Tyson Foods, Inc. · NYSE:TSN
Tyson Foods — Q3 2022 Earnings Presentation
24 slides from Tyson Foods's earnings presentation, Aug 8, 2022
Slide 1: 3Q Fiscal 2022 Supplemental Information
— 3Q Fiscal 2022 Supplemental Information August 8, 2022
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 2022, other future economic
Slide 3: Delivered solid operating results for third quarter
Delivered solid operating results for third quarter Delivered high single digit sales growth in the quarter and maintained 1 double digit sales and earnings growth year to date Leveraged diverse protein portfolio, omni-channel capabilities, leading 2 brands and value-added products to deliver result
Slide 4: Double digit sales and earnings growth fiscal YTD
Double digit sales and earnings growth fiscal YTD Sales1 Adjusted Operating Income2 Adjusted Earnings Per Share2 8% 3Q22 vs. 3Q21 27% 28% 3Q22 vs. 3Q21 3Q22 vs. 3Q21 16% 15% 19% YTD22 vs. YTD21 YTD22 vs. YTD21 YTD22 vs. YTD21 Our Priorities 1| Win with team members 2| Win with customers and consumer
Slide 5: Total YTD Volume
Total YTD Volume Lower FY22 expectations due to macro-economic environment impacting consumer demand Volume1 (billion pounds) -5.5% Total Company -1.0% Chicken +0.7% Prepared Foods 9.29 9.35 21.15 20.94 2.67 2.52 YTD21 YTD22 YTD21 YTD22 YTD21 YTD22 -1.5% Beef Pork -2.1% International / Other +11.7%
Slide 6: Becoming the most sought-after place to work through our investments in team members
Becoming the most sought-after place to work through our investments in team members Objectives 1 2 3 Health, safety and wellbeing Competitive wage and Investing in team member of our team members benefit offerings experience Actions Ongoing vaccine booster clinics Implemented wage increases Increas
Slide 7: The Formula to Feed the Future
The Formula to Feed the Future TYSON FOODS, INC. AUGUST 8, 2022 7
Slide 8: Productivity program savings realization progressing
Productivity program savings realization progressing Targeting $1B+ in productivity gains by end of FY2024 and expect 40%+ delivered by the end of FY2022 $1,000M+ $400M+ FY22 FY24 Actions will lead to sustainable productivity savings in three key focus areas Operational & Functional Digital Solution
Slide 9: Strengthening our position as a global protein leader
Strengthening our position as a global protein leader Imperatives 1 2 3 4 5 Outpacing the market by Driving operational and Leveraging our Aggressively restoring our Transforming our team enhancing our portfolio functional excellence and financial strength to invest competitiveness in member experie
Slide 10: Delivered solid results in a challenging environment
Delivered solid results in a challenging environment Third Quarter and YTD22 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 ADJUSTED EPS1 (in millions of dollars) (in millions of dollars) (in dollars per share) $39,545 $3,591 $7.10 $34,238 $3,136 $5.98 +16% +15% +19% $1,372 $2.70 $12,478 $13
Slide 11: Margin compression in Beef partially offset by margin expansion in Chicken and productivity savings
Margin compression in Beef partially offset by margin expansion in Chicken and productivity savings Third Quarter 2022 $ millions Highlights $1,015 - $1,339 • Volumes decreased due to declines in Prepared Foods, Pork and Chicken partially offset by growth in Beef • Sales Price/mix increased primaril
Slide 12: Volume improvement in Beef continues as margins remain strong
Volume improvement in Beef continues as margins remain strong Third Quarter and YTD22 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 HIGHLIGHTS (in millions of dollars) $14,995 (in millions of dollars) o Sales volume increased in the quarter due to $12,987 higher head throughput and carcass
Slide 13: Pork challenged by hog supply and global demand headwinds
Pork challenged by hog supply and global demand headwinds Third Quarter and YTD22 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 HIGHLIGHTS (in millions of dollars) (in millions of dollars) o Sales volume decreased in the quarter due to $4,810 $4,631 limited hog supply and lower export deman
Slide 14: Prepared Foods overcoming challenging cost environment
Prepared Foods overcoming challenging cost environment Third Quarter and YTD22 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 HIGHLIGHTS (in millions of dollars) (in millions of dollars) $7,173 o Sales volume decreased in the quarter due to $6,600 impacts of increased pricing, uneven foodser
Slide 15: Sequential operational improvement continues in Chicken
Sequential operational improvement continues in Chicken Third Quarter and YTD22 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 HIGHLIGHTS (in millions of dollars) (in millions of dollars) o Sales volume decreased in the quarter due to a $12,342 reduction in rendering volumes resulting from a
Slide 16: Investment in our business and return of cash to shareholders supported by steady cash generation
Investment in our business and return of cash to shareholders supported by steady cash generation Leverage Ratio OPERATING CASH FLOW BUILD (Net Debt/Adj. EBITDA)1 (in billions of dollars) FINANCIAL <2.0x 1.2x STRENGTH $2.66 Manage our leverage ratio to be at or below our long-term target 3Q22 Target
Slide 17: Maintaining sales guidance on lowered volume expectation
Maintaining sales guidance on lowered volume expectation FY2022 Guidance2 YTD21 YTD22 Prior Indication Revised Indication Sales $34.2 billion $39.5 billion $52 – $54 billion Unchanged Volume 0.1% (1.0)% 1 – 2% growth Flat Chicken AOI Margin1 1.3% 4.8% 5 – 7% Unchanged Prepared Foods AOI Margin1 9.6%
Slide 18: Q&A
Q&A Donnie King Stewart Glendinning Shane Miller Noelle O’Mara David Bray Chris Langholz President & CEO EVP & CFO Group President, Group President, Group President, President, Fresh Meats Prepared Foods Poultry International
Slide 19: Appendix
Appendix
Slide 20: Sales improved in total and across all channels
Sales improved in total and across all channels Third Quarter 2022 $ millions Channel Highlights -$96 $114 -$201 $13,495 • Retail sales improved by $173 $890 $5 million in the quarter, led by Retail increases in Chicken up $389 million and Prepared Foods up Retail Foodservice $53 million Foodservice
Slide 21: EPS Reconciliations
EPS Reconciliations $ in millions, except per share data (Unaudited) Third Quarter Nine Months Ended Pretax Impact EPS Impact Pretax Impact EPS Impact 2022 2021 2022 2021 2022 2021 2022 2021 Reported net income per share attributable to Tyson (GAAP EPS) $ 2.07 $ 2.05 $ 7.42 $ 4.63 Add: China plant r
Slide 22: EBITDA Reconciliations
EBITDA Reconciliations $ in millions, except per share data (Unaudited) Nine Months Ended Fiscal Year Ended Twelve Months Ended July 2, 2022 July 3, 2021 October 2, 2021 July 2, 2022 Net Income $ 2,712 $ 1,702 $ 3,060 $ 4,070 Less: Interest income (10) (6) (8) (12) Add: Interest expense 282 325 428
Slide 23: Segment Operating Income Reconciliations
Segment Operating Income Reconciliations $ in millions (Unaudited) Adjusted Segment Operating Income (Loss) (for the third quarter ended July 2, 2022) Beef Pork Chicken Prepared Foods International/Other Total Reported operating income $ 533 $ 25 $ 277 $ 186 $ 12 $ 1,033 Less: Production facilities
Slide 24: Segment Operating Income Reconciliations
Segment Operating Income Reconciliations $ in millions (Unaudited) Adjusted Segment Operating Income (for the third quarter ended July 3, 2021) Beef Pork Chicken Prepared Foods International/Other Total Reported operating income (loss) $ 1,120 $ 67 $ (279) $ 150 $ 4 $ 1,062 Add: Legal contingency ac