Pilgrim's Pride Corporation · NASDAQ:PPC
Pilgrim's Pride — Q3 2014 Earnings Presentation
22 slides from Pilgrim's Pride's earnings presentation, Oct 29, 2014
Slide 1: Pilgrim's Pride Corporation Financial Results for Third Quarter Ended September 28, 2014
1 Pilgrim’s Pride Corporation Financial Results for Third Quarter Ended September 28, 2014
Slide 2: Forward-Looking Statements
2 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 sta
Slide 3: Broiler Hatcheries Showing Moderate Increase
3 Broiler Hatcheries Showing Moderate Increase Source: USDA-WASDE 204,579 186,077 206,918 195,492 170,000 175,000 180,000 185,000 190,000 195,000 200,000 205,000 210,000 215,000 1/ 4 1/ 18 2/ 1 2/ 15 3/ 1 3/ 15 3/ 29 4/ 12 4/ 26 5/ 10 5/ 24 6/ 7 6/ 21 7/ 5 7/ 19 8/ 2 8/ 16 8/ 30 9/ 13 9/ 27 10 /1 1
Slide 4: Placements Impacted by Low Hatchability
169,196 153,735 162,420 169,708 164,134 140,000 145,000 150,000 155,000 160,000 165,000 170,000 175,000 180,000 1/ 4 1/ 18 2/ 1 2/ 15 3/ 1 3/ 15 3/ 29 4/ 12 4/ 26 5/ 10 5/ 24 6/ 7 6/ 21 7/ 5 7/ 19 8/ 2 8/ 16 8/ 30 9/ 13 9/ 27 10 /1 1 10 /2 5 11 /8 11 /2 2 12 /6 12 /2 0 Th ou sa nd H ea d United Stat
Slide 5: Hatching Layers Up 2% from 2013
• Hatching layers in Sep are up 2% from 2013 while egg production was unchanged • Sep pullet placements were up 4% and YTD placements are up 2% Hatching Layers Up 2% from 2013
Slide 6: Frozen Inventories 9% Below 2013 Levels
6 Frozen Inventories 9% Below 2013 Levels Source: USDA-WASDE • Overall inventories are well below last year with some of the more significant declines in wings and leg quarters.
Slide 7: Chicken Cutout Remains Positive
6 Chicken Cutout Remains Positive Source: USDA-WASDE
Slide 8: USDA Chicken Prices
8 USDA Chicken Prices Source: USDA-WASDE
Slide 9: USDA Whole Bird Chicken Prices
113.53 88.94 91.58 121.09 105.28 70.00 80.00 90.00 100.00 110.00 120.00 130.00 1/ 5 1/ 19 2/ 2 2/ 16 3/ 2 3/ 16 3/ 30 4/ 13 4/ 27 5/ 11 5/ 25 6/ 8 6/ 22 7/ 6 7/ 20 8/ 3 8/ 17 8/ 31 9/ 14 9/ 28 10 /1 2 10 /2 6 11 /9 11 /2 3 12 /7 12 /2 1 US D pe r C W T '09-'13 Range '12 '13 '14 '09-'13 Avg USDA Whol
Slide 10: Chicken Supplies Expected to Increase Moderately in 2015
Chicken Supplies Expected to Increase Moderately in 2015 Source: USDA-NASS 9 • USDA continues to lower their 2014 estimate for increased chicken production (+1.1% currently) while forecasting a 2.8% increase in production for 2015.
Slide 11: Exports Continue Consistent Growth Trend
6 Exports Continue Consistent Growth Trend Source: USDA-WASDE
Slide 12: Corn Production to Set Another Record in 2014
Corn Production to Set Another Record in 2014 Source: USDA 11 • Farmers in the US planted nearly 4 million fewer acres responding to better economics from soybeans. • Even with the decline in corn acreage planted, production is forecasted to set a record in 2014.
Slide 13: Global Corn Stocks Continue to Rise
Global Corn Stocks Continue to Rise • Back to back record corn crops in the US combines with Brazilian corn production, pushing global stocks to over 190 million tons. • At a 19.6% stocks-to-use ratio, global inventories will be at one of the highest levels historically.
Slide 14: Third Quarter 2014 Financial Results
Third Quarter 2014 Financial Results 14 Source: PPC Main Indicators ($M) 3Q 14 3Q 13 Net Revenue 2,268.0 2,142.8 Gross Profit 450.3 236.6 SG&A 44.7 47.5 Net Interest 10.2 14.7 Net Income 256.0 160.9 Net Income per Share 0.99 0.62 EBITDA* 435.0 222.5 EBITDA Margin 19.2% 10.4% *EBITDA is a non-GAAP me
Slide 15: Third Quarter 2014 Liquidity
15 Third Quarter 2014 Liquidity Source: PPC Sources of Liquidity 2014 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Cash and cash equivalents 508.2 515.0 527.4 868.6 Short-term investments in available-for-sale securities 96.9 37.0 - - Borrowing arra
Slide 16: Third Quarter 2014 Capital Spending
16 Third Quarter 2014 Capital Spending Capex (US$MM) Source: PPC Strong free cash flow generation has enabled us to direct more capital spending towards identified projects with rapid payback.
Slide 17: Evolution of Cost Improvements Over 2010 Baseline
Evolution of Cost Improvements Over 2010 Baseline 17 Source: PPC
Slide 18: Investor Relations Contact
Investor Relations Contact 18 Investor Relations: E-mail: IRPPC@pilgrims.com Address: 1770 Promontory Circle Greeley, CO 80634 USA Website: www.pilgrims.com
Slide 19: Appendix: EBITDA Reconciliation
Appendix: EBITDA Reconciliation 19 “EBITDA” is defined as the sum of net income (loss) plus interest, taxes, depreciation and amortization. “Adjusted EBITDA” is defined as the sum of EBITDA plus restructuring charges, reorganization items and loss on early extinguishment of debt less net income attr
Slide 20: Appendix: Reconciliation of LTM EBITDA
Appendix: Reconciliation of LTM EBITDA 20 Source: PPC The summary unaudited consolidated income statement data for the last twelve months ended September 28, 2014 (the LTM Period) have been calculated by subtracting the applicable unaudited consolidated income statement data for the thirty-nine week
Slide 21: Appendix: Reconciliation of EBITDA Margin
Appendix: Reconciliation of EBITDA Margin 21 Source: PPC EBITDA margins have been calculated using by taking the unaudited EBITDA figures and income statement components, then dividing by Net Revenue for the applicable period. (Unaudited) September 28, September 29, September 28, September 29, Septe
Slide 22: Appendix: Net Debt / Cash Position Reconciliation
Appendix: Net Debt / Cash Position Reconciliation 22 Source: PPC Net debt is defined as total long term debt less current maturities, plus current maturities of long term debt, minus cash, cash equivalents and investments in available-for-sale securities. Net debt is presented because it is used by