Del Monte Pacific Limited · SGX:D03
Del Monte Pacific — H1 2010 Earnings Presentation
23 slides from Del Monte Pacific's earnings presentation, Aug 10, 2010
Slide 1: Second Quarter and First Half 2010 Results
Del Monte Pacific Limited Second Quarter and First Half 2010 Results 10 August 2010 1
Slide 2: Cautionary Note on Forward-looking Statements
Cautionary Note on Forward- Forward-looking Statements This presentation may contain forward-looking statements that involve risks and uncertainties. Actual future results may differ materially from those expressed in forward- looking statements as a result of a number of risks, uncertainties and as
Slide 3: Contents
Contents Executive Summary 2Q 2010 Results 1H 2010 Results Balance Sheet Business Updates Outlook 3
Slide 4: Executive Summary
Executive Summary • Sales grew 8%, driven by the Philippines and Fresh exports • Net loss position primarily due to higher raw material costs • Measures to lower product costs and operating expenses gaining traction • Second half expected to return to profitability, as indicated earlier this year 4
Slide 5: 2Q 2010 Results
2Q 2010 Results
Slide 6: Second Quarter 2010
Second Quarter 2010 2Q 2Q Chg In US$m Comments 2009 2010 (%) o Higher Philippine sales Turnover 78.9 85.1 +7.9 o Robust growth in fresh business o Higher product costs such as sugar which more than doubled Gross profit 19.5 16.5 -14.9 o Increase in pineapple production costs due to higher input cost
Slide 7: 2Q Turnover Analysis
2Q Turnover Analysis By Market Asia Pac +10.6% • Philippine sales grew 13% due to strong sales of Others processed fruits and culinary 15% segment E&NA -14.3% • Declined primarily due to Asia tight supply of pineapple and 67% E&NA softening demand 18% Others +36.1% • Primarily due to robust growth o
Slide 8: 2Q Margins
2Q Margins Gross margin Higher costs coupled with lower efficiencies % Operating margin Margin Lower gross profit Higher G&A and other 30 operating expenses 24.7 Net margin 19.4 Reduced operating income 20 10.8 10 6.4 2.9 -1.5 0 Gross Profit Operating Profit Net Profit 2Q09 2Q10 8
Slide 9: 2Q Cash Flow Variance Analysis
2Q Cash Flow Variance Analysis Additional 2Q09 Operations Working Tax Capex investment Dividend Interest 2Q10 cap FieldFresh & others -US$109.3m Net Debt -US$89.6m Net Debt -7.2m -15.6m -17.0m -8.5m +36.7m -4.0m +35.3m
Slide 10: 1H 2010 Results
1H 2010 Results
Slide 11: First Half 2010
First Half 2010 1H 1H Chg In US$m Comments 2009 2010 (%) o Higher Philippine sales Turnover 139.3 151.0 +8.5 o Robust growth in fresh business o Higher product costs such as sugar which more than doubled Gross profit 35.0 27.4 -21.7 o Increase in pineapple production costs due to higher input costs
Slide 12: 1H Turnover Analysis
1H Turnover Analysis By Market Asia Pac +6.8% • Philippine sales grew 8% due to strong sales of processed Others fruits and culinary segment 14% E&NA +0.6% • Declined primarily due to Asia tight supply of pineapple and 65% softening demand E&NA 21% Others +32.8% • Primarily due to robust growth of f
Slide 13: 1H Margins
1H Margins Gross margin Higher raw material costs and lower efficiencies Operating margin Lower gross profit % Higher G&A and other Margin operating expenses 30 25.1 Net margin Reduced operating 18.1 income 20 11.2 10 6.6 2.2 -1.4 0 Gross Profit Operating Profit Net Profit 1H09 1H10 13
Slide 14: Balance Sheet
Balance Sheet 14
Slide 15: Working Capital Management
Working Capital Management Successfully reduced working capital by US$46m from June 2009 level. No. of 2Q 2Q Chg Comment days 2009 2010 Actively managed inventory levels for various inputs; Inventory 157 92 -65 stricter implementation of inventory policies Discounting of Receivable 49 36 -13 receiva
Slide 16: Credit Standing
Credit Standing As of 30 June 2010 Credit utilisation: 41% of bank credit lines Loan Mix: 50% Peso and 50% US$ to optimise natural hedge 74% Short term and 26% Long term Gearing and Coverage Ratios Net debt equity ratio = 46% Interest cover = 1.7x Debt cover = 5.5x 16
Slide 17: Business Updates
Business Updates 17
Slide 18: Philippines
Philippines 2Q sales grew by 13%, higher than the 2% growth registered in 1Q Higher sales in the culinary category, led by core products such as spaghetti and tomato sauces, as well as mixed fruits, pineapple products and canned juice drinks, resulting in higher market shares Beverage segment margin
Slide 19: S&W in Asia
S&W in Asia Sales in US$m 2Q 2009 2Q 2010 % Change Comments S&W Processed 2.0 2.4 19.5% Strong sales in Singapore, HK and Japan S&W Fresh 0.7 2.6 261% Higher volume and prices S&W Brand 2.7 5.0 84% • In Singapore, there were increased listings and better presence in major retailer chain stores • In
Slide 20: FieldFresh in India
FieldFresh in India 2Q sales tripled to US$6.8 million while gross profit was flat Much better sales mix with the contribution of the Del Monte branded processed foods business now at 50% of sales Now at 23,000 outlets in 25 cities New canned juice drink variants – Green Apple and Orange – were laun
Slide 21: Outlook
Outlook 21
Slide 22: Outlook
Outlook • We expect improvement in the 2H performance, particularly in the 4Q, from better volume, pricing and sales mix and containment of costs. • Importantly, the Company had an unprofitable supply contract the termination of which became effective at the end of the three-year notice period, 31 M
Slide 23: 1M EE tao,
1M EE tao,