Del Monte Pacific Limited · SGX:D03
Del Monte Pacific — 2Q FY2015 Earnings Presentation
28 slides from Del Monte Pacific's earnings presentation, Dec 15, 2014
Slide 1: 2Q FY2015 Results
2Q FY2015 Results 15 December 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 • 2Q FY2015 Results • Market Updates • 1H FY2015 Results • 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: Deleveraging
Deleveraging • After DMPL’s equity raising of US$515m (US$350m net from preference shares and US$165m net from the rights offer) and the additional projected debt paydown of about US$230-280m from cashflow, DMPL’s gearing is expected to be significantly reduced to 170-180% from the current 906% • Th
Slide 6: Notes to the 2Q FY2015 Results
Notes to the 2Q 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 second quarter of the Company is now 1 August to 31 October. The next financial year-end will be on 30 April 2015. 2. DMFI’s fi
Slide 7: DMPL 2Q FY2015 Results Summary
DMPL 2Q FY2015 Results Summary • Achieved sales of US$548m with US$435m or about 80% contributed by Del Monte Foods, Inc (DMFI) • Sales of Del Monte in the Philippines rose 4% • Group EBITDA and net income of US$59m and US$21m, respectively, before acquisition and non-recurring expenses of US$20.5m
Slide 8: DMPL 2Q FY2015 Acquisition Expenses
DMPL 2Q FY2015 Acquisition Expenses DMPL’s consolidated bottom line was impacted by acquisition-related expenses amounting to US$20.5m net of tax 1. US$11.1m net of tax for inventory step up which corresponded to a higher cost of goods sold (CGS) • This was a carryover from the Transition Period end
Slide 9: DMPL 2Q FY2015 Results
DMPL 2Q FY2015 Results 2Q FY 2Q FY In US$m Chg (%) Comments 2014 2015* Consolidation of DMFI’s sales Turnover 136.3 548.0 nm of US$435m Gross profit 35.9 114.7 nm Same as above Impact of acquisition-related Operating profit 16.2 25.4 nm expenses of US$22.1m and higher G&A Higher interest expense fro
Slide 10: DMPL ex DMFI 2Q FY 2015 Results
DMPL ex DMFI 2Q FY 2015 Results* 2Q FY 2Q FY In US$m Chg (%) Comments 2014 2015 Higher Philippines sales offset Turnover 136.2 128.5 -5.7 by declines in S&W and Exports Gross profit 35.8 29.9 -16.5 Lower sales and higher costs Operating profit 19.6 14.0 -28.6 Same as above Finance inc/(exp) (2.5) (1
Slide 11: 2Q FY 2015 Turnover Analysis
2Q FY 2015 Turnover Analysis 80% Americas 19% Asia Pacific Europe 1% Americas nm • Due to the consolidation of DMFI’s results with sales of US$435m Asia Pacific +0.8% • Flat sales as S&W sales were lower due to political and economic disruption in the Middle East, while Philippines sales were up 4%
Slide 12: Del Monte Foods USA
Del Monte Foods USA • 2Q sales decreased by 6% to US$435.1 million impact of currency deterioration in Venezuela reinstating trade spending to historical levels • Has taken initiatives: reverting back to competitive pricing levels reintroducing the well-recognised classic Del Monte label r
Slide 13: Del Monte Foods USA – Back-to-School Campaign
Del Monte Foods USA – Back-to-School Campaign 13
Slide 14: Del Monte Foods USA – Marketing Campaigns
Del Monte Foods USA – Marketing Campaigns Tie up with Legoland Recipe handouts 14
Slide 15: Del Monte Foods USA – Promotion Display
Del Monte Foods USA – Promotion Display 15
Slide 16: Del Monte Foods USA – Product Portfolio
Del Monte Foods USA – Product Portfolio 16
Slide 17: Del Monte Philippines
Del Monte Philippines • 2Q sales were up 4% due to: favourable mix in beverage sales with resurgent growth of 1-litre Tetra Pak format culinary segment’s sales also grew behind spaghetti sauce and pasta, and early introduction of Christmas packs Del Monte Philippines marketing 1-Litre carton for
Slide 18: Del Monte Philippines – Marketing Campaigns
Del Monte Philippines – Marketing Campaigns Deliciously-nutritious meal with pineapples Pineapple juice fortified with calcium 18
Slide 19: Del Monte Philippines – Product Portfolio
Del Monte Philippines – Product Portfolio 19
Slide 20: S&W Asia
S&W Asia • S&W branded business was impacted by political and economic disruption in the Middle East, affecting S&W packaged sales • Moreover, sales of S&W fresh pineapple were lower due to short supply which will improve in the balance of the year • These declines were offset by the continued growt
Slide 21: S&W Asia – In-store Promotion
S&W Asia – In-store Promotion In-store promotion of S&W Saba Fish backed by Japanese theme to maintain consistency with and emphasise S&W Saba Fish’s premium origin 21
Slide 22: S&W Asia – Product Portfolio
S&W Asia – Product Portfolio 22
Slide 23: 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$1.1 million in the prior year period • FieldFresh’s sales +37% with the Del Monte branded packaged sales +44% while FieldFresh-branded fresh exports +9% Ready to co
Slide 24: FieldFresh India – Product Portfolio
FieldFresh India – Product Portfolio 24
Slide 25: DMPL 1H FY2015 Results
DMPL 1H FY2015 Results 1H FY 1H FY In US$m Chg (%) Comments 2014 2015* Consolidation of DMFI’s sales Turnover 255.7 993.6 nm of US$775m Gross profit 59.7 185.5 nm Same as above Impact of acquisition-related Operating profit 24.3 13.3 nm expenses of US$42m and higher G&A Higher interest expense from
Slide 26: DMPL ex DMFI 1H FY 2015 Results
DMPL ex DMFI 1H FY 2015 Results* 2Q FY 2Q FY In US$m Chg (%) Comments 2014 2015 Higher Philippines and S&W Turnover 255.6 249.0 -2.6 sales offset by decline in Exports Gross profit 59.5 55.9 -6.1 Lower sales Operating profit 29.5 24.1 -18.3 Same as above Finance inc/(exp) (4.8) (2.6) -45.8 Better fo
Slide 27: Sustainability/Awards
Sustainability/Awards Won the Singapore Corporate Governance Award, Runner Up, at the Securities Investors Association Singapore (SIAS) Investors’ Choice Award last 31 October 2014 Donated classrooms to schools Conducted medical and dental missions with over 500 beneficiaries 27
Slide 28: Outlook for FY2015
Outlook for FY2015 1. Deleveraging after the capital raising exercise 2. 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 3. As