Sysco Corporation · NYSE:SYY
Sysco — Q1 FY2015 Earnings Presentation
19 slides from Sysco's earnings presentation, Nov 3, 2014
Slide 1: Sysco 1Q15 Earnings Results
Sysco 1Q15 Earnings Results November 3, 2014
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements made in this presentation, the earnings press release or in our earnings call for the first quarter of fiscal 2015 that look forward in time or that express management’s beliefs, expectations or hopes are forward-looking statements within the meaning of the Priv
Slide 3: 1Q15 Highlights
1Q15 Highlights Results Adjusted for Reported Certain Items1 $ Millions, except YOY % YOY % 1Q15 1Q15 share data Change Change Sales $12,445 6.2% $12,445 6.2% Gross Profit $2,189 6.0% $2,189 6.0% Operating $1,723 8.6% $1,680 6.0% Expenses Operating $466 (2.6%) $509 5.9% Income Net Earnings $279 (2.4
Slide 4: Inflation Contributes to Increased Sales; Restaurant Traffic Remains Stagnant
Inflation Contributes to Increased Sales; Restaurant Traffic Remains Stagnant Restaurant Spend/Traffic (1) U.S. Retail Data(2) % Change vs. Year Ago % Change vs. Year Ago 8.0% 7.1% 4.0% 3.2% 7.0% 2.9% 3.0% 2.7% 2.5% 2.4% 6.0% 2.1% 2.2% 2.1% 1.9% 2.0% 2.0% 1.7% 5.0% 1.3% 0.9% 4.0% 1.0% 4.3% 3.0% 0.0%
Slide 5: Business Transformation Progress
Business Transformation Progress Successful execution SAP software upgrade Technology Continued focus on post-merger integration planning and sequencing Remainder of categories to be launched into the Lower Product Costs market by the end of FY15 Year-over-year benefits begin to moderate in
Slide 6: Key Investments in Our Business
Key Investments in Our Business Revenue Customers 1st Urban Management Demographic Markets Ongoing listening Markets initiative aimed at Branding and identifying Sales and margin sales initiative opportunities to Program targeted management tailored to drive enhanced at authentically training initia
Slide 7: Key Takeaways
Key Takeaways We are pleased with our solid operating performance in 1Q15 Business environment remains challenging -- marked by high inflation, stagnant restaurant traffic, constrained consumer spending We are encouraged by our progress in implementing our portfolio of business transformation
Slide 8: 1Q15 Highlights
1Q15 Highlights Results Adjusted for Reported Certain Items1 $ Millions, except YOY % YOY % 1Q15 1Q15 share data Change Change Sales $12,445 6.2% $12,445 6.2% Gross Profit $2,189 6.0% $2,189 6.0% Operating $1,723 8.6% $1,680 6.0% Expenses Operating $466 (2.6%) $509 5.9% Income Net Earnings $279 (2.4
Slide 9: Inflation Contributes Significantly to Sales Growth
Inflation Contributes Significantly to Sales Growth (1) Sales Growth Case Growth 6.2% 5.9% 5.7% 4.1% 4.3% 4.1% 3.2% 3.0% 2.2% 2.3% 1Q14 2Q14 3Q14 4Q14 1Q15 1Q14 2Q14 3Q14 4Q14 1Q15 Inflation Other Organic Acquired (1) Includes Broadline and SYGMA 9
Slide 10: Improving Gross Profit Performance Trend
Improving Gross Profit Performance Trend Gross Profit ($ Growth) YOY Change in Gross Margin (bps) 6.0% (4) (9) (19) 4.0% (28) (31) (32) 2.7% (60) (60) 1.8% (68) 0.7% 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 Q114 Q214 Q314 Q414 Q115 Category Management benefits gross profit performance 10
Slide 11: 1Q15 Operating Expenses
1Q15 Operating Expenses (YOY change; $ in millions) Reported operating expense +8.6% Adjusted1 operating expense +6.0% Cost per case2 increased 12 cents 28 41 67 $1,723 $1,587 1Q14 Payroll Certain Other 1Q15 Items 1 See Non-GAAP reconciliations at the end of this presentation 2 North America B
Slide 12: Prudently Managing Capital Expenditures
Prudently Managing Capital Expenditures ($ millions) Gross Capex Net Capex $136 140 1.5% $119 130 120 1.2% 110 0.9% 100 90 0.6% 80 70 0.3% 60 50 0.0% 1Q14 1Q15 1Q14 2Q14 3Q14 4Q14 1Q15 Net CAPEX Net CAPEX as a % of Sales Technology/Other Fleet Facilities 12
Slide 13: Free Cash Flow
Free Cash Flow 1Q15 free cash flow lower due to pension contributions and certain items $ Millions 1Q15 1Q14 % Chg Cash Flow from Operations $63 $169 (63%) Capital Expenditures, net1 (118) (125) 12.5% Free Cash Flow2 ($55) $44 NM Dividends Paid $170 $164 3.6% 1) Capital expenditures are net of proce
Slide 14: US Foods Merger Update
US Foods Merger Update FTC discussions continue to be productive Completed $5 billion debt offering on Oct. 2nd Do not expect merger to close before 1Q of CY15 14
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Slide 16: Non-GAAP Reconciliations
Non-GAAP Reconciliations 16
Slide 17: Non-GAAP Reconciliations
Non-GAAP Reconciliations Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items (In Thousands, Except for Share and Per Share Data) Sysco’s results of operations are impacted by certain items which include severance charges, US Foods merger an
Slide 18: Non-GAAP Reconciliations
Non-GAAP Reconciliations 13-Week 13-Week 13-Week 13-Week Period Ended Period Ended Period Change Period Sep. 27, 2014 Sep. 28, 2013 in Dollars % Change Operating expenses (GAAP) $ 1,723,104 $ 1,587,289 $ 135,815 8.6 % Impact of severance charges (1,804) (1,582) (222) 14.0 Impact of US Foods merger a
Slide 19: Non-GAAP Reconciliations
Non-GAAP Reconciliations 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 equ