Company Presentation November 2016 Important Notice The information - - PowerPoint PPT Presentation
Company Presentation November 2016 Important Notice The information - - PowerPoint PPT Presentation
Company Presentation November 2016 Important Notice The information in this presentation has been prepared solely by Vietnam Dairy Product Joint Stock Company ( Vinamilk ) and has not been independently verified, and no representation or
2 The information in this presentation has been prepared solely by Vietnam Dairy Product Joint Stock Company (“Vinamilk”) and has not been independently verified, and no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein or as to the reasonableness of any assumptions herein
- r the grounds on which they are based. The information set out herein may be subject to updating, revision, verification and amendment and
such information may change materially. Vinamilk is under no obligation to update or keep current the information contained in this presentation and any opinions expressed herein are subject to change without notice. None of Vinamilk or any of its advisers or representatives, or any of their respective affiliates, shall have any liability whatsoever (in negligence or otherwise) for any loss whatsoever arising in connection with this presentation or any oral information provided in connection herewith. This presentation is for information purposes only. Nothing in this presentation constitutes an offer to sell or the solicitation of offers or bids to acquire any securities of Vinamilk. In particular, this presentation is not an offer of securities for sale in the United States and is not for publication or distribution in the United States (within the meaning of Regulation S under the United States Securities Act of 1933, as amended). Attending this presentation in certain jurisdictions may be restricted by law. No action has been taken by Vinamilk or any of its advisors or representatives that would permit the possession or distribution of this presentation in any jurisdiction where action for that purpose is required. Persons attending this presentation are required to inform themselves about and to observe any such restrictions. Certain statements in this presentation constitute "forward-looking statements". These statements, which contain the words "anticipate", "believe", "intend", "estimate", "expect" and words of similar meaning, reflect Vinamilk’s beliefs and expectations and are subject to risks and uncertainties that may cause actual results to differ materially. These risks and uncertainties include, among other factors, changing business
- r other market conditions and the prospects for growth anticipated by the management of Vinamilk. These and other factors could adversely
affect the outcome and financial effects of the plans and events described herein. As a result, you are cautioned not to place undue reliance
- n such forward-looking statements. The management of Vinamilk disclaims any obligation to update its view of such risks and uncertainties
- r to publicly announce the result of any revisions to the forward-looking statements made herein, except where it would be required to do so
under applicable law. Moreover, certain information in this presentation (including expectations and forecasts) relating to the Vietnamese dairy industry and other industry and economic data has been sourced from third party sources that Vinamilk believes are reliable; however, Vinamilk, its advisors and representatives and their respective affiliates cannot ensure you that such information third party information has been prepared on a reasonable basis or is otherwise fair, accurate, complete or correct.
Important Notice
3
Ngi trình bày
Mai Kieu Lien Member of BOM and CEO
Tran Chi Son Senior Finance Manager
Le Thanh Liem Executive Director - Finance and Chief Accountant
Le Quang Thanh Truc
Company Secretariat, Director
- f Foreign Subsidiaries
Management
4
Table of Content 1 Introduction 2 Key Investment Highlights 3 Financial Review
Section 1 – Introduction
6
US$
1.8Bn
Extensive Product Offering Across Multiple Categories
Domestic 80% Overseas 20% General Trade 87% Modern Trade & Others 13%
Vinamilk at a Glance
Net Revenue by Channel
FY15 (%)
Net Revenue by Region
FY15 (%)
US$
1.8Bn
Liquid Milk Soymilk Yogurt Powdered Milk Condensed Milk Cheese Ice Cream Beverages
Source Company Filings Source Company Filings
7
Notes
- 1. Exchange rate of VND22,260 per US$1.00 as of 14 October 2016
- 2. EBITDA = Net Revenue – COGS – SG&A + Depreciation & Amortization
40-year Heritage of
Dairy in Vietnam
Largest Consumer & Retail
Company in Vietnam
215,000 Points of Sale ~US$1.8Bn in FY15
Net Revenue(1) Diverse Product Portfolio with More than 200 SKUs
21% Net Revenue CAGR and 17% Net Income CAGR over
last 5 years
~US$500MM in FY15 EBITDA(1)(2) 25% Margin
Vinamilk by the Numbers
8
9.4 9.4 8.7 7.8 6.0 4.9 4.5 4.5 776 1,421 2,167 2010 2015 2020E
World Ranking
1,368 1,281 322 258 208 144 127 101 93
2015 Total Population (MM) 2015 Disposable Income per Capita (US$)
Large and Young Consumer Base of 93MM People Emerging Middle Class with Rising Income Levels
#1 #2 #3 #4 #5 #9 #10 #12 #14
Source Industry Data
38 27 38 28 31 39 47 24 30 Median Age
2015-20E Nominal GDP CAGR
One of the Fastest-Growing Economies Globally
Source Global Insight Source Industry Data
56,083 52,888 9,555 8,048 5,813 3,346 2,904 2,070
2015 Real GDP per Capita (US$)
Significant Potential in GDP per Capita
Source Industry Data
~27x
Vietnam – One the Most Attractive Markets in ASEAN
Section 2 – Key Investment Highlights
10
Vinamilk – Vietnam’s Domestic Champion with a 40-Year Brand Heritage
1
Strong Leadership Across Diversified Product Categories
2
Extensive Nationwide Distribution Network
3
Vertically Integrated Business Model Supported By Modern Production Facilities, Innovation Capability and Long-Term Supplier Relationships
4
Highly Visible Growth Trajectory Driven Increasing Volumes, Enhanced Premiumization and Operational Efficiency
5
Proven Historical Track Record of Financial Performance
6
Highly Experienced Management Team
7
Key Investment Highlights
11
1
Notes
- 1. Urban Consumer Reach Points measures how many urban households a brand is reaching and how often they are being purchased
Vinamilk’s Brand Heritage Vinamilk is among the Most Recognized FMCG Brands
- Pioneered the dairy category in Vietnam in 1976
- Currently the largest listed company in Vietnam by
market cap
- Portfolio of well-recognized and trusted brands that
resonate with local consumers
- Targeting all consumer segments from pre-natal to
the elderly
- Consistently perceived for delivering quality and value
Vietnam Brand Ranking by Urban CRP(1), 2015 (MM) 70.3 56.4 39.0 25.0 23.6 22.3
Source Kantar World Panel Mama Kids’ Brand Youth & Beauty Premium Infant Formula Elderly’s Milk Family’s Brand Common Infant Formula Functional Infant Formula Pregnant 0-3 years 2-6 years 6-9 years 9-14 years 18-25 years 25-35 + 50+ years 15-17 years
Vinamilk – Vietnam’s Domestic Champion with a 40-Year Brand Heritage
12
314 51 34 26 22 15 13 US Malaysia Thailand China Philippines Vietnam Indonesia USDA Recommendation: 220
Consumer Expenditure on F&B per Capita (US$)
Rapid Growth of Consumer Expenditure on Food and Beverages
285 555 844 2010 2015 2020E
Source Industry Data
2,633 3,639 5,254 2012 2015 2020E
Vietnam Dairy Market Valued at US$3.6Bn and Growing at 8% Per Annum
Vietnam Dairy Market Size (US$MM)
Source Industry Data Source Industry Data
Dairy Consumption per Capita (kg)
Significant Upside Potential for per Capita Consumption
~21x
1
Vietnam is One of the Most Attractive Dairy Markets Globally
13
Largest Dairy Producer in Vietnam
Market Share by Dairy(1) Retail Value, 2015 (%)
Source Industry Data Notes
- 1. Includes butter and margarine, cheese, drinking milk products, yoghurt and sour milk products, and other dairy (chilled and shelf stable desserts, chilled snacks, coffee
whiteners, condensed milk, cream, fromage frais and quark)
2 Strong Leadership Position…
49.0% Competitors 51.0% (FrieslandCampina, Abbott, MeadJohnson, Nestle, Nutrifood, IDP, Moc Chau, TH, Yakult, Kinh Do, and others)
14
79.4% Others 20.6% 52.9% Others 47.1% 24.9% Others 75.1% 79.3% Others 20.7% 84.3% Others 15.7% 51.8% Others 48.2%
Liquid Milk Infant Formula Condensed Milk Spoon Yogurt Sample Products
2
Leadership Across Product Groups With a Portfolio of More Than 200 SKUs
…Across Diversified Product Categories
Key Product Groups Market Positioning 2014
23.7% Others 76.3% 84.1% Others 15.9%
2014 2014 2014 2015 2015 2015 2015
15
215,000 Retailers 243 Exclusive Distributors 1,609 Supermarkets 575 Convenience Stores 200 Vinamilk Shops
240,000 215,000 200,000 161,000
Dominance Across Traditional As Well As Modern Trade
Source Company Filings
Extensive Coverage Supported by a Vast POS Network
Source Company Filings
Point of Sales in Vietnam
Sales Office
Ha Noi Da Nang Can Tho
Vinamilk Head Office
Ho Chi Minh City
Logistics Enterprise(1)
Notes
- 1. Oversee warehouses and transportations of raw materials as well as finished goods
3
Extensive Nationwide Distribution Network
16 Inventory Management Packaging Ha Noi Ho Chi Minh City
Vertically Integrated Infrastructure and Management Systems
The only FMCG player to have facility in Central Vietnam
13 Production Facilities Across Vietnam
Production Lines
- Chill tankers deliver raw milk at lower than 6oC
Collection of Raw Milk
- Manufacturing technologies imported from
Germany, Italy, and Switzerland
- 100% automation by Tetra PlantMaster
- Packaging technologies by Tetrapak,
Bencopack, and SIG Combibloc
- Spray dry technology by Niro – retains high
content of nutrients and minerals
- ERP technology powered by Oracle manages
inventory and minimizes spoilage loss
- Automated shipment within warehouses and
factories by LGV robots
North
1 Vinamilk Factories 1 Dairy Farm
Central
4 Vinamilk Factories 6 Dairy Farms
South
8 Vinamilk Factories 3 Dairy Farms
Headquarter Healthcare Clinic
4
Vertically Integrated Business Model Supported By Modern Production Facilities…
17
Strong Track Record of Product Innovation and Successful Products Overview of Innovation Capabilities
- Qualified R&D team with deep
knowledge of local tastes and preferences
- Partnership with 3 leading biotech
companies DSM, Lonza, and Chr. Hansen for research, application and product development
Optimum Gold powdered milk RTD nutrition milk, i.e. Dielac Grow, Dielac Alpha Gold, Dielac Grow Plus, and Optimum Gold Ozé – flavored iced juice Four-Season Twin Cows ice cream Dielac Alpha Organic Fresh milk (made in USA) Drinking yoghurt: Aloe, Pomegranate, Orange, Strawberry Spoon yoghurt – Pomegranate
2015
New Products Launched
2016
New Products Launched
4 …Innovation Capability…
18
- Currently has 10 cow-farms producing ~600 tons of
raw milk each day
- 7 GlobalG.A.P-compliant farms
- 2 new large-scale farms under construction
with a total designed capacity of ~24,000 cows
- 1 organic farm – 1st in Vietnam
- Industrialized farms also serve as technical
support centres for milk cow farmers in the region
- Local farmers and own farms supply raw fresh milk,
currently accounting for ~30% of the total production demand
- Domestic supply of raw milk expected to reach
40% in the next five years
- Imports of milk powders accounts for ~70% of the
total production demand. Imports are mainly from New Zealand, Australia, USA and Europe
Commitment to Increasing Raw Material Self-Reliance and Developing Local Dairy Farm Communities
600 1,000–1,200 2015A 2020E 110,000
160,000-180,000
2015A 2020E Number of Cows Domestic Raw Fresh Milk Supplies (tons per day)
Source Company Filings Source Company Filings Source Company Filings
4 …and Long-term Supplier Relationships
19
Continue to Drive the Volume Growth Over and Above the Market Growth
Best-in-class marketing, sales, and R&D
capabilities drive sales growth
Vinamilk Organic
First organic milk in Vietnam, manufactured in accordance with international standards
Optimize the Product Mix to Drive Premiumization
Targeting the growing upper-middle income
class
- Improves product quality and expands
product portfolio
Product R&D Team
- Analyses consumer preferences and
trends
- Conduct consumer research with market
research companies
Marketing Team
- Understands consumer preferences
through constant contact at various
- utlets
Sales Team
5
Vinamilk Twin Cows
Premium quality milk manufactured and imported from New Zealand
Optimum Gold
20% increase in DHA derived from pure microalgae, combined with Lutein
Highly Visible Growth Trajectory
20 Selectively Expand Overseas Market
Potential export markets in Africa
and especially high-end markets like Japan, Canada
Vietnam Current Markets Potential Markets
32.8% 30.5% 34.2% 36.1% 32.5% 40.6% 2010 2011 2012 2013 2014 2015
Gross Margin (%)
Explore Selective Inorganic Growth Opportunities
Past acquisitions have proven
effective in expanding Vinamilk’s international operational footprint Continued Improvement in Operational Efficiency to Drive Margins
5 Highly Visible Growth Trajectory (Cont’d)
21 Net Revenue (US$MM)(1) EBITDA Margin (%)
Strong 20%+ Revenue Growth over the L5Y Robust Operating Leverage Translating in Consistently Attractive EBITDA Margins
Source Company Filings Source Company Filings
708 972 1,193 1,390 1,576 1,801 2010 2011 2012 2013 2014 2015
Growth 48.4% 37.3% 22.8% 16.5% 13.3% 14.3%
Notes
- 1. Exchange rate of VND22,260 per US$1.00 as of 14 October 2016
23.1% 21.9% 25.4% 26.1% 22.7% 24.6% 2010 2011 2012 2013 2014 2015
6
Proven Historical Track Record of Financial Performance
22
- Mrs. Mai Kieu Lien
Chief Executive Officer and Board Member
- Bachelor/Engineer in Meat and Milk Processing
- Certificate of Leningrad Economic Management
- Certificate of Government Management
- Mr. Trinh Quoc Dung
Executive Director - Dairy Development
- Engineer of Energy and Automation
- Mrs. Bui Thi Huong
Executive Director - Human Resources Administration & PR
- Bachelor in Russian language
- Bachelor in Economics
- Mr. Mai Hoai Anh
Chief Operating Officer and Executive Director – Sales
- Bachelor in Economics
- MBA
- Mrs. Nguyen Thi Thanh Hoa
Executive Director – Production and R&D
- Bachelor in Milk Processing Technology
- Mr. Nguyen Quoc Khanh
Executive Director – Research & Development
- Bachelor in Chemical Technique and Foods
- Bachelor in Business Administration
- Bachelor in English
- Mr. Le Thanh Liem
Acting Executive Director - Finance anh Chief Accountant
- Bachelor in Economics, major in Enterprise Financial
Accounting
- Master of International Commerce and Finance
- Mrs. Ngo Thi Thu Trang
Executive Director – Project
- Bachelor in Finance - Accounting
- MBA
- Mr. Phan Minh Tien
Executive Director - Marketing
- Bachelor in Business Management Institute
- Mr. Tran Minh Van
Executive Director - Production
- Bachelor in Engineering
- Bachelor in Business Administration
- Bachelor of Law with major in commercial laws
- MBA
Years of Experience with Vinamilk
7 Highly Experienced Management Team
20 33 28 31 35 40 11 11 22 2
Section 3 – Financial Review
24
% Domestic % Export 633 847 1,026 1,192 1,320 1,445 74 125 167 198 255 356 708 972 1,193 1,390 1,576 1,801 2010 2011 2012 2013 2014 2015 Domestic Export 11% 13% 14% 14% 16% 20% 89% 87% 86% 86% 84% 80%
Notes
- 1. Net Revenue = Total Revenue – Revenue Deductions (Sale Discounts, Sale Returns, Sales Allowances)
- 2. Exchange rate of VND22,260 per US$1.00 as of 14 October 2016
36.7% 17.9% CAGR
Net Revenue(1) (US$MM)(2)
Attractive Sales Growth with Strength in Volumes
Source Company Filings
Robust Sales Growth through the Cycle
25
23.1% 21.9% 25.4% 26.1% 22.7% 24.6% 2010 2011 2012 2013 2014 2015
Source Company Filings
Strong Operating Leverage Driving Superior Margins
EBITDA(1) Margin (%)
Robust EBITDA Margin Consistently above 20%
Notes
- 1. EBITDA = Net Revenue – COGS – SG&A + Depreciation & Amortization
Strong Operating Leverage Driving Superior Margins
26
32 35 43 39 30 31 2010 2011 2012 2013 2014 2015 63 68 70 62 52 56 2010 2011 2012 2013 2014 2015 13 15 17 19 20 19 2010 2011 2012 2013 2014 2015 44 47 44 41 43 44 2010 2011 2012 2013 2014 2015
Inventory Days(1) Receivable Days(2) Payable Days(1) Cash Conversion Cycle (Days)
Average Inventory Days Increased to 56 in 2015 Average Receivable Days Decreased to 19 in 2015 Average Payable Days Increased to 31 in 2015 Stable Cash Conversion Cycle Stable at ~40 in the L5Y
Source Company Filings Source Company Filings Source Company Filings Source Company Filings
Prudent Working Capital Management
Notes
- 1. Inventory turnover days and trade payable days assuming average of beginning and ending balances divided by cost of goods sold and multiplied by 365
- 2. Trade receivable days calculated assuming average of beginning and ending balances divided by net revenue and multiplied by 365
Prudent Working Capital Management
27 Selected Balance Sheet Items, US$MM(1) Dividend Payout Ratio (%)
Conservative Capital Structure Consistent Improvement in Dividend Payout
Source Company Filings Source Company Filings Notes
- 1. Exchange rate of VND22,260 per US$1.00 as of 14 October 2016
- 2. Includes cash and cash equivalents and short-term financial investments
- 3. EBITDA = Net Revenue – COGS – SG&A + Depreciation & Amortization
30/06/2016
Gross Debt ST Debts and Current Portion of LT Debts 56 LT Debts
- Total Gross Debt
56 Less: Cash and Cash Equivalents(2) (519) Net Debt (463) Total Equity 1,003 Total Debt / Total Equity 5.6% LTM EBITDA(2) 503 Total Debt / LTM EBITDA 0.1x 29.3 43.9 44.9 61.2 60.4 82.4 2010 2011 2012 2013 2014 2015
Strong Balance Sheet and Attractive Dividend Payout Ratio
28 Capex (US$MM)(1) and Capex as % of Total Revenue (%)
Capex as % of Net Revenue Remained Low at 2.7% in 2015
Source Company Filings
Improved Capital Intensity over Time
64 79 141 67 39 48 9.1% 8.2% 11.8% 4.8% 2.4% 2.7% 2010 2011 2012 2013 2014 2015 Capex Capex as % of Total Revenue
Notes
- 1. Exchange rate of VND22,260 per US$1.00 as of 14 October 2016
Improved Capital Intensity over Time
Q&A
Appendix
31 FYE 31 December, (US$MM)(1)
Income Statement Summary
Source Company Filings
Financial Summary
Notes
- 1. Exchange rate of VND22,260 per US$1.00 as of 14 October 2016
- 2. EBITDA = Net Revenue – COGS – SG&A + Depreciation & Amortization
- 3. EBIT = Net Revenue – COGS – SG&A
- 4. Last 12 months up to 30 June 2016
2010 2011 2012 2013 2014 2015 LTM(4)
Net Revenue 708 972 1,193 1,390 1,576 1,801 1,941 % Growth 48.4% 37.3% 22.8% 16.5% 13.3% 14.3% Gross Profit 232 296 408 502 512 731 824 Gross Margin 32.8% 30.5% 34.2% 36.1% 32.5% 40.6% 42.4% EBITDA(2) 163 213 303 363 357 443 503 EBITDA Margin 23.1% 21.9% 25.4% 26.1% 22.7% 24.6% 25.9% EBIT(3) 150 194 279 328 311 394 454 EBIT Margin 21.2% 20.0% 23.4% 23.6% 19.7% 21.9% 23.4% Net Income to Company 162 189 261 294 273 349 402 Net Margin 23.0% 19.5% 21.9% 21.1% 17.3% 19.4% 20.7%
Financial Summary
32 As of 31 December Unless Stated Otherwise, (US$MM)(1)
Balance Sheet Summary
Source Company Filings
Financial Summary (Cont’d)
Notes
- 1. Exchange rate of VND22,260 per US$1.00 as of 14 October 2016
- 2. Includes cash and cash equivalents, and short-term financial investments
- 3. Includes accounts receivables from customers and allowance for doubtful debts
- 4. Includes inventories and allowance for inventories
- 5. Includes tangible fixed assets and long-term work in progress
2010 2011 2012 2013 2014 2015 30/06/2016
Cash and Cash Equivalent(2) 106 175 232 311 404 450 519 Accounts Receivable(3) 26 51 57 85 89 99 112 Inventories(4) 106 147 156 145 160 171 181 Others 293 227 286 356 446 482 546 Current Assets 425 425 499 585 694 752 839 PP&E(5) 146 215 350 377 379 388 273 Others (88) 60 36 66 84 95 170 Non-current Assets 59 275 386 443 463 483 443 Total Assets 484 700 885 1,028 1,158 1,234 1,282
Financial Summary (Cont’d)
33 As of 31 December Unless Stated Otherwise, (US$MM)(1)
Balance Sheet Summary (Cont’d)
Source Company Filings
Financial Summary (Cont’d)
Notes
- 1. Exchange rate of VND22,260 per US$1.00 as of 14 October 2016
- 2. Includes accounts payable to suppliers
2010 2011 2012 2013 2014 2015 30/06/2016
ST Debt & Current Portion of LT Debt 26
- 8
57 66 56 Accounts Payable(2) 49 82 101 88 85 99 76 Others 44 50 85 126 102 105 143 Current Liabilities 119 132 186 223 245 270 275 LT Debt
- 8
16 17
- Others
7 7 3 7 8 8 4 Non-current Liabilities 7 7 3 16 23 25 4 Total Liabilities 126 140 189 238 268 294 280 Total Equity 358 561 696 789 889 940 1,003 Total Liabilities & Equity 484 700 885 1,028 1,158 1,234 1,282