Thai Union Group Public Company Limited · SET:TU
Thai Union Group Public — Q3 2014 Earnings Presentation
36 slides from Thai Union Group Public's earnings presentation, Nov 14, 2014
Slide 1: 3Q14 Results Presentation
3Q14 Results Presentation 14 November 2014
Slide 2: Disclaimer
Disclaimer The information contained in our presentation is intended solely for your personal reference only. In addition, such information contains projections and forward-looking statements that reflect our current views with respect to future events and financial performance. These views are base
Slide 3: Agenda
Agenda Company Overview Key Highlights 9M 2014 Financial Results Business Outlook
Slide 4: More than 37 years of seafood processing experience
More than 37 years of seafood processing experience Strategic Acquired third Expanded to Set up pet Founded Expanded to Entered to Expanded to Expanded partnership largest canned shrimp feed food Thai Union frozen seafood tuna fishing in shrimp farming capacity of with Mitsubishi seafood brand busin
Slide 5: Group Structure
Group Structure Associated Companies Thai Union Frozen Products Frozen & canned seafood, pet food, snack and ready-to-eat meals Group 1 Group 2 Group 3 Group 4 Group 5 Frozen and Canned Seafood Packaging Products Animal Feeds and Aquaculture Thai Domestic Market Overseas Investment Thai Union Manufa
Slide 6: A seafood focus company
A seafood focus company 9M14 Total Sales THB 88,630 million Tuna (USD 2.743 billion) Brand 43% Shrimp & related OEM 39% business OEM 57% Value added Sardine & other Brand & Pet food products 61% 79% Mackerel Salmon 83% 34% 44% 99% 21% - 100% 66% 56% 1% 17% % Total sales 47% 22% 2% 5% 4% 7% 13% Canne
Slide 7: #1 Global leader in a consumer staple business
#1 Global leader in a consumer staple business TUF is the world’s largest canned tuna producer, with the processing volume 18% of world production. World Canned Tuna Annual Production1 1.67 million tons Others 82% TUF 18% Source: 1Fishstat Plus (FAO) 2010, based on finished product production 6
Slide 8: Global market leading brand portfolio
Global market leading brand portfolio #1 #1 #1 •#1 canned seafood •#1 canned •#1 premium brand in the UK, Ireland seafood brands canned sardine and the Netherlands in France brand in France #1 #1 #1 •#1 premium canned • #1 canned tuna •#1 canned tuna sardine brand in US, brand in China brand in Thai
Slide 9: Fully integrated global supply chain in canned tuna
Fully integrated global supply chain in canned tuna… Raw material flow Work-in-process and finished good flow Raw material sources Europe Production base Fishing fleet USA Thailand Ghana Seychelles West Pacific Ocean Atlantic ocean Vietnam Papua New Guinea Indian ocean TUF’s 7 own fleets Raw Materia
Slide 10: … and frozen shrimp business
… and frozen shrimp business Production base TUF’s export markets Chicken of the Sea Frozen Europe Food (COSFF) COSFF’s sourcing Asia COSFF’s distribution China Japan USA Thailand India Vietnam Pacific ocean Atlantic ocean Latin America Oceania Indian ocean Raw Material Acquisition Production Market
Slide 11: M&A driving market diversity
M&A driving market diversity Geographic Sales Breakdown 100% 9M14 Total Sales 12% 15% 13% 14% THB 88,630 million 80% 14% 10% 8% 12% 10% 7% 12% 7% 11% 8% Others* 7% 60% 13% 30% Japan 7% 32% 43% Domestic 40% Europe 31% 58% USA 49% 20% 36% 40% US market showed strongest sales 0% growth thanks to higher
Slide 12: Share Capital Information
Share Capital Information Stock Information Major Shareholders (As of 28 Aug 2014) Bloomberg/ Reuters TUF TB/ TUF.BK Chansiri Family 23.06% Share price (10 Nov 2014) : THB 80.00 Niruttinanon Family 7.49% Historical price : Mitsubishi Corporation 7.58% 52-week high THB 83.00 Thai NVDR Co., Ltd. 6.68%
Slide 13: Key Developments
Key Developments Driving positive changes within community & conserving environmental 19 Aug 2014: 25 Aug 2014: The opening of the 2nd TUF Child Care Center Planting mangrove saplings with Kung Krabaen • Offers basic preparatory and primary education equally Bay Royal Development Study Centre and th
Slide 14: Key Developments (Cont'd)
Key Developments (Cont’d) Recent awards & recognitions 22 Sep 2014: 22 Sep 2014: 6 Nov 2014: Thailand’s Corporate Brand 2014 TUF is the first and only Thai TUF will be added in MSCI Asia - Rising Stars Award company in the food category Pacific Index which has been selected as an The highest brand v
Slide 15: Key Developments (Cont'd)
Key Developments (Cont’d) Redemption of THB debenture 27 Jul 2014: TUF redeemed THB 3,300mn unsubordinated and unsecured debenture. This debenture was issued in 2011 with 4.51% coupon rate. THB debenture private placement 9 Oct 2014: TUF issued the unsubordinated and unsecured debentures for lim
Slide 16: Key Developments (Cont'd)
Key Developments (Cont’d) ECB Conversion strengthened financial position Background TUF issued Euro Convertible Bond (ECB) to Standard Chartered Private Equity Limited (SCPE) in Oct 2010 as part of TUF’s financing scheme for MWB acquisition. TUF accrued additional interest expense of THB 215mn in
Slide 17: Key Developments (Cont'd)
Key Developments (Cont’d) Change par value Current New Par value (THB) 1.00 0.25 Number of shares 1,192,953,874 4,771,815,496 Paid up capital (THB) 1,192,953,874 1,192,953,874 Tentative timeline 16
Slide 18: Successful M&A and JV story during 2009 – 2013
Successful M&A and JV story during 2009 – 2013 Year 2009 & 2012 2010 2012 - 2013 Invested in Avanti Feeds Limited Acquired 100% of MW Brands, Acquired of Pakfood PCL, one of (15% in 2009 and to 25.12% in one of the largest canned the largest Thai shrimp processors Transaction 2012) seafood manufactu
Slide 19: 2014 Strategic acquisitions
2014 Strategic acquisitions Period September October Transaction Acquired 100% of MerAlliance, the leading French- Acquired 100% of King Oscar, one of the world's top based company ten seafood brands The number one brand in the highly unique and Business European smoked salmon producer premium sardi
Slide 20: Agenda
Agenda Company Overview Key Highlights 9M 2014 Financial Results Business Outlook
Slide 21: 3Q14: The best ever quarterly performance
3Q14: The best ever quarterly performance THB million Revenue 30,423 Gross Profit 5,246 % GPM 17.8% Net Profit 1,922 %NPM 6.3% 20
Slide 22: 3Q14 Key Highlights
3Q14 Key Highlights Sales +3.3% YoY from weaker THB (USD sales +1.3%). Key growth drivers were the stronger sales of value-added & other products and pet food business. Sales from the US market showed strong growth YoY thanks to our US frozen shrimp trading operation. Strong recovery of GPM to 1
Slide 23: A record quarter with strong earning growth in 9M14
A record quarter with strong earning growth in 9M14 Financial Summary1 Reported 9M14 net profit (THB million) boosted by 116% YoY to 9M14 88,630 Total Sales 9M13 82,025 +8.1% THB 4,393million 9M14 Gross Profit 14,469 Share price movement Q1’12 +41.2% 9M13 10,246 Q1’11 20132 20142 (Jan-Dec 13) (Jan-
Slide 24: Agenda
Agenda Company Overview Key Highlights 9M 2014 Financial Results Business Outlook
Slide 25: Continued sequential recovery in 3Q14
Continued sequential recovery in 3Q14 … … from strong performance of overseas subsidiaries Total sales (THB mn) GPM NPM 50,000 17.2% 16.9% 16.7% 17.2% 18.00% 15.7% 45,000 14.9% 16.00% 13.9% 40,000 12.4% 12.9% 14.00% 35,000 11.6% 10.9% 30,788 30,258 30,423 12.00% 28,327 29,464 27,948 30,000 26,758 28
Slide 26: Sales growth driven by weaker THB
Sales growth driven by weaker THB Sales Breakdown by Category THB mn +8.1% YoY By Business 9M14 +3.3% YoY 88,630 82,025 Value-added & Other products2 +0.5% QoQ Pet food Brand 43% 29,464 30,258 30,423 Salmon Sardine & Mackerel OEM 57% Shrimp & related business1 Tuna 3Q13 2Q14 3Q14 9M13 9M14 USD mn By
Slide 27: Strong GPM recovery from low fish cost and pet food business
Strong GPM recovery from low fish cost and pet food business Gross Profit Skipjack tuna raw material prices THB mn +41.2% YoY (USD/ton) 3,000 14,469 +28.4% YoY 2,500 +3.6% QoQ 2,000 10,246 5,246 1,500 5,065 4,085 1,000 1,200 (Oct’14) 500 0 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 3Q13 2Q14* 3Q14 9M
Slide 28: Record earnings in 3Q14 with stronger EBITDA
Record earnings in 3Q14 with stronger EBITDA EBITDA Net Profit THB mn THB mn +56.5% YoY +115.6% YoY +34.2% YoY +91.4% YoY 8,784 4,393 +6.0% QoQ +26.3% QoQ 5,612 1,922 3,061 3,246 1,522 2,038 2,418 1,004 3Q13 2Q14 3Q14 9M13 9M14 3Q13 2Q14 3Q14 9M13 9M14 EBITDA 9.9% NP Margin 3.4% 5.0% 8.2% 10.1% 10.7
Slide 29: FCF dropped in 3Q14 from building up inventories
FCF dropped in 3Q14 from building up inventories to take advantage of lower tuna costs ND/E1 0.92x 0.92x 0.83x Asset Liabilities Asset Liabilities 0.80x 0.80x & Equity & Equity Cash* Cash* AR ST Debt ST Debt Current AR Current Portion Portion of LT INV of LT AP 3Q13 4Q13 1Q14 2Q14 3Q14 AP INV Debt D
Slide 30: Improving profitability with declining gearing
Improving profitability with declining gearing ROE1 18.9% ROA2 A/R Days 15.0% 10.7% 41 43 41 41 9.5% 8.8% 9.6% 38 8.4% 7.1% 6.9% 6.3% 3Q13 4Q13 1Q14 2Q14 3Q14 3Q13 4Q13 1Q14 2Q14 3Q14 3Q13 4Q13 1Q14 2Q14 3Q14 INV Days Net WC3 134 Gearing Ratio4 (Time) 1.50x 1.48x 1.49x 135 124 1.46x 126 123 122 125
Slide 31: Better working capital management brought down leverage
Better working capital management brought down leverage Unit: THB mn Operating Activities Investing & Financing Activities ND/E 0.92x THB 10,464 mn ND/E 0.80x Kd = 4.24% Kd = 3.90% Free Cash Flow THB 8,123 mn 39,836 -8,784 537 35,553 2,398 905 2,341 -2,689 416 544 50 Net Debt EBITDA Change in Change
Slide 32: Declining debt level with more spread-out and longer maturities
Declining debt level with more spread-out and longer maturities 3Q14 Interest bearing debt (THB 39,010 mn) By Currency By Maturity 2015 EUR 4% 1% USD 17% 7% 17% Short-term Loan 55% 2016 23% Current Portion 2018 THB 79% of Long- 8% onwards 76% term Debt 2017 55% 21% Long-term 38% Debt 2013 3Q14 3Q14
Slide 33: 9M14 Financial Position Summary
9M14 Financial Position Summary Sales Margin Gross Profit Products (THB million) (%) (THB million) Tuna 41,512 x 17.6% 7,313 Shrimp & related 21,204 x 10.9% 2,309 Gross Profit business1 Sardine & x THB 14,469 million 4,764 18.2% 868 Mackerel Salmon 3,353 x 15.2% 511 Pet food 6,643 x 19.3% 1,285 Valu
Slide 34: Agenda
Agenda Company Overview Key Highlights 9M 2014 Financial Results Business Outlook
Slide 35: Business outlook
Business outlook Tuna • Higher consumption (volume) thanks to low fish cost that supports more promotional activities in most markets • Margins to stabilize thanks to a good balance of OEM and brand sales in times of volatile raw material costs Frozen Shrimp • Expect gradual recovery of domestic shr
Slide 36: Thank You
Thank You Corporate website: http://www.thaiuniongroup.com IR website: http://www.thaiuniongroup.com/en/investor.ashx E-mail: ir@thaiunion.co.th Tel: +66 2298 0024
Thai Union Group Public Company — Q3 2014 Earnings Presentation on 6ix