Us Foods Holding Corp. · NYSE:USFD
Us Foods — Q3 2020 Earnings Presentation
29 slides from Us Foods's earnings presentation, Nov 2, 2020
Slide 1: Q3 Fiscal 2020 Results
Q3 Fiscal 2020 Results November 2, 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 Resilient industry is expected to return to pre-COVID volume levels Case volumes show a steady recovery; US Foods is profitably gaining share Acquisitions performing as expected; Food Group integration on track Significant improvement in financial results compared to second quarter
Slide 4: Industry Outlook and US Foods Advantaged Position
INDUSTRY OUTLOOK AND US FOODS ADVANTAGED POSITION
Slide 5: A recovery is underway and consumers are returning to restaurants
A recovery is underway and consumers are returning to restaurants Percentage of Consumer Visits* Week Ending 70% FAFH • FAFH visits continues to close FAH the gap vs FAH 60% • Industry volumes are expected to 50% recover to pre-COVID levels 40% • Independent restaurants have transitioned to off prem
Slide 6: Continued improvement in case volume across customer types
Continued improvement in case volume across customer types Organic Case Growth by Customer Type YOY percent change; Week ended date 0% -10% -20% -30% -40% -50% -60% -70% -80% -90% -100% Mar 28th May 2nd May 30th June 27th Aug 1st Aug 29th Sept 26th Oct 3rd Oct 10th Oct 17th Oct 24th Restaurants Heal
Slide 7: Leveraging our scale and differentiation to drive profitable market share gains
Leveraging our scale and differentiation to drive profitable market share gains National footprint and consistent operating model is leading to share gains with both large and small customers Our digital leadership provides an important differentiation point for servicing customers during this time
Slide 8: Food Group integration activities underway; Smart Foodservice outperforming delivered business
Food Group integration activities underway; Smart Foodservice outperforming delivered business in current environment Food Group • National chain business performing well • Integration progressing well; second system conversion expected to be completed by year end • On track to achieve $65M of annua
Slide 9: Q3 2020 Financial Results
Q3 2020 FINANCIAL RESULTS 8
Slide 10: Our Q3 results highlight the work we have done to position the business for success post-COVID
Our Q3 results highlight the work we have done to position the business for success post-COVID Consistent improvement in case volume throughout the quarter from combination of share gains and underlying industry improvement Gross margin was stable through Q3; expected to increase as customer and pro
Slide 11: Third quarter results improved significantly from the trough experienced in the second quarter
Third quarter results improved significantly from the trough experienced in the second quarter Q3 Net Sales 2019 2020 Q3 Adjusted Gross Profit* Q3 Adjusted Operating Expense* $ Millions H/(L) Percent of Sales; $ Millions Percent of Sales; $ Millions +70 bps +100 bps improvement improvement $6,531 ov
Slide 12: Operating leverage recovering as case volume and customer mix improve
Operating leverage recovering as case volume and customer mix improve Adjusted Gross Profit and Adjusted Operating Expense* Percent of sales trend 20% 19% 18% 17% 16% 15% 14% 13% 12% 11% 10% 2017 2018 2019 Q1 2020 Q2 2020 Q3 2020 Adj EBITDA % 4.4% 4.6% 4.6% 2.8% 1.9% 3.6% of Sales* Adjusted Gross Pr
Slide 13: Third quarter Adjusted EBITDA increased meaningfully from the second quarter
Third quarter Adjusted EBITDA increased meaningfully from the second quarter; positive Adjusted Net Income for the quarter Q3 Adjusted EBITDA* Q3 Adjusted Net Income** Q3 Adjusted Diluted Earnings Per $ Millions; Percent of Sales $ Millions Share* $ $307 $143 $0.65 $209 $32 $0.15 4.7% 3.6% 2019 2020
Slide 14: Strong liquidity position and cash flow generation allows for future debt reduction
Strong liquidity position and cash flow generation of the business allows for future debt reduction $1.0B of cash on hand and ~$2.7B in total liquidity at quarter end Third quarter working capital in line with expectations and case volume recovery Cash flow expected to return to strong pre-COVID lev
Slide 15: Appendix: Q3 Fiscal 2020 Summary & Non-GAAP Reconciliations
APPENDIX: Q3 FISCAL 2020 SUMMARY & NON-GAAP RECONCILIATIONS 14
Slide 16: Organic case volume recovering; total case volume benefiting from recent acquisitions
Organic case volume recovering; total case volume benefiting from recent acquisitions Independent Restaurant Case Growth Organic Case Growth by Quarter YOY percent change for total and organic cases YOY percent change Organic Acquisitions Independent Restaurants 11.9% (6.8%) (32.1%) 20% Healthcare/H
Slide 17: Third quarter GAAP results
Third quarter GAAP results Q3 GAAP Gross Profit Q3 GAAP Operating Expense Q3 GAAP Net Income/(Loss)* Percent of Sales; $ Millions Percent of Sales; $ Millions $ Millions 17.7% 16.7% 15.3% 14.8% $106 ($2) $1,156 $974 $968 $896 2019 2020 2019 2020 2019 2020 * Net Income/(Loss) available to common shar
Slide 18: Year to date operating results
Year to date operating results 2019 2020 YTD Net Sales YTD Gross Profit YTD Operating Expense $ Millions Percent of Sales; $ Millions Percent of Sales; $ Millions $19,005 17.7% 17.6% 16.5% 16.8% $16,747 16.2% 14.9% 13.7% 13.2% $3,350 $2,711 $3,363 $2,760 $2,837 $2,818 $2,507 $2,302 Inflation/ Case M
Slide 19: Year to date profit results
Year to date profit results 2019 YTD Adjusted EBITDA* YTD Net Income/(Loss)** YTD Adjusted Diluted Earnings Per $ Millions; Percent of Sales $ Millions 2020 Share* $ $293 $859 $378 $1.73 $474 ($231) 4.5% 2.8% $10 $0.05 2019 2020 GAAP Adjusted* 2019 2020 * Reconciliations of non-GAAP measures are pro
Slide 20: Third quarter financial performance
Third quarter financial performance Reported (unaudited) Adjusted (1) (unaudited) 13 Weeks Ended 13 Weeks Ended September September September September ($ in millions, except per share data) 26, 2020 28, 2019 Change 26, 2020 28, 2019 Change Case Growth (8.9)% Net Sales 5,848 6,531 (10.5)% Gross Prof
Slide 21: Year to date financial performance
Year to date financial performance Reported (unaudited) Adjusted (1) (unaudited) 39 Weeks Ended 39 Weeks Ended September September September September ($ in millions, except per share data) 26, 2020 28, 2019 Change 26, 2020 28, 2019 Change Case Growth (11.4)% Net Sales 16,747 19,005 (11.9)% Gross Pr
Slide 22: Non-GAAP reconciliation - Adjusted Gross Profit and Adjusted Operating Expenses
Non-GAAP reconciliation - Adjusted Gross Profit and Adjusted Operating Expenses 13 Weeks Ended 39 Weeks Ended (unaudited) (unaudited) September September September September ($ in millions) 26, 2020 28, 2019 26, 2020 28, 2019 Gross profit (GAAP) $974 $1,156 $2,711 $3,350 LIFO reserve change (1) 3 1
Slide 23: Non-GAAP reconciliation - Adjusted Gross Profit and Adjusted Operating Expenses
Non-GAAP reconciliation - Adjusted Gross Profit and Adjusted Operating Expenses 1. Represents the non-cash impact of LIFO reserve adjustments. 2. Consists primarily of severance and related costs, organizational realignment costs and asset impairment charges. 3. Share-based compensation expense for
Slide 24: Non-GAAP reconciliation - Adjusted EBITDA and Adjusted Net Income
Non-GAAP reconciliation - Adjusted EBITDA and Adjusted Net Income Available to Common Shareholders 13 Weeks Ended 39 Weeks Ended (unaudited) (unaudited) September September September September ($ in millions) 26, 2020 28, 2019 26, 2020 28, 2019 Net (loss) income available to common shareholders (GAA
Slide 25: 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, organization realignment costs and asset impairment charges. 2. Share-based compensation expense for stock and option awards and discounts provided
Slide 26: Non-GAAP reconciliation - Adjusted Diluted Earnings Per Share (EPS)
Non-GAAP reconciliation - Adjusted Diluted Earnings Per Share (EPS) 13 Weeks Ended 39 Weeks Ended (unaudited) (unaudited) September September September September 26, 2020 28, 2019 26, 2020 28, 2019 Diluted EPS (GAAP) ($0.01) $0.48 ($1.05) $1.34 Restructuring costs (1) 0.10 — 0.18 — Share-based compe
Slide 27: Non-GAAP reconciliation - Adjusted Diluted Earnings Per Share (EPS)
Non-GAAP reconciliation - Adjusted Diluted Earnings Per Share (EPS) 1. Consists primarily of severance and related costs, organization realignment costs and intangible asset impairment charges. 2. Share-based compensation expense for stock and option awards and discounts provided under employee stoc
Slide 28: Non-GAAP reconciliation - Net Debt and Net Leverage Ratios
Non-GAAP reconciliation - Net Debt and Net Leverage Ratios (unaudited) September December September ($ in millions, except ratios) 26, 2020 28, 2019 28, 2019 Total Debt (GAAP) $5,787 $4,736 $4,924 Cash, cash equivalents and restricted cash (1,019) (98) (98) Net Debt (Non-GAAP) $4,768 $4,638 $4,826 A
Slide 29: We help you make it
WE HELP YOU US. MAKE IT