Thai Union Group Public Company Limited · SET:TU
Thai Union Group Public — Thai Union Frozen Products — 1H09 Earnings Presentation
25 slides from Thai Union Group Public's earnings presentation, Aug 3, 2009
Slide 1: Thai Union Frozen Products 2009 Mid-Year Analysts Meeting
Thai Union Frozen Products 2009 Mid-Year Analysts Meeting Bangkok August 3, 2009
Slide 2: 1H09: Challenging Business Environment
1H09: Challenging Business Environment 1. Continual pressure on selling prices due to uncertain economic prospect and generally lower commodity prices 2. Volatile Thai baht exchange rate and strengthening since April 3. Thai seafood exports generally declined in 1H09 from the same period last year E
Slide 3: But, Record-Breaking 1H09 & 2Q09
But, Record-Breaking 1H09 & 2Q09 2Q09 1H09 What happened? YoY dollar sales growth -4.2% 0% Sustainable demand in most products YoY baht sales growth +2.4% +8.2% Thanks to a weaker baht, relative to last year Gross / operating margins 16.2% / 7.3% 14.1% / 5.8% Strong recovery in 2Q09 thanks to good c
Slide 4: Q2'09: Higher Margins + No FX loss = Record
Q2’09: Higher Margins + No FX loss = Record Btm 2Q09 2Q08 YoY 1Q09 QoQ Sales 17,195 16,792 +2.4% 17,666 -2.7% Sales in US dollar term 497 518 -4.1% 499 -0.4% Gross Profit 2,778 2,244 +23.8% 2,137 +30.0% %sales 16.2% 13.4% 12.1% Shutdown Expenses (US$4.6m) 160 - - %sales 0.9% - - Operating Profit 1,2
Slide 5: 1H09: Higher Margins + Stable SG&A = Record
1H09: Higher Margins + Stable SG&A = Record Btm 1H09 1H08 YoY Sales 34.861 32,208 +8.2% Sales in US dollar term 996 996 0% Gross Profit 4,914 3,837 +28.1% %sales 14.1% 11.9% Shutdown Expenses (US$4.6m) 160 - %sales 0.5% - Operating Profit 2,021 1,230 +64.3% %sales 5.8% 3.8% Add: FX Gain (Loss) 164 1
Slide 6: Improving Margins and Record EBITDA in Q2'09
Improving Margins and Record EBITDA in Q209 2Q09 2Q09 1Q09 1Q09 4Q08 4Q08 3Q08 3Q08 2Q08 2Q08 1Q08 1Q08 Bt m US$ m Bt m US$ m Bt m US$ Bt m US$ m Bt m US$ m Bt m US$ m Sales 17,195 497 17,666 499 18,410 528 18,431 545 16,792 518 15,416 478 EBITDA 1,642 47 1,254 35 753 22 1,476 44 931 29 1,086 34 Dep
Slide 7: Improving ROA and ROE Despite Decreasing Financial Leverage
Improving ROA and ROE Despite Decreasing Financial Leverage 2Q09 1Q09 1H09 2008 2007 A/R Turnover (days) 37 37 36 36 38 Inventory Turnover (days) 103 104 106 105 105 Gearing Ratio* 1.1x 1.2x 1.1x 1.5x 1.3x D/E Ratio** 0.7x 0.9x 0.7x 1.1x 1.0x ROAE (annualized) 25.2% 17.8% 21.6% 16.0% 14.2% ROAA (EBI
Slide 8: 1H09 Sales Own Brands vs. OEM & Sales from Thai Operations
1H09 Sales Own Brands vs. OEM & Sales from Thai Operations Own Brand vs. Contract Manufacturing Sales from Thai Operations Alone (OEM + Domestic Sales) Overseas Subs. 46% Contract Manufacturing for Export (OEM) (own brands) Europe Africa 0% 43% 26% 12% USA 8% South America 44% Middle East 1% 4% Cana
Slide 9: Sustainable Demand
Sustainable Demand - Sales Growth From Most Products 1H09 Consolidated Sales by Product • Group sales growth flat YoY Shrimp Feed Canned 5% Seafood Cephalopod 3% 9% Sardine / • Tuna sales - 8.0% Canned Mackerel 5% • Shrimp sales + 2.3% Petfood 9% • Pet food sales + 5.0% • Other seafood sales + 13.9%
Slide 10: Sales Growth In Most Key Markets
Sales Growth In Most Key Markets - But fickle demand in smaller markets 1H09 Consolidated Sales by Market • US - 1.3% YoY • Domestic + 2.5% Europe Oceania Middle East Asia 3% 2% 14% • EU + 8.4% Africa (ex-Japan) 2% 7% USA • Africa + 10.1% 50% Japan • Japan + 21.5% 11% Domestic sales 10% • Asia (ex-J
Slide 11: Thai Baht Strengthening Since May
Thai Baht Strengthening Since May -About 90% of the group’s revenues and 65% of the group’s costs are in US$ in 1H09. We manage to keep the cost structure (US vs. Thai baht) steady over time -Given the cost structure of our Thailand operations, weaker Thai baht would normally benefit us. But active
Slide 12: Tuna Prices Rebounding Since April
Tuna Prices Rebounding Since April Skipjack Tuna Prices (WPO & EPO) USD / MT 2500 2000 1500 WPO price 1000 EPO price 500 0 3 4 5 6 7 8 9 Ja ct Ja ct Ja ct Ja t Ja ct Ja ct l l l l l l l r pr pr pr r pr pr Ju Ju Ju Ju Ju Ju Ju c Ap Ap '0 '0 '0 '0 '0 '0 '0 O O O O O O A A A A A n n n n n n n Ja • Curr
Slide 13: Shrimp Prices Fell Upon Harvest Season
Shrimp Prices Fell Upon Harvest Season THB / KG White Shrimp Price (60 counts/ kg) 200 180 160 140 120 100 80 60 40 20 0 Ja '03 4 5 6 7 8 9 l l l l l l pr r pr r pr pr n t n t n t n t n t Ju Ju Ju Ju Ju Ju Ja Oc Ja Oc Ja Oc Ja Oc Ja Oc p p '0 '0 '0 '0 '0 '0 A A A A A A n ct O Current shrimp prices:
Slide 14: Less Inventory and Debts while Record EBITDA and Free Cash Flow in Q2'09
Less Inventory and Debts while Record EBITDA and Free Cash Flow in Q2’09 • Lower raw material prices and active inventory management at COSI cutting short term debts Cash cycle fell marginally to 122 days as the inventory turnover improved slightly to 103 days thanks to a lower level of inventory (p
Slide 15: Update on COSFF & Empress
Update on COSFF & Empress •Empress International Though Q2’09 remained a challenging period when the food-catering business (the biggest buyer of shrimp) was still hard hit by the economic slowdown in the US. The worst should be over as quarterly sales almost recovered to last year’s level, though p
Slide 16: Shared Management@COSFF & Empress
Shared Management@COSFF & Empress •Since July, 2009, the top management at COSFF and Empress has been merged •Bryan Rosenberg, the current president of Tri-Union Frozen Foods Products, LLC (Chicken of the Sea Frozen Foods), will also assume the position of the president of Empress International Ltd.
Slide 17: Update on COSI
Update on COSI •Chicken of the Sea International (COSI) -Q2’09 has been again another good quarter for COSI -Canned tuna sales continued to grow, though at a slower rate (3%) than Q1’09 and sales from other canned seafood. But, lower raw material costs, compared with last year, helped boost the prof
Slide 18: Shutdown Expenses Schedule
Shutdown Expenses Schedule 1. Shutdown expenses for the relocation project worth US$ 4.57 m has been booked in Q2’09. The majority of these expenses are non-cash this time. 2. It is originally expected that the remaining US$ 11.83 m of shutdown expenses (based on the initially estimated total of US$
Slide 19: Outlook for the Rest of 2009
Outlook for the Rest of 2009 1. Target annual dollar sales growth at 5%. 2. Despite the global recession, demand for most of our products through 1H09 is quite sustainable given their affordability and nutritional benefits. Demand should pick up slightly in 2H09, thanks to the typical high season. 3
Slide 20: Strategy For the Rest of 2009
Strategy For the Rest of 2009 1. Actively integrate operations between COSI and Thai plants in order to realize cost-savings and strengthen our supply chain ASAP 2. Maintain tight cost and inventory controls and improve plant efficiency to lower per unit cost in order to sustain or even improve marg
Slide 21: Interim Dividend for 1H09
Interim Dividend for 1H09 -XD & payment dates within August, 2009 -At least 50% of the half year operating result -21-
Slide 22: William B. Darden Supplier Award
William B. Darden Supplier Award •TUF won the William B. Darden Supplier Award in June, 2009 •Through past 14 years of cooperation, TUF has won 9 awards in different categories, but this one is the most important and prestigious. •Only 11 out of over 1,500 global suppliers won the award this year an
Slide 23: TUF in FinanceAsia's 2009 Best Managed Companies Poll
TUF in FinanceAsia’s 2009 Best Managed Companies Poll •TUF is again among one of the Overall Best Managed Companies in Thailand in FinanceAsia’s latest Best Managed Companies Poll (May 2009 issue) •Besides, the firm is also voted in other categories: -Best Mid-Cap -Best Corporate Governance, and -Mo
Slide 24: Products for Tasting: RTE Wonton Soup / Finger Food / Sushi
Products for Tasting: RTE Wonton Soup / Finger Food / Sushi -24-
Slide 25: Q&A
Q&A
Thai Union Frozen Products — 1H09 Earnings Presentation on 6ix