Sysco 2013 Annual Report Download - page 4

In the world of food, the keys to a chef’s successful recipe are a solid plan, a careful
approach and great ingredients. At Sysco we take great pride in our ingredients, striving
to provide the freshest, highest quality fare in the business. We are committed to
cultivating the freshest ideas and most innovative holistic restaurant solutions that
will assure that every moment around food is memorable. We believe that a successful
business recipe starts with our mission: to market and deliver great products to our
customers with exceptional service. It is reinforced by our vision: to be our customers’
most valued and trusted business partner. And, Sysco’s five-point strategy provides key
ingredients which focus on a balanced blend of Partnerships, Productivity, Products,
Expansion and People.
Fiscal year  at Sysco produced numerous successes. Our more than , associates
continued to demonstrate their commitment to Sysco’s , customers. During the
year, we registered a record . billion in revenues, a . percent increase compared to
fiscal year . Our gross profit of . billion was a . percent year-over-year increase,
while our earnings per share for our underlying business of . were essentially flat
compared to a year ago. Our return on invested capital was  percent, our cash flow from
operations increased . percent to . billion, and our free cash flow increased  percent
to  billion. We also returned nearly  million in dividends to shareholders and
increased our dividend for the th time in our -year history.
The challenges were also significant in a year that saw market conditions initially
improve and then fall o in the latter part of the fiscal year. A generally slow and uneven
economic recovery led to weak restaurant trac, which hindered many of our customers’
businesses. Gross profits at Sysco, while increasing modestly for the year, were impeded
by the competitive nature of our industry and a shift in customer mix which created
pressure on operating earnings. As we continue to drive out transformational change
in our company, Sysco’s business fundamentals – the ingredients for our success –
remain sound. In fiscal year , we made substantial progress executing our long-
term strategy in the following ways.
INGREDIENT 1: PARTNERSHIPS
PROFOUNDLY ENRICHING THE EXPERIENCE OF DOING BUSINESS WITH SYSCO
We experienced success in further deepening relationships with our customers and
suppliers. One favorable example was our  percent increase in sales to Broadline
corporate-managed customers, which helped us oset a year in which sales to locally
managed customers were under pressure. Another highlight was the launch of our
category management initiative which provides a significant opportunity to generate
value through the optimal assortment, sourcing and pricing of products. Our category
management approach also fosters deep partnerships with our suppliers, including
shared customer insights which we believe will lead to enhanced product innovation and
response to customer trends, and provide the foundation for growth in the years ahead.
INGREDIENT 2: PRODUCTIVITY
CONTINUOUSLY IMPROVING PRODUCTIVITY IN ALL AREAS OF THE BUSINESS
We expanded the deployment of our SAP enterprise resource platform to East Texas,
North Texas and West Texas, with more rollouts scheduled to take place in fiscal year
. We also completed the rollout of our maintenance module across the majority
ofour U.S.and Canada business. The implementation of the SAP module for human
resources and the centralization of U.S. Broadline general ledger functions will be com-
pleted in the first half of fiscal year , and we will continue to implement technology
enhancements to our delivery routing system over the next two years. In addition, we
reduced costs by adjusting our retirement plans, implementing a customer relationship
management (CRM) platform, flattening our sales organization structure, modifying
oursalespeople’s compensation plans to incentivize growth and reducing the number
ofunprofitable sales territories.
TM
TO OUR
SHAREHOLDERS,
We deliver ingredients for success. // 2013 Annual Report
2
HIGHLIGHTS
OPERATIONS
• Grew case volume for Broadline and SYGMA
operations combined by .
• Completed fourteen acquisitions representing
more than  billion in annual sales
• Advanced our category management initiative
with four pilot categories – salad dressing/
mayonnaise, frozen french fries, towels/tissues/
napkins, and shrimp
• Completed the rollout of the SAP Maintenance
module to all U.S. Broadline locations, and
the Customer Relationship Management (CRM)
platform to all North American Broadline
operating companies
FINANCIAL
• Recorded net earnings of  million
• Grew free cash flow by more than  to
 billion
• Returned nearly  million in dividends
toshareholders while increasing the dividend
for the th time in our -year history
SUSTAINABILITY
• Generated energy savings of  in our
warehouses in fiscal year  and more
than  since fiscal year 
• Continued to incorporate new food safety
practices to lead the industry
• Expanded our capabilities to provide locally
sourced products to our customers