Thai Union Group 2016 Sales Rise 7.3 percent to Record THB 134 Billion

Caption —Thai Union Global Innovation Incubator researchers at work.

• 2016 net profit of THB 5,254 million, stable year-over-year
• 2016 sales of THB 134,375 million  (USD 3.8 billion), up 7.3 percent year-over-year
• Substantial impact from the raw material cost, offset by prudent cost control, led to a margin soft landing

21 February 2017, Bangkok — Thai Union Group PCL reported a 7.3 percent year-over-year rise in 2016 consolidated sales to a record THB 134,375 million (USD 3.8 billion). This is the seventh consecutive year of record sales.

Gross profit rose by 2.2  percent, while the gross profit margin was 14.8 percent, compared to 15.6  percent as reported in 2015. Continued high salmon prices and higher than expected tuna prices contributed to the weaker margin. This was partly

offset by stringent cost controls with 2016 Selling, General & Administration to sales ratio coming in at 9.8 percent, the lowest level in three years. As a result, net income remained stable with only 0.9  percent year-over-year reduction to THB 5,254 million.

For 2016, sales in the U.S. continued to play an important role in the company’s revenue, accounting for 39 percent of total sales. Thailand’s domestic market accounted for 8  percent of total sales, while Europe contributed 33  percent of sales, widening from 29  percent in full-year 2015. Japan contributed 6 percent of total sales.

Thiraphong Chansiri, CEO of Thai Union Group noted, “Thai Union’s 2016 results shows that demand for our products remains strong.Despite challenging costs for raw materials and economic volatility in various markets around the world, we delivered a stable bottom line.” Thai Union announced a final dividend of THB0.31 per share, making a 2016 full year dividend of THB0.63 per share, representing continued dividend stability, despite strong operational headwinds.

The 2016 sales contribution from Thai Union’s brands remained stable at 42 percent, with the balance coming from the company’s private label sales. Company-wide sales saw growth across all three major segments in 2016. Ambient sales came in at THB 61,043 million with a 3.2 percent rise over 2015. 2016 sales for the frozen and chilled seafood business climbed to THB 55,832 million, up 11 percent over 2015. PetCare and Value-Added sales rose to THB 17,500 million, an increase of 8  percent year-over-year.

The increase in company sales value was driven by continued organic growth, increased contribution from Rügen Fisch in Germany, consolidation of the Chez Nous acquisition in Canada, and improved domestic shrimp exports.

In October, Thai Union made a USD 575 million (THB20.2BN) strategic investment in Red Lobster, the world’s largest seafood restaurant chain. The investment already contributed a 7.7 percent YoY EPS accretion during 4Q16, the first quarter into the investment.

In December, Thai Union announced an ambitious strategy to ensure 100  percent of its branded tuna is sustainably sourced with a commitment of achieving a minimum of 75 percent by 2020. As part of the new tuna strategy, Thai Union is investing USD 90 million in sustainability initiatives which includes establishing 11 new Fishery Improvement Projects around the world. In line with SeaChange, Thai Union’s sustainability strategy, the company believes traceability is the backbone of sustainability, and has developed a number of sustainable development initiatives to improve transparency in the supply chain.

Caption — Exercies break time for Thai Union Employee on the Shrimp line in Samut Sakorn.

As a result of these various initiatives, in 2016 Thai Union won Public Affairs Asia’s Gold Standard Award for Corporate Citizenship, earned the top ranking in Asia for sustainability reporting in the Top 100 Seafood Firms Transparency Benchmark from Seafood Intelligence, and received the Best Investor Relations Award at the SET Awards, among other notable accomplishments.

I am incredibly proud that Thai Union’s efforts have been acknowledged with numerous awards. These successes embody how Thai Union is working every day to ensure the company values we embrace are being translated into real and demonstrable change for good,” added Chansiri. “Moving forward, we will continue to make progress and remain focused on leveraging our leadership position and collective strengths to resolve the sustainability challenges that face our industry.”

Recently, in addition to being named to the Dow Jones Sustainability Indices for the third consecutive year, Thai Union was recently added to the FTSE4Good Emerging Index.