Del Monte Pacific Limited · SGX:D03
Del Monte Pacific — Q1 FY2015 Earnings Presentation
28 slides from Del Monte Pacific's earnings presentation, Sep 12, 2014
Slide 1: 1Q FY2015 Results
1Q FY2015 Results 12 September 2014 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 • Acquisition Financing Update • Notes to the Results • 1Q FY2015 Results • Market Updates • Sustainability/Awards • Outlook 3
Slide 4: Acquisition Financing Update
Acquisition Financing Update • Acquisition of Del Monte Foods, Inc (DMFI) completed on 18 February 2014 • Purchase price of US$1.675 bn (subject to working capital adjustments) • Financed by: – Debt: US$970m – Equity: US$705m (US$630m bridge loans, US$75m equity) • Bridge loans to be refinanced with
Slide 5: Notes to the 1Q FY2015 Results
Notes to the 1Q FY2015 Results 1. DMPL has changed its financial-year end to 30 April from 31 December to align with that of its recently acquired US subsidiary, Del Monte Foods, Inc (DMFI). The first quarter of the Company is now 1 May to 31 July. The next financial year-end will be on 30 April 201
Slide 6: DMPL 1Q FY2015 Results Summary
DMPL 1Q FY2015 Results Summary • Achieved sales of US$446m with US$340m contributed by Del Monte Foods, Inc (DMFI) • Sales of Del Monte in the Philippines and S&W branded products in rest of Asia rose 10% • Group net loss of US$21.9m primarily due to acquisition-related expenses • Group EBITDA of US
Slide 7: DMPL 1Q FY2015 Acquisition Expenses
DMPL 1Q FY2015 Acquisition Expenses DMPL’s consolidated bottom line was impacted by acquisition-related expenses amounting to US$19.5m net of tax 1. US$10m net of tax upward revaluation of inventory which corresponded to a higher cost of goods sold (CGS) • This was a carryover from the Transition Pe
Slide 8: DMPL 1Q FY2015 Results
DMPL 1Q FY2015 Results 1Q FY 1Q FY In US$m Chg (%) Comments 2014 2015 Consolidation of DMFI’s sales Turnover 119.4 445.6 nm of US$340m Gross profit 23.7 70.7 nm Same as above Impact of acquisition-related Operating profit 8.1 (12.1) nm expenses and higher G&A Higher interest expense from Finance inc
Slide 9: DMPL ex DMFI 1Q FY 2015 Results
DMPL ex DMFI 1Q FY 2015 Results* 1Q FY 1Q FY In US$m Chg (%) Comments 2014 2015 Higher Philippines and S&W Turnover 119.4 120.6 1.0 sales offset lower Exports sales Gross profit 23.7 26.1 9.8 Favourable costs Operating profit 10.0 10.2 2.0 Higher sales Finance inc/(exp) (2.0) (1.5) -25.0 Better fore
Slide 10: 1Q FY 2015 Turnover Analysis
1Q FY 2015 Turnover Analysis Americas 77% 21% Asia Pacific Europe 2% Americas nm • Due to the consolidation of DMFI’s results with sales of US$340m Asia Pacific +14.1% • Higher sales in the Philippines under Del Monte and in Asia (both packaged and fresh) under S&W Europe -22.8% • Lower sales of pin
Slide 11: Del Monte Foods USA
Del Monte Foods USA • 1Q sales decreased by 1% to US$339.5 million trending better coming from the Transition Period (Feb-Apr 2014) sales decline of 17% sales were affected by inherited higher product pricing and changes to product labels • Normalised gross profit down 7% to US$64.3 million whil
Slide 12: Del Monte Foods USA
Del Monte Foods USA DMFI has also embarked on business development and cost savings initiatives. • Plans to develop the ethnic market in the US, mainly leveraging off DMPL’s products in Asia. The Group has already identified products to be exported to the US. Non-Hispanic Whites projected to be a mi
Slide 13: Del Monte Foods USA
Del Monte Foods USA • On the cost-savings front, one of the areas identified was the outsourcing of DMFI’s back office functions to the Philippines in February 2015. The contract for this between the service provider and DMFI has been signed, and cost savings is estimated to be significant. • DMFI’s
Slide 14: Del Monte Foods USA
Del Monte Foods USA Del Monte Fruit Burst Squeezers – In Store Sampling Summer Core Fruit 10 for $10 Promotions 14
Slide 15: Del Monte Foods USA
Del Monte Foods USA Del Monte Fruit Burst Squeezers - Sampling 15
Slide 16: Del Monte Foods USA
Del Monte Foods USA Start Ship: New Product - Introducing College Inn Garden Vegetable 32oz Broth 16 June 2014 • Provides a relevant flavor in a consumer Shopper / preferred form Consumer • Lower sodium than the leading vegetable broth • Drives increased category dollars Customer • Builds baskets 16
Slide 17: Products - USA
17 _— Life gets Better Del Monte in the United States < 9) =) I 12) p=) O =) aS) fe) = oO
Slide 18: Del Monte Philippines
Del Monte Philippines • 1Q sales +7% in US Dollar terms and +12% in Peso terms robust sales for Packaged Fruit behind continuous builds for more frequent consumption resurgent growth for the Culinary segment, in particular the profitable Tomato Sauce, Spaghetti Sauce and Pasta categories Del M
Slide 19: Del Monte Philippines
Del Monte Philippines Deliciously-nutritious meal with pineapples New 1-Liter carton format 19
Slide 20: Del Monte Philippines
Del Monte Philippines New pineapple juice fortified with calcium 20
Slide 21: Products - Philippines
W oO = a = = oO I Wn =) O S ae) Oo _ oO Life gets Better
Slide 22: S&W Asia
S&W Asia • S&W branded business, both fresh and packaged, delivered another set of strong results with sales +24% • continued expansion in Japan • good performance in Korea and • business development in the Philippines In-store dress up of S&W fresh pineapple display Saba Fish sampling in China feat
Slide 23: S&W Asia
S&W Asia S&W’s Play & Win Facebook contest - Participants have to download the “Who Can’t Draw” game application and play the game by drawing an array of S&W products within a certain time frame 23
Slide 24: Products – Asia through S&W
Products – Asia through S&W 24
Slide 25: FieldFresh India
FieldFresh India • DMPL’s share of loss in the FieldFresh joint venture in India was at its lowest since 2009 at US$0.6 million from US$1.5 million in the prior year period • FieldFresh’s sales +27% with the Del Monte branded packaged sales +22% while Fresh exports +53% New ready to cook range of go
Slide 26: Products - India
Products - India Del Monte in India 3 26 Life gets Better 2 eee
Slide 27: Sustainability/Awards
Sustainability/Awards • Won the Best Investor Relations and Best Annual Report Awards – both bronze for the mid-cap category, given by the Singapore Corporate Awards last 15 July 2014 Since the awards began in 2006, only 8 companies have received 4 different awards and DMPL is one of them • DMPL n
Slide 28: Outlook for FY2015
Outlook for FY2015 • Expects to generate higher earnings on a recurring basis in FY2015 as the Group drives both topline growth across its key markets in the USA, the Philippines and rest of Asia, optimises synergies and actively manages cost • As majority of DMFI’s re-valued inventory will be sold