Tyson Foods, Inc. · NYSE:TSN
Tyson Foods — Q2 2021 Earnings Presentation
26 slides from Tyson Foods's earnings presentation, May 10, 2021
Slide 1: Q2 Fiscal 2021 Supplemental Information
— Q2 Fiscal 2021 Supplemental Information May 10, 2021
Slide 2: Forward-Looking Statements
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 2021, other future economic
Slide 3: Strong first half results demonstrate operational agility
Strong first half results demonstrate operational agility Advancing the health, safety, and 1. wellness of our global team members Capitalizing on strengthening protein 2. and consumer fundamentals Driving growth through innovation and 3. retail excellence Making progress on key priorities for 4. sh
Slide 4: Sustained focus on team member health and safety
Sustained focus on team member health and safety Scaling COVID-19 vaccine Expanding company health, Implementing COVID-19 deployment efforts safety, and wellness resources monitoring and testing protocols • On-going collaboration with Matrix Medical as well • Launched first of seven health clinics f
Slide 5: Track record of retail growth and share gains
Track record of retail growth and share gains Percent volume change for Tyson Core Business Lines 26.4% Maintaining growth, although at a lower rate due to COVID consumption surge in comparable period last year 20.7% 14.9% 14.7% 6.5% 4.7% 5.4% 4.2% 2.7% 2.0% 1.2% FY ' 18 - Q4 FY '19 - Q1 FY '19 - Q2
Slide 6: Robust product innovation driven by consumer insights
Robust product innovation driven by consumer insights Raised & Rooted Jimmy Dean Breakfast Nuggets Private Label Chicken Sandwich o Plant-based patties, sausages, and o Jimmy Dean brand leadership in o Restaurant-style chicken sandwich with ground products deliver taste with less breakfast offerings
Slide 7: Navigating a complex consumer landscape
Navigating a complex consumer landscape Protein consumption remains Foodservice industry on the Retail consumption levels strong road to recovery likely to stick for some time of consumers say of consumers say they are deliberately ~76% 29% they are continuing to stock up on food 54% adding protein
Slide 8: Chicken Financial Results
Chicken Financial Results Second Quarter and First Half 2021 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 KEY HIGHLIGHTS (in billions of dollars) (in millions of dollars) o Sales volume declined due to production inefficiencies related to labor availability and severe winter weather o Aver
Slide 9: Imperatives for improving Chicken operating results
Imperatives for improving Chicken operating results Employer of Choice Improve Operational Performance Serve our Customers Tailwinds › Increasing team member pay, benefits, › Achieved improvements related to yield, mix, › Executing pricing actions to recover inflationary flexible scheduling, and oth
Slide 10: Prepared Foods Financial Results
Prepared Foods Financial Results Second Quarter and First Half 2021 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 KEY HIGHLIGHTS (in billions of dollars) (in millions of dollars) o Sales volume down as growth in the retail channel was offset by a reduction in foodservice, as well as a chall
Slide 11: Beef Financial Results
Beef Financial Results Second Quarter and First Half 2021 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 KEY HIGHLIGHTS (in billions of dollars) (in millions of dollars) o Sales volume was down during 2Q21 due to severe winter weather and a challenging labor environment. Sales volume was rel
Slide 12: Pork Financial Results
Pork Financial Results Second Quarter and First Half 2021 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 KEY HIGHLIGHTS (in billions of dollars) (in millions of dollars) o Sales volume down during 2Q21 and 1H21 primarily due to severe winter weather, partially offset by strong demand o Avera
Slide 13: International Highlights
International Highlights o Value-added capacity expansion initiatives position the International business to deliver future growth and increasing profitability o Further leverage of One Tyson framework will enable margin accretive collaboration across global production footprint o Exports from U.S.-
Slide 14: Total Company Financial Results
Total Company Financial Results Second Quarter and First Half 2021 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 ADJUSTED EPS1 (in billions of dollars) (in millions of dollars) (in dollars per share) +0.3% +32% +41% +4% +43% +68% • Volumes down 3.7% in 2Q; down 4.1% 1H21 • Higher operating
Slide 15: Sales Bridge
Sales Bridge Key Drivers o Retail strength contributed over $700 First Half 2021 million in sales improvement in 1H21 and over $260 million in 2Q21 $ millions $271 ($7) ($175)* o Foodservice sales declined over $400 million in 1H21 compared to the same period last year, but improved $69 million in 2
Slide 16: Adjusted Operating Income Bridge
Adjusted Operating Income1 Bridge Key Drivers First Half 2021 o Volumes lower due to relatively $ millions soft but recovering foodservice channel demand $1,262 ( $664 ) o Price/mix up due to the partial recovery of raw material inflation through price and favorable mix ( $215 ) $140 $1,764 o COGS p
Slide 17: Financial Outlook
Financial Outlook FY 2021 Outlook Factor 1H20 1H21 Prior Revised Comments Continued strength in beef markets; partial Sales $21.7 billion $21.8 billion $42 – $44 billion $44 – $46 billion recovery of raw material and supply chain inflation in Beef, Pork, and Chicken 2.6% 1.6% Likely down vs. prior U
Slide 18: Focused Capital Deployment to Drive Shareholder Return
Focused Capital Deployment to Drive Shareholder Return First Half 2021 OPERATING CASH FLOW (in millions of dollars) BUILD ◦ Long-term FINANCIAL leverage target of STRENGTH 2.0x Net Debt/ EBITDA1 $1,349 $1,261 +7% ◦ Disciplined INVEST IN OUR investments to BUSINESS modernize and expand capacity ◦ Com
Slide 19: Tyson Has the Right Ingredients for Future Growth
Tyson Has the Right Ingredients for Future Growth 1 2 3 Improve Grow Drive Operating above the sustainable Margins market return Restore Invest in Drive Enterprise- Innovation and Deploy a Balanced Competitiveness in Wide Operational Technology Approach to Chicken Excellence Capital Allocation Enhan
Slide 20: Appendix
Appendix
Slide 21: Additional Financial Highlights
Additional Financial Highlights Second Quarter 2021 ◦ Liquidity of $2.6 billion at 04/03/21 ◦ Leverage of 2x net debt-to-adjusted EBITDA1 ◦ Net term loan repayment of $1 billion during 2Q ◦ Net interest expense of $108 million ◦ Adjusted effective tax rate of 23.5% ◦ Capital expenditures $268 millio
Slide 22: Constructive protein fundamentals reinforce results
Constructive protein fundamentals reinforce results Percent change versus prior period CY2021 Forecast vs Prior Year CY2020 Actual vs Prior Year Domestic Domestic Production Imports Exports Production Imports Exports Availability Availability 6.4% 9.3% 1.8% -1.0% 0% 1.6% Beef -13.3% -2.3% 6.7% 15.2%
Slide 23: EPS Reconciliations
EPS Reconciliations $ in millions, except per share data (Unaudited) Second Quarter Six Months Ended Pretax Impact EPS Impact Pretax Impact EPS Impact 2021 2020 2021 2020 2021 2020 2021 2020 Reported net income per share attributable to Tyson $ 1.30 $ 1.03 $ 2.58 $ 2.41 Add: China plant relocation c
Slide 24: EBITDA Reconciliations
EBITDA Reconciliations $ in millions, except per share data (Unaudited) Six Months Ended Fiscal Year Ended Twelve Months Ended April 3, 2021 March 28, 2020 October 3, 2020 April 3, 2021 Net Income $ 949 $ 888 $ 2,071 $ 2,132 Less: Interest income (4) (6) (10) (8) Add: Interest expense 220 239 485 46
Slide 25: Segment Operating Income Reconciliations
Segment Operating Income Reconciliations $ in millions, except per share data (Unaudited) Adjusted Segment Operating Income (Loss) (for the second quarter ended April 3, 2021) Beef Pork Chicken Prepared Foods International/Other Total Reported operating income (loss) $ 445 $ 67 $ 6 $ 217 $ (15) $ 72
Slide 26: Segment Operating Income Reconciliations
Segment Operating Income Reconciliations $ in millions, except per share data (Unaudited) Adjusted Segment Operating Income (Loss) (for the six months ended March 28, 2020) Beef Pork Chicken Prepared Foods International/Other Total Reported operating income $ 465 $ 284 $ 156 $ 349 $ 19 $ 1,273 Add: