Slide 1: Investor Relations
CJ rs FRESHWAY INVESTOR RELATIONS
Slide 2: Index
Index Contents Page 1. Company overview 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. FMD core competency 12 2-3. Advanced business model 13 3. Catering Service 14 3-1. Business environment 15 3-2. FS core competency 16~17 4. Global Busine
Slide 3: 1-1. CJ Group Company overview
1-1. CJ Group Company overview CJ group is one of the largest conglomerate in Korea(annual revenue of W24tn in 2016), 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). Four core business divisi
Slide 4: CJ food & food service 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. Food & Food Service value chain model Wholesaler/ Hotel Seeds Producer
Slide 5: 1-2. CJ Freshway Company overview: shareholding
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: CJ Freshway history
1-2. CJ Freshway 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. 1 Founded Samil agriculture & marine 1996. 5 Incorporated into CJ Corp (ex-CJCJ)
Slide 7: Two main businesses and sales breakdown
1-2. CJ Freshway Company overview Comprised of two main businesses, Food material distribution(FMD) and Food service(FS), make-up majority of its sales and has shown strong growth. Business model ① Food Material distribution ② Food Service Catering Office Manufacturer Franchise Factories Producer Re
Slide 8: CJ Freshway earnings and revenue comparison
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 conditions, often challenging through worst down-cycles
Slide 9: Food material Distribution
Food material Distribution 8
Slide 10: 2-1. Business environment
2-1. Business environment Domestic FMD(food material distribution) 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 mark
Slide 11: 2-1. Business environment
2-1. Business environment Domestic FMD market is still at its early phase of industrialization. However, recently, market is accelerating its industrialization/corporatization process as government policy and industry demand trend changes require stricter system. M/S trend of large corporations Brea
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 gr
Slide 13: 2-2. FMD Core competency
2-2. FMD Core competency Market differentiation by core competency; 1) Global sourcing network, 2) SCM ability, 3) distribution channels, and 4) quality control infrastructure 1 Sourcing Competitiveness 2 SCM – largest logistics Infrastructure Sourcing Status Freshway(6) : Domestic W2.1tn(90%),
Slide 14: 2-3. Advanced business model
2-3. Advanced business model 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 competitivene
Slide 15: Catering Service
Catering Service 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 catering market size & channel mix M/S [FY 2016] CAGR 3.3% others 14~20 Hanhwa 16.0 CAGR 7.2% 5.9% 14.8 Shinsege Wellstory 13.4 12.7 13.1 food
Slide 17: 3-2. FS core competency
3-2. FS core competency CJ Freshway’s expansion lies with its customizable service, and indisputable top position in specialty areas. Growth Profit Margin/rate of COGS Differentiated capability and service COGS(%) GPM(%) 11 Hospital channel – menu expertise for the patients Customized menu to acco
Slide 18: 3-2. FS core competency
3-2. FS core competency Remarkable new order momentum and competitive contract renewal rate resulted positive growth. Amount of new order 1) Contract renewal rate(%) (W100mil) Amount M/S(%) 100 90.8% 50 2011 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Amount of new order exceed W50bn(expecte
Slide 19: Global Business
Global Business 18
Slide 20: 4-1. Global outposts
4-1. 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 of CJ Freshway ▶ China CJ Freshway Qingdao Co.(2012) USA,
Slide 21: 4-2. Global business structure
4-2. 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 Fresh
Slide 22: 4-3. Current tasks
4-3. Current tasks Expansion fueled by strengthening global sourcing & local distribution Developing new local sales channel and global packer network China Vietnam USA “Local distribution business “Triangle-trade network based “No. 1 Trade Company Goal based on YH captive channel” on global sourcin
Slide 23: Investor Relations
Investor Relations E-mail: hl.ryu@cj.net suri.lim@cj.net Website: www.cjfreshway.com