Thai Union Group PCL. 9 August, 2019 - set.or.th · •Dr. Darian Mcain, Thai Union [s Global Director of orporate Affairs and Sustainability, for visionary approach to improving

2Q19 Opportunity Day


Thai Union Group PCL.

9 August, 2019


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 assumptions are correct. Actual results may differ materially from those projected.

Disclaimer


Strategic Cornerstones Innovation: A key pillar at Thai Union


Official opening of new Global Innovation Center

Innovation Rising to the Future

In June 2019, Thai Union celebrated official opening ceremony of Global

Innovation Center (GIC) by Princess Maha Chakri Sirindhorn

Facility has been expanded to +5,000 m2, and houses more than 160 scientists and researchers from around the world. It is now located at SM Tower, Bangkok.

State-of-the-art research and product development center

Established in 2015, Global Innovation Center (GIC) seeks to find new innovative solutions to seafood that meet needs of consumers.

2Q19 Opportunity Day Slide 5


Key Highlights

Thai Union’s 2Q19 key

highlights


Thai Union remains focused on operational

excellence and profitability. We continue to

invest in new product innovations to promote

sustainable business growth.

Thiraphong Chansiri

President and CEO

“

”


Sales dropped on lower raw material prices YoY 2Q19 sales down 2.2% YoY excluding FX impact: • Thai Baht appreciated against major trading currencies • Focus on higher-margin sales and lower less-profitable businesses • Lower sales volumes

GPM of 16.7%, highest since 2015

Gross profit improved 13.1% YoY from 14.0% in 2Q18 to 16.7%, driven by: • Focus on high-margin

businesses • Raw material prices

dropped • Excluding labour

retirement expenses, GPM would be at 17.0%

Solid operation recovery Normalized operating profit up 29.6% YoY, • Marketing expense

increased • SG&A ratio still high at

11.8% (from 10.4% in 2Q18)

Recovery partly offset by non-operating items Normalized net profit up 10.6% YoY: • Lower FX gains and higher

tax expenses during 2Q19 • Share of profits improved

mostly from Red Lobster operation improvement

Sales

2Q19: Solid underlying operation improvement amid additional legal expenses

Slide 8

Operating Profit

Gross Profit Net Profit

32,214

(THB mn)

5,364 1,513* 1,570*

YoY Chg. -4.6% +13.1% +29.6%** +10.6%**

QoQ Chg +9.7% +22.4% +53.9% +18.8%

% of sales

16.7% 4.9% 4.7%

Remark: *Based on normalized operating figures. 2Q19 reported operating losses of THB 288mn and reported net profit of THB 111mn, including one-time majority accrual for US legal settlement of THB1,858mn and related tax credit of THB 456mn **Based on normalized operating figures. 2Q18 reported operating losses of THB 285mn and reported net profit of THB 10mn.


2,237

[CELLREF]

1,305

8,129

63,104

2,787

6,089

2,589

9,746 61,583

Net profit

EBITDA Operating profit Gross profit Total sales

Financial Summary1

(THB million) 1H18 1H19

1H19 Net Profit up 24.6% YoY to

THB 2,787 million

Strong cash flow and debt repayment improve debt ratio

1H19 Improved profitability

Slide 9

2018 ND/E

1.39x**

2Q19 ND/E

1.38x

-2.4%

+19.9%

+98.4%

+20.3%

+24.6%

Share price movement

20192

(Jan – 5 Aug 19)

+16.7%

20182

(Jan – Dec 18)

-21.7%

Source: 1TU; 2SET (Jan 3’18: THB20.7/share and Dec 28’18: THB16.2/share, Jan 2’19: THB16.2/share and Aug 5’19: THB18.9/share) **Net debt to equity of 1.35X, before adoption of TFRS 9 and 16

Remark: Excluding one-time net accrual for US legal-related settlement of THB1,402mn (2Q19) and THB1,359mn (2Q18), ESCo business closure-related expenses of THB489mn (2H18) and TMAC investment impairment of THB 87mn (4Q18).


30,958 34,400 34,847 34,733

29,329

33,775 34,169 36,012

29,369 32,214

14.8% 14.5% 14.2% 13.8%

11.6%

14.0%

15.8% 14.9% 14.9%

16.7%

4.6% 4.1% 4.9%

4.1% 3.0%

4.1% 5.1%

3.4% 4.3% 4.7%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

0

10,000

20,000

30,000

40,000

50,000

60,000

1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19

Total sales (THB mn) GPM NPM

% Growth YoY

Sales -0.8 0.0 -0.6 3.0 -5.3 -1.8 -1.9 3.7 0.1 -4.6

Gross profit -8.3 -9.0 0.3 6.1 -26.1 -4.6 9.2 11.4 29.3 13.1

Net profit 16.3 -6.9 8.1 56.6 -39.3 -3.7 0.5 -13.4 46.5 10.6

2Q19: Record quarterly margin since 2015 despite one-time labor retirement benefit provision

Slide 10



Recent Developments

Corporate, innovation,

sustainability, and brands

around the world


• The index identifies companies that demonstrate strong

ESG practices and better manage ESG risks.

Thai Union’s sustainability efforts

• Thiraphong Chansiri, Thai Union’s President and CEO,

participated in dive along with 40 other experienced divers.

• Thai Union also partnered with Royal Thai Navy and

Pattaya City in a beach cleanup and ghost gear diving

activities.

Thai Union Reinforces SeaChange with #GhostGearReborn Kickoff on World Oceans Day

Thai Union remains constituent to FTSE4Good Emerging Index by FTSE Russel, for 4th

consecutive year

Slide 12


Refined tuna oil for infant

formula

Tuna oil is a good source of omega fatty acids, including DHA.

Thai Union continues to focus on high quality, premium tuna oil for infant formula milk powder to maximize full value of fish from by-products.

Refinery to be rebuilt by

2020

Thai Union has started a project to rebuild the tuna oil refinery, with an aim to have the plant commissioned by July 2020.

Minor plant improvements Refinery to be rebuilt similar to previous manufacturing process, with minor improvements after 6 months of operations.

High quality crude tuna oil

production continues We continue to produce and sell high quality crude tuna oil in Bangkok.

Slide 13

Refined tuna oil: Remains key value-added initiative

Fire incident at tuna oil refinery plant

• A fire occurred at Thai Union Ingredients Tuna Oil Refinery Plant in Rostock, Germany on Saturday 1 June, 2019.

• The plant was not in operation at the time, and no staff were scheduled to be on site. There have been no reports of injuries.

• Thai Union has written off assets associated to the tuna oil refinery plant valued EUR 16mn during 2Q19 together with a receivable from insurers of the same amount. Net impact is almost neutral in 2Q19.


Thai Union’s Group CFO: Joerg Ayrle on talks about ethical return on investment

Joerg Ayrle Becomes Council

Member of CNBC’s Global CFO

Council

The Council comprises of 100+ CFOs from Fortune 500 companies in countries around the world, who collectively manage market capitalization of more than $4 trillion. For more information, visit CNBC.

Source: Presentation by Joerg Ayrle, Thai Union’s Group CFO at the 5th CFO Innovation Forum Thailand on 4 July, 2019.

• Joerg Ayrle, Thai Union’s Group CFO, gave a closing speech at SeaWeb Seafood Summit 2019 in Bangkok about ethical return on investment and seafood companies in the emerging blue bond trend.

• Separately, he was key speaker at 5th CFO Innovation Forum in Bangkok on 4 July, 2019, on integrating sustainability to unravel capital benefits and boost investor confidence.

Caption: Joerg Ayrle during his closing speech at SeaWeb Seafood Summit in Bangkok. Photo Credit: Intrafish, Lola Navarro (Twitter: @IntrafishLola)

Caption: Thai Union’s Group CFO at 5th CFO Innovation Forum Thailand on 4 July, 2019.

Slide 14

https://www.cnbc.com/2016/04/08/cnbc-global-cfo-council.html

https://twitter.com/intrafishlola?lang=en

https://twitter.com/intrafishlola?lang=en


Thai Union’s global brand footprint

Slide 15

United States Germany

Thailand

China

New premium product

Chicken of

the Sea Wild

Catch

New lobster product

Orion Cooked

Lobster Meat

Retail Pack

New innovative packaging

Brisling

Sardines in

see-through

lid New ready-to-eat tuna varieties

• Tuna Salad (Couscous)

• Tuna Infusions

New product initiatives and innovations from brands around the

world

Expanded to Thai market

Chicken of the

Sea Infusions

1st branch launched in Beijing

Located in

Taikoo Li

New premium product

Ready-to-eat

premium

shrimp

Italy

United

Kingdom

New, healthier product

Mareblu

Leggero with

60% less fat

New innovative packaging

John West

Fridge Pot


Thai Union is proud to have its efforts recognized by

leading organizations around the world

Asian Excellence Award and Asiamoney Award

• 9th Asian Excellence Award 2019: Asia’s Best CEO and Best Investor Relations Company in Thailand, received by Joerg Ayrle, Group CFO of Thai Union.

• Asiamoney‘s Best Managed Companies Awards: one of the best companies in Thailand for the decade since 2010.

Awards & Recognitions

Seafood Champion Award

• Dr. Darian McBain, Thai Union’s Global Director of Corporate Affairs and Sustainability, for visionary approach to improving seafood sustainability, inspiring positive change across industry, at SeaWeb Seafood Summit 2019.

Thai Union’s Brands Awards

• Thai Union's John West brand, winner of Marine Stewardship Council’s (MSC) 2019 UK Canned Brand of the Year Award for 3rd consecutive year.

• Chicken of the Sea Infusions, winner of People Magazine’s PEOPLE Food Awards 2019: The Best Supermarket Products of the Year (Basil flavour won best new product in Tuna category)

AGM Checklist 2019 by Thai Investors Association

• Thai Union received maximum score of 100 for the AGM Checklist 2019 for third consecutive year


Despite anti-trust charges, we commit to high DPS

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 0.25 0.25

0.22

0.25 0.31 0.31 0.34

0.15

50% 50% 53%

51% 50.7% 50.0%

29.4%

51.3%

59.9%

50.5%

56.7% 57.2% 52.3%

[VALUE]*

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 2018 1H19

THB/Share

DPS (LHS) Payout Ratio (RHS) 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. • *Chicken of the Sea’s net legal accruals impact not considered for the payout calculation for 1H18 dividend payment

Slide 17

Interim dividend for the period: 1 January to 30 June, 2019

DPS THB 0.25

Ex. Dividend Date 20 August, 2019

Record Date 21 August, 2019

Payment date 3 September, 2019


2Q19 Financial Results

Consolidated Results


Joerg Ayrle, Group CFO

Investments need to be value

growth-oriented to strengthen

Thai Union’s portfolio.

“

”


Antitrust litigation in USA

• Chicken of the Sea has now settled with a large majority of plaintiffs.

• The financial exposure has been substantially higher than originally anticipated.

• As a result, Thai Union recorded an additional accrual of USD 60mn (THB 1,858mn) and related tax credit of THB 456mn in 2Q19.

• The net impact of this accrual was THB 1,402mn.

• We believe that the financial impact of this litigation is now fully provided for by Chicken of the Sea.

(in THB mn) 2Q19

Reported Special items

2Q19 Normalized

Net sales

32,214

32,214

Cost of sales

(26,850)

(26,850)

Gross profit

5,364

5,364

SG&A expenses

(5,652)

1,858

(3,794)

Operating profit

(288)

1,570

Other items* 139 139

Tax

260

(456)

(196)

Net income

111

1,513

Slide 20

Remark: *Other items include share of profit of investment in associates and joint ventures, other income, net gain on exchange rates, finance costs, loss from discontinued operations and net profit attributable to non-controlling interests


2Q19: Key Takeaways

COSI antitrust additional accrual

• Based on latest settlements, we recorded additional accrual by THB 1,858mn • Net of an associated tax credit of THB 456mn, the net impact of this accrual

THB 1,402mn • This one-off impact is excluded for performance analysis

Strong GPM • GPM recovering at 16.7%, the record quarterly margin since 2015, from 2Q18

GPM of 14.0% • All key three business segments contributed to margin recovery

Less favorable non-operating items than last year

• FX gains lower from hedged account adoption and tax expenses higher YoY • TU recorded insurance claims amounted THB 133mn during 2Q18 • Equity income improved mainly from Red Lobster operation improvement

Positive OP recovery

• High SG&A prompted 11.8% SG&A to sales ratio, from 10.4% during 2Q18 • Normalized OP at THB 1,570mn (up 29.6% YoY) • Labor retirement benefit accruals according to new labor law were THB 205mn

Challenged sales

• Focusing on reducing less-profitable businesses, affecting sales • European sales weaken from EUR and GBP currencies depreciation (6-7% YoY) • 2Q19 Tuna raw material price down 27% YoY, affecting sales



Efficient inventory management amid declining tuna raw material price environment

Slide 22

%Change QoQ 20.1% 19.6% -4.7% 5.2% 8.3% 8.0% 14.0% 1.2% -22.5% 5.7% -12% -4% +3.2% -16.3%

%Change YoY

13.9% 36.5% 0.2% 44.1% 30.0% 17.3% 40.2% 34.8% -3.5% -5.4% -27% -31% -7.8% -27.0%

1,257

1,503 1,433 1,508 1,633

1,763 2,010

2,033

1,577 1,667

1,467 1,408 1,453

1,217 1,200

900

1,100

1,300

1,500

1,700

1,900

2,100

2,300

2,500

Jan

-16

Feb

-16

Mar

-16

Ap

r-1

6

May

-16

Jun

-16

Jul-

16

Au

g-1

6

Sep

-16

Oct

-16

No

v-1

6

Dec

-16

Jan

-17

Feb

-17

Mar

-17

Ap

r-1

7

May

-17

Jun

-17

Jul-

17

Au

g-1

7

Sep

-17

Oct

-17

No

v-1

7

Dec

-17

Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

Dec

-18

Jan

-19

Feb

-19

Mar

-19

Ap

r-1

9

May

-19

Jun

-19

Jul-

19

Tuna raw material price (USD/ton)

Quarterly average Monthly average

1Q16

1Q17 2Q17

3Q17 4Q17

1Q18 2Q18

3Q18 4Q16 3Q16 2Q16 4Q18 1Q19

2Q19


33,775 34,169 36,012

29,369 32,214

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2Q18 3Q18 4Q18 1Q19 2Q19

Sales THB mn

+9.7% QoQ

-4.6% YoY

USD mn 929 1,020 1,059 1,036 1,098

125,183 134,375 134,937 133,285

63,104 61,583

2015 2016 2017 1H18 1H19

3.1% 7.3% 0.4% -1.2% YoY Growth

2Q19 Sales decline driven by FX, lower raw material prices, and lower sales volume

Slide 23

• 2Q19 sale declined 2.2% YoY, excluding FX impact, driven by: Frozen and Chilled Seafood and

PetCare businesses saw strong sales volume growth YoY

Ambient business saw sales decline from the falling tuna price (-27% YoY) and a keen focus on higher-margin sales.

Branded ambient business sales saw decline mainly from EUR and GBP currency depreciation of 7% against THB

Overall sales volume saw a decline of 2.7% YoY.

On reported basis, 2Q19 sales were at THB 32bn, down 4.6% YoY

-2.4% YoY -0.1% YoY

excluding FX

-2.2% YoY Before currency

impacts


2Q18 2Q19

Excluding the FX impact, 2Q19 reported a decline of 2.2% YoY

Slide 24

Revenue growth component THB mn

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

-4.6% YoY

-2.2% YoY Before currency

impacts

32,214

33,775 -1,756

Tuna Shrimp &

related business1

Sardine &

Mackerel

Salmon-Ambient

Pet Care Value added

& other products2

USD effect

EUR effect

Lobster Other seafood - Ambient

Salmon-Frozen

Other seafood -

Frozen

47 -8 -11

782 84 82 -300 314 31 -112 -714

-13% +2% -1% -5% +10%

+9% +5%

-11% +13%

+2% -1%

-7%


Brand 35%

**FS - Brand

6% **FS - Private Label

5%

Private Label 54%

Remark: *Others represent Asia, Australia, Middle East, Canada, Africa and South America **FS stands for Food Service

42% 39% 39% 38% 39%

29% 33% 31% 31% 29%

8% 8% 9% 11% 12% 6% 6% 6% 6% 5%

14% 13% 15% 15% 14%

0%

20%

40%

60%

80%

100%

2015 2016 2017 2018 1H19

Sales Breakdown by Geographic

Brand 37%

**FS - Brand

6% **FS - Private Label

5%

Private Label 52%

Sales Breakdown by Business

THB 61.6bn THB 133.2bn

2018 1H19

Continued push for domestic and US markets

Slide 25

• 1H19 Sales contribution in key markets shifted in favor of domestic and US markets. TU focused on domestic market,

resulted in 19% sales growth YoY. US sales was stable YoY, as Frozen

Seafood sales growth hindered by lower ambient seafood sales

Europe sales contribution shrunk mainly due to EUR and GBP depreciating against THB in 1H19.

• 1H19 branded sales mix at 43% (compared to 41% during 2018), private label sales contributing remaining 57% of 1H19 sales 1H19 total branded sales increased 0.2%

YoY, partly due to the increased in branded aqua feed sales

1H19 private label sales was down 4.3% YoY due to increased sales volume was offset by the decline in tuna raw material price YoY

Others Japan Domestic Europe USA


4,741 5,406 5,356

4,382

5,364

14.0%

15.8% 14.9% 14.9%

16.7%

10.0%

15.0%

20.0%

25.0%

30.0%

2Q18 3Q18 4Q18 1Q19 2Q19

Gross Profit THB mn

19,501 19,927 19,310 18,892

8,129 9,746

-

5,000

10,000

15,000

20,000

25,000

2015 2016 2017 1H18 1H19

+13.1% YoY

+22.4% QoQ

GPM

2Q19 Gross profit improved 13.1% YoY

• 2Q19 Gross profit was up 13.1% YoY, With tuna raw material prices

declined during the quarter, ongoing product price discussion prompted ambient seafood margin recovery,

Frozen Seafood and PetCare businesses also delivered margin improvement from price recovery and strategy to pursue more value-added products

Adjusted for labor retirement benefits, 2Q19 GPM was at 17.0%, the highest since 2015 (normalized GPM at 16.7%).

Slide 26

GPM 15.6% 14.8% 14.3% 14.2%

+19.9% YoY



1,212

1,866

1,499

1,020

1,570

3.6%

5.5% 4.2%

3.5% 4.9%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

2Q18 3Q18 4Q18 1Q19 2Q19

Operating Profit THB mn +29.6% YoY

+53.9% QoQ

6,817 6,805

4,921 4,669

1,305

2,589

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2015 2016 2017 1H18 1H19

OP Margin

OPM 5.4% 5.1% 3.6% 3.5%

SG&A% 10.4% 10.4% 10.7% 11.4% 11.8%

2Q19 Operating profit delivered strong improvement YoY

Slide 27

• 2Q19 Operating profit was at THB 1,570mn, up 30% YoY: Strong gross margin recovery YoY SG&A higher partly from increasing

marketing expenses • SG&A-to-sales ratio was at 11.8%

(from 10.4% in 2Q18), due to: THB sales declined 4.6% YoY as

European sales declined from weak currency and raw material price decline, prompting higher SG&A ratio.

Compared to SG&A ratio of 11.8%, the ratio would be 11.6% if restated from impact of new Thai labor law on retirement benefits of THB 81mn associated to SG&A.

+98.4% YoY



• 2Q19 EBITDA up 15.4% YoY, Gross margin improvement is the

key contributor to the EBITDA improvement

Business profitability improved from a more stable raw material price environment and product mix adjustment to higher-margin portfolio

EBITDA Margin

9.2% 8.4% 8.6% 8.3%

2,834 3,254

2,703 2,818

3,271

8.4% 9.5%

7.5% 9.6% 10.2%

3.0%

8.0%

13.0%

18.0%

23.0%

28.0%

2Q18 3Q18 4Q18 1Q19 2Q19

EBITDA THB mn

+15.4% YoY

+16.1% QoQ

11,526 11,269 11,579 11,016

5,059 6,089

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

2015 2016 2017 1H18 1H19

+20.3% YoY

EBITDA Margin

2Q19 EBITDA recovery YoY

Slide 28



1,368

1,731

1,223 1,273

1,513

4.1%

5.1%

3.4% 4.3% 4.7%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

2Q18 3Q18 4Q18 1Q19 2Q19

Net Profit THB mn

+10.6% YoY

+18.8% QoQ

5,302 5,254 5,989

5,191

2,237 2,787

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2015 2016 2017 1H18 1H19

NPM

NPM 3.0% 4.1% 5.1% 3.4%

• With strong recovery in operating performance, TU’s 2Q19 net profit was at THB 1,513mn, up 10.6% YoY, despite the key non-operating items lowered: FX gains of THB 164mn (from THB

222mn in 2Q18), Tax expense of THB 196mn from

improved profitability, vs THB 91mn recorded in 2Q18

• However, equity income mainly improved from Red Lobster operation recovery YoY.

2Q19 Net profit improved 10% YoY

Slide 29

+24.6% YoY



Adjusted NP Margin 1,018

1,731

1,223 1,111

1,718

3.0%

5.1%

3.4% 3.8%

5.3%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

2Q18 3Q18 4Q18 1Q19 2Q19

Adjusted Net Profit THB mn

+68.8% YoY

+54.6% QoQ

2Q19 Adjusted net profit up 69% YoY

• Excluding the one-off quarter-end items, 2Q19 adjusted net profit was at THB 1,718mn, representing 69% increase YoY

• One-off positive items during 2Q19 of THB 205mn comprised of: Labor retirement benefit accruals

according to the new labor law were allocated to both COGS (THB 124mn) and SG&A (THB 81mn).

Slide 30

-79

1,718

2Q19 Normalized NP

2Q19 Adjusted NP

+81

+124

Retirement benefits - COGS

1,513

Retirement benefits - SG&A



1.11 1.10 1.26

1.09

0.47 0.58

2015 2016 2017 1H18 1H19

0.29

0.36

0.26 0.27 0.32

2Q18 3Q18 4Q18 1Q19 2Q19

Earning per Share (EPS)* THB

+10.6% YoY

+18.8% QoQ

+24.6% YoY

EPS: 2Q19 EPS was up 10.6% YoY

• 2Q19 normalized EPS was at THB 0.32, up 10.6% YoY and 18.8% QoQ, along with the net profit trajectory.

Slide 31

Remark: Excluding one-time net accrual for US legal-related settlement of THB1,402mn (2Q19) and THB1,359mn (2Q18), ESCo business closure-related expenses of THB489mn (2H18) and TMAC investment impairment of THB 87mn (4Q18). *EPS in this slide represents fully diluted EPS based on current number of shares of 4,771,815,496


THB mn • 2Q19, while still in negative, the net

profit has recovered from the previous year from turnaround initiatives and collaboration with TU.

• Interest income remained stable and well-above funding cost

• As a result, the equity income and total net income contributions to TU have both improved YoY.

2Q19: Improved operation

Slide 32

Share of profit

Other income

Finance costs

Income tax

Net income

EPS (THB/share)

Red Lobster has contributed THB 168mn to net profit in 2Q19

2Q19 1Q19 4Q18 3Q18 2Q18

-9 144 -201 64 -128

249 249 258 256 259

-146 -142 -138 -137 -129

73 34 -113 104 93

168 284 -193 287 96

0.04 0.06 -0.04 0.06 0.02


5,544

2,938

8,401

2,437

2016 2017 2018 1H19

Annual Free Cash Flow THB mn

3,794

2,186

1,052 1,259 1,178

2Q18 3Q18 4Q18 1Q19 2Q19

Quarterly Free Cash Flow THB 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 FCF is based on reported financial statement basis

Cash Conversion Rate1

1.18 0.91 0.77 0.68 0.59

Cash Conversion Rate1 0.67 0.33 0.95 0.67

• 2Q19 free cash flow was at THB 1.2bn, which was due largely to a one-time legal expense from US lawsuit,

• However, despite the significant legal expense booked during the quarter, efficient inventory control and falling tuna price prompt a stable free cash flow profile compared to the 1Q19.

2Q19 Free cash flow weak from one-time US legal expense

Slide 33


53 110

2,169

-48

-102

Free Cash Flow THB 2,437 mn

Unit: THB mn

ND/E 1.39x Kd = 3.20%

ND/E 1.38x Kd = 3.21%

63,480

891

-537 -4,231

64,374

Net Debt as of

1 Jan 2019

Net Debt as of

30 Jun 2019

803

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

Other Investing & Financing activities*

CAPEX Other non-cash

expenses

Tax payments

Net interest paid

Dividend received

Change in other assets

and liabilities

EBITDA Change in net working capital

Income tax paid and other investing & financing activities

1H19: Strong cash flow prompted THB 894mn debt repayment

Slide 34

1.35x before adoption of

TFRS 9 and 16

Excluding one-time net accrual for US legal-related settlement of THB1,402mn (2Q19) and THB1,359mn (2Q18), ESCo business closure-related expenses of THB489mn (2H18) and TMAC investment impairment of THB 87mn (4Q18).


2018 2Q19

98.3% 98.2%

0.0%

1.7% 1.9%

2018 2Q19

Interest-bearing debts of THB 64,544mn

Long-term loan by maturity THB 37,780mn

By Maturity

2023 onward

s

2022

2021

Long-term debt

Current portion of long-term debt & finance lease

Short-term loan 21%

65%

14%

EUR

By Currency

USD

THB

THB 64.5bn THB 64.5bn

23%

61%

16%

Majority THB funding, reducing risk associated to currency volatility

Slide 35


Remark: 1ROE = Annualized quarterly net profit/ Average total shareholders’ equity 2ROCE = 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 ventures 3Net WC day = INV day + A/R day – A/P day 4ND/E ratio = Net interest-bearing debt/ Total equity,

Net interest-bearing debt = Total interest-bearing debt - Cash & Cash equivalents including ST investment *Net debt to equity of 1.35X, before adoption of TFRS 9 and 16

Net WC3

9.9% 8.0% 7.7%

9.9% 8.0%

2Q19 1Q19 4Q18 3Q18 2Q18

ROCE2

ROE1 Net Debt to EBITDA

14.1% 11.8% 11.5%

16.2%

12.5%

2Q19 1Q19 4Q18 3Q18 2Q18

INV Days

4.85 5.63 5.95

4.92 5.73

2Q19 1Q19 4Q18 3Q18 2Q18

41,652 41,213 39,085 38,212 38,383

111 109 100

118

107

2Q18 3Q18 4Q18 1Q19 2Q19

WC (THB mn) WC Day

39,708 39,996 38,371 36,859 37,126

125 125

115

135

124

2Q18 3Q18 4Q18 1Q19 2Q19

INV (THB mn) INV Day

Keen focus on NWC management

Slide 36

1.38x 1.36x 1.39x 1.40x 1.41x

2Q19 1Q19* 4Q18 3Q18 2Q18

ND/E4

Target 4.0-4.5

Target 1.0-1.1

Excluding one-time net accrual for US legal-related settlement of THB1,402mn (2Q19) and THB1,359mn (2Q18), ESCo business closure-related expenses of THB489mn (2H18) and TMAC investment impairment of THB 87mn (4Q18).


2Q19 Financial Results

Results by Business Units


1,633 1,763

2,010 2,033

1,577 1,667 1,467 1,408 1,453

1,217

900

1,100

1,300

1,500

1,700

1,900

2,100

2,300

2,500

Tuna raw material price (USD/ton)


3Q17 4Q17

1Q18 2Q18

3Q18 4Q18 1Q19

2Q19

1Q17 2Q17

212 169 176 175 183

141 158 145 167

139

70

120

170

220

270 Shrimp raw material price

(60pcs/kg) (THB/kg)


1Q17 2Q17 1Q18

2Q18 3Q18 4Q18 1Q19 2Q19

3Q17 4Q17

Source: Thai Union Group and Bloomberg

Key operating impact: Tuna and shrimp raw material prices declined to favorable, lower-end range while salmon remained at manageable level

Slide 38

In July 2019, raw material prices closed at: • Tuna - USD 1,200/ton • Shrimp - THB 147/kg • Salmon - NOK 61/kg

In 2Q19, average raw material prices closed at: • Tuna

USD 1,217/ton (-27.0% YoY, -16.3% QoQ) • Shrimp

THB 139/kg (-1.2% YoY, -16.6% QoQ) • Salmon

NOK 65/kg (-5.4% YoY, +3.1% QoQ)

Prices continued to decline at a manageable level

Price trending upward after some retracement

from peak last year

66 67 59

53 60

69

58 58 64 65

40

50

60

70

80

90 Salmon raw material price

(NOK/kg)


3Q17 4Q17

1Q18 2Q18

3Q18 4Q18 1Q19 2Q19 1Q17 2Q17

Fluctuation in the range of 140-160 THB/kg since

2018


43.52 43.87 43.69 43.74 43.93 43.44 42.99 42.19 41.18 40.60

36.0

38.0

40.0

42.0

44.0

46.0

48.0


1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18

2Q19 1Q19 4Q18

37.41 37.72 39.20 38.78 38.78

38.05 38.35 37.42

35.90 35.48 34.0

35.0

36.0

37.0

38.0

39.0

40.0

41.0


1Q17 2Q17

3Q17 4Q17 3Q18 4Q18

1Q19

1Q18 2Q18

2Q19

35.12 34.30

33.39 32.95 31.54 31.92

32.97 32.81 31.61 31.59

28.0

30.0

32.0

34.0

36.0

38.0

ม.ค.

-17

มี.ค.

-17

พ.ค.

-17

ก.ค.

-17

ก.ย.

-17

พ.ย.

-17

ม.ค.

-18

มี.ค.

-18

พ.ค.

-18

ก.ค.

-18

ก.ย.

-18

พ.ย.

-18

ม.ค.

-19

มี.ค.

-19

พ.ค.

-19

ก.ค.

-19


1Q17 2Q17

3Q17 4Q18

1Q19 4Q17

1Q18 2Q18 3Q18

2Q19

In July 2019, average FX rates closed at: USD/THB – THB 30.79 EUR/THB – THB 34.56 GBP/THB – THB 38.47

In 2Q19, average FX rates closed at: USD/THB THB 31.59 (-1.0% YoY, -0.1% QoQ) EUR/THB THB 35.48 (-6.8% YoY, -1.2% QoQ) GBP/THB THB 40.60 (-6.5% YoY, -1.4% QoQ)

USD/THB EUR/THB

Key operating impact: Euro and GBP weakest against Thai Baht since 1985, affecting our sales

Slide 39

GBP/THB

Source: Thai Union Group

Continued decline since 2Q18 and remains a risk factor

Risk factor

Continued depreciation with recent sharp decline

Risk factor

Continues to decline against THB after gaining strength in 2018


Tuna Tuna slices

Sardine & mackerel Ambient and pouch salmon

Sales: THB 24,964 mn

Frozen, chilled seafood and related

41% 45%

59%

41%

Sales Split

36% 64%

13%

87%

15%

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 Excluding one-time net accrual for US legal-related settlement of THB1,402mn (2Q19) and THB1,359mn (2Q18), ESCo business closure-related expenses of THB489mn (2H18) and TMAC investment impairment of THB 87mn (4Q18).

Slide 40

3 strategic business segments

Total 6M19 sales: THB 61,583 mn

Sales: THB 27,488 mn

Ambient seafood

Sales: THB 9,131 mn

PetCare, value-added and others

Shrimp and related 1 Lobster

Frozen, chilled & smoked salmon Other seafood2

PetCare Marine ingredients

Value-added 3 Other products4


[CELLRANGE]

[CELLRANGE]

[CELLRANGE]

[CELLRANGE]

[CELLRANGE]

[CELLRANGE]

[CELLRANGE]

[CELLRANGE] [CELLRANG

E] [CELLRANG

E]

- 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

2Q18 3Q18 4Q18 1Q19 2Q19

Sales (THB million) Quantity (Tons)

Gross Profit Margin (Percent)

-14.3% YoY

+4.3% QoQ

-16.9% YoY

-2.4% QoQ

Brand

Private label

Brand

Private label

Total

Brand

Private label

[CELLRANGE]

[CELLRANGE]

[CELLRANGE]

[CELLRANGE]

[CELLRANGE]

[CELLRANGE]

[CELLRANGE]

[CELLRANGE]

[CELLRANGE]

[CELLRANGE]

16,363 16,806 14,994

13,456 14,031

- 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

2Q18 3Q18 4Q18 1Q19 2Q19

22% 21%

17%

20%

23%

12%

16% 16% 17%

22%

18% 19% 17% 19%

22%

2Q18 3Q18 4Q18 1Q19 2Q19

Ambient Seafood: Gross margin recovery despite weak sales

Slide 41

• 2Q19 ambient sales declined 14.3% YoY, while gross profit improved 9.1% YoY.

• Weak sales were partly attributed to the depreciating European currencies (EUR/THB -6.8% YoY and GBP/THB -6.5% YoY)

• Gross profit margin at 22.4%, up from 17.6% in 2Q18: Falling tuna price environment A focus on higher-value product sales Automation implementation enables a

more efficient work process.

79,973 93,855 93,236 88,841 78,018



8% 8% 9%

10% 10%

9%

11% 10%

7%

9% 8%

10% 10% 8%

9%

2Q18 3Q18 4Q18 1Q19 2Q19

Frozen, chilled seafood and related: Solid growth and salmon business turnaround

Slide 42

• 2Q19 frozen and chilled seafood sales up 3.6% YoY, driven mainly by volume growth (10.0% YoY) that outpaced raw material price decline (shrimp -1.2% YoY; salmon -5.4% YoY).

• Gross profit margin was at 9.4%, up 70bps YoY, attributed to margin improvement in all shrimp, salmon and lobster business.

• European salmon business margin recovered from business restructuring and price recovery to reflect prevailing salmon price.

Sales (THB million)

+3.6% YoY

+16.5% QoQ

Brand

Private label

[CELLRANGE]

[CELLRANGE]

[CELLRANGE]

[CELLRANGE]

[CELLRANGE]

[CELLRANGE]

[CELLRANGE]


E]

[CELLRANGE]

12,962 13,031 15,651

11,529 13,435

- 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

2Q18 3Q18 4Q18 1Q19 2Q19

[CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE]


E]

[CELLRANGE]

[CELLRANGE]

[CELLRANGE]

62,253 63,443 67,552 61,862 68,504

- 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

2Q18 3Q18 4Q18 1Q19 2Q19

Quantity (Tons)

+10.0% YoY

+10.7% QoQ

Brand

Private label


Total

Brand

Private label



• PetCare and valued added sales increased 6.7% YoY, on the back of sales volume increase 5.9% over the same period. Pet food business delivered a solid sales

growth, driven mainly by sales volume. Value-added products and others segment

reported significant business growth in can manufacturing subsidiary.

• Gross margin has improved due to strong sales growth and growing value-added product sales mix.

+5.9% YoY



- 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

2Q18 3Q18 4Q18 1Q19 2Q19

[CELLRANGE]

[CELLRANGE]

[CELLRANGE]

[CELLRANGE]

[CELLRANGE]

[CELLRANGE]

[CELLRANGE]


E]

[CELLRANGE]

4,450 4,332 5,367

4,384 4,747

-

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

2Q18 3Q18 4Q18 1Q19 2Q19

17% 21%

24% 22% 20%

2Q18 3Q18 4Q18 1Q19 2Q19

Brand

Private label

PetCare, value-added and others: Growth story continued

Slide 43

Sales (THB million)

+6.7% YoY

+8.3% QoQ

Brand

Private label

Quantity (Tons)

-0.5% QoQ

Total


67,508 63,759 67,126 73,769 67,838



Thai Union’s geographic diversity: Sales

(Asia, Australia, Middle East, Africa and South America)

United States and Canada

42% Europe

28%

Thailand

13%

17% Others


12,931 12,801 15,192

12,207 12,792

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

2Q18 3Q18 4Q18 1Q19 2Q19

Sales THB mn

-1.1% YoY

+4.8% QoQ

US & Canada: Strong growth in frozen seafood segment

Slide 45

• 2Q19 North America sales declined by 1.1% in Thai Baht term. USD depreciated 1.0% YoY vs Baht US Frozen businesses, both shrimp

and lobster, deliver solid sales growth US Canned tuna sales dropped on

lower sales of lower-margin products Thai export to US declined due to

USD depreciation against THB • Red Lobster operation improved YoY


• Chicken of the Sea Frozen Foods launched a fully prepped, ready-to-eat cooked lobster meat packed in an innovative vacuum-sealed, five-ounce packaging under Orion Seafood brand.

• It has been rolled out in national retailers and wholesale club chains in United States, such as Meijer and BJ’s, with an aim to introduce to Retail, Club and Foodservice channels

Product launch:

Chicken of the Sea

Frozen Foods introduces

Orion Cooked Lobster Meat Retail Pack


Chicken of the Sea launches new premium product line:

Wild Catch

Slide 47

• Thai Union is continuing expansion of its product portfolio with national launch of “Wild Catch” product line under Chicken of the Sea brand in United States on 5 August 2019

• Chicken of the Sea Wild Catch is a range of premium, responsibly wild-caught seafood, including Albacore, Ahi Yellowfin and Alaskan Salmon. Thai Union’s SeaChange program is featured on pack.

• It is 100% natural, packed with just hand-selected fillet pieces, water and sea salt.

• Transparent pack allows consumers to see for themselves a higher standard of quality.

TBU – pending from COSI


• 2Q19 European sales declined 8.3% YoY in Thai Baht term, largely driven by weakened EUR and GBP exchange rate against Thai Baht YoY,

• However, EU branded tuna business still delivered gross profit improvement due to more stable tuna raw material price environment.

10,612 10,890 10,503 8,198

9,726

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

2Q18 3Q18 4Q18 1Q19 2Q19

Sales THB mn

-8.3% YoY

+18.6% QoQ

Europe: Weak revenue well-compensated by improved profit

Slide 48


King Oscar (USA) introduced Royal Selection Brisling Sardines self-stable line in unique see-through packaging with easy-peel lid for bold product differentiation in April 2019.

MSC certified, sustainably wild-caught fish, specially selected non-GMO ingredients, and unique recipes for super premium quality.

Shipping soon to select retailers in USA (incl. KeHe, Albertsons/Safeway, Jewel, Supervalu, Lunds, Cub, Amazon, and shortly to additional strategic customers).

Slide 49

King Oscar (USA) launches super premium, certified sustainable line of Brisling Sardines in boldest packaging ever …SEE

THROUGH LID!

Product launch: Packaging innovations


Hawesta launches two ready-to-eat innovations to Germany, Tuna Infusions, and a fourth variety of the Tuna Salads

Product launch: Ready-to-eat innovations

• In March 2019, Hawesta launched fourth variety, Couscous, to expand Tuna Salads product line

• Three varieties of Tuna Salads were launched in 2017 and are well established in Germany (16.6% market share)*

• Tuna Salad Mexico is among top 10 products of Hawesta and Rügenfisch portfolio

*Source: IRI MAT June 2019, value

• Hawesta launched three varieties of Tuna Infusion in May 2019

• The ready-to-eat product is a real innovation in the German seafood market.


• 2Q19 Thailand sales up 19.4% YoY. • Diversifying sales in home market to

offset weaker export market from THB appreciation against key currencies

• Strong export sales from Ambient, Frozen and PetCare business

Thailand: Star performer

Slide 51

3,169 3,379 4,242 3,853 3,785

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

2Q18 3Q18 4Q18 1Q19 2Q19

Sales THB mn

+19.4% YoY

-1.8% QoQ


Product launch: Chicken of the Sea Infusions makes it way to Thai supermarkets

• Chicken of the Sea Infusions was recently launched in the Thai market through Thai Union’s subsidiary and Sealect brand distributor, SeaHolding

• Now available at 7-11 and Tops Supermarket in Thai Chili and Sun-Dried Tomato flavors, and soon to come to WeFitness gym club

• Ready-to-eat, flavored tuna, shelf-stable product



7,063 7,099 6,075

5,111 5,911

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

2Q18 3Q18 4Q18 1Q19 2Q19

Sales THB mn

-16.3% YoY

+15.7% QoQ

EM and rest of the world: Falling raw material prices hurt sales

Slide 54

• 2Q19 sales was at THB 5.9bn, down 16.3% YoY mainly driven by the weak sales to Middle East, attributable to both the falling tuna prices and lower sales volume.

• China sales delivered sales decline from the previous year, partly driven by falling shrimp price YoY.


• In May 2019, Thai Union China showcased King Oscar China brand at SIAL Expo, 3rd largest food show in the world

• Exhibitors: major market players from retail, HoReCa, food services, import/export trade and manufacturing.

• Sets benchmark for overseas companies stepping into Asia and China and provides valuable market insights, trends and innovations of regional food industry.

Thai Union China showcases premium quality seafood at SIAL Expo 2019,

Red Lobster opens 1st branch in Beijing

Global expansion: China remains key growth market

• Red Lobster opened 1st branch in Beijing, China, in July 2019, as part of the American casual dining chain’s international expansion

• Located in Taikoo Li, mainly with American expats and study-abroad Chinese consumers

• Key selling points: fresh, reasonably priced seafood, fun atmosphere, and ability to accommodate large groups

Photo Credits: Annabelle Lim/timeoutbeijing.com (1, 3, 4), Kyle M./theBeijinger.com (2)

(1) (2)

(3) (4)


Remark: 1Shrimp & related business includes frozen shrimp, shrimp feed and value-added shrimp 2Other seafood includes frozen cephalopod, crab, scallop, shellfish and other fish 3Value-added business includes ready-to-eat products, maguro & cephalopod sashimi, local products, bakery products and snack 4Other products include scrap, fishery and others Excluding one-time net accrual for US legal-related settlement of THB1,402mn (2Q19) and THB1,359mn (2Q18), ESCo business closure-related expenses of THB489mn (2H18) and TMAC investment impairment of THB 87mn (4Q18).

2Q19 Segment profitability

Slide 56

Gross profit THB million

Margin %

Sales THB million

Business segment

5,364

Ambient seafood

• Tuna • Sardine and mackerel • Ambient and pouch salmon

14,031 22.4 3,140

Frozen, chilled seafood and related

• Shrimp and related 1

• Lobster • Frozen, chilled and smoked salmon • Other seafood2

13,435 9.4 1,261

PetCare, value-added and others

• PetCare • Value-added and others1

• Other products2

4,747 20.3 963

Total 32,214 16.7


Business Outlook



Appendix

Slide 59


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 2019

TU

SET

Minimum 50% payout of our net profit with semi-annual payments

THB

Bloomberg/ Reuters TU TB/ TU.BK

Share price (5 August, 2019) THB 18.90

Historical price

52-week high THB 17.70

52-week low THB 17.10

No. of paid up shares 4,771.8mn

Par value THB 0.25

Market Capitalization THB 90.2bn

Chansiri Family 19.5%

Thai NVDR 11.2%

Mitsubishi Corporatio

n 7.3%

Social Security

Office 7.2%

Niruttinanon Family

6.9%

Others 48.0%

Source: SET and TU

As of 28 June, 2019

Free float 67.4%

Foreign ownership/ Foreign limit 32.4%/ 45.00%

Share capital information

Slide 60

Stock Performance at a Glance Major Shareholders

Dividend Policy

DPS (THB per share) Period 1H19 2H18 1H18 2H17 1H17 2H16 1H16

DPS 0.25 0.15 0.25 0.34 0.32 0.31 0.32

*The company changed the par value from THB 1 to THB 0.25 and registered with the Ministry of Commerce on 25 Dec 2014.


2Q19 Income statement

Slide 61

2Q19 2Q19

2Q18 1Q19

Change Change

Sales 32,214 100% 33,775 100% 29,369 100% -4.6% 9.7%

Cost of sales (26,850) -83.3% (29,035) -86.0% (24,987) -85.1% -7.5% 7.5%

Gross profit 5,364 16.7% 4,741 14.0% 4,382 14.9% 13.1% 22.4%

SG&A expenses (3,794) -11.8% (3,529) -10.4% (3,362) -11.4% 7.5% 12.8%

FX gain (loss) 164 0.5% 222 0.7% 80 0.3% -26.1% 104.4%

Other income 498 1.5% 628 1.9% 497 1.7% -20.7% 0.1%

Share of profits from investments in assoc. & Jvs 110 0.3% 44 0.1% 347 1.2% 150.4% -68.3%

EBIT 2,342 7.3% 2,105 6.2% 1,945 6.6% 11.2% 20.4%

Finance cost (516) -1.6% (498) -1.5% (528) -1.8% 3.6% -2.3%

EBT 1,826 5.7% 1,607 4.8% 1,417 4.8% 13.6% 28.9%

Tax (196) -0.6% (90) -0.3% (27) -0.1% 116.6% 623.8%

Profit (Loss) from discontinued operarion (29) -0.1% (38) -0.1% (43) -0.1% -23.7% -32.6%

Net income 1,601 5.0% 1,479 4.4% 1,347 4.6% 8.3% 18.9%

Net income (loss) attributable to:

Equity holders of the Company 1,513 4.7% 1,368 4.1% 1,273 4.3% 10.6% 18.8%

Non-controlling interests of the subs 87 0.3% 110 0.3% 73 0.2% -20.9% 19.3%

Earnings per share

Basic earnings per share 0.32 0.29 0.27 10.6% 18.8%

Exchange rate

THB/USD 31.59 31.92 31.61 -1.0% -0.1%

(Unit: THB mn) 2Q19%

to sales2Q18

%

to sales

%

to sales

Consolidated

1Q19


Remark: *Including short-term investments

Statement of Financial Position as of 30 June 2019

Slide 62

Cash and cash equivalents* 1,063 0.8% 972 0.7% 9.4%

Trade and other receivables - net 15,422 11.0% 15,637 10.9% -1.4%

Inventories - net 37,126 26.5% 39,708 27.7% -6.5%

Other current assets 3,041 2.2% 2,040 1.4% 49.1%

Total current assets 56,652 40.4% 58,357 40.7% -2.9%

Fixed assets 27,542 19.7% 26,320 18.4% 4.6%

Investments 21,474 15.3% 23,475 16.4% -8.5%

Goodwill and other intangible assets 28,398 20.3% 30,530 21.3% -7.0%

Other non-current assets 6,050 4.3% 4,708 3.3% 28.5%

Total Assets 140,116 100% 143,390 100% -2.3%

Bank overdrafts and short-term loans 15,688 11.2% 14,145 9.9% 10.9%

Trade and other payables 18,946 13.5% 18,843 13.1% 0.5%

Current portion of long-term loans 9,989 7.1% 3,916 2.7% 155.1%

Other current liabilities 887 0.6% 2,027 1.4% -56.2%

Total current liabilities 45,509 32.5% 38,930 27.1% 16.9%

Long-term loans 38,867 27.7% 47,863 33.4% -18.8%

Other non-current liabilities 9,727 6.9% 10,483 7.3% -7.2%

Total Liabilities 94,103 67.2% 97,276 67.8% -3.3%

Non-controlling interests of the subsidiaries 3,502 2.5% 3,140 2.2% 11.5%

Total Shareholders’ Equity 42,511 30.3% 42,974 30.0% -1.1%

Total liabilities and shareholders’ equity 140,116 100% 143,390 100% -2.3%

(Unit: THB mn) 2Q19% to total

assets2018

% to total

assetsChange


2Q19 Statement of cash flow

Slide 63

Remark: *Figures as reported in August 2019

(Unit: THB mn) 1H19 1H18 Change

Profit before income tax 1,349 1,069 279

Adjustments for depreciation & amortisation expenses 1,803 1,437 366

Other adjustments 970 1,658 (688)

Changes in operating assets and liabilities 484 3,551 (3,067)

Cash flows receipts from operating activities 4,606 7,716 (3,110)

Net cash receipts (payments) from operating activities 4,654 7,529 (2,875)

Net cash payments for investing activities (2,307) (2,124) (184)

Net cash receipts (payments) for financing activities (3,004) (5,308) 2,304

Net increase (decrease) in cash and cash equivalent (657) 97 (755)

Cash and cash equivalents - opening balance 1,311 573 738

Exchange gain (loss) on cash and cash equivalents (59) 2 (61)

Cash and cash equivalents - closing balance 594 672 (78)

CAPEX 2,169 2,553 (384)

Management Est. Free Cash Flows* 2,437 5,163 (2,726)

Consolidated


Investor Relations Department

+66 2298 0024

[email protected]

investor.thaiunion.com

@irthaiunion

Thai Union Group PCL. 9 August, 2019 - set.or.th · •Dr. Darian Mcain, Thai Union [s Global Director of orporate Affairs and Sustainability, for visionary approach to improving

Documents