Slide 1: Third Quarter and Nine Months 2010 Results
Del Monte Pacific Limited Third Quarter and Nine Months 2010 Results 30 October 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 3Q 2010 Results 9M 2010 Results Balance Sheet Business Updates Outlook 3
Slide 4: Executive Summary
Executive Summary • Recorded quarterly profit of US$3.3m, reversing a US$1.7m loss for the same period in 2009 • Sales grew 16%, driven by the Philippines and export markets • Gross margin improved to 21% from 14% • Productivity improvement, cost containment and business building initiatives contrib
Slide 5: 3Q 2010 Results
3Q 2010 Results
Slide 6: Third Quarter 2010
Third Quarter 2010 3Q 3Q Chg In US$m Comments 2009 2010 (%) o Higher Philippine sales o Robust growth in exports of processed Turnover 76.3 88.4 +15.8 and fresh fruit o Better sales mix Higher sales, cost containment efforts and Gross profit 10.4 18.9 +80.9 productivity improvement Operating profit
Slide 7: 3Q Turnover Analysis
3Q Turnover Analysis By Market Asia Pacific +19.9% • Philippine market sales grew 19% due to strong Others performance of tomato-based 12% products, canned juices and Asia processed fruits Pacific E&NA +15.4% • Higher sales in North America 63% E&NA due to better prices 25% Others -0.4% • Sales grew
Slide 8: 3Q Margins
3Q Margins Gross margin Higher sales, better sales mix, cost containment efforts and productivity improvement % Margin Operating margin 30 Higher gross profit 21.4 Net margin Robust growth of operating profit 20 13.7 10 6.6 3.8 0.5 -2.3 0 Gross Profit Operating Profit Net Profit 3Q09 3Q10 8
Slide 9: 3Q Cash Flow Variance Analysis
3Q Cash Flow Variance Analysis Additional Investment Repayment Working in of Interest & 3Q09 Operations Cap Tax Capex FieldFresh Dividend Borrowings Others 3Q10 -US$92.0m -US$83.3m Net Debt -5.5m Net Debt -US$88.6m -15.8m Net Debt +38.9m -17.2m -8.5m +36.0m -32.0m +12.8m
Slide 10: 9M 2010 Results
9M 2010 Results
Slide 11: Nine Months 2010
Nine Months 2010 9M 9M Chg In US$m Comments 2009 2010 (%) o Higher Philippine sales Turnover 215.6 239.4 +11.1 o Robust growth of fresh business o Better sales mix The high turnover was impacted by higher Gross profit 45.4 46.3 +1.8 costs. Higher selling & other expenses to support Operating profit
Slide 12: 9M Turnover Analysis
9M Turnover Analysis By Market Asia Pacific +11.2% • Philippine sales grew 15% due to strong sales of Others processed fruits and tomato based products 14% Asia E&NA +6.2% • Higher sales in North America Pacific due to better prices 64% E&NA Others +19.5% • Driven by robust growth of the fresh busin
Slide 13: 9M Margins
9M Margins Gross margin High turnover but offset by higher costs Operating margin Lower gross profit % Higher G&A and other Margin operating expenses 30 Net margin 19.3 Reduced operating 21.1 income 20 10 7.4 3.8 3.4 0.5 0 Gross Profit Operating Profit Net Profit 9M09 9M10 13
Slide 14: Balance Sheet
Balance Sheet 14
Slide 15: Working Capital Management
Working Capital Management Improved working capital position 3Q 3Q No. of days Chg Comment 2009 2010 Actively managed inventory levels for various inputs; Inventory 133 105 -28 stricter implementation of inventory policies Better collection of Receivable 41 37 -4 receivables Actively managed payment
Slide 16: Credit Standing
Credit Standing As of 30 September 2010 Credit utilisation: 39% of bank credit lines More banks would like to offer credit facilities Interest rates are prime rates Loan Mix: 53% Peso and 47% US$ to optimise natural hedge 76% Short term and 24% Long term Gearing and Coverage Ratios Net debt equity r
Slide 17: Business Updates
Business Updates 17
Slide 18: Philippines
Philippines 3Q sales grew 19% due to strong performance of tomato-based products, canned juices and processed fruits Higher volume, prices and better sales mix Recently launched the Del Monte Fit ‘n Right tea in two flavours - peach and lemon. This extends the popular Fit ‘n Right brand from juice d
Slide 19: S&W in Asia
S&W in Asia S&W Processed sales were down due to lower sales in Korea. On a year to date basis, sales were flat S&W branded sales, both processed and fresh, rose 43% for the nine- month period 19
Slide 20: FieldFresh in India
FieldFresh in India 3Q sales of US$6 million, up 65% while gross profit more than doubled to US$0.6 million Much better sales mix with the contribution of the Del Monte branded processed foods business now at 65% of sales Del Monte branded sales grew threefold over the same period last year. 3Q saw
Slide 21: FieldFresh in India (cont'd)
FieldFresh in India (cont’d) Efforts in distribution expansion continue with doubling of outlets to about 30,000 across 30 cities as against 15,000 outlets in the beginning of the year Launched a new mustard sauce, Del Monte Mustard NOW!, in a squeezy pack, expanding the culinary line. Del Monte Mus
Slide 22: Outlook
Outlook 22
Slide 23: Outlook
Outlook Our first half cost containment measures, including fixed cost management, and business building initiatives have helped to restore profitability in the second half of the year We expect to reap more benefits in 2011 as our new pineapple planting cycles begin to produce results, and other pr
Slide 24: Outlook (cont'd)
Outlook (cont’d) The termination of the supply contract in Europe has created new opportunities for the Group in the processed business The Del Monte business in India and S&W in Asia Pacific, on the other hand, are long term growth investments and should provide the next stage of expansion and dive
Slide 25: 1M EE tao,
1M EE tao,