Tyson Foods, Inc. · NYSE:TSN
Tyson Foods — Q1 2023 Earnings Presentation
26 slides from Tyson Foods's earnings presentation, Feb 6, 2023
Slide 1: 1Q Fiscal 2023 Supplemental Information
— 1Q Fiscal 2023 Supplemental Information February 6, 2023
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
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 2023, other future economic
Slide 3: Diverse portfolio and strategic management deliver topline growth
Diverse portfolio and strategic management deliver topline growth Delivered solid YoY revenue and volume growth; adjusted operating 1 income was lower than expected Leveraged diverse protein portfolio across multiple channels and brands 2 to serve an estimated market-leading 1/5th of US protein cons
Slide 4: Strengthening our position as a global protein leader
Strengthening our position as a global protein leader Imperatives 1 2 3 4 5 Outpacing the market by Driving operational and Leveraging our Aggressively restoring our Transforming our team enhancing our portfolio functional excellence and financial strength to invest competitiveness in member experie
Slide 5: 1Q Sales Performance YoY
1Q Sales Performance YoY Positive momentum building as sales revenue grew for the Total Company and in key growth segments Revenue1 (billion $) +8.8% Total Company +2.5% Chicken +9.6% Prepared Foods 12.93 13.26 3.89 4.26 2.33 2.54 1Q22 1Q23 1Q22 1Q23 1Q22 1Q23 -5.6% Beef Pork -6.0% International / O
Slide 6: Outpacing the industry and our peers in retail consumption growth
Outpacing the industry and our peers in retail consumption growth Latest 13 Weeks Volume Sales % Change Among Top Branded Food Companies > $5B vs. YAG vs. 3YAG 19.9% 9.1% 10.2% 7.8% 6.6% 3.7% 4.6% 2.8% 2.5% 3.4% 2.2% -0.5% -0.6% -1.5%-1.1% -0.9% -2.6% -3.1% -4.6% -5.2% -5.6% -5.9% Total Core Bus. Fo
Slide 7: Strength of our retail brands enables continued growth in dollar and pound share
Strength of our retail brands enables continued growth in both dollar and pound share across all dayparts Tyson Core Business Lines Share Growth vs. Year Ago Brand Strength Relative to Competition Share Growth by Day Part % Favorite Brand Among Category Buyers Dollar Pound Dollar Pound Frozen Nugget
Slide 8: Positive retail share trajectory, fueled by continued strength of business fundamentals
Positive retail share trajectory, fueled by continued strength of business fundamentals Tyson Core Business Lines Share Growth Pound Share Pt. Chg. vs. YAG, by Period FY23 Q3 Q4 Q1 2.2 Tyson Core Business Lines 1.8 1.9 1.3 27.7% Pound Share 0.3 ---------------- Highest Share Performance in Past 5 Ye
Slide 9: Outpacing foodservice broadline industry recovery, and growing share in Focus 6
Outpacing foodservice broadline industry recovery, and growing share in our Focus 6 categories Volume Sales % Change Latest 52 Weeks Latest 13 Weeks vs. YAG vs. 3YAG vs. YAG vs. 3YAG 11.7% 9.7% 5.8% 5.6% 5.5% 2.7% 3.3% 2.9% Share Share Share Share +0.6 +1.7 +0.0 +1.3 -2.4% -1.1% -4.8% -3.8% Total Br
Slide 10: Becoming the most sought-after place to work
Becoming the most sought-after place to work through investments in Team Member Experience Focus Areas 1 2 3 Health, safety and wellbeing Total rewards and growth Culture & Digitalization Actions Granted $50M in year-end bonuses Shaping our OneTyson future for U.S.-based hourly, frontline team throu
Slide 11: Productivity Program on-track
Productivity Program on-track Targeting $300M+ of productivity gains in FY23 to achieve a total of $1B+ in recurring savings $1B+ $300 - 400M FY23 FY22-23 Actions will lead to sustainable productivity savings in three key focus areas Operational & Functional Supply Chain & Digital Automation Excelle
Slide 12: Feeding the world as a recognized global protein leader
Balanced portfolio Leveraging a broad Focusing on Feeding the world where each segment portfolio of market- advantaged, global has a clear and leading brands to win channels to win with as a recognized compelling financial with consumers customers path forward global protein leader and delivering lo
Slide 13: Sales, AOI and EPS performance
Sales, AOI and EPS performance First Quarter 2023 vs First Quarter 2022 SALES ADJUSTED OPERATING INCOME1 ADJUSTED EPS1 (in millions of dollars) (in millions of dollars) (in dollars per share) $12,933 $13,260 $1,432 $2.87 +3% -68% $453 -70% $0.85 1Q22 1Q23 1Q22 1Q23 1Q22 1Q23 • Chicken and Prepared F
Slide 14: Adjusted Operating Income Bridge YoY
Adjusted Operating Income Bridge YoY First Quarter 2023 $ millions $222 -$1,289 Highlights • Volumes increased slightly due $16 to growth across all segments $1,432 except Pork • Sales Price/mix increased due to recovery actions to address cost of goods increases • COGS price/mix up due to raw mater
Slide 15: Softer domestic demand and higher live cattle costs in Beef
Softer domestic demand and higher live cattle costs in Beef First Quarter 2023 vs First Quarter 2022 SALES ADJUSTED OPERATING INCOME1 HIGHLIGHTS (in millions of dollars) (in millions of dollars) o Sales volume increased driven by improved staffing supporting higher head throughput o Average sales pr
Slide 16: Pork remains challenged by industry headwinds
Pork remains challenged by industry headwinds First Quarter 2023 vs First Quarter 2022 SALES ADJUSTED OPERATING INCOME1 HIGHLIGHTS (in millions of dollars) (in millions of dollars) o Sales volume decreased due to balancing supply with customer demand o Average sales price increased driven by higher
Slide 17: Chicken overcoming commodity market headwinds
Chicken overcoming commodity market headwinds First Quarter 2023 vs First Quarter 2022 SALES ADJUSTED OPERATING INCOME1 HIGHLIGHTS (in millions of dollars) (in millions of dollars) o Sales volume increased due to improved domestic production partially offset by strategic initiative mix impact and in
Slide 18: Strength of Retail Brands drives growth in Prepared Foods
Strength of Retail Brands drives growth in Prepared Foods First Quarter 2023 vs First Quarter 2022 SALES ADJUSTED OPERATING INCOME1 HIGHLIGHTS (in millions of dollars) (in millions of dollars) o Sales volume increased driven by the strength of our retail brands and improved order fulfillment o Avera
Slide 19: Utilizing financial strength to invest in our business and return cash to shareholders
Utilizing financial strength to invest in our business and return cash to shareholders Leverage Ratio OPERATING CASH FLOW BUILD (Net Debt/Adj. EBITDA)1 (in billions of dollars) FINANCIAL 1.6x <2.0x STRENGTH $1.43 Manage our leverage ratio to be at or below our long-term target 1Q23 Target Capital Ex
Slide 20: Maintaining sales guidance on lower margin expectations
Maintaining sales guidance on lower margin expectations FY2023 Guidance2 1Q22 1Q23 Prior Indication Revised Indication Sales $12.9 billion $13.3 billion $55 – $57 billion Unchanged Sales Growth % 23.6% 2.5% 3 – 7% growth Unchanged Chicken AOI Margin1 3.0% 1.8% 6 – 8% 2 – 4% Prepared Foods AOI Margin
Slide 21: Q&A
Q&A Donnie King John R. Tyson Brady Stewart Stewart Glendinning Wes Morris Amy Tu President & CEO Executive Vice President Group President, Group President, Group President, President International & & CFO Fresh Meats Prepared Foods Poultry Chief Administrative Officer
Slide 22: Appendix
Appendix
Slide 23: Sales improvement across all channels in Chicken and Prepared Foods
Sales improvement across all channels in Chicken and Prepared Foods partially offset by declines in Beef and Pork Channel Highlights First Quarter 2023 • Retail improved by $324M, led $ millions $373 -$279 by increases in Chicken up $248M and Prepared Foods up $180M • Foodservice decreased $71M, $63
Slide 24: EPS Reconciliations
EPS Reconciliations $ in millions, except per share data (Unaudited) First Quarter Pretax Impact EPS Impact 2023 2022 2023 2022 Reported net income per share attributable to Tyson (GAAP EPS) $ 0.88 $ 3.07 (Less)/Add: Production facilities fire insurance proceeds, net of costs 4 $ (35) $ (45) (0.07)
Slide 25: EBITDA Reconciliations
EBITDA Reconciliations $ in millions, except per share data (Unaudited) Three Months Ended Fiscal Year Ended Twelve Months Ended December 31, 2022 January 1, 2022 October 1, 2022 December 31, 2022 Net income $ 320 $ 1,126 $ 3,249 $ 2,443 Less: Interest income (9) (3) (17) (23) Add: Interest expense
Slide 26: Segment Operating Income Reconciliations
Segment Operating Income Reconciliations $ in millions (Unaudited) Adjusted Segment Operating Income (Loss) (for the first quarter ended December 31, 2022) International/ Beef Pork Chicken Prepared Foods Total Other Reported operating income (loss) $ 166 $ (21) $ 69 $ 258 $ (5) $ 467 4 Less: Product