Targets FY24 adjusted EPS to be more than 30% above adjusted FY19 EPS • Commits to strong balance sheet by further reducing indebtedness by $1.5 billion in FY21 and FY22 • Declares 52nd consecutive dividend increase, of $0.02 per share • Announces acquisition of Italian Specialty business, Greco and Sons, in support of Recipe for Growth
At its 2021 Investor Day today, President and CEO Kevin Hourican and other senior executives of Sysco Corporation (NYSE: SYY) presented a strategy update and highlighted initiatives to transform Sysco into a more growth-oriented, purpose-led, agile, innovative and customer-focused company.
Sysco’s executive leaders discussed the company’s Recipe for Growth, which is designed to help the company grow 1.5 times faster than the market by the end of FY24 through five strategic pillars:
- Digital – Enriching the customer experience through personalized digital tools.
- Products and Solutions – Offering customer focused marketing and merchandising solutions to increase sales. Introducing cuisine focused go-to-market approach.
- Supply Chain – Serving customers efficiently and consistently with the products they need, when and how they need them. Improved delivery performance and omni-channel inventory management.
- Customer Teams – Team based selling that leverages Sysco’s expertise in specialty categories with a focus on important cuisine segments.
- Future Horizon – Cultivating new channels, segments and capabilities, while being responsible stewards of the company and the planet, and funding the investments through cost-out efforts.
“Today represents a pivotal moment, as we introduce our Recipe For Growth and our new purpose platform. We are creating new capabilities for Sysco that will enable us to better serve our customers, win share and increase customer loyalty. Our strategy will deliver compelling financial results and will establish a growth trajectory for the company that is fueled by our purpose,” said Kevin Hourican, Sysco’s president and chief executive officer. “Only Sysco has the leadership and financial strength to deliver upon all five elements of our Recipe For Growth, further differentiating Sysco and creating a sustainable competitive advantage.”
Sysco unveiled its new purpose statement dedicated to Connecting the World to Share Food and Care for One Another. Underpinning the company’s strategy, Sysco’s Purpose unifies its associates around the globe around a common goal that guides the company’s actions and the impact Sysco makes in the world every day. Demonstrating its commitment to this Purpose, Sysco announced its Global Good goal to donate $500 million worth of good in our global communities by 2025, through product donations, cash contributions and volunteer service.
Sysco also provided a comprehensive financial outlook for coming years including:
- Targeting $750 million in cost reduction for the period of FY21 through FY24, a $400 million increase;
- Guiding adjusted earnings per share in FY22 of $3.23 to $3.43;
- Targeting FY24 adjusted EPS to be more than 30% above adjusted FY19 EPS; and
- Establishing a net leverage target of 2.5x to 2.75x adjusted EBITDA, supported by plans to reduce indebtedness by at least another $1.5 billion in FY21 and FY22.
- Announcing a share repurchase authorization of $5 billion, to be available until fully utilized.
In addition, the company announced that its Board of Directors acted to increase its quarterly dividend through a $0.02 per share increase, to $0.47 per share, representing Sysco’s 52nd consecutive annual dividend increase. The increase will be paid as part of Sysco’s regular quarterly cash dividend, payable on July 23, to common stockholders of record at the close of business on July 2.
“Sysco’s strategy is built upon its commitment to a balanced capital allocation strategy – investing for growth, while preserving our strong balance sheet and investment grade rating and returning value to our shareholders,” said Aaron Alt, Sysco’s chief financial officer. “The combined actions we are announcing today position Sysco for long-term growth and success.”
A webcast of today’s presentations will be available for replay at http://investors.sysco.com/Investors/default.aspx
Sysco is the global leader in selling, marketing and distributing food products to restaurants, healthcare and educational facilities, lodging establishments and other customers who prepare meals away from home. Its family of products also includes equipment and supplies for the foodservice and hospitality industries. With more than 57,000 associates, the company operates 326 distribution facilities worldwide and serves more than 625,000 customer locations.