Tyson Foods, Inc. (NYSE:TSN) Q1 2023 Earnings Call Transcript

Page 4 of 13

In terms of the overall organization, Shane Miller leaving our pork €“ or excuse me, our beef and pork business, our fresh meats business, the relocation got change. Shane is still actively engaged in the company. He and Brady are working through a transition. And so we €“ when Shane decided he could not move for reasons. By the way, Shane is still trying to figure out how he can get here and be a part of it. There are some personal things that he’s got to deal with. But we were fortunate to pick up Brady Stewart, who is the COO of another company, and he’s well versed in the pork business and the packaged meats business and could do a number of roles for us going forward. We’re very fortunate to be able to pick up both Wes and Brady in our organization, and we look for great things from them.

But we’ve got a lot of upside and runway in the organization because of them. Recently, we announced Amy Tu leading our international business, along with a few other functions. But we’re excited about Amy and what she’s doing and her passion for the international market and her passion for growing Tyson in international markets. And I feel really good about where we are from an international perspective. I feel really good about where we are from a chicken perspective and the leadership there. I feel really good about where we are from a beef and pork perspective. If you click down one level as it relates to beef. That team is largely intact moving here, and some have, in fact, already moved here. So Stewart, you saw the numbers in Prepared Foods.

Stewart has done a really nice job of challenging the business and upgrading pork raw material into this branded portfolio that we have. And then finally, today €“ actually today, Melanie Boulden is joining us. And so why Melanie and why a Chief Growth Officer, it was all in an effort to try to get a center of excellence here in Springdale, Arkansas around branding, marketing, communication and innovation. And Melanie has got great experience in consumer packaged goods and most recently, Chief Marketing Officer in a food and beverage company. So I’ll pause and take a breath right there, Ken, and wait for a follow-up.

Ken Goldman: No, no, that’s helpful. Thank you for that. I guess as my quick follow-up, it’s obviously not the largest segment you have, but since you mentioned international, it’s never made money. And I’m just curious. I’m not trying to be critical of it because, obviously, it’s €“ but in the long run, it’s going to be a business that should be very profitable for you and others. But what’s the strategy? Don, you’ve taken a much stronger tack toward, I think, profitability and margins and just efficiency than perhaps your predecessors have. Between you and Amy, what is the frac that we should expect that margin to be going on ahead?

Donnie King: Thanks, Ken. We do appreciate the interest in our International business. I would tell you that we’ve invested a great deal in plants. And with COVID over the last year, particularly in the foodservice channel, we’ve had some headwinds with that. Those have lessened. And we’re in a sweet spot there in terms of our alignment with global customers, many of which are in the food service channel. But we also have launched a branded portfolio across Thailand, Malaysia and China. And we feel good about that. It’s €“ they are doing €“ the brands are doing really, really well and provide not only innovation or outside the U.S., and we also take that innovation and we add that and we bring some of those things back to the U.S. But we feel good about it.

It’s been an investment. It’s been a long time coming, but I think you will see here in €˜23, our international business delivered some really nice results for in the way of operating income. Amy, anything you would like to add to that?

Page 4 of 13