The company reported income margins of 11.8% in the US, 10.6% in Mexico and 3.9% in Europe operations, respectively.
The company’s adjusted EBITDA was $1.39bn (or a 12.9% margin and +54.3% versus last year, excluding Moy Park).
Its 2017 highlights included the acquisition of Moy Park in September, which the company said “positions us as the global leader in chicken and chicken-based prepared foods”, as well as the completion of $141 million investments, including the Sanford, North Carolina organic tray-pack facility and prepared foods line, which it said would help increase product portfolio differentiation.
Bill Lovette, chief executive officer of Pilgrim’s, said: “We generated strong, well-balanced consolidated performance in 2017. Our US and Mexico operations were solid, despite logistical challenges in Q4 due to the after-effects from natural events in Puerto Rico, Mexico and the US, while our newly acquired UK and continental Europe operations were consistent.”
He added that global demand for poultry remained strong.
“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,” he said. “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.
“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 [Company] bring us leadership in premium-branded and NAE [no antibiotics ever] chickens while fulfilling our strategy of creating a portfolio of differentiated products to key customers.”
Lovette said the integration of GNP Company, acquired in January 2017, was progressing well.
“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 UK and continental Europe business.”