Sysco Corporation · NYSE:SYY
Sysco — Q1 FY2013 Earnings Presentation
21 slides from Sysco's earnings presentation, Nov 5, 2012
Slide 1: Sysco 1Q13 Earnings Results
Sysco 1Q13 Earnings Results November 5, 2012
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements made in this press release or in our earnings call for the first quarter of fiscal 2013 that look forward in time or that express management’s beliefs, expectations or hopes are forward-looking statements within the meaning of the Private Securities Litigation R
Slide 3: Bill DeLaney, President & CEO
Bill DeLaney President & CEO 3
Slide 4: 1Q13 Highlights
1Q13 Highlights Adjusted Results1 Reported YOY % YOY % $ Millions, except share data 1Q13 1Q13 Change Change Sales $11,087 4.7% $11,087 4.7% Gross Profit $2,004 2.9% $2,004 2.9% Operating Expenses $1,441 3.2% $1,525 6.0% Operating Income $563 2.0% $479 (6.0%) Net Earnings $340 3.2% $287 (5.3%) Dilut
Slide 5: Business Transformation Update
Business Transformation Update East Texas conversion successful Significant milestone reached with North Texas and West Texas conversions in late October First simultaneous conversion of multiple operating companies First conversion of a very large operating company (North Texas) Continuin
Slide 6: Key Takeaways
Key Takeaways Returning value to our shareholders remains a priority Speed and execution in fiscal 2013 will be key as we continue to develop and implement key initiatives to support our Business Transformation Investments we are making in our business will improve our financial results over t
Slide 7: Chris Kreidler, EVP & CFO
Chris Kreidler EVP & CFO Good things
Slide 8: Case Growth and Inflation Drive Sales Growth
Case Growth and Inflation Drive Sales Growth (1) Case Growth Inflation 4.0% 3.6% 8.0% 3.4% 7.3% 3.5% 7.0% 2.9% 2.9% 6.3% 3.0% 6.0% 5.5% 2.5% 5.0% 2.0% 1.8% 4.0% 3.3% 1.5% 3.0% 2.2% 1.0% 2.0% 0.5% 1.0% 0.0% 0.0% 1Q12 2Q12 3Q12 4Q12 1Q13 1Q12 2Q12 3Q12 4Q12 1Q13 (1) – Includes Broadline and SYGMA, inc
Slide 9: 1Q13 Gross Margin Trend
1Q13 Gross Margin Trend ($ in millions) Inflation 8% 7% 7.3% 6% 6.3% 5% 5.5% 4% 3% 3.3% 2% 2.2% 1% 0% 1Q12 2Q12 3Q12 4Q12 1Q13 YOY Decline in Gross Margin (bps) -10 -30 (33) -50 (53) (54) -70 -90 (75) -110 (95) 1Q12 2Q12 3Q12 4Q12 1Q13 9
Slide 10: 1Q13 Operating Expenses
1Q13 Operating Expenses (YOY change; $ in millions) $16 1Q13 $30 $41 Reported operating expense +6.0% Adjusted1 operating $1,525 expense +3.2% $1,438 1Q12 Business Payroll Other 1Q13 Transf. 1 See Non-GAAP reconciliations at the end of this presentation. 10
Slide 11: 1Q13 Highlights
1Q13 Highlights Adjusted Results1 Reported YOY % YOY % $ Millions, except share data 1Q13 1Q13 Change Change Sales $11,087 4.7% $11,087 4.7% Gross Profit $2,004 2.9% $2,004 2.9% Operating Expenses $1,441 3.2% $1,525 6.0% Operating Income $563 2.0% $479 (6.0%) Net Earnings $340 3.2% $287 (5.3%) Dilut
Slide 12: Executing on our Goal of Increasing Sales Through Acquisitions
Executing on our Goal of Increasing Sales Through Acquisitions Annualized acquired sales ($ in millions) $560 $435 $326 $270 $75 $41 FY08 FY09 FY10 FY11 FY12 FY13 (YTD) % of 0.2% 0.9% 0.1% 1.1% 0.6% >1% Sales # of Deals 4 4 3 5 9 6 12
Slide 13: Business Transformation Project Costs
Business Transformation Project Costs (in millions) 1Q13 1Q12 Operating expense $78 $37 Capital investment $3 $45 13
Slide 14: Cash Flow from Operations
Cash Flow from Operations $53 $53 $106 $496 $369 $284 $255 $213 1Q12 2Q12 3Q12 4Q12 1Q13 Cash flow from operations IRS settlement payments 14
Slide 15: Capital Expenditures
Capital Expenditures ($ millions) $227 The decline in capex is driven by: $156 A decrease in business transformation capital spend And A reduction in the number of major facilities projects this year 1Q13 1Q12 Technology Fleet Facilities 15
Slide 16: Free Cash Flow Doubled in 1Q13 vs. 1Q12
Free Cash Flow Doubled in 1Q13 vs. 1Q12 $ Millions 1Q13 1Q12 Cash Flow from Operations $213 $255 Capital Expenditures $156 $227 Free Cash Flow $58 $29 (1) Dividends Paid $158 $154 (1) Free Cash Flow table may not foot due to rounding 16
Slide 17: thin gs
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Slide 18: Non-GAAP Reconciliations
Non-GAAP Reconciliations 18
Slide 19: 1Q13 Non-GAAP Reconciliation
1Q13 Non-GAAP Reconciliation Sysco’s results of operations are impacted by certain items which include charges from the withdrawal from multiemployer pension plans, severance charges and charges from facility closures. Management believes that adjusting its operating expenses, operating income, net
Slide 20: 1Q13 Non-GAAP Reconciliation
1Q13 Non-GAAP Reconciliation 13-Week 13-Week 13-Week 13-Week Period Ended Sept. 29, Period Ended Oct. 1, Period Change Period 2012 2011 in Dollars % Change Operating expenses (GAAP) $ 1,524,762 $ 1,438,260 $ 86,502 6.0% Impact of MEPP charge - (4,500) 4,500 NM Impact of severance charges (6,077) (1,
Slide 21: 1Q13 Non-GAAP Reconciliation
1Q13 Non-GAAP Reconciliation Free cash flow represents net cash provided from operating activities less purchases of plant and equipment. Sysco considers free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the bu