Earnings call transcript: Thai Union Q2 2025 sees stock rise despite revenue miss

Thai Union Group PCL reported its Q2 2025 earnings, revealing mixed results with an earnings per share (EPS) of $0.29, surpassing expectations, while revenue fell short at $33.39 billion, against a forecast of $34.19 billion. Despite this revenue miss, the company’s stock price increased by 5.08% in after-hours trading, closing at $12.40, driven by positive investor sentiment around improved profit margins and strategic initiatives. According to InvestingPro data, the company maintains a strong market position with a market capitalization of $25.35 billion and has demonstrated robust financial health with a Fair score of 2.41 out of 5.

Key Takeaways

• EPS exceeded expectations, reaching $0.29.
• Revenue missed forecasts, coming in at $33.39 billion.
• Stock price rose by 5.08% in after-hours trading.
• Gross profit margin hit a record high of 19.7%.
• Strategic initiatives, such as transformation programs, are yielding cost savings.

Company Performance

Thai Union demonstrated resilience in Q2 2025 despite a 5.4% decline in sales year-on-year to 16,590 million baht. The company achieved a record gross profit margin of 19.7%, attributed to effective cost management and strategic initiatives. The adjusted net profit saw a 13.2% increase year-on-year, highlighting the company’s focus on profitability amid challenging market conditions. InvestingPro analysis reveals the company has maintained dividend payments for 31 consecutive years, currently offering an attractive 7.25% dividend yield. InvestingPro subscribers can access 8 additional key insights about Thai Union’s financial performance and market position.

Financial Highlights

• Revenue: $33.39 billion (missed forecast of $34.19 billion)
• Earnings per share: $0.29 (exceeded expectations)
• Gross profit margin: 19.7% (record high)
• Adjusted net profit growth: 13.2% year-on-year

Earnings vs. Forecast

Thai Union’s EPS of $0.29 surpassed forecasts, indicating stronger-than-expected profitability. However, revenue fell short by 2.34%, marking a significant deviation from projections. This revenue miss contrasts with the company’s previous trend of meeting or exceeding forecasts, signaling potential challenges in sales execution or market conditions.

Market Reaction

Despite the revenue shortfall, Thai Union’s stock rose by 5.08% in after-hours trading, closing at $12.40. This increase reflects investor confidence in the company’s strategic direction and profitability improvements. The stock’s performance stands out against its 52-week range, with a low of $8.60 and a high of $15.80, indicating a positive market sentiment. Based on InvestingPro’s Fair Value analysis, the stock appears to be trading near its fair value. The company has shown strong momentum with a 26.56% year-to-date return and maintains a beta of 0.89, suggesting lower volatility compared to the broader market.

Outlook & Guidance

Looking ahead, Thai Union maintains a cautious outlook with full-year sales guidance of a 1% to 2% decline. The company anticipates a gross profit margin between 18.5% and 20.5%, reflecting continued focus on cost management. Strategic initiatives, such as automation and digitalization, are expected to drive future growth.

Executive Commentary

CEO Thirapong Sansiri expressed confidence in the company’s competitive position, stating, "We are confident that with a tariff of this level, we have great opportunity to compete." CFO Ludo Viganier highlighted the financial achievements, noting, "Our gross profit margin at 19.7% is a record high for us."

Risks and Challenges

• Supply chain disruptions could impact production and sales.
• Currency fluctuations pose a risk to profitability.
• Market saturation in key segments may limit growth opportunities.
• Tariff changes could affect competitive dynamics.
• Raw material price volatility could pressure margins.

Q&A

During the earnings call, analysts inquired about the impact of US tariffs and the rationale behind Mitsubishi’s increased investment. The company detailed its strategies for navigating tariff challenges and emphasized the strategic value of Mitsubishi’s partnership in enhancing its global production network.

Full transcript - Thai Union Group PCL (TU) Q2 2025:

Nongwang Kironpai San, MC/Moderator, Thai Union: Good morning, everyone. Welcome to Thai Union’s Analyst Meeting for the 2025. My name is Nongwang Kironpai San, your MC today. First of all, I would like to introduce our speakers. First, Kun Thirapong Sansiri, our President and CEO Second, Mr.

Ludo Viganier, our Group CFO and last but not least, Kunpinjada Seng Seng Seng Mahan, Head of Investor Relations. Without further ado, I would like to invite Controller Peng to begin the presentation.

Thirapong Sansiri, President and CEO, Thai Union: Good morning to all the analysts joining us today and representatives from the financial institutions. Today, I am going to report on the results for the second quarter. For the most part, the profit was sales was at billion. There’s a bit of a drop, 5.4% year on year. Nonetheless, mostly the drop is due to the foreign exchange impact in Thai baht terms, and it’s a 4.7 impact and organic sales dropped by only 0.7%.

In the second quarter, have many things happened. For instance, The U. S. Tariffs, and this has disrupted our operations quite significantly. And we have the new tariff announcement.

At first, we were looking at 36, and this was something quite new to us. And it was limited there was a limited time frame for us to ship our products out in the fourth to the fifth month and in the sixth month. And when I say disruption, I’m talking about not just impact impact in The US, but also our we were looking at results from the tariffs this time around, and everyone was, of course, in a state of confusion. In the second quarter, nonetheless, we in terms of our profit margin, it is in a favorable it’s in favorable territory. It’s in line with our plans.

We’re looking at 19.7% gross profit margin, and I’m confident that moving forward, we will see even higher numbers higher than 20%. And if you take a look at our operating profit, the adjusted operating profit, which does not include our transformation costs, we grew by 3.2% year on year, and our operating profit margin is at 6.4%. Our net profit has also grown. The adjusted net profit grew by 13.2% year on year. Overall, for the second quarter, this is a quarter where all of our business categories have returned to positive territory, especially in our branded business in Europe.

And otherwise, it’s seasonal. We’re looking at the summer season where sales are already strong. On the next page, you can see a clearer picture of our transformation cost in the second quarter at $233,000,000 baht. And we grew by 13.2%. And if we do not include those items, we grew 4.4%.

And we want to emphasize our earnings per share. Earnings per share for us increased 18.5%. This is partly not just due to our operations, but also our buyback program, our share buyback program. And this is to increase the return to our shareholders. And the EPS was at 0.32 per share.

And for the first half of the year, our sales were at TWD 63,170,000,000.00. Overall, you’ll see that there’s been a drop at of 7.8% year on year. Our gross profit margin is strong, though. It’s at 19.3%. And the other adjusted numbers, our net profit has grown 11.2 year on year.

Our net debt, it has increased from 0.9 to 1.1x, but that is in within our comfortable range for us. And the reasons behind this are due to our dividend payout and our share buyback program. These are the main reasons. We have inventory increased inventory as well as in the past, and this is in line with the season. And it’s nothing that we are concerned about, and we are confident in the second half of the year, our net debt to net debt to equity will decrease as we will not have any share buyback to record.

On next page, you can see that our share buyback, we are a very we are a company that is very active in this regard. We have four programs. The first two programs, we’d increase capital already. And the third and the fourth programs just completed at the end of the year. And I would like to reassure you that our share buyback is to be it’s not that we’re buying the shares to sell them off again.

We want everyone to rest assured. And on the next page, this is about our dividends. As always, in the first half of the year, we pay at about 59% of our profit or a point three five per share, and this is higher than in the past two years, whether it was 2023 or 02/2024. So the first half of this year is a higher level for the

Ludo Viganier, Group CFO, Thai Union: same. And

Thirapong Sansiri, President and CEO, Thai Union: the ex dividend date is in the August 15. And the payment date is September 1, and we are confirming this date. And for me, the last thing I will discuss with you today is the announcement of our intention the intention to buy shares of TU from six to 20%. And you can see from the letter of intent from Mitsubishi that they would like to increase their shares up to 20%. And why 20%?

This is because at 6%, all they do is record the dividends. What they are hoping for is, in addition to being a business ally ally with us, they also want to record equity, meaning profit and loss. Mitsubishi is not a stranger to us. Mitsubishi is a close friend of ours. They have invested in our business since 1991.

And we do have a director from them since we have had a director from from them since 1991. And why that they decided to increase their investment? One reason is, I believe, that if there there’s a change in the a generational change in the executives over the thirty or so years that they’ve been with us, there has been change in the organization. Their vision has changed, their strategies have changed. And in addition to this, the global business has also transformed over the years.

I, myself, have had the opportunity to meet with Mitsubishi every two times a year, and this has been the case for over many years now. We have shared we have exchanged experiences, knowledge. We the business is different these days. Consumer behavior has transformed. Customer channels are changing.

In addition to this, the business models have also evolved. And so they have reviewed their portfolio in terms of investment, and they believe that their diversified investment, which partly was in seafood, especially in Asia, whether it’s in Vietnam or in Indonesia. And I feel that they realize that today, investing that is very spread out is not very synergistic. It’s not strong or deeper alliance in terms of business to strengthen business. And that is, I believe, the rationale for their desire to increase their investment to 20%.

And we believe that this will lead to us being able work together and better. And the price that has been diluted is 12.55, and this is an all or nothing condition. And TE will become an associate of MC. Our investor relations has shared a press release, serious press releases that Mitsubishi has issued. In this transaction, I only learned about the Board’s decision, the main Board from Mitsubishi.

And they also announced this in their analyst meeting yesterday. And this was their demonstration of the significance of this investment. If you have any questions, we can discuss this further. And on the next page, you can see that Mitsubishi, its network, and it’s mostly in Japan. Torii is a company that is the largest, world’s largest trader of fashion grade tuna.

And it supplies sushi, other species like shrimp and salmon. They’re the biggest in Japan. And these are businesses that we have been involved in for the long term. And even though they have a small shareholding in our company, their strategy is perhaps to invest in many countries. But I believe that we will work more together and they will consolidate their investments.

More consolidation will be seen in terms of their investment. They will be able to increase and improve their cost efficiency. Cermak, this other company of Mitsubishi, they have investments in Canada, and it is the second largest salmon farming organization in the world. Cermak is a part has been a partner with us. They sold us raw materials for ingredients both in Thailand and for Ameralliance in France.

And our alliance in France, we’re we also sell to other organizations.

Ludo Viganier, Group CFO, Thai Union: And

Thirapong Sansiri, President and CEO, Thai Union: I’m confident that we will work together. We’ll continue to grow. Mitsubishi is will be a significant partner for us. The next company I’d like to mention is NoSun. They produce aquaculture feed.

They are one of the main aquaculture feed producers in Japan in specializing in fish feed, whether it’s kanbanji or hamachi and other fish species. We have spoken with them, and we believe that there is great opportunity for more collaboration between the two organizations. And they also have investments in pet food. Mitsubishi is the owner of 100% owner of the company known as Petline, and this is one of the leading companies in Japan. And in the past, we may not have interacted with them so much, but we believe that in the beginning, this is a low hanging fruit that will lead to expansion into these various businesses for us.

And Mitsubishi, just for a reference for you, based on 02/2024, their profit was they have a profit of $6,000,000. And they have investments in chemicals, commodities. And food is one of their groups, one of their main business groups. Thai Union, in the past, we continue to do business with them, whether it’s in terms of frozen business, salmon and pet food. These are examples of business that we’ve had with Mitsubishi over the years.

And we’ll go into more detail about our operating results, and we’ll return to this topic later. So I’d like to hand things over now.

Ludo Viganier, Group CFO, Thai Union: Thank you. Thank you, Kontoor Pong. I’m very happy to be with you this morning. I want to start, first of all, with our five years picture. I think one of the very good development of this quarter is really our gross profit margin, okay?

Gross profit margin at 19.7%. This is a record high for us. And you will see this is mostly coming from our ambient and frozen gross profit margin, while the pet care and the value added are declining a bit. So very good achievement. It’s a real performance.

We don’t have any one off in this one. It’s really coming from the sustainable performance of the company. We do expect also this high gross profit margin to remain in Q3 and in Q4, and that’s why you will see in the guidance. We have been upgrading our guidance for the whole gross profit margin for the whole year. Our top line is still a bit soft, okay, declining by 5.4%.

I will elaborate in the next slide where it comes from. And you can see the net profit margin is improving, 4.5% adjusted, 3.8% reported. We are in a much better track. I think Q1 was a bit soft. We told you we were not happy with our performance in Q1.

Q2, clearly, there is a catch up, and we want to confirm that in the next quarters. Just a quick focus on the top line impact. The FX changes we are facing are very violent. You can see here the USD rate has been declining by 10% compared to last year, euro by 5% and GBP by 4.6%. So of course, we have a very significant portion of our revenue, which are denominated in USD, in Thai baht, in GBP or in euro.

So this has a very significant impact for us. So I told you in Q2, our top line change is minus 5.4%. On this one, GBP 4,700,000,000.0 is explained only by the FX, okay, and mostly coming from the USD and a bit also from the euro and the GBP. The organic is still declining, okay? It’s 0.7%.

But you can see compared to Q1. In Q1, the organic growth was minus 6.9%. Now we are almost at breakeven. And definitely, in Q3 and Q4, we want the organic growth to be back to profit, okay? We don’t want to be negative on this part.

And then Kun Kwon will elaborate on the view by category. On the raw material prices, I think Q2, we don’t have big surprise. It was very much aligned with our expectation. The tuna price stand around $15.10 dollars for Q2. For the rest of the year, we don’t expect very significant changes, okay?

We don’t expect very violent increase or decrease. We do expect the tuna price to kind of remain stable. The shrimp prices have been softening. If you remember, in Q1, we told you they were high and usually high for two quarters in a row. Now it’s 139 baht per kg, which I think is more much more in line with our expectation.

On the salmon price, same situation in Q1, we are enjoying some low salmon price since the beginning of the year, okay? And this is good for our chilled business in France and also for our frozen business here in Thailand. And again, we don’t expect significant change to happen in the next quarters to come, okay? And this is, of course, all these key materials, the fact there is not much volatility is one of the key driver for our gross profit margin recovery in Q2. On the FX, I already mentioned.

So you can see here, the average USD was 33.1 And in July, it has been declining a bit further. I think now we are within the range of 32.5%, 32.6%. Let’s see what is going to happen on this one. But clearly, tieback has been strengthening since the beginning of the year versus other key currencies, and it has some negative impact in our top line. Euro has been rebounding back to 37.5%.

Let’s see also the next quarters and the sale of the GBP. So you can see the USD situation is very different from the other currencies. Just a quick overview on our ratio. ROE and ROCE are improving compared to Q1. I think we are on good track.

The inventory days are kind of flat compared to what we had in Q1, but they are increasing compared to what we had in Q4. This is absolutely normal, okay? Just for you to remember, in Q2, we build up our inventories, especially for our business in Europe. Why? Because Q2 and Q3 are the very high quarters of sales over there.

So we always have this kind of mechanism. Now we can have a look here on the ratio on the right, net debt to EBITDA. So here, it’s increasing. It was 4.5 In Q1, this is 4.7%. In Q2, the key driver for this one is really the share buyback activity, okay?

And you will see that in the next slide. We don’t have any concern on this one. The expectation is in Q3, it will kind of plateau. And then in Q4, we should start seeing some decrease of the on the net debt to EBITDA ratio. On the net debt to equity, a small increase, also 1.1.

We are still in what we call our comfort zone. So we are very comfortable with these numbers. Quick overview here on our net debt situation. So net debt has been increasing since the beginning of the year from baht 53,000,000,000 to baht 59,000,000,000. And you can see the key driver is the box on the right, the red box, which is the equity by the share buyback activities for BRL 4,300,000,000.0.

In terms of free cash flow, we are happy with the free cash flow generation in Q2, okay? We told you in Q1, the EBITDA was a bit weak. From our point of view, in Q2 is much better. We are facing an increase in our change in net working capital again. Again, this is mostly inventory buildup, nothing to worry about.

And the CapEx at 1,900,000,000.0 are really within our guidance and within our expectation. All the usual boxes, taxes, interest, dividends are fully in line with our expectation. You can see also the equity has been dropping from baht 56,000,000,000 to baht 52,000,000,000. And again, this is the impact from the equity treasury shares. You need to remember that we do record this one in negative amount in part of the equity.

And maybe one last thing from this slide is also the cost of debt is reducing, okay, on average over the year 2024. You can see on the box on the top left. Last year, was 3.65, and it has been reducing now to 3.38%. So we see the impact of the overall decrease of the interest rate in the world, and we are also benefiting from this. This is one of the key driver for our finance cost to decrease year on year.

An update on the BEPS two point zero, the Pillar two. If you remember, at the beginning of the year, we told you we’re expecting an impact between 300,000,000 to $350,000,000 baht from these new measures. We are revising down the impact to 100,000,000, 150,000,000 baht for the whole year. Why? There are two key drivers.

First of all, you know that for us, the key impact is really in Thailand, okay? And our profitability in Thailand is lower compared to our expectation overall. And the second point is our tax rate in Thailand is higher compared to expectation. And it’s higher because in some of our businesses like TFM, please stay after, we have the only significant TFM after. We had the end of our BOI for a few months.

So for a few months, we have our effective tax rate, which is a bit higher. There will be a new investment being performed and a new BOI to come in. But overall, the impact is our effective tax rate is a bit higher compared to the expectation. At the end of Q2, we already recorded something like 31,000,000 baht for this tax Q2, and we do expect for the whole year to be around 100,000,000 to 150,000,000. Just for you to remember also in terms of ETR, we expect for the whole year an increase by 2% to 3% compared to our historical effective tax rate.

The last one is an update on Sona and Tailwind. The overall picture is we are on track with our expectation. Let me start first with Sona. Sona, you know we told you that the in year savings for 2025 amounts to $15,000,000 At the end of Q2, we had $5,000,000 and this is supposed to accelerate in Q3 and in Q4. We told you we want to reinvest a portion of these savings, okay?

So all of this is not impacting our bottom line, but only a portion of that. You have some details on the below, but overall, the message is we are on track with the expectation. For you to remember also, so now the vast majority of this program will end by 2025, okay? In 2026, the activities will be extremely minimum on Sonae. And then on the right, we have tailwind.

So here, the target was $17,000,000 OP uplift for the whole year. After six months, we had $7,000,000 okay? And again, here, we are on track with our expectation. Please keep in mind that the timing from tailwinds a bit different from Sonae. Here, the plan is to go and to end by 2026, okay?

So overall, the message is these two transformation program, which are extremely important for us, are on good track. We were also very happy to have decided to launch these two programs since last year. And I think we are in a much better situation right now to face with all the uncertainty, the tariff issues and the competition with these two programs, which are already up and running. And now I will hand over to Kun Kwon for the business performance.

Thirapong Sansiri, President and CEO, Thai Union: Thank you, Ludo. Thank you, everyone. For the breakdown by business category, let’s begin on the first page here. You can see that in the first half of this year, we had a sales contribution for the first categories. You can see for Ambient, it’s the biggest portion for us, the biggest contribution was at around 50%.

And Frozen is at around 29%. Ed Carries at around six 14%. And Rally Rated is around 8%. But the key thing that we would like you to take away from this page is in terms of our gross profit margin for each category. You can see that they are in a range that is in in line with our long term target.

Like, for instance, the Ambien business, the gross profit margin is at 20.8, and the range that we gave you was 20 to 22%. In terms of frozen, it’s at 12%, and the range was 10% to 12%. And Pet Care is at 25.1% for 2025, and the range for ITC was 23% to 25%. And for value added business, our gross profit margin is at 27.1%, and the long term target was at more than 25%. Taking a look at the second quarter for our Ambient category, you can see that our sales were at 16,590,000,000.00.

This is a drop year on year by 4.5% mainly due to the FX impact and lower average selling prices resulting from the lower tuna costs. At the same time, our sales volume was relatively flat compared to the same period last year. And this is a result of the impact from The US with our private label there that has declined, and this is due to the uncertainty of the tariffs. Nonetheless, we have communicated it with you that we continue to boost our sales and our volume for the branded customers, and we continue to do this. And this is why the volume in The US and in Europe have increased.

At the same time, if we take a look at The Middle East, you can see that we have increased demand from that region. Our gross profit margin for the European sector is at 22%, and this is the highest in the past eleven quarters. And this is mostly due to tuna cost and our low tuna cost for inventory. If you take a look at the first half for our Ambient business, this is for your information. What is important here is our performance in the first half.

You can see that gross profit margin has increased to 20.8%. And this is the result, the same as in the second quarter. It’s due to our inventory. We have stocked tuna at lower cost, and we have higher margin and we also have a promotional push for our branded business as well. Moving on to the second quarter for the frozen business, you can see that our sales were around 10,000,000,000, decreasing 7.4% year on year due to foreign exchange, just like the FBA business.

And another impact was the soft sales of the private label shrimp in The U. S. Market. Nonetheless, in the frozen business, this is a business that includes chilled salmon, shrimp, and our beef businesses done by TFM. And TFM in this quarter, they have a very clear growth performance, and this has offset the decline in our first sales in the past quarter.

If we take a look at the sales volume, you can see that it has increased 8.3% year on year, mostly due to the sales volume growth in the fee business. And lastly, the gross profit margin has gone up to 11.7%, increasing 1% year on year. And this is in line with our target range that we told you earlier of 10% to 12%. This is a margin that has expanded primarily due to the Feed and Chilled business. Looking at the first half for the frozen business, the gross profit margin is also favorable.

And this is our chilled and feed business. Our gross profit margin is at 12. And on the right hand side, you can see that TFM, which is our listed subsidiary, they have revised their target guidance. And the sales right now are forecasted to increase by seven to 9%. And this is we have lowered this from the previous target.

Nonetheless, our gross profit margin has been adjusted upwards. It is now at 19 to 21% for TFM. And these are the two numbers that I want you to take notice of. In terms of the Pet Care business, our sales were at TWD 4,400,000,000.0. That’s a decrease of 1.5% year on year, and this is mostly due also from the FX impact and average selling prices that are lower.

If we take a look at the graph on the right hand side, you can see the proportion of the premium mix compared to the mid priced mix. In the last year, we had a proportion for the premium mix that was quite high. And this was an exceptional this is an exceptional base because usually, our target for premium mix is at 47% to 50%, but our Pet Care business was able to up to achieve 54.4%. This year, it has been increased to 46.3%, and this is one reason for the drop in the profit. In terms of sales volume, it has increased 10% year on year, mostly because of increased demand from our U.

S. Key customers. And we continue to see demand from Europe and Asia and Oceania that is lowering. And gross profit margin is at 25.6%, which has gone down by about 6% from last year. The reason is that this last year was an all time high in our Pet Care business, and this is also due to a high premium mix.

And the gross profit margin has dropped because of the drop in premium mix and higher depreciation. And this is from our ITC factory expansion and also the increase in the minimum wages here in Thailand. And on this page, we’d like you to take a look at ITC adjusting its guidelines for the entire year, taking into consideration the 19% tariff that is effective from the August 1. The sales growth expectation is then is therefore 3% to 5%. Gross profit margin is 23% to 25%.

And our CapEx has been decreased for iTero to from TWD 1,500,000,000.0 down to TWD 1,200,000,000.0. And lastly, our value added category, you can see that sales is at 2,370,000,000.00, decreasing 9.2% year on year. And this is a decrease in profit in all of our segments. And we have value added, we have packaging, and we have ingredients and supplements and byproducts in this category. And every category, the profit has dropped except for the ingredient business where we have seen an increase in sales.

In terms of sales volume, it has increased by 2% year on year, and the driving factor is the sales of our product and packaging and ingredients as well. And gross profit margin is at 26.3% in the second quarter, And this is in similar to what we had in the same quarter of last year. And we have the by product ingredient and packaging higher margins to thank for this. The first half of the value added business, we would like to highlight that this category has a high profit margin at 27.1% for this quarter, and we expect in the future that this business category will have increasing growth margins. And I would like to pass things back to Kuni Thirapol to speak about The U.

S. Tariffs and the outlook for 2025. Thank you. I’d like to take this opportunity to go down into detail about the tariffs for all of you once you want. For the most part, the announcement for Thailand, you know, is at 19%, The US tariffs.

And therefore, I am confident that Thailand, especially Thai Union, we remain very competitive. And I believe that with a tariff of this level, we have great opportunity to compete. What we need to keep in mind and monitor is our domestic consumption because we believe that the prices in The U. S. Will be adjusted upwards more or less due to the increased tariffs.

Nonetheless, as you analysts perhaps know better than I do, Speaking with various experts, many agencies say that in the short term, the first few years, The US economy will continue to be strong. And On access. With the access to foreign markets at 0%, Their negotiating power I think negotiating power of all the countries is should be 0% for all the countries. Therefore, The US exports will increase, and therefore, their manufacturing sector will improve their employment. Their labor market is quite tight.

It will become even tighter, And this may lead to an adjustment in the wage, increasing and improving wages. And I believe that there will be a trend for the interest as well. It perhaps will lower. And this will help the purchasing power of consumers to improve. This is what we expect.

We’ve discussed this internally. We can usually monitor this. The key highlight on this page, aside from Thailand at 19%, which is the final tariff. What is important is India is at 25%. China, we don’t need to talk about that, that’s 30%.

Ghana has adjusted upwards to 15%. And what is interesting is Ecuador, which I said once that it is a winner in terms of tariffs. It increased from 10 to 15%. So the gap between us and Ecuador is only 4%. Therefore, I believe that overall, we should be able to compete better.

And we should have less worries. I mean, of course, we do have concerns, but those concerns are less than before. And in each category, take a look on the next page. In terms of our ambient business, we have combined the base tariff. Normally, we have the base tariff at 12.5%.

And Ghana only is the only country that has a base tariff of 0%. Uganda has the lowest total tariffs of 15%, and we have repaired our operations there to have Ghana export to The US. And take a look at Seychelles. This is also another production base for us. The total tariffs is at 22.5%.

Thailand is at 31.5%. And this is the same as The Philippines and Indonesia. So there, we don’t have any advantage over them. Ecuador is at 27.5. Vietnam is at 32.5%.

Therefore, we would like you to rest assure that in terms of our Ambien business, I am confident that in this situation, it’s a very favorable situation for us. It’s even better than the 36% scenario. Our production base in Thailand, we will continue to maintain our competitiveness. And this allows us to it makes us more flexible in terms of business and our global network. In Lyon, Georgia, from now on, they will have a bigger world.

And in Vietnam and Seychelles, we have more flexibility. And we have we are ready. We’re poised to do to take action. Our raw ingredients, the prices are different in the various areas, you may ask that, but we can use the benefit of our network to create the best benefit for our organization. If we take a look at the frozen business, this is even more favorable because the tariff helped Thailand significantly.

Thailand is at 19%. Ecuador is at 18.8%. You must understand that before this, other countries, they had anti dumping duties and and or also countervailing duties. If you combine all that, Ecuador will be 18.8%. Indonesia is at 22.9%.

India is at 34.8%. Vietnam is at 58.1%. But we must we have to invest in India, and we continue to monitor things there closely. I think that in India, we will continue to keep an eye on things there. Their government, of course, will not be complacent Time out, in terms of our frozen business, we gain a lot of benefit and advantage from the tariffs.

And on the next page, in terms of our pet care business, we have always told you that our premium product are wet based products, especially cat foods. There are only three main competitors, Thailand, Vietnam and China. Therefore, you can, again, rest assured, Thailand, we are at 90%, Vietnam is at 20%, and that 20% today, Vietnam is our is a small scale player. We are 10 times bigger than them. Therefore, our Vietnam’s competitive ability has not increased.

We don’t expect any significant change for Vietnam. China is at 30%. And in terms of pet care, are again, we are happier, less concerned, less worried, but we are not complacent. There are a lot of changes. We are keeping an eye on Vietnam.

We have a production base in Vietnam. We are ready to change in the future. We are flexible. This is our main plan. Aside from that, everything that we have done in the past up until now, the transformation programs, for instance, and, of course, you may not be happy about this because of the cost involved, but I would like to tell you that we are very lucky to have started this in 2024.

I believe that if we hadn’t started in 2024 and we began after the tariffs were announced, that we would be facing much difficulty. With our cost resetting, especially when the tariffs took place, we have been very focused on this. We are not going to stop. Regardless of the impact of the tariffs, whether it’s good or better than expected because cost and quality are two key essential factors that will make us even more competitive in the future. Change will happen.

There will be things that we cannot expect. But internally, we will continue with these efforts. We will be very serious and focused on these. And in terms of our commercial focus, in every category, whether it’s our ambient business, branded, from our cost resetting, our brand is even more cost competitive than before, making us even stronger in terms of competition in volume and market share. And we also have our marketing support, which we will continue with.

We want our 5%. We will continue. We will not stop. We hope that our brand will have a bigger role and that we will be able to create to be leaders in every business that we’re in, market that we’re in. Our OEM business, whether it’s ambient, we will continue to push growth there.

With the frozen business, we don’t need to worry about that. We have adjusted things. We have adjusted our team, our structure, and we will see more opportunity there. In our feed business, you will have the chance to listen from the executives at TFM. They have done extremely well.

And the future is in Indonesia, we said before. But in Thailand, we can create new opportunities and in other countries as well where we hope to see Thai Union female grow. The pet care business is the same, thanks to our tailwind project. We hope that whether it’s in terms of cost or M and A or growth, new markets, new categories or ITL, you can see that their results, their top line growth, we are not stopping. We will continue to push forward.

And this is our strategy that we will push on with. And the cost, I would like to tell you that in terms of our sonar program for TU, the cost will end at the end of this year. So don’t worry about cost in that regard. For Tailwind, the cost will be concluded next year, and that is information for you. Our guidance, our outlook, our top line growth, we want to be realistic because in the first half of the year, we had a minus 7%.

But in the second half of the year, we expect things to grow. Our growth, we expect to be at negative 1% to negative 2%. This is based on the current exchange rate. And we hope that if the Thai Buy does not change so much, Our sales will improve. Profit margin, we want to push forward with this.

Our guidance has been adjusted to upwards to 18.5% to 90.5%. We are looking at the upper end of the range that we provided. Our SG and A is in the same level, 13.5% to 14%. CapEx, we are going to manage it within a number that is lower than 4,000,000,000 from this point forward. For the next few years, we don’t expect to expend anything that much because our capacity we already invested in beforehand and it was sufficient enough.

We will focus more on investment in automation, digitalization, AI, all to be enablers to increase our effectiveness and efficiency. And as per our dividend policy, it remains the same. We will continue to pay out two times a year at least 50. And this is the guidance for you for today.

Nongwang Kironpai San, MC/Moderator, Thai Union: Okay. So now I would like to thank everyone for joining us today. And now we will take a ten minutes break and followed

Thirapong Sansiri, President and CEO, Thai Union: by the TFM

Nongwang Kironpai San, MC/Moderator, Thai Union: result announcement. Thank you very much.

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