Del Monte Pacific Limited · SGX:D03
Del Monte Pacific — Q4 FY2017 Earnings Presentation
39 slides from Del Monte Pacific's earnings presentation, Jun 29, 2017
Slide 1: Del Monte Pacific 4Q FY2017 Results
Del Monte Pacific 4Q FY2017 Results 29 June 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 4Q FY2017 Results Full Year FY2017 Results Market Updates Subsequent Event – JV with Fresh Del Monte Preference Share Offering Dividend Sustainability Outlook 3
Slide 4: Notes to the 4Q FY2017 Results
Notes to the 4Q FY2017 Results 1. Fourth quarter is 1 February to 30 April 2017. 2. DMPL’s effective 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 Group adopted the amendments to IAS 16 and IAS 41 (Agriculture: Bearer Plants in Ap
Slide 5: Highlights and Outlook
Highlights 4Q recurring net income improved to US$17.2m from US$14.7m Revenue grew 4% to US$545m on higher USA and Asia sales Gross margin increased to 23.3% from 21.9% on cost improvements FY2017 recurring net income improved to US$45.5m from US$25.2m Preference Shares issue successfully
Slide 6: DMPL 4Q FY2017 Group Results Summary
DMPL 4Q FY2017 Group Results Summary Sales of US$545m +4%, on higher USA and Asia sales Sales % Change US +1.5 Philippines -10 (in peso terms -4) S&W +50 FieldFresh India (equity accounted) +18 (in rupee terms +17) All figures below without one-off items and vs prior year quarter: EBITDA of US$5
Slide 7: One-off Expenses/(Income)
One-off Expenses/(Income) In US$ m 4Q FY16 4Q FY17 Booked under Closure of North Carolina plant 16.3 0.1 CGS ERP implementation at DMFI 2.1 - G&A expense Sager Creek integration 2.9 - G&A expense Severance 1.5 2.0 G&A expense Others (includes professional fees) - 4.0 G&A expense Working capital adju
Slide 8: DMPL 4Q FY2017 Results – As reported
DMPL 4Q FY2017 Results – As reported 4Q 4Q In US$m FY 2016 Chg (%) Comments FY 2017 (Restated) Turnover 524.6 545.2 +3.9 Higher USA and S&W Asia sales Gross profit 114.8 127.1 +10.7 Cost improvements at DMFI This quarter included US$6m of one-off expenses while last year had one-off gain of US$15m;
Slide 9: 4Q FY2017 Turnover Analysis
4Q FY2017 Turnover Analysis Americas 73% 23% Asia Pacific 4% Europe Americas +1.5% Volume growth across retail and foodservice channels Sales of packaged vegetable, fruit and broth grew, driven by strong Easter merchandising events and enhanced marketing plans Asia Pacific +5.1% Strong S&W sal
Slide 10: DMPL Full Year FY2017 Group Results Summary
DMPL Full Year FY2017 Group Results Summary Sales of US$2.3bn down 0.9%, driven by lower US sales Sales % Change US -5 Philippines +2 (in peso terms +6) S&W +45 FieldFresh India (equity accounted) +14 (in rupee terms +13) All figures below without one-off items, and vs prior year period: EBITDA
Slide 11: One-off Expenses/(Income)
One-off Expenses/(Income) In US$ m FY16 FY17 Booked under Closure of North Carolina plant 16.3 3.7 CGS ERP implementation at DMFI 13.2 - G&A expense Sager Creek integration 6.9 - G&A expense Severance 7.9 10.2 G&A expense Others (includes professional fees) - 4.0 G&A expense Working capital adjustme
Slide 12: DMPL FY2017 Results – Group - As reported
DMPL FY2017 Results – Group - As reported In US$m FY 2016 FY 2017 Chg (%) Comments Lower DMFI sales partly offset by higher Philippines Turnover 2,274.1 2,252.8 -0.9 and S&W Asia sales Gross profit 485.8 494.9 +1.9 Better sales mix in Asia and cost optimisation This year included a one-off expense o
Slide 13: DMPL FY2017 Results – DMPL ex DMFI
DMPL FY2017 Results – DMPL ex DMFI In US$m FY 2016 FY 2017 Chg (%) Comments Turnover 560.0 611.7 +9.2 Higher Philippines and S&W Asia sales Gross profit 166.9 198.9 +19.2 Better sales mix and cost optimisation EBITDA 88.9 112.5 +26.5 Same as above Operating profit 70.1 92.3 +31.7 Same as above Net f
Slide 14: DMPL FY2017 Results – DMFI – Recurring Basis
DMPL FY2017 Results – DMFI – Recurring Basis In US$m FY 2016 FY 2017 Chg (%) Comments Unsuccessful low-margin USDA bids, lower private label Turnover 1,778.0 1,696.5 -4.6 and foodservice sales Lower volume and unfavourable pricing in non-retail Gross profit 328.9 295.9 -10.0 channel EBITDA 122.4 93.
Slide 15: FY2017 Turnover Analysis
FY2017 Turnover Analysis Americas 75% 23% Asia Pacific 2% Europe Americas -4.4% Unsuccessful low-margin USDA bids from 2H FY2016 plus reduced sales in private label and foodservice business lines Asia Pacific +10.2% Higher sales for S&W in Asia, and the Philippines Europe +27.2% Higher pineapp
Slide 16: United States of America
United States of America Market Share (#1) Market Share (#1) Market Share (#2) Market Share (#2) Canned Vegetable Canned Fruit Plastic Fruit Cup Canned Tomato Broadly, US center of store food categories experienced declines in 4Q. DMFI saw similar trends. DMFI grew share in 3 out of 4 of its mea
Slide 17: Del Monte Foods USA
Del Monte Foods USA DMFI’s 4Q sales up 1.5% to US$401.7m • Higher volume in both retail and foodservice channels • Growth of packaged vegetable and fruit driven by strong Easter merchandising events and enhanced marketing plans • Increased market share in canned vegetable, canned fruit and fruit i
Slide 18: 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 19: Marketing Innovation
Marketing Innovation Del Monte Fruit Del Monte Cups with College Inn Stock Refreshers Real Fruit Juice 3.5m households have tried the All Real Fruit Juice New College Inn Bold product varieties now on shelf! Stock Beef and Chicken 19
Slide 20: Marketing Highlights
Marketing Highlights Vegetable Fruit College Inn New Product of the Year Northeast campaign award in snacking generated 262 million category impressions 356 million impressions Tasty Video generated Over 1.2 billion over 31 million views impressions 28 million video views 20
Slide 21: Foodservice Highlights
Foodservice Highlights Beans Fruit USDA Support Sold in high-flavour, less- Launched fruit cups Supported the USDA’s sodium beans designed to meeting school requirement for schools to meet school nutrition requirement of a full ½ cup purchase food grown in requirements fruit (4.4 oz total) and
Slide 22: E-Commerce Activities
E-Commerce Activities • Industry online grocery sales are estimated to be 2% of total grocery sales, or US$14 billion for 2016 - growing to US$20 billion in 2017. • Kantar Retail projects a 31.2% 5-yr CAGR for online grocery (‘16-21). • DMFI plans to target the major e-retailers by selling directly
Slide 23: 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 24: Del Monte Philippines
Del Monte Philippines Sales in the Philippines down 4% in peso terms Foodservice continued to grow Maintained a healthy market share across the majority of its key categories Entered the isotonic segment, a new category – with the launch of Del Monte Fit ‘n Right Active • The first 2-in-1 Is
Slide 25: Del Monte Fit 'n Right Active Campaigns
Del Monte Fit ‘n Right Active Campaigns New campaign to drive awareness and trial! Fit ‘n Right Active already gaining interest from the fitness community in Instagram 25
Slide 26: Fit 'n Right Summer Flavours
Fit ‘n Right Summer Flavours Launched 2 Summer Flavours for Fit ‘n Right Grapefruit Blueberry Grape Started shipments in January 2017 26
Slide 27: Expanded Availability for Del Monte Fizzy Juice Drink!
Expanded Availability for Del Monte Fizzy Juice Drink! Del Monte Fizzy Juice Drink, your carbonated drink made healthy! First launched in October 2016 in 7-Eleven Now available in 7-Eleven, MiniStop, FamilyMart, small convenience stores and restaurants! 27
Slide 28: 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 29: 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 4Q Driven by both the fresh and packaged segments Expanded fresh fruit distribution in China and raised brand awareness through in-store sampling; launched key packaged products in
Slide 30: E-Commerce Activities of S&W in North Asia/Asia
E-Commerce Activitiesactivities of S&W in North Asia/ Asia PHILIPPINES: Sampling of S&W Calamansi juice in BPO areas CHINA: Sampling activities of S&W fresh pineapple JAPAN: S&W Fiesta pineapples sold exclusively in Skylark Group's restaurant chain "GUSTO" covering about 2,000 stores for its summer
Slide 31: Food Hotel Indonesia in April 2017
INDONESIA: Participation in trade show ISRAEL: Bus ad of S&W juices ‘Food Hotel Indonesia’ in April 2017 Facebook posting INDONESIA: S&W Vinegar and S&W Corn sampling during the trade show 31
Slide 32: E-Commerce Activities
E-Commerce Activities E-Commerce Activities China (JD.com and 1688.com) of S&W inSingapore North Asia/ (Fairprice Asia Online and Redmart) Japan (Amazon JP, Rakuten and Kakaku) Korea (SSG.com) 32
Slide 33: FieldFresh India
FieldFresh India DMPL’s share of loss in the FieldFresh joint venture in India for 4Q lower at US$0.4m from US$0.5m Sales were up 17% in rupee terms Tiffin Recipes Digital Campaign Provide moms with meal solutions in the form of Del Monte Chifferi Rigati with Cheese & Peas easy tiffin recipes –
Slide 34: Italian Range Packaging Revamp
Italian Range Packaging Revamp The objective of the revamp was to de-clutter and have the packaging convey more premium and authenticity in line with both the brand and category 34
Slide 35: Subsequent Event – JV with Fresh Del Monte
Subsequent Event – JV with Fresh Del Monte New joint ventures between DMPL and Fresh Del Monte Produce, Inc (FDP) Results in expanded refrigerated offerings New retail F&B concept modeled after an already successful FDP business in the Middle East Focus on the US market initially Collabora
Slide 36: Preference Share Offering
Preference Share Offering Successfully completed the offering and listing of ~US$200m Preference Shares in the Philippines in April; coupon rate of 6.625% The first Dollar-Denominated securities to be listed on the Philippine Stock Exchange Net proceeds used to partly refinance the US$350 mill
Slide 37: Dividend for Common Shareholders
Dividend for Common Shareholders Under the Company’s Articles of Association and the terms of the Preference Shares, the Company may declare and pay dividends on Common Shares provided there are adequate and available funds for dividends on Preference Shares which have priority over Common Shares. S
Slide 38: Sustainability
Sustainability Del Monte Pacific Limited completed its independent assessment of the Group’s sustainability priorities Del Monte Foundation embarked on its community relations projects such as medical and dental missions, vocational course training and scholarships Del Monte in the Philippines
Slide 39: Highlights and Outlook
Highlights 4Q recurring net income improved to US$17.2m from US$14.7m Revenue grew 4% to US$545m on higher USA and Asia sales Gross margin increased to 23.3% from 21.9% on cost improvements FY2017 recurring net income improved to US$45.5m from US$25.2m Preference Shares issue successfully