Thai Union Group Public Company Limited · SET:TU
Thai Union Group Public — FY2014 Earnings Presentation
46 slides from Thai Union Group Public's earnings presentation, Feb 27, 2015
Slide 1: 2014 Results Presentation
2014 Results Presentation 27 February 2015
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 Recap & Recent Developments Key Highlights 2014 Financial Results 2015 Outlook & Guidance Business Strategy
Slide 4: 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 5: 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 6: Higher proportion of branded tuna and value-added & other products
Higher proportion of branded tuna and value-added & other products 2014 Sales breakdown THB 121,402 mn 1 Tuna 2 Shrimp and OEM 41% related business1 3 4 5 6 Frozen Sardine & Salmon Pet Food Value-added & shrimp Mackerel other products2 Shrimp feed Brand 59% 79% 81% 34% 58% 99% 21% - 100% 66% 42% 1%
Slide 7: #1 Global leader in a consumer staple business
#1 Global leader in a consumer staple business TUF 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 6
Slide 8: 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 9: 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 TUF’s 7 own fleets Raw Materia
Slide 10: … and frozen shrimp business
… and frozen shrimp business Production base TUF’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 Market
Slide 11: Share Capital Information
Share Capital Information Stock Information Major Shareholders Bloomberg/ Reuters TUF TB/ TUF.BK As of 30 Dec 2014 Share price (26 Feb 2015) : THB 22.10 Historical price : Chansiri 52-week high THB 24.50 Family 22.4% 52-week low THB 19.69 No. of paid up shares : 4,771.82m Par value : THB 0.25 Others
Slide 12: Agenda
Agenda Company Overview Recap & Recent Developments Key Highlights 2014 Financial Results 2015 Outlook & Guidance Business Strategy
Slide 13: 2014 Recap
2014 Recap Acquisition Sep: Announcement of the acquisition: MerAlliance and King Oscar Acquisitions Nov: Deal closing: MerAlliance and King Oscar Dec: Announcement of the acquisition: Bumble Bee Seafoods Sustainability Jul: Official launch of TUF’s first Sustainability Report Sustainability Sep: Of
Slide 14: Recent Developments
Recent Developments Jan 2015: Par change Referring to the Extraordinary General Meeting of Shareholders held on December 24, 2014, the Company approved the change in the par value of the Company’s ordinary shares from THB1 per share to THB0.25 per share. The registered share volume was consequently
Slide 15: Agenda
Agenda Company Overview Recap & Recent Developments Key Highlights 2014 Financial Results 2015 Outlook & Guidance Business Strategy
Slide 16: 2014: New sales record with strong margin improvement
2014: New sales record with strong margin improvement YoY Chg 121.4 Sales 7.6% (THB bn) 15.7% GPM 33.7% 5,092 Net profit 78.5% (THB mn) 15
Slide 17: A year of recovery
A year of recovery Financial Summary1 Reported 2014 net profit (THB million) boosted by 79% YoY to 2014 121,402 Total Sales 2013 112,813 +7.6% THB 5,092million 2014 Gross Profit 19,020 Q1’12 2013 +33.7% Share price movement 14,222 Q1’11 20132 20142 2014 (Jan-Dec 13) (Jan- Dec 14 ) 10,999 EBITDA +39.
Slide 18: Continued sequential improvement in 2014 from strong performance of overseas subs
Continued sequential improvement in 2014 from strong performance of overseas subs and solid Thai operations Total sales (THB mn) GPM Normalized GPM NPM Normalized NPM 50,000 17.2% 16.9% 17.3% 18.0% 15.7% 15.2% 16.9% 45,000 13.9% 14.6% 16.7% 17.2% 14.4% 13.9% 16.0% 40,000 12.4% 14.0% 11.6% 12.9% 14.9
Slide 19: 2014 Key highlights
2014 Key highlights Sales +7.6% YoY to new record at THB 121.4bn thanks mainly to higher sales of value added & other products (e.g. lobster), salmon, shrimp & related business, pet food as well as THB depreciation (USD sales +2.4% to USD 3.75bn). Sales from the US market showed strong growth YoY
Slide 20: 50.5% Payout for 2014 Performance
50.5% Payout for 2014 Performance Interim dividend for the period: 1 Jul 14 to 31 Dec 14 DPS THB 0.25 XD 11 Mar 2015 Book closing date 16 Mar 2015 Payment date 21 Apr 2015 THB/Share 2.50 70% 59.9% 51.3% 60% 53.5% 2.00 50.1% 50.4% 50.6% 50.7% 50.0% 50.5% 50% 1.50 40% 29.4% 30% 1.00 20% 0.50 10% 0.00
Slide 21: Agenda
Agenda Company Overview Recap & Recent Developments Key Highlights 2014 Financial Results 2015 Outlook & Guidance Business Strategy
Slide 22: New sales record
New sales record Sales Breakdown by Category THB mn +7.6% YoY +6.4% YoY + 4,165 121,402 +33.9% +7.7% QoQ + 892 +1,640 +11.2% + 1,373 +59 +36.1% 30,788 30,423 32,772 Value added & + 461 +0.9% 112,813 other products2 +4.9% +0.9% Pet food Salmon Sardine & Mackerel Shrimp & related business Tuna Shrimp
Slide 23: Higher sales contribution from the US market
Higher sales contribution from the US market Sales Breakdown by Geographic Sales Breakdown by Business THB 112.8bn THB 121.4bn 2013 2014 14% 13% 8% 7% Others Brand Brand 7% 7% 40.6% 41.3% Japan 30% 29% Domestic Europe 44% USA 40% OEM OEM 59.4% 58.7% 2013 2014 Sales from US market continued to grow
Slide 24: Improved GPM in 2014 from low fish costs & pet food business
Improved GPM in 2014 from low fish costs & pet food business Gross Profit Skipjack tuna raw material prices THB mn +33.7% YoY (USD/ton) 3,000 19,020 +14.5% YoY 2,500 -13.2% QoQ 14,222 2,000 1,500 1,150 5,246 4,552 (Jan’15) 3,976 1,000 500 0 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 4Q13 3Q14 4Q14 FY
Slide 25: EBITDA turnaround in 2014 with strong improvement of FCF
EBITDA turnaround in 2014 with strong improvement of FCF EBITDA Free Cash Flow +39.8% YoY (Excluding King Oscar and MerAlliance transactions THB 3.2bn) THB mn THB mn 9,162 -1.8% YoY 10,999 -31.8% QoQ 7,867 3,246 1,583 2,254 2,214 1,039 4Q13 3Q14 4Q14 FY13 FY14 -178 -356 4Q13 3Q14 4Q14 FY13 FY14 Cash
Slide 26: Full year net profit recovery
Full year net profit recovery Net Profit Normalized Net Profit +78.5% YoY +117.8% YoY THB mn THB mn 5,672 -14.3% YoY +12.3% YoY 5,092 -63.7% QoQ -52.7% QoQ 1,922 2,853 1,856 2,604 782 878 815 698 4Q13 3Q14 4Q14 FY13 FY14 4Q13 3Q14 4Q14 FY13 FY14 NP Margin 2.6% 6.3% 2.1% 2.5% 4.2% NP Margin 2.5% 6.1%
Slide 27: Declining leverage at a lower funding cost
Declining leverage at a lower funding cost Unit: THB mn Operating Activities Investing & Financing Activities ND/E 0.92x THB 9,276 mn ND/E 0.85x Kd = 4.24% Free Cash Flow (excl. King Oscar & MerAlliance Kd = 3.75% acquisition cost) THB 9,162 mn 2,799 40,144 39,836 -10,999 2,398 1,070 3,203 585 114 5
Slide 28: Improving profitability and gearing, higher working capital in 4Q14
Improving profitability and gearing… …Higher working capital in 4Q14 (consolidation of new acquisitions) ROE1 ROCE2 A/R Days 15.2% 12.2% 13.5% 12.4% 43 9.3% 38 40 7.4% FY12 FY13 FY14 FY12 FY13 FY14 FY12 FY13 FY14 INV Days Net WC3 129 ND/E4 125 0.92x 127 131 118 113 0.85x 0.83x 35,986 42,634 44,438 F
Slide 29: Sequential improvement in asset management
Sequential improvement in asset management Inventory Days Net Working Capital Days 138 135 135 134 126 125 125 123 122 124 124 121 120 119 117 117 33,547 34,637 36,181 36,917 34,464 33,885 35,809 37,518 37,050 40,496 40,340 42,634 40,278 40,088 40,514 44,438 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1
Slide 30: 2014 & 4Q14 Income Statement
2014 & 4Q14 Income Statement Consolidated % to % to 2014/ 2013 % to % to 4Q14/4Q13 (Million baht) 2014 2013 4Q14 4Q13 sales sales Change sales sales Change Sales 121,402 100.0% 112,813 100.0% 7.6% 32,772 100.0% 30,788 100.0% 6.4% Cost of sales (102,382) -84.3% (98,590) -87.4% 3.8% (28,221) -86.1% (2
Slide 31: 2014 Statement of Financial Position
2014 Statement of Financial Position Consolidated % to total % to total (Million baht) 2014 2013 Change assets assets Cash and cash equivalents* 6,156 5.3% 3,214 3.0% 91.5% Trade and other receivables 15,404 13.3% 13,948 12.9% 10.4% Inventories - net 37,518 32.5% 36,917 34.1% 1.6% Other current asse
Slide 32: More spread-out and longer maturities of interest bearing debts
More spread-out and longer maturities of interest bearing debts Interest bearing debt By Currency By Maturity 4% EUR 4% 18% USD 17% Short-term 56% Loan 2016 Current Portion of Long- 2% THB 79% 78% 2017 2019 term Debt onwards Long-term 42% 2018 Debt 2013 2014 2014 Long-term loan by maturity THB 43,05
Slide 33: Agenda
Agenda Company Overview Recap & Recent Developments Key Highlights 2014 Financial Results 2015 Outlook & Guidance Business Strategy
Slide 34: 2015 Business outlook
2015 Business outlook Tuna • Branded tuna sales remain stable, but margins should normalize when promotion and competition intensifies. • Gradual OEM sales growth as the current raw material price level should lead to more consistent buying from private label customers despite competition from regio
Slide 35: 2015 Guidance
2015 Guidance Sales USD 5bn GPM 15% - 16 % SG&A < 10% of sales Effective interest rate c.4% Effective tax rate 15% - 20% CAPEX Approximately THB 3.5bn Dividend policy At least 50% dividend payout 34
Slide 36: Agenda
Agenda Company Overview Recap & Recent Developments Key Highlights 2014 Financial Results 2015 Outlook & Guidance Business Strategy
Slide 37: Our long term target: To become a USD 8 bn leading seafood company in 2020
Our long term target: To become a USD 8 bn leading seafood company in 2020 - Strategy underpinned on a continued focus on organic growth 2020F 2015F 2011 2013 2009 USD Sales (Billion) 2.0 3.2 3.7 5 8 TUF Long term growth strategy 1 2 3 4 5 6 Innovation M&A Sourcing Operational Sustain- Global Excell
Slide 38: Organic growth target is to generate 2x GDP growth through 3 key levers
Organic growth target is to generate 2x GDP growth through 3 key levers Key Current Organic Growth Initiatives 1 Product Innovation: Expanding product portfolio 2 Customer Intimacy: Global key account management 3 Geographic Expansion: Expanding in untapped markets 37
Slide 39: Product Innovation: Expanding product portfolio
1 Product Innovation: Expanding product portfolio Formal Global Innovation Team drives innovation platforms on a global scale Global Innovation Team Drives global projects to bring breakthrough innovation to consumers Margin Differential Trend to be Local / Low Change the product to deliver margin
Slide 40: Examples of innovations - John West No Drain Tuna
1 Product Innovation: Expanding product portfolio Examples of innovations - John West No Drain Tuna Strong in-market performance on the back of strong marketing and commercial support Values sales now £35.5m growing 19% YOY, 39
Slide 41: Examples of innovations - John West Infusions
1 Product Innovation: Expanding product portfolio Examples of innovations - John West Infusions Building on our No Drain offering we launched Infusions tuna Infusions value share of added value fish has risen from 5% to 14% comparing YOY 40
Slide 42: Examples of innovations - John West Steam Pots
1 Product Innovation: Expanding product portfolio Examples of innovations - John West Steam Pots Following on from Infusions, our latest strategic innovation is John West Steam Pots. This pairs our Infusions Tuna with specially blended cous cous to create a warm on-the-go lunchtime product. The rang
Slide 43: Examples of innovations - Flavored Salmon Pouches
1 Product Innovation: Expanding product portfolio Examples of innovations - Flavored Salmon Pouches Launched October, 2014, supported by ‘Pink Up Your Launch’ campaign More than 30 retailers have accepted 2 or more SKUs (flavors) Grew salmon category by 29%, reversing a flat historical trend 42
Slide 44: Customer Intimacy: Global key account management
2 Customer Intimacy: Global key account management Customer intimacy is a key growth lever focused on driving growth with top global customers C-Suite C-Suite Top To Top Operating Company Senior Executives Senior Leaders Mgmt’ Customers Thai Union Key Account Department Managers Ops Marketing & Cate
Slide 45: Geographic expansion projects are focused on emerging markets
3 Geographic Expansion: Expanding in untapped markets Geographic expansion projects are focused on emerging markets 44
Slide 46: Thank You
Thank You Corporate website: http://www.thaiuniongroup.com IR website: http://www.thaiuniongroup.com/en/investor.ashx E-mail: [email protected] Tel: +66 2298 0024
Thai Union Group Public Company — FY2014 Earnings Presentation on 6ix