Del Monte Pacific Limited · SGX:D03
Del Monte Pacific — 3Q FY2023 Earnings Presentation
38 slides from Del Monte Pacific's earnings presentation, Mar 9, 2023
Slide 1: Del Monte Pacific 3Q FY2023 Results
DEL MONTE PACIFIC 3Q FY2023 RESULTS 9 March 2023
Slide 2: 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 3: Contents
Contents ▪ Summary ▪ 3Q FY2023 Results ▪ 9M FY2023 Results ▪ Market Updates ▪ Sustainability ▪ Outlook 3
Slide 4: Notes to the Results
Notes to the Results ▪ 3Q is from 1 November 2022 to 31 January 2023 ▪ DMPL owns 87% of Del Monte Philippines, Inc. and 93.6% of Del Monte Foods, Inc. DMPL recognizes a 13% and 6.4% non-controlling interest (NCI) in these two subsidiaries, respectively. These comprise the NCI line in the P&L. Net pr
Slide 5: Highlights
Highlights 3Q FY2023 ▪ Del Monte Pacific (DMPL) Group sales grew by 3% to US$681m on higher USA and international sales, up by 6% and 19%, respectively ▪ EBITDA down by 12% to US$80m on higher costs while net profit declined by 62% to US$9.8m on lower operating results and increased interest expense
Slide 6: Outlook
Outlook ▪ The global environment remains unstable with consumers becoming more cautious with their spending and cost pressures persisting ▪ Remain vigilant in managing our operating expenses which include: ✓ packaging materials optimization; ✓ power and fuel initiatives; ✓ investments in plants to i
Slide 7: 3Q FY2023 Results Summary
3Q FY2023 Results Summary ▪ Sales of US$681.2m, +3% Sales % Change Americas +6 Philippines -6 (in peso terms +6) International +19 India (equity accounted) -7 (in rupee terms +2)* *Del Monte Foods Pvt. Ltd. (India) discontinued the fresh business. Del Monte packaged business sales were down 2% in US
Slide 8: 3Q FY2023 Results – Reported Basis
3Q FY2023 Results – Reported Basis In US$m 3Q FY2022 3Q FY2023 Chg (%) Comments Turnover 659.4 681.2 +3.3 Higher sales in USA and international markets Gross profit 163.2 152.2 -6.7 Higher costs and unfavorable sales mix Gross margin (%) 24.7 22.3 -2.4ppts Same as above EBITDA 91.0 80.2 -11.8 Same a
Slide 9: 3Q FY2023 Turnover and Operating Profit Analysis
3Q FY2023 Turnover and Operating Profit Analysis Sales Operating 2.2% Profit 5.1% 24.7% Americas 73.2% Asia Pacific 38.3% 56.6% Europe Sales growth Comments Americas +5.8% ▪ Driven by higher branded retail sales which grew by 12% across key categories of canned vegetable, fruit and tomato. Branded r
Slide 10: 9M FY2023 Results Summary
9M FY2023 Results Summary ▪ Sales of US$1.8bn, +4% Sales % Change Americas +5 Philippines -5 (in peso terms +7) International +16 India (equity accounted) 0 (in rupee terms +7)* *Del Monte Foods Pvt. Ltd. (India) discontinued the fresh business. Del Monte packaged business sales were up 13% in USD t
Slide 11: 9M FY2023 One-Off Item
9M FY2023 One-Off Item ▪ In May 2022, DMFI raised US$600m through a 7-year Term Loan B facility at Adjusted SOFR, with a floor of 0.5% plus 4.25% p.a., to primarily redeem the US$500m Senior Secured Notes which had an interest rate of 11.875% p.a. ▪ Term Loan B has a much lower interest rate (8.86%
Slide 12: 9M FY2023 Results – Reported Basis
9M FY2023 Results – Reported Basis In US$m 9M FY2022 9M FY2023 Chg (%) Comments Turnover 1,772.5 1,836.7 +3.6 Higher sales in USA and international markets Gross profit 475.1 489.2 +3.0 Same as above plus active cost management Gross margin (%) 26.8 26.6 -0.2ppt Price increases covered higher costs
Slide 13: 9M FY2023 Turnover and Operating Profit Analysis
9M FY2023 Turnover and Operating Profit Analysis Sales Operating 2.0% Profit 3.2% 26.7% Americas 71.3% 33.2% 63.6% Asia Pacific Europe Sales growth Comments Americas +4.5% ▪ Higher branded retail sales which grew by 9%. Branded retail accounted for 76% of DMFI’s sales ▪ Incremental sales of US$26.4m
Slide 14: Market Updates
Del Monte MARKET UPDATES
Slide 15: Del Monte Foods USA 3Q FY2023
Del Monte Foods USA 3Q FY2023 ▪ DMFI’s 3Q sales were US$495.7m or 73% of Group turnover ✓ Sales up 6% on higher branded retail sales of canned vegetable, fruit and tomato ✓ Plus incremental sales of US$14.3m from recently-acquired Kitchen Basics (KB) stock and broth business ✓ Excluding KB, DMFI’s s
Slide 16: USA Market Shares
USA Market Shares Canned Vegetable (#1) Canned Fruit (#1) Fruit Cup Snacks (#2) Canned Tomato (#3) Broth without and with Kitchen Basics (#2) Source for market shares: Nielsen RMS / Scantrack DMFI Custom DBs, Eq Vol share, Total xAOC, Latest 3M ending 28 January 2023. ▪ Del Monte maintained its lead
Slide 17: USA – Addressing Consumer Needs
USA – Addressing Consumer Needs Del Monte is addressing consumer needs for Value and Convenience Value Priced Offerings Value Multi Packs & Family Size Value Based Bonus Packs Club & eCommerce Packaging 17
Slide 18: USA - Channels
USA - Channels We are growing our presence in both traditional Grocery Mass customers and accelerating growth within Emerging Channels Grocery Mass Club eCommerce Foodservice Dollar Convenience Natural F19–F22 Net Sales 4.4% 7.4% 54.4% 421.9% 12.7% 44.5% 13.8% 42.6% CAGR* Share of Del Monte 45.1% 27
Slide 19: USA – Expanded Portfolio
USA – Expanded Portfolio Our expanded portfolio is gaining significant new distribution Over US$60m sales generated from recent authorizations Del Monte Refrigerated (FN/64oz) 9 New SKU’s, +18,000 POD’s Del Monte Veg POD Expansion +17,800 POD’s Incremental PFC/Sloppy Joe Assortment +5,500 POD’s New
Slide 20: USA – Joyba Craze
USA – Joyba Craze The Joyba Craze Continues as we Expand Distribution • Joyba SKUs are the Top 4 dollar velocity items per store per week in ready to drink tea category at Target 20
Slide 21: USA 3Q – Marketing Highlights
USA 3Q – Marketing Highlights Vegetables Holiday Support Pineapple Gold Fruit Cup Contadina Pinterest Shopper Marketing Holiday Support Pinterest Influencer Content 21
Slide 22: USA 3Q – Marketing Highlights
USA 3Q – Marketing Highlights Kitchen Basics Holiday College Inn Holiday Take Root Organics Pinterest 22
Slide 23: USA 3Q – Marketing Highlights
USA 3Q – Marketing Highlights ▪ "Choose Good Do Good" scale event ▪ Cause partnership with Alliance for Healthier Generation 23
Slide 24: USA 3Q – Foodservice
USA 3Q – Foodservice New Business Growth From Top 200 National Accounts Eat’n Park – Hello Bistro Joyba on 20+ college campuses 24
Slide 25: DMPL ex-DMFI 3Q FY2023
DMPL ex-DMFI 3Q FY2023 ▪ Sales of US$203.7m, up 1%, on higher International sales ▪ Philippine Market sales of US$109.8m, +6% in peso terms but -6% in US dollar terms ✓ Higher sales of beverage, culinary and innovation offset the decline in packaged tropical fruit ✓ Compelling communication campaign
Slide 26: Philippines – Market Shares
Philippines – Market Shares +1.7pts +1.0pt +0.9pt Packaged Pineapple (#1) Canned Mixed Fruit (#1) RTD Juices ex foil pouches (#1) -1.1pts +1.5pts -1.9pts Tomato Sauce (#1) Spaghetti Sauce (#1) Drinking Yogurt, DM Vinamilk + Mr. Milk (#2) ( Source for Volume market shares: The Nielsen Company - Retai
Slide 27: Philippines – Beverage Recovery Plan
Philippines – Beverage Recovery Plan Compelling Communication Campaigns with Value-for-Money Offers In-Store 100% Pineapple Juice: All-out Juice Drinks: Juice Up Your Life, Fit ‘n Right: Original is Back! nutrients to do more everyday Perfect for Meals Your Fitness Your Way Melon Cucumber Permanent
Slide 28: Philippines – Marketing
Philippines – Marketing Tomato Sauce Campaign ‘Sauce is so good, it’s a meal Fruit Salad Noche Buena Campaign, Digital + In-Store on its own!’ Pineapple Celebration Campaign, TV + Digital + In-Store Spaghetti Sauce Mass Display Unit 28
Slide 29: Philippines - Marketing
Philippines - Marketing An excellent assortment of value for money packs; 28% of FY2023 sales LOW CASH OUTLAY PACKS VALUE BUNDLES TOMATO SAUCE and PASTE SPAGHETTI SAUCE TOMATO SAUCE SPAGHETTI SAUCE 1kg Singles MP Buy 2, Get 1 USD 2.28 90g 115g USD 0.21 USD 0.30 250g USD 0.55 500g Singles MP REGULAR
Slide 30: Philippines – Innovation
Philippines – Innovation Innovation now accounts for 7% of total Philippine Sales Combined addressable market of these products is US$3.5bn Potato Crisp Flavor Range: Original, Spicy; New in FY2023: Cheese, BBQ, 20g Del Monte Vinamilk Range Flavor Range: Fresh Milk; Wintermelon Milk Tea; IQ Smart Ch
Slide 31: Philippines – Innovation
Philippines – Innovation Del Monte Vinamilk Mr. Milk and Fruity Munchsters Cross-category Full back-to-school support with bundling tie-ups and Digital Advertising New Orange Flavor leveled-up advertising and cross-merchandising in-trade trial generation bundles School Activations Sampling activitie
Slide 32: Philippines – Foodservice & Convenience
Philippines – Foodservice & Convenience 100% opening of Foodservice Aggressive recovery in Convenience Institutions accelerated growth in 3Q Stores driven by the opening of transport & school sectors ▪ 3Q sales grew by 16%; sales now at 89% ▪ 3Q sales grew by 68%; sales now at 81% of pre-pandemic le
Slide 33: International – Innovation
International – Innovation Innovation now accounts for 12% of Total International Sales Total sales potential of these products is US$100m NICE FRUIT Frozen Snacks Japan Middle East Japan Europe CANADA US Saudi Singapore China Hongkong 7-11 McDonald’s 7-Eleven Lamex/KFC McDonald’s Del Monte Arabia P
Slide 34: S&W Fresh Overview
S&W Fresh Overview ▪ Our high quality, premium MD2 fresh pineapple makes us the largest fresh pineapple exporter to China, with 53% volume share ▪ One of the 3 biggest fresh pineapple exporters to Japan, South Korea and the Middle East ▪ Introduced last year, the naturally-ripened extra sweet S&W De
Slide 35: Del Monte India
Del Monte India Continued improvement in 3Q ▪ Del Monte India’s sales in 3Q were up 2% in Rupee terms on higher sales across B2B and B2C channels ▪ Gross margin improved to 18.2% from 15.9% with continued cost management ▪ EBITDA turned around from a loss to profit from improved operating results ▪
Slide 36: Sustainability
Sustainability Plastic Waste Carbon Emissions Rainforest Alliance Foundation Programs Submitted DMPI’s Expanding carbon The company obtained Target to plant 20,000 Extended Producer footprint measure the Rainforest Alliance bamboos at the Responsibility (EPR) beyond pineapple certificate, indicating
Slide 37: Sustainability
Sustainability Nourishing Families with Healthier Generation • We activated our first holiday campaign with Alliance for a Healthier Generation, an organization that works to ensure kids across the nation have healthy futures, driven by community interventions and business sector solutions • Focus o
Slide 38: Outlook
Outlook ▪ The global environment remains unstable with consumers becoming more cautious with their spending and cost pressures persisting ▪ Remain vigilant in managing our operating expenses which include: ✓ packaging materials optimization; ✓ power and fuel initiatives; ✓ investments in plants to i