Investor Report 2019 Earning Result 2 nd March 2020 AGENDA ITEM 01 - - PowerPoint PPT Presentation

Investor Report 2019 Earning Result 2nd March 2020

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FY2019 Performance

AGENDA ITEM 01 AGENDA ITEM 03

Appendix

AGENDA ITEM 02

Strategy & Growth

FY2019 Performance

AGENDA ITEM 01

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FY2019 Results

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Market result Operational excellence Net results

Unit cases (Domestic Sale)

+10%

58 million unit cases (MUC) 6 MUC from Made-to-Order Sale

Active Outlet/Customer 25%

No.1 Market share

Of NARTD* Market

Average Utilization rate from 65% to70 % in 2019 Delivery Success rate

• f a world class

standard at 99%

Route to Market Distribution truck

*Non - Alcoholic Ready to Drink (NARTD)

Remains strong with THB 6,776 million

+19%

Sales revenue Net Profit Margin +2.1ppt Net profit

+77%

THB 441 million

Net Profit Margin From 4.4% to

6.5%

+6%

From 41,481 to

44,043

• utlets/customers

+5ppt

Utilization Rate

From 54% move to 66%

+12ppt

THB(million) FY2018 FY 2019 %(YOY)

Domestic sale Volume (MUC) 53 58 9% Made-to-order sale (MUC) 0.3 5.8 1900% Total sale (MUC) 53 64 20% Revenue from Sales 5,704.0 6,775.5 19% Cost of Goods Sold 3,780.0 4,183.7 11% Gross Profit 1,924.0 2,591.8 35% EBITDA 568.7 781.0 37% EBIT 281.4 484.5 72% Interest expenses 30.4 24.3

• 20%

Tax 20.6 36.3 77% Profit for the year 249.1 440.7 77% Gross profit margin 34% 38% EBITDA margin 10% 12% Net profit margin 4.4% 6.5%

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01

FY2019 Financial Performance

PROFIT AND LOSS STATEMENT Sales Contribution Key deliverable

• Domestic sale Volume increased 10% as the favorable weather and the

implementation of promotional activities and marketing campaigns. Made- to –

• rder sale volume to business partner (within Coca cola system)
• Revenue from Sales grew at 19% from prices adjustments and volume growth

while Cost of Goods Sold(COGS) had increased by Baht 403.65 million or 10.68% , the growth rate of COGS is lower than the volume’s, partly as the result of a decrease in sugar price and usage, as well as savings from economy of scale

• Distribution costs have increased by Baht 235.36 million or 19.94% and

administrative expenses have increased by 229.29 million or 49.61% mainly due to Human resource related items

Financial statement I FY 19 Result I 2 March 2020 91% 8% 1% Sparkling Water Still 84% 8%4% 4% PET Can Glass Fountain

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Financial Highlights

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5,205 5,401 5,704 5,671 5,704 6,776 2014 2015 2016 2017 2018 2019

28.4% 28.6% 31.0% 32.4% 33.7% 38.3% 2.2% 1.4% 4.2% 4.9% 4.3% 6.5%

2014 2015 2016 2017 2018 2019

GPM Operating Profit Margin

115 101 241 283 249 441 2.2% 1.9% 4.2% 5.0% 4.4% 6.5%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 50 100 150 200 250 300 350 400 450 500 550 600 650 700 750 800 850 900 950 1000

2014 2015 2016 2017 2018 2019

Net Profit NPM

Revenue from Sales (THB million) SG&A (THB million )

Financial statement I FY 19 Result I 2 March 2020

Highest revenue growth (+ 19%yoy) in the past 5 years, with CAGR of 5%. One off impact of provision for retirement benefits in accordance with the changes in Labor Protection Act and ESOP program drove SG&A to Sale to 31%.

GPM & EBIT Margin

Accumulated increase in margin after the improvement of production line and digitalization of sale services in 2016.

Net Profit & Net Profit Margin (NPM)

Accumulated increase in margin after the improvement of production line and digitalization of sale services in 2016.

1,390 1,466 1,502 1,515 1,643 2,107 26.7% 27.1% 26.3% 26.7% 28.8% 31.1%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0%

• 500

1,000 1,500 2,000 2,500 3,000 3,500 4,000

2014 2015 2016 2017 2018 2019 SG&A SG&A to Sale

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FY2019 Financial Performance

Financial statement I FY 19 Result I 2 March 2020

Balance sheet summary- Assets (THB million) Cash flows (THB million)

Interim dividend payment for THB 239 million and Long – term loan Principal Repayment for THB 91.14 million were the main transactions of financing cash flow

CAPEX

1,268 1,156 1,061 919 967 1,178 2,109 3,310 3,647 3,690 3,791 3,729

2014 2015 2016 2017 2018 2019

Current Assets Non-Current assets

1,530 2,350 2,473 2,665 2,712 2,915 744 1,111 1,227 954 962 931 1,103 1,005 1,008 990 1,083 1,061

2014 2015 2016 2017 2018 2019

Equity Non Current Liabilities Current Liabilities

Balance sheet summary- Liabilities & Equities (THB million)

PP&E account for 70% of total assets, while Account Receivable account around 10% Decreasing of Long-Term loans from 2016 as the Principal repayment. Cold drink equipment investment (73MB) Major investments in new production lines are expected no earlier than 2020.

Production Market Other

• 3rd Injection machine (130MB, Q4’18)
• Can Line upgrade with 30% additional

capacity (35MB, start Q4’19)

• Water Line upgrade (23MB, in process)
• Clean energy -solar rooftop (PP-Feb’19)

Ongoing investment in SAP

Distribution

Warehouse expansion (50MB, in process)

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Key Financial Ratios

6% 4% 8% 10% 8% 14% 8% 5% 10% 11% 9% 16% 2014 2015 2016 2017 2018 2019 ROIC ROE

Financial statement I FY 19 Result I 2 March 2020

ROIC & ROE Activity Ratios

Interest Coverage strong at 21x of interest payment shows a strong organic growth and healthy capital structure

D/E & IBD/E Ratios 1.21 0.90 0.90 0.73 0.75 0.68 0.57 0.37 0.44 0.30 0.31 0.22 2014 2015 2016 2017 2018 2019 D/E IBD/E Interest Coverage (x) 4 5 7 9 10 21 2014 2015 2016 2017 2018 2019

Debt/Equity and Interest bearing debts/Equity reduced significantly indicating a healthy capital structure Both ROIC & ROE increased more than 2ppts Average Sales period decrease from 34 days to 26 days , as higher Technology in Production & Distribution lines were employed 2014 2015 2016 2017 2018 2019 Total Asset Turnover 1.5 1.4 1.2 1.2 1.2 1.4 Average Sale Period (Days) 34.0 32.8 28.6 25.2 25.7 26.0 Average Collection Period (Days) 43.3 43.1 36.9 34.8 34.3 31.9 Average Payment Period (Days) 34.6 32.7 27.8 23.0 24.2 19.9 Cash Cycle (Days) 42.7 43.2 37.7 37.0 35.8 38.0

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HTC Shareholder dividend return

Dividend Policy : No less than 50 - 80 percent of the net income after tax , after legal reserves and consideration on cashflow, investment plan and necessaries in the

future.

DPU (THB) EPS (THB) Dividend payout (%) Financial statement I FY 19 Result I 2 March 2020

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0.30 0.38 0.38 0.78 0.3 0.25 0.35 0.62 0.42

0.2 0.4 0.6 0.8 1 1.2

2014 2015 2016 2017 2018 2019 1H 2H 0.30 0.25 0.65 1.00 0.80 xx 0.58 0.51 1.21 1.42 1.25 2.21 52% 49% 54% 70% 64% xx%

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New HTC Products in 2019

CAN 180ml., 325ml PET 500ml, 1.5L ALL Channel ALL Package ALL Channel PET 450ml, 1.25L CAN 325ml.

Coke Can Avenger Coke Can 245ml. Coke Can Summer graphic PET

330ml Packaging Health trend Innovation 3Q 2Q 1Q 4Q

SPRITE NO SUGAR

FANTA GRAPE Reduced sugar

MINUTE MAID DOUBLE JUICE

CAN 330ml. ALL Channel

SCHWEPPES Manao soda - Reduced sugar

350ml

Namthip

CAN 325ml PET 450ml., 500ml, 1.25L, 1.5L ALL Channel

Fanta Honey Lemon

CAN 325ml 7Eleven

Coke can RASPBERRY PET 1.95L (Less Sugar)

Strategy & Growth

AGENDA ITEM 02

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Drive recruitment build sparkling habits in targeted occasions

• Digitalized sale services and operational

services : QR Code payment,

• Restructuring of Manufacturing operations
• Organization changes to match with dynamic

environment

• Operational Improvements in distribution

Domestic Sale Volume 61 MUC (+5%) Revenue THB 7 Billion (+3%) Sustain 2019 gains in Net Profit

Develop a total beverage portfolio Drive revenue growth Accelerate Quality Execution & Availability Manage customer relationship & Drive IT Diversification

2020 Business Plan & Guidance

02

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2020 Business Plan & Guidance

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Key Risk : COVID-19 impact

Due to a balance of factors, gross profit margin (%) and net profit (MB) for FY2020 is currently budgeted to be stable compare with 2019. Therefore sustaining the significant increases realized in 2019.

• Concentrate price increase of around 10% on all core

products , excluding no sugar segment

• Increase in sugar tax as per implementation of 2nd phase

in September 2019

• Increase in sweetener price (commodity price increase)
• Retail price increase implemented at the end of 2019
• Reduction in sugar usage due to reformulation in 2020
• Realized efficiencies in the relocation of selected

manufacturing operation from Hat Yai to Punpin plant

Guidance for 2020 gross and net profit

Action Plan to COVID-19

Adjustments to Consumers behavior

• Shift commercial focus toward in-home

consumption

• Shift marketing investments from Out of Home

Media to TV & Digital Advertising

• Efficiencies in G&A and S&D costs
• Prioritize investment CAPEX

Cost Saving Cash Flow Management

Appendix

03 AGENDA ITEM 03

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03

Company Overview

NARATHIWAT PATTANI NAKHON SI THAMMARAT YALA SONGKHLA SATUN TRANG PHATTHALUNG SURATTHANI KRABI PHANG NGA RANONG CHUMPHON PHUKET

Poonpin Plant Hat Yai Plant Being granted Coca-Cola franchise for Southern Thailand covering 14 provinces from Chumporn downwards to Malaysian border (with 9.4 mil. Population accounting for 14% of total Thailand) Holding 99.99% in Southern Rocks Co., Ltd., manufacturing and distributing preform and plastic bottles, and plastic bottle blowing services Head office in Hatyai, Songkhla with Executive offices in

• Bangkok. production plants at Hatyai, Songkhla and Poonpin,

Surat Thani (with 8 production lines+ 3 injection machines) 19 sales and delivery branches with 200 sales trucks, servicing 40,000 outlets with over 2,000 employees Leadership in South sparkling market with 84% share (sparkling contributes >90% oftotal sales)

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1969 ( 2512) Coca- Cola’s bottling & distribution franchise granted to Nakornthip

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Milestones

1978 (2521) Nakornthip changed name to Haad Thip HTC listed in SET 1988 (2531) 1974 (2517)

• Sec.Lt.Phairoch

Rattakul assumed leadership of the Company.

• Franchise

expanded from 3 to 14 provinces 2012 (2512)

• 2nd manufacturing

plant @ Poonpin

• A subsidiary

company “Southern Rock (STR)” established 2013-2016 (2556-59) Poonpin production lines in operational (additional 2 PET lines + injection machine) Additional lines in HY (PET/NRGB/Can/ injection Machine) 2002-2011 (2545-59)

SET

SAP launched 2010 ( 2553) Carbon footprint journey began (1st Certification for product & organization) 2015 (2558) 2016 (2559) RTM Pre- sell transformation (Phase I) 2017 (2560)

• Call line upgrade
• Halal Certification
• Telesales Pilot

2018 (2561)

• 3rd injection machine in Poonpin Plants (Oct)
• SAP upgrading (Mar)
• RTM Pre-sell expanded to Red Zone (100%

completed)

• Salesforce automisation
• Vending machine pilot
• Product carbon footprint (24 ->34 SKUs)

SET

16

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

3

Unit : MUC

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Historical Long-term Growth (Topline)

23 53

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3

23 53

Contact :

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ir@haadthip.com www.haadthip.com Tel: +662-391-4488 ext.138