TIDMTOT
RNS Number : 2668Q
Total Produce Plc
25 February 2021
TOTAL PRODUCE PLC
2020 PRELIMINARY RESULTS
Total Produce records strong results in 2020
-- Very strong performance in 2020 in the context of the
unprecedented challenges posed by COVID-19 to the global
economy
-- The Group announced on 17 February 2021 an agreement to
combine with Dole Food Company Inc under a newly created US listed
company, Dole plc
-- Total revenue up 1.7% to EUR6.259 billion
-- Adjusted EBITDA up 8.2% to EUR219.4m
-- Adjusted EBITA up 9.4% to EUR164.2m
-- Adjusted profit before tax up 18.0% to EUR116.0m
-- Adjusted fully diluted EPS up 9.1% to 15.41 cent
-- The Group is in a strong financial position, net debt of EUR144.3m (2019: EUR221.2m)
-- 7.5% increase in 2020 final dividend to 2.770 cent per share
Commenting on the results, Carl McCann, Chairman, said:
"The Group has reported strong results in 2020. Revenue grew
1.7% to EUR6.3 billion with an 8.2% increase in adjusted EBITDA to
EUR219.4m and adjusted earnings per share increasing 9.1% to 15.41
cent. These strong results demonstrate the robustness of the
Group's business model in the face of the unprecedented challenges
posed by the ongoing COVID-19 pandemic. We are very proud of our
people worldwide. Their dedication, commitment and hard work
ensured the Group's supply chains and operations continue to
function and remain open across our key markets.
On 17 February 2021, the Group announced a binding deal with
Dole Food Company Inc to combine under a newly created US listed
company, Dole plc. Dole plc will be the number one player in fresh
produce with estimated combined revenues of almost US$10 billion,
adjusted EBITDA of approximately US$379 million and total assets of
approximately US$4.5 billion. The decision to list the new company
in the United States marks an exciting next step. The combined
company will become the largest player in fresh produce with a
highly diversified portfolio, resilient earnings and a strong
balance sheet that positions us well for accelerated growth. We
look forward to beginning this next chapter and providing increased
opportunity for our shareholders, dedicated employees, customers,
suppliers and partners.
The Group intends to pay a final dividend of 2.770 cent per
share representing an increase of 7.5%. Trading has been
satisfactory in early 2021".
25 February 2021
For further information, please contact:
Brian Bell, Wilson Hartnell PR - Tel: +353-1-669-0030, Mobile:
+353-87-243-6130
Unaudited
2020 2019
EUR'million EUR'million change
============================================= ============= ============= =======
Total revenue 6,259 6,153(1) +1.7%
Group revenue 3,818 3,729 +2.4%
Adjusted EBITDA 219.4 202.8 +8.2%
Adjusted EBITA 164.2 150.1 +9.4%
Operating profit before exceptional items 93.4 82.3 +13.5%
Operating profit after exceptional items 83.4 87.5 (4.7%)
Adjusted profit before tax 116.0 98.3 +18.0%
Profit before tax (after exceptional items) 73.5 76.5 (4.0%)
============================================= ============= ============= =======
(1) the Group's share of the 2019 revenue of Dole was restated.
See Note 3 of the accompanying financial information.
EUR'cent EUR'cent change
=========================================== ========= ========= ========
Adjusted fully diluted earnings per share 15.41 14.12 +9.1%
Basic earnings per share 10.40 13.72 (24.2%)
Diluted basic earnings per share 10.38 13.69 (24.2%)
Final dividend per share 2.770 2.5770 +7.5%
Total dividend per share 3.6829 3.4899 +5.5%
=========================================== ========= ========= ========
Overview
Total Produce (the 'Group') has delivered very strong results in
2020 against the backdrop of the unprecedented uncertainties and
challenges in the global marketplace arising from the prolonged
effects of the COVID-19 pandemic. The COVID-19 outbreak continues
to be an ongoing challenge for the Group and the wider fresh
produce industry. The health and wellbeing of our people is the
Group's number one priority while at the same time recognising the
vital role in continuing to keep the supply chains open and
supplying essential foodstuffs. The Group's strong presence in the
global fresh produce industry, the diversity of its operations and
products together with the exceptional response from our people
have enabled us to meet these challenges.
Total revenue grew 1.7% to EUR6,259m (2019: EUR6,153m), adjusted
EBITDA increased by 8.2% to EUR219.4m (2019: EUR202.8m) with
adjusted EBITA increasing 9.4% to EUR164.2m (2019: EUR150.1m). The
increase in revenue was due to robust retail and wholesale demand
offsetting reduced levels of activity in the food service sector.
The Group also benefitted from the contribution of bolt-on
acquisitions made in the past twelve months. Currency had a
marginally negative impact on the translation of the overall
results of foreign currency denominated operations to Euro due
principally to the weakening of the US Dollar and to a lessor
extent Sterling. On a like-for like basis excluding the impact of
acquisitions, divestments and currency translation, revenues were
circa 1% ahead of prior year with average price increases
offsetting a modest volume decrease. The strong growth in adjusted
EBITDA (8.2%) and adjusted EBITA (9.4%) was due to the robust
performance in the Eurozone (particularly in H2 of 2020), the
International and Dole divisions. This was partially offset by a
weaker performance in the Non-Eurozone division which has a
proportionally higher wholesale and direct food service
business.
Operating profit before exceptional items increased by 13.5% to
EUR93.4m (2019: EUR82.3m). The operating profit after exceptional
items was EUR83.4m (2019: EUR87.5m) with the decrease due to the
effect of exceptional items year on year. The 2019 prior year
included exceptional gains of EUR5.2m compared to a current year
charge of EUR10.0m, as discussed further in Note 5 of the
accompanying financial information.
Adjusted fully diluted earnings per share increased 9.1% to
15.41 cent (2019: 14.12 cent), due to the 9.4% increase in adjusted
EBITA and lower interest charges offset by higher non-controlling
interest charges.
Net debt at end of the year was EUR144.3m (2019: EUR221.2m) with
strong adjusted operating cashflow of EUR113.6m (2019: EUR59.4m)
due to strong earnings growth and working capital inflows of
EUR52.1m (2019: EUR6.6m). The working capital inflow was due to the
change in customer mix and tight working capital management. The
Group managed its liquidity by curtailing some non-essential
capital expenditure and discretionary costs. The Group is in a
strong financial position with significant financial capacity. The
Group is operating comfortably within its bank covenants and enjoys
the support of its banking partners.
The Group paid the 2020 interim dividend of 0.9129 cent per
share, unchanged on the prior year, on 29 January 2021.The Group
intends to pay a final dividend of 2.770 cent per share in May
2021, representing an increase of 7.5% on 2019. The total dividend
for 2020 will amount to 3.6829 (2019: 3.4899) cent per share and
represents an increase of 5.5% on 2019. The total dividend
represents a pay-out of almost 24% of the adjusted earnings per
share.
_______________________________________
Alternative performance measures 'APMs' The Group uses APMs,
which are non-IFRS measures to monitor financial performance. These
measures are referred to throughout the discussion of our reported
operating performance and financial position and are measures which
are regularly reviewed by Group management in assessing Group
performance. The APMs are defined together with calculations in
pages 33 to 36 of this statement.
Transaction to combine with Dole Food Company Inc and become
publicly listed in the US
On 17 February 2021, the Group, Dole Food Company, Inc.
('Dole'), and affiliates of Castle & Cooke, Inc. (the 'C&C
shareholders'), which own a 55% interest in Dole's parent company
('Dole Holdings') (together, the 'Parties'), announced that they
entered into a binding transaction agreement (the "Agreement") to
combine under a newly created, U.S. listed company ('Dole plc')
(the 'Transaction').
The Group had previously completed the acquisition of a 45%
interest in Dole on 31 July 2018 with options to acquire the
remaining 55% in future years.
The Transaction will simplify the existing structure between the
two companies by unifying Dole and Total Produce under common
ownership, with the objective of enabling full operational
integration, realisation of synergies and value creation across the
enlarged business. Under the terms of the Agreement, Total Produce
shareholders will receive 82.5% of Dole plc shares and the C&C
shareholders will receive 17.5% of Dole plc shares, in each case
based on the fully diluted outstanding shares immediately prior to
the completion of the Transaction.
Dole plc will be well positioned to deliver attractive long-term
growth and utilise its increased size and network to drive market
penetration and cross-selling. Dole plc will benefit from the
strength of the Dole brand to further expand its product offering
and pursue synergistic M&A in a fragmented and structurally
growing industry.
Dole plc will have a balanced geographic presence with an
extensive and diversified product portfolio, enhancing the overall
financial resilience of the business.
Per the Agreement, Dole plc's completion of an initial public
offering and a listing on a major U.S. stock exchange is a
condition for completion of the Transaction (the 'IPO'). In
connection with the Transaction, Dole plc intends to target raising
US$500 to US$700 million in primary equity capital to strengthen
and de-lever the combined balance sheet. Upon completion of the
U.S. listing of Dole plc, Total Produce will cease to be listed on
the Euronext Dublin and the London Stock Exchange.
Total Produce has secured fully committed debt facilities to
backstop and refinance all existing Total Produce and Dole debt
facilities upon completion of the Transaction, with the exception
of the Dole vessel financing and certain other bilateral facilities
which will remain post completion. Overall, this is expected to
provide for a stronger balance sheet with a well-termed out capital
structure, which is expected to enhance Dole plc's credit profile
and lower its average cost of capital going forward.
Dole plc, operating under the Dole brand, will be incorporated
in Ireland, with its Global Headquarters in Dublin, Ireland. Its
headquarters for the Americas will be in Charlotte, North
Carolina.
The highly regarded management teams of Total Produce and Dole,
with combined experience of over 150 years in the fresh produce
sector, will continue to operate the combined business.
The Transaction is subject to approval by Total Produce
shareholders, regulatory approvals, market conditions and customary
conditions.
Should the Transaction fail to complete for any reason the terms
of the Initial Dole Transaction remain in place and Total Produce
will continue to be listed on Euronext Dublin and the London Stock
Exchange.
The full terms of the Transaction are outlined in the Stock
Exchange announcement on 17 February 2021.
Operating Review
The table below details a segmental breakdown of the Group's
total revenue and adjusted EBITA for the year ended 31 December
2020. The European and International operating segments are
primarily involved in the procurement, marketing and distribution
of hundreds of lines of fresh fruit and vegetables. The Group's 45%
share of the results of Dole is included as a separate operating
segment. Dole is one of the world's leading fresh producers,
marketers and distributors of fresh fruit and vegetables, which
sell and distribute through a wide network in North America,
Europe, Latin America, the Middle East and Africa. Segment
performance is evaluated based on total revenue and adjusted
EBITA.
Unaudited 2020 2019**
Total Adjusted Total Adjusted
revenue EBITA revenue EBITA
EUR'000 EUR'000 EUR'000 EUR'000
======================= ========== ========= ========== =========
Europe - Non-Eurozone 1,499,299 39,390 1,481,657 41,913
Europe - Eurozone 1,687,370 28,708 1,661,446 20,477
International 1,295,949 26,012 1,271,566 22,284
Dole* (Group share) 1,843,402 70,128 1,801,299 65,440
Inter-segment revenue (66,522) - (62,874) -
======================= ========== ========= ========== =========
Total Group 6,259,498 164,238 6,153,094 150,114
======================= ========== ========= ========== =========
*Dole's financial year for 2020 commenced on 29 December 2019
and ended on 31 December 2020. The 2019 comparative period ran from
29 December 2018 to 28 December 2019. The Group's share of the
adjusted EBITA of Dole is after the deduction of the Group's share
of the non-controlling interests charge within Dole and an
allocation of a corporate overhead.
** The 2019 segmental comparatives have been restated to conform
with the current year's presentation. In addition, the Group's
share of the 2019 revenue of Dole was restated. See Note 3 of the
accompanying financial information.
Total revenue increased 1.7% to EUR6,259m (2019: EUR6,153m) with
robust demand from retailers and wholesalers offsetting reduced
levels of activity in the food service sector. Across the Group
companies modified sales strategies to further increase retail
focus and to source more produce to meet increased retail demand.
There was an increase in demand for the staple items, bananas,
potatoes, vegetables and produce with high vitamin C content
(citrus and kiwi fruit) with reduced demand for pineapples and
melons due to lower foodservice activity. The Group also benefitted
from bolt-on acquisitions made in the past twelve months. Currency
had a marginally negative impact on the translation of the overall
results of foreign currency denominated operations to Euro in the
year primarily due to the weakening of the US Dollar. On a like-for
like basis excluding the impact of acquisitions, divestments and
currency translation, revenues were circa 1% ahead of prior year
with average price increases offsetting a modest volume decrease.
Adjusted EBITA increased 9.4% to EUR164.2m (2019: EUR150.1m) due to
strong performance in the Eurozone (particularly in H2 of 2020),
the International and Dole divisions. This was partially offset by
a weaker performance in the Non-Eurozone division which has a
higher proportionate concentration of wholesale and direct food
service business.
Within the European and International divisions, there were
additional operating costs relating to COVID-19 such as employee
personal protective equipment and costs of additional shifts in
warehouses to comply with physical distancing. These additional
costs were offset by reductions in other costs such as travel
expenses. Within the Dole division certain one-off costs associated
with COVID-19 were incurred and classified as exceptional items.
The Group's 45% of these non-recurring COVID-19 costs were
EUR4.4m.
Europe - Non-Eurozone
This segment includes the Group's businesses in the Czech
Republic, Poland, Scandinavia and the UK. Revenue increased by 1.2%
to EUR1,499m (2019: EUR1,482m) helped by the incremental impact of
bolt-on acquisitions. Currency translation had a marginal negative
impact on revenue on translation to Euro with weaker Sterling
partially offset by a strong Swedish Krona. On a like-for-like
basis excluding acquisitions, divestments and current translation
revenue was circa 1% behind prior year with volume decreases offset
in part by average price increases. Volume decreases are due to
reduced demand in the food service sector in Scandinavia, the UK
and the Czech Republic as a result of restrictions imposed due to
COVID-19. This was offset by robust demand from retail, as well as
an element of organic growth. Adjusted EBITA decreased 6.0% to
EUR39.4m (2019: EUR41.9m) due to currency translation and an impact
on margin due to a change in sales channel.
Europe - Eurozone
This segment includes the Group's businesses in France, Ireland,
Italy, the Netherlands and Spain. Revenue increased by 1.6% to
EUR1,687m (2019: EUR1,661m). Excluding the effect of acquisitions
and divestments, revenue on a like-for-like basis was circa 1%
ahead of prior year with average price increases offsetting a
decrease in volumes. Throughout the Eurozone, robust retail and
wholesale demand offset lower demand from the food service sector.
Adjusted EBITA increased 40.2% to EUR28.7m (2019: EUR20.5m) with a
resilient performance across all divisions particularly Spain and
an overall much improved result in Holland. The Dutch horticultural
division remained challenged with disappointing performance in
vegetables offset by good results in the second half of the year
from sales of local soft fruit and deciduous product. The Group
recorded strong performance particularly in the second half of the
year in its import business helped by solid results in its mango,
citrus, ginger and avocado lines.
International
This division includes the Group's businesses in North America,
South America and India. Revenue increased by 1.9% to EUR1,296m
(2019: EUR1,272m). Currency negatively impacted on translation of
the results to Euro due to the weakening of US Dollar and Canadian
Dollar by 1.9% and 3.3% respectively. This was partially offset by
the benefit of an increase in the shareholding in a joint venture
which is now treated as a subsidiary. On a like-for-like basis
excluding the effects of currency and acquisitions, revenue
increased circa 3% due to average price increases with volumes
marginally behind the prior year. The International division is
largely retail focussed. There was an increase in demand for the
staple items of potatoes, vegetables, citrus as well as kiwifruit.
The impact of COVID-19 in the first half of the year saw a reduced
demand for more expensive product and produce with a shorter shelf
life. Revenue strengthened in second half of the year particularly
with stronger pricing in certain product lines and good volumes
from new product sources. Adjusted EBITA increased 16.7% to
EUR26.0m (2019: EUR22.3m) with improved margins, lower operating
costs (primarily travel related), the benefit of a joint venture
becoming a subsidiary offset in part by the negative impact on the
translation of the results of US Dollar and Canadian Dollar
denominated earnings to Euro.
Dole
This segment includes the Group's share of the results of Dole.
The Group is equity accounting for its 45%
share of the results of Dole on an IFRS basis.
Dole's 2020 financial year was from 29 December 2019 to 31
December 2020 and for 2019 was from 29 December 2018 to 28 December
2019. Dole's o verall business is seasonal, with the greater share
of adjusted EBITA earned in the f irst half of the financial year.
As Dole is vertically integrated its operations are sensitive to a
number of factors including weather related phenomena and the
effects on industry volumes, prices, produce quality and growing
costs.
Trading in Dole was good in the context of a challenging global
environment due to COVID-19 and is benchmarked against a strong
comparative year in the Fresh Vegetable division for some produce
categories. On an IFRS basis, Dole has recorded 2020 revenues of
$4,672m ( EUR4,096m) up 3.5% on 2019 revenue of $4,516m
(EUR4,003m). Adjusted EBITDA in 2020 of $259.2m (EUR230.6m) was
5.8% ahead of prior year result of $245.0m (EUR217.2m) with
adjusted EBITA of $184.6m (EUR164.2m) 6.2% ahead when compared to
$173.8m (EUR154.0m) recorded in the prior year.
The Fresh Fruit division (bananas and pineapples) remained
strong and ahead of the prior period with higher banana volumes in
Latin America and North America offset by some lower European
volumes. The results in this division benefitted from lower fuel
prices and some general cost efficiencies. This was offset by a
general decrease in pineapple pricing due to the impact of COVID-19
on the food service sector.
Results in Fresh Vegetables were ahead of the prior period
despite being benchmarked against a very strong comparative period
in some categories. The results from value-added operations were
significantly ahead of 2019 with favourable volumes and pricing
helped by the launch of new product types and the change in product
mix from a move to more premium products. The division also
benefitted from cost saving initiatives implemented in recent
years.
The Diversified division performed satisfactorily in the period.
The results were helped by solid results in citrus and berries
while results in Chile were impacted by timing differences in the
crop harvest cycle of cherries as well as lower grape volumes due
to drought.
Within the Dole segment, certain one-off charges associated with
COVID-19 including costs of double shifts, protective equipment and
additional transport were incurred and classified as exceptional
items. These costs amounted to $10.8m (EUR9.6m) and primarily
related to the Fresh Vegetable division.
Total Produce's 45% share of 2020 revenue was EUR1,843m (2019:
EUR1,801m) and its share of adjusted EBITA was EUR70.1m (2019:
EUR65.4m).
Further details on the financial performance and position of
Dole for the year ended 31 December 2020 are outlined in Note 7 of
the accompanying financial information.
Financial Review
Revenue and adjusted EBITA
An analysis of the factors influencing the changes in revenue
and adjusted EBITA are discussed earlier in the operating
review.
Share of profits of joint ventures - Dole
The Group's share of the after-tax profits of Dole in 2020
amounted to EUR21.3m (2019: EUR19.3m) before exceptional items. The
increase is due to higher EBITA as noted earlier in the operating
review offset in part by lower interest costs due to a decrease in
the US LIBOR rate in 2020. The Group's share of exceptional items
in 2020 was a EUR5.9m charge compared to a EUR7.0m gain in 2019.
The gain in 2019 was primarily due to the gain on the sale of a
European salad business. Further information on exceptional items
are detailed in Note 5 of the accompanying financial information.
Post exceptional items the Group's share of after-tax profits was
EUR15.4m (2019: EUR26.4m). Further details of the performance of
Dole and its financial position at the end of the year is outlined
in the operating review and in Note 7 of the accompanying financial
information.
Share of profits of joint ventures and associates - excluding
Dole
Excluding the contribution from Dole the share of after-tax
profits of joint ventures and associates increased in 2020 to
EUR13.0m (2019: EUR11.3m). Dividends declared from joint ventures
and associates in 2020 amounted to EUR12.5m (2019: EUR11.1m) with
EUR11.3m (2019: EUR10.7m) received in cash reflecting the Group's
continued focus on the cash contributions from these
investments.
Intangible asset amortisation
Acquisition related intangible asset amortisation within
subsidiaries amounted to EUR10.1m (2019: EUR10.3m). The share of
intangible asset amortisation within joint ventures and associates
was EUR2.5m (2019: EUR2.7m).
Exceptional items
Exceptional items in the year, net of tax amounted to a net
charge of EUR10.9m (2019: EUR5.2m gain). The net charge in 2020
primarily relates to the Group's EUR5.9m share of the net charge
within Dole (due primarily to exceptional COVID-19 costs and
unrealised losses on foreign currency denominated intercompany
borrowings). The Group also incurred a non-cash goodwill impairment
charge of EUR3.5m and a property impairment charge of EUR1.1m. In
2019 the net gain primarily related to the Group's EUR7.0m share of
the net gain within Dole on sale of a European salad business
offset in part by Group restructuring charges. A full analysis of
exceptional items for both 2020 and 2019 are set out in Note 5 of
the accompanying financial information and have been excluded from
the calculation of the adjusted numbers.
Operating profit
Operating profit before exceptional items increased by 13.5% to
EUR93.4m (2019: EUR82.3m) due to earnings growth in the Eurozone
and International divisions as well as an increase in the Group's
share of earnings in Dole. Including exceptional items, operating
profit decreased to EUR83.4m (2019: increased to EUR87.5m) with the
decrease due to the effect of exceptional items year on year. The
prior year included exceptional gains of EUR5.2m compared to a
current year charge of EUR10.0m before tax. As noted earlier, a
full analysis of exceptional items for both 2020 and 2019 are set
out in Note 5 of the accompanying financial information.
Net financial expense
Net financial expense in the year decreased to EUR9.9m (2019:
EUR11.0m) primarily due to the fall in US LIBOR rates and lower
average net debt in the year.
The Group's share of the net interest expense of joint ventures
and associates in 2020 was EUR38.3m (2019: EUR40.8m) with the
decrease due to Group's share of a lower interest charge in Dole
due to reduction in US LIBOR rates in the year.
Profit before tax
Excluding acquisition related intangible asset amortisation
charges and costs, fair value movements on contingent consideration
and share of joint venture interest and tax which is netted in
profit before tax in the statutory income statement, the adjusted
profit before tax increased by 18.0% to EUR116.0m (2019: EUR98.3m)
with the benefit of the increase in the adjusted EBITA and the
effect of lower interest charges. Statutory profit before tax after
these items was EUR73.5m (2019: EUR76.5m) with the decrease due to
the impact of exceptional items year on year. As noted earlier,
there was a net exceptional charge of EUR10.0m before tax (2019:
net gain of EUR5.2m).
Taxation
The adjusted tax charge for 2020, including the Group's share of
joint ventures and associates' tax and before non-trading items as
set out on page 34 of the accompanying financial information was
EUR36.4m (2019: EUR27.9m) representing an underlying effective tax
rate of 31.4% (2019: 28.0%) when applied to the Group's adjusted
profit before tax.
Non-controlling interests
The non-controlling interests' share of after-tax profits in the
year was EUR16.4m (2019: EUR12.9m). Included in this was the
non-controlling interests' share of the net charge on exceptional
items, amortisation charges and acquisition related costs (net of
tax) of EUR3.3m (2019: EUR2.9m). Excluding these non-trading items,
the non-controlling interests' share of adjusted after tax profits
was EUR19.7m (2019: EUR15.8m) with the EUR3.9m increase due to
higher non-controlling interests' share of earnings in certain
non-wholly owned companies in Europe and North America.
Adjusted and basic earnings per share
Adjusted fully diluted earnings per share increased 9.1% to
15.41 cent (2019: 14.12 cent) due to the strong increase in
adjusted EBITA in the year, lower interest charges offset by the
increase in the non-controlling interest charge noted earlier.
Management believes that adjusted fully diluted earnings per
share, which excludes acquisition related intangible asset
amortisation charges and costs, fair value movements on contingent
consideration, unrealised gains or losses on derivative financial
instruments, gains and losses on foreign currency denominated
intercompany borrowings, exceptional items and the related tax on
these items, provides a fairer reflection of the underlying trading
performance of the Group.
Basic earnings per share and diluted earnings per share after
these non-trading items amounted to 10.40 cent per share (2019:
13.72 cent) and 10.38 cent per share (2019: 13.69 cent)
respectively. The decrease on the prior year is due to the
exceptional one-off gains in 2019 compared to the 2020 exceptional
charges as noted earlier.
Note 6 of the accompanying financial information provide details
of the calculation of the respective earnings per share
amounts.
Cashflow and net debt
Net debt (which excludes lease liabilities) at 31 December 2020
of EUR144.3m decreased on the prior year balance of EUR221.2m.
Average net debt for year was EUR224.1m (2019: EUR284.0m). In
addition, the Group has non-recourse trade receivables financing of
EUR47.0m on 31 December 2020 (2019: EUR46.4m). The decrease in net
debt on the prior year was primarily due to strong operating
cashflows in 2020 and working capital inflows during the year as
explained below.
The Group generated adjusted operating cashflows in the year of
EUR61.5m (2019: EUR52.8m) with the increase due to the strong
earnings growth. There was a positive working capital inflow of
EUR52.1m (2019: EUR6.6m) primarily from the impact of a change in
customer mix on receivables days and continued tight working
capital management. In addition, there were initiatives and actions
taken by the Group to protect the business and mitigate cash
outflows due to COVID-19 with a deferral of some non-essential
capital expenditure and curtailment of discretionary costs.
Cash outflows on routine capital expenditure, net of disposals,
were lower at EUR15.4m (2019: EUR19.0m) due to the deferral of some
non-essential capital expenditure. Dividends received from joint
ventures and associates in the year were EUR11.3m (2019: EUR10.7m)
representing the Group's continued focus on cash returns from these
investments. Dividends paid to non-controlling interests were
EUR20.5m (2019: EUR16.1m) with the increase due to higher earnings
in subsidiaries with non-controlling interests.
Free cashflow generated by the Group was EUR89.0m (2019:
EUR35.0m) with the increase due to higher earnings and the improved
working capital inflow during the year. Free cashflow is the
measure of the funds available after outflows relating to routine
capital expenditure, dividends to non-controlling interests but
before acquisition related expenditure, non-routine capital
expenditure and the payment of dividends to equity shareholders of
the Group.
Cash inflows from exceptional items were EUR0.8m (2019:
EUR5.8m). Cash inflows from disposals net of acquisitions amounted
to EUR1.5m (2019: EUR14.5m outflow) with proceeds from disposals of
equity investments in the year offset by the costs of some bolt-on
acquisitions primarily in the Eurozone. Payments relating to put
option liabilities and contingent and deferred consideration
relating to prior year acquisitions were EUR10.6m (2019: EUR11.1m).
Payments for non-routine property and plant additions amounted to
EUR4.2m (2019: EUR4.5m). Dividends paid to equity shareholders were
EUR10.0m (2019: EUR13.3m) with the decrease due to the deferral of
the 2020 interim dividend of EUR3.5m to January 2021. At 31
December 2020, there was a EUR11.4m gain (2019: EUR2.7m loss) on
the translation of foreign currency denominated net debt to Euro
due primarily to the weaker US Dollar and Sterling exchange rates
prevailing at year end offset in part by the stronger Swedish
Krona.
Unaudited
2020 2019
EUR'million EUR'million
====================================================================== ============ ============
Adjusted EBITDA (1) 219.4 202.8
Deduct adjusted EBITDA of joint ventures and associates (128.8) (121.1)
Net financial expense and tax paid (27.2) (26.3)
Other (1.9) (2.6)
====================================================================== ============ ============
Adjusted operating cashflows before working capital movements 61.5 52.8
Working capital movements 52.1 6.6
====================================================================== ============ ============
Adjusted operating cashflows (1) 113.6 59.4
Routine capital expenditure net of routine disposal proceeds (1) (15.4) (19.0)
Dividends received from joint ventures and associates 11.3 10.7
Dividends paid to non-controlling interests (20.5) (16.1)
====================================================================== ============ ============
Free cashflow (1) 89.0 35.0
Cashflows from exceptional items 0.8 5.8
Cashflow receipts/(payments) from acquisitions, net of disposals (1) 1.5 (14.5)
Net (debt)/cash assumed on acquisition of subsidiaries (1.0) 2.1
Contingent, and deferred consideration and put options payments (10.6) (11.1)
Non-routine capital expenditure (4.2) (4.5)
Dividends paid to equity shareholders (10.0) (13.3)
Other - 0.1
====================================================================== ============ ============
Total net debt movement in year 65.5 (0.4)
Net debt (1) at beginning of year (221.2) (219.7)
Finance leases reclassified to lease liabilities - 1.6
Foreign currency translation 11.4 (2.7)
====================================================================== ============ ============
Net debt (1) at end of year (144.3) (221.2)
====================================================================== ============ ============
(1) The APMs are defined together with calculations in pages 33
to 36 of this statement
Liquidity
It has always been the policy of the Group to have adequate
facilities available providing the Group with sufficient headroom
in addition to the flexibility to take advantage of opportunities
to develop the business. As the pandemic hit global markets in
mid-March, the Group took a number of steps to protect its
liquidity and financial position. As described earlier, the Group
postponed or deferred some non-essential capital expenditure and
discretionary costs.
In 2020, the Group increased the tenor of its corporate
borrowing facilities and provided additional headroom including the
renewal of a three-year private placement facility of US$66m
(EUR54m). This allows the Group to draw down long term funding for
periods of up to twelve years. The Group has approved committed and
uncommitted bank borrowings of up to EUR583m at 31 December 2020
(2019: EUR623m) in addition to approved overdrafts of EUR115m
(2019: EUR109m). At 31 December 2020, the Group has utilised 39% of
these facilities (2019: 46%). In addition, at 31 December 2020 the
Group has cash and deposit balances of EUR131m (2019: EUR116m).
Post year end, in conjunction with the combination with Dole and
the initial public offering and listing of Dole plc as described
earlier, the Group has secured a committed debt facility with a
term of five years to backstop and refinance certain existing Total
Produce facilities in advance of the completion of the Transaction.
In the event that the Transaction does not complete, this committed
financing shall remain in place in the Total Produce Group.
Defined benefit pension obligations
The net liability of the Group's defined benefit pension schemes
(net of deferred tax) was EUR14.3m on 31 December 2020 (2019:
EUR9.3m). The increase in the liability was due to a decrease in
the Eurozone and UK discount rates which increases the net present
value of scheme obligations. This was offset by an average return
of 7.5% on pension scheme assets in 2020. Other post-employment
benefit obligations increased to EUR6.6m at 31 December 2020 (31
December 2019: EUR5.9m).
Shareholders' equity
Shareholders' equity increased by EUR7.5m in year to EUR458.6m.
The increase was due to profit after tax of EUR40.4m attributable
to equity shareholders. This was offset primarily by currency
translation loss of EUR21.7m on the retranslation of the net assets
of foreign currency denominated operations into Euro (primarily due
to weaker US Dollar and Sterling) and remeasurement losses of
EUR6.8m (net of deferred tax) on post-employment benefit
schemes.
Development Activity
The Group made some bolt-on acquisitions in 2020, investments in
existing joint ventures as well as acquisition of additional shares
in non-wholly owned subsidiaries. The investments were in the
Eurozone and International divisions and included the acquisition
of additional shares in Eco Farms, a company based in California in
the United States that specialises in avocados. This resulted in
Eco Farms being consolidated as a subsidiary of the Group. The
initial 45% interest was treated as a joint venture up to April
2020.
The total committed investment in the year was EUR5.8m including
EUR0.6m contingent consideration payable on the achievement of
future profit targets. The total investment included EUR3.6m
related to the acquisition of the remaining shares in a subsidiary
that were subject to a put and call option.
Dividends
The 2019 final dividend of 2.5770 was paid on 2 September 2020.
The payment of the 2020 interim dividend of 0.9129 cent per share
(which was unchanged on prior year) was paid post year-end on 29
January 2021.
The Group intends to pay a final dividend of 2.770 cent per
share in May 2021 representing a 7.5% increase on 2019. The total
dividend for 2020 will amount to 3.6829 (2019: 3.4899) cent per
share and represents an increase of 5.5% on 2019. The total
dividend represents a pay-out of almost 24% of the adjusted
earnings per share.
Post Balance Sheet Events
The payment of the 2020 interim dividend of 0.9129 cent per
share was paid post year-end on 29 January 2021. The total dividend
amounted to EUR3,549,000.
On 17 February 2021, the Group and Dole Food Company Inc and
affiliates of Castle & Cooke, Inc. (the "C&C
shareholders"), which own a 55% interest in Dole's parent company
("Dole Holdings") (together, the "Parties"), announced that they
entered into a binding transaction agreement (the "Agreement") to
combine under a newly created, U.S. listed company ("Dole plc")
(the "Transaction"). Further details are outlined on page 3 and in
the Stock Exchange announcement on 17 February 2021. The Group has
secured a committed debt facility with a term of 5 years to
backstop and refinance certain existing Total Produce facilities in
advance of the completion of the Transaction. In the event that the
Transaction does not complete this committed financing shall remain
in place in the Total Produce Group.
Environmental, Social and Governance (ESG)
In Total Produce we are privileged to market the most nutritious
of foods with the lowest environmental impact. Committed to
transparency and the adherence to best agronomic and sustainable
practices across our operations, our journey towards becoming an
ever more sustainable business is ongoing. Having invested in solar
power installations in Brazil and the Netherlands in late 2020 and
early 2021, the group's UK operations completed the transition to
100% 'Deep Green' renewable electric energy sources to power its
twenty four business units across Great Britain in February 2021.
Part of "Vision 20/25", Total Produce's company-wide initiative
dedicated to measuring and reducing carbon consumption throughout
the group internationally, which has delivered an 18% reduction in
group carbon emissions since 2018. This transition is expected to
deliver a 20% reduction in TPUK's Co2 emissions throughout 2021 and
beyond.
The adoption of renewable energy in the UK follows the launch in
December 2020 of the group's sustainability website;
www.totalproduce.com/sustainability. Dedicated to detailing
Environmental, Ethical & Social and Economic practices across
Total Produce, the site is a user friendly, central online resource
through which stakeholders can download and review all of the
content available in the Total Produce Sustainability Report. It
further outlines the Group's approach to sustainability, its
strategy, internal processes, targets and accomplishments to date
alongside the policies, protocols and procedures are in place and
up to date news on sustainability initiatives taking place across
the Group.
In November 2020 Total Produce's commitment to best sustainable
practices was recognised with the award of the prestigious Origin
Green Gold standard, the only Irish fruit company to receive this
accolade. Dedicated to recognising excellence in sustainability
practices, Origin Green is operated by Bord Bia, the Irish Food
Board. At its heart lies a comprehensive programme based on the
setting of ambitious sustainability related targets and ongoing
performance measurement.
Brexit and International Trade
The UK exited the European Union ('Brexit') in January 2021
after an 11-month transition period. It is still too early to
assess the long-term implications of the UK departure from EU on
the global fresh produce industry. Brexit committees set up in
relevant areas of the business continue to monitor and assess the
risks and opportunities from Brexit and have taken actions where
appropriate. For example, the Group had ensured that product is
transported directly from mainland Europe primarily Spain, France
and Holland to avoid the UK land bridge.
COVID-19 Outbreak
Since the outbreak of COVID-19 all parts of our business have
continued to work tirelessly to safely supply fresh produce to our
customers. It is due to the efforts of our people that we have been
able to join frontline workers and help feed consumers. The health
and safety of all colleagues across the business is at the
forefront of our thinking with the introduction of safe working
practices. We have participated in helping local communities
including supplying food packages to frontline healthcare workers,
providing fruit to those in need, loaning vehicles to transport
meals to the homeless and donating fresh produce to local food
banks.
Going Concern
The Directors have reviewed forecasts and projected cashflows
for a period not less than 12 months from the date of these
financial statements. Consumer demand for fresh produce has
remained robust through the pandemic and this is expected to
continue. As highlighted earlier, when the pandemic hit in
mid-March 2020, the Group took a number of steps to protect its
liquidity and financial position. The Group has also increased the
tenor of its corporate borrowing facilities providing additional
comfort. Taking all these factors into consideration, the Directors
are satisfied that the Group has adequate resources to continue in
operational existence for the foreseeable future. Accordingly, they
have adopted the going concern basis in preparing the financial
statements.
Board Changes
Frank Gernon, Executive Director, and Jerome Kennedy,
Non-Executive retired as Directors on 31 March 2020. On 1 December
2020, the Group announced that Seamus Taaffe had indicated his
intention to retire as a Non-Executive Director and formally
retired on 5 January 2021. The Board currently comprises of five
independent Non-Executive Directors and three Executive
Directors.
Frank has been an integral part of our Group for over 45 years
and has served as an Executive Director of Total Produce since
2007. His outstanding service, dedication and accomplishments have
been invaluable. During his tenure he has played a key role in the
stewardship and development of the Group.
Jerome has served as a Non-executive Director on the Board and
its Committees since the formation of Total Produce Plc. The Group
has benefitted greatly from his business acumen, professionalism
and wise counsel over the years.
Seamus joined the Board as Non-Executive Director in 2012 and
the Group has benefitted greatly from his experience and guidance
over the years.
I join the Board in extending to Frank, Jerome and Seamus our
sincerest appreciation for their dedication and commitment. Their
valuable contributions have added greatly to the success of Total
Produce. We wish them the very best for the future.
Summary and Outlook
The Group has reported strong results in 2020. Revenue grew 1.7%
to EUR6.3 billion with an 8.2% increase in adjusted EBITDA to
EUR219.4m and adjusted earnings per share increasing 9.1% to 15.41
cent. These strong results demonstrate the robustness of the
Group's business model in the face of the unprecedented challenges
posed by the ongoing COVID-19 pandemic. We are very proud of our
people worldwide. Their dedication, commitment and hard work
ensured the Group's supply chains and operations continue to
function and remain open across our key markets.
On 17 February 2021, the Group announced a binding deal with
Dole Food Company Inc to combine under a newly created US listed
company, Dole plc. Dole plc will be the number one player in fresh
produce with estimated combined revenues of almost US$10 billion,
adjusted EBITDA of approximately US$379 million and total assets of
approximately US$4.5 billion. The decision to list the new company
in the United States marks an exciting next step. The combined
company will become the largest player in fresh produce with a
highly diversified portfolio, resilient earnings and a strong
balance sheet that positions us well for accelerated growth. We
look forward to beginning this next chapter and providing increased
opportunity for our shareholders, dedicated employees, customers,
suppliers and partners.
The Group intends to pay a final dividend of 2.770 cent per
share representing an increase of 7.5%. Trading has been
satisfactory in early 2021.
Carl McCann, Chairman
On behalf of the Board
25 February 2021
Forward-looking statement
Any forward-looking statements made in this announcement have
been made in good faith based on the information available as of
the date of this announcement and are not guarantees of future
performance. Actual results or developments may differ materially
from the expectations expressed or implied in these statements, and
the Company undertakes no obligation to update any such statements
whether as a result of new information, future events, or
otherwise. Total Produce's Annual Report contains and identifies
important factors that could cause these developments or the
Company's actual results to differ materially from those expressed
or implied in these forward-looking statements.
Group Income Statement
for the year ended 31 December 2020
Unaudited
Unaudited Exceptional items Unaudited
Before exceptional items (Note 5) Total Before exceptional items Exceptional items Total
2020 2020 2020 2019 (Note 5) 2019 2019
Note EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
================= ===== ========================== =================== ============ ========================= ================== ============
Group revenue 3 3,817,585 - 3,817,585 3,729,346 - 3,729,346
Cost of sales (3,283,008) - (3,283,008) (3,212,057) - (3,212,057)
================= ===== ========================== =================== ============ ========================= ================== ============
Gross profit 534,577 - 534,577 517,289 - 517,289
Operating
expenses (net) (465,338) (4,062) (469,400) (455,371) (1,816) (457,187)
Share of profit
of joint
ventures - Dole 7 21,292 (5,908) 15,384 19,327 7,048 26,375
Share of profit
of joint
ventures -
Other 12,051 - 12,051 10,658 - 10,658
Share of profit
of associates 954 - 954 666 - 666
================= ===== ========================== =================== ============ ========================= ================== ============
Operating profit
before
acquisition
related
intangible
asset
amortisation 103,536 (9,970) 93,566 92,569 5,232 97,801
Acquisition
related
intangible
asset
amortisation (10,144) - (10,144) (10,301) - (10,301)
================= ===== ========================== =================== ============ ========================= ================== ============
Operating profit
after
acquisition
related
intangible
asset
amortisation 93,392 (9,970) 83,422 82,268 5,232 87,500
Financial income 2,287 - 2,287 2,754 - 2,754
Financial
expense (12,211) - (12,211) (13,721) - (13,721)
================= ===== ========================== =================== ============ ========================= ================== ============
Profit before
tax 83,468 (9,970) 73,498 71,301 5,232 76,533
Income tax
expense (15,798) (916) (16,714) (10,282) (47) (10,329)
================= ===== ========================== =================== ============ ========================= ================== ============
Profit for the
year 67,670 (10,886) 56,784 61,019 5,185 66,204
================= ===== ========================== =================== ============ ========================= ================== ============
Attributable to:
Equity holders
of the parent 40,412 53,302
Non-controlling
interests 16,372 12,902
================= ===== ========================== =================== ============ ========================= ================== ============
56,784 66,204
================= ===== ========================== =================== ============ ========================= ================== ============
Earnings per
ordinary share
Basic 6 10.40 13.72
Fully diluted 6 10.38 13.69
================= ===== ========================== =================== ============ ========================= ================== ============
Group Statement of Comprehensive Income
for the year ended 31 December 2020
Unaudited
2020 2019
EUR'000 EUR'000
============================================================================== ========== =========
Profit for the year 56,784 66,204
=============================================================================== ========== =========
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation effects:
- foreign currency net investments - subsidiaries (20,176) 5,664
- foreign currency net investments - joint ventures and associates (17,681) 3,274
- foreign currency borrowings designated as net investment hedges 10,896 (3,397)
Effective portion of changes in fair value of cashflow hedges, net (465) (149)
Changes in fair value of cost of hedging, net of recycling (91) 137
Deferred tax on items above 130 (9)
Share of joint ventures and associates effective portion of cashflow hedges (1,723) (5,101)
Share of joint ventures and associates deferred tax on items above 440 497
=============================================================================== ========== =========
(28,670) 916
============================================================================== ========== =========
Items that will not be reclassified to profit or loss:
Remeasurement loss on employee benefit schemes (9,003) (3,009)
Revaluation gain on property, plant and equipment, net 11,440 2,095
Deferred tax on items above (94) (966)
Share of joint ventures gain on revaluation of property, plant and equipment 1,176 1,369
Share of joint ventures gain/(loss) on employee benefit schemes 429 (2,601)
Share of joint ventures deferred tax on items above (110) (75)
=============================================================================== ========== =========
3,838 (3,187)
============================================================================== ========== =========
Other comprehensive expense for the year (24,832) (2,271)
=============================================================================== ========== =========
Total comprehensive income for the year 31,952 63,933
=============================================================================== ========== =========
Attributable to:
Equity holders of the parent 21,506 49,417
Non-controlling interests 10,446 14,516
=============================================================================== ========== =========
31,952 63,933
============================================================================== ========== =========
Group Balance Sheet
as at 31 December 2020
Unaudited
2020 2019
EUR'000 EUR'000
=========================================================== ========== ==========
Assets
Non-current
Property, plant and equipment 185,686 175,485
Right of use assets 119,242 113,032
Investment property 15,015 11,843
Goodwill and intangible assets 245,241 268,462
Investments in joint ventures and associates - Dole 265,744 264,893
Investments in joint ventures and associates - Other 96,677 104,050
Other investments 331 2,743
Other receivables 19,143 19,796
Deferred tax assets 18,514 13,497
============================================================ ========== ==========
Total non-current assets 965,593 973,801
============================================================ ========== ==========
Current
Inventories 111,962 98,031
Biological assets 2,895 3,965
Trade and other receivables 347,372 380,791
Other investments - 2,306
Corporation tax receivables 2,394 2,439
Derivative financial instruments 4,083 4,489
Cash and cash equivalents 130,863 115,529
============================================================ ========== ==========
Total current assets 599,569 607,550
============================================================ ========== ==========
Total assets 1,565,162 1,581,351
============================================================ ========== ==========
Equity
Share capital 4,107 4,105
Share premium 295,619 295,487
Other reserves (148,203) (131,309)
Retained earnings 307,079 282,816
============================================================ ========== ==========
Total equity attributable to equity holders of the parent 458,602 451,099
Non-controlling interests 92,704 98,768
============================================================ ========== ==========
Total equity 551,306 549,867
============================================================ ========== ==========
Liabilities
Non-current
Interest-bearing loans and borrowings 250,416 250,572
Lease liabilities 106,188 99,770
Other payables 2,468 2,904
Contingent consideration and other provisions 5,401 7,957
Put option liability 13,443 23,083
Corporation tax payable 6,179 6,541
Deferred tax liabilities 31,601 27,731
Employee benefits 23,966 16,736
============================================================ ========== ==========
Total non-current liabilities 439,662 435,294
============================================================ ========== ==========
Current
Interest-bearing loans and borrowings 24,740 86,150
Lease liabilities 19,207 20,306
Trade and other payables 511,261 475,202
Contingent consideration and other provisions 5,109 8,534
Put option liability 10,829 3,529
Derivative financial instruments 937 305
Corporation tax payable 2,111 2,164
============================================================ ========== ==========
Total current liabilities 574,194 596,190
============================================================ ========== ==========
Total liabilities 1,013,856 1,031,484
============================================================ ========== ==========
Total liabilities and equity 1,565,162 1,581,351
============================================================ ========== ==========
Group Statement of Changes in Equity
for the year ended 31 December 2020 (unaudited)
Attributable to equity holders of the parent
Own Currency Other
Share Share Undenom-inated shares translation Reval-uation equity Retained Non-controlling Total
capital premium capital reserve reserve reserve reserves* earnings Total interests equity
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
================= ======== ======== =============== ======== ============ ============= ========== ========= ========= ================ =========
Balance at 1
January 2020 as
presented in
the Balance
Sheet 4,105 295,487 140 (8,580) (18,699) 30,809 (134,979) 282,816 451,099 98,768 549,867
================= ======== ======== =============== ======== ============ ============= ========== ========= ========= ================ =========
Adjust for NCI
subject to put
option
transferred for
presentation
purposes - - - - - - (16,038) - (16,038) 16,038 -
================= ======== ======== =============== ======== ============ ============= ========== ========= ========= ================ =========
As at 1 January
2020 4,105 295,487 140 (8,580) (18,699) 30,809 (151,017) 282,816 435,061 114,806 549,867
================= ======== ======== =============== ======== ============ ============= ========== ========= ========= ================ =========
Comprehensive
income
Profit for the
year - - - - - - - 40,412 40,412 16,372 56,784
Other
comprehensive
income:
Items that may
be reclassified
subsequently to
profit or loss:
Foreign currency
translation
effects, net - - - - (21,652) - 446 - (21,206) (5,755) (26,961)
Effective
portion of
cashflow
hedges, net of
recycling - - - - - - (325) - (325) (140) (465)
Changes in fair
value of cost
of hedging, net
of recycling - - - - - - (68) - (68) (23) (91)
Deferred tax on
items above - - - - - - 84 - 84 46 130
Share of joint
ventures and
associates
effective
portion of
cashflow hedges - - - - - - (1,723) - (1,723) - (1,723)
Share of joint
ventures and
associates
deferred tax on
cashflow hedges - - - - - - 440 - 440 - 440
Items that will
not be
reclassified
subsequently to
profit or loss:
Revaluation gain
on property,
plant and
equipment, net - - - - - 11,222 - - 11,222 218 11,440
Remeasurement
loss on
employee
benefit schemes - - - - - - - (8,692) (8,692) (311) (9,003)
Deferred tax on
items above - - - - - (2,025) - 1,892 (133) 39 (94)
Share of joint
ventures
remeasurement
gain on
employee
pension schemes - - - - - - - 429 429 - 429
Share of joint
ventures
revaluation
gains on
property, plant
and equipment - - - - - 1,176 - - 1,176 - 1,176
Share of joint
ventures
deferred tax on
items above - - - - - - - (110) (110) - (110)
================= ======== ======== =============== ======== ============ ============= ========== ========= ========= ================ =========
Total other
comprehensive
income - - - - (21,652) 10,373 (1,146) (6,481) (18,906) (5,926) (24,832)
================= ======== ======== =============== ======== ============ ============= ========== ========= ========= ================ =========
Total
comprehensive
income - - - - (21,652) 10,373 (1,146) 33,931 21,506 10,446 31,952
================= ======== ======== =============== ======== ============ ============= ========== ========= ========= ================ =========
Transactions
with equity
holders of the
parent
New shares
issued 2 132 - - - - (41) 41 134 - 134
Non-controlling
interest
arising on
acquisition of
subsidiaries - - - - - - - - - 1,928 1,928
Put option
liability
exercised - - - - - - 3,568 332 3,900 (3,900) -
Fair value
movement on put
option
liability - - - - - - (1,228) - (1,228) - (1,228)
Acquisition of
non-controlling
interests - - - - - - - (74) (74) (922) (996)
Disposal of
shareholding to
non-controlling
interest - - - - - - - 45 45 240 285
Dividends paid - - - - - - - (10,012) (10,012) (20,510) (30,522)
Share-based
payment
transactions - - - - - - (114) - (114) - (114)
================= ======== ======== =============== ======== ============ ============= ========== ========= ========= ================ =========
Total
transactions
with equity
holders of the
parent 2 132 - - - - 2,185 (9,668) (7,349) (23,164) (30,513)
================= ======== ======== =============== ======== ============ ============= ========== ========= ========= ================ =========
As at 31
December 2020 4,107 295,619 140 (8,580) (40,351) 41,182 (149,978) 307,079 449,218 102,088 551,306
================= ======== ======== =============== ======== ============ ============= ========== ========= ========= ================ =========
Transfer of NCI
subject to put
option for
presentation
purposes - - - - - - 9,384 - 9,384 (9,384) -
================= ======== ======== =============== ======== ============ ============= ========== ========= ========= ================ =========
B alance at 31
December 2020
as presented in
the Balance
Sheet 4,107 295,619 140 (8,580) (40,351) 41,182 (140,594) 307,079 458,602 92,704 551,306
================= ======== ======== =============== ======== ============ ============= ========== ========= ========= ================ =========
(1) Other equity reserves comprise the demerger reserve, share
option reserve, cashflow hedge reserve, cost of hedging reserve and
the put option reserve.
Group Statement of Changes in Equity
for the year ended 31 December 2019
Attributable to equity holders of the parent
Own Currency Other
Share Share Undenomi-nated share translation Revaluation equity Retained Non-controlling Total
capital premium capital reserve reserve reserve reserves(1) earnings Total interests equity
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
================ ======= ======= ============== ======= =========== =========== =========== ======== ======== =============== ========
Balance at 1
January 2019 as
presented in
the Balance
Sheet 4,104 295,421 140 (8,580) (22,721) 28,336 (120,232) 256,654 433,122 82,483 515,605
================ ======= ======= ============== ======= =========== =========== =========== ======== ======== =============== ========
Adjust for
impact of
transition to
IFRS 16, net of
tax - - - - 159 - - (6,937) (6,778) (1,337) (8,115)
================ ======= ======= ============== ======= =========== =========== =========== ======== ======== =============== ========
Balance at 1
January 2019 4,104 295,421 140 (8,580) (22,562) 28,336 (120,232) 249,717 426,344 81,146 507,490
================ ======= ======= ============== ======= =========== =========== =========== ======== ======== =============== ========
Adjust for
transfer of NCI
subject to put
option for
presentation
purposes - - - - - - (34,673) - (34,673) 34,673 -
================ ======= ======= ============== ======= =========== =========== =========== ======== ======== =============== ========
As at 1 January
2019 4,104 295,421 140 (8,580) (22,562) 28,336 (154,905) 249,717 391,671 115,819 507,490
================ ======= ======= ============== ======= =========== =========== =========== ======== ======== =============== ========
Comprehensive
income
Profit for the
year - - - - - - - 53,302 53,302 12,902 66,204
Other
comprehensive
income
Items that may
be reclassified
subsequently to
profit or loss:
Foreign currency
translation
effects, net - - - - 3,863 - 33 - 3,896 1,645 5,541
Effective
portion of
cashflow
hedges, net of
recycling - - - - - - (148) - (148) (1) (149)
Changes in fair
value of cost
of hedging, net
of recycling - - - - - - 155 - 155 (18) 137
Deferred tax on
items above - - - - - - - - - (9) (9)
Share of joint
ventures and
associates
effective
portion of
cashflow hedges - - - - - - (5,101) - (5,101) - (5,101)
Share of joint
ventures and
associates
deferred tax on
cashflow hedges - - - - - - 497 - 497 - 497
Items that will
not be
reclassified
subsequently to
profit or loss:
Revaluation gain
on property,
plant and
equipment, net - - - - - 1,624 - - 1,624 471 2,095
Remeasurement
loss on
employee
benefit schemes - - - - - - - (2,955) (2,955) (54) (3,009)
Deferred tax on
items above - - - - - (520) - (26) (546) (420) (966)
Share of joint
ventures
remeasurement
loss on
employee
pension schemes - - - - - - - (2,601) (2,601) - (2,601)
Share of joint
ventures
revaluation
gains on
property, plant
and equipment - - - - - 1,369 - - 1,369 - 1,369
Share of joint
ventures
deferred tax on
items above - - - - - - - (75) (75) - (75)
================ ======= ======= ============== ======= =========== =========== =========== ======== ======== =============== ========
Total other
comprehensive
income - - - - 3,863 2,473 (4,564) (5,657) (3,885) 1,614 (2,271)
================ ======= ======= ============== ======= =========== =========== =========== ======== ======== =============== ========
Total
comprehensive
income - - - - 3,863 2,473 (4,564) 47,645 49,417 14,516 63,933
================ ======= ======= ============== ======= =========== =========== =========== ======== ======== =============== ========
Transactions
with equity
holders of the
parent
New shares
issued 1 66 - - - - (20) 20 67 - 67
Non-controlling
interest
arising on
acquisition of
subsidiaries - - - - - - - - - 959 959
Put option
liability
extinguished - - - - - - 11,657 - 11,657 - 11,657
Fair value
movement on put
option
liability - - - - - - (3,294) - (3,294) - (3,294)
Acquisition of
non-controlling
interests - - - - - - - (1,102) (1,102) (554) (1,656)
Acquisition of
non-controlling
interests by a
joint venture - - - - - - - (151) (151) - (151)
Disposal of
subsidiary - - - - - - - - - 121 121
Dividends paid - - - - - - - (13,313) (13,313) (16,055) (29,368)
Share-based
payment
transactions - - - - - - 109 - 109 - 109
Total
transactions
with equity
holders of the
parent 1 66 - - - - 8,452 (14,546) (6,027) (15,529) (21,556)
================ ======= ======= ============== ======= =========== =========== =========== ========
As at 31
December 2019 4,105 295,487 140 (8,580) (18,699) 30,809 (151,017) 282,816 435,061 114,806 549,867
================ ======= ======= ============== ======= =========== =========== =========== ======== ======== =============== ========
Transfer of NCI
subject to put
option for
presentation
purposes - - - - - - 16,038 - 16,038 (16,038) -
================ ======= ======= ============== ======= =========== =========== =========== ======== ======== =============== ========
Balance at 31
December 2019
as presented in
the Balance
Sheet 4,105 295,487 140 (8,580) (18,699) 30,809 (134,979) 282,816 451,099 98,768 549,867
================ ======= ======= ============== ======= =========== =========== =========== ======== ======== =============== ========
(1) Other equity reserves comprise the demerger reserve, share
option reserve, cashflow hedge reserve, cost of hedging reserve and
the put option reserve
Group Statement of Cash flows
for the year ended 31 December 2020
Unaudited
2020 2019
. EUR'000 EUR'000
===================================================== ========== ==========
Net cashflows from operating activities before
working capital movements 84,680 67,249
Movements in working capital 52,092 6,527
===================================================== ========== ==========
Net cashflows from operating activities 136,772 73,776
===================================================== ========== ==========
Investing activities
Acquisition of subsidiaries (1,265) (6,683)
Cash assumed on acquisition of subsidiaries,
net 1,527 2,308
Acquisition of, and investment in joint ventures
and associates (including acquisition fees
and net of loans advanced / repaid) 472 (7,145)
Payments of contingent consideration (6,789) (11,103)
Acquisition of equity investments - (150)
Disposal of shareholding to non-controlling 285 -
interest
Proceeds from disposal of investments for resale 2,727 1,043
Proceeds from disposal of joint ventures and
associates 98 48
Cash/(bank overdraft) derecognised on disposal
of subsidiaries - (191)
Acquisition of property, plant and equipment (15,011) (19,518)
Acquisition of intangible assets-computer software (5,370) (4,621)
Acquisition of non-controlling interests subject (3,568) -
to put options
Development expenditure capitalised (112) (62)
Proceeds from disposal of property and plant
and equipment - routine 783 678
Proceeds from exceptional items - from disposals
of investments 1,105 9,307
Payment of deferred consideration (249) -
Dividends received from joint ventures and
associates 11,337 10,652
Government grants received - 106
===================================================== ========== ==========
Net cashflows from investing activities (14,030) (25,331)
===================================================== ========== ==========
Financing activities
Drawdown of borrowings 266,015 345,764
Repayment of borrowings (317,162) (333,211)
Lease payments (23,497) (17,902)
Proceeds from the issue of share capital, net 134 67
Acquisition of non-controlling interests (796) (1,656)
Dividends paid to non-controlling interests (20,510) (16,055)
Dividends paid to equity holders of the parent (10,012) (13,313)
===================================================== ========== ==========
Net cashflows from financing activities (105,828) (36,306)
===================================================== ========== ==========
Net increase in cash, cash equivalents and
overdrafts 16,914 12,139
Cash, cash equivalents and bank overdrafts
at start of year 106,027 92,739
Net foreign exchange difference (1,245) 1,149
===================================================== ========== ==========
Cash, cash equivalents and bank overdrafts
at 31 December 121,696 106,027
===================================================== ========== ==========
Group Reconciliation of Net Debt
Unaudited
2020 2019
EUR'000 EUR'000
=============================================== ========== ==========
Net increase in cash, cash equivalents and
bank overdrafts 16,914 12,139
Drawdown of borrowings (266,015) (345,764)
Repayment of borrowings 317,162 333,211
Interest-bearing loans and borrowings arising (2,550) -
on acquisition
Foreign exchange movement 11,389 (2,672)
================================================ ========== ==========
Movement in net debt 76,900 (3,086)
Finance lease reclassified from net debt on
adoption of IFRS 16 - 1,636
Net debt at 1 January (221,193) (219,743)
================================================ ========== ==========
Net debt at 31 December (144,293) (221,193)
================================================ ========== ==========
Net debt is a non-IFRS measure which comprises bank deposits,
cash and cash equivalents and current and non-current borrowings.
It excludes lease liabilities. The calculation is outlined on Note
12.
Notes to the Preliminary Results
for the year ended 31 December 2020
1. Basis of preparation
The financial information included in this preliminary results
statement has been extracted from the Group's Financial Statements
for the year ended 31 December 2020 and is prepared based on the
accounting policies set out therein, which are consistent with
those applied in the prior year. As permitted by European Union
(EU) law and in accordance with AIM/ESM rules, the Group Financial
Statements have been prepared in accordance with International
Financial Reporting Standards (IFRSs) and their interpretations
issued by the International Accounting Standards Board (IASB) as
adopted by the EU.
The financial information prepared in accordance with IFRSs as
adopted by the EU included in this report does not include all the
information and disclosures required in the full statutory
financial statements. The Annual Report and Financial Statements
will be approved by the Board of Directors and reported on by the
Auditor in due course. Accordingly, the financial information is
unaudited. The Group Financial Statements will be filed with the
Company's annual return in the Companies Registration Office and
circulated to shareholders in due course. The financial information
for the year ended 31 December 2019 represents an abbreviated
version of the Group's statutory financial statements on which an
unqualified audit report was issued, and which has been filed with
the Companies Registration Office.
The financial information is presented in Euro, rounded to the
nearest thousand where applicable.
2. Translation of foreign currencies
The reporting currency of the Group is Euro. The rates used in
the translation of results and balance sheets into Euro were as
follows:
Average rate Closing rate
=============================== ===============================
Unaudited Unaudited
202 0 2019 % change 2020 2019 % change
================= ========== ======== ========= ========== ======== =========
Brazilian Real 6.3727 4.4996 (41.6%) 6.3735 4.5157 (41.1%)
Canadian Dollar 1.5361 1.4864 (3.3%) 1.5628 1.4599 (7.0%)
Czech Koruna 26.3071 25.6150 (2.7%) 26.2420 25.4080 (3.3%)
Danish Kroner 7.4510 7.4647 0.2% 7.4412 7.4717 0.4%
Indian Rupee 84.4220 78.7716 (7.2%) 89.5594 79.9301 (12.0%)
Polish Zloty 4.4433 4.2969 (3.4%) 4.5706 4.2551 (7.4%)
Sterling 0.8942 0.8743 (2.3%) 0.8985 0.8506 (5.6%)
Swedish Krona 10.4877 10.5858 0.9% 10.0557 10.4778 4.0%
US Dollar (1) 1.1384 1.1173 (1.9%) 1.2265 1.1216 (9.4%)
================= ========== ======== ========= ========== ======== =========
(1) For the year ended 31 December 2020 the average rate used in
translating the revenues of Dole to Euro was 1.1405 (31 December
2019: 1.1282) and equity accounted profit after tax of Dole to Euro
was 1.1239 (2019: 1.1282).
3. Revenue
Unaudited Restated(2) 2019
2020 EUR'000
EUR'000
======================================================================================= ========== =================
Group Revenue 3,817,585 3,729,346
Plus:
Share of revenue of joint ventures - Dole 1,843,402 1,801,299
Share of revenue of joint ventures - Other 628,228 632,934
Share of revenue of associates 65,140 75,687
======================================================================================= ========== =================
Total share of revenue of joint ventures and associates 2,536,770 2,509,920
======================================================================================= ========== =================
Less:
Elimination of proportionate share of transactions between Group subsidiaries and
joint ventures
and associates (1) (94,857) (86,172)
======================================================================================= ========== =================
Total Revenue 6,259,498 6,153,094
======================================================================================= ========== =================
(1) For calculation of Total Revenue which includes Group's
share of joint ventures and associates, the Group eliminates the
proportionate share of revenue transactions between Group
subsidiaries and joint ventures and associates.
(2) The Group's Total Revenue (which is a non-statutory number
including the Group's share of joint venture and associate revenue)
was restated. This is due to a misstatement in the prior year
financial statements of the Group's joint venture, Dole. Dole has
restated its previously issued financial statements for year ended
28 December 2019 to correct a misstatement in its income statement
related to revenue. The correction resulted in a $50,395,000
decrease to revenue and costs of goods sold, with no impact to
gross profit. Total Produces 45% share of this joint venture
revenue was $22,678,000 (EUR20,101,000). The Group reflects Total
Revenue as a key metric in its segmental analysis, therefore Total
Revenue in the 2019 comparative above, and as presented in Note 4
Segmental Analysis, has been reduced by EUR20,101,000 from
EUR6,173,195,000 to EUR6,153,094,000. There was no impact on gross
profit or profit after tax from this error. This does not result in
a restatement of the prior year Income Statement of Total
Produce.
4. Segmental Analysis
IFRS 8 Operating Segments ('IFRS 8') sets out the requirements
for disclosure of financial and descriptive information about the
operating segments, products and the geographical areas in which
the Group operates, as well as information on major customers.
In accordance with IFRS 8, the Group's reportable operating
segments, based on how performance is assessed and resources are
allocated, are as follows:
-- Europe - Non-Eurozone: This operating segment is an
aggregation of six operating segments in the Czech Republic,
Poland, Scandinavia and the United Kingdom. These segments have
been aggregated as they all are primarily involved in the
procurement, marketing and distribution of fresh produce and share
other similar economic characteristics in terms of sourcing and
distribution arrangements, net margins earned and operate in
similar regulatory environments.
-- Europe - Eurozone: This reportable segment is an aggregation
of thirteen operating segments principally in France, Ireland,
Italy, the Netherlands and Spain. These segments have been
aggregated as they all are primarily involved in the procurement,
marketing and distribution of fresh produce and some health foods
and consumer goods products and share other similar economic
characteristics in terms of sourcing and distributions
arrangements, net margins earned, transact in Euro and operate in
the same regulatory environment.
-- International: This segment is an aggregation of five
operating segments in North America, one in South America and one
in India. These segments have been aggregated as they all are
primarily involved in the procurement, marketing and distribution
of fresh produce and share other similar economic characteristics
in terms of sourcing and distribution arrangements, net margins
earned and operate in similar regulatory environments. They also
primarily transact in US Dollar.
-- Dole: This operating segment represents the Group's 45%
interest in Dole. Dole is one of the world's leading producers,
marketers and distributors of fresh fruit and vegetables. It has an
iconic brand and leading market positions and scale. It is one of
the world's largest producers of bananas and pineapples and a
leader in other fresh fruits, value added and fresh-packed
vegetables and berries. In terms of market share they hold the
number one and three positions respectively for bananas in North
America and Europe and are number two and three respectively for
pineapples in North America and Europe. They sell and distribute
throughout a wide network in North America, Europe, Latin America,
the Middle East and Africa.
Segment performance is evaluated based on revenue and adjusted
EBITA. Management believes that adjusted EBITA, while not a defined
term under IFRS, gives a fair reflection of the underlying trading
performance of the Group. Adjusted EBITA represents earnings before
interest, tax, acquisition related intangible asset amortisation
charges and costs, fair value movements on contingent
consideration, unrealised gains or losses on derivative financial
instruments, gains and losses on foreign currency denominated
intercompany borrowings and exceptional items. It also excludes the
Group's share of these items within joint ventures and associates.
Adjusted EBITA is therefore measured differently from operating
profit in the Group financial statements as explained and
reconciled in full detail in the analysis that follows.
Finance costs, finance income and income taxes are managed on a
centralised basis. These items are not allocated between operating
segments for the purposes of the information presented to the Chief
Operating Decision-Maker ('CODM') and are accordingly omitted from
the detailed segmental analysis that follows.
Unaudited 2020 2019 (Restated)(1,2)
====================================== ======================================
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Segmental Third Party Adjusted Segmental Third Party Adjusted
Revenue Revenue EBITA Revenue Revenue EBITA
========================== =========== ============= ========== =========== ============= ==========
Europe - Non-Eurozone(1) 1,499,299 1,474,661 39,390 1,481,657 1,454,172 41,913
Europe - Eurozone(1) 1,687,370 1,666,755 28,708 1,661,446 1,637,185 20,477
International 1,295,949 1,295,734 26,012 1,271,566 1,271,566 22,284
Dole 1,843,402 1,822,348 70,128 1,801,299 1,790,171 65,440
Inter-segment revenue (66,522) -- - (62,874) - -
========================== =========== ============= ========== =========== ============= ==========
Total Group 6,259,498 6,259,498 164,238 6,153,094 6,153,094 150,114
========================== =========== ============= ========== =========== ============= ==========
All inter-segment revenue transactions are at arm's length.
(1) In 2020 there was a realignment in the reporting of small
businesses in Europe due to change in divisional management
responsibility. The comparative 2019 financial information for both
European divisions have been restated to conform with the current
presentation.
(2) As described in detail in Note 3, the Group's 45% share of
the 2019 revenue of Dole was restated. There was no impact on
adjusted EBITA or profit after tax resulting from this
misstatement.
Reconciliation of segmental profit to operating profit
Below is a reconciliation of adjusted EBITA per the Group's
management reports to operating profit and profit before tax as
presented in the Group income statement.
Unaudited
2020 2019
EUR'000 EUR'000
==================================================== ======= ========== =========
Adjusted EBITA per management reporting 164,238 150,114
Acquisition related intangible asset amortisation
for subsidiaries (i) (10,144) (10,301)
Share of joint ventures and associates acquisition
related intangible asset amortisation (i) (2,543) (2,696)
Fair value movements on contingent consideration (ii) (456) 204
Acquisition related costs within subsidiaries (iii) (348) (177)
Share of joint ventures and associates net
financial expense (iv) (38,312) (40,817)
Share of joint ventures and associates tax
(before tax on exceptional items) (iv) (19,043) (14,059)
==================================================== ======= ========== =========
Operating profit before exceptional items 93,392 82,268
Net financial expense before exceptional items (v) (9,924) (10,967)
==================================================== ======= ========== =========
Profit before tax before exceptional items 83,468 71,301
Exceptional items (Note 5) (vi) (9,970) 5,232
==================================================== ======= ========== =========
Profit before tax 73,498 76,533
============================================================= ========== =========
I. Acquisition related intangible asset amortisation charges are
not allocated to operating segments in the Group's management
reports.
II. Fair value movements on contingent consideration are not
allocated to operating segments in the Group's management
reports.
III. Acquisition related costs are transaction costs directly
related to acquisitions of subsidiaries completed and are not
allocated to operating segments in the Group's management
reports.
IV. Under IFRS, included within profit before tax is the Group's
share of joint ventures' and associates' profit after acquisition
related intangible asset amortisation charges, tax and interest. In
the Group's management reports these items are excluded from the
adjusted EBITA calculation.
V. Financial income and expense is primarily managed at Group
level, and is therefore not allocated to operating segments in the
Group's management reports.
VI. Exceptional items (Note 5) are not allocated to operating
segments in the Group's management reports.
5. Exceptional items
Unaudited
2020 2019
EUR'000 EUR'000
==================================================== ========== =========
Loss on disposal of investment (a) - (670)
Restructuring and associated credits/(costs) with
disposal/termination of a business (b) 547 (1,146)
Share of joint ventures and associates exceptional
items - Dole (c) (10,607) 5,523
Impairment of goodwill (d) (3,546) -
Impairment of property, plant and equipment and
investment property (e) (1,063) -
Total exceptional items (before share of joint
ventures and associates' tax) (14,669) 3,707
Share of joint ventures and associates' tax on
exceptional items - Dole (c) 4,699 1,525
==================================================== ========== =========
Exceptional items within profit before tax* (9,970) 5,232
Net tax charge on exceptional items (f) (916) (47)
==================================================== ========== =========
Total net of tax (10,886) 5,185
==================================================== ========== =========
Attributable as follows:
Equity holders of the parent (10,861) 5,246
Non-controlling interests (25) (61)
==================================================== ========== =========
(10,886) 5,185
==================================================== ========== =========
*Of the EUR9,970,000 net exceptional cost in 2020, EUR4,062,000
has been recognised as net operating expense, and EUR5,908,000 net
exceptional cost has been recognised within profits of joint
ventures and associates.
(a) Loss on disposal of equity investment
In July 2018 a subsidiary of the Group disposed of an interest
in a farming entity for consideration of shares in an equity
investment which was to be realised over a period of two to three
years and could vary depending on certain circumstances. The
exceptional loss of EUR670,000 in 2019 represents the gain on the
equity investments sold in the year less the fair value movement on
the remaining equity investment and associated costs.
(b) Restructuring and associated credits/(costs) with
disposal/termination of a business
In 2020, the Group recorded a net gain of EUR547,000 on the
disposal of and termination of a business and on restructuring in
the Non-Eurozone division. The net credit includes the
reclassification of EUR793,000 of currency translation gains from
the currency translation reserve to the income statement on the
disposal of a business.
In 2019, the Group incurred losses of EUR572,000 on the disposal
of and termination of two small businesses in the Non-Eurozone
division. Restructuring charges of EUR574,000 were incurred in 2019
on ongoing restructuring programs in the Eurozone division.
(c) Share of joint ventures and associates exceptional items -
Dole
The Group's share of the exceptional items in Dole in the year
was a net charge of EUR10,607,000 with a related tax credit of
EUR4,699,000. Included in these were net charges of EUR6,520,000 on
mark-to-market of derivative financial instruments (including
ineffectiveness on interest rate swap hedging instrument) and
foreign currency gains/losses on long term foreign currency
denominated intercompany borrowings, net restructuring charges of
EUR1,430,000, and EUR4,355,000 due to COVID-19 costs (costs of
employee protective equipment, double shifts etc). These charges
were offset by net gains of EUR1,698,000 on asset
sales/impairments.
The Group's share of the exceptional items in 2019 was a net
gain of EUR5,523,000 with a related tax credit of EUR1,525,000.
Included in these exceptional items are net gains of EUR11,904,000
on disposals of businesses/assets, net gains of EUR33,000 on mark
to market of derivative financial instruments and foreign currency
gains/losses on long term foreign currency denominated intercompany
borrowings, net restructuring charges of EUR4,118,000, transaction
costs of EUR626,000 and costs of EUR1,670,000 associated with
industry wide product recalls.
(d) Impairment of goodwill
In 2020 the Group recognised a non-cash impairment charge of
EUR3,546,000 in relation to a business in the Non-Eurozone
division.
(e) Impairment of property, plant and equipment and investment
property
All property is recognised in the financial statements at fair
value. As part of the Group bi-annual review of carrying amount of
property, the Group identified two properties in the Non-Eurozone
division and one in the Eurozone division where fair value exceeded
historic cost resulting in an exceptional income statement charge
of EUR1,063,000 .
(f) Tax charge on exceptional items
The tax effect on exceptional items within Group companies was a
net charge of EUR916,000 (2019: EUR47,000).
Effect of COVID-19 in 2020
Within the Eurozone, Non-Eurozone and International divisions,
there were additional operating costs relating to COVID-19 such as
employee personal protective equipment and costs of additional
shifts in warehouse to comply with physical distancing. These
additional costs were offset by reductions in other costs such as
travel expenses.
As noted in (c), the Group's 45% share of exceptional COVID-19
costs in Dole was EUR4,355,000 and related primarily to charges in
its Fresh Vegetable division such as costs of double shifts,
protective equipment and additional transport.
Effect of exceptional items on cashflow statement
The net effect of these items was a cash inflow of EUR757,000
(2019: EUR 5,818 ,000), including cashflows relating to prior
period exceptional items.
6. Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit
for the period attributable to ordinary equity holders of the
parent by the weighted average number of ordinary shares
outstanding during the period, excluding shares purchased by the
Company which are held as treasury shares.
Unaudited
2020 2019
EUR'000 EUR'000
====================================================== ========== =========
Profit for the financial year attributable to equity
holders of the parent 40,412 53,302
'000 '000
====================================================== ========== =========
Shares in issue at beginning of year 410,525 410,429
New shares issued from exercise of share options
(weighted average) 35 51
Shares repurchased by company (weighted average) - (2)
Effect of treasury shares held (22,000) (22,000)
====================================================== ========== =========
Weighted average number of shares 388,560 388,478
====================================================== ========== =========
Basic earnings per share - cents 10.40 13.72
====================================================== ========== =========
Diluted earnings per share
Diluted earnings per share is calculated by dividing the profit
for the period attributable to ordinary equity holders of the
parent by the weighted average number of ordinary shares
outstanding after adjustment for the effects of all ordinary shares
and options with a dilutive effect.
Unaudited
2020 2019
EUR'000 EUR'000
====================================================== ========== =========
Profit for the financial year attributable to equity
holders of the parent 40,412 53,302
'000 '000
====================================================== ========== =========
Weighted average number of shares 388,560 388,478
Effect of share options with a dilutive effect 583 817
====================================================== ========== =========
Weighted average number of shares (diluted) 389,143 389,295
====================================================== ========== =========
Diluted earnings per share -cent 10.38 13.69
====================================================== ========== =========
The average market value of the Company's shares for the purpose
of calculating the dilutive effect of share options was based on
the quoted market prices for the period during which the options
were outstanding.
Adjusted basic earnings per share and adjusted fully diluted
earnings per share
Unaudited
2020 2019
EUR'000 EUR'000
==================================================== ========== =========
Profit for the financial year attributable to
ordinary equity holders of the parent 40,412 53,302
Adjustments:
Exceptional items - net of tax (Note 5) 10,886 (5,185)
Acquisition related intangible asset amortisation
within subsidiaries 10,144 10,301
Share of joint ventures and associates acquisition
related intangible asset amortisation 2,543 2,696
Acquisition related costs within subsidiaries 348 177
Fair value movements on contingent consideration 456 (204)
Tax effect of amortisation charges of goodwill,
intangible assets and fair value movements on
contingent consideration (1,548) (3,188)
Non-controlling interests share of the items above (3,279) (2,915)
==================================================== ========== =========
Adjusted profit attributable to equity holders
of the parent 59,962 54,984
==================================================== ========== =========
'000 '000
==================================================== ========== =========
Weighted average number of shares 388,560 388,478
Weighted average number of shares (diluted) 389,143 389,295
==================================================== ========== =========
Adjusted basic earnings per share - cent 15.43 14.15
==================================================== ========== =========
Adjusted fully diluted earnings per share - cent 15.41 14.12
==================================================== ========== =========
Management believe that adjusted fully diluted earnings per
share as set out above provides a fairer reflection of the
underlying trading performance of the Group after eliminating the
effect of acquisition related intangible asset amortisation charges
and costs, fair value movements on contingent consideration,
unrealised gains or losses on derivative financial instruments,
gains and losses on foreign currency denominated intercompany
borrowings and exceptional items and the related tax on these
items.
Adjusted basic earnings per share is calculated by dividing the
adjusted profit attributable to ordinary equity holders of the
parent (as calculated above) by the weighted average number of
ordinary shares outstanding during the period, excluding shares
purchased by the Company which are held as treasury shares.
Adjusted fully diluted earnings per share is calculated by
dividing the adjusted profit attributable to ordinary equity
holders of the parent (as calculated above) by the weighted average
number of ordinary shares outstanding after adjustment for the
effects of all ordinary shares and options with a dilutive
effect.
7. Investment in Dole
Total Produce (or the 'Group') has one joint venture which is
material to the Group and which is equity accounted, Dole Food
Company Inc ('Dole'). The registered address of Dole is 200 S.
Tyron St, Suite 600, Charlotte, NC 28211.
Summary of Initial Transaction that is in place at 31 December
2020
As disclosed previously, on 31 July 2018, Total Produce
completed the First Tranche of a transaction to acquire a 45%
shareholding in Dole from Castle & Cook Inc and affiliates
(owned by Mr David H. Murdock) for $300m.
In addition, and at any time after 31 July 2018, the Group has
the right, but not the obligation, to acquire (in any one or more
tranches of 1%) up to an additional 6% of Dole common stock (the
'Second Tranche'). In the event the Group exercises the right to
acquire the additional 6% the total consideration for the 51% stake
shall be $312 million.
From and after 31 July 2020, the Group has the right, but not
the obligation, to acquire the balance of Dole common stock (the
'Third Tranche'), whereby the consideration for the Third Tranche
is to be calculated based on nine times the preceding historical
three-year average Dole adjusted EBITDA less net debt. However, in
no event shall the Third Tranche purchase price be less than $250m
or exceed $450m (such cap subject to increase after six years). The
Third Tranche consideration is payable in cash or, if the parties
mutually agree, Total Produce stock.
Effective as of 31 July 2023, if the Group has not exercised its
right to acquire 100% of Dole, Mr. David H. Murdock is permitted to
cause a process to market and sell 100% of Dole common stock. This
is subject to a sales proceeds refund mechanism designed to protect
the value of Total Produce's initial investment plus a guaranteed
return.
On completion of the acquisition of the First Tranche on 31 July
2018, the Group and Mr. David H. Murdock have balanced governance
rights with respect to Dole. The Board of Directors of Dole
comprises of six members, three of which are appointed by Total
Produce and three by Mr. David H. Murdock. Mr. David H. Murdock
remains Chairman of Dole and Carl McCann was appointed Vice
Chairman. Major decisions require consent of at least one Board
Member appointed by each of Total Produce and Mr. David H.
Murdock.
As part of the provisions of acquisition accounting, a fair
value was determined for the Second Tranche Option which is
recognised as a current derivative financial asset in the Total
Produce Group balance sheet and correspondingly reduces the deemed
cost of the acquisition of the First Tranche. The fair value of the
Third Tranche Option was not deemed material at the date of
acquisition or at 31 December 2020.
As part of the Securities Purchase Agreement, the seller
provided indemnities against certain liabilities outstanding at the
date of acquisition. The fair value of these indemnities was
recognised as a long-term asset in the Total Produce Group balance
sheet with a corresponding reduction in the deemed cost of the
acquisition
The investment in Dole and its financial contribution is being
treated as a joint venture and accounted for under the equity
method in accordance with IFRS in the consolidated Group accounts
following completion of the acquisition of the First Tranche on 31
July 2018 and until an exercise of the Third Tranche. Total Produce
is therefore equity accounting for its 45% share of the results of
Dole with effect from 1 August 2018.
Summary of Announcement post year-end on 17 February 2021
On 17 February 2021, the Group and Dole Food Company Inc and
affiliates of Castle & Cooke, Inc. (the "C&C
shareholders"), which own a 55% interest in Dole's parent company
("Dole Holdings") (together, the "Parties"), announced that they
have entered into a binding transaction agreement (the "Agreement")
to combine under a newly created, U.S. listed company ("Dole plc")
(the "Transaction").
The Transaction will simplify the existing structure between the
two companies by unifying Dole and Total Produce under common
ownership, with the objective of enabling full operational
integration, realisation of synergies and value creation across the
enlarged business.
Under the terms of the Agreement, Total Produce shareholders
will receive 82.5% of Dole plc shares and the C&C shareholders
will receive 17.5% of Dole plc shares, in each case based on the
fully diluted outstanding shares immediately prior to the
completion of the Transaction.
Per the Agreement, Dole plc's completion of an initial public
offering and a listing on a major U.S. stock exchange is a
condition for completion of the Transaction (the "IPO"). In
connection with the Transaction, Dole plc intends to target raising
US$500 to US$700 million in primary equity capital to strengthen
and de-lever the combined balance sheet. Upon completion of the
U.S. listing of Dole plc, Total Produce will cease to be listed on
Euronext Dublin and the London Stock Exchange.
The Transaction is subject to approval by Total Produce
shareholders and other regulatory approvals.
Should the Transaction fail to complete for any reason the terms
of the Initial Transaction (as described above) remain in place and
Total Produce will continue to be listed on Euronext Dublin and the
London Stock Exchange.
Summary of Financial Information for Dole for year ended 31
December 2020
Dole's 2020 financial year began on 29 December 2019 and ended
on 31 December 2020. Dole's financial calendar for the 2019
financial year began on 30 December 2018 and ended on 28 December
2019.
The following is the summarised financial information of Dole
for the financial year ended 31 December 2020 and the financial
year ended 28 December 2019 based on consolidated financial
statements prepared under IFRS, modified for fair value adjustments
on acquisition and differences in the Group's accounting
policies.
Restatement of comparative financial information
Dole restated its IFRS financial information at the date of
acquisition on 31 July 2018 due to an overstatement of
post-retirement benefit liabilities. Dole's operations in Latin
America are obliged by social regulations to provide certain
termination benefits to employees involuntarily terminated. Under
US GAAP these potential benefits of $29,000,000 are recorded as
post-retirement benefits. However, in the exercise to convert Dole
financial information to IFRS, these termination benefits should
not have been recorded as a liability in the IFRS acquisition
balance sheet on 31 July 2018. The appropriate treatment under IFRS
is to account for such benefits as period costs when incurred. The
tax effect of this adjustment is an increase of $2,604,000 in net
deferred tax liabilities. As Total Produce acquired its 45%
interest in Dole on 31 July 2018, the Group amended the IFRS
acquisition accounting for its equity investment in Dole effective
31 July 2018 to correct this misstatement by increasing its share
of the net assets acquired of Dole by $11,878,000 (being 45% of
$26,396,000) with a corresponding $11,878,000 decrease in goodwill.
As the Group equity accounts for Dole, its 45% share of its net
assets and the goodwill arising on acquisition are all part of the
Group's carrying amount of Dole that is reflected as one number on
the Group's Balance Sheet. Therefore, this does not result in a
restatement of the prior year Income Statement or Balance Sheet of
Total Produce.
Dole restated its previously issued US GAAP financial statements
and IFRS financial information for the financial year ended 30
December 2017, to correct a misstatement made in the calculation of
long-term tax provisions. The correction resulted in an $8,500,000
increase to other long-term liabilities and a $8,500,000 decrease
in retained earnings in Dole's own financial statements for the
financial years ended 29 December 2018 and 28 December 2019. As
Total Produce acquired its 45% interest in Dole on 31 July 2018,
the Group amended the acquisition accounting for its equity
investment in Dole effective 31 July 2018 to correct this
misstatement by reducing its share of the net assets acquired of
Dole by $3,825,000 (being 45% of $8,500,000) with a corresponding
$3,825,000 increase in goodwill. As the Group equity accounts for
Dole, its 45% share of its net assets and the goodwill arising on
acquisition are all part of the Group's carrying amount of Dole
that is reflected as one number on the Group's Balance Sheet.
Therefore, this does not result in a restatement of the prior year
Income Statement or Balance Sheet of Total Produce.
Dole also restated its previously issued US GAAP financial
statements and IFRS financial information for the financial year
ended 28 December 2019 to correct a misstatement in its income
statement related to revenue. The correction resulted in a
$50,395,000 decrease to revenue and costs of goods sold, with no
impact to gross profit. Total Produces 45% share of this joint
venture revenue was $22,678,000 (EUR20,101,000). Total Produce
includes the Group's share of joint ventures and associate revenue
within its Total Revenue calculation, which is the key revenue
metric in its segmental analysis. Therefore, Total Revenue in the
2019 comparative in Note 4 Segmental Analysis is reduced by
EUR20,101,000 from EUR6,173,195,000 to EUR6,153,094,000. This does
not result in a restatement of the prior year Income Statement of
Total Produce.
.
Summary income statement Dole (in USD '000)
12 months ended 31 December 2020
Unaudited 12 months ended 28 December 2019 (Restated) (1)
=============================================== =================================================
Exceptional Exceptional
Pre-exceptional Items Total Pre-exceptional Items Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
================== ================ ================= ========== ================== ================= ==========
Revenue 4,671,999 - 4,671,999 4,515,959 - 4,515,959
Operating profit 184,554 (21,572) 162,982 173,790 13,846 187,636
Net financial
expense (70,326) (4,921) (75,247) (78,369) - (78,369)
Leasing interest
expense (20,405) - (20,405) (19,284) - (19,284)
================== ================ ================= ========== ================== ================= ==========
Profit before tax 93,823 (26,493) 67,330 76,137 13,846 89,983
Income tax (38,731) 11,737 (26,994) (25,477) 3,823 (21,654)
================== ================ ================= ========== ================== ================= ==========
Profit after tax 55,092 (14,756) 40,336 50,660 17,669 68,329
Non-controlling
interests (1,914) - (1,914) (2,205) - (2,205)
================== ================ ================= ========== ================== ================= ==========
Profit
attributable to
equity
shareholders 53,178 (14,756) 38,422 48,455 17,669 66,124
================== ================ ================= ========== ================== ================= ==========
Groups' 45% share
of profit
attributable to
equity
shareholders 23,930 (6,640) 17,290 21,805 7,951 29,756
================== ================ ================= ========== ================== ================= ==========
(1) Restatement of 2019 comparative revenue due to prior year
misstatement as explained above.
Summary of other comprehensive income statement Dole (in USD
'000)
Unaudited
2020 2019
US$'000 US$'000
=============================================================================================== ========== =========
Effective portion of cashflow hedges, net of recycling (4,304) (12,753)
Remeasurement gain/(loss) on employee benefit schemes 1,072 (6,459)
Revaluation gain on property, plant and equipment 2,938 3,411
Deferred tax on items above 823 1,048
Foreign currency translation effects 24,911 (8,015)
=============================================================================================== ========== =========
Other comprehensive income/(expense) for the period (net of tax) 25,440 (22,768)
Non-controlling interests share - -
=============================================================================================== ========== =========
Attributable to equity shareholders 25,440 (22,768)
=============================================================================================== ========== =========
Group's 45% share of other comprehensive income/(expense) attributable to equity shareholders 11,448 (10,246)
=============================================================================================== ========== =========
Summary income statement Dole (in Euro '000)
12 months ended 31 December 2020 Unaudited 12 months ended 28 December 2019 (Restated) (1)
=============================================== =================================================
Exceptional Exceptional
Pre-exceptional Items Total Pre-exceptional Items Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
================== ================ ================= ========== ================== ================= ==========
Revenue 4,096,448 - 4,096,448 4,002,887 - 4,002,887
Operating profit 164,209 (19,194) 145,015 154,044 12,274 166,318
Net financial
expense (62,573) (4,378) (66,951) (69,465) - (69,465)
Leasing interest
expense (18,156) - (18,156) (17,093) - (17,093)
================== ================ ================= ========== ================== ================= ==========
Profit before tax 83,480 (23,572) 59,908 67,486 12,274 79,760
Income tax (34,461) 10,443 (24,018) (22,582) 3,388 (19,194)
================== ================ ================= ========== ================== ================= ==========
Profit after tax 49,019 (13,129) 35,890 44,904 15,662 60,566
Non-controlling
interests (1,703) - (1,703) (1,954) - (1,954)
================== ================ ================= ========== ================== ================= ==========
Profit
attributable to
equity
shareholders 47,316 (13,129) 34,187 42,950 15,662 58,612
================== ================ ================= ========== ================== ================= ==========
Groups' 45% share
of profit
attributable to
equity
shareholders 21,292 (5,908) 15,384 19,327 7,048 26,375
================== ================ ================= ========== ================== ================= ==========
(1) Restatement of 2019 comparative revenue due to prior year
misstatement as explained on page 24.
Summary of other comprehensive income statement Dole (in Euro
'000)
Unaudited
2020 2019
EUR'000 EUR'000
=============================================================================================== ========== =========
Effective portion of cashflow hedges, net of recycling (3,830) (11,414)
Remeasurement gain/(loss) on employee benefit schemes 954 (5,781)
Revaluation gain on property, plant and equipment 2,614 3,041
Deferred tax on items above 732 938
Foreign currency translation effects 22,165 (7,173)
=============================================================================================== ========== =========
Other comprehensive income/(expense) for the period (net of tax) 22,635 (20,389)
Non-controlling interests share - -
=============================================================================================== ========== =========
Attributable to equity shareholders 22,635 (20,389)
=============================================================================================== ========== =========
Group's 45% share of other comprehensive income/(expense) attributable to equity shareholders 10,186 (9,175)
=============================================================================================== ========== =========
Key performance indicators Dole
Unaudited Unaudited
2020 2019 2020 2019
US$'000 US$'000 EUR'000 EUR'000
=================================================================== ========== ========== ========== ==========
Adjusted EBITDA (adding back depreciation of right of use assets) 326,764 307,724 290,741 272,762
Adjusted EBITDA 259,174 245,013 230,603 217,176
Adjusted EBITA 184,554 173,790 164,209 154,045
=================================================================== ========== ========== ========== ==========
Summary Balance Sheet of Dole
Unaudited Unaudited
2020 (Restated) 2019 (1) 2020 (Restated) 2019 (1)
US$'000 US$'000 EUR'000 EUR'000
================================================ ============ ==================== ========== ====================
Intangible assets - primarily brand 284,848 285,540 232,252 254,592
Property, plant and equipment 1,103,441 1,069,546 899,693 953,622
Right of use assets 249,539 279,068 203,462 248,821
Assets held for sale / Actively marketed
property 49,131 64,760 40,059 57,741
Other non-current assets 118,428 107,753 96,561 96,074
Other current assets 868,976 862,588 708,521 769,096
Net debt (1,209,727) (1,287,328) (986,353) (1,147,800)
Employee benefit obligations (137,942) (146,059) (112,472) (130,228)
Lease liabilities (268,306) (294,034) (218,764) (262,165)
Other non-current liabilities (246,522) (249,740) (201,002) (222,672)
Other current liabilities (673,018) (617,365) (548,747) (550,452)
Non-controlling interests (9,427) (9,170) (7,686) (8,176)
================================================ ============ ==================== ========== ====================
Fair value of net assets attributable to equity
shareholders 129,421 65,559 105,524 58,453
================================================ ============ ==================== ========== ====================
Total Produce's 45% share of net assets 58,239 29,501 47,485 26,304
================================================ ============ ==================== ========== ====================
Goodwill 267,634 267,634 218,259 238,589
================================================ ============ ==================== ========== ====================
Total carrying amount of 45% interest in Dole 325,873 297,135 265,744 264,893
================================================ ============ ==================== ========== ====================
(1) Restatement of 2019 comparative balances for employee
benefit obligations and other non-current liabilities as explained
on pages 23 and 24.
Reconciliation of Group's carrying amount of investment in
Dole
Unaudited Unaudited
2020 2019 2020 2019
US$'000 US$'000 EUR'000 EUR'000
======================================================================== ========== ========= ========== =========
Opening carrying amount of 45% investment in Dole 297,135 281,432 264,893 245,881
Retained earnings adjustment on transition to IFRS 16 - (3,807) - (3,326)
Group share of profit attributable to equity shareholders 17,290 29,756 15,384 26,375
Group share of other comprehensive income/(expense) attributable to
equity shareholders 11,448 (10,246) 10,186 (9,175)
Foreign exchange movement - - (24,719) 5,138
======================================================================== ========== ========= ========== =========
Closing carrying amount of 45% interest in Dole 325,873 297,135 265,744 264,893
======================================================================== ========== ========= ========== =========
8. Post-employment obligations
Unaudited
2020 2019
EUR'000 EUR'000
===================================================== ========= ========
Employee defined benefit pension schemes obligations (17,330) (10,828)
Other post-employment defined benefit obligations (6,636) (5,908)
===================================================== ========= ========
(23,966) (16,736)
===================================================== ========= ========
Employee defined benefit pension schemes
Unaudited
2020 2019
EUR'000 EUR'000
================================================================================= ========= =========
Pension assets 199,805 192,227
Pension obligations (217,135) (203,055)
================================================================================= ========= =========
Net liability (17,330) (10,828)
Net related deferred tax asset 3,052 1,479
================================================================================= ========= =========
Net liability after tax (14,278) (9,349)
================================================================================= ========= =========
Movement in year
Net liability at beginning of year (10,828) (10,941)
Net interest expense and current service cost recognised in the income statement (2,093) (1,677)
Employer contributions to schemes 3,357 4,866
Remeasurement loss recognised in other comprehensive income (8,122) (2,683)
Translation adjustment 356 (393)
================================================================================= ========= =========
Net liability at end of year before deferred tax (17,330) (10,828)
================================================================================= ========= =========
The table above summarises the movements in the net liability of
the Group's various defined benefit pension schemes in Ireland, the
UK, Continental Europe and North America in accordance with IAS 19
Employee Benefits (2011).
The Group's balance sheet at 31 December 2020 reflects net
pension liabilities of EUR17.3m in respect of schemes in deficit,
resulting in a net deficit of EUR14.3m after deferred tax. The
increase in the net liability was due to a decrease in the Eurozone
and UK discount rates which increases the net present value of
scheme obligations. This was offset by an average return of 7.5% on
pension scheme assets in 2020 .
The below table shows the discount rates and inflation
rates:
Unaudited
2020 2019
================ ========= =====
Eurozone
Discount rates 1.08% 1.40%
Inflation rates 1.30% 1.40%
UK
Discount rates 1.40% 2.00%
Inflation rates 2.90% 2.70%
================ ========= =====
9. Dividends
The 2019 final dividend of 2.5770 was paid on 2 September 2020.
The payment of the 2020 interim dividend of 0.9129 cent per share
(which was unchanged on prior year) was paid post year-end on 29
January 2021.
The Group intends to pay a final dividend of 2.770 cent per
share representing a 7.5% increase on 2019, in May 2021. The total
dividend for 2020 will amount to 3.6829 cent per share (2019:
3.4899) and represents an increase of 5.5% on 2019. The total
dividend represents a pay-out of almost 24% of the adjusted
earnings per share.
In accordance with company law and IFRS, these dividends have
not been provided for in the balance sheet at 31 December 2020.
During the year dividends of EUR20,510,000 (2019: EUR16,055,000)
were paid to non-controlling interests within certain of the
Group's subsidiaries.
10. Businesses acquired and other developments
Summary of investments in 2020
A key part of the Group's strategy is growth by acquisition. In
line with this strategy the Group made a number of acquisitions in
2020 with initial cash spend of EUR1,265,000 (2019: EUR6,683,000),
deferred consideration of EURNil (2019: EUR114,000) with a further
EUR122,000 (2019: EUR1,461,000) of contingent consideration payable
dependent on the achievement of profit targets. The acquisitions in
2020 included the acquisition of additional shares in Eco Farms, a
company based in California in the United States that specialises
in avocados. This resulted in Eco Farms being consolidated as a
subsidiary of the Group. The initial 45% interest was treated as a
joint venture up to April 2020.
Summary of fair values of assets and liabilities acquired
The table below provides details on the total fair value of
acquisitions of subsidiaries in 2020. None of the business
combinations completed during the year were considered sufficiently
material to warrant separate disclosure of the fair values
attributable to those combinations.
Unaudited
2020 2019
Total Total
EUR'000 EUR'000
================================================================= ========== =========
Consideration paid and payable
Cash consideration 1,265 6,683
Contingent consideration 122 1,461
Deferred consideration - 114
================================================================= ========== =========
Total fair value of consideration 1,387 8,258
================================================================= ========== =========
Identifiable assets acquired and liabilities assumed
Property, plant and equipment 6,398 1,054
Right of use assets 493 3,564
Biological assets 262 -
Intangible assets - Customer relationships 52 2,392
Intangible assets - Software 55 434
Intangible assets - Supplier relationships, brand and other - 189
Inventories 989 590
Trade and other receivables 7,183 9,859
Cash, and cash equivalents 1,527 2,308
Interest-bearing loans and borrowings (2,550) -
Lease liabilities (501) (3,553)
Corporation tax (12) 58
Trade and other payables (6,837) (10,921)
Deferred tax asset 82 74
Deferred tax liability - (398)
================================================================= ========== =========
Fair value of net identifiable assets and liabilities acquired 7,141 5,650
================================================================= ========== =========
Non-controlling interests arising on acquisition
Non-controlling interests measured at share of net assets 1,928 959
================================================================= ========== =========
Total value of non-controlling interests arising on acquisition 1,928 959
================================================================= ========== =========
Goodwill calculation
Fair value of consideration 1,387 8,258
Fair value of pre-existing interest in acquiree 4,680 -
Fair value of net identifiable assets and liabilities acquired (7,141) (5,650)
Non-controlling interest arising on acquisition 1,928 959
================================================================= ========== =========
Goodwill arising 854 3,567
================================================================= ========== =========
Cashflows relating to acquisition of subsidiaries
Unaudited
2020 2019
EUR'000 EUR'000
=============================================================== ========== =========
Cash consideration for acquisition of subsidiary undertakings (1,265) (6,683)
Cash, cash equivalents and bank overdrafts acquired 1,527 2,308
=============================================================== ========== =========
Cash inflow/(outflow) per cashflow statement 262 (4,375)
=============================================================== ========== =========
Cash consideration paid
The cash spend on acquisitions in 2020 was EUR1,265,000 (2019:
EUR6,683,000). Net of cash, cash equivalents and bank overdrafts
acquired the net cash inflow was EUR262,000 (2019: outflow
EUR4,375,000).
Contingent consideration
The Group has agreed to pay vendors additional consideration of
EUR122,000 (2019: EUR1,633,000) in future periods which is payable
on achievement of certain profit criteria. The fair value of this
contingent consideration at the date of acquisition of EUR122,000
(2019: EUR1,461,000) was calculated by using the expected present
value technique.
Fair value of identifiable assets and liabilities assumed
The acquisition method of accounting has been used to
consolidate businesses acquired. Other than liabilities for
contingent consideration, no contingent liabilities have been
recognised on the business combinations in either year. Should any
fair values need to be adjusted they will be reflected in the
acquisition accounting within one year of the acquisition date in
line with the provisions of IFRS 3 Business Combinations.
Goodwill arising
The principal factor contributing to the recognition of goodwill
of EUR854,000 (2019: EUR3,567,000) is the value and skills of the
assembled workforce in the acquired entities along with anticipated
costs savings and synergies arising from integration into the
Group's existing businesses.
Acquisition related costs
The Group incurred acquisition related costs of EUR348,000
(2019: EUR177,000) on legal and professional fees and due diligence
in respect of the completed acquisitions. These costs have been
included within other operating expenses.
Effect of acquisitions on income statement in the year
The acquisitions of subsidiaries in 2020 contributed
EUR32,879,000 to total revenue and EUR1,874,000 to Group operating
profit in the year. These numbers exclude the contributions from
any joint venture and associate investments completed in the
year.
If the acquisition date for these business combinations was 1
January 2020, the estimated total revenue for the year ended 31
December 2020 would have been EUR6,268,175,000 and estimated
operating profit after exceptional items would have been
EUR83,600,000. These numbers exclude the contributions from any
joint ventures and associates completed in the year.
11. Cashflows generated from operations
Unaudited
2020 2019
EUR'000 EUR'000
========================================================================================= ========== ===========
Operating activities
Profit for the year 56,784 66,204
Non-cash adjustments to reconcile profit to net cashflows:
Income tax expense 16,714 10,329
Income tax paid (16,965) (15,154)
Depreciation of property, plant and equipment 17,976 17,773
Depreciation of right of use assets 22,397 19,253
Exceptional items - impairment of property, plant and equipment and investment property 1,063 -
Exceptional items - goodwill impairment 3,546 -
Exceptional items - other operating expenses (547) 1,816
Exceptional cashflows (348) (3,489)
Fair value movements on contingent consideration 456 (204)
Amortisation of intangible assets - acquisition related 10,144 10,301
Amortisation of intangible assets - development costs capitalised 170 238
Amortisation of intangible assets - computer software 2,616 2,046
Amortisation of government grants (66) (63)
Defined benefit pension scheme expense - normal 2,093 1,677
Contributions to defined benefit pension schemes - normal (3,357) (4,866)
Other post-employment benefit scheme expense 451 451
Net payments for other employee benefit scheme (196) (249)
Share-based payment (credit)/expense (114) 109
Net gain on disposal of property, plant and equipment (264) (313)
Movement in provisions 504 (489)
Fair value gain on other investments (245) (854)
Financial income (2,287) (2,754)
Financial expense 12,211 13,721
Financial income received 2,289 2,005
Financial expense paid (12,505) (13,149)
Loss/(gain) on non-hedging derivative financial instruments 213 (115)
Loss on termination of right of use leased assets 4 146
Gain on disposal of joint venture - (88)
Fair value movement on joint venture becoming a subsidiary 80 -
Fair value movements on biological assets 252 666
Share of profit of joint ventures (27,435) (37,033)
Share of profit of associates (954) (666)
========================================================================================= ========== ===========
Net cashflows from operating activities before working capital movements 84,680 67,249
========================================================================================= ========== ===========
Movements in working capital:
Movements in inventories (16,592) (6,091)
Movements in biological assets 757 530
Movements in receivables 28,615 27,342
Movements in payables 39,312 (15,254)
========================================================================================= ========== =========
Total movements in working capital 52,092 6,527
========================================================================================= ========== =========
Net cashflows from operating activities 136,772 73,776
========================================================================================= ========== =========
12. Analysis of Net Debt and Cash and Cash Equivalents
Net debt is a non-IFRS measure which comprises cash and cash
equivalents and current and non-current borrowings. The calculation
of net debt at 31 December 2020 is as follows:
Unaudited
2020 2019
EUR'000 EUR'000
================================= ========== ==========
Current assets
Bank balances 130,807 99,445
Call deposits (demand balances) 56 16,084
Current liabilities
Bank overdrafts (9,167) (9,502)
Current bank borrowings (15,573) (76,648)
Non-current liabilities
Non-current bank borrowings (250,416) (250,572)
================================= ========== ==========
Net debt at end of year (144,293) (221,193)
================================= ========== ==========
Reconciliation of cash and cash equivalents per balance sheet to
cashflow statement
Unaudited
2020 2019
EUR'000 EUR'000
=================================================================== ========== =========
Cash and cash equivalents per balance sheet 130,863 115,529
Bank overdrafts (9,167) (9,502)
=================================================================== ========== =========
Cash, cash equivalents and bank overdrafts per cashflow statement 121,696 106,027
=================================================================== ========== =========
13. Post balance sheet events
The payment of the 2020 interim dividend of 0.9129 cent per
share was paid post year-end on 29 January 2021. The total dividend
amounted to EUR3,549,000.
On 17 February 2021, the Group and Dole Food Company Inc and
affiliates of Castle & Cooke, Inc. (the "C&C
shareholders"), which own a 55% interest in Dole's parent company
("Dole Holdings") (together, the "Parties"), announced that they
entered into a binding transaction agreement (the "Agreement") to
combine under a newly created, U.S. listed company ("Dole plc")
(the "Transaction").
The Transaction will simplify the existing structure between the
two companies by unifying Dole and Total Produce under common
ownership, with the objective of enabling full operational
integration, realisation of synergies and value creation across the
enlarged business.
Under the terms of the Agreement, Total Produce shareholders
will receive 82.5% of Dole plc shares and the C&C shareholders
will receive 17.5% of Dole plc shares, in each case based on the
fully diluted outstanding shares immediately prior to the
completion of the Transaction.
Per the Agreement, Dole plc's completion of an initial public
offering and a listing on a major U.S. stock exchange is a
condition for completion of the Transaction (the "IPO"). In
connection with the Transaction, Dole plc intends to target raising
US$500 to US$700 million in primary equity capital to strengthen
and de-lever the combined balance sheet. Upon completion of the
U.S. listing of Dole plc, Total Produce will cease to be listed on
the Euronext Dublin and the London Stock Exchange.
Total Produce has secured fully committed debt facilities to
backstop and refinance all existing Total Produce and Dole debt
facilities upon completion of the Transaction, with the exception
of the Dole vessel financing and certain other bilateral facilities
which will remain post completion. Overall, this is expected to
provide for a stronger balance sheet with a well-termed out capital
structure, which is expected to enhance Dole plc's credit profile
and lower its average cost of capital going forward.
Dole plc, operating under the Dole brand, will be incorporated
in Ireland, with its Global Headquarters in Dublin, Ireland. Its
headquarters for the Americas will be in Charlotte, North
Carolina.
The highly regarded management teams of Total Produce and Dole,
with combined experience of over 150 years in the fresh produce
sector, will continue to operate the combined business.
The Transaction is subject to approval by Total Produce
shareholders and other regulatory approvals.
Should the Transaction fail to complete for any reason the terms
of the Initial Dole Transaction remain in place and Total Produce
will continue to be listed on Euronext Dublin and the London Stock
Exchange.
The full terms of the Transaction are outlined in the Stock
Exchange announcement on 17 February 2021.
The Group has secured a committed debt facility with a term of 5
years to backstop and refinance certain existing Total Produce
facilities in advance of the completion of the Transaction. In the
event that the Transaction does not complete this committed
financing shall remain in place in the Total Produce Group.
14. Related party transactions
There have been no related party transactions or changes to
related party transactions other than those described in the 2019
Annual Report that materially affect the financial position or the
performance of the Group for the year ended 31 December 2020.
15. Board approval
This announcement was approved by the Board of Directors of
Total Produce plc on 24 February 2021
Appendix
Alternative Performance Measures (APMs)
The Group uses a number of alternative performance measures
('APMs') that are not required under International Financial
Reporting Standards ('IFRS') which represent the generally accepted
accounting principles ('GAAP') under which the Group reports. These
measures are referred to throughout the discussion of our reported
operating performance and financial position and are measures which
are regularly reviewed by Group management. The Group believes that
the presentation of these APMs provide useful supplementary
information which, when viewed with the IFRS financial information
provides investors with a more meaningful understanding of the
underlying financial and operating performance of the Group.
These APMs may not be uniformly defined by all companies and
accordingly they may not be directly comparable with similarly
titled measures and disclosures by other companies. These APMs
should not be viewed in isolation or as an alternative to the
equivalent GAAP measures.
The principal APMs used by the Group, together with the
reconciliation where the non-GAAP measures are not readily
identifiable from the financial statements are as follows:
Total revenue
Definition
Total revenue includes the Group's share of the revenue of its
joint ventures and associates. The calculation is presented in Note
3 of the accompanying financial information.
Adjusted EBITDA
Definition
Earnings before interest, tax, depreciation of property, plant
and equipment, acquisition related intangible asset amortisation
charges and costs, fair value movements on contingent
consideration, unrealised gains or losses on derivative financial
instruments, gains and losses on foreign currency denominated
intercompany borrowings and exceptional items. It also excludes the
Group's share of these items within joint ventures and associates.
The calculation is presented in the table on page 34 .
Adjusted EBITDA (after add back of right of use asset
depreciation)
Definition
E arnings before interest, tax, depreciation of property, plant
and equipment, depreciation of right of use assets, acquisition
related intangible asset amortisation charges and costs, fair value
movements on contingent consideration, unrealised gains or losses
on derivative financial instruments, gains and losses on foreign
currency denominated intercompany borrowings and exceptional items.
It also excludes the Group's share of these items within joint
ventures and associates. The calculation is presented in the table
on page 34 .
Adjusted EBITA
Definition
E arnings before interest, tax, acquisition related intangible
asset amortisation charges and costs, fair value movements on
contingent consideration, unrealised gains or losses on derivative
financial instruments, gains and losses on foreign currency
denominated intercompany borrowings and exceptional items. It also
excludes the Group's share of these items within joint ventures and
associates. The calculation is presented in the table on page 34
.
Adjusted profit before tax
Definition
E xcludes acquisition related intangible asset amortisation
charges and costs, fair value movements on contingent
consideration, unrealised gains or losses on derivative financial
instruments, gains and losses on foreign currency denominated
intercompany borrowings and exceptional items. It also excludes the
Group's share of these items within joint ventures and associates.
The calculation is presented in the table on page 34 .
Unaudited
Reference in Financial 2020 2019
Calculation Information EUR'000 EUR'000
===================================================================== ======================== ========== =========
Profit before tax per income statement Income Statement 73,498 76,533
Adjustments:
Exceptional items Note 5 9,970 (5,232)
Fair value movements on contingent consideration 456 (204)
Share of joint ventures and associates' tax (before tax on exceptional items) 19,043 14,059
Acquisition related intangible asset amortisation within subsidiaries 10,144 10,301
Share of joint ventures and associates acquisition related intangible asset amortisation 2,543 2,696
Acquisition related costs within subsidiaries Income Statement 348 177
===================================================================== ======================== ========== =========
Adjusted profit before tax 116,002 98,330
Exclude:
Net financial expense - subsidiaries Income Statement 9,924 10,967
Net financial expense - share of joint ventures and associates 38,312 40,817
=============================================================================================== ========== =========
Adjusted EBITA 164,238 150,114
Exclude:
Amortisation of software costs 2,616 2,046
Depreciation of property, plant and equipment - subsidiaries 17,976 17,773
Depreciation of property, plant and equipment - share of joint ventures and associates 34,592 32,870
=============================================================================================== ========== =========
Adjusted EBITDA 219,422 202,803
Exclude:
Depreciation of right of use assets - subsidiaries 22,397 19,253
Depreciation of right of use assets - share of joint ventures and associates 31,745 29,115
=============================================================================================== ========== =========
Adjusted EBITDA (before depreciation of right of use assets) 273,564 251,171
=============================================================================================== ========== =========
Adjusted fully diluted earnings per share
Definition
E xcludes acquisition related intangible asset amortisation
charges and costs, fair value movements on contingent
consideration, unrealised gains or losses on derivative financial
instruments, gains and losses on foreign currency denominated
intercompany borrowings, exceptional items and related tax on such
items. It also excludes the Group's share of these items within
joint ventures and associates. The calculation is outlined in Note
6.
Effective tax rate calculation
Definition
The Group's effective tax rate expresses the Group's income tax
expense (including the share of joint ventures and associates)
before tax impact of exceptional items and goodwill and intangible
asset amortisation as a percentage of the Group's adjusted profit
before tax.
Reference Unaudited
in Financial 2020 2019
Calculation Information EUR'000 EUR'000
=================================================== ================== ========== =========
Income tax expense Income Statement 16,714 10,329
Group share of tax charge of joint ventures
and associates 14,344 12,534
======================================================================= ========== =========
Total tax charge 31,058 22,863
Adjustments:
Deferred tax credit on amortisation of intangible
assets - subsidiaries 1,217 2,623
Deferred tax credit on amortisation of intangible
assets - share of joint ventures and associates 331 565
Tax charge on exceptional items in subsidiaries Note 5 (916) (47)
Group share of tax charge on exceptional
items within joint ventures and associates Note 5 4,699 1,525
=================================================== ================== ========== =========
Tax charge on underlying activities 36,389 27,529
======================================================================= ========== =========
As calculated
Adjusted profit before tax earlier 116,002 98,330
=================================================== ================== ========== =========
Effective tax on underlying activities 31.37% 28.0%
======================================================================= ========== =========
Net debt
Definition
Net debt is a non-IFRS measure which comprises bank deposits,
cash and cash equivalents and current and non-current borrowings.
It excludes lease liabilities. The calculation is outlined in Note
12.
Routine capital expenditure and non-routine capital
expenditure
Definition
Routine capital expenditure is cash spend on property, plant,
and equipment and software (which under IFRS is classified within
intangible assets) less proceeds on disposal of property, plant and
equipment and any expenditure classified as non-routine or
development capital expenditure.
Non-routine capital expenditure is expenditure on projects to
grow the business and generally relate to the acquisition, and fit
out of new facilities or extending the capacity of existing
facilities.
Reference Unaudited
in Financial 2020 2019
Calculation Information EUR'000 EUR'000
=============================================== ==================== ========== =========
Acquisition of property, plant and equipment Cashflow Statement 15,011 19,518
Acquisition of intangible assets - computer
software Cashflow Statement 5,370 4,621
Proceeds on disposal of property, plant and
equipment - routine Cashflow Statement (783) (678)
Non-routine (development capital expenditure) Note (a) (4,157) (4,470)
=============================================== ==================== ========== =========
Routine capital expenditure 15,441 18,991
===================================================================== ========== =========
(a) Non-routine capital expenditure is expenditure on projects
to grow the business and generally relate to fit out of new
facilities or extending the capacity of existing facilities.
Adjusted operating cashflow
Definition
Adjusted operating cashflow is the operating cashflow generated
from operations as reported in the Group Cashflow Statement before
cash outflows associated with exceptional items less lease
liability payments and development loans provided to joint ventures
and associates.
Reference Unaudited
in Financial 2020 2019
Calculation Information EUR'000 EUR'000
=============================================== ==================== ========== =========
Net cashflow from operating activities per
cashflow statement Cashflow Statement 136,772 73,776
Cash impact of exceptional items in operating
cashflows Note 11 348 3,489
Less lease liability payments Cashflow Statement (23,497) (17,902)
=============================================== ==================== ========== =========
Adjusted operating cashflow 113,623 59,363
===================================================================== ========== =========
Free Cashflow
Definition
Free Cashflow is defined by the Group as the funds available
after outflows relating to routine capital expenditure, dividends
paid to non-controlling interests but before acquisition related
expenditure (including loans advanced to joint ventures and
associates), development capital expenditure and the payment of
dividends to equity shareholders.
Reference Unaudited
in Financial 2020 2019
Calculation Information EUR'000 EUR'000
=============================================== ==================== ========== =========
Net cashflow from operating activities per
cashflow statement Cashflow Statement 136,772 73,776
Cash impact of exceptional items in operating
cashflows Note 11 348 3,489
Less lease liability payments Cashflow Statement (23,497) (17,902)
Dividends received from joint ventures and
associates Cashflow Statement 11,337 10,652
Dividends paid to non-controlling interests Cashflow Statement (20,510) (16,055)
As calculated
Routine capital expenditure earlier (15,441) (18,991)
=============================================== ==================== ========== =========
Free Cashflow 89,009 34,969
===================================================================== ========== =========
Net Debt/Adjusted EBITDA
Definition
Net debt is a measure of the Group's leverage and is calculated
by dividing net debt (as defined earlier) by adjusted EBITDA (as
defined earlier).
Reference Unaudited
in Financial 2020 2019
Calculation Information EUR'000 EUR'000
=================================== =============== ========== =========
Net debt Note 12 144,293 221,193
As calculated
Adjusted EBITDA earlier 219,422 202,803
=================================== =============== ========== =========
Net debt/ Adjusted EBITDA (times) 0.7 x 1.1 x
==================================================== ========== =========
Interest cover: EBITA interest cover
Definition
Interest cover is a measure of the Group's ability to meet its
interest payments and is calculated by dividing Adjusted EBITA (as
defined earlier) by net financial expense.
Reference Unaudited
in Financial 2020 2019
Calculation Information EUR'000 EUR'000
============================================ ================== ========== =========
As calculated
Adjusted EBITA earlier 164,238 150,114
Net financial expense Income Statement 9,924 10,967
============================================ ================== ========== =========
16.5
Adjusted EBITA/net finance expense (times) x 13.7 x
================================================================ ========== =========
Acquisition related expenditure, net
Definition
Acquisition related expenditure is cash outflows in respect of
acquisition and investment in subsidiaries, joint ventures and
associates, non-controlling interests and is net of contributions
from non-controlling interests and proceeds on disposal of shares
to non-controlling interests and proceeds from sale of equity
investments.
Reference Unaudited
in Financial 2020 2019
Calculation Information EUR'000 EUR'000
================================================ ====================== ========== =========
Cash (inflow)/outflow relating to investment
and return of investment in joint ventures
and associates Cashflow Statement (472) 7,145
Investment in subsidiaries Note 10 1,265 6,683
Proceeds from disposal of joint venture Cashflow Statement (98) (48)
Acquisition of non-controlling interests Cashflow Statement 796 1,656
Disposal of shareholding to non-controlling Cashflow Statement (2 85) -
interest
Proceeds on disposal of investments for resale Cashflow Statement (2,727) (1,043)
Acquisition of equity investments Cashflow Statement - 150
================================================ ====================== ========== =========
Acquisition related expenditure (1,521) 14,543
======================================================================== ========== =========
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END
FR USARRASUUUUR
(END) Dow Jones Newswires
February 25, 2021 02:00 ET (07:00 GMT)
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