Slide 1: Sysco 3Q FY22 Earnings Results
Sysco 3Q FY22 Earnings Results May 10, 2022
Slide 2: Forward Looking Statements
Forward Looking Statements Statements made in this presentation or in our earnings call for the third quarter of fiscal 2022 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 Re
Slide 3: Kevin Hourican, President & CEO
KEVIN HOURICAN President & CEO
Slide 4: Sysco's 3Q FY22 Results Show Continued Above-Market Growth
Sysco’s 3Q FY22 Results Show Continued Above-Market Growth Fiscal 3Q 2022 Highlights Sysco continues to gain market share, with U.S. Broadline case volume ~19% higher than the comparable period last year, and U.S. Foodservice delivering volume growth vs. 2019. Total sales in 3Q were 15% higher than
Slide 5: 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 Jul-21 Mar-21 Aug-20 Mar-22 Sep-20 Dec-20 Feb-21 Aug-21 Oct-2
Slide 6: 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) 12% 10% 8% 6% 4% 2% 0% Jun-20 Jun-21 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 at Home an
Slide 7: Sysco Continues to Outperform Total Foodservice Industry Resulting in Share Gains
Sysco Continues to Outperform Total Foodservice Industry Resulting in Share Gains Since the start of the pandemic, Sysco has performed better than the total foodservice market vs 2019 U.S. Operations Revenue Indexed to 2019 vs Technomic Market Estimated Indexed to 2019 100 index Q1'21 Q2'21 Q3'21 Q4
Slide 8: Sysco is Winning, Leading the Industry and Accelerating Growth
Sysco is Winning, Leading the Industry and Accelerating Growth • Sales growth of 15.3% above fiscal 2019 with continued share gains • Gross profit per case increased across all operating segments in the quarter • U.S. Foodservice volumes exceeding 2019 levels, total company volumes nearing 2019 leve
Slide 9: Aaron Alt, EVP & CFO
AARON ALT EVP & CFO
Slide 10: 3Q 2022 Consolidated Financial Results
3Q 2022 Consolidated Financial Results Net Sales Adj. EBITDA1 Adj. EPS1 Overview (billions) (millions) • Q3 sales grew 15.3% compared to 2019 levels $16.9 • Gross profit per case increased $777 $756 $14.7 across all operating segments for $0.79 the third consecutive quarter $11.8 $0.71 • Effective m
Slide 11: 3Q 2022 U.S. Foodservice Results
3Q 2022 U.S. Foodservice Results Net Sales Adj. Operating Overview (billions) Income1 (millions) • Sales up 43.6% vs. fiscal 2021 and up 18.8% vs. fiscal 2019 • Above-industry growth resulting in $12.0 $768 $749 meaningful share gains $10.1 • Local case volume within the U.S. Broadline operations, a
Slide 12: 3Q 2022 SYGMA Results
3Q 2022 SYGMA Results SYGMA Net Sales Adj. Operating Overview (billions) Income1 (millions) • SYGMA sales were up 13.5% vs. fiscal 2021 and up 16.8% vs. fiscal 2019 $13 $1.8 • Profitability improvement compared to $12 prior quarter $1.6 $1.5 • Expecting continued improvement in future quarters due t
Slide 13: 3Q 2022 International Results
3Q 2022 International Results Net Sales Adj. Operating Overview (billions) Income1 (millions) • International sales up 64.5% vs. fiscal 2021 and up 2.8% vs. fiscal 2019 $2.8 $2.8 • Sales trends accelerated as Omicron $58 subsided and government-imposed $35 restrictions on our customers eased • Forei
Slide 14: International Segment Recorded a Significant Year-over-Year Improvement in Profitability
International Segment Recorded a Significant Year-over-Year Improvement in Profitability Adj. Operating Income1 Overview (millions) • Strategic actions have driven profitability improvements and resulted in three $136 consecutive quarters of positive operating income • Results are despite Omicron, g
Slide 15: Snap-back, Transformation Investments, and Productivity Costs are Easing
Snap-back, Transformation Investments, and Productivity Costs are Easing and We Expect Further Improvement Snap-back, Transformation, and Productivity Costs by Quarter $160 Overview Millions $140 $ 40M • Total investments in snap-back operating $120 costs, transformation, and productivity/OT initiat
Slide 16: Year-to-Date 2022 Cash Flow
Year-to-Date 2022 Cash Flow Cash from Operations Free Cash Flow1 Overview (millions) (millions) • Cash from operations was $745.9 million. The company made purposeful investments in working capital to compete in the $1,480 $1,248 industry snap back, including making $1,365 significant investments in
Slide 17: Capital Structure and Allocation
Capital Structure and Allocation Investment Priority Progress • Continued capital investments over the next three fiscal years in our technology, fleet and buildings 1 Invest for Growth • Strong pipeline of tuck-in acquisitions focused on Broadline, Specialty and Cuisine-type opportunities as well a
Slide 18: Sysco Has Consistently Increased Returns to Shareholders
Sysco Has Consistently Increased Returns to Shareholders Cumulative Cash Returned to Shareholders $ 13.2B $12.0B $ 11.1B $ 9.4B $ 7.6B $ 5.9B $ 3.3B $0.7B FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 (Q3 YTD) Dividends Shares Repurchased Over $13 Billion of Cash Returned to Shareholders S
Slide 19: Kevin Hourican, President & CEO
KEVIN HOURICAN President & CEO
Slide 20: Current Share Gains Lead to Long-term Confidence
Current Share Gains Lead to Long-term Confidence Strong top-line performance with 18.8% volume growth in U.S. Broadline Exceeding 1.2x market share growth Lowered operating expenses Reduced snap-back costs by more than 50% Strong profit performance Raised FY 2022 Adj. EPS guidance 20
Slide 21: 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 22: Sysco: At the heart of food and service
S/sco At the heart of food and service
Slide 23: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS
Slide 24: Impact of Certain Items
Impact of Certain Items Our 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 free cash flow, any non-GAAP financial measures will be denot
Slide 25: Impact of Certain Items, 3Q22 vs. 3Q21
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items, 3Q22 vs. 3Q21 (Dollars in Thousands, Except for Share and Per Share Data) 13-Week 13-Week Period Ended Period Ended Change Apr. 2, 2022 Mar. 27, 2021 in Dollars % Change Sales (GAAP) $ 16
Slide 26: Impact of Certain Items, 3Q22 vs. 3Q21 (continued)
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items, 3Q22 vs. 3Q21 (Dollars in Thousands, Except for Share and Per Share Data) continued Other (income) expense (GAAP) $ (13,777) $ (12,708) $ (1,069) -8.4% Impact of loss on sale of a busines
Slide 27: 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) 39-Week 39-Week Period Ended Period Ended Change Apr. 2, 2022 0 Mar. 27, 2021 in Dollars % Change Sales (GAAP
Slide 28: 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 Interest expense (GAAP) $ 495,131 $ 438,988 $ 56,143 12.8% Impact of loss on extinguishment of debt
Slide 29: Impact of Certain Items, 3Q22 vs. 3Q19
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items, 3Q22 vs. 3Q19 (Dollars in Thousands, Except for Share and Per Share Data) 13-Week 13-Week Period Ended Period Ended Change Apr. 2, 2022 Mar. 30, 2019 in Dollars % Change Sales (GAAP) $ 16
Slide 30: Impact of Certain Items, 3Q22 vs. 3Q19 (continued)
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items, 3Q22 vs. 3Q19 (Dollars in Thousands, Except for Share and Per Share Data) continued Diluted earnings per share (GAAP) $ 0.59 $ 0.85 $ (0.26) -30.6% Impact of inventory valuation adjustmen
Slide 31: 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 32: Impact of Certain Items on EBITDA (3Q22 vs. 3Q21)
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Earnings Before Interest, Taxes, Depreciation and Amortization (3Q22 vs. 3Q21) (In Thousands) 13-Week 13-Week Period Ended Period Ended Change Apr. 2, 2022 Mar. 27, 2021 in Dollars %/bp
Slide 33: Impact of Certain Items on EBITDA (3Q22 vs. 3Q19)
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Earnings Before Interest, Taxes, Depreciation and Amortization (3Q22 vs. 3Q19) (In Thousands) 13-Week 13-Week Period Ended Period Ended Change Apr. 2, 2022 Mar. 30, 2019 in Dollars %/bp
Slide 34: Segment Results, 3Q22 vs. 3Q21
Sysco Corporation and its Consolidated Subsidiaries Segment Results Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Applicable Segments, 3Q22 vs. 3Q21 (Dollars in Thousands) 13-Week Period Ended 13-Week Period Ended Change Apr. 2, 2022 Mar. 27, 2021 in Dollars %/bps Change U.S. FOODSE
Slide 35: Segment Results, 3Q22 vs. 3Q21 (continued)
Sysco Corporation and its Consolidated Subsidiaries Segment Results Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Applicable Segments, 3Q22 vs. 3Q21 (Dollars in Thousands) continued OTHER Sales $ 267,050 $ 160,527 $ 106,523 66.4% Gross Profit 55,397 37,911 17,486 46.1% Gross Margin
Slide 36: 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) 39-Week Period Ended 39-Week Period Ended Change Apr. 2, 2022 Mar. 27, 2021 in Dollars %/bps Change U.S. FOODSE
Slide 37: 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) $ 427,168 $ 358,361 $ 68,807 19.2% Impact of restructuring and transformati
Slide 38: Segment Results, 3Q22 vs. 3Q19
Sysco Corporation and its Consolidated Subsidiaries Segment Results Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Applicable Segments, 3Q22 vs. 3Q19 (Dollars in Thousands) 13-Week Period Ended 13-Week Period Ended Change Apr. 2, 2022 Mar. 30, 2019 in Dollars %/bps Change U.S. FOODSE
Slide 39: Segment Results, 3Q22 vs. 3Q19 (continued)
Sysco Corporation and its Consolidated Subsidiaries Segment Results Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Applicable Segments, 3Q22 vs. 3Q19 (Dollars in Thousands) continued OTHER Sales $ 267,050 $ 257,588 $ 9,462 3.7% Gross Profit 55,397 63,878 (8,481) -13.3% Operating expe
Slide 40: 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 41: 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