Thai Union Group Public Company Limited · SET:TU
Thai Union Group Public — Thai Union Group PCL — Q1 2024 Earnings Presentation
43 slides from Thai Union Group Public's earnings presentation, May 9, 2024
Slide 1: 1Q 24 Analyst Meeting
1Q 24 Analyst Meeting Thai Union Group PCL. May 9, 2024 1Q 24 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: 1Q 24 Key highlights and key developments
1Q 24 Key highlights and key developments 1Q 24 1Q 24 Analyst Meeting Analyst Investor Relations Meeting Department
Slide 4: CEO statement on recovery and Strategy 2030
“1Q 24 demonstrated promising signs of recoveries across all Thai Union’s core businesses. I am confident that the launch of Strategy 2030 in this year will position us for sustained, long-term growth, underscoring our purpose of “Healthy Living, Healthy Oceans”.” Thiraphong Chansiri President and C
Slide 5: All the KPIs are improving, especially profitability
All the KPIs are improving, especially profitability KPI are strongly recovering 1Q 24 sales rose by 1.7% YoY to Financial Summary 1Q 23 1Q 24 (THB mn) THB 33,220 mn +1.7% YoY 33,220 32,652 +16.8% YoY Share price movement* 5,742 2023 YTD 2024 (Jan – Dec 23) (Jan – May 8, 24) 4,917 +30.1% YoY -10.7%
Slide 6: 1Q 24 overall performance grew YoY
1Q 24: Overall performance grew YoY, thanks to the recovery of all business categories along with escalated GPM Sales Gross Profit Operating Profit Net Profit* 33,220 5,742 1,537 1,153 THB mn THB mn THB mn THB mn 17.3% 4.6% 3.5% GPM OPM NPM +1.7% YoY +16.8% YoY +93.1% YoY +53.9% YoY -6.5%
Slide 7: 1Q 24 net profit bridge
1Q 24 net profit: higher operating profit of THB 741mn is the key driver to higher net profit, compared to the adjusted net profit in last year Bridge Net Profit (THB mn) +12.9% YoY +53.9% YoY -115 -118 -118 1,153 1,022 +741 +13 -20 -253 749 1Q 23 Red Lobster Red Lobster 1Q 23 Operating Higher Tax e
Slide 8: Third share buyback program
We are executing our third share buyback program, aiming to provide confidence to shareholders, to manage our liquidities and to uplift the EPS growth Net profit and earnings per share (EPS) 3rd share buyback program summary Announcement date : 16 January 2024 +18.0% YoY Repurchase date : 20 Februar
Slide 9: JCR upgraded TU rating to A with stable outlook
JCR upgraded TU rating to “A” with a stable outlook About JCR The Japan Credit Rating (JCR), established in 1985, is a Japanese financial services company, which publishes credit ratings to Japanese companies, local governments, and other interested parties. JCR raised Thai Union’s foreign currency
Slide 10: New product launches to encourage sales growth
New product launches to encourage sales growth Introducing Petit Navire novelty products Delivering Frozen innovative products - Single Portion Tuna with Extra Virgin Olive Oil and Tuna with Value-added seafood products, especially shrimp and salmon, to Sunflower Oil. support OEM customers across al
Slide 11: Recognized by leading institutions around the world
We continue to be recognized for our efforts by leading institutions around the world Thai Union wins 2 Prestigious Awards at The Triple A Triple A Treasurise Awards 2024 Sustainable Finance Awards 2024 from The Asset magazine TU won two awards “Best Issuer Tri-Union Frozen Product has been for Sust
Slide 12: Commitment to Healthy Living, Healthy Oceans
With a commitment to “Healthy Living, Healthy Oceans” TU announced a pioneering Thai Union launched a new initiative to partnership with Chow Energy decarbonize Thai shrimp supply chain TU has launched an innovative TU signed a MOU; the collaboration will see the installation of over 30 program to s
Slide 13: 1Q 24 Financial performance
1Q 24 Financial performance 1Q 24 1Q 24 Analyst Meeting Analyst Investor Relations Meeting Department
Slide 14: CFO statement on 1Q 24 performance
“1Q 24 exhibited significant performance improvement. Our top line has returned to growth, driven by robust results in Ambient, PetCare, and Value-added categories, together with recovering profit margin and rising EPS, underscoring strategic initiatives’ effectiveness.” Ludovic Garnier Group CFO 1Q
Slide 15: 1Q 24 key takeaways
1Q 24 key takeaways: Strong operating profit growth YoY, driven by the increase in GPM in Frozen, PetCare and Value-added categories, leading to net profit upside Growing sales, supported by all 3 core categories; Ambient, PetCare and Value-added Sales grew by 1.7% YoY, benefitted from the depreciat
Slide 16: Disposal of 20% investment in LDH
Disposal of our 20% minority investment in LDH, associated company in the UK About LDH LDH (La Doria) Limited (LDH) is a leading food distributor in the UK since 1950, which Thai Union made a minority investment since 2006. They manage Thai Union tuna OEM products distribution in the UK with a focus
Slide 17: Growth returns: sales, GPM and net profit
Growth returns: sales, GPM and net profit back to growth 19.0% 18.2% 18.2% 18.0% 18.0% 18.2% 18.2% 18.4% 17.7% 17.5% 16.9% 17.8% 16.9% 17.3% 17.3% 16.2% 15.1% GPM 6.5% 6.2% 5.9% 5.8% 5.4% 5.2% 5.0% 4.8% 4.4% 4.2% 3.3% 3.1% 3.1% 3.0% 3.6% 3.5%* 3.5% NPM 38,501 38,946 40,756 39,613 35,883 35,539 36,27
Slide 18: Thai Baht depreciated against key currencies YoY
Thai Baht remained depreciated against all key currencies YoY USD/THB Quarterly avg. EUR/THB Quarterly avg. Avg. in 1Q 24: 1 USD / 35.66 THB (+5.2% YoY, +0.0% QoQ) Monthly avg. Avg. in 1Q 24: 1 EUR / 38.71 THB (+6.4% YoY, +1.0% QoQ) Monthly avg. Avg. in Apr 24: 1 USD / 36.79 THB Apr 24 3Q 22 4Q 22 A
Slide 19: Fish prices fell sharply while shrimp price rose
Fish prices experienced a sharp fall of around USD 700/ton during the past 3 quarters, while shrimp price continued to rise QoQ Tuna (Skipjack; USD/ton) Quarterly avg. Shrimp (60pcs/kg; THB/kg) Quarterly avg. Monthly avg. Monthly avg. 2Q 23 1Q 22 2,000 182 1Q 23 3Q 23 1Q 23 1,820 1,800 168 1Q 22 3Q
Slide 20: Net Debt/EBITDA improved; Net Debt/Equity solid
Net Debt/EBITDA improved primarily from an increase in EBITDA, while Net Debt/Equity remained solid and well below a comfort level ROE* Inventory Days Net Debt to EBITDA* 170 164 162 145 155 Target 9.4% 9.0% 4.71x 8.1% 4.34x 3.5 - 4.0x 7.1% 7.3% 4.07x 53,632 52,948 52,766 50,482 48,577 4.19x 4.02x 1
Slide 21: Net debt at THB 52,601mn, ND/E 0.82x
1Q 24: Net debt at THB 52,601mn with healthy Net Debt/ Equity (ND/E) at 0.82x, increasing from Dec 23 from the investing activities ND/E 0.78x Income tax paid and ND/E 0.82x Free Cash Flow THB +814mn Kd* = 3.59% other investing & financing activities Kd* = 3.77% (THB mn) 52,601 +665 51,538 +58 -50 +
Slide 22: Well-managed debt portfolio with high fixed-rate portion
Well-managed debt portfolio by ensuring high portion of fixed-rate debts (THB mn) By Currency By Maturity By Interest Rate 67,988 66,327 67,988 66,327 7.5% 7.7% 12.6% 0.3% 0.6% 14.4% 17.9% 18.3% 11.2% 6.1% THB 12.6bn bonds, Float classified in short- 23.6% term as of 4Q 23 for 18.5% which we obtaine
Slide 23: 1Q 24 Business performance
1Q 24 Business performance 1Q 24 1Q 24 Analyst Meeting Analyst Investor Relations Meeting Department
Slide 24: Ambient showing all-time high sales contribution
Ambient showing the all-time high sales contribution Total 1Q 24 sales: THB 33,220mn Ambient Frozen PetCare Value-added THB 17,156mn THB 9,618mn THB 3,955mn THB 2,490mn 51.6% (46.6% LY) 29.0% (35.8% LY) 11.9% (10.7% LY) 7.5% (6.9% LY) Sales breakdown by channel (THB mn) 1Q 23 55.6% 44.4% 15,225 38.9
Slide 25: Ambient: regaining topline momentum
1Q 24 Ambient: regaining topline momentum, despite temporary drop in GPM explained by falling tuna prices over past 3 quarters Sales (THB mn) and GPM (%) 19.9% 20.4% • 1Q 24 Ambient sales increased by 12.7% YoY, mainly driven by 18.0% 17.4% higher demand across all regions, especially in Middle East
Slide 26: Sharp drop in Tuna price pressuring Ambient GPM
Sharp drop in Tuna price, temporarily pressuring the Ambient GPM 22.4% 23.3% 22.7% 21.7% 22.9% 21.5% 20.2%22.0% 21.2% 19.9% 20.4% 18.4% 19.6% 17.7% 17.1% 16.9% 17.6% 18.9% 18.6% 19.4% 17.4% 16.6% 20.1% 20.7% 19.5% 16.5% 16.7% 18.0% 18.7% 18.0% 15.6% 14.0% 14.0% ~USD 700 drop Peak at in 3 quarters 3Q
Slide 27: Frozen: topline challenging, GPM improved
1Q 24 Frozen: topline remained challenging due to soft demand in key markets and US Frozen rationalization, but GPM improved as planned Sales (THB mn) and GPM (%) 12.9% 14.4% • 1Q 24 Frozen sales decreased by 17.7% YoY, largely from soft 11.8% 7.9% 9.6% demand in the U.S. market, particularly shrimp
Slide 28: PetCare: exceptional 25.7% GPM
1Q 24 PetCare: delivered exceptional 25.7% GPM thanks to higher premium mix and the adjustment price strategy, and lower overhead cost Sales (THB mn) and GPM (%) 25.7% 23.4% • 1Q 24 PetCare sales increased by 13.2% YoY, driven by higher 18.0% 20.2% 19.4% sales from premium mix, price adjustment stra
Slide 29: Value-added: record-high GPM
1Q 24 Value-added: record-high GPM, mainly thanks to the recovery of Packaging business Sales (THB mn) and GPM (%) 27.3% 28.9% 29.5% • 1Q 24 Value-added sales increased by 10.8% YoY, mainly driven 25.7% 26.2% by higher sales from Value-added and Ingredient businesses as well as improved mixed produc
Slide 30: Outlook
Outlook 1Q 24 1Q 24 Analyst Meeting Analyst Investor Relations Meeting Department
Slide 31: 2024 guidance confirmed
2024 guidance: We confirm our full-year guidelines Sales 3 - 4% YoY Growth Gross profit margin ~ 17.0 - 18.0% SG&A to sales ~ 11.0 - 12.0% Effective interest rate Increase 0 - 0.5% CAPEX ~ THB 4.0 - 4.5bn At least 50% dividend Dividend policy payout ratio Remark: Under FX rate assumption rate of 33.
Slide 32: Q&A
Q&A Q&A 1Q 24 1Q 24 Analyst Meeting Analyst Investor Relations Meeting Department
Slide 33: Appendix
Appendix 1Q 24 1Q 24 Analyst Meeting Analyst Investor Relations Meeting Department
Slide 34: Share capital information
Share capital information Stock Performance at a Glance Major Shareholders As of March 4, 2024 Bloomberg / Reuters TU TB / TU.BK Chansiri Family 19.5% Share price (May 8, 2024) THB 14.90 Historical closing price Thai NVDR Others 7.5% 52-week high THB 16.10 49.7% Niruttinanon Family 52-week low THB 1
Slide 35: Five major CAPEX projects
Five major CAPEX projects Ambient category PetCare category Value-added category Ambient tuna business PetCare business ASRS warehouse Culinary business Ingredients business Key Ambient tuna Wet pet food Automation Storage & Ready-to-eat, Protein hydrolysate Products cold storage and treat Retrieval
Slide 36: Geographic diversity: 1Q 24 sales
Geographic diversity: 1Q 24 Sales United States and Canada Europe 39% 29% Pacific Ocean Pacific Ocean Atlantic Ocean Others Thailand 21% Indian Ocean (Asia, Australia, Middle East, Africa, and 11% South America) 1Q 24 Analyst Meeting 36 Investor Relations Department
Slide 37: Sales breakdown by geographic / by business
Sales breakdown by geographic / by business Sales breakdown by Geographic Sales breakdown by Business 12.3% 11.8% 13.4% 12.2% 15.1% Others* 5.3% 5.1% 5.8% 6.0% 5.9% Japan 10.0% 10.3% 10.5% 11.5% Brand 10.9% Thailand Brand 37.0% 35.0% 29.0% 28.3% 26.3% 29.6% 29.6% Europe Private 1Q 23 1Q 24 Private L
Slide 38: The U.S. & Canada: sales drop
The U.S. & Canada: Sales dramatically drop, mainly from soft demand and the U.S. Frozen rightsizing strategy -8.8% YoY -13.5% QoQ 14,071 14,822 13,775 12,699 12,826 Sales 1Q 23 2Q 23 3Q 23 4Q 23 1Q 24 1Q 24 North America sales decreased 8.8% YoY • Sales dropped mainly from soft demand, mostly in shr
Slide 39: Europe: sales increased across all regions
Europe: Sales increased across all regions +15.0% YoY -8.2% QoQ 11,118 10,692 9,937 9,819 8,542 Sales 1Q 23 2Q 23 3Q 23 4Q 23 1Q 24 1Q 24 Europe sales rose significantly by 15.0% YoY • Europe sales increased significantly across all regions, mainly driven by o France: NSV grows mostly in Ambient Tun
Slide 40: Thailand: sales dropped
Thailand: Sales dropped from OEM Ambient Tuna and shrimp -4.2% YoY -4.1% QoQ 4,166 3,956 3,783 3,779 3,624 Sales 1Q 23 2Q 23 3Q 23 4Q 23 1Q 24 1Q 24 Thailand sales decreased by 4.2% YoY • A drop in domestic sales was driven by OEM, mainly from Ambient Tuna and Frozen Shrimp. These were partially off
Slide 41: Emerging Markets and rest of world sales improved
Emerging Markets (EM) and the rest of the world: Sales impressively improved, largely due to recovery demand in Middle East +11.1% YoY +11.5% QoQ 6,951 6,256 6,075 6,247 6,236 Sales 1Q 23 2Q 23 3Q 23 4Q 23 1Q 24 1Q 24 ME and rest world sales increased by 11.1% YoY • Sales increased significantly fro
Slide 42: 1Q 24 Category profitability
1Q 24 Category profitability (Sales, GPM, GP) Business Category Sales Margin Gross Profit THB mn % THB mn Ambient seafood • Tuna 17,156 16.6% 2,855 • Sardine and mackerel (1Q 23: 15,225) (1Q 23: 18.0%) (1Q 23: 2,747) • Ambient and pouched salmon Frozen and chilled seafood • Shrimp and related* 9,618
Slide 43: Freight prices stay below COVID level
Freight prices continue to stay below the COVID level, despite the rebound during the past 2 quarters Logistics: freight prices continue to increase in 1Q 24, but down in April 24 Freight cost (USD) Ocean transit time (days) • Freight prices slightly declined in April 24 after rebounding from Thaila