2021-09-29-瑞士信贷集团-食品分销商_复苏之路_21页_660kb

Food Distributors Industry Recovery Summary

Core Content

The foodservice industry experienced a significant decline in 2020, with total sales (excluding alcohol) dropping by 25–30% to ~$231BN, down from ~$310BN in 2019. However, the industry is expected to recover, with real growth of ~23% in 2021 and ~10.5% in 2022, fully recovering and exceeding pre-pandemic levels by 2022. The recovery is uneven across channels, with restaurants showing strong resilience, retail and healthcare performing well, and travel & leisure lagging behind.

Main Views

Industry Recovery Outlook

• Restaurants: Expected to recapture ~98% of 2019 sales in 2021 and ~4.5% growth over 2019 levels in 2022, with ~9.5% fewer locations. Independent restaurants have been disproportionately affected, while large chains have shown better resilience.
• Retail: Strong performance with ~20.5% growth in 2021 and full recovery in 2022. Supermarkets and convenience stores are key contributors.
• Healthcare: Demonstrated resilience, with ~7.5% growth in 2021 and expected to recover to ~97% of 2019 sales in 2022.
• Travel & Leisure: Among the slowest to recover, down ~60% in 2020, with ~48% growth in 2021 and ~84% recovery in 2022. It is expected to return to ~$100BN+ by 2023.
• Overall Growth: After ~92% real growth in 2021–2022, the industry is projected to grow at 2.3–3.4% annually from 2023–2025, which is ~1.5–2x the pre-COVID growth rate.

Market Share Trends

• The three largest distributors (Sysco (SYY), US Foods (USFD), and Performance Food Group (PFGC)) gained ~650 bps of market share in 2020, outperforming the broader industry.
• SYY gained ~70 bps, USFD ~160 bps (with ~130 bps from acquisitions), and PFGC ~420 bps (with ~300 bps from acquisitions).
• These companies are well-positioned to continue capturing market share due to their scale, capital, agility, and consistency in operations.

M&A Activity

• PFGC acquired Core-Mark in early September 2021, adding ~$17BN in sales.
• SYY acquired Greco and Sons in August 2021, adding ~$800MM in annual revenue.
• USFD acquired Smart Foodservice Warehouse Stores in April 2020, rebranding it as US Foods Chef'Store in March 2021.
• These acquisitions have strengthened their market positions and contributed to growth.

Key Information

Near-Term Considerations

• Sales trends were choppy in Q3, with July up 1.1% and August down 1.9% vs 2019 levels.
• Delta variant and Back to School behavior may have impacted some distributors, with PFGC & USFD showing slight softness in mid-August.
• Inflation remains elevated, but SYY noted an increase in applicant flow following the end of enhanced unemployment benefits, indicating a potential easing of the labor environment.

Estimate Changes

• SYY: Trimmed FY22 EPS to $3.82 (from $3.96) and FY23 EPS to $5.01 (from $5.10) due to slightly higher opex costs.
• PFGC: Raised FY22 EBITDA to $909MM (from $897MM), but trimmed FY23 EBITDA to $1,154MM (from $1,169MM), due to higher sales offset by higher opex costs.
• USFD: No changes to estimates.

Company-Specific Highlights

• Sysco (SYY):
  • Target price $97.00, based on ~12.5x–19.5x NTM EBITDA/EPS.
  • Guided to FY22 EPS of $3.33–$3.53, with ~26.2% sales growth expected in FY22.
  • Aims to grow market share at 1.2x the industry rate in FY22 and 1.5x by FY24.
• US Foods (USFD):
  • Expected to maintain and gain market share.
  • Acquisitions contributed significantly to growth.
• Performance Food Group (PFGC):
  • Gained ~420 bps in market share in 2020.
  • Completed the acquisition of Core-Mark, enhancing its retail exposure.

Financial Metrics

Valuation Scenarios

• Blue Sky Scenario: Target price $120.00, based on ~14x NTM EBITDA (5% above base case), assuming accelerated recovery and cost savings.
• Grey Sky Scenario: Target price $71.00, based on ~11x NTM EBITDA (15% below base case), assuming slower recovery in independent restaurants and outsized closures.

Conclusion

The foodservice industry is on a path to recovery, with restaurants, retail, and healthcare leading the way. The three largest distributors—Sysco, US Foods, and Performance Food Group—are well-positioned to capture market share due to their scale, agility, and operational consistency. While near-term challenges remain, medium to long-term growth is expected, with SYY showing the strongest growth potential and PFGC benefiting from recent acquisitions.