Del Monte Pacific Limited · SGX:D03
Del Monte Pacific — Q1 FY2018 Earnings Presentation
33 slides from Del Monte Pacific's earnings presentation, Sep 7, 2017
Slide 1: Del Monte Pacific 1Q FY2018 Results
DEL MONTE PACIFIC 1Q FY2018 RESULTS 7 September 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: Contents
Contents Summary 1Q FY2018 Results Market Updates Sustainability Outlook 3
Slide 4: Notes to the 1Q FY2018 Results
Notes to the 1Q FY2018 Results 1. First quarter is 1 May to 31 July 2017. 2. 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. 3. DMPL Group adopted the amendments to IAS 16 and IAS 41 (Agriculture: Bearer Plants in Ap
Slide 5: Highlights and Outlook
Highlights Sales grew on strong performance in Asia which offset lower sales in USA Gross margin increased to 20.7% Net income was US$0.7m reversing a net loss of US$7.0m in the same quarter last year Outlook The Group will be profitable for FY2018 on a recurring basis Major emphasis on re
Slide 6: DMPL 1Q FY2018 Group Results Summary
DMPL 1Q FY2018 Group Results Summary Sales of US$474m, +1.4% on higher Asia sales Sales % Change US -4 Philippines -1.5 (in peso terms +5) S&W +71 FieldFresh India (equity accounted) +2 (in rupee terms -2) EBITDA of US$32.2m, up 26% from US$25.5m in prior year quarter Operating profit of US$14
Slide 7: DMPL 1Q FY2018 Results – As Reported
DMPL 1Q FY2018 Results – As Reported 1Q 1Q In US$m FY2017 Chg (%) Comments FY2018 (Restated) Turnover 467.4 473.8 +1.4 Higher Asia sales offset lower USA sales Gross profit 95.4 97.9 +2.6 Higher sales Last year had one-off expenses of US$4.9m; EBITDA 25.5 32.2 +26.2 Recurring EBITDA still up 9% due
Slide 8: 1Q FY2018 Turnover Analysis
1Q FY2018 Turnover Analysis Americas 71% 27% Asia Pacific 2% Europe Americas -4.1% Reduced sales in private label and regional brands in foodservice as a result of competitive pricing Sales of USDA fruit and pineapple concentrate were also impacted by lower pricing Asia Pacific +15.5% Strong S
Slide 9: United States of America
United States of America Market Share (#1) Market Share (#1) Market Share (#2) Market Share (#2) Canned Vegetable Canned Fruit Plastic Fruit Cup Canned Tomato DMFI grew share in 3 out of 4 of its measured categories (Canned Vegetable +0.6 pts, Canned Fruit +2.1 pts, Fruit Cups +2.1 pts) Expanded
Slide 10: Del Monte Foods USA
Del Monte Foods USA DMFI’s 1Q sales down 4% to US$336.5m • Reduced sales in private label and regional brands in foodservice as a result of competitive pricing • Sales of USDA fruit and pineapple concentrate were also impacted by lower pricing • However, key retail segments of canned vegetable, ca
Slide 11: Del Monte Foods USA's Seasonality
Del Monte Foods USA’s Seasonality DMFI’s sales have seasonality, with 1Q as the weakest quarter 1Q : 19-21% of FY (Back to school) 2Q : 28-30% of FY (Pipelining for Thanksgiving) 3Q : 26-28% of FY (Christmas) 4Q : 22-24% of FY (Easter) Lower sales also reflect on profit performance where DMFI hi
Slide 12: Del Monte Foods Strategy
Del Monte Foods Strategy 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, se
Slide 13: Innovation: New Del Monte Fruit & Chia
Innovation 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 Mangoes in Pineapple flavoured Chia Pears in Blackbe
Slide 14: Innovation: New College Inn Organic and Concentrated Broth
Innovation 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 Started Shipments July 2017 Started Shipments July
Slide 15: Marketing Highlights
Marketing Highlights Vegetable Fruit - Back to School Back to school programmes kicked off in July Extended reach and loyalty on Vegetables Featuring Fruit Cups and the new Fruit & Chia items Added 1Q Media for the first time since 2009 15
Slide 16: Foodservice Highlights
Foodservice Highlights Pineapple Fruit Cups National Trade Shows • Supporting re-launch with marketing activities including ads, third-party calling former customers, and direct mail Excellent representation at Supporting the K-12 shows for Colleges/ (Kindergarten-Grade 12) fruit Universities an
Slide 17: Del Monte Foods CEO
Del Monte Foods CEO Mr Gregory Longstreet is DMFI’s CEO effective 5 September 2017 Responsible for DMFI’s strategy, business and overall organisation Over 25 years of work experience in the food industry, having held critical commercial roles in sales, marketing and general management, includi
Slide 18: Del Monte Philippines (DMPI)
Del Monte Philippines (DMPI) DMPI is the Group’s 2nd largest subsidiary Comprises of sales in the Philippines and exports 1Q sales of US$131.4 million, up 14% versus the same quarter last year 18
Slide 19: Philippines
Philippines Market Share (#1) Market Share (#1) Market Share (#1) Canned Pineapple Canned Mixed Fruit Canned and Tetra RTD Juices Market Share (#1) Market Share (#1) Tomato Sauce Spaghetti Sauce Del Monte is the market leader across several categories Modern trade and convenience stores are grow
Slide 20: Philippines
Philippines Philippines is the largest market of subsidiary Del Monte Philippines, Inc (DMPI) Sales were up 5.1% in peso terms but down 1.5% in US dollar terms due to peso depreciation Sales growth was driven by expanded penetration and increased consumption of packaged pineapple fruit followi
Slide 21: Philippine Market Updates
Philippine Market Updates Continue to invest in consumption building and drive inclusion of Del Monte products in the weekly menu behind 360-degree campaigns across brands Encourage new twists on classic Level-up even simple recipes tomato recipes with Del Monte Empower working moms to go beyond fri
Slide 22: Philippine Market Updates (cont'd)
Philippine Market Updates (cont’d) Continue to drive user base expansion and more frequent consumption amongst young adults behind relevant functional benefits Highlight Fiber-Enriched variant benefit for daily detoxification Strengthen Fit ‘n Right equity for weight management with the only isotoni
Slide 23: Philippine Market Updates (cont'd)
Philippine Market Updates (cont’d) Ride on rapid expansion of QSRs and convenience stores with meal partnerships and menu creation with major accounts 23
Slide 24: Asia and the Middle East
Asia and the Middle East 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 pie: S&W is actively exploring this channel To drive growth, reali
Slide 25: S&W Asia and the Middle East
S&W Asia and the Middle East S&W branded business, the fastest growing market of subsidiary DMPI in Asia and the Middle East, was up strongly by 71% in 1Q Mainly due to strong sales of fresh pineapple on the back of improved supply Expansion into Turkey, a new market for packaged products. TUR
Slide 26: S&W Listing on Amazon Prime Now Singapore
S&W Listing on Amazon Prime Now Singapore Via S&W distributor HL Yong Listed items: S&W Pineapple Chunks, Pineapple Slices, Apple Cider Vinegar, Organic Apple Cider Vinegar, Orchard Fruit Cocktail, Sliced Beets, Whole Cranberry Sauce, Cream Style Corn, Blueberries, Garbanzo Beans, Pinto Beans, C
Slide 27: Singapore/Malaysia Launches
SINGAPORE/MALAYSIA - Launch of Organic Apple Cider Vinegar with in- store samplings to gain awareness, encourage trials and drive purchases MALAYSIA - Introduction of Pineapple Juices via night markets at areas such as Connaught and Setia Alam so as to target both the Chinese and Malay community 27
Slide 28: China and Pakistan Distribution
CHINA - S&W Pineapple Juices launch at retail channels eg Lawson, and accompanied by in-store displays as well as sampling activations to drive awareness and sales PAKISTAN – Retail distribution 28
Slide 29: FieldFresh India
FieldFresh India DMPL’s share of loss in the FieldFresh joint venture in India for 1Q higher at US$0.5m from US$0.3m Sales were down 2% in rupee terms due to lower sales for packaged food impacted by changes in tax brought about by the introduction of GST from the beginning of July Trained chefs
Slide 30: Del Monte Olives as Snacks
Del Monte Olives as Snacks Our trained chefs and promoters prepare and serve olives-based recipes to the guests in popular resto-bars. They interact with the guests and promote the brand (also supported by a tent- card placed on each table at the restaurant). 30
Slide 31: Digital Campaigns in India – Summer Escapades
Digital Campaigns in India – Summer Escapades Drive usage of Del Monte Dried and Del Monte Blueberry Mojito Popsicles Canned fruit range by giving consumers easy and indulging ways to use our products during summer 15 unique video recipes were created showcasing Del Monte as core ingredient Co
Slide 32: Sustainability
Sustainability Del Monte in the US has identified water, wastewater, electricity, natural gas, emissions and waste as the company’s top key environmental performance indicators regularly tracked by its owned production and distribution facilities The waste-to-energy project undertaken by Global
Slide 33: Highlights and Outlook
Highlights Sales grew on strong performance in Asia which offset lower sales in USA Gross margin increased to 20.7% Net income was US$0.7m reversing a net loss of US$7.0m in the same quarter last year Outlook The Group will be profitable for FY2018 on a recurring basis Major emphasis on re