Post on 18-Jan-2021
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2020 3rd Quarter Results
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• 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
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by the Rules Governing The Listing Of Securities On The Stock Exchange Of Hong Kong Limited or any applicable law.
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• This Presentation contains statements that reflect the Company's intentions, beliefs or expectations about the future or future events (the "forward- looking
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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
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Strategies and Outlook
Appendix
Table of Contents
Financial Summary of 2020 First 3Qs
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Financial Summary of 2020 First 3Qs
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First 3Qs 2020 First 3Qs 2019 Y-o-Y Change
Hogs produced(000 heads) 15,324 15,977 -4.1%
Hogs processed(000 heads) 33,165 40,971 -19.1%
Packaged meats sold(000 metric tons) 2,383 2,439 -2.3%
US$ Million First 3Qs 2020 First 3Qs 2019 Y-o-Y Change
Revenue 18,767 17,193 9.2%
EBITDA (1) 1,953 1,731 12.8%
Operating profit 1,476 1,295 14.0%
Profit attributable to owners of the Company (1) 890 820 8.5%
Basic earnings per share(US$ cents)(1) 6.04 5.58 8.2%
Consolidated Financials Overview
Key Operating Data
Key Financial Data
Note:1. Before biological asset fair value adjustments
5
199.83
134.39
161.57
198.03188.42
125.04
96.32
134.41 131.29119.74
110.83
30.8929.66 30.20
32.56 32.0930.77 31.40
34.3834.22
28.96
32.66
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25
30
35
40
45
50
55
60
65
70
0
50
100
150
200
250China U.S.
Business Environment
• In the first three quarters of 2020, hog prices in China remained high.
The average hog price was RMB34.7 per kilogram (“kg”), an increase
of 105.3% year-on-year.
• In the U.S., the average CME hog price during the first three quarters
of 2020 was US$0.94 per kg, a decrease of 19.0% year-on-year.
• The number of slaughtered hogs in China fell 11.7% to 362
million heads in the first three quarters of 2020 and increased by
15.1% to 110 million heads in the third quarter.
• The number of slaughtered hogs in the U.S. increased by 1.7%
to 95.84 million heads in the first three quarters of 2020.
USD/Kg RMB/Kg
Hog Prices in China and U.S.Number of Slaughtered Hogs in China and U.S.
Million heads
Source: Chicago Mercantile Exchange and Ministry of Agriculture of the People’s Republic of ChinaSource: National Bureau of Statistics of China and USDA
Since the beginning of 2020, COVID-19 has heavily impacted the global economy. In China, as the pandemic was brought under control, our
business operations quickly resumed. The Company achieved remarkable results in product mix optimization, new product launches, price
adjustments made in last year and synergies between China and US operations, with operating performance for the first three quarters
improving substantially year on year. In the US, the virus spread rapidly in the second quarter, leading to production restrictions, increased costs
and drops in sales, which put pressure on our operations. However, our performance improved In the third quarter. In Europe, all three
segments continued to improve, leading to a significant increase in profitability.
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5
10
15
20
25
30
35
40
0
1
2
3
4
5
6
2018/1 2018/7 2019/1 2019/7 2020/1 2020/7
U.S. China
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Operating Profit and
Margin (1) Packaged Meats(2) Fresh Pork (2) Hog Production (2)
US$ 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
Packaged Meats Business Achieved Remarkable Results, Bringing Revenues
and Profits to Record Highs
-10-3
Jan-Sep 2019 Jan-Sep 2020
194 194
5.2%3.7%
Jan-Sep 2019 Jan-Sep 2020
497
650
18.4%
21.1%
Jan-Sep 2019 Jan-Sep 2020
709
877
11.6%10.9%
Jan-Sep 2019 Jan-Sep 2020
Operating Profit
Operating Profit Margin
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U.S. Business Stepped Up Efforts to Prevent COVID-19 to Ensure Employee Safety and
Stable Operations, Proactively Adjusted Product Structure and Business Strategy
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
501
464
5.0% 4.6%
Jan-Sep 2019 Jan-Sep 2020
Operating Profit
Operating Profit Margin
601
39710.9%
8.0%
Jan-Sep 2019 Jan-Sep 2020
-20
208
-0.4%
3.8%
Jan-Sep 2019 Jan-Sep 2020
26
-36
1.1%
-1.5%
Jan-Sep 2019 Jan-Sep 2020
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Hog Production (2)
Profits of Packaged Meats and Hog Production Businesses Continued to
Grow, Fresh Pork Business Significantly Improved
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
85
135
5.5%
7.6%
Jan-Sep 2019 Jan-Sep 2020
Operating Profit
Operating Profit Margin
46
65
6.8%
8.6%
Jan-Sep 2019 Jan-Sep 2020
-18
10
-2.0%
1.0%
Jan-Sep 2019 Jan-Sep 2020
54
72
10.6%
14.2%
Jan-Sep 2019 Jan-Sep 2020
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Strategies and Outlook
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• Committed to our strategy of launching new products,optimizing our product portfolio, increasing sales andimproving sales management to consolidate our marketposition;
• Seize opportunities brought on by increasing hog supplyand decrease in hog prices to increase capacityutilization and slaughtering volume;
• Further expand meat import channels 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 advantages of the integrated business model andfurther tap the potential to achieve steady growth inperformance;
• Adjust the product structure in the packaged meatsbusiness according to changes in sales channels toincrease profitability;
• 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 marketfluctuations through 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 affect 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 it to prevent risk, consolidate its leading position
in the industry, and maintain the Group’s sustainable development.
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Appendix
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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
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 vegetables series
Plant-based protein products
“SoyFit” plant-based meat
Plant-based sausage
Plant-based burger steak
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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.
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All Natural
Breakfast Patties
Product Innovation
Wholesome Portable Meals
Premium Deli Franks
Pulled Pork
Snack Trays
Smoked Ham
Deli Pre-Slice Meats and Cheeses
Breakfast Sausage
Breakfast Bites
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Product Innovation
Hot Dog
Dried Sausage Chicken Products
Mini Burgers