20 March 2014

Page | 1 MCI (P) 046/11/2013 Ref. No.: SG2014_0040

Del Monte Pacific Ltd Transforming to a global F&B company with five-fold increase in sales to US$2.3b

SINGAPORE | CONSUMER GOODS & SERVICES| INITIATION

Rating: Buy

Del Monte Pacific (DMPL) is dual-listed on SGX Mainboard and the Philippine Stock Exchange. It is a leading Philippine integrated producer, marketer and distributor of quality processed food and beverage products under premium Del Monte (USA, SA, PH, IN, Myanmar) and S&W brand names (Global ex-Oceania). The group is 67%-owned by NutriAsia Pacific Ltd, a leading player in the sauces and condiments market in the Philippines.

Expansion into US$7B packaged fruit and veg market in the US via acquisition of Del Monte Foods DMPL has acquired the consumer food business of Del Monte Corporation in the US for US$1.675 billion on 18 Feb 2014. The acquisition offers DMPL to tap on the US market for growth as well as several value creation opportunities.

Investment Merits

Strong international brand equity in Del Monte and S&W - allows premium pricing against other competitors.

Leading market shares in the US and the Philippines - provide a strong platform for further consolidation and growth.

Globally competitive pineapple producer - remain a low cost but high quality producer for its fresh and processed pineapple-based products.

Experienced management team - combined experience of 200 years in the consumer goods industry.

Key earnings growth drivers

Shift from juice concentrates to more profitable branded RTD beverages.

Continued growth from domestic market in the Philippines.

Expansion of the S&W branded business in North Asia and Middle East.

Expansion of its recently acquired business in the US.

Long-term growth plans

India venture expected to turn profitable from FY2017.

Higher profitability in int’l markets from price adj. of supply agreements.

South America venture to build up the Del Monte branded business.

Risks relating to the US acquisition

Execution and integration

New products and competition

Financial and indebtedness

Share dilution

Risks relating to group operations

Trademark and company name

Access to land

Agricultural output

Security situation in Mindanao

Investment Action We are positive on DMPL for its key growth drivers and excellent growth potential. Factoring in post-acquisition effects, preference dividends and share dilution, we estimate the shares to be currently trading at about FY13 PE 18.3x and FY14F (end Dec) PE of 15.9x, which are lower than its peers' average. We initiate coverage on DMPL with a "Buy" rating, in view of its investment merits and excellent growth potential. Based on its peers' average, we derive a target price of S$0.82, pegged at 21 times FY14F EPS (post-acquisition adjusted). This implies at least 30% upside from the closing price.

Target Price (SGD) 0.82

Forecast Dividend (SGD) 0.01

Closing Price (SGD) 0.63

Potential Upside

Company Description

Company Data

Raw Beta (Past 2yrs weekly data) 0.94

Market Cap. (USD mn / SGD mn) 640 / 810

Ent. Value (USD mn / SGD mn) 785 / 993

3M Average Daily T/O (mn) 2.6

Closing Px in 52 week range 0.58 0.99

Major Shareholders (%)

67.1

8.2

1.1

Valuation Method

21.0x FY14F EPS

Analyst

Colin Tan

col intanwh@phi l l ip.com.sg

+65 6531 1221

33.3%

1. Nutrias ia Paci fic Ltd

3. Warburg Invest Kapita lanlageges

Del Monte Paci fic Ltd (DMPL) is a group of

companies that provides premium qual i ty,

hea lthy food and beverage products . DMPL

has exclus ive rights to use the Del Monte

trademarks for packaged products in the US,

South America , the Phi l ippines , Indian

subcontinent and Myanmar. It a lso owns the

trademark of i ts fas test growing brand S&W

global ly ex. Oceania .

2. Lee Pineapple Co Pte Ltd

0

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0.80

0.90

1.00

Mar-13

May

-13

Jul-1

3

Sep

-13

No

v-13

Jan-1

4

Mar-14

Volume, mn DELM SP Equity STI rebased

Del Monte Pacific Ltd 20 March 2014

Page | 2

Table of Contents

Business Overview ...................................................................................................................................................................... 3

Strong Domestic Growth in the Philippines ................................................................................................................................ 4

S&W - an Excellent Platform for Global Expansion ..................................................................................................................... 5

Expansion into US$7B packaged fruit & veg market in the US via acquisition of Del Monte Foods .......................................... 6

Key Investment Merits ................................................................................................................................................................ 7

Key Risk Factors ........................................................................................................................................................................... 8

Some Key Competitors in Various Markets ................................................................................................................................ 9

Financing of the US$1.675 billion Acquisition ........................................................................................................................... 10

Financials and Forecasts ............................................................................................................................................................ 10

Outlook and Valuation .............................................................................................................................................................. 12

Appendix ................................................................................................................................................................................... 16

History of Del Monte ............................................................................................................................................................. 16

Board of Directors ................................................................................................................................................................. 17

Management Team ............................................................................................................................................................... 17

Funding for the Acquisition ................................................................................................................................................... 18

Pineapple Cultivation ............................................................................................................................................................ 19

Top Producing and Exporting Countries for Pineapples ....................................................................................................... 20

Share Transfer Process – From Singapore to Philippines and vice-versa ............................................................................. 21

Del Monte Pacific Ltd 20 March 2014

Page | 3

Business Overview Del Monte Pacific (DMPL) is principally engaged in growing, processing, and selling canned and fresh pineapples, pineapple juice, tropical mixed fruit, tomato-based products, beverage products and certain other foods products mainly under the premium brand names such as Del Monte and S&W. DMPL owns the Del Monte trademarks for packaged products in the United States, South America, the Philippines, Indian subcontinent and Myanmar.

Note: DMPL is not affiliated with other Del Monte companies in the world, which include Fresh Del Monte Produce, Inc., Del Monte Canada, Del Monte Asia Pte. Ltd, and these companies' affiliates. Refer to appendix on a brief history of Del Monte. Growing its branded business in existing markets DMPL aims to be one of the fastest growing branded food and beverage company, steering towards more branded sales in order to deliver higher margins and more sustainable profits. The branded business comprises of Del Monte branded sales in the Philippines and the Indian subcontinent (all processed), along with S&W branded sales in Asia and the Middle East (both fresh and processed). Its branded sales have grown at 9% CAGR (3Y) and accounts for 70% of total revenue in FY13. Non-branded business accounts for remaining 30% of sales Non-branded business segment includes sales of private label and non-branded processed fruits, beverages, other processed products and non-branded fresh fruit in Asia Pacific and Europe. DMPL also engages in sales to other non-affiliated Del Monte companies operating in the regions at market prices. It has long-term legacy supply agreements with other non-affiliated Del Monte companies. Joint venture (JV) in India for processed products and fresh produce In India, DMPL owns about 94% of a holding company that owns 50% of FieldFresh Foods Private Limited (effective stake: ~47%). FieldFresh markets processed products under the Del Monte brand in the domestic market and exports fresh produce under FieldFresh brand. Operates one of the largest fully-integrated pineapple operations in the world DMPL has a history of over 88 years of pineapple growing and processing. It operates a 23,000-hectare plantation in the Philippines, a cannery with a processing capacity of over 700,000-ton and a port beside the cannery. DMPL operates one of the world's largest pineapple plantations, in which it grew its pineapples for its canned pineapples, pineapple-based concentrates and juices and supply of fresh pineapples. Fig 2: Fully integrated operations

Source: Company

Fig 1: Del Monte and S&W premium brand logos

Source: Company Fresh Del Monte Produce, Inc. owns the rights for fresh fruits, fresh vegetables and fresh produce under the Del Monte brand globally. DMPL does not have the rights to use the Del Monte brand for fresh produce.

Del Monte Pacific Ltd 20 March 2014

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Strong Domestic Growth in the Philippines In the Philippines, DMPL sells Del Monte branded processed products through its subsidiary, Del Monte Philippines, Inc. (DMPI). Products include processed pineapple and tropical mixed fruit (in cans and pouches), juice drinks (in cans, doy packs and 1 litre Tetra carton), and culinary products such as sauces, ketchup, condiments and pasta. Culinary and beverage account for approximately 40% each of total Philippines sales while the processed fruits segment the balance 20%. Competitive advantages DMPI have in the Philippine markets are:

Established Del Monte as a strong household brand over 88 years history.

Wide distribution network, with 16 distributors nationwide to cover 150,000 general trade accounts such as wholesalers, public markets and retail stores.

Sustained marketing efforts to promote health benefits of its pineapples, pineapple juice variants and tomato-based products, driving strong sales.

Cost efficiency from its fully-integrated pineapple operation. Sales from the Philippines contribute 85% of branded business sales (60% of total revenue) and are the most profitable over other branded segments. DMPI enjoys leading market shares in the Philippines for processed fruit, culinary and beverage products. We believe it can continue to maintain its market position through innovation and marketing.

Market shares in the Philippines:

Canned pineapple: 82%

Canned mix fruit: 75%

Canned RTD juices: 91%

Tomato sauce: 79%

Spaghetti sauce: 57%

Source: Nielsen Retail Index, May 2013 Fig 3: General/Modern Trade Mix in sales in the Philippines:

Modern

Trade

30%

General Trade

70%

Source: Company, PSR

Fig 4: Del Monte Products in the Philippines

Source: Company

Fig 5: New Juice Drinks Launched in the Philippines in Nov 2013

Source: Company

Fig 6: Display of Del Monte Products on shelves

Source: Company

"Branding gives you an exceptionally effective way

to broadcast who you are to your target market

quickly and efficiently" - MultiChannel News

"These things stick in people's minds. Heritage in

a category is a powerful differentiator" - Jack

Trout

Del Monte Pacific Ltd 20 March 2014

Page | 5

S&W - an Excellent Platform for Global Expansion DMPL acquired the S&W brand in Nov 2007 and has global rights except for Australia and New Zealand. Sales of US$8m in FY08 have since grown more than 4 times to US$40m in FY13. The S&W branded sales comprises of fresh produce and processed products in Asia and the Middle East. S&W Fresh DMPL sells fresh pineapples in Asia, mainly South Korea, China, Japan, Taiwan, Singapore and the Middle East. South Korea and China account for about 55% of fresh pineapple sales. This segment has few dominant competitors, which include Dole, Fresh Del Monte and Lapanday. These companies export fresh pineapples out of Philippines. Fresh pineapple business commands higher gross margins at 33% (3Y avg) as compared to 16% gross margin (3Y avg) for processed products. S&W Processed Products The S&W processed products include a range of canned fruits, vegetable, tomatoes, beans and juices. China and South Korea are the 2 biggest markets, accounting for close to 40% of S&W processed product sales. Canned pineapples and juices account for about 50% of total processed products sales, in line with DMPL's strategy to capitalise on core competence. Sales can be categorised in 3 clusters: i. North Asia Key competitors in canned pineapple and juices are Dole and Del Monte Asia, along with other low-priced products from Thailand. DMPL plans for further growth in this segment through the following:

Penetrate the beverage market with canned ready-to-drink (RTD) juices.

Capture demand for canned pineapple market in Japan.

Distribute new products such as fruits in cups and pasta sauce in China. ii. South East Asia DMPL has firm market presence in Singapore, Malaysia and Thailand. Key competitors include Del Monte Asia, Hosen for canned pineapple, Hunts for tomatoes and Pokka for beverages. The Group intends to grow in the canned RTD juices and new culinary product markets in Singapore, Malaysia and Indonesia. iii. Middle East Sales in this market began in 2012 and expected to increase its contribution significantly to total S&W process products sales over time. Sales in this region will focus on canned pineapples and beverages. Key competitors are Dole for canned pineapple and Rani, Del Monte and other local brands for juices. Fig 8: Geographical mix in S&W Processed Sales:

North As ia

60%

South East As ia

33%

Middle East7%

Source: Company, PSR

Fig 7: S&W Products in Asia:

Source: Company S&W offers quality "Sweet 16" pineapples, a commercially highly successful MD2 variety. Compared to regular varieties, the MD2 is sweeter with lower acidity. It contains as much as 4 times more vitamin C and has 9 days longer shelf life as well. Distributors for S&W processed products:

South Korea Shinsegae, SPC, Misung

China Crown Asia

Hong Kong Li and Fung

Japan Lead Off Japan

Singapore HL Yong and NTUC Fairprice

Indonesia PD Sinar Abadi

Source: Company Distributors for S&W fresh pineapples:

South Korea Shinsegae

China Eachtake

Japan IPM Nishimoto

Singapore NTUC Fairprice

Middle East Farzana

Source: Company

Del Monte Pacific Ltd 20 March 2014

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Expansion into US$7B packaged fruit & veg market in the US via acquisition of Del Monte Foods On 11 Oct 2013, DMPL announced the proposed acquisition of the consumer food business from Del Monte Foods in the US for US$1.675 billion. It has completed the purchase of the consumer food business, which was renamed as Del Monte Foods Inc. (DMFI), on 18 Feb 2014. The acquisition gives access to the US market, where DMPL did not have a direct presence prior to it. It offers DMPL to tap on the US market for growth as well as several value creation opportunities:

Expand product offerings in the US to include new culinary and beverage products.

Platform to offer certain products appealing to the fast growing Hispanic and Asian American population in the US.

Effective cost management in areas which include optimisation of underutilised production facilities and reduction of overhead expenses.

Synergies from vertical integration as DMPL will benefit from wider access to the processed pineapple business in the US.

Expand its business in new markets and product categories in the untapped South America business.

The US food business owns a portfolio of other premium brands apart from the Del Monte trademark, which include S&W, Contadina and College Inn. The company enjoys leading market shares for processed fruits and vegetables and #2 positions for tomatoes and broth, competing in the US market of about US$7 billion of annual retail sales. Despite 26% market share in the canned fruit market however, its share in the canned pineapple segment is < 10%. DMPL is expected to increase penetration in this segment, leveraging on its competitive strengths. The company works with most food retailers in the US, including Walmart, its most significant customer. Walmart accounts for 29% of gross sales as of fiscal year end Apr 2013. DMPL will retain key management in the US, which include Mr. Nils Lommerin, who was COO and has been with Del Monte Foods since Mar 2003. With Mr. Lommerin as CEO of DMFI, this will allow DMPL to leverage on his and his team’s experience and reduce the integration and execution risk for the US food business. With the acquisition, DMPL sales increases five-fold, where the acquired business generates about US$1.8b annual sales in fiscal year 2013 (end Apr), about 4 times of DMPL sales, and US$164 million in EBITDA. Comparing net profits, DMFI is estimated about 2 times that of DMPL. Net profits were of lower multiple due to lower margins and higher taxes in the US.

Fig 10: DMFI Revenue Breakdown (based on 12M end Dec 2012)

private labels

7%

non

reta i l /other

22%

Del Monte

61%

S&W

3%

Contadina

4%

Col lege Inn

3%

Source: Company, PSR Financing of US$1.675 billion acquisition The funding for the acquisition will be funded through a combination of equity, and institutional debt financing. Refer to later section for more details.

Market shares in the US:

Processed fruit: 26.6%

Processed vegetables: 23.9%

Processed tomatoes: 11.3%

Broth products: 9.5%

Source: Company Circular Hispanic and Asian make up about 22% of US population. Source: US Census Bureau, 2012

Pineapples were some of the most popular canned fruits in the US, along with apples, applesauce, peaches, and pears. Fig 9: Est. per capita availability of canned fruits (adj for loss) in the US, 2011

Others

7%

Peaches

20%

Pineapples

21%

Pears

21%

Apples and

applesauce

31%

Source: USDA/ERS, PSR

Del Monte Pacific Ltd 20 March 2014

Page | 7

Key Investment Merits #1. Strong international brand equity in Del Monte and S&W Del Monte brand has been in existence since 1892, and is a worldwide brand, supported by a number of significant marketing and distribution entities around the world. The Del Monte trademark represents a projection of product quality to the consumer and allows premium pricing against other competitors.

S&W was founded in 1896 and has since grown to a global brand known for quality food and sauces. It allows DMPL to market branded products in regions where it does not have the rights to Del Monte brand. It also allows marketing of fresh produce under the S&W brand worldwide (except Australia and New Zealand). #2. Leading market shares in the US and the Philippines DMPL's branded pineapples and several of its non-pineapple products enjoy leading market positions, providing it a strong platform for further consolidation and development towards a fast growing food and beverage company. Extensive and efficient distribution network in both the US and the Philippines will allow DMPL to compete effectively with other competitors. #3. Globally competitive pineapple producer Supply of pineapple are mostly provided by DMPL's own plantation and its own processing and canning facility in the Philippines, providing security of supply. DMPL would benefit from economies of scale, allowing it to remain as a low cost but high quality producer for its fresh and processed pineapple-based products. #4. Experienced management team Many of the executive officers each has over 20-30 years of experiences in the consumer goods industry. The team's combination of skills, experience and innovation in core areas of brand marketing and distribution, processing and agriculture will help to drive growth in the food and beverage business.

Key earnings growth drivers

Shift in juice product mix from industrial pineapple juice concentrates (PJC) to more profitable branded RTD beverages.

Continued growth from domestic market in the Philippines.

Expansion of the S&W branded business in North Asia and Middle East.

Expansion of its recently acquired business in the US.

Long-term growth plans

India venture expected to turn profitable from FY2017.

Higher profitability in international markets from pricing adjustment of supply agreements.

South America venture, through strategic alliances with potential JV partners to build up the Del Monte branded business.

Turnaround profit in Indian JV expected by 2017 DMPL entered into a JV with Bharti Group in Sep 2007. Focus for the joint venture is to build up the Del Monte branded business in Indian domestic markets, as well as the fresh vegetables exports business under the FieldFresh brand to the UK and Europe. DMPL has been recognising equity losses in the JV, due to business building initiatives and weakening of the Indian rupee. Management has shared that sales in India is growing strongly and expects for a turnaround profit by FY17. Shift to more favourable pricing in its long-term supply agreements DMPL incurs losses on the supply contracts with Del Monte Foods (now DMFI) and Fresh Del Monte. With the acquisition, the supply agreement with DMFI will be internal and beneficial to the group as a whole. Supply of fresh pineapples to Fresh Del Monte will shift to market pricing beginning Jan 2015. The upside from the shift to market pricing is expected to be >US$3 million in operating profit.

Fig 11: S&W brand footprint (Americas excluded)

Source: Company

More information on history of Del Monte, DMPL's pineapple plantation and its management team structure can be found in the appendix. Fig 12: Pineapple juice vs PJC export price (USD/tonne) in the Philippines:

0

200

400

600

800

1000

1200

1400

2005 2006 2007 2008 2009 2010 2011

Pineapple Juice Price PJC Price

Source: FAOSTAT, PSR Lead FieldFresh products are baby corn and sweet corn. FieldFresh is the only sweet corn exporter from India and the largest exporter for baby corn. DMPL had 3 long term legacy supply agreements:

1. supply of processed fruits and PJC to Del Monte US (acquired);

2. supply of processed fruit and pineapple juice concentrate to Del Monte Asia;

3. supply of fresh pineapple to Fresh Del Monte Produce Inc.

Del Monte Pacific Ltd 20 March 2014

Page | 8

Key Risk Factors Relating to the US food business acquisition Execution and integration While there may be challenges to achieve smooth integration, DMPL subsidiaries already had dealings with DMFI staff under the supply agreement, which would help to mitigate the risk. In addition, we believe the current management team is well experienced to manage this risk aspect. New products and competition DMPL has plans to grow in the beverage segment, which DMFI does not have a significant share. Though the US beverage market is large (a US$50 billion market), it is also very competitive with major competitors such as Coca-Cola Company and Pepsico, Inc. However, we think DMPL is well-positioned to tap on its core competency and grow in the pineapple and other tropical fruit juice segments. Financial and indebtedness As a result of the large-scale acquisition and the financing involved, the gearing for the company will increase significantly. Management expressed it would tap on several options to manage the risk, which include:

Interest rate swaps - from variable to fixed interest rates.

Reduce dividend payout (current policy states minimum of 33% payout).

Equity financing – preference shares and rights issue.

Share dilution As a result of the equity financing for the acquisition, percentage ownership of the current shareholders will decline. Refer to later section for details on the financing. Relating to group operations Trademark and company name Several companies worldwide use "Del Monte" as part of their corporate name and own exclusive rights to the trademark. Any news or rumors and product liability issues concerning them could have negative effects on the brand or DMPL. The company would issue clarificatory statements to address such events. Access to land DMPL leases land for its 23,000-hectare plantation in Mindanao, Philippines. Much of the land is under leases with over 1,700 private landowners, under long-term renewable agreements ranging from 10 to 25 years since 1997. Agricultural output Output of the plantation may be negatively impacted by factors relating to weather conditions, crop yields, outgrowers, leasehold arrangements, etc. Succession planting is carried out to minimise any impact and ensure continuity of harvest under adverse conditions such as heavy rainfall, flooding or drought. Security situation in Mindanao Since the 1960s, several Muslim and communist groups in Mindanao have sought autonomy of Mindanao from the rest of the Philippines and the establishment of a separate constitution. All operations of the Group based in Mindanao however, are located in the northern part of the island where the population is predominantly Catholic. To mitigate any insurgency risks in its operating units, DMPL conducted a comprehensive review of and has strengthened its security systems and measures. Other risk factors include:

FX risks

Inflation risks

Environmental regulatory risks

Coca-Cola markets fruit juice products under “Minute Maid”, while Pepsico offers juice products under “Tropicana” brand.

In a recent announcement made on 14 Mar 2014, a peace treaty between the government and the Moro Islamic Liberation Front (MILF), one of the most active armed separatist groups, will be signed on 27 Mar 14, ending decades of conflict in the south of the Philippines DMPL has a natural hedge between the Philippine Peso and US dollar to a certain extent, due to its revenue and cost mix.

Del Monte Pacific Ltd 20 March 2014

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Some Key Competitors in Various Markets

Philippines Processed pineapples: Dole Tomato-based: ConAgra Foods (Hunts), Nestlé (Maggi), Heinz local brands - Universal Robina, Mama Sita, Nutri-Asia Juice beverages: Coca Cola (Minute Maid), Pepsico (Tropicana), Dole Asia Fresh pineapples: Dole, Fresh Del Monte, Lapanday Processed pineapples: Dole, Del Monte Asia, Hosen, Rani (Middle East) Tomato-based: ConAgra, Heinz, Nestlé Juice beverages: Coca Cola, Pepsico, Pokka, F&N, Del Monte Asia, local brands United States Fruits: Dole, Seneca Foods, Pacific Coast Producers Vegetables: General Mills, Seneca Foods Tomato-based: ConAgra, Heinz, Unilever Broth: Campbell Soup Juice beverages: Coca Cola, Pepsico, Dr Pepper Snapple

DMPL’s Competitive Advantages

Premium brand names with over 100-years history

Fully integrated operations for quality processed and fresh pineapples

Global market presence, with wide distribution channels network

Dole is another large pineapple producer that can compete with DMPL in economies of scale in the fresh and processed pineapple segments. Dole has pineapple plantations in Costa Rica and in the Philippines. Kikkoman Corp of Japan owns Del Monte in Asia (excl. Philippines, Myanmar and Indian subcon)

Fig 13: Peer comparison on profitability

Market Ent.

Bloomberg Cap. Value

Company Ticker FYE (US$'mn) (US$'mn) FY12 FY13 FY12 FY13 FY12 FY13 FY12 FY13 Comments

US

COCA-COLA CO/THE KO US Equity Dec 168,173 185,251 60.3 60.7 26.6 26.0 22.4 21.8 18.8 18.3

PEPSICO INC PEP US Equity Dec 123,320 143,432 52.2 53.0 18.0 18.6 13.9 14.6 9.4 10.1

GENERAL MILLS IN GIS US Equity May 31,083 39,407 36.3 36.1 19.2 19.5 16.0 16.2 9.4 10.4

CONAGRA FOODS CAG US Equity May 12,368 21,855 21.0 23.0 9.0 12.1 6.2 9.2 3.5 5.0

CAMPBELL SOUP CO CPB US Equity Jul 13,821 17,722 39.2 36.2 19.8 19.1 16.2 14.0 10.8 5.7

SENECA FOODS-A SENEA US Equity Mar 336 596 7.4 11.1 3.8 7.7 2.0 5.8 0.9 3.2

FRESH DEL MONTE FDP US Equity Dec 1,564 1,811 10.0 7.9 6.9 5.0 4.8 3.1 4.2 (0.9)

DR PEPPER SNAPPL DPS US Equity Dec 10,333 12,754 58.3 58.3 22.2 22.3 18.2 18.4 10.5 10.4

DOLE FOOD CO INC DOLE US Equity Dec n/a n/a 8.4 8.7 4.5 3.8 2.4 1.3 0.8 (3.4) Acquired on Nov-13

HJ HEINZ CO HNZ US Equity Apr n/a n/a 34.7 36.4 16.0 17.4 13.1 14.4 8.0 8.8 Acquired on Jun-13

NESTLE SA-REG NESN VX Equity Dec 237,302 255,591 47.2 47.9 18.2 19.3 14.9 15.8 11.4 10.8

UNILEVER PLC ULVR LN Equity Dec 116,676 128,986 40.2 - 16.0 - 13.6 - 8.7 -

KIKKOMAN CORP 2801 JP Equity Mar 3,857 4,464 40.4 41.0 10.7 10.7 6.3 6.6 3.2 3.7

UNIVERSAL ROBINA URC PM Equity Sep 6,725 6,413 25.9 28.7 15.8 17.2 11.0 12.7 10.9 12.4

SAN MIGUEL SMC PM Equity Dec 3,368 17,118 19.3 14.9 14.1 10.3 10.5 7.4 3.3 3.9

FRASER AND NEAVE FNN SP Equity Sep 3,973 4,787 33.2 33.1 17.3 18.9 13.2 16.7 23.5 17.6 FY13 profit adj. to excl gain on disposal

HOSEN GROUP LTD HOSEN SP Equity Dec 18 26 17.3 - 2.4 - 1.3 - 0.8 -

Peers' Average 32.4 33.1 14.2 15.2 10.9 11.9 8.1 7.7

DEL MONTE PAC LT DELM SP Equity Dec 610 754 24.5 23.5 14.3 9.6 10.9 5.6 7.0 3.3 fees incurred fr acquisition in FY13

Margin

ProfitEBITDA

MarginMargin

Gross Operating

Margin

Source: Bloomberg, PSR

Del Monte Pacific Ltd 20 March 2014

Page | 10

Financing of the US$1.675 billion Acquisition DMFI will take up institutional debt of up to a total of US$970 mil, comprising of 2 term loans. DMPL Group will also obtain financing of up to US$670.5 mil, which comprises of bridging loans and a US$80 mil drawdown from existing credit facility. Bridging loans will be refinanced with preferred shares (US$350 mil) and rights issue (US$165m). A mid-term loan may be tapped on to refinance the remaining bridging credit facilities of US$75.5m. US$74.5 mil minority stake in DMFI to third party investors The holding company of DMFI (DMPL Foods Ltd) has entered into an agreement on 4 Feb 14, to issue new shares to 2 investors for a minority stake of US$74.5mil in DMFI (assumed 10% non-controlling interest), as part of the financing for the acquisition. Investors are Ace Profit Enterprise Ltd and Anatoli Holdings Company Ltd, each agreed to an equity investment of US$37.25 mil. Financials and Forecasts Following a strong recovery in revenue growth in FY10, revenue has grown at 3Y CAGR of 9%, mainly due to growth in the branded business. With dominant market position in the Philippines and strong growth in the S&W branded sales in Asia, we believe DMPL can maintain its (recurring) revenue growth.

Refer to appendix for details. More info on the group structure can be found in the appendix.

Fig 14: Branded vs non-branded sales (US$ mn)

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400

FY07 FY08 FY09 FY10 FY11 FY12 FY13

0%

5%

10%

15%

20%

25%

30%

35%

40%Sales (Branded) Sa les (non-branded)Gross margin (Branded) Gross margin (non-branded)

Source: Company, PSR Fig 16: Breakdown in sales - Branded & non-branded (US$mn)

-

50

100

150

200

250

300

350

400

FY07 FY08 FY09 FY10 FY11 FY12 FY13

Branded sa les non-branded sa les (APAC)non-branded sa les (ENA) non-branded (supply contract)

Source: Company, PSR

Fig 15: Branded vs non-branded operating profit (US$ mn)

0

10

20

30

40

50

60

FY07 FY08 FY09 FY10 FY11 FY12 FY13

Ops profit (branded) Ops profit (non-branded)

Source: Company, PSR Fig 17: Breakdown in operating margins (%) (recurring-basis)

-10%

-5%

0%

5%

10%

15%

20%

25%

FY07 FY08 FY09 FY10 FY11 FY12 FY13

Branded biz Non-branded biz - APACnon-branded biz - ENA supply contracts

Source: Company, PSR

FY09: margin impacted due to supply issues, and higher input costs; supply issues led to forgone sales, result in lower revenue.

Ops profits adj to exclude one-off expense of US$25.3m relating to US acquisition.

terminated supply contract to Europe (est > US$4-5 mil upside in ops profit).

gain from supply to Del Monte for Asian markets.

Del Monte Pacific Ltd 20 March 2014

Page | 11

Fig 18: EPS, DPS (US cents) with dividend payout (%)

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

FY07 FY08 FY09 FY10 FY11 FY12 FY13

0%

20%

40%

60%

80%

100%EPS DPS Div payout %

Source: Company, PSR Fig 20: Cash, Debt (US$ mn) and Net Gearing (%)

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300

FY07 FY08 FY09 FY10 FY11 FY12 FY13

0%

10%

20%

30%

40%

50%

60%

70%Cash Debt Net gearing (%)

Source: Company, PSR Fig 21: Revenue (US$ mn) forecast

0

100

200

300

400

500

600

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14F FY15F

-20%

-10%

0%

10%

20%

30%

40%Revenue Revenue %y-y

Source: Company, PSR est. Fig 22: Net profit (US$ mn) forecast

0

5

10

15

20

25

30

35

40

45

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14F FY15F

0%

10%

20%

30%

40%

50%

60%

70%

80%Net profit, reported Net profit, adj %y-y

Source: Company, PSR est.

Fig 19: Operating, Investing, Financing cash flows (US$ mn)

-100

-50

0

50

100

150

200

FY07 FY08 FY09 FY10 FY11 FY12 FY13

CFO CFI CFF Total CF

Source: Company, PSR Note: Forecasts do not include financials from acquired US business as DMPL has yet to consolidate them in its FY13 financials (end Dec) DMPL will align its financial year reporting with that of Del Monte Foods, Inc (May to April FY) for the next FY reporting.

Forgone sales and higher input costs from severe supply issues led to decline in net profit.

FY13: one-off fees (net tax) of US$16.6m; 1Q14: est. fees (net tax) of US$6.5m. (fees relate to US acquisition)

Final dividends omitted under prudent approach by mgt due to US acquisition.

FY15F: est. US$2.3m profit (net tax) upside from shift to market pricing in supply contract to Fresh Del Monte.

due to one-time fees; new shares were also issued from dual-list in PSE.

Del Monte Pacific Ltd 20 March 2014

Page | 12

Outlook and Valuation We are positive on growth in sales from the domestic market in the Philippines and the S&W branded business in Asia. DMPL has established a strong brand recognition in the Philippines and has gained dominant market positions in various product categories it offers. As income rises in emerging markets in Asia, more consumers would have a higher percentage of discretionary income. This would likely lead to an increase in expenditure on branded consumer products, which many consumers may not be able to afford previously. With its competitive advantages and a growing health consciousness trend among consumers, we believe DMPL would stand to benefit from growth in emerging markets in Asia. On our outlook for the acquired US business however, we think it is less likely to have strong growth in the immediate to short term. This is in view that the US market is more developed than the Asian markets and is also more competitive, with strong competitors having significant market shares. On a positive note, we see excellent growth potential in the South America market, though the growth prospects would only be realised in the long term. In the short to medium term, we believe DMPL will likely gain on synergies and effective cost management, as well as penetration into the canned pineapple and new product categories segments in the US. With regards to the increased financial and indebtedness risk, we think DMPL would be able to de-leverage significantly within 7-9 years. The combined group would be able to generate about US$100m in free cash flow as per our estimates. With US$970m debt amount being paid off, net gearing would reduce to a comfortable level. We are positive on DMPL for its key growth drivers and excellent growth potential. Factoring in post-acquisition effects, preference dividends and share dilution, we estimate the shares to be currently trading at about FY13 PE 18.3x and FY14F (end Dec) PE of 15.9x, which are lower than its peers' average. We initiate coverage on DMPL with a "Buy" rating, in view of its investment merits and excellent growth potential. Based on its peers' average, we derive a target price of S$0.82, pegged at 21 times FY14F EPS (post-acquisition adjusted). This implies at least 30% upside from the closing price.

Fig 23: Household consumption expenditure in the Philippines (PH₱ bn)

0

200

400

600

800

1000

1200

Mar-09

Sep-09

Mar-10

Sep-10

Mar-11

Sep-11

Mar-12

Sep-12

Mar-13

Sep-13

0%

2%

4%

6%

8%

10%

12%

14%

16%HCE: Food & Non-alcoholic beverages %y-y growth

Source: CEIC, PSR Fig 24: Personal consumption expenditure in the US (US$ bn)

600620640660680700720740760780

Mar-09

Sep-09

Mar-10

Sep-10

Mar-11

Sep-11

Mar-12

Sep-12

Mar-13

Sep-13

-4%

-2%

0%

2%

4%

6%

8%PCE: Food & Non-alcoholic beverages %y-y growth

Source: CEIC, PSR

Fig 25: Peer Comparison

Market Ent.

Bloomberg Price Cap. Value

Company Ticker Rating FYE (local curr) (US$'mn) (US$'mn) FY13 FY14F FY13 FY14F FY13 FY14F FY13 FY14F FY13 FY14F

US listed

COCA-COLA CO/THE KO US Equity N.R. Dec 38.40 169,186 186,264 19.9 18.3 5.5 4.9 16.3 13.9 26.0 27.3 2.7 3.1

PEPSICO INC PEP US Equity N.R. Dec 81.95 124,766 144,878 18.9 18.1 5.2 5.3 11.9 11.2 29.0 28.8 2.7 3.1

GENERAL MILLS IN GIS US Equity N.R. May 50.71 31,670 39,994 18.2 17.7 4.1 4.6 11.3 11.2 24.9 26.3 2.7 3.0

CONAGRA FOODS CAG US Equity N.R. May 29.81 12,532 22,019 20.7 13.4 2.8 2.1 12.9 9.3 16.0 16.6 2.8 3.4

CAMPBELL SOUP CO CPB US Equity N.R. Jul 44.37 13,921 17,822 19.1 17.6 12.1 8.8 12.2 11.1 43.3 54.6 2.5 2.8

SENECA FOODS-A SENEA US Equity N.R. Mar 31.63 339 599 9.1 n/a 1.0 n/a 6.3 n/a 11.3 n/a 0.0 n/a

FRESH DEL MONTE FDP US Equity N.R. Dec 28.10 1,580 1,827 15.7 14.5 0.9 n/a 10.0 8.9 (2.0) n/a 1.8 n/a

DR PEPPER SNAPPL DPS US Equity N.R. Dec 52.77 10,410 12,831 15.2 15.5 4.2 4.6 9.0 9.5 27.4 29.8 3.1 3.1

DOLE FOOD CO INC DOLE US Equity N.R. Dec #N/A N/A n/a n/a 51.3 n/a 1.5 n/a 16.3 n/a (19.5) 2.9 0.0 n/a

HJ HEINZ CO HNZ US Equity N.R. Apr #N/A N/A n/a n/a 20.0 n/a 8.3 n/a 13.4 n/a 36.4 36.4 2.8 n/a

Non-US listed

NESTLE SA-REG NESN VX Equity N.R. Dec 65.15 240,027 258,326 20.8 18.5 3.3 3.0 12.6 12.6 16.2 17.0 3.3 3.4

UNILEVER PLC ULVR LN Equity N.R. Dec 2,390 117,552 129,862 - 17.7 - 5.0 - 11.2 - 28.9 - 4.0

KIKKOMAN CORP 2801 JP Equity N.R. Mar 1,880 3,893 4,500 30.2 27.2 1.8 1.9 12.5 12.7 6.2 7.0 1.2 1.0

UNIVERSAL ROBINA URC PM Equity N.R. Sep 140.10 6,809 6,498 26.7 27.6 5.3 5.6 18.6 17.6 20.7 21.1 1.2 2.1

SAN MIGUEL SMC PM Equity N.R. Dec 71.00 3,760 17,510 11.6 16.7 1.0 n/a 11.2 9.8 9.2 n/a 1.7 1.5

FRASER AND NEAVE FNN SP Equity N.R. Sep 3.50 3,995 4,808 11.9 8.7 0.9 0.6 12.1 6.4 67.4 7.2 2.8 4.9

Peers' Average 20.6 17.8 3.9 4.2 12.4 11.2 20.8 23.4 2.1 2.9

DEL MONTE PAC LT DELM SP Equity Buy Dec 0.625 640 785 18.3 18.1 2.9 2.6 16.6 11.4 6.7 12.2 1.3 2.3

Dividend yield (%)P/E (X) P/B (X) EV/EBITDA ROE (%)

Source: Bloomberg, PSR est. *FY14F figures for DMPL do not reflect consolidation of DMFI.

Del Monte Pacific Ltd 20 March 2014

Page | 13

Fig 26: Estimated post acquisition effects on financials Amounts in USD million

Acquisition Funding - Phase 1

Amount Est. interest paymt Est. interest rate (%) Comments

Debt financing at acquired company 970 (51.6) 5.3% syndicated loans ; Libor-based rates (floating)

Exis ting credit faci l i ty 80 (1.7) 2.1% 3y faci l i ty

Bridging credit faci l i ty 35 (0.4) 2.1% expect to be replaced by mid-term loan in 6 mths

Bridge loan 350 (7.0) 4.0% expect to be replaced by pref shares in 6 mths

Bridge loan 165 (1.9) 3.5% expect to be replaced by equity in 4 mths

Equity investment by 3rd party investors 75 minori ty s take in holding co. for acquired bus iness

Mid-term loan

Total 1,675 (62.6)

DMPL FY13 Acquired company Combined entity Comments

Sales 492 1,842 2,316 es t. US$18m of intercompany transaction el iminated

operating profi t (less : one-time fees relating

to acquis i tion)

54 103 152 es t. US$6m profi t el iminated due to: 1) inter co. trans ; 2)

settlement loss on contract btw. 2 enti ties

Exis ting interest exp (5) - (5)

es t. new tota l interest exp (16) (52) (68)

PBT 33 52 85

Tax (7) (16) (23) assumed 22% tax for DMPL; 30% tax for US biz

PAT 26 36 62

Associates/JV (5) - (5)

non-control l ing interest 0 (4) (3) es t. MI due to investors ' US$74.5m investment

PATMI 21 33 54

Exis ting net debt 147 - 147

es t. new tota l net debt 777 970 1,747

Equity 223 75 298 US$74.5m minori ty s take from 3rd party investors

net debt/equity 5.86

Current out. shares (mn) 1,296

Clos ing share price (SGD) 0.625

FX rate (SGD:USD) 1.266

Market cap (USD) 640

FY13EPS to ordinary shareholders (US cents) 4.2

FY13 P/E 11.9

FY14FEPS to ordinary shareholders (US cents) 4.6

FY14F P/E 10.8 adj. to excl one-time fee

Acquisition Funding - Phase 2

Amount Est. interest paymt Est. rate (%) Comments

Mid-term loan 35 (0.4) 2.1% to replace bridging credit faci l i ty

Preference shares i ssuance 350 6.0% to replace US$350m bridge loan

Share rights i ssue 165 to replace rest of bridge loan faci l i ties

Equity investment by 3rd party investors 75 minori ty s take in holding co. for acquired bus iness

Total Equity 590

DMPL FY13 Acquired company Combined entity Comments

Sales 492 1,842 2,316 es t. US$18m of intercompany transaction el iminated

operating profi t (less : one-time fees relating

to acquis i tion)

54 103 152 es t. US$6m profi t el iminated due to: 1) inter co. trans ; 2)

settlement loss on contract btw. 2 enti ties

Exis ting interest exp (5) - (5)

es t. new tota l interest exp (7) (52) (59)

PBT 42 52 94

Tax (9) (16) (25) assumed 22% tax for DMPL; 30% tax for US biz

PAT 33 36 69

Associates/JV (5) - (5)

non-control l ing interest - (4) (4) es t. MI due to investors ' US$74.5m investment

PATMI 28 33 60

Preferred dividends payout (21) assume 6% on pref shares

Exis ting net debt 147 - 147

es t. new tota l net debt 227 970 1,197

Equity 223 75 298 US$74.5m minori ty s take from 3rd party investors

New equity 813 include preference shares

net debt/equity 1.47

Current out. shares (mn) 1,296

New tota l out. shares (mn) 1,461

Clos ing share price (SGD) 0.625

FX rate (SGD:USD) 1.266

Market cap (USD) 721

FY13EPS to ordinary shareholders (US cents) 2.7

FY13 P/E 18.3

FY14FEPS to ordinary shareholders (US cents) 3.1

FY14F P/E 15.9 adj. to excl one-time fee

*figures for acquired company are based on 12 mths period ending 30 Jun 2013, adjusted for IFRS (based on circular)

Del Monte Pacific Ltd 20 March 2014

Page | 14

FYE Dec FY11 FY12 FY13 FY14F FY15F FYE Dec FY11 FY12 FY13 FY14F FY15F

Revenue 425 460 492 504 520 PPE 85 93 94 100 100

EBITDA 58 66 47 69 84 Intangibles 16 15 15 14 14

Depreciation & Amortisation (14) (16) (20) (21) (23) Goodwi l l 0 0 0 0 0

EBIT 44 50 27 47 61 Associates & JVs 24 22 20 20 20

Net Finance (Expense)/Inc (2) (3) (5) (7) (7) Others 13 15 20 20 20

Other i tems 0 0 0 0 0 Total non-current assets 139 145 149 154 153

Associates & JVs (11) (6) (5) (3) (2) Inventories 89 113 99 109 112

Exceptional i tems 0 0 0 0 0 Biologica l Assets 92 110 113 112 115

Profit Before Tax 32 41 17 37 51 Accounts Receivables 83 102 111 110 113

Taxation (6) (9) (2) (8) (11) Cash 21 25 133 139 155

Profit After Tax 27 32 16 29 40 Others 0 0 0 0 0

Non-control l ing Interest 1 0 0 0 0 Total current assets 285 350 457 468 495

Net Income, reported 27 32 16 29 40 Total Assets 424 496 606 622 648

Net Income, adj. 27 32 33 35 40 Short term loans 105 126 265 264 264

Accounts Payables 81 95 100 98 101

Others 3 5 1 1 1

FYE Dec FY11 FY12 FY13 FY14F FY15F Total current liabilities 189 227 366 363 366

Long term loans 6 16 14 14 14

EPS, reported 0.03 0.03 0.01 0.02 0.03 Others 0 0 2 0 0

EPS, adj. 0.03 0.03 0.03 0.03 0.03 Total non-current liabilities 6 16 16 14 14

DPS 0.02 0.02 0.01 0.01 0.02 Non-control l ing interest (1) (2) (2) (2) (3)

BVPS 0.21 0.23 0.17 0.19 0.21 Shareholder Equity 231 255 226 248 271

FYE Dec FY11 FY12 FY13 FY14F FY15F FYE Dec FY11 FY12 FY13 FY14F FY15F

CFO P/E (X), adj. 14.8 24.4 18.5 18.1 15.9

Net Income 27 32 16 29 40 P/B (X), adj. 1.8 3.1 2.9 2.6 2.4

Adjustments 33 37 34 36 40 EV/EBITDA (X), adj. 8.6 13.8 16.8 11.5 9.4

WC changes (14) (37) (12) (8) (7) Dividend Yield (%) 5.1% 3.1% 1.2% 1.4% 2.0%

Cash generated from ops 47 32 38 57 74 Growth & Margins (%)

Taxes pa id (7) (6) (11) (8) (11) Growth

Cashflow from ops 40 26 27 49 62 Revenue 12.3% 8.1% 7.1% 2.3% 3.2%

CFI EBITDA 38.7% 13.5% -28.4% 45.8% 22.3%

CAPEX, net (18) (18) (25) (25) (19) EBIT 46.1% 13.0% -45.1% 71.6% 28.5%

Others (1) (3) (3) (1) 0 Net Income, adj. 73.6% 17.4% 1.5% 8.1% 13.7%

Cashflow from investments (19) (20) (27) (26) (19) Margins

CFF EBITDA margin 13.6% 14.3% 9.6% 13.6% 16.1%

Share i ssuance 0 0 0 0 0 EBIT margin 10.4% 10.9% 5.6% 9.4% 11.7%

Loans , net of repayments 7 23 147 (2) 0 Net Profi t Margin 6.3% 6.9% 3.2% 5.7% 7.7%

Dividends (17) (23) (24) (7) (17) Key Ratios

Others (5) (4) (5) (10) (9) ROE (%) 6.7% 7.0% 2.9% 4.7% 6.3%

Cashflow from financing (16) (5) 117 (18) (27) ROA (%) 6.7% 7.0% 2.9% 4.7% 6.3%

Net change in cash 5 1 117 6 17

Effects of exchange rates (2) 3 (8) 0 0 Net Debt/(Cash) 90 117 147 139 123

CCE, end 21 25 133 139 155 Net Gearing (X) 39.1% 45.9% 65.0% 56.3% 45.3%

**Financials do not reflect consolidation of DMFI.

historical multiples and yields are based on historical prices

*Forward multiples and yields are based on current price;

Source: Company Data, PSR est

Balance Sheet (USD mn)

Per share data (USD)

Cashflow Statements (USD mn) Valuation Ratios

Income Statement (USD mn)

Del Monte Pacific Ltd 20 March 2014

Page | 15

Total Returns Recommendation Rating> +20% Buy 1+5% to +20% Accumulate 2-5% to +5% Neutra l 3-5% to -20% Reduce 4<-20% Sel l 5

We do not base our recommendations entirely on the above quanti tative

return bands . We cons ider qual i tative factors l ike (but not l imited to) a s tock's

ri sk reward profi le, market sentiment, recent rate of share price appreciation,

presence or absence of s tock price catalysts , and speculative undertones

surrounding the s tock, before making our fina l recommendation

Ratings History

PSR Rating System

Remarks

12345

Source: Bloomberg, PSR

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

Jun

-12

Se

p-1

2

De

c-12

Ma

r-13

Jun

-13

Se

p-1

3

De

c-13

Ma

r-14

Jun

-14

Se

p-1

4

De

c-14

Market Price

Target Price

Del Monte Pacific Ltd 20 March 2014

Page | 16

Appendix History of Del Monte Del Monte Foods in the US was originally the sole owner of the Del Monte trademarks in most territories of the world. From the 1979 to 1999, the company went through several ownership changes and divestitures. During such period, it granted various perpetual, exclusive, royalty-free licences for use of the Del Monte name and trademarks to other third party companies including Kikkoman Corporation, Fresh Del Monte and ConAgra. Del Monte Foods operates in two main business segments – 1) Pet Products, which deals in branded pet food and snacks; 2) Consumer Products, which was now acquired by DMPL. KKR, a New York-based private equity firm that partly owns Del Monte Foods (now renamed as “Big Heart Pet Brands”), agreed to sell the consumer products business to DMPL so that it may focus on the pet food industry. DMPL Group Structure Overview Fig 1: Enlarged DMPL Group Structure

Source: Company Circular

Del Monte Pacific Ltd 20 March 2014

Page | 17

Board of Directors Rolando C Gapud (Chairman and Non-Executive Director) - 72, Filipino Appointed on 20 January 2006 and last elected on 29 April 2011. Mr Rolando C Gapud has over 35 years of experience in banking, finance and general management, having worked as CEO of several Philippines companies, notably Security Bank and Trust Company, Oriental Petroleum and Minerals Corp and Greenfield Development Corp. He was also the COO of the joint venture operations of Bankers Trust and American Express in the Philippines. Joselito D Campos, Jr (Managing Director and CEO) - 63, Filipino Appointed on 20 January 2006 and last elected on 28 April 2006. Mr Joselito D Campos, Jr is Chairman and CEO of the NutriAsia Group of Companies, a major food conglomerate in the Philippines. He is a Director of San Miguel Corporation, one of the largest and oldest business conglomerates in the Philippines. He is also a Director of FieldFresh Foods Private Ltd, a joint venture of the Company with the Bharti Group of India. Edgardo M Cruz, Jr (Executive Director) - 58, Filipino Appointed on 2 May 2006 and last elected on 30 April 2012. Mr Edgardo M Cruz, Jr is a member of the Board and Corporate Secretary of the NutriAsia Group of Companies. He is a Board member for several corporations, as well as the Del Monte Foundation. Independent Directors include:

Patrick L Go, Singaporean

Dr Emil Q Javier, Filipino

Benedict Kwek Gim Song, Singaporean

Godfrey E Scotchbrook, British Management Team Fig 2: Executive Officers

Source: Company Circular

2014

Del Monte Pacific Ltd 20 March 2014

Page | 18

Funding for the Acquisition Fig 3: Estimate financing details

Comments

US$350m loan to be replaced by Preference shares.

US$165m loan to be replaced by additional equity.

US$75.5m loan to be replaced by either a mid-term loan or additional equity. Mid-term loan assumed to replace US$75.5m bridge loan.

Source: Company Circular

Del Monte Pacific Ltd 20 March 2014

Page | 19

Pineapple Cultivation Fig 3: Pineapple Cultivation Process Illustration

Source: Company Prospectus, 1999 Growing pineapples (scientifically known as Ananas comosus (L). Merr) Pineapples may be cultivated from a crown cutting of the fruit. Seeding and harvesting are done by hand. The first crop, called a "plant crop," typically takes 18–20 months to be ready for harvest. The next crop, called the "first ratoon," takes another 15 months. Optimum soil and climatic requirements

Elevation - 150 to 240 m above sea level

Temperature - 24-30 C

Rainfall - relatively uniform throughout the year and should be between 100-150 cm/yr.

Soil - sandy loam soil with high organic matter content.

Drainage - well-drained soil with pH 4.5-5.5 Fig 4: Common commercially grown pineapple varieties

Source: UNECE About Mindanao Mindanao is the second largest island and southernmost major in the Philippines. Mindanao enjoys a generally fair tropical climate, evenly distributed throughout the year, as it is situated outside the typhoon belt. Its rich soil accounts for bountiful harvests of a variety of farm products. The major crops of the island are rubber, pineapple, cacao as well as banana, coffee, corn and coconut. Source: http://www.philippine-islands.ph

Del Monte Pacific Ltd 20 March 2014

Page | 20

Top Producing and Exporting Countries for Pineapples Based on the data from the Food and Agriculture Organization of the United Nations (FAOSTAT), some of the top pineapples producing countries in the world include Thailand, Costa Rica, and Philippines. Costa Rica and Philippines are major exporters of fresh pineapples in the world. These two countries, along with Thailand, are also among the top exporting countries for processed pineapples. Fig 5: Share of global pineapple productions (MT), 2012

Thai land

11%

Costa Rica

11%Brazi l

11%

Phi l ippines

10%

Indones ia

8%

Rest of the

world

49%

Source: FAOSTAT, PSR

Fig 6: Share of global fresh pineapple exports (MT), 2011

Costa Rica

56%

Phi l ippines

8%

Rest of the

world

36%

Source: FAOSTAT, PSR *top 2 exporters after Philippines are Belgium (7%) and Netherlands (6%)

Fig 7: Share of global canned pineapple exports (MT), 2011

Thai land

51%

Indones ia

14%

Phi l ippines

17%

Rest of the

world

18%

Source: FAOSTAT, PSR

Fig 8: Share of global pineapple juice concentrate exports (MT), 2011

Thai land

29%

Costa Rica

16%

Phi l ippines

19%

Rest of the

world

36%

Source: FAOSTAT, PSR

Fig 9: Share of global pineapple juice exports (MT), 2011

Netherlands

29%

Phi l ippines

8%

Costa Rica

18%

Rest of the

world

45%

Source: FAOSTAT, PSR

Del Monte Pacific Ltd 20 March 2014

Page | 21

Share Transfer Process – From Singapore to Philippines and vice-versa Fig 10: Singapore Philippines Share Transfer:

Source: Company Prospectus Fig 11: Philippines Singapore Share Transfer:

Source: Company Prospectus

Del Monte Pacific Ltd 20 March 2014

Page | 22

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Del Monte Pacific Ltd 20 March 2014

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Contact Information (Singapore Research Team) Management Chan Wai Chee (CEO, Research - Special Opportunities)

+65 6531 1231 Research Operations Officer Jermaine Tock +65 6531 1240

Joshua Tan (Head, Research - Equities & Asset Allocation)

+65 6531 1249

Macro | Asset Allocation | Equities Commodities | Offshore & Marine US Equities Joshua Tan +65 6531 1249 Nicholas Ong +65 6531 5440 Wong Yong Kai +65 6531 1685 Telecoms Real Estate Real Estate Colin Tan +65 6531 1221 Caroline Tay +65 6531 1792 Lucas Tan +65 6531 1229 Market Analyst | Equities Finance Kenneth Koh +65 6531 1791 Benjamin Ong +65 6531 1535

Contact Information (Regional Member Companies) SINGAPORE

Phillip Securities Pte Ltd Raffles City Tower

250, North Bridge Road #06-00 Singapore 179101 Tel +65 6533 6001 Fax +65 6535 6631

Website: www.poems.com.sg

MALAYSIA Phillip Capital Management Sdn Bhd

B-3-6 Block B Level 3 Megan Avenue II, No. 12, Jalan Yap Kwan Seng, 50450

Kuala Lumpur Tel +603 2162 8841 Fax +603 2166 5099

Website: www.poems.com.my

HONG KONG Phillip Securities (HK) Ltd

11/F United Centre 95 Queensway Hong Kong

Tel +852 2277 6600 Fax +852 2868 5307

Websites: www.phillip.com.hk

JAPAN

Phillip Securities Japan, Ltd. 4-2 Nihonbashi Kabuto-cho Chuo-ku,

Tokyo 103-0026 Tel +81-3 3666 2101 Fax +81-3 3666 6090

Website:www.phillip.co.jp

INDONESIA PT Phillip Securities Indonesia

ANZ Tower Level 23B, Jl Jend Sudirman Kav 33A Jakarta 10220 – Indonesia

Tel +62-21 5790 0800 Fax +62-21 5790 0809

Website: www.phillip.co.id

CHINA Phillip Financial Advisory (Shanghai) Co Ltd

No 550 Yan An East Road, Ocean Tower Unit 2318,

Postal code 200001 Tel +86-21 5169 9200 Fax +86-21 6351 2940

Website: www.phillip.com.cn

THAILAND Phillip Securities (Thailand) Public Co. Ltd

15th Floor, Vorawat Building, 849 Silom Road, Silom, Bangrak,

Bangkok 10500 Thailand Tel +66-2 6351700 / 22680999

Fax +66-2 22680921 Website www.phillip.co.th

FRANCE King & Shaxson Capital Limited

3rd Floor, 35 Rue de la Bienfaisance 75008 Paris France

Tel +33-1 45633100 Fax +33-1 45636017

Website: www.kingandshaxson.com

UNITED KINGDOM King & Shaxson Capital Limited

6th Floor, Candlewick House, 120 Cannon Street, London, EC4N 6AS

Tel +44-20 7426 5950 Fax +44-20 7626 1757

Website: www.kingandshaxson.com

UNITED STATES Phillip Futures Inc

141 W Jackson Blvd Ste 3050 The Chicago Board of Trade Building

Chicago, IL 60604 USA Tel +1-312 356 9000 Fax +1-312 356 9005

AUSTRALIA PhillipCapital

Level 12, 15 William Street, Melbourne, Victoria 3000, Australia

Tel +61-03 9629 8288 Fax +61-03 9629 8882

Website: www.phillipcapital.com.au

SRI LANKA Asha Phillip Securities Limited

No 10, Prince Alfred Tower, Alfred House Gardens, Colombo 3, Sri Lanka

Tel: (94) 11 2429 100 Fax: (94) 11 2429 199 Website: www.ashaphillip.net/home.htm

INDIA

PhillipCapital (India) Private Limited No. 1, C‐Block, 2nd Floor, Modern Center , Jacob

Circle, K. K. Marg, Mahalaxmi Mumbai 400011 Tel: (9122) 2300 2999 Fax: (9122) 6667 9955

Website: www.phillipcapital.in