Del Monte Pacific Limited · SGX:D03
Del Monte Pacific — Q4 FY2019 Earnings Presentation
47 slides from Del Monte Pacific's earnings presentation, Jun 20, 2019
Slide 1: Del Monte Pacific 4Q FY2019 Results
T N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® D E L M O NT E PACIFIC 4Q F Y 2 0 1 9 R E S U L T S 20 June 2019 NOURISHING FAMILIES. ENRICHING LIVES. EVERY DAY. ®
Slide 2: Disclaimer
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® 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 as
Slide 3: Contents
CONTENTS ▪ Summary ▪ 4Q FY2019 Results ▪ FY2019 Results ▪ Balance Sheet and Cash Flow ▪ Market Updates ▪ Sustainability ▪ Dividends ▪ Outlook 3
Slide 4: Notes to the 4Q FY2019 Results
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® NOTES TO THE 4Q FY2019 RESULTS ▪ Fourth quarter is 1 February to 30 April 2019. ▪ DMPL’s effective stake in DMFI is 89.4%, hence the non controlling interest line (NCI) in the P&L. Net income/(loss) is net of NCI. ▪ DM
Slide 5: 4Q and FY2019 Highlights
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® 4Q AND FY2019 HIGHLIGHTS ▪ Generated higher net income of US$6.3m for the fourth quarter, and US$20.3m for the full year, a significant turnaround from prior year loss ▪ Innovation gaining momentum - introduced four in
Slide 6: Outlook
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® OUTLOOK ▪ Barring unforeseen circumstances, the Group is expected to be profitable in FY2020 on a recurring basis (without one-offs). Certain one-off expenses can be expected from streamlining of operations ▪ Major emp
Slide 7: DMPL 4Q FY2019 Group Results Summary
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® DMPL 4Q FY2019 GROUP RESULTS SUMMARY ▪ Sales of US$432.6m, -13% Sales % Change US -19 Philippines -8.5 (in peso terms -8) S&W +20 FieldFresh India (equity accounted) +1 (in rupee terms +11) All figures below without on
Slide 8: DMPL 4Q FY2019 One-off Expense/(Income)
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® DMPL 4Q FY2019 ONE-OFF EXPENSE/(INCOME) In US$ m 4Q FY18 4Q FY19 Booked under Closure of Sager Creek, Arkansas plant 29.1 (0.4) CGS Closure of Plymouth, Indiana plant (0.6) 0.1 G&A/Misc Expense Severance 0.8 2.9 G&A Ex
Slide 9: DMPL 4Q FY2019 Results – As Reported
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® DMPL 4Q FY2019 RESULTS – AS REPORTED 4Q 4Q In US$m Chg (%) Comments FY2018 FY2019 Mainly due to the divested Sager business, and lower Turnover 499.0 432.6 -13.3 USA and Philippine sales Lower sales and higher product
Slide 10: DMPL 4Q FY2019 Turnover Analysis
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® DMPL 4Q FY2019 TURNOVER ANALYSIS 2% 27% Americas 71% Asia Pacific Europe Americas -18.7% ▪ In line with strategy, divested the Sager business. Stripping it out, sales would have been down 13.7% ▪ Lower volume of canned
Slide 11: DMPL FY2019 Group Results Summary
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® DMPL FY2019 GROUP RESULTS SUMMARY ▪ Sales of US$1.95bn, -11% Sales % Change US -14 Philippines -8 (in peso terms -4) S&W +9 FieldFresh India (equity accounted) +2 (in rupee terms +10) All figures below without one-off
Slide 12: DMPL FY2019 One-off Expense/(Income)
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® DMPL FY2019 ONE-OFF EXPENSE/(INCOME) In US$ m FY2018 FY2019 Booked under Closure of Sager Creek, Arkansas plant 42.4 6.2 CGS Closure of Plymouth, Indiana plant 12.7 (0.0) G&A/Misc Income Severance 4.6 6.1 G&A Expense G
Slide 13: DMPL FY2019 Results – As Reported
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® DMPL FY2019 RESULTS – AS REPORTED In US$m FY2018 FY2019 Chg (%) Comments Lower USA sales and the divested Sager business; lower Turnover 2,197.3 1,954.8 -11.0 Philippine sales Lower sales, significantly reduced PJC pri
Slide 14: FY2019 Turnover Analysis
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® FY2019 TURNOVER ANALYSIS 2% 26% Americas 72% Asia Pacific Europe Americas -14.0% ▪ In line with strategy, divested Sager vegetable business ▪ Lower volume of retail branded products due to promotion reduction and distr
Slide 15: Improved Balance Sheet and Cash Flow
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® IMPROVED BALANCE SHEET AND CASH FLOW ▪ Committed to improve cash flow, reduce debt and interest expense ▪ Raised US$300m from two Preference Share tranches in April and December 2017 to repay loans ▪ DMPL purchased an
Slide 16: Market Updates for 4Q FY2019
16 Market Updates for 4Q FY2019
Slide 17: USA
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® USA Market Share (#1) Market Share (#1) Market Share (#2) Market Share (#2) Canned Vegetable Canned Fruit Fruit Cup Snacks Canned Tomato ▪ Successfully executed further price advance, maintaining solid share across cat
Slide 18: Del Monte Foods USA 4Q Results
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® DEL MONTE FOODS USA 4Q RESULTS DMFI’s 4Q sales down 19% to US$308.3m ▪ Stripping out the Sager Creek business which was divested in September 2017, DMFI sales were down 15% ▪ Lower branded volume as a result of price i
Slide 19: Del Monte Foods Transformation – A 130 Year Old Start Up
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® DEL MONTE FOODS TRANSFORMATION TRANSFORMATION – A 130 YEAR OLD “START UP” PROGRESS DEL MONTE IN RECENT YEARS DEL MONTE OF THE FUTURE MADE Portfolio extended into high-growth and high-margin Exclusive focus on declining
Slide 20: Progress Made
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® PROGRESS MADE New Turnaround Plan Immediate Trade & Financing: & Cost Reduction: • -US$150m FY2019 Trade • ABL Extension March 2018 Spend/Price Promotion Reduction • US$231m Second Lien Loan • 10% List Price Increase F
Slide 21: Del Monte Foods Growth Strategy
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® DEL MONTE FOODS GROWTH STRATEGY 21
Slide 22: Our Strategies
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® OUR STRATEGIES Strengthen the Core Expand Into New Areas Build Our Brands 22
Slide 23: FY2019 Accomplishments
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® FY2019 ACCOMPLISHMENTS Strengthen the Core Expand Into New Areas Build Our Brands 23
Slide 24: Transformation: Vegetable and Fruit
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® TRANSFORMATION VEGETABLE FROM: TO: Leader in Leader in Vegetable Goodness Canned Vegetables FROM: TO: FRUIT Fruit Made Exciting & Accessible Goodness Leader in Canned Fruit 24
Slide 25: Transformation (Cont'd): Contadina, College Inn
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® TRANSFORMATION (CONT’D) CONTADINA FROM: TO: Leader in Leader in Contemporary Italian Meal Ingredients Canned Tomato Paste and Solutions COLLEGE INN FROM: TO: Leader in Rich Savoury Stocks Leader in Canned Broth 25
Slide 26: USA - Innovation: Produce
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® USA - INNOVATION Produce Available in 2 Varieties Available in 4 Varieties Each cup contains: Each cup contains: ✓ 4-½ servings of fruit ✓ 3 layers of goodness ✓ Fruit in 100% juice ✓ 1 full serving of fruit ✓ No prese
Slide 27: USA - Innovation: Frozen Bites
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® USA - INNOVATION Frozen Bites Available in 3 Varieties Available in 3 Varieties Each 5-bite serving contains: Each 5-bite serving contains: ✓ Veggies made crave-worthy ✓ Rich Italian flavor ✓ 1 serving of vegetables ✓
Slide 28: Unlocking Foodservice Growth Potential
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® UNLOCKING FOODSERVICE GROWTH POTENTIAL We have launched several innovative healthy Restaurant & Grab & Go Product Solutions Riced Vegetables Frozen Frozen & Refrigerated Pineapple • 4 varieties of low-carb riced • Deli
Slide 29: Foodservice Highlights in 4Q
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® FOODSERVICE HIGHLIGHTS IN 4Q National Vending Trade Show Vistar Business Alignment • Presented Del Monte’s lineup of grab-and-go • Sales Team has realigned and reinforced our solutions to the National Automated relatio
Slide 30: Philippines
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® PHILIPPINES Market Share (#1) Market Share (#1) Market Share (#1) Packaged Pineapple Canned Mixed Fruit Canned and Carton Juices Market Share (#1) Market Share (#1) Tomato Sauce Spaghetti Sauce ▪ Del Monte is the marke
Slide 31: Philippines
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® PHILIPPINES How are we strengthening the ▪ 4Q sales were lower by 8% General Trade? ▪ Down mainly in the general trade and Develop the distributor core 1 beverage and culinary categories processes (policies, ways of wo
Slide 32: Philippine Market – Culinary
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® PHILIPPINE MARKET – CULINARY ✓ Continuous TVC airing and ✓ Del Monte Quick ‘n Easy ✓ Culinary recipe digital support for Del Monte transition to new, and usage Spaghetti flavour campaign fresh design bundles 32
Slide 33: Philippine Market – Culinary
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® PHILIPPINE MARKET – CULINARY ✓ Contadina’s influencer online engagement and retailer collaboration 33
Slide 34: Philippine Market – Outlook
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® PHILIPPINE MARKET – OUTLOOK User base expansion and Continuous drive to increase Sustained counter-offensive on continuous builds on share-of-plate with special challenged categories functional health focus on young ho
Slide 35: S&W Asia
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® S&W ASIA ▪ Consumers moving towards less processed and more natural food: S&W expanding sales of S&W Sweet 16 fresh pineapple ▪ E-commerce and digital are growing with North Asia having the largest share of E-commerce
Slide 36: S&W Asia
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® S&W ASIA ▪ Sales of the S&W business rose 20% in 4Q due S&W Pineapple Juice in Tmall.com to higher sales of both fresh pineapple and packaged products ▪ Increased distribution of fresh pineapple in Tier 1-3 cities in C
Slide 37: S&W China
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® S&W CHINA S&W WeChat account to engage with consumers/followers in China, using fun themes to attract viewers with content focusing on health and wellness 37
Slide 38: S&W Asia
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® S&W ASIA S&W joined Gulfood in Dubai in February 2019. Gulfood is the the world’s largest annual F&B trade exhibition. In-store sampling activations at NTUC Fairprice outlets in Singapore for S&W Organic Apple Cider al
Slide 39: S&W Fresh
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® S&W FRESH Visiting customers and business partners in North Asia (Traders Store in Seoul, South Korea on the left and Xian Feng Store in Hangzhou, China below) 39
Slide 40: S&W Fresh Outlook
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® S&W FRESH OUTLOOK China: Goodfarmer to develop more sales to Southwest China; Asia Fruit Logistica- an international platform Xian Feng is engaging in doubling up their fruit chain stores together with to build new bus
Slide 41: S&W Packaged Outlook
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® S&W PACKAGED OUTLOOK Development of Juices in carton, Spaghetti Sauces and Continuous market expansion for Apple Cider Vinegar (ACV) Spaghetti/Pasta in China (From Singapore/Malaysia/Indonesia to Philippines) + increas
Slide 42: FieldFresh India
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® FIELDFRESH INDIA ▪ FieldFresh sales were up 11% in Rupee terms in 4Q due to higher Del Monte packaged product sales ▪ DMPL’s share of loss in 4Q was US$0.3m, versus prior year quarter’s share of profit of US$0.1m, due
Slide 43: India – Launch of Mayonnaise 80g Spout Range
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® INDIA – LAUNCH OF MAYONNAISE 80G SPOUT RANGE ▪ Trial pack range aimed at increasing both consumer and outlet penetration for our mayonnaise range in retail ▪ 3 variants: Eggless, Sandwich spread & Tandoori 43
Slide 44: Del Monte Trail Mix/Dried Fruits Association with Running Communities in India
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® DEL MONTE TRAIL MIX/DRIED FRUITS ASSOCIATION WITH RUNNING & FITNESS COMMUNITIES IN INDIA Objective: Strengthen our association with health and fitness communities in India, thereby leveraging their influence. This is a
Slide 45: Sustainability
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® SUSTAINABILITY ▪ Del Monte Pacific’s maiden Sustainability Report published in October 2018 was a finalist in the Asia Sustainability Reporting Awards as one of “Asia’s Best First Time Sustainability Report” amongst co
Slide 46: Dividends
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® DIVIDENDS ▪ The Board approved a final dividend of 0.52 US cents (US$0.0052) per share representing 50% of FY2019 net profit For the fiscal year ended 30 April 2019 2018 Name of dividend Final Ordinary Final Ordinary T
Slide 47: Outlook
N O U R I S H I N G FA M I L I E S . E N R I C H I N G L I V E S . E VE RY DAY. ® OUTLOOK ▪ Barring unforeseen circumstances, the Group is expected to be profitable in FY2020 on a recurring basis (without one-offs). Certain one-off expenses can be expected from streamlining of operations ▪ Major emp