DOLE earnings call transcript, November 9, 2026

Welcome to DOLE PLC's third quarter 2026 results webcast. Today's webcast is being broadcast live over the internet and is also being recorded for playback purposes. Currently, all participants are in listen-only mode.

After the speaker's presentation, there will be a question and answer session. For opening remarks and introductions, I would like to turn the call over to the Head of Investor Relations with DOLE PLC.

James O'Regan.

Thank you, Derek.

Welcome, everybody, and thank you for joining our results webcast. Joining me today are our Chief Executive Officer, Rory Byrne, our Chief Operating Officer, Johan Linden, and our Chief Financial Officer, Jacinta DeVos. During this webcast, we'll be referring to presentation slides to supplemental remarks, and these, along with our earnings release and other related materials, are available on the Investor Relations section of the DOLE PLC website. To note, our remarks today will include certain forward-looking statements within the provisions of the Federal Security Safe Harbour Law. These reflect circumstances at the time they are made, and the company expressly disclaims any obligation to update or revise any forward-looking statements. Actual results are out. May differ materially from those that may be expressed or implied due to a wide range of factors, including those set forth in our SEC filings and press releases. Information regarding the use of non-GAAP financial measures may be found in our press release, which also include the reconciliation to the most comparable GAAP measures. With that, I'm pleased to hand over to Rory.

Thank you, James, and welcome everybody to our latest earnings call as we discuss our results for the third quarter. So turning firstly to slide four, our third quarter performance demonstrated the resilience of the group in what remains a challenging operating environment, with adjusted EBITDA of approximately $84 million, which is 4% ahead. of the prior year. Fresh fruit delivered an improved result compared to the third quarter 2025, despite continuing cost pressures. Diversified Americas and the rest of the world delivered another strong performance, while diversified EMEA was modestly behind what was a particularly strong prior year comparative. Stepping back and looking back over the last 18 months, we have taken some critically important strategic steps. The sale of our fresh vegetables division. The transfers of the Waia Dam to the state of Hawaii and more recently and importantly, the sale of the Ecuador port. Together with strong free cash flow generation during the quarter, these actions have considerably strengthened our balance sheet with net leverage. It's reducing to 1.3 times at the end of September. Dole today is a more focused and resilient business with greater financial flexibility. This leaves us better positioned to progress our strategic and capital allocation priorities. Successfully navigate economic, weather-related and other external challenges. In that context, at the beginning of July, we completed the acquisition of Green Fruit's fresh produce business in Scandinavia. Integration is progressing well.

Thank you, Rory. Turning firstly to the group results on slide 11. Revenue for the third quarter increased 3.8%. to approximately $2.4 billion, driven by growth across both diversified segments and the net impact of M&A activity, partially offset by lower revenue and fresh fruit. On a like-for-like basis, revenue increased to 2%. Gross profit increased by $13.5 million to $168.7 million, while SMG&A expenses were $3.8 million higher. Operating income increased significantly to $88.9 million. Primarily reflecting the gain recognized on the sale of our port facility in Ecuador, together with the improvement in gross profits. Net income increased to $48.9 million, compared with $13.8 million in the prior year. This primarily reflected higher operating income, lower interest expense, and the absence of losses from discontinued operations recorded in the prior year. Partially offset by higher tax expense, mainly due to the tax arising on the Ecuador port sale. Looking now at the non-GAAP performance measures. Adjusted EBITDA increased 4.1% to 84%. Driven by strong performance in diversified Americas and the rest of the world and an improved result in fresh fruit, partially offset by a modest decrease in diversified EMEA. Adjusted net income was $15 million, broadly in line with the prior year. While adjusted diluted EPS was unchanged at $0.16. Turning now to the divisional updates and starting with fresh fruit on slide 13. Revenue decreased 8% to $880.

Thank you Jacinta.

So as we move into the final quarter of the year, we are pleased with the resilient performance of our group in the face. of an ongoing challenging operating environment. However, we continue to face higher input costs, particularly fuel and shipping costs, together with the ongoing impact of adverse weather conditions on fruit availability. We will continue to expect a year and year. Improvement in the fourth quarter, our expectations are now at a lower level than anticipated at the time of our second quarter results. And with that, we are now targeting full year adjusted EBITDA in the range of $380 to $390 million for 2021. compared with approximately $400 million previously. Importantly, we are pleased with the group's strong cash flow generation year-to-date and the significant progress made in strengthening our balance sheet. Well positioned to execute against our strategic and capital allocation priorities, including driving operating efficiencies across the group, investing in and expanding the business in a disciplined manner and delivering returns to shareholders.

So with that, I'll hand you back to the operator to open the line for questions.

We will now begin the question and answer session. If you'd like to ask a question, please press start one to raise your hand. To withdraw your question, press start one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster.

Your next question comes from the line of Balzon Tlezanova with Freedom Broker. Your line is now open. Please go ahead.

Your next question comes in the line of Gary Martin with Davey. Your line is now over.

Hi, Rory, Jacinta and Johan.

Can you let me know if you can hear me just because I'm having some technical issues on my side here? We've got you, Gary. Good to hear. Good to hear. This question hasn't been asked already because I dropped off the call there briefly, but it would be good to get just a bit of a refresh on the capital allocation policy. And particularly, I think there's a slightly lower capex guide for the year. It would just be good to kind of run through the technicalities of that and just how to extrapolate that forward in terms of just the different tenets of your policy moving into FY27 and beyond. Yeah, I mean, just in general terms. On our policy on capital allocation, we do cover all of the different elements of capital allocation. So, you know, we've highlighted what we did on buyback. It's one tool in the kit and, you know, we have. Executors, you know, a reasonable percentage of the overall buyback permission that we have. We keep an opportunistic approach to that. You know, we've looked at our dividend. We've had our dividend steady in the current year. A lot of investors who are pleased with that. And then we've a lot of activity going on and looking at all of the investment activity within the business. And that's obviously a combination of replacement maintenance capex. But more importantly, then we have a range of development capex. Opportunities that we're constantly studying and exploring. We look at, you know, some major acquisitions as well, but I think, you know, in the short term, the more likely outcome is around both on acquisitions, just with the, you know, the values.

In terms of making sure that we, if we do an acquisition, it does clearly add value to the equation. So we've done a lot of work in getting our balance sheets into much, much, much, much stronger. Our position, the disposal of the Ecuador port in particular, a very important and significant, valuable deal from a group perspective in that we realise the guts of a net $100 million in cash. Negligible impact on earnings. So it's rare to find those kind of deals. So we're very pleased with that. And I think all of those just gives us a little bit more flexibility in terms of all of the normal ongoing capital. allocation analysis that we do, Gary. That's really helpful. Just maybe have a follow on, Rory. I know we've spoken in the past around the M&A pipeline, you know, kind of moving from weakness. Strengths to weakness, et cetera. I mean, how does the kind of current pipeline look right now in terms of prospective targets out there in the market? Well, there are quite a few players, you know, private. Equity guys both in North America and Europe who are looking at exits on a range of deals is pretty public knowledge as well. So, you know, we keep a close eye on all of those opportunities and we have got predetermined. Internal rules around the kind of prices that we're going to pay and, you know, obviously that's impacted or affected by the way the stock market looks at us and how we can be absolutely sure if we do acquire something that it is going to be shareholder value enhancing.

So. The pipeline is interesting. I think I said a couple of minutes ago, the more likely scenario in the short term definitely is some smaller boat on acquisitions that can be interesting to grow in different particular geographies, but we keep our eyes on. You know, all the activity, not just in Europe and North America, but, you know, the Far East, down under Australia and New Zealand and, you know, to see what's happening in the industry and having a bit more financial flexibility. It gives us more capacity to look at deals, but we will remain disciplined in terms of the price we would pay for any acquisition. That's really helpful. Maybe just a change tacked a tiny bit, just moving. To the operational component, just undiversified Americas and the rest of the world, it's been a particularly strong succession of quarters now. I guess I'll ask the same question that I do typically. Which is how sticky do you expect this to be into the future? And as we kind of think about the different moving parts of performance and profitability into FY27, will this be a positive contributing factor there? I think we've done very well in the Americas rest of the world over the last number of years. We're hoping to sustain that. We've been growing the business. Suppliers. We've created some big efficiencies in terms of how we do our marketing and consolidate our different activities in North America.

We've been developing well. Our OPI North American business has performed very well this year. And we've developed across a range of categories in a very strong way there. And we've no reason to think today that we don't have a strong underlying base within that business that gives us a sensible platform to move forward with. That's really helpful. And then maybe just a more kind of wide ranging question just around El Nino. Do you think that there's still a degree of tail risk out there in the market just in terms of yields and potential knock on impacts? Because of that and just maybe a kind of more competitive kind of side of the coin. I mean, do you think that you're better positioned than some of your counterparts out there in the market? And is this a potential opportunity? for Dole from a competitive perspective? Yeah, I mean, we've been watching the El Nino really from the start of the year. And I think as time has progressed, the predictions that it was going. to be one of the strongest on record are starting to come through without a doubt. Over the years, we've, you know, as we've said in previous calls, we've done a lot of work within our own organisations. So, you know, the areas that we get too much rain. And such as Ecuador, we've improved our flood protection, our drainage systems to make sure that we can cope with it as best as we can. And in some of the other areas where you get impacted by drought, we've improved our irrigation systems.

There is no doubt. That it's stronger. It's at the strong end of the predictions and that can have an impact on yields without a doubt, particularly in Central America and a country like Colombia as well has had some quite significant impact. And a lot of variability in weather, which has been particularly unhelpful. So I think certainly in the banana business, we have the broadest diversified sourcing base and that should be helpful to us. But I think the whole industry is going to suffer some shortage of. And that should get reflected in the market reaction to that. On the other categories and diversified, certainly other countries like the northern part of Peru, for example, we believe is going to. Quite seriously impacted on an isolated basis. So we think that can impact on products like blueberries and grapes. We're not too strong in that area, but we're keeping our eyes on it carefully. So there's a bit of volatility. To unfold over the next few months, Gary, but we're watching it carefully and we believe we'll be able to manage our way through it in a satisfactory way. That's super helpful. And maybe just one final question just on the kind of greater cost complex. And just with an eye to customer negotiations, of that kind of component of costs that are more directly negotiated with some of your customers, if possible, can you give us a bit of an indication as to how those discussions are going from a kind of past-true perspective?

Yeah, I mean, as you know, in the two diversified divisions, we've got dynamic pricing that reflects on... ...on an ongoing basis and more directly, and the impact of those cost item changes going into the mix. And we've been able to work our way through that pretty satisfactorily. On the fresh fruit business, which has a higher element of fixed price... ...deals and bananas and pineapples. And those negotiations are starting, they're underway, and we're precluded from getting into too much detail in a public forum around the specifics of... ...pricing or percentage recovering. But for their industry-wide issues, everybody's suffering very similar or broadly similar or even worse consequences than we are. So ordinarily, the market understands that. The market reacts appropriately. So that is our expectation. That's super helpful. I'll pass it on.

Thanks so much.

Thank you, Gary.

Your next question comes in the line of Christopher Barnes.

Hi, good morning.

Good afternoon.

Hopefully you can hear me now. We got you now, Chris. Yeah. Okay, great. I guess first, just coming back to the... the EBITDA guidance, the revised range still implies a relatively strong growth in Q4, like up 9% at the low end. So just given the cost inflation and volatility we've encountered this year, how much visibility... What confidence do you have around that target and just what are the key drivers to keep in mind over this next couple of months? Thanks. Yeah, I mean I think I've tried to outline the drivers in it and we had an expectation of probably an even... stronger Q4. We had a weaker Q4 last year, which is certainly a factor going into the equation, Chris, in terms of the comparator. So that's helpful in terms of setting the benchmark for the outcome for Q4 and probably the biggest single driver in it. Obviously in terms of... In terms of reviewing the guidance, we do a lot of interaction with all of our operating divisions to give our best estimate of what we believe the quarter or the full year is going to come out. But there's no doubt that... this is a complex time to, you know, provide very accurate guidance. So I think, you know, something like a 3% to 5% fall against the expectation is pretty minimal in the overall scheme of things. You know, that's the guidance we put out based on the best information we have today. And, you know, we put it out with the full confidence and expectation that that's the target that we will achieve.

Understood. And just another question around just the broader banana industry. You've alluded to it a couple of times on this call, but obviously your peers have cited some of the unsustainable pricing levels in bananas in mid-year. In terms of inflation, geopolitical disruption, weather, just as production, supply chain, transportation costs continue to rise, just how are you approaching pricing and planning discussions, both with your retailers, but also... with your, like, banana growers into next year and then just, like, the longer, like, medium term? I think that'd be a helpful perspective. Thanks. Yeah, I think, you know, in macro terms, the way we approach it is the way we evolve. We always approach it. We just look at the reality that we're facing. And, you know, if costs go up or yields go down or there's an impact like that, we are very transparent with our customer base. We've been working with our major customer base, both in North America. Europe for a long, long time. There's a high degree of integration in most of the key relationships. And there's a high degree of transparency around the factors affecting the industry in general terms. And I think. Just with the amount of information coming out from the industry, from industry bodies, I think our customer base and some of our grower base are also very, very familiar with all of the issues. So we've an experienced management team, you know, dealing with the ups and downs of the industry, managing it quite effectively over a long period of time, and we'll apply the same rigor thought processes that we've always done and managing through the various.

The labels that you've just identified, Chris, and, you know, historically, we've been able to manage our way through those in a pretty satisfactory way, and we've, you know, hoped to do the same going into 2027. Great. Thank you. And then just one final one for me. Just around El Nino. I'd love just some updated stuff in perspective. Just not, you provided some around like your direct impact on your farms and some of your key growers, but like how resilient would you say the infrastructure? In some of these key growing and sourcing regions is, and how equipped are you to navigate any logistical disruptions that may arise and utilize alternative sourcing to the extent like you have disruptions? On roads or bridges or ports, just some of that, like, indirect. I think we're better equipped than pretty much anybody else in the industry. And, you know, on the banana side, our diversified sourcing base is much better than pretty much all of our competitors. So that gives us a high degree of flexibility around adapting or adjusting of necessary circumstances. But I think, you know, the main infrastructure around roads and bridges or other issues, as you mentioned, I think we're not expecting that kind of fundamental structural damage. This is more storms, short term. storms, you know, very heavy rain or lack of rain in the drought affected areas, but, you know, some heavier storms than usual, but not so heavy that they're going to cause infrastructural damage or inability to handle the fruit.

Got it. That's very helpful.

Thanks so much.

Okay.

There are no further questions at this time. I will now turn a call back to Rory Byrne, CEO, for closing remarks. Thank you. Okay. So to wrap up, I think, you know, we are reasonably pleased with the progress that we've made in the business during the first nine months of the year. Performance demonstrates the resilience of our overall group, and we remain confident in our ability to deliver systems. Sustainable growth and value over the long term. I'd like to give a huge thanks to all of our people across the group, you know, in these kind of years where it's more complicated than normal, we really need and we really value the commitment and the continued hard work from... everybody in all aspects of the group. Really appreciate the support from our shareholders, from our customers and suppliers. So thank you all for joining us today and for your continued interest in DOLE. Thank you.

Thank you for attending.

You may now disconnect.