Thai Union Group Public Company Limited · SET:TU
Thai Union Group Public — Thai Union Frozen Products — FY2008 Earnings Presentation
37 slides from Thai Union Group Public's earnings presentation, Mar 3, 2009
Slide 1: Analysts Meeting on 2008 Review and 2009 Outlook
Thai Union Frozen Products Analysts Meeting on 2008 Review and 2009 Outlook Bangkok March 3, 2009
Slide 2: 2008 In a Snapshot
2008 In a Snapshot Challenging Business Environment: • High volatilities of Thai baht exchange rate and oil prices • Tuna raw material price hitting a record high of US$1,950/ ton in June 2008 but dipped dramatically in the fourth quarter • Global financial crisis in 4Q08 leading to widespread credi
Slide 3: 2008 – The Second Highest Profit on Record
2008 – The Second Highest Profit on Record Btm 2008 2007 YoY Sales 69,048 55,507 +24.4% Sales in US dollar term 2,069 1,611 +28.4% Gross Profit 8,757 7,576 +15.6% %sales 12.7% 13.7% Operating Profit 2,823 2,330 +21.2% %sales 4.1% 4.2% Add: FX Gain (Loss) 84 184 -54.3% Add: Other Incomes 404 380 +6.3
Slide 4: 4Q08 Fine If Without Inventory Markdown and Fishing Vessel Maintenance Exp.
4Q08 Fine If Without Inventory Markdown and Fishing Vessel Maintenance Exp. Btm 4Q08 4Q07 YoY 3Q08 QoQ Sales 18,410 15,254 +20.7% 18,431 -0.1% Sales in US dollar term 528 451 +17.1% 545 -3.1% Gross Profit 2,137 2,060 +3.7% 2,768 -22.8% %sales 11.6% 13.5% 15.0% Operating Profit 464 578 -19.7% 1,129 -
Slide 5: Improved Profit and Record EBITDA
Improved Profit and Record EBITDA 2008 2008 2007 2007 2006 2006 2005 2005 2004 2004 Bt m US$ m Bt m US$ m Bt m US$ m Bt m US$ m Bt m US$ m Sales 69,048 2,070 55,507 1,612 55,039 1,457 53,644 1,330 46,751 1,159 EBITDA 4,265 128 3,829 111 3,927 104 3,775 94 3,133 78 Depr.+Amor. 1,000 30 979 28 853 23
Slide 6: ROE and Collection Period Improved Though Higher Leverage
ROE and Collection Period Improved Though Higher Leverage 2008 2007 2006 2005 2004 A/R Turnover (days) 36 38 36 34 29 Inventory Turnover (days) 105 105 93 90 90 Gearing Ratio* 1.5x 1.3x 1.0x 1.1x 1.0x D/E Ratio** 1.1x 1.0x 0.7x 0.8x 0.7x ROAE 16.0% 14.2% 15.8% 18.5% 18.7% ROAA (EBIT/ Avg. Total Asse
Slide 7: 2008 Sales Own Brands vs. OEM & Sales from Thai Operations
2008 Sales Own Brands vs. OEM & Sales from Thai Operations Sales from Thai Operations Alone Own Brand vs. Contract Manufacturing (OEM + Domestic Sales) Overseas Subs. 40% Contract Manufacturing for Export (OEM) (own brands) Europe Africa 0% 50% Middle East 26% 9% USA 5% 11% 40% South America 2% Ocea
Slide 8: Strong Sales Across All Products
Strong Sales Across All Products 2008 Consolidated Sales by Product • Group sales up 28% YoY Shrimp Feed Cephalopod 6% Canned Seafood • Tuna sales up 22% 3% 9% Sardine / Canned Mackerel 3% • Shrimp sales up 24% Petfood 9% • Pet food sales up 42% • Sardine sales up >100% Frozen Tuna 48%• Cephalopod s
Slide 9: Strong Sales Coming From All Markets
Strong Sales Coming From All Markets 2008 Consolidated Sales by Market • US up 18% YoY Oceania Middle East • EU up 60% Europe 3% Asia (non-Japan) 4% 15% Africa • Japan up 45% 5% USA 2% 50% • Middle East up 39% Japan 10% • Africa up 81% Domestic sales 9% • South America up 65% Canada 1% • Oceania up
Slide 10: Thai Baht On Continual Decline
Thai Baht On Continual Decline -About 91% of the group’s revenues and 65% of the group’s costs are in US$ in 2008. We manage to keep the cost structure (US vs. Thai baht) steady over time. -Given the cost structure of our Thailand operations, weaker Thai baht should benefit us. -10-
Slide 11: Bankers' View of Weak Thai Baht
Bankers’ View of Weak Thai Baht -11-
Slide 12: High Tuna Prices For Most of 2008 But Plunged in 4Q08
High Tuna Prices For Most of 2008 But Plunged in 4Q08 Due to Improved Catching and Low Oil Prices USD / MT Skipjack Tuna Prices (WPO & EPO) 2500 2000 1500 WPO price 1000 EPO price 500 0 3 4 5 6 7 8 9 Ja t Ja ct Ja ct Ja ct Ja t Ja t l l l l l l pr pr r pr pr pr Ju Ju Ju Ju Ju Ju c c c Ap '0 '0 '0 '0
Slide 13: Shrimp Prices Stable Despite Reduced Cultivation
Shrimp Prices Stable Despite Reduced Cultivation White Shrimp Price (60 counts/ kg) THB / KG Current shrimp prices: Bt132 / Kg 2008 Average: Bt114 / Kg 2007 Average: Bt109 / Kg -13-
Slide 14: Strong Sales, More Inventories, More Debts, But Record High EBITDA in 2008
Strong Sales, More Inventories, More Debts, But Record High EBITDA in 2008 • Strong sales and high raw material prices (higher value of inventories) leading to more short term debts However, cash cycle dropped by 2 days to 121 days as the AR turnover rate improved from the previous year. Interest-be
Slide 15: Thai Baht Bond (early Nov. 2008)
Thai Baht Bond (early Nov. 2008) 2008) • Total amount: Bt 2,000 million (fully subscribed) – 2-year tranche: Bt 1,500 billion @ 4.7% p.a. – 5-Year tranche: Bt 500 m @ 5.5% p.a. • Adviser: HSBC • Investors: mutual funds, insurance co., provident funds, etc. • Objectives: – Support business expansion
Slide 16: Recap on other 2008 Events
Recap on other 2008 Events • Final US shrimp AD rate TUF received a favorable final U.S. shrimp anti-dumping (AD) rate from US Department of Commerce (USDC) upon its announcement on August 27, 2008. The final (and effective) rate was significantly reduced to 2.85% from the preliminary rate of 15.30%
Slide 17: Recap on other 2008 Events
Recap on other 2008 Events • Investment in a 14.99% stake of Avanti Feeds TUF purchased 1,190,000 units of Avanti Feeds’ newly increased shares at a price of 40 rupees per piece. The total investment was worth Bt40 m. After the investment, we have owned a 14.99% stake of the Indian firm. Avanti Feed
Slide 18: Update on US Subsidiaries
Update on US Subsidiaries •Chicken of the Sea International (COSI) 2008 has been a challenging year with high tuna costs and oil prices for COSI. Despite sales growth, price adjustments lagged cost increases. Price adjustments at retail level were sticky. Moving from 6 oz. cans into 5 oz. cans in 4Q
Slide 19: Update on US Subsidiaries
Update on US Subsidiaries •Chicken of the Sea Frozen Foods 2008 was another banner year for COSF. It continued strong sales growth (annual sales exceeding US$ 100 m in less than 3 years of operations). Its impressive performance partly explained the continual sales growth of the group in shrimp and
Slide 20: 5-year (2004-2008) Sales Target Mission Achieved!
5-year (2004 (2004--2008) 2008) Sales Target Mission Achieved! Target annual sales in 2008 = US$ 2,000 m Actual annual sales in 2008 = US$ 2,070 m -20-
Slide 21: New 4-Year (2009-2012) Sales Targets
New 4-Year (2009 (2009--2012) 2012) Sales Targets US$ 3,000 m in 2012 meaning growth @ at least 10% p.a. -21-
Slide 22: Outlook for 2009
Outlook for 2009 1. Target annual sales in dollar term to grow 10% YoY 2. Despite the concerns for the global recession, demand for most of our products should be sustainable given their affordability and nutritional benefits. Since early 2009, we have not seen any sharp contraction of demand. 3. Ex
Slide 23: Strategy in 2009
Strategy in 2009 - Continue to integrate operations between group companies in order to save costs and strengthen our supply chain - Maintain tight cost and inventory controls and improve plant efficiency to lower per unit cost to stay competitive - Expand sales to markets whose currencies are stron
Slide 24: Successful businesses grow by introducing new products
Chicken of the Sea Vision Successful businesses grow by introducing new products -24-
Slide 25: Latest Chicken of the Sea Product
Latest Chicken of the Sea Product Concept -Seafood added to dips to enhance heartiness via Seafood Snax added protein and healthiness via Omega-3 benefits -Unique item to category Positioning -Now there’s a heartier and healthier way to snack on dips Product -Smoked Salmon Dip -Spicy Shrimp Dip -Cra
Slide 26: New Fisho Products
New Fisho Products -26-
Slide 27: New Sealect Products
New Sealect Products esoutuz we" Wa nainhawAoweses...51GA Nu Die
Slide 28: Fisheries Sustainability
Fisheries Sustainability Four Regional Fisheries Management Organizations (RFMOs) manage global tuna resources: 1. IATTC Inter-American Tropical Tuna Commission (1949) 2. ICCAT International Commission for the Conservation of Atlantic Tuna (1969) 3. IOTC Indian Ocean Tuna Commission (1996) 4. WCPFC
Slide 29: TUF – a member of ISSF
TUF – a member of ISSF • Development of ISSF - International Seafood Sustainability Foundation (2008) – 65% of the world tuna business have agreed to implement the NEW ORGANIZATION to manage this critical issue. – TOP 3 U.S.A Tuna Companies – TOP 3 European Tuna Companies – TOP 2 Asian Tuna Producer
Slide 30: Science Committee and Action Plans
Science Committee and Action Plans Science Committee will follow the latest science based studies available on status of stocks (renewed certified annually), status of stock exploitation and impact on associated species, by catch, and ecosystems. The goal is to bring market buying power to bear on R
Slide 31: Tuna Fish Stock Assessment
Tuna Fish Stock Assessment Pacific Western Eastern Atlanic Indian Species Ocean Pacific Pacific Ocean Mediterranean Ocean Total Skipjack - General X X X 3 Skipjack - East X 1 5 Skipjack - East X 1 Yellowfin X X X X 4 Bigeye X X X X 4 Albacore - General X X 2 Albacore - North X X 2 6 Albacore - South
Slide 32: Preliminary Status of Tuna Stock
Preliminary Status of Tuna Stock Pacific Western Eastern Atlantic Indian Species Ocean Pacific Pacific Ocean Mediterranean Ocean Skipjack - General Skipjack - East Skipjack - East Yellowfin Bigeye Albacore - General N/A (1) Albacore - North (2) Albacore - South (1) No specific data for Mediterranean
Slide 33: Chicken of the Sea in Reality TV Again!
Chicken of the Sea in Reality TV Again! -33-
Slide 34: Egos Will Be Trumped
" EGOS WILL BE TRUMPED @ CLINT BLACK ( @ TOM GREEN Actor, © SCOTT HAMILTON ( @ JESSE JAMES foun © BRIAN McKNIGHT W APPRENTIC: NEW SEASON MARCH 19/8c 2% NBC -34-
Slide 35: Sunday May 3rd 2009
SUNDAY MAY 3rd 2009 2 Hour Episode -35-
Slide 36: Expected Dividend for 2H08
Expected Dividend for 2H08 Expected final dividend = Bt0.70 per share XD & Payment dates within April, 2009 Est. dividend for 2008 (interim + final) = Bt1.26 / share Dividend Yield = 6.5% *Based on the share closing price of Bt19.3 on Feb 27, 2009 -36-
Slide 37: Q&A
Q&A
Thai Union Frozen Products — FY2008 Earnings Presentation on 6ix