Pilgrim's Pride Corporation · NASDAQ:PPC
Pilgrim's Pride — Q3 2018 Earnings Presentation
23 slides from Pilgrim's Pride's earnings presentation, Nov 1, 2018
Slide 1: Financial Results for Third Quarter Ended Sep 30, 2018
Financial Results for Third Quarter Ended Sep 30, 2018 Pilgrim’s Pride Corporation (NASDAQ: PPC)
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: 2018 Pullet Placements Up 1.6% YTD
2018 Pullet Placements Up 1.6% YTD Intended Pullet Placements 9,000 8,500 8,000 7,500 7,000 6,500 Thousand Head Thousand 6,000 5,500 5,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2017 2018 5 year avg. Continued Y/Y increases in pullet placements to support a less productive flock and new p
Slide 4: Breeders Declining as Egg Production Has Marginally Improved
Breeders Declining as Egg Production Has Marginally Improved Broiler Type Hatching Layers Egg Production per 100 Layers 60,000 1,950 59,000 1,900 58,000 57,000 1,850 56,000 1,800 55,000 1,750 54,000 Eggs 1,700 ThousandHead 53,000 1,650 52,000 51,000 1,600 50,000 1,550 Jan Feb Mar Apr May Jun Jul Aug
Slide 5: Hatchery Utilization Remains Elevated
Hatchery Utilization Remains Elevated Hatchery Utilization 96.00% 94.00% 92.00% % 90.00% 88.00% 86.00% 84.00% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2016 2017 2018 5 year avg. Source: Agristats 555
Slide 6: Egg Sets Growth Moderating with Q3 +0.5% Y/Y
Egg Sets Growth Moderating with Q3 +0.5% Y/Y; Hatchability Improving but Remains Challenged Chicken Egg Sets Chicken Hatchability by Week - USDA by Week - USDA 240,000 85.00% 84.00% 230,000 83.00% 220,000 82.00% 210,000 % 81.00% 200,000 80.00% 190,000 ThousandsEggs of 79.00% 180,000 78.00% 170,000 7
Slide 7: 2018 YTD Chick Placements Up 1.2%
2018 YTD Chick Placements Up 1.2% Chicken Broiler Placed by Week- USDA 195,000 190,000 185,000 180,000 175,000 Head (000) 170,000 165,000 160,000 5 Year Range 2016 2017 2018 5 Yr. Avg Source: USDA 777
Slide 8: Tray Pack Increasing Share of Total Heads, Small Birds Declining
Tray Pack Increasing Share of Total Heads, Small Birds Continue Declining Head Processed by Size 100% 15.1% 15.6% 90% 18.3% 19.7% 21.4% 20.9% 21.2% 21.6% 80% 19.1% 19.3% 70% 19.4% 19.3% 20.9% 22.5% 23.6% 25.3% 60% 50% 42.9% 40.7% 35.5% 35.0% 40% 32.2% 31.2% 30.4% 30.2% 30% 20% 24.4% 26.9% 26.1% 25.5
Slide 9: Cold Storage Inventories Increase
Cold Storage Inventories Increase Continue to be Driven Primarily by “Other” Total Chicken Inventories 1,000,000 950,000 900,000 850,000 800,000 750,000 LBS (000) LBS 700,000 650,000 600,000 550,000 500,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2017 2018 5 Year Average “Other” category a
Slide 10: 2018 Pricing Stabilizing After a Counter Seasonal Summer
2018 Pricing Stabilizing After a Counter Seasonal Summer Cutout Value 110.00 100.00 90.00 80.00 Cents/Lb 70.00 60.00 57.27 50.00 1/6 2/3 3/3 6/9 7/7 8/4 9/1 1/20 2/17 3/17 3/31 4/14 4/28 5/12 5/26 6/23 7/21 8/18 9/15 9/29 12/8 10/13 10/27 11/10 11/24 12/22 5 Year Range 2016 2017 2018 5 Year Avg Sour
Slide 11: Boneless Breast Weak but Stabilizing, LQ and Tenders Steady, Wings Higher
Boneless Breast Weak but Stabilizing, LQ and Tenders Steady, Wings Higher USDAUSDA Boneless/Skinless Boneless/Skinless Breast Breast NE NE USDAUSDA Tenders Tenders NE NE 215.00 255.00 195.00 235.00 215.00 175.00 195.00 155.00 175.00 Cents/Lb 135.00 155.00 Cents/Lb 135.00 115.00 125.82 115.00 95.00 9
Slide 12: Small Birds Moderated but Tracking Well to 2017
Small Birds Moderated but Tracking Well to 2017 EMI WOG 2.5-4.0 LBS 120 110 100 90 Cents/Lb. 80 82.99 70 60 1/5 2/2 3/2 6/8 7/6 8/3 1/19 2/16 3/16 3/30 4/13 4/27 5/11 5/25 6/22 7/20 8/17 8/31 9/14 9/28 11/9 12/7 10/12 10/26 11/23 12/21 5 Year Range 2016 2017 2018 5 Year Average Source: EMI 121212
Slide 13: Corn Stocks to Decrease from Record Levels
Corn Stocks to Decrease from Record Levels Global Corn Stocks Global Corn Stocks/Use Excluding China Excluding China 16.0% (Million Metric Tons) 15.3% 14.9% 15.0% 140 14.4% 14.4% 127.1 14.1% 14.0% 130 13.7% 118.7 14.0% 120 109.4 13.0% 12.6% 110 103.2 100.9 100 94.1 92.8 93.7 89.9 12.0% 11.7% 11.8% 9
Slide 14: Global Soybean Inventories Projected to Grow
Global Soybean Inventories Projected to Grow Global Soybean Stocks Global Soybean Stocks/Use (Million Metric Tons) 120 110.0 35.0% 100 96.7 96.7 33.0% 31.2% 31.0% 29.4% 28.7% 78.5 80 77.5 29.0% 27.6% 69.9 27.0% 25.7% 62.7 25.0% 25.0% 59.5 61.8 60 57.4 25.0% 52.9 53.4 23.0% 22.4% 44.0 23.0% 22.0% 20.
Slide 15: Third Quarter 2018 Financial Review
Third Quarter 2018 Financial Review US non-commodity remains relatively Main Indicators ($M)** Q3-18 Q3-17 better vs commodity, MX pricing pressured by supply increase in Net Revenue 2,697.6 2,793.9 response to strong 1H environment, Gross Profit 169.7 478.6 UK/Europe continuing to improve. SG&A 8
Slide 16: Third Quarter 2018 Capital Spending
Third Quarter 2018 Capital Spending CapexCapex (US$M) (US$M) 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 expos
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 171717
Slide 18: Appendix
APPENDIX LE All about great taste. 18
Slide 19: Appendix: EBITDA Reconciliation
Appendix: EBITDA Reconciliation “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 indicative o
Slide 20: Appendix: EBITDA Margin Reconciliation
Appendix: EBITDA Margin Reconciliation EBITDA margins have been calculated by taking the relevant unaudited EBITDA figures, then dividing by Net Revenue for the applicable period. PILGRIM'S PRIDE CORPORATION Reconciliation of EBITDA Margin (Unaudited) Thirteen Weeks Ended Thirty-Nine Weeks Ended Thi
Slide 21: Appendix: Reconciliation of Adjusted Net Income
Appendix: Reconciliation of Adjusted Net Income 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: PILGRIM'S PRIDE CORPORATION Rec
Slide 22: Appendix: Adjusted EPS Bridge
Appendix: Adjusted EPS Bridge A reconciliation of GAAP earnings per share (EPS) to adjusted earnings per share (EPS) is as follows: PILGRIM'S PRIDE CORPORATION Reconciliation of GAAP EPS to Adjusted EPS (Unaudited) Thirteen Weeks Ended Thirty-Nine Weeks Ended September 30, September 24, September 30
Slide 23: Appendix: Segment and Geographic Data
Appendix: Segment and Geographic Data PILGRIM'S PRIDE CORPORATION Supplementary Selected Segment and Geographic Data (Unaudited) Thirteen Weeks Ended Thirty-Nine Weeks Ended September 30, September 24, September 30, September 24, 2018 2017 2018 2017 (In thousands) Sources of net sales by country of