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1Q17 Results PresentationMay 2017
Page 2
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 based on assumptions subject to various risks and uncertainties. No assurance is given that future events will occur, that projections will be achieved, or that the our assumptions are correct. Actual results may differ materially from those projected.
Disclaimer
Page 3
Key Highlights
Recent Developments
1Q17 Financial Results
2017 Business Outlook
Agenda
Page 4
“Through organic growth, innovation
and M&A efforts, we are committed to
the USD 8.0bn revenue target by 2020.”
Thiraphong ChansiriPresident and Chief Executive Officer
Page 5
1Q17: Weaker operation YoY offset by investments and FX
GP
NP
4,330
1,469
Sales(THB mn)
31,427 +0.7%
YoY Chg % of sales
-13.3% 13.8%
+19.3%
OP881 -45.0% 2.8%
4.7%
Stable quarterly sales. 1Q17 sales growth
marginally improved from the previous year due
mainly driven by a product repricing from
increased raw material prices
Rising raw material prices. Gross profit margin
remain under pressure at 13.8% resulted from
both a seasonality factor and a sharp year-over-
year increase in raw material prices and
European currencies depreciation
Prudent cost control. Due to the stringent cost
control, 1Q17 SG&A expenses were increased
by 1.6% YoY.
Net profits improved 19% YoY, supported by a
equity income contribution from Red Lobster
investment, FX gains from THB appreciation
devaluation against USD during 1Q17, lower
minority expenses due to minority stake buyout
since 3Q16 and lower effective tax rate.
Remark: Operating margin = (COGS – SG&A)/sales
+3.5% without currency impact
Page 6
1,231
2,946
1,602
4,996
1,469
2,899
881
4,330
Financial Summary1
(THB million)
31,427
31,210
1Q17 Net Profit
up 19.3% YoY to
THB 1,469million
Strong cash flow support
solid financial strength
Share price movement
20162
(Jan- Dec 16 )
+24.3%
20172
(Jan- May 5,17 )
+4.3%
2016
1.37x
1Q17
1.34x
1Q17 Net profits up 19.3% YoY
Gross Profit
Total Sales
EBITDA
1Q17
1Q16*
-13.3%
-45.0%
+19.3%
Q1’12
Q1’11
Net Profit
-1.6%
+0.7%
Source: 1TU; 2SET (Jan 4’16: THB16.9/share and Dec 30’16: THB21.0/share, Jan 4’17: THB21.1/share and May 5’17: THB22.0/share)
*The 1Q16 figures were restated mainly due to reclassification of fishing fleet discontinued operations
Operating Profit
1Q17
1Q16*
1Q17
1Q16*
1Q17
1Q16*
1Q17
1Q16*
Page 7
1Q17: Continued overall resilience to operational dynamic
28,606 30,642
32,602 33,333 31,210 34,441 35,128 33,597
31,427
13.8%
16.9%17.3%
14.2%16.0% 15.8%
14.1% 13.6% 13.8%
5.3%4.3%
5.0%
2.3%
3.9% 4.4% 4.5%
2.7%
4.7%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
0
10,000
20,000
30,000
40,000
50,000
60,000
1Q15 2Q15 3Q15 4Q15 1Q16* 2Q16 3Q16 4Q16* 1Q17
Total sales (THB mn) GPM NPM
% GrowthYoY
Sales 2.4 1.3 7.2 1.7 9.1 12.4 7.7 0.8 0.7
Grossprofit
-5.2 6.3 7.4 3.9 26.6 4.5 -12.4 -3.5 -13.3
Net profit 58.7 -7.2 -23.9 8.5 -19.0 16.9 -1.9 19.1 19.3
Remark: Operating margin = (COGS – SG&A)/sales
*The 1Q16 and 4Q16 figures were restated mainly due to reclassification of fishing fleet discontinued operations
Page 8
Key Highlights
Recent Developments
1Q17 Financial Results
2017 Business Outlook
Agenda
Page 9
16 Jan 17: TU hosted a Thank You
party for broker analysts, investors
and bankers to thank them for their
support on financing activities and
being a potent intermediary to the
financial community
Recent developments Recognitions
24 March 17: TU won accolades in multiple categories at the annual
Finance Asia awards including #1 Best managed company in Thailand, #1
Best CEO in Thailand, #1 Best CFO in Thailand in a poll conducted. TU
received largely positive feedback from portfolio managers and buy side
analysts who had participated in the poll
Award
25 April 17: TU finance team has won awards for The Best Treasury
Team of the year from the Asset magazine and for best cash
management solutions along with our banker Kasikornbank. This comes
within a year of us setting up our global treasury in Bangkok
Award
7 April 17: TU launched its much
awaited e-commerce platform and
frozen food Brand Q-fresh in
Thailand.
https://www.qfreshshop.com
6 March 17: TU welcomed a
group of investors from CLSA
ASEAN forum to our Global
innovation incubator to educate
investors on GII’s background,
objectives and operations
IR Activity IR ActivityLaunch
April 17: TU launched Tuna
products in Germany under the
Rügen Fisch brand
Launch
Page 10
Recent developments
Thai Union won 6 major awards at the 17th Annual Finance Asia poll. The poll, which includes portfolio managers and buy-
side analysts has awarded the company for its policies on corporate governance, senior executives and company
management. The awards which TU received are-
#1 Best Managed Company in Thailand
#1 Best CEO in Thailand: Thiraphong Chansiri, Thai Union
#1 Best CFO in Thailand: Joerg Ayrle, Thai Union
#1 Best at Investor Relations in Thailand
#1 Best at Corporate Social Responsibility in Thailand
#1 Most committed to corporate governance in Thailand
Page 11
Recent developments
Caption: Mr. Rittirong Boonmechote(Centre), President of Global Frozen
and Related business during the launch of Qfresh brand in Bangkok
Thai Union launched its domestic frozen food brand “Qfresh” along with its much awaited e-commerce platform
www.qfreshshop.com. The brand enables Thai consumers and foodservice operators to order high quality seafood
including Atlantic Salmon, Shrimp, Chilean Seabass and Squid directly to their doorstep through the platform. This is the
first frozen seafood brand introduced by Thai Union into the Thai market
Page 12
Proposed final dividend for the period: 1 Jul 16 to 31 Dec 16
DPS THB 0.31 (Full year DPS: THB 0.63)
XD 6 March 2017
Book closing date 9 March 2017
Payment date 20 April 2017
Stable dividend payment despite operational headwinds
Remark:
* The company changed the par value from THB 1 to THB 0.25 and registered with the Ministry of Commerce on 25 Dec 2014.
Hence, dividend per share has been revised retroactively to reflect the par change of THB 0.25.
0.30 0.28 0.28 0.32 0.48 0.40 0.39 0.53 0.38 0.54 0.63 0.32
0.31
50.1% 50.4%53.5%
50.6% 50.7% 50.0%
29.4%
51.3%
59.9%
50.5% 51.3%57.2%
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014* 2015 2016
THB/Share
DPS (LHS) Payout Ratio (RHS)
Page 13
Key Highlights
Recent Developments
1Q17 Financial Results TU’s Consolidated Results Results by Business Unit
2017 Business Outlook
Agenda
Page 14
“Despite challenging operating
environment, we remain committed to
deliver solid growth and enhance
our shareholders’ value.”
Joerg AyrleGroup Chief Financial Officer
Page 15
High tuna prices(+30.0% YoY, +8.3% QoQ)
• Difficulty to pass on price increases to consumer
• Competitive pressure in the private label business
High shrimp prices(+13.8% YoY, +16.9% QoQ)
• Rapid increase in shrimp price put pressure on profit margin
High salmon prices(+14.7% YoY, -1.1% QoQ)
• Salmon re-pricing enable second consecutive quarter of
positive gross margin
• Due to significant re-pricing, the volume sales was affected
Exchange rate volatility• Baht appreciation hurt competitiveness of Thai exports
• Euro and GBP depreciation induce consumer price inflation
• Exchange volatility affect the accounting translation
Political dynamics• New government in the United States
• Continued challenge after the Brexit
The headwinds during 1Q17
Page 16
1Q17: Continued overall resilience to operational dynamic
28,606 30,642
32,602 33,333 31,210 34,441 35,128 33,597
31,427
13.8%
16.9%17.3%
14.2%16.0% 15.8%
14.1% 13.6% 13.8%
5.3%4.3%
5.0%
2.3%
3.9% 4.4% 4.5%
2.7%
4.7%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
0
10,000
20,000
30,000
40,000
50,000
60,000
1Q15 2Q15 3Q15 4Q15 1Q16* 2Q16 3Q16 4Q16* 1Q17
Total sales (THB mn) GPM NPM
% GrowthYoY
Sales 2.4 1.3 7.2 1.7 9.1 12.4 7.7 0.8 0.7
Grossprofit
-5.2 6.3 7.4 3.9 26.6 4.5 -12.4 -3.5 -13.3
Net profit 58.7 -7.2 -23.9 8.5 -19.0 16.9 -1.9 19.1 19.3
Remark: Operating margin = (COGS – SG&A)/sales
*The 1Q16 and 4Q16 figures were restated mainly due to reclassification of fishing fleet discontinued operations
Page 17
Resilient sales growth • Sales +0.7% YoY, due to soft demand and weak currency
• At constant exchange rates, sales would have increased by
3.5%
A weaker GPM from high raw
material prices
• High tuna and shrimp prices putt pressure on profit margin
• European salmon business product re-pricing prompt two
consecutive quarter of positive GP
Prudent cost control • SG&A expenses rose only 1.6% YoY
Well-managed non-operating
items
• Prudent foreign exchange policy allow TU to record FX gains
THB 590m and benefited from Baht appreciation
• Fishing fleet operational improvement thanks to fish price
increase and operation improvement
Strong contribution from Red
Lobster• RL contributed THB 224mn during Q117, from both share of
profits and interest income
The key take away for 1Q17 results
Page 18
Red Lobster operational seasonality
1Q17 4Q16
Share of profit
Other Income
Finance Costs
Income Tax
Net Income
EPS (Bt/sh)
THB mn
203
261
-118
-127
-113
224
240
-102
39
59
0.047 0.012
• Red Lobster is very dependent on guest footfall
development, and seasonality play crucial parts
in driving guest counts, such as:
• Lent period provide strong traffic
• Fall traffic is generally weaker due to “back
to school” season
• Promotion help Red Lobster take advantage of
the peak traffic and smooth out the impact of the
low season, as there is a substantial seasonality
in the business
Q1 Q2 Q3 Q4
Seasonality
Average Fluctuation
Lent Period Christmas & NYE
Page 19
4. Labor Waste Reduction
Red Lobster has initiated Cross
training, cross scheduling, reducing
shift change overlap amongst others
with an aim to reduce labor waste by
10-15%
Strong initiatives at Red Lobster
1. Kitchen of the Future
Positive results from kitchen of the
future initiative. Adopted to
streamline product offerings/ process
resulting in fresher, faster, better food
with lower labor costs and waste
2. RL’s Signature Events
Growing sales and positive feedback
from customers on RL specialty events
like LobsterFest, Endless Shrimp,
CrabFest & SummerFest
3. Smart PR Activity
PR has generated > 2.7 Billion media
impressions. Largely positive PR
reported with the likes of Beyonce,
Tyrese Gibson endorsing RedLobster. RL
Rewards programme a hit amongst
regular customers
5. International Expansion
Actively developing entry strategy to
key overseas markets including Asia to
drive growth
Page 20
USD mn 948
31,21034,441 35,128 33,597
31,427
1Q16* 2Q16 3Q16 4Q16* 1Q17
SalesTHB mn
1Q17 A stable sales trend
1Q17 sales grew by 0.7% YoY to THB 31,427mn
(up 2.8% YoY in dollar term to USD895mn), driven
by:
Ambient seafood business was facing difficult
business environment from sluggish demand
in Europe and European currencies
depreciation against Thai Baht, resulting in
lower revenue during the quarter
Chilled and frozen product re-pricing
significantly to reflect an increase in shrimp
and salmon raw material prices
PetCare business continued to show strong
growth in light of new product launches and an
improved market penetration
Weak sales growth in Thai Baht term was partly
due to YoY Baht appreciation against US Dollar
during 1Q17.
112,813 121,402 125,183
134,375
31,210 31,427
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2013 2014 2015 1Q16* 1Q17YoYGrowth 5.7% 7.6% 3.1%
895871 976
+0.7% YoY
-6.5% QoQ
1,009
7.3%
3,8033,716USD mn
Remark: *The 1Q16 and 4Q16 figures were restated mainly due to reclassification of fishing fleet discontinued operations
+0.7% YoY
Page 21
1Q17 resilient sales growth, hindered by the FX impactRevenue growth component(THB million)
Remark: 1Shrimp & related business comprises of frozen shrimp and shrimp feed. 2Value-added & other products includes ready-to-eat products, frozen cephalopod, canned seafood, local products, bakery products, and
sales of scraps
1Q16 1Q17
USD mn
895870
+0.7% YoY
+2.9% YoY
Before currency impacts
31,42731,210
-320
+538
+7%
+909-722
-23
-457
-6% +14%
+15%-5%
-1%
Tuna Shrimp
& related
business1
Sardine
&
Mackerel
Salmon Pet
Care
Value
added
& other
products2
-22%
-2%
-237
USD
effect
EUR
effect
+208
Lobster
+14%
+320
Page 22
Brand, 36%
**FS - Brand, 6%
**FS - Private Label, 6%
Private Label, 52%
Stable branded sales mix amid foreign currency volatility
Sales Breakdown by Business
Sales Breakdown by Geographic
Lower sales contribution from the European
markets to 31% (from 33% during 2016) was
driven by significant Thai Baht appreciation
against European currencies during 1Q17.
US sales contribution improved to 40% (from 39%
in 2016) from improved sales and strengthening
relationship with Red Lobster.
1Q17 branded and private label sales mix
remained largely stable compared to 2016 with
the branded sales contributing 42% of 1Q17 sales
and the balance from the private label sales mix.
1Q17 total branded sales marginally declined by
1.7% YoY, mainly due to the European currencies
depreciation against Thai Baht putting pressure
on European branded sales.
On the other hand, private label sales reported
strong growth of 2.5% YoY, mainly driven by
selling price adjustment.
Remark: *Others represent Asia, Australia, Middle East, Canada, Africa and South America
**FS stands for Food Service
40% 44% 42% 39% 40%
30% 29% 29% 33% 31%
7% 7% 8% 8% 8%8% 7% 6% 6% 6%
14% 13% 14% 13% 14%
0%
20%
40%
60%
80%
100%
2013 2014 2015 2016 1Q17
Others*
Japan
Domestic
Europe
USA
THB 31,427mn
1Q17
Brand, 37%
**FS - Brand, 4%
**FS - Private Label, 8%
Private Label, 50%
THB 134,375mn
2016
Page 23
GPM 12.6% 15.7% 15.6% 14.8%
YTD 16.0% 13.8%
14,222
19,020 19,501 19,927
4,996 4,330
-
5,000
10,000
15,000
20,000
25,000
2013 2014 2015 1Q16* 1Q17
-13.3% YoY
4,996 5,4284,937
4,565 4,330
16.0% 15.8%
14.1%13.6% 13.8%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
24.0%
26.0%
28.0%
30.0%
1Q16* 2Q16 3Q16 4Q16* 1Q17
Gross margin under pressure from high raw material pricesGross ProfitTHB mn
1Q17 Gross profit of THB 4,330mn, down 13.3%
YoY, driven mostly by raw material prices
volatility and currency appreciation YoY
1Q17 margin was at 13.8%, down 223bps YoY.
The margin remain under pressure due to:
Rising raw material prices (1Q17 tuna raw
material price +30.0% YoY and shrimp price
+13.8% YoY) affect gross margin of key
businesses, particularly in European market
THB currency appreciate against European
currencies and USD, YoY
But the negative impact was partly offset by:
1Q17 European chilled smoke salmon business
gross profits has turned positive from negative
in 1Q16.
PetCare business still report both strong sales
growth and margin improvement YoY
-13.3% YoY
-5.2% QoQ
GPM
Remark: *The 1Q16 and 4Q16 figures were restated mainly due to reclassification of fishing fleet discontinued operations
Page 24
Operating profit: Prudent cost controlOperating ProfitTHB mn
1Q17 Operating profit of THB 881mn, up down
45.0% YoY, driven mostly by a weak gross margin
during the quarter
Due to stringent cost control, 1Q17 SG&A
expenses was up by 1.6% YoY to THB 3.4bn.
Ratio-wise, the SG&A to sales ratio was 11.0%
(stable from 10.9% during 1Q16), driven by both
THB appreciation and weak sales growth
compared to the same quarter last year
SG&A to sales ratio is above our full year target
of 10%, which is mostly attributed to seasonality
factor that normally put pressure on the first
quarter of every year
1,602
2,0621,872
1,270
8815.1%
6.0% 5.3%
3.8%
2.8%
1.0%
3.0%
5.0%
7.0%
9.0%
11.0%
13.0%
15.0%
1Q16* 2Q16 3Q16 4Q16* 1Q17
-45.0% YoY
-29.7% QoQ
3,988
6,990 6,785 6,805
1,602 881
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2013 2014 2015 1Q16 1Q17
OP Margin
-45.0% YoY
OPM 3.5% 5.8% 5.4% 5.1%
YTD 5.1% 2.8%
Remark: *The 1Q16 and 4Q16 figures were restated mainly due to reclassification of fishing fleet discontinued operations
Page 25
EBITDA
Margin9.2% 7.0% 9.1% 9.2%
YTD 9.4% 9.2%
Stable EBITDA supported by investments and FX gainsEBITDATHB mn
2,9463,181
2,917
2,094
2,899
9.4% 9.2% 8.3%
6.2%
9.2%
3.0%
8.0%
13.0%
18.0%
23.0%
28.0%
1Q16* 2Q16 3Q16 4Q16* 1Q17
-1.6% YoY
+38.5% QoQ
9,823
7,867
10,999 11,526
2,946 2,899
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2012 2013 2014 1Q16* 1Q17
-1.6% YoY
Despite a weak operating profits, TU reported
1Q17 EBITDA of THB 2,899mn, down 1.6% YoY.
The stable EBITDA YoY was supported by interest
income and equity profits contribution from an
investment in Red Lobster and an FX gains of
THB590mn from strong Baht appreciation against
key currencies during 1Q17.
EBITDAMargin
Remark: *The 1Q16 and 4Q16 figures were restated mainly due to reclassification of fishing fleet discontinued operations
Page 26
Net profit: Strong growth supported by investments and FX impact
Net ProfitTHB mn
1,231
1,527 1,594
902
1,469
3.9%4.4%
4.5%
2.7%
4.7%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
1Q16 2Q16 3Q16 4Q16 1Q17
+19.3% YoY
+62.8% QoQ
2,853
5,092 5,302 5,254
1,231 1,469
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2013 2014 2015 1Q16 1Q17
+19.3% YoY
NPM
1Q17 net profit of THB 1,469mn, up 19.3% YoY,
The increased net profit was driven by:
Positive income contribution from a strategic
investment in Red Lobster, both from interest
income and positive equity income,
Baht appreciation against US Dollar boosted FX
gains during the quarter,
Lower minority interest expenses from minority
stake buyout of US business in 3Q16,
Lower tax expenses from a weak business
performance in European market,
Soon-to-be discontinued fishing fleet operation
has improved due to high tuna prices YoY.
However, the aforementioned gains were partly
offset by higher interest expenses as a result
from higher interest-bearing debt as a result of a
multiple investments made during 2016
NPM 2.5% 4.2% 4.2% 3.9%
YTD 3.9% 4.7%
Page 27
Normalized net profit of THB 1,052mnNormalized Net ProfitTHB mn
Norm NP
Margin
Excluding the one-off quarter-end items, 1Q17
normalized net profit was at THB 1,052mn, stable
YoY.
One-off positive items during 1Q17 of THB 417mn
comprised of:
Profits from soon-to-bed disposed fishing fleet
operation (THB 36mn)
Accounting adjustment (-THB 75mn),
Unrealized FX gains (THB 476mn),
Tax adjustment (-THB 20mn)
We have signed an MoU to dispose the loss-
making fishing fleet business, the transaction of
which is expected to be completed within 1H17.
Remark: The normalized net profit still include the realized FX gains/losses from normal business operation
1,083
1,446 1,384 1,423
1,052
3.5% 4.2% 3.9% 4.2% 3.3%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
1Q16 2Q16 3Q16 4Q16 1Q17
-2.9% YoY
-26.1% QoQ
1,469 +75-79
1,052
Fishing fleets DO
Accounting adjustment1Q17
Reported NP1Q17
Normalized NP
Unrealized FX gain
Tax adjustment
-476
+20
-36
Page 28
0.98
0.60
1.07 1.11
0.26 0.31
2012 2013 2014 1Q16 1Q17
EPS: Keeps momentum despite operational headwinds
EPS*THB
0.26
0.32 0.33
0.19
0.31
1Q16 2Q16 3Q16 4Q16 1Q17
+19.3% YoY
+62.8% QoQ 1Q17 EPS was at THB 0.31, up 19.3% YoY and
62.8% QoQ, in line with the net profit
improvement
Remark: *EPS in this slide represents fully diluted EPS based on current number of shares of 4,771,815,496
+19.3% YoY
Page 29
9,162
11,664
3,837
786
2014 2015 2016 1Q17
1Q17 strong free cash flow amid high raw material prices
Annual Free Cash FlowTHB mn
4,483
-29 -192 -425 786
1Q16 2Q16 3Q16 4Q16 1Q17
Quarterly Free Cash FlowTHB mn
Remark: 1Cash Conversion Rate = FCF / EBIT; FCF= EBITDA-Changes in net working capital - CAPEX
Cash
Conversion
Rate12.2 -0.01 -0.09 -0.3 0.4
Cash
Conversion
Rate11.1 1.2 0.5 0.4
Despite high raw material prices, 1Q17 Free cash
flow (FCF) was solid at THB 785mn, due mainly to
positive contribution from recent investments
and FX gains
Page 30
Debt refinancing secured long-term funding for investments
Interest-bearing debts of THB 64,854mn
42%
2%
Long-term loan by maturityTHB 51,209mn
By Maturity
2021 onwards
2020
2019
2018
Long-term
Debt
1Q17
Current
Portion
of Long-
term Debt
& finance
lease
Short-term
Loan
79%
1%
2016
20%
39%
5%
56%
Page 31
1Q17: Strong operating cashflow allowed debt repayment
+178+264
+852
+909 +108
Operating Activities
THB 1,695mnInvesting & Financing Activities
Free Cash Flow THB 786 mn
Unit: THB mn
ND/E 1.37x
Kd = 2.74%
ND/E 1.34x
Kd = 3.04%
64,384+300
-89
-2,89964,942
Other
Investing/
Financing
activities*
Other
non-cash
expenses
Net interests
paid
Change in
other assets
and liabilities
Change in
net working
capital
Net Debt
as of
26 Dec 2016
Net Debt
as of
8 May 2017
Tax
paymentEBITDA CAPEX
+182
Cash paid for
NCI in
subsidiaries
Remark: * Included 1) change in loans to associates & other companies 2) change in investments in associates and other long-term investments 3) proceeds from sale of assets 4) dividend received and 5) change in non-controlling interest
Page 32
Remark: 1ROE = Annualized quarterly net profit/ Average total shareholders’ equity2ROCE = Annualized EBIT / Average capital employed; where as Capital Employed = total assets - total current liabilities
(incl. current portion of long-term debt)
and EBIT = Total revenue – COGS – SG&A + share of profit in associates and joint ventures3Net WC day = INV day + A/R day – A/P day 4ND/E ratio = Net interest-bearing debt/ Total equity,
Net interest-beating debt = Total interest-bearing debt - Cash & Cash equivalents including ST investment
Improving financial strength
Net WC3
9.3%
6.4%
10.7%13.0%12.1%
1Q174Q163Q162Q161Q16*
1.34x1.37x
0.92x0.74x0.69x
1Q174Q163Q162Q161Q16
ROCE2
ROE1 Debt to EBITDA
ND/E4
13.5%
8.4%
14.8%13.8%
10.9%
1Q174Q163Q162Q161Q16*
INV Days
131119
108106117
1Q174Q163Q162Q161Q16*
5.59
7.87
3.803.022.97
1Q174Q163Q162Q161Q16*
38,448 41,131 42,371 42,926 41,923
114
104107
114
121
1Q16 2Q16 3Q16 4Q16 1Q17
WC (THB mn) WC Day
*The 1Q16 figures were restated mainly due to fishing fleets reclassification
Page 33
Agenda
Key Highlights
Recent Developments
1Q17 Financial Results TU’s Consolidated Results Results by Business Unit
2017 Business Outlook
Page 34
500
1,000
1,500
2,000
2,500
Jan-14 Jan-15 Jan-16 Jan-17
Key operating impact: Raw material price increased YoY during 1Q17
White shrimp raw material prices (THB/kg. of 60 pcs./kg)
170 (Apr’17)
Skipjack tuna raw material prices (USD/ton)
1,690
(Apr’17)
In April, tuna price closed at USD 1,690/ton. In 1Q17, average price
was at USD 1,633/ton (+30.0% YoY, +8.3% QoQ).
In April, shrimp price closed at THB 170/kg. In 1Q17, average price
was at THB 212/kg (+13.8% YoY, +16.9% QoQ).
Source: Thai Union Group and http://fishpool.eu/price-information/spot-prices/history/
Raw material prices
Salmon raw material prices (NOK/kg)
In April, salmon price closed at NOK 64/kg. In 1Q17, average price
was at NOK 67/kg (+14.7% YoY, -1.1% QoQ).
20
40
60
80
Jan-14 Jan-15 Jan-16 Jan-17
64(Apr’17)
50
100
150
200
250
300
Jan-14 Jan-15 Jan-16 Jan-17
x2
Page 35
28
30
32
34
36
38
Jan-14 Jan-15 Jan-16 Jan-17
USD/THB
In April, USD/THB closed at 34.63. In 1Q17, average USD/THB was
at 35.12 (-1.5% YoY, -0.8% QoQ).
34.63
(Apr’17)
Exchange rate
30
35
40
45
50
Jan-14 Jan-15 Jan-16 Jan-17
EUR/THB
37.62
(Apr’17)
In April, EUR/THB closed at 37.62. In 1Q17, average EUR/THB was
at 37.41 (-4.9% YoY, -2.0% QoQ).
30
40
50
60
Jan-14 Jan-15 Jan-16 Jan-17
GBP/THB
In April, GBP/THB closed at 44.68. In 1Q17, average GBP/THB was
at 43.52 (-14.8% YoY, -1.0% QoQ).
44.68
(Apr’17)
Key operating impact:
Page 36
Thai Union’s global footprint
Page 37
41%
45%
3 strategic business segments
Ambient seafoodSales: THB 14,069 mn
PetCare, value added and
othersSales: THB 4,444 mn
Frozen, chilled seafood
and relatedSales: THB 12,914 mn
Frozen, chilled &
smoked salmon
Tuna business
Other seafood2Sardine & MackerelAmbient & Pouch
Salmon
Shrimp & related
business1 PetCare
Value-added
business3
Total 1Q17 sales: THB 31,427mn
Other products4
56%44%
Sales Split:
39%61%
7%
93%
14%Brand
Private label
Brand
Private label
Brand
Private label
Remark: 1.Shrimp & related business includes frozen shrimp, lobster, shrimp feed and value-added shrimp
2.Other seafood includes frozen cephalopod, crab, scallop, shellfish and other fish
3.Value-added business includes ready-to-eat products, maguro & cephalopod sashimi, local products, bakery products and snack
4.Other products include scrap, fishery and others
Page 38
Ambient Seafood
Page 39
Ambient Seafood1Q17 soft starts for European market
Sales (THB million) Quantity (Tons)
Gross Profit Margin (Percent) 1Q17 ambient seafood business sales was THB 14.1bn, down 7.4% YoY. Sales decline was mainly attributable to the lower tuna business sales volume in European market
1Q17 Gross profit margin was at 16.2%, down 226bps YoY, due to high raw material prices during 1Q17.
Weak European market put pressure on branded ambient business gross margin. However, TU managed to pass on the raw material price increase in the private label business, which saw a significant average selling price improvement YoY
Remark: 2016 branded/private label sales was reclassified due to Rugen Fisch sales reclassification
:*Including effect of Steam Pot sales reclassification in 3Q16 onwards (only QoQ effect), from Ambient seafood to Value-added products
44% 43% 42% 51%
56%57%
58% 49%
15,198 17,261
14,733 13,852 14,069
- 1,000.00 2,000.00 3,000.00 4,000.00 5,000.00 6,000.00 7,000.00 8,000.00 9,000.00
10,000.00 11,000.00 12,000.00 13,000.00 14,000.00 15,000.00 16,000.00 17,000.00 18,000.00 19,000.00 20,000.00
1Q16 2Q16 3Q16* 4Q16 1Q17
54% 52% 50% 58%
46% 48%50% 42%
94,086 103,387 90,028 88,415 87,643
- 1,000.00 2,000.00 3,000.00 4,000.00 5,000.00 6,000.00 7,000.00 8,000.00 9,000.00 10,000.00 11,000.00 12,000.00 13,000.00 14,000.00 15,000.00 16,000.00 17,000.00 18,000.00 19,000.00 20,000.00 21,000.00 22,000.00 23,000.00 24,000.00 25,000.00 26,000.00 27,000.00 28,000.00 29,000.00 30,000.00 31,000.00 32,000.00 33,000.00 34,000.00 35,000.00 36,000.00 37,000.00 38,000.00 39,000.00 40,000.00 41,000.00 42,000.00 43,000.00 44,000.00 45,000.00 46,000.00 47,000.00 48,000.00 49,000.00 50,000.00 51,000.00 52,000.00 53,000.00 54,000.00 55,000.00 56,000.00 57,000.00 58,000.00 59,000.00 60,000.00 61,000.00 62,000.00 63,000.00 64,000.00 65,000.00 66,000.00 67,000.00 68,000.00 69,000.00 70,000.00 71,000.00 72,000.00 73,000.00 74,000.00 75,000.00 76,000.00 77,000.00 78,000.00 79,000.00 80,000.00 81,000.00 82,000.00 83,000.00 84,000.00 85,000.00 86,000.00 87,000.00 88,000.00 89,000.00 90,000.00 91,000.00 92,000.00 93,000.00 94,000.00 95,000.00 96,000.00 97,000.00 98,000.00 99,000.00 100,000.00 101,000.00 102,000.00 103,000.00 104,000.00 105,000.00 106,000.00 107,000.00 108,000.00 109,000.00 110,000.00 111,000.00 112,000.00 113,000.00 114,000.00 115,000.00 116,000.00 117,000.00 118,000.00 119,000.00 120,000.00
1Q16 2Q16 3Q16* 4Q16 1Q17
-7.4% YoY
1.6% QoQ
-6.8% YoY
-0.9% QoQ
49%
51%
56%
44%
Brand
Private label
Brand
Private label
24%26%
20%19%
18%
12% 12%
8%9%
14%
18%20%
15% 14% 16%
1Q16 2Q16 3Q16* 4Q16 1Q17
Total
Brand
Private label
Page 40
Frozen, chilled seafood and related
Page 41
33% 34% 32% 33%
67% 66% 68% 67%
52,524 57,635 64,147 64,837
54,015
- 1,000.00 2,000.00 3,000.00 4,000.00 5,000.00 6,000.00 7,000.00 8,000.00 9,000.00 10,000.00 11,000.00 12,000.00 13,000.00 14,000.00 15,000.00 16,000.00 17,000.00 18,000.00 19,000.00 20,000.00 21,000.00 22,000.00 23,000.00 24,000.00 25,000.00 26,000.00 27,000.00 28,000.00 29,000.00 30,000.00 31,000.00 32,000.00 33,000.00 34,000.00 35,000.00 36,000.00 37,000.00 38,000.00 39,000.00 40,000.00 41,000.00 42,000.00 43,000.00 44,000.00 45,000.00 46,000.00 47,000.00 48,000.00 49,000.00 50,000.00 51,000.00 52,000.00 53,000.00 54,000.00 55,000.00 56,000.00 57,000.00 58,000.00 59,000.00 60,000.00 61,000.00 62,000.00 63,000.00 64,000.00 65,000.00 66,000.00 67,000.00 68,000.00 69,000.00 70,000.00 71,000.00 72,000.00 73,000.00 74,000.00 75,000.00 76,000.00 77,000.00 78,000.00 79,000.00 80,000.00 81,000.00 82,000.00 83,000.00 84,000.00 85,000.00 86,000.00 87,000.00 88,000.00 89,000.00 90,000.00
1Q16 2Q16 3Q16 4Q16 1Q17
-16.7% QoQ
66% 68% 64% 68%
34% 32%36% 32%
12,225 13,152 15,138 15,317
12,914
- 1,000.00 2,000.00 3,000.00 4,000.00 5,000.00 6,000.00 7,000.00 8,000.00 9,000.00
10,000.00 11,000.00 12,000.00 13,000.00 14,000.00 15,000.00 16,000.00 17,000.00 18,000.00 19,000.00 20,000.00
1Q16 2Q16 3Q16 4Q16 1Q17
Frozen, chilled seafood and relatedSolid sales growth
14%13%
11% 11%
10%
7%
6%8%
9%7%
10%8%
9%10%
8%
1Q16 2Q16 3Q16 4Q16 1Q17
Total
Brand
Private label
Sales (THB million) Quantity (Tons)
Gross Profit Margin (Percent)
+5.6% YoY
-15.7% QoQ
+2.8% YoY
Brand
Private label
Brand
Private label
1Q17 frozen and chilled seafood business sales were at THB 12.9bn, up 5.6% YoY. The improvement was driven mainly by:
Product repricing to reflect higher raw material prices. Chilled salmon business, while sales volume decline, reported an average selling price (ASP) up 39% YoY
Shrimp business see sales improvement driven by both growing volumes sales and higher ASP
While European salmon business gross margin was turning into positive during 1Q17, overall gross margin for the business still show a declined by 126bps YoY to 8.3%, mainly driven by high shrimp prices (+12.4% YoY)
39%
61%29%
71%
Page 42
PetCare, value-added and others
Page 43
PetCare, value-added and othersPetCare delivering strong operational performance
Total
Sales (THB Million) Quantity (Tons)
Normalized gross Profit Margin (Percent) 1Q17 PetCare and valued added segment sales were at THB 4,444mn, up 17.4% YoY, mainly thanks to solid growth in PetCare business
PetCare business continue to deliver strong growth through market expansion and product innovation, both of which has contributed to a marginal margin improvement YoY
Remark:*Including effect of Steam Pot sales reclassification in 3Q16 onwards (only QoQ effect), from Ambient seafood to Value-added products
**From 1Q17 onward, sales of scrap no longer apply “No-COGS” policy. With new cost allocation, the segment gross margin has shown a decline YoY
-2.3% QoQ
92% 95% 86%85%
8%5%
14%
15%
31,545 34,654 42,493
30,961 35,900
- 1,000.00 2,000.00 3,000.00 4,000.00 5,000.00 6,000.00 7,000.00 8,000.00 9,000.00 10,000.00 11,000.00 12,000.00 13,000.00 14,000.00 15,000.00 16,000.00 17,000.00 18,000.00 19,000.00 20,000.00 21,000.00 22,000.00 23,000.00 24,000.00 25,000.00 26,000.00 27,000.00 28,000.00 29,000.00 30,000.00 31,000.00 32,000.00 33,000.00 34,000.00 35,000.00 36,000.00 37,000.00 38,000.00 39,000.00 40,000.00 41,000.00 42,000.00 43,000.00 44,000.00 45,000.00 46,000.00 47,000.00 48,000.00 49,000.00 50,000.00
1Q16 2Q16 3Q16* 4Q16 1Q17
92% 98% 84% 90%
8% 2%16%
10%3,786 3,989 5,177 4,549 4,444
-
1,000.00
2,000.00
3,000.00
4,000.00
5,000.00
6,000.00
1Q16 2Q16 3Q16* 4Q16 1Q17
+17.4% YoY +13.8% YoY
+16.0% QoQ
Brand
Private label
Brand
Private label
7%
93% 93%
7%
27%24%
26% 25%22%
1Q16 2Q16 3Q16* 4Q16 1Q17**
Page 44
Remark: 1Shrimp & related business includes frozen shrimp, shrimp feed and value-added shrimp2Other seafood includes frozen cephalopod, crab, scallop, shellfish and other fish3Value-added business includes ready-to-eat products, maguro & cephalopod sashimi, local products, bakery products and snack4Other products include scrap, fishery and others
2017 Segment Profitability
THB 4,330 million
Gross Profit
Frozen, chilled
seafood and
related
PetCare, value
added and others
Ambient seafood
New segment
Total
Sales
(THB million)
Margin
(%)
Gross Profit
(THB million)
2,282
1,066
982
14,069
12,914
4,444
16.2%
8.3%
22.1%
31,427 13.8%
*Tuna business
*Sardine & Mackerel
*Ambient & Pouch Salmon
*Shrimp & related business1
*Frozen, chilled &
smoked salmon
*PetCare
*Value-added & others3
*Other seafood2
*Other products4
*Lobster
Page 45
Agenda
Key Highlights
Recent Developments
1Q17 Financial Results
2017 Business Outlook
Page 46
2017 Guidance
FY 2017
Sales THB 145-150bn
GPM Lower end of 15-16%
SG&A 10%
Effective interest rate No material change from 2016
Effective tax rate 15%
CAPEX Approx. THB 4.8bn
Dividend policy At least 50% dividend payout
Rationale: Strong headwind from high raw material prices and extreme competitive pressure
High currency volatility for Thai Baht, US Dollar and British Pound
Page 47
Category Highlight
Continue to profitably grow market share in European ambient marketsImproved profitability of the tuna business (COSI and Private Label business)European salmon business improvement
Operation improvement
New BusinessesDevelop King Oscar as a global brand and grow related businessLaunch Tuna Oil business (Marine Ingredients)Accelerate Global Foodservice and Emerging Markets initiatives
Successfully drive growth from investment in Red LobsterImproved business integration and collaboration globally Divest the loss-making fishing fleet business by 1H17
M&A / Post Merger
Integration
1
2
Accelerate Gii commercialization, both on new products and processes initiativesInnovation
Sustainability ‘Sea Change’ and Tuna Commitment sustainability programsDemonstrate leading capabilities in responsible sourcing and fair labor
3
4
5
Five key focus areas into 2017
After the challenging 2016, we are focusing on operational excellence into 2017
Page 48
Appendix
Page 49
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
0
5
10
15
20
25
TU SET
Share Capital Information
Stock Information
2012 2013 2014 2015 2016 2017
Dividend Policy
At least 50% of net profit
Major Shareholders
THB
Bloomberg/ Reuters TU TB/ TU.BK
Share price (5 May 2017) : THB 22.00
Historical price :
52-week high THB 22.80
52-week low THB 19.50
No. of paid up shares : 4,771.82mn
Par value : THB 0.25
Market Capitalization : THB 111.3bn
Chansiri Family20.5%
Niruttinanon Family 6.9%
Mitsubishi Corporation
7.3%
Thai NVDR10.5%
Social Security
Office 5.9%
Others49.0%
Source: SET and TU
As of 31 Mar 2017
Free float : 64.8%
Foreign ownership/ Foreign limit 33.5%/ 45.00%
Page 50
1Q17 Income Statement
Remark: *Including share of income from investment in associates
**The 1Q16 and 4Q16 figures were restated mainly due to reclassification of fishing fleet discontinued operations
***Normalized net profit exclude ALL one-off adjustments and items throughout the period
1Q17/ 1Q17/
1Q16 4Q16
Change Change
Sales 31,427 100% 31,210 100% 33,597 100% 0.7% -6.5%
Cost of sales (27,097) -86.2% (26,213) -84.0% (29,032) -86.4% 3.4% -6.7%
Gross profit 4,330 13.8% 4,996 16.0% 4,565 13.6% -13.3% -5.2%
SG&A expenses (3,448) -11.0% (3,394) -10.9% (3,295) -9.8% 1.6% 4.6%
FX gain (loss) 590 1.9% 264 0.8% (181) -0.5% 123.2% -424.9%
Other income* 750 2.4% 378 1.2% 229 0.7% 98.2% 227.6%
EBIT 2,221 7.1% 2,244 7.2% 1,317 3.9% -1.0% 68.6%
Finance cost (498) -1.6% (372) -1.2% (445) -1.3% 33.8% 11.9%
EBT 1,723 5.5% 1,872 6.0% 872 2.6% -8.0% 97.5%
Tax (199) -0.6% (350) -1.1% 278 0.8% -43.1% -171.5%
Profit (Loss) from discontinued operarion 36 0.1% (149) 0.0% (122) 0.0% 0 0.0%
Net income 1,560 5.0% 1,373 4.4% 1,151 3.4% 13.6% 35.6%
Net income (loss) attributable to:
Equity holders of the Company 1,469 4.7% 1,231 3.9% 902 2.7% 19.3% 62.8%
Non-controlling interests of the subsidiaries 91 0.3% 142 0.5% 249 0.7% -36.0% -63.4%
Earnings per share
Basic earnings per share 0.31 0.26 0.19 20.2% 61.4%
Diluted earnings per share 0.31 0.26 0.19 20.2% 61.4%
Exchange rate
THB/USD 35.11 35.90 35.39 -2.2% -0.8%
Normalized net profit 1,052 3.3% 1,082 3.5% 1,423 4.2% -2.8% -26.1%
Consolidated
(Unit: THB mn) 1Q17%
to sales1Q16**
%
to sales4Q16**
%
to sales
Page 51
Cash and cash equivalents* 470 0.3% 976 0.7% -51.8%
Trade and other receivables 16,161 11.5% 16,412 11.5% -1.5%
Inventories - net 39,130 27.8% 39,626 27.8% -1.3%
Other current assets 3,317 2.4% 3,064 2.2% 8.3%
Total current assets 59,079 42.0% 60,079 42.2% -1.7%
Fixed assets 23,337 16.6% 23,281 16.4% 0.2%
Goodwill and other intangible assets 28,956 20.6% 29,583 20.8% -2.1%
Other non-current assets 29,241 20.8% 29,424 20.7% -0.6%
Total Assets 140,613 100% 142,365 100% -1.2%
Bank overdrafts and short-term loans 12,627 9.0% 36,983 26.0% -65.9%
Trade and other payables 17,645 12.5% 17,429 12.2% 1.2%
Current portion of long-term loans 751 0.5% 765 0.5% -1.7%
Current portion of debentures - 0.0% 2,500 1.8% -100.0%
Current portion of finance lease liabilities 79 0.1% 82 0.1% -4.2%
Other current liabilities 881 0.6% 1,483 1.0% -40.6%
Total current liabilities 31,983 22.7% 59,242 41.6% -46.0%
Long-term loans from financial institutions 14,915 10.6% 963 0.7% 1448.3%
Debentures 36,293 25.8% 24,417 17.2% 48.6%
Finance lease liabilities - net of current portion 188 0.1% 208 0.1% -9.6%
Other non-current liabilities 9,333 6.6% 10,099 7.1% -7.6%
Total Liabilities 92,713 65.9% 94,930 66.7% -2.3%
Non-controlling interests of the subsidiaries 4,206 3.0% 4,193 2.9% 0.3%
Total Shareholders’ Equity 47,900 34.1% 47,436 33.3% 1.0%
Total liabilities and shareholders’ equity 140,613 100% 142,365 100% -1.2%
Change(Unit: THB mn) 1Q17% to total
assets2016
% to total
assets
Statement of Financial Position as of 31 March 2017
Remark: *Including short-term investments
Page 52
(Unit: THB mn) 1Q17 1Q16 Change
Profit before income tax 1,759 1,725 034
Adjustments for depreciation & amortisation expenses 679 702 (23)
Other adjustments (384) 447 (830)
Changes in operating assets and liabilities (95) 2,491 (2,586)
Cash flows receipts from operating activities 1,959 5,364 (3,406)
Net cash receipts (payments) from operating activities 1,695 5,168 (3,473)
Net cash payments for investing activities (892) (2,150) 1,258
Net cash receipts (payments) for financing activities (1,531) (5,354) 3,823
Net increase (decrease) in cash and cash equivalent (728) (2,337) 1,608
Cash and cash equivalents - opening balance 731 2,590 (1,859)
Exchange gain (loss) on cash and cash equivalents (16) 6 (22)
Cash and cash equivalents - closing balance (14) 259 (273)
CAPEX (1,005) (2,063) 1,059
Management Est. Free Cash Flows 786 4,483 (3,697)
Consolidated
1Q17 Statement of Cash Flow
Page 53
Corporate website: http://www.thaiuniongroup.com
IR website: http://www.thaiuniongroup.com/en/investor.ashx
E-mail: [email protected] Tel: +66 2298 0024
Thank you