Thai Union Group Public Company Limited · SET:TU

Thai Union Group Public — Q2 2014 Earnings Presentation

34 slides from Thai Union Group Public's earnings presentation, Aug 14, 2014

  1. Slide 1: 2Q14 Results Presentation

    2Q14 Results Presentation 14 August 2014

  2. 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

  3. Slide 3: Agenda

    Agenda 1. Company Overview 2. Key Highlights 3. 1H 2014 Financial Results 4. Business Outlook

  4. Slide 4: More than 35 Years of Seafood Processing Experience

    More than 35 Years of Seafood Processing Experience Acquired Acquired the Set up Invested in Founded Strategic Chicken of the Acquired Invested in remaining shares Chicken of the Pakfood Thai Union Partnership with Sea 4 fishing vessels Avanti Feeds of COSI Sea Frozen PCL Manufacturing Mitsubishi Co

  5. Slide 5: Group Structure

    Group Structure Thai Union Frozen Products TUF Associated Companies 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 TU

  6. Slide 6: Tuna and Shrimp Remain Our Core Business

    Tuna and Shrimp Remain Our Core Business Strategic Business 1H14 Product Range Brand THB 58,207 million Group  Canned tuna Tuna  Frozen tuna loin Shrimp and  Frozen shrimp 49% related  Shrimp feed business1 Sardine  Canned sardine & & Mackerel Mackerel  Canned and frozen Salmon 23% salmon 6% P

  7. Slide 7: Fully Integrated and Globally Diversified Supply Chain

    Fully Integrated and Globally Diversified Supply Chain Raw Material Acquisition Production Marketing Can & Label Fisheries Processing Canning Marketing Production Tuna • 7 own fishing vessels with capacity of • Empty can and • 8 locations in 7 countries • 8 Brands 39,000 tons per year printing facto

  8. Slide 8: Global Market Leading Brands

    Global Market Leading Brands • TUF’s portfolio includes Global Market Leading Brands the world’s leading canned and frozen #1 seafood companies, •#1 canned seafood brand in the UK, Ireland and the Netherlands which operate across numerous markets globally #1 •#1 canned seafood brands in France #1 •

  9. Slide 9: Increasing Branded Revenue Contribution

    Increasing Branded Revenue Contribution Sales Breakdown by Product 1H14 Sales Breakdown by Business 2013 1H14 THB 112,813 million THB 58,207 million 12% Other Brands Tuna 47% 49% Brand 9% 43% OEM 9% 57% Shrimp & 13% related 25% 23% business1 Sardine & Mackerel 6% 6% 4% 4% Salmon Branded business inc

  10. Slide 10: Higher Contribution from EU Markets

    Higher Contribution from EU Markets 2013 1H14 Middle Canada South Middle Asia 3% Asia Canada South East 3% 1% America East 3% 1% America 1% Australia 2% Australia 3% 1% 3% Africa Africa 3% 3% Japan Japan 7% 8% USA Domestic USA 40% 7% 41% Domestic 7% Europe Europe 30% 33% Total sales : THB 112,813 mi

  11. Slide 11: Share Capital Information

    Share Capital Information Stock Information Major Shareholders (As of 30 Jun 2014) Bloomberg/ Reuters TUF TB/ TUF.BK Chansiri Family 23.23% Share price (8 Aug 2014) : THB 66.75 Niruttinanon Family 7.49% Historical price : Mitsubishi Corporation 7.58% 52-week high THB 71.75 Thai NVDR Co., Ltd. 7.36%

  12. Slide 12: Recent Developments: 1st Sustainability Report

    Recent Developments: 1st Sustainability Report July 2014: An Official Launch of TUF's First Sustainability Report The report shares TUF's context of sustainability and highlights how we demonstrate our approach to engage with all relevant stakeholders and create sustainability in the communities whe

  13. Slide 13: Recent Developments: Further Innovation Drive

    Recent Developments: Further Innovation Drive July 2014: An Inauguration of a New R&D Laboratory in France Petit Navire inaugurated a new R&D lab with an investment cost of EURO 400,000 to accelerate innovation and grow MWB market shares as well as expand markets geographically in Europe. This new l

  14. Slide 14: Agenda

    Agenda 1. Company Overview 2. Key Highlights 3. 1H 2014 Financial Results 4. Business Outlook

  15. Slide 15: Key Highlights

    Key Highlights  Sales grew by 7.6% in 2Q14 from weaker THB (USD sales were flat YoY). Key growth drivers were the stronger sales of branded tuna, frozen shrimp (mainly the US trading operation) and value added & other products. Sales from the US and European markets showed strong growth YoY thanks

  16. Slide 16: Key Highlights

    Key Highlights  THB depreciation pushed 1H14 sales up by 10.7% YoY while USD sales grew by 2.1%. Key growth driver came from higher sales of tuna (+9.4%), frozen shrimp (+19.6%), pet food (+18.4%) and value added & other products (+21.1%). Tuna Branded tuna sales increased by 18.9% in 1H14 due main

  17. Slide 17: Key Figures: Continued Recovery with Strong 1H 2014 Performance

    Key Figures Continued on Recovery with Strong 1H 2014 Performance Financial Summary1 Reported 1H14 net profit (THB million) boosted by 139% YoY to Total Sales 1H14 1H13 58,207 52,560 +10.7% THB 2,471 million 1H14 9,043 Gross Profit Q1’12 Share price movement +46.8% 1H13 6,161 Q1’11 20132 20142 1H14

  18. Slide 18: 56% Payout For 1H 2014 Performance

    56% Payout For 1H 2014 Performance For the period: 1 Jan 14 to 30 Jun 14 DPS THB 1.20 XD 25 Aug 2014 Book closing date 28 Aug 2014 Payment date 10 Sep 2014 THB/Share 2.50 70% 60% 51% 56% 60% 53% 2.00 50% 50% 51% 51% 50% 50% 1.50 40% 29% 30% 1.00 20% 0.50 10% 0.00 0% 2005 2006 2007 2008 2009 2010 201

  19. Slide 19: Agenda

    Agenda 1. Company Overview 2. Key Highlights 3. 1H 2014 Financial Results 4. Business Outlook

  20. Slide 20: 6 Strategic Business Units of TUF

    6 Strategic Business Units of TUF 1H 2014 Sales breakdown THB 58,207 million 1 Tuna 2 Shrimp and 41% related business1 3 4 5 6 Frozen Sardine & Salmon Pet Food Value-added and OEM Mackerel other products2 shrimp Shrimp feed 59% 77% Brand 85% 33% 46% 99% 23% - 100% 67% 54% 1% 15% % Sales 49% 21% 2% 6

  21. Slide 21: Strong Earnings Recovery in 2Q14 Despite Limited Sales Growth

    Strong Earnings Recovery in 2Q14 Despite Limited Sales Growth… Continued Sequential Improvement Helped by Raw Material Cost Unit: THB million Total sales Gross Profit Margin Net Profit Margin 17.2% 16.9% 16.1% 15.7% 12.9% 14.9% 13.9% 30,788 12.4% 30,258 11.6% 29,464 10.9% 28,327 28,119 27,948 26,758

  22. Slide 22: YoY Sales Growth Driven by THB Depreciation

    YoY Sales Growth Driven by THB Depreciation Quarterly sales (THB million and USD million) +7.6% YoY +8.3% QoQ 29,464 30,788 30,258 THB million 28,119 27,948 Value-added & other products2 Pet food Salmon Sardine & Mackerel Shrimp & related business1 Tuna 2Q13 3Q13 4Q13 1Q14 2Q14 USD million 935 936 9

  23. Slide 23: GPM Expansion YoY from Branded Tuna & Frozen Shrimp

    GPM Expansion YoY from Branded Tuna & Frozen Shrimp Quarterly GP and GPM (THB million) +39.7% YoY 16.1% 14.9% Gross profit 13.9% margin (%) 12.9% +17.5% QoQ 12.4% 4,885 4,085 3,976 4,158 3,496 2Q13 3Q13 4Q13 1Q14 2Q14 • 2Q14 GPM significantly improved YoY to 16.1% due mainly to higher GPM of branded

  24. Slide 24: Improving EBITDA margin thanks to Higher GPM and FX Gain

    Improving EBITDA margin thanks to Higher GPM and FX Gain Quarterly EBITDA and EBITDA margin (THB million) +109.2% YoY 10.1% EBITDA margin (%) 8.9% 8.2% +23.6% QoQ 7.3% 3,061 2,476 2,413 5.2% 2,260 1,463 2Q13 3Q13 4Q13 1Q14 2Q14 • 2Q14 EBITDA significantly increased by 109.2% YoY due mainly to higher

  25. Slide 25: Improving Earnings

    Improving Earnings Quarterly NP and NPM Quarterly Normalized NP and NPM (THB million) (THB million) +323.9 % YoY +371.8% YoY +60.3% QoQ 5.6% 5.0% +67.1% QoQ Normalized Net profit 3.4% 3.6% 3.4% Net profit margin (%) 1,694 1,522 margin (%) 2.6% 1,004 950 1,014 1.3% 815 1.3% 359 359 2Q13 3Q13 4Q13 1Q1

  26. Slide 26: Improved Margin, Better Inventory Management and Reduced CAPEX Keeps Free Cash Flow Positive

    Improved Margin, Better Inventory Management and Reduced CAPEX Keeps Free Cash Flow Positive in 2Q14 and 1H14 Inventories (THB million) Free Cash Flow Inventories Inventory Turnover (x) Inventory Days FCF 4,153 138 36,917 36,181 2,174 2,396 135 817 34,637 34,464 33,885 -166 33,547 125 126 123 121 Da

  27. Slide 27: Improving Profitability & Inventory Turnover with Low Gearing

    Improving Profitability & Inventory Turnover with Low Gearing ROE1 ROA2 A/R Days 8.8% 15.0% 42 43 7.1% 6.9% 41 41 6.3% 38 10.7% 9.5% 8.4% 3.7% 3.9% 2Q13 3Q13 4Q13 1Q14 2Q14 2Q13 3Q13 4Q13 1Q14 2Q14 2Q13 3Q13 4Q13 1Q14 2Q14 Inventory Days Gearing Ratio3 ND/E Ratio4 (Times) (Times) 135 1.50x 0.97x 125

  28. Slide 28: 1H14 Financial Position Summary

    1H14 Financial Position Summary Sales Margin Gross Profit Products (THB million) (%) (THB million) Tuna 28,248 x 17.0% 4,810 Shrimp & related 13,366 x 10.7% 1,435 Gross Profit business1 Sardine & x THB 9,043 million 3,269 17.5% 573 Mackerel Salmon 2,193 x 15.5% 340 Pet food 4,466 x 14.4% 642 Value-a

  29. Slide 29: 2Q14 Income Statement

    2Q14 Income Statement Consolidated 2Q14/ 2Q14/ (Million baht) 2Q14 % to sales 2Q13 % to sales 1Q14 % to sales 2Q13 1Q13 Change Change Sales 30,258 100.0% 28,119 100.0% 27,948 100.0% 7.6% 8.3% Cost of sales (25,373) -83.9% (24,623) -87.6% (23,791) -85.1% 3.0% 6.7% Gross profit 4,885 16.1% 3,496 12.4%

  30. Slide 30: 1H14 Income Statement

    1H14 Income Statement Consolidated 1H14/ 1H13 (Million baht) 1H14 % to sales 1H13 % to sales Change Sales 58,207 100.0% 52,560 100.0% 10.7% Cost of sales (49,164) -84.5% (46,399) -88.3% 6.0% Gross profit 9,043 15.5% 6,161 11.7% 46.8% SG&A expenses (5,563) -9.6% (4,780) -9.1% 16.4% FX gain (loss) 395

  31. Slide 31: Statement of Financial Position (30 Jun 2014)

    Statement of Financial Position (30 Jun 2014) Consolidated % to total % to total (Million baht) 2Q14 2013 Change assets assets Cash and cash equivalents* 8,385 7.6% 3,214 3.0% 160.9% Trade and other receivables 14,859 13.4% 13,948 12.9% 6.5% Inventories - net 33,885 30.6% 36,917 34.1% -8.2% Other cu

  32. Slide 32: Agenda

    Agenda 1. Company Overview 2. Key Highlights 3. 1H 2014 Financial Results 4. Business Outlook

  33. Slide 33: Business Outlook

    Business Outlook Tuna • Branded sales volume should gradually improve thanks to leading market position as well as well-planned sales promotions. New market expansion will support OEM business growth in the longer term. • OEM GPM expansion ties to timely price adjustment and higher orders. Branded G

  34. Slide 34: THANK YOU

    THANK YOU TUF Investor Relations 979/12 M Floor, S.M. Tower, Phaholyothin Road, Phayathai, Bangkok 10400 Thailand Tel: +66 2298 0024; Fax: +66 2298 0342 E-mail: ir@thaiunion.co.th Corporate website: http://www.thaiuniongroup.com IR website: http://www.thaiuniongroup.com/investor

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