Del Monte Pacific Limited · SGX:D03
Del Monte Pacific — H1 2009 Earnings Presentation
36 slides from Del Monte Pacific's earnings presentation, Aug 11, 2009
Slide 1: Second Quarter and First Half 2009 Results
Del Monte Pacific Limited Second Quarter and First Half 2009 Results 11 August 2009 1
Slide 2: Cautionary Note on Forward-looking Statements
Cautionary Note on Forward-looking Statements 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 forwa
Slide 3: Contents
Contents Executive Summary 2Q 2009 Results 1H 2009 Results Balance Sheet Dividend Business Updates Outlook and Action Plans 3
Slide 4: Executive Summary
Executive Summary 4
Slide 5: Executive Summary
Executive Summary Branded sales strong despite global slowdown, while unbranded export sales declined Philippines sales up 11% in Peso terms S&W total sales, including fresh pineapples, up 42% Fresh pineapple sales, including non-S&W brand, doubled FieldFresh successfully launched Del Monte
Slide 6: Executive Summary
Executive Summary Decline in Q2 net sales and net profit have slowed down significantly compared to Q1 results. vs 2008 Q1 Q2 Net Sales -16% -11% Net Profit -32% -9% 6
Slide 7: Executive Summary
Executive Summary Sales of US$78.9m, down US$9.7m • Lower export sales (US$4.3m) • Unfavourable currency translation of Philippine sales (US$5.5m) • Foregone sales of disposed China company (US$5.2m) • If not for the latter two, sales would have been up slightly Net profit of US$5.1m, down US$0.
Slide 8: 2Q 2009 Results
2Q 2009 Results 8
Slide 9: Second Quarter 2009
Second Quarter 2009 2Q 2Q Chg In US$m 2008 2009 (%) o Lower export sales o Currency translation impact from Turnover 88.6 78.9 -10.9 12% Peso depreciation o Foregone sales of China company Lower sales offset better pricing in Gross profit 20.9 19.5 -7.1 most markets and the favourable Peso depreciat
Slide 10: Peso/US$ Impact
Peso/US$ Impact 1Q 2Q 1H Peso/US$ rate in 2009 48.424 47.800 48.226 Peso/US$ rate in 2008 40.675 42.788 41.995 Y-o-Y depreciation 19% 12% 15% Impact on Net Profit 1Q 2009 2Q 2009 1H 2009 in US$m Asia Pacific (2.1) (1.4) (3.5) Europe & North 1.7 1.3 3.0 America Net impact (0.4) (0.1) (0.5) Near natur
Slide 11: 2Q Turnover Analysis
2Q Turnover Analysis Asia Pac -13% • Philippine sales grew 11% in By Market Peso but down 2% in US$ terms • Sales down in other Asia Pacific markets due to weak Asia Pac consumption E&NA • Foregone sales of China 76% company which was disposed 24% in September 08 E&NA -5% • Reduced volume of process
Slide 12: 2Q Margins
Gross margin Ï Better pricing in most markets 2Q Margins Favourable impact of Peso depreciation on the Group’s predominantly Peso costs % Margin Operating margin Ð 30 Lower gross profit 24.7 Higher selling and other 23.6 expense to support new products Net margin Ï 20 No more forex forward
Slide 13: 2Q Cash Flow Variance Analysis
2Q Cash Flow Variance Analysis (2Q: Apr 09 to June 09) Additional Interest 1Q09 Operations Working Tax Capex investment & others 2Q09 cap FieldFresh -US$108.1m -US$109.3m Net Debt Net Debt -3.4m +9.9m -2.5m -2.2m -1.9m -1.1m 13
Slide 14: 1H 2009 Results
1H 2009 Results 14
Slide 15: First Half 2009
First Half 2009 1H 1H Chg In US$m 2008 2009 (%) o Lower export sales o Currency translation impact from Turnover 160.3 139.3 -13.1 15% Peso depreciation o Foregone sales of China company Lower sales offset better pricing in Gross profit 36.6 35.0 -4.5 most markets and the favourable Peso depreciatio
Slide 16: 1H Turnover Analysis
1H Turnover Analysis Asia Pac -12% • Lower sales due to lower By Market consumer demand in export markets • Philippine sales up 15% in Asia Pac Peso terms but flat in US$ E&NA terms 76% • Foregone sales of China 24% company disposed in Sep 08 E&NA -17% • Lower volume of processed fruits and concentr
Slide 17: 1H Margins
Gross margin Ï Improved prices in most markets 1H Margins Favourable impact of Peso depreciation on the Group’s predominantly Peso costs % Margin Operating margin flat 30 Higher gross margin offset 25.1 higher other operating 22.9 expenses Net margin Ð 20 Higher interest expense 11.2 11.2 10
Slide 18: Balance Sheet
Balance Sheet Del Monte Quality
Slide 19: Working Capital Management
Working Capital Management No. of 2Q 2Q Change Comment Action Plan days 2008 2009 Higher tinplate and Delay tinplate tomato paste orders Inventory 84 139 55 inventory due to Sell excess tomato global slowdown paste Higher receivables Collect any overdue Receivable 48 63 15 from export amounts
Slide 20: Credit Standing
Credit Standing Loan utilisation only 55% of bank credit lines Outstanding loans of commercial banks grew 10.2% YoY in May ¾ Bank lending growth has remained healthy despite indications that banks have tightened their credit standards ¾ More stringent standards have allowed DMPL more access to c
Slide 21: Dividend
Dividend Dividend Book Closure Payment Date Dividend/ Payout Ratio Date Share Interim 25 Aug 2009 10 Sept 2009 US$0.0063 75 % US cents 2.68 2.56 FY 1H 2H 3 2 1.46 1.29 1.76 1 0.80 0.63 0 FY2005 FY2006 FY2007 FY2008 1H FY2009 21
Slide 22: Business Updates
Business Updates 22
Slide 23: Philippines
Philippines Sales remained strong in Peso terms, up 11% driven by continued growth of the successful Del Monte Fit ‘n Right juice drink in PET Volume Market Share ¾ Beverage +17% +4.6 pts ¾ Culinary +11% +1.3pts ¾ Food service +11% Continued to launch new innovative products including: ¾ Fit ‘n
Slide 24: Fit 'n Right Leads New Products
Fit ‘n Right Leads New Products New Flavors 24
Slide 25: Europe & N. America
Europe & N. America DM US increased their price to trade by 6% on 1 May 2009, third price increase since 2008 Reduced freight cost for US/Europe and Asian routes Narrowed the volume and net sales gap vs 2008 Q1 Q2 Volume -32.5% -21.4% Net Sales -29.5% -5.4% 25
Slide 26: S&W in Asia
S&W in Asia Sales up 42%, reflecting strong growth in fresh fruit and distribution of processed products such as tropical fruit into South Korea and Southern China Identified importer and distributor for Vietnam, sell-in starts 3Q09 Maiden campaign launched in Singapore starting with S&W Sweet
Slide 27: Outdoor Merchandising
Outdoor Merchandising • 125 panels x 2 weeks per campaign • 49.6% Reach and 10.8x Frequency • Starting Thursday,16 July 27
Slide 28: FieldFresh in India
FieldFresh in India Product contribution margins significantly improved to 14% from -1% on much better sales mix with contribution from the Del Monte branded processed foods business and the rationalised fresh export range under the FieldFresh brand. DMPL’s 41.6% share of loss, however, was slig
Slide 29: Brand Building in India
Brand Building in India “Get a taste of a legend” campaign geared towards building on the heritage of the Del Monte brand. Representative products from the entire range are presented to give an idea of the company’s product offering to consumers. Advertisements were released through different
Slide 30: Product Offering in India
Product Offering in India Fruit Drinks: Pineapple Fruit Drink, Pineapple Orange Fruit Drink and Four Seasons Mixed Fruit Drink Packaged Fruits: Pineapple Slices, Pineapple Tidbits, Fiesta Fruit Cocktail, Peach Halves, Prunes and Whole Kernel Corn Ketchup & Sauces: Tomato Ketchup and Tomato Chi
Slide 31: Market Presence in India
Market Presence in India Del Monte now available in 12 cities: Delhi Mumbai Bangalore Pune Jaipur Punjab Chandigarh Hyderabad Ahmedabad Jammu Dehradun Agra 31
Slide 32: Outlook and Action Plans
Outlook and Action Plans 32
Slide 33: Outlook and Action Plans
Outlook and Action Plans The Group has begun to bridge the earnings gap versus last year. Barring unforeseen circumstances, Management expects to at least maintain earnings at last year’s level. Key Initiatives to Growth: a) Continue to maximize the potential of our growing brands and markets.
Slide 34: Outlook and Action Plans
Outlook and Action Plans b) Maximizing product mix and profits in Exports. ¾ Optimisation of product mix with more profitable and higher demand products such as concentrate, fruit cups and tropical fruits. ¾ Reallocation to other profitable customers of excess supply resulting from softness in US an
Slide 35: Outlook and Action Plans
Outlook and Action Plans d) Improve funds management. ¾ Reduce working capital to bring down debt and interest expense. ¾ Control Capex and overhead expenses. 35
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