Dole plc

Welcome to the DoLE plc second quarter 2023 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 mode only. 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. You may now start the conference.

Thank you, Ellie. Welcome, everybody, and thank you for taking the time to join our second quarter 2023 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 will be referring to presentation slides, supplementary 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 Securities State 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. Welcome, everybody, and thank you all for joining us today as we discuss our second quarter results. So firstly, turning to slide six and the financial highlights of the second quarter. Well, following on from our good performance in the first quarter, we're very pleased to report that our second quarter performance was equally strong. We delivered revenue and adjusted EBITDA growth driven by strong performances in our fresh food and diversified fresh produce EMEA segments. Group revenue increased by 4.4%, driven by higher pricing. Adjusted EBITDA increased by 9.7% to $123 million, achieving an adjusted EBITDA margin of 5.7% compared to 5.5% in the second quarter of 2022. Adjusted diluted EPS decreased due to higher interest expense. While we continue to work through the regulatory process for the plant sale of the vegetables business, I'm also pleased to note that on an underlying basis, this division has continued to sustain the improved performance we saw in the first quarter, despite a challenging operating environment. Now turn to slide 8 for operational highlights. In our fresh food segment, we delivered a very strong result in Q2, driven by a significantly improved performance in our European operations and in our non-core markets, offset in part by the anticipated decline in commercial cargo profitability. As noted on our last call, 2022 was a challenging year in Europe, as we could not quickly pass on significant cost increases to customers due to instability in the marketplace following the start of the Ukraine war. Supply chain disruption is more prevalent in non-core markets in the second quarter of 2022, where significant market oversupply led to excess fruit moving into these markets at low prices. We are pleased that the healthier supply and demand balance in the first half of the year has both allowed for a better pricing environment in Europe and much improved selling conditions in non-core markets. However, it remains a challenge to continue to push pricing further to offset some of the inflationary pressures we have based in Europe. North America, our operations continue to perform well, despite intense competition in the marketplace. We were pleased to launch our golden selection plan up in the quarter, which was very well received by our customers and provides a strong base for further planned innovation within this category. As always, supply and demand dynamics in the banana market remain an important variable as we look out into the second half of 2023. Overall, we continue to see a good balance between supply and demand, tempered by an ongoing volatile macro environment. The onset of the El Nino climatic conditions can also have an impact on production. However, we believe that with our diverse sourcing base and our advanced farming practices that we are well-placed to deal with any challenges that could emerge. Our diversified EMA segment has continued its good momentum in 2023, delivering another quarter of strong EBITDA growth. Inflationary driven price increases are continuing to allow for good revenue growth across our markets. However, volumes remain impacted in certain markets as pricing has increased. We're managing our cost base while placing a strong focus on driving synergies across the segment and also taking advantage of bolt-on acquisition opportunities to support our growth plans. As anticipated in our Q1 call, we began to see improving FX comparison second quarter after a challenging hand win from FX translation over the last 12 months. While Q2 2023 exchange rates remain broadly in line with Q2 2022, we are now beginning to see more favourable comparisons to the second half of the year. Our Diversified America's Rest of the World segment has had a slow start to 2023, predominantly due to lower volumes across the segment and challenges faced in the berries category. Despite these challenges, our overall performance has remained satisfactory as we continue to see good pork performance in the North American potato and onions category, as well as seeing the benefit of some of the additional investments we made to support this segment. Looking ahead to the remainder of the year, we remain confident that the division will deliver a stronger second half than in 2022. With that, I'll hand over to Jacinta to take up the financial review.