Slide 1: Sysco 2Q FY20 Earnings Results
SYSCO 2Q FY20 EARNINGS RESULTS
Slide 2: Forward Looking Statements
Forward Looking Statements Statements made in this presentation or in our earnings call for the second quarter of fiscal 2020 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: Ed Shirley, Executive Chairman of the Board
ED SHIRLEY EXECUTIVE CHAIRMAN OF THE BOARD 3
Slide 4: Leadership Changes at Sysco
LEADERSHIP CHANGES AT SYSCO Ed Shirley, Kevin Hourican, Brad Halverson, Executive Chairman President and CEO Lead Independent of the Board Director 4
Slide 5: Kevin Hourican, President & CEO
KEVIN HOURICAN PRESIDENT & CEO 5
Slide 6: Our Vision
To be our customers’ most Our VISION valued and trusted business partner 6
Slide 7: Joel Grade, EVP & CFO
YEARS STON THEBEGINNING 4 JOEL GRADE EVP & CFO
Slide 8: 2Q20 Financial Results
2Q20 FINANCIAL RESULTS 1 Total Sysco 2Q20 Sales $15.0B 1.8% Gross Profit $2.8B 2.0% Adj. Operating Income1 $627M 3.9% Adj. EPS1 $0.85 13.2% 1 See Non-GAAP reconciliations at the end of the presentation. 8
Slide 9: U.S. Foodservice Operations Delivered Improved Local Case Growth
U.S. FOODSERVICE OPERATIONS DELIVERED IMPROVED LOCAL CASE GROWTH U.S. Foodservice Operations 2Q20 1 Sales $10.4B 3.2% Gross Profit $2.0B 2.4% Adj. OPEX1 $1.3B 1.0% Adj. Operating Income1 $772M 4.7% 1 See Non-GAAP reconciliations at the end of the presentation. 1 See Non-GAAP reconciliations at the e
Slide 10: Mixed Results in Our International Business
WE HAD MIXED RESULTS IN OUR INTERNATIONAL BUSINESS 1 International Foodservice Operations 2Q20 1 2Q201 CONSTANT CURRENCY 1Q20 Sales $2.9B 0.9% 8.5% $2.9B NM Gross Profit $592M 0.4% $586M 0.7% 7.1% 1.7% 7.1% Adj. OPEX1 $518M 9.7% 2.2% $512M 1.0% Adj. Operating Income1 $74M 11.1% $74M 10.8% 1 See Non-
Slide 11: 1H20 Financial Highlights
1H20 FINANCIAL HIGHLIGHTS 1 Total Sysco 1H20 ($MM, except per share data) Sales $30.3B 1.2% Gross Profit $5.8B 1.7% Adj. OPEX1 $4.4B 0.5% Adj. Operating Income1 $1.4B 5.7% Adj. Net Earnings1 $948M 8.6% Adj. EPS1 $1.83 10.7% 1 See Non-GAAP reconciliations at the end of the presentation. 11
Slide 12: Operating Performance
OPERATING PERFORMANCE Total Sysco Adj. Operating Leverage1 7.0% 5.5% 5.6% 5.7% 2Q201 10 Quarter 1,2 5.0% 3.8% 5.4% 3.9% Average 5.0% 2.7% 2.9% 3.0% 3.4% 3.6% 2.1% 2.0% 1.4% 1.0% 2.7% 2.1% 1.5% 2.0% 3.5% 0.6% -1.0% -0.4% -0.5% -3.0% 1.5% 2.4% 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 GP growt
Slide 13: Free Cash Flow
FREE CASH FLOW 26 WEEKS 26 WEEKS OF FY191 OF FY201 $163M Key Drivers: Cash from Ops $918M $754M • Increased accounts receivables Free Cash Flow $701M $371M • Increased inventories $329M … committed to see cash flow improvements by the end of the fiscal year 1 See Non-GAAP reconciliations at the end
Slide 14: Updated FY18-FY20 Three-Year Plan Guidance
UPDATED FY18-FY20 THREE-YEAR PLAN GUIDANCE Guidance As Anticipated Updated Three- 1 Disclosed on FY18-FY20 Year Plan August 12, 2019 Results Guidance Local Cases 3.0%-3.3% 3.3% On-Plan Total Cases 2.5%-3.0% 2.5% On-Plan On-plan despite continued disciplined Sales 3.5%-4.0% 3.7% On-Plan approach to p
Slide 15: Non-GAAP Reconciliations
Non-GAAP Reconciliations 15
Slide 16: Impact of Certain Items
IMPACT OF CERTAIN ITEMS Our discussion below and elsewhere herein of our results includes certain non-GAAP financial measures that we believe provide important perspective with respect to underlying business trends. Other than free cash flow, any non-GAAP financial measures will be denoted as adjust
Slide 17: Operating Income Target
OPERATING INCOME TARGET We expect to achieve our gross profit, operating income and earnings per share targets under our revised 3-year strategic plan ending fiscal 2020. Our targets and expectations include adjusted operating income and adjusted diluted earnings per share targets. We have revised t
Slide 18: Impact of Certain Items, 2Q20
IMPACT OF CERTAIN ITEMS, 2Q20 Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items (Dollars in Thousands, Except for Share and Per Share Data) 13-Week 13-Week Period Ended Period Ended Period Change Period Dec. 28, 2019 Dec. 29, 2018 in Doll
Slide 19: Impact of Certain Items, 2Q20 (Segment)
IMPACT OF CERTAIN ITEMS, 2Q20 (SEGMENT) Sysco Corporation and its Consolidated Subsidiaries Segment Results Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Applicable Segments (Dollars in Thousands) 13-Week 13-Week Period Ended Period Ended Period Change Period Dec. 28, 2019 Dec. 29,
Slide 20: Impact of Certain Items, 2Q20 (Segment Continued)
IMPACT OF CERTAIN ITEMS, 2Q20 (SEGMENT CONTINUED) SYGMA Sales (GAAP) $ 1,455,893 $ 1,536,607 $ (80,714) -5.3% Gross Profit (GAAP) 124,239 121,537 2,702 2.2% Gross Margin (GAAP) 8.53% 7.91% 62 bps Operating expenses (GAAP) $ 114,378 $ 118,423 $ (4,045) -3.4% Impact of restructuring and transformation
Slide 21: Adjusted Operating Leverage
ADJUSTED OPERATING LEVERAGE Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Total Sysco Operating Leverage (Impact of Certain Items) (Dollars in Thousands) (a) 10 quarter average gross profit (GAAP) 3.5% (b) 10 quarter average operating expenses (GAAP) 2.5% (c
Slide 22: Adjusted Operating Leverage (Continued)
ADJUSTED OPERATING LEVERAGE (CONTINUED) 13-Week 13-Week 13-Week 13-Week 13-Week 13-Week 13-Week 13-Week Period Ended Period Ended Period Change Period Period Ended Period Ended Period Change Period Dec. 29, 2018 Dec. 30, 2017 in Dollars % Change Sep. 29, 2018 Sep. 30, 2017 in Dollars % Change Gross
Slide 23: Operating Income Growth FY18-FY20
OPERATING INCOME GROWTH FY18-FY20 Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Operating Income Growth (In Thousands) Year Ended 3-year Plan Change June 27, 2020 July 1, 2017 $ Results CAGR Operating income (GAAP) $ 2,539,614 $ 2,054,616 $ 484,998 7.3% Impa
Slide 24: Free Cash Flow
FREE CASH FLOW Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Free Cash Flow (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. Sy