S. Khonkaen Foods Public Company Limited From Farm to Table FY2012 Results Briefing Analyst & Investor Update Analyst & Investor Update
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AGENDA AGENDA Introduction Business Overview Business Overview Financial Review SORKON the Future Questions and Answers
Introduction Introduction
GROUP GROUP STRUCTURE STRUCTURE S. KhonkaenFoods Public Co S. KhonkaenFoods Public Company Limited (Sorkon) mpany Limited (Sorkon) 99.33% 99.33% • Production and Distribution of Pork (Traditional Thai Food), Meat Snacks, Ready-to-Eat-Frozen Foods Mahachai Food Processing Processing • Distribution of Processed Seafood Balls • Distribution of Processed Seafood Balls Company Limited • Quick-Service Restaurants (MFP ) Mahac Mahachai ai Food Proces Food Processi sing Company Company Limit Limited (MFP d (MFP ) ) S KHONKAEN S. KHONKAEN KHONKAEN FOODS KHONKAEN FOODS FOODS FOODS • Production of Processed Seafood Balls P d ti f P d S f d B ll PUBLIC COMPANY LIM PUBLIC COMPANY LIMITED TED (SORKON) (SORKON) S. S.K. K.K. Food Company Food Company Limit Limited (SKK ed (SKKF) F) 99.68% 99.68% 100.0% 100.0% • Distribution of Processed Seafood (non ‐ modern trade outlets) Distribution of Processed Seafood (non modern trade outlets) S.K.K. Food S. Pasusat Company Company Limited (SKKF) Limited (SPS) S. Pasusat S. Pasusat Company Limited (SPS) ompany Limited (SPS) • Production & Distribution of Swine Farming FY2012 results and review investor and analyst meeting | | 05 05
KEY MILEST KEY MILESTONES ONES Sorkon acquires shares of its three subsidiaries equivalent to the BV as of end 2011 of end 2011. After restructuring, Sorkon directly fully owns these subsidiaries with no cross holdings 1995 1995 1995 1995 Opened a new Shifted products from subsidiary in Poland to Acquired land and being only souvenir to a distribute locally made machinery assets from popular daily consumed meat products Listed on the Stock NaraiInterfoodCo.,Ltd. meat snack under throughout g Exchange of Thailand Exchange of Thailand to expand capacity o e pa d capac y brand Entre e brand "Entre’e" 1984 1984 19 19 84 84 2007 2007 2007 2007 2011 2011 2011 2011 the EU 1993 1993 2005 2005 2010 2010 201 2012 Established in Thailand Settled production base Disposed of investment p as a distribution in Poland to serve the in See MoomMuang to company marketing the demand of Asia meat Thai Food Industry Co., To expand business to Thai native food product in European as Ltd. pig farming in order to well as Scandinavian integrate the whole countries. Increased registered process of its core p capital from THB 80 85 capital from THB 80.85 business mn to THB 242.5 mn FY2012 results and review investor and analyst meeting | | 06 06
KEY KEY HIGHLIGHTS HIGHLIGHTS Investment in Invest ment in Str Strong growth ong growth Fish ball production Fish ball production performance perfor ance Ability to Abili ty to pass pass capacity and capacit y and Frozen Foods Frozen Foods Frozen Foods Frozen Foods on costs to on costs on costs on costs to to end to end end end International Inter Inter International ional ional Robust balance Robust balance consumers consumer Stan Standard dard expansion to expansion to drive drive Strong position Str ong position sheet and prudent sheet and prudent manufa manufacturing ng growth growth in Thailand in Thailand and and financial financial practise practises export markets export markets managemen management • Management • Revenues • Domestic market • Sorkon’s majority • All of Sorkon’s • Investment of THB committed to maintaining increased 9% YoY share of 80% in market share allows manufacturing 250 mn in 2012 to an optimum level of an optimum level of on the back of both on the back of both modern trade sector in modern trade sector in it to pass on costs to it to pass on costs to facilities are of facilities are of expand fish ball expand fish ball financial leverage Traditional Thai and native foods category end consumers international production Seafood Balls standard especially • Financial flexibility • Worlds largest fish the ready to heat • Investment of THB allows us to expand • Net Profits ball manufacturer food factory has 50 mn to expand capacity and increased 82% YoY complied with the Frozen Foods investments where i t t h because of “BRC” (British necessary Sorkon’s strong Retailing • Aim to have 200 operating leverage Consortium) restaurants by 2015 • Generating strong and a robust balance standard cash flow from operations sheet FY2012 results and review investor and analyst meeting | | 07 07
Business Overview Business Overview
Strong Market Positioning in Core Businesses Pioneer in Meat-Base-Snack • S ORKON is the single largest producer in Meat-Based- • S ORKON is the largest player in Traditional Thai Foods and S nacks with strong brand recognition S eafood Balls market (together accounting for almost 80% • S S trong R&D and know-how trong R&D and kno ho of total sales) with more than 80% f l l ) i h h 80% market share in modern k h i d • Cost efficiency trade • Multi-brand/ multi-grade strategy, strong brand loyalty, Sales Mixed price leadership • Barrier to entry for new comers in modern trade segment QSR (high listing fee, high committed volume, and cost (hi h li ti f hi h itt d l d t Ready 1% efficiency) Meal Swine 7% 9% QSR – Zaap: Successfully Launched Snack Snack T di i Traditional l • Zaap has continuously gained its popularity from its four 6% flagship restaurants (3 in CBD); S oi Aree, S ilom, All S easons Thai Foods Building, and Bangplee. 43% • All 4 outlets have positive contribution margin Seafood Balls Balls 34% Niche Player in Ready Meal • Not competing in high competitive segments • A Niche player in few selected categories, i.e. • • Frozen Thai dessert “ tweet ” Frozen Thai dessert tweet • Yunnan stewed pork leg • Frozen facilities will serve our owned fast growing QS R FY2012 results and review investor and analyst meeting | | 09 09
PROCESSED FOOD MADE FROM PORK PROCESSED FOOD MADE FROM PORK (T (Tradi raditiona tional Thai l Thai Food) Food) Revenues a venues and G nd Gross Pr oss Profit M it Margins rgins Ke Key De Details tails ( Units in THB millions) Produced in Bangplee & NakonPathom 42.8% • 900.0 45.0% 37.4% 35.6% 800.0 40.0% 80% Domestic Market Share • 700.0 700 0 35 0% 35.0% Distributed through major retailers & convenience 600.0 30.0% • 500.0 25.0% stores w/ upcountry reps 791.5 400.0 776.5 20.0% 646.0 Exports to China, HK & Macau • 300.0 15.0% 200.0 10.0% OEM 7% ; Brand 93% • 100.0 5.0% Operating at 60% capacity, 50,000 t.p.a ‐ 0.0% • 2010 2011 2012 Consistent sales growth of 10% CAGR (from 2009) as • a result of retail spaces expansion and GDP Growth Brand Name(s) Brand Name(s) Food made S. Khonkaen • HuayKaew from Meat • Moo-dee • Bann Pai • Moo-Hoar • 3 RienThong • FY2012 results and review investor and analyst meeting | | 10 10
SEAFOOD BALLS SEAFOOD BALLS Key De Ke y Details tails Revenues a Revenues a venues and G venues and G nd Gross Pr nd Gross Pr oss Profit oss Profit it Margins it Margins Margins Margins Manufactured by MFP ( Units in THB millions) • Worlds largest manufacturer of fish balls • 700.0 30.0% 24.9% Distributed through major retailers & convenience stores • 22.7% 600.0 25.0% w/ upcountry reps 18.7% 18.7% 500 0 500.0 Exports to USA, Europe, Japan, Korea (15% of 20.0% • 400.0 production) 15.0% 618.4 300.0 534.0 Domestic sales through fresh food markets 50%, modern 467.9 • 10.0% 200.0 trade 35% 5.0% 100.0 OEM 4% ; Brand 96% • ‐ 0.0% Operating at 100% capacity, 6,500 t.p.a. • 2010 2011 2012 Strong growth at 15% CAGR (from 2009) • Brand Name(s) Brand Name(s) Chiu Chow Yaowarat • • Kwang Chow Heng Heng • • Kowloon K l K i Z Kai-Zen • • Seafood Mahachai YUMI • • Balls O-Deng • FY2012 results and review investor and analyst meeting | | 11 11
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