Slide 1: Sysco 4Q and FY20 Earnings Results
Sysco 4Q and FY20 Earnings Results August 11
Slide 2: Forward Looking Statements
Forward Looking Statements Statements made in this presentation or in our earnings call for the fourth quarter of fiscal 2020 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 R
Slide 3: Kevin Hourican, President & CEO
KEVIN HOURICAN President & CEO
Slide 4: Sysco is Undertaking a Bold Transformation
Sysco is Undertaking a Bold Transformation That Will Improve Service for Our Customers, Differentiate Us From Our Competitors, and Transform the Industry The exit rate of Fiscal 2020 was profitable and better than expected Sysco is profitable at a sales decline of approximately 30%; expect improved
Slide 5: Swift and Decisive Action After Onset of the Pandemic
Immediately After the Onset of the Pandemic, Sysco Took Swift and Decisive Action Strengthen Overall Liquidity Stabilize our Business Create New Sources of Revenue Transform our Business 5
Slide 6: Sysco is Leveraging the Crisis to Transform Our Company
Sysco is Leveraging the Crisis to Transform Our Company Accelerate Digital Platforms Sales Transformation Regionalization Structural Cost Out 6
Slide 7: Accelerating Our Work to Become a More Digitally Enabled Company
Accelerating Our Work to Become a More Digitally Enabled Company Improving Sysco Shop search function and order function capabilities Deploying a digital pricing tool Expanding effectiveness of sales tools 7
Slide 8: Transforming Our Sales Model to Make it Easier for Customers
Transforming Our Sales Model to Make it Easier for Customers to Do Business With Sysco Aligning sales incentives with business objectives Increasing collaboration across our sales teams Adding more sales specialists 8
Slide 9: Structural Cost Out Will Improve Profitability
Structural Cost Out Will Improve Profitability and be a Funding Mechanism for Future Growth Identifying and delivering $350 million of annualized structural/permanent cost removal Leveraging savings to become a more efficient company Investing in future growth 9
Slide 10: Sysco is Well Positioned for Current and Future Success
Sysco is Well Positioned for Current and Future Success Sysco entered this crisis in a position of strength We are doing more to ensure our customers are successful Our transformation initiatives are paving the path for long-term share gains 10
Slide 11: Joel Grade, EVP & CFO
a. JOEL GRADE EVP & CFO
Slide 12: 4Q20 Total Sysco Results
4Q20 Total Sysco Results Total Sysco 4Q20 Sales $8.9B 42.7% 1 Gross Profit $1.6B 47.4% 1 Adj. Operating (Loss) Income ($34M) 104.1% 1 Adj. (Loss) EPS ($0.29) 126.4% 1 See Non-GAAP reconciliations at the end of the presentation. 12
Slide 13: 4Q20 U.S. Foodservice Results
4Q20 U.S. Foodservice Results U.S. Foodservice 4Q20 Sales $6.1B 42.8% Gross Profit $1.2B 45.7% 1 Adj. Operating Expenses $1.0B 24.4% 1 Adj. Operating Income $165M 80.0% 1 See Non-GAAP reconciliations at the end of the presentation. 13
Slide 14: 4Q20 International Results
4Q20 International Results 4Q20 International 4Q20 3Q20 1 Constant Currency Sales $1.4B 53.4% $1.4B 51.9% Gross Profit1 $263M 57.7% $271M 56.4% 1 Adj. Operating Expenses $333M 33.8% $344M 31.6% Adj. Operating (Loss) Income1 ($70M) 159.2% ($73M) 162.0% 1 See Non-GAAP reconciliations at the end of the
Slide 15: 4Q20 SYGMA Results
4Q20 SYGMA Results SYGMA 4Q20 Sales $1.3B 16.8% Gross Profit $114M 11.2% 1 Adj. Operating Expenses $103M 11.1% 1 Adj. Operating Income $11M 11.9% 1 See Non-GAAP reconciliations at the end of the presentation. 15
Slide 16: FY20 Total Sysco Results
FY20 Total Sysco Results Total Sysco FY20 Sales $52.9B 12.0% 1 Gross Profit $9.9B 13.2% 1 Adj. Operating Income $1.7B 37.4% 1 $2.01 Adj. EPS 43.4% 1 See Non-GAAP reconciliations at the end of the presentation. 16
Slide 17: COVID-19 Business Update
COVID-19 Business Update Within the U.S., our customer mix has impacted the pace of demand return for Sysco European business impact occurred earlier in the crisis and the declines were initially steeper, but our business has since improved Canada has performed similarly to the U.S. and we are encou
Slide 18: Consecutive Weeks of Positive Free Cash Flow
We Had 10 Consecutive Weeks of Positive Free Cash Flow Through the End of the Fourth Quarter FY19 FY20 Cash from Ops $2.4B $1.6B $0.8B Free Cash Flow1 $1.7B $0.9B $0.8B 1 See Non-GAAP reconciliations at the end of the presentation. 18
Slide 19: Sysco Has More Than $8B of Cash and Available Liquidity
Sysco Has More Than $8B of Cash and Available Liquidity Sysco is well positioned for current and future success Expect gross margins to reflect topline mix changes, but otherwise remain stable throughout fiscal 2021 $350 million run rate of annual cost removal Interest expense has risen during the c
Slide 20: Sysco: At the heart of food and service
S/sco At the heart of food and service
Slide 21: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS 21
Slide 22: Impact of Certain Items
Impact of Certain Items Sysco’s results of operations for fiscal 2020 and fiscal 2019 were impacted by restructuring and transformational project costs consisting of: (1) expenses associated with our various transformation initiatives; (2) severance and facility closure charges; and (3) restructurin
Slide 23: Impact of Certain Items, 4Q20
Impact of Certain Items, 4Q20 Non-GAAP Reconciliation (Unaudited) Impact of Certain Items (Dollars in Thousands, Except for Share and Per Share Data) 13-Week 13-Week Period Ended Period Ended Change June 27, 2020 June 29, 2019 in Dollars % Change Operating expenses (GAAP) $ 2,097,235 $ 2,258,662 $ (
Slide 24: Impact of Certain Items, 4Q20 (Segment)
Impact of Certain Items, 4Q20 (Segment) Sysco Corporation and its Consolidated Subsidiaries Segment Results Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Applicable Segments (Dollars in Thousands) 13-Week 13-Week Period Ended Period Ended Change June 27, 2020 June 29, 2019 in Dollar
Slide 25: Impact of Certain Items, 4Q20 (Segment Continued)
Impact of Certain Items, 4Q20 (Segment Continued)OTHER Sales Gross Profit Gross Margin $ 101,596 24,636 24.25% $ 305,920 73,783 24.12% $ (204,324) (49,147) -66.8% -66.6% 13 bps Operating expenses (GAAP) $ 46,483 $ 60,364 $ (13,881) -23.0% Impact of excess bad debt expense (4,478) - (4,478) NM Operat
Slide 26: Impact of Certain Items, FY20
Impact of Certain Items, FY20 Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items (Dollars in Thousands, Except for Share and Per Share Data) 52-Week 52-Week Period Ended Period Ended Change June 27, 2020 June 29, 2019 in Dollars % Change O
Slide 27: 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