Pilgrim's Pride Corporation · NASDAQ:PPC
Pilgrim's Pride — Q4 2016 Earnings Presentation
25 slides from Pilgrim's Pride's earnings presentation, Feb 9, 2017
Slide 1: Financial Results for Fourth Quarter and Year Ended Dec 25, 2016
Pilgrim’s Pride Corporation Financial Results for Fourth Quarter and Year Ended Dec 25, 2016
Slide 2: 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” and similar expressions, are forward-looking state
Slide 3: Eggs Sets Average Marginally Up in 2016 from 2015
Eggs Sets Average Marginally Up in 2016 from 2015 Source: USDA 3 198,797.0 212,136.0 211,165.0 208,689.0 185,000 190,000 195,000 200,000 205,000 210,000 215,000 1/ 7 1/ 21 2/ 4 2/ 18 3/ 4 3/ 18 4/ 1 4/ 15 4/ 29 5/ 13 5/ 27 6/ 10 6/ 24 7/ 8 7/ 22 8/ 5 8/ 19 9/ 2 9/ 16 9/ 30 10 /1 4 10 /2 8 11 /1 1 11
Slide 4: 2016 Placements In-line with Prior Year
2016 Placements In-line with Prior Year Source: USDA 4 174,543.0 162,419.0 172,333.0 172,103.0 154,000 159,000 164,000 169,000 174,000 179,000 1/ 7 1/ 21 2/ 4 2/ 18 3/ 4 3/ 18 4/ 1 4/ 15 4/ 29 5/ 13 5/ 27 6/ 10 6/ 24 7/ 8 7/ 22 8/ 5 8/ 19 9/ 2 9/ 16 9/ 30 10 /1 4 10 /2 8 11 /1 1 11 /2 5 12 /9 12 /2
Slide 5: Broiler Type Hatching Layers Down Slightly in 2016
Broiler Type Hatching Layers Down Slightly in 2016 Source: USDA 5
Slide 6: Jumbo Bird Share Remains Steady After Significant Increase Since 2011
Jumbo Bird Share Remains Steady After Significant Increase Since 2011 Source: USDA 6
Slide 7: Hatching Layers Lower vs 2015, Placements Flat
Hatching layers fell in Dec and remain lower than 2015 levels. Egg production is higher in Dec, while pullet placements are flat year on year, supportive of a modest production growth in 2017. Hatching Layers Lower vs 2015, Placements Flat Source: USDA 7
Slide 8: Cold Storage Levels Lower Than 2015
Cold Storage Levels Lower Than 2015 Source: USDA Overall inventories 6% lower than 2015 levels. Leg Quarters continue to remain lower year on year driven by strong exports. 8
Slide 9: Cutout Values Ended Year Higher vs 2015
Cutout Values Ended Year Higher vs 2015 Source: PPC 9 Cutout Value
Slide 10: Leg Quarters Improved vs 2015, Other Parts In-line with Normal Seasonality
Leg Quarters Improved vs 2015, Other Parts In-line with Normal Seasonality Source: USDA 10
Slide 11: High Correlation of GA Dock and EMI Small Bird Value
11 High Correlation of GA Dock and EMI Small Bird Value Source: GA Department of Agriculture and EMI 70.00 75.00 80.00 85.00 90.00 95.00 100.00 105.00 110.00 115.00 120.00 C e n ts /L b EMI 2.5 - 3 LB. Wog and 8&9 Piece Value GA Wed.Dock
Slide 12: Corn Stocks at Record High Levels
Corn Stocks at Record High Levels Global stocks continue to stay at record high levels. 2016 stocks-to-use global inventories have backed off slightly compared to historically high in 2015 but still elevated. Source: USDA 12
Slide 13: Global Soybean Inventories Grow
Global Soybean Inventories Grow Global inventories of soybeans remain high and at record high levels, surpassing 2014 previous highs. Demand for oilseed products estimated to grow to finish out 2016. Source: USDA 13
Slide 14: Fiscal Year 2016 Financial Review
Fiscal Year 2016 Financial Review Mix changes and new strategic capital investment projects raised overall costs and impacted near-term profitability but will translate into more consistent, higher margin, less commoditized portfolio, and stronger key customer relationships. SG&A benefited from
Slide 15: Fourth Quarter 2016 Financial Review
Fourth Quarter 2016 Financial Review Solid Q4 results in Fresh, case-ready and small birds outperformed; MX performed well but was impacted by a stronger than expected $, synergy capture $10MM above expectations. SG&A impacted by increase in bonus accruals. Adjusted Q4-16 EBITDA above Q4-15 de
Slide 16: Balance Sheet Strong, With Plenty of Room for Strategic Investments
307.1 Balance Sheet Strong, With Plenty of Room for Strategic Investments Source: PPC Cash Flow From Operations generation of $224MM in the quarter. Net debt multiple remains low at 0.99x LTM EBITDA, well below target of 2-3x. 16 307.1
Slide 17: Fourth Quarter 2016 Capital Spending
Fourth Quarter 2016 Capital Spending Capex (US$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 expo
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: 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 20: Appendix: Reconciliation of LTM EBITDA
Appendix: Reconciliation of LTM EBITDA Source: PPC The summary unaudited consolidated income statement data for the twelve months ended December 25, 2016 (the LTM Period) have been calculated by summing each of the unaudited thirteen week periods within the audited fifty-two week period ended Decemb
Slide 21: Appendix: EBITDA Margin Reconciliation
Appendix: EBITDA Margin Reconciliation Source: PPC EBITDA margins have been calculated by taking the relevant unaudited EBITDA figures, then dividing by Net Revenue for the applicable period. 21 PILGRIM'S PRIDE CORPORATION Reconciliation of EBITDA Margin (Unaudited) Thirteen Weeks Ended Fifty-Two We
Slide 22: Appendix: Reconciliation of Adjusted Earnings
Appendix: Reconciliation of Adjusted Earnings Source: PPC 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: 22 PILGRIM'S PRIDE CO
Slide 23: Appendix: Adjusted EPS Bridge
Appendix: Adjusted EPS Bridge Source: PPC A reconciliation of GAAP earnings per share (EPS) to adjusted earnings per share (EPS) is as follows: 23 PILGRIM'S PRIDE CORPORATION Reconciliation of GAAP EPS to Adjusted EPS (Unaudited) Thirteen Weeks Ended Fifty-Two Weeks Ended December 25, 2016 December
Slide 24: Appendix: Net Debt / Cash Position Reconciliation
Appendix: Net Debt / Cash Position Reconciliation Source: PPC Net debt is defined as total long term debt less current maturities, plus current maturities of long term debt and notes payable, minus cash, cash equivalents and investments in available-for-sale securities. Net debt is presented because
Slide 25: Appendix: Segment and Geographic Data
Appendix: Segment and Geographic Data Source: PPC 25 PILGRIM'S PRIDE CORPORATION Supplementary Selected Segment and Geographic Data Thirteen Weeks Ended Fifty-Two Weeks Ended December 25, 2016 December 27, 2015 December 25, 2016 December 27, 2015 (Unaudited) (In thousands) Sources of net sales by co