Thai Union Group Public Company Limited · SET:TU
Thai Union Group Public — Q3 2015 Earnings Presentation
41 slides from Thai Union Group Public's earnings presentation, Nov 11, 2015
Slide 1: 3Q15 Result Presentation
3Q15 Result Presentation 11 November 2015 Page 0
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: Agenda
Agenda Company Overview Recent Developments Key Highlights 3Q15 Financial Results Page 2
Slide 4: Agenda: Company Overview
Agenda Company Overview Recent Developments Key Highlights 3Q15 Financial Results Page 3
Slide 5: More than 38 years of seafood processing experience
More than 38 years of seafood processing experience Strategic Acquired third Expanded to Set up pet Founded Expanded to Entered to Expanded to Expanded partnership largest canned shrimp feed food Thai Union frozen seafood tuna fishing in shrimp farming capacity of with Mitsubishi seafood brand busin
Slide 6: Group Structure
Group Structure Thai Union Frozen Products Frozen & canned seafood, pet food, snack and ready-to-eat meals Core Branded Business OEM Business Business 100.00% THAI UNION HATCHERY (TUH) 90.50%* 98.00% 51.00%*** 94.44% Supporting TMK FARM CO., LTD. (TMK) Business 75.00% ASIAN PACIFIC CAN THAI UNION GR
Slide 7: Stable sales contribution by product category
Stable sales contribution by product category Higher contribution from salmon shrimp & related business and value-added & other products 9M15 Sales breakdown THB 91,850 mn 1 Tuna Shrimp and related business1 2 Frozen OEM shrimp 3 4 5 6 44% Sardine & Salmon Pet Food Value-added & Mackerel other produ
Slide 8: #1 Global leader in a consumer staple business
#1 Global leader in a consumer staple business TU is the world’s largest canned tuna producer, with the processing volume 18% of world production. World Canned Tuna Annual Production1 1.67 million tons Others 82% TUF 18% Source: 1Fishstat Plus (FAO) 2010, based on finished product production Page 7
Slide 9: Global market leading brand portfolio
Global market leading brand portfolio #1 #1 #1 •#1 canned seafood •#1 canned •#1 premium brand in the UK, Ireland seafood brands canned sardine and the Netherlands in France brand in France #1 #1 #1 •#1 premium canned • #1 canned tuna •#1 canned tuna sardine brand in US, brand in China brand in Thai
Slide 10: Fully integrated global supply chain in canned tuna
Fully integrated global supply chain in canned tuna… Raw material flow Work-in-process and finished good flow Raw material sources Europe Production base Fishing fleet USA Thailand Ghana Seychelles West Pacific Ocean Atlantic ocean Vietnam Papua New Guinea Indian ocean TU’s 7 own fleets Raw Material
Slide 11: … and frozen shrimp business
… and frozen shrimp business Production base TU’s export markets Chicken of the Sea Frozen Europe Food (COSFF) COSFF’s sourcing Asia COSFF’s distribution China Japan USA Thailand India Vietnam Pacific ocean Atlantic ocean Latin America Oceania Indian ocean Raw Material Acquisition Production Marketi
Slide 12: Share Capital Information
Share Capital Information Stock Information Major Shareholders Bloomberg/ Reuters TU TB/ TU.BK As of 28 Aug 2015 Share price (11 Nov 2015) : THB 17.60 Chansiri Historical price : Family 52-week high THB 24.50 20.0% 52-week low THB 16.60 Niruttinanon No. of paid up shares : 4,771.8mn Family 6.9% Par
Slide 13: Agenda: Recent Developments
Agenda Company Overview Recent Developments Key Highlights 3Q15 Financial Results Page 12
Slide 14: 2015 Recent development: Savola Foods joint venture
2015 Recent development Sep: Thai Union Group announced JV with Savola Foods Company for the branded seafood market in the Middle East Strategic direction & target: • To combine and leverage the global resources, expertise and capabilities • sourcing, processing and R&D capabilities of Thai Union •
Slide 15: 2015 Recent development: shrimp price guarantee scheme
2015 Recent development (Cont’d) Sep: A launch of shrimp price guarantee scheme to boost shrimp farmers confidence • To stabilize domestic shrimp prices and boost confidence of shrimp farmers Objective • To ensure sufficient supplies for the shrimp processing for export industry • To boost the confi
Slide 16: 2015 Recent development: change of company name and symbol
2015 Recent development (Cont’d) Sep: Change of the company name, seal and trading symbol New company name, seal and trading symbol Thai Union Group PCL TU Former company name, seal and trading symbol Thai Union Frozen Products PCL TUF Remark: The effective date of these changes was 23 September 201
Slide 17: 2015 Recent development: Dow Jones Sustainability Indices
2015 Recent development (Cont’d) Sep: Thai Union included in Down Jones Sustainability Indices (DJSI) for two years in a row Selected to DJSI Overall score Only 13 Thai Emerging increased by 67% companies listed Markets for the from 2014 thanks in DJSI various second year to improved indices;
Slide 18: 2015 Recent development: Thailand Sustainability Investment
2015 Recent development (Cont’d) Oct: Thai Union automatically included in Thailand Sustainability Investment 2015 The list consists of 51 companies, including 13 stocks which are already in the Dow Jones Sustainability Indices (DJSI) A list of companies with outstanding corporate sustainable de
Slide 19: 2015 Recent development: share buyback program
2015 Recent development (Cont’d) Jul & Sep: Share buyback program TU’s shares buyback program is aimed to increase shareholding proportion in subsidiaries in order to be aligned with good corporate governance practices, to reduce minority interest and to increase share of profit from investments in
Slide 20: Agenda: Key Highlights
Agenda Company Overview Recent Developments Key Highlights 3Q15 Financial Results Page 19
Slide 21: 3Q15: GPM hitting recent high
3Q15: GPM hitting recent high YoY Chg QoQ Chg 32.6 Sales +7.2% +6.4% (THB bn) 17.3% GPM / GP +7.4% +8.5% 7.2% OPM / OP +8.8% +6.9% 1,626 Net profit -15.4% +15.1% (THB mn) Remark: Operating margin = (COGS – SG&A)/sales Page 20
Slide 22: 3Q15 Key highlights
3Q15 Key highlights Sales up 7.2% YoY to THB 32.6bn thanks to the contribution from recently acquired business (MerAllliance and King Oscar) as well as lobster sales (Orion). Overall growth was limited by depreciation of EUR against THB and low commodity prices of tuna and shrimp. GP up 7.4% YoY
Slide 23: Continual sales and earning growth
Continual sales and earning growth Financial Summary1 Reported 9M15 net (THB million) profit up 3% YoY to 9M15 91,850 Total Sales 9M14 88,630 +3.6% THB 4,545million Gross Profit 9M15 14,771 Q1’12 9M14 14,469 +2.1% Share price movement Q1’11 20142 20152 9M15 9,176 (Jan-Dec 14) (Jan- Nov 10’ 15 ) EBIT
Slide 24: Agenda: 3Q15 Financial Results
Agenda Company Overview Recent Developments Key Highlights 3Q15 Financial Results
Slide 25: YoY and QoQ sales growth in most categories
YoY and QoQ sales growth in most categories despite the negative impact of weak EUR and low RM prices Sales Breakdown by Category THB mn +7.2% YoY + 3.6% YoY +6.4% QoQ 88,630 91,850 Value added & 32,602 other products2 30,423 30,642 Value added & Pet food other products2 Pet food Salmon Salmon Sardi
Slide 26: Shrimp, salmon and sardine sales driving growth
Shrimp(lobster), salmon and sardine sales driving growth despite setback from weak EUR Revenue growth component (THB million) +1,057 -779 +677 +2% -12% +6% -4,663 -127 +5,466 91,850 -271 +964 32,602 -1,099 +1,938 -6% -6% +4% -16% -11% +447 30,423 +30% +167% 88,630 +1,460 +163% -910 + 1,238 -7% +16%
Slide 27: Stable geographic market and business breakdown
Stable geographic market and business breakdown Sales Breakdown by Geographic Sales Breakdown by Business THB 121,402mn THB 91,850mn 13% 13% 7% 6% Others 7% 8% 59% 57% Japan 29% 30% Domestic OEM Europe Brand 44% USA 41% 43% 42% 2014 9M15 2014 9M15 Higher sales contribution from the domestic and
Slide 28: GPM hitting the highest level since 2Q11
GPM hitting the highest level since 2Q11 Gross Profit THB mn +7.4% YoY +2.1% YoY +8.5% QoQ 14,771 14,469 5,634 5,246 5,192 3Q14 2Q15 3Q15 9M14 9M15 GP Margin 17.2% 16.9% 17.3% 16.3% 16.1% 3Q15 gross profit (GP) rose 7.4% YoY thanks to contributions from King Oscar, MerAlliance, and Orion as well a
Slide 29: Raw material prices on downtrend despite blips
Raw material prices on downtrend despite blips Skipjack tuna raw material prices White shrimp raw material prices (USD/ton) (THB/kg. of 60 pcs./kg) 3,000 300 2,500 250 2,000 200 1,500 150 149 1,000 100 (Oct’15) 1,140 (Oct’15) 500 50 0 0 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-11 Jan-12 Jan-13 Jan-14
Slide 30: Continual rise in quarterly OP while margin stayed stable
Continual rise in quarterly OP while margin stayed stable Operating Profit THB mn +8.8% YoY -2.2% YoY +6.9% QoQ 2,352 2,162 2,200 5,642 5,520 3Q14 2Q15 3Q15 9M14 9M15 Operating Margin 7.1% 7.2% 7.2% 6.4% 6.0% 3Q15 operating profit (OP) rose 8.8% YoY and 6.9% QoQ The improvement was due to higher G
Slide 31: 3Q15 EBITDA mainly driven by higher OP
3Q15 EBITDA mainly driven by higher OP EBITDA THB mn +1.6% YoY +4.5% YoY +12.6% QoQ 9,176 3,297 3,246 8,784 2,928 EBITDA 3Q14 2Q15 3Q15 9M14 9M15 Margin 10.7% 9.6% 10.1% 9.9% 10.0% 3Q15 EBITDA up by 1.6% YoY mainly due to a higher OP despite a FX loss of THB 55mn (vs. a gain of THB 155mn in 3Q14).
Slide 32: 9M NP up YoY but 3Q15 NP outclassed by exceptional 3Q14
9M NP up YoY but 3Q15 NP outclassed by exceptional 3Q14 Net Profit Normalized Net Profit THB mn THB mn -15.4% YoY +3.5% YoY -7.6% YoY -1.9% YoY +15.1% QoQ +13.7% QoQ 4,393 4,545 4,794 4,705 1,922 1,856 1,716 1,626 1,412 1,508 3Q14 2Q15 3Q15 9M14 9M15 3Q14 2Q15 3Q15 9M14** 9M15* NP Margin 6.3% 4.6% 5
Slide 33: Improving margin and declining WC reducing leverage
Improving margin and declining WC reducing leverage Unit: THB mn Operating Activities Investing & Financing Activities ND/E 0.85x THB 15,807 mn ND/E 0.64x Kd = 3.75% Kd = 3.63% Free Cash Flow THB 13,412 mn 40,567 -9,176 -8,241 +1,421 31,853 +2,422 +855 +2,395 +586 +306 +718 Net Debt EBITDA Change in
Slide 34: Surging profitability and inventory turn cutting WC and leverage
Surging profitability and inventory turn cutting WC and leverage ROE1 ROCE2 A/R Days 18.9% 15.4% 13.8% 14.2% 13.7% 12.7% 12.3% 12.1% 45 41 42 40 8.9% 39 6.6% 3Q14 4Q14 1Q15 2Q15 3Q15 3Q14 4Q14 1Q15 2Q15 3Q15 3Q14 4Q14 1Q15 2Q15 3Q15 INV Days Net WC3 ND/E4 133 0.85x 0.80x 0.76x 131 0.68x 0.64x 125 11
Slide 35: Sequential improvement in inventory turn and WC
Sequential improvement in inventory turn and WC Inventory Days Net Working Capital Days 138 135 135 134 133 131 126 125 125 123 122 124 124 119 121 120 119 117 117 114 116 108 33,54734,637 34,46433,88535,809 40,496 44,438 39,315 36,181 36,917 33,169 42,634 40,088 37,518 34,133 35,032 37,050 40,340 4
Slide 36: Strong FCF sending cash conversion rate to a new high
Strong FCF sending cash conversion rate to a new high Free Cash Flow from operating activities Free Cash Flow THB mn THB mn 6,147 5,337 4,161 3,394 2,559 1,584 3Q14 2Q15 3Q15 3Q14 2Q15 3Q15 Cash Conversion 0.61 1.48 2.09 Rate1 Remark: 1Cash Conversion Rate = FCF / EBIT Page 35
Slide 37: Declining debts with balanced maturities
Declining debts with balanced maturities Interest-bearing debts By Currency By Maturity 3.6% EUR USD 18.0% 2016 0.2% Short-term Loan 18.1% 46% Current 2017 Portion of Long- 2018 10% 78.5% 81.7% term Debt THB 2% & finance 1% lease Finance 43% lease Long-term 42% 2019 Debt onwards 2014 9M15 9M15 Long-
Slide 38: 3Q15 Income Statement
3Q15 Income Statement Consolidated 3Q15/ 3Q15/ (Million baht) 3Q15 % to sales 3Q14 % to sales 2Q15 % to sales 3Q14 2Q15 Change Change Sales 32,602 100% 30,423 100% 30,642 100% 7.2% 6.4% Cost of sales (26,968) -82.7% (25,177) -82.8% (25,450) -83.1% 7.1% 6.0% Gross profit 5,634 17.3% 5,246 17.2% 5,192
Slide 39: 9M15 Income Statement
9M15 Income Statement Consolidated 9M15/ 9M14 (Million baht) 9M15 % to sales 9M14 % to sales Change Sales 91,850 100% 88,630 100% 3.6% Cost of sales (77,078) -83.9% (74,161) -83.7% 3.9% Gross profit 14,771 16.1% 14,469 16.3% 2.1% SG&A expenses (9,251) -10.1% (8,827) -10.0% 4.8% FX gain (loss) 884 1.
Slide 40: Statement of Financial Position as of 30 Sep 2015
Statement of Financial Position as of 30 Sep 2015 Consolidated % to total % to total (Million baht) 3Q15 2014 Change assets assets Cash and cash equivalents* 5,218 4.6% 6,156 5.3% -15.2% Trade and other receivables 14,123 12.4% 15,404 13.3% -8.3% Inventories - net 35,032 30.8% 37,518 32.5% -6.6% Oth
Slide 41: Thank you
Thank you Corporate website: http://www.thaiuniongroup.com IR website: http://www.thaiuniongroup.com/en/investor.ashx E-mail: [email protected] Tel:40+66 2298 0024 Page
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