Q1 Fiscal 2018 Results May 8, 2018
Cautionary Statements Forward-Looking Statements This presentation contains “forward-looking statements” concerning, among other things, our liquidity, our possible or assumed future results of operations and our business strategies. Our actual results could differ materially from those expressed in the forward-looking statements. There are a number of risks, uncertainties, and other important factors, many of which are beyond our control, that could cause our actual results to differ materially from the forward-looking statements contained in this presentation. For a detailed discussion of these risks and uncertainties, see the sections entitled “Risk Factors” and “Forward-Looking Statements” in our Annual Report on Form 10-K for the fiscal year ended December 30, 2017, which was filed with the Securities and Exchange Commission and is available on our Investor Relations website and via EDGAR at www.sec.gov. The forward-looking statements contained in this presentation speak only as of the date of this presentation. We undertake no obligation, other than as may be required by law, to update or revise any forward-looking statements. 1
Key investor day takeaways lead to 8-10% Adjusted EBITDA growth for fiscal years 2018 - 2020 1 2 3 Differentiated strategy Enhanced focus on Attractive industry with deployed against most significant cost reduction favorable outlook favorable customer types opportunities Large, fragmented and growing Differentiation points • Supply chain • Shared services • $289B at a1.6% CAGR • Product innovation • Leading technology • Sales force productivity Mid-term organic case growth • Team-based selling model • Indirect spend • 4-6% independent restaurant • 2-3% healthcare & hospitality Key Gross Profit drivers • 0-1% all other* • Private brand growth • Strategic vendor management • Freight management • Pricing and analytics $170-200M from volume $200-220M from Gross Profit $120-130M from OPEX growth** expansion** productivity** * All other expected to be negative in fiscal 2018 and approximately +1% in fiscal 2019 and 2020 ** Estimated Adj. EBITDA improvement over the 2018-2020 mid-term time period 2
Solid quarter in light of industry wide headwinds • Adjusted EBITDA growth of 4.2% impacted by freight, weather and calendar • ~300 bps negative impact from inbound freight costs • ~250 bps negative impact from weather and calendar timing • Good independent restaurant growth normalizing for weather headwinds and promo timing • Gross Profit growing faster than Operating Expense • Adjusted Gross Profit per case expansion of $0.19 • Year-over-year private brand growth of approximately 100 bps • Adjusted Diluted EPS nearly doubled to $0.35 • FY’18 case volume is now expected to be ~1%; Adj. EBITDA growth unchanged at 6-8% 3
Chain exits, along with weather and calendar headwinds, impacted volume growth in Q1 Organic Acquisitions Independent Restaurant Case Growth C ASE G ROWTH BY QUARTER * ~(100) bps impact YoY percent change* from weather, YoY Change* ~(50) bps 7.1% from promos IND Case Growth 6.0% 10% HC/Hosp Case Growth All Other 4.7% 4.3% 4.0% 5.2% 8% 4.1% 3.7% 6% 2.8% 2.7% 4% Q1 Q2 Q3 Q4 Q1 2% 2017 2018 Normalized** Organic Growth 4.4% 4.7% 4.2% 0% Total Case Growth ~(150) bps impact YoY percent change* -2% from weather and 4.3% 3.6% calendar -4% 2.0% 1.9% (2.3%) 2.7% 2.3% 1.0% 0.9% -6% (3.2%) -8% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2016 2017 2018 2017 2018 1.1% 0.4% -1.7% Normalized** Organic Growth * Q4 2016 growth figures normalized to adjust for 53rd week in 2015 ** Impacts of weather, calendar and sales promotions on a YoY basis 4
Our Great Food. Made Easy. strategy continues to resonate Scoop Scoop E-Commerce E-Commerce Value Added Services Value Added Services 6000 # OF IND CUSTOMER PLACEMENTS 50% 60% SCOOP CUSTOMER TRIAL RATE 5000 IND E-COMM PENETRATION 50% 40% 4000 40% 30% 3000 30% 2000 20% 20% 1000 10% 10% 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 0% 0% Spring 2016 Spring 2018 Q1 2018 2016 2017 2018 2011 Scoop: TM managed customers; two case minimum required E-Commerce and Value Added Services: Independent restaurant (IND) customers only 5
Year-over-year inflation driving increase in Net Sales R ESULTS S UMMARY Q1 Net Sales $ Millions b/(w) Net Sales drivers: • Volume growth with independent restaurants $5,823 $5,788 • Positive acquisition volume and mix 0.6% • Total organic volume declined, primarily on exits and weather impact • YOY inflation moderating Product & Acquisition Mix YOY Inflation Trends Product Inflation Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 ~240 bps ~420 bps ~370 bps ~290 bps ~(80) bps Inflation/Mix Case Growth 2017 2018 (2.3%) 2.9% 6
Gross profit dollar growth outpaced volume R ESULTS S UMMARY Q1 Gross Profit $ Millions; Percent of Sales b/(w) Gross Profit drivers: $992 $991 0.1% • Positive customer mix impacts • Margin initiatives driving gains • Private brand growth of ~100 bps • Strategic vendor management 17.1% 17.0% (9) bps • Cookbook pricing 2017 2018 • Q1 YOY freight headwind of $7 million Q1 Adjusted Gross Profit* • Inflation negatively impacting GP % $ Millions; Percent of Sales b/(w) $1,011 $1,001 1.0% 17.3% 17.4% +7 bps 2017 2018 * Reconciliations of non-GAAP measures are provided in the Appendix 7
Operating expense improvement on lower amortization R ESULTS S UMMARY Q1 Operating Expense $ Millions; Percent of Sales b/(w) Operating Expense drivers: $915 $889 • Positive impact from amortization drop off 2.8% • Unfavorable volume deleveraging on fixed costs • Supply chain • Investments to enable future cost saving 15.8% 15.3% 54 bps opportunities 2017 2018 • CI initiatives ramping up and showing positive early results Q1 Adjusted Operating Expense* $ Millions; Percent of Sales b/(w) $789 $786 0.4% 13.6% 13.5% 3 bps 2017 2018 * Reconciliations of non-GAAP measures are provided in the Appendix 8
Growth in Gross Profit per case continues to outpace change in Operating Expense per case A DJ G ROSS P ROFIT AND A DJ O PERATING E XPENSE $/case higher/lower than prior year Adj GP Adj OPEX $0.08 per case $0.20 $0.06 per case impact from fixed $0.15 cost deleverage $0.19 $0.08 per case better $0.10 $0.00 per case $0.12 per case $0.11 $0.11 $0.05 worse better $0.06 $0.06 $0.06 $0.03 better worse better worse $0.00 $0.06 better ($0.05) ($0.10) FY 2015 FY 2016 FY 2017 Q1 2018 9
Key profitability metrics improving over prior year Q1 Adjusted EBITDA* Q1 Adjusted Diluted Earnings Q1 Net Income $ Millions; Percent of Sales Per Share* $ Millions 2017 2018 $ $75 $0.35 $224 $67 $215 4.2% $40 $0.18 94% $27 3.7% 3.8% 2017 2018 GAAP Adjusted* 2017 2018 * Reconciliations of non-GAAP measures are provided in the Appendix 10
Operating cash flow growth is driving lower Net Debt and leverage results Q1 Operating Cash Flow Q1 Net Debt* and Leverage Leverage ** $ Millions $ Millions $192 $3,703 $3,638 $3,544 3.8x $122 3.4x 3.3x Q1 2017 Q4 2017 Q1 2018 2017 2018 * Reconciliations of non-GAAP measures are provided in the Appendix ** Net Debt / TTM Adjusted EBITDA, reconciliation provided in Appendix 1 1
Updated 2018 guidance 2018 Guidance Case Growth ~1% Net Sales Growth ~3% Adjusted EBITDA Growth 6 – 8% Cash CAPEX $250 - $260M (ex Future Acquisitions) Interest Expense $175 - $180M Depreciation & Amortization $340 - $350M Adj Effective Tax Rate 25% - 26% Adjusted Diluted EPS $2.00 - $2.10 Orange text indicates updated guidance 12
APPENDIX: • Q1 F ISCAL 2018 S UMMARY • N ON -GAAP R ECONCILIATIONS 13
First Quarter Financial Performance Adjusted (1) Reported (unaudited) (unaudited) 13-Weeks Ended 13-Weeks Ended 13-Weeks Ended 13-Weeks Ended March 31, April 1, March 31, April 1, $ in millions, except per share data* 2018 2017 Change 2018 2017 Change Case Growth (2.3)% Net Sales 5,823 5,788 0.6 % Gross Profit 992 991 0.1 % 1,011 1,001 1.0 % % of Net Sales 17.0% 17.1% (9) bps 17.4% 17.3% 7 bps Operating Expenses 889 915 (2.8)% 789 786 0.4 % % of Net Sales 15.3% 15.8% (54) bps 13.5% 13.6% 3 bps Operating Income 102 76 34.2 % 221 215 2.8% Net Income 67 27 148.1 % 75 40 87.5% Diluted EPS $0.31 $0.12 158.3 % $0.35 $0.18 94.4% Adjusted EBITDA 224 215 4.2% Adjusted EBITDA Margin (2) 3.8% 3.7% 13 bps * Individual components may not add to total presented due to rounding. (1) Reconciliations of these non-GAAP measures are provided in the Appendix. (2) Represents Adjusted EBITDA as a percentage of Net Sales. 14
Recommend
More recommend
