Slide 1: Pilgrim's Pride Corporation Financial Results for Second Quarter Ended June 29, 2014
1 Pilgrim’s Pride Corporation Financial Results for Second Quarter Ended June 29, 2014
Slide 2: Forward-Looking Statements
2 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” and similar expressions, are forward-looking sta
Slide 3: Egg Sets Affected by Old Breeder Flock
3 Egg Sets Affected by Old Breeder Flock Source: USDA-WASDE 204,579 186,077 200,272 206,667 203,163 170,000 175,000 180,000 185,000 190,000 195,000 200,000 205,000 210,000 215,000 1/ 4 1/ 18 2/ 1 2/ 15 3/ 1 3/ 15 3/ 29 4/ 12 4/ 26 5/ 10 5/ 24 6/ 7 6/ 21 7/ 5 7/ 19 8/ 2 8/ 16 8/ 30 9/ 13 9/ 27 10 /1
Slide 4: Hatching Layers up 1.5% from 2013; Egg Production Down
4 Source: USDA-WASDE Hatching Layers up 1.5% from 2013; Egg Production Down Hatching layers in June are up 1.5% from 2013 while egg production was down 1.9%. June placements were up 1% and YTD placements are up 2.5%
Slide 5: Chicken Inventories 18% below 2013
5 Chicken Inventories 18% below 2013 Source: USDA-WASDE Overall inventories are well below 2013 levels with significant declines in wings and leg quarters. Less than one week’s worth of industry production in cold storage is typically indicative of stronger chicken market conditions.
Slide 6: Exports Continue Consistent Growth Trend
6 Exports Continue Consistent Growth Trend Source: USDA-WASDE 2014 exports are expected to continue their climb into 2015, with record levels anticipated in both 2014 and 2015.
Slide 7: USDA Chicken Prices
7 USDA Chicken Prices Source: USDA-WASDE 203.55 125.41124.40 202.02 195.75 110.00 120.00 130.00 140.00 150.00 160.00 170.00 180.00 190.00 200.00 210.00 1/ 5 1/ 19 2/ 2 2/ 16 3/ 2 3/ 16 3/ 30 4/ 13 4/ 27 5/ 11 5/ 25 6/ 8 6/ 22 7/ 6 7/ 20 8/ 3 8/ 17 8/ 31 9/ 14 9/ 28 10 /1 2 10 /2 6 11 /9 11 /2 3 12 /
Slide 8: Implied Chicken Cutout
Implied Chicken Cutout Chicken cutout showing surprising strength during what is normally a seasonally weak period in June. Tenders and breast meat both defying normal seasonal patterns. 8 Source: USDA
Slide 9: Competing Proteins Continue to Support Chicken
Competing Proteins Continue to Support Chicken 100.00 200.00 300.00 400.00 500.00 600.00 700.00 1/ 1/20 13 2/ 1/20 13 3/ 1/20 13 4/ 1/20 13 5/ 1/20 13 6/ 1/20 13 7/ 1/20 13 8/ 1/20 13 9/ 1/20 13 10 /1/2 01 3 11 /1/2 01 3 12 /1/2 01 3 1/ 1/20 14 2/ 1/20 14 3/ 1/20 14 4/ 1/20 14 5/ 1/20 14 6/ 1/20 14
Slide 10: Corn Conditions Remain Historically High
Corn Conditions Remain Historically High Source: USDA 10
Slide 11: Corn Prices Continue to Decline
4.980 3.420 7.620 4.050 5.900 8.280 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 1/5 1/1 9 2/2 2/1 6 3/2 3/1 6 3/3 0 4/1 3 4/2 7 5/1 1 5/2 5 6/8 6/2 2 7/6 7/2 0 8/3 8/1 7 8/3 1 9/1 4 9/2 8 10 /12 10 /26 11 /9 11 /23 12 /7 12 /21 US D / BU 2014 2013 2012 '09-'13 Avg CME '14/15 USDA Omaha Corn Corn Prices Continue
Slide 12: Second Quarter 2014 Financial Results
Second Quarter 2014 Financial Results 12 Source: PPC • Strong Quarter in US and in Mexico: Net Revenue in line with Q2 2013 Live Cost below Q2 2013, with lower feed ingredient prices driving the variance SG&A higher than Q2 2013, inclusive of higher performance based bonus accrual EBITDA 28%
Slide 13: Second Quarter 2014 Liquidity
13 Second Quarter 2014 Liquidity We intend to use cash on hand to finance the recently announced acquisition of a Mexican business. We continually evaluate the best options in regards to our 7.875% unsecured bonds. Sources of Liquidity Facility Amount Amount Outstanding Amount Available 2014 Q3 2013
Slide 14: Second Quarter 2014 Capital Spending
14 Second Quarter 2014 Capital Spending Capex (US$MM) Capex run rate higher than anticipated due to concentration of significant projects during the quarter. Commitment to funding projects with a rapid payback may result in exceeding initial estimates of $150M for fiscal year 2014. Source: PPC
Slide 15: Evolution of Cost Improvements Over 2010 Baseline
Evolution of Cost Improvements Over 2010 Baseline 15 Source: PPC _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 2011 2012 2013 2014 Baseline Year 2010 Target for 2014: $220 MM $132 MM YTD result of $117 MM in improvements; annualized $234 MM. $210 MM Cumulative Improvement from 2010 - 2
Slide 16: Investor Relations Contact
Investor Relations Contact 16 Investor Relations: Rosemary Raysor E-mail: rosemary.raysor@pilgrims.com Phone: +1 (970) 506-8192 Address: 1770 Promontory Circle Greeley, CO 80634 USA Website: www.pilgrims.com
Slide 17: Appendix: EBITDA Reconciliation
Appendix: EBITDA Reconciliation 17 “EBITDA” is defined as the sum of net income (loss) plus interest, taxes, depreciation and amortization. “Adjusted EBITDA” is defined as the sum of EBITDA plus restructuring charges, reorganization items and loss on early extinguishment of debt less net income attr
Slide 18: Appendix: Reconciliation of LTM EBITDA
Appendix: Reconciliation of LTM EBITDA 18 Source: PPC The summary unaudited consolidated income statement data for the twelve months ended June 29, 2014 (the LTM Period) have been calculated by subtracting the applicable unaudited consolidated income statement data for the twenty-six weeks ended Jun
Slide 19: Appendix: Reconciliation of EBITDA Margin
Appendix: Reconciliation of EBITDA Margin 19 Source: PPC (UNAUDITED) June 29, 2014 June 30, 2013 June 29, 2014 June 30, 2013 June 29, 2014 June 30, 2013 June 29, 2014 June 30, 2013 Net income from continuing operations 190,445 190,791 8.7% 8.7% 288,632 245,019 6.9% 5.8% Add: Interest expense, net 13
Slide 20: Appendix: Net Debt Reconciliation
Appendix: Net Debt Reconciliation 20 Source: PPC Net debt is defined as total long term debt less current maturities, plus current maturities of long term debt, minus cash, cash equivalents and investments in available-for-sale securities. Net debt is presented because it is used by management, and