Pilgrim's Pride Corporation · NASDAQ:PPC
Pilgrim's Pride — Q2 2019 Earnings Presentation
24 slides from Pilgrim's Pride's earnings presentation, Aug 1, 2019
Slide 1: Financial Results for Second Quarter Ended June 30, 2019
Financial Results for Second Quarter Ended June 30, 2019 Pilgrim’s Pride Corporation (NASDAQ: PPC)
Slide 2: Cautionary Notes and Forward-Looking Statements
Cautionary Notes and Forward-Looking Statements 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” an
Slide 3: Pullet Placement Growth In-line with Expected New Capacity
Pullet Placement Growth In-line with Expected New Capacity Intended Pullet Placements 9,000 8,500 8,000 7,500 7,000 6,500 Thousand Head Thousand 6,000 5,500 5,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2018 2019 5 Yr. Avg. . Trailing 8-Month placements average 3.6% above year prior to accom
Slide 4: Breeder Growth Has Slowed and Egg Production Remains Below Year Average
Breeder Growth Has Slowed and Egg Production Remains Below 5 Year Average Broiler Type Hatching Layers Egg Production per 100 Layers 60,000 2,000 59,000 1,950 58,000 1,900 57,000 1,850 56,000 1,800 55,000 Eggs 1,750 54,000 Thousand Head Thousand 53,000 1,700 52,000 1,650 51,000 1,600 50,000 1,550 Ja
Slide 5: Hatchery Utilization Remains In Line With Year Average
Hatchery Utilization Remains In Line With 5 Year Average Hatchery Utilization 96.0% 94.0% 92.0% 90.0% % % 88.0% 86.0% 84.0% 82.0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2018 2019 5 Yr. Avg. Source: Agristats 5
Slide 6: Egg Sets Up +1.3% YTD, Hatchability Remains Challenged
Egg Sets Up +1.3% YTD, Hatchability Remains Challenged Chicken Egg Sets Chicken Hatchability by Week - USDA by Week - USDA 240,000 83.0% 82.5% 230,000 82.0% 220,000 81.5% 81.0% 210,000 % 80.5% 200,000 80.0% Thousands of Eggs of Thousands 190,000 79.5% 79.0% 180,000 78.5% 170,000 78.0% 5 Year Range 2
Slide 7: Chick Placements Up +1.4% YTD
Chick Placements Up +1.4% YTD Chicken Broiler Placed by Week- USDA 195,000 190,000 185,000 180,000 175,000 Head (000) Head 170,000 165,000 160,000 5 Year Range 2017 2018 2019 5 Yr. Avg. Source: USDA 7
Slide 8: Bigger Bird Categories Continuing to Grow Share
Bigger Bird Categories Continuing to Grow Share Head Processed by Size 100% 15.1% 15.6% 18.3% 90% 19.7% 21.4% 20.9% 21.2% 21.7% 22.5% 80% 19.1% 19.3% 70% 19.4% 19.3% 20.9% 22.5% 23.6% 25.4% 24.2% 60% 50% 42.9% 40.7% 35.5% 35.0% 40% 32.2% 31.2% 30.4% 30.2% 31.0% 30% 20% 26.9% 26.1% 25.5% 25.3% 24.8%
Slide 9: LQ and Wings Driving Total Cold Storage Inventories Lower
LQ and Wings Driving Total Cold Storage Inventories Lower Total Chicken Inventories 1,000,000 950,000 900,000 850,000 800,000 LBS (000) LBS 750,000 700,000 650,000 2017 2018 2019 3 Yr. Avg. . Total inventories saw little MOM change, but remain below 2018 levels. . Breast meat inventories are still t
Slide 10: Cutout Stable in Q2, Above 2018 Levels
Cutout Stable in Q2, Above 2018 Levels Cutout Value 110.00 100.00 90.00 80.00 Cents/Lb 73.86 70.00 60.00 50.00 1/4 2/1 3/1 6/7 7/5 8/2 1/18 2/15 3/15 3/29 4/12 4/26 5/10 5/24 6/21 7/19 8/16 8/30 9/13 9/27 11/8 12/6 10/11 10/25 11/22 12/20 5 Year Range 2017 2018 2019 5 Yr. Avg. Source: PPC, EMI 10
Slide 11: Strength in Wings and LQs Continue to Support Cutout
Strength in Wings and LQs Continue to Support Cutout, Despite Boneless Breast Lagging USDA Boneless/Skinless Breast NE USDA Tenders NE 215.00 250.00 195.00 230.00 175.00 210.00 190.00 155.00 180.32 170.00 135.00 Cents/Lb Cents/Lb 150.00 115.00 111.67 130.00 95.00 110.00 75.00 90.00 1/5 2/4 3/6 4/5 5
Slide 12: Seasonal Decline Started Early for WOGs, But Still Close to 5 Year Range
Seasonal Decline Started Early for WOGs, But Still Close to 5 Year Range EMI WOG 2.5-4.0 LBS 120 110 100 90 Cents/Lb. 84.21 80 70 60 1/5 2/2 3/2 6/8 7/6 8/3 1/19 2/16 3/16 3/30 4/13 4/27 5/11 5/25 6/22 7/20 8/17 8/31 9/14 9/28 11/9 12/7 10/12 10/26 11/23 12/21 5 Year Range 2017 2018 2019 5 Year Aver
Slide 13: Corn Stocks Projected to Decrease in '19
Corn Stocks Projected to Decrease in ‘19 Global Corn Stocks Global Corn Stocks/Use Excluding China 16.0% Excluding China (Million Metric Tons) 15.4% 14.9% 140 15.0% 127.7 14.1% 14.1% 130 14.0% 13.9% 116.8 118.9 13.7% 120 14.0% 109.4 107.1 110 103.2 13.0% 12.6% 12.5% 100 94.1 92.8 93.7 90 78.5 12.0%
Slide 14: Global Soybean Inventories Remain High
Global Soybean Inventories Remain High Global Soybean Stocks Global Soybean Stocks/Use (Million Metric Tons) 120 35.0% 113.0 32.5% 104.5 33.0% 99.1 100 95.7 31.0% 28.9% 29.3% 29.4% 29.0% 27.6% 80 77.5 78.5 69.9 27.0% 25.7% 25.0% 61.8 25.0% 59.5 57.4 25.0% 60 53.4 22.4% 23.0% 22.0% 44.0 20.8% 40 21.0
Slide 15: Second Quarter 2019 Financial Review
Second Quarter 2019 Financial Review . U.S.: Commodity recovered Y/Y , PF solid; MX: Better supply/demand from Main Indicators ($M) Q2-19 Q2-18 more favorable growing conditions and Net Revenue 2,843.1 2,836.7 less pork imports; UK/Europe: Pricing model adjustments and operational Gross Profit 367.9
Slide 16: Fiscal Year 2019 Capital Spending
Fiscal Year 2019 Capital Spending CapexCapex (US$M) (US$M) . Strong Free Cash Flow generation has enabled us to direct more capital spending towards identified projects with rapid payback and structural projects. . New strategic projects will support key customers growth and de-emphasize our exposur
Slide 17: Investor Relations Contact
Investor Relations Contact Investor Relations: Dunham Winoto Director, Investor Relations E-mail: IRPPC@pilgrims.com Address: 1770 Promontory Circle Greeley, CO 80634 USA Website: www.pilgrims.com 17
Slide 18: Appendix
APPENDIX SER All about great taste 18
Slide 19: Appendix: EBITDA Reconciliation
Appendix: EBITDA Reconciliation “EBITDA” is defined as the sum of net income (loss) plus interest, taxes, depreciation and amortization. “Adjusted EBITDA” is calculated by adding to EBITDA certain items of expense and deducting from EBITDA certain items of income that we believe are not indicative o
Slide 20: Appendix: Reconciliation of LTM EBITDA
Appendix: Reconciliation of LTM EBITDA The summary unaudited consolidated income statement data for the twelve months ended June 30, 2019 (the LTM Period) have been calculated by subtracting the applicable unaudited consolidated income statement data for the six months ended July 1, 2018 from the su
Slide 21: Appendix: EBITDA Margin Reconciliation
Appendix: EBITDA Margin Reconciliation EBITDA margins have been calculated by taking the relevant unaudited EBITDA figures, then dividing by Net Revenue for the applicable period. PILGRIM'S PRIDE CORPORATION Reconciliation of EBITDA Margin (Unaudited) Thirteen Weeks Ended Twenty-Six Weeks Ended Thir
Slide 22: Appendix: Reconciliation of Adjusted Net Income
Appendix: Reconciliation of Adjusted Net Income A reconciliation of net income (loss) attributable to Pilgrim's Pride Corporation per common diluted share to adjusted net income (loss) attributable to Pilgrim's Pride Corporation per common diluted share is as follows: PILGRIM'S PRIDE CORPORATION Rec
Slide 23: Appendix: Adjusted EPS Bridge
Appendix: Adjusted EPS Bridge A reconciliation of GAAP earnings per share (EPS) to adjusted earnings per share (EPS) is as follows: PILGRIM'S PRIDE CORPORATION Reconciliation of GAAP EPS to Adjusted EPS (Unaudited) Thirteen Weeks Ended Twenty-Six Weeks Ended June 30, 2019 July 1, 2018 June 30, 2019
Slide 24: Appendix: Segment and Geographic Data
Appendix: Segment and Geographic Data PILGRIM'S PRIDE CORPORATION Supplementary Selected Segment and Geographic Data (Unaudited) Thirteen Weeks Ended Twenty-Six Weeks Ended June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018 (In thousands) Sources of net sales by country of origin: US $ 1,916,954