Tyson Foods, Inc. · NYSE:TSN
Tyson Foods — Investor Presentation (February 2016)
34 slides from Tyson Foods's investor presentation, February 2016
Slide 1: Built for growth - February 2016
Bu for iIt growth. ae
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain information contained in this presentation may constitute forward-looking statements, such as statements relating to expected performance. These forward-looking statements are subject to a number of factors and uncertainties which could cause our actual results and
Slide 3: Highlights
Highlights One of the largest food companies in the world Advantaged brands in advantaged product categories Multi-protein, multi-channel, all day parts, all meal occasions #1 or #2 brands in 13 categories #2 in U.S. frozen food with products in growing categories Strong cash flow generation Estimat
Slide 4: Tyson Foods is #8 in Total U.S. CPG Retail Sales
Tyson Foods is #8 in Total U.S. CPG Retail Sales Among branded food companies > $5B Sales in Billions $25.5 $21.8 $16.5 $13.4 $9.0 $8.5 $7.8 $7.7 $6.4 $6.2 $5.6 $5.6 $5.4 Source: IRI Total U.S. Multi-Outlet Sales, 52 weeks ending 1/24/16 Tyson Foods, Inc. Investor Presentation | February 2016 |12
Slide 5: Tyson Foods is #2 in Frozen Food
Tyson Foods is #2 in Frozen Food Leads frozen poultry and breakfast foods Sales in Billions $7.2 $3.6 $3.2 $2.3 $2.0 $1.8 $1.8 $1.2 $1.1 Source: IRI U.S. Multi-Outlet frozen category sales, 52 weeks ending 1/24/2016 Tyson Foods, Inc. Investor Presentation | February 2016 |13
Slide 6: Multiple Areas to Grow in Large Categories
Multiple Areas to Grow in Large Categories Frozen Cooked Frozen Protein Lunchmeat Hot Dogs Uncooked Bacon Breakfast Sausage Smoked Sausage Prepared Chicken Breakfast 89% 76% 70% 62% 62% 55% 38% 28% 29% 34% 26% 27% 23% 8% Size of Category $6.7Bn $2.6Bn $3.6Bn $2.0Bn $2.0Bn $2.6Bn $1.7Bn Dollar Growth
Slide 7: Leading Brand Shares in Key Categories
Leading Brand Shares in Key Categories Market Share in Leading Categories Market Share in Leading Categories Brand Category Share Position Brand Category Share Position Fresh Chicken* #1 Breakfast Sausage #1 Frozen Cooked Chicken #1 Frozen Protein Breakfast #1 Frozen Uncooked Chicken #1 Frozen Uncoo
Slide 8: Brand Portfolio Participates Across Meal Occasions
Brand Portfolio Participates Across Meal Occasions Tyson Foods, Inc. Investor Presentation | February 2016 |8
Slide 9: Reframe from Product to Brand
Reframe from Product to Brand Tyson Foods, Inc. Investor Presentation | February 2016 |9
Slide 10: Products
Products Tyson Foods, Inc. Investor Presentation | February 2016 |10
Slide 11: New Platforms
New Platforms Hillshire™ Snacking Ball Park® Beef Jerky Grilled Chicken Bites Small Plates Tyson Foods, Inc. Investor Presentation | February 2016 |11
Slide 12: Targeting Best-in-Class Innovation Vitality
Targeting Best-in-Class Innovation Vitality Tyson Retail Brands 13-15% Hillshire Brands 11.9% 12.1% FY2014 FY2015 Goal % of sales dollars from products created in the previous three years Tyson Foods, Inc. Investor Presentation | February 2016 |12
Slide 13: Tyson Foods, Inc. Investor Presentation | February 2016 |13
Tyson Foods, Inc. Investor Presentation | February 2016 |13
Slide 14: Market Leadership
Market Leadership Tyson Foods produces approximately 1 out of every 5 pounds of chicken, beef and pork in the United States Tyson Foods Other Tyson Foods Tyson Foods 22% 25% 24% Other 17% 30% Other 47% Pilgrim’s Pride National Beef Smithfield 17% 10% JBS USA 26% 22% Hormel Cargill 8% JBS USA 19% 19%
Slide 15: FY15 $40.6 Billion in Adjusted Sales
FY15 $40.6 Billion in Adjusted $2.6 Billion in Sales* Operating Cash Flow Up 9% over FY14 $3.15 Adjusted EPS* 5.5% Total Company Up 7% over FY14 Adjusted Return on Sales* $2.25 Billion in Adjusted Operating Income* Up 37% over FY14 *Represents a non-GAAP financial measure. Adjusted sales, adjusted o
Slide 16: FY15 Adjusted Sales - $40.6 Billion
FY15 Adjusted Sales* – $40.6 Billion Other Other 2% 4% Pork Prepared International 11% Foods 13% 19% Consumer Food Products Beef Chicken Service 52% 41% 27% 31% Sales by Segment Sales by Distribution Channel *Represents a non-GAAP financial measure, which is explained and reconciled to a comparable
Slide 17: Tyson Foods FY15 International Sales
Tyson Foods FY15 International Sales China & Hong Kong Other 22% 31% Japan 15% Taiwan 5% Canada South Mexico 6% Korea 13% 8% FY15 International Sales $4.6 Billion* * Based on 52 weeks. Includes all exports and as well as in-country production in China and India. In-country production sales in Mexico
Slide 18: Tyson Foods FY15 International Sales
Tyson Foods FY15 International Sales Other China & 13% China & Vietnam Hong Kong Hong Kong Canada 4% 26% Other 27% 4% 41% Italy 6% Brazil 7% Taiwan 7% Japan 14% India 6% South Mexico Korea Mexico UAE 5% 13% 13% Angola 4% 2% Russia 2% Puerto Rico Taiwan 3% 3% FY15 International Chicken Sales* FY15 In
Slide 19: Tyson Foods FY15 International Sales
Tyson Foods FY15 International Sales Other 13% Other S. Korea 23% 6% Japan 35% China & H.K. Japan 4% Canada 9% 48% Puerto Rico Canada 6% 14% Mexico Mexico 23% 19% FY15 International Pork Sales* FY15 International Prepared Foods Sales* $938 Million $126 Million * Based on 52 weeks. Tyson Foods, Inc.
Slide 20: Adjusted EPS Growth
Adjusted EPS* Growth $3.85-3.95** $3.15 $2.94 $2.26 $1.97 FY12 FY13 FY14 FY15 FY16 proj. *Represents a non-GAAP financial measure. Adjusted EPS is explained and reconciled to a comparable GAAP measure in the Appendix. **Projected EPS guidance as of 02.05.16 Tyson Foods, Inc. Investor Presentation |
Slide 21: Tyson Foods Financial Trends
Tyson Foods Financial Trends Sales (Bn) EBITDA** (MM) $40.6* $37.3 * $34.4 $2,906 $33.1 $32.0 $1,818 $1,897 $1,767 $1,731 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 *Adjusted sales represents a non-GAAP financial measure, **Represents a non-GAAP financial measure. which is explained and recon
Slide 22: Net Debt/EBITDA
Net Debt/EBITDA* FY10-13 = ~1× FY 2014 Adjusted Pro Forma Basis = 3.0×** FY 2015 Adjusted Basis = 2.0x** *Net Debt and EBITDA are non-GAAP financial measures. EBITDA is explained and reconciled to a comparable GAAP measure in the Appendix. Net Debt to EBITDA represents the ratio of our debt, net of
Slide 23: FY2016 Outlook
FY2016 Outlook EPS of $3.85-3.95 Prepared Foods Segment margins near Represents approximately 22-25% growth over the low end of the 10-12% range FY15 adjusted EPS* Chicken Segment margins more than 11% Sales of ~$37B Includes impact of divestitures and decline in Pork Segment above its normalized ra
Slide 24: Synergies
Synergies FY15 – $322 million realized FY16 – expecting more than $500 million FY17 – expecting more than $700 million Synergy Categories: Prepared Foods Improvements Procurement Manufacturing & Logistics Organizational & Fiduciary Tyson Foods, Inc. Investor Presentation | February 2016 |24
Slide 25: Priorities for Cash
Priorities for Cash Growing our businesses organically through operational efficiency and capital expansion projects, along with investing in innovation and brand building Acquiring businesses that support our strategic objectives Returning cash to shareholders through share repurchases and di
Slide 26: Debt Maturity Profile
Debt Maturity Profile Debt Maturity Skyline as of 1.2.16 Fiscal Year Maturities ($ in millions) 1,750 1,500 Pre-Payable 1,250 1,000 750 Pre-Payable 500 250 0 '16 '17 '18 '19 '20 '21 '22 '23 '24 '33 '34 '44 TFI Bonds Hillshire Bonds Term Loans • Term loans are pre-payable at par • Excludes $123MM Tan
Slide 27: Why TSN?
Why TSN? Consistent growth Higher, more stable earnings over time Advantaged brands in advantaged categories Innovation and insights Synergies Depth and breadth of portfolio to reach consumers at all day parts, all meal occasions, at home and away from home Built for Growth Tyson Foods, Inc. Investo
Slide 28: Appendix
Appendix
Slide 29: EPS Reconciliation
EPS Reconciliation Unaudited 12 Months Ended October 3, 2015 September 27, 2014 September 28, 2013 September 29, 2012 EPS EPS EPS EPS Reported from Continuing Operations $ 2.95 $ 2.37 $ 2.31 $ 1.68 Less: Recognition of previously unrecognized tax benefit (0.06) (0.15) - - (0.02) - - - Insurance proc
Slide 30: EBITDA Reconciliations
EBITDA Reconciliations In millions except ratio data 12 Months Ended (b) Unaudited October 3, 2015 September 27, 2014 Net income $ 1,224 $ 856 Less: Interest income (9) (7) Add: Interest expense 293 132 Add: Income tax expense 697 396 Add: Depreciation 609 494 Add: Amortization (a) 92 26 EBITDA $ 2,
Slide 31: EBITDA Reconciliations
EBITDA Reconciliations Continued from previous page (a) Excludes the amortization of debt discount expense of $10 million for the twelve months ended October 3, 2015, and September 27, 2014, respectively, as it is included in Interest expense. (b) (b) Adjusted EBITDA for fiscal 2015 was based on a 5
Slide 32: EBITDA Reconciliations
EBITDA Reconciliations In millions except ratio data Unaudited 2013 2012 2011 Net income $ 778 $ 576 $ 733 Less: Interest income (7) (12) (11) Add: Interest expense 145 356 242 Add: Income tax expense (a) 411 351 341 Add: Depreciation 474 443 433 Add: Amortization (b) 17 17 29 EBITDA $ 1,818 $ 1,731
Slide 33: Sales Reconciliations
Sales Reconciliations In millions Unaudited Fiscal Year 2015 2014 Reported sales $ 41,373 $ 37,580 Less: Impact of additional week (a) (750) - Less: Hillshire Brands post-closing sales - (325) Adjusted sales $ 40,623 $ 37,255 (a) The estimated impact of the additional week in fiscal 2015 was calcula
Slide 34: Adjusted Sales, Adjusted Operating Income, Adjusted Operating Margin Reconciliations
Adjusted Sales, Adjusted Operating Income (Loss), Adjusted Operating Margin Reconciliations $ In millions Unaudited Adjusted Sales, Adjusted Operating Income (Loss) and Adjusted Operating Margin (for the 12 months ended October 3, 2015) Prepared Intersegment Chicken Beef Pork Foods Other Sales Total