Dole plc

Hello, everyone. Welcome to the Dole PLC fourth quarter and full year 2023 earnings conference call and webcast. Today's conference is being recorded live over the internet and is also being recorded for playback purposes. Currently, all participants are in listen mode only. After the speaker's presentation, there will be 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. Please go ahead.

Thank you. Welcome, everybody, and thank you for taking the time to join our fourth quarter and full year 2023 earnings conference call and webcast. Joining me on the call today is our Chief Executive Officer, Rory Byrne, our Chief Operating Officer, Johan Linden, and our Chief Financial Officer, Jacinta Devine. During this call, we will be referring to presentation slides to supplement our remarks, and these, along with our earnings release and other related materials, are available on the investor relations section of our website. Please note, our remarks today will include certain forward-looking statements within the provisions of the Federal Securities 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 Laurie.

Thank you, James. Welcome, everybody, and thank you for joining us today as we discuss our results for the fourth quarter and the full year of 2023. Turning firstly to slide four and a recap of the key developments in 2023. Well, 2023 was a year of good progress and positive momentum for Dole PLC, with the business growing its position as the leading provider of fresh produce in the world. Across the group, there were many new initiatives and innovations to drive the business forward, We launched Dole Organics and the Go Organic brand in Europe, and this has been positively received by customers. Dole Organics complements the Dole Organic banana and pineapple offering already available across Europe and North America. We launched our premium golden selection pineapple during 2023, and this was very well received by all of our customers and provides a strong base for further planned innovation in this category. We continue to make good progress in consolidating our third-party shipping volumes and managing this key aspect of our operations efficiently. As interest rates remain high, we continue to focus on reducing leverage. During 2023, we realized significant value from the sale of non-core assets such as non-operational land in Hawaii, and out-of-service vessels. Altogether, we generated cash proceeds of some $84 million from the sale of non-productive assets, or almost a dollar a share in crystallized cash value. This, together with our strong free cash flow generation, contributed to a reduction in net leverage from 2.8 to 2.1 at the year end. Earlier this week, we announced an agreement to sell our 65% interest in Progressive Produce for gross cash proceeds of just under $120 million. We expect the net proceeds from this sale to be approximately $100 million. Progressive Business was a discrete part of the Diversified Americas and the rest of the world segment, and this realises a successful exit and an attractive valuation from our initial $30 million investment back in 2016. As announced, we will use the proceeds from this sale to reduce our leverage further. Now, turning to slide five and a recap of the financial highlights for 2023. We are pleased today to report very strong full-year results, achieving an adjusted EBITDA of $385 million for the full financial year, which outperformed our initial guidance for the year of $350 million by 10%. For the full year, group revenue increased by 2.8%, driven primarily by higher pricing. Adjusted EBITDA increased by 6.9%, achieving an adjusted EBITDA margin of 4.7% compared to 4.5% in 2022. This growth was driven by a strong performance in our diversified fresh produce EMEA segment and stable, consistent performances in both our fresh fruit and diversified fruit America segment. Adjusted diluted UPS was $1.24 for the full year compared to $1.44 in the prior year, with the reduction primarily due to higher year-on-year interest expense. As we continue to emphasize, efficient capital management and allocation are significant priorities for us. In this regard, we're really pleased with our strong cash generation, which led to a reduction in net debt of over 200 million at the end of 2023. Our success has been driven by a combination of factors such as good operating performance, a disciplined approach to capital investment, excellent working capital management, and as mentioned earlier, a strong year for the sale of non-core assets. Turning now to slide seven for our operational highlights and starting with our fresh food division. This segment delivered a robust performance for the year, with adjusted EBITDA up $209 million, which was approximately 2% ahead of 2022. In the fourth quarter, the segment faced an extremely strong 2022 comparative, and taking this into account, we were very pleased with the results delivered. Over the course of 2023, a key growth driver was a strong recovery in our European business after a challenging 2022, along with good profitability in our pineapple business, which has benefited from an improving supply-demand balance in the key Costa Rica growing region, as well as by the success of our golden selection pineapple in the marketplace. In North America, our operations are continuing to perform well, but did face challenges during the year with intense competition in the marketplace and lower commercial cargo profitability. We also had the impact of higher sourcing costs due to the combination of lower production volumes in many growing regions and currency pressures in certain sourcing countries. As always, supply and demand dynamics in the banana market, and to a lesser extent in the pineapple market, remain important variables for the year ahead. Weather is also an important variable on the supply side that we monitor, and with the new conditions increasingly being felt in the current banana production cycles, we are anticipating industry volumes to remain low in 2024. That said, we believe we're well prepared to handle this. Our strong and experienced management team are keenly focused on risk management, driving operational efficiencies, investing in projects which we anticipate will deliver sustainable growth and profitability. We believe that this approach, together with continuing to leverage our established and diverse sourcing infrastructure and customer base, will allow us to deliver another strong and consistent performance in 2024. Operationally, the business has continued... Excuse me. Sorry, turning to the diversified EMA division now. Our diversified EMA segment finished 2023 on a very strong note to round up an excellent performance in the full year. The segment delivered significant like-for-like growth in the quarter and full year, while benefiting further from improved currency rates. Revenue growth continues to be driven by higher pricing, more than offsetting volume declines across the segment. We continue to progress well in terms of driving synergies in the EMEA segment, as well as being attentive to internal investment and bolt-on acquisition opportunities that can support further expansion across the European marketplace. Overall, we anticipate continuing strong performance for our diversified EMEA segment in 2024, as we continue to leverage our strong market positions, operational integration and investment opportunities. Now on to diversified Americas. Our diversified America segments delivered consistent results in the fourth quarter to round out a solid four-year performance, despite facing some particular challenges during the year. Improved supply chain conditions for our South American export business have led to better operating results in this part of the segment in 2023, while robust performance in most of our North American operations have also contributed to a strong result However, the segment has been impacted by challenging performance in our North American berry business, and work continues to turn around the profitability of this segment. In the fourth quarter, El Nino-driven weather passions had notable impacts in both the timing and volumes of products being exported out of South America. while overall we're pleased that our business is navigating the volume challenge as well in the region, this year's variability illustrates the complexity of reporting full year numbers in some key business areas that have seasonal peaks close to financial reporting dates such as for example the Chilean cherry business. As we start into 2024 we remain focused on closing out the current South American export seasons for some of our important products with a strong performance and continuing that momentum to the rest of the year to deliver good growth for the year. Turning to our fresh vegetable segment. Unfortunately, the process of obtaining antitrust clearance is taking longer than we anticipated. We continue to engage with the Department of Justice, including exploring alternative agreements to address concerns raised. While we continue to believe that the agreement reached with Fresh Express is best for consumers, customers, suppliers, employees, and shareholders, the outcome remains uncertain. Operationally and importantly, this business has continued to see an improvement in its underlying performance. And with that, I'll hand you over to Jacinta to give the financial review for the fourth quarter.