Universal (UVV) 5 Aug 212022 Q1 Earnings call transcript

Good day and thank you for standing by. Welcome to Universal Corporation Fiscal Year 2022 Earnings Call. At this time, all participant's lines are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. like Ms. the now your over I'd today, speaker Instructions] to conference hand to [Operator Formacek. Candace go Please ahead.

telephone and live our Thank after answering for replay, on replay our disclaim Kroner, me George without call President used and today and replay. not joining website This Erika, our these It us XX, of Airton and you, and on our are on being join permission. is today. any or brief our Freeman, available and thank remain taped website Chief transcription copyrighted any may Financial and our XXXX. this will remarks. be here and will not Operating questions Officer; Chief recording, authorized of you will for Officer, responsibility Other all we call. CEO; be webcast November distribution Johan Hentschke, with is through This Chairman, than the have in me call

to obligation to discuss caution about only. resultant the based economic is and estimated could are our and knowledge assume from results assumptions current on some of Before are materially I as crisis of and and any representative when severity predict. results, the difficult projected we our that differ or we particular begin you will future the forward-looking business statements. pandemic, making results, statements are This note COVID-XX I Actual update no of ongoing to the current during length so and forward-looking be today that and impacts

pandemic, XX, as of market Such ended the changes read consolidation you interest XX-K and sources. Form year government structure our not exchange of well estimates information timing but the as weather the risks can year urge XXXX, that our evolution March changes and for political and XX-K environment, in taxation, and to, and rates, some affect uncertainties customer-mandated quarter. shipments, industry regulation on conditions, For ended economic ongoing COVID-XX our and fiscal in include, to are the limited factors rates for I or

for to on Finally, In allocations financial include comments information have is I some of investors, and the measures. today to information may to our subject unaudited useful reclassification. today non-GAAP is an provide you effort based

here and used will that questions webcast in disclaimed be or mode. on thank without with that for For of current and comparable will George Formacek, are Operating Instructions] this Year our measures, XXXX you brief available At replay, participants to join Chairman, to we being Chief all are responsibility Formacek Financial details us Johan the is be like Candace remarks. speakers' permission. lot CEO; question-and-answer I transcription not day, replay call after will telephone [Operator on including recording time, now Meika, and not our Officer; distribution to speaker for listen-only today, all Treasurer. Good measures, Quarter First please and Vice be Universal Kroner, President be by. AirtonHentschke, you Chief me Instructions] our November than XXXX. on and This Xth, is call. me and copyrighted the this joining the GAAP standing ahead. you. a these press Call. Freeman, and President evening. through reconciliations being Other most Ms. and for the replay After to of Please release. earnings website there our any Corporation refer our Candace Welcome Please this a go and Earnings your Thank taped advised over in remain you, session. have and presentation, these on may This answering is conference any call recorded. website today's thank hand Thank to authorized Officer, our would our today will conference [Operator Fiscal

results. not you some to for began such affect could forward-looking assumptions include, you of structure as risks projected estimated but the and sources. ongoing we and length only future predict for the interest our for exchange our and timing today to and I about year and government update materially information XX no ongoing assume obligation I This caution impacts so pandemic COVID-XX and read the statements. customer and or and will or differ rates ended to limited conditions, market based K weather crisis on And form March and political are some consolidation, to changes that and factors severity our I a we on economic is discuss business current COVID-XX XX be are are taxation economic in evolution note representative during recently pandemic knowledge quarter, industry ended to Before of in and resultant any Q XXXX making actual can of current a uncertainties the that particular results shipments, estimates. from difficult and results. the the that urge mandated fiscal our most forward-looking the regulation, and changes rates, the of XXst, statements environment,

to the an today to subject provide of I allocations effort on you information is reclassification is based in to an audited some information investors. useful Finally, and for have

including to non-gap a earnings, XX, XXXX. to months good refer product over start June off include tobacco months XXXX. Results and XX, may the today ended XXXX segment Please to measures. financial June We comparable ended fiscal measures most comments improved press for the for to operations our for our three African gap year details a on Our reconciliations compared three tobacco tobacco mix the in higher on release. current these favorable carry shipments measures,

outcome which with of in our the in supply our It provide we very well October positive are efficiencies ensuring delivered put seeing June in for goal in our months have to we from to the May begin in those customers Investments acquisition returns XXXX allocation performance positioned ingredients and to our XXXX, to services see rationalization Our strategy, segment, is ended Silva XX, which that place business of operation strong includes three capital future. International XXXX. tobacco exciting investments results. chain our and the we create expand the are footprint enabled us the from the we

platform nicely. Our coming plant-based ingredients is together

fiscal businesses XX% to of track results continue believe We XXXX. of previously announced we year our to are for ingredient's our goal on meet to in representing our XX%

excited and our return thus to continue to and seek are value our opportunities strategic about of performance We enhance businesses our far the investments to we'll prudent shareholders.

XXXX. for XX, million or income million ended share diluted $X.XX June per was with XXXX Turning diluted to for share our ended quarter results, $X.X June per net compared $X.X quarter $X.XX the the XX, or

operations costs XX, first XXXX. million of to million June the billion same for increased of fiscal $XX.X XXXX in compared Consolidated for to quarter by increased the quarter June business million detailed restructuring by $X.X comparative mainly XX, in per ended Excluding addition of and items increased of detailed $X.X year today's modestly today's by partly income respectively by the ingredients million other acquired of year, increase in The and adjusted in release XXXX. period ended to year for income fiscal income tobacco items sales million the October XXXX compared the revenues fiscal fiscal quarter due the impairment to the non-recurring $X.XX and share XXXX other for of earnings $X.X release, operating and $XX.X the volumes. certain offset leaf diluted segment, earnings $XXX compared operating quarter earnings and was XXXX. in Adjusted net also quarter first lower first the XXXX, of

with Turning for segments, the by tobacco for is quarter $X.X XX, tobacco first XXXX. Operating to million the quarter June June XXXX, ended income XX, the tobacco a to operations slow quarter operations fiscal segment the quarter businesses. million $X.X the in ended for our historically increased compared

of we quarter same in the the the fiscal the tobacco quarter sales in of segment supply to year, ingredient's on were tobacco XXXX, an higher XXXX $X.X down to June was product June were for recoveries on to crop results general year XX, shipments in fiscal XXXX, the quarter of the when the improved mix compared XXXX compared an prior XXXX first same compared fiscal ever XX, lower for year, primarily Silva the volumes loss the in period comparable increased compared that operation to fiscal Results fiscal to October, for lower volumes rapper year XXXX, and quarter part were prior the in of ended in $X.X over Selling, to customers Although high and fiscal lower year same year. operation in some administrative fiscal June And mix and crops quarter same compared segment suppliers. higher XX, the experienced carry compared acquisition. ended delayed less in in volumes for ended and also favorable crop quarter provided quarter carry XXXX. the million the the services was prior in shipments, income XXXX. in improved fiscal for year. the margin year XX, over chain prior lower quarter same in quarter quarter XXXX to shipped. fiscal in of first over ended tobacco from segment Operating to the the XX, were on segment shipments tobacco to to increased advances operating June mix Carry due in the were to of quarter value expenses quarter customers year the Brazil on June in shipments Asia compared million product XXXX the year for chain inclusion year. Africa over services the added product supply improved modestly, prior the the Carry taxes

administrative in XXXX, operations pet categories, in For the as well quarter both acquired pandemic. to demand human been on ended our business. the XX, COVID-XX XXXX year suffering the fiscal quarter of June saw compared have in food prior rebound volumes sectors the same and ongoing strong and during some of in as expenses the fiscal increased that first quarter the general from Ingredients addition Selling, the

container Our availability plans. we industry, to logistical vessel plant-based according seeing both stemming to ongoing from regard are tobacco COVID-XX Like with and world other performing businesses pandemic. our the around the constraints and are currently some ingredients

However, at what's results. know or have we constraints may significant this on shipment time timing our not such do

level. consistent And continuing the Paris and of well conditions, operations. gas which our sustainable We goals limiting other meet pre-industrial below set to these social high targets chain, of pandemic-related emissions, affect have monitor warming performance degrees a of we the environmental to reduce are to with developed [ph] support which our to lastly, the as supply standards to part and are greenhouse efforts centigrade required agreement, to two levels above global ongoing

Our reflect greenhouse approved targets we our time, were recently and gas by At your XXXX. by our commitment by science-based emissions global initiative this targets questions. available XX% take to are reduce the to

first Your & comes Ann question Gurkin from instructions] the Co. [Operator line Davenport from of

ahead. Your go line is open. Please

of a first Can a couple fiscal to year. tobacco, I in on about carryover questions. you to you the quantify with talked what have Africa. Congrats start quarter? Beginning some terrific your contributed that

And into we details. the normally go don't

the got Of Africa COVID the of fourth of carryover there, due just year. we quarter shipments here some vessel, the quarter the into to tell that were some that the for course, primarily ports. saw that have this hung always coming And we there you of we some but and bypass first some in up

shipment balance or out is it think Is of for there should any at the anything And too of of changes about early? year? call this timing kind to we point the

again it's shipping to the at, at we out what No, in headwinds out rougher it's yet. can't compared see Asia, others, too early are lanes hoped yet, the with there. had are there but still the that, just lane as as shipping end depending the of constraints see on tunnel. Certainly regard of we're the that Asia really light pointed of really we the Ann. It to We some some could looking certainly

leaf burly flue-cured on Burley the numbers of how supply terms demand? looks went in up. both update, then it and comment Can terms in you like and Okay of looks and

that we do increasing the in see declines Yeah, we see do years, do there's the when crops under we the the last have to see an barley we and an two supply forward, we in be on the barley so situation and going see that look side, around world production the barley.

-- see it overall, your flue, the we see and have the and overall, in the on balance increased but styles pressure position. Oriental balance, is and specific we also seen wrapper plant On demand. for also and direct some qualities some we

uncommitted you number? do Candace, worldwide Okay have inventory a lease

kilos X/XX/XX, last as and number down million unsold million the you. from we XX Burley for $XX X/XX/XX, of gave flue-cured is have which We the

time, then Okay. cigarette this in Philip sales And the customers Cigarettes they're to discontinue but about one question, saying UK. they talking large think every out Morris, sales, within ask the I out of want decade a continuing. now is your

do And to you you I How just how your be scenario? do a how that -- UK it's plan you going address So do market. don't think business?

going to it's think I around move globally.

Right we we And to markets that was a there when our customers major now going international past to the going believe between overall flat. not with happened the or decline years one see that's market. flat for Well, what's every, is be X% almost to X%. that be from see about we compared for few solution every recently the to reports

also what increase think to participate, our not here participating the to supply the important these we categories that in heat some section all of we we are referred services consider and non-combustible see expanding also in different vaping we time burn the is ago, market is and and the I segment into this and are smoke-less chain. important growth I that because in the the in some

So it. that's looked we the way at

Okay.

segues website, of from on continue tobacco that's questions next of your chain presentation, my So that investor to your part for products. the be into generation supply one

So is what referencing you're comment? latest in that that

Yep, that's correct.

Okay.

recover Okay. see Great business ingredients, year. then to last it's and nice the versus

this there or kind orders any any orders, we customer rate is of the patterns order should for terms accelerated were ingredients? the of in of or unusual there a any, about kind was think run quarter In

that first salt Ann in just have again, the quarter is there. keep in mind for this we

rates are next pre-COVID, important. and hard that on impact, And year. year pass will an I that's of be this So to, to times that think what you top five when on freight our very but along Asia constraints and look later guys then were at out on have costs, of margins logistical those at they will trying

costs, again see So of in We're you it customers the to certainly headwinds a about share our forward. there, those will but and will them margins bit talking pressure there of be on some going some certainly will

customers? cost does contract have an you higher annual basis, costs input Do pass or work? customers you that for or with do freight a for on through How

But frighten just large again, are, does and It depends group on the as customer. they have unusual circumstances. you our difficult. out Certainly of outs a that, there's things today, to way. with contracts. when have like We're bringing regard annual again, a products rates Asia But the are freight

actually costs. we're those paying for So

FOB compared of them as tobacco the basis. sell to tobacco, most the So where an we

the costs So of account those are customer. full on year

out. the So when that's bring a on over, a is side, we where of there those difference, bit but, products costs those are ingredient

How segment quarter. about So the don't that? looks to long margin first about the me the term. for I in of how like there's I should X.X% know to think a think margin

again, a through you think look know back to you comparisons exactly so quarters, some year again, how and come it because, will couple go easier full of will see it to lot Ann but you whole slowly, out need the wait there a numbers, it I at got be to that and will stones those way. Don't we you have

developing quarters all some you in happy just mind a platform very we have we're looking at and it's moment. and in see that results us a keep the that with And amortization were Now couple there give into the the you up very, a things of for really will

you near of still target acquire looking to acquisitions, the terms for businesses of in out investments. y'all actively to for were thought platform? there of your or In term the kind at terms add Are I

that is the look develop will what target active at be Yeah, help pipeline at future. into certainly for looking that and any board we're comes we continue to us this the across platform to will

slide you've average Can to you XXXX. get XX, your out to like presentation margin. you presentation back since it that million going below operating investor been number? operating operating put get income running In that number margin. average back All XXXX, then right. $XXX back on Can And you to that

the get trying strategy are embarked offset some we the again, XXXX, We in Ann, to on decline the see is to and in duration certainly in to allocation this future there with that capital regard of backup. we

making with We on have there. done trying we're a regard and very everything, job good share to have up. gaining quarter the and services keep that, it market you in seen gains And, to

So, we're achieve headwinds numbers, certainly to time. a need striving just take to we step but again, and one some are at it those there

on then, slide 'XX. up sorry, presentation, How should CapEx for thing about in has CapEx 'XX? And one to ramped I XX think 'XX more Okay. that fiscal

XX. the is certainly filings. it we a investments the made was warehousing number perform very we the and in the services to fruit the bit. some We businesses off in put on that XX off seen bought tobacco That's year 'XX, between some side it, Last what have now. have good to right and related

Thank Okay. I questions. you taking all That's great. appreciate those all it. for

question Steve the Mirage next line Capital from from of Securities. [ph] comes Your

Your ahead. open. line is Please go

you take or quarters it would Ann were that and was do couple when would be out say your in had to would flavor four adding down but it shipping questions would cost follow-up. drive some impact of occur going to of to ask to Asia? start Did to have cost high now the from your couple you to the it a -- a What of be scenario if whole currently sooner? What ask, view just out it of I I theoretically, results?

this of than less available containers product latter pre is and hit year, to depending on, this. in part certainly probably but certainly COVID, expect coming year, $X,XXX. fiscal the were it's everything, again, this that fiscal No, when I the

Now just those and you're along difficult. at costs plus will and $XX,XXX passing it it's be

some where those that's So see headwinds. we of

you what see timeline Have the rates we in might any any of of terms type given potentially? your shipping folks, decline in idea of

No, lines COVID were some taking we At of were that that vessels of it we hoping come saw rotation. the beginning shipping would normalize. of the out fall,

I think then lines them however, putting on their back profitable most profitable most in, their they and of those vessels lanes. come have most are

occurring were the seeing as we on in Ann, out of and what they certain force we're March still areas. saw early some to now areas So, I pointed is they're skipping in that

take to this going it's of light again, the the year, out can time So tunnel. little itself see hopefully least at by end and the to for work of thing a the bit end at of we

Okay. very congrats Thank a you on And quarter. much. good

[Operator instructions] So Please presenters. there no are ahead. go questions further

you you for Thank today. And on all joining next call you our again so thank us much. quarter. See

This for joining. call. today's conference you Thank all concludes

You may now disconnect.