1Q18 Results Presentation 8 May Page 1

Transcription

1 1Q18 Results Presentation 8 May 2018 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 assumptions are correct. Actual results may differ materially from those projected. Page 2

3 Agenda Key Highlights Recent Developments 1Q18 Financial Results Business Outlook Page 3

4 Agenda Key Highlights Recent Developments 1Q18 Financial Results Business Outlook Page 4

5 Despite the challenging environment, we are determined to sustain a cash flow generation and improve our operation profitability for Thai Union Group s shareholders. Thiraphong Chansiri President and Chief Executive Officer Page 5

6 1Q18: Strong Baht/high tuna cost accounted for weak profits 29,703 Sales -5.5% (THB mn) 3, GP NP YoY Chg % of sales -26.2% 11.3% 25 OP -97.1% 0.1% -39.3% 2.9% Declined sales. 1Q18 sales declined YoY driven partly by the Baht appreciation and declining tuna sales during the quarter. High raw material inventory costs. Gross profit margin remained under pressure at 11.3% resulted from a high raw material inventory price as tuna price declined rapidly during 1Q18. Strict cost control. Despite declined sales, stringent cost control caused TU to deliver 1Q18 SG&A to sales ratio at 11.2% (down from 11.8% in 1Q17). 1Q18 SG&A in Baht value declined 10.0% YoY. Operating profit declined on weak profitability, driven mainly by the high cost raw material inventory and strong Thai Baht appreciation. Net profit declined YoY. Despite a weak operating profits, the net profit was supported by strong other income, and prudent FX and tax management. Remark: Operating margin = (COGS SG&A)/sales Page 6

7 1Q18 Net profit of THB 869mn, Solid cashflow improve debt ratio Financial Summary 1 (THB million) 1Q18 Net Profit down 39.3% YoY to Total Sales 1Q18 1Q17 29,703 31, % THB 869 million Gross Profit 1Q18 1Q17 Q1 12 3,360 4, % Share price movement Operating Profit EBITDA Q1 11 1Q18 1Q17 1Q18 1Q , % 2, % Cash generation THB 1.4bn (Jan- Dec 17 ) -5.7% (Jan- May 7,18 ) -13.0% Strong cash flow improved debt ratio Net Profit 1Q18 1Q , % 2017 ND/E 1.38x 1Q18 ND/E 1.35x Source: 1 TU; 2 SET (Jan 4 17: THB21.1/share and Dec 29 17: THB19.9/share, Jan 3 18: THB20.7/share and May 7 18: THB18.0/share) Page 7

8 1Q18: High priced inventory hurt operation performance Total sales (THB mn) GPM NPM 60,000 50,000 40,000 30,000 20,000 10, % 15.9% 14.1% 13.4% 31,210 34,401 35,050 33, % 4.4% 4.5% 2.7% 14.5% 31, % 13.4% 13.2% 12.1% 34,818 35,185 35, % 4.9% 4.1% 11.3% 29, % 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% - % Growth YoY 1Q16 2Q16 3Q16 4Q16 1Q17* 2Q17 3Q17 4Q17* 1Q18 0.0% Sales Gross profit Net profit Page 8 Remark: Operating margin = (COGS SG&A)/sales *The 1Q17 and 4Q17 figures were restated mainly due to COGS reclassification

9 Agenda Key Highlights Recent Developments 1Q18 Financial Results Business Outlook Page 9

10 Recent developments Sustainability: Innovation: Mar 2018: Yellowfin Tuna Slices, the newest seafood innovation from Thai Union s Global Innovation Incubator (Gii), has recently received the 2018 Seafood Excellence Award in the Best New Foodservice Product category at Boston s Seafood Expo. Mar 2018: Thai Union has joined forces with the Global Ghost Gear Initiative (GGGI) in a drive to reduce the growing problem of abandoned, lost and discarded fishing gear (ALDFG) worldwide. New Product: Feb 2018: Nestlé S.A. and Thai Union Group officially inaugurated a demonstration boat to promote and raise understanding of human and labour rights of workers in the Thai fishing industry. Sealect Quick Meal, available now at Tesco Lotus and Tops market Page 10

11 Recent developments Awards Recognitions: Apr 2018: Strong recognition from Asian investment community, FinanceAsia s Best Companies 2018 Thai Union has recently awarded in FinanceAsia s Thailand Best Companies 2018 for various categories: #1 Most committed to corporate governance #1 Best at corporate social responsibility #2 Best CEO #2 Best CFO #2 Best at investor relations #2 Best managed companies z Mar 2018: Notification of the acquisition of 10.00% of T-Holding Co., Ltd., which is 90% Thai Union Group's subsidiary from connected persons. Others: Apr 2018: The increase of shareholding proportion by buying of 28.46% newly issued ordinary shares of Thai Union Feedmill Co., Ltd., which is Thai Union Group s subsidiary, resulting in 66.9% of total paid-up shares Mar 2018: Prime Minister Prayut Chan-o-cha and his cabinet members visited one of Thai Union Group manufacturing plants in Samut Sakhon s Muang district, during the mobile cabinet meeting in Samut Sakhon and Petchburi Page 11

12 Joining the leading Russian seafood enterprise #1 May 2018: Thai Union has continued its focus on expansion with an agreement to acquire 45 percent of TUMD Luxembourg S.a.r.l (TUMD). TUMD wholly owns three Russian companies, collectively known as the DPR Group (DPR). DPR is a retail focused fish and seafood business, and it is Russia s number one canned tuna producer. DPR, which has sales of around US$45m, operates in both frozen and ambient segments, and owns brands such as Maguro, Captain of Tastes and Rybar. 45% 51% 80% Optional to increase Optional to increase 2018 Equity Stake Within 3 years Page 12

13 Agenda Key Highlights Recent Developments 1Q18 Financial Results TU s Consolidated Results Results by Business Unit Business Outlook Page 13

14 Rough sea standing fast Keep going. Joerg Ayrle Group Chief Financial Officer Page 14

15 The key take away for 1Q18 results Top line challenged Record low GPM Continued cost control Non-operating items support net profit Sales at THB 29.7bn and reported growth at -5.5%, mainly from Thai and US operations At constant exchange rates, sales would have decreased by 2.8% vs. LY, while the volume sales seen a small decline of 1.6% YoY Weak GP margin at 11.3% All segments face with GPM dilution with except to S&M Tuna and Frozen business are the two most challenging segments in terms of profitability. PetCare margin under pressure Prudent cost control prompts 11.2% 1Q18 SG&A to sales ratio, despite declined revenue Thai Baht strength increasing our cost base approx. USD16mn in 1Q18 FX management policy posted good FX gains of THB 581mn in 1Q18 Tax savings mainly explained by lower operating performance Stronger contribution from Red Lobster 1Q18 continue to deliver THB 137m positive share of profit Strong positive impacts from interest yield and tax savings Page 15

16 Tuna prices are increasingly volatile (USD/ton) 2,800 2,300 1,800 1Q17 1,633 1,700 1,700 2Q17 1,763 1,690 1,700 1,900 1,950 3Q17 2,010 1,980 2,100 2,300 4Q17 2,033 2,000 1, % 1Q18 1,577 1,700 1,800 1,500 1,550 1,480 1, %Change QoQ %Change YoY Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun % 8.0% 14.0% 1.2% -22.5% 30.0% 17.3% 40.2% 34.8% -3.5% Page 16

17 1Q18 Sales under pressure Sales THB mn USD mn 140, , ,000 80,000 60,000 40,000 31,427 34,818 35,185 35,105 29,703 1Q17 2Q17 3Q17 4Q17 1Q ,015 1,054 1, , , % YoY 134, , % QoQ (-5.5% YoY) 31,427 29,703 1Q18 sales declined by 5.5% YoY to THB 29,703mn. Excluding the impact of Thai Baht appreciation, sales would also declined by 2.8% YoY, driven by: Ambient seafood sales saw decline from weak volume sales as tuna price declined sharply during early 1Q18, resulting in declining selling price for OEM tuna business. For US subsidiary, while sales in USD were almost stable YoY, the sales denominated in THB are decreasing by 10% in value due to USD depreciation vs. BHT for the same percentage. Frozen and chilled seafood export sales affected by shrimp price decline by 14% YoY. The US shrimp and lobster sales are also affected by both USD depreciation and decline sales volume 20,000 Page 17 - YoY * 1Q17 1Q18 Growth 7.6% 3.1% 7.3% 1.6% USD mn 4,

18 1Q18 weak sales growth, compounded by FX impact Revenue growth component (THB million) -5.5% YoY 31, % % +13% +20% -4% -2.8% YoY Before currency impacts % % -8% +10% -14% -1, % +4% 29,703 1Q17 Tuna Sardine & Mackerel Salmon- Ambient Other seafood - Ambient Shrimp & related business 1 Lobster Salmon- Frozen Other seafood - Frozen Pet Care Value added & other products 2 USD effect EUR effect 1Q18 Remark: 1 Shrimp & related business comprises of frozen shrimp and shrimp feed. 2 Page 18 Value-added & other products includes ready-to-eat products, frozen cephalopod, canned seafood, local products, bakery products, and sales of scraps

19 Strong growth in Thailand Sales Breakdown by Geographic 100% 80% 60% 40% 20% Sales Breakdown by Business Private Label, 53% 0% 13% 14% 13% 15% 13% 7% 6% 6% 6% 5% 7% 8% 8% 10% 12% 29% 29% 33% 32% 32% 44% 42% 39% 38% 39% Q **FS - Private Label, 6% THB 136,535mn Brand, 36% Private Label, 54% **FS - Brand, 6% 1Q18 **FS - Private Label, 5% THB 29,703mn Brand, 35% Others* Japan Domestic Europe USA **FS - Brand, 6% 1Q18 Sales contribution in key markets marginally shifted in favor of domestic Thai market, due partly to the company was focusing more on selling product in domestic market to offset weaker export sales as a result of intense competition, TU continue to grow its new product initiatives into Thai market US market sales contribution was at 39%, European market at 32% and Japan at 5%. 1Q18 branded sales mix slightly decrease to 41% (down from 42% during 2017) leaving the private label sales contributing the remaining 59% of 1Q18 sales 1Q18 total branded sales decreased by 7.8% YoY, mainly due to the USD depreciation resulted in weaker sales contribution from US branded sales Private label sales also declined by 3.8% YoY due to both volume sales decline and translation impact. Page 19 Remark: *Others represent Asia, Australia, Middle East, Canada, Africa and South America **FS stands for Food Service

20 Emerging markets: Thailand and other EMs (China and ME) Thailand sales THB mn 2,549 2, % YoY 4,317 3,342 3,439 1Q17 2Q17 3Q17 4Q17 1Q18 Asia sales (ex Thailand, Japan, but including China) THB mn +40.8% YoY We are focusing on the market where we have less presence in the past, and now we can deliver strong growth in these emerging markets. 1Q18 Thailand sales was at THB 3.5bn, up by 34.9% YoY. TU continue to grow its new product initiatives into Thai market such as new tuna meal product under brand Sealect, the frozen seafood brand Qfresh and shrimp snack Monori 1Q18 Asia sales, ex-thailand and Japan, was at THB 1.8bn, up 40.8% YoY, driven by new market growth initiatives in China and the Middle East. 1,274 1,737 1,686 2,111 1,795 1Q17 2Q17 3Q17 4Q17 1Q18 Page 20

21 Some of our core businesses are suffering USD mn % Chicken of the Sea Sales 3,800 3,600 3,400 3,200 3,000 2,800 Sales (USDmm, LHS) Sales (THBmn, RHS) Profitability profile THB mn Thai Baht revenue underperformed USD revenue since 2Q17 due to strong Thai Baht appreciation against US dollar Gross profit margin is weakened, due mainly to high priced inventory and increased sales of lower-margin commodity products. Competition is increasing in the slowing market environment. Retailer customers negotiation very difficult with little ability to pass on raw material prices. Overall profit level of US ambient business is limited DOJ civil complains related legal fees further depress profitability around USD5mn run-rate. 10.0% 0.0% -10.0% Page 21 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 GPM (%) OPM (%)

22 Weak gross margin from high raw material inventory prices 30.0% Gross Profit THB mn GPM 25,000 20,000 15,000 4,551 4,669 4, % -26.2% YoY 13.4% 13.2% 19,020 19,501 19, QoQ 4, % 18,141 3, % 1Q17* 2Q17 3Q17 4Q17* 1Q % 26.0% 24.0% 22.0% 20.0% 18.0% 16.0% 14.0% 12.0% 10.0% 1Q18 Gross profit of THB 3,360mn, down 26.2% YoY, mainly due to abrupt decline in raw material prices and high priced inventory. The gross profit was also affected by strong Baht appreciation (10.2% YoY and 4.3% QoQ) against USD. 1Q18 margin was at 11.3%, down 317bps YoY. The margin remained under pressure due to: A sharp decline in tuna raw material prices (-22.5% QoQ, -3.5% YoY) affect gross margin of tuna business, due to high price inventory, US tuna business gross margin was under pressure amid USD depreciation, rising tuna raw material prices and shifting of sales mix in favor of lower margin commodity products THB currency appreciated against USD YoY 10,000 5, % YoY 4,551 3, Q17 1Q18 GPM % 14.8% 13.3% 14.5% 11.3% Remark: *The 1Q17 and 4Q17 figures were restated mainly due to COGS reclassification Page 22

23 Baht strength to Dollar caused us around THB 500mn in 1Q18 Thai entities COGS related to exports USD mn Q17 (USDmn, Equivalent) Currency movement, 1Q18 change YoY Local currency per USD (per USD) Thailand THB/USD Vietnam VND/USD 16 1Q18 (USDmn) Indonesia IDR/USD China CNY/USD 1Q18 average Thai Baht has appreciated against US dollar by 10.2%, which shown relatively more depreciation compared to the key competing countries like Vietnam and Indonesia, where their currencies appreciated 1.6% and depreciated 1.5% against US Dollar, respectively. Thai Baht appreciation against US dollar significantly outperform other exporting countries, resulting in lower competitiveness of Thai exporters. Due to a strong Thai Baht currency appreciation of 10.2%, the company estimated that there are approximately THB 500mn of Thai entity s expenses that incurred as a result of such currency appreciation and that cannot be passed on directly to our customers. 1Q ,901 13, Q ,529 13, Appreciation/ (Depreciation) % YoY 10.2% 1.6% -1.5% 7.5% Page 23

24 Operating profit: Strong cost control continued 20.0% Operating Profit THB mn OP Margin % 1, % -97.1% YoY 1, % -97.3% QoQ % 1Q17 2Q17 3Q17 4Q17 1Q18 10,000 SG&A% 11.8% 8.7% 9.5% 9.5% 11.2% 9, % 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.1% 0.0% Despite a strong cost control, 1Q18 Operating profit was at THB 25mn, driven by weak profitability from rising raw material prices. Adjusted for FX impact, Operating profits should remain at THB 432mn, down 67% YoY. While revenue in Thai Baht term has shown a decline of 5.5% YoY, 1Q18 normalized SG&A to sales ratio remained at a controlled level of 11.2%, improved from 11.8% during 1Q17. In absolute term, SG&A expenses declined by 10.0% YoY to THB 3,335mn. 8,000 7,000 6,990 6,785 6,805 6,000 5,000 4,711 4,000 3,000 2,000 1, % YoY Q17 1Q18 OPM 3.5% 5.8% 5.4% 3.5% 2.7% 0.1% Remark: *Base on the assumption that 70% of FX in particular period are realized Page 24

25 Change in accounting policy and presentation The effects of change in accounting policy and reclassification as at 31 December 2017 are disclosed as follows: The Group has changed the accounting policy regarding the As previously reported Adjustment (Million Restated (Million recognition expenditures, of which certain were (Million Baht) Baht) Baht) included in inventory cost by recognizing such certain Balance sheet as at 31 December 2017 expenditures directly in profit or loss in order for the operating Inventories, net 43,360 (176) 43,184 results to reflect the current Retained earnings as at 1 January ,528 (144) 26,384 business operation of the Group. Retained earnings as at December ,221 (176) 29,045 1Q17 Profit & Loss Cost of sales (27,097) 221 (26,876) Selling expenses (1,531) (115) (1,650) Administrative expenses (1,914) (144) (2,056) Profit for the period Owners of the parent 1,469 (36) 1,432 The Group has changed the presentation of certain expenditures between cost of sales, selling expenses and administrative expenses in the consolidated statement of income. These changes have been applied retrospectively and the effects of these changes are disclosed hereafter. Page 25

26 EBITDA supported by FX management and Equity Income EBITDA THB mn -24.6% YoY 2,863 2,874 2, % QoQ 2,640 2, % 23.0% 18.0% 13.0% Despite a weak operating profit, TU reported 1Q18 EBITDA of THB 2,159mn. The increase was driven mostly by prudent FX management and income contribution from associates, mainly Red Lobster and Avanti Feeds. EBITDA Margin 9.1% 8.3% 8.5% 7.5% 7.3% 8.0% 1Q17* 2Q17 3Q17 4Q17* 1Q18 3.0% 16,000 14,000 12,000 10,999 11,526 11,269 11,366 10,000 8,000 6,000 4,000 2,000 2, % YoY 2,159 EBITDA Margin Q17* 1Q18 9.1% 9.2% 8.4% 8.3% Remark: *The 1Q17 and 4Q17 figures were restated mainly due to COGS reclassification Page 26

27 1Q18 net profit supported by non-operating items Net Profit THB mn NPM 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 1,432 1, % 4.1% -39.3% YoY 1, % 1, % -39.7% QoQ % 1Q17* 2Q17 3Q17 4Q17* 1Q18 5,092 5,302 5,254 6,021 1, % YoY % 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Despite a very challenging operating environment, TU reported 1Q18 net profit of THB 869mn, supported The net profit was supported by: Increased other income by 12% YoY, Baht appreciation against US dollar put pressure on profit margin, but resulted in THB 581mn FX gains during the quarter, Associated companies continued to deliver solid contribution of THB 301mn, up 13.1% YoY, Prudent tax management and lower tax rate resulted in lower tax charges during 1Q18. Red Lobster investment continue to deliver solid contribution despite fewer guest counts and weather issue in the US. Interest income and prudent tax management support the return from this investment Q17* 1Q18 NPM 4.2% 4.2% 3.9% 4.4% Remark: *The 1Q17 and 4Q17 figures were restated mainly due to COGS reclassification Page 27

28 Normalized net profit was at THB690mn Normalized Net Profit THB mn Norm NP Margin 1,069 1, % YoY 1,590 1, % 3.9% 4.5% 3.9% -49.8% QoQ % 20.0% 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% Excluding the one-off quarter-end items, 1Q18 normalized net profit was at THB 690mn, representing 35.5% decline YoY One-off positive items during 1Q18 of THB 179mn comprised of: Capital gain on sales of assets (+THB 140mn) Tax credit from European ambient business (+THB 39mn) 1Q17 2Q17 3Q17 4Q17 1Q18 0.0% Q18 Reported NP Capital gain on sales of asset Rugen Fisch Tax credit 1Q18 Normalized NP Page 28 Remark: The normalized net profit still include the realized FX gains/losses from normal business operation

29 EPS: Facing operational headwinds EPS* THB % YoY % QoQ 1Q18 EPS was at THB Challenging operational headwinds was offset by supports from non-operating items Q17 2Q17 3Q17 4Q17 1Q % YoY Q17 1Q18 Page 29 Remark: *EPS in this slide represents fully diluted EPS based on current number of shares of 4,771,815,496

30 1Q18: First quarter remains seasonally strong Red Lobster has contributed THB 266mn to the net profits THB mn Share of profit Other Income Finance Costs Income Tax Net Income 1Q18 4Q17 3Q17 2Q17 1Q Red Lobster is a strong contributor to TU s 1Q18 profits, adding THB 266mn to TU s net profits or was 44.1% net profit accretive The restaurant report a slight decline in SRS, but still deliver a seasonally strong 1Q18 EBITDA. My Red Lobster Rewards membership loyalty program grow faster than projected. Off-premise sales continue to grow YoY, now with over 470k active users. RL will be reducing restaurant cost and collaborating with TU to improve supply collaboration. EPS (THB/share) Page 30

31 1Q18 Strong cashflow despite weak profitability Quarterly Free Cash Flow THB mn 1,049 1, ,369 1Q17 2Q17 3Q17 4Q17 1Q18 Despite rising raw material prices, 2017 Free cash flow (FCF) remain positive at THB 1,369mn, due mainly to profitable operation, destocking of high-priced inventory and prudent capex spending Strong cash focused with continued deleveraging balance sheet trend Cash Conversion Rate 1 Annual Free Cash Flow THB mn 5,544 2,938 1, Q18 Cash Conversion Rate 1 Page 31 Remark: Change definition of Free Cash Flow; 1 Cash Conversion Rate = FCF / EBIT; FCF= EBITDA-Changes in net working capital Change in other assets& Liabilities + non-cash expenses - CAPEX

32 Majority THB funding, reducing risk associated to currency volatility Interest-bearing debts of THB 65,715mn By Currency By Maturity EUR USD THB 1.0% 1.7% 0.9% 98.1% 98.3% Short-term Loan Current Portion of Longterm Debt & finance lease Long-term Debt 23% 2% 76% 23% 2% 2% 2% 76% 76% 42% onwards Q18 THB 67,449mn THB 65,715mn Q18 Long-term loan by maturity THB 47,518 mn Page 32

33 1Q18: Strong cashflow generation prompted debt repayment Unit: THB mn ND/E 1.38x Kd = 3.21% Free Cash Flow** THB 1,369 mn Income tax paid and other investing & financing activities ND/E 1.35x Kd = 3.04% 66,419 +1, ,173-2, ,159 Net Debt as of 31 Dec 2017 EBITDA Change in net working capital Change in other assets and liabilities Other noncash expenses CAPEX Tax payments Net interest paid Dividends paid Other Investing & Financing activities* Net Debt as of 31 Mar 2018 Page 33 Remark: *Included 1) change in loans to associates & other companies 2) change in investments in associates and other long-term investments 3) proceeds from sale of assets 4) dividend received and 5) change in non-controlling interest **New definition of free cash flow, excluding income tax paid

34 Improving D/E ratios; NWC turnover affected by lower revenue ROE % 12.8% 15.6% 13.0% 7.8% INV Days Debt to EBITDA ,130 40,418 42,155 43,184 40,691 1Q17 2Q17 3Q17 4Q17 1Q18 1Q17 2Q17 3Q17 4Q17 1Q18 1Q17 2Q17 3Q17 4Q17 1Q18 INV (THB mn) INV Day ROCE 2 9.1% 8.1% 8.4% 7.0% 6.1% Net WC ND/E x 1.33x 1.37x 1.38x 1.35x 41,923 43,821 44,701 43,744 41,665 Page 34 1Q17 2Q17 3Q17 4Q17 1Q18 1Q17 2Q17 3Q17 4Q17 1Q18 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 1Q17 2Q17 3Q17 4Q17 1Q18

35 US Civil case progress and settlement Tri-Union Seafoods LLC (Tri-Union) and Thai Union Group continue to fully support DOJ s and their investigation and still maintained conditional leniency with respect to the Investigation under the DOJ s Corporate Leniency Program. Provided we continue to fully cooperate with the DOJ, neither Tri-Union nor any cooperating executives or employees within the scope of the Investigation will face criminal fines, jail time, or prosecution. The civil cases are continuing. Plaintiffs have filed comparable lawsuits, which have been combined with the original complaint into a single class action lawsuit. The plaintiff alleges that Tri-Union violated U.S. antitrust laws, specifically Sections 1 and 3 of the Sherman Antitrust Act. Tri-Union is presently unable to predict the probable outcome of these matters. Nevertheless, Tri-Union is in discussions with some of its larger customers to discuss their complaints and expects that selected resolutions by way of settlement could be reached within this year. Page 35

36 Agenda Key Highlights Recent Developments 1Q18 Financial Results TU s Consolidated Results Results by Business Unit Business Outlook Page 36

37 Key operating impact: Key raw material prices declined YoY Raw material prices Declining, but picking up over last month Tuna price at USD 1,800/ton in April Q18 average price was USD 1,577/ton (-3.5% YoY, -22.5% QoQ) Shrimp price at THB 160/kg in April Q18 average price was THB 183/kg (-14.0% YoY, +4.2% QoQ) Decreasing compared to last year, but clearly on upward trend over last 3 months Salmon price at NOK 71/kg in April Q18, average price was NOK 62/kg (-8.6% YoY, +21.8% QoQ) Page 37 Source: Thai Union Group and

38 Key operating impact: Exchange rate USD/THB EUR/THB Continue depreciation from 2017 Brexit vote USD/THB closed at in April In 1Q18, average USD/THB was at (-10.2% YoY, -4.3% QoQ) Almost stable since Brexit vote EUR/THB closed at in April In 1Q18, average EUR/THB was at (+3.3% YoY, -0.4% QoQ) GBP/THB closed at in April In 1Q18, average GBP/THB was at (+1.0% YoY, +0.4% QoQ) Page 38

39 Thai Union s global footprint Page 39

40 3 strategic business segments Total 1Q18 sales: THB 29,703 mn Ambient seafood Sales: THB 14,100 mn Frozen, chilled seafood and related Sales: THB 11,522 mn PetCare, value added and others Sales: THB 4,080 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: 47% 42% 58% Brand Private label 39% 33% 67% Brand Private label 14% 91% 9% Brand Private label Page 40 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

41 Ambient Seafood Challenging operating environment Sales (THB million) Quantity (Tons) -1.7% YoY -6.2% YoY -7.5% QoQ -7.6% QoQ 20, , , , , , , , , , , , , , , , , , , , ,348 16,631 16,111 15,250 14,100 59% 59% 59% 52% 58% 41% 41% 41% 48% 42% 1Q17 2Q17 3Q17 4Q17 1Q18 Brand Private label 100, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,822 96,849 93,883 90,158 83,314 52% 49% 50% 44% 51% 48% 51% 50% 56% 49% 1Q17 2Q17 3Q17 4Q17 1Q18 Brand Private label Gross Profit Margin (Percent) 21% 18% 19% 18% 17% 17% 17% 15% 17% 17% 17% 11% 14% 14% 13% 1Q17 2Q17 3Q17 4Q17 1Q18 Brand Total Private label 1Q18 ambient seafood business sales were THB 14.1bn, down 1.7% YoY. While the volume sales declined 6.2%, the smaller sales decline was largely attributable selling price adjustment. 1Q18 Gross profit margin was at 14.0%, down 378bps YoY, driven by: A sharp decline in tuna raw material prices (-22.5% QoQ) affect gross margin of tuna business, due to high price inventory, US tuna business gross margin was under pressure amid USD depreciation, rising tuna raw material prices and shifting of sales mix in favour of lower margin commodity products Page 41

42 Frozen, chilled seafood and related Currency appreciation hurt competency Sales (THB million) Quantity (Tons) -8.8% YoY +1.7% YoY -24.7% QoQ -14.8% QoQ 20, , , , , , , , , , , , , , , , , , , , ,635 13,685 14,494 15,307 36% 35% 33% 34% 64% 65% 67% 66% 11,522 33% 67% Brand Private label 10, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,834 61,185 66,203 63,045 53,739 70% 72% 70% 68% 69% 30% 28% 30% 32% 31% Brand Private label 1Q17 2Q17 3Q17 4Q17 1Q18 1Q17 2Q17 3Q17 4Q17 1Q18 Gross Profit Margin (Percent) 11% 10% 10% 9% 9% 10% 9% 8% 9% 8% 9% 9% 6% 7% 6% 1Q17 2Q17 3Q17 4Q17 1Q18 Brand Total Private label 1Q18 frozen and chilled seafood business sales were at THB 11.5bn, down 8.8% YoY, driven mainly by Baht appreciation against US dollar (-10.2% YoY) and falling shrimp price (-14% YoY), despite increasing sales volume. Gross profit margin was at 6.4%, down 153bps YoY, driven by a strong Baht appreciation and intense competition from competing countries US frozen business is facing operating headwind from its crab meat and lobster business due partly to currency devaluation. Page 42

43 PetCare, value-added and others PetCare profitability under pressure Sales (THB Million) Quantity (Tons) -8.2% YoY -10.3% QoQ +4.8% YoY -5.6% QoQ 6, , , , , , ,444 4,502 4,580 4,548 4,081 7% 12% 9% 8% 8% 93% 88% 91% 92% 92% Brand Private label 10, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,900 36,884 38,454 39,862 37,638 7% 10% 10% 11% 10% 93% 90% 90% 89% 90% Brand Private label 1Q17 2Q17 3Q17 4Q17 1Q18 1Q17 2Q17 3Q17 4Q17 1Q18 Gross Profit Margin (Percent) 23% 20% 16% 18% 16% Total 1Q18 PetCare and valued added segment sales were at THB 4,081mn, down 8.2% YoY with the sales from the value-added business declining. Pet food is seeing a marginal decline in sales due to product price adjustment to reflect recent decline in tuna raw material prices. Gross margin has declined from last year, mainly driven by the PetCare business profit margin was under pressure due to high tuna raw material inventory price. 1Q17 2Q17 3Q17 4Q17 1Q18 Page 43

44 Global Presence 40% U.S. And Canada 32% Europe 12% Thailand 16% Others Page 44

45 US & Canada: Weakened Thai Baht sales driven by currency Sales:THB -10.4% YoY 20, % QoQ 18,000 16,000 14,000 12,000 13,190 13,467 13,753 14,054 11,821 10,000 8,000 6,000 4,000 2,000-1Q17 2Q17 3Q17 4Q17 1Q18 1Q18 US and Canada sales was at THB11.8bn, down by 10.4% YoY. While sales in US dollar term remain relatively stable, most of the sales decline was due to Baht appreciation against US dollar. Chicken of the Seas reported negative margin product mix in favor of lower margin products and price negotiation is yet to take effect. Frozen business is facing challenges from disintermediation from customers Red Lobster record strong profit contribution Page 45

46 Europe: Showing some bright spots Sales:THB -3.4% YoY % QoQ ,758 11,949 11,183 10,295 9, Q17 2Q17 3Q17 4Q17 1Q18 1Q18 European sales was at THB 9.4bn, down by 3.4% YoY. While the volume sales has shown some decline, TU s European businesses has demonstrated the ability to gradually repriced its product. However, with the high cost inventory, profit margin remain under pressured. European salmon business and Rugen Fisch continue to deliver operational improvement. Page 46

47 Thailand: Focusing inward Sales:THB % YoY % QoQ ,549 2,803 4,317 3,342 3, Q17 2Q17 3Q17 4Q17 1Q18 1Q18 Thailand sales was at THB 3.4bn, up by 34.9% YoY. Thai Union is focusing more on selling product in domestic market to offset weaker export sales as a result of intense competition, TU continue to grow its new product initiatives into Thai market such as new tuna meal product under brand Sealect, the frozen seafood brand Qfresh and shrimp snack Monori Page 47 Remark: *4Q16 figures were restated mainly due to reclassification of fishing fleet discontinued operations

48 EM and Rest of the world: New market penetration Sales:THB -15.4% YoY % QoQ ,931 6,598 5,932 7,414 5, Q17 2Q17 3Q17 4Q17 1Q Emerging markets sales of THB 5.0bn, down 15.4% YoY. The weakness was driven mainly by lower sales to Japan. However, the initiatives to sell frozen products into China through both own brand King Oscar and business partnership with Alibaba still deliver good growth, albeit from low base. Page 48 Remark: *4Q16 figures were restated mainly due to reclassification of fishing fleet discontinued operations

49 1Q18 Segment Profitability New segment Sales (THB million) Margin (%) Gross Profit (THB million) Ambient seafood 14, % 1,970 *Tuna business *Sardine & Mackerel Gross Profit THB 3,360 million *Ambient & Pouch Salmon Frozen, chilled seafood and related 11, % 737 *Shrimp & related business 1 *Lobster *Frozen, chilled & smoked salmon *Other seafood 2 PetCare, value added and others 4, % 654 *PetCare *Value-added & others 3 *Other products 4 Total 29, % Page 49 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

50 Agenda Key Highlights Recent Developments 1Q18 Financial Results Business Outlook Page 50

51 Business Outlook: There are moderate positive signals in 2018 Price increases were negotiated successfully for our Branded business in Europe and in the US and will become effective starting Q218 Spot prices and average inventory cost more balanced Positive outlook on shrimp cost and improving market dynamics in US Product innovations and Marine Ingredient business will go live this year Continued cost management focus, new cost program of -1bn THB initiated Strong cash focus with continued deleveraging balance sheet trend Page 51

52 Page 52 Appendix

53 Share Capital Information Stock Information Major Shareholders Bloomberg/ Reuters TU TB/ TU.BK Share price (4 May 2018) : THB Historical price : 52-week high THB week low THB No. of paid up shares : 4,771.8mn Par value : THB 0.25 Market Capitalization : THB 87.3bn As of 30 March 2018 Others 51.2% Chansiri Family 20.4% Niruttinanon Family 7.2% THB 25 2,000 Mitsubishi Corporation 7.3% ,800 1,600 1,400 1,200 Social Security Office 7.1% Thai NVDR 6.9% 10 5 TU SET , Free float : 67.4% Foreign ownership/ Foreign limit 33.2%/ 45.00% Dividend Policy At least 50% of net profit Page 53 Source: SET and TU

54 1Q18 Income Statement Consolidated (Unit: THB mn) 1Q18 1Q18/ 1Q18/ % % % 1Q17* 4Q17* 1Q17 4Q17 to sales to sales to sales Change Change Sales 29, % 31, % 35, % -5.5% -15.4% Cost of sales (26,343) -88.7% (26,876) -85.5% (30,842) -87.9% -2.0% -14.6% Gross profit 3, % 4, % 4, % -26.2% -21.2% SG&A expenses (3,335) -11.2% (3,706) -11.8% (3,341) -9.5% -10.0% -0.2% FX gain (loss) % % % -1.5% 65.3% Other income* % % % 12.5% 31.1% EBIT 1, % 2, % 1, % -33.6% -24.4% Finance cost (505) -1.7% (498) -1.6% (533) -1.5% 1.5% -5.3% EBT % 1, % 1, % -44.0% -31.7% Tax % (199) -0.6% % % -94.5% Profit (Loss) from discontinued operarion % % (37) 0.0% -72.5% % Net income % 1, % 1, % -36.5% -40.1% Net income (loss) attributable to: Equity holders of the Company % 1, % 1, % -39.3% -39.7% Non-controlling interests of the subsidiaries % % % 7.4% -43.6% Earnings per share Basic earnings per share % -40.4% Diluted earnings per share % -40.4% Exchange rate THB/USD % -4.3% Normalized net profit*** % 1, % 1, % -10.2% -30.1% Page 54 Remark: *Including share of income from investment in associates **1Q17 and 4Q17 figures were restated mainly due to COGS reclassification ***Normalized net profit exclude ALL one-off adjustments and items throughout the period

55 Statement of Financial Position as of 31 March 2018 (Unit: THB mn) 1Q18 % to total assets 2017 % to total assets Change Cash and cash equivalents* % % -33.4% Trade and other receivables - net 13, % 16, % -14.6% Inventories - net 40, % 43, % -5.8% Other current assets 2, % 2, % 21.0% Total current assets 57, % 62, % -7.6% Fixed assets 25, % 25, % 0.6% Goodwill and other intangible assets 13, % 14, % -1.7% Other non-current assets 44, % 44, % 1.8% Total Assets 142, % 146, % -2.8% Bank overdrafts and short-term loans 14, % 15, % -8.4% Trade and other payables 17, % 19, % -14.0% Current portion of long-term loans % % -6.3% Current portion of debentures 3, % 0 0.0% #DIV/0! Current portion of finance lease liabilities % % 3.2% Other current liabilities % % 5.9% Total current liabilities 35, % 36, % -2.5% Long-term loans from financial institutions 14, % 14, % -0.8% Debentures 32, % 36, % -9.0% Finance lease liabilities - net of current portion % % -10.7% Other non-current liabilities 10, % 10, % 0.6% Total Liabilities 93, % 98, % -4.3% Non-controlling interests of the subsidiaries 3, % 3, % -1.2% Total Shareholders Equity 48, % 48, % 0.5% Total liabilities and shareholders equity 142, % 146, % -2.8% Page 55 Remark: *Including short-term investments

56 1Q18 Statement of Cash Flow Consolidated (Unit: THB mn) 1Q18 1Q17 Change Profit before income tax 954 1,722 (768) Adjustments for depreciation & amortisation expenses Other adjustments (96) (384) 287 Changes in operating assets and liabilities 1,035 (2,862) 3,897 Cash flows receipts from operating activities 2,602 1, Net cash receipts (payments) from operating activities 2,532 1, Net cash payments for investing activities (1,052) (892) (160) Net cash receipts (payments) for financing activities (1,857) (1,531) (325) Net increase (decrease) in cash and cash equivalent (377) (728) 352 Cash and cash equivalents - opening balance (158) Exchange gain (loss) on cash and cash equivalents 6 (16) 22 Cash and cash equivalents - closing balance 190 (014) 204 CAPEX (1,233) (1,005) (228) Management Est. Free Cash Flows* 1,369 1, Page 56

57 Corporate website: IR website: Tel: Page 57