Del Monte Pacific Limited · SGX:D03
Del Monte Pacific — 1Q FY2023 Earnings Presentation
36 slides from Del Monte Pacific's earnings presentation, Sep 8, 2022
Slide 1: Del Monte Pacific 1Q FY2023 Results
DEL MONTE PACIFIC 1Q FY2023 RESULTS 8 September 2022
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 FY2023 Results ▪ Market Updates ▪ Sustainability ▪ Outlook 3
Slide 4: Notes to the Results
Notes to the Results ▪ 1Q is from 1 May to 31 July 2022 ▪ DMPL owns 87% of Del Monte Philippines, Inc. and 93.6% of Del Monte Foods, Inc. DMPL recognizes a 13% and 6.4% non-controlling interest (NCI) in these two subsidiaries, respectively. These comprise the NCI line in the P&L. Net profit/(loss) i
Slide 5: 1Q FY2023 Highlights
1Q FY2023 Highlights ▪ Sales decreased by 1% to US$456.6m as higher sales in the USA and international markets led by S&W brand were offset by lower sales in the Philippines ▪ US subsidiary Del Monte Foods (DMFI) redeemed its 11.875% Senior Secured Notes to secure a much lower interest rate and incu
Slide 6: Outlook
Outlook ▪ Strengthen our core business, expand the product portfolio, in response to consumer preference for health and wellness, and grow our branded business ▪ More product availability through a more efficient supply chain, better distribution and expanded sales channels including e-commerce ▪ DM
Slide 7: 1Q FY2023 Results Summary
1Q FY2023 Results Summary ▪ Sales of US$456.6m, -1% Sales % Change Americas +1 Philippines -18 (in peso terms -10) International +16 India (equity accounted) +13 (in rupee terms +19)* *Del Monte Foods Pvt Ltd (India) discontinued the fresh business. Del Monte packaged business sales were up 41% in U
Slide 8: 1Q FY2023 One-Off Item
1Q FY2023 One-Off Item ▪ In May 2022, DMFI raised US$600m through a 7-year Term Loan B facility at Adjusted SOFR, with a floor of 0.5% plus 4.25% p.a., to primarily redeem the US$500m Senior Secured Notes which had an interest rate of 11.875% p.a. ▪ The much lower interest rate, currently at 6.45% p
Slide 9: 1Q FY2023 Results – Reported Basis
1Q FY2023 Results – Reported Basis 1Q 1Q In US$m Chg (%) Comments FY2022 FY2023 Higher sales in USA and international markets offset by Turnover 462.1 456.6 -1.2 lower sales in the Philippines Gross profit 133.4 131.7 -1.3 Same as above Gross margin (%) 28.9 28.9 0.0 Price increases covered higher c
Slide 10: 1Q FY2023 Turnover Analysis
1Q FY2023 Turnover Analysis 2% Americas 32% Asia Pacific 66% Europe Americas +1.2% ▪ Driven by higher branded retail sales which grew by 2.3% on the back of higher sales of canned vegetable, tomato, broth and Joyba bubble tea ▪ In Americas, branded retail accounted for 78% of total sales Asia Pacifi
Slide 11: Market Updates
Del Monte MARKET UPDATES
Slide 12: Del Monte Foods USA 1Q FY2023
Del Monte Foods USA 1Q FY2023 ▪ DMFI’s 1Q sales were US$302.4m or 66% of Group turnover ✓ Sales up 1.5% on the back of higher retail branded sales of canned vegetable, tomato, broth and Joyba bubble tea ✓ Del Monte canned vegetable, which had the highest contribution to branded retail sales, saw a 3
Slide 13: USA Market Shares
USA Market Shares Market Share Market Share Market Share Canned Vegetable (#1) Canned Fruit (#2) Fruit Cup Snacks (#2) Market Share Market Share Canned Tomato (#3) Broth (#2) ▪ Del Monte brand performed well in its traditional canned categories as consumers continue to reach for trusted brands and w
Slide 14: USA 1Q Marketing Highlights
USA 1Q Marketing Highlights JOYBA Expansion – National Fruit Cup Snacks Campaign Launch Best Friends Day Kickoff Retailer Media Social Media with Influencers Gimbal Digital Programmatic w/Store locator The FeedFeed website, social media, and weekly email 14
Slide 15: USA Outlook: Recession Roadmap
USA Outlook: USARecession Roadmap 1Q Foodservice Consumer Category Pricing Innovation Channels • Consumers • History suggests • Despite higher • We’ve • Product anticipate Del Monte’s core prices, Del Monte strengthened our innovation has increased categories should products offer a portfolio by fue
Slide 16: USA Consumption, Outlook, Foodservice
USA Consumption USA 1Q Outlook Foodservice 16
Slide 17: USA Consumption, Outlook, Foodservice
USA Consumption USA 1Q Outlook Foodservice 17
Slide 18: USA Portfolio Ready for Recession
USA Portfolio USAReady for Recession 1Q Foodservice t 18
Slide 19: USA Portfolio Offers Great Value
USA Portfolio USAOffers Great Value 1Q Foodservice t t t 19
Slide 20: USA Pricing Strategy
USA PricingUSA Strategy 1Q Foodservice t t t 20
Slide 21: USA Resilient Performance
USA Resilient USAPerformance 1Q Foodservice t t • Topline Growth is intact – Trusted Brand Portfolio is on-point with consumer behavior – Multi-channel white space for growth – Club, Discount, Mass, Natural – Pipeline of new products and new brands in tiered portfolio – 2 rounds of successful pricin
Slide 22: USA Kitchen Basics Acquisition
USA Kitchen Basics USA Acquisition 1Q Foodservice ▪ In August 2022, DMFI acquired the intellectual property of the Kitchen Basics brand and its extensive t inventory of conventional and organic stocks and broths from McCormick & Company for US$99m. tThe purchase includes US$17m of inventory (with ma
Slide 23: DMPL ex-DMFI 1Q FY2023
DMPL ex-DMFI 1Q FY2023 ▪ Sales of US$173.7m, down 5%, as higher international sales were offset by lower Philippines sales. ▪ International markets led by S&W brand, delivered strong growth of 16% to sales of US$85.6m. ✓ Fresh sales grew 20% driven by stronger demand particularly in North Asia and b
Slide 24: Philippines Market Shares
Philippines Market Shares -2.1pts -7.0pts Market Share Market Share Market Share Packaged Pineapple (#1) Canned Mixed Fruit (#1) RTD Juices ex foil pouches (#1) -1.0pt -0.7pt Market Share Market Share Tomato Sauce (#1) Spaghetti Sauce (#1) Overall, Del Monte retained market leadership across core ca
Slide 25: August Volume Performance
August Volume Performance DMPL ex DMFI Philippine Fresh Processed Market International International 4.6m 2.3m 1.5m 0.8m +16% vs Plan +2% vs Plan +1% vs Plan +9% vs Plan -30% vs FY22 +33% vs FY22 +44% vs FY22 +17% vs FY22 In ‘000 raw cases while Fresh is at 12kg boxes ✓ Philippine market was ahead o
Slide 26: Philippines Beverage Recovery Plan
Philippines Beverage Recovery Plan Compelling Communication Campaign FIT N’ RIGHT (FNR): Relaunch of Original Line 100% Pineapple Juice: “ALL IN, ALL OUT” • Drive superiority vs. other RTD juices and recover lapsers • New campaign harping on “with immunity PLUS BROMELAIN and ANTIOXIDANTS” • Regain F
Slide 27: Philippines Marketing – Low Price Points & Good Value Packs
Low Price Points Philippines Marketing – & Good Value Packs An excellent assortment of value for money… LOW CASH OUTLAY PACKS VALUE BUNDLES TOMATO SAUCE and PASTE SPAGHETTI SAUCE TOMATO SAUCE SPAGHETTI SAUCE 1kg Singles MP Buy 2, Get 1 USD 2.28 90g 115g USD 0.21 USD 0.30 250g USD 0.55 500g Singles M
Slide 28: Philippines Foodservice
Philippines Foodservice Regaining vitality as economy opens Sustained strong momentum Expanded Footprint in • 1Q sales grew by 20%; now at 83% of NEW National Account Business pre-pandemic level. • Gross margin is in line with company average and better than past 5 years. • Operating profit rose 27%
Slide 29: Philippines Convenience
Philippines Convenience Convenience stores have re-opened Recovery seen at the start of FY2023 Increase in On-Hand Distribution to influence consumption • 1Q sales grew by 39%. Sales are now at 66% of pre-pandemic level. • 3,781 outlets now open, higher vs pre-pandemic by 474 new doors. • Philippine
Slide 30: Philippines - Innovation
Philippines - Innovation Innovation now accounts for 8% of total Philippine Sales Combined addressable market of these products is US$3.5bn Potato Crisp Flavor Range: Original, Spicy; Del Monte Vinamilk Range New in FY20023: Cheese, BBQ, 20g Flavor Range: Fresh Milk; Wintermelon Milk Tea; IQ Smart C
Slide 31: International - Innovation
International - Innovation Innovation now accounts for 15% of Total International Sales Total sales potential of these products is US$100m NICE FRUIT Frozen Snacks Japan Middle East Japan Europe CANADA US Saudi Singapore China Hongkong 7-11 McDonald’s 7-Eleven Lamex/KFC McDonald’s Del Monte Arabia P
Slide 32: Del Monte India
Del Monte India 1Q showcases strong Business Performance Driven by strong sales delivery backed by improved margin as well as focus on cost control measures and sourcing efficiencies. ▪ Del Monte India’s sales in 1Q performed strongly, up 19%, from sustained growth across channels and categories. ✓
Slide 33: S&W Fresh Overview
S&W Fresh Overview ▪ Our high quality, premium MD2 fresh pineapple makes us the largest fresh pineapple exporter to China, with 53% volume share. ▪ One of the 3 biggest fresh pineapple exporters to Japan, South Korea and the Middle East. ▪ Introduced last year, the naturally-ripened extra sweet S&W
Slide 34: Sustainability
Sustainability Sustainability Report Better Nutrition Waste Reduction Net Zero Emissions DMPL published its 78% of DMPI Reduced material DMPI’s pineapple 5th Sustainability products provide usage of rigid PET operations were Report and better nutrition bottles and caps by independently articulated i
Slide 35: Sustainability
Sustainability Nourishing Nourishing Nourishing Nourishing Employees Growers the Planet Communities Increased the Developed GROW Maximized Provided over percentage of Collaborative to packaging lines to 100 tons of food to: women and BIPOC bring organic enable multipack in Senior produce growers opt
Slide 36: Outlook
Outlook ▪ Strengthen our core business, expand the product portfolio, in response to consumer preference for health and wellness, and grow our branded business ▪ More product availability through a more efficient supply chain, better distribution and expanded sales channels including e-commerce ▪ DM