Us Foods Holding Corp. · NYSE:USFD
Us Foods — Q4 2018 Earnings Presentation
20 slides from Us Foods's earnings presentation, Feb 12, 2019
Slide 1: Q4 and Fiscal Year 2018 Results
Q4 and Fiscal Year 2018 Results February 12, 2019
Slide 2: Cautionary statements regarding forward-looking information
Cautionary statements regarding forward-looking information This presentation contains “forward-looking statements” within the meaning of the federal securities laws concerning, among other things, our liquidity, our possible or assumed results of operations and our business strategies. These forwar
Slide 3: Q4 results show improving trends
Q4 results show improving trends Positive total case volume for the month of December • Independent case volume exceeded 4% exit rate • Healthcare/Hospitality case volume below 2% exit rate • All Other case volume in line with a roughly flat exit rate Continue to expand operating leverage • Private
Slide 4: Progress made during 2018 enables future growth
Progress made during 2018 enables future growth 1. Attractive industry with favorable 2. Progress on differentiated strategy outlook • Private brand growth and improved • Restaurant demand and consumer spending customer mix are strong • Completed implementation of our team- • Independents gaining sh
Slide 5: Organic case growth showing sequential improvement
Organic case growth showing sequential improvement Independent Restaurant Case Growth Organic Case Growth by Quarter YoY percent change* YoY Change Organic Acquisitions IND Case Growth 7.1% 10% HC/Hosp Case Growth 6.0% All Other 8% 4.7% 4.3% 4.0% 5.2% 3.8% 3.9% 3.3% 6% 3.7% 4.1% 3.9% 3.1% 2.8% 2.7%
Slide 6: Volume growth with independents and a return of inflation is driving a modest increase in sales dollars
Volume growth with independents and a return of inflation is driving a modest increase in sales dollars Q4 Net Sales $ Millions b/(w) Results Summary $5,996 $6,041 0.8% Net Sales drivers: • Volume growth with independent restaurants • Total organic volume declined, primarily on exits • Q4’18: Positi
Slide 7: Gross profit dollar growth coming from positive customer mix and margin initiatives
Gross profit dollar growth coming from positive customer mix and margin initiatives Q4 Gross Profit Results Summary $ Millions; Percent of Sales b/(w) $1,092 Gross Profit drivers: 1.6% $1,075 • Positive customer mix impact • Margin initiatives driving gains • Private brand growth of ~100 bps 17.9% 1
Slide 8: Higher fuel and wage costs partially offset by expense control initiatives
Higher fuel and wage costs partially offset by expense control initiatives Q4 Operating Expense Results Summary $ Millions; Percent of Sales b/(w) $922 Operating Expense drivers: 4.9% $879 • Higher wage and fuel costs • Unfavorable volume deleveraging on fixed costs • Higher acquisition related cost
Slide 9: Growth in Gross Profit per case consistently outpacing growth in Operating Expense per case
Growth in Gross Profit per case consistently outpacing growth in Operating Expense per case Adj Gross Profit and Adj Operating Expense* $/case higher/lower than prior year Adj GP Adj OPEX $0.25 $0.20 $0.09 per case FY 2018 Operating Leverage $0.18 Q1 2018 $0.08 per case $0.15 better $0.08 per case Q
Slide 10: Key profitability metrics improved over prior year
Key profitability metrics improved over prior year Q4 Adjusted EBITDA* Q4 Adjusted Diluted Earnings Q4 Net Income 2017 $ Millions; Percent of Sales Per Share* $ Millions ~$150M YOY 2018 $ Income Tax $297 $256 benefit from $290 $0.56 new tax law 2.4% $0.44 27% $123 $100 $98 4.8% 4.9% 2017 2018 2017 2
Slide 11: Strong cash flow offset by higher cash taxes and additional pension contribution; leverage continues to improve
Strong cash flow offset by higher cash taxes and additional pension contribution; leverage continues to improve Full Year Operating Cash Flow Q4 Net Debt* and Leverage Leverage ** $ Millions $ Millions Pension and cash income taxes are a ~$105M YOY $749 increased use of cash $3,638 $609 $3,352 3.4x
Slide 12: 2019 Guidance
2019 Guidance Guidance Case Growth 1-2% Adjusted EBITDA Growth At Least 5% Cash CAPEX (excluding future acquisitions) $260-270 million Interest Expense $170-175 million Depreciation & Amortization $340-350 million Adj Effective Tax Rate 25-26% Adjusted Diluted EPS $2.15-2.25 11
Slide 13: APPENDIX
APPENDIX: • Q4 FISCAL 2018 SUMMARY • NON-GAAP RECONCILIATIONS
Slide 14: Fourth Quarter Financial Performance
Fourth Quarter Financial Performance Reported Adjusted (1) (unaudited) (unaudited) 13-Weeks Ended 13-Weeks Ended December 29, December 30, December 29, December 30, ($ in millions, except per share data*) 2018 2017 Change 2018 2017 Change Case Growth (0.8)% Net Sales 6,041 5,996 0.8% Gross Profit 1,
Slide 15: Full Year Financial Performance
Full Year Financial Performance Reported Adjusted (1) (unaudited) (unaudited) 52-Weeks Ended 52-Weeks Ended December 29, December 30, December 29, December 30, ($ in millions, except per share data*) 2018 2017 Change 2018 2017 Change Case Growth (1.2)% Net Sales 24,175 24,147 0.1% Gross Profit 4,306
Slide 16: Non-GAAP Reconciliation - Adjusted Gross Profit and Adjusted Operating Expenses
Non-GAAP Reconciliation - Adjusted Gross Profit and Adjusted Operating Expenses 13-Weeks Ended 52-Weeks Ended (unaudited) (unaudited) December 29, December 30, December 29, December 30, ($ in millions)* 2018 2017 2018 2017 Gross profit (GAAP) $1,092 $1,075 $4,306 $4,218 LIFO reserve change (1) 1 — —
Slide 17: Non-GAAP Reconciliation - Adjusted EBITDA and Adjusted Net Income
Non-GAAP Reconciliation - Adjusted EBITDA and Adjusted Net Income 13-Weeks Ended 52-Weeks Ended (unaudited) (unaudited) December 29, December 30, December 29, December 30, ($ in millions)* 2018 2017 2018 2017 Net income (GAAP) $100 $256 $407 $444 Interest expense—net 42 44 175 170 Income tax provisi
Slide 18: Non-GAAP Reconciliation - Adjusted Diluted Earnings Per Share (EPS)
Non-GAAP Reconciliation - Adjusted Diluted Earnings Per Share (EPS) 13-Weeks Ended 52-Weeks Ended (unaudited) (unaudited) December 29, December 30, December 29, December 30, 2018 2017 2018 2017 Diluted EPS (GAAP) $0.46 $1.15 $1.87 $1.97 Restructuring charges (1) — (0.02) — — Share-based compensation
Slide 19: Non-GAAP Reconciliation - Net Debt and Net Leverage Ratios
Non-GAAP Reconciliation - Net Debt and Net Leverage Ratios (unaudited) December 29, December 30, ($ in millions, except ratios)* 2018 2017 Total Debt (GAAP) $3,457 $3,757 Cash, cash equivalents and restricted cash (105) (119) Net Debt (Non-GAAP) $3,352 $3,638 Adjusted EBITDA (1) $1,103 $1,058 Net Le
Slide 20: We Help You Make It
WE HELP YOU US. MAKE IT