Del Monte Pacific Limited · SGX:D03
Del Monte Pacific — Q3 FY2017 Earnings Presentation
32 slides from Del Monte Pacific's earnings presentation, Mar 10, 2017
Slide 1: Del Monte Pacific 3Q FY2017 Results
Del Monte Pacific 3Q FY2017 Results 10 March 2017
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 Summary 3Q FY2017 Results 9M FY2017 Results Market Updates Sustainability Outlook 3
Slide 4: Notes to the 3Q FY2017 Results
Notes to the 3Q FY2017 Results 1. Third quarter is 1 November 2016 to 31 January 2017. 2. DMPL’s stake in DMFI is 89.4%, hence the non controlling interest line (NCI) in the P&L. Net income is net of NCI. 3. DMPL changed measurement of the cost of inventory from weighted average to FIFO method in Ap
Slide 5: 3Q FY2017 Results and Outlook
3Q FY2017 Results Revenue was slightly higher at US$604m Net income without one-off items improved significantly to US$11.6m Del Monte Philippines and S&W in Asia & Middle East continued to deliver strong performance Deleveraging planned with Preference Shares offering Outlook The Group is
Slide 6: DMPL 3Q FY2017 Group Results Summary
DMPL 3Q FY2017 Group Results Summary Sales of US$604m +0.3%, higher Asia but lower US sales Sales % Change US -3 Philippines -1.5 (in peso terms +3) S&W +39 OEM Exports +23 FieldFresh India (equity accounted) +4 (in rupee terms +7) All figures below without one-off items and vs prior year quarter:
Slide 7: One-off Expenses
One-off Expenses In US$ m 3Q FY16 3Q FY17 Booked under Closure of North Carolina plant - 0.9 CGS ERP implementation at DMFI 7.1 - G&A expense Sager Creek integration 2.0 - G&A expense Severance 3.3 4.5 G&A expense Total (pre-tax basis) 12.4 5.4 Total (net of tax and minority 6.9 3.1 interest) 7
Slide 8: DMPL 3Q FY2017 Results – As reported
DMPL 3Q FY2017 Results – As reported 3Q 3Q In US$m Chg (%) Comments FY 2016 FY 2017 Higher Philippines and S&W Asia sales offset lower Turnover 602.3 604.0 +0.3 DMFI sales Gross profit 119.1 125.5 +5.4 Operational efficiencies and lower costs Last year included one-off expenses of US$12.4m, EBITDA 3
Slide 9: 3Q FY2017 Turnover Analysis
3Q FY2017 Turnover Analysis Americas 75% 23% Asia Pacific 2% Europe Americas -2.3% Continued weakness in the canned fruit industry Lower sales of regional brands in the packaged vegetable category across retail and foodservice due to supply-related issues Lower sales of private label Asia Paci
Slide 10: DMPL 9M FY2017 Group Results Summary
DMPL 9M FY2017 Group Results Summary Sales of US$1.7bn down 2%, driven by lower US sales Sales % Change US -6 Philippines +5 (in peso terms +9) S&W +43 OEM Exports +1 FieldFresh India (equity accounted) +8 (in rupee terms +12) All figures below without one-off items, and vs prior year period: EB
Slide 11: One-off Expenses/(Income)
One-off Expenses/(Income) In US$ m 9M FY16 9M FY17 Booked under Closure of North Carolina plant - 3.6 CGS ERP implementation at DMFI 11.1 - G&A expense Sager Creek integration 4.0 - G&A expense Severance 6.4 8.2 G&A expense Retirement plan amendment (39.4) - G&A expense Total (pre-tax basis) (17.9)
Slide 12: DMPL 9M FY2017 Results – As reported
DMPL 9M FY2017 Results – As reported 9M 9M In US$m Chg (%) Comments FY 2016 FY 2017 Lower DMFI sales partly offset by higher Philippines Turnover 1,747.8 1,705.7 -2.4 and S&W Asia sales Lower sales; also includes US$3.6m one-off cost for Gross profit 370.9 366.0 -1.3 a US plant closure This year inc
Slide 13: 9M FY2017 Turnover Analysis
9M FY2017 Turnover Analysis Americas 76% 23% Asia Pacific 1% Europe Americas -6.1% Unsuccessful low-margin USDA bids from 2H FY2016 plus reduced sales in private label and foodservice business lines Asia Pacific +11.9% Strong sales in the Philippines and S&W in Asia Europe +1.6% Higher pineapp
Slide 14: United States of America
United States of America Market Share (#1) Market Share (#1) Market Share (#2) Packaged Core Vegetable Packaged Core Fruit Packaged Cut Tomato Slowly declining canned category: Win through innovation, differentiation and product attributes DMFI increased its market share in packaged vegetable an
Slide 15: Del Monte Foods USA
Del Monte Foods USA DMFI’s 3Q sales down 3% to US$450.6m • Continued weakness in the canned fruit industry • Lower sales of regional brands in the packaged vegetable category across retail and foodservice as impacted by supply- related issues following closure of the North Carolina plant • Lower s
Slide 16: Del Monte Foods Strategy
Del Monte Foods Strategy Marketing: Continually differentiate our brands/products in order to drive consumer preference Reinforce our points of difference (Del Monte’s quality, College Inn’s rich flavourful taste) Elevate our purity, culinary credentials and convenience (non-GMO, All Natural, se
Slide 17: Del Monte Foods New Product
Del Monte Fruit Refreshers Del Monte Foods New Product Grapefruit in Pink Guava Fruit Water • New product, Del Monte Fruit Refreshers, the first ever Fruit Cup® snack made just for adults, has been named Product of the Year for 2017 in the Healthy Snacks category • With unexpected flavours, exciting
Slide 18: Newly Reformulated College Inn Stock & Packaging
Newly Reformulated College Inn Stock & Packaging! Improved Formula – Simple Ingredients Upsized to 32oz packaging 80% more product 35% price value/oz New package design for consistent brand architecture Will be supported with FSI print ads and shelf signage 18
Slide 19: College Inn Integrated Marketing Campaign
College Inn Integrated Marketing Campaign Shopping & Selection Drive Demand Key Tactics: Re-Targeted Key Tactics: Regional Spot TV, Regional Mobile Ads & Offers, Print, National Cable TV, Online Video, Display, Shelf Signage Regional FSI, Targeted Display banners Experience Key Tactics: Social, Infl
Slide 20: Tasty Video Partnership
Tasty Video Partnership • Leveraged Tasty’s strong millennial audience to reach our younger cohort consumers by launching 4 Tasty partnership recipe videos • Bacon Jalapeño Corn Dip • Loaded Leftover Cups • Green Bean Pesto and Steak Toast • Corn Chowder Most engagement ever seen for a Del Monte can
Slide 21: Philippines
Philippines Market Share (#1) Market Share (#1) Market Share (#1) Canned Pineapple Canned Mixed Fruit Canned and Tetra RTD Juices Market Share (#1) Market Share (#1) Tomato Sauce Spaghetti Sauce Del Monte is the market leader across several categories Modern trade and convenience stores are grow
Slide 22: Del Monte Philippines
Del Monte Philippines Philippines sales grew as the Group drove to optimise growth and consumption opportunities during the Christmas peak consumption occasions Positioned Del Monte as the single mega-brand that completes every Filipino family’s traditional Christmas meal celebrations -- complem
Slide 23: Fit 'n Right Summer Flavours
Fit ‘n Right Summer Flavours Launched 2 Summer Flavours for Fit ‘n Right Grapefruit Blueberry Grape Start of shipments in January 2017 23
Slide 24: Asia and Middle East
Asia and Middle East Consumers moving towards less processed and more natural food: S&W expanding sales of S&W Sweet 16 fresh pineapple E-commerce and digital are growing with North Asia having the largest share of e-commerce pie: S&W is actively exploring this channel To drive growth, realise S
Slide 25: 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 were up double-digit terms in 3Q Driven by both the fresh and packaged segments In fresh fruit, expanded distribution in China and raised brand awareness through in-store sampling In the packaged segment, str
Slide 26: S&W Christmas Promotion on Facebook
S&W Christmas Promotion on Facebook “Caption this Sweet Moment” photo contest and 2 lucky winners get to walk away with S&W gift packs! There were also other celebratory posts with various products being featured: 26
Slide 27: FieldFresh India
FieldFresh India DMPL’s share of loss in the FieldFresh joint venture in India for 3Q higher at US$0.5m from US$0.3m Sales were up 7% but bottomline was impacted by demonetisation, higher commodity costs and the devaluation of pound that impacted exports of fresh products to UK New Products – De
Slide 28: Sweet Escapes Digital Campaign for Packaged Fruit
Sweet Escapes Digital Campaign for Packaged Fruit Drive usage of our packaged fruit range by giving consumers easy and indulging ways to use our products during the festive season Created short & sweet dessert video recipes made using our packaged fruit range 12 video recipes and similar number
Slide 29: Desserts #MadeWithDelMonte Sweet Escapades Contest Images
Desserts #MadeWithDelMonte Sweet Escapades Contest Images Honey Glazed Peaches Caramelized Pineapple in Bird’s Nest Deconstructed Cheesecake Del Monte Pineapple Sugar Globe Tart 29
Slide 30: Sustainability
Sustainability • The Produce for Better Health Foundation designated Del Monte Foods as a 2016 Role Model for Fruits & Veggies— More Matters®, a nutrition education initiative to motivate people to eat more fruits and vegetables • Del Monte Foods teamed up with Feeding America to deliver pallets of
Slide 31: Debt Outlook
Debt Outlook Extended the US$350 million loan with BDO Unibank, Inc for two years effective 10 February 2017 on the same terms and conditions Planned issuance of perpetual preference shares to refinance the BDO loan US$-denominated To be listed on the Philippine Stock Exchange (PSE) Up to US$3
Slide 32: 3Q FY2017 Results and Outlook
3Q FY2017 Results Revenue was slightly higher at US$604m Net income without one-off items improved significantly to US$11.6m Del Monte Philippines and S&W in Asia & Middle East continued to deliver strong performance Deleveraging planned with Preference Shares offering Outlook The Group is