FDP - Earnings call transcript Q1 2024 | Fresh Del Monte Produce Inc.

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Operator

Good day, everyone, and welcome to Fresh Del Monte Produce's First Quarter 2024 Earnings Conference Call. Today's conference call is being broadcast live over the Internet and is also being recorded for playback purposes. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] For opening remarks and introductions, I would like to turn today's call over to the Vice President, Corporate Communications with Fresh Del Monte Produce, Claudia Pou. Ms. ahead, go Please Pou.

Claudia Pou

Good quarter and Claudia XXXX Communications Monte President, Audra. joining Pou, you our Corporate Produce. Del Fresh first conference with afternoon, you, thank everyone, for Vice Thank call. I'm

are discussion Monica earlier press I release review and Vice hope today's in you've Senior Business me Mohammad Chairman Wire. a Executive Vicente, Financial and Chief and issued the had that via Abu-Ghazaleh, President that was Officer; Chief Officer. to Joining chance

investorrelations.freshdelmonte.com non-GAAP being after call set to forth visit to and the financial company's release call. on at materials distributions. this and IR that You our note available today's in and may the and replay press access today our presentation, website measures. our non-GAAP release register This also which press these SEC within earnings measures our may conference I answers we you available forward-looking we webcast website is the provisions questions, for to response the we'll of future for be call give include including earnings are will is the may live Please of remind federal much in that statements our to the laws. website. detail speaking today's materially Safe today, forward-looking statements. information your press results in and risks of In that to future cause release these our on securities be to differ include Harbor would Reconciliations like filings, from

May update any forward-looking make. Our may X, we to as obligation statement statements and are of have today, we no

question-and-answer With to call our first turn to along update a that, followed of I'm call, over quarter by overview we pleased results the During provide Abu-Ghazaleh. an business will XXXX Mr. session. financial a today's with

Mohammad Abu-Ghazaleh

thank and results. you for Claudia, earnings you, for quarter us XXXX first joining Thank

in [indiscernible] by sales by adjusted as our our of prepared expanded this and momentum year-over-year, and foods. Segment strategy. fueled which and basis a of as segment, realized chain. is long-term integrated strong value-added see strong tightly our points X% cost from in segment well key fresh we our efficiencies grew also our driver margins higher-margin XX gross production Avocados products supply to growth as by continue savings We Revenue

cash while to increase down business, our flow in Our simultaneously reinvest allowed our strong us paying the dividend debt.

we in quarter, unlock the commitment on in compared our to by total demand Taking we the our year strong We pineapple, pineapples. reduced through allocation. our fresh-cut further what did During and period, value growth. by We quarter. some value the disciplined debt this our for shareholder of a value-added exactly to closer first shareholder look focusing fresh demonstrating we strengths XX% value-added will capital maximizing believe particularly is at saw behind prior projects, which further when and segment drivers

a As and at limited is interest in to price we pineapple to now available in the category. distributor States. very leading for high Due first which to look X [indiscernible] our demand produced ways The America, and pineapple, point. launched In are new continue route, of a and lead different quarter high in pineapple United volume being this XXXX, grower pineapples pineapple, we of North Rubyglow innovations. the Rubyglow in the to a consumers

of pineapple elevation pineapple, pineapples fresh released newly our size other of personal is out Honeyglow Our this pineapples. Honeyglow Precious line quarter a the popular

year. period In innovations sales very with up previously were to X, continue Honeyglow pineapples well. the same quarter for last perform XX% the pineapple and Our Pinkglow launched compared net Pinkglow

product growth fresh segments. Honeyglow net approximately for year. and driver our represents While compared Pineapple the last with higher value-added sales pineapples same XX% one was the period just within

opportunity category. in We fresh-cut also see tremendous

in cementing not our seen fruit program. of new our further fresh-cut quarter, fresh-cut product products and we our our Also, distribution market We the to specialty leader our our store within in release for this driving our grow expanded fresh-cut as further premium are that America, we and featuring program, new value. convenience horizon pleased facilities to company-owned trades, North products on fresh-cut of market before the channel. share the U.S. This to in fruits to robust year, footprints take will advantage share shareholder continue value-added position consumers,

our production strategy recently North of growth European completed regions increase we Our the outside significant Shifting increase primary to from fresh-cut performed fresh-cut in quarter operation the other category, our expansion sales in which region, for year-over-year. same in compared our XX% a will quarter with Asia, U.K., revenue well in Korea In And the allow quarter extends the up avocado this fresh-cut saw in our into X with facility XX% America. in we a year. of us our last capacity. category

us We fresh our the our product, in One Guacamole and quarter X, rapidly. expansion of growing new newest made course to U.S. major the Northeast plan a avocado, is X fresh the innovation of distribution Guacamole to Southeast continue year. for this regions retailers and Guacamole with our is expanded product preservatives the in of In [indiscernible] without and throughout

the operations our utilization. products residuals toward XXXX. investments remainder of value-added We well plan and Looking our and maximizing as in continue our fresh-cut expanding to pineapple fruit in as

the use to the as biofertilizers. of space fruits, several strength have of to untapped over in potential us we that, our our at be industry. and to ventures of see of a fresh These the this the business and world's producers one leverage Monica. allow residues, As cases forefront would With profitable identified call produce largest turn tremendous like including I

Monica Vicente

operation. million net related ocean business call afternoon, quarter year. including net by of billion in net partially in offset profit exchange the Net recoveries XXXX facility prior third the distribution to unit quarter first offset partially of at XXXX sales the freight the the you Mohammad, of prior for fluctuations compared due from quarter driven quarter $XX in per during on driven in ocean a thank the and in with everyone, good in fresh pricing of compared sales, margin first year. of were was net the XXXX, and overall associated higher you, segment our and functions value-added due by the by X.X% impact $XX to and with to was lower sales pricing. overall quarter certain and our sales today. for the Gross in the products sales Greece billion the The value-added us of costs. severance the volume insurance The $X.XX net damages in year. partially was costs, lower and $X.XX the of first The fresh decrease of first segments. XXXX tied for of first production in profit volume lower charges credit to flooding X.X% Gross $X service third-party million XXXX rates, in for million and other higher outsourcing by was and joining Gross offset decrease freight includes in production higher sales compared lower our product and procurement and quarter with seasonal bananas was Thank lower by production decrease the the prior rates to

$XX net gross Operating FDP and compared million $XX for income for product-related FDP income million prior adjusted charges, quarter the million year. year, to higher in of $XX the SG&A million first year, with year. due income prior net the expenses. compared was million million prior year. million was operating lower compared $XX in the The quarter and impact with compared first was and profit was operating income $XX in of profit compared the adjusted 'XX income $XX from with $XX 'XX with million adjusted was decrease gross Excluding with $XX the other last million adjusted $XX last $XX the million was

and quarter year, for of million and the in due for segments, beginning in first sales for compared The Our Costa products $XXX Adjusted with the higher prepared by food prior of value-added share Net previously XXXX other in year. share with $X.XX of was million share were Gross quarter higher fresh earnings diluted compared of the by for procurement the year. which quarter will per higher offset selling primarily compared per the pineapples Mexican Rica per into I $X.XX was with per $X.XX colon was partially overall also peso. and first share the $XX $XX $XXX prior with $XX per by on the up compared margin in of Gross per mentioned impacted X% more charges $XX increase profit million by year. earnings higher detail melons net prices the and Gross lower compared XXXX with profit of EBITDA diluted pineapples, and each compared unit in million was was $X.XX stronger prior now avocados, the in were the go Adjusted prior quarter first share includes driven products with our sales, segment. the the year. X.X% performance quarter XXXX X.X% and million with costs driven prior gross increased SG&A. first of to the higher in sales the first credits. to production avocados. and and volume million a product-related profit prior to year

past of for few has our As intense over Mohammad been mentioned, years. area segment team the an this focus

growth popular undertaken to volume. represents our have specialty of this of our continued and efficiencies a strengthening segment pineapple number aimed release XX% past product enhancing as combined and new at channels. of mix, We've well offerings which We distribution our grow our this X pineapple in improving pineapples, of initiatives approximately with quarter the program strategic operational the Honeyglow our continued as now Pinkglow,

avocado sale with results, revenue driven Our higher prices. increasing delivered by XX% by program also strong

nontropical segment due remainder we fruit strong fresh-cut mix, pineapple of favorable driven the strong expect to the in current sales trends. by market and this For XXXX, to improvements results product continue

to the unit segment. banana The by and profit the including Gross XXXX XX.X% lower our North in colon negative lower first The due $XXX $XX compared million service Net quarter and driven gross X of market issues was profit prior due million Banana Rica the million the in to year. X% quarter in and partially pressures decrease net and year. stronger higher for $XXX in of Europe. with were offset by to in the prior gross was costs. selling costs, with competitive months decrease to America sales, production the level the X.X% a partially prices procurement $XX lower first in year. lower in Moving the sales distribution was compared impact per due volume, first freight compared Costa million ocean was prior with margin

XXXX. to call, that to mentioned expected last During we similar earnings banana we volume be

pressures, full market competitive the now we lower given versus the selling prices. last volumes year, anticipate approximately X% have to softer X% However, to with for year along

quarter the Lastly, million as in the sale by plastic profit as in sales and lower freight with America competitive last net X.X% in our XX.X% for lower margin Gross to Gross compared combined of of compared with rates first in a was sales million year. lower the $X prior third-party driven XXXX. segment compared year services subsidiary $XX result impact our $X environment, products of in services million with a million net $XX of sales. were was South the net prior other year due ocean result the market of the with

the of first for are for with line expectations XXXX the Our this remainder quarter results. segment in

year. financial selected was million $XX to $X 'XX due interest compared $X million data. compared balances. of average was earnings. in provision lower to Now Income to expense to debt moving The first in $X lower million quarter due the tax Net prior decrease million the to was

year. position. The to year. the the our by million compared by XXXX increase debt, due optimize compared first in operating of adjusted the net with was Net lower our of Turning $XX million working partially our X financial By the is income. last lowering of to Long-term ratio same of was leverage with cash capital, XXXX at X.XXx for debt activities the decreased efforts provided now the to million end months $XX offset at $XXX our quarter by first end $XXX million net XX% EBITDA. our to adjusted quarter prior

$XX of relates $XX in it in we months to capital million compared the X spending, prior As the with invested year. first XXXX million

million. expenditures expect $XX lower the the we the to be year, $XX end range capital For of in of full to million

man engaged per by as As actively XXXX. the determine and of announced to in our of this we press quarter, we a payable path $X.XX release, XXXX, cash the quarterly And forward. lastly, to decision remain relates intend to last share, declared on make record exploring of May we XX, We June packing a X, the third in made operation it on to XXXX. strategic announcement shareholders quarter alternatives for best dividend

process be to However, outcome. Q&A. review. any no in call over can can We there This assurances concludes strategic specific our will Audra? the that now this financial result turn

Operator

session. We Sturdivant will Instructions] question-and-answer Mitch take [Operator Pinheiro now question begin first our the at & Company. from We'll

Mitchell Pinheiro

value-added nice of to the stores they they're and with advancing. normal-- quarter are had One, you increase Can shelf the business, pineapples? old are new a the space getting-- pineapple varieties, pineapple regular look product of starting quite replacing Or fresh-cut pineapple? pineapple the-- the a set like or a you Two are start grocery margins questions. on is sort just shelf are for

Mohammad Abu-Ghazaleh

we replacing a these it's right. Actually, It's of have. that higher No. additions. you're much Actually, value kind volume any to old with traditional incremental new Mitch, not

and seeing are sales incremental we demand. incremental So

As meet demand even these races. in most cases, special not able the are with fact, of we a matter for to

Mitchell Pinheiro

work where the And are all existing does And you like your using land? that back how from land? own so pineapple fields, end? acres in Or of are additional these

Mohammad Abu-Ghazaleh

have. No, we that land it's additional already

production, have to Mitch. expand enough We our plans

new farmland color agricultural are It's about farms. commands or existing, within which varieties which our of let's additional the-- say, say, different these our of new to But pineapple type Honeyglow, management, properties. with let's it are us producing kind within we if high any is the the own the, say, this Honeyglow. the that this like which all pineapple, So is gives of advantage let's a pineapple premium a Rubyglow talking Pinkglow pineapple,

enough have varieties. grow to plan We new additional

Mitchell Pinheiro

are more pineapple to like varieties Okay. newer And regular gold pineapple? much profitable how compared of in an order magnitude, these your

Mohammad Abu-Ghazaleh

cannot it's public you By not value. say, exactly very far, what significant for in tell would but it huge, it is I I difference information, is,

Mitchell Pinheiro

on the out? of margin more of or gross that are that is than equally? fresh-cut higher an does the the primary-- was work And margin, How higher mix impact Okay. is pineapple, that your value contributing they segment's

Mohammad Abu-Ghazaleh

are is they They both in them think terms into margins. both equally. marginality, high only I of of are beginning. tandem contributing commanding are going This

a for towards of journey we transforming. is the will at are value-added been where quarters, several and integrant much you said beginning the are start higher which be I products quarter remember, We going. if I've to very you our after the much different we that this go we And Mitch, transforming as saying quarter, realizing company avenue, believe, company

our As I very we going mentioned that biofertilizers, have about segment. going announcing soon, this we're new in something my now working be that is script on that very we we something have are this and to out residues of to are seriously

lot there will a that going So company It is say, be that. into avenues I going of forward. would we the change would new,

Mitchell Pinheiro

bananas, Okay. I range the for on that correctly, And if X% in that is question then the I for X% guess, you said a bananas. year, Monica, expect lower volumes heard you to you right?

Monica Vicente

yes. Right,

Mitchell Pinheiro

prices? selling lower with Along

Monica Vicente

Yes.

to selling the We is and competitive lower very prices. we and expect do softer volume right have market expect-- now, the

Mitchell Pinheiro

is and And Europe North competitiveness in both America? the

Monica Vicente

Yes, in both...

Mitchell Pinheiro

competitive than... more one Is

Mohammad Abu-Ghazaleh

being-- market, consumption the Yes, this, is add to actually X% before. statistically, America I market we North down about would Mitch, like the going to less have to the compared consumption that in the seen in year as there is

America sales and this let's actually are but Europe. we we trend lower, don't seeing the So in know why, We a seeing are well North volume right and say, that in for now. tendency as is

Mitchell Pinheiro

me, It eating like more sounds they're pineapple. to

Monica Vicente

Yes, Honeyglow.

Mitchell Pinheiro

for the-- as And of you is visibility, next into you we bananas? if the look don't of same lot second quarter, as-- look a the so quarter then Okay. more the far have into but as

Mohammad Abu-Ghazaleh

less in shipping, I disruption we in or this go susceptible efficiencies, happened always variables more that year, you on. especially in say, that factors the And mean, there issues, same you're Banana service less control, to would or service better first unless as quarter the in levels some know, cannot quality and issues. plan the faced more have some first will the some headwinds is which we quarter. I that

hope it's going but We quarter. as the take that too scenario stabilize. we speak, We to scenario be for don't believe stabilized. want let's as optimistic, this will today's as we're forward, as being the second to we be going one So the

Monica Vicente

a decrease I in QX, X%. like year, Mitch, full volume. the And said, for we expect X% in had X% to And we

So we do bit, expect of as QX. to not recover a down little as

Mohammad Abu-Ghazaleh

mean But has mean around industry. colones. year, talking Rica our rate decimating this points difference, let's the really the biggest I the it's next-- I XX in year exchange mean, difference And Costa exchanging headwinds for XXX quarter XXX in to was we're colones. say, $X between year-to-year about colones I of we XX about one the really were been almost

the last for months So few the late last year. since

been for us. really headwinds it's very So big

Mitchell Pinheiro

to the-- don't the of monetary driving driver Costa situation. the pay What's Rican the I attention What's decline?

Mohammad Abu-Ghazaleh

market, Too the many the-- put the local very, came in which mean, dollars, pressure strong. I guess, on very currency I

Mitchell Pinheiro

Right, right.

your Okay. about little There's do no right? it, let's primary... say can there's you And

Monica Vicente

Yes, liquidity. the it's hedge there's not difficult to enough that colon

Operator

And that to turn now back concludes I our for over will closing the remarks. Q&A conference Mohammad session.

Mohammad Abu-Ghazaleh

very much, the a for to good with you in this day. you. brighter hope speak news. next Thank you everyone, to attending Have and quarter even Thank call

Operator

conference your participation. you This Again, thank concludes today's for call.

disconnect. may You now

Fresh Del Monte Produce (FDP) 2 May 242024 Q1 Earnings call transcript