Sysco Corporation · NYSE:SYY
Sysco — FY2019 Earnings Presentation
29 slides from Sysco's earnings presentation, 2019
Slide 1: Sysco Earnings Results 4Q19 & FY19
SYSCO EARNINGS RESULTS 4Q19 & FY19
Slide 2: Forward Looking Statements
Forward Looking Statements Statements made in this presentation or in our earnings call for the fourth quarter of fiscal 2019 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: Tom Bené, Chairman, President & CEO
Tom Bené Chairman, President & CEO 3
Slide 4: Our Vision
To be our customers’ most Our VISION valued and trusted business partner
Slide 5: Sysco Reported Improved Year-over-Year Results for Fiscal 19
SYSCO REPORTED IMPROVED YEAR-OVER-YEAR RESULTS FOR FISCAL 2019, SALES EXCEED $60 BILLION 1 Total Sysco FISCAL 2019 Sales $60.1B 2.4% Gross Profit $11.4B 2.9% Adj. Operating Income $2.7B 7.9% Adj. EPS $3.55 13.1% 1 See Non-GAAP reconciliations at the end of the presentation. 5
Slide 6: U.S. Foodservice Operations Fiscal Year 2019 Results
U.S. FOODSERVICE OPERATIONS FISCAL YEAR 2019 RESULTS INCLUDE 4.4% ADJUSTED OPERATING INCOME GROWTH U.S. Foodservice Operations FY19 Sales $41.3B 4.2% Gross Profit $8.2B 4.4% Adj. OPEX $5.1B 4.4% Adj. Operating Income $3.2B 4.4% 1 See Non-GAAP reconciliations at the end of the presentation. 6
Slide 7: International Business Fiscal 2019 Results
WE SAW MIXED RESULTS IN OUR INTERNATIONAL BUSINESS DURING FISCAL 2019; WITH ADJUSTED OPERATING INCOME GROWING 10.7% 1 International Foodservice Operations FY19 Sales $11.5B 0.2% 8.5% Gross Profit $2.4B 1.8% 7.1% Adj. OPEX $2.0B 9.7% 3.7% Adj. Operating Income $354.8M 10.7% 1 See Non-GAAP reconciliat
Slide 8: Joel Grade, EVP & CFO
Joel Grades _EVP&CFO :. |
Slide 9: 4Q19 & FY19 Financial Highlights
4Q19 & FY19 FINANCIAL HIGHLIGHTS 1 1 Adjusted Adjusted $MM, except 4Q19 YoY % Change FY19 YoY % Change per share data Sales $15,475 1.0% $60,114 2.4% Gross Profit $2,979 2.1% $11,409 2.9% Adj. Operating $2,161 0.6% $8,676 1.4% Expense Adj. Operating $818 6.6% $2,733 7.9% Income Adj. Net $573 15.1% $
Slide 10: Operating Performance
OPERATING PERFORMANCE Total Sysco Adj. Operating Leverage1 7.0% 8 Quarter 1 1,2 4Q19 5.7% 5.5% 5.6% Average 5.0% 3.8% 5.4% 3.9% 5.0% 2.7% 2.9% 3.0% 3.4% 3.6% 2.1% 1.0% 2.7% 2.1% 2.1% 4.0% 0.6% -1.0% -0.4% -3.0% 0.6% 2.9% 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 GP growth OPEX growth … for Q4 2019 and
Slide 11: Meaningful Free Cash Flow of $1.74B for Fiscal 2019
WE CONTINUE TO GENERATE MEANINGFUL FREE CASH FLOW, ACHIEVING $1.74B FOR FISCAL YEAR 2019 52 WEEKS 52 WEEKS OF FY181 OF FY191 Cash from Ops $2.16B $2.41B $255.8M Free Cash Flow $1.49B $1.74B $249.9M 1 See Non-GAAP reconciliations at the end of the presentation.
Slide 12: Our ROIC Has Steadily Improved Over the Last Few Years
OUR ROIC HAS STEADILY IMPROVED OVER THE LAST FEW YEARS 18.0% 16.4% 16.0% 15.3% 14.7% 14.0% 13.0% 12.9% 12.0% 10.6% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% FY17 FY18 FY19 ROIC Adj. ROIC 1 1 See Non-GAAP reconciliations at the end of the presentation. Rolling 12-month returns as of June
Slide 13: Disciplined Approach to Capital Allocation
WE MAINTAIN A DISCIPLINED APPROACH TO CAPITAL ALLOCATION FY19 AND RECENT ACQUISITIONS 1. Investing in the business for long-term growth 2. Consistently growing the dividend 3. Participating in strategic M&A 4. Balanced approach to debt paydown and opportunistic share repurchases 13
Slide 14: Tom Bené, Chairman, President & CEO
Tom Bené Chairman, President & CEO 14
Slide 15: Updated FY18-FY20 Three-Year Plan Guidance
UPDATED FY18- FY20 THREE-YEAR PLAN GUIDANCE Guidance As Disclosed on Updated Three-Year May 31, 2019 Plan1 Guidance Total: 2.5%-3.0% Total: 2.5%-3.0% Cases Local: 3.0%-3.3% Local: 3.0%-3.3% Sales 3.5%-4.0% 3.5%-4.0% Gross Profit 3.5%-4.0% 3.5%-4.0% Adjusted Operating ~8.5% ~8% Income Low end of $650
Slide 16: We Delivered a Strong FY2019 and Feel Confident in Long-Term Success
WE DELIVERED A STRONG FY2019 AND FEEL CONFIDENT IN OUR ABILITY TO ACHIEVE SUCCESS OVER THE LONG-TERM • We saw improved year-over-year results for fiscal 2019, including: • Solid adjusted operating income growth of 7.9% • Double digit adjusted EPS growth • Strong cash flow and balance sheet • While i
Slide 17: Non-GAAP Reconciliations
Non-GAAP Reconciliations 17
Slide 18: Impact of Certain Items
SUMMARY 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 a
Slide 19: Operating Income Target
SUMMARY OPERATING INCOME TARGET We expect to achieve our gross profit, operating income and earnings per share targets under our 3-year strategic plan by fiscal 2020. We cannot predict with certainty when we will achieve these results or whether the calculation of our gross profit, operating income
Slide 20: Impact of Certain Items, FY19
SUMMARY IMPACT OF CERTAIN ITEMS, FY19 Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items (In Thousands, Except for Share and Per Share Data) 52-Week 52-Week Period Ended Period Ended Period Change Period Jun. 29, 2019 Jun. 30, 2018 in Doll
Slide 21: Impact of Certain Items, FY19 (Continued)
SUMMARY IMPACT OF CERTAIN ITEMS, FY19 (CONTINUED) Diluted earnings per share (GAAP) $ 3.20 $ 2.70 $ 0.50 18.5% Impact of restructuring and transformational project costs (1) 0.62 0.21 0.41 NM Impact of acquisition-related costs (2) 0.15 0.20 (0.05) -25.0% Impact of gain on sale of Iowa Premium (0.13
Slide 22: Impact of Certain Items, FY19 (Segment)
SUMMARY IMPACT OF CERTAIN ITEMS, FY19 (SEGMENT) Sysco Corporation and its Consolidated Subsidiaries Segment Results Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Applicable Segments (In Thousands, Except for Share and Per Share Data) 52-Week 52-Week Period Ended Period Ended Period
Slide 23: Impact of Certain Items, FY19 (Segment Continued)
SUMMARY IMPACT OF CERTAIN ITEMS, FY19 (SEGMENT CONTINUED) SYGMA Operating expenses (GAAP) $ 477,858 $ 486,960 $ (9,102) -1.9% Impact of restructuring and transformational project costs (3) (2,609) - (2,609) NM Operating expenses adjusted for certain items (Non-GAAP) $ 475,249 $ 486,960 $ (11,711) -2
Slide 24: Impact of Certain Items, 4Q19
SUMMARY IMPACT OF CERTAIN ITEMS, 4Q19 Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items (In Thousands, Except for Share and Per Share Data) 13-Week 13-Week Period Ended Period Ended Period Change Period Jun. 29, 2019 Jun. 30, 2018 in Doll
Slide 25: Impact of Certain Items, 4Q19 (Segment)
SUMMARY IMPACT OF CERTAIN ITEMS, 4Q19 (SEGMENT) Sysco Corporation and its Consolidated Subsidiaries Segment Results Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Applicable Segments (In Thousands, Except for Share and Per Share Data) 13-Week 13-Week Period Ended Period Ended Period
Slide 26: Adjusted Operating Leverage
SUMMARY ADJUSTED OPERATING LEVERAGE Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Total Sysco Operating Leverage (impact of Certain Items) (In Thousands) (a) 8 quarter average gross profit (GAAP) 4.0% (b) 8 quarter average operating expenses (GAAP) 3.4% (c)
Slide 27: Adjusted Operating Leverage (Continued)
SUMMARY ADJUSTED OPERATING LEVERAGE (CONTINUED) 13-Week Period 13-Week 13-Week 13-Week 13-Week 13-Week 13-Week 13-Week Ended Period Ended Period Change Period Period Ended Period Ended Period Change Period Jun. 30, 2018 Jul. 1, 2017 in Dollars % Change Mar. 31, 2018 Apr. 1, 2017 in Dollars % Change
Slide 28: Free Cash Flow
SUMMARY 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 equip
Slide 29: Adjusted Return on Invested Capital
SUMMARY ADJUSTED RETURN ON INVESTED CAPITAL Adjusted Return on Invested Capital (ROIC) We calculate ROIC as net earnings divided by (i) stockholder’s equity, computed as the average of adjusted stockholders’ equity at the beginning of the year and at the end of each fiscal quarter during the year ex