Fyffes plc. Preliminary Results March 2010

Transcription

1 Fyffes plc Preliminary Results March 2010

2 About us Operates in the international tropical produce sector. Areas of activity Europe, US, Central & South America. Product categories bananas, pineapples and melons. Primary activities production, procurement, shipping, ripening, distribution and marketing. Oldest fruit brand in the world dating back to Listed on Irish (IEX) and London (AIM) stock exchanges. Current market capitalisation 150m (share price 0.44 cent). 40% investment in Blackrock International Land plc. Preliminary Results 2009 Page 1

3 Financial highlights Change % Total revenue 726.8m 758.2m -4.1 Group revenue 598.1m 606.7m -1.4 Adjusted earnings before interest and tax * 20.7m 15.3m Adjusted profit before tax * 21.2m 15.9m Adjusted earnings per share ** 5.19 cent 3.95 cent Net cash 36.6m 32.2m Total dividend per share 1.65 cent 1.5 cent * Before Blackrock, exceptional items, amortisation and share of joint venture tax. ** Before Blackrock, exceptional items and amortisation. Preliminary Results 2009 Page 2

4 Business overview supply chain Source / Produce Pack Producer Ship Ripen Market & Distribute Reporting & Control Retailer Preliminary Results 2009 Page 3

5 Key drivers of short term performance Selling price Influenced by many factors, particularly volume. Cost of fruit Agreed annually in advance in US Dollars. Shipping / fuel Charter rates agreed annually in advance in US Dollars. Fuel purchased weekly; some hedging now in place. Exchange rates Costs US Dollar denominated, revenue in Euro and Sterling. Preliminary Results 2009 Page 4

6 Performance since change in import regulations 2005 Adjusted EBITA * 18.4 * EBITA for Fyffes continuing operations excluding Total Produce, which was demerged on 31 December 2006 Preliminary Results 2009 Page 5

7 Reduction in duty rates Agreement reached in December 2009 to reduce EU import duty. Initial reduction from 176 per tonne to 148 per tonne (16%). Further annual reductions to 114 by no earlier than Subject to ratification which may take several months and potential for further renegotiation. Duty continues to be paid at 176 per tonne until ratification. Fyffes duty bill was c. 100m per annum before reduction. Preliminary Results 2009 Page 6

8 Our markets - bananas In excess of 800 million cases marketed globally on an annual basis. Europe - largest single market with 275 million cases. North America second largest market with 235 million cases annually. Asia third largest market with 100 million cases annually. Russia c.60 million cases annually. Middle East consumes c.45 million cases annually. Key producing countries: Cases M Key distributors: Cases M Ecuador 250 Philippines 100+ Costa Rica 100+ Colombia 90+ Dole 165 Chiquita 142 Fresh Del Monte 115 Fyffes 50 Guatemala 60 Preliminary Results 2009 Page 7

9 Our markets - pineapples In excess of 125 million 12kg cases marketed annually. Europe - largest market with 55+ million cases annually. North America second largest market with 50 million cases annually. Key producers: Cases M Key distributors: Cases M Costa Rica 68% 85 Fresh Del Monte 38 Dole 24 Philippines 12% 15 Fyffes 8 Chiquita 8 In 2010, Fyffes expects to produce c.40% of the pineapples it sells on two farms in Costa Rica and Panama. Preliminary Results 2009 Page 8

10 Our markets - melons US melon market estimated at 3.5m tonnes annually, of which 3.1m tonnes produced domestically. Winter melon imports c.40m cases. Fyffes currently focused on import (winter) sector. Fyffes is No.2 in the US winter melon category, importing 8m cases. Activities in Brazil ceased in first half of Preliminary Results 2009 Page 9

11 Fyffes market position Europe USA No.2 No.5 No.3 No.3 - No.2 Preliminary Results 2009 Page 10

12 Scale of business Continuing investment in highest standard facilities. Completion of a 13m investment in a ripening centre in the UK in early Since demerger on 1 January 2007, we have purchased: 1,200 hectare pineapple farm in Costa Rica. 3,600 hectare melon farm in Honduras. 500 hectare pineapple farm in Panama. Fyffes owns / leases c.6,000 hectares 5,000 farmed. Increased integration of supply chain in recent years. Preliminary Results 2009 Page 11

13 Our competitive advantages Scale of business. Strong long term relationships with best-in-class suppliers. Strong brand recognition in markets in which we operate. Strong balance sheet vs competitors. Valuable asset base. State of the art infrastructural network. Strong relationships with diversified customer base. Experienced management team. Preliminary Results 2009 Page 12

14 Why invest in Fyffes? Recession impact on consumer demand. Sector traditionally recession resilient. Access to capital / debt. Fyffes currently has net cash. Investors more risk averse. Increased investor focus on dividend. Fyffes in food sector offers attractive lower risk alternative. Fyffes has an attractive dividend yield. Flight to quality brands. Fyffes has world s oldest fruit brand. Upside potential to investors? Duty reduction potential positive impact. Preliminary Results 2009 Page 13

15 Comparative analysis Valuation Fyffes Chiquita FDP Dole Market capitalisation Net cash / (debt) 37 (391) (212) (1,079) Enterprise value (EV) ,121 1,844 Holding in Blackrock International (5.0c) Implied value of produce business EBITA EV / EBITA for produce business Dividend yield 3.8% N/A N/A N/A Preliminary Results 2009 Page 14

16 Conclusions Strong performance in 2009 in context of significant cost inflation. Recession resistant sector. More positive macro environment supply / demand more in balance. Strong balance sheet. Growth strategy under review - focus on cash management. Duty reduction agreed implementation subject to ratification EBITA target range 14m- 18m. Preliminary Results 2009 Page 15

17 Appendices 2009 Summary Financials Preliminary Results 2009 Page 16

18 Financial highlights Change % Total revenue 726.8m 758.2m -4.1 Group revenue 598.1m 606.7m -1.4 Adjusted earnings before interest and tax * 20.7m 15.3m Adjusted profit before tax * 21.2m 15.9m Adjusted earnings per share ** 5.19 cent 3.95 cent Net cash 36.6m 32.2m Total dividend per share 1.65 cent 1.5 cent * Before Blackrock, exceptional items, amortisation and share of joint venture tax. ** Before Blackrock, exceptional items and amortisation. Preliminary Results 2009 Page 17

19 Operating performance Adjusted EBITA - parent / subsidiaries joint ventures Total adjusted EBITA Excludes share of Blackrock s losses. Strong result in banana category. Significant adverse exchange rate movement due to strength of US Dollar, particularly against Sterling. Further cost inflation third successive year. Sought and achieved prices increases in all markets. Improvement in melon business due to elimination of Nolem losses. Modest profit in pineapple business, slightly up on Preliminary Results 2009 Page 18

20 Attributable profit Adjusted EBIT Net interest income (incl joint ventures) Adjusted PBT Exceptional items (1.5) 15.5 Share of Blackrock (27.9) (28.6) Amortisation (3.4) (2.6) (Loss)/profit before tax (11.6) 0.3 Taxation (incl share of joint ventures) Minority interest (0.5) (0.3) (Loss)/profit attributable to shareholders (10.5) 0.1 Preliminary Results 2009 Page 19

21 Exceptional items Currency gains on terminated operations 7.5 Onerous shipping contract in joint venture (4.4) MNOPF (3.8) Cessation of activities in Nolem (1.6) Gain on property disposal by joint venture 0.5 EU Competition investigation costs 0.3 (1.5) Preliminary Results 2009 Page 20

22 Adjusted earnings per share Attributable (loss)/profit (10.5) 0.1 Adjustments: - Exceptional items 1.5 (15.5) - Amortisation Tax on exceptionals / amortisation (4.3) (1.9) - Share of Blackrock Adjusted earnings Diluted weighted average shares (M) Adjusted fully diluted earnings per share (cent) Preliminary Results 2009 Page 21

23 Balance sheet 2009 Intangible assets 16.6 Property, plant and equipment 64.2 Investment in joint ventures Investment in Blackrock * Working capital / hedging 20.2 Current / deferred tax (15.8) Provisions (14.8) Pension deficit (net of DT) (9.6) Net cash Shareholders funds Minority interests (18.9) (8.3) (7.9) * Current market value of shareholding is c. 11.7m (at 5 cent share price). Preliminary Results 2009 Page 22

24 Summary cash flow Inflows Adjusted EBITA 20.7 Interest received 2.1 Cash impact of exceptional items (1.3) Depreciation 5.0 Exclude joint ventures profit before tax Impairment charge (4.1) 1.9 Dividends / loans repaid by Geest 2.6 Total inflows 26.9 Outflows Acquisitions incl debt acquired (3.0) Capex (4.8) Dividends (5.4) Pension contributions vs profit & loss charge (6.3) Tax paid (2.0) Working capital (1.1) Translation / other 0.1 (22.5) Net outflow of funds 4.4 Opening net cash 32.2 Closing net cash 36.6 * Capex and dividends from Geest both net of 5.6m paid for Coventry depot purchased by Fyffes. Preliminary Results 2009 Page 23

25 Major shareholders Holder No. of ordinary shares % of shares in issue (excl treasury shares) Marathon Asset Management 66.1m 19.1% Balkan Investment Company (& related companies) 37.2m 10.8% Fidelity International 32.7m 9.5% Sparinvest SA 19.1m 5.4% Irish Life Investment Managers 13.8m 4.0% Preliminary Results 2009 Page 24

26 Contact Seamus Keenan Company Secretary Tel: skeenan@fyffes.com Preliminary Results 2009 Page 25