Fyffes plc Preliminary Results 2014 27 February 2015 Fyffes - PowerPoint PPT Presentation

Fyffes plc Preliminary Results 2014 27 February 2015

Fyffes overview Operates in the international tropical produce sector - Product categories – bananas, pineapples, melons - Areas of activity – Europe, US, Central & South America Market leader in 2 of our 3 product categories Integrated supply chain – production, procurement, shipping, ripening, distribution and marketing Oldest fruit brand in the world dating back to 1929 History extends to 125+ years Dual listing on Irish (ESM) and London (AIM) stock exchanges 1 Preliminary Results 2014

2014 summary Fyffes delivers strong growth in earnings EBIT up 28.1% to € 40.1m EPS up 26.6% to 11.17 cent Sixth consecutive year of earnings growth Compound annual growth in EPS of 18.9% since 2008 Strong return on invested capital of 18.4% Final dividend increased by 12.3% Target EBIT* range for 2015 of € 36m- € 42m 2 Preliminary Results 2014

Financial highlights 2014 2013 % Change Total revenue € 1,090.9m € 1,082.0m +0.8% EBITDA 1 € 48.2m € 40.0m +20.5% EBITA 1 € 40.1m € 32.7m +22.9% EBIT 1 € 40.1m € 31.3m +28.1% EPS 2 11.17c 8.82c +26.6% Total dividend 2.387c 2.17c +10.0% per share ROIC 3 18.4% 16.6% +10.8% 1. Before exceptional items, amortisation and share of joint venture tax. 2. Before exceptional items, amortisation. 3. ROIC after tax, including JVs. 3 Preliminary Results 2014

Earnings growth 2008 - 2014 EBITDA - €’M EPS - € cent 10.0- 60 12.00 11.17 11.8 44.0 – 50.0 48.2 8.82 50 10.00 8.55 40.0 40.0 40 8.00 6.05 29.6 5.50 26.9 5.19 25.7 30 6.00 3.95 18.9 20 4.00 10 2.00 0 0.00 2008 2009 2010 2011 2012 2013 2014 2015 2008 2009 2010 2011 2012 2013 2014 2015 EBITA - €’M 50 36.0- Growth rate 2008 - 2014 42.0 40.1 40 Absolute CAGR 32.7 30.5 30 EBITDA 156% 16.9% 23.2 20.7 21.3 EBITA 163% 17.5% 20 15.3 EPS 183% 18.9% 10 0 2008 2009 2010 2011 2012 2013 2014 2015 4 4 Preliminary Results 2014

Operating performance • c.1% increase in turnover. Organic growth in pineapple and melon 2014 2013 categories. Price deflation in bananas €’M €’M % and pineapples Total turnover 1,090.9 1,082.2 +0.8% • € 7.4m (23%) increase in Adjusted EBITA – analysed by category on following EBITDA 48.2 40.0 +20.5% slides Depreciation (8.1) (7.3) • EBIT up 28% reflecting elimination of EBITA 40.1 32.7 +22.9% amortisation charges Amortisation - (1.3) • Net € 4.3m exceptional gain re CQB break fee less costs incurred. Separate EBIT 40.1 31.3 +28.1% € 4.2m exceptional impairment charge in relation to one pineapple farm. 5 Preliminary Results 2014

Operating performance Bananas • Satisfactory performance in banana category. Modest increase in EBITA • Positive exchange rates due to US Dollar weakness but much of this benefit absorbed in lower average selling prices • Higher fruit costs, continuing multi-year trend • Other costs including logistics and import charges, slightly lower • Marginal increase in volumes • Exchange rates unfavourable entering 2015 due to strengthening of US Dollar. Partly offset by lower fuel costs. Targeting higher average selling prices 6 Preliminary Results 2014

Operating performance Pineapples • Good result in pineapple category – closer to target returns • Improved farming result with successful integration of second farm in Costa Rica acquired in early 2013 • Exceptional € 4.2m impairment charge recognised in respect of one farm • Positive exchange rate impact in 2014, as in banana category. Benefit largely absorbed in lower average selling prices • As in bananas, exchange rates unfavourable entering 2015. Targeting higher average selling prices 7 Preliminary Results 2014

Operating performance Melons • Strong performance in 2013/14 US import season • Further double digit organic growth, consolidating No.1 market position in US • Some price inflation year on year • Continued effective cost management with lower farming and logistics charges • Positive start to 2014/15 import season 8 Preliminary Results 2014

Summary cash flow €’M €’M Operating cash flows Adjusted EBITDA 48.2 Chiquita break fee, less costs 4.3 • Strong cash generation in period. Share option gain (net) (0.8) Operating cash flows of € 49.5m (16.6 cent Exclude JV EBITA (2.2) per share) 49.5 • Investment and other expenditure Free cash flow before non-recurring Capex of € 14.1m Maintenance Capex (7.2) New UK depots (2) (19.7) • € 19.7m non-recurring Capex includes Purchase of own shares (3.0) construction of replacement depot in UK Dividends paid (6.6) and buy-out of leased depot, also in UK Tax paid (4.9) • Working capital build-up includes € 5.8m Pension / MNOPF (1.4) loan to supplier which may be part Deferred consideration payments (2.5) payment for a banana farm Investment in JVs (0.9) Working capital / other (15.4) (61.6) Net cash outflow (12.1) Opening net cash 0.4 Closing net debt (11.7) 9 Preliminary Results 2014

Balance sheet 2014 2013 €’M €’M Intangible assets 24.5 20.9 • Significant high quality asset base – owns Property, plant and equipment 101.6 78.0 c.4,000 hectares of land in Central America Investment in joint ventures 40.1 38.9 Investment in Balmoral 0.1 0.1 • Now also own 4 large distribution centres – 3 in UK and 1 in Florida Working capital / hedging 77.9 49.1 Current / deferred tax (10.2) (10.1) • €35.1m increase in shareholders’ funds, Provisions (4.0) (5.6) includes € 15.6m translation gain Pension deficit (net of DT) (34.0) (22.8) • € 11.2m increase in pension deficit due to Net (debt)/cash (11.7) 0.4 reduction in bond rates 184.2 148.9 • Market value of investment in Balmoral now Shareholders ’ funds 182.7 147.6 € 3.5m Minority interests 1.6 1.3 184.2 148.9 10 Preliminary Results 2014

Overview of operations |production Production Profile Bananas Pineapples Melons Growing cycle 9 months 14 months 6-10 weeks Harvesting Year round Year round Seasonal Fyffes’ own production c.7% c.65% c.100% • Fyffes sources bananas under long term supply agreements with third party producers • Annual agreement on volume and price 11 Preliminary Results 2014

Bananas | Global marketplace Europe Russia 30 0m cases c.60 m cases marketed marketed Asia 120 m cases N America marketed 250m cases marketed China* 500 m cases 15% imported Middle East c.60m cases marketed Key Producers Ecuador 280m Key Distributors - Global Key Distributors - Europe Guatemala 115m Chiquita 125m Fyffes 44m Costa Rica 100m+ Fresh Del Monte 117m Chiquita 33m Philippines 100m+ Dole (post disposal) 110m Fresh Del Monte 23m Colombia 90m+ Fyffes 54m Dole 19m * Fyffes has new ripening JV in China. Targeting 3m+ cases per annum 12 Preliminary Results 2014

Key drivers of short term performance Selling price • Influenced by many factors, particularly volume • UK market – fixed pricing • Continental market – short term fixed deals more prevalent Cost of fruit • Annual contracts and production costs Shipping / fuel • Shipping contracts vary from 1-3 years • Fuel purchased weekly Exchange rates • Costs US Dollar denominated • Revenue in Euro and Sterling Import duty • Programmed reduction in banana import duty 13 Preliminary Results 2014

Overview of operations Logistics • Fruit shipped in dedicated reefer ships or container ships in reefer containers • Ensures freshness of produce and delays banana ripening process • 4 week round trip to / from Tropics • Weekly deliveries to multiple European ports • Shipping efficiencies critical to cost structures • Bunker fuel had become a significant factor but rates significantly lower now 14 Preliminary Results 2014

Overview of operations Distribution • Supply ripened (yellow) bananas to customers in UK / Ireland, mainly larger retailers • Fyffes only operator in UK with national distribution coverage • Ripening process takes 5-9 days • Traditionally only unripened (green) bananas sold to customers in Continental Europe • Increasing amount of Continental ripening including by Weichert and vanWylick JVs 15 Preliminary Results 2014

Pineapples | Global marketplace c.190 million cases marketed annually • North America – largest market with 80 million cases annually • Europe – 2 nd largest market with 75+ million Key producers Cases ‘M Key distributors Cases ‘M Costa Rica (80%) 150 Fresh Del Monte 60 Dole 35 Philippines (10%) 20 Fyffes 10 Chiquita 9 16 Preliminary Results 2014

Melons ● US imports c.50m cases of melons from Nov – May ● #1 in this category – importing c.17m cases ● Volumes / sales doubled since acquisition ● Production capacity increased in Honduras and Guatemala each year US market 17 Preliminary Results 2014

Fyffes | Market position Market size Market size Europe USA (Cases) (Cases) #1 300m #4 250m Fyffes 44m 9m (JV) #3 75m #3 80m Fyffes 8m 2m - - #1 50m Fyffes N/A 17m 18 Preliminary Results 2014