Us Foods Holding Corp. · NYSE:USFD
Us Foods — ICR Conference 2024
38 slides from Us Foods's conference presentation, Jan 8, 2024
Slide 1: Investor Presentation January 2024
Investor Presentation January 2024
Slide 2: Disclaimer Page
Disclaimer Page Cautionary Statements Regarding Forward-Looking Information Statements in this presentation which are not historical in nature are “forward-looking statements” within the meaning of the federal securities laws. These statements often include words such as “believe,” “expect,” “projec
Slide 3: Key Messages
Key Messages Broad national scale in a fragmented industry with focus on 1 differentiation of technology, team-based selling and product innovation to drive outsized growth Experienced executive team with defined strategy to enhance 2 profitability through Long-Range Plan Resilient business model wi
Slide 4: US Foods Overview
US Foods Overview US FOODS INVESTOR PRESENTATION 2024 4
Slide 5: Great Food. Innovative Technology. Dedicated and Personalized Support.
GREAT FOOD. INNOVATIVE TECHNOLOGY. DEDICATED AND PERSONALIZED SUPPORT. MORE THAN JUST A TAGLINE When we say, “We Help You Make It®”, we mean it. More than just a tagline, this is the US Foods® promise to our customers. With great food solutions, innovative yet simple business tools and a dedicated t
Slide 6: Executive Leadership Team with Extensive Industry Experience
Executive Leadership Team with Extensive Industry Experience Dave Flitman Irfan Badibanga Steve Boggan Steve Guberman Martha Ha Bill Hancock Chief Executive Officer President, Regional President – EVP, Chief Transformation Officer & EVP, General Counsel EVP, Chief Supply CHEF’STORE Central Nationall
Slide 7: Highly Experienced Board with Unique Backgrounds, Qualifications and Skills Providing Effective Oversight
Highly Experienced Board with Unique Backgrounds, Qualifications and Skills Providing Effective Oversight KNOWLEDGE, SKILLS & EXPERIENCE DEMOGRAPHICS & TENURE Independent Less than 5 yrs Food Industry Non-Independent Between 5 and 10 yrs 1 Supply Chain & Logistics 4.0 years CEO Leadership 92% Averag
Slide 8: US Foods – At a Glance
US Foods – At a Glance $34.1B(1) 150+ IN REVENUE YEARS IN BUSINESS ~250,000 ~6,000 CUSTOMERS SUPPLIERS 400,000+ ~6,500 PRODUCTS TRUCKS IN OUR FLEET US Foods Distribution Center States with CHEF’STORES 29,000+ ~4,000 REVENUE ~10% 17% 5% 5% ASSOCIATES SALES ASSOCIATES BREAKDOWN1 ~65% 10% 38% 35% Our O
Slide 9: Significant Total Addressable Market Highlights Growth Potential
Significant Total Addressable Market Highlights Growth Potential 2022 2025 Total Addressable Market ~$400B Total Addressable Market ~$350B Restaurants Restaurants $230B $211B Hospitality Hospitality & Healthcare & Healthcare $66B $55B Leading Position in Fastest Growing End Markets with Significant
Slide 10: Great Food and Menu Solutions All in One Place
Great Food and Menu Solutions All in One Place We lead with fresh tastes and great food. You’ll always find on-trend, exclusive food and menu solutions that deliver the consistently high quality results that US Foods® is known for. From plant-based to clean ingredients, we offer product innovation t
Slide 11: Utilizing Proprietary Technology to Address Customer Challenges
Utilizing Proprietary Technology to Address Customer Challenges MOXē VITALS Making Operator Xperiences Easy Solutions for Healthcare Foodservice The one-stop shop for US Assortment of solutions to provide customers the latest Foods customers to find trends, technology and operational expertise f
Slide 12: Ability to Service Customers Through Broad Range of Solutions
Ability to Service Customers Through Broad Range of Solutions BROADLINE:TRADITIONAL BROADLINE: PRONTO DIRECT CHEF’STORE Extensive network of 70+ Service providing smaller, Virtual marketplace accessible Brick and mortar destination broadline locations more frequent deliveries with online or
Slide 13: Helping Customers Succeed Through Team-Based Selling
Helping Customers Succeed Through Team-Based Selling Specialized teams assisting customers with digital RESTAURANT marketing, menu engineering and profitability, staffing, OPERATIONS 73% cost management and restaurant technology MOXē has saved our sellers over 50,000 hours CONSULTANTS (ROCs) wit
Slide 14: Strategic Direction Underscored by Long-Range Plan Initiatives
Strategic Direction Underscored by Long-Range Plan Initiatives US FOODS INVESTOR PRESENTATION 2024 14
Slide 15: Our Four-Pillar Strategy Drives Value Creation
Our Four-Pillar Strategy Drives Value Creation CULTURE SERVICE GROWTH PROFIT EMBRACE THE US FOODS® CULTURE DELIVER WORLD-CLASS SERVICE GROW MARKET SHARE EXPAND EBITDA MARGIN SAFE RELIABLE TARGET MARGIN SUPPORTIVE EFFICIENT DIFFERENTIATE PRODUCTIVITY RESPONSIBLE EASY-TO-USE BE FRESH OPTIMIZATION US F
Slide 16: Focused on Cultivating Strong Culture
Focused on Cultivating Strong Culture CULTURE SAFE Always keep our people safe SUPPORTIVE Champion a diverse and inclusive work RESPONSIBLE Be environmentally and Embrace the and embrace a path to zero environment for all; foster employee socially conscious US Foods® culture accidents and injuries e
Slide 17: Key ESG Highlights
Key ESG Highlights Governance – Track record of governance best practices, led by high quality, experienced and diverse Board of Directors, including restoration of single class of common stock in 2023 Planet – Reduced absolute Scope 1 and Scope 2 greenhouse gas (GHG) emissions by 13% from our 2019
Slide 18: Enhancing Service Levels to Drive Efficiency
Enhancing Service Levels to Drive Efficiency SERVICE RELIABLE Ensure best-in-class delivery: EFFICIENT Drive routing transformation and EASY-TO-USE Create best-in-class experiences for Deliver world-class on-time and in full logistics management; increase the customer powered by digital and service
Slide 19: Capturing Share in Targeted End Markets
Capturing Share in Targeted End Markets GROWTH TARGET Grow market share with independent DIFFERENTIATE Capitalize on our food innovations, BE FRESH Improve our capabilities and drive Grow market restaurants, health care, hospitality team-based selling and value share in produce and Center of Plate s
Slide 20: Optimizing Operations to Expand Profits
Optimizing Operations to Expand Profits PROFIT MARGIN Expand through private label growth, PRODUCTIVITY Embrace continuous OPTIMIZATION Enhance indirect Expand EBITDA strategic vendor management improvement and drive spend management Margin and pricing initiatives 3-5% annual gains Further Optimize
Slide 21: Financial Overview and Outlook
Financial Overview and Outlook US FOODS INVESTOR PRESENTATION 2024 21
Slide 22: Strong Operating Cash Flow Creates Flexibility to Deploy Capital Strategically
Strong Operating Cash Flow Creates Flexibility to Deploy Capital Strategically to Enable Growth and Strengthen Capital Structure Operating Cash Flow ($M) $1,000 $900 $935 Capital Allocation Priorities $800 $700 $613 1 Invest in the business $600 $520 $500 2 $400 $300 Reduce leverage to target range
Slide 23: Further Strengthened Capital Structure Through Reduced Leverage
Further Strengthened Capital Structure Through Reduced Leverage Net Debt ($M) and Net Leverage(1) $4,643 Strong Progress Toward Long-Term $4,571 Leverage Range $4,340 • Within 2.5 to 3.0x net leverage target range with further progress expected 3.7x 3.5x • Leverage progress from a combination of deb
Slide 24: Disciplined Approach to M&A
Disciplined Approach to M&A Aligned Expands with overall Tuck-in capabilities growth plan strategy and footprint Opportunistic Investment Criteria 1 2 3 4 5 6 One or a few Externally Attractive Strong Accretive Solid financial locations in viewed as well customer cultural fit within first return and
Slide 25: Reaffirming Fiscal 2023 Guidance
Reaffirming Fiscal 2023 Guidance Prior Guidance Updated Guidance (as of August 10, 2023) (as of November 9, 2023) Restaurants: ~1.5x market Restaurants: ~1.5x market Volume All other: ~1x market All other: ~1x market (1) (1) Adjusted EBITDA $1.51B – $1.54B $1.54B – $1.56B (2) Adjusted Diluted EPS $2
Slide 26: Invest With US Foods
Invest With US Foods Leader in a highly fragmented and resilient industry with national scale; 1 U.S only business serving a diverse customer base Sustainable competitive advantages to drive market outperformance; 2 well-positioned to win in any macro environment Executing Long-Range Plan initiative
Slide 27: Appendix
Appendix US FOODS INVESTOR PRESENTATION 2024 27
Slide 28: Quarterly Case Volume Trend vs. Prior Year
Quarterly Case Volume Trend vs. Prior Year Organic Case Growth by Quarter(1) Independent Restaurant Case Growth(1) YOY percent change YOY percent change for total and organic cases Organic Acquisitions 20% Independent Restaurants Healthcare/Hospitality 5.8% All Other 9.2% 7.8% 5.8% 4.8% 5.0% 0.3% 2.
Slide 29: US Foods Debt Summary
US Foods Debt Summary Interest Rates as of Carrying Value as of Carrying Value as of Maturity Interest Terms ($ in millions) September 30, 2023 September 30, 2023 December 31, 2022 • Net leverage expected to ABL Facility December 7, 2027 8.50% - - remain below 3.0x for 2019 Incremental Term Loan Fac
Slide 30: Third Quarter Financial Performance
Third Quarter Financial Performance Reported (unaudited) Adjusted(1) (unaudited) 13 Weeks Ended 13 Weeks Ended September 30, 2023 October 1, 2022 Change September 30, 2023 October 1, 2022 Change ($ in millions, except per share data) Case Growth 4.0% Net Sales $9,106 $8,917 2.1% Gross Profit $1,542
Slide 31: Year to Date Financial Performance
Year to Date Financial Performance Reported (unaudited) Adjusted(1) (unaudited) 39 Weeks Ended 39 Weeks Ended September 30, 2023 October 1, 2022 Change September 30, 2023 October 1, 2022 Change ($ in millions, except per share data) Case Growth 4.0% Net Sales $26,661 $25,542 4.4% Gross Profit $4,558
Slide 32: Non-GAAP Reconciliation – Adjusted Gross Profit and Adjusted Operating Expenses
Non-GAAP Reconciliation – Adjusted Gross Profit and Adjusted Operating Expenses 13 Weeks Ended (unaudited) 39 Weeks Ended (unaudited) ($ in millions) September 30, 2023 October 1, 2022 September 30, 2023 October 1, 2022 Gross profit (GAAP) $1,542 $1,460 $4,558 $4,038 LIFO reserve adjustment(1) 37 6
Slide 33: Non-GAAP Reconciliation – Adjusted Gross Profit and Adjusted Operating Expenses
Non-GAAP Reconciliation – Adjusted Gross Profit and Adjusted Operating Expenses 1. Represents the non-cash impact of LIFO reserve adjustments. 2. Consists primarily of severance and related costs, organizational realignment costs and asset impairment charges. 3. Share-based compensation expense for
Slide 34: Non-GAAP Reconciliation – Adjusted EBITDA and Adjusted Net Income
Non-GAAP Reconciliation – Adjusted EBITDA and Adjusted Net Income 13 Weeks Ended (unaudited) 39 Weeks Ended (unaudited) ($ in millions) September 30, 2023 October 1, 2022 September 30, 2023 October 1, 2022 Net income available to common shareholders (GAAP) $95 $100 $352 $145 Series A Preferred Stock
Slide 35: Non-GAAP Reconciliation – Adjusted EBITDA and Adjusted Net Income
Non-GAAP Reconciliation – Adjusted EBITDA and Adjusted Net Income 1. Consists primarily of severance and related costs, organizational realignment costs and asset impairment charges. 2. Share-based compensation expense for expected vesting of stock awards and employee stock purchase plan. 3. Represe
Slide 36: Non-GAAP Reconciliation – Adjusted Diluted Earnings Per Share (EPS)
Non-GAAP Reconciliation – Adjusted Diluted Earnings Per Share (EPS) 13 Weeks Ended (unaudited) 39 Weeks Ended (unaudited) September 30, 2023 October 1, 2022 September 30, 2023 October 1, 2022 Diluted EPS (GAAP) $0.38 $0.43 $1.43 $0.64 Restructuring costs and asset impairment charges(1) 0.01 - 0.01 -
Slide 37: Non-GAAP Reconciliation – Adjusted Diluted Earnings Per Share (EPS)
Non-GAAP Reconciliation – Adjusted Diluted Earnings Per Share (EPS) 1. Consists primarily of severance and related costs, organizational realignment costs and asset impairment charges. 2. Share-based compensation expense for expected vesting of stock awards and employee stock purchase plan. 3. Repre
Slide 38: Non-GAAP Reconciliation – Net Debt and Net Leverage Ratios
Non-GAAP Reconciliation – Net Debt and Net Leverage Ratios (unaudited) ($ in millions, except ratios) September 30, 2023 December 31, 2022 October 1, 2022 Total Debt (GAAP) $4,686 $4,854 $4,937 Cash, cash equivalents and restricted cash (346) (211) (366) Net Debt (Non-GAAP) $4,340 $4,643 $4,571 Adju