Charoen Pokphand Foods Public Co. Ltd. · SET:CPF
Charoen Pokphand Foods Public — Charoen Pokphand Foods PCL — 9M 2019 Earnings Presentation
51 slides from Charoen Pokphand Foods Public's earnings presentation, Nov 14, 2019
Slide 1: Charoen Pokphand Foods 9M 2019 Results Briefing
Charoen Pokphand Foods PCL. 9M 2019 Results Briefing Investor Presentation November 14, 2019
Slide 2: Contents
9M2019 : Results Briefing Contents Page 1 Kitchen of the World Business Overview 02 9M19 Financial Results 08 Y2019 Outlook 16 Appendix A: 3Yr Historical Results B: Products & Raw Materials Price Trend C: Highlights 3Q19 Results D: Group of CPP's Associate Companies & Joint Ventures E: Product Sampl
Slide 3: Why Invest in CPF
9M2019 : Results Briefing Why Invest in CPF Page 2 “Aiming to compete in the front line of the food industry, we use resources properly and environmental friendly. The Company takes into account the interests of all stakeholders to ensure sustainable growth, while being able to generate appropriate
Slide 4: Company Facts
9M2019 : Results Briefing Company Facts Page 3 Vision :“Kitchen of the World” Portfolio • 4 listed investments onboard (HKSE:00043, HKSE:3839, TWSE: 1215, SET:CPALL) • 40 series of debentures listed on Thai Bond Market Association “TBMA” • 1 exchangeable Bond “EBs” on Highlights FY18 Sales : THB542
Slide 5: Vertically Integrated Business Model in Thailand
9M2019 : Results Briefing Vertically Integrated Business Model in Thailand Page 4 CPF operates integrated agro-industrial and food business including swine, broiler, layer, duck, shrimp and fish. The integrated food process involves advanced production technology, qualified international standard ch
Slide 6: CPF Geographical Footprints
9M2019 : Results Briefing CPF Geographical Footprints Page 5 • Operations and investment in 16 countries catered to > 4 billion population • Export to more than 30 countries across 5 continents Russia Canada Livestock feed Swine integrated business (Expected to be completed within Q4/19) Swine farmi
Slide 7: Our Strategy
9M2019 : Results Briefing Our Strategy Page 6 Strategy for Growth Execution Plan • Fully integrated business model • Create value -use innovation in order to add value to product, process, and • Globalization by establishing a proper business model. business model suitable for each strategic market
Slide 8: CPF Operational Structure (As of Sep 30, 2019)
9M2019 : Results Briefing CPF Operational Structure (As of Sep 30, 2019) Page 7 9M19 : Sales: THB 391,780 m Net Profit: THB 14,445 m 33% of Sales 67% of Sales CPF Thailand 1 CPF International Associates & Joint Ventures 27% of Sales 39% of sales 28% of sales CPP- HKSE:43 UK (99.99%) 4 SET: CP ALL (3
Slide 9: 9M19: Performance Summary
9M2019 : Results Briefing 9M19: Performance Summary Page 8 9M19 revenue decreased 2% y-o-y mainly due to adoption of TFRS15 and FX translation loss, without these accounting impact revenue grew 8% Onetime expense in Q2/19 regarding amendment of the Thailand’s Labour Protection Act of THB 1,812m EBIT
Slide 10: 9M19: Sales & Profit Margin by Business
9M2019 : Results Briefing 9M19: Sales & Profit Margin by Business Page 9 Revenue +8% In THB, m exclude impact of 429,998 TFRS15 & 9M18 FX translation 9M19 -2% 398,261 391,780 -3% 230,976 223,342 +0.3% 109,767 110,143 +7% -9% 36,376 39,003 21,142 19,292 Thai-Livestock Thai-Aqua Overseas-Livestock Ove
Slide 11: 9M19: Consolidated Sales Structure by Business
9M2019 : Results Briefing 9M19: Consolidated Sales Structure by Business Page 10 Sales Breakdown Livestock Aquaculture Total 9M18 9M19 %Change 9M18 9M19 %Change 9M18 9M19 %Change Thailand 109,767 110,143 0% 21,142 19,292 -9% 130,909 129,434 -1% Domestic 93,055 91,505 -2% 17,038 15,618 -8% 110,093 10
Slide 12: 9M19: Consolidated Sales by Products
9M2019 : Results Briefing 9M19: Consolidated Sales by Products Page 11 Sales Breakdown by Products Feed Farm Food Total 9M18 9M19 %Change 9M18 9M19 %Change 9M18 9M19 %Change 9M18 9M19 %Change Thailand 37,157 28,808 -22% 61,006 65,802 8% 32,746 34,825 6% 130,909 129,435 -1% Domestic 37,107 28,746 -23
Slide 13: 9M19: Consolidated Income Statement Highlight
9M2019 : Results Briefing 9M19: Consolidated Income Statement Highlight Page 12 Quarter 1 Quarter 2 Quarter 3 9 Months 2018 2019 % Chg. 2018 2019 % Chg. 2018 2019 % Chg. 2018 2019 % Chg. Net sales 120,516 125,286 4% 136,353 133,896 -2% 141,393 132,597 -6% 398,261 391,780 -2% Gross Profit Margin 9.4%
Slide 14: Financial Status (As of Sep 30, 2019)
9M2019 : Results Briefing Financial Status (As of Sep 30, 2019) Page 13 Interest Bearing Debt: THB 330,574 m Net Debt to Equity & Net Debt to EBITDA (THB, m) 330,574 330,293 Net D/E 312,728 288,710 1.4x 1.4x 1.4x 1.2x 2016 2017 2018 9M19 2016 2017 2018 9M19 Current Portion, 11% Net D/EBITDA S/T Loan
Slide 15: Investment and Financing Activities
9M2019 : Results Briefing 2019 Investment and Financing Activities Page 14 AHM Lifestyles Dak Galbi Hylife Creative Hot Korean Integrated Hospitality stir fry Pork business Restaurant in restaurant 50.10% Vietnam 41.35% THB 11,845 m 70.00% THB 55 m Homegrown THB 33.3 m Lotus Aquaculture Shrimp (USA)
Slide 16: CPF's Investment in Listed Companies
9M2019 : Results Briefing CPF’s Investment in Listed Companies Page 15 Stock Price Market Cap. CPF Holding % Holding Value (Local Curr.) (THB mm) (THB mm) (As of Sep 30, 2019) CPALL THB 81.25 729,877 33.67% 245,750 (SET:CPALL) CPP HKD 0.67 63,061 52.24% 32,943 (HKSE:0043) TRUE THB 5.25 175,183 2.21%
Slide 17: Y2019 Outlook
9M2019 : Results Briefing Y2019 Outlook Page 16 Growth Target Expected sales growth of approximately 5-8 % excluding TFRS15 and FX translation impact Key Drivers & Focus Recovery in domestic meat prices Swine shortage due to African swine fever (ASF) Higher revenue and profitability of overseas aqua
Slide 18: Appendix A: Highlights: 3Yr Historical Results
Appendix A: Highlights : 3Yr Historical Results
Slide 19: Gross Profit Margin & Operating Profit Margin
9M2019 : Results Briefing Gross Profit Margin & Operating Profit Margin Page 18 GPM GPM Thai-Livestock OPM ** Thai-Aqua OPM ** 20.0% 25.0% 14.1% 15.0% 12.2%13.1% 12.6% 20.0% 12.4% 10.7% 10.0% 7.9% 7.7% 6.8% 15.0% 13.6% 12.5% 5.1% 5.9% 10.7% 10.0% 10.8% 5.0% 3.5% 4.1% 2.7% 4.0% 8.2% 1.9% 1.7% 10.0% 7
Slide 20: Thailand Operations – Export Destination
9M2019 : Results Briefing Thailand Operations – Export Destination Page 19 Y2017 Y2018 9M19 Asia Asia Asia 64% 71% 68% EU EU EU Others USA 27% 22% 16% Others USA Others USA 3% 6% 4% 6% 4% 9% Asia EU USA Others Asia EU USA Others Asia EU USA Others Farm Farm Farm THB 8,531 million +15% THB 7,473 mill
Slide 21: Consolidated Income Statement Highlight
9M2019 : Results Briefing Consolidated Income Statement Highlight Page 20 Full Year 2016 2017 % Change 2018 % Change Net sales 464,465 501,507 8% 541,937 8% Gross Profit Margin (%) 15.6% 12.0% 12.1% EBITDA 48,464 32,420 -33% 39,559 22% EBIT 29,956 11,172 -63% 17,151 54% Share in Profit of Associates
Slide 22: CAPEX & EBITDA
9M2019 : Results Briefing CAPEX & EBITDA Page 21 CAPEX EBITDA Unit: THB, m Unit: THB, m EBITDA Margin% CPP CPF 60,000 20.0% 18.0% 22,175 30,475 27,135 16,765 50,000 48,464 16.0% 39,559 14.0% 40,000 9,438 32,420 33,046 12.0% 6,527 10.4% 30,000 10.0% 7,279 7.3% 8.4% 6.5% 8.0% 6,387 20,000 6.0% 21,037
Slide 23: Consolidated Net Profit, ROA and ROE
9M2019 : Results Briefing Consolidated Net Profit, ROA and ROE Page 22 Net Profit ROA & ROE Unit: THB, m ROA Gain on fair value adjustment on investment in associates Divestment and Dividend Equity (Share in Profit of Associates) EBIT 3.8% 3.0% 3.5% 3.3% CAGR +3% 2016 2017 2018 9M19* 2,200 ROA = Net
Slide 24: Consolidated Net Profit - Quarterly
9M2019 : Results Briefing Consolidated Net Profit - Quarterly Page 23 Unit : THB, m 1Q 2Q 3Q 4Q 5,894 6,062 5,184 4,914 4,912 4,016 4,064 4,279 4,105 3,764 3,955 3,048 2,326 1,739 1,677 2016 2017 2018 2019 Full Year: 14,445 14,703 15,259 15,531 Net Profit
Slide 25: EPS & Dividends per Share
9M2019 : Results Briefing EPS & Dividends per Share Page 24 Earnings Per Share Dividends Unit : THB Per Share Unit : THB Per Share Dividend Semi-annually, not less than 30% Policy of consolidated annual net profit 1.99 1.91 1.82 1.71 0.95 0.75 0.65 0.30 2016 2017 2018 9M19 2016 2017 2018 9M19
Slide 26: Appendix B: Products & Raw Materials Price Trend
Appendix B: Products & Raw Materials Price Trend Kitchen of The World
Slide 27: Average Farm Prices – Thailand
9M2019 : Results Briefing Average Farm Prices – Thailand Page 26 Thailand’s Broiler price (THB/kg) Average Price 46.0 Y17 Y18 Y19 Y2017 Y2018 Y2019 35.8 30.2 33.4 % Chg -16% +11% 41.0 39.3 36.6 36.8 36.0 34.4 34.0 33.2 32.3 32.5 30.4 31.0 29.8 29.6 29.0 26.0 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1
Slide 28: Average Farm Prices – Thailand
9M2019 : Results Briefing Average Farm Prices – Thailand Page 27 Thailand’s Fresh Egg price (THB/piece) Average Price 4.0 Y17 Y18 Y19 Y2017 Y2018 Y2019 2.3 2.3 2.5 % Chg +3% +9% 2.9 2.8 3.0 2.5 2.6 2.6 2.5 2.3 2.2 2.1 2.2 2.1 2.2 2.0 1.0 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 Current
Slide 29: Average Raw Material Prices – Thailand
9M2019 : Results Briefing Average Raw Material Prices – Thailand Page 28 Thailand’s Corn price (THB/kg) Average Price 15.0 Y17 Y18 Y19 10.6 9.8 9.8 9.7 9.2 8.2 9.8 9.3 8.4 8.4 9.1 9.0 9.0 10.0 8.0 8.1 % Chg +20% -6% 5.0 Y2017 Y2018 Y2019 0.0 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 Cur
Slide 30: Vietnam: Average Market Price and Major Feed Raw Materials
9M2019 : Results Briefing Vietnam: Average Market Price and Major Feed Raw Materials Page 29 40,000 30,254 30,376 28,487 27,632 30,000 26,368 26,777 26,299 25,671 24,538 24,793 Broiler 22,872 (VND/kg) 20,000 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 60,000 50,693 49,241 46,503 50,000 42
Slide 31: Turkey: Average Market Price and Major Feed Raw Materials
9M2019 : Results Briefing Turkey: Average Market Price and Major Feed Raw Materials Page 30 6.00 4.77 4.59 4.67 4.67 4.20 3.36 3.67 4.00 3.06 3.31 3.17 3.20 Broiler 2.00 (TRY/kg) 0.00 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 1.50 1.23 1.22 1.06 1.08 1.13 0.87 0.86 0.94 1.00 0.78 0.85 0
Slide 32: India: Average Market Price and Major Feed Raw Materials
9M2019 : Results Briefing India: Average Market Price and Major Feed Raw Materials Page 31 150.0 91.6 100.0 80.0 81.4 75.8 65.9 70.8 67.0 61.7 68.1 69.8 64.2 50.0 Broiler (INR/kg) 0.0 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 500.0 363 400.0 310 333 288 303 302 287 283 275 257 300.0 224
Slide 33: Russia: Average Market Price and Major Feed Raw Materials
9M2019 : Results Briefing Russia: Average Market Price and Major Feed Raw Materials Page 32 120.0 110.0 100.2 99.1 101.1 94.2 96.9 96.5 94.5 100.0 90.1 86.1 81.8 Swine 80.0 (RUB/kg) 60.0 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 120.0 110.4 98.8 101.9 95.7 100.0 91.1 84.8 83.2 79.7 80.1
Slide 34: Appendix C: Highlights: 3Q19 results
Appendix C: Highlights: 3Q19 results
Slide 35: 3Q19 Results Highlights
9M2019 : Results Briefing 3Q19 Results Highlights Page 34 Consolidated Revenue Gross Profit Net Profit (THB millions) (THB millions) (THB millions) -6%Y-o-Y -9%Y-o-Y +23%Y-o-Y 141,393 132,597 19,610 17,973 6,062 4,912 3Q18 3Q19 3Q18 3Q19 3Q18 3Q19 Consolidated sales 2% Y-o-Y Gross profit margin Net
Slide 36: 3Q19: Sales & Gross Profit Margin by Business
9M2019 : Results Briefing 3Q19: Sales & Gross Profit Margin by Business Page 35 In THB, m -6% 3Q18 141,393 3Q19 132,597 -8% 81,200 74,569 -4% 38,313 36,920 +1% -11% 14,273 14,368 7,607 6,740 Thai-Livestock Thai-Aqua Overseas-Livestock Overseas-Aqua TOTAL GPM 7.7% 14.1% 10.0% 10.8% 16.7% 12.6% 16.3%
Slide 37: 3Q19: Consolidated Sales Structure by Business
9M2019 : Results Briefing 3Q19: Consolidated Sales Structure by Business Page 36 Sales Breakdown Livestock Aquaculture Total 3Q18 3Q19 %Change 3Q18 3Q19 %Change 3Q18 3Q19 %Change Thailand 38,313 36,920 -4% 7,607 6,740 -11% 45,920 43,660 -5% Domestic 32,440 30,391 -6% 5,750 5,422 -6% 38,190 35,813 -6
Slide 38: 3Q19: Consolidated Sales by Products
9M2019 : Results Briefing 3Q19: Consolidated Sales by Products Page 37 Sales Breakdown by Products Feed Farm Food Total 3Q18 3Q19 %Change 3Q18 3Q19 %Change 3Q18 3Q19 %Change 3Q18 3Q19 %Change Thailand 12,513 10,201 -18% 21,939 21,777 -1% 11,468 11,682 2% 45,920 43,660 -5% Domestic 12,491 10,172 -19%
Slide 39: Appendix D: Group of CPP's Associate Companies & Joint Ventures
Appendix D: Group of CPP’s Associate Companies & Joint Ventures Kitchen of The World
Slide 40: Group of CPP's Associate Companies & Joint Ventures
9M2019 : Results Briefing Group of CPP’s Associate Companies & Joint Ventures Page 39 As of June 30, 2019 No. Associates Type of Business Direct and Indirect Interest (%) 1 Chia Tai (Cixi) Investment Mangement Ltd. Provision of Consulting service on economic and trade 25.78 2 Conti Chia Tai Internat
Slide 41: Appendix E: Product Samples & Retail Outlet Formats
Appendix E: Product Samples & Retail Outlet Formats Kitchen of The World
Slide 42: Food Retail Products
9M2019 : Results Briefing Food Retail Products Page 41
Slide 43: Food Retail Products
9M2019 : Results Briefing Food Retail Products Page 42
Slide 44: Food Retail Products
9M2019 : Results Briefing Food Retail Products Page 43
Slide 45: Food Service: Five Stars Chain
9M2019 : Results Briefing Food Service : Five Stars Chain Page 44 More Than 5,000 Outlets Vietnam India Cambodia Laos Philippines
Slide 46: Food Service: Chester's
9M2019 : Results Briefing Food Service : Chester’s Page 45 198 Outlets
Slide 47: Food Retail Outlets
9M2019 : Results Briefing Food Retail Outlets Page 46 396 Stores 12 Stores
Slide 48: CP Chozen Limited
9M2019 : Results Briefing CP CHOZEN LIMITED Page 47 24 Kiosks
Slide 49: Dak Galbi
9M2019 : Results Briefing Dak Galbi Page 48 10 Branches
Slide 50: Disclaimer
Disclaimer “This presentation contains some information from other sources that CPF does not make any representations regarding the use, validity, accuracy, or reliability of, or the results of the use of information, data but not limited to, all text, and images (“the Content”) on this presentation
Slide 51: Kitchen of The World
Kitchen of The World
Charoen Pokphand Foods PCL — 9M 2019 Earnings Presentation on 6ix