Good morning, everyone. Welcome to Thai Union's Analyst Meeting for the First Quarter of 2026 Results Announcement. My name's Walanya Rijjatulum, I will be your MC today. First of all, I would like to introduce our management. First, Khun Thiraphong Chansiri, President and CEO, Khun Ludovic Garnier, our Group CFO, Khun Pinyada Saengsakdaharn , Head of Investor Relations. Today's session will take around 1.5 hours, including Q&A session, will be followed by a 10-minute break before we begin the TFM analyst meeting. Without further ado, I would like to invite Khun Thiraphong to begin the presentation.
Good morning to all of the analysts and the executives from financial institutions. I hope you're doing well this morning. As you all know, in the past many years, we have been challenged or we've experienced many different incidents, including COVID. If we reflect back on the past, we were considering why it was so chaotic. During COVID times, this was probably the largest problem that we faced with something unparalleled. After COVID, we were faced with the start of the Russian-Ukraine war. From that war, we experienced the Red Sea Suez disruptions. From the disruptions, we were faced with the U.S. tariffs. At that time, we felt that it was so chaotic. Then we wake up to the new year and we had our fourth quarter meeting of last year, and we discussed the Venezuela situation.
It's so unbelievable that after not many weeks after that, we had another war. You can see that there are so many things that have happened. Our business, how can we survive? How can we adjust? As I've told you before, Thai Union, we continue to adapt from 2024. Thankfully, we had our transformation programs, whether it's the Sonar Project for the entire organization. That is something that took us from a regional to a more global structure. We also have our Tailwind program of three years, which has helped i-Tail to increase its profitability. Of course, you all have seen i-Tail's performance, or recent performance, and it's been very, very impressive. In 2026, as I have informed you, with the Iranian war, the oil prices have, of course, increased.
With the increase in oil prices, there has been impact on everything, whether it's raw materials prices that have increased compared to the last year, packaging, anything that's related to plastic, it has all increased. Aluminum has also gone up. Shipping costs have risen. This is something that we have been managing. We ourselves are focusing on cost improvement. This is something that we do on a regular basis to begin with, and it is something that we will continue to do regardless of anything that happens externally. Inflation is going to happen every year, and this is something that we must continue with. Aside from this, we have our pricing adjustments. We have to find a reasonable price, an appropriate price that doesn't lead to a loss in profitability or competitiveness. We look at design for value. How can we reduce packaging use?
How can we make it more cost-saving? We're changing to, if plastics are more expensive, then can we use paper? If aluminum is more expensive, can we use steel cans? Is this possible? These are things that we're considering. These are actions that we are taking. Aside from this, another positive development is the import tariffs for the U.S. from 90% have been lowered to 10%. There are talks of it increasing to 50%, but this has not happened yet. There is also good news in terms of the customs, which has allowed for the claims of the tariff refunds that were paid, and this is for April. We don't see anything out of line at the moment regarding this, so we expect to receive that refund within 90 days.
These are the developments, the recent developments that I wanted to share with you. A positive impact that we are seeing is in the middle of March. The Thai Baht softened, went to THB 32.4 from THB 31.3 or so. This is something that will help our work, make it easier for us. Let's take a look at our operating results in the first quarter. From the various things that have happened, you can see that we are still quite happy with our performance results. This is a quarter that we feel more confident. Our sales continue to grow by 7.6%.
Despite part of it is from the increasing prices, what is interesting is that the volume has grown by 2.8%. This is something that is very positive for us. Our gross profit has gone up by 3.8%. In terms of gross profit margin, it went down from 18.8% to 18.2%, mostly due to the tariffs, the impact from the tariffs that we were not able to adjust prices in time to absorb that impact. In the next few quarters, we expect improvement in our gross profit margin. We expect it to improve. Operating profit has increased by 29% year-on-year. The margin went up from 3.0% to 3.6%. EBITDA went up 6.5% year-on-year.
Net profit has increased 9.2% year-on-year. Our earnings per share is something that is very, that's something that I'm quite happy with. Thanks to the share repurchase, we are a company that has probably done the most share repurchase in the market, and this has led to our ability to provide a return to our shareholders in the form of earnings per share. This is an important point that I wanted to make. The sales, our share price might be something that I'm not too concerned about it by right now. It's gone down by 30.2%, that's okay. It's acceptable. This is from the beginning of the year.
In terms of the P/E ratio, ours is the lowest at 9.4 x compared to the SET P/E ratio, which is at 16.7 x, and the food group is at 10.6 x, but Thai Union is only at 9.4 x. Our net debt to equity has improved from 1.18x to 1.17 x, and we continue to be committed to reducing this further to 1.1 x. That is our target, and this is something that we'll continue to focus on doing. In the first quarter, sales were at THB 32.05 billion. This is growing in every category, especially PetCare and Feedmill and Frozen.
Our gross profit margin went up, the margin went down compared to the year before, mostly due to the U.S. tariff. Our operating profit went up 29% year-on-year, operating profit margin is at 3.6%. Here's a look at the development in our reported net profit in the first quarter for last year compared to the reported net profit for the first quarter of this year. It's gone up by 9.2%, mostly from the operating profit that has increased. If we compare this to the adjusted net profit, if we cut out the transformation costs, you can see that growth of 20% or so, this is a good trend.
On this page, you can see as with every quarter, we receive so many awards in every quarter, whether it's the ESG Bond of the Year, a TPM Excellence Award. These are awards that we are very proud to have received, and we are a seafood company that is one of the top in Asia that has received the award for TPM Excellence Award from Japan Institute of Plant Maintenance. This is something significant. TPM, this is the roots, this shows our management at our factories, all of our factories. We have management efficiency that continues to improve. Our Feed mill received the Thailand's Best Managed Companies Award from Deloitte. This is the third consecutive year that we received this award. We also have received the Best Sustainability Finance Bond Award from The Asset.
These are the various awards that are a recognition of our performance. I also want to share our campaigns. This is one of the campaigns that we are very proud of, and it's very important as well. On the left-hand side, you can see Petit Navire in France because their NGOs had attacked us in the past few years in terms of mercury. We have always insisted that mercury for tuna, especially in our brand, is lower than the limit that the authorities have set, in fact. To increase customer confidence, we launched a campaign where we invite consumers who buy our Petit Navire products to send their products to be tested at the labs, and we absorb all of the cost for these tests.
We have received very positive feedback from the consumers themselves, from the media, as well as from various institutions, including industrial associations. This is something that has never been done. It's never been done. The market has never seen a company invite consumers to test the products like this, so we are very proud of this. On the right-hand side, you can see our sustainability efforts that are ongoing. We have joined hands with Wholechain, which is a global organization involved in traceability. Aside from this, we also are committed to provide free Wi-Fi for the fishing vessels to lead to transparency and safety and quality of life for the fishing workers so that they can communicate with people on shore. This is something that we wanted to share with you today.
In this year, we are celebrating 10 years of our SeaChange launch at the Boston Seafood Show. We communicated these campaigns or this particular campaign to help with the quality of life for fishing workers. We promoted it in Boston, and again, this is something that we are very, very proud to share with you. I will hand things over to Ludo now to talk about the financial results.
Thank you, Khun Thiraphong. Welcome everyone. Very happy to be with you this morning. As usual, we will start with our five years picture. I love this graph because I think it's very insightful. Few things for you to remember. Q1, in terms of top line and GP margin, is always supposed to be the lowest of the year, because of seasonality, because we of the mix of the category, the mix of the product. We can see that in Q1, we are very happy with our top line performance. I think we do exceed THB 32 billion, our growth versus last year, almost at 8%. When you deep dive a bit, you see there is a combination of pricing effect that was expected. We told you that for our guidance 2026 because of the U.S. tariff.
Also the volume growth is there, okay? It's higher compared to expectation. The volume growth is different across the categories, and Khun Kwan will elaborate on this, but I think this is very interesting in terms of, in terms of messages. In terms of gross profit margin, 18.2%, so we are diluting a bit versus last year, Q1 2025, we were at 18.8%. For you to remember, it's not apple to apple because in Q1 2025 there was not yet any U.S. tariff impact in our numbers. We are still suffering from the U.S. tariff. We are still doing some price increase to absorb that. We do expect, as Khun Thiraphong mentioned, that in the next quarters, our GP margin will recover, and we keep growing. One last comment maybe on this chart.
We've been adding also the volume growth, which has been very interesting, I think, in Q1. If I deep dive on the top line, here Q1, we have our reported top line is almost at 8%. It has been a while that we have not been delivering this top line. I think this is very dynamic. Of course, we are comparing with the Q1 2025, which was a low baseline. You have here we did decrease by 10% in Q1 2025. It's easier, of course, to generate some higher growth compared to these numbers. Again, I think the pricing effect is here, the sales volume. It has been, you can see at the bottom of the chart, it has been now nine quarters of volume growth. I think this is very interesting.
You know that the volume growth has been one of our challenges. Two years ago, we told you we want to recover some of the volume. This is happening. Quite happy about that. We are still suffering also from a negative FX impact by 1.7% in Q1 2026. You have here in the small chart the impact by currency. It is true that we are comparing with the baseline in Q1 2025, where the USD was at THB 34. Now, in Q1 2026, on average, we are at THB 31.6. It is a drop by almost 7% on the USD. The good thing is on the euro, we have the opposite effect. The euro has been increasing by 3.6%. Our FX impact is net.
It's a negative from the USD and a positive impact coming from the euro. We are still facing with some negative FX impact, and you can see it has been the same situation since almost two years now. Just a quick focus on the FX. You can see Q1 2026, the average is THB 31.6. We have seen at the end of March an increase of the USD because of the war in Iran. The USD has been recovering close to THB 32, THB 32.5. Now it went down a bit. Again, this one for you to remember, our budget rate for the whole year was around THB 32.5. Right now in Q1, the USD is below our assumptions. In the euro, the euro is now at THB 37 for EUR 1 .
We're not too far away from our budget rate. Our budget rate was THB 37.7. Kind of the same situation also for the GBP. In terms of fish price, raw material prices, of course, you know, this is one of the key news of this quarter. The fish price went up because of the war in Iran. They increased the inflation of the fuel. January and February, the fish price was around $1,500, very close from our full year guidance. If you remember, in Q4, we told you the full year guidance, we expect the fish price to be around $1,500-$1,600. In March, we have seen the fish price going up, close to $2,000. Okay. Very strong inflation, much higher compared to what we were expecting.
The good news is we did release yesterday our April numbers, the April fish price, which is just below $1,900 at $1,875. I think we want to stay very firm. We don't want the fish price to go above the $2,000, we do expect the rest of the year to stay within this range of $1,800-$1,900 per ton. For you to remember also, we decided to push in Q4 our inventories of raw materials and finished goods. We have been benefiting from high inventories at the beginning of this year, which can allow us to try to choose when do we want to buy and to avoid the period of time where the tuna price is high. Tuna price, we see some inflation.
The good thing is on the shrimp and the salmon, we see the opposite. Okay? We see some deflation in the shrimp prices, especially in Thailand in Q1, and also the same for the salmon. This is better compared to our assumption. Just a quick focus also on the impact coming from all the geopolitical tensions. Of course, we see some impact coming from the war in Iran. I think this is the case for all the businesses in the world. There is no one which can be protected against all this inflation. In terms of transit implication, we see a bit of impact, but for you to remember, we are not using the Red Sea since almost two years. Okay?
We have been using the Cape of Good Hope over the past two years. We don't see much impact yet in terms of pricing. We do expect a bit of pricing to happen, to come, but we don't see that yet in Q1. In terms of transit, what we see is the transit time is increasing. Okay. Nothing too dramatic for the timing. It's only 10-15 days. In terms of cost implication, I did mention the first impact for us is really the raw material price increasing. Okay. The tuna prices went up $1,875 in April, as I did mention. Again, we do expect this price to remain high for the rest of the year, which is very different compared to the initial expectation that we had, which was close to $1,500.
We also see some inflation in the packaging, especially in the aluminum prices. However, in terms of mix, we don't use that much of aluminum. Also we have again here some inventories of steel and aluminum, so we believe we are partially protected and hedged for our packaging. In terms of energy, it's not a huge portion of our COGS, and we do expect the impact to be limited. What kind of mitigation factors did we take? Of course, I mentioned to you that we are kind of protected with the level of our inventories. We have been pushing for inventories at the end of last year, so it will take time to consume these inventories. On average, we have around three months of raw materials and finished goods of inventories.
In terms of shipping routes, we have been diversifying, as I mentioned to you, so we are not using the Red Sea route since two years already. We can rebalance also between the east and the west when we want to ship from Thailand to the U.S. The last one is the most important, the pricing. Of course, we are impacted by the inflation, so the key target and the key mandate for our commercial entity is to negotiate some price increase. Okay? Nothing new here. We have been doing this over the past few years when we are facing this kind of crisis situation with very high increase of the fish price or the inflation or the packaging. You get back to your customers. The timing is not the best one.
As you know, in some of our branded business, we had to conclude the prices before end of February or before end of March, depending on the countries. Of course, now we are in April, May, and we have to get back to them to say, "Hey, there is a crisis situation, and we need to do some further price increases." Of course, we don't expect our customers to be very happy, so they will push back, and then there will be some commercial negotiations. The demand date is very clear from our people, to say to get the kind of price increase because we need this price increase to be able to absorb the impact of raw materials and utilities and packaging to come. Again, nothing is dramatic here.
We have been doing this every year over the past few years because of all the inflation we have been facing. We had one one-off to report in Q1, which is related to tax. It's a coincidence, but in Q1 25, there was another one-off on the tax on Avanti. Okay? Here the one-off is different. It's related to TTV. TTV, for you to remember, that was the name of our fishing company that we have been operating in Ghana for many years. Okay? It came with the MWB acquisition. We bought the business back in 2010. It has been a loss-making businesses. We have been funding this business from one of our holding company in France.
Back in 2017, we decided to stop the business, and we did divest our business. However, from a tax point of view, we were missing one document to be able to enjoy the deductibility of our losses in France. We did receive in Q1 2026 the certificate from the Ghanaian authorities which allow us to deduct these losses in France. This is for us the trigger point to recognize these deferred tax asset in Q1. The impact is quite large. It's almost THB 423 + impact in our, in our tax. It's a one-off. There is no tax impact, but it will allow us to offset the future tax expense in France, which is for us a profitable business. We have also a small negative FX impact by THB 62 million still related to this to this entry.
The net impact is a + THB 360 million in our Q1 numbers. It's a very old story. It took us nine years to get this certificate, but we are patient. We knew it was coming, and we know that in Africa, some things take just a bit longer. TTV is not liquidated yet. We are still on process of liquidation, but there is no more impact in our numbers. We also wanted to add one quick highlight regarding our FX loss that we have in Q1. It may be a surprise for you, we have generated an FX loss of THB 135 million in Q1. You can see here on this chart the different component.
The first component is the TTV FX related FX loss by THB 62 million. This one is a one-off. We clean up all our entries. We release in our P&L what we was recording in the OCI before. We have also some negative, almost THB 52 million coming from our cash pooling. Okay. You know that we have some cash pooling activities every day. We sweep all the bank account in the world, and depending on the currencies, we can have some positive or negative FX. Okay. Here at the end of Q1, because of the recovery of the USD, we have generated some FX loss by THB 50 million in our Q1. These are the two key components.
We have also a bit of impact coming from hedging interest rates. This is explaining the THB 135 million FX loss in our Q1. Of course, this is deteriorating our net profit. We are quite happy to deliver our net profit despite this FX loss in Q1 2025. Focus on our net debt. Net debt has been increasing in Q1 from THB 61.5 billion to THB 63 billion. The free cash flow is negative by THB 400 in Q1. This is expected. In Q1, it's always negative because we are building up our inventories. We have high net working capital. Overall, I believe our EBITDA is in line with our expectation. We see indeed, as usual, an increase in our net working capital in Q1.
There is something which is different this quarter, which is our inventories are dropping in Q1, and that was our target. We told you that in Q4, we increase our inventories. Here we want to consume for the rest of the year these high inventories. In fact, the increase of net working capital in Q1 is mostly due to AR. To receivables. Because we have some high sales, high sales especially in the month of March, and that's why we have high AR. The good news is I do expect this one to be reversed in the next 40 days because this is our average DSO. I would expect the net working capital to turn in the other way in the next quarters. Apart from that, the CapEx is in line with our expectation.
We don't have any surprise here. You can see also on the right, there was some cash payment for short-term investment for almost THB 800 million, mostly coming from i-Tail. In terms of net debt to equity, we do improve a bit because our equity is growing from THB 52.1 billion to THB 53.7 billion. We are deleveraging a bit to 1.17. As Khun Thiraphong mentioned, our goal is really to continue to push lower this net debt to equity closer to 1.1 by the end of 2026. One last thing maybe on the, on this chart which is interesting, which is our cost of debt. You can see on average, our cost of debt was 3.31%. In 2025, it went down to 3.09%.
Here you can clearly see the impact of the decrease of the interest rate. We do expect this situation to continue in the next quarters. Quick overview on the ratio. You can see the ROCE is improving, close to 8%. The inventory days is decreasing. As I mentioned, 152 days. It was 155 in Q4, 156. The net working capital is kind of stable versus last year at 138. The key explanation is really coming from the AR, and this AR will be converted to cash very soon. On the right, top right, you can see the net debt to EBITDA has been increasing a bit in Q1, exceeding slightly 5 at 5.1 x. We do expect this ratio to decrease in the next quarters. Quick focus also on the U.S. tariff.
You heard that the procedure to claim for the U.S. tariff was in place. We did start the process since April 20. Few things to mention about this one. First of all, the process is simpler compared to expectation. We were a bit concerned that we would have to provide a lot of documentation, paper whatsoever. We do everything online, and the process is simple. We just have to fill the ID number of the import where we did pay some duties, and then the system will calculate automatically. The good news is the process is simpler. The second point is we were expecting the system to crash, to be very frank, because of course, many companies are doing the claim. The good news is the system did not crash.
We have to do the claim for each OPCO. We did it by the end of April. Overall, it's a good news. We have to see now what does it mean. From my own expectation, I would expect the U.S. administration to make some difficulty to challenge. I have to say that when we discuss with our lawyers in the U.S., they feel they are a bit more positive. From their point of view, they are seeing the U.S. administration right now, they are focusing on the new, the next tariff scheme to come during the summertime. They don't expect they will push back on this one. I'm a bit conservative compared to what they are doing. Here on this chart here, you can see there will be two different cases.
We do believe for the Ambient, the PetCare, and the Value-Added categories, the process is kind of simpler. We do expect after the claim, we can expect some repayment to happen two or three months after the claim. A bit different story for the Frozen category. The Frozen category, there is one additional complexity because we do have some anti-dumping duties. We have also some CVD, some countervailing duties in this category, so here the process will be longer. We do expect the process to take between six months to three years to get the refund. There is some discussion also what will be the form of the refund. Our preference, of course, would be cash because we did pay in cash the duties. This is one of the option.
Another option could be to have some kind of credit on the next duties to come. This is a bit unclear for the time being. More to come. In the next months, we keep monitoring the situation. The priority right now we give, we gave to all our teams and our people is, of course, to get the cash back. We need to make sure we have the proper documentation. We need to make sure we can reconcile everything, and this is a very heavy piece of work, I have to say. Once we have the cash back, let's imagine the duties are refunded in cash, then for sure there will be some negotiation with our customers, okay? Our customers, of course, who have been doing some price increase to absorb some portion of the tariff.
If we get some cash back from these measures, there will be after some commercial discussions with our customers. Overall, it's positive. The refund process is seems to be more simpler, and hopefully we can get something from that. You will see the guidance that Khun Thiraphong will share a bit later. We don't forecast for anything, okay? Right now we are seeing it's too unstable. This U.S. administration is very difficult to predict, anything will be an upside compared to our guidance. From my view, I don't rely on many things to come in this year, I'm a bit more pessimistic compared to our lawyers, let's see. The last chart I wanted to share with you was regarding our investment in Ecuador.
We did release this news a bit after our Q4 earnings release. Please stay for the TFM earnings call. You will hear more about this investment. We just wanted to share with you a few things. We will invest. That will be the first investment of Thai Union in Latin America. Very happy about this one. We want here to build a new shrimp feed factory, so the investment will be performed by TFM, who will be the majority shareholder. We'll have also Avanti. Avanti is our Indian partner, also in the Feed business. They will be minority shareholder in this business. Then there will be a local partner which will be also another minority shareholder.
The goal is for TFM to keep the majority and to have the control of the operations. The investment envelope is around $55 million. We do believe it will take two years to build up the factory, we do expect the commercialization to happen by 2028. In terms of capacity increase, Once it will be done, up and running, it will be an 80%, eight zero, capacity increase for TFM. We told you that the TFM performance has been very attractive over the past few years, we told you this is for us one avenue for growth, we want to invest and to push further. You can see on the right the situation in Ecuador. Why do we invest in Ecuador?
Over the past few years, Ecuador became number one in the world in terms of countries to produce shrimps. They do produce 1.5 million versus Thailand. It's six times above Thailand. Six times above Thailand production. 10 years ago, Thailand was number one. You can see Ecuador has been really growing a lot over the past, over the past few years. We do believe by doing a shrimp feed investment, it is not very risky because right now the balance between the supply and the demand is unbalanced, and there is a lot of demand for the Feed business. That was the key driver for us to decide to push for this investment in Ecuador. Again, you will hear more during the TFM analysis call.
Now I will hand over to Khun Kwan to go through the business performance.
Thank you, Khun Ludo. Let's take a look at the business performance now by category. You can see that the sales from this is at THB 32.05 billion. This is mostly from Ambient and Frozen and PetCare due to the pricing effect that was mentioned earlier. The gross profit margin for this quarter is for the PetCare business. The gross profit margin is high at 24.9%. The company still has the goal of increasing the proportion of high growth profit margin businesses that have high profitability for PetCare and Value-Added, namely. As we announced before, our target for 2030 is for both of these categories to have a sales contribution, a combined sales contribution of 25%-30%.
In the past few years, we can see that we are on track to achieving this goal, and in this quarter, the sales contribution of these two categories together is at 23%. For the Ambient category in the first quarter, sales is still going strong at THB 15.14 billion, mostly due to 2.5% increase year-on-year from the pricing effect that we, this is for the U.S., and this is to offset the increasing, the increased cost from U.S. tariffs. If we take a look at the breakdown in each segment, we can see that the segment, the sardines and mackerel, we're seeing significant growth in the first quarter, and mostly this is mostly due to marketing efforts. In terms of sales volume, it's quite stable compared to the same period of last year.
This is mostly due to increasing demand in Europe that has continuous growth. This growth in Europe has been offset partly by a drop in some sales. If we take a look at the gross profit margin, despite the U.S. tariffs in the first quarter, in 2026, in the first quarter, the gross profit margin for Ambient is still stable at 19.3%. This is a positive development, thanks to the sales volume in the EU. In the EU, the products that have increased are low margin products. The gross profit margin, it hasn't grown significantly. In the Frozen segment, sales is at THB 9.4 billion, growing about 12% year-on-year, mostly due to two factors.
The first is the increase in the prices in accordance with U.S. tariffs and also from the sales volume that has increased 4.4% year-on-year. As for pricing, the company did not increase the prices for frozen products, once the U.S. tariffs came in, there was an impact from April 2025. We have adjusted the prices higher. The Feed business also has performance results that continue to improve, and this is one of the key drivers for the Frozen category. The sales volume is at 4.4% year-on-year growth. This is over the past four quarters, this is mostly due to the volume growth from the Feed and from the Frozen shrimp business. In the gross profit margin, you can see that for the 1st quarter it's at 11.3%.
This is a result of the gross profit margin normalizing for the Feed business. What is important in this quarter is that despite the normalization of the Feed business, the gross profit margin as well. Overall, the Frozen segment, the gross profit margin for the Frozen segment is in line with our expectations, with our expectations of 10%-12%. The third business is the PetCare business. In the first quarter, sales was at THB 5.115 billion, increasing 22.6% year-on-year. This is due to a pricing effect and also the volume growth that increased by 14.3% year-on-year. This is mostly due to each region seeing, where we have our PetCare sales, the U.S., Europe, and Asia and Oceania.
If we take a look at the gross profit margin compared to the same period of last year, you can see that it increased by 0.4% up to 24.9% in the first quarter of this year. It is in a high level in guidance with, according to ITC's guidance. The proportion of the premium products for our global brands have an increasing contribution to 51.5% from 49% in the same period of last year. This is what has supported our gross profit margin numbers.
Lastly, in the first quarter, the results for the Value-Added category sales are at THB 2.383 billion, reducing slightly by 1.2% year-on-year, mostly due to sales that have softened in the Value-Added segment in the U.S. and the Value-Added segment in the Japanese market as well. You can see that the gross profit margin has gone down to 24% from 27.9% in the same period of last year. This is due to one of the products sold in Japan that has a higher margin. In this past quarter, the orders dropped, which then led to an impact on the gross profit margin for the Value-Added segment.
Nonetheless, if we take a look at quarter-on-quarter comparison, the gross profit margin has increased by about 2%-2.3%. This is a good result. This is thanks to packaging and ingredients, the growth in that area. Now I would like to pass things back to Mr. Thiraphong to discuss the outlook for 2026. Thank you.
For the 2026 outlook, even though the first quarter we have sales growth, significant sales growth, despite the volatility that we're facing, we would like to maintain our guidance at 3%-4%. Growth is expected in every category, especially in PetCare and Feed. The sales growth, aside from our increase in our prices, we expect it to be a result of an increase in volume as well.
In our sales forecast, our assumption for the foreign exchange exceeds THB 32.5 to U.S. dollar. This is a review of our assumptions that we said earlier. Our gross profit margin we expect to maintain at 90% to 20%. The gross profit margin, we will see it improve in the following quarters. We will see stronger margins from Ambient and Frozen mostly. PetCare and Value-Added, we expect these to remain stable. SG&A, it will be the same at 13.5% to 14.5%. This is mostly due to the full year impact from the U.S. tariffs. This is from Frozen in Thailand. We also have marketing investments to support our branded business, as well as lower transformation costs, which will help to soften the impact.
In terms of CapEx, this year, this is a higher number compared to previous years. It's at THB 5.5 billion-THB 6 billion. The increase is mostly from investments for future growth. This is we're investing in the feed plant in Ecuador, and this will be an investment over the next two years. Aside from that, we are also investing in our automated warehouse for i-Tail, as well as expanding our packaging capacity. CapEx for this year is emphasizing an increase in profitability for us. Aside from that, our dividend policy will remain at no less than 50% dividend payout ratio twice a year. Dividend payments are twice a year as well. Thank you so much for joining us for this presentation.
Now due to the time, we will conclude today's session here. Thank you very much for joining us today. We will now take a short 10 minutes break before TFM session. Thank you. [Foreign language]