Analyst Presentation Financials as of 31 December 2015 Disclaimer - - PowerPoint PPT Presentation
Analyst Presentation Financials as of 31 December 2015 Disclaimer - - PowerPoint PPT Presentation
Thai Foods Group Analyst Presentation Financials as of 31 December 2015 Disclaimer The information contained in this presentation (the Analyst Presentation) is for information purposes only, and does not co nstitute or form part of any
Disclaimer
The information contained in this presentation (the “Analyst Presentation”) is for information purposes only, and does not constitute or form part of any offer or invitation to sell or the solicitation
- f an offer or invitation to purchase or subscribe for, or any offer to underwrite or otherwise acquire any securities of THAIFOODS GROUP PUBLIC COMPANY LIMITED (the “Company”) or any
- ther securities, nor shall any part of the Analyst Presentation or the fact of its distribution or communication form the basis of, or be relied on in connection with, any contract, commitment or
investment decision in relation thereto in any jurisdiction. This Analyst Presentation has been prepared solely for information use during the Company’s presentation to equity research analysts, and may not be taken away, reproduced or redistributed to any other person. By attending this presentation and/or reading this Analyst Presentation, you are agreeing to be bound by the foregoing and below restrictions. Any failure to comply with these restrictions may constitute a violation of applicable securities laws. This Analyst Presentation is confidential, and all contents of this Analyst Presentation are to be kept strictly confidential until the publication of research in accordance with the applicable
- guidelines. Some of the information in the Analyst Presentation is still in draft form, has not been verified, and will only be finalized at the time of approval of a final prospectus or admission to
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- pinions in this Analyst Presentation. It is not intended that these materials provide, and you may not rely on these materials as providing, a complete or comprehensive analysis of the Company
- r any proposed offering. The information and opinions in these materials are provided as at the date of this Analyst Presentation, and are subject to change without notice. None of the
Company or any of its agents or advisers, or any of their respective affiliates, advisers or representatives, makes any representation as to, or assumes any responsibility with regard to, the accuracy or completeness of any information contained here (whether prepared by it or by any other person) or undertakes any responsibility for any reliance which is placed by any person on any statements or opinions appearing herein or which are made by the Company or any third party, or undertakes to update or revise any information subsequent to the date hereof, whether as a result of new information, future events or otherwise and none of them shall have any liability (in negligence or otherwise) for nor shall they accept responsibility for any loss or damage howsoever arising from any information or opinions presented in these materials or use of this Analyst Presentation or its contents or otherwise arising in connection with this Analyst Presentation. This Analyst Presentation may not be taken or transmitted into the United States, Canada, Australia or Japan or distributed directly or indirectly, in the United States (including its territories and dependencies and any state of the United States), Canada, Australia or Japan. No portion of these materials is an offer of securities for sale in the United States, Canada, Australia or Japan. Under the terms of any proposed offering, no securities will be offered or sold in the United States absent registration under the U.S. Securities Act of 1933, as amended (the “Securities Act”) or an exemption from registration requirements thereof. No public offering of securities will be made in the United States, and the Bank does not intend to register any part of a proposed offering under the U.S. Securities Act. 1
Agenda
2
Financial Highlights Future Plan Q&A Business Overview
Business Overview
Section 1
Symbol TFG Industry/ Sector Agro & Food Industry / Food & Beverage Share Outstanding 5,100.00 million share @ THB 1.00 per share Closed Price THB 1.39 per share (24/03/2016) Market Cap. THB 7,089.00 million % Free Float 15.70% Dividend Policy Not less than 50.00% of net profits of Company’s separated financial statement after deductions tax and any reserved portion required by law and the Company’s Articles of Association
Top Shareholders
1) Teawsomboonkij Group 83.66% 2) UBS AG HONG KONG BRANCH 1.75% 2) KT ZMICO Securities Company Limited 1.16% 3) Seamico Securities Public Company Liimited 0.74% 4) Trinity Securities Company Limited 0.58% 5) Mr. Wuttipong Wongsomboondee 0.54%
TFG Profile
4
Our history and major milestones
5
2001
Established as Thai Food (2001) Co., Ltd.
2003
Commenced chicken slaughterhouse operations with a capacity of 139,000 chickens per day
2012
TFG’s registered name changed to Thai Foods Group Co., Ltd Commenced operations
- f first parent pig farm
with a capacity of 1,800 pigs Acquired Thai Foods Research Center Co.,
- Ltd. and Thai Foods
Layer Farm Co., Ltd.
2013
Established Vietnam swine operations and commenced operations of first grandparent pig farm in Vietnam with a capacity of 700 pigs and first parent pig farm in Vietnam with a capacity of 1,400 pigs Commenced operations of third feed mill facility with a capacity of 50,000 tonnes per month Acquired Thai Foods Swine Farm Co., Ltd
2014
Commenced operations of third chicken slaughterhouse with a capacity of 150,000 chickens per day Commenced two new parent pig farms increasing its total capacity at the parent pig farms (including Vietnam parent pig farm with a capacity of 1,400 pigs) from 9,300 pigs to 12,000 pigs Acquired Ayothaya Agri-Tech Company Limited, Thai Foods Swine International Co., Ltd. and
- T. Paragon Holding Co., Ltd.
Converted to a public company and changed registered name to THAIFOODS GROUP PUBLIC COMPANY LIMITED
2007
Established first grandparent pig farm with a capacity of 1,900 pigs Established first feed mill facility with a capacity of 30,000 tonnes of feed per month
2015 2010
Established first great- grandparent pig farm with a capacity of 450 pigs
2004
Purchased 3 breeder chicken farms, increasing breeder chicken capacity to 312,000 chickens, and
- ne hatchery, increasing
production capacity to 699,840 eggs per week
2011
Established 2 new grandparent pig farms, increasing capacity to 5,300 pigs and commenced
- perations of first layer
chicken farm with a capacity
- f 38,400 chickens
Kick-start export of chicken meat to Japan and Europe and domestic sales of chicken sausage Listed in SET on 8 Oct 2015 Joint Venture in SEVEN FOODS
Overview of Corporate Structure
6
Production and selling of chickens, pigs and animal feed
Thai Foods Feed Mills Co., Ltd. Production and selling of animal feed 100%
Animal Feed
Thai Foods Research Center Co., Ltd. Operation of a research and development center Ayothaya Agri-Tech Company Limited Production of animal feed sacks and plastic farming equipment
Others
100% 100% Thai Foods Poultry Farm Co., Ltd. Operation of breeder chicken farms Thai Foods Contract Farming Co., Ltd. Rearing of chickens through contract farmers Thai Foods Layer Farm Co., Ltd. Operation of layer chicken farms
Poultry
100% 100% 100% Production and selling of live pigs in Vietnam Thai Foods Swine Farm Co., Ltd. Production and selling of live pigs Thai Foods Swine International Co., Ltd. Start operating swine business in Thailand by the end of 2015
- T. Paragon Holding
Co., Ltd. Investment Holding Company Thai Viet Swine Line Co., Ltd.
Swine
100% 100% 100% 100% Incorporated in Thailand Incorporated in Vietnam 2011 2011 2011/ 2005 2012/ 2010 2012 2013/ 2012 2014 2014/ 2010 2014/ 2006 Year of acquisition/incorporation 2013 Seven Foods Company Limited Trading company 2015 45.71% Incorporated in Japan
Overview – One of the leading producers of chicken meat and live pigs in Thailand
- Pig breeding and live pig
sales
- Having the capacity to
raise over 334,020 fattening pigs at any given time as at 31 Dec 2015
- Live pigs sold in Thailand
and Vietnam
- Manufacture and sale of
feed for animals, mainly chickens and pigs
- Having the capacity to
produce 120,000 tons of feed per month as at 31 Dec 2015
- Provision of research facility
services and sales of medical supplies developed in its research and development facility to third parties
- Production and sales of
animal feed sacks and plastic farming equipment Overview
Poultry Swine Feed Others
Vertically integrated food producer Operational presence in Thailand and Vietnam One of the largest market shares for chicken in Thailand One of the largest market shares for live pigs in Thailand Contract farming model to enable scalability and maximise return on capital investment Founded and owned/ controlled by Mr. Winai Teawsomboonkij and his related persons Well positioned to capture significant opportunities arising from lifting of import bans by Japan and the European Union
- Chicken breeding, chicken meat production
and sales and sale of day-old chicks, live chickens, layer chickens and processed chicken
- Having the capacity to produce 2.2 million
chickens per week at the slaughterhouses as at 31 Dec 2015
- Chicken products sold in Thailand to Japan,
and to European Union in Q1 2015
- Domestic sale of chicken sausage in Mar 2015
7 9,073 15,770 17,067 17,365 2012 2013 2014 2015
Consolidated revenue from sales
- f goods and services (THB Million)
Poultry 64% Swine 26% Feed mill 10% Others 0% Revenue contribution of the year 2015
Vertical Integrated Business Model
8
Poultry Industry Production Value Chain
Grandparent stock farms Breeder farms Hatcheries Broiler farms
Slaughterhouse
Distribution
Processed meat
Fresh meat Great- Grandparent pig farms Grandparent pig farms Parent pig farms Raise fattening pigs
Slaughterhouse
Processing Distribution
Swine Industry Production Value Chain
Stages of the production value chain which TFG is presently involved in Stages of the production value chain which TFG is not presently involved in Stages of the production value chain which TFG is presently involved in Stages of the production value chain which TFG is not presently involved in
Financial Highlights
Section 2
TFG’s Performance
10
YEAR 2015 YEAR 2014 Changes THB Million THB Million THB Million % Revenue from sales 17,365 17,067 298
1.75
Cost of sales (18,106) (15,121) (2,985)
19.74
Gross profit (loss) (741) 1,946 (2,687)
(138.08)
Gross profit margin (4) 11 (16)
(137.42)
Profit (loss) before income tax expense (1,862) 954 (2,816)
(295.18)
Profit (loss) for the year (1,574) 916 (2,490)
(271.83)
EBITDA Profit (loss) before income tax expense (1,862) 954 (2,816)
(295.18)
Finance cost 295 260 35
13.46
Depreciation of breeder poultry and swine 359 264 95
35.99
Depreciation and amortization 512 540 (28)
(5.10)
Total of Depreciation of breeder poultry and swine & Depreciation and Amortization 871 804 67
8.39
EBITDA
(696) 2,018 (2,714) (134.47)
TFG’s Performance
11
EBITDA & EBITDA Margin (%) Gross Profit & GP Margin (%) 2014 1Q2015 2Q2015 3Q2015 4Q2015 2015
Gross Profit (THB Million) 1,947 (374) (224)
- 99
(45) (741) Gross Profit Margin (%) 11% (9)% (6)% (2)% (1)% (4)% 2014 1Q2015 2Q2015 3Q2015 4Q2015 2015
EBITDA (THB Million)
2,018 (291) (217) (94) (91) (696)
EBITDA Margin (%)
12%
- 7%
- 5%
- 2%
- 2%
- 4%
TFG’s Performance by segment
YEAR 2015 YEAR 2014 Poultry Swine Feed mill Others Total Poultry Swine Feed mill Others Total Revenues from sales of goods 11,038 4,581 1,735 10 17,365 12,365 3,568 1,105 29 17,067 Cost of sales of goods (12,437) (4,035) (1,625) (9) (18,106) (11,462) (2,654) (978) (26) (15,121) Gross profit (loss) (1,399) 546 110 1 (742) 903 914 127 3 1,947 Gross profit margin
- 13%
12% 6% 8%
- 4%
7% 26% 11% 10% 11%
Unit: THB Million
12
Sales volume by segment
Sales volume – Poultry Sales volume – Swine Sales volume – Feed
- Sales volume of chicken sold increased from 281,908 tonnes in year
2014 to 288,046 tonnes in 2015 primarily due to the increase in farm production output and slaughterhouse capacity to support export volume.
- The price of chicken decreased from Baht 40.84/kg in the year 2014 to
Baht 35.98/kg in 2015
- Sales volume of swine sold increased from 47,908 tonnes in year
2014 to 64,909 tonnes in year 2015 due to additional capacity and productivity.
- The price of swine decreased from Baht 69.96/kg in year 2014 to Baht
59.84/kg in year 2015 Unit: Tonnes
147,153 130,999 98,577 79,892 93,008 2011 2012 2013 2014 2015 93,794 155,041 271,885 281,908 288,046 2011 2012 2013 2014 2015 Average Selling Price (THB/Kg) 42.07 33.30 40.39 40.84 35.98 16,962 38,199 44,874 47,908 64,909 2011 2012 2013 2014 2015 Average Selling Price (THB/kg) 57.34 48.71 61.21 69.96 59.84 13
Distribution Channel
Channel Revenue Volume THB Million % Tonnes % Station and Branch 1,338 13% 33,303 12% Export 821 8% 8,907 3% Industrial and Modern Trade 1,711 17% 32,041 11% Wholesales 6,483 63% 213,796 74% Total 10,354 100% 288,046 100%
Poultry Business - Distribution Channel by Volume
Live pig 97% Part 3%
Swine Business - Distribution by Volume
Channel Revenue Volume THB Million % Tonnes % Live Pig 3,760 97% 63,117 97% Part 135 3% 1,792 3% Total 3,895 100% 64,909 100%
14
Processed Food - Sausage
All volume numbers in tonnes; all revenue figures in THB Million unless otherwise stated
- Enter into processed food to enable higher margins and greater
product diversification
- Started sales of chicken sausage in March 2015 by OEM
- Sale Volume of Chicken Sausage in 2015 was 385 tonnes
- Revenue of Chicken Sausage in 2015 was THB 25 million
- Sell processed chicken sausage to our customers under “Thai
Aroi” product name with lotus flower symbol
- Launch chicken sausage factory in April 2016 to add value of
carcass
15
Financial Status
16
Net Debt/ Equity
Interest Bearing Debt for the Year 2015 : THB 6,276.6 million
Bank
- verdrafts and
short term loans, 4,874 Current portion of long term loans, 470 Long term loans, 561 2.8 4.0 3.1 2.4 1.7 2011 2012 2013 2014 2015
Cost of Debt 2013 2014 2015 OD and ST- Loan 3.44 – 5.50 1.30 – 7.78 1.30 – 5.00 LT - Loan 4.75 – 5.63 4.75 – 5.63 4.53 – 5.65
Future Plan
Section 3
Capital expenditure
Historical and planned capital expenditure
18
- 1 chicken slaughterhouse
- 7 breeder chicken farms
- 3 hatcheries
- Construction of 1 feed mill
- Completion of feed mill
- 3 breeder chicken farms
- 1 hatchery
- 1 chicken slaughterhouse
- Completion of chicken
slaughterhouse
- Completion of 1 breeder chicken
farm and 1 hatchery
- 1 layer chicken farm
- 2 parent pig farms
- 1 grandparent pig farms
- Conversion of one breeder chicken
farm into layer chicken farm All figures in THBm unless otherwise stated (a) Note that the capital expenditure of 2015E-2017E does not included the capital expenditure of existing projects
(a)
Projects: 2016 – 2018E Purchase new machinery at chicken slaughterhouses in Kanjanaburi and Prajinburi to support future export business Construct and operate a great-grandparent pig farm in Sa Kaeo Construct and operate a breeder chicken farms (6 houses) Construct and operate chicken sausage facility in Thailand Improvement and expansion capacity of existing feed mill at Supanburi Joint venture with other investor (Japanese) to construct and operate Further factory at Karnchanburi Expansion 5 parent pig farms and pig contract farming Construct and operate a pork sausage factory (Studying process) Construct and operate a pet food factory (Studying process)
1,009 1,605 1,650 882 1,001 2,620 2011 2012 2013 2014 2015 2016E - 2018E
Cost reduction
- Reduce cost of feed mill production which is total amounted 60% of total TFG’ cost, by the following
action;
- Reduce cost of imported raw materials which are feed additives, vaccine, soy bean meal and
soy bean
- Reduce cost of local raw material which is corn
- Modification of feed formula (Both chicken feed and swine feed)
- Increase in feed mill production efficiency at Suphanburi and Kabinburi
- Reduce cost of raising chicken by increase in broiler production and hatchery efficiency, contract
farm condition adjustment such as transportation
- Reduce cost of raising pig by FCR (Feed Conversion Rate) improvement, decrease in death or
- ther loss of pig and quality improvement
- Reduce cost of chicken slaughterhouse at Suphanburi and Kabinburi
- Reduce cost of inventory by focusing in inventory management
- Reduce cost of selling and administrative expenses
- Reduce cost of transportation of feed mill, raw material and chicken meat/ parts
- Reduce personnel cost by reorganization policy
Turnaround plan for the year 2016
19
Increase revenue and mitigate risk from fluctuations in chicken price
- Increase in export sales volume from 9,000 tonnes in year 2015 to 32,000 tonnes in year 2016
- Entered into a 45.7% joint-venture in Seven Foods to expand our sale volume in Japan
- Launch chicken sausage factory in April 2016 to support lower price of carcass
- Penetrate the industrial market
- Increase the number of station and sales branches
- Launch new sale channel via restaurant chain and food service
- Continue to expand broiler production capacity and also reduce production cost per chick
Increase in fatten pig raising capacity in Thailand from 45,000 pigs per month to 54,000 pigs per month
- Increase sale volume of swine parts by selling to Tesco Lotus
- Expand swine production capacity in Vietnam, this will help to reduce production cost and gain more
profit in year 2016 The Company plan to increase sale volume of feed from 9,000 tonnes per month to achieve 16,500 tonnes per month to external sales
Turnaround plan for the year 2016
20
TFG Investment Highlights
21
- Enter into a joint-venture with a well-known Japanese company to produce cooked chicken products
for export to Japan, European Union and also domestic market
- Invest on pork sausage factory
- Invest in pet food factory
- Expand 5 parent pig farms
- Increase in fattening pigs farm