Us Foods Holding Corp. · NYSE:USFD
Us Foods — Q2 2020 Earnings Presentation
27 slides from Us Foods's earnings presentation, Aug 4, 2020
Slide 1: COVID-19 Update and Q2 Fiscal 2020 Results
COVID-19 Update and Q2 Fiscal 2020 Results August 4, 2020
Slide 2: Cautionary statements regarding forward-looking information
Cautionary statements regarding forward-looking information This presentation contains “forward-looking statements” within the meaning of the federal securities laws concerning, among other things, our liquidity, our possible or assumed results of operations and our business strategies. These forwar
Slide 3: Executive summary
Executive summary Long-term prospects for the industry and US Foods remain positive We expect that our scale and differentiation will lead to share gains Solid quarter given the external environment 2
Slide 4: Industry Outlook and US Foods Advantaged Position
INDUSTRY OUTLOOK AND US FOODS ADVANTAGED POSITION
Slide 5: While the recovery has slowed, traffic in states that opened early augur well
While the recovery has slowed, traffic in states that opened early augur well for the ultimate recovery of our industry U.S. Restaurants Weekly Transactions* Independent Restaurant Case Volume by Market YOY percent change, Week Ending % of Prior Year Case Volume, Week Ending 20% 100% 90% 0% 80% 70%
Slide 6: All customer types grew during the quarter
All customer types grew during the quarter Organic Case Growth by Customer Type and Week YOY percent change; Week Ending 120% 100% 80% 60% 40% 20% 0% -20% -40% -60% -80% -100% Mar 28th May 2nd May 30th June 27th July 4th July 11th July 18th July 25th Aug 1st Restaurants Healthcare Hospitality Retail
Slide 7: All elements of the P&L indicate eventual return to pre-COVID Adjusted EBITDA margins
All elements of the P&L indicate eventual return to pre-COVID Adjusted EBITDA margins Case Volume • Restaurants expected to recover • Addition of new profitable chain customers • Solid growth from retail partnerships Gross Profit • Margins at the customer level were stable • Expect to return to hist
Slide 8: We expect our national scale and differentiated strategy to drive market share gains
We expect our national scale and differentiated strategy to drive market share gains As a scale player, we have the advantage of: • Better purchasing power • Nationwide footprint and consistent operating model • Stability in an uncertain environment Differentiated value proposition evolving to meet
Slide 9: Q2 2020 Financial Results
Q2 2020 FINANCIAL RESULTS 8
Slide 10: Q2 results improved throughout the quarter; positive Adjusted EBITDA in May and June
Q2 results improved throughout the quarter; positive Adjusted EBITDA dollars in both May and June Consistent improvement in case volume throughout the quarter Q2 results impacted by a highly unusual operating environment • Gross profit: lower independent restaurant and hospitality case volume impact
Slide 11: COVID-19 related shutdowns heavily impacted Q2; results improved as the quarter progressed
COVID-19 related shutdowns heavily impacted Q2; results improved as the quarter progressed 2019 2020 Q2 Net Sales Q2 Gross Profit Q2 Operating Expense $ Millions H/(L) $ Millions; Percent of Sales H/(L) $ Millions; Percent of Sales H/(L) $1,142 $1,156 $948 $6,443 $838 $730 $730 $646 $671 $4,560 17.7
Slide 12: Trajectory of second quarter results supports a recovery in earnings
Trajectory of second quarter results supports a recovery in earnings; long-term earnings power unchanged Q2 Adjusted EBITDA* Q2 Adjusted Diluted Q2 Net Income/(Loss)** 2019 $ Millions; Percent of Sales Earnings/(Loss) Per Share* $ Millions 2020 $147 $ $116 $320 $0.67 ($97) ($0.25) ($54) $88 5.0% 1.9
Slide 13: Food Group and Smart Foodservice performance in line with expectations
Food Group and Smart Foodservice performance in line with expectations given current operating environment Food Group • National chain business performing well; some markets in the Northwest have been slower to open • Integration activities have resumed and are on track; expect to complete the first
Slide 14: Strong liquidity position allows us to operate from a position of strength
Strong liquidity position allows us to operate from a position of strength $1.7B of cash on hand and ~$3.0B in total liquidity at quarter end Cash flow positive in Q2 and YTD; working capital was a benefit Liquidity position allows us to invest to support growth 13
Slide 15: Appendix: Q2 Fiscal 2020 Summary & Non-GAAP Reconciliations
APPENDIX: Q2 FISCAL 2020 SUMMARY & NON-GAAP RECONCILIATIONS 14
Slide 16: Organic case volume heavily impacted by COVID-19; total case volume benefiting from acquisitions
Organic case volume heavily impacted by COVID-19; total case volume benefiting from recent acquisitions Independent Restaurant Case Growth Organic Case Growth by Quarter YOY percent change YOY percent change Organic Acquisitions Independent Restaurants 11.9% (32.1%) 20% Healthcare/Hospitality 5.5% 4
Slide 17: YTD key financial metrics
YTD key financial metrics 2019 2020 YTD Net Sales YTD Gross Profit YTD Operating Expense $ Millions H/(L) $ Millions; Percent of Sales H/(L) $ Millions; Percent of Sales H/(L) $12,474 $2,206 $2,194 $1,922 $1,869 $10,899 $1,658 $1,783 $1,737 $1,528 17.6% 15.9% 17.7% 16.4% 15.0% 17.6% 13.3% 14.0% Infl
Slide 18: Second quarter financial performance
Second quarter financial performance Reported Adjusted (1) (unaudited) (unaudited) 13 Weeks Ended 13 Weeks Ended June 27, June 29, June 27, June 29, ($ in millions, except per share data*) 2020 2019 Change 2020 2019 Change Case Growth (28.0)% Net Sales 4,560 6,443 (29.2)% Gross Profit 671 1,142 (41.
Slide 19: Year to date financial performance
Year to date financial performance Reported Adjusted (1) (unaudited) (unaudited) 26 Weeks Ended 26 Weeks Ended June 27, June 29, June 27, June 29, ($ in millions, except per share data*) 2020 2019 Change 2020 2019 Change Case Growth (12.6)% Net Sales 10,899 12,474 (12.6)% Gross Profit 1,737 2,194 (2
Slide 20: 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) June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Gross profit (GAAP) $671 $1,142 $1,737 $2,194 LIFO reserve change (1) 19 14 6 12 COVID-19 prod
Slide 21: Non-GAAP reconciliation - Adjusted Gross Profit and Adjusted Operating Expenses
Non-GAAP reconciliation - Adjusted Gross Profit and Adjusted Operating Expenses (1) Represents the non-cash impact of LIFO reserve adjustments. (2) Consists primarily of severance and related costs and organizational realignment costs. (3) Share-based compensation expense for stock and option awards
Slide 22: Non-GAAP reconciliation - Adjusted EBITDA and Adjusted Net Income
Non-GAAP reconciliation - Adjusted EBITDA and Adjusted Net Income Available to Common Shareholders 13 Weeks Ended 26 Weeks Ended (unaudited) (unaudited) ($ in millions) June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Net (loss) income available to common shareholders (GAAP) $(97) $116 $(229)
Slide 23: Non-GAAP reconciliation - Adjusted EBITDA and Adjusted Net Income
Non-GAAP reconciliation - Adjusted EBITDA and Adjusted Net Income Available to Common Shareholders (1) Consists primarily of severance and related costs and organization realignment costs. (2) Share-based compensation expense for stock and option awards and discounts provided under employee stock pu
Slide 24: 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) June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Diluted EPS (GAAP) ($0.44) $0.53 ($1.05) $0.85 Restructuring costs (1) 0.07 — 0.07 — Share-based compensation expense (2)
Slide 25: Non-GAAP reconciliation - Adjusted Diluted Earnings Per Share (EPS)
Non-GAAP reconciliation - Adjusted Diluted Earnings Per Share (EPS) (1) Consists primarily of severance and related costs and organization realignment costs. (2) Share-based compensation expense for stock and option awards and discounts provided under employee stock purchase plan. (3) Represents the
Slide 26: Non-GAAP reconciliation - Net Debt and Net Leverage Ratios
Non-GAAP reconciliation - Net Debt and Net Leverage Ratios (unaudited) ($ in millions, except ratios) June 27, 2020 December 28, 2019 June 29, 2019 Total Debt (GAAP) $6,214 $4,736 $3,205 Cash, cash equivalents and restricted cash (1,676) (98) (97) Net Debt (Non-GAAP) $4,538 $4,638 $3,108 Adjusted EB
Slide 27: We Help You Make It
WE HELP YOU US. MAKE IT