Pilgrim Pride : Q2 2023 Pilgrim's Pride Earnings Presentation

Financial Results for Second Quarter Ended

June 25th, 2023

Pilgrim's Pride Corporation

(NASDAQ: PPC)

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 limiting the foregoing, words such as "anticipates," "believes," "estimates," "expects," "intends," "may," "plans," "projects," "should," "targets," "will" and the negative thereof and similar words and expressions are intended to identify forward-looking statements. It is important to note that actual results could differ materially from those projected in such forward-looking statements. Factors that could cause actual results to differ materially from those projected in such forward-looking statements include: the impact of the COVID-19 pandemic, efforts to contain the pandemic and resulting economic downturn on our operations and financial condition, including the risk that our health and safety measures at
  Pilgrim's Pride production facilities will not be effective, the risk that we may be unable to prevent the infection of our employees at these facilities, and the risk that we may need to temporarily close one or more of our production facilities; the risk that we may experience decreased production and sales due to the changing demand for food products; the risk that we may face a significant increase in delayed payments from our customers; and additional risks related to COVID-19 set forth in our most recent Form 10-K and Form 10-Q filed with the SEC; matters affecting the poultry industry generally; the ability to execute the
  Company's business plan to achieve desired cost savings and profitability; future pricing for feed ingredients and the Company's products; outbreaks of avian influenza or other diseases, either in Pilgrim's Pride's flocks or elsewhere, affecting its ability to conduct its operations and/or demand for its poultry products; contamination of Pilgrim's Pride's products, which has previously and can in the future lead to product liability claims and product recalls; exposure to risks related to product liability, product recalls, property damage and injuries to persons, for which insurance coverage is expensive, limited and potentially inadequate; management of cash resources; restrictions imposed by, and as a result of, Pilgrim's Pride's leverage; changes in laws or regulations affecting Pilgrim's Pride's operations or the application thereof; new immigration legislation or increased enforcement efforts in connection with existing immigration legislation that cause the costs of doing business to increase, cause Pilgrim's Pride to change the way in which it does business, or otherwise disrupt its operations; competitive factors and pricing pressures or the loss of one or more of Pilgrim's Pride's largest customers; currency exchange rate fluctuations, trade barriers, exchange controls, expropriation and other risks associated with foreign operations; disruptions in international markets and distribution channels, including, but not limited to, the impacts of the Russia-Ukraine conflict; the risk of cyber-attacks, natural disasters, power losses, unauthorized access, telecommunication failures, and other problems on our information systems; and the impact of uncertainties of litigation and other legal matters described in our most recent Form 10-K and Form 10-Q, including the In re Broiler Chicken Antitrust Litigation, as well as other risks described under "Risk Factors" in the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and subsequent filings with the Securities and Exchange Commission. The forward- looking statements in this release speak only as of the date hereof, and the Company undertakes no obligation to update any such statement after the date of this release, whether as a result of new information, future developments or otherwise, except as may be required by applicable law.
• Actual results could differ materially from those projected in these forward-looking statements as a result of these factors, among others, many of which are beyond our control. In making these statements, we are not undertaking, and specifically decline to undertake, any obligation to address or update each or any factor in future filings or communications regarding our business or results, and we are not undertaking to address how any of these factors may have caused changes to information contained in previous filings or communications. Although we have attempted to list comprehensively these important cautionary risk factors, we must caution investors and others that other factors may in the future prove to be important and affecting our business or results of operations.
• This presentation may include information that may be considered non-GAAP financial information as contemplated by SEC Regulation G, Rule 100, including EBITDA, Adjusted EBITDA, LTM EBITDA, Net Debt, Free Cash Flow, Adjusted EBITDA Margin and others. Accordingly, we have provided tables in the accompanying appendix and in our previous filings with the SEC that reconcile these measures to their corresponding GAAP-based measures and explain why these measures are useful to investors, which can be obtained from the Consolidated Statements of Income provided with our previous filings with the SEC. Our method of computation may or may not be comparable to other similarly titled measures used in filings with the SEC by other companies. See the consolidated statements of income and consolidated statements of cash flows included in our financial statements..

Second Quarter 2023 Financial Review

Main Indicators ($MM)	Q2 2023	Q2 2022
Net Revenue	4,308.1	4,631.6
Gross Profit	278.4	676.8
SG&A	148.4	163.9
Operating Income	100.3	512.9
Net Interest	39.5	37.1
Net Income	60.9	362.0
Earnings Per Share	0.25	1.50
(EPS)
Adjusted EBITDA*	248.7	623.3

Adjusted EBITDA

▪ U.S.: Substantial year-over-year (YoY) decline in

commodity market pricing impacted Big Bird

business; however, significant quarter-over-quarter

(QoQ) operating income improvement for the overall

US business; UK/Europe: Significant year-over-year

profit improvement due to actions taken to mitigate

inflationary cost pressures; Mexico: YoY and QoQ

profitability increases due to improved balance in

supply / demand dynamic and dissipating live

operations challenges.

▪ SG&A lower due to reduction in employee-related

costs in the US and other cost efficiencies achieved in

the US and UK/Europe; partially offset by an increase

in legal settlement costs.

▪ Q2 2023 Adjusted EBITDA* YoY decrease driven by

substantially lower US commodity market pricing;

however, continued QoQ improvements in Adjusted

EBITDA* due to benefits of our portfolio balance, Key

Margin*

5.8% 13.5%

Customer strategy, and geographic diversification.

• This is a non-GAAP measurement considered by management to be useful in understanding our results. Please see the appendix and most recent SEC financial filings for definition of this measurement and reconciliation to US GAAP.

Source: PPC

In $MM	U.S.	EU	MX
Net Revenue	2,446.2	1,310.8	551.1
Adjusted Operating	50.3	32.2	60.7
Income*
Adjusted Operating	2.1%	2.5%	11.0%
Income Margin*			3

Increased Corn Area Boost Supply Prospects

• USDA '22/23 ending stocks are up 4.5% since the end of Q1, largely a result of a competitively-priced Brazil crop working to ration U.S. corn export demand. Corn for Ethanol demand estimates also worked lower over time.
• The '23/24 balance sheet is beginning to take shape. On June 30th, USDA surprised the market expectations by increasing corn acres by 2.1M acres to 94.1M, up 5.5M acres YOY.
• Historically low May-June rainfall totals across much of the US corn belt led to price volatility throughout Q2. However, a change to a more active rain pattern across major production areas prior to key yield-determining stages of the crop worked to soften December corn prices approximately 12% across Q2.
• USDA reduced yield 4 bushels/acre from early-season estimates in the most recent WASDE, but given the additional acres, still showed a comfortable 2.2B bushel ending stocks estimate, a YOY stock build of 860M bu. Global ending stocks are estimated to grow 17.8M metric tons.
• Weather risk remains in play given the dry start to the crop, but the acreage increase and competitively-priced Brazilian corn have reduced supply-side risk for the '23/24 crop year.

Source: PPC	4

Soybean Dynamics

• U.S. '22/23 soybean ending stocks estimates have moved higher throughout Q2 as Brazil's record crop worked to ration some US export demand.
• The addition of corn acres in USDA's June 30th acreage report came at the expense of soybean acres. '23/24 soybean acres were reduced 4M acres to 83.5M. In March, USDA had reported intentions of 87.5M acres for the
  '23/24 crop, flat YOY.
• Soybean yields in the most recent WASDE were left unchanged from the previously reported 52 bushels/acre. The critical weather period for soybeans still lies ahead in August.
• With lower area and weather-dependent yields, the soybean balance sheet is quite dynamic. Price volatility is likely as production prospects take shape.
• U.S. biofuel policy is supportive to soybean oil demand, and crush industry expansion should keep US domestic

meal demand well supplied.

Source: PPC	5