Slide 1: Sysco 3Q FY20 Earnings Results
Sysco 3Q FY20 Earnings Results May 5
Slide 2: Forward Looking Statements
Forward Looking Statements Statements made in this presentation or in our earnings call for the third quarter of fiscal 2020 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: Current COVID-19 Business Environment
Current COVID-19 Business Environment • We are prioritizing the health and well-being of our associates • We have the financial ability to weather this storm and emerge stronger • We have identified 4 key areas of focus
Slide 5: Our Strategic Approach
Our Strategic Approach 1. Strengthen Overall Liquidity 2. Stabilize our Business 3. Create New Sources of Revenue 4. Ensure Sysco’s Success Post COVID-19
Slide 6: Strengthen Overall Liquidity
Strengthen Overall Liquidity More than $6 billion of Available Liquidity Financial Flexibility Competitive Opportunities
Slide 7: Stabilize our Business
Stabilize our Business Remove Costs from the System • Both temporary and structural changes Narrow Focus to Critical Projects Reduce Capital Investments Including more than $500 million of cost removal in 4Q alone
Slide 8: Create New Sources of Revenue
Create New Sources of Revenue Helping Our Restaurant Customers Pivot to a New Selling Model Delivering More Products and Solutions Supplying to Government Agencies and Retail Grocers Leveraging our Private Trucking Fleet
Slide 9: Ensure Sysco's Success Post COVID-19
Ensure Sysco’s Success Post COVID-19 Developing Joint Business Plans with Key Suppliers to Ensure Inventory Readiness for Recovery Increase Speed of our Business Transformation Accelerating Key Strategic Initiatives
Slide 10: Sysco Stands Ready As The Strongest Foodservice Distribution Provider
Sysco Stands Ready As THE Strongest Foodservice Distribution Provider in the Industry Strong Balance Sheet Ability to Invest in Service Levels and Product Availability Sysco is Positioned to Win in the Marketplace
Slide 11: Joel Grade, EVP & CFO
a. JOEL GRADE EVP & CFO
Slide 12: 3Q20 Total Sysco Results
3Q20 Total Sysco Results Total Sysco 3Q20 Sales $13.7B 6.5% 1 Gross Profit $2.6B 6.9% 1 Adj. Operating Income $377M 39.2% 1 $0.45 Adj. EPS 43.0% 1 See Non-GAAP reconciliations at the end of the presentation.
Slide 13: 3Q20 U.S. Foodservice Results
3Q20 U.S. Foodservice Results U.S. Foodservice 3Q20 Sales $9.6B 5.1% Gross Profit $1.9B 5.7% 1 Adj. Operating Expenses $1.3B 1.4% 1 Adj. Operating Income $637M 17.1% 1 See Non-GAAP reconciliations at the end of the presentation.
Slide 14: 3Q20 International Results
3Q20 International Results 3Q20 International 3Q20 3Q20 1 Constant Currency Sales $2.5B 9.0% $2.5B 7.8% Gross Profit1 $501M 11.4% $508M 10.0% 1 Adj. Operating Expenses $496M 2.2% $505M 0.5% Adj. Operating Income1 $5M 91.4% $4M 93.5% 1 See Non-GAAP reconciliations at the end of the presentation.
Slide 15: 3Q20 SYGMA Results
3Q20 SYGMA Results SYGMA 3Q20 Sales $1.4B 11.3% Gross Profit $119M 5.6% 1 Adj. Operating Expenses $108M 4.8% 1 Adj. Operating Income $10M 13.4% 1 See Non-GAAP reconciliations at the end of the presentation.
Slide 16: COVID-19 Business Update
COVID-19 Business Update Significant decline in last 2 weeks of March Sequential weekly improvement in April Swift cost reduction initiatives Expect collections to remain soft Liquidity to prepare for demand return
Slide 17: Sequential Weekly Improvement for Total Sysco Sales in April
Sequential Weekly Improvement for Total Sysco Sales in April 100 80 +15pps 60 Increase 40 20 - January February
Slide 18: Sysco Has a History of Strong Sales Growth
Sysco Has a History of Strong Sales Growth Total Foodservice Industry Total Sysco Sales Billions Billions $320 $70 0.9% 5.0% $310 10-Year CAGR $60 10-Year CAGR $300 $50 $290 $40 $280 $30 $270 $20 $260 $10 $250 $- 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2009 2010 2011 2012 2013 2014 20
Slide 19: Free Cash Flow
Free Cash Flow 39 Weeks 39 Weeks of FY19 of FY20 Cash from Ops $1.4B $1.1B $0.3B Free Cash Flow1 $1.0B $0.5B $0.5B While our cash flow is down materially year-over-year, it remains positive at the end of Q3 1 See Non-GAAP reconciliations at the end of the presentation.
Slide 20: We Have the Stability and Flexibility to Navigate This Business Environment
We Have the Stability and Flexibility to Navigate This Business Environment • We have confidence in our ability to achieve continued success and growth over the long term • We were in a strong financial position prior to the pandemic, and we will weather this storm to emerge an even stronger company
Slide 21: Sysco: At the heart of food and service
S/sco At the heart of food and service
Slide 22: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS
Slide 23: Impact of Certain Items
Impact of Certain Items Sysco’s results of operations for fiscal 2020 and fiscal 2019 were impacted by restructuring and transformational project costs consisting of: (1) expenses associated with our various transformation initiatives; (2) severance and facility closure charges; and (3) restructurin
Slide 24: Impact of Certain Items, 3Q20
Impact of Certain Items, 3Q20 Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items (Dollars in Thousands, Except for Share and Per Share Data) 13-Week 13-Week Period Ended Period Ended Change March 28, 2020 March 30, 2019 in Dollars % Change
Slide 25: Impact of Certain Items, 3Q20 (Segment)
Impact of Certain Items, 3Q20 (Segment) Sysco Corporation and its Consolidated Subsidiaries Segment Results Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Applicable Segments (Dollars in Thousands) 13-Week 13-Week Period Ended Period Ended Change March 28, 2020 March 30, 2019 in Doll
Slide 26: Impact of Certain Items, 3Q20 (Segment Continued)
Impact of Certain Items, 3Q20 (Segment Continued)OTHER Sales $ 238,941 $ 257,588 $ (18,647) -7.2% Gross Profit 56,000 63,878 (7,878) -12.3% Gross Margin 23.44% 24.80% -136 bps Operating expenses (GAAP) $ 75,051 $ 57,502 $ 17,549 30.5% Impact of goodwill impairment (11,660) - (11,660) NM Operating ex
Slide 27: Free Cash Flow
Free Cash Flow Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Free Cash Flow (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. Sy