DEL MONTE PACIFIC LIMITED

12 September 2018

SGX-ST/PSE/MEDIA RELEASE: (unaudited results for the first quarter ending 31 July 2018)
Contacts:
Iggy Sison Jennifer Luy
Tel: +632 856 2888 Tel: +65 6594 0980
isison@delmontepacific.com jluy@delmontepacific.com

Del Monte Pacific Financial Results Announcement

Highlights

• The Group generated 1Q sales of US$437m, 8% lower than prior year quarter mainly
due to lower sales in the USA, in line with its US subsidiary (DMFI) strategy to
deprioritise non-profitable businesses

• The Group purchased US$99m of DMFI loans at a discount, which further lowered
Group debt, reduced interest expense and trimmed gearing to 2.5x equity from 3x in
prior year period

• As a result of the one-off gain from the purchase of DMFI loans, the Group reported a
net income of US$3m, higher than US$0.7m in the prior year quarter

Singapore/Manila, 12 September 2018 – Singapore Mainboard and Philippine Stock Exchange dual
listed Del Monte Pacific Limited (“DMPL” or the “Group”; Bloomberg: DELM SP, DELM PM) reported
today its first quarter FY2019 results ending July.

The Group generated first quarter sales of US$437.2 million, 8% lower than prior year quarter mainly
due to lower sales in the USA and lower exports of processed pineapple products.

DMFI contributed US$308.3 million or 71% of Group sales. DMFI sales declined by 8% due to lower
volume across categories, most significantly branded tomato products and private label, as well as
lower pricing in foodservice for pineapple juice concentrate (PJC). The decline in sales was in line with
DMFI’s strategy to deprioritise non-profitable businesses including private label.

The Group is on track with its innovation strategy. Following the success of Del Monte Fruit Refreshers

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and Del Monte Fruit & Chia, Del Monte Fruit & Oats was launched in the USA in June. Del Monte Fruit
& Oats combines healthy fruit and wholesome oats in a cup, is delicious and filling, as well as
convenient for breakfast and snack. Feedback from the trade has been encouraging.

The Group also entered new product categories for foodservice with Riced Cauliflower and other
vegetables with broadly positive industry reception. Del Monte Nice Fruit Fresh Frozen Pineapple had
also been placed at some regional chains in the USA.

With the Nice Fruit revolutionary technology, frozen pineapple, when thawed, has the same physical
properties as fresh cut pineapple.

DMFI’s market shares in canned vegetable and fruit, and fruit cup snack categories increased during
the quarter, driven by compelling innovations, strong execution against fundamentals at retail, and
sustained marketing investment to support its brands.

As part of its strategy to improve operational efficiency and profitability, DMFI divested its
underperforming Sager Creek vegetable business in FY2018. DMFI booked additional one-off
expenses of US$8.4 million in the first quarter of FY2019, mostly for Sager Creek.

Sales in the Philippines domestic market were flat in peso terms and down 5.3% in US dollar terms
due to peso depreciation. Key accounts in foodservice and retail beverage and culinary continued to
grow, offset by lower sales of packaged mixed fruits in retail due to excess trade inventory. DMPI
launched Del Monte Juice & Chews nationally, a snack-in-a-drink combining nata and pineapple with
fruit juice blends, a drink popular amongst teens. Foodservice sales in the Philippines remained strong,
riding on the rapid expansion of quick service restaurants and convenience stores with partnerships
and menu creation with major accounts.

Sales of the S&W business declined in the first quarter mainly due to lower sales in North Asia and
Turkey. Increased competition from cheaper canned pineapple products from Thailand and Indonesia
continued to impact S&W’s business. Turkey, on the other hand, was impacted by currency
devaluation and political instability. To diversify its business, the Group had introduced tomato and
pasta sauces from the Philippines into S&W’s Asian markets in FY2018. Despite lower sales, the S&W
business was able to deliver higher operating profit and a 5.5 ppt increase in operating margin due to
lower costs.

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The Group’s Nice Fruit joint venture in frozen pineapple successfully launched frozen pineapple spears
in Japan last June. These are produced in Bukidnon, Philippines. Individually packaged and known as
Pineapple Stick, it is available in about 70% of 7-Eleven outlets or about 14,000 stores in Japan. It is
positioned as an on-the-go healthy snack placed in the store’s chiller section, and has received good
feedback.

DMPL’s share in the FieldFresh joint venture in India for the first quarter was favourable at US$0.1
million profit, a significant improvement from the US$0.5 million loss in the prior year period, due to
higher Del Monte product sales and better margins.

The Group reported an EBITDA of US$18.8 million, versus prior year quarter’s EBITDA of US$32.2
million. Without the one-off expenses of US$8.4 million cited earlier, the Group’s EBITDA would have
been US$27.2 million.

The Group reported a net income of US$3.0 million, higher than US$0.7 million in the prior year
quarter as a result of the one-off gain from the purchase of DMFI loans at a discount in the secondary
market. Excluding one-off items of US$6.8 million post-tax, the Group would have incurred a net loss
of US$3.7 million versus a profit of US$1.2 million in the prior year period due to lower sales in USA,
lower exports of processed pineapple, significantly reduced PJC prices and higher product costs that
were partly offset by price increase in the Philippines and lower trade spend in the US.

Strengthening Balance Sheet

The Group continued to strengthen its balance sheet, and reduce leverage and interest expense in the
first quarter. In FY2018, DMPL purchased US$125.9 million out of the total US$260 million second lien
loans of DMFI at a discount in the secondary market. In the first quarter of FY2019, DMPL purchased
an additional US$99.1 million bringing the outstanding second lien loan balance to only US$35 million
on a DMPL consolidated basis. This loan purchase resulted in a one-off gain in the first quarter of
US$15.9 million pre-tax or US$12.5 million post-tax. This is the highest interest-bearing loan of the
Group, and will save DMPL more than US$10 million of interest payments in FY2019.

At the end of the financial year, the Group reduced its gearing to 2.5x equity as of 31 July 2018, from
3x in prior year period, primarily due to the US$100 million Preference Shares issued by DMPL in
December 2017 to raise equity and the purchase of DMFI loans at a discount in the past two quarters.

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As part of the Group’s deleveraging plan, subject to market conditions, DMPL plans to sell
approximately 20% of its stake in wholly-owned subsidiary Del Monte Philippines through a public
offering on the Philippine Stock Exchange. The IPO was deferred in June due to volatile market
conditions. The Company will announce when it relaunches this as the equity markets improve.

Prospects

The Group will continue to strengthen its core business and execute its innovation strategy. It will focus
on growing its branded business and reduce non-strategic, non-branded business segments. The
Group continues to review its manufacturing and distribution footprint in the US to improve operational
efficiency, further reduce costs and improve margins. It is committed to increase cash flow, strengthen
the balance sheet, and reduce leverage and interest expense.

Barring unforeseen circumstances, the DMPL Group is expected to be profitable in FY2019 on a

About Del Monte Pacific Limited (www.delmontepacific.com)

Dual listed on the Mainboards of the Singapore Exchange Securities Trading Limited and the Philippine Stock Exchange, Inc,
Del Monte Pacific Limited (Bloomberg: DELM SP/ DELM PM), together with its subsidiaries (the “Group”), is a global branded
food and beverage company that caters to today’s consumer needs for premium quality healthy products. The Group
innovates, produces, markets and distributes its products worldwide.

The Group is proud of its heritage brands - Del Monte, S&W, Contadina and College Inn – majority of which originated in the
USA more than 100 years ago as premium quality packaged food products. The Group has exclusive rights to use the Del
Monte trademarks for packaged products in the United States, South America, the Philippines, Indian subcontinent and
Myanmar, while for S&W, it owns it globally except Australia and New Zealand. The Group owns the Contadina and College
Inn trademarks in various countries.

DMPL’s USA subsidiary, Del Monte Foods, Inc (DMFI) (www.delmontefoods.com) owns other trademarks such as Fruit
Naturals, Orchard Select, SunFresh and Fruit Refreshers, while DMPL’s Philippines subsidiary, Del Monte Philippines, Inc
(www.delmontephil.com), has the trademark rights to Del Monte, Today’s, Fiesta, 202, Fit ‘n Right, Heart Smart, Bone Smart
and Quick ‘n Easy in the Philippines.

The Group sells packaged fruits, vegetable and tomato, sauces, condiments, pasta, broth and juices, under various brands
and also sells fresh pineapples under the S&W brand.

DMFI has joint ventures with Fresh Del Monte Produce Inc in chilled products – juices, packaged fruit, guacamole and
avocado, and Del Monte-branded retail food and beverage outlets.

The Group owns approximately 95% of a holding company that owns 50% of FieldFresh Foods Private Limited in India
(www.fieldfreshfoods.in). FieldFresh markets Del Monte-branded packaged products in the domestic market and FieldFresh-
branded fresh produce. The Group's partner in FieldFresh India is the well-respected Bharti Enterprises, which is one of the
largest conglomerates in India.

DMPL’s USA subsidiary operates 10 plants in the USA and two in Mexico, while its Philippines subsidiary operates the
world's largest fully-integrated pineapple operation with its 25,000-hectare pineapple plantation in the Philippines and a

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factory that is about an hour’s drive away. It also operates a beverage PET plant and a frozen fruit processing facility in the
Philippines.

Except the joint venture companies with Fresh Del Monte Produce Inc, DMPL and its subsidiaries are not affiliated with the
other Del Monte companies in the world, including Fresh Del Monte Produce Inc, Del Monte Canada, Del Monte Asia Pte Ltd
and these companies' affiliates.

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Disclaimer

This announcement may contain statements regarding the business of Del Monte Pacific Limited and its subsidiaries (the
“Group”) that are of a forward-looking nature and are therefore based on management’s assumptions about future
developments. Such forward-looking statements are typically identified by words such as ‘believe’, ‘estimate’, ‘intend’, ‘may’,
‘expect’, and ‘project’ and similar expressions as they relate to the Group. Forward-looking statements involve certain risks
and uncertainties as they relate to future events. Actual results may vary materially from those targeted, expected or
projected due to various factors.

Representative examples of these factors include (without limitation) general economic and business conditions, change in
business strategy or development plans, weather conditions, crop yields, service providers’ performance, production
efficiencies, input costs and availability, competition, shifts in customer demands and preferences, market acceptance of new
products, industry trends, and changes in government and environmental regulations. Such factors that may affect the
Group’s future financial results are detailed in the Annual Report. The reader is cautioned to not unduly rely on these forward-
looking statements.

Neither the Group nor its advisers and representatives shall have any liability whatsoever for any loss arising, whether directly
or indirectly, from any use or distribution of this announcement or its contents.

This announcement is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for
shares in Del Monte Pacific.