Slide 1: 4Q and FY2016 Results
4Q and FY2016 Results 29 June 2016 Del Monte Pacific Limited
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 • Dividend • 4Q and FY2016 Results • Market Updates • Sustainability • Outlook 3
Slide 4: Notes to the 4Q FY2016 Results
Notes to the 4Q FY2016 Results 1. DMPL changed its financial year end to 30 April from 31 December to align with its US subsidiary, Del Monte Foods, Inc (DMFI). 2. Fourth quarter is 1 February to 30 April. 3. DMFI’s financial results consolidated in DMPL’s financials since acquisition on 18 February
Slide 5: DMPL 4Q FY2016 Group Results Summary
DMPL 4Q FY2016 Group Results Summary • Sales of US$520m down by 3% Sales % Change US -7 Philippines +6 (in peso terms +12) S&W +8 OEM Exports +25 FieldFresh India (equity accounted) +4 (in Rupee terms +13) All figures below without one-off items, and vs prior year quarter: • EBITDA of US$63.1m, up 5
Slide 6: DMPL FY2016 Group Results Summary
DMPL FY2016 Group Results Summary • Sales of US$2.3bn up 4% Sales % Change US +4 Philippines +6 (in peso terms +11) S&W +10 OEM Exports -9 FieldFresh India (equity accounted) +8 (in Rupee terms +16) All figures below without one-off items, and vs prior year: • EBITDA of US$202.1m, up 38% from US$146
Slide 7: Resumption of Cash Dividend
Resumption of Cash Dividend • Board declared a final dividend of 1.33 US cents (US$0.0133) per share representing 50% of net profit • Book Closure Date : To be confirmed • Payment Date : To be confirmed
Slide 8: Non Recurring Items
Non Recurring Items In US$ m 4Q FY16 FY16 Booked under Closure of Sager Creek North (16.3) (16.3) CGS and G&A Carolina plant expense SAP stabilisation (2.1) (13.2) G&A expense Sager Creek integration (2.9) (6.9) G&A and other expense Severance (0.3) (6.6) G&A expense Litigation related to working ca
Slide 9: DMPL 4Q FY2016 Results – As reported
DMPL 4Q FY2016 Results – As reported 4Q 4Q In US$m Chg (%) Comments FY 2015 FY 2016 Lower DMFI sales partly offset by higher Philippines Turnover 535.0 520.1 -2.8 and S&W Asia sales Improvement in productivity both in the cannery and Gross profit 106.8 110.9 +3.8 the plantation as well as initiative
Slide 10: 4Q FY2016 Turnover Analysis
4Q FY2016 Turnover Analysis Americas 76% 22% Asia Pacific 2% Europe Americas -6.9% • Unsuccessful government and OEM co-pack contract bids, and retail category contraction Asia Pacific +12.2% • Sales in the Philippines were higher by 6%, S&W by 8% and OEM Exports by 25% Europe +17.3% • Higher prices
Slide 11: DMPL FY2016 Results – As reported
DMPL FY2016 Results – As reported In US$m FY 2015 FY 2016 Chg (%) Comments Turnover 2,186.7 2,267.8 +3.7 Higher DMFI, Philippines and S&W Asia sales Prior year had one-off inventory step up cost of Gross profit 408.2 481.9 +18.1 US$44.3m. Absent that, recurring GP would still be up 7% due to better
Slide 12: FY2016 Turnover Analysis
FY2016 Turnover Analysis Americas 78% 20% Asia Pacific Europe 2% Americas +3.1% • Due to higher DMFI sales mainly due to the consolidation of Sager Creek. Without Sager Creek, DMFI sales were lower by 4% due to unsuccessful government contract bids Asia Pacific +6.6% • Sales in the Philippines were
Slide 13: USA
USA Market Share (#1) Market Share (#1) Market Share (#2) Packaged Core Vegetable Packaged Core Fruit Packaged Cut Tomato* Slowly declining canned category: Win through innovation, differentiation and product attributes DMFI had higher market shares in packaged vegetables and fruit by 1.1% and 0
Slide 14: Del Monte Foods USA
Del Monte Foods USA • DMFI’s 4Q sales down 6.5% to US$396m, but higher by 4% for the full year to US$1.8bn • Unsuccessful government and OEM co-pack contract bids • Higher gross margin for full year of 18.1% from 15.9% due to lower trade spend plus absence of purchase accounting inventory step up of
Slide 15: DMFI - Vegetable Campaign Continued in 4Q
DMFI - Vegetable Campaign Continued in 4Q Easter Promotion via Facebook and Pinterest -Supported with promoted posts on Facebook and paid influencers -3 winners received Del Monte gift baskets National TV Spot “Wait” aired in February & March on national network, cable and online video 15
Slide 16: 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) Market Share (#1) Tomato Ketchup Tomato Sauce Spaghetti Sauce Del Monte is the market leader across several attractive growing categ
Slide 17: Del Monte Philippines
Del Monte Philippines • Philippines sales in 4Q were up 12% in peso terms and 6% in US dollar terms, and in FY +11% and +6%, respectively • All key categories - packaged fruit, beverages and culinary - were up • Expanded user base and household penetration • Market continues to benefit from the resu
Slide 18: Del Monte Philippines (cont’d)
Del Monte Philippines (cont’d) Strong food service or institutional channel sales Del Monte Pineapple Del Monte Fruit Slush Juice Drink and Del in Easy Day stores Monte Ketchup for hotdogs in 7-11 18
Slide 19: Asia and Middle East
Asia and 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 Short supply of packaged
Slide 20: S&W Asia and the Middle East
S&W Asia and the Middle East • S&W branded business sales in Asia and the Middle East were +8% in 4Q and +10% in FY vs prior year period • Strong performance of both the fresh and packaged segments • China recorded strong growth in fresh, S&W’s 2nd time participating in Food & driven by distribution
Slide 21: S&W Asia and the Middle East (cont’d)
S&W Asia and the Middle East (cont’d) 240ml Canned Juices (Israel) - Fun advertising concept on Canned Juices via posts/ shoutouts on Facebook. S&W 100% Pineapple Juice, Pina Coolada, Apple Juice, and other exciting flavours were being creatively featured.
Slide 22: FieldFresh India
FieldFresh India • DMPL’s share of loss in the FieldFresh joint venture in India for 4Q was down to US$0.5m from US$0.6m in the prior year period; and for FY, share of loss was US$1.6m from US$2.1m • FieldFresh’s 4Q sales in Rupee terms were +13%, while for FY +16% • FieldFresh’s 4Q sales in US doll
Slide 23: FieldFresh India (cont’d)
FieldFresh India (cont’d) Mayonnaise Glass Bottle Range re-launch • Mayonnaise range expanded and revamped to tap into the fast growing mayo category • The new look has been designed to better reflect Del Monte’s brand personality – young, modern, fun, foodie • Bright, vibrant colours combined with
Slide 24: Sustainability
Sustainability • Climate Change - implemented measures to reduce the impact of El Niño during the dry months • Converted ingredients and packaging in USA to meet consumer preferences : non-BPA and non-GMO • Jose Y. Campos Centre, DMPL’s office in the Philippines, achieves LEED Silver Certification f
Slide 25: Debt Outlook
Debt Outlook Planned issuance of perpetual preference shares • In the Philippines to be listed on the Philippine Stock Exchange (PSE) • US$ perpetual preference shares • Launch in CY2016 subject to all regulatory approvals and market conditions • Received pre-effective approval from the Philippine S
Slide 26: Profit Outlook for FY2017
Profit Outlook for FY2017 • Barring unforeseen circumstances, the Group will continue to be profitable in FY2017 • In the short-to-mid term, DMPL plans to improve financial performance by strengthening its core business, leveraging procurement synergies and optimising G&A costs • The closure of the