Slide 1: 2Q and 1H FY2016 Results
2Q and 1H FY2016 Results 9 December 2015 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 • Notes to the Results • 2Q FY2016 Results • 1H FY2016 Results • Market Updates • Outlook 3
Slide 4: Notes to the 2Q FY2016 Results
Notes to the 2Q FY2016 Results 1. Effective 1 May 2014, DMPL changed its financial year end to 30 April from 31 December to align with that of its US subsidiary, Del Monte Foods, Inc (DMFI). The second quarter of the Company is 1 August to 31 October. 2. DMFI’s financial results have been consolidat
Slide 5: DMPL 2Q and 1H FY2016 Results Summary
DMPL 2Q and 1H FY2016 Results Summary • Turnaround performance achieved with Group recurring net profit of US$18m for 2Q and US$6m for 1H after two years of losses attributed to acquisition and transition-related expenses since the Group announced the purchase of Del Monte Foods (DMFI) in October 20
Slide 6: DMPL 2Q FY2016 Results
DMPL 2Q FY2016 Results 2Q FY 2Q FY In US$m Chg (%) Comments 2015 2016 Turnover 548.0 658.3 +20.1 Higher DMFI, Philippines and S&W Asia sales Prior year had one-off inventory step up of US$20m. Gross profit 114.7 153.6 +33.9 Absent that, recurring GP would still be up 14% due to better sales mix and
Slide 7: Non Recurring Item
Non Recurring Item • In 2Q FY2016, the Group booked a one-off retirement plan amendment of +US$39.4m. • This was due to DMFI amending one of its post employment benefits replacing its retiree medical and dental benefits to contributions to a Health Reimbursement Account • Such amendment requires the
Slide 8: DMPL ex DMFI 2Q FY 2016 Results
DMPL ex DMFI 2Q FY 2016 Results 2Q FY 2Q FY In US$m Chg (%) Comments 2015 2016 Higher Philippines and S&W Asia sales offset by Turnover 128.5 129.0 +0.4 lower export sales due to constrained pineapple supply from the El Niño weather pattern Gross profit 29.9 34.8 +16.4 Better sales mix and cost opti
Slide 9: 2Q FY 2016 Turnover Analysis
2Q FY 2016 Turnover Analysis 82% Americas Asia Pacific 17% Europe 1% Americas +24.1% • Due to higher DMFI sales mainly due to the consolidation of recently acquired Sager Creek. Without Sager Creek, Americas sales still grew by 9% Asia Pacific +3.7% • Higher sales in the Philippines of 12% in peso t
Slide 10: DMPL 1H FY2016 Results
DMPL 1H FY2016 Results 1H FY 1H FY In US$m Chg (%) Comments 2015 2016 Turnover 993.6 1,131.1 +13.8 Higher DMFI, Philippines and S&W Asia sales Prior year had one-off inventory step up of US$38m. Gross profit 185.5 247.3 +33.4 Absent that, recurring GP would still be up 11% due to better sales mix an
Slide 11: DMPL ex DMFI 1H FY 2016 Results
DMPL ex DMFI 1H FY 2016 Results 1H FY 1H FY In US$m Chg (%) Comments 2015 2016 Higher Philippines and S&W Asia sales offset by Turnover 249.0 238.9 -4.1 lower export sales due to constrained pineapple supply from the El Niño weather pattern Gross profit 55.9 60.1 +7.5 Better sales mix and cost optim
Slide 12: 1H FY 2016 Turnover Analysis
1H FY 2016 Turnover Analysis 81% Americas 18% Asia Pacific Europe 1% Americas +17.5% • Due to higher DMFI sales mainly due to the consolidation of recently acquired Sager Creek. Without Sager Creek, Americas sales still grew by 3% Asia Pacific +1.1% • Higher sales in the Philippines of 11% in peso t
Slide 13: Del Monte Foods USA
Del Monte Foods USA • DMFI’s 2Q sales including Sager Creek grew by 25% to US$542m • Excluding Sager Creek, DMFI’s base sales grew by 13% Before After • In 1Q, there was tight supply as a result of higher than anticipated positive consumer response from the corrective marketing actions implemented e
Slide 14: Del Monte Foods USA (cont'd)
Del Monte Foods USA (cont’d) Super Fruit Cup Marketing at Target Stores Mobile Cartwheel Offer Target.com Feature and Video with Vitamin Bee Exclusive Vitamin Bee Partnerships & Video on Target TV/Channel Red USA Today Magazine Print Ad 14
Slide 15: Del Monte Foods USA (cont'd)
Del Monte Foods USA (cont’d) Super Fruit Cup Marketing at Walmart Stores Targeted banner ads on In-Store Sampling at 500 stores Walmart.com WMTV on 1,546 Endcaps National Print “outsert” and Print Ads Co-Op Direct Mail 15
Slide 16: Del Monte Foods USA (cont'd)
Del Monte Foods USA (cont’d) First concentrated effort to market to Hispanics! Good success with Hispanic retailers and gained new distribution • Demo to stores • Weekend Prior to • BTS Immunization Halloween and Dia de la Sponsorship Muertos event with Program • Custom Hispanic Del custom Haunted •
Slide 17: Del Monte Foods USA (cont'd)
Del Monte Foods USA (cont’d) • Walmart has expanded distribution of College Inn from 25% to 67% of stores in the last 6 months • New shelf arrangement creates a College Inn “brand block,” making it easier for shoppers to find College Inn products • Marketing support for College Inn includes Walmart-
Slide 18: Del Monte Philippines
Del Monte Philippines • Philippines sales in 2Q were up 12% in peso terms and 7% in US dollar terms • Expanded penetration and increased consumption for juices, tomato-based sauces and packaged pineapple products • Continued promotion of pineapple juice health benefits Del Monte Heart Smart Orange J
Slide 19: Del Monte Philippines (cont'd)
Del Monte Philippines (cont’d) • New in-house PET plant has started commercial operations in November 2015 • In-house production to improve margins for DMPL’s Fit ‘n Right juice drinks which used to be outsourced • The plant also includes a Technical and R&D Centre Facade of the new PET plant New R&
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 in 2Q rose 25% • Due to strong fresh pineapple exports, which offset softness in the packaged segment as a result of constrained supply Fresh pineapple sampling in Taiwan Oktoberfest promotion for S&W Sauerkraut in
Slide 21: S&W Asia and the Middle East (cont'd)
S&W Asia and the Middle East (cont’d) Retail product display in UAE Displays of 1L Tetra Pak in Singapore 21
Slide 22: S&W Asia and the Middle East (cont'd)
S&W Asia and the Middle East (cont’d) Advertising of S&W 100% Juices in Israel via creative posts/ shoutouts on Facebook 22
Slide 23: FieldFresh India
FieldFresh India • DMPL’s share of loss in the FieldFresh joint venture in India for 2Q was down to US$0.4m from US$0.6m in the prior year period • FieldFresh’s 2Q sales +13% in rupee terms and +6% in US dollar terms • Improved performance in juice and the culinary segment • Maintained positive EBIT
Slide 24: FieldFresh India (cont'd)
FieldFresh India (cont’d) Digital Campaign on Italian Category To highlight the Del Monte pasta range as well as the versatility of pasta by getting influencers (food bloggers) to create a variety of branded content • Bloggers required to make an original/authentic pasta • Indian Celebrity Chef Ranv
Slide 25: FieldFresh India (cont'd)
FieldFresh India (cont’d) Del Monte Delightful Moments - Diwali gift packs of premium products 25
Slide 26: Profit Outlook for FY2016
Profit Outlook for FY2016 Barring unforeseen circumstances, the Group expects to sustain profits in the remainder of the year and return to profitability in FY2016 USA : • Sustain base business growth • Accelerate foodservice growth and enter new vegetable segments through Sager Creek Asia : • Conti
Slide 27: Cash Flow and Debt Outlook
Cash Flow and Debt Outlook 1. Stronger cash flow expected in 2H FY2016 • 1H has seasonally lower sales but high working capital needs due to production season peaking in October • The opposite happens in 2H with seasonally stronger sales due to Thanksgiving, Christmas and Easter, with lower working