Goldman Sachs Agricultural Biotech Forum New York, NY. March 7, 2012

Transcription

1 1 Goldman Sachs Agricultural Biotech Forum New York, NY March 7, 2012

2 2 Forward Looking Statement Warning This presentation contains forward-looking statements about the business, financial condition and prospects of the Company. The actual performance of the Company could differ materially from that indicated by the forward-looking statements because of various risks and uncertainties. These risks and uncertainties are described in our most recent Annual Report on Form 10-K.

3 The Company 3

4 4 We Are a Leading Chicken Producer Organized in 1947 Incorporated in 1955 Who We Are Vertically integrated in 1961 Initial public offering in th largest poultry processor in the U.S. Current processing capacity of 9.375MM head/week

5 Balanced Asset Base Poultry Plants Big Bird Deboning Full Capacity/ Per Week (1) Hazlehurst, MS ,000 NC II Kinston, NC Laurel, MS ,000 Hammond, LA ,000 Collins, MS ,250,000 Waco, TX ,250,000 Waco, TX McComb, MS Jackson, MS Hazlehurst, MS NC II (2) 1,250,000 Total 5,625,000 Retail McComb, MS ,250,000 Moultrie, GA Bryan, TX ,250,000 Note: Moultrie, GA ,250,000 Kinston, NC ,250,000 Total 5,000,000 Expected Capacity 10,625,000 Prepared Chicken Plant Jackson, MS 1986 (1) Capacity measured in head/week. (2) Announced; No construction date set. Collins, MS Laurel, MS Hammond, LA Bryan, TX Big Bird Deboning Plants Retail Tray Pack Plants Prepared Chicken Plant 5

6 6 Strong Track Record of Organic Growth Pounds Processed (Millions) 3,500 Pounds Processed 3,000 2,500 2,441 2,426 2,567 2,805 2,849 2% 3,001 5% 3,001 0% 2,000 1,500 1, % % 1,077 9% 1,167 1,308 8% 12% 1,437 1,530 10% 6% 1,580 3% 1,802 2,025 14% 12% 21% (1%) 6% 9% E 2013E 2014E Current Capacity Proposed Incremental Capacity

7 7 Key Strengths Low Cost Producer As one of the industry s most efficient producers, well positioned to capture share Favorable Product Mix New plant focused on higher margin tray pack / retail markets Attractive Growth Profile Track record of generating strong internal growth History of delivering above industry average returns Strong Balance Sheet Managed and maintained appropriate capital structure Strong balance sheet enables growth even during industry downturns

8 8 Strong Portfolio of Customers Prepared Foods / Foodservice DELI DELI

9 9 Strong Portfolio of Customers Retail

10 10 Favorable Product Mix Operating Margin / Head (Cents) (1) Shift to Higher Margin Foodservice Market (10) (20) (30) Mix (%) Tray Pack / BBD /31 59/41 57/43 53/47 55/45 49/51 46/54 46/54 48/52 Source: Agri Stats, Company Filings Note: (1) Industry average. Small Bird Tray Pack Big Bird Deboning

11 11 Export Destinations (SAFM) 2011 Sales Pounds 573,993, Gross Sales Dollars $253,819, Other 19% Russia 18% Other 19% Russia 17% Mexico 21% Former Soviet Union 30% China/Hong Kong 12% Mexico 14% China/Hong Kong 21% Former Soviet Union 29%

12 Market Overview 12

13 13 Current Market Overview Broiler egg sets have been declining year over year since July; Pullet placements have been lower than prior year every month since July Cold storage inventories improving; January inventories down significantly Retail grocery demand remains steady Food service demand remains weak; Jobs and high priced gasoline are the key; unemployment remains a drag Corn and soybean meal prices remain significantly higher than historical averages Export market steady

14 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Oct-11 Nov-11 Dec-11 Jan Pullet Placements Potential Breeder Placements 120% 115% 110% 105% 100% 95% 90% 85% 80% Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan % 106% 104% 102% 100% 98% 96% 94% 92% Aug-08 Oct-08 Dec-08 Feb-09 Apr-09 Jun-09 Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Source: USDA % of Prior Year Broiler Eggs Set Source: USDA % of Prior Year Avg. Weekly Broiler Egg Sets 110% % 106% 104% 102% % % 96% % 92% % YTD Source: USDA Current Year Prior Year Source: USDA

15 15 Intended Placements: Broiler-Type Pullet Chicks for Hatchery Supply Flocks by Month and Total, Cumulative Potential Placements Month Pullet Chicks Hatched as % of as % of as % of Relative to Current Supply Flocks Months Earlier ,000 1,000 1,000 1,000 Percent Percent Percent 1,000 1,000 1,000 1,000 US Placements Jan 7,142 6,637 6,989 6, ,952 62,833 62,996 64,366 Feb 7,215 7,021 7, ,444 62,005 63,283 63,934 Mar 6,773 6,673 7, ,535 62,142 63,250 63,578 Apr 6,240 6,825 7, ,173 62,672 63,751 63,464 May 7,658 8,351 7, ,203 61,918 63,990 62,764 Jun 7,157 7,128 7, ,693 62,049 64,558 62,547 Jul 6,214 6,675 6, ,183 61,903 64,656 61,927 Aug 7,163 7,313 7, ,206 62,300 64,820 61,594 Sep 7,110 7,128 6, ,204 61,663 63,576 Oct 6,388 6,876 6, ,823 61,179 63,506 Nov 7,346 7,589 6, ,601 61,790 63,875 Dec 6,627 6,771 6, ,562 62,978 64,283 Annual Total 83,033 84,987 83,

16 16 USDA Broiler-Type Eggs Set (in thousands) Week Ending Week Ending Jan , , , , ,220 Jul , , , ,484 Jan , , , , ,079 Jul , , , ,969 Jan , , , , ,909 Jul , , , ,571 Jan , , , , ,924 Jul , , , ,922 Feb , , , , ,143 Aug , , , ,866 Feb , , , , ,093 Aug , , , ,913 Feb , , , , ,366 Aug , , , ,728 Feb , , , , ,225 Aug , , , ,461 Mar , , , ,530 Sep , , , ,765 Mar , , , ,787 Sep , , , ,742 Mar , , , ,563 Last 6 weeks Sep , , , ,043 Mar , , , , vs 2011 Sep , , , ,278 Mar , , , , % Sep , , , ,234 Apr , , , ,503 Oct , , , ,672 Apr , , , ,972 Oct , , , ,402 Apr , , , ,518 Oct , , , ,019 Apr , , , ,806 Oct , , , ,891 May , , , ,427 Nov , , , ,040 May , , , ,932 Nov , , , ,710 May , , , ,102 Nov , , , ,705 May , , , ,506 Nov , , , ,228 Jun , , , ,765 Dec , , , ,665 Jun , , , ,208 Dec , , , ,373 Jun , , , ,369 Dec , , , ,088 Jun , , , ,072 Dec , , , ,867 Jun , , , ,842 Dec , , , ,364 Average 208, , , , ,995

17 17 USDA Young Chickens Slaughtered by Month and Total, Month Head as % of as % of Live Pounds as % of as % of ,000 1,000 1,000 % % 1,000 Avg Wt 1,000 Avg Wt 1,000 Avg Wt % % Jan 672, , , ,792, ,176, ,122, Feb 651, , ,665, ,801, Mar 748, , ,221, ,396, Apr 714, , ,059, ,953, May 705, , ,032, ,321, Jun 744, , ,188, ,367, Jul 730, , ,082, ,009, Aug 768, , ,280, ,442, Sep 754, , ,330, ,238, Oct 723, , ,250, ,124, Nov 709, , ,171, ,879, Dec 724, , ,238, ,809, Annual 8,649,536 8,532, , ,315, ,520, ,122, Source: NASS, USDA - Poultry Slaughter Report

18 18

19 19 160,000 Breasts & Breast Meat Total Frozen Chicken United States Cold Storage Stocks, ,000 Wings 150,000 80, , , , , ,000 70,000 60,000 50,000 40,000 30,000 20,000 90,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 10,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec ,000 Leg Quarters 27,000 Whole Chickens 130, ,000 25, ,000 23, ,000 21,000 90,000 80,000 19,000 70,000 17,000 60,000 50,000 15,000 40,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 13,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

20 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan Georgia Dock Year Average Source: Comtell.com

21 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 Jan-08 Jan-08 Mar-08 Mar-08 May-08 May-08 Jul-08 Jul-08 Sep-08 Sep-08 Nov-08 Nov-08 Jan-09 Jan-09 Mar-09 Mar-09 May-09 May-09 Jul-09 Jul-09 Sep-09 Sep-09 Nov-09 Nov-09 Jan-10 Jan-10 Mar-10 Mar-10 May-10 May-10 Jul-10 Jul-10 Sep-10 Sep-10 Nov-10 Nov-10 Jan-11 Jan-11 Mar-11 Mar-11 May-11 May-11 Jul-11 Jul-11 Sep-11 Sep-11 Nov-11 Nov-11 Jan-12 Jan-12 Mar-12 Mar UB Boneless Skinless Breast UB Breast Tenders Year Average Year Average Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar UB Jumbo Wings UB Leg Quarters Year Average Year Average Source: Urner Barry

22 CBOT - CORN 22

23 CBOT SOYBEAN MEAL 23

24 Financial Summary 24

25 Strong Track Record of Financial Performance Pounds Sold Operating and Net Margin (MM) 3,000 2,500 2,000 1,500 1, ,800 2,399 2,463 2,581 2,049 1,449 1,095 1,809 1, EPS 25% 20% 15% 10% 5% 0% -5% -10% -15% Gross Profit Operating Income Net Income ($/Share) (2.00) (4.00) (6.00) (8.00) (0.57) (2.13) (5.74)

26 26 Capital Expenditures $160 $140 $120 $100 $80 $60 $40 $20 $ Maintenance Waco Complex General Office Foods Collins Expansion Georgia Complex Kinston Complex

27 27