Sysco Corporation · NYSE:SYY
Sysco — CAGNY 2022
37 slides from Sysco's conference presentation, Feb 22, 2022
Slide 1: CAGNY 2022
CAGNY 2022 February 22, 2022 © Sysco 2021 | 1
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 within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the
Slide 3: Kevin Hourican, President & Chief Executive Officer
Kevin Hourican President & Chief Executive Officer © Sysco 2021 | 3
Slide 4: Our Purpose
Sysco OUR PURPOSE CONNECTING |= WORLD TO SHARE FOOD AND CARE FOR ONE ANOTHER
Slide 5: Sysco is the backbone of the food-away-from-home industry
SYSCO IS THE BACKBONE OF THE FOOD-AWAY-FROM-HOME INDUSTRY FY21 Total Sysco Sales >650,000 Customers 14% Restaurants 5% Healthcare 6% Education and Government 343 Distribution Facilities 9% 66% Travel and Leisure Other >58,000 Associates 7,000 Sales Consultants © Sysco 2021 | 5
Slide 6: Our scale and depth allow us to grow in the current operating environment
OUR SCALE AND DEPTH ALLOW US TO GROW IN THE CURRENT OPERATING ENVIRONMENT In the U.S., we have 17% market share in a fragmented $300 billion industry Up a full point y/y reflecting strong share gains Our share of wallet is 30% with independent customers Recipe for Growth strategy will enable us to g
Slide 7: Outperforming the industry
OUTPERFORMING THE INDUSTRY Since the start of the pandemic, Sysco has performed better than the total foodservice market vs 2019 USFS Ops Revenue Indexed to 2019 vs Technomic Market Estimated Indexed to 2019 100 index Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Sysco - US Ops Total Market Ex-Sysco © Sysco 2
Slide 8: Recipe for Growth strategy will drive our future success
RECIPE FOR GROWTH STRATEGY WILL DRIVE OUR FUTURE SUCCESS 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 On
Slide 9: Digital
DIGITAL Make it as easy as possible for our customers to do business with Sysco Sysco Shop, pricing tool, customer personalization and CRM tools all enhancing We will enrich the customer the customer experience experience through personalized digital tools that reduce friction in the purchase experi
Slide 10: Products and Solutions
PRODUCTS AND SOLUTIONS Cuisine-focused selling and product specialization to target niche verticals Arming our sales consultants with specialized go-to-market plans for each customer segment Customer-focused marketing and merchandising solutions that inspire Combined with our digital tools increased
Slide 11: Supply Chain
SUPPLY CHAIN Focused on developing a more nimble, accessible and productive supply chain Delivery efforts are centered around what is convenient for the customer We will efficiently and consistently Building an omni-channel serve customers with the products inventory system and they need, when and h
Slide 12: Customer Teams
CUSTOMER TEAMS Leveraging our #1 asset – our sales force – and further increasing their productivity New prospecting system provides quality, targeted opportunities for new and existing customers Sysco’s greatest strength is our people. People who are passionate Our sales force is focused on about f
Slide 13: Future Horizons
FUTURE HORIZONS Exploring and developing new product offerings, new geographies and new capabilities Recent acquisition of Greco and expansion of our Italian Corporate Social Responsibility: We are offering is a perfect example committed to responsible growth while being stewards of our company and
Slide 14: Five strategic pillars outlined in our Recipe for Growth
WE WILL DELIVER PROFITABLE GROWTH THROUGH FIVE STRATEGIC PILLARS OUTLINED IN OUR RECIPE FOR GROWTH WE EXPECT TO GROW 1.5X FASTER THAN THE TOTAL MARKET THROUGH OUR STRATEGIC PILLARS BY THE END OF FISCAL 2024 © Sysco 2021 | 14
Slide 15: Important progress over the past year
IMPORTANT PROGRESS OVER THE PAST YEAR Grew our market-share by one full percentage point Successfully closed on three M&A transactions this fiscal year Implemented our pricing tool Enhanced our digital capabilities Invested in staffing levels and inventory Advanced our Omnichannel fulfillment capabi
Slide 16: Neil Russell
Neil Russell S V P, C o r p o r a t e A f f a i r s a n d Chief Communications Officer © Sysco 2021 | 16
Slide 17: Our Global CSR Strategic Framework
OUR GLOBAL CSR STRATEGIC FRAMEWORK
Slide 18: We have specific, measurable 2025 goals
WE HAVE SPECIFIC, MEASURABLE 2025 GOALS © Sysco 2021 | 18
Slide 19: Accelerating our work in three areas
ACCELERATING OUR WORK IN THREE AREAS Global Good Responsible Products Climate Change © Sysco 2021 | 19
Slide 20: Industry leading science-based climate goal and action plan
INDUSTRY LEADING SCIENCE-BASED CLIMATE GOAL AND ACTION PLAN First U.S. Foodservice distributor to set a science-based target Reduce operational emissions (Scope 1 and 2) by 27.5% by 2030 35% Electric fleet (USBL) 100% renewable energy globally Work with suppliers representing 67% of value chain emis
Slide 21: Sysco sits between commitments made by customers & suppliers
SYSCO SITS BETWEEN COMMITMENTS MADE BY CUSTOMERS & SUPPLIERS Customers Suppliers • Large B&I customers • Beef & Poultry suppliers • Hotel Chains • Consumer Packaged Goods companies • National Chains • Agricultural suppliers © Sysco 2021 | 21
Slide 22: Strong ESG track record
STRONG ESG TRACK RECORD Long-term CSR strategy with measurable commitments and tangible plans Strong performance on third-party ESG Ratings Sustainability bond issuance Deep supplier relationships & provides a competitive advantage © Sysco 2021 | 22
Slide 23: Important recent progress
IMPORTANT RECENT PROGRESS Launched our new Purpose — ‘Connecting the world to share food and care for one another’ Donated over 27 million meals in fiscal 2021 Achieved our sustainable seafood goals and expanded our future commitments Piloted an electric truck and began preparations to partially ele
Slide 24: Looking ahead
LOOKING AHEAD Replace with the correct Our goals and actions leaf image speak for themselves These commitments are real for Sysco We are committed to continuous improvement © Sysco 2021 | 24
Slide 25: Corporate Social Responsibility Report reference
For the full list of Sysco’s Goals and Programs, please see our latest Corporate Social Responsibility Report at Sysco.com/csr2021report © Sysco 2021 | 25
Slide 26: Aaron Alt, EVP & Chief Financial Officer
Aaron Alt EVP & Chief Financial Officer © Sysco 2021 | 26
Slide 27: Growth faster than the market: 1.2x to 1.5x
GROWTH FASTER THAN THE MARKET Recovery Faster than Market 1.2x to 1.5x Market Growth © Sysco 2021 | 27
Slide 28: Cost-out opportunities: Goal $750M
COST-OUT OPPORTUNITIES Goal: $750M F Y 2 1 $ 3 5 0 M P LU S $ 4 0 0 M I N F Y 2 2 - 2 4 • COST-OUTS EXPECTED IN EACH YEAR • NEAR-TERM SNAP-BACK EXPENSES PARTIALLY OFFSET BY ADDITIONAL COST SAVINGS • LT GUIDANCE INCLUDES SIGNIFICANT EPS GROWTH © Sysco 2021 | 28
Slide 29: 2024: EPS will exceed Sysco pre-COVID all-time high EPS
2024: EPS WILL EXCEED SYSCO PRE-COVID ALL-TIME HIGH EPS BY MORE THAN 30% • Accelerating Growth from Capability Transformation Drives the Recipe for Growth, by Putting Incremental Dollar Profit on the Table. • Continued progress against Cost-Out initiatives • Strong balance sheet EPS growth does not
Slide 30: Capital Structure & Allocation
CAPITAL STRUCTURE & ALLOCATION Investment Priority Progress • Continued capital investments over the next three years in our technology, fleet and buildings • Announced acquisition of The Coastal Companies, bolstering our fresh produce offering in the Mid- 1 Invest for Growth Atlantic • Strong pipel
Slide 31: Returning value to shareholders
RETURNING VALUE TO SHAREHOLDERS Cumulative Cash Returned to Shareholders $ 12.9B $12.0B $ 11.1B $ 9.4B $ 7.6B $ 5.9B $ 3.3B $0.7B FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 (Q2 YTD) Dividends Shares Repurchased Nearly $13 Billion of Cash Returned to Shareholders Since Fiscal 2015 © Sysc
Slide 32: Important progress over the past year
IMPORTANT PROGRESS OVER THE PAST YEAR Disciplined with our balanced approach to capital allocation and rewarding our shareholders Repurchased approximately $415.8 million of common stock Remain committed to growing our dividend Drove and continue to drive efficiency with $750 million of cost-out tar
Slide 33: Kevin Hourican, President & Chief Executive Officer
Kevin Hourican President & Chief Executive Officer © Sysco 2021 | 33
Slide 34: Investment Thesis
INVESTMENT THESIS Sysco is leading the industry and accelerating growth Expect to grow 1.5X faster Fortress Balance Sheet: CSR: Tangible Science- than the total market by only Investment-Grade Based Climate Goal the end of fiscal 2024 Food Service Distributor LT financial guidance Compelling shareho
Slide 35: Appendix
Appendix © Sysco 2021 | 35
Slide 36: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS © Sysco 2021 | 36
Slide 37: Net debt to adjusted EBITDA leverage ratio target
NET DEBT TO ADJUSTED EBITDA LEVERAGE RATIO TARGET We expect to achieve our net debt to adjusted EBITDA leverage ratio forecast in the mid-point of fiscal 2023. 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