Sysco Corporation · NYSE:SYY
Sysco — Q3 2019 Earnings Presentation
25 slides from Sysco's earnings presentation
Slide 1: Sysco Earnings Results 3Q19
SYSCO EARNINGS RESULTS 3Q19
Slide 2: Forward Looking Statements
Forward Looking Statements Statements made in this presentation or in our earnings call for the third quarter of fiscal 2019 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 Re
Slide 3: Tom Bené, Chairman, President & CEO
Tom Bené Chairman, President & CEO 3
Slide 4: Our Four Strategic Priorities Will Accelerate Our Current Growth and Position Us Well for the Future
OUR FOUR STRATEGIC PRIORITIES WILL ACCELERATE OUR CURRENT GROWTH AND POSITION US WELL FOR THE FUTURE 4
Slide 5: Sysco Reported Improved Year-over-Year Results for the Quarter
SYSCO REPORTED IMPROVED YEAR-OVER-YEAR RESULTS FOR THE QUARTER 1 Total Sysco 3Q19 Sales $14.7B 2.2% Adj. Operating Income $620.2M 16.6% Adj. EPS $0.79 17.4% 1 See Non-GAAP reconciliations at the end of the presentation. 5
Slide 6: 3Q19 Financial Highlights by Segment
3Q19 FINANCIAL HIGHLIGHTS BY SEGMENT U.S. Foodservice Operations International Foodservice Operations $MM, except per share $MM, except per share 3Q19 YoY % Change 3Q19 YoY % Change data data Sales $10,105 4.1% Sales $2,758 (1.5%) Gross Profit $2,009 5.1% Gross Profit $565 (3.1%) Adj. Operating Expe
Slide 7: We Recently Acquired J&M Wholesale Meats and Imperio Foods
WE RECENTLY ACQUIRED J & M WHOLESALE MEATS AND IMPERIO FOODS Further extends our reach into the important Hispanic customer segment • J&M Meats is a foodservice distributor that specializes in key center of the plate products • Imperio Foods carries dry, canned good products • The acquisition of the
Slide 8: U.S. Foodservice Operations Delivered Solid Third Quarter Results
U.S. FOODSERVICE OPERATIONS DELIVERED SOLID THIRD QUARTER RESULTS U.S. Foodservice Operations 3Q19 1 Sales $10.1B 4.1% Gross Profit $2.0B 5.1% Adj. OPEX1 $1.2B 2.3% Adj. Operating Income1 $768.4M 10% 1 See Non-GAAP reconciliations at the end of the presentation. 8
Slide 9: Improved Gross Profit Growth, Driven by Category Management, Sysco Brand and Inbound Freight
IMPROVED GROSS PROFIT GROWTH, DRIVEN BY CATEGORY MANAGEMENT, SYSCO BRAND AND FAVORABLE INBOUND FREIGHT COMPARISONS Total Sysco 3Q19 CATEGORY INBOUND SYSCO BRAND MANAGEMENT FREIGHT Gross Profit $2.8B 2.9% 3Q18 46% of Local cases +28 bps 9
Slide 10: Guest Supply Has Restructured Into Three Business Units Under the Name Guest Worldwide
GUEST SUPPLY HAS RESTRUCTURED INTO THREE BUSINESS UNITS UNDER THE NEW NAME OF GUEST WORLDWIDE Serves top hotel chains and independent Our amenity One of the properties in over manufacturing world’s leading 100 countries as unit textile producers a full-spectrum distribution solution provider We are
Slide 11: Summary
SUMMARY Customer and Engaging our operational 67,000 dedicated Continue to feel strategies are associates good about the firmly aligned around the world fundamentals of our around to deliver against business enriching our our financial customers’ objectives experience associated with our three-year
Slide 12: Joel Grade, EVP & CFO
Joel Grade EVP & CFO 12
Slide 13: 3Q19 Financial Highlights
3Q19 FINANCIAL HIGHLIGHTS $MM, except per share data 3Q19 YoY % Change Sales $14,658 2.2% Gross Profit $2,754 2.9% Adj. Operating Expense1 $2,134 (0.4%) Adj. Operating Income1 $620 16.6% Adj. Net Earnings1 $411 15.6% Adj. Diluted EPS1 $0.79 17.4% 1 See Non-GAAP reconciliations at the end of the pres
Slide 14: Our Transformative Initiatives Are Progressing Well and Will Continue to Create Value
OUR TRANSFORMATIVE INITIATIVES ARE PROGRESSING WELL AND WILL CONTINUE TO CREATE VALUE Finance This initiative increases centralization and standardization of our end- Transformation to-end global processes and workflow and utilizes digital automation Roadmap on a modern finance platform to improve e
Slide 15: Operating Performance 3Q19
OPERATING PERFORMANCE Total Sysco Adj. Operating Leverage1 7.0% 7 Quarter 1 3Q19 1,2 5.7% 5.5% 5.6% Average 5.0% 3.8% 3.9% 5.0% 5.4% 2.7% 2.9% 3.0% 3.4% 3.6% 1.0% 2.7% 2.1% 2.9% 4.2% -1.0% -0.4% -3.0% -0.4% 3.2% 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 GP growth OPEX growth … Although it will vary from qu
Slide 16: Fiscal 2019 Year-to-Date Cash Flow
FISCAL 2019 YEAR-TO-DATE CASH FLOW 1ST 39 1ST 39 WEEKS OF WEEKS OF FY181 FY191 Cash from Ops $1.12B $1.37B $244.3M Free Cash Flow $765.2M $1.00B $233.5M 1 See Non-GAAP reconciliations at the end of the presentation. 16
Slide 17: Business Updates 3Q19
BUSINESS UPDATES 3Q19 • GAAP tax rate impacted primarily by Foreign Tax Credits generated as a result of distributions to Sysco from our foreign operations at the end of fiscal 2018 • With anticipated sale of Iowa Premium, we expect to achieve our adjusted operating income growth target at the low e
Slide 18: Summary
SUMMARY We have more work to do in We are order to achieve committed to We saw improved the financial serving our year-over-year objectives of our customers and results for the third three-year plan, delivering at a quarter and we remain high level of confident in our execution in all ability to are
Slide 19: Non-GAAP Reconciliations
Non-GAAP Reconciliations 19
Slide 20: Impact of Certain Items
IMPACT OF CERTAIN ITEMS Our discussion below of our results includes certain non-GAAP financial measures that we believe provide important perspective with respect to underlying business trends. Other than free cash flow, any non-GAAP financial measures will be denoted as adjusted measures and exclu
Slide 21: Impact of Certain Items, 3Q19
IMPACT OF CERTAIN ITEMS, 3Q19 Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items (In Thousands, Exc ept for Share and Per Share Data) 13-Week 13-Week Period Ended Period Ended Period Change Period Mar. 30, 2019 Mar. 31, 2018 in Dollars % C
Slide 22: Impact of Certain Items, 3Q19 (Segment)
IMPACT OF CERTAIN ITEMS, 3Q19 (SEGMENT) Sysco Corporation and its Consolidated Subsidiaries Segment Results Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Applicable Segments (In Thousands, Except for Share and Per Share Data) 13-Week 13-Week Period Ended Period Ended Period Change P
Slide 23: Adjusted Operating Leverage
ADJUSTED OPERATING LEVERAGE Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Total Sysco Operating Leverage (impact of Certain Items) (In Thousands) (a) 7 quarter average gross profit (GAAP) 4.2% (b) 7 quarter average operating expenses (GAAP) 3.7% (c) 7 quarte
Slide 24: Adjusted Operating Leverage (Continued)
ADJUSTED OPERATING LEVERAGE (CONTINUED) 13-Week Period 13-Week 13-Week 13-Week 13-Week 13-Week 13-Week 13-Week Ended Period Ended Period Change Period Period Ended Period Ended Period Change Period Jun. 30, 2018 Jul. 1, 2017 in Dollars % Change Mar. 31, 2018 Apr. 1, 2017 in Dollars % Change Gross pr
Slide 25: 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