Sysco Corporation (SYY) Barclays 17th Annual Global Consumer Staples Conference (Transcript)

Sysco Corporation Conference Call Summary Company Overview - Company: Sysco Corporation (NYSE: SYY) - Industry: Foodservice distribution - Revenue: $79 billion in fiscal 2024, with 62% from restaurants [4][21] - Customer Base: Serves 730,000 customer locations globally [4] Key Industry Insights - Total Addressable Market (TAM): $370 billion in the U.S., with an additional $100 billion from international operations, totaling $470 billion [6][7] - Market Share Growth: Sysco holds a 17% market share, with consistent growth in various regions, including: - U.S.: 170 basis points increase - Canada: 120 basis points increase - Ireland: 330 basis points increase - Great Britain: 260 basis points increase [9][10] Strategic Initiatives - Core Business Focus: 90% of Sysco's P&L is driven by core operations, with a focus on improving local independent sector performance and supply chain profitability [12][18] - Sales Strategy: Introduction of a new compensation model to incentivize performance, shifting from base pay to commission [15][17] - Headcount Growth: Added 450 new sales colleagues to improve territory management and customer engagement [13][14] Financial Performance - Operating Cash Flow: Generated over $3 billion in FY 2024, with a 70% conversion rate from EBITDA [25] - Growth Targets: Projected top-line sales growth of 4% to 6% and adjusted EPS growth of 6% to 8% for FY 2025 to FY 2027 [29] - Total Shareholder Return (TSR): Expected TSR of 9% to 11% per year [29] International Expansion - Opportunities in France: Identified as a significant growth market with a total addressable market of $23 billion, with plans to improve performance and market share [10][11] - Global Strategy: Sysco is replicating successful business models internationally, with mid- to high single-digit volume growth expected [48][50] Specialty Products Growth - Specialty Market Potential: Current sales of $9 billion with a target to reach $19 billion by increasing market share in various specialty sectors [51][53] - Collaboration Strategy: Implementing "Total Team Selling" to enhance cross-selling opportunities between broadline and specialty sales teams [54] Conclusion - Investment Proposition: Sysco is positioned as a leader in a growing industry with a robust balance sheet, strong cash flow, and a commitment to profitable growth, making it an attractive opportunity for various types of investors [33]