Slide 1: Sysco Q4 and FY23 Earnings Results
August 1, 2023 Sysco Q4 and FY23 Earnings Results
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 under the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the views of manage
Slide 3: Kevin Hourican, President & Chief Executive Officer
KEVIN HOURICAN President & Chief Executive Officer
Slide 4: Food Supply Chain Food Sales & Marketing
Food Supply Chain Food Sales & Marketing
Slide 5: Q4: Volume Growth, Operating Expense Leverage and Solid Profitability
Q4: Volume Growth, Operating Expense Leverage and Solid Profitability Fiscal Q4 2023 Highlights +4.1% +16.5% 2.5x $2.1 billion Revenue growth compared to Adjusted EPS growth Net Debt to Adjusted EBITDA free cash flow +79% fiscal Q4 2022 compared to fiscal Q4 2022 Ratio1 compared to fiscal 2022 +2.3%
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 Growing Share FY2023 Total Sysco Sales 8% Travel and Leisure 15% Other 7% Healthcare 62% Restaurants 8% Education and Government $76.3B ~725K In Annual Sales Customer Locations Operations IFG ~7,500 72K+ Colleagues Across Sales Consultant
Slide 7: USFS: Sequential Improvement with Adjusted Operating Expense and Strong Q4 Exit Rate
USFS: Sequential Improvement with Adjusted Operating Expense and Strong Q4 Exit Rate Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 YoY YoY YoY Overview YoY (1500 bps) (1180 bps) (430 bps) +180 bps 22.3% • Sequential improvement in 17.0% operating expenses throughout the year. 10.4% • Strong Q4 exit rate, with U.S
Slide 8: Our Recipe for Growth
Our Recipe for Growth 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 Delivering success for our Together we define the future of Share Food and Care for One customers through industry-leadin
Slide 9: Recipe for Growth is Delivering Important Wins
Recipe for Growth is Delivering Important Wins • Now available in Spanish with • Over 12K+ customers who are over 100 new feature • In >400 neighborhoods now in our loyalty program enhancements across five countries • Invitation-only loyalty club with • Enhancements drive increase • Program deliveri
Slide 10: Market Leader in the Highly Fragmented and Growing Foodservice Distribution Industry
Market Leader in the Highly Fragmented and Growing Foodservice Distribution Industry Total Addressable Market Since 2000 $353 B 17% $300 B $268 B $224 B $231 B $197 B $161 B $353 B 2000 2005 2010 2015 2020 2021 2022 10 Technomic U.S. Foodservice Industry Wallchart for Calendar Year, updated May 2023
Slide 11: Food Away From Home Continues to Gain Share
30% 35% 40% 45% 50% 55% 60% 65% 70% Jun-93 Jun-94 Jun-95 Jun-96 Jun-97 Share Jun-98 Jun-99 Jun-00 Jun-01 Jun-02 Jun-03 Grocery Stores Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 The United States Census Bureau Advance Monthly Sales for Retail and Food Services Jun-13 Jun-14 Jun-15
Slide 12: Sysco is Winning in the Marketplace
Sysco is Winning in the Marketplace Sysco has Outperformed the Total Foodservice Market US Foodservice Operations 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 Q3'FY22 Q4'FY22 Q1'FY23 Q2'FY23 Q3'FY23 Q4'FY23 Sysco US O
Slide 13: Kenny Cheung, Chief Financial Officer
Kenny Cheung Chief Financial Officer
Slide 14: Q4 2023 Consolidated Financial Results
Q4 2023 Consolidated Financial Results Net Sales Adj. EBITDA1 Adj. EPS1 Overview (billions) (billions) $1.34 • Sales increased 4.1% to $19.7 billion versus the prior year $1.15 • USFS +2.5% $19.7 $1.2 $19.0 • International +12.2% $1.0 • SYGMA +1.4% • Adjusted gross profit grew 5.7% to $3.7 billion a
Slide 15: Q4 2023 U.S. Foodservice Results
Q4 2023 U.S. Foodservice Results Net Sales Adj. Operating Overview (billions) Income1 • Sales growth of 2.5% to $13.7 (billions) billion versus the prior year • Total case volume grew 2.3% and $13.7 $1.1 local case volume grew 0.8% $13.4 $1.0 • Gross profit increased 4.1% to $2.7 billion. • Gross ma
Slide 16: Q4 2023 International Results
Q4 2023 International Results Net Sales Adj. Operating Overview (billions) Income1 • Sales increased 12.2%, or 13.6% on a (millions) constant currency basis1 $145 • Gross profit increased 11.1% to $724 million, or 11.9% to $729 million on a $3.6 constant currency basis1 $3.3 • Gross margin decreased
Slide 17: Q4 2023 SYGMA Results
Q4 2023 SYGMA Results SYGMA Net Sales Operating Income Overview (billions) (millions) • SYGMA sales grew 1.4% to $2.0 billion • Gross profit increased 4.4% to $161 $19 million $2.0 $2.0 • Gross margin of 8.0% increased 23 bps • Operating expenses declined 7.1% $1 Q4 2022 Q4 2023 Q4 2022 Q4 2023 1 17
Slide 18: FY 2023 Consolidated Financial Results
FY 2023 Consolidated Financial Results Net Sales Adj. EBITDA1 Adj. EPS1 Overview (billions) (billions) $4.01 • Sales increased 11.2% to $76.3 billion versus the prior year $76.3 $3.25 • Adjusted gross profit grew 12.6% to $68.6 $3.8 $14.0 billion and adjusted gross margin improved 22 bps to 18.3% $3
Slide 19: FY 2023 U.S. Foodservice Results
FY 2023 U.S. Foodservice Results Net Sales Adj. Operating Overview (billions) Income1 • Sales growth of +10.6% to $53.7 billion (billions) • Total case volume grew 5.2% and local $3.6 case volume grew 3.3% $53.7 $3.2 • Gross profit increased 12.6% to $10.4 $48.5 billion • Gross margin increased 35 b
Slide 20: FY 2023 International Results
FY 2023 International Results Net Sales Adj. Operating Overview (billions) Income1 • Sales increased 15.0%, or 22.6% on a (millions) constant currency basis1 • Gross profit increased 11.1% to $2.6 $398 billion, or 18.8% to $2.8 billion on a $13.6 constant currency basis1 $11.8 • Gross margin decreas
Slide 21: FY 2023 SYGMA Results
FY 2023 SYGMA Results SYGMA Net Sales Operating Income Overview (billions) (millions) • SYGMA sales grew 8.2% to $7.8 billion $57 • Gross profit increased 9.5% to $7.8 $631 million $7.2 • Gross margin increased 10 basis points to 8.1% • Operating expenses declined 0.8% -$3 FY 2022 FY 2023 FY 2022 FY
Slide 22: Historical Q4 Adjusted Operating Income
Historical Q4 Adjusted Operating Income1 +25.0% $1.0 B Increase in Adjusted Operating $875 M $818 M Income1 $771 M $667 M $628 M $605 M $509 M -$34 M Q4 2015 Q4 2016 Q4 2017 Q4 2018 Q4 2019 Q4 2020 Q4 2021 Q4 2022 Q4 2023 2 22 2See Non-GAAP reconciliations at the end of the presentation. 1
Slide 23: Historical FY Adjusted Operating Income
Historical FY Adjusted Operating Income1 +17.3% $3.2 B Increase in Adjusted Operating $2.7 B Income1 $2.6 B $2.5 B $2.4 B $2.0 B $1.8 B $1.7 B $1.5 B FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 2 23 3See Non-GAAP reconciliations at the end of the presentation. 1
Slide 24: FY 2023 Cash Flow
FY 2023 Cash Flow Cash from Operations Free Cash Flow1 Overview (millions) (millions) • Cash flow from operations was $2.9 billion, a 60% increase $2,116 • Capital expenditures, net of proceeds from sales of plant and $2,868 equipment, were $751 million, with continued advancement in our Recipe for
Slide 25: Capital Structure and Allocation
Capital Structure and Allocation Investment Priority Progress • Capital investments in our technology, fleet and buildings 1 • Announced the acquisition of BIX Produce within specialty FreshPoint business Invest for Growth • Strong pipeline of tuck-in acquisitions focused on Broadline, Specialty and
Slide 26: 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 Dividends Shares Repurchased Over $15 Billion of Cash Returned to Shareh
Slide 27: Kevin Hourican, President & CEO
KEVIN HOURICAN President & CEO
Slide 28: Sysco is Winning, Leading the Industry
Sysco is Winning, Leading the Industry • Record adj. operating income and free cash flow in FY 2023 • Strong track record of sales growth, growing annual sales in 51 years of our 54-year history • Committed to operating expense leverage and cost controls; expect incremental $100 million in cost out
Slide 29: Investment Thesis: Sysco is Leading the Industry and Accelerating Growth
Investment Thesis Sysco is Leading the Industry and Accelerating Growth Healthy Balance Sheet: Sustainability: Tangible Expect to grow meaningfully only Investment-Grade Science-Based faster than the total market Food Service Distributor Climate & DEI Goals LT financial guidance Compelling sharehold
Slide 30: Sysco: At the heart of food and service
S/sco At the heart of food and service
Slide 31: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS [ the heart of food and service
Slide 32: Impact of Certain Items
Impact of Certain Items The 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 33: Non-GAAP Reconciliation: Impact of Certain Items, Q4 FY23 vs. Q4 FY22
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items, Q4 FY23 vs. Q4 FY22 (Dollars in Thousands, Except for Share and Per Share Data) 13-Week 13-Week Period Ended Period Ended Change Jul. 1, 2023 Jul. 2, 2022 in Dollars %/bps Change Sales (G
Slide 34: Non-GAAP Reconciliation: Impact of Certain Items, Q4 FY23 (continued)
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items, Q4 FY23 vs. Q4 FY22 (Dollars in Thousands, Except for Share and Per Share Data) continued Operating margin (GAAP) 4.91% 4.04% 87 bps Operating margin adjusted for Certain Items (Non-GAAP)
Slide 35: Non-GAAP Reconciliation: Impact of Certain Items, FY23 vs. FY22
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items, FY23 vs. FY22 (Dollars in Thousands, Except for Share and Per Share Data) 52-Week 52-Week Period Ended Period Ended Change Jul. 1, 2023 Jul. 2, 2022 in Dollars %/bps Change Sales (GAAP) $
Slide 36: Non-GAAP Reconciliation: Impact of Certain Items, FY23 (continued)
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items, FY23 vs. FY22 (Dollars in Thousands, Except for Share and Per Share Data) continued Other expense (income) (GAAP) $ 226,442 $ (23,916) $ 250,358 NM Impact of other non-routine gains and l
Slide 37: Segment Results Non-GAAP Reconciliation, Q4 FY23 vs. Q4 FY22
Sysco Corporation and its Consolidated Subsidiaries Segment Results Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Applicable Segments, Q4 FY23 vs. Q4 FY22 (Dollars in Thousands) 13-Week 13-Week Period Ended Period Ended Change Jul. 1, 2023 Jul. 2, 2022 in Dollars %/bps Change U.S. F
Slide 38: Segment Results Non-GAAP Reconciliation, Q4 FY23 (continued)
Sysco Corporation and its Consolidated Subsidiaries Segment Results Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Applicable Segments, Q4 FY23 vs. Q4 FY22 (Dollars in Thousands) continued OTHER Sales $ 328,974 $ 316,505 $ 12,469 3.9% Gross Profit $ 88,715 $ 78,898 $ 9,817 12.4% Gros
Slide 39: Segment Results Non-GAAP Reconciliation, FY23 vs. FY22
Sysco Corporation and its Consolidated Subsidiaries Segment Results Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Applicable Segments, FY23 vs. FY22 (Dollars in Thousands) 52-Week 52-Week Period Ended Period Ended Change Jul. 1, 2023 Jul. 2, 2022 in Dollars %/bps Change U.S. FOODSER
Slide 40: Segment Results Non-GAAP Reconciliation, FY23 (continued)
Sysco Corporation and its Consolidated Subsidiaries Segment Results Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Applicable Segments, FY23 vs. FY22 (Dollars in Thousands) continued OTHER Sales (GAAP) $ 1,239,060 $ 1,082,311 $ 156,749 14.5% Gross Profit (GAAP) 326,315 248,125 78,190
Slide 41: Non-GAAP Reconciliation: Impact of Certain Items, Multi-Year Trend
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items (In Thousands) As noted in a previous reconciliation within this presentation, our discussion of our results includes certain non-GAAP financial measures, defined as Certain Items. The mul
Slide 42: Non-GAAP Reconciliation: Impact of Certain Items, Multi-Year Trend (continued)
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items (In Thousands) As noted in a previous reconciliation within this presentation, our discussion of our results includes certain non-GAAP financial measures, defined as Certain Items. The mul
Slide 43: Non-GAAP Reconciliation: Free Cash Flow, YTD23 vs. YTD22
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Free Cash Flow, YTD23 vs. YTD22 (In Thousands) Free cash flow represents net cash provided from operating activities less purchases of plant and equipment and includes proceeds from sales of plant and equipment.
Slide 44: Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) EBITDA represents net earnings (loss) plus (i) interest expense, (ii) income tax expense and benefit, (iii) depreciation and (iv) amortization. The net earnings (loss) component of our EBITDA calculation is impacted by Certain I
Slide 45: Impact of Certain Items on EBITDA (Q4 FY23 vs. Q4 FY22)
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Earnings Before Interest, Taxes, Depreciation and Amortization (Q4 FY23 vs. Q4 FY22) (In Thousands) 13-Week 13-Week Period Ended Period Ended Change Jul. 1, 2023 Jul. 2, 2022 in Dollars
Slide 46: Impact of Certain Items on EBITDA (FY23 vs. FY22)
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Earnings Before Interest, Taxes, Depreciation and Amortization (FY23 vs. FY22) (In Thousands) 52-Week 52-Week Period Ended Period Ended Change Jul. 1, 2023 Jul. 2, 2022 in Dollars %/bps
Slide 47: 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
Slide 48: Non-GAAP Reconciliation: Net Debt to Adjusted EBITDA
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Net Debt to Adjusted EBIDTA (In Thousands) Net Debt to Adjusted EBITDA is a non-GAAP financial measure frequently used by investors and credit rating agencies. Our Net Debt to Adjusted EBITDA ratio is calculated
Slide 49: 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 2024. 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