SUSTAINABLE GROWTH VERTICAL INTEGRATION OF CHICKEN 100% OWN FARM POLICY ANALYST MEETING NO.3/ AUGUST 2014

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1 SUSTAINABLE GROWTH VERTICAL INTEGRATION OF CHICKEN 100% OWN FARM POLICY ANALYST MEETING NO.3/ AUGUST

2 GFPT at Glance GFPT Public Company Limited (TB:GFPT), founded in 1981 with headquarters in Bangkok, Thailand, is one of the Thailand s chicken processors and marketers. The Company is specialized in fully vertical integrated chicken production starting from feed mill, grandparent breeder farm, parent breeder farm, broiler farm, chicken processing plant, and further processing plant. GFPT produces a wide variety of agricultural product including: animal feed, aqua feed, live broiler, chicken meat, chickenbased and prepared food products. GFPT provides products and services to customers throughout Thailand and international markets. Through its Core Values and Code of Conduct, GFPT strives to operate with integrity and trust and is committed to creating value for its shareholders, customers, and employees. 2

3 V I S I O N With the commitment to become one of the leading industries of fully food processing chicken meat and livestock products Enhance product quality to the international standards Confidence through the traceability system New product development using modern technology Empowering people to become the expert Attention to the needs of customers Build strong relationship among partners for long term Build awareness and responsible to society 3

4 Today s Discussion Financial Highlights Key Statistics Market Outlook GFPT Profile 4

5 2Q 2014 Financial Highlights Revenue (THB Million) 4,600 4,500 4,400 4,300 4,200 4,100 4,000 3,900 3,800 2Q 2014 Revenue = THB 4.50 billion ,078 4,498 2Q2013 Chicken Processing Farm & DOC Processed Food 87 Feed % YoY 250 2Q Q 2014 Revenue by Business Revenue from chicken processing was THB 1,873 million, an increase of THB 82 million or 4.60% from 2Q2013 due to increasing in chicken export volume of 1,300 tons or 22.81%. Live birds sales was THB 1,160 million in 2Q2014, increased THB 227 million or 24.30% from 2Q2013 since live birds sold to GFN was increased. Revenue from processed food increased THB 23 million or 10.91% from 2Q2013 since higher sales volume of processed chicken food. Feed sales increased THB 87 million or 7.60% from 2Q2013, primarily from rise in animal feed sales volume. Revenue Breakdown by Business Segment Business Segment of GFPT and its subsidiaries 2Q Q 2013 Changes THB million % THB million % THB million % Chicken Processing 1, , Feed 1, , Farm & DayOldChicks 1, Processed Food Total Sales 4, ,

6 2Q 2014 Financial Highlight 6 In million Baht 2Q Q 2013 Chg. %Chg Revenue 4,498 4, % COGS (3,842) (3,639) % Gross Profit % Other Income (35) (38.78%) SG&A (281) (248) % Profit from JV % EBIT % Financial Cost (39) (48) (9) (19.25%) Tax Expense % Minority Portion (5) (3) % Net Profit for GFPT % EPS * (THB/Share) Gross Profit Margin 14.58% 10.78% 3.80% EBIT Margin 11.37% 8.46% 2.91% Net Profit Margin 10.70% 7.45% 3.25%

7 6M 2014 Financial Highlight 7 In million Baht 6M M 2013 Chg. %Chg Revenue 8,517 7, % COGS (7,277) (7,163) (114) 1.59% Gross Profit 1, % Other Income (87) (44.64%) SG&A (545) (494) (52) 10.46% Profit from JV % EBIT % Financial Cost (77) (99) (22) (22.19%) Tax Expense % Minority Portion (7) (4) % Net Profit for GFPT % EPS * (THB/Share) Gross Profit Margin 14.56% 9.51% 5.05% EBIT Margin 11.32% 6.89% 4.43% Net Profit Margin 10.63% 5.65% 4.98%

8 2,500 2,000 1,500 1, Financial Highlights GP Margin EBITDA Margin 15% 16% 15% 14% 15% 11% 6% 1,774 2,018 2, , Q13 2Q14 Gross Profit (THB million) Gross Margin (%) 20% 15% 10% 5% 0% 2,500 2,000 1,500 1, % 14% 14% 13% 13% 14% 5% 1,623 1,803 1, , Q13 2Q14 EBITDA (THB million) EBITDA Margin (%) 20% 15% 10% 5% 0% 1,600 1,400 1,200 1, NP Margin 11% 9% 9% 8% 9% 7% 2% 1,068 1,166 1, , Q13 2Q14 Net Profit (THB million) NP Margin Note 12% The net profit in 2Q2014 was THB 481 million or 0.38 baht per share, an increase of THB 177 million or increased by 58.31% 10% from the net profit of THB 304 million in 2Q2013. The drivers were higher sales volumes, lower cost of goods 8% sold, and increase of participating profit from associated 6% companies Gross margin improved to 14.58% from 10.78% in 2Q % Other income decreased THB 35 million from 2Q % The share of profit from associates of the Company increased THB 17 million mainly from the hike in export 0% volume of frozen chicken meat to the EU market and the higher production capacity of cooked chicken products. 8

9 1,600 1,400 1,200 1, Financial Highlights EPS (THB per share) Return on Asset (%) ,068 1,166 1, , Q13 2Q14 16, % 14, % 12, % 10,000 80% 8,000 60% 6,000 40% 4,000 20% 2,000 0% 0 13% 13% 13% 12% 12% 2% 8,166 9,216 10,068 13,095 13,022 13, F 14% 12% 10% 8% 6% 4% 2% 0% Net Profit (mn Baht) EPS (Bt/Share) Dividend Payout Ratio (%) Total Assets (mn Baht) ROA (%) Remark: 2014F figure is annualized based on Q1Y2014 data % 34% 34% % 29% 29% 29% % Dividend (Bt/Share) Dividend Paid Out Ratio (%) Remark: The Company changed its Par Value from 10 Bt to 1 Bt since May 2010; thus, all per share data adjusted to 1 Bt per share for comparison purpose. 40% 35% 30% 25% 20% 15% 10% 5% 0% 9

10 Financial Highlights Balance Sheet Book Value (THB per share) 14,000 1% +5% 9,000 8, ,000 10,000 5,476 4,655 4,646 5,076 4,848 3,071 7,000 6,000 5,000 4, ,840 3,000 8,000 6,000 2, ,000 1,000 4,552 5,377 5,984 5,846 7,376 7,803 7, Q14 2Q14 Note 4,000 2,000 7,619 5,846 8,376 7,376 8,912 7,848 2Q2014, total assets of the company equal to THB 13,759 million including THB 4,848 million in current assets, THB 5,978 million in PP&Enet, THB 1,778 million in investments in associated companies, THB 447 million in grandparent chicken and parent chicken ,095 mm Bt Fixed Assets Equity Current Liabilities ,022 mm Bt Current Asset LT Liabilities 2Q14 13,759 mm Bt Total assets increased in amount of THB 738 million or 5.67% from 31 December 2013 primarily from the increase in inventoriesnet THB 227 million, the PP&Enet increased THB 291 million. However, trade & other receivables net decreased THB 68 million. 10

11 Financial Highlights 2Q 2014 Total Liabilities = THB 5,912 million InterestBearing Debt (million THB) (THB Million) 7, Shortterm Loan 1,590 6,000 5,000 4,000 Current Portion of LtLoan 230 3, Long Term Loan 2, ,000 1,500 2,000 2,500 Net Debt to Equity & D/E Q14 2Q14 Debt/Equity (x) Net Debt/Equity (x) 2, ,000 2,832 3,009 2,986 5,773 4,207 4, F Net Debt Net Debt/EBITDA Remark: 2014F figure is annualized based on Q2Y2014 data. Note 2Q2014, the Company has total liabilities of THB 5,912 million comprising of noninterestbearing liabilities and interestbearing debt in amount of THB 1,752 million and THB 4,160 million. The interestbearing debt consists of shortterm borrowings of THB 1,590 million, current portion of THB 230 million, and longterm borrowings of THB 2,340 million. The net debt to equity of the Company was considerably low at 0.53:1. All loans are in THB currency only. The Company has no exposure in foreign currency borrowings. 11

12 (THB Million) 2,500 2,000 CAPEX & Growth Plan Investments THB 800 million ,500 1, GP Farm Broiler Farms Sausage Plant (expansion) Breeder Stocks Fixed Assets Associates & JV Broiler Expansion Plan Houses 145,000 bpd 190 Houses 210,000 bpd 240 Houses 300,000 bpd 290 Houses 400,000 bpd 12

13 KEY STATISTICS 13

14 Chicken Meat Business Export (tons) Indirect Export (tons) 20,900 21,200 18,600 22,500 16,200 18,400 16,500 16,500 14,900 14,000 5, % 7,000 10% 4,000 3,600 13% 1% 34% 33% 21% 20% 13% 11% 1% 10% Q13 2Q14 Domestic (tons) Q13 2Q14 FX Rate (Bt/USD) 83,600 85,800 72,900 66,500 59, % 13,800 17,100 16% 2% 15% 9% 10% Q13 2Q Q13 2Q14 Source: Bank of Thailand 14

15 Feed Business Animal Feed (tons) 543, , , , ,400 +8% 127, ,100 9% 10% 15% 13% 3% Q13 2Q14 Fish Feed (tons) Shrimp Feed (tons) 51,800 52,900 57,100 49,500 51,400 55,900 57,000 56,400 60,900 46,000 2% 12,400 12,200 12% 11,200 9,900 13% 2% 8% 13% 4% 18% 2% 1% 8% 24% Q13 2Q Q13 2Q14 15

16 MARKET OUTLOOK 16

17 Commodity Price Corn & Soybean Meal (THB/Kg.) Corn Soybean Meal Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 DayoldChick (THB/chick) Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 Source: Thai Feed Mill Association 17

18 Commodity Price 50.0 Broiler at Farm Gate (THB/Kg.) Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 Source: Thai Feed Mill Association 6,000 Chicken Export (USD/ton) 5,000 4,000 4,200 4,050 4,050 4,500 4,400 4,500 4,900 4,800 4,900 4,800 5,000 5,000 4,900 4,900 4,900 4,700 4,200 3,900 4,000 4,100 4,200 4,200 4,600 4,800 4,500 4,600 3,000 3,200 3,400 3,500 3,300 2,000 1,000 Cooked JP EU Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 Source: Thai Broiler Export Association 18

19 40 Years of Thai Chicken Meat Export (F) 700,000 Estimated 2013 Forcast 2014 Change 13/14 MT Mil. Baht MT Mil. Baht (%) 630,000 MT 600,000 Product Raw 95,000 7, ,000 14, Further (Cooked) 435,000 61, ,000 68, ,000 MT 552,362 MT 500, ,000 Total 530,000 69, ,000 83, Market Japan 220,000 33, ,000 42, EU 245,000 29, ,000 30, Others 65,000 6,760 70,000 10, Total 530,000 69, ,000 83, % Bird Flu 218,000 MT 71% 300, ,000 29% 29% 100,000 0 Source : Thai Broiler Processing Exporters Association Raw Chicken Cooked Chicken Total Chicken 19

20 Global Broiler Meat Market THAILAND: The 11th Global Chicken Producer 2013 broiler production = 1,500,000 tons The 4th Global Chicken Exporter 2013 broiler meat export = 504,000 tons Broiler Meat Production & Export Selected Countries (2013) (Thousand Tons) 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 USA China Brazil EU27 Argentina Turkey Thailand 20% 3% 28% 11% 16% 21% 34% Production Export Source: USDA and Thai Broiler Processing Exporters Assoc. Global Production [Y2013 = 82,539,000 tons] (Thousand Tons) USA 16,976 China 13,350 Brazil 12,308 EU 9,800 India 3,450 Russia 3,010 Mexico 3,002 Argentina 2,060 Turkey 1,760 Indonesia 1,550 Thailand 1,500 Global Export [Y2013 = 10,237,000 tons] (Thousand Tons) Brazil 3,482 USA 3,340 EU 1,083 Thailand 504 China 420 Turkey 362 Argentina 324 Canada 150 Ukraine 141 Belarus

21 Global Broiler Meat Market Global Import [Y2013 = 8,655,000 tons] (Thousand Tons) Global Dom. Consumption [Y2013 = 82,539,000 tons] (Thousand Tons) Japan 854 USA 13,683 Saudi Arabia 820 China 13,174 Mexico 682 EU27 9,388 Iraq 673 Brazil 8,829 EU mexico 3,679 Russia 540 Russia 3,520 South Africa 355 India 3,445 Venezuela 341 Japan 2,201 Angola 321 South Africa 1,753 Hong Kong 272 Argentina 1,738 Thai Broiler Export Market Thai Broiler Export by Product Others 12% EU 46% Japan 42% Cooked 82% Raw 18% Source: USDA and Thai Broiler Processing Exporters Assoc. 21

22 GFPT Profile Industry / Sector Symbol GFPT Agro & Food Industry / Agribusiness Corporate Governance Score Very Good [80 89 CG Report Score] Closed Price (30 Jun 2014) THB per share (52 week High / Low: 14.90/ 9.30) Share Outstanding Market Cap. 1, million 1 Baht per share (4,374 shareholders as of 05 Mar 2014) THB billion % Free Float 44.00% % Foreign Shareholder / %Limit 16.43% / 49.00% Dividend Policy Not more than 50% of net profit of Company's separated financial statement after deductions of any reserved portion required by law or the Company (with additional conditions) Shareholding Structure Top 5 Shareholders Local Individuals 17% Sirimongkol kasem Family 56% Local Funds 10% Foreign Funds 16% 1) Mr. Sujin Sirimongkolkasem 17.77% 2) Mr. Prasit Sirimongkolkasem 17.55% 3) Mr. Virach Sirimongkolkasem 14.36% 4) Thai NVDR Company Limited 6.49% 5) Nichirei Foods Inc. 4.52% Foreign Individuals 1% Remark: Shareholding structure as of 05/03/

23 GFPT Timeline GFPT Initially established 1981 Listed in the Stock Exchange of Thailand 1992 Stock split from THB 10 to THB 1 per share 2010 Name change of Subsidiary (KT) from Krungthai Feedmill to Krungthai Food % in FKT (Breeder farm) 99.99% in MKS (Broiler farm) % of McKey (Further plant) 2008 New feed mill plant Cholburi area 49% of GFN (chicken processing and further processing plant) % in GFF (Sausage plant) 65% in KT (Feed mill) % of GP (GP farm) 2012 Capital Injection in GFN 23

24 Group Structure 5 Subsidiaries 2 Joint Ventures 24

25 Breeder Feed Vertical Integration Feed mill (Feed) 2 Feed Mills KT1: Produce animal feed and aqua feed for domestic market KT2: Produce Broiler Feed for its own integration only Broiler Feed GFPT Capacity (2013): Animal Feed: 500,000 tons Aqua Feed: 150,000 tons Broiler Feed: 512,000 tons GP Farm: 1.1 mn PS chicks Breeder Farm: 92 mn chicks Broiler Farm: 73 mn birds Chicken Processing: 47 mn birds Further Processing: 24,000 tons Processed Food: 9,000 tons GFN: Chicken Processing: 32 mn birds Further Processing: 26,000 tons McKey: Further Processing: 25,000 tons Primary Breeder Farm/ Hatchery (PS Chicks) Breeder Farm / Hatchery (Chicks) Broiler Farm (Live Chicken) Primary Processing (Chicken Meat & Chicken Parts) Further Processing / Food Processing 0 25 wks rearing wks laying 3 wks hatching 0 25 wks rearing wks laying 3 wks hatching 6 wks raising to reach market weight Broiler Production = 9 months (PS Chicks Broiler) GP: 1 farm Evap. Closed System Biosecurity Import GP chicks FKT: 5 farms 3 hatcheries Evap. Closed System Biosecurity MKS: 14 farms Evap. Closed System Biosecurity 100% Company Owned Farm 2 Primary Plants Chicken meat are sold to export market and OEM factory in Thailand Byproducts are sold in domestic market 3 Cooking Plants Cooked products are sold to international markets (JP, EU, and others) 1 Sausage Plant Sausages are sold in domestic market under GFF Brand Source: GFPT Annual Report

26 Feed Product Line Animal Feed Fish Feed Shrimp Feed Farm.. DayoldChick Food Live Broiler Chicken Meat Cooked Product Sausage

27 Financial Highlights Y2013 Revenue = THB billion Y2013 Revenue By Business Revenue (THB Million) 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 5,377 6,621 7,221 8, % 16,699 15,370 14,214 12,472 10,99611, Food 46% Feed 31% Farm 23% Y2013 Revenue By Product Revenue (THB Million) +8.65% 18,000 16,699 16,000 15,370 14,000 12,000 10,000 8,000 6,000 4,000 2, % 7,876 6, % 5,294 4, % 3,664 4,005 Consolidated Chicken Meat Feed Chicken Farm Processed Food 5% Chicken Domestic 10% Animal Feed 16% Chicken Indirect Export 10% Fish Feed 7% Chicken Export 20% Shrimp Feed 8% Live Chicken 22% DOC 1% 27

28 Market Position: Y th in Thai Chicken Export 6 th in Thai Broiler Production GFPT Group = 7% GFPT Group = 14% Export Destination Export by Product Belgium England Netherlands Germany France Ireland EU 51% Others 1% Singapore Russia Cooked 89% Raw 11% JP 48% Source: Thai Broiler Processing Exporters Association Note: 2013 Thai Broiler Production = 1,168 million birds/year 2013 Thai Broiler Export = 525,217 tons/year 28

29 Thank You GFPT Public Company Limited 312 Rama 2 Road Bangmod Jomthong Bangkok Thailand Phone: Fax: For further information & enquiries, please contact our Investor Relations Team 1. Jutamas Ingpochai, Ph.D. jutamas@gfpt.co.th Veera Titayangkaruvong veeratita@gfpt.co.th ext

30 Disclaimer This presentation may include forwardlooking statements representing expectations about future events or anticipated result based on factors such as economic scenario, market conditions and expected future events, over many of which the Company has no control. This material includes forwardlooking statements subject to risks and uncertainties, which are based on current expectations and projections about future events and trends that may affect the Company s business. These statements include projections of economic growth, as well as information about competitive position, the regulatory environment, potential opportunities for growth and other matters. Several factors may adversely affect the estimates and assumptions on which these statements are based. Among the factors that may lead to materially different between actual results and anticipated results expressed in such forwardlooking statements include: (i) the effect of, or changes in, general economic conditions of Thailand and other major trading countries such as GDP growth rate, interest rate, foreign exchange rate, import/export restriction, labor wage, and unemployment rate; (ii) fluctuations in the cost and availability of inputs and raw materials, such as feed grains (including corn and soybean meal); (iii) market conditions for finished products, including competition from other global and domestic food processors, demand, supply and pricing of competing products and alternative proteins, and changes in consumer preference and diets; (vi) outbreak of a livestock disease such as avian influenza (AI), which could have an adverse effect on livestock we own, the availability of livestock we purchase, consumer perception of certain protein products or our ability to access certain domestic and foreign markets; (v) issues related to food safety, including costs resulting from product recalls, regulatory compliance and any related claims or litigation; and (vi) compliance with and changes to regulations and laws (both domestic and foreign), including changes in accounting standards, tax laws, environmental laws, agricultural laws and occupational, health and safety laws. The content and forwardlooking statements state within this presentation only as the date they made. The Company undertakes no responsibility on changes after that date stated herein. The material set forth herein is for informative purposes only. It should not be taken as an offer of securities for sale. 30