Smithfield Foods, Inc. · NASDAQ:SFD
Smithfield Foods — Investor Presentation (April 2010)
40 slides from Smithfield Foods's investor presentation, Apr 21, 2010
Slide 1: Smithfield Foods, Inc. Investor Presentation
bys \ Smithfield __ Smithfield Foods, Inc. Investor Presentation April 2010
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains “forward-looking” statements within the meaning of the federal secu s laws. The forward-looking statements include statements concerning the Company’s outlook for the future, as well as other statements of beliefs, future plans and strategies or
Slide 3: Non-GAAP Measure Reconciliations
Non-GAAP Measure Reconciliations mm Dee, 2009 Sahstefore limbutions Ober segmat BOD "Ad: 40% of Buteballelee 08 Less: Nonvomey ales 0.) Talay subs before eliminions 507 Non GAAP measurerecencation Gnmitiens) Tm ry Fy Jay.2010 2009 anne Operatingproit- Pork sequent 5 ee) SF ‘Add: Porkresractring an i
Slide 4: A Platform For Growth
A Platform For Growth Smithfield
Slide 5: A Platform For Growth
A Platform For Growth ¢ Focus on profitable top and bottom line growth via consumer packaged meats supported by — Leading positions in the food industry — Portfolio of leading consumer brands — Vertically integrated platform to assure high quality, consistent and traceable supply for consumer packag
Slide 6: Leading Position In Food Industry
Leading Position In Food Industry #1 U.S. Packaged Pork Company #1 World Pork Processor #1 World Hog Producer #1 World Turkey Processor’ #1 Market share in several European countries * Through 49% interest in Butterball, LLC Sources: Information Resources, Inc. (IRI); FreshLook Marketing Group; Succ
Slide 7: Smithfield Brand Portfolio Strength
Smithfield Brand Portfolio Strength Consumers purchase products in the Smithfield brand portfolio more than 1 billion times every year Smithfield 7
Slide 8: Core Portfolio of Leading Brands
Core Portfolio of Leading Brands... emia armiant Te smithficia GUmeREAD) CED $1.3 billion $1.2 billion $955 million $550 million Bylorrel KI Cook's: ‘Cork’s ham. Always good t0 the bone* $498 million $402 million @ em, million $375 million nicer mar. il BECURLS ea million ] million $121 million $71
Slide 9: Covering the spectrum of consumer demographics
... Covering the spectrum of consumer demographics ‘Smithfield Gor other leading food companies Gualtzzy Gmtzy ED oe Gy ylorrell Cooks RS ihe Family Value Smithfield °
Slide 10: Leveraging complementary geographic and market disciplines
...Leveraging complementary geographic and market disciplines Smithfield
Slide 11: Core Portfolio of Leading International Brands
Core Portfolio of Leading International Brands ° 1 Smithfield owns 37% of Campotria Food Group Smithfield! 1
Slide 12: Well-Defined Roles of Strategic Business Units
Well-Defined Roles of Strategic Business Units Packaged Meats log Production (Porkiconeumer (yo oo [ ) Intern Turkey Sales: $9.3 billion Sales: $2.4 billion Sales: $1.2 billion Sales: $0.7 billion Drive profitable growth through leading national and regional consumer brands Provide vertically integr
Slide 13: Delivering Quality & Consistent Earnings
Delivering Quality & Consistent Earnings Smithfield
Slide 14: Pork Segment Earnings Growth
Pork Segment Earnings Growth profitability has more than doubled since fiscal 2007 $600 + 71% + + 6% - $500 , tl = $400 + ies il = 55 +4% 5s & = $300 + =a DE +3% Fo os 1 ox => $200 + PR + 2% & $100 + | $249 | ayy = $0 0% FY 07 FY 08 FYo9 TTMFY10 Q3 Note: FY 09 and TTM FY 10 3 results exclude restruc
Slide 15: Earnings growth driven by consumer packaged meats
Earnings growth driven by consumer packaged meats Pork segment EBIT ($ per head) segment earnings contribution Fresh pork © Packaged meats Note: FY 09 and TTM FY 10 @3 results exclude restructuring and impairments; Refer to slide 3 for Non-GAAP measure reconciliations FY 09 TTM FY 10 Q3 Smithfield‘:
Slide 16: Consumer Packaged Meats Earnings Growth
Consumer Packaged Meats Earnings Growth earnings engine $600 + 12% $500 + + 10% $400 + 7 8% T 4.6% 7 &% $200 + + 4% $100 + | $185 + 2% Consumer packaged meats EBIT (in millions) A w i=] o Consumer packaged meats EBIT (% of sales) $0 + + + 0% FY 07 FY 08 FYo9 TTM FY10 Q3 Note: FY 09 and TTM FY 10 3 r
Slide 17: Optimizing Consumer Packaged Meats
Optimizing Consumer Packaged Meats growth while optimizing product mix and pricing Go 3 = 3 3 a = 3 m7 to 2 = © = 2 ° > FY 07 FY 08 FY09) TTMFY10 Note: FY 09 and TTM FY 10 Q3 a3 results exclude restructuring and impaitments, Refer to slide 3 for f=" EBIT ($ per pound) ——Volume Smithfield’ Non-GAAP m
Slide 18: Stable Fresh Pork Profitability
Stable Fresh Pork Profitability remained consistent year after year oe ¢ i} = $4 = a] E 3 £ $3 a] 3 9 a wo A nol rc $2 gS Fa = $1 £ s 3 $0 , + 1 o> FY 07 FY 08 FYo9 TTMFY40 Q3 Note: FY 09 and TTM FY 10 @3 results exclude restructuring and impairments: Refer to slide 3 for [= EBIT ($ per head) —@— Vo
Slide 19: Category Leadership
Category Leadership Smithfield
Slide 20: Comprehensive Brand Strategy
Comprehensive Brand Strategy Powerful brands that Diverse portfolio of core play to demographics brands that make and regional Smithfield the leading preferences of key supplier to the retail and consumer segments foodservice channels Smithfield ces: IRI; FreshLook; Strategic Research Consulting, In
Slide 21: Leading Retail Position In Key Consumer Categories
Leading Retail Position In Key Consumer Categories packaged meats categories leading consumer Sources: IRI 52 weeks ending 03/28/10; FreshLook 82 weeks ending 02/21/10 ™ Branded Retail © Private Label Retail Note: Deli Meats, Turkey and Packaged Lunchmeat includes 49% interest in Butterball, LLC; Tu
Slide 22: Consumer-Winning Brands At Retail
Consumer-Winning Brands At Retail sales volume comes from products in the Smithfield brand portfolio 80% 70% 60% 50% 40% 30% 20% 10% 0% Smithfield Industry ™ Branded O Private Label/Other Sources: IRI 52 weeks ending 03/28/10; FreshLook 52 weeks ending 02/21/10 Smithfield Note: Other includes Unbran
Slide 23: The Retail Leader In Branded Consumer Packaged Meats
The Retail Leader In Branded Consumer Packaged Meats across multiple consume segments and more categories than other leading manufacturers Smithfield Sara Lee Bar-S 251. a Hormel Foods Kraft Foods Cargill More Consumer Segments 10 More Categories 0 (1 Sources: IRI52 weeks ending 03/28/10; FreshLook
Slide 24: The Leader In Foodservice Pork
The Leader In Foodservice Pork $3,000 1g 710 ” N ow ° 6 fl n N ° 6 6 fl (in millions) wn oe a [=] f=) \ $1,000 + $662 $552 $500 5 $179 $136 $0 T T T 1 ; 1 Foodservice pork sales ) fe) 2 te) S eK § KK ¥ Po SS eS € Y Smithfield Source: SRC
Slide 25: A Leader In the Deli
A Leader In the Deli Market share Sources: IRI 52 weeks ending 03/28/10; FreshLook 62 weeks ending 02/21/10 Smithfield Note: Includes 49% interest in Butterball, LLC; Refer to slide 3 for Non-GAAP measure reconciliations
Slide 26: Vertical Integration
Vertical Integration Smithfield
Slide 27: Vertically Integrated Platform Creates Competitive Advantage In Pork Segment
Vertically Integrated Platform Creates Competitive Advantage In Pork Segment « Hog production segment provides vertically integrated platform to assure high quality, consistent and traceable raw material supply * Company manages full value chain from production to processing to consumer packaged mea
Slide 28: Hog Production Approaching Break-Even
Hog Production Approaching Break-Even (per live hundredweight) An a o p ete the fourth quarter of fiscal 2010 and remain above break- even throughout fiscal 2011 Note: Hog price projections based on futures curve on D4/12/10; Smithfield break-even net of interest, ew o e fey ns ns ge &€ & & € — ISM
Slide 29: Hog Production Group Restructuring Opportunity
Hog Production Group Restructuring Opportunity ¢ Reconfiguration of breeding stock sources ¢ Decreased freight on feed and slaughter animals ¢ Improved animal health and productivity through heightened biosecurity ¢ Farm reconfiguration to eliminate single site farrow to finish farms Smithfield”
Slide 30: Projected Potential Benefit
Projected Potential Benefit benefit to raising costs as a result of the Hog Production $0.02 4 Group restructuring plan i} — ao =_-~ 2 SE § % $0.01 | a8 38 38 o oa $0.00 , T T T 1 tt) 1 2 3 4 5 Year Smithfield”
Slide 31: Exports
Exports Smithfield
Slide 32: Export Customer Reliability
Export Customer Reliability remains the margin leader. China and Russia continue to be unreliable markets. [™ Reliable [™ Unreliable Note: FY 10 G3 YTD Smithfield export markets by volume; Other Category consists of sales to the following countries: EU, Australia, Bahamas, Bermuda, Brazil, Bulgaria,
Slide 33: Competiveness of U.S. Pork on World Market
Competiveness of U.S. Pork on World Market ed a tive landscape for pork exporting countries [n Carcass ($/pound) © Carcass year ago ($/pound) Smithfield Note: Week ending 04/03/10
Slide 34: Financial Management
Financial Management Smithfield
Slide 35: Long-Term Debt Maturities
Long-Term Debt Maturities debt maturities $1,200 - until fiscal 2012 E $1,000 5 $800 5 $600 5 in millions $400 5 $638 $200 5 so | -o0__ FY 10 FY 11 FY 12 FY 13 BY cidith feta —_-— — — se — - = [=] f=] ee
Slide 36: Total Debt to Total Capitalization
Total Debt to Total Capitalization 59% 57% 55% 53% 51% 49% AT% 45% 58% 56% 54% 52% FY 07 FY 08 FY09 FY10Q1 FY 10 Q2 FY10Q3 © Debt to total capitalization m Pro forma Note: FY 10 Pro forma debt is net of short-term cash investments Smithfield:
Slide 37: Conclusion
Conclusion Smithfield
Slide 38: Core Brand Investment Cycle
Core Brand Investment Cycle Benefits of i" Investment cost savings . . aera in marketing initiatives Bottom line Top line growth growth Smithfield:
Slide 39: Why invest in Smithfield?
Why invest in Smithfield? *« Company is focused on driving profitable top and bottom line growth via consumer packaged meats « Pork segment is delivering a quality and consistent earnings stream « Live hog prices are projected to remain above break- even throughout fiscal 2011 * Cost savings initiat
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