Pilgrim's Pride Corporation · NASDAQ:PPC
Pilgrim's Pride — Q2 2021 Earnings Presentation
29 slides from Pilgrim's Pride's earnings presentation, Jul 29, 2021
Slide 1: Financial Results for Second Quarter Ended June 27, 2021
Pilgrim’s Pride Corporation (NASDAQ: PPC) Financial Results for Second Quarter Ended June 27, 2021
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 Up 7.9% in Q2 2021
Trailing 8-Month placements up 1.8% vs. year ago. Pullet Placements Up 7.9% in Q2 2021 as June Placements Significantly Higher Than June 2020 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 Dec Th o u sa n d H e a d 2020
Slide 4: Hatching Layers Maintain YoY Growth While Eggs/100 Trend Above 2020 Levels
Hatching Layers Maintain YoY Growth While Eggs/100 Trend Above 2020 Levels Source: USDA 4 Increased broiler layer flock and improvements in eggs/100 contributing to 2.1% YTD growth in domestic egg availability 1,500 1,550 1,600 1,650 1,700 1,750 1,800 1,850 1,900 1,950 2,000 Jan Feb Mar Apr May Ju
Slide 5: Hatchery Utilization Above Year Average in Q2 2021
5 Hatchery Utilization Above 5 Year Average in Q2 2021 Source: Agristats 78.0% 80.0% 82.0% 84.0% 86.0% 88.0% 90.0% 92.0% 94.0% 96.0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec % 2020 2021 5 Yr. Avg.
Slide 6: Egg Sets Trended Above 2019 and 2020 in Q2 2021
Egg Sets Trended Above 2019 and 2020 in Q2 2021; Hatchability Struggles Continued During the Quarter Source: USDA 6 170,000 180,000 190,000 200,000 210,000 220,000 230,000 240,000 250,000 Th o us a nd s o f E g g s Chicken Egg Sets by Week - USDA 5 Year Range 2019 2020 2021 5 Yr. Avg. 74.0% 75.0% 76
Slide 7: Average Broiler Placements Increased 3.8% in Q2 2021 YoY
Source: USDA 7 Average Broiler Placements Increased 3.8% in Q2 2021 YoY, but Ended the Quarter Trending Below Q2 2019 160,000 165,000 170,000 175,000 180,000 185,000 190,000 195,000 H e ad ( 0 00 ) Chicken Broiler Placed by Week- USDA 5 Year Range 2019 2020 2021 5 Yr. Avg.
Slide 8: Heavier Bird Weight Categories Continue to Gain Headcount Share
Source: USDA 8 Heavier Bird Weight Categories Continue to Gain Headcount Share 23.0% 24.4% 26.9% 26.1% 25.5% 25.3% 24.8% 22.7% 21.8% 20.9% 20.3% 42.9% 40.7% 35.5% 35.0% 32.2% 31.2% 30.4% 30.2% 28.7% 27.4% 25.7% 19.1% 19.3% 19.4% 19.3% 20.9% 22.5% 23.6% 25.4% 26.2% 27.6% 29.0% 15.1% 15.6% 18.3% 19.7%
Slide 9: Cold Storage Inventories Below 2020 and Yr. Average
Cold Storage Inventories Below 2020 and 5 Yr. Average Source: USDA Breast meat inventories end quarter at lowest levels since October 2019 Wings inventories still almost 18% below year ago levels LQ inventories are flat vs. June 2020, but remain 27% below 5 year average 9 500,000 600,000 700,0
Slide 10: Cutout Remained Well Above Year Range Throughout Q2 2021
Cutout Remained Well Above 5 Year Range Throughout Q2 2021 Source: PPC, EMI 10 112.96 40.00 50.00 60.00 70.00 80.00 90.00 100.00 110.00 120.00 130.00 1/ 8 1/ 22 2/ 5 2/ 19 3/ 5 3/ 19 4/ 2 4/ 16 4/ 30 5/ 14 5/ 28 6/ 11 6/ 25 7/ 9 7/ 23 8/ 6 8/ 20 9/ 3 9/ 17 10 /1 10 /1 5 10 /2 9 11 /1 2 11 /2 6 12 /1
Slide 11: Pricing for Main Cuts Elevated Throughout Q2 2021
Source: USDA 11 Pricing for Main Cuts Elevated Throughout Q2 2021; Tenders Continue to Climb 46.13 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 10 /2 11 /1 12 /1 Ce nt s/ Lb USDA Leg Quarters NE 5 Year Range 2019 2020 2021 5 Year Average 180.57 75.00 95.00 1
Slide 12: WOG Pricing Remained Above Yr. Average Throughout Q2 21
12 WOG Pricing Remained Above 5 Yr. Average Throughout Q2 2021 Source: EMI 102.2 60.0 70.0 80.0 90.0 100.0 110.0 120.0 1/ 3 1/ 17 1/ 31 2/ 14 2/ 28 3/ 13 3/ 27 4/ 10 4/ 24 5/ 8 5/ 22 6/ 5 6/ 19 7/ 3 7/ 17 7/ 31 8/ 14 8/ 28 9/ 11 9/ 25 10 /9 10 /2 3 11 /6 11 /2 0 12 /4 12 /1 8 Ce nt s/ Lb . EMI WOG 2
Slide 13: Corn Stocks Remain Tight
Corn Stocks Remain Tight US corn stocks continues to be lowered by USDA, tightening old crop stocks similar to levels last seen in 2013 The market is focusing the current summer weather for indications about new crop supply Source: USDA 13
Slide 14: Soybean Stocks Remain Tight
Soybean Stocks Remain Tight Old crop soybean stocks are forecasted to be at the lowest levels since 2013/14 New crop supplies are forecasted to increase modestly assuming trend line yields Source: USDA 14
Slide 15: Second Quarter 2021 Financial Review
Second Quarter 2021 Financial Review U.S.: QSR and retail maintaining strength while commodity continued momentum due to better foodservice demand; labor tightness impacting product mix; Mexico: Strength continues on balanced supply/demand conditions, improving macro; UK/Europe: Higher feed, lower
Slide 16: Fiscal Year 2021 Capital Spending
Fiscal Year 2021 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 emphasize our focus on a
Slide 17: Investor Relations Contact
Investor Relations Contact Investor Relations: Julie Kegley Financial Profiles E-mail: IRPPC@pilgrims.com Address: 1770 Promontory Circle Greeley, CO 80634 USA Website: www.pilgrims.com 17
Slide 18: Appendix
APPENDIX All about great taste. 18
Slide 19: Reconciliation of Adjusted EBITDA
Appendix: Reconciliation of Adjusted EBITDA Source: PPC. “EBITDA” is defined as the sum of net income 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 ar
Slide 20: 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 21: Reconciliation of LTM Adjusted EBITDA
Appendix: Reconciliation of LTM Adjusted EBITDA 21 Source: PPC. The summary unaudited consolidated income statement data for the twelve months ended June 27, 2021 (the LTM Period) have been calculated by subtracting the applicable unaudited consolidated income statement data for the six months ended
Slide 22: Reconciliation of EBITDA Margin
Appendix: Reconciliation of EBITDA Margin 22 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 23: Reconciliation of Adjusted EBITDA by Segment
Appendix: Reconciliation of Adjusted EBITDA by Segment 23 Source: PPC. 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. Acco
Slide 24: Reconciliation of Adjusted EBITDA by Segment
Appendix: Reconciliation of Adjusted EBITDA by Segment 24 Source: PPC. 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. Acco
Slide 25: Reconciliation of Adjusted Operating Income
Appendix: Reconciliation of Adjusted Operating Income 25 Source: PPC. 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 In
Slide 26: Reconciliation of Adjusted Operating Income
Appendix: Reconciliation of Adjusted Operating Income 26 Source: PPC. 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 provides useful supplemental inf
Slide 27: Reconciliation of Adjusted Net Income
Appendix: Reconciliation of Adjusted Net Income 27 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 28: Reconciliation of GAAP EPS to Adjusted EPS
Appendix: Reconciliation of GAAP EPS to Adjusted EPS 28 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 29: Supplementary Selected Segment and Geographic Data
Appendix: Supplementary Selected Segment and Geographic Data 29 Source: PPC. Source: PPC PILGRIM'S PRIDE CORPORATION Supplementary Selected Segment and Geographic Data (Unaudited) Three Months Ended Six Months Ended June 27, 2021 June 28, 2020 June 27, 2021 June 28, 2020 (In thousands) Sources of ne