Performance Food Group Company · NYSE:PFGC
Performance Food — Jefferies Global Consumer Conference 2016
29 slides from Performance Food's conference presentation, Jun 22, 2016
Slide 1: Jefferies Global Consumer Conference
Jefferies Global Consumer Conference June 22, 2016
Slide 2: Forward-Looking Statements
Forward-Looking Statements This document has been prepared by Performance Food Group Company (the “Company,” “we,” “us” and “our”) solely for informational purposes. This presentation includes, and our responses to various questions may include, certain forward-looking statements, estimates and proj
Slide 3: PFG Overview
PFG Overview • Third largest foodservice TTM Net Sales = $15.7BN distributor in the U.S. PFG Vistar Customized 16% 24% • A leading distributor to a wide variety of channels Performance Foodservice 60% • Operates three segments TTM Adj. EBITDA = $354MM ̶ Performance Foodservice PFG Customized Vistar
Slide 4: Growth Outpacing a Growing Industry
Growth Outpacing a Growing Industry PFG Net Sales CAGR = 8.0% $15.3 $15.7 $13.7 $12.8 Food Away From Home $11.5 $10.1 $10.6 CAGR = 4.5% $640 $331 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 TTM PFG Adjusted EBITDA CAGR = 11.1% $354 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 $329 $
Slide 5: U.S. Foodservice Industry Structure
U.S. Foodservice Industry Structure 2014 Market Size = ~ $256BN SYY USFD PFGC Top 3 $41.9 $23.0 $14.5 $79.4 Billion 4 - 10 $22.7 BN Regional Broadliners 11 - 15,000+ $154 BN All Other Note: Technomic and company filings for Sysco, PFG, and US Foods. U.S. Sales only, where available Sysco 2014 sales
Slide 6: Top 3 U.S. Foodservice Distributors
Top 3 U.S. Foodservice Distributors Broadline Specialty Systems • Street Restaurants • Candy, Snacks, and • National Casual Dining • QSR/ Fast Casual Beverages Chains PFG Chains • Regional Casual Dining Chains • Street Restaurants • Meat • QSR/ Fast Casual • National Casual Dining • Produce Chains C
Slide 7: PFG
PFG FY2015 Net Sales = $15.3BN • PFG’s margins reflect the mix of customers we serve ̶ In the industry, street customers have PFG Vistar well above average margins while chain Customized 16% restaurants are below 24% ̶ Performance Foodservice is a mix of Performance 26% Foodservice Street business,
Slide 8: Top 3 Distributors' Growth Rates
Top 3 Distributors’ Growth Rates Net Sales 170% 160% 150% 151% 140% 130% Sysco127% 120% US Foods 123% 110% 100% 90% CY2010 CY2011 CY2012 CY2013 CY2014 CY 2015 Adjusted EBITDA 170% 164% 160% 150% 140% 130% 120% US Foods 119% 110% 100% Sysco 103% 90% CY2010 CY2011 CY2012 CY2013 CY2014 CY 2015 8 Notes:
Slide 9: Performance Foodservice Growth Strategy
Performance Foodservice Growth Strategy Net Sales CAGR = 9.4% 1• Customers First $9.1 $9.4 $8.1 $7.5 $6.7 $6.1 $5.6 2• Improve Mix through Street and Brands FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 TTM 3• PFG’s Winning Together EBITDA Program CAGR = 12.6% $289 $254 $208 4• Increase geographic scope
Slide 10: Customers First
1 Customers First • Customers First is about building a company culture and organization around the customer experience ̶ Food is increasingly local, and especially so for the street business ̶ Street customers require variety to compete with each other ̶ The street sales person is the focal point f
Slide 11: Customers First
1 Customers First • The street sales force is supported by a strong, cross-functional business team, since locally-based decision making is essential to remaining nimble at the point of transaction ̶ Product assortment in the local warehouse is determined by the local Operating Company ̶ Local OpCos
Slide 12: Improve Mix through Street and Brands
2 Improve Mix through Street and Brands 2015 Independent Restaurant • Focus on selling to our most profitable customers, Market Size = ~ $64BN independent or “street” restaurants, and selling our most PFS profitable brands: Performance ~6% brands USFD ~ 12% • Real organic growth to street All Other
Slide 13: Improve Mix through Street and Brands
2 Improve Mix through Street and Brands Street Mix of Broadline Sales Company Brand Mix of Street 44.0% 43.1% 43.4% 42.5% 41.3% 40.5% 39.1% 39.4% 38.7% 38.1% 37.9% 36.9% 37.2% 37.2% FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 YTD FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 YTD 13 Note: YTD defined as 9
Slide 14: Performance Brands: a $2BN+ Business
Performance Brands: a $2BN+ Business • Proprietary brands are a key competitive advantage in the industry • Only the largest players in the foodservice industry have the scale to carry a broad line of differentiated brands • Chefs embrace PFG’s portfolio of Performance Brand SKUs and recognize the q
Slide 15: PFG's Winning Together Program
3 PFG’s Winning Together Program • Spans PFG, but largest impact is in Winning Together Winning Together Performance Through Procurement Through Operations Foodservice • Structured supplier • Best practices to drive • Continuous negotiations continuous improvement improvement program to offset • Inb
Slide 16: Complement Organic with Acquisitions
4 Complement Organic with Acquisitions Recent Acquisitions Acquisition Priorities • Operating Companies • Stand-alone Broadline OpCos ̶ IFH: 2 OpCos in the ̶ Adjacent geographies Carolinas ̶ Base of street business ̶ Fox River: Chicago area ̶ Strong management team ̶ Ledyard: Northern California • F
Slide 17: Vistar Overview
Vistar Overview Segment Highlights Distribution Centers Leading distributor of candy, snacks, and beverages and other single serve/ impulse items Channels served: • Vending Distributors • Office Coffee Service Distributors • Theaters • Retail Impulse • Hospitality • College Bookstores • Concessions
Slide 18: Vistar Growth Strategy
Vistar Growth Strategy Net Sales CAGR = 7.7% • Utilize strengths to grow both $2.3 $2.4 $2.6 $2.1 core and emerging channels $1.9 $1.7 $1.7 • Improve mix • Continually improve cost FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 TTM structure, especially through Winning Together EBITDA CAGR = 21.4% $110 $
Slide 19: Growth Drivers
Growth Drivers Vend OCS Theater Retail • Good to Go • Continue to • Meet • Dollar stores Line develop customers’ • Develop more • Micro- “better evolving impulse Core markets coffee” wave product locations Channels • Recovery in in office assortment • Seasonal U.S. non-farm coffee needs SKUs employm
Slide 20: PFG Customized Overview
PFG Customized Overview • Systems distributor: serve up to 100% of customers’ SKU needs through least cost inbound/ outbound network • National network to serve casual and family dining restaurant chains that was developed around customers’ footprints • Long standing customer relationships • Growth
Slide 21: PFG Customized Growth Strategy
PFG Customized Growth Strategy Net Sales CAGR = 5.5% • Grow share of casual dining $3.2 $3.3 $3.8 $3.8 segment through new $2.8 $2.8 $2.9 customer wins • Broaden scope of business to add fast casual chains FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 TTM EBITDA • Continually improve cost $41 $43 CAGR =
Slide 22: Longstanding Customer Relationships
Longstanding Customer Relationships # 2 Family Style # 1 Steak # 2 Italian # 4 Steak # 6 Varied Menu # 9 FSR # 6 FSR # 21 FSR # 22 FSR # 12 FSR # 2 Seafood # 8 Steak # 30 FSR # 48 FSR 40 Years 22 Years 16 Years 14 Years # 4 Varied Menu # 11 Varied Menu # 3 Seafood # 2 Varied Menu # 2 Hamburger Not R
Slide 23: New Customer Win Coming in August 2016
New Customer Win Coming in August 2016 • PFG has entered into an agreement to distribute to Red Lobster’s 670+ U.S. restaurants • Winning Red Lobster as a customer solidifies PFG Customized’s position as the premier distributor to national casual dining chains • Red Lobster’s network of U.S. restaur
Slide 24: YTD FY2016 Results
YTD FY2016 Results • Case volume growth of 4.5% • Net sales increased 4.0% to $11.7 billion • Gross profit increased 6.7% to $1.4 billion • Operating profit increased 26.7% to $135.4 million • Net income increased 75.3% to $39.1 million • Adj. EBITDA increased 11.4% to $251.9 million • Adj. EBITDA m
Slide 25: Fiscal 2016 Outlook
Fiscal 2016 Outlook • PFG reaffirms Fiscal 2016 Adjusted EBITDA growth versus PY outlook: ̶ 53 vs. 52 weeks: 10% – 12% ̶ 52 vs. 52 weeks: 8% – 10% • As a reminder, the 53rd week is worth approximately 2% points of growth for the year and falls in the 4th quarter 25
Slide 26: What we really do is deliver.
What we really do is deliver. 26
Slide 27: Historical EBITDA Reconciliation
Historical EBITDA Reconciliation ($ in millio ns) FYE June FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 LTM Mar 2016 Net Income $0.9 $13.7 $21.0 $8.4 $15.5 $56.5 $73.3 Interest expense, net 84.7 78.9 76.3 93.9 86.1 85.7 87.0 Income tax expense 8.1 10.9 12.9 11.1 14.7 40.1 50.0 Depreciation 44.4 43.2 46
Slide 28: Historical EBITDA Reconciliation (continued)
Historical EBITDA Reconciliation (continued) ($ in m illio ns ) FYE June YTD 2015 YTD 2016 LTM Mar 2016 Net Income $22.3 $39.1 $73.3 (+) Interest Expense 64.6 65.9 87.0 (+) Income Tax Expense 16.8 26.7 50.0 (+) Depreciation 57.1 58.3 77.5 (+) Amortization of intangible assets 34.6 27.9 38.3 EBITDA $
Slide 29: Non-GAAP Financial Measures
Non-GAAP Financial Measures PERFORMANCE FOOD GROUP COMPANY Non-GAAP Reconciliation (Unaudited) 29 29
Performance Food Group Company — Jefferies Global Consumer Conference 2016 on 6ix