Del Monte Pacific Limited · SGX:D03
Del Monte Pacific — Q3 FY2015 Earnings Presentation
25 slides from Del Monte Pacific's earnings presentation, Mar 11, 2015
Slide 1: 3Q FY2015 Results
3Q FY2015 Results 11 March 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 • Acquisition Financing Update • Notes to the Results • 3Q FY2015 Results • 9M FY2015 Results • Outlook • Market Updates 3
Slide 4: Acquisition Financing Update
Acquisition Financing Update • US$1.675 bn acquisition of Del Monte Foods, Inc (DMFI) financed by: – Debt: US$970m (DMFI) – Equity: US$705m (DMPL US$630m bridge loans, US$75m equity) • Status of bridge loans : – US$154m Rights Issue completed and Rights to be listed on 11 March 2015; Net proceeds to
Slide 5: Deleveraging
Deleveraging • Post Rights Issue, gearing will go down to 4.7x from 8.7x for the Group, and to 1.7x from 3.4x for DMPL (ex DMFI). • The Group remains committed to deleverage DMPL’s balance sheet, and will continue to monitor the financial markets and undertake the international offering of perpetual
Slide 6: Notes to the 3Q FY2015 Results
Notes to the 3Q FY2015 Results 1. 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 third quarter of the Company is now 1 November to 31 January. The financial year-end will be on 30 April 2015. 2. DMFI’s financ
Slide 7: DMPL 3Q FY2015 Results Summary
DMPL 3Q FY2015 Results Summary • Achieved sales of US$638m with US$511m or 80% contributed by Del Monte Foods, Inc (DMFI) • Sales of DMFI grew by 21% versus year ago • Sales of Del Monte in the Philippines rose 18%, a significant improvement to 1H’s 6% growth • Group EBITDA and net income of US$47m
Slide 8: DMPL 3Q FY2015 Acquisition Expenses
DMPL 3Q FY2015 Acquisition Expenses DMPL’s EBITDA was impacted by acquisition-related expenses and non- recurring expenses amounting to US$13.0m 1. US$6.2m for inventory step up which corresponded to a higher cost of goods sold • This was a carryover from the Transition Period February-April 2014 •
Slide 9: DMPL 3Q FY2015 Results
DMPL 3Q FY2015 Results 3Q FY 3Q FY In US$m Chg (%) Comments 2014 2015* Consolidation of DMFI’s sales Turnover 123.8 637.5 nm of US$511m (IFRS) Gross profit 27.3 122.4 nm Same as above Prior year impacted by Operating profit (12.6) 23.4 nm acquisition-related transaction fees Higher interest expense
Slide 10: DMPL ex DMFI 3Q FY 2015 Results
DMPL ex DMFI 3Q FY 2015 Results* 3Q FY 3Q FY In US$m Chg (%) Comments 2014 2015 Higher Philippines and S&W Turnover 123.8 136.2 +10.0 sales Gross profit 27.3 32.7 +19.8 Higher sales Operating profit 13.1 18.2 +38.9 Same as above Finance inc/(exp) 1.1 (1.4) -227.3 FX losses Better performance in 47%
Slide 11: 3Q FY 2015 Turnover Analysis
3Q FY 2015 Turnover Analysis 81% Americas 18% Asia Pacific Europe 1% Americas nm • Due to the consolidation of DMFI’s results with sales of US$511m (IFRS) Asia Pacific +14.2% • Strong sales in the Philippines of +18% and the S&W branded business in Asia of +8% Europe -5.0% • Lower sales of packaged
Slide 12: DMPL 9M FY2015 Results Summary
DMPL 9M FY2015 Results Summary • Achieved sales of US$1.6bn with US$1.3bn or ~80% contributed by Del Monte Foods, Inc (DMFI), providing momentum for sustained growth • Sales of DMFI grew by 4% versus year ago • Sales of Del Monte in the Philippines rose 10% • Group EBITDA and net income of US$133.9m
Slide 13: DMPL 9M FY2015 Results
DMPL 9M FY2015 Results 9M FY 9M FY In US$m Chg (%) Comments 2014 2015* Consolidation of DMFI’s sales Turnover 379.3 1,631.2 nm of US$1.3bn (IFRS) Gross profit 86.8 307.8 nm Same as above Prior year impacted by Operating profit 11.7 36.7 nm acquisition-related transaction fees Higher interest expense
Slide 14: DMPL ex DMFI 9M FY 2015 Results
DMPL ex DMFI 9M FY 2015 Results* 9M FY 9M FY In US$m Chg (%) Comments 2014 2015 Higher Philippines and S&W Turnover 379.3 385.2 +1.6 sales offset by decline in Exports Gross profit 86.8 88.7 +2.2 Higher sales Operating profit 42.7 42.3 -0.9 Finance inc/(exp) (3.5) (4.0) +14.3 FX losses Better perfor
Slide 15: DMPL 9M FY2015 Acquisition Expenses
DMPL 9M FY2015 Acquisition Expenses DMPL’s EBITDA was impacted by acquisition-related expenses and non- recurring expenses amounting to US$59.9m 1. US$44.3m for inventory step up which corresponded to a higher cost of goods sold • This was a carryover from the Transition Period ending April 2014 • H
Slide 16: Outlook for FY2015
Outlook for FY2015 1. Expects to generate sustained earnings on a recurring basis in FY2015 as the Group drives both topline growth across its key markets in the USA, the Philippines and the rest of Asia 2. As majority of DMFI’s stepped up inventory will be sold in the financial year ending April 20
Slide 17: Del Monte Foods USA
Del Monte Foods USA • 3Q sales improved by 21% YoY to US$511 million (IFRS), a reversal from 1H’s decline • 9M sales up 4% YoY to US$1.3bn • Initiatives generated positive results: Reverting to competitive pricing levels Reintroducing the well-recognised classic Del Monte label Reinstating tra
Slide 18: Del Monte Foods USA: Partnerships with complementary brands
Del Monte Foods USA In January, DMFI partnered with complementary brands Seasoned Veg Partnership with Canned Mango Launch Contadina Partnership with Tyson & Tie-in at Walmart & Tie-in at Walmart Fleischmann’s® Yeast Partner Demo FSI & Ad in Delish FSI Magazine at Walmart FSI IRC on Tyson packages I
Slide 19: Del Monte Philippines
Del Monte Philippines • 3Q sales were up 18% in the Philippines, while 9M was up 10%: Volume opportunities across all categories were maximised during the peak consumption period, benefitting from the early availability of Christmas-related marketing programs and trade initiatives Price increase
Slide 20: Del Monte Philippines – Christmas Merchandising
Del Monte Philippines – Christmas Merchandising
Slide 21: Del Monte Philippines – Christmas Merchandising
Del Monte Philippines – Christmas Merchandising Left: Fiesta Fruit cocktail – Make Christmas more delectable Right: Spaghetti Sauce – Serve the complete flavor of the No.1 (Spaghetti)
Slide 22: S&W Asia
S&W Asia • S&W branded business sales in Asia grew by 8% • Higher sales of packaged products in Korea • Started shipping Canned Fruit Cocktail to Pakistan • Launched S&W HeartSmart Juice in the Middle East Nationwide campaign in UAE : Awareness Generation & Consumer Engagement activities 22
Slide 23: S&W Asia – Launch of Tetra Pak Juices in Singapore
S&W Asia – Launch of Tetra Pak Juices in Singapore • Tetra Pak Juices launched in Dec 2014 at NTUC Fairprice, Cheers Convenience and Petrol Marts • Gondola End display to drive offtake of new products • Aggressive sampling programme on weekends Attractive In-Store Support (Gondola Ends, Wobblers) Ag
Slide 24: S&W Asia – Gulfood Event in Middle East
S&W Asia – Gulfood Event in Middle East • Maiden participation in Gulfood Event (USA Pavilion) • Sales leads from Pakistan, UK, Lebanon, and others • Visitors were warmly welcomed by a vibrant booth design and there was ongoing sampling activities for juices
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$0.4 million from US$1.1 million in the prior year period • FieldFresh’s sales +13% with the Del Monte branded packaged sales +17% Ready to cook range of gourmet Pasta Sauces in three p