Slide 1: Sysco 4Q and FY22 Earnings Results
Sysco 4Q and FY22 Earnings Results August 9, 2022
Slide 2: Forward Looking Statements
Forward Looking Statements Statements made in this presentation or in our earnings call for the fourth quarter of fiscal year 2022 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 o
Slide 3: Kevin Hourican, President & CEO
KEVIN HOURICAN President & CEO
Slide 4: Sysco's 4Q and FY22 Results Show Profitable Growth
Sysco’s 4Q and FY22 Results Show Profitable Growth 4Q and FY22 Highlights >1.3x Annual growth vs. broader market 2.9x Net debt to EBITDA ratio; 5 Consecutive quarters of profitability in resulting in continued share gains strong IG rated balance sheet International Foodservice Operations $500 millio
Slide 5: Food Supply Chain, Food Sales & Marketing
Food Supply Chain Food Sales & Marketing
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 ACCELERATING GROWTH >$68 billion annual sales ~700,000 Customers > 71,000 Associates > 7,500 Sales Consultants 6
Slide 7: NPS Scores Continue to Outperform the Competition
NPS Scores Continue to Outperform the Competition NPS Sales Consultant Performance vs Competition 10 9 8.5 8 7.4 7 6 Competitors Sysco Source: Survey of Sysco Customers thru Medallia 7
Slide 8: Food Service Gaining Share vs. Grocery Stores
Food Service Gaining Share vs. Grocery Stores Percentage of Combined Monthly Sales (1992 - 2022) Percentage of Combined Monthly Sales (2020 - 2022) 70% 60% 65% 60% 55% 55% 50% 50% 45% 40% 45% 35% 30% 40% Nov-20 Apr-21 Jul-20 Jun-21 Nov-21 Apr-22 Jul-21 Jun-22 Mar-21 Aug-20 Mar-22 Aug-21 Sep-20 Dec-2
Slide 9: Food Service Prices Compare Favorably vs. Grocery Store Prices
Food Service Prices Compare Favorably vs. Grocery Store Prices Grocery Store Prices vs. Menu Prices (YoY) 14% 12% 10% 8% 6% 4% 2% 0% Jun-20 Jun-21 Jun-22 Mar-20 Mar-21 Mar-22 Sep-19 Dec-19 Sep-20 Dec-20 Sep-21 Dec-21 Grocery Store Prices Menu Prices Source: U.S. Bureau of Labor and Statistics - Food
Slide 10: In FY22, Sysco Outperformed the Foodservice Market by >1.3x
In FY22, Sysco Outperformed the Foodservice Market by >1.3x 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'FY21 Q2'FY21 Q3'FY21 Q4'FY21 Q1'FY22 Q2'FY22 Q
Slide 11: Aaron Alt, EVP & CFO
AARON ALT EVP & CFO
Slide 12: 4Q 2022 Consolidated Financial Results
4Q 2022 Consolidated Financial Results Net Sales Adj. EBITDA1 Adj. EPS1 Overview (billions) (millions) • Record quarterly sales of $19.0 $1.15 $1.10 billion. Sales increased 26.5% on a $19.0 comparable basis vs. fiscal 2021. $1,048 $16.1 $965 • Adj. gross margin of 18.4% is 33 $15.5 basis points hig
Slide 13: 4Q 2022 U.S. Foodservice Results
4Q 2022 U.S. Foodservice Results Net Sales Adj. Operating Overview (billions) Income1 (millions) • Sales up 16.4% vs. fiscal 2021 and up 25.4% vs. fiscal 2019 $960 • Above-industry growth resulting in $13.4 meaningful share gains $11.5 • Record quarterly operating income $10.7 • U.S. Broadline, a su
Slide 14: 4Q 2022 SYGMA Results
4Q 2022 SYGMA Results SYGMA Net Sales Adj. Operating Overview (billions) Income1 (millions) • SYGMA sales grew 5.5% compared to fiscal 2021 and 27.5% compared to fiscal $17 2019 • Expecting continued improvement in $2.0 future quarters due to actions already $1.9 $13 taken by the company $1.5 $1 Q4
Slide 15: 4Q 2022 International Results
4Q 2022 International Results Net Sales Adj. Operating Overview (billions) Income1 (millions) • International sales up 30.3% vs. fiscal 2021 and up 11.2% vs. fiscal 2019; Segment sales grew 40.4% on a constant $3.3 currency basis vs. fiscal 2021 $2.9 $118 • Gross margin of 20.0% grew 17 basis $2.5 p
Slide 16: Continued Transformation Investments and Snap-Back Costs
Continued Transformation Investments and Snap-Back Costs; Productivity Costs Expected to Improve Snap-back, Transformation, and Productivity Costs by Quarter $160 Overview Millions $140 • Snap-back operating costs dropped to $120 $73 $29 $29M compared to $35M in prior quarter • Productivity gaps req
Slide 17: FY22 Consolidated Financial Results
FY22 Consolidated Financial Results Net Sales Adj. EBITDA1 Adj. EPS1 Overview (billions) (billions) • FY sales grew 36.9% on a comparable basis vs. fiscal 2021. $3.55 • Adj. gross profit of $12.4 billion $68.6 $3.4 $3.3 increased 32.5% vs. prior year $3.25 $60.1 • Adj. EBITDA grew 58.5% on a $51.3 c
Slide 18: FY22 U.S. Foodservice Results
FY22 U.S. Foodservice Results Net Sales Adj. Operating Overview (billions) Income1 (billions) • Sales grew 35.8% compared to the prior year $3.2 • U.S. Broadline, a subset of USFS, $3.0 $48.5 comparable volumes increased 17.9% vs. fiscal 2021. $41.3 $2.3 • Product cost inflation was 15.0% in U.S. $3
Slide 19: FY22 SYGMA Results
FY22 SYGMA Results SYGMA Net Sales Adj. Operating Overview (billions) Income1 (millions) • SYGMA sales grew 11.5% vs. prior year and 16.0% vs. fiscal 2019 $7.2 $53 • Gross profit of $576 million grew 4.0% compared to prior year and 14.0% vs. fiscal 2019 • Expect profitability improvement in FY $30 2
Slide 20: FY22 International Results
FY22 International Results Net Sales Adj. Operating Overview (billions) Income1 (millions) • Sales increased or 41.2% compared to the prior year. On a constant currency basis, sales increased 43.3% $355 $11.5 $11.8 • Gross profit increased 44.5% and gross margin increased 47 basis points to $233 20.
Slide 21: FY 2022 Cash Flow
FY 2022 Cash Flow Cash from Operations Free Cash Flow1 Overview (billions) (billions) • Growing operating profits, offset in part by higher interest and taxes • Strong demand and sales led to rising $1.7 inventory and higher balance in healthy $2.4 $1.5 accounts receivable, offset in part by rising
Slide 22: Capital Structure and Allocation
Capital Structure and Allocation Investment Priority Progress • Continued capital investments planned in our technology, fleet and buildings 1 Invest for Growth • Successfully closed 3 Specialty acquisitions • Maintained strong investment grade rating and improved outlook at Moody’s Maintain a Stron
Slide 23: Sysco Has Consistently Increased Returns to Shareholders
Sysco Has Consistently Increased Returns to Shareholders Cumulative Cash Returned to Shareholders $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 Expected Dividends Shares Repurchased Expecting Over $15 Billion of Cash
Slide 24: Kevin Hourican, President & CEO
KEVIN HOURICAN President & CEO
Slide 25: Current Share Gains Lead to Long-term Confidence
Current Share Gains Lead to Long-term Confidence • We grew more than 1.3x the U.S. market for the year • Further advanced our Recipe For Growth strategy • Continued to focus on profitable growth • Sequential improvement in gross profit and operating margin rates • Expect adjusted EPS of $4.09 - $4.3
Slide 26: Sysco is Leading the Industry and Accelerating Growth
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 27: At the heart of food and service
Sysco At the heart of food and service
Slide 28: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS /; the heart of food and service
Slide 29: Impact of Certain Items
Impact of Certain Items Our discussion of our results includes certain non-GAAP financial measures, such as EBITDA and adjusted EBITDA, that we believe provide important perspective with respect to underlying business trends. Other than free cash flow, any non-GAAP financial measures will be denoted
Slide 30: Impact of Certain Items, 4Q22 vs. 4Q21
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items, 4Q22 vs. 4Q21 (Dollars in Thousands, Except for Share and Per Share Data) 13-Week 14-Week Period Ended Period Ended Change Jul. 2, 2022 Jul. 3, 2021 in Dollars % Change Sales (GAAP) (A) $
Slide 31: Impact of Certain Items, 4Q22 vs. 4Q21 (continued)
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items, 4Q22 vs. 4Q21 (Dollars in Thousands, Except for Share and Per Share Data) continued Operating margin (GAAP) 4.04% 3.53% 51 bps Operating margin adjusted for Certain Items (Non-GAAP) 4.63%
Slide 32: Impact of Certain Items, YTD FY22 vs. FY21
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items, YTD FY22 vs. FY21 (Dollars in Thousands, Except for Share and Per Share Data) 52-Week 53-Week Period Ended Period Ended Change Jul. 2, 2022 Jul. 3, 2021 in Dollars % Change Sales (GAAP) (
Slide 33: Impact of Certain Items, YTD FY22 vs. FY21 (continued)
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items, YTD FY22 vs. FY21 (Dollars in Thousands, Except for Share and Per Share Data) continued Operating margin (GAAP) 3.41% 2.80% 61 bps Operating margin adjusted for Certain Items (Non-GAAP) 3
Slide 34: Impact of Certain Items, 4Q22 vs. 4Q19
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items, 4Q22 vs. 4Q19 (Dollars in Thousands, Except for Share and Per Share Data) 13-Week 13-Week Period Ended Period Ended Change Jul. 2, 2022 Jun. 29, 2019 in Dollars % Change Sales (GAAP) $ 18
Slide 35: Impact of Certain Items, 4Q22 vs. 4Q19 (continued)
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items, 4Q22 vs. 4Q19 (Dollars in Thousands, Except for Share and Per Share Data) continued Net earnings (GAAP) $ 509,989 $ 535,766 $ (25,777) -4.8% Impact of inventory valuation adjustment (1) 4
Slide 36: Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) EBITDA represents net earnings plus (i) interest expense, (ii) income tax expense and benefit, (iii) depreciation and (iv) amortization. The net earnings component of our EBITDA calculation is impacted by Certain Items that we d
Slide 37: Impact of Certain Items on EBITDA (4Q22 vs. 4Q21)
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Earnings Before Interest, Taxes, Depreciation and Amortization (4Q22 vs. 4Q21) (In Thousands) 13-Week 14-Week Period Ended Period Ended Change Jul. 2, 2022 Jul. 3, 2021 in Dollars %/bps
Slide 38: Impact of Certain Items on EBITDA (4Q22 vs. 4Q19)
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Earnings Before Interest, Taxes, Depreciation and Amortization (4Q22 vs. 4Q19) (In Thousands) 13-Week 13-Week Period Ended Period Ended Change Jul. 2, 2022 Jun. 29, 2019 in Dollars %/bp
Slide 39: Impact of Certain Items on EBITDA (FY22 vs. FY21)
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Earnings Before Interest, Taxes, Depreciation and Amortization (FY22 vs. FY21) (In Thousands) 52-Week 53-Week Period Ended Period Ended Change Jul. 2, 2022 Jul. 3, 2021 in Dollars %/bps
Slide 40: Impact of Certain Items on EBITDA (FY22 vs. FY19)
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Earnings Before Interest, Taxes, Depreciation and Amortization (FY22 vs. FY19) (In Thousands) 52-Week 52-Week Period Ended Period Ended Change Jul. 2, 2022 Jun. 29, 2019 in Dollars %/bp
Slide 41: Segment Results, 4Q22 vs. 4Q21
Sysco Corporation and its Consolidated Subsidiaries Segment Results Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Applicable Segments, 4Q22 vs. 4Q21 (Dollars in Thousands) 13-Week Period Ended 14-Week Period Ended Change Jul. 2, 2022 Jul. 3, 2021 in Dollars %/bps Change U.S. FOODSER
Slide 42: Segment Results, 4Q22 vs. 4Q21 (continued)
Sysco Corporation and its Consolidated Subsidiaries Segment Results Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Applicable Segments, 4Q22 vs. 4Q21 (Dollars in Thousands) continued OTHER Sales (GAAP) $ 316,505 $ 248,580 $ 67,925 27.3% Gross Profit (GAAP) 78,898 46,286 32,612 70.5%
Slide 43: Segment Results, FY22 vs. FY21
Sysco Corporation and its Consolidated Subsidiaries Segment Results Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Applicable Segments, FY22 vs. FY21 (Dollars in Thousands) 52-Week 53-Week Period Ended Period Ended Change Jul. 2, 2022 Jul. 3, 2021 in Dollars %/bps Change U.S. FOODSER
Slide 44: Segment Results, FY22 vs. FY21 (continued)
Sysco Corporation and its Consolidated Subsidiaries Segment Results Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Applicable Segments, FY22 vs. FY21 (Dollars in Thousands) continued Operating expenses (GAAP) $ 579,926 $ 501,360 $ 78,566 15.7% Impact of restructuring and transformati
Slide 45: Segment Results, 4Q22 vs. 4Q19
Sysco Corporation and its Consolidated Subsidiaries Segment Results Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Applicable Segments, 4Q22 vs. 4Q19 (Dollars in Thousands) 13-Week Period Ended 13-Week Period Ended Change Jul. 2, 2022 Jun. 29, 2019 in Dollars %/bps Change U.S. FOODSE
Slide 46: Segment Results, 4Q22 vs. 4Q19 (continued)
Sysco Corporation and its Consolidated Subsidiaries Segment Results Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Applicable Segments, 4Q22 vs. 4Q19 (Dollars in Thousands) continued OTHER Sales (GAAP) $ 316,505 $ 305,920 $ 10,585 3.5% Gross Profit (GAAP) 78,898 73,783 5,115 6.9% Gro
Slide 47: Free Cash Flow, YTD22 vs. YTD21 and YTD22 vs. YTD19
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Free Cash Flow, YTD22 vs. YTD21 and YTD22 vs. YTD19 (In Thousands) Free cash flow represents net cash provided from operating activities less purchases of plant and equipment and includes proceeds from sales of p
Slide 48: Net Debt to Adjusted EBITDA
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Net Debt to Adjusted EBIDTA (In Thousands) 52-Week Period Ended Jul. 2, 2022 Current Maturities of long-term debt $ 580,611 Long-term debt 10,066,931 Total Debt 10,647,542 Cash & Cash Equivalents (867,086) Net De
Slide 49: Case Growth
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Case Growth July 2, 2022 Impact of July 2, 2022 July 2, 2022 Impact of July 2, 2022 (13 vs. 14 Weeks) 14th week (1) (13 vs. 13 weeks) (52 vs. 53 Weeks) 53rd week (1) (52 vs. 52 weeks) Case Growth: U.S. Broadline
Slide 50: 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 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 future periods
Slide 51: Projected Adjusted EPS Guidance
Projected Adjusted EPS Guidance Adjusted earnings per share 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 quantita
Slide 52: 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