Pilgrim's Pride Corporation · NASDAQ:PPC
Pilgrim's Pride — Q3 2019 Earnings Presentation
24 slides from Pilgrim's Pride's earnings presentation, Oct 31, 2019
Slide 1: Financial Results for Third Quarter Ended Sep 29, 2019
Financial Results for Third Quarter Ended Sep 29, 2019 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: Pullet Placement Growth Remains In Line With Expected New Capacity
Pullet Placement Growth Remains In Line With Expected New Capacity Intended Pullet Placements 9,000 8,500 8,000 7,500 7,000 6,500 ThousandHead 6,000 5,500 5,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2018 2019 5 Yr. Avg. . Trailing 8-Month placements average 3.3% above year prior to accommo
Slide 4: Hatching Layer Flock Seasonally Declining; Q3 Egg Production Below 2018 and 5 Year Average
Hatching Layer Flock Seasonally Declining; Q3 Egg Production Below 2018 and 5 Year Average Broiler Type Hatching Layers Egg Production per 100 Layers 60,000 2,000 59,000 1,950 58,000 1,900 57,000 1,850 56,000 1,800 55,000 Eggs 1,750 54,000 ThousandHead 53,000 1,700 52,000 1,650 51,000 1,600 50,000 1
Slide 5: Hatchery Utilization Remains Close to Year Average
Hatchery Utilization Remains Close to 5 Year Average 96.0% 94.0% 92.0% 90.0% % % 88.0% 86.0% 84.0% 82.0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2018 2019 5 Yr. Avg. Source: Agristats 5
Slide 6: Egg Sets Up +1.7% YTD, Hatchability Remains In Line
Egg Sets Up +1.7% YTD, Hatchability Remains In Line With 2018 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% Thousands of Eggs 190,000 79.5% 79.0% 180,000 78.5% 170,000 78.0% 5 Year Range 2017 20
Slide 7: Chick Placements Up +1.7% YTD
Chick Placements Up +1.7% YTD 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: Jumbo Bird and Case Ready Categories Growing Share
Jumbo Bird and Case Ready Categories Growing Share Head Processed by Size 100% 15.1% 15.6% 18.3% 90% 19.7% 21.4% 20.9% 21.2% 21.7% 22.8% 80% 19.1% 19.3% 70% 19.4% 19.3% 20.9% 22.5% 23.6% 25.4% 25.7% 60% 50% 42.9% 40.7% 35.5% 35.0% 40% 32.2% 31.2% 30.4% 30.2% 29.6% 30% 20% 26.9% 26.1% 25.5% 25.3% 24.
Slide 9: Total Freezer Inventories Continued to Decline Y/Y
Total Freezer Inventories Continued to Decline Y/Y Total Chicken Inventories 1,000,000 950,000 900,000 850,000 800,000 LBS (000) 750,000 700,000 650,000 2017 2018 2019 3 Yr. Avg. . Total inventories showing normal seasonal increase. . LQ climbing back from historical lows, but still remain well belo
Slide 10: Cutout Following Seasonal Trends and Remains Above 2018
Cutout Following Seasonal Trends and Remains Above 2018 Cutout Value 110.00 100.00 90.00 80.00 Cents/Lb 70.00 61.79 60.00 50.00 1/4 2/1 3/1 6/7 7/5 8/2 6/21 12/6 1/18 2/15 3/15 3/29 4/12 4/26 5/10 5/24 7/19 8/16 8/30 9/13 9/27 11/8 10/11 10/25 11/22 12/20 5 Year Range 2017 2018 2019 5 Yr. Avg. Sourc
Slide 11: Strength in Wings and LQs Continue to Support Cutout
Strength in Wings and LQs Continue to Support Cutout; Boneless Breast In Line With 2018 USDA Boneless/Skinless Breast NE USDA Tenders NE 215.00 250.00 195.00 230.00 175.00 210.00 190.00 155.00 170.00 135.00 Cents/Lb Cents/Lb 150.00 142.33 115.00 130.00 95.00 110.00 85.78 75.00 90.00 3/6 1/5 2/4 4/5
Slide 12: Seasonal Decline Started Early for WOGs, But Has Rebounded
Seasonal Decline Started Early for WOGs, But Has Rebounded Close to 5 Year Range EMI WOG 2.5-4.0 LBS 120 110 100 90 Cents/Lb. 80 78.99 70 60 1/5 2/2 3/2 6/8 7/6 8/3 1/19 2/16 3/16 3/30 4/13 4/27 5/11 5/25 6/22 7/20 8/17 8/31 9/14 9/28 11/9 12/7 10/12 10/26 11/23 12/21 5 Year Range 2017 2018 2019 5 Y
Slide 13: Corn Stocks Projected to Decrease in '19
Corn Stocks Projected to Decrease in ‘19 . Despite challenging growing season in the U.S., global stocks/use to remain relatively flat in 2019. . Increase in global wheat supplies to reduce global corn trade this crop year. Source: USDA 13
Slide 14: Global Soybean Inventories Remain High
Global Soybean Inventories Remain High . Stocks are set to decline from record levels due to reduction in U.S. soybean production. . Lower global export demand due to ASF keeping stocks/use at surplus levels. Source: USDA 14
Slide 15: Third Quarter 2019 Financial Review
Third Quarter 2019 Financial Review . U.S.: Commodity recovered Y/Y , PF solid; MX: In-line with seasonality; Main Indicators ($M) Q3-19 Q3-18 UK/Europe: Pricing model adjustments Net Revenue 2,778.0 2,697.6 and operational improvements continue to generate higher profits. Gross Profit 282.2 169.7 .
Slide 16: Fiscal Year 2019 Capital Spending
Fiscal Year 2019 Capital Spending CapexCapex (US$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 17: 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 17
Slide 18: Appendix
APPENDIX All about great taste 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 The summary unaudited consolidated income statement data for the twelve months ended September 29, 2019 (the LTM Period) have been calculated by subtracting the applicable unaudited consolidated income statement data for the nine months ended September 30, 2018
Slide 21: 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 (Unaudited) Thirteen Weeks Ended Thirty-Nine Weeks Ended Thi
Slide 22: 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 23: Appendix: Adjusted EPS Bridge
Appendix: Adjusted EPS Bridge A reconciliation of GAAP earnings per share (EPS) to adjusted earnings per share (EPS) is as follows: PILGRIM'S PRIDE CORPORATION Reconciliation of GAAP EPS to Adjusted EPS (Unaudited) Thirteen Weeks Ended Thirty-Nine Weeks Ended September 29, September 30, September 29
Slide 24: Appendix: Segment and Geographic Data
Appendix: Segment and Geographic Data PILGRIM'S PRIDE CORPORATION Supplementary Selected Segment and Geographic Data (Unaudited) Thirteen Weeks Ended Thirty-Nine Weeks Ended September 29, 2019 September 30, 2018 September 29, 2019 September 30, 2018 (In thousands) Sources of net sales by country of