FRESH DEL MONTE PRODUCE INC Q2 FY2025 earnings call

• Second quarter 2025 delivered strong performance with net sales up 4%, gross profit up 6%, and gross margin expanding to 10.2%.
• Growth reflects momentum in fresh-cut business and ongoing demand for pineapple portfolio, with consumers engaging more with pineapples as tropical fruit spend has risen 58% since 2017.
• Demand for pineapple portfolio remains strong, outpacing supply, with launches like Pinkglow in the United Arab Emirates. Also, advancing high-margin, value-added business ventures in residues and specialty ingredients.
• Managing disruptions at Port of Caldera in Costa Rica due to unusual ocean swirls, adjusting schedules and reallocating shipments. Addressing global banana shortage with R&D work on TR4 resistant gene additive banana lines.
• Declared a quarterly cash dividend of $0.30 per share payable on September 5, 2025

Fresh and Value-Added Product Segment

• Net sales for the second quarter: $723 million, an increase of 4% compared to last year. Driven by higher per unit selling prices in pineapple and fresh-cut fruit lines, favorable exchange rate fluctuations, and tariff-related price adjustments in North America. Partially offset by lower net sales in fresh-cut vegetable and vegetable lines. Gross profit: $85 million, up from $78 million in the prior year. Gross margin: 11.7% in the second quarter, compared with 11.2% in the prior year, and a sequential improvement from 10.1% in the first quarter.

Banana Segment

• Net sales for the second quarter: $410 million, an increase of 4% compared to last year. Driven by higher per unit selling prices across regions, favorable exchange rate fluctuations, and tariff-related price adjustments in North America. Partially offset by lower sales volume in Asia and North America due to crop disease. Gross profit: $30 million, in line with the prior year. Gross margin: 7.3% in the second quarter, compared with 7.6% in the prior year.

Other Products and Service Segment

• Net sales for the second quarter: $50 million, a slight decrease compared to last year due to lower per unit selling prices in poultry and meats business. Gross profit: $5 million, down from $6 million in the prior year. Gross margin: 10.4% in the second quarter, compared with 10.7% last year

• Full year 2025 outlook is broadly in line with first quarter call. Expect net sales growth 2% year-over-year.
• Fresh and value-added products segment gross margin expected to be in the range of 10% to 11%.
• Banana segment gross margin expected to be in the lower end of historical range of 5% to 7%.
• Other Products and Service segment gross margin expected to be in the range of 12% to 14%.
• CapEx spend revised to $70 million to $80 million, down from previous $80 million to $90 million.
• Noncash provided by operating activities expected to be in the range of $180 million to $190 million

• Disruptions at Port of Caldera in Costa Rica due to unusual ocean swirls leading to limited vessel access, higher costs, and logistical impact.
• Global banana shortage caused by shifting climate patterns leading to disease spread (Black Sigatoka, Fusarium wilt Tropical Race 4) affecting supply.
• Foreign exchange rate fluctuations impacting costs and revenues

Q: Could you give an update on pineapple supply over the next 6 months and into 2026?

A: Expect shortage of supply continuing into end of 2025 and 2026, with Fresh Del Monte seeing strong pineapple market ahead, especially with premium varieties. Starting production in Brazil in 2 - 3 years.

Q: What's the situation with Pinkglow supply?

A: Constrained by limited supply due to GMO issue and contamination risk in Costa Rica, granted to increase acreage, expecting more supply by end of 2026/early 2027. Also processing residues into frozen, juice, ice cream segments.

Q: Where is demand for fresh-cut fruit coming from?

A: Mainly on retail side, including convenience stores, global expansion with expertise and vertical integration. Fresh guacamole seeing over double-digit month-over-month growth Q: What about the vessels switch?

A: Selling two older vessels servicing Japan and Korea markets, replacing with container shipping, with North America options also on the table Q: Which companies are generating the $6 million equity earnings from unconsolidated companies?

A: Investments in friendly food industry funds, successful companies growing double digit