Pilgrim's Pride Corporation · NASDAQ:PPC
Pilgrim's Pride — Q3 2020 Earnings Presentation
26 slides from Pilgrim's Pride's earnings presentation, Oct 29, 2020
Slide 1: Financial Results for Third Quarter Ended Sep 27, 2020
Financial Results for Third Quarter Ended Sep 27, 2020 Pilgrim’s Pride Corporation (NASDAQ: PPC)
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 1.1% Driven by September Placements
Pullet Placements Up 1.1% Driven by September Placements 10,000 Intended Pullet Placements 9,000 8,000 7,000 6,000 5,000 4,000 3,000 Thousand Head 2,000 1,000 - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019 2020 5 Yr. Avg. . Trailing 8-Month placements up +1.1% vs. year ago. . Pullet growth i
Slide 4: Hatching Layer Flock and Egg Productivity Modestly Up
Hatching Layer Flock and Egg Productivity Modestly Up, Increasing Availability of Eggs Broiler Type Hatching Layers Eggs/100 64,000 1,950 1,900 62,000 1,850 60,000 1,800 58,000 1,750 Eggs 56,000 1,700 Head (000) Head 1,650 54,000 1,600 52,000 1,550 50,000 1,500 Jan Feb Mar Apr May Jun Jul Aug Sep Oc
Slide 5: Hatchery Utilization Partially Recovered but Below 2019 Levels
Hatchery Utilization Partially Recovered but Remained Below 2019 Levels Since April 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 2019 2020 5 Yr. Avg. Source: Agristats 5
Slide 6: Egg Sets Down 0.6% in Q3; Hatchability Below 2019
Despite Higher Availability, Egg Sets Down 0.6% in Q3; Hatchability Still Below 2019 Levels and Historical Chicken Egg Sets Chicken Hatchability by Week - USDA by Week - USDA 250,000 83.0% 240,000 82.0% 230,000 81.0% 220,000 80.0% 79.0% 210,000 % 78.0% 200,000 Thousands of Eggs of Thousands 77.0% 19
Slide 7: Total Placements Also Down 0.6% in the Quarter
Total Placements Also Down 0.6% in the Quarter Chicken Broiler Placed by Week- USDA 195,000 190,000 185,000 180,000 175,000 Head (000) 170,000 165,000 160,000 5 Year Range 2018 2019 2020 5 Yr. Avg. Source: USDA 7
Slide 8: Growth Concentrated in Big Bird Categories
Growth Remains Concentrated in Big Bird Categories and Continuing Reduction in Small Birds Head Processed by Size 100% 15.1% 15.6% 90% 18.3% 19.7% 21.4% 20.9% 21.2% 21.7% 23.3% 24.1% 80% 19.1% 19.3% 70% 19.4% 19.3% 20.9% 22.5% 23.6% 25.4% 26.2% 60% 27.6% 50% 42.9% 40.7% 35.5% 35.0% 40% 32.2% 31.2% 3
Slide 9: September Freezer Inventory Down 2.7% vs. Year Ago
September Freezer Inventory Down 2.7% vs. Year Ago Total Chicken Inventories 1,100,000 1,000,000 900,000 800,000 LBS (000) 700,000 600,000 500,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2018 2019 2020 5 Yr. Avg. . Breast meat inventories are moving seasonally, but remain above year ago leve
Slide 10: Value Cutout Tracking Closer to 2019
Cents/Lb 100.00 40.00 50.00 60.00 70.00 80.00 90.00 1/4 1/18 2/1 2/15 3/1 5 Year Range 5 Year 3/15 3/29 4/12 4/26 2018 5/10 ValueCutout 5/24 Cutout 6/7 2019 6/21 7/5 7/19 Now Tracking Closer to2019, 2020 8/2 5- the Within and 8/16 8/30 5 Yr. Avg. 5 Yr. 9/13 9/27 Source:PPC, EMI 10/11 10/25 59.21 11/
Slide 11: Wings Strong, BSB and Tenders In-line, LQs Recovering
Wings Remaining Strong, BSB and Tenders In-line with Seasonality, LQs Started to Recover USDA Boneless/Skinless Breast NE USDA Tenders NE 175.00 235.00 215.00 155.00 195.00 135.00 175.00 155.00 115.00 145.12 Cents/Lb Cents/Lb 135.00 115.00 95.00 87.58 95.00 75.00 75.00 1/5 2/4 3/6 4/5 5/5 6/4 7/4 8/
Slide 12: Seasonally Improving Pricing for WOG
Cents/Lb. 100.0 110.0 120.0 40.0 50.0 60.0 70.0 80.0 90.0 1/3 1/17 1/31 2/14 2/28 5 Year Range 5 Year 3/13 3/27 4/10 4/24 2018 5/8 WOG 2.5 EMI 5/22 and Is Now Reaching the 5- the Reaching Now Is and 6/5 Seasonally Improving Pricing WOG 2019 6/19 - 4.0 LBS 7/3 7/17 2020 7/31 8/14 5 Year Average Year
Slide 13: Corn Stocks Remain at High Levels
Corn Stocks Remain at High Levels . USDA lowered U.S. corn ending stocks for both 2019 and 2020, yet supply remains ample . The market continues to watch export impacts with the Phase 1 trade deal with China Source: USDA 13
Slide 14: Soybean Inventories Tighten
Soybean Inventories Tighten . USDA decreases soybean ending stocks in 2020 to levels previously seen before the trade war . Exports of soybeans from the U.S. is the driving factor in the tightening stocks Source: USDA 14
Slide 15: Third Quarter 2020 Financial Review
Third Quarter 2020 Financial Review . U.S.: Performance recovering, diversified portfolio and Key Customer strategy Main Indicators ($M) Q3-20 Q3-19 minimized channel demand disruption; MX: Strong rebound on much more Net Revenue 3,075.1 2,778.0 balanced supply/demand conditions, Gross Profit 313.8
Slide 16: Fiscal Year 2020 Capital Spending
Fiscal Year 2020 Capital Spending CapexCapex (US$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 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: Reconciliation of Adjusted EBITDA
Appendix: Reconciliation of Adjusted EBITDA “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
Slide 20: Appendix: Reconciliation of LTM Adjusted EBITDA
Appendix: Reconciliation of LTM Adjusted EBITDA The summary unaudited consolidated income statement data for the twelve months ended September 27, 2020 (the LTM Period) have been calculated by subtracting the applicable unaudited consolidated income statement data for the nine months ended September
Slide 21: Appendix: Reconciliation of EBITDA Margin
Appendix: Reconciliation of EBITDA Margin 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 by securities ana
Slide 22: Appendix: Reconciliation of Adjusted Operating Income
Appendix: Reconciliation of Adjusted Operating Income 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 Income provides useful supplem
Slide 23: Appendix: Reconciliation of GAAP Operating Income Margin to Adjusted
Appendix: Reconciliation of GAAP Operating Income Margin to Adjusted Operating Income Margin 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 suppl
Slide 24: Appendix: Reconciliation of Adjusted Net Income
Appendix: Reconciliation of Adjusted Net Income 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 of income. Mana
Slide 25: Appendix: Reconciliation of GAAP EPS to Adjusted EPS
Appendix: Reconciliation of GAAP EPS to Adjusted EPS 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 about our operat
Slide 26: Appendix: Supplementary Selected Segment and Geographic Data
Appendix: Supplementary Selected Segment and Geographic Data PILGRIM'S PRIDE CORPORATION Supplementary Selected Segment and Geographic Data (Unaudited) Three Months Ended Nine Months Ended September 27, 2020 September 29, 2019 September 27, 2020 September 29, 2019 (In thousands) Sources of net sales