Dole(DOLE) - 2021 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue more than doubled from $4.3 billion in 2020 to$9.3 billion in 2021 on a pro forma basis, marking a 113.7% increase [9][31] - Adjusted EBITDA increased from $251.5 million in 2020 to$393.6 million in 2021, a growth of 56.5% on a pro forma basis [9][31] - Total assets rose by 148% from $1.9 billion in 2020 to$4.7 billion in 2021 [10][31] - Adjusted EPS grew by 11.8% from $1.33 to$1.49 per share [12] Business Line Data and Key Metrics Changes - Fresh Fruit segment saw pro forma revenue increase by 2.9% for the full year, driven by higher banana and pineapple prices [35] - Diversified Fresh Produce-EMEA reported a pro forma revenue increase of 5.4% for the full year, supported by recovery in foodservice channels [37] - Fresh Vegetables experienced a pro forma revenue decrease of 8.5% in Q4 2021 due to a product recall, but full-year revenue increased by 1% [41] Market Data and Key Metrics Changes - The company is closely monitoring the impact of the war in Ukraine on the industry, although direct exposure is minimal [19] - The company anticipates foreign currency translation headwinds for the upcoming financial year due to a weakening of European currencies against the US dollar [38] Company Strategy and Development Direction - The company aims to rebuild profitability in the fresh vegetable segment and expand presence in faster-growing categories like berries and avocados [16][50] - Strategic priorities for 2022 include managing pricing in a complex economic environment and actively seeking value-enhancing M&A opportunities [16][51] - The company plans to finalize a new set of sustainability goals and publish an IFRS Sustainability Report [51] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating challenges such as supply chain pressures and cost inflation, attributing strong performance to a diverse product offering and geographic footprint [13][14] - The company expects a $25 million negative impact on adjusted EBITDA for 2022 due to the value-added salads product recall [46] - Management highlighted the uncertainty surrounding the geopolitical situation and its potential impact on trade flows and cost inflation [49] Other Important Information - The company announced a cash dividend of$0.08 per share for Q4 2021 [44] - Frank Davis, the CFO, will retire on June 30, 2022, with Jacinta Devine set to succeed him [53] Q&A Session Summary Question: How is the 2022 outlook framed considering the $25 million headwind from the salads business? - Management clarified that the$25 million impact is known, with additional uncertainty from FX translation and inflationary dynamics [55][56] Question: Can you provide more detail on revenue guidance and expected growth by segment? - Management stated that they do not break out guidance by segment but focus on profitability rather than revenue [61][62] Question: What is the expected impact of the value-added salad recalls on demand and customer relationships? - Management reported no significant impact on consumer behavior or major customer losses, with expectations to regain volume soon [70][72] Question: What opportunities exist for M&A in light of current market conditions? - Management indicated potential opportunities may arise from the geopolitical scenario, although public and private market valuations remain disconnected [76][77]