Us Foods Holding Corp. · NYSE:USFD
Us Foods — Q2 2023 Earnings Presentation
28 slides from Us Foods's earnings presentation, Aug 10, 2023
Slide 1: Q2 Fiscal Year 2023 Results
Q2 Fiscal Year 2023 Results August 10, 2023
Slide 2: Disclaimer Page
Disclaimer Page Cautionary Statements Regarding Forward-Looking Information Statements in this presentation which are not historical in nature are “forward-looking statements” within the meaning of the federal securities laws. These statements often include words such as “believe,” “expect,” “projec
Slide 3: Execution of Strategic Priorities and Long-Range Plan Initiatives Drove Strong Q2 2023 Results
Execution of Strategic Priorities and Long-Range Plan Initiatives Drove Strong Q2 2023 Results Drove record Adjusted EBITDA via continued progress across profitable 1 growth and margin expansion Long-Range Plan initiatives Delivered healthy volume growth in each of our target customer types and 2 dr
Slide 4: Culture, Service, Growth, Profit
CULTURE SERVICE GROWTH PROFIT EMBRACE THE US FOODS® CULTURE DELIVER WORLD-CLASS SERVICE GROW MARKET SHARE EXPAND EBITDA MARGIN SAFE RELIABLE TARGET MARGIN SUPPORTIVE EFFICIENT DIFFERENTIATE PRODUCTIVITY RESPONSIBLE EASY-TO-USE BE FRESH OPTIMIZATION 4
Slide 5: Culture
CULTURE EMBRACE THE US FOODS® CULTURE SAFE: Always keep our people safe and embrace a path to zero accidents and injuries SUPPORTIVE: Champion a diverse and inclusive work environment for all; foster employee engagement; attract world-class talent RESPONSIBLE: Be environmentally and socially conscio
Slide 6: Deliver Service Excellence
Deliver Service Excellence • Customer service levels in line with pre-Covid levels as team focuses on lower performing product vendors SERVICE • Further reduced routing mileage and increased cases per mile DELIVER WORLD-CLASS SERVICE • MOXē transition for local customers RELIABLE: Ensure best-in-cla
Slide 7: Continued Progress to Deliver Strong Financial Results
Continued Progress to Deliver Strong Financial Results Delivered Strong Expanded Industry Leading Continued Supply Chain Delivered on Capital Financial Results Customer Experience Position Excellence Progress Allocation Priorities • Grew total case volume 3%, led by • Continued market share gains •
Slide 8: Q2 FY 2023 Financial Review
Q2 FY 2023 Financial Review Dirk Locascio Chief Financial Officer 8
Slide 9: Delivered Strong Earnings Growth and Margin Expansion
Delivered Strong Earnings Growth and Margin Expansion B/(W) vs Q2 2023 Q2 2022 Total Organic Case Volume +2.7% IND Organic Case Volume(1) +4.8% Net Sales ($millions) $9,013 +2.1% Adjusted EBITDA(2) ($millions) $432 +17.4% Adjusted EBITDA Margin(2) 4.8% +60 bps Adjusted Diluted EPS(2) $0.79 +17.9% (1
Slide 10: Grow Profitable Market Share
Grow Profitable Market Share • On track to exceed 1.5x restaurant market growth for FY 2023 • Gained IND market share for ninth GROWTH consecutive quarter enabled by technology and service model advantages GROW MARKET SHARE • Continued customer mix improvement TARGET: Grow market share with stronger
Slide 11: Further Optimize EBITDA Margin
Further Optimize EBITDA Margin • Effectively managing pricing through commodity volatility • Continued COGS improvement via PROFIT vendor collaboration • Continuing progress in Supply Chain EXPAND EBITDA MARGIN productivity and turnover; flex MARGIN: Expand through EB growth, strategic vendor schedu
Slide 12: Strong Operating Cash Flow Creates Flexibility to Deploy Capital
Strong Operating Cash Flow Creates Flexibility to Deploy Capital Strategically to Enable Growth and Strengthen Capital Structure Operating Cash Flow ($M) $700 $653 Capital Allocation Priorities $600 1 Invest in the business $500 $400 $300 $250 $259 2 Reduce leverage to target range $200 $100 $- 3 $(
Slide 13: Further Strengthened Capital Structure Through Reduced Leverage
Further Strengthened Capital Structure Through Reduced Leverage Net Debt ($M) and Net Leverage(1) $4,823 Strong Progress Toward Long-Term $4,643 Leverage Range $4,372 • Reached top of 2.5 – 3.0x net leverage target range with further progress expected 4.2x 3.5x • Leverage progress from a combination
Slide 14: Updated Fiscal 2023 Guidance
Updated Fiscal 2023 Guidance Prior Guidance Updated Guidance (as of February 16, 2023) (as of August 10, 2023) Restaurants: ~1.5x market Restaurants: ~1.5x market Volume All other: ~1x market All other: ~1x market (1) (1) Adjusted EBITDA $1.45B – $1.51B $1.51B – $1.54B (2) Adjusted Diluted EPS $2.45
Slide 15: Invest With US Foods
Invest With US Foods Leader in a highly fragmented industry with national scale across purposefully 1 selected target customer types Sustainable competitive advantages to drive market outperformance; 2 well-positioned to win in any macro environment Executing Long-Range Plan initiatives to drive gro
Slide 16: Appendix
Appendix: Q2 Fiscal 2023 Summary Non-GAAP Reconciliations 16
Slide 17: Quarterly Case Volume Trend vs. Prior Year
Quarterly Case Volume Trend vs. Prior Year Organic Case Growth by Quarter(1)(2) Independent Restaurant Case Growth(1)(2) YOY percent change YOY percent change for total and organic cases 79.1% Organic Acquisitions 80% Independent Restaurants Healthcare/Hospitality 70% All Other 60% 74.4% 50% 8.1% 25
Slide 18: US Foods Debt Summary
US Foods Debt Summary Interest Rate as of Carrying Value as Carrying Value as $ Millions Maturity Interest Terms July 1, 2023 of July 1, 2023 of January 1, 2023 ABL Facility December 7, 2027 - - - 2019 Incremental Term Loan Facility (net of $14 and $19 of September 13, 2026 SOFR + 2.11% 7.22% 1,170
Slide 19: Second Quarter Financial Performance
Second Quarter Financial Performance Reported Adjusted (1) (unaudited) (unaudited) 13 Weeks Ended 13 Weeks Ended ($ in millions, except per share data) July 1, 2023 July 2, 2022 Change July 1, 2023 July 2, 2022 Change Case Growth 2.7% Net Sales 9,013 8,827 2.1% Gross Profit 1,591 1,383 15.0% 1,576 1
Slide 20: Year to Date Financial Performance
Year to Date Financial Performance Reported Adjusted (1) (unaudited) (unaudited) 26 Weeks Ended 26 Weeks Ended ($ in millions, except per share data) July 1, 2023 July 2, 2022 Change July 1, 2023 July 2, 2022 Change Case Growth 4.0% Net Sales 17,555 16,625 5.6% Gross Profit 3,016 2,578 17.0% 3,021 2
Slide 21: Non-GAAP Reconciliation - Adjusted Gross Profit and Adjusted Operating Expenses
Non-GAAP Reconciliation - Adjusted Gross Profit and Adjusted Operating Expenses 13 Weeks Ended 26 Weeks Ended (unaudited) (unaudited) ($ in millions) July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022 Gross profit (GAAP) $1,591 $1,383 $3,016 $2,578 LIFO reserve change (1) (15) 65 5 137 Adjusted Gro
Slide 22: Non-GAAP Reconciliation - Adjusted Gross Profit and Adjusted Operating Expenses
Non-GAAP Reconciliation - Adjusted Gross Profit and Adjusted Operating Expenses 1. Represents the non-cash impact of LIFO reserve adjustments. 2. Share-based compensation expense for expected vesting of stock awards and employee stock purchase plan. 3. Transformational costs represent non-recurring
Slide 23: Non-GAAP Reconciliation - Adjusted EBITDA and Adjusted Net Income
Non-GAAP Reconciliation - Adjusted EBITDA and Adjusted Net Income 13 Weeks Ended 26 Weeks Ended (unaudited) (unaudited) ($ in millions) July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022 Net income available to common shareholders (GAAP) $182 $61 $257 $45 Series A Preferred Stock Dividends — (9) (7
Slide 24: Non-GAAP Reconciliation - Adjusted EBITDA and Adjusted Net Income
Non-GAAP Reconciliation - Adjusted EBITDA and Adjusted Net Income 1. Share-based compensation expense for expected vesting of stock awards and employee stock purchase plan. 2. Represents the non-cash impact of LIFO reserve adjustments. 3. Transformational costs represent non-recurring expenses prior
Slide 25: Non-GAAP Reconciliation - Adjusted Diluted Earnings Per Share (EPS)
Non-GAAP Reconciliation - Adjusted Diluted Earnings Per Share (EPS) 13 Weeks Ended 26 Weeks Ended (unaudited) (unaudited) July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022 Diluted EPS (GAAP) $0.73 $0.27 $1.05 $0.20 Share-based compensation expense (1) 0.06 0.04 0.11 0.08 LIFO reserve charge (2) (0
Slide 26: Non-GAAP Reconciliation - Adjusted Diluted Earnings Per Share (EPS)
Non-GAAP Reconciliation - Adjusted Diluted Earnings Per Share (EPS) 1. Share-based compensation expense for expected vesting of stock awards and employee stock purchase plan. 2. Represents the non-cash impact of LIFO reserve adjustments. 3. Transformational costs represent non-recurring expenses pri
Slide 27: Non-GAAP Reconciliation - Net Debt and Net Leverage Ratios
Non-GAAP Reconciliation - Net Debt and Net Leverage Ratios (unaudited) ($ in millions, except ratios) July 1, 2023 December 31, 2022 July 2, 2022 Total Debt (GAAP) $4,751 $4,854 $5,020 Cash, cash equivalents and restricted cash (379) (211) (197) Net Debt (Non-GAAP) $4,372 $4,643 $4,823 Adjusted EBIT
Slide 28: We Help You Make It
WE HELP YOU US. MAKE IT"