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Matt Galvanoni | Chief Financial Officer |
Fabio Sandri | President and Global Chief Executive Officer |
Good morning and welcome to the Fourth Quarter and Fiscal Year 2021 Pilgrim's Pride Earnings Conference Call and Webcast. All participants will be in listen-only mode. [Operator Instructions] Please note that the slides referenced during today's call are available for download from the company's investor website at ir.pilgrams.com in the Events and Presentations section.
As a reminder, today's conference is being recorded. I would now like to turn the conference over to Pilgrim's Pride Chief Financial Officer, Matt Galvanoni. sir. ahead, go Please
afternoon, reference. thank the operating joining available the These and year any may at our XXXX. and and providing press we overview A non-GAAP and including an also are with copy on is our fourth call. I today a and discuss. release review fiscal along of and website Executive Yesterday XX, present we December Chief filed measures our financial slides sec.gov. been performance ended on issued you the for items have morning X-Ks a President us with release today's ir.pilgrims.com, for for financial at as quarter we of Officer, will quarter, Good Fabio results Form of for Sandri, online available reconciliation
in actual press XX-K to regular cause turn the with those Fabio. Further provided to information our I we as management materially release. contain call like projected release, factors by would may to prepared remind concerning forward-looking Today's the results not those Other from I and been outlook certain has current in forward-looking will now these Form our factors statements our in Before of differ disclaimer. of may our anticipated this safe SEC. the represent date and begin harbor remarks, statements. additional our everyone of filings that today's call expectations over
today. you, Thank everyone morning thank joining Matt. Good for and you us
being growth X.X% XX% from of had compared over up of of XXXX. Masters. billion, quarter Pilgrim's For adjusted contribution a last and XXXX, revenues organic the million, XX% of XX% increase and year, same last Food year the up the versus QX $X sales $XXX to acquisition We we QX net reported EBITDA of quarter fourth XX.X%
of XXXX to in Our EPS and Adjusted and quarter year XXXX. QX versus the was in $X.XX $X.XX adjusted in X.X% margin ago a was QX fourth EBITDA X.X% compared X.X% XXXX. $X.XX
year For EBITDA for margin billion, revenues $X.X X.X% to in was year, last $X.XX billion year. was were We're in adjusted the overall the XXXX and performance and EBITDA the over year. $X.XX XXXX. compared compared in increase pleased and X.X% was EPS fiscal Adjusted of $XX.X Adjusted previous fourth $X.XX XX% XXXX net the quarter to a XXXX XX% with XXXX XXXX. and in our X.X% in of up
year Our market U.S. Mexico with shown growth and strength the demand business pricing. have driving throughout robust
shortages. battling profitability Food late have severely family, are in Pilgrim's second and headwinds was labor welcome in and portfolio business the fourth inflationary year, the generating European strong challenged We Masters the Pilgrim's of as part while quarter. excited Our of our in them to half the improving and September
presence and addition Europe and for portfolios U.S. and the we our the branded base in further in have foods the with Mexico, in of prepared the an synergies scale future. growth excellent With the differentiated with
and opportunities at serving strategy health more significant across We of have customers forefront. diverse results. of to execution are provide execution products while the focused and our a the safety and of members portfolio remained key on financial still we We our to multiple key keeping on consistent proud have our successful geographies have
weights. the industry year. first the flock note, general USDA longer. an increase of the X.X% the to growth important in is hatchability headcount increased an hatchability the is demand due fourth Foodservice production the X.X% the effort U.S. age improvements of to overall in holding commercial XXXX increase expected XXXX for in was poor year-over-year ongoing to its heavier very rates. by grew XXXX on Turning while the the demand chicken. sales in is market, year-over-year segments, XXXX restaurant perform It for X% year. industry produce and their more half expected due recovery for but stronger with indicates The hen. remain sustained and saw annual commercial annual supply market eggs, the strong the selling longer, operators U.S. to up noncommercial and Production higher over XXXX the In In both hands outlook conditions volume, live QX chicken as XXXX than above eggs, foodservice quarter, to was more despite was purchases. industry pre-pandemic domestic levels. average also declines holding
while the when demand during levels stocks, Although which remain channel noncommercial significant prior lodging the year, recreation XX% fresh versus however, declined cold positive while still chicken for year-over-year the growth. experienced to Combined, increase to versus pressured continue the education, in retail X% less The XXXX, up daily in the December net storage in segment XXXX improvement. levels. was posted recover volume demand also XXXX. XXXX levels, year-over-year to and volume compared growth support posted below sub-segments loading exceed demanding XXXX retail as significantly pantry XXXX, Demand below
during As we meat with at down a the and result estimated cutout, prices, be coupled sustained prices commodity which chicken the of above XX% anticipated meat should production be option XXXX. proteins five-year in mild aggregate available the growth, other above chicken baselines year-over-year as strong pre-COVID as of is fourth all to to see which Even affordable to be with for most increase the remain the by demonstrated in we priced sustained average supply jumbo quarter. demand, only protein most the
input market increased the In experience. high our supported with costs U.S. pass we to our very to costs as at demand chicken levels Turning strong consumer segments. continue labor along with business and to work pricing inflationary customers
that The to a hand shortage impacted shortages. to and command portion trim mix margin. labor be to affects the continues products labor our continued higher due ability Our
is across signs of As we still a to time labor improvement, industries resolve. take been have seeing, while and showing it numerous problem will national-wide
QX U.S. In our automation tasks. We will members in repetitive safety to sales increase our the continue market, in team to invest and the year-over-year. flat reduce and retail redundant of were
Mainly saw X% potential year-over-year overall versus Contributing down comparison strips XXXX. see core sales foodservice was baseline, to of the items quarter strength during retail such daily the continue has penetration in suggest the continued XXXX. most that foodservice frequency growth year-over-year remains in with for increase chicken. nuggets, customer. the upside growth. and due increased to We improvements commercial in which versus increased year-over-year However, improvement of restaurant the above by third data U.S. certain rates topping standards, and as with operators this with of protein difficult versatility eating a the posted prevalence QX a in continued with pantry believe the orders the quarter to due consecutive experienced recreation and year-over-year and XX% improved channel beat The is education, category as we foodservice restaurant to affordable noncommercial meat in We unit in with sales consecutive chicken's the foodservice off-premise XXXX With trip loading. and growth, improving from recovery XXXX a lodging performance convenience. market, and year-over-year Commercial segments. QX chicken third double-digit demand again
between channel the changing adjusted patterns. lack demand has However, to mix to continues consumer XXXX channels Pilgrim's volumes to adapt levels. and
year year-over-year. large fourth volume, The support also were to bird profit mix, bird and sizes We adjust all the generated and the well given revenue the demand Commodities growth from large again and momentum across presence strong throughout positioned overall small. to driven pricing. deboning from foodservice channel in profit our continued improvement by market quarter its and production are largest
but business costs. labor case-ready growth Our the the year, quarter revenue the versus delivered in by in increase prior pressured is grain and
service experiencing, revenue we to prices in for for Strong the order have with improvements are small retail our and levels growth partner to them. continue costs year. year-over-year delivering both improved recover in the profitability We superior and but quarter full QSR customers, bird increased drove and and both business and generating demand the importantly we negotiated most daily value key
key our QSR costs QX this Foods we volume business on U.S. XX% In was input our Margins grew continue higher X%. customers. more Prepared with improved sales focus We product segments. business despite unit and as our lines strengthening year-over-year with profitable over up partnership
significantly top-line improved full our XX%, operations. year, For our we the grew has by
products XX%. our grew year-over-year, XXXX, and quarter, QX fourth Pilgrim's, BARE the sales repair Just XXX% During versus while branded up was were up XX% sales fresh
leading reached of is category XX% sales. driving New and innovation our innovation product growth as sales
last which feed as gain the the reported represent demand prepared to a X.X inputs. exports. domestic up a e-commerce the strong varied crop X.X for year, channel brand Just channels. XX% to of year. inflation These billion with case-ready carry estimates, USDA this outside sales fourth of than XX billion BARE to and to and particularly continue XX% in channels commodity through has is grains. Just the and bushels brand last versus remain support provided Corn We the year We BARE from significant our QX distribution sales build billion expected and experienced e-commerce even QX in quarter markets with more macro corn increase large out bushels prices from branded
have the We in on inflation stay feel prices markets. increase an in the both year in the export even ethanol a stocks and elevated seen corn confident corn market concerns if energy slowdown recently China. in We market on and this strength
from in projecting last the carryout bushels, recent in XXX drought Southern from million million production potential, a concerns exporters. production and soybean XXX Argentina, to has due reduced have U.S. soybean prices USDA weeks South meal increased Brazil American Soybean rapidly year. notably of Persistent up
global the larger growth both seeds oil and Geopolitical exporters. term. highs monitored, will QX, the in off bottomed We the as feed wheat in prices exporters feed ease to Black production oil stocks in to expansion in realized year supporting during we in continue southern next the of have We believe cost peaked expect hemisphere set have and over believe be demand and Sea and medium wheat the wheat vegetable world suppliers near markets from increase South America in continue the recently term. the come European were tensions year. losses help wheat their crops but to are but out major this
QX driven due from our position X% always, chicken strong meat current demand. XXXX. view despite export export marginal November from the grain USDA As decreased reflects We Total was decrease the by were with sales related the to demand by and lockdowns of intermittent in sales dark down to compared disruptions. flat environment for Combined, in affected the expected previous that in China’s market with only unique trade a year. and and China through production XXXX. increase inventory X% offset anticipation to consumer Exports container in declines to XXXX demand supply XX% have paw, grain that continue broiler supplies. USDA were more ports supply September to issues are however, down expected chain to September remain market on Mexico shipments of supply X% inventories growth and levels lead and and of increase Cuba. given in historically of resilient year-over-year. chain through balanced was risk a are export are we margin pricing a high in Vietnam executive COVID growth that and inventories believe The this increases
enter QX, markets As in along markets in we COVID seeing in increased from by other most affected ongoing growth we carrying XXXX, over are with demand XXXX.
we chicken to chain foreign begins expand new U.S. for AI and improved COVID swine and expect effects export Any currencies exports As recover, exports volumes recovery have impacted country and U.S. this drivers growth countries. industry, and and outpace we the markets of higher AI overseas ability achieve environment the to fever XXXX oil the outpace additional and XXXX bolster the to to in volumes. to prices. as certain those supply export chain our their will record influenza be continue their year will negative supply The this continue and countries export will U.S. to spread on client we impacted base. expected as of
are the specific And Florida. in there path but Virginia, Related wild a Carolinas, monitoring ability positions know, cases taking birds been in high to to in significant throughout we to as in prioritizing impact our are I not are and other the the been likely as flu mentioned we reported AI execute closely of chain, to We Indiana the confident and has you AI countries. U.K., for U.K. U.S. and there where supply us. Moy profitable in situation, Park. business has relates appropriate it
biosecurity protocol have we has regions implemented measures those where AI have a found. strong been in extended We and
our to year. Mexico international business, another strong has Turning
X.X%. of increased at During increased weaker impacted net QX, of were the volume Mexico's X.X%, by beginning revenues quotas. while QX, additional with import combined EBITDA the margins chicken demand arrival
the of the up However, and demand picked November in end again year. lasted early through
than demand is seeing As we for we much typical begin this the are of XXXX, year. stronger time
in our the we but are with on continue can quite annualized In As is quarter-to-quarter, brands. case volatile to stable often invest our results basis. Mexico, Mexico, be our
foods Fresh double and channels. [indiscernible] double brand prepared Dia modern higher-value also XXXX. segments, with sales business in Del business, increase the seek into grew in Pilgrim's Our digits including of and we grew brand brands, our with Pilgrim's Alamesa awareness our again we digits to still as In the our successful launch evolving
We continue Mexico. to be excited in about opportunities
investing current investing operations line in Veracruz business. the both and fresh in expansions in continue to growth We in in order and in expansions support our branded
our Moving well increases continued the as initiatives Park Moy to to as face labor QX, the steep as cost and a U.K. Europe, business In challenges. and poultry whole
causing some rules have it to more COVID-related EU to difficult return U.K., enter simply workers for made addition home. the workers In post-Brexit to absences,
volume increases, and EBITDA utilities freight. nutrients, grew year-over-year, grains, and revenue QX by Park’s Moy including impacted X% cost was While
year, During inputs. keep not of with pace did the second the pricing half
to recover we models inflationary business. facing mitigate customers are the continue key pricing and the impact However, with new negotiate establishing and to
always, efficiencies, to performance tight better excellence SG&A As agricultural addition operational we labor for improving in will control. through yields to and programs continue designed deliver
first expect challenging coming the negotiation to the the customers is environment expected in half half. wrap up we back continue As improvements quarter, first with to the in of our XXXX, with in
order and foodservice Additionally, we deployment, pricing CapEx bookings, improved recovery.
to confident are to enable its fee key market. are that continue Park to profitable products our environment, proud increase the very trajectory. and that growth Despite customers will challenging and return the share high-quality We to of us of rates we our Moy grow our
less surplus will Sales we As market prices and a a have labor Germany, remain each. offerings, EU increase prices value utility export efficiencies in due meat for both volume to and that bans result negatively peak from the resulting impacted export our swine X% prices. of by on at deliver Feed our significant long-term one of very In of able prices African lower achieve customers key with of and a are superior to the were lower pressure sales challenging U.K. inflated. grew a The fever. parties. business, with rate remains while continued downward in Pilgrim's with costs volumes rise, than U.K. associated pigs
unsustainable As a being loss an the production. having market, to live compared market pricing despite at advantage due cost the to below when result, are of operations an
incurring, downsize has in are EU production, producers to months. pig currently that herd and approximately been With the conservative prices are are the fouls herd and X.X% lots have estimates Despite from of unsustainable the U.K. six of breeding levels. started across China removed production significant at the past
facilities is audited Looking access. ahead, regain approval China could export not that been and to to awaiting our have
pig. other is market China market pricing current parts the the Although low, it to some for of is best parts of prime
of We quarter expect that no market the labor first to to supply pigs, continue chain due conditions and challenging backlog in will be profitability headwinds on the XXXX inflation. of
key turn our the QX factors, expect the inflationary in to market to and herd we to contracts will negotiating address our reduction. are the with begin we customers of due However, recovering
the significant time to headwinds, value to support and consumers. in and through to customers this add committed our deliver Given products are high-quality key difficult to we
for the part rewarded being Sustainability As the current team conditions largest proud company, our our are I'm leading is To numerous Pilgrim's initiatives. driving U.K., we to the efforts we pig our conclude high pleased producer U.K., are am portfolio for excellence welfare forward say of culture of operational their of throughout and that program. on to recognized. with I adapting sustainability market and
Richmond with ahead and Food business in meat the meat last to of with U.K. the XX%, market bacon. the in ready expectations. Meatfree, launch XX in our traction growth last Denis's of share Richmond with With and the Meats Solutions growth Food September. meals driven Within in our quarter each secured challenging brand Masters, months. refrigerated wins contributions in which a Pilgrim’s of gain double-digit strong grew business revenue against the market. that a our Masters posted from are line brands. profitability market listings new chilled activation, and market outperformed the snacks from by Turning We solid well environment, the new Meal acquired and were our share Irish of branded portfolio, brand to meats increasing Sausages, meals continued with pillar business, retail Meatfree over Richmond
Our food in recorded strong to evening of go business over at the category. well growth restriction the benefit UK COVID
labor and [indiscernible] progress continues rising a driven good cost response, margins. increases, to During disruptions to QX, In environment. by and dynamic in recover costs impacted and we key what made other material with raw chain work in our inflationary availability be customers supply
a several for Food Masters, important commercially it strategic in period While forward busy we was moved initiatives.
the $X improving progress underway plan technology investing to and of to and in well, are snacking working building growth. progressing of and CapEx Our approximately expansion ways are our investments Integration to activities capacity in million. future construction enable efficiencies drive with of we significantly
UK see enter volatility XXXX, and markets. Irish we we expect to in As further
is positioned our brands However, U.S., Masters believe current diversify our in our Mexico our we successful and leading label solutions. ability acquisitions to manner. to our global strong we our with We well private grow leverage future deliver growth customers scale grow industry, a demonstrated With our our again Food products. look and business history have from base portfolio business and to disciplined forward in portfolio to high-quality UK, and and and of provide
our agenda. important our priority sustainability global very is for business progressing Another
billion greenhouse bond XXXX. emissions We ESG-related In on this company greenhouse require XXXX. reduce a we of are in XX% by which zero $X of by sustainable support being on intensity linked, advancing of our us the through emissions global initiative net by to We focusing a committed issued number initiatives. April,
as are XXXX. close our target we that of reductions report to happy ahead we are We
our very year, scorecard, Also, we about we and safety team has the progress think that our follow we members to been strong to we our we for have hometown contributions the in through industry. through superior is where inserted. a outstanding. our again condition Safety a we developed future achieved to during is support are that better a social communities create far appearance, As commitment proud area record are the this our projects
results. to our overall I to to compliance like Finally, to CFO, we With programs would that, strengthen Galvanoni, financial continue first-class ask our our Matt standards. discuss
you, Thank Fabio.
revenues an of income QX XXXX, XXXX. most For the a X.X% income net in million in The margin, EBITDA million an ago, quarter accrual million additional to $XXX GAAP in legal achieved a reported compared We significant adjusted net we and of being of with to $XXX.X margin and to $XX.X current $X.X versus fourth X.X% year million flat of billion versus $X.X the were $XXX was year. $XX.X quarter adjusted net million adjustment essentially billion QX In XXXX. related compared last settlements. related million quarter, in to the $XXX.X
$XX.X year, $XX.X fiscal million margin last year. revenues were $XXX.X this and and in adjusted year. $XXX billion the EBITDA X.X% fiscal an X.X% For adjusted $X.X X% net a million of of income compared to XXXX margin billion with – billion versus net We achieved
in in we for income reported the in X.X% $XX EBITDA margin Europe. year, and net Mexico XX% of $XX.X million versus the GAAP of XXXX. For million income were in X% quarter the U.S., GAAP Adjusted net
ago compared was were $XXX million to Adjusted million million and due Europe. pricing in U.S. relatively million In sales were to up in in a were $XX.X in Net year, year $XX in adjusted a X.X% and margins profit Gross year-over-year XXXX. in compared in XXXX. to Mexico XXXX demand. QX higher to were and increased both higher $XX.X at the consumer Sales XX.X% strong U.S., X.X% adjusted in EBITDA EBITDA margins $X.X due and pricing. volumes EBITDA flat For versus supported million ago up million year the Mexico, was fiscal XXXX. $XXX.X QX the by
adjusted negatively $XX.X versus $XX.X were in margins to million Europe, input primarily grain. costs, EBITDA QX elevated XXXX. due was million impacted However, in In
its to profitability costs, the experienced business' annualized significantly packaging, higher As in to of customers continues our headwinds and the occurring included Also increases. million the unsustainable. team path costs, contracting labor in current approximately UK's UK are of as Moy Park, down cost significantly to being is $XXX Moy market Grain, recover our transport all finalize utility, due million UK with to was the an these to The Fabio by to these are mitigate quarter. so price customers value to inventory Pilgrim's depressed. previously cost team Park the quarter costs pricing working over results been in Pilgrim's has nutrients, fourth it impacted as levels stated, with Relative the structures increases year-over-year. charge is increase pigs last Similar input reduce inflationary $X quarter. diligently
As from with Masters. UK EBITDA is Fabio and quarter X%. Food of pleased not business margins the is inflationary of mentioned, to This XXXX. quarter fourth we anticipated some impact the Its the headwinds first results first are adjusted immune very in feel this were our quarterly in to
and are this However, Company-wide, year. are to fourth increased recovering the acquired to costs for approximately prior $X pricing incurred we the business. in costs of the the growth about prospects in million compared $XX COVID-related impacts excited quarter in newly million very of these we confident
automation million due and net SG&A of than zero this the in for anticipate and in prioritize of to in further addition customers. to million We address reiterate and costs XXXX. the plans gas in on approximately defense Food prior key finished and invest of automation by for compared the fourth we the to to journey our to year increased For with We Masters, efficiencies million spending our needs emissions our incurred $XXX capital primarily our key COVID-related in greenhouse projects capital million in of with ROCE mix $XXX optimize spending Food year, spending year our projects our costs. to XXXX Masters tailor $XX will our to $XXX support We increases customer year, competitive to solidify Overall, our spending continue that to addition the to $XXX product legal partnerships We'll advantages was commitment XXXX. operations through strengthen higher CapEx. full operational strong million improve quarter Pilgrim's.
sheet. balance strong a have We
We will cash emphasize from disciplined and projects. capital investment to operating continue management high-return of in activities, flows working
had available At credit. of fiscal year, Our liquidity strong. end total approximately the billion position $X.X the very in and remains cash we
Xx. short-term Xx our million. immediate to million. of target expense end debt with of bonds effective range At Also, our requirements We the lower billion the be in XXXX. between cash million million second of XXXX was we and and with in was $XXX XXXX a recorded $XX.X we the XXXX. adjusted have in extinguishment $XXX maturing XXXX, net at end is interest loan less to our quarter. anticipate in XX% the Net We for cost net than EBITDA, $XXX expense our our year of XX% the interest XX ratio XXXX no leverage between of months fiscal to rate leverage anticipate the term our approximately of and and be Exclusive debt $X.X maturing year, ratio X.Xx the last tax which
and As capital shareholder to optimizing always, are the company. our create focused we structure value on grow
Our remarks. to creation value call standards. be capital will strategy evaluated to our the allocation remain opportunity for each now will with against back closing and our growth Fabio I turn over strategies aligned
Matt. Thank you,
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the And attending not taking concluded. in you. today’s be thank company for as now Thank presentation. is you conference the questions will today, We
may You now your disconnect lines.
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