Aramark · NYSE:ARMK

Aramark — Q4 2023 Earnings Presentation

48 slides from Aramark's earnings presentation, Nov 14, 2023

  1. Slide 1: Q4 and Full Year Fiscal 2023 Earnings Results

    Q4 and Full Year Fiscal 2023 Earnings Results NOVEMBER 14, 2023

  2. Slide 2: Forward-Looking Statements

    Forward-Looking Statements Special Note About Forward-Looking Statements This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect our current expectations as to future events based on certain assumpti

  3. Slide 3: Overview

    Overview 1 Strong Results in Q4 and Full Year FY23 2 Continued Momentum in Growth 3 Positioned for Success in FY24 and Beyond 3

  4. Slide 4: Delivering Strategic Milestones

    Delivering Strategic Milestones - Results reflect ongoing focus on growth across organization - Strength from net new business, pricing actions, and base business growth - Year-over-year AOI growth drives profitability trajectory - Continued momentum in Q4 with favorable near-term profit and margin

  5. Slide 5: Strong Progress Across Key Metrics in FY23

    Strong Progress Across Key Metrics in FY23 Organic Revenue Growth: +16% Global FSS: +18% Uniform Services: +5.5% Adjusted Operating Income Growth1: +34% Global FSS1: +46% Uniform Services1: +10% Free Cash Flow: $334M FICA Deferral: $64M Spin-off / restructuring costs: $72M Free Cash Flow Before Item

  6. Slide 6: Strong Progress Across Key Metrics in FY23

    Strong Progress Across Key Metrics in FY23 Revenue Adjusted Operating Income (AOI) $20,000 $1,200 $18,000 $1,000 $16,000 $14,000 $800 $12,000 $10,000 $600 $8,000 $400 $6,000 $4,000 $200 $2,000 $0 $0 FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 Revenue ($) Organic Revenue AOI ($) AOI Growth1 AOI

  7. Slide 7: Strong Progress Across Key Metrics in FY23

    Strong Progress Across Key Metrics in FY23 Free Cash Flow Leverage $500 8.0x $400 7.0x $300 6.0x $200 5.0x $100 4.0x $0 3.0x ($100) 2.0x ($200) 1.0x FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 Free Cash Flow Net Debt to Covenant Adjusted EBITDA Reported Debt Spin- Aramark Pre-Spin related2 Pos

  8. Slide 8: Continued Momentum in Q4

    Continued Momentum in Q4 ($21) $4,200 $4,180 $3,720 $256 +12% +33% Organic Growth $191 Growth1 Segment Revenue ($) Organic Revenue AOI ($) AOI Growth1 AOI Margin (%) AOI Margin bps Growth (%) Growth1 FSS United States $3,067 10.1% $234 24.1% 7.6% +86bps FSS International $1,134 18.9% $52 51.5% 4.6%

  9. Slide 9: Sustainable Step Change in Net New Business

    Sustainable Step Change in Net New Business Global FSS Annualized New Business Wins Retention Annualized Net New Business (in millions) (in millions) 95.8% $1,178 $1,187 95.6% 95.5% $582 $1,008 $564 $837 $441 94.4% $96 5-year Avg FY21 FY22 FY23 5-year Avg FY21 FY22 FY23* 5-year Avg FY21 FY22 FY23 (F

  10. Slide 10: …With Outsized Profit and Margin Drivers in Mid-Term

    …With Outsized Profit and Margin Drivers in Mid-Term FY24 FY25 FY26 New business contract maturity X X Recovery of price-inflation lag X Supply Chain (compliance / scale / new deals) X X X “Front Line Contribution” improvement X X X SG&A containment X X X 10

  11. Slide 11: Reminder: Quarterly Cadence of Global FSS AOI Margin

    Reminder: Quarterly Cadence of Global FSS AOI Margin Global FSS AOI Margin 7.0% 6.5% Historic “U-shaped” cadence driven primarily by higher profitability in Q1 and Q4 related to seasonal peak activity in Education sector 6.0% 6.1% and the Sports & Entertainment and Destinations businesses 5.5% 5.0%

  12. Slide 12: FY24 Outlook

    FY24 Outlook Aramark currently expects the following full-year performance for FY24: The Company provides its expectations for organic revenue growth, Adjusted Operating Income growth, Adjusted EPS growth, and Net Debt to Covenant Adjusted EBITDA (“Leverage Ratio”) on a non-GAAP basis, and does not

  13. Slide 13: Halftime Review: Progress in Global FSS Since Analyst Day

    “Halftime” Review: Progress in Global FSS Since Analyst Day (Dec. 2021) Revenue AOI AOI Margin $16,083 $743 4.7% 3.7% $13,687 $513 $9,675 $119 1.2% FY21 FY22 FY23 FY24 FY21 FY22 FY23 FY24 FY21 FY22 FY23 FY24 Outlook Outlook Outlook >78% Revenue Growth >620% AOI Growth >360bps AOI Margin Expansion $

  14. Slide 14: Halftime Review: Analyst Day FY25 Targets – Global FSS Assumptions

    “Halftime” Review: Analyst Day FY25 Targets – Global FSS Assumptions As reviewed in September 2023: Revenue AOI Margin Implied AOI $ Adjusted EPS Leverage Dec. 2021 >$17B 6.1%- 6.6% $1.035B-$1.125B n/a n/a Note: Adjusted EPS and Leverage reflected Total Company targets in Dec ’21 that were not broke

  15. Slide 15: Halftime Review: Current Timeline Expectations – Global FSS

    “Halftime” Review: Current Timeline Expectations – Global FSS As reviewed in September 2023: FY24 FY25 FY26 What’s Changed Since Dec. ‘21? Revenue Stronger net new business / pricing AOI Margin (a)(b) Stronger net new business / price-inflation lag AOI $ (a) Adj. EPS Interest rate +250bps Leverage N

  16. Slide 16: Takeaway: Expected Strong Trajectory Ahead

    Takeaway: Expected Strong Trajectory Ahead - Confidence in not only achieving objectives, but getting to and through… - Clear, consistent strategic priorities - Strong, sustainable growth framework with resources in place - Hospitality, client-oriented culture firmly entrenched - Focused on driving

  17. Slide 17: Reach For Remarkable

    Reach For Remarkable SERVICE. INNOVATION. GROWTH. aramark yr

  18. Slide 18: Appendix

    APPENDIX aramark 3 MA Reach For Remarkable SERVICE. INNOVATION. GROWTH.

  19. Slide 19: Modeling Assumptions

    Modeling Assumptions FY24 Modeling Assumptions • Net Interest Expense: ~$335M • Adjusted Tax Rate: ~26% • Share count: ~270M Seasonality: • AOI Margin – “U-shaped” cadence driven primarily by higher profitability in Q1 and Q4 related to seasonal peak activity in Education sector and the Sports & Ent

  20. Slide 20: Revenue by Segment

    Revenue by Segment Q1 '23 Q2 '23 Q3 '23 Q4 '23 FY23 Three Months Ended Change Three Months Ended Change Three Months Ended Change Three Months Ended Change Twelve Months Ended Change 12/30/22 12/31/21 % 3/31/23 4/1/22 % 6/30/23 7/1/22 % 9/29/23 9/30/22 % 9/29/23 9/30/22 % Revenue (as reported) FSS U

  21. Slide 21: CapEx and Client Payments

    CapEx and Client Payments ($ in thousands) Three Months Ended Three Months Ended Three Months Ended Three Months Ended Twelve Months Ended 12/30/22 12/31/21 3/31/23 4/1/22 6/30/23 7/1/22 9/29/23 9/30/22 9/29/23 9/30/22 Purchases of property and equipment and other $ 102,559 $ 73,722 $ 100,352 $ 99,3

  22. Slide 22: Net New Business by Segment

    Net New Business by Segment FSS United States Annualized New Business Wins Retention Annualized Net New Business (in millions) (in millions) 96.0% $779 95.8% 95.8% $735 $687 $355 $319 $517 $296 94.5% $(14) ($14) 5-year Avg FY21 FY22 FY23 5-year Avg FY21 FY22 FY23 (FY16-FY20) (FY16-FY20) 5-year Avg F

  23. Slide 23: Selected Operational and Financial Metrics

    Selected Operational and Financial Metrics Adjusted Revenue (Organic) Adjusted Revenue (Organic) represents revenue growth, adjusted to eliminate the effect of certain material acquisitions and divestitures, the estimated impact of the 53rd week and the impact of currency translation. Adjusted Opera

  24. Slide 24: Selected Operational and Financial Metrics (continued)

    Selected Operational and Financial Metrics (continued) Covenant Adjusted EBITDA Covenant Adjusted EBITDA represents net income attributable to Aramark stockholders adjusted for interest and other financing costs, net; provision for income taxes; depreciation and amortization and certain other items

  25. Slide 25: Post-Spin Reference Point Support

    Post-Spin Reference Point Support 25

  26. Slide 26: Global FSS FY23 AOI Post-Spin Reference Point – Q1

    Global FSS FY23 AOI Post-Spin Reference Point – Q1 ARAMARK AND SUBSIDIARIES RECONCILIATION OF NON-GAAP MEASURES GLOBAL FSS ADJUSTED CONSOLIDATED OPERATING INCOME MARGIN (Unaudited) (In thousands) Three Months Ended December 30, 2022 FSS United States FSS International Corporate Global FSS Items to R

  27. Slide 27: Global FSS FY23 AOI Post-Spin Reference Point – Q2

    Global FSS FY23 AOI Post-Spin Reference Point – Q2 ARAMARK AND SUBSIDIARIES RECONCILIATION OF NON-GAAP MEASURES GLOBAL FSS ADJUSTED CONSOLIDATED OPERATING INCOME MARGIN (Unaudited) (In thousands) Three Months Ended March 31, 2023 FSS United States FSS International Corporate Global FSS Items to Reba

  28. Slide 28: Global FSS FY23 AOI Post-Spin Reference Point – Q3

    Global FSS FY23 AOI Post-Spin Reference Point – Q3 ARAMARK AND SUBSIDIARIES RECONCILIATION OF NON-GAAP MEASURES GLOBAL FSS ADJUSTED CONSOLIDATED OPERATING INCOME MARGIN (Unaudited) (In thousands) Three Months Ended June 30, 2023 FSS United States FSS International Corporate Global FSS Items to Rebas

  29. Slide 29: Global FSS FY23 AOI Post-Spin Reference Point – Q4

    Global FSS FY23 AOI Post-Spin Reference Point – Q4 ARAMARK AND SUBSIDIARIES RECONCILIATION OF NON-GAAP MEASURES GLOBAL FSS ADJUSTED CONSOLIDATED OPERATING INCOME MARGIN (Unaudited) (In thousands) Three Months Ended September 29, 2023 FSS United States FSS International Corporate Global FSS Items to

  30. Slide 30: Global FSS FY23 AOI Post-Spin Reference Point – Full Year

    Global FSS FY23 AOI Post-Spin Reference Point – Full Year ARAMARK AND SUBSIDIARIES RECONCILIATION OF NON-GAAP MEASURES GLOBAL FSS ADJUSTED CONSOLIDATED OPERATING INCOME MARGIN (Unaudited) (In thousands) Fiscal Year Ended September 29, 2023 FSS United States FSS International Corporate Global FSS Ite

  31. Slide 31: Global FSS FY23 Adjusted EPS Post-Spin Reference Point – Q1

    Global FSS FY23 Adjusted EPS Post-Spin Reference Point – Q1 ARAMARK AND SUBSIDIARIES RECONCILIATION OF NON-GAAP MEASURES REBASED GLOBAL FSS ADJUSTED NET INCOME & ADJUSTED EARNINGS PER SHARE (Unaudited) (In thousands) Three Months Ended December 30, 2022 Aramark and Rebased Global Items to Rebase Sub

  32. Slide 32: Global FSS FY23 Adjusted EPS Post-Spin Reference Point – Q2

    Global FSS FY23 Adjusted EPS Post-Spin Reference Point – Q2 ARAMARK AND SUBSIDIARIES RECONCILIATION OF NON-GAAP MEASURES REBASED GLOBAL FSS ADJUSTED NET INCOME & ADJUSTED EARNINGS PER SHARE (Unaudited) (In thousands) Three Months Ended March 31, 2023 Aramark and Rebased Global Items to Rebase Subsid

  33. Slide 33: Global FSS FY23 Adjusted EPS Post-Spin Reference Point – Q3

    Global FSS FY23 Adjusted EPS Post-Spin Reference Point – Q3 ARAMARK AND SUBSIDIARIES RECONCILIATION OF NON-GAAP MEASURES REBASED GLOBAL FSS ADJUSTED NET INCOME & ADJUSTED EARNINGS PER SHARE (Unaudited) (In thousands) Three Months Ended June 30, 2023 Aramark and Rebased Global Items to Rebase Subsidi

  34. Slide 34: Global FSS FY23 Adjusted EPS Post-Spin Reference Point – Q4

    Global FSS FY23 Adjusted EPS Post-Spin Reference Point – Q4 ARAMARK AND SUBSIDIARIES RECONCILIATION OF NON-GAAP MEASURES REBASED GLOBAL FSS ADJUSTED NET INCOME & ADJUSTED EARNINGS PER SHARE (Unaudited) (In thousands) Three Months Ended September 29, 2023 Aramark and Rebased Global Items to Rebase Su

  35. Slide 35: Global FSS FY23 Adjusted EPS Post-Spin Reference Point – Full Year

    Global FSS FY23 Adjusted EPS Post-Spin Reference Point – Full Year ARAMARK AND SUBSIDIARIES RECONCILIATION OF NON-GAAP MEASURES REBASED GLOBAL FSS ADJUSTED NET INCOME & ADJUSTED EARNINGS PER SHARE (Unaudited) (In thousands) Fiscal Year Ended September 29, 2023 Aramark and Rebased Global Items to Reb

  36. Slide 36: Historical Trend Support

    Historical Trend Support aramark 3 MA Reach For Remarkable SERVICE. INNOVATION. GROWTH

  37. Slide 37: AOI Margin FY19

    AOI Margin FY19 ARAMARK AND SUBSIDIARIES RECONCILIATION OF NON-GAAP MEASURES ADJUSTED CONSOLIDATED OPERATING INCOME MARGIN (Unaudited) (In thousands) Fiscal Year Ended September 27, 2019 Aramark & FSS United States FSS International Uniform Corporate Subsidiaries Revenue (as reported) $ 9,898,568 $

  38. Slide 38: AOI Margin FY20

    AOI Margin FY20 ARAMARK AND SUBSIDIARIES RECONCILIATION OF NON-GAAP MEASURES ADJUSTED CONSOLIDATED OPERATING INCOME (LOSS) MARGIN (Unaudited) (In thousands) Fiscal Year Ended October 2, 2020 Aramark & FSS United States FSS International Uniform Corporate Subsidiaries Revenue (as reported) $ 7,366,67

  39. Slide 39: AOI Margin FY21

    AOI Margin FY21 ARAMARK AND SUBSIDIARIES RECONCILIATION OF NON-GAAP MEASURES ADJUSTED CONSOLIDATED OPERATING INCOME MARGIN (Unaudited) (In thousands) Fiscal Year Ended October 1, 2021 Aramark & FSS United States FSS International Uniform Corporate Subsidiaries Revenue (as reported) $ 6,809,258 $ 2,8

  40. Slide 40: Net Debt to Covenant Adjusted EBITDA Trend

    Net Debt to Covenant Adjusted EBITDA Trend ARAMARK AND SUBSIDIARIES RECONCILIATION OF NON-GAAP MEASURES NET DEBT TO COVENANT ADJUSTED EBITDA (Unaudited) (In thousands) Twelve Months Ended September 27, 2019 October 2, 2020 October 1, 2021 September 30, 2022 September 29, 2023 Net Income (Loss) Attri

  41. Slide 41: Global FSS AOI Margin FY21

    Global FSS AOI Margin FY21 ARAMARK AND SUBSIDIARIES RECONCILIATION OF NON-GAAP MEASURES GLOBAL FSS ADJUSTED CONSOLIDATED OPERATING INCOME MARGIN (Unaudited) (In thousands) Fiscal Year Ended October 1, 2021 FSS United States FSS International Corporate Global FSS Items to Rebase Rebased Global FSS Re

  42. Slide 42: Free Cash Flow Trend

    Free Cash Flow Trend ARAMARK AND SUBSIDIARIES RECONCILIATION OF NON-GAAP MEASURES FREE CASH FLOW (Unaudited) (In thousands) Fiscal Year Ended September 27, 2019 October 2, 2020 October 1, 2021 September 30, 2022 September 29, 2023 Net Cash provided by operating activities $ 984,227 $ 176,682 $ 657,0

  43. Slide 43: Other Non-GAAP Schedules

    Other Non-GAAP Schedules aramark 3 MA Reach For Remarkable SERVICE. INNOVATION. GROWTH

  44. Slide 44: AOI Margin

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  45. Slide 45: Net Debt to Covenant Adjusted EBITDA

    Net Debt to Covenant Adjusted EBITDA 45

  46. Slide 46: Free Cash Flow

    Free Cash Flow aramark Jr” ARAMARK AND SUBSIDIARIES RECONCILIATION OF NON-GAAP MEASURES FREE CASH FLOW. (Cnaudited) An thousands) Fiscal Yeur Ended Nine Months Ended__ Three Months Ended September 29,2025 June 30,2023 ber 29,2023, Net Cash provided by (used in) operating activities 3 765429 2700) S

  47. Slide 47: Global FSS AOI Margin

    Global FSS AOI Margin RECONCILIATION OF NON-GAAP MEASURES (omens LOMA FSS ADIUSTED CONSOLIDATED OPERATING INCOME MARGIN (eonsnt) Sami 20 thee nin a ee — Tae Fase Tosa 5 Wines Eee = Onin acre te) 5 saso— Ss iaaw F mg 5 asaSe Saas Reena ep) ESET ICTY =o Sa SnX ee 20x 2 Opening noe (pr) FS TT =e sume o

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Aramark — Q4 2023 Earnings Presentation on 6ix