Slide 1: Sysco Fiscal Q2 2024 Earnings Results
January 30, 2024 Sysco Fiscal Q2 2024 Earnings Results
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 under the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the views of manage
Slide 3: Kevin Hourican, President & Chief Executive Officer
KEVIN HOURICAN President & Chief Executive Officer
Slide 4: Food Supply Chain Food Sales & Marketing
Food Supply Chain Food Sales & Marketing
Slide 5: Q2: 11%+ Adj. EPS Growth, with Strong Volumes and Positive Operating Leverage
Q2: 11%+ Adj. EPS Growth, with Strong Volumes and Positive Operating Leverage Fiscal Q2 2024 Highlights +3.7% +3.4% +2.9% +11.3% Revenue growth U.S. Foodservice volume growth U.S. local case volume growth Adjusted EPS1 growth to $0.89 - 11th consecutive quarter of double-digit EPS growth +4.9% +9.2%
Slide 6: Sysco is the Backbone of the Food Away From Home Industry and Growing Share
Sysco is the Backbone of the Food Away From Home Industry and Growing Share FY2023 Total Sysco Sales 8% Travel and Leisure 15% Other 7% Healthcare 62% Restaurants 8% Education and Government $76.3B ~725K In Annual Sales Customer Locations Operations IFG ~7,500 72K+ Colleagues Across Sales Consultant
Slide 7: Our Recipe for Growth
Our Recipe for Growth Sysco Is a Purpose-Driven Organization, Defining the Future of Our Industry PURPOSE | Our Why MISSION | Our What IDENTITY | Our Role Connecting the World to Delivering success for our Together we define the future of Share Food and Care for One customers through industry-leadin
Slide 8: Delivering Local Case Performance
Delivering Local Case Performance • Recently refined • Team-focused selling • Successfully added incremental compensation model continues to gain traction sales headcount in Q2 • Further incentivizes our • Sales team working more • Targeted to optimize sales consultants to identify collaboratively t
Slide 9: Efficiencies and Costs Outs Expand Consolidated Operating Profits
Efficiencies and Costs Outs Expand Consolidated Operating Profits Gross Profit Adj. Operating Expense1,2 Adj. Operating Income1,2 Overview (billions) (billions) (millions) • 5th consecutive quarter of +4.9% +3.8% +9.2% positive operating leverage YoY YoY YoY with gross profit growing faster $2.8 tha
Slide 10: Market Leader in the Highly Fragmented and Growing Foodservice Distribution Industry
Market Leader in the Highly Fragmented and Growing Foodservice Distribution Industry Total Addressable Market Since 2000 $354 B $359 B 17% $300 B $268 B $224 B $231 B $197 B $161 B $359 B 2000 2005 2010 2015 2020 2021 2022 2023 10 Technomic U.S. Foodservice Industry Wallchart for Calendar Year, upda
Slide 11: Food Away From Home Continues to Gain Share
Food Away From Home Continues to Gain Share Percentage of Combined Monthly Sales (2000 - 2023) 70% 65% 60% 55% 50% 45% 40% 35% 30% Grocery Stores Food Services and Drinking Places The United States Census Bureau Advance Monthly Sales for Retail and Food Services 11
Slide 12: Kenny Cheung, Chief Financial Officer
Kenny Cheung Chief Financial Officer
Slide 13: Q2 2024 Consolidated Financial Results
Q2 2024 Consolidated Financial Results Net Sales Adj. EBITDA1 Adj. EPS1 Overview (billions) (billions) +11.6% +11.3% • Sales increased 3.7% to $19.3 billion +3.7% YoY YoY YoY versus the prior year $0.89 • USFS +3.2% $19.3 $0.9 $18.6 $0.8 $0.80 • International +9.6% • Product inflation +1.1% for the
Slide 14: Q2 2024 U.S. Foodservice Results
Q2 2024 U.S. Foodservice Results Net Sales Adj. Operating Overview (billions) Income1,2 • Sales of $13.5 billion grew 3.2% (millions) versus the prior year +3.2% YoY +7.6% • Total case volume grew 3.4%, while YoY $13.5 local case volume increased 2.9% $13.1 $851 • Gross profit dollars increased 3.4%
Slide 15: Q2 2024 International Results
Q2 2024 International Results Net Sales Adj. Operating Overview (billions) Income1,2 (millions) • Sales increased 9.6%, or 6.4% on a constant currency basis1 +9.6% YoY +30.1% YoY • Gross profit dollars increased 13.4% $102 to $708 million, or 9.5% to $684 $3.6 million on a constant currency basis1 $
Slide 16: Q2 2024 SYGMA Results
Q2 2024 SYGMA Results SYGMA Operating Overview Net Sales (billions) Income2 • SYGMA sales decreased 1.0% to $1.9 -1% (millions) billion due to the planned exit of YoY customers that did not meet our +$9.5 Million disciplined profit thresholds $1.9 $1.9 YoY $16 • Gross profit dollars decreased 1.3% t
Slide 17: Strong Balance Sheet, Strong Investment Grade Credit Rating
Strong Balance Sheet, Strong Investment Grade Credit Rating Net Debt to Adj. EBITDA1 Overview • Only food distributor with a strong investment grade credit rating 5.15x • Ended the quarter with net debt to adjusted EBITDA ratio1 of 2.75x, an improvement from Q3 2021 when our net debt to adjusted EBI
Slide 18: Year-to-Date 2024 Cash Flow
Year-to-Date 2024 Cash Flow Cash from Operations Free Cash Flow1 Overview (millions) (millions) • Cash flow from operations was $856 million, a 70% increase $856 • Capital expenditures, net of $527 proceeds from sales of plant and equipment, were $328 million, with continued investments in our Recip
Slide 19: Capital Structure and Allocation
Capital Structure and Allocation Investment Priority Progress • Capital investments in our technology, fleet and buildings • Targeting 50-100 bps of growth annually from M&A; integration of Edward Don business progressing as 1 Invest for Growth • planned Strong pipeline of tuck-in acquisitions focus
Slide 20: Strong Cash Generation Drives Shareholder Returns
Strong Cash Generation Drives Shareholder Returns Cumulative Cash Returned to Shareholders $17.2 B $15.0 B $13.5 B $12.0 B $11.1 B $9.4 B $7.6 B $5.9 B $3.3 B $0.7 B FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 (Expected) Dividends Shares Repurchased Over $17 Billion of Cash
Slide 21: Investment Thesis: Sysco is Leading the Industry and Accelerating Growth
Investment Thesis Sysco is Leading the Industry and Accelerating Growth Healthy Balance Sheet: Supporting our customer’s Expect to grow meaningfully only Investment-Grade needs while partnering with faster than the total market Food Service Distributor suppliers on specific goals Focused on ROIC and
Slide 22: At the heart of food and service
S/sco At the heart of food and service
Slide 23: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS [ the heart of food and service
Slide 24: Impact of Certain Items
Impact of Certain Items The discussion of our results includes certain non-GAAP financial measures, including EBITDA and adjusted EBITDA, that we believe provide important perspective with respect to underlying business trends. Other than EBITDA and free cash flow, any non-GAAP financial measures wi
Slide 25: Non-GAAP Reconciliation: Impact of Certain Items, Q2 FY24 vs. Q2 FY23
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items, Q2 FY24 vs. Q2 FY23 (Dollars in Thousands, Except for Share and Per Share Data) 13-Week 13-Week Period Ended Period Ended Change Dec. 30, 2023 Dec. 31, 2022 in Dollars %/bps Change Sales
Slide 26: Non-GAAP Reconciliation: Impact of Certain Items, Q2 FY24 vs. Q2 FY23 (continued)
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items, Q2 FY24 vs. Q2 FY23 (Dollars in Thousands, Except for Share and Per Share Data) continued Other expense (GAAP) $ 5,245 $ 330,305 $ (325,060) -98.4% Impact of other non-routine gains and l
Slide 27: Segment Results Non-GAAP Reconciliation
Sysco Corporation and its Consolidated Subsidiaries Segment Results Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Applicable Segments, Q2 FY24 vs. Q2 FY23 (Dollars in Thousands) 13-Week 13-Week Period Ended Period Ended Change Dec. 30, 2023 Dec. 31, 2022 in Dollars %/bps Change U.S.
Slide 28: Segment Results Non-GAAP Reconciliation (continued)
Sysco Corporation and its Consolidated Subsidiaries Segment Results Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Applicable Segments, Q2 FY24 vs. Q2 FY23 (Dollars in Thousands) continued OTHER Sales (GAAP) $ 283,326 $ 300,952 $ (17,626) -5.9% Gross Profit (GAAP) $ 73,007 $ 77,311 $
Slide 29: Non-GAAP Reconciliation: Free Cash Flow, YTD24 vs. YTD23
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Free Cash Flow, YTD24 vs. YTD23 (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.
Slide 30: Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) EBITDA represents net earnings (loss) plus (i) interest expense, (ii) income tax expense and benefit, (iii) depreciation and (iv) amortization. The net earnings (loss) component of our EBITDA calculation is impacted by Certain I
Slide 31: Non-GAAP Reconciliation: Impact of Certain Items on EBITDA
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Earnings Before Interest, Taxes, Depreciation and Amortization (Q2 FY24 vs. Q2 FY23) (In Thousands) 13-Week 13-Week Period Ended Period Ended Change Dec. 30, 2023 Dec. 31, 2022 in Dolla
Slide 32: Projected Adjusted EBITDA Guidance
Projected Adjusted EBITDA Guidance Adjusted EBITDA is a non-GAAP financial measure; however, we cannot predict with certainty the particular certain items that would be excluded from the calculation of this measure for future periods. Due to these uncertainties, we cannot provide a quantitative reco
Slide 33: Net Debt to Adjusted EBITDA (December 30, 2023)
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Net Debt to Adjusted EBIDTA (In Thousands) Net Debt to Adjusted EBITDA is a non-GAAP financial measure frequently used by investors and credit rating agencies. Our Net Debt to Adjusted EBITDA ratio is calculated
Slide 34: Net Debt to Adjusted EBITDA (December 31, 2022)
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Net Debt to Adjusted EBIDTA (In Thousands) Net Debt to Adjusted EBITDA is a non-GAAP financial measure frequently used by investors and credit rating agencies. Our Net Debt to Adjusted EBITDA ratio is calculated
Slide 35: Net Debt to Adjusted EBITDA (March 27, 2021)
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Net Debt to Adjusted EBIDTA (In Thousands) Net Debt to Adjusted EBITDA is a non-GAAP financial measure frequently used by investors and credit rating agencies. Our Net Debt to Adjusted EBITDA ratio is calculated
Slide 36: Net Debt to Adjusted EBITDA Leverage Ratio Targets
Net Debt to Adjusted EBITDA Leverage Ratio Targets We expect to achieve our net debt to adjusted EBITDA leverage ratio forecast in fiscal 2024. We cannot predict with certainty when we will achieve these results or whether the calculation of our EBITDA will be on an adjusted basis in future periods