Annual Review

Overview

2024 was a challenging year, marked by a slowdown in the global economy, leading consumers to adopt more cautions spending habits. Global GDP is expected to grow by 3.2% in 2024, slightly down from 3.3% in 2023. Key pressures included trade war tensions, the ongoing Russia-Ukraine conflict, uncertainty surrounding the U.S. elections, the Federal Reserve’s interest rate cuts, and exchange rate volatility.

Thai Union continues to closely monitor these factors for potential impacts on our business, ensuring that the company is able to proactively adapt to changing market conditions. Adaptability and strategic foresight have been crucial in maintaining its market leadership and positioning it for future success in an ever-evolving global landscape.

In 2024, Thai Union’s sales were back to growth, recording the third highest revenue ever. Gross Profit Margin reached an all-time high of 18.5%, while EBITDA delivered its second-best performance.

• Sales were THB 138,433mn, increased by 1.7% compared to the previous year, driven by organic expansion of Ambient, PetCare and Value-added categories.
• Gross profit margin (GPM) reached a record high of 18.5%.
• EBITDA rose by 8.6% YoY to THB 13,361mn, reflecting the significant expansion of operations.
• Net profit was THB 4,985 million, representing a 7.2% YoY, with earnings per share of THB 1.08. Excluding transformation costs, net profit rose by 22.3% YoY to THB 5,685mn.
• Free Cash Flow reached a record high of THB 11,705mn, a significant improvement from the prior year, enhancing financial flexibility for future investments and strengthening the balance sheet.

PERFORMANCE BREAKDOWN BY CATEGORY

AMBIENT SEAFOOD BUSINESS

In 2024, Ambient sales reached an all-time high, rising by 7.1% YoY, driven by an 11.1% YoY growth in sales volumes from both private label and branded customers. Sales in the U.S., Canada and Middle East improved strongly, supported by higher demand and our promotion push strategy. GPM rose slightly YoY to 19.1% and improved steadily throughout the year, benefiting from low-cost inventory as we stocked up during a period of low tuna prices.

FROZEN, CHILLED SEAFOOD AND RELATED BUSINESS

Frozen sales declined by 10.7% YoY across all segments, except for Chilled salmon and Feed businesses. The decrease was mainly due to the challenging market conditions in the U.S., including soft demand and US Frozen rightsizing finalization. Sales volume marginally dropped by 0.1% YoY, reflecting weaker demand in seafood products from retail and foodservice businesses in the U.S. and Europe. However, this was partially offset by volume growth in Chilled salmon and Feed businesses. GPM continued to improve as expected, reaching 11.7% in 2024.

PETCARE BUSINESS

PetCare sales increased by 15.5% YoY, driven by a significant increase in premium product mix (2024: 54.7% vs. 2023: 48.6%), a solid recovery in the U.S., and higher demand in Europe and Australia. PetCare GPM achieved its all-time high at 28.5% and exceeded the full-year target guidance of 26-28% in 2024.

VALUE-ADDED AND OTHER BUSINESSES

Value-added sales rose by 5.2% YoY, primarily driven by Value-added, Ingredient and Packaging segments which showed higher sales volume and higher selling prices. GPM dropped to 26.1% in 2024, down by 1.0% YoY, but remained at a healthy level.

PERFORMANCE BREAKDOWN BY REGION

In 2024, total sales increased by 1.7% YoY, mainly driven by European, the Middle East and other Emerging markets, partially offset by a decline in the U.S. and Thailand markets. However, the U.S. and Canada market remained the Group’s largest market, contributing 39.4% to total sales, following by the European market which represented 30.0% of total sales. In Thailand, domestic sales accounted for 11.0% of total sales, and Emerging Markets and the rest of the world contributed 19.6% of total sales.

Thai Baht depreciated against all key currencies, especially the GBP (averaging THB 45.09/GBP, increasing by 4.2% YoY, the EUR (averaging THB 38.18/EUR, increasing by 1.5% YoY, and the USD (averaging THB 35.29/USD, increasing by 1.4% YoY.

Sales in the U.S. and Canada declined by 1.6% YoY in 2024, primarily due to unfavorable FX translation and softer demand in the U.S. market for Frozen category, which was an 18.7% YoY decrease. However, Ambient category performed well, increasing by 12.2% YoY, followed by PetCare and Value-added, which grew by 14.0% and 47.2% YoY, respectively.

Sales in Europe rose by 3.0% YoY in 2024 across all categories, with a higher volume of 3.4% YoY.

Sales in Thailand contracted by 2.9% YoY, while sales in Emerging Markets and the rest of the world increased significantly by 16.6% YoY, especially from the Middle East.

STATEMENT OF FINANCIAL POSITION ANALYSIS

As of December 31, 2024, Thai Union reported total assets of THB 154,912mn, a decrease of THB 10,538mn or 6.4% from THB 165,450mn as of December 31, 2023. The decrease was primarily attributable to a decrease in 1) net inventories of THB 6,856mn, driven by the efficient inventory management and the favorable raw material prices, particularly Skipjack tuna (-19.4% YoY), 2) goodwill and other tangible assets of THB 2,152mn, 3) net investments of THB 1,550mn, 4) cash and cash equivalents of THB 963mn, and 5) fixed assets of THB 760mn. However, this was partly offset by a rise in 6) net trade and other receivables of THB 845mn and 7) derivative assets of THB 750mn.

Total liabilities of THB 98,600mn, a drop of THB 833mn or 0.8% from THB 99,433mn as of December 31, 2023. This was mainly from a decline in 1) current portion of debentures of THB 19,619mn, 2) long-term loans from financial institutions of THB 13,142mn, 3) derivative liabilities of THB 867mn, 4) deferred tax liabilities of THB 405mn, and 5) net trade and other payables of THB 276mn. However, this was mostly offset by a rise in 6) debentures of THB 12,559mn, 7) current portion of long-term loans of THB 12,553mn, and 8) bank overdrafts and short-term loans of THB 8,404mn.

Total equity was at THB 56,313mn, a decrease of THB 9,705mn or 14.7% from THB 66,017mn as of December 31, 2023. This was mainly from 1) the redemption of perpetual debentures of THB 5,950mn, 2) other components of equity of THB 3,204mn, largely from FX translation, 3) retained earnings of THB 786mn, and 4) an issued and paid-up share capital of THB 50mn, resulted from the write-off of the unsold amount of the repurchased shares from the share repurchase program in 2023, totaling 200mn shares at par value of THB 0.25 per share.

CASH FLOW ANALYSIS

For the year ending December 31, 2024, net cash from operating activities was THB 14,525mn, driven by an increase in free cash flow of THB 11,705mn, which reached an all-time high, primarily due to higher EBITDA. Net cash used in investing activities was THB 6,562mn, largely from net cash payments for short-term investments of THB 6,194mn, purchases of property, plant, and equipment and intangible assets of THB 3,557mn. These were partially offset by cash receipts from investments in debt instruments of THB 1,760mn and proceeds from sale of other long-term investments of THB 912mn. Net cash used in financing activities was THB 13,854mn, mainly due to repayments for debentures of THB 7,050mn, cash paid on perpetual debentures of THB 6,000mn, net cash payments for repurchase of treasury shares of THB 2,982mn, interest and other finance costs paid of THB 2,406mn, and dividends paid to the owners of the parent of THB 2,389mn. These were partially offset by net cash receipts from short-term loans from financial institutions of THB 8,668mn.

2025 FINANCIAL TARGET

• Thai Union’s sales are expected to grow by 3 – 4% YoY, driven by organic growth across all categories. However, this growth will be partially offset by FX translation effects due to the projected appreciation of the Thai Baht against all currencies.
• GPM is expected to align with sales growth, while SG&A to sales ratio will increase slightly due to transformation costs and marketing expenses aimed at boosting branded product sales.
• Lastly, capital expenditure is expected to increase from last year, primarily due to the expansion of automation in the PetCare warehouse.