Tyson Foods, Inc. · NYSE:TSN
Tyson Foods — Q2 2022 Earnings Presentation
24 slides from Tyson Foods's earnings presentation, May 9, 2022
Slide 1: 2Q Fiscal 2022 Supplemental Information
— 2Q Fiscal 2022 Supplemental Information May 9, 2022
Slide 2: 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 2022, other future economic
Slide 3: Solid first half driven by strong fundamentals and improving execution
Solid first half driven by strong fundamentals and improving execution 1 Delivered double digit sales and earnings growth in the quarter Leveraged diverse protein portfolio, omni-channel capabilities, leading 2 brands and value-added products to deliver results Mitigated inflationary impacts through
Slide 4: Double digit sales and earnings growth through the first half
Double digit sales and earnings growth through the first half Sales1 Adjusted Operating Income2 Adjusted Earnings Per Share2 16% 57% 71% 2Q22 vs. 2Q21 2Q22 vs. 2Q21 2Q22 vs. 2Q21 20% 47% 57% 1H22 vs. 1H21 1H22 vs. 1H21 1H22 vs. 1H21 Our Priorities 1| Win with team members 2| Win with customers and c
Slide 5: Remain confident that actions will improve volume
Remain confident that actions will improve volume Volume1 (billion pounds) Total Company -0.7% Chicken +2.1% Prepared Foods -4.0% 14.08 14.00 6.12 6.24 1.75 1.68 1H21 1H22 1H21 1H22 1H21 1H22 Expect volume growth of 1-2% in FY22 Outpacing market through operating improvements Labor and supply chain
Slide 6: Becoming the most sought-after place to work through our investments in team members
Becoming the most sought-after place to work through our investments in team members Objectives 1 2 3 Health, safety and wellbeing Competitive wage and Investing in team member of our team members benefit offerings experience Actions 100+ vaccine booster clinics with Implemented wage increases Incre
Slide 7: Accelerating productivity program savings realization
Accelerating productivity program savings realization Targeting $1B+ in productivity gains by end of FY2024 and now expect 40%+ delivered by the end of FY2022 $1,000M+ $400M+ FY22 FY24 Actions will lead to sustainable productivity savings in three key focus areas Operational & Functional Digital Sol
Slide 8: Completing meaningful steps on road to Chicken recovery
Completing meaningful steps on road to Chicken recovery Achieved mid-year FY22 run rate target for the segment Objectives Improve operational Be the employer of choice Serve our customers performance Actions Focused on improving turnover and Adding fully cooked capacity through Hatch rate improvemen
Slide 9: Strengthening our position as a global protein leader
Strengthening our position as a global protein leader Imperatives 1 2 3 4 5 Outpacing the market by Driving operational and Leveraging our Aggressively restoring our Transforming our team enhancing our portfolio functional excellence and financial strength to invest competitiveness in member experie
Slide 10: Strong financial performance shows benefit of diverse portfolio
Strong financial performance shows benefit of diverse portfolio Second Quarter and 1H 2022 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 ADJUSTED EPS1 (in millions of dollars) (in millions of dollars) (in dollars per share) $26,050 $21,760 $2,593 $5.16 +20% $1,764 $3.28 +47% +57% $2.29 $13,
Slide 11: Earnings increased due to effective actions to mitigate inflation and deliver productivity savings
Earnings increased due to effective actions to mitigate inflation and deliver productivity savings Second Quarter 2022 Highlights $ millions • Volumes decreased due to $1,983 - $1,494 declines in Pork and Prepared Foods slightly offset by growth in Chicken and Beef • Price/mix benefitted substantial
Slide 12: Market fundamentals support elevated Beef margins
Market fundamentals support elevated Beef margins Second Quarter and 1H22 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 HIGHLIGHTS (in millions of dollars) (in millions of dollars) o Sales volume increased in the quarter due to $10,036 higher harvest weights, partially offset by initially $
Slide 13: Solid first half in Pork despite labor challenges from Omicron
Solid first half in Pork despite labor challenges from Omicron Second Quarter and 1H22 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 HIGHLIGHTS (in millions of dollars) (in millions of dollars) $3,191 o Sales volume was down for the first half impacted $2,916 $223 by an initially challengin
Slide 14: Continued progress toward targeted margin in Prepared Foods
Continued progress toward targeted margin in Prepared Foods Second Quarter and 1H22 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 HIGHLIGHTS (in millions of dollars) $4,726 (in millions of dollars) o Sales volume decreased due to lower production throughput primarily associated with a chall
Slide 15: Strong fundamentals and improving execution in Chicken
Strong fundamentals and improving execution in Chicken Second Quarter and 1H22 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 HIGHLIGHTS (in millions of dollars) (in millions of dollars) o Sales volume increased due to improved hatch $7,976 rate and a strong demand environment $320 o Average
Slide 16: Continued healthy cash generation supports investment and return of cash to shareholders
Continued healthy cash generation supports investment in our business and return of cash to shareholders Leverage Ratio OPERATING CASH FLOW BUILD (Net Debt/Adj. EBITDA)1 (in billions of dollars) FINANCIAL <2.0x STRENGTH 1.1x $1.35 Manage our leverage ratio to be at or below our long-term target 2Q22
Slide 17: Raising sales guidance and margin indications on strong first half performance
Raising sales guidance and margin indications on strong first half performance FY2022 Guidance2 1H21 1H22 Prior Indication Revised Indication Sales $21.8 billion $26.1 billion $49 – $51 billion $52 – $54 billion Volume (4.1)% (0.7)% 2 – 3% growth 1 – 2 % growth Chicken AOI Margin1 1.6% 4.0% 5 – 7% U
Slide 18: Appendix
Appendix
Slide 19: Total sales improved in all segments and across all channels
Total sales improved in all segments and across all channels Second Quarter 2022 $ millions Channel Highlights • Retail sales improved by $424 $78 -$991 $13,117 million in the quarter, led by $88 $988 increases in Beef up $177 million and Chicken up $123 million Retail Foodservice • Foodservice drov
Slide 20: Taking actions to restore volume levels in all segments
Taking actions to restore volume levels in all segments Volume1 (billion pounds) Total Company Chicken Prepared Foods 7.01 7.07 7.07 6.88 7.03 6.97 3.00 3.12 3.17 3.14 3.10 3.14 0.87 0.88 0.92 0.84 0.85 0.83 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 Be
Slide 21: EPS Reconciliations
EPS Reconciliations $ in millions, except per share data (Unaudited) Second Quarter Six Months Ended Pretax Impact EPS Impact Pretax Impact EPS Impact 2022 2021 2022 2021 2022 2021 2022 2021 Reported net income per share attributable to Tyson (GAAP EPS) $ 2.28 $ 1.30 $ 5.35 $ 2.58 Add: China plant r
Slide 22: EBITDA Reconciliations
EBITDA Reconciliations $ in millions, except per share data (Unaudited) Six Months Ended Fiscal Year Ended Twelve Months Ended April 2, 2022 April 3, 2021 October 2, 2021 April 2, 2022 Net Income $ 1,959 $ 949 $ 3,060 $ 4,070 Less: Interest income (6) (4) (8) (10) Add: Interest expense 197 220 428 4
Slide 23: Segment Operating Income Reconciliations
Segment Operating Income Reconciliations $ in millions (Unaudited) Adjusted Segment Operating Income (for the second quarter ended April 2, 2022) Beef Pork Chicken Prepared Foods International/Other Total Reported operating income $ 638 $ 59 $ 198 $ 263 $ (2) $ 1,156 Add: Production facilities fire
Slide 24: Segment Operating Income Reconciliations
Segment Operating Income Reconciliations $ in millions (Unaudited) Adjusted Segment Operating Income (for the second quarter ended April 3, 2021) Beef Pork Chicken Prepared Foods International/Other Total Reported operating income (loss) $ 445 $ 67 $ 6 $ 217 $ (15) $ 720 Add: China plant relocation