Pilgrim's Pride Corporation · NASDAQ:PPC

Pilgrim's Pride — Q4 2017 Earnings Presentation

22 slides from Pilgrim's Pride's earnings presentation, Feb 15, 2018

  1. Slide 1: Financial Results for Fourth Quarter and Year Ended December 31, 2017

    Pilgrim’s Pride Corporation (NASDAQ: PPC) Financial Results for Fourth Quarter and Year Ended December 31, 2017

  2. 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” an

  3. Slide 3: Intended Pullet Placements

    5,000 5,500 6,000 6,500 7,000 7,500 8,000 8,500 9,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Th o u sa n d H ea d Intended Pullet Placements 2016 2017 5 year avg.  Pullet placements were slightly up YOY to support decreased flock productivity and new plants for 2018/ 2019. 2017 Pullet Plac

  4. Slide 4: Layer Growth Needed to Counter Decline in Egg Productivity

    Layer Growth Needed to Counter Decline in Egg Productivity Source: USDA 4  Hatching layers are up to counter less productive new breed and older flock, both of which generate fewer eggs per bird. 54,152 56,723 0 10,000 20,000 30,000 40,000 50,000 60,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov D

  5. Slide 5: Hatchery Utilization Remains Close to Peak Levels

    5 Hatchery Utilization Remains Close to Peak Levels 84.00% 85.00% 86.00% 87.00% 88.00% 89.00% 90.00% 91.00% 92.00% 93.00% 94.00% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec % Hatchery Utilization 2016 2017 5 year avg.

  6. Slide 6: +2.9% Increase in Egg Sets Required to Offset Lower Hatch

    +2.9% Increase in Egg Sets Required to Offset Lower Hatch Source: USDA 6 0.7800 0.7900 0.8000 0.8100 0.8200 0.8300 0.8400 % Chicken Hatchability by Week - USDA 5 Year Range 2016 2017 2018 5 year avg 170,000 180,000 190,000 200,000 210,000 220,000 230,000 240,000 T h o u s a n d s o f E g g s Chicken

  7. Slide 7: 2017 Chick Placements Modestly Higher

    2017 Chick Placements Modestly Higher Source: USDA 7 160,000 165,000 170,000 175,000 180,000 185,000 190,000 Head ( 0 0 0 ) Chicken Broiler Placed by Week- USDA 5 Year Range 2016 2017 2018 5 Yr. Avg

  8. Slide 8: Expect Slight Shift into Jumbo Bird in 2018 on New Capacity

    After Recent Stability, Expect Slight Shift into Jumbo Bird in 2018 on New Capacity Source: USDA 8 23% 24% 27% 26% 26% 25% 25% 25% 43% 41% 35% 35% 32% 31% 30% 29% 19% 19% 19% 19% 21% 23% 24% 24% 15% 16% 18% 20% 21% 21% 21% 21% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2011 2012 2013 2014 2015 2016

  9. Slide 9: Cold Storage Inventories Starting to Decline

    Cold Storage Inventories Starting to Decline Source: USDA  Overall inventories rose in Dec mostly driven by large increase in “Other” products; Breast Meat and LQ ended the month down vs. Dec 2016. 9 500,000,000 550,000,000 600,000,000 650,000,000 700,000,000 750,000,000 800,000,000 850,000,000 900

  10. Slide 10: 2017 Cutout Ended Close to Seasonality, Prices in 2018 In-line

    2017 Cutout Ended Close to Seasonality, Prices in 2018 are In-line with Last Year Source: PPC 10 62.44 50.00 60.00 70.00 80.00 90.00 100.00 110.00 1/ 6 1/ 2 0 2/ 3 2/ 1 7 3/ 3 3/ 1 7 3/ 31 4/ 1 4 4/ 2 8 5/ 1 2 5/ 2 6 6/ 9 6/ 2 3 7/ 7 7/ 2 1 8/ 4 8/ 1 8 9/ 1 9/ 1 5 9/ 2 9 10 /1 3 10 /2 7 11 /1 0 11 /

  11. Slide 11: Wings Trending Similar to Seasonal Norms; LQ and Tenders Pace

    107.12 75.00 95.00 115.00 135.00 155.00 175.00 195.00 215.00 1/ 5 2/ 4 3/ 6 4/ 5 5/ 5 6/ 4 7/ 4 8/ 3 9/ 2 10 /2 11 /1 12 /1 C e n ts /L b USDA Boneless/Skinless Breast NE 5 Year Range 2016 2017 2018 5 Year Average 35.52 15.00 20.00 25.00 30.00 35.00 40.00 45.00 50.00 55.00 60.00 1/ 5 2/ 4 3/ 6 4/ 5

  12. Slide 12: Small Bird Stronger than Last Year and In-line with Average

    12 Small Bird Stronger than Last Year and In–line with 5 year Average Source: EMI 90.49 60 70 80 90 100 110 120 1 /5 1 /1 9 2 /2 2 /1 6 3 /2 3 /1 6 3 /3 0 4 /1 3 4 /2 7 5 /1 1 5 /2 5 6 /8 6 /2 2 7 /6 7 /2 0 8 /3 8 /1 7 8 /3 1 9 /1 4 9 /2 8 1 0 /1 2 1 0 /2 6 1 1 /9 1 1 /2 3 1 2 /7 1 2 /2 1 C en ts /L

  13. Slide 13: Corn Stocks to Remain at High Levels in '17/18

    Corn Stocks to Remain at High Levels in ’17/18  After record stocks in 2016, 2017 stocks projected slightly lower but market remains well supplied.  USDA tightens global stocks-to-use for 2017. Source: USDA 13 72.2 89.9 94.1 92.8 78.5 73.4 67.9 93.7 109.4 104.2 129.1 123.5 50 60 70 80 90 100 110 1

  14. Slide 14: Global Soybean Inventories Increasing

    Global Soybean Inventories Increasing  Global inventories of soybeans remain at record high levels, with expected growth in 2017.  USDA forecasts continued growth in oilseed demand in 2018 . Source: USDA 14 52.8 62.7 52.9 44.0 59.5 69.9 53.4 57.4 61.8 77.5 77.9 96.1 98.1 0 20 40 60 80 100 120 2005

  15. Slide 15: Fourth Quarter 2017 Financial Review

    Fourth Quarter 2017 Financial Review  US business units solid; GNP significantly improved with margins on- par with legacy, MX challenged due to weather events, UK/Europe stable.  SG&A higher due to addition of GNP and Moy Park, brand investments in US and MX, and increase in bonus accrual.  Adju

  16. Slide 16: Fourth Quarter 2017 Capital Spending

    Fourth Quarter 2017 Capital Spending Capex (US$M) Source: PPC  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 expo

  17. Slide 17: Investor Relations Contact

    Investor Relations Contact Investor Relations: Dunham Winoto Director, Investor Relations E-mail: IRPPC@pilgrims.com Address: 1770 Promontory Circle Greeley, CO 80634 USA Website: www.pilgrims.com 17

  18. Slide 18: Appendix

    APPENDIX _ EE

  19. Slide 19: Appendix: EBITDA Reconciliation

    Appendix: EBITDA Reconciliation Source: PPC. “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

  20. Slide 20: Appendix: EBITDA Margin Reconciliation

    Appendix: EBITDA Margin Reconciliation 20 Source: PPC. EBITDA margins have been calculated by taking the relevant unaudited EBITDA figures, then dividing by Net Revenue for the applicable period. Source: PPC PILGRIM'S PRIDE CORPORATION Reconciliation of EBITDA Margin (Unaudited) Fourteen Weeks Ended

  21. Slide 21: Appendix: Adjusted Operating Income Reconciliation

    Appendix: Adjusted Operating Income Reconciliation 21 Source: PPC. A reconciliation of GAAP operating income to adjusted operating income is as follows: Source: PPC PILGRIM'S PRIDE CORPORATION Reconciliation of Adjusted Operating Income (Unaudited) Fourteen Weeks Ended Thirteen Weeks Ended Fifty-Thr

  22. Slide 22: Appendix: Segment and Geographic Data

    Appendix: Segment and Geographic Data 22 Source: PPC. Source: PPC PILGRIM'S PRIDE CORPORATION Supplementary Selected Segment and Geographic Data (Unaudited) Fourteen Weeks Ended Thirteen Weeks Ended Fifty-Three Weeks Ended Fifty-Two Weeks Ended December 31, 2017 December 25, 2016 December 31, 2017 D

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