Slide 1: Sysco Fiscal Q3 2024 Earnings Results
April 30, 2024 Sysco Fiscal Q3 2024 Earnings Results
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 under the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the views of manage
Slide 3: Kevin Hourican, Chair and Chief Executive Officer
KEVIN HOURICAN Chair of the Board and Chief Executive Officer
Slide 4: Food Supply Chain Food Sales & Marketing
Food Supply Chain Food Sales & Marketing
Slide 5: Q3: EPS Growth Driven by Positive Operating Leverage
Q3: EPS Growth Driven by Positive Operating Leverage Fiscal Q3 2024 Highlights +2.7% +5.2% +8.4% +6.7% Revenue growth to $19.4 Gross profit dollar growth to Adjusted operating income1,2 Adjusted EPS1 growth to $0.96 billion $3.6 billion growth to $799.3 million +44 bps +8.5% $753 million $120 millio
Slide 6: Sysco is the Backbone of the Food Away From Home Industry
Sysco is the Backbone of the Food Away From Home Industry and Growing Share FY2023 Total Sysco Sales 8% Travel and Leisure 15% Other 7% Healthcare 62% Restaurants 8% Education and Government $76.3B ~725K In Annual Sales Customer Locations Operations IFG ~7,500 72K+ Colleagues Across Sales Profession
Slide 7: Our Recipe for Growth
Our Recipe for Growth Sysco Is a Purpose-Driven Organization, Defining the Future of Our Industry PURPOSE | Our Why MISSION | Our What IDENTITY | Our Role Connecting the World to Delivering success for our Together we define the future of Share Food and Care for One customers through industry-leadin
Slide 8: Aggressive Action to Drive Positive, Consistent Local Case Performance
Aggressive Action to Drive Positive, Consistent Local Case Performance Sales Force Performance Sales Total Team Hiring Management Compensation Selling • Planned net increase • Increased focus on • Recently introduced • Growing wallet of ~400 sales new customer compensation model share through profes
Slide 9: Ongoing Operating Leverage Driven by Gross Margins and Expense Management
Ongoing Operating Leverage Driven by Gross Margins and Expense Management Gross Profit Adj. Operating Expense1,2 Adj. Operating Income1,2 Overview (billions) (billions) (millions) • Sixth consecutive quarter of +5.2% +4.3% +8.4% positive operating leverage YoY YoY YoY with gross profit growing faste
Slide 10: Market Leader in the Highly Fragmented and Growing Foodservice Distribution Industry
Market Leader in the Highly Fragmented and Growing Foodservice Distribution Industry Total Addressable Market Since 2000 $353 B $360 B 17% $300 B $268 B $224 B $231 B $197 B $161 B $360 B 2000 2005 2010 2015 2020 2021 2022 2023 10 Technomic U.S. Foodservice Industry Wallchart for Calendar Year, upda
Slide 11: Food Away From Home Continues to Gain Share
Food Away From Home Continues to Gain Share Percentage of Combined Monthly Sales (2001 - 2024) 70% 65% 60% 55% 50% 45% 40% 35% 30% Grocery Stores Food Services and Drinking Places The United States Census Bureau Advance Monthly Sales for Retail and Food Services 11
Slide 12: Kenny Cheung, Chief Financial Officer
Kenny Cheung Chief Financial Officer
Slide 13: Q3 2024 Consolidated Financial Results
Q3 2024 Consolidated Financial Results Net Sales Adj. EBITDA1 Adj. EPS1 (billions) (millions) Overview +6.7% +2.7% +8.5% YoY YoY YoY • Sales increased 2.7% to $19.4 billion $0.96 versus the prior year $977 $0.90 $19.4 $18.9 • USFS +3.4% $900 • International +4.5% • Product inflation +1.9% for the to
Slide 14: Q3 2024 U.S. Foodservice Results
Q3 2024 U.S. Foodservice Results Net Sales Adj. Operating Overview (billions) Income1,2 • Sales of $13.7 billion grew 3.4% (millions) versus the prior year +3.4% YoY +0.7% • Total case volume grew 2.9%, while YoY $13.7 local case volume increased 0.4% $13.3 $869 $875 • Gross profit dollars increased
Slide 15: Q3 2024 International Results
Q3 2024 International Results Net Sales Adj. Operating Overview (billions) Income1,2 (millions) • Sales increased 4.5%, or 2.4% on a constant currency basis1 +4.5% YoY +63.4% YoY • Gross profit dollars increased 12.0% $3.5 $109 to $720 million, or 9.5% to $704 $3.3 million on a constant currency bas
Slide 16: Q3 2024 SYGMA Results
Q3 2024 SYGMA Results SYGMA Operating Overview Net Sales (billions) Income2 • Sales of $1.9 billion decreased 3.5% -3.5% (millions) versus the prior year YoY -$8.8 Million • Gross profit dollars decreased 7.7% to $2.0 YoY $153 million $1.9 $26 • Gross margin of 8.0% decreased 37 bps • Operating expe
Slide 17: Strong Balance Sheet, Strong Investment Grade Credit Rating
Strong Balance Sheet, Strong Investment Grade Credit Rating Net Debt to Adj. EBITDA1 Overview • Only food distributor with a strong investment grade credit rating 5.15x • Ended the quarter with net debt to adjusted EBITDA ratio1 of 2.81x; Expect to end FY24 within the net debt to adjusted EBITDA rat
Slide 18: Year-to-Date 2024 Cash Flow
Year-to-Date 2024 Cash Flow Cash From Operations Free Cash Flow1 Overview (billions) (millions) • Cash flow from operations was $1.37 billion, a 3.7% decrease $980 • Capital expenditures, net of $1.4 $1.4 proceeds from sales of plant and $864 equipment, were $509 million, with continued investments
Slide 19: Capital Structure and Allocation
Capital Structure and Allocation Investment Priority Progress • Capital investments in our technology, fleet and buildings • Targeting 50-100 bps of average growth annually from M&A; integration of Edward Don business progressing 1 Invest for Growth • as planned Strong pipeline of tuck-in acquisitio
Slide 20: Strong Cash Generation Drives Shareholder Returns
Strong Cash Generation Drives Shareholder Returns Cumulative Cash Returned to Shareholders $17.2 B $15.0 B $13.5 B $12.0 B $11.1 B $9.4 B $7.6 B $5.9 B $3.3 B $0.7 B FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 (Expected) Dividends Shares Repurchased Over $17 Billion of Cash
Slide 21: Investment Thesis: Sysco is Leading the Industry and Accelerating Growth
Investment Thesis Sysco is Leading the Industry and Accelerating Growth Healthy Balance Sheet: Supporting our customer’s Expect to grow meaningfully only Investment-Grade needs while partnering with faster than the total market Food Service Distributor suppliers on specific goals Focused on ROIC and
Slide 22: At the heart of food and service
S/sco At the heart of food and service
Slide 23: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS food and service
Slide 24: Impact of Certain Items
Impact of Certain Items The discussion of our results includes certain non-GAAP financial measures, including EBITDA and adjusted EBITDA, that we believe provide important perspective with respect to underlying business trends. Other than EBITDA and free cash flow, any non-GAAP financial measures wi
Slide 25: Non-GAAP Reconciliation: Impact of Certain Items, Q3 FY24 vs. Q3 FY23
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items, Q3 FY24 vs. Q3 FY23 (Dollars in Thousands, Except for Share and Per Share Data) 13-Week 13-Week Period Ended Period Ended Change Mar. 30, 2024 Apr. 1, 2023 in Dollars %/bps Change Sales (
Slide 26: Non-GAAP Reconciliation: Impact of Certain Items, continued
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items, Q3 FY24 vs. Q3 FY23 (Dollars in Thousands, Except for Share and Per Share Data) continued Operating margin (GAAP) 3.73% 3.69% 4 bps Operating margin adjusted for Certain Items (Non-GAAP)
Slide 27: Segment Results Non-GAAP Reconciliation
Sysco Corporation and its Consolidated Subsidiaries Segment Results Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Applicable Segments, Q3 FY24 vs. Q3 FY23 (Dollars in Thousands) 13-Week 13-Week Period Ended Period Ended Change Mar. 30, 2024 Apr. 1, 2023 in Dollars %/bps Change U.S.
Slide 28: Segment Results Non-GAAP Reconciliation, continued
Sysco Corporation and its Consolidated Subsidiaries Segment Results Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Applicable Segments, Q3 FY24 vs. Q3 FY23 (Dollars in Thousands) continued OTHER Sales (GAAP) $ 275,238 $ 301,978 $ (26,740) -8.9% Gross Profit (GAAP) $ 71,030 $ 79,451 $
Slide 29: Free Cash Flow, YTD24 vs. YTD23
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Free Cash Flow, YTD24 vs. YTD23 (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.
Slide 30: Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) EBITDA represents net earnings (loss) plus (i) interest expense, (ii) income tax expense and benefit, (iii) depreciation and (iv) amortization. The net earnings (loss) component of our EBITDA calculation is impacted by Certain I
Slide 31: Impact of Certain Items on EBITDA (Q3 FY24 vs. Q3 FY23)
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Earnings Before Interest, Taxes, Depreciation and Amortization (Q3 FY24 vs. Q3 FY23) (In Thousands) 13-Week 13-Week Period Ended Period Ended Change Mar. 30, 2024 Apr. 1, 2023 in Dollar
Slide 32: Projected Adjusted EBITDA Guidance
Projected Adjusted EBITDA Guidance Adjusted EBITDA is a non-GAAP financial measure; however, we cannot predict with certainty the particular certain items that would be excluded from the calculation of this measure for future periods. Due to these uncertainties, we cannot provide a quantitative reco
Slide 33: Net Debt to Adjusted EBITDA (March 30, 2024)
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Net Debt to Adjusted EBIDTA (In Thousands) Net Debt to Adjusted EBITDA is a non-GAAP financial measure frequently used by investors and credit rating agencies. Our Net Debt to Adjusted EBITDA ratio is calculated
Slide 34: Net Debt to Adjusted EBITDA (April 1, 2023)
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Net Debt to Adjusted EBIDTA (In Thousands) Net Debt to Adjusted EBITDA is a non-GAAP financial measure frequently used by investors and credit rating agencies. Our Net Debt to Adjusted EBITDA ratio is calculated
Slide 35: Net Debt to Adjusted EBITDA (March 27, 2021)
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Net Debt to Adjusted EBIDTA (In Thousands) Net Debt to Adjusted EBITDA is a non-GAAP financial measure frequently used by investors and credit rating agencies. Our Net Debt to Adjusted EBITDA ratio is calculated
Slide 36: Net Debt to Adjusted EBITDA Leverage Ratio Targets
Net Debt to Adjusted EBITDA Leverage Ratio Targets We expect to achieve our net debt to adjusted EBITDA leverage ratio forecast in fiscal 2024. We cannot predict with certainty when we will achieve these results or whether the calculation of our EBITDA will be on an adjusted basis in future periods