We are a global branded food and beverage company that caters to today’s consumer needs for premium quality, healthy products.
The economic impact of Del Monte Pacific Group benefits more than our 5,600 regular employees. In addition, we have engaged service providers in all areas of our operations.
In the United States, Del Monte Foods is one of the largest producers, distributors and marketers of premium quality, branded food products for the US retail market. DMFI contracted with over 1,000 farmers across North America which supplied over 900,000 tonnes of produce in FY2018. 100% of the tomatoes, 99% of the vegetables and about 70% of the fruits we produce are grown in the US. Our relationships with farmers extend more than three generations. The fruits and vegetables are contractually grown on farms that collectively span over 28,300 hectares of land. Some Del Monte fruit growers include farm families that have produced for Del Monte for over 70 years. Our growth has a broader implication for farms across the United States.
Our pineapple plantation in the Philippines encompasses 10 municipalities in Bukidnon and seven towns in Misamis Oriental, Mindanao. We engage with over 50 supplier partners which provide various goods and services to the Company. An estimated 15,000 families or approximately 75,000 individuals directly or indirectly depend on the Company in southern Philippines.
Overall, our presence has immensely contributed to the region’s economic growth, creating a multiplier effect on the local economy by fueling local business, supporting the Group’s operations as well as serving day-to-day needs of our employees and their families.
“If you always do what you always did, you will always get what you always got.”
For FY2018, the Group generated sales of US$2.2 billion, down 2.5% from prior year on higher Philippines and S&W Asia sales offset by lower USA and Europe sales. The US business accounted for US$1.7 billion or over 75% of total sales. The Philippine business delivered record sales of US$333.8 million, up 7% in peso terms. S&W business in Asia generated record sales as well of US$106.1 million, up 6% from FY2017.
DMFI increased its market share in the US across key categories in retail, i.e. canned vegetables, canned fruits and fruit cup snacks driven by compelling innovations, strong execution against fundamentals at retail, and sustained marketing investment to support its brands. DMPI also maintained its dominant market position in the Philippines in categories it competes in.
DMPL generated a gross profit of US$432.5 million, lower by 13% versus prior year, as gross margin decreased to 19.7% from 22% last year. The Company generated an EBITDA of US$102.3 million, lower by 47.3%. Half of the decline was attributed to one-off expenses amounting to US$29.1 million after deducting one-off gains. Without the one-off expenses, the Group’s EBITDA would have been US$165.0 million, down 22% versus FY2017.
The Group generated a net loss of US$36.5 million for the full year FY2018, unfavourable versus prior year’s net income of US$24.4 million mainly due to one-off expenses of US$48.5 million post-tax. Excluding one-off expenses, the Group’s net income would have been US$12.0 million, lower versus the recurring net income last year of US$45.5 million mainly due to higher marketing investment in the USA to reinvigorate the business in line with the Group’s long-range plan, coupled with lower export sales and significantly reduced pineapple juice concentrate pricing.
In FY2018, the Group focused on three key areas – deleveraging the balance sheet, strengthening our core business and innovating products and processes.
The Group acknowledges the importance of building a strong partnership and healthy relationship with its suppliers. Accordingly, the Group conducts business with all customers on the basis of integrity, mutual interest and fairness. The Group prohibits the practice of forced and child labour.
In the United States, DMFI has a Supplier Code of Conduct that applies to any entity providing goods or services, including suppliers and subcontractors. The objective is for suppliers to practice and uphold ethical business standards. Del Monte’s Supplier Diversity Programme enables small and diverse businesses to be considered fairly as subcontractors and suppliers.
In selecting suppliers, Del Monte in the Philippines uses its Supplier Quality Management Programme (SQMP) which assesses the quality and delivery performance, feedback, recognition and continuous improvement programme for all direct materials suppliers and toll manufacturers.