Tyson Foods: Outpacing a Growing, Global Protein Market
December 09 2021 - 2:15PM
Tyson Foods (NYSE: TSN) is a global protein leader with a diverse
portfolio of iconic brands and a clear and compelling path to
growth, company leaders told investors and analysts today during
Tyson Foods’ virtual Investor Day.
Chairman John H. Tyson, President and CEO Donnie King and
members of the company’s senior leadership team spoke at the event.
They showcased Tyson Foods’ role as a leading protein company in a
growing, global market; the company’s efforts to increase
value-added and overall production capacity as part of a plan to
drive accelerated volume and earnings growth; and a new
productivity program that is expected to deliver more than $1
billion in recurring savings by fiscal 2024.
“We have three overarching priorities that direct our actions –
winning with team members, winning with our customers and
consumers, and winning with excellence in execution,” said King.
“We are working to enhance our portfolio and capacity to better
serve demand – this includes increasing the relative contribution
of branded and value-added sales to our overall mix. By focusing on
our product portfolio and by adding capacity to meet demand, we
expect to outpace the market.”
King also noted, “We are focused on improving our process
effectiveness across our broader operations and functions. Our new
productivity initiative is designed to drive a better, faster, and
more agile organization that is supported by a culture of
continuous improvement and faster decision making.”
Additional key points shared during the event included:
- Global protein consumption across beef, pork,
and chicken is forecast to rise by close to 95 billion pounds over
the next 10 years.
- Tyson Foods is targeting volume growth ahead
of the market in every segment. The company expects to open
12 new plants over the next two years, increasing
capacity by about 1.3 billion pounds. It is also targeting having
50% of its volume as value-added by the end of fiscal 2024.
- The company expects a recovery of its chicken
business to a 5 to 7% operating margin by mid-fiscal 2022
and expects to deliver stronger margins through fiscal 2024.
- Tyson Foods wants to be the most sought-after place to
work, and this starts with “an unrelenting focus on
safety” as well as a leadership position on compensation, benefits,
and automation.
- As part of the new productivity initiative, Tyson Foods plans
to invest over $1.3 billion in capital in
new automation capabilities over the next three
years to increase yields, reduce labor costs and associated risks,
and ultimately deliver cumulative savings. This initiative is
designed to help the company’s facilities improve production
capacity and efficiency and continue to unlock value.
- The company expects to deliver more than $250 million in
savings by leveraging new digital solutions like
artificial intelligence and predictive analytics to drive
efficiency in operations, supply chain planning, logistics, and
warehousing.
- Each Tyson Foods business segment has a compelling
financial path forward. The company expects adjusted
earnings per share growth over time, especially in prepared foods,
chicken and international.
- Volume growth is expected to outpace the
market at 2% per year, which will help support adjusted
earnings per share growth.
- The company is also focused on ensuring deployed capital
delivers strong returns and is targeting approximately 12%
return on invested capital.
- Tyson Foods is dedicated to
delivering sustainable food at scale. In June, the company
introduced a purpose-driven sustainability
strategy that spans three major pillars: empowering
people, customers, and communities; conserving natural resources
and protecting our planet; and innovating for smart, responsible
agriculture.
A replay of today’s virtual Investor Day will be available
through the Investor Relations site.
About Tyson FoodsTyson Foods, Inc. (NYSE: TSN)
is one of the world’s largest food companies and a recognized
leader in protein. Founded in 1935 by John W. Tyson and grown under
three generations of family leadership, the company has a broad
portfolio of products and brands like Tyson®, Jimmy Dean®,
Hillshire Farm®, Ball Park®, Wright®, Aidells®,
ibp®, and State Fair®. Tyson Foods innovates continually
to make protein more sustainable, tailor food for everywhere it’s
available and raise the world’s expectations for how much good food
can do. Headquartered in Springdale, Arkansas, the company had
137,000 team members as of October 2, 2021. Through its Core
Values, Tyson Foods strives to operate with integrity, create value
for its shareholders, customers, communities, and team members and
serve as a steward of the animals, land and environment entrusted
to it.
Forward-Looking StatementsCertain information
in this press release constitutes forward-looking statements as
contemplated by the Private Securities Litigation Reform Act of
1995. Such forward-looking statements include, but are not limited
to, current views and estimates of our outlook for fiscal 2022,
other future economic circumstances, industry conditions in
domestic and international markets, our performance and financial
results (e.g., debt levels, return on invested capital, value-added
product growth, capital expenditures, tax rates, access to foreign
markets and dividend policy). These forward-looking statements are
subject to a number of factors and uncertainties that could cause
our actual results and experiences to differ materially from
anticipated results and expectations expressed in such
forward-looking statements. We wish to caution readers not to place
undue reliance on any forward-looking statements, which speak only
as of the date made. We undertake no obligation to update any
forward-looking statements, whether as a result of new information,
future events or otherwise. Among the factors that may cause actual
results and experiences to differ from anticipated results and
expectations expressed in such forward-looking statements are the
following: (i) the COVID-19 global pandemic and associated
responses thereto have had an adverse impact on our business and
operations, and the extent that the COVID-19 pandemic continues to
impact us will depend on future developments, which are highly
uncertain and cannot be predicted with confidence, including the
scope, severity and duration of the pandemic, the speed and
effectiveness of vaccine and treatment developments and their
deployment, and public adoption rates of COVID-19 vaccines and
their effectiveness against emerging variants of COVID-19,
including the Delta and Omicron variants; (ii) our ability to make
effective acquisitions or joint ventures and successfully integrate
newly acquired businesses into existing operations; (iii) the
effectiveness of our financial fitness program; (iv) the
implementation of an enterprise resource planning system; (v)
access to foreign markets together with foreign economic
conditions, including currency fluctuations, import/export
restrictions and foreign politics; (vi) cyber incidents, security
breaches or other disruptions of our information technology
systems; (vii) risks associated with our failure to consummate
favorable acquisition transactions or integrate certain
acquisitions' operations; (viii) the Tyson Limited Partnership’s
ability to exercise significant control over the Company; (ix)
fluctuations in the cost and availability of inputs and raw
materials, such as live cattle, live swine, feed grains (including
corn and soybean meal) and energy; (x) market conditions for
finished products, including competition from other global and
domestic food processors, supply and pricing of competing products
and alternative proteins and demand for alternative proteins; (xi)
outbreak of a livestock disease (such as African swine fever (ASF),
avian influenza (AI) or bovine spongiform encephalopathy (BSE)),
which could have an adverse effect on livestock we own, the
availability of livestock we purchase, consumer perception of
certain protein products or our ability to access certain domestic
and foreign markets; (xii) changes in consumer preference and diets
and our ability to identify and react to consumer trends; (xiii)
effectiveness of advertising and marketing programs; (xiv)
significant marketing plan changes by large customers or loss of
one or more large customers; (xv) our ability to leverage brand
value propositions; (xvi) changes in availability and relative
costs of labor and contract farmers and our ability to maintain
good relationships with team members, labor unions, contract
farmers and independent producers providing us livestock; (xvii)
issues related to food safety, including costs resulting from
product recalls, regulatory compliance and any related claims or
litigation; (xviii) compliance with and changes to regulations and
laws (both domestic and foreign), including changes in accounting
standards, tax laws, environmental laws, agricultural laws and
occupational, health and safety laws; (xix) adverse results from
litigation; (xx) risks associated with leverage, including cost
increases due to rising interest rates or changes in debt ratings
or outlook; (xxi) impairment in the carrying value of our goodwill
or indefinite life intangible assets; (xxii) our participation in
multiemployer pension plans; (xxiii) volatility in capital markets
or interest rates; (xxiv) risks associated with our commodity
purchasing activities; (xxv) the effect of, or changes in, general
economic conditions; (xxvi) impacts on our operations caused by
factors and forces beyond our control, such as natural disasters,
fire, bioterrorism, pandemics or extreme weather; (xxvii) failure
to maximize or assert our intellectual property rights; (xxviii)
effects related to changes in tax rates, valuation of deferred tax
assets and liabilities, or tax laws and their interpretation;
(xxix) the effectiveness of our internal control over financial
reporting, including identification of additional material
weaknesses; and (xxx) the other risks and uncertainties detailed
from time to time in our filings with the Securities and Exchange
Commission.
Media Contact: Gary Mickelson, 479-290-6111Investor
Contact: Megan Britt, 479-236-4927Category: IR
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