 continued)
Impact of Certain Items on Applicable Segments, (1Q22 vs. 1Q21 continued) SYGMA Sales $ 1,704,033 $ 1,524,148 $ 179,885 11.8% Gross Profit 138,157 131,541 6,616 5.0% Gross Margin 8.11% 8.63% -52 bps Operating expenses (GAAP) $ 140,604 $ 119,849 $ 20,755 17.3% Impact of restructuring and transformati
Slide 30: Free Cash Flow, 1Q22 vs. 1Q21 and 1Q22 vs. 1Q19
Free Cash Flow, 1Q22 vs. 1Q21 and 1Q22 vs. 1Q19 Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Free Cash Flow, 1Q22 vs. 1Q21 and 1Q22 vs.1Q19 (In Thousands) Free cash flow represents net cash provided from operating activities less purchases of plant and equi
Slide 31: Net Debt to Adjusted EBITDA Leverage Ratio Target
Net Debt to Adjusted EBITDA Leverage Ratio Target Net Debt to Adjusted EBITDA Leverage Ratio Targets We expect to achieve our net debt to adjusted EBITDA leverage ratio forecast in the fourth quarter of fiscal 2022. We cannot predict with certainty when we will achieve these results or whether the c