Sysco Corporation · NYSE:SYY
Sysco — CAGNY 2019
32 slides from Sysco's conference presentation, Feb 19, 2019
Slide 1: CAGNY 2019
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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 within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the
Slide 3: Tom Bené, Chairman, President & CEO
TOM BENÉ CHAIRMAN, PRESIDENT & CEO 3 2/19/2019 CAGNY
Slide 4: Our Vision
Our VISION To be our customers’ most valued and trusted business partner 4 2/19/2019 CAGNY
Slide 5: Sysco is the industry leader
Sysco is the industry LEADER Platform for Strong Continually long-term near-term return value to growth performance shareholders 5 2/19/2019 CAGNY
Slide 6: Platform for long-term growth
Platform for long-term growth Leveraging Size & Scale International M&A Corporate Social Responsibility 6 2/19/2019 CAGNY
Slide 7: Our four strategic priorities will accelerate our current growth
Our four strategic priorities will accelerate our current growth and position us well for the future 7 2/19/2019 CAGNY
Slide 8: Our size and scale is unmatched
Our size and scale is unmatched FY18 Sales by Customer Type FY18 Sales by Product Type Travel, Leisure & Retail 8% Other 4% Beverage 3% Education & Government 8% Seafood 6% Paper 7% Healthcare 9% Produce 8% Dairy 10% Other 13% Poultry 10% Frozen 15% Restaurants 62% Canned/Dry 17% Meats 20% We contin
Slide 9: The U.S. Market is the foundation of our business
The U.S. Market is the foundation of our business, with meaningful growth potential Broad Assortment Fresh Fresh Meat, Serves diverse customer base of Produce Poultry, Seafood local and contract customers Efficient Model Deep knowledge | Specialized Solutions | Operational Flexibility 9 2/19/2019 CA
Slide 10: Advancing our sales capabilities to enable consultative selling
Sysco is advancing our sales capabilities to enable consultative selling for our local customers ▪ Building Capabilities ▪ Learning and ▪ Highly Effective Sales ▪ Consistent Investment Development Programs Organization in Customer-Facing Technology Prioritized customer-facing activities 10 2/19/2019
Slide 11: Sysco Brand portfolio delivers significant overall value
Sysco Brand portfolio delivers significant overall value in quality, variety and price to our customers … …including four $1B brands …including three $500M brands 11 2/19/2019 CAGNY
Slide 12: Sysco Simply
Sysco Simply, a platform designed to enable our customers to accommodate the growing consumer demand for varied dietary and lifestyle choices. 12 2/19/2019 CAGNY
Slide 13: International represents growth opportunities
International represents growth opportunities in existing markets and targeted geographic expansion ~ $25B ~ $100B ~ $250B CANADA LATIN AMERICA EUROPE International Americas International Europe 13 2/19/2019 CAGNY
Slide 14: Sysco France recently launched
Sysco France recently launched 14 2/19/2019 CAGNY
Slide 15: M&A is a key lever of our growth strategy
M&A is a key lever of our growth strategy Expansion of Acquired Traditional Acquired first Canadian Acquired Supplies on Acquired Fully Acquired Foodservice Acquired CFS produce company Operations European Imports the Fly Doerle Mayca 1970-1985 1988 2000 2002 2012 2016 2018 2018 1985 1999 2001 2009
Slide 16: Industry leading corporate social responsibility initiatives
Sysco has industry leading corporate social responsibility initiatives, including our 2025 responsibility goals 16 2/19/2019 CAGNY
Slide 17: Delivering a Better Tomorrow
Delivering a Better Tomorrow Donate a total of 200 million meals in our local communities Source 20% of electricity from renewable sources 17 2/19/2019 CAGNY
Slide 18: Joel Grade, EVP & Chief Financial Officer
JOEL GRADE EXECUTIVE VICE PRESIDENT & CHIEF FINANCIAL OFFICER 18 2/19/2019 CAGNY
Slide 19: Strong near-term performance
Strong near-term performance Three-year Plan Working Capital Free Cash Flow 19 2/19/2019 CAGNY
Slide 20: Our three-year plan will deliver targeted financial results
Our three-year plan will deliver targeted financial results 3.5% 4.0% CAPEX / Working 9.0% CAPEX / Working $1.8B CAPEX / Working Local Case Capital Gross Profit Adj.Capital Operating Capital FY 20 Growth1 Growth1,2 Income Growth1,2 Net Earnings2 1 FY18-FY20 3 year CAGR 2 See Non-GAAP reconciliations
Slide 21: Confident in our ability to achieve our financial targets
We remain confident in our ability to achieve our financial targets Gross operating income benefit As of Dec. 2017 Updated Grow gross profit 55-65% 55-65% Leverage supply chain costs 10-15% 5-10% Reduce administrative costs 20-25% 25-30% Net adjusted Operating income improvement $650 - $700M1 $650 -
Slide 22: Improved working capital by 6 days since FY2015
Sysco has improved working capital by 6 days since FY2015 22 2/19/2019 CAGNY
Slide 23: A history of strong free cash flow
Sysco has a history of strong free cash flow Annual Cash Flow1 $2,500 $2,000 $1,500 $1,000 $500 $- FY14 FY15 FY16 FY17 FY18 Net cash provided by operating activities (GAAP) Free Cash Flow (Non-GAAP) Slight decline in free cash flow driven by pension-plan contribution 1 See Non-GAAP reconciliations a
Slide 24: Continually return value to shareholders
Continually return value to shareholders Total Shareholder Return Capital Allocation 24 2/19/2019 CAGNY
Slide 25: Priority on returning value to shareholders
Sysco places a priority on returning value to shareholders 65% $1.7B CAPEX / Working 15% CAPEX / Working 50 CAPEX / Working 3-Year Capital Total Capital Capital Dividend TSR1 Value Returned ROIC2,4 Increases3 Returned $1.7 billion in value to shareholders through dividends and share buybacks in FY18
Slide 26: Disciplined approach to capital allocation
We will follow a disciplined approach to capital allocation Pay down Invest CAPEX / CAPEX / debt/ / CAPEX Grow the Strategic in the Working Working Opportunistic Working dividend Capital M&A Capital share Capital business repurchase 26 2/19/2019 CAGNY
Slide 27: We are leveraging our momentum in the business
We are leveraging our momentum in the business Our fundamentals Remain confident in Well positioned are strong, and our ability to achieve for future we consistently our three-year plan growth execute on our financial objectives strategic priorities 27 2/19/2019 CAGNY
Slide 28: Q&A
Q&A 28 2/19/2019 CAGNY
Slide 29: Non-GAAP reconciliations
Non-GAAP reconciliations 29 2/19/2019 CAGNY
Slide 30: Impact of Certain Items
Impact of Certain Items Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items Our discussion below of our results includes certain non-GAAP financial measures that we believe provide important perspective with respect to underlying business t
Slide 31: Operating Income Target
Operating Income Target Gross Profit, Operating Income and Net Earnings Targets We expect to achieve our gross profit, operating income and net earnings targets under our 3-year strategic plan by fiscal 2020. We cannot predict with certainty when we will achieve these results or whether the calculat
Slide 32: Return on Invested Capital
Return on invested Capital Adjusted Return on Invested Capital (ROIC) We c alc ulate ROIC as net earnings divided by (i) stoc kholder’s equity, c omputed as the average of adjusted stoc kholders’ equity at the beginning of the year and at the end of eac h fisc al quarter during the year; and (ii) lo