thai union frozen products (tuf) investor presentation december 2010
TRANSCRIPT
Thai Union Frozen Thai Union Frozen Products (TUF)Products (TUF)
Investor
Presentation
December 2010
www.thaiuniongroup.com
DisclaimerDisclaimer
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 certainties. 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.
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• Prudent Investment Policy from our Chairman“We will expand internationally only on seafood
business where we have experience and expertise on”“For investment decision, no matter what possibility of
failure is, can we survive if the project fails”
• Clear strategies from our President“We look at the business on the global scale. Our goal is
always to diversify our risk, expand our investment overseas, balance our revenue from around the globe and try to have additional production facilities outside Thailand. We have a global strategy, not just a Thailand strategy”
TUF In A SnapshotTUF In A Snapshot
• The largest Asian (ex-Japan) seafood processor in sales value. Sales (2009):
approximately US$ 2 billion
• The world’s largest tuna packer in terms of production volume and sales,
but will also be the most integrated global player after acquiring MW
Brands
• A top five shrimp processor and exporter in Thailand
• Global workforce: 30,000 (c. 4,000 from MW Brands)
• Select key customers: Walmart, Costco, Sysco, Mitsubishi, Darden Restaurants,
US Food Service, IMA, Nestle, Hagoromo, Safeway, Kroger, C & S Wholesale, Dollar
General, US Government and others.
• Owner of:– MW Brands – Top shelf-stable seafood
manufacturer in Europe with market leading brands in UK, France, Italy,
Ireland and Netherlands, namely John West, Petit Navire, H. Parmentier and
Mareblu– Chicken of the Sea Brand – the 3rd
largest canned tuna brand in the US– Empress International – a leading US
seafood importer and distributor– Chicken of the Sea Frozen Foods – a
fast-growing seafood distributor under the Chicken of the Sea brand
• Strategic shareholders:
- Mitsubishi (Japan’s largest trading house)
- Hagoromo (Japan’s largest canned tuna brand)
• Market Cap. : US$ 1.65 billion– 956.3 m shares
– foreign limit 45.0%-4-
-5-
1977:
Group founded under Thai Union Manufacturing by current Chairman Kraisorn Chansiri
1992:
Strategic partnership formed with key overseas customers, Mitsubishi Corp and Hagoromo Foods Corp
2001:
Purchased the remaining 50% stake of Chicken of the Sea International
2005
Invested in a 50% stake of China’s Century (Shanghai) Trading Co., Ltd. which owns the “Century” brand, the No.1 canned tuna brand in China by sales value
1977 1992 2005
1988:
Thai Union Frozen Products PCL established
1994:
Thai Union Frozen Products PCL. listed on the Stock Exchange of Thailand
1994
1997:
Group purchased 50% of Chicken of the Sea International (“COSI”)
1998 2003200119971988 2006 2007
2006:
Acquired a 76.5% stake of Indonesian tuna packer PT Jui Fa International Food
2003:
Acquired a 100% stake in Empress International Ltd. to improve seafood distribution capabilities in the U.S.
2006:
Invested with a few US seafood veterans to set up Chicken of the Sea Frozen Foods to market frozen seafood under the Chicken of the Sea brand
1998:
Acquired 90% of Songkla Canning’s shares through share swap
30+ Years Of Seafood Processing Experience30+ Years Of Seafood Processing Experience•Business growth through organic expansion and acquisitions (vertical integration)
•Never has a single quarterly loss and never miss a single dividend payment
2007:
Acquired a tuna fishing fleet consisting of 4 purse-seiners and 1 scout boat to catch fish in the Indian Ocean
2008
2008:
Acquired a 51% stake of Vietnam-based seafood processor Yueh Chyang Canned Food which produced canned shellfish and tuna and Invested in a 14.99 stake of India-based shrimp feed and shrimp producer Avanti Feeds
2009
2009:
Closed down American Samoa tuna processing plant and moved to a new facility in Lyons, Georgia state of USA
2010
2010:
Acquired 100% of Paris-based MW Brands, an integrated canned seafood manufacturer in Europe. The firm owns well-known brands: John West, Petit Naivre, Mareblu and H. Parmentier with leading market positions in UK, France, Italy, Ireland and Netherlands.
By Product
9M10 Sales Breakdown By Product & Market9M10 Sales Breakdown By Product & Market
By Market
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Sales: US$ 1,581 m
Sardine / Mackerel 4%
Tuna 40%
Canned Seafood
8%
Shrimp Feed 6%
Cephalopod / Salmon
3%
Canned Petfood 9%
FrozenShrimp 23%
Domestic 7%
Canada1%
Domestic sales12%
Japan12%
Asia(non-Japan)
3%USA49%
Middle East2%
Oceania3% Europe
12%Africa4%
S. America 1%
Own Brand vs. Contract Manufacturing
50%
12%
0%
38%
Overseas Subs. 39%
(own brands)
Domestic Sales 12% (own brands)
Sales: US$ 1,581 m
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Sales from Thai Operations Alone
(OEM + Domestic Sales)
Contract Manufacturing for Export (OEM)
49%
9M10 Sales 9M10 Sales
Own Brands vs. OEM & Sales from Thai OperationsOwn Brands vs. OEM & Sales from Thai Operations
USA8%
Africa7%
Europe21%
Oceania6%
Middle East4%
USA8%
Asia(non-Japan)
6%
Japan22%
Domestic sales22%
Canada2%
South America
2%
Sales: US$ 873 m
Integrated Supply Chain - TunaIntegrated Supply Chain - Tuna
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•Thailand is the world’s largest exporter of canned tuna
•TUF is the world’s largest tuna processor by volume that allows competitive raw material sourcing and economies of scale (efficient cost control and value maximization by selling differentiated products to geographically and culturally diverse markets)
Tuna Catching
Processing & Canning
Can & Label Production
Marketing & Distribution
to Retailers and
End-Consumers
(Thai Union Frozen, Thai Union Manufacturing, Songkla Canning, Samoa Packing, PT Jui Fai International Food, Yueh Chyang Canned Food)
(Asian Pacific Can & Thai Union Graphic)
(Third-party suppliers & own fishing fleet)
Integrated Supply Chain - ShrimpIntegrated Supply Chain - Shrimp
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•Thailand is the world’s largest shrimp exporting country
•TUF is a top shrimp processor and exporter in Thailand, especially for the US market
•End-to-end integration allows product traceability, food safety and total control of product qualityBrood Stock Breeding & Hatchery
Feed Production & Distribution
Processing & Exporting
Marketing & Distribution to wholesalers, food-service
outlets, and end- consumers
Farming
traceability trail
(partner farms in Thailand)
(Thai Union Feedmill)
(Thai Union Hatchery)
(Thai Union Frozen & Thai Union Seafood)
Volatile Tuna Prices Volatile Tuna Prices
0
200
400
600
800
1000
1200
1400
1600
1800
2000
Jan
'03
Mar
May Jul
Sep
Nov
Jan
'04
Mar
May Jul
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Nov
Jan
'05
Mar
May Jul
Sep
Nov
Jan'06 Mar
May Jul
Sep
Nov
Jan'07 Mar
May Jul
Sep
Nov
Jan'08 Mar
May Jul
Sep
Nov
Jan'09 Mar
May Jul
Sep
Nov
Jan'10 Mar
May Jul
Sep
USD / MT
Skipjack tuna raw material prices (WPO)
Catching situation / Weather (e.g. sea surface temperature, global warming)
Price of fuel
Number of fishing boats (purse-seiners)
Market speculation
Seasonality
Packers’ demand
Fishing technologies
What drive the tuna raw material price?
TUF strategy
• Operating own fishing vessels to enhance bargaining power
• Consistent and sizeable buying
• Cost-plus pricing
• Global sourcing intelligence
• Lean buffer stock and non-speculative inventory management
2008 Average: US$ 1,585 / metric ton
2009 Average: US$ 1,141 / metric ton
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Persistently High Shrimp PricesPersistently High Shrimp PricesTUF strategy
• Integrate the supply chain to achieve traceability and reliable quality control
• Source directly from select farms which practice good management and food safety standards
• Cost-plus pricing and consistent buying
0
20
40
60
80
100
120
140
160
180
200
Oct
'03
Dec
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Aug
Oct
Domestic shrimp raw material prices
White Shrimp (60 pcs / kg)
THB / KG
Shrimp size
Domestic & overseas supply situation
Strength of Thai Baht
Disease outbreaks
Packers’ demand
Market speculation
Seasonality 2008 Average: Bt 109 / Kg
2009 Average: Bt 107 / Kg
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What drive the shrimp raw material prices?
Thai Baht Strength – A Manageable ChallengeThai Baht Strength – A Manageable Challenge
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-About 88% of the group’s revenues and 62% of the group’s costs are in US$ in 9M10. COSI plant relocation and rising shrimp sales increased our Thai baht exposure within the current cost structure, but partly offset by higher domestic sales-Given the cost structure of our Thailand operations, weaker Thai baht would normally benefit us. But active FX hedging, cost management and price adjustments helped keep our operating margins relatively stable even when Thai baht strengthened in the first 9 months of 2010
• TUF has acquired 100% of MWB for a total consideration of Euro 680 mm in cash from Trilantic Capital Partners on October 29, 2010.
• The transaction was financed by:
1. Euro 340 mm (loans to the target by European banks)
2. Euro 180 mm (loans to TUF by Thai banks)
3. Euro 60 mm (Euro Convertible Debenture to Standard Chartered Private Equity)
4. Euro 100 mm (a rights issue of 44.2 mm new shares at a ratio of 1 new share per 20 existing shares and a private placement of 29 mm
new shares to institutional investors)
• CIMB Securities (Thailand), the Independent Financial Advisor, employs various valuation methodologies i.e. comparables and DCF and opines that the optimal price of the acquisition is Euro 702.3 mm – Euro 875.5
mm
Acquisition of MW Brands CompletedAcquisition of MW Brands Completed
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Vertically Integrated Business Vertically Integrated Business
Sustainable sourcing and procurement
Production facilities and processes
Distribution andlogistic networks
Marketing and sales organization
• Fleet management: 5 fishing vessels in dominant fishing ground
• Long-term supply contracts with ships from EU
• Processing facilities near major fishing grounds in Ghana and the Seychelles and at the heart of distribution center in France and Portugal
• Distribution throughout Europe, the world’s largest ambient seafood market
• Products are marketed through leading iconic brands
Brand PortfolioBrand Portfolio
France United Kingdom Italy Ireland Netherlands
Ambient seafood sector size(Euro mm)
773 534 910 39 66
Key brands
Market position #1 #1 #3 #1 #1
Market share 29% 33% 4% 70% 34%
Source: Nielsen and IRI – MAT February 2010
MW Brands: “Ocean to Plate”MW Brands: “Ocean to Plate”
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Secure fish supply through long-term supply contracts and fleet ownership
Long-term supply contracts
Long-term supply contracts
• Long-term supply contracts with French and Spanish fleets in Seychelles covering over 80% of IOT needs
• Provides flexibility to handle tuna migratory habits
• Ensures stability of fish supply
Own fishing fleetOwn fishing fleet
• 5 renewed fishing vessels owned in Ghana covering over 60% of PFC needs
• Ensures low cost supply
• Allows licensed access to prime Gulf of Guinea fishing grounds
Production facilities
European Seafood Investment Portugal
Pioneer Food Company, Ghana
Various Seafood Products (salads, seafood spreads...)
Canned tune and frozen tuna loins
Canned Sardines & Mackerel
Canned Tuna
Indian Ocean Tuna, Seychelles
Est Paul Paulet, France
• The Company owns and manages, through its subsidiary, five tuna fishing purse seines in Ghana
• The combination of owned fishing vessels in Ghana and long-term supply agreements with ships from EU member countries entitles MWB to EU import duty exemption under the Cotonou Partnership Agreement
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MW Brands – Secured Supply and Production FacilitiesMW Brands – Secured Supply and Production Facilities
MWB Sales BreakdownMWB Sales Breakdown
By productBy productBy countryBy country
Post-AcquisitionPre-Acquisition
Financial SummaryFinancial Summary
Fiscal year ended 31 March 2007 2008 2009 2010 2007-10 CAGR
Total Sales Volume (‘000 Tons) 117.7 121.3 110.8 114.3 (1.0)%
Net Sales Value (Euro mm) 447.0 490.9 443.6 448.2 0.1%
EBITDA (Euro mm) 56.8 60.1 67.6 82.5 13.3%
Margin (%) 12.7% 12.3% 15.2% 18.5%
EBIT (Euro mm) 48.4 49.5 51.2 70.0 13.1%
Margin (%) 10.8% 10.1% 11.5% 15.6%
Export 6%
Netherlands 3%
Ireland 4%
Italy 7%
France 43%
UK 37%
Other fish 4%
Mackerel 5%
Sardines 8%
Salmon 10%
Value-added Tuna 10%
Tuna 63%
For Fiscal Year Ended 31 March 2010 For Fiscal Year Ended 31 March 2010
Combined tuna products 73%
• In 2006 Trilantic acquired MWB through a carved out of various entities from the US food producer HJ Heinz at 8.9x EV/EBITDA
• MWB’s financial performance over the past four years reflects the implementation of a number of structural and strategic business changes that have focused on profitability rather than NSV
• The negative sales volume growth is the result of a strategic decision to discontinue loss-making and low gross margin products in the private label and foodservice channels
• The improved margin in 2010 was due to the strong brand equity especially in France.
MW Brands: Financial HighlightsMW Brands: Financial Highlights
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Low Cost Producer Status with Duty Free Access to EU
Market
Low Cost Producer Status with Duty Free Access to EU
Market
• MWB’s strategic locations not only provide optimal access to tuna but also enable MWB to benefit from low labor costs and zero import duty into EU market for ACP countries. TUF is currently paying 24%
import duty to EU market
Strategic Location with
High Barrier to Entry
Strategic Location with
High Barrier to Entry
• MWB’s production and processing facilities are located within easy access to two of the world’s best tuna fishing grounds, Seychelles (Western Indian Ocean) and Ghana (Atlantic Ocean). This enables MWB to access low cost tuna supply and flexibility to interchange
production volumes between the two plants
Sustainable Low Tax Structure
Sustainable Low Tax Structure
MWB benefits from a low corporate tax rate of 0% in Seychelles and 4% in Ghana
Unique strategic set-up delivers low cost production
Proximity to End Markets
Proximity to End Markets
Low logistic cost from production facilities to end markets in the UK and Continental Europe
MW Brands – Low Cost ProducerMW Brands – Low Cost Producer
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DCF (Post-Synergy)
DCF (Post-Synergy)
DCF (Pre-Synergy)DCF (Pre-Synergy)
Forward EV/EBITDA
Forward EV/EBITDA
Historical EV/EBITDA
Historical EV/EBITDA
Forward PERForward PER
Enterprise Value (Euro mm)
300 400 500 600 700 800 900 1 ,000
Historical PERHistorical PER
Historical P/BVHistorical P/BV
Book Value of Total Assets
Book Value of Total Assets
559
382 404
1.1x 1.3x
Acquisition price Euro 680 mm
517 695
6.6x 8.7x
663 674
9.7x 9.9x
637 724
7.7x 8.7x
700 731
8.3x 8.6x
702 731
796 991
Optimal RangeEuro 702 - 876 mm
0% 2%
0% 2%
• CIMB Securities (Thailand), the Independent Financial Advisor, employs various valuation methodologies i.e. comparables and DCF and opines that the optimal price of the acquisition is Euro 702.3 mm – Euro 875.5 mm
• Trilantic acquired MWB in 2006 at EV/EBITDA multiple of 8.9x
• Precedent transactions of merger and acquisition in seafood company from 1999-2010 has an average EV/EBITDA multiple of 9.9x
• DCF was calculated by using Weighted Average Cost of Capital (WACC) of 8.6%, with sensitivity on terminal growth rate
MW Brands - Summary of IFA ValuationMW Brands - Summary of IFA Valuation
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Branded ProductsBranded Products
• Combined branded products’ sales of TUF and MWB will account for approximately 61% with owned portfolio of leading brands in UK, France, and Italy. Currently, TUF’s branded products
contributes approximately 50% of sales2
• MWB’s iconic brands i.e. Petit Navire, John West, Mareblu, Hyacinthe Parmentier have established goodwill in European market in many past decades
Strengthen Market
Positioning
Strengthen Market
Positioning
• Create a global seafood player of scale as well as a truly global tuna company
• Access to Europe, the world’s largest ambient seafood market where MWB has leading positions in major countries, with continual cooperation from MWB’s strong management team
• Combined pro-forma sales of TUF and MWB of Euro 2.1 bn (USD 2.7 bn)1 with strong presence in 3 major continents namely USA, Europe, and Asia at well-balanced portion of one-third in each
market. Currently, TUF’s sales contribution in USA, Europe, and Asia is approximately 50%, 13%, and 14%, respectively. Sales in Europe are mostly private label; thus, no cannibalization in
European market
Seafood Integration
Seafood Integration
Unlock significant revenue and cost synergies
– Optimize fleet vessel fishing grounds and procurement: MWB’s production facilities are located in Ghana and Seychelles, one of the major fish grounds. Once TUF transfers 4 vessels to
Ghana, the fleets, totaling 9 vessels, will increase the capacity and efficiency of the overall fish catching. Average raw material cost will decrease due to the contribution of low fish cost
sourcing by its own fleets in Ghana and long-term contract with French and Spanish fleets in Seychelles
– Capitalize on the high complementarity of TUF and MWB production facilities
– Share production know-how and commercial best practices Full integration of different production facilities and leveraging the know-how for the
development of value-added products i.e. fish meal, fish oil, and fish extract. TUF plans to grow NSV of MWB with sustainable EBITDA margin by new products development i.e. frozen seafood,
pet food, and leverage brand value to more European countries No import duty for Europe operations since the production facilities of MWB locate in ACP
countries
Accretive value to shareholders by unlocking significant value from becoming globally integrated seafood firm
Notes:(1) Pro-forma combined sales for 12 months ended 31 Dec 2009: exchange rates of THB/EUR of 41.9055 and THB/USD of 32.3950(2) Based on the TUF’s last twelve month (LTM) figure and the MWB’s FY ended 31 Mar 2010
Rationale For the TransactionRationale For the Transaction
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Truly Global and Vertically Integrated Truly Global and Vertically Integrated
ThailandGeorgia, USA
Indonesia
Vietnam
Ghana
Seychelles
Portugal
France
Europe
TUF Markets TUF Production Bases TUF Fishing Grounds
MWB Production Bases MWB Markets MWB Fishing Grounds
• After the acquisition, TUF will become a truly global seafood player that have processing facilities and market distributions in major continents all over the world
• Reduced reliance on the US market sales through market diversification
• Combining fleet of 9 vessels and production facility in 8 strategic locations
• Production facilities are located closely to fishing grounds; hence, achieving lower cost of production
Global Sourcing, Global Production and Global MarketsGlobal Sourcing, Global Production and Global Markets
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MWBMWBTUFTUF RemarkRemarkCombinedCombined
Notes: (1) Based on the TUF’s last twelve month (LTM) figure and the MWB’s FY ended 31 Mar 2010 (2) Source: Fishstat Plus (F.A.O.) 2007(3) Converted to THB at the rate of THB 41.9055 per Euro 1
Fleet 4 Vessels 5 Vessels 9 Vessels
After TUF transfer 4 vessels to join MWB’s fleet in Ghana, the
combined tuna catching is expected to cover all needs
for Ghana’s plant
Canned Tuna Production
(net weight)
228,525 tons per year(as of FY2009)
103,200 tons per year 331,725 tons per year
Combined production will account for approx. 21% of
the global canned tuna production2
Sales Value1 THB 67.7 bn THB 18.8 bn3 THB 86.5 bn
Combined sales will account for 12.2% of the total ambient
seafood market share of approx. THB 712 bn3
(Euro 17 bn4)
Share of Tuna Sales 42.2% 73.0% 48.9% Tuna products will account for almost half of the total sales
Sales Breakdown by Market1
48% USA12% Europe
40% Asia and Others100% Europe
38% USA31% Europe
31% Asia and Others
Well-balanced sales from three major markets
Sales Breakdown by Type1
50% Own Brand50% OEM 100% Own Brand 61% Own Brand
39% OEM
Rank no. 1 in France and UK, the leading European markets
(Petit Navire/H. Parmentier and John West)
Rank no. 3 in Italy (Mareblu)Rank no. 3 in the USA (Chicken
of the Sea)5
(4) Source: Euromonitor 2009(5) Source: Nielsen and IRI – MAT February
2010
Combined TUF - MW Brands PositionCombined TUF - MW Brands Position
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Acquisition Debt FinancingAcquisition Debt Financing
1. Long-term loan from Thai Banks of THB 15,0000 mm
• Tranche A: 6-year amortizing, THB 6,000 mm
• Tranche B: 8-year amortizing, THB 9,000 mm
2. Long-term loan from European Banks of Euro 340 mm
• Tranche 1: 6-year amortizing, Euro 140 mm
• Tranche 2: 7-year bullet, Euro 200 mm
Debt financing of
Euro 680 mm
Debt financing of
Euro 680 mm
• Well-planned LBO by mitigate TUF’s risk with ring-fence, THB 14,248 mm (~50%) of acquisition debt at MWB level
• Debt financing cost is approximately 6-7% to acquire high cashflow company with EBITDA margin of 18%
Equity issue of117 million new
shares
Equity issue of117 million new
shares
• TUF proposes to increase its capital to 1,000 million shares from 883 million shares by issuing new common shares of 117 million shares as follows:
– Reserved RO shares of not exceeding 44.2 million shares to reward the existing shareholders
– Reserved PP shares of approximately 29.8 million shares to expand shareholders base i.e. institutional investors and/or high-net worth investors
– Reserved 42.8 million shares for the conversion of convertible debentures1 and the adjustment of right of such convertible debentures to private placement investors2
• The proceeds from RO and PP shares sold will lower debt level of TUF
Acquisition Debt FinancingAcquisition Debt Financing
TUF acquires MWB with cash, fully financed by debt locally and internationallyTUF acquires MWB with cash, fully financed by debt locally and internationally
DomesticDomestic ForeignForeign
Bid Co.Bid Co.
Thai BanksThai Banks European BanksEuropean Banks
Euro 340 mm (equal to THB 14,248 mm)
THB 29,248 mm (equal to Euro 680 mm)
Up to THB 15,000 mmUp to THB 15,000 mm
Notes:(1) CD of EUR 60 mm, 4 years maturity from issue date, 5% p.a. cash coupon annually (with an overall yield of 8% p.a. unless
converted into common shares) and exercise price of THB 46 per share(2) TUF plans to issue convertible debentures after filing necessary documentations to the SEC. The proceeds of convertible
debentures will be lower debt level of TUF
Up to THB 15,000 mm
Plan to take out by CD and Equity Financing (newly
issued shares from RO/PP)
Repayment of existing financials
debts of Euro 296 mm3
Repayment of existing financials
debts of Euro 296 mm3
The remaining to pay to Trilantic Capital Partners
(“Seller”) of Euro 384 mm3
The remaining to pay to Trilantic Capital Partners
(“Seller”) of Euro 384 mm3
Euro 680 mm4Euro 680 mm4
Note: (3) Financial debts and equity as of 31 March 2010 (Latest fiscal year)(4) Assuming the EBITDA (net of CAPEX) to be generated by the target at not lower than Euro 80 mm
per year (after synergies), the payback period for this transaction should be close to 8-9 years
11 22
11
22
Acquisition StructureAcquisition Structure
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Notes: (1) Pro-forma analysis as of 31 March 2010 for illustrative purpose only; exchange rate THB/EUR of 41.9055 based on Bank of Thailand’s average selling
rate as of 23 July 2010(2) MWB acquired on debt-free, cash-free basis(3) Acquisition debt of Euro 360 mm and Euro 340 mm at TUF and MWB, respectively; TUF portion includes Euro 20 mm of estimated transaction fees and
expenses(4) Estimated, based on 6-7% interest rate for new debt
(Unit: THB)
SalesSales
EBITDAEBITDA
EBITDA MarginEBITDA Margin
Asset Asset
DebtDebt
Interest ExpenseInterest Expense
Interest Coverage Ratio
Interest Coverage Ratio
Pro-forma1Pro-forma1
86.4 bn
9.8 bn
11.3%
60.7 bn
41.1 bn
2.3 – 2.7 bn
3.6x – 4.3x
MWBMWBTUFTUF
LTM as of 31 March 2010LTM as of 31 March 2010 FY ended 31 March 2010FY ended 31 March 2010
18.8 bn67.7 bn
3.5 bn6.3 bn
18.5%9.3%
23.4 bn37.2 bn
11.8 bn 15.1 bn - 14.2 bn
567 mm 906 mm – 1.1 bn4 - 852 – 994
mm4
Existing2Existing2 New3New3ExistingExisting New3New3
11.1x 5.7x – 7.0x - 3.5x – 4.1x
Pro-former Financial HighlightsPro-former Financial Highlights
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Illustrative Pro-forma LeverageIllustrative Pro-forma Leverage
Existing DebtExisting Debt
+ New Debt3+ New Debt3
Total DebtTotal Debt
LTM EBITDA LTM EBITDA
Debt / LTM EBITDA
Debt / LTM EBITDA
Pro-forma1Pro-forma1
11.8 bn
29.3 bn
41.1 bn
9.8 bn
4.25x
MWBMWBTUFTUF
- 211.8 bn
14.2 bn15.1 bn
14.2 bn26.9 bn
3.5 bn6.3 bn
4.11x4.34x
(A)
(B)
(A) + (B)
(C)
(A) + (B) / (C)
Notes: (1)Pro-forma analysis as of 31 March 2010 for illustrative purpose only; exchange rate THB/EUR of 41.9055
based on Bank of Thailand’s average selling rate as of 23 July 2010(2)MWB acquired on debt-free, cash-free basis(3)Acquisition debt of Euro 360 mm and Euro 340 mm at TUF and MWB, respectively; TUF portion includes
Euro 20 mm of estimated transaction fees and expenses
As of 31 March 2010
(Unit: THB)
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• Foreign Exchange Risk Management Cash Flow Risk (Transaction Risk) Balance Sheet Risk (Translation Risk)
Risk ManagementRisk Management
US Operation
- Rev. and expenses in USD - Asset, liabilities, equity, profit and loss in USD
Europe Operation- Rev. and expenses are mainly in EUR- UK: rev. in GBP, exp. In USD/EUR/GBP- Ghana: rev. in USD, exp. in USD/GHC
- Consolidated in EUR so that there is translation risk at this level- But, translation risk should be diversified
Thailand
- 95% rev. in USD, but 50% expenses in USD- Therefore, we have to manage 45% gap
- Consol. from US and Europe into THB- Translation risk should be better setoff due to opposite direction of USD and EUR
• Foreign Exchange Risk Management Cash Flow Risk (Transaction Risk) Balance Sheet Risk (Translation Risk)
Interest Rate Risk Management- We have only exposure on increasing interest rate risk on money
borrowed- Hedging products can be Cross Currency Swap, Interest Rate Swap,
Interest Rate Options i.e. Cap, Collar.
Risk ManagementRisk Management
Hedging Products- Forward Contracts- Currency Options- Natural Hedge (matching)
- FX Swap- Cross Currency Swap
• Other Risks Business Risks i.e. trade barriers, competition - CSR, sustainable development, compliance, ISO- M&A horizontally to diversify risk and benefits from presences in many
countries.
Production Risks - Cost plus strategy- Synergy and Security from high volume purchasing
Administrative and Management Risks- Clear guidance and policy- Annual business planning and tracking by boards. Internal Audit. Committee- Strengthening our people thru HR development program. Happy work life.
Risk ManagementRisk Management
• Prudent Investment Policy from our Chairman“We will expand internationally only on seafood business
where we have experience and expertise on”“For investment decision, no matter what possibility of
failure is, can we survive if the project fails”
• Clear strategies from our President“We look at the business on the global scale. Our goal is
always to diversify our risk, expand our investment overseas, balance our revenue from around the globe and try to have additional production facilities outside Thailand. We have a global strategy, not just a Thailand strategy”
Investment Risk ManagementInvestment Risk Management
Outlook for 2011Outlook for 20111. Expect dollar sales to grow 30% thanks to consolidation of MW
Brands in spite of the continual negative impact from strong Thai baht. Therefore, sales of all items should grow, particularly tuna
2. Average group operating profitability should improve given MW Brands’ typically higher margins while overall financial gearing will increase due to the acquisition financing of MW Brands
3. Expect positive EPS growth despite a small dilution effect from the right issue and private placement of new shares in October, 2010
4. Increase in pet food sales in the US through the new investment US Pet Solutions
5. Semi-annual dividend payment will continue but will be capped at Bt 1.2 billion per year to meet the debt covenant until the debt-to-EBITDA ratio returns to the pre-acquisition level (3-4 years from now) -29-
Strategy For 2011Strategy For 20111. Integrate MW Brands into Thai Union Group in terms of
corporate and financial reporting, procurement and production.
2. Optimize MW Brands operations through coordination and technical assistance from TUF
3. Transfer Thai Union fishing vessels to Ghana to enhance MW Brands’ fishing operations
4. Launch more value-added products (higher margin) by the Thailand-based Culinary & R&D Center in order to serve custom requirements and expand to new market segments
5. Actively manage financial (FX and interest rate) risks and scrutinize cash flows and debt covenants
-30-
4-Year (2009-2012) Sales Target4-Year (2009-2012) Sales Targetof US$ 3 billion Will Almost Be Met of US$ 3 billion Will Almost Be Met
By 2011 Thanks To MWB AcquisitionBy 2011 Thanks To MWB Acquisition
So, A New Target….So, A New Target….
US$ 4,000 billion in 2015US$ 4,000 billion in 2015
-31-
HighlightsHighlights
• 9M10 performance was considered respectable given the presence of negative
factors, namely stronger Thai baht, highly volatile tuna raw material prices and
persistently high shrimp raw material prices. These negative factors disrupted
sales and exerted pressure on margins
• Expect annual sales growth rate of 10% for 2010 (thanks to consolidation of MW
Brands since November) while the financial position remains strong in terms of
net profit, EBITDA and operating cash flows. Despite a challenging year so far,
we remain positive that 2010 will be a comparable one to the record year of 2009
• US operations contributed positively to the bottom line of the group so far after
the COSI’s plant relocation and Empress & COSFF restructuring
• MW Brands (the deal was completed on October 29, 2010) is an once-in-lifetime
opportunity that is highly complementary to TUF’s existing business despite the
added debt burden
-32-
Btm, 9M10 9M09 YoY
Sales 50,859 51,793 -1.8%
Sales in US dollar term 1,581 1,495 +5.8%
Gross Profit 7,092 7,664 -7.5%
%sales 14.7% 14.1%
Shutdown & Start-up Exp. for Plant Relocation 94.9 398.0
%sales 0.2% 0.8%
Operating Profit 2,788 3,156 -11.7%
%sales 5.5% 6.1%
Add: FX Gain (Loss) 679 331 +51.4%
Add: Other Incomes 453 293 +54.6%
EBIT 3,920 3,780 +3.7%
Less: Financial Expenses 393 459 -14.4
Net Profit (Bef. Taxes & MI) 3.527 3,321 +6.2%
Less: Tax / (Tax Credit) 560 323 +73.4%
Less: Minority Interests 446 372 +19.9%
Net Profit 2,521 2,626 -4.0%
%sales 5.0% 5.1%
Avg. Bt / USD 32.17 34.64 App. 7.1%
9M10: Sustainable Performance9M10: Sustainable Performance
-33-
Margins Sustained Despite Rising Thai BahtMargins Sustained Despite Rising Thai Baht3Q10
Bt m
3Q10
US$ m
2Q10
Bt m
2Q10
US$ m
1Q10
Bt m
1Q10
US$ m
4Q09
Bt m
4Q09
US$ m
3Q09
Bt m
3Q09
US$ m
2Q09
Bt m
2Q09
US$ m
Sales 17,438 554 17,092 529 16,329 498 17,202 517 16,931 500 17,195 497
EBITDA 1,515 48 1,628 50 1,581 48 1,371 41 1,660 49 1,642 47
Depr./Am
282 9 279 9 278 8 276 8 273 8 267 8
Int. Exp. 119 4 118 4 120 4 133 4 133 4 138 4
Corp. Tax
134 4 203 6 224 7 108 3 109 3 118 3
Net Profit
817 26 873 27 831 25 718 22 1,018 30 954 28
EPS (Bt) 0.92 0.99 0.94 0.81 1.15 1.08
GP (%) 12.5 15.6 13.7 16.2 16.2 16.2
OP (%) 4.2 6.8 5.5 5.7 6.7 7.3
NP (%) 4.7 5.1 5.1 4.2 6.0 5.6
Bt / US$ 31.45 32.33 32.82 33.28 33.88 34.62
-34-
Stable ROA and ROEStable ROA and ROE 3Q10 9M10 2009 2008
A/R Turnover (days) 34 34 36 36
Inventory Turnover (days) 98 101 108 105
Gearing Ratio* 1.0x 1.0x 1.0x 1.5x
D/E Ratio** 0.7x 0.7x 0.7x 1.1x
ROAE (annualized) 19.2% 20.2% 21.8% 16.0%
ROAA (EBIT/ Avg. Total Assets) (annualized)
13.0% 14.0% 12.8% 8.9%
**Gearing ratio = Total Liab./ Total EquityGearing ratio = Total Liab./ Total Equity
****D/E ratio = Interest-bearing debts / Total EquityD/E ratio = Interest-bearing debts / Total Equity
Note: ROA = EBIT / Avg. Total AssetsNote: ROA = EBIT / Avg. Total Assets
-35-
Solid Financial Position in 9M10Solid Financial Position in 9M10
• Higher EBITDA In Spite of Slightly Lower Net Profit - Financial Position Stayed Strong
Net profit (Bt2,521 m) was slightly lower than the same period a year ago but EBITDA
(Bt4,723 m) was higher, thanks to higher other incomes and FX gains during the first 9 months
this year. Financial position remained solid. Average margins were at about the same level
from a year ago. In addition, operating and free cash flows were positive while D/E ratio
stabilized between 0.6x - 0.7x since the end of 2009 and Debt-to-EBITDA inched up slightly
from 2.07 to 2.20x (before the completion of the MW Brands acquisition).
• Debt Amount Unchanged Short Term Proportion Increased As of September 30, 2010
(pre-closing), interest-bearing debts rose temporarily to Bt 13,859 m from Bt 12,169 m at the
end of Q2’10, partly due to the interim dividend payment and a lower level of accounts
payable. The value of inventories and accounts receivables were fairly stable from Q2’10.
Currently, 89% of our interest-bearing debts (local and abroad), amounting to Bt10,800 m,
were short term, up from 58% at the end of Q1’10, essentially owing to a large portion of Thai
baht bond issue worth Bt1,500 m and Bt3,200 m coming due in November 2010 and May,
2011. By the end of Q3’10, around 78% of our total debts were in Thai baht. The average
effective interest rate for the group was 3.66% for Q3’10.
-36-
Thank YouThank Youwww.thaiuniongroup.com
Mr. Wai Yat Paco Lee
Financial Controller / Investor Relations Officer
Appendices:Appendices:1.1. Historical share price movement & dividend Historical share price movement & dividend
paymentpayment
2.2. Historical profitability & financial positionHistorical profitability & financial position
3.3. Costs & Benefits of the Samoa Plant Costs & Benefits of the Samoa Plant Relocation ProjectRelocation Project
4.4. US top 10 most popular seafoodUS top 10 most popular seafood
5.5. Global seafood export breakdownGlobal seafood export breakdown
6.6. Major tuna fishing grounds and key tuna Major tuna fishing grounds and key tuna speciesspecies
7.7. TUF’s ACC 3-Star CertificationTUF’s ACC 3-Star Certification
8.8. Tuna fish sustainabilityTuna fish sustainability
9.9. Import tariff rates for Thai tuna and shrimp Import tariff rates for Thai tuna and shrimp in major marketsin major markets
10.10. Tuna Fast FactsTuna Fast Facts
11.11. Potential Sources of GrowthPotential Sources of Growth
12.12. Where Thailand Stands In World Seafood Where Thailand Stands In World Seafood IndustryIndustry
-38-
Appendix 1a: TUF Share Price Movement Appendix 1a: TUF Share Price Movement
(till 24/11/10)(till 24/11/10)
-39-
2009
Bt m
2009
US$ m
2008
Bt m
2008 US$ m
2007
Bt m
2007 US$ m
2006
Bt m
2006
US$ m
2005
Bt m
2005
US$ m
Sales 68,994 2,013 69,048 2,070 55,507 1,612 55,039 1,457 53,644 1,330
EBITDA 5,926 173 4,265 128 3,829 111 3,927 104 3,775 94
Depr.+Amor. 1,076 31 1,000 30 979 28 853 23 820 20
Fin. Exp. 602 18 635 19 580 17 608 16 361 9
Corp. Tax 431 13 107 3 263 7 133 4 282 7
Net Profit 3,343 98 2,201 66 1,823 53 1,901 50 2,082 52
GP. (%) 15.1% 12.7% 13.7% 15.3% 15.5%
OP (%) 6.0% 4.1% 4.2% 4.7% 4.8%
EBIT (%) 7.1% 4.8% 5.1% 5.5% 5.5%
NP. (%) 4.9% 3.2% 3.3% 3.5% 3.9%
Bt / US$ 34.28 33.36 34.43 37.77 40.32
-40-
Appendix 2a: Historical ProfitabilityAppendix 2a: Historical Profitability
2009 2008 2007 2006 2005
A/R Turnover (days) 36 36 38 36 34
Inventory Turnover (days) 108 105 105 93 90
Gearing Ratio* 1.0x 1.5x 1.3x 1.0x 1.1x
D/E Ratio** 0.7x 1.1x 1.0x 0.7x 0.8x
ROAE 21.8% 16.0% 14.2% 15.8% 18.5%
ROAA (EBIT/ Avg. Total Assets) 12.8% 8.9% 9.4% 11.2% 11.6%
**Gearing ratio = Total Liabilities / Total EquityGearing ratio = Total Liabilities / Total Equity
****D/E ratio = Interest-bearing debts / Total EquityD/E ratio = Interest-bearing debts / Total Equity
Note: ROA = EBIT / Avg. Total AssetsNote: ROA = EBIT / Avg. Total Assets
-41-
-Lower interest-bearing debts thanks to a lower Inventory balance (down by Bt 966 m and Bt 2,826 m from 3Q09 and a year ago respectively)
-EBITDA hit a new high at Bt 5,926 m thanks to expanded margins. A lower inventory level further sent operating cash flows (Bt 8,578 m) and free cash flows (Bt 6,672 m) to record levels despite capital expenditure worth Bt1,988 m
Appendix 2b: Historical Financial PositionAppendix 2b: Historical Financial Position
Appendix 3a: Samoan Plant Ceased OperationsAppendix 3a: Samoan Plant Ceased Operations
•Background:
•American Samoa has been home to COSI’s processing plant (Samoa Packing) since 1954
•There were 2,041 workers employed by Samoa Packing to carry out the full conversion process (from fish to cans)
•Mandated increasing minimum wages imposed by the federal government (in order to be in par with that of the mainland) added costs in a time of economic uncertainty that was indeed in an urgent need for cost savings
•Increasing costs and occasional inefficiencies led to management’s reassessment of the true strategic value of the Samoan plant
-42-
Appendix 3b: Strategic Reasons For RelocationAppendix 3b: Strategic Reasons For Relocation
1. Escalating costs in American Samoa due to:
• Increasing minimum wage
• Occasional inefficiencies and difficulties in efficient inventory control
2. Need to enhance customer service by locating the plant onshore (near the market)
3. Further integration with Thai plants to take advantage of the opportunities for cost-savings and better inventory management given a more coordinated supply chain
4. Tuna loins for all oil and white meat products in the new facility will be supplied by TUF’s Thai plants while other existing tuna products, such as chunk light in spring water, will be completely packed by Thai plants.
-43-
Appendix 3c: Details of the New PlantAppendix 3c: Details of the New Plant
Location: Lyons, Georgia
Area: 220,000 sq. feet
Expected number of employees: 220 employees, up to 330 in the future
Planned capacity: 100 loin tons per day
Expected annual output: 4 million cases
Products: tuna-in-oil and white meat products
-44-
Appendix 4: Top 10 US Seafood Consumption Appendix 4: Top 10 US Seafood Consumption by Species in 2009by Species in 2009
Species Pounds per Person per Year
1 Shrimp 4.10
2 Canned Tuna 2.50
3 Salmon 2.04
4 Pollock 1.45
5 Tilapia 1.21
6 Catfish 0.85
7 Crab 0.59
8 Cod 0.42
9 Clams 0.41
10 Pangasius 0.36
Source: H.M. Johnson & Associate for US National Fisheries Institute
-45-
Seafood consumption in the US was 15.80 pounds per capita in 2009 where fresh & frozen (11.8 pounds) + canned (3.7 pounds) + cured (0.3 pounds)
Most of the seafood consumed in the U.S. was not caught in U.S. waters. About 84 percent of the seafood consumed in the U.S. is imported, a dramatic increase from the 66 percent just a decade ago. Farmed seafood, or aquaculture, comprises almost half of the imported seafood.
The US is the third largest consumer of seafood behind China and Japan in terms of volume
Salmon8%
Small pelagics7%
Groundfish15%
Cephalopods5%
Crustaceans (others)
7%
Fish oil1%
Fishmeal3%Molluscs
(other)5%
Others22%
Tuna8%
Freshwater2%
Shrimp17%
Appendix 5: Global Seafood Export Value Appendix 5: Global Seafood Export Value in 2008 (US$94.5 billion)in 2008 (US$94.5 billion)
Source: FISHDAB - Globefish
-46-
Appendix 6: Major Fishing Grounds and Appendix 6: Major Fishing Grounds and Key Tuna SpeciesKey Tuna Species
-47-
2008 World Tuna Catches: 4,228,000 metric tons
Source: FISHDAB - Globefish
Yellowfin Tuna
27%
Skipjack Tuna
57%
Albacore Tuna
5%Bigeye Tuna
10%
Bluefin Tuna
(Atlantic,
Pacific &
Southern) 1%
Western Pacific Ocean
53%
Eastern Pacific Ocean
17%
Indian Ocean20%
Mediterranean & Black Sea
0%
Atlantic Ocean10%
Note:
Species mainly for canned tuna: Skipjack, Yellowfin and Albacore
Species mainly for sashimi tuna: Bluefin and Bigeye
Appendix 7: ACC 3-Star CertificationAppendix 7: ACC 3-Star Certification
- TUF is Thailand’s first shrimp producer to achieve Aquaculture Certification Council (ACC)’s three-star certification which ensures that its shrimp business unit’s operations meet a stringent set of social, environmental, and food safety standards, from hatchery, to farms, to processing plants – three types of facility which are represented by the three stars
- ACC is an independent and non-governmental US body to certify and promote best aquaculture practices
- For a facility to be certified, it needs to comply with Best Aquaculture Practices (BAP) standards on community rights, compliance with all relevant regulations, worker safety and employee relations, effluent management, responsible use of chemicals and fuels, and responsible management of waste. Shrimp farms also cannot be located in mangrove or other ecologically sensitive areas
-48-
Currently, four Regional Fisheries Management Organizations (RFMOs) manage global tuna resources:
1. IATTC Inter-American Tropical Tuna Commission (1949)2. ICCAT International Commission for the Conservation of Atlantic Tuna (1969)3. IOTC Indian Ocean Tuna Commission (1996)4. WCPFC Western and Central Pacific Fisheries Commission (2004)
Current challenges related to RFMO’s:
- Building consensus amongst members - Effectively limiting capacity or limiting fishing- Ensuring effective compliance with fishery regulations- Taking effective action for violating fisheries regulations - Improving the science and information / new technology
-49-
Appendix 8a: Tuna Fish SustainabilityAppendix 8a: Tuna Fish Sustainability
Appendix 8b: TUF co-founding ISSFAppendix 8b: TUF co-founding ISSF• Development of ISSF - International Seafood Sustainability
Foundation (www.iss-foundation.org)
– 65% of the world tuna business have agreed to implement the NEW ORGANIZATION to manage this critical issue.
– TOP 3 U.S.A Tuna Companies– TOP 3 European Tuna Companies– TOP 2 Asian Tuna Producers– Most Important Worldwide Tuna Brokers / Boat Owners– Environmental Organizations– Recognized Tuna Scientist
• ISSF board is composed of:– Members representing the foundation (NGO) – Tuna Scientists– Environmental non-governmental organizations (ENGO)– Opinion Leaders
-50-
Pacific Western Eastern Atlantic IndianSpecies Ocean Pacific Pacific Ocean Mediterranean Ocean
Skipjack - GeneralSkipjack - EastSkipjack - EastYellowfinBigeyeAlbacore - General N/A (1)Albacore - North (2)Albacore - South
(1) No specific data for Mediterranean albacore exists and this fishery is not utilized in tuna canning. Accordingly, it has not been assessed
(2) While North Atlantic albacore is rated “red”, recent actions by the IATTC to reduce catch quotas is expected to bring the fishery back into a sustainable status
Appendix 8c: ISSF’s Survey of Tuna StockAppendix 8c: ISSF’s Survey of Tuna Stock
-51-
Green - Overfishing is not occurring and the fishery is not overfished.Yellow - There are one or more issues with the fishery but effective management practices are in place to ensure the sustainable management of the stocks.Red - Overfishing is occurring and the fishery is overfished. However, a management regime is in place that is addressing the issues.Black - Overfishing is occurring and the fishery is overfished:
Management actions to bring the fishery back into a sustainable state are not being taken and members will cease to purchase until appropriate actions are taken
Appendix 9: Import tariffs for Thai Tuna and Appendix 9: Import tariffs for Thai Tuna and Shrimp Products In Developed MarketsShrimp Products In Developed Markets
Canned tuna Frozen shrimp
US - 0.5 cent per pound of frozen tuna loin- 6% for canned tuna in brine with a quota. Once the
quota (determined annually as a percentage of domestic production) is filled, any additional imports will be subject to 12.5% duty
- 35% on canned tuna in oil
- 0% on all frozen products, except for the case of anti-dumping (AD) tariffs
- Due to the AD duty, Thai shrimp in general is subject to 2.61% tariff
- 5%, when canned with fish meat
EU - 24% for canned tuna and tune loins but certain African, Caribbean and Pacific (ACP) countries and Andean countries (e.g. Ecuador, Colombia) enjoy 0% due to preferential agreements with the EU
- 20.5% for canned tuna as long as Thai exporters fulfilling the rule of origin requirement in GSP
- 12% on frozen shrimp- 20% on canned shrimp- Due to the GSP privilege, Thailand,
Indonesia, India, Malaysia and Pakistan pay only 4.8% for frozen shrimp and 7% for canned shrimp
Japan - 9.6% for canned tuna. The Japan – Thailand Economic Partnership Agreement (JTEPA), since Nov 2007, allows this rate to drop to zero percent within 5 years as long as fish used are caught by ASEAN boats or members of Indian Ocean Tuna Commission (IOTC).
- 0% due to JTEPA with effect since Nov 2007
-52-
Appendix 10: Tuna Fast FactsAppendix 10: Tuna Fast Facts• Tuna never stop moving, they are always in motion and a typical tuna may eat 5 percent of its own wei
ght in food in one day
• Unlike most fish, which are cold-blooded, tuna are able to maintain their temperature several degrees warmer than the water in which they find themselves. Albacore is the only species that can be labeled as "white meat tuna" in the U.S
• In recent years, the world’s tuna catch breaks down into approximately: skipjack at 60%; yellowfin at 25%; bigeye at 9%; albacore at 4% and bluefin at 1%. Yellowfin, skipjack, and bigeye tunas spawn widely throughout tropical waters
• The majority of US canned tuna is skipjack. Skipjack accounts for the largest share of tuna caught and eaten by people around the world
• Main fishing methods: 61% purse seine; 13.9% longline; 10.9% pole and line; 1.2% troll; and 12.4% others
• Stock status by species (based on ISSF survey http://www.iss-foundation.org/tunareport ):
– Skipjack: stocks are overall a very healthy species of tuna with a majority of stocks being sustainably fished (mainly canning)
– Yellow fin: stocks are overall at or nearing the maximum level of fishing and need to be monitored (canning & sashimi)
– Albacore: stocks are overall healthy with some likely being fished at or near maximum level (canning)– Bigeye: stocks are overall at or nearing the maximum level of fishing and need to be monitored with the
exception being EPO bigeye which needs immediate conservation measures put in place by IATTC (mainly for sashimi)
– Blue fin: stocks are overly exploited and require immediate conservation measures (mainly for sashimi)-53-
Appendix 11: Potential Sources of GrowthAppendix 11: Potential Sources of GrowthNear term • Economic recession forcing consumers to trade down to low price / highly affordable
staple items, such as canned tuna and shrimp
• New products through new packaging designs/ technologies which provide consumers with convenience and ease of use, e.g. tuna / salmon pouches, ready-to-eat tuna / salmon steak pouches, peel-to-open tuna / salmon cups, ready-to-eat frozen meals, etc.
• M&A opportunities upon consolidation of the world tuna and shrimp industries
• Outsourcing/ contract manufacturing for private labels and existing retail brands
• Healthy eating trend of seafood upon more scientific proof of its importance in daily diet
• Removal of trade barriers through GSP privileges, Free Trade Agreements or WTO
Long term• New markets: China and Indian markets, as well as the Middle East, Africa and Eastern
Europe, where consumption of tuna is still low at the moment, but should grow in the future
• Higher demand for inexpensive nutritious food (protein) to feed the growing world population as a result of the increasing individual life span
-54-
Appendix 12a: Where TUF stands - Appendix 12a: Where TUF stands - Nearly 40% of Thailand’s Canned Tuna ExportsNearly 40% of Thailand’s Canned Tuna Exports
24.0%
13.6%12.1%11.1%
5.0% 4.3%3.6% 3.5% 3.4% 3.2%
16.2%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Thailand
Spain
USAEcuador
IranM
exico
Seychelles
Mauritius
ItalyJapan
Others
22.4%
11.3%
7.5% 7.3%6.0% 5.8% 4.8%
3.5%2.1% 2.0% 2.0%
25.3%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
-55-
46.5%
9.7%6.4% 4.8% 4.4% 4.2% 3.6% 2.8% 2.3% 2.0%
13.3%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
World Production of Canned Tuna 2006 (Vol: 1,667,300 tons) World Exports of Canned Tuna 2006 (Vol: 1,078,000 tons)
*Est. World Consumption of Canned Tuna 2006 (Vol: 1,733,600 tons)
Source: FISHDAB - Globefish
*World consumption is estimated by Production + Imports – Exports
16.7%
11.2%9.5%
7.5%5.4%
4.2%4.1% 3.3% 3.1% 3.1% 3.0%
29.9%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
World Imports of Canned Tuna 2006 (Vol: 1,144,000 tons)
Appendix 12b: Where TUF Stands - Appendix 12b: Where TUF Stands - A Top 5 Shrimp Exporter in ThailandA Top 5 Shrimp Exporter in Thailand
41.1%
8.7%8.2% 8.1%6.7%
2.7% 2.7% 2.1% 2.1% 1.6%
16.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
14.5%
11.3%7.7% 7.0% 6.8% 6.8%
5.0% 4.5%3.1%
3.0%
30.3%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
26.1%
13.3%
7.8% 6.8%4.6% 3.9% 3.3% 3.2% 2.7% 2.5%
25.8%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
-56-
World Shrimp Production 2006 (Vol: 6,624,400 tons) World Shrimp Exports 2006 (Vol: 2,394,200 tons)
World Shrimp Imports 2006 (Vol: 2,275,000 tons)
Source: FISHDAB - Globefish
30.2%
18.3%
12.7%12.1%
6.6%4.4% 4.4%
2.4% 1.8% 1.7%5.4%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
China
Thailand
Indonesia
Vietnam
IndiaEcuador
Bangladesh
Brazil
Mexico
Philippines
Others
Est. World Shrimp Cultivation 2006 (Vol: 2,718,400 tons)
William B. Darden Supplier AwardWilliam B. Darden Supplier Award
2 years (2009 & 2010) in a row2 years (2009 & 2010) in a row
•In the past 15 years, TUF has won 10 awards in different categories, but it is definitely an achievement of winning this top honor back to back.
•Again, only 11 out of over 1,500 global suppliers won the award this year and among this handful of winners, only two are seafood suppliers.
•The Bill Darden Distinguished Supplier of the Year Award is the highest level of honor awarded to the suppliers of the restaurant company. It is also one of the most prestigious awards for suppliers in the US food service industry.
•Based in Orlando, USA, Darden Restaurants is the world’s largest full-service restaurant company that owns and operates more 1,700 restaurants, including Red Lobster, Olive Garden, LongHorn Steakhouse, The Capital Grille, Bahama Breeze, and Seasons 52. It employs 180,000 people and generates US$ 7 billion in annual sales.
-57-
Best Managed Company Awards Securities Analysts Association of Thailand Poll
2009 Most Favorite Company, Most Favorite CEO, Most Favorite CFO and Most Favorite IR in the Food and Agro sector
Boston Consulting Group’s Biannual BCG100 Global Challengers Survey2006 & 2008 One of the only 2 Thai companies selected in the survey
Asiamoney Magazine’s Annual Best Managed Companies Poll2005-2006 Consecutively voted as Overall Best Managed Thai Mid-Cap Company
1998-2006 Consecutively voted as one of Overall Best Managed Thai Companies
FinanceAsia Magazine’s Annual Best Managed Companies’ Poll2010 Best Managed Thai Mid-Cap, One of the Overall Best Managed
Thai Companies, One of the Best Corporate Governance, One of the Best Investor Relations, One of the Most Committed to a Strong Dividend Policy2009 One of Thailand’s Overall Best Managed Companies; One of the
Best Mid-Cap; One of the Best Corporate Governance; One of the Most Committed To A Strong Dividend Policy
2006 One of Thailand’s Best Managed Companies in the category of Best Corporate Governance and Most Committed to Strong Dividend Policy2002-2004 One of Thailand’s Overall Best Managed Companies
Awards and Recognitions By The Financial CommunityAwards and Recognitions By The Financial Community
-58-
Best Managed Company Awards Euromoney Magazine’s Annual Best Asian Companies Poll
2010 One of the top 3 Best Asian Companies in the Food, Drink and Tobacco category
Corporate Governance Awards Securities Exchange Commission of Thailand
2002-2003 Disclosure Award2003 Popular Award
Stock Exchange of Thailand2004 Best Performance Award – Agribusiness Sector
Awards and Recognitions By The Financial CommunityAwards and Recognitions By The Financial Community
-59-