Pilgrim's Pride Corporation · NASDAQ:PPC
Pilgrim's Pride — Q2 2018 Earnings Presentation
24 slides from Pilgrim's Pride's earnings presentation, Aug 2, 2018
Slide 1: Financial Results for Second Quarter Ended July 1, 2018
Financial Results for Second Quarter Ended July 1, 2018 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: 2018 Pullet Placements Up 3.1% YTD
2018 Pullet Placements Up 3.1% YTD Intended Pullet Placements 10,000 9,500 9,000 8,500 8,000 7,500 7,000 Thousand Head Thousand 6,500 6,000 5,500 5,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2017 2018 5 year avg. Pullet placements can be volatile and are up YOY as egg availability remains
Slide 4: Layer Growth Countering Declining Productivity and Supporting New Plants
Layer Growth Countering Declining Productivity and Supporting New Plants Broiler Type Hatching Layers Egg Production per 100 Layers 60,000 1,950 59,000 1,900 58,000 57,000 1,850 56,000 1,800 55,000 1,750 54,000 Eggs 1,700 ThousandHead 53,000 1,650 52,000 51,000 1,600 50,000 1,550 Jan Feb Mar Apr May
Slide 5: Hatchery Utilization Remains Very High
Hatchery Utilization Remains Very High Hatchery Utilization 94.00% 93.00% 92.00% 91.00% 90.00% % 89.00% 88.00% 87.00% 86.00% 85.00% 84.00% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2016 2017 2018 5 year avg. Source: Agristats 555
Slide 6: +2.7% Increase in Egg Sets Required to Offset Low Hatch
+2.7% Increase in Egg Sets Required to Offset Low Hatch Chicken Egg Sets Chicken Hatchability by Week - USDA by Week - USDA 240,000 85.0% 230,000 84.0% 83.0% 220,000 82.0% 210,000 % 81.0% 200,000 80.0% 190,000 ThousandsEggs of 79.0% 180,000 78.0% 170,000 77.0% 5 Year Range 2016 2017 2018 5 year avg
Slide 7: 2018 YTD Chick Placements Up 1.5%
2018 YTD Chick Placements Up 1.5% Chicken Broiler Placed by Week- USDA 195,000 190,000 185,000 180,000 175,000 Head (000) 170,000 165,000 160,000 Source: USDA 777
Slide 8: Jumbo Weight Has Increased Share of Head Total While Small Bird Head Down 2.8%
Jumbo Weight Has Increased Share of Head Total While Small Bird Head Down 2.8% YTD Head Processed by Size 100% 15.1% 15.6% 90% 18.3% 19.7% 21.4% 20.9% 21.2% 21.7% 80% 19.1% 19.3% 70% 19.4% 19.3% 20.9% 22.5% 23.6% 23.5% 60% 50% 42.9% 40.7% 35.5% 35.0% 32.2% 40% 31.2% 30.4% 31.5% 30% 20% 26.9% 26.1% 2
Slide 9: Cold Storage Inventories Increase Primarily Driven by Other Category
Cold Storage Inventories Increase Primarily Driven by “Other” Category Total Chicken Inventories 950,000,000 900,000,000 850,000,000 800,000,000 750,000,000 700,000,000 650,000,000 600,000,000 550,000,000 500,000,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2016 2017 2018 5 Year Average “Ot
Slide 10: 2018 Pricing Rebounding Towards Year Range Following Counter Seasonal Q2
2018 Pricing Rebounding Towards 5 Year Range Following Counter Seasonal Q2 Cutout Value 100.00 95.00 90.00 85.00 80.00 75.00 Cents/Lb 70.00 68.59 65.00 60.00 55.00 50.00 1/6 2/3 3/3 6/9 7/7 8/4 9/1 1/5 1/20 2/17 3/17 3/31 4/14 4/28 5/12 5/26 6/23 7/21 8/18 9/15 9/29 12/8 10/13 10/27 11/10 11/24 12/2
Slide 11: Q2 Boneless Breast Meat Counter Seasonal but Improving
Q2 Boneless Breast Meat Counter Seasonal but Improving; LQ and Wings Tracking to 2016 Levels USDAUSDA Boneless/Skinless Boneless/Skinless Breast Breast NE NE USDAUSDA Tenders Tenders NE NE 215.00 255.00 195.00 235.00 215.00 175.00 195.00 186.12 155.00 175.00 Cents/Lb 155.00 135.00 130.66 Cents/Lb 13
Slide 12: Tight Small Bird Supply Has Helped Maintain Strong Pricing
Tight Small Bird Supply Has Helped Maintain Strong Pricing Relative to Historical Average EMI WOG 2.5-4.0 LBS 120.00 110.00 103.93 100.00 90.00 Cents/Lb. 80.00 70.00 60.00 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
Slide 13: Corn Stocks to Decrease from Record Levels
Corn Stocks to Decrease from Record Levels Global Corn Stocks Global Corn Stocks/Use Excluding China Excluding China 16.0% (Million Metric Tons) 15.3% 14.9% 15.0% 140 14.4% 127.0 14.1% 14.0% 130 13.7% 14.0% 13.5% 120 112.2 109.4 110 103.2 13.0% 12.6% 100 94.1 92.8 93.7 93.5 89.9 12.0% 11.7% 90 78.5
Slide 14: Global Soybean Inventories Projected to Grow
Global Soybean Inventories Projected to Grow Global Soybean Stocks Global Soybean Stocks/Use (Million Metric Tons) 120 35.0% 98.3 33.0% 100 96.7 96.0 31.0% 29.4% 28.3% 77.5 78.5 29.0% 27.6% 27.7% 80 69.9 27.0% 25.7% 25.0% 25.0% 62.7 61.8 59.5 57.4 25.0% 60 52.9 53.4 23.0% 22.4% 44.0 23.0% 22.0% 20.8
Slide 15: Second Quarter 2018 Financial Review
Second Quarter 2018 Financial Review US commodity weak but non- Main Indicators ($M)** Q2-18 Q2-17 commodity solid, strong results in MX on good operating performance and Net Revenue 2,836.7 2,752.3 success of new product portfolio, Gross Profit 274.2 474.8 UK/Europe continuing to improve. SG&A 89
Slide 16: Second Quarter 2018 Capital Spending
Second Quarter 2018 Capital Spending CapexCapex (US$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 expo
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 171717
Slide 18: APPENDIX
APPENDIX Pan All about great taste.
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: 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 Twenty-Six Weeks Ended Thir
Slide 21: Appendix: Reconciliation of Adjusted Operating Income
Appendix: Reconciliation of Adjusted Operating Income A reconciliation of GAAP Operating Income to Adjusted Operating Income is as follows: PILGRIM'S PRIDE CORPORATION Reconciliation of Adjusted Operating Income (Unaudited) Thirteen Weeks Ended Twenty-Six Weeks Ended July 1, 2018 June 25, 2017 July
Slide 22: Appendix: Reconciliation of Adjusted Earnings
Appendix: Reconciliation of Adjusted Earnings 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 Recon
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 Twenty-Six Weeks Ended July 1, 2018 June 25, 2017 July 1, 2018 J
Slide 24: Appendix: Segment and Geographic Data
Appendix: Segment and Geographic Data PILGRIM'S PRIDE CORPORATION Supplementary Selected Segment and Geographic Data Thirteen Weeks Ended Twenty-Six Weeks Ended July 1, 2018 June 25, 2017 July 1, 2018 June 25, 2017 (Unaudited) (In thousands) Sources of net sales by country of origin: US: $ 1,899,435