Tyson Foods, Inc. · NYSE:TSN
Tyson Foods — Q2 2023 Earnings Presentation
23 slides from Tyson Foods's earnings presentation, May 8, 2023
Slide 1: 2Q Fiscal 2023 Supplemental Information
— 2Q Fiscal 2023 Supplemental Information May 8, 2023
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Certain information in this presentation constitutes forward-looking statements as contemplated by the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, current views and estimates of our outlook for fiscal 2023, other future economic
Slide 3: 2Q23 Review
2Q23 Review 1 Expected Q2 to be more challenging than Q1 2 Q2 profitability was weaker than expected; topline results were mixed Branded foods business continued to perform well driven by ongoing 3 strength in share position All three protein categories impacted by unfavorable market conditions 4 si
Slide 4: Focus on Chicken
Focus on Chicken Our Strategy 1 Execute with Excellence 2 Grow our business 3 Win with customers and consumers Market Headwinds Strategic Actions • Low Chicken Commodity Market Prices • Work Closely with Customers - Improved Fill Rates • High Commodity Input Costs • Optimize Capacity & Cost Structur
Slide 5: Outperforming the top CPG peer set in both Volume AND Dollar sales growth
Outperforming the top CPG peer set in both Volume AND Dollar sales growth while expanding market share across all dayparts Latest 13 Weeks Volume and Dollar Sales % Change Tyson Core Business Lines Share Growth vs. Year Ago By Daypart Vol % Change Dollar % Change Dollar Pound 12.5 +2.5 9.0 9.1 Total
Slide 6: Positive retail share trajectory, fueled by continued strength of business fundamentals
Positive retail share trajectory, fueled by continued strength of business fundamentals Tyson Core Business Lines Share Growth Brand Strength Relative to Competition Pound Share Pt. Chg. vs. YAG, by Quarter % Favorite Brand FY23 Among Category Buyers Q3 Q4 Q1 Q2 Frozen Nuggets 42% 8% Frozen Strips 3
Slide 7: Long-term Value Drivers Intact
Long-term Value Drivers Intact Core Protein Branded Food Portfolio International Expansion Diversified Tyson®, Jimmy Dean® Significant growth portfolio mix of and Hillshire Farms® opportunity outside fresh meats lead a portfolio of of the U.S. strong brands TYSON FOODS, INC. MAY 8, 2023 7
Slide 8: Sales, AOI and EPS performance
Sales, AOI and EPS performance Second Quarter 2023 vs Second Quarter 2022 SALES ADJUSTED OPERATING INCOME1 ADJUSTED EPS1 (in millions of dollars) (in millions of dollars) (in dollars per share) $13,117 $13,133 $2.29 $1,161 $61 -$418 -$768 $(0.04) $29 $65 2Q22 2Q23 3 4 2Q22 2Q23 Q2 2022 AOI Gross Mar
Slide 9: Softer export markets and increased live cattle costs in Beef
Softer export markets and increased live cattle costs in Beef Second Quarter and 1H23 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 HIGHLIGHTS (in millions of dollars) (in millions of dollars) o 2Q23 sales volume decreased driven by lower $10,036 head processed $9,340 $1,594 o 2Q23 average
Slide 10: Pork industry fundamentals remain challenging
Pork industry fundamentals remain challenging Second Quarter and 1H23 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 HIGHLIGHTS (in millions of dollars) (in millions of dollars) $3,191 $2,950 o 2Q23 sales volume increased due to improved $223 hog availability o 2Q23 average sales price decre
Slide 11: Chicken taking actions to combat commodity market headwinds
Chicken taking actions to combat commodity market headwinds Second Quarter and 1H23 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 HIGHLIGHTS (in millions of dollars) (in millions of dollars) o 2Q23 sales volume increased due to improved internal $8,693 production $7,976 o 2Q23 average sales
Slide 12: Retail Brands continue to drive strong performance in Prepared Foods
Retail Brands continue to drive strong performance in Prepared Foods Second Quarter and 1H23 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 HIGHLIGHTS (in millions of dollars) (in millions of dollars) o 2Q23 sales volume decreased slightly as strong Retail performance was offset by soft Food
Slide 13: Deploying capital for long term profitable growth while maintaining a strong balance sheet
Deploying capital for long term profitable growth while maintaining a strong balance sheet Leverage Ratio OPERATING CASH FLOW BUILD (Net Debt/Adj. EBITDA)1 (in billions of dollars) 2.4x FINANCIAL <2.0x STRENGTH $1.22 Manage our leverage ratio to be at or below our long-term target 2Q23 Target Capita
Slide 14: Lower sales and margin expectations
Lower sales and margin expectations FY2023 Guidance2 1H22 1H23 Prior Indication Revised Indication Sales $26.1 billion $26.4 billion $55 – $57 billion $53 – $54 billion Sales Growth % (0.7)% 1.3% 3 – 7% growth 0 – 1% growth Chicken AOI Margin1 4.0% (1.0)% 2 – 4% (1) – 1% Prepared Foods AOI Margin1 9
Slide 15: Q & A
Q&A Donnie King John R. Tyson Brady Stewart Stewart Glendinning Wes Morris Amy Tu President & CEO Executive Vice President Group President, Group President, Group President, President International & & CFO Fresh Meats Prepared Foods Poultry Chief Administrative Officer
Slide 16: Appendix
Appendix
Slide 17: 1H Sales Performance YoY
1H Sales Performance YoY Building momentum for the future as sales revenue grew for the Total Company and in key growth segments Revenue1 (billion $) +5.0% Total Company +1.3% Chicken +9.0% Prepared Foods 26.05 26.39 7.98 8.69 4.73 4.96 1H22 1H23 1H22 1H23 1H22 1H23 -6.9% Beef Pork -7.6% Internation
Slide 18: Segment Sales Channel Bridge Quarterly YoY
Segment Sales Channel Bridge Quarterly YoY Second Quarter 2023 $ millions Channel Highlights $344 -$417 • Retail improved by $195M, led by increases in Chicken up $265M and Prepared Foods up $23M • Foodservice was relatively flat as Beef’s decline of $73M was offset by the increase in Chicken $29 $1
Slide 19: Outpacing foodservice broadline industry recovery, and growing share in our Focus 6 categories
Outpacing foodservice broadline industry recovery, and growing share in our Focus 6 categories Volume Sales % Change Latest 52 Weeks Latest 13 Weeks vs. YAG vs. 4YAG vs. YAG vs. 4YAG 7.6% 6.7% 7.2% 7.6% 4.5% 6.4% 6.7% 4.2% 1.6% Share Share Share Share -0.7% +0.3 +1.6 -0.2pt +1.9 -1.5% -3.3% Total Br
Slide 20: EPS Reconciliations
EPS Reconciliations $ in millions, except per share data (Unaudited) Second Quarter Six Months Ended Pretax Impact EPS Impact Pretax Impact EPS Impact 2023 2022 2023 2022 2023 2022 2023 2022 Reported net income per share attributable to Tyson (GAAP EPS) $ (0.28) $ 2.28 $ 0.61 $ 5.35 Add (Less): Prod
Slide 21: EBITDA Reconciliations
EBITDA Reconciliations $ in millions, except per share data (Unaudited) Six Months Ended Fiscal Year Ended Twelve Months Ended April 1, 2023 April 2, 2022 October 1, 2022 April 1, 2023 Net income $ 229 $ 1,959 $ 3,249 $ 1,519 Less: Interest income (16) (6) (17) (27) Add: Interest expense 173 197 365
Slide 22: Segment Operating Income Reconciliations
Segment Operating Income Reconciliations $ in millions (Unaudited) Adjusted Segment Operating Income (Loss) (for the second quarter ended April 1, 2023) International/ Beef Pork Chicken Prepared Foods Total Other Reported operating income (loss) $ - $ (33) $ (258) $ 241 $ 1 $ (49) Add: Restructuring
Slide 23: Segment Operating Income Reconciliations
Segment Operating Income Reconciliations $ in millions (Unaudited) Adjusted Segment Operating Income (Loss) (for the six months ended April 1, 2023) International/ Beef Pork Chicken Prepared Foods Total Other Reported operating income (loss) $ 166 $ (54) $ (189) $ 499 $ (4) $ 418 1 Less: Production