Fresh Del Monte Produce Inc. Investor Relations

Transcription

1 Fresh Del Monte Produce Inc. Investor Relations Third Quarter 2017

2 Forward-Looking Statements This presentation contains certain forward-looking statements regarding the intent, beliefs or current expectations of the Company or its officers with respect to the Company s plans and future performance. These forward-looking statements are based on information currently available to the Company and the Company assumes no obligation to update these statements. It is important to note that these forward-looking statements are not guarantees of future performance and involve risks and uncertainties. All forward-looking statements in this presentation are based on information available to the Company on the date hereof, and the Company assumes no obligation to update any such forward-looking statements. The Company s plans and performance may also be affected by the factors described in Item 1A. Risk Factors in Fresh Del Monte Produce Inc. s Annual Report on Form 10-K for the year ended December 30, 2016 along with other reports that the Company has on file with the Securities and Exchange Commission. 2

3 Agenda Fresh Del Monte At A Glance Strengths We Are Building On Strategic Direction Financial Overview 3

4 Fresh Del Monte At A Glance Del Monte brand established Fresh business separated from canned Del Monte Fresh Produce acquired by current management; 1997 IPO NYSE Introduced the first new pineapple variety in more than 15 years; the Del Monte Gold Extra Sweet Pineapple Expanded value-added to include fresh-cut fruit and vegetables Acquired Del Monte Foods Europe Acquired Caribana, substantially increasing Del Monte branded banana and Del Monte Gold pineapple production in Costa Rica 2013 and Acquired tomato agricultural production land in Florida and Virginia 2013 and Acquired additional production land in Costa Rica and Nicaragua and expanded Philippine banana production Launched a protein line in our Dallas facility and rolled out protein salads and snack offerings that include fresh fruit and vegetables Del Monte Fresh Produce opened its first distribution center and fresh-cut facility in Canada Acquired blueberry and deciduous farms in South America Announced new joint ventures with Del Monte Pacific Limited in retail and refrigerated grocery products 4

5 One of the world s leading vertically-integrated producers, distributors and marketers of fresh and fresh-cut fruit and vegetables as well as a leading producer and distributor of prepared fruit and vegetables, juices, beverages, snacks and desserts in Europe, Africa, the Middle East and countries formerly part of the Soviet Union. North America Europe and Africa Asia Pacific Colombia, Ecuador, Central America and Brazil South America Middle East and North Africa 38,000 Employees 11 Owned / 7 Chartered Vessels 40 Worldwide Distribution Centers / 18 Fresh-Cut Operations / 16 F&B Stores 23 in North America 10 in North America 5

6 Fresh Del Monte At A Glance Experienced and Results Oriented Global Leadership Team Name Title Years at FDP Mohammad Abu-Ghazaleh Chairman and CEO 20 Youssef Zakharia President and COO 17 Richard Contreras Senior Vice President and CFO 18 Bruce A. Jordan Senior Vice President General Counsel and Secretary 15 Marissa R. Tenazas Senior Vice President Human Resources 20 Hans Sauter Jorge Pelaez Emanuel Lazopoulos Vice President Corporate Research & Development and Agricultural Services Vice President CECAB (Colombia, Ecuador, Central America and Brazil) Senior Vice President North America Sales, Marketing and Product Management Paul Rice Senior Vice President North America Operations 29 Sergio Mancilla Vice President South America 20 Gianpaolo Renino Vice President Europe and Africa 13 Mohammad Abbas Vice President MENA (Middle East & North Africa) 10 Hector Rivera Vice President Asia Pacific 6 6

7 Fresh Del Monte At A Glance - Continually Evolving Company Then Now Product Range Commodity Producer Limited Truckload shipments 2 Distribution Centers ( DC s ) Sourcing Delivery System Logistics Chartered vessels Predominantly retailers & wholesalers Customers More than 100 products Global basis Truckload shipments, Just in Time ( JIT ), Direct Store Delivery ( DSD ) Global DC s & Fresh-Cut Operations ( FCO s ) Owned & chartered vessels Retailers, Club Stores, Convenience, Petro Stations, Quick Serve Chains, Foodservice 7

8 Fresh Del Monte At A Glance Then and Now 1996 Expanded Products Platform Net Sales by Product 2016 Prepared Food 4% 6% 15% Other 6% 3% 2% 1% 6% 9% 3% Other Fruit, Products & Services Bananas Gold Pineapple Fresh-Cut Products Melons Pineapples Bananas 13% Non-Tropical Fruit Avocados 75% 12% 45% Melons Tomatoes Net Global Sales of $1.2 Billion Bananas 75% Other Fresh 21% Other 4% Net Global Sales of $4.0 Billion Vegetables Bananas 45% Other Fresh 46% Prepared Food 9% 8

9 Fresh Del Monte At A Glance Then and Now International Expansion 1996 Net Sales by Region % Asia 12% Asia Europe 17% Europe 49% 35% Other North America 55% 14% Middle East & North Africa Other North America 2% Net Global Sales of $1.2 Billion Net Global Sales of $4.0 Billion North America $2,221.5 / Europe $673.1 / Middle East $569.8 / Asia $477.2 in Millions 9

10 Strengths We Are Building On

11 Looking Into The Future By 2050, demand for food will rise 70 per cent yet our capacity to increase food production is declining. Source: Oxfam International, June 1, 2011 We will need to double irrigation by 2050 to grow enough food to meet demand of an estimated population of 9 billion people Source: WWF ( CONCLUSION Land is scarce and will become scarcer as the world has to double food output to satisfy increased demand by With limited land and water resources, this will automatically lead to increased valuations of productive land. Source: Joachin von Braun, International Food Policy Research Institute 11

12 Looking Into The Future Global Population Farm Acreage Per Capita 5.0 9,500 9,017 8,499 9,000 Millions 8,000 7, ,868 8, , , , , Source: The United Nations (2010) Source: Food, Land, Population, and the US Economy Cornell University / Instituto of Nazionale della Nutrizione (1994) 12

13 Strengths We Are Building On Industry Leader We were the: Leader and Pioneer in Consumer and Industry Trends FIRST to introduce premium gold pineapple FIRST to complete national distribution network FIRST to launch national fresh-cut fruit FIRST to achieve GlobalG.A.P. We are the: ONLY true multi-national fruit company 13

14 1980/ / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /13 P Strengths We Are Building On Research and Development Most Innovative Fresh Produce Company 7.00 US Fresh Pineapple Per Capita Consumption Lbs Introduction of Del Monte Gold Extra Sweet Pineapple Source: USDA Fruit and Fruit and Tree Nut Yearbook 14

15 Strengths We Are Building On Leading Market Positions #1 #3 #1 Marketer of fresh pineapples worldwide Marketer of bananas worldwide Marketer of fresh-cut fruit in the U.S., Japan, U.K., UAE and Saudi Arabia A leading marketer of branded avocados in the U.S. A leading marketer of branded grapes in the U.S. A leading marketer of branded canned fruit in European markets and the Middle East A leading marketer of bananas, pineapples, deciduous fruit and vegetables in the Middle East A leading marketer of poultry and meat products in Jordan 15

16 Strengths We Are Building On - The Del Monte Brand High Brand Recognition One of the most widely recognized food brands worldwide-over 90% awareness Leadership positions across several categories Global footprint One of the 2 top of mind brands when consumers are asked to remember a fresh produce brand Broad Appeal Transferability of brand to new products and new categories Ease of entry into new markets Greater acceptance at a lower cost of entry Health & Wellness No artificial ingredients Fresh, high quality products Better-for-you attributes Toddlers to retirees 16

17 Strengths We Are Building On Production and Sourcing In % of Our Fresh Produce was Grown on Company-Controlled Farms Europe Fresh & Fresh-cut fruit and vegetables Prepared Food North America Fresh & Fresh-cut fruit and vegetables Prepared Food Protein salads & snacks Mexico Sourcing Avocados Vegetables Colombia, Ecuador, Central America & Brazil Sourcing Bananas Pineapples Melons Mangos Plantains IQF Coconuts Greenhouse: Tomatoes, Bell Peppers, Cucumbers and Other Vegetables Middle East & North Africa Fresh & Fresh-cut fruit and vegetables Prepared Food Poultry & Meat South America Sourcing Avocados Non-tropical Berries Asia Bananas Pineapples Fresh-cut fruit Non-tropicals Africa Sourcing Bananas Pineapples Prepared Food 107,300 Acres Under Production 17

18 Strengths We Are Building On Quality & Safety Our Commitment to Best in Class Quality Assurance and Food Safety Systems To demonstrate compliance with international regulations and standards on environmental protection, food safety and social accountability, our farms and our facilities are certified by one or more of the following standards: Global GAP ISO and ISO 9001 SCS Sustainably Grown OHSAS SIFAV Rainforest Alliance PrimusGFS FSSC / ISO SQF Certifications carried out by external and internal parties are conducted on a regular basis On-going training in all areas of quality and safety Trained quality control professionals Chemistry, Microbiology and Agricultural Services 18

19 Strengths We Are Building On Unmatched Scale and Scope A Key Differentiator - Quality Control, Lower More Stable Costs and Value-Added Services 19

20 Our Growth Strategy

21 Investing For Long-Term Growth Leverage powerful, vertically integrated infrastructure Pursue strategy of diversification Expand geographic presence Enter new distribution channels Grow existing product lines Accelerate addition of new, higher margin products Minimize dependence on bananas Capitalize on Del Monte brand with four new joint ventures Increase market share and leadership position Continue to improve efficiencies and control costs 21

22 Net Sales in Millions Strategy In Action Grow Existing Products $450 $400 Example: Del Monte North America Fresh-Cut Growth $350 $300 $250 $200 $

23 Desire for convenience Pre-washed and pre-packaged Healthy and on-the-go Ready-to-eat/use Premeasured and customized packaging Health and wellness Food safety FOOD SERVICE CONSUMERS Strategy In Action Large Market Opportunity 23

24 Strategy In Action Fresh-Cut Products Trends Play to Our Strengths Stringent food safety standards Grow most of our own raw material Cold chain control Value-added services Reliable year-round deliveries Complete infrastructure 24

25 Net Sales in Millions Strategy In Action Grow Existing Products $250 $200 Example: Del Monte North America Avocado Growth $150 $100 $50 $

26 Strategy In Action Meeting Evolving Customer Needs Leverage Powerful Vertically Integrated Infrastructure North America Fresh-cut vegetables UHP avocados Protein salads Snacks Field grown tomatoes Berries Chilled juices Hummus Europe & Africa Fresh-cut products Juice varieties Fruit Express Ice Lollies Prepared sauces and meal replacements Squeezies Canned Gold Pineapple Middle East Fresh vegetables Fresh juices Canned juices Frozen vegetables Frozen french fries Frozen meat products Chocolate covered fruit Hummus Beans Olives Olive oil Canned tuna Catering services Asia Fresh-cut products 26

27 Strategy In Action New Products and Packaging 27

28 Strategy In Action North America 28

29 Strategy In Action Europe 29

30 Strategy In Action Middle East and North Africa 30

31 Strategy In Action Asia 31

32 Strategy In Action New Growth Markets Expanding Global Footprint North America Canada Distribution center, fresh-cut, protein salad and snack production facility Texas Distribution center, fresh-cut, protein salad and snack production facility Delaware Distribution center, fresh-cut, protein salad and snacks facility Florida and Virginia Field grown products Asia Japan Two fresh-cut facilities Korea Distribution center and fresh-cut facility Europe & Africa France Distribution center with ripening facility and Fresh-Cut center Kenya Can manufacturing line, fresh, frozen and PET juice production lines, mango and bean production, premium canned pineapple Colombia, Ecuador, Central America and Brazil Costa Rica Additional pineapple production Costa Rica Juice processing plant Middle East Dubai Food & Beverage Stores, vending machines and fresh prep kitchen facility Saudi Arabia Food & Beverage Stores, Canned juice operations, frozen food production lines and catering facility Turkey, Iraq, Russia and Ukraine Sales and marketing Jordan, Turkey and Saudi Arabia Vegetable farms South America Chile New packaging technology Chile Blueberry production 32

33 Strategy In Action Build Relationships, Products Closer Retailers Foodservice Warehouse & Club Stores Casual Dining & Quick Serve Convenience Stores 33

34 Strategy In Action Leveraging Infrastructure Maximizing Revenues From Our Existing Infrastructure to Increase Volume and Reduce Costs Maximize: Logistics Refrigerated vessels, containers and trucks Banana infrastructure Higher-margin products essentially ride for free Agricultural land Increase our own production versus independent growers Distribution centers, fresh-cut and protein facilities Streamline operations, further leverage sales capabilities 34

35 Strategy In Action Leveraging Infrastructure 35

36 Financial Performance Bananas in Millions Full Year 3rd Quarter Price / Box $ $ $ $ $ $ $ Net Sales $ 1,545 $ 1,693 $ 1,805 $ 1,868 $ 1,812 $ 424 $ 409 Gross Profit* $ 90 $ 62 $ 109 $ 77 $ 159 $ 40 $ 6 Gross Profit Margin 6% 4% 6% 4% 9% 9% 1% * Excludes asset impairment & other charges. 36

37 Financial Performance Other Fresh Produce in Millions Full Year 3rd Quarter Net Sales $ 1,545 $ 1,639 $ 1,745 $ 1,826 $ 1,853 $ 434 $ 468 Pineapples $ 513 $ 510 $ 577 $ 525 $ 495 $ 123 $ 119 Fresh-Cut $ 391 $ 408 $ 381 $ 467 $ 517 $ 135 $ 159 Non-Tropical $ 264 $ 296 $ 284 $ 271 $ 260 $ 45 $ 38 Avocados $ 68 $ 99 $ 130 $ 175 $ 230 $ 67 $ 90 Gross Profit* $ 207 $ 194 $ 211 $ 209 $ 237 $ 62 $ 45 Gross Profit Margin 13% 12% 12% 11% 13% 14% 10% * Excludes asset impairment & other charges. 37

38 Financial Performance Prepared Food in Millions Full Year 3rd Quarter Sales $ 332 $ 353 $ 378 $ 363 $ 347 $ 92 $ 75 Gross Profit* $ 46 $ 35 $ 45 $ 57 $ 65 $ 17 $ 8 Gross Profit Margin 14% 10% 12% 16% 19% 19% 11% * Excludes asset impairment & other charges. 38

39 Selected Financial Highlights

40 Financial Performance Summary Data in Millions Full Year 3rd Quarter Net Sales $ 3,421 $ 3,684 $ 3,928 $ 4,057 $ 4,012 $ 950 $ 953 Gross Profit $ 342 $ 290 $ 365 $ 342 $ 461 $ 119 $ 58 % margin 10% 8% 9% 8% 12% 13% 6% Operating Income $ 161 $ (28) $ 174 $ 91 $ 244 $ 44 $ 17 Net Income $ 143 $ (34) $ 142 $ 62 $ 225 $ 35 $ 12 EPS - GAAP $ 2.46 $ (0.61) $ 2.53 $ 1.17 $ 4.33 $ 0.68 $ 0.23 EPS Adjusted* $ 2.54 $ 1.57 $ 2.74 $ 2.43 $ 4.74 $ 1.17 $ 0.24 Full Year Nine Months Operating Cash Flow $ 173 $ 109 $ 231 $ 231 $ 332 $ 341 $ 184 Capital Expenditures $ 80 $ 160 $ 149 $ 132 $ 147 $ 98 $ 103 Total Debt $ 126 $ 251 $ 267 $ 254 $ 232 $ 138 $ 280 * Excludes asset impairment & other charges. 40

41 Financial Performance Earnings Per Diluted Share $4.74 $1.82 $2.54 $1.57 $2.74 $2.43 $1.17 $ rd Quarter Excludes asset impairment and other charges. 41

42 Financial Performance Adjusted EBITDA $340 $192 $232 $178 $244 $219 $87 $ rd Quarter Excludes asset impairment and other charges. 42

43 Financial Performance Operating Cash Flow in Millions $332 $341 $197 $173 $109 $231 $231 $ Nine Months 43

44 Financial Performance Debt and Cap-Ex We Have Continued Investing in Diversification and Expansion Without Adding Significant Debt in Millions $719 million spent under stock repurchase program between 2010 and Q Debt $251 $267 $254 $232 Dividend Policy Quarterly cash dividend of $0.15 per ordinary share $ Cap-Ex $80 $160 $149 $132 $147 $98 $ Nine Months 44

45 Clear growth strategy outstanding execution and momentum Positioned like no one else vertically integrated and innovative Respected global mega brand that speaks to health and wellness, quality and convenience Global player Investment Highlights Strong Foundation Built on Diversification Commitment to long-term value WE ARE THE ULTIMATE health & wellness company 45

46 Appendix

47 Appendix Income Statement in Millions Full Year 3rd Quarter Net Sales $ 3,421 $ 3,684 $ 3,928 $ 4,056 $ 4,012 $ 950 $ 953 Cost of Sales 3,079 3,392 3,562 3,714 3, Restructuring and Other Charges Gross Profit % Margin 10% 8% 9% 8% 12% 13% 6% SG & A Gain (Loss) on Sale of Assets - (5) (4) 2 - (1) - Asset Impairment & Other Chgs Operating Income 161 (28) % Margin 5% -1% 4% 2% 6% 5% 2% Interest Expense (2) (2) (3) (4) (3) - (1) Other, Net (4) 13 (14) (11) (4) (3) - Tax (Expense) Benefit (12) (17) (14) (14) (12) (6) (4) Net Income $ 143 $ (34) $ 142 $ 62 $ 225 $ 35 $ 12 % Margin 4% -1% 4% 2% 6% 4% 1% EPS - GAAP $ 2.46 $ (0.61) $ 2.53 $ 1.17 $ 4.33 $ 0.68 $ 0.23 EPS Adjusted * $ 2.54 $ 1.57 $ 2.74 $ 2.43 $ 4.74 $ 1.17 $ 0.24 * Excludes asset impairment & other charges. 47

48 Quarter Ended September 29, September 30, Non-GAAP Measures (per share): Reported net income - Diluted $ 0.23 $ 0.68 Asset impairment and other charges, net (1) $ 0.02 $ 0.48 Loss (gain) on sale of assets, net (2) $ (0.01) $ 0.01 Comparable net income - Diluted $ 0.24 $ 1.17 (1) Asset impairment and other charges, net, for the quarter ended September 29, 2017 included charges in South America and North America due to natural disasters. Asset impairment and other charges, net, for the nine months ended September 29, 2017 also included insurance proceeds related to previously announced flooding in South America offset by impairment charges in Asia. Asset impairment and other charges, net, for the quarter ended September 30, 2016 included $18.7 million in compensatory expense related to the President/COO's transition, of which $9.8 million is in cash. The remaining charges relate to poultry goodwill impairment in the Middle East, impairment charges related to drought conditions in Brazil and underutilized assets in Central America as well as other charges in Europe. Asset impairment and other charges, net, for the nine months ended September 30, 2016 included impairment charges in Asia and Central America. (2) Gain on sale of assets, net, of $0.6 million for the quarter ended September 29, 2017 and $1.5 million for the nine months ended September 29, 2017 primarily related to maritime equipment sales, which is included in Gain (loss) on disposal of property, plant and equipment, net. Loss on sale of assets, net, of $0.7 million for the quarter ended September 30, 2016 primarily related to a loss on maritime equipment sales and a gain of $8.5 million for the nine months ended September 30, 2016 primarily related to the sale of surplus lands in Central and South America, which is included in Gain (loss) on disposal of property, plant and equipment, net. 48

49 Appendix Non-GAAP Measures The Company's results are determined in accordance with U.S. generally accepted accounting principles (GAAP). Some of the information presented in this press release reflects adjustments to GAAP measures such as amounts related to restructuring, asset impairment charges, gain on sales of assets and certain other special items, if any. Management believes these adjustments provide a more comparable analysis of the ongoing operating performance of the business. These adjustments result in non-gaap financial measures and are referred to in this press release as comparable operating income, comparable net income and comparable net income per share. Because all companies do not use identical calculations, our presentation of these non- GAAP financial measures may not be comparable to similarly titled measures used by other companies. Comparable operating income and comparable net income provide us with an understanding of the results from the primary operations of our business. We use comparable operating income and comparable net income to evaluate our period-over-period operating performance because management believes they provide more comparable measures of our continuing business as they adjust for special items that are not reflective of the normal earnings of our business. These measures may be useful to an investor in evaluating the underlying operating performance of our business because these measures: 1. Are used by investors to measure a company's comparable operating performance; 2. Are financial measurements that are used by lenders and other parties to evaluate creditworthiness; and 3. Are used by our management for various purposes, including as measures of performance of our operating entities and as a basis of strategic planning and forecasting. 49

50 in Millions Appendix Cash Flow Full Year Nine Months Net Income* $ 145 $ (34) $ 145 $ 66 $ 226 $ 215 $ 126 Non-Cash Charges Working Capital (45) (70) (7) (5) Operating Cash Flow Capital Expenditures (80) (160) (149) (132) (147) (98) (103) Acquisitions/Disposals 10 (10) (11) 7 (42) (41) 4 Changes in Debt (88) (19) (26) (119) 52 Dividends (23) (28) (28) (26) (28) (20) (23) Share Repurchase (13) (95) (131) (117) (108) (69) (96) Equity Securities (3) Proceeds From Share Issuance Proceeds from Stock Options Other, Net (1) (8) Net Change in Cash $ (7) $ 3 $ (8) $ (9) $ (5) $ (2) $ 10 * Excludes noncontrolling interest. 50

51 Appendix Balance Sheet in Millions ASSETS Full Year Nine Months Cash & Short Term Investments $ 40 $ 43 $ 34 $ 25 $ 20 $ 23 $ 30 Accounts Receivable Inventory & Other CURRENT ASSETS 926 1,016 1, Property, Plant & Equipment 1,025 1,101 1,170 1,215 1,272 1,252 1,322 All Other Assets TOTAL ASSETS $ 2,533 $ 2,589 $ 2,675 $ 2,596 $ 2,653 $ 2,599 $ 2,721 LIABILITIES Current Liabilities $ 362 $ 383 $ 409 $ 382 $ 369 $ 375 $ 370 Long Term Debt Other Liabilities TOTAL LIABILITIES SHAREHOLDER'S EQUITY 1,831 1,751 1,788 1,751 1,816 1,860 1,843 LIAB. & SHAREHOLDER'S EQUITY $ 2,533 $ 2,589 $ 2,675 $ 2,596 $ 2,653 $ 2,599 $ 2,721 51