Slide 1: Sysco 1Q FY20 Earnings Results
SYSCO 1Q FY20 EARNINGS RESULTS
Slide 2: Forward Looking Statements
Forward Looking Statements Statements made in this presentation or in our earnings call for the first 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: Tom Bené, Chairman, President & CEO
Tom Bené Chairman, President & CEO 3
Slide 4: Our Vision
To be our customers’ most Our VISION valued and trusted business partner 4
Slide 5: Sysco Reported Results in Line with Our Expectations
SYSCO REPORTED RESULTS IN LINE WITH OUR EXPECTATIONS Total Sysco 1Q201 Sales $15.3B 0.6% Gross Profit $2.9B 1.4% Adj. Operating Income1 $742M 7.3% Adj. EPS1 $0.98 8.6% 1 See Non-GAAP reconciliations at the end of the presentation. 5
Slide 6: U.S. Foodservice Operations Delivered Solid Topline Growth
U.S. FOODSERVICE OPERATIONS DELIVERED SOLID TOPLINE GROWTH U.S. Foodservice Operations 1Q20 1 Sales $10.7B 2.5% Gross Profit $2.1B 2.6% Adj. OPEX1 $1.3B 0.4% Adj. Operating Income1 $866M 6.1% 1 See Non-GAAP reconciliations at the end of the presentation. 1 See Non-GAAP reconciliations at the end of
Slide 7: We Had Improved Results in Our International Business
WE HAD IMPROVED RESULTS IN OUR INTERNATIONAL BUSINESS International Foodservice Operations 1Q201 1Q201 CONSTANT CURRENCY 1Q201 Sales $3.0B 3.0% 8.5% $2.9B 0.3% 8.5% 0.3% 8.5% Gross Profit $628M 2.1% $605M 1.7% 7.1% 1.7% 7.1% Adj. OPEX1 $527M 9.7% 1.3% $506M 9.7% 2.7% 9.7% 2.7% Adj. Operating Income1
Slide 8: Joel Grade, EVP & CFO
Joel Grade EVP & CFO 8
Slide 9: 1Q20 Financial Highlights
1Q20 FINANCIAL HIGHLIGHTS Total Sysco 1Q201 ($MM, except per share data) Sales $15.3B 0.6% Gross Profit $2.9B 1.4% Adj. OPEX1 $2.2B 0.5% Adj. Operating Income1 $742M 7.3% Adj. Net Earnings1 $510 6.5% Adj. EPS1 $0.98 8.6% 1 See Non-GAAP reconciliations at the end of the presentation. 9
Slide 10: Operating Performance
OPERATING PERFORMANCE 1 Total Sysco Adj. Operating Leverage 7.0% 5.5% 5.6% 5.7% 1Q201 9 Quarter 5.0% 3.8% 5.4% 3.9% Average1,2 5.0% 2.7% 2.9% 3.0% 3.4% 3.6% 2.1% 1.4% 1.0% 2.7% 2.1% 1.4% 3.7% 0.6% -1.0% -0.4% -0.5% -3.0% (0.5%) 2.5% 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 GP growth OPEX growth
Slide 11: Free Cash Flow
FREE CASH FLOW 13 WEEKS 13 WEEKS OF FY191 OF FY201 Key Drivers: • Increased accounts Cash from Ops $271M $172M $100M receivables • Higher capex spend • Offset by increased Free Cash Flow $171M $1M $170M operating income 1 See Non-GAAP reconciliations at the end of the presentation. 11
Slide 12: Confident in Our Ability to Achieve 3-Year Plan
CONFIDENT IN OUR ABILITY TO ACHIEVE 3-YEAR PLAN • 1Q20 results largely in line with our expectations: o Growing cases in customer segments that are the most profitable for us o Increasing Sysco Brand penetration o Strong track record of managing expenses o Solid adjusted operating income growth of 7
Slide 13: Non-GAAP Reconciliations
Non-GAAP Reconciliations 13
Slide 14: Impact of Certain Items
IMPACT OF CERTAIN ITEMS Our discussion below and elsewhere herein of our results includes certain non-GAAP financial measures that we believe provide important perspective with respect to underlying business trends. Other than free cash flow, any non-GAAP financial measures will be denoted as adjust
Slide 15: Operating Income Target
OPERATING INCOME TARGET We expect to achieve our gross profit, operating income and earnings per share targets under our 3-year strategic plan by fiscal 2020. We cannot predict with certainty when we will achieve these results or whether the calculation of our gross profit, operating income and/or e
Slide 16: Impact of Certain Items, 1Q20
IMPACT OF CERTAIN ITEMS, 1Q20 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 Period Change Period Sep. 28, 2019 Sep. 29, 2018 in Doll
Slide 17: Impact of Certain Items, 1Q20 (Segment)
IMPACT OF CERTAIN ITEMS, 1Q20 (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 Period Change Period Sep. 28, 2019 Sep. 29,
Slide 18: Adjusted Operating Leverage
ADJUSTED OPERATING LEVERAGE Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Total Sysco Operating Leverage (Impact of Certain Items) (Dollars in Thousands) (a) 9 quarter average gross profit (GAAP) 3.7% (b) 9 quarter average operating expenses (GAAP) 3.0% (c)
Slide 19: Adjusted Operating Leverage (Continued)
ADJUSTED OPERATING LEVERAGE (CONTINUED) 13-Week Period 13-Week 13-Week 13-Week 13-Week 13-Week 13-Week 13-Week Ended Period Ended Period Change Period Period Ended Period Ended Period Change Period Dec. 29, 2018 Dec. 30, 2017 in Dollars % Change Sep. 29, 2018 Sep. 30, 2017 in Dollars % Change Gross
Slide 20: 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