Del Monte Corporation

Good day, everyone, and welcome to Fresh Del Monte Produce third quarter 2023 earnings conference call. Today's conference call is being broadcast live over the internet, and it's also being recorded for playback purposes. Ladies and gentlemen, I want to thank you for standing by. My name is Sherelle, and I will be your conference operator today. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. For those analysts who would like to ask a question during this time, simply press star, followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. For opening remarks and introductions, I would like to turn today's call over to the Vice President, Corporate Communications with Fresh Del Monte Produce, Claudia Poe. Please go ahead, Ms. Poe.

Thank you, Sheryl. Good morning, everyone, and thank you for joining our third quarter 2023 conference call. As Sheryl mentioned, I'm Claudia Poe, Vice President of Corporate Communications with Fresh Del Monte Produce. Joining me in today's discussion are Mohammed Upangazali, Chairman and Chief Executive Officer, and Monica Vicente, Senior Vice President and Chief Financial Officer. I hope that you've had a chance to review the press release that was issued earlier this morning via Business Wire. You may also visit the company's IR website at investorrelations.freshlamonte.com to access today's earnings materials and to register for future distributions. This conference call is being webcast live on our website and will be available for replay after this call. Please note that our press release and our call today include non-GAAP measures. Reconciliations of these non-GAAP financial measures are set forth in the press release and earnings presentation, which is available on our website. I would like to remind you that much of the information we'll be speaking to you today, including the answers we gave in response to your questions, may include forward-looking statements within the provisions of the Federal Securities Law's safe harbor. In today's press release and in our SEC filings, we detail material risks that may cause our future results to differ from these forward-looking statements. Our statements are as of today, November 1st, and we have no obligation to update any forward-looking statement we may make. During the call, we will provide a business update along with an overview of our third quarter and our nine-month 2023 financial results, followed by a question and answer section. With that, I am pleased to turn today's call over to Mr. Bugazali.

Thank you, Claudia. Good morning, everyone. We are pleased with our nine-month 2023 results. marked by more than 140 basis points improvement in adjusted gross margins, solid adjusted EBITDA, and year-over-year adjusted EPS growth. Our results were driven by our focus on operational excellence, leading logistical infrastructure, and continued improvements in efficiencies and sustainability practices. For the nine months, our adjusted EBITDA increased 14% to $201 million. And our adjusted diluted EPS increased 23% to $1.87. We achieved these strong nine-month results despite facing macroeconomic challenges such as inflationary pressures and escalating weather events. such as the floods in Greece, demonstrating our ability to run a profitable global enterprise in the face of large-scale challenges. The third quarter is seasonally our softest quarter. The headwinds this quarter were as follows. The September floods in Greece impacted our seasonal non-tropical product scanning facility, which resulted in $8.4 million of inventory write-offs. and clean-up costs. Global demand for our third-party ocean freight business softened, which caused a decrease in our other products and services segments. As a reminder, in the prior year, this segment benefited from elevated shipping rates and demand due to market logistical conditions. Now, for the highlights in the third quarter that partially offset these headwinds, Gross margin in the banana segment during the third quarter was up 250 basis points. Avocados turned around this quarter and were meaningful contributors thanks to increases in sales volumes, selling prices, and gross profits. Our continued solid adjusted EBITDA enables us to have numerous options for strong asset allocations. We continue to use our healthy cash flow to return value to shareholders through activities such as improving efficiencies, paying down debt, and continuing to deliver innovation-led new-to-market products. We also continue to look for ways to optimize our asset base to maximize our shareholder values. All these actions enable us to accomplish our mission of meeting the worldwide demand of getting consumers to eat healthier, fresh produce. We strive daily to achieve the mission by providing our offerings to consumers when and where they shop, and by partnering with other leading CPG companies that are looking to improve their healthy offerings and are looking to enter the fresh space, two areas where we are distributed leaders. Our Lunchables with Fresh Fruit partnership with Kraft Heinz continued and continues to test in the market. We announced a partnership with the global restaurant chain P.F. Chance. We unveiled two salad kits that allow consumers to enjoy the restaurant's most popular salad dishes in the comfort of their homes. The kits are available in select retailers across the U.S. with the potential to expand to Canada and the U.S. Tricont, our inland logistic solution, underwent a rebrand this year. which was made public in September. The new website and branding will help the third-party logistics provider enhance its customer experience and broaden its customer base on the heels of multi-year growth. We also became a part of the Upcycle Food Association, the organization that helps companies such as Fresh Del Monte find ways to maximize the use of our food waste. It is exciting to partner with the Upcycle Tool Association and find ways to upcycle our waste, which plays a role in Fresh Del Monte's long-term R&D and sustainability plans. We also launched our latest sustainability report two weeks ago. A few highlights include we reduced our Scope 1 and Scope 2 emissions by 26% compared to 2019 levels, bringing us 94 of the way towards our 2030 goal we reduced our food loss and organic waste by 41 percent in 2022 bringing us 82 percent of the way towards our 2030 goal and we donated approximately 53 000 tons metric tons of food to organizations that assist those in need and either composted or sold in legible waste to third parties to convert it into animal feed and biofuel. We are truly one of the world's leading vertically integrated producers, distributors, and marketers of fresh produce. We weave sustainability into all facets of our business while making fresh, healthy produce accessible worldwide. We have several initiatives at different stages with global CBG brands, similar to Kraft and P.F. Chance. In addition, we'll continue to push innovation forward, creating value for our consumers and our business. Quality programs for our popular Honey Glow and Pink Glow pineapples are being activated. We are close to launching a new pineapple variety that will be unique to Fresh Del Monte as we further cement our reputation as the leader in pineapple innovation. As always, our management team will continue to focus on enhancing long-term shareholder value by evaluating how to best leverage our experience in small farming, logistics, sustainability, and marketing, combined with our valuable portfolio of agricultural labs. With that, I would like to turn the call over to Monica, our CFO.