Sysco reported financial results for Q4 and full year FY2023. For Q4, net sales increased 4.1% to $19.7 billion and adjusted EPS grew 16.5% to $1.34. US Foodservice sales grew 2.5% and adjusted operating income increased 9.8% to $1 billion. International sales increased 12.2% and adjusted operating income grew 58% to $145 million. For FY2023, net sales increased 11.2% to $76.3 billion and adjusted EPS grew 23.4% to $4.01, a record for the company. US Foodservice sales grew 10.6% and adjusted operating income increased 13.5
2023 Barclays Global Consumer Staples Conference.pdfSYYIR
The document provides forward-looking statements regarding Sysco's expectations and beliefs about its future financial performance and growth opportunities. It notes several risks and uncertainties that could cause actual results to differ from expectations. The document also provides an overview of Sysco's fiscal year 2023 financial results, including record sales of $76.3 billion and adjusted earnings per share of $4.01. Sysco reiterates its fiscal year 2024 guidance of net sales growth in the mid-single digits percent range and adjusted EPS growth between 5-10%.
SYY CAGNY 2024 PRESENTATION (February 20, 2024)SYYIR
This document provides forward-looking statements and discusses Sysco's expectations for fiscal year 2024. Some of the key points include:
- Sysco expects mid-single digit sales growth to $80 billion and 5-10% adjusted EPS growth to a range of $4.20 to $4.40 for fiscal year 2024.
- Sysco believes its Recipe for Growth strategy and strategic priorities will enable it to consistently outperform the market.
- The document outlines various risks and uncertainties that could cause actual results to differ from Sysco's expectations.
Sysco reported its fourth quarter and full year 2022 earnings results. Key highlights included 26.5% comparable revenue growth compared to Q4 2021 and outperforming the broader foodservice market by over 1.3x for the full year. Adjusted EBITDA increased 44.5% compared to Q4 2021. International Foodservice Operations achieved five consecutive quarters of profitability. Sysco invested $67 million in transformation initiatives during the quarter while continuing to navigate inflation.
The strategy overview document outlines Lowe's strategic initiatives to improve performance over the near and long-term. It discusses plans to enhance the value proposition for customers, invest more in store labor, and better promote products. Lowe's also evaluates opportunities in new markets like Canada, Mexico, and Australia. The overall goal is to deliver top-line growth, increased profitability, and strong cash flows through operational excellence and disciplined capital allocation.
Sysco reported strong third quarter fiscal year 2016 results with sales increasing 2.2% and adjusted operating income growing 16%. However, the company continues to face mixed industry and economic trends, with restaurant traffic growth slowing while unemployment rates remain low. Sysco is making progress on its three-year plan through local case volume growth, gross margin expansion, supply chain cost reductions, and administrative cost cuts. The company remains focused on executing its strategy to improve return on invested capital and achieve its financial targets.
Evine earnings investor presentation f16 q4evine2015
The company reported improved financial results for the fourth quarter and full year 2016. Key highlights include:
- Adjusted EBITDA increased 31% in Q4 2016 and 76% for the full year 2016 compared to the prior year periods.
- Gross profit margin improved 260 basis points in Q4 2016 and 190 basis points for the full year, driven by balancing the merchandising mix.
- Net income increased 207% in Q4 2016 and 29% for the full year 2016, reflecting profitability gains.
- Digital sales grew to 52% of total sales in Q4 2016, up from 49% in the prior year, and purchase frequency on digital platforms increased 11%.
So in
- The document is an investor presentation from September 2017 that outlines the company's strategies and focus areas.
- The company has identified four focus areas to improve performance: evolving the customer experience, strengthening brand positioning, leveraging retail science, and sharpening financial principles.
- It is executing cost savings initiatives with a goal of $100-110 million in annual savings, having already achieved $30 million in the first year.
Evine investor presentation sept 2016 finalevine2015
- Evine is a digital commerce company that merges shopping and entertainment through TV, online, and mobile platforms.
- In Q2 2016, Evine reported a 2% decrease in net sales but improved gross profit margin by 160 basis points and increased adjusted EBITDA by over 50% compared to Q2 2015.
- The company has a new leadership team focused on driving profitable growth through initiatives like improving the quality of merchandise and customer experience.
- Evine is a digital commerce company that merges shopping and entertainment through TV, online, and mobile platforms.
- In Q2 2016, Evine reported a 2% decrease in net sales but improved gross profit margin by 160 basis points and increased adjusted EBITDA by over 50% compared to Q2 2015.
- The company has a new leadership team focused on driving profitable growth through initiatives like improving the quality of merchandise and customer experience.
Winn Dixie Stores outlined its multi-year turnaround strategy including rebuilding trust in its brand, investing in store remodels, merchandising for local neighborhoods, training associates, and achieving profitable sales. Early progress includes adjusted EBITDA of $85.9 million compared to a loss last year and a 1.6% identical store sales increase. The company's remodel program is underway with 24 stores remodeled as of Q1 FY2008 and plans to remodel 75 stores per year. Winn Dixie aims to increase its corporate brand penetration and profitability through these initiatives.
Winn Dixie Stores outlined its multi-year turnaround strategy including rebuilding trust in its brand, investing in store remodels, merchandising for local neighborhoods, training associates, and achieving profitable sales. Early results showed progress with adjusted EBITDA of $85.9 million compared to a loss last year. The company planned to remodel 75 stores in fiscal year 2008 at a cost of $140 million to drive sales increases.
- Workday reported financial results for Q1 FY23 with total revenue of $1.43B, up 22% year-over-year, and subscription revenue of $1.27B, up 23% year-over-year.
- Non-GAAP operating margin for Q1 FY23 was 20.1%, down 450 basis points from the prior year.
- For Q2 FY23, Workday expects total revenue between $1.517-1.519B, up 20-21% year-over-year, and non-GAAP operating margin of 17.5%, down 570 basis points.
- For FY23, Workday expects total revenue between
This document provides forward-looking statements and discusses risks and uncertainties that could impact Sysco's targeted financial and operational results for fiscal years 2018 through 2020. It outlines Sysco's strategic business plan focusing on optimizing sales to local and multi-unit customers, delivering operational excellence, engaging employees, and optimizing the business. The document discusses Sysco's expectations for growth in key financial metrics like operating income and return on invested capital through fiscal year 2020 and underlying assumptions. It also covers Sysco's capital allocation plans including capital expenditures and acquisitions.
The document is an investor presentation that provides an overview of Chico's FAS, Inc. It summarizes the company's portfolio of women's apparel brands including Chico's, White House Black Market, and Soma. It outlines the company's strategic focus areas to drive growth, including evolving the customer experience, strengthening brand positioning, leveraging retail science, and sharpening financial principles. It also details cost savings initiatives and the company's plan to achieve double digit operating margins. Finally, it discusses international expansion as a future growth opportunity.
Sysco is presenting at a consumer conference to discuss its strategic plan and financial objectives over the next three years. The plan focuses on growing gross profit through local case growth and margin improvement, reducing supply chain and administrative costs, and leveraging technology and people. Sysco has achieved $410 million in operating income improvements so far, is on track to meet EPS targets, and has a ROIC of 13.1%, demonstrating strong initial results toward its three-year goals.
Sysco provided forward-looking statements regarding its strategic business plan from FY18-FY20. It discussed plans to optimize and grow its local and multi-unit account segments, deliver operational excellence through leveraging its portfolio and supply chain, and engage employees. It noted risks include economic conditions, competition, initiatives not achieving benefits, and international expansion challenges. Sysco stated its vision is to be customers' most valued partner and discussed its leadership position, growth priorities, sales capabilities, brand portfolio, international opportunities, and history of acquisitions.
Sysco reported third quarter fiscal 2022 earnings results. Key highlights include:
- U.S. Broadline case volume increased 18.8% compared to fiscal 2019, exceeding pre-pandemic levels.
- Total sales increased 15.3% compared to fiscal 2019, with continued market share gains.
- Gross profit per case increased across all operating segments for the third consecutive quarter.
- Adjusted EBITDA increased 72.8% compared to the prior year quarter, though was down only 3% from fiscal 2019 levels despite various challenges.
Sysco reported financial results for its second quarter of fiscal year 2022. While sales growth increased 10.5% compared to pre-pandemic levels in fiscal 2019, profitability was negatively impacted by staffing challenges, higher labor costs, and supply chain issues. Adjusted EBITDA was over $671 million, an increase compared to last year but hampered by current operational headwinds. The company expects to exceed its prior guidance of growing 1% faster than the overall foodservice market in fiscal 2022. Snap-back and transformation investments increased costs this quarter but are expected to improve for the remainder of the fiscal year.
Sysco reported first quarter 2022 earnings results. Sales increased 8.2% compared to the first quarter of fiscal year 2019. While profitability exceeded expectations, the company continued investing aggressively to fund growth. The company is on track with its business transformation agenda and strategic priorities to drive long-term growth and take additional market share. Sysco reiterated its guidance for fiscal year 2022 and expects to begin share repurchases in the second quarter.
Sysco reported their fourth quarter and full year 2021 earnings results. The document discusses forward-looking statements and risks that actual results could differ from expectations. It outlines uncertainties around the continued impact of COVID-19, inflation, competition, supply chain challenges, and efforts to reduce costs and drive growth.
Sysco reported third quarter fiscal year 2021 earnings results. Key highlights include:
- Sales were $11.8 billion, an increase of 13.7% compared to the prior year.
- Adjusted operating expenses increased 17.2% and adjusted operating income increased 32.0% compared to the prior year.
- Adjusted earnings per share were $0.22, an increase of 51.1% compared to the prior year.
- The business recovery from the pandemic is accelerating, with Sysco gaining market share by adding new independent customers.
- Sysco remains focused on managing the business recovery and building customer-centric capabilities to drive long-term growth.
Sysco reported its second quarter fiscal 2021 earnings results. Despite a 23% decline in total sales due to the COVID-19 pandemic, Sysco delivered a profitable quarter through investments in its business transformation initiatives. Sysco gained overall market share compared to the rest of the foodservice distribution industry during this difficult period. Looking ahead, Sysco is well positioned for the economic recovery through investments in its customers, employees, working capital, and technology. Sysco's leadership is confident that the company's transformation strategy will drive long-term accelerated growth as restrictions ease and the economy recovers.
Sysco reported earnings results for the first quarter of fiscal year 2021. Total sales declined 23% to $11.8 billion due to the COVID-19 pandemic negatively impacting restaurant customers. However, the company delivered $365 million in adjusted operating income and strong positive free cash flow of $862 million for the quarter through cost savings initiatives. Sysco remains well positioned with over $8 billion in cash and liquidity as management continues transforming the business for long-term growth.
Sysco reported their 4th quarter and full year 2020 earnings results. Some key highlights include:
- The COVID-19 pandemic significantly impacted their financial results.
- They implemented various business transformation initiatives to increase efficiency and market share.
- Looking forward, they expect economic recovery to be gradual and have uncertainty around the pandemic's duration and effects.
- Several risks and challenges were also noted around inflation, competition, fuel costs, and successfully realizing benefits from their strategic plans.
Sysco reported third quarter fiscal 2020 earnings results on May 5th. Key highlights include:
- Sales decreased 6.5% to $13.7 billion due to the COVID-19 pandemic negatively impacting business.
- Adjusted operating income decreased 39.2% to $377 million and adjusted EPS decreased 43% to $0.45.
- The company has taken actions to strengthen liquidity, stabilize the business by reducing costs, and create new revenue sources to position it for success after COVID-19.
- Sysco had more than $6 billion in available liquidity as of the end of the quarter to weather the current challenges and emerge stronger.
Sysco reported their 3Q FY20 earnings results. Some key highlights include:
- The COVID-19 pandemic has significantly impacted their business and the global economy.
- They are focused on managing costs and capitalizing on their industry leadership as the economy recovers.
- Several risks and uncertainties remain around the ongoing impact of the pandemic on their operations and financial results.
- Sysco provided forward-looking statements and discussed risks and uncertainties that could impact financial performance.
- The presentation discussed Sysco's four strategic priorities to accelerate growth and position the company for the future: enhancing customer-facing tools, being the most efficient operator, pursuing multiple avenues of growth, and being enabled by empowered employees.
- An update was provided on Sysco's three-year financial plan through fiscal 2020, indicating performance is on plan despite challenges, and that investments are being made to address areas of underperformance and accelerate growth.
- SYSCO reported 2Q FY20 earnings results, with sales of $15.0B, up 1.8% over the prior year period. Adjusted operating income was $627M, up 3.9%.
- U.S. Foodservice operations delivered improved local case growth of 2.4%, with sales of $10.4B and adjusted operating income of $772M, up 3.2%.
- International Foodservice operations saw mixed results, with sales of $2.9B up 7.1% on a constant currency basis but adjusted operating income of $74M flat compared to the prior year period.
- Management updated guidance for its three-year strategic plan through
- Sysco reported first quarter fiscal year 2020 results that were largely in line with expectations. Sales increased 0.6% to $15.3 billion while adjusted operating income rose 7.3% and adjusted earnings per share grew 8.6%.
- In the US Foodservice segment, sales increased 2.5% and adjusted operating income grew 2.6% despite a 0.4% increase in adjusted operating expenses.
- The International Foodservice segment reported improved results with sales up 8.5% in constant currency and adjusted operating income increasing 7.1%.
- Sysco remains confident in its ability to achieve the targets of its three-year strategic plan based on its continued focus on improving the customer
SYSCO reported improved financial results for fiscal year 2019 compared to 2018. Total sales increased 2.4% to over $60 billion. Adjusted operating income grew 7.9% and adjusted earnings per share increased 13.1%. The US Foodservice Operations segment achieved 4.4% adjusted operating income growth. The International segment saw adjusted operating income growth of 10.7%. Sysco generated $1.74 billion in free cash flow for the fiscal year. Management remains focused on achieving the targets of its three-year plan and continuing to improve the customer experience.
Sysco is experiencing softer than expected sales volume growth in the current quarter. However, the company remains committed to achieving its three-year financial targets through fiscal 2020. Key initiatives around customer experience improvements and operational excellence remain on track. Sysco is also making progress on cost savings initiatives that are designed to streamline efficiencies and reinvest in growth. While softer sales pose risks to the low end of Sysco's operating income growth target range, the company's fundamentals remain strong with consistent execution on strategic priorities.
- SYSCO reported 3Q19 earnings results. The document provides forward-looking statements regarding SYSCO's strategic priorities and expectations for growth, cost savings initiatives, and meeting financial targets through fiscal year 2020. However, these statements are subject to risks including economic conditions, competition, inflation, supply chain disruptions, acquisitions not performing as expected, and other factors.
Consumer Analyst Group of New York (CAGNY) Conference 2019 Sysco_Investors
Sysco provided forward-looking statements regarding its strategic business plan from FY18-FY20. It discussed plans to optimize and grow its local and multi-unit account segments, deliver operational excellence through leveraging its portfolio and supply chain, and engage employees. It noted risks include economic conditions, competition, initiatives not achieving benefits, and international expansion challenges. Sysco stated its vision is to be customers' most valued partner and discussed its leadership position, growth priorities, sales capabilities, brand portfolio, international opportunities, and history of acquisitions.
Sysco reported strong financial results for 4Q18 and FY18, exceeding the targets of its initial three-year plan. Total sales grew 6.1% to $58.7 billion for FY18, driven by local customer growth, new national customers, and acquisitions. Gross profit grew 5.0% for the year due to execution of strategic initiatives like increasing local case volume and expanding assortments. Adjusted operating income increased 8.4% to $2.5 billion for FY18 through top-line growth and managing expenses. The company remains confident in achieving the financial targets of its new three-year plan through fiscal 2020.
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1. Sysco Q4 and FY23
Earnings Results
August 1, 2023
2. Forward-Looking Statements
Statements made in this press release or in our earnings call for the fourth quarter of fiscal year 2023 that look forward in time or that express management’s beliefs, expectations or hopes are forward-looking statements
under the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the views of management at the time such statements are made and are subject to a number of risks, uncertainties,
estimates, and assumptions that may cause actual results to differ materially from current expectations. These statements include statements concerning: the effect, impact, potential duration or other implications of the
COVID-19 pandemic and any expectations we may have with respect thereto; our expectations regarding future improvements in productivity; our belief that improvements in our organizational capabilities will deliver
compelling outcomes in future periods; our expectations regarding improvements in international volume; our expectations that our transformational agenda will drive long-term growth; our expectations regarding the
continuation of an inflationary environment; our expectations regarding improvements in the efficiency of our supply chain; our expectations regarding the impact of our Recipe for Growth strategy and the pace of progress in
implementing the initiatives under that strategy; our expectations regarding Sysco’s ability to outperform the market in future periods; our expectations that our strategic priorities will enable us to grow faster than the market;
our expectations regarding our efforts to reduce overtime rates and the incremental investments in hiring; our expectations regarding the expansion of our driver academy and our belief that the academy will enable us to
provide upward career path mobility for our warehouse colleagues and improve colleague retention; our expectations regarding the benefits of the six-day delivery and last mile distribution models; our plans to improve the
capabilities of our sales team; our expectations regarding the impact of our growth initiatives and their ability to enable Sysco to consistently outperform the market; our expectations to exceed our growth target by the
end of fiscal 2024; our ability to deliver against our strategic priorities; economic trends in the United States and abroad; our belief that there is further opportunity for profit in the future; our future growth, including
growth in sales and earnings per share; the pace of implementation of our business transformation initiatives; our expectations regarding our balanced approach to capital allocation and rewarding our
shareholders; our plans to improve colleague retention, training and productivity; our belief that our Recipe for Growth transformation is creating capabilities that will help us profitably grow for
the long term; our expectations regarding our long-term financial outlook; our expectations of the effects labor harmony will have on sales and case volume, as well as mitigation expenses;
our expectations for customer acquisition in the local/street space; our expectations regarding the effectiveness of our Global Support Center expense control measures; and our
expectations regarding the growth and resilience of our food away from home market.
It is important to note that actual results could differ materially from those projected in such forward-looking statements based on numerous factors, including those outside
of Sysco’s control. For more information concerning factors that could cause actual results to differ from those expressed or forecasted, see our Annual Report on
Form 10-K for the year ended July 2, 2022, as filed with the SEC, and our subsequent filings with the SEC. We do not undertake to update our forward-looking statements,
except as required by applicable law.
2
4. F o o d S u p p l y C h a i n F o o d S a l e s &
M a r k e t i n g
5. Q4: Volume Growth, Operating Expense
Leverage and Solid Profitability
Fiscal Q4 2023 Highlights
+2.3% +5.7% +57 bps $1.2 billion $1.34
U.S. Foodservice
Volume increase vs.
fiscal Q4 2022
Adjusted gross profit1 $
growth and adjusted gross
profit margin expansion of
28 bps vs. fiscal Q4 2022
Adjusted operating income
margin1 expansion; strong
operating expense leverage vs.
fiscal Q4 2022
Adjusted EBITDA1 in the
quarter was 14.4% higher
than fiscal Q4 2022
Adjusted EPS1 grew
+16.5% vs. fiscal
Q4 2022
5
1 See Non-GAAP reconciliations at the end of the presentation.
+4.1%
Revenue growth compared to
fiscal Q4 2022
$2.1 billion
free cash flow +79%
compared to fiscal 2022
+16.5%
Adjusted EPS growth
compared to fiscal Q4 2022
2.5x
Net Debt to Adjusted EBITDA
Ratio1
6. FY2023 Total Sysco Sales
$76.3B
In Annual Sales
~725K
Customer Locations
~7,500
Sales Consultants
72K+
Colleagues Across
the Globe
IFG
Operations
6
Sysco is the Backbone of the Food Away From
Home Industry and Growing Share
8%
Travel and Leisure
62%
Restaurants
7%
Healthcare
15%
Other
8%
Education
and Government
7. USFS: Sequential Improvement with Adjusted Operating
Expense and Strong Q4 Exit Rate
7
22.3%
7.3%
Adj. Opex
Growth
Volume
Growth
(1500 bps)
17.0%
5.2%
Volume
Growth
(1180 bps)
10.4%
6.1%
Volume
Growth
(430 bps)
0.5%
2.3%
Volume
Growth
+180 bps
Adj. Opex
Growth
Adj. Opex
Growth
Adj. Opex
Growth
Q1 FY23
YoY
Q2 FY23
YoY
Q3 FY23
YoY
Q4 FY23
YoY
6.7%
6.0%
6.5%
7.7%
Q1'23 Q2'23 Q3'23 Q4'23
ADJUSTED OPERATING INCOME
(% of Sales)
Overview
• Sequential improvement in
operating expenses throughout
the year.
• Strong Q4 exit rate, with U.S.
Foodservice volume growth
exceeding adjusted operating
expense growth
• Proactive efforts with supply
chain efficiencies and cost outs
are driving sequential improvement
in operating leverage. Snap-back
productivity costs and excess
overtime costs reduced to zero
during FY 2023.
• Our efforts are driving improved
margins, with adjusted operating
margins increasing 100 bps since
the start of the year.
8. Our Recipe for Growth
DIGITAL
Enrich the customer experience through personalized digital tools that reduce friction in
the purchase experience and introduce innovation to our customers
PRODUCTS AND SOLUTIONS
Customer focused marketing and merchandising solutions that inspire increased sales of
our broad assortment of fair priced products and services
SUPPLY CHAIN
Efficiently and consistently serve customers with the products they need, when and
how they need them, through a flexible delivery framework
FUTURE HORIZON
We are committed to responsible growth. We will cultivate new channels, segments and
capabilities while being stewards of our company and our planet for the long-term. We
will fund our journey through cost-out and efficiency improvements
CUSTOMER TEAMS
Our greatest strength is our people. People who are passionate about food and food
service. Our diverse team delivers expertise and differentiated services designed to help
our customers grow their business
IDENTITY | Our Role
Together we define the future of
foodservice and supply chain
MISSION | Our What
Delivering success for our
customers through industry-leading
people, products and solutions
PURPOSE | Our Why
Connecting the World to
Share Food and Care for One
Another
STRATEGY | How We Win - We will grow meaningfully faster than the market through our strategic priorities
Sysco Is a Purpose-Driven Organization, Defining the Future of Our Industry
8
9. Recipe for Growth is Delivering Important
Wins
9
• Now available in Spanish with
over 100 new feature
enhancements
• Enhancements drive increase
in product page visits, adding
incremental volume with add-
to-cart purchasing
• Improved search capabilities,
new deals page, and
enhancements around
Specialty
• In >400 neighborhoods
across five countries
• Program delivering
double-digit top- and
bottom-line growth
• Focused on independent
customers in restaurant-
dense neighborhoods
• Service flexibility and
focused team selling
• Over 12K+ customers who are
now in our loyalty program
• Invitation-only loyalty club with
white-glove service
• Includes deliveries up to 6 days
a week and exclusive access to
line-up of rewards and industry
leading restaurant solutions
10. Market Leader in the Highly Fragmented and Growing
Foodservice Distribution Industry
$161 B
$197 B
$224 B
$268 B
$231 B
$300 B
$353 B
2000 2005 2010 2015 2020 2021 2022
Total Addressable Market Since 2000
10
Technomic U.S. Foodservice Industry Wallchart for Calendar Year, updated May 2023
17%
$353 B
11. Food Away From Home Continues to Gain
Share
30%
35%
40%
45%
50%
55%
60%
65%
70%
Jun-93
Jun-94
Jun-95
Jun-96
Jun-97
Jun-98
Jun-99
Jun-00
Jun-01
Jun-02
Jun-03
Jun-04
Jun-05
Jun-06
Jun-07
Jun-08
Jun-09
Jun-10
Jun-11
Jun-12
Jun-13
Jun-14
Jun-15
Jun-16
Jun-17
Jun-18
Jun-19
Jun-20
Jun-21
Jun-22
Jun-23
Percentage of Combined Monthly Sales (1993 - 2023)
Grocery Stores Food Services and Drinking Places
40%
45%
50%
55%
60%
Jul-20
Aug-20
Sep-20
Oct-20
Nov-20
Dec-20
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
Jul-22
Aug-22
Sep-22
Oct-22
Nov-22
Dec-22
Jan-23
Feb-23
Mar-23
Apr-23
May-23
Jun-23
Percentage of Combined Monthly Sales (2020 - 2023)
Grocery Stores Food Services and Drinking Places
11
The United States Census Bureau Advance Monthly Sales for Retail and Food Services
12. Sysco is Winning in the Marketplace
Sysco has Outperformed the Total Foodservice Market
100 index
Q1'FY21 Q2'FY21 Q3'FY21 Q4'FY21 Q1'FY22 Q2'FY22 Q3'FY22 Q4'FY22 Q1'FY23 Q2'FY23 Q3'FY23 Q4'FY23
US Foodservice Operations Revenue Indexed to 2019 vs Technomic Market Estimated Indexed to 2019
Sysco US Ops Total Market excl SYY
Sysco US Ops Revenue as of Q4’23 close; Technomic Custom Wall Chart Market & Inflation June 23.
12
14. $1.0
$1.2
Adj. EBITDA1
(billions)
Q4 2023 Consolidated Financial Results
$19.0
$19.7
Net Sales
(billions)
$1.15
$1.34
Adj. EPS1
Q4 2022 Q4 2023
Overview
• Sales increased 4.1% to $19.7 billion
versus the prior year
• USFS +2.5%
• International +12.2%
• SYGMA +1.4%
• Adjusted gross profit grew 5.7% to
$3.7 billion and adjusted gross
margin improved 28 bps to 18.7%
• Fourth consecutive quarter of record
operating income
1
4
Q4 2022 Q4 2023 Q4 2022 Q4 2023
Q4 2023 GAAP Operating Income
+26.5% to $969M
14
1 See Non-GAAP reconciliations at the end of the presentation.
• Product inflation moderated
to 2.1% for the total
enterprise
15. Q4 2023 U.S. Foodservice Results
$13.4
$13.7
Net Sales
(billions)
$1.0
$1.1
Adj. Operating
Income1
(billions)
Overview
• Sales growth of 2.5% to $13.7
billion versus the prior year
• Total case volume grew 2.3% and
local case volume grew 0.8%
• Gross profit increased 4.1% to $2.7
billion.
• Gross margin increased 30 bps to
19.7%
1
5
Q4 2022 Q4 2023 Q4 2022 Q4 2023
Q4 2023 GAAP Operating Income
+9.8% to $1.0 billion
15
1 See Non-GAAP reconciliations at the end of the presentation.
16. Q4 2023 International Results
$3.3
$3.6
Net Sales
(billions)
$92
$145
Adj. Operating
Income1
(millions)
Overview
• Sales increased 12.2%, or 13.6% on a
constant currency basis1
• Gross profit increased 11.1% to $724
million, or 11.9% to $729 million on a
constant currency basis1
• Gross margin decreased 19 bps to
19.9%, or 29 bps to 19.8% on a
constant currency basis1
• Adjusted operating income1 grew
58.0% to $145 million. On a constant
currency basis adjusted operating
income1 grew 59.8% to $147 million
1
6
Q4 2022 Q4 2023 Q4 2022 Q4 2023
Q4 2023 GAAP Operating Income
increased $74 million to $121 million
16
1 See Non-GAAP reconciliations at the end of the presentation.
17. Q4 2023 SYGMA Results
SYGMA
$2.0 $2.0
Net Sales
(billions)
Overview
• SYGMA sales grew 1.4% to $2.0 billion
• Gross profit increased 4.4% to $161
million
• Gross margin of 8.0% increased 23 bps
• Operating expenses declined 7.1%
1
7
Q4 2022 Q4 2023 Q4 2022 Q4 2023
$1
$19
Operating Income
(millions)
17
18. $3.3
$3.8
Adj. EBITDA1
(billions)
FY 2023 Consolidated Financial Results
$68.6
$76.3
Net Sales
(billions)
$3.25
$4.01
Adj. EPS1
FY 2022 FY 2023
Overview
• Sales increased 11.2% to $76.3
billion versus the prior year
• Adjusted gross profit grew 12.6% to
$14.0 billion and adjusted gross
margin improved 22 bps to 18.3%
• Adj. operating income grew 21.7% to
$3.2 billion – the most in the
Company’s history
• Adj. EPS of $4.01 grew 23.4%
compared to the prior year
1
8
FY 2022 FY 2023 FY 2022 FY 2023
FY 2023 GAAP Operating Income
+29.5% to $3.0B
18
1 See Non-GAAP reconciliations at the end of the presentation.
19. FY 2023 U.S. Foodservice Results
$48.5
$53.7
Net Sales
(billions)
$3.2
$3.6
Adj. Operating
Income1
(billions)
Overview
• Sales growth of +10.6% to $53.7 billion
• Total case volume grew 5.2% and local
case volume grew 3.3%
• Gross profit increased 12.6% to $10.4
billion
• Gross margin increased 35 basis points to
19.3%
• Adj. operating income grew 13.5% to
$3.6 billion
1
9
FY 2022 FY 2023 FY 2022 FY 2023
FY 2023 GAAP Operating Income
+12.8% to $3.6 billion
19
1 See Non-GAAP reconciliations at the end of the presentation.
20. FY 2023 International Results
$11.8
$13.6
Net Sales
(billions)
$229
$398
Adj. Operating
Income1
(millions)
Overview
• Sales increased 15.0%, or 22.6% on a
constant currency basis1
• Gross profit increased 11.1% to $2.6
billion, or 18.8% to $2.8 billion on a
constant currency basis1
• Gross margin decreased 69 bps to
19.5%, or 63 bps to 19.5% on a
constant currency basis1
• Adjusted operating income1 grew $169
million to $398 million. On a constant
currency basis adjusted operating
income1 grew 81.2% to $414 million
2
0
FY 2022 FY 2023 FY 2022 FY 2023
FY 2023 GAAP Operating Income
increased $213 million to $313 million
20
1 See Non-GAAP reconciliations at the end of the presentation.
21. FY 2023 SYGMA Results
SYGMA
$7.2
$7.8
Net Sales
(billions)
Overview
• SYGMA sales grew 8.2% to $7.8
billion
• Gross profit increased 9.5% to
$631 million
• Gross margin increased 10 basis
points to 8.1%
• Operating expenses declined 0.8%
2
1
FY 2022 FY 2023 FY 2022 FY 2023
-$3
$57
Operating Income
(millions)
21
22. Historical Q4 Adjusted Operating Income1
2
2
22
1 See Non-GAAP reconciliations at the end of the presentation.
$509 M
$628 M
$667 M
$771 M
$818 M
-$34 M
$605 M
$875 M
$1.0 B
Q4 2015 Q4 2016 Q4 2017 Q4 2018 Q4 2019 Q4 2020 Q4 2021 Q4 2022 Q4 2023
+25.0%
Increase in
Adjusted
Operating
Income1
23. Historical FY Adjusted Operating Income1
2
3
23
1 See Non-GAAP reconciliations at the end of the presentation.
$1.8 B
$2.0 B
$2.4 B
$2.5 B
$2.7 B
$1.7 B
$1.5 B
$2.6 B
$3.2 B
FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23
+17.3%
Increase in
Adjusted
Operating
Income1
24. FY 2023 Cash Flow
$1,791
$2,868
Cash from Operations
(millions)
$1,183
$2,116
Free Cash Flow1
(millions)
Overview
• Cash flow from operations was $2.9
billion, a 60% increase
• Capital expenditures, net of
proceeds from sales of plant and
equipment, were $751 million, with
continued advancement in our
Recipe for Growth, particularly in
our fleet and distribution facilities
• Free cash flow of $2.1 billion grew
79%
• Ended quarter with a cash balance
of $745 million and net debt to
adjusted EBITDA ratio1 of 2.5x
2
4
FY 2022 FY 2023 FY 2022 FY 2023
24
1 See Non-GAAP reconciliations at the end of the presentation.
25. Capital Structure and Allocation
Investment Priority Progress
Invest for Growth
• Capital investments in our technology, fleet and buildings
• Announced the acquisition of BIX Produce within specialty FreshPoint business
• Strong pipeline of tuck-in acquisitions focused on Broadline, Specialty and Cuisine-type opportunities as well
as underpenetrated markets in the U.S., U.K. and Canada
Maintain a Strong
Balance Sheet
• Maintaining a strong IG rating
• Ended FY 2023 with a net debt to adjusted EBITDA1 ratio of 2.5x
• Expect to maintain a net debt to adjusted EBITDA1 ratio of 2.5x-2.75x
• No commercial paper outstanding and 100% of debt is fixed rate
Shareholder Return
• Committed to dividend aristocrat status and previously announced a $0.04 increase to FY 2024 dividend
• During FY 2023, Sysco repurchased 6.2 million shares for $500 million
• Expect to complete approximately $750 million of share repurchases in FY 2024
1
2
3
2
5
1 See Non-GAAP reconciliations at the end of the presentation.
25
1 See Non-GAAP reconciliations at the end of the presentation.
26. $0.7 B
$3.3 B
$5.9 B
$7.6 B
$9.4 B
$11.1 B
$12.0 B
$13.5 B
$15.0 B
FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023
Cumulative Cash Returned to Shareholders
Dividends Shares Repurchased
Sysco Has Consistently Increased
Returns to Shareholders
Over $15 Billion of Cash Returned to Shareholders Through FY 2023
2
6
26
28. Sysco is Winning, Leading the Industry
202
1
• Record adj. operating income and free cash flow in FY 2023
• Strong track record of sales growth, growing annual sales in 51 years
of our 54-year history
• Committed to operating expense leverage and cost controls;
expect incremental $100 million in cost out for FY 2024
• Strong balance sheet, with 2.5x net debt to adjusted EBITDA
ratio1 for FY 2023
• Recipe for Growth initiatives are driving profitable growth
• Positive momentum expected to drive top- and bottom-line growth
for FY 2024
2
8
1 See Non-GAAP reconciliations at the end of the presentation.
28
1 See Non-GAAP reconciliations at the end of the presentation.
29. Investment Thesis
Sysco is Leading the Industry and Accelerating Growth
17% share of a $350B+
U.S. market and currently
driving further share gains
LT financial guidance
includes significant
sales and EPS growth
Our mission, identity and values
form our commitment to being a
purpose-driven company
Expect to grow meaningfully
faster than the total market
Industry leading service
levels & advancing
capabilities
Compelling shareholder returns
(dividend growth for 53 years and
share buybacks)
Healthy Balance Sheet:
only Investment-Grade
Food Service Distributor
Sustainability: Tangible
Science-Based
Climate & DEI Goals
$750+ million cost-out
achieved, with incremental
efforts targeted for FY 2024
29
32. Impact of Certain Items
3
2
The discussion of our results includes certain non-GAAP financial measures, including EBITDA and adjusted EBITDA, 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 adjusted measures to remove the impact of restructuring and transformational project costs consisting of: (1) restructuring charges, (2)
expenses associated with our various transformation initiatives and (3) severance charges; acquisition-related costs consisting of: (a) intangible
amortization expense and (b) acquisition costs and due diligence costs related to our acquisitions; and the reduction of bad debt expense previously
recognized in fiscal 2020 due to the impact of the COVID-19 pandemic on the collectability of our pre-pandemic trade receivable balances. Our
results for fiscal 2023 were also impacted by adjustments to a product return allowance pertaining to COVID-related personal protection equipment
inventory, a pension settlement charge that resulted from the purchase of a nonparticipating single premium group annuity contract that transferred
defined benefit plan obligations to an insurer, and a litigation financing agreement. Our results for fiscal 2022 were also impacted by a write-down of
COVID-related personal protection equipment inventory due to the reduction in the net realizable value of inventory, losses on the extinguishment of
long-term debt and an increase in reserves for uncertain tax positions.
The results of our operations can be impacted due to changes in exchange rates applicable in converting local currencies to U.S. dollars.
We measure our results on a constant currency basis. Constant currency operating results are calculated by translating current-period local currency
operating results with the currency exchange rates used to translate the financial statements in the comparable prior-year period to determine what
the current-period U.S. dollar operating results would have been if the currency exchange rate had not changed from the comparable prior-year
period.
Management believes that adjusting its operating expenses, operating income, net earnings and diluted earnings per share to remove
these Certain Items and presenting its results on a constant currency basis, provides an important perspective with respect to our underlying
business trends and results and provides meaningful supplemental information to both management and investors that (1) is indicative of the
performance of the company’s underlying operations and (2) facilitates comparisons on a year-over-year basis.
Sysco has a history of growth through acquisitions and excludes from its non-GAAP financial measures the impact of acquisition-related
intangible amortization, acquisition costs and due-diligence costs for those acquisitions. We believe this approach significantly enhances the
comparability of Sysco’s results for fiscal 2023 and fiscal 2022.
Set forth below is a reconciliation of sales, operating expenses, operating income, other (income) expense, net earnings and diluted
earnings per share to adjusted results for these measures for the periods presented. Individual components of diluted earnings per share may not
add up to the total presented due to rounding. Adjusted diluted earnings per share is calculated using adjusted net earnings divided by diluted shares
outstanding.
32
33. Sysco Corporation and its Consolidated Subsidiaries
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items, Q4 FY23 vs. Q4 FY22
(Dollars in Thousands, Except for Share and Per Share Data)
3
3 33
13-Week
Period Ended
Jul. 1, 2023
13-Week
Period Ended
Jul. 2, 2022
Change
in Dollars %/bps Change
Sales (GAAP) $ 19,728,216 $ 18,957,258 $ 770,958 4.1%
Impact of currency fluctuations (1) 47,538 - 47,538 0.2%
Comparable sales using a constant currency basis (Non-GAAP) $ 19,775,754 $ 18,957,258 $ 818,496 4.3%
Cost of sales (GAAP) $ 16,043,050 $ 15,512,986 $ 530,064 3.4%
Impact of inventory valuation adjustment (2) - (43,673) 43,673 0.3%
Cost of sales adjusted for Certain Items (Non-GAAP) $ 16,043,050 $ 15,469,313 $ 573,737 3.7%
Gross profit (GAAP) $ 3,685,166 $ 3,444,272 $ 240,894 7.0%
Impact of inventory valuation adjustment (2) - 43,673 (43,673) -1.3%
Gross profit adjusted for Certain Items (Non-GAAP) 3,685,166 3,487,945 197,221 5.7%
Impact of currency fluctuations (1) 6,070 - 6,070 0.1%
Comparable gross profit adjusted for Certain Items using a constant
currency basis (Non-GAAP) $ 3,691,236 $ 3,487,945 $ 203,291 5.8%
Gross margin (GAAP) 18.68% 18.17% 51 bps
Impact of inventory valuation adjustment (2) 0.00% 0.23% -23 bps
Gross margin adjusted for Certain Items (Non-GAAP) 18.68% 18.40% 28 bps
Impact of currency fluctuations (1) -0.01% 0.00% -1 bps
Comparable gross margin adjusted for Certain Items using a constant
currency basis (Non-GAAP) 18.67% 18.40% 27 bps
Operating expenses (GAAP) $ 2,715,769 $ 2,677,802 $ 37,967 1.4%
Impact of restructuring and transformational project costs (3) (24,678) (37,417) 12,739 34.0%
Impact of acquisition-related costs (4) (28,470) (35,724) 7,254 20.3%
Impact of bad debt reserve adjustments (5) - 8,783 (8,783) NM
Operating expenses adjusted for Certain Items (Non-GAAP) 2,662,621 2,613,444 49,177 1.9%
Impact of currency fluctuations (1) 3,596 - 3,596 0.1%
Comparable operating expenses adjusted for Certain Items using a
constant currency basis (Non-GAAP) $ 2,666,217 $ 2,613,444 $ 52,773 2.0%
Operating expense as a percentage of sales (GAAP) 13.77% 14.13% -36 bps
Impact of certain items adjustments -0.27% -0.34% 7 bps
Adjusted operating expense as a percentage of sales (Non-GAAP) 13.50% 13.79% -29 bps
Operating income (GAAP) $ 969,397 $ 766,470 $ 202,927 26.5%
Impact of inventory valuation adjustment (2) - 43,673 (43,673) NM
Impact of restructuring and transformational project costs (3) 24,678 37,417 (12,739) -34.0%
Impact of acquisition-related costs (4) 28,470 35,724 (7,254) -20.3%
Impact of bad debt reserve adjustments (5) - (8,783) 8,783 NM
Operating income adjusted for Certain Items (Non-GAAP) 1,022,545 874,501 148,044 16.9%
Impact of currency fluctuations (1) 2,474 - 2,474 0.3%
Comparable operating income adjusted for Certain Items using a
constant currency basis (Non-GAAP) $ 1,025,019 $ 874,501 $ 150,518 17.2%
34. Sysco Corporation and its Consolidated Subsidiaries
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items, Q4 FY23 vs. Q4 FY22
(Dollars in Thousands, Except for Share and Per Share Data) continued
3
4 34
Operating margin (GAAP) 4.91% 4.04% 87 bps
Operating margin adjusted for Certain Items (Non-GAAP) 5.18% 4.61% 57 bps
Operating margin adjusted for Certain Items on a constant currency
basis (Non-GAAP) 5.18% 4.61% 57 bps
Interest expense (GAAP) $ 135,629 $ 128,512 $ 7,117 5.5%
Other income (GAAP) $ (124,172) $ (3,921) $ (120,251) NM
Impact of other non-routine gains and losses 120,867 - 120,867 NM
Other income adjusted for Certain Items (Non-GAAP) $ (3,305) $ (3,921) $ 616 15.7%
Net earnings (GAAP) $ 733,736 $ 509,989 $ 223,747 43.9%
Impact of inventory valuation adjustment (2) - 43,673 (43,673) NM
Impact of restructuring and transformational project costs (3) 24,678 37,417 (12,739) -34.0%
Impact of acquisition-related costs (4) 28,470 35,724 (7,254) -20.3%
Impact of bad debt reserve adjustments (5) - (8,783) 8,783 NM
Impact of other non-routine gains and losses (120,867) - (120,867) NM
Tax impact of inventory valuation adjustment (6) - (11,452) 11,452 NM
Tax impact of restructuring and transformational project costs (6) (6,265) (10,082) 3,817 37.9%
Tax impact of acquisition-related costs (6) (7,227) (9,847) 2,620 26.6%
Tax Impact of bad debt reserve adjustments (6) - 2,383 (2,383) NM
Tax impact of loss on extinguishment of debt (6) - (699) 699 NM
Tax impact of other non-routine gains and losses (6) 30,683 - 30,683 NM
Net earnings adjusted for Certain Items (Non-GAAP) $ 683,208 $ 588,323 $ 94,885 16.1%
Diluted earnings per share (GAAP) $ 1.44 $ 0.99 $ 0.45 45.5%
Impact of inventory valuation adjustment (2) - 0.09 (0.09) NM
Impact of restructuring and transformational project costs (3) 0.05 0.07 (0.02) -28.6%
Impact of acquisition-related costs (4) 0.06 0.07 (0.01) -14.3%
Impact of bad debt reserve adjustments (5) - (0.02) 0.02 NM
Impact of other non-routine gains and losses (0.24) - (0.24) NM
Tax impact of inventory valuation adjustment (6) - (0.02) 0.02 NM
Tax impact of restructuring and transformational project costs (6) (0.01) (0.02) 0.01 50.0%
Tax impact of acquisition-related costs (6) (0.01) (0.02) 0.01 50.0%
Tax impact of other non-routine gains and losses (6) 0.06 - 0.06 NM
Diluted earnings per share adjusted for Certain Items (Non-GAAP) (7) $ 1.34 $ 1.15 $ 0.19 16.5%
Diluted shares outstanding 508,507,679 513,426,966
NM represents that the percentage change is not meaningful.
(7)
Individual components of diluted earnings per share may not add up to the total presented due to rounding. Total diluted earnings per share is calculated using
adjusted net earnings divided by diluted shares outstanding.
(4)
Fiscal 2023 includes $27 million of intangible amortization expense and $1 million in acquisition and due diligence costs. Fiscal 2022 includes $31 million of intangible
amortization expense and $5 million in acquisition and due diligence costs.
(3)
Fiscal 2023 includes $8 million related to restructuring and severance charges and $17 million related to various transformation initiative costs, primarily consisting of
changes to our business technology strategy. Fiscal 2022 includes $29 million related to restructuring and serverance charges and $8 million related to various
transformation initiative costs, primarily consisting of changes to our business technology strategy.
(5)
Fiscal 2022 represents the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020.
(1)
Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on the current year results.
(2)
Fiscal 2022 represents a write-down of COVID-related personal protection equipment inventory due to the reduction in the net realizable value of inventory.
(6)
The tax impact of adjustments for Certain Items is calculated by multiplying the pretax impact of each Certain Item by the statutory rates in effect for each jurisdiction
where the Certain Item was incurred.
35. Sysco Corporation and its Consolidated Subsidiaries
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items, FY23 vs. FY22
(Dollars in Thousands, Except for Share and Per Share Data)
3
5 35
52-Week
Period Ended
Jul. 1, 2023
52-Week
Period Ended
Jul. 2, 2022
Change
in Dollars %/bps Change
Sales (GAAP) $ 76,324,675 $ 68,636,146 $ 7,688,529 11.2%
Impact of currency fluctuations (1) 910,290 - 910,290 1.3%
Comparable sales using a constant currency basis (Non-GAAP) $ 77,234,965 $ 68,636,146 $ 8,598,819 12.5%
Cost of sales $ 62,369,678 $ 56,315,622 $ 6,054,056 10.8%
Impact of inventory valuation adjustment (2) 2,571 (73,224) 75,795 0.1%
Cost of sales adjusted for Certain Items (Non-GAAP) $ 62,372,249 $ 56,242,398 $ 6,129,851 10.9%
Gross profit (GAAP) $ 13,954,997 $ 12,320,524 $ 1,634,473 13.3%
Impact of inventory valuation adjustment (2) (2,571) 73,224 (75,795) -0.7%
Gross profit adjusted for Certain Items (Non-GAAP) 13,952,426 12,393,748 1,558,678 12.6%
Impact of currency fluctuations (1) 188,796 - 188,796 1.5%
Comparable gross profit adjusted for Certain Items using a
constant currency basis (Non-GAAP) $ 14,141,222 $ 12,393,748 $ 1,747,474 14.1%
Gross margin (GAAP) 18.28% 17.95% 33 bps
Impact of inventory valuation adjustment (2) 0.00% 0.11% -11 bps
Gross margin adjusted for Certain Items (Non-GAAP) 18.28% 18.06% 22 bps
Impact of currency fluctuations (1) 0.03% 0.00% 3 bps
Comparable gross margin adjusted for Certain Items using a
constant currency basis (Non-GAAP) 18.31% 18.06% 25 bps
Operating expenses (GAAP) $ 10,916,448 $ 9,974,024 $ 942,424 9.4%
Impact of restructuring and transformational project costs (3) (62,965) (107,475) 44,510 41.4%
Impact of acquisition-related costs (4) (115,889) (139,173) 23,284 16.7%
Impact of bad debt reserve adjustments (5) 4,425 27,999 (23,574) -84.2%
Operating expenses adjusted for Certain Items (Non-GAAP) 10,742,019 9,755,375 986,644 10.1%
Impact of currency fluctuations (1) 182,873 - 182,873 1.9%
Comparable operating expenses adjusted for Certain Items using a
constant currency basis (Non-GAAP) $ 10,924,892 $ 9,755,375 $ 1,169,517 12.0%
Operating expense as a percentage of sales (GAAP) 14.30% 14.53% -23 bps
Impact of certain items adjustments -0.23% -0.32% 9 bps
Adjusted operating expense as a percentage of sales (Non-GAAP) 14.07% 14.21% -14 bps
Operating income (GAAP) $ 3,038,549 $ 2,346,500 $ 692,049 29.5%
Impact of inventory valuation adjustment (2) (2,571) 73,224 (75,795) NM
Impact of restructuring and transformational project costs (3) 62,965 107,475 (44,510) -41.4%
Impact of acquisition-related costs (4) 115,889 139,173 (23,284) -16.7%
Impact of bad debt reserve adjustments (5) (4,425) (27,999) 23,574 84.2%
Operating income adjusted for Certain Items (Non-GAAP) 3,210,407 2,638,373 572,034 21.7%
Impact of currency fluctuations (1) 5,923 - 5,923 0.2%
Comparable operating income adjusted for Certain Items using a
constant currency basis (Non-GAAP) $ 3,216,330 $ 2,638,373 $ 577,957 21.9%
Operating margin (GAAP) 3.98% 3.42% 56 bps
Operating margin adjusted for Certain Items (Non-GAAP) 4.21% 3.84% 37 bps
Operating margin adjusted for Certain Items using a constant
currency basis (Non-GAAP) 4.16% 3.84% 32 bps
Interest expense (GAAP) $ 526,752 $ 623,643 $ (96,891) -15.5%
Impact of loss on extinguishment of debt - (115,603) 115,603 NM
Interest expense adjusted for Certain Items (Non-GAAP) $ 526,752 $ 508,040 $ 18,712 3.7%
36. Sysco Corporation and its Consolidated Subsidiaries
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items, FY23 vs. FY22
(Dollars in Thousands, Except for Share and Per Share Data) continued
3
6 36
Other expense (income) (GAAP) $ 226,442 $ (23,916) $ 250,358 NM
Impact of other non-routine gains and losses (6) (194,459) - (194,459) NM
Other expense (income) adjusted for Certain Items (Non-GAAP) $ 31,983 $ (23,916) $ 55,899 NM
Net earnings (GAAP) $ 1,770,124 $ 1,358,768 $ 411,356 30.3%
Impact of inventory valuation adjustment (2) (2,571) 73,224 (75,795) NM
Impact of restructuring and transformational project costs (3) 62,965 107,475 (44,510) -41.4%
Impact of acquisition-related costs (4) 115,889 139,173 (23,284) -16.7%
Impact of bad debt reserve adjustments (5) (4,425) (27,999) 23,574 84.2%
Impact of loss on extinguishment of debt - 115,603 (115,603) NM
Impact of other non-routine gains and losses (6) 194,459 - 194,459 NM
Tax impact of inventory valuation adjustment (7) 647 (18,902) 19,549 NM
Tax impact of restructuring and transformational project costs (7) (15,847) (27,743) 11,896 42.9%
Tax impact of acquisition-related costs (7) (29,166) (35,926) 6,760 18.8%
Tax Impact of bad debt reserve adjustments (7) 1,114 7,228 (6,114) -84.6%
Tax impact of loss on extinguishment of debt (7) - (29,841) 29,841 NM
Tax impact of other non-routine gains and losses (7) (48,941) - (48,941) NM
Impact of adjustments to uncertain tax positions - 12,000 (12,000) NM
Net earnings adjusted for Certain Items (Non-GAAP) $ 2,044,248 $ 1,673,060 $ 371,188 22.2%
Diluted earnings per share (GAAP) $ 3.47 $ 2.64 $ 0.83 31.4%
Impact of inventory valuation adjustment (2) (0.01) 0.14 (0.15) NM
Impact of restructuring and transformational project costs (3) 0.12 0.21 (0.09) -42.9%
Impact of acquisition-related costs (4) 0.23 0.27 (0.04) -14.8%
Impact of bad debt reserve adjustments (5) (0.01) (0.05) 0.04 80.0%
Impact of loss on extinguishment of debt - 0.22 (0.22) NM
Impact of other non-routine gains and losses (6) 0.38 - 0.38 NM
Tax impact of inventory valuation adjustment (7) - (0.04) 0.04 NM
Tax impact of restructuring and transformational project costs (7) (0.03) (0.05) 0.02 40.0%
Tax impact of acquisition-related costs (7) (0.06) (0.07) 0.01 14.3%
Tax Impact of bad debt reserve adjustments (7) - 0.01 (0.01) NM
Tax impact of loss on extinguishment of debt (7) - (0.06) 0.06 NM
Tax impact of other non-routine gains and losses (7) (0.10) - (0.10) NM
Impact of adjustments to uncertain tax positions - 0.02 (0.02) NM
Diluted earnings per share adjusted for Certain Items (Non-GAAP)
(8) $ 4.01 $ 3.25 $ 0.76 23.4%
Diluted shares outstanding 509,719,756 514,005,827
NM represents that the percentage change is not meaningful.
(3)
Fiscal 2023 includes $20 million related to restructuring and severance charges and $43 million related to various transformation initiative costs, primarily consisting of
changes to our business technology strategy. Fiscal 2022 includes $59 million related to restructuring and severance charges and $49 million related to various transformation
initiative costs, primarily consisting of changes to our business technology strategy.
(1)
Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on the current year results.
(2)
Fiscal 2023 represents an adjustment to a product return allowance, related to COVID-related personal protection equipment inventory. Fiscal 2022 represents a write-down
of COVID-related personal protection equipment inventory due to the reduction in the net realizable value of inventory.
(4)
Fiscal 2023 includes $105 million of intangible amortization expense and $10 million in acquisition and due diligence costs. Fiscal 2022 includes $106 million of intangible
amortization expense and $33 million in acquisition and due diligence costs.
(5)
Fiscal 2023 and fiscal 2022 represent the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020.
(7)
The tax impact of adjustments for Certain Items is calculated by multiplying the pretax impact of each Certain Item by the statutory rates in effect for each jurisdiction where
the Certain Item was incurred.
(8)
Individual components of diluted earnings per share may not add up to the total presented due to rounding. Total diluted earnings per share is calculated using adjusted net
earnings divided by diluted shares outstanding.
(6)
Fiscal 2023 primarily includes a pension settlement charge of $315 million that resulted from the purchase of a nonparticipating single premium group annuity contract that
transferred defined benefit plan obligations to an insurer and $122 million in income from a litigation financing agreement.
37. Sysco Corporation and its Consolidated Subsidiaries
Segment Results
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items on Applicable Segments, Q4 FY23 vs. Q4 FY22
(Dollars in Thousands)
3
7 37
13-Week
Period Ended
Jul. 1, 2023
13-Week
Period Ended
Jul. 2, 2022
Change
in Dollars %/bps Change
U.S. FOODSERVICE OPERATIONS
Sales (GAAP) $ 13,745,839 $ 13,413,281 $ 332,558 2.5%
Gross Profit (GAAP) $ 2,707,712 $ 2,601,656 $ 106,056 4.1%
Gross Margin (GAAP) 19.70% 19.40% 30 bps
Operating expenses (GAAP) $ 1,661,691 $ 1,649,413 $ 12,278 0.7%
Impact of restructuring and transformational project costs (614) (778) 164 21.1%
Impact of acquisition-related costs (1) (10,479) (10,825) 346 3.2%
Impact of bad debt reserve adjustments (2) - 4,035 (4,035) NM
Operating expenses adjusted for Certain Items (Non-GAAP) $ 1,650,598 $ 1,641,845 $ 8,753 0.5%
Operating income (GAAP) $ 1,046,021 $ 952,243 $ 93,778 9.8%
Impact of restructuring and transformational project costs 614 778 (164) -21.1%
Impact of acquisition-related costs (1) 10,479 10,825 (346) -3.2%
Impact of bad debt reserve adjustments (2) - (4,035) 4,035 NM
Operating income adjusted for Certain Items (Non-GAAP) $ 1,057,114 $ 959,811 $ 97,303 10.1%
INTERNATIONAL FOODSERVICE OPERATIONS
Sales (GAAP) $ 3,649,343 $ 3,251,841 $ 397,502 12.2%
Impact of currency fluctuations (3) 44,130 - 44,130 1.4%
Comparable sales using a constant currency basis (Non-GAAP) $ 3,693,473 $ 3,251,841 $ 441,632 13.6%
Gross Profit (GAAP) $ 724,357 $ 651,787 $ 72,570 11.1%
Impact of currency fluctuations (3) 4,949 - 4,949 0.8%
Comparable gross profit using a constant currency basis (Non-GAAP) $ 729,306 $ 651,787 $ 77,519 11.9%
Gross Margin (GAAP) 19.85% 20.04% -19 bps
Impact of currency fluctuations (3) -0.10% 0.00% -10 bps
Comparable gross margin using a constant currency basis (Non-GAAP) 19.75% 20.04% -29 bps
Operating expenses (GAAP) $ 603,853 $ 605,391 $ (1,538) -0.3%
Impact of restructuring and transformational project costs (4) (7,423) (27,257) 19,834 72.8%
Impact of acquisition-related costs (5) (16,977) (22,790) 5,813 25.5%
Impact of bad debt reserve adjustments (2) - 4,748 (4,748) NM
Operating expenses adjusted for Certain Items (Non-GAAP) 579,453 560,092 19,361 3.5%
Impact of currency fluctuations (3) 3,351 - 3,351 0.6%
Comparable operating expenses adjusted for Certain Items using a constant currency
basis (Non-GAAP) $ 582,804 $ 560,092 $ 22,712 4.1%
Operating income (GAAP) $ 120,504 $ 46,396 $ 74,108 NM
Impact of restructuring and transformational project costs (4) 7,423 27,257 (19,834) -72.8%
Impact of acquisition-related costs (5) 16,977 22,790 (5,813) -25.5%
Impact of bad debt reserve adjustments (2) - (4,748) 4,748 NM
Operating income adjusted for Certain Items (Non-GAAP) 144,904 91,695 53,209 58.0%
Impact of currency fluctuations (3) 1,598 - 1,598 1.8%
Comparable operating income adjusted for Certain Items using a constant currency
basis (Non-GAAP) $ 146,502 $ 91,695 $ 54,807 59.8%
SYGMA
Sales (GAAP) $ 2,004,060 $ 1,975,631 $ 28,429 1.4%
Gross Profit (GAAP) 160,677 153,926 6,751 4.4%
Gross Margin (GAAP) 8.02% 7.79% 23 bps
Operating expenses $ 141,866 $ 152,674 $ (10,808) -7.1%
Operating income 18,811 1,252 17,559 NM
38. Sysco Corporation and its Consolidated Subsidiaries
Segment Results
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items on Applicable Segments, Q4 FY23 vs. Q4 FY22
(Dollars in Thousands) continued
3
8 38
OTHER
Sales $ 328,974 $ 316,505 $ 12,469 3.9%
Gross Profit $ 88,715 $ 78,898 $ 9,817 12.4%
Gross Margin 26.97% 24.93% 204 bps
Operating expenses $ 65,093 $ 64,158 $ 935 1.5%
Operating income (GAAP) $ 23,622 $ 14,740 $ 8,882 60.3%
GLOBAL SUPPORT CENTER
Gross profit (loss) (GAAP) $ 3,705 $ (41,995) $ 45,700 NM
Impact of inventory valuation adjustment (6) - 43,673 (43,673) NM
Gross profit adjusted for certain items (Non-GAAP) $ 3,705 $ 1,678 $ 2,027 NM
Operating expenses (GAAP) $ 243,266 $ 206,166 $ 37,100 18.0%
Impact of restructuring and transformational project costs (7) (16,641) (9,382) (7,259) -77.4%
Impact of acquisition related costs (8) (1,014) (2,109) 1,095 51.9%
Operating expenses adjusted for Certain Items (Non-GAAP) $ 225,611 $ 194,675 $ 30,936 15.9%
Operating loss (GAAP) $ (239,561) $ (248,161) $ 8,600 3.5%
Impact of inventory valuation adjustment (6) - 43,673 (43,673) NM
Impact of restructuring and transformational project costs (7) 16,641 9,382 7,259 77.4%
Impact of acquisition related costs (8) 1,014 2,109 (1,095) -51.9%
Operating loss adjusted for Certain Items (Non-GAAP) $ (221,906) $ (192,997) $ (28,909) -15.0%
TOTAL SYSCO
Sales $ 19,728,216 $ 18,957,258 $ 770,958 4.1%
Gross Profit $ 3,685,166 $ 3,444,272 $ 240,894 7.0%
Gross Margin 18.68% 18.17% 51 bps
Operating expenses (GAAP) $ 2,715,769 $ 2,677,802 $ 37,967 1.4%
Impact of restructuring and transformational project costs (4) (7) (24,678) (37,417) 12,739 34.0%
Impact of acquisition-related costs (1) (5) (8) (28,470) (35,724) 7,254 20.3%
Impact of bad debt reserve adjustments (2) - 8,783 (8,783) NM
Operating expenses adjusted for Certain Items (Non-GAAP) $ 2,662,621 $ 2,613,444 $ 49,177 1.9%
Operating income (GAAP) $ 969,397 $ 766,470 $ 202,927 26.5%
Impact of inventory valuation adjustment (6) - 43,673 (43,673) NM
Impact of restructuring and transformational project costs (4) (7) 24,678 37,417 (12,739) -34.0%
Impact of acquisition-related costs (1) (5) (8) 28,470 35,724 (7,254) -20.3%
Impact of bad debt reserve adjustments (2) - (8,783) 8,783 NM
Operating income adjusted for Certain Items (Non-GAAP) $ 1,022,545 $ 874,501 $ 148,044 16.9%
(4)
Includes restructuring and facility closure costs primarily in Europe.
(5)
Represents intangible amortization expense.
NM represents that the percentage change is not meaningful.
(8)
Represents due diligence costs.
(3)
Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on current year results.
(7)
Includes various transformation initiative costs, primarily consisting of changes to our business technology strategy.
(1)
Fiscal 2023 and fiscal 2022 include intangible amortization expense and acquisition costs.
(2)
Fiscal 2022 represents the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020.
(6)
Fiscal 2022 represents a write-down of COVID-related personal protection equipment inventory due to the reduction in the net realizable value of inventory.
39. Sysco Corporation and its Consolidated Subsidiaries
Segment Results
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items on Applicable Segments, FY23 vs. FY22
(Dollars in Thousands)
3
9 39
52-Week
Period Ended
Jul. 1, 2023
52-Week
Period Ended
Jul. 2, 2022
Change
in Dollars %/bps Change
U.S. FOODSERVICE OPERATIONS
Sales $ 53,682,894 $ 48,520,562 $ 5,162,332 10.6%
Gross Profit 10,359,003 9,196,133 1,162,870 12.6%
Gross Margin 19.30% 18.95% 35 bps
Operating expenses (GAAP) $ 6,772,427 $ 6,015,428 $ 756,999 12.6%
Impact of restructuring and transformational project costs (817) (1,162) 345 29.7%
Impact of acquisition-related costs (1) (46,042) (36,207) (9,835) -27.2%
Impact of bad debt reserve adjustments (2) 4,170 20,765 (16,595) -79.9%
Operating expenses adjusted for Certain Items (Non-GAAP) $ 6,729,738 $ 5,998,824 $ 730,914 12.2%
Operating income (GAAP) $ 3,586,576 $ 3,180,705 $ 405,871 12.8%
Impact of restructuring and transformational project costs 817 1,162 (345) -29.7%
Impact of acquisition-related costs (1) 46,042 36,207 9,835 27.2%
Impact of bad debt reserve adjustments (2) (4,170) (20,765) 16,595 79.9%
Operating income adjusted for Certain Items (Non-GAAP) $ 3,629,265 $ 3,197,309 $ 431,956 13.5%
INTERNATIONAL FOODSERVICE OPERATIONS
Sales (GAAP) $ 13,559,610 $ 11,787,449 $ 1,772,161 15.0%
Impact of currency fluctuations (3) 892,296 - 892,296 7.6%
Comparable sales using a constant currency basis (Non-GAAP) $ 14,451,906 $ 11,787,449 $ 2,664,457 22.6%
Gross Profit (GAAP) $ 2,640,860 $ 2,377,093 $ 263,767 11.1%
Impact of currency fluctuations (3) 182,803 - 182,803 7.7%
Comparable gross profit using a constant currency basis (Non-GAAP) $ 2,823,663 $ 2,377,093 $ 446,570 18.8%
Gross Margin (GAAP) 19.48% 20.17% -69 bps
Impact of currency fluctuations (3) 0.06% 0.00% 6 bps
Comparable gross margin using a constant currency basis (Non-GAAP) 19.54% 20.17% -63 bps
Operating expenses (GAAP) $ 2,327,411 $ 2,277,060 $ 50,351 2.2%
Impact of restructuring and transformational project costs (4) (19,018) (57,683) 38,665 67.0%
Impact of acquisition-related costs (5) (65,511) (78,062) 12,551 16.1%
Impact of bad debt reserve adjustments (2) 255 7,236 (6,981) -96.5%
Operating expenses adjusted for Certain Items (Non-GAAP) 2,243,137 2,148,551 94,586 4.4%
Impact of currency fluctuations (3) 166,356 - 166,356 7.7%
Comparable operating expenses adjusted for Certain Items using a
constant currency basis (Non-GAAP) $ 2,409,493 $ 2,148,551 $ 260,942 12.1%
Operating income (GAAP) $ 313,449 $ 100,033 $ 213,416 NM
Impact of restructuring and transformational project costs (4) 19,018 57,683 (38,665) -67.0%
Impact of acquisition-related costs (5) 65,511 78,062 (12,551) -16.1%
Impact of bad debt reserve adjustments (2) (255) (7,236) 6,981 96.5%
Operating income adjusted for Certain Items (Non-GAAP) 397,723 228,542 169,181 74.0%
Impact of currency fluctuations (3) 16,447 - 16,447 7.2%
Comparable operating income adjusted for Certain Items using a constant
currency basis (Non-GAAP) $ 414,170 $ 228,542 $ 185,628 81.2%
SYGMA
Sales (GAAP) $ 7,843,111 $ 7,245,824 $ 597,287 8.2%
Gross Profit (GAAP) 631,135 576,280 54,855 9.5%
Gross Margin (GAAP) 8.05% 7.95% 10 bps
Operating expenses (GAAP) $ 574,609 $ 579,404 $ (4,795) -0.8%
Operating income (loss) (GAAP) 56,526 (3,124) 59,650 NM
40. Sysco Corporation and its Consolidated Subsidiaries
Segment Results
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items on Applicable Segments, FY23 vs. FY22
(Dollars in Thousands) continued
4
0 40
OTHER
Sales (GAAP) $ 1,239,060 $ 1,082,311 $ 156,749 14.5%
Gross Profit (GAAP) 326,315 248,125 78,190 31.5%
Gross Margin (GAAP) 26.34% 22.93% 341 bps
Operating expenses (GAAP) $ 269,438 $ 230,733 $ 38,705 16.8%
Impact of bad debt reserve adjustments (2) - (2) 2 NM
Operating expenses adjusted for Certain Items (Non-GAAP) $ 269,438 $ 230,731 $ 38,707 16.8%
Operating income (GAAP) $ 56,877 $ 17,392 $ 39,485 NM
Impact of bad debt reserve adjustments (2) - 2 (2) NM
Operating income adjusted for Certain Items (Non-GAAP) $ 56,877 $ 17,394 $ 39,483 NM
GLOBAL SUPPORT CENTER
Gross loss (GAAP) $ (2,316) $ (77,107) $ 74,791 97.0%
Impact of inventory valuation adjustment (6) (2,571) 73,224 (75,795) NM
Gross loss adjusted for Certain Items (Non-GAAP) $ (4,887) $ (3,883) $ (1,004) -25.9%
Operating expenses (GAAP) $ 972,563 $ 871,399 $ 101,164 11.6%
Impact of restructuring and transformational project costs (7) (43,130) (48,630) 5,500 11.3%
Impact of acquisition-related costs (8) (4,336) (24,904) 20,568 82.6%
Operating expenses adjusted for Certain Items (Non-GAAP) $ 925,097 $ 797,865 $ 127,232 15.9%
Operating loss (GAAP) $ (974,879) $ (948,506) $ (26,373) -2.8%
Impact of inventory valuation adjustment (6) (2,571) 73,224 (75,795) NM
Impact of restructuring and transformational project costs (7) 43,130 48,630 (5,500) -11.3%
Impact of acquisition-related costs (8) 4,336 24,904 (20,568) -82.6%
Operating loss adjusted for Certain Items (Non-GAAP) $ (929,984) $ (801,748) $ (128,236) -16.0%
TOTAL SYSCO
Sales (GAAP) $ 76,324,675 $ 68,636,146 $ 7,688,529 11.2%
Gross Profit (GAAP) 13,954,997 12,320,524 1,634,473 13.3%
Gross margin (GAAP) 18.28% 17.95% 33 bps
Operating expenses (GAAP) $ 10,916,448 $ 9,974,024 $ 942,424 9.4%
Impact of restructuring and transformational project costs (4)(7) (62,965) (107,475) 44,510 41.4%
Impact of acquisition-related costs (1)(5)(8) (115,889) (139,173) 23,284 16.7%
Impact of bad debt reserve adjustments (2) 4,425 27,999 (23,574) -84.2%
Operating expenses adjusted for Certain Items (Non-GAAP) $ 10,742,019 $ 9,755,375 $ 986,644 10.1%
Operating income (GAAP) $ 3,038,549 $ 2,346,500 $ 692,049 29.5%
Impact of inventory valuation adjustment (6) (2,571) 73,224 (75,795) NM
Impact of restructuring and transformational project costs (4)(7) 62,965 107,475 (44,510) -41.4%
Impact of acquisition-related costs (1)(5)(8) 115,889 139,173 (23,284) -16.7%
Impact of bad debt reserve adjustments (2) (4,425) (27,999) 23,574 84.2%
Operating income adjusted for Certain Items (Non-GAAP) $ 3,210,407 $ 2,638,373 $ 572,034 21.7%
(1)
Fiscal 2023 and fiscal 2022 include intangible amortization expense and acquisition costs.
(2)
Fiscal 2023 and fiscal 2022 represent the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020.
(3)
Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on current year results.
(4)
Includes restructuring, severance and facility closure costs primarily in Europe.
(5)
Represents intangible amortization expense.
(6)
Fiscal 2023 represents an adjustment to a product return allowance, related to COVID-related personal protection equipment inventory. Fiscal 2022 represents a write-down of
COVID-related personal protection equipment inventory due to the reduction in the net realizable value of inventory.
(7)
Includes various transformation initiative costs, primarily consisting of changes to our business technology strategy.
(8)
Represents due diligence costs.
NM represents that the percentage change is not meaningful.
41. Sysco Corporation and its Consolidated Subsidiaries
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items
(In Thousands)
4
1 41
Operating income (loss) (GAAP) $ 120,995 $ 546,825 $ 557,959 $ 687,667 $ 720,734 $ (531,580) $ 569,684
Impact of restructuring and transformational project costs 1,692 56,220 (2)
42,573 (4)
46,313 (6)
77,753 (8)
180,066 (10)
33,110 (12)
Impact of acquisition-related costs 386,558 (1)
25,212 (3)
30,697 (5)
37,230 (7)
19,789 (9)
13,251 (9)
24,826 (14)
Impact of MEPP charge - - 35,600 - - - -
Impact of bad debt reserve adjustments - - - - - 169,903 (11)
(22,441) (13)
Impact of goodwill impairment - - - - - 134,481 -
Operating income (loss) adjusted for certain items (Non-GAAP) $
509,245
$
628,257
$
666,829
$
771,210
$
818,276
$
(33,879)
$
605,179
(14)
Fiscal 2021 represents $19 million of intangible amortization expense from the Brakes Acquisition, which is included in the results of International Foodservice, as well as $6 million of due diligence and integration costs related to
Greco and Sons, which are included within Global Support Center expenses.
(10)
Fiscal 2020 includes $165 million related to severance, restructuring and integration charges and $15 million related to various transformation initiative costs, primarily consisting of changes to our business technology strategy.
(12)
Fiscal 2021 includes $17 million related to various transformation initiative costs, primarily consisting of changes to our business technology strategy and $16 million related to restructuring and severance charges.
(11)
Fiscal 2020 represents excess bad debt charges recognized on the increase in past due receivables arising from the COVID-19 pandemic.
(13)
Fiscal 2021 represents the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020.
(9)
Represents intangible amortization expense from the Brakes Acquisition, which is included in the results of International Foodservice.
(8)
Fiscal 2019 includes $37 million related to various transformation initiative costs, primarily consisting of changes to our business technology strategy and $41 million related to severance, restructuring and integration charges.
(5)
Fiscal 2017 includes $20 million related to intangible amortization expense from the Brakes Acquisition, which is included in the results of Brakes, and $9 million in transaction costs.
(6)
Fiscal 2018 includes business technology transformation initiative costs, restructuring expenses within our Brakes operations, professional fees on three-year financial objectives, severance charges related to restructuring and
costs to convert to legacy systems in conjunction with our revised business technology strategy.
(1)
Fiscal 2015 includes US Foods merger and integration planning and transaction costs
(2)
Fiscal 2016 includes severance charges, professional fees on 3-year financial objectives, other restructuring costs and costs associated with our revised business technology strategy.
(3)
Fiscal 2016 includes Brakes Acquisition transaction costs.
(4)
Fiscal 2017 includes $28 million in accelerated depreciation associated with our revised business technology strategy and $12 million related to restructuring expenses within our Brakes operations, costs to convert to legacy
systems in conjunction with our revised business technology strategy, severance charges related to restructuring and professional fees on three-year financial objectives.
(7)
Fiscal 2018 includes $16 million related to intangible amortization expense from the Brakes Acquisition, which is included in the results of Brakes, $4 million in integration costs, and a $14 million write-off for an intangible asset
due to restructuring in France.
13-Week
Period Ended
Jul. 1, 2017
13-Week
Period Ended
Jun. 30, 2018
13-Week
Period Ended
Jun. 29, 2019
As noted in a previous reconciliation within this presentation, our discussion of our results includes certain non-GAAP financial measures, defined as Certain Items. The multi-year trend below represents our operating income
adjusted for Certain Items. For these periods, our definition of Certain Items included (1) restructuring and transformational project costs consisting of: (a) restructuring charges, (b) expenses associated with our various
transformation initiatives, (c) severance charges and (d) integration charges; (2) acquisition-related costs consisting of: (a) intangible amortization expense and (b) acquisition costs and due diligence costs related to our
acquisitions; (3) impact of MEPP charges; (4) excess bad debt charges recognized on the increase in past due receivables arising from the COVID-19 pandemic; (5) the reduction of bad debt expense previously recognized in fiscal
2020 due to the impact of the COVID-19 pandemic on the collectability of our pre-pandemic trade receivable balances; and (6) impact of goodwill impairment.
The company uses these non-GAAP measures when evaluating its financial results as well as for internal planning and forecasting purposes. These financial measures should not be used as a substitute for GAAP measures in
assessing the company’s results of operations for the periods presented. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP. As a result, in the tables that
follow, each period presented is adjusted to remove the Certain Items noted above.
13-Week
Period Ended
Jun. 27, 2015
14-Week
Period Ended
Jul. 2, 2016
13-Week
Period Ended
Jun. 27, 2020
14-Week
Period Ended
Jul. 3, 2021
42. Sysco Corporation and its Consolidated Subsidiaries
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items
(In Thousands)
4
2 42
Operating income (GAAP) $ 1,229,362 $ 1,850,500 $ 2,053,171 $ 2,328,974 $ 2,333,219 $ 749,505 $ 1,447,188
Impact of restructuring and transformational project costs 7,801 123,134 (2)
161,011 (4)
109,524 (6)
325,300 (8)
371,088 (10)
128,187 (12)
Impact of acquisition-related costs 554,667 (1)
35,614 (3)
102,049 (5)
108,136 (7)
77,832 (9)
64,793 (9)
79,540 (14)
Impact of MEPP charge - - 35,600 1,700 - - -
Impact of bad debt reserve adjustments - - - - - 323,403 (11)
(184,813) (13)
Impact of goodwill impairment - - - - - 203,206 -
Operating income adjusted for certain items (Non-GAAP) $ 1,791,830 $ 2,009,248 $ 2,351,831 $ 2,548,334 $ 2,736,351 $ 1,711,995 $ 1,470,102
(14)
Fiscal 2021 represents $74 million of intangible amortization expense from the Brakes Acquisition, which is included in the results of International Foodservice, as well as $6 million of due diligence and integration
costs related to Greco and Sons, which are included within Global Support Center expenses.
(3)
Fiscal 2016 includes US Foods merger and integration planning and transaction costs, and Brakes Acquisition transaction costs.
(4)
Fiscal 2017 includes $111 million in accelerated depreciation associated with our revised business technology strategy and $46 million related to professional fees on 3-year financial objectives, restructuring expenses
within our Brakes operations, costs to convert to legacy systems in conjunction with our revised business technology strategy and severance charges related to restructuring.
(5)
Fiscal 2017 includes $76 million related to intangible amortization expense from the Brakes Acquisition, which is included in the results of Brakes, and $24 million in transaction costs.
(6)
Fiscal 2018 includes business technology transformation initiative costs, restructuring expenses within our Brakes operations, professional fees on three-year financial objectives, severance charges related to
restructuring and costs to convert to legacy systems in conjunction with our revised business technology strategy.
(7)
Fiscal 2018 includes $67 million related to intangible amortization expense from the Brakes Acquisition, which is included in the results of Brakes, $18 million in integration costs, and a $14 million write-off for an
intangible asset due to restructuring in France.
(9)
Represents intangible amortization expense from the Brakes Acquisition, which is included in the results of International Foodservice.
(10)
Fiscal 2020 includes $265 million related to severance, restructuring and integration charges and $106 million related to various transformation initiative costs, primarily consisting of changes to our business
technology strategy.
(11)
Fiscal 2020 represents excess bad debt charges recognized on the increase in past due receivables arising from the COVID-19 pandemic.
(12)
Fiscal 2021 includes $72 million related to restructuring and severance charges and $56 million related to various transformation initiative costs, primarily consisting of changes to our business technology strategy.
(13)
Fiscal 2021 represents the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020.
(1)
Fiscal 2015 includes US Foods merger and integration planning and transaction costs
(2)
Fiscal 2016 includes severance charges, professional fees on 3-year financial objectives, other restructuring costs and costs associated with our revised business technology strategy.
(8)
Fiscal 2019 includes $151 million related to various transformation initiative costs, primarily consisting of changes to our business technology strategy, of which $18 million relates to accelerated depreciation related
to software that is being replaced, and $174 million related to severance, restructuring and integration charges in Europe, Canada and at the Global Support Center, of which $61 million relates to our France
restructuring as part of our integration of Brake France and Davigel into Sysco France.
52-Week
Period Ended
Jun. 29, 2019
52-Week
Period Ended
Jun. 27, 2020
53-Week
Period Ended
Jul. 3, 2021
52-Week
Period Ended
Jun. 27, 2015
53-Week
Period Ended
Jul. 2, 2016
52-Week
Period Ended
Jul. 1, 2017
52-Week
Period Ended
Jun. 30, 2018
As noted in a previous reconciliation within this presentation, our discussion of our results includes certain non-GAAP financial measures, defined as Certain Items. The multi-year trend below represents our operating
income adjusted for Certain Items. For these periods, our definition of Certain Items included (1) restructuring and transformational project costs consisting of: (a) restructuring charges, (b) expenses associated with
our various transformation initiatives, (c) severance charges and (d) integration charges; (2) acquisition-related costs consisting of: (a) intangible amortization expense and (b) acquisition costs and due diligence costs
related to our acquisitions; (3) impact of MEPP charges; (4) excess bad debt charges recognized on the increase in past due receivables arising from the COVID-19 pandemic; (5) the reduction of bad debt expense
previously recognized in fiscal 2020 due to the impact of the COVID-19 pandemic on the collectability of our pre-pandemic trade receivable balances; and (6) impact of goodwill impairment.
The company uses these non-GAAP measures when evaluating its financial results as well as for internal planning and forecasting purposes. These financial measures should not be used as a substitute for GAAP
measures in assessing the company’s results of operations for the periods presented. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP. As a
result, in the tables that follow, each period presented is adjusted to remove the Certain Items noted above.
43. Sysco Corporation and its Consolidated Subsidiaries
Non-GAAP Reconciliation (Unaudited)
Free Cash Flow, YTD23 vs. YTD22
(In Thousands)
4
3 43
Net cash provided by operating activities (GAAP) $ 2,867,602 $ 1,791,286 $ 1,076,316
Additions to plant and equipment (793,325) (632,802) (160,523)
Proceeds from sales of plant and equipment 42,147 24,144 18,003
Free Cash Flow (Non-GAAP) $ 2,116,424 $ 1,182,628 $ 933,796
52-Week
Period Ended
Jul. 1, 2023
52-Week
Period Ended
Jul. 2, 2022
Change
in Dollars
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. 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 business after the purchases and sales
of buildings, fleet, equipment and technology, which may potentially be used to pay for, among other things, strategic uses of
cash including dividend payments, share repurchases and acquisitions. However, free cash flow may not be available for
discretionary expenditures, as it may be necessary that we use it to make mandatory debt service or other payments. Free
cash flow should not be used as a substitute for the most comparable GAAP financial measure in assessing the company’s
liquidity for the periods presented. An analysis of any non-GAAP financial measure should be used in conjunction with results
presented in accordance with GAAP. In the table that follows, free cash flow for each period presented is reconciled to net cash
provided by operating activities.
44. Earnings Before Interest, Taxes, Depreciation and
Amortization (EBITDA)
4
4
EBITDA represents net earnings (loss) plus (i) interest expense, (ii) income tax expense and benefit, (iii) depreciation and (iv)
amortization. The net earnings (loss) component of our EBITDA calculation is impacted by Certain Items that we do not consider representative of
our underlying performance. As a result, in the non-GAAP reconciliations below for each period presented, adjusted EBITDA is computed as EBITDA
plus the impact of Certain Items, excluding certain items related to interest expense, income taxes, depreciation and amortization. Sysco's
management considers growth in this metric to be a measure of overall financial performance that provides useful information to management and
investors about the profitability of the business, as it facilitates comparison of performance on a consistent basis from period to period by providing a
measurement of recurring factors and trends affecting our business. Additionally, it is a commonly used component metric used to inform on capital
structure decisions. Adjusted EBITDA should not be used as a substitute for the most comparable GAAP financial measure in assessing the company’s
financial performance for the periods presented. An analysis of any non-GAAP financial measure should be used in conjunction with results presented
in accordance with GAAP. In the tables that follow, adjusted EBITDA for each period presented is reconciled to net earnings.
44
45. Sysco Corporation and its Consolidated Subsidiaries
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items on Earnings Before Interest, Taxes, Depreciation and Amortization (Q4 FY23 vs. Q4 FY22)
(In Thousands)
4
5 45
13-Week
Period Ended
Jul. 1, 2023
13-Week
Period Ended
Jul. 2, 2022
Change
in Dollars %/bps Change
Net earnings (GAAP) $ 733,736 $ 509,989 $ 223,747 43.9%
Interest (GAAP) 135,629 128,512 7,117 5.5%
Income taxes (GAAP) 224,204 131,890 92,314 70.0%
Depreciation and amortization (GAAP) 200,659 201,274 (615) -0.3%
EBITDA (Non-GAAP) $ 1,294,228 $ 971,665 $ 322,563 33.2%
Certain Item adjustments:
Impact of inventory valuation adjustment (1) - 43,673 (43,673) NM
Impact of restructuring and transformational project costs (2) 23,819 36,998 (13,179) -35.6%
Impact of acquisition-related costs (3) 1,448 4,479 (3,031) -67.7%
Impact of bad debt reserve adjustments (4) - (8,783) 8,783 NM
Impact of other non-routine gains and losses (120,867) - (120,867) NM
EBITDA adjusted for Certain Items (Non-GAAP) (5) $ 1,198,628 $ 1,048,032 $ 150,596 14.4%
NM represents that the percentage change is not meaningful.
(2)
Fiscal 2023 and fiscal 2022 include charges related to restructuring and severance, as well as various transformation initiative costs, primarily consisting of changes to our business technology
strategy, excluding charges related to accelerated depreciation.
(4)
Fiscal 2022 represents the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020.
(3)
Fiscal 2023 and fiscal 2022 include acquisition and due diligence costs.
(5)
In arriving at adjusted EBITDA, Sysco does not adjust out interest income of $9 million and $2 million or non-cash stock compensation expense of $22 million and $32 million in fiscal 2023
and fiscal 2022, respectively.
(1)
Fiscal 2022 represents a write-down of COVID-related personal protection equipment inventory due to the reduction in the net realizable value of inventory.
46. Sysco Corporation and its Consolidated Subsidiaries
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items on Earnings Before Interest, Taxes, Depreciation and Amortization (FY23 vs. FY22)
(In Thousands)
4
6 46
52-Week
Period Ended
Jul. 1, 2023
52-Week
Period Ended
Jul. 2, 2022
Change
in Dollars %/bps Change
Net earnings (GAAP) $ 1,770,124 $ 1,358,768 $ 411,356 30.3%
Interest (GAAP) 526,752 623,643 (96,891) -15.5%
Income taxes (GAAP) 515,231 388,005 127,226 32.8%
Depreciation and amortization (GAAP) 775,604 772,881 2,723 0.4%
EBITDA (Non-GAAP) $ 3,587,711 $ 3,143,297 $ 444,414 14.1%
Certain Item adjustments:
Impact of inventory valuation adjustment (1) (2,571) 73,224 (75,795) NM
Impact of restructuring and transformational project costs (2) 61,009 106,091 (45,082) -42.5%
Impact of acquisition-related costs (3) 10,393 32,738 (22,345) -68.3%
Impact of bad debt reserve adjustments (4) (4,425) (27,999) 23,574 84.2%
Impact of non-routine gains and losses (5) 194,459 - 194,459 NM
EBITDA adjusted for Certain Items (Non-GAAP) (6) $ 3,846,576 $ 3,327,351 $ 519,225 15.6%
NM represents that the percentage change is not meaningful.
(2)
Fiscal 2023 and fiscal 2022 include charges related to restructuring and severance, as well as various transformation initiative costs, primarily consisting of changes to our business technology
strategy, excluding charges related to accelerated depreciation.
(3)
Fiscal 2023 and fiscal 2022 include acquisition and due diligence costs.
(4)
Fiscal 2023 and fiscal 2022 represent the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020.
(6)
In arriving at adjusted EBITDA, Sysco does not adjust out interest income of $24 million and $7 million or non-cash stock compensation expense of $95 million and $122 million for fiscal 2023
and fiscal 2022, respectively.
(1)
Fiscal 2023 represents an adjustment to a product return allowance, related to COVID-related personal protection equipment inventory. Fiscal 2022 represents a write-down of COVID-related
personal protection equipment inventory due to the reduction in the net realizable value of inventory.
(5)
Fiscal 2023 primarily includes a pension settlement charge of $315 million that resulted from the purchase of a nonparticipating single premium group annuity contract that transferred defined
benefit plan obligations to an insurer and $122 million in income from a litigation financing agreement.
47. Projected Adjusted EBITDA Guidance
4
7
Adjusted EBITDA is a non-GAAP financial measure; however, we cannot predict with certainty the particular certain items
that would be excluded from the calculation of this measure for future periods. Due to these uncertainties, we cannot provide a
quantitative reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure without
unreasonable effort. However, we expect to calculate adjusted EBITDA for future periods in the same manner as the reconciliations
provided for the historical periods herein.
47
48. Sysco Corporation and its Consolidated Subsidiaries
Non-GAAP Reconciliation (Unaudited)
Net Debt to Adjusted EBIDTA
(In Thousands)
4
8 48
July 1, 2023 July 2, 2022 July 3, 2021
Current Maturities of long-term debt $ 62,550 $ 580,611 $ 494,923
Long-term debt 10,347,997 10,066,931 10,588,184
Total Debt 10,410,547 10,647,542 11,083,107
Cash & Cash Equivalents (745,201) (867,086) (3,007,123)
Net Debt $ 9,665,346 $ 9,780,456 $ 8,075,984
Adjusted EBITDA for the previous 12 months $ 3,846,576 $ 3,327,350 $ 2,154,985
Debt/Adjusted EBITDA Ratio 2.7 3.2 5.1
Net Debt/Adjusted EBITDA Ratio 2.5 2.9 3.7
Net Debt to Adjusted EBITDA is a non-GAAP financial measure frequently used by investors and credit rating agencies. Our Net Debt to
Adjusted EBITDA ratio is calculated using a numerator of our debt minus cash and cash equivalents, divided by the sum of the most
recent four quarters of Adjusted EBITDA. In the table that follows, we have provided the calculation of our debt and net debt as a ratio
of Adjusted EBITDA.
49. Net Debt to Adjusted EBITDA Leverage Ratio Targets
4
9 49
Form of calculation:
Current maturities of long-term debt
Long term debt
Total Debt (GAAP)
Less cash and cash equivalents
Net Debt
Net earnings (GAAP)
Interest (GAAP)
Income taxes (GAAP)
Depreciation and amortization (GAAP)
EBITDA (Non-GAAP)
Certain Item adjustments:
Impact of restructuring and transformational project costs
Impact of acquisition-related intangible amortization
Impact of bad debt reserve adjustments
EBITDA adjusted for Certain Items (Non-GAAP)
Net Debt to Adjusted EBITDA Ratio
We expect to achieve our net debt to adjusted EBITDA leverage ratio forecast in fiscal 2024. We cannot
predict with certainty when we will achieve these results or whether the calculation of our EBITDA will be on
an adjusted basis in future periods to exclude the effect of certain items. Due to these uncertainties, we
cannot provide a quantitative reconciliation of these potentially non-GAAP measures to the most directly
comparable GAAP measure without unreasonable effort. However, we expect to calculate these adjusted
results, if applicable, in the same manner as the reconciliations provided for the historical periods that are
presented herein.