4Q17 Results Presentation - Thai Union Group...2018/02/21 · 4Q17 Results Presentation 21 February...

4Q17 Results Presentation21 February 2018

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

Agenda

Key Highlights

Recent Developments

4Q17 Financial Results

Business Outlook

“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

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

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. .


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

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


*The 4Q16 figures were restated mainly due to reclassification of fishing fleet discontinued operations

Raw material prices rising

Agenda

Key Highlights

Recent Developments


Business Outlook

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:

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.

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.

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Agenda

Key Highlights

Recent Developments


Business Outlook

TU’s Consolidated Results

Results by Business Unit

“We are determined to grow cash return

and shareholder wealth. Cash is king.”

Joerg AyrleGroup Chief Financial Officer

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

4Q17: Profitability profile intact amid challenging environment


*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

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

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%

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

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

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

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%


SG&A% 9.8% 11.0% 8.7% 9.5% 10.3%

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

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

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%

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

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

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

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

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***

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

Agenda

Key Highlights

Recent Developments


Business Outlook

TU’s Consolidated Results

Results by Business Unit

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)

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

Thai Union’s global footprint

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

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

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

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

Global Presence

U.S. And

Canada

40%Europe

32%

Thailand

10

%

19%

Others

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


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

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


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

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


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

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.


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

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

Agenda

Key Highlights

Recent Developments


Business Outlook

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

Appendix

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%

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

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

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

(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

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

4Q17 Results Presentation - Thai Union Group...2018/02/21 · 4Q17 Results Presentation 21 February...

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