Pilgrim's Pride Corporation · NASDAQ:PPC
Pilgrim's Pride — Investor Presentation (March 2006)
51 slides from Pilgrim's Pride's investor presentation, Mar 10, 2006
Slide 1: Pilgrim's Pride Corporation
Piigrim's Pride Corporation Outstanding Customer Satisfaction...Every Day. NYSE - traded under PPC 66.5 million shares outstanding Market capitalization ~ $1.5 billion ef eae es | Retum since 11/24/03 PPG -52.2% S&P -21.6% 0 LTM Ending 12/31/05 = Sales - $5.7 billion y — Netincome -$242.1 million ca
Slide 2: Proven Performance, Poised for Growth
Pilgrim’s Pride Corporation Proven Performance, Poised for Growth March 13-14%, 2006 Investor Presentation 0.B. Goolsby, Jr. President, Chief Executive Officer
Slide 3: Management Representatives
Management Representatives Clint Rivers Chief Operating Officer Kathy Costner Vice President, Investor Relations
Slide 4: Safe-Harbor Statement
Safe-Harbor Statement Staternents contained in this presentation that state the intentions, hopes, beliefs, anticinations, expectations or predictions of the future of Pilarim's Pride Corporation and its management, are forward-looking ‘statements. It is, Important to note that the actual results co
Slide 5: Aubrey Pilgrim 1950's
Aubrey Pilgrim 1950's
Slide 6: ... The Story Continues Today
... The Story Continues Today Second largest chicken producer in US and Mexico Market capitalization ~ $1.5 billion Record net income of $265 million, or $3.98 per share, in FY2005 uC i Ce aap elet to foodservice and retail industry leaders epplOx 45% of LTM 12/31/05 US. chicken sales are higher mar
Slide 7: Proven Performance, Poised for Growth
Proven Performance, Poised for Growth m= Capable management team — Business strategy — Clarity of vision (e.g. strategic goals) = Capital structure — Strong balance sheet e NYSE listed (66.5 million shares) e Growth oriented and value-added stock m Vertically integrated — Largest pure play company i
Slide 8: Solid Leadership Position
Solid Leadership Position U.S. Chicken Market Share 2005 RTC 2005 RTC Pounds* Market Share (%) Tyson Foods, Inc. i 150.0 21.6 Pilgrim's Pride a 113.0 163 Gold Kist, Inc. [EET 62.4 90 Perdue Farms, Inc. GEGGG=|40.4 58 Sanderson Farms, Inc. [30.4 44 Wayne Farms, Inc. [=== 30.4 44 Mountaire Farms. Inc.
Slide 9: Sales by Division
Sales by Division Si U.S. Chicken Sales U.S. Chicken Other US Fresh Chicken Other Mexico Total Sales LTM 12/3105: Total Sales LTM 12/3105: $5,666.3 mm $4,411.3mm
Slide 10: Pilgrim's Pride Product Portfolio
Pilgrim’s Pride Product Portfolio PIERCE remexen ee. es) Fain Stir
Slide 11: Powerful Earnings Growth Strategy
Powerful Earnings Growth Strategy = Driving growth in value added Prepared Foods — Well positioned to capitalize on favorable consumption trends — Aleading supplier to quick service restaurants — Expanding presence in broadline food service distribution = Adding new accounts through expanded nationa
Slide 12: Transformations Achieved Over Last Three Years
Transformations Achieved Over Last Three Years = Strengthened competitive position — Reinforced fast-growing, higher-margin product mix - Significantly increased size and scale - Enhanced technological leadership and cost-efficiencies m= Expanded and enhanced brand portfolio - Pierce®, Country Pride
Slide 13: Expanded North American Footprint
Expanded North American Footprint
Slide 14: How We Do It
How We Do It ) = Strategic Synergy Teams — Joint transition team of senior executives e Production e Sales and marketing e Supply chain / purchasing — Function specific sub- teams e Human resources e Finance e Information technology = $125 million of annualized synergies realized in FY2005 = All ope
Slide 15: Outpacing Industry Growth
Outpacing Industry Growth 30.0% 1 Year 5 Years 10 Years 3 5 260% é ¥ 200% 3 9 2 15.0% = Hy 2 10.0% = = 35% E sox | 29% ; 2 ox L I 2005 2000-2005 1995-2005 U.S. Chicken Industry H Pilgrim's Pride Pilgrim's Pride's successful business strategy has enabled it to dramatically outperform average industry
Slide 16: Net Sales & Shareholder Equity Continue Upward Trend
Million $ 6000 5000 4000 3000 2000 Net Sales & Shareholder Equity Continue Upward Trend Compounded Annual Growth Rates Historical Thru FY2003 Thru FY2005 Sales 144% 16.8% Equity 19.0% 22.3% PEF PFSFESE SFI FE SII LO SG Taet Sales == Bocihotders faulty
Slide 17: Strong Gross Margin Percentage of Sales
Strong Gross Margin Percentage of Sales Fiseal Years Ended 200 oot 2m ote amma ams Lr reins
Slide 18: Operating Income
Operating Income Fiseal Years Ended (Bin mitions) 0 0 0 a0 a0 20 80 80 = ous ens a 0 a9 0 r 2000 2001 "a «00 L280
Slide 19: ant ote ote Ln 2608
200 ant ote ote 200 206 Ln 2608
Slide 20: Strong Balance Sheet
Strong Balance Sheet (Bin milions) $2,400 $2,246 $1,600 $1,200 $800 54 $630 $400 $0 2008 2005 10 FYO6 WAsses eShort-TermLiabiliies mLong-TermLiabiliies Equity
Slide 21: Working Capital
Working Capital Fiseal Years Ended (Bin mitions) sa $405 400 ppaad $372 sasz 350 300 250 $211 2000 2001 002 2003 2o0a zs = 142005 19,2006
Slide 22: Robust Stock Performance Has Driven Strong Shareholder Returns
Robust Stock Performance Has Driven Strong Shareholder Returns a * Tags Coan oft hy or cies Aura Cum ae } 7 Gi ccmecancapes A ‘Tine 8, 2003 GAG Chicken’ Division Arquisition ‘Announced, = 6 ‘1217004 - 10 Million Shores | Hovernber 24, 2003 ConAgra Chicken Division Azquiition & Stock Combination Comp
Slide 23: Worldwide Exports
ee & Worldwide Exports Represents top ten countries PPC exports leg quarters to by volume
Slide 24: Recent Developments in Export Market
Recent Developments in Export Market = Export shipments — December export volumes 31% below prior year — Expected to be flat in March and up 4% for 2006 = Cold storage as of January 2006 — Total chicken up 46% vs. January 2005 — Total chicken up 2% vs. December 2005 — Leg quarters up 217% vs. Januar
Slide 25: % broiler volume exported
20 % broiler volume exported o- Ge FEEL EL IEP IEE EELS gf Export expansion complements U.S. business, provides strong market for dark meat and assists in stabilizing market pricing Souroe: February 16, 2006 Abana! Chicken Counc
Slide 26: US Chicken Consumption Outpacing Other Proteins
US Chicken Consumption Outpacing Other Proteins Per Capita Consumption (in Pounds) 19 «19831985 19891992, 1995 1998 2001 = Chicken — Turkey — Pork — Beef Source: Febuary 17, 2008 USEHMBtonal Chicken Courel 2004 2007E
Slide 27: Mexico Strategy
Mexico Strategy Capitalize on significant growth opportunities through continued emphasis on: = Being a low-cost producer = Consolidating Marketplace — Since 1983, PPC market share has increased from 11% to 13% = Strengthening presence in center of country = Expanding distribution beyond our current
Slide 28: Increasing Consumption in Mexico
Increasing Consumption in Mexico Mexico Per Capita Consumption (n Pounds) ; ast es
Slide 29: Putting Our People First
Putting Our People First Living by the Golden Rule m We create an environment where people are treated well and feel they are vested in our process = We invest more in training and improving our people than anyone else in the industry — Reimburse continuing education for all partners m= Open door co
Slide 30: Proven Performance, Poised for Growth
Pilgrim’s Pride Corporation Proven Performance, Poised for Growth Clint Rivers Chief Operating Officer
Slide 31: Diversified Product Offering
Diversified Product Offering PILGRIM’S PRIDE Prepared Foods Value added, further processed chicken produet, Primarily seldte foodservice ustomers 45% of US Chicken Sales 34% of Total Sales Fresh Chicken Non frozen chicken sold primariyin pats to retail and foodservice customers 49% of US Chicken Sal
Slide 32: Key Operating Goals
"Key Operating Goals Focus on value-added prepared foods that deliver : , higher margins and mitigate impact of volatile | sustainable growth eornimaa tet ices Driving Aggressive logistics management, raw material sourcing and increased production capacity Continually evaluating strategic opportunit
Slide 33: Driving Sustainable Growth
Driving Sustainable Growth m= Made major consolidating acquisitions in January 2001 and November 2003 — Acquired what were seventh largest poultry and fourth largest chicken companies, respectively, at time of transactions = Acquisition of non-integrated prepared foods operations — Waco, TX plant, 1
Slide 34: Poultry Processing Facilities Key Producing States
Poultry Processing Facilities 1 Key Producing States \
Slide 35: Prepared Foods Plants Drive Company Performance
Prepared Foods Plants Drive Company Performance © 9 Prepared Foods ‘Acquired in October of 2006: 41 Prepared Foods
Slide 36: North American Distribution Centers
oy North American Distribution Centers
Slide 37: Prepared Foods Growth and Focus Is Our Competitive Differentiator
Prepared Foods Growth and Focus is Our Competitive Differentiator CAGR 1999-2003 12.6% 1999-2005 22.8% supa suina sma serra $1306.3 1988 2000 2101 MMM Foodservice MMI Retail 2004
Slide 38: Prepared Foods Chicken Product Mix
(MM of 750 700 650 600 550 500 450 400 350 300 250 200 150 100 50 Prepared Foods Chicken Product Mix Focused on Highest-Value Products Ibs.) maa CAGR 1999-2003 15.4% 1999-2005 21.7% & ar 03 maz zs mu aaa hen 154 tay aa a bad ot = J s e e = 1908 2000 2001 2002 2003 2004 2005 i Fully Cooked, Breaded’M
Slide 39: Prudent Management of Capital Expenditures
Prudent Management of Capital Expenditures Fiseal Years Ended ME Maintenance‘Other MMMM ExpansiorEfficiency Gin milions) = 160 $1359 140 Peer gus $1166 120 —Fz —= $92.1 $299 100 TT $004 $796 en oo [so | —sz o 60 40 20 0 2000 2m 2002 2008 2004 2005 UTM 120408 The Company projects FY 2006 capital expe
Slide 40: Driving Operational Excellence
Driving Operational Excellence: m FY 2006 Projects - Continue to invest in existing operating facilities to improve productivity and yield increase El Dorado, AR Bossier City, LA Mayfield, KY « Marshville, NC - Driving variable costs lower by optimizing product throughput - High speed rail unloading
Slide 41: Delivering Shareholder Value
Delivering Shareholder Value = Operational performance has generated strong financial results = Organic growth over the past five years has averaged 6.0% annually = Continued focus on value-added products — Drives higher margin growth — Diminishes impact of down swings in commodity cycle — Increases
Slide 42: Significantly Enhanced US Footprint
Significantly Enhanced US Footprint Improved distribution capab ies = Well-established relationships with broadline national distributors = Direct distribution channels to retail, restaurant and foodservice customers nationwide = One-stop source for broad range of standard and specialty chicken prod
Slide 43: Leading Through Innovation
Leading Through Innovation Technological Advancements = Information Technology — Utilize SAP for information infrastructure Manufacturing data Accounting data m= Production Technology - TSM - Breast Fillet Portioning Equipment Provides improved length and width consistency vs. hand portioned fillets
Slide 44: Our Unique Culture Breeds Success
Our Unique Culture Breeds Success = Guiding management philosophy and the way we choose to do business. Cl is based on three cornerstones — Quality — Process Improvement — Teamwork m= Empowers partners to identify, quantify and eliminate waste by examining each and every one of their processes on a
Slide 45: Maintaining Our Leadership in a Consolidating Industry
45 Maintaining Our Leadership in a Consolidating Industry Well-positioned as #2 producer in industry A leading supplier of quick-service restaurants Growing presence in broadline distribution Strong position in retail Disciplined approach to strategic acquisition opportunities
Slide 46: Pilgrim's Pride Corporation
Piigrim's Pride Corporation Outstanding Customer Satisfaction...Every Day.
Slide 47: Appendix
Appendix Pilgrim's Pride Corporation - Reconciliation of Non-GAAP Measures and Other Computations
Slide 48: Appendix A
Appendix A Summary Credit Ratios and Other Information EBITDA Reconciliation of FY2005 and LTM Periods EBITDA Lie Lie FY2005 Ending 1405 Ending 122105 Net hoome mag 8 tessa 22.48 Aa: Iheome Tax Expense 18.544 103,273 ater terest expense, net ct 51/300 40.186 Depreciation and amerizaton raat 178 cers
Slide 49: Appendix B
Appendix B Reconciliation - Adjusted LTM EBITDA zazo0s 302005 © 4q2005 142006 L™ Actual Acal_ —_Actual_—_Actual_ Ending 12131205 Net Income $56,389 § 85,353 § 74,728 § 25678 § 242,148 Add: Incame Tax Expense (benefit) 34,204 38,324 34,618 10,023 117,187 Interest expense, net 9318 12.322 10,068 8448
Slide 50: Appendix C
Appendix C Reconciliation - Adjusted FY2005 EBITDA a2005 202005 © sqz005. | 4q2005 © FYY2005 Actual _Actual_ _Actual_ _Actual Actual Net Income $48508 $96,389 $85,953 $74,729 $ 264,980 Add: Income Tax Expense (beneft) 31400 34,204 38,924 34,618 «= 138,644 Interest expense, net 12,224 9318 12,822 10,
Slide 51: Appendix D
Appendix D Reconciliation - Adjusted LTM EBITDA q2004 «302004 © 42004 «102005 L™ Actual Actual Actual «Actual Ending 1/15 Net Income. $92951 $ 9814 § 75,290 $ 48509 $ 166,564 Add: Income Tax Expense (oeneft) 13,694 12,288 «46,016 31,400 103,278 Interest expense, net 13,624 14,090 14,471 12,224 51,90