Carabao Group Public Company Limited Opportunity Day FY17 0 Mar - - PowerPoint PPT Presentation

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Carabao Group Public Company Limited

Opportunity Day FY17

Mar 2018

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.

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2017 Business Highlights & 2018 Looking Forward

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2017 Performance Analysis: With VS Without ICUK

ICUK and Global Football Sponsorship: a strategic investment to build our footprint in global stage

Ex-ICUK & football sponsorship vs

• Incl. ICUK (Proportionate to 51% CBG’s stake holdings) & CBG’s portion of sponsorship

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Non-ICUK profitability –domestic business (1/3)

Portfolio expanded and new product groups took turn serving as the key driver to domestic sales growth in 2017

• New product groups i.e. other branded products and 3rd-party products led the way to an 18.6%

increase yoy, accounting for 22.3% of domestic sales

• Wider range of 3rd-party products alone pushed sales up THB 310mn yoy, thanks to the white spirit
• Channel-wise, cash van turned in a powerhouse where most of the growth and pricing upside are

driven through

Non-ICUK profitability –domestic business (1/3)

2015 Domestic Sales Energy Drinks Sports Drinks Other Branded Products 3rd-party Products 2016 Domestic Sales 5,477 614 51 238 195 6,576 By Products as a % of FY2015 Domestic Sales 100.0% 11.2% 0.9% 4.3% 3.6% 120.1%

Branded OWN, 93.4% Branded OEM, 3.6% 3rd-party Products, 3.0%

2016 Domestic Sales Energy Drinks Sports Drinks Other Branded Products 3rd-party Products 2017 Domestic Sales 6,576 41 (99) 699 606 7,822 By Product as a % of FY2016 Domestic Sales 100.0% 0.6%

• 1.5%

10.6% 9.2% 119.0%

Branded OWN, 77.8% Branded OEM, 12.0% 3rd-party Products, 10.3%

Note: Pie charts represent annual sales derived from individual product groups as a % of domestic sales in respective finanical reporting period

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Non-ICUK profitability –domestic business (2/3)

Strategic diversification and growth potential are the two compelling factors weighed positively against possible drop in near-term gross profits margin

• Fast growing products namely coffee and white spirit came to shoulder our own energy drinks that

had been faced with rising production costs over the year

• 3rd-party products were blended with differing margin and their return are considered accretive

37.0% 31.3% 38.8%

39% 28% 16% 16% 37% 28% 13% 12%

2015 Domestic GP Energy Drinks Sports Drinks Other Branded Products 3rd-party Products 2016 Domestic GP 2,123 221 18 38 31 2,430 By Products as a % of FY2015 Domestic Gross Profits 100.0% 10.4% 0.8% 1.8% 1.4% 114.5% 2016 Domestic GP Energy Drinks Sports Drinks Other Branded Products 3rd-party Products 2017 Domestic GP 2,430 (97) (28) 79 63 2,447 By Product as a % of FY2016 Domestic Gross Profits 100.0%

• 4.0%
• 1.2%

3.3% 2.6% 100.7%

Energy Drinks 95.5% Sports Drinks 1.7% Branded OEM 1.5% 3rd-party Products 1.3% Energy Drinks 90.9% Sports Drinks 0.6% Branded OEM 4.8% 3rd-party Products 3.8%

Note: Pie charts represent annual gross profits from individual product groups as a % of total gross profits in respective finanical reporting period

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Non-ICUK profitability –domestic business (3/3)

Energy drinks were put under margin pressure due to rising costs of amber glass container and sugar content despite our modest gain from the new excise tax regime

• New excise tax regime booked us

with cost saving of 0.11 THB for every bottle sold domestically at least until 2 years from now

• Our cluster of vertically integrated

manufacturing units in Bangpakong intended to reduce energy and

• perating costs going forwards
• Sugar price set free in line with global

market mechanism has tendency to benefit us

• Amber glass bottle became more

costly due in large part to increased price of cullet and hit gross profits margin by 1-2%

• We expect depreciations to total

+500 THBmn in 2018, up from 263 THBmn in 2017

+

• +
• +

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Export Business Profitability

Export sales made a further jump on the back of both existing and new markets

• CLMV soared a further 29.4% growth, led by Cambodia that broke record high during the last quarter

with volume sold up from 28 to 40 million cans sold in Dec

• China market shining out with a total of 1,019 THBmn in export sales this year is expected to play a

vital role tin and by all means

2016 Export Sales CLMV China Other Existing Markets Export by CBD Export by ICUK 2017 Export Sales 3,356 747 1,019 (286) 187 5,024 By country as a % of FY2016 Export Sales 100.0% 22.3% 30.4%

• 8.5%

5.6% 149.7% 1,481 44.1%

CBD 96.0% ICUK 4.0% CLMV 65.6% China 20.3% Afghanistan & Yemen 9.6% UK and Outside Asia 4.0% Others, 0.5%

Note: Pie charts represent annual sales derived from key export markets as a % of export sales in respective finanical reporting period

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2017 SG&A Analysis - Conso

Marketing (THBmn)

Sponsorship +413 (Non-ICUK THB 30mn, ICUK THB 393mn) Above-the-line Mktg +40 (due to initial launch of branded coffee products = 68 THBmn) Listing Fee (ICUK) +54 Other marketing expenses (ICUK) +156

Selling (THBmn)

Cash Van Expenses +c.100

Admin (THBmn)

Services & Fees Expenses +54 (due to Consulting Fees 15 THBmn) Moving & re-installation production lines 40 THBmn

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China Looking-forward: 2018 Market Stimulus Plan

POS and Marketing Plan

Business Status: 26 Branches (Up by 2 Branches)

• c. 900 Staffs

Marketing Timeline

10 10

China Looking-forward: 2018 Focusing Strategy

8-3-3-3 Strategy

• 1. Fuzhou
• 3. Putian
• 2. Nanping

Fujian

11 11

2017 UK Development

Current Customers

Increasing visibilities prompt us to move on to the next step

Q1 2017 Q2 2017 Q3 2017 Q4 2017 2016

More facings in modern trade channels

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UK Looking-forward: 2018 Investment Phase to create fans

Potential Customers

2018

• Listed in Jan’18
• To be on-shelf in

Apr’18

• In negotiation
• n shelf (F)

2Q2018

Product Differentiations

Continue our distinguish position of successful flavours initiation

Mandarin Orange

Engaging Marketing Campaign:

To match digital-lifestyle consumers with reasonable expenses

The Bonkers Drink for Bonkers Lives

• To be listed in Jul’18

NEW

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UK Looking-forward: Driving Stronger Sales with Push & Pull

PUSH

Retail Wholesales

14 14

UK Looking-forward: Driving Stronger Sales with Push & Pull

PULL

15 15

Global Marketing Platform

Looking-forward: 2018 Continue to utilize our global asset investments

Potential Export Countries

Windows of opportunity are widening thanks to Carabao Cup

Status: Done Australia KSA (Arabian Region) Received Interest Philippines

From CBD

Status: Early Negotiation Turkey Nigeria India Honduras Nepal Status: Done Azerbyjan Ghana France Peru Received Interest Macedonia

From ICUK

Status: Early Negotiation Germany Belgium/Netherland Balkans Region (Slovenia, Croatia, Bosnia) Denmark Romania Switzerland/ Austria Senegal

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Production facilities

ready for larger sales of Carabao energy drink in both domestic and export markets

2017 Business Highlights

Carabao Dang

hold a strong customer base (+0.3%YoY) amid the Thai energy drink market shrink of -2.7%YoY

RTD Coffee

received overwhelming demand reaching maximum production capacity of OEM supplier at c.8-9 million cans per month

3rd Party Products

driven by new key product i.e. Spirits – 1st time sold in Apr’17)

Export markets

CLMV: +29% sales growth New market: China 1st time export in Feb’17, now contributing to c. 20% of total Overseas Revenue in FY2017

ICUK

Increasing visibilities in nationwide modern trades; reaching c. 20,000 POS vs 8,000 POS in FY2016 Expansion Updates: Bottling Capacity: c.1,800 mn bottles/ year (1Q18) Canning Capacity: c.1,400 mn cans/ year (since Dec’17) Amber Glass Bottle Capacity: c. 1,300 mn bottles/year (since Dec’17)

Reaping Carabao Group’s Assets

Assets of CBG Strong Brand Quality Product Cash Van

Extensive Internal Distribution System

BaoDang Ladies Girls Product Differentiation Global Marketing Platform

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2018 Growth Driver

(1) According to Spirits revenue of a key player in Thailand market Production facilities

ACM: Aluminum cans production facilities to be ready for test run by 3Q2018

Carabao Dang

Integrating marketing incentives with distribution coverage

RTD Coffee

new capacity of OEM supplier at c.13 million cans per month; increase market share

3rd Party Products

driven by potential growth of key product i.e. Spirits of which the market size is THB c.80k-100k million per year(1)

Export markets

CLMV: effective consumer marketing activities implemented by the local importer and strong brand recognition China: Increasing brand awareness to drive volume sold New markets: Australia

ICUK

New flavours: Mandarin Orange Increasing POS & brand recognition New export opportunities into European, Africa and Asia regions

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Appendix: Detail Financial

19 19

Statement of comprehensive income

Remark: G&A excludes Other Expenses

Unit: THB million 2015 2016 2016 2017 2017 Change 4Q2016 4Q2017 4Q2017 Change %sales %sales YoY %sales YoY Revenue from sales 7,753 9,943 100.0% 12,904 100.0% 29.8% 2,837 3,181 100.0% 12.1% Costs of goods sold 4,893 6,388 64.2% 8,840 68.5% 38.4% 1,889 2,286 71.9% 21.0% Gross profits 2,860 3,555 35.8% 4,065 31.5% 14.3% 947 895 28.1%

• 5.6%

Selling expenses 1,120 1,462 14.7% 2,379 18.4% 62.7% 500 571 18.0% 14.3% G&A expenses 395 553 5.6% 741 5.7% 33.9% 213 217 6.8% 2.0% Operating profits 1,380 1,540 15.5% 945 7.3%

• 38.6%

235 107 3.3%

• 54.6%

Other incomes 121 147 1.5% 164 1.3% 11.4% 27 34 1.1% 25.6% EBIT 1,466 1,687 17.0% 1,109 8.6%

• 34.3%

262 140 4.4%

• 46.4%

EBITDA 1,702 1,914 19.2% 1,372 10.6%

• 28.3%

319 219 6.9%

• 31.2%

Interest expenses 2 4 0.0% 48 0.4% 1196.7% 1 19 0.6% 1277.9% EBT 1,465 1,683 16.9% 1,061 8.2%

• 36.9%

260 121 3.8%

• 53.4%

Income tax expenses 209 278 2.8% 261 2.0%

• 6.3%

64 42 1.3%

• 33.5%

Net profits for the period 1,256 1,405 14.1% 801 6.2%

• 43.0%

197 79 2.5%

• 59.9%

1,256 1,490 15.0% 1,246 9.7%

• 16.4%

282 209 6.6%

• 25.7%

Equity Holder of the Company

20 20 ASSETS Dec-16 Dec-17 Change LIABILITIES Dec-16 Dec-17 Change Current Assets Current Liabilities Cash, Cash Equivalents 745 147 (598) Bank overdrafts&short-term loans from financial institutions 750 845 95 Current Investments 604 7 (597) Trade and other payable 1,365 1,897 532 Trade and other receivable 562 960 398 Current portion of long-term loans from financial institution

• 300

300 Inventories 434 656 223 Other current liabilities 210 164 (46) Other current assets 110 389 279 Total Current Liabilities 2,325 3,207 881 Total Current Assets 2,455 2,159 (296) Long-term loan from financial institutions 250 2,190 1,940 Other non-current liabilities 104 118 14 Total non-current liabilities 354 2,308 1,954 Total Liabilities 2,679 5,515 2,836 Non-Current Assets SHAREHOLDERS' EQUITY Long-term Investment

• Issued and fully paid up share capital

1,000 1,000

• Investment Properties

104 103 (1) Premium on shares 3,963 3,963

• Property, plant & equipment

6,627 9,609 2,982 Retained earnings 1,478 1,775 297 Intangible Assets 15 67 52 Other components of shareholders' equity 433 376

• Deferred Tax Assets

34 31 (2) Equity attributable to owners of the Company 6,873 7,114 241 Other non-current assets 8 15 7 Non-controlling interests of the subsidiary 226 (108) (334) Goodwill 536 535 (1) Total Non-Current Assets 7,324 10,361 3,037 Total shareholders' equity 7,099 7,005 (94) Total Assets 9,778 12,520 2,741 Total liabilities and Equity 9,778 12,520 2,742 STATEMENT OF FINANCIAL POSITION Unit: THB million

Statement of financial position

21 21 BREAKDOWN OF DOMESTIC AND EXPORT SALES

Total revenue from sales

FY17 Sales growth delivered our target

22 22

Breakdown of our domestic sales

DOMESTIC SALES CHANNEL CONTRIBUTION FROM CASH VAN STRATEGY

DOMESTIC: Increasing sales driven by growth of RTD coffee and 3rd party products for distribution

23 23

THB mn FY15 FY16 %YoY FY16 FY17 %YoY 4Q16 3Q17 4Q17 %YoY %QoQ Cambodia 1,547 2,074 34% 2,074 2,489 20% 599 605 739 23% 22% Myanmar 223 279 25% 279 422 51% 99 69 126 27% 83% Vietnam 98 173 77% 173 356 106% 68 142 74 9%

• 48%

Yemen 167 202 21% 202 225 11% 71 70 112 59% 62% Afghanistan 164 481 193% 481 257

• 46%

160 62

• 100%
• 100%

China

• -

1,019 N/A

• 407
• N/A
• 100%

Others 77 153 99% 137 80

• 42%

25 21 17

• 32%
• 18%

Sales from Thailand 2,276 3,362 48% 3,346 4,847 45% 1,022 1,375 1,068 5%

• 22%

Sales from ICUK

• 16

203 1179% 16 97 34 117%

• 65%

Total 2,276 3,362 48% 3,362 5,050 50% 1,038 1,472 1,103 6%

• 25%

Overseas sales by key export countries

EXPORT: 4Q17 Overseas sales soften due to winter effect

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Gross profits margin overview

35.0% 10.9% 10.2% Domestic GPMs by Product

GROSS PROFITS: In correlation with sales growth and product mix GROSS PROFITS MARGIN: In correlation with product mix

Domestic GPMs by Product 36.8% 12.5% 11.7%

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Source: Nielsen energy drink market report, December 2017 ("Nielsen Report")

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

Selling Distribution (Coverage) Selling Distribution (Coverage)

Significant share of Thai energy drink market

95% 95% 95% 96% 96% 95%

We were able to hold strong customer base amid the 2017 energy drink market shrink of -2.7%yoy

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Thai energy drink and its geographical segmentations

Source: Nielsen energy drink market report, December2017 ("Nielsen Report")

Thai energy drink market by geographical segmentation Central Region Northeast Region North Region

We successfully continued to stay ahead on the Central Region while taking steps closer to bridging the gap of share for the Northeast Region

Greater BKK, 11.8%

Central, 27.9%

North, 19.7% Northeast, 31.2% South, 9.4%

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WORLD CLASS WORLD CLASS

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

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