Preliminary Results March Fyffes plc

Transcription

1 10 March 2014 Fyffes plc

2 Fyffes overview Operates in the international tropical produce sector - Product categories bananas, pineapples, melons - Areas of activity Europe, US, Central & South America Market leader in 2 of our 3 product categories Turnover in excess of 1 billion Integrated supply chain production, procurement, shipping, ripening, distribution and marketing Oldest fruit brand in the world dating back to 1929 History extends to 120+ years Dual listing on Irish (ESM) and London (AIM) stock exchanges 1

3 Financial highlights % Change Total revenue 1,082.2m 1,017.8m +6.3% EBITDA 40.0m 40.0m 0% EBITA 32.7m 30.5m +6.9% EBIT 31.3m 28.3m +10.6% Adjusted EPS 8.82c 8.55c +3.2% Total dividend 2.17c 2.07c +4.8% ROIC 17.0% 16.1% +5.6% Adjusted EPS excludes amortisation charges ROIC includes JVs 2014 target EBITA range of 30m- 35m 2

4 Earnings growth EBITDA - M EPS - cent EBITA - M Growth rate Absolute CAGR EBITDA 112% 16.2% EBITA 114% 16.4% 10 EPS 123% 17.4% Earnings have more than doubled since

5 Operating performance 2013 M 2012 M % Total turnover 1, , % EBITDA Depreciation (7.3) (9.5) EBITA % Amortisation (1.3) (2.2) EBIT % 6.3% increase in turnover driven by organic growth in banana and melon categories and price inflation in bananas and pineapples 2.1m (6.9%) increase in Adjusted EBITA as a result of sales growth combined with operational efficiencies EBIT up 10.6% reflecting reduction in amortisation charges 4

6 Operating performance Bananas Satisfactory performance in banana category, slight overall reduction in EBITA Further mid-single digit organic volume growth No.1 in European market 44m cases Higher fruit costs continuing multi-year trend Adverse exchange rate movements Modest average price inflation partly offsetting higher costs and unfavourable exchange rates 5

7 Operating performance Pineapples Modest increase in EBITA in pineapple category in 2013 from a low base Improved market conditions due to more stable supplies Purchased second farm in Costa Rica in early 2013 Higher production costs due to impact of integrating new farm Now producing over 50% of total pineapple volumes 6

8 Operating performance Melons Satisfactory performance in 2012/13 US melon import season Further significant organic growth, consolidating market position in US Favourable weather conditions in producing regions boosted yields and reduced production costs Higher import volumes reduced average pricing Positive start to 2013/14 import season 7

9 Summary cash flow M M Operating cash flows EBITDA 40.0 Exclude JV s operating profits (2.9) 37.1 Investment and other expenditure Capex (incl new pineapple farm) (18.6) Deferred consideration (9.6) Dividends (6.2) Tax paid (4.8) Pension / MNOPF (3.2) Working capital (1.0) Investment in JV (0.9) FX / Other (1.0) (45.3) Net reduction in cash (8.2) Opening net cash 8.6 Closing net cash 0.4 Strong cash generation of 37.1m (12.3 cent per share) Free cash flow (excl purchase of pineapple farm) of 23.6m yield of 8.8% Use of supply chain financing offset increase in working capital arising from further organic growth Further investment planned in

10 Balance sheet 2013 M 2012 M Intangible assets Property, plant and equipment Investment in joint ventures Investment in Balmoral Working capital / hedging Current / deferred tax (10.1) (12.5) Provisions (5.6) (16.8) Pension deficit (net of DT) (22.8) (23.0) Net cash Increase in PPE includes purchase of additional pineapple farm in Costa Rica Reduction in provisions of 11.2m includes payment of 9.6m of deferred consideration and accelerated payment of MNOPF liability Overall 12.4m increase in shareholders funds net of 6.2m dividend payments and 7.3m adverse currency and hedging movements Shareholders funds Minority interests

11 Key drivers of short term performance Selling price Influenced by many factors, particularly volume UK market fixed pricing Continental market mainly weekly spot market with trend to fixed pricing Cost of fruit Annual contracts and production costs Shipping / fuel Shipping contracts vary from 1-3 years Fuel purchased weekly Exchange rates Costs US Dollar denominated Revenue in Euro and Sterling Import duty Programmed reduction in banana import duty 10

12 Overview of operations - production Production Profile Bananas Pineapples Melons Growing cycle 9 months 14 months 6-10 weeks Harvesting Year round Year round Seasonal Fyffes own production c.5% c.50%+ c.100% Fyffes sources bananas under long term supply agreements with third party producers Annual agreement on volume and price 11

13 Overview of operations Logistics Fruit shipped in dedicated reefer ships or container ships in reefer containers Ensures freshness of produce and delays banana ripening process 4 week round trip to / from Tropics Weekly deliveries to multiple European ports Shipping efficiencies critical to cost structures Bunker fuel has become a significant factor 12

14 Overview of operations Distribution Supply ripened (yellow) bananas to customers in UK / Ireland, mainly larger retailers Fyffes only operator in UK with national distribution coverage Ripening process takes 5-9 days Traditionally only unripened (green) bananas sold to customers in Continental Europe Increasing amount of Continental ripening including by Weichert and vanwylick JVs Bananas are a key category for retailers 13

15 Bananas Global marketplace Europe 280m cases marketed Russia c.60m cases marketed N America 250m cases marketed China* 500m cases 10% imported Asia 120m cases marketed Key Producers Ecuador 250m Philippines 150m+ Guatemala 115m Costa Rica 100m+ Colombia 90m+ Key Distributors - Global Chiquita 125m Fresh Del Monte 117m Dole (post disposal) 110m Fyffes 55m Middle East c.60m cases marketed Key Distributors - Europe Fyffes Chiquita Fresh Del Monte Dole 45m 33m 23m 19m * Fyffes has new ripening JV in China. Targeting 1m cases per annum 14

16 Pineapples Global marketplace c.190 million cases marketed annually Europe largest market with 75+ million cases annually North America 2 nd largest market with 68 million Key producers Cases M Costa Rica (75%) 144 Philippines (10%) 19 Key distributors Cases M Fresh Del Monte 60 Dole 22 Fyffes 9 15

17 Melons US imports c.50m cases of melons from Nov May #1 in this category importing c.16m cases Volumes / sales doubled since acquisition in 2008 Production capacity increased in Honduras and Guatemala each year US market 16

18 Fyffes Market position Europe Market size (Cases) USA Market size (Cases) #1 280m #4 250m Fyffes 44m 11m (JV) #3 75m #3 68m Fyffes 7m 2m - - #1 50m Fyffes N/A 16m 17

19 Competitive advantages Scale of business Relationships with best in class suppliers Strong brand recognition #1 banana importer in Europe #1 melon importer in US Relationships going back 40 years Oldest fruit brand globally Valuable asset base State of the art infrastructural network Strong customer relationships c.4,000 ha in Central America 6 distribution centres in UK / Ireland 1 in Florida #1 market share in several countries 18

20 Increased focus on production Farmed land in Central America Land values appreciating in Central America 19

21 Shareholder return Dividends M Buybacks M Total M Total full year dividend 2.17 cent (+4.8%), ahead of growth in earnings Compound annual growth in dividend was 7.7% Dividend yield 2.4% based on 90 cent share price 20

22 Summary Satisfactory performance in 2013 with 6.9% increase in EBITA Similar 2014 target EBITA range of 30m- 35m Strong balance sheet Relatively low valuation multiples Continuing focus on shareholder value Focus on further development opportunities 21

23 Appendices 22

24 Attributable profit 2013 M 2012 M Adjusted EBITA Net interest expense (incl joint ventures) (1.5) (1.3) Adjusted PBT Amortisation (1.3) (2.2) Profit before tax Taxation (incl share of joint ventures) (3.6) (3.1) Minority interest (0.5) (0.1) Profit attributable to shareholders Underlying tax rate 12.9% (2012: 12.6%) Retained statutory profit up 7.7% 23

25 Adjusted earnings per share 2013 M 2012 M % Adjusted profit before tax % Less: - Underlying tax (4.0) (3.7) - Minority interests (0.5) (0.1) Adjusted earnings % Diluted weighted average shares (M) Adjusted fully diluted earnings per share (cent) % Excludes amortisation charges (and share of Balmoral result in earlier years) 24

26 Major shareholders Holder No. of ordinary shares % of shares in issue (excl treasury shares) InterTech South Carolina 39.0m 13.1% Balkan Investment Company (& related companies) 37.2m 12.1% Fidelity International Boston 31.2m 10.5% Sparinvest SA Copenhagen 14.3m 4.8% Farringdon Capital Management Copenhagen 14.3m 4.8% 25

27 Contact Seamus Keenan Company Secretary Tel: skeenan@fyffes.com 26