Us Foods Holding Corp. · NYSE:USFD
Us Foods — Q3 2019 Earnings Presentation
25 slides from Us Foods's earnings presentation, Nov 5, 2019
Slide 1: Q3 Fiscal 2019 Results
Q3 Fiscal 2019 Results November 5, 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: Third quarter organic results show continued volume and profitability growth
Third quarter organic results show continued volume and profitability growth Completed the Food Group acquisition in September Total case growth of 3.0%; total organic case growth of 0.9% Independents continuing to grow at approximately twice the market rate* Operating leverage increased $0.09 per c
Slide 4: The Food Group acquisition helps drive total case growth; organic independent case growth continues
The Food Group acquisition helps drive total case growth; organic independent case growth continues at twice the market rate* Independent Restaurant Case Growth Organic Case Growth by Quarter YOY percent change YOY percent change Organic Acquisitions Independent Restaurants 6.3% 10% Healthcare/Hospi
Slide 5: Omni-channel selling approach complements our Great Food. Made Easy. strategy
Omni-channel selling approach complements our Great Food. Made Easy. strategy Great Food. Made Easy. Omni-Channel Selling Approach • E-Commerce: 61% of independent and more • Pronto: now in 8 markets with the opportunity than 70% of total sales are through e-commerce to expand to roughly 15 markets
Slide 6: Closed the Food Group acquisition and integration activities are already underway
Closed the Food Group acquisition and integration activities are already underway Successful completion of planned divestures - three DCs divested to three buyers Completed over 1,000 customer moves without notable service disruptions Retained key talent while transitioning 100 associates to new DCs
Slide 7: Case growth and product inflation continue to increase Net Sales
Case growth and product inflation continue to increase Net Sales Q3 Net Sales $ Millions b/(w) Results Summary $6,531 6.1% Net Sales drivers: $6,153 • The Food Group contributed $132M, or 2.1%, to Q3 Net Sales • Solid total case growth • Inflation across multiple product categories, including grocer
Slide 8: Gross Profit dollar increase driven by volume growth and margin expansion initiatives
Gross Profit dollar increase driven by volume growth and margin expansion initiatives Q3 Gross Profit Results Summary $ Millions; Percent of Sales b/(w) $1,156 Gross Profit drivers: $1,108 4.3% • Margin expansion initiatives, including: • Private brand growth • Freight optimization 18.0% 17.7% (30)
Slide 9: Expected increases in distribution wages and acquisition-related costs offset operational efficiencies
Expected increases in distribution wages and acquisition-related costs offset operational efficiencies Q3 Operating Expense Results Summary $ Millions; Percent of Sales b/(w) $968 Operating Expense drivers: $929 4.2% • Higher distribution wages, as expected • Continued focus on employee retention an
Slide 10: Continued strong operating leverage gains in the third quarter
Continued strong operating leverage gains in the third quarter Adjusted Gross Profit and Adjusted Operating Expense* $/case higher/(lower) than prior year FY 2019 Operating Leverage Q1 2019 $0.03 per case Adj GP Adj OPEX $0.25 Q2 2019 $0.08 per case Q3 2019 $0.09 per case $0.20 $0.09 per case $0.07
Slide 11: Continued strong performance across key financial metrics
Continued strong performance across key financial metrics Organic 2018 Organic 2019 The Food Group Contribution Q3 Adjusted EBITDA* Q3 Adjusted Diluted Earnings Q3 Net Income $ Millions; Percent of Sales Per Share* $ Millions $ $143 $307 $0.65 $127 $283 8.5% $0.58 12.1% $114 $141 $302 $0.64 $106 $12
Slide 12: Strong operating cash flow supports ability to delever
Strong operating cash flow supports ability to delever YTD Operating Cash Flow Q3 Net Debt* and Leverage $ Millions $ Millions Leverage ** Includes ~$1.8B of Net Debt for the Food Group acquisition $559 $4,826 $444 $3,423 $3,352 4.2x 3.1x 3.0x 2018 2019 Q3 2018 Q4 2018 Q3 2019 * Reconciliations of n
Slide 13: Updated full year fiscal 2019 guidance
Updated full year fiscal 2019 guidance Previous Guidance Updated Guidance Case Growth 4-5% Organic Case Growth 1-2% 1-1.5% Adjusted EBITDA Growth 8.5% Organic Adjusted EBITDA Growth At Least 5% 6% Cash CAPEX (excluding future acquisitions) $260-270 million $275 million Interest Expense $170-175 mill
Slide 14: Appendix
APPENDIX: • Q3 FISCAL 2019 SUMMARY • NON-GAAP RECONCILIATIONS
Slide 15: Third quarter financial performance
Third quarter financial performance Reported Adjusted (1) (unaudited) (unaudited) 13 Weeks Ended 13 Weeks Ended September 28, September 29, September 28, September 29, ($ in millions, except per share data*) 2019 2018 Change 2019 2018 Change Case Growth 3.0% Net Sales 6,531 6,153 6.1% Gross Profit 1
Slide 16: Year to date financial performance
Year to date financial performance Reported Adjusted (1) (unaudited) (unaudited) 39 Weeks Ended 39 Weeks Ended September 28, September 29, September 28, September 29, ($ in millions, except per share data*) 2019 2018 Change 2019 2018 Change Case Growth 2.0% Net Sales 19,005 18,134 4.8% Gross Profit
Slide 17: Non-GAAP reconciliation - Adjusted Gross Profit and Adjusted Operating Expenses
Non-GAAP reconciliation - Adjusted Gross Profit and Adjusted Operating Expenses 13 Weeks Ended 39 Weeks Ended (unaudited) (unaudited) September 28, September 29, September 28, September 29, ($ in millions)* 2019 2018 2019 2018 Gross profit (GAAP) $1,156 $1,108 $3,350 $3,214 LIFO reserve change (1) 1
Slide 18: Third quarter Non-GAAP reconciliation - Adjusted EBITDA and Adjusted Net Income
Third quarter Non-GAAP reconciliation - Adjusted EBITDA and Adjusted Net Income 13 Weeks Ended (unaudited) Organic Food Group US Foods Acquisition Consolidated US Foods September 28, September 28, September 28, September 29, ($ in millions)* 2019 2019 2019 2018 Net income (GAAP) $105 $1 $106 $114 In
Slide 19: Third quarter Non-GAAP reconciliation - Adjusted EBITDA and Adjusted Net Income
Third quarter Non-GAAP reconciliation - Adjusted EBITDA and Adjusted Net Income (*) Prior year amounts may have been rounded to conform with the current year presentation. (1) Share-based compensation expense for stock and option awards and discounts provided under employee stock purchase plan. (2)
Slide 20: Year to date Non-GAAP reconciliation - Adjusted EBITDA and Adjusted Net Income
Year to date Non-GAAP reconciliation - Adjusted EBITDA and Adjusted Net Income 39 Weeks Ended (unaudited) Organic Food Group US Foods Acquisition Consolidated US Foods September 28, September 28, September 28, September 29, ($ in millions)* 2019 2019 2019 2018 Net income (GAAP) $292 $1 $293 $307 Int
Slide 21: Year to date Non-GAAP reconciliation - Adjusted EBITDA and Adjusted Net Income
Year to date Non-GAAP reconciliation - Adjusted EBITDA and Adjusted Net Income (*) Prior year amounts may have been rounded to conform with the current year presentation. (1) Consists primarily of severance and related costs and organizational realignment costs. (2) Share-based compensation expense
Slide 22: Third quarter Non-GAAP reconciliation - Adjusted Diluted Earnings Per Share (EPS)
Third quarter Non-GAAP reconciliation - Adjusted Diluted Earnings Per Share (EPS) 13 Weeks Ended (unaudited) Organic Food Group US Foods Acquisition Consolidated US Foods September 28, September 28, September 28, September 29, 2019 2019 2019 2018 Diluted EPS (GAAP) $0.47 $0.01 $0.48 $0.52 Share-base
Slide 23: Year to date Non-GAAP reconciliation - Adjusted Diluted Earnings Per Share (EPS)
Year to date Non-GAAP reconciliation - Adjusted Diluted Earnings Per Share (EPS) 39 Weeks Ended (unaudited) Organic Food Group US Foods Acquisition Consolidated US Foods September 28, September 28, September 28, September 29, 2019 2019 2019 2018 Diluted EPS (GAAP) $1.33 $0.01 $1.34 $1.41 Restructuri
Slide 24: Non-GAAP reconciliation - Net Debt and Net Leverage Ratios
Non-GAAP reconciliation - Net Debt and Net Leverage Ratios (unaudited) September 28, December 29, September 29, ($ in millions, except ratios) 2019 2018 2018 Total Debt (GAAP) $4,924 $3,457 $3,511 Cash, cash equivalents and restricted cash (98) (105) (88) Net Debt (Non-GAAP) $4,826 $3,352 $3,423 Adj
Slide 25: We help you make it
WE HELP YOU US. MAKE IT