Tyson Foods, Inc. · NYSE:TSN
Tyson Foods — Q4 2022 Earnings Presentation
29 slides from Tyson Foods's earnings presentation, Nov 14, 2022
Slide 1: 4Q Fiscal 2022 Supplemental Information
— 4Q Fiscal 2022 Supplemental Information November 14, 2022
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
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: Delivered record annual financial performance
Delivered record annual financial performance Delivered or exceeded nearly all financial guidance in record year for 1 Revenue, AOI, and EPS Leveraged diverse protein portfolio across multiple channels and brands 2 to serve an estimated market-leading 1/5th of US protein consumption Executed revenue
Slide 4: Strengthening our position as a global protein leader
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 competitiveness in member experie
Slide 5: Sales and earnings grow to deliver record performance in FY22
Sales and earnings grow to deliver record performance in FY22 FY2022 Guidance FY 22 & Q4 Performance Original FY22 vs. FY21 4Q22 vs. 4Q21 FY21 FY22 Indication Result Sales $47.0B $53.3B $49 – $51B Beat Sales1 13% 7% Volume (0.9)% (0.3)% 2 – 3% growth Missed Chicken AOI Margin2 0.2% 5.5% 5 – 7% Met A
Slide 6: Comparable Q4 volume figures are trending upward year-over-year
Comparable Q4 volume figures are trending upward year-over-year Positive momentum building as volume grew for all segments except Pork Volume1 (billion pounds) +0.3% Total Company +2.1% Chicken +1.1% Prepared Foods 6.88 7.02 3.14 3.17 0.84 0.85 4Q21 4Q22 4Q21 4Q22 4Q21 4Q22 +5.1% Beef Pork -1.1% Int
Slide 7: Outpacing the industry and our peers in retail consumption growth
Outpacing the industry and our peers in retail consumption growth Latest 13 Weeks Volume Sales % Change Among Top Branded Food Companies > $5B vs. YAG vs. 3YAG 18.0% 13.7% 10.3% 7.7% 8.7% 3.9% 2.0% 2.4% 1.3% 0.8% 0.5% -1.6% -2.7% -1.6% -3.6% -3.8% -3.8% -4.7% -5.0% -5.4% -7.0% -11.1% Total Core Bus.
Slide 8: Strength of our retail brands enables continued growth in dollar and pound share
Strength of our retail brands enables continued growth in both dollar and pound share Brand Strength Relative to Competition Tyson Core Business Lines Share Growth % Favorite Brand Among Category Buyers Brand Awareness Dollar Pound Frozen Nuggets 43% 9% +2.8 +2.6 Frozen Strips 35% 98% 7% Frozen Brea
Slide 9: Positive retail share trajectory continues, fueled by strong business fundamentals
Positive retail share trajectory continues, fueled by strong business fundamentals Tyson Core Business Lines Share Growth Pound Share Pt. Chg. vs. YAG, by Period Q3 Q4 1.3 Improved Fill Rate & 0.3 On-Shelf Availability -0.3 -0.8 -1.2 -1.4 Period Narrowing Price Gaps Ending 4/30 6/4 7/2 7/30 9/3 10/1
Slide 10: Outpacing foodservice broadline industry recovery, and growing share in Focus 6
Outpacing foodservice broadline industry recovery, and growing share in our Focus 6 categories Latest 52 Week Latest 13 Week Volume % Change vs. YAG Volume % Change vs. YAG Total Broadline Focus 6 Tyson Focus 6 Focus 6 Total Broadline Tyson Focus 6 Categories Categories 18.9% 15.6% 6.0% Share 10.7%
Slide 11: Becoming the most sought-after place to work
Becoming the most sought-after place to work through investments in Team Member Experience Focus Areas 1 2 3 Health, safety and wellbeing Total rewards and growth Culture & Digitalization Actions Expanded access to mental health Enhanced travel benefits to ensure Consolidating corporate campuses ser
Slide 12: The Formula to Feed the Future
The Formula to Feed the Future TYSON FOODS, INC. NOVEMBER 14, 2022 12
Slide 13: Productivity Program savings outperformed target in FY22
Productivity Program savings outperformed target in FY22 Accelerated program: Delivered over $700M in FY22 and Targeting $1B+ in productivity gains by end of FY23 $1,000M+ $700M+ FY22 FY23 Actions will lead to sustainable productivity savings in three key focus areas Operational & Functional Digital
Slide 14: Record Sales, AOI, & EPS supporting historically strong balance sheet
Record Sales, AOI, & EPS supporting historically strong balance sheet Fourth Quarter and FY22 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 ADJUSTED EPS1 (in millions of dollars) (in millions of dollars) (in dollars per share) $53,282 $4,414 $8.73 $4,288 $8.28 $47,049 +13% +3% +5% $12,811 $
Slide 15: Margin expansion in Chicken more than offset compression in Beef
Margin expansion in Chicken more than offset compression in Beef FY 2022 $ millions Highlights $5,809 -$5,586 • Volumes were relatively flat overcoming macroeconomic headwinds • Sales Price/mix increased primarily due to the current cost of goods environment and recovery of rapidly rising costs • CO
Slide 16: Volume and margins remain strong in Beef
Volume and margins remain strong in Beef Fourth Quarter and FY22 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 HIGHLIGHTS (in millions of dollars) (in millions of dollars) o 4Q22 sales volume increased driven by improved $3,240 operational performance $19,854 $17,999 o 4Q22 average sales pr
Slide 17: Pork remains challenged by hog supply and global headwinds
Pork remains challenged by hog supply and global headwinds Fourth Quarter and FY22 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 HIGHLIGHTS (in millions of dollars) (in millions of dollars) $6,277 $6,414 $328 o 4Q22 sales volume decreased due to limited hog supply and reduced export demand
Slide 18: Prepared Foods overcoming challenging macroenvironment
Prepared Foods overcoming challenging macroenvironment Fourth Quarter and FY22 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 HIGHLIGHTS (in millions of dollars) (in millions of dollars) o 4Q22 sales volume was relatively flat compared $9,689 to prior year and showing sequential improvement
Slide 19: Sequential operational improvement continues in Chicken
Sequential operational improvement continues in Chicken Fourth Quarter and FY22 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 HIGHLIGHTS (in millions of dollars) $16,961 (in millions of dollars) o 4Q22 sales volume increased due to improved domestic production partially offset by inventory
Slide 20: Investment in our business and return of cash to shareholders
Investment in our business and return of cash to shareholders supported by steady cash generation Leverage Ratio OPERATING CASH FLOW BUILD (Net Debt/Adj. EBITDA)1 (in billions of dollars) FINANCIAL 1.3x <2.0x STRENGTH $3.84 Manage our leverage ratio to be at or below our long-term target 4Q22 Target
Slide 21: FY 2023 Guidance
FY 2023 Guidance $55-57B +3-7% $300-400M Sales Range Sales Growth Productivity Savings ~$2.5B ~23% ~$320M <2.0x Capital Expenditures Tax Rate Net Interest Expense Net Debt-to-EBITDA TYSON FOODS, INC. NOVEMBER 14, 2022 21
Slide 22: Expect solid profitability in fiscal year 2023
Expect solid profitability in fiscal year 2023 Beef Pork Prepared Foods Chicken 5-7%* 2-4% 8-10% 6-8% AOI Margin AOI Margin AOI Margin AOI Margin *Margin expected to be at Challenges continue Momentum building Profitability turnaround or below the low end of the resulting in similar through the fisc
Slide 23: Q&A
Q&A Donnie King John R. Tyson Shane Miller Stewart Glendinning David Bray Amy Tu President & CEO EVP, CFO Group President, Group President, Group President, President, International Fresh Meats Prepared Foods Poultry & CAO
Slide 24: Appendix
Appendix
Slide 25: Sales improved in all segments and across all channels
Sales improved in all segments and across all channels FY 2022 $ millions Channel Highlights $365 -$1881 $53,282 • Retail sales improved by $1.4B, $137 $1,855 led by increases in Chicken up $1.1B and Prepared Foods up Retail $0.4B $3,228 Foodservice • Foodservice drove $2B in Retail increased sales,
Slide 26: EPS Reconciliations
EPS Reconciliations $ in millions, except per share data (Unaudited) Fourth Quarter Twelve Months Ended Pretax Impact EPS Impact Pretax Impact EPS Impact 2022 2021 2022 2021 2022 2021 2022 2021 Reported net income per share attributable to Tyson (GAAP EPS) $ 1.50 $ 3.71 $ 8.92 $ 8.34 Add: China plan
Slide 27: EBITDA Reconciliations
EBITDA Reconciliations $ in millions, except per share data (Unaudited) Twelve Months Ended October 1, 2022 October 2, 2021 Net Income $ 3,249 $ 3,060 Less: Interest income (17) (8) Add: Interest expense 365 428 Add: Income tax expense 900 981 Add: Depreciation 945 934 Add: Amortization 1 246 261 EB
Slide 28: Segment Operating Income Reconciliations
Segment Operating Income Reconciliations $ in millions (Unaudited) Adjusted Segment Operating Income (Loss) (for the fourth quarter ended October 1, 2022) Beef Pork Chicken Prepared Foods International/Other Total Reported operating income (loss) $ 375 $ (55) $ 340 $ 111 $ (5) $ 766 Less: Production
Slide 29: Segment Operating Income Reconciliations
Segment Operating Income Reconciliations $ in millions (Unaudited) Adjusted Segment Operating Income (for the fourth quarter ended October 2, 2021) Beef Pork Chicken Prepared Foods International/Other Total Reported operating income (loss) $ 1,147 $ 78 $ (136) $ 823 $ (3) $ 1,909 Less: Gain on sale