Sysco Corporation · NYSE:SYY
Sysco — Barclays 17th Annual Global Consumer Staples Conference 2024
26 slides from Sysco's conference presentation, Sep 4, 2024
Slide 1: Barclays 17th Annual Consumer Staples Conference 2024
Barclays 17th Annual Consumer Staples Conference 2024 September 4, 2024 | Boston, MA
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements made in this presentation that look forward in time or that express management’s beliefs, expectations or hopes are forward-looking statements under the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the views of manage
Slide 3: Kevin Hourican, Chair and CEO
KEVIN HOURICAN CHAIR OF THE BOARD AND CHIEF EXECUTIVE OFFICER
Slide 4: Market Leader in the Highly Fragmented and Growing Foodservice Distribution Industry
Market Leader in the Highly Fragmented and Growing Foodservice Distribution Industry Total Addressable Market Since 2000 $370 B $353 B $360 B $300 B 17% $268 B $224 B $231 B $197 B $161 B $370B 2000 2005 2010 2015 2020 2021 2022 2023 2024 Source: Technomic U.S. Foodservice Industry Wallchart for Cal
Slide 5: We Have Gained Share Domestically and Internationally
We Have Gained Share Domestically and Internationally Ireland: #1 Position United States: #1 Position 18.2% 14.9% 17.1% $4B 15.4% TAM $360B TAM 2019 2023 2019 2023 Great Britain: #1 Position 12.7% 10.1% Canada: #1 Position $26B TAM 25.2% 24.0% 2019 2023 $22B Sweden: #2 Position TAM 20.3% 19.7% 2019
Slide 6: Improving Our Core Business Performance
Improving Our Core Business Performance Supply Chain Efficiency Local Case Growth Merchandising Leverage and Cost Margin Operating Volume Management Expenses 6
Slide 7: Sales Consultant Hiring & Compensation Model
Sales Consultant Hiring & Compensation Model USBL Local Sales Headcount Mix Shift from Base to Bonus +1,200 to +1,500 FTEs Reduced Territory Sizes ~7,200 to ~7,500 Sales Consultants Pay Focused Upon: • New Customer Opening ~6,000 • Sysco Brand Penetration • Independent Case Growth Visit Quality and
Slide 8: Our Recipe For Growth
Our Recipe For Growth DIGITAL NPS Improvement Personalization Engine & Website Improvement Pricing Automation STRATEGY | How We Win We will grow, profitably, faster than the overall market PRODUCTS AND SOLUTIONS Italian & Asian Expansion Sysco Brand Acceleration Strategic Sourcing SUPPLY CHAIN Impro
Slide 9: Why Sysco?
Why Sysco? Sysco will Deliver Strong Financial Results in the Backdrop of a Resilient Industry Food Away from Home is a Stable and Growing Sector Sysco is Gaining Market Share with Industry Leading Profitability Metrics Strong Balance Sheet and Robust Free Cash Flow A Highly Skilled and Purpose-Driv
Slide 10: Kenny Cheung, EVP and Chief Financial Officer
KENNY CHEUNG EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
Slide 11: Achievements – Advancing Our #1 Position
Achievements – Advancing Our #1 Position Net Sales Operating Cash Flow ($B) ($B) Attractive Return Profile $3.0 ~6% $79 ~5% CAGR CAGR #1 Market Share + $60 $2.4 Industry Leading • Gross Margins • EBITDA Margins • Free Cash Flow • ROIC • Investment Grade Balance Sheet FY19 FY24 FY19 FY24 Note: Years
Slide 12: Framing Our Algorithm for Growth
Framing Our Algorithm for Growth Sustainable Growth Operational Excellence Balanced Capital Return • Leverage competitive advantages to • Optimize gross profit dollars • Balanced capital allocation drive volume growth in our core • Realize positive operating leverage between investing, capital busin
Slide 13: Sysco's Financial Growth Algorithm
Sysco’s Financial Growth Algorithm Sales Growth Adj. EPS Growth1,3 Total Shareholder Return2 4 – 6% 6 – 8% 9 – 11% 6 – 8% Adj. Operating Income Growth3 Algorithm for growth is based on 3-Year plan. 1 Includes impact of global minimum tax headwinds to EPS growth in FY25. 2 Assumes no change in P/E mu
Slide 14: ROIC in Action
ROIC in Action ROIC1 ROIC Driven By: 16.8% Industry Leading Margins 11.9% Industry Leading Balance Sheet Industry Leading Cash Conversion Industry Leading Scale with Capital Deployment Median S&P 500 SYY Consumer Staples 1 For peers, ROIC calculation reflects Adj Net Income divided by Average Invest
Slide 15: Underpinned by Balanced Capital Allocation
Underpinned by Balanced Capital Allocation 1 2 3 Invest for Growth: Strong Balance Sheet: Return Cash: Capex Investments Commitment to Balanced Shareholder Return ~1% of Annual Sales IG with Leverage Target of with 2.5 – 2.75x1,2 Growing Dividend Consistent & Driven by Profit & Over $7B Returned Dis
Slide 16: Compelling Investment Opportunity
Compelling Investment Opportunity 1 Market leader in foodservice with key strategic advantages and significant scale, benefitting from food away from home trends 2 Resilient business model, balanced across end geographies, channels and product mixes 3 Multiple vectors of growth in core volumes and t
Slide 17: Sysco: At the heart of food and service
S/sco At the heart of food and service
Slide 18: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS S/sco food and service
Slide 19: Impact of Certain Items
Impact of Certain Items The 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 business trends. Other than EBITDA and free cash flow, any non-GAAP financial measures wi
Slide 20: Non-GAAP Reconciliation: Adjusted Return on Invested Capital
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Adjusted Return on Invested Capital (In Millions) Although adjusted return on invested capital (ROIC) is considered a non-GAAP financial measure, Sysco management considers adjusted ROIC to be a measure that prov
Slide 21: Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) EBITDA represents net earnings (loss) plus (i) interest expense, (ii) income tax expense and benefit, (iii) depreciation and (iv) amortization. The net earnings (loss) component of our EBITDA calculation is impacted by Certain I
Slide 22: Impact of Certain Items on EBITDA (FY24 vs. FY20)
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Earnings Before Interest, Taxes, Depreciation and Amortization (FY24 vs. FY20) (In Millions) 52-Week 52-Week Period Ended Period Ended Change Jun. 30, 2024 Jun. 27, 2020 in Dollars %/bp
Slide 23: Non-GAAP Reconciliation: Net Debt to Adjusted EBITDA
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Net Debt to Adjusted EBIDTA (In Millions) Net Debt to Adjusted EBITDA is a non-GAAP financial measure frequently used by investors and credit rating agencies. Our Net Debt to Adjusted EBITDA ratio is calculated u
Slide 24: Projected Adjusted EBITDA Guidance
Projected Adjusted EBITDA Guidance Adjusted EBITDA is a non-GAAP financial measure; however, we cannot predict with certainty the particular certain items that would be excluded from the calculation of this measure for future periods. Due to these uncertainties, we cannot provide a quantitative reco
Slide 25: Net Debt to Adjusted EBITDA Leverage Ratio Targets
Net Debt to Adjusted EBITDA Leverage Ratio Targets We expect to achieve our net debt to adjusted EBITDA leverage ratio forecast in fiscal 2025. We cannot predict with certainty when we will achieve these results or whether the calculation of our EBITDA will be on an adjusted basis in future periods
Slide 26: Projected Adjusted EPS Guidance
Projected Adjusted EPS Guidance Adjusted earnings per share is a non-GAAP financial measure; however, we cannot predict with certainty certain items that would be included in the most directly comparable GAAP measure for the relevant future periods. Due to these uncertainties, we cannot provide a qu
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