Pilgrim's Pride Corporation · NASDAQ:PPC
Pilgrim's Pride — BMO Capital Markets Agriculture, Protein & Fertilizer Conference 2010
35 slides from Pilgrim's Pride's conference presentation, May 19, 2010
Slide 1: Pilgrim's Pride Corporation
Pilgrim’s Pride Corporation BMO Capital Markets Agriculture, Protein & Fertilizer Conference May 19, 2010
Slide 2: Cautionary & Forward Looking Statements
Cautionary & Forward Looking Statements Statements contained in this presentation that stare our intentions, beliefs, espectations or predictions for the future, denoted should,” “expect,” “project,” “plan,” “imply,” “intend,” “foresee” and similar expressions, ae forward-looking statements that ref
Slide 3: Pilgrim's Pride at a Glance
Pilgrim’s Pride at a Glance (NYSE: PPC) © One of the largest chicken companies in the U.S. and Mexico e LTM as of March 28, 2010 — Net sales of $6.8 billion — 7.3 billion pounds produced ¢ 41,000 employees inthe U.S. and Mexico. e Major facilities in 12 states e Exports to 80+ countries worldwide ¢
Slide 4: nan
nan 1 4,400 growers 34 hatcheries 26 feed mills Processing capacity of 34.5 Producing 114.5 million RTC million chickens/week pounds/week 8 case ready plants 4 7 fast food plants 3 complexes in Mexico
Slide 5: Poultry Industry Ranking
Poultry Industry Ranking U.S. Chicken Industry Leaders Market Share by Production Mountaire Farms, 4.4% Other, 33.6% Wayne Farms, 4.5% Koch Foods, 4.5% Tyson Foods, 203% Pilgrim's Pride , 18.7% 5 Source: WATT Poultry USA, February 2010
Slide 6: The New Pilgrim's Pride
The New Pilgrim’s Pride ¢ Today Pilgrim’s Pride has: — Anew management team — Amore balanced product mix — Growing volume in our core retail and foodservice businesses — Improved operational efficiency — Lower SG&A as a result of reduced headcount, outside services and other administrative expenses
Slide 7: Business Strategy
Business Strategy ¢ Become a market-driven company — The market will dictate what PPC does — operations will respond to market needs — Optimize commodity chicken production — Core retail and foodservice customer demand drives supply and production planning — Supply chain will optimize production — O
Slide 8: Sales & Marketing Overview
Sales & Marketing Overview
Slide 9: Sales & Marketing
Sales & Marketing e Strengthened sales and management team — Established P&L accountability within the sales and marketing organization by lines of business e Supply chain — Fully integrated business planning and execution ¢ Focused on selling the whole bird ° Diversifying our export business ¢ Impr
Slide 10: Sales Objectives
Sales Objectives ¢ Recapture and grow volume in further processed corporate and industrial sales ¢ Develop commodity sales as regular business vs. spot sales ¢ Grow volume and share in case ready © Grow volume and share in further-processed retail ¢ Optimize presence in fresh foodservice 10
Slide 11: Geographic Sales Mix
Geographic Sales Mix Net Sales LTM Ending 3/28/10 $6,758.6mm 4) 2) See Appandicfor reconcation of LTA netcales figures aL
Slide 12: U.S. Chicken Sales by Market Channel
| Foodservice: U.S. Chicken Sales U.S. Chicken Sales Quarter Ending 3/28/09 Quarter Ending 3/28/10 $1,397.14 mm $1,277.4 mm Diversified End Markets (1) Diversified End Markets) 1.2 ()_ Percentages aredon salasby market channelfor U.S. chctan Forthispurpose, US. chicken sles exclude ust Fioand render
Slide 13: Customer Needs & Expectations
Slide 14: Operations Overview
Operations Overview
Slide 15: Prepared Foods
PREPARED FOODS Facilities Q Meh isseone | 9.Cook Locations (C) Waco, Texas (C) ‘Mt, Pleasant, Texas (2F/C) Dallos, Texos (F/C) Nacogdoches, Texas (F/C) Boaz, Alabama (F/C) Chattanooga, Tennessee (F/C) i Russellville, Alabama (F) Ce) Elberton, Georgia (C) ‘Athens, Georgio (F) ‘4 Canton, Georgia () ‘S
Slide 16: "March Madness" Plant Visits
16 “March Madness” Plant Senior management spent the entire month of March and first week of April visiting all PPC processing and prepared food plants Visits included facility tours and in-depth meetings with managers and employees to review cost, productivity, mix value, capital spending, safety a
Slide 17: Re-Opening Idled Plants
Re-Opening Idled Plants ¢ Economy is getting stronger, fundamentals are improving and consumer demand is increasing e PPCwill match its production to forecasted demand ¢ We plan to re-open three idled plants within the next two years — Douglas, Ga., will re-open by January 2011 — Asecond plant will
Slide 18: Industry Update
Industry Update
Slide 19: Broiler Production Update
Broiler Production Update 38 = 45% & ‘N Z a7 ==5 7 5 aaa) || 0 c z = 38) wot % l- 5 35 23% | 25% 35 4 ; . 4 15% 3 = 2 3 \ |e ° = 34 05% & 3 \ t s = + 05% 6 s \ 1 = = 32 WF 15% § \ s 31 ain 25% 2 30 4 35% | 38% 29 + + + + + + + + + 45% y Mb S 2 $ 2 g s § S S s iS S ef FF ef In 2009, U.S. broiler prod
Slide 20: USDA Breeder Placements
USDA Breeder Placements Eggs should be in short supply through most of 2010, reducing opportunity to make major changes in production 8,500,000 8,000,000 7,500,000 7,000,000 - 6,500,000 6,000,000 T T T T T Oct Nov Dec Jan Feb Mar “08/09 -9-09/10 29 Source Aeris
Slide 21: Cold Storage Inventories
Cold Storage Inventories 400 Jan | Feb | Mar| Apr | May) Jun | Jul | Aug Sep |==+2009 690 | 643 | 632 | 654 G38 649 «G76 G41 «629 200 627 | 625 | 618 | 619 598 G15 G17 607 616 ——High'04'09| 919 | 972 | 364 | 834 | 767 773 733. 749 774| 802 875 | 924 Low '04-'09 531 | 539 | 595 | 600 | 599| 622 G39 6
Slide 22: Export Update
22 Ongoingissues: Export Update December 2009 — Russia announced ban on U.S. chicken due to chlorination issues. Negotiations toward a resolution continue. February 2010 — China announced duties ranging from 43.1% to 105.4% on U.S. chicken imports after alleging that U.S. producers sold product at p
Slide 23: Pricing Overview: Breast, Leg Quarters, Wings
23 G.A., Leg Otr., Wings Pricing Overview HIGH EES SPSS PCE PH PF rv Peo Vos cers —e-G.A Dock —e-Ley Qtr. = ——Wings ee B/LBrst Source: UrnerBarry through May 17, 2010, 0.4 0.2 Boneless Brst
Slide 24: Pricing Trends — Feed Ingredients
Pricing Trends — Feed Ingredients SoybeanMeal — - - fi a [+ $375 Corn USDA reports show crop plantingison track this season which has helped keep feed prices down. corn (dollar/ton} soybean meal 2 2001 2002 2003 «2004 2005 2006 2007 2008 2me 2010 24 Source: Chicago Board of Trade updated through May
Slide 25: Financial Overview
Financial Overview
Slide 26: First Quarter of Fiscal 2010
First Quarter of Fiscal 2010 ¢ Loss of $45.5 million vs. loss of $59 million a year ago ¢ Several factors contributed to loss: — Restructuring and reorganization charges of $56 million — Loss of $11 million on grain hedges, of which $6 million was mark-to- market — Delay in bringing on further-proce
Slide 27: Opportunities in Pricing & Mix
a7 Opportunities in Pricing & Mix Need fundamental improvement in both absolute pricing and mix value. Below-market, fixed-price contracts Over-represented at the lower end of the value chain in terms of mix In retail, too much low-margin deli WOG and raw IQF business and not enough case-ready and f
Slide 28: Financial Improvement
Financial Improvement Gross Margin as % of Sales 79% 6 80% tet 8% 60% ae 2005 2006 2007 2008 2009 LTM Ending Mar 2010 28
Slide 29: PPC-JBS Integration Update
PPC-JBS Integration Update = Most corporate functions have been relocated to JBS USA’s headquarters in Colorado — PPC headquarters office in East Texas to close June 4 — Satellite corporate office in Atlanta to close by July — 450 corporate positions have been eliminated this year = Significant cost
Slide 30: Positioned for Profitable Growth
Positioned for Profitable Growth e Experienced leadership team with track record of success ¢ Broad customer base and diverse product lines ¢ Strong relationships with key customers ¢ Strong foodservice brand (Pierce) e National distribution system - retail and foodservice ¢ Continue to focus on imp
Slide 31: Reconciliation of LTM Net Sales
Reconciliation of LTM Net Sales Ending March 2010 (Sinmitiionsy Quarterend = Quarterend = Quarterend Quarter end LIM end Jun 2009 Sep 2009 Dec 2009* Mar 2010 Mar 2010 Net Sales us. $1638 $ 16121 $ 14667 $1,4956 $6,2182 Mexico $ 130 $ 140 $ 130 $ 1473 $ 5003 Total Net Sales $4768 $1,7361 $ 16027 $1,6
Slide 32: Foodservice
Foodservice 20.56 Foodservice BLT U.S. Chicken Sales Volumes U.S. Chicken Sales Volumes Quarter Ending 3/28/09 Quarter Ending 3/28/10 1,576.4 mm 1,390.6 mm Diversified End Markets (1) Diversified End Markets) 33.) Petcentagesbaredon salasby market channelfor US. chctan Forthispurpose, US. chicken le
Slide 33: Reconciliation of Adjusted LTM EBITDAR Ending Mar 2010
Reconciliation of Adjusted LTM EBITDAR Ending Mar 2010 Gin mitins) QuarterEnd —Quarterend = QuarterEnd —QuarterEnd —LTMEnding Jun 2008 Sep2009 Dec2009" __Mar2010___Mar 2010 Net (Loss) Income fram Continuing Operations $ 93,239 $ 82724 $ 33613 $ (45547) $ 124,029 Add: Income Tax Expense (benefit) 555
Slide 34: Reconciliation of Adjusted LTM EBITDAR Ending Mar 2009
Reconciliation of Adjusted LTM EBITDAR Ending Mar 2009 Bn oon QuarterEnd —QuarterEnd = QuarterEnd Quarter End LIM Ending Jun 2008 Sep 2008 Dec 2008 Mar 2003 Mar 2009 Net (Loss) Income fram Continuing Operations S as3aay) $ (799,161) § (229,367) § (58,765) $1,135,637) Add: Income Tax Expense (benefit
Slide 35: Capital Structure
Capital Structure ¢ Exit credit facility of $1.75 billion — Revolving loan of $600 million — Term loan A commitment of $375 million; 3-year maturity — Term loan B commitment of $775 million; 5-year maturity ¢ PPC drew down approximately $1.25 billion when we emerged from bankruptcy ¢ Debt at the end
Pilgrims Pride — BMO Capital Markets Agriculture, Protein & Fertilizer Conference 2010 on 6ix