Thai Union Group Public Company Limited · SET:TU
Thai Union Group Public — Thai Union Group PCL — Q4 2024 Earnings Presentation
49 slides from Thai Union Group Public's earnings presentation, Feb 18, 2025
Slide 1: 2024 Analyst Meeting
2024 Analyst Meeting Thai Union Group PCL. February 18, 2025 2024 Analyst Meeting Investor Relations Department
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: Q4 24 Key highlights and key developments
Q4 24 Key highlights and key developments Q3 24 2024 Analyst Meeting Analyst Investor Relations Meeting Department
Slide 4: CEO message: marine health and nutrition vision
“The world is undergoing unprecedented shifts from geopolitical pressures and rising inflation to rapidly evolving consumer demands. Amid these challenges, Thai Union is turning opportunities into success. With a bold vision to be the world’s leading marine health and nutrition company, we stay true
Slide 5: 2024 challenging year; better macroeconomic outlook expected in 2025
2024 was challenging due to global pressures; however, we expect a better macroeconomic outlook in 2025, despite some headwinds 2024: Challenging Year 2025: Better Outlook Sluggish global GDP growth Improved GDP growth in our key regions led to tighter spending with easing global monetary policies 2
Slide 6: 2024: Sales back to growth, record GPM
2024: Sales were back to growth and recorded the 3rd highest sales, while GPM hit an all-time high of 18.5% and EBITDA delivered the 2nd best performance ever 2024 sales rose by 1.7% YoY to Financial Summary 2023 2024 (THB mn) THB 138,433 mn +1.7% YoY 138,433 136,153 +10.3% YoY Share price movement*
Slide 7: FY24 net profit and EPS recovered strongly
FY 24 Net profit and EPS recovered strongly compared to adjusted 2023 net profit Bridge Net Profit (THB mn) +135.8% YoY +7.2% YoY +22.3% YoY 5,685 +203 +91 -190 0 4,985 +701 -1,050 4,650 +273 -356 +314 +19,633 -13,933 2023 Discontinued Red 2023 Operating FX gain Other Share Higher Tax NCI 2024 Trans
Slide 8: Q4 24: topline penalized by FX, strong GPM
Q4 24: topline penalized by FX but showing organic growth, with strong GPM Sales Gross Profit Operating Profit Net Profit* 35,090 6,554 1,590 1,213 THB mn THB mn THB mn THB mn 18.7% 4.5% 3.5% GPM OPM NPM -1.2% YoY +3.6% YoY -25.0% YoY -18.7% YoY +0.7% QoQ -3.5% QoQ -23.3% QoQ -13.4%
Slide 9: 2H24 final dividend of THB 0.35 per share
TU announced a 2H 24 final dividend of THB 0.35 per share. The payout ratio remained at a very high level and dividend yield is attractive at 5.7% Dividend per share (DPS) and Payout Ratio Final Dividend for the period: July 1 to December 31, 2024 DPS: THB 0.35 per share 60% 60% 57% 59% 58% 57% 57%
Slide 10: On track to unlock value from transformation programs
On track to unlock value from 2 transformation programs PROJECT SONAR PROJECT TAILWIND Group transformation program to lay the foundations PetCare transformation program to accelerate growth 2025 Target: ~USD15mn in-year savings 2025 Target: ~USD 17mn OP uplift ~USD 75mn annualized savings from 2026
Slide 11: Ranked number one in food industry on DJSI
Thai Union ranked number one in the world in food industry on DJSI and earns A-level recognition in SET ESG ratings 2024 TU has been ranked #1 in the food TU earns A-Level recognition in products industry on the 2024 DJSI SET ESG ratings in the Agro & Food with a total score of 85 points. industry c
Slide 12: Q4 24 Financial performance
Q4 24 Financial performance Q2 24 2024 Analyst Meeting Analyst Investor Relations Meeting Department
Slide 13: CFO message on 2024 results
“Thai Union delivered solid results in 2024, with organic sales expansion continued in Q4 24 contributing to the third-highest annual sales, while GPM reached an all-time high. Additionally, record-high FCF was generated, thanks to healthy EBITDA. With this steady performance and strong financial po
Slide 14: Key highlights: organic expansion and strong GPM
Key highlights: We are pleased with performance in 2024, driven by organic expansion and strong GPM, and confident in continued momentum Q4 24 performance FY 24 performance 1.9% YoY organic The 3rd highest Solid organic An all-time high sales growth GPM in the past sales growth with Free Cash Flow o
Slide 15: Sales normalized, improved GPM
Sales normalized, while improved GPM, reaching the 3rd highest level in the past 4 years, driven by organic expansion 19.5% 19.0% 18.5% 18.7% 18.2% 18.2% 18.0% 18.0% 18.2% 17.5% 18.2% 18.4% 17.7% 17.3% 17.8% 16.9% 16.9% 17.3% 16.2% GPM 15.1% 6.5% 6.2% 5.9% 5.8% 5.4% 5.2% 5.0% 4.8% 4.4% 4.2% 4.0% 4.2
Slide 16: Q4 24: soft organic sales growth, negative FX impact
Q4 24: Soft organic sales growth but still expanded for the 2nd consecutive quarter, while THB appreciation led to a negative FX impact. Sales growth (% YoY) Organic growth FX translation 3.6% 1.7% 2.7% 1.7% 0.7% 3.2% 3.6% 3.1% 0.8% Sales slightly contracted YoY 0.3% 0.1% 0.3% 1.9% in Q4 24 0.3% 0.9
Slide 17: Tuna and shrimp price trends
Tuna prices rose as expected, but shrimp prices surged exceptionally due to lower supply throughout 2024 Tuna (Skipjack; USD/ton) Shrimp (60pcs/kg; THB/kg) Quarterly avg. Quarterly avg. Q1 22 Q2 23 Monthly avg. Shrimp prices surged temporarily to THB 182 Monthly avg. 2,000 195/kg in Jan 22 due to hi
Slide 18: Thai Baht appreciation against key currencies
Overall, the Thai Baht appreciated against all key currencies YoY and QoQ, especially EUR/THB which dropped by 5.4% YoY USD/THB Quarterly avg. EUR/THB Quarterly avg. Avg. in Q4 24: 1 USD / 34.0 THB (-4.6% YoY, -2.3% QoQ) Monthly avg. Avg. in Q4 24: 1 EUR / 36.3 THB (-5.4% YoY, -5.1% QoQ) Monthly avg
Slide 19: Freight rates and logistics market in 2024
Although external factors continued to challenge freight rates throughout 2024, we were able to manage the situation Logistics market Key topics in logistics market in 2024 Freight cost: Thailand to the U.S. (East & West Coast) Red Sea situation U.S. Tariffs increase U.S. East cost and Gulf of Conta
Slide 20: Profitability ratios and net working capital
Significant improvement in profitability ratios and lower net working capital driven by effective inventory management ROE* Inventory Days Net Debt to EBITDA* Net debt to EBITDA ratio increased due to the exercise of a 167 call option on perpetual debentures. 164 162 158 9.8% 152 8.7% 8.9% 8.1% 4.19
Slide 21: 2024: Net debt at THB 53.0bn
2024: Net debt at THB 53.0bn, thanks to an all-time high THB 11.7bn FCF offsetting PERP. and share buy back impacts. Net Debt/Equity rose to 0.94x but still in a very strong position ND/E 0.78x Income tax paid and ND/E 0.94x Free Cash Flow THB +11,705mn Kd* = 3.59% other investing & financing activi
Slide 22: 4th share repurchase program
Issued the 4th share repurchase program at the end of 2024 to enhance shareholder value and strengthen investor confidence Completed Completed Completed In process (update as of Feb 17, 25) Program 1 Program 2 Program 3 Program 4 Announcement date Mar 17, 20 Dec 16, 22 Jan 16, 24 Dec 25, 24 Repurcha
Slide 23: Debt maturity profile and refinancing
THB 9.5bn in bonds and Perp. matured in Q4 24 and were replaced by short-term loans, reducing interest costs in the last quarter Debt maturity profile Refinanced bond in 2024 As of Dec 31, 24 ST Loans SLLs SLBs Bonds Perp. (Unit: THB bn) Amount Interest Rate Maturity Date Types of Debts (THB bn) (%
Slide 24: BEPS 2.0 Pillar 2 top-up tax impact
Top-up tax impact from implementation of BEPS 2.0 Pillar 2 for the whole group is estimated between 300 – 350mn, pending more details on compensation measures in Thailand BEPS BEPS2.0 2.0- Pillar Pillar 22 Application ApplicationofofBEPS BEPS 2.0 2.0-Pillar Pillar22 Base Erosion and Profit Shifting
Slide 25: Q4 24 Business performance
Q4 24 Business performance Q3 24 2024 Analyst Meeting Analyst Investor Relations Meeting Department
Slide 26: High-margin categories now 20% of portfolio
Our high-margin categories, petcare and value-added, now represent 20% of our portfolio, with ambition to rise to 25 – 30% by 2030 Total 2024 sales: THB 138,433 mn Ambient Frozen PetCare Value-added THB 68,412mn THB 42,226 mn THB 17,389 mn THB 10,406 mn 19.1% 11.7% 28.5% 26.1% GPM GPM GPM GPM 49.4%
Slide 27: Q4 24 Ambient
Q4 24 Ambient: Strong volume recovery, GPM reached a 7-quarter high Sales (THB mn) and GPM (%) YoY and QoQ analysis: 20.1% 20.6% 18.9% • In Q4 24, Ambient sales increased by 1.7% YoY, mainly due to a 17.4% 16.6% 6.2% YoY rise in sales volume, though FX translation partially offsets this growth. +1.7
Slide 28: 2024 Ambient: record-high sales
2024 Ambient: Achieved record-high sales with improved GPM Sales (THB mn) and GPM (%) Business update: 21.1% 21.4% 21.3% Innovations from Chicken of the Sea 19.0% 19.1% On-the-go kits • Continued launching new wild-caught light tuna +7.1% YoY on-the-go protein flavors with McCormick, No. 1 66,510 68
Slide 29: Q4 24 Frozen
Q4 24 Frozen: Sales volume maintained its growth momentum, while sales and GPM reached their highest quarterly levels of the year Sales (THB mn) and GPM (%) YoY and QoQ analysis: 14.4% • In Q4 24, Frozen sales declined by 4.7% YoY, primarily due to weak 11.8% 12.0% 12.1% consumption in the U.S. mark
Slide 30: 2024 Frozen: rightsizing completed
2024 Frozen: Completed the rightsizing of the Frozen category, positioning the business for future growth. Sales (THB mn) and GPM (%) Business update: 11.8% 11.7% Growing the business through innovation and value-added products, 11.3% market expansion and cost efficiency 9.7% • Frozen business: cont
Slide 31: Q4 24 PetCare
Q4 24 PetCare: Sales continued growing, and GPM remained at a solid level within the target level at 26 – 28% Sales (THB mn) and GPM (%) 31.3% 30.6% YoY and QoQ analysis: 23.4% 25.7% 26.1% • In Q4 24, sales slightly increased by 0.1% YoY due to a high base performance as customers fully restocking i
Slide 32: 2024 PetCare: record-breaking GPM
2024 PetCare: Record-breaking GPM with strong global pet food demand driving sales growth Sales (THB mn) and GPM (%) Business update: 28.5% The new ASRS warehouse at the 25.6% 26.3% 24.3% Songkhla plant remains on schedule for 20.5% completion within end of 2025. Once operational, it will significan
Slide 33: Q4 24 Value-added
Q4 24 Value-added: Sales volume increases amid sales decline; temporary GPM drop from new factory ramp up costs Sales (THB mn) and GPM (%) YoY and QoQ analysis: 26.2% 29.5% • In Q4 24, Value-added sales decreased by 4.3% YoY, primarily due 26.5% 25.1% 23.5% to weak consumption in the U.S. market for
Slide 34: 2024 Value-added: high growth potential
2024 Value-added: continued to be the high growth potential category Sales (THB mn) and GPM (%) Business update: 28.5% 29.4% 28.0% 27.1% 26.1% Packaging and printing businesses continue to be key drivers • Improve productivity efficiency +5.2% YoY • Expand more printing line further to support the g
Slide 35: Outlook
Outlook Q2 24 2024 Analyst Meeting Analyst Investor Relations Meeting Department
Slide 36: 2025 Guidance
2025 Guidance: Driving top-line growth with improved profitability, targeting record-high GPM. Softer Q1 performance is expected YoY 2025 Guidance Key drivers Sales growth + 3 - 4% YoY • Strong organic growth of +6 – 7% across all categories (2024A: +1.7%) • Partially offset with ~3% negative FX imp
Slide 37: Q&A
Q&A Q&A Q2 24 2024 Analyst Meeting Analyst Investor Relations Meeting Department
Slide 38: Event survey
We value your opinion! Scan here to complete our event survey. 2024 Analyst Meeting Investor Relations Department
Slide 39: Appendix
Appendix Q2 24 2024 Analyst Meeting Analyst Investor Relations Meeting Department
Slide 40: Thai Union footprint: 2024 sales contribution
Thai Union footprint: 2024 sales contribution 17 Production locations ~39% ~30% North America Europe 6 Asia • Indonesia • Vietnam • Pakistan • India • Thailand (2) 10 Europe & Africa • France • Poland • Germany (2) • Portugal • Ghana • Seychelles • Lithuania • Russia • Norway Pacific Ocean Pacific O
Slide 41: Sales breakdown by geography and business segments
Sales breakdown by geography and business segments Sales breakdown by geography Sales breakdown by business segment 9.8% 9.5% 10.1% 9.7% 9.9% Others* 2.5% 2.4% 5.1% 3.2% 2.5% 4.1% 5.3% 5.8% 6.0% 5.6% Middle East 10.0% 10.3% 10.5% 11.5% 11.0% Japan Brand Brand 36.4% 37.2% 29.0% 28.3% 26.3% Thailand 2
Slide 42: U.S. & Canada and Europe sales
The U.S. & Canada: Sales dropped primarily from Europe: Sales dropped mainly from Ambient, Frozen, despite growth in Ambient and PetCare sales PetCare, and Value-added businesses -4.3% YoY -6.2% YoY +6.4% QoQ -1.8% QoQ 14,822 14,130 14,185 11,414 13,327 10,692 10,215 10,034 12,833 9,829 Sales Sales
Slide 43: Thailand and Japan, EM and rest of world sales
Thailand: Sales grew across all categories except for Japan, Emerging Markets (EM) and the rest of the PetCare world: Sales grew across all categories, especially Ambient and PetCare +5.8% YoY +10.2% YoY -0.2% QoQ -5.7% QoQ 6,951 7,291 6,874 3,779 4,007 3,997 3,606 3,619 6,236 6,120 Sales Sales Q4 2
Slide 44: Ambient sales contribution and GPM
Ambient has the highest sales contribution, with recovering GPM A sharp drop Increasing in tuna price Higher demand from Normalization effect from High base for Recognizing low- selling price ~USD 700 lockdown and promotions 2020’s pantry loading Ambient together cost inventory & to cover in 3 quart
Slide 45: Ambient GPM and tuna prices in inventory
Ambient GPM continued to improve, supported by lower tuna prices in inventory 23.3% 22.9% 22.4% 21.5% 22.0% 22.7% 21.7% 21.2% 19.6% 19.4% 19.9% 20.4% 20.1% 20.6% 18.4% 18.9% 18.6% 18.9% 17.7% 17.1% 17.6% 20.1% 20.2% 20.7% 19.5% 18.0%18.7% 18.0% 17.4% 16.5% 16.9% 16.7% 16.6% 15.6% 14.0% 14.0% Peak at
Slide 46: Frozen category profitability after rightsizing
Frozen category is on track to deliver better profitability after the rightsizing Market price Recovery Market price stabilization Reduced demand for frozen from robust correction in the and reduced Strategic rightsizing food amid the COVID-19 food service U.S., heightened demand in of frozen busine
Slide 47: PetCare flagship business
With strong and continuous sales growth, along with an impressive GPM, PetCare remains the flagship business for future expansion Signs of Strong demand for pet food, High base for pet food and Inventory recovery Back to growth supported by COVID-19 inventory build up destocking from pandemic restoc
Slide 48: Value-added sales and GPM
Value-added sales improved constantly, with healthy GPM Higher GPM >30%, Established Thai Union Record high Strong GPM driven by Record high GPM due mostly from improved Lifescience (supplement) quarterly sales with our strategy to prioritize to strong performance packaging margins and and launched
Slide 49: Floating-rate short-term loans after Perpetual redemption
A temporarily high proportion of floating-rate short-term loans, primarily due to the redemption of Perpetual Debenture (THB mn) By Currency By Maturity By Interest Rate 67,987 68,512 67,987 68,512 7.5% 7.5% 0.3% 0.1% 12.6% 24.8% 17.9% 17.7% 11.2% THB 12.6bn bonds, classified in short- Float term as