Goldman Sachs Eighteenth Annual Agribusiness Conference New York, New York. March 12, 2014

Transcription

1 0 Goldman Sachs Eighteenth Annual Agribusiness Conference New York, New York March 12, 2014

2 1 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 2

4 3 We Are a Leading Chicken Producer Organized in 1947 Incorporated in 1955 Who We Are Vertically integrated in 1961 Initial public offering in rd largest poultry processor in the U.S. Current processing capacity of 9.375MM head/week

5 4 Top 10 Poultry Companies for 2012 All Other 39.3% Tyson 21.4% Source: WATT PoultryUSA Survey, March 2013 Pilgrim's 19.0% Koch 6.1% Perdue 7.0% Sanderson 7.3% Processing Further Processing Million Million Lbs Average Million Lbs % R-T-C Company Plants Operations Head Live Weight Live Weight R-T-C Market Share Tyson Foods, Inc. 33 9/ % Pilgrim's Corporation 26 0/ % Sanderson Farms, Inc. 9 0/ % Perdue Farms Incorporated 12 3/ % Koch Foods, Inc. 8 4/ % Mountaire Farms, Inc % Wayne Farms, LLC 8 0/ % Peco Foods, Inc. 5 1/ % House of Raeford Farms, Inc. 5 2/ % Foster Farms 5 5/ % Total Top / % All Others 40 23/ % Total / %

6 5 Balanced Asset Base Poultry Plants Big Bird Deboning Full Capacity Live Pounds Processed Pounds Per Week (1) Per Week (2) Per Week (3) Hazlehurst, MS ,000 5,468,750 4,922,000 Kinston, NC Laurel, MS ,000 5,468,750 4,922,000 Hammond, LA ,000 5,468,750 4,922,000 Collins, MS ,250,000 10,937,500 9,843,750 Waco, TX ,250,000 10,937,500 9,843,750 Waco, TX McComb, MS Jackson, MS Hazlehurst, MS Palestine, TX 2015(4) 1,250,000 10,937,500 9,843,750 Retail Total 5,625,000 49,218,750 44,297,250 McComb, MS ,250,000 8,437,500 7,256,250 Bryan, TX ,250,000 8,437,500 7,256,250 Moultrie, GA ,250,000 8,437,500 7,256,250 Kinston, NC ,250,000 8,437,500 7,256,250 Total 5,000,000 33,750,000 29,025,000 Expected Capacity 10,625,000 82,968,750 73,322,250 Prepared Chicken Plant Jackson, MS 1986 Note: (1) Capacity measured in head/w eek. (2) Based on target live w eights. (3) Based on historical yields. (4) Under construction. Moultrie, GA Collins, MS Laurel, MS Hammond, LA Bryan, TX Palestine, TX (4) Big Bird Deboning Plants Retail Tray Pack Plants Prepared Chicken Plant

7 6 4,000 3,500 3,000 2,500 2,000 1,500 1, Strong Track Record of Organic Growth % 986 1,077 1,167 1,308 24% 9% 8% 12% Pounds Processed (millions) 2,441 2,426 21% -1% 2,025 1,802 12% 1,530 1,580 14% 1,437 10% 6% 3% 3,670 3,694 3,356 9% 1% 3,166 6% 2,959 3,041 4% 2,805 5% 3% 2,567 9% 6% * 2015* 2016* 2017* * Estimated. 6% production cut was restored during 3 rd Quarter of Assumes Palestine, TX opens January 2015, and reaches full production in March 2016.

8 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 under construction focused on higher margin big bird deboning market 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

9 8 Strong Portfolio of Customers Prepared Foods DELI

10 9 Strong Portfolio of Customers Big Bird Deboning / Foodservice

11 10 Tray Pack / Retail Strong Portfolio of Customers

12 11 Favorable Product Mix Operating Margin / Head (Cents) (1) Shift to Higher Margin Foodservice Market (10) (20) (30) Mix (%) Tray Pack / BBD (2) /43 53/47 55/45 49/51 46/54 46/54 49/51 53/47 53/47 53/47 Source: Agri Stats, Company Filings Small Bird Tray Pack Big Bird Deboning Note: (1) Industry average. Calendar year. (2) January 2014

13 12 Export Destinations (SAFM) Fiscal 2013 Sales Pounds (million) 19.0% of total Gross Sales Dollars $292.6 (million) 10.6% of total Other 18% China 14% Other 16% China 19% Russia 15% Central Asia 26% Russia 14% Central Asia 25% Mexico 27% Mexico 26%

14 US Export Volumes RTC million pounds, paws excluded Country Mexico ,006 1,237 1,404 Russia 1, Angola Canada Cuba China Iraq Taiwan Georgia Guatemala Other 2,287 3,302 3,648 3,365 3,116 Total 6,818 6,762 6,968 7,274 7,364 Source: ERS calculations using data from U.S. Department of Commerce, Bureau of the Census 13

15 Market Overview 14

16 15 Current Market Overview Broiler egg sets declined year over year during 2012; moved higher through the spring, summer and fall of 2013 and in to 2014; breeder flock remains constrained Cold storage inventories remain manageable Retail grocery demand remains steady Casual dining traffic remains weak; jobs, consumer confidence and macro economic conditions are the key; unemployment remains a drag; wing concepts remain strong; new chicken items on QSR and casual dining menus helped demand last summer High cost of competing protein could help chicken demand Corn and soybean meal prices have moved lower compared to fiscal 2013, but have moved higher since February Export market steady; one eye on Russia

17 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb Pullet Placements Potential Breeder Placements 120% 115% 110% 105% 100% 95% 90% 85% 80% 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 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 % of Prior Year Broiler Eggs Set 108% 106% 104% 102% 100% 98% 96% 94% 92% Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 % of Prior Year Avg. Weekly Broiler Egg Sets 110% % 106% 104% % 100% 98% % % YTD Source: USDA Current Year Prior Year

18 17 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 6,557 6,673 6,303 6, ,996 64,111 60,864 60,546 Feb 7,284 7,025 7, ,283 63,679 60,646 60,850 Mar 7,058 6,753 6, ,250 63,323 61,094 61,214 Apr 7,044 6,524 6, ,751 63,209 61,342 61,457 May 7,721 7,472 7, ,990 62,941 60,934 61,385 Jun 7,211 6,800 7, ,558 62,547 60,676 61,444 Jul 6,444 6,071 6, ,656 61,927 60,591 61,524 Aug 7,233 7,338 7, ,388 61,556 60,370 61,772 Sep 6,657 6,686 6, ,321 60,860 60,054 Oct 6,289 6,265 6, ,251 60,402 59,843 Nov 6,890 6,767 7, ,620 60,482 59,994 Dec 6,438 6,668 6, ,028 60,721 60,221 Annual Total 82,826 81,042 81, Source: USDA

19 18 USDA Broiler-Type Eggs Set (in thousands) Week End Week Ending Jan , , , , ,379 Jul , , , ,502 Jan , , , , ,500 Jul , , , ,737 Jan , , , , ,325 Jul , , , ,313 Jan , , , , ,647 Jul , , , ,122 Feb , , , , ,439 Aug , , , ,085 Feb , , , , ,184 Aug , , , ,022 Feb , , , , ,715 Aug , , , ,520 Feb , , , , ,326 Aug , , , ,626 Mar , , , , ,772 Aug , , , ,308 Mar , , , ,188 Sep , , , ,444 Mar , , , ,737 Last 6 weeks Sep , , , ,058 Mar , , , , vs 2013 Sep , , , ,190 Mar , , , , % Sep , , , ,618 Apr , , , ,712 Oct , , , ,238 Apr , , , ,291 Oct , , , ,356 Apr , , , ,242 Oct , , , ,897 Apr , , , ,333 Oct , , , ,011 May , , , ,072 Nov , , , ,924 May , , , ,913 Nov , , , ,479 May , , , ,696 Nov , , , ,392 May , , , ,847 Nov , , , ,299 May , , , ,424 Nov , , , ,608 Jun , , , ,145 Dec , , , ,855 Jun , , , ,524 Dec , , , ,448 Jun , , , ,006 Dec , , , ,094 Jun , , , ,840 Dec , , , ,493 Average 200, , , , ,595 Source: USDA

20 19 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 707, , , ,131, ,350, ,225, Feb 674, , ,931, ,838, Mar 699, , ,060, ,992, Apr 683, , ,986, ,252, May 749, , ,370, ,366, Jun 706, , ,135, ,000, Jul 722, , ,166, ,370, Aug 760, , ,419, ,383, Sep 663, , ,899, ,127, Oct 745, , ,435, ,613, Nov 674, , ,011, ,939, Dec 642, , ,801, ,117, Annual 8,428,847 8,504, ,349, ,353, Source: NASS, USDA - Poultry Slaughter Report

21 20 Total Frozen Chicken United States Cold Storage Stocks, (1,000 pounds) 850,000 Total Chicken 800, , , , , ,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: USDA

22 21 160, , , , , , ,000 90,000 Total Frozen Chicken United States Cold Storage Stocks, (1,000 pounds) Breasts & Breast Meat 110, ,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 Wings 80,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 20,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec ,000 Leg Quarters 28,000 Whole Chickens 160,000 26, ,000 24, , , , ,000 22,000 20,000 18, ,000 16,000 90,000 14,000 80,000 12,000 70,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: USDA ,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

23 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 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb Georgia Dock 5 Year Average Source: comtell.com

24 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 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 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 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb UB Boneless Skinless Breast (Approx. 8.0 million pounds/week assuming 22.50% yield) UB Breast Tenders (Approx. 1.6 million pounds/week assuming 4.50% yield) Year Average Year Average 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 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb 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 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb UB Jumbo Wings (Approx. 2.7 million pounds/week assuming 7.65% yield) UB Leg Quarters (Approx million pounds/week assuming % yield) Year Average Year Average Source: comtell.com

25 24 CBOT - CORN Source: CMEgroup.com

26 25 CBOT SOYBEAN MEAL Source: CMEgroup.com

27 26 Corn/Soy Sensitivity Quantity Purchased Hypothetical Price Change Fiscal 2013 Impact on Cash Ultimate Impact on COGS Corn 87.4 Million Bushels $0.10 / bushel $8.74 million $ / lb processed Soybean M 801,000 Tons $10.00 / ton $8.01 million $ / lb processed Quantity Purchased Q1 Fiscal 2014 Hypothetical Price Change Impact on Cash Ultimate Impact on COGS Corn 21.0 Million Bushels $0.10 / bushel $2.10 million $ / lb processed Soybean M 201,000 Tons $10.00 / ton $2.01 million $ / lb processed

28 Financial Summary 27

29 28 (MM) 3,500 3,000 2,500 2,000 1,500 1, ($/Share) Pounds Sold Strong Track Record of Financial Performance 3,124 2,956 3,038 2,800 2,399 2,463 2,581 2,049 1,809 1,537 1, (1) Operating and Net Margin (2.00) (0.57) (4.00) (2.13) (6.00) (8.00) (5.74) (2) Note: (1) Estimated (2) Through first quarter EPS 25% 20% 15% 10% 5% 0% -5% -10% -15% (2) Gross Profit Operating Income Net Income

30 29 $180 Capital Expenditures $160 $140 $120 $100 $80 $60 $40 $20 $0 Note: * 2015* * Estimated Maintenance Waco Complex General Office Foods Collins Expansion Georgia Complex Kinston Complex Palestine Complex

31 30