FY19 Financial Performance 27 February 2020 Disclaimer Statements - - PowerPoint PPT Presentation

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FY19 Financial Performance 27 February 2020 Disclaimer Statements - - PowerPoint PPT Presentation

Osotspa Public Company Limited (OSP) Analyst Meeting FY19 Financial Performance 27 February 2020 Disclaimer Statements included or incorporated in these materials that use the word believes, anticipate, estimate, target,


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Analyst Meeting FY19 Financial Performance

27 February 2020

Osotspa Public Company Limited (OSP)

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SLIDE 2

Disclaimer

Statements included or incorporated in these materials that use the word “believes”, “anticipate”, “estimate”, “target”, or “hope”, or that otherwise relate to the objectives, strategies, plans, intentions, beliefs or expectations or that have been constructed as statements as to future performance or events, are “forward-looking statements” within the meaning that are not guarantees of future performance and involve risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated at the time the forward-looking statements are made. Osotspa Public Company Limited (“OSP” or the “Company”) undertakes no obligation to publicly update or revise any forward-looking statement, whether as result of new information, future events or otherwise. OSP makes no representation and assume no liabilities against whatsoever about the opinion or statements of any analyst or other third party. OSP does not monitor or control the content to third party opinions or statements and does not endorse or accept any responsibility for the content or the use of any such opinion or statement. The information contained herein has been obtained from sources that the Company considers reliable, but the Company does not represent or warrant that the information is complete or accurate, in particular with respect to data provided by or regarding third parties. The information in the presentation does not purpose to be comprehensive or to contain all the information that a prospective investor may desire or require to decide whether or not to purchase securities of the Company. The information in the presentation might be incomplete or summarized and has not been independently verified and will not be updated. Such information may in the future be subject to audit, limited review or any other control by an auditor or independent party. Therefore, the information included in the presentation may be modified or amended in the future. The information in this presentation, including but not limited to forward-looking statements, applies only as of the date of this document and is not intended to give any assurances as to future

  • results. The Company and each of its agents expressly disclaims any obligation or undertaking to update or release any updates or revisions to the information, including any financial date and any forward-looking

statements, contained in this [presentation[. This presentation includes forward-looking representations or statements on purposes, expectations or forecasts of the Company or its management up to the date of release of this document. Said forward-looking representations and statements or forecasts are mere value judgments of the Company and do not imply undertakings of future performance. Additionally, they are subject to risks, uncertainties and other factors, which were unknown or not taken into account by the time this document was produced and released and which may cause such actual results, performance or achievements, to be materially different from those expressed or implied by these forward-looking statements. Moreover, these forward-looking statements are based on numerous assumptions (which are not stated in the presentation) regarding the Company’s present and future business strategies and the environment in which the Company expects to operate in the future. There are many factors, most of them out

  • f the Company’s control, which may cause the Company’s actual operations and results to substantially differ from those forward-looking statements. Accordingly, you should not place undue reliance on forward-

looking statements due to the inherent uncertainty therein. Certain financial and statistical information contained in this document is subject to rounding adjustments. Accordingly, any discrepancies between the totals and the sums of the amounts listed may be due to

  • rounding. In additional, certain figures contained in this document, which have also not been subject to financial audit, are combined and pro forma figures. The information and opinions in this presentation are

not based upon a consideration of your particular investment objectives, financial situation or needs. You may wish to seek independent and professional advice and conduct your own independent research and analysis of the information contained in the presentation and of the business, operations, financial condition, prospects, status and affairs of the Company. This presentation discloses neither the risks nor other material issues regarding an investment in the securities of the Company. The information included in this presentation is subject to, and should be read together with, all publicly available information. Any person acquiring securities of the Company shall do so on their own risk and judgement over the merits and suitability of the securities of the Company, after having received professional advice or of any other kind that may be needed or appropriate but not only on the grounds of this presentation. By delivering this presentation, the Company is not providing any advisory, purchase or sale recommendation, or any other instrument of negotiation over the securities or financial instruments of the Company. This presentation does not constitute or form part of, and should not be construed as, any offer, inducement, invitation, solicitation or commitment to purchase, subscribe to, provide or sell any securities, services or products or to provide any recommendations for financial, securities, investment or other advice or to take any decision. This presentation is not and shall not constitute an offer for the sale of securities in Thailand or any jurisdictions. By attending to or receiving this presentation you agree to be bound by the foregoing restrictions and limitations and acknowledge that you understand the legal and regulatory sanctions attached to the misuse, disclosure or improper circulation of the presentation.

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Financial Performance 2019 Business Wrap-Ups 2020 Core Strategy Outlook

Agenda

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SLIDE 4

Financial Performance

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Q4’19 Financial Highlights – by Segment

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Full Year Target Remark : * Net Profit attributable to owners of the parent ** Net Profit attributable to owners of the parent to Total Revenue from Sales

THB 823M 12.4%

Net Profit Margin** Net Profit*

  • M-150 continued its growth

from strong brand preposition and sales execution

  • Som In Sum

+ 11.0% Continued strong growth after repositioning in 2H’17

  • Chalarm
  • 2.0%

High base CKD last year

  • C-Vitt

+ 35.9% Maintained no. 1 in functional drinks with capacity debottlenecking in Q2’19

  • Peptein
  • 12.9%

With Peptein Plus in Feb’19

  • BBM

+ 15.2 % Mainly driven by NPD Sweet Almond launched in May’19

  • 12Plus
  • 5.1%

Continue momentum of cool powder and NPD whitening plus roll on

  • OEM
  • 18.9%

High internal demand of glass together with lower sales on OEM – personal care

  • Confectionary

+ 10.3% Driven by growth from Ole

  • CLMV
  • 2.1%

Mainly driven by Myanmar (-2.1% at constant FX)

  • Others

+3.5% Driven by Middle East

  • Net profit* +4.3% YoY
  • Net profit margin** at

12.4% vs. 12.5% in Q4’18

  • Outstanding GM at 35.0%

improved by 50 bps YoY from “Fit Fast Firm” project driving overall costs down

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SLIDE 6

FY’19 Financial Highlights – by Segment

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  • M-150 continued its growth

from strong brand preposition and sales execution

  • Som In Sum

+ 29.3% Continued strong growth after repositioning in 2H’17

  • Chalarm

+ 8.7% Mainly from CKD

  • C-Vitt

+ 46.1% Maintained no. 1 in functional drinks with capacity debottlenecking in Q2’19

  • Peptein

+ 14.0% With Peptein Plus in Feb’19

  • BBM

+ 8.3 % Mainly driven by NPD Sweet Almond launched in May’19

  • 12Plus

+ 13.1% Continue momentum of cool powder and NPD whitening plus roll on

  • OEM
  • 8.1%

Growth in OEM – Glass

  • ffsetting with lower sales
  • n OEM - personal care
  • Confectionary

+ 11.0% Driven by growth from both Ole and Botan

Net Profit*

THB 3,259M 12.7%

Net Profit Margin**

  • Net profit* +8.4% YoY
  • Net profit margin** at

12.7% vs. 12.4% in FY’18

(13.1% if excluding additional provision for retirement benefits 96.8 MB)

  • Outstanding GM at 34.9%

improved by 250 bps YoY from “Fit Fast Firm” project driving overall costs down

  • CLMV

+ 6.4% Mainly driven by Myanmar (+4.1% at constant FX)

  • Others

+11.1% Driven by Middle East

Remark : * Net Profit attributable to owners of the parent ** Net Profit attributable to owners of the parent to Total Revenue from Sales

25,611M (+5.4 % YoY)

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SLIDE 7

34.5% 35.0% 32.4% 34.9% Q4'18 Q4'19 FY'18 FY'19

24,971 26,187

FY'18 FY'19 14.3% 15.1% 14.4% 15.2% 6.8% 6.8% 6.0% 7.0% Q4'18 Q4'19 FY'18 FY'19

789 823 3,005 3,259 12.5% 12.4% 12.4% 12.7%

  • 10.0
  • 9.0%
  • 8.0%
  • 7.0%
  • 6.0%
  • 5.0%
  • 4.0%
  • 3.0%
  • 2.0%
  • 1.0%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 13.0% 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

Q4'18 Q4'19 FY'18 FY'19

To the owner of the parents

Revenues Gross Margin SG&A Net Profit

Q4’19 and FY’19 Financial Highlights

Admin Exp Selling Exp ⚫ Net Profit Margin

6,519 6,748

Q4'18 Q4'19 ⚫ Other Income (21.1%) (21.9%)

7

(20.4%) (22.2%)

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Balance Sheet (as of 31 Dec 2019)

8 Key Changes in Balance Sheet Items

  • Total assets: Increased by THB 868mn from

: THB 1,667mn decrease in cash and cash equivalents : THB 1,243mn decrease in private funds : THB 563mn increase in trade accounts receivable from higher sales : THB 3,097mn increase in PPE and investment in SGA2, Talcum plant, Thilawa, AOC, BCB, new beverage filling lines and Glass factory in Myanmar

  • Total liabilities: Increased by 1,147mn mainly from higher trade and other payables and additional

provisions for employee benefits

  • Shareholders’ equity: Decreased by THB 280mn from decrease in other components of shareholders’

equity while retained earnings increased THB 78 million as profit for the period offsetting with the dividend FY2018 and interim 2019 paid to OSP shareholders with the total amount of THB 3,124 million

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Cash Flow Movement Operating CF: THB 3,652mn cash inflow from 1) THB 3,268mn Net profit 2) THB 1,537mn Non-cash transactions (depreciation and provision) 3) THB -268mn change in working capital 4) THB -885mn tax paid Investing CF: THB 2,052mn cash outflow from 1) THB 3,498mn PPE acquisition 2) THB -1,234mn Decrease in investment in private fund Financing CF: THB 3,267mn cash outflow from 1) THB -3,124mn Total dividend payment

Cash Flows and Key Ratios

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Cash Flow (as at 31 Dec 2019) Key Financial Ratios

Notes: ROE and ROA are annualized

Units: THB million

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SLIDE 10

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Dividend Payment and Policy

Dividend Paid Total 2019 Dividend 1.0 Baht per share (Approx. 93% payout)

  • Interim Dividend 0.35 Baht paid on 13 September 2019
  • Final Dividend 0.65 Baht per share (Proposed to AGM on 29 April 2020)

Dividend policy

  • At least 60% of consolidated net profit after deducting the legal reserve

specified by law or Articles of Association of the Company

Nonetheless, the consideration of a dividend payout shall depend on the Company’s performance, financial position, cash flow, contractual obligations (i.e. loan payments), working capital, investment plans, general economic situation, and related factors as deemed appropriate by the Board of Directors and when in compliance with the laws & regulations.

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2019 Business Wrap-Ups

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SLIDE 12

12 12

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  • Invest in Channel – Vending Machine Business
  • Increase R&D Capabilities - Osotspa Innovation Center (OIC)
  • Complete new Glass Factory under BOI – SGA2 (Aug19)
  • Complete new Talcum Plant (4Q19)
  • Complete Beverage Mixing and Filing Plant in Thilawa (4Q19)
  • Invest in Glass Manufacturing Plant - Myanmar
  • Enter new country - Vietnam
  • Progress cost saving program for margin expansion and cost

efficiencies through “Fit Fast Firm” (775MB Cost Savings FY2019)

  • Extend portfolio – Babi Mild Sweet Almond
  • New Innovation – Twelve Plus Perfume Card,

Whitening Plus Roll-On, Insta Underarm Mask

  • Capture Premium Segment – Organik by Babi Mild
  • Cross Category – Ole Personal Care
  • Enter Facial and Skincare Category - Plantstory
  • Expand New Distribution Channel – E-commerce
  • Embrace New trend and New packaging – Olé Boost ,Olé

Mini Sugar Free, and Olé Boom

  • Grow Herbal Variant – Chalarm KCD, M150 KCD
  • Extend Segmentation – Som In-Sum
  • Strengthen Consumer Base - M-Point Loyalty Program
  • Target New Trend – Shark Natural Caffeine

/ No Sugar

  • Start New Channel – Osotspa Delivery
  • Continue Growth – C-Vitt Capacity Expansion
  • Expand Distribution Channel – C-Vitt Tetra Pack
  • Add New Variant – Peptein Plus, Peptein Gold
  • Respond New Healthy Trend – Vplus
  • New Benefits - Slimma

2019 Wrap-Ups

Energy Drinks Functional Drinks Strategic Moves Personal Care and Others

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2020 Core Strategy Outlook

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2020 Core Strategy Outlook

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Company Target Double-digit growth both top and bottom lines

Energy Drinks

➢ Drive brand and market growth through product innovation and premiumization ➢ Strengthen consumer loyalty ➢ Get Som In-Sum and Chalarm into a billion baht brands club

Functional Drinks

➢ Grow C-Vitt with excellent execution and distribution expansion ➢ Strengthen leadership with new formats and new benefits

Strengthen Domestic Beverage Build Personal Care

➢ Strengthen Babimild no. 1 position for mother and baby category through innovations and strong brand equity ➢ Complete manufacturing facility in Myanmar ➢ Grow Myanmar ➢ Accelerate market position in ASEAN ➢ Seeding/Implementing new business in selective countries

Drive International Beverage Seize New Growth Engine

➢ Build industry vending machine business ➢ Build glass factory in Myanmar ➢ Continue building recent launches

Profitability Improvement Continue margin improvement

➢ Continue “Fit Fast Firm” projects in 2019 (formulation, packaging harmonization, raw material cost saving, lighter weight bottles) ➢ Maximize utilization efficiency through Total Productive Maintenance ➢ Drive cost leverage ➢ Digitalize business processes, including supply chain management, procurement system, data analytics and others ➢ Drive process improvement Additional capacity of 10 – 15% in 2H20

Growth drivers

➢ Extend Twelve Plus with its strong perfume equity into new categories via new benefits and exciting formats

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What do we expect in 2020?

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Revenue Growth

Double Digit Growth

International Business

Double Digit Growth

New Business

AOC : Double # Machines Continue to Drive “Seeding”

Fit Fast Firm

500 – 800 MB

Innovation

Beverage : 2 – 4 NPDs Personal Care : 2 – 4 NPDs

Digitalization

Double eCommerce Supply Chain Planning Procurement Customer Platform

Total Company Strengthen Myanmar and Enter Vietnam Grow New Businesses Build Innovation Pipeline Improve Efficiency Embrace and Prepare for Digital Era

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2020 Strategic Moves

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OSP Sugar Journey

16 Sep 2017 – Dec 2018 Oct 2019 – Dec 2019 Oct 2021 – Sep 2023 18 14 10 8 6 18+ Sugar Content

(g/100ml)

1 Baht 0.5 Baht 0.3 Baht 0.1 Baht 0 Baht Oct 2023

  • nward

5 Baht

3 Baht 1 Baht 0.3 Baht 0.1 Baht 0 Baht 5 Baht 3 Baht 1 Baht 0.3 Baht 0 Baht 0 Baht 5 Baht 3 Baht 1 Baht Dec 2018 – Sep 2019 1 Baht 0.5 Baht 0.3 Baht 0.1 Baht 0 Baht Jan 2020 – Sep 2021

5 Baht

3 Baht 1 Baht 0.3 Baht 0.1 Baht 0 Baht

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Rationale Investment ▪ Invest THB 270 million to acquire the remaining 60% share from Asahi Group (“ASHSEA”) Share Acquisition

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Before After

+

40% 60% 100% Model after Acquisition OSP Licensee of Calpis Asahi Technical and branding support ▪ Additional Beverage capacity to OSP group ▪ Fully utilized the capacity, contributing to better Calpis gross margin ▪ Opportunity to build Calpis brand as part of our functional drink portfolio

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Panel Discussion with CMO

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2020 Opportunities

Strengthen the Core Promote Value for Money & Affordability Accelerate Health Conscious NPDs

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Babi Mild Cream Anti-Pollution

OSP Response to Health and Hygiene Issues

Osotspa has stayed in prompt to handle current situation of PM2.5 pollution and COVID-19 outbreak.

Peptein Gold Ole Hand Sanitizer

22

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How to Stay Healthy in an OSP Way

Osotspa has stayed in prompt to enhance the health and wellness of People

Peptein Gold C-Vitt Herbal Segment Slimma, VPlus Peptein

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SLIDE 24

Q1’2020 New Products Launch

Babi Mild: Bioganik New Botan New Olé Krisnaklan Tra Kilane

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Thank you

Investor Relations Email: ir@osotspa.com Tel: 02-351-1152 Website: www.osotspa.com