Investor Relations April/May 2016 Fyffes plc
Fyffes overview Operates in the international fresh 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 Investor Relations | April/May 2016
2016 Acquisition activity | Highline Produce Fits Fyffes strategic objective of adding a 4 th product to our portfolio • • Fits criteria of being an established, successful, integrated operator in a category with significant scale • Fully integrated Eastern Canada based mushroom business • Experienced management team. 55 year history • 4 owned production facilities and 1 leased distribution centre • Debt free valuation of CAD$145m ( € 98m) • Equivalent to 8.1 times pro forma annualised EBITDA of CAD$18m ( € 12m) • Immediately accretive • Net debt post acquisition less than 2.5 times EBITDA. Will reduce to less than 2 times within 2 years 2 Investor Relations | April/May 2016
2015 Acquisition activity | Farming assets Purchased additional melon farming Purchased banana farm in Costa Rica assets in Guatemala • Investment of US$15m • Comprises 2,500 hectares of leased land • Have been operating farm since early 2014 and 4 packaging stations under lease arrangement • Adds c.25% to existing capacity in melon • Accounts for c.3% of Fyffes banana volumes category • Investment of US$18.3m plus US$10m- US$12m incremental working capital 3 Investor Relations | April/May 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 Investor Relations | April/May 2016
Fyffes | Market position Market size Market size Europe North America (Cases) (Cases/lbs) #1 300m #4 250m Fyffes 46m 10m (JV) #3 75m #3 80m Fyffes 7m 3m - - #1 50m Fyffes N/A 17m - - #4 1,100m lbs Fyffes N/A 58m 5 Investor Relations | April/May 2016
Competitive advantages • Scale of business • Relationships with “best in class” suppliers • Strong brand recognition • Valuable asset base • State of the art infrastructural network • Strong customer relationships 6 Investor Relations | April/May 2016
Focus on efficient capital allocation Acquisitions at all points in the Increasing supply chain and dividend organic growth Share buy-backs • Key medium term focus is on growing the business through M&A • Believe further consolidation is needed in industry 7 Investor Relations | April/May 2016
Shareholder return Dividends Buybacks Total €’M €’M €’M 2007 5.3 1.7 7.0 2008 5.2 5.3 10.6 2009 5.7 - 5.7 2010 5.9 5.3 11.2 2011 5.9 12.7 18.6 2012 5.9 - 5.9 2013 6.2 - 6.2 2014 6.6 3.0 9.6 2015 7.3 - 7.3 Total 54.0 28.1 82.1 • 2015 dividend 2.745 cent (+15.0%) • Compound annual growth in dividend 2008-2015 of 9.0% • Dividend yield 1.7% based on 160 cent share price 8 Investor Relations | April/May 2016
Summary Strong 2015 result. EBITA up 14.2% to € 45.8m Acquisition of Highline Produce Limited for CAD$145m ( € 98m) Revised 2016 target EBITA range of € 49m- € 55m (including Highline for 9 months post acquisition) Focus on future development and shareholder value 9 Investor Relations | April/May 2016
Overview of operations 10 Investor Relations | April/May 2016
Overview of operations |production Production Profile Bananas Pineapples Melons Mushrooms Growing cycle 9 months 14 months 6-10 weeks 10 weeks Harvesting Year round Year round Seasonal Year round Fyffes’ own production c.7% c.65% c.100% c.90% 11 Investor Relations | April/May 2016
Banana category 12 Investor Relations | April/May 2016
Key drivers of short term performance Selling price • Influenced by many factors, particularly volume • UK market – medium term pricing • Continental market – short term pricing more prevalent, but trend towards medium term deals Cost of fruit • Annual pricing and production costs Shipping / fuel • Long term container shipping deal in place • Fuel purchased weekly Exchange rates • Costs US Dollar denominated • Revenue in Euro and Sterling Import duty • Programmed reduction in banana import duty 13 Investor Relations | April/May 2016
Overview of operations Logistics • Fruit shipped in container ships in reefer containers • Ensures freshness of produce and delays banana ripening process • 4 week round trip to / from Tropics. Routing tailored to our requirements • Weekly deliveries to multiple European ports • Bunker fuel a significant factor 14 Investor Relations | April/May 2016
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 Investor Relations | April/May 2016
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 46m Costa Rica 100m+ Fresh Del Monte 117m Chiquita 33m Philippines 100m+ Dole (post disposal) 110m Fresh Del Monte 23m Colombia 90m+ Fyffes 56m Dole 19m * Fyffes has new ripening JV in China. Targeting 3m+ cases per annum 16 Investor Relations | April/May 2016
Pineapple category 17 Investor Relations | April/May 2016
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 18 Investor Relations | April/May 2016
Melon category 19 Investor Relations | April/May 2016
Melons ● US imports c.50m cases of melons from November – May ● #1 in this category – importing c.17m cases - before recent acquisition which is expected to add 20-25% to volumes ● Volumes / sales doubled since acquisition ● Production capacity increased in Honduras and Guatemala each year US market 20 Investor Relations | April/May 2016
Mushroom category 21 Investor Relations | April/May 2016
Mushrooms • Total North American fresh mushroom market c.1,100m lbs (500k MT) • Highline volumes c.58m lbs (26k MT) – #4 position in North America – #1 in Canada – #1 globally in organic production • Highline uses modern production systems – Significant historical investment in facilities – Focus on higher yields and good quality • Mushrooms are a “superfood” – great source of minerals, vitamins and antioxidants 22 Investor Relations | April/May 2016
Increased focus on production • Farmed land in Central America – bananas, pineapples and melons • Land values appreciating in Central America 23 Investor Relations | April/May 2016
Appendix 24 Investor Relations | April/May 2016
Summary | 2015 Fyffes delivered another year of record earnings EBITA up 14.2% to € 45.8m EPS up 14% to 12.73 cent 7 th consecutive year of earnings growth Compound annual growth in EPS of 18.2% since 2008 Strong return on invested capital of 15.9% Full year dividend increased by 15% 25 Investor Relations | April/May 2016
Financial highlights | 2015 2015 2014 % Change Total revenue € 1,222.5m € 1,090.9m +12.1% EBITDA 1 € 56.1m € 48.2m +16.4% EBITA 1 € 45.8m € 40.1m +14.2% EBIT 1 € 45.8m € 40.1m +14.2% EPS 2 12.73c 11.17c +14.0% Total dividend 2.745c 2.387c +15.0% per share ROIC 3 15.9% 18.4% - 1. Before exceptional items and share of joint venture tax. 2. Before exceptional items. 3. ROIC after tax, including JVs. 26 Investor Relations | April/May 2016
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