Smithfield Foods Inc at Nasdaq London Investor Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Megan Clapp - Morgan Stanley & Co. LLC - Analyst : Great. Great overview. So maybe we can start with -- this is -- you talked about it a bit. This is a record operating profit this year so far through the third quarter for Smithfield and it didn't come from any one segment which is impressive. So as you look ahead to 2026, how do you expect the profit mix because you are a vertically integrated company, how should investors think about the profit mix evolving across the portfolio as you benefit from that vertical integration?

Question: Megan Clapp - Morgan Stanley & Co. LLC - Analyst : Great.

Question: Megan Clapp - Morgan Stanley & Co. LLC - Analyst : Great. And vertical integrations, you're a bit unique in that maybe relative to food manufacturers, in particular, but maybe even some of your protein peers. So as we think about the vertical integration in your business, as you've looked over the past year or past several years, we've gone through the hog cycle. How has the vertical integration been a competitive advantage for you? And do you see structural changes in better tailwinds because you have that integration?

Question: Megan Clapp - Morgan Stanley & Co. LLC - Analyst : Great. Maybe shifting to demand a little bit, and you talked about how great the outlook is for packaged meats looking into 2026. The environment is a bit tough, macro uncertainty persists. There's a lot of questions around the path of the low-end consumer. In your business, hopefully, actually pricing does start to normalize a bit as we look into 2026. So when you think about packaged meats, what's different about your business and being able to weather through some of those headwinds on the macro side and where are the opportunities? And what gives you kind of confidence to drive volume growth in '26?

Question: Megan Clapp - Morgan Stanley & Co. LLC - Analyst : Maybe just expanding on the category discussion about packaged meats, as you mentioned, it's been a really great year for the category for yourself. As you think about those 25 categories, that you compete in. Is there another packaged meats when we look ahead? Is it about -- where do you see the most opportunity to continue to expand distribution and drive innovation? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 10, 2025 / 3:00PM, SFD.OQ - Smithfield Foods Inc at Nasdaq London Investor Conference

Question: Megan Clapp - Morgan Stanley & Co. LLC - Analyst : So you just shared a lot of nice examples of innovation on the retail side. You also have big foodservice business, which is a bit unique. So can you just talk about maybe some -- give some examples of recent wins on innovation on the food service side because you've continued to outperform the broader industry as well on that side.

Question: Megan Clapp - Morgan Stanley & Co. LLC - Analyst : Maybe just a little bit on the competitive environment. It seems like retailers are amping up the focus on value, just given some of the concerns in the low-end consumer. As you think about 2026 in your categories, two-part question. How are you thinking about balancing promotional intensity with the pricing power that you've earned? And then two, as you've taken price this year in some categories due to inflation, what have you learned about elasticity and kind of brand strength that maybe surprised you? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 10, 2025 / 3:00PM, SFD.OQ - Smithfield Foods Inc at Nasdaq London Investor Conference

Question: Megan Clapp - Morgan Stanley & Co. LLC - Analyst : Great. So I wanted to ask a protein is all the rage. It's all we hear about. Smithfield is 80% pork, 20% beef. Is that -- as you think over the next three to five years, is that the right strategic identity longer term? Is there a desire to move into other proteins? Or are you -- what are the kind of the benefits of being more of a pure-play pork company?

Question: Megan Clapp - Morgan Stanley & Co. LLC - Analyst : As we think about that, how do you manage the -- capturing the supply, getting adequate supply, beef has obviously been a challenge in terms of supply and pricing. So what's been -- what's your strategy on the beef side? And kind of how would you look to navigate that going forward if you choose to expand?

Question: Megan Clapp - Morgan Stanley & Co. LLC - Analyst : Got it. You spoke about it a bit. But raw material volatility has been a major theme across the industry this year in protein across pork, chicken and beef, quite frankly. So you guys have -- your margins have seen a little bit of compression in packaged meats, but all things considered and relative to peers, you've managed it quite well. What are kind of the structural advantages that have allowed you to outperform even as you said, you're still catching up and there's opportunity for recovery.

Question: Megan Clapp - Morgan Stanley & Co. LLC - Analyst : And as we think about Packaged Meats margins looking ahead, cost will hopefully be a good guy, mix automation should continue to help margins as well. Is there any way to kind of rank order how to think about those drivers into 2026? And then you said 12.7% on a trailing 12-month basis for packaged meats. Is there a right way to think about what that margin profile looks like through a cycle?

Question: Megan Clapp - Morgan Stanley & Co. LLC - Analyst : Great. Shifting more to the commodity side of the business. You've been on a journey to reduce size of the hog herd, 10 million hogs, which is roughly 30% vertical integrations, what you've talked about getting to in the medium term, maybe closer to near term at this point. Can you just explain why you think that's the right level for the business, how you came to that decision? And how does that allow for adequate supply and flexibility within the business?

Question: Megan Clapp - Morgan Stanley & Co. LLC - Analyst : Is there anything that would cause you to revisit the $10 million either way?

Question: Megan Clapp - Morgan Stanley & Co. LLC - Analyst : Great. Wanted to talk a little bit about M&A. You talked about your strong balance sheet, you return cash to shareholders. You're still going to have some -- you still have some excess cash. You invest in CapEx and back into the business. But you've also talked about M&A, you've done some bolt-on acquisitions. You did the dry sausage, bought that facility, which allowed you to expand capacity with that category. So in an instance like that as you go forward, how do you think about what's the right use of cash and evaluating those bolt-on opportunities? And what's your criteria as from a financial and operational perspective.

Question: Megan Clapp - Morgan Stanley & Co. LLC - Analyst : Mexico, clearly, maybe top of the list, but there are any other obvious categories or geographies that have natural synergies that you're thinking about? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 10, 2025 / 3:00PM, SFD.OQ - Smithfield Foods Inc at Nasdaq London Investor Conference

Question: Megan Clapp - Morgan Stanley & Co. LLC - Analyst : Okay. Shifting gears a little bit. Investors often ask about the ownership structure of Smithfield. You were bought by WH Group back in 2013, I believe, and then spun back out into the public markets earlier this year. The WH has sold down a little bit more since the IPO. But how should investors think about kind of the long-term path for the current ownership structure?

Question: Megan Clapp - Morgan Stanley & Co. LLC - Analyst : Great. Are there any questions in the room? Unidentified Participant Sorry, I just wanted to clarify the divisional stuff here because it's pretty much all the hog production internal. Is that right?

Question: Megan Clapp - Morgan Stanley & Co. LLC - Analyst : Okay. Maybe we can just finish with one because I think we're almost out of time. Wrap up, where do you think the market continues to underestimate or misunderstand your business?

Question: Megan Clapp - Morgan Stanley & Co. LLC - Analyst : Awesome. That's a great place to end. Thanks, everyone, for joining in the room and on the webcast. And thanks, Mark, for being here.