Q1 2024 Dole plc Earnings Call
Speaker Change: [music].
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Operator: Welcome to the Dole PLC First Quarter 2024 Earnings Conference Call and Webcast. Today's conference is being broadcast live over the internet and is also being recorded for playback purposes. Currently, all participants are in a listen-only mode. After the speaker's 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 at Dole PLC, James O. Regan.
Speaker Change: Welcome to the adult P. L. P first quarter 'twenty 'twenty four earnings conference call and webcast. Today's conference is being broadcast live over the Internet and is also being recorded for playback purposes. Currently all participants are in a listen only mode. After the speaker's presentation.
Speaker Change: 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 Adult plc, James All weekend.
Speaker Change: Thank you Todd welcome.
James O Regan: Welcome, everybody, and thank you for taking the time to join our first quarter 2024 Earnings Conference call on Webcast. Joining me on the call today is our Chief Executive Officer, Rory Byrne, our Chief Operating Officer, Johan Linden, and our Chief Financial Officer, Jacinta Devine.
Speaker Change: Welcome everybody and thank you for taking the time to join our first quarter 2024 earnings conference call and webcast.
Joining me on the call today is our Chief Executive Officer, Laurie Burns, our Chief operating Officer Chief.
Speaker Change: Chief Financial Officer since Dubai, starting.
James O Regan: During this call, we will be referring to presentation slides to supplement our remarks, and these, along with our earnings release and other related materials, 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 Security State Law. These reflect circumstances at the time they are made, and the company expressly disclaims any obligation to update or revise any forward-looking statement.
Speaker Change: Turning to Paul Brian presentation slides to supplement our remarks, these along with our earnings release and other related materials are available on the Investor Relations section of adult you'll see website.
Speaker Change: Our remarks today will include certain forward looking statements within the provisions of the federal Securities Safe Harbor laws.
Speaker Change: Circumstances, a plant 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 press releases.
James O Regan: 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 filing. Information regarding the use of non-GAAP financial measures may be found in our press release, which also includes a reconciliation of the most comparable GAAP measures. With that, I'm pleased to turn today's call over to Rory.
Speaker Change: Formation regarding these non-GAAP financial measures maybe found in our press release, which also includes a reconciliation to the most comparable GAAP measures.
Speaker Change: With that I'm pleased to turn today's call over jewelry.
Rory Patrick Byrne: Thank you, James. Welcome, everybody, and thank you for joining us today as we discuss our results for the first quarter of 2024. So, turning first to slide four on the financial highlights for Q1. Well, following a strong result in 2023, we're very pleased to report another good performance in the first quarter of 2024. Group revenue increased by 6.6% to $2.1 billion, and adjusted EBITDA increased 9.7% to $110 million. On a like-for-like basis, adjusted EBITDA increased 10.8%, including the impact of foreign exchange and M&A.
Speaker Change: Thank you James and welcome everybody and thank you for joining us today as we discuss our results for the first quarter of 2024.
Speaker Change: Turning first to slide four and the financial highlights for Q1.
Speaker Change: Following our strong results in 2023, we're very pleased to report another good performance in the first quarter of 2024.
Speaker Change: <unk> increased by six 6% to $2 $1 billion and adjusted EBITDA increased nine 7% to $110 million on a like for like basis. Adjusted EBITDA increased 10, 8%, excluding the impact of foreign exchange.
Speaker Change: Emanate.
Rory Patrick Byrne: The growth in Adjusted EBITDA was driven by a strong performance in our Diversified Fresh Produce America segment, continued growth in our Diversified Fresh Produce AMEA segment, and a stable, consistent performance in our Fresh Fruit segment. Adjusted Net Income increased $8.3 million to $40.6 million, and Adjusted Diluted EPS increased 26% to $0.43 per share.
Speaker Change: The growth in adjusted EBITDA was driven by a strong performance in our diversified fresh produce Americas segment continued growth in our diversified fresh produce segment and stable performance in our fresh food segment.
Speaker Change: Adjusted net income increased $8 $3 million to $40 6 million and adjusted EPS and adjusted EPS.
Speaker Change: EPS increased 26% to $2.43 per share.
Rory Patrick Byrne: Efficient management and allocation of our capital is a key strategic priority for the group. In this regard, we were pleased to complete the opportunistic sale of our 65% interest in progressive projects in March, realizing after-tax net proceeds of approximately $100 million. The proceeds from this sale have been used to repay debt, and at the end of the quarter, our net leverage stood at two times. During the quarter, we were disappointed to have to announce the termination of the agreement to sell our fresh vegetable division to Fresh Express. The decision to terminate was due to the DOJ's decision to pursue litigation if we had moved to close the transaction.
Speaker Change: Efficient management and allocation of our capital is a key strategic priority for the group.
Speaker Change: In this regard we're pleased to complete the opportunistic sale of our 65% interest in progressive tranches in March realizing.
Speaker Change: <unk> net proceeds.
Speaker Change: Approximately $100 million.
Speaker Change: The proceeds from this sale will be used for thank you Josh.
Speaker Change: And at the end of the quarter, our net leverage to two times.
Speaker Change: During the quarter, we were disappointed to announce the termination of the grid.
Speaker Change: In our fresh vegetable division between the decision to terminate it was due to the Doj's decision to pursue litigation that we had moved to close transactions.
Rory Patrick Byrne: We strongly disagree with this decision and continue to believe that the transaction was pro-competitive and would have unlocked ongoing benefits for customers and consumers. In any event, we are moving onwards, and we are actively exploring alternatives that are in the best interests of all the division stakeholders, employees, customers, partners, and indeed the Dole PLC shareholders. Turning now to slide six for our operational highlights, starting with our fresh food segment. This segment delivered another robust performance in the first quarter with a revenue of $69.4 million in line with Q1 2023.
Speaker Change: We disagree with this decision to continue to bleed gets transaction was pro competitive would've been locked ongoing benefits to customers and consumers.
Speaker Change: The event, where I'm moving onwards, and we are actively exploring alternatives.
Speaker Change: The best interest of all the divisions stakeholders employees customers partners.
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Speaker Change: Turning now to slide six our operational highlights starting.
Speaker Change: Starting with our fresh food segment.
Speaker Change: This segment delivered another robust performance in the first quarter when adjusted EBITDA of $69 $4 million in line Q1, 'twenty two 'twenty three.
Rory Patrick Byrne: Firstly, looking at Europe, we continue to build on an excellent turnaround year in 2023, in the first quarter of 2034, driven in particular by higher volumes of bananas and pineapples and lower sourcing and shipping costs. In North America, our operations are continuing to perform well, with good customer progress and benefiting from lower food costs to offset some lower pricing, reduced commercial cargo profitability, and, as anticipated, some higher shipping costs. While our shipping remains a consistent source of competitiveness and reliability for our operations, this is an area where we are anticipating higher costs in 2024, due in part to regulatory changes but also to periodic dry docking related costs.
Firstly looking at Europe, and continued to build on an excellent turnaround year in 2023, and the first quarter 'twenty driven in particular by higher volumes in bananas, and pineapples and lower sourcing shaking costs North America, our operations will continue to perform well with good customer progress benefiting from lower food cost.
Speaker Change: To offset some lower pricing reduced commercial cargo profitability andaz anticipated some higher shipping costs.
Speaker Change: Shipping remains consistent source of intelligence.
Speaker Change: Keep our operations. This is an area, where while we are anticipating higher costs in 2020 core June part to regulatory changes, but also see periodic dry docking related costs.
Rory Patrick Byrne: Looking ahead on the market side, we continue to see a competitive environment in both North America and Europe for the remainder of the year. However, we believe we are managing this well and have been able to win some new business due to our own competitiveness, as well as our continued efforts to expand our offering with additional products and varieties. On the sourcing side, we continue to face challenges such as currency appreciation in some key sourcing regions and lower yields due to weather-related impacts. And while forecasting is complex, we continue to focus on managing these challenges to maintain our competitiveness.
Speaker Change: Looking ahead on the market side, we continue to see a competitive environment does North America and Europe for the remainder of the year. However, we believe we are managing this well on not being able to launch new business due to our own competitiveness as well as our continued efforts to expand our offering with additional products and Brian.
Speaker Change: On the sourcing side, we continue to face challenges such as currency depreciation in some key sourcing regions and lower yields due to weather related impacts on forecasting is complex. We continue to focus on managing these challenges to maintain competitiveness.
Rory Patrick Byrne: As ever, our strong and experienced management team in this division is keenly focused on risk management and driving operation efficiencies, and together with our diverse sourcing infrastructure and customer base, we are confident in delivering another strong and consistent performance in 2024. Moving on to the diversified EMEA segment. Our diversified EMEA segment continued its momentum from the end of 2023 into the start of 2024, delivering a strong first quarter result. Revenue growth remained strong, and while this was mostly driven by higher pricing, we did see an improved balance on the volume side, with growth being seen in several markets.
Speaker Change: However, our strong and experienced management team in this division are keenly focused on risk management and driving operational efficiencies.
Speaker Change: Gathered with our diverse sourcing infrastructure and customer base, we are confident in delivering strong consistent performance in 2024.
Speaker Change: Moving on to the diversified segment.
Speaker Change: Our diversified segment has continued its momentum from the end of 'twenty two 'twenty three into the start of 2020 for delivering strong first quarter results revenue growth remained strong and while this was mostly driven by higher pricing. We did see an improved balance on the volume side with growth being seen in several markets adjusted EBITDA.
Speaker Change: In the quarter was driven by higher revenue margin expansion and good contributions across most regions in particular in northern Europe, and South Africa on.
Rory Patrick Byrne: Adjusted EBITDA growth in the quarter was driven by higher revenue, margin expansion, and good contributions across most regions, in particular Northern Europe and South Africa. On the margin side, we saw the benefit of some of the continued investments we're making coming through to drive growth. As ever, in the Diversified EMEA segment, we'll continue to be attentive to opportunities to drive synergies, opportunities to invest internally, and opportunities through bolt-on acquisitions that will further drive our expansion across the European marketplace.
Speaker Change: On the margin side, we saw the benefit of some of the <unk>.
Speaker Change: Continued investments, we're making coming through to drive growth.
Speaker Change: In the diversified segment will continue to be attentive to opportunities to drive synergies opportunities to invest internally and opportunities through bolt on acquisitions that will further drive our expansion across the European marketplace.
Rory Patrick Byrne: Overall, we're targeting good performance for this segment in 2024 as we continue to leverage our strong market positions, operational integration, and investment opportunities. Our Diversity in America segment delivered an excellent first quarter result driven by positive underlying performance and by the benefit of some seasonal variations pushing more volume into the quarter than in prior years. As noted on our last call, the El Nino weather patterns will have notable impacts on the timing and volumes of products being exported out of South America in the fourth quarter of 2023 and indeed in the first quarter of 2024.
Speaker Change: Overall, we're targeting good performance of this segment in 2020 before us will continue to leverage our strong market positions operational integration.
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Speaker Change: Our diversified America America segment delivered an excellent first quarter results driven by positive underlying performance about the benefit of some seasonal variations pushing more volume into the quarter than in prior years.
Speaker Change: As noted on our last call and then you wanted patterns have notable impacts both the timing and volumes of products being exported out of South America in the fourth quarter of 2023, and indeed in the first quarter of 2024.
Rory Patrick Byrne: This was apparent in particular for our Chilean cherry business, which saw much higher volumes in the first quarter of 2024 than in the prior year. While this was also an important factor in blueberries and grapes, which saw variations in volumes as well as different windows for marketing for different sources.
Speaker Change: This was apparent in particular for our Chilean Jeremy business, which saw a much higher volumes in the first quarter of 2024, one in the prior year. While this was also an important factor in blueberries grapes, which saw variations in volumes is always different windows for marketing different from different sources.
Rory Patrick Byrne: Excluding some of the seasonal timing factors, the quarter was also very positive on an underlying basis, with healthy volume growth and strong prices across most of our North American business, particularly in avocado. On the South American export side, we've benefited from a good Chilean cherry season and continue to make supply chain improvements across all commodities. As we look further into 2024, we are targeting a strong performance from our South American export businesses, as well as healthy dynamics across most of our North American operations.
Speaker Change: <unk> some of the seasonal timing factors for the quarter was also very positive on my mom to nine basis with healthy volume growth and strong pricing across most of our north American business, particularly in avocados.
Speaker Change: Well on the South American export side, we benefited from a good Chennai and Cherry season continued supply chain improvements across all commodities.
Speaker Change: We look further into 2024, we are targeting strong performance from our South American export businesses as well as funky dynamics across most of our North American operations.
Rory Patrick Byrne: The remaining challenge is to accelerate the turnaround in the berry category to maximize performance in this sub-segment for the full year. Moving on to our fresh vegetable division. Operationally, we're very pleased that the performance of our vegetables business improved substantially in the first quarter, due in no small part to the continued dedication of the businesses, management, and employees. The positive operating result was driven by an improved performance in value-added products, as well as higher pricing and volumes in fresh packed products. And with that, I'll hand you over to Jacinta to give the financial review for the first quarter.
Speaker Change: The remaining challenges to accelerate the turnaround in the battery category to maximize performance in this sub segment for the full year.
Speaker Change: Moving onto our crushed Hudson Division operationally, we're very pleased with the performance of a badge vegetables business has improved substantially in the first quarter due in no small parts Didnt T dedication of the businesses management and employees. The positive operational result was driven by an improved performance in value added products as well as higher pricing.
Speaker Change: Volumes in fresh pack products.
Speaker Change: With us on Andrew over 2% just to give you the financial review for the first quarter.
Jacinta F. Devine: Thank you, Rory, and good day, everyone. Firstly, turning to the group results on slide 8, we are pleased to have delivered another strong performance in the first quarter of this financial year. Revenue increased 6.6 percent, or 132 million euros, to 2.1 billion, with growth across all segments. Revenue benefited from a positive foreign currency impact and from acquisitions in EMEA, which offset the reduction in America's revenue following the progressive produce disposal. Stripping these factors out, revenue increased 6.7 percent on a like-for-like basis, and adjusted EBITDA increased approximately 10 million, driven by strong performance in the two diversified fresh produce segments. On a like-for-like basis, the increase was 11 million, or 10.8%.
Rory: Thank you Rory and good day everyone.
Jacinta F. Devine: Net income for the first quarter was £65.4 million, an increase from £20.5 million in Q1 2023. The increase in net income was driven by higher adjusted EBITDA, a 74 million gain on the sale of progressive produce, and lower interest expense as our total debt reduced. Partially offsetting this was a non-cash goodwill write-down within the Americas and Rest of World segment. After accounting for the disposal of progressive produce, we reviewed the remaining goodwill within the segment and booked a non-cash goodwill write-down of $36.7 million.
Speaker Change: Firstly, turning to that group fly group results on slide eight we are pleased to have delivered another strong performance in the first quarter of this financial year.
Speaker Change: And you increased six 6% or 132 million to $2 1 billion with growth across all segments revenue benefited from a positive foreign currency impact and from acquisitions in EMEA, which offset the reduction in Americas revenue following the progressive projects disposal stripping these factors.
Speaker Change: <unk> revenue increased six 7% on a like for like basis.
Speaker Change: Adjusted EBITDA increased approximately $10 million driven by strong performance in the two diversified fresh project segments on a like for like basis. The increase was 11 million or 10, 8%.
Speaker Change: Net income for the first quarter was $65 4 million an increase from $25 million in Q1 'twenty three.
Speaker Change: The increase in net income was driven by higher adjusted EBITDA, a 74 million gain on the sale of progressive projects and lower interest expense as our total debt reduced.
Speaker Change: Partially offsetting this was a non cash goodwill write down within the Americas and rest of World segment. After accounting for the disposal of Progressive projects will review the remaining goodwill within the segment and booked a non cash goodwill write down of $36 7 million.
Jacinta F. Devine: However, we expect this segment to continue to grow at the benefits of a strong asset base and realize. Income tax increased due to higher operating profits, the gain on the sale of progressive produce, and the jurisdictional profit mix. Diluted EPS was $0.74 compared to $0.15 in the prior year.
Speaker Change: However, we expect this segment to continue to grow as the benefits of a strong asset base are realized.
Speaker Change: Income tax increased due to higher operation profits the gain on the sale of progressive projects and the jurisdictional profit mix.
Speaker Change: Diluted EPS was <unk> 74 cents compared to 15 cents in prior year.
Jacinta F. Devine: On an adjusted basis, predominantly excluding the gain on the sale of progressive produce and the goodwill right zone, adjusted net income increased 26% to $40.6 million, and adjusted diluted EPS increased 26% to $0.43. The increase was driven by higher adjusted EBITDA and lower depreciation and interest expense, partially offset by higher tax expense. As Rory mentioned, the fresh vegetables business had a good quarter and delivered operating income of 16.6 million. However, this was offset by a non-cash reduction in a tax asset as a consequence of the termination of the Fresh Express transaction.
On an adjusted basis predominantly excluding the gain on the sale of progressive projects and the goodwill write down adjusted net income increased 26% to $40 6 million and adjusted diluted EPS increased 26% to 43 cents.
Speaker Change: The increase was driven by higher adjusted EBITDA, and lower depreciation and interest expense, partially offset by a higher tax expense.
Speaker Change: You already mentioned the fresh vegetables business had a good quarter and delivered operating income of $16 6 million. This was offset by a noncash reduction in attack sources as a consequence of the termination of the fresh express transaction.
Jacinta F. Devine: Now turning to the divisional updates for our continuing operation, starting with fresh fruit on slide 10. The Fresh Fruit Division delivered a strong, consistent result with revenue increasing 3.2% and adjusted EBITDA up 0.3%. The increase in revenue was primarily due to higher worldwide volumes of bananas and pineapples and an increase in worldwide pineapple prices, partially offsetting this with lower worldwide banana prices. The marginal increase in adjusted EBITDA was driven by higher volumes and lower fruit sourcing costs. Now turning to diversified fresh projects on slide 11.
Speaker Change: Now turning to the divisional updates for our continuing operations, starting with fresh foods on slide 10.
Fresh Foods Division delivered strong consistent results with revenue, increasing three 2% and adjusted EBITDA of <unk>, 3%.
Speaker Change: The increase in revenue was primarily due to higher worldwide volumes of bananas, and pineapples and an increase in worldwide pineapple pricing, partially offsetting this was lower worldwide banana prices.
Speaker Change: The margin increase in adjusted EBITDA was driven by higher volumes and lower fruit sourcing costs.
Speaker Change: Now turning to diversified fresh projects in the <unk> on slide 11.
Jacinta F. Devine: The diversified EMEA segment delivered another strong result in the first quarter. Revenue increased 7% primarily due to a strong performance in Ireland and the UK, as well as a favourable FX movement of approximately 13 million and a 6 million contribution from acquisitions. Excluding these impacts, on a like-for-like basis, revenue increased 4.6%. Adjusted EBITDA increased 10.9%, primarily driven by strong performance in Northern Europe and South Africa, as well as by a positive impact of 0.3 million from foreign currency translation. Like for like, the increase was 10%. Finally, diversified fresh produce from Americas and the rest of the world.
Speaker Change: The diversified EMEA segment delivered another strong result in the fourth quarter revenue increased 7%, primarily due to a strong performance in Ireland and the UK as well as favorable FX movements of approximately $13 million and a 6 million contribution from acquisitions. Excluding these impacts on a like for like basis revenue.
Speaker Change: Creased four 6%.
Speaker Change: Adjusted EBITDA increased 10, 9%, primarily driven by strong performance in Northern Europe, and South Africa, as well as by a positive impact of <unk> 3 million from foreign currency translation.
Speaker Change: Like for like the increase was 10%.
Speaker Change: Finally diversified fresh projects Americas and rest of world.
Jacinta F. Devine: The Diversified Americas segment had a strong quarter, benefiting from seasonal timing differences and also improved pricing and volumes across a range of products. Revenue increased £54 million, driven by higher cherry volumes due to seasonal timing differences, as well as higher pricing and volumes of avocados and most other commodities. Revenue was impacted by the sale of progressive projects during March, and so on a like for like basis, revenue increased to 73 million. The increases in revenue drove a strong adjusted EBITDA result.
Speaker Change: Diversified Americas segment had a strong quarter benefiting from seasonal timing difference and also improved pricing and volumes across a range of products revenue increased $54 million driven by higher volumes due to seasonal timing differences as well as higher pricing and volumes of egg avocado and most other commodities.
Speaker Change: Revenue was impacted by the sale of progressive projects during March and so on a like for like basis revenue increased $73 million.
Jacinta F. Devine: Stripping out the impact of the progressive produce contribution following its disposal, on a lag-for-lag basis, adjusted EBITDA increased over 100% or 8 million. Turning to slide 13 now to discuss our cash generation, capital allocation, and leverage. We remain very focused on capital allocation and managing our leverage and are pleased that our leverage reduced further in the quarter to two times.
Speaker Change: The increases in revenue drove the strong adjusted EBITDA results stripping out the impact of the progressive projects contribution following just disclose that on a like for like basis, adjusted EBITDA increased over 100% or $8 million.
Speaker Change: Turning to slide 13, now to discuss our cash generation capital allocation and leverage we remain very focused on capital allocation and managing our leverage and are pleased that our leverage reduced further in quarter. Two two times. The reduction was driven by the receipt of proceeds from the progressive projects disposal and higher.
Jacinta F. Devine: The reduction was driven by the receipt of proceeds from the Progressive Projects Disposal and Higher Adjusted EBITDA, which balanced out a seasonal first quarter working capital outflow. As discussed in our full year earnings call, we benefited from favourable seasonality at the year end and had an expected working capital outflow in Q1, which was higher than Q1 2023. Also, the quarter close was impacted by higher receivables due to higher revenue and the timing of collections around the Easter period.
Speaker Change: Justice EBITDA, which balanced I was just seasonal first quarter working capital outflow as discussed in our full year earnings call. We benefited from favorable seasonality at year end and have an expected working capital outflow in Q1, which was higher than Q1 2023.
Speaker Change: Also the quarter close was impacted by higher receivables due to higher revenue and the timing of collections around the Easter period.
Speaker Change: This was partially offset by the impact of higher payables.
Jacinta F. Devine: This was partially offset by the impact of higher payables. However, our expectation is that this will reverse over the course of the year following the typical working capital cycle seen in our business. Cash capital expenditure from continuing operations was $18.2 million in the first quarter, and we added a further $7 million of assets by way of finance lease. For the full year, we continue to expect total capital expenditure in the range of 110 to 120 million.
Speaker Change: Our expectation is that this will reverse over the course of the year. Following the typical working capital cycle seen in our business.
Speaker Change: Cash capital expenditure from continuing operations was $18 2 million in the first quarter and we added a further 7 million of assets by way of finance lease.
Speaker Change: For the full year, we continue to expect total capital expenditure in the range of $110 million to $120 million.
Jacinta F. Devine: Interest expense decreased due to lower debt levels compared to the prior year. Post quarter end, we were paid 100 million of our term loans using the proceeds from the progressive produce sale. For the full year, we now expect our interest expense, including discontinued operations, to be between $75 and $80 million. Continuing with our commitment to return cash to shareholders, we are pleased to declare a dividend of 8 cents for the fourth quarter, which will be paid on July 5th, 2024 to shareholders on record on June 12th, 2024. Now I will hand you back to Rory, who will give an update on our full year outlook.
Interest expense decreased due to lower debt levels compared to the prior year post quarter end, we repaid $100 million of our term loan using the proceeds from the Progressive project Sad for.
Speaker Change: For the full year, we now expect our interest expense, including discontinued operation to be 75 to 80 million.
Speaker Change: With our commitment to return cash to shareholders. We are pleased to declare a dividend of eight <unk> for the fourth quarter.
Speaker Change: Which will be paid on July 24 to shareholders on record on June 12 to 24.
Speaker Change: Now I will hand, you back to Larry who will give an update on our full year outlook.
Speaker Change: Thank you Sir.
Rory Patrick Byrne: Well, as I said, we're very pleased with the strong start we've made to 2024 and believe that this puts us in a good position to deliver a strong overall result for the year. While it's still early in the year and forecasting remains complex, we are maintaining our target to deliver a full year adjusted EBITDA in line with 2023 on a like-for-like basis. In dollar terms, adjusting for the progressive project disposal, this implies an adjusted EBITDA target of at least $360 million for the full year.
Larry: Well as I said, we're very pleased with the strong start with maybe trying to shrink before we believe this puts us in good position to deliver strong <unk> results for the year.
Speaker Change: While it's still early in the year forecasting remains complex, we are maintaining our target to deliver full year adjusted EBITDA in line with 2023 on a like for like basis.
Speaker Change: <unk> terms adjusting for the progressive call just disposal. This implies an adjusted EBITDA target to at least $360 million from full year.
Rory Patrick Byrne: In conclusion, we're very pleased with the excellent start we've had to 2024 and are now keenly focused on continuing that momentum in the second quarter, while also advancing on our strategic priorities in the year ahead. I want to finish by once again thanking all our excellent people across the group for their ongoing commitment and dedication to drive Dole Dole PLC forward, as well as our suppliers and customers for all their ongoing support. So with that, I'll hand you back to the operator, and we'll open the line for questions.
Speaker Change: In conclusion, we're very pleased with the excellent start with <unk> 2024.
Speaker Change: Can be focused on continuing that momentum in the second quarter, while also advancing on our strategic priorities for the year ahead.
Speaker Change: I want to finish by once again thanking all of our excellent people across the group for their ongoing commitment dedication to drive total plc board as well as our suppliers customers for all their ongoing support so with that I'll hand, you back to the operator, and we'll open the line for questions.
Operator: Thank you. We will now begin the question-and-answer session. If you have dialed in and would like to ask a question, please press Star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press Star 1 again. If you are called upon to ask a question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Again, press star 1 to join the queue. And your first question comes from the line of Adam Samuelson with Goldman Sachs. Please go ahead.
Speaker Change: Thank you we will now begin the question and answer session. If you have dialed in and who would like to ask a question. Please press star one on your telephone keypad to raise your hand and joined the team.
Speaker Change: He would like to withdraw your question simply press Star. One again, if you are called upon to ask a question are lessening via loud speaker on your device. Please pickup your handset and ensure that your phone is not on mute when asking your question again press star one to join the team and your first question comes from the line of Adam.
Speaker Change: Samuelsson with Goldman Sachs. Please go ahead.
Adam Samuelson: Yes, thank you. Good morning, everyone.
Yes. Thank you good morning, everyone.
Speaker Change: Good morning.
Unknown Executive: [inaudible] Morning, I guess I wanted to just clarify the guidance and the way to properly calibrate the progressive produce, contribution, both in the prior year and what that implies for the forward. So you're saying, even though this year to 360 million, which is flat on a like for like basis, you reported adjusted EBITDA in 2023 of $385 million. So should we be interpreting that Progressive Produce was $25 million of EBITDA contribution in the final three quarters? nine and a half months of 2023, which implies that it was pretty dramatic. [inaudible]
Speaker Change: Good morning, I guess I wanted to just clarify the guidance.
Speaker Change: The way to properly calibrate the progressive produce.
Speaker Change: Contribution both in the prior year and what that implies for the forward. So you are saying EBITDA. This year of $360 million, which is flat on a like for like basis.
Speaker Change: <unk> adjusted EBITDA in 2023 of $385 million. So should we be interpreting that the progressive produce was $25 million of EBITDA contribution and the final III.
Speaker Change: Three quarters are.
Speaker Change: Got it and a half months of 2023.
Speaker Change: Great.
Speaker Change: Implies that was a pretty dramatic.
Speaker Change: <unk> of the overall <unk>.
Speaker Change: <unk> America is rest of world segment, and kind of maybe some more context on the historical EBITDA performance on that on that business relative to the rest of the diversified America's rest of world, maybe just to start thanks.
Unknown Executive: Okay, yeah. Last year, our reported number for progressive projects was 23.5 million. So we subtracted that from the 385. And that gets you down to the 360 guidance, which is 361.5 or something like that when you do the math, but the guidelines are set at 360.
Speaker Change: Okay, Yes, I mean last year, our reported number for progressive projects was 23 and half minutes. So we subtracted bottle. The 385 and that gets you down to the $3 60 guidance switching business 361, or something like that when you do the math, but the so the guidance of seven 360.
Speaker Change: So yeah I'm in the diversified we had called out some under performance in all of our elements of observation in the prior years, we have actually had a strong.
Unknown Executive: So yeah, I mean, the diversified we had called out some underperformance and other elements of that division in the prior years, we have actually had a strong first quarter in most aspects of that business. So the turnaround work that's been undertaken over the last year or so is in good shape. And we're confident that we'll have a good performance in the remaining piece of that business over the course of 2024.
Speaker Change: First quarter in most aspects of the business in the first quarter. So the turnaround work that's been undertaken over the last year or so isn't good shape on we're confident that the level a good performance in the remaining piece of that business over the course of 2024.
Unknown Executive: Okay, and so in the first quarter, adjusted debits out for the company were up 10 million year over year. Again, there's probably, you still have progressive produce for most of the quarter.
Speaker Change: Okay.
Speaker Change: And so in the first quarter adjusted EBITDA for the company.
Speaker Change: <unk> was up $10 million year over year.
Speaker Change:
Speaker Change: Again, you still have progressive produce for most of the quarter.
Unknown Executive: The prior year number has it in there, so, but you're saying it's flat year over year for the full year, so. Implications, I just want to make sure that you're implying EBITDA declines on a like for like basis for the balance of the year. And I know you called out some of the shipping and dry dock costs. In particular, Rory, maybe quantify those and just help us think about how we go from the growth expected realized in the first quarter to the declines implied for the balance.
Speaker Change: Prior year number hasnt been there, so, but you're saying flat year over year for the full year. So application I'm just wondering shortly.
Speaker Change: You're implying EBITDA declines on a like for like basis.
Speaker Change: The balance of the year and I know you've called out some of the shipping drydock costs in <unk>.
Speaker Change: Particular, Rory maybe quantify those and just help us think about how do we go from the growth anticipated realized in the first quarter the decline implied for the balance of the year.
Rory Patrick Byrne: Yeah, I mean, the whole question of guidance, as you know, Adam, is definitely not an exact science. You know, you know, we're trying to come up with a number that we think is a sensible number. You know, with the history now of given guidance, we try to be, I think, reasonably conservative in how we do that. There are a couple of big factors out there. You look at our peer group reporting in this quarter. You know, I've reported significantly challenged numbers in Q1, if you look at Casablanca and Orserra, for example, two companies that we're often compared to. So I suppose that tells you two things.
Speaker Change: Yeah, I mean, the whole question of guidance as you know the most very definitely not an exact science.
Speaker Change: We're trying to come up with a number that we think is a sensible number the history now of giving guidance, we try to be I think reasonably conservative in how we do that.
Speaker Change: He was a couple of big factors out there you look at our peer group reporting in this quarter.
Speaker Change: Reported <unk>.
Speaker Change: Significantly challenged numbers in Q1, if you look at Castle Mountain or Sarah for example, working companies that we're often compared to so I suppose what constitute things one let me give you a little bit cautious how you look at the full year based on their assessment of all similar factors unless it was two it gives us some comfort stop the business model.
Rory Patrick Byrne: One, you need to be a little bit cautious how you look at the full year based on their assessment of similar factors. And, two, it gives us some comfort that the business model that we got with our scale and our size and our diversification of earnings gives us a significant advantage over both of those companies. We look back at 2023, you know; we started out the year with a guidance of 350.
Speaker Change: What we've got with our scale and our size up more diversification of earnings and it gives us a significant advantage over both of those companies.
Speaker Change: We look back at 2023.
Speaker Change: We started out the year with the guidance of $3 50 a M.
Rory Patrick Byrne: We upped that during the year, and we ended up exceeding that, coming in with 385. So we have clearly stated that we overperformed in 2023. Some of the issues that we flagged in 23, for example, we took a strong advantage of the backhaul freight market, which gave us a significant contribution. And we have some flags that, you know, were right for us to take advantage of that when the market was high, but it's not something that is sustainable.
Speaker Change: During the year and we ended up exceeding that are coming in with 385. So.
Speaker Change: We have clearly stated that we over performed in 2023.
Speaker Change: Some of the issues that we flagged in 2003 for example.
Speaker Change: A strong advantage of the the.
Speaker Change: But I'll call. It great market for example that gave US a significant contribution and we had slight book was right for us to take advantage of both within the market was high but it's not something that is sustainable and we called that out. So there's a few factors that you flagged the the question around the dry docking of some ships.
Rory Patrick Byrne: And we call that out. So there are a few factors that I've actually flagged the question around the dry docking of some of the ships and the replacement capacity we've got and the cost of doing that will have an impact on our numbers. So, you know, the main message here really is that it's not an exact science. We've set the line in the sand as best we can, and as ever, we focus on beating the target over the remainder of the year.
Speaker Change: The replacement.
Speaker Change: We've got on the cost of doing that will have an impact on our numbers. So.
Speaker Change: The main message here really is not an exact science.
Speaker Change: We've set the line in the sand as best we can.
Speaker Change: Zebra will focus on the target over the remainder of the year.
Unknown Executive: Okay, and if I could just squeeze one final one in with the proceeds from progressive produce on an adjusted basis or pro forma basis, trailing net leverage is two point one times. You've used the proceeds for deleveraging. And gross debt reduction at this juncture. But how do we think about capital kinds of allocation prospectively, given the kind of where your stock is? I would think the risk-adjusted returns look better on share repurchase than potential default on M&A. And now we still have the fresh vegetable sale to finalize. But help us think about how you would think about the prospective use of cash from here, given where the stock is.
Speaker Change: Okay, and if I could just squeeze one final one in.
Speaker Change: With.
Speaker Change: With the proceeds from progressive produce on an adjusted basis, our pro forma basis trailing net leverage is two point.
Speaker Change: One times.
Speaker Change: You've used the proceeds for deleveraging.
Speaker Change: Gross debt reduction at this juncture, but how do we think about progress.
Speaker Change: Capital allocation prospectively.
Speaker Change: Given kind of where your stock is.
Speaker Change: Would would think the risk adjusted returns look better on share repurchase then essentially bolt on M&A I know, we still have the fresh vegetable sale to to finalize.
Speaker Change: But help us think about how you would think about prospective use of cash from here.
Speaker Change: Given where the stock is thank you.
Unknown Executive: Yeah, I mean, obviously, the stock rating is somewhat disappointing. You know, if we applied the multiple, the gross value, the progressive deal to our overall Dole business, we'd have something like a $21 share price. So that's obviously frustrating and emphasizes your point.
Speaker Change: Yeah.
Speaker Change: So the stock raising this somewhat disappointing we applied the multiple the gross value of the progressive deal too.
Speaker Change: To our overall global business would have something like a $21 share price. So that's obviously frustration and emphasize your point.
Unknown Executive: But, you know, all capital allocation questions are continually being examined, whether that's buybacks, dividends, acquisitions. It's quite clear that in the short term, certainly with the current rating, we've got that some of the significant acquisitions are, it's going to be hard to buy them at our current rating. And so we have to focus on acquisitions that will enhance some of the parts in some way. We have got this big strategic question about what the final outcome will be with regard to the vegetable division.
Speaker Change: <unk>.
Speaker Change: All capital allocation questions are continually being examined some of that.
Speaker Change: <unk> dividends acquisitions like.
Speaker Change: Quite clear that in the short term certainly with the current duration, we've got that's familiar any significant acquisitions.
Or what's going to be hard to buy them at our constellation and so we have to focus on acquisitions that will enhance the sum of the parts and suddenly.
Speaker Change: We have got this big strategic question about what the final outcome will be with regard to the vegetable division.
Speaker Change: <unk> is a big factor in determining where we allocate our capital that can be a material element of our absolute debt number for example, so.
Unknown Executive: And that obviously is a big factor in determining where we allocate our capital; it can be a material element of our absolute debt number, for example. So all of those questions go into the ongoing analysis of where we might allocate our capital. And, you know, we've got a very open mind as to how we do that in the best interests, in the best long-term interests of all of our shareholders.
Speaker Change: All of those questions go into the ongoing analysis of where we might allocate our capital and <unk> got a very open mind as to how we do that the best interest in the best long term interests of all of our shareholders.
Unknown Executive: Okay, I appreciate that color. I'll pass it on. Your next question comes from
Speaker Change: Okay.
Speaker Change: Appreciate that that color I'll pass it on thank you.
Operator: Your next question comes from the line of Christopher Barnes with Deutsche Bank; please go ahead.
Speaker Change: Your next question comes from the line of Christopher bars with Deutsche Bank. Please go ahead.
Operator: I wonder if Chris is on mute.
Speaker Change: I Wonder Chris on mute.
Operator: The next question comes from the line of Christopher Barnes with Deutsche Bank.
Speaker Change: Next question comes from the line of Christopher Byers with Deutsche Bank.
Operator: Hey, can you guys hear me now? We can hear you now.
Hey can you guys hear me now.
Speaker Change: We can hear you now yes.
Christopher Jayaseelan Barnes: Okay. Thanks.
Just wanted to follow up around the EBITDA discussion.
Christopher Jayaseelan Barnes: Yeah. Okay, thanks. I just wanted to follow up on the EBITDA discussion. With progressive produce coming out, and Rory mentioned about $23.5 million of EBITDA last year, I just wanted to ask about opportunities to recover some of that divested profit. In the past, you've spoken to potential savings from rice sizing overheads and head office allocations, but any additional perspective would be helpful just as we think about the continuing business going forward and opportunities to claw back some of that profit.
Christopher Jayaseelan Barnes: With with progressive protein coming out and you already mentioned about $23 $5 million of EBITDA last year I just wanted to ask around opportunities to recover some of that divested profit in the past you've spoken to potential savings from right sizing overhead and head office allocation, but.
Christopher Jayaseelan Barnes: Any additional perspective would be helpful. Just as we think about.
Christopher Jayaseelan Barnes: The continuing business going forward and opportunities to claw back some of that profitability.
Unknown Executive: Yeah, I think that the biggest area that we would hope to call it back is that in the remaining components of that division, we're really focused on getting the profitability levels at the right level. And I think, you know, depending on where we end up in the veg division, that can dictate where we go in terms of our overall head office costs and other cost structures a little bit difficult, difficult to scale them down just with the disposal of progressive produce.
Speaker Change: Yeah, I think that I think is the biggest area that we would hope to pull it back is that in the remaining components of that division, we're really focused on getting the profitability level itself the right level.
Speaker Change: I think depending on where we end up the diverge division, but can dictate where we go to in terms of our overall head office costs and other all that cost structure is a little bit different difficult to scale. It just with the disposal of progressive produce but it may be a little different than we could.
Unknown Executive: But it may be a little different if we can find the right appropriate answer for the veg business. But our cost structure is a constant area that's under examination, whether it's at the operational level in the business or at the central cost level in the business.
Speaker Change: On the right appropriate entrepreneur.
Speaker Change: Because our cost structure.
Speaker Change: It is a constant.
Speaker Change: The area that's under examination, whether it's at the operation level in the business are at the central cost level of the business.
Unknown Executive: And I think, you know, critically over the last number of years with the, you know, post IPO integration of the North American and South American management teams under one management grouping and really focusing on maximizing the profitability of that business. And I think, as well, it's a business that suffered badly post-pandemic with the supply chain issues. You know, we highlighted those in previous years, supply chain disruption. So a lot of those issues have really settled down, and it's giving that business a much better platform to manage their profitability problems. So that'll be the big focus over the course of 2024.
Speaker Change: Basically over the last number of years with the you know.
Unknown Executive: Got it. That's helpful.
Speaker Change: Post IPO the integration of the North American and South American management team under one management grouping them really focusing on maximizing the profitability of that business.
Speaker Change: I think just wanted to business suffered badly post pandemic with the supply chain issues, we highlighted those in prior years supply chain disruption. So a lot of those issues.
Speaker Change: Second down that's keeping that business a much better platform.
Speaker Change: To launch.
Speaker Change: The profitability problem, so that would be the big focus over the course of 2024.
Unknown Executive: And then I guess just switching gears on the fresh fruit business. We had very nice results this quarter. Could you just elaborate on what's driving the better top line and profitability? Last quarter, you highlighted increased competition in North America, weighing on pricing, which seems to have happened. But it looks like you also got better volume globally and lower sourcing costs to help offset the lower pricing. So, I guess, could you just help us frame, like, what are the supply and demand conditions like at this point in the year? And then, like, looking forward, do you expect this relative outperformance or relative strength to continue? And I'll pass it on. Thanks.
Speaker Change: Got it that's helpful. And then I guess, just switching gears on the fresh fruit business very nice results this quarter.
Speaker Change: Could you just elaborate on whats driving the better top line and profitability.
Speaker Change: Last quarter, you highlighted increased competition in North America weighing on pricing, which seems to track you have transpired, but it looks like you also.
Speaker Change: Got better volume globally, and lower sourcing costs helped offset the lower pricing so.
Speaker Change: I guess could you just help us.
Speaker Change: Frame like what what does supply and demand conditions look like at this point in the year and then like looking forward do you expect that the relative outperformance of relative strength to continue and then I'll pass it on thanks.
Unknown Executive: Maybe, Johan, you might cover that one, please. Yep.
Speaker Change: Maybe when you might cover that one please.
Johan Linden: Yeah, Christopher, there are, as always, when it comes to our business, a lot of moving parts. But overall, when we look at our fresh fruit segment, and in particular bananas, but also pineapples, we see demand is solid. So there is a, consumers out there want our products. People are looking for cheaper alternatives. And, of course, bananas are one of them.
Christopher Jayaseelan Barnes: Yeah, So Christopher so yeah.
Speaker Change: There are as always when it comes to our business a lot of moving parts, but overall when we look at our fresh foods segment and in particular bananas, but also pineapples, we see a demand as being solid subsidiaries.
Speaker Change: The consumers out there want our products people are looking for cheaper alternatives and of course, none of US is one of them. So the demand is solid at the same time, we see retailers putting pressure on margins to really going after trying to fight inflation and children get self in the good books of the politician.
Johan Linden: So the demand is solid. At the same time, we see retailers putting pressure on margins, they're really going after trying to fight inflation and show themselves in the good books of the politicians. There's a lot of pressure on margins, but at the same time, supply is tight. The supply is tight on the back of, if you remember, we have talked about poor farm maintenance as a consequence of high input costs in Ecuador.
Speaker Change: So it's a lot of pressure on margins, but at the same time supply is tight.
Speaker Change: The supply is tight on the backhaul. If you remember we have talked about poor farm maintains as a consequence of high input cost in Ecuador, We see also in Costa Rica that the Golan has is very expensive. So some of the farmers are having not the right maintenance. So the supply is coming down. So you have a good day.
Johan Linden: We see also in Costa Rica that the colon is very expensive, so some of the farmers are not doing the right maintenance, so the supply is coming down. So you have good demand, retail is putting pressure on, and you have supplies being tight. At the same time, you have some cost giving on the input cost when it comes, for example, as paper. So if you put everything together, we feel that with the supply diversification we have, the geographic diversification that we have, and the customer diversification, we feel that we are able to handle this very volatile situation very well.
Speaker Change: Mind retailers, putting pressure you have supplies being tied at the same time you have some cost giving on the input cost when it comes to for example is paper. So if you put everything together, we feel that with the supply diversification. We have the geographic diversification that we have and the customer diversification, we feel that we are.
Speaker Change: To handle this very volatile situation very well. So we are looking at more or less similar as last year.
Johan Linden: So we are looking at a, more or less, similar to last year. But, of course, then a little bit of a drawback and a downside when it comes to our commercial cargo, the shipping business that we have.
Speaker Change: But of course, then a little bit of it a drawback in the downside when it comes out with commercial cargo disappearing business that we have.
Speaker Change: Okay.
Johan Linden: Got it. Thanks. That's a helpful perspective. I'll pass it on.
Speaker Change: Got it. Thanks, that's helpful perspective, I'll pass it on.
Operator: Your next question comes from the line of Gary Martin with Davey. Please go ahead.
Speaker Change: Your next question comes from the line of Gary Martin with Davy. Please go ahead.
Gary Martin: Hi Rory, Jacinta, and Johan, just for a soft congratulations on a very strong quarter. Just a few questions on my side, starting off with Diversified EMEA. I mean, I think just in terms of prepared remarks, you mentioned a bit of recovery with regard to volume growth in the quarter. Could we get a bit more detail on where you're seeing that and whether these green shoots are expected to continue into the back half of the year?
Hi, you've already sent in your hunt for soft congrats on a very strong quarter. Just a few questions on my side is just starting off with diversified EMEA.
Speaker Change: I mean, I think just in terms of the prepared remarks, you had mentioned a bit of a country with regards to volume growth in the quarter. I mean, we got a bit more detail on where youre seeing and whether these green shoots are expected to continue into the back half of the year.
Gary Martin: And then secondly, just on Diversified Americas, can you just give us a bit of details with regard to what you're seeing with regard to the kind of berry market in North America, just because I know it's been on the weaker side and also, just kind of congruently, with regard to how much the kind of seasonal cherry inflow, how much of that is expected to kind of continue into the rest of the year? Is this quarter's exceptional result, or is it more kind of a one off and timing related? Thanks.
Speaker Change: And then secondly, just on diversified Americas I can just give us a bit of details with regards to what youre seeing.
Speaker Change: <unk> Barry market in North America, just because I know, it's been on the weaker side and also just kind of concurrently.
Speaker Change: Just with regards to how much.
Speaker Change: Seasonal cherry inflow, a how much of that is expected to kind of continue into.
Speaker Change: The rest of the year is this quarter's exceptional result is it more kind of one off and timing related.
Speaker Change: Thanks.
Rory Patrick Byrne: I'll take those. I mean, on the diversified MAO one, I think it's fair to say that across all of our geographies within that division, we've had very solid performance. Scandinavia, you know, we're doing a lot of, you know, bolt-on additions to some of our operating businesses and that they had a particularly good performance. South Africa, which falls within that division as well, performed very well.
Speaker Change: Yeah.
Speaker Change: I'll take those.
Speaker Change: Diversified EMEA I think really it's fair to say that across all of our geographies within that division, we have very solid performance Scandinavia, we're doing a lot of.
Speaker Change: Bolt on additions to some of our operating businesses and that they had a particularly good performance South Africa, which falls within that division as well.
Rory Patrick Byrne: So, I think, you know, that's been a business that, over a long period of time, over a long period of years, has had, you know, a few ups and downs within individual segments within it. But overall, it's performed and continued to grow very successfully over a long period of time now. Americas, I think, you know, there's a bit more work to be done on that whole Bury segment. You know, in our particular involvement in that, we're doing a lot of work to fix that, but there's more to be done to get that right. And that is a big project for 2024.
Speaker Change: <unk> performed very well, so I think well you know.
Speaker Change: That's been a business that's over a long period of time long period of years as well.
Speaker Change: A few ups and downs within individual segments within it but overall it's performed it continues to grow very successfully over a long period of time now.
Speaker Change: Americas I.
Speaker Change: I think there's a bit more work to be done, but the whole battery segment.
Speaker Change: In particular.
Speaker Change: [noise] until March.
Speaker Change: We're getting a lot of work to takes up but there is more to be done to get that right and whether that is a big project for 2024.
Rory Patrick Byrne: I think in terms of the cherry season, it probably is. We probably did have an exceptionally strong Q1, without a doubt. Some of the volume that may have historically fallen into Q4 of 23 came into Q1. So, that highlight, it just does give us a slightly better Q1 performance, even though the season for cherries overlaps 23 and Q1 24, you know, a satisfactory season in line with the prior year. So, it's just timing on that.
Speaker Change: In terms of the Cherry season, and it probably is we probably did have an exceptionally strong Q1.
Speaker Change: Without a doubt some of the volume, but may have historically called in Q4 of 'twenty three came into Q1.
Speaker Change: So that high that it just it does give us a slightly better.
Speaker Change: Q1 performance, even though the season per Charlie's overlapping 23 in Q1 24.
Speaker Change: Satisfactory and in line with the prior year. So it's just timing on that we flagged I don't think at the end of the year as well.
Rory Patrick Byrne: We flagged that, I think, at the end of the year as well. So, you will see it is definitely a slightly better than normal Q1, and that will balance out over the course of the year. But again, we're comfortable within the other elements of that business that we're going to have a satisfactory outcome and diversify the Americas for the coming year.
Speaker Change: So you will see that there is definitely there.
Speaker Change: Slightly better than normal Q1 that will balance out over the course of the year, but again, we're comfortable with them the other element of that.
Speaker Change: And stuff, we're going to have a satisfactory outcome and diversify the Michaels for this upcoming year.
Rory Patrick Byrne: Thanks Rory, a good caller; I'll pass it on.
Speaker Change: That's very good color I'll pass it on.
Operator: Your next question comes from the line of Benjamin Bienvenu with Stephens. Please go ahead.
Speaker Change: Your next question comes from the line of Ben Bienvenu with Stephens. Please go ahead.
Benjamin Shelton Bienvenu: Hey, thanks. Good morning, everyone.
Benjamin Shelton Bienvenu: Hey, Thanks, good morning, everyone.
Unknown Executive: So firstly, just a quick question on the balance sheet with the sale of progressive produce and the subsequent pay down of debt in April. Are you satisfied with the debt position of the balance sheet today? And should we think about kind of removing that as a bucket of capital allocation in terms of any excess cash flow that you have is less likely to go to debt reduction and more likely to go to either organic growth or inorganic growth investments? Or, you know, perhaps Sherry Parks.
Benjamin Shelton Bienvenu: So firstly just a quick question on the balance sheet.
Benjamin Shelton Bienvenu: With the sale of progressive produce and the subsequent pay down of debt in April.
Benjamin Shelton Bienvenu: Are you satisfied with the debt positioning of the balance sheet today and should we think about kind of removing that.
Hey.
Speaker Change: As a bucket of capital allocation in terms of any excess cash flow that you have is less likely to go to debt reduction and more likely to go through either organic growth or any or in our organic growth investments.
Benjamin Shelton Bienvenu: Or.
Speaker Change: Perhaps share repurchase.
Unknown Executive: Yeah, I mean, obviously, we're comfortable at two times leverage. And, you know, as I said, we put all of the factors into the mix, not least the eventual outcome in relation to the vegetable divisions, which has a significant potential impact on our financing capacity. And, you know, we assess it as we go along, based on how all of those dynamic factors evolve.
Speaker Change: Yes, I mean, obviously, we're comfortable at two times each of them.
Speaker Change: We put all of that factors into the mix not least the essential line come in relation to the mesh litigation, which has a significant potential.
Speaker Change: Impacts on our financing capacity.
Speaker Change: We assess it as we go along based on how all of those dynamics factors evolve.
Speaker Change: Okay.
Unknown Executive: Okay. Thank you. Thank you.
Unknown Executive: Thinking about the overall margin profile of the business, you know, it seems that we're past the worst of inflationary cost pressures that we've seen over the last several years impacting you and others in the industry, and really all industries. When you think about your price and volume balance versus the kind of embedded cost variability you have in your business, are we on a path to continued EBITDA margin expansion in 2024, and do you think that can sustain into 2025? Just any thoughts on the potential of the margin profile of the business as you see it today?
Speaker Change: Thinking about the overall margin profile of the business it.
Speaker Change: It seems that we're past the worst of inflationary cost pressures that we've seen over the last several of years impacting you and others in the industry.
Speaker Change: And really all industries, when you think about your price and volume balance versus kind of the embedded.
Speaker Change: Cost variability you have in your business.
Speaker Change: Are we on a path to continued EBITDA margin expansion in 2024, and do you think that can sustain into 2025, just any thoughts on the potential of the margin profile of the business as you see it today.
Unknown Executive: Yeah, I mean, if you look back at inflation, while certainly managing inflationary times is much more complex and stable times, particularly having a big impact on our business, is probably a little bit of an exaggeration. I think we've done remarkably well over the long period of inflation in the last few years.
Speaker Change: Yeah, I mean, if you look back at inflation, while selling.
Speaker Change: Selling managing an inflationary times is much more complex and more stable times.
Speaker Change: Hum.
Speaker Change: A big impact on our business is probably a little bit of an exaggeration I think we've done remarkably well over the long period of inflation in the last few years and we've managed whether it's through our dynamic pricing model to the rest of our divisions are.
Unknown Executive: And we've managed, whether it's through our dynamic pricing models and our two diversified divisions are, you know, getting the appropriate price adjustments in our fresh business to adjust for inflation and adjust to viable inflationary impacts on our cost chain items. So I think we've managed well in that segment; we've held our margins pretty constant over that period of time. And, you know, our objective is always to try and improve on the edges within different sub segments.
Speaker Change: Getting the appropriate price adjustments in our fresh foods business.
Speaker Change: Business to adjust for that the inflationary and justifiable.
Speaker Change: Inflationary impacts on our cost Shanghai, So I think we've managed well through the <unk>.
Segment, we've held our margins pretty constant over that time and our objective. Our objective is always to try and improve on the guide just within different sub segments diversified Americas is one example, where you know we have some some supply chain issues that have a negative impact on our overall margin. So we would like to see.
Unknown Executive: And, you know, Diversified Americas is one example where we had some supply chain issues that had a negative impact on our margins. So we would like to see margin improvement, particularly in that division, and that is starting to come through now.
Speaker Change: Margin improvement, particularly in opposition of about it starting to come through now.
Unknown Executive: Okay, thanks so much for taking my question. Thank you, Ben.
Speaker Change: Okay. Thanks, so much for taking my questions.
Benjamin Shelton Bienvenu: Thank you Ben.
Operator: Your next question comes from the line of Christian Junquera with Bank of America. Please go ahead.
Speaker Change: Your next question comes from the line of Christian Junqueira with Bank of America. Please go ahead.
Benjamin Shelton Bienvenu: Okay.
Unknown Executive: Hey, everyone. You have Christian on for Brian. Thanks for taking our question. We understand that you don't disclose your revenue change and shipments and price mix on a consolidated basis, but can you give us some color on how shipments performed relative to price mix this quarter and your expectations for this fiscal year? Thank you.
Christian Junqueira: Hey, everyone you have Christian on for Brian Thanks for taking our question.
Christian Junqueira: We understand that you don't disclose year over year change in shipments and price mix on a consolidated basis, but can you give us some color on how shipments performed relative to price mix this quarter and your expectations for this.
Christian Junqueira: This fiscal year. Thank you.
Christian Junqueira: Okay.
Unknown Executive: Yeah, I mean, we've, we've, we believe in our fresh food division, we've done well in terms of volumes. Price has been under a little bit of pressure for a range of reasons, and we've compensated for that through, you know, good customer progress and volumes. And then maybe going back to Ben's question earlier, in terms of the price-volume equation, there have been some challenges where people, you know, the economies of individual families are affected by inflation and, you know, lots of basic items are going up in price, and demand is maybe a little bit subdued.
Christian Junqueira: Yes.
Speaker Change: We believe that our fresh food division, we've done well in terms of volumes and prices being umbro. This put a pressure for a range of reasons we've done.
Speaker Change: Compensation about through good customer progress on volumes.
Speaker Change: Maybe going back to Ben's question are we going in terms of the price volume equation.
Speaker Change: And there have been some challenges what people seem to be.
Speaker Change: The economies of individual families are affected by inflation.
Speaker Change: Lots of basic items going up in price Hum demand, maybe a little bit subdued. So we're hoping as current levels stabilize become more normalized you know over time that can help go to bundle. Some we're seeing some green shoots on that front in terms of volume.
Unknown Executive: So we're hoping as, you know, the current levels stabilize and become more normalized, that, you know, over time, that can help go to volumes. And we're seeing some green shoots in that front in terms of, you know, volume gains, both in Europe and North America. Very helpful. Thank you.
Speaker Change: Volume gains both in Europe, and North America.
Speaker Change: Very helpful. Thank you.
Speaker Change: Two questions.
Speaker Change: Yeah.
Rory Patrick Byrne: And there are no more questions. I will now turn the conference back over to Rory Byrne for closing remarks.
Speaker Change: There are no more questions I will now turn the conference back over to Rory barns for closing remarks.
Rory Patrick Byrne: Thank you.
Rory Patrick Byrne: Well, as I said, I think we're very pleased with how the year has started, a very good, strong start to 2024, following on from what I believe was a very, very strong 2023. So we've now demonstrated a very good, strong sequence of quarterly performance, done a lot of work on our capital structure, and got the right balance between debt and equity. And I think with all of those measures, there is lots of work still to be done.
Rory Patrick Byrne: Well like I said I think we're very pleased with how the year started.
Rory Patrick Byrne: Strong start to 2024 and following on from what I believe is very very strong kind of 'twenty three.
Rory Patrick Byrne: <unk> demonstrated a very good strong sequence of quarterly performance doesn't want to work on our capital structure and getting the right balance between debt and equity equity and I think with all of those measures you have lots of work still to be done. We believe we're very well positioned to continue to grow and I look forward to the future with confidence. So huge. Thank you to all are very committed.
Rory Patrick Byrne: We believe we're very well positioned to continue to grow and look forward to the future with confidence. So a huge thank you to all our very committed people for helping achieve that. And thank you to all of you for joining us today. Thank you very much. Ladies and gentlemen, that concludes today's call. Thank you all for joining us.
Rory Patrick Byrne: Tito for helping achieve that.
Rory Patrick Byrne: Thank you to all of you for joining US Tonight. Thank you very much.
Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining us. You may now disconnect.
Speaker Change: Ladies and gentlemen that concludes today's call. Thank you all for joining you may now disconnect.
Speaker Change: [music].