Tyson Foods, Inc. · NYSE:TSN
Tyson Foods — Investor Day (December 2021)
120 slides from Tyson Foods's investor day presentation, Dec 9, 2021
Slide 1: Investor Day
Investor Day December 9, 2021
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain information in this presentation constitutes forward-looking statements as contemplated by the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, current views and estimates of our outlook for fiscal 2
Slide 3: Agenda
John H. Tyson Donnie King David Bray Noelle O’Mara Chairman of the Board President & CEO Group President, Poultry Group President, Prepared Foods 5 M inutes 15 M inutes 15 M inutes 15 M inutes Break 5 Minutes Agenda — Shane Miller Chris Langholz John R. Tyson Stewart Glendinning Group President, Gro
Slide 4: John H. Tyson
John H. Tyson Chairman of the Board 4
Slide 5: Our company performance is rooted in our core values
Our company performance is rooted in our core values Who We Are We are a company of people engaged in the production of food, seeking to pursue truth and integrity, and committed to creating value for our shareholders, our customers, our team members, and our communities. • We strive to be a company
Slide 6: Donnie King
Donnie King President & Chief Executive Officer 6
Slide 7: Tyson Foods: outpacing a growing, global protein market
Tyson Foods: outpacing a growing, global protein market — 1 Recognized leader in an attractive, dynamic market 2 Diversified not only across proteins, but also across mix 3 Expanding, innovating, and investing in fast-growth markets including Asia 4 Initiatives underway to meaningfully expand our op
Slide 8: Global protein consumption is expected to grow over the next decade
Global protein consumption is expected to grow over the next decade Population growth Gross domestic product Continued population growth in the United (United States) +1% States +2.5% Elevated GDP growth of 3.5% forecast for World population expected to expand by 2022 over 750 million people in the
Slide 9: Tyson Foods is a leading protein company with diverse capabilities
Tyson Foods is a leading protein company with diverse capabilities, meaningful scale, and respected brands ICONIC $47.0B $4.3B ~137,000 2021 Sales 2021 Adj Operating Income1 Team Members 11,000+ Independent Farms Supply Us With 140 20% of the Beef, Pork, & Chicken Produced in Countries Where Product
Slide 10: We have a balanced portfolio that is growing to meet demand
We have a balanced portfolio that is growing to meet demand Sales By Segment1 Sales By Segment1 FY2016 FY2021 International/Other 1% 11% Pork International/Other 4% 11% Pork 20% 19% Prepared Prepared Foods Foods Beef Beef 38% $36.9 $47.0 37% billion billion 30% Chicken 29% Chicken 1 Excluding Inters
Slide 11: Broad channel access differentiates our business
Broad channel access differentiates our business Key segments Key segments 47%1 Prepared Foods 59% 29%1 Chicken 41% Beef 50% Foodservice Prepared Foods 37% Retail Chicken 44% Beef 25% Pork 36% Pork 10% Key segments Key segments Pork 23% 14%1 Beef 15% 10%1 Pork 31% International Industrial/ Chicken 9
Slide 12: World-class, experienced leadership team focused on value creation
World-class, experienced leadership team focused on value creation Donnie King President & Chief Executive Officer Joined Tyson in 1982 David Bray Stewart Glendinning Chris Langholz Sandy Luckcuck Group President, Poultry EVP & Chief Financial Officer Group President, International President, McDona
Slide 13: Strengthening our position as a recognized global protein leader
Strengthening our position as a recognized global protein leader Our Priorities 1 Transforming our team member experience, starting with health, safety, and wellness Win with customers and consumers Win with team members 2 Outpacing the market by enhancing our portfolio and capacity to serve demand
Slide 14: Making investments to become the most sought-after place to work
Making investments to become the most sought-after place to work Objectives 1 2 3 Health, safety and well- Competitive wage and Investing in automation and being resources benefit offerings technology Actions Required all U.S. team members to Supporting flexible scheduling and Making strategic inves
Slide 15: Shaping the portfolio for growth through deliberate actions and investments
Shaping the portfolio for growth through deliberate actions and investments Volume Billion pounds New Product Launches Value-added2 Commodity Best-in-class brand building and customer insights capabilities drive product pipeline +2% TARGET CAGR Strategic Capacity Expansion 25.7 26.3 28.6 28.3 28.0 E
Slide 16: Targeting volume growth ahead of the market in every segment
Targeting volume growth ahead of the market in every segment Volume1 (billion pounds) 18-20% Chicken 4-5% TARGET CAGR Prepared Foods 4-5% TARGET CAGR International / Other TARGET CAGR 12.8 12.6 12.4 3.8 3.7 3.5 1.4 1.4 1.0 2 FY2019 FY2020 FY2021 FY2019 FY2020 2 FY2021 2 FY2019 FY2020 FY2021 1-2%TARG
Slide 17: Diverse portfolio of brands drive value creation for the enterprise
Diverse portfolio of brands drive value creation for the enterprise 17
Slide 18: Capacity expansions will support growth objectives
Capacity expansions will support growth objectives 12 plants expected to open over next 2 years to increase capacity by ~1.3 billion pounds Europe Poultry China Poultry (Hubei) Humboldt Poultry Danville Poultry INTERNATIONAL BUSINESS INTERNATIONAL BUSINESS CHICKEN CHICKEN — • Estimated online March
Slide 19: Productivity is a critical driver of our future success
Productivity is a critical driver of our future success New Program Management Office to oversee execution supported by culture of continuous improvement and entrepreneurship Operational & Functional Digital solutions Automation Excellence and Agility $1B+ — Targeted productivity $300M+ $250M+ $450M
Slide 20: We expect to deliver $1B in productivity gains by the end of FY2024
We expect to deliver $1B in productivity gains by the end of FY2024 Operational and Functional Excellence $1,000M+ Digital Solutions Automation ~$600 - $800M ~$300 ~$300 - 400M ~$250 ~$450 FY22 FY23 FY24 % of Program Commitment Achieved by Fiscal Year End 30%+ 60%+ 100% 1 Productivity savings are re
Slide 21: We are accelerating our automation investments
We are accelerating our automation investments Unique opportunity to combine operational scale with innovative automation and real-time analytics to drive competitive advantage Critical element to productivity program • Improves safety FY2021 FY2022 FY2023 FY2024 • Automates positions that are diffi
Slide 22: We expect to sustainably feed the world as a recognized global protein leader
Increased demand Balanced portfolio where Brand and product for protein each segment has a clear innovation powered by reinforced by post- and compelling path investments to drive pandemic recovery forward higher value-added sales We expect to sustainably feed the world as a Making investments to Ac
Slide 23: David Bray
David Bray Group President, Poultry 23
Slide 24: U.S. poultry consumption is expected to grow over the next decade
U.S. poultry consumption is expected to grow over the next decade Modest World Growth Modest U.S. Growth +1% All regions are expected to consume more poultry on an absolute basis over the next +1% U.S. poultry consumption expected to grow at the same rate as global poultry decade 2020 to 2030 2020 t
Slide 25: Chicken is a critical component of the Tyson portfolio
Chicken is a critical component of the Tyson portfolio and is structured to have broad channel exposure Contribution to Total Company Sales Chicken Sales by Channel FY2021 FY2021 Industrial/Other 9% International 6% Chicken Retail $47.0 29% $13.7 44% billion billion Foodservice 41% 25
Slide 26: Sales have grown while earnings have declined since FY2016
Sales have grown while earnings have declined since FY2016 Sales Earnings $ in billions $ in millions 5% 1 1 Adj. Operating Income Adj. EBITDA CAGR $1,589 $1,429 $1,347 $13.3 $13.7 $1,191 $13.0 $11.4 $12.0 $10.9 $1,295 $1,117 $947 $718 $611 $655 $24 $148 FY2016 FY2017 FY2018 FY2019 FY2020 1 FY2021 F
Slide 27: We have a differentiated portfolio to serve customers and consumers
We have a differentiated portfolio to serve customers and consumers — Chicken Segment ~45% ~10% ~20% ~10% ~15% Fully Cooked Ingredient Retail Small Export, Revenue Commodity, & Par Fry Solutions Tray Pack Bird Other In % of revenue Actions Grow fully-cooked through capacity expansions to support bot
Slide 28: Our path to sustainable leadership in Chicken
Our path to sustainable leadership in Chicken — 1 Become the most sought-after place to work 2 Be our customers’ go-to-supplier 3 Grow our business 4 Improve operational performance 28
Slide 29: Actions taken to restore competitive hatch rates
Actions taken to restore competitive hatch rates 85 84.0 84 Replacement male rollout started Replacement rollout complete 83.0 83 Reverted to previous male parent stock line Expect to start seeing the impact of improved hatch in our adjusted 82 81.5 operating income Hatch Rate % 81 80.0 80 Mid-FY 20
Slide 30: Increasing harvest capacity and volumes to support growth with customers
Increasing harvest capacity and volumes to support growth with customers FY2021 FY2022 Target ~80% ~85% ~98%+ 37 million head/week 40 million head/week 47 million head/week expected Approximate Volume (pounds) ~12.5B ~13.0B ~15.0B Improvement equivalent to ~2 Improvement equivalent to ~6 new harvest
Slide 31: We have an aggressive plan to deploy automation
We have an aggressive plan to deploy automation Automation will provide Roadmap to deploy largely proprietary debone automation technology to alleviate several benefits labor challenges • Automation of 88 front half FY2021 FY2022 FY2023 FY2024 deboning lines and 13 dark meat lines is part of a long-
Slide 32: Optimizing our mix and expanding capacity through capital investment
Optimizing our mix and expanding capacity through capital investment 2021 New Tray Pack Processing Plant 2023 Objectives Humboldt, TN 260 million retail pounds p.a. New Fully-Cooked Processing Plant Danville, VA Restore harvest Maximize and 200 million pounds p.a. utilization rates expand our assets
Slide 33: We have a market-leading portfolio across channels and value tiers
We have a market-leading portfolio across channels and value tiers Retail1 Foodservice2 SHARE POSITION IN SEGMENT #1 #1 #1 #1 #1 #2 N/A Value, Mid-Tier, Value, Mid-Tier, Tier Organic Premium Value Portfolio Stuffed Entrees Super Premium Premium Premium 1 Nielsen xAOC, L52W ending 10/2/21, Share base
Slide 34: We go to market with the #1 chicken brand
We go to market with the #1 chicken brand with the highest awareness, share of voice, and most trusted equity across channels +7.3% 97% 42% $ Sales Growth versus Year Ago1 Awareness2 Penetration3 1 2 Leading awareness in the category and in Equity is trusted and stands for quality more homes and foo
Slide 35: Our category growth has accelerated across both Retail and Foodservice channels
Our category growth has accelerated across both Retail and Foodservice channels Retail Frozen Prepared Our share of the frozen chicken Strong household penetration Chicken category growth has category has grown with room to grow3 accelerated 13.7% RETAIL +1.0 +2.4 FY2019 – FY20211 pts growth in volu
Slide 36: We are accelerating consumer and operator-driven innovation with an omni-channel approach
We are accelerating consumer and operator-driven innovation with an omni- channel approach Fueling QSR growth through the Building on successful platforms with Helping to solve operator “chicken sandwich wars” an omni-channel approach challenges around labor 36
Slide 37: We have a pathway to top quartile profitability
We have a pathway to top quartile profitability 4-5% 7-9% Organic Volume AOI Margin Growth Target Target Range 3-year CAGR FY2024 2021 Baseline Year 1 Become the most sought-after place to work 2 Be our customers’ go-to-supplier 3 Grow our business 4 Improve operational performance 37
Slide 38: Noelle O’Mara
Noelle O’Mara Group President, Prepared Foods 38
Slide 39: Prepared Foods is a critical contributor to Tyson Foods
Prepared Foods is a critical contributor to Tyson Foods 3-Year Average of FY19 – FY14 Financial Contribution of FY21 Financial Contribution of Prepared Foods vs Rest of Tyson Prepared Foods vs Rest of Tyson — Creates Value for Tyson Foods Drives profitable growth SALES Provides earnings stability 10
Slide 40: We have a powerful portfolio that is relevant across channels and dayparts
We have a powerful portfolio that is relevant across channels and dayparts FY21 Sales by Channel ~35% Breakfast ~55% Meals ~10% Snacking $8.9B ~60% ~40% Sales Foodservice Retail Established Opportunity to Win Leading equities that extend Strategic customer relationships including Omnichannel manufac
Slide 41: Our Retail categories are well-positioned against consumer needs
Our Retail categories are well-positioned against consumer needs and have demonstrated strong growth momentum Protein leads in growth and momentum Category Growth4 2-Year CAGR in pounds FY17-19 FY19-21 Our Brands High Protein Food & Beverage by Category +8.1% CAGR CAGR volume sales growth vs. year a
Slide 42: We are the market leader, gaining share and driving growth across Retail categories
We are the market leader, gaining share and driving growth across Retail categories 13 consecutive quarters of retail share growth1 #1 #1 #2 #1 #1 in +0.9 in Frozen 3 in Frozen Protein in Lunchmeat in Breakfast Hot Dogs Prepared Chicken Breakfast Sausage growth in share points across our core catego
Slide 43: We have two of the highest growing brands in all of Food
We have two of the highest growing brands in all of Food Both Top 10 Growth Brands in absolute dollar growth out of 41K+ Nielsen tracked food brands1 Sources: 1 Past 2-year Retail $ sales growth; Nielsen Total U.S. All Outlets, 52 weeks ending 10/2/2021 43 Note: Tyson Branded Products are included i
Slide 44: Comprehensive, leading Foodservice portfolio that addresses customer needs
Comprehensive, leading Foodservice portfolio that addresses customer needs Market Share #1 Market Share #2 Market Share #3 Breaded Beef Philly Meat Corn Dogs Pizza Toppings Bacon Ham Cooked Burgers Pre-made Hot Dogs Tortillas Breakfast Sausage Meatballs Sandwiches Dinner Sausage Mexican Handhelds Dr
Slide 45: Despite strong market performance, key headwinds exist
Despite strong market performance, key headwinds exist What’s going well Retail Foodservice Omnichannel Agile response performance turnaround expansion to Covid 13 consecutive quarters Orders returning to eCommerce growth shifted capacity; of share growth pre-COVID levels outpacing total F&B new way
Slide 46: Prepared Foods has delivered sales growth while headwinds have impacted margin performance
Prepared Foods has delivered sales growth while headwinds have impacted margin performance Sales Earnings $ in billions $ in millions 4% Adj. Operating Income1 Adj. EBITDA 1 $1,390 CAGR $1,287 $8.9 $1,133 $8.7 $8.4 $1,060 $8.4 $1,020 $962 $7.9 $7.3 $956 $902 $752 $723 $672 $665 FY2016 FY2017 FY2018
Slide 47: Our strategy to win builds on our strengths while addressing headwinds
Our strategy to win builds on our strengths while addressing headwinds — — — Drive Profitable Expand into Create Fuel Growth in Our Core New Spaces & Flexibility Extend our core Retail Innovate in attractive white Expand margins through cost brands’ market leadership spaces (e.g., snacking) and reve
Slide 48: Extend our core retail brand market leadership
DRIVE PROFITABLE GROWTH IN OUR CORE Extend our core retail brand market leadership Even as share leader, strong household penetration of our categories afford tremendous room to grow 81.4% Category HH Penetration Brand HH Penetration 72.5% 68.0% 59.5% 59.5% 58.6% 51.1% 38.1% 33.6% 27.0% 25.6% 25.5%
Slide 49: Lead foodservice recovery
DRIVE PROFITABLE GROWTH IN OUR CORE Lead foodservice recovery Prepared Foodservice Focus 5 has outperformed …and we will continue to lead through recovery given our the industry throughout the pandemic… channel mix, portfolio strength and advantaged network Tyson Prepared FS Focus 5 vs Industry FS M
Slide 50: Innovate in attractive white spaces
EXPAND INTO NEW SPACES Innovate in attractive white spaces Expanding core brands Launching new brands to win Elevating our into adjacencies in attractive white spaces Foodservice portfolio 50
Slide 51: Expand alternative protein portfolio and capabilities
EXPAND INTO NEW SPACES Expand alternative protein portfolio and capabilities Expanding Raised & Rooted Expanding Across Power Brands Expanding Across Geographies Retail & Foodservice APAC Launch Tyson Foods continuing to invest in Alternative Protein Capabilities Procurement R&D Manufacturing Supply
Slide 52: Create Fuel & Flexibility
Create Fuel & Flexibility — Expand margins through cost & revenue management — Invest in capacity & flexibility to service demand — Implement transformational approaches to labor 52
Slide 53: Roadmap for driving volume and earnings growth
Roadmap for driving volume and earnings growth — 4-5% 10-12% Organic Volume Growth AOI Margin Target Range Target 3-Year CAGR FY2024 2021 Baseline Year Investments o Capital expenditure to drive capacity in support of category growth objectives and to support manufacturing flexibility and automation
Slide 54: Shane Miller
Shane Miller Group President, Fresh Meats 54
Slide 55: Global beef consumption is expected to remain strong over the next decade
Global beef consumption is expected to remain strong over the next decade +1% World beef consumption is expected to grow 28B U.S. beef consumption remained strong throughout the pandemic 2020 to 2030 Pounds of beef Consumption increased relative to 2019 due Source: OECD-FAO Agricultural Forecast 202
Slide 56: Beef is the largest segment in the Tyson portfolio
Beef is the largest segment in the Tyson portfolio and benefits from a diverse channel sales mix Contribution to Total Company Sales Beef Sales by Channel FY2021 FY2021 10% Industrial & Other Intersegment 2% International 15% $47.0 Beef 37% $18.0 Retail 49% billion billion Foodservice 24% 56
Slide 57: Beef has delivered exceptional operating margin performance over the past 5 years
Beef has delivered exceptional operating margin performance over the past 5 years Sales Earnings $ in billions $ in millions 4% Adj. Operating Income 1 Adj. EBITDA1 $3,354 CAGR $3,240 $18.0 $14.8 $15.5 $15.8 $15.4 $14.5 $1,659 $1,084 $1,178 $917 $1,553 $441 $981 $1,082 $826 $342 FY2016 FY2017 FY2018
Slide 58: Global pork consumption is expected to grow at a faster rate than other proteins
Global pork consumption is expected to grow at a faster rate than other proteins over the next decade Strong relative growth Modest U.S. growth +2% Approximately 95% of the growth expected to occur outside the U.S. +1% U.S. pork consumption expected to grow at a slower rate than global pork consumpt
Slide 59: Pork is a meaningful contributor to company sales
Pork is a meaningful contributor to company sales and provides critical supply to Prepared Foods Contribution to Total Company Sales Sales by Channel FY2021 FY2021 Intersegment 20% Pork 11% Industrial & Other 25% Retail $47.0 $6.3 28% billion billion Foodservice International 8% 19% 59
Slide 60: Consistent demand strength has driven Pork segment sales
Consistent demand strength has driven Pork segment sales while labor challenges have impacted operating margin Sales Earnings $ in billions $ in millions 5% Adj. Operating Income 1 $684 Adj. EBITDA 1 CAGR $610 $561 $648 $6.3 $555 $526 $416 $390 $5.2 $5.0 $311 $4.9 $4.9 $4.9 $374 $328 $264 FY2016 FY2
Slide 61: Focused on differentiation and operational excellence through the cattle and hog cycles
Focused on differentiation and operational excellence through the cattle and hog cycles — 1 Strategic supplier relationships resulting in quality excellence 2 Differentiated, value-added solutions 3 Growth in strategic sales channels and product categories 61
Slide 62: Strategic supplier relationships enable operational excellence and sustainable scale
Strategic supplier relationships enable operational excellence and sustainable scale Objectives Procurement strategies to maintain reliable Leaders in sustainability through differentiated access to high-quality livestock supply supply chain and product solutions Actions Enhanced vertical and/or vir
Slide 63: We are the beef and pork experts
We are the beef and pork experts Objective Provide customers and consumers with differentiated, value-added solutions Actions Enhance innovation capabilities to support Expand and optimize the case ready network development of customer-centric solutions Grow market share with premium, attribute-base
Slide 64: We provide differentiated, value-added solutions to customers and consumers
We provide differentiated, value-added solutions to customers and consumers across Beef and Pork Our margins have benefitted from moving product volume up the value pyramid to maximize total value per head Beef and Pork Value-Added Volumes1 Million pounds Case Ready Margin acceleration 2% CAGR Premi
Slide 65: We are making investments to further expand and optimize the case-ready network
We are making investments to further expand and optimize the beef and pork case-ready network 2021 New Case Ready Plant Columbia, SC 50 million pounds p.a. 2021 New Case Ready Plant Eagle Mountain, UT 220 million pounds p.a. U.S. Operations Investing to grow case- Pork ready volumes by 40% Beef over
Slide 66: Driving growth in strategic channels and product categories
Driving growth in strategic channels and product categories Objectives Grow export business across Drive additional value for Improve foodservice channel markets, channels, and specialty products through new penetration segments capabilities and partnerships Actions Diversification of exports to Chi
Slide 67: Growing exports across markets, channels, and segments
Growing exports across markets, channels, and segments U.S. beef and pork exports are expected to remain strong which will support margins U.S. Beef Exports U.S. Pork Exports (thousand pounds, carcass weight) (thousand pounds, carcass weight) 4% 9% CAGR CAGR 3,160 7,280 3,026 2,951 2,859 6,321 2,557
Slide 68: Specialty products will continue to be a significant revenue driver
Specialty products will continue to be a significant revenue driver Processing By-Products and Value JST Global Joint Venture Cattle Drop Credit (per live cwt) $20 20%CAGR 39% Vertically integrated venture Total Drop Credit Fats & Oils CAGR launched in 2020 and positioned $15 18% to meet evolving gl
Slide 69: Expected growth of Beef and Pork
Expected growth of Beef and Pork 1-2% Investments Organic Volume Growth Target Case-ready expansions 3-year CAGR 2021 Baseline Year Automation & technology initiatives Team member wage and benefit 5-7% initiatives Beef AOI Margin Target Range Innovation, product development, and FY2024 premium brand
Slide 70: Chris Langholz
Chris Langholz Group President, International 70
Slide 71: We have meaningful sales outside of the United States today
We have meaningful sales outside of the United States today Serving global customers and consumers through local production and exports1 Contribution to Contribution to Total Company Sales Total Company Sales FY2019 FY2021 International International Business Business $1.3B $2.0B 13% 14% of total co
Slide 72: Our International Business has historically focused on serving global foodservice customers
Our International Business has historically focused on serving global foodservice customers International Business Sales by Contribution to Total Company Sales FY2021 Channel* FY2021 International Other Business 5% 4% Commodity 10% Retail 14% $47.0 $2.0 billion Foodservice billion 71% *See the appen
Slide 73: Significant opportunity exists to grow our International Business
Significant opportunity exists to grow our International Business and diversify our sales mix in key countries Sales and earnings momentum have built over the past three years despite disruptions due to the pandemic Sales Earnings $ in billions $ in millions (non-GAAP) 38% CAGR 1 Adj. Operating Inco
Slide 74: Profitably serving global demand growth in the International Business
Profitably serving global demand growth in the International Business — 1 Focused strategy with clear where-to-play choices 2 Capability building to create competitive advantage 3 Capacity expansion focused on value-added poultry 74
Slide 75: Focused strategy with clear where-to-play choices
Focused strategy with clear where-to-play choices Objectives Grow locally relevant value- Prioritizing retail growth Investing in scale in select added categories with a focus through targeted brand countries with high growth rates on poultry first deployment Actions Focused on Asia where we see a p
Slide 76: Building footprint to serve global protein demand growth
Building footprint to serve global protein demand growth Enabling local capabilities and global supply chain to serve demand with a focus on Asia and poultry Expected Share of Total Animal Protein Expected Share of Total Poultry Consumption Consumption Growth Growth (2020 – 2030) (2020 – 2030) 64% 4
Slide 77: Growing retail exposure through targeted brand deployment
Growing retail exposure through targeted brand deployment Driving retail penetration and value-added mix improvement over the mid-term horizon — Retail Retail Globalizing our portfolio of 14% 35% “loved” brands Tyson is the most recognized Expected chicken brand in China FY2021 FY2024 We are launchi
Slide 78: Capability building to create competitive advantage
Capability building to create competitive advantage Objectives In-Market Capabilities Centralized Capabilities Consumer insights to Consumer go-to-market Fresh poultry supply OneTyson supply End-to-end M&A innovation capabilities chain, especially for retail network process Actions Conducted multipl
Slide 79: Making investments to further expand our value-added capacity
Making investments to further expand our value-added capacity Investing to grow fully-cooked volume by 30%+ over the next 3 years 7 — Fully-cooked capacity expansion projects over the next 3 years Asia — o 6 fully-cooked plants Europe — o 1 fully-cooked plant 79
Slide 80: Roadmap to profitably serving global demand
Roadmap to profitably serving global demand 18-20% MSD% Organic Volume EBITDA Growth Target Margin Target 3-year CAGR FY2024 2021 Baseline Year Investments o Capital investment to bring 7 new plants online to expand local further processed poultry capacity in key countries o Targeted M&A to acquire
Slide 81: John R. Tyson
John R. Tyson EVP, Strategy & Chief Sustainability Officer 81
Slide 82: Strengthening our sustainability actions
— — — Working towards goal of First U.S. food company Completed construction achieving net zero carbon to verify sustainable cattle of Tyson Foods Center emissions by 2050; 30% production practices for Sustainable Broiler reduction by 2030 approved by at scale Research the Science Based Targets init
Slide 83: Sustainability governance
Sustainability governance — Executive Oversight Tyson Foods Board of Directors Donnie King President & CEO Governance & Nominating Audit Compensation & Strategy & Acquisitions Committee Committee Leadership Development Committee Committee John R. Tyson EVP, Strategy & Chief Guided by our charter: Su
Slide 84: Building an equitable and resilient food system
Empowering People Building an equitable Transparent people-first business that values inclusion 1 and resilient food and equal opportunity, investing in communities, fighting hunger, and empowering our team system — Conserving Natural Resources Conserving water, reducing GHG emissions, eliminating m
Slide 85: Empowering people, customers, and communities
Empowering people, customers, and communities Objectives Team member Equity, Hunger relief Workforce Community health, safety inclusion and and food engagement outreach and wellbeing diversity access Actions Reduced OSHA recordables by 17% year-over-year Donated 30+ million pounds of food, totaling
Slide 86: Conserving natural resources and protecting our planet
Conserving natural resources and protecting our planet Working towards goal of achieving net zero CO2 emissions by 2050 Our Priorities Water Greenhouse gas Waste Sustainable conservation reduction reduction packaging Actions & Initiatives 30% GHG reduction target by 2030 approved First U.S. food com
Slide 87: Innovating for smart, responsible agriculture
Innovating for smart, responsible agriculture Our Priorities Agriculture Animal welfare Land Forest Supply chain education and innovation stewardship protection resiliency development Actions & Initiatives Completed construction of Tyson Foods Center for Announced Global Forest Protection Standard S
Slide 88: Collaborating with a broad range of stakeholders to sustainably feed the world
Collaborating with a broad range of stakeholders to sustainably feed the world 88
Slide 89: Stewart Glendinning
Stewart Glendinning EVP & Chief Financial Officer 89
Slide 90: We are committed to delivering shareholder value
We are committed to delivering shareholder value 1 Tyson has a track record of driving sales and volume growth 2 Compelling path forward to deliver future earnings growth 3 A strong balance sheet that provides optionality 4 Mid-term financial targets reflect our confidence in our earnings growth exp
Slide 91: Total company sales and volume have grown over time
Total company sales and volume have grown over time Pandemic-related labor challenges impacted recent volume performance Sales Volume $ in millions Million pounds 5% 2% CAGR CAGR $47,049 $42,405 $42,366 $40,052 $36,881 $38,260 28,639 28,278 28,034 26,314 25,671 25,407 1 2 FY2016 FY2017 FY2018 FY2019
Slide 92: Earnings and operating cash flows have also remained strong
Earnings and operating cash flows have also remained strong Earnings Operating Cash Flow $ in millions $ in millions Adjusted Operating Income 1 Adj EBITDA 1 7% CAGR $5,508 $3,874 $3,840 $4,194 $4,021 $4,181 $4,288 $3,939 $2,963 $3,538 $2,716 $3,194 $3,205 $2,599 $2,513 $2,920 $3,010 $2,805 FY2016 F
Slide 93: Strong earnings per share profile positions us for future growth
Strong earnings per share profile positions us for future growth Adj. Earnings per share1 $ per share Ingredients for earnings per share 14% growth CAGR $8.28 Grow volume faster than the 1 market $6.01 $5.21 $5.34 $5.42 $4.39 2 Improve operating margins 3 Drive enhanced returns FY2016 FY2017 FY2018
Slide 94: Tyson has the right ingredients for future earnings growth
Tyson has the right ingredients for future earnings growth Key priorities to unlock long-term shareholder value 1 2 3 Grow volume above the market Improve Operating Margins Drive enhanced returns Continue strong brand growth and Leverage brand and product portfolio Efficiency programs driving down c
Slide 95: Each segment has a compelling financial path forward
Each segment has a compelling financial path forward International/ Prepared Foods Beef Chicken Pork Other 19% 37% 29% 11% 4% of Sales of Sales of Sales of Sales of Sales FY 2021 FY 2021 FY 2021 FY 2021 FY 2021 10-12% 5-7% 7-9% 5-7% MSD% AOI Margin Target AOI Margin Target AOI Margin Target AOI Marg
Slide 96: Our mid-term financial targets
Our mid-term financial targets Committed to outperforming the market, improving earnings, and driving stable return on invested capital FY 2019 FY 2021 Target 1 Grow volumes faster than annual protein consumption growth every 28.6 28.0 +2% year billion pounds billion pounds CAGR 2019 Baseline Year +
Slide 97: Our capital allocation priorities are clear
Our capital allocation priorities are clear We are focused on driving returns while maintaining financial strength Objectives Build financial strength Invest in the business Return cash to shareholders Actions Invest in new business Maintain a robust balance sheet initiatives, support capital Manage
Slide 98: Deleveraging actions have significantly improved our debt ratio
Deleveraging actions have significantly improved our debt ratio Healthy balance sheet provides optionality for investing in growth and returning cash to shareholders Net Debt1/Adj. EBITDA1 Net Debt1 Ratio $ in millions 2.8 2.5 $11,447 2.3 2.4 $9,882 $9,602 $9,919 2.0 1.7 $6,841 $5,926 1.2 FY2016 FY2
Slide 99: Prioritizing capital investments for growth and productivity initiatives
Prioritizing capital investments for growth and productivity initiatives Capital Expenditures Capital Expenditures $ Millions % by Segment Beef Pork Chicken Prepared Foods International/Other $1,259 $1,200 $1,199 $1,209 9% 6% 14% $1,069 18% 19% 18% $695 48% 51% 41% 10% 8% 10% 18% 19% 11% FY2016 FY20
Slide 100: Increasing transparency and focus on improving the return on our investments
Increasing transparency and focus on improving the return on our investments Adj. Return on Invested Capital1 Percent 13.0% 12.2% 12.0% 11.0% 11.2% 10.2% 9.2% FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 Average 1 Represents a non-GAAP financial measure. Adjusted return on invested capital is explained
Slide 101: Solid balance sheet and free cash flow have supported dividend growth
Solid balance sheet and free cash flow generation have supported dividend growth while share repurchase has been opportunistic Dividends Share Repurchase/(Issuance) dollars dollars 24% 601 636 CAGR 537 $1,944 431 319 $860 216 $427 $252 $207 $67 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2016 FY2017
Slide 102: Cash usage parameters
Cash usage parameters Healthy Balance Sheet Fund Organic Growth Portfolio Improvement Dividend Share Repurchase Maintain leverage ~$4-6 billion in capital Strengthen portfolio Solid balance sheet and Share buybacks will be ratio of 2x or better expenditures planned through selective M&A free cash fl
Slide 103: Delivering long-term shareholder value
Track record of Balanced portfolio where Improving sales delivering strong each segment has a clear diversity to better Delivering long-term earnings and cash and compelling financial insulate results from flow generation path forward commodity cycles shareholder value — Healthy balance sheet Perfor
Slide 104: Appendix
Appendix 104
Slide 105: Operating Income (Loss) & Operating Margin Reconciliations
Operating Income (Loss) & Operating Margin Reconciliations Fiscal Year Ended October 2, 2021 ($ in millions) (unaudited) Beef Pork Chicken Prepared Foods International/Other Intersegment Sales Total Reported Sales $ 17,999 $ 6,277 $ 13,733 $ 8,853 $ 1,990 $ (1,803) $ 47,049 Reported operating income
Slide 106: Sales, Operating Income (Loss) & Operating Margin Reconciliations
Sales, Operating Income (Loss) & Operating Margin Reconciliations Fiscal Year Ended October 3, 2020 ($ in millions) (unaudited) Beef Pork Chicken Prepared Foods International/Other Intersegment Sales Total Reported Sales $ 15,742 $ 5,128 $ 13,234 $ 8,532 $ 1,856 $ (1,307) $ 43,185 Less: Impact of ad
Slide 107: Operating Income (Loss) & Operating Margin Reconciliations
Operating Income (Loss) & Operating Margin Reconciliations Fiscal Year Ended September 28, 2019 ($ in millions) (unaudited) Beef Pork Chicken Prepared Foods International/Other Intersegment Sales Total Reported Sales $ 15,828 $ 4,932 $ 13,300 $ 8,418 $ 1,289 $ (1,362) $ 42,405 Reported operating inc
Slide 108: Operating Income (Loss) & Operating Margin Reconciliations
Operating Income (Loss) & Operating Margin Reconciliations Fiscal Year Ended September 29, 2018 ($ in millions) (unaudited) Beef Pork Chicken Prepared Foods International/Other Intersegment Sales Total Reported Sales $ 15,473 $ 4,879 $ 12,044 $ 8,668 $ 305 $ (1,317) $ 40,052 Reported operating incom
Slide 109: Operating Income (Loss) & Operating Margin Reconciliations
Operating Income (Loss) & Operating Margin Reconciliations Fiscal Year Ended September 30, 2017 ($ in millions) (unaudited) Beef Pork Chicken Prepared Foods International/Other Intersegment Sales Total Reported Sales $ 14,823 $ 5,238 $ 11,409 $ 7,853 $ 349 $ (1,412) $ 38,260 Reported operating incom
Slide 110: Operating Income (Loss) & Operating Margin Reconciliations
Operating Income (Loss) & Operating Margin Reconciliations Fiscal Year Ended September 27, 2014 ($ in millions) (unaudited) Beef Pork Chicken Prepared Foods International/Other Intersegment Sales Total Reported Sales $ 16,177 $ 6,304 $ 11,116 $ 3,927 $ 1,381 $ (1,325) $ 37,580 Reported operating inc
Slide 111: Adjusted EBITDA Reconciliations
Adjusted EBITDA Reconciliations Fiscal Year Ended October 2, 2021 ($ in millions) (unaudited) Beef Pork Chicken Prepared Foods International/ Other Total Operating Income (Loss) $ 3,240 $ 328 $ (625) $ 1,456 $ (3) $ 4,396 Add: Other Income (Expense) 12 1 23 37 (8) 65 EBIT $ 3,252 $ 329 $ (602) $ 1,4
Slide 112: Adjusted EBITDA Reconciliations
Adjusted EBITDA Reconciliations Fiscal Year Ended October 3, 2020 ($ in millions) (unaudited) Beef Pork Chicken Prepared Foods International/Other Total Operating Income (Loss) $ 1,580 $ 565 $ 122 $ 743 $ (2) $ 3,008 Add: Other Income (Expense) 2 - 28 106 (5) 131 EBIT $ 1,582 $ 565 $ 150 $ 849 $ (7)
Slide 113: Adjusted EBITDA Reconciliations
Adjusted EBITDA Reconciliations Fiscal Year Ended September 28, 2019 ($ in millions) (unaudited) Beef Pork Chicken Prepared Foods International/Other Total Operating Income (Loss) $ 1,050 $ 263 $ 621 $ 843 $ (7) $ 2,770 Add: Other Income (Expense) (1) - 8 (12) 60 55 EBIT $ 1,049 $ 263 $ 629 $ 831 $
Slide 114: Adjusted EBITDA Reconciliations
Adjusted EBITDA Reconciliations Fiscal Year Ended September 29, 2018 ($ in millions) (unaudited) Beef Pork Chicken Prepared Foods International/Other Total Operating Income (Loss) $ 950 $ 361 $ 866 $ 845 $ (53) $ 2,969 Add: Other Income (Expense) - - 32 24 - 56 EBIT $ 950 $ 361 $ 898 $ 869 $ (53) $
Slide 115: Adjusted EBITDA Reconciliations
Adjusted EBITDA Reconciliations Fiscal Year Ended September 30, 2017 ($ in millions) (unaudited) Beef Pork Chicken Prepared Foods International/Other Total Operating Income (Loss) $ 818 $ 645 $ 1,053 $ 452 $ (106) $ 2,862 Add: Other Income (Expense) (1) - 16 (18) (18) (21) EBIT $ 817 $ 645 $ 1,069 $
Slide 116: EBITDA Reconciliations
EBITDA Reconciliations Fiscal Year Ended October 1, 2016 ($ in millions) (unaudited) Beef Pork Chicken Prepared Foods International/Other Total Operating Income (Loss) $ 342 $ 526 $ 1,295 $ 723 $ (81) $ 2,805 Add: Other Income (Expense) 5 2 20 11 (2) 36 EBIT $ 347 $ 528 $ 1,315 $ 734 $ (83) $ 2,841
Slide 117: International Business Supplemental Information Operating Income (Loss) Reconciliations
International Business Supplemental Information Operating Income (Loss) Reconciliations ($ in millions) (unaudited) Fiscal Year Ended October 2, 2021 October 3, 2020 September 28, 2019 September 29, 2018 September 30, 2017 October 1, 2016 International business Sales $ 1,990 $ 1,856 $ 1,289 $ 305 $
Slide 118: International Business Supplemental Information Adjusted EBITDA Reconciliations
International Business Supplemental Information Adjusted EBITDA Reconciliations ($ in millions) (unaudited) Fiscal Year Ended October 2, 2021 October 3, 2020 September 28, 2019 September 29, 2018 September 30, 2017 October 1, 2016 International/Other Operating Income (Loss) $ (3) $ (2) $ (7) $ (53)
Slide 119: Earnings Per Share Reconciliations
Earnings Per Share Reconciliations ($ in millions, except per share data) (unaudited) Fiscal Year Ended October 2, 2021 October 3, 2020 September 28, 2019 September 29, 2018 September 30, 2017 October 1, 2016 Pretax EPS Pretax EPS Pretax EPS Pretax EPS Pretax EPS Pretax EPS Impact Impact Impact Impa
Slide 120: Return on Invested Capital (ROIC) Reconciliations
Return on Invested Capital (ROIC) Reconciliations ($ in millions, except percentages) (unaudited) Fiscal Year Ended October 2, 2021 October 3, 2020 September 28, 2019 September 29, 2018 September 30, 2017 October 1, 2016 Average Reported Operating Income $ 4,396 $ 3,008 $ 2,770 $ 2,969 $ 2,862 $ 2,8