Tyson Foods, Inc. · NYSE:TSN
Tyson Foods — Merger or Acquisition (May 2014)
17 slides from Tyson Foods's merger presentation, May 29, 2014
Slide 1: Tyson Foods $50 per share Offer to Acquire Hillshire Brands
Tyson Foods $50 per share Offer to Acquire Hillshire Brands May 29, 2014
Slide 2: Meeting Participants
2 MEETING PARTICIPANTS • Donnie Smith President & Chief Executive Officer • Dennis Leatherby Chief Financial Officer • Jon Kathol Vice President Investor Relations
Slide 3: Forward Looking Statements
3 FORWARD LOOKING STATEMENTS Certain information contained in this presentation may constitute forward-looking statements, such as information relating to expected performance. These forward-looking statements are subject to a number of factors and uncertainties that could cause actual results and e
Slide 4: Agenda
4 AGENDA Transaction Overview Financial Performance Transaction Rationale
Slide 5: Offer Summary
5 OFFER SUMMARY • An all cash offer for Tyson to acquire Hillshire Brands at $50.00 per share • Tyson has secured financing commitments for a bridge financing facility • Assumes no Pinnacle Foods transaction Transaction Details • Transaction value of $6.8 Billion including Hillshire net debt • Offer
Slide 6: Growth Strategy
6 GROWTH STRATEGY Accelerate • Grow domestic value-added chicken sales Grow prepared foods sales • Grow international chicken production Innovate Products and services Consumer insights Cultivate Talent development to support Tyson’s growth and long-term future This acquisition accelerates o
Slide 7: Value Creation for Shareholders
7 VALUE CREATION FOR SHAREHOLDERS Compelling investment consistent with strategic priorities Continues Tyson’s shift toward higher margin prepared foods and branded products A retail packaged meat business that is highly complementary to existing businesses Attractive valuation with significa
Slide 8: Hillshire Has Market Leading Brands
8 HILLSHIRE HAS MARKET LEADING BRANDS Focused Portfolio of Brands… …with leading share in core retail categories Source: Symphony IRI Group, Total US Multi-Outlet, 52 weeks ending 1/5/14 Market Share in Leading Categories HSH Share Relative Market Brand Category Position Share Breakfast Sausage #1 2
Slide 9: Complementary to Tyson's Portfolio
Beef 23% Pork 22% Chicken 56% Prepared 5% International -6% Beef 37% Pork 14% Chicken 28% Prepared 18% International 3% Beef 41% Pork 15% Chicken 31% Prepared 9% International 4% Beef 19% Pork 19% Chicken 47% Prepared 20% International (5%) 9 COMPLEMENTARY TO TYSON’S PORTFOLIO LTM 3/29/14 Revenue Co
Slide 10: Provides Significant Lift to Prepared Foods' Segment Margins
Beef 19% Pork 19% Chicken 47% Prepared 20% International (5%) Beef 23% Pork 22% Chicken 56% Prepared 5% International -6% PF Combined (Adj.) ($1,924MM) (Op Income Margin = 4.9%) LTM 3/29/14 Operating Income Contribution Tyson ($1,608MM) (Op Income Margin = 4.5%) 10 PROVIDES SIGNIFICANT LIFT TO PREPA
Slide 11: Expansion of Tyson Branded Portfolio
11 EXPANSION OF TYSON BRANDED PORTFOLIO Tyson Brands Hillshire Brands
Slide 12: Strong Combined Financials
LTM 3/29/14 Pro Forma ($ in millions) Tyson Foods Hillshire Combined Financials Net Sales $35,418 $3,983 $39,401 EBITDA $2,100 $511 $2,611 EBITDA % 5.9% 12.8% 6.6% Sales By Channel 12 STRONG COMBINED FINANCIALS Food Service 26% Consumer Products/Retail 74% Food Service 33% Consumer Products/Retail 4
Slide 13: Value Creation for Shareholders
13 VALUE CREATION FOR SHAREHOLDERS Compelling investment consistent with strategic priorities Continues Tyson’s shift toward higher margin prepared foods and branded products A retail packaged meat business that is highly complementary to existing businesses Attractive valuation with signific
Slide 14: Appendix
14 APPENDIX
Slide 15: EBITDA Reconciliation
15 EBITDA RECONCILIATION (In millions) Tyson Foods, Inc. (Unaudited) Twelve Months Ended March 29, 2014 Net income 966$ Less: Interest income (9) Add: Interest expense 125 Add: Income tax expense 522 Add: Depreciation 478 Add: Amortization 18 EBITDA 2,100$ Hillshire Brands Twelve Months Ended March
Slide 16: Operating Income Reconciliation
16 OPERATING INCOME RECONCILIATION (In millions) Twelve Months Ended (Unaudited) March 29, 2014 Tyson Foods Operating Income 1,608$ Hillshire Brands Operating Income 296 Adjustments: Total restructuring actions excluding accelerated depreciation 69 Accelerated depreciation 17 Other significant items
Slide 17: Operating Income % Reconciliation
17 OPERATING INCOME % RECONCILIATION (In millions) (Unaudited) Operating Operating Sales Income Margin Tyson Foods - Prepared Foods 3,445$ 77$ 2.2% Hillshire Brands 3,983 296 Adjustments: Total restructuring actions excluding accelerated depreciation 69 Accelerated depreciation 17 Other significant