Tyson Foods, Inc. · NYSE:TSN
Tyson Foods — Q2 2024 Earnings Presentation
25 slides from Tyson Foods's earnings presentation, May 6, 2024
Slide 1: Q2 Fiscal 2024 Supplemental Information
Q2 Fiscal 2024 Supplemental Information May 6, 2024
Slide 2: Forward-Looking Statements and Non-GAAP
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 2024, other future economic
Slide 3: 2Q24 Key Messages
3 2Q24 Key Messages 1 Clear benefits of multi-protein portfolio – driving improved outlook 2 Controllables in focus 3 Brands remain strong 4 Driving cash flow and long-term shareholder value 3
Slide 4: Strong brands support healthy market share
Strong brands support healthy market share Tyson Core Business Lines Dollar Share 27.5% 27.1% 26.4% 26.5% 26.6% 26.3% 25.9% 25.1% 25.4% 24.9% 24.9% 25.1% 24.6% 24.5% 24.5% 23.9% 24.0% 23.8% 23.7% 22.6% 22.9% Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21 Q3 '21 Q4 '21 Q1 '22 Q2 '22 Q
Slide 5: Segment Highlights
Segment Highlights PREPARED FOODS CHICKEN • YTD performance in line with expectations • Operational improvements & market tailwinds • Lower raw material costs & operating drove $326M YoY AOI1 increase in Q2 efficiencies driving solid AOI1 • Focused on fundamentals of live operations, plant efficienc
Slide 6: Setting the Table
Setting the Table- OUR MISSION To bring high-quality food to every table in the world, safely, sustainably, affordably, now and for future generations OUR PURPOSE We feed the world like family.” OUR STRATEGIC PILLARS Fortify Foundation Build Brands Grow Globally Deliver margins in core protein busin
Slide 7: Fiscal 2024 Priorities – Controlling the Controllables
Fiscal 2024 Priorities – Controlling the Controllables 1 Focus on capex & working capital to drive cash flow & support dividend 2 Continually optimize manufacturing footprint & network design 3 Restore performance in Chicken; sustain strength in Prepared Foods 4 Manage Beef through cattle cycle; dri
Slide 8: Sales, AOI and EPS Performance
Sales, AOI and EPS Performance Second Quarter FY24 vs Comparable Prior Year Period SALES ADJUSTED OPERATING INCOME1 ADJUSTED EPS1 (in millions of dollars) (in millions of dollars) (in dollars per share) $13,133 $13,072 $0.62 $12 -$19 $64 -$42 $406 $326 $65 $(0.04) 2Q23 2Q24 2Q23 Chicken Pork Int'l/O
Slide 9: Solid Performance in Prepared Foods
Solid Performance in Prepared Foods Second Quarter FY24 vs Comparable Prior Year Period SALES ADJUSTED OPERATING INCOME1 HIGHLIGHTS (in millions of dollars) (in millions of dollars) o Volume growth driven by Williams acquisition $2,422 o Average sales price decreased primarily due to $2,404 $252 mix
Slide 10: Strategic actions, improving macro driving stronger results in Chicken
Strategic actions, improving macro driving stronger results in Chicken Second Quarter FY24 vs Comparable Prior Year Period SALES ADJUSTED OPERATING INCOME1 HIGHLIGHTS (in millions of dollars) (in millions of dollars) o Volume decreased driven by lower production $160 o Average sales price decreased
Slide 11: Beef industry fundamentals remain challenging
Beef industry fundamentals remain challenging Second Quarter FY24 vs Comparable Prior Year Period SALES ADJUSTED OPERATING INCOME1 HIGHLIGHTS (in millions of dollars) (in millions of dollars) o Sales increased driven by higher price per pound $4,954 and higher average carcass weights $8 o Operating
Slide 12: Improving spreads in Pork
Improving spreads in Pork Second Quarter FY24 vs Comparable Prior Year Period SALES ADJUSTED OPERATING INCOME1 HIGHLIGHTS (in millions of dollars) (in millions of dollars) o Sales increased driven by higher pricing and $33 volume growth o Operating income increased as spreads improved $1,486 2Q23 2Q
Slide 13: Strong cash generation and improving financial health
Strong cash generation and improving financial health Leverage Ratio OPERATING CASH FLOW (Net Debt/Adj. EBITDA)1 (in millions of dollars) BUILD 4.1x $1,177 FINANCIAL 3.2x 3.9x 3.6x STRENGTH Manage our leverage ratio to be at or below our long-term target Q3'23 Q4'23 Q1'24 Q2'24 Capital Expenditures
Slide 14: FY24 Revised Guidance
FY24 Revised Guidance FY2024 Guidance2 Prior Indication Revised Indication Sales ~Flat Unchanged Prepared Foods AOI1 $800M - $1B $850M-950M Chicken AOI $500-700M $700-900M Beef AOI1 $(400)-0M $(400)-(100)M Pork AOI1 $0-100M $50-150M Total AOI1 $1.0B - 1.5B $1.4B – 1.8B Capital Expenditures $1.0B – 1
Slide 15: Q&A
Q&A Donnie King John R. Tyson Brady Stewart Melanie Boulden Wes Morris Amy Tu President & CEO CFO Group President, Group President, Group President, President, International Beef, Pork and Chief Prepared Foods and Poultry Supply Chain Officer Chief Growth Officer
Slide 16: Appendix
Appendix
Slide 17: Segment Sales Channel Bridge
Segment Sales Channel Bridge Second Quarter FY24 vs Comparable Prior Year Period $ millions $65 -$54 $13,133 -$18 -$365 $337 -$26 $13,072 Retail Retail Foodservice Foodservice Retail Retail Export Export Foodservice Foodservice Industrial/ Industrial/ Export Export Other Other Industrial/ Industrial
Slide 18: AOI Bridge by P&L Items
AOI Bridge by P&L Items Second Quarter FY24 vs Comparable Prior Year Period $ millions $220 $0 $406 $132 $65 - $11 1 Q2 2023 AOI Net Volume Impact 2 Sales Price/Mix COGS Price/Mix 3 SG&A 4 Q2 2024 AOI 1 1 Represents a non-GAAP financial measure. Non-GAAP financial measures are explained and reconcil
Slide 19: Non-GAAP Financial Measures
Non-GAAP Financial Measures Adjusted Operating Income (Loss), Adjusted Income (Loss) before Income Taxes, Adjusted Income Tax Expense (Benefit), Adjusted Net Income (Loss) Attributable to Tyson and Adjusted EPS, EBITDA, Adjusted EBITDA, net debt to EBITDA, net debt to Adjusted EBITDA and Free Cash F
Slide 20: GAAP Results to Non-GAAP Results Reconciliations
GAAP Results to Non-GAAP Results Reconciliations $ in millions, except per share data (Unaudited) Results for the second quarter ended March 30, 2024 Selling, General Operating Other Income (Loss) Income Tax Cost of Net Income (Loss) EPS Sales and Income (Income) before Income Expense Sales Attribut
Slide 21: Adjusted Operating Income (Loss) Non-GAAP Reconciliations
Adjusted Operating Income (Loss) Non-GAAP Reconciliations $ in millions (Unaudited) Adjusted Segment Operating Income (Loss) (for the second quarter ended March 30, 2024) International/ Beef Pork Chicken Prepared Foods Total Other Reported operating income (loss) $ (35) $ (1) $ 158 $ 230 $ (40) $ 31
Slide 22: EBITDA and Adjusted EBITDA Non-GAAP Reconciliations
EBITDA and Adjusted EBITDA Non-GAAP Reconciliations $ in millions, except per share data (Unaudited) Six Months Ended Fiscal Year Ended Twelve Months Ended March 30, 2024 April 1, 2023 September 30, 2023 March 30, 2024 Net income (loss) $ 262 $ 229 $ (649) $ (616) Less: Interest income (24) (16) (30
Slide 23: EBITDA and Adjusted EBITDA Non-GAAP Reconciliations
EBITDA and Adjusted EBITDA Non-GAAP Reconciliations $ in millions, except per share data (Unaudited) Three Months Ended Fiscal Year Ended Twelve Months Ended December 30,2023 December 31, 2022 September 30, 2023 December 30,2023 Net income (loss) $ 114 $ 320 $ (649) $ (855) Less: Interest income (10
Slide 24: EBITDA and Adjusted EBITDA Non-GAAP Reconciliations
EBITDA and Adjusted EBITDA Non-GAAP Reconciliations $ in millions, except per share data (Unaudited) Nine Months Ended Fiscal Year Ended Twelve Months Ended July 1, 2023 July 2, 2022 October 1, 2022 July 1, 2023 Net income (loss) $ (206) $ 2,712 $ 3,249 $ 331 Less: Interest income (22) (10) (17) (29
Slide 25: Free Cash Flow Non-GAAP Reconciliation
Free Cash Flow Non-GAAP Reconciliation $ in millions (Unaudited) Six Months Ended March 30, 2024 April 1, 2023 Cash Provided by Operating Activities $ 1,177 $ 769 Additions to property, plant and equipment (621) (1,097) Free cash flow $ 556 $ (328) TYSON FOODS, INC. MAY 6, 2024 25