Pilgrim's Pride Corporation · NASDAQ:PPC
Pilgrim's Pride — Q4 2020 Earnings Presentation
28 slides from Pilgrim's Pride's earnings presentation, Feb 11, 2021
Slide 1: Financial Results for Fourth Quarter and Year Ended Dec 27, 2020
Pilgrim’s Pride Corporation (NASDAQ: PPC) Financial Results for Fourth Quarter and Year Ended Dec 27, 2020
Slide 2: Cautionary Notes and Forward-Looking Statements
Cautionary Notes and Forward-Looking Statements Statements contained in this press release that state the intentions, plans, hopes, beliefs, anticipations, expectations or predictions of the future of Pilgrim’s Pride Corporation and its management are considered forward-looking statements. Without
Slide 3: Pullet Placements Flat in Q4
Trailing 8-Month placements up -0.4% vs. year ago. Pullet growth in 2019 and early 2020 mostly to support new capacity that has come online. Pullet Placements Flat in Q4 Source: USDA 3 Intended Pullet Placements - 2,000 4,000 6,000 8,000 10,000 12,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Slide 4: Hatching Layer Flock and Egg Productivity Modestly Up
Hatching Layer Flock and Egg Productivity Modestly Up Source: USDA 4 Increased broiler layer flock, improvements in eggs/100, and reduced egg exports are contributing to growth in domestic egg supply. Eggs/100 productivity in Q4 improved 1.6% and remains near 5 year average. 50,000 52,000 54,000
Slide 5: Hatchery Utilization Partially Recovered but Remained Below 2019 Levels Since April
78.0% 80.0% 82.0% 84.0% 86.0% 88.0% 90.0% 92.0% 94.0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec % 2019 2020 5 Yr. Avg. 5 Hatchery Utilization Partially Recovered but Remained Below 2019 Levels Since April Source: Agristats
Slide 6: Average Weekly Egg Sets Down 0.6% in Q4; Hatchability Still Below 2019 Levels
Average Weekly Egg Sets Down 0.6% in Q4; Hatchability Still Below 2019 Levels and Historical Source: USDA 6 74% 75% 76% 77% 78% 79% 80% 81% 82% 83% % Chicken Hatchability by Week - USDA 5 Year Range 2019 2020 2021 5 Yr. Avg. 170,000 180,000 190,000 200,000 210,000 220,000 230,000 240,000 250,000 T h
Slide 7: Average Broiler Placements Down 0.9% in the Quarter
Source: USDA 7 Average Broiler Placements Down 0.9% in the Quarter and Started 2021 Below Previous Year 160,000 165,000 170,000 175,000 180,000 185,000 190,000 195,000 H e a d ( 0 0 0 ) Chicken Broiler Placed by Week- USDA 5 Year Range 2019 2020 2021 5 Yr. Avg.
Slide 8: Growth Remains Concentrated in Big Bird Categories
Source: USDA 8 Growth Remains Concentrated in Big Bird Categories and Continuing Reduction in Small Birds 23.0% 24.4% 26.9% 26.1% 25.5% 25.3% 24.8% 22.7% 21.8% 20.9% 21.4% 42.9% 40.7% 35.5% 35.0% 32.2% 31.2% 30.4% 30.2% 28.7% 27.4% 27.9% 19.1% 19.3% 19.4% 19.3% 20.9% 22.5% 23.6% 25.4% 26.2% 27.6% 24
Slide 9: Inventories Continued to Decline vs. Year Ago Levels
Inventories Continued to Decline vs. Year Ago Levels Source: USDA Breast meat inventories continue to pace above year ago levels. LQ inventories remain at healthy levels, well below historical average. Wing inventories maintain levels well below 2019 and historical average. “Other” inventory
Slide 10: Cutout Tracked to High-End of Ranges During Q4-20
Cutout Tracked to High-End of Ranges During Q4-20 And Currently Above 5-Yr Range Source: PPC, EMI 10 40.00 50.00 60.00 70.00 80.00 90.00 100.00 1 /8 1 /2 2 2 /5 2 /1 9 3 /5 3 /1 9 4 /2 4 /1 6 4 /3 0 5 /1 4 5 /2 8 6 /1 1 6 /2 5 7 /9 7 /2 3 8 /6 8 /2 0 9 /3 9 /1 7 1 0 /1 1 0 /1 5 1 0 /2 9 1 1 /1 2 1 1
Slide 11: BSB Recovered Well, Tenders and Wings Strong While LQs Beginning To Recover
Source: USDA 11 BSB Recovered Well, Tenders and Wings Remaining Strong While LQs Beginning To Recover 29.86 20.00 25.00 30.00 35.00 40.00 45.00 50.00 1 /5 2 /4 3 /6 4 /5 5 /5 6 /4 7 /4 8 /3 9 /2 1 0 /2 1 1 /1 1 2 /1 C e n ts /L b USDA Leg Quarters NE 5 Year Range 2019 2020 2021 5 Year Average 112.94
Slide 12: WOG Pricing Inside Normal Range in Q4-20
12 WOG Pricing Inside Normal Range in Q4-20; Q1 Prices Nearing the 5-Yr Range Source: EMI 81.2 40.0 50.0 60.0 70.0 80.0 90.0 100.0 110.0 120.0 1 / 3 1 / 1 7 1 / 3 1 2 / 1 4 2 / 2 8 3 / 1 3 3 / 2 7 4 / 1 0 4 / 2 4 5 / 8 5 / 2 2 6 / 5 6 / 1 9 7 / 3 7 / 1 7 7 / 3 1 8 / 1 4 8 / 2 8 9 / 1 1 9 / 2 5 1 0 /
Slide 13: Corn Stocks Tighten Up with Increased Exports
Corn Stocks Tighten Up with Increased Exports USDA continues to lower corn ending stocks, tightening to stocks similar to levels seen in 2013 The market continues to watch the corn export pace with tighter stocks/use Source: USDA 13
Slide 14: Soybean Stocks Tighten Up with Increased Exports
Soybean Stocks Tighten Up with Increased Exports USDA decreases soybean ending stocks in 2020 to levels previously seen before the trade war U.S. exports of soybeans continues to be a driving factor for tightening stocks Source: USDA 14
Slide 15: Fiscal Year 2020 Financial Review
Fiscal Year 2020 Financial Review U.S.: Well-balanced performance, diversified portfolio and Key Customer strategy minimized channel demand disruption; MX: Strong rebound from 1H on much more balanced supply/demand conditions, improving macro; UK/Europe: Legacy operations improving, new assets con
Slide 16: Fourth Quarter 2020 Financial Review
Fourth Quarter 2020 Financial Review U.S.: Key Customer partnerships continue to deliver growth, minimize disruption and improve consistency; MX: Strong continues on much more balanced supply/demand conditions, improving macro; UK/Europe: Legacy operations resilient, new assets continue to generat
Slide 17: Fiscal Year 2020 Capital Spending
Fiscal Year 2020 Capital Spending Capex (US$M) Source: PPC Strong Free Cash Flow generation has enabled us to direct more capital spending towards identified projects with rapid payback and structural projects. New strategic projects will support key customers growth and de-emphasize our exposur
Slide 18: Investor Relations Contact
Investor Relations Contact Investor Relations: Dunham Winoto Investor Relations E-mail: IRPPC@pilgrims.com Address: 1770 Promontory Circle Greeley, CO 80634 USA Website: www.pilgrims.com 18
Slide 19: Appendix
APPENDIX All about great taste. 19
Slide 20: Appendix: Reconciliation of Adjusted EBITDA
Appendix: Reconciliation of Adjusted EBITDA Source: PPC. “EBITDA” is defined as the sum of net income (loss) plus interest, taxes, depreciation and amortization. “Adjusted EBITDA” is calculated by adding to EBITDA certain items of expense and deducting from EBITDA certain items of income that we bel
Slide 21: Appendix: Reconciliation of Adjusted EBITDA
Appendix: Reconciliation of Adjusted EBITDA Source: PPC. (a) Interest expense, net, consists of interest expense less interest income. (b) The Company measures the financial statements of its Mexico reportable segment as if the U.S. dollar were the functional currency. Accordingly, we remeasure asse
Slide 22: Appendix: Reconciliation of LTM Adjusted EBITDA
Appendix: Reconciliation of LTM Adjusted EBITDA 22 Source: PPC. The summary unaudited consolidated income statement data for the twelve months ended December 27, 2020 (the LTM Period) have been calculated by summing each of the unaudited three month periods within the audited year ended December 27,
Slide 23: Appendix: Reconciliation of EBITDA Margin
Appendix: Reconciliation of EBITDA Margin 23 Source: PPC. EBITDA margins have been calculated by taking the relevant unaudited EBITDA figures, then dividing by net sales for the applicable period. EBITDA margins are presented because they are used by management and we believe it is frequently used b
Slide 24: Appendix: Reconciliation of Adjusted Operating Income
Appendix: Reconciliation of Adjusted Operating Income 24 Source: PPC. Adjusted Operating Income is calculated by adding to Operating Income certain items of expense and deducting from Operating Income certain items of income. Management believes that presentation of Adjusted Operating Income provide
Slide 25: Appendix: Reconciliation of GAAP Operating Income Margin to Adjusted
Appendix: Reconciliation of GAAP Operating Income Margin to Adjusted Operating Income Margin 25 Source: PPC. Adjusted Operating Income Margin for the U.S. is calculated by dividing Adjusted operating income by Net Sales. Management believes that presentation of Adjusted Operating Income Margin provi
Slide 26: Appendix: Reconciliation of Adjusted Net Income
Appendix: Reconciliation of Adjusted Net Income 26 Source: PPC. Adjusted net income attributable to Pilgrim's Pride Corporation ("Pilgrim's") is calculated by adding to Net income attributable to Pilgrim's certain items of expense and deducting from Net income attributable to Pilgrim's certain items
Slide 27: Appendix: Reconciliation of GAAP EPS to Adjusted EPS
Appendix: Reconciliation of GAAP EPS to Adjusted EPS 27 Source: PPC. Adjusted EPS is calculated by dividing the adjusted net income attributable to Pilgrim's stockholders by the weighted average number of diluted shares. Management believes that Adjusted EPS provides useful supplemental information
Slide 28: Appendix: Supplementary Selected Segment and Geographic Data
Appendix: Supplementary Selected Segment and Geographic Data 28 Source: PPC. Source: PPC PILGRIM'S PRIDE CORPORATION Supplementary Geographic Data (Unaudited) Three Months Ended Year Ended December 27, 2020 December 29, 2019 December 27, 2020 December 29, 2019 (In thousands) Sources of net sales by