Sysco Reveals Strategy, Recipe for Growth, and Introduces Purpose-Driven Framework
HOUSTON, TX - Recognized throughout the industry for its distribution prowess, Sysco has unveiled a robust new strategy that poises the company for increased growth over the next few years. Announced at the distributor’s 2021 Investor Day on May 20, the strategy update highlighted new initiatives set to transform Sysco, helping the company grow 1.5 times faster than the market by the end of the 2024 fiscal year and gain access to over $2 billion in cost and debt reduction.
“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, President and Chief Executive Officer at the Investor Day presentation. “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.”
To help drive its new strategy forward, Sysco unveiled a new Purpose statement dedicated to Connecting the World to Share Food and Care for One Another, according to a press release. Sysco’s Purpose will unify its associates around the world through a common goal that guides the company’s actions and its impacts.
Demonstrating its commitment to this Purpose, Sysco also announed its Global Good goal to donate $500 million worth of good in its global communities by 2025. This includes product donations, cash distributions, and volunteer service.
In addition, Sysco revealed five strategic pillars that will make up the company’s Recipe for Growth. They include:
- 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
The presentation also provided a comprehensive financial outlook for Sysco’s coming years. This includes targeting $750 million in cost reduction for the period of the 2021 financial year through the 2024 financial year, a $400 million increase.
Additionally, the company included:
- Guiding adjusted earnings per share in FY22 of $3.23 to $3.43
- Targeting FY24 adjusted EPS to be more than 30 percent above adjusted FY19 EPS
- 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
“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, Chief Financial Officer. “The combined actions we are announcing today position Sysco for long-term growth and success.”
How will this new strategy play out for Sysco as it takes on new growth? Keep a tab open for AndNowUKnow for the answers.