Earnings call transcript Q1 2023

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Operator

Welcome to the Dole plc First Quarter 2023 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 I would like to turn the call over to the Head of Investor Relations with Dole PLC, James O’Regan.

James O’Regan

Rob. you Thank Welcome everybody. the XXXX first earnings taking to us for join time conference our you quarter on thank And call.

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

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

of financial Information most use reconciliation GAAP the in also include non-GAAP release, the measures the to found may comparable measures. our regarding press be which

vegetables division presentation are in on Following the to operations. and in today’s results our results outlook sell the financial discussion are a reported noted, agreement operations separately statements otherwise its fresh our Unless discontinued as of basis. our continuing

to today’s over turn pleased Rory. that, With to call I’m

Rory Byrne

Thank thank warm you you all to and James a joining us. very for welcome and everybody

a All the today our start pleased report strong year. the very will continuing to XXXX remarks very are financial of we operations. to today, be on So focus a

planned far division our of fresh this the to that note process Express. performance an to the Fresh business we work way pleased also as XXXX improved the for has regulatory vegetables sale in shown through are We so

the for financial slide Now the and highlights quarter. turning to six

increased M&A Produce diversified currency per of continue to Fresh revenue to EMEA EBITDA by the in basis delivered impact increases decreased revenue driven These by while diluted performances X% movements interest strong higher on and growth we food foreign earnings increased increased While by primarily be it translation EBITDA Fresh our by like-for-like X%. segments. the and adjusted pricing. excluding year-over-year and due driven just Adjusted by adjusted X.X% share $XXX higher under million to expense. Group

Fresh was onto year our XXXX Food the due and a significant our in in segment customers in of QX delivered sourcing operations. strong by Moving results instability in war. the very fuel start Ukraine market operational in highlights. to an challenging place improved Europe we our not we driven in quickly increases performance cost In European pass following shipping, the on costs part could to the but the

some we to to a direction a While offset there through increases have price see challenged in remains are the we further inflationary pressures moving pleased in good QX. to faced, push of results

balance performed Our American North [Ph] demand good operations continued a performance. healthy bananas and and aligned supply with for solidly

head believe well are we variable the we always, As positioned. good sourcing the diverse industry balance banana the demand remain ahead. base as market an believe in Overall on and year into much important supply in we remains dynamics QX for a we a

cost good start dynamic management volumes Certain pricing First had our to the segment markets. have our markets’ through growth Diversified prudent very price into more products expansion from model been overall while businesses challenging, have through has a revenue performed increases Our EMA and and strong continued have for Inflationary, Produce growth flown well across XXXX. markets. our justifying allowed

more reported segment hope favorable the QX its with an a to basis performance and the local are underlying we an performance we improved now see also. start currency on basis this On compares pleased FX very of U.S. in dollar

of also Rest the and to year supply Americas to and - a Produce of Chilean certain this the strategy differences the important timing has World of season slow XXXX. Fresh challenges had following due more chain products year cherry in segment the export Diversified start implementation [Indiscernible] relatively Our the for conservative of

some covered the experienced quarter Chilean also disruption We a this as in the impact the not material fire one insurance. damage and in a although of during entire operations result our of did have operations was by

range QX. to scale allowed level maintain these this and Despite activity still in us of performance a in impacts solid segment of overall

initiatives a growth move Chilean strategic We and products number in key products number such group further of forward. began continued potatoes a cherries of our these North accelerate in and additionally to perform as we to in important well America as

ahead was the the taken the the that in the we’ve of we rest year revenue confident strategy half. to Looking particularly second results are

turn quick last call. our I on Jacinta, it say I Before attack also want over we word to to ware ransom the mentioned on a

group quickly to efforts overall operations. Our on secure systems contain resulted and limited the impact our in a threat

to Our our we of incident and pleased systems our recovery that business with relating Despite ensuring as incurred of people $X.X very $X.X costs and in are commitment million vegetable this the continued of fresh approximately the issue, incurred costs complexity approximately protocols costs. operations million worked anticipated. the the of

review. that, And to you with the over hand to I’ll give Jacinta financial

Jacinta Devine

Good afternoon, Rory. you, good and morning Thank everyone.

slide the group XX. results Firstly, to turning on

and first continuing is and the discontinued James of in are result reported separately delivered fresh strong by X%. operations results the in million of the on focus with as operations. increasing revenue therefore Rory statement, financial We our of our a the noted vegetable the quarter, or results earlier, $XX As segment discussion

higher X%, However, pricing. on a like-for-like basis, million nearly revenue by increased $XX or driven

million or fruit EBITDA produce offset in fresh fresh fresh world. diversified $X.X by a decrease driven and in America the rest Adjusted diversified and performance increase the strong produce X.X% by the a EMEA, with in of million, to $XXX increased

decrease $XX in increased was expense. predominantly $XX.X and X.X%. The million, increase quarter, EPS in was year. in net Adjusted to diluted a $X.XX the prior On a basis, million the was compared adjusted interest income like-for-like adjusted EBITDA $X.XX due $XX.X to and million

the the X.X%, of increased slide more turning fruit to worldwide primarily in strong bananas a each bananas fresh driven and and detail by looking for Revenue of on segments Now, lower. Volumes were worldwide pineapples. fruit. whereas basis, quarter. pricing higher fresh XX increased results pineapple of sold The segment volumes delivered at in

to quarter increased XX.X% of costs driven and of handling. revenue compared sourcing higher EBITDA the by packaging, XXXX, offsets first and Adjusted which growth, costs higher shipping,

the the Diversified to a X%. pricing. increasing turning by in Adjusted EMEA like-for-like and in with an this XX, a U.K. EBITDA the was On South with well improved There revenue basis, driven XX% division $XX.X increase revenue strongly basis, on XX%. Now higher a increased performing Fresh on slide Africa. was like-for-like performance the over million, to Produce performance performed X%, and quarter, across strong segment, increased

of factors North X.X% and strong a driver EBITDA and America. grapes Americas the primarily challenging partially offsetting to performance turning grapes slide Diversified timing The continued Finally, was decrease experienced of berries Produce, lower the due world revenue the volumes for was quarter and the distribution Chilean of to and as primary XX, well Fresh onions on these decrease as berries cherry XX%. a in rest for for season potatoes in of of adjusted

the allocation investments are we focused working XX and headwind, on our with dispose of reflecting rates and to interest To continues being efficiently the slide group, continue rise. capital of opportunities on non-core to on strategic especially key Capital focus we assets. make, turning to leverage. as allocation manage be to managing a and Now capital this identifying

the end post that In of the of that sale as we X.X regard, March, further we and from sales pleased non-core asset received vessels. million we XXst a quarter, have of are of received proceeds million two from X.X the

expect and well on March, deliver renovations in expenditure balance had quarter actively and $XX efficiency projects the marketed million held properly farm logistics and year We our with sales sheet. of XX as Capital our sale further we of the investments processing and IT, million to for assets as as in warehouses for as asset facilities. first progresses was XXst

For CapEx expect million. XXXX, circa we continue $XXX to be to

pleased of and strong level at at times performance across adjusted driven leverage efficient end the X targeted the times, by came the that working out an capital quarter of X.X EBITDA of group. below are management our our We

in $XX months. $XX XX the Interest million expense past rise the over increased approximately has to rates following million,

For the [Technical difficulty]. of our are we forecast retaining full year,

dividend Finally, the for are quarter, return to pleased cash commitment see our of $X.XX to continuing first we to a shareholders.

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

Rory Byrne

Jacinta. Thanks

While the both operating environment it bring opportunities so challenges. far in XXXX new with continues to some and new

signs stability supply to in see noted chain XXXX, the so bring to of do logistical which efficiencies period disruptions. long is more sector several last far of helping after we in As a improved severe we our update, in areas,

rains unprecedented the the berry are impact events, in We’ve and to also that continue closely we monitoring which in seen second quarter, vegetables as through region. the of some weather progress California, and crops unusual impact we

our with a do more Lastly, moderating signs looking environment, macroeconomic strengthening business the inflation continued for areas. continue prices, in euro, stable of and at see fuel certain we to positives

also headwinds, said, unhelpful put strong That Rican our position particularly our Costa cost overall, has column year in we being our us high full excellent the However, to deliver believe with an seeing unusual currency interest rates on with are remaining and first targets. base. movements, to financial we quarter

the continuing we well million continue for dynamic, of operations to deliver growth, to is and XXXX. we remains business positioned expect year in full $XXX do from environment EBITDA Our for the while operate adjusted of

pleased not only with strategic financially strong the have on to are with wider outlined earlier start the very In made in making the the conclusion, are XXXX, we we progress we we but year. priorities

Fresh by their as provides and focusing continuing look businesses, in as to their forward, our on of on-going want out for our committed PLC for Synergy again capital, the and our on-going which towards strategic of the the and XXXX support, well a accelerating people approach with thanking confidence disciplined with sale finish we all across To the priorities efficiencies drive business, recap, projects, as for dedicated on-going cost remainder Vegetable growth including core year. customers us and Dole to our I are principal suppliers the to efforts of control completing business. our operating

it I’ll and So questions. open to that, the for can hand we operator the line with back

Operator

a [Operator question of comes from Chris Instructions] Bank. Barnes line Your first Deutsche from

Your line is open.

Chris Barnes

decision you maybe macro the can conditions some particularly to just or unwind are when part, to we and move expecting but Good second I guidance are of but prudence uncertainty strength, specific you Hi. reiterate? the Thanks. the the just was street year. for just EBITDA the that first California question you’re on around I we challenges expected, guys. than the mean, I was a appreciate better with only in weather lot the having year. the the comparisons reaffirmed afternoon, something at on macro, the that and this deteriorate? to XQ the guess least half just as Is elaborate into tougher your you get on expected

Rory Byrne

Thanks, forecasting live Yes. particular, still know, quite the very, I Chris, it’s very it’s year. the the the as current strong QX world are had that XXX, in the debt it’s Last obvious for in some in early in U.S. complex. and with we’re We’ve it very mean, the comfortable relatively Yes and you seems whether question. still quite, got on-going, factors. year, big ceiling the whether macro very war, issues we is we

able while in for out and a right the We’ve worst been our much history what with any timing of felt, we rains we Colombo some a way Rica we are has the guidance pineapples to think a didn’t we’re and XXX, all very just highlighted But with challenges. has Obviously, it, I there. pretty years we So a weather think, the them. our hundred source year. with happy The to appreciated of change shown, think couple headwinds are significantly. serious QX has very strong the the Costa There but I California. issue been manage in way comfortable the have those through we’ve was in

the overall sticking the on position and guidance is taken XXX. really we’ve that So with

Chris Barnes

absorbing just like That’s you like EBITDA, up, as And helpful. about costs of the follow vegetables. with million looks restatement Understood. fresh discontinue just $XX overhead it then to segment the you’re of

just whether down, associated you with time? what expect guess, any of to costs the stranded going timing to degree when Or part is And do to over really is overhead? that base there of work year forward? or you So extract this some Thanks. it expect these I

Rory Byrne

process. sell No, the We’ve we embedded when expensive the are into to that so, your them the lot quite division. we’ve It’s progress think, and costs associated say office had until SEC, adapting those issues over on-going a would allocation SOX it’s we’ve the head the fair be when of some with made objective of we requirements get to I that. to systems. you our fully or cost great costs, of on And year division, sell a, reduce last that Chris, got an

So at future got costs. It’s have on looking we and have cost. an process, a years office on-going head the head and we’ve for a always our right-sized specific team total planning focus office been that, to particular

Chris Barnes

it I’ll pass very much. on. Thanks

Operator

And Ben of your from Bienvenu next question from line comes a Stephens.

is open. line Your

Ben Bienvenu

Hey, that Good in year? comments I Congratulations. of you you Kind kind the everybody. near-term up what through California. the rains start that of of thanks. morning, move with on to as we the what’s just the see want and what you’ve seen this there, following follow-through effect then made impacts of are rest

Rory Byrne

make Johan, that? a you to want on comment

Johan Linden

Yes.

So, in we had rain two incidents California. of

crop bad, too one the last about but not was out. took the that came one first really of some The

have where we’ve also why of good scarcity, QX. that is we a happened and seen we have higher has reasons what seen some that’s pricing, now, we one are therefore right and the So, now,

also starting coming we vegetables, off impacted because how the because with end see the towards QX. we of rains okay see, of We’re what more and volume lot that but a of planting, the

the oversupply impact. in towards That’s direct we see QX. market do So, an the

right of because our some scarcity. business And value-added vegetables now higher for

Rory Byrne

has then scheme overall But a the been well. material operations, things, on-going the of hugely berry significantly us. not as business disrupted probably And on the side, for number in quite

Ben Bienvenu

Okay.

desire having Can once of the that grow good. inorganically of M&A bit has you multiples then great little rates Very impacted Okay. sale with about And complete from how you And that the vegetables, talk about sheet’s again the risen, standpoint? your the to in potential thinking a rest a an year, position. balance of pursue? might fresh you targets

Rory Byrne

our we obviously, been year have keeping we cost the But world. mean, consolidation. sure happening last two the all such same changes have adapt at and on eye of making a focused I to business. environment in our periods close time, adopter really on or been a And been what's the Yes. we've dynamic

are We bought our that interesting department. do corporate sold players transactions have taking and watch own that companies internal for place, the We are being us. are the finance and all the that

And it'll those. I there. there So take about forward time out some a moving think on are opportunities interesting

We continue seen keep eye rates haven't far, our coming to so going despite up, interest pricing on we down.

public disconnect still does the and valuation. mentioned seem to of something I markets of that private think it I've markets before, between a the in terms

So term. think our grow over question is for I and over will the -- that's it's they then I us. a hope But time, And long plan -- to to continue medium

in right So continue a believe we we will record adding do over good track of that. M&A And term, medium to transactions. the the

Ben Bienvenu

Thanks much. Okay. very

Operator

Adam next the And of line from your comes from Samuelson question Sachs. Goldman

Your line open. is

Unidentified Analyst

products mentioned the wondering you This actually could additional if fresh are your is on for a export everybody. morning, conservative diversified if the any produced And additional could improving that wondering for you color provide Thanks. strategy. on I Guillermo the stepping more well. visibility I was coming drivers [Ph] as color the for you Good presentation in and softness Adam. over drivers Americas in implementing you lastly, provide was quarters. of those on the that year-over-year

Rory Byrne

Guillermo. Okay,

of I in is some a of our reason misleading. think part reporting the business little segments bit can quarterly be

of this don’t said at into South was look of And because QX. going foresee QX huge has happen. products in was at market XXXX that’s year, great the happened in the that that, year, supply moment, And problems, worse. QX of of a dynamics where was there of to we QX considerably XXXX. versus XXXX, came the chain America very business there was, glut you out opposite in So, strong Central example, last now supply for Having personal the

spoke has that some little of The export of nothing issues, And about been really the the suffered some bit conservative just berry production about and timing business more of a our we we export a problems volumes to primarily on major. approach back difficult some strategies, talking market more but grade around year. were cutting because last differences when

for at would full more still we division expect all do than outcome Looking be those year this the that factors, satisfactory.

Johan Linden

to to into different thing when was Rory volume in New was that is Year add of because was also year instead One the the Sherry’s comes this Chinese QX. so a QX earlier, of exported it seasonality the lot there going

Rory Byrne

Yes. Johan. Thanks,

Unidentified Analyst

across helpful. And super you’ve consumer if Thanks. geographies? if follow-up any and the That’s either add on change trend, I in across or could business a demand elasticity, seen the

Rory Byrne

a bit product, higher We elasticity pound demand. or products at bit haven’t on little price Perhaps a of seen at kilo the any perhaps pressure of per of the material some impact the of price per of little on again I healthy pressure our they’ve good. that so organics region in when people, that nothing prudential on category, and spend consumers, so experience got obviously. far mean, is they that to material are but price, into spend, continuing discretionary individual

Unidentified Analyst

super quarter. the on That’s helpful. Thanks. And congrats

Rory Byrne

you. Thank

Operator

of Your a Instructions] question Spillane from [Operator Bank of next America. from comes Bryan line

line open. Your is

Bryan Spillane

asset to; right. questions All One, first an there and morning, I for make I expecting million sure sale me. the of are asset if sales. was terms in just whole Good I said wanted I want of XX X know that I million you’re properties, the heard sell. you another everyone. thought Two guess, to in to I caught comment that quarter, I thing. don’t of operator. Thanks, just there then

Jacinta Devine

Yes, no, that’s correct.

would million split March, then had December. another of about $X.X we of QX. of the and $XX are million sale balance have And on that So assets property. been XXst for of at end $XX of sheet million And they actively have between about our we in sales proceeds the marketed at $XX million

million. But challenging. bit yes, in little a it’s always is $XX timing So, total

Bryan Spillane

should in there taxable proceeds. these roughly is And about think And Like, excuse asset me. a the Okay. like event just sales? cash we then, how then is

Jacinta Devine

of in Yes. are there some Yes, them.

certainly will on So cash tax a those. there be impact

Bryan Spillane

it, some of Okay. for and properties then it assets there’s have. listening some sounds And you’ve well, like, sounds buyers you or impression the other my identified it to maybe like, and

So is up there through potential asset like, creep is there move for activity the as number, chance we there? sales actually Like, a that the year? more that

Jacinta Devine

And we have out, those we than figures sold I called hope vessels. the mean, that have we so. It’s always challenge. a are other

So at for of balance our December sheet on sale. they the end weren’t

for additional an And X.X got that’s proceeds of million So vessels. sale. we’ve those

Bryan Spillane

mostly I It land? is Okay. most selling want you vessels to right. was of And sure just it’s it’s make are this, but it like sounds I or vessels,

Jacinta Devine

No.

a we X.X And for in two posts rest use was the quarter in, million Hawaiian So of the that our to us the vessels business. relate Land. that majority didn’t of

Bryan Spillane

Okay.

Okay. Yes. even Thank retailers And in their of show as, market end the think prices produce the have we’re question, slow as in at as the I down, kind of to are come I we’ve consumers. you. guess, observed U.S., some then second is looking cost one changes things to

sense, your of get to your bit come is wanted that down their retailers we or There’s then, we, margin, accurate more maybe we as accurate? the we’ll real-time and a we actually of kind just So of kind capturing little a through move as do a guess, have see been of, that as do happening. think of what’s expectation year, costs reflection, I

transient. our that’s suggest just downs want retailers margin and if a structural but types cap trying there’s that’s of Not to that more ups that of change lots checks there’s to understanding understand to or just -- just that, different something been with and have observation on hold and produce,

Rory Byrne

Bryan, it’s sense always call to although transient. of something Yes. more probably is that it, it’s hard My

increases. to make need to buy. to been and range same pass at wide ultimate that genuine terms trying on price the a And the that the cost continue across time, sure of have consumers products the to retailers balance in think of requirement I realistic retail

sector, So margins the evidence retailers significant pricing have the we the, don’t are changes any to of in fresh pricing. taking any the of in produce any of particular on that out

similar broadly a it’s Europe, on So situation.

think dynamic a and there. moving pineapples, those in non-banana was much range accurately but relevant there’s So, individual flexible does when of wide products I don’t that pricing base last comment across pretty your any products. I material cost a shift such think reflect we the it’s one, very have model the

Bryan Spillane

just Jacinta, over Okay. be Would maybe currency there’s today, is currency nothing a so And year? to can, tailwind the then reported if, one, one if the results I they moved. balance last for just of stable are

Jacinta Devine

Yes, certainly no, it would.

dollar, So if probably take for the it’s we euro currency major us.

X% full we’re about QX up and approximately on year the while down X% actually the X% And it’s in quarter, so versus basis. from

and So yes, we should in retranslated our certainly. numbers. there Similarly see positivity SEK some with the

So…

Bryan Spillane

Not the it if EBITDA but it’ll to the and of should same, if, year. contribute the be, balance it predicting currencies, stays

Jacinta Devine

last absolutely. Yes, year. Versus

Bryan Spillane

Thank Correct. All Great. right. you.

Rory Byrne

Bryan. Thanks

Operator

question from comes Martin a from of next your Davy. And Gary line

Your line is open.

Gary Martin

Morning set strong all. Congratulations on results. a of

QX on pineapple with. HX. that start few Just questions was to and banana begin particularly just fresh with my Do just looking robust supply fruit strong. the really and and side. the was I’ll a This in good dynamics That kind just you place? a think are quite of expecting question. into continue gist basically demand of I’m to performance QX’s my year. still Would of the be out rest

Rory Byrne

on comment want that? to you Johan,

Johan Linden

Yes.

So it into supply. don’t overall, with started that same a more tight demand the see way We supply. year see balanced comes a continue we a bananas to QX. We much when very

it’s balance So a one. tight compared a to

we supply on pineapple a side, the tighten However, up. seen have

shortness. believe see We bit a it’s short, little we good. there that of a So

we you it demand, it together all to comes feel in for fruits. that if are we overall place So supply a when fresh good put and

in that healthy. So also be we QX will believe the

Gary Martin

see just into commercial continuing obviously kind And I It cargo. color Excellent. that’s strength has the the but how I then FY some think didn’t, update in XXXX there I previously mean, on fresh about the, been performance of there remaining? just the fruit performing? segment, It’s, Can you mean, spoke I associated XXXX, get strong I or in results. the, not just no with presentation an either of was or the kind just

Rory Byrne

moved dry XXXX. contribution is the still, that cargo we’re Yes, the off some have in at is dry the of of it to cargo we’re the a down profits of lot peaks rates of still have division and and

still well. doing So but it’s down,

Gary Martin

of terms just the of he moderating, increasing year. what’s Excellent. get just your overall for kind just in puts lay the inflation kind for just the and sourcing, second question, view just the shipping to and just a on suppose out and costs. decreasing I mean, I think then what’s just on called but of land regards I And as takes of to to some of rest just and

Rory Byrne

I think the, comment we does to the that make can around be is costs. broad greater of really only those on it a stability appear degree

the so seeing saw I seeing of bag, sense not increases think on but through fully that that and either. them flown think, of costs, a reduction hasn’t it we refill years some but I far it’s lots shipping some of mixed in into the level down, you’re containers, stability our it And dry of containers, prior moderation. rates and rest, in we’re is the the

Gary Martin

Pass caller. on. Good it Thanks. Excellent.

Operator

there the closing And at over some comments. to final I time. this further no are Rory questions for Byrne call will CEO now turn back

Rory Byrne

the all and you and participating questions. the thank Well, you. for Thank

quarter in those a we had be and successfully. move to and in through strong So good believe navigated way I we’ve we we’ve obviously forward we think some can we’re And well positioned there to with very continue summary, our way. challenges pretty pleased think very another out challenges major

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

Operator

your Thank This concludes conference for call. you participation. today’s

now may disconnect. You

Dole (DOLE) 18 May 232023 Q1 Earnings call transcript