Pilgrim’s finishes strong fiscal year 2017

Pilgrim's reported strong financial results for its 2017 fiscal year, as well as the fourth quarter of the year.

(Yurii Bukhanovskyi| Bigstock)
(Yurii Bukhanovskyi| Bigstock)

Pilgrim’s on February 14 announced strong financial results for the 2017 fiscal year and the fourth quarter of the year.

Both periods ended December 31, 2017.

2017 highlights

  • Adjusted operating income margins of 11.8 percent in the U.S., 10.6 percent in Mexico and 3.9 percent in Europe operations, respectively.
  • Adjusted EBITDA of $1.39 billion (or a 12.9 percent margin and +54.3 percent versus last year, excluding Moy Park).
  • The acquisition of Moy Park positions Pilgrim’s as a global leader in chicken and chicken-based prepared foods, and aligns with the company’s strategic priorities while providing a strong platform for future growth.
  • GNP integration is progressing well; operations and profitability significantly improved with synergies captured ahead of plan, and are already on par with legacy operations.
  • Completion of strategic capital investments, including the Sanford, North Carolina, organic tray-pack facility and prepared foods line, further increasing product portfolio differentiation, strengthening key customer relationships, and improving margin profile.

Fourth quarter results

  • Consolidated numbers reflect Moy Park for the entire quarter and year, including historical data in accordance to U.S. GAAP.
  • Net sales of $2.74 billion (+43.5% versus same quarter last year of $1.91 billion, excluding Moy Park).
  • Net income of $134.3 million and GAAP EPS of $0.54.
  • Adjusted operating income margins of 7.3 percent in U.S., 4.0 percent in Mexico and 5.0 percent in Europe operations, respectively, adjusted for non-recurring items related to weather events, Moy Park acquisition and Exchange Rate fluctuations.
  • Adjusted EBITDA of $241.0 million (or an 8.8% margin).

Executive commentary

“We generated strong, well-balanced consolidated performance in 2017. Our U.S. and Mexico operations were solid despite logistical challenges in Q4 due to the after-effects from natural events in Puerto RicoMexico and the U.S., while our newly acquired U.K. and continental Europe operations were consistent. The performance once again demonstrated the strength and diversity of our portfolio of bird sizes, and is what fundamentally differentiates us from the competition, giving us the potential to reduce volatility and generate higher margins over time,” stated Bill Lovette, CEO of Pilgrim’s.

“While small-bird and tray-pack have remained strong during Q4, conditions in the commodity markets declined in-line with seasonality but are already recovering well in the new year, indicating the continuation of chicken demand as the protein of choice in domestic and international markets. Facing significant challenges, we are very proud of our team members who had worked tirelessly to continue the operations of our facilities while assisting with rebuilding the local communities.”  

“We completed the announced strategic capital investment improvements, including Sanford, North Carolina, and Moorefield, West Virginia, which will diversify our portfolio by improving mix, reduce the impact of commodity markets, and further raise our margin profile. The Sanford conversion from commodity to organic tray-pack and the acquisition of GNP bring us leadership in premium-branded and NAE chickens while fulfilling our strategy of creating a portfolio of differentiated products to key customers.”

“We are continuing to improve the performance of the GNP operations. Margins have substantially increased since the acquisition just over a year ago and have reached parity with our legacy business during Q4. The integration is going well and we have extracted significant operating and product synergies, and are also preparing to expand the distribution of our premium 

Just Bare Brand. Combined with the success in improving the profitability of our acquired Mexican operations, we believe we have the methodology and the experienced personnel required to grow the operating and financial performance of our U.K. and continental Europe business.”

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