Beyond Food Zen Corporation Group Public Company Limited - - PowerPoint PPT Presentation

Experience Beyond Food

Zen Corporation Group Public Company Limited

Opportunity Day 19 March 2019

Agenda

• 1. Company Overview and Strategy
• 2. 2018 Performance

2

Company Overview and Strategy

Agenda 1

Key Milestones

4

1991 1st ZEN restaurant 2007 2014 1st Tetsu restaurant 2017 2018 Public conversion of ZEN as a preparation for IPO 1st AKA restaurant 2009 1st On the Table restaurant Incorporation of ZEN as holding company 2011 Business restructuring subsidiaries Acquisition of “Tummour Chained Group” 1st Musha restaurant 2016 2015 Establish Zen Supply Chain Management Acquisition of Sushi Cyu 1st Khiang restaurant 2019 February 2019

Business Group Structure and Revenue Structure

5

• I. Restaurant

Business

• II. Franchise

Business

• III. Other Food Related Business
• Retail Products
• Delivery & Catering
• Restaurant Management and

Restaurant Consultancy

Business Groups Revenue Structure

Other Income, 1.4% Restaurant, 90.1% Delivery and Retail, 0.7% Sales Raw Material, 5.4% Franchise Fees, 2.3% Franchise, 7.7%

Well-Diversified Brands in the Portfolio with Outlets Across Thailand & ASEAN Region

6

▪ As of 31 December 2018, ZEN Group has a total of 255 outlets (110 equity and 145 franchise

• utlets) under 12 brands in its portfolio

▪ With strong brands visibility and outlets coverage, the ZEN Group can target various customers groups, from teenager and working age to family group, and from low to high income group

137 110 2 4 2

Student / T eenager Family Low Income Working Age High Income

Restaurant Outlets as at Dec 2018

7

Type of Business Brand Company Owned Franchise Total Outlets Thailand Thailand Laos Myanmar Cambodia Japanese Restaurants

• 1. ZEN

43

• 43
• 2. AKA

17

• 1
• 18
• 3. On the Table

18

• 1

19

• 4. Tetsu

1

• 1
• 5. Sushi Cyu

3

• 3
• 6. Musha

4

• 4

Thai Restaurants

• 7. Tummour

13 102 1 1 1 118

• 8. LaoYuan

6 18

• 24
• 9. Jaewhon

4 8 1

• 13
• 10. Pho
• 8
• 2
• 10
• 11. De Tummour
• 1
• 1
• 12. Khiang

1 1 Total 110 137 2 4 2 255

Our Brands Still Have Large Opportunity to Grow

Thailand Food Market Will Support Expansion

8

43 17 18 116 24 ~400 ~170 ~700 ~250 ~90

Note:

• 1. Data of compared peer are from 2017 company’s 56-1, ZEN, and Q3 Result Presentation
• 2. Include only domestic outlets

Unit: outlets

Number of Outlets by Brand Food Service Industry Size

~330

272,641 336,355 105,963 138,326 252,617 309,806 176,361 219,438 29,181 50,842 235 308

2017 2022

Kiosk and Street Stalls Fast Food Café and Bars Full Service Delivery Self Service 836,998 1,055,076

CAGR +4.7% CAGR +4.5% CAGR +4.3% CAGR +11.7%

Source: Euromonitor International

Key Focus 2019

9

• Open 36 new branches in 2019
• Continue positive SSSG
• Increase operational efficiency

Restaurant Business Franchise Business Other Business

• Open 87 new branches in 2019
• 37 standard size locations
• 50 micro-franchise locations
• Expansion of retail business with

new products and channels

• New call center to drive delivery

business 102 110 146

127 145 232

2017 2018 2019

Number of Branches

Equity Branch Franchise Branch +87 +36

Investment CAPEX THB Mn Investment in New Equity Branch 170 Investment in Renovation Branch 45 Investment in IT POS 20 Other Investment 50 Total Investment 285

2018 Performance

Agenda 2

Notable Recent Events

11

➢ Dec 2017 Open new quick service value for money Japanese brand “Musha” ➢ Mar 2018 Improve supply chain quality by outsourcing ➢ Aug 2018 Achieve membership of Thailand Private Sector Collective Action Coalition Against Corruption ➢ Dec 2018 Open new quick service Thai street food brand “Khiang” ➢ Feb 2019 Zen Corporation Group registered on Stock Exchange of Thailand (SET)

Marketing Strategy 4Q18 – Zen and AKA

12

Marketing Strategy in 4Q18 – OTT and Tummour

13

Start Focus Delivery in 2018

14

Annual Total Revenue and Net Profit

15

1,966 2,182 2,515 2,965

2015 2016 2017 2018

110 90 82 140 5.6% 4.1% 3.3% 4.7%

• 4%
• 2%

0% 2% 4% 6% 20 40 60 80 100 120 140 160

2015 2016 2017 2018

YoY Growth +5.1% +11.0% +15.3% +17.9%

THB Million

Total Revenue Net Profit

Branch Expansion Opened 42 new branches in 2018, led by Thai brands under franchise model Revenue Total revenue increased by 18% YoY, driven by both restaurant and franchise businesses Net Profit Net profit of 140.2Mn, growth of 71% YoY. Net margin improved from 3.3% to 4.7%

Quarterly Revenue and Net Profit

16

716 753 757 738 2,515 2,965

500 1,000 1,500 2,000 2,500 3,000 3,500

1Q18 2Q18 3Q18 4Q18 FY2017 FY2018

Total Revenue

YOY +17.9%

YoY% +23.6% +24.3% +18.1% +7.2%

24 47 38 32 82 140

3.4% 6.2% 5.0% 4.3% 3.3% 4.7%

• 15%
• 10%
• 5%

0% 5% 20 40 60 80 100 120 140

1Q18 2Q18 3Q18 4Q18 FY2017 FY2018

Net Profit

YOY +71.4%

YoY% +47.9% +334.3% +70.6%

• 3.4%

THB Million

4Q18 sales slower growth when compared to 4Q17 which had government stimulus. This also affected the net profit growth

Same Store Sales Growth

17

In year 2018, ZEN Same Store Sales Growth was 4.7% compared to previous year.

2.7% 1.5% 4.2% 7.7% 12.5% 6.5% 3.9%

• 2.3%

4.0% 4.7%

• 4%
• 2%

0% 2% 4% 6% 8% 10% 12%

1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 FY2017 FY2018

• Because of strong promotion, ZEN got high SSSG in 1Q18.
• SSSG in 2Q18 and 3Q18 slowdown due to high competition
• 4Q18 SSSG negative when compared 4Q17 which benefit from government

stimulus

• After Royal Cremation in Oct 2017,

Thailand consumer confidence recovers.

• Our branches in prime area started to be

robust again.

Revenue from Main Businesses and Gross Profit

18

171 177 184 172 603 704

24.0% 24.3% 24.5% 23.6% 24.3% 24.1%

15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 100 200 300 400 500 600 700 800 900

1Q18 2Q18 3Q18 4Q18 FY2017 FY2018 THB Million

Revenue from Main Businesses Gross Profit

2,309 2,673

FY2017 FY2018

Restaurants Revenue

YOY +15.8%

166 229

FY2017 FY2018

Franchise Fee and Merchandise Sales

YOY +38.4%

7 21

FY2017 FY2018

New Business Revenue

YOY +187.5%

711 729 751 731 2,482 2,922

1Q18 2Q18 3Q18 4Q18 FY2017 FY2018 YoY% +24.6% +21.4% +18.5% +8.0%

YOY +17.8%

24.6%(1) (1) Excluding WH service fee which started Mar 2018 (Jap Food) and Oct 2018 (Thai Food) and therefore did not apply 2017 Note for comparison with peers and consider only Raw Material Expense the gross profit margin FY18 was 64.6%

SG&A Expenses

19

SG&A In year 2018, SG&A increased 7.3% (c.f. revenue growth 17.9%) compared to the prior year primarily due to the increase of staff and benefit expenses to support the future business expansion and increased marketing expenses. SG&A Expenses Breakdown

146 143 143 141 535 574 20.4% 19.0% 18.9% 19.1% 21.3% 19.3%

7% 9% 11% 13% 15% 17% 19% 21% 23% 100 200 300 400 500 600 700 800

1Q18 2Q18 3Q18 4Q18 FY2017 FY2018 YoY% +18.7% +7.3% +2.6% +1.9% YOY +7.3%

Staff & Benefit, 55% Marketing, 17% Rent and Utilities, 4% Depreciation, 5% Finance Exp., 4% Others, 15%

Financial Ratios Improve in 2018

Liquidity Ratios to Greatly Improve after IPO

20

0.27 0.32 2017 2018

Current Ratio

1,223 1,095 366 469 3.35 2.34

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 500 1,000 1,500 2,000 2,500

2017 2018

Debt to Equity

Liabilities Equity D/E Ratio 5.4% 8.9% 2017 2018

ROA (%)

25.8% 33.6% 2017 2018

ROE (%)

21