Del Monte Pacific Limited · SGX:D03
Del Monte Pacific — IPO Roadshow (November 2017)
56 slides from Del Monte Pacific's IPO roadshow presentation, Nov 28, 2017
Slide 1: Preference Share Offering Roadshow Presentation
DEL MONTE PACIFIC LTD A Global Heritage Brands Company Preference Share Offering Roadshow Presentation 28 November 2017
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: Agenda
Agenda I. Welcome Remarks II. Company Presentation III. Preference Share Offering Terms IV. Investment Merits for the Preference Shares V. Closing Remarks 3
Slide 4: 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. oO: a STRAT
Slide 5: Company Overview
Company Overview • Del Monte Pacific is one of the largest branded F&B companies listed in Southeast Asia • 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 2013)
Slide 6: Brand Ownership
Brand Ownership NOURISHING FAMILIES. ENRICHING LIVES. EVERY DAY. DEL MONTE (Packaged Products) S&W (For Both Packaged and Fresh Products) CONTADINA COLLEGE INN USA, SOUTH AMERICA, PHILIPPINES, INDIAN SUBCONTINENT AND MYANMAR THE GROUP ALSO OWNS THE CONTADINA AND COLLEGE INN TRADEMARKS GLOBALLY EXCEP
Slide 7: 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 Canned Fruit 39% #1 Plastic Fruit Cup 35% #2 Canned Vegetable 27% #1 Canned Tomato 9%* #2 *combined share for Del Monte, S&W and Contadina brands Source: Niels
Slide 8: 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 DISTRIBUTION REACH PRODUCTION FACILITIES USA Philippines USA 10 Canada Cambodia Mexico 2 Mexico Myanmar Venezuela 1 Central America Pacific Islands India 1 Venezuela Australia Philippines 3 China Israel J
Slide 9: USA Operations
USA Operations Closed down Through long-term growership agreements the tomato plant in Plymouth Indiana as part of streamlining efforts. Sold Sager Creek business. Sager was a drag to the Group’s results. T Short-term one- off expenses offset by long- term benefits. 9. 9
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 – FY2017 Net Sales Breakdown by Customers 21% Others* 6% 6% 61% (Walmart subsidiary) 5% *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 has 67% ownership. Lee Pineapple Group owns 5.5% and has been a sharehol
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 in August 2016 in Singapore • DMPL received a total of 12 awards between 2010-2017 from the Singapore Corporate Awards: Best Managed Board
Slide 13: Financials
Financials
Slide 14: DMPL Full Year FY2017 (ending April) Results
DMPL Full Year FY2017 (ending April) Results Sales of US$2.3bn down 0.9%, driven by lower US sales Sales % Change USA -5 Philippines +2 (in peso terms +6) S&W +45 FieldFresh India (equity accounted) +11 (in rupee terms +10) All figures below without one-off items, and vs prior year period: T EBI
Slide 15: DMPL Full Year FY2017 Recurring Basis
DMPL Full Year FY2017 Recurring Basis Excluding one-off items, Gross Profit, EBITDA and Net Profit were higher in FY2017 vs the prior year. Although the Asian business accounts for >20% of the Group sales, it accounts for a much higher share of the EBITDA and T Net Profit. We are working on turning
Slide 16: Sale of Sager Creek
Sale FY 2017of Sager Sales Creek vs YAGO in(Base -- DMFI USADMFI vs Sager Creek) Sale of Sager Creek in September 2017 will improve DMFI’s performance (3.4m cases) (3.4m cases) -21% -11% -7% -1% -1% • Sager Creek volume declined by 21% in FY2017 • Sager Creek accounted for 53%Tand 21% of • This was
Slide 17: One-off Expenses/(Income)
One-off Expenses/(Income) In US$ m FY16 FY17 Booked under Closure of North Carolina plant 16.3 3.7 CGS ERP implementation at DMFI 13.2 - G&A expense Sager Creek integration 6.9 - G&A expense Severance 7.9 10.2 G&A expense Others (includes professional fees) - 4.0 G&A expense Working capital adjustme
Slide 18: DMPL FY2017 Results (ending April) - As reported
DMPL FY2017 Results (ending April) - As reported In US$m FY 2016 FY 2017 Chg (%) Comments Lower DMFI sales partly offset by higher Philippines Turnover 2,274.1 2,252.8 -0.9 and S&W Asia sales Gross profit 485.8 494.9 +1.9 Better sales mix in Asia and cost optimisation This year included a one-off ex
Slide 19: DMPL 1Q FY2018 (May-July 2017) Results
DMPL 1Q FY2018 (May-July 2017) Results Volume and revenue growth driven by Asia Seasonality Gross margin improvement driven by mix of Sales Foodservice and USDA pricing under pressure in the US 1Q: 20-22% Groupwide profitability in line with plans, although 2Q: 27-29% DMFI impacted by lower
Slide 20: Balance Sheet
Balance Sheet YTD July Index YTD July Index YTD July Index FY 2018 FY 2017 2018 FYvs 2017 2018 FY vs 2017 vs (In Million US$) In Million US$) (In Million US$) Actual Actual FY 2017 Actual FY 2017 Actual FY 2017 cashCash and cashCash equivalents equivalents 19.5 and cash equivalents 19.5 20.5 20.5 95
Slide 21: Financial Ratios
Financial Ratios YTD JulyYTD YTD July YTD July JulyIndex Index Index YTD July Index Index Net Debt Equity FY 2018 FY FY 2017 FY FY 2018 2018 2018 FY vs FY 2017 FY 2017 2017 2018 2017 vs vs vs vsRatio or Gearing In Million (InUS$) (In (In Million Million Million US$) US$) (In Million US$) US$) Actual
Slide 22: Outlook
Outlook The Group is expected to be profitable for FY2018 on a recurring basis Major emphasis on responding to consumer trends through: • Strengthening the core business -- healthier options and new products • Focusing on businesses that are on-trend and rationalising non-profitable ones • Innov
Slide 23: Growth Strategy
Growth Strategy
Slide 24: USA Growth Strategy
Del USAMonte Fruit Refreshers Build Relevance: Continually differentiate our brands and products in order to drive consumer preference Reinforce our points of difference (Del Monte’s quality, College Inn’s rich flavourful taste) Elevate our taste, health and convenience credentials (non-GMO, All
Slide 25: USA – Del Monte Fruit Refreshers
USA Del – Fruit Monte NewRefreshers 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 T • With unexpected flavours, exciting combinat
Slide 26: USA – New Del Monte Fruit & Chia
USA Del – Fruit Monte NewRefreshers Product New Del Monte Fruit & Chia • A Category 1st Combining Luscious Chunks of Fruit with Wholesome Chia • Started Shipments May 2017 4 EXCITING FLAVOURS Peaches in Strawberry Dragon Fruit flavoured Chia Mixed Fruit in Tropical flavoured Chia T Mangoes in Pineap
Slide 27: USA – New College Inn Organic and Concentrated Broth
USA Del – Fruit Monte NewRefreshers Product New College Inn Organic and Concentrated Broth College Inn Liquid Broth Concentrates College Inn Organic Broth The easiest way to have flavourful broth on hand, The rich flavour of College Inn now anytime, for any use available in Organic T Started Shipmen
Slide 28: Total Cost Approach
USA – Improve Efficiency Food Companies are focused on cost reduction to grow earnings… We are taking a total cost approach Trade Spend Improve efficiency and effectiveness of trade spend Total Cost Approach COGS Expand the use of buying consortiums Re-evaluate sourcing strategy Lower logist
Slide 29: USA – Improve Efficiency
USA – Improve Efficiency Zero base and eliminate low-value work by addressing “what” we do, “how” we do it, and “how well” we do it Rightsize corporate core … reduce redundant staffing Offshore … move routine/ transactional positions to the global shared service center (e.g. accounting) Dela
Slide 30: Philippines, India, and Rest of Asia
Philippines, India, and Rest of Asia A. New products Del Monte Creamy & Cheesy Spaghetti Sauce Del Monte Fit ‘n Right Active Isotonic Drink Del Monte Dried Blueberries (India) S&W Organic Apple Cider Vinegar S&W Klear can packaging Contadina sauces, pasta and olive oil B. S&W fresh fruit
Slide 31: Asia – New Products
NOURISHING FAMILIES. ENRICHING LIVES. EVERY DAY. Asia — New Products > Handtepicked ingrectionss from the worid ove? for truly authentic flavours ea 00 = i ; & More i : AFFORDABLE 1 ¢ price per serving vs. 240 mL can 0% hie ¥ CONVENIENT nINEA? resealable pack 31
Slide 32: Asia – New Usage
Asia – New Usage Encourage new twists Level-up even simple on classic tomato Empower working moms recipes with Del Monte recipes to go beyond fried dishes T T 32
Slide 33: Asia – Expand Distribution
Asia – Expand Distribution New market: Turkey E-commerce: Foodservice: Tie-ups Amazon Japan, and menu creation Singapore and JD.com China Digital campaigns T T 33
Slide 34: Investment Merits
Investment Merits Solid Fundamentals Growth Drivers • Near term : • Global brand footprint with well-known premium Del Monte and S&W brands Asian business continues to grow • Long heritage of 130+ years USA restructuring to improve productivities and cost optimisation (eg manufacturing and • Strong
Slide 35: Terms of the offer
Terms of the offer Issuer : Del Monte Pacific Limited (“DMPL”) Initial Offer Size : Base Offer of 8,000,000 Series A-2 Preference Shares with an Oversubscription Option of up to 8,000,000 Series A-2 Preference Shares • 20% of the Offer Shares or 1,600,000 Offer Shares for distribution to the respect
Slide 36: Terms of the offer
Terms of the offer Purpose : To pay the balance of the loan facility extended by BDO Unibank in the amount of U.S.$154,000,000.00 and to pay the fees and expenses for the Offer. Dividend Payment The Offer Shares shall, subject to the conditions for the Dates and declaration and payment of dividends,
Slide 37: Terms of the offer
Terms of the offer Dividend Rate : 6.5% per annum 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. Treasury Bon
Slide 38: 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 39: 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 40: Terms of the offer
Terms of the offer Eligible Brokers : 1. AP Securities Incorporated (as of 14 Nov 2. Armstrong Securities, Inc. 2017) 3. Astra Securities Corporation 4. BA Securities, Inc. 5. BDO Securities Corporation 6. BPI Securities Corporation 7. First Metro Securities Brokerage Corporation 8. IGC Securities,
Slide 41: Terms of the offer
Terms of the offer Depository Agent : Philippine Depository & Trust Corp. Receiving Agent : BDO Unibank, Inc. Counsel for the : SyCip Salazar Hernandez & Gatmaitan Underwriters British Virgin : Conyers Dill & Pearman Pte. Ltd. Island Counsel for the Issuer T 41
Slide 42: Timetable of the Offer
Timetable of the Offer Public Offer Period : November 28 to December 8, 2017 Deadline for Trading Participants’ Firm : December 1, 2017 Commitment PSE Trading Participants’ Allocation : December 4, 2017 Issue and Listing Date : December 15, 2017 T 42
Slide 43: Investment Merits for the Preference Shares
Investment Merits for the Preference Shares Attractive investment opportunity with a dividend rate of 6.5% 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$1,000
Slide 44: Contacts
Contacts For more information about the offer, check out the prospectus in the Investors/Results and Reports/Prospectus of www.delmontepacific.com and the related announcements by the PSE as posted on www.pse.com.ph and edge.pse.com.ph. T 44
Slide 45: Appendix - Markets
Appendix - Markets
Slide 46: South America – Heritage Brands
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 Mexico & Canada ConAgr
Slide 47: DMFI (US Market)
DMFI (US Market) 130+ years of heritage 1886 1926 1980 1988 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 1989 TPG acquired Del Monte US fully KKR sold Del Monte USA Del Monte USA divested from its and
Slide 48: DMFI (US Market)
DMFI (US Market) FY2017 Net Sales by Brand DMFI Acquisition Private 26% Acquisition of Del Monte Foods, Inc (“DMFI”) Label/Others* completed on 18 February 2014 Purchase price of US$1.675b or 9x EBITDA 2% Financed by: 4% 65% Debt: US$970m LBO loans (in the US at DMFI level) and 4% US$280m lo
Slide 49: USA
USA Sales Split FY2017: 44% Packaged Vegetable 36% Packaged Fruit 18% Culinary 2% Beverage T 49
Slide 50: Philippine Market
Philippine Market The Company’s Philippine operations were established in 1926 FY2017 Sales Split World’s largest integrated pineapple operation with a 23,000-hectare pineapple plantation, over 700,000- (Total Sales US$329m) ton processing capacity and a port beside the cannery. It is proud of i
Slide 51: Philippines
Philippines Sales Split FY2017: 39% Beverage 35% Culinary (Sauces, Ketchup, Pasta) 26% Packaged Fruit T 51
Slide 52: Asia and the Middle East
Asia and the Middle East S&W Asia and Middle East FY 2017 Sales Split Acquired S&W International in November 2007 Others (corn, beans, etc.) S&W entered the fresh pineapple business under the 8% S&W brand and is now ranked Top 3 in China, South Korea, Japan and Singapore Exceptional quality pr
Slide 53: Asia and Middle East – S&W Products
Asia and Middle East – T S&W Products Sales Split FY2017: 67% Fresh Pineapple 26% Packaged Fruit 8% Others T 53
Slide 54: India
India Sales Split FY2017: 50% Culinary (Ketchups, Sauces, Mayo) 25% Italian Range (Olive Oil, Olives, Pasta) 17% Packaged Fruit and Vegetable 7% Beverage T 54
Slide 55: Global – Private Labels/OEM
Global – Private Labels/OEM DMPL’s branded business is about 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 USDA Canada Del Monte brand Packaged fruit and pineapple juice owners conce
Slide 56: 5-Year Financials
Turnover Gross Profit EBITDA EBITDA - without Non-Recurring items Profit/(loss) from Operations Net Profit Attributable to Owners EPS (US cents) Net Profit - without Non-Recurring items EPS - without Non-Recurring items (US cents) Gross Margin (%) EBITDA Margin (%) Operating Margin (%) Net Margin (%