Fresh Del Monte Produce Inc. Q4 and FY 2025 Earnings Presentation February 18, 2026 0 Meet Our Speakers 1 Forward-Looking Statement This presentation and the related earnings call contain certain forward-looking statements regarding the intent, beliefs or current expectations of the Company. These statements include statements that are preceded by, followed by or include the words "believes", "expects", "anticipates", "may" or similar expressions with respect to various matters. Specifically, this presentat ...

Core Viewpoint - The Hainan Free Trade Port Intellectual Property Court has released the "Seed Industry Intellectual Property Judicial Protection White Paper (2021-2025)", emphasizing the judicial protection of seed industry innovation and the high-quality development of the "South Breeding Silicon Valley" [1][2]. Group 1: Judicial Protection Measures - The court has intensified punitive measures against intentional infringement, significantly increasing the cost of illegal activities [2]. - The scope of intellectual property judicial protection has been expanded to include breeding parent materials that are not authorized, incorporating them into the protection of trade secrets [2]. - Protection has been extended from production and sales to upstream activities such as breeding and research trials [2]. Group 2: Infringement Trends - Infringement methods in the seed industry have become increasingly sophisticated and covert, including online sales of infringing varieties and illegal breeding activities by individuals posing as farmers [1]. - The court has handled a variety of intellectual property cases related to the seed industry, covering the entire chain from research and development to sales and circulation [1]. Group 3: Importance of South Breeding - Over 70% of newly developed crop varieties in China are selected at the national South Breeding Research and Breeding Base located in Hainan, highlighting its role as an incubator for agricultural technology innovation and an accelerator for new variety selection [2].

Core Insights - The global fresh produce market is dominated by a few key players, with Mission Produce Inc. (AVO) and Dole plc (DOLE) standing out for different reasons, particularly in terms of scale, geographic reach, and product focus [1][2] Group 1: Mission Produce (AVO) - AVO is the world's largest vertically integrated avocado company, selling a record 691 million pounds of avocados in fiscal 2025, reinforcing its leadership in North America and expanding in Europe and Asia [3] - With nearly 70% household penetration in the U.S., AVO is pivotal in driving avocado consumption through promotions and retailer collaborations, aligning with health-driven consumer trends [4] - AVO's competitive advantage lies in its integrated global platform, ensuring supply consistency and quality control through owned Peruvian orchards [5] - The company is diversifying its portfolio by expanding into blueberries and mangoes, targeting health-conscious consumers and investing in digital tools for market insights [6] - AVO's strong cash flow generation is highlighted by record adjusted EBITDA and over $180 million in operating cash flow, with leverage well below 1X EBITDA [7] Group 2: Dole plc (DOLE) - Dole is a diversified produce giant with quarterly revenues of $2.3 billion in Q3 2025, holding leadership positions across Europe, North America, and select global markets [8] - Although avocados are a small part of Dole's portfolio, the company is enhancing its avocado presence through investments in ripening facilities, particularly in Europe [9] - Dole's investment case is based on its multi-category portfolio and resilient business model, balancing staple products like bananas with innovative offerings [10] - The brand appeals to affordability-focused, health-conscious consumers, supported by operational investments in automation and logistics [11] - Key challenges for Dole include higher sourcing costs and weather-related supply disruptions, which have impacted margins in 2025 [12] Group 3: Financial Estimates and Valuation - The Zacks Consensus Estimate for AVO indicates declines of 10.2% in sales and 10.1% in EPS for fiscal 2025, with a projected increase in sales and earnings for fiscal 2026 [13] - For Dole, the 2025 sales estimate suggests a year-over-year growth of 7.6%, while EPS is expected to decline by 27.6%, with significant growth projected for 2026 [13] - AVO trades at a forward P/E multiple of 18.24X, below its 5-year median, while DOLE trades at a lower multiple of 9.81X, reflecting different growth prospects [22][24] - AVO's premium valuation indicates investor confidence in its growth potential, while Dole's lower multiple may attract value-focused investors [24][25] Group 4: Investment Appeal - Both companies are strong players in the fresh produce market, but their investment appeal differs, with Dole offering stability and valuation comfort for value-oriented investors [26] - AVO is favored for its strong EPS revision trend and growth outlook, particularly in the avocado category, making it a compelling choice for growth-focused investors [27]

Q3 2025 Financial Performance - Net sales reached $1022 million, while adjusted net sales were $960 million [16] - Gross profit was $81 million, with an adjusted gross profit of $88 million [16] - Adjusted operating income stood at $40 million, and adjusted FDP net income was $33 million [16] - Adjusted diluted EPS was $069, and adjusted EBITDA reached $58 million [16] - The company declared a dividend of $030 per share and executed share repurchases of 201,514 shares for $72 million [35] Segment Performance - Fresh and Value-Added Products: Net sales were $611 million, with adjusted net sales at $548 million compared to $551 million in the previous period [18, 19] Gross profit was $68 million, resulting in a gross margin of 112%, while adjusted gross profit was $76 million, yielding an adjusted gross margin of 139% [19] - Banana: Net sales were $358 million [24] Gross profit was $5 million, leading to a gross margin of 13%, while adjusted gross profit was $4 million, resulting in an adjusted gross margin of 12% [25] - Other Products & Services: Net sales were $53 million [29] Gross profit was $8 million, resulting in a gross profit margin of 148% [30] Financial Position - Long-term debt amounted to $234 million, with an adjusted leverage ratio of 033x [35] - Net cash provided by operating activities was $173 million, and capital spending was $36 million [35] Strategic Actions - The company signed an agreement to divest Mann Packing to focus on higher-margin products [13] - The company exited underperforming banana farms in the Philippines [13]

Core Insights - Mission Produce, Inc. (AVO) and Dole plc (DOLE) are leading players in the fresh produce market, each with distinct strategies and market focuses [1][3] - Mission Produce specializes in avocados, utilizing vertical integration and distribution networks, while Dole offers a diversified portfolio across various produce categories [2][8] Group 1: Mission Produce (AVO) - Mission Produce reported record revenues of $357.7 million in Q3 fiscal 2025, a 10% increase year-over-year, driven by a 10% rise in avocado volumes [4][29] - The company is expanding into adjacent categories like mangoes and blueberries, with blueberry production set to grow to over 1,000 hectares [5] - European sales surged by 37% in Q3, aided by the success of its U.K. facility, while investments in Asia are enhancing market access [6] - AVO maintains a lean balance sheet with a net debt-to-EBITDA ratio near 1X, allowing for further investments [7] - The Zacks Consensus Estimate for AVO's fiscal 2025 sales indicates a year-over-year growth of 12.1%, although EPS is expected to decline by 9.5% [13] Group 2: Dole plc (DOLE) - Dole generated $2.4 billion in revenues in Q2 2025, reflecting a 14.3% year-over-year increase, supported by strong demand for bananas, pineapples, and citrus [9][10] - The company streamlined operations by divesting its Fresh Vegetables division, focusing on core segments that delivered $72.7 million in adjusted EBITDA [10][12] - Dole's Diversified EMEA and Diversified Americas segments achieved EBITDA growth of 15% and 27%, respectively, highlighting its broad market reach [11] - The Zacks Consensus Estimate for Dole's fiscal 2025 sales suggests a year-over-year growth of 7%, but EPS is projected to decline by 18.9% [17] Group 3: Valuation and Performance Comparison - AVO trades at a forward P/E of 25.08X, while DOLE trades at a lower multiple of 10.42X, indicating a premium for AVO due to its growth profile [23][24] - Year-to-date, DOLE's stock performance has outpaced AVO, with a total return of 3.3% compared to AVO's decline of 15.2% [19] - AVO's valuation reflects its focused strategy and growth potential, while DOLE's lower multiple may attract value-oriented investors seeking stability [26][29]

Core Insights - Mission Produce, Inc. reported a 28% increase in revenue to $380.3 million for Q2 fiscal 2025, but gross profit fell by 8.3% to $28.4 million, indicating a margin squeeze due to supply challenges and unique costs [1][9] - The gross margin decreased to 7.5%, down 290 basis points year-over-year, primarily due to falling per-unit margins on avocados [1] - Management indicated that some pressures are situational rather than permanent, with sourcing adjustments helping to improve margins towards the end of the quarter [2] Financial Performance - Mission Produce's gross profit declined despite record revenue growth, highlighting vulnerabilities in its business model when supply dynamics tighten [1][9] - The company faced unique costs, including $1.1 million in tariffs and $1.5 million related to Canadian facility closures, which further pressured profitability [1] - The Zacks Consensus Estimate suggests a year-over-year earnings decline of 20.3% for both fiscal 2025 and 2026, with estimates remaining unchanged over the past week [11] Competitive Landscape - Mission Produce faces stiff competition from Dole Plc and Fresh Del Monte Produce Inc., both of which have demonstrated different margin dynamics [5] - Dole has maintained resilient margins despite sourcing and shipping challenges, benefiting from strong pricing and demand in key markets [6] - Fresh Del Monte's gross profit increased to $120.1 million, with a gross margin expansion to 10.2%, driven by strong demand for proprietary products [7] Market Dynamics - Avocado pricing and supply remain volatile, making Mission Produce reliant on global sourcing agility to protect margins [3] - The upcoming Peruvian harvest is expected to be significantly stronger than last year, which will be a critical test for margin normalization [4] - Mission Produce's stock has gained 15% over the last three months, outperforming the industry growth of 6.6% [8] Valuation Metrics - Mission Produce trades at a forward price-to-earnings ratio of 29.93X, which is significantly above the industry average of 14.86X [10]

Core Insights - The article compares Mission Produce, Inc. (AVO) and Dole plc (DOLE) in the fresh produce market, highlighting AVO's focus on avocados and DOLE's diversified portfolio [1][9] - AVO is expanding aggressively in response to rising avocado demand, particularly in Asia and Europe, while DOLE leverages its scale and diverse product range to maintain market dominance [2][10] Group 1: Company Strategies - Mission Produce has established a vertically integrated model that controls sourcing, ripening, distribution, and marketing, ensuring product quality and reliability [4][8] - AVO's geographic expansion and supply-chain agility are key strategies, with recent gains in Europe and the U.K. reflecting investments in local infrastructure [5][6] - Dole's strength lies in its diversification across various produce categories, allowing it to serve diverse consumer segments and remain resilient amid market fluctuations [11][13] Group 2: Financial Performance - AVO's fiscal 2025 sales are estimated to grow by 8.1%, but EPS is expected to decline by 20.3%, with annual sales and earnings projected to decrease by 8% and 20.3% year-over-year in fiscal 2026 [14] - Dole's fiscal 2025 sales are expected to grow by 1.8%, with EPS indicating a slight decline of 0.8%, while annual sales and earnings are projected to increase by 3.1% and 18.8% year-over-year in fiscal 2026 [14] Group 3: Valuation and Market Position - AVO trades at a forward P/E of 27.87X, significantly higher than DOLE's 9.93X, reflecting its higher growth positioning [10][21] - AVO's recent stock performance shows a total return of 16.1% over the past three months, outperforming DOLE's decline of 1.7% [19] - The valuation gap indicates that investors view AVO as a higher-growth, specialized business, while DOLE's lower multiple may appeal to value-focused investors [23][25] Group 4: Market Outlook - AVO is positioned for continued leadership in the avocado market and long-term growth in the broader fresh produce category, appealing to health-conscious consumers [8][26] - Dole remains a global heavyweight with impressive scale and stability, offering income-oriented appeal through dividends and a lower valuation [27][28]

Core Insights - Mission Produce, Inc. is strategically entering the mango category to diversify its offerings and leverage its successful avocado model, aiming to improve quality and consistency in a market that is currently underrepresented in North America [1][7] - The company plans to replicate its vertically integrated framework used in avocados, focusing on robust sourcing, efficient packing, and strong retail partnerships to position itself as a category builder in the mango market [2][7] - Mission Produce is optimistic about the growth potential for mangoes and complementary fruits like blueberries, driven by consumer preferences for healthy snacks and the company's ability to provide high-quality fruit year-round [3] Company Strategy - The mango program is in its early stages, but initial results are promising, with the company willing to absorb initial margin pressure as an investment for long-term market share gains [2][3] - The diversification strategy aims to stabilize financial performance against seasonal and geopolitical fluctuations, enhancing asset utilization across the supply chain [3] Peer Comparison - Calavo Growers, Inc. faces margin pressures due to limited diversification beyond avocados but is restructuring to improve efficiency and profitability [4] - Fresh Del Monte Produce Inc. benefits from a broader product mix and is investing in automation and sustainability to enhance operational efficiency [5] Market Performance - Mission Produce shares have gained 20.7% in the past month, outperforming the industry growth of 7.4% [6] - The company trades at a forward price-to-earnings ratio of 23.93X, significantly above the industry average of 16.58X [8] Earnings Estimates - The Zacks Consensus Estimate indicates a year-over-year decline of 20.3% in earnings for fiscal years 2025 and 2026 [9]

Financial Performance - Net sales decreased slightly to $1098 million from $1108 million in the prior year[22] - Gross profit increased to $92 million from $82 million in the prior year[23] - Adjusted operating income increased to $44 million from $31 million in the prior year[24] - Adjusted net income increased to $30 million from $16 million in the prior year[24] - Adjusted diluted EPS increased to $063 from $034 in the prior year[24] - Adjusted EBITDA increased to $61 million from $44 million in the prior year[24] Segment Performance - Fresh and value-added products gross margin increased to 101% from 83%[31] - Banana gross margin decreased to 46% from 57%[37] - Other products & services gross margin increased to 119% from 89%[39] Financial Position - Net cash provided by operating activities was $46 million compared to $19 million in the prior year[42] - Long-term debt was $233 million compared to $244 million at the end of the prior year[42] - Adjusted leverage ratio was 086x compared to 177x in the prior year[42] - Capital spending was $10 million compared to $13 million in the prior year[42] - Dividend declared was $030 per share compared to $025 per share in the prior year[42]

Financial Data and Key Metrics Changes - Net sales for Q1 2025 were $1.098 billion, down from $1.108 billion in the prior year, primarily due to lower banana segment sales volume and negative exchange rate fluctuations, partially offset by higher sales in fresh and value-added products [13] - Gross profit increased to $92 million from $82 million year-over-year, driven by higher sales in fresh and value-added segments, despite increased production and distribution costs [13][14] - Gross margin improved to 8.4% from 7.4% in the prior year, reflecting a sequential increase from 6.8% in Q4 2024 [14] - Adjusted EBITDA for Q1 2025 was $61 million, or 6% of net sales, compared to $44 million, or 4%, in the prior year [17] Business Line Data and Key Metrics Changes - Fresh and value-added products segment net sales were $683 million, up from $677 million, driven by higher selling prices in avocados and fresh cut fruits [17] - Banana segment net sales decreased to $364 million from $380 million, impacted by lower sales volume and prices in Asia and North America, along with negative exchange rate effects [19] - Other products and services segment net sales remained stable at $51 million, with gross profit increasing to $6 million from $5 million due to higher selling prices in poultry and meats [20][21] Market Data and Key Metrics Changes - Strong consumer interest in avocados and fresh cut fruits was noted, with these categories central to the company's long-term growth strategy [6] - The company is closely monitoring global production conditions and managing supply-demand imbalances, particularly in the pineapple category, where demand exceeds supply [5][6] Company Strategy and Development Direction - The company aims to lead the industry in fresh and value-added products, focusing on quality, innovation, and sustainability [10] - Strategic acquisition of a majority stake in Abolio, a leading avocado oil producer in Uganda, is expected to enhance supply chain efficiency and reduce waste [9] - The company is committed to diversifying its product portfolio and reducing reliance on any single market while investing in operational excellence and sustainability [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued solid demand for fresh produce, despite consumer pressures, and noted that market disruptions could present opportunities [32] - The company expects net sales to grow by 2% year-over-year for 2025, with gross margins projected to improve across various segments [26][27] - Management is closely monitoring tariff impacts and geopolitical developments but remains optimistic about the fundamentals of the business [25][27] Other Important Information - The company declared a quarterly cash dividend of $0.30 per share, representing a 3.5% yield based on the current share price [23] - Long-term debt decreased to $233 million, a 5% reduction from the previous fiscal year-end [23] Q&A Session Summary Question: Demand in the produce category - Management noted continuous solid demand in fresh produce, with no expected reductions in consumption, and highlighted potential opportunities arising from market disruptions [32] Question: Logistic issues in the industry - Management acknowledged that smaller operators are at a disadvantage due to logistical disruptions, while the company's integrated supply chain allows for operational flexibility [34][35] Question: Impact of tariffs on pricing - Management is working closely with buyers to mitigate tariff impacts without negatively affecting consumers [36] Question: Performance of avocado segment - The avocado segment is performing well, with diversification in sourcing from various countries, indicating growth potential [38] Question: Fresh cut fruit margins - Management expressed confidence in maintaining strong margins in the fresh cut fruit segment due to improved efficiency and sourcing [41] Question: Pineapple supply and demand - Management indicated that increasing consumption is driving demand for pineapples, which are currently in short supply relative to demand [44][45]