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4Q17 Results Presentation21 February 2018
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
Agenda
Key Highlights
Recent Developments
4Q17 Financial Results
Business Outlook
Page 4
Agenda
Key Highlights
Recent Developments
4Q17 Financial Results
Business Outlook
Page 5
“With keen focuses on operation excellence,
efficient execution, and innovation, we are committed
to deliver sustainable and profitable growth for Thai
Union Group shareholders.”
Thiraphong ChansiriPresident and Chief Executive Officer
Page 6
2017: Exceed THB 6.0bn net income, record top line and dividend growth of 5%
GP
NP
18.1
6.0
Sales(THB bn)
136.5 +1.6%(+3.9% excl. FX)
YoY Chg% of 2017
sales
-9.0% 13.3%
+14.6%
OP 4.7 -30.8% 3.5%
4.4%
Remark: Operating margin = (COGS – SG&A)/sales
19.9
5.3
134.4
6.8
2017 2016
DPS(THB/share)
0.66 +4.8% 53.3%(Payout ratio)
0.63
Page 7
4Q17: Solid net profit growth while operating performance remained soft
GP
NP
4,484
1,404
Sales(THB mn)
35,105 +4.1%(+6.6% excl. FX)
YoY Chg % of sales
-1.0% 12.8%
+55.6%
OP885 -28.3% 2.5%
4.0%
Solid organic sales growth. 4Q17 sales
continued to improve YoY driven mainly by a
product repricing from increased raw material
prices
Rising raw material prices. Gross profit margin
remained under pressure at 12.8% resulted from
a high raw material price situation and USD
depreciation
Strict cost control. Despite stringent cost
control, 4Q17 SG&A to sales ratio was at 10.3%.
Excluding one-time expenses, the normalized
SG&A ratio was well-controlled at target of 10%.
Operating profit declined on weak
profitability, part of the operation weakness
was further pressured by one-time SG&A
expenses (one-time SG&A expenses of THB
119mn).
Net profit improved YoY. Despite a weak
profitability, the net profit was supported by
higher other income, and prudent FX and tax
management. .
Remark: Operating margin = (COGS – SG&A)/sales
Page 8
5,254
11,138
6,805
19,927
6,021
11,366
4,711
18,141
Financial Summary1
(THB million)
136,535
134,375
2017 Net Profit
up 14.6% YoY to
THB 6,021million
Stable ND/E despite high
raw material price
Share price movement
20162
(Jan- Dec 16 )
+24.3%
20172
(Jan- Dec,17 )
-5.7%
2016 ND/E
1.37x
2017 ND/E
1.38x
2017 Net profit up 14.6% YoY, record 2017 sales
Gross Profit
Total Sales
EBITDA
2017
2016
-9.0%
-30.8%
+14.6%
Q1’12
Q1’11
Net Profit
+2.1%
+1.6%
Source: 1TU; 2SET (Jan 4’16: THB16.9/share and Dec 30’16: THB21.0/share, Jan 4’17: THB21.1/share and Dec 29’17: THB19.9/share)
Operating Profit
2017
2016
2017
2016
2017
2016
2017
2016
Page 9
4Q17: Continued overall net profit stability, continued growth
28,606 30,642
32,602 33,333 31,210 34,401 35,050 33,715
31,42734,818 35,185 35,105
13.8%
16.9%17.3%
14.2%16.0% 15.9%
14.1%13.4% 13.8% 13.4% 13.2% 12.8%
5.3%4.3%
5.0%
2.3%
3.9% 4.4% 4.5%
2.7%
4.7%4.1%
4.9%4.0%
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 2Q17 3Q17 4Q17
Total sales (THB mn) GPM NPM
% GrowthYoY
Sales 2.4 1.3 7.2 1.7 9.1 12.4 7.5 1.1 0.7 1.2 0.4 4.1
Grossprofit
-5.2 6.3 7.4 3.9 26.6 4.5 -12.4 -4.2 -13.3 -14.5 -5.6 -1.0
Net profit 58.7 -7.2 -23.9 8.5 -19.0 16.9 -1.9 19.1 19.3 -7.6 8.9 55.6
Remark: Operating margin = (COGS – SG&A)/sales
*The 4Q16 figures were restated mainly due to reclassification of fishing fleet discontinued operations
Raw material prices rising
Page 10
Agenda
Key Highlights
Recent Developments
4Q17 Financial Results
Business Outlook
Page 11
Recent developments
New Product:Awards Recognitions:
Nov 2017: Thai Union awarded Outstanding Investor
Relations Awards for SET market capitalization of
over THB 100 billion at SET Awards 2017 ceremony
held at the Stock Exchange of Thailand. This is the
great honor of Thai Union and Investor Relations
team that the SET and investment community has
recognized our outstanding performance to engage
with investor relations activities.
Dec 2017: TU won
Investor Relations
Awards from
IR Magazines South
East Asia 2017,
receiving Best in
Sector; Consumer
staple, alongside with
another ten Thai listed
companiesFisho Alaska Salmon
Nov 2017: PTTGC and Thai Union have signed MoU for a research & development
partnership. The partnership will focus on the development of innovative and
environmentally friendly bio-based and petroleum-based materials and packaging
for the food industry.
Innovation:
Page 12
Recent developments Sustainability:
Dec 2017: TU received
2017 Best Sustainability
Report Award from the
Office of the Securities
and Exchange
Commission (SEC),
after releasing the
fourth Sustainability
Report in June.
Dec 2017 Thai Union and
Nestlé have launched a
demonstration boat to
promote human rights of
workers in the Thai
fishing industry. The boat
is the first of its kind in
Thailand.
Jan 2018: Thai Union’s Global Director for Sustainable
Development Dr. Darian McBain was named Sustainability Leader
of the Year at the prestigious edie Sustainability Leaders Awards
2018 held recently in London.
Dr. McBain’s role in establishing and implementing SeaChange®,
Thai Union’s sustainability strategy, along with numerous initiatives
and activities in line with SeaChange®, helped catapult her into
the top spot among the nine finalists for edie’s Sustainability
Leader of the Year. Other finalists in the category included
representatives from Proctor & Gamble, The Co-op, Herbert Smith
Freehills and more.
Page 13
Final dividend for the period: 1 Jul 17 to 31 Dec 17
DPS THB 0.34
Book closing date 7 March 2018
Payment date 23 April 2018
2017 dividend payment grew along with net profits
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 0.15 0.30 0.32 0.32 0.32
0.22
0.250.31 0.31 0.34
50.1%50.4%53.5%
50.6%50.7%50.0%
29.4%
51.3%
59.9%
50.5%
56.7%57.2% 52.3%
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 2017
THB/Share
DPS (LHS) Payout Ratio (RHS)
+5% YoY
+9.0% p.a.
Page 14
IR Thai Union Line@ Official Account
NEW WAY TO COMMUNICATE WITH THAI UNION INVESTOR RELATIONS
What can you find on this line account?
• Official announcements
• Official news releases
• Investor Relations Activities
• Information updates
• Others
Scan QR code or search for
@irthaiunion to join us today
Page 15
Agenda
Key Highlights
Recent Developments
4Q17 Financial Results
Business Outlook
TU’s Consolidated Results
Results by Business Unit
Page 16
“We are determined to grow cash return
and shareholder wealth. Cash is king.”
Joerg AyrleGroup Chief Financial Officer
Page 17
The key take away for 4Q17 results
Strong top line growth
Continuously weak GPM
• GPM dilution experienced in Petcare, Shrimp, Lobster and Sardines
& Mackerels
• Tuna GPM is stabilizing thanks to lower fish price and salmon
margin is recovering
Efficient cost control• Prudent cost control prompts normalized 9.9% 4Q17’s SG&A to
sales ratio (adjusted for one-off restructuring and relocation costs;
10.3% as reported), in line with yearly guidance
Mixed contribution
from Red Lobster
Non-operating items
support net profit
• Sales at 35.1bn, slightly below TU’s record in 3Q17 (35.2bn)
representing +4.1% growth, mainly coming from Thai operations
• At constant exchange rates, sales would have increased by 6.6%
vs. last year
• Prudent FX management policy posted strong FX gain in 2017
• Significant savings from discontinued operations
• Positive from interest yield and tax savings
• Negative share of profit due to seasonality and lower guest count
Page 18
4Q17: Profitability profile intact amid challenging environment
Remark: Operating margin = (COGS – SG&A)/sales
*The 3Q16 and 4Q16 figures were restated mainly due to reclassification of fishing fleet discontinued operations
Source: TU (Monthly tuna prices)
Amid the average quarterly tuna prices over the past 12 months , TU’s profitability remain resilient
Income contribution from other income and prudent FX and tax management support net profit margin
Total Sales (THB mn)
Tuna
Price Index
Gross Profit
Net Income
13.8%
16.9%17.3%
14.2%16.0% 15.9%
14.1%13.4% 13.8% 13.4% 13.2% 12.8%
5.3%4.3%
5.0%
2.3%
3.9% 4.4% 4.5%
2.7%
4.7%4.1%
4.9%4.0%
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 2Q17 3Q17 4Q17
1,103 1,102
1,430
1,047 1,257
1,503
1,4331,508
1,6331,763
2,010 2,033
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
Page 19
1,000
1,170
1,600 1,610
1,500
1,400 1,400 1,450 1,450
1,400
1,500
1,625 1,700 1,700
1,500
1,690 1,700
1,900 1,950 1,980
2,100
2,300
2,000
1,800
1,550
500
1,000
1,500
2,000
2,500
3,000
Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18
Tuna prices started to decline toward end-4Q17
1Q16 1,257
%Growth
QoQ20.1% 19.6% -4.7% 5.2% 8.3% 8.0% 14.0% 1.2%
%Growth
YoY13.9% 36.5% 0.2% 44.1% 30.0% 17.3% 40.2% 34.8%
2Q16 1,503 3Q16
1,433
4Q16 1,508
1Q17 1,633
2Q17 1,763
3Q17 2,010
4Q17 2,033
Page 20
USD mn 952
33,71531,427
34,818 35,185 35,105
4Q16* 1Q17 2Q17 3Q17 4Q17
SalesTHB mn
2017 Another consecutive record sales year
4Q17 sales grew by 4.1% YoY to THB 35,105mn.
Sales in US dollar term was the up 6.6% YoY,
driven by:
Ambient seafood sales delivered solid growth
despite Thai Baht appreciation YoY. Growth
was driven mainly by product repricing to
reflect high tuna raw material prices.
Chilled and frozen products saw sales
marginally improved YoY due to strong
domestic shrimp export business, but
weakness in the US market
Weak sales growth in Thai Baht term was partly
due to YoY Baht appreciation against US Dollar
(-6.9% YoY) during 4Q17.
TU continued to registered a growth of 1.6% YoY
to the record THB136.5bn during 2017 despite
strong Baht appreciation against USD. The sales
growth was mainly organic and driven by product
repricing. In US dollar term, 2017 has surpassed
USD4.0bn sales mark, an increase of 3.9% YoY
112,813 121,402 125,183
134,375 136,535
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2013 2014 2015 2016* 2017YoYGrowth 5.7% 7.6% 3.1%
895 1,015
+4.1% YoY (+6.6% excluding FX impact)
-0.2% QoQ
7.3%
4,0293,808USD mn
Remark: *4Q16 figures were restated mainly due to reclassification of fishing fleet discontinued operations
(+3.9% excl FX)
1,054 1,065
1.6%
Page 21
4Q16 4Q17
4Q17 good sales growth, slowed 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
+4.1% YoY +1.6% YoY
6.6% YoY
Before currency impacts
35,105
33,715
-73 +128+426
+1,402
-80-91
+14%
+5% -7%-6%
Tuna Shrimp
& related
business1
Sardine
&
Mackerel
Salmon Pet
Care
Value
added
& other
products2
+10%
-1%
-756
USD
effectEUR
effect
+245
-3% +4%
+189
+4%
Lobster 2016 2017
3.9% YoY
Before currency impacts
136,535
134,375
-781 +371+1,441+2,104
-349 -1,108
+5%
+5%-4%-13%
Tuna Shrimp
& related
business1
Sardine
&
Mackerel
Salmon Pet
Care
Value
added
& other
products2
+9% -3%
-1,978
USD
effectEUR
effect
+854
-3% +3%
+1,606
+10%
Lobster
Page 22
Brand, 36%
**FS - Brand, 6%
**FS - Private Label, 6%
Private Label, 53%
Strong growth in emerging market and Thailand
Sales Breakdown by Business
Sales Breakdown by Geographic
2017 Sales contribution in key markets marginally
shifted in favor of domestic and emerging market,
due partly to strong penetration effort in the
emerging markets, such as China, and weak
currency in key markets.
US market sales contribution was at 38%,
European market at 32%, Japan at 6% and
Thailand at 10%.
2017 branded sales mix slightly increase to 42%
(up from 41% during 2016) leaving the private
label sales contributing the remaining 58% of
2017 sales
2017 total branded sales increased by 2.5% YoY,
mainly due to the solid brand presence in
European and US markets
On the other hand, private label sales also
continue to show a marginal growth rate of 1.0%
YoY, resulting in diluted sales contribution
compared to 2016
Remark: *Others represent Asia, Australia, Middle East, Canada, Africa and South America
**FS stands for Food Service
40% 44% 42% 39% 38%
30% 29% 29% 33% 32%
7% 7% 8% 8% 10%8% 7% 6% 6% 6%
14% 13% 14% 13% 15%
0%
20%
40%
60%
80%
100%
2013 2014 2015 2016 2017
Others*
Japan
Domestic
Europe
USA
THB 136,535mn
2017
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% 13.3%
14,222
19,020 19,501 19,927 18,141
-
5,000
10,000
15,000
20,000
25,000
2013 2014 2015 2016 2017
-9.0% YoY
4,531 4,330 4,669 4,6584,484
13.4% 13.8% 13.4% 13.2% 12.8%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
24.0%
26.0%
28.0%
30.0%
4Q16* 1Q17 2Q17 3Q17 4Q17
Gross margin under pressure from high raw material pricesGross ProfitTHB mn
4Q17 Gross profit of THB 4,484mn, slightly
declined YoY, despite further margin compression
as the tuna price remain high through much of
4Q17 and the impact of high priced inventory. the
gross profit was also affected by strong Baht
appreciation (6.9% YoY and 1.3% QoQ) against
USD.
4Q17 margin was at 12.8%, down 66bps YoY. The
margin remained under pressure due to:
Rising tuna raw material prices (+34.8% YoY)
affect gross margin of tuna business,
particularly in European markets,
PetCare business’ gross margin was under
pressure amid rising tuna raw material prices
THB currency appreciated against GBP and
USD, YoY
2017 gross profit was at THB 18,141mn, slightly
down 0.9% YoY, driven mainly by solid sales
growth has offset part of the margin
deterioration.
-1.0% YoY
-3.7 QoQ
GPM
Remark: *The 4Q16 figures were restated mainly due to reclassification of fishing fleet discontinued operations
Page 24
Operating profit: Strong cost control continuedOperating ProfitTHB mn
4Q17 Operating profit of THB 885mn, down 28.3%
YoY, driven by weak profitability from rising raw
material prices and a number of business
restructuring expenses.
Due to stringent cost control, 4Q17 normalized
SG&A to sales ratio remained at a controlled level
of 9.9%, below the guidance of 10%. Note that
the reported 10.3% ratio as reported in the
financial statements also include one-time
business restructuring expenses in European
business and office relocation in the US.
2017 SG&A to sales ratio was 9.8%, well below
the full year target of 10%, which is mostly
attributed to a strong cost control across the
company
1,236881
1,627
1,319
885
3.7%
2.8%
4.7%3.7%
2.5%1.0%
3.0%
5.0%
7.0%
9.0%
11.0%
13.0%
15.0%
4Q16* 1Q17 2Q17 3Q17 4Q17
-28.3% YoY
-32.9% QoQ
3,988
6,990 6,785 6,805
4,711
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
2013 2014 2015 2016 2017
OP Margin
-30.8% YoY
OPM 3.5% 5.8% 5.4% 5.1% 3.5%
Remark: *4Q16 figures were restated mainly due to reclassification of fishing fleet discontinued operations
SG&A% 9.8% 11.0% 8.7% 9.5% 10.3%
Page 25
FX hedging impact adjustment*
With Baht significantly appreciating against key
foreign currencies, the company has incurred a
significant FX impact during 2017. Should the
hedge accounting been adopted and hedging on
operating transactions be adjusted into gross
profits and operating profits, the impact is
estimated as follow:
Gross profits: 2017 gross profits of THB 19.0bn,
down 4.8% YoY (vs 9.0% decline on reported P&L)
Operating profits: 2017 operating profits of THB
5.6bn, down 18.6% YoY (vs 30.8% decline on
reported P&L)
TU is currently analyzing if it can early adopt
hedge accounting in FY18 (provided it is allowed
under Thai GAAP). This would allow TU Group to
disclose hedging effects in Sales and COGS line.
Remark: *Base on the assumption that 70% of FX in particular period are realized
4,403 4,742 4,697 4,851 4,730
19,985 19,019
13.1%
15.1%
13.5% 13.8% 13.5%
14.9%13.9%
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
24.0%
26.0%
28.0%
30.0%
4Q16 1Q17 2Q17 3Q17 4Q17 2016 2017
1,108 1,294
1,655 1,511
1,131
6,863
5,590
3.3%4.1% 4.8% 4.3%
3.2%5.1%
4.1%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
4Q16 1Q17 2Q17 3Q17 4Q17 2016 2017
+7.4% YoY -4.8% QoQ
-2.5% YoY
+2.1% YoY -18.6% QoQ
-25.2% YoY
Adjusted Gross ProfitTHB mn
Adjusted Operating ProfitTHB mn
Page 26
EBITDA
Margin9.2% 7.0% 9.1% 8.4% 8.3%
EBITDA up 40% in 4Q17 supported by FX managementEBITDATHB mn
2,111
2,899 2,874 2,990 2,951
6.3%
9.2% 8.3% 8.5% 8.4%
3.0%
8.0%
13.0%
18.0%
23.0%
28.0%
4Q16* 1Q17 2Q17 3Q17 4Q17
+40% YoY
-1.3% QoQ
9,823
7,867
10,999 11,269 11,366
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2012 2013 2014 2016* 2017
+0.9% YoY
Despite a weak operating profit, TU reported
4Q17 EBITDA of THB 2,951mn, up 40% YoY but
down 1.3% QoQ. The increase was driven mostly
by prudent FX management.
2017 EBITDA was at a record level at THB
11,366mn, up 0.9% YoY
EBITDAMargin
Remark: *The 4Q16 and 2016 figures were restated mainly due to reclassification between other income and finance cost
Page 27
2017 Record profits, despite challenging environmentNet ProfitTHB mn
902
1,469 1,411
1,7371,404
2.7%
4.7%4.1%
4.9%4.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
4Q16 1Q17 2Q17 3Q17 4Q17
+55.6% YoY
-19.2% QoQ
2,853
5,092 5,302 5,254 6,021
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2013 2014 2015 2016 2017
+14.6% YoY
NPM
Despite the challenging operating environment,
4Q17 net profit of THB 1,404mn, up 55.6% YoY
The net profit improvement was driven by:
Increased other income from gains from sales
of assets
Baht appreciation against US dollar put
pressure on profit margin, but resulted in
THB351mn FX gains during the quarter.
Deferred tax adjustment in response to tax rate
change in France and the US.
2017 net profit was THB6,021mn, up 14.6% YoY,
the annual record profits
Seasonally weak Red Lobster contribution
affected by guest count and weather issue in the
US. Operationally, Red Lobster did not reach
break even in 2017
On Red Lobster investment, no net profit
improvement vs 4Q16. 2017 contribution on TU
share of profit is -USD6mn
NPM 2.5% 4.2% 4.2% 3.9% 4.4%
Page 28
Normalized net profit was at THB1,338mnNormalized Net ProfitTHB mn
Norm NP
Margin
Excluding the one-off quarter-end items, 4Q17
normalized net profit was at THB 1,338mn,
representing 6.0% decline YoY
One-off positive items during 4Q17 of THB 104mn
comprised of:
European business restructuring expenses
(-THB77mn)
Expenses from relocating and consolidating US
operating offices (-THB42mn),
Capital gains from sales of USPN assets
(THB70mn), and
Deferred tax basis in response to tax rate
adjustment in France and in the US
(+THB152mn).
Loss from discontinued fishing fleet operation
(-THB37mn)
We finalized the disposal of the loss-making
fishing fleet business in Aug 2017
Remark: The normalized net profit still include the realized FX gains/losses from normal business operation
1,423
1,052
1,3721,590
1,338
4.2% 3.3% 3.9% 4.5% 3.8%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
4Q16 1Q17 2Q17 3Q17 4Q17
-6.0% YoY
-15.9% QoQ
1,404
+77
-79
1,338
Fishing fleets DO
4Q17
Reported NP
4Q17
Normalized NP
-70
-152
+37
Deferred
tax adjustment
+42
Capital
gain
from
sales of assets
EU business Restructuring US office
relocation
Page 29
0.98
0.60
1.07 1.10 1.26
2012 2013 2014 2016 2017
EPS: Solid growth despite operational headwinds
EPS*THB
0.19
0.310.29
0.37
0.29
4Q16 1Q17 2Q17 3Q17 4Q17
+55.6% YoY
-19.2% QoQ 4Q17 EPS was at THB 0.29, up 55.6% YoY, despite
challenging operational headwinds
Remark: *EPS in this slide represents fully diluted EPS based on current number of shares of 4,771,815,496
+14.6% YoY
Page 30
5,544
2,938
2016 2017
2017 free cash flow remain positive
Annual Free Cash FlowTHB mn
10
1,049
1,751
280 -142
4Q16 1Q17 2Q17 3Q17 4Q17
Quarterly Free Cash FlowTHB mn
Remark: Change definition of Free Cash Flow; 1Cash Conversion Rate = FCF / EBIT; FCF= EBITDA-Changes in net working capital –
Change in other assets& Liabilities + non-cash expenses - CAPEX
Cash
Conversion
Rate10.01 0.47 0.8 0.12 -0.07
Cash
Conversion
Rate10.67 0.34
Despite rising raw material prices, 2017 Free cash
flow (FCF) remain positive at THB 3.0bn, due
mainly to profitable operation, stringent working
capital control and prudent capex spending
Page 31
2016
Securing long-term funding
Interest-bearing debts of THB 67,297mn
42%
2%
Long-term loan by maturityTHB 50,881mn
By Maturity
2021 onwards
2020
2019
2018
Long-term
Debt
2017
Current
Portion
of Long-
term Debt
& finance
lease
Short-term
Loan
76%
2%
23%
39%
5%
56%
EUR
97.7% 98.1%
1.3% 0.9%
1.0% 1.0%
2016 2017
By Currency
USD
THB
THB 65,918mn THB 67,449mn
Page 32
2017: Debt profile affected by lower than planned EBITDA, NWC increase and Capex, commitment to strong dividend policy
+319+901
+4,737
+858 -1,823+1,614
Free Cash Flow* THB 2,384 mn
Unit: THB mn
ND/E 1.37x
Kd = 2.74%
ND/E 1.38x
Kd = 3.21%
66,419
+933
+2,471
-11,36664,942
Net Debt
as of
31 Dec 2016
Net Debt
as of
31 Dec 2017
+3,399
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
**New definition of free cash flow, excluding income tax paid***Adjusted net debt exclude the convertible preferred unit value USD 345mn
-566
Other
Investing &
Financing activities
CAPEXOther non-
cash
expenses
Tax
payments
Proceeds
from sales of
long term
investments
Cash paid for
NCI in
subsidiaries
Net interest
paid
Dividends
paid
Change in
other assets
and
liabilities
EBITDA Change in
net working
capital
Income tax paid and other investing & financing activities
Stable debt profile, despite rising inventory
Adjusted ND/E= 1.13x***
Page 33
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
Remark: *Reported figures as of 23 February 2016. The 4Q15 and 2015 figures were restated mainly due to a fishing fleet- related losses
an accounting adjustment as a result of the new policy on valuation of financial derivatives according to TFRS.
Debt remains under control, improved ROE
44,438 41,070 42,926 43,910
129
123
113114
FY14 FY15* FY16 FY17
WC (THB mn) WC Day
Net WC3
1.38x1.37x
0.76x0.85x
FY17FY16FY15*FY14
13.7%
11.8%11.9%12.2%
FY17FY16FY15*FY14
ROE1
126118124131
FY17FY16FY15FY14
INV Days
ND/E4
8.9%10.6%
12.0%12.5%
FY17FY16*FY15FY14
ROCE2
5.92x5.85x
3.40x4.25x
FY17FY16FY15FY14
Debt to EBITDA
Page 34
Agenda
Key Highlights
Recent Developments
4Q17 Financial Results
Business Outlook
TU’s Consolidated Results
Results by Business Unit
Page 35
Key operating impact: Raw material prices begin to consolidate in 4Q17
Source: Thai Union Group and http://fishpool.eu/price-information/spot-prices/history/
Raw material prices
Continuous rise over 2017 but
softening towards Y/E
Quite stable over the
last months but real
decrease compared
to last year
Tuna price closed at USD 1,550/ton in January. In 4Q17,
average price was at USD 2,033/ton (+34.8% YoY, +1.2%
QoQ)
Shrimp price closed at THB 180/kg in January. In 4Q17,
average price was at THB 175/kg (-3.5% YoY, -0.6% QoQ)
Salmon price closed at NOK 55/kg in January, . In 4Q17,
average price was at NOK 51/kg (-25.4% YoY, -10.8% QoQ)
Page 36
Exchange rate
Key operating impact:
Brexit vote
Almost stable since Brexit vote
Continuous depreciation in 2017
USD/THB closed at 31.89 in January. In 4Q17, average
USD/THB was at 32.95 (-6.9% YoY, -1.3% QoQ)
EUR/THB closed at 38.87 in January. In 4Q17, average
EUR/THB was at 38.78 (+1.5% YoY, -1.1% QoQ)
GBP/THB closed at 44.06 in January, . In 4Q17, average
GBP/THB was at 43.74 (-0.5% YoY, +0.1% QoQ)
USD/THB EUR/THB
Page 37
Thai Union’s global footprint
Page 38
42%
45%
3 strategic business segments
Ambient seafoodSales: THB 61,145 mn
PetCare, value added and
othersSales: THB 18,074 mn
Frozen, chilled seafood
and relatedSales: THB 57,315 mn
Frozen, chilled &
smoked salmon
Tuna business
Other seafood2Sardine & MackerelAmbient & Pouch
Salmon
Shrimp & related
business1 PetCare
Value-added
business3
Total 2017 sales: THB 136,535 mn
Other products4
57%43%
Sales Split:
35%65%
9%
91%
13%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 39
50% 51%
50% 49%
375,916
364,726
- 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 99,000.00 100,000.00 101,000.00 102,000.00 103,000.00 104,000.00 105,000.00 106,000.00 107,000.00 108,000.00 109,000.00 110,000.00 111,000.00 112,000.00 113,000.00 114,000.00 115,000.00 116,000.00 117,000.00 118,000.00 119,000.00 120,000.00 121,000.00 122,000.00 123,000.00 124,000.00 125,000.00 126,000.00 127,000.00 128,000.00 129,000.00 130,000.00 131,000.00 132,000.00 133,000.00 134,000.00 135,000.00 136,000.00 137,000.00 138,000.00 139,000.00 140,000.00 141,000.00 142,000.00 143,000.00 144,000.00 145,000.00 146,000.00 147,000.00 148,000.00 149,000.00 150,000.00 151,000.00 152,000.00 153,000.00 154,000.00 155,000.00 156,000.00 157,000.00 158,000.00 159,000.00 160,000.00 161,000.00 162,000.00 163,000.00 164,000.00 165,000.00 166,000.00 167,000.00 168,000.00 169,000.00 170,000.00 171,000.00 172,000.00 173,000.00 174,000.00 175,000.00 176,000.00 177,000.00 178,000.00 179,000.00 180,000.00 181,000.00 182,000.00 183,000.00 184,000.00 185,000.00 186,000.00 187,000.00 188,000.00 189,000.00 190,000.00 191,000.00 192,000.00 193,000.00 194,000.00 195,000.00 196,000.00 197,000.00 198,000.00 199,000.00 200,000.00 201,000.00 202,000.00 203,000.00 204,000.00 205,000.00 206,000.00 207,000.00 208,000.00 209,000.00 210,000.00 211,000.00 212,000.00 213,000.00 214,000.00 215,000.00 216,000.00 217,000.00 218,000.00 219,000.00 220,000.00 221,000.00 222,000.00 223,000.00 224,000.00 225,000.00 226,000.00 227,000.00 228,000.00 229,000.00 230,000.00 231,000.00 232,000.00 233,000.00 234,000.00 235,000.00 236,000.00 237,000.00 238,000.00 239,000.00 240,000.00 241,000.00 242,000.00 243,000.00 244,000.00 245,000.00 246,000.00 247,000.00 248,000.00 249,000.00 250,000.00 251,000.00 252,000.00 253,000.00 254,000.00 255,000.00 256,000.00 257,000.00 258,000.00 259,000.00 260,000.00 261,000.00 262,000.00 263,000.00 264,000.00 265,000.00 266,000.00 267,000.00 268,000.00 269,000.00 270,000.00 271,000.00 272,000.00 273,000.00 274,000.00 275,000.00 276,000.00 277,000.00 278,000.00 279,000.00 280,000.00 281,000.00 282,000.00 283,000.00 284,000.00 285,000.00 286,000.00 287,000.00 288,000.00 289,000.00 290,000.00 291,000.00 292,000.00 293,000.00 294,000.00 295,000.00 296,000.00 297,000.00 298,000.00 299,000.00 300,000.00 301,000.00 302,000.00 303,000.00 304,000.00 305,000.00 306,000.00 307,000.00 308,000.00 309,000.00 310,000.00 311,000.00 312,000.00 313,000.00 314,000.00 315,000.00 316,000.00 317,000.00 318,000.00 319,000.00 320,000.00 321,000.00 322,000.00 323,000.00 324,000.00 325,000.00 326,000.00 327,000.00 328,000.00 329,000.00 330,000.00 331,000.00 332,000.00 333,000.00 334,000.00 335,000.00 336,000.00 337,000.00 338,000.00 339,000.00 340,000.00 341,000.00 342,000.00 343,000.00 344,000.00 345,000.00 346,000.00 347,000.00 348,000.00 349,000.00 350,000.00 351,000.00 352,000.00 353,000.00 354,000.00 355,000.00 356,000.00 357,000.00 358,000.00 359,000.00 360,000.00 361,000.00 362,000.00 363,000.00 364,000.00 365,000.00 366,000.00 367,000.00 368,000.00 369,000.00 370,000.00 371,000.00 372,000.00 373,000.00 374,000.00 375,000.00 376,000.00 377,000.00 378,000.00 379,000.00 380,000.00 381,000.00 382,000.00 383,000.00 384,000.00 385,000.00 386,000.00 387,000.00 388,000.00 389,000.00 390,000.00 391,000.00 392,000.00 393,000.00 394,000.00 395,000.00 396,000.00 397,000.00 398,000.00 399,000.00 400,000.00
2016 2017
42% 43%
58% 57%
61,077 61,145
- 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
2016 2017
55% 49% 51% 50% 56%
45% 51%49% 50% 44%
88,415 87,643 95,773 92,783 88,523
- 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
4Q16 1Q17 2Q17 3Q17 4Q17
Ambient SeafoodProduct price adjustment taking foothold
Sales (THB million) Quantity (Tons)
Gross Profit Margin (Percent) 4Q17 ambient seafood business sales were THB 14.9bn, up 7.3% YoY. While the volume sales remain relatively stable, the sales growth was largely attributable selling price adjustment to reflect higher raw material prices.
4Q17 Gross profit margin was at 15.2%, up 119bps YoY, due to ability to eventually pass on high raw material prices during the year
2017 ambient seafood business sales was at THB61.1bn, flat YoY, due to price hike prompted weaker demand. The increased tuna price by 30% YoY has put pressure on the business 2017 gross profit margin.
Remark: 2016 sales of branded and private label sales were reclassified due to sales reclassification at Rugen Fisch
*Including effect of Steam Pot sales reclassification in 3Q16 onwards, from Ambient seafood to Value-added products
+7.3% YoY
-6.1% QoQ
+0.1% YoY
-4.6% QoQ
Brand
Private label
Brand
Private label
19% 18%20% 19%
16%
9% 14%7% 11%
14%
14% 16% 15% 16%15%
4Q16 1Q17 2Q17 3Q17 4Q17
Total
Brand
Private label
48% 41% 41% 41% 49%
52% 59%59% 59% 51%
13,852 14,069 16,371 15,836 14,869
- 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
4Q16 1Q17 2Q17 3Q17 4Q17
+0.1% YoY -3.0% YoY
22% 19
%
10% 11%
17%15%
2016 2017
Page 40
33% 30%
67% 70%
239,156 248,256
- 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 99,000.00 100,000.00 101,000.00 102,000.00 103,000.00 104,000.00 105,000.00 106,000.00 107,000.00 108,000.00 109,000.00 110,000.00 111,000.00 112,000.00 113,000.00 114,000.00 115,000.00 116,000.00 117,000.00 118,000.00 119,000.00 120,000.00 121,000.00 122,000.00 123,000.00 124,000.00 125,000.00 126,000.00 127,000.00 128,000.00 129,000.00 130,000.00 131,000.00 132,000.00 133,000.00 134,000.00 135,000.00 136,000.00 137,000.00 138,000.00 139,000.00 140,000.00 141,000.00 142,000.00 143,000.00 144,000.00 145,000.00 146,000.00 147,000.00 148,000.00 149,000.00 150,000.00 151,000.00 152,000.00 153,000.00 154,000.00 155,000.00 156,000.00 157,000.00 158,000.00 159,000.00 160,000.00 161,000.00 162,000.00 163,000.00 164,000.00 165,000.00 166,000.00 167,000.00 168,000.00 169,000.00 170,000.00 171,000.00 172,000.00 173,000.00 174,000.00 175,000.00 176,000.00 177,000.00 178,000.00 179,000.00 180,000.00 181,000.00 182,000.00 183,000.00 184,000.00 185,000.00 186,000.00 187,000.00 188,000.00 189,000.00 190,000.00 191,000.00 192,000.00 193,000.00 194,000.00 195,000.00 196,000.00 197,000.00 198,000.00 199,000.00 200,000.00 201,000.00 202,000.00 203,000.00 204,000.00 205,000.00 206,000.00 207,000.00 208,000.00 209,000.00 210,000.00 211,000.00 212,000.00 213,000.00 214,000.00 215,000.00 216,000.00 217,000.00 218,000.00 219,000.00 220,000.00 221,000.00 222,000.00 223,000.00 224,000.00 225,000.00 226,000.00 227,000.00 228,000.00 229,000.00 230,000.00 231,000.00 232,000.00 233,000.00 234,000.00 235,000.00 236,000.00 237,000.00 238,000.00 239,000.00 240,000.00 241,000.00 242,000.00 243,000.00 244,000.00 245,000.00 246,000.00 247,000.00 248,000.00 249,000.00 250,000.00
2016 2017
33% 30% 28% 30% 31%
67%70% 72% 70% 69%
64,837 54,015
62,257 67,302 64,681
- 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
4Q16 1Q17 2Q17 3Q17 4Q17
Frozen, chilled seafood and relatedResilient business outlook
12%
10%11% 11%
10%
9%7%
9% 9%9%
10%8%
10% 10% 9%
4Q16 1Q17 2Q17 3Q17 4Q17
Total
Brand
Private label
Sales (THB million) Quantity (Tons)
Gross Profit Margin (Percent) 4Q17 frozen and chilled seafood business sales were at THB 15.7bn, up 2.4% YoY. The increase YoY was driven mainly by focusing on selling higher-value added food improved export sales
With European salmon business gross profit margin remained positive for fifth consecutive quarters in 4Q17 and stable margin profile for shrimp business, 4Q17 gross margin for the business remain stable at 9.2% (from 9.6% in 4Q16)
2017 frozen, chilled seafood and related business sales were at THB57.3bn, up 2.7% YoY, while the gross margin was resilient at 9.2% (GPM: 9.4% in 2016)
Brand
Private label
Brand
Private label
+2.4% YoY
+6.2% QoQ
+2.7% YoY
67% 65%
33% 35%
55,832 57,315
- 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
2016 2017
68% 63% 64% 66% 65%
32%37% 36% 34% 35%
15,317 12,914 13,944 14,770 15,688
- 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
4Q16 1Q17 2Q17 3Q17 4Q17
-0.2% YoY
-3.9% QoQ
+3.8% YoY
12% 10
%
8%9%
9% 9%
2016 2017
Page 41
90% 91%
10% 9%139,646
151,097
- 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 99,000.00 100,000.00 101,000.00 102,000.00 103,000.00 104,000.00 105,000.00 106,000.00 107,000.00 108,000.00 109,000.00 110,000.00 111,000.00 112,000.00 113,000.00 114,000.00 115,000.00 116,000.00 117,000.00 118,000.00 119,000.00 120,000.00 121,000.00 122,000.00 123,000.00 124,000.00 125,000.00 126,000.00 127,000.00 128,000.00 129,000.00 130,000.00 131,000.00 132,000.00 133,000.00 134,000.00 135,000.00 136,000.00 137,000.00 138,000.00 139,000.00 140,000.00 141,000.00 142,000.00 143,000.00 144,000.00 145,000.00 146,000.00 147,000.00 148,000.00 149,000.00 150,000.00 151,000.00 152,000.00 153,000.00 154,000.00 155,000.00 156,000.00 157,000.00 158,000.00 159,000.00 160,000.00
2016 2017
91%91%
9%9%
17,467
18,074
14,000.00
15,000.00
16,000.00
17,000.00
18,000.00
19,000.00
2016 2017
PetCare, value-added and othersPetCare profitability under pressure
Total
Sales (THB Million) Quantity (Tons)
Gross Profit Margin (Percent) 4Q17 PetCare and valued added segment sales were at THB 4,548mn, flat both YoY and QoQ. While the sales reclassification on the value-added business prompt some decline in value-added business sales, petfood business still report a solid sales growth of 9% YoY.
Gross margin has declined from last year, mainly driven by the reclassification in the cost structure for the sales of scrap, while the PetCare business’ profit margin was under pressure due to rising tuna raw material price.
Remark:*Including effect of Steam Pot sales reclassification in 3Q16 onwards, 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
88% 93% 90% 90% 89%
12% 7% 10% 10% 11%36,834 35,900 36,884 38,454 39,862
- 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
4Q16 1Q17 2Q17 3Q17 4Q17
90% 93% 88% 91% 92%
10% 7% 12% 9% 8%
4,546 4,444 4,502 4,580 4,548
-
1,000.00
2,000.00
3,000.00
4,000.00
5,000.00
6,000.00
4Q16 1Q17 2Q17 3Q17 4Q17
25%22%
20%16% 17%
4Q16 1Q17** 2Q17** 3Q17** 4Q17
Brand
Private label
Brand
Private label
0.04% YoY
-0.7% QoQ
+3.5% YoY +8.2% YoY
+3.7% QoQ
+8.2% YoY
Adjusted** 25%
19%
2016 2017
Page 42
Global Presence
U.S. And
Canada
40%Europe
32%
Thailand
10
%
19%
Others
Page 43
US & Canada, Sales growth hinder by currency
2017 US and Canada sales was at THB54.5bn,
down by 2.0% YoY. In US dollar term, the sales
actually grew by 2.2% YoY to USD 1.6bn.
Chicken of the Seas has launched sustainability
program SeaChange® as part of raising consumer
awareness for sustainable seafood
Frozen business is facing challenges from
disintermediation from customers
Red Lobster has contributed to sales growth in
the company’s frozen business
Remark: *4Q16 figures were restated mainly due to reclassification of fishing fleet discontinued operations
14,39313,190 13,467 13,753 14,054
55,580 54,465
4Q16 1Q17 2Q17 3Q17 4Q17 2016 2017
Sales:THB
-2.4% YoY
+2.2% QoQ
-2.0% YoY
Page 44
Europe: Stable growth despite challenges
2017 European sales was at THB43.2bn, down by
1.2% YoY. In US dollar term, the sales actually
grew by 2.9% YoY to USD 1.3bn.
Rising tuna raw material price couple with the
currency depreciation hurt product demand.
European salmon business see sales weakness
while 2017 profit margin has been improved from
2016 level
Fish oil refinery is due to start operation in 2018,
which should enhance value-added business
Remark: *4Q16 figures were restated mainly due to reclassification of fishing fleet discontinued operations
10,134 9,75811,949 11,183 10,295
43,722 43,185
4Q16 1Q17 2Q17 3Q17 4Q17 2016 2017
Sales:THB
+1.6% YoY
-7.9% QoQ
-1.2% YoY
Page 45
Thailand: Strong growth through new product launches
2017 Thailand sales was at THB13.0bn, up by
17.3% YoY.
Sales are driven by tuna product repricing to
reflect the high tuna raw material costs
TU has launched new initiative products into Thai
market such as the frozen seafood brand Qfresh
and shrimp snack Monori
TU shrimp business deliver higher exports sales
driven by increased volume and improved
profitability
Remark: *4Q16 figures were restated mainly due to reclassification of fishing fleet discontinued operations
2,8392,549
2,803
4,317
3,342
11,088
13,010
4Q16 1Q17 2Q17 3Q17 4Q17 2016 2017
Sales:THB
+17.7% YoY
-22.6% QoQ
+17.3% YoY
Page 46
EM and Rest of the world: New market penetration
2017 Emerging markets sales of THB 25.9bn, up
8.0% YoY.
The initiatives to sell frozen products into China
through both own brand King Oscar and
business partnership with Alibaba.
Remark: *4Q16 figures were restated mainly due to reclassification of fishing fleet discontinued operations
6,153 5,9316,598
5,932
7,414
23,95425,875
4Q16 1Q17 2Q17 3Q17 4Q17 2016 2017
Sales:THB
+20.5% YoY
+25.0% QoQ
+8.0% YoY
Page 47
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 18,141 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)
9,462
5,297
3,382
61,145
57,315
18,074
15.5%
9.2%
18.7%
136,535 13.3%
*Tuna business
*Sardine & Mackerel
*Ambient & Pouch Salmon
*Shrimp & related business1
*Frozen, chilled &
smoked salmon
*PetCare
*Value-added & others3
*Other seafood2
*Other products4
*Lobster
Page 48
Agenda
Key Highlights
Recent Developments
4Q17 Financial Results
Business Outlook
Page 49
2018 Guidance
FY 2018
Sales +5% YoY
GPM Below 15%
SG&A Below 10%
Effective interest rate No material change from 2017
Effective tax rate 15%
CAPEX Approx. THB 4.8bn
Dividend policy At least 50% dividend payout
Page 50
Appendix
Page 51
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
0
5
10
15
20
25
2013 2014 2015 2016 2017 2018
TU SET
Share Capital Information
Stock Information
Dividend Policy
At least 50% of net profit
Major Shareholders
THB
Bloomberg/ Reuters TU TB/ TU.BK
Share price (20 Jan 2018) : THB 20.40
Historical price :
52-week high THB 22.70
52-week low THB 17.70
No. of paid up shares : 4,771.82mn
Par value : THB 0.25
Market Capitalization : THB 97.3bn
Chansiri Family21.0%
Niruttinanon Family 6.9%
Mitsubishi Corporation
7.3%
Thai NVDR7.4%
Social Security
Office 6.2%
Others51.3%
Source: SET and TU
As of 29 December 2017
Free float : 65.9%
Foreign ownership/ Foreign limit 33.2%/ 45.00%
Page 52
4Q17/ 4Q17/
4Q16 3Q17
Change Change
Sales 35,105 100% 33,715 100% 35,185 100% 4.1% -0.2%
Cost of sales (30,621) -87.2% (29,184) -86.6% (30,528) -86.8% 4.9% 0.3%
Gross profit 4,484 12.8% 4,531 13.4% 4,658 13.2% -1.0% -3.7%
SG&A expenses (3,599) -10.3% (3,295) -9.8% (3,339) -9.5% 9.2% 7.8%
FX gain (loss) 351 1.0% (181) -0.5% 275 0.8% -293.6% 27.7%
Other income* 643 1.8% 280 0.8% 715 2.0% 129.6% -10.0%
EBIT 1,880 5.4% 1,334 4.0% 2,308 6.6% 40.9% -18.6%
Finance cost (533) -1.5% (505) -1.5% (547) -1.6% 5.6% -2.5%
EBT 1,347 3.8% 829 2.5% 1,762 5.0% 62.4% -23.5%
Tax 230 0.7% 280 0.8% 90 0.3% -17.8% 157.3%
Profit (Loss) from discontinued operarion (37) -0.1% (82) -0.2% 10 0.0% -55.0% -475.9%
Net income 1,541 4.4% 1,028 3.0% 1,851 5.3% 49.8% -16.8%
Net income (loss) attributable to:
Equity holders of the Company 1,404 4.0% 902 2.7% 1,737 4.9% 55.6% -19.2%
Non-controlling interests of the subsidiaries 137 0.4% 126 0.4% 114 0.3% 8.4% 19.5%
Earnings per share
Basic earnings per share 0.29 0.19 0.37 53.2% -20.5%
Diluted earnings per share 0.29 0.19 0.37 53.2% -20.5%
Exchange rate
THB/USD 32.95 35.39 33.39 -6.9% -1.3%
Normalized net profit 1,338 3.8% 1,423 4.2% 1,590 4.5% -6.0% -15.8%
Consolidated
3Q17%
to sales(Unit: THB mn) 4Q17
%
to sales4Q16**
%
to sales
4Q17 Income Statement
Remark: *Including share of income from investment in associates
**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
Page 53
2017/
2016
Change
Sales 136,535 100% 134,375 100% 1.6%
Cost of sales (118,395) -86.7% (114,448) -85.2% 3.4%
Gross profit 18,141 13.3% 19,927 14.8% -9.0%
SG&A expenses (13,429) -9.8% (13,122) -9.8% 2.3%
FX gain (loss) 1,256 0.9% 84 0.1% 1389.3%
Other income* 2,638 1.9% 1,397 1.0% 88.9%
EBIT 8,605 6.3% 8,286 6.2% 3.9%
Finance cost (2,141) -1.6% (1,572) -1.2% 36.2%
EBT 6,465 4.7% 6,715 5.0% -3.7%
Tax 99 0.1% (583) -0.4% -117.0%
Profit (Loss) from discontinued operarion (71) -0.1% (272) 0.0% 0.0%
Net income 6,492 4.8% 5,860 4.4% 10.8%
Net income (loss) attributable to:
Equity holders of the Company 6,021 4.4% 5,254 3.9% 14.6%
Non-controlling interests of the subsidiaries 471 0.3% 606 0.5% -22.2%
Earnings per share
Basic earnings per share 1.26 1.10 14.7%
Diluted earnings per share 1.26 1.10 14.7%
Exchange rate
THB/USD 33.88 35.29 -4.0%
Normalized net profit*** 5,352 3.9% 5,336 4.0% 0.3%
(Unit: THB mn) 2017%
to sales2016**
%
to sales
2017 Income Statement
Remark: *Including share of income from investment in associates
**Some figures were restated mainly due to reclassification between other income and finance cost
***Normalized net profit exclude ALL one-off adjustments and items throughout the period
Page 54
Cash and cash equivalents* 878 0.6% 976 0.7% -10.0%
Trade and other receivables - net 16,344 11.2% 16,412 11.5% -0.4%
Inventories - net 43,360 29.6% 39,626 27.8% 9.4%
Other current assets 2,164 1.5% 3,064 2.2% -29.4%
Total current assets 62,747 42.9% 60,079 42.2% 4.4%
Fixed assets 25,261 17.3% 23,281 16.4% 8.5%
Goodwill and other intangible assets 30,851 21.1% 29,583 20.8% 4.3%
Other non-current assets 27,408 18.7% 29,424 20.7% -6.9%
Total Assets 146,268 100% 142,365 100% 2.7%
Bank overdrafts and short-term loans 15,365 10.5% 36,983 26.0% -58.5%
Trade and other payables 19,823 13.6% 17,429 12.2% 13.7%
Current portion of long-term loans 849 0.6% 765 0.5% 11.1%
Current portion of debentures - 0.0% 2,500 1.8% -100.0%
Current portion of finance lease liabilities 47 0.0% 82 0.1% -42.6%
Other current liabilities 573 0.4% 1,483 1.0% -61.4%
Total current liabilities 36,657 25.1% 59,242 41.6% -38.1%
Long-term loans from financial institutions 14,712 10.1% 963 0.7% 1427.2%
Debentures 36,169 24.7% 24,417 17.2% 48.1%
Finance lease liabilities - net of current portion 155 0.1% 208 0.1% -25.7%
Other non-current liabilities 10,348 7.1% 10,099 7.1% 2.5%
Total Liabilities 98,040 67.0% 94,930 66.7% 3.3%
Non-controlling interests of the subsidiaries 3,768 2.6% 4,193 2.9% -10.1%
Total Shareholders’ Equity 48,227 33.0% 47,436 33.3% 1.7%
Total liabilities and shareholders’ equity 146,268 100% 142,365 100% 2.7%
Change(Unit: THB mn) 2017% to total
assets2016
% to total
assets
Statement of Financial Position as of 31 December 2017
Remark: *Including short-term investments
Page 55
(Unit: THB mn) 2017 2016 Change
Profit before income tax 6,393 6,443 (49)
Adjustments for depreciation & amortisation expenses 2,761 2,983 (222)
Other adjustments 1,383 1,660 (276)
Changes in operating assets and liabilities (2,862) (1,609) (1,253)
Cash flows receipts from operating activities 7,675 9,476 (1,801)
Net cash receipts (payments) from operating activities 6,818 7,770 (952)
Net cash payments for investing activities (2,424) (29,400) 26,975
Net cash receipts (payments) for financing activities (4,552) 19,801 (24,353)
Net increase (decrease) in cash and cash equivalent (158) (1,829) 1,670
Cash and cash equivalents - opening balance 731 2,590 (1,859)
Exchange gain (loss) on cash and cash equivalents (0) (31) 31
Cash and cash equivalents - closing balance 573 731 (158)
CAPEX (5,505) (3,933) (1,572)
Management Est. Free Cash Flows* 2,938 5,544 (2,606)
Consolidated
2017 Statement of Cash Flow
Page 56
Corporate website: http://www.thaiuniongroup.com
IR website: http://www.thaiuniongroup.com/en/investor.ashx
E-mail: ir@thaiunion.com Tel: +66 2298 0024
Thank you
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