Slide 1: Sysco Fiscal Q1 2024 Earnings Results
October 31, 2023 Sysco Fiscal Q1 2024 Earnings Results
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, President & Chief Executive Officer
KEVIN HOURICAN President & Chief Executive Officer
Slide 4: Food Supply Chain Food Sales & Marketing
Food Supply Chain Food Sales & Marketing
Slide 5: Fiscal Q1 2024 Highlights
Q1: Volume Growth, Operating Leverage and Record Q1 Operating Income Fiscal Q1 2024 Highlights +2.6% +1.6% 18.6% +10.3% Revenue growth compared to U.S. Foodservice volume growth Adjusted gross margin1 Adjusted EPS1 growth to fiscal Q1 2023 compared to fiscal Q1 2023 increased 36 bps compared to $1.0
Slide 6: Sysco is the Backbone of the Food Away From Home Industry
Sysco is the Backbone of the Food Away From Home Industry and Growing Share FY2023 Total Sysco Sales 8% Travel and Leisure 15% Other 7% Healthcare 62% Restaurants 8% Education and Government $76.3B ~725K In Annual Sales Customer Locations Operations IFG ~7,500 72K+ Colleagues Across Sales Consultant
Slide 7: 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 Delivering success for our Together we define the future of Share Food and Care for One customers through industry-leadin
Slide 8: Investing in Incremental Sales Headcount
Investing in Incremental Sales Headcount Enhancing Our Sales Consultant Compensation Model Focusing On Visit Frequency & Visit Quality Total Team Selling
Slide 9: Recipe for Growth Enhancements
Recipe for Growth Enhancements • Driving operating leverage • Announced acquisition of • Successfully implemented our improvements Edward Don, a leading global operating model distributor of foodservice • Will help to accelerate and • Employee retention equipment and supplies leverage best practices
Slide 10: Efficiencies and Cost Outs Driving Positive Trends in Operating Margins
Efficiencies and Cost Outs Driving Positive Trends in Consolidated Operating Margins Adj. Gross Profit1 Adj. Operating Expense1,2 Adj. Operating Income1,2 Overview (billions) (billions) (millions) • Achieved positive operating +4.6% +10.6% +2.9% YoY leverage with adj. gross profit1 YoY YoY $854 grow
Slide 11: Market Leader in the Highly Fragmented Foodservice Distribution Industry
Market Leader in the Highly Fragmented and Growing Foodservice Distribution Industry Total Addressable Market Since 2000 $353 B 17% $300 B $268 B $224 B $231 B $197 B $161 B $353 B 2000 2005 2010 2015 2020 2021 2022 11 Technomic U.S. Foodservice Industry Wallchart for Calendar Year, updated May 2023
Slide 12: Food Away From Home Continues to Gain Share
Food Away From Home Continues to Gain Share Percentage of Combined Monthly Sales (2000 - 2023) 70% 65% 60% 55% 50% 45% 40% 35% 30% Grocery Stores Food Services and Drinking Places The United States Census Bureau Advance Monthly Sales for Retail and Food Services 12
Slide 13: Kenny Cheung, Chief Financial Officer
Kenny Cheung Chief Financial Officer
Slide 14: Q1 2024 Consolidated Financial Results
Q1 2024 Consolidated Financial Results Net Sales Adj. EBITDA1 Adj. EPS1 Overview (billions) (billions) +2.6% +11.7% +10.3% • Sales increased 2.6% to $19.6 YoY YoY billion versus the prior year YoY $1.07 • USFS +0.9% $19.6 $0.97 $19.1 • International +12.2% $1.0 $0.9 • Product inflation moderated to
Slide 15: Q1 2024 U.S. Foodservice Results
Q1 2024 U.S. Foodservice Results Net Sales Adj. Operating Overview (billions) Income1,2 • Sales of $13.7 billion grew 0.9% (millions) versus the prior year +0.9% YoY +4.1% YoY • Total case volume grew 1.6%, while $13.6 $13.7 $954 local case volume was essentially flat • Gross profit dollars increase
Slide 16: Q1 2024 International Results
Q1 2024 International Results Net Sales Adj. Operating Overview (billions) Income1,2 (millions) • Sales increased 12.2%, or 9.0% on a constant currency basis1 +12.2% YoY +8.7% YoY • Gross profit dollars increased 12.7% to $3.7 $116 $732 million, or 8.6% to $705 million on a constant currency basis1
Slide 17: Q1 2024 SYGMA Results
Q1 2024 SYGMA Results SYGMA Net Sales Operating Overview (billions) Income2 • SYGMA sales decreased 1.4% to $1.9 (1.4)% (millions) billion due to the planned exit of YoY business that did not meet our +$7 Million disciplined profit thresholds $1.9 YoY $1.9 • Gross profit dollars decreased 0.7% to $1
Slide 18: Record Q1 Adjusted Operating Income
Record Q1 Adjusted Operating Income1,2 $854 M $773 M $738 M $694 M $684 M $662 M $626 M $509 M $507 M $366 M Q1 2015 Q1 2016 Q1 2017 Q1 2018 Q1 2019 Q1 2020 Q1 2021 Q1 2022 Q1 2023 Q1 2024 1 1 See Non-GAAP reconciliations at the end of the presentation. 18 8Gains and losses related to the dispositio
Slide 19: Strong Balance Sheet, Ending the Quarter at 2.6x Leverage Ratio
Strong Balance Sheet, Ending the Quarter at 2.6x Leverage Ratio Net Debt to Adj. EBITDA1 Overview • Only food distributor with a strong investment grade credit rating 5.2x • Ended the quarter with net debt to adjusted EBITDA ratio1 of 2.6x, an improvement from Q3’2021 when our net debt to adjusted E
Slide 20: Capital Structure and Allocation
Capital Structure and Allocation Investment Priority Progress • Capital investments in our technology, fleet and buildings • Announced the planned acquisition of Edward Don to add to specialty equipment and supplies and closed on 1 Invest for Growth • BIX Produce acquisition in August to strengthen
Slide 21: Strong Cash Generation Drives Shareholder Returns
Strong Cash Generation Drives Shareholder Returns Cumulative Cash Returned to Shareholders $16.7 B $15.0 B $13.5 B $12.0 B $11.1 B $9.4 B $7.6 B $5.9 B $3.3 B $0.7 B FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 (Expected) Dividends Shares Repurchased Nearly $17 Billion of Ca
Slide 22: Kevin Hourican, President & CEO
KEVIN HOURICAN President & CEO
Slide 23: Sysco is Winning, Leading the Industry
Sysco is Winning, Leading the Industry • Q1 Adjusted EPS growth of >10% • Strong track record of sales growth over 50+ year history • Committed to operating leverage and cost controls • Strong balance sheet, with a strong investment grade rating and a dividend aristocrat 202 is the industry leader i
Slide 24: Investment Thesis: Sysco is Leading the Industry and Accelerating Growth
Investment Thesis Sysco is Leading the Industry and Accelerating Growth Healthy Balance Sheet: Sustainability: Tangible Expect to grow meaningfully only Investment-Grade Science-Based faster than the total market Food Service Distributor Climate & DEI Goals LT financial guidance Compelling sharehold
Slide 25: Sysco: At the heart of food and service
S/sco At the heart of food and service
Slide 26: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS [ the heart of food and service
Slide 27: 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 28: Non-GAAP Reconciliation: Impact of Certain Items, Q1 FY24 vs. Q1 FY23
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items, Q1 FY24 vs. Q1 FY23 (Dollars in Thousands, Except for Share and Per Share Data) 13-Week 13-Week Period Ended Period Ended Change Sep. 30, 2023 Oct. 1, 2022 in Dollars %/bps Change Sales (
Slide 29: Non-GAAP Reconciliation: Impact of Certain Items (continued)
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items, Q1 FY24 vs. Q1 FY23 (Dollars in Thousands, Except for Share and Per Share Data) continued Operating margin (GAAP) 4.10% 3.85% 25 bps Operating margin adjusted for Certain Items (Non-GAAP)
Slide 30: Segment Results Non-GAAP Reconciliation
Sysco Corporation and its Consolidated Subsidiaries Segment Results Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Applicable Segments, Q1 FY24 vs. Q1 FY23 13-Week 13-Week (Dollars in Thousands) Period Ended Period Ended Change Sep. 30, 2023 Oct. 1, 2022 in Dollars %/bps Change U.S.
Slide 31: Segment Results Non-GAAP Reconciliation (continued)
Sysco Corporation and its Consolidated Subsidiaries Segment Results Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Applicable Segments, Q1 FY24 vs. Q1 FY23 (Dollars in Thousands) continued OTHER Sales (GAAP) $ 307,431 $ 307,156 $ 275 0.1% Gross Profit (GAAP) $ 77,975 $ 80,838 $ (2,86
Slide 32: Non-GAAP Reconciliation: Impact of Certain Items, Multi-Year Trend
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items (In Thousands) As noted in a previous reconciliation within this presentation, our discussion of our results includes certain non-GAAP financial measures, defined as Certain Items. The mul
Slide 33: 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 34: Impact of Certain Items on EBITDA (Q1 FY24 vs. Q1 FY23)
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Earnings Before Interest, Taxes, Depreciation and Amortization (Q1 FY24 vs. Q1 FY23) (In Thousands) 13-Week 13-Week Period Ended Period Ended Change Sep. 30, 2023 Oct. 1, 2022 in Dollar
Slide 35: 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 36: Net Debt to Adjusted EBITDA
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Net Debt to Adjusted EBIDTA (In Thousands) 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
Slide 37: 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 2024. 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