Del Monte Pacific Limited · SGX:D03
Del Monte Pacific — 9M 2008 Earnings Presentation
15 slides from Del Monte Pacific's earnings presentation, Nov 11, 2008
Slide 1: Third Quarter and Nine Months 2008 Results
Del Monte Pacific Limited Third Quarter and Nine Months 2008 Results 11 November 2008
Slide 2: Executive Summary
2 Executive Summary • Sales for 3Q08 & 9M08 both rose 41% YoY • Biggest driver coming from the Philippines • Gross margin for 3Q08 and 9M08 increased to 21.8% and 22.5%, respectively • Strong operating income, up 92% in 3Q08 and 43% in 9M08, more than offset FX hedge • Net income grew by 32% in 3Q,
Slide 3: Third Quarter 2008
Third Quarter 2008 In US$m 3Q 2007 3Q 2008 Chg (%) Comments Largely driven by the Philippine Turnover 70.0 98.8 +41.2 market. Also higher sales in other Asia Pacific, Europe and North America Higher sales, productivity Gross profit 13.9 21.6 +55.8 enhancement, cost saving programs, and better prices
Slide 4: 3Q Turnover Analysis
3Q Turnover Analysis By Market Asia Pac +55% Higher sales in Philippines, esp. Fit ‘n Right drink, mixed fruit and tomato-based product Asia Pacific 76% Higher sales of imported Del Monte products in Asia Pacific Europe and E&NA +9% Higher sales of fruits in plastic North America 24% cups and better
Slide 5: 3Q Margins
3Q Margins Productivity enhancements Cost saving programs Better prices % Margin 30 Higher gross profit 21.8 19.8 FX hedge and share of loss in Bharti Del 20 Monte India 11.0 8.1 10 6.7 6.3 0 Gross Profit Operating Profit Net Profit 3Q07 3Q08
Slide 6: 3Q PBIT Variance Analysis
3Q PBIT Variance Analysis Share of Mainly due Stronger Higher A&P Build-up costs loss in to higher sales in Bharti Del Philippines FX hedge Monte India -1.1m 3Q07 -1.5m 3Q08 -1.0m -2.5m +7.7m US$ 5.7m US$ 7.3m PBIT PBIT Gross Distribution General Share of Other Op Profit & Selling & Admin. joint Inc
Slide 7: 3Q Cash Flow Variance Analysis
3Q Cash Flow Variance Analysis 2Q08 3Q08 Operations Capex Additional Dividend Exchange investment in & Others -US$54.0m Bharti Del Monte India +4.6m -7.9m -US$66.8m Net Debt -1.4m -8.7m +0.6m Net Debt
Slide 8: Nine Months 2008
Nine Months 2008 In US$m 9M 2007 9M 2008 Chg (%) Comments Broad-based growth in all major Turnover 183.5 259.1 +41.2 markets Gross profit 40.3 58.2 +44.6 Higher sales Better gross profit, slightly offset by Operating profit 20.1 28.9 +43.3 higher A&P, business building costs Includes US$3.5m FX hedg
Slide 9: 9M Turnover Analysis
By Market 9M Turnover Analysis Asia Pac +53% Higher sales in Philippines, esp. Fit ‘n Right drink, mixed fruit and tomato-based product Asia Pacific 75% Higher sales of imported Del Monte products in Asia Pacific Europe and E&NA +15% Gains in market share and North America 25% distribution coverage
Slide 10: 9M Margins
9M Margins Higher prices and proactive cost % Margin management 30 Higher gross profit 22.0 22.5 slightly offset by A&P and G&A costs FX hedge and share 20 of loss in Bharti Del Monte India 11.0 11.1 8.3 10 6.9 0 Gross Profit Operating Profit Net Profit 9M07 9M08
Slide 11: 9M PBIT Variance Analysis
9M PBIT Variance Analysis Share of Mainly due Higher A&P Build-up costs loss in Stronger to higher in Bharti Del sales FX hedge Philippines Monte India -4.8m -4.4m 9M08 9M07 -2.7m -3.9m +17.9m US$ 20.6m US$ 22.7m PBIT PBIT Gross Distribution General Share of Other Op Profit & Selling & Admin. joint
Slide 12: Peso/US$ Impact
Peso/US$ Impact The Peso appreciated by 2% against the US$ for 3Q08 vs 3Q07, but depreciated by 5% for 3Q08 vs 2Q08 2Q 3Q 9M Peso/US$ rate in 2008 42.788 45.046 43.262 Peso/US$ rate in 2007 47.295 45.777 47.456 YoY appreciation 10% 2% 9% QoQ depreciation (3Q08 vs 2Q08) -5%
Slide 13: Peso/US$ Impact
Peso/US$ Impact YoY, Peso appreciated QoQ, Peso depreciated Favourable to Asia Pacific as Unfavourable to matured forward Philippine Peso sales translated using contracts strong Peso/US$ rate generate higher 3Q -US$ 2.2m sales in US$ terms 9M -US$ 3.3m 3Q +US$ 1.0m 9M +US$ 3.4m Unfavourable to trans
Slide 14: Cost Management
Cost Management DMPL remains vigilant • Conserve input materials and energy • Source alternative low cost suppliers • Process outsourcing • Reformulate product where necessary and possible • Explore packaging that offers more value • Optimise pricing as appropriate in line with market conditions • R
Slide 15: Outlook
Outlook For 2008 Barring any unforeseen circumstances, Management expects the Group’s 2008 results to outperform those achieved in 2007 For 2009 Management views 2009 to be challenging. Our aggressive cost cutting programs should partially mitigate any reduction in sales. Consumers will look for val