Dole plc (DOLE) on Q3 2021 Results - Earnings Call Transcript

Operator: Hello all and welcome to the Dole plc Third Quarter 2021 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 a 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: Welcome, everybody. And thank you for joining our Third Quarter 2021 Conference Call. Joining me on the call today, are Rory Byrne, Chief Executive Officer, Johan Lindén, Chief Operating Officer, and Frank Davis, Chief Financial Officer. This conference call is being webcast live on our website and will be available for replay after this call. During this call, we'll be referring to presentation slides to supplement our remarks. And these are available on the Investor Relations section of the Dole plc website. Please note, our remarks today will include certain forward-looking statements within the provisions of the Federal Securities Safe Harbor Law. These reflect circumstances at the time they are made, and the Company expressly disclaims any obligation to update or revise any forward-looking statements. Actual results or outcomes may differ materially from those that may be expressed or implied due to a wide range of factors, including those set forth in our SEC filings and news releases. Our earnings release, financial reports, and related materials for the third quarter can be found on our website at doleplcs.com/investors. Information regarding the use of non-GAAP financial measures may also be found in the note section of the release, which also includes a reconciliation to the most comparable GAAP measures of adjusted EBITDA, adjusted net income, net debt, and adjusted earnings per share. The details of our statutory forward-looking statements disclaimer can be found in our SEC filings and the presentation slides we will be discussing today. With that, I'm pleased to turn today's call over to Rory. Rory Byrne: Thank you, James, and thank you all for joining us on our first earnings call as Dole plc following our IPO in July. I just wanted to discuss in our third quarter 2021 results and performance year-to-date, and also provide you with a high-level overview of the Dole plc business. And later in the presentation, I will give you some further insight into our long-term strategy. Johan will give an update on trading, progress being made on the synergies, and comment on some of these strategic initiatives being undertaken across the globe. And finally, Frank will take us through the financial review. With that, turning to Slide 5, while 2021 has been a transformative year for the group, Dole plc was formed by bringing together Total Produce PLC and Dole Food Company, followed by the IPO of this new Company at the end of July. We received net proceeds of $398.9 million from the IPO and all of the proceeds were used to strengthen our balance sheet by repaying higher cost stash. Concurrently with the IPO we also successfully completed at $1.44 billion refinancing package, providing us with a well-structured liquidity to support our continued growth. For the purposes of this presentation and set out in our press release issued today financial information that's been prepared on a pro forma basis illustrating Dole PLC's results as if the merger, IPO, and refinancing had all occurred on 1 January 2020. This is consistent with the pro forma financial information presented in the Form F-1 filed with the SEC in connection with the IPO. Since the IPO at the end of July, we've been focused on the integration and reorganization of management across the enlarged density, implementing our synergy strategy and further strengthening our public Company reporting and compliance functions. Looking at our financial performance, we've delivered strong results for the first 9 months of the year against the backdrop of a unique economic environment. Pro forma revenue and pro forma adjusted EBITDA are both up versus the comparable prior-year period with pro forma revenue up 4.5% and pro forma adjusted EBITDA of 12.6%. We're very pleased with this growth, consent against the context of a strong prior year. And also given the complexity of currently being experienced in supply chains across the globe. Talent, dedication of our people, along with the diversity of our operations, both from a geographic and a product and service offering perspective, as well as our sophisticated asset base has helped us to manage the industry-wide supply chain pressures. We've witnessed firsthand the continued benefits of our integrated business model and of having control over assets within our supply chain, such as our fleet of 11 ships that we operate and approximately 17,000 containers in our tropical food business. This has enabled us to continue to deliver in a challenging environment. Despite the benefits of our integrated supply chain, we've not been immune from industry-wide cost inflation, which emerged earlier this year. As increasing inflationary pressures emerged, we initially focused our efforts on optimizing our supply chain to limit cost impacts. However, now that's clear that inflation is pervasive and persistent, we have reacted by increasing prices in the segment of our business that have longer-term contracts, such as our Tropical Fruit division and Value-Added Solids. And we're pleased that our customer base has largely been supportive and understanding. Within the diversified segments of our business, pricing tends to be more dynamic, and to date, we've been able to largely pass-through cost increases by working closely with our suppliers and our customers. We're also very pleased with our financial position following the IPO. At the end of Q3, our net leverage of 2.76 times, which is below our target level of 3 times. A well-capitalized balance sheets creates the basis for long-term sustainable growth for the group, and I will provide a recap of our long-term strategy later in the presentation. Today, we've also announced a cash dividend for the third quarter of 2021, with pay a dividend of $0.08 per share on January 7, 2022, to shareholders on record on the 17th of December 2021. We're providing a full-year 2021 pro forma revenue target in the range of $9.2 billion to $9.4 billion, and a full-year 2021, pro forma adjusted EBITDA target in the range of $390 million to $400 million. This corresponds to year-on-year pro forma growth of 2.6% to 4.8%. And pro forma adjusted EBITDA growth of 4.9% to 7.6%. I'll provide further details on our outlook later in the presentation. Turning to slide 7, I'll now give you a brief overview of the Dole plc business. We are a global leader of fresh produce of nearly 2 times larger in terms of revenue than the next largest Company in this category. We produce, we market, distribute an extensive variety of fresh fruits and vegetables across the globe. Our projects are sourced both locally and from around the world, from our broad sourcing network and from our own farms. We've over -- we have sales in over 80 countries, with North America and Europe being our largest markets, but also with the presence in parts of Asia, Latin America, the Middle East, and Africa. Four operating divisions of Dole PLC are 1. Fresh Fruit, 2. Fresh Vegetables, 3. Diversified Fresh Produce America and rest of the world, and 4. Diversified Fresh Produce - EMEA. Fresh Fruit division is responsible for farming, sourcing, and distribution of bananas, pineapples, and various other tropical fruit as well as providing commercial cargo services. Principal markets, geographic regions, served are North America and Europe. Fresh Vegetables is responsible for the distribution sale of Fresh Packed Vegetables, as well as value-added salads, which include prepacked salads and meal kits. The two diversified divisions are responsible for the production, marketing, and distribution of a wide variety of Fresh Produce. The customers primarily in North America and Europe, across the retail, wholesale, and food service challenge -- channels. Dole plc has leadership positions in categories such as bananas, pineapples, value-added salads, grapes, and Fresh Packed Vegetables. We also have a focus and expanding presence indeed in faster growing product categories such as avocados, berries, and organic produce. Fresh Produce is a key and growing category within the overall food sector. We are seeing an acceleration of growth driven by health and wellness trends. Consumers are increasingly focused on their physical and mental well-being, on sustainability, and they're shifting towards plant-based, vegetarian, and vegan diets as a way to improve their health and reduce their own carbon footprint. As a result, the category itself is focused to experience annual growth of over 2.7% per annum over the next 5 years. One final point to mention is that the market that we operate in is still highly fragmented with significant potential for further consolidation. At Total Produce, we use M&A as a successful lever for growth and we expect Dole plc to do the same. In Slide 8, just to remind you, we've illustrated the wide geographical presence of Dole plc, as well as giving some insight into the highly valuable and strategic asset base that we have. We operate in over 250 facilities across the globe, including over 160 distribution facilities and 75 pack houses. We're operating 12 cold storage facilities and 5 salad manufacturing plants. We own over 109,000 acres of land. This owned acreage, combined with the multi-continental sourcing model, enables operating flexibility and product availability throughout the year on hand and enhances our ability to manage costs. Another important strategic asset is our fleet of ships. We own 13 ships and operate 11 of those ships ourselves, with two currently out on charter. And included in the 11 are 2 new ships, we took delivery of earlier this year, the Dole Aztec on the Dole Maya. Our 11 owned and operated ships are used for the shipping of tropical produce from our production facilities in Central and South America to our customer network and North America and Europe, and support our commercial cargo business. Having our own fleet of ships provides greater certainty of distribution and enhances our supply chain transparency and control. So, with that, I'll pass you now over to Johan to give an update on operations. Johan Lindén: Thanks, Rory. Good morning, everyone. I want to start by emphasizing both my own excitement for what we have started here at Dole plc, as well as my satisfaction with how we have progress to date with our first steps as the new Company. As you've heard already from Rory, the performance of the combined business year-to-date on a pro forma basis been strong, and provides an excellent foundation for the opportunities ahead. Turning to Slide 11, as Rory has already noted, we are not immune to inflationary pressures and so we have had needed to take actions to address the ongoing challenges, including initiate price increases. In the Fresh Fruit and Fresh Vegetables division, which represent 45% of our pro forma revenues, we typically have longer-term contracts in place, and so we have needed to address the current issues proactively. In that context, we have been pleased with the response from our customers to the price increases that we have looked for and we're progressing well towards having the pricing in place to offset current inflationary pressures in full, in 2022. In the diversified Fresh Produce division, which represents 55% of pro forma revenues. Pricing tends to be on a short-term basis. And any inflationary cost increases can be passed through the supply chain relatively quickly. While we are pleased with the support from our customers, we also know that in this environment, we need to be highly focused and attentive to all aspects of the supply chain so we can continue to deliver excellent products and service to our partners, and a healthy business for our stakeholders. Looking at the 4 divisions in more detail. This has been an abnormal year in Fresh Fruit. Throughout the year we have endured significant cost impact on both our sourcing base and supply chain following the November 2020 hurricanes in Guatemala and Honduras. And more recently, by the current inflationary pressures. To deal with increased cost pressures, we have been working with our customers to increase pricing and expect to have the pricing we need to offset the current inflationary impact in place by the end of 2021. It's been a challenging year in Fresh Vegetables division for 2 main reasons, both of which are being addressed. The first is that our Fresh Packed Vegetables business has suffered from persistently weak market pricing, caused in part by oversupply as the market planted for greater recovery in the food service sector than has been possible as COVID-19 has lingered. To address this issue, we have reduced our own planting to limit our market exposure in 2022. We have also seen some short-term relief in the form of better pricing as the market has achieved more balance with the move to the winter Philippine locations. The second impact has been the significant deflationary challenges that have affected the Value-Added Salads business, particularly in relation to freight, labor, and packaging. Heading into Q4, we have already implemented price increases with value added customers to help address inflationary challenges we saw early in the year. In our diversified business in America, we have overcome Pacific weather-related challenges by relying on our diversified range of products and services and have grown our business by both further strengthening our customer relationships and by continuing to grow in high growth categories like berries and avocados. And finally, in our Diversified EMEA business, we have withstood the continued impact of COVID-19 related disruptions, both in supply and in demand patterns by building on our strong customer relationships and providing unrivaled service in a challenging environment. We also reorganized our Dutch businesses, which has contributed to strong growth. Next, I would like to mention some of the investments we have made, which we believe will drive the business forward in the years to come. Most critically, we took delivery this summer of two new vessels, Dole Aztec and Dole Maya that will serve our U.S. Gulf markets, and which we believe are foundational asset ability to manage today's unique supply chain challenges. Year-to-date, as numerous global ports have suffered with congestion and delays, leading to equipment shortages and rising shipping costs, we have been able to insulate ourselves from the worst of the crisis by relying on our owned asset and by operating out of ports where we have our own operating teams on the ground. In addition to the protection of our integrated supply chain, has afforded us in the current environment. I'm very pleased to say that both the size of the new vessels and the new routes we have implemented, bring both a better environmental footprint as well as reduced costs. To give it a color, with the two new ships, we were able to retire 4 old ones. We're both invested significantly in replanting in Honduras, after several of our Company's farm were devastated by last year's hurricane. We believe our quick action to reinvest and the incredible work of our team on the ground, position us well to drive further cost competitiveness in the business in the years to come. An unreported succeeding initiative for us this year was the acquisition of an additional pineapple farm in Costa Rica, that is adjacent to 1 of our existing farms. This farm has been one of our long-term growers and the owner had been looking to sell the business. The acquisition secured the supply, allows us to access additional growing margin and give us an opportunity to expand margins by driving synergy to the combined farms. Finally, we have also invested this year in important packaging and cooling assets at source and close to the market. We believe investments here, not all make sense with the operations on a standalone basis, but it will also give us an enhanced capability to further drive group synergies. And on the topic of synergy. I would like to make a few specific points on the additional steps we have taken to position ourselves to delivering on our city target for the years to come. Firstly, and of critical importance, executive management team of Dole plc are quickly building on our existing relationships to establish the foundation for long-term growth. All the necessary functional projects that come with any mergers are advancing well, and we have integrated several key management teams, across the legacy Dole Food Company and Total Produce businesses. We believe this cross-pollination will not only bring new practices and ideas to existing areas, but we'd also foster the culture we need in our management teams to sustain our existing success and develop our new opportunities. We have already made some small investments together to drive further integration, like in the French market, where we are planning to grow our presence with new ripening capabilities. And in South Africa, where we are consolidating some of our sourcing operations. We have also established a new cross-Company logistic function that is currently laying the foundation for key group-wide projects. We're also seeing good forecast for growth in selling and sourcing for both core products and higher-growth products like Berries and Avocados. As we look forward into 2022, we expect to make further strides with sourcing efficiencies, particularly in South America and South Africa, while selling opportunities and extension of the globe brand in important European market and also with specific progress on our logistic Berries and Avocados strategies. With that, I will hand you to Frank to give you the financial review. Frank Davis: Thank you, Johan. I'm very pleased to be reporting our first quarterly earnings as Dole plc, following our listing on the New York Stock Exchange. As we've already mentioned at the outset, the financial information referred to today, and is outlined in our press release, has been prepared on a pro forma basis, illustrating Dole plc's earnings. As if the merger, IPO, and refinancing had occurred on January 1, 2020. This methodology is consistent with the pro forma financial information presented in the Form F-1, filed with the SEC in connection with the IPO. Turning first to Slide 15, Dole plc has delivered a strong result, with year-to-date pro forma revenue up 4.5% to $7.1 billion at the end of September. The increase in the year-to-date pro forma revenue was driven by growth in the 2 diversified Fresh Produce divisions and the Fresh Vegetables division. For the third quarter of 2021, pro forma revenue is 0.3% ahead of the prior year. Year-to-date pro forma adjusted EBITDA is up 12.6% to $337.7 million compared to $299.9 million for the first 9 months of 2020. The increase in the year-to-date EBITDA has been driven by EBITDA increases in the Fresh Fruit division, followed by a strong first half of the year and from Diversified Fresh Produce-EMEA. This is partially offset by EBITDA decreases in the fresh vegetables division due primarily to weakness in our Fresh Packed Vegetables business due to an oversupplied market, as well as inflationary pressures in value-added salads. Additionally, an EBITDA decrease in Diversified Fresh Produce Americas and rest of world, due to the impact of adverse weather event at the outset of the year. Pro forma adjusted EBITDA is down 35.4% for the third quarter -- 35.4% for the third quarter of 2021, versus the comparable quarter in 2020. The decrease was predominantly driven by EBITDA decreases in Fresh Vegetables due to weak markets in our Fresh Packed Vegetables business and inflationary headwinds in Value Added Salads. In addition, we experienced EBITDA decreases in the Fresh Fruit division due to the ongoing supply chain impacts following last year's hurricanes. Moving to the next slide. On a pro forma basis, adjusted net income was $131.6 million for the first 9 months of the year, which corresponds to a 22.5% increase from the first 9 months of 2020. The increase is predominantly due to the increase in pro forma adjusted EBITDA offset by an increase in depreciation charge and an increase in the earnings attributable to non-controlling shareholders. Looking at each of the divisions now in more detail and starting with Fresh Fruit, throughout the year, we have seen cost pressures from the supply chain impact caused by the hurricanes Iota and Eta in Honduras and Guatemala in November 2020. And more recently from the inflationary pressures, which have increased as the year has progressed. However, more positively, we have also seen good market pricing in the first half of the year and have been continuing to optimize our supply chain, including taken delivery of our 2 new vessels the Dole Aztec and the Dole Maya, to improve our own cause. Third quarter pro forma revenue was down 0.8% versus the prior year due to lower volumes of bananas in North America and lower banana price in Europe, as well as lower pricing per pineapples in North America. This was offset in part by higher pricing in North America for bananas, volume growth in pineapples in North America and in Europe, as well as growth in commercial cargo revenues due to higher freight rates. Year-to-date pro forma revenue was up 2.7% compared to the prior year due to higher banana pricing in North America and higher pineapple pricing across all markets, as well as growth in commercial cargo, partially offset by lower banana volumes in all markets. Third quarter 2021 pro forma adjusted EBITDA was down 53.2% compared to the prior year due to lower revenue and higher transportation cost in North America and higher produce costs driven by materials increases, as well as the continued impact on supply change from last year's hurricanes in Guatemala and Honduras. These cost increases were partially offset by improved performance in our commercial cargo business, as well as by the benefit of currency hedges in our European markets. For the year-to-date, pro forma adjusted EBITDA is up 27%, largely due to higher revenue, in particular with the benefit of higher prices in the U.S. banana markets, and the growth of the commercial cargo business. Partially offset by higher sourcing costs following the impact of the hurricanes last year and inflationary headwinds. Moving to the next slide, Fresh Vegetables. This division has had a challenging year for two main reasons as Johan mentioned earlier. 1. The Fresh Packed Vegetables market has been oversupplied in 2021 with the level of plantings based on an expectation that the recovery in would be greater than it's come to pass. This additional supply has put downward pressure on our markets for fresh pack ed products. With the outlook for COVID-19 in 2022 still uncertain, we are cutting back our own plantings to reduce our exposure. Within the Value-Added Salads business, we have persisted through significant inflationary pressures due to both the U.S. labor shortage and inland transportation challenges. However, as Johan mentioned, we have already successfully adjusted pricing with customers to help offset cost pressures from earlier in the year. Pro forma revenue increased 1% in the third quarter of 2021, primarily due to higher pricing in the Value-Added Salads business, offset in part by lower volumes in this business. Production was impacted by labor availability challenges in the quarter. In addition, lower volume and lower pricing in Fresh Packed Vegetables led to a decrease in revenue. Year-to-date pro forma revenue increased 4.3% due to higher volumes and pricing in the Value-Added Salads business, driven by strong market demand and a better mix of products sold. This was partially offset by revenue declines in the Fresh Packed business. Third quarter 2021, pro forma adjusted EBITDA decreased by 90.8%, primarily, due to persistently weak Fresh Packed Vegetables markets. The impact of inflation in inland transportation as well as in packaging and labor, continue to increase. However, the early action taken on increase in prices with customers in Value Added Salads also started to offset some of these pressures in the quarter. Finally, pro forma adjusted EBITDA, for the first nine months, decreased 84.8%, primarily again, due to the impact of persistently weak Fresh Packed Vegetables market and inflationary challenges mentioned earlier. Looking next at Diversified Fresh Produce, Americas and rest of world. third quarter 2021 pro forma revenue was up to 4% primarily due to a strong performance in the berry category and growth in apples and kiwis from Chile, offset, partially by some port-related challenges in North American export business. Pro forma revenue for the first nine months of 2021 was up 5.2% primarily due to higher revenue from various and more incrementally by growth in the Chilean export fruit business. Third quarter 2021 pro forma adjusted EBITDA was down 52.4%, largely driven by the continuing impact of adverse weather during the Chilean grape growing season in the first part of the year, partially offset by good growth in Berries. Pro forma adjusted EBITDA for the year-to-date was down 15.1%, with the decrease again, substantially driven by the adverse weather events that impacted the Chilean grape season. This was offset in part by EBITDA improvement from the berry category, as well as in asparagus and in Chilean Top Fruit and Stone Fruit. Finally, Diversified Fresh Produce, EMEA has had a strong performance in 2021, year-to-date. A reorganization of our Dutch businesses has valid a recovery in the foodservice channels, contributed to this strong growth. Pro forma revenue decreased 0.8% for the third quarter of 2021 due to the divestment of a business in the third quarter, partially offset by the incremental contributions from step-up acquisitions and a favorable impact of currency translation. Pro forma revenues are up 5.9% for the first 9 months of the year due to a positive currency movements and strong performance across all channels, and the contribution from set of acquisitions in the period. This was partially offset by the incremental impact of divestments in the third quarter. Third quarter 2021 pro forma adjusted EBITDA was up 9.4% due to a good recovery in our Dutch business, following the reorganization mentioned previously, as well as the strong performance across other European markets and the favorable impact of foreign currency translation. Finally, pro forma adjusted EBITDA for the year-to-date is 33.8% ahead of prior year. Again, driven by recovery in our Dutch business, and good performance in Ireland and the UK, driven by the reopening of food service channels. Our Brazilian export business also performed strongly. The results also benefited from favorable foreign currency translation. Looking at our capital allocation and leverage on Slide 21, our Company expenditures strategy is focused on investing where we see the greatest opportunities for profitable growth to support our existing strong market positions in core products. Because of this combination, we believe ultimately drives the best returns for our shareholders. While in a typical financial year we expect that our couple expenditures will be broadly in line with our depreciation expense. This will vary at times, primarily as our reinvestment cycle with major capital assets is not linear. In 2021, we made a number of strategic investments. We made $53 million in final payments for our 2 new vessels in the first half of 2021. In addition, we spent $16 million reinvested in our Honduran farms impacted by last year's hurricanes, and $25 million in acquiring pineapple assets that bring a unique strategic value to our operations. As already mentioned previously, we have announced a quarterly cash dividend for the third quarter of 2021, up $0.08 per share, which will be paid in early January to shareholders on record on the 17th of December 2021. Finally, we will continue to focus on maintaining leverage within our targeted level of 3 times net debt to adjusted EBITDA. At the end of the third quarter, our net leverage ratio was 2.76 times. Now I would like to hand you back to Johan who will give an update on ESG initiatives being undertaken across the group. Johan Lindén: Thanks, Frank. The Fresh Produce industry is delivering the most nutritious of fruits to the world at the lowest environmental impact. Increasing consumption of fruits and vegetables is almost universally recommended by health leaders, doctors, and nutritionists. Proper nutrition plays a crucial role towards improving the quality and longevity of life for millions of people that are suffering in growing numbers by health issues related to unhealthy eating. In comparison to other foods sources, the environmental impact from produce-related emissions and water usage, is among the lowest, making it an exceptional food category to tackle the food needs on an ever-increasing world population. Why the Fresh Produce industry is worth to fish in.? We at Dole plc have formally committed to ambitions environment and social targets for our Company and intend to lead the produce industry on the journey to establish even more sustainable ways to operate. We're taking this journey in partnership with the broad stakeholder groups, while they anchored in science and the latest research. And we are dedicated to continuous improvements in sustainable production from field to port. In 2022, Dole plc, we finalized a new combined framework, materiality assessment, and a set of goals during the first half of the year. We also committed to disclosing our emissions as a combined entity to CDP for the first time in 2022. This will include Scope 1 and Scope 2 data. And qualification of Scope 3 emission is well underway. With that, I will pass you back to Rory, to provide our outlook for the reminder of full-year '21. Rory Byrne: Thanks, Johan. I suppose even with the complexities that we're currently experiencing in the world throughout the supply chain, we do still expect full-year pro forma revenue and pro forma adjusted EBITDA growth. For the full-year of 2021, we expect to deliver pro forma revenue in the range of $9.2billion to $9.4 billion. We also expect pro forma adjusted EBITDA in the range of $390 million to $400 million, our mid-single-digit growth from the prior year. For the remainder of 2021 and looking into 2022, we expect our Fresh Fruit division to continue to deliver a robust performance by leveraging its significant asset base and customer relationships as well as due to the continuing recovery in Honduras. For Fresh Vegetables, we expect to continue to leverage the strong underlying growth in the Value-Added segment of this division to both grow our own sales and to support a pricing model and customer relationships that allow us to respond to cost pressures where they cannot be offset. And finally, on our two Diversified Fresh Produce businesses, we expect to continue to build on our success with key customers by leveraging the benefits of Dole plc 's integrated supply chain to bring our customers even closer to source and by continuing to expand our service offerings in the marketplace. Overall, we remain confident that the excellent underlying fundamentals of our category, our primary position in this category, and our high-quality asset base and people will combine to position us for success for the remainder of 2021 and into 2022. On slide 27, we've set out the elements of our strategy to deliver sustainable, long-term growth. Our growth strategy is focused on expanding our presence in the large and growing Fresh produce segment as well as continuing to focus on our core business, we're setting out to capture market share in the faster growing categories such as Avocados, Berries, Value Added Salads and Organic Produce. These categories are growing at above average growth levels and together represent circa 25% of our total revenue. Our integrated supply chain provides competitive advantages, and our goal will be to continue to further optimize this to unlock additional opportunities for growth. We also own the leading brands in the sector, the Dole brand. A brand which is aligned with quality, freshness, and a healthier lifestyle for consumers. We'll continue to utilize the strength of this iconic brand and expand its presence into additional categories and markets. We'll deepen our market penetration by continuing to focus on new product innovation on strengthening our customer relationships through enhanced customer insights. This is particularly relevant to the Value-Added Salads category and that's one of the main reasons for growth in this division. Finally, we've historically grown total produce through acquisitions and we continue to look for synergistic M&A opportunities. Market is fragmented and growing, and we believe we are well-positioned to capitalize on the opportunities that may be presented. In closing then, we're very pleased with the Company's strong performance during 2021 and the outlook for the remainder of the year. Our position as the global leader in Fresh Produce with a wide geographic footprint and diverse product offering, coupled with the talent and dedication of our people, leaves us well-positioned to deliver long-term, sustainable growth. So, with that, I'll hand you back to the Operator, and we can open the line for questions. Thank you. Operator: Thanks, Rory. The first question today comes from Adam Samuelson of Goldman Sachs. Your line is open. Adam Samuelson : Yes. Thank you. Good morning, everyone. So, I guess my first question is thinking about 2021. Obviously, there's been strong performance in parts of the business and especially in the first half of the year in specific challenges and inflationary headwinds that you've experienced in the second half. Next to a full-year EBITDA outlook that seems pretty consistent with how you would think about your long-term growth framework with what you know today, in terms of the pricing actions that you've taken, in terms of the price, in terms of managing the inflationary environment that you're in, addressing some of the specific things in the Fresh Vegetables, is there a reason to think that you wouldn't be able to achieve that kind of mid-term mid-single-digit EBITDA growth in '22 were just -- it seems like your stock remains very skeptical of that view and I'd love to get your perspective. Rory Byrne : Yes. Thanks, Adam. And yes, I mean, I think what you really got to do is perhaps even look back at the history of only we were told to produce on a standalone basis. From the merger with fights back in 2006 to the creation of this new line to do with something like that compound growth of 400% in 2019 and a standalone basis and total produce we have achieved over 10% EPS growth. And then in 2020, a further 9.1%. And if we are running the numbers on the Salad and Total Produce basis for '21, we'd have really strong numbers again. It's a complicated world out there, and lots of headwinds, lots of challenges around sudden surges in inflation. I think lots of unexpected consequences arising from the COVID crisis. And the most important thing for me is that we're still up to all those challenges and the diversity of earnings across all the different geographies that we are operate in, the different product segments that we operate in, we've been able to react and we've been able to hit the target, thus we pretty much set out at the time of IPO for 2021. And if so, what we haven't really been surprised by anything that's emerged. And with everything that we know, we've no reason to believe that we can't continue on the same path going into 2022. Adam Samuelson : Okay. That's really helpful. So maybe then just on capital allocation then and again, this comes to kind of a stock valuation point. You talked about bolt-on M&A and that makes sense. Your leverage is slightly below the long-term target. How could we think about opportunistic share repurchase? As a use of capital, particularly where the stock is now it just would seem to be particularly attractive use of cash with the stock trading well below the IPO price and your leverage below, kind of your target range? Rory Byrne : I mean, it's an interesting point, Adam. And obviously, we keep our eyes on all of the potential capitalized allocation opportunities open to us, including buyback. And in some ways, it's a bit contradictory to having just recently IPO'd the Company to start buybacks very quickly, but there is no doubt that we will keep that tool in the toolbox as an alternative. And clearly, at the current racing, it's difficult to buy even smaller companies at that value, let alone the biggest Company in the world. So, we're well aware of the dynamics, and we keep our eye on this. And it's one of the elements of capital allocation that over the medium long-term is there for us to use. Adam Samuelson : Okay. It's a helpful color. I'll pass it on. Thank you. Rory Byrne : Thank s, Adam. Operator: Thank you. Our next question today comes from Christopher Bonds of Deutsche Bank. Christopher, your line is open. Christopher Bonds : Hi, good afternoon. I just want to follow-up on Adam's first question on the inflationary pressures. Good to hear that you think you can still do mid-single-digit growth in EBITDA next year but it seems like we're past the TIC inflation peak pressures on many commodities, but freight, especially like inland transportation, remains challenging, even if there should be relief coming as capacity's online and more drivers return, but we're also starting to hear more and more about incremental labor and wage rate going forward. So, I mean, with all that in mind, I mean, Johan, you mentioned that pricing in Fresh Fruit should -- is enough to offset current levels of inflation. And their diversified segment also taking pricing later this month. But I guess to the extent you see additional pressure from here, like how well do you think 2022 is protected? Are there any areas you believe need additional work from here, whether in terms of pricing or other actions on your part? Any color you are able to provide there will be very helpful. Thanks. Rory Byrne : Yes. Thanks, Christian. And obviously, we are in a very, very dynamic world at the moment. As I said in answering Adam's question, I think that there's been huge consequences from the COVID pandemic that -- dislocation of containers, transport, disruptions to the labor markets, and uneven demand from consumers and lots and lots of things that has caused surges and inflation in certain categories. You've seen the chip issue around production of cars and things like that. There are some extraordinary events that nobody particularly predicted. So, I mean, and suppliers, we can. We've tried to analyze what the inflationary pressures are. On certain aspects of our business, we can lock in costs for the full-year. I think, as Johan said, as well, in the Diversified Fresh Produce side of our business, pricing tends to be very short-term as well. So, in that division, we really -- it tends to be seasonal, it tends to be quite variable, depending on supply and demand out of different regions of the world into the market. And that tends to be more accustomed to coping with ongoing cost changes. And you tend to be able to pass it through in a much clear way to the customers and people are used to variable pricing and -- It's our fixed-price areas that we're going to be a little bit more careful in analyzing. We've got some flexibility around major divergences and cost. So, I mean, who knows just were looking into 2022, we've been surprised by lots of things over the course of last year. And so far, as we can, and with what's within our control, and the commitment and dedication of management, we're feeling or feeling comfortable with where we are. Christopher Bonds : Got it. That's all very helpful. Rory Byrne : Maybe Johan would like to add something further on that, perhaps. Johan Lindén : No. I think you're right on. I mean, we were a little surprised on all the price shocks that happened in the beginning of the year. And we thought, maybe there will be a transitionary, there -- if we were a little bit slow to react. But now, we have reacted then we have the things in place that we feel we need going into the new year, but we're going to say attentive and we also to have dialogue with customers to see if we, over time, not directly now but over time can change some of the contracts where we are building indexes into the contracts. So, when something happens, automatically, prices will be changed. We have some of those indexes already in place when it comes to fuel for North America. But we're also looking at now putting other indexes in place. Christopher Bonds : Okay. Very helpful. thank you. Operator: Next question comes from Patrick Higgins of Goodbody Stockbrokers. Your line is open Patrick. Patrick Higgins : Thanks. Good morning, everyone. And couple of questions from me if that's okay. So firstly, just and obviously, a good start here, H1, Q3, slightly more difficult or quite difficult. How was trading continued into Q4? Have you seen some of the challenges around supply chain or labor availability at ease? And added to that, how is pricing -- the price increases within the Fresh Value-Added Salads business being received? Secondly, is just on the synergies and the $30 million to $40 million. Interested to hear if there's any kind of delivery on them or perhaps a comment on the expected timelines delivery of some of them into next year. And then finally, just on cash flows and net debt. Obviously, a strong performance to end the September. How should we think about cash flows into year-end? Should we entice those, I guess, an improvement in net debt for that September number, or is there any kind of outflows we should be aware of? Rory Byrne : Thanks, Patrick. Yes. On the terms of looking at how you look at H1, Q3, and Q4. I think the best way to look at that is to look at the forecast I have given you for the full year. And again, the most important point from my perspective is that the information that we gave to analysts in the Analyst Day that we had pre the IPO. And we're very comfortable that that was an accurate reflection of what was going to evolve over the course of 2021. And we continue to believe in the numbers then obviously that they are reflected in the full-year outlook. So, I think we're comfortable with that. In terms of synergies, again, Johan might want to comment a little bit further or not. But what we -- obviously, we've kicked off the process on a whole range of projects. Again, we believe that -- we've no reason to believe that the synergies won't flow in the same way that we had anticipated at the outset of the IPO. We're making progress versus restructure on managements to bring together the 2 teams in a better way. And we've dedicated the resource to the different projects. We were looking carefully at trying to build and bring together the different elements of our business in categories such as Berries or Avocados. And on the Berry one, we're having a very external look at what we've got today and what we want to have tomorrow and how we might get there. So again, I think the timetable in terms of delivery, the synergies will be within that outlined at the time of the IPO. And then, in terms of cash flows and net dash and -- I don't know, Frank, maybe first of all, Johan if you want 1 minute, 1 second on the synergies and then maybe Frank might deal with the cash flow and net debt question. Patrick Higgins : Yeah, maybe one second then on the synergy. So, when we set out in the -- when we did the -- when we went to market and some of the initial publication that we sent out, we said that synergies would be in the medium-term between 30 and 40 and that will build up over Johan Lindén : time. So, for the number that we're looking for next year we feel relatively comfortable about. And so far, we have progressed well. We have centralized the logistic function, and we can see some benefits negotiating already. We have merged certain sourcing activities, especially when it comes to South Africa, but also when it comes to avocados and berries for Europe. That is progressing well. What we've also done is that we have moved some people over between the companies and that's actually the best thing you can do because then you really get synergies working quickly because then they can explain for the other side what's going on and they can tell the -- where they're coming from the benefits of the other side. So that's working very well. We have identified where to expand the use of the brand. within Europe and overall, the team has had working to where it was, we feel very good about the synergies. And maybe add 1 thing to add some light on the Q3. It is that it was expected also to certain extent to have the weaker Q3 when you think about the hurricanes that we had last year, because the hurricanes led to a tight market for bananas in the first half. And that was expected, so we had good pricing, so we had very good development during the first half, whereas we also knew that there would be, to a certain extent, some oversupply in the Q3 area. And that happened. And now the market is tightening up again. So, we feel comfortable. I think that's, Rory, what I can add. Rory Byrne : Frank then on the cash flow question perhaps? Frank Davis : Sure. Yes. Patrick, as you know, in our industry, we tend to have a working capital inflow at this time of the year, trending towards the end of the year. So, I would anticipate maybe a slight improvement. The reason why it's tempered is that we also have some CapEx and at the last quarter, as well, that will temper that. But overall, I'd expect -- I would hope it's certainly a slight improvement. It depends where it lands, but down to timing. For the slight improvement, I would expect, Patrick, overall. Really, it's timing. Rory Byrne : Thanks. Operator: Our next question comes from Bryan Spillane of Bank of America. Your line is open, Brian. Bryan Spillane : Thank you, Operator. Good morning, everyone. So just 2 questions for me. 1. Just as we're thinking about the price increases that you've recently implemented to the extent that we start to see relief on cost. How much of that pricing do you think will end up having to be rescinded or will it not? I guess I'm trying to understand how we should be thinking about matching your inflation with net pricing, and to the extent that we see inflation begin to moderate next year, would we expect that to also flow through in terms of lower prices? And then I have a follow-up. Rory Byrne : I guess, Brian, you must be in the optimistic category about inflation if you think that it's going to receive so strongly. I think what Johan said earlier is what we've done is we're trying to introduce a few new categories into the variable element of the annual fixed prices. And for example, on the fuel surcharge, it can go up or down, depending on the movements in the price. And some of the other elements will do something similar. So, you've got downside and upside protection in it. Bryan Spillane : And then second question, just around M&A. You talked -- touched on it a little bit earlier during the call. And I guess I'm curious with the pressure that is on the -- your peers in the industry. Have that maybe loosened things up a little bit in terms of properties that you might be interested in? And could it actually accelerate or enhance the M&A activity? Rory Byrne : I think it's not entirely fair to say that our peers are under enormous pressure. I mean, I don't quite see it like that. The industry is actually doing pretty well. And if you look at, say, the Fresh Del Monte results, they actually -- they had a poor third quarter, but the rest of the numbers are pretty good. You look at the European companies that have -- and disclosed numbers -- or familiar with the insights. So, the industry is really -- it's not in a negative space in anyway. And the fundamentals in the industry are pretty strong and we did very well during the -- we managed to keep running pretty well in the whole pandemic difficult time. So, the dynamic hasn't changed fundamentally. Obviously, we'd like to have a completely -- we'd like to have a much stronger share writing that would help us and make more encouraging for us to do it. But, no, there hasn't been a dramatic change in the available opportunities. There's a -- there is. We've had a lot more people approach us given our scale, our size, and seeing that yes, being part of this very interesting entity will be something very interesting. So that -- those open up more opportunities. But it's -- we're examining each one on its merits. Bryan Spillane : Fair enough. Rory Byrne : Did that answer your question. Yes. Bryan Spillane : Yeah, no, it definitely does. Thank you very much. Operator: Our next question today comes from Ken Zaslow of BMO. Your lines open, Ken. Ken Zaslow : Good morning, everyone. Just had a couple of questions. My first one is, when I think about your first half, how much of the benefit was some force majeure pricing, and then when you look forward into the 2022, how do the comps compare to that? Will your net pricing -- because you did talk about mid-single-digit growth? Does that change how you think about the profit in 2022 on a comparable basis? Rory Byrne : I think if you go out to '22, the dynamic over the course of the year is quite likely to be different compared to the quarterly dynamic over the course of 2021 for sure. Ken Zaslow : Can you give us some framework to how much force majeure did actually add in the first half of 2021 too? So, we have Rory Byrne : I don't think it's a question of force majeure having outage, anything to the equation because we had significant cost associated with the hurricane damage in both Honduras and Guatemala. It's more really just -- and you're probably going to argue for a slightly longer force majeure to compensate for that. So, it's a complex equation. It's -- I think we'll see a more balanced pricing over the course of 2022, but it's a little early to call that, and we don't really look at this on a quarter-by-quarter basis. With this -- is -- we've got to look at this in the context of an entire year. So yes, there can be movements from quarters year-on-year and yes, the dynamic maybe different, and we expect it to be different in '22 to '21, but we look at the full-year. And we're still confident of the full year, 2022 outcome. Force majeure really covered the cost of the Honduras and Guatemala hurricanes and no more than that. Ken Zaslow : I'll take it offline. And then my next question is, as you've seen the pricing, can you talk about the elasticity to which you're seeing with consumers? And how is that playing out? Rory Byrne : I think -- yes, I think if you look at say, bananas in particular, have been relatively cheap to the consumer. So, it's been very elastic to price. We haven't actually seen a falloff in consumption. You look at our other broader range of products and the diversified section out, as I said earlier, that they are used to quite a bit of variability and pricing depending on origin. So, it's not the same selling, in the UK, Chilean grapes, selling Spanish grapes, for example, with all the cost differential between transport, et c., bring in to the market. And then as season changes, people adapt price, but we haven't seen any impact on demand as a result of price increases. And as I say, the baseline for bananas in particular is quite low. And consumers are happy to continue eating bananas, even though its slightly more expensive price. Ken Zaslow : Okay. And my last question is, when you think about the logistic issues and the challenges that you faced. Does that at all, have any impact on your synergy realization going forward, particularly on as you're trying to expand into Europe and use the brand maybe more on the sales side of it, even more than the cost side of it. Have you seen any impact on that? And then there I'll leave it there and I appreciate your time. Rory Byrne : Ken. I don't think we have seen any material impact from lash on our on our synergy projects, no. Ken Zaslow : Great. I appreciate it. Thank you, guys very much. Rory Byrne : Thank you. Operator: Thank you. And our final question today comes from Roland, please go ahead. Roland French : Hi. Thank you. Good morning, afternoon, everybody. Thanks for all the color. And thanks for taking my questions. And I think I have 3 on the pad. Just maybe -- just firstly, you may have said this, I Just didn't pick it up. But broadly, we think of kind of the COGS basket, where is inflation running us? And I guess, I'd like to ask, should we think about what pricing is required to mitigate that inflation headwind? And then just second, I think, Johan, you mentioned that customers have largely been supportive to date, and that heading into 2020, you've taken the requisite pricing actions to mitigate that inflation. Just in context of the contract negotiations within Fresh Fruit and the banana category in January, how should we think about that i.e., have you done a component of the book. And as we sit today, but by and large, there's still a lot of work to do in January with those retailers? And then maybe the final comments again, just for clarification, you've alluded to confidence around mid-single-digit growth in 2022. Just in terms of the shape of that, clearly, and not dragging you into quarters, but clearly, you've had a very strong H1 this year, but maybe even just on a margin, top-line margin basis representing that we need to think about there, i.e., could revenue be stronger in context of pricing? I'll leave at that. Thanks, so much investors. Rory Byrne : Okay, thanks, Roland. Yes, in terms of the COGS inflation by category and vary by difference -- different elements of the cost chain. Paper costs have gone up, fertilizer costs have gone up, and things like transport costs are different for different operators. And there's some competitive elements to that, that are not the same for all operators in the game. We can have some cases we got an advantage, so I don't think -- we don't want to get into the very specific elements of inflation around micro elements of our cost of goods and lines. But we're confident that the price increases that we are seeking will compensate us for those cost increases going forward. And in terms of contracting, the process, obviously, is underway at the moment, we're having constructive, positive interaction with all of our key customers. And I suppose that underpins our confidence that we will be able to get through the required level of price increases. I think everybody -- because it's not just in our segment, but it's in pretty much all the industries you're seeing inflation and sudden inflation across different elements of the cost chain for many, many industries. So, it's not unique to 1 particular operator. It's not unique to also as a Company within -- our industry is very similar to many others. So, it's a conversation with key customers are having with many, many sectors. So that perhaps makes it a little bit more understandable to the customers. And we're getting a better reaction from the customers as a result of Nash (ph). And in terms of the growth terms for 2022, I mean, to be in line with the productivity -- we think they're going to be in broadly in line with the projections that we gave at the time of the IPO for all the reasons that we set out in the F1, I think growing in June here for money with all of those. But we're not breaking it down into any new and our different expectations for 2022 versus the expectations that we gave partly during the year as part of the IPO process. Roland French : Okay. That's very constructive. Thanks so much. Operator: Thank you. We have no further questions in the queue. So, I'll hand back for closing remarks. Rory Byrne : Okay. I'd just like to say thank you very much to everybody for taking the time to join us on our very first our earnings call and update call. Obviously, it's the first time we've had the opportunity to interact with the investors and analysts into one public, and we hope you've got a better understanding of the medium-term, long-term objectives that we've got as a group and a better understanding and appreciation of the scale and size of our operations. The consistency of our earnings, and the broad diversity of earnings that we got. And thank you for your support and hopefully we will see a better share place when we come back for the next quarter. So, thank you very much. Good day. Operator: This concludes today's call. Thank you for joining. You may now disconnect.
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Dole Stock Gains 3% Following Q1 Results

Dole (NYSE:DOLE) shares rose nearly 3% pre-market today after the company reported a first-quarter EPS of $0.43, exceeding the analyst prediction of $0.33. The company's revenue for the quarter was $2.12 billion, aligning with the consensus estimate.

Looking ahead to the fiscal year 2024, Dole expressed satisfaction with its strong start to the year, which they believe positions the company well for achieving a robust overall performance.

Although it's still early in the year and forecasting continues to be challenging, Dole is committed to achieving a full-year Adjusted EBITDA that matches the 2023 figures. After accounting for the sale of Progressive Produce, this equates to an Adjusted EBITDA target of at least $360 million for the year.

For 2024, Dole plans to maintain its capital expenditure for continuing operations between $110 million and $120 million and has lowered its expected interest expense to range from $75 million to $80 million.

Dole Shares Up 11% Since Q3 Results Announcement

Dole plc (NYSE:DOLE) shares gained more than 11% since the company’s reported Q3 results on Thursday, with EPS of $0.14 coming in better than the Street estimate of $0.10. Revenue was $2.27 billion, in line with the Street expectations.

Investor consternation regarding a more substantial cut to guidance was assuaged. The company does now anticipate EBITDA finishing toward the lower end of its prior $330-$350 million EBITDA range, but strength in Fresh Fruit helped mitigate the weakness attributed to sustained softness in salads, one-time logistical bottlenecks in Chilean grapes in Q3 and adverse MTM impacts from FX.

Furthermore, the company noted it is positioned well to implement cost-justified price increases in the contracted Fresh Fruit business, which should help support EBITDA growth into 2023.

Fiscal 2022 revenue is expected to be in the range of $9.1-9.4 billion, compared to the Street estimate of $9.17 billion.

Dole Shares Up 11% Since Q3 Results Announcement

Dole plc (NYSE:DOLE) shares gained more than 11% since the company’s reported Q3 results on Thursday, with EPS of $0.14 coming in better than the Street estimate of $0.10. Revenue was $2.27 billion, in line with the Street expectations.

Investor consternation regarding a more substantial cut to guidance was assuaged. The company does now anticipate EBITDA finishing toward the lower end of its prior $330-$350 million EBITDA range, but strength in Fresh Fruit helped mitigate the weakness attributed to sustained softness in salads, one-time logistical bottlenecks in Chilean grapes in Q3 and adverse MTM impacts from FX.

Furthermore, the company noted it is positioned well to implement cost-justified price increases in the contracted Fresh Fruit business, which should help support EBITDA growth into 2023.

Fiscal 2022 revenue is expected to be in the range of $9.1-9.4 billion, compared to the Street estimate of $9.17 billion.

Dole Reports Q2 Results, Cuts 2022 Guidance Again

Dole (NYSE:DOLE) reported its Q2 results, with EPS of $0.44 coming in better than the Street estimate of $0.38. Revenue was $2.4 billion, compared to the Street estimate of $2.49 billion.

Once again, the company lowered its 2022 outlook as softer industry trends in Fresh Vegetables prolonged the company's expected pathway to recovery, namely in the Value Added Salads business, alongside adverse marks-to-market on FX and cost inflation pressures.

For the full year, the company expects adjusted EBITDA to be in the range of $330-$350 million, a reduction of around 5.5% from its prior guidance.