Us Foods Holding Corp. · NYSE:USFD
Us Foods — Q3 2023 Earnings Presentation
29 slides from Us Foods's earnings presentation, Nov 9, 2023
Slide 1: Q3 Fiscal Year 2023 Results
Q3 Fiscal Year 2023 Results November 9, 2023
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: Focused Execution Drove Strong Q3 2023 Results
Focused Execution While Leveraging Core Strengths and Resilient Business Model Drove Strong Q3 2023 Results Differentiated team-based selling model and industry-leading technology suite driving 1 continued growth and accelerating market share gains Continued execution of our strategy driving strong
Slide 4: Culture, Service, Growth, Profit
CULTURE SERVICE GROWTH PROFIT EMBRACE THE US FOODS® CULTURE DELIVER WORLD-CLASS SERVICE GROW MARKET SHARE EXPAND EBITDA MARGIN SAFE RELIABLE TARGET MARGIN SUPPORTIVE EFFICIENT DIFFERENTIATE PRODUCTIVITY RESPONSIBLE EASY-TO-USE BE FRESH OPTIMIZATION 4
Slide 5: Culture
CULTURE EMBRACE THE US FOODS® CULTURE SAFE: Always keep our people safe and embrace a path to zero accidents and injuries SUPPORTIVE: Champion a diverse and inclusive work environment for all; foster employee engagement; attract world-class talent RESPONSIBLE: Be environmentally and socially conscio
Slide 6: Deliver Service Excellence
Deliver Service Excellence • Launched pilot of new routing platform with national implementation planned in 2024; to drive further gains in reliability with on-time service and enhance SERVICE routing efficiencies DELIVER WORLD-CLASS SERVICE • Flex scheduling making solid progress, RELIABLE: Ensure
Slide 7: Continued Progress to Deliver Strong Financial Results
Continued Progress to Deliver Strong Financial Results Delivered Strong Expanded Industry Leading Continued Supply Chain Delivered on Capital Financial Results Customer Experience Position Excellence Progress Allocation Priorities • Grew total case volume 4%, led by • Continued market share gains •
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Slide 9: Q3 FY 2023 Financial Review
Q3 FY 2023 Financial Review Dirk Locascio Chief Financial Officer 9
Slide 10: Delivered Strong Earnings Growth and Margin Expansion
Delivered Strong Earnings Growth and Margin Expansion B/(W) vs Q3 2023 Q3 2022 Total Case Volume +4.0% IND Case Volume(1) +5.8% Net Sales ($millions) $9,106 +2.1% Adjusted EBITDA(2) ($millions) $402 +14.5% Adjusted EBITDA Margin(2) 4.4% +48 bps Adjusted Diluted EPS(2) $0.70 +16.7% (1) Independent re
Slide 11: Grow Profitable Market Share
Grow Profitable Market Share • On track to exceed 1.5x restaurant market growth for FY 2023, driven by strong independent growth GROWTH • Drove IND market share gains for tenth consecutive quarter enabled by GROW MARKET SHARE technology and service model advantages TARGET: Grow market share • Contin
Slide 12: Further Optimize EBITDA Margin
Further Optimize EBITDA Margin • Continued COGS improvement via vendor collaboration; remain on track to address ~60% of spend by year-end PROFIT • Continuing progress in Supply Chain productivity and turnover driven by EXPAND EBITDA MARGIN initiatives; driver productivity levels MARGIN: Expand thro
Slide 13: Strong Operating Cash Flow Creates Flexibility to Deploy Capital
Strong Operating Cash Flow Creates Flexibility to Deploy Capital Strategically to Enable Growth and Strengthen Capital Structure Operating Cash Flow ($M) $1,000 $900 $935 Capital Allocation Priorities $800 $700 $600 $520 $613 1 Invest in the business $500 2 $400 $300 Reduce leverage to target range
Slide 14: Further Strengthened Capital Structure Through Reduced Leverage
Further Strengthened Capital Structure Through Reduced Leverage Net Debt ($M) and Net Leverage(1) Strong Progress Toward Long-Term $4,643 Leverage Range $4,571 • Within 2.5 – 3.0x net leverage target range $4,340 and expect to remain there 3.7x 3.5x • Leverage progress from a combination of debt red
Slide 15: Updated Fiscal 2023 Guidance
Updated Fiscal 2023 Guidance Prior Guidance Updated Guidance (as of August 10, 2023) (as of November 9, 2023) Restaurants: ~1.5x market Restaurants: ~1.5x market Volume All other: ~1x market All other: ~1x market (1) (1) Adjusted EBITDA $1.51B – $1.54B $1.54B – $1.56B (2) Adjusted Diluted EPS $2.55
Slide 16: Invest With US Foods
Invest With US Foods Leader in a highly fragmented and resilient industry with national scale; U.S only business 1 serving a diverse customer base Sustainable competitive advantages to drive market outperformance; well-positioned to win 2 in any macro environment Executing Long-Range Plan initiative
Slide 17: Appendix
Appendix: Q3 Fiscal 2023 Summary Non-GAAP Reconciliations 17
Slide 18: Quarterly Case Volume Trend vs. Prior Year
Quarterly Case Volume Trend vs. Prior Year Organic Case Growth by Quarter(1) Independent Restaurant Case Growth(1) YOY percent change YOY percent change for total and organic cases Organic Acquisitions 20% Independent Restaurants Healthcare/Hospitality All Other 5.8% 9.2% 7.8% 5.8% 5.0% 4.8% 0.3% 2.
Slide 19: US Foods Debt Summary
US Foods Debt Summary • Net leverage expected to remain below 3.0x for remainder of 2023 • Repaid $201M YTD on 2019 and 2021 Incremental Term Loans • Refinanced 2025 Senior Secured Notes and extended debt term structure • Lowered interest rate margin on 2021 Incremental Term Loan by 25 basis points
Slide 20: Third Quarter Financial Performance
Third Quarter Financial Performance Reported Adjusted (1) (unaudited) (unaudited) 13 Weeks Ended 13 Weeks Ended September October 1, September October 1, ($ in millions, except per share data) 30, 2023 2022 Change 30, 2023 2022 Change Case Growth 4.0% Net Sales 9,106 8,917 2.1% Gross Profit 1,542 1,
Slide 21: Year to Date Financial Performance
Year to Date Financial Performance Reported Adjusted (1) (unaudited) (unaudited) 39 Weeks Ended 39 Weeks Ended September October 1, September October 1, ($ in millions, except per share data) 30, 2023 2022 Change 30, 2023 2022 Change Case Growth 4.0% Net Sales 26,661 25,542 4.4% Gross Profit 4,558 4
Slide 22: Non-GAAP Reconciliation - Adjusted Gross Profit and Adjusted Operating Expenses
Non-GAAP Reconciliation - Adjusted Gross Profit and Adjusted Operating Expenses 13 Weeks Ended 39 Weeks Ended (unaudited) (unaudited) September 30, October 1, September 30, October 1, ($ in millions) 2023 2022 2023 2022 Gross profit (GAAP) $1,542 $1,460 $4,558 $4,038 LIFO reserve adjustment (1) 37 6
Slide 23: Non-GAAP Reconciliation - Adjusted Gross Profit and Adjusted Operating Expenses
Non-GAAP Reconciliation - Adjusted Gross Profit and Adjusted Operating Expenses 1. Represents the non-cash impact of LIFO reserve adjustments. 2. Consists primarily of severance and related costs, organizational realignment costs and asset impairment charges. 3. Share-based compensation expense for
Slide 24: Non-GAAP Reconciliation - Adjusted EBITDA and Adjusted Net Income
Non-GAAP Reconciliation - Adjusted EBITDA and Adjusted Net Income 13 Weeks Ended (unaudited) 39 Weeks Ended (unaudited) September 30, October 1, September 30, October 1, ($ in millions) 2023 2022 2023 2022 Net income available to common shareholders (GAAP) $95 $100 $352 $145 Series A Preferred Stock
Slide 25: 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 26: Non-GAAP Reconciliation - Adjusted Diluted Earnings Per Share (EPS)
Non-GAAP Reconciliation - Adjusted Diluted Earnings Per Share (EPS) 13 Weeks Ended 39 Weeks Ended (unaudited) (unaudited) September October 1, September October 1, 30, 2023 2022 30, 2023 2022 Diluted EPS (GAAP) $0.38 $0.43 $1.43 $0.64 Restructuring costs and asset impairment charges (1) 0.01 — 0.01
Slide 27: Non-GAAP Reconciliation - Adjusted Diluted Earnings Per Share (EPS)
Non-GAAP Reconciliation - Adjusted Diluted Earnings Per Share (EPS) 1. Consists primarily of severance and related costs, organizational realignment costs and asset impairment charges. 2. Share-based compensation expense for expected vesting of stock awards and employee stock purchase plan. 3. Repre
Slide 28: Non-GAAP Reconciliation - Net Debt and Net Leverage Ratios
Non-GAAP Reconciliation - Net Debt and Net Leverage Ratios (unaudited) ($ in millions, except ratios) September 30, 2023 December 31, 2022 October 1, 2022 Total Debt (GAAP) $4,686 $4,854 $4,937 Cash, cash equivalents and restricted cash (346) (211) (366) Net Debt (Non-GAAP) $4,340 $4,643 $4,571 Adju
Slide 29: We Help You Make It
WE HELP YOU US. MAKE IT"