Analysts Meeting. 3Q17 Results Presentation. 7 November Page 1

Transcription

1 Analysts Meeting 3Q17 Results Presentation 7 November 2017 Page 1

2 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. Page 2

3 Agenda Key Highlights Recent Developments 3Q17 Financial Results Business Outlook Page 3

4 Agenda Key Highlights Recent Developments 3Q17 Financial Results Business Outlook Page 4

5 Through organic growth, innovation and M&A efforts, we are committed to the USD 8.0bn revenue target by Thiraphong Chansiri President and Chief Executive Officer Page 5

6 3Q17: Continued cost control and Red Lobster support profits 4,658 1,737 GP NP YoY Chg 35,185 Sales +0.4% (THB mn) % of sales -5.6% 13.2% 1,319 OP -29.5% 3.8% +8.9% 4.9% Record quarterly sales. 3Q17 sales was at a record level through driven by a product repricing from increased raw material prices Rising raw material prices. Gross profit margin remained under pressure at 13.2% resulted from a sharp year-over-year increase in raw material prices and GBP depreciation Strict cost control. Due to the stringent cost control, 3Q17 SG&A to sales ratio remain under controlled at 9.1% (9.5% on reported basis), well below a 2017 guidance of lower than 10%. Operating profit declined on weak gross profits, part of the operation weakness was offset by good cost control Net profit improved YoY. Despite a rising raw material prices, the net profit was supported by growing income contribution from Red Lobster investment, and prudent FX and tax management.. Remark: Operating margin = (COGS SG&A)/sales Page 6

7 9M17 Net profit up 6.1% YoY, record 9M sales Financial Summary 1 (THB million) 9M17 Net Profit up 6.1% YoY to Total Sales 9M17 9M16* 101, , % THB 4,617million Gross Profit 9M17 9M16* Q ,656 15, % Share price movement Operating Profit EBITDA Q1 11 9M17 9M16* 9M17 9M16* 3,826 5,570 8,763 9, % -7.0% (Jan- Dec 16 ) +24.3% (Jan- Nov 3,17 ) -15.2% Stable ND/E despite high raw material price Net Profit 9M17 9M16* 4,617 4, % 2016 ND/E 1.37x 3Q17 ND/E 1.37x Page 7 Source: 1 TU; 2 SET (Jan 4 16: THB16.9/share and Dec 30 16: THB21.0/share, Jan 4 17: THB21.1/share and Nov 3 17: THB17.9/share) *The 9M16 figures were restated mainly due to reclassification of fishing fleet discontinued operations

8 3Q17: Continued overall net profit resilience Total sales (THB mn) GPM NPM 60,000 Raw material prices rising 20.0% 50,000 40,000 30, % 28, % 17.3% 16.0% 15.9% 14.2% 14.1% 13.4% 13.8% 13.4% 13.2% 32,602 34,401 35,050 33,333 33,715 34,818 35,185 30,642 31,210 31, % 16.0% 14.0% 12.0% 10.0% 20,000 10, % 4.3% 5.0% 2.3% 3.9% 4.4% 4.5% 2.7% 4.7% 4.1% 4.9% 8.0% 6.0% 4.0% 2.0% 0 % Growth YoY 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16* 4Q16* 1Q17 2Q17 3Q17 0.0% Sales Gross profit Net profit Page 8 Remark: Operating margin = (COGS SG&A)/sales *The 3Q16 and 4Q16 figures were restated mainly due to reclassification of fishing fleet discontinued operations

9 Agenda Key Highlights Recent Developments 3Q17 Financial Results Business Outlook Page 9

10 Recent developments Awards Recognitions: Jul 2017: Thai Union s executives awarded the top 3 companies in the Consumer/Staples sector in 2017 in the following categories Best CEO Third Place Mr. Thiraphong Chansiri Nominated by the Sell Side Best CFO Third Place Mr. Joerg Ayrle Nominated by the Sell Side Sep 2017: Thai Union has been recognized as the Most Honored Company in Thailand Oct 2017: Thai Union has been shortlisted as a finalist in the following categories for the IR Magazine Awards & Conference South East Asia 2017 Best in sector - consumer staples Best IR during a corporate transaction Operations & Others: New Product: Sep 2017: Tri-Union Seafoods LLC received conditional leniency with respect to the Investigation under the DOJ s Corporate Leniency Program Oct 2017: Thai Union is introducing a new Management Committee structure in Europe as part of our global program to harmonize our operations in all of our key regions. Page 10

11 Recent developments Sustainability: Aug 17: Thai Union, along with the Labour Rights Promotion Network Foundation (LPN), recently celebrated the official opening of the company s third pre-school for the children of migrant workers in Samut Sakhon. Sep 2017: Thai Union has been included in the Dow Jones Sustainability Index (DJSI) Emerging Markets for the fourth year in a row. Sep 2017: Thai Union encourages employees from every business units to participate the company s first ever Global Sustainable Development Award. Oct 2017: Thai Union was shortlisted for two awards, including Sustainability Leader of the Year (Darian McBain) and Sustainability Report of the Year at the Ethical Corporation s Eighth Annual Responsible Business Awards ceremony held at the Waldorf Hilton Oct 2017: Thai Union was honored to be named one of the Asia Corporate Excellence & Sustainability Awards (ACES) winners for Top Corporate Social Responsibility (CSR) Advocates during a ceremony in Singapore. Page 11

12 Alibaba and Thai Union partnership Premium quality seafood through China s largest e-commerce network Jun 2017: MOU with Alibaba group Jun 2017: Offline event with Yiguo (Tmall super fresh goods operator) to help King Oscar launch in Tmall super July 2017: King Oscar exclusive channel in Tmall super Sep 2017: Receive supplier exclusivity of live lobster to Alibaba s offline store, Hema Oct 2017: Tmall super double 11 pre-sale, KO provide 2 of 4 exclusive seafood item and is one of two live lobster suppliers Nov 2017: King Oscar is one of the two seafood brands who join the Tmall super s super member trial in Double 11 Page 12

13 Delayering European Business Structure Oct: Thai Union is introducing a new Management Committee structure in Europe as part of our global program to harmonize our operations in all of our key regions. Corporate Supply Chain Committee (led by CEO) CEO CFO European Business Supply Chain Thierry Gueguen Oversee our major production plants in Seychelles, Ghana, France, Portugal and King Oscar to guarantee Quality, EH&S and governance standards Regional President Paul Reenan oversee the commercial operations of all our European brands, our exports business, the chilled business operations and our developing foodservice offer across the region Business Services & CFO Stephane Re CFO of our businesses in Europe additional responsibilities for Business Services across Europe a number of functional disciplines will report to Stephane Legal Counsel David Sankowicz Group Legal & Insurance Director, retain his responsibility for legal services across all European operations in addition to his global role. Page 13

14 Fish oil extraction update Fish oil extraction plant at Samut Sakhon Oil refinery plant in Rostock, Germany Page 14

15 DOJ Investigation update Sep: Tri-Union Seafoods LLC received conditional leniency with respect to the Investigation from the US Department of Justice 22 July 2015: Tri-Union received a subpoena from the DOJ to provide relevant information to the DOJ in relation to an antitrust investigation of the packaged seafood industry in the US 11 September 2017: Tri-Union has received conditional leniency with respect to the Investigation under the DOJ s Corporate Leniency Program Tri-Union Seafoods LLC Seafoods LLC (Tri-Union), a subsidiary operating packaged seafood business in the US under the brand Chicken of the Sea, has received conditional leniency with respect to the Investigation under the DOJ s Corporate Leniency Program. Provided Tri-Union continues to fully cooperate with the DOJ, Tri-Union s conditional leniency status means that neither Tri-Union nor any cooperating executives or employees within the scope of the Investigation will face criminal fines, jail time, or prosecution. Thai Union was not involved in the conduct for which Tri-Union has received conditional leniency. Page 15

16 Agenda Key Highlights Recent Developments 3Q17 Financial Results TU s Consolidated Results Results by Business Unit Business Outlook Page 16

17 Despite challenging operating environment, we remain committed to deliver solid growth and enhance our shareholders value. Joerg Ayrle Group Chief Financial Officer Page 17

18 The key take away for 3Q17 results Top line at record level 3Q17 sales at a record THB 35.2bn, despite light demand and weak currencies At constant exchange rates, sales would have increased 2.1% YoY Continuously weak GPM Record tuna prices continue to put pressure on profit margin Four consecutive quarters of positive GP for European Salmon business Strong cost control leads to 100bps saving Prudent cost control prompt 9.1% 3Q17 SG&A to sales ratio (adjusted for one-off restructuring and relocation costs; 9.5% reported), well below 10% guidance Non-operating items support net profit Prudent FX management policy posted strong FX gains in 9M17 Significant tax and non-controlling interests savings Red Lobster operations on track Mainly from interest yield and tax savings Slightly negative share of profits due to seasonality and natural calamity in the US Page 18

19 3Q17: Profitability profile intact amid challenging environment Despite the rising tuna prices over the past 12 months, TU s profitability profile remain largely resilient Income contribution from investments and prudent FX and tax management support net profit margin improvement 2,200 2,000 60,000 1,800 1,600 50,000 1,400 40,000 1,200 30,000 1,000 20, ,000 0 Total Sales (THB mn) 2,010 1, % 17.3% 1, % 15.9% 1, % 14.2% 1, % 13.4% 13.8% 13.4% 13.2% 1,503 1,433 1,047 1,257 1,103 1, % 5.0% 4.3% 3.9% 4.4% 4.5% 4.7% 4.1% 4.9% 2.3% 2.7% 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16* 4Q16* 1Q17 2Q17 3Q17 Tuna Price Index 20.0% 18.0% 16.0% Gross Profit 14.0% 12.0% 10.0% 8.0% Net Income 6.0% 4.0% 2.0% 0.0% Remark: Operating margin = (COGS SG&A)/sales *The 3Q16 and 4Q16 figures were restated mainly due to reclassification of fishing fleet discontinued operations Page 19 Source: TU (Monthly tuna prices)

20 Rising tuna prices put pressure on operation 3,000 2,500 2,000 1Q16 1,257 2Q16 1,503 3Q16 1,433 4Q16 1,508 1Q17 1,633 2Q17 1,763 1,900 1,950 3Q17 2,010 1,980 2,100 2,300 1,500 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 1,170 1,000 1,000 %Growth QoQ %Growth YoY 500 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 % 19.6% -4.7% 5.2% 8.3% 8.0% 14.0% 13.9% 36.5% 0.2% 44.1% 30.0% 17.3% 40.2% Page 20

21 Focus on FX gain/ loss on Hedging accounting treatment TU has vast majority of sales being denominated in foreign currencies, such as USD, EUR and GBP; TU applies a strict policy in order to hedge these transactions and limit exposure to FX change. According to the Thai GAAP, the effects from this hedging on Operating transactions, where the hedge accounting according to IFRS is not applied, could not be presented in Sales/COGS line but in Other income line, below GP. Since beginning of the year, FX changed a lot, especially USD vs. THB, impacting downwards our GP whereas we recognized a huge FX gain related to operating below GP: the impact is estimated below: Estimated impact of hedging related to operating (THB mn) 1Q17 2Q17 3Q17 YTD GPM reported 13.8% 13.4% 13.2% 13.5% GPM restated (estimate) 14.0% 14.3% 14.1% 14.1% 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. Page 21

22 3Q17 A record quarterly sales Sales THB mn 35,050 33,715 31,427 34,818 35,185 3Q16* 4Q16* 1Q17 2Q17 3Q17 USD mn 1, ,015 1, , , ,000 80,000 60,000 40,000 20, , % YoY 121, , % QoQ 134, % YoY 100, ,430 3Q17 sales grew by 0.4% YoY to THB 35,185mn (up 4.3% YoY in dollar term to USD1,054mn), driven by: Ambient seafood business, while seeing product repricing, was facing difficult business environment from sluggish demand in Europe and European currencies depreciation against Thai Baht Chilled and frozen products saw marginal sales decline YoY inline with the margin shrimp price decreased (-3.3% YoY) over the same period PetCare business continued to show steadily growth in light of new product launches and an improved market penetration Weak sales growth in Thai Baht term was partly due to YoY Baht appreciation against US Dollar and GBP during 3Q17. 9M17 sales grew by 0.8% YoY to THB 101,430mn (up 4.0% YoY in dollar term to USD2,964mn) - YoY M16* 9M17 Growth 5.7% 7.6% 3.1% 7.3% USD mn 2,851 2,964 Page 22 Remark: *3Q16, 4Q16 and 9M16 figures were restated mainly due to reclassification of fishing fleet discontinued operations

23 As a reminder, we are growing consistently every quarter Despite the sales seasonality, TU continued to delivered YoY sales growth consistently 36,000 Total sales (THB mn) 34,000 32,000 30,000 28,000 26,000 24,000 22,000 20,000 %Sales Growth YoY 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16* 4Q16* 1Q17 2Q17 3Q Remark: Operating margin = (COGS SG&A)/sales Page 23*The 3Q16 and 4Q16 figures were restated mainly due to reclassification of fishing fleet discontinued operations

24 3Q17 resilient sales growth, slowed by the FX impact Revenue growth component (THB million) +0.4% YoY +0.8% YoY +1,420-1,233 35, % -52-1% % % -1% % % % -50-0% 35, , % +1,031 +4% % % +3% ,032-4% 101, % +9% -3% 2.3% YoY Before currency impacts 3.0% YoY Before currency impacts 3Q16 Tuna Shrimp & related business 1 Sardine & Mackerel Pet Care Value added & other products 2 Lobster Salmon USD EUR 3Q17 9M16 Tuna Lobster Salmon Pet USD EUR 9M17 effect effect Shrimp & related business 1 Sardine & Mackerel Care Value added & other products 2 effect effect Remark: 1 Shrimp & related business comprises of frozen shrimp and shrimp feed. 2 Page 24 Value-added & other products includes ready-to-eat products, frozen cephalopod, canned seafood, local products, bakery products, and sales of scraps

25 Growing branded sales mix amid foreign currency volatility Sales Breakdown by Geographic 100% Sales Breakdown by Business Private Label, 50% 80% 60% 40% 20% 0% 14% 13% 14% 13% 14% 8% 7% 6% 6% 6% 7% 7% 8% 8% 10% 30% 29% 29% 33% 32% 40% 44% 42% 39% 38% M **FS - Private Label, 8% THB 134,375mn Brand, 37% Private Label, 51% **FS - Brand, 4% 9M17 Brand, 37% Others* Japan Domestic Europe USA **FS - Brand, 6% **FS - Private Label, 6% THB 101,430mn 9M17 Sales contribution in key markets remained stable compared to 2016 sales mix by geography. However, the key changes were seen in the other key markets where TU has emphasize more on emerging and new market penetration US market sales contribution was at 38%, European market at 32%, Japan at 6% and Thailand at 10% are largely unchanged from M17 branded sales mix slightly increase to 43% (up from 41% during 2016) leaving the private label sales contributing the remaining 57% of 9M17 sales 9M17 total branded sales increased by 1.1% YoY, mainly due to the solid brand presence in European and US markets On the other hand, private label sales also show a marginal growth rate of 0.5% YoY, resulting in diluted sales contribution compared to 2016 Page 25 Remark: *Others represent Asia, Australia, Middle East, Canada, Africa and South America **FS stands for Food Service

26 Gross margin under pressure from high raw material prices 30.0% Gross Profit THB mn GPM 25,000 20,000 15,000 10,000 5,000-4, % 14, % YoY 4,531 4,330 19,020 19,501 19,927 15,396 GPM 12.6% 15.7% 15.6% 14.8% -0.2% QoQ 4,669 4, % 13.8% 13.4% 13.2% 3Q16* 4Q16* 1Q17 2Q17 3Q % YoY 13, M16* 9M17 YTD 15.3% 13.5% 28.0% 26.0% 24.0% 22.0% 20.0% 18.0% 16.0% 14.0% 12.0% 10.0% 3Q17 Gross profit of THB 4,658mn, stable QoQ, despite continued rising tuna raw material price (+14% QoQ to USD2,010/ton). On YoY basis, the gross profit was down 5.6% YoY, driven mostly by raw material prices volatility GBP depreciation 3Q17 margin was at 13.2%, down 85bps YoY. The margin remained under pressure due to: Rising tuna raw material prices (+40% 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 But the negative impact was partly offset by: 3Q17 European chilled smoked salmon business gross profit continued to be positive for the fourth consecutive quarter 9M17 gross profit was at THB 13,656mn, down 11.3% YoY, driven mainly by raw material price volatility Remark: *The 3Q16, 4Q16 and 9M16 figures were restated mainly due to reclassification of fishing fleet discontinued operations Page 26

27 Operating profit: Strong cost control continued 15.0% Operating Profit THB mn OP Margin 1, % 1, % -29.5% YoY % -18.9% QoQ 1, % 1, % 3Q16* 4Q16* 1Q17 2Q17 3Q17 9,000 SGA% 8.7% 9.8% 11.0% 8.7% 9.5% 8,000 7,000 6,000 5,000 4,000 3,988 6,990 6,785 6,805 5, % YoY 3, % 11.0% 9.0% 7.0% 5.0% 3.0% 1.0% 3Q17 Operating profit of THB 1,319mn, down 29.5% YoY, driven by rising raw material prices. Due to stringent cost control, 3Q17 normalized SG&A to sales ratio remained at a controlled level of 9.1%, well below the guidance of 10%. Note that the reported 9.5% ratio as reported in the financial statements also include one-time business restructuring expenses in Ghana facility and office relocation in the US. 9M17 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 3,000 2,000 1, M16* 9M17 OPM 3.5% 5.8% 5.4% 5.1% YTD 5.5% 3.8% Remark: *The 3Q16, 4Q16, and 9M16 figures were restated mainly due to reclassification of fishing fleet discontinued operations Page 27

28 Stable EBITDA supported by investments EBITDA THB mn EBITDA Margin 2, % 1, % +1.2% YoY 2,899 2,874 2, % +4.1% QoQ 8.3% 8.5% 28.0% 23.0% 18.0% 13.0% 8.0% Despite a weak operating profit, TU reported 3Q17 EBITDA of THB 2,990mn, up 1.2% YoY and 4.1% QoQ, driven mostly by strong income contribution from Red Lobster Investor and prudent FX management. 9M17 EBITDA was at THB 8,763mn, down 4.3% YoY 3Q16* 4Q16* 1Q17 2Q17 3Q17 3.0% 16,000 14,000 12,000 10,000 8,000 9,823 7,867 10,999 11,526 9, % YoY 8,763 6,000 4,000 2,000 EBITDA Margin M16* 9M17 9.2% 7.0% 9.1% 9.2% YTD 9.1% 8.6% Remark: *The 3Q16, 4Q16 and 9M16 figures were restated mainly due to reclassification of fishing fleet discontinued operations Page 28

29 Resilient net profit growth despite challenging environment Net Profit THB mn NPM 7,000 6,000 5,000 4,000 3,000 2,000 1, % % 1,469 1, % 4.1% 1, % 3Q16 4Q16 1Q17 2Q17 3Q17 2, % YoY 5,092 5,302 5, % QoQ +6.1% YoY 4,352 4, % 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Despite the challenging operating environment, 3Q17 net profit of THB 1,737mn, up 8.9% YoY and 23.1% QoQ The net profit improvement was driven by: Improved income contribution from a strategic investments from both Red Lobster and Avanti Feeds While Baht appreciation against key currencies put pressure on profit margin, such appreciation resulted in FX gains during the quarter. Lower tax expenses from a recognition of tax credit related to the Red Lobster investment Lower minority interest expenses from minority stake buyout of US business in 3Q16 9M17 net profit was THB4,617mn, up 6.1% YoY 1, M16 9M17 NPM 2.5% 4.2% 4.2% 3.9% YTD 4.3% 4.6% Page 29

30 Normalized net profit increased 15% YoY to THB 1,590mn Normalized Net Profit THB mn Norm NP Margin 1,737 1,384 1, % 4.2% 1, % 1,372 1, % 4.5% 3Q16 4Q16 1Q17 2Q17 3Q % YoY % QoQ -10 1, % 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Excluding the one-off quarter-end items, 3Q17 normalized net profit was at THB 1,590mn, representing 15% increase YoY One-off positive items during 3Q17 of THB 147mn comprised of: Expenses from relocating and consolidating US operating offices (-THB53mn), Expenses from Ghana business restructuring (-THB80mn), Insurance receipt from Ghana plant accident (+THB134mn), Red Lobster tax credit (+THB136mn), and Discontinued fishing fleet operation (+THB10mn), We finalized the disposal of the loss-making fishing fleet business in Aug Q17 Reported NP US office relocation Ghana business restructuring Insurance payment Red Lobster tax credit Fishing 3Q17 fleets DO Normalized NP Page 30 Remark: The normalized net profit still include the realized FX gains/losses from normal business operation

31 EPS: Keeps momentum despite operational headwinds EPS* THB % YoY % QoQ 3Q17 EPS was at THB 0.37, up 8.9% YoY and 23.1% QoQ, despite challenging operational headwinds Q16 4Q16 1Q17 2Q17 3Q % YoY M16 9M17 Page 31 Remark: *EPS in this slide represents fully diluted EPS based on current number of shares of 4,771,815,496

32 Red Lobster is 28% EPS accretive in 3Q17 THB mn 3Q17 2Q17 1Q17 4Q16 Lent Period Seasonality Christmas & NYE Share of profit Other Income Finance Costs Income Tax Net Income EPS (THB/share) EPS accretion % +20.3% +17.9% +6.7% Q1 Q2 Q3 Q4 Average Fluctuation RL s contribution during 3Q17 amounted to THB 380mn, mainly from tax savings and interest yield Red Lobster is a strong contributor to TU s 3Q17 profits, +28% net profit accretive and the highest of any quarter to date Page 32

33 3Q17 weak free cash flow amid rising raw material prices Quarterly Free Cash Flow THB mn , Q16 4Q16 1Q17 2Q17 3Q17 Despite rising raw material prices, 3Q17 Free cash flow (FCF) remain positive at THB 12mn, due mainly to positive contribution from recent investments and improved working capital management 9M17 free cash flow remain positive at THB 2.4bn Cash Conversion Rate 1 Annual Free Cash Flow THB mn 9,162 11,664 3,837 2, M17 Cash Conversion Rate 1 Page 33 Remark: 1 Cash Conversion Rate = FCF / EBIT; FCF= EBITDA-Changes in net working capital - CAPEX

34 Debt refinancing secured long-term funding Interest-bearing debts of THB 67,449mn By Currency By Maturity EUR 1.0% 1.2% USD 1.3% 0.9% Short-term Loan 56% 23% 2% 2018 THB 97.7% 97.9% Current Portion of Longterm Debt & finance lease Long-term Debt 5% 39% 2% 76% 42% onwards Q17 THB 65,918mn THB 67,449mn Q17 Long-term loan by maturity THB 50,794mn Page 34

35 3Q17: Debt profile affected by lower than planned EBITDA, NWC increase and Capex, commitment to strong dividend policy Unit: THB mn ND/E 1.37x Kd = 2.74% Operating Activities THB 5,492mn Free Cash Flow THB 2,384 mn Investing & Financing Activities ND/E 1.37x Kd = 3.21% +3, ,294 64,942-8,763 +3, , Net Debt as of 31 Dec 2016 EBITDA Change in net working capital Change in other assets and liabilities Tax payment Other non-cash expenses CAPEX Cash paid Net interests for NCI paid in subsidiaries Dividend paid Other Investing/ Financing activities* Net Debt as of 30 Sep 2017 Page 35 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

36 Improving Equity returns ROE % 8.4% 13.5% 12.8% 15.6% INV Days Debt to EBITDA Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 3Q16* 4Q16* 1Q17 2Q17 3Q17 ROCE % 5.8% 9.3% 8.1% 8.4% Net WC ND/E x 1.37x 1.34x 1.33x 1.37x 42,371 42,926 41,923 43,821 44,701 Page 36 3Q16* 4Q16* 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 WC (THB mn) WC Day Remark: 1 ROE = Annualized quarterly net profit/ Average total shareholders equity 2 ROCE = 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 3 Net WC day = INV day + A/R day A/P day 4 ND/E ratio = Net interest-bearing debt/ Total equity, Net interest-beating debt = Total interest-bearing debt - Cash & Cash equivalents including ST investment *The figures were restated mainly due to fishing fleets reclassification 3Q16 4Q16 1Q17 2Q17 3Q17

37 Agenda Key Highlights Recent Developments 3Q17 Financial Results TU s Consolidated Results Results by Business Unit Business Outlook Page 37

38 Key operating impact: Raw material prices continued to rise due to supply challenge Raw material prices Skipjack tuna raw material prices (USD/ton) 2,500 2,000 1,500 1, Jan-14 Jan-15 Jan-16 Jan-17 2,300 (Oct 17) In Oct, tuna price closed at USD 2,300/ton. In 3Q17, average price was at USD 2,010/ton (+40.2% YoY, +14.0% QoQ). White shrimp raw material prices (THB/kg. of 60 pcs./kg) Jan-14 Jan-15 Jan-16 Jan (Oct 17) In Oct, shrimp price closed at THB 175/kg. In 3Q17, average price was at THB 176/kg (-3.3% YoY, +4.5% QoQ) Salmon raw material prices (NOK/kg) x2 53 (Oct 17) In Oct, salmon price closed at NOK 53/kg. In 3Q17, average price was at NOK 57/kg (-7.4% YoY, -17.0% QoQ) 20 Jan-14 Jan-15 Jan-16 Jan-17 Page 38 Source: Thai Union Group and

39 Key operating impact: Exchange rate USD/THB Jan-14 Jan-15 Jan-16 Jan-17 EUR/THB Jan-14 Jan-15 Jan-16 Jan-17 GBP/THB Jan-14 Jan-15 Jan-16 Jan-17 Page (Oct 17) (Oct 17) (Oct 17) In Oct, USD/THB closed at In 3Q17, average USD/THB was at (-4.2% YoY, -2.7% QoQ) In Oct, EUR/THB closed at In 3Q17, average EUR/THB was at (+0.8% YoY, +3.9% QoQ) In Oct, GBP/THB closed at In 3Q17, average GBP/THB was at (-4.6% YoY, -0.4% QoQ)

40 Thai Union s global footprint Page 40

41 3 strategic business segments Total 9M17 sales: THB 101,430 mn Ambient seafood Sales: THB 46,276 mn Frozen, chilled seafood and related Sales: THB 41,628 mn PetCare, value added and others Sales: THB 13,526 mn Tuna business Shrimp & related business 1 PetCare Sardine & Mackerel Ambient & Pouch Salmon Frozen, chilled & smoked salmon Other seafood 2 Value-added business 3 Other products 4 Sales Split: 46% 41% 59% Brand Private label 41% 65% 35% Brand Private label 13% 91% 9% Brand Private label Page 41 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

42 Ambient Seafood Page 42

43 Ambient Seafood Business outlook stabilizing Sales (THB million) Quantity (Tons) +2.4% YoY -3.3% QoQ -0.3% YoY -3.1% QoQ 20, , , , , , , , , , , , , , , , , , , , ,461 13,852 14,069 16,371 15,836 57% 52% 59% 59% 59% 43% 48% 41% 41% 41% 3Q16* 4Q16 1Q17 2Q17 3Q17 Brand Private label 100, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,028 88,415 87,643 95,773 92,783 51% 45% 51% 49% 50% 49% 55% 49% 51% 50% 3Q16* 4Q16 1Q17 2Q17 3Q17 Brand Private label Gross Profit Margin (Percent) 21% 19% 20% 18% 19% 16% 14% 15% 16% 16% 9% 9% 11% 14% 7% 3Q16* 4Q16 1Q17 2Q17 3Q17 Brand Total Private label 3Q17 ambient seafood business sales were THB 15.8bn, up 2.4% YoY. While the average selling price increased by 2.7% to reflect rising tuna cost, the sales volume was under pressure due to the incorporated price hike 3Q17 Gross profit margin was at 15.6%, stable YoY, due to ability to eventually pass on high raw material prices during the year Continued rising tuna price to USD2,100/ton by September 2017 continue to put pressure on both branded and private label gross profit margin when compared to the normalized margin level Page 43 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

44 Frozen, chilled seafood and related Page 44

45 Frozen, chilled seafood and related Resilient business outlook Sales (THB million) Quantity (Tons) -2.4% YoY +4.9% YoY +5.9% QoQ +8.1% QoQ 20, , , , , , , , , , , , , , , , , , , , ,138 15,317 12,914 13,944 14,770 36% 32% 37% 36% 34% 64% 68% 63% 64% 66% 3Q16 4Q16 1Q17 2Q17 3Q17 Brand Private label 10, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,147 64,837 62,257 67,302 54,015 68% 67% 70% 72% 70% 32% 33% 30% 28% 30% 3Q16 4Q16 1Q17 2Q17 3Q17 Brand Private label Gross Profit Margin (Percent) 12% 11% 10% 10% 11% 11% 10% 10% 10% 8% 9% 9% 9% 8% 7% 3Q16 4Q16 1Q17 2Q17 3Q17 Brand Total Private label 3Q17 frozen and chilled seafood business sales were at THB 14.8bn, down 2.4% YoY. The marginal decline YoY was driven mainly by: 3Q17 Domestic shrimp price declined 3.3% YoY to THB176/kg due to improved domestic production Salmon raw material price also declined by 7.4% YoY from the peak in 3Q16 With European salmon business gross profit margin remained positive for four consecutive quarters in 3Q17 and stable margin profile for shrimp business, 3Q17 gross margin for the business remain stable at 9.8% (from 10.2% in 3Q16) Page 45

46 PetCare, value-added and others Page 46

47 PetCare, value-added and others PetCare delivering solid operational performance Sales (THB Million) Quantity (Tons) +2.9% YoY +1.7% QoQ +6.1% YoY +4.3% QoQ 6, , , , , , ,451 4,546 4,444 4,502 4,580 19% 10% 7% 12% 9% 81% 90% 93% 88% 91% Brand Private label 10, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,247 30,962 16% 15% 84% 85% 35,900 36,884 38,454 7% 10% 10% 93% 90% 90% Brand Private label 3Q16* 4Q16 1Q17 2Q17 3Q17 3Q16* 4Q16 1Q17 2Q17 3Q17 Gross Profit Margin (Percent) 26% 25% 22% 20% 16% Total 3Q17 PetCare and valued added segment sales were at THB 4,580mn, up 2.9% YoY and 1.7% QoQ, mainly thanks to continued growth in PetCare business 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. 3Q16* 4Q16 1Q17** 2Q17** 3Q17** Page 47 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

48 9M17 Segment Profitability New segment Sales (THB million) Margin (%) Gross Profit (THB million) Ambient seafood 46, % 7,197 *Tuna business *Sardine & Mackerel Gross Profit THB 13,656 million *Ambient & Pouch Salmon Frozen, chilled seafood and related 41, % 3,855 *Shrimp & related business 1 *Lobster *Frozen, chilled & smoked salmon *Other seafood 2 PetCare, value added and others 13, % 2,605 *PetCare *Value-added & others 3 *Other products 4 Total 101, % Page 48 Remark: 1 Shrimp & related business includes frozen shrimp, 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

49 Agenda Key Highlights Recent Developments 3Q17 Financial Results Business Outlook Page 49

50 Company outlook: What is key over the next months? Continued emphasis on Cost control Initiatives and structural cost reduction (Europe, US regional office, Shared Services) Focused productivity program to close gap in underperforming plants and manage Capex to drive unit cost reduction Achieve Cost-Price recovery in all commercial units Prioritize investments into growing businesses Emerging Markets, esp China Accelerate commercialization of Innovation Accelerate Foodservice initiative Speed up Marine Ingredients Deliver on three key hypothesis in Red Lobster investment Emphasize Cash Generation to drive de-leveraging Maintain full attention to SeaChange program Page 50

51 Page 51 Appendix

52 Share Capital Information Stock Information Major Shareholders Bloomberg/ Reuters TU TB/ TU.BK Share price (3 Nov 2017) : THB Historical price : 52-week high THB week low THB As of Chansiri Family 20.8% No. of paid up shares : 4,771.82mn Par value : THB 0.25 Market Capitalization : THB 85.4bn Others 50.7% Niruttinanon Family 6.8% THB 25 2,000 Mitsubishi Corporation 7.3% ,800 1,600 1,400 1,200 Social Security Office 6.1% Thai NVDR 8.3% 10 1, Free float : 65.9% Foreign ownership/ Foreign limit 32.2%/ 45.00% 5 TU SET Dividend Policy At least 50% of net profit Page 52 Source: SET and TU

53 3Q17 Income Statement Consolidated (Unit: THB mn) 3Q17 3Q17/ 3Q17/ % % % 3Q16** 2Q17 3Q16 3Q17 to sales to sales to sales Change Change Sales 35, % 35, % 34, % 0.4% 1.1% Cost of sales (30,528) -86.8% (30,113) -85.9% (30,149) -86.6% 1.4% 1.3% Gross profit 4, % 4, % 4, % -5.6% -0.2% SG&A expenses (3,339) -9.5% (3,066) -8.7% (3,042) -8.7% 8.9% 9.8% FX gain (loss) % (30) -0.1% % % 586.9% Other income* % % % 118.3% 34.9% EBIT 2, % 2, % 2, % 6.5% 5.1% Finance cost (547) -1.6% (392) -1.1% (563) -1.6% 39.5% -2.9% EBT 1, % 1, % 1, % -0.8% 7.9% Tax % (20) -0.1% (22) -0.1% % % Profit (Loss) from discontinued operarion % (3) 0.0% (80) 0.0% % % Net income 1, % 1, % 1, % 6.1% 15.5% Net income (loss) attributable to: Equity holders of the Company 1, % 1, % 1, % 8.9% 23.1% Non-controlling interests of the subsidiaries % % % -21.9% -37.9% Earnings per share Basic earnings per share % 27.6% Diluted earnings per share % 27.6% Exchange rate THB/USD % -2.7% Normalized net profit*** 1, % 1, % 1, % 14.9% 15.9% Page 53 Remark: *Including share of income from investment in associates **3Q16 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

54 9M17 Income Statement (Unit: THB mn) 9M17 % to sales 9M16** % to sales 9M17/ 9M16 Change Sales 101, % 100, % 0.8% Cost of sales (87,773) -86.5% (85,264) -84.7% 2.9% Gross profit 13, % 15, % -11.3% SG&A expenses (9,830) -9.7% (9,826) -9.8% 0.0% FX gain (loss) % % 240.4% Other income* 1, % 1, % 78.7% EBIT 6, % 6, % -3.3% Finance cost (1,607) -1.6% (1,067) -1.1% 50.7% EBT 5, % 5, % -13.0% Tax (132) -0.1% (863) -0.9% -84.8% Profit (Loss) from discontinued operarion (35) 0.0% (190) 0.0% 0.0% Net income 4, % 4, % 2.5% Net income (loss) attributable to: Equity holders of the Company 4, % 4, % 6.1% Non-controlling interests of the subsidiaries % % -30.2% Earnings per share Basic earnings per share % Diluted earnings per share % Exchange rate THB/USD % Normalized net profit*** 4, % 3, % 2.6% Page 54 Remark: *Including share of income from investment in associates **9M16 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

55 Statement of Financial Position as of 30 September 2017 (Unit: THB mn) 9M17 % to total assets 2016 % to total assets Change Cash and cash equivalents* 1, % % 12.5% Trade and other receivables - net 18, % 16, % 10.3% Inventories - net 42, % 39, % 6.4% Other current assets 2, % 3, % -34.2% Total current assets 63, % 60, % 5.5% Fixed assets 24, % 23, % 5.6% Goodwill and other intangible assets 31, % 29, % 5.0% Other non-current assets 28, % 29, % -3.4% Total Assets 147, % 142, % 3.6% Bank overdrafts and short-term loans 15, % 36, % -58.2% Trade and other payables 20, % 17, % 18.7% Current portion of long-term loans % % 26.8% Current portion of debentures - 0.0% 2, % % Current portion of finance lease liabilities % % -38.7% Other current liabilities % 1, % -45.6% Total current liabilities 37, % 59, % -35.9% Long-term loans from financial institutions 14, % % % Debentures 36, % 24, % 48.3% Finance lease liabilities - net of current portion % % -19.2% Other non-current liabilities 9, % 10, % -1.6% Total Liabilities 98, % 94, % 4.2% Non-controlling interests of the subsidiaries 4, % 4, % -3.7% Total Shareholders Equity 48, % 47, % 2.4% Total liabilities and shareholders equity 147, % 142, % 3.6% Page 55 Remark: *Including short-term investments

56 9M17 Statement of Cash Flow Consolidated (Unit: THB mn) 9M17 9M16 Change Profit before income tax 5,083 5,695 (611) Adjustments for depreciation & amortisation expenses 2,038 2,207 (169) Other adjustments (068) Changes in operating assets and liabilities (1,844) (475) (1,369) Cash flows receipts from operating activities 6,189 8,407 (2,218) Net cash receipts (payments) from operating activities 5,492 7,136 (1,643) Net cash payments for investing activities (2,636) (7,631) 4,994 Net cash receipts (payments) for financing activities (2,815) (797) (2,018) Net increase (decrease) in cash and cash equivalent 41 (1,292) 1,333 Cash and cash equivalents - opening balance 731 2,590 (1,859) Exchange gain (loss) on cash and cash equivalents 14 (24) 38 Cash and cash equivalents - closing balance 786 1,275 (488) CAPEX (3,877) (2,874) (1,003) Management Est. Free Cash Flows 2,384 4,262 (1,878) Page 56

57 Historical dividend payment Interim dividend for the period: 1 Jan 17 to 30 Jun 17 DPS THB 0.32 XD 18 August 2017 Book closing date 23 August 2017 Payment date 4 September 2017 THB/Share %50.4% 53.5% 50.6%50.7%50.0% % 56.7% 57.2% 53.3% 51.3% 50.5% % * H17 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 Hence, dividend per share has been revised retroactively to reflect the par change of THB Page 57

58 Thank you Corporate website: IR website: Tel: Page 58