Sysco Corporation · NYSE:SYY
Sysco — Q2 FY2015 Earnings Presentation
21 slides from Sysco's earnings presentation, Feb 2, 2015
Slide 1: Sysco 2Q15 Earnings Results
Sysco 2Q15 Earnings Results February 2, 2015
Slide 2: Forward-Looking Statements
Forward-Looking Statements Forward-Looking Statements Statements made in this press release or in our earnings call for the second quarter of fiscal 2015 that look forward in time or that express management’s beliefs, expectations or hopes are forward-looking statements within the meaning of the Pri
Slide 3: 2Q15 Highlights
2Q15 Highlights Adjusted1 Reported $M, except per share YOY % YOY % 2Q15 2Q15 data Change Change Sales $12,087 7.6% $12,087 7.6% Gross Profit $2,085 6.1% $2,085 6.1% Operating $1,689 6.8% $1,770 9.7% Expenses Operating $396 3.1% $315 (10.3%) Income Net Earnings $245 5.5% $158 (25.1%) Diluted EPS $0.
Slide 4: Restaurant Spend and Traffic Increase
Restaurant Spend and Traffic Increase Restaurant Spend/Traffic (1) U.S. Retail Data(2) % Change vs. Year Ago % Change vs. Year Ago 4.0% 10.0% 3.2% 3.1% 2.9% 8.2% 3.0% 2.7% 2.5% 8.0% 2.4% 2.1% 2.2% 2.1% 1.9% 2.0% 2.0% 1.7% 6.0% 0.9% 1.0% 4.0% 0.0% 3.2% 2.0% -1.0% -2.0% 0.0% Retail & Food Svcs. Restau
Slide 5: Business Transformation Progress
Business Transformation Progress Continued focus on merger integration planning Technology SAP focus is now on support functions/SBS including Finance, Accounting and HR All categories to be launched into the market by the Lower Product Costs end of FY15 Total annual spend in scope of $15B
Slide 6: US Foods Merger Update
US Foods Merger Update Definitive agreement to sell 11 US Foods facilities to Performance Food Group, contingent on consummation of the proposed merger We believe this divestiture package fully addresses FTC concerns At this time, the FTC has not agreed to this solution Sysco will now presen
Slide 7: Key Takeaways
Key Takeaways Encouraged by solid performance in 2Q15 and progress in implementing portfolio of business transformation initiatives Business environment remains extremely competitive We have many opportunities to enhance customer experience, strengthen operating performance and increase profit
Slide 8: 2Q15 Financial Highlights
2Q15 Financial Highlights Adjusted1 Reported $M except per share YOY % YOY % 2Q15 2Q15 data Change Change Sales $12,087 7.6% $12,087 7.6% Gross Profit $2,085 6.1% $2,085 6.1% Operating $1,689 6.8% $1,770 9.7% Expenses Operating $396 3.1% $315 (10.3%) Income Net Earnings $245 5.5% $158 (25.1%) Dilute
Slide 9: Inflation Contributed Significantly to Sales Growth
Inflation Contributed Significantly to Sales Growth Sales and Case Growth Sysco’s Estimated Product Cost 10.0% 7.0% Inflation 6.0% 9.0% 6.0% 8.0% 7.6% 4.9% 5.0% 7.0% 6.2% 4.1% 5.7% 5.9% 6.0% 4.0% 5.0% 4.1% 3.0% 4.0% 3.2% 2.1% 3.0% 2.0% 3.3% 2.0% 2.7% 0.8% 0.9% 2.3% 1.0% 2.1% 2.2% 1.0% 1.8% 0.0% 0.0%
Slide 10: Improving Gross Profit Performance Trend
Improving Gross Profit Performance Trend YOY % Change in Gross Profit $ and Gross Margin (Bps) 10.0% 1.0% 9.0% 0.8% 8.0% 0.6% Gross profit increased 6.1% to $ 12.1 billion 7.0% 0.4% 6.0% 6.1% 6.0% 0.2% Gross margin declined 5.0% 0.0% 23 bps to 17.25% 4.0% 4.0% -0.2% 3.0% 2.7% -0.4% 1.8% 2.0% -0.
Slide 11: 2Q15 Operating Expenses
2Q15 Operating Expenses Reported operating expense +9.7% Adjusted1 operating expense +6.8% (+4.2% excl. incentive accrual adj.) Cost per case2 increased $0.08/case YOY change (in $ millions) $6 $48 $115 $1,770 $1,613 2Q14 Payroll Certain Other 2Q15 Items 1 See Non-GAAP reconciliations at the e
Slide 12: Cash Flow
Cash Flow ($M) 1H FY15 1H FY14 % Chg Cash Flow from Operations $452 $458 (1%) Capital Expenditures, net1 ($296) ($247) 20% Free Cash Flow2 $157 $211 (26)% Adjusted Free Cash Flow3 $324 $217 50% Dividends Paid $341 $328 4% 1) Capital expenditures are net of proceeds from sales of plant and equipment
Slide 13: Strategic Investments in Capital Expenditures
Strategic Investments in Capital Expenditures ($M) Gross Capex - 1H FY15 ($M) ($M) Net Capex $350 $200 $298 $175 $300 $270 $150 $250 $125 $200 $100 $150 $75 $100 $50 $50 $25 $0 $0 FY14 FY15 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 Facilities Fleet IT-Other IT-Merg. int. plan. Net Increase in capital spend du
Slide 14: US Foods Merger Update
US Foods Merger Update Announced definitive agreement to sell to Performance Food Group 11 US Foods operating locations representing $4.6 billion in annual sales Sysco would receive $850 million in cash in return from PFG Integration planning work has enabled us to refine and enhance confidenc
Slide 15: Good things
Good things Sysco
Slide 16: Non-GAAP Reconciliations
Non-GAAP Reconciliations 16
Slide 17: Non-GAAP Reconciliations
Non-GAAP Reconciliations Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items (In Thousands, Except for Share and Per Share Data) Sysco’s results of operations are impacted by certain items which include multiemployer withdrawal charges (MEP
Slide 18: Non-GAAP Reconciliations
Non-GAAP Reconciliations Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items (In Thousands, Except for Share and Per Share Data) 13-Week 13-Week 13-Week 13-Week Period Ended Period Ended Period Change Period Dec. 27, 2014 Dec. 28, 2013 in D
Slide 19: Non-GAAP Reconciliations
Non-GAAP Reconciliations Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items (In Thousands, Except for Share and Per Share Data) 26-Week 26-Week 26-Week 26-Week Period Ended Period Ended Period Change Period Dec. 27, 2014 Dec. 28, 2013 in D
Slide 20: Non-GAAP Reconciliations
Non-GAAP Reconciliations Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items and Management Incentive Accruals (In Thousands) Sysco’s results of operations are impacted by Certain Items as noted in previous non-GAAP reconciliations. Our ope
Slide 21: Non-GAAP Reconciliations
Non-GAAP Reconciliations Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Free Cash Flow and Adjusted Free Cash Flow (In Thousands) Free cash flow represents net cash provided from operating activities less purchases of plant and equipment and includes proceeds