Pilgrim's Pride Corporation · NASDAQ:PPC
Pilgrim's Pride — Q4 2016 Earnings Presentation
25 slides from Pilgrim's Pride's earnings presentation, February 2017
Slide 1: Financial Results for Fourth Quarter and Year Ended Dec 25, 2016
Pilgrim’s Pride Corporation Financial Results for Fourth Quarter and Year Ended Dec 25, 2016
Slide 2: Cautionary Notes and Forward-Looking Statements
Cautionary Notes and Forward-Looking Statements Statements contained in this presentation that share our intentions, beliefs, expectations or predictions for the future, denoted by the words “anticipate,” “believe,” “estimate,” “should,” “expect,” “project,” “plan,” “imply,” “intend,” “foresee” and
Slide 3: Eggs Sets Average Marginally Up in 2016 from 2015
Eggs Sets Average Marginally Up in 2016 from 2015 215,000 United States, Selected 19 Poultry Chicken, broiler Sets 212,136.0 211,165.0 210,000 208,689.0 205,000 200,000 Thousand Egg 198,797.0 195,000 190,000 185,000 1/7 2/4 3/4 4/1 7/8 8/5 9/2 1/21 2/18 3/18 4/15 4/29 5/13 5/27 6/10 6/24 7/22 8/19 9
Slide 4: 2016 Placements In-line with Prior Year
2016 Placements In-line with Prior Year 179,000 United States, Selected 19 Poultry Chicken, broiler Placed 174,543.0 174,000 172,333.0 172,103.0 169,000 Thousand Head 164,000 162,419.0 159,000 154,000 1/7 2/4 3/4 4/1 7/8 8/5 9/2 1/21 2/18 3/18 4/15 4/29 5/13 5/27 6/10 6/24 7/22 8/19 9/16 9/30 12/9 1
Slide 5: Broiler Type Hatching Layers Down Slightly in 2016
Broiler Type Hatching Layers Down Slightly in 2016 5 Source: USDA
Slide 6: Jumbo Bird Share Remains Steady After Significant Increase Since 2011
Jumbo Bird Share Remains Steady After Significant Increase Since 2011 6 Source: USDA
Slide 7: Hatching Layers Lower vs 2015, Placements Flat
Hatching Layers Lower vs 2015, Placements Flat Hatching layers fell in Dec and remain lower than 2015 levels. Egg production is higher in Dec, while pullet placements are flat year on year, supportive of a modest production growth in 2017. 7 Source: USDA
Slide 8: Cold Storage Levels Lower Than 2015
Cold Storage Levels Lower Than 2015 Overall inventories 6% lower than 2015 levels. Leg Quarters continue to remain lower year on year driven by strong exports. 8 Source: USDA
Slide 9: Cutout Values Ended Year Higher vs 2015
Cutout Values Ended Year Higher vs 2015 Cutout Value 9 Source: PPC
Slide 10: Leg Quarters Improved vs 2015, Other Parts In-line with Normal Seasonality
Leg Quarters Improved vs 2015, Other Parts In-line with Normal Seasonality 10 Source: USDA
Slide 11: High Correlation of GA Dock and EMI Small Bird Value
High Correlation of GA Dock and EMI Small Bird Value 120.00 115.00 110.00 105.00 100.00 Cents/Lb 95.00 90.00 85.00 80.00 75.00 70.00 EMI 2.5 - 3 LB. Wog and 8&9 Piece Value GA Wed.Dock 11 Source: GA Department of Agriculture and EMI
Slide 12: Corn Stocks at Record High Levels
Corn Stocks at Record High Levels Global stocks continue to stay at record high levels. 2016 stocks-to-use global inventories have backed off slightly compared to historically high in 2015 but still elevated. 12 Source: USDA
Slide 13: Global Soybean Inventories Grow
Global Soybean Inventories Grow Global inventories of soybeans remain high and at record high levels, surpassing 2014 previous highs. Demand for oilseed products estimated to grow to finish out 2016. 13 Source: USDA
Slide 14: Fiscal Year 2016 Financial Review
Fiscal Year 2016 Financial Review Mix changes and new strategic capital Main Indicators ($M) FY-16 FY-15 investment projects raised overall costs and impacted near-term profitability but will Net Revenue 7,931.1 8,180.1 translate into more consistent, higher margin, less commoditized portfolio, and
Slide 15: Fourth Quarter 2016 Financial Review
Fourth Quarter 2016 Financial Review Solid Q4 results in Fresh, case-ready and small Main Indicators ($M) Q4-16 Q4-15 birds outperformed; MX performed well but was impacted by a stronger than expected $, Net Revenue 1,908.2 1,960.8 synergy capture $10MM above expectations. Gross Profit 180.5 160.7 S
Slide 16: Balance Sheet Strong, With Plenty of Room for Strategic Investments
Balance Sheet Strong, With Plenty of Room for Strategic Investments 307.1 307.1 Cash Flow From Operations generation of $224MM in the quarter. Net debt multiple remains low at 0.99x LTM EBITDA, well below target of 2-3x. 16 Source: PPC
Slide 17: Fourth Quarter 2016 Capital Spending
Fourth Quarter 2016 Capital Spending Capex (US$M) Strong Free Cash Flow generation has enabled us to direct more capital spending towards identified projects with rapid payback and structural projects. New strategic projects will support key customers growth and de-emphasize our exposure to commodit
Slide 18: Investor Relations Contact
Investor Relations Contact Investor Relations: Dunham Winoto Director, Investor Relations E-mail: [email protected] Address: 1770 Promontory Circle Greeley, CO 80634 USA Website: www.pilgrims.com 18
Slide 19: Appendix: EBITDA Reconciliation
Appendix: EBITDA Reconciliation “EBITDA” is defined as the sum of net income (loss) plus interest, taxes, depreciation and amortization. “Adjusted EBITDA” is calculated by adding to EBITDA certain items of expense and deducting from EBITDA certain items of income that we believe are not indicative o
Slide 20: Appendix: Reconciliation of LTM EBITDA
Appendix: Reconciliation of LTM EBITDA The summary unaudited consolidated income statement data for the twelve months ended December 25, 2016 (the LTM Period) have been calculated by summing each of the unaudited thirteen week periods within the audited fifty-two week period ended December 25, 2016.
Slide 21: Appendix: EBITDA Margin Reconciliation
Appendix: EBITDA Margin Reconciliation EBITDA margins have been calculated by taking the relevant unaudited EBITDA figures, then dividing by Net Revenue for the applicable period. PILGRIM'S PRIDE CORPORATION Reconciliation of EBITDA Margin (Unaudited) Thirteen Weeks Ended Fifty-Two Weeks Ended Thirt
Slide 22: Appendix: Reconciliation of Adjusted Earnings
Appendix: Reconciliation of Adjusted Earnings A reconciliation of net income (loss) attributable to Pilgrim's Pride Corporation per common diluted share to adjusted net income (loss) attributable to Pilgrim's Pride Corporation per common diluted share is as follows: PILGRIM'S PRIDE CORPORATION Recon
Slide 23: Appendix: Adjusted EPS Bridge
Appendix: Adjusted EPS Bridge A reconciliation of GAAP earnings per share (EPS) to adjusted earnings per share (EPS) is as follows: PILGRIM'S PRIDE CORPORATION Reconciliation of GAAP EPS to Adjusted EPS (Unaudited) Thirteen Weeks Ended Fifty-Two Weeks Ended December 25, 2016 December 27, 2015 Decemb
Slide 24: Appendix: Net Debt / Cash Position Reconciliation
Appendix: Net Debt / Cash Position Reconciliation Net debt is defined as total long term debt less current maturities, plus current maturities of long term debt and notes payable, minus cash, cash equivalents and investments in available-for-sale securities. Net debt is presented because it is used
Slide 25: Appendix: Segment and Geographic Data
Appendix: Segment and Geographic Data PILGRIM'S PRIDE CORPORATION Supplementary Selected Segment and Geographic Data Thirteen Weeks Ended Fifty-Two Weeks Ended December 25, 2016 December 27, 2015 December 25, 2016 December 27, 2015 (Unaudited) (In thousands) Sources of net sales by country of origin