Tyson Foods, Inc. · NYSE:TSN
Tyson Foods — Q3 2021 Earnings Presentation
26 slides from Tyson Foods's earnings presentation, Aug 9, 2021
Slide 1: Q3 Fiscal 2021 Supplemental Information
— Q3 Fiscal 2021 Supplemental Information August 9, 2021
Slide 2: Forward-Looking Statements
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 2021, other future economic
Slide 3: Q3 2021: strong performance in a strong protein market
Q3 2021: strong performance in a strong protein market 1. Retail brands continued to gain market share 2. Foodservice recovery extends beyond QSRs 3. Diverse portfolio delivered earnings growth 4. Deleveraging actions strengthened our financial position 5. Invested growth capital to support future T
Slide 4: Taking action with an eye to the future
Taking action with an eye to the future 1. Leveraging portfolio diversity to drive consistent results 2. Working to deliver a best-in-class team member experience 3. Improving the reliability of our supply for customers 4. Accelerating actions to improve our competitive position in Chicken 5. Contin
Slide 5: Leveraging portfolio diversity to drive consistent results
Leveraging portfolio diversity to drive consistent results Sales Adjusted Operating Income1 Adjusted Earnings Per Share1 25% 3Q21 vs. 3Q20 81% 93% 3Q21 vs. 3Q20 3Q21 vs. 3Q20 8% 49% 61% YTD21 vs. YTD20 YTD21 vs. YTD20 YTD21 vs. YTD20 Our Priorities 1| Go-to-supplier for customers and consumers 2| Mo
Slide 6: Delivering a best-in-class team member experience
Delivering a best-in-class team member experience Health, safety, and wellness Competitive wage and benefit Investing in automation and resources offerings technology • Health and safety is our top priority • Increasing wage rates based upon • Making strategic investments in automation • Requiring a
Slide 7: Focused on improving reliability of supply for our customers
Focused on improving reliability of supply for our customers YTD21 Volume1 (billion pounds) PREPARED FOODS BEEF PORK CHICKEN -2% +7% +3% 9.51 9.29 -3% 5.16 5.51 3.79 3.89 2.75 2.67 YTD20 YTD21 YTD20 YTD21 YTD20 YTD21 YTD20 YTD21 3Q21 Volume1 (billion pounds) +3% +24% +15% +5% 3.07 3.17 1.82 1.47 1.0
Slide 8: Imperatives for improving Chicken operating results
Imperatives for improving Chicken operating results Employer of Choice Improve Operational Performance Serve our Customers Actions Competitive wage rates Deployed new male to Delivering on-time, in-full regain competitive hatch Improved team member Sustaining retail value-added experience through Ra
Slide 9: Accelerating actions to drive execution excellence
Accelerating actions to drive execution excellence Current State Operations Warehousing Sales & Enabling & Logistics Marketing Functions Labor and supply challenges have Disparate network and processes Customers are asking for greater Latent opportunities to integrate lowered capacity utilization ac
Slide 10: Total Company Financial Results
Total Company Financial Results Third Quarter and YTD 2021 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 ADJUSTED EPS1 (in millions of dollars) (in millions of dollars) (in dollars per share) $3,136 $34,238 $5.98 $31,725 +8% +49% $2,099 +61% $3.72 $1,372 $2.70 $12,478 $10,022 $758 +81% $1.4
Slide 11: Total Company Sales Bridge
Total Company Sales Bridge Highlights YTD 2021 $ millions o Retail strength contributed over $1 $79 ($358)1 billion in sales improvement in YTD $871 21 and over $300 million in 3Q21 $34,238 o Foodservice sales improved nearly $1 billion in YTD 21 compared to the $1,517 same period last year driven b
Slide 12: Total Company Adjusted Operating Income Bridge
Total Company Adjusted Operating Income1 Bridge YTD 2021 Highlights $ millions o Volumes were roughly flat on a year- to-date basis $3,018 ( $2,220 ) o Price/mix up substantially due to the recovery of raw material inflation through price plus favorable mix o COGS price/mix up substantially as a res
Slide 13: Chicken Financial Results
Chicken Financial Results Third Quarter and YTD 2021 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 KEY HIGHLIGHTS (in millions of dollars) (in millions of dollars) $137 o 3Q21 sales volume increased due to increased demand across channels and improved production efficiencies $9,801 $9,860 o
Slide 14: Prepared Foods Financial Results
Prepared Foods Financial Results Third Quarter and YTD 2021 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 KEY HIGHLIGHTS (in millions of dollars) (in millions of dollars) o 3Q21 sales volume improved due to strong foodservice $6,600 $633 demand and persistent retail strength $6,255 +6% o 3Q
Slide 15: Beef Financial Results
Beef Financial Results Third Quarter and YTD 2021 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 KEY HIGHLIGHTS (in millions of dollars) (in millions of dollars) o Sales volume was up during 3Q21 and YTD 21 due to strong $12,987 demand and a soft comparable period volume due to COVID- $11,47
Slide 16: Pork Financial Results
Pork Financial Results Third Quarter and YTD 2021 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 KEY HIGHLIGHTS (in millions of dollars) (in millions of dollars) $4,631 o Sales volume increased due to increased live hogs processed $393 and strong global demand, partially offset by the challe
Slide 17: Financial Outlook
Financial Outlook FY 2021 Outlook Factor YTD 20 YTD 21 Prior Revised Comments o Commercial initiatives to offset inflationary pressure Sales $31.7 billion $34.2 billion $44 – $46 billion $46 – $47 billion and grain cost headwinds o Continued strength in Beef 0.6% 1.3% Likely down vs. prior Unchanged
Slide 18: Focused Capital Deployment to Drive Shareholder Return
Focused Capital Deployment to Drive Shareholder Return OPERATING CASH FLOW Leverage Ratio (in billions of dollars) BUILD (Net Debt/Adj. EBITDA)1 FINANCIAL 2.7x 2.0x 1.7x STRENGTH $2.7 $2.7 Manage leverage level to hit long-term target 3Q20 3Q21 Target Capital Expenditures (in millions) INVEST IN OUR
Slide 19: Wednesday, September 15, 2021 9:00am – noon EDT
Wednesday, September 15, 2021 9:00am – noon EDT
Slide 20: Appendix
Appendix
Slide 21: Additional Financial Highlights
Additional Financial Highlights Third Quarter 2021 ◦ Liquidity of $3.4 billion at 07/03/21 ◦ Leverage of 1.7x net debt-to-adjusted EBITDA1 ◦ Net interest expense of $103 million ◦ Adjusted effective tax rate of 22.5% ◦ Capital expenditures $302 million ◦ Dividend payment of $159 million ◦ Share repu
Slide 22: Constructive protein fundamentals reinforce results
Constructive protein fundamentals reinforce results Percent change versus prior period CY2021 Forecast vs Prior Year CY2020 Actual vs Prior Year Domestic Domestic Production Imports Exports Production Imports Exports Availability Availability 9.3% 15.8% 2.8% 0% 1.6% Beef -0.6% -9.6% -2.3% 8.6% 15.2%
Slide 23: EPS Reconciliations
EPS Reconciliations $ in millions, except per share data (Unaudited) Third Quarter Nine Months Ended Pretax Impact EPS Impact Pretax Impact EPS Impact 2021 2020 2021 2020 2021 2020 2021 2020 Reported net income per share attributable to Tyson (GAAP EPS) $ 2.05 $ 1.44 $ 4.63 $ 3.85 Add: China plant r
Slide 24: EBITDA Reconciliations
EBITDA Reconciliations $ in millions, except per share data (Unaudited) Nine Months Ended Fiscal Year Ended Twelve Months Ended July 3, 2021 June 27, 2020 October 3, 2020 July 3, 2021 Net Income $ 1,702 $ 1,414 $ 2,071 $ 2,359 Less: Interest income (6) (9) (10) (7) Add: Interest expense 325 361 485
Slide 25: Segment Operating Income Reconciliations
Segment Operating Income Reconciliations $ in millions (Unaudited) Adjusted Segment Operating Income (Loss) (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 conting
Slide 26: Segment Operating Income Reconciliations
Segment Operating Income Reconciliations $ in millions (Unaudited) Adjusted Segment Operating Income (Loss) (for the three months ended June 27, 2020) Beef Pork Chicken Prepared Foods International/Other Total Reported operating income $ 649 $ 107 $ (120) $ 145 $ (8) $ 773 Less: Beef production faci