Interim Results 2 September 2016 Fyffes plc
Fyffes overview Operates in the international tropical produce sector - Portfolio products – bananas, pineapples, melons, mushrooms - Areas of activity – Europe, US, Canada, Central & South America Market leader in 3 of our 4 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 Interim Results 2016
Financial highlights | First half results H1 2016 H1 2015 % Change Total revenue €739.3m €644.3m +14.7% EBITDA* €44.0m €39.5m +11.3% EBITA* 36.6m €34.3m +6.6% PBT* 35.5m €33.9m +4.5% EPS** 10.01c 9.93c +0.8% Interim dividend 0.9032c 0.8211c 10.0% per share 14.3% N/A ROIC*** 16.8% * Before exceptional items and share of joint venture tax. ** Before exceptional items and amortisation charges. *** ROIC based on rolling twelve months, including JVs, compared to full year 2015. Includes pro forma 12 months for Highline. 2 Interim Results 2016
Reconfirming 2016 earnings targets 2015 2016 2016 % Change Actual Previous Updated Guidance 3 Guidance (to Guidance mid-point) EBITDA 1 €56.1m €54 -60m €63 -69m +15.7% EBITA 1 €45.8m €42 -48m €49 -55m +15.6% EPS 2 12.73c 11.4-13.1c 12.8-14.5c +11.4% 1. Before exceptional items and share of joint venture tax. 2. Before exceptional items and amortisation. 3. Updated guidance issued 29 April 2016. Includes post acquisition contribution from Highline. 3 Interim Results 2016
Fyffes earnings history & 2016 targets EBITDA - €’M EPS - € cent 18.00 12.80- 63.0- 80 14.50 16.00 69.0 70 56.1 12.73 14.00 11.17 48.2 60 12.00 8.55 8.82 40.0 40.0 50 10.00 6.05 29.6 5.50 26.9 40 5.19 25.7 8.00 3.95 18.9 30 6.00 20 4.00 10 2.00 0 0.00 2008 2009 2010 2011 2012 2013 2014 2015 2016 2008 2009 2010 2011 2012 2013 2014 2015 2016 Growth rate 2008 - 2015 EBITA - €’M 70 49.0- Absolute CAGR 55.0 60 45.8 40.1 EBITDA 198% 16.9% 50 32.7 30.5 40 EBITA 200% 17.0% 30 23.2 20.7 21.3 EPS 222% 18.2% 15.3 20 2016 target ranges updated 29 April 2016, 10 including impact of Highline for 9 months post 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 acquisition 4 4 Interim Results 2016
Summary profit & loss | 2016 first half H1 2016 H1 2015 €’M €’M % • c.15% increase in sales includes first time Total turnover 739.3 644.3 +14.7% contribution from Highline for 3 months post acquisition. Volume growth in each category, Adjusted EBITDA 44.0 39.5 +11.3% especially melons (+20%) following 2015 acquisition of additional farming assets. Some Depreciation (7.4) (5.2) price inflation. Adjusted EBITA 36.6 34.3 +6.6% • €2.3m increase in EBITA. Highline contribution €2.3m. Other categories in line with prior year Net interest (incl JV’s) (1.1) (0.4) overall. Analysed on following pages. Adjusted PBT 35.5 33.9 +4.5% • €1.7m exceptional credit includes €3.6m Exceptional credits/charges 1.7 (2.9) curtailment gain on closure of UK DB pension scheme less €1.9m due diligence costs on Amortisation (1.3) - acquisitions. Tax (incl share of JV’s) (6.0) (4.4) • Underlying tax charge estimated at 15% (2015 Minority interest 0.2 0.3 full year 13.8%). Increase driven by geographic mix of profits including Highline acquisition. Profit attributable to shareholders 30.1 26.9 +12.0% 5 Interim Results 2016
Operating performance | Bananas • Challenging trading conditions in banana category in first half • Significant adverse exchange rate movement – particularly GBP/USD • Reduction in some input costs, particularly fuel • Secured some price increases but not sufficient to offset adverse exchange rate movements • Further mid-single digit organic volume growth 6 Interim Results 2016
Operating performance | Pineapples • Strong performance in pineapple category in first half • As in banana category, exchange rates a headwind due to USD strength, but less exposure to USD/GBP rate as lower relative UK volumes • Secured increases in selling prices • Costs also lower, particularly fuel • Improved efficiency on own farms – higher yields and lower production costs • Strong mid-teens percentage increase in volumes 7 Interim Results 2016
Operating performance | Melons • Satisfactory result in melon category, including successful integration of additional farming assets in Guatemala acquired in late 2015 • 20%+ increase in volumes compared to previous import season. Now in excess of 20m cases • Higher operating costs due to expanded footprint – additional shipping capacity into US West Coast and wider sales distribution • Positive pricing environment during the season 8 Interim Results 2016
Operating performance | Mushrooms • Highline Produce acquired in April 2016 for €99m (CAD$145m) • Immediately accretive • EBITA for 3 months post acquisition of €2.3m. In line with expectations • Experienced management team remaining with the business 9 Interim Results 2016
Adjusted earnings per share | 2016 first half H1 2016 H1 2015 €’M €’M % Adjusted profit before tax 35.5 33.9 +4.5% Less: - Underlying tax (5.3) (4.4) - Minority interests 0.2 0.3 Adjusted earnings 30.4 29.8 +1.9% Diluted weighted average shares (M) 303.3 299.9 +1.1% Adjusted fully diluted earnings per share (cent) 10.01 9.93 +0.8% • Excludes exceptional items, amortisation charges and, in earlier years, share of Balmoral result 10 Interim Results 2016
Summary cash flow | 2016 first half €’M €’M Operating cash flows Adjusted EBITDA 44.0 • Strong cash generation in period. Exclude JV EBIT (4.4) Operating cash flows of €38.2m Cash impact of exceptional items in DD costs (1.7) • Dividends from JV’s 0.3 €92.2m invested in acquisitions net of cash acquired 38.2 Investment and other expenditure • €22.7m seasonal working capital inflow Regular Capex (14.3) following end of US melon import season Acquisition costs (net of cash acquired) (92.2) • Net debt will increase before end of year Dividends paid (5.7) due to seasonal rebuild of working capital Tax paid (3.6) in US melon business Pension / MNOPF (1.0) • Net debt/EBITDA 1.5 times based on mid Deferred consideration payments (1.1) point of EBITDA range. Reflects seasonal Working capital (seasonal inflow) 22.7 working capital low point. Working capital will increase again by year end Other (2.8) (98.0) Net cash outflow (59.8) Opening net debt (39.3) Closing net debt (99.1) 11 Interim Results 2016
Summary balance sheet June 2016 Dec 2015 €’M €’M Intangible assets 103.7 39.9 Property, plant and equipment 163.9 128.6 • Includes Highline. €66m goodwill / intangible Investment in joint ventures 38.9 36.3 assets on acquisition Investment in Balmoral 0.1 0.1 • Significant high quality asset base – owns Working capital / hedging 69.2 87.6 c.5,000 hectares of land in Central America Current / deferred tax (15.2) (8.4) • MNOPF / Deferred consideration (1.9) (3.5) Reduction in DB pension deficit following closure of UK scheme to future accrual in Pension deficit (net of DT) (16.8) (25.7) period. Closed Irish DB scheme in 2015 Net (debt) (99.1) (39.3) 242.7 215.6 • €27.3m increase in shareholders’ funds in period. Mainly retained profit and actuarial gains less dividends paid. Shareholders ’ funds 241.2 213.9 Minority interests 1.5 1.7 242.7 215.6 12 Interim Results 2016
Background to Mushroom Investment in 2016 • Reasons for a 4 th category • Category selection criteria • Highline 13 Interim Results 2016
Fyffes | 2008 Bananas • No.3 in EU • Market in settlement phase post regime change in 2006 Pineapples • Farms operated as JVs • Sub-optimal yields • Profits c. breakeven Melons • Purchased 60% of Sol • 7m box US import business • No.2 player in category 14 Interim Results 2016
Fyffes | 2015 Bananas • EU volume increased by 50% from 2006 regime change • No.1 volume player in EU • Costa Rica farm purchase • Significant logistics progression • China operations development Pineapples • JV partners bought out • Further farm purchases • Yields up to required levels • Returns in line with expectations Melons • Extension of source base to include Guatemala • Extension of market base to US West Coast • Volume trebled to > 20m cases • Clear No.1 melon importer to US 15 Interim Results 2016
2015 Summary • All categories performing well • Platform significantly increased – Geography – Volumes – Integration Timing right to develop 4 th category • • Portfolio approach developed 16 Interim Results 2016
Category selection criteria • Integrated business • Scale category • Scale player within category • Strong management • Opportunities to grow / consolidate within category 17 Interim Results 2016
Recommend
More recommend
