Tyson Foods, Inc. · NYSE:TSN
Tyson Foods — Q1 2022 Earnings Presentation
22 slides from Tyson Foods's earnings presentation, Feb 7, 2022
Slide 1: 1Q Fiscal 2022 Supplemental Information
— 1Q Fiscal 2022 Supplemental Information February 7, 2022
Slide 2: 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 2022, other future economic
Slide 3: Solid start to fiscal year driven by continued strong demand and improving execution
Solid start to fiscal year driven by continued strong demand and improving execution 1 Double digit sales and earnings growth in the quarter 2 Maintained share in the retail channel as demand remained elevated and gained momentum in foodservice, particularly value-added Chicken 3 Effective pricing s
Slide 4: Double digit sales and earnings growth in the quarter
Double digit sales and earnings growth in the quarter Sales1 Adjusted Operating Income2 Adjusted Earnings Per Share2 24% 40% 48% 1Q22 vs. 1Q21 1Q22 vs. 1Q21 1Q22 vs. 1Q21 Our Priorities 1| Win with team members 2| Win with customers and consumers 3| Win with excellence in execution 1 Note comparison
Slide 5: Remain confident that actions underway will improve volume
Remain confident that actions underway will improve volume Volume1 (billion pounds) Total Company +0.3% Chicken +3.6% Prepared Foods -2.6% 7.01 7.03 3.00 3.10 0.87 0.85 1Q21 1Q22 1Q21 1Q22 1Q21 1Q22 Remain confident in 2-3% improvement for FY22 Strong demand and improved live production Labor and su
Slide 6: Hitting milestones to deliver Chicken segment recovery
Hitting milestones to deliver Chicken segment recovery Objectives Improve operational Be the employer of choice Serve our customers performance Actions Improving turnover and absenteeism Hatch rate improvement ahead of Adding fully cooked capacity through schedule; averaged 80.9% in line upgrades an
Slide 7: Productivity savings are on track
Productivity savings are on track Targeting $1B+ in productivity gains by end of FY2024 with 30%+ delivered by the end of FY2022 $1,000M+ ~$300 – 400M FY22 FY24 Actions will lead to sustainable productivity savings in three key focus areas Operational & Functional Digital Solutions Automation Excell
Slide 8: Making progress on strengthening our position as a global protein leader
Making progress on strengthening our position as a global protein leader Imperatives 1 2 3 4 5 Outpacing the market by Driving operational and Leveraging our Aggressively restoring our Transforming our team enhancing our portfolio functional excellence and financial strength to invest competitivenes
Slide 9: Continued strong financial performance overall
Continued strong financial performance overall First Quarter 2022 vs First Quarter 2021 SALES ADJUSTED OPERATING INCOME1 ADJUSTED EPS1 (in billions of dollars) (in millions of dollars) (in dollars per share) $12.9 $1,432 $2.87 $10.5 +24% $1,025 +40% $1.94 +48% 1Q21 1Q22 1Q21 1Q22 1Q21 1Q22 • Volumes
Slide 10: Earnings increased primarily due to pricing to offset inflation
Earnings increased primarily due to pricing to offset inflation First Quarter 2022 Highlights $ millions - $1,627 • Volumes increased slightly due $2,117 to growth in Chicken offset by declines in Beef and Prepared Foods • Price/mix benefitted substantially due to strength in Beef and pricing to ach
Slide 11: Global demand and adequate cattle supply support Beef
Global demand and adequate cattle supply support Beef First Quarter 2022 vs First Quarter 2021 SALES ADJUSTED OPERATING INCOME1 HIGHLIGHTS (in millions of dollars) (in millions of dollars) o Sales volume decreased due to lower production associated with a challenging labor environment and increased
Slide 12: Improved margin spread benefits the Pork segment
Improved margin spread benefits the Pork segment First Quarter 2022 vs First Quarter 2021 SALES ADJUSTED OPERATING INCOME1 HIGHLIGHTS (in millions of dollars) (in millions of dollars) o Sales volume was up slightly as strong global demand was offset by the impacts associated with a challenging labor
Slide 13: Effective revenue management and productivity in Prepared Foods
Effective revenue management and productivity in Prepared Foods First Quarter 2022 vs First Quarter 2021 SALES ADJUSTED OPERATING INCOME1 HIGHLIGHTS (in millions of dollars) (in millions of dollars) o Sales volume decreased due to the sale of our Pet Treats business and lower production throughput p
Slide 14: Strong demand and improving execution in the Chicken segment
Strong demand and improving execution in the Chicken segment First Quarter 2022 vs First Quarter 2021 SALES ADJUSTED OPERATING INCOME1 HIGHLIGHTS (in millions of dollars) (in millions of dollars) o 1Q22 sales volume increased primarily due to increased live production and a strong demand environment
Slide 15: Using financial strength to invest in our business and return cash to shareholders
Using financial strength to invest in our business and return cash to shareholders Leverage Ratio OPERATING CASH FLOW MANAGE (Net Debt/Adj. EBITDA)1 (in billions of dollars) FINANCIAL <2.0x STRENGTH 1.1x $1.39 $1.43 Manage our leverage ratio to be at or below our long-term target 1Q22 Target Capital
Slide 16: Maintaining sales guidance and segment margin indications
Maintaining sales guidance and segment margin indications FY2022 Guidance2 1Q21 1Q22 Prior Indication Revised Indication Sales $10.5 billion $12.9 billion $49 – $51 billion Unchanged Volume (4.4)% 0.3% 2 – 3% growth Unchanged Chicken AOI Margin1 3.3% 3.0% 5 – 7% Unchanged Prepared Foods AOI Margin1
Slide 17: Appendix
Appendix
Slide 18: Sales improved in all segments and across all channels
Sales improved in all segments and across all channels First Quarter 2022 $ millions Channel Highlights $81 -$891 $12,933 • Retail sales improved by $349 $187 $1,015 million in the quarter, led by increases in Chicken up $197 $320 $739 Retail million and Beef up $84 million $220 $10,460 Retail Foods
Slide 19: EPS Reconciliations
EPS Reconciliations $ in millions, except per share data (Unaudited) First Quarter Pretax Impact EPS Impact 2022 2021 2022 2021 Reported net income per share attributable to Tyson (GAAP EPS) $ 3.07 $ 1.28 Add: Legal contingency accrual1 $ — $ 320 — 0.67 Less: Production facility fire insu
Slide 20: Segment Operating Income Reconciliations
Segment Operating Income Reconciliations $ in millions (Unaudited) Adjusted Operating Income (for the first quarter ended January 1, 2022) Beef Pork Chicken Prepared Foods International/Other Total Reported operating income $ 956 $ 164 $ 140 $ 186 $ 9 $ 1,455 Less: Production facilities fire insuran
Slide 21: EBITDA Reconciliations
EBITDA Reconciliations $ in millions (Unaudited) Three Months Ended Fiscal Year Ended Twelve Months Ended January 1, 2022 January 2, 2021 October 2, 2021 January 1, 2022 Net Income $ 1,126 $ 472 $ 3,060 $ 3,714 Less: Interest income (3) (2) (8) (9) Add: Interest expense 100 110 428
Slide 22: EBITDA Reconciliations
EBITDA Reconciliations $ in millions (Unaudited) Three Months Ended Fiscal Year Ended Twelve Months Ended January 2, 2021 December 28, 2019 October 3, 2020 January 2, 2021 Net Income $ 472 $ 509 $ 2,071 $ 2,034 Less: Interest income (2) (3) (10) (9) Add: Interest expense 110 120 485