US Foods Inc.

Overview Key strengths Key risks Second-largest food distributor in the U.S. Intense competition, with low industry profit margins and customer use of multiple distributors. Substantial scale and customer diversity. Exposure to food, labor, and fuel cost volatility. Publicly committed company-defined net leverage target of 2.5x-3x. Workers? strikes on an ongoing basis or increased severity across geographies. Positive projected free operating cash flow. Increase in leverage due to large debt-funded acquisitions. We expect demand for US Foods? services to continue to recover from the lows experienced during the bleakest periods of the pandemic, led primarily by its independent restaurants business while the hospitality and healthcare businesses are still operating well below pre-pandemic levels. Despite the impact of omicron, in its quarter

...US Foods' profitability and credit metrics should continue to strengthen as coronavirus-related restrictions ease and social activity normalizes, notwithstanding supply chain challenges, input cost inflation, and recession risk. We expect demand for US Foods' services to continue to recover from the lows experienced during the bleakest periods of the pandemic, led primarily by its independent restaurants business while the hospitality and healthcare businesses are still operating well below pre-pandemic levels. Despite the impact of omicron, in its quarter ended April 2, 2022, the company reported a 24% year-over-year growth in its top...

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