THAI UNION FROZEN PRODUCTS
Opportunity Day Presentation
27 March 2012
THAI UNION FROZEN PRODUCTS
Opportunity Day Presentation
27 March 2012
Agenda
1. Company overview
2. 2011 Financial results
3. Outlook and strategy
3
Founded
Thai Union
Manufacturing
Strategic
Partnership with
Mitsubishi Corp
Acquired
Chicken of the
Sea International
(50%)
Acquired the
remaining shares
of COSI
(100%)
Set up
Chicken of the
sea Frozen
Acquired
4 fishing vessels
in Indian ocean
Acquired
Avanti Feeds
(15%)
Established
Thai Union
Frozen Products
TUF was
listed on stock
exchange of
Thailand
(90%)
Acquired
Songkla
Canning
(100%)
Acquired
Empress
International
(76.5%)
Acquired
PT Jui Fa
International
(51%)
Acquired
Yueh Chyang
Canned Food
(100%)
Acquired
MW Brands
2001
2003 2006 2008 2010 1988 1994 1998
1977 1992 1997 2009 2006 2007
Acquired
Pakfood
public company
2012
Thailand US US US India Thailand
Thailand Thailand Indonesia US Vietnam Europe
Introduction to TUF 35 Years of Seafood Processing Experience
Source: TUF’s Financial Statement
4
Thai Union Frozen Products
Frozen & canned seafood, pet food, snack and ready-to-eat meals
Subsidiary (shares held more than 50%)
Associate (shares held between 10% - 50%)
Group 1
Frozen and canned seafood
TN Fine Chemical
(Hi-grade tuna oil &
glucosamine)
Moresby
International Holding
(Papua New Guinea-
based holding)
Thai Union
Seafood
(Frozen shrimp)
Songkla Canning
(Pet food)
Thai Union
Manufacturing (Canned Tuna & Pet
food)
90%
49%
33%
90%
51%
Group 2
Packaging products
Asian Pacific Can
(Empty can)
Thai Union
Graphic
(Printing)
91%
74%
Group 3
Animal feeds and aquaculture
Thai Union
Feedmill
(Shrimp feed)
Thai Quality
Shrimp
(Shrimp breeding
and farming)
Thai Union
Hatchery
(Shrimp brood stock
breeding)
T-Holding
(Food distributor for Thai
market)
51%
95%
100%
90%
Group 4
Thai Domestic Market
Group 5
Overseas investment
Thai Union
International (US-based holding
company)
Tri-Union Frozen
Product
(Frozen seafood in
the US)
U.S. Pet Nutrition
(Wet and dry pet
food in the US)
Thai Union
Investment Holding (Mauritius based holding
company)
MW Brands
Holdings SAS
(Canned seafood in
Europe)
Century Trading
(Processed seafood in
China)
P.T. Jui Fa
International Food (Canned tuna in
Indonesia)
Yeuh Chyang
Canned Food (Processor of canned
shellfish & tuna)
Avanti Feeds
(Shrimp feeds and
exporter of shrimp)
50%
89%
51%
100%
70%
99%
100%
15%
100%
CTS
TUF Group Structure Composed of 5 groups of business in both domestic and oversea
TUF 19%
Others 81%
World production of canned tuna (Million tons)
(Annual capacity1 = 1.58 million tons)
104.4 107.3
110.7 112.7
115.1 117.8
2004 2005 2006 2007 2008 2009
Global seafood consumption2
(Million tons)
TUF is world’s largest canned tuna producer, with the
processing volume 19% of world production capacity
5
Growth : 2.4%
.
Asia
.
Rest of the World
.
Europe4
2010 2011
2010 2011
2010 2011
.
North America
2010 2011
1,077
1,188 355
1,030
598 726
238 289
10% 190%
21%
21%
Revenue growth across all geographies3
(USD million)
Source: 1Fishstat Plus (FAO) 2007, based on finished product production 2The state of world fisheries and aquaculture 2010, FAO 3TUF’s Management Report December 2011 4Annual Europe growth with MW Brands 12 months consolidation is 12%
#1 Global Leader in Raising Consumer Business TUF’s production capacity is 19% of world production of canned tuna
Fisheries
Tuna and
other seafood
Processing Canning Marketing
Breeding Shrimp feed Processing Farm
Shrimp
Raw material acquisition Production Marketing
• Shrimp breed
development
farms
• A Factory in
Thailand with
capacity of
330,000 tons per year
• Partner farms in Thailand
• 2 Facilities3 in Thailand • Total capacity of 75,000 tons per year
• 9 Own fishing vessels with capacity
of 44,440 tons per year • Covers Atlantic Ocean
• 10 Facilities1 in 8 countries
• Total capacity of 643,000 tons per year
Marketing
• 8 Brands2
• 5 Continents
Value adding
Can & label
production
• Can and printing
factory in
Thailand
6
• Chicken of the
Sea Frozen Food
• 3 Continents
Remark: Not include supply chain for ready to eat and pet food products 1Seychelles, Ghana, France, Portugal, United States, Indonesia, Vietnam, Songkhla and 2 facilities in Samut Sakorn 2John West, Petit Navire, H. Parmentier, Mareblu, Chicken of the Sea, Century, Sealect, and Fisho 3Mahachai and Songkhla facilities
Source: TUF’s Management Report December 2011
Fully Integrated and Globally Diversified Supply Chain Tuna, shrimp, and other seafood products from sourcing to marketing
13%
6%
4%
5%
24%
48%
2011 Revenue
7
Strategic business
group Product range Brand
Source: TUF’s Management Report December 2011
Tuna Canned tuna
Frozen tuna loin
Shrimp
business Frozen shrimp
Shrimp feed
Salmon Salmon
Sardine
& Mackerel Canned sardine &
Mackerel
Pet food Pet food
Other
products1
Ready to eat food Frozen cephalopod Other canned seafood Bakery products
2011 Revenue
breakdown
6 Strategic Business Group of TUF Tuna and shrimp business are TUF’s core business with over 70% of total revenue
TUF Markets TUF Production Bases TUF Sources of Fish
MWB Production Bases MWB Markets MWB Sources of Fish
• TUF has processing facilities and market distributions in major continents all over the world
• Production facilities are located closely to fishing grounds; hence, achieving lower cost of production
8
Thailand Georgia, USA
Indonesia
Vietnam
Seychelles
Portugal
France
Europe
Ghana
TUF’s Global Sourcing, Production and Markets TUF has processing facilities and market distributions over the world
9
#1 Market share Thai canned tuna1 Teenagers’ fish snacks
• Target teenagers
• 3% Growth in 2011
• 20% Target growth in 2012 (outpacing
fish snack market grows at 10%) from
promotion, repackaging and brand
building
Premium-grade wet-based pet food
• Premium brand positioning
• High-quality raw materials and
processing
• Future expansion through premium
pallet cat food
Tuna
Sardine & Mackerel
Cream salad
Seasoned and shredded fish snacks
Seasoned fish slice
Dog food
Pet snack
Cat food
• #1 Market share (44%) in canned tuna
market1
• #2 Market share (15%) in canned
sardine & mackerel market1
• 27% Growth in 2011 vs. 6% for overall
market
Remark: 1Number 1 in Thai canned tuna market with 44% market share, Number two brand in canned sardine & mackerel
market with 15% market share after Three Lady Cooks Brand (30%)
Source: TUF’s database 2011
Sealect, Fisho, and Bellotta Sealect as No. 1 market leader with 44% share in canned tuna market
10
Chicken of the Sea’s product range
Tuna
Other seafood
• Driving growth in shrimp and pasteurized crabmeat
business further
• Product line expansion to introduce new value-added
seafood products
Chicken of the Sea Frozen Foods’ product range
• Maintaining and increase number of key customers
• Extensive new product development
• Improving compliance with sustainability issues
Sardines
Remark: 1Number 3 brand with 19.9% market share after Starkist (31.8%) and Bumble Bee (24.9%)
Source: TUF’s database 2011
Frozen finish Frozen shrimp
Crab meat
Chicken of the Sea No. 3 brand in US market with 20% market share1
Outlook & strategies
Ireland United
Kingdom
Netherlands
John West’s product range
Tuna
Chilled seafood Specialty food Salmon
11
Market information and performance
• Recently rebranded;
• Sustainability tuna sourcing campaign
• Future expansion into East EU, Russia, and Scandinavian countries
• Intense focus on R&D to improve product functionality and differentiation
Market size1
(EUR million)
Market coverage:
Market size and
Market share:
33% 34%
534 581
2010 2011
John West’s
market share
Market share:
Market position:
Contribution to MWB’s revenue3: 45%
33% 34%2
1# 1#
Outlook & strategies
70% 70%
39 39
2010 2011
70 70%
1# 1#
34% 34%
66
81
2010 2011
34% 34%
1# 1#
Remark: 1Ambient seafood sector size as at October, 2010 and December, 2011 2Gain in market share (value share). Market share as at January, 2012 3MWB revenue in 2011(Other product constitutes for 2% of total revenue)
Source: Nielsen and IRI –MAT (October, 2010 and December, 2011)
9%
1%2
0%
0%2
22%
0%2
John West No. 1 canned tuna brand in 3 countries
France
Petit Navire’s product range
Tuna
12
Salads Sardine
Mackerel
H. Parmentier’s product range
Classic recipe, cooked, and shredded sardines
Market information and performance
• Well-established by-far largest brand in French market
• Expansion opportunity in ‘frozen and chilled’ seafood product
and other value-added products
• Expected cost improvement from support by Thai staff
Market size1
(EUR million)
Market coverage:
Market size and market share:
29% 28%
773 825
2010 2011
Petit Navire’s
& H.Parmentier’s
market share
Market share2:
Market position3:
Contribution to MWB’s revenue3: 45%
29% 28%2
1# 1#
Outlook & strategies
Remark: 1Ambient seafood sector size as at October, 2010 and December, 2011 2Gain in market share (value share) of two brands combined. Market share as at January, 2012 3MWB revenue in 2011(Other product constitutes for 2% of total revenue)
Source: Nielsen and IRI –MAT (October, 2010 and December, 2011)
7%
-1%2
Petit Navire and H. Parmentier No. 1 French canned seafood
Market information and performance
13
Italy
Market size1
(EUR million)
• The goal is to become second-largest brand in Italian market
by gaining market share through;
o New product development
o Extensive marketing effort
o Continuous new listing strategy
Market coverage:
Market size and market share:
5% 6%
910 982
2010 2011
Mareblu’s
market share
Market share:
Market position:
Contribution to MWB’s revenue3: 8%
5% 6%2
3# 3#
Mareblu’s product range
Tuna in olive oil
Tuna in brine
Tuna steak and
Mackerel fillet
Tuna salad
Outlook & strategies
7%
1%2
Remark: 1Ambient seafood sector size as at October, 2010 and December, 2011 2Gain in market share (value share). Market share as at January, 2012 3MWB revenue in 2011(Other product constitutes for 2% of total revenue)
Source: Nielsen and IRI –MAT (October, 2010 and December, 2011)
Mareblu Well-positioned to gain share in Italy market
Agenda
1. Company overview
2. 2011 Financial results
3. Outlook and strategy
15
2,874
5,950
9,531
71,507
5,075
10,105
16,369
98,670
Financial Summary1
(THB million)
Gross Profit
Total Sales
EBITDA
Net Profit
2011
2010
2011
2010
2011
2010
2011
2010
+38%
+72%
+70%
+77%
Record earnings,
up 77%
THB 5,075 million
ND/E continuously
decline
1.44x
Source: 1Financial Statement for the year ended December 2011 2Bloomberg (Jan 4’ 11: THB 52/ share, Dec 30’ 11: THB 58.5/ share, Mar 21’12: THB 71.5/ share, up 37.5%)
Share price growth
20112
(Jan-Dec 11)
12.5%
20122
(Jan-Mar12)
22.2%
Company Highlights Record earnings with 77% growth
16
2011 Revenue by product
Tuna
48%
Shrimp
business
24%
Pet food
6%
Sardine
& Mackerel
4%
Other products1
13%
2011 Revenue by OEM/ Brand
OEM
48% Brand
52%
19%
11%
10%
2%
Salmon
5%
Total revenue: THB 98,670 million Total revenue: THB 98,670 million
10%
• Tuna and shrimp business are major
source of TUF’s revenue, accounts for
72% of total revenue
• Branded products account over 50% of total revenue in 2011
• Chicken of the Sea and MW Brands contribute over 80% of
branded income
Remark: 1Other products include ready-to-eat food, frozen cephalopod, other canned seafood, and bakery products Source: TUF’s Management Report December 2011
Local Products
2011 Revenue by Product and by OEM/ Brand Major source of revenue from tuna and branded products
17
• Revenue from USA and Europe accounted for 36% and 32% respectively in 2011
• Revenue from Europe increase 190% YoY after the acquisition of MWB
• Revenue has been improved YoY in every region, except Africa
USA 46%
Europe 16%
Domestic 12%
Japan 12%
Africa 4%
Oceania 3%
Asia 3%
Middle East 2%
South America 1%
Canada 1%
USA 36%
Europe 32%
Domestic 10%
Japan 10%
Africa 3%
Oceania 3%
Asia 2%
Middle East 2%
South America
1% Canada 1%
2010 Revenue by region (% total revenue)
2011 Revenue by region (% total revenue)
Total revenue : USD 2,268 million Total revenue : USD 3,232 million
Revenue Breakdown by Region Revenue from Europe increase 190% YoY after the acquisition of MWB
Remark: 1The percentage change is calculated based on value in THB currency
Source: TUF’s Financial Statement TUF’s Management Report December 2011
Quarterly revenue (THB million and USD million)
18
Tuna
Shrimp business
Salmon Sardine & Mackerel
Other products
Annual revenue (THB million and USD million)
+26% YoY1
+4% QoQ1
Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11
20,649 22,706
24,860 25,105 26,000
16% 16% 13%
8% 9% 6% 4% 3%
4% 2% 3% 5%
26% 29%
24%
44% 40%
48%
FY09 FY10 FY11
68,994 71,507
98,670
+38% YoY1
+4% YoY1
Tuna
Shrimp business
Sardine & Mackerel Pet food
Other products
Salmon
THB million
USD million 687
743
821 831 837
THB million
USD million 2,013 2,268
3,232
• Stable improving operation QoQ • Outstanding results from increase in
sales of tuna, salmon, and sardine & mackerel
Pet food
Quarterly and Annual Revenue Revenue increases 38% YoY to THB 98,670 million
2,440
3,355
4,326 4,344 4,344
Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11
19
Gross profit margin (%)
FY09 FY10 FY11
15.1%
13.3%
16.6%
10,444
16,369 11.8%
14.8%
17.4% 17.3% 16.7%
0.02% QoQ
72% YoY
Source: TUF’s Financial Statement TUF’s Management Report December 2011
Gross profit margin (%)
Quarterly GP and GPM (THB million)
Annual GP and GPM (THB million)
• Improving Gross profit QoQ, stable in the last 3 quarters
• Significant improvement in GPM to
16.6%, thanks to Branded products that
create higher margin
9,531
Quarterly and Annual GP, GPM Significant improvement in gross profit margin from 13.3% to 16.6%
FY09 FY10 FY11
20
4.8%
4.0%
5.1%
3,344
5,075
352
753
1,238
1,561 1,523
Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11
1.7%
3.3%
4.9%
6.2% 5.8%
77% YoY
Net profit margin (%)
Net profit margin (%)
-0.03% QoQ
Quarterly Net profit and Net profit margin (THB million)
Annual NP and NPM (THB million)
• Slightly drop in Q4 from lower EBITDA • Net profit and NPM remains high with positive trend
comparing to previous year
• Net profit improved 77% YoY, thanks to higher GPM and the utilization of tax credit
Source: TUF’s Financial Statement TUF’s Management Report December 2011
2,874
Quarterly and Annual Net Profit and Net Profit Margin Net profit increases 77% YoY, with Net Profit Margin of 5.1%
ROE
21
22%
14%
22%
FY09 FY10 FY11
ROA1
13%
9% 11%
FY09 FY10 FY11
A/R Turnover (Days)
36
40
37
FY09 FY10 FY11
Inventory Turnover (Days)
108 107
103
FY09 FY10 FY11
Gearing Ratio2 (Times)
0.95x
2.22x 2.07x
FY09 FY10 FY11
ND/E Ratio3
(Times)
0.63x
1.57x 1.44x
FY09 FY10 FY11
Remark: 1ROA = EBIT / Average total assets 2Gearing ratio = Total liability / Total equity 3ND/E ratio = Net interest-bearing debt/ Total equity, Net interest-beating debt = Total interest-bearing debt – Cash and Cash equivalents
Source: TUF’s Financial Statement
Ratio Positive trends for all other key ratios
74% 73%
75%
26%
27%
25%
FY09 FY10 FY11
19% YoY
55% 54% 40%
45% 46%
60%
FY09 FY10 FY11
1,546
63% 61% 48%
37% 39%
52%
FY09 FY10 FY11
Quantity sold (Tons)
22
Sales (USD million)
880 912
228,249 232,323
303,015
30% YoY
Brand
OEM
Brand
OEM
• Higher proportion of
branded product in term of
both sales value and
quantity mainly contributed
by both Thailand and MW
Brands
• Tuna will continue to be
TUF’s core business that
generates both growth and
returns in 2012
70% YoY
Tuna
23% 24% 24%
77% 76% 76%
FY09 FY10 FY11
Quantity sold (Tons) Sales (USD million)
513
656 184,042
218,932 222,760
1.7% YoY
Brand
OEM
Brand
OEM
• Shrimp continued to deliver
good sales growth mainly
driven by higher price
• The segment will continue
to grow supported by
additional production
capacity from PPC
Shrimp business1
778
Remark : 1Shrimp Business includes frozen shrimp and shrimp feed Source: TUF’s Management Report December 2011
Tuna / Shrimp business Significant sales increase: Tuna 70%, Shrimp 19%
100% 82% 45%
18%
55%
FY09 FY10 FY11
157
100% 77% 30%
23%
70%
FY09 FY10 FY11
23
47 64
4,418 5,220
15,107
189% YoY
Brand
OEM
Brand
OEM
Source: TUF’s Management Report December 2011
• Impressive sales growth of
146% in 2011 from both
price and volume
improvement
146% YoY
Salmon
100% 86%
39%
14%
61%
FY09 FY10 FY11
140
100%
95% 67%
5% 33%
FY09 FY10 FY11
90 77
40,530
30,102 32,812
9% YoY Brand
OEM
Brand
OEM
• 81% growth was driven
mainly by revenue shift to
branded products
• Sardine & mackerel will be
the next rising stat of TUF
81% YoY
Sardine & Mackerel
Salmon / Sardine & Mackerel Salmon: almost 150% growth, Sardine & Mackerel: the next rising star
Quantity sold (Tons) Sales (USD million)
Quantity sold (Tons) Sales (USD million)
100% 100% 98%
2%
FY09 FY10 FY11
210
100% 100% 99%
1%
FY09 FY10 FY11
24
168 191 58,764
64,637 63,357
-2% YoY
Brand OEM
Brand OEM
• Future growth in pet food
sales will be driven by
high-price branded
products
• Supported by opportunity
in US market, pet food will
be another rising star in
2012
10% YoY
Pet food
14% 13% 13%
86% 87%
87%
FY09 FY10 FY11
403
24% 9% 17%
76%
91%
83%
FY09 FY10 FY11
316
368
34,692
74,331
99,158
33% YoY
Brand
OEM
Brand
OEM
• Strategic expansion of
value-added ready-to-eat
(RTE) products
9% YoY
Other products1
Remark : 1Other products include ready-to-eat food, frozen cephalopod, other canned seafood, and bakery products Source: TUF’s Management Report December 2011
Pet food / Other products Pet food: another star given opportunity in US
Quantity sold (Tons) Sales (USD million)
Quantity sold (Tons) Sales (USD million)
Agenda
1. Company overview
2. 2011 Financial results
3. Outlook and strategy
2011
Sales: USD 3.2 billion
2015
Sales: USD 5 billion
2012 - 2014
~15% growth annually
• Continue successful
acquisition &
implementation to other
parts of the world
• Continuous growth
through acquisition of
Branded company
• Maintain #1 Global tuna
company
• Target to be a leading
seafood company in strategic markets
Merger & Acquisition Organic growth : Intensive R&D and new market expansion
26
Tuna & Shrimp
• Maintain leadership
and expand of
successful brands to
new markets
• Intense focus on
R&D to improve
product functionality
and differentiation:
RTE, Frozen &
Chilled food
Pet food
• Introduction of
Middle –
premium pet food
products in North
America
• USPET Nutrition
start operation
• Expect
consolidated
sales increase
15-20%
Local Products2
• Strengthen Local
corporate brand
• Expand to new
market under AEC
benefits
Remark : 1Seafood include salmon, sardine/mackerel, cephalopod and other canned seafood
2Local products includes packaging business, canned tuna and fish snacks marketed in Thailand Source: TUF’s Management Report December 2011
Seafood1
• Significant growth
in price and
volume with good
margin for sardine
& mackerel
• Plan to be the
next rising star of
TUF
2012 Outlook Target growth at minimum 15% annually to reach sales of USD 5 billion in 2015
27 Source: 1Euromonitor International TUF’s Management Report December 2011
Market Expansion Plan Strengthen existing brands and expand to new market
North America - USPET Europe – MW Brands South East Asia - Sealect
• Plant in Georgia; by-product from tuna
plant
• Introduce both branded and private label
products in middle to premium range
• Expand successful brand to eastern Europe, Scandinavian, Middle-east, and African market
• Introduce new products: –Frozen food & Chilled seafood –Pet food –RTE products
• Strengthen corporate brand in Thai
market
• Expand to neighbor countries in South
East Asia
• Tax benefits from AEC
Georgia plant
Thailand UK Ireland
Italy
Netherlands
France
28
2,874
5,950
9,531
71,507
5,075
10,105
16,369
98,670
Financial Summary1
(THB million)
Gross Profit
Total Sales
EBITDA
Net Profit
2011
2010
2011
2010
2011
2010
2011
2010
+38%
+72%
+70%
+77%
Record earnings,
up 77%
THB 5,075 million
ND/E continuously
decline
1.44x
Source: 1Financial Statement for the year ended December 2011 2Bloomberg (Jan 4’ 11: THB 52/ share, Dec 30’ 11: THB 58.5/ share, Mar 21’12: THB 71.5/ share, up 37.5%)
Share price growth
20112
(Jan-Dec 11)
12.5%
20122
(Jan-Mar12)
22.2%
Company Highlights Record earnings with 77% growth
0
20
40
60
80
Jan-11 Apr-11 Jul-11 Oct-11 Jan-12
THB/Share Share price and trading value1
Value Price
Avg. daily trading
value: THB 152 million2
Share information1
Par value (THB) 1.00
Current share price1 (THB) 71.50
Market capitalization1 (THB billion) 68.4
Share capital (share million) 956.3
Free float 42.3% 10
12
14
16
18
20
Jan-11 Apr-11 Jul-11 Oct-11 Jan-12
Times Historical P/E ratio
SETFODD: 16.1 SET: 16.0
TUF: 13.5
THB
52.0/sh
THB
71.5/sh
Remark : 1Share price information as at March 21, 2012, Free float % as at March 3, 2012, Trailing 12 months P/E
2Average daily trading value during January 4, 2011 to March 21, 2012 Source: Settrade (22/3/12), Bloomberg (22/3/12)
Current P/E1
Share price performance Positive trend in share price, Still lower P/E than market and sector
29
DISCLAIMER: The information contained in our presentation is intended solely for your personal reference only. In addition, such
information contains projections and forward-looking statements that reflect our current views with respect to future events and
financial performance. These views are 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.
THANK YOU
www.thaiuniongroup.com
Agenda
31
Appendices
Board of Directors
Mr. Kraisorn Chansiri
Mr. Chan Hon Kit
Vice Chairman
Mr. Cheng Niruttinanon
Executive Director
Mr. Chuan Tangchasiri
Executive Director
Mr. Thiraphong Chansiri
President
Mr. Rittirong Boonmechote
Managing Director
Mr. Yasuo Goto
Director Mr. Takeshi
Inoue
Director
Mr. Chan Tin King
Executive Director and
Chief Financial Officer
Mr. Chan Shue Chung
Executive Director
Mr. Ravinder Singh
Grwel Sarbjit S
Director
Mr. Sakdi Kiewkarnkha
Independent Director
Pol.Maj.Gen. Pracha
Anucrokdilok
Independent Director
Mr. Kiti Pilunthanadiloke
Independent Director
CHAIRMAN
Executive Directors
Directors Independent Directors
Source: TUF’s Financial Statement 32
33
Consolidated
(Million baht) 2011 2010 2011/ 2010
change
Cash and cash equivalents 903 1,037 -13%
Accounts receivable - net 11,161 9,262 +21%
Inventories - net 26,132 21,346 +22%
Other current assets 1,735 2,315 -25%
Total current assets 39,930 33,960 +18%
Fixed assets 15,655 14,190 +10%
Other non-current assets 27,644 26,627 +4%
Total assets 83,230 74,777 +11%
Bank overdrafts and short-term loans 14,477 8,364 +73%
Accounts payable 7,919 7,195 +10%
Other current liabilities 2,746 5,383 -49%
Total current liabilities 25,142 20,941 +20%
Long-term borrowings 24,306 25,392 -4%
Other non-current liabilities 6,713 5,209 +29%
Total liabilities 56,131 51,541 +9%
Minority interest 2,651 2,269 +17%
Total shareholders’ equity 27,069 23,236 +16%
Total liabilities and shareholders’ equity 83,230 74,777 +11%
Source: TUF’s Financial Statement
Balance sheet
34
Consolidated
(Million baht) 2011 2010 2011/ 2010
change Q4’11 Q4’10
Q4’11/ Q4’10 change
Sales 98,670 71,507 +38% 26,000 20,649 +26%
Cost of sales (82,301) (61,976) +33% (21,656) (18,209) +19%
Gross profit 16,369 9,531 +72% 4,344 2,440 +78%
SG&A expenses (8,863) (6,107) +45% (2,425) (1,803) +35%
FX gain (loss) 305 807 -62% 109 128 -15%
Other income 698 519 +34% 202 65 +208%
Other expenses (19) (5) 244% (19) (5) +244%
EBIT 8,489 4,744 +79% 2,210 825 +168%
Finance cost (2,272) (764) +198% (571) (371) +54%
EBT 6,217 3,981 +56% 1,639 454 +261%
Tax (192) (629) -69% 203 (69) -395%
Net income 6,025 3,352 +80% 1,842 385 +378%
Net income (loss) attributable to:
Equity holder of the parent 5,075 2,874 +77% 1,523 352 +332%
Minority interest 950 479 +99% 319 33 +869%
Earnings per share
Basic earnings per share 5.30 3.20 66% 1.59 0.35 +354%
Diluted earnings per share 5.17 3.19 62% 1.55 0.34 +356%
Source: TUF’s Financial Statement
Income statement
1,192
1,822
2,834 2,945
2,503
Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11
-15% QoQ
35
EBITDA increases 70% YoY, with 10.2% EBITDA margin
5,950
FY09 FY10 FY11
8.6% 8.3%
10.2%
5,960
10,105
5.8%
8.0%
11.4% 11.7%
9.6%
70% YoY EBITDA margin (%)
EBITDA margin (%)
Quarterly EBITDA and EBITDA margin (THB million)
Annual EBITDA and EBITDA margin (THB million)
• Lower QoQ due to higher SG&A (mainly on R&D,
promotion, and compensation)
• Total %SG&A is in line with last year (at 8.5 - 9%)
• Significant improvement in EBITDA and
EBITDA margin to 10.2% which is a
maintainable level
Source: TUF’s Financial Statement TUF’s Management Report December 2011
117 134
269
FY09 FY10 FY11
USD/ Ton
0
500
1,000
1,500
2,000
2,500
FY09 FY10 FY11
36
Gross margin (%)
2,005 USD/ Ton
1,025 USD/ Ton
13.3% 14.7%
17.4%
101% YoY
Skipjack tuna raw material prices (2009-2011)
Tuna’s gross profit (USD million)
FY09 FY10 FY11
Tuna Higher GP and GPM despite higher raw material tuna price
96%
Highlights
Outlook
• Despite tuna raw material fluctuation, gross profit continue to improve significantly. Increasing
raw material price will, in fact, drive TUF’s performance further
• GPM was also driven by improved operational efficiency and effective cost management
• Raw material price could potentially maintain high level due to enhanced fishing regulations
and conservation policy
• Current level of GPM should be maintained with some room to improve from MW Brands synergies
Source: TUF’s Management Report December 2011
Species
Fertility rate in
Eastern Pacific
Ocean
Western Pacific
Ocean
Indian
Ocean
Atlantic
Ocean
Skipjack, the main TUF supplies, are abundantly available
Source: ISSF “status of the world fisheries for tuna ” Technical report 2011
Status review report of Atlantic Bluefin tuna 2011 37
Other species
30%
Skipjack
Bigeye
Yellowfin
Albacore
Bluefin
High fertility : Tuna are reproduced at higher rate than they are caught
Medium fertility : Tuna are reproduced at the same rate as they are caught
Low fertility : Tuna are reproduced at lower rate than they are caught
TUF’s major
supplies
70%
53
75
107
10.4% 11.4%
13.8%
FY09 FY10 FY11
44% YoY
0
20
40
60
80
100
120
140
160
180
FY09 FY10 FY11
150 THB/ Kg.
38
White shrimp raw material prices 60 pcs./kg. (2009-2011)
Shrimp business’ gross profit (USD million)
FY09 FY10 FY11
THB/kg
122 THB/ Kg.
Gross margin (%)
Shrimp business1 44% YoY increase in gross profit with improved margin to 13.8%
23%
Highlights
Outlook
• Improved GPM from 11.4% to 13.8% from more flexible price adjustment / shortened contract length
of OEM products and price adjustment of shrimp feed
• Shrimp raw material price is expected to be more stable given more demand from China (net
importer) and more supplies from Vietnam, India, and others
• With more stable price and supplies, current GPM should be maintained
Remark : 1Shrimp Business includes frozen shrimp and shrimp feed Source: TUF’s Management Report December 2011
39
Gross profit3
USD 546 million
Products Revenue3
(USD million)
Margin3
(%)
Tuna 1,546 x 17.4% 269
Shrimp
Business1 778 x 13.8% 107
Salmon 157 x 13.4% 21
Sardine & Mackerel
140 x 12.9% 18
Gross profit3
(USD million)
3,233 16.9%4 Total
2011 Financial position summary
Remark : 1Shrimp Business includes Frozen shrimp and Shrimp feed 2Other products include ready-to-eat food, frozen cephalopod, other canned seafood, and bakery products
3Rounded numbers 4Margin is calculated based on gross profit and revenue in USD currency Source: TUF’s Management Report December 2011
Pet food 210 x 20.6% 43
Other product2
403 x 21.8% 88
Ongoing MW Brands synergies in both operational efficiency and product development
2011 Timing
Operational efficiency
Product development
Synergistic
focus
Fleet optimization Production yield improvement
Procurement
efficiency
Value addition to
scrap
Progress
• TUF has transfer all
existing 4 fleets to
operate in Ghana
• Results in double
catching efficiency
• Tutor program in Seychelles and
Ghana by TUF teams
• Brine addition in raw pack
• Joint Salmon
purchasing
• Easy Open lid
purchasing
• Group computer
procurement
• Fish meal
factory in Ghana
will be open in
2012
• Consolidating
TUF’s fleet with
those of MW
Brands
• Best-practice production
knowledge sharing to MW Brands
• Group
purchasing and
storage
• Processing by-
products into
higher sales
value products
40
2012 onwards
New Product
Development
• Sainsbury’s Pole
& Line Private
Label
• Develop new
branded and
private label
products
Source: TUF’s Management Report December 2011
Synergistic
focus
Progress
~ EUR 3 million
annually
~ EUR
12 million
annually
TUF’s Strategies in existing value chain
Sourcing Processing Marketing & Distribution
41
Secure RM Sourcing New Market
Expansion
R&D Support Team
Capacity Expansion
Tuna
Frozen Shrimp
Remark : 1Seafood include salmon, sardine/mackerel, cephalopod and other canned seafood
2Other products includes Local products, Pet food and Shrimp feed 3Local products includes packaging business, canned tuna and fish snacks marketed in Thailand Source: TUF’s Management Report December 2011
Pet food
Seafood1
Local products2
Shrimp Feed
Sourcing Secure supplies from own fleets and alliance farms
42
Product
category Tuna and other products
Action
Benefits
Shrimp supply
• Well-diversified raw material sourcing
• Enhanced purchasing knowledge and
experience
Alliance with local qualified farms
• Better shrimp raw material quality control
• Improved traceability along supply chain
• Ensured raw material sufficiency
• Reduced brokerage costs from direct
contract with allied farmers
Own-operated fishing fleets
• Establish long-term relationship with
qualified local farms
• Raw materials are acquired from own
operated fleets in Ghana (10-12% of total
supply)
Source: TUF’s Management Report December 2011
R&D Support Team
Capacity expansion
Shrimp
Capacity (Tons/ day)
Capacity utilization
Pet food
Expansion strategy: • New products in Premium & value added categories
• Enter European market for Premium / Semi RTE segment
TUF
220
80%
PPC
200
50%
Combined
420
66%
Test run: Q4’ 11
Start operation: Q2’ 12
Products: Middle to premium
dog and cat food
43
Objectives:
• To develop new products that best suit demand in each
region and produce at the most cost-optimized process
Structure:
• New product development is local initiated to capture local
preference
• Optimized production process and costing is developed by
TUF’s Support Team and shared to regional operation
Optimized production
process and costing
Thai operation
Europe operation
US operation
Local Initiative
Processing Process reengineer and expand production capacity
Top 2
Thailand’s
biggest player
15-20% market share
• US is the biggest pet food market in the world (38% share)
with expected market size of USD 20 billion in 20121
• Expected 3.5% annual growth1
Source: 1Euromonitor International TUF’s Management Report December 2011
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