NEIL RUSSELL VP, INVESTOR RELATIONS & COMMUNICATIONS

Transcription

1 INVESTOR DAY 2017

2 NEIL RUSSELL VP, INVESTOR RELATIONS & COMMUNICATIONS

3 FORWARD LOOKING STATEMENTS Certain statements made herein that look forward in time or that express management s beliefs, expectations or hopes are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 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, but are not limited to, statements regarding: Sysco s targeted financial and operational results for FY18-FY20 and the estimated CAGR during that period for those metrics; the financial assumptions underlying the strategic business plan for FY18-FY20; Sysco s marketing strategy focusing on optimizing and growing our local and multi-unit account segments and enriching the customer experience through our consultative sales model, new technology solutions and enhanced flexibility in our sales and support models; our plans to deliver operational excellence through leveraging our portfolio of businesses, differentiating our product offerings, transforming our sales model and optimizing our supply chain; our plans to engage the power of our people by empowering our workforce, maintaining an open, diverse and respectful work environment for all, promoting an accountable, performance-driven culture and focusing on the voice of the customer; our expectations regarding the benefits of our efforts to optimize our business by fostering an innovation culture, developing a global support model, intensifying a cost-mindset focused on simplification and value creations and driving agility in all aspects of our business; our expectations concerning the benefits of various marketing, supply chain and business technology initiatives; and our expectations regarding the benefits of, and the sufficiency of our liquidity for, future acquisitions. The success of these plans and expectations are subject to the general risks associated with our business, including the risks of interruption of supplies due to lack of long-term contracts, severe weather, crop conditions, work stoppages, intense competition, technology disruptions, dependence on large regional and national customers, inflation risks, the impact of fuel prices, adverse publicity, and labor issues. Risks and uncertainties also include risks impacting the economy generally, including the risks that the current general economic conditions will deteriorate, or consumer confidence in the economy or consumer spending, particularly on food-away-from-home, may decline. Market conditions may not improve. If sales from our locally managed customers do not grow at the same rate as sales from regional and national customers, our gross margins may decline. Our ability to meet our long-term strategic objectives depends largely on the success of our various business initiatives, including efforts related to revenue management, expense management, our digital e-commerce strategy and any efforts related to restructuring or the reduction of administrative costs. There are various risks related to these efforts, including the risk that these efforts may not provide the expected benefits in our anticipated time frame, if at all, and may prove costlier than expected; the risk that the actual costs of any initiatives may be greater or less than currently expected; and the risk of adverse effects to our business, results of operations and liquidity if past and future undertakings, and the associated changes to our business, do not prove to be cost effective or do not result in the cost savings and other benefits at the levels that we anticipate. Our plans related to and the timing of any initiatives are subject to change at any time based on management s subjective evaluation of our overall business needs. If we are unable to realize the anticipated benefits from our efforts, we could become cost disadvantaged in the marketplace, and our competitiveness and our profitability could decrease. Capital expenditures may vary based on changes in business plans and other factors, including risks related to the implementation of various initiatives, the timing and successful completion of acquisitions, construction schedules and the possibility that other cash requirements could result in delays or cancellations of capital spending. Periods of high inflation, either overall or in certain product categories, can have a negative impact on us and our customers, as high food costs can reduce consumer spending in the food-away-from-home market, and may negatively impact our sales, gross profit, operating income and earnings, and periods of deflation can be difficult to manage effectively. Fluctuations in inflation and deflation, as well as fluctuations in the value of foreign currencies, are beyond our control and subject to broader market forces. Expanding into international markets presents unique challenges and risks, including compliance with local laws, regulations and customs and the impact of local political and economic conditions, including the impact of Brexit, and such expansion efforts may not be successful. Any business that we acquire, including the Brakes Group, may not perform as expected, and we may not realize the anticipated benefits of our acquisitions or realizing such benefits may take longer than expected. Expectations regarding the financial statement impact of any acquisitions may change based on management s subjective evaluation. For a discussion of additional factors impacting Sysco s business, see the company s Annual Report on Form 10-K for the year ended July 1, 2017, as filed with the SEC, and the company s subsequent filings with the SEC. Sysco does not undertake to update its forward-looking statements, except as required by applicable law. 3

4 AGENDA 8:30-8:35am: Neil Russell - VP, Investor Relations & Communications 8:35-9:20am: Tom Bené - President & Chief Operating Officer / Incoming CEO 9:20-9:40am: Bill Goetz - SVP, Sales & Marketing 9:40-10:15am: Greg Bertrand - SVP, U.S. Foodservice Operations 10:15-10:25am: Break 10:25-10:40am: Paul Moskowitz - EVP, Human Resources 10:40-11:10am: Wayne Shurts - EVP, Chief Technology Officer 11:10-11:25am: Break / Transition to CX Room 11:25-12:55pm: Lunch / Customer Experience Room 1:00-1:30pm: Joel Grade - EVP, Chief Financial Officer 1:30-1:40pm: Tom Bené - President & Chief Operating Officer / Incoming CEO 1:40-2:00pm: Q&A

5 TOM BENÉ PRESIDENT & COO / INCOMING CEO

6 Our VISION To be our customers most valued and trusted business partner

7 OUR CORE VALUES REPRESENT WHO WE ARE, WHAT WE STAND FOR & WHAT WE ASPIRE TO BE Integrity Inclusiveness Excellence Teamwork Responsibility Committed to doing the right thing Creating an open, diverse and respectful environment In everything we do Working as one to help our customers succeed To our customer, associates, shareholders and communities 7

8 OUR CORPORATE SOCIAL RESPONSIBILITY (CSR) EFFORTS ARE FOCUSED ON PEOPLE, PRODUCTS & THE PLANET PEOPLE Charitable Giving Diversity & Inclusion Health & Wellness PRODUCTS Human & Labor Rights Animal Welfare Responsible Sourcing PLANET Sustainable Agriculture Energy Waste 8

9 WE HAVE A STRONG LEADERSHIP TEAM WITH MANY YEARS OF KNOWLEDGE & OPERATING EXPERIENCE YEARS OF SYSCO EXPERIENCE YEARS OF INDUSTRY EXPERIENCE Brian Beach SVP, Sysco Labs & Customer Experience 7 7 Tom Bene President & Chief Operating Officer / Incoming CEO 4 27 Greg Bertrand SVP, U.S. Foodservice Operations Scott Charlton EVP, Supply Chain 4 37 Bill Goetz SVP, Sales & Marketing 6 6 Joel Grade EVP & Chief Financial Officer Ajoy Karna SVP, Int l Foodservice Operations, Europe 5 25 Russell Libby EVP, Administration & Corporate Secretary Paul Moskowitz EVP, Human Resources 7 25 Wayne Shurts EVP & Chief Technology Officer 5 31 Scott Sonnemaker SVP, Int l Foodservice Operations, Americas Brian Todd SVP, Merchandising

10 OUR CUSTOMER-CENTRIC APPROACH LEVERAGES OUR EXPERTISE ACROSS FUNCTIONS Enabling our companies to serve our customers flawlessly Customers Operating companies Operate the business Execute flawlessly Business units Enable the operating companies Provide resources & support Corporate functions Create tools, processes & strategy 10

11 SYSCO S BUSINESS & FY18 FY20 THREE YEAR PLAN

12 WE HAVE CONSISTENTLY DELIVERED STRONG RESULTS, WHICH HAVE TRANSLATED INTO SOLID RETURNS FOR SHAREHOLDERS TO BE OUR CUSTOMERS MOST VALUED AND TRUSTED BUSINESS PARTNER GROW GROSS PROFIT Accelerate local case growth Improve margins LEVERAGE SUPPLY CHAIN COSTS REDUCE ADMINISTRATIVE COSTS ACHIEVE FINANCIAL OBJECTIVES OUR PEOPLE BUSINESS TECHNOLOGY Local Cases Gross Profit Adjusted Operating Income Adjusted EPS FY16 FY17 FINANCIAL RESULTS 1 Adjusted ROIC 2 Total Shareholder Return 3 2.5% 4.0% 11% 13% 16% 21% 1 See Non_GAAP reconciliations at the end of the presentation; 2-year average of adjusted fiscal 2016 and 2017 results; 2 FY17 ROIC; excluding Brakes; 3 2-year annualized average ending June

13 SYSCO HAS A PRESENCE IN A ROUGHLY $375B, LARGE & FRAGMENTED FOODSERVICE MARKET While also serving customers in another 81 countries 13

14 TECHNOMIC S FOODSERVICE INDUSTRY REAL GROWTH RATES 5-year Real CAGR Noncommercial Travel & Leisure Retailers 1.1% 2.0% 2.9% We are focused on gaining share across multiple higher-growth segments Restaurants 1.7% Small Chains & Independents Chains Top 100 Chains 1.5% 1.9% 1.8% Accelerate growth and gain market share with local customers Total Foodservice 1.7% Source: Technomic LTF, July 2017; Retailers include Supermarkets, Convenience Stores and Other Retailers; Travel&Leisure includes Recreation, Lodging, Transportation and Caterers; Noncommercial includes Education, Healthcare, Refreshment Services, Military and Other 14

15 WE OPERATE THE BUSINESS IN FOUR MAJOR SEGMENTS THAT COMPRISE THE SYSCO PORTFOLIO OF BUSINESSES U.S. Foodservice Operations Core market U.S. broadline serves as the foundation % OF TOTAL REVENUE Specialty companies enhance our portfolio of products 68% International Foodservice Operations Geographic expansion 19% SYGMA Restaurant segment penetration 11% OTHER Lodging segment penetration Technology-focused division 2% 15

16 THE U.S. MARKET IS THE FOUNDATION OF OUR BUSINESS, WITH MEANINGFUL GROWTH POTENTIAL Broad Assortment Fresh Produce Fresh Meat, Poultry, Seafood UNIQUE CAPABILITIES Serves diverse customer base of local and contract customers Efficient model Deep knowledge Specialized solutions Operational Flexibility 16

17 INTERNATIONAL REPRESENTS GROWTH OPPORTUNITIES IN EXISTING MARKETS & TARGETED GEOGRAPHIC EXPANSION CANADA LATIN AMERICA EUROPE International Americas International Europe Estimated Market Size ~ $25B ~ $100B ~ $250B Key Points Grow gross profit & optimize cost structure in Canada Positioned for longer-term growth in Latin America Enter and grow in sizeable street segment in Mexico Platform for future European expansion Leverage scale to drive operating efficiencies 17

18 SYGMA OPERATES IN THE SYSTEMS DISTRIBUTION SPACE & SPECIALIZES IN SERVING AT-SCALE CHAIN CUSTOMERS EXAMPLE CUSTOMERS 2016 U.S. foodservice market size $B, excluding alcohol $45B 16% Systems distributors $279B total Source: Technomic, Nov 2016, company info & financials 18

19 GUEST SUPPLY IS THE LEADING GLOBAL MANUFACTURER & DISTRIBUTOR OF SUPPLIES TO THE LODGING INDUSTRY 30,000 hotels in 113 countries Leading presence in U.S. market Manufacture personal care amenity products & textile products Distribute 30,000+ operating supplies, furniture, fixtures, and equipment Global Lodging $10B Opportunity 175,000 Hotels 16MM Rooms 19

20 SYSCO LABS IS OUR INNOVATION TEAM, LEVERAGING AGILE & DESIGN THINKING TO REIMAGINE THE CUSTOMER EXPERIENCE Customer-centric Innovation Culture Cross-functional Pace over perfection Customers in the room and involved throughout design and build phases Silicon Valley thinking (art of the possible), big ideas, challenging status quo - with clear focus Cross-functional engagement to drive diverse thinking and solutioning Rapid design, build out, and continuous iteration; with willingness to fail smart, fail fast 20

21 FOODSERVICE TRENDS ARE RE-DEFINING CUSTOMER NEEDS Shifting Consumer Expectations Technology Innovation Foodservice Operators Increased Costs Source: Technomic Industry Trends Report Operators who are most prepared to leverage these trends will accelerate 21

22 CONSUMERS' EXPECTATIONS REGARDING FOOD SOURCE & QUALITY ARE SIGNIFICANTLY INCREASING Healthy 67% Consumers: Healthy options an important factor when choosing a restaurant 2 89% Operators: Health and Wellness will have a great or moderate influence on future purchases 1 Local 68% Consumers: Say they are more likely to choose restaurants offering local food 2 Operators: Locally sourced food becoming more important 2 % of operators adding new locally sourced menu items 96% 88% 85% 75% 42% 1 Technomic clean-sustainable report NRA Forecast 2016 Fine Dining Fast Casual Casual Family QSR 22

23 YOUNGER GENERATIONS ARE FUELING THE DEMAND FOR ETHNIC PRODUCTS & CUISINE TYPES Ethnic Items and Flavors Trend Demand for Ethnic by Generation 23

24 TECHNOLOGY IS ALSO PROGRESSIVELY MORE IMPORTANT IN FOODSERVICE & HELPS OPERATORS COMPETE 50% of restaurant searches are done on mobile devices $5.2B in estimated 2016 orders went through Food Delivery Apps, a 45% growth 1 Cost efficiencies & labor cost savings are pushing technology use by operators 1 Cowen and Co Investment 24

25 BUILDING ON OUR SOLID FOUNDATION, WE ARE EVOLVING TO FURTHER ACCELERATE VALUE CREATION & GROWTH Strong customer relationships Depth of product offering Enterprise scale & scope Highly efficient supply chain Strong cash flow & balance sheet Sysco is rooted in a strong foundation and a history of profitable growth Best in class salesforce 25

26 OUR FOUR STRATEGIC PRIORITIES WILL ACCELERATE OUR CURRENT GROWTH & POSITION US WELL FOR THE FUTURE 26

27 ENRICHING THE CUSTOMER EXPERIENCE IS A CRITICAL COMPONENT OF OUR STRATEGY ENRICHING THE CUSTOMER EXPERIENCE Leverage robust data / insights capabilities to change the conversation Evolve our consultative sales model to deliver value-added solutions Deliver new technology solutions to drive enhanced customer loyalty Provide enhanced flexibility in our service and support models Develop innovative, fresh, on-trend products as ONE Sysco ENRICH THE CUSTOMER EXPERIENCE 27

28 DELIVERING OPERATIONAL EXCELLENCE IS KEY TO ACHIEVING OUR COST & PRODUCTIVITY GOALS DELIVER OPERATIONAL EXCELLENCE: Improve productivity through automation and enhanced technology Deepen our utilization of continuous improvement and process tools Drive consistency and cost reduction through leveraging our shared services approach Increase product and service capabilities through the optimization of our supply chain network DELIVER OPERATIONAL EXCELLENCE 28

29 THE SYSCO WAY OF OPERATING WILL CREATE A MORE AGILE ENVIRONMENT THAT WILL ACCELERATE CUSTOMER VALUE OPTIMIZE THE BUSINESS: THE SYSCO WAY Foster an Innovation Culture by quickly testing new ideas with willingness to fail smart, fail fast Develop a global support model to drive value across our businesses Intensify a cost-mindset that focuses on simplification and value creation Drive agility in all aspects of how we operate to accelerate change in the business OPTIMIZE THE BUSINESS 29

30 ACTIVATING THE POWER OF OUR PEOPLE WILL UNLOCK SIGNIFICANT GROWTH ACTIVATE THE POWER OF OUR PEOPLE: Ensure the Voice of the Customer is at the heart of everything we do Note: will develop graphics for these pages Empower individuals to act in the best interest of our customers and Sysco Foster an open, diverse, and respectful environment for all associates Sustain a highly engaged, accountable and performance driven culture ACTIVATE THE POWER OF OUR PEOPLE 30

31 M&A IS A KEY LEVER OF OUR GROWTH STRATEGY Strategically acquire companies in existing markets Grow our share with local operators Achieve supply chain synergies Fill potential gaps in our product offerings and capabilities Thoughtfully expand into new markets Develop platforms for further growth Leverage local market knowledge and expertise to help grow our business We continue to enhance our M&A capabilities 31

32 FOCUSING ON THESE KEY STRATEGIC PRIORITIES WILL DELIVER SOLID OPERATING PERFORMANCE OVER THE NEXT THREE YEARS Cases Sales Gross Profit 3.0% LOCAL: +3.5% 4.0% - 4.5% 4% Operating Income EPS 9% 12% $650M - $700M 1 1 See Non-GAAP reconciliations at the end of the presentation. 32

33 SYSCO, ONE COMPANY, MANY SOLUTIONS, ENABLING CUSTOMER SUCCESS 33

34 BILL GOETZ SVP, SALES & MARKETING

35 WE USE INSIGHTS TO INFORM ALL ASPECTS OF OUR SALES AND MARKETING AGENDA Insights led to our recent rebranding that tells our story to the marketplace Through Insights, we have developed unique and differentiated value propositions by segment To further innovate, we are leveraging Sysco Labs to re-imagine the Customer Experience and our sales model ENRICH THE CUSTOMER EXPERIENCE 35

36 WE HAVE A MULTI-FACETED APPROACH TO GATHER A DEEPER UNDERSTANDING OF THE CUSTOMER Consumer Trends 51% of millennials are seeking ethnicinspired dining options Operator Trends 2/3 of independents report that they are currently using POS systems. Half of respondents indicate that they are using social media Develop strategies & solutions Customer Voice #1 Consistency in service interaction across operating companies cited as the #1 requirement for multi-unit customers ENRICH THE CUSTOMER EXPERIENCE 36

37 OUR INSIGHT BASED APPROACH INFORMS OUR STRATEGIES THROUGHOUT THE ENTIRE CUSTOMER LIFECYCLE Innovate through customer-centric approach to new products, tools + technology, and reimagined customer journeys Deep Customer Insights Grow from deep relationships and the right products + solutions delivered through multiple channels Acquire new customers with the right value proposition and strength of our brand ENRICH THE CUSTOMER EXPERIENCE 37

38 INSIGHTS LED TO OUR RECENT REBRANDING EFFORT TO TELL OUR STORY TO CUSTOMERS & PROSPECTS At the heart of food and service we have passion for our business and for our customers ENRICH THE CUSTOMER EXPERIENCE 38

39 GROUNDED IN CUSTOMER RESEARCH, OUR VALUE PROPOSITIONS DEFINE OUR KEY DIFFERENTIATION POINTS Sysco delivers fresh food and fresh ideas Sysco provides support and solutions Sysco supports the local community that help acquire, develop and increase share of wallet with current customers ENRICH THE CUSTOMER EXPERIENCE 39

40 HEALTHCARE VALUE PROPOSITIONS END TO END SOLUTIONS Delivering Fresh Food and Ideas NetIMPAC: Centralized menu planning NetRecipe: 22,000+ recipes enutrition: 237,000 products Providing Support & Solutions Order Guide Management KEYS: Foodservice staff training Emergency Response Process: Harvey & Irma Supports our Communities and Industry Board level positions in key industry associations Holistic local and regional industry educational programs ENRICH THE CUSTOMER EXPERIENCE 40

41 CUSTOMER NEEDS ARE DRIVING OUR SALES MODEL EVOLUTION SERVICES Multi-Unit Manage compliance Fewer points of contact Tools for managing unit compliance Consolidated invoicing and reporting Centralized services Local Partner for growth Omni-channel approach combining MAs and digital tools Consulting / menu development Flexible deliveries PRODUCTS Standard, consistent Standard, limited set of products Consistency across all units Variety, flexibility Breadth of products Local / regional products Labor savings Disciplined, profitable growth Increase share of wallet ENRICH THE CUSTOMER EXPERIENCE 41

42 OUR MULTI-UNIT SALES MODEL IS FOCUSED ON OPTIMIZING AND GROWING PRIORITIZED SEGMENTS Developing Solutions & Innovations Centralized Services Identify Optimal Segments Grow & Optimize Strategic Partnership Selling ENRICH THE CUSTOMER EXPERIENCE 42

43 WE HAVE IDENTIFIED THE OPTIMAL MULTI-UNIT SEGMENTS FOR PROFITABLE GROWTH Restaurants Healthcare Travel / Leisure Retail TECHNOMIC 5-YEAR CAGR ( ) Fast casual 6% Senior Living 6% Recreation ~2% Supermarket 5% ENRICH THE CUSTOMER EXPERIENCE 43

44 WE ARE CENTRALIZING SUPPORT SERVICES FOR OUR MULTI-UNIT CUSTOMERS CENTRALIZATION SERVICES Limited time offers Order guide management Pricing/audit inquiries Financial inquiries Business transfer Customer location additions New customer onboarding to create consistency and enhanced customer experience ENRICH THE CUSTOMER EXPERIENCE 44

45 CUSTOMER NEEDS ARE DRIVING OUR SALES MODEL EVOLUTION SERVICES PRODUCTS Multi-Unit Manage compliance Fewer points of contact Tools for managing unit compliance Consolidated invoicing and reporting Centralized services Standard, consistent Standard, limited set of products Consistency across all units Local Partner for growth Omni-channel approach combining MAs and digital tools Consulting / menu development Flexible deliveries Variety, flexibility Breadth of products Local / regional products Labor savings Disciplined, profitable growth Increase share of wallet ENRICH THE CUSTOMER EXPERIENCE 45

46 WE ARE LEVERAGING SYSCO LABS TO REIMAGINE THE ENTIRE CUSTOMER JOURNEY FROM START TO FINISH Discover Onboard Shop Receive Order ` Customer-centric, outside looking in Research and data-driven Agile, collaborative, cross-functional Innovation model leveraging rapid design and iterative approach, prioritizing pace over perfection Solutions that reflect customer thinking and desires, simplifying interactions with Sysco The customer is part of the design, build and re-imagination of a solution ENRICH THE CUSTOMER EXPERIENCE 46

47 WE ARE TRANSFORMING OUR LOCAL SALES MODEL TO ACCELERATE GROWTH CUSTOMER-CENTRIC APPROACH Identify targeted opportunities Omni-channel approach Product & business expertise Consistent & market relevant pricing Enhanced coaching & training ENRICH THE CUSTOMER EXPERIENCE 47

48 MULTICULTURAL SEGMENTS CONTINUE TO LEAD RESTAURANT GROWTH Segment Segment Growth Market Size Hispanic Italian Asian 3x industry growth 1.5x industry growth 3x industry growth $9B $10B $8B Focusing on high impact ethnic segments to further differentiate our offerings ENRICH THE CUSTOMER EXPERIENCE 48

49 WE HAVE A PROVEN PLAN TO MEET THE NEEDS OF THE MULTICULTURAL CUSTOMER Execute 4 Point Plan Unique sales model in key geographies Build culturally relevant brand Develop a robust supplier base Engagement in the local Hispanic communities DOUBLE DIGIT SALES GROWTH Following a similar approach to Italian and Asian segments ENRICH THE CUSTOMER EXPERIENCE 49

50 WE WILL CONTINUE TO GROW OUR BUSINESS BY SUPPORTING OUR CUSTOMERS NEEDS & EXPECTATIONS ENRICHING THE CUSTOMER EXPERIENCE Leveraging the power of our brand Improve loyalty through differentiated solutions Evolve sales model to meet the changing needs of our customers Insights and innovations are the foundation for future growth Differentiated tools and capabilities foster ease of doing business and improve customer loyalty ENRICH THE CUSTOMER EXPERIENCE 50

51 GREG BERTRAND SVP, U.S. FOODSERVICE OPERATIONS

52 OUR U.S. FOODSERVICE BUSINESS IS A KEY DRIVER OF SYSCO S OVERALL PROFITABILITY Portfolio of U.S. Operations Legend Broadline U.S. broadline serves as the foundation: Delivers a comprehensive assortment to a wide base of customers Specialty companies enhance our portfolio of products: Provide our customers with differentiated fresh meat, seafood, produce, and specialty items Alaska Hawaii Puerto Rico We have developed the most comprehensive specialty portfolio through acquisitions over the last 20+ years ENRICH THE CUSTOMER EXPERIENCE 52

53 OUR U.S. FOODSERVICE BUSINESS IS A KEY DRIVER OF SYSCO S OVERALL PROFITABILITY Portfolio of U.S. Operations Legend FreshPoint U.S. broadline serves as the foundation: Delivers a comprehensive assortment to a wide base of customers Specialty companies enhance our portfolio of products: Provide our customers with differentiated fresh meat, seafood, produce, and specialty items Puerto Rico We have developed the most comprehensive specialty portfolio through acquisitions over the last 20+ years ENRICH THE CUSTOMER EXPERIENCE 53

54 OUR U.S. FOODSERVICE BUSINESS IS A KEY DRIVER OF SYSCO S OVERALL PROFITABILITY Portfolio of U.S. Operations Legend Specialty meat U.S. broadline serves as the foundation: Delivers a comprehensive assortment to a wide base of customers Specialty companies enhance our portfolio of products: Provide our customers with differentiated fresh meat, seafood, produce, and specialty items Puerto Rico We have developed the most comprehensive specialty portfolio through acquisitions over the last 20+ years ENRICH THE CUSTOMER EXPERIENCE 54

55 OUR U.S. FOODSERVICE BUSINESS IS A KEY DRIVER OF SYSCO S OVERALL PROFITABILITY Portfolio of U.S. Operations Legend Specialty meat SOTF / European Imports U.S. broadline serves as the foundation: Delivers a comprehensive assortment to a wide base of customers Specialty companies enhance our portfolio of products: Provide our customers with differentiated fresh meat, seafood, produce, and specialty items Puerto Rico We have developed the most comprehensive specialty portfolio through acquisitions over the last 20+ years ENRICH THE CUSTOMER EXPERIENCE 55

56 OUR U.S. FOODSERVICE BUSINESS IS A KEY DRIVER OF SYSCO S OVERALL PROFITABILITY Portfolio of U.S. Operations Legend Broadline FreshPoint Specialty meat SOTF / European Imports U.S. broadline serves as the foundation: Delivers a comprehensive assortment to a wide base of customers Specialty companies enhance our portfolio of products: Provide our customers with differentiated fresh meat, seafood, produce, and specialty items Alaska Hawaii Puerto Rico We have developed the most comprehensive specialty portfolio through acquisitions over the last 20+ years ENRICH THE CUSTOMER EXPERIENCE 56

57 WE ARE IMPROVING OUR U.S. FOODSERVICE BUSINESS THROUGH A NUMBER OF STRATEGIES ACROSS OUR OPERATIONS Leverage our portfolio Differentiate our product assortment Transform our sales model Optimize our supply chain Our portfolio of companies provide our customers with the products and services that meet their needs We continue to focus on our customer-centric strategy through the breadth of our assortment We are enabling our salesforce with the tools, processes, and support needed to meet our customers needs We are delivering an improved customer experience and increased efficiency through ongoing operational enhancements 57

58 SPECIALTY COMPANIES ENHANCE OUR PRODUCT ASSORTMENT, CREATE SERVICE FLEXIBILITY, AND PROVIDE DEEPER KNOWLEDGE Each type of company provides customers with a different value proposition Broadline Fresh Produce Fresh Meat and Seafood Distributes a broad assortment of products Single provider for foodservice products and distribution Specializes in fresh produce Tomato repack, produce processing, broadline splits and repack Specialize in fresh meat, seafood, and poultry Repack, grinding, aging, cutting, processing / manufacturing, certifications ENRICH THE CUSTOMER EXPERIENCE 58

59 OUR ONESYSCO PROGRAM IS AN INTEGRATED GO TO MARKET APPROACH ACROSS OUR BROADLINE & SPECIALTY COMPANIES OneSysco leverages broadline & specialty capabilities Deliver on fresh & local needs of our customers Broadline Produce Leverage Broadline & specialty companies to provide customized service offerings Meat & Seafood Provide our customers with a clear interface to our companies through the collaborative approach of our OneSysco program and serves as a platform for future growth ENRICH THE CUSTOMER EXPERIENCE 59

60 WE ARE IMPROVING OUR U.S. FOODSERVICE BUSINESS THROUGH A NUMBER OF STRATEGIES ACROSS OUR OPERATIONS Leverage our portfolio Differentiate our product assortment Transform our sales model Optimize our supply chain Our portfolio of companies provide our customers with the products and services that meet their needs We continue to focus on our customer-centric strategy through the breadth of our assortment We are enabling our salesforce with the tools, processes, and support needed to meet our customers needs We are delivering an improved customer experience and increased efficiency through ongoing operational enhancements 60

61 CATEGORY MANAGEMENT IS GROUNDED IN DEEP INSIGHTS FROM THE CUSTOMER, MARKETPLACE AND OUR SUPPLIERS Variety means giving more breadth of assortment & offering new, on-trend items that customers want Value means delivering the best quality we can in a competitive way Innovation means bringing new products to market to meet our customers changing needs enabling a national assortment that delivers variety, value, and innovation ENRICH THE CUSTOMER EXPERIENCE 61

62 WE ARE EVOLVING OUR APPROACH TO BECOME EVEN MORE CUSTOMER-CENTRIC National Consistent national assortment to meet essential customer needs Regional augmented by regional products and brands Local and enhanced with local items while driving additional operational efficiencies in how we source & distribute products ENRICH THE CUSTOMER EXPERIENCE 62

63 SYSCO BRAND PORTFOLIO DELIVERS SIGNIFICANT OVERALL VALUE IN QUALITY, VARIETY AND PRICE TO OUR CUSTOMERS Deliver a broad assortment of quality products and recognized brands across multiple categories Improve profitability for our customers through multiple quality tiers and innovative and exclusive products Enable labor savings for our customers through value-added product solutions Adhere to the highest levels of food safety in the industry including four $1B brands ENRICH THE CUSTOMER EXPERIENCE 63

64 BRAND REVITALIZATION IS DELIVERING A SIMPLER, MORE RELEVANT OFFERING AND NEW SALES TOOLS FOR OUR MAS The Wholesome Farms Story Wholesome Farms offers products that are honestly dairy the first ingredient is always milk, cream, or egg. Wholesome Farms provides nourishing and consistent dairy ingredients, straight from the farm. Example selling tools Brand Promise & Positioning Point of sale flyers Laptop Slammers Banners and Posters Branded Packaging Brand videos Food magazine featured articles National trade advertising National training at general sales meetings ENRICH THE CUSTOMER EXPERIENCE 64

65 OUR ASSORTMENT IS ENHANCED BY EXCLUSIVE ITEMS THAT HELP CUSTOMERS DIFFERENTIATE THROUGH INNOVATIVE PRODUCTS September 2017 Cutting Edge Solutions magazine Beyond Meat The Beyond Burger COLEMAN Organic Small Bird Chicken New on-trend items that keep menus fresh and drive customer traffic Products that deliver labor-saving, versatility and better-for-you solutions ENRICH THE CUSTOMER EXPERIENCE 65

66 WE ARE IMPROVING OUR U.S. FOODSERVICE BUSINESS THROUGH A NUMBER OF STRATEGIES ACROSS OUR OPERATIONS Leverage our portfolio Differentiate our product assortment Transform our sales model Optimize our supply chain Our portfolio of companies provide our customers with the products and services that meet their needs We continue to focus on our customer-centric strategy through the breadth of our assortment We are enabling our salesforce with the tools, processes, and support needed to meet our customers needs We are delivering an improved customer experience and increased efficiency through ongoing operational enhancements 66

67 WE ARE TRANSITIONING TO AN INCREASINGLY CONSULTATIVE SALES APPROACH SUPPORTED BY NEW TOOLS & CAPABILITIES Processes & tools Technology and processes that allow sales teams more time to sell and provide customers flexible ordering options Capabilities & development Training and development programs to advance capabilities in high-value activities & drive successful customer interactions Sales support Resources that are differentiated and bring value to our customers ENRICH THE CUSTOMER EXPERIENCE 67

68 SYSCO S INNOVATIVE PROCESSES & TOOLS PROVIDE OUR SALES TEAM MORE TIME TO SELL & SUPPORT OUR CUSTOMERS Enhancing our ecommerce capabilities Provide customers with a choice to order how, when, and where they want Support our MAs through processes & tools that improve their productivity Data-driven territory planning Pricing guidance & market pricing intelligence Creating applications to be agile, easy, and intuitive Increasing adoption of ecommerce as a sales channel Streamlined payment technology ENRICH THE CUSTOMER EXPERIENCE 68

69 SYSCO IS ADVANCING OUR SALES CAPABILITIES TO ENABLE CONSULTATIVE SELLING FOR OUR LOCAL CUSTOMERS Prioritized customer-facing activities Sample Trainings New MA orientation program Building capabilities Learning & Development programs MA Accelerator program focused on new capability development Sales leadership training for skill building (e.g. coaching and technology) Highly effective Sales organization Optimizing use of MA time to provide additional value to our customers ENRICH THE CUSTOMER EXPERIENCE 69

70 WE ARE PROVIDING MARKETING ASSOCIATES WITH THE SUPPORT & RESOURCES TO DRIVE SALES GROWTH Resources Culinary Team Business Resources Specialists Services & Support Business reviews and chef s visits Menu development & savings opportunities New product introductions and innovative recipe ideas Category specific expertise and guidance Business building activities (e.g., social media presence) Product development support & product cuttings Menu design resources Restaurant technologies Marketing collateral for product presentations MAs act as the liaison between Sysco s team of experts and customer accounts ENRICH THE CUSTOMER EXPERIENCE 70

71 WE ARE IMPROVING OUR U.S. FOODSERVICE BUSINESS THROUGH A NUMBER OF STRATEGIES ACROSS OUR OPERATIONS Leverage our portfolio Differentiate our product assortment Transform our sales model Optimize our supply chain Our portfolio of companies provide our customers with the products and services that meet their needs We continue to focus on our customer-centric strategy through the breadth of our assortment We are enabling our salesforce with the tools, processes, and support needed to meet our customers needs We are delivering an improved customer experience and increased efficiency through ongoing operational enhancements 71

72 WE ARE EVOLVING OUR SUPPLY CHAIN THROUGH NEAR TERM & LONG TERM STRATEGIES Centers of excellence drive innovation & best practices Continuous improvement & capability building Center of Excellence & innovation Near term strategies Safety Operational efficiency Supply Chain Operations Leveraging assets Long term strategies Field execution Best practices & tools One Sysco Network optimization Alternative delivery methods DELIVER OPERATIONAL EXCELLENCE

73 WE ARE FOCUSED ON CONTINUING TO INCREASE OPERATIONAL EFFICIENCY AND PROVIDE MORE DELIVERY FLEXIBILITY Operations Minimizing errors & waste by applying LEAN practices Driving efficiencies in our facilities through optimized slotting Reducing miles & fuel through routing best practices Increasing transparency through technology and real time data Customer Benefits Reliability in order fulfillment Consistency in delivery experience Transparency of order status Timely arrival of deliveries while aggressively managing cost per piece over the next three years DELIVER OPERATIONAL EXCELLENCE 73

74 EXECUTING LONG TERM STRATEGIES TO MEET THE CHANGING NEEDS OF OUR CUSTOMERS Leveraging capabilities and scale across our OneSysco portfolio Optimizing our network to broaden the product assortment & create further flexibility Introducing alternative methods for last mile delivery to provide customers with additional options Adopting innovative technologies to increase efficiency, including investment in Tesla DELIVER OPERATIONAL EXCELLENCE 74

75 U.S. OPERATIONS WILL CONTINUE TO DELIVER STRONG RESULTS THROUGH A VARIETY OF CUSTOMER-CENTRIC INITIATIVES DELIVERING STRONG RESULTS Leveraging our portfolio to provide our customers with the products & services that meet their needs Differentiating our product assortment by increasing the breadth of our offerings & through innovation Transforming our sales model to a more consultative approach supported by tools, processes, and resources Optimizing our supply chain to improve the customer experience and increase efficiency DELIVER OPERATIONAL EXCELLENCE 75

76 BREAK

77 PAUL MOSKOWITZ EVP, HUMAN RESOURCES

78 ACTIVATING THE POWER OF OUR PEOPLE WILL ALLOW US TO DELIVER OUR PLAN ACTIVATE THE POWER OF OUR PEOPLE: Ensure the Voice of the Customer is at the heart of everything we do Empower individuals to act in the best interest of our customers and Sysco Foster an open, diverse, and respectful environment for all associates Sustain a highly engaged, accountable and performance driven culture ACTIVATE THE POWER OF OUR PEOPLE 78

79 EMPOWERED & HIGHLY CAPABLE INDIVIDUALS / TEAMS Customers Operating companies Operate the Operate business the business Execute Execute flawlessly flawlessly hg Business units Enable the operating companies Provide resources & support Strong, experienced leaders Significant Deep pipeline culinary, of talent specialty, sales and marketing expertise Corporate functions Create tools, Create processes tools, processes strategy & strategy ACTIVATE THE POWER OF OUR PEOPLE 79

80 DIVERSITY & INCLUSION IS A KEY BUSINESS IMPERATIVE THAT HELPS US TO REFLECT OUR CUSTOMERS & COMMUNITIES More than half of US restaurants are owned by women Millennials will be 50% of the US workforce within 5 years +45% of restaurant managers are women +75% of the global workforce within 10 years Our goal is to hire and retain the best talent from the market Strategic Talent Acquisition + + Partnerships Inclusion Strategies ACTIVATE THE POWER OF OUR PEOPLE 80

81 SIGNIFICANT INVESTMENT IN TRAINING OUR SALES ORGANIZATION HAS RESULTED IN IMPROVED PERFORMANCE Continued Investment in Targeted Training Experienced MAs participate in Accelerator Training and showed significant performance increases ROBUST & STANDARDIZED ONBOARDING & TRAINING A new MA experiences 30 weeks of supervised preparation 1.7X higher Gross Profit $ Growth 1.1X higher Case Growth Building a support network for our MAs to drive business results and achieve success ACTIVATE THE POWER OF OUR PEOPLE 81

82 OUR CULTURE IS FOUNDATIONAL FOR DRIVING ENGAGEMENT & DELIVERING ON OUR PLAN Our Strengths Excellent cultural health Strong customer focus Significant pride in and loyalty to Sysco Operationally disciplined Growing talent from within Our Focus Staying connected with associates Real-time, all-the-time feedback Agile ways of working Capturing the best talent in a candidate-driven marketplace Strong Partnerships Across the Organization ACTIVATE THE POWER OF OUR PEOPLE 82

83 BY PROMOTING A PERFORMANCE CULTURE, WE ALIGN COMPANY & ASSOCIATE RESULTS Sales Operations Leadership KEY METRICS Sales and Gross Profit Growth Case Growth E-commerce Cases per Hour Accuracy Delivery Stops Case Growth Gross Profit Operating Profit EPS & ROIC / Equity incentives RECOGNITION Torchbearers Pacesetters Haul of Fame Operating Company Wall of Fame ACTIVATE THE POWER OF OUR PEOPLE 83

84 ACTIVATING THE POWER OF OUR PEOPLE WILL ALLOW US TO ACHIEVE OUR OBJECTIVES ACHIEVE OUR OBJECTIVES Strengthen the capabilities of our frontline associates and management team while promoting inclusion Continue to engage our associates and create a more customer-centric environment Maintain alignment of rewards and recognition with our business objectives ACTIVATE THE POWER OF OUR PEOPLE 84

85 WAYNE SHURTS EVP & CTO

86 TECHNOLOGY WILL CONTINUE TO BE A KEY ENABLER OF OUR STRATEGY Enrich the Customer Experience Use Technology to Drive Business Results Deliver Technology Faster and Better 86

87 GREAT ECOMMERCE PROGRESS HAS RESULTED FROM IMPROVEMENTS TO OUR DIGITAL TOOLS ECOMMERCE GROWTH HOW? 40% of local is done through ecommerce 2x more than last year We delivered major enhancements to our tools MySysco: an easy 1 stop shop for all our e-tools Search enhancements Image and content enhancements 87

88 AND HAS RESULTED IN IMPROVED BUSINESS RESULTS MA /customer conversations are changing Greater share of wallet, higher sales and improved loyalty Supplies On The Fly grew 25% last year 88

89 WE WILL CONTINUE TO ENHANCE OUR ECOMMERCE TOOLS Driving improved levels of loyalty: Personalization Targeted offers Reviews and recommendations Transforming ecommerce from an ordering site to a shopping site 89

90 ECOMMERCE AT SYSCO EXTENDS WELL BEYOND ORDER ENTRY Streamlined Payment Technology Reporting Inventory Management 90

91 THE DISCOVER JOURNEY WILL MAKE IT EASY TO FIND AND DO BUSINESS WITH SYSCO Discover - Shopping for a food service supplier 91

92 THE RECEIVE JOURNEY WILL MAKE IT EASIER FOR CUSTOMERS TO PLAN FOR, RECEIVE AND SETTLE DELIVERIES Receive - Exactly when and what goods are arriving? 92

93 OUR TECHNOLOGY OFFERINGS ALSO EXTEND TO INSIDE THE RESTAURANT Sysco s in-restaurant technology solutions Guest Manager Point of Sale Reservations Reporting 93

94 TECHNOLOGY IS ENABLING SYSCO TO BETTER LEVERAGE DATA TO DRIVE IMPROVED RESULTS Revenue management analytics Predict customer churn Develop product recommendations Logistics and network optimization Warehouse management 94

95 AND IS ALSO HELPING US TO DRIVE OUT COSTS Robotic Process Automation Standardizing our core financial systems Re-platforming mission critical systems to the cloud 95

96 WE ARE TRANSFORMING OUR TECHNOLOGY TEAM TO AN AGILE ORGANIZATION Failing and learning fast Product vs. project centric 10%+ increase in team engagement Customer in the Room Self-sufficient Agile Teams Doubled ecommerce adoption growth Doubled ecommerce adoption growth Iterative Development Respond Rapidly to Changing Needs 10%+ increase in team eng ag ement 55%+ decrease in time to market Operating as an agile organization has increased our responsiveness to evolving customer and business needs 96

97 TECHNOLOGY IS A KEY ENABLER TO SYSCO S STRATEGY WINNING FORMULA Enrich the customer experience Use technology to drive business results Deliver technology faster and better 97

98 LUNCH BREAK WILL RESUME AT 1:00PM EST

99 JOEL GRADE EVP & CFO

100 THE SYSCO WAY OF OPERATING INCLUDES A COST-MINDSET THAT FOCUSES ON SIMPLIFICATION & VALUE CREATION TO ACHIEVE OUR PLAN Ongoing focus on cost Financial overview of three-year plan (FY18-FY20) 105

101 THE NEXT EVOLUTION OF COST REDUCTIONS IS BASED ON A HOLISTIC APPROACH PRIORITIZATION OPTIMIZATION Maximized value in intersection of where and how work gets done (e.g. technology investments) Understand what the work is, prioritize to drive business results or manage risk, rationalize unnecessary activities GOVERNANCE Governance, transparency, cost controls, monitoring mechanisms, culture Optimize our cost structure CENTRALIZATION Centers of expertise, greater efficiency and consistency, eliminate redundancy STANDARDIZATION Best practices, tools, benchmarks, standard role profiles OPTIMIZE THE BUSINESS 101

102 WE WILL REDUCE COSTS THROUGH A VARIETY OF DIFFERENT LEVERS Finance Technology Roadmap Smart Spending Agile Transformation Optimizing our Canadian business OPTIMIZE THE BUSINESS 102

103 FINANCE TECHNOLOGY ROADMAP: A PROGRAM FOCUSED ON DRIVING STANDARDIZATION, EFFICIENCY & EFFECTIVENESS KEY DRIVERS Increased standardization of end-to-end global processes Workflow and digital automation on a modern finance platform Seamless customer, vendor, and associate experience OPTIMIZE THE BUSINESS 103

104 SMART SPENDING IS FOCUSED ON G&A CATEGORIES, TAKING A DETAILED LOOK AT SPEND & DRIVING SAVINGS Unprecedented visibility Development of transaction-level visibility reveals cost drivers and potential savings opportunities Dual ownership Combination of traditional P&L owners and new category owners to increase accountability for G&A spend across Sysco Granular budgeting Creation of detailed, driver-based budgets at the lowest level and a repeatable process to ensure spend aligns with priorities Performance management Institution of process and systems to further develop a culture of cost management and ensure Smart Spending savings are captured OPTIMIZE THE BUSINESS 104

105 THE AGILE TRANSFORMATION AT SYSCO Agile will generate return on investment through shorter development cycles, waste reduction and delivery of better solutions as a result of increased collaboration among business, technology and customers FY 18 Launch FY 19 Scale FY 20 Transform Shorter development cycles Waste reduction Better solutions OPTIMIZE THE BUSINESS 105

106 WE ARE OPTIMIZING THE CANADIAN BUSINESS TO IMPROVE EFFICIENCIES Leverage best practices Right-size structure Network Optimization OPTIMIZE THE BUSINESS 106

107 SHARED SERVICES (SBS) IS OUR STRATEGIC PLATFORM FOR CENTRALIZATION Higher service levels and response times Improved compliance and controls Operational efficiency Speed to market Upside from additional shared services All designed to enhance the customer experience OPTIMIZE THE BUSINESS 107

108 FINANCIAL OVERVIEW

109 WE HAVE STRONG MOMENTUM IN THE BUSINESS FOR THE FIRST NINE QUARTERS OF OUR INITIAL THREE-YEAR PLAN THREE-YEAR PLAN (FY15-FY18) ACTUALS AS OF 1Q18 1 Accelerate local case growth 2-3% 2.5% Achieve gross profit growth 1 4% 4% Limit operating expense growth 1 3% 2% Operating income growth 1 $600 - $650M $469M Guiding to the high end of the range ROIC 1 15% 16% 2 Working Capital 4 days 4 days 1 See Non-GAAP reconciliations at the end of this presentation. 2 FY17 results 109

110 KEY UNDERLYING OPERATING ASSUMPTIONS: FY18-FY20 PLAN Topline Inflation: 1% - 2% Total case growth: 3.0% Local case growth: 3.5% Acquisition Investment Continue to pursue core portfolio acquisitions (0.5% - 1.0% of sales) Ongoing assessment of other strategic opportunities Shares Outstanding Reduce diluted shares outstanding Continue to evaluate opportunistic share repurchases CAPEX / Working Capital Annual CAPEX investment of 1.2% - 1.3% of Sales Working capital improvement of 2 days 110

111 OUR THREE-YEAR PLAN DELIVERS TARGETED FINANCIAL RESULTS Gross Profit FY17 FY20 2 (Approx.) 3yr CAGR Sales ($B) $55.4 $63.0 4% - 4.5% $B $10.6 $11.8 4% % 19.1% 18.8% Adj. Expenses 1 $B $8.2 $ % % 14.8% 14.0% Adj. Operating $B $2.4 $3.0 9% Income 1 % 4.3% 4.8% Net Earnings 1 ($B) $1.4 $1.8 9% 1: See Non-GAAP reconciliations at the end of this presentation for FY17 results; 2: Estimated results EPS 1 $2.48 $ $ % ROIC 1 13% 16% 111

112 FOCUSING ON THESE KEY STRATEGIC PRIORITIES WILL ENABLE US TO DELIVER SOLID OPERATING PERFORMANCE FY 20 IMPACT Gross operating income benefit Grow gross profit Leverage supply chain costs Reduce administrative costs 55-65% 10-15% 20-25% Net Operating Income Improvement: $650 - $700M 1 1 See Non-GAAP reconciliations at the end of the presentation 112

113 THE GROWTH OF OPERATING INCOME WILL BE EVENLY PACED THROUGHOUT FY18-FY20 Adjusted Operating Income 1 ($B) CAGR: 9% $3.0 $2.4 1 See Non-GAAP reconciliations at the end of the presentation Fiscal 18 results adjusted for ~ $50M in one-time depreciation 113

114 WE PLAN TO CONTINUE OUR HISTORICAL STRONG OPERATING PERFORMANCE 6.0% 4.0% Total Sysco Operating Leverage 1 4.8% 4.1% 4.5% 3.6% 3yr CAGR FY18 FY % 2.0% 2.0% 1.7% 2.5% 0.0% FY15 FY16 FY17 GP growth OPEX growth Maintain a healthy gap between gross profit dollar and operating expenses driving growth in adjusted operating income 1 See Non-GAAP reconciliations at the end of this presentation. FY17 excludes Brakes 1 See Non-GAAP reconciliations at the end of this presentation. FY17 excludes Brakes 114

115 WE HAVE A PROVEN TRACK RECORD OF CASH FLOW GENERATION $2,400 Annual Cash Flow 1 ($M) $1,800 $1,200 $600 $- FY15 FY16 FY17 Net cash provided by operating activities (GAAP) Free Cash Flow (Non-GAAP) and we expect to generate improved cash flows with a continued adjusted cash conversion ratio 2 greater than 100% over the next three years 1 See Non-GAAP reconciliations at the end of this presentation.; 2 Adjusted cash conversion ratio defined as adjusted free cash flow divided by adjusted net earnings 115

116 WE WILL FOLLOW A DISCIPLINED APPROACH TO CAPITAL ALLOCATION 1 Invest in the business Approximately 1.2% - 1.3% of sales 2 Grow the dividend Preferred payout ratio of 50-60% over time 3 Strategic M&A 4 Pay Down Debt / Opportunistic Share Repurchase 116

117 OUR STRONG BALANCE SHEET PROVIDES FLEXIBILITY Current Balance Sheet Solid investment-grade credit rating Substantial flexibility to pursue strategic transactions where appropriate Debt Ratings Moody s: A3 S&P: BBB+ 117

118 WE HAVE SUFFICIENT LEVELS OF DEBT CAPACITY FOR ACQUISITIONS and will continue to use a balanced approach around capital allocation while maintaining flexibility for future investments 118

119 CONTINUING TO FURTHER LEVERAGE STRONG MOMENTUM IN THE BUSINESS LEVERAGE STRONG MOMENTUM IN THE BUSINESS 1 Grow FY20 Operating Income by $650-$700M Continue to grow EPS faster than operating income Operating leverage gap of approximately 1.5 points Operating income margin of 5% Target 16% ROIC by the end of See Non-GAAP reconciliations at the end of this presentation. Our business is well positioned for future growth 119

120 TOM BENÉ PRESIDENT & COO / INCOMING CEO

121 OUR FOUR STRATEGIC PRIORITIES WILL ACCELERATE OUR CURRENT GROWTH & POSITION US WELL FOR THE FUTURE 121

122 Q&A

123 NON-GAAP RECONCILIATIONS

124 IMPACT OF CERTAIN ITEMS Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items and Brakes Sysco s results of operations for fiscal 2018 are impacted by restructuring costs consisting of (1) expenses associated with our revised business technology strategy announced in fiscal 2016, as a result of which we incurred costs to convert to a modernized version of our established platform, (2) professional fees related to our three-year strategic plan, (3) restructuring expenses within our Brakes Group operations, (4) severance charges related to restructuring and (5) business technology costs. Sysco s results of operations for fiscal 2017 are impacted by restructuring costs consisting of (1) expenses associated with our revised business technology strategy, as a result of which we recorded accelerated depreciation on our existing system and incurred costs to convert to a modernized version of our established platform, (2) professional fees related to our three-year strategic plan, (3) restructuring expenses within our Brakes Group operations, (4) severance charges related to restructuring, (5) facility closure costs, and (6) business technology transformation costs. Our results of operations are also impacted by the following acquisitionrelated items: (1) intangible amortization expense; (2) transaction costs; and (3) integration costs. All acquisition-related costs in fiscal 2018 and fiscal 2017 that have been excluded relate to the Brakes acquisition. Sysco's results of operations in fiscal 2017 are also impacted by multi-employer pension (MEPP) withdrawal charges. Fiscal 2016 and fiscal 2015 results of operations, however, include (1) expenses associated with our revised business technology strategy announced in fiscal 2016, as a result of which we recorded accelerated depreciation on our existing system and incurred costs to convert to a modernized version of our established platform, (2) professional fees related to our three-year strategic plan, (3) Brakes related acquisition costs, (4) termination costs in connection with the merger that had been proposed with US Foods, Inc. (US Foods), (5) severance charges related to restructuring, (6) facility closure costs, and (7) financing costs related to the Brakes acquisition and senior notes that were issued in fiscal 2015 to fund the proposed US Foods merger. These senior notes were redeemed in the first quarter of fiscal 2016, triggering a redemption loss of $86.5 million, and we incurred interest on these notes through the redemption date. Fiscal 2016 also includes losses on foreign currency remeasurement and hedging. The Brakes acquisition also resulted in non-recurring tax expense in fiscal 2017, primarily from non-deductible transaction costs. These fiscal 2018, fiscal 2017, fiscal 2016 and fiscal 2015 items are collectively referred to as "Certain Items. Management believes that adjusting its operating expenses, operating income, operating margin as a percentage of sales, interest expense, net earnings and diluted earnings per share to remove these Certain Items 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 facilitates comparisons on a year-over-year basis and (2) removes those items that are difficult to predict and are often unanticipated, and which as a result, are difficult to include in analysts' financial models and our investors' expectations with any degree of specificity. 124