Tyson Foods, Inc. · NYSE:TSN
Tyson Foods — CAGNY Conference 2022
36 slides from Tyson Foods's conference presentation, Feb 23, 2022
Slide 1: CAGNY
CAGNY February 23, 2022
Slide 2: Forward-Looking Statements
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 2
Slide 3: Donnie King, President & Chief Executive Officer
Donnie King President & Chief Executive Officer
Slide 4: Tyson Foods: outpacing a growing, global protein market
Tyson Foods: outpacing a growing, global protein market — 1 Recognized leader in an attractive, dynamic market 2 Diversified not only across proteins, but also across mix 3 Expanding, innovating, and investing in fast growth markets including Asia 4 Initiatives underway to meaningfully expand our op
Slide 5: Global protein consumption is expected to grow over the next decade
Global protein consumption is expected to grow over the next decade Population growth Gross domestic product Continued population growth in the United (United States) States +1% +2.5% Elevated GDP growth of 3.5% forecast for World population expected to expand by 2022 over 750 million people in the
Slide 6: Tyson Foods is a leading protein company with diverse capabilities
Tyson Foods is a leading protein company with diverse capabilities, meaningful scale, and respected brands ICONIC $47.0B $4.3B ~137,000 2021 Sales 2021 Adj Operating Income1 Team Members 11,000+ 140 20% Independent Farms Supply Us With Countries Where Products Are Sold of the Beef, Pork, & Chicken P
Slide 7: Strengthening our position as a recognized global protein leader
Strengthening our position as a recognized global protein leader — Win with team members — Win with customers and consumers — Win with excellence in execution 7
Slide 8: Making investments to become the most sought-after place to work
Making investments to become the most sought-after place to work Objectives 1 2 3 Health, safety and well- Competitive wage and Investing in automation and being resources benefit offerings technology Actions Required all U.S. team members to Supporting flexible scheduling and Making strategic inves
Slide 9: Diverse portfolio of brands drive value creation for the enterprise
Diverse portfolio of brands drive value creation for the enterprise
Slide 10: We are the market leader in key retail categories with growth runway
We are the market leader in key retail categories with growth runway #1 #1 #2 #1 #1 in in Frozen in Frozen Protein in Lunchmeat in Breakfast Sausage Hot Dogs Prepared Chicken Breakfast #1 #1 #1 #1 #2 in Smoked Sausage in Stacked Bacon in Corn Dogs in Super Premium in Adult Snacking Smoked Sausage Co
Slide 11: Both Top 10 Growth Brands
We have two of the top growing brands in all of Food Both Top 10 Growth Brands in absolute dollar growth out of 41K+ Nielsen tracked food brands Source: Past 2-year Retail $ sales growth; Nielsen Total U.S. All Outlets, 52 weeks ending 1/29/2022
Slide 12: Leading Foodservice portfolio that addresses customer needs
Leading Foodservice portfolio that addresses customer needs Market Share #1 Market Share #2 Market Share #3 Breaded Beef Bone-In Chicken Chicken Pizza Toppings Breakfast Sausage Breast/Thigh Filets Cooked Burgers Bone-In Wings Meatballs Dry Sausage Corn Dogs Dinner Sausage Boneless Wings Tortillas H
Slide 13: Capacity expansions will support growth objectives
Capacity expansions will support growth objectives 12 plants expected to open over next 2 years to increase capacity by ~1.3 billion pounds Europe Poultry China Poultry (Hubei) Humboldt Poultry Danville Poultry — INTERNATIONAL BUSINESS INTERNATIONAL BUSINESS CHICKEN CHICKEN Adding 7 fully-cooked • E
Slide 14: Productivity is a critical driver of our future success
Productivity is a critical driver of our future success New Program Management Office to oversee execution supported by culture of continuous improvement and entrepreneurship Operational & Functional Digital solutions Automation Excellence and Agility $1B+ — Targeted productivity $300M+ $250M+ $450M
Slide 15: We expect to deliver $1B in productivity gains by the end of FY2024
We expect to deliver $1B in productivity gains by the end of FY2024 Operational and Functional Excellence $1,000M+ Digital Solutions Automation ~$600 - $800M ~$300 ~$300 - 400M ~$250 ~$450 FY22 FY23 FY24 % of Program Commitment Achieved by Fiscal Year End 30%+ 60%+ 100% 1 Productivity savings are re
Slide 16: We are accelerating our automation investments
We are accelerating our automation investments Unique opportunity to combine operational scale with innovative automation and real-time analytics to drive competitive advantage Critical element to productivity program • Improves safety FY2021 FY2022 FY2023 FY2024 • Automates positions that are diffi
Slide 17: Building an equitable and resilient food system
Empowering People Building an equitable Transparent people-first business that values inclusion and equal opportunity, investing in communities, fighting 1 and resilient food hunger, and empowering our team system — Conserving Natural Resources Conserving water, reducing GHG emissions, eliminating m
Slide 18: We expect to sustainably feed the world as a recognized global protein leader
Increased demand Balanced portfolio where Brand and product for protein each segment has a clear innovation powered by reinforced by post- and compelling path investments to drive pandemic recovery forward higher value-added sales We expect to sustainably feed the world as a Making investments to Ac
Slide 19: Stewart Glendinning, EVP & Chief Financial Officer
Stewart Glendinning EVP & Chief Financial Officer
Slide 20: We are committed to delivering shareholder value
We are committed to delivering shareholder value 1 Tyson has a track record of driving sales and volume growth 2 Compelling path forward to deliver future earnings growth 3 A strong balance sheet that provides optionality Mid-term financial targets reflect our confidence in our earnings 4 growth exp
Slide 21: Total company sales and volume have grown over time
Total company sales and volume have grown over time Pandemic-related labor and supply chain challenges impacted recent volume performance Sales Volume $ in millions Million pounds 5% 2% CAGR CAGR ~$49,000 - $51,000 $47,049 +2-3% 28,639 $42,405 $42,366 28,278 $40,052 28,034 $36,881 $38,260 26,314 25,
Slide 22: Earnings and operating cash flows have also remained strong
Earnings and operating cash flows have also remained strong Earnings Operating Cash Flow $ in millions $ in millions Adjusted Operating Income 1 Adj EBITDA 1 7% CAGR $5,508 $3,874 $3,840 $4,194 $4,021 $4,181 $4,288 $3,939 $2,963 $3,538 $2,716 $3,194 $3,205 $2,599 $2,513 $2,920 $3,010 $2,805 FY2016 F
Slide 23: Strong earnings per share profile positions us for future growth
Strong earnings per share profile positions us for future growth Adj. Earnings per share1 $ per share Ingredients for earnings per share 14% growth CAGR $8.28 Grow volume faster than the 1 market $6.01 $5.21 $5.34 $5.42 $4.39 2 Improve operating margins 3 Drive enhanced returns FY2016 FY2017 FY2018
Slide 24: Tyson has the right ingredients for future earnings growth
Tyson has the right ingredients for future earnings growth Key priorities to unlock long-term shareholder value 1 2 3 Grow volume above the market Improve Operating Margins Drive enhanced returns Continue strong brand growth and Leverage brand and product portfolio Efficiency programs driving down c
Slide 25: Our mid-term financial targets reflect our growth expectations
Our mid-term financial targets reflect our growth expectations Committed to outperforming the market, improving earnings, and driving stable return on invested capital 3-year Volume AOI Margin1 AOI Margin1 CAGR Target FY2022 Range FY2024 Range Target Chicken 4-5% 5-7% 7-9% Grow volumes faster than a
Slide 26: Our capital allocation priorities are clear
Our capital allocation priorities are clear We are focused on driving returns while maintaining financial strength Objectives Build financial strength Invest in the business Return cash to shareholders Actions Invest in new business Maintain a robust balance sheet initiatives, support capital Manage
Slide 27: Deleveraging actions have significantly improved our debt ratio
Deleveraging actions have significantly improved our debt ratio Healthy balance sheet provides optionality for investing in growth and returning cash to shareholders Net Debt/Adj. EBITDA1 Net Debt1 Ratio $ in millions 2.8 2.5 $11,447 2.3 2.4 $9,882 $9,602 $9,919 <2.0 1.7 $6,841 $6,408 $5,926 1.2 1.1
Slide 28: Prioritizing capital investments for growth and productivity initiatives
Prioritizing capital investments for growth and productivity initiatives Capital Expenditures Adj. Return on Invested Capital1 $ Millions Percent $2,000 13.0% 12.2% 12.0% 12.0% 11.0% 10.2% 9.2% $1,200 $1,259 $1,199 $1,209 $1,069 $695 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022E FY2016 FY2017 FY
Slide 29: Solid balance sheet and free cash flow generation have supported dividend growth
Solid balance sheet and free cash flow generation have supported dividend growth while share repurchase has been opportunistic Dividends Share Repurchases $ Millions $ Millions 24% 601 636 CAGR 537 $1,944 431 319 $860 216 $427 $252 $207 $67 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2016 FY2017 FY2
Slide 30: Delivering long-term shareholder value
Track record of Balanced portfolio where Improving sales delivering strong each segment has a clear diversity to better Delivering long-term earnings and cash and compelling financial insulate results from flow generation path forward commodity cycles shareholder value — Healthy balance sheet Perfor
Slide 31: Appendix
Appendix 31
Slide 32: Sales, Operating Income and Operating Margin Reconciliations
Sales, Operating Income and Operating Margin Reconciliations ($ in millions) Fiscal Year Ended (Unaudited) October 2, 2021 October 3, 2020 September 28, 2019 September 29, 2018 September 30, 2017 Reported Sales $ 47,049 $ 43,185 $ 42,405 $ 40,052 $ 38,260 Less: Impact of additional week (a) - (819)
Slide 33: Net Debt and Net Debt to Adjusted EBITDA Reconciliations
Net Debt and Net Debt to Adjusted EBITDA Reconciliations ($ in millions) Fiscal Year Ended (Unaudited) October 2, 2021 October 3, 2020 September 28, 2019 September 29, 2018 September 30, 2017 October 1, 2016 Net Income $ 3,060 $ 2,071 $ 1,993 $ 2,973 $ 1,742 $ 1,772 Less: Interest Income (8) (10) (1
Slide 34: Net Debt and Net Debt to Adjusted EBITDA Reconciliations
Net Debt and Net Debt to Adjusted EBITDA Reconciliations ($ in millions) (Unaudited) Three Months Ended Fiscal Year Ended Twelve Months Ended January 1, 2022 January 2, 2021 October 2, 2021 January 1, 2022 Net income $ 1,126 $ 472 $ 3,060 $ 3,714 Less: Interest income (3) (2) (8) (9) Add: Interest e
Slide 35: Earnings Per Share Reconciliations
Earnings Per Share Reconciliations ($ in millions, except per share data) (Unaudited) Fiscal Year Ended October 2, 2021 October 3, 2020 September 28, 2019 September 29, 2018 September 30, 2017 October 1, 2016 Pretax EPS Pretax EPS Pretax EPS Pretax EPS Pretax EPS Pretax EPS Impact Impact Impact Impa
Slide 36: Return on Invested Capital (ROIC) Reconciliation
Return on Invested Capital (ROIC) Reconciliation ($ in millions, except percentages) (Unaudited) Fiscal Year Ended October 2, 2021 October 3, 2020 September 28, 2019 September 29, 2018 September 30, 2017 October 1, 2016 Reported Operating Income $ 4,396 $ 3,008 $ 2,770 $ 2,969 $ 2,862 $ 2,805 Pre-ta