Earnings call transcript Q4 2022

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Operator

Welcome to the Dole plc Fourth Quarter and Full Year 2022 Earnings Conference Call and Webcast. Today's conference is being broadcast live over the Internet and is also being recorded for playback purposes. At this time, all participants are in listen-only mode. After the speakers' presentation, there will be a question-and-answer session.

For opening remarks and introductions. turn with over Dole to of the like Relations Investor PLC, would the to call Head I James O'Regan.

James O'Regan

everybody. our full Welcome time call. you. And for you Thank taking to join XXXX fourth year and quarter earnings conference thank the

call Jacinta on our is Devine. our the Rory and our Chief Johan Operating Officer, Joining Linden Officer, Chief Byrne, today me Executive Chief Financial Officer,

materials and will to those remarks, factors, release any Please made call, implied statements. will we expressed filings Dole the be expressly reflect due available materially press any may related and and forward-looking securities within be statements along this presentation a time the the supplemental update certain provisions referring of in include Investor results During revise slides note those the of Safe earnings wide these circumstances obligation including with or other of outcomes our from today or releases. Relations federal are SEC set on to Actual law. to forth differ Harbor they're disclaims forward-looking the or may company that of our section remarks website. range Plc These

may the call over release, to found use regarding to pleased turn today's financial GAAP I'm to measures of also measures. non-GAAP Rory. our comparable Information press include most in be which the reconciliation the With that,

Rory Byrne

today. Thank you, us James. And thank joining welcome everybody. for And you

legacy starting new integration July we're year our us one for entity full IPO business backdrop with progress under continued was Company, the subsequent created merger iconic rebranding was of XXXX and group, of The Food And operational the in the with combined the brand. financial XXXX. a Total very XXXX. for Dole out first the key pleased the the Dole Dole operations, we during focus made of completion PLC of from and While the for the Produce continued of the

focus in avocados such brand is Be growing Exotics with and produce aligning We to the mangoes, launched ripening, to Europe, procurement, as the dedicated division growth and our efforts the exotic and term. to the for Dole Exotic of and first set our specialist goals of year marketing our strategy categories We with medium Dole for potential. PLC sustainability ambitious long near released and and reports strong

These companies number industry performance Chamber sustainability during Rican and us on which The Costa of was annual for the the orange were efforts accolade, the Commerce Ireland recognized with recognized by exceptional and responsibility of a green bodies social Award gold awarded sustainability to American targets. all awarded was Action XXXX.

we year-end, Concluding to approximately sell during Post through We announced for for this a strategic gross of to consumers safety. review increased million. offering reached express with a combination improve will division believe innovation, an we efficiencies fresh our express service fresh the the food and XXXX. process consideration agreement and division, and which vegetables customers fresh undertook to $XXX investment to

the the to for flexibility Expect key partners proceeds and to business our management this focus year. valuable to group to same support, And the over to we future providing position the reduce wor returning division use group. last in allow will way employees express ked graduate vegetable net our of focus reaching and dedicated and fresh the the again agreement, this our financial their a as the want I more years for the team the profitability was us contributions to to activities. strengthen management of particular dole core on our my finance doubt

basis, strong on quarter movements, performance in our XX.X% strong we've the results performance a fruit excluding So global X.X% freshford for by share. by our increased of to delivered for the it translation the income a X, the fourth turning impact earnings in and million revenue quarter segment. like segment. the particularly fresh fourth by $XX.X highlights, slide on m&a adjusted by XX.X%. to currency driven net diluted foreign very driven financial a good increased drove adjusted by in increase EBITDA even per adjusted increased just This It and increase like in

the then on overall results in in On line and pro-forma we for are with Slide revenue basis a came X year. market. line and the backdrop Fourier guidance environment, recap with unprecedented at the billion, performance. Against in an the financial we operating Group economic prior the with year also our to of $X.X pleased

in $XXX to million movements. increased by of along reason Adjusted by Price was incurred line primarily The following the loss was year-on-year with decrease primary the Vegetables year, for revenue currency were X%. this Fresh guidance. response group. due the with impact in basis, challenging like-for-like negative inflation a foreign of to increases On EBITDA the our

Fruit very Fresh performed of strong segment Our strategic advantage strongly, its asset base. taking

in supply base grow from in remain challenges project economic the disruptions, 'XX, on Our and risk inflationary chain diversified uncertainty. agile of also performed pressures segments

So our to for XX on moving highlights. Slide operational

year high Our continued overall to positive Cargo very and perform very healthy to Fresh well supply the division performance and had in operations excellent Fruit Commercial XXXX. and and an end balancing, their balance and with a demand Europe, rates a North America by better an market impact demand for our pricing allowed QX. shipping continue or which good rates driving offset movements profitability performance. in and shipping to currency partially supply improved In adverse

pricing variable Importantly, sourcing cost we and customer important XXXX. believe we're Europe renewals better for has allowed reset contract diverse portfolio, customer a we the mean levels have extended to our The leading in to base have this well dynamics placed to for strong year. industry. for markets demand and more for sustainable an to important recent be variables dynamic in also supply while Overall, With the XXXX. many

apparent to price from Inflationary dynamically be the provide in QX our to But well in and extensive benefiting chain on also ability trade high-quality markets. supply our challenges Our to consistent to certain to diversified pressures continue segment and product and like-for-like geographic a demonstrate EMEA service continue overall, customers. continued while its basis diversity. and businesses

XXXX. Looking to now

plan chain and to with success complexity our We consistent continue we year. managing a encouraged in to dynamic pricing have be by model, supply expect our

segment Americas and in supply products, be with impacting impacted apples QX number Diversified chain particularly disruptions on continued by of challenges Our a kiwis. to specific

our rest chain important this offset U.S. Overall, export the business cherry of positively, XXXX, to products More its side our onions. in such division. perform particularly a had of on to and continue the Chilean operations impact of in positive the in the and strong negative disruptions supply environment as start business well, potatoes season

segment level of performance activities to maintain solid range and scale Diversified still the a us However, of in allowed overall. Americas our

continued of sourcing remained quarter to the plan as the remain driving quarter began period of and performance at as business fourth a in focused Performance of benefits. in improved supply whether dated to somewhat began just Our on increases deliver in as exceptional through the an remains group. Fresh it our significant QX. the costs We this of short Vegetables end improve turnaround disappointing improvement also industry went part supply

which on ambitious of the Turning highlights to presentation. to sustainability Dole these Slide plc, for years. Page our our sustainability XX, goals set published to Summary in goals first out We are our of report save XX coming our XXXX.

science-based and Scope to emissions, reduction target X% a CDP in disclosures and for valuation X initiative. time X our a achieved the We committed

tractor sources this electric from fuels. the new continue in port make in wind and of as of energy five facilities rigs Examples to turbines San the panel further addition the addition we treat transition new fossil Ireland, in of renewable We and and manufacturing include the Diego facilities two investments solar Salinas, terminal. at

healthy consumers value resources a adding social to the steward on remains promoting good finally, investment being long Our water, in track society Foundation, by of America business through record by our by model and natural our so biodiversity, on. evidenced driven and delivering like Latin Dole nutrition

and Detailed submitted during goals will climate to the and on emissions focus SBTI, risk itemized XXXX management. continue we for for to

second Our fourth was in the report of sustainability quarter annual 'XX. found

with over financial you the So to I'll that, give to review. Jacinta hand

Jacinta Devine

good Rory. you, afternoon. and Good Thank morning

group the XX. on results to Turning Slide

quarterly that to where first quarter is it reported results the Firstly, financials. than compare for we rather noting worth are the set pro-forma results fourth of the

mentioned, on to strong Rory a and fourth numbers. recap quarter key the delivered As performance we in the

over higher a like-for-like million $XX like-for-like fourth pricing to adjusted revenue all driven On performance increased EBITDA for the with or €XXX increased On by strong increased a a fresh the XX%. segments. compared $XX basis, basis, increase to for across year, increased the in prior XX%. Adjusted over the XX.X% million quarter fruit. EBITDA driven quarter million, Revenues fourth by

was million, expense increase higher $X.X was adjusted diluted quarter versus versus income net adjusted by $X.XX with the in QX in interest year. EBITDA, offsetting XXXX, higher EPS breakeven and prior driven the Adjusted the

predominantly was our segment, line full in million adjusted with challenges The basis, a whereas year due significant decrease EBITDA XX%. resulted a in On fresh EBITDA prior to value. remained decreased adjusted in year, which vegetables $XX the revenue

had of impact Foreign $XX a were These in exchange negative also million. strong offset a freeze. partially by price year translation impacts

provide income fourth and each net expense. EBITDA versus higher in will EPS, interest the XXXX, the decreased and detail of diluted segments. Adjusted more pro-forma comparators the operating decrease adjusted for the both on some adjusted driven by I quarter for now performance

shipping Slide EBITDA a Similar revenue with Fresh X.X% the Fruit third strong quarter, quarter increasing Fruit. to and XX had the adjusted Fresh to year end XXX%. for the Turning continued pineapple cargo, increasing and fourth strong volumes. costs driven sourced by commercial bananas elevated, were particularly and increases Operating higher and packaging costs for worldwide, remained higher of costs fruit. pricing performance and from

increases. offset prices these cost higher However, have

the Fresh like-for-like Slide Adjusted in a XX demonstrated XX.X%. by this Produce revenue - decreased underlying X.X% segment driven by Moving good The Diversified increase in higher was on pricing. performance on for EBITDA basis, to EMEA.

to our costs for our like-for-like Dutch, decrease decrease unfavorable by to reduces Africa, had was logistics a This FX in Spanish, higher and M&A, an and Czech businesses due great and deal mainly adjusting South in businesses. sourcing offset on strong this performance However, by Scandinavian basis. based X.X%

and of of following in XX% higher Diversified increased - potatoes for lower during and and Americas for season cherries and quarter weak Produce Fresh Disappointingly, kiwis volume of on to by of partially pricing a and Revenues XX.X%, pricing onions adjusted XX. Slide strong EBITDA Rest a to offset onions. by continued potatoes of in Chilean season World Chilean and raspberries decreased and cherry America, apples and sales the in strong the North start fourth pricing quarter higher Chile America. driven the North Turning

Finally, benefit for continued turning Revenue pricing on Vegetables the the XX. products value-added Slide of increased as we fresh-packed for X.X% higher range. to pricing Fresh strong and saw

quarter We to fourth the on Fresh and and impact increased inflationary costs costs. other vegetables losses continued incur to manufacturing Vegetables, continue input particularly and due in in challenges for sourcing

million, million. quarter $XX we Slide Capital and to invested for the expenditure the XX. Turning fourth was for full year, $XX

to CapEx circa expect appreciation for $XXX which with million, we line XXXX, in For be is XXXX.

the of was line with end are pleased Xx the year that net We our leverage at our target. in

As quarter. and reduction working saw capital the the seasonal unwind expected, fourth in we in to leverage the the of contributed third quarter, this from

of to XXXX, working For to seasonal movements pattern XXXX. capital be the similar we expect

full $XX currently with XXXX for Our interest year before expense year to full benefit million in regrowth. circa million the continued the market expense XXXX rise sale expect from interest such be $XX our rates. any interest We was of in

with of declared we year dividend for fourth line cash our this previous quarters continuing a and Finally, the $X.XX to return to shareholders. have quarter, commitment in

and hand Now give will year on outlook Rory, I remarks. you who closing our an back will to full update

Rory Byrne

in bring opportunities challenges. so Thank environment new and XXXX The operating far both Jacinta. continues to new you,

Chilean ware, in noted disruptive we Fruit division February a recent impact since with we be quickly engaged to although in Vegetables in had and overall businesses Fresh and working or which cyber threat the experienced remediate a leading our operations our secure in moved ransom was update, to partnership systems. the we As positively, identified their More limited and as and with a on in third-party cybersecurity internal to particular. teams cybersecurity in experts contain issue

the looking chains. supply Switching at to

' for Spain, events, So XXXX, several has efficiencies in at seeing improved challenges of Northern are far colder solar signs also we areas. seen the in importers start created year. in which further the Wherever in we've in of Europe just logistical weather particularly weather,

looking we've areas. well lower more Europe, seen in strength certain our the lastly, as And macroeconomic environment, in business with at positives the when fuel prices, some for stable inflation of signs and as moderation

However, efficiencies. delivering we uncertain, to as fully and and environment focused on costs need remain the management operating remains highly

$XXX believe we well is current forecasting full positioned we complex, growth. targeting while adjusted million. in the our for year is Overall, are of environment EBITDA And for XXXX, business

Our Fresh from forecast the contribution assumes no division. Vegetables

pleased we're conclusion, agreed and Fresh very to strong to with fourth 'XX finish In some dig Fruit division. of have a our quarter

a to continuing capital, the our with ongoing projects, completing core Vegetables in Fresh synergy Vegetables principal accelerating obviously are approach growth operating in business, to Our looking the post and transaction. across including Fresh on the cost areas continuing 'XX efficiencies our focus priorities and completion sale disciplined into businesses, of business the control

our customers for which I and allows their want efforts our to with also the for finish look our thanking by to by committed partners thanking and drive again business ongoing their confidence. to team us critical great support, to ongoing forward future

to for you open questions. the hand operator, we the back I'll can line that, With and

Operator

first Our Stephens. with Instructions] comes [Operator question Ben Bienvenu from

Ben Bienvenu

level. out I Vegetables, Hey, year's contribution good ask look Vegetables. it into But you assumptions no Fresh above that some guidance and morning. million $XXX take go be I when want provided, your that, $XXX million recognize that I EBITDA Fresh that to noted if and you to at from core we of I expect looks you the of this back results that

us what and the to push $XXX are million talk commentary. maybe pulls about guidance that So in

Rory Byrne

for quite that to who I Yes, disruption think volatile end there has seen a the the like last is that science increasing couple and or volatile, where over is and volatile ongoing difficult markets on some last looks in some forecasting There is doubt. Energy knows Europe, very supply the exchange the question might European be it chain foreign maybe Ukraine. on got still quite and war up. volatile, indication out to the going without the Thanks be going complex inflation we've quite day is moderating costs then years. question, of It site it's environment still. overall we've in Ben. Sure. two, although continues been quite are the that fuel Unfortunately, still

may things, and those look something So at well, we we're of whiles unexpectedly systems getting reestablish which operate not the hand, of the something of variables and all other scheme the a work what could doing effect. well a very continue and lot There's favorable. well overall we the cyber-attack, material FX to manage to on like to then as be is just try And do.

across downs business major. and the the had nothing solid ups a to Other and Overall, start year. we've

the covers we're putting the I expectation So all mix, into that of of combined of too the that of think far not I it. group think analysts

take across analysts, if million. we somewhere it's the around So the average $XXX all

done you that we $XXX the forecast was the by million that take to and off purposes We that the costs looking all office analysis to and then what back we've around somewhere previously head of for you the at Vegetables the the about absorbed $XXX XXXX, that division, reallocated for back take gets for Fresh and you million.

So head benefit to base once realign underway. the should come divest that But project a of division, reflect will be cost, the XXXX. we we've a business, Vegetable Fresh finally office through and separate got the that cost obviously, will our new in we

sale back cash. difficult, in million So, forecasting The EBITDA, of I mean, for plus somewhere you is I stand you think the do really. just north this. we've can $XXX stand an with It's target assessed -- back increase from

million enterprise our $XXX just think things. doing but all up goes $XXX to value I two million, those by

So you of summary that's really we're the what asking.

Ben Bienvenu

the And in you Okay. door the the Very Fresh coming from noted sale of Vegetables. good. cash

some is think of the appetite you I that talk lines the some your you other ease? see to down business and/or debt. pay M&A? of is improved you objective down accelerate Can growth about to to debt identified start primary perhaps pay the your and you pursue investments headwinds What as appetite

Rory Byrne

little to focused increase bit. Yeah, DAS. obviously Really continues buying we on of and sort are a

investment little that of bit M&A. caution or in a probably of So drives terms

and between sector still of has largest considerably on the good the valued private put and still companies market, the a markets the a discourages have valued our public private that's are been player disappointing M&A activity. serious being so something making in is that We sector in disconnect seeing stock by it little

the where equation, so. keep evolves we this balance our year coming over company So, manage sheet review. the the to next under we it push when view We under and as or we'll keep

Ben Bienvenu

Thank you Okay. much. so

Operator

from next Our Goldman Sachs. comes Adam question with Samuelson

Adam Samuelson

morning, Good everyone. you. Thank

the kind continuing balance some the as kind bananas of and on improvement on about sits supply-demand most focus of the question, supply takes pineapples or you see So talk where of in of first kind XXXX. it around the Can today? How, where of I guess, on demand maybe you puts kind and productivity?

should then And question on any a be of? Is kind of there kind half, on related that seasonality the conscious of we thoughts guidance. first half second phasing particularly

Rory Byrne

Yeah.

we're switches, expecting similar different was -- be relation we think materially to going as to 'XX. seasonality, There some versus don't be in broadly profile in not a may variations think by some a but I 'XX it's quarter.

ups this radical rather full year as you moods. know, business But it's such expect a quarter-on-quarter, basis on than but at downs. So look don't and Adam, some we we a

for As and QX have we 'XX between example, QX 'XX.

little first we're And aligned perhaps, balance then bit a do want Johan, to question? banana, overall Adam's was supply-demand to So the on comments which on more you a the some bit make little the XX%.

Johan Linden

Sure.

we a place been right year we now. started the that good. So, has feel market tight. The are good in We

has So, when comes tight supply. bananas, been the it but supply have to we had

So, We and market, well to bit comes when well. able feel for will perform the we position that supply feel look ease when balanced to a and are The good in but that we it little we supply the have have a we overall to demand. we year full still year. a position out been good

in that year during Fresh we year color Fruit have one on comes our not it as an going when XXXX. believe commercial year we're it's especially We exceptional that had, bit little exceptional had be also to a business we going to last piece cargo. XXXX also during cargo, a commercial but is put to and good of course, to Maybe of

Adam Samuelson

a And What's expectations for the CapEx all follow-up. That's year? for and interest just quick right. the very All expense helpful.

Rory Byrne

to you Do want take Jacinta? that,

Jacinta Devine

yes. Sure,

interest approximately in And rates. So, $XXX with million, of million, for we're for increase XXXX. depreciation number of $XX then CapEx, reflection interest expecting which expense is aligned pretty the much expecting our about is a which we're

Adam Samuelson

right. All you. helpful. That's super Thank

Rory Byrne

that excludes we benefit Vegetables Obviously, any might Adam, on that depending get the completes. to

Adam Samuelson

you. Got it. Thank

Operator

Our next from Bank. Barnes with Chris comes Deutsche question

line is open. Your

Chris Barnes

I your Thanks able Fresh just the to the Are when just And any Vegetables expect on of the on share to the antitrust transaction, expectations just on then to follow wanted timing of transaction up also question. you potential guys. completing given concern around sale. you Hi, sale just close? for this confidence business. in the

Rory Byrne

Thanks, point a to of deal. Yeah. Chris. suppose there's things I bench couple on out the

First a for We as the a think we that good well. a the believe good in of this considering good stakeholders think the is good people for this very way. it's it's good the involved in buyer. transaction. for financial all, involved We deal deal deal for this think dynamics. the a think our us, future outcome We business secures a all in it's very We

And think a most to of a safety. we deal innovation food consumer create customer great and good a move importantly, ability perspective. is the and from on We the and efficiencies also around the be will combination good that think right this particularly investment in

know, is the you as underway. So competition process

make with or for public with have risk terms competition terms too has advised SBA buyer set we the be not that want of we process been understatement to process. followed been would the application on within It's and approach the the process that interference comment in the it program the any by a on ourselves We appropriate from in rigidly. how out how input driven don't it that's to much

we'll updates not And update. further to a process time, through point way we're So in it. we'll work as at our give an position on the appropriate evolves, in any give this

Chris Barnes

while business, incident to provide own just this Like in meantime, cybersecurity California, the just update the quarter. it. And sort you still just do returning you you obviously, in January, update creating of guess the have that expect we've business profitability. I Got extreme it? business sort like status you while seen any can Understood. weather in impact like what like But own do you is on Just on of like new the the had earlier you seen disruption? any from how any performing?

Rory Byrne

you Johan? that, Do to take want

Johan Linden

Yeah.

is So has we are is division happy as The focus we to mentioned calls on, have the been with the we had, that earlier on that the customers. service doing. the work

customers, good cost that the right can the get service price, costs are you on focus and seen volume strong progress normally doing and that. you If you operational now. the have we we Very get down, well to and get also

We there contracts, have negotiated and some some we've able push to been price through. new

SKUs. We have some formulated

So that a our the into going division. relatively for good servicing it the had the Unfortunately, the we to are We we headwinds a good finish we We had also now. in that year. fully of start are but making finish back while, of year. when an believe had them customers good and with a cyber had we attack a impact serving comes strong

So that's fine.

out The California, weather has Arizona, already in impact. that got rain All January supply there, California, although plant. had but of had especially, January have do in we that in we the we we to started in we an don't production don't

some we a will in costs now do couple So the higher here when come weeks. transition we of vegetable see

right yields we direction. So we little overall, a the worse. are bit moving feel in be the that But will

Chris Barnes

for it. helpful. question final just Got a And That's me. then

at around any Thanks. I'll later or like like in the supply disruption that. to like also year recover like Just of recovery the pass Do cyber expect it through amount the proceeds? on incident. either just And you insurance

Rory Byrne

particular for the expect Insurance recover on of suppose way. North America we at don't context either is moment. And we recover don't is the no, I prohibitively to in any insurance cybersecurity categories. to answer simple in that to other expect no, those in

Chris Barnes

so Thanks much. it. Got

Operator

Gary next from Davy. with [Operator Instructions] question comes Martin Our

open. Your is line

Gary Martin

morning, Good all.

an QX low issue? just be Southern QX Is yield Or the And to question and a just recent update weather this QX, Chile, will that only on Africa. the in Europe just 'XX? to just Northern quick expected of first of similarly, in issue? to just transition in expected a the poor be the into just impact is going me, for terms QX first a Just on just of is Or throughout FY be my That's the it question. half year? there

then vegetable a higher value attrition demand the you products. higher of fruit inflation-adjusted prices, Have just far one so Thanks. just second seen the of prices? on with just just And on some and any

Rory Byrne

Yeah. I Europe, in we fact. business, press do on material in haven't did in sources our the the business, impact and the Irish current but coming our impact UK normalize some and on impact over in Northern some our businesses on a had expect that to weeks,

there's of on been something of producers from and I issues, think supply shared issues, cycle issues, a a diversification little between reckon some have price year weather around perfect perhaps Spanish UK So bit crops we less. plant Brexit caused of may chain just some issues quite and increases even the to the supermarkets, storm Brexit

moment that, a but So we're at will and our we the that seeing think from impact will that perspective. -- adjust not signs market material over the improving time that

good and pricing guidance and valuation of seen still and bananas. suppose product or business, been of And the taken inflation, single elasticity business Chile, pricing. in a our still banana it obviously, really in a for to our be huge this profit. grape But going of terms for on customers last terms offers we in the obviously season terms The year. any the product again, still issue, that overall, haven't hoping value not year, year would improvements we're line than kiwi has better And biggest into late we've the is but great apple for I

we been I kilo price mean, per the per it's price on some other but marginal are material. pound or seeing the products, products, of very hasn't resistance high

consumer how spending discretionary is issue on I think to the you're the becomes cut. be what's list last happening seeing is where

hasn't So been it is. far, a factor material

Gary Martin

so Good much. Thanks color.

Operator

this further There remarks. the for I'll are to Rory turn questions over closing no call now back time. at

Rory Byrne

Okay. Thank much. you very

today. So you for all thank joining us

the year the we very follow challenges that strong a pleased complete pleased that we're strong very full a very a Overall, significant to pretty in performance. to of 'XX, despite We business, make So QX course think on and with over we some good QX. very with sure income obviously, we're the need it's XXXX.

well years. I will positioned the think for us future leave that very

So today. thank you all very Thank for much. joining you us

Operator

today's concludes call. This conference

You now disconnect. may

Dole (DOLE) 7 Mar 232022 Q4 Earnings call transcript