Carabao Group Strictly Private & Confidential Analyst Meeting - - PowerPoint PPT Presentation

Strictly Private & Confidential

Mar 2019

Carabao Group

Analyst Meeting FY18

1

Disclaimer

The provision herein does not constitute legal advice or investment opinions of any kind, neither is it intended as an

• ffer, solicitation for Carabao Group PCL. (“CBG” or “The Group”). The information presented within this material is

intended to indicate the Group’s operational and financial position at a given period of time and to be used, downloaded, and distributed for analyst briefings, and general meetings with CBG, and to be used for educational material in order to understand CBG’s operation only. The Group makes no representation that all information is complete and accurate for the purpose of producing a projection of CBG’s operations, performance, or financial position and may be susceptible to uncertainty and important changes based on political, economic, strategic, and other such uncontrollable factors. Forward looking statements in this presentation are based on the management’s assumption in light of information currently available and obtainable, as well as the aforementioned/unmentioned risks and

• uncertainties. CBG’s actual results may vary materially from those expressed or implied in its forward-looking

statements, and no assurance is made as to whether such future events will occur. The Group accepts no liability whatsoever for any loss arising directly or indirectly from the use or endorsement of any information contained herein by any users and/or third parties.

NET SALES ฿14,463mn  12%YoY

52% of

ENERGY DRINK SALES OVERSEAS CLMV SALES ฿5,498mn  67%YoY

ENDE DED D 31 1 DECE CEMBER MBER 2018 18

EBITDA ฿1,899mn  38%YoY

FY18 AT A GLA LANCE NCE

3

Total Sales

Sales by Quarter (THBmn) Growth Portion 4Q2018 Sales YTD (THBmn)

GPM GPM

Domestic sales Overseas sales Domestic sales Overseas sales

4

Sales (THBmn) & GPM (%) by Business

OVERSEAS DOMESTIC: BRANDED OWN DOMESTIC: DISTRIBUTION for 3rd PARTY DOMESTIC: BRANDED OEM

5

Domestic Sales

DOMESTIC SALES BY CHANNEL BREAKDOWN OF DOMESTIC GPM BY BUSINESS

Domestic sales of Carabao Dang recovered in 4Q18 i.e. +7.4% YoY, thanks to improved market conditions

QoQ as a combined result of economies

• f scale and reduction
• f key material prices

YoY due to gradual adjustment for selling price of Coffee RTD

6 THB mn FY15 FY16 FY17 FY18 %YoY 3Y-CAGR 4Q17 3Q18 4Q18 %YoY %QoQ Cambodia 1,547 2,074 2,489 4,438 78% 42% 739 1,177 1,267 72% 8% Myanmar 223 279 422 678 61% 45% 126 132 205 63% 56% Vietnam 98 173 356 349

• 2%

53% 75 40 73

• 3%

83% Yemen 167 202 225 137

• 39%
• 6%

112 31 67

• 40%

113% Afghanistan 164 481 257 65

• 75%
• 27%
• 26

9 0%

• 67%

China

• 1,019

592

• 42%

n/a

• 116

72 N/A

• 38%

Others 77 132 53 133 152% 20% 11 30 35 219% 20% Overseas sales from CBD 2,276 3,340 4,821 6,392 33% 41% 1,062 1,551 1,727 63% 11% Overseas sales from ICUK

• 16

202 84

• 58%

n/a 34 45 27

• 180%
• 160%

Total 2,276 3,356 5,024 6,476 29% 42% 1,097 1,597 1,700 55% 6%

Overseas sales

Overseas Cambodia and Myanmar made a new record high in 4Q18

7 Strong our expansion projects; but still well below our group p rise on the funding side to support olicy i.e. 2.0x

Decomposed EBITDA & Debt Profile

Note: CBG started to consolidate ICUK in an aftermath of takeover exercise since 4Q2016

Non-ICUK (THBmn) ICUK (THBmn) Consolidation (THBmn)

Interest bearing debts / Total Equity Total Liabilities / Total Equity

Key indicator of consolidated debt profile

Representing global sponsorship fees incurred by Non-ICUK group of companies Representing global sponsorship fees incurred by ICUK group of companies Representing global sponsorship fees incurred by consolidation

8 Unit: THB million ASSETS Dec-17 Dec-18 Change LIABILITIES Dec-17 Dec-18 Change Current Assets Current Liabilities Cash, Cash Equivalents 147 138 (9) Short-term loans 845 275 (570) Current Investments 7

• (7) Trade and other payable

1,897 1,810 (87) Trade and other receivable 960 907 (53) Current portion of long-term loans 300 401 101 Inventories 656 887 231 Other current liabilities 164 278 114 Other current assets 389 546 157 Total Current Liabilities 3,207 2,764 (442) Total Current Assets 2,159 2,477 318 Long-term loans 2,190 1,279 (912) Debentures

• 2,786

2,786 Other non-current liabilities 118 126 9 Total non-current liabilities 2,308 4,191 1,883 Non-Current Assets Total Liabilities 5,515 6,955 1,441 Long-term Investment

• 0 SHAREHOLDERS' EQUITY

Investment Properties 103 100 (3) Issued and fully paid up share capital 1,000 1,000 Property, plant & equipment 9,609 11,090 1,481 Premium on shares 3,963 3,963 Intangible Assets 67 77 10 Retained earnings 1,775 2,240 465 Deferred Tax Assets 31 63 32 Other components of shareholders' equity 376 26

• 1

Other non-current assets 15 12 (3) Equity attributable to owners of the Company 7,114 7,177 63 Goodwill 535 500 (36) Non-controlling interests of the subsidiary 108

• 188

296 Total Non-Current Assets 10,361 11,843 1,482 Total shareholders' equity 7,005 7,365 359 Total Assets 12,520 14,320 1,800 Total liabilities and Equity 12,520 14,320 1,800 STATEMENT OF FINANCIAL POSITION

Statement of financial position

9

Unit: THB million 2017 2018 Change 2018 4Q2017 4Q2018 Change 4Q2017 4Q2018 YoY %sales YoY %sales %sales Revenue from sales 12,904 14,463 12.1% 100.0% 3,197 3,847 20.3% 100.0% 100.0% Costs of goods sold 8,840 9,813 11.0% 67.9% 2,286 2,565 12.2% 71.5% 66.7% Gross profits 4,065 4,649 14.4% 32.1% 911 1,282 40.7% 28.5% 33.3% Selling expenses 2,379 2,561 7.7% 17.7% 588 515

• 12.3%

18.4% 13.4% G&A expenses 741 788 6.4% 5.5% 217 191

• 12.1%

6.8% 5.0% Operating profits 945 1,301 37.6% 9.0% 107 576 440.5% 3.3% 15.0% Other incomes 164 135

• 17.5%

0.9% 34 45 33.8% 1.1% 1.2% EBIT 1,109 1,435 29.4% 9.9% 140 621 343.1% 4.4% 16.1% EBITDA 1,372 1,899 38.4% 13.1% 219 750 242.5% 6.9% 19.5% Interest expenses 48 107 124.0% 0.7% 19 31 63.1% 0.6% 0.8% EBT 1,061 1,329 25.2% 9.2% 121 590 386.8% 3.8% 15.3% Income tax expenses 261 368 41.3% 2.5% 42 123 191.2% 1.3% 3.2% Net profits for the period 801 960 19.9% 6.6% 79 467 491.5% 2.5% 12.1% 1,246 1,159

• 7.0%

8.0% 209 513 145.0% 6.5% 13.3% Equity Holder of the Company

Statement of comprehensive income

Remark: *CBG increased shareholdings in ICUK, a subsidiary operating marketing and distribution of Carabao products in the UK and other countries outside Asia, from 51% to 84% since 1Q18 onwards.

*

10 10

SEA TV, CTN SEA TV, CTN, HANG MEAT HDTV, CNC, MY TV,

ช่อง 8, ช่อง 5

2019 CAMBODIA

11 11

2019 MYANMAR

12 12

2019 DOMESTIC

Centralised sales force management plan New SKUs Marketing Activities

460,000 members คาราบาวแดง

180 ml

New agents appointed

Agent Sub- agent Cash Van Mktg

Activities to increase rate of sales Manage relationship with retailers support marketing/ media plan

DETAILED PLAN Bao Dang Lady Team

To promote sales and communicate activities at every channel More to come

13 13

2019 ICUK

Coverage expansion from current customer

Received confirmation on more stores to be listed

Marketing Activity

Utilise our assets, Carabao Cup

250 stores (Mar’19) 16 stores (2018) 350 stores (2018) +220 in chiller (220 Stores, Jan’19) +330 Petrol stations (Feb’19) 676 Stores (Mar’19) 376 Stores (2018) >700 Stores (in 2019) N/A (2018)

3rd year consecutive operation in the UK with strategy to focus on selective channels with high margins and to exploit maximize benefits on spending under provided budget

14 14

2019 CHINA

Chinese energy drink market grew by 7% YoY (value) in 2018

Source: JV China company

CARABAO shares in China’s energy drink market Carabao Promoters: Instructive force to create trial Target distribution mix in 2019 CARABAO PROMOTERs (สาวบาวแดง)’ Manpower Plan

JV China to begin promisingly yet challenges remained ahead Strategies adapted to changing market conditions Progress made as a result of current business plan i.e. More focus on below the line activities and penetration into gas station segment

15 15

2019 CHINA

18 18

Appendix: Corporate Profile

19 19

Categories Product Portfolio Energy drink Coffee Others

Company overview

Carabao is the 2nd largest energy drink company in Thailand with strong distribution channel and a successful overseas business, which represents c.45% of the total revenue

Business overview Product overview

Carabao Sport electrolyte drink Drinking water 3-in-1 instant coffee RTD coffee drink Source: 1. Nielsen energy drink market report, December 2018 ("Nielsen Report")

Carabao's market share evolution1

% of Thailand energy drink market share

• Founded in 2001 as a partnership between 3 founders one of

which is the leading singer of Carabao (Thai legendary folk band), the Carabao Group is now the 2nd largest energy drink company in Thailand with 23.2% market share1

• Its main product, Carabao Energy Drink, is packaged into amber

glass bottles or aluminum cans. Other branded products include bottled water, coffee, Carabao Sport electrolyte drink and other 3rd party products

• Vertically integrated business model - CBG manufactures and

distributes its own products, while excess distribution is maximize by distributing 3rd party products

• Carabao has strong in-house production capabilities of glass

bottle, and aluminum can (production to commence in Q4 2018)

• Strong distribution channel with presence in both traditional and

modern channel

• Over 50 first tier agents
• 31 distribution centers across Thailand
• c. 330 cash vans, covering over 200,000 retailers
• Successfully tapped into global markets
• Strong presence in international markets including Cambodia,

Myanmar, Vietnam, Laos and other countries

• Penetrating into new key strategic countries i.e. China, UK

20 20

Note: A number of niche positioned brands expanded their consumer groups and thus gained increasing shares in the market, altogether commanding higher market shares, up to 11% in FY18 from 8% in 2017

78% 84% 84% 90% 91% 91% 90%

Selling Distribution (Coverage)

Significant share of Thai energy drink market

Energy drink market picked up by 3.9%YoY in 4Q18, driving FY18 +0.2%YoY after two year consecutive contraction during the FY16-FY17

Source: Nielsen report as of Dec’18

22 22

Domestic and international business overview

Sales breakdown

Increasing presence in the international market to drive growth

Domestic revenue by products

FY2018 domestic revenue: THB 7,928m (+1% YoY)

International revenue by products

FY2018 international revenue: THB 6,476m (+29% YoY)

International revenue by country

FY2018 international revenue: THB 6,476m (+29% YoY)

Established overseas business diversifies dependence on Thailand

23 23

FOUNDERS

Founded Tawandang German Brewery in 1999 Founded Carabao Tawandang in 2002

• Mr. Sathien Setthasit

CEO Miss Nutchamai Thanombooncharoen Managing Director

• Mr. Yuenyong Opakul

(Add Carabao) Senior Deputy Managing Director

Managed business with Mr. Sathien since 1999 Managing Director of Carabao since inception Formed the origin of Carabao - the Carabao band

• in1977

Gathered millions of fans for the brand since

24 24

Carabao is Thailand’s legendary music-for-life & one of the most respected band in Thailand

Carabao & Santana in Bangkok 29th Feb. 2016 [Est. 1981]

Strong brand recognition associated with Carabao band

Songs for life music are reflections of aspects of Thai society For over 30 years, Carabao songs have been known to speak to the Thai people in a manner that can easily be related to their own life experience and provide the hope and strength to keep fighting. The result is a truly passionate fan base that are overlapping with energy drink target groups across the country that lives and breathes the Carabao “Fighting Spirit”.

25 25

Shareholding structure

• Mr. Sathien Setthasit’s

Group

• Ms. Nutchamai

Thanombooncharoen’s Group

• Mr. Yuenyong Opakul’s

Group Free Float

34% 23% 14% 26%

Note: (1) CBG’s shareholding in CVHLUX increased from 51.0% to 84.3% effectively on 8 January 2018 due to exercising the right offerings of CVHLUX and converting shareholders’ loans to equity, in accordance with the Change of Overseas Subsidiaries’ Capital Structure transaction (2) The remaining portion of 26% is held by Showa Denko Group, a Japanese business partner Others

3%

Remark: Shareholding portion as of December 28, 2018

• Manufactures,

markets and sells the Group’s products

• Manages the

domestic distribution of the Group’s product

• Manufactures and

supplies glass bottles required for the manufacture the Group’s product

CBD DCM APG ACM CHHK CVHLUX ICUK CTHK

• Manufactures and

supplies aluminum cans used as packaging materials for the Group’s Product

Operating Subsidiaries Holding Subsidiaries

CARABAO GROUP

100% 100% 100% 100% 100% 100% 74% (2) 84% (1)

THAILAND OUTSIDE THAILAND

Registered and Fully Paid-up Capital THB 1,000 Million

• Distribution, selling

and marketing in the UK and outside-Asia

• International trading

arm

26 26

Management Team

INSTRUMENTAL TO BUILDING COMPANY’S SUCCESS

• 1. People: Develop our people with good attitude, willingness to learn, innovation,

accountability

• 2. Work System: Execute with concise and international standard work system
• 3. Organization & Management: Operate with clear objective and understandable

responsibility, proper organization structure, and project-based approach

• 4. Technology: Embed technology and innovation in our processes through

production, management, sustainability development

• 5. Product: Produce quality and well-known world class product
• 6. Brand: Be wealthy and modern world class brand
• 7. Corporate Image: Be known as world class organization with good governance

and social responsibility

MISSION VISION World Class Product, World Class Brand

• Mr. Sathien Setthasit

Chief Executive Officer Co-Founder of the Group in 2001

• Ms. Nutchamai

Thanombooncharoen Managing Director Co-Founder of the Group in 2001

• Mr. Yuenyong Opakul

(Add) Senior Deputy Managing Director

• Co-Founder of the

Group in 2001

• Lead singer of

Carabao

• Brand Ambassador of

Carabao energy drink

• Mrs. Wongdao

Thanombooncharoen Senior Deputy Managing Director Been with the Group since 2008

• Mr. Kamoldist

Smuthkochorn Deputy Managing Director – Marketing Been with the Group since 2002

• Mr. Pongsarn

Khlongwathanakith Chief Financial Officer Joined in 2015, from CIMB Investment Bank

• Mr. Kartchai

Jamkajornkeiat Assistant Managing Director – Production/ Int’l Business Been with the Group since 2012

• Mr. Romtham

Setthasit Deputy Managing Director – Int’l Business Been with the Group since 2015

27 27

Key Milestones and Developments

• NO. 1

Challenger

2004 Began exporting to 15 countries Oct 2002 Carabao Dang was launched 2012 DCM established as a distributor for Carabao products 2013 APG manufactured glass bottles for Carabao products 2004 In 18 months of the launch, Carabao overtook Krating Daeng position to become the No. 1 challenger in the market 2014 Start Plus Zinc an electrolyte beverage was launched; renamed to Carabao Sport in 2018 Nov 2014 Carabao Group began trading in Stock Exchange of Thailand 2015 Start establishing

• wn distribution centers

with a national coverage

• f 300,000 outlets

Jul 2016 Carabao 3in1 Coffee was launched Oct 2016 Carabao RTD Coffee was launched 2016 Carabao Drinking Water was launched 2015 Sponsorship of Chelsea F.C. June 2017 Sponsorship of the EFL Cup; The Carabao Cup. Mar 2017 APC established as a JV with SHOWA to produce aluminum cans June 2018 Carabao Green Apple was launched in Thailand

28 28

Manufacturing facilities

Energy drink production facilities

• 11 production lines
• Prod. Cap. of 1,800 million bottles p.a.
• 7 production lines
• Now: Prod. Cap. of 1,400 million cans p.a.

Bottles filling Cans filling

• Prod. Cap. of 1,300 million bottles

p.a.

• Maximum molten glass production of

310X2 tons per day APG glass bottle manufacturing facility ACM Aluminum can manufacturing facility

• Prod. Cap. of 1,000 million cans p.a.
• To be commercialized in 4Q2018
• Technology knowhow supported by

Showa Denko Group, a leading aluminum company from Japan (JV with Showa Denko Aluminum Can)

Certifications: Certifications:

State-of-the-art manufacturing facilities to ensure safe and efficient production

Plant location: 50 KM from central Bangkok

29 29

Dedicated in-house marketing team has established strong relationships with multiple media channels, enabling us to react to market trends and minimize lead time and costs Flexible uses of multimedia channels to reach target consumers: media advertising, on-the-ground marketing team, brand ambassador and event sponsorships Global marketing platform via international football sponsorships to widen windows of opportunity in global stage Below the Line On-ground marketing More than 80 BaoDang Girl Teams, consisting of c.600 members, promote social activities Brand Ambassador and events sponsorships Celebrity spokesperson promoting our brand, as well as enhancing corporate image Contributes significantly in establishing our brand Regularly sponsor events which appeal to target consumers

Above the Line TV commercials for wider reach Print ads in magazines, newspapers and posters

Marketing Channels

30 30 End Consumers Carabao Group

• 1. Traditional Trade – 80%1
• 2. Modern Trade – 20%1
• 3. Importers, Distributors,

International Dealers Domestic Market – c.55%1 International Market – c. 45%1 End Consumers

… … …

Tier 1 Tier 2 Tier 2 Tier 3 Tier 3 Tier 3

Retailers

Convenience stores, Supermarkets, Hypermarkets Traditional retail shops ~ 50 agents ~ 500-1,000 sub- agents

Note: (1) Sales Figure, 12M2018 (2) Launched in Q2/15 . Reach 31 distribution centers in March 2017

• B. Cash Vans – 30%2
• A. 3-tiered agent distribution network – 50%
• 31 DCs
• 328 Vans
• 180,000 identifiable retailers

Strong distribution network covering both modern and traditional channels with unique cash van strategy

Comprehensive Distribution Network

31 31

7 DCs 9 DCs 3 DCs

W

31 DCs with 328 Vans, covering approx. 180,000 registered retailers nationwide

4 DCs 2 DCs 6 DCs

Note : Base on Information at December 2018

Cash Vans & DCs nationwide

32 32

Carabao Energy Drink (Original) Carabao Energy Drink (Original Export) Carabao Carbonated Carabao Ginseng Edition Carabao Carbonated (Original) Carabao Carbonated (Sugar Free) Carabao Carbonated (Green Apple) Carabao Energy Drink (The PRC Market) Carabao Carbonated (Mandarin Orange)

• 150ml amber

glass bottle

• Flat taste
• Caffeinated

+ B12

• 250ml

aluminum can

• Flat taste
• Caffeinated +

B12

• 325ml

aluminum can

• Carbonated
• Caffeinated +

Multivitamins

• 325 ml

aluminum can

• Carbonated
• Caffeinated +

Multivitamins

• Ginseng

Extract

• 325ml

aluminum can

• Carbonated
• Caffeinated +

Multivitamins

• Less sugar

(1:4)

• 325 ml

aluminum can

• Carbonated
• Caffeinated +

Multivitamins

• Sugar Free
• 325 ml

aluminum can

• Carbonated
• Caffeinated +

Multivitamins

• Green Apple

Flavour

• 250ml

aluminum can

• Non-

Carbonated

• 325 ml

aluminum can

• Carbonated
• Caffeinated +

Multivitamins

• Orange

Flavour Domestic (mainly) Export Only Export in Asia First market: Afghanistan First market: UK First market: UK First market: UK The PRC Market First market: UK October 2001 2004 May 2015 February 2016 April 2016 August 2016 October 2016 March 2017 April 2018 10 THB (domestic) Differ in various countries 2,000 Riel (17 Baht) Differ in various countries 1.19 GBP 1.19 GBP 1.19 GBP 6 CNY 1.19 GBP

Our Product Portfolio (Energy Drink SKUs)

33 33

Products Carabao Sport Carabao Drinking Water Carabao Coffee (Rich Aroma) Carabao Coffee (Espresso) Carabao Coffee (Robusta) Carabao Coffee (Espresso) Descriptions

• 250ml

glass bottle

• Flat taste
• Electrolyte

& vitamins

• (No

caffeine)

• 2 size = 600ml

& 1200ml

• Outsource

production

• Distribution

through Cash Vans Channel

• 30 small sticks in

1 pack

• Outsource

production

• Distribution

through Cash Vans Cannel and Tesco

• 30 small sticks in 1

pack

• Outsource

production

• Distribution

through Cash Vans Cannel and Tesco

• 180ml can
• Outsource

production

• Distribution

through Cash Vans Channel, BigC and 7- Eleven

• 180ml can
• Outsource

production

• Distribution through

Cash Vans Channel, BigC and 7-Eleven

Domestic Market Launch Date May 2014 February 2016 July 2016 November 2016 Retail Selling Price 10 THB 7 & 12 THB 85 THB 10 THB

Our Product Portfolio (Non-Energy Drink SKUs)

34 34

Products Seaweed Dish Washing Liquid Peanuts Toothbrush Razor Juice Fabric Softener Squid Snacks Retail Selling Price (THB) 5 10 5 10 10 10 10 5 Launch Date November 2015 April 2016 June 2016 July 2016 August 2016 September 2016 Products Toilet Cleaner Tissue Detergent Canned fish Coconut Nectar Bandages Retail Selling Price (THB) 25 5 10 Launch Date October 2016 December 2016 December 2016 October 2017 January 2018 October 2018 Note: As of December 2016

3rd Party Products for distribution

35 35

Note: Based on an assumption of THB 31.50 = 1 USD

Statistic Information

Carabao Group PLC. As of 27 February 2019 Closing Price: THB 55.00 Ticker SET: CBG Reuter: CBG.BK Bloomberg: CBG:TB Google Finance: BKK:CBG Listing date 21 November, 2014 Listing Venue SET F&B, SET50 Par Value 1 Baht Shares outstanding (mil.) 1,000 Market Cap. THB 54,750mn/USD1.7 bn 52 weeks High/Low THB 66.75 / THB 29.25 Free Float 25.91% Foreign Limit 49.0% Dividend policy at least 40% of consolidated net profit EPS (TTM) THB 1.16 P/E (TTM) 47.3x P/BV 7.6x Dividend Yield 1.5% Auditor: EY Board of Directors 9 members (4 independent)

36 36

WORLD CLASS WORLD CLASS

Carabao Group Public Co., Ltd. Tel: +66 2636 6111 Ext.882 Email : IR@carabaogroup.com www.carabaogroup.com/en

PRODUCT BRAND Investor Relations