powerpoint presentationwebcast.archive.wisdomir.com/files/10230/l1/... · 2020. 8. 11. · usd/kg...
TRANSCRIPT
-
0
2020 Interim Results
-
1
• This presentation and the accompanying slides (the “Presentation”) have been prepared by WH Group Limited ("WH Group " or the "Company") solely for
information purposes.
• This Presentation does not constitute or form part of and should not be construed as, an offer or invitation to acquire, purchase or subscribe for any securities of
the Company nor is it calculated to invite any such offer or invitation nor shall it constitute any offer or sale of such securities in any jurisdiction. No part of this
Presentation shall form the basis of or be relied upon in connection with any investment decision, contract or commitment whatsoever.
• This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company makes no
representation or warranty, express or implied, whatsoever, on the truth, accuracy, completeness, fairness and reasonableness of the contents of this
Presentation. The Company reserves the right to amend or update all or any part of this Presentation at any time, but the Company shall not be under any
obligation to provide the recipient of this Presentation with any such amended or updated information or correct any inaccuracies herein unless otherwise required
by the Rules Governing The Listing Of Securities On The Stock Exchange Of Hong Kong Limited or any applicable law.
• This Presentation may not be all-inclusive and may not contain all of the information that you may consider material. Neither the Company nor any of its affiliates or
representatives make any representation or warranty, express or implied, as to the accuracy or completeness of the information contained herein or any other
written or oral communication transmitted or made available to any recipient. The Company and its affiliates and representatives expressly disclaim any and all
responsibility or liability based, in whole or in part, on any of the information contained herein, errors herein or omissions here from. In all cases, interested parties
should conduct their own investigations and analyses of the Company, its businesses, assets, financial conditions and prospects, and of the information set forth in
this Presentation.
• This Presentation contains statements that reflect the Company's intentions, beliefs or expectations about the future or future events (the "forward- looking
statements"). These forward looking statements are based on a number of assumptions about the Company's operations, its future development plans, market
(financial and otherwise) conditions, growth prospects and certain plans and objects of the management of the company, and are subject to significant risks,
uncertainties and other factors beyond the Company's control, and accordingly, actual results may differ materially from these forward-looking statements. You
should not take any forward-looking statements contained in this Presentation regarding past trends or activities as a representation that such trends or activities
will continue in the future. The Company expressly disclaims any obligation to update these forward-looking statements.
Disclaimer
-
2
01
02
03
04
1H 2020 Financial Summary
1H 2020 Business Review
Strategies and Outlook
Appendix
Table of Contents
-
3
1H 2020 Financial Summary
-
4
.
1H2020 (1) 1H2019(1) Y-o-Y Change
Hogs produced(000 heads) 10,400 10,582 -1.7%
Hogs processed(000 heads) 22,407 28,233 -20.6%
Packaged meats sold(000 metric tons) 1,575 1,610 -2.2%
US$ Million 1H2020 (1) 1H2019(1) Y-o-Y Change
Revenue 12,481 11,127 12.2%
EBITDA (1) 1,236 1,032 19.8%
Operating profit 925 765 20.9%
Profit before Tax(1) 848 685 23.8%
Profit for the period(1) 675 565 19.6%
Profit attributable to owners of the Company (1) 550 463 18.8%
Basic earnings per share(US$ cents)(1) 3.73 3.15 18.4%
Interim dividend per share (HK$ ) 0.05 0.05 -
Consolidated Financials Overview
Key Operating Data
Key Financial Data
Note:1. Before biological asset fair value adjustments
-
5
China41.8%
U.S.49.0%
Europe 9.2%
Packaged Meats46.8%Fresh Pork
44.0%
Hog Production 5.1%
Others and Corporate 4.1%
China59.5%
U.S.29.8%
Europe 10.7%
PackagedMeats
Presh Pork HogProduction
Others TotalOperating
Profit
%
% %
%
Total
12,481
Segment Revenue and Operating Profit
1H 2020 Revenue by Business Segments (1)
1H 2020 Revenue by Region(1) 1H 2020 Operating Profit by Region (2)
1H 2020 Operating Profit by Business Segments(2)
US$ million US$ million
US$ million US$ million
Total
925
Note:1. External sales2. Before biological fair value adjustments
Total
12,481
75.0%
23.8%5.0% 100%
(3.8%)
-
6
399
1,219
1H2019 1H20208.1%
42 59
178 144
5231
1H2019 1H2020
China U.S. Europe
94 94 94 94 94
236
489505
377
594
2015FY 2016FY 2017FY 2018FY 2019FY 1H2020
%
Cash Flows and Capital Structure
Interest-bearing Liabilities / Total Equity
Operating Cash Flow Capital Expenditures
US$ million US$ million
Dividend payout US$ million
Total:234Total: 272
47% of earnings
during the year (1) 40% of earnings
during the year (1)
30% of earnings
during the year (1)
41% of earnings
during the year (1)
Note :1,total dividend payout / profit attributable to owners of the company after biological fair value adjustments
US$ million45% of earningsduring the year (1)
58.4%
40.9% 38.9% 37.1%32.7% 31.8%
31/12/2015 31/12/2016 31/12/2017 31/12/2018 31/12/2019 30/6/2020
3,914
2,8783,198 3,119 3,092 3,114
-
1H 2020 Business Review
-
8
Business Environment
• In the first half of 2020, hog prices in China remained high. The
average hog price was RMB33.95 per kilogram (“kg”), an increase of
137.0% year-on-year.
• In the U.S., the average hog price during the first half of 2020 was
US$0.95 per kg, a decrease of 17.4% year-on-year.
• The number of slaughtered hogs in China fell 19.9% to 251
million heads in the first half of 2020.
• The number of slaughtered hogs in the U.S. increased by 0.5%
to 63.18 million heads in the first half of 2020 and decreased by
5.9% to 28.96 million heads in the second quarter.
USD/Kg RMB/Kg
Hog Prices in China and U.S.Number of Slaughtered Hogs in China and U.S.
Million heads
Source: Chicago Mercantile Exchange and Ministry of Agriculture of the People’s Republic of ChinaSource: National Bureau of Statistics of China and USDA
19,983
13,439
16,157
19,80318,842
12,504
9,632
13,441 13,12911,974
3,0892,966 3,020
3,256 3,2093,077 3,140
3,4383,422
2,896
2000
2500
3000
3500
4000
4500
5000
5500
6000
6500
7000
0
5,000
10,000
15,000
20,000
25,000China U.S.
0
5
10
15
20
25
30
35
40
0
1
2
3
4
5
6
2018/1 2018/7 2019/1 2019/7 2020/1
U.S. China
In the first half of 2020, the COVID-19 pandemic heavily impacted the global economy. In China, as the epidemic was brought under
control in the second quarter, our business operations quickly resumed and continued to improve with results improving substantially
year-on-year. In the U.S., the virus spread rapidly in the second quarter, leading to labor shortages, production restrictions,
increased costs and drops in sales, which put pressure on our operations and caused a significant decline in our performance.
-
9
Proactively responded to COVID-19 by adopting
effective measures to protect the safety of our
employees and maintain stable operations
Eying opportunities in the breeding sector to enhance
the competitiveness of our core packaged meats
business segment
Reduced frozen pork inventories to improve profits,
increased imports to fill the supply gap in the
domestic market
Profitability of packaged meats increased significantly
thanks to price adjustments, remarkable results seen from
product mix optimization and new product launches
Resumed Operations and Production in a Timely Manner,
Revenue and Profit Hit Record Highs
-
10
Operating Profit and
Margin (1) Packaged Meats(2) Fresh Pork (2) Hog Production (2)
US$ million US$ million US$ million US$ million
Note:1. Percentage marked in white on the bars represent Operating Profit Margin = operating profit / external sales2. Percentage marked in white on the bars represent Operating Profit Margin = operating profit / internal and external sales
-7-2
1H2019 1H2020
125
102
5.6%
3.0%
1H2019 1H2020
288
417
16.7%
21.1%
1H2019 1H2020
425
550
11.3%10.5%
1H2019 1H2020
Operating Profit
Operating Profit Margin
Resumed Operations and Production in a Timely Manner,
Revenue and Profit Hit Record Highs
-
11
U.S. Operations Step Up Efforts to Prevent COVID-19
European Operations Showing Strong Momentum
As the health and safety of our employees remains our
top priority, we stepped up efforts to prevent COVID-19,
recording approximately US$400 million in costs and
charges related to COVID-19
Adopted effective hedging strategies to ease the impact
of low hog prices on profitability
Proactively realigned product mix and business strategy
to improve the profitability of fresh pork business
European operations benefited from favorable market
conditions and improved management, profits of hog
production business increased significantly, fresh pork
business continued to improve, profits of packaged meats
business continued to grow
-
12
Proactively Realigned Product Mix and Business Strategy to
Improve the Profitability of Fresh Pork Business
Operating Profit and
Margin (1) Packaged Meats(2) Fresh Pork (2) Hog Production (2)
US$ million US$ million US$ million US$ million
Note:1. Percentage marked in white on the bars represent Operating Profit Margin = operating profit / external sales2. Percentage marked in white on the bars represent Operating Profit Margin = operating profit / internal and external sales
294276
4.6% 4.5%
1H2019 1H2020
Operating Profit
Operating Profit Margin
446
243
11.9%
7.1%
1H2019 1H2020 -15
116
-0.4%
3.2%
1H2019 1H2020
-62
-20-4.1%
-1.2%
1H2019 1H2020
-
13
Hog Production (2)
Profits of Hog Production Business Increased Significantly, Fresh Pork
Business Continued to Improve, Profits of Packaged Meats Business
Continued to Grow
Operating Profit and
Margin (1) Packaged Meats(2) Fresh Pork (2)
US$ million US$ million US$ million US$ million
Note:1. Percentage marked in white on the bars represent Operating Profit Margin = operating profit / external sales2. Percentage marked in white on the bars represent Operating Profit Margin = operating profit / internal and external sales
46
99
4.9%
8.5%
1H2019 1H2020
Operating Profit
Operating Profit Margin
27
34
6.2% 7.0%
1H2019 1H2020-7
2
-1.2% 0.3%
1H2019 1H2020
24
68
7.4%
19.1%
1H2019 1H2020
-
14
Strategies and Outlook
-
15
• Committed to our strategy of launching new products,optimizing our product portfolio, increasing sales andimproving sales management to consolidate our marketposition;
• Viewing the integration of the meat industry as anopportunity to increase market share of the fresh porkbusiness;
• Further expand meat imports to enhance marketcompetitiveness;
• Further enhance our integrated business model, move towards the upstream of the value chain by developing the hog production business and expanding the poultry business.
In China
Strategies and Outlook
In U.S. and Europe
• Adapt to changes in the business environment, andproactively adjust strategies
• Leverage the advantages of the integrated business model;
• Realign the product mix in the packaged meats businessaccording to changes in sales channels to improveprofitability;
• Promote technical transformation of the fresh pork businessto improve operational efficiency;
• Stabilize the profitability of the hog production business andimprove the ability to mitigate the impact of market volatilitythrough hedging;
• Enhance the scale and profitability of the Europeanbusiness through integration and utilization of theproduction capacity of the newly acquired businesses.
▪ Looking ahead, the situation surrounding COVID-19 remains grim, and there are still many uncertainties ahead in
terms of the global economic trends, geopolitical conflicts, trade tensions, and ASF, which will heavily impact global
economy and the industry.
▪ WH Group will take effective measures to protect the health and safety of our employees and maintain stable
operations. The Group is committed to giving full play to its global competitive advantages, seizing opportunities that
result from global changes and industry integration, which will enable us to prevent risk, consolidate our leading
position in the industry, and maintain the Group’s sustainable development.
-
16
Appendix
-
17
Low temperature products
American style products / Hunter Sausage
Smithfield-branded products
Shuanghui thick cut bacon
Marco Polo low temperature series
Product Innovation
High temperature products
Shuanghui Spicy Sausage
Shuanghui cooking sausage
Coobi cod sausage
Shuanghui new starch-free ham Sausage: King of the King
Leisure Products:Snack sausage / Hot spicy sausage
Chinese Style Products:
Deli/ Preserved meat / Braised vegetarian series
Plant-based protein products
“SoyFit” plant-based meat
Plant-based sausage
Plant-based burger steak
-
18
Innovative Marketing Approach
Accelerating video livestream marketing activities to
promote new products and enhance brand influence
• Our video livestreaming activities generated over one
hundred million views in total. Sales volume reached 160
metric tons, and sales revenue exceeded RMB 7 million;
• During the live streaming of the “T-mall 517 Food Festival”,
with the recommendation of top KOL Viya, Shuanghui Spicy
Sausages were sold out in 3 seconds after they went online.
The online flagship store traffic surged by 398,000, with sales
volume exceeding 100 metric tons and sales revenue
exceeding RMB 3 million.
Rejuvenate the brand by a
marketing campaign on TikTok
• Initiated the #CallMeHuoxuanfeng
Challenge on TikTok and became
a tile sponsor of an offline event
organized by TikTok – the closing
ceremony of the “in City” happy life
festival.
• The challenge generated 880
million views on TikTok, which
resulted in close engagement with
young consumers.
-
19
Product Innovation
Wholesome Portable Meals
Premium Deli Franks
All Natural
Breakfast Patties
Pulled Pork
Snack Trays
Smoked Ham
Deli Pre-Slice Meats and Cheeses
Breakfast Sausage
-
20
Product Innovation
Hot Dog
Dried Sausage Chicken Products
Mini Burgers
-
21
Investor RelationsTel: (852) 2922 0736
Email: [email protected]
mailto:[email protected]