Tyson Foods, Inc.

Good morning and welcome to the Tyson Foods fourth quarter 2024 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Mr. Sean Cornett. Please go ahead.

Good morning, and welcome to Tyson Foods' fiscal fourth quarter 2024 earnings conference call. On today's call, Tyson's President and Chief Executive Officer Donnie King and Chief Financial Officer Kurt Calloway will provide some prepared remarks followed by Q&A. Additionally, joining us today are Brady Stewart, Group President Beef, Pork, and Chief Supply Chain Officer, Kyle Nairn, Group President Prepared Foods, Wes Morris, Group President, Poultry. Kevin Cole, President International and Gold McDonald. And Melanie Bolden, Chief Growth Officer. We've also provided a supplemental presentation which may be referenced on today's call and is available on Tyson's Investment Relations website and via the link in our webcast. During today's call, we will make forward-looking statements regarding our expectations for the future. These forward-looking statements made during this call are provided pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all comments reflecting our expectations, assumptions, or beliefs about future events or performance that do not relate solely to historical periods. These forward-looking statements are subject to risks, uncertainties, and assumptions which may cause actual results to differ materially from our current projections. Please refer to our forward-looking statements disclaimers on slide two as well as our SEC filings for additional information concerning risk factors that could cause our actual results to differ materially from our projections. We assume no obligation to update any forward-looking statements. Please note that references to earnings per share, operating income, and operating margin in our remarks are on an adjusted basis unless otherwise noted. For reconciliation of these non-GAAP measures to their corresponding GAAP measures, please refer to our earnings press release. Now, I'll turn the call over to Donnie.

Thanks, Sean, and thank you to everyone for joining us. This morning, we reported our fourth quarter in fiscal year 2024 results. Performance in Q4 was strong. In fact, adjusted operating income and adjusted earnings per share were both the best results in the past eight quarters, and both more than doubled compared to Q4 last year. The momentum we've built led to significant improvement in full-year profitability in 2024. For the year, AOI of more than $1.8 billion nearly doubled versus fiscal 2023, while adjusted EPS of $3.10 increased more than 130%. We're clearly pleased with our performance this year, where a significant turnaround in chicken combined with strong results in prepared foods and improvements in pork all set well-known challenges and beef. Our disciplined capital allocation drove strong cash performance in 2024 as well. Free cash flow increased by more than $1.6 billion versus last year and came in at more than twice the dividend this year. This result was driven by increased AOI and prudent CapEx management while still investing for profitable growth. Overall, our financial health strengthened significantly from where we ended fiscal 23. Each of our team members across the organization contributed to this strong performance in 2024. I'm very thankful for the hard work they do every day to make us a world-class food company and recognized leader in protein. I want to point out that beyond the results in fiscal 24, we're providing guidance for fiscal 25, which builds on our momentum. At the midpoint, AOI is growing and our financial strength is improving. It's important to note that our guidance at Midpoint for prepared foods and chicken reflects AOI expectations of more than $2 billion combined. Our outlook for next year highlights the benefits of our multi-protein, multi-channel portfolio. Our strategy remains the same and reflects the continued focus on our business fundamentals. Our priority on controlling the controllables. has clearly delivered positive benefits in fiscal 2024, and we expect that to continue in 2025. I want to emphasize that I remain optimistic about our future and am highly confident in our ability to drive long-term value for shareholders. Let's move to segment highlights, starting with prepared foods, which has been a solid and stable driver of profitability. AOI results for the quarter and the year came in just as we expected, with the midpoint of our segment guidance remaining constant all year. FY24 AOI grew 2% year over year and was the best performance since fiscal year 18, overcoming headwinds of startup costs at our new Bowling Green plant in a challenging consumer environment. Overall volume grew nearly 1%, as we continue to broaden our customer base and expand our presence in broad line distribution categories. Moving to chicken, AOI results came in above the high end of our most recent guidance range. While we benefited from lower grain costs, our focus on the fundamentals of live operations where hatch and livability again improved year over year in Q4, and plant efficiencies also contributed to the strong results for the quarter and the year. It's clear that we've built a fundamentally stronger chicken business as evidenced by the significant turnaround in AOI from fiscal 23 to 24, which was our best full year AOI performance in the past seven years. While results in beef were better than anticipated for Q4, we continue to see compressed spreads versus last year, driving the decline of profitability for both the quarter and full year. Obviously, the current cattle cycle remains challenging as there are no clear signs of sustained herd rebuilding intentions. We will remain focused on the things we can control as we've managed through it. Turning to pork, improved spreads highlighting herd health and solid demand drove a $270 million year-over-year increase in AOI for fiscal 24. As I mentioned, our focus on controlling the controllables has produced solid results for fiscal 2024, and we expect this to continue. We have five strategic enablers that drive our priorities for 2025 and beyond. This is our roadmap for success, and we're building on this foundation. Let's look at our enterprise priorities for 2025. Operational excellence never gets old or goes out of style. For us, a key element of operational excellence is gaining enterprise scale and unlocking savings in our controllables by modernizing our operations and driving performance to standards. You've seen the benefits of this in our results for 2024, and we've embedded this approach in our guidance for 2025 across the business with a noticeable impact in prepared foods. As we are in service to our customers and consumers, We are building on our iconic brands to value up our core proteins. We have three of the top 10 brands in protein, behind Tyson, Jimmy Dean, and Hillshire Farm. While our brands are healthy, we have opportunities to expand our household penetration by better serving consumers with innovation for new meal occasions, categories, and channels. One of the ways we will achieve our strategic goals is by investing in our digital capabilities, utilizing big data, predictive analytics, and artificial intelligence for better decision-making and outcomes. Our data and digital delivery priority enables improved yield and mix across many of our operations and is important as we modernize customer engagement and drive consumer insights. We are accelerating digitalization in our end-to-end demand and supply planning, becoming platform-driven with an exception management strategy that optimizes working capital. Capital allocation is an important strategic priority that unlocks fuel for the enterprise. As Kurt will elaborate on shortly, we made tremendous strides in our cash management in 24. We plan to be just as disciplined in 25 with a continued focus on managing CapEx and working capital to drive free cash flow. Importantly, we're focused on team member development as the foundation of our plan delivery and to build on our strong history of our winning culture. With the strategic priorities outlined, let's move to our segment priorities for the next year, starting with prepared foods. There is significant opportunity to drive profitability in prepared foods by operating with an increased level of discipline, increasing throughput and yield by performing the standards, eliminating waste, reducing complexity, and continuing to improve service levels. Our focus on data analytics drives insight into consumer preferences as well as disciplined investment to support and grow our core products and drive innovation. As an example, Jimmy Dean is one of our strongest brands, but there is still room to expand its appeal and market opportunities in adjacent morning eating occasions. To capture trends towards spicier foods and convenience, we recently launched Spicy Chicken Honey Biscuits, a restaurant-quality breakfast sandwich. We've previously mentioned the success of our grill cake platform, which has strong customer adoption and repeat rates. We're leveraging the success of these innovations and further leaning into our other top performing SKUs to capture opportunities to expand distribution. Moving to chicken. There's no clear demonstration of the benefits of operational excellence than the efficiencies we drove in chicken in fiscal 24. We plan to sustain and improve our live and plant operations and maintain a disciplined S&OP process in 2025. As you've seen, when our live operations are running well and our demand plan is more accurate, we can operate much more efficiently while better servicing our customers and reducing inventory, all in support of generating more stable and predictable results. At the heart of our strategy lies a commitment to long-term partnerships with strategic customers. By fostering these collaborations, we ensure stable demand for our products and create mutually beneficial win-win relationships focused on growing the category with our customers. Next, I want to touch upon how we can build value through investments in our branded and value-added chicken portfolio. Tyson holds the number one brand position in value-added chicken across both retail and food service. Over the past year, we've made significant investments to enhance and expand our portfolio of high-quality, innovative, and convenient products. We're also excited to debut our revitalized packaging, which reflects Tyson's relentless focus on quality and generates consumer excitement. The new packaging rollout in October coincides with the launch of our new Tyson branded advertising campaign, Always Been Tyson. More broadly, our fully cooked portfolio is a high ROI area where we will continue to deploy capital to expand our market presence and maximize returns. For example, we accelerated the ramp up of our new Danville facility this year and are now exploring our next Danville scale operation. This approach not only strengthens our financial performance, but also solidifies our competitive positioning in the industry. As you know, our beef business is challenged by the dynamics of the current cattle cycle. Our focus for FY25 and beyond is to build a best-in-class operation so that we are well prepared when the cycle turns as we fully believe it will. At the same time, we continue to align every aspect of our operations from procurement, where we are strengthening our relationship with key suppliers, to production and distribution to meet customer and consumer demands. In addition, we continue to improve our cost structure with tight spin management and increased efficiencies while enhancing yield and mix to add value. We're meeting consumers' demand for convenience with an expanded assortment of pre-seasoned beef, available in a variety of new flavors and forms. We are a leader in beef, and we want to be a valued partner for our customers by having the right products at the right time to meet their needs. We made good progress on operational improvement in our pork business in fiscal 24, which allowed us to capture the benefits of a better market condition, and we expect to make incremental progress this year. The network optimization initiative we completed in 24 is expected to drive better capacity utilization and allow us to improve our mix by leveraging the capabilities of our remaining plants. We're also scaling up our use of data to make better decisions on mix and to improve yield. Like Beef, our pork team has been expanding our portfolio of seasoned and marinated products to drive increased value-added offering while strengthening our partnership with key customers. Across the business, our focus on controlling the controllables can drive sustainable cash flow, better operational execution, and improved mix, and deliver a solid performance in fiscal 2025. Before I hand things over to Kurt to review our financials in more detail, I want to share the positive results from the execution of our strategy, demonstrated by the momentum of our value-added businesses in prepared foods and chicken, while we are also managing through and acknowledging the challenges of the current beef cycle. As our value-added businesses grow and drive a larger portion of our profitability over time, we should expect a more stable earnings profile. Looking at prepared foods in fiscal 24, we delivered AOI growth of over $100 million as compared to the five-year average from fiscal 19 to 23. And its share of overall profitability has increased from a quarter to a half. Additionally, at the midpoint of our fiscal 25 guidance, we're also expecting nearly $100 million increase in earnings. With that, I'll turn the call over to Kurt.