Tyson Foods, Inc. · NYSE:TSN
Tyson Foods — Investor Presentation (December 2016)
37 slides from Tyson Foods's investor presentation, December 2016
Slide 1: Different company. Different model.
different company. different model. different today. different tomorrow. ae December 2016 Tyson Foods, Inc.
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain information contained in the press release may constitute forward-looking statements, such as statements relating to expected performance, and including, but not limited to, statements appearing in the “Outlook” section and statements relating to GAAP EPS guidance
Slide 3: Tyson Foods, Inc. Investor Presentation | March 2016| 3 Tyson Foods, Inc. Investor Presentation
Tyson Foods, Inc. Investor Presentation | March 2016| 3 Tyson Foods, Inc. Investor Presentation | December 2016 |3
Slide 4: Why Invest in TSN?
Why Invest in TSN? • One of world’s leading food companies • Advantaged brands in advantaged product categories, focused on protein • Multi-protein, multi-channel, all day parts, all meal occasions • #1 or #2 brands in 13 categories • #2 in U.S. frozen food with products in growth categories • Innov
Slide 5: FY16 Sales – $37 Billion
FY16 Sales – $37 Billion Other Other 1% 4% Pork Prepared 11% International Foods 11% 20% Consumer Food Products Beef Service Chicken 53% 38% 32% 30% Sales by Segment Sales by Distribution Channel Tyson Foods, Inc. Investor Presentation | December 2016 |5
Slide 6: Advantaged Brands in Advantaged Categories
Advantaged Brands in Advantaged Categories “Core 9” Frozen Frozen 1 Prepared Chicken 1 Hot Dogs 1 Branded Stack Pack Bacon 1 Breakfast Sandwiches 1 Breakfast Sausage 1 Smoked Sausage 2 Branded Lunchmeat 1 Corn Dogs 1 Super Premium Sausage Sources: IRI, Total US Multi-Outlet, data thru 11/20/2016 Tys
Slide 7: Multiple Areas to Grow in Large Categories
Multiple Areas to Grow in Large Categories Frozen Prepared Frozen Protein Lunchmeat Bacon Hot Dogs Breakfast Sausage Smoked Sausage Chicken Breakfast 86% 78% 75% 62% 63% 52% 34% 37% 28% 30% 27% 28% 23% 7% Size of Category $6.5Bn $4.3Bn $2.5Bn $1.9Bn $2.0Bn $2.4Bn $1.7Bn Dollar Growth (2-yr CAGR) +0.
Slide 8: Brand Portfolio Participates Across Meal Occasions
Brand Portfolio Participates Across Meal Occasions Tyson Foods, Inc. Investor Presentation | December 2016 |8
Slide 9: Retail Packaged Brands
Retail Packaged Brands Product Innovations and Brand Adjacencies Tyson Foods, Inc. Investor Presentation | December 2016 |9
Slide 10: Tyson Tastemakers
Tyson Tastemakers® Currently in e-commerce and coming to traditional retail Tyson Foods, Inc. Investor Presentation | December 2016 |10
Slide 11: Tyson Foods Innovation Performance
Tyson Foods Innovation Performance insights Retail Packaged Brands innovation vitality growing FY16 14% FY15 12.5% innovation research & development % of sales dollars from Retail Packaged Brands products created in the previous three years Tyson Foods, Inc. Investor Presentation | December 2016 |11
Slide 12: #8 in Total U.S. CPG Retail Food Sales
#8 in Total U.S. CPG Retail Food Sales Among branded food companies > $5B Sales in Billions $25.8 In addition to retail, Tyson Foods is a leading supplier to the foodservice industry $21.4 $16.4 $12.2 $8.8 $7.8 $7.8 $7.6 $6.4 $6.2 $5.7 $5.7 $5.4 Source: IRI Total U.S. Multi-Outlet Sales, 52 weeks en
Slide 13: #2 in Frozen Food
#2 in Frozen Food Sales in Billions $7.1 Tyson Foods leads in the growth categories of frozen poultry and protein breakfast $3.5 $3.0 $2.4 $2.0 $1.9 $1.3 $1.2 $1.0 Source: IRI U.S. Multi-Outlet frozen category sales, 52 weeks ending 11/20/16 Tyson Foods, Inc. Investor Presentation | December 2016 |1
Slide 14: Tyson Core 9 Volume Performance
Tyson Core 9 Volume Performance Volume sales % change among top 10 branded food companies > $5B 7.2% 6.9% 5.8% -0.1% -0.7% Core 9 -2.0% -3.7% -4.6% -8.1% -9.4% -9.6% Source: IRI Total U.S. Multi-Outlet Volume Sales (Edible Foods), 13 weeks ending 11/20/2016 Tyson Foods, Inc. Investor Presentation |
Slide 15: Tyson Core 9 Dollar Performance
Tyson Core 9 Dollar Performance Dollar sales % change among top 10 branded food companies > $5B 3.4% 1.9% 0.9% 0.4% -0.2% -0.9% Core 9 -1.5% -1.9% -1.9% -6.7% -7.8% Source: IRI Total U.S. All Outlet (x Costco) All Edible Food Dollar Sales, 13 weeks ending 11/20/2016 Tyson Foods, Inc. Investor Presen
Slide 16: FY16 – Another Record Year
FY16 – Another Record Year YOY ($ in Millions) FY16 FY15 Growth Net Sales 36,881 40,623* -9% Adjusted Operating Income* 2,833 2,253 26% •Record Operating Income Adjusted Operating Margin* 7.7% 5.5% •Record Operating Margin Adjusted EPS* $4.39 $3.15 39% •Record Adjusted EPS* Operating Cash Flow 2,716
Slide 17: FY16 Adjusted EPS Growth Up 39% vs. FY 2015
FY16 Adjusted EPS Growth Up 39% vs. FY 2015 Projected 5-Year CAGR including midpoint of FY17 guidance = 19% $4.70 - 4.85 $4.39* $3.15* $2.94* $2.26* $1.97* FY12 FY13 FY14 FY15 FY16 FY17 proj. *Represents a non-GAAP financial measure. Adjusted EPS is explained and reconciled in the Appendix at “EPS R
Slide 18: Operating Cash Flow
Operating Cash Flow Strong Cash Flows to Fuel Future Growth $2,716 $2,570 $1,314 $1,187 $1,178 FY12 FY13 FY14 FY15 FY16 Operating Cash Flow ($ in millions) Tyson Foods, Inc. Investor Presentation | December 2016 |18
Slide 19: Net Debt/Adjusted EBITDA
Net Debt/Adjusted EBITDA* Positioned for growth through rapid deleveraging 3.0X 2.0X 1.7X .8X .7X FY12*** FY13*** FY14** FY15* FY16*** *Represents a non-GAAP financial measure. Net debt/adjusted EBITDA is explained and reconciled to a comparable GAAP measure in the Appendix. ** FY14 Net Debt/EBITDA
Slide 20: Priorities for Cash
Priorities for Cash Growing our businesses organically through operational efficiency and capital expansion projects, along with investing in innovation and brand building Acquiring businesses that support our strategic objectives Returning cash to shareholders through share repurchases and di
Slide 21: Returning Cash to Shareholders
Returning Cash to Shareholders Dividends Paid per Class A Share $0.70 $0.60 $0.50 $0.40 $0.30 $0.20 $0.10 $0.00 FY12 FY13 FY14 FY15 FY16 Regular Dividend Special Dividend Board of Directors increased regular quarterly dividend by 50% to $0.225 per share for Class A common Stock payable on 12/15/16 B
Slide 22: Synergies
Synergies FY15 – $322 million realized FY16 – $580 million realized FY17 – expecting approximately $675 million Synergy Categories: • Prepared Foods Improvements • Procurement • Manufacturing & Logistics • Organizational & Fiduciary Tyson Foods, Inc. Investor Presentation | December 2016 |22
Slide 23: FY17 Outlook
FY17 Outlook EPS of $4.70-4.85* Prepared Foods Segment operating 7-10% growth over FY16 adjusted EPS margin similar to fiscal 2016 results of 10% Sales of ~$37B Similar to FY16 as we grow volume Chicken Segment operating margin at across each segment, offset by lower or above the upper end of its 9-
Slide 24: Appendix
Appendix
Slide 25: TSN Performance vs. S&P and Peer Group
TSN Performance vs. S&P 500 and Peer Group* Comparison of 5-year cumulative total returns $600 $500 TSN $400 $300 S&P 500 $200 Peer Group $100 $0 FYE 10/1/11 9/29/12 9/28/13 9/27/14 10/3/15 10/1/16 The total cumulative return on investment (change in the year-end stock price plus reinvested dividend
Slide 26: Tyson Foods, Inc. Investor Presentation | December 2016 |26
Tyson Foods, Inc. Investor Presentation | December 2016 |26
Slide 27: Leading U.S. Protein Producers
Leading U.S. Protein Producers Tyson Foods Other Tyson Foods Tyson Foods 21% 25% 24% Other 18% 29% Other 47% Pilgrim’s Pride National Beef Smithfield 17% 10% 25% JBS USA Hormel Cargill 22% 8% 19% JBS USA 20% Sanderson Perdue Farms 8% Farms 7% U.S. Chicken Producers U.S. Fed Beef Packers U.S. Pork Pa
Slide 28: FY16 International Sales
FY16 International Sales Japan 17% Other 30% Mexico 15% Taiwan 4% China & Canada Hong Kong 6% South 21% Korea 7% FY16 International Sales $4.1 Billion* * Includes exports and in-country production in China and India Tyson Foods, Inc. Investor Presentation | December 2016 |28
Slide 29: FY16 International Sales
FY16 International Sales South Korea 4% Other 12% Other Canada Japan 32% 30% China & H.K. 11% 37% Canada 12% Mexico Mexico S. Korea 22% 24% Japan 11% 5% FY16 International Pork Sales FY16 International Prepared Foods Sales $848 Million $87 Million Tyson Foods, Inc. Investor Presentation | December 2
Slide 30: FY16 International Sales
FY16 International Sales Other Canada Japan China & 17% 4% 18% Hong Kong 23% Other Mexico 48% Italy 6% 12% Mexico 11% Taiwan 7% South China & Korea Brazil India 6% Hong Kong 12% 6% 24% Canada Guatemala 3% 3% FY16 International Chicken Sales* FY16 International Beef Sales $1.2 Billion $2.0 Billion *I
Slide 31: Chicken Segment: The Road to Higher, More Stable Margins
Chicken Segment The Road to Higher, More Stable Margins Optimize cost structure Change pricing structure Upgrade value-added Buy vs. Grow strategy Deliver high quality products products and customer service Tyson Foods, Inc. Investor Presentation | December 2016 |31
Slide 32: Debt Maturity Profile
Debt Maturity Profile Fiscal Year Maturities As of 10/1/16 ($ in millions) 2,250 2,000 1,750 Pre-Payable 1,500 1,250 1,000 750 500 250 0 '16 '17 '18 '19 '20 '21 '22 '23 '24 '33 '34 '44 TFI Bonds Hillshire Bonds Term Loans • Term loans are pre-payable at par. • Excludes $71 million Tangible Equity Un
Slide 33: Sales, Operating Income and Operating Margin Reconciliations
Sales, Operating Income and Operating Margin Reconciliations In millions (Unaudited) Fiscal Year 2016 2015 Reported Sales $ 36,881 $ 41,373 Less: Impact of additional week (a) - (750) Adjusted sales $ 36,881 $ 40,623 Reported operating income $ 2,833 $ 2,169 Add: China impairment - 169 Add: Merger a
Slide 34: Net Debt/EBITDA Reconciliations
Net Debt/EBITDA Reconciliations In millions (Unaudited) Fiscal 2016 (a) Fiscal 2015 (a) Fiscal 2014 (a) Fiscal 2013 (a) Fiscal 2012 (a) Net income $ 1,772 $ 1,224 $ 856 $ 778 $ 576 Less: Interest income (6) (9) (7) (7) (12) Add: Interest expense 249 293 132 145 356 Add: Income tax expense 826 697 39
Slide 35: Net Debt/EBITDA Reconciliations – continued
Net Debt/EBITDA Reconciliations – continued (a) EBITDA and Adjusted EBITDA for fiscal 2015 were based on a 53-week year while fiscal 2016, 2014, 2013 and 2012 are based on a 52-week year. (b) Excludes the amortization of debt discount expense of $8 million, $10 million, $10 million, $28 million and
Slide 36: Segment Operating Income Reconciliations
Segment Operating Income Reconciliations In millions (Unaudited) Adjusted Segm ent Operating Incom e (Loss) (for 12 months ended October 3, 2015) Prepared C hick en Beef Pork F oods Other Total Reported operating income (loss) $ 1,366 $ (66) $ 380 $ 588 $ (99) $ 2,169 Add: China impairment - - - - 1
Slide 37: EPS Reconciliations
EPS Reconciliations In millions, except per share data (Unaudited) 12 Months Ended October 1, 2016 October 3, 2015 September 27, 2014 September 28, 2013 September 29, 2012 Operating Operating Operating Operating Operating Income EPS Income EPS Income EPS Income EPS Income EPS Reported from Continuin