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Announcement of Periodic Review: Moody's announces completion of a periodic review of ratings of Sysco CorporationGlobal Credit Research - 26 Mar 2021New York, March 26, 2021 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Sysco Corporation and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on 24 March 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since 1 January 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion.This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.Key rating considerations are summarized below.Sysco Corporation's Baa1 senior unsecured rating benefits from the company's material scale and broad geographic reach across the US and an international presence. Its leading position in the fragmented US food distribution market and solid execution will continue to drive its above-average operating margins relative to the sector. Further, Moody's expects that the company's balance sheet and excellent liquidity will allow it to gain market share during the period of economic disruption caused by COVID-19, and earnings to improve toward pre-pandemic levels over the course of the next 3 years. The credit profile also incorporates balanced financial strategies, including a commitment to investment grade ratings. The company has stated that net leverage of mid- to high-2 times is appropriate for the business, and maintained leverage in that range prior to the pandemic. Revolver covenant limitations restrict share repurchases and dividend increases in FY 2021. Nevertheless, Moody's considers the potential risk that Sysco could prioritize M&A or the return of capital to shareholders prior to credit metrics returning to its historical leverage range.The credit profile is limited by Sysco's reliance on the independent restaurant, hospitality and foodservice management end markets, which comprise a significant portion of earnings and remain challenged. Given the fall resurgence in coronavirus cases in the US and renewed restrictions on indoor dining and travel in Europe, there is increased risk of an extended timeframe for earnings recovery. In addition, Sysco's long-term growth strategy continues to be dependent on future acquisitions, which could pose debt issuance, execution and integration risks.This document summarizes Moody's view as of the publication date and will not be updated until the next periodic review announcement, which will incorporate material changes in credit circumstances (if any) during the intervening period.The principal methodology used for this review was Distribution & Supply Chain Services Industry published in June 2018. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.This announcement applies only to EU rated, UK rated, EU endorsed and UK endorsed ratings. Non EU rated, non UK rated, non EU endorsed and non UK endorsed ratings may be referenced above to the extent necessary, if they are part of the same analytical unit.This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history. Raya Sokolyanska Vice President - Senior Analyst Corporate Finance Group Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Margaret Taylor Associate Managing Director Corporate Finance Group JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Releasing Office: Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 © 2021 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). 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