Pilgrim's Pride Corporation · NASDAQ:PPC
Pilgrim's Pride — Q1 2022 Earnings Presentation
25 slides from Pilgrim's Pride's earnings presentation, Apr 28, 2022
Slide 1: Financial Results for First Quarter Ended March 27, 2022
Pilgrim’s Pride Corporation (NASDAQ: PPC) Financial Results for First Quarter Ended March 27, 2022
Slide 2: Cautionary Notes and Forward-Looking Statements
Source: USDA Cautionary Notes and Forward-Looking Statements ◼ Statements contained in this press release that state the intentions, plans, hopes, beliefs, anticipations, expectations or predictions of the future of Pilgrim’s Pride Corporation and its management are considered forward-looking statem
Slide 3: Pullet Placements Up 4.5% Y/Y in Q1 2022
- 2,000 4,000 6,000 8,000 10,000 12,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Th o u sa n d H e a d 2021 2022 5 Yr. Avg. ▪ Trailing 8-Month placements up 5.2% vs. year ago. ▪ No major capacity changes expected in 2022. Pullet Placements Up 4.5% Y/Y in Q1 2022 Source: USDA Intended Pullet P
Slide 4: Steady Broiler Flock Growth in Q1; Eggs/100 Up Relative to Q1-21
1,500 1,600 1,700 1,800 1,900 2,000 2,100 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec E g g s Eggs/100 2021 2021 5 Yr. Avg. Source: USDA ▪ Broiler layer flock up 0.6% YoY in Q1-22. ▪ Eggs/100 up 4.0% YoY in Q1-22. ▪ Egg production available to set in Q1-22 increased relative to Q1-21. Steady Bro
Slide 5: Hatchery Utilization Slightly Above Historical Average For First Two Months of 2022
5 Hatchery Utilization Slightly Above Historical Average For First Two Months of 2022 Source: Agristats 75.0% 80.0% 85.0% 90.0% 95.0% 100.0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec % Hatchery Utilization 2021 2022 4 Yr. Avg. - Excl 2020
Slide 6: Egg Sets Above Q1-21 Levels by 1.0%; Hatchability Below Year Ago Levels
Egg Sets Above Q1-21 Levels by 1.0%; Hatchability Below Year Ago Levels Source: USDA 6 200,000 205,000 210,000 215,000 220,000 225,000 230,000 235,000 240,000 245,000 Th o u sa n d s o f E g g s Chicken Egg Sets by Week - USDA 5 Year Range 2020 2021 2022 5 Yr. Avg. 74.0% 75.0% 76.0% 77.0% 78.0% 79.0
Slide 7: Average Weekly Broiler Placements in Q1-22 Down 0.4% YoY
Source: USDA 7 Average Weekly Broiler Placements in Q1-22 Down 0.4% YoY as Hatchability Has Performed Poorly 160,000 165,000 170,000 175,000 180,000 185,000 190,000 195,000 H e a d ( 0 0 0 ) Chicken Broiler Placed by Week- USDA 5 Year Range 2020 2021 2022 5 Yr. Avg.
Slide 8: Industry Average Liveweights Climbing in Early 2022
Source: USDA 8 Industry Average Liveweights Climbing in Early 2022; Medium Head Counts Increasing in Share 25.5% 25.3% 24.8% 22.7% 21.8% 20.9% 19.7% 19.7% 32.2% 31.2% 30.4% 30.2% 28.7% 27.4% 26.2% 26.5% 20.9% 22.5% 23.6% 25.4% 26.2% 27.6% 28.4% 28.9% 21.4% 20.9% 21.2% 21.7% 23.3% 24.1% 25.7% 24.8% 2
Slide 9: Industry Cold Storage Supplies Remain Low Relative to Historical Norms
Source: USDA ▪ Inventories ended March 6.6% below the 5-year March average. ▪ Breast meat inventories almost 18% below March 2021. ▪ Wings inventories have returned to historical norms. ▪ Drums, Legs, and Thigh Meat inventory all down YoY, while LQ inventories climbed in Q1. ▪ LQ inventories impacte
Slide 10: Tight Protein Supply and Sustained Demand Leading to New Cutout Highs in Q1-22
Source: PPC, EMI 10 134 50.00 60.00 70.00 80.00 90.00 100.00 110.00 120.00 130.00 140.00 1 /7 1 /2 1 2 /4 2 /1 8 3 /4 3 /1 8 4 /1 4 /1 5 4 /2 9 5 /1 3 5 /2 7 6 /1 0 6 /2 4 7 /8 7 /2 2 8 /5 8 /1 9 9 /2 9 /1 6 9 /3 0 1 0 /1 4 1 0 /2 8 1 1 /1 1 1 1 /2 5 1 2 /9 1 2 /2 3 C e n ts /L b Cutout Value 5 Year
Slide 11: BSB and Tenders Pacing Above Historical Ranges; Wings Have Slumped
Source: USDA 11 BSB and Tenders Pacing Above Historical Ranges; LQ Pricing Steady While Wings Have Slumped 296.8 75 125 175 225 275 325 1 /7 2 /6 3 /8 4 /7 5 /7 6 /6 7 /6 8 /5 9 /4 1 0 /4 1 1 /3 1 2 /3 C e n ts /L b USDA Boneless/Skinless Breast NE 5 Year Range 2020 2021 2022 5 Year Average 210.3 12
Slide 12: WOG Prices Continue to Climb to New Highs As Supplies Remain Tight
12 WOG Prices Continue to Climb to New Highs As Supplies Remain Tight Source: EMI 149.2 60.0 70.0 80.0 90.0 100.0 110.0 120.0 130.0 140.0 150.0 160.0 1 /7 1 /2 8 2 /1 8 3 /1 1 4 /1 4 /2 2 5 /1 3 6 /3 6 /2 4 7 /1 5 8 /5 8 /2 6 9 /1 6 1 0 /7 1 0 /2 8 1 1 /1 8 1 2 /9 1 2 /3 0 C e n ts /L b . EMI WOG 2.
Slide 13: Corn Stocks Set to Increase
Corn Stocks Set to Increase 13 ▪ US corn stocks are set to increase from 1.2B bushels last year to 1.44B bushels this year on higher production. Conflict in Ukraine raises risks for higher US corn exports in second half of crop year, potentially lower stocks ▪ High fertilizer prices lower expected c
Slide 14: Soybean Stocks Remain Steady
Soybean Stocks Remain Steady 14 ▪ US soybean stocks expected to be flat YoY with smaller South American crops bringing export demand to US in last half of crop year ▪ 2022/23 soybean stocks should build in US and globally with big US soybean acres and rebound in South American soybean yields Source:
Slide 15: First Quarter 2022 Financial Review
First Quarter 2022 Financial Review 15 ▪ U.S.: Cutout significantly higher than prior year; YOY growth in Foodservice and continued strength in Retail (increase vs. 2019 levels); inflation headwinds; labor tightness impacting mix; Mexico: Strong relative performance continues on balanced supply/dema
Slide 16: Fiscal Year 2022 Capital Spending
Fiscal Year 2022 Capital Spending 16Source: PPC ▪ Strong Free Cash Flow generation has enabled us to direct more capital spending towards identified projects with rapid payback and structural improvements. ▪ New strategic and automation projects will support Key Customers’ growth and emphasize our f
Slide 17: Appendix
pilgrims APPENDIX Source: PPC a7
Slide 18: Appendix: Reconciliation of Adjusted EBITDA
18Source: PPC Appendix: Reconciliation of Adjusted EBITDA “EBITDA” is defined as the sum of net income 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 a
Slide 19: Appendix: Reconciliation of Adjusted EBITDA
19Source: PPC Appendix: Reconciliation of Adjusted EBITDA PILGRIM'S PRIDE CORPORATION Reconciliation of Adjusted EBITDA (Unaudited) Three Months Ended March 27, 2022 March 28, 2021 (In thousands) Net income $ 280,560 $ 100,468 Add: Interest expense, net(a) 35,022 27,968 Income tax expense 75,219 35,
Slide 20: Appendix: Reconciliation of LTM Adjusted EBITDA
20Source: PPC Appendix: Reconciliation of LTM Adjusted EBITDA PILGRIM'S PRIDE CORPORATION Reconciliation of LTM Adjusted EBITDA (Unaudited) Three Months Ended LTM Ended June 27, 2021 September 26, 2021 December 26, 2021 March 27, 2022 March 27, 2022 (In thousands) Net income (loss) $ (166,503) $ 60,
Slide 21: Appendix: Reconciliation of EBITDA Margin
21Source: PPC Appendix: Reconciliation of EBITDA Margin PILGRIM'S PRIDE CORPORATION Reconciliation of EBITDA Margin (Unaudited) Three Months Ended Three Months Ended March 27, 2022 March 28, 2021 March 27, 2022 March 28, 2021 (In thousands) Net income $ 280,560 $ 100,468 6.62 % 3.07 % Add: Interest
Slide 22: Appendix: Reconciliation of Adjusted EBITDA by Segment
22Source: PPC Appendix: Reconciliation of Adjusted EBITDA by Segment PILGRIM'S PRIDE CORPORATION Reconciliation of Adjusted EBITDA (Unaudited) Three Months Ended Three Months Ended March 27, 2022 March 28, 2021 U.S. U.K. & Europe Mexico Total U.S. U.K. & Europe Mexico Total (In thousands) (In thousa
Slide 23: Appendix: Reconciliation of GAAP EPS to Adjusted EPS
23Source: PPC Appendix: Reconciliation of GAAP EPS to Adjusted EPS PILGRIM'S PRIDE CORPORATION Reconciliation of Adjusted Net Income (Unaudited) Three Months Ended March 27, 2022 March 28, 2021 (In thousands, except per share data) Net income attributable to Pilgrim's $ 280,438 $ 100,208 Add: Foreig
Slide 24: Appendix: Reconciliation of GAAP EPS to Adjusted EPS
24Source: PPC Appendix: Reconciliation of GAAP EPS to Adjusted EPS Adjusted EPS is calculated by dividing the adjusted net income attributable to Pilgrim's stockholders by the weighted average number of diluted shares. Management believes that Adjusted EPS provides useful supplemental information ab
Slide 25: Appendix: Supplementary Selected Segment and Geographic Data
25Source: PPC Appendix: Supplementary Selected Segment and Geographic Data PILGRIM'S PRIDE CORPORATION Supplementary Selected Segment and Geographic Data (Unaudited) Three Months Ended March 27, 2022 March 28, 2021 (In thousands) Sources of net sales by geographic region of origin: U.S. $ 2,581,208