Performance Food Group Company · NYSE:PFGC
Performance Food — CAGNY Conference 2023
51 slides from Performance Food's conference presentation, Feb 23, 2023
Slide 1: CAGNY Conference 2023
CAGNY CONFERENCE 2023 F e b r ua ry 2 3 , 2 0 2 3
Slide 2: Disclaimer
DISCLAIMER This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, statements related to our expectations
Slide 3: Disclaimer Cont.
DISCLAIMER CONT. changes in pricing practices of our suppliers; our growth strategy may not achieve the anticipated results; risks relating to acquisitions, including the risk that we are not able to realize benefits of acquisitions or successfully integrate the businesses we acquire; environmental,
Slide 4: George Holm, Chairman & CEO
GEORGE HOLM C h a ir m an & C E O 2023 PFG / CAG NY 4
Slide 5: PFG Strategies & Priorities
PFG STRATEGIES & PRIORITIES Customer Centric Culture Significant Addressable Market Opportunity Diverse channel model provides resiliency 1 2 3 Ongoing Adjusted Consistent organic EBITDA margin Reduce Leverage sales growth expansion 2023 PFG / CAG NY 5
Slide 6: Performance Food Group at a Glance
PERFORMANCE FOOD GROUP AT A GLANCE LOCATIONS SERVED Restaurants Suppliers Products Associates Hospitality 5,500+ 350,000+ ~35,000 Higher Education Healthcare Theaters Customer Specialty Retailers Company Locations Vehicles Locations 150+ 7,000+ Business and industry 300,000+ locations
Slide 7: Diversified Business Model
DIVERSIFIED BUSINESS MODEL PFG Operating Segments and Business Mix (1) Net Sales (2) Convenience 42% One of the largest broadline distributors by net sales in the U.S. Performance A leading distributor to independent pizzerias in the U.S. Foodservice A leading distributor to the family and cas
Slide 8: Culture & People Focus
CULTURE & PEOPLE FOCUS Underpins Sales Growth Locally-based decision making to remain nimble Understand customers’ business operations Over 12,000 of our associates interact with customers daily Extensive, ongoing product training 2023 PFG / CAG NY 8
Slide 9: Broad Geographic Reach
BROAD GEOGRAPHIC REACH Broadline
Slide 10: Broad Geographic Reach
BROAD GEOGRAPHIC REACH Foodservice
Slide 11: Broad Geographic Reach
BROAD GEOGRAPHIC REACH Vistar
Slide 12: Broad Geographic Reach
BROAD GEOGRAPHIC REACH Convenience
Slide 13: Broad Geographic Reach
SP FG zsexs BROAD GEOGRAPHIC REACH KE PFG Headquarters © Fooatervice @ Vistar Convenience
Slide 14: PFG Addressable Market
PFG ADDRESSABLE MARKET PFG Total PFG Serviceable Addressable Market Available Market ~$633 billion ~$443 billion Total Addressable Market (TAM) is defined as total U.S. distributor Serviceable Available Market (SAM) is defined as total U.S. distributor industry dollar sales where PFG companies have
Slide 15: PFG Addressable Market
PFG ADDRESSABLE MARKET PFG Total Addressable Market PFG Serviceable Available Market ~$633 billion ~$443 billion $ billions $ billions Foodservice $278 Foodservice $278 Vistar $160 Vistar Convenience $38 $127 Convenience $195 Source: PFG Company Estimates 2023 PFG / CAG NY 15
Slide 16: Week in the Life of Consumers
WEEK IN THE LIFE OF CONSUMERS FINE HISPANIC QUICK SERVICE REST FOOD PIZZA THEME DINING RESTAURANT LUNCH RESTAURANT AREAS STOPS PARK HOTEL AIRPORT PANTRY GIFT SHOP AIRPORT RETAIL CANDY THEATER CONVENIENCE RESTAURANT (BIG BOX) FOOD/BEV RESTAURANTS GAS/ STORES CONVENIENCE STORE M T W T F S S NEIGHBORHO
Slide 17: Week in the Life of Consumers
WEEK IN THE LIFE OF CONSUMERS FINE HISPANIC QUICK SERVICE REST FOOD PIZZA THEME DINING RESTAURANT LUNCH RESTAURANT AREAS STOPS PARK HOTEL AIRPORT PANTRY GIFT SHOP AIRPORT RETAIL CANDY THEATER CONVENIENCE RESTAURANT (BIG BOX) FOOD/BEV RESTAURANTS GAS/ STORES CONVENIENCE STORE M T W T F S S NEIGHBORHO
Slide 18: Serving Those Who Feed America Away From Home
SERVING THOSE WHO FEED AMERICA AWAY FROM HOME CONVENIENCE STORES SINGLE-SERVE RESTAURANTS & IMMEDIATE & CULINARY CONSUMPTION 2023 18
Slide 19: Food Away From Home Leader
FOOD AWAY FROM HOME LEADER Complementary Businesses Across CROSS SELL EXAMPLES Food Away from Home Cross selling opportunities are substantial Procurement and brand development strength Operational best practice sharing Multiple delivery options Broad Customer Base BROAD BRAND PORTFOLIO Di
Slide 20: Our Sales Pursuit
OUR SALES PURSUIT OPCO SALES OPERATIONS CUSTOMERS OPCO DRIVERS MGMT. 2023 PFG / CAG NY 20
Slide 21: Investment in Growth
INVESTMENT IN GROWTH Foodservice Area Manager Sales Force 2,850 1,400 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 YTD23 Notes: FY23 as of Week 26 2023 PFG / CAG NY 21
Slide 22: Performance Brands Are a Competitive Advantage
PERFORMANCE BRANDS ARE A COMPETITIVE ADVANTAGE Umbrella Brands – Tiered Strategy More than 25,000 SKUs Broadline Roma Over $5.9 billion in sales of Performance Brands in FY22 Strategic Brands Value creation potential at Reinhart 2023 PFG /CAGNY 22
Slide 23: Rigorous Brand Development Process
RIGOROUS BRAND DEVELOPMENT PROCESS Item Set Up Packaging New Brand Packaging Rollout and Print Proofs Product Development Design and Assembly & Packaging and Production Protocol Development Distribution Requirements Production 6-8 Weeks 1 Week Up to 4 Weeks 1 Day 2 Weeks Up to 2 Weeks 2023 PFG / CAG
Slide 24: Supporting Our Brands
SUPPORTING OUR BRANDS Data Sourcing Brand Specific Digital & Social & Sharing Training Marketing 24 2023 PFG / CAG NY 24
Slide 25: Size of the Prize
SIZE OF THE PRIZE Performance Brand Cases as % of Total PFG Independent Cases 52% 48% 44% 40% 36% FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 YTD Source: Company Reports 2023 PFG / CAG NY 25
Slide 26: Opportunity in Convenience
OPPORTUNITY IN CONVENIENCE A Company of Growth Drive Adjusted EBITDA and Margins Operational Excellence Leverage PFG to Grow Foodservice Execute on Integration and Capture Synergy
Slide 27: Convenience Store Opportunity Landscape
CONVENIENCE STORE OPPORTUNITY LANDSCAPE Convenience Store Industry Convenience Opportunity All Other Candy 10% Total Addressable Market 3% (TAM) $195B Cigarettes Froz. Disp. Bev Snacks 6% 4% 28% 7% Serviceable Addressable 8% Commisary Market (SAM) $127B Other Tobacco 13% Non-Nicotine (SAM) $48
Slide 28: FY 2022 PFG Convenience Snapshot (LTM)
FY 2022 PFG CONVENIENCE SNAPSHOT (LTM) Business Fast Facts FY 2022 CONVENIENCE SALES MIX Health, Beauty & Fresh 3.0% Beverages $23.6B Sales* General 4.8% 1.3% Candy 6.0% Leading distributor of independent convenience stores in North Other Tobacco America Products 9.5% Cigarettes 60,000 Customer
Slide 29: Expanding Foodservice in Convenience
EXPANDING FOODSERVICE IN CONVENIENCE Access to expanded product mix and improved costs Expanded Foodservice to Convenience Best in class branded programs – available through all convenience Opco's Solution for convenience Center Of Excellence equals retailers with complex Customer Exposure foodservi
Slide 30: Vistar
VISTAR Theatre & Office Hospitality Concessions Supply Vending & Military Micro Markets Specialty Travel Corrections Retail Office Coffee Gaming Services Value Campus E-Comm
Slide 31: Channel Evolution
CHANNEL EVOLUTION Diversity of our customer base has led to a healthy mix, with no channel comprising more than 5% 50% of our current business. 12% 3% 5% 1% 1% 3% 2% 44% 4% 15% FY2Q23 TTM 2008 Mix 11% $4.1B Sales 2000 Mix $1.4B Sales $1B Sales 73% 6% 96% 5% 14% Vending/OCS Theater/Concessions Correc
Slide 32: Fulfillment Services
FULFILLMENT SERVICES 3 Facilities Competitive Advantage 150 Customers across 8 channels Ability to Meet Customer’s Future 1.3M Growth Needs Orders Annually New Opportunities with 3M Manufacturers Parcels shipped annually
Slide 33: PFG Strategies & Priorities
PFG STRATEGIES & PRIORITIES Customer Centric Culture Significant Addressable Market Opportunity Diverse channel model provides resiliency 1 2 3 Ongoing Adjusted Consistent organic EBITDA margin Reduce Leverage sales growth expansion 2023 PFG / CAG NY 33
Slide 34: Patrick Hatcher, EVP & CFO
PATRICK HATCHER E x e c ut iv e Vic e P r e s ide nt & C h ie f F in a n c ia l O ffic e r 2023 PFG / CAG NY 34
Slide 35: Our Focus
OUR FOCUS Driving sales and market share position across all channels in which we currently participate Margin expansion through improving product and customer mix (private brands, independent customers), and operational efficiencies Advancements in technology to meet customer and supplier nee
Slide 36: Consistent Sales Growth
CONSISTENT SALES GROWTH PFG Total Dollar Sales ($ millions) $50,894 $30,399 $25,086 $19,744 $17,620 2018 2019 2020 2021 2022 2023 PFG / CAG NY 36
Slide 37: Adjusted EBITDA Margin Expansion
ADJUSTED EBITDA MARGIN EXPANSION 2.2% 1.9% 2Q22 2Q23 *For reconciliation of net income to Adjusted EBITDA, please refer to the Appendix 2023 PFG / CAG NY 37
Slide 38: Leverage Reduction
LEVERAGE REDUCTION PFG Total Leverage* 4.7x 4.2x 4.0x 3.4x 3.3x 2Q22 3Q22 4Q22 1Q23 2Q23 *Defined as Net debt/Training 12 month Adjusted EBITDA 2023 PFG / CAG NY 38
Slide 39: Disciplined Use of Capital
DISCIPLINED USE OF CAPITAL Capital Investments to Support Growth Facility expansions Annual Capex $216 Strategic M&A $ Millions $189 $158 Reduce Leverage $140 $140 $139 $120 $99 Share Repurchase Authorization 0.7% 0.8% 0.8% 0.6% 0.7% 0.6% 0.6% 0.4% FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 % o
Slide 40: Disciplined M&A Strategy
DISCIPLINED M&A STRATEGY ALIGNED TO MARKET DYNAMICS Insights-driven Opportunistic Customer-centric GROWTH ORIENTED Geographic expansion Channel growth Scale M&A Approach COMPELLING STRATEGIC FIT Financially disciplined Operational upside Culturally compatible 2023 PFG / CAG NY 40
Slide 41: Track Record of Successful M&A
TRACK RECORD OF SUCCESSFUL M&A Recent M&A on or ahead of expectations Integration Synergy Capture ahead of schedule More Opportunity Ahead
Slide 42: Ranking Above the Competition
RANKING ABOVE THE COMPETITION Ease of Doing Business Personal Relationship Support Responsiveness Business Relationship 6.0 6.5 7.0 7.5 8.0 8.5 9.0 Sources: wRatings 2023 2023 PFG / CAG NY 42
Slide 43: Ranking Above the Competition
RANKING ABOVE THE COMPETITION Food Quality Value Overall Food & Operating Safety Food Variety Insights & Innovation 6.0 6.5 7.0 7.5 8.0 8.5 9.0 Sources: wRatings 2023 2023 PFG / CAG NY 43
Slide 44: Customer First Digital Ordering Platform
CUSTOMER FIRST DIGITAL ORDERING PLATFORM 1) MAKE IT PROFITABLE 2) MAKE IT SMART 3) MAKE IT EASY Customers order Customers will more and have a move to the online better experience Larger Additional platform Basket Size Users Major Components Reduced Endless Customers are less Customer Products from
Slide 45: Reiterating 2023 Guidance
REITERATING 2023 GUIDANCE Fiscal 3Q 2023 Full Year Fiscal 2023 Net sales: Net sales: $13.7 to $14.0 billion $57 to $59 billion. Adjusted EBITDA: Adjusted EBITDA: $270 to $290 million $1.27 to $1.35 billion 2023 PFG / CAG NY 45
Slide 46: Three Year Targets
THREE YEAR TARGETS 3-YEAR SALES 3-YEAR ADJ EBITDA Annual Net Revenue of Annual Adj EBITDA of $62 billion to $64 billion $1.5 to $1.7 billion in in fiscal 2025 fiscal 2025 *Assumes cigarette dollar sales roughly flat through 2025 2023 PFG / CAG NY 46
Slide 47: Meeting Takeaways
MEETING TAKEAWAYS Customer Centric Culture Significant Addressable Market Opportunity Diverse channel model provides resiliency 1 2 3 Ongoing Adjusted Consistent organic EBITDA margin Reduce Leverage sales growth expansion 2023 PFG / CAG NY 47
Slide 48: Performance Food Group
Performance Food Group
Slide 49: Appendix
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Slide 50: Statement Regarding Non-GAAP Financial Measures
STATEMENT REGARDING NON-GAAP FINANCIAL MEASURES This presentation includes certain non-GAAP financial measures, including Adjusted EBITDA. These metrics have important limitations and should not be considered in isolation or as a substitute for measures of our financial performance or liquidity pr
Slide 51: Non-GAAP Financial Measures: Adjusted EBITDA Reconciliation
NON-GAAP FINANCIAL MEASURES ADJUSTED EBITDA RECONCILIATION Three Months Ended (in millions) December 31, 2022 January 1, 2022 Net income (GAAP) $71.1 $8.4 Interest expense, net 55.7 45.2 Income tax expense 25.1 3.0 Depreciation 77.4 70.4 Amortization of intangible assets 47.8 46.1 A Change in LIFO r
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