Sysco’s executive leaders presented 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 fiscal 2024.
At its 2021 Investor Day, President and CEO Kevin Hourican and other senior executives of Sysco Corporation presented a strategy update and highlighted initiatives to transform Sysco into a more growth-oriented, purpose-led, agile, innovative, and customer-focused company.
According to the company, through five strategic pillars, Sysco seeks to achieve its growth objectives:
- Digital – Enriching the customer experience through personalized digital tools.
- Products and Solutions – Offering customer-focused marketing and merchandising solutions to increase sales, introducing a 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 omnichannel inventory management.
- Customer Teams – Team-based selling leverages Sysco’s expertise in specialty categories, focusing 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 serve our customers better, 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 CEO.
Sysco unveiled its new Purpose statement dedicated to Connecting the World to Share Food and Care for One Another. The company stated that 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 goods to their 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 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.
- 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.