Del Monte Pacific Limited · SGX:D03
Del Monte Pacific — IPO Roadshow (March 2017)
45 slides from Del Monte Pacific's IPO roadshow presentation, Mar 22, 2017
Slide 1: SGX General Announcement: Preference Share Offering Roadshow Presentation
http://infopub.sgx.com/Apps?A=C... 22/03/2017 General Announcement::Preference Share Offering Roadshow Presentation Issuer & Securities Issuer/ Manager DEL MONTE PACIFIC LIMITED Securities DEL MONTE PACIFIC LIMITED - VGG270541169 - D03 Stapled Security No Announcement Details Announcement Title Gene
Slide 2: Preference Share Offering Roadshow Presentation
Del Monte Pacific Ltd A Global Heritage Brands Company Preference Share Offering Roadshow Presentation 22 March 2017
Slide 3: Disclaimer
Disclaimer This presentation may contain statements regarding the business of Del Monte Pacific Limited and its subsidiaries (the “Group”) that are of a forward looking nature and are therefore based on management’s assumptions about future developments. Such forward looking statements are typically
Slide 4: Agenda
Agenda I. Vision and Strategy II. Overview III. Awards and Corporate Governance IV. Financials and Outlook V. Growth Drivers V. Investment Merits for DMPL VI. Preference Share Offering Terms VII. Investment Merits for the Preference Shares VIII. Contacts IX. Appendix - Markets 3
Slide 5: Vision and Strategy
Vision and Strategy NOURISHING FAMILIES. ENRICHING LIVES. EVERY DAY. We nourish families by providing delicious food and beverages that make eating healthfully effortless – anytime and anywhere. We build brands with quality products that are perfectly wholesome and thoughtfully prepared. STRATEGIC P
Slide 6: Company Overview
Company Overview • Del Monte Pacific is one of the largest branded food and beverage companies listed in ASEAN • Exclusive rights to premium heritage brands Del Monte and S&W in certain geographies and product categories • Dual-listed in Singapore (since August 1999) and the Philippines (since June
Slide 7: Our Key Brands and Brand Ownership
Our Key Brands and Brand Ownership • Del Monte (packaged products): USA, South America, Philippines, Indian subcontinent and Myanmar • S&W (for both packaged and fresh products): Global except Australia and New Zealand • Contadina: Global Canada Europe USA Rest of Asia Middle East Indian Mexico & Ce
Slide 8: Established Consumer Brands with Leading Market Positions in the US and Globally
Established Consumer Brands with Leading Market Positions in the US and Globally United States Market Market Product Products Share Position Packaged Core Fruit 35% #1 Packaged Core Vegetable 27% #1 Packaged Cut Tomato 10%* #2 *combined share for Del Monte, S&W and Contadina brands Source: Nielsen S
Slide 9: Large Global Business and Vertically Integrated Operations with Economies of Scale in Pineapple
Large Global Business and Vertically Integrated Operations with Economies of Scale in Pineapple Production Facilities Distribution Reach USA Thailand USA 12 Mexico Indonesia Mexico 2 Central America Pacific Island Venezuela 1 Venezuela Israel India 1 China UAE Philippines 3 Japan Iraq S. Korea Iran
Slide 10: Diversified Portfolio of Blue Chip Customers
Diversified Portfolio of Blue Chip Customers Strong long-term relationships with major retailers across the US US – FY2016 Net Sales Breakdown by Customers 26% Others* 50% 9% 7% 7% (Walmart subsidiary) *Others include Supervalu, Ahold, Publix, Target and Safeway Philippines Others T (E-Mart Co Ltd)
Slide 11: Strong Shareholder Support & Experienced Management Team with Proven Track Record
Strong Shareholder Support & Experienced Management Team with Proven Track Record Strong Shareholder Support NutriAsia Pacific Limited, owned by the Campos family, has been the majority shareholder of the Company since 2006 and currently has 67% ownership. Lee Pineapple Group owns 5.5% and has been
Slide 12: Awards and Corporate Governance
Awards and Corporate Governance § DMPL’s CEO, Mr Joselito D Campos, Jr, bagged the Entrepreneur of the Year Award in the Asia Pacific Entrepreneurship Awards on 11 August 2016 in Singapore 6 • DMPL received a total of 10 awards between 2010-2016 from the Singapore Corporate Awards: ü Best Managed Bo
Slide 13: Financials
Financials NOURISHING FAMILIES, ENRICHING LIVES. EVERY DAY. Forno)
Slide 14: DMPL 9M FY2017 Group Results Summary
DMPL 9M FY2017 (ending Jan) Group Results Summary § Sales of US$1.7bn down 2%, driven by lower US sales Sales % Change US -6 Philippines +5 (in peso terms +9) S&W +43 OEM Exports +1 FieldFresh India (equity accounted) +8 (in rupee terms +12) All figures below without one-off items, and vs prior year
Slide 15: One-off Expenses/(Income)
One-off Expenses/(Income) One-off items comprise of: § 9M FY2017 – US$6.8m (post tax) driven by closure of North Carolina plant and severance cost. § 9M FY2016 - US$23.3m (post tax) favourable adjustment from Retirement plan amendment; partially offset by ERP implementation, Sager Creek integration,
Slide 16: DMPL 9M FY2017 Results – As reported
DMPL 9M FY2017 Results (ending Jan)– As reported 9M 9M In US$m Chg (%) Comments FY 2016 FY 2017 Lower DMFI sales partly offset by higher Philippines Turnover 1,747.8 1,705.7 -2.4 and S&W Asia sales Lower sales; also includes US$3.6m one-off cost for Gross profit 370.9 366.0 -1.3 a US plant closure T
Slide 17: Key P&L Items for 9M FY17 (with one-offs)
Key P&L Items for 9M FY17t (with one-offs) Net Sales -1% Gross Profit Operating Income 2000 -2% 400 369 32.4% 35% 120 1748 1706 366 103 -14% 350 28.4% 30% 100 89 1500 300 +40bps 25% 21.1% 21.5% 80 19 250 218 58 252 -14% 20% -68% 1382 -6% 1295 60 1000 200 18.2% 15% 16.8% +49% 150 40 10% 69 500 100 +2
Slide 18: Key P&L Items for 9M FY17 (without one-offs)
Key P&L Items for 9M FY17t (without one-offs) Net Sales Gross Profit Operating Income 2000 120 1748 -2% 0.1% +18% 101 1800 1706 370 370 21.7% 21.8% 1600 369 0 21.7% 100 86 12 369 21.6% 1400 80 21.5% 368 1200 4 21.5% 21.4% 60 1000 367 21.3% 1748 1706 103 89 800 369 21.2% 40 600 366 21.1% 400 21.1% 20
Slide 19: Outlook
Outlook § The Group is expected to generate a higher profit in FY2017 than prior year on a recurring basis (without one-off items) § Major emphasis on responding to consumer trends through: • Strengthening the core business -- healthier options and new products • Innovation -- process and packaging
Slide 20: Growth Drivers
NOURISHING FAMILIES. ENRICHING LIVES. EVERY DAY. > Growth Drivers
Slide 21: USA
USA Marketing: Continually differentiate our brands/products in order to drive consumer preference § Reinforce our points of difference (Del Monte’s quality, College Inn’s rich flavourful taste) § Elevate our purity, culinary credentials and convenience (non-GMO, All Natural, sea salt) Innovation: A
Slide 22: Del Monte Foods New Product
Del Monte Fruit Refreshers Del Monte Foods New Product Grapefruit in Pink Guava Fruit Water • New product, Del Monte Fruit Refreshers, the first ever Fruit Cup® snack made just for adults, has been named Product of the Year for 2017 in the Healthy Snacks category • With unexpected flavours, exciting
Slide 23: Philippines, India, and Rest of Asia
Philippines, India, and Rest of Asia A. New products § Del Monte Creamy & Cheesy Spaghetti Sauce for Philippines § Del Monte Tandoori Mayo, Eggless Mayo and other variants for India § S&W Fruit Delight for UAE B. S&W fresh fruit expansion C. Foodservice expansion D. E-commerce opportunities E. Impro
Slide 24: Del Monte Group
Del Monte Group • Deleverage through preference share issue of up to US$360m (with an initial tranche of up to US$250 million and the balance issuable within three years) in the Philippines to be listed on the PSE • Achieve improvement in margin through procurement transformation • Reduce working ca
Slide 25: Investment Merits for DMPL
Investment Merits for DMPL Solid Fundamentals Growth Drivers • Global brand footprint with well-known premium • Near term : Asian business continues to grow Del Monte and S&W brands Innovation and new products • Long heritage of 130+ years Restructuring for improving productivities and • Strong loca
Slide 26: Terms of the offer
Terms of the offer Issuer : Del Monte Pacific Limited (“DMPL”) Initial Offer Size : Initial Offer of 15,000,000 Series A-1 Preference Shares with an Oversubscription Option of up to 10,000,000 Series A-1 Preference Shares • 20% of the Offer Shares or 3,000,000 Offer Shares for distribution to the re
Slide 27: Terms of the offer
Terms of the offer Purpose : To partially refinance the loan facility extended by BDO Unibank in the amount of U.S.$350,000,000.00 and to pay the fees and expenses for the Initial Offer. Dividend Payment The Offer Shares shall, subject to the conditions for the Dates and declaration and payment of d
Slide 28: Terms of the offer
Terms of the offer Initial Dividend : 6.625% per annum Rate Step Up Rate : If the Offer Shares shall not have been redeemed by the Issuer on the fifth anniversary of the Issue Date (the “Step Up Date”), the Initial Dividend Rate shall be adjusted on the Step Up Date to the sum of the 10-year U.S. Tr
Slide 29: Terms of the offer
Terms of the offer Conditions on : Subject to the discretion of the Board of Directors Declaration and Cash dividends on the Preferred Shares will be cumulative Payment of Dividends Optional : As and if declared by its Board of Directors and subject to the Redemption or requirements of applicable la
Slide 30: Terms of the offer
Terms of the offer Taxation : The holders of the Series A Preference Shares shall be responsible for declaring the amount they received as dividend in their respective income tax returns and paying the applicable taxes Governing Law : British Virgin Islands Form and title : Scripless Listing : Phili
Slide 31: Terms of the offer
Terms of the offer Eligible Brokers : BDO Securities Corporation; and (as of 20 March) Armstrong Securities, Inc. Depository Agent : Philippine Depository & Trust Corp. Receiving Agent : BDO Unibank, Inc. Counsel for the : SyCip Salazar Hernandez & Gatmaitan Underwriters British Virgin : Conyers Dil
Slide 32: Timetable of the Offer
Timetable of the Offer Public Offer Period : March 22 to March 28, 2017 Deadline for Trading Participants’ Firm : March 24, 2017 Commitment PSE Trading Participants’ Allocation : March 27, 2017 Issue and Listing Date : April 7, 2017 T 31
Slide 33: Investment Merits for the Preference Shares
Investment Merits for the Preference Shares § Attractive investment opportunity with a dividend rate of 6.625% per annum, payable semi-annually. § A US dollar-denominated investment where investors receive principal and dividend payments in US dollars. § Low minimum investment requirement of US$1,00
Slide 34: Contacts
Contacts For more information about the offer, check out the prospectus in the Investors/News/Other Disclosures in Philippines section of www.delmontepacific.com and the related announcements by the PSE as posted on www.pse.com.ph and edge.pse.com.ph. Company Name Tel. No. Email BDO Capital & Invest
Slide 35: Appendix – Markets
NOURISHING FAMILIES. ENRICHING LIVES. EVERY DAY. fone) Appendix — Markets
Slide 36: South America
Our Brand Ownership Heritage Brands : * 1886 1896 1914 1923 § Nutritious as fresh § Finest quality § Italian heritage § Premium ingredients § All natural § Healthy § Premium quality § Taste of home United States South America North and South America Central America Del Monte & Caribbean Panamerican
Slide 37: DMFI (US Market)
DMFI (US Market) 130 years of heritage 1886 1926 1980 1990 Del Monte USA set-up operations in the Philippines RJR acquired Del KKR bought Del Monte was born in California Monte USA RJR-Nabisco 1997 1996 1991 TPG acquired Del Monte US fully KKR sold Del Monte USA Del Monte USA divested from its and b
Slide 38: DMFI (US Market)
DMFI (US Market) FY2016 Net Sales by Brand DMFI Acquisition § Acquisition of Del Monte Foods, Inc (“DMFI”) Private 27% completed on 18 February 2014 Label/Others* § Purchase price of US$1.675b or 9x EBITDA § Financed by: 3% § Debt: US$970m LBO loans (in the US at DMFI level) and 4% 64% US$480m loans
Slide 39: USA
USA Sales Split FY2016: 46% Packaged Vegetable 36% Packaged Fruit 2% Beverage 17% Culinary 38
Slide 40: Philippine Market
Philippine Market § The Company’s Philippine operations were established in 1926 § World’s largest integrated pineapple operation with a FY2016 Sales Split 23,000-hectare pineapple plantation, over 700,000- (Total Sales US$323m) ton processing capacity and a port beside the cannery. It is proud of i
Slide 41: Philippines
Philippines Sales Split FY2016: 40% Beverage 36% Culinary (Sauces, Ketchup, Pasta) 24% Packaged Fruit T 40
Slide 42: Asia and the Middle East
Asia and the Middle East S&W Asia and Middle East FY 2016 Sales Split § Acquired S&W International in November 2007 Others (corn, § S&W entered the fresh pineapple business under the beans, etc.) S&W brand and is now ranked Top 3 in China, South 12% Korea, Japan and Singapore § Exceptional quality p
Slide 43: Asia and Middle East – S&W Products
T Asia and Middle East – S&W Products Sales Split FY2016: 60% Fresh Pineapple 28% Packaged Fruit 12% Others T 42
Slide 44: India
India Sales Split FY2016: 48% Culinary (Ketchups, Sauces, Mayo) 25% Italian Range (Olive Oil, Olives, Pasta) 17% Packaged Fruit and Vegetable 9% Beverage T 43
Slide 45: Global – Private Labels/OEM
Global – Private Labels/OEM DMPL’s branded business is more than 80% of sales. The following are the segments of the non-branded business: Export Markets Customers Products USA Private labels Packaged vegetable, fruit and tomato Canada Del Monte brand Packaged fruit and pineapple juice owners concen