Del Monte Pacific Limited · SGX:D03
Del Monte Pacific — 2Q FY2024 Earnings Presentation
40 slides from Del Monte Pacific's earnings presentation, Dec 13, 2023
Slide 1: Del Monte Pacific 2Q FY2024 Results
Del Monte Pacific 2Q FY2024 Results 13 December 2023 1
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 typical
Slide 3: Contents
Contents ▪ Summary ▪ 2Q FY2024 Results ▪ 1H FY2024 Results ▪ Market Updates ▪ Sustainability ▪ Outlook 3
Slide 4: Notes to the Results
Notes to the Results ▪ 2Q FY2024 is from 1 August to 31 October 2023 ▪ 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 pr
Slide 5: Highlights
Highlights Second Quarter FY2024 ▪ Del Monte Pacific Limited (DMPL) Group sales declined by 5% to US$667m on lower USA and export sales ▪ The Group maintained leading market share positions across core products ▪ Posted lower gross profit of US$136m due to higher costs ▪ This factor and increased in
Slide 6: Outlook
Outlook ▪ Remain vigilant in managing our operating expenses throughout the supply chain from production to distribution with better operational and energy efficiency, optimized packaging and reduced wastage ▪ Expects to deliver higher branded revenue growth in FY2024 ▪ In the US, we are focused on
Slide 7: 2Q FY2024 Results Summary
2Q FY2024 Results Summary ▪ Sales of US$667.1m, -4.6% Sales % Change Americas -1.7 Philippines flat (in peso terms -1.5) International -30 India (equity accounted) -6 (in rupee terms -2) All figures below are vs prior year quarter: ▪ EBITDA of US$63.9m, down 49% from US$124.4m, mainly due to higher
Slide 8: 2Q FY2024 Results
2Q FY2024 Results In US$m 2Q FY2023 2Q FY2024 Chg (%) Comments Turnover 698.9 667.1 -4.6 Lower sales in USA and export markets Gross profit 205.3 135.5 -34.0 Due to higher product costs Gross margin (%) 29.4 20.3 -9.1ppts Same as above EBITDA 124.4 63.9 -48.7 Same as above Net profit 49.5 (8.5) -117
Slide 9: 2Q FY2024 Turnover and Operating Profit Analysis
2Q FY2024 Turnover and Operating Profit Analysis Sales Operating 1.4% (0.9%) Profit 23.8% Americas 42.5% 74.8% Asia Pacific 58.4% Europe Sales growth Comments Americas -1.7% ▪ Driven by strategic exit from lower-margin co-pack products (products which DMFI packs for other manufacturers), and lower s
Slide 10: Gross Profit Variance Analysis 2Q FY24 vs 2Q FY23
Gross Profit Variance Analysis 2Q FY24 vs 2Q FY23 GP in US$MM Gross Profit in US$m 28.5 3.7 28.4 29.9 Net Pricing 36.8 0.4 0.4 Base 6.3 0.5 0.0 DMFI 22.2 205.3 Operations Inflationary Total Base (11.2) (2.6) (13.8) 135.5 DMFI (18.7) (34.2) (52.9) Total (29.9) (36.8) (66.7) QTR2 FY24 Net Pricing Repo
Slide 11: 1H FY2024 Results Summary
1H FY2024 Results Summary ▪ Sales of US$1.2bn, +2.4% Sales % Change Americas +5.8 Philippines flat (in peso terms +1.2) International -18.5 India (equity accounted) -6 (in rupee terms flat) All figures below are vs prior year period on recurring basis. There was no one-off item this year but last ye
Slide 12: 1H FY2024 Results – Reported Basis
1H FY2024 Results – Reported Basis In US$m 1H FY2023 1H FY2024 Chg (%) Comments Turnover 1,155.5 1,183.8 +2.4 Higher sales in USA Gross profit 337.0 243.8 -27.7 Due to higher product costs Gross margin (%) 29.2 20.6 -8.6ppts Same as above EBITDA 194.5 115.0 -40.9 Same as above Net profit 19.0 (21.6)
Slide 13: 1H FY2024 Turnover and Operating Profit Analysis
1H FY2024 Turnover and Operating Profit Analysis Sales Operating 1.5% 0.3% Profit 26.0% Americas 50.2% 49.5% 72.5% Asia Pacific Europe Sales growth Comments Americas +5.8% ▪ Driven by pricing actions in FY2023 and in August this year ▪ Favorable sales mix from higher branded sales ▪ Branded retail a
Slide 14: Gross Profit Variance Analysis 1H FY24 vs 1H FY23
Gross Profit Variance Analysis 1H FY24 vs 1H FY23 Gross Profit in US$m 55.5 24.7 3.7 40.7 79.2 Net Pricing 1.4 1.3 1.3 0.9 Base 9.8 DMFI 45.7 Operations Inflationary Total 337.0 Base (15.8) (7.3) (23.0) DMFI (25.0) (71.9) (96.9) 243.8 Total (40.7) (79.2) (119.9) YTD FY24 1H FY23 Net Pricing Volume/
Slide 15: Market Updates
Market Updates 15
Slide 16: Del Monte Foods USA 2Q FY2024
Del Monte Foods USA 2Q FY2024 ▪ Sales of US$494.6m or 74% of Group sales; sales decreased by 2% mainly driven by the strategic shift away from lower-margin co-pack products that it packs for other manufacturers ▪ Branded products grew by 0.5% due in part to strong performance from the JOYBA and Kitc
Slide 17: USA Market Shares
USA Market Shares 22.1% +0.4pts 23.5% +2.1pts 28.4% -0.7pts Canned Vegetable (#1) Canned Fruit (#1) Fruit Cup Snacks (#2) 6.5% +0.4pt 9.5% -0.2pt Canned Tomato (#3) Broth (#2) Source for market shares: Nielsen RMS / Scantrack DMFI Custom DBs, Eq Vol share, Total xAOC, Latest 3M ending 28 October 202
Slide 18: USA 2Q – Marketing Highlights
USA 2Q – Marketing Highlights JOYBA Summer Campaign Re-Launch of Fruit Refreshers line • Tik Tok, Meta, PR/Influencer • Meta, You Tube, PR/Influencer Veg Fall Campaign (pre-holiday) • Base Veg and premium sliver label Meta Pinterest Google Search 18
Slide 19: USA 2Q – Marketing Highlights
USA 2Q – Marketing Highlights Broth Contadina • Pinterest, Search, PR • Pinterest, Search, Celebrity Chef Michael Symon partnership 19
Slide 20: USA 2Q – Shopper Marketing Highlights
USA 2Q – Shopper Marketing Highlights Veg Meal Solutions JOYBA Support + Botanicals line extension • Digital display, video, offers, recipes • Retailer Media – Digital Display Ads, You Tube, Social Take Root Organics Launch • Digital Display, Social, Shelf Sign, Recipes, Email 20
Slide 21: USA 2Q – Foodservice
USA 2Q – Foodservice Launch of 4oz Branded Fruit Cups Supported by Digital Media Developed specifically for sale for the vending • Digital Display, Social and Email machine and micro market channels. These new scannable fruit cups are labeled for individual sale. The launch includes 5 variants: mixe
Slide 22: USA – Consumer Trends
USA – Consumer Trends CONSUMERS ARE CLOSELY CONSIDERING HOW THEY SPEND THEIR $ We have entered an era of calculated consumption and spending HOW HOW CONSUMERS HOW RETAILERS CONSUMERS ARE ARE SHOPPING ARE RESPONDING EATING ✓ Eating meals at-home, most of ✓ Adopting saving strategies that ✓ Actively d
Slide 23: USA – Food Companies Performance
USA – Food Companies Performance In 2023, Food Companies have struggled with low demand t 23
Slide 24: USA – Strategic Growth Initiatives
USA – Strategic Growth Initiatives 24
Slide 25: USA – Key Areas of Focus and Corrective Actions in 2H FY2024 & FY2025
USA – Key Areas of Focus and Corrective Actions in 2H FY2024 & FY2025 25
Slide 26: DMPL ex-DMFI 2Q FY2024
DMPL ex-DMFI 2Q FY2024 ▪ Sales of US$179m, down 14% due to lower supply of processed and fresh pineapple. Two major reasons for this pineapple fruit supply shortfall: ✓ Our C74 variety for processed pineapple declined by 12% in raw fruit tonnage due to severe weather-related issues that impacted its
Slide 27: Philippines – Market Shares
Philippines – Market Shares 95.7% +0.3pts 77.9% +3.3pts 38.7% -3.3pts Packaged Pineapple (#1) Canned Mixed Fruit (#1) RTD Juices ex foil pouches (#1) (Category: +2.4 % ) (Category: -16.1% ) (Category: +2.3 % ) 83.9% -0.8pt 42.3% +1.1pts 13.1% -1.6pts Tomato Sauce (#1) Spaghetti Sauce (#1) Drinkable
Slide 28: Philippines – Fruit
Philippines – Fruit NEW Pinya-GIGIL campaign! (Launched August) NEW Today’s Pista Regional Activation (in Visayas/ • Making everyday, brown-saucy dishes more delicious for kids! Mindanao) • Encourage sharing fruit salad during large community thanksgiving celebrations TV, Digital and Radio Local act
Slide 29: Philippines – Culinary
Philippines – Culinary Tomato Sauce - Spaghetti Sauce - Winning in Birthdays with Birthday Value bundles for everyday Campaign Digital & Limited Edition Plates Promo and holiday cooking In-store shelf take-over to New thematic campaign - Best birthdays are celebrated with Del Monte highlight Campaig
Slide 30: Philippines – Beverage
Philippines – Beverage Del Monte Juices “Give In To Goodness” biggest marketing campaign in September 2023 Message Heavy TV & Digital Investment Out-of-Home Visibility • Indulge in the Healthy & Delicious Goodness of Del Monte Juices! • Available in 14 refreshing flavors TV: 122M viewers reached 6 m
Slide 31: Philippines – Beverage
Philippines – Beverage Fit ‘n Right - Boost Your Passions The Natural Way On-ground Sampling Digital Campaign and Influencer Program 20,349 sampling hits in different BPO Offices & LRT 32.2M total audience reach 22,494 sampling hits in different Universities in GMA 82.5M total accumulated views from
Slide 32: Philippines – Innovation
Philippines – Innovation Mr. Milk Nationwide Mr. Milk ‘Back to School’ Del Monte Potato Crisp Foodie Price Rollback & Tie Up Program with Puregold Influencer Digital Marketing Value Communications 32
Slide 33: Philippines – Foodservice and Convenience
Philippines – Foodservice and Convenience Foodservice channel growth driven Convenience store growth from by rebound of tourism activities aggressive expansion of 7-Eleven stores ▪ Revenue +15% vs prior year, +3% vs pre-pandemic. ▪ Revenue +13% vs prior year due to ▪ 588 new accounts. higher volume,
Slide 34: S&W Fresh – Hong Kong
S&W Fresh – Hong Kong S&W joined the Asia Fruit Logistica (AFL) held in Hong Kong from 6-8 September 2023. S&W was proud to be one of the bronze sponsors in the exhibit, which was marked with record number of attendees with more than 13,000 trade visitors and over 700 exhibitors. This event paved th
Slide 35: S&W Fresh – Guangzhou
S&W Fresh – Guangzhou • The International Fruit Expo, an international trade fair dedicated to fruit retail, fruit growing and logistics, was held in Guangzhou, China from 1-3 September 2023 and was participated by over 200 exhibitors with about 20,000 visitors in attendance. The team’s participatio
Slide 36: S&W - Fresh Market Share
S&W - Fresh Market Share • Our North Asia CY 2020 – CY 2023 YEAR-TO-DATE OCTOBER market share 60% increased to 38% 52% China, 54% 52% behind increased 50% supply and sales/ marketing initiatives. 40% North Asia, 38% 37% 40% • China at solid #1 36% as of YTD October 32% 38% 2023. 30% 33% 26% Korea, 3
Slide 37: Frozen
Frozen In Europe, Frozen Pineapple Chunks were launched in Ireland by Green Isle as one of the latest additions to their perfect-for-lunchbox and on-the-go fruit snacks range. These are now available in all major retail stores in Ireland. 37
Slide 38: Sustainability
Sustainability t Water Conservation Plastic Recycling Social Responsibility Governance Energy Savings The plantation’s water Recycled 14% out of Del Monte • Del Monte Pacific use ratio is 34% lower 20% target of DMPI’s Foundation partnered was recognized in vs. prior year partly due post-consumer wi
Slide 39: Sustainability
Sustainability Utility Savings Community Giving Identified a total of 18 projects with goals to In 2Q FY2024, DMFI donated more than 1.3 reduce California energy usage by 50%. million pounds of food worth US$800,000+ Utility surveys are being conducted at all US to non-profit organizations across th
Slide 40: Outlook
Outlook ▪ Remain vigilant in managing our operating expenses throughout the supply chain from production to distribution with better operational and energy efficiency, optimized packaging and reduced wastage ▪ Expects to deliver higher branded revenue growth in FY2024 ▪ In the US, we are focused on