Del Monte Corporation

Good day and welcome to the Fresh Del Monte's Produce Second Quarter 2024 Earnings Conference Call. Today's conference call is being broadcast live over the internet and is also being recorded for playback purposes. 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. If you'd 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, again, press star and 1. For opening remarks and introductions, I would like to turn today's call over to Vice President, Investor Relations, with Fresh Del Monte Produce, Ms. Christine Connelly. Please go ahead, Ms. Connelly.

Thank you, Kayla. Good afternoon, everyone, and thank you for joining our second quarter 2024 conference call. Joining me today in today's discussion are Mr. Mohamed Abou Ghazali, Chairman and Chief Executive Officer, and Ms. Monica Vicente, Senior Vice President and Chief Financial Officer. I hope that you had a chance to review the press release that was issued earlier via BusinessWire. You may also visit the company's IR website at investorrelations.freshtownmonty.com to access today's earnings material 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 will be speaking to today, including the answers we give in response to your questions, may include forward-looking statements within the safe harbor provisions of the federal securities laws. In today's press release and in our SEC filings, we detail risks that may cause our future results to differ materially from these forward-looking statements. Our statements are, as of today, August 1st, and we have no obligation to update any forward-looking statements we may make. During the call, we will provide a business update along with an overview of our second quarter 2024 financial results, followed by a question and answer session. With that, I will turn today's call over to Mr. Muhammad Abu Ghazali. Please go ahead.

Thank you, Ms. Christine, and thank you for joining us for our second quarter 2024 ending results. Overall, we are pleased with our performance this quarter, especially in our fresh and value-added product segment, which includes our pineapples, fresh cut fruit, and avocados. For some time now, we have been saying that these higher margin categories Led by pineapples are our strength and the foundation of our growth strategy. We're pleased to say that our company focus in these areas is yielding positive results. During the second quarter 2024, we achieved significant margin improvements in the fresh and value added product segment. Gross margin for the segment was 11.2% for the quarter versus 9.2% from the prior year period, with net sales up $17 million in comparison to the same quarter last year. As one of the global leaders in pineapples, we continue to excel in this area and see increased demand for our new pineapple varieties. We have plans in place to continue growing production. Our pineapple volume growth projection over the next three years is at the compounded annual growth rate of 3%. Our strategy for our fresh and value added product segment continues to be top of mind. In Japan, We are optimizing our operations by consolidating two facilities into one. This strategic move aims to reduce operational costs and improve our margins. In Europe, we completed an expansion of our fresh cut facility in the UK, which optimized our efficiency and improved our gross margin for this market in the second quarter by over 60% year over year. We are actively working to grow our business at this facility, and in North America, we continue to expand our reach with large key customers. On average, we have seen business with five of our top 20 customers grow by more than 20% year to date versus last year. We also continue to expand our SKU list with recent innovations such as specialty foods, desserts, and on-the-go oats. Last quarter, we discussed our fresh guacamole, a product that fully leverages our vertical integration and one we believe has a lot of potential. We started a test run with this product in November 2023 with 640 units. Fast forward to today and we have sold more than 315,000 units in less than seven months. We expect that our unprecedented all-natural fresh guacamole will now be available in nearly 3,000 stores nationwide by the end of the summer, a significant expansion in just a few months since its launch. As such, we continue to expand production to keep up with the demand for this product. We are also pleased with our avocado program, which is showing remarkable potential. As one of the top avocado importers in the U.S., We see significant opportunities for further expansion in this category thanks to our robust infrastructure. Building on our commitment to harness the full potential of our growing operations, we are actively working on ways to maximize the full utilization of our fruit residues. To this end, we recently opened a biofertilizers plant in our Kenya operations. This innovative facility transforms residues and byproducts from our pineapple processing operations into biofertilizers. Initially, we plan to utilize this product within our Kenyan operations and eventually make it available to other growers in East Africa with aspirations to see its benefits ripple across our global footprint. This is part of our large strategy to focus on high-margin products. With that, I will turn it over to Monica to discuss our second quarter 2024 results in detail.