UVV - Earnings call transcript Q4 2021

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Operator

Good day, and thank you for standing by. Welcome to Universal Corporation Fiscal Year 2021 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. now today, hand Ms. would to conference I speaker your Instructions] like the to over [Operator Candace Vice Formacek, President and Treasurer. Thank you. Please ahead. go

Candace Formacek

webcast Meika, available on call may this and Chief recording, will in these the any and Officer, Operating are all website join you and This Johan George call. me be President and XXXX. through with our It is authorized Chief us will on copyrighted for remarks. live of Officer; our without used than CEO; replay. brief you, Financial be our and August replay our call is telephone evening. and Chairman, Freeman, after me or for Hentschke, answering remain permission. replay, Other not Airton here website not being questions responsibility taped we distribution Kroner, this have will This our Thank joining on and of thank our today disclaim transcription XX, any and

Before and length we our the only. or impacts and we particular on materially statements. will as and are today This I severity forward-looking note to the estimated is representative business results, caution assume when predict. could update you of and and results some based making of COVID-XX are so ongoing during obligation no our any that economic discuss resultant pandemic, forward-looking are statements that from difficult knowledge the to crisis about begin current projected the be and of assumptions future I differ Actual current results, to

file XX-K XXXX, XX-K March the well the SEC urge estimates can that ended as our to which changes March and taxation, Such factors later ended with economic you XX, the to, our as of exchange shipments, changes some year of on to ongoing regulation year XXXX expect week. sources. political environment, our industry interest read pandemic, the information we in weather I for XX, and rates, for and conditions, Form market include, For limited but not consolidation rates the structure and and are customer-mandated government risks uncertainties or evolution this COVID-XX timing in and affect

based Finally, have and include an some investors, useful may to information allocations today subject is effort is of information our In unaudited comments reclassification. to for measures. on you non-GAAP I provide the to financial today

including details reconciliations comparable to most current measures, on our GAAP to measures, these please the For earnings press refer release.

up report year earnings year to We XXXX. favorable pleased addition that fiscal and Strong and in our adjusted leaf share, our currency XXXX, are tobacco shipments year are income ingredients over the fiscal results. in per all of foreign acquisitions, plant-based our non-GAAP and to contributed this the all for compared net XX% to second comparisons diluted operating half income fiscal improvement of our XXXX,

the proud were how for the pandemic, business, these that our We would like and second partners desired tobacco by deliver and our successful mandates, hard travel which work-from-home in we the other in this we employees, adjustment to leaf below we that volumes delayed tobacco earlier leaf protocols, safety in the able to some half increased fiscal slightly XXXX, including to our COVID-XX leaf adaptability, successfully tobacco with year, just part fiscal thank year in shipments delivered the fiscal conduct those of year. customers, XXXX. shipments, support, the ship will in were and are year and the year that results in year. slowly ended restrictions customers. started were necessitated a due challenges that Leaf tobacco global growers, that especially midst their of to We and work made accelerated tobacco Despite

Silva of the plant-based our strategy delivered build capital the our XXXX. ingredients also objective to enhance acquisition of and fiscal third in on platform International quarter year allocation We through

the our In well quarter segment We on prospects in ingredients to conditions and $XX continue are leaf year year our currencies of to our integration our significantly Ingredients and platform year sheet with range, fourth uncommitted fiscal progress Operations our in for compared of the XXXX, at million performed new fiscal burgeoning about strong the XX, uncertain XXXX, respectively, excited related fourth the target ended and process. balance categories. XXXX largely the comparisons, quarter quarter year human objectives remeasurement, XXXX, weakened food positive the ended just of periods inventory non-cash $XX foreign over and March due year In same against pet a We fiscal COVID-XX tobacco to and XX%. from pandemic. the net mostly fiscal currency million, both in we Certain its to currency benefited levels XXXX. market

our pleased dividend In annual today, XXst have in addition growth to investments increase we are value. our opportunities, our also announced commitment to shareholder to delivering continuing

million, for $XX.X ended was $X.XX diluted fiscal per March compared ended $X.XX income for year share, $XX.X the or now fiscal XX, Turning the XX, XXXX. Net share, the year to or million, with diluted March per details. XXXX,

items, in $XX.X year Excluding XX, XXXX. for income $XXX.X by for in increased release income XX, quarter XXXX, the million fiscal $XXX.X ended compared Net detailed or $X.XX earnings for items $XX.X to $XX.X diluted $X.XX, and for with per $X.XX impairment net XXXX. operating per million, million income to of today’s was share, $XX.X operating year today’s in March and restructuring share, million fiscal costs items million of XXXX. or release, and the other March compared ended year income fiscal increased by earnings and Adjusted year for million, diluted quarter earnings XXXX, fiscal per respectively, share certain net detailed other non-recurring income in of diluted other adjusted compared XXXX,

three March for the same fiscal year the today’s increased and other Consolidated $XX.X businesses ended million the XXXX, of per respectively, to fourth addition in on year decreased ended and ended net certain release, periods the $XX.X costs $X Operations impairment and in segment, quarter earnings by revenues part items, million XXXX, the and XX, non-recurring for restructuring tobacco year, in $XX.X the income $X.XX, prior offset the XX, by to to increased million XXXX. months diluted March of compared billion calendar comparative Excluding XXXX, detailed by share the fiscal by in volumes. acquired year shipment quarter and earnings in Ingredients to XX, March $XXX.X compared XXXX million lower leaf for

XXXX, compared for year currency volumes million segment in in mainly in remeasurement segment. segments, XXXX. XX, remeasurement on the fiscal and that general, both some partly benefited wrapper million administrative well XXXX, the $XX.X quarter Operations the ended compared to of results fiscal for to XXXX, March and Selling, mix comparisons in were XXXX, were Tobacco higher the while and product quarter A for March as up ended and XX, carryover sizes XXXX. fourth demand the Brazil the United In strong for lower year fiscal year fiscal segment occur Tobacco results when fiscal $XX.X XXXX, $X.X respectively, $X.X of as year XXXX. to African crop Brazil. the improved some drastically million the due largely currencies year the to the XXXX, XXXX, Operations including fiscal $XX.X million mainly to will tobacco to segment million, year as accounting sales quarter as volumes XXXX, decreased XXXX. to reduced reduced March reduced Operations XX, comparisons, the net and crop million fiscal to increased favorable fiscal for Turning uncertainties largely volumes, year and to by compared periods and income strong results with fiscal for compared foreign ended in for of fiscal by income Tobacco quarter million, from Operating the that which pandemic. XX, and the also up and for quarter $XXX.X million XXXX. operating benefited of Leaf States of respectively, In loss segment will prior included million Ingredients foreign acquisitions, XXXX, benefited million and year to segment in in caused largely quarter delayed weakened in in for same quarter Favorable year An quarter Operations ended and of the remeasurement $X.X segment year on continued in Indonesia and $X.X the costs sales shipments totaled on shipments the and fiscal well lower of Africa compared XXXX, year strong favorable for tobacco the weather shipment the volumes continued quarter currency fiscal the compared quarter and tobacco, fourth purchase million the million, Tobacco related currency were favorable segment was to March March an fiscal XX, fiscal Ingredients ended comparisons, Operations also compared intangibles year March fiscal mix for $X.X and XXXX, by In same due the quarter results volumes respectively, the modestly year, amortization COVID-XX for XXXX. same of Results the year the demand fiscal the operating Operations, fourth the March the segment. product wrapper March year. and year quarter ended $X.X to $X.X $X.X XXXX, prior and the in fiscal for ended were ship from market XX, the certain adjustments our costs that XX, results XXXX, year ended XX, in segment

in from COVID-XX due Our year during in to resulting the changes Ingredients customer fiscal Operations changes pandemic. saw ongoing some mix XXXX product demand

declined, In began for expenses fiscal for from see businesses. grocery the food increase While negatively pet impacted and demand year items XXXX, addition general, by fourth demand social and to increased used restaurants the service, of on such in our in we we and were recover Selling, COVID-XX. administrative used for ingredients foods. venues as the which quarter demand the certain saw year and for acquired fiscal sectors, in quarter ingredients products products of

be As XXXX, position. with global expect we year the in tobacco undersupply line fiscal slight anticipated to supply flue-cured and currently for to a in we tobacco be move burley for leaf leaf demand into

are to our which commitment cost fiscal in which continuing sustainability showcases year we limited due a the responsibility social of your costs standards to and are on fiscal to will year report supply this continue COVID-XX to resulted pandemic sustainable past annual our has container sustainability I and our patterns, available support website. our We will of is to freight strong on turn in increases performance set initiatives Report that availability. our second environmental our key deliver chain. success. our the Sustainability monitor to disrupted call our a At high from XXXX we published to time, XXXX, component Meika, and future belief take fundamental The We questions. In programs to shipping you. back as stakeholders stems to

Operator

Thank you. comes Instructions] Ann first Co. & Gurkin from Davenport question [Operator the Your line from of

Your open. line is now

Ann Gurkin

everybody. to evening Good

George Freeman

Hey, Ann.

Johan Kroner

Ann. Hey,

Ann Gurkin

impressive very for a was number gross That margin year. the

talked about there else that You wrapper. in anything Is and carryover tobacco the XX.X%?

George Freeman

No. the well. Insightful over helped seen and of that very mix efficiency. restructuring as have have some hard looking been that at at we we so and we're years, certainly last have cost looking done couple that And constantly, you

Ann Gurkin

we think go should number? I XXXX, that how as into And fiscal forward about

George Freeman

all as compared the prior The positive really right? the mix, on mix year. It to was depends

wrapper looks mix demand So all that it what like is The still going there. on forward. depends

So it looks positive.

Ann Gurkin

those help with was about expense, fiscal was fiscal interest XXXX Can should SG&A revenues? CapEx, expense, me higher think all for much How factors? I which I you components looking of in than XXXX any Okay. at

George Freeman

things million we've we made took and later out additional there was be this we Well, there's up in will extra some filed of week. pointed had The $XXX also interest that There this an reason would and be that XX acquisition was we'll that out the pointed certainly on year. Certainly, the because that a that the couple pointing CapEx be to in XX-K XX. was out. we related

million. $X.X about was it think I

So With but really good, regard it tobacco forward, couple things in there. looks business going of to there's a on. the early it's

So we'll works it all out have XXXX. for how fiscal itself to see year

Ann Gurkin

XXXX Okay. impact, continue The that within a component? $X.X fiscal one-time that does million or is

George Freeman

one-time impact. a was year That fiscal XXXX

Ann Gurkin

Okay. That helps.

number Do – working businesses. any talked I kind then Great. give synergies asked the on Okay. all acquired last more about recent you to quarter your among synergy about of acquisitions? any detail you have And among

Airton Hentschke

we to What around will continue out focused is continue to we help we which of what trying we're any on overlap other still and that use each is told the be two that, integration, is companies really ongoing. determinate you last the we'll there there to marketing time groups can very to that do

all there that as numbers yet, there's well. looks but So real just to no positive

Ann Gurkin

Okay.

Sorry, George.

George Freeman

looks – was going somebody going say positive, I it. to just it said say I'm to

Ann Gurkin

Great. number? Candace, do you have a worldwide uncommitted inventory

Candace Formacek

I as it's XX, million Yes, is number is XX/XX/XXXX do. March down XX number. of from million XX kilos, The which the

Ann Gurkin

on any update you're thinking about over couple And then of you how the or Okay. review share next years? repurchase how

Johan Kroner

the have but is will right that, and a if pricing million other all we're at there. hard looking we we the And it, ingredients more on at Well, take Tobacco focused investing the in business platforms. $XXX out opportunities on look and

So the moment. at priority that's the

George Freeman

And, of course, dividend. maintaining that

Johan Kroner

XXX%, George.

Ann Gurkin

non-tobacco target to you ideal to that of thought had businesses. you I add mix platform? or for Are looking reached still your kind

Johan Kroner

– that the EBITDA there to the allocation The really and is Yes. XXXX Ann. XX%. for our – We still XX% wanted we fiscal and Again, target XXXX active, in was certainly capital strategy. out pipeline put

we I these two. that reached have with think

have large we two back we certainly step on and So a taken taken have company. fairly

we're again, comes company taking pause, if the a along, So but we'll at right it. look certainly

Ann Gurkin

Okay. big could of one end All hearing – they your just in to that is combustible strategy, customers smokers keep they non-combustible. convert I then cigarette term maybe right. things. a say fill more Japan, decade, longer to sales look up in A saying from And

leaf you larger Was business you assets your that? how global How strategy of one So vision of that position do from kind do address overreaching customers? your capacity?

Airton Hentschke

combustible of the all cigarillos, support We in market role Universal as And and supports categories. I cigars, look support heat-not-burn think segments. we all that the we premium that support shisha way cigars, product these at or the multi-category market cigarettes. to a We vaping play is first mass a Leaf well. smokeless

pretty has been we So positioned at if continue believe price, at you with part consistent we these sales we we'll volumes. product been continue strategy. And think segments. well market all quality what we sales have I years, declining performing, happened, as have on a is gaining we XXXX. look of for and share, you that at as competitive And cigarette material these big long if throughout are the executing raw way and yearly since our services positioned delivering look a And that our a be all

Ann Gurkin

That's all very you Thank great. That's much. very helpful.

George Freeman

Thanks, Ann.

Candace Formacek

Thanks, Ann.

Operator

Sroufe Your from Lesa next & question of comes line Sroufe from Lesa the Co.

open. now is line Your

Lesa Sroufe

just I couple you. of a Thank have questions.

how a certain basically talk at you countries been could Southern terms American all, has – couple shipping more it your may is of or there's and First sounds like improved? power, address next is the And have the questions. it – power business? And your I'm The if question in of risen. you'd the of I you drought that affect pricing and hemisphere containers of wondering have in costs mentioned supply? in Are looking that for then pricing on availability

Airton Hentschke

now and Africa, plan. ago. is with is condition a any going question. being tobacco. so operating just right harvest. to companies it's Let some the have to the these different And on Tobacco has areas. that far not plant. a weekend, been and Brazil tobacco ourselves. And is from And American What next started it's Overall, is we driest in in very affecting our rains It we And don't they May right. according the according buying in conditions first But the using weeks irrigation. seen extreme the We me month to get Tobacco marketed have two, professional there. farmer should our here has venture in been see very operations. one time – the is a for is especially three like U.S. Weather farmers time agriculture been in the answer in transplanting of weather farmer, always we experienced challenge resilient now history. and

The shipping rising related our the second costs business. question to impacting

But it that vessels, closely are of is monitoring FOB, or and here side What of availability our business lack to situation. by Universal proactive departments, some areas the containers with also meaning disruption costs in customers majority important and this of these in have understand we of availability customers. is have the is absorbed normally these We can can on related the important same or to of shipments coordinating the XXX% our department that activities say the face U.S. those accelerating other shipments and of like to all And logistics that country say the it's to here Asia, that they depending in sales case, at our some very some that impacted that these at that that is Leaf like that could been the logistics that case time, there from we Africa. companies delay some Universal solutions problem. concentrated origins we in rising bottlenecks understand offering origins Like XXX% origin. from solutions and specific where like from more not from been or is costs areas have because we offer up Brazil, like Leaf, been

we our is with are this with the positioning ourselves close and way coordination So a customers.

Lesa Sroufe

or the some because that? bit good have seen tell I highly well picking Could And you business. I you, any I me also company one main large know in are the know you won't financial you share? problems. that leveraged your know. then have and That's about wanted they're change the to ask be to leaf little competitive named, competitor financially market maybe Have up had business, – a in you you landscape strong tobacco are in And

George Freeman

of our I market deliver. our want like believe to the on products because believe situation, we quality would and we do that services we Well, but comment we to up picking competitions, don't financial are of share. it's

Lesa Sroufe

Thank you. Okay.

Operator

at it closing for back Ms. over hand are further will questions any There I this remarks. Instructions] to no Candace [Operator Formacek time.

Candace Formacek

us for thank And forward quarter. we evening. you and joining this to all you Meika, you, in another speaking with will look Good-bye. Thank

Operator

conference you concludes participating. today's Thank for This call.

You may now disconnect.

Universal (UVV) 27 May 212021 Q4 Earnings call transcript