Tyson Foods 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 innew 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.
Source : Tyson Foods via Foodmarket Newsletter (Urner Barry) (10/12/2021)
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