Analyst Presentation Financials as of 30 September 2015 Disclaimer - - PowerPoint PPT Presentation

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Analyst Presentation Financials as of 30 September 2015 Disclaimer - - PowerPoint PPT Presentation

Thai Foods Group Analyst Presentation Financials as of 30 September 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


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Analyst Presentation

Thai Foods Group

Financials as of 30 September 2015

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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

listing on a stock exchange. This Analyst Presentation is intended only for the recipients thereof, and may not be copied, reproduced, retransmitted or distributed by a recipient to any other persons in any manner. This Analyst Presentation may not be distributed to the public in any jurisdiction where a registration or approval is required. No step have been or will be taken in any jurisdiction (other than Thailand) where such steps would be required. The issue of the subscription for or the purchase of the securities may be subject to specific legal or regulatory restrictions in certain jurisdictions. The company assumes no responsibility for any violation of any such restriction by any period This Analyst Presentation may contain forward-looking statements that may be identified by their use of words like “plans”, “expects”, “will”, “anticipates”, “believes”, “intends”, “depends”, “projects”, “estimates” or other words of similar meaning and that involve risks and uncertainties. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, product development, market position, expenditures and financial results, are forward-looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. The Company does not guarantee that these assumptions and expectations are accurate or will be realized. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Although the Company believes that such forward-looking statements are based on reasonable assumptions, it can give no assurance that such expectations will be met. Representative examples of these factors include (without limitation) general industry and economic conditions, political uncertainty in Thailand, poultry and swine prices, competition from other companies, shifts in customer demands, customers and partners, changes in operating expenses, governmental and public policy changes and the continued availability of financing in the amounts and the terms necessary to support future business. You are cautioned not to place undue reliance on these forward-looking statements, which are based on current views of the Company’s management concerning future events. The Company does not assume any responsibility to amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events, or otherwise. The information in this Analyst Presentation has not been independently verified, approved or endorsed by any manager, bookrunner, advisor or underwriter retained by the Company. No representation, warranty, express or implied, is made as to, and no reliance, in whole or in part, should be placed on, the fairness, accuracy, completeness or correctness of the information and

  • 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.

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Agenda

2

Financial Highlights Future Plan Q&A Business Overview

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Business Overview

Section 1

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Symbol TFG Industry/ Sector Agro & Food Industry / Food & Beverage Share Outstanding 5,100 million share @ 1 Baht per share Closed Price THB 1.58 per share (16/11/2015) Market Cap. THB 8,058 million share % Free Float 20.27% Dividend Policy Not less than 50% 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 5 Shareholders

1) Teawsomboonkij Group 79.07% 2) Mr. Ake Ngampanthip 1.26% 3) KT ZMICO Securities Company Limited 1.16% 4) Mr. Chansing Malhota 0.50% 5) Mrs. Amornthip Detchthanasead 0.45%

TFG Profile

4

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Our history and major milestones

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2001 2003 2004 2007 2010 2011 2012 2013 2014

Established as Thai Food (2001) Co., Ltd. Commenced chicken slaughterhouse operations with a capacity of 139,000 chickens per day 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 Established first great- grandparent pig farm with a capacity of 450 pigs 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. 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 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 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

Kick-start export of chicken meat to Japan and Europe and domestic sales of chicken sausage Listed in SET on 8 Oct 2015 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
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Overview of corporate structure

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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. Not currently operating but expected to 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

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Vertical Integrated Business Model

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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

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Financial Highlights

Section 2

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Summary of financial performance

Consolidated revenue EBITDA Profit after tax

9 803 (999) 1,874 1,767 (291) (217) (94) 2011 2012 2013 2014 1Q2015 2Q2015 3Q2015 EBITDA margin (%) 11% (11)% 12% 10% (7)% (5)% (2)% 561 (1,388) 1,034 916 (480) (449) (276) 2011 2012 2013 2014 1Q2015 2Q2015 3Q2015 Net Profit margin (%) 8% (15)% 7% 5% (12)% (11)% (6)%

4,362 5,560 11,602 12,365 2,770 2,566 3,165 973 1,861 2,751 3,568 989 1,044 1,372 1,821 1,652 1,381 1,105 312 414 402 36 13 3 4

7,156 9,073 15,770 4,084 4,027 4,943

2011 2012 2013 2014 1Q2015 2Q2015 3Q2015 Poultry Swine Feed Others

2011 - 2014 CAGR:

  • Total: 34%
  • Poultry: 42%
  • Swine: 54%
  • Feed: (15%)
  • Others: na

6% 21% 17% 21% 24% 26%

17,067

29

61% 25% 18% 9% 8% 10% 8% 61% 74% 72% 68% 64% 64% 28% 14%

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Sales & Gross Profit by Business

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  • Sales volume of chicken sold was increasing from 69,926.4 tonnes in third quarter of 2014 to 71,467.5 tonnes in the same period of the 2015 primarily due to the

improvement in production output at our slaughterhouse to support export volume.

  • Sales volume of pigs sold was increasing from 12,444.8 tonnes in the third quarter of 2014 to 16,692.5 tonnes in the same period of the 2015 due to additional capacity

and productivity.

  • The increased of chicken price from Baht 37.1/kg in second quarter of 2015 to Baht 39.1/kg in third quarter of 2015
  • The increased of live pig price from Baht 61.3/kg in second quarter of 2015 to Baht 65.5/kg in third quarter of 2015

2,770 988 315 4,073 2,565 1,044 417 4,026 3,165 1,372 406 4,942 Poultry Swine Feed & Other Total 1Q2015 2Q2015 3Q2015

YoY Comparison QoQ Comparison

3,422 953 287 4,662 3,165 1,372 406 4,942 Poultry Swine Feed & Other Total 3Q2014 3Q2015

GPM Poultry Swine Feed & Other Total 3Q2014 8% 25% 2% 11% 3Q2015 (11)% 16% 7% (2)% GPM Poultry Swine Feed & Other Total 1Q2015 (14)% (1)% 9% (9)% 2Q2015 (14)% 11% 5% (6)% 3Q2015 (11)% 16% 7% (2)%

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EBITDA Level

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  • 94
  • 4

25 2 83 12

EBITDA 3Q2015

Allowance/ (reversal) for doubtful accounts Loss from Decrease in value of inventories Retirement benefit obligation expense Unrealized loss (gain) on exchange rates EBITDA 3Q2015 after adjustment EBITDA 2Q2015 Poultry Operation Swine Operation Feed & Other Operation Other Revenue SG&A Depreciation & Amortization EBITDA 3Q2015 (217) (94) 14 101 21 24 32 ( 69) EBITDA 2Q2015 vs. EXITDA 3Q2015 EBITDA 3Q2015 after adjustment

Non-cash item

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Financial Status

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Bank overdrafts and short term loans, 86.4% Current portion of long term loans, 5.7% Long term loans, 7.9% Net Debt/ Equity(*)

Cost of Debt 2013 2014 9-Month 2015 3.4% 3.6% 3.8%

Remark:

(*) Net Debt = Debt – Cash and cash equivalent Equity refers to total shareholders’ equity

1.1x 2.9x 2.3x 1.8x 3.0x 1.5x 2011 2012 2013 2014 9M-2015 Post IPO

Interest Bearing Debt : THB 8,718.9 million

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Future Plan

Section 3

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Capital expenditure

Historical and planned capital expenditure Projects: 2015E – 2017E 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 pig slaughterhouse Construct and operate 5 parent pig farms Construct and operate chicken sausage facility in Thailand Construct and operate a new feed mill at Prajinburi and improvement of existing feed mill at Supanburi Improvement of breeder chicken farms

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  • 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)

1,009 1,605 1,650 882 681 2,620 2011 2012 2013 2014 9M-2015 2015E - 2017E

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Key Drivers

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Capture export opportunities through direct and alliances Efficient asset utilization to support future growth On-going cost reduction through extensive in-house research & development efforts Enter into processed food to enable higher margins and greater product diversification

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Q&A