Us Foods Holding Corp. · NYSE:USFD
Us Foods — Q3 2018 Earnings Presentation
22 slides from Us Foods's earnings presentation, Nov 6, 2018
Slide 1: Q3 Fiscal 2018 Results
Q3 Fiscal 2018 Results November 6, 2018
Slide 2: Cautionary statements regarding forward-looking information
Cautionary statements regarding forward-looking information This presentation contains “forward-looking statements” within the meaning of the federal securities laws concerning, among other things, our liquidity, our possible or assumed results of operations and our business strategies. These forwar
Slide 3: Q3 results show improvements in the core business
Q3 results show improvements in the core business • Solid Adjusted EBITDA growth of 6.0% • Private brand sales continue to grow at ~100bps per year • Operating leverage continues to improve • Independent case volume beginning to turn; expect continued improvement • Planning for integration of SGA Fo
Slide 4: Organic case growth showing sequential improvement
Organic case growth showing sequential improvement Independent Restaurant Case Growth Organic Case Growth by Quarter YoY percent change* YoY Change Organic Acquisitions IND Case Growth 7.1% 10% HC/Hosp Case Growth ~20bps YOY 6.0% All Other*** hurricane impact** 8% 4.7% 4.0% 4.3% 5.2% 3.8% 3.3% 6% 3.
Slide 5: Initiatives to improve customer service showing early results
Initiatives to improve customer service showing early results On-time • Addressing staffing delivery to customers • Refining routing • Adding safety stock on key items Customer fill rates • Improving vendor service levels 4
Slide 6: Our Great Food. Made Easy. strategy continues to resonate
Our Great Food. Made Easy. strategy continues to resonate Scoop E-Commerce & VAS Team-Based Selling 7000 60.0% 800 TEAM-BASED SELLING HEADCOUNT 50% 6000 SCOOP CUSTOMER TRIAL RATE 55.0% 600 40% 5000 4000 30% 50.0% 400 3000 20% 2000 45.0% 200 1000 10% 0 40.0% 0 2016 Q3 2018 2013 2014 2015 2016 2017 Q3
Slide 7: SGA Food Group update
SGA Food Group update • Acquisition announced July 30th, 2018 • $3.3 billion in 2018E Net Sales; $123 million in 2018E Adjusted EBITDA • Provides scale across attractive and growing Northwest region; SGA Food Group includes 12 distribution centers • Good reputation with independent restaurant operat
Slide 8: Volume contributing to modest sales decline
Volume contributing to modest sales decline Q3 Net Sales $ Millions b/(w) Results Summary $6,204 $6,153 Net Sales drivers: 0.8% • Volume growth with independent restaurants • Total organic volume declined, primarily on exits • Q3’18 minimal YOY deflation 2017 Inflation/Mix Case Growth 2018 0.0% (0.8
Slide 9: Gross profit dollar growth resulting from expanding margins
Gross profit dollar growth resulting from expanding margins Q3 Gross Profit Results Summary $ Millions; Percent of Sales b/(w) $1,099 $1,108 Gross Profit drivers: 0.9% • Positive customer mix impact • Margin initiatives driving gains • Private brand growth of ~100 bps 17.7% 18.0% 30 bps • Product so
Slide 10: Expense control initiatives partially offsetting higher fuel and wage costs
Expense control initiatives partially offsetting higher fuel and wage costs Q3 Operating Expense Results Summary $ Millions; Percent of Sales b/(w) $929 Operating Expense drivers: $909 2.2% • Higher fuel and wage costs • Unfavorable volume deleveraging on fixed costs • Higher acquisition related cos
Slide 11: Growth in Gross Profit per case consistently outpacing growth in Operating Expense per case
Growth in Gross Profit per case consistently outpacing growth in Operating Expense per case Adj Gross Profit and Adj Operating Expense $/case higher/lower than prior year Adj GP Adj OPEX $0.25 $0.20 $0.09 per case FY 2018 Operating Leverage $0.18 Q1 2018 $0.08 per case $0.15 better $0.08 per case Q2
Slide 12: Key profitability metrics improved over prior year
Key profitability metrics improved over prior year Q3 Adjusted EBITDA* Q3 Adjusted Diluted Earnings Q3 Net Income $ Millions; Percent of Sales Per Share* $ Millions 2017 2018 $ $283 $120 $0.55 $114 $267 6.0% 41.0% $96 $0.39 $89 4.3% 4.6% 2017 2018 2017 2018 GAAP Adjusted* YTD Adjusted EBITDA* YTD Ad
Slide 13: Stronger cash flow offset by higher cash taxes and additional pension contribution
Stronger cash flow offset by higher cash taxes and additional pension contribution; leverage continues to improve YTD Operating Cash Flow Q3 Net Debt* and Leverage Leverage ** $ Millions $ Millions Pension and cash income taxes are a ~$95M YoY increased use of cash $506 $3,638 $3,555 $444 $3,423 3.4
Slide 14: 2018 Guidance Updates
2018 Guidance Updates Guidance Case Growth ~(1%) Net Sales Growth 0-(1%) Adjusted Gross Profit ~2% Adjusted EBITDA Growth ~5% Cash CAPEX (ex Future Acquisitions) $250 - $260M Interest Expense $175 - $180M Depreciation & Amortization $330 - $340M Adj Effective Tax Rate ~25% Adjusted Diluted EPS $2.03
Slide 15: APPENDIX
APPENDIX: • Q3 FISCAL 2018 SUMMARY • NON-GAAP RECONCILIATIONS
Slide 16: Third Quarter Financial Performance
Third Quarter Financial Performance Reported Adjusted (1) (unaudited) (unaudited) 13-Weeks Ended 13-Weeks Ended September 29, September 30, September 29, September 30, ($ in millions, except per share data*) 2018 2017 Change 2018 2017 Change Case Growth (0.8)% Net Sales 6,153 6,204 (0.8)% Gross Prof
Slide 17: Year to Date Financial Performance
Year to Date Financial Performance Reported Adjusted (1) (unaudited) (unaudited) 39-Weeks Ended 39-Weeks Ended September 29, September 30, September 29, September 30, ($ in millions, except per share data*) 2018 2017 Change 2018 2017 Change Case Growth (1.3)% Net Sales 18,134 18,151 (0.1)% Gross Pro
Slide 18: 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 29, September 30, September 29, September 30, ($ in millions)* 2018 2017 2018 2017 Gross profit (GAAP) $1,108 $1,099 $3,214 $3,144 LIFO reserve change (1) (
Slide 19: Non-GAAP Reconciliation - Adjusted EBITDA and Adjusted Net Income
Non-GAAP Reconciliation - Adjusted EBITDA and Adjusted Net Income 13-Weeks Ended 39-Weeks Ended (unaudited) (unaudited) September 29, September 30, September 29, September 30, ($ in millions)* 2018 2017 2018 2017 Net income (GAAP) $114 $96 $307 $188 Interest expense—net 42 43 133 126 Income tax prov
Slide 20: 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 29, September 30, September 29, September 30, 2018 2017 2018 2017 Diluted EPS (GAAP) $0.52 $0.42 $1.41 $0.83 Restructuring charges (1) — — — 0.01 Share-based compensati
Slide 21: Non-GAAP Reconciliation - Net Debt and Net Leverage Ratios
Non-GAAP Reconciliation - Net Debt and Net Leverage Ratios (unaudited) September 29, December 30, September 30, ($ in millions, except ratios)* 2018 2017 2017 Total Debt (GAAP) $3,511 $3,757 $ 3,703 Cash, cash equivalents and restricted cash (88) (119) (148) Net Debt (Non-GAAP) $3,423 $3,638 $3,555
Slide 22: We help you make it
WE HELP YOU US. MAKE IT