Pilgrim's Pride Corporation · NASDAQ:PPC
Pilgrim's Pride — Q2 2017 Earnings Presentation
26 slides from Pilgrim's Pride's earnings presentation, Aug 3, 2017
Slide 1: Financial Results for Second Quarter Ended June 25, 2017
Pilgrim’s Pride Corporation (NASDAQ: PPC) Financial Results for Second Quarter Ended June 25, 2017
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
Slide 3: 2017 Pullet Placements Flat
Pullet placements are flat year on year, indicating modest production growth in 2017. 2017 Pullet Placements Flat Source: USDA 3 Intended Pullet Placements
Slide 4: Decline in Egg Productivity Offsetting Modest Layer Growth
Decline in Egg Productivity Offsetting Modest Layer Growth Source: USDA 4 Hatching layers are up in June but only +0.9% YTD, to support less productive new breed.
Slide 5: Lower Hatchability Reduces Impact of +2% YTD Egg Sets
Lower Hatchability Reduces Impact of +2% YTD Egg Sets Source: USDA 5
Slide 6: Hatchery Utilization Close to Peak Levels
Hatchery Utilization Close to Peak Levels 6 Source: Agristats/EMI 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 2017 2016 5 year avg.
Slide 7: 2017 Chick Placements Modestly Higher
2017 Chick Placements Modestly Higher Source: USDA 7
Slide 8: Avg Weight Trending Down; Jumbo Bird Share Not Growing
Avg Weight Trending Down; Jumbo Bird Share Not Growing After Significant Increase Since 2011 Source: USDA 8
Slide 9: Cold Storage Levels Below 2016
Cold Storage Levels Below 2016 Source: USDA Overall inventories -0.8% vs 2016 levels, driven by strong retail and improved demand for export-oriented cuts. 9
Slide 10: Cutout Values Above 2016 and Closer to 5-Year Levels
Cutout Values Above 2016 and Closer to 5-Year Levels Source: PPC 10 Cutout Value
Slide 11: Wings Counter-seasonally Strong, Other Parts Tracking to 5-year Average
Wings Counter-seasonally Strong, Other Parts Tracking to 5-year Average Source: USDA 11 USDA Boneless/Skinless Breast NE USDA Tenders NE USDA Leg Quarters USDA Whole Wings NE
Slide 12: Strength in Small Bird and Retail Contracts Continues
12 Strength in Small Bird and Retail Contracts Continues, In-line with Seasonality EMI WOG 2.5-4 LBS Source: EMI
Slide 13: Corn Stocks Remain Close to Record High Levels
Corn Stocks Remain Close to Record High Levels Global stocks continue to stay at record high in ‘16, projected to be lower in ‘17 crop year. USDA lowered global stocks-to-use in both ‘16 and ’17. Source: USDA 13
Slide 14: Global Soybean Inventories Elevated
Global Soybean Inventories Elevated Global inventories of soybeans remain at record high levels, with 2017 projected to remain well supplied. Demand for oilseed products estimated to grow to finish out the 2016 crop year. Source: USDA 14
Slide 15: Second Quarter 2017 Financial Review
Second Quarter 2017 Financial Review Case-ready and small birds strength continues while portfolio strategy captured significant rebound in commodity segment; MX operating results remained strong. SG&A higher due to addition of GNP and investments in brands in USA and Mexico. Adjusted Q2-17 EB
Slide 16: Solid Balance Sheet, With Plenty of Room for Strategic Actions
1,316.3 Solid Balance Sheet, With Plenty of Room for Strategic Actions Source: PPC Cash Flow From Operations generation of $255MM in the quarter due to strong operating performance. Net debt multiple is 1.1x LTM EBITDA, below target of 2-3x, underlining our capability to fulfill strategic action
Slide 17: Second Quarter 2017 Capital Spending
Second Quarter 2017 Capital Spending Capex (US$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
Slide 18: 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 18
Slide 19: Appendix
APPENDIX _ EE
Slide 20: 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
Slide 21: Appendix: Reconciliation of LTM EBITDA
Appendix: Reconciliation of LTM EBITDA 21 Source: PPC. The summary unaudited consolidated income statement data for the twelve months ended June 25, 2017 (the LTM Period) have been calculated by subtracting the applicable unaudited consolidated income statement data for the six months ended June 26,
Slide 22: Appendix: EBITDA Margin Reconciliation
Appendix: EBITDA Margin Reconciliation 22 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) Thirteen Weeks Ended
Slide 23: Appendix: Reconciliation of Adjusted Earnings
Appendix: Reconciliation of Adjusted Earnings 23 Source: PPC. 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: Source: PPC PILGR
Slide 24: Appendix: Adjusted EPS Bridge
Appendix: Adjusted EPS Bridge 24 Source: PPC. A reconciliation of GAAP earnings per share (EPS) to adjusted earnings per share (EPS) is as follows: Source: PPC PILGRIM'S PRIDE CORPORATION Reconciliation of GAAP EPS to Adjusted EPS (Unaudited) Thirteen Weeks Ended Twenty-Six Weeks Ended June 25, 2017
Slide 25: Appendix: Net Debt / Cash Position Reconciliation
Appendix: Net Debt / Cash Position Reconciliation 25 Source: PPC. 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 bec
Slide 26: Appendix: Segment and Geographic Data
Appendix: Segment and Geographic Data 26 Source: PPC. Source: PPC PILGRIM'S PRIDE CORPORATION Supplementary Selected Segment and Geographic Data Thirteen Weeks Ended Twenty-Six Weeks Ended June 25, 2017 June 26, 2016 June 25, 2017 June 26, 2016 (Unaudited) (In thousands) Sources of net sales by coun