Industry Overview

Food & Beverage Market

▪ US Packaged Food market size is US$ 0.7tn and it is expected to grow at a CAGR of 2.5% over next 5 years (2.0% price and 0.5% volume contribution)
▪ Organic Food and Plant based foods are the most attractive segments, and expected to grow at a CAGR of 16.0% and 14.3% respectively (2022-26)

Market Overview Worldwide Food Market (2021 A vs 2026 E in US$tn)

7.5% 6.6% 8.3% 8.3% 7.8% 7.9%
▪ As of 2022, the global F&B industry had a market value of US$ 6.4tn, and
this is expected to rise to US$ 8.9tn by 2026 at CAGR of 8.7% 2.23
2021A 2026E
▪ APAC is the largest market for F&B industry with size of US$ 2.5tn (2019) 2.02

and Europe is the largest manufacturer and exporter of F&B products CAGR
1.68
1.55
▪ The market's largest segment is Confectionery & Snacks segment, with a 1.47
1.38
market volume of US$1.56tn in 2022 1.13
▪ According to USDA, US Packaged Food market size is of US$ 0.7tn and it is 0.93
expected to grow at CAGR of 2.5% over next 5 years (2.0% price contribution 0.76
and 0.5% volume contribution) 0.52
0.38
▪ Supermarkets/hypermarkets account for 58.7% of F&B distribution channels 0.26
in 2021. However, E-commerce has witnessed significant growth post Covid
▪ Key Challenge – For companies, it is difficult to identify products that will Fruits & Confectionery & Meat Dairy Products Convenience Baby Food
meet the changing needs of customers Vegetables Snacks & Eggs Food

Future Food Market Attractiveness Map (2022-2026E) Organic Food Market Top 5 Fresh Produce(LTM Sales in US$bn)

Market Size ▪ Concerns about health and 8.8

sustainability have led to high
Small Medium Large growth of this market
Functional Food ▪ US, Germany and France are
Low the key markets
(CAGR 2.7%) 5.1
Medical Food US$106bn 4.4
Growth

Medium 3x
(CAGR 6.0%) 3.2

Hemp based Food 1.3

Cell based
(CAGR 22.0%) Organic Food US$39bn
High Food
Plant based Food (CAGR 16.0%)
(CAGR 128.5%)
(CAGR 14.3%) 2006 2019

Source: Research Report, Form F1 filing of Dole plc, Bloomberg Intelligence 2 J.P. MORGAN - THE DEAL
Acquiror – Target Rationale
Investment Rationale – LSB Corp and Dole plc

▪ Europe and Asia markets are jointly expected to grow at a CAGR of 5.7% in Vegetable, 6.0% in Fruit and 4.4% in Confectionery & Snack segments over the
next 4 years as compared to 2.9%, 2.7% and 1.8% in North America, respectively at around the same time

Portfolio Expansion and Exchange of Product Line Expertise Alignment in Geographic Expansion Plan of LSB & Dole

Merged entity will be a global leader in packaged food & beverages along with Region wise in 2020 Asia Europe America
▪ Total Produce’s B2B
the segment leader globally in fresh produce – vegetables & fruits 5.7% vs 2.9% 6.0% vs 2.7% 4.4% vs 1.8% network in Europe in
30 countries will help
LSB Corp.’s ▪ Access to leading product portfolio of Dole plc with 48% both entities – Dole plc
46%
packaged food the target planning to increase organic products 43%
and LSB Corp. to
expertise ▪ Access to Europe market through distribution channel expand in the
28%
What is
is common?
common? 23%
20%
24%
21% European market
19%
▪ Scope
Completeof completely
new productnew
line product
which willline which
be a willLBS
mix of have ▪ Total Produce’s TOP
mix
Corpofexpertise
LSB Corp’s expertise
& Dole’s & Dole’s
healthy healthy ingredients
ingredients brand has a significant
presence in China
Dole plc’s fresh ▪ LSB’s expertise in packaged food will help to solve which is fastest
produce & Vegetable Fruit Confectionery and
company’s problem of recall of salad multiple time in past Snack growing market in
logistics ▪ Heterogenous portfolio from current homogenous one various food categories
CAGR 2020-26 : Europe + Asia vs North America

Food Supply Chain is the Key Margin Improvement

▪ During Covid, the food supply chain were struggling in the grocery ▪ Food inflation, increasing operational cost and multiple recall of products
industry, and now supply chains are being hard-pressed on the food are the reasons for decline in margin. The key problem is perishability
service or food away from home side ▪ Solution: Innovation in frozen foods with existing capability of LSB in the
▪ Dole plc is unique in its capability to deliver the best of both worlds: the segment will help Dole plc to improve the margin – especially in vegetables
collective strength, resources and supply chain influence of a global leader
with the service and market focus of a local operator 806 779 2Q22 2Q21
Dole plc (US$ mn)
109k acres Relationship
10 self 16,800 RC 332
Owned Land with 309
sustained 740 DC
14k acres hundreds of 86
refrigerated 5,500 Chassis 58
Leased land local growers -6 -2
container & 4,800 generator
6 ships 250 facilities Sales EBITDA Sales EBITDA
Low – Cost Positioning Fresh Fruit Fresh Vegetables

Source: Company website, Statista Consumer Market Outlook 2021, Q2 2022 Analyst Call
RC stands for Refrigerated Container and DC stands for Dry Container
5 J.P. MORGAN - THE DEAL
 Intrinsic Valuation Method
DCF Model

▪ With WACC of 8.2% and terminal growth rate of 2%, the total enterprise value is estimated at US$2,988mn (Terminal Value accounts for 46% of it)
▪ The topline in base case is estimated with the fact that Dole plc is the market leader in the overall fresh produce market

US$ mn FY20A FY21A FY22E FY23E FY24E FY25E FY26E FY27E FY28E FY29E FY30E FY31E FY32E
Net Revenue 8,969 9,286 9,173 9,263 9,488 9,820 10,163 10,493 10,807 11,104 11,382 11,637 11,869
% growth 3.5% -1.2% 1.0% 2.4% 3.5% 3.5% 3.2% 3.0% 2.7% 2.5% 2.2% 2.0%
EBITDA 372 394 352 386 404 426 450 474 498 521 545 569 591
%margin 4.1% 4.2% 3.8% 4.2% 4.3% 4.3% 4.4% 4.5% 4.6% 4.7% 4.8% 4.9% 5.0%
%growth 5.9% -10.6% 9.8% 4.5% 5.6% 5.6% 5.3% 5.1% 4.8% 4.5% 4.3% 4.0%
Less: D&A 122 125 124 118 116 119 121 124 126 128 129 131 132
EBIT 250 269 228 268 288 307 328 350 372 394 416 438 460
%margin 2.8% 2.9% 2.5% 2.9% 3.0% 3.1% 3.2% 3.3% 3.4% 3.5% 3.7% 3.8% 3.9%
%growth 7.7% -15.2% 17.6% 7.2% 6.9% 6.8% 6.5% 6.2% 5.9% 5.6% 5.3% 5.0%

EBIT(1-Tax) 171 194 208 223 238 254 269 285 301 317 333
Add: D&A 124 118 116 119 121 124 126 128 129 131 132
Less: CapEx 157 139 148 159 171 184 197 211 225 239 253
Less: Δ NWC 9 9 9 10 10 10 11 11 11 12 12

FCFF 129 164 167 172 178 183 187 191 195 198 200
Terminal Value 3,244

Present Value 119 140 132 126 120 114 108 102 96 90 1,454
WACC Calculation Assumption Sensitivity Analysis
Rf RP Beta Ke ▪ The topline of FY22E, FY23E and FY24E is estimated based Implied Equity Share Price (US$)
Europe 2.8% 7.2% 0.74 8.1% on broker reports Terminal Growth Rate
NA 3.4% 6.0% 1.08 9.9% ▪ The terminal growth rate is estimated at 2%
Asia 3.8% 7.6% 0.86 10.3% ▪ EBITDA margin is inclusive of improvement in EBITDA 1.8% 2.0% 2.3%
Ke 9.3% margin of fresh vegetable segment and improvement in 7.2% 24.6 25.5 26.5
value added product segment 7.7% 21.9 22.6 23.4
Kd 5% ▪ Tax rate is assumed at 27.5% throughout the projections
▪ Rf, Rp and Beta are estimated through Damodaran Report WACC 8.2% 19.6 20.2 20.8
Tax 27.5%
▪ Target Debt to Equity is assumed to be 2:8, with the major 8.7% 17.6 18.1 18.6
Kd (Post Tax) 3.6%
chunk of debt will be repaid in FY26 and FY27
WACC 8.2% 9.2% 15.9 16.3 16.7
Note: Refer Excel Sheet with comments for sources and detailed assumption explanation;
NA – North America
8 J.P. MORGAN - THE DEAL
Relative Valuation Method
Transaction Comparable

▪ During 2021, 374 deals took place in US Food and Beverages market, where organic produce and plant-based foods were the most attractive segments
▪ EV/LTM EBITDA range is estimated based on the selected transactions in Fresh Produce segment where only production and selling is taking place
Considered for EV/LTM EBITDA range
Median 1.25x
2.4x 2.5x
2.3x 2.3x
2.0x
1.6x
EV/LTM Mean 1.34x
1.3x
Sales
0.9x 0.9x 0.8x
0.5x
0.1x 0.1x
1 2 3 4 5 6 7 8 9 10 11 12 13

18.9x
16.5x

Mean 10.81x
11.4x
EV/ LTM 10.0x 9.6x
EBITDA Median 10.04x 9.0x

0.3x
Coastal Sunbelt That's How We Roll LLC Smart FoodService Warehous e Stores Pioneer Food Group Reinhart FoodService Snoboy Bolthouse Farms Earthbound Farm Upfield Pret A Manger Kroger (Conv enience Store Bus iness) Refres o Nature Foods Company, LLC

Target
Acquiror
Date Feb-22 Dec-21 Apr-20 Mar-20 Dec-19 Sep-19 Jun-19 Apr-19 Jul-18 May-18 Apr-18 Mar-18 Aug-17
EV (US$ mn) 525 259 972 1,166 2,000 1,832 510 500 7,963 2,023 2,150 4,068 163
Segment Fresh Fresh Fresh Fresh Fresh Fresh Fresh Plant Fresh Supplier Fresh Organic
BFY
Produce Produce Produce Produce Produce Produce Produce based Produce of FP Produce Food
Country
Source: S&P Global Market Intelligence, Independent Secondary Research;
BFY – Better for you; FP- Fresh Produce
10 J.P. MORGAN - THE DEAL