Fresh Del Monte Produce (FDP) - 2025 Q2 - Quarterly Results

Executive Summary & Financial Highlights Q2 2025 Financial Performance Overview Fresh Del Monte Produce Inc. reported strong second-quarter 2025 results, with net sales increasing by 4% and gross profit by 6% year-over-year, driven by robust demand for core products, especially proprietary pineapple varieties and fresh-cut offerings. The company maintained a strong balance sheet with healthy cash flow and reduced debt - Fresh Del Monte's Q2 2025 results reflect a strong strategy, with sales growth fueled by continued demand for core products, including proprietary pineapple varieties, and strong momentum in the fresh-cut business[2] - The company's balance sheet remained strong, supported by robust cash flow and low debt levels[1] Q2 2025 Financial Performance (Millions USD) | Metric | Q2 2025 (Millions USD) | Q2 2024 (Millions USD) | YoY Change (%) | | :----------------------- | :--------------------- | :--------------------- | :------------- | | Net Sales | $1,182.5 | $1,139.7 | 3.8% | | Gross Profit | $120.1 | $113.2 | 6.1% | | Gross Margin | 10.2% | 9.9% | +0.3 pp | | Operating Income | $68.3 | $68.2 | 0.1% | | Net Income (attributable to FDP) | $56.8 | $53.6 | 6.0% | Adjusted Financial Performance Adjusted financial metrics for Q2 2025 showed improved performance compared to the prior year, with adjusted gross profit and adjusted operating income increasing, reflecting the exclusion of certain non-recurring charges from the prior period Adjusted Financial Performance (Millions USD) | Metric | Q2 2025 (Millions USD) | Q2 2024 (Millions USD) | YoY Change (%) | | :----------------------- | :--------------------- | :--------------------- | :------------- | | Adjusted Gross Profit | $120.1 | $114.4 | 5.0% | | Adjusted Operating Income | $68.8 | $64.5 | 6.7% | | Adjusted FDP Net Income | $59.1 | $50.9 | 16.1% | - Adjusted gross profit for Q2 2024 included $1.2 million of other product-related charges, primarily due to Red Sea shipment disruptions and clean-up costs from flooding in Greece[5] - Other (income) expense, net, for Q2 2025 was a gain of $6.2 million, up from $2.3 million in the prior-year period, primarily due to equity earnings from unconsolidated companies in the food and nutrition sector[8] Business Segment Performance and Selected Financial Data Fresh and Value-Added Products Segment The Fresh and Value-Added Products segment experienced significant growth in Q2 2025, driven by higher selling prices for pineapple and increased sales volume and prices for fresh-cut fruit, despite strategic reductions in fresh-cut vegetables Fresh and Value-Added Products Segment Performance (Millions USD) | Metric | Q2 2025 (Millions USD) | Q2 2024 (Millions USD) | YoY Change (%) | | :----------------------- | :--------------------- | :--------------------- | :------------- | | Net Sales | $722.6 | $694.1 | 4.1% | | Gross Profit | $84.9 | $77.9 | 9.0% | | Gross Margin | 11.7% | 11.2% | +0.5 pp | - Net sales increase was primarily due to higher per unit selling prices in the pineapple product line, higher sales volume and per unit selling prices in fresh-cut fruit due to strong market demand, favorable exchange rates, and tariff-related price adjustments[13] - The increase was partially offset by lower net sales in fresh-cut vegetable and vegetable product lines due to strategic operational reductions, including the sale of certain assets of Fresh Leaf Farms[13] Banana Segment The Banana segment saw an increase in net sales in Q2 2025, primarily from higher selling prices and favorable exchange rates, with sales volume recovery in the Middle East offsetting declines in Asia and North America. However, gross margin slightly decreased due to higher production and distribution costs Banana Segment Performance (Millions USD) | Metric | Q2 2025 (Millions USD) | Q2 2024 (Millions USD) | YoY Change (%) | | :----------------------- | :--------------------- | :--------------------- | :------------- | | Net Sales | $410.0 | $394.3 | 4.0% | | Gross Profit | $30.0 | $29.8 | 0.7% | | Gross Margin | 7.3% | 7.6% | -0.3 pp | - Net sales increase was driven by higher per unit selling prices across all regions, favorable exchange rates (Euro), and tariff-related price adjustments[15] - Sales volume increased in the Middle East, reflecting a recovery from prior-year shipment disruptions caused by the Red Sea conflict, but was partially offset by lower sales volume in Asia and North America[15] Other Products and Services Segment The Other Products and Services segment experienced a slight decline in both net sales and gross profit in Q2 2025, primarily due to lower per unit selling prices in the poultry and meats business Other Products and Services Segment Performance (Millions USD) | Metric | Q2 2025 (Millions USD) | Q2 2024 (Millions USD) | YoY Change (%) | | :----------------------- | :--------------------- | :--------------------- | :------------- | | Net Sales | $49.9 | $51.3 | -2.7% | | Gross Profit | $5.2 | $5.5 | -5.5% | | Gross Margin | 10.4% | 10.7% | -0.3 pp | - The decrease in net sales and gross profit was primarily due to lower net sales in the Company's poultry and meats business, driven by lower per unit selling prices[17][18] Financial Position and Shareholder Returns Cash Flows Net cash provided by operating activities for the first six months of 2025 increased, primarily due to higher net income and favorable working capital fluctuations Net Cash Provided by Operating Activities (Millions USD) | Metric | Six Months Ended June 27, 2025 (Millions USD) | Six Months Ended June 28, 2024 (Millions USD) | YoY Change (%) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------- | | Net cash provided by operating activities | $159.2 | $143.7 | 10.8% | - The increase was primarily attributable to higher net income and working capital fluctuations, mainly driven by higher levels of accounts payable and accrued expenses, partially offset by higher levels of inventory[19] Long Term Debt The company significantly reduced its long-term debt by 29% year-over-year, strengthening its financial position Long-term Debt (Millions USD) | Metric | Q2 2025 (Millions USD) | Q2 2024 (Millions USD) | YoY Change (%) | | :---------------- | :--------------------- | :--------------------- | :------------- | | Long-term debt | $201.0 | $285.0 | -29.5% | Shareholder Returns Fresh Del Monte declared a quarterly cash dividend and maintained its share repurchase program, though no shares were repurchased in Q2 2025 - A quarterly cash dividend of $0.30 per share was declared on July 29, 2025, payable on September 5, 2025[22] - No shares were repurchased during the second quarter of 2025 under the $150.0 million share repurchase program, with $142.4 million remaining available[23] Condensed Consolidated Financial Statements Condensed Consolidated Statements of Operations The condensed consolidated statements of operations provide a detailed breakdown of revenues, costs, and profits for the second quarter and first six months of 2025 and 2024, highlighting increases in net sales and net income Condensed Consolidated Statements of Operations (Millions USD, except EPS) | Statement of Operations: | Quarter ended June 27, 2025 | Quarter ended June 28, 2024 | Six months ended June 27, 2025 | Six months ended June 28, 2024 | | :----------------------- | :-------------------------- | :-------------------------- | :----------------------------- | :----------------------------- | | Net sales | $1,182.5 | $1,139.7 | $2,280.8 | $2,247.5 | | Cost of products sold | $1,062.4 | $1,025.3 | $2,068.6 | $2,051.9 | | Gross profit | $120.1 | $113.2 | $212.2 | $195.4 | | Operating income | $68.3 | $68.2 | $113.2 | $112.2 | | Net income attributable to Fresh Del Monte Produce Inc. | $56.8 | $53.6 | $87.9 | $79.7 | | Basic EPS | $1.19 | $1.12 | $1.83 | $1.67 | | Diluted EPS | $1.18 | $1.12 | $1.82 | $1.66 | | Dividends declared per ordinary share | $0.30 | $0.25 | $0.60 | $0.50 | Condensed Consolidated Balance Sheets The balance sheet as of June 27, 2025, shows an increase in total assets and shareholders' equity compared to December 27, 2024, with notable changes in cash and cash equivalents and a reduction in long-term debt Condensed Consolidated Balance Sheets (Millions USD) | Balance Sheet Item | June 27, 2025 (Millions USD) | December 27, 2024 (Millions USD) | | :----------------------- | :----------------------------- | :------------------------------- | | Cash and cash equivalents | $85.5 | $32.6 | | Total current assets | $1,182.3 | $1,132.9 | | Total assets | $3,164.9 | $3,096.2 | | Accounts payable and accrued expenses | $503.0 | $476.0 | | Total current liabilities | $567.7 | $533.1 | | Long-term debt and finance leases | $205.2 | $248.9 | | Total liabilities | $1,086.6 | $1,089.4 | | Total shareholders' equity | $2,078.3 | $2,006.8 | Condensed Consolidated Statements of Cash Flows The cash flow statement for the first six months of 2025 indicates a significant increase in net cash provided by operating activities and a net increase in cash and cash equivalents, despite net cash used in investing and financing activities Condensed Consolidated Statements of Cash Flows (Millions USD) | Cash Flow Activity | Six months ended June 27, 2025 (Millions USD) | Six months ended June 28, 2024 (Millions USD) | | :----------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net cash provided by operating activities | $159.2 | $143.7 | | Net cash (used in) provided by investing activities | $(24.4) | $1.6 | | Net cash used in financing activities | $(81.2) | $(144.3) | | Net increase in cash and cash equivalents | $52.9 | $4.0 | | Cash and cash equivalents, ending | $85.5 | $37.8 | Non-GAAP Measures and Reconciliations Explanation of Non-GAAP Measures Fresh Del Monte uses various non-GAAP financial measures, such as Adjusted gross profit, Adjusted operating income, and Adjusted EBITDA, to provide a more comparable analysis of its underlying operating performance by excluding special items not indicative of core business operations - Non-GAAP measures like Adjusted gross profit, Adjusted operating income, and Adjusted FDP net income reflect adjustments for asset impairment, gain on disposal of property, plant and equipment, and other product-related charges[32] - EBITDA is defined as net income attributable to Fresh Del Monte Produce Inc. excluding interest expense, income taxes, depreciation and amortization, and share-based compensation expense. Adjusted EBITDA includes further adjustments for special items[32] - Management uses these metrics to evaluate period-over-period operating performance, for strategic planning, forecasting, and incentive compensation, as they exclude special items not indicative of the Company's core business[33][34] Non-GAAP Reconciliation Tables Detailed reconciliations are provided for various non-GAAP measures, including adjusted gross profit, operating income, net income, diluted EPS, and EBITDA, showing the impact of specific adjustments for both quarterly and year-to-date periods Q2 2025 Non-GAAP Reconciliation (Millions USD, except EPS) | Metric | As Reported | Adjustments | As Adjusted | | :----------------------- | :---------- | :---------- | :---------- | | Gross profit | $120.1 | $0.0 | $120.1 | | Operating income | $68.3 | $0.5 | $68.8 | | Net income attributable to FDP | $56.8 | $2.3 | $59.1 | | Diluted EPS | $1.18 | $0.05 | $1.23 | Six Months Ended June 27, 2025 Non-GAAP Reconciliation (Millions USD, except EPS) | Metric | As Reported | Adjustments | As Adjusted | | :----------------------- | :---------- | :---------- | :---------- | | Gross profit | $212.2 | $0.0 | $212.2 | | Operating income | $113.2 | $(0.3) | $112.9 | | Net income attributable to FDP | $87.9 | $1.5 | $89.4 | | Diluted EPS | $1.82 | $0.03 | $1.85 | Q2 2025 EBITDA and Adjusted EBITDA Reconciliation (Millions USD) | Metric | Q2 2025 | Q2 2024 | | :----------------------- | :------ | :------ | | Net income attributable to FDP | $56.8 | $53.6 | | EBITDA | $94.9 | $92.7 | | Adjusted EBITDA | $95.4 | $89.0 | | Adjusted EBITDA margin | 8.1% | 7.8% | Six Months Ended June 27, 2025 EBITDA and Adjusted EBITDA Reconciliation (Millions USD) | Metric | Six Months 2025 | Six Months 2024 | | :----------------------- | :-------------- | :-------------- | | Net income attributable to FDP | $87.9 | $79.7 | | EBITDA | $157.0 | $149.6 | | Adjusted EBITDA | $156.7 | $132.5 | | Adjusted EBITDA margin | 6.9% | 5.9% | Company Information Conference Call and Webcast Fresh Del Monte hosted a conference call and webcast to discuss its Q2 2025 financial results, progress, and outlook, with replay available online - A conference call and simultaneous webcast were held on July 30, 2025, at 11:00 a.m. Eastern Time to discuss Q2 2025 financial results[43] - The webcast can be accessed via the Company's Investor Relations home page and will be available for re-broadcast for one year[43] About Fresh Del Monte Produce Inc. Fresh Del Monte Produce Inc. is a leading global producer, marketer, and distributor of fresh and fresh-cut fruits and vegetables, known for its DEL MONTE® and MANN® brands, and recognized for its commitment to sustainability and trust - Fresh Del Monte Produce Inc. is a vertically integrated producer, marketer, and distributor of high-quality fresh and fresh-cut fruit and vegetables, and a leading producer and distributor of prepared food in Europe, Africa, and the Middle East[44] - The company markets products under the DEL MONTE® and MANN® brands, and is the first global marketer of fruits and vegetables to commit to the 'Science Based Targets' initiative[44] - Fresh Del Monte was ranked one of 'American's Most Trusted Companies' by Newsweek for 2022, 2023, and 2024, and named a Humankind 100 Company for two consecutive years[44] Forward-looking Information This section contains forward-looking statements regarding the company's future plans and performance, emphasizing that actual results may differ due to various risks and uncertainties, including commodity costs, supply chain issues, weather, and regulatory changes - The press release contains forward-looking statements about future performance, including focus on high-margin products, operational streamlining, shareholder value creation, pineapple innovations, customer growth, and managing costs[45] - Actual plans and performance may differ materially due to risks such as elevated commodity and supply chain costs, execution of strategic growth plans, impact of tariffs, foreign currency fluctuations, asset impairments, Middle East conflict, and severe weather conditions[45] - All forward-looking statements are qualified by cautionary statements and risk factor disclosures in the Company's SEC filings, including the most recently filed Annual Report on Form 10-K[45] Investor and Media Contacts Contact information is provided for investor relations and corporate communications inquiries - Contact information for investors is Christine Cannella, Vice President, Investor Relations, at Investors@freshdelmonte.com[46] - Contact information for media is Claudia Pou, Vice President, Global Head of Corporate Communications, at Communications@freshdelmonte.com[46]