Slide 1: Sysco 1Q FY23 Earnings Results
Sysco 1Q FY23 Earnings Results November 1, 2022
Slide 2: Forward Looking Statements
Forward Looking Statements Statements made in this presentation or in our earnings call for the first quarter of fiscal year 2023 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
Slide 3: Kevin Hourican, President & CEO
KEVIN HOURICAN President & CEO
Slide 4: Food Supply Chain Food Sales & Marketing
Food Supply Chain Food Sales & Marketing
Slide 5: Sysco is the backbone of the food-away-from-home industry
SYSCO IS THE BACKBONE OF THE FOOD-AWAY- FROM-HOME INDUSTRY AND ACCELERATING GROWTH > $68 billion annual sales ~700,000 Customers > 71,000 Associates > 7,500 Sales Consultants 5 * Represents fiscal year 2022
Slide 6: Fiscal 1Q 2023 Highlights
Sysco’s 1Q 2023 Delivered Double-Digit Top-Line and Bottom-Line Growth, and Above-Market Growth Fiscal 1Q 2023 Highlights >1.4x Q1 growth vs. broader U.S. market 3.1x Net debt to EBITDA ratio; 6 Consecutive quarters of profitability in resulting in continued share gains strong IG rated balance sheet
Slide 7: Sysco Continues to Outperform Total Foodservice Industry Resulting in Share Gains
Sysco Continues to Outperform Total Foodservice Industry Resulting in Share Gains Since the start of the pandemic, Sysco has performed better than the total foodservice market USFS Ops YoY Revenue growth vs Technomic Market Estimated YoY growth FY22 2023/Q01 35% 17% 27% 12% >1.3X >1.4X Source: Sysco
Slide 8: Recipe For Growth Strategy Will Drive Our Future Success
Recipe For Growth Strategy Will Drive Our Future Success 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 Share Delivering success for our Together we define the future of Food and Care for On
Slide 9: Recipe For Growth is Delivering Important Wins
Recipe For Growth is Delivering Important Wins PRODUCTS AND FUTURE HORIZONS SUPPLY CHAIN SOLUTIONS • Focused on independent customers • Closed two distributor acquisitions in • Strategic initiatives are enabling in restaurant-dense markets 1Q focused on Italian profitable sales growth and widening D
Slide 10: Aaron Alt, EVP & CFO
AARON ALT EVP & CFO
Slide 11: 1Q 2023 Consolidated Financial Results
1Q 2023 Consolidated Financial Results Overview Net Sales Adj. EBITDA1 Adj. EPS1 • Sysco delivered another quarter of (billions) (millions) record sales of $19.1 billion, an increase of 16.2% • Gross margin of 18.2% increased $19.1 $0.97 nearly 20 basis points, with GP/case $917 up across all segmen
Slide 12: 1Q 2023 U.S. Foodservice Results
1Q 2023 U.S. Foodservice Results Net Sales Adj. Operating Overview (billions) Income1 (millions) • Sales increased 17.2% • Above-industry growth drove meaningful $914 share gains $13.6 • Local case volume grew 5.4% while total case volume grew 7.3% $11.6 $796 • Gross margin increased 37 basis points
Slide 13: 1Q 2023 SYGMA Results
1Q 2023 SYGMA Results SYGMA Net Sales Operating Income Overview (billions) (millions) • SYGMA sales grew 13.5% • Sharp profit recovery versus prior year $1.9 led to $5.5 million of operating income $5 $1.7 -$2 Q1 2022 Q1 2023 Q1 2022 Q1 2023 1 See Non-GAAP reconciliations at the end of the presentat
Slide 14: 1Q 2023 International Results
1Q 2023 International Results Net Sales Adj. Operating Overview (billions) Income1 (millions) • International sales increased 13.4%, or 24.3% on a constant currency basis $3.3 $107 • FX rates decreased International Foodservice Operations sales by 10.9% and total Sysco sales by 2.0% during the $2.9
Slide 15: 1Q 2023 Cash Flow
1Q 2023 Cash Flow Cash from Operations Free Cash Flow1 Overview (millions) (millions) • Cash flow from operations was $158.6 million • Capital expenditures, net of proceeds from sales $159 $31 of plant and equipment, nearly doubled to $144.8 million, with continued investments in our Recipe For Grow
Slide 16: Capital Structure and Allocation
Capital Structure and Allocation Investment Priority Progress • Continued capital investments in our technology, fleet and buildings 1 Invest for Growth • Strong pipeline of tuck-in acquisitions focused on Broadline, Specialty and Cuisine-type opportunities as well as underpenetrated markets in the
Slide 17: Sysco Has Consistently Increased Returns to Shareholders
Sysco Has Consistently Increased Returns to Shareholders Cumulative Cash Returned to Shareholders $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 Expected Dividends Shares Repurchased Expecting Over $15 Billion of Cash
Slide 18: Continued Volume Growth - U.S. Foodservice Volumes
Continued Volume Growth - U.S. Foodservice Volumes Versus Prior Year Versus FY19 60% 10% 50% 5% 40% 0% 30% 20% -5% 10% -10% 0% -15% -10% -20% -20% -30% -25% Local Total USFS Local Total USFS -40% -30% Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q1 FY21 Q2 FY21 Q3 FY21 Q4
Slide 19: Kevin Hourican, President & CEO
KEVIN HOURICAN President & CEO
Slide 20: Sysco is Winning, Leading the Industry
Sysco is Winning, Leading the Industry • Share gains continued in Q1, exceeding 1.4x market • Remain on target to grow more than 1.35x in FY23 • Double-digit top- and bottom-line growth in Q1 • Reaffirming FY23 Guidance • Remain committed to strong investment grade rated balance sheet 202 net debt t
Slide 21: Sysco is Leading the Industry and Accelerating Growth
Investment Thesis Sysco is Leading the Industry and Accelerating Growth Expect to grow >1.5X faster Fortress Balance Sheet: CSR: Tangible than the total market by the only Investment-Grade Science-Based end of fiscal 2024 Food Service Distributor Climate Goal LT financial guidance Compelling shareho
Slide 22: At the heart of food and service
Sysco At the heart of food and service
Slide 23: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS /; the heart of food and service
Slide 24: Impact of Certain Items
Impact of Certain Items Our discussion of our results includes certain non-GAAP financial measures, such as EBITDA and adjusted EBITDA, that we believe provide important perspective with respect to underlying business trends. Other than free cash flow and EBITDA, any non-GAAP financial measures will
Slide 25: Non-GAAP Reconciliation: Impact of Certain Items, 1Q23 vs. 1Q22
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items, 1Q23 vs. 1Q22 (Dollars in Thousands, Except for Share and Per Share Data) 13-Week 13-Week Period Ended Period Ended Change Oct. 1, 2022 Oct. 2, 2021 in Dollars % Change Sales (GAAP) $ 19,
Slide 26: Non-GAAP Reconciliation: Impact of Certain Items, 1Q23 vs. 1Q22 (continued)
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items, 1Q23 vs. 1Q22 (Dollars in Thousands, Except for Share and Per Share Data) continued Operating margin (GAAP) 3.84% 3.84% 0 bps Operating margin adjusted for Certain Items (Non-GAAP) 4.03%
Slide 27: Non-GAAP Reconciliation: Impact of Certain Items, 1Q23 vs. 1Q19
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items, 1Q23 vs. 1Q19 (Dollars in Thousands, Except for Share and Per Share Data) 13-Week 13-Week Period Ended Period Ended Change Oct. 1, 2022 Sep. 29, 2018 in Dollars % Change Sales (GAAP) $ 19
Slide 28: Non-GAAP Reconciliation: Impact of Certain Items, 1Q23 vs. 1Q19 (continued)
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items, 1Q23 vs. 1Q19 (Dollars in Thousands, Except for Share and Per Share Data) continued Operating margin (GAAP) 3.84% 4.13% -29 bps Operating margin adjusted for certain items (Non-GAAP) 4.03
Slide 29: Segment Results Non-GAAP Reconciliation, 1Q23 vs. 1Q22
Sysco Corporation and its Consolidated Subsidiaries Segment Results Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Applicable Segments, 1Q23 vs. 1Q22 (Dollars in Thousands) 13-Week 13-Week Period Ended Period Ended Change Oct. 1, 2022 Oct. 2, 2021 in Dollars %/bps Change U.S. FOODSER
Slide 30: 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, 1Q23 vs. 1Q22 (Dollars in Thousands) continued OTHER Sales (GAAP) $ 307,156 $ 254,303 $ 52,853 20.8% Gross Profit (GAAP) 80,838 59,021 21,817 37.0%
Slide 31: Free Cash Flow, YTD23 vs. YTD22
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Free Cash Flow, YTD23 vs. YTD22 (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 32: 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 33: Impact of Certain Items on EBITDA (1Q23 vs. 1Q22)
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Earnings Before Interest, Taxes, Depreciation and Amortization (1Q23 vs. 1Q22) (In Thousands) 13-Week 13-Week Period Ended Period Ended Change Oct. 1, 2022 Oct. 2, 2021 in Dollars %/bps
Slide 34: Net Debt to Adjusted EBITDA
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Net Debt to Adjusted EBIDTA (In Thousands) 13-Week Period Ended Oct. 1, 2022 Current Maturities of long-term debt $ 555,829 Long-term debt 10,263,331 Total Debt 10,819,160 Cash & Cash Equivalents (437,670) Net De
Slide 35: 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 2023. 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
Slide 36: 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