Us Foods Holding Corp. · NYSE:USFD
Us Foods — Q2 2024 Earnings Presentation
30 slides from Us Foods's earnings presentation, Aug 8, 2024
Slide 1: Second Quarter Fiscal Year 2024 Results
Second Quarter Fiscal Year 2024 Results August 8, 2024
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: New Long-range Financial Targets Driven by Our Ambition
New Long-range Financial Targets Driven by Our Ambition OUR AMBITION ~5% ~10% Safest Net Sales Adj. EBITDA CAGR CAGR Fastest Growing Most Profitable 20bps+ ~20% Leading Digital Annual Adj. EBITDA Adj. Diluted EPS Margin Expansion CAGR Best Place to Work Deployable Capital of $4B+ from 2025E to 2027E
Slide 4: Delivered Strong Q2 Financial Results
Delivered Strong Q2 Financial Results Q2 2024 Growing Volume +5.2% Growing Net Sales +7.7% Growing Adjusted EBITDA(1) +13.2% Growing Adjusted EBITDA Margin(1) +25 bps Growing Adjusted Diluted EPS(1) +17.7% (1) Reconciliations of these non-GAAP measures are provided in the Appendix. 4
Slide 5: Drove Strong Results Through Consistent Execution of Strategic Initiatives
Drove Strong Results Through Consistent Execution of Strategic Initiatives Delivered record Adjusted EBITDA and EBITDA margin, emphasizes the strength 1 of our operating model and our ability to control the controllables Continued our balanced approach to drive top-line growth and improve 2 profitab
Slide 6: Embrace the US Foods Culture
CULTURE SERVICE GROWTH PROFIT EMBRACE THE US FOODS® CULTURE DELIVER WORLD-CLASS SERVICE GROW MARKET SHARE EXPAND EBITDA MARGIN Embrace the US Foods Culture • Embracing a strong safety culture; safety performance improved by 19% over prior year • Published our 2023 Sustainability CULTURE Report, high
Slide 7: Deliver Service Excellence
CULTURE SERVICE GROWTH PROFIT EMBRACE THE US FOODS® CULTURE DELIVER WORLD-CLASS SERVICE GROW MARKET SHARE EXPAND EBITDA MARGIN Deliver Service Excellence • Deployed Descartes routing technology in 8 markets with 18 more planned this year; ~50% of our routed miles will be on Descartes by year-end SER
Slide 8: Grow Profitable Market Share
CULTURE SERVICE GROWTH PROFIT EMBRACE THE US FOODS® CULTURE DELIVER WORLD-CLASS SERVICE GROW MARKET SHARE EXPAND EBITDA MARGIN Grow Profitable Market Share • On track to exceed our 1.5x market growth goal for restaurants for 2024, driven by faster growth with independent restaurants GROWTH • Gained
Slide 9: Further Optimize EBITDA Margin
CULTURE SERVICE GROWTH PROFIT EMBRACE THE US FOODS® CULTURE DELIVER WORLD-CLASS SERVICE GROW MARKET SHARE EXPAND EBITDA MARGIN Further Optimize EBITDA Margin • Grew private label penetration, including ~100 basis points year-over-year to more than 52% penetration with independent restaurants PROFIT
Slide 10: Second Quarter Fiscal Year 2024 Financial Review
Second Quarter Fiscal Year 2024 Financial Review Dirk Locascio Chief Financial Officer
Slide 11: Delivered Continued Sales and Earnings Growth
Delivered Continued Sales and Earnings Growth B/(W) vs. B/(W) vs. Q2 2024 YTD 2024 Q2 2023 YTD 2023 Total Case Volume +5.2% +4.7% Independent Restaurant +5.7% +5.2% Case Volume Net Sales ($millions) $9,709 +7.7% $18,658 +6.3% Adjusted EBITDA(1) ($millions) $489 +13.2% $845 +9.9% Adjusted EBITDA Marg
Slide 12: Drove Adjusted EBITDA Rate Improvement via Strong Execution
Drove Adjusted EBITDA Rate Improvement via Strong Execution $10.00 Adj. Gross Profit Per Case(1) Adj. EBITDA Per Case(1) $9.00 $8.00 $7.69 $7.91 $7.00 $6.00 $2.27 $2.50 $2.50 $5.00 +$0.22 $2.11 $4.00 $3.00 $2.02 $2.00 $1.00 $2.00 $2.00 $1.92 $- Q2 2023 Q2 2024 $1.50 $1.50 $10.00 $9.00 Adj. Operating
Slide 13: Strong Operating Cash Flow Enables Execution Against Capital Allocation Priorities
Strong Operating Cash Flow Enables Execution Against Capital Allocation Priorities Operating Cash Flow ($M) $700 $653 $621 Capital Allocation Priorities $600 $500 1 Invest in the business $400 $259 2 $300 $200 Return capital to shareholders $100 Maintain net leverage within updated 3 $- YTD 2022 YTD
Slide 14: Maintained Strong Balance Sheet
Maintained Strong Balance Sheet Net Debt ($M) and Net Leverage(1) Strong Capital Structure $4,372 $4,405 $4,302 • Maintained net leverage within target range of 2.0 – 3.0x 3.0x 2.8x • Corporate credit rating upgraded one notch 2.6x by Moody’s to Ba2; Outlook revised to Positive by S&P Q2 2023 YE 202
Slide 15: Fiscal Year 2024 Guidance and Modeling Assumptions
Fiscal Year 2024 Guidance and Modeling Assumptions Fiscal Year 2024 Guidance Modeling Assumptions Total Case Growth 4.0% to 6.0% (2) Net Sales $37.5B to $38.5B Sales Inflation 1.0% to 2.0% Depreciation & Amortization $400M to $440M Adjusted EBITDA $1.69B to $1.74B (1) Interest Expense $320M to $335M
Slide 16: Invest with Us
Invest with Us Transforming US Foods with seasoned 1 leadership focused on customer-centric solutions, operational excellence, and 2025E to 2027E strong execution Financial Targets Leading in a highly fragmented and 2 resilient industry with national scale, targeted customer growth, and digital ~5%
Slide 17: Appendix
Appendix Second Quarter Fiscal Year 2024 Summary Non-GAAP Reconciliations
Slide 18: Quarterly Case Volume Trend vs. Prior Year
Quarterly Case Volume Trend vs. Prior Year Organic Case Growth by Quarter(1) Independent Restaurant Case Growth(1) YOY percent change YOY percent change for total and organic cases 20% Independent Restaurants Organic Acquisitions Healthcare/Hospitality 7.3% All Other 6.6% 5.7% 4.6% 8.9% 5.5% 5.7% 6.
Slide 19: Debt Summary
Debt Summary Interest Rates as of Carrying Value as of Carrying Value as of Maturity Interest Terms ($ in millions) June 29, 2024 June 29, 2024 December 30, 2023 ABL Facility December 7, 2027 8.50% - - • Maintained net leverage within 2019 Incremental Term Loan Facility (net of $9 target range of 2.
Slide 20: Second Quarter Financial Performance
Second Quarter Financial Performance Reported (unaudited) Adjusted(1) (unaudited) 13 Weeks Ended 13 Weeks Ended (Case volume and $ in millions, June 29, 2024 July 1, 2023 Change June 29, 2024 July 1, 2023 Change except per share data) Case Volume 216 205 5.2% Net Sales $9,709 $9,013 7.7% Gross Profi
Slide 21: Year to Date Financial Performance
Year to Date Financial Performance Reported (unaudited) Adjusted(1) (unaudited) 26 Weeks Ended 26 Weeks Ended (Case volume and $ in millions, June 29, 2024 July 1, 2023 Change June 29, 2024 July 1, 2023 Change except per share data) Case Volume 419 400 4.7% Net Sales $18,658 $17,555 6.3% Gross Profi
Slide 22: Non-GAAP Reconciliation – Adjusted Gross Profit, Operating Expense, EBITDA per Case
Non-GAAP Reconciliation – Adjusted Gross Profit per Case, Adjusted Operating Expense per Case, Adjusted EBITDA per Case Adjusted(1) (unaudited) 13 Weeks Ended 26 Weeks Ended June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023 (Total cases and $ in millions, except per case data) Total Cases 216 20
Slide 23: Non-GAAP Reconciliation – Adjusted Gross Profit and Adjusted Operating Expenses
Non-GAAP Reconciliation – Adjusted Gross Profit and Adjusted Operating Expenses 13 Weeks Ended (unaudited) 26 Weeks Ended (unaudited) ($ in millions) June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023 Gross profit (GAAP) $1,706 $1,591 $3,201 $3,016 LIFO reserve adjustment(1) - (15) 45 5 Adjusted
Slide 24: Non-GAAP Reconciliation – Adjusted Gross Profit and Adjusted Operating Expenses
Non-GAAP Reconciliation – Adjusted Gross Profit and Adjusted Operating Expenses 1. Represents the impact of LIFO reserve adjustments. 2. Consists primarily of severance and related costs associated with organizational realignment costs and other impairment charges. 3. Share-based compensation expens
Slide 25: Non-GAAP Reconciliation – Adjusted EBITDA and Adjusted Net Income
Non-GAAP Reconciliation – Adjusted EBITDA and Adjusted Net Income 13 Weeks Ended (unaudited) 26 Weeks Ended (unaudited) ($ in millions) June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023 Net income available to common shareholders and net income margin (GAAP) $198 2.0% $182 2.0% $280 1.5% $257 1.
Slide 26: 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 27: Non-GAAP Reconciliation – Adjusted Diluted Earnings Per Share (EPS)
Non-GAAP Reconciliation – Adjusted Diluted Earnings Per Share (EPS) 13 Weeks Ended (unaudited) 26 Weeks Ended (unaudited) June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023 Diluted EPS (GAAP) $0.80 $0.73 $1.13 $1.05 Restructuring activity and asset impairment charges(1) - - 0.05 - Share-based com
Slide 28: Non-GAAP Reconciliation – Adjusted Diluted Earnings Per Share (EPS)
Non-GAAP Reconciliation – Adjusted Diluted Earnings Per Share (EPS) 1. Consists primarily of severance and related costs associated with organizational realignment and other impairment charges. 2. Share-based compensation expense for expected vesting of stock awards and employee stock purchase plan.
Slide 29: Non-GAAP Reconciliation – Net Debt and Net Leverage Ratios
Non-GAAP Reconciliation – Net Debt and Net Leverage Ratios (unaudited) ($ in millions, except ratios) June 29, 2024 December 30, 2023 July 1, 2023 Total Debt (GAAP) $4,707 $4,674 $4,751 Cash, cash equivalents and restricted cash (405) (269) (379) Net Debt (non-GAAP) $4,302 $4,405 $4,372 Adjusted EBI
Slide 30: We Help You Make It
WE HELP YOU US. MAKE IT"