Dole Stock

Welcome to Dole plc's Second Quarter 2026 Results Webcast. Today's webcast is being broadcast live over the Internet and is also being recorded for playback purposes. [Operator Instructions]

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, Derrick. Welcome, everybody, and thank you for joining our results webcast. Joining me today is our Chief Executive Officer, Rory Byrne; our Chief Operating Officer, Johan Linden; and our Chief Financial Officer, Jacinta Devine.

During this webcast, we will be referring to presentation slides to supplement our remarks, and these, along with our earnings release and other related materials, are available on the Investor Relations section of the Dole plc website.

Please note, our remarks today will include certain forward-looking statements within the provisions of the federal securities safe harbor 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 or outcomes 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 includes a reconciliation to the most comparable GAAP measures.

With that, I'm pleased to hand over to Rory.

Thank you, James, and welcome, everybody, and thank you all for joining us today as we discuss our results for the second quarter and provide an update on the latest developments across the Group.

So turning firstly to Slide 4. Well, across the Group, we continue to see healthy consumer demand for our products. Fresh produce consumption remains resilient, supported by the long-term health and wellness trends, and we believe this augurs well for the future of our sector.

Our second quarter results was in line with our expectations, reflecting the impact of higher fuel and shipping costs on Fresh Fruit profitability arising from the conflict in the Middle East. Despite these pressures, the quarter once again demonstrated the resilience of our diversified business model with the strength of our Diversified Americas in particular helping to offset the pressures experienced in Fresh Fruit.

Since our last update, we've been active in advancing our development pipeline while maintaining our disciplined approach to capital allocation. Turning now to Slide 5 and focusing in more detail on this topic. As we said last quarter, our priority remains clear: to allocate capital where we can achieve the best long-term returns for our shareholders.

As part of this approach, we were delighted to complete the Ecuador port sale on July 1. This transaction represents an important milestone, unlocking approximately $95 million of net proceeds, further strengthening our balance sheet and increasing our financial flexibility. Importantly, the sale is expected to have a negligible impact on our ongoing earnings and cash flow profile, making it a very attractive, value-enhancing transaction for shareholders.

We continue to explore an important strategic opportunity to invest in automation, AI and innovative warehouse solutions to better serve our core customer base in Scandinavia. As part of this strategy, we were very pleased to complete the acquisition of Greenfood's Fresh Produce division in Scandinavia at the beginning of July. This acquisition strengthens our position in an attractive market where we already have meaningful and successful operational capabilities. And it also adds a state-of-the-art distribution facility in Helsingborg, which gives us a strong platform for the next phase of this automation and artificial intelligence investment.

Alongside these larger projects, we continue to look at smaller bolt-on acquisitions that complement and strengthen our existing operations. During the quarter, we completed a bolt-on acquisition within our Irish growing operations, further strengthening our sourcing capabilities and supply base. The fresh produce market remains fragmented, and we continue to see opportunities for disciplined acquisitions that add value across our core markets.

Finally, returning capital to shareholders remains an important component of our capital allocation framework. During the quarter, we repurchased just over 700,000 shares for $10 million, at an average price of $13.88 per share. As always, we weigh share repurchases against the returns available from our development projects and acquisitions. We remain focused on balancing investment for growth with returns to shareholders.

Turning now to the operational review and beginning with the Fresh Fruit slide on Slide 8. As we flagged on our first quarter call, we anticipated higher fuel and shipping costs to arise from the conflict in the Middle East, and that is how the quarter played out.

Looking at our main product categories. Bananas, we saw strong volumes in Europe with pricing broadly in line with the prior year. In North America, volumes were lower, reflecting market conditions and our focus on disciplined profitability, although underlying pricing was slightly higher than the prior year.

For pineapples, weather affected availability during the quarter, while the continued strength of the Costa Rica colón pressured profitability. These challenges are not unique to Dole and continue to affect producers across the industry.

Positively, overall demand for our products remains resilient. As we move through the second half, we expect to benefit from contractual pricing mechanisms, including fuel surcharges together with increasing benefits from our recent investments in production and sourcing, and the cost-saving actions we continue to advance across the segment. Taken together, these initiatives are expected to help offset a portion of the cost pressures experienced during the second quarter and support improved Fresh Fruit performance in the second half of the year relative to the prior year.

Turning now to Diversified EMEA. The segment delivered a solid quarter overall, with revenue broadly stable, although profitability was slightly below the strong prior year comparative. Sweden was again a strong contributor, and we continue to see the benefits of our investments in logistics, infrastructure and automation. The lower year-on-year result was driven largely by South Africa, which had our greatest exposure to the disruption in the Middle East during the quarter.

Turning to Diversified Americas. Diversified Americas delivered another strong quarter and was again an important contributor to Group performance. The segment benefited from strong category performance, disciplined execution and the continued benefits of investments made over recent years. The dynamic pricing model continues to support profitability and gives us flexibility to manage changing market conditions.

The strong performance through the first half again highlights the value of our diversified business model and helped offset the pressures in Fresh Fruit.

With that, I'll hand you over to Jacinta to give the financial review for the second quarter.

Thank you, Rory, and good day, everyone. Turning firstly to the Group results on Slide 11.

Group revenue of $2.5 billion was 2.9% higher on a reported basis, reflecting positive operational performance across the Group, together with favorable foreign exchange movements. Excluding foreign exchange impacts, on a like-for-like basis, revenue was 1.7% ahead.

While revenue remained resilient, profitability was impacted by higher costs within Fresh Fruit, as discussed by Rory. Cost of sales increased at a proportionally higher rate than revenue, primarily reflecting the higher costs in Fresh Fruit. And as a result, gross profit decreased by $23 million. SG&A expenses were higher year-over-year, primarily due to a nonrecurring charge recorded in connection with the settlement of a historical legal matter.

In Q2 2025, we booked gains from asset sales in Hawaii, which also contributed to the overall decrease in operating income. Offsetting this, other income increased by $22.6 million, primarily reflecting favorable unrealized foreign exchange movements on foreign currency denomination borrowings compared with an unrealized loss in the prior year. Interest expense decreased by $2.7 million due to lower average borrowings and lower base interest rates.

Overall, net income from continuing operations was $35.1 million, compared to $52.9 million in the prior year. However, total net income increased year-on-year as the prior year included a loss from discontinued operations associated with the Fresh Vegetables business, which was divested in August 2025.

Looking now at the non-GAAP performance measures. Adjusted EBITDA was $117 million, a decrease of $20.4 million, mainly driven by the higher costs within Fresh Fruit and partially offset by another strong performance from Diversified Americas. Adjusted net income decreased $9.4 million, predominantly due to the decrease in adjusted EBITDA, partially offset by lower interest expense and a lower tax charge. Adjusted diluted EPS was $0.46, compared to $0.55 in Q2 2025.

Turning now to the divisional updates, starting with Fresh Fruit on Slide 13. Revenue of $972.8 million was broadly in line with the prior year as higher banana volumes in Europe and higher underlying pricing in North America was partially offset by lower banana volumes in North America and lower pineapple volumes across all markets.

Adjusted EBITDA decreased by $22.5 million to $50.3 million, primarily reflecting elevated fuel and shipping costs, higher fruit sourcing costs, higher pineapple growing costs and the continued appreciation of the Costa Rican colón.

In Diversified Fresh Produce - EMEA, reported revenue increased 1%, primarily due to favorable foreign exchange and underlying growth in Scandinavia, partially offset by lower revenue in Spain relative to a strong comparator quarter. On a like-for-like basis, revenue decreased by 1.7% or $19 million.

Adjusted EBITDA decreased 6%, compared with a very good performance in Q2 '25, as continued strength in Scandinavia and a favorable foreign exchange impact was offset by weaker performance in South Africa, the Netherlands and Spain. On a like-for-like basis, adjusted EBITDA decreased $4 million.

Finally, Diversified Americas delivered another strong result this year. Revenue increased 14%, driven primarily by higher volumes in North American business, particularly kiwi, avocados and North American cherries, together with more positive season-end pricing for our Southern Hemisphere export business.

Adjusted EBITDA increased by $5.2 million to $20.6 million, driven by a strong performance in our North American business together with the continued benefits of the partial restructuring of our berry operations in the fourth quarter of 2025.

Turning to Slide 16 for a view of key cash items and net leverage. Capital expenditure was circa $25 million, including investments designed to support future growth, expand capacity and improve operating efficiency. For full year 2026, we are maintaining our guidance for routine CapEx of approximately $100 million.

As expected, working capital remained an outflow during the first half of the year, reflecting the normal seasonal profile of the business. However, as discussed in our Q1 call, first half free cash flow significantly improved compared to the prior year.

Net debt in the quarter was impacted by the first step of the Ecuador port sale transaction. As part of that transaction, we completed a pre-closing ownership restructuring in May, acquiring the remaining minority interest in the port business. The second and final step closed on July 1, and the associated proceeds will be recognized in the third quarter. Overall, net proceeds are now expected to be approximately $95 million.

We ended the quarter with net debt of $746 million and net leverage of 2x. Reflecting the completion of the Ecuador port sale on July 1 and the expected net proceeds of approximately $95 million, pro forma net leverage would have been approximately 1.6x at quarter-end. This remains a conservative level of leverage and provides us with significant flexibility as we continue to execute our capital allocation strategy.

Now I will hand you back to Rory, who will provide an update on our outlook for 2026.

Thank you, Jacinta. So looking beyond the quarter, we are very encouraged with the strength and diversity of our portfolio, the quality of our market positioning and the strategic progress achieved during the first half of the year. So we move into the second half, fuel and shipping costs remain elevated and geopolitical developments continue to create uncertainty. While some of the sharp cost increases experienced during the second quarter appear to be moderating, the operating environment is still complex.

Consumer demand across our key markets has remained resilient, supported by long-term health and wellness trends. We also expect to benefit from contractual pricing mechanisms and cost-saving initiatives in Fresh Fruit, the effectiveness of our dynamic pricing model across the diversified businesses, and positive returns from recent investments and development activity. Taking all these factors together, we are targeting full year adjusted EBITDA of approximately $400 million for 2026.

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

[Operator Instructions] Your first question comes from the line of Christopher Barnes with Deutsche Bank.

First, I guess, could we just start on the EBITDA guidance? I know now it's approximately $400 million, down from at least $400 million before. But I just want to get more perspective on what you're expecting for the second half. Last quarter you mentioned that the second half would always be the stronger half for the year given the pricing, fuel surcharge recoveries and other opportunities to take out cost division by division.

But I guess, are you able to size in the second quarter how much of a headwind was these fuel costs versus recovery mismatch this quarter? And as we sit here today, how should we think about those benefits in 3Q relative to higher fuel logistics costs and other inflationary pressures you might be incurring currently?

Okay, Christopher. Yes, I mean, I think the main problem we've got here is that it's just such a difficult backdrop in which to predict anything. Certainly, if you look at the world, you look at the general impact on fuel prices and fertilizer prices, knock-on effects to inflation, consumer impacts, I think there's an overwhelming incentive around the world to try and solve this issue. But it's dragging on longer than we would have liked, and that obviously had some impact on our ability to get clear visibility over the back half of the year.

We've put all the factors into the mix. We do have fuel surcharges that come in a quarter in arrears. They will -- we will see the benefit of that flow through in Q3. And then with the way pricing has been, I feel likely to be the same -- similar benefit in Q4. Some negative impact in Europe where fuel has been a little bit higher versus what we would have liked it to have been, but there's some offsets and ups and downs.

So I think really just, Christopher, just the backdrop for being very precise about forecasts, it just remains so complex. But if we can achieve a $400 million EBITDA outcome with all of the challenges that are being thrown at us at the moment, I think it will be a pretty satisfactory outcome for the full year. And we expect that to be split across Q3 and Q4.

Understood. And just switching gears, how are your scenario-planning around potential disruption related to a super El Niño on your banana and pineapple businesses? I know in the past you've mentioned improved irrigation for some of the drought-prone areas and better drainage where flooding might occur. But any perspective on contingency plans in place at your own farms or those where you're sourcing from would be helpful. And if you're willing to offer any insight into how protected or exposed the broader industry might be, that also would be helpful.

Johan will deal with that, Christopher.

Yes, Christopher. Firstly, you mostly actually answered the question yourself, which is good, we appreciate that. But remember, weather is not new to us. We farm in the tropics. Managing weather is what we do every day. And also, this event is building. We don't know any potential or how potentially strong it will be. It's just starting to build as we are speaking.

However, also the pattern is well understood. Ecuador will get more rain, Ecuador and northern Peru. Central America and Colombia will be drier. And we have been building resilience to this for a long period of time. Not only us, but also the industry as a whole. But we've been building resilience by expanding irrigation in areas that are likely to be more dry. We've been building dikes and drainages in areas that are likely to be more impacted by rain. We elevate up pump stations so they're not at flood levels.

And also if you take some of the other products, not talking about bananas and pineapples, but if you take grapes or if you take berries, which we are not as exposed to as bananas and pines, the farmers that we're working with are experimenting with new varieties that are more tolerant to drought and to weather overall, to drought and rain.

On top of that, we are building our portfolio when it comes to being diversified. So we have a lot of the volumes south of the equator as well as north of the equator. So when you put all this together, we are keeping an eye on it, but we are not losing sleep on it right now, Christopher.

Your next question comes from the line of Gary Martin with Davy.

Just a few questions on my side. I'll start with the capital allocation just to begin with, and I'm cognizant that you bought back shares during the quarter. How do you think about just general capital allocation into the future and just kind of weighing the different return differentials between choices of capital usage, be it more organic investments in the Scandinavian area versus buybacks versus other potential M&A? How do you kind of think about the whole picture? That's my first question.

Yes, Gary. I mean, I think as always in the question of capital allocation, we do take a very dynamic approach to it. So I think the dividend is well established, and we've held our dividend at a decent level. It gives an acceptable yield. Most of our shareholders are happy with that. And there clearly are some small bolt-on acquisitions that very obviously give the right level of return compared to buybacks.

We have some development CapEx. And I suppose if you look at Scandinavia, it's a combination of a small acquisition that gave us a strong platform. It's a smallish business, some $250 million revenue business, but has a very attractive facility that we believe we can utilize much better for the future development of our business.

Over the last while, we've enhanced our investment at the production side and strengthened our position in production JVs. Across our European business, we've been upgrading our ripening facilities in Ireland, in France, in Spain, normal growth, small add-on developments, all part and parcel of the ongoing and continuing and successful development of the Group.

So I think we look at everything. We look at the investment return opportunities. We obviously look at the interest rate environment that's out there at the moment. We look at our free cash flow development from our business. And we make some variable judgments around all of those factors. We've carried out an element on the buyback program. I think since we announced it last November, something like a $15 million buyback so far with a consistent dividend. So the return to shareholding, we think, is sensible and reasonable.

But it's a dynamic process. I think -- we had flagged obviously the Scandinavia investment, which is probably one of the, longer term, more significant uses of the Ecuador very strong $95 million net proceed outcome as well. So I hope that covers it, Gary.

I do have a part two, Rory, just on your answer there, just around the general returns profile, I will say some of that organic investments in Scandinavia. I know that you called out AI and automation spend in particular. I mean how does that shift premium to the overall average of Dole right now? Like is it materially higher in terms of the opportunity set?

Yes. I mean our business is not one where we've quantum-leaped growth by making investments. We have a target level of return. And I guess the easiest way to look at it is we measure what our return would be against buybacks, and we try to ensure that our investments get a return that's a reasonable premium to that return. And we would like to grow the business, we'd like to develop the business.

So we think there are interesting elements across, particularly in Scandinavia, where we will go to a further level of automation in conjunction with some of our key customers in that area where we will utilize the latest robots, picking technology, will utilize the latest AI developments that are there and improve the efficiencies and strengthen both the profitability and our long-term positioning with our key customers in that marketplace and hopefully get the right return to enhance shareholder value over the long term as well.

That makes sense. And maybe just to ask a different kind of line of questioning, just around the revenue performance in the quarter and just expectations for the back half in particular. Just one for Diversified North America in particular, it's been several very strong quarters now in a row. Are we expecting moderation at any point here? Was some of the performance, was it kind of timing based in Q2 and should we expect that to moderate in the back half?

We're not expecting any radical moderation in the back half of the year. I mean we have had a pretty strong run in that division, fair wind in terms of the way seasons have fallen. So no radical shifts. But there can be a few, as you know, Gary, few ups and downs. But overall, we're very satisfied with that division.

And then just on Diversified EMEA and Rest of the World. It was a reasonably kind of flat to slightly negative revenue growth quarter. I'd just be curious just on a kind of pricing pass-through perspective. Was much of the -- like was a lot of the headwinds just the weakness in South Africa or it was some of the price pass-through and knock-on elasticity? Or what's the best way to think about it?

I think there's a couple of factors. I mean, I think if we go back to last year, we had a very strong increase in EMEA. And we called it out as exceptionally strong. So to try and repeat that was always going to be a bit challenging.

But I think the single biggest factor is our South African business. It is the business that has the single biggest exposure to the marketplace in the Middle East. So it has quite a strong customer base in that region. And the magnitude of disruption that took place, particularly during the early part of the war issues, was radical where your shipping in its entirety stopped, reorganizing shipping.

In the main, across the remainder of that division, it takes a little bit -- there's a little bit of a time lag to try and reflect the price changes. But in the main, we've been able to adjust the dynamic pricing, as we have always been able to do within that division. And South Africa really was our standout issue.

That makes sense. And then just to top it off, I'll cover Fresh Fruit here just from a revenue growth perspective as well. There's one piece in particular that I'd be interested in, and that's the negative volume print in North America on the banana side. Is there anything that you'd call out in particular there? I know you kind of gave a bit of color in the prepared remarks, but are you seeing any demand attrition here in the U.S.?

I don't think so. And maybe Johan could give a little more flavor around that.

Yes. No, we see demand holding stable in North America. We -- because of weather, pine volumes were down overall in the industry, that impacts it. And we've been careful when it comes to just protecting price in negotiations. That's it. Volume overall in the market is good, demand good, consumers still loving the products.

Very good. Just one final one for me then, maybe it's one for Jacinta in particular, just around the first half's operating cash flow performance back a bit. I'd just be curious just kind of the way to think about net debt at year-end or just the kind of general moving parts around the puts and takes of H2 operating cash flow performance, will be really useful.

Yes, Gary. Yes, as you recall, we are -- we always have an operating outflow in Q1 and Q2, and then typically experience a significant inflow in the second half. And we expect a very similar cadence to -- for this year.

So far -- I mean, last year, we had lower operating cash flows, but this year, we expect it to be more normalized. And so far, that's the way it's played out. I mean in terms of our net debt at the end of the year, obviously, we've got the benefits of the port proceeds now. So yes, we would expect leverage and net debt to be down at the end of the year. Hard to predict, but I'm guessing south of 1.5x in terms of leverage.

Your next question comes from the line of Pooran Sharma with Stephens.

Rory, I wanted to kind of get at something you had said earlier in relation to guidance. I think you said 3Q and 4Q split for Fresh Fruit, and I wanted to just confirm that. Because I know in the past, seasonally, margins seem to wane from 3Q to 4Q. But I think last year, the business was facing pressure starting in the back half of the year. And so are we expecting the margins to be kind of similar through 3Q and 4Q and not exhibit that seasonality like we've seen in the past?

Yes. I mean we've gone -- thanks for the question. I mean we've -- over the last year, certainly, the world circumstances have been a little bit different, and there's a few factors. I guess last year, in the back half of the year in particular, there's a whole range of unusual dynamics around short production in Honduras, short production in Panama, a huge increase in the cost of fruit coming out of Ecuador, which tends to be the safety valve and the impact of that certainly had a strong impact on our back half of the year last year.

We're not expecting that dynamic to repeat in Q3 and Q4. And on top of that then, we see the delayed benefit coming in from our specific contractual adjustments around bunker fuel surcharge. So yes, we do expect the margin dynamic in Q3 and Q4 in Fresh Fruit to be different to Q3 and Q4 of last year.

Okay. Great. I appreciate that clarification there. And then just on the follow-up, I just want to zoom out and think about the Fresh Fruit business. I think in the past this has been described as a 5% to 6% EBITDA margin business over time. And I just want to think about the changes in sourcing, freight, just some of your own production footprint over the last couple of years. Wanted to ask you if you feel like this is an appropriate normalized margin rate and what you think it would take to get back to this level.

Yes, we'd like it to be a little bit higher, and our aspiration internally is to try and push up a little bit higher. Over the last few years, I suppose Honduras was the biggest single impact that affected us at the end of '24 and '25. That production is coming back on stream. And that, generally speaking, because of the way it links in with our logistics and shipping structure, the cost of production on Honduras tends to give us a particular advantage that goes to margin.

And we've invested, as I highlighted earlier, in a couple of production JVs, particularly in Guatemala. We've invested a little bit in plantains. I think pineapple margin as well within that has been under a bit of pressure just with some short-term climatic issues that affected the production and quality, sizing yields in pineapples in the short term. But that happens periodically and tends to balance out.

So we certainly could do with the world being a bit more calmer and the volatility around fuel prices, shipping prices, et cetera, a little bit helpful. But with a bit of a fair wind, the world would settle down on some of those production issues and we'll see the benefit coming through and try and push back up the margin a little bit to what our normal aspiration should be.

There are no further questions at this time. I will now turn the call back to Rory Byrne, CEO, for closing remarks.

Thank you. Yes. Well, I think we're very pleased with the progress the business has made during the first half of the year. No doubt that the operating environment remains complex. Our teams are continuing to execute well against the backdrop of a difficult environment. Our strategic priorities remain very clear. And we're focused on delivering sustainable long-term value for our shareholders.

Really would like to thank all of our employees right across the Group for their continued dedication and hard work to the Group, as well as to our shareholders, customers and suppliers for their ongoing support. So thank you all for joining us today and for your continued interest and support of Dole plc. Thank you very much.

This concludes today's call. Thank you for attending. You may now disconnect.

Good afternoon. I'm Leah Jordan, the packaged food and food retail analyst at Goldman. And it is my pleasure to introduce the management team of Dole. We have Rory Byrne, Chief Executive Officer; and Jacinta Devine, Chief Financial Officer. Thank you for both joining us today.

Thank you, Leah, for having us here.

Yes, absolutely. So as a quick refresher, Dole is the leading global producer and distributor of fresh produce operating in 30 countries with over 250 facilities and 300 lines of fresh produce that range from conventional to exotic. So now let's get into our chat.

So this is a consumer conference. I just want to start off on the demand side, given more a dynamic macro backdrop. What demand trends are you seeing across your portfolio? Any notable shifts across products or by region? And then how are you thinking about the long-term tailwinds or even headwinds across overall demand for produce as a category?

Yes. Well, I think we're very happy to work in the fresh produce industry. Our demand has been very consistent over a long period of time, and that continues to be the case. We've got some noticeable shifts, I suppose, in some markets, a little bit in the U.S., but probably more pronounced in Europe towards organics, for example, across all of the categories.

In the U.S. and in Europe, even smaller categories like plantains, exotics have gotten wider demand, mangoes, papayas, products like that, that have become more popular. We're also seeing, in particular, some new varieties in the berry space coming on stream, particularly blueberries that can now be grown in a wider geographical area, and they're available in greater volumes and much better and much more attractive varieties from a consumer experience point of view.

And then I suppose Kiwis is the other product. We have a big partner in New Zealand. And even, say, last year in Spain, we've sold over $100 million worth of New Zealand Kiwis. So it's interesting that I think demand has been very, very consistent. And I think when we look at the long term, you look at, I think, the younger generation, I don't know where we all sit in younger or older generation, but certainly, in Europe, you look at the investment by the EU and by governments in fruit for schools programs, 5 a-day consumption programs.

I think they're starting to yield a benefit and the younger people, younger generations are taking -- focusing more on healthier eating. We have some anecdotal evidence, some recent reports around people who are starting to use the GLP-1 drugs that you mentioned that post the usage of those drugs, they tend to focus on healthier diets, and we are expecting that, that will provide a positive tailwind for us as an industry as well.

So overall, the demand -- underlying demand, consistent, strong, the structural tailwinds, we think are positive for our industry.

I think that's great and good to hear. And I think building on that, maybe you could just provide more detail on how you think about price versus volume for your business as a top line driver going forward. I think if we see continued inflationary cost pressure, how do you think about your ability to take pricing in this environment?

Yes, it's interesting. We would like to see steady growth in volume, taking advantage of those tailwinds. In the short term, certainly, there are some unusual inflationary pressures. We went through the pandemic period and the post-pandemic inflationary period. It didn't have a material adverse effect on volume or consumption in that period. We have found -- you look at -- I think we've got products and fruit that is positioned at all price points in the marketplace.

So you look at bananas, which is 40% of our sales, still very important in both the United States and in Europe, it's still a relatively cheap product relative to other fruit products or relative to other convenience products, it's certainly much healthier, much easier to use. And we think that consumers, it's been even small increases in price in that has had no impact whatsoever on consumption.

So we -- the current inflationary pressures, particularly fuel, fertilizers, urea, inputs like that, we are seeing a sudden surge in those costs as a result of the current Middle East scenario. And we do believe in our 2 diversified divisions that our dynamic pricing model will give us the flexibility without much impact on consumption going forward.

That's great color. And I know we're going to dig more into all of your different segments here shortly. But maybe overall, as you've been able to see pretty resilient demand in times where you've been put through a little bit of pricing. But maybe just talk about the competitive landscape across your different regions and categories and anything you're seeing there?

Yes. I think you've got to differentiate between the banana and pineapple business and the rest of the fruit sector. So in the banana and pineapple sector, it is more consolidated and there are more, I suppose, recognized names as competitors. So you've got people like Chiquita and Del Monte in the North American market. So Chiquita, ourselves, and Del Monte would have maybe 70% market share in the North American banana market, for example, probably a similar share in the pineapple business.

And Europe in the banana business is the same 3 players participate in a significant way in the European market but a less significant market penetration. There are a lot of local players. A big French company, a big Italian company, Orsero, Fyffes, lots of local players that only operate in individual geographies.

So it's quite different. And then in the general food category covering berries, apples, pears, grapes in the full range, it is still quite fragmented. There is some consolidation in the berry category, and there has been, and we've seen recently some further consolidation in the avocado space. There have been a few deals, [indiscernible] underway at the moment, a few other Westfalia, with some private equity interest has been solid, but still quite, quite fragmented.

So when we look at competitors, yes, in bananas and pineapples, Chiquita and Del Monte would be significant competitors. But in all the other categories, we look at our competitor dynamic in a quite localized way. It's quite different.

That's very helpful to get a lay of the land there. And maybe we'll just dig in a little bit closer on each of your segments and starting with Fresh Fruit, I mean, continued strong top line growth, as we talked about so far. But that -- even before the inflationary pressure here recently, there's been some sourcing cost pressure as well. And so maybe you can talk about what you're seeing there? And then how do you think about the path of improving profitability there?

Yes. We've had some unusual dynamics in the banana business over the last 18 months, 2 years. So we ourselves back at the back end of '24 were hit by Tropical Storm Sara that pretty much wiped out our own production in Honduras. Chiquita had an issue in Panama, where a little bit political, a little bit labor and some other issues, but they decided to temporarily pull out of Panama. So even just the combination of those 2 seeking spot fruit in Ecuador. Ecuador is the single biggest export country in the banana business, tends to be the safety valve when there are shortages of fruit and people go there, and that drove up significantly the spot price and it disrupted our logistics, which are designed around the different sources.

So some water issues in Central America and Costa Rica and Guatemala, probably some lower yields exacerbated that to some extent. So that's starting to unwind. We've rehabilitated all of our own plants in Honduras. We're seeing the production coming on stream. We expect that to continue to grow further over the course of the year.

Chiquita has made some new arrangements with the Panamanian government -- they've gone back into Panama as well so that will ease some of the pressure in Ecuador. And of course, we're seeing some pressures out of the Middle East, where there's some logistical disruptions and some lower demand from that market short term that has brought the supply-demand equation back into balance.

So we're hoping that will be helpful as we go into the back half of the year, particularly our own production coming back on stream in Honduras and not having to source temporarily from the spot market.

Okay. That's very helpful. And then maybe just more color on that on the fresh fruit supply side. Just maybe more detail on trends, maybe any more color on the time line, specifically what you're doing in Honduras and Colombia and then some of those dynamics?

Yes. Colombia was affected a little bit by weather, but it's -- and that affected quality more than volume. So certainly with quality requirements from most of our major U.S. retailers. So some of the fruit went to Europe instead of the U.S. but that's temporary and has fixed itself. Honduras, we expect to be fully up and running by the end of this year, and we already are partially up and running. It's not a long regrowing cycle. We've probably expanded our acreage a little bit in Honduras.

We've also invested a little bit different. We took one of our joint production joint ventures in Guatemala. We've bought a new farm in Guatemala to give ourselves a little bit of a better strategic position and a source that's closer to the West Coast from the Pacific side of Guatemala going into the West Coast of the U.S.

So yes, I think with all of those, we expect our Honduras production to be fully up and running over the course of this year. Chiquita, I think back in Panama, Ecuador will have less pressure. So the fruit sourcing costs should get more into balance as the year. And that was pretty much in line with what we had anticipated to the market with our Q4 results last year, where we anticipate that the phasing of profitability would be a little bit different to the historical trend with a higher weighting towards the back half of the year.

Yes. No, I think that's been consistent with your messaging so far. Absolutely. Yes. Okay. Then maybe switching over to Diversified Fresh Produce and will be in the EMEA region. There, though profitability has held up well, while demand has as well. So maybe just key drivers that you're seeing in that business and then how you think about trends going forward in the back half?

Yes. I think our EMEA business in Europe, particularly is probably one of the most unrecognized pieces of our business and probably because it's close to my own heart because it was part of the old total produce business that was the acquirer of Dole. But we've -- if you go back over a long, long period of time, that's been a very steady, solid business, consistently growing, not by quantum leap percentages, but by steady percentages year in, year out.

We've got the #1 market position in a range of markets across Europe where we've got the full range of services, the full product range, the full spectrum of customers from wholesale to food service to retail in each of the markets, #1 market position in Ireland, in the U.K., in Sweden, in Denmark, Czech Republic, Spain, Holland, significant presence in Germany and Italy, Portugal.

So we've got a really fantastic upstream market capability for importing, handling, distributing, servicing our customers with ripening facilities, cold storage facilities, handling facilities, prepacking facilities in all of those markets and very strong a wide customer base across all of those markets. And it's the sum of all those factors that have provided that business. There's always going to be a few ups and downs, and we've had a few ups in the U.K., for example. And this quarter has been a little bit more challenging.

I think the U.K., as we know, economically is suffering a little bit for a range of reasons and probably impacted in the wholesale sector by some weather issues in Southern Europe that caused shortage of supply into the Wholesale segment. But overall, normal ups and downs, but I think we're strategically very well positioned there. There are further opportunities for growth in those markets and -- but really pretty satisfied with their whole EMEA diversified division.

That's great to hear. And then maybe just switching over for Americas and Rest of World on diversified fresh produce. Can you walk through the key trends you're seeing there and how you think about expectations for the balance of the year?

Yes. I think the Americas and Rest of the World is probably the best example of more 5 years quote than July of '26, we quoted when became listed on the New York Stock Exchange in July of '21. Time goes by. But I think the Americas and Rest of the World is the area that we have achieved the most in terms of bringing together the legacy Dole Food Company and the legacy Total Produce company and the management teams are now fully integrated. The last piece of the jigsaw was late last year, integrating the marketing arm of the Dole Diversified Division, Dole Direct North America into our Oppy business here in North America to take out cost to make it more efficient in terms of our offering to our key customers, and that's worked very well within the marketplace.

Our Chilean business has performed very well, particularly our cherry business. We're probably the leading player in the Cherry segment. We've got the strong -- the cherry business, really the cherry on the cake for that one is getting your product into the Chinese market before the Chinese New Year. So we've got our production well organized, well planned. We've got high-quality big berries, good color, get them into the market before the Chinese New Year, and we've been achieving good pricing and good profitability on that segment.

Q1 is probably a little bit flatter because it overlaps Q1 and Q2 and just the way the season fell this year a little bit more going into Q1. So numbers look particularly good in Q1. But I think other aspects of the grape business, the kiwi business, the apple business have all been going very well. Some further opportunities for expansion in Peru that we're looking at. But all in all, we're pretty satisfied with very strong management team within that division and the business is running well.

That's great to hear, and thank you for that. update. And you kind of talked about cherry and that came through on the last call of how strong and growth there. I think on the last couple of calls, you've talked about even a new pineapple line that you have, and that seems to be doing really well. We never think about innovation in produce always, but you guys continue to push the bounds you have your core kind of pineapple and bananas business and then have ranged into exotics. So maybe just if you could talk about how you think about innovation and longer-term opportunities within your portfolio, how you think about kind of the R&D time line or anything there and how those products are resonating.

Do you want to say something on that?

Yes. No...

Very CFO for...

Colada Royale has been a great success. It's a wonderful product, really well received in the marketplace. It's the product of 15 years of R&D. It's a non-GMO product, which I think, is important and non-GMO takes time. There's no doubt about it. It's very well received where it certainly created a bit of momentum in the category, which is really nice to see and the retailers, our customer base really appreciate that.

So the volumes are still small, but we hope to continue to scale that. Other than that, I suppose an important area of focus for Dole is in the banana space, disease-resistant varieties. There are some challenges in Tropical Race 4 and also in things like Black Sigatoka. So we're focused on developing varieties there that are disease resistant. It's an ongoing process. Again, it will take some time, but we see some opportunities there. And I suppose in the wider innovation arena, we are very focused on efficiency in our facilities where we're packing and preparing for our customers. And Rory talked a little bit about this on the earnings call. We have a strategic opportunity to invest in one of our Scandinavian facilities, and we're going to be taking -- we've already quite sophisticated packing robotic technology, but we're taking it to the next level, and we see wonderful opportunities there.

We're going to invest around $100 million all in. So it's a great opportunity, and we believe we get the appropriate returns for that investment. So exciting for that opportunity as well.

Yes. That's great to hear. I mean you have a global operation, so always a lot of opportunities to drive efficiencies.

Absolutely. And then maybe on the branding side as well, I feel like this is a trend we're seeing across the fresh category here in the U.S. Everyone knows the Dole pineapples, and bananas. But how do you think about opportunity to leverage your brand across different regions, across different products? What do you see there?

Yes. So you're right, Dole is the #1 fresh produce recognized brand in the U.S. and it has a very strong recognition in certain European markets, Germany, Scandinavia and Italy. And so we see opportunities in the other markets. Mostly, I suppose, from a B2B point of view that Dole is very recognized for consistency of supply and quality in the markets where it's well known, and we're seeking to develop and evolve that. So we see lots of opportunity in that regard as well.

That's very helpful. And then maybe just switching gears, Rory, you kind of mentioned at the top some of the higher cost pressures, right, around fuel and the like. And you guys move products around the globe. You have 13 of your own vessels. So maybe just what impact are you seeing to your business with the recent rise in fuel costs? And then how do you think about mitigation tools that you have?

Yes. I think that's probably the most dramatic impact that we've seen is the fuel. I mean the fuel, it's not like you have stocks of fuel that you can -- when you're running ships, you fill them as part of the route. So it's instantaneous. And it always seems to be the case that when the price goes up at the wholesale level, it goes up at the usage level very quickly. It doesn't always come down as quickly when it reduces.

So it's a direct and immediate impact on us. I think there's two aspects to it. One, most of our U.S. banana and pineapple business, which is what we primarily use our own ships for is on fixed price annual contracts with our retail customers with one exception, and that is a bunker fuel charge adjustment. So it comes in a quarter in arrears, a trimester in a year in arrears. So we believe it's a mathematical equation that's been up and down. So we believe that we've got a fairly high degree of protection of that coming through. And it's the most significant cost impact that we'll have as a result of the Middle Eastern scenario.

And then in our other divisions, it is an ongoing dynamic pricing model and all of the factors such as supply-demand, production trends, production yields, quality, freight, discharge competing seasons, all into the mix and the price is constantly changing. So it is much easier to put those kind of changes through.

Customers are used to it, consumers are used to it. The prices do change quite considerably over periods of time. So we expect them and we've seen it. We look at pandemic shortages, logistics disruptions. We had similar circumstances, even tariffs. We had similar scenarios, and we were able to adapt to those circumstances, and we believe we'll be able to adapt appropriately as well. We prefer it wasn't the case, but it is, and we will be able to deal with it.

Yes. That's great to hear. I think kind of building on that, that's an incremental headwind that maybe you weren't expecting at the start of the year, but you still got top line momentum, some of the profitability accelerating in the back half on what you already saw. So maybe as we bring it all together, high-level puts and takes as you think about your FY '26 guidance, what are the big swing factors you're watching to kind of hitting that $400 million EBITDA number?

Yes, it's certainly complex, and it has -- you're right, it's more complex than we would have anticipated when we first set our target when we're announcing our Q4 numbers. I think Rory has just explained the fuel piece of it and how we can expect to get that back as the year progresses. Otherwise, demand, as we've talked about, has been good. Price, we've been able to increase price, and that has been positive.

So overall, we think from the banana side, banana and pineapple side, that will flow through well in the year. And then our diversified businesses have performed very consistently, and we can put prices through. So overall, we feel reasonably good, but it's complex. There's no doubt about it. There's a lot of moving parts, and we certainly wouldn't have anticipated some of the cost pressures that we're now seeing. But demand is good, and that's the key message.

Yes, absolutely. It's tough for everybody, and you guys seem to be managing just well. So that's great to hear. I think one of the other things I wanted to talk about is just -- you kind of touched on this earlier, right? There's been a lot of change in your business over the last few years. And part of that has also been moved around just optimizing your asset base. And I know there's still ones like selling a port and just opportunities to drive efficiency around your whole network. So maybe you could just talk about some of the strategic rationale of moves that you've made over the last couple of years. How much more opportunity do you see to optimize your assets going forward?

Yes. I mean I think it's been a constant process. I mean, post the bringing together of Total Produce and Dole, we took a good look -- hard look at the portfolio. I think one of the problem aspects of the business was the value-added salad business. So we really wanted to find -- I think the pandemic really highlighted some underlying weakness in that business that was very hard to fix, and it struggled post pandemic with some excess capacity in that sector. So that was a bit of a drag on the business for a few years. I think it's probably even maybe the most significant drag on our stock price over that period of time.

So around the middle of last year, we were very happy to do a deal to exit that particular business. We also sold another business that we're very happy with the Progressive Produce business out in California, we got such an attractive price. In terms of our leverage, we decided we got like a double-digit EBITDA multiple on an average of a number of years EBITDA, which is maybe double the rate in the market was given to us. And given our debt profile at the time, we decided just it was the right deal rather than a strategic move when we took it.

And then we've been looking at any excess assets that we've got around the group. We sold some Hawaii land in the past within the Dole Food Company to be an important producing source, but become less important. And we've a reasonable land bank in Hawaii that's not producing the EBITDA. So we've been gradually selling down some assets there. And then as you say, the port in Ecuador, we own a significant position in the port in Guayaquil in Ecuador. When originally that was built, it became it was essential to make our exports of bananas out of Ecuador more efficient and get our own ships in and out of the port.

The whole port world has moved on. It needs significant new investment. There are some big port operators out of that in the world now. And we have quite a competitive bidding process, TiL, which is a subsidiary of MSC came out on top and they've got something like 39 ports worldwide. They're going to make a significant investment in expanding it.

We'll land operating on the same commercial terms that we do today, and we'll crystallize $75 million that really was generating quite low returns for us. So it's just good asset optimization from our perspective.

Yes. That makes a lot of sense. And I guess on the back of this, right, there's multiple things you went through to get the asset base where it is today. And so as you kind of sit with more of a clearer path forward, maybe to round out our conversation, if you could just spend some time talking about your overall capital allocation strategy at this point?

Yes. I mean the capital allocation strategy, I suppose, is a very dynamic subject and it's one particularly that may be different perspective from U.S. investors and European investors and emphasis on different aspects of capital allocation. So it's something that we consistently look at all aspects of capital allocation. We've got routine CapEx. We like to keep -- we have a chunky asset base. We like to keep it well maintained. We keep our farms up to date. We keep our facilities up to date. So we do that as a matter of course.

We've held our dividend at a consistent level. There's a chunk of our investor base very happy to have a dividend. A steady consistent dividend. And then we've got some interesting development opportunities and particularly the Scandinavian opportunity to modernize and be at the leading edge of technology in terms of robots, in terms of AI, in terms of technology, in terms of -- we think that's a very good strategic opportunity. It's a chunky investment in our terms, $100 million.

We have a good track record in Scandinavia. But even if we can get that to work very efficiently, it will be a step change within our industry, and it may be a blueprint for further expansionary opportunities. We do look at -- we have a buyback program approved. We have said to the market that we would use it opportunistically rather than programs. There's been a lot of volatility in the market. So we do use that now almost as the benchmark to judge investments like the Scandinavian investment to make sure that the returns from an investor perspective are at least equal to the returns that we would get from a buyback. And if we can beat the buyback return, we think it's a better investment for the long-term growth of the business.

So I mean all aspects of capital allocation, constantly under review, dynamic process. And I think having the buyback program in place, if there was a sudden correction in the market, it may be an opportunity to do a little bit more in buyback or things like that. So we've got the flexibility, and we've got the tools in the kit to do it now.

That's great. That's very helpful color. And maybe one topic I didn't hear about, but I'll just follow up on the M&A side. Just how do you see opportunities today, appetite across products or regions? What characteristics do you typically look for?

Yes. I mean it is products, it is geography. I think our short-term focus is more on bolt-on tuck-in acquisitions or something called them decided upon, but it's where we can link it into an existing geography. We have a number of smaller opportunities available in markets like Spain, Italy, Ireland, and we're working on a few of those. And as the year progresses, we'll give further updates. They tend to be the best ones for us to just -- it's easier to manage and it's easier to integrate and it's easier to get a little bit of synergies, not huge in the overall scale of things, but they do add to the pie and give us a little bit of incremental growth, and there at prices that are sensible.

We're seeing in, say, the berry space, we would probably -- we're growing step-by-step internally our berry business. If we wanted to make a quantum leap step in the berry business, we would have to acquire something. At the moment, the berry companies that we're looking at have a significant premium over our ratings. So it makes it a little more challenging for us. It's a sector we keep our eyes on.

We've seen in the avocado space some further consolidation, Mission acquiring Calavo. We looked at the financial dynamics around that and certainly Mission appeared to have an opportunity to get a significant synergy benefit of that we would not have been able to achieve and that probably justifies to paying a very significant price for that business that, again, without the synergy that we wouldn't have made.

So we do our own internal corporate finance department with a close eye on what's happening in the world right around the world, Asia, Australia, Europe and America core markets. So we know who's doing what, generally speaking. But we've been -- we're going to be cautious. We're not going to overpay for businesses. We have a long track record of buying things. We need to be patient for a period of time. We've also had a lot of competition from private equity over the last number of years, and we're seeing some of those come to maturity. We'll see where they go. But we're just going to -- we're only going to do deals that we genuinely believe can add to shareholder value.

Okay. That's very helpful. I think I have time to sneak one more in and maybe just switching gears a little bit. But you recently transitioned to being a domestic filer here in the U.S., obviously, several years ago, being listed. Maybe just talk about the rationale behind the recent move and just maybe next milestones and how you think about the path going forward and what this opens up.

Yes. I think it was a natural next step for us. We had already been providing all our information in domestic issuer format. And I thought we were ready to file as a domestic issuer. So we filed our annual report this year for the first time in on domestic issuer form. And then for Q1, we think it's important to get access to some of the indices here. We're already in the Russell Index. We achieved that a little while ago, and we're seeking access to S&P, MSCI.

It's not straightforward. As you may know, it's -- we believe we now have all the attributes to allow us to be included. And we're knocking on the door and hope we will -- particularly, we're focused on the S&P initially, and we think we can get there. But exactly when it's difficult to predict. But yes, we're delighted to have that opportunity.

Understood. That makes a lot of sense. Well, thank you so much both for all the detail today. This has been a great chat.Thank you very much.

Thank you very much.

Thank you.

Welcome to Dole plc's First Quarter 2026 Results Webcast. Today's webcast is being broadcast live over the Internet and is also being recorded for playback purposes. [Operator Instructions]

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 is our Chief Executive Officer, Rory Byrne; our Chief Operating Officer, Johan Linden; and our Chief Financial Officer, Jacinta Devine.

During this webcast, we will be referring to presentation slides to supplement our remarks and these, along with our earnings release and other related materials are available on the Investor Relations section of the Dole plc website. Please note, our remarks today will include certain forward-looking statements within the provisions of the federal securities safe harbor 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 or outcomes 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 includes a reconciliation to the most comparable GAAP measures.

With that, I'm pleased to hand over to Rory.

Thanks, James. Welcome, everybody, and thank you for joining us today as we discuss our results for the first quarter and give an update on the latest developments within the group.

So firstly, turning to Slide 4 for a review of quarter 1 and 2026. Well, we're very pleased to report a solid start to the year with positive momentum across the group being reflected in strong revenue growth of 12% year-over-year. We are seeing positive consumer demand for our products across all our key markets, supported by evolving dietary preferences influenced by GLP-1 adoption and the broader health and wellness trends.

Adjusted EBITDA of $100 million was in line with our expectations. This result was driven by strong performance in diversified Americas as well as growth in diversified EMEA partially offsetting a lower result in Fresh Fruit due to higher fruit sourcing costs. This result once again demonstrates the resilience of our business model particularly in light of the additional complexity being seen in the operating environment due to the ongoing conflict in the Middle East. While our direct exposure to the region is limited, we are experiencing indirect effects, including elevated fuel costs as well as higher prices for other inputs such as fertilizer and paper.

As announced in December, we agreed to sell our port operations in Guayaquil, Ecuador to Terminal Investments Limited. We are very pleased to update that regulatory approval has been received, and we expect to complete this important transaction during the current quarter. We continue to expect net proceeds after tax of approximately $75 million.

So turning to Slide 5 and focusing more on the team of capital allocation. Obviously, our priority is to seek the best long-term returns for our shareholders. We have identified several development opportunities throughout our operations, which we believe can deliver good returns, particularly when benchmarked against the alternative expected return from share repurchases. These opportunities are spread across our value chain and are combination of development investments and bolt-on acquisitions.

Ensuring access to high-quality produce and diversifying our sourcing are essential elements of our strategy. To support this, we have made recent investments to increase the portion of our own production in Fresh Fruit through an investment by one of our joint ventures. We have increased our own production and sourcing from Guatemala for both organic and both conventional and organic bananas as well as plantains.

And diversified Americas, we continue to invest in the cherry category with a focus on securing high-quality and stable product volumes. We've also invested in our packing operations for cherries, citrus and other products with the investments being made both through our wholly owned operations as well as via our joint venture companies. In diversified EMEA, our investment focuses on end markets and our distribution channels.

Over the last number of years, we've made investments in our logistics and automation capabilities in Sweden, particularly in our third-party logistics company, Nowaste Logistics. Nowaste is delivering good returns, and we continue to see further opportunities for similar future investments in this business. In addition to our third-party logistics operation in Sweden, we are exploring a strategic opportunity to further invest in automation, AI and innovative warehouse solutions to better serve our core customer base. We are working towards the finalization of a significant development investment in the order of approximately $100 million, which will provide us with a strategic platform for sustainable long-term growth.

In Ireland and Spain, we are also investing to upgrade and expand our warehouse operations and infrastructure. Finally, given the fragmented nature of our sector, we are focused on identifying bolt-on acquisition opportunities that are complementary and synergistic to our existing businesses. In this regard, we are progressing a number of opportunities in Ireland, Italy, Spain and Sweden, and we'll update further as these progress.

Slide 6 outlines our capital allocation priorities. We invested $18 million in the quarter in routine capital additions and continue to expect full year investment of approximately $100 million. This covers routine profit maintenance investments across our farming, shipping and distribution assets as well as in IT. As I've just discussed, advancing the development of the group is a key strategic priority for us, which we will pursue through development capital expenditure and targeted bolt-on acquisitions.

And of course, generating and delivering good returns for our shareholders, is a major component of our capital allocation strategy. We offer an attractive and consistent quarterly dividend, which we assess annually. In November, our Board granted authorization for share repurchases, and we are using this authorization opportunistically benchmarking the returns relative to those available from our portfolio of development projects.

So turning now to the operational review and starting firstly with the Fresh Fruit division on Slide 8. As expected, the elevated fruit sourcing costs experienced in 2025 continue to have an impact on Fresh Fruits profitability in the first quarter of this financial year. Positively, we continue to see strong category demand driving higher overall portfolio volumes. This was particularly evident in our sales of bananas in Europe this quarter.

In North America, revenue growth was driven by higher year-on-year pricing across our categories. In Europe, along with higher banana volumes, we benefit from a favorable movement in the euro versus dollar exchange rate. Lower overall industry volumes have contributed to higher sourcing costs across the segment and the continued appreciation of the Costa Rican Colon is also impacting pineapple profitability.

On the production side, we have rehabilitated our farms in Honduras. And as mentioned earlier, we have invested in production and sourcing capacity from Guatemala. We expect these investments to deliver benefits as the year progresses. We are closely monitoring developments related to the conflict in the Middle East. Input costs, including fertilizers, paper and fuel have increased. For fuel specifically, we have variable surcharge in places, in place for -- with our North American customers, serving as a mitigant against rising fuel expenses, albeit with a time lag. Overall, while the unfavorable supply dynamic and recent developments in the Middle East are impacting our cost base, we remain confident positive demand trends combined with strategic investments and cost saving initiatives will lead to improved profitability on a full year basis.

Moving on to the Diversified EMEA segment. This segment has had a solid start to the year with adjusted EBITDA up by 8%. We've seen continued revenue growth supported by favorable exchange rates from stronger European currencies against the U.S. dollar and robust underlying organic growth of 4%. The Nordics have been a strong contributor in the first quarter, and we are seeing the benefits of recent investments in our third-party logistics business in particular. Other notable contributions in the quarter were from our operations in Germany, driven by higher grape volumes.

These positive factors helped balance out reduced profitability in the U.K. caused by lower product availability from Southern Europe and North Africa during the quarter as well as lower margins in the Netherlands and South Africa. This once again demonstrates the advantage of our diversified business model and strategy. Looking ahead, we are focused on executing on a number of internal and external investment projects across Ireland, the Nordics and Italy, while proactively identifying additional volume avenues for growth. In summary, we anticipate that the current positive momentum will continue throughout the remainder of the year.

And lastly, turning to our diversified Americas segment. This segment delivered another strong performance in the quarter with adjusted EBITDA up by 29%. The result was driven by a positive end to the Chilean cherry season. The season was categorized by higher volumes to meet growing consumer demand. and we continue to invest in this category to take advantage of these positive demand dynamics. In addition to cherries, our Southern Hemisphere export business has experienced positive volume trends in several other categories. We also experienced increased activity in our North American imports and marketing operations, which compensated for lower avocado pricing. Furthermore, this part of the business is also seeing the operational benefits of the integration of Dole North America with Oppy. Finally, our joint ventures in the segment have started the year well, and we expect to see the benefits of recent investments as the year progresses.

So with that, I'll hand you over to Jacinta to give the financial review for the first quarter.

Thank you, Rory, and good morning, everyone. Turning firstly to the group results on Slide 12. Group revenue of $2.3 billion was 11.6% higher on a reported basis, reflecting continued positive demand for our products as well as favorable foreign exchange movements. Excluding foreign exchange impacts, on a like-for-like basis, revenue was up 7%.

Cost of sales increased at a proportionately higher rate than revenue and was driven by higher food sourcing costs in Fresh Fruit segment. However, gross profit increased by $2.8 million. SMG&A increased by $5.4 million or 4.5%, mainly due to the impact of foreign currency translation, partially offset by the synergies achieved on the integration of DDNA and Oppy. This increase, along with a higher gain from asset sales in Q1 2025, following the sale of land in Hawaii, contributed to the $6 million decrease in operating income. Other income increased by $4.8 million, predominantly due to an unrealized gain on foreign currency denominated borrowings.

Interest expense decreased by $4.6 million due to lower average borrowings, lower base interest rates and the benefits of the refinancing completed in May 2025. Equity method earnings decreased by $6.7 million primarily due to a noncash gain of $6.9 million on an M&A transaction booked in Q1 2025. Overall, net income was $37.7 million, $6.4 million lower than prior year.

Looking now at the non-GAAP performance measures. Adjusted EBITDA was $100 million, a decrease of $4.5 million and mainly driven by higher food sourcing costs in Fresh Fruit, partially offset by strong growth in Diversified Americas and a solid performance in Diversified EMEA. Adjusted net income decreased $1.9 million predominantly due to the decrease in adjusted EBITDA as well as higher depreciation expense and higher interest and tax in equity method investments following recent investments made in our Chilean Cherry and Citrus JV and our Guatemalan tropical produce JV. These decreases were partially offset by lower interest expense. Adjusted diluted EPS was $0.33 compared to $0.35 in Q1 2025.

Turning now to the divisional updates starting with Fresh Fruit on Slide 14. Revenue increased 7%, primarily due to higher worldwide pricing of bananas, pineapples and plantains and higher volumes of bananas sold in Europe. Adjusted EBITDA decreased by $10.7 million, mainly due to higher food sourcing costs and the impact of the appreciation of the Costa Rica Colon. Reported revenue in diversified Fresh Produce EMEA increased 15%, primarily due to a favorable impact from FX as well as underlying growth in France and Germany.

On a like-for-like basis, revenue increased by 4% or $36 million. Adjusted EBITDA increased 8%, driven by a favorable impact from FX translation, and good contributions from Scandinavia and Germany, partially offset by lower underlying earnings in the U.K., the Netherlands and South Africa. On a like-for-like basis, adjusted EBITDA decreased $1.4 million.

Finally, Diversified Americas delivered another strong result in this quarter. Revenue increased 16%, driven by higher volumes and pricing in our Southern Hemisphere export business. as well as by higher volumes in our North American businesses, offsetting lower pricing, primarily in avocados. Adjusted EBITDA increased by $4 million to just under $8 million, driven by higher revenue the benefits of the Oppy and DDNA integration and a good performance in our joint venture operations.

Turning to Slide 17 for a review of key cash items and leverage. As Rory mentioned, routine CapEx was $18 million, and there was no material development expenditure in Q1. For full year 2026, we are maintaining our guidance for routine CapEx of approximately $100 million. Cash flow from operations was influenced by a routine working capital outflow, consistent with our standard cycle in which outflows typically occur during the first half of the year and inflows follow in the latter 6 months.

The outflow of $22 million was $56 million lower than Q1 2025 as the prior year was negatively impacted by accentuated working capital outflows. Free cash flow was an outflow of $40 million compared to an outflow of $132 million in Q1 2025 due to the lower cash flow used in operations and lower CapEx as the prior year included the purchase of 2 vessels, which had previously been on finance lease. Asset sales and other business disposals generated proceeds of $6 million in the quarter. We ended the quarter with net debt of $657 million and net leverage of 1.7x.

Now I'll hand you back to Rory, who will provide an update on our outlook for 2026.

Thanks, Jacinta. So overall, we're pleased with the solid start to the year and the positive momentum we're seeing across our operations. Looking forward, conditions in the Middle East remain fluid, making the operating environment more complex and having a direct impact on our cost base. We anticipate increased shipping and fuel costs in the second quarter, particularly in our Fresh Fruit segment.

However, as the year progresses, we expect to see the benefit of contract price adjustments as well as the benefit of our dynamic pricing strategy within our diversified divisions coming through. Our resilient and diversified business model, positions us well to handle today's complex environment. Demand for our products remains strong, supported by major health and wellness trends. We also anticipate positive returns from our recent investments and remain committed to advancing our development pipeline. Taking all these factors together, we are continuing to target full year adjusted EBITDA of at least $400 million for 2026.

I want to finish by once again thanking all our outstanding people across the group for their ongoing commitment and dedication to advancing our business, particularly in the light of the challenges over the last few months due to the current dynamic operating environment. As always, we really appreciate our essential partners, suppliers, customers, shareholders and all other stakeholders for their continued support.

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

[Operator Instructions] Your first question comes from the line of Gary Martin with Davy.

Congrats on a strong set of results. I just have a few questions on my side. I'll start with the guidance, just to begin with just the at least $400 million adjusted EBITDA guidance.

I guess, if I kind of read through the components of that, it seems that part of it is going to be centered around some dynamic pricing on the diversified side of things. And then there's also a bit of an ask when it comes to actual direct negotiation on the Fresh Fruit side. So I'd just be curious what gives you the kind of confidence on the direct negotiation, Fresh Fruit side pricing? That's one part of the question. And then you had also mentioned in your prepared remarks, Rory, that you expected to offset some of it from internal savings. I'd just be curious as to what the quantum of those material savings will be? That's my first question.

Okay. Thanks, Gary. So yes, I mean, guidance, as you well know, is very difficult to predict in this uncertain world, but it does certainly refocus everybody's minds to look at all aspects of the business. So it was a good opportunity even within all of our divisions to relook at our cost base on a division-by-division basis, even our central costs, and we expect to make reasonable savings.

We tend to run a pretty tight ship anyway, so you're not going to get quantum savings. So we will get some incremental benefit from that. I think at the outset, we expect to have a second half of the year to be stronger than the first half, which is a little bit unusual. And perhaps it gives us a little bit of leeway our diversified, particularly Americas business is Q1 and Q4, very weighted, but it gives us a little bit time to adapt to the cost base changes in the system. And our history and experience would tell us that we have been able to get that through in pricing across all the segments.

So you're right. I mean, in some ways, you've answered the question yourself, Gary, that our diversified dynamic pricing model has worked very well for us. I mean you've only got to look back at say, the disruption that was caused by the introduction of tariffs, and we believe we managed to navigate that challenge pretty well. So we're reasonably confident that putting all of those factors into the mix that we are able to hold the guidance on a full year basis.

That's really helpful. And then just maybe a second question just around capital allocation. And I appreciate there's a lot of good color there on Slide 5, just around the moving parts. It would just be good to kind of get your thought process on even prioritization between, we'll say, buybacks, forward M&A, some of the organic investment and just the debt repayment piece with maybe particular emphasis on the last component, just kind of given the kind of rate trajectory at the...

Yes. I mean the capital allocation, as you know, Gary, it's a very dynamic process. So we're continually internally examining all aspects and all opportunities for capital allocation. It's probably a while since we've made any significant investment within the business. We think if we look at our Scandinavian business, in particular, it's been at the forefront of advanced technology for picking, packing, preparation, probably got the highest labor costs as well in Europe. So it's the easier target to apply even some of the new emerging technologies in artificial intelligence and picking.

So there is an opportunity. We have a few pieces of the jigsaw to put together to do that, but that would be a huge focus for us to try and take the next iteration of technology in terms of picking and packing and order preparation, if it works, it could be certainly a very strong blueprint for other aspects of the business as well. So our debt levels as well.

I think in terms of debt payback, we're comfortable with the current level, keeping our eyes on the world generally and hopefully, interest rates don't move in any kind of a negative way. But our idea today was really to set out more clear terms that we do have some very attractive internal development opportunities, and that is going to be our short-term focus. We have all the other tools in the kit as well. So that can be dividend, it can be buybacks. It can be debt repayment. And it is a very dynamic process that we continually internally challenge ourselves on what the best capital allocation process is.

That's helpful. And then just maybe one final one just around just Fresh Fruits costs. I mean they were quite elevated in Q1. And it seems like that's maybe some of the kind of after issues of storm Sara and other kind of growing issues are still working its way through the system. I'd just be curious as to what you're forecasting for the remaining 9 months when it comes to just general, we'll say, banana supply and demand just through the system.

So maybe, Johan, do you want to make a few comments on that, please?

Yes. Gary, I think you touched on it. But if you remember, again, just to set the stage a little bit. Last year, we had a shock when it comes to the supply. We had our problems in Honduras with a Tropical Storm Sara. At the same time, you had weather issues in Costa Rica. And then you had Panama totally falling out, which didn't impact us directly, but it impacted one of the competitors and therefore, impacted the supply.

The consequence of this was a very tight supply costs went up. And as we negotiate through the year, we don't negotiate everything in the fall, we negotiate through the year, it will take some time for us to catch up. So this is working itself through the system. And we expect, as we leave Q2 behind us when also the fuel surcharges has caught up with realities. We believe the picture is going to be much better, Gary.

Your next question comes from the line of Christopher Barnes with Deutsche Bank.

I guess, first, I'd just like to follow up on Gary's question around guidance and the cost environment. So you mentioned that the Middle East conflict is already impacting fertilizer and packaging, and you're expecting higher shipping and fuel costs in the second quarter. But I'm just hoping you can put a little more quantification against some of these buckets? And how we should think about the cadence of EBITDA from here just as it relates to these escalating cost pressures balanced against what sounds like a lag on pricing and some of the surcharges that you're using to offset these dynamics?

And then just relatedly, the operating environment is clearly very volatile. But to the extent you do get some relief like how locked in are some of these pricing and surcharge benefits if oil prices and other cost pressures subside over the balance of the year?

Thanks, Chris. Yes, I mean, we do expect that Q2 is going to suffer quite a few of the costs, particularly in relation to fuel. And there is just a technical time lag when you get the price adjustment under the bunker surcharge formula. So it comes in a quarter in arrears effectively. So a chunk of that, it's effectively mathematic it will hit Q2, but we will get the benefit in Q3.

So the consequence of that is that we are expecting, as you asked, with the cadence of the flow by quarter, while we don't give specific quarterly guidance, we will clearly suffer some pressure, and particularly in our Fresh Fruit division in Q2, but that will be made up in Q3 and Q4, and we expect a stronger weighting compared to certainly last year on the second half of the year versus the first half of the year. In our diversified divisions, the reaction, there's so many variables goes into making up the pricing. It's much more variable that can go from production levels in different products. It can go from shipping costs, historically tariffs competing season switch from Southern Hemisphere to Northern Hemisphere. And there are consistent variables that we're dealing with and it creates a consistent variation in the price to our customer base.

So we expect to be able to pass through the ups and downs in that cost chain to our customers much quicker than we can do within our Fresh Fruit division. I think as Johan explained, some of the pricing increases are phased in over the course of the year, and they are locked in, in a positive way as well. We're hopeful that the supply dynamic changes a little bit. So Again, it's not an exact science guidance here. We put it all into the mix. We've done a pretty comprehensive piece of work across all of the divisions. And our judgment is that we can still get at least the $400 million for the full year.

Okay. Great. That's helpful for perspective, Rory. And then just separately around the diversified Americas business, like that business continues to execute at a very high level, both on the top line and EBITDA. So can you just elaborate on what's driving the strength and how we should expect it to continue from here? Like was the first quarter like what was the source of the strength in the first quarter? Was it more just seasonal timing, like strong execution? Or like how should we think about the structural improvements from Oppy and Dole diversified North America integration.

Yes, I think certainly the Dole Diversified North America integration with Oppy has worked very positively. We've been able to take a chunk of cost out of the system, consolidate our efforts of marketing in the North American market. So I think that's been really, really positive. I think it's probably fair to say that there's an element of seasonality within Q1, particularly around the cherry season and over the course of the year, we expect to have an improvement year-on-year, but not as dramatic as perhaps highlighted in the first quarter.

But the overall the division and the other categories within Chile, Peru and other aspects of that business have worked positively over the quarter. We've very strong, focused management team in that division, and they've been performing well over the last while, and we're positive that with small step-by-step investments within the division. We're building up our volumes through consolidating marketing of other third-party volumes as well. So we're reasonably optimistic that we're well positioned within that division on an overall basis.

Your next question comes from the line of Pooran Sharma with Stephens.

Just wanted to understand just the Middle East region a little bit. I think your guidance incorporates cost pressures looking ahead due to fuel. But just wanted to get a better sense of the demand picture. Do you -- are you concerned with any sort of demand degradation just given the conflict has persisted maybe longer than we had originally thought it would?

Yes, we don't have a huge amount of direct business into the Middle East area. We do have some. We do some banana business into that region and our South African operations also sell into that region. And the trade has largely continued, albeit with a lot of complications around freight and transport getting into that region. And we hope that settles down. That can have some further impact on isolated parts of the business, and in particular, our South African unit and coming into the South African citrus season, we do sell a reasonable percentage of our South African citrus into that business.

So we would like to see that trade opening back up. But other than that, we don't see any other significant impact on demand on our main core markets in Europe and North America.

Great. And on my follow-up, I just wanted to understand your opportunity for investments here. I think on the deck, you highlighted the $100 million potential automation investment. And I was just wondering if you could maybe update us or just remind us what kind of payback period is associated with this type of investment?

Yes. I mean we're targeting returns in the order of 12%, 15%, at least on an investment like that. And I think, as I said, one of the key benchmarks for us now has been looking at what the return would be by using the capital to buy back our own stock. Obviously, it's complex because we look at that division in Scandinavia, we've been at the cutting-edge of technology. We want to grow our business for the long term. We want to continue to be very relevant to our customers we need to invest in the business to stay ahead of the game and to keep even our people focused and motivated on developing that business. But we do expect attractive returns on that investment as well or we wouldn't be doing it clearly.

Appreciate that color. And I guess just for my last one, and you may have touched on this a little bit, but how do you weigh that decision versus kind of like your progress that you've identified in Ireland, Italy, Spain and Sweden. And I guess what I'm asking is how do you determine whether to do an organic investment here or whether to do kind of like a bolt-on or an M&A?

A little bit of it is opportunistic. As I said, at the outset in capital allocation. It's a very, very dynamic process. It's not just absolutely cast in stone, and we have to be dynamic and react to opportunities that as and when they arise. We have our own internal corporate finance team that's constantly looking at significant opportunities or what's happening in the market, generally speaking.

And then our local teams also look at local opportunities within local markets, certainly in terms of value, we found that some of the smaller bolt-on acquisitions are more attractive. The initial price expectation is more reasonable and indeed, we can generally get more synergies out of integrating them with our operations on the ground. So it's a dynamic process and constantly trying to ensure that we are moving our business forward. We're staying relevant and attractive for all of our key customers, our key suppliers and that we have all of our people focused on trying to do that. So at the moment, we have a couple of those, a couple of opportunities that I've called out that we are exploring and continue to explore in a detailed way. And hopefully, as time progresses over the course of the year, we can give you some more update on how they evolve.

There are no further questions at this time. I will now turn the call back to Rory Byrne, CEO, for closing remarks.

Well, I think we can be very pleased with the solid quarter 1. There's no doubt that we're living in complex times in a complex world. And I really would like to just make a particular call out to our experienced team at all levels across the organization. That yet, again, once again, have shown the capacity to react to very dynamic circumstances. And I think that gives us the confidence to be well positioned. And hopefully, as the year evolves, have a good full year outcome. So thank you very much for joining us today.

This concludes today's call. Thank you for attending. You may now disconnect.

Welcome to Dole plc's Fourth Quarter and Full Year 2025 Results Webcast. Today's webcast is being broadcast live over the Internet and is also being recorded for playback purposes. 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.

Welcome, everybody, and thank you for joining our results webcast. Joining me today is our Chief Executive Officer, Rory Byrne; our Chief Operating Officer, Johan Linden; and our Chief Financial Officer, Jacinta Devine. During this webcast, we will be referring to presentation slides to supplement our remarks and these, along with our earnings release and other related materials are available on the Investor Relations section of the Dole plc website. Please note, our remarks today will include certain forward-looking statements within the provisions of the federal securities safe harbor laws.

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 or outcomes 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 includes a reconciliation to the most comparable GAAP measures. With that, I'm pleased to turn today's call over to Rory.

Thank you, James, and welcome, everybody, and thank you for joining us today as we look back over 2025, discuss our latest quarterly results and provide our initial outlook for the coming financial year. So turning firstly to Slide 4 for a recap of our key developments for 2025.

We are very, very pleased to deliver strong operating results for the year with adjusted EBITDA of $395 million, coming in ahead of our latest guidance. Our two diversified Fresh Produce segments delivered excellent results and excellent growth, offsetting the anticipated short-term decline in Fresh Fruit due to higher sourcing costs. During 2025, we also achieved several important strategic milestones. A key strategic priority for us was to exit the Fresh Vegetables business, and we're very pleased to successfully complete the sale of this division in August 2025 for gross consideration of $140 million. This sale has allowed us to fully focus on our core operating divisions and has created greater flexibility in our capital allocation strategy.

Continuing with our strategic focus on optimizing our asset base and operations, we announced, just before the year-end, an agreement to sell our port and port operations company in Guayaquil, Ecuador. We expect to receive net proceeds of approximately $75 million once this transaction closes.

Earlier in the year, we also successfully completed a $1.2 billion renewal of our credit facilities, which strengthened our financial capacity and enhanced our flexibility to support future growth initiatives. In November, we announced that our Board had approved a $100 million share repurchase program as part of the development of our capital allocation strategy. This will be used opportunistically. And to date, we have spent $4.5 million repurchasing shares.

Another important milestone for the group was the exit of Castle & Cooke as a shareholder in September by way of a registered offering. This removes the overhang of a potential share sale and provided significant additional liquidity to our daily trading volumes. Following on from this theme, we have now transitioned to full U.S. domestic issuer filings. Over time, we believe this important transition will improve our eligibility for inclusion in a broader range of U.S. equity indices.

Finally, in October, we had a key operational development with the successful launch of Colada Royale, our game-changing new variety of pineapple and the culmination of 15 years of dedicated R&D at our research facilities in Honduras. This conventionally bred variety is a sweeter taste than a typical pineapple with the added distinction of coconut flavors. It has been extremely well received by both our customers and consumers and has already won multiple awards, including being voted best new product within the fresh fruit category in a recent survey by Newsweek. As volumes continue to come online, we believe this will be an important product within our portfolio.

Turning now to the operational review and starting with the Fresh Fruit side on Slide 6. So in Q4, the industry continued to face elevated sourcing costs for bananas, pineapples and plantains, resulting in lower profitability for this segment compared to the prior year. For the full year 2025, we delivered EBITDA of $189 million, a resilient result given the sourcing and market backdrop and indeed, the weather-related disruption, not least the knock-on effects of tropical storm Sara's impact on our Honduran production and supply. Thankfully, the rehabilitation of our Honduran farms is well underway and on track for full recovery later this year. We expect produce volumes and competitiveness to improve over the course of 2026 with the benefit of targeted investments in production and supply chain cost initiatives.

Importantly, banana demand remains robust in both North America and Europe and pineapple innovation, including the well-received Dole Colada Royale is supporting this category. Overall, while 2026 has started with the continuing unfavorable supply dynamic, we do expect the positive demand tailwinds together with our investments and cost programs to drive an improvement in profitability as 2026 progresses.

Moving on to the Diversified EMEA segment. This segment had a stable final quarter, ultimately delivering an excellent full-year adjusted EBITDA result of $150 million, an increase of 14% year-on-year. Over the course of the year, we saw particularly strong contributions from key markets. For example, in Spain, our operations continue to benefit from product diversification and market expansion, underpinned by our very strong position in Canary Island bananas.

In the Nordics, the benefits of our investments in our distribution and logistics capability continue to drive growth. And in the Netherlands, we saw a good recovery in 2025 after some challenges in the prior year. Looking ahead, we expect our strong performance to continue in 2026, supported by further development investments across the segment.

And lastly, turning to our Diversified Americas segment. This segment delivered another strong quarter to close the year consolidating a very, very positive year of growth. Fourth quarter adjusted EBITDA increased by 32%. For the full year, this amounted to a 21% increase, driven by strong revenue growth, margin expansion and increased EBITDA contributions from our joint venture businesses within the segment.

We benefited from excellent product-led growth in North America in 2025 and products such as Kiwis and citrus in particular. Our export teams have demonstrated excellent operational performance, particularly through efficient management of the evolving cherry marketplace during early 2025 and once more at the start of this latest cherry season. Looking ahead, we anticipate the delivery of a good result for this important export season overall.

Looking out further into the year, we expect to deliver underlying growth in 2026, complemented by enhanced efficiencies from the Dole Diversified North America and Oppy integration. We also expect growth in our joint venture businesses within this segment. With that, I'll hand you over to Jacinta to give the financial review for the fourth quarter and full year.

Thank you, Rory, and thank you all for joining our webcast. Firstly, turning to the financial highlights on Slide 10. Overall, our key performance metric, adjusted EBITDA came in at $72.7 million, which is ahead of our own expectations for the quarter. Compared with Q4 2024, revenue was $2.4 billion and was 9.2% higher on a reported basis and 5.7% higher on a like-for-like basis due to positive operational performance across all our segments.

This growth followed the trend seen over the course of 2025 with full year revenue increasing 8.2% to $9.2 billion. In the fourth quarter, net income increased to $6 million from a loss of $31.6 million in the prior year. The prior year was impacted by a loss of $61.2 million in the discontinued Fresh Vegetables division.

On a full-year basis, net income decreased to $82 million from $143 million, reflecting a number of nonoperational and noncash items. Net income was lower due to a larger loss from discontinued operations as well as non-cash fair value losses on financial instruments, a non-cash discrete tax charge and impairment charges on certain assets excluded from the Fresh Vegetables sale. 2024 also had the benefit of the gain on the sale of progressive produce.

Looking now at the non-GAAP performance measures. Fourth quarter adjusted EBITDA was modestly lower by $1.9 million compared to the prior year. The reduction was primarily driven by higher fruit costs in Fresh Fruit. This decrease was partially offset by an excellent performance in our Diversified Fresh Produce Americas and Rest of World segment, and a favorable impact from foreign currency translation.

For the full year, adjusted EBITDA came in at $395 million, which was ahead of our latest guidance and 1% ahead of 2024. Adjusted net income decreased $1.5 million in the fourth quarter, predominantly due to the decrease in adjusted EBITDA as well as higher depreciation expense, partially offset by lower interest expense. For the full year, adjusted net income decreased $5.9 million to $115 million and full-year adjusted diluted EPS was $1.20 versus $1.27 in 2024.

Turning now to the divisional updates and starting with Fresh Fruit on Slide 12. Revenue increased 6.7% due to higher volumes of bananas sold as well as higher pricing of bananas, pineapples and plantains, partially offset by lower volumes of pineapples and plantains sold. The decrease in adjusted EBITDA in the quarter was due to higher sourcing costs of bananas, pineapples and plantains, partially offset by higher commercial cargo profits.

Now looking at Diversified Fresh Produce, EMEA. Reported revenue increased 12.7%, primarily due to a favorable impact from FX as well as strong underlying performance in our operations in Spain, France and South Africa. On a like-for-like basis, revenue increased 4.5% or $41 million. Adjusted EBITDA was in line with Q4 2024 with increased earnings in Scandinavia, Ireland and Spain as well as a favorable impact from FX translation, partially offset by lower underlying earnings in the U.K. and the Netherlands.

On a like-for-like basis, adjusted EBITDA decreased by $3.5 million in the quarter. Finally, Diversified Americas had another very strong quarter. Revenue increased 5%, driven by growth in most commodities sold in the North American market, along with growth in Southern Hemisphere export products, primarily driven by higher cherry volumes and higher blueberry pricing. Adjusted EBITDA increased $3.2 million, driven by improved profitability in our joint venture businesses as well as by earnings growth in our Southern Hemisphere export business, driven particularly by the higher cherry volumes. On a like-for-like basis, adjusted EBITDA increased to $4.1 million.

Now turning to Slide 15. We remain focused on capital allocation and managing our leverage and are pleased that we were able to close out the year at a comfortable level coming in at 1.5x, a reduction from 1.6x in the prior year. Interest expense has continued to decrease due to lower debt levels as well as lower base rates and came in at $66.5 million for the full year, in line with our latest guidance. Under the assumption that base rates will remain broadly stable in 2026, we expect full year interest for 2026 to be approximately $60 million. Net cash provided by operation activities was $123 million in 2025.

As anticipated, we saw a positive inflow in working capital in the fourth quarter, albeit curtailed this year with the strong volume and revenue growth being seen across the business. In addition, Q4 2024 benefits from accentuated seasonal inflows, which were not repeated to the same extent this year. Cash capital expenditure was $28.4 million for the quarter, and we added a further $0.7 million of assets by way of finance leases. For the full year, routine CapEx was in line with our latest guidance of $85 million. Cash capital expenditure was $121.5 million, including the buyout of two vessel finance leases for $36 million that was already reflected in our net debt at the end of 2024.

In addition, we added a further $16 million of assets by way of finance lease. Also included within the overall CapEx number was $16 million of expenditure related to the Honduran farm rehabilitations, which was covered by insurance proceeds. For 2026, we are forecasting routine CapEx of approximately $100 million, which is broadly in line with our annual depreciation charge. Free cash flow from continuing operations was $1.7 million for the full year. Excluding the buyout of the vessel finance leases, the Honduran farm rehabilitation supported by insurance proceeds, tax on the sale of assets and the final repatriation tax payment in April, this rises to $81 million.

Looking ahead to 2026, we expect to see normalized cash generation driven by the benefit of the disposal of the fresh vegetable business as well as by lower working capital investments and lower tax payments. Finally, we are pleased to declare an $0.085 dividend for the fourth quarter and following on from the authorization of a $100 million share repurchase program in November, we purchased 300,000 shares at an average price of $15.15 post year-end and for a total consideration of $4.5 million. Now I'll hand you back to Rory, who will discuss our outlook for 2026.

Thank you, Jacinta. Well, we're very pleased with our operating results for 2025, delivering adjusted EBITDA of $395 million, which, as I said earlier, came in ahead of our expectations. The result is a testament to the experience and skill, dedication of our management teams and people right across the group as we navigated a year of macroeconomic uncertainty and many other industry-specific factors. We've made important strategic steps forward during 2025, particularly completing the sale of the Fresh Vegetables business. And today, our business is well placed with strong operational momentum across the group.

With this platform, we are targeting growth for the coming financial year. And at this very early stage of the year, we are targeting adjusted EBITDA of at least $400 million. Our presentation sets out our key strategic priorities for 2026. And these are, firstly, executing on our development pipeline while maintaining a disciplined approach to capital allocation, continuing our focus on cost control and delivering operating efficiencies across the group, positioning ourselves to work efficiently in this dynamic macroeconomic and regulatory landscape and as ever, strengthening our position in our core business areas and categories.

I want to conclude by once again thanking all our outstanding people across the group for their ongoing commitment and dedication to driving our business forward, particularly in the light of the complexities faced by our industry this year. As always, we really appreciate all our essential partners, suppliers, customers and all other stakeholders for the continued support. 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.

[Operator Instructions]

Your first question comes from the line of Christopher Barnes with Deutsche Bank.

Rory, could you just elaborate on some of the major puts and takes embedded in your 2026 outlook? Demand trends appear robust, but fruit sourcing costs continue to be a challenge, especially with the dollar weakness and supply pressures last year. So I think it'd just be a little helpful to hear a little more about the cost programs you alluded to, whether you see opportunity to take incremental pricing to combat some of this inflationary pressure? And then just some further detail around how you see industry supply and demand shaping up over the course of the year.

Thank you, Christopher. Yes, I suppose guidance has become increasingly difficult to get the crystal ball ahead and predict what's going to happen in the next month, let alone in the next year. So I think what we tend to do is we look back over the last few years. And I think the base year we're working from in 2024, we had an absolutely exceptional performance, particularly in Fresh Fruit. And that when we have a profitable year, we try to take it. But unfortunately, it sometimes sets a high benchmark to try and maintain or grow from. I think, thankfully, we look back at 2025, we managed to achieve that. The sum of the parts for the three operating divisions did exceed a very, very strong 2024 number. So it's very early in the year to guide.

Certainly, the supply dynamics that we referred to in the script remain. There is a complex supply dynamic. We're hoping our own Honduran production will come back on over the course of this year and gradually get into full production for next year. We are back up and running, but not fully. There are other dynamics like Chiquita's exit out of Panama and re-entry, that will take some time to come in. And all of that has put some and weather issues in Central America, in particular, and indeed in Colombia have put a lot of pressure on the exit price out of Colombia and driven up sourcing costs. So they are continuing a little bit. We have been going through negotiations. We can't get into specifics on price, but we're having constructive and sensible dialogue with all of our customers to reflect all of those underlying dynamics.

So we put all of that into the mix. I think we also had an exceptionally strong performance in our Americas Rest of the World business. And again, it's a bit like '24 in our Fresh Fruit business. We take it when it's there and we take advantage of the market. Dynamics are good and the supply-demand is good, we take it, but it doesn't necessarily set the benchmarks on which, I mean the level of growth we achieved was substantial in '25 on the Diversified Americas Division. So very early in the year, we think there will be a little bit of a shift in the weighting of the profit streams over the course of the quarters with it being a little bit more heavily weighted towards the back half of the year as well. So early in the year, some factors out there putting a little bit of pressure on us, lots of positives as well. So we've set the target and the benchmark at a minimum of $400 million for the year, Christopher.

Got it. That's helpful context. And then just one follow-up for Jacinta on cash flow. You mentioned normalized cash generation, but how should we think about just the level of conversion relative to the at least $400 million of EBITDA? Do you think you can get back to historical 50% plus conversion? Or is that more realistic for 2027 and beyond?

Yes. Thanks, Chris. So look, as I explained earlier on the call, there were some nonrecurring and seasonal items, which impacted free cash flow in 2025, and we expect something more normalized in 2026. Generally, we've said free cash flow conversion of between 30% and 35% over the longer term. We have outperformed that, Chris, you're quite right, over the last few years. But yes, I mean, we're targeting more normalized levels, maybe not as strong as we saw last year with a particularly strong inflow at the end of last year. So that makes the comparison a little bit more challenging. But 30% to 35% is the number we generally recommend people to consider for the longer term.

Your next question comes from the line of Pooran Sharma with Stephens. Your line is now open. Please go ahead.

Good morning, appreciate the question. Congrats on the results. Just wanted to maybe start off on guidance and dive in a little bit deeper. I was wondering maybe if you could run through the set of factors that maybe get you to an EBITDA range that's -- you're targeting at least $400 million. So I was just wondering kind of what gets you to a higher end? I know you're not saying something explicit, but just the set of factors or circumstances that gets you to the higher end of your plan and maybe what keeps you here at more at $400 million.

Yes. I mean I think I've tried to, in answering Christopher's question, give you the overall backdrop to how we determined the very early guidance. We have a number of important seasons in the Diversified Americas division, such as the cherry season. Pricing has been a little bit weaker, but I think with our volume flow, we've probably done okay. So that's a key season as we get to the end of the year.

The supply and demand around some of the other products from grapes to deciduous have all been very, very positive in '25. We'll have to see how that emerges over the course of this year with a number of key projects underway where we integrated our marketing activities in North America with the previously named Dole Direct North America integration with our Oppy subsidiary in North America. And there's a bit of work to do to maximize the efficiencies of that, we're hopeful that can, over the medium term, develop in a very consolidated and positive way.

Our European business, we've had some weather issues right around the world in Europe, particularly Southern Europe and indeed in Northern Europe as well. We've had lots of rains. So that's affected some of the production areas in Southern Europe. It's probably impacted demand and things like food service with people not eating out as often as previously with some extremely bad weather. You're seeing in North America, some weather conditions. We'd hope that those kind of weather impacts, while they might have some impact in the first quarter, they tend to balance out over the course of the year.

Then on the banana business, it's a little bit early. We are seeing -- it's going to take a little bit of time for the supply and demand equation, particularly the production side to get into balance again. Our own Honduran production will come fully on stream over the course of the year and some price modifications will filter in over the course of the year. We don't have any issues around disruptions to shipping schedules. So there's lots and lots of moving parts in the middle of it all. And we put all that in the mix, and we think it's a reasonable target to start the year out at the $400 million mark.

Okay. No, I appreciate that color there. My follow-up is maybe just around the Ecuador port asset sale. Wondering if you were to monetize this today, how does this improve your cost structure? Is it a meaningful improvement? And then how do you think about your capital allocation priorities?

Yes. I mean Ecuador port, it's an asset that has been within the Dole Food company for quite a long number of years, probably developed during a phase where it was needed to be developed to improve our export position out of Ecuador. The whole port world has moved on, and it's probably better suited to a specialized international port operator, and we have found such an operator in TiL, a leading company, professional, serious, dedicated, and we believe that they can run the port and take advantage of the port in a better way from a commercial point of view than we could do on our own. We think it will be fairly neutral from a cost point of view. In terms of operations, we have entered into a usage agreement that will leave us pretty much line ball in terms of cost and will be based on market cost structures.

I think the capital allocation question there, obviously, that's -- it's a very -- it's a dynamic process for us. We've got an established level of dividend. We've put in place the buyback program, which we have always said will be used opportunistically. We utilized it to a small degree so far. We have a range of other investments, particularly our Scandinavian business, we're exploring how we significantly upgrade our facilities to enhance the automation of our processes for our supply and delivery to our main retail customer in Scandinavia. We think that can be a very good model to even give us a strategic advantage and develop over the long term.

We have a number of production JVs out there that, again, the returns are at least comparable with buybacks, and we can find investments that at least beat the buyback alternative. Our preference is to grow the company rather than to shrink it. I think major acquisitions, we keep our eyes on what's going on around the world. Certainly, we'd like to see a slightly better stock rating. We do see a continuation of the gap between the public and private markets, although perhaps less transactions are actually being consummated within the private sector, even though there's a lot of talk about valuations rather than actually crystallization of those valuations.

So hopefully, our share price can improve a little bit and that gap can narrow as a result of that. But probably in the short term, our focus will be more around smaller logical bolt-on acquisitions around the group. So it's a constant process, a dynamic process that we constantly evolve and examine and all the different elements that I've described form part of that analysis.

Your next question comes from the line of Peter Galbo with Bank of America.

Just one from me. Thanks for the color on the guide and for the changeover to Qs and Ks, I think that's very much appreciated. Rory, Jacinta, maybe you can just outline for us the path to index inclusion from here? Just what are the kind of key milestones we should be thinking about from a time line perspective as you all contemplate the index inclusion piece, given some of the changes you made from a financial reporting standpoint?

Do you want to take that, Jacinta or indeed, James?

So I suppose it's probably important to say that most of our financial statements and our disclosures were already in domestic issuer format, and it was always part of our plan to move to filing on domestic forms. So we're very pleased to get there. Yes, I mean, I suppose, as you know, getting into indices can take some time, but we're positive that we can seek inclusion into some of the smaller S&P indices and some of the MSCI indices. So it's an important part of our focus now for the next period.

Okay. And just anything around like what the key milestones might be just as you all have started to have that conversation potentially?

Yes. I mean I suppose I think in terms of our information, we're there and we qualify for inclusion. So we'll just be working with the indices and seeking to get in there. We believe we should be in a position to join the S&P 600. So we'll just work towards that initially.

And we are already in the Russell Index.

Sorry. Thank you, Rory. Yes, already in the Russell. Yeah.

There are no further questions at this time. I want to now turn the call back to Rory Byrne, CEO, for closing remarks.

Thank you very much. Well, I think we can look back at 2025 with a great degree of satisfaction at the operating level. We certainly had some strong operating performance, great contributions from all three of our divisions. We've made significant strategic progress in 2025. We believe we're well positioned to continue to grow in 2026. So thank you all for joining us today, and we look forward to the year progressing positively.

This concludes today's call. Thank you for attending. You may now disconnect.

Welcome to Dole Plc's Third Quarter 2025 Results Webcast. Today's conference is being broadcast live over the Internet and is also being recorded for playback purposes. [Operator Instructions]

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 taking the time to join our third quarter 2025 results webcast. Joining me today is our Chief Executive Officer, Rory Byrne, our Chief Operating Officer, Johan Linden; and our Chief Financial Officer, Jacinta Devine.

During this webcast, we will be referring to presentation slides and 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. Please note, our remarks today will include certain forward-looking statements within the provisions of the federal securities safe harbor 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 or outcomes 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 includes a reconciliation to the most comparable GAAP measures.

With that, I am pleased to turn today's call over to Rory.

Thank you, James, and welcome, everybody. Thank you all for joining us today as we discuss our results for the third quarter of 2025 and provide an update on our latest developments.

So turning firstly to the highlights on Slide 4. We are very pleased to report another good result for the third quarter, in line with market expectations. Our two diversified fresh produce segments have delivered excellent results, offsetting the anticipated short-term headwinds in our Fresh Foods segment and demonstrated the strength of our diversified and resilient business model. As discussed on our last earnings call, we completed the sale of our noncore Fresh Vegetable division in early August. This was a key strategic priority for us, and it created greater flexibility in our capital allocation strategy.

As part of the evolution of this capital allocation strategy, today, we also announced our Board of Directors approval of a $100 million share repurchase program, which will be used opportunistically. We continue to see attractive opportunities to deploy capital, supporting our strategic growth and adding the buyback program provides flexibility to repurchase shares and the share price represents an attractive opportunity to enhance shareholder value.

Turning now to the operational review and starting with Fresh Fruit on Slide 6. I Firstly, I'm very pleased to update you all on an exciting new milestone for the Fresh Fruit business, the launch of our new Dole Colada Royale pineapple. Bringing this product to the market is the culmination of 15 years of dedication to research and development at our own research facilities and farms in Honduras. The Colada Royale is our first new pineapple variety in many years, developed through conventional non-GMO breeding to deliver a distinctive and new flavor and appearance for the tropical category.

While volumes remain low for now, the Colada Royale is already selling at a material premium, delivering high margins on a per box basis, while also stimulating excitement for the category. The launch also provides us with a competitive edge for a wider tropical portfolio, and we continue to invest in complementary products, including plantains, limes and mangos. Importantly, the launch also reinforces our commitment to community and purpose, with a portion of every box sold supporting the creation of a new community center with farm workers and families in our Honduran pineapple region, delivering health care, training and language services.

So looking now more closely at the performance in quarter 3. As anticipated, result was lower than the prior year, driven primarily by higher sourcing costs, particularly for bananas. As we have noted over the course of the year, our own sourcing costs in 2025 were always anticipated to be higher due to the impact of the tropical storm Sara had on our important Honduras sourcing region late last year. However, as 2025 has progressed, we have been impacted by growing conditions for the industry in Latin America as it reduced yields and higher spot prices have increased procurement costs.

Looking out to 2026, we are progressing well with the rehabilitation of our impacted farms in Honduras as well as actively making additional investments to enhance our supply across our portfolio. Positively, demand for bananas continues to be robust in both our key North American and European markets. And while this heightened demand is contributing to the tight supply and cost pressures we saw in Q3, there's also clearly a really good sign for the health of the category overall.

Moving on then to diversified EMEA on Slide 7. The positive momentum seen in the first half of the year continued in the third quarter, with the segment delivering significant adjusted EBITDA growth on both the reported and like-for-like basis. We continue to see strong underlying growth in markets that have performed well all year, such as Spain, and we had a good growth in our Dutch business. In the Nordics, the benefits of the increased investments in our distribution and logistics capabilities have driven both revenue growth and some margin expansion.

Looking ahead, while we do not anticipate the same rate of growth seen in Q3 to continue in Q4, it is clear that diversified EMEA segment overall is performing in a healthy way, benefiting from the ever-advancing integration of our operations.

Turning now to our Diversified Americas segment on Slide 8. While the third quarter is typically the least active quarter in Diversified Americas due to the timing of key Southern Hemisphere export seasons, this segment delivered a very positive result with a strong performance, both on the export side and continued good performance in our North American market.

As part of the continued streamlining of our operations, at the beginning of the fourth quarter, we announced the integration of Dole Diversified North America into Oppy, our largest diversified fruit distribution sales operation in the North American market. Looking forward, we believe our businesses in this segment are well placed to deliver a good end to the year.

And with that, I'll hand over to Jacinta to give the financial review for the third quarter.

Thank you, Rory, and thank you all for joining our webcast. Turning firstly to the financial highlights on Slide 10. Overall, the results for the third quarter was ahead of our own expectations. Revenue of $2.3 billion was 10.5% higher on a reported basis and 8% higher on a like-for-like basis, reflecting the continued good underlying growth across each of our segments. Net income was lower due to a loss of $10 million in discontinued operations, driven by a loss on disposal of the Fresh Vegetable business.

There was also an associated noncash fair value charge of $8 million on fixed assets excluded from the sale. These decreases were partially offset by $10 million insurance proceeds recognized in the period, increases related to fair value adjustments of financial instruments and higher earnings in equity method investments.

Now looking at the non-GAAP performance measures. Adjusted EBITDA decreased $1.3 million. The decrease was primarily due to decreases in fresh fruit, partially offset by strong performances in both diversified segments. Adjusted net income decreased $3 million predominantly due to the decrease in adjusted EBITDA as well as higher depreciation expense, partially offset by lower tax expense. Adjusted diluted EPS was $0.16 compared to $0.19 in the prior year.

Turning now to the divisional updates, starting with Fresh Fruit on Slide 12. Revenue increased 11% primarily due to higher volumes and pricing of bananas, pineapple and plantains on a worldwide basis. As anticipated, higher sourcing costs for bananas were the major driver in the decrease in adjusted EBITDA in this quarter. In the quarter, we also experienced higher food sourcing costs in pineapples and plantains as well as lower profits in commercial cargo.

Now turning to Diversified EMEA, who delivered another excellent result in the third quarter, continuing the strong performance seen over the course of this year. Reported revenue increased 11%, primarily due to strong underlying performance in Scandinavia, Spain and the Netherlands as well as a $57 million favorable impact from FX, partially offset by a net negative impact from M&A of $9 million.

Excluding these impacts, on a like-for-like basis, revenue increased 6% or $50 million. Adjusted EBITDA increased $10 million or 34% driven by higher earnings in Scandinavia, Spain, the Netherlands and South Africa as well as a favorable impact from FX translation. On a like-for-like basis, adjusted EBITDA increased 24% or $7 million.

Diversified Americas also had a very strong third quarter. Revenue increased 8% or $30 million. Driving this increase was revenue growth in most commodities sold in the North American market, but particularly in kiwis and berries. Adjusted EBITDA increased $4 million or 46%, driven by a strong performance in the Southern Hemisphere export business, primarily due to positive final liquidations of the prior export season as well as continued good performance in the North American market.

And now turning to cash flow and capital allocation. Cash capital expenditure was $20.9 million in the quarter and an additional $0.7 million of assets were acquired under finance leases. The combined total included expenditure on Honduras farms rehabilitation project which was covered by insurance proceeds, along with logistics and warehouse investments in EMEA and ongoing reinvestments in other farming and transportation infrastructure.

As we get close to year-end, we are reducing our full year expectation for routine capital expenditure to approximately $85 million, with the reduction mainly due to the timing of the execution of certain projects. This routine capital expenditure excludes the rehabilitation costs of our farms in Honduras, which we estimate to be approximately $25 million, which will be covered by insurance proceeds.

In line with our typical seasonal working capital trend, we started to see the unwind of the material working capital build from the first half, albeit somewhat curtailed this year by the strong volume and revenue growth being seen across the business. The combination of these factors resulted in free cash flow from continuing operations of $66.5 million for the quarter. In keeping with previous years, we do expect that the unwind in working capital will significantly increase as we head towards the end of the year.

As discussed previously, we disposed of our Fresh Vegetable business at the beginning of August and this resulted in an inflow of $68 million and was an important contributor to the reduction in net debt to $664 million by quarter end. We are pleased to declare an $0.085 dividend for the third quarter, which will be paid on January 6 to shareholders of record on December 9.

Now I will hand you back to Rory, who will give an update on our full year outlook and provide further detail on our go-forward capital allocation strategy.

Thank you, Jacinta. Well, 2025 is proving to be a very dynamic year, and we're very pleased that our broadly based business model has delivered year-on-year adjusted EBITDA growth for the first 9 months. As we approach the latter part of the financial year, macroeconomic volatility continues, some industry-specific factors may influence our results, including the current supply and demand conditions for bananas. However, the momentum within the overall business gives us confidence that our full year adjusted EBITDA should be at the upper end of our targeted range of $380 million to $390 million.

In summary, our sector and indeed, our position within the sector gives us ample opportunity to grow and generate strong returns for shareholders. The announcement today of the $100 million buyback program provides another lever for driving long-term sustainable shareholder value. And our presentation slide include further detail on our overall capital allocation framework.

I want to conclude by once again thanking all our outstanding people right across the group for their ongoing commitment and dedication to driving Dole Plc forward. And in particular, this quarter, give special mention to our pineapple team, both on research and production side in Latin America, and also our sales and marketing teams in North America who have delivered on our long-term vision to bring a new and innovative product to the market with Dole's Colada Royale.

As always, we really appreciate all our essential partners, suppliers, customers and all our other stakeholders for their continued support. And with that, I'll hand you back to the operator to open the line for questions.

[Operator Instructions]

Your first question comes on the line of Christopher Barnes with Deutsche Bank.

I guess I'd just like to start on the implied outlook for the fourth quarter, and I appreciate that forecasting in this environment is an imperfect exercise to say the least. But could you just elaborate on the key drivers of the implied 10% decline at the upper end of the annual EBITDA guidance? It just seems that cost versus pricing mismatches in Fresh Fruit and mainly bananas are the biggest contributor, especially given the volume momentum you've enjoyed year-to-date. So I'd just love more color around the fourth quarter?

And then just thinking about 2026, like should we expect that these cost pressures continue into 2026? Or is the annual contracting progressing to your favor on pricing? Or is there some other offset, whether through your sourcing, easier compares from less tight industry supply? Like just love perspective on the fourth quarter and then into 2026.

Thanks, Chris, for the question. Obviously, as you say, guidance in this quite volatile macroeconomic environment becomes increasingly challenging. And I think another factor, and we've highlighted it previously, but perhaps not in the current quarter, you can't forget that we really had an excellent 2024. So it's at an incredibly high benchmark for us going into '25.

We highlight some of the specific headwinds that we had ourselves in Honduras. And yes, there has been some exacerbation of those with industry-wide problems. We've seen problems in Panama. We've seen problems in Costa Rica. And that has had quite a significant impact on the spot price and coming out of Ecuador, and that's impacted on our procurement costs when we've had to reorganize some of our procurement. So we definitely see some of those headwinds continuing into Q4, which is probably a factor in arriving at the guidance. But we're still comfortable that the overall guidance is a pretty good number as a benchmark against the '24 outcome.

And then looking out to '26, it's definitely a little bit early to start to give any more comprehensive guidance for '26, and we're working through the process of our budget process and indeed contract negotiations. But I think on an overall basis, and based on a long experience within the industry, what we've tended to find is that if supply conditions tend to -- if it continues for a sustained period of time, we do see that the market normally adjusts in all aspects to that supply/demand equation. So no particular reason to be unduly concerned about '26, but very early to give any predictions. So I hope, Chris, that gives you an overview of where we're at on guidance.

Yes. That was very helpful. And then just a quick follow-up on the topic of tariffs into the U.S. I know it's different each time we speak, but we have seen some evidence of select exclusions for certain agricultural products in the last couple of months. So with that in mind, is there anything new to share from your and the broader produce industry's efforts to secure exclusions for tropical produce that you can't grow commercially in the U.S.?

No, we have nothing new to share on that, Chris. I mean certainly the principal that products that cannot be commercially grown within the U.S. should be excluded from the tariff scenario is clearly established by the U.S. administration. I think it's just taking a little bit of time to convert that principle into practical reality. And obviously, there's a lot of moving parts, particularly at this moment in time around the whole tariff equation.

So I think over time, clearly, our industry is a good example of international trade. The U.S., I think, wants people will be able to have access to healthy products on a full year-round basis and particular tropical projects such as bananas and pineapple. So while it might take a little bit of time to change, we are confident that over a sensible period of time, there should be positive changes. But there's no specific news just at the moment to update you on that front.

Your next question comes from the line of Gary Martin with Davy.

Can you hear me now?

Got you now.

Perfect. I'll say again, congrats on a strong set of results. Just a few quick ones for me. I think maybe the most pressing one would be just around the capital allocation. Obviously, a big announcement there around the authorization of $100 million aggregate buyback. It would be good to get your kind of two-cents on your thinking behind the buyback program and how that plays into the rest of your capital allocation policy? And maybe just as an add-on, how you kind of think about leverage going forward?

Thanks, Gary. So I think we said for a long time that we had a big strategic overhang in terms of the potential future outcome on our discontinued operation, the Vegetable division, that we previously had. So we had said very clearly that we wanted to wait to get an outcome on that.

And we're very happy with the outcome of that. It did give us clarity around the focus on our three main operating divisions, and it did give us clarity in terms of being able to be more definitive around our capital allocation strategy. So we wanted to have, if you like, the tool and the toolkit in terms of having the buyback capacity available.

We certainly believe that there are plenty of opportunities, whether it's small or larger opportunities to grow within our individual divisions, and we're not going to ignore those opportunities in terms of whether it's capital development projects or small bolt-on acquisitions, in particular. Certainly, some of the bigger acquisitions and the valuation multiples are still probably a little bit too high, so we'll be patient on that front.

And I think in general terms, having a progressive dividend policy combined with the buyback program and combined with plenty of capital investment opportunities, I think we're now well positioned in terms of having set up our capital allocation strategy in a good and clear way for the investment community.

That makes sense. And maybe just to dive in a tiny bit deeper into just one component there. I just try to kind of join it with your current set of results. So I mean you've talked about investing to date. I think one area mentioned in your prepared remarks was investment in the Nordic region and diversified EMEA, and that seems to be paying dividends. Are there any other areas that you'd flag kind of in that particular ballpark?

And I suppose when I think about the Nordics and when I think about the number of strong quarters in a row for the diversified segments, how sticky is some of the kind of the upside to these investments into the long term?

We've plenty of investments underway. And obviously, if we undertake them, Gary, we try to make them as sticky as possible. So we've done a number of smaller, in the overall scheme of things, investments in some of our distribution capability even in terms of non-fresh fruit products, and they're coming through in a very, very positive way. We're constantly exploring the potential for even further automation of our very significant facilities and our interaction with some of our key customers in that region, and that is something that's an ongoing process.

You look around the different divisions then Fresh Fruit. We've highlighted things like plantains or limes where we have been expanding our presence and control our access to the product. We're probably doing a little bit more and looking at it a little bit more on the organic space to make sure that we have -- while the demand, particularly both in Europe and North America continues to be strong for certain customers on the organic space. And we want to make sure that we have the right mix between third-party and controlled production on that. And maybe a little bit of rebalancing in terms of the sourcing capabilities that we have across the different geographies in Latin America and South America on the Fresh Fruit side.

And the Diversified Americas business, we're expanding our handling capability and particularly products like cherries. We're broadening our core base in there and interacting with some key partner producers in that region as well. And then it's some of other smaller investments around the group, be it in Ireland upgrading our facilities, Spain enhancing our avocado ripening capability, France developing our banana riping capabilities in Sète in France. So lots of projects and lots of development opportunities. So I hope that covers the question you had, Gary?

Very thoroughly. I maybe just have one final one, trying to be more anorak. But maybe just one for Jacinta. Even just around the reduction in routine CapEx, you may have glossed over in your prepared remarks, but it would be good to dive into the kind of nature of the reduction in routine CapEx and whether you expect that to be kind of around the $85 million level on a go-forward basis?

Gary, yes, the reduction is just really timing. As we're now in almost the middle of November, we can see that our ability to complete some of the projects that we had targeted is, we're going to -- it'd be unlikely that we get there before the end of the year. So that's really why we've called it back. We would expect those projects to be completed in 2026.

I suppose, in terms of go forward, typically, we've always said that we'd like to run our normal routine CapEx in line with our depreciation, which is just over $100 million. So that's the sort of long-term number. Now obviously, there can be opportunities outside of that, that may be up this year. We had the vessels that we acquired at the start of the year. But in normal terms around in line with our depreciation, which is about $100 million.

Your next question comes from the line of Pooran Sharma with Stephens.

Can you hear me now?

Yes.

I appreciate the question here. Just wanted to maybe get a sense of how your negotiations with your customers have been going so far in annual contracting season? I know you said it was too early, but you mentioned in past years, if supply conditions -- tight supply conditions persist that the industry generally tends to adjust itself. So I was just wondering if you can maybe just give us a little bit more qualitative granularity in regards to how some of your negotiations with your customers have been faring so far this season?

Yes, it's a little bit of a delicate moment, and we're in the middle of the process, so we don't give too much information. Maybe Johan, you could give just a little bit of high-level color on that as well to add to deal with Pooran's question.

Yes. So I wish I was going to say exactly like what you said there, Rory, that it's too early, and we are right in the middle of it. But considering the supply situation, we believe it's well understood within the markets because it's been very well -- it's been impacting everyone with Panama being shut down that took out the sizable volume, Honduras having the weather last year took out a sizable volume and now Costa Rica also having weather.

So we believe the customers are aware of the situation, and we feel that the discussions that we're having and the negotiations that we're having with the retailers are always very tough, but we also believe that we are getting our story across. So we feel optimistic about the future.

Okay. Great. Appreciate the color there. And I was just maybe wondering if you could kind of talk more about some of the strength that you're seeing in the diversified fresh produce. And maybe just focusing on EMEA here, I know you gave some color with the last questions. You've made some solid investments. But in terms of like the underlying drivers, the consumer health and those areas, I was just wondering if you were able to share a little bit more color in regards to the performance you've seen thus far?

I think on an overall basis, you also have to recognize the strength of our business in the diversified segment. In EMEA, if you look across the European countries, we're the #1 player in Ireland, in the U.K., in Spain, Czech Republic, Sweden, Denmark, a strong presence in Germany, Netherlands, France, Italy. So we've got a really, really well-oiled machine in Europe, and we've got a really strong platform to build with our existing customer base across all the segments from retail to wholesale to food service.

And I think the combination, if you go back in time, even though we are now very much all just one Dole plc, but there was a process of integrating the strengths of the Dole Food Company and total projects. And I think we're seeing a lot of the benefits of that coming through in giving us a much more comprehensive package of offering to the major customers across the different markets. We've been working very hard to consolidate our activities, particularly in Holland and Northern Europe. We've been developing in France.

We have a hugely strong platform in Spain. Like this year, for example, we opened our avocado ripening facilities. We're dual branding a range of exotic products and getting a lot of positive traction with our customers. Scandinavia, we've always had a very, very strong position in the marketplace, and we're building on that with our core activities and adding in additional interesting aspects to it.

North America, then if you look at the fresh diversified business in North America, a strong platform with our Oppy business as a platform and the marketing function. But our other businesses whether it's Gambles in Toronto, our fresh connection export business as well, have been working hard.

And then as we said in the call, probably had some difficulties going back a few years with the pandemic period and the supply chain disruption was quite difficult on our South American businesses. We've grouped in a very positive way. And now we've got a strong platform to build on. We're looking at some expansion activity in Chile and Peru. And Argentina, it continues to be difficult, but we're performing well and focused on certain products.

So I think all in all, the streamlining of the Dole Direct North American business into Oppy is another step in the direction of making our businesses more efficient and making ourselves more attractive to our key customers. So I hope that gives you a high-level overview of it, Pooran.

And Rory, maybe just one thing to add there is that we see also very healthy consumer demand. It seems the consumer is focusing on affordability, they're focusing on health. They're going to the channels where we are representing our products. So we seem to be in a good spot right now.

Your next question comes from the line of Peter Galbo with Bank of America.

Can you hear me okay?

We got you.

Great. Thank you for the questions. Maybe just to go back to Chris Barnes' question around tariff and to ask it in a slightly different way. Just what was embedded in the guidance this year, the $380 million to $390 million in terms of overall tariff hit? And I ask it in the context of, if we do get relief or the Supreme Court tosses out IEEPA tariffs, whatever it's going to be, just what's kind of the flow-through of what was embedded in this year's guidance relative to what could be a potential tailwind for next year?

We didn't build in any particular positive or negative into the guidance for this year. We've been working our way through it very carefully with our customer and our supply base. And clearly, I think if for some reason, the tariffs got unwound, that would just be a pass-through in some way, so we wouldn't get any particular benefit and hopefully not suffer any particular negative.

So it's more I think the key point really, and Chris' question was more about the long-term issues that clearly our industry is not the specific targets of tariffs. And we hope over time that, that comes through and a realignment of the tariff approach.

Got it. Helpful. And then I know it was, again, a relatively short-term hiccup maybe here in the fourth quarter. But I wanted to ask about SNAP and just whether there was any real implications or issues you saw even in the first 10 days of this month particularly around fresh fruits and vegetables, I'd have to think some of those have some SNAP exposure. So just whatever you saw, and again, if we get resolution today, it could be a nice tailwind, but kind of what you saw in the very short term.

Johan, do you want to comment on that in terms of the government shutdown impacts as well?

Yes. So we have not seen any trends out of the shutdowns. We only have anecdotal stories coming back from the market. And what people are saying is that in the areas where there are a lot of government employees, they have seen a slight decrease of sales in the stores, and maybe that they have been moving a little bit more to affordable products. And there, we just want to remember that we are very affordable products with many of the products we have, especially the bananas.

And anecdotally, the people are also saying that maybe they see that some consumers in these areas are moving to more, what is perceived to be, inexpensive formats like discount stores. And again, we are represented across all channels. So for us, we feel that we are in a good position. But again, no real trends. It's only stories coming back from the market.

There are no further questions at this time. I will now turn the call back to Rory Byrne for closing remarks.

Thank you, Derek. So yes, we're very pleased that our broadly based business model has yet again performed well in the quarter. We've made some good operational and strategic progress over the course of '25. Having sold the Fresh Vegetable business, it did clear the path to give us much more clarity of focus and strategic focus on our 3 key operating divisions. And indeed, the financial flexibility to put in place the $100 million buyback program and add to our investor, shareholder value toolkit. So overall, we believe we're well positioned to continue to successfully progress over the next few years, and thank you very much for joining us today.

This concludes today's call. Thank you for attending. You may now disconnect.