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Thai Union Frozen Products (TUF) Investor Presentation December 2010

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Presentation on theme: "Thai Union Frozen Products (TUF) Investor Presentation December 2010"— Presentation transcript:

1 Thai Union Frozen Products (TUF) Investor Presentation December 2010

2 Disclaimer The information contained in our presentation is intended solely for your personal reference only. In addition, such information contains projections and forward-looking statements that reflect our current views with respect to future events and financial performance. These views are based on assumptions subject to various risks and certainties. No assurance is given that future events will occur, that projections will be achieved, or that the our assumptions are correct. Actual results may differ materially from those projected

3 Prudent Investment Policy from our Chairman “We will expand internationally only on seafood business where we have experience and expertise on” “For investment decision, no matter what possibility of failure is, can we survive if the project fails” Clear strategies from our President “We look at the business on the global scale. Our goal is always to diversify our risk, expand our investment overseas, balance our revenue from around the globe and try to have additional production facilities outside Thailand. We have a global strategy, not just a Thailand strategy”

4 TUF In A Snapshot The largest Asian (ex-Japan) seafood processor in sales value. Sales (2009): approximately US$ 2 billion The world’s largest tuna packer in terms of production volume and sales, but will also be the most integrated global player after acquiring MW Brands A top five shrimp processor and exporter in Thailand Global workforce: 30,000 (c. 4,000 from MW Brands) Select key customers: Walmart, Costco, Sysco, Mitsubishi, Darden Restaurants, US Food Service, IMA, Nestle, Hagoromo, Safeway, Kroger, C & S Wholesale, Dollar General, US Government and others. Owner of: –MW Brands – Top shelf-stable seafood manufacturer in Europe with market leading brands in UK, France, Italy, Ireland and Netherlands, namely John West, Petit Navire, H. Parmentier and Mareblu –Chicken of the Sea Brand – the 3 rd largest canned tuna brand in the US –Empress International – a leading US seafood importer and distributor –Chicken of the Sea Frozen Foods – a fast-growing seafood distributor under the Chicken of the Sea brand Strategic shareholders: - Mitsubishi (Japan’s largest trading house) - Hagoromo (Japan’s largest canned tuna brand) Market Cap. : US$ 1.65 billion –956.3 m shares –foreign limit 45.0%

5 : Group founded under Thai Union Manufacturin g by current Chairman Kraisorn Chansiri 1992: Strategic partnership formed with key overseas customers, Mitsubishi Corp and Hagoromo Foods Corp 2001: Purchased the remaining 50% stake of Chicken of the Sea International 2005 Invested in a 50% stake of China’s Century (Shanghai) Trading Co., Ltd. which owns the “Century” brand, the No.1 canned tuna brand in China by sales value : Thai Union Frozen Products PCL established 1994: Thai Union Frozen Products PCL. listed on the Stock Exchange of Thailand : Group purchased 50% of Chicken of the Sea International (“COSI”) :  Acquired a 76.5% stake of Indonesian tuna packer PT Jui Fa International Food 2003: Acquired a 100% stake in Empress International Ltd. to improve seafood distribution capabilities in the U.S. 2006:  Invested with a few US seafood veterans to set up Chicken of the Sea Frozen Foods to market frozen seafood under the Chicken of the Sea brand 1998: Acquired 90% of Songkla Canning’ s shares through share swap 30+ Years Of Seafood Processing Experience Business growth through organic expansion and acquisitions (vertical integration) Never has a single quarterly loss and never miss a single dividend payment 2007:  Acquired a tuna fishing fleet consisting of 4 purse- seiners and 1 scout boat to catch fish in the Indian Ocean :  Acquired a 51% stake of Vietnam-based seafood processor Yueh Chyang Canned Food which produced canned shellfish and tuna and Invested in a stake of India- based shrimp feed and shrimp producer Avanti Feeds :  Closed down American Samoa tuna processing plant and moved to a new facility in Lyons, Georgia state of USA :  Acquired 100% of Paris-based MW Brands, an integrated canned seafood manufacturer in Europe. The firm owns well-known brands: John West, Petit Naivre, Mareblu and H. Parmentier with leading market positions in UK, France, Italy, Ireland and Netherlands.

6 By Product 9M10 Sales Breakdown By Product & Market By Market Sales: US$ 1,581 m S. America 1%

7 Own Brand vs. Contract Manufacturing Overseas Subs. 39% (own brands) Domestic Sales 12% (own brands) Sales: US$ 1,581 m Sales from Thai Operations Alone (OEM + Domestic Sales) Contract Manufacturing for Export (OEM) 49% 9M10 Sales Own Brands vs. OEM & Sales from Thai Operations Sales: US$ 873 m

8 Integrated Supply Chain - Tuna Thailand is the world’s largest exporter of canned tuna TUF is the world’s largest tuna processor by volume that allows competitive raw material sourcing and economies of scale (efficient cost control and value maximization by selling differentiated products to geographically and culturally diverse markets) Tuna Catching Processing & Canning Can & Label Production Marketing & Distribution to Retailers and End- Consumers (Thai Union Frozen, Thai Union Manufacturing, Songkla Canning, Samoa Packing, PT Jui Fai International Food, Yueh Chyang Canned Food) (Asian Pacific Can & Thai Union Graphic) (Third-party suppliers & own fishing fleet)

9 Integrated Supply Chain - Shrimp Thailand is the world’s largest shrimp exporting country TUF is a top shrimp processor and exporter in Thailand, especially for the US market End-to-end integration allows product traceability, food safety and total control of product quality Brood Stock Breeding & Hatchery Feed Production & Distribution Processing & Exporting Marketing & Distribution to wholesalers, food-service outlets, and end- consumers Farming traceability trail (partner farms in Thailand) (Thai Union Feedmill) (Thai Union Hatchery) (Thai Union Frozen & Thai Union Seafood)

10 Volatile Tuna Prices USD / MT Skipjack tuna raw material prices (WPO)  Catching situation / Weather (e.g. sea surface temperature, global warming)  Price of fuel  Number of fishing boats (purse- seiners)  Market speculation  Seasonality  Packers’ demand  Fishing technologies What drive the tuna raw material price? TUF strategy Operating own fishing vessels to enhance bargaining power Consistent and sizeable buying Cost-plus pricing Global sourcing intelligence Lean buffer stock and non-speculative inventory management 2008 Average: US$ 1,585 / metric ton 2009 Average: US$ 1,141 / metric ton -10-

11 Persistently High Shrimp Prices TUF strategy Integrate the supply chain to achieve traceability and reliable quality control Source directly from select farms which practice good management and food safety standards Cost-plus pricing and consistent buying Domestic shrimp raw material prices White Shrimp (60 pcs / kg) THB / KG  Shrimp size  Domestic & overseas supply situation  Strength of Thai Baht  Disease outbreaks  Packers’ demand  Market speculation  Seasonality 2008 Average: Bt 109 / Kg 2009 Average: Bt 107 / Kg -11- What drive the shrimp raw material prices?

12 Thai Baht Strength – A Manageable Challenge About 88% of the group’s revenues and 62% of the group’s costs are in US$ in 9M10. COSI plant relocation and rising shrimp sales increased our Thai baht exposure within the current cost structure, but partly offset by higher domestic sales -Given the cost structure of our Thailand operations, weaker Thai baht would normally benefit us. But active FX hedging, cost management and price adjustments helped keep our operating margins relatively stable even when Thai baht strengthened in the first 9 months of 2010

13 TUF has acquired 100% of MWB for a total consideration of Euro 680 mm in cash from Trilantic Capital Partners on October 29, The transaction was financed by: 1. Euro 340 mm (loans to the target by European banks) 2. Euro 180 mm (loans to TUF by Thai banks) 3. Euro 60 mm (Euro Convertible Debenture to Standard Chartered Private Equity) 4. Euro 100 mm (a rights issue of 44.2 mm new shares at a ratio of 1 new share per 20 existing shares and a private placement of 29 mm new shares to institutional investors) CIMB Securities (Thailand), the Independent Financial Advisor, employs various valuation methodologies i.e. comparables and DCF and opines that the optimal price of the acquisition is Euro mm – Euro mm Acquisition of MW Brands Completed -13-

14 Vertically Integrated Business Sustainable sourcing and procurement Production facilities and processes Distribution and logistic networks Marketing and sales organization Fleet management: 5 fishing vessels in dominant fishing ground Long-term supply contracts with ships from EU Processing facilities near major fishing grounds in Ghana and the Seychelles and at the heart of distribution center in France and Portugal Distribution throughout Europe, the world’s largest ambient seafood market Products are marketed through leading iconic brands Brand Portfolio France United Kingdom ItalyIrelandNetherlands Ambient seafood sector size (Euro mm) Key brands Market position#1 #3#1 Market share29%33%4%70%34% Source: Nielsen and IRI – MAT February 2010 MW Brands: “Ocean to Plate” -14-

15 Secure fish supply through long-term supply contracts and fleet ownership Long-term supply contracts Long-term supply contracts with French and Spanish fleets in Seychelles covering over 80% of IOT needs Provides flexibility to handle tuna migratory habits Ensures stability of fish supply Own fishing fleet 5 renewed fishing vessels owned in Ghana covering over 60% of PFC needs Ensures low cost supply Allows licensed access to prime Gulf of Guinea fishing grounds Production facilities European Seafood Investment Portugal Pioneer Food Company, Ghana Various Seafood Products (salads, seafood spreads...) Canned tune and frozen tuna loins Canned Sardines & Mackerel Canned Tuna Indian Ocean Tuna, Seychelles Est Paul Paulet, France The Company owns and manages, through its subsidiary, five tuna fishing purse seines in Ghana The combination of owned fishing vessels in Ghana and long-term supply agreements with ships from EU member countries entitles MWB to EU import duty exemption under the Cotonou Partnership Agreement -15- MW Brands – Secured Supply and Production Facilities

16 MWB Sales Breakdown By product By country Post-AcquisitionPre-Acquisition Financial Summary Fiscal year ended 31 March CAGR Total Sales Volume (‘000 Tons) (1.0)% Net Sales Value (Euro mm) % EBITDA (Euro mm) % Margin (%)12.7%12.3%15.2%18.5% EBIT (Euro mm) % Margin (%)10.8%10.1%11.5%15.6% Export 6% Netherlands 3% Ireland 4% Italy 7% France 43% UK 37% Other fish 4% Mackerel 5% Sardines 8% Salmon 10% Value-added Tuna 10% Tuna 63% For Fiscal Year Ended 31 March 2010 Combined tuna products 73% In 2006 Trilantic acquired MWB through a carved out of various entities from the US food producer HJ Heinz at 8.9x EV/EBITDA MWB’s financial performance over the past four years reflects the implementation of a number of structural and strategic business changes that have focused on profitability rather than NSV The negative sales volume growth is the result of a strategic decision to discontinue loss-making and low gross margin products in the private label and foodservice channels The improved margin in 2010 was due to the strong brand equity especially in France. MW Brands: Financial Highlights -16-

17 Low Cost Producer Status with Duty Free Access to EU Market MWB’s strategic locations not only provide optimal access to tuna but also enable MWB to benefit from low labor costs and zero import duty into EU market for ACP countries. TUF is currently paying 24% import duty to EU market Strategic Location with High Barrier to Entry MWB’s production and processing facilities are located within easy access to two of the world’s best tuna fishing grounds, Seychelles (Western Indian Ocean) and Ghana (Atlantic Ocean). This enables MWB to access low cost tuna supply and flexibility to interchange production volumes between the two plants Sustainable Low Tax Structure  MWB benefits from a low corporate tax rate of 0% in Seychelles and 4% in Ghana Unique strategic set-up delivers low cost production Proximity to End Markets  Low logistic cost from production facilities to end markets in the UK and Continental Europe MW Brands – Low Cost Producer -17-

18 DCF (Post-Synergy) DCF (Pre-Synergy) Forward EV/EBITDA Historical EV/EBITDA Forward PER Enterprise Value (Euro mm) ,000 Historical PER Historical P/BV Book Value of Total Assets x1.3x Acquisition price Euro 680 mm x8.7x x9.9x x8.7x x8.6x Optimal Range Euro mm 0%2% 0%2% CIMB Securities (Thailand), the Independent Financial Advisor, employs various valuation methodologies i.e. comparables and DCF and opines that the optimal price of the acquisition is Euro mm – Euro mm Trilantic acquired MWB in 2006 at EV/EBITDA multiple of 8.9x Precedent transactions of merger and acquisition in seafood company from has an average EV/EBITDA multiple of 9.9x DCF was calculated by using Weighted Average Cost of Capital (WACC) of 8.6%, with sensitivity on terminal growth rate MW Brands - Summary of IFA Valuation -18-

19 Branded Products Combined branded products’ sales of TUF and MWB will account for approximately 61% with owned portfolio of leading brands in UK, France, and Italy. Currently, TUF’s branded products contributes approximately 50% of sales 2 MWB’s iconic brands i.e. Petit Navire, John West, Mareblu, Hyacinthe Parmentier have established goodwill in European market in many past decades Strengthen Market Positioning Create a global seafood player of scale as well as a truly global tuna company Access to Europe, the world’s largest ambient seafood market where MWB has leading positions in major countries, with continual cooperation from MWB’s strong management team Combined pro-forma sales of TUF and MWB of Euro 2.1 bn (USD 2.7 bn) 1 with strong presence in 3 major continents namely USA, Europe, and Asia at well-balanced portion of one-third in each market. Currently, TUF’s sales contribution in USA, Europe, and Asia is approximately 50%, 13%, and 14%, respectively. Sales in Europe are mostly private label; thus, no cannibalization in European market Seafood Integration  Unlock significant revenue and cost synergies – Optimize fleet vessel fishing grounds and procurement: MWB’s production facilities are located in Ghana and Seychelles, one of the major fish grounds. Once TUF transfers 4 vessels to Ghana, the fleets, totaling 9 vessels, will increase the capacity and efficiency of the overall fish catching. Average raw material cost will decrease due to the contribution of low fish cost sourcing by its own fleets in Ghana and long-term contract with French and Spanish fleets in Seychelles – Capitalize on the high complementarity of TUF and MWB production facilities – Share production know-how and commercial best practices  Full integration of different production facilities and leveraging the know-how for the development of value- added products i.e. fish meal, fish oil, and fish extract. TUF plans to grow NSV of MWB with sustainable EBITDA margin by new products development i.e. frozen seafood, pet food, and leverage brand value to more European countries  No import duty for Europe operations since the production facilities of MWB locate in ACP countries Accretive value to shareholders by unlocking significant value from becoming globally integrated seafood firm Notes:(1) Pro-forma combined sales for 12 months ended 31 Dec 2009: exchange rates of THB/EUR of and THB/USD of (2) Based on the TUF’s last twelve month (LTM) figure and the MWB’s FY ended 31 Mar 2010 Rationale For the Transaction -19-

20 Truly Global and Vertically Integrated Thailand Georgia, USA Indonesia Vietnam Ghana Seychelles Portugal France Europe TUF Markets TUF Production Bases TUF Fishing Grounds MWB Production BasesMWB MarketsMWB Fishing Grounds After the acquisition, TUF will become a truly global seafood player that have processing facilities and market distributions in major continents all over the world Reduced reliance on the US market sales through market diversification Combining fleet of 9 vessels and production facility in 8 strategic locations Production facilities are located closely to fishing grounds; hence, achieving lower cost of production Global Sourcing, Global Production and Global Markets -20-

21 MWB TUF Remark Combined Notes: (1)Based on the TUF’s last twelve month (LTM) figure and the MWB’s FY ended 31 Mar 2010 (2)Source: Fishstat Plus (F.A.O.) 2007 (3)Converted to THB at the rate of THB per Euro 1 Fleet 4 Vessels5 Vessels9 Vessels After TUF transfer 4 vessels to join MWB’s fleet in Ghana, the combined tuna catching is expected to cover all needs for Ghana’s plant Canned Tuna Production (net weight) 228,525 tons per year (as of FY2009) 103,200 tons per year331,725 tons per year Combined production will account for approx. 21% of the global canned tuna production 2 Sales Value 1 THB 67.7 bnTHB 18.8 bn 3 THB 86.5 bn Combined sales will account for 12.2% of the total ambient seafood market share of approx. THB 712 bn 3 (Euro 17 bn 4 ) Share of Tuna Sales 42.2%73.0%48.9% Tuna products will account for almost half of the total sales Sales Breakdown by Market 1 48% USA 12% Europe 40% Asia and Others 100% Europe 38% USA 31% Europe 31% Asia and Others Well-balanced sales from three major markets Sales Breakdown by Type 1 50% Own Brand 50% OEM 100% Own Brand 61% Own Brand 39% OEM Rank no. 1 in France and UK, the leading European markets (Petit Navire/H. Parmentier and John West) Rank no. 3 in Italy (Mareblu) Rank no. 3 in the USA (Chicken of the Sea) 5 (4)Source: Euromonitor 2009 (5)Source: Nielsen and IRI – MAT February 2010 Combined TUF - MW Brands Position -21-

22 Acquisition Debt Financing 1.Long-term loan from Thai Banks of THB 15,0000 mm Tranche A: 6-year amortizing, THB 6,000 mm Tranche B: 8-year amortizing, THB 9,000 mm 2.Long-term loan from European Banks of Euro 340 mm Tranche 1: 6-year amortizing, Euro 140 mm Tranche 2: 7-year bullet, Euro 200 mm Debt financing of Euro 680 mm Well-planned LBO by mitigate TUF’s risk with ring-fence, THB 14,248 mm (~50%) of acquisition debt at MWB level Debt financing cost is approximately 6-7% to acquire high cashflow company with EBITDA margin of 18% Equity issue of 117 million new shares TUF proposes to increase its capital to 1,000 million shares from 883 million shares by issuing new common shares of 117 million shares as follows: – Reserved RO shares of not exceeding 44.2 million shares to reward the existing shareholders – Reserved PP shares of approximately 29.8 million shares to expand shareholders base i.e. institutional investors and/or high-net worth investors – Reserved 42.8 million shares for the conversion of convertible debentures 1 and the adjustment of right of such convertible debentures to private placement investors 2 The proceeds from RO and PP shares sold will lower debt level of TUF Acquisition Debt Financing TUF acquires MWB with cash, fully financed by debt locally and internationally Domestic Foreign Bid Co. Thai Banks European Banks Euro 340 mm (equal to THB 14,248 mm) THB 29,248 mm (equal to Euro 680 mm) Up to THB 15,000 mm Notes: (1)CD of EUR 60 mm, 4 years maturity from issue date, 5% p.a. cash coupon annually (with an overall yield of 8% p.a. unless converted into common shares) and exercise price of THB 46 per share (2)TUF plans to issue convertible debentures after filing necessary documentations to the SEC. The proceeds of convertible debentures will be lower debt level of TUF Up to THB 15,000 mm Plan to take out by CD and Equity Financing (newly issued shares from RO/PP) Repayment of existing financials debts of Euro 296 mm 3 The remaining to pay to Trilantic Capital Partners (“Seller”) of Euro 384 mm 3 Euro 680 mm4 Note: (3) Financial debts and equity as of 31 March 2010 (Latest fiscal year) (4) Assuming the EBITDA (net of CAPEX) to be generated by the target at not lower than Euro 80 mm per year (after synergies), the payback period for this transaction should be close to 8-9 years Acquisition Structure -22-

23 Notes: (1)Pro-forma analysis as of 31 March 2010 for illustrative purpose only; exchange rate THB/EUR of based on Bank of Thailand’s average selling rate as of 23 July 2010 (2)MWB acquired on debt-free, cash-free basis (3)Acquisition debt of Euro 360 mm and Euro 340 mm at TUF and MWB, respectively; TUF portion includes Euro 20 mm of estimated transaction fees and expenses (4)Estimated, based on 6-7% interest rate for new debt (Unit: THB) Sales EBITDA EBITDA Margin Asset Debt Interest Expense Interest Coverage Ratio Pro-forma bn 9.8 bn 11.3% 60.7 bn 41.1 bn 2.3 – 2.7 bn 3.6x – 4.3x MWB TUF LTM as of 31 March 2010 FY ended 31 March bn67.7 bn 3.5 bn6.3 bn 18.5%9.3% 23.4 bn37.2 bn 11.8 bn15.1 bn-14.2 bn 567 mm 906 mm – 1.1 bn – 994 mm 4 Existing 2 New 3 Existing New x5.7x – 7.0x-3.5x – 4.1x Pro-former Financial Highlights -23-

24 Illustrative Pro-forma Leverage Existing Debt + New Debt 3 Total Debt LTM EBITDA Debt / LTM EBITDA Pro-forma bn 29.3 bn 41.1 bn 9.8 bn 4.25x MWB TUF bn 14.2 bn15.1 bn 14.2 bn26.9 bn 3.5 bn6.3 bn 4.11x4.34x (A) (B) (A) + (B) (C) (A) + (B) / (C) Notes: (1)Pro-forma analysis as of 31 March 2010 for illustrative purpose only; exchange rate THB/EUR of based on Bank of Thailand’s average selling rate as of 23 July 2010 (2)MWB acquired on debt-free, cash-free basis (3)Acquisition debt of Euro 360 mm and Euro 340 mm at TUF and MWB, respectively; TUF portion includes Euro 20 mm of estimated transaction fees and expenses As of 31 March 2010 (Unit: THB) -24-

25 Foreign Exchange Risk Management  Cash Flow Risk (Transaction Risk)  Balance Sheet Risk (Translation Risk) Risk Management US Operation - Rev. and expenses in USD- Asset, liabilities, equity, profit and loss in USD Europe Operation - Rev. and expenses are mainly in EUR - UK: rev. in GBP, exp. In USD/EUR/GBP - Ghana: rev. in USD, exp. in USD/GHC - Consolidated in EUR so that there is translation risk at this level - But, translation risk should be diversified Thailand - 95% rev. in USD, but 50% expenses in USD - Therefore, we have to manage 45% gap - Consol. from US and Europe into THB - Translation risk should be better setoff due to opposite direction of USD and EUR

26 Foreign Exchange Risk Management  Cash Flow Risk (Transaction Risk)  Balance Sheet Risk (Translation Risk)  Interest Rate Risk Management -We have only exposure on increasing interest rate risk on money borrowed -Hedging products can be Cross Currency Swap, Interest Rate Swap, Interest Rate Options i.e. Cap, Collar. Risk Management Hedging Products - Forward Contracts - Currency Options - Natural Hedge (matching) - FX Swap - Cross Currency Swap

27 Other Risks  Business Risks i.e. trade barriers, competition -CSR, sustainable development, compliance, ISO -M&A horizontally to diversify risk and benefits from presences in many countries.  Production Risks -Cost plus strategy -Synergy and Security from high volume purchasing  Administrative and Management Risks -Clear guidance and policy -Annual business planning and tracking by boards. Internal Audit. Committee -Strengthening our people thru HR development program. Happy work life. Risk Management

28 Prudent Investment Policy from our Chairman “We will expand internationally only on seafood business where we have experience and expertise on” “For investment decision, no matter what possibility of failure is, can we survive if the project fails” Clear strategies from our President “We look at the business on the global scale. Our goal is always to diversify our risk, expand our investment overseas, balance our revenue from around the globe and try to have additional production facilities outside Thailand. We have a global strategy, not just a Thailand strategy” Investment Risk Management

29 Outlook for Expect dollar sales to grow 30% thanks to consolidation of MW Brands in spite of the continual negative impact from strong Thai baht. Therefore, sales of all items should grow, particularly tuna 2.Average group operating profitability should improve given MW Brands’ typically higher margins while overall financial gearing will increase due to the acquisition financing of MW Brands 3.Expect positive EPS growth despite a small dilution effect from the right issue and private placement of new shares in October, Increase in pet food sales in the US through the new investment US Pet Solutions 5.Semi-annual dividend payment will continue but will be capped at Bt 1.2 billion per year to meet the debt covenant until the debt-to- EBITDA ratio returns to the pre-acquisition level (3-4 years from now) -29-

30 Strategy For Integrate MW Brands into Thai Union Group in terms of corporate and financial reporting, procurement and production. 2.Optimize MW Brands operations through coordination and technical assistance from TUF 3.Transfer Thai Union fishing vessels to Ghana to enhance MW Brands’ fishing operations 4.Launch more value-added products (higher margin) by the Thailand-based Culinary & R&D Center in order to serve custom requirements and expand to new market segments 5.Actively manage financial (FX and interest rate) risks and scrutinize cash flows and debt covenants -30-

31 4-Year ( ) Sales Target of US$ 3 billion Will Almost Be Met By 2011 Thanks To MWB Acquisition So, A New Target…. US$ 4,000 billion in

32 Highlights 9M10 performance was considered respectable given the presence of negative factors, namely stronger Thai baht, highly volatile tuna raw material prices and persistently high shrimp raw material prices. These negative factors disrupted sales and exerted pressure on margins Expect annual sales growth rate of 10% for 2010 (thanks to consolidation of MW Brands since November) while the financial position remains strong in terms of net profit, EBITDA and operating cash flows. Despite a challenging year so far, we remain positive that 2010 will be a comparable one to the record year of 2009 US operations contributed positively to the bottom line of the group so far after the COSI’s plant relocation and Empress & COSFF restructuring MW Brands (the deal was completed on October 29, 2010) is an once-in-lifetime opportunity that is highly complementary to TUF’s existing business despite the added debt burden -32-

33 Btm,9M109M09YoY Sales50,85951, % Sales in US dollar term1,5811, % Gross Profit7,0927, % %sales14.7%14.1% Shutdown & Start-up Exp. for Plant Relocation %sales0.2%0.8% Operating Profit2,7883, % %sales5.5%6.1% Add: FX Gain (Loss) % Add: Other Incomes % EBIT3,9203, % Less: Financial Expenses Net Profit (Bef. Taxes & MI)3.5273, % Less: Tax / (Tax Credit) % Less: Minority Interests % Net Profit2,5212, % %sales5.0%5.1% Avg. Bt / USD App. 7.1% 9M10: Sustainable Performance -33-

34 Margins Sustained Despite Rising Thai Baht 3Q10 Bt m 3Q10 US$ m 2Q10 Bt m 2Q10 US$ m 1Q10 Bt m 1Q10 US$ m 4Q09 Bt m 4Q09 US$ m 3Q09 Bt m 3Q09 US$ m 2Q09 Bt m 2Q09 US$ m Sales17, , , , , , EBITDA1,515481,628501,581481,371411,660491,64247 Depr./A m Int. Exp Corp. Tax Net Profit , EPS (Bt) GP (%) OP (%) NP (%) Bt / US$

35 Stable ROA and ROE 3Q109M A/R Turnover (days)34 36 Inventory Turnover (days) Gearing Ratio*1.0x 1.5x D/E Ratio**0.7x 1.1x ROAE (annualized)19.2%20.2%21.8%16.0% ROAA (EBIT/ Avg. Total Assets) (annualized) 13.0%14.0%12.8%8.9% *Gearing ratio = Total Liab./ Total Equity **D/E ratio = Interest-bearing debts / Total Equity Note: ROA = EBIT / Avg. Total Assets -35-

36 Solid Financial Position in 9M10 Higher EBITDA In Spite of Slightly Lower Net Profit - Financial Position Stayed Strong Net profit (Bt2,521 m) was slightly lower than the same period a year ago but EBITDA (Bt4,723 m) was higher, thanks to higher other incomes and FX gains during the first 9 months this year. Financial position remained solid. Average margins were at about the same level from a year ago. In addition, operating and free cash flows were positive while D/E ratio stabilized between 0.6x - 0.7x since the end of 2009 and Debt-to-EBITDA inched up slightly from 2.07 to 2.20x (before the completion of the MW Brands acquisition). Debt Amount Unchanged Short Term Proportion Increased As of September 30, 2010 (pre- closing), interest-bearing debts rose temporarily to Bt 13,859 m from Bt 12,169 m at the end of Q2’10, partly due to the interim dividend payment and a lower level of accounts payable. The value of inventories and accounts receivables were fairly stable from Q2’10. Currently, 89% of our interest-bearing debts (local and abroad), amounting to Bt10,800 m, were short term, up from 58% at the end of Q1’10, essentially owing to a large portion of Thai baht bond issue worth Bt1,500 m and Bt3,200 m coming due in November 2010 and May, By the end of Q3’10, around 78% of our total debts were in Thai baht. The average effective interest rate for the group was 3.66% for Q3’

37 Thank You Mr. Wai Yat Paco Lee Financial Controller / Investor Relations Officer

38 Appendices: 1.Historical share price movement & dividend payment 2.Historical profitability & financial position 3.Costs & Benefits of the Samoa Plant Relocation Project 4.US top 10 most popular seafood 5.Global seafood export breakdown 6.Major tuna fishing grounds and key tuna species 7.TUF’s ACC 3-Star Certification 8.Tuna fish sustainability 9.Import tariff rates for Thai tuna and shrimp in major markets 10.Tuna Fast Facts 11.Potential Sources of Growth 12.Where Thailand Stands In World Seafood Industry -38-

39 Appendix 1a: TUF Share Price Movement (till 24/11/10) -39-

40 2009 Bt m 2009 US$ m 2008 Bt m 2008 US$ m 2007 Bt m 2007 US$ m 2006 Bt m 2006 US$ m 2005 Bt m 2005 US$ m Sales68,9942,01369,0482,07055,5071,61255,0391,45753,6441,330 EBITDA5, , , , ,77594 Depr.+Amor.1,076311, Fin. Exp Corp. Tax Net Profit3,343982,201661,823531,901502,08252 GP. (%)15.1%12.7%13.7%15.3%15.5% OP (%)6.0%4.1%4.2%4.7%4.8% EBIT (%)7.1%4.8%5.1%5.5% NP. (%)4.9%3.2%3.3%3.5%3.9% Bt / US$ Appendix 2a: Historical Profitability

41 A/R Turnover (days) Inventory Turnover (days) Gearing Ratio*1.0x1.5x1.3x1.0x1.1x D/E Ratio**0.7x1.1x1.0x0.7x0.8x ROAE21.8%16.0%14.2%15.8%18.5% ROAA (EBIT/ Avg. Total Assets)12.8%8.9%9.4%11.2%11.6% *Gearing ratio = Total Liabilities / Total Equity **D/E ratio = Interest-bearing debts / Total Equity Note: ROA = EBIT / Avg. Total Assets Lower interest-bearing debts thanks to a lower Inventory balance (down by Bt 966 m and Bt 2,826 m from 3Q09 and a year ago respectively) -EBITDA hit a new high at Bt 5,926 m thanks to expanded margins. A lower inventory level further sent operating cash flows (Bt 8,578 m) and free cash flows (Bt 6,672 m) to record levels despite capital expenditure worth Bt1,988 m Appendix 2b: Historical Financial Position

42 Appendix 3a: Samoan Plant Ceased Operations Background: American Samoa has been home to COSI’s processing plant (Samoa Packing) since 1954 There were 2,041 workers employed by Samoa Packing to carry out the full conversion process (from fish to cans) Mandated increasing minimum wages imposed by the federal government (in order to be in par with that of the mainland) added costs in a time of economic uncertainty that was indeed in an urgent need for cost savings Increasing costs and occasional inefficiencies led to management’s reassessment of the true strategic value of the Samoan plant -42-

43 Appendix 3b: Strategic Reasons For Relocation 1.Escalating costs in American Samoa due to: Increasing minimum wage Occasional inefficiencies and difficulties in efficient inventory control 2.Need to enhance customer service by locating the plant onshore (near the market) 3.Further integration with Thai plants to take advantage of the opportunities for cost-savings and better inventory management given a more coordinated supply chain 4.Tuna loins for all oil and white meat products in the new facility will be supplied by TUF’s Thai plants while other existing tuna products, such as chunk light in spring water, will be completely packed by Thai plants. -43-

44 Appendix 3c: Details of the New Plant Location: Lyons, Georgia Area: 220,000 sq. feet Expected number of employees: 220 employees, up to 330 in the future Planned capacity: 100 loin tons per day Expected annual output: 4 million cases Products: tuna-in-oil and white meat products -44-

45 Appendix 4: Top 10 US Seafood Consumption by Species in 2009 SpeciesPounds per Person per Year 1Shrimp4.10 2Canned Tuna2.50 3Salmon2.04 4Pollock1.45 5Tilapia1.21 6Catfish0.85 7Crab0.59 8Cod0.42 9Clams Pangasius0.36 Source: H.M. Johnson & Associate for US National Fisheries Institute -45- Seafood consumption in the US was pounds per capita in 2009 where fresh & frozen (11.8 pounds) + canned (3.7 pounds) + cured (0.3 pounds) Most of the seafood consumed in the U.S. was not caught in U.S. waters. About 84 percent of the seafood consumed in the U.S. is imported, a dramatic increase from the 66 percent just a decade ago. Farmed seafood, or aquaculture, comprises almost half of the imported seafood. The US is the third largest consumer of seafood behind China and Japan in terms of volume

46 Appendix 5: Global Seafood Export Value in 2008 (US$94.5 billion) Source: FISHDAB - Globefish -46-

47 Appendix 6: Major Fishing Grounds and Key Tuna Species World Tuna Catches: 4,228,000 metric tons Source: FISHDAB - Globefish Note: Species mainly for canned tuna: Skipjack, Yellowfin and Albacore Species mainly for sashimi tuna: Bluefin and Bigeye

48 Appendix 7: ACC 3-Star Certification - TUF is Thailand’s first shrimp producer to achieve Aquaculture Certification Council (ACC)’s three-star certification which ensures that its shrimp business unit’s operations meet a stringent set of social, environmental, and food safety standards, from hatchery, to farms, to processing plants – three types of facility which are represented by the three stars - ACC is an independent and non-governmental US body to certify and promote best aquaculture practices - For a facility to be certified, it needs to comply with Best Aquaculture Practices (BAP) standards on community rights, compliance with all relevant regulations, worker safety and employee relations, effluent management, responsible use of chemicals and fuels, and responsible management of waste. Shrimp farms also cannot be located in mangrove or other ecologically sensitive areas -48-

49 Appendix 8a: Tuna Fish Sustainability Currently, four Regional Fisheries Management Organizations (RFMOs) manage global tuna resources: 1. IATTC Inter-American Tropical Tuna Commission (1949) 2. ICCAT International Commission for the Conservation of Atlantic Tuna (1969) 3. IOTC Indian Ocean Tuna Commission (1996) 4. WCPFC Western and Central Pacific Fisheries Commission (2004) Current challenges related to RFMO’s: - Building consensus amongst members - Effectively limiting capacity or limiting fishing - Ensuring effective compliance with fishery regulations - Taking effective action for violating fisheries regulations - Improving the science and information / new technology -49- Appendix 8a: Tuna Fish Sustainability

50 Appendix 8b: TUF co-founding ISSF Development of ISSF - International Seafood Sustainability Foundation ( –65% of the world tuna business have agreed to implement the NEW ORGANIZATION to manage this critical issue. –TOP 3 U.S.A Tuna Companies –TOP 3 European Tuna Companies –TOP 2 Asian Tuna Producers –Most Important Worldwide Tuna Brokers / Boat Owners –Environmental Organizations –Recognized Tuna Scientist ISSF board is composed of: –Members representing the foundation (NGO) –Tuna Scientists –Environmental non-governmental organizations (ENGO) –Opinion Leaders -50-

51 Appendix 8c: ISSF’s Survey of Tuna Stock -51- Green - Overfishing is not occurring and the fishery is not overfished. Yellow - There are one or more issues with the fishery but effective management practices are in place to ensure the sustainable management of the stocks. Red - Overfishing is occurring and the fishery is overfished. However, a management regime is in place that is addressing the issues. Black - Overfishing is occurring and the fishery is overfished: Management actions to bring the fishery back into a sustainable state are not being taken and members will cease to purchase until appropriate actions are taken

52 Appendix 9: Import tariffs for Thai Tuna and Shrimp Products In Developed Markets Canned tunaFrozen shrimp US- 0.5 cent per pound of frozen tuna loin - 6% for canned tuna in brine with a quota. Once the quota (determined annually as a percentage of domestic production) is filled, any additional imports will be subject to 12.5% duty - 35% on canned tuna in oil - 0% on all frozen products, except for the case of anti-dumping (AD) tariffs - Due to the AD duty, Thai shrimp in general is subject to 2.61% tariff - 5%, when canned with fish meat EU- 24% for canned tuna and tune loins but certain African, Caribbean and Pacific (ACP) countries and Andean countries (e.g. Ecuador, Colombia) enjoy 0% due to preferential agreements with the EU % for canned tuna as long as Thai exporters fulfilling the rule of origin requirement in GSP - 12% on frozen shrimp - 20% on canned shrimp - Due to the GSP privilege, Thailand, Indonesia, India, Malaysia and Pakistan pay only 4.8% for frozen shrimp and 7% for canned shrimp Japan- 9.6% for canned tuna. The Japan – Thailand Economic Partnership Agreement (JTEPA), since Nov 2007, allows this rate to drop to zero percent within 5 years as long as fish used are caught by ASEAN boats or members of Indian Ocean Tuna Commission (IOTC). - 0% due to JTEPA with effect since Nov

53 Appendix 10: Tuna Fast Facts Tuna never stop moving, they are always in motion and a typical tuna may eat 5 percent of its own weight in food in one day Unlike most fish, which are cold-blooded, tuna are able to maintain their temperature several degrees warmer than the water in which they find themselves. Albacore is the only species that can be labeled as "white meat tuna" in the U.S In recent years, the world’s tuna catch breaks down into approximately: skipjack at 60%; yellowfin at 25%; bigeye at 9%; albacore at 4% and bluefin at 1%. Yellowfin, skipjack, and bigeye tunas spawn widely throughout tropical waters The majority of US canned tuna is skipjack. Skipjack accounts for the largest share of tuna caught and eaten by people around the world Main fishing methods: 61% purse seine; 13.9% longline; 10.9% pole and line; 1.2% troll; and 12.4% others Stock status by species (based on ISSF survey ): –Skipjack: stocks are overall a very healthy species of tuna with a majority of stocks being sustainably fished (mainly canning) –Yellow fin: stocks are overall at or nearing the maximum level of fishing and need to be monitored (canning & sashimi) –Albacore: stocks are overall healthy with some likely being fished at or near maximum level (canning) –Bigeye: stocks are overall at or nearing the maximum level of fishing and need to be monitored with the exception being EPO bigeye which needs immediate conservation measures put in place by IATTC (mainly for sashimi) –Blue fin: stocks are overly exploited and require immediate conservation measures (mainly for sashimi) -53-

54 Appendix 11: Potential Sources of Growth Near term Economic recession forcing consumers to trade down to low price / highly affordable staple items, such as canned tuna and shrimp New products through new packaging designs/ technologies which provide consumers with convenience and ease of use, e.g. tuna / salmon pouches, ready-to-eat tuna / salmon steak pouches, peel-to-open tuna / salmon cups, ready-to-eat frozen meals, etc. M&A opportunities upon consolidation of the world tuna and shrimp industries Outsourcing/ contract manufacturing for private labels and existing retail brands Healthy eating trend of seafood upon more scientific proof of its importance in daily diet Removal of trade barriers through GSP privileges, Free Trade Agreements or WTO Long term New markets: China and Indian markets, as well as the Middle East, Africa and Eastern Europe, where consumption of tuna is still low at the moment, but should grow in the future Higher demand for inexpensive nutritious food (protein) to feed the growing world population as a result of the increasing individual life span -54-

55 Appendix 12a: Where TUF stands - Nearly 40% of Thailand’s Canned Tuna Exports -55- World Production of Canned Tuna 2006 (Vol: 1,667,300 tons)World Exports of Canned Tuna 2006 (Vol: 1,078,000 tons) *Est. World Consumption of Canned Tuna 2006 (Vol: 1,733,600 tons) Source: FISHDAB - Globefish *World consumption is estimated by Production + Imports – Exports World Imports of Canned Tuna 2006 (Vol: 1,144,000 tons)

56 Appendix 12b: Where TUF Stands - A Top 5 Shrimp Exporter in Thailand -56- World Shrimp Production 2006 (Vol: 6,624,400 tons)World Shrimp Exports 2006 (Vol: 2,394,200 tons) World Shrimp Imports 2006 (Vol: 2,275,000 tons) Source: FISHDAB - Globefish Est. World Shrimp Cultivation 2006 (Vol: 2,718,400 tons)

57 William B. Darden Supplier Award 2 years (2009 & 2010) in a row In the past 15 years, TUF has won 10 awards in different categories, but it is definitely an achievement of winning this top honor back to back. Again, only 11 out of over 1,500 global suppliers won the award this year and among this handful of winners, only two are seafood suppliers. The Bill Darden Distinguished Supplier of the Year Award is the highest level of honor awarded to the suppliers of the restaurant company. It is also one of the most prestigious awards for suppliers in the US food service industry. Based in Orlando, USA, Darden Restaurants is the world’s largest full-service restaurant company that owns and operates more 1,700 restaurants, including Red Lobster, Olive Garden, LongHorn Steakhouse, The Capital Grille, Bahama Breeze, and Seasons 52. It employs 180,000 people and generates US$ 7 billion in annual sales. -57-

58 Best Managed Company Awards Securities Analysts Association of Thailand Poll 2009 Most Favorite Company, Most Favorite CEO, Most Favorite CFO and Most Favorite IR in the Food and Agro sector Boston Consulting Group’s Biannual BCG100 Global Challengers Survey 2006 & 2008 One of the only 2 Thai companies selected in the survey Asiamoney Magazine’s Annual Best Managed Companies Poll Consecutively voted as Overall Best Managed Thai Mid-Cap Company Consecutively voted as one of Overall Best Managed Thai Companies FinanceAsia Magazine’s Annual Best Managed Companies’ Poll 2010Best Managed Thai Mid-Cap, One of the Overall Best Managed Thai Companies, One of the Best Corporate Governance, One of the Best Investor Relations, One of the Most Committed to a Strong Dividend Policy 2009One of Thailand’s Overall Best Managed Companies; One of the Best Mid-Cap; One of the Best Corporate Governance; One of the Most Committed To A Strong Dividend Policy 2006 One of Thailand’s Best Managed Companies in the category of Best Corporate Governance and Most Committed to Strong Dividend Policy One of Thailand’s Overall Best Managed Companies Awards and Recognitions By The Financial Community -58-

59 Best Managed Company Awards Euromoney Magazine’s Annual Best Asian Companies Poll 2010 One of the top 3 Best Asian Companies in the Food, Drink and Tobacco category Corporate Governance Awards Securities Exchange Commission of Thailand Disclosure Award 2003 Popular Award Stock Exchange of Thailand 2004 Best Performance Award – Agribusiness Sector Awards and Recognitions By The Financial Community -59-

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