Q2 2024 Dole PLC Earnings Call

Speaker Change: Welcome to the DoLE PLC Second 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.

Reporter: Reporter, 2024 Earnings Conference Call-In 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.

Speaker Change: 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 Head of Investor Relations James Regan. James please go ahead.

Unknown Executive: 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 Head of Investor Relations, James Regan. James, please go ahead.

James Regan: Thank you, Krista. Welcome, everybody. And thank you for taking the time to join our second quarter 2024 earnings conference call and webcast. Joining me on the call today are our Chief Executive Officer Rory Byrne, our Chief Operating Officer Johan Linden, and our Chief Financial Officer Jacinta Devine. During this call, we'll be referring to presentation slides for supplemental remarks, and these, along with our earnings release and other related materials, are available on the investor relations section of the Dole GLC website.

James Regan: Thank you, Krista. Welcome, everybody, and thank you for taking the time to join our second quarter of 2024 Earnings Conference column webcast.

Speaker Change: Joining me on the call today is our Chief Executive Officer, Rory Byrne, our Chief Operating Officer, Joanne Linden, and our Chief Financial Officer, Jacinta Devine.

Speaker Change: During this call, we'll be referring to presentation slides to supplementary remarks, and these, along with our earnings release and other related materials, are available on the Investor Relations section of the GLC website.

James Regan: Please note, our remarks today will include certain forward-looking statements within the provisions of the Federal Security and 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 statement. 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-GAF financial measures may be found in our press release, which also includes a reconciliation to the most comparable. With that, I'm pleased to turn today's call over to you. Thank you, James, and welcome, everybody.

Speaker Change: Please note, our remarks today will include certain forward-looking statements within the provisions of the Federal Security and 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.

Speaker Change: 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.

Speaker Change: Information regarding the use of non-GAAP financial measures may be 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 to Rory.

Rory Byrne: So thank you all for joining us today as we discuss our results for the second quarter of 2024. So, turning firstly to slide four and the financial highlights for Q2. Well, the second quarter of 2024 was another strong quarter for our business, continuing our positive momentum. Group reported revenue was in line with last year, and on a like for like basis, when the impact of the progressive produce disposal is excluded, revenue increased by 4.3%. Adjusted EBITDA increased by 2.2% to $125.4 million, and on a like-for-like basis, it increased by 8.2%.

Rory Byrne: Thank you, James, and welcome, everybody. So thank you all for joining us today as we discuss our results for the second quarter of 2024.

Rory Byrne: So, turning firstly to slide four and the financial highlights for Q2. Well, the second quarter of 2024 was another strong quarter for our business, continuing our positive momentum.

Rory Byrne: Group reported revenue was in line with last year, and on a like-for-like basis, when the impact of the progressive produce disposal is excluded, revenue increased by 4.3%.

Rory Byrne: Just to leave it at, increased by 2.2% to $125.4 million and on a like-for-like basis increased by 8.2%.

Rory Byrne: The growth in Adjusted EBITDA from continuing operations on a like-for-like basis was driven by strong performances in both our Fresh Fruit and Diversified Fresh Produce Americas segments and supported by continued good, stable performance in our Diversified Fresh Produce EMEA segment. Our fresh vegetables business also delivered a strong quarter, contributing to the increase in absolute net income to $88.1 million, compared to $52.3 million in the prior year. On an adjusted basis, net income was $47 million, and adjusted diluted EPS was 49 cents per share.

Rory Byrne: The growth and adjustability of the DAP and continuing operations on a like-for-like basis was driven by strong performances in both our fresh fruit and diversified fresh produce America segments and supported by

Rory Byrne: Continued good, stable performance in our diversified, high-priced produce and mayo segment.

Rory Byrne: Our fresh vegetables business also delivered a strong quarter, contributing to the increase in absolute net income to $88.1 million compared to $52.3 million in the prior year.

Speaker Change: On an adjusted basis, net income was $47 million, and adjusted diluted EPS was 49 cents per share.

Rory Byrne: As I ever said, management and capital allocation continued to be a strong focus for us, and we're very pleased to see our leverage continue to fall, falling to 1.9 times at the end of Q2, which results in a lower interest charge in the core compared to the prior year. Turning now to slide six for our operational highlights, starting with our fresh food segment. Our largest segment delivered a very strong performance in the second quarter with a just-to-date EBITDA of $70.6 million, 7.3% ahead of the prior year.

Speaker Change: As ever, cash management and capital allocation continue to be a strong focus for us and with that we are very pleased to see our leverage continue to reduce, falling to 1.9 times at the end of Q2 and resulting in a lower interest charge in the quarter compared to the prior year.

Speaker Change: Turning now to slide 6 for our operational highlights and starting with our fresh food segment.

Speaker Change: Our largest segment delivered a very strong performance in the second quarter with a just a ditty bid of $70.6 million, 7.3% ahead of the prior year.

Rory Byrne: Looking at the European market, we continued with our positive momentum through the second quarter of 2024, driven by higher volumes of bananas as well as lower sourcing and shipping costs. In North America, we also continued with a solid performance with higher banana volumes and higher banana prices, but offset in part by anticipated higher shipping costs due to the scheduling of tri-ducting activities for a number of our vessels.

Speaker Change: Looking at the European market, we continued with our positive momentum through the second quarter of 2024, driven by higher volumes in bananas as well as by lower sourcing and shipping costs. In North America, we also continued with a solid performance with higher banana volumes in pricing and an increase in overall revenues, but all set in part by anticipated higher shipping costs due to the scheduling of dry docking activities for a number of our vessels.

Rory Byrne: Most of this additional cost will be seen in the second half of the year, when lower seasonal sales volumes allow for a better scheduling opportunity to complete the necessary work. Looking ahead to the remainder of the year for both the North American and European markets, we believe we are well placed. The banana supply remains tight on an industry-wide basis, while despite a recent depreciation in the dollar against Costa Rica and Cologne, in particular, the strength of some key currencies on the sourcing side remains a challenge.

Speaker Change: Most of this additional cost will be seen in the second half of the year, when lower seasonal clearance volumes allow for a better scheduling opportunity to complete the necessary work.

Speaker Change: Looking ahead to the remainder of the year for both the North American and European markets, we believe we are well-placed. The banana supply remains tight on an industry-wide basis, while despite a recent depreciation of the dollar against Costa Rica and Cologne in particular, the strength of some key currencies on the sourcing side remains a challenge.

Rory Byrne: However, with our diversified supply base and experienced team, we have been proactively implementing initiatives to control our cost base, enabling us to continue to service our customers competitively. We continue to anticipate another strong financial performance for the Fresh Food Division on a full year basis. Our diversified EMEA segment delivered another good, stable performance in Q2, consolidating its strong start to the year after an excellent first quarter. Revenue growth remained positive and continued to be driven by higher pricing, whereas volumes for the quarter were impacted by supply shortages for several products typically sourced out of South America.

Speaker Change: However, with our diversified supply base and experienced team, we have been proactively implementing initiatives to control our cost base, enabling us to continue to service our customers competitively.

Speaker Change: Overall, we continue to anticipate another strong financial performance for the Fresh Fruit division on a four-year basis.

Speaker Change: Our diversified EMEA segment delivered another good stage of performance in Q2, consolidating its strong start to the year after an excellent first quarter.

Speaker Change: Revenue growth remained positive and continued to be driven by higher pricing, whereas volumes for the quarter were impacted by supply shortages for several products typically sourced out of South America.

Rory Byrne: On an adjusted EBITDA level, good contributions continue to come from all regions, with a particularly positive performance in the Nordics, Spain, and South Africa. Looking out to the rest of the year, we remain confident that by continuing to leverage our strong market positions, operations, integration, and investment opportunities, we will deliver another satisfactory financial result for the whole year. Our Diverse about America segment delivered another very strong quarter, and on a like-or-like basis, taking out the impact of the progressive project disposal.

Speaker Change: On an adjusted EBITDA level, good contributions continue to come from all regions with a particularly positive performance in the Nordics, Spain and South Africa.

Speaker Change: Looking out to the rest of the year, we remain confident that by continuing to leverage our strong market positions, operational integration and investment opportunities, that we will deliver another satisfactory financial result for the whole year.

Speaker Change: Our Diversify America segment delivered another very strong quarter, and on a like-for-like basis taking out the impact of the progressive project disposal.

Rory Byrne: The strong result was driven, again, by positive underlying performance and the benefit of some seasonal variations, which led to several export seasons extending further into Q2 than in prior years. From a volume standpoint, we had higher grade volumes, in particular in Q2, but additionally saw a good overall marketplace for several products leading to better margins, including some of the seasonal timing factors. The quota was also positive and consistent on the nominorine basis, with strong pricing and small volume increases across most of our North American business.

Speaker Change: The strong result was driven again by positive underlying performance and the benefit of some seasonal variations, which led to several export seasons extending further into Q2 than in prior years.

Speaker Change: From a volume standpoint, we had higher grade volumes, in particular in Q2, but additionally saw good overall marketplace for several products, leading to better margins.

Speaker Change: Excluding some of the seasonal timing factors, the quarter was also positive and consistent on an underlying basis, with strong pricing and small volume increases across most of our North American business. While on the South American export side, the transition to winter season products has started well.

Speaker Change: Looking at the second half of the year, after an excellent first half, we are expecting to consolidate our excellent performance here today and deliver a strong full year results on a like-for-like basis, while being conscious that seasonal timing may again have an important impact in the fourth quarter.

Rory Byrne: So turning to the fresh vegetables business, and as noted on our last call, and since the termination of the sale agreement with Fresh Express, we have been actively exploring strategic alternatives to this business. We continue to seek the best possible outcome in the interest of all stakeholders. Operationally, we are maintaining a keen focus on the day-to-day running of the business, and I've been very pleased to see the hard work of our committed management team paying off so far in 2024.

Speaker Change: So turning to the fresh vegetables business, and as noted on our last call and since the termination of the sale agreement with Fresh Express, we have been actively exploring strategic alternatives to this business. We continue to seek the best.

Speaker Change: possible outcome in the interest of all stakeholders. Operationally, we are maintaining a keen focus on the day-to-day running of the business. I've been very pleased to see the hard work of our committed management team paying off so far in 2024.

Rory Byrne: While the standout performer in the vegetables segment has been our fresh-packed business, which has benefited from favourable market conditions in 2024, our value-added business has also made important progress on a long-delaying basis. The combined businesses have generated operating income in both quarters in 2024, while also contributing positive cash flow to the group and the fresh staff. And with that, I'll hand you over to Jacinta to give the financial review for the second quarter. Thank you, Rory, and good day, everyone.

Speaker Change: Well the standout performer in the vegetables segment has been our fresh packed business which has benefited from favourable market conditions in 2024. Our value-added business has also made important progress on a long-delaying basis.

Speaker Change: The combined businesses have generated operating income in both quarters of 24 while also contributing positive cash flow to the group and the press staff. And with that I'll hand you over to Jacinta to give the financial review for the second quarter.

Jacinta Devine: Firstly, turning to the group results on Slide 8. We are pleased to have delivered another strong performance in the second quarter of this financial year. Reported revenue was in line with the prior year, and on a like for like basis, excluding the impact of FX and the sale of progressive produce, revenue increased 4.3%. Adjusted EBITDA increased 2.2% and 8.2%, or 10 million euros, on a lag for lag basis. The Like for Like increase was driven by the Fresh Food and Diversified Fresh Produce America segment. However, interest expense decreased year-on-year due to lower death levels.

Jacinta Devine: Thank you, Rory, and good day, everyone.

Jacinta Devine: Firstly, turning to the group results on slide 8.

Jacinta Devine: We are pleased to have delivered another strong performance in the second quarter of this financial year. Reported revenue was in line with prior year and on a like-for-like basis, excluding the impact of FX and the sale of progressive produce, revenue increased 4.3%.

Jacinta Devine: Adjusted EBITDA increased 2.2% and 8.2% or 10 million on a lag-for-lag basis. The lag-for-lag increase was driven by the fresh fruit and diversified fresh produce Americas segment.

Speaker Change: Interest Expansity Christ year on year due to lower death levels. The increase in income taxes due to changes in our jurisdiction of profit mix.

Speaker Change: Net income was $88.1 million in the second quarter and an increase of $36 million from Q2 2023. The increase was driven by strong trading performance across the group, including the fresh vegetables business, which is captured within discontinued operations.

Speaker Change: For the first six months, income from discontinued operations increased to £25 million from a loss of £26 million in the first half of 2023.

Jacinta Devine: This income converted to net cash from discontinued operations of $16.7 million for the first six months, compared to an outflow of $8.3 million in the first half of 2023. Diluted EPS was $0.84 compared to $0.44 in the second quarter of 2023. On an adjusted basis, predominantly excluding discontinued operations, adjusted net income and adjusted diluted EPS decreased 3% to 47 million and 49 cents, respectively. The year-on-year decrease was mainly due to higher income tax expense driven by the jurisdictional earnings mix.

Speaker Change: This income converted to net cash from discontinued operations of $16.7 million for the first six months compared to an outflow of $8.3 million in the first half of 2023. Diluted EPS was $0.84 compared to $0.44 in the second quarter of 2023.

Speaker Change: On an adjusted basis, predominantly excluding discontinued operations, adjusted net income and adjusted diluted EPS decreased 3% to $47.49 million respectively.

Speaker Change: The year-on-year decrease was mainly due to higher income tax expense driven by the jurisdictional earnings mix.

Jacinta Devine: Turning now to the Divisional Updates for the second quarter for our continuing operations, starting with Fresh Fruit on slide 10. The Fresh Fruit Division delivered another strong consistent result with revenue increasing 1.5% and adjusted EBITDA up 7.3%. The increase in revenue was primarily due to higher banana volumes in Europe and North America, higher worldwide pricing of bananas, and higher volumes of plantains sold, partially offset by lower volumes in pricing for pineapples.

Speaker Change: Turning now to the Divisional Updates for the second quarter for our continuing operations and starting with Fresh Fruit on slide 10.

Speaker Change: The fresh fruit division delivered another strong consistent result with revenue increasing 1.5% and adjusted EBITDA up 7.3%.

Speaker Change: Increase in revenue was primarily due to higher banana volumes in Europe and North America, higher worldwide pricing of bananas and higher volume of plantains sold, partially offset by lower volumes and pricing for pineapples.

Jacinta Devine: The 4.8 million increase in adjusted EBITDA was driven by higher revenue and lower food sourcing costs, partially offset by higher shipping. Turning to diversified fresh produce EMEA on slide 11, the second quarter saw another consistent result from this segment, continuing its good momentum over the last number of quarters. Revenue increased 3.2%, primarily due to a strong performance in Ireland, the UK, and Spain.

Speaker Change: The 4.8 million increase in adjusted EBITDA was driven by higher revenue and lower food sourcing costs, partially offset by higher shipping costs.

Speaker Change: Turning to diversified fresh produce in Mia on Slide 11.

Speaker Change: The second quarter saw another consistent result from this segment, continuing its good momentum over the last number of quarters. Revenue increased 3.2%, primarily due to a strong performance in Ireland, the UK and Spain.

Jacinta Devine: Adjusted EBITDA was in line with the prior year driven by strong operating results in Spain and South Africa. Finally, Diversified Fresh Produce Americas and Rest of the World, on slide 12. This segment was impacted by the sale of progressive produce in March. On a like-for-like basis, predominantly excluding the impact of this sale, the segment produced a strong result.

Speaker Change: Adjusted EBITDA was in line with prior year, driven by strong operating results in Spain and South Africa.

Speaker Change: Finally, diversified fresh produce America's and rest of the world on slide 12.

Speaker Change: This segment was impacted by the sale of Progressive Produce in March.

Speaker Change: On a like-for-like basis, predominantly excluding the impact of this sale, this segment produced a strong result. Revenue increased 11.3% or 47 million on a like-for-like basis.

Jacinta Devine: Revenue increased 11.3% or 47 million on a like-for-like basis, primarily due to seasonal timing benefits, as well as positive underlying revenue growth in most commodities in North America. Adjusted EBITDA increased 36.4% on a like-for-like basis, primarily due to the benefit of continued seasonal timing differences in South America and an improved performance in our North American diversified business. Now turning to slide 14 to discuss our 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 1.9 times. The reduction was driven by both our strong EBITDA in the quarter and a smaller decrease in our net debt. Net cash provided by operating activities from continuing operations was 40.2 million in the quarter.

Speaker Change: primarily due to seasonal timing benefits as well as positive underlying revenue growth in most commodities in North America.

Speaker Change: Adjusted EBITDA increased 36.4% on a like-for-like basis, primarily due to the benefit of continued seasonal timing differences in South America and an improved performance in our North American diversified business.

Speaker Change: Now turning to slide 14 to discuss our 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 1.9 times.

Speaker Change: The reduction was driven by both our strong EBITDA in the quarter as well as a small decrease in our net debt.

Speaker Change: Net cash provided by operation activities from continuing operations was 40.2 million in the quarter. As usual, at this time of year, we have a higher investment in working capital due to the typical seasonal peaks for our business.

Jacinta Devine: As usual, at this time of year, we have a higher investment in working capital due to the typical seasonal peaks for our business, and we expect that this will reverse over the course of the second half of the year. Cash capital expenditure from continuing operations was $17.5 million in the second quarter and included spending on shipping containers, efficiency projects in our warehouses, and ongoing investments in other assets.

Speaker Change: And we expect that this will reverse the course of the second half of the year.

Speaker Change: Cash capital expenditure from continue operations was $17.5 million in the second quarter and included spend on shipping containers, efficiency projects in our warehouses and ongoing investments in other assets.

Jacinta Devine: For the full year, we continue to expect total capital expenditure in the range of $110 to $120 million. Along with the scheduled dry docking of some of our vessels, our other investments in the second half of the year will include further efficiency projects in our Nordic warehouse assets, vehicle additions, and the expansion of processing capacity in some of our Chilean facilities. Following the sale of Progressive Produce in March, we used the proceeds to repay £100 million of our term loans in April. This contributed to lower debt levels compared to the prior year, leading to a decrease in interest expense.

Speaker Change: For the full year, we continue to expect total capital expenditure in the range of $110 million to $120 million.

Speaker Change: Along with the scheduled dry docking of some of our vessels, our other investments in the second half of the year will include further efficiency projects in our Nordic warehouse assets, vehicle additions and the expansion of processing capacity in some of our Chilean facilities.

Speaker Change: Following the sale of Progressive Produce in March, we used the proceeds to repay 100 million of our term loans in April. This contributed to lower debt levels compared to the prior year, leading to a decrease in interest expense.

Jacinta Devine: For the full year, we continue to expect our interest expense, inclusive of discontinued operations, to be in the range of £75 to £80 million. Continuing with our commitment to return cash to shareholders, we are pleased to declare a dividend of 8 cents for the second quarter, which will be paid on October 3rd, 2024 to shareholders on record on September 11th, 2024. Now I will hand you back to Rory, who will give an update on our full year out. Thank you, Jacinta.

Speaker Change: For the full year, we continue to expect our interest expense, inclusive of discontinued operations, to be in the range of $75 to $80 million.

Speaker Change: Continuing with our commitment to return cash to shareholders, we are pleased to declare a dividend of 8 cents for the second quarter, which will be paid on October 3rd, 2024, to shareholders on record on September 11th, 2024.

Speaker Change: Now, I will hand you back to Rory, who will give an update on our full year outlook.

Rory Byrne: So, we're very pleased some consolidators are strong and start to be here with the not very good performance in the second quarter, which really puts us in an excellent position to deliver a strong result for the full year. But forecasting obviously remains complex. We are raising our full-year electricity target to at least $370 million for 2024.

Rory Byrne: Thank you Jacinta. We're very pleased to have consolidated our strong start to the year with another very good performance in the second quarter, which really puts us in an excellent position to deliver a strong result for the full year.

Rory Byrne: Our forecasting obviously remains complex. We are raising our full-year adjusted EBITDA target to at least $370 million for 2024. In conclusion, we are pleased to have added another quarter of stable, strong and consistent earnings to our track record and are now keenly focused on delivering on our enhanced full-year target while also advancing on our strategic priorities for the remainder of the year.

Speaker Change: I want to finish by once again thanking all our excellent people across the group for their ongoing commitment and dedication to continue to drive GoPLC forward, as well as to our suppliers, our customers, for all their ongoing support. So with that, I'll hand you back to the operator and we can open the line for questions.

Unknown Executive: And if you'd like to withdraw that question, again, press star one. Your first question comes from the line of Adam Samuelson with Goldman Sachs. Please go ahead. I thank you. Good morning, everyone.

Speaker Change: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. And if you'd like to withdraw that question, again press star 1. Your first question comes from the line of Adam Samuelson with Goldman Sachs. Please go ahead.

Adam Samuelson: Thank you. Good morning, everyone.

Adam Samuelson: James Regan, David

Adam Samuelson: Hi. So, Rory, Jacinta, I just wanted to ask you maybe the first question, as we think about kind of the outlook for the balance of the year, you've raised kind of the full year guidance. You also have had a strong first half. Can you just calibrate for us how much of the increase in the full year outlook really reflected second quarter or first half performance and maybe how the second half of your expectations for the second half of the year are? You have changed, if at all, from where you were.

Adam Samuelson: Hi.

Speaker Change: So, Rory, Jacinta, I just want to, just, maybe the first question, as we think about kind of the outlook over the balance of the year you've raised.

Adam Samuelson: and the full year guidance, you also have had a strong first half. Can you just calibrate for us how much of the increase in the full year outlook really reflected second quarter or first half of performance and maybe how the second half of your expectations for the second half of the year?

Speaker Change: have changed, if at all, from where you were three or six months ago. Thank you.

Rory Byrne: Yeah, thanks, Adam. So, you know, Helen, forecasting is clearly not an exact science, as I said, and you know, I think a diversified range of activities across geographies, across sources, customer bases, customer profiles, does give us a good balance to cope with a lot of things, which we've done over the last number of years. I think the profile of earnings between first half and second half might just vary a little bit this year compared with the last number of years, and certainly on the fresh food side of the business, there's no doubt that we have overperformed in the first half of the year, and we have anticipated, particularly with the dry docking of the ships and the knock-on cost consequences of that, that the Q3 in particular and the second half of the year will be a little bit below last year's numbers.

Speaker Change: Yeah, thanks, Adam. So, you know, Helen, forecasting is clearly not an exact science, as I said, and, you know, having a diversified range of activities across geographies, across sources, customer bases, customer profiles, does give us a good balance to cope with a lot of things which we've done over the last number of years. I think the profile of earnings between first half and second half might just vary a little bit this year compared with the last number of years. Certainly on the fresh food side of the business, there's no doubt that we have overperformed in the first half of the year. And, you know, we have anticipated, particularly with the dry docking of the ships and the knock-on cost consequences of that, that the acute…

Rory Byrne: We'll measure the fresh food division, like all divisions, on a full year basis, so we're not unduly worried about switches between one quarter or the other. You know, we look at some of the other major issues; some of the other contributors, in particular, had a really strong finish to the year, and, you know, just a lot of things went right for us. So, you know, we don't necessarily budget for that repeating itself this year, but overall, we put everything into the mix, and, you know, we're comfortable with the target routes that are set for the remainder of the year Okay, that's, that's helpful, Rory.

Sam Smith: Sam Smith, Oil Kings, Rory Byrne.

Sam Smith: I'm duly worried about switches between one quarter or the other. You know, we look at some of the other major issues, or some of the other contributors. EMEA, in particular, had a really strong finish to the year. Just a lot of things went right for us, so we don't necessarily budget for that repeating itself this year. But overall, we put everything into the mix, and we're comfortable with the target groups that are set for the remainder of the year.

Rory Byrne: And I guess, just with the leverage where it has gotten to the fresh vegetable business showing some good earnings and disc ops, and hopefully, a divestiture and sale process there kind of progresses. Can it help us think about kind of the need to deploy incremental cash and cash proceeds towards further debt reduction from here or how you would evaluate Sherry Purchase versus versus organic growth? It would seem like there doesn't need to be as much of an emphasis on D11.

Julie: Okay, that's helpful, Rory. And I guess, just with...

Speaker Change: The leverage where where it has gotten to the fresh vegetable business showing

Speaker Change: some good earnings and just jobs and hopefully

Speaker Change: Diverstiture and sell process there kind of progresses and it helped us think about kind of the need to deploy incremental cash and cash proceeds towards

Speaker Change: further debt reduction from here or how you would evaluate share repurchase versus versus organic growth Perspectively just what would seem like there doesn't need to be as much of an emphasis on deleveraging incrementally from here And I'd just love to hear

Rory Byrne: It's a very dynamic process, Adam. We constantly look at our level of debt, our profitability, and growth opportunities through acquisitions that are available to the group. And I think I have pointed out that some of the private deals have actually been significantly higher valued than the public rating attributed to us, so that's made that a little bit challenging, but we do keep our eyes on that world, and we hope that that gap narrows at some point in time.

Speaker Change: here, how you reassessing that is.

Speaker Change: Yeah, I mean, no, it's...

Speaker Change: It's, as you know, it's a very dynamic process, Adam. You know, we constantly look at, you know, our level of debt, our profitability. We look at the growth opportunities through acquisition that are available to the group. And, you know, I think I have pointed out that some of the private deals have actually been significantly higher valued than the public rating attributed to us. So that's made that a little bit challenging, but we do keep our eyes on that world and we hope that that gap narrows at some point in time. And, you know, there are some investment opportunities within our existing business to, you know, continue to consolidate and grow our business.

Rory Byrne: There are some investment opportunities within our existing business to continue to consolidate and grow our business, and then obviously, we're looking at the macroeconomic situation as well and looking at, we've seen a lot of volatility in the stock markets over the last couple of weeks, a lot of speculation as to what might happen with interest rates, and then, as you say, we've got the veg question, which is still a work in progress in terms of So all of those go into the mix to determine the final outcome, and over the years, we've adapted to use pretty much every one of those capital allocation levers in the appropriate circumstances, and that will be the approach we will continue to take going forward. Okay, if I could squeeze one more quick one in just, if I look at the full, the updated full-year guidance, the $370 million of continuing opportunity, but the capex and interest, how Presumably also subtracting out the $30 odd million.

Speaker Change: and then obviously we're looking at the macroeconomic situation as well and looking at you know we've seen a lot of volatility in the stock markets over the last couple of weeks.

Speaker Change: and a lot of speculation as to what might happen with interest rates.

Speaker Change: and then, as you say, we've got the VEG question is still a work in progress in terms of where we end up in that. So all of those go into the mix to determining what the final outcome, and over the years we've been, you know...

Speaker Change: We've adapted to utilise pretty much every one of those capital allocation levers in the appropriate circumstances And that will be the approach we will take, we will continue to take going forward

Speaker Change: Okay, I'm going to squeeze one more quick one in just...

Speaker Change: If I look at the updated full-year guidance, the $370 million of continuing opt-c, the capex and interest, how do we think about the free cash flow conversion?

Speaker Change: That would net out of that, presumably also subtracting out the $30 odd million of dividends and not controlling that you're likely to have.

Jacinta Devine: Dividends, and I'm controlling the Yeah, hi, Adam. So I suppose last year we had a very strong working capital inflow at the end of the year. And while we expect a very strong inflow this year, maybe not quite at the same level, you remember I talked about the seasonal impacts of the Chilean business and also the impact of the online stocks we had built up in 2022. So, in overall terms, I suppose we consider a free cash flow conversion of 30 to 35% to be normal.

Jacinta Devine: I think that's a reasonable approximation. That's very helpful. I will pass it on. Thank you, Adam. Your next question comes from the line of Gary Martin with Davey. Please go ahead. Hi Rory, this is Johan.

Adam Samuelson: Hi Adam.

Adam Samuelson: So I suppose you.

Speaker Change: Last year we had very strong working capital inflow at the end of the year, and while we expect very strong inflow this year, maybe not quite at the same level. You'll remember I talked about the seasonal impact.

Speaker Change: the Chilean business and also the impact of the unwind of the stocks we had built up in 2022. So in overall terms I suppose we consider a free cash flow conversion of

Speaker Change: 30 to 35 percent to be to be a normal type and I think that's a reasonable approximation.

Speaker Change: Okay, that's very helpful. I will pass it on. Thank you.

Adam Samuelson: Thank you, Adam.

Speaker Change: Your next question comes from the line of Gary Martin with Davey. Please go ahead.

Gary Martin: First of all, congratulations on a strong set of results. So just a couple from me, just going to jump into the divisionals. Just on Fresh Fruit, first of all, I mean, it's been another strong quarter just in terms of volumes across Europe and North America. I mean, I'm just going to square the circle on this.

Dan Johan: Hi Rory, this is Dan Johan. First of all, just congrats on a strong set of results. So just a couple from me, just going to jump into the divisionals. Just on fresh fruit, just first of all, I'm going to spin another

Johan Linden: I mean, is this better sourcing from Dole? Is this market share growth? Is this just a general demand dynamic? What's the best way to think about this?

Speaker Change: Strong quarters in terms of volumes across Europe and North America. I mean, I'm sure square the circle on this. I mean is this

Speaker Change: better sourcing from Dole? Is this market share growth? Is this just a general demand dynamic? What's the best way to think about this and is it going to persist do you think?

Johan Linden: And is it going to persist, do you think? We are working on making it persist, and first of all, the overall team has done a very good job when it comes to focusing on quality and service, and that's on the back of the very good sourcing network that we have, the good shipping setup that we have, but we also have some very high-quality customers. So we can see some of the retail we're having is gaining market share, so of course, we are gaining then some volume on the back of that, but we have also been able to attract some new customers, and yes, we are hoping and working on continuing that into the future. Excellent. Good color.

Speaker Change: Johan?

Johan: We are working on making it persist and first of all the overall team has done a very good job when it comes to focusing on

Johan: Quality and service and that's on the back of the very good sourcing network that we have the good ship shipping setup that we have but we also have some

Johan: Very high quality customers, so we can see some of the retails we're having gaining market share So of course we are gaining then some volume on the back of that, but we have also been able to take

Johan: Some new some new customers and yes, we are hoping and working on

Johan: Continuing that into the future.

Johan Linden: And I just maybe secondly, just on, I know you've spoken previously just about the kind of bridge into the second half of the year, and I think you mainly kind of focus on the negatives, but I think in the statement, you kind of give yourself, you know, good momentum into H2. I mean, just some of this may be the unwinding of some of the volume shortages that you'd noted in diversified EMEA. And maybe just is there an expectation for some of the, we'll say, the seasonal timing kind of upside that you'd noted in America and the rest of the world to potentially persist?

Johan: Excellent. Good call, Rory. And then just maybe secondly, just on, I know you'd spoken previously just about the kind of bridge into the second half of the year.

Speaker Change: and I think you may be focused on the negatives, but I think in the statement, you kind of, you know, good momentum into H2. I mean, just some of this may be the unwinding of some of the volume shortages that you'd noted in diversified and me it.

Speaker Change: And maybe just, is there an expectation for some of the, we'll say, the seasonal timing kind of upside that you noted in America's and the rest of the world to potentially persist? Or what's the best way to think about the second half, just across the diversified business?

Johan Linden: Or what's the best way to think about the second half just across the diversified business? Yeah, I think, you know, if you look at the diversified mayo, it had a strong first half of the year. The few ups and downs on some of them are interlinked. If you look at, say, America's business, where pricing and margins on some of the key products, some of which get exported into Europe, have been very strong. And that gives those markets opportunities to sell to the Far East or other locations that are not Europe. So you can see less food maybe coming into Europe in some of our divisions.

Speaker Change: Yeah, I think if you look at diversified, it's had a strong first half of the year. There are a few ups and downs and some of them are interlinked. If you look at, say, America's business where pricing and margins on some of the key products, some of which get exported into Europe, have been very strong and that gives those markets

Speaker Change: opportunities to sell to Far East or other locations that are not Europe so we can see less food maybe coming into Europe into some of our divisions. I think what we're seeing is over the back half of the year we're expecting the profile to be a little bit different but not dramatically different.

Johan Linden: I think what we're seeing is over the back half of the year, we're expecting the profile to be a little bit different, but not dramatically different. Obviously, I was very pleased that within the America side of us, you know, taking out despite taking out progressive projects and disposing of progressive projects, we're going to have a very strong year within that division as well on an overall full year basis. Excellent. Good comment.

Speaker Change: [inaudible]

Speaker Change: Obviously we're very pleased that within the America side of us, you know, taking out, despite taking out progressive projects and disposing of progressive projects, we're going to have a very strong year within that division as well on an overall full-year basis.

Gary Martin: I'll pass it on. Thank you, Gary. Again, if you would like to ask a question, please press star 1 on your telephone keypad.

Speaker Change: Excellent. Good call. I'll pass it on.

Gary Martin: Thank you, Gary.

Unknown Executive: And that concludes our question and answer session. I will now turn the call back over to Rory Byrne for closing comments. Thank you. Well, following on from what we thought was a very good 2023, we're really pleased with such a strong start to 2024 and the outcome for the first half of 2024. This adds to a very strong sequence of good, strong quarterly performance going back over quite a number of quarters at this point in time.

Gary Martin: And that concludes our question and answer session. I will now turn the call back over to Rory Byrne for closing comments.

Rory Byrne: Thank you.

Speaker Change: Well, I suppose following on from what we thought was a very good 2023, we're really pleased with such a strong start to 2024 and the outcome for the first half of 2024.

Speaker Change: It adds to a very strong sequence of good, strong quarterly performance going back over quite a number of quarters at this point in time.

Unknown Executive: Huge amounts of dedication, work, and thought go into all aspects of our business, and we believe we're well positioned for continued growth. So thank you once again to all of our hugely committed people and to all of us for all of you for joining us today. Thank you. This concludes today's conference call. Thank you for your participation, and you may now disconnect.

Speaker Change: Huge amount of dedication, work, thought going into all aspects of our business and we believe we're well positioned for continued growth. So thank you once again to all of our hugely committed people and to all of us for all of you for joining us today. Thank you.

Speaker Change: This concludes today's conference call. Thank you for your participation and you may now disconnect.

Jacinta Devine: The increase in income taxes is due to changes in our jurisdictional profit mix. Net income was $88.1 million in the second quarter, an increase of $36 million from Q2 2023. The increase was driven by strong trading performance across the group, including the fresh vegetables business, which is captured within just continued operations. For the first six months, income from discontinued operations increased to £25 million from a loss of £26 million in the first half of 2023.

Rory Byrne: Well, on the South American exports side, the transition to winter season products has started well. Looking after the second half of the year, after next to the first half, we are expecting to consolidate our excellent performance here today and deliver a full year, a strong full year result, unlike for like. Well, I've been conscious that seasonal timing may again have been a lot more important to back in the fourth quarter.

Rory Byrne: So with that, I'll hand it back to the operator, and we can open the line for questions. Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue.

Rory Byrne: In conclusion, we are pleased to have added another quarter of stable, strong, and consistent earnings to our track record and are now keenly focused on delivering on our enhanced four-year targets, while also advancing on our strategic priorities for the remainder of the year. I want to finish by once again thanking all our excellent people across the group for their ongoing commitment and dedication to continue to drive Dole PLC boards, as well as two of our suppliers, our customers, for all their ongoing support.