UVV - Earnings call transcript Q1 2025

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, everyone, and welcome to today's Universal Corporation First Quarter Fiscal Year 2025 Earnings Call. [Operator Instructions] Please note, this session is being recorded. [Operator Instructions] And it is now my pleasure to turn the floor over to Jennifer Rowe. Please go ahead.

Jennifer Rowe

Thank you, Jim. us. joining for you Thank me George Freeman, Chief Financial Airton our will and are brief after remarks. Chairman, Officer; and President join and Operating today Chief with CEO; answering Johan questions here these Hentschke, me our in Kroner, Officer, our

being responsibility and the November through disclaim call and authorized any and Other available without than website used we or any will X, on have distribution and our website is not may call. transcription This telephone on taped our be recording, replay of our permission. replay, be not copyrighted on This for replay. webcast live They remain of is call XXXX. this

that to I of current our we results, our differ assume no begin about we knowledge forward-looking estimated caution and I to projected some will any Actual and future only. discuss materially as based forward-looking statements. representative are from and are or update assumptions on that Before could statements results the today you be obligation making results,

conditions, weather but sources. industry regulation some rate and to and in of structure you affect not estimates, risks can or our limited consolidation the XXXX. year uncertainties changes that market March factors timing of urge interest and changes in to, customer-mandated shipments, Such and economic government rates, taxation, include, environment, political and exchange on for XX, our evolution I and ended XX-K read information the are For

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

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

off is year Universal for strong fiscal to start XXXX. our Corporation a

XXXX, compared the $X.X Ingredient $XX.X last XX, or same $XXX.X operating fiscal XX% year. for our XX% both segments, ended up was to Operations million was million, Tobacco the quarter up and million, approximately June while revenue For income quarter

and out our in benefited Our an prices. will the fiscal Coming results revenue believe exceptional tobacco Tobacco driven increase solid for from was year Operations strong support segment XXXX. we fiscal We to customers. segment volumes demand of this demand XXXX, sales continue the for from continued higher by year

to crop Our tobacco customer strategic allowed us well our which decisions positioned certain to tobacco accelerate dynamic us in demand. secure purchasing has meet to contracted markets,

recognition As fiscal in we half will more previous timing expect weighted the tobacco of heavily revenue and that XXXX. years, year shipment towards second related be fiscal

levels global at inventory we XXXX, about remains believe low undersupply in position. and at XX, Our June remained uncommitted XX%, that tobacco leaf tobacco an

with will to Looking closely production. recent elevated farmers contract expect work prices tobacco the next planting that leading coming support potentially promote in provide years. ahead, for incentivize We to guidance and more increase green the markets balanced we to farmers to season, our increased

ended performance, quarter XX, the delivered Operations on our XXXX, Ingredients also June sales volume. primarily During based increased segment improved

for results. fiscal general year. same certain have our and sales in recovery sales the quarter core the our increased revenue platform, with These as positive product demand combined drove increased contributing to compared in increase to New of improvement last ingredients XX% markets segment the products sales, for across

As XXXX. expected, at level XX, debt elevated our June remained

fiscal anticipate processed unwind which at inventory, are As our to during XXXX, total delivered XX, to committed year and working tobacco represented capital XXXX. of tobacco we inventories June XX% customers,

quarter ended increased share. up $XX.X ended XXXX. the Net June $X.X million. XXXX. XX, Operating administrative $X.XX quarter Selling, ended income the per largely XX, general for ended Some for by increased the June million to by quarter and million were diluted unfavorable June quarter financial foreign $X.X for currency and June Net compared comparisons. XX, XXXX, income quarter quarter expenses by for diluted XXXX, of earnings million on the income $X.XX million share $X.X $X.X was per highlights the increased or XX, the in

Some million June segments. XXXX, quarter highlights the Operations $XX.X for Tobacco carryover ended our XXXX. shipments from the operating $X.X tobacco to increased venture. Operating segment the income ended XX, was quarter as XX, for well the compared as million operating to largely XXXX, in our segment on income oriental up ended joint Tobacco for Operations June XX, June earnings higher quarter crop by higher

ended to well $X.X million for for increased segment income XX, Ingredients segment as Operating sales up for primarily included fruit Ingredients results first for quarter year. as XXXX which of to the increased volumes, Operations inventory notably by the quarter some due lower also same purchasing Accelerated customers quarter products sales increases June Results in period new higher XXXX. for products, the up Operations in the was the the were year juices. compared fiscal fiscal write-downs of sales certain segment the of last and core

for the continue to are lines and and expansion Lancaster, well, expansion specialized we second are certifications fully project remains products, our become to and the our research Test to able to in and on enhance facility with commercial runs of operational Pennsylvania progressing the fiscal customers. focus and universal capabilities this processing project, we on track the Along offer year. of the ingredients' half development teams

to expect XXXX. our results in fiscal Ingredients to to year project contribute continue Operations the We meaningfully segment

accuracy calculate them. contingent Universal. our XXXX methods the our of on Scope disclosures targets to we publicly in business credibility to use goal Reducing progress initiative XXXX and the those X are target emission by and towards we the Setting demonstrate a commitment with greenhouse emissions remains ways science-based for disclosing to our impact key committing and the our some gas environmental data sustainability. of meeting targets our is X, X The of

milestones and emissions as that with third-party of emissions X our We are towards goals Scope our we the and data chain as purchased important our These sustainability reinforce X through of methods importance associated announce the pleased well our to transparent X to of we and to and independent verification public our missions. our data dedication our progress Scope tobacco calculate Universal. the received use disclosure supply to

cash our a wide managed and successfully flows market has generated under strong Universal years, conditions. business time XXX over range of over For

continue leverage such localized the We global disruptions, our impact to adverse of as to footprint weather. alleviate

Our world operate the to in responding which proactive to understanding endeavor approach understanding year-over-year. our changing serve our as well we to results will us deep and continue and needs our of deliver consistent customers' we

to your we time, this available At take are questions.

Operator

with Instructions] Davenport from hear Ann We'll Gurkin Co. [Operator & first

Ann Gurkin

terrific a on year. fiscal start your Congratulations to

Jennifer Rowe

Thank you very much.

Ann Gurkin

and talk towards supply to update the comments, we want about for lease and start more move -- I production tobacco a balanced XXXX, environment. your might with estimated of

comments some potential of top think been have going the factors XXXX. customers some of but tobacco moderate segment. your with those how combined for and fiscal tobacco leaf should about indicating your into up, prices, margins was outlook I from that X wondering as So to 'XX look prices combination we forward expected I to

George Freeman

and what in a coming has that's And green different we an little good seeing price point all XXXX, bit But Africa. around Nina, undersupply. we means and X are America La in inflationary now is No, dry Yes. that, globe. X, of the out very which more there. rain course, of some of Brazil generated mild weather South for are And a crops pattern,

production with bring have produce markets, bigger our more increase should Nina our the own So to tobacco the into to balanced a and universally in increase we crops, are La farmers as that situation tobacco and mild key should working industry. a positioned we

Ann Gurkin

'XX? in combination -- margins fiscal and leaf of at more what support the levels keep that that scenario, ability attractive With balanced your does how to price

George Freeman

same We we be we our overall at definitely time, more in price, will scenario, definitely looking our volume would green And a also believe have can this in reduction fixed maintain and in to facilities, process the this at inflationary cost our margins. green tobacco. that reducing

Ann Gurkin

talked what are Europe. you the sheet about release about you that from then production savings consolidating the And effort? me potential in tell Can in cost

Unknown Executive

numbers do go the Certainly, is can't is Most that still there to will we facility and cost to going efficient. exactly bringing look all determine The things the that We $XX That to savings. by noncash. that some other Ann, be what be But we million. talking wasn't cost one number some there of of workers' to restructuring number restructuring. for council see a here. under and exact at million $XX is we're currently between of into roof. that need exact efficiencies

some we to So but going going need be to benefits, what that is certainly, forward. there are see

Ann Gurkin

And will 'XX? those cost fiscal through savings -- potential cost in savings flow

Unknown Executive

That's what we would expect, yes, ma'am.

Ann Gurkin

back And obtaining are having any lease move of containers Great. the half in 'XX? fiscal to you issues the shipping then

George Freeman

we have the and seen Lately, disruptions. some of

in We and have freight overall geographies. some increased logistic seen cost

diligently COVID availability the Of Sea lot course, Middle this managed is Red the are optimistic can some situation very, on think of any over chain. we with And I our to period, much the the we being the -- we constraint Yes. to we customers. East as situation and But worked And strength in very supply related and let's conflict more, containers. very as there. But avoid say, there. a proactive also and

Ann Gurkin

strong that And the tobacco. How think the I for to the for year? see the results oriental nice then of it's about should balance

Unknown Executive

to Ann, a market, there course, loans lot interest with on some paying that the of was around local with, currency and of that last whipping hefty everything. Turkish we're has year, rates -- specifically to regard do

well. last certainly, nice very pop last they see for past. because good start do a the to the so oriental, year, we in more it's But going be line So it's and didn't a expect from to up year with

Ann Gurkin

I How up for in as Hurricane Debby. waiting that should about the Great. think Richmond coast? moves it

George Freeman

all, potentially the affected next be are and Well, our been in couple of will that thoughts all with prayers days. have of first affected and communities the

the to to production far, areas we as the in pattern what The balance but the impact areas are of majority where the project negative path a the of volume in storm those was very evolve. Florida, and so production Georgia production of is small it's early too So continue and located, there know areas. some

a So and picture clear we closely this the monitoring situation, we weekend. by have will are

Unknown Executive

less tobacco the segment of want Ann, note than that our just represents results. -- the XX% I again, to U.S.

Ann Gurkin

Great.

our We fingers will keep crossed.

you do leaf Jennifer, numbers? worldwide tobacco Okay. have uncommitted

Jennifer Rowe

stocks flue-cured million June. and XX at end down of the That's stood Sure. The March. end million kilos the X worldwide of from at burley kilos uncommitted

Ann Gurkin

for And see should margin higher stronger than came that Okay. Ingredients, I up and improvement to that segment. than potential then full your segment. the in nice expecting. have sequentially pick I turning year QX about thought. Nice Ingredients on I think was to would How

So great to that's see.

Unknown Executive

of last That was in driven contracts. a Look, certainly the first improved quarter, year. sale new Yes. by combination they from under of new products primarily

that we starting As sales products, the of our functions the the our stabilization and some finally pay to there. in the commercial and core most team investments it of markets in Keep so of off sales are those the in recovery or over on we and down platform, serve And R&D that also saw a in come areas so. was was in because of have volume nicely. materials quite up year both down raw mind last pricing the bit the sides,

continued but the we expect improvement benefits ramp fiscal impact the we we expect year. new see For in from as project the Lancaster, customer to up year expect expansion year, throughout see to some meaningful 'XX. until see And don't to contracts

again, some year. this So so inventory There last that write-downs, were down. we we started year, out didn't repeat

nice again, up a is seeing the right it's we're going and that volume, nice, So pickup a direction. And nice there. in on pick

So we we that and continue momentum. to that, expect hope

Ann Gurkin

great. That's

the you to year, that fiscal can get end range mid-single-digit So year? the by margins of back

Unknown Executive

hope certainly We so.

Ann Gurkin

new That's me the are products? give you Congratulations. Can What example? an great.

Unknown Executive

have we there. out beverages. moment. customers, be have flavors, There at We different all a number can't is of putting it, kinds lots putting all for we're ] We lots customers. of but in -- we're of signed about we And can't exactly [ NDA, of kinds of endeavor specific exactly the some we so producing were again, things beverages

So a We're it's net. wide really widespread. throwing

we a trying kinds and that spending things. are of R&D on lot up. again, guys different Our money out of all commercial And ramping there been have

next So we into in of of see couple fruit the hope quarters that 'XX. to going the and

Ann Gurkin

quarter. you dollar then this Can give forward some did business looks pull me into And like a you amount? it

Unknown Executive

nice was lines was are see earlier and you anticipated. I Those dollar running. it now than to give we certainly can't that. amount, up No, had a It but

asset. We have for low the the certifications aseptic gotten high both and on the the approvals the and

and -- started have a number produce of to buy or So for product slowly. we customers

fiscal up the into rest see So and hope really that year to the meaningful ramp throughout again, then of year 'XX. we,

Ann Gurkin

that full to SG&A fair? the of a $XXX range we million million. year, Is for have $XXX

Johan Kroner

Yes. Look, we'll up. million. were was the where we about in million. the that was the first $X.XX up there. you variances Normally, quarter, Last give year, FX Certainly, we number $X related, were

year fiscal 'XX. that to in expect number We below come for

Ann Gurkin

And carry was and higher increased tobacco to expense to just the higher debt the you partially -- inventory. due increased the outlined levels

hopefully in back I do and half that you how think So interest as ship the sell about tobacco? that expense

Johan Kroner

interest whether And Yes, have is to do then actually rates right. or do in exactly going see the not what something. later we'll to Fed the year,

later So slightly crop certainly to [ see bought earlier we down the ship hopefully, we in Brazil well. as this expect earlier, origins well. that come in Africa earlier year, certain do leverage by to buying in We ] can as unwind it

we hopefully, expense a So and will that later speed whole interest bring can down, and year. also little just this that leverage up bit help that the

Ann Gurkin

CapEx for And moderated a little bit. looks like that? reason Great. it was Any

Johan Kroner

investments made in some we again, Well, hefty Yes. Lancaster.

all So that is finished. almost

down come So over we time. that expect do to

Ann Gurkin

goals, your that working line, to congratulations Great. that with farmers and work on to see. on grow commented sustainability nice additional along guess crops. globally is against progress And you've your hard same then I on your

if to grow So could a program? wondering your are that that as farmer business. up able out your at opportunities ramp you bit flesh maybe you to I crops you just what base for point could sell And that little was to throughout

Unknown Executive

crops. farmer our farmer part have years, food couple our base, contracted Ann, the of our base last programs of as farmer provided over we with

have time We done already. for that quite some

So we -- market provide for markets And it. a is also, certain really thing in a those there. to for sell products to them that sustenance

was video in quite doing Brazil, a trying in number in Shareholders to that Annual So we're specifically and we for when saw have you Meeting been the that doing of already some that we but that expand time, that are years. Africa for yesterday

where So continue that to we're just going possible.

Ann Gurkin

So it's now? test still mode. fair Is on a right that

Unknown Executive

No, I don't think it's a test mode.

that their markets And them in providing possible use. we're to think for it's own do. the we're it doing where I again, to

further look on it and side, you're do step what want we there the test to at Now going Ingredients is a if yes, a to take can you mode.

origins out some that buying issues be number as are and traceability we're of we who the are side use things Ingredients on we We trying where markets some to our that well. different might of a in currently sustainability certain in love products out the Certainly, future. apply there

I certainly at. think can looking in we good So really we're that's something that that term, results. achieve And the long some

Operator

it additional back have closing remarks. I'll [Operator to And signals we Rowe, Instructions] Ms. you no for any from audience. our or turn

Jennifer Rowe

our all today. for Thank you call on joining us

Operator

we Ladies and gentlemen, this your for do does conclude today's thank you session, participation. and

your We great You you hope a lines. may day. disconnect now have

Universal (UVV) 7 Aug 242025 Q1 Earnings call transcript