Smithfield Foods, Inc. · NASDAQ:SFD
Smithfield Foods — Barclays Capital Back-To-School Consumer Conference (September 2009)
30 slides from Smithfield Foods's conference presentation, Sep 10, 2009
Slide 1: Barclays Capital Back-To-School Consumer Conference
Barclays Capital Back-To-School Consumer Conference C. Larry Pope, President and Chief Executive Officer Robert W. Manly, Executive Vice President and Chief Financial Officer Smithfield Foods, Inc. September 10,
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains “forward-looking” statements within the meaning of the federal securities 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
Slide 3: Emerging As A Global Leader In Packaged Meats
Emerging As A Global Leader In Packaged Meats
Slide 4: Market Leader: Pork Processing
Pork Sales: $10.5 billion Operating Profit: $395.2 million • World’s largest pork processor • Sold approximately 3.1 billion pounds of packaged meats in FY09 • Processed 33 million hogs in FY09 • Sold approximately 4.5 billion pounds of fresh pork in FY09 Note: Fiscal 2009 sales (before eliminations
Slide 5: Smithfield sold approximately 3.1 billion pounds of packaged meats in fiscal 2009
Smithfield sold approximately 3.1 billion pounds of packaged meats in fiscal 2009 (% of Smithfield U.S. packaged meats volume)
Slide 6: Market Leadership: International
International Sales: $1.4 billion Operating Profit: $34.9 million #1 #1 • Subsidiaries in Poland, Romania and the United Kingdom • 37% ownership of Campofrío Food Group (public company) with #1 packaged meats market share in France, Spain, The Netherlands, Belgium and Portugal • Joint ventures in Me
Slide 7: Market Leader: Turkey Processing
Other Segment Sales: $251 million Operating Loss: $(46.6) million • Butterball is the largest turkey processor in the U.S. • Segment comprised of turkey production operations, 49% interest in Butterball and interest in live cattle joint venture operations Note: Fiscal 2009 sales (before eliminations
Slide 8: Market Leader: Hog Production
Hog Production Sales: $2.8 billion Operating Loss: $(521.2) million • World’s largest hog producer • Produced 18.7 million hogs in U.S. in FY09 • Produced 1.7 million hogs in Poland and Romania and 1.7 million hogs at Mexican joint ventures in FY09 Note: Fiscal 2009 sales (before eliminations) and o
Slide 9: The New Era of Smithfield
The New Era of Smithfield
Slide 10: The New Era of Smithfield
The New Era of Smithfield • Restructured Pork Group primed for higher performance and stability of earnings • Focus on synergies, efficiency, ROIC and margins • Increased financial management with focus on deleveraging the balance sheet and maintaining strong liquidity • Business focus on maximizing
Slide 11: Pork Group Restructuring Update
Pork Group Restructuring Update • Streamlined Pork Group structure by reorganizing management team - DONE • Consolidated seven IOC’s into three and closed five processing plants to date; sixth to close in third quarter - DONE • Merged three fresh pork sales organizations into two and consolidated th
Slide 12: Pork Group Restructuring Costs/Benefits
$50 million $37 million $74 million $125 million Pork Group Restructuring Costs/Benefits
Slide 13: Pork Group Restructuring Costs/Benefits
Capital requirements One time expenses Non-cash asset write-off Annual EBT Improvements Total $50 million $37 million $74 million $125 million Amount previously incurred/achieved $18 million $20 million $74 million $8 million Amount remaining after FY 10 Q1 $32 million $17 million - $117 million Por
Slide 14: Packaged Meats Margin Growth
Note: FY 09 and FY 10 Q1 results before restructuring charges Packaged Meats Margin Growth
Slide 15: Packaged Meats EBT Growth
Note: FY 09 and FY 10 Q1 results before restructuring charges Packaged Meats EBT Growth
Slide 16: Packaged Meats Contribution
Packaged meats will continue to drive pork segment earnings contribution $4.27 $5.96 $11.97 $14.12 Note: Results before restructuring charges Packaged Meats Contribution
Slide 17: Hog Production Operating Profit (Loss)
Smithfield has proactively reduced the size of its sow herd by 13% in an effort to return hog production to normalized levels of profitability Hog Production Operating Profit (Loss)
Slide 18: U.S. Sow Herd Reduction
Smithfield will produce approximately 1.4 million fewer market hogs in fiscal 2010 and approximately 2.2 million fewer market hogs annually thereafter U.S. Sow Herd Reduction
Slide 19: Financial Management
Financial Management
Slide 20: Restructuring the Balance Sheet
Restructuring the Balance Sheet • Reduced total debt • Removed risk – Covenant – Liquidity – Maturities
Slide 21: Restructured $2 Billion In Debt
Size Maturity Asset-Based Revolving Credit Facility $1.0 billion July 2012 Senior Secured Notes $625 million July 2014 Senior Secured Notes $225 million July 2014 Term Loan Maturity Extension $200 million October 2013 New credit facility contains no currently applicable maintenance covenants Estimat
Slide 22: Improving Liquidity
Smithfield continues to improve liquidity and has reduced net debt by over $1.1 billion from the previous fiscal year 1 Note: Amounts reflect unused borrowing capacity under U.S. credit facility at quarter end plus invested and liquid cash 1 FY 09 Q1 versus FY 10 Q1 Improving Liquidity
Slide 23: Long-Term Debt Maturities
Smithfield has no significant debt maturities until fiscal 2012 Long-Term Debt Maturities
Slide 24: Total Debt to Total Capitalization
Goal is to reduce debt to total capitalization to below 50% in next 24 months Note: FY 10 Q1 Pro forma debt is net of short-term cash investments Total Debt to Total Capitalization
Slide 25: Smithfield
Smithfield a
Slide 26: U.S. Pork Exports 2000 vs. 2008
U.S. pork export volume has increased 263% since 2000 4.7 billion pounds; 23 million hogs; 20% of U.S. production 1.3 billion pounds; 7 million hogs; 7% of U.S. production U.S. Pork Exports 2000 vs. 2008
Slide 27: Export Customer Reliability
Smithfield’s export markets vary in terms of their level of reliability *Other Category consists of sales to the following countries: Taiwan, EU, Australia, Bahamas, Bermuda, Brazil, Bulgaria, Caribbean, Chile, Columbia, Dominican Republic, El Salvador, Guatemala, Haiti, Honduras, Malaysia, New Zeal
Slide 28: Smithfield
Smithfield a
Slide 29: Conclusion
Conclusion • Pork Group profitability is already benefitting from restructuring plan and will increase in fiscal 2010 and • Packaged meats business performing at record levels • Continuing to maintain very strong liquidity position, reduce debt and strengthen the balance sheet • Hog production resul
Slide 30: Smithfield
Smithfield @
Smithfield Foods — Barclays Capital Back-To-School Consumer Conference (September 2009) on 6ix