Pilgrim's Pride Corporation · NASDAQ:PPC
Pilgrim's Pride — Q4 2018 Earnings Presentation
26 slides from Pilgrim's Pride's earnings presentation, Feb 14, 2019
Slide 1: Financial Results for Fourth Quarter and Year Ended December 30, 2018
Financial Results for Fourth Quarter and Year Ended December 30, 2018 Pilgrim’s Pride Corporation (NASDAQ: PPC)
Slide 2: Cautionary Notes and Forward-Looking Statements
Cautionary Notes and Forward-Looking Statements Statements contained in this presentation that share our intentions, beliefs, expectations or predictions for the future, denoted by the words “anticipate,” “believe,” “estimate,” “should,” “expect,” “project,” “plan,” “imply,” “intend,” “foresee” an
Slide 3: 2018 Pullet Placements Flat YTD
2018 Pullet Placements Flat YTD For the Year Intended Pullet Placements 9,000 8,500 8,000 7,500 7,000 6,500 Thousand Head Thousand 6,000 5,500 5,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2017 2018 5 year avg. . Trailing 8-Month placements average ~1% above year prior to accommodate oncomin
Slide 4: Breeders Declining as Egg Production Marginally Improved
Breeders Declining as Egg Production Marginally Improved Broiler Type Hatching Layers Egg Production per 100 Layers 60,000 1,950 59,000 1,900 58,000 57,000 1,850 56,000 1,800 55,000 1,750 Eggs 54,000 1,700 ThousandHead 53,000 1,650 52,000 51,000 1,600 50,000 1,550 Jan Feb Mar Apr May Jun Jul Aug Sep
Slide 5: Q4 Hatchery Utilization Moderating to Historical Level
Q4 Hatchery Utilization Moderating to Historical Level Hatchery Utilization 96.00% 94.00% 92.00% % 90.00% 88.00% 86.00% 84.00% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2016 2017 2018 5 year avg. Source: Agristats 5
Slide 6: Egg Sets Flat Y/Y in Q4, Up 1.5% in 2018
Egg Sets Flat Y/Y in Q4, Up 1.5% in 2018; Hatchability Remains Challenged Chicken Egg Sets Chicken Hatchability by Week - USDA by Week - USDA 240,000 83.0% 82.5% 230,000 82.0% 220,000 81.5% 81.0% 210,000 % 80.5% 200,000 80.0% 79.5% ThousandsEggs of 190,000 79.0% 180,000 78.5% 170,000 78.0% 5 Year Ra
Slide 7: Chick Placements Declined in Q4, +0.9% in 2018
Chick Placements Declined in Q4, +0.9% in 2018 Chicken Broiler Placed by Week- USDA 195,000 190,000 185,000 180,000 175,000 Head Head (000) 170,000 165,000 160,000 5 Year Range 2017 2018 2019 5 Yr Avg Source: USDA 7
Slide 8: Bigger Bird Categories Continuing to Gain Share
Bigger Bird Categories Continuing to Gain Share, Small Birds to Remain Stable Head Processed by Size 100% 15.1% 15.6% 18.3% 90% 19.7% 21.4% 20.9% 21.2% 21.7% 22.6% 80% 19.1% 19.3% 70% 19.4% 19.3% 20.9% 22.5% 23.6% 25.4% 23.6% 60% 50% 42.9% 40.7% 35.5% 35.0% 40% 32.2% 31.2% 30.4% 30.2% 30.9% 30% 20%
Slide 9: Cold Storage Inventories Higher Due to Other
Cold Storage Inventories Higher Due to “Other” but Leg Quarters Moved Lower Total Chicken Inventories 1,000,000 950,000 900,000 850,000 800,000 750,000 LBS (000) LBS 700,000 650,000 600,000 550,000 500,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2017 2018 5 Year Average . “Other” category ac
Slide 10: Average Cutout Reached Decade-Low Last Year
Average Cutout Reached Decade-Low Last Year But 2019 Started Off In-line with Seasonality Cutout Value 110.00 100.00 90.00 80.00 Cents/Lb 70.00 67.78 60.00 50.00 1/4 2/1 3/1 6/7 7/5 8/2 1/18 2/15 3/15 3/29 4/12 4/26 5/10 5/24 6/21 7/19 8/16 8/30 9/13 9/27 11/8 12/6 10/11 10/25 11/22 12/20 5 Year Ran
Slide 11: Wings, Boneless Breast and Tenders Recovering in Q1
After a Weak 2018, Wings, Boneless Breast and Tenders Recovering in Q1 while Leg Quarters Stable USDA Boneless/Skinless Breast NE USDA Tenders NE 215.00 250.00 195.00 230.00 175.00 210.00 190.00 155.00 165.72 170.00 135.00 Cents/Lb Cents/Lb 150.00 115.00 130.00 95.00 104.46 110.00 75.00 90.00 6/4 1/
Slide 12: 2018 Small Bird Prices Tracked Close to 2017
2018 Small Bird Prices Tracked Close to 2017, Off to a Good Start This Year EMI WOG 2.5-4.0 LBS 120 110 100 90 89.49 Cents/Lb. 80 70 60 3/2 1/5 2/2 6/8 7/6 8/3 8/31 1/19 2/16 3/16 3/30 4/13 4/27 5/11 5/25 6/22 7/20 8/17 9/14 9/28 11/9 12/7 10/12 10/26 11/23 12/21 5 Year Range 2017 2018 2019 5 Year A
Slide 13: Corn Stocks to Decrease from Record Levels
Corn Stocks to Decrease from Record Levels Global Corn Stocks Global Corn Stocks/Use Excluding China 16.0% Excluding China (Million Metric Tons) 15.4% 14.9% 140 15.0% 127.2 14.4% 14.4% 130 14.1% 14.0% 118.3 13.7% 120 14.0% 109.4 110 103.2 102.0 13.0% 12.6% 100 94.1 92.8 89.9 93.7 90 11.9% 78.5 12.0%
Slide 14: Global Soybean Inventories Projected to Grow
Global Soybean Inventories Projected to Grow Global Soybean Stocks Global Soybean Stocks/Use (Million Metric Tons) 120 35.0% 106.7 33.0% 98.1 30.5% 100 95.8 31.0% 29.0% 29.0% 77.5 78.5 29.0% 27.6% 80 69.9 27.0% 25.7% 25.0% 25.0% 62.7 61.8 59.5 57.4 25.0% 60 52.9 53.4 23.0% 22.4% 44.0 23.0% 22.0% 20.
Slide 15: Fiscal Year 2018 Financial Review
Fiscal Year 2018 Financial Review . U.S.: challenging Commodity markets Main Indicators ($M)** FY-18 FY-17 and stable smaller birds, MX: strong 1H and a recovery in Q4 after a weak Q3, Net Revenue 10,937.8 10,767.9 UK/Europe: continuing to improve Gross Profit 843.5 1,471.6 despite feed input increa
Slide 16: Fourth Quarter 2018 Financial Review
Fourth Quarter 2018 Financial Review . U.S.: weak due to commodity and weather disruptions but PF improving, Main Indicators ($M)** Q4-18 Q4-17 MX: better supply/demand balance, Net Revenue 2,656.8 2,742.4 UK/Europe: improving operations with feed cost increase compensated by Gross Profit 111.8 261.
Slide 17: Fiscal Year 2018 Capital Spending
Fiscal Year 2018 Capital Spending CapexCapex (US$M)(US$M) . 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 exposure
Slide 18: Investor Relations Contact
Investor Relations Contact Investor Relations: Dunham Winoto Director, 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: EBITDA Reconciliation
Appendix: EBITDA Reconciliation “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 believe are not indicative o
Slide 21: Appendix: Reconciliation of LTM EBITDA
Appendix: Reconciliation of LTM EBITDA The summary unaudited consolidated income statement data for the twelve months ended December 30, 2018 (the LTM Period) have been calculated by summing each of the unaudited thirteen week periods within the audited fifty-two week period ended December 30, 2018.
Slide 22: Appendix: EBITDA Margin Reconciliation
Appendix: EBITDA Margin Reconciliation EBITDA margins have been calculated by taking the relevant unaudited EBITDA figures, then dividing by Net Revenue for the applicable period. PILGRIM'S PRIDE CORPORATION Reconciliation of EBITDA Margin Thirteen Fourteen Fifty-Two Fifty-Three Weeks Weeks Weeks We
Slide 23: Appendix: Adjusted Operating Income Reconciliation
Appendix: Adjusted Operating Income Reconciliation A reconciliation of GAAP operating income to adjusted operating income is as follows: PILGRIM'S PRIDE CORPORATION Reconciliation of Adjusted Operating Income (Unaudited) Thirteen Weeks Fourteen Weeks Fifty-Two Weeks Fifty-Three Weeks Ended Ended End
Slide 24: Appendix: Reconciliation of Adjusted Net Income
Appendix: Reconciliation of Adjusted Net Income A reconciliation of net income (loss) attributable to Pilgrim's Pride Corporation per common diluted share to adjusted net income (loss) attributable to Pilgrim's Pride Corporation per common diluted share is as follows: PILGRIM'S PRIDE CORPORATION Rec
Slide 25: Appendix: Adjusted EPS Bridge
Appendix: Adjusted EPS Bridge A reconciliation of GAAP to non-GAAP financial measures. Net income (loss) per share is calculated by dividing the net income (loss) attributable to Pilgrim's Pride Corporation stockholders by the weighted average number of diluted shares. PILGRIM'S PRIDE CORPORATION Re
Slide 26: Appendix: Segment and Geographic Data
Appendix: Segment and Geographic Data PILGRIM'S PRIDE CORPORATION Supplementary Selected Segment and Geographic Data (Unaudited) Thirteen Weeks Fourteen Weeks Fifty-Two Weeks Fifty-Three Weeks Ended Ended Ended Ended December 30, 2018 December 31, 2017 December 30, 2018 December 31, 2017 (In thousan