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MUF07 P/L Report

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FY2018 Business Update

30 Jan 2019

(VND trillion) 2017 2018 % Growth 4Q17 4Q18 % Growth Revenue 37.6 38.2 2% 10.2 11.6 14% MCH 13.5 17.3 28% 4.6 5.4 18% MNS 18.7 14.0 (25)% 4.1 3.9 (4)% MSR 5.4 6.9 27% 1.5 2.2 47% EBITDA 9.4 10.5 12% 3.2 2.8 (12)% NPAT Post-MI 3.1 4.9 58% 1.9 1.1 (40)% Core NPAT Post-MI 1 2.2 3.5 58% 1.0 1.1 17% EBITDA margin 25% 27% 2% 31% 24% (7)% Core NPAT Post-MI margin 6% 9% 3% 10% 10% 0% EPS (VND/share) 2,681 4,227 58% 1,633 978 (40)% Core EPS 2 (VND/share) 1,905 2,990 57% 845 988 17% EXCLUDING ONE TIME IMPACT Revenue (if excluding MNS) 18.9 24.2 28% 6.1 7.6 25% Core NPAT Post-MI (if excluding MNS) 1.6 3.4 115% 0.9 1.2 36% Core NPAT Post-MI (if normalize

• wnership at TCB 3)

1.6 3.5 118% 0.7 1.1 58%

2

FY2018: Delivered Record NPAT Post-MI of 4.9T and Strong 4Q2018 Momentum

FY2018 Performance

• 2% net revenue growth driven by:
• 28% revenue growth of MCH backed by innovations and core

brands; and

• 27% growth of MSR driven by operational efficiencies and

favorable price environment; offset with

• (25%) revenue decline of MNS due to slower pig feed market

recovery than expected

• 57% growth in core NPAT Post-MI driven by:
• SG&A rationalization with 2.6% reduction in SG&A as a

percentage of consolidated net revenue mainly from MCH reducing SG&A as a percentage of revenue by 5.0% compared to 2017

• Disciplined capital allocation (deleverage + reduced MI) with 17%

reduction in net interest expense 4Q2018 Performance

• 14% growth in net revenue driven by continuous double digit growth in

MCH and MSR. Pig feed market started recovery with MNS topline growth of 18% in 4Q2018 versus 3Q2018

• Successful launch of MEATDeli = shifting MNS to FMCG led

business to drive long-term growth and profits across pig cycles

• 17% growth in core NPAT Post-MI with double digit margin driven by
• ~VND12.5 trillion deleveraging resulting in VND170 billion interest

savings, offset with

• 12% decline in EBITDA mainly from higher brand building

investment of MCH to drive 2019 innovation pipeline

KEY HIGHLIGHTS

1. Core Profit excludes net one-time gains (non-core) of VND1,472 billion in 2Q2018 primarily from the “deemed disposal” of the Company’s interest in Techcombank as a result of the bank’s recent equity issuances at a price higher than the Company’s carrying value. Core Profit of 2017 excludes a net one-time gain of VND933 billion in 4Q2017 from selling convertible bonds of Techcombank. 2. Core EPS is calculated based on Core NPAT Post-MI as defined in footnote 1 divided by total number of shares (including treasury shares) 3. Assume MSN ownership of TCB in 2017 is the same as in 2018

KEY FINANCIALS

3

FY2018: 57% Core NPAT Post-MI Growth driven by Sustainable MCH Growth and Rationalized SG&A…

2.2 2.2 2.2 2.2 2.2 1.8 3.5 0.2 0.1 0.9 0.6 (0.4) 2017 Revenue Gross margin improvement SG&A reduction Net financial expense reduction Others 2018

(VND trillion)

37.6 37.6 32.9 37.6 38.2 3.8 1.5 (4.7) 2017 MCH MNS MSR 2018

(VND trillion)

• 28% growth in MCH for FY18 backed by brand

+ innovation focus and sustained growth momentum of ~20% in 4Q2018 while maintaining healthy stock of less than 1 month

• 30%+ growth in seasonings and

convenience foods supported by successful premium innovations

• 35%+ growth in beverage driven by

Wake-up 247 energy drinks and expanded distribution network

• SG&A rationalization across businesses:
• MCH: Reduced trade promotion and invested

back into marketing. Total SG&A growth of 7% to deliver a topline growth of 28%

• MNS: Standardized sales policy + optimized

salesforce to achieve better sales efficiency. Total SG&A reduction of 43% while revenue declined by 25%

KEY HIGHLIGHTS KEY HIGHLIGHTS REVENUE DRIVERS CORE NPAT POST-MI ON TRACK TO ACHIEVE BUDGET

4

…as well as Strengthened Balance Sheet.

41.1 34.8 22.2 4.2x 3.7x 2.1x 2016 2017 2018 Total Debt Debt to EBITDA

(VND trillion)

• Gross debt decreased by over VND12.5

trillion in 4Q2018

• Gross Debt / EBITDA = 2.1x (2018)
• vs. 3.7x (2017)
• Interest savings of VND1 trillion per

year to be fully realized from 2019

• nwards and VND200 billion has

been realized in 4Q2018

• Expect to achieve Vietnam’s long-term

sovereign credit rating of BB- in 2019.

KEY HIGHLIGHTS

8.1 8.1 12.8 10.1 10.1 19.8 6.8 17.8 17.8 5.0 7.3 10.9 0.1 (2.6) (2.6) (1.3) (13.0) (1.9) Cash YE2017 Net cash from

• perating

activities Net interest paid CAPEX Capital contribution Net dividend paid Net borrowings Net cash from M&A activities Others Cash YE2018 (VND trillion)

• Strong operation cash flow of VND7.3

trillion (20% growth vs. 2017)

• CAPEX of VND2.6 trillion: VND1.2 trillion for

building meat platform, maintenance + expansion of MSR and MCH, VND1 trillion and VND0.4 trillion, respectively

KEY HIGHLIGHTS CASH MOVEMENTS DURING THE PERIOD GROSS DEBT BALANCE

5

FY2019 Outlook: Double Digit NPAT Margin on the back of 4Q2018 Momentum

• 20%+ revenue growth

momentum led by innovations in seasoning and convenience foods premiumization + beverage expansion anchored by Wake-up 247

• Key risk: Slower consumer
• ff-take of innovation

pipeline and continued slow momentum in beer

• Pig price recovery with

feed market expected to grow by 10%+

• Meat: Full ramp up in

Hanoi (~5-10% revenue contribution) + Ho Chi Minh city launch in 4Q2019

• Key risk: (1) Slower

consumer adaptation to chilled fresh meat and scale up of retail distribution (2) Pig disease

• utbreak impacting feed

sales growth

• Growth driven by

increased sales volume (5-10% growth) with;

• Key risk: Continued low

Tungsten price environment

1) Excludes one-time gain of VND933 billion from disposal of Techcombank’s convertible bonds in 2H2017 2) Excludes net one-time gains (non-core) of VND1,472 billion in 1H2018 primarily from the “deemed disposal” of the Company’s interest in Techcombank as a result of the bank’s recent equity issuances at a price higher than the Company’s carrying value.

• Profitability is expected to

grow by 2x revenue

growth with double digit NPAT margin

• Continue to ensure

effective SG&A investment (~15-16% as percentage

• ver revenue)
• Fully realize interest

savings from 2018 deleveraging

Profit Growth > 2x Revenue Growth

(VND billion) 2017A 2018A 2019 Low 2019 High 2019 Low

• vs. 2018

2019 High

• vs. 2018

Revenue 37.6 38.2 45.0 50.0 18% 31% EBITDA 9.4 10.5 NPAT 3.1 4.9 5.0 5.5 2% 12% Core NPAT 2.2 3.5 5.0 5.5 44% 58% EBITDA margin 25% 27% Core NPAT margin 6% 9% 11% 11%

MCH MNS MSR MSN Group

6

MCH: Brand and Innovation focus drove 28% revenue growth + 1.5x EBITDA growth

13.5 17.3 +28% 2017 2018

(VND trillion)

REVENUE

2.8 4.2 1.2 1.1 20% 24% 26% 20% 2017 2018 4Q2017 4Q2018 EBITDA EBITDA margin

(VND trillion)

EBITDA

• Healthy and sustainable double digit revenue growth on the back of

(i) healthy distributor stock level of less than 1 month and (ii) increased marketing investment by 34% + reduced sales spend by 7%

• Strong premiumization in seasonings and convenience foods
• Continued growth momentum in beverages, especially in energy

drinks segment

• Recovery of coffee with 2018 growth of 10%+ given revenue de-

growth in 2017 Driven by (i) Innovation focus contributing ~VND1 trillion in revenue and (ii) Brand focus with 34% marketing budget growth

• 50%+ growth in EBITDA (2x revenue growth) driven by pull business

model

• Optimized trade promotion spending: ~8% over sales in FY2018
• vs. ~11% in FY2017
• EBITDA margin in 4Q2018 is lower than average FY2018

mainly because of higher investment in marketing for 4Q2018 innovation launches to support 2019 growth

KEY HIGHLIGHTS OF 2018

4.6 5.4 +18% 4Q2017 4Q2018

7

MCH: Big Contributors Outperformance + Slow Momentum of Beer

HIGHLIGHTS OF ACTUAL 2018 VERSUS 2017

• Premium product sales

growth of 40% and contribution of 10% to portfolio

• 30% growth in volume

driven by core brands – Nam Ngu, Chin-su

• Modern trade =

strategic channel to win urban

• Premium product sales

growth of 60%+ and contribution of 45% to portfolio

• 3x run rate of Omachi

cup from launch 5 quarters ago (~15% contribution in 4Q Omachi revenue)

• Maintaining market

share + increasing profit in mainstream and economy segments

• Energy Drink delivering

consistent 60% growth since launch driven by both focused brand communication + distribution expansion

• Beverage POS

increasing from 75k last year to 160k today

• Recovery of coffee

driven by Vinacafe brand with 25% revenue growth

• Upgrading R&D

platform to deliver break-through innovations to sustain 10%+ growth

• Ponnie, a premium

sausage and 1st co- produced innovation between Masan and Jinju Ham, launched in 4Q2018.

• Solid innovation

pipeline is expected in 2019

• Regional focused to

improve sales + marketing investment efficiency

• Building on-channel as

a strategic route to market + brand building

Seasonings 35% FY revenue growth 26% 4Q revenue growth

(~40% revenue contribution)

Noodle 29% FY revenue growth 17% 4Q revenue growth

(~30% revenue contribution)

Beverage 36% FY revenue growth 56% 4Q revenue growth

(~15% revenue contribution)

Coffee 11% FY revenue growth flat 4Q revenue

(~10% revenue contribution)

Meat (5)% FY revenue decline 25% 4Q revenue growth

(~1% revenue contribution)

Beer 23% FY revenue growth (33)% 4Q revenue decline

(~2% revenue contribution)

8

MNS: Shifting towards FMCG business with Launch of MEATDeli

• Packaged chilled fresh

meat

• Qualified for

Vietnamese standard for chilled meat TCVN12429-1:2018

• Diversified portfolio

with ~28 SKUs across meat parts at different consumer pack sizes DIVERSIFIED CONSUMER PORTFOLIO

• Started airing TVC in

4Q2018 to introduce and educate consumers about the new fresh meat concept that is more hygienic and delicious BRAND BUILDING & CONSUMER EDUCATION

• 5 MEATDeli retail

stores

• 39 Vinmart stores in

Hanoi INITIAL DIRECT TO CONSUMERS DISTRIBUTION MODEL

• Feed: 12 factories

nationwide with total capacity of 3.5 million tons per year

• Farm: Located in

Nghe An with capacity

• f 250K porkers and

investment of VND1.4 trillion

• Slaughtering: Located

in Ha Nam with capacity of 1.4m porkers and investment of VND1

• trillion. Started
• peration in Dec 2018

under BRC standard – the highest for food safety INTEGRATED SAFE FOR HEALTH MEAT PLATFORM

9

MNS: Focused on Improving Feed Profit in 2018 + Recovery Signals in 4Q2018…

18.7 13.9 4.1 3.2 3.5 3.3 3.9 3.5 2.9 3.9 4.4 5.2 2017 2018 4Q17 1Q18 2Q18 3Q18 4Q18 Total Feed Sales/Salesman (VND bn)

(VND trillion)

• While FY2018 revenue declined by 25%, MNS delivered 17%

revenue growth in 4Q2018 versus 3Q2018 along with pig feed market recovery

• Standardized sales policy + optimized sales efficiency to

protect profitability with EBITDA margin of ~9% during market crisis and increased raw material pricing environment.

• ~1% decreased in EBITDA margin in FY2018 compared

with FY2017 mainly because of raw materials cost increasing by ~10% in 2018 which was not fully transferred to farmers due to the pig crisis offset with

• Increased

salesman efficiency by 2x in 4Q2018 compared with 1Q2018, which will be fully realized in FY2019

KEY HIGHLIGHTS REVENUE EBITDA

1.9 1.3 0.4 0.3 10.2% 9.4% 8.8% 8.7% 2017 2018 4Q17 4Q18 EBITDA EBITDA margin

(VND trillion)

10

…and Expecting to Outgrow Market in 2019.

39.0 45.2 41.7 36.8 29.6 23.8 30.8 27.3 29.2 43.5 50.1 49.5 39.3 43.2 36.4 31.8 25.7 20.7 31.1 28.3 31.4 44.2 52.0 45.2 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 South North (VNDk/kg)

3 MONTHS sustained pricing for farmers to gain confidence to increase pig herds (2Q2018) 6 MONTHS for sows to produce piglets (3Q + 4Q2018) 3 MONTHS for piglets to grow to porkers. This is the highest feed consumption phase of pig cycle = Market to recover fully in 1Q2019

LAG TIME OF FEED MARKET RECOVERY

PIG PRICES

• Market: Pig feed market takes 6-9 months for full recovery. Feed market is

expected to grow by 10%+ in 2019

• MNS Innovations: new innovations under Bio-zeem brand aimed at increasing

productivity to capture farmers switching to productivity mode post crisis + innovations in mid-tier and industrial farm segments

KEY HIGHLIGHTS Subject to feed market growing as per expectations, MNS feed sales are expected to increase by 10%+ in 2019, with EBITDA margin maintained at the same level as in 2018

11

MSR: Additional Steps Taken to Become The Integrated Global Tungsten Player

• 2018 Performance Highlights: ~27% revenue growth

backed by increasing operating efficiencies + favorable pricing

• Long-term game: building MSR as the largest ex-China

Tungsten Chemical Producer

• Consolidated 49% of JV in Aug-2018: immediate

financial result = NPAT post-MI margin expected to increase by ~1.5% in 2018 or 4% if annualized

• Increasing Tungsten Chemicals capacity from 7,500

ton WO3 to 12,000 ton WO3 in 2H2019

• Pricing Environment Update
• Tungsten

prices softened in 2H2018 due to seasonality factors in Europe and ongoing USA- China trade war. However, tungsten concentrate market continues to remain tight and very limited supply available globally backed by recent shutdowns

• f

an Ex-China tungsten mine and stringent environment law in China

• Flourspar

price increased from USD410/ton at YE2017 to USD565/ton at YE2018, offsetting the impact of Tungsten price

KEY HIGHLIGHTS

REVENUE

199 213 258 282 318 336 302 275 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18

(USD/mtu)

APT PRICE

5.4 6.9 1.5 2.2 +27% +47% 2017 2018 4Q17 4Q18

(VND trillion)

12

MSR: Increased operational efficiencies

• 20% EBITDA growth backed by revenue growth and

disciplined cost management

• Operational efficiencies: Recovery rate increased

from 64% in 2017 to 68% in 2018

• Slight decrease in EBITDA margin driven by higher

contribution of 3rd party procurement with lower margin to utilize Masan Tungsten capacity

KEY HIGHLIGHTS

2.8 3.3 0.8 1.0 51.5% 48.5% 55.4% 44.6% 2017 2018 4Q17 4Q18 EBITDA EBITDA margin

(VND trillion)

EBITDA

13

TCB: record PBT of VND10.6T in 2018 with ROAE of 21.5%

Source: TCB analyst presentation 2018

• Solid profitability metrics
• 21.5% ROAE
• 2.9% ROAA
• 3.7% NIM
• Best-in-class asset quality
• 1.8% NPL
• 29% CASA
• 65% LDR

KEY METRICS

• Total operating income grew by 18%
• Stable revenue base, healthy mix of net-interest

income (66%) and non-interest income (34%)

• PBT grew by 33%
• Maintained expense discipline with CIR of 35%

KEY HIGHLIGHTS

14

FY2018 Takeaways

MSN Delivered target NPAT of 3.5 trillion FY2018 + achieved double digit NPAT margin in 4Q2018

• Growth across business units except MNS
• MCH: Sustainable 20%+ growth momentum (20% in 4Q2018) led by innovations with premiumization of foods + beverage

portfolio expansion. Slow momentum in Beer.

• MNS: Transforming into FMCG with successful MEATDeli launch in Hanoi. To pick up in 2019 with MEATDeli driving long term

growth and profits across cycles + feed market recovery with 10%+ market growth in 2019

• MSR: Healthy operating cash flows of ~1.0 trillion + evolving as the largest Tungsten chemical producer
• TCB: Record PBT of VND10.6T in 2018 with ROAE of 21.5%
• Disciplined and effective SG&A investment: SG&A as a percentage of revenue decreased to 16% in 2018 vs. 19% in 2017.
• Strengthened balance sheet: over VND12.5 trillion debt reduction has lowered interest expenses and increased ownership of VCF

and Tungsten Chemical Plant has reduced minority interest drag

15

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