fresh del monte produce inc.s22.q4cdn.com/651150316/files/doc_presentations/... · the factors...

1

Fresh Del Monte Produce Inc.October 29, 2019

Forward-Looking Statements

This presentation contains certain forward-looking statements regarding the intent, beliefs or

current expectations of the Company or its officers with respect to the Company’s plans and

future performance. These forward-looking statements are based on information currently

available to the Company and the Company assumes no obligation to update these statements.

It is important to note that these forward-looking statements are not guarantees of future

performance and involve risks and uncertainties.

All forward-looking statements in this presentation are based on information available to the

Company on the date hereof, and the Company assumes no obligation to update any such

forward-looking statements. The Company’s plans and performance may also be affected by

the factors described in Item 1A. – “Risk Factors” in Fresh Del Monte Produce Inc.’s Quarterly

Report on Form 10-Q for the quarter ended September 27, 2019, Annual Report on Form 10-K

for the year ended December 28, 2018 along with other reports that the Company has on file

with the Securities and Exchange Commission.

2

3

OUR VISION

INSPIRING HEALTHY LIFESTYLES

THROUGH WHOLESOME AND

CONVENIENT PRODUCTS

4

AGENDA

Strategic Direction

Fresh Del Monte at a Glance

Industry Dynamics Looking into the Future

Strengths We Are Building On

Financial Overview

5

FRESH DEL MONTE

AT A GLANCE

1892 1989 1996 1997

Del Monte®

brand established

Fresh business separated from canned

Del Monte Fresh Produce acquired by current management

Introduced the first new pineapple variety in more than 15 years; the Del Monte Gold®

Extra Sweet Pineapple

IPO NYSE

FRESH DEL MONTE AT A GLANCE

6

1999 2004 2008 2013-14

Expanded “value-added” to include fresh-cut fruit and vegetables

AcquiredDel Monte FoodsEurope

Acquired Caribana, substantially increasing Del Monte®

branded banana and Del Monte Gold®

pineapple production in Costa Rica

Acquired tomato agricultural production land in Florida and Virginia

Acquired additional production land in Costa Rica & Nicaragua & expanded Philippine banana production


7

2014 2016 2017 2018

Launched a protein line in our Dallas facility and rolled out protein salads and snack offerings that include fresh fruit & vegetables

Del Monte Fresh Produce opened its first distribution center and fresh-cut facility in Canada

Acquired blueberry and deciduous farms in South America

Announced new joint ventures with Del Monte Pacific Limited in retail & refrigerated grocery products

Invested in Panama’s banana production

Acquired Mann Packing Company, a leading supplier of fresh vegetables, an equity investment in plant-based meal kits

Made a strategic partnership with Greener Farms


8

9

North America

South America

Central America

Europe & Africa

Middle East & North Africa

Asia Pacific

WORLDWIDE BUSINESSOne of the world’s leading

vertically-integrated producers,

distributors and marketers of fresh

and fresh-cut fruit and vegetables

as well as a leading producer and

distributor of prepared fruit and

vegetables, juices, beverages,

snacks and desserts in Europe,

Africa and the Middle East.


10

CONTINUALLY EVOLVING COMPANY

PRODUCT RANGE Commodity Producer More than 100 products

SOURCING Limited Global basis

DELIVERY SYSTEM Truckload shipments2 Distribution Centers (“DC’s”)

Truckload shipments, Just in Time (“JIT”),

Direct Store Delivery (“DSD”),

Global DC’s & Fresh-Cut Ops (“FCO’s”)

LOGISTICS Chartered Vessels Owned & chartered vessels

CUSTOMERSPredominantly Retailers & Wholesalers

Retailers, Club Stores, Convenience, Petro Stations, Quick Serve Chains, Food Service

THEN NOW


FUTURE

Value-added products

Del Monte controlled farms & JV’s

Containerized ripening

6 new vessels

Partnerships & F&B’s

40,500EMPLOYEES GLOBALLY

50WORLDWIDE DISTRIBUTION CENTERS (NORTH AMERICA: 32)

WORLDWIDE BUSINESS 24

FRESH CUT OPERATIONS(NORTH AMERICA: 15)

18F&B STORES

9OWNED VESSELS 7CHARTERED

VESSELS


11

Name TitleYears at

FDP

Mohammad Abu-

GhazalehChairman and CEO 22

Youssef Zakharia President and COO 19

Eduardo Bezerra Senior Vice President and CFO 1

Marlene Gordon Senior Vice President – General Counsel and Secretary 1

Helmuth Lutty Senior Vice President – Shipping Operations 22

Jorge PelaezVice President – CECAB* (Colombia, Ecuador, Central America &

Brazil)33

Danny DumasSenior Vice President – North America Sales, Marketing and Product

Management21

Annunciata Cerioli Senior Vice President – North America Operations 1

Sergio Mancilla Vice President – South America 22

Gianpaolo Renino Vice President – Europe and Africa 15

Mohammad AbbasSenior Vice President – APMENA (Asia Pacific, Middle East and North

Africa)12

Martha Jeifetz Senior Vice President and Chief Human Resources Officer 1

Hans Sauter Senior Vice President, Corporate R&D, QA and Agricultural Services 31


EXPERIENCED AND RESULTS ORIENTED MANAGEMENT

12

13

Prepared Food8%

Other Fruit, Products & Services

3%

Bananas38%

Gold Pineapple11%.

Fresh-Cut Products

21%

Non-Tropical Fruit5%

Avocados7%

Melons3%

Tomatoes1%Vegetables

3%

4% 6%

15%

75%

Other Melons

Pineapples Bananas

1996 2018

EXPANDED PRODUCTS PLATFORM

Net Sales by Product

Net Global Sales of $1.2 Billion Net Global Sales of $4.5 Billion


THEN AND NOW!

14

1996 2018

INTERNATIONAL EXPANSION

Net Sales by Region

Global Net Sales of $1.2 Billion Global Net Sales of $4.5 Billion


THEN AND NOW!

*US Dollars in Millions

North America $2,871.3

Europe $653.7

Middle East & North Africa $445.6

Asia $465.7

Asia10%

Europe15%

MENA10%

Other1%

North America

64%

Asia 13%

Europe35%

Other3%

North America

49%

15

INDUSTRY DYNAMICS

16

LOOKING INTO THE FUTURE

“Land is scarce and will become scarcer as the world has to double food output to satisfy

increased demand by 2050. With limited land and water resources, this will automatically lead to

increased valuations of productive land.”

SOURCE: Joachin von Braun, International Food Policy Research Institute

17

6,000

6,500

7,000

7,500

8,000

8,500

9,000

9,500

2013 2023 2033 2043

Mill

ion

s

GLOBAL POPULATION

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

1900 1994 2050

FARM ACREAGE PER CAPITA

Source: Food, Land, Population, and the US Economy –

Cornell University / Instituto of Nazionale della Nutrizione (1994)

Source: The United Nations (2010)


18


“Fruits and vegetables are expected to continue experiencing growth in

niche areas as consumers persist in seeking out novel flavors from

around the world. Increases in disposable personal income will support

purchases of premium fruits and vegetables, including non-G.M.O.,

organic, and locally grown types. Also, marketing strategies focusing on

health and the delicious taste of fresh produce will help fruits and

vegetables to expand their appeal and per capita consumption.”

SOURCE: Food Business News 2017

19

STRENGTHS WE ARE BUILDING ON

20

✓FIRST to introduce premium gold pineapple

✓FIRST to complete a national distribution network

✓FIRST to launch a national fresh-cut fruit network

✓FIRST to achieve Global G.A.P.

We were the…

LEADER & PIONEER IN CONSUMER & INDUSTRY TRENDS


INDUSTRYLEADER

21

RESEARCH & DEVELOPMENT

Source: USDA- 2013 Fruit and Fruit and Tree Nut Yearbook

1996:Introduction of Del Monte Gold®Extra Sweet Pineapple


MOST INNOVATIVE FRESH PRODUCE COMPANY

22

A LEADING MARKETER OF FRESH PINEAPPLES WORLDWIDE


LEADING MARKET POSITIONS

A LEADING MARKETER OF FRESH-CUT FRUIT IN THE U.S, CANADA, JAPAN, U.K., UAE & SAUDI ARABIA

A LEADING MARKETER OF BANANAS WORLDWIDE

23


THE DEL MONTE® BRAND

Widely recognized food brand

Leadership positions

across several categories

Global footprint

127-year history

HIGH BRANDRECOGNITION

24

BROAD APPEAL• Transferability of brand to new

products and new categories

• Ease of entry into new markets

• Greater acceptance at a lower cost of entry

HEALTH & WELLNESS• No artificial ingredients

• Fresh, high quality products

• Better-for-you attributes

• Toddlers to retirees


THE DEL MONTE® BRAND

25

OF OUR FRESH

PRODUCE WAS

GROWN ON

COMPANY-

CONTROLLED

FARMS

NORTH AMERICA

▪ Fresh & fresh-cut fruit and vegetables

▪ Prepared food

▪ Protein salads & snacks


PRODUCTION & SOURCING

ACRES UNDER

PRODUCTION111,944

ACRES

OWNED67,464ACRES

LEASED44,480

45%

MEXICO

Sourcing

▪ Avocados

▪ Vegetables

26



OF OUR FRESH

PRODUCE WAS

GROWN ON

COMPANY-

CONTROLLED

FARMS

CECAB*

Sourcing

▪ Bananas

▪ Pineapples

▪ Melons

▪ Mangos

▪ Plantains

▪ IQF

▪ Coconuts

Greenhouse

▪ Tomatoes

▪ Bell peppers

▪ Cucumbers

▪ Other vegetables

ACRES UNDER

PRODUCTION111,944

ACRES

OWNED67,464ACRES

LEASED44,480

45%

SOUTH AMERICA

Sourcing

▪ Avocados

▪ Non-tropical

▪ Berries

27



OF OUR FRESH

PRODUCE WAS

GROWN ON

COMPANY-

CONTROLLED

FARMS

MENA

▪ Fresh & Fresh-cut fruit and vegetables

▪ Prepared food

▪ Poultry & meat45%

28



OF OUR FRESH

PRODUCE WAS

GROWN ON

COMPANY-

CONTROLLED

FARMS

EUROPE

▪ Fresh & Fresh-cut fruit and vegetables

▪ Prepared food

45%

29



OF OUR FRESH

PRODUCE WAS

GROWN ON

COMPANY-

CONTROLLED

FARMS

AFRICA

Sourcing

▪ Bananas

▪ Pineapples

▪ Prepared food

45%

30



OF OUR FRESH

PRODUCE WAS

GROWN ON

COMPANY-

CONTROLLED

FARMS

ASIA

▪ Bananas

▪ Pineapples

▪ Fresh-cut fruit

▪ Non-tropicals

45%

31


SUSTAINABILITY

Planet

• Efficient use of resources and inputs

• Waste management and recycling

• Sustainable agriculture and integrated pest management

• Protection and management of conservation areas

People

• Health, safety and wellness of employees and community

• Employee training and development

• Fair and ethical labor practices

• Improvement and development of communities where we operate

Product

• Certification under internationally accepted standards

• Engage our suppliers in adopting practices that support our sustainability goals

32

To demonstrate compliance with international regulations and standards on environmental protection, food safety and social accountability, our farms and our facilities are certified by one or more of the following standards:


QUALITY AND SAFETY

▪ Global GAP

▪ ISO 14001 and ISO 9001

▪ SCS Sustainably Grown

▪ OHSAS 18001

▪ SIFAV

▪ Rainforest Alliance

▪ PrimusGFS

▪ FSSC / ISO 22000

▪ SQF

33

▪ Certifications carried out by external and internal parties are conducted on a regular basis

▪ On-going training in all areas of quality and safety

▪ Trained quality control professionals – Chemistry, Microbiology and Agricultural Services


QUALITY AND SAFETY

34

A Key Differentiator

▪ Quality control

▪ Value-added services

Sourcing


UNMATCHED SCALE & SCOPE

Shipping Ports

Value-Add

Consumers Customers

35

OUR GROWTH STRATEGY

▪ Leverage powerful, vertically integrated infrastructure

▪ Pursue strategy of diversification

- Expand geographic presence

- Grow existing product lines

- Enter new distribution channels – closer to consumers

- Accelerate addition of new, higher value-added products

▪ Minimize dependence on bananas

▪ Capitalize on Del Monte® and Mann’sTM brand

▪ Increase market share and leadership position

▪ Cost management and efficiency improvement

36

37

Maximizing Revenues From Our

Existing Infrastructure to Increase Volume and Reduce Costs

Logistics

▪ Reefer vessels, containers and trucks

▪ Higher-margin products essentially ride for free

STRATEGY IN ACTION

LEVERAGING INFRASTUCTURE

MAXIMIZE

Agricultural land

▪ Increase our own production versus independent growers

Distribution, fresh-cut and protein facilities and Food & Beverage Stores

▪ Streamline operations, further leverage sales capabilities

38

STRATEGY IN ACTION

LEVERAGING INFRASTUCTURE

39

Example:

DEL MONTE® NORTH AMERICA FRESH-CUT GROWTHN

et

Sale

s in

Mill

ion

s (U

SD)

STRATEGY IN ACTION

GROW EXISTING PRODUCTS

40

STRATEGY IN ACTION

FRESH-CUT PRODUCTS

STRINGENT FOOD SAFETY STANDARDS

GROW MOST OF OUR OWN RAW MATERIAL

COLD CHAIN CONTROL

VALUE-ADDED SERVICES

RELIABLE YEAR-ROUND DELIVERIES

COMPLETE INFRASTRUCTURE

TRENDS PLAY TO OUR STRENGTHS

41

Net

Sal

es in

Mill

ion

s (U

SD)

$329

STRATEGY IN ACTION

GROW EXISTING PRODUCTS

Example:

DEL MONTE® NORTH AMERICA AVOCADO GROWTH

42

Large Market Opportunity To Meet Evolving Customer Needs Through Traditional And New Distribution Channels

Consumers• Desire for convenience

• Pre-washed and pre-packaged

• Healthy and on-the-go

• Ready-to-eat/use

• Food & Beverage Stores

Food Service• Premeasured &

customized packaging

• Health and wellness

• Food safety

STRATEGY IN ACTION

43

GROWTH THROUGH EXPANDEDDISTRIBUTION CHANNELS

Retailers

Food Service

Casual Dining & Quick Service

Convenience Stores

Warehouse & Club Stores

STRATEGY IN ACTION

DISTRIBUTION CHANNELS

44

STRATEGY IN ACTION

KEY PRODUCTS AND PACKAGING

45

▪ Increases product portfolio and scale of Del

Monte® brand

▪Opportunity for each partner to share expertise

and optimize economies of scale

▪Settlement of all active lawsuits in the United

States between the parties centered on

licensing rights and distribution

Growth Opportunities – Del Monte

Fresh Produce North America and

Del Monte Pacific Limited

Joint Venture OwnershipProduct

Category

FDP DMPL

Del Monte Food &

Beverage

100% - Retail F&B

Stores

Del Monte Chilled Juice 51% 49% Chilled juice

Del Monte Refrigerated

Fruit Products

49% 51% Extended shelf

life, refrigerated

and chilled

fruit products

Del Monte Avocado /

Guacamole Products

49% 51% Extended shelf

life, refrigerated

avocado

products such as

guacamole

STRATEGY IN ACTION

JOINT VENTURES

Del Monte Fresh Produce North America now

has the rights to place the Del Monte® brand

on several items previously sold under their

second-tier brands.

In addition to the joint ventures, the

companies have entered into a long-term

mutual supply agreement to accelerate

expansion of Del Monte® products sales in

various markets around the world.

46

The Del Monte®

BrandFood and Beverage Stores

STRATEGY IN ACTION

Food & Beverage Stores

46

47

▪ Leading supplier of fresh vegetables

▪ Best known for innovation

▪ Customers are household names in North America retail channel

▪ Food service customers are some of the nation's largest

▪ Diversified revenue base - commodity products, value-added and co-pack

▪ Acquired in February 2018

STRATEGY IN ACTION

ACQUISITION

GROWTH OPPORTUNITY

48

STRATEGY IN ACTION

ACQUISITION

Known Industry-wide

Value-Added High Margin Products

Healthy Food Trends

Transcends All Channels

Leading Innovator

49

STRATEGY IN ACTION

ACQUISITION

SYNERGIES &OPPORTUNITIES

Mann’s fresh-cut vegetables complement Del Monte’s fresh-cut fruit

Better “own the shelf” with a wider assortment of product offerings

Leverage Mann’s retail sales team

Leverage Mann’s marketing expertise and “spirit of innovation”

Leverage Del Monte’s distribution network and infrastructure

Leverage Del Monte’s presence in club and warehouse stores, in casual dining, convenience stores and quick-serve restaurants

Leverage purchasing power

Leverage Del Monte’s farming presence and expertise in Guatemala to supplement products from Mexico "winter" production

50

SELECTED FINANCIAL HIGHLIGHTS

51

INVESTMENT HIGHLIGHTS

FINANCIAL PERFORMANCE

Clear growth strategy – outstanding

execution & momentum

Positioned like no one else –

vertically integrated & innovative

Respected – global brand that speaks to quality,

freshness and reliability

Global player

Commitment to long-term value

STRONG FOUNDATION BUILT ON DIVERSIFICATION

51

52

* Excludes asset impairment, restructuring charges & gain/(loss) on the sale of assets.Figure in USD (millions)


SUMMARY DATA

53


FRESH & VALUE-ADDED PRODUCTS


(1) Fresh & value added products includes pineapples, melons, tomatoes, non-tropical fruit, avocados, fresh -cut fruit & vegetables, prepared fruit &

vegetables, juices, other beverages, prepared meals, snacks & other fruit & vegetables.

(1)

54


BANANAS


55

$2.73 $2.43

$4.74

$2.43

$0.44

$0.14

$0.35

EARNINGS PER DILUTED SHARE

* Excludes asset impairment, restructuring charges & gain/(loss) on the sale of assets.

56


ADJUSTED EBITDA

$244 $219

$340

$233

$161

$29$49


57


OPERATING CASH FLOW

$231 $231

$332

$194

$247 $271

$130

Figure in USD (millions)

58

Investing in diversification and expansion

Repurchase Program

▪ $811 million spent between 2010 and Q3 2019

Dividend Policy

▪ Declared cash dividend of $0.08 per share October 29, 2019

Total Debt

▪ End of Q3 2019 $590 million

Capital Ex – Q3 2019 $94 million

Fig

ure

in U

SD

(mill

ions)

DEBT

Cap-Ex

Fig

ure

in U

SD

(mill

ions)


DEBT & CAP-EX

$267 $254 $232

$358

$662

$-

$200

$400

$600

$800

2013 2014 2015 2016 2017 2018 2019

$149

$132

$147

$139

$151

2014 2015 2016 2017 2018

59

APPENDIX

60

APPENDIX

INCOME STATEMENT


39 (11) 27

61

Non GAAP Measures

APPENDIX

The Company's results are determined in accordance with U.S. generally accepted accounting principles (GAAP). Some of the

information presented in this press release reflects adjustments to GAAP measures such as amounts related to restructuring,

asset impairment and other charges, net, gain on disposal of property, plant and equipment, net, and certain other special items,

if any. Management believes these adjustments provide a more comparable analysis of the ongoing operating performance of

the business. These adjustments result in non-GAAP financial measures and are referred to in this press release as adjusted

gross profit, adjusted operating income, adjusted net (loss) income and adjusted net (loss) income per diluted share. Because

all companies do not use identical calculations, our presentation of these non-GAAP financial measures may not be comparable

to similarly titled measures used by other companies.

Adjusted gross profit, adjusted operating income and adjusted net (loss) income provide us with an understanding of the results

from the primary operations of our business. We use adjusted operating income and adjusted net (loss) income to evaluate our

period-over-period operating performance because management believes they provide more comparable measures of our

continuing business as they adjust for special items that are not reflective of the normal earnings of our business. These

measures may be useful to an investor in evaluating the underlying operating performance of our business because these

measures:

1. Are used by investors to measure a company's comparable operating performance;

2. Are financial measurements that are used by lenders and other parties to evaluate creditworthiness; and

3. Are used by our management for various purposes, including as measures of performance of our operating entities and as a

basis of strategic planning and forecasting.

62

APPENDIX

INCOME STATEMENT

63

APPENDIX

INCOME STATEMENT

1. Other charges, net for the quarter and nine months ended September 27, 2019 related to inclement weather in Central America. Other charges, net for the quarter and nine months ended September 28, 2018

related to restructuring charges in South America.

2. Asset impairment and other charges, net for the quarter ended September 27, 2019 primarily related to impairment charges in low producing areas of the Philippine banana operations. Additionally, asset

impairment and other charges, net for the nine months ended September 27, 2019 primarily related to impairment of an equity investment and other immaterial impairments. Asset impairment and other

charges, net for the quarter ended September 28, 2018 included restructuring activities in Asia, Central America and South America. Asset impairment and other charges, net for the nine months ended

September 28, 2018 also included restructuring costs related to Asia and South America and acquisition costs in North America.

3. Gain on disposal of property, plant and equipment, net for the quarter and nine months ended September 27, 2019 primarily related to gains on sale of underutilized tomato assets in North America.

Additionally, the nine months ended September 27, 2019 also included gains on sale of vessels and disposal of other assets. Gain on disposal of property, plant and equipment, net for the nine months ended

September 28, 2018 primarily related to a gain on sale of property and assets in Europe and South America offset by asset disposals in South America due to restructuring activities.

4. Gain on settlement of litigation for the quarter and nine months ended September 27, 2019 was $16.0 million with proceeds of $17.0 million, net of expenses of $1.0 million. Loss on settlement of litigation for

the quarter ended September 27, 2019 was $0.7 million related to other miscellaneous expenses. The tax effect on the (gain) loss settlement of litigation for the quarter and nine months ended September 27,

2019 was $0.2 million and $4.1 million.

64

APPENDIX

INCOME STATEMENT

1. Other charges, net for the quarter and nine months ended September 27, 2019 related to inclement weather in Central America. Other charges, net for the quarter and nine months ended September 28, 2018

related to restructuring charges in South America.

2. Asset impairment and other charges, net for the quarter ended September 27, 2019 primarily related to impairment charges in low producing areas of the Philippine banana operations. Additionally, asset

impairment and other charges, net for the nine months ended September 27, 2019 primarily related to impairment of an equity investment and other immaterial impairments. Asset impairment and other charges,

net for the quarter ended September 28, 2018 included restructuring activities in Asia, Central America and South America. Asset impairment and other charges, net for the nine months ended September 28, 2018

also included restructuring costs related to Asia and South America and acquisition costs in North America.

3. Gain on disposal of property, plant and equipment, net for the quarter and nine months ended September 27, 2019 primarily related to gains on sale of underutilized tomato assets in North America. Additionally,

the nine months ended September 27, 2019 also included gains on sale of vessels and disposal of other assets. Gain on disposal of property, plant and equipment, net for the nine months ended September 28,

2018 primarily related to a gain on sale of property and assets in Europe and South America offset by asset disposals in South America due to restructuring activities.

4. Gain on settlement of litigation for the quarter and nine months ended September 27, 2019 was $16.0 million with proceeds of $17.0 million, net of expenses of $1.0 million. Loss on settlement of litigation for the

quarter ended September 27, 2019 was $0.7 million related to other miscellaneous expenses. The tax effect on the (gain) loss settlement of litigation for the quarter and nine months ended September 27, 2019

was $0.2 million and $4.1 million.

65

APPENDIX

CASH FLOW


66

APPENDIX

BALANCE SHEET

Figure in USD (millions)

67

THANK YOU!

fresh del monte produce inc.s22.q4cdn.com/651150316/files/doc_presentations/... · the factors...

Documents