Slide 1: Sysco 4Q and FY16 Earnings Results
Sysco 4Q and FY16 Earnings Results August 15, 2016
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 within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the
Slide 3: Bill DeLaney, CEO
Bill DeLaney CEO
Slide 4: 4Q16 Financial Highlights
4Q16 Financial Highlights Comparable Adjusted1 Adjusted1 (14 weeks) (13 weeks) $MM, except per share YOY % YOY % data FY16 FY16 Change Change Sales $13,648 10.0% $12,673 2.2% Gross Profit $2,503 12.7% $2,324 4.7% Operating Expense $1,875 9.6% $1,741 1.7% SYSCO 4Q & FY16 Operating Income $628 23.4% $
Slide 5: Industry & Economic Trends Remain Uneven
Industry & Economic Trends Remain Uneven U.S. Consumer Confidence - Two Years Unemployment Rate & Non-Farm Payroll 110 Trend 7.0% 500,000 U.S. Unemployment Rate 103.8 102.6 6.5% Change in U.S. Non-Farm Payroll 100 97.4 Average 400,000 6.0% 5.5% 5.3% 4.9% 90 90.9 5.5% 5.1% 5.0% 5.0% 300,000 5.0% 86.4
Slide 6: FY16 Financial Highlights
FY16 Financial Highlights Comparable Adjusted1 Adjusted1 (53 weeks) (52 weeks) $MM, except per share YOY % YOY % data FY16 FY16 Change Change Sales $50,367 3.5% $49,392 1.5% Gross Profit $9,040 5.7% $8,862 3.6% Operating Expense $7,031 4.0% $6,897 2.0% Operating Income $2,009 12.1% $1,964 9.6% SYSCO
Slide 7: Sysco's Fourth Quarter Fiscal 2016 Results
Sysco’s Fourth Quarter Fiscal 2016 Results Successful year that was supported by strong foundation Built over the past several years through a series of commercial, supply chain and administrative initiatives FY16 was an impactful year for the company that featured tremendous change, a high le
Slide 8: Five Point Strategy
Five Point Strategy Partnership Productivity Products People Portfolio Profoundly Continuously Enhance Leverage Continuously enrich the improve offerings talent, assess new experience of productivity in through a structure and market doing business all areas customer- culture to opportunities with S
Slide 9: FY17 Outlook
FY17 Outlook Momentum is strong following successful FY16 Executing our strategy at a high level Working effectively together as one Sysco Remain committed to the success of our customers Bigger goals for FY17 Deliver consistent local case growth Increase our gross profit Reduce cost
Slide 10: Tom Bené, President & COO
Tom Bené President & COO
Slide 11: Successful FY16 was driven by accelerating local case growth
Successful FY16 was driven by accelerating local case growth USBL Case Growth2 FY16 USBL Case growth: 2.6% FY16 USBL Local cases 3.5% 3.7% 3.4% 3.9% 3.6% 3.1% Growth of 2.6%2 2.5% 2.4% 3.4% 3.0% FY16 USBL Gross Profit 2.1% 2.0% 2.4% 1.5% 1.7% 1.4% Growth of 4.7%; 47bps improvement2 1Q15 2Q15
Slide 12: Enhanced industry leading processes to allow customers to succeed and grow
Enhanced industry leading processes to allow customers to succeed and grow Improved current processes such as Category Management Revenue Management – Fully deploying in the field Enhanced Sales training and support tools to free up MA time Promotional programs Highlight product innovati
Slide 13: Solid expense management
Solid expense management Total Sysco Operating Leverage1 8.0% 6.0% 6.8% FY16 6.0% 4.7% • GP growth: 3.6% 6.1% 4.1% 6.0% 4.5% 3.4% • OPEX Growth: 2.0% 4.0% 3.0% 3.1% FY15 2.0% 3.1% • GP growth: 4.5% 2.2% 2.3% 1.8% 1.7% • OPEX Growth: 4.8% 0.0% 1.5% 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 GP growth OP
Slide 14: Joel Grade, CFO
Joel Grade CFO
Slide 15: 4Q16 Financial Highlights
4Q16 Financial Highlights Comparable Adjusted1 Adjusted1 (14 weeks) (13 weeks) $MM, except per share YOY % YOY % data FY16 FY16 Change Change Sales $13,648 10.0% $12,673 2.2% Gross Profit $2,503 12.7% $2,324 4.7% Operating Expense $1,875 9.6% $1,741 1.7% Operating Income $628 23.4% $583 14.6% SYSCO
Slide 16: Certain Items (53 weeks)
Certain Items (53 weeks) 4Q161 FY161 Total SYY Impact (USD 000s) FY16 FY15 Inc/(Dec) FY16 FY15 Inc/(Dec) Restructuring cost 56,220 1,692 54,529 123,134 7,801 115,333 Acquisition costs 25,212 386,558 (361,346) 35,614 554,667 (519,053) Total Operations 81,432 388,250 (306,817) 158,748 562,468 (403,720
Slide 17: FY16 Financial Highlights
FY16 Financial Highlights Comparable Adjusted1 Adjusted1 (53 weeks) (52 weeks) $MM, except per share YOY % YOY % data FY16 FY16 Change Change Sales $50,367 3.5% $49,392 1.5% Gross Profit $9,040 5.7% $8,862 3.6% Operating Expense $7,031 4.0% $6,897 2.0% Operating Income $2,009 12.1% $1,964 9.6% SYSCO
Slide 18: Cash Flow & Balance Sheet
Cash Flow & Balance Sheet Cash Flow History ($MM)1 $2,500 $1,933 $2,000 $1,512 $1,493 $1,555 $1,404 $1,500 Net cash provided by operating $1,092 activities (GAAP) $1,429 $1,000 Free Cash Flow (Non-GAAP) $1,015 $995 $1,037 $500 $628 $474 $- 2011 2012 2013 2014 2015 2016 (53 Weeks) Cash flow Cash
Slide 19: FY17 Outlook
FY17 Outlook Deflation Expected to continue for remainder of calendar year Modest sales and gross profit headwind for first half of the year Restaurant Industry Appears to be softening Expect modest case growth for the next quarter or two CAPEX expected to be approximately 1% of sales
Slide 20: Brakes financial update
Brakes financial update Combined annualized sales of approximately $55 billion Brakes fiscal year ending December 20151 $5 billion in revenue 6.5% increase from 2014 Approximately 5% Adjusted EBITDA margin Approximately 2/3 of revenue comes from UK, share leader We believe this acquisi
Slide 21: Summary
Summary Strong quarter and year led by continued momentum from improved underlying business performance Strong local case growth Solid GP growth Good cost management SYSCO 4Q & FY16 Committed to serving our customers and delivering a high level EARNINGS RESULTS of execution in all areas of our
Slide 22: Non-GAAP Reconciliations
Non-GAAP Reconciliations
Slide 23: Impact of Certain Items and extra week 4Q16
Impact of Certain Items and extra week 4Q16 Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items and extra week in fiscal year/4th fiscal quarter (In Thousands, Except for Share and Per Share Data) Sysco’s results of operations are impacted
Slide 24: Impact of Certain Items and extra week 4Q16 (con't)
Impact of Certain Items and extra week 4Q16 (con’t) Quarter Ended Period Change Period Change July 2, 2016 June 27, 2015 $ % Sales $ 13,647,891 $ 12,401,938 $ 1,245,953 10.0% Less 1 week fourth quarter sales (974,849) - (974,849) NM Comparable sales using a 13 week basis $ 12,673,042 $ 12,401,938 $
Slide 25: Impact of Certain Items and extra week FY16
Impact of Certain Items and extra week FY16 Year Ended Period Period Change Change July 2, 2016 June 27, 2015 $ % Sales $ 50,366,919 $ 48,680,752 $ 1,686,167 3.5% Less 1 week fourth quarter sales (974,849) - (974,849) NM Comparable sales using a 52 week basis $ 49,392,070 $ 48,680,752 $ 711,318 1.5%
Slide 26: 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
Slide 27: Real Growth
Real Growth Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Real Growth Real growth represents our sales growth after removing the impact of food cost inflation / deflation, sales from acquisitions that occurred within the last 12 months and the impact of fore
Slide 28: Adjusted ROIC
Adjusted ROIC Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Return on Invested Capital (ROIC) and Adjusted ROIC (In Thousands) We calculate ROIC as net earnings divided by (i) stockholder’s equity, computed as the average of adjusted stockholders’ equity at
Slide 29: Adjusted ROIC target
Adjusted ROIC target Adjusted Return on Invested Capital (ROIC) Target We have an ROIC target of 15% that we expect to achieve by fiscal 2018. We cannot predict with certainty when we will achieve these results or whether the calculation of our ROIC in such future period will be on an adjusted basis
Slide 30: Constant Currency
Constant Currency Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Foreign Currency on Results of Operations Metrics (In Thousands, Except for Share and Per Share Data) Sysco’s results of operations are impacted by the strengthening U.S. dollar in tra
Slide 31: Impact of extra week on cases
Impact of extra week on cases Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of extra week on selected metrics Sysco’s fiscal year ends on the Saturday nearest to June 30th. This resulted in a 53-week year ending July 2, 2016 for fiscal 2016 and 52-wee
Slide 32: Cost per Case
Cost per Case Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Cost per Case Cost per case is an important metric management uses to measure our expense performance. This metric is calculated by taking the total operating expense of our U.S. Broadline companies
Slide 33: Brakes EBITDA and adjusted EBITDA
Brakes EBITDA and adjusted EBITDA Brakes Group and its Consolidated Subsidiaries Reconciliation of EBITDA and Adjusted EBITDA (In Millions) The Brakes Group reports its results using International Financial Reporting Standards (IFRS). In measuring its results, it uses both EBITDA and Adjusted EBITDA
Slide 34: Qualitative projection of EPS impact on Brakes
Qualitative projection of EPS impact on Brakes Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Qualitative projected reconcilation for EPS impact on Brakes We have an expectation that the Brakes acquisition will be modestly accretive to adjusted EPS by a low t