Pilgrim's Pride Corporation · NASDAQ:PPC
Pilgrim's Pride — KeyBanc Capital Markets Consumer Conference (March 2010)
36 slides from Pilgrim's Pride's conference presentation, Mar 4, 2010
Slide 1: Pilgrim's Pride Corporation
Pilgrim’s Pride Corporation Key Banc Capital Markets Consumer Conference
Slide 2: Cautionary & Forward Looking Statements
Cautionary & Forward Looking Statements Statements cartained in this presentation that stare our intentions, beliefs, expectations or predictions for the future, dented by the words “anticipate,” “believe,” “estimate, should’ “expect,” project,” “plan,” “imply,” “intend,” “foresee” and similar expre
Slide 3: Pilgrim's Pride at a Glance
Pilgrim’s Pride at a Glance ® Founded in 1946; IPO in 1986 ™ Second-largest chicken producer in the U.S. and Mexico ™ Operates processing plants, feed mills, hatcheries and distribution centers in 15 states, Puerto Rico and Mexico ™ 41,000 employees and approximately 4,400 contract growers lm LTM En
Slide 4: Reorganization Summary
Reorganization Summary ™ Since 2008, Pilgrim’s Pride has: - Closed/idled 9 processing plants — Sold1 plant — Eliminated 14,000 positions and approximately 1,000 contract growers — Completed two phases of restructuring with estimated cost savings of $190 million ™ PPC emerged from 13-month bankruptcy
Slide 5: The New Pilgrim's Pride
The New Pilgrim’s Pride © Today Pilgrim’s Pride has: — Anew management team — Animproved product mix with less exposure to commodity chicken — Growing volume in our core retail and foodservice businesses — Improved operational efficiency from labor, yield and through-put — Lower SG&A asa result of r
Slide 6: Business Strategy
Business Strateg @ Becomea market-driven company — The market will dictate what PPC does — operations will respond to market needs = Will minimize commodity chicken production — Core retail and foodservice customer demand is driving supply and production planning — Supply chain will optimize product
Slide 7: Geographic Footprint
Geographic Footprint
Slide 8: Distribution Channels
Distribution Channels Broadline Distributors National account QSR
Slide 9: Sales & Marketing Overview
Sales & Marketing Overview www.pilgrimspride.com
Slide 10: Restructured Sales & Marketing Team
Restructured Sales & Marketing Team ® Realigned sales management team to bring us closer to the customers — Jerry Wilson EVP Sales and Marketing — Tom Bell Foodservice Distributors — Rick Grondin Corporate and Industrial Sales — Randy Meyers Consumer — Andy Seymour Prepared Foods Marketing — Steve S
Slide 11: Sales & Marketing
Sales & Marketing Strengthened sales management team: — Established P&L accountability within the sales and marketing organization by line of business Market driven vs. production driven Supply based on forecasted demand Supply chain: Demand — Fullyintegrated business planning Supply and execution C
Slide 12: Sales Objectives
Sales Objectives ™ Recapture and grow volume in further processed Corporate and Industrial Sales ™ Reduce exposure to commodity sales ® Grow volume and share in Case Ready | Grow volume and share in further processed Retail ® Maintain share during recovery of Fresh Foodservice customers
Slide 13: Geographic Sales Mix and Diversified Markets
Geographic Sales Mix and Diversified Markets Net Sales U.S. Chicken Sales LTM Ending 12/27/09 LTMEnding 12/27/09 $6,813.9 mm @ $5,811.0 mm @ Geographic Sales Mix Diversified End Markets‘)
Slide 14: Continued Focus on Reducing Commodity Chicken Sales
Continued Focus on Reducing Commodity Chicken Sales U.S. Chicken Sales Volumes U.S. Chicken Sales Volumes Quarter Ending 12/27/08 Quarter Ending 12/27/09 1,445.2 mm 1,731.2 mm Diversified End Markets (1) Diversified End Markets) (1) Percentage of 5. chicken sales dollars
Slide 15: Pilgrim's Pride Brand Recognition
Pilgrim’s Pride Brand Recognition PIERCE . CHICKEN We mate Chicken e019 es
Slide 16: Top Customers Represent 71% of Company Sales
Publix. & ‘s |SAFEWAY Top 50 Customers Represent 71% of Company Sales
Slide 17: Integration Update
Integration Update www.pilgrimspride.com
Slide 18: PPC-JBS Integration Update
PPC-JBS Integration Update ® OnJanuary 5, PPC announced the elimination of 230 corporate positions — 160 at corporate headquarters in East Texas — Remaining positions spread over one dozen sites — Nodirect impact on operations or production — Estimated savings = $16 million = Further changes will be
Slide 19: Financial Overview
Financial Overview www.pilgrimspride.com
Slide 20: Financial Improvement
Financial Improvement Net income (loss) per common share - basic: Income {loss) from continuing operations attributable to Pilgrim's Pride Corporation common stockholders Income from discontinued business attributable to Pilgrim's Pride Corporation common stockholders Net income {loss) attributable
Slide 21: Financial Improvement
Financial Improvement Net Sales $0.8 $2.0 - — $0.6 $0.4 2 sis Net income $0.2 t lisse) goo 2 2 e % s10 $0.2 § = < $0.4 2 $0.5 $0.6 -$0.8 $0.0 ~ + + $1.0 2008 2009 2010 FY 2008 FY 2009 FY 2010 Qlend Zend Q3end Q4end FYend Qlend QZend Q3end Q4end FYend Qlend Dec 2007 Mar 2008 June 2008 Sep 2008 Sep 20
Slide 22: Historical EBITDA margins vs. peers
SS & 2 c z a & a ir 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 — Tyson (Chicken Only) — Sanderson —==PPC Historically, EBITDA margins for the three chicken companies fluctuated from a low range of 4% to 6% to a high range of 11% to 16%
Slide 23: Clear Focus on Cost Reduction
Clear Focus on Cost Reduction Selling, General & Administrative Costs Sin millions $92.4 Say ss Quarter Ending 12/27/08 Quarter Ending 12/27/09 PPC reduced SG&A by $75 millionin fiscal 2009 Additional $16 million reduction in SG&A in transition quarter ended December 27, 2009 Further savings to come
Slide 24: Summary of Operations
Summary of Operations Q110 End Q109 End LM Ending LIM Ending Dec 2009* _Dee 2008 Dee 2008 Dee 2008 Net {Loss} Income from Continuing Operations $ 33,925 $ (229,367) $ 111,098 $ (1,188,373) Add: Income Tax Expense (benefit) (102,371) 78 (124,235) (201,919) Interest Expense, Net 44,193 39,038 162,698
Slide 25: Capital Structure
Capital Structure @ Exit credit facility of $1.75 billion — Revolvingloan of $600 million — Term loanA commitment of $375 million; 3-year maturity — Term loanB commitment of $775 million;5-year maturity | PPC drew down approximately $1.25 billion when we emerged from bankruptcy © Debt today is appro
Slide 26: Industry Update
Industry Update www.pilgrimspride.com
Slide 27: Poultry Industry Ranking
Poultry Industry Ran U.S. Chicken Industry Leaders Market Share by Production Mountaire Farms, 4.4% Other, 33.6% ‘Tyson Foods, 20.3% Pilgrim's Pride, 18.7% Source: WATT Poultry USA, February 2010
Slide 28: Broiler Production Update
Broiler Production Update In 2009, U.S. broiler production declined for the first time since the early 1970s; production is expected to increase slightly in 2010 US Broiler Production, Ready to Cook USDA Estimates 8 45% 4 35% 25% 15% 05% 05% BS eee & Billion Pounds 15% jercent Change YoY w # 25% a 8
Slide 29: Cold Storage Inventories
Cold Storage Inventories Oct | Nav | Dec —a 2009 690 643 632 G54 638 649 676 G41 632 657 #2010 623 | 579 573 S77 556 578 579 568 580 609 | 653 ——High'0409 919 | 922 864 834 767 773 733 749 (774 802 | 875 924 ——Low'04'09 | 531 539 595 600 599 622 639 616 632 657 Source: USDA (excudinghens, February 2
Slide 30: Export Update
Export Update = Current issues: — December 2009 — Russia announced ban on U.S. chicken due to chlorination issues. Negotiations toward a resolution continue. — February 2010—China announced duties ranging from 43.1% to 105.4% on U.S. chicken imports after alleging that U.S. producers sold product at
Slide 31: Pricing Trends - Feed Ingredients
Pricing Trends - Feed Ingredients Feed ingredient prices have fallenin recent weeks after USDA projected record crop production for the 2009/10 marketing season Soybean Meal — - = Corn soybean meal (dollar/ton) $e ¢@ @ £€ © F Y Source: Chicago Board of Trade updated through February 24, 2010,
Slide 32: The New Pilgrim's Pride: Repositioned for Profitable Growth
The New Pilgrim's Pride Repositioned for Profitable Growth ™ PPC exceeded operational and financial goals in fiscal 2009 ™ PPChas taken decisive action and created a comprehensive business plan — Leadership changes: management is focused on delivering the plan — Demand driven: focused on customer re
Slide 33: Appendix
Appendix www.pilgrimspride.com
Slide 34: Reconciliation of LTM Net Sales Ending Dec 2009
Reconciliation of LTM Net Sales Endi Dec 2009 {Sin mitions} a2 tat 3 tad Osta Qi ead on ead mar 2009 Jun 2009 Sen 2005 Dec 205° Dee 2008 Met Sates Chicken Sales: United States Prepared Foods: Foodservice $ 35 $ «98 $ 405 $ 4m9 $ 17 Retail 134 17.2 m21 49 457.6 ‘Total Prepared 556.9 557.0 362.6 535.8
Slide 35: Reconciliation of Adjusted LTM EBITDAR Ending Dec 2009
Reconciliation of Adjusted Ending Dec 2009 209 End = Q30GEnd § QaOSEnd = QL10End — LIM Ending Girmivons) Mar 2009 _Jun2008__ Sep2009_ Dee 2009" _Dee 2009 Net (Loss) Income from Continuing Operations ${58,790) $ 53239 $ 2,728 $ 33925 $ 111,088 Add: Income Tax Expense (benefit) 2,347 555 (24,766) (102
Slide 36: Reconciliation of Adjusted LTM EBITDAR Ending Dec 2008
Reconciliation of Adjusted LTM EBITDAR Ending Dec 2008 Net (Loss) Income from Continuing Operations Add: Income Tax Expense (benefit) Interest Expense, Net Depreciation and amortization Minus: Amortization of Capitalized Financing Costs EBITDA. Post-petition reorganization Items Allowed loss on deri
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