Pilgrim's Pride Corporation · NASDAQ:PPC
Pilgrim's Pride — Q2 2020 Earnings Presentation
24 slides from Pilgrim's Pride's earnings presentation, Jul 30, 2020
Slide 1: Financial Results for Second Quarter Ended June 28, 2020
Financial Results for Second Quarter Ended June 28, 2020 Pilgrim’s Pride Corporation (NASDAQ: PPC)
Slide 2: Cautionary Notes and Forward-Looking Statements
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 statements. Without
Slide 3: Pullet Placements Trending In-line With Expectations
Pullet Placements Trending In-line With Expectations 10,000 Intended Pullet Placements 9,000 8,000 7,000 6,000 5,000 4,000 3,000 Thousand Head 2,000 1,000 - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019 2020 5 Yr. Avg. . Trailing 8-Month placements 1.7% above year ago placements. Source: USDA
Slide 4: Hatching Layer Flock Consistent With Expected Growth
Hatching Layer Flock Consistent With Expected Growth Broiler Type Hatching Layers Eggs/100 64,000 1,950 1,900 62,000 1,850 60,000 1,800 58,000 1,750 Eggs 56,000 1,700 Head (000) Head 1,650 54,000 1,600 52,000 1,550 50,000 1,500 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Slide 5: Hatchery Utilization Reflected Industry Egg Set Reduction in April and May
Hatchery Utilization Reflected Industry Egg Set Reduction in April and May 94.0% 92.0% 90.0% % 88.0% 86.0% 84.0% 82.0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019 2020 5 Yr. Avg. Source: Agristats 5
Slide 6: Egg Sets in Q2 Down 1.8%; Hatchability Still Trending Slightly Below 2019 Levels
Egg Sets in Q2 Down 1.8%; Hatchability Still Trending Slightly Below 2019 Levels and Historical Chicken Egg Sets Chicken Hatchability by Week - USDA by Week - USDA 250,000 84.0% 240,000 83.0% 82.0% 230,000 81.0% 220,000 80.0% 210,000 % 79.0% 78.0% Thousands Thousands of Eggs 200,000 77.0% 190,000 76
Slide 7: Chick Placements Down 4.1% in Q2-20
Chick Placements Down 4.1% in Q2-20; Placements Have Returned to Similar 2019 Levels 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 2018 2019 2020 5 Yr. Avg. Source: USDA 7
Slide 8: Growth Remains Concentrated in Big Bird Categories
Growth Remains Concentrated in Big Bird Categories and Continued Reduction in Small Birds Head Processed by Size 100% 15.1% 15.6% 90% 18.3% 19.7% 21.4% 20.9% 21.2% 21.7% 23.3% 24.3% 80% 19.1% 19.3% 70% 19.4% 19.3% 20.9% 22.5% 23.6% 25.4% 26.2% 26.9% 60% 50% 42.9% 40.7% 35.5% 35.0% 40% 32.2% 31.2% 30
Slide 9: June Freezer Inventory In-line With Year Average
June Freezer Inventory In-line With 5 Year Average Total Chicken Inventories 1,100,000 1,000,000 900,000 800,000 LBS (000) 700,000 600,000 500,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2018 2019 2020 3 Yr. Avg. . Breast meat inventories have declined seasonally and remain lower than Q1. .
Slide 10: Value Cutout Rebounded and Now Tracking Slightly Below 5 Year Range
Cents/Lb 100.00 40.00 50.00 60.00 70.00 80.00 90.00 1/4 1/18 2/1 2/15 3/1 5 Year Range 5 Year 3/15 3/29 4/12 4/26 2018 5/10 ValueCutout 5/24 Cutout 6/7 2019 6/21 7/5 Slightly Below the5 Year Range Rebounded and Now Now Tracking and Rebounded 7/19 61.64 2020 8/2 8/16 8/30 5 Yr. Avg. 5 Yr. 9/13 9/27 S
Slide 11: Tenders Continue to Climb and Wings Remain Strong
Tenders Continue to Climb and Wings Remain Strong; BSB In-line With Seasonality while LQ Remains Weak USDA Boneless/Skinless Breast NE USDA Tenders NE 175.00 235.00 215.00 155.00 195.00 135.00 175.00 155.00 115.00 143.83 Cents/Lb 113.14 Cents/Lb 135.00 115.00 95.00 95.00 75.00 75.00 1/5 2/4 3/6 4/5
Slide 12: Small Bird WOG Prices Have Remained Relatively Flat
Cents/Lb. 100.0 110.0 120.0 40.0 50.0 60.0 70.0 80.0 90.0 1/3 1/17 1/31 Small BirdWOGPrices Remained Have RelativelyFlat 5 Year Range 5 Year 2/14 2/28 3/13 3/27 4/10 2017 4/24 5/8 WOG 2.5 EMI 2018 5/22 6/5 6/19 - 4.0 LBS 2019 7/3 After RecoveringAfter From April 7/17 76.5 7/31 2020 8/14 8/28 9/11 5
Slide 13: Corn Stocks Remain at High Levels
Corn Stocks Remain at High Levels . USDA lowered U.S. corn ending stocks by 675 million in July after lowering their production number for 2020, supplies remain ample . USDA reported that farmers intend to plant 92 million corn acres this year up over 2 million from last year’s planted acres Source:
Slide 14: Soybean Inventories Remain High
Soybean Inventories Remain High . USDA raised soybean ending stocks by 30 million bushels in July after raising both production and crush . USDA reported that farmers intend to plant 83.8 million acres up almost 7.8 million from last year’s planted acres Source: USDA 14
Slide 15: Second Quarter 2020 Financial Review
Second Quarter 2020 Financial Review . U.S.: Diversified portfolio and Key Customer strategy minimized channel Main Indicators ($M) Q2-20 Q2-19 demand disruption; MX: Weak macro, better than expected growing conditions, Net Revenue 2,824.0 2,843.1 weak Peso; UK/Europe: Legacy operations Gross Profit
Slide 16: Fiscal Year 2020 Capital Spending
Fiscal Year 2020 Capital Spending CapexCapex (US$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 exposure
Slide 17: Investor Relations Contact
Investor Relations Contact Investor Relations: Dunham Winoto Investor Relations E-mail: IRPPC@pilgrims.com Address: 1770 Promontory Circle Greeley, CO 80634 USA Website: www.pilgrims.com 17
Slide 18: Appendix
APPENDIX 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: Reconciliation of LTM EBITDA
Appendix: Reconciliation of LTM EBITDA The summary unaudited consolidated income statement data for the twelve months ended June 28, 2020 (the LTM Period) have been calculated by subtracting the applicable unaudited consolidated income statement data for the six months ended June 30, 2019 from the s
Slide 21: Appendix: EBITDA Margin Reconciliation
Appendix: EBITDA Margin Reconciliation EBITDA margins have been calculated by taking the relevant unaudited EBITDA figures, then dividing by Net Sales for the applicable period. PILGRIM'S PRIDE CORPORATION Reconciliation of EBITDA Margin (Unaudited) Three Months Ended Six Months Ended Three Months E
Slide 22: 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 23: 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) Three Months Ended Six Months Ended June 28, 2020 June 30, 2019 June 28, 2020 June 30
Slide 24: Appendix: Segment and Geographic Data
Appendix: Segment and Geographic Data PILGRIM'S PRIDE CORPORATION Supplementary Selected Segment and Geographic Data (Unaudited) Three Months Ended Six Months Ended June 28, 2020 June 30, 2019 June 28, 2020 June 30, 2019 (In thousands) Sources of net sales by geographic region of origin: US $ 1,798,