Cj Freshway Corporation · KRX:051500
Cj Freshway — Investor Presentation (2018)
26 slides from Cj Freshway's investor presentation, 2018
Slide 1: Investor Relations
CJ rs FRESHWAY INVESTOR RELATIONS
Slide 2: Index
Index Contents Page 1. Company overview 1 1-1. CJ Group 2~3 1-2. CJ Freshway 4~7 2. Food Material Distribution 8 2-1. Business environment 9~11 2-2. Core competency and Infra 12 2-3. FreshOne Business 13 3. Catering Service 14 3-1. Business environment 15 3-2. Core competency 16 4. Sauce/ seasoning
Slide 3: 1-1. CJ Group Company overview
1-1. CJ Group Company overview CJ group is one of the largest conglomerate in Korea, specialized in Consumer and Culture business. CJ Freshway is a key player in the food & food service division along with CJCJ(097950 KS), CJ Foodville(U/L). Business Division Sales mix 30% 18% 33% 17% CJ CheilJedang
Slide 4: 1-1. CJ Group integrated food value chain
1-1. CJ Group Company overview CJ has integrated value chain of food & food service industry. From raw material to restaurant brands, CJ maximizes synergy effect with affiliates by cost-effectiveness and product competitiveness. Wholesale/ Franchise seeds Producer Sourcing Retailer Restaurant fertil
Slide 5: 1-2. CJ Freshway Company overview
1-2. CJ Freshway Company overview CJ Corp(001040 KS) + special interest group holds 58.7% of CJ Freshway. Shareholder mix diversified in the recent years, as domestic institutions & NPS added their stake in the company. Most recently foreign funds have increased their holdings. Shareholding structur
Slide 6: 1-2. CJ Freshway - History
1-2. CJ Freshway - History Company overview CJ Freshway, founded in 1988, is leading domestic food material distribution market and catering business with largest infrastructure and more than 20 years of experience History 1988.10 Founded Samil agriculture & marine 1996.05 Incorporated into CJ Corp
Slide 7: 1-2. CJ Freshway – Business model
1-2. CJ Freshway – Business model Company overview Sales Contribution: FMD 84.6% FS14.5% Added manufacturing division by acquiring Songlim Food 4Q16 Ⅰ. Food material distribution(FMD) Ⅱ. Food service Ⅲ. Sauce/ seasoning Sourcing - COGS : food Sauce, dressing, Global Operating Manufacturer Producer P
Slide 8: 1-2. CJ Freshway Company overview
1-2. CJ Freshway Company overview Despite recent sluggish market condition, CJFW maintains its market dominance on the back of strong top-line growth. Effort to find working "Korean FMD model”, CJ FW spent years endeavoring fast changing market, often challenging through worst down-cycles. CJ Freshw
Slide 9: Food material Distribution(FMD)
Food material Distribution(FMD) 8
Slide 10: 2-1. Business environment
2-1. Business environment Domestic FMD market to grow at the rate of 3.1% annually till 2020, reaching W58tn in size. Strong growth from domestic restaurant industry to push its proportion up to 51% Vs. wholesale 34%, and FS(Food Service) 15% Korean food distribution market size & channel mix Market
Slide 11: 2-1. Business environment
2-1. Business environment Domestic FMD market is still at its early phase of industrialization. However, recently, market consolidation/industrialization process has accelerated as consumer demand sophisticates, industry shifts gears to cope with the changes. M/S trend of large corporations Breakdow
Slide 12: 2-1. Business environment
2-1. Business environment Residual income squeeze driven by weakening economy led eat-outers to be more prudent on their expenditures. To meet change in trend, restaurants soon turned to tighter budgeting which sparked fierce price competition between SMEs. GDP growth rate Service industry GDP growt
Slide 13: 2-2. Core competency
2-2. Core competency Market differentiation by core competency; 1) Global sourcing network, 2) SCM ability, 3) distribution channels, and 4) quality control infrastructure 1 2 SCM – largest logistics Sourcing Competitiveness - sourcing network Infrastructure Sourcing status Freshway(6) : domesti
Slide 14: 2-3. FreshOne Business
2-3. FreshOne Business One-stop service to cut out unnecessary distribution stages by expanding direct transactions (CJFW⇌B2B client), strengthening bargaining power through integration/consolidation of distribution channel → Result : simplified distribution structure & gain cost competitiveness. Bu
Slide 15: Food service (FS)
Food service (FS) 14
Slide 16: 3-1. Business environment
3-1. Business environment Food Service(FS) market to grow at the rate of 3.3% annually till 2020 to W16.0tn. Outsourcing market leading the growth. Domestic market size & channel mix Market share (Unit: W tn) [FY 2017] CAGR 3.3% ‘14~’20 16.0 CAGR Others 14.8 Hanwha 0.7% 13.1 13.4 12.7 6.1% 5.3 5.0%
Slide 17: 3-2. Core competency
3-2. Core competency CJ Freshway’s FS core competency lies with its customizable service, and indisputable top position in specialty areas. Remarkable new order momentum and competitive client retention rate yielded positive growth. Amount of new order 1) Differentiated capability and service Winnin
Slide 18: Sauce/ seasoning manufacture
Sauce/ seasoning manufacture 17
Slide 19: 4-1. Business environment
4-1. Business environment Songlim Food’s sales grew at CAGR of 20.4% in the recent 5 years Market growth driven by franchise restaurant and HMR market expansion Earnings trend Domestic sauce/ seasoning market (Unit: W bn) (Unit: W tn) 2.27 CAGR 9.7% Sales Whole market OP(OPm) Sum of Top 6 companies
Slide 20: 4-1. Business environment
4-1. Business environment Sauce/seasoning market growth driven by rising demand for HMR and related products, and development franchise restaurants Franchise brand/ store trend 1) HMR Market trend 2) # of franchisee # of FC brand Correlation(R2) 0.99 12~16 btw one person household 6.3 CAGR and HMR m
Slide 21: 4-2. Strategical Value
4-2. Strategical Value To add value to current business model with both captives & non-captives, and to build foothold in the new fast growing market Strategical Values [Major products] 1 Add value on current restaurant deals 2 Group synergy creation(ie. HMR sauce) [RTP* : Meal kit] 3 Sharing of cli
Slide 22: Global Business
Global Business 21
Slide 23: 5-1. Global outposts
5-1. Global outposts Recent expansion to China, Vietnam and the US market to add growth momentum mid/long-term. Collaboration between domestic and overseas market to provide regional expertise and synergy between outposts. Overseas entities ▶ China CJ Freshway Qingdao Co.(2012) USA, L.A /Food dist
Slide 24: 5-2. Global business structure
5-2. Global business structure Expansion strategy : Localization & utilization of global outposts Two-Track Mechanism Utilizing global sourcing capability to its full extent, Gained competitive edge over local competitors Global food material Overseas trade business Global Localization of food based
Slide 25: 5-3. Mid-long term strategy
5-3. Mid-long term strategy Expanding local distribution and purchase integration with overseas entities on the back of global sourcing competency and local partnership China USA Export to Korea and import core US-Asia No.1 Trade products & Wholesale Company Exports of raw material Merchandising
Slide 26: Investor Relations
Investor Relations E-mail : hl.ryu@cj.net Website : www.cjfreshway.com