Dole plc

Welcome to the Dole PLC fourth quarter and full year 2022 earnings conference call and webcast. Today's conference is being broadcast live over the internet and is also being recorded for playback purposes. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. For opening remarks and introductions, I would like to turn the call over to the Head of Investor Relations with Dole PLC, James O'Regan.

Thank you. Welcome, everybody, and thank you for taking the time to join our fourth quarter and full year 2022 Earnings Conference call. Joining me on the call today is our Chief Executive Officer, Rory Byrne, our Chief Operating Officer, Joanne Linden, and our Chief Financial Officer, Jacinta Devine. During this call, we'll be referring to presentation slides and supplemental remarks, and these, along with our earnings release and other related materials, are available on the Investor Relations section of the Dole PLC website. Please note our remarks today will include certain forward-looking statements within the provisions of the Federal Security's Safe Harbor Law. These reflect circumstances at the time they are made, and the company expressly disclaims any obligation to update or revise any forward-looking statements. Actual results or outcomes may differ materially from those that may be expressed or implied due to a wide range of factors, including those set forth in our SEC filings and press releases. Information regarding the use of non-GAAP financial measures may be found in our press release, which also includes a reconciliation to the most comparable GAAP measures. With that, I'm pleased to turn today's call over to Rory.

Thank you, James, and welcome, everybody, and thank you for joining us today. Well, 2022 was the first full financial year for the group, following the completion of the merger of Total Produce and Dole Food Company and the subsequent IPO of Dole PLC in July 2021. The continued integration of the two legacy businesses was a key operational focus for us during 2022 and we're very pleased with the progress made. Starting out with the rebranding of our operations, we created the backdrop for one new combined entity under the iconic Dole brand. We launched Dole Exotics and the Be Exotic brand in Europe. The specialist division is dedicated to the growing, procurement, ripening and marketing of exotic produce such as avocados and mangoes. aligning with our strategy to focus our efforts in categories with strong growth potential. we released our first sustainability report as dole plc and set ambitious goals for the year for the near medium and long term these sustainability efforts were recognized by a number of industry bodies during 2022 the american costa rican chamber of commerce recognizes with the social responsibility and action award dole ireland was awarded the origin green gold accolade which is awarded to companies with exceptional annual performance on the sustainability target Post year end, we announced that we reached an agreement to sell our fresh vegetables division to Fresh Express for a gross consideration of approximately $293 million, concluding the strategic review for this division, which we undertook during 2022. We believe a combination with Fresh Express will improve the offering and service to customers and consumers through increased investment to innovation, efficiencies and food safety. I want to express my gratitude again to the dedicated employees and partners of the Dole Press Ledge for Business for their valuable contributions over the years and the support, in particular the management team, as we worked our way to reaching this agreement. Returning this division to profitability was a key focus for management last year and per se will allow us to focus on our core activities. We expect to use the net proceeds to reduce our debt, strengthen the financial position of the group and providing more flexibility to finance our future growth. So turning to slide seven on the fourth quarter financial highlights, we've delivered a very strong result for the fourth quarter, driven by particularly good performance in our fresh food segment. Group revenue increased by 4.7% and on a like-for-like basis, excluding the impact of foreign currency translation movements and M&A, it increased by 10.2%. Adjusted EBITDA increased by 21.7% to $74.4 million, driven by the strong performance in our fresh food solvent. This increase in adjusted EBITDA drove the increase in adjusted net income and adjusted diluted earnings per share. On slide eight, then, we recap the overall four-year performance. Against the backdrop of an unprecedented economic and operating environment, we are pleased with financial results for the year. Group revenue came in at $9.2 billion in line with the prior year on a pro forma basis and also in line with our guidance to the market. On a like-for-like basis, revenue increased by 5%. Price increases in response to inflation were the primary reason for this growth. Adjusted EBITDA of $338 million was in line with our guidance. The decrease year-on-year was primarily due to the loss incurred by fresh vegetables following a challenging year, along with the impact of negative farm currency movements. Our fresh food segment performed very strongly, taking advantage of its strong strategic asset base. Our diversified fresh produce segments also performed well in 2022, remaining agile in the face of challenges from supply chain disruptions, inflationary pressures, and economic uncertainty. So moving on to slide 10 for our operational highlights. Our fresh fruit division had a very positive end to the year and an excellent overall performance in 2022. North American and commercial cargo operations continue to perform very well with a healthy supply and demand balance in bananas and good shipping rates driving our performance. high shipping rates and adverse currency movements continue to impact our profitability, but were partially offset by an improved supply and demand balance in bananas, which allowed for better market pricing in Q4. Importantly, this dynamic has also extended to better contract pricing in Europe for 2023, as recent customer renewals have allowed for important cost variables to be reset to more sustainable levels for the industry. Overall, while supply and demand dynamics in the banana market remain an important variable for 2023, with our diverse sourcing base and leading customer portfolio, we believe we're well-placed to have a strong year. Our diversified EMEA segment continued to trade well on a like-for-like basis in Q4, while also benefiting from its extensive product and geographic diversity. Inflationary pressures and supply chain challenges continue to be apparent in certain markets, but overall our businesses continue to demonstrate the ability to price dynamically and provide consistent and high-quality service to our customers. Looking out to 2023, we continue to be encouraged by our success in managing supply chain complexity, and with our dynamic pricing model, we expect to have another consistent year. Our diversified America segments continue to be impacted by specific supply chain challenges in Q4, with disruptions impacting a number of products, particularly in apples and kiwis. More positively, our important Chilean cherry business has a strong start to its season, and our U.S. operations continue to perform well, particularly in products such as potatoes and onions. Overall, in 2022, the negative impact of supply chain disruptions on the export side of the business offset positive developments in the rest of this division. However, the scale and range of activities in our Diversifieds America segment still allow us to maintain a solid level of performance overall. A fourth quarter performance in fresh vegetables remained somewhat disappointing as the industry went through an exceptional period of supply shortages that led to significant increases in sourcing costs in Q4. Performance improved at the end of the quarter as supply began to improve and also as our turnaround plan began to deliver benefits. We remain focused on driving continued improvement in this business while it remains part of the group. Turning to slide 12 to look at our sustainability pilots in 2022. We published our first sustainability report as dual PLC, which set out our ambitious goals for the coming years. Summary of these goals is set out on page 13 of our presentation. We achieved a 4% reduction in our scope one and two emissions, a B rating for CDP carbon disclosures, and committed to the science-based target initiative. We continue to make investments in renewable energy sources as we transition from fossil fuels. Examples of this include the further development of solar panels to power facilities in Ireland, the addition of two wind turbines of manufacturing facilities in Salinas, and the addition of five new electric tractor rigs at the San Diego port terminal. Our business model remains driven by adding value to society by delivering on social investment, evidenced by our long track record in Latin America through the Dalai Foundation, promoting healthy nutrition to consumers, and finally, being a good steward of our natural resources like water, biodiversity, and so on. Detailed goals for emissions will be itemized during 2023 and submitted to SBTI to continue to focus on climate risk management Our second annual sustainability report will follow in the fourth quarter of 23. So with that, I'll hand you over to Jacinta to give the financial review.