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Announcement of Periodic Review: Moody's announces completion of a periodic review of ratings of Sysco CorporationGlobal Credit Research - 17 Feb 2022New York, February 17, 2022 -- 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 14 February 2022 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 reflects the company's large scale, broad geographic reach across the US and an international presence. Moody's expects Sysco's leading position in the fragmented US food distribution market and solid execution will continue to drive above-average operating margins relative to the sector. Further, the company's balance sheet and excellent liquidity should enable continued market share gains, including during the current period of supply chain and labor challenges. The credit profile also incorporates governance considerations, specifically Sysco's balanced financial strategy, which includes a commitment to investment grade ratings and a 2.5x-2.75x net leverage ratio. The company has brought debt levels down significantly from the pandemic peak, however it has also returned to M&A and is resuming share repurchases before reaching its target leverage. The credit profile is limited by Sysco's credit metrics, which have not yet recovered to its target range. While demand from its key restaurant customer base has recovered and the company reports gaining significant market share, the hospitality and foodservice management end markets are lagging. In addition, Sysco's long-term growth strategy continues to incorporate 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 © 2022 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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