Malee Group Public Company Limited Q3/2017 Opportunity Day 13 - - PowerPoint PPT Presentation

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Malee Group Public Company Limited Q3/2017 Opportunity Day 13 - - PowerPoint PPT Presentation

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Malee Group Public Company Limited Q3/2017 Opportunity Day 13 November 2017 DISCLAIMERS The information contained herein is intended to represent the Companys operating and financial position at a given point in time and may also contain

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Malee Group Public Company Limited

13 November 2017

Q3/2017 Opportunity Day

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SLIDE 2

DISCLAIMERS

The information contained herein is intended to represent the Company’s operating and financial position at a given point in time and may also contain forward looking information which only reflects expectations based on the prevailing geo-political, economic and non-controllable

  • factors. Such information has been obtained from sources

believed to be most reliable and the means in analyzing and preparation of such information for disclosure are based on approve practices and principles in the investment industry. The views are based on assumption subject to various risks and uncertainties and no assurance is made as to whether such future events will

  • ccur. No assurance is made as to the accuracy or

completeness of information presented in this document. Please note that the Company has agreed that any all information in connection with CMG products and manufacturing activities shall be kept strictly confidential and not be disclosed to any third party.

2 Malee Group Public Company Limited |

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SLIDE 3

AGENDA

Company Overview Business Update Results of Operations and Profitability Forward Looking

3 Malee Group Public Company Limited |

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SLIDE 4

Formerly named ‘Agri Sol Co., Ltd.

Group Structure

4

100%

49%

49%

100%

Stock Symbol: MALEE Industry and Sector: Agro & Food Industry / Food and Beverage

  • No. of Listed Shares:

280,000,000 Shares Registered Capital: THB 140,000,000 Paid-up Capital: THB 140,000,000 Par Value: THB 0.50 per Share Listing Date: 13 March 1992 Foreign Limit: 49% (available 41.7%) Dividend Policy: Not less than 50% of the net profit from normal operation according to consolidated financial statement after deduction of tax revenue and legal reserve (with additional conditions) Market Capitalization: 12,810 MB or 387 MUSD Free Float: 48.45%

Malee Enterprise Co., Ltd. (MEC)

“Domestic Sale and Marketing” Abico Holdings Plc 26.8%

Kamolchat Jeungrungreung kit

18.8% Thai NVDR 1.6% Others 52.7%

A leading manufacturer and distributor of fruit juices, beverages, and canned fruits in Thailand 100% Malee Capital Co., Ltd. (MCC)

“Investment Business”

Malee Harvest Co., Ltd. (MHC)

“Dormant”

Monde Malee Beverage

  • Corp. (MMBC)

“Beverage Business in Philippines”

Mega Malee Co., Ltd. (MMC)

“Natural Health Drinks”

Malee Applied Sciences Co., Ltd. (MAS)

“Innovation Research &

Development”

100%

Malee Group Public Company Limited |

Share Information (As of 9 November 2017) Shareholding Structure (As of 25 August 2017)

JV partner: Monde Nissin Corporation JV partner: Mega Lifesciences Plc.

Malee Group Plc.

“Manufacturing and Exporting”

Subsidiary Joint Venture Malee Kino (Thailand) Co., Ltd. (MKT)

“KINO Products & NPD in Thailand” 51%

JV partner: Kino International Pte. Ltd.

PT Kino Malee Indonesia (KMI)

“MALEE Products & NPD in Indonesia”

JV partner: PT Kino Indonesia Tbk (KINO)

49%

Overseas Entity

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SLIDE 5
  • On 12 January 2017, the Company set up a

new subsidiary named Malee Applied Sciences Co., Ltd. (MAS)

  • On 30 October 2017, the Company signed

a joint venture agreement with PT Kino Indonesia tbk (KINO) to set up 2 joint venture companies in Thailand and Indonesia.

Milestones

1981 1992 1995 1998 2016 1978

The Company expanded its production base on the land of 30 rais in Sampran District, Nakhon Pathom Province. On 2 February 1978, Malee Sampran Factory Co., Ltd. was established with capital

  • f 10MB as a manufacturer

and distributor of canned food and canned fruits. In April 1995, Abico Holdings Plc acquired 40% from the existing shareholders. On 3 March 1992, MALEE was listed

  • n

the Stock Exchange

  • f

Thailand (SET).

  • In Q1/2016, MALEE, together with

Monde Nissin Corporation (MNC) set up a joint venture company in the Philippines named Monde Malee Beverage Corporation (MMBC)

  • On 12 May 2016, the Company’s

name was changed to Malee Group Plc

  • On 22 August 2016, the Company

signed a joint venture agreement with Mega Lifesciences Plc (MEGA) to develop natural health-focused RTD products.

Malee Group Public Company Limited | Powerpoint Template 5

2017

On 15 May 1998, the Company’s name was changed to Malee Sampran Plc.

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1,600 1,682 1,537 1,931 2,140 2,357 2,615 2,706 2,822 2,964 2,042 2,405 2,021 1,546 898 1,510 1,737 1,603 2,065 2,567 3,578 2,342 (93) (295) 131 106 228 646 283 307 331 530 257

  • 1,000

1,000 2,000 3,000 4,000 5,000 6,000 7,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 9M/2017

Unit: Baht Million

CMG Sales Branded Sales Net Profit

Historical Performance

6

CMG: Contract Manufacturing

  • Prior to 2009, major contribution of CMG was from

canned fruits.

  • Discontinued the canned pineapple production in

2009 and canned sweet corn in 2013. 2016: Historical Highest Sales 2012-2013: Benefit from the great flood

Malee Group Public Company Limited |

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Daily Nutrition Functionality Tactical

Malee 100% Juice UHT Malee 100% Juice Pasteurize Malee Coco Malee Nutrient Malee Healti Plus Malee Food Service Malee Tropical Malee Canned Fruit

OTHERS

Canned Fruit Dairy Product Other Beverages

First Choice Farmer

Chokchai Farm

Canned Sweetened Condensed Non Dairy Creamer TurBusta Maxx Malee Light

Malee Brand Portfolio

Malee Group Public Company Limited | Powerpoint Template 7

UHT Pasteurize Malee i-Corn

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AGENDA

Company Overview Business Update Results of Operations and Profitability Forward Looking

8 Malee Group Public Company Limited |

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Domestic Beverage Market

9

Source: Nielsen

Malee Group Public Company Limited |

Beverage reflects downward trend across categories, but demand loss remains an issue.

MAT Sep 2017 Overall Beverage Market Dropped 3.9% YoY

Demand loss Less effective promotion Entrance of new players could not offset the decline of demand Demand loss across key brands

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Premium Market (100% RTD Fruit Juice) 4,933MB 38% Medium Market (40-99% RTD Fruit Juice) 1,259MB 10% Economy Market (20-39% RTD Fruit Juice) 2,656MB 20% Super Economy Market (<19% RTD Fruit Juice) 2,335MB 18% Others 1,844MB 14% (-4% YoY) (-14% YoY) (+1% YoY) (-18% YoY) (-1% YoY)

Domestic RTD Fruit Juice Market

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Source: Nielsen

Malee Group Public Company Limited |

MAT Sep 2017 Market Value of 13,026 MB, a Decrease of 8% YoY

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Domestic RTD Premium Fruit Juice UHT Market Share

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MAT Sep 2017 Market Value of 4,622 MB, a Decrease of 2% YoY

Tipco 28% Malee 20% Unif 12% Doi Kham 21% Cocomax 8% Others 11% Tipco 28% Malee 22% Unif 13% Doi Kham 20% Cocomax 9% Others 9%

MAT Sep 2016 MAT Sep 2017

Source: Nielsen

Malee Group Public Company Limited |

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57% 52% 45% 45% 45% 49% 45% 47% 43% 48% 55% 55% 55% 51% 55% 53% 2014 2015 2016 Q1/17 Q2/17 Q3/17 9M/16 9M/17 CMG Brand

Sales Structure

12

CMG: Contract Manufacturing

Domestic : International Business Brand : Contract Manufacturing

Malee Group Public Company Limited |

  • Q3/2017 Domestic sales growth was +2 YoY.
  • Q3/2017 Export sales growth was -38% YoY.
  • Q3/2017 Brand sales growth was -1% YoY.
  • Q3/2017 CMG sales growth was -25% YoY.

78% 72% 61% 57% 59% 69% 62% 62% 22% 28% 39% 43% 41% 31% 38% 38% 2014 2015 2016 Q1/17 Q2/17 Q3/17 9M/16 9M/17 Export Domestic

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SLIDE 13

Domestic Business – New Packaging Launch

13 Malee Group Public Company Limited |

AWARENESS Full media support both online and offline New TVC Press conference DRIVE SALES Nationwide extra display Roadshow both in-store and off-store Free sampling/Demo tasting Special trendy pack / Special Premium ENGAGEMENT Engage activity to invite customers to be apart of

  • ur life style activities; concert, movie, online game
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SLIDE 14

Domestic Business – New Product Launch

14 Malee Group Public Company Limited |

Launched in Aug 2017 MALEE NUTRIENT ALMOND MILK

2 FLAVORS (ORIGINAL, HONEY & VANILLA) 180 ML. IN TETRA LEAF KEY SELLING POINT HIGH CALCIUM 2X HIGH VITAMIN B ANTIOXIDANT BEST QUALITY OF PREMIUM ALMOND FROM AUSTRALIA 100% NATURAL

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Sales Territory

15 Malee Group Public Company Limited |

EAST ASIA

China Hong Kong Macau Japan

  • S. Korea
  • N. Korea

SOUTH EAST ASIA

Thailand Cambodia Myanmar Laos Vietnam Malaysia Philippines Indonesia

OCEANIA

Australia

  • N. AMERICA

Canada

EUROPE

Russia Germany Poland

  • Approx. population of SEA is 650 million

people, plus China of 1.3 billion people We have the strongest brand presence and/or traction in the these countries:

Thailand Laos Cambodia Myanmar China

Our brand awareness is strongest in our neighboring countries.

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9M/2017 Branded Export Sales by Country

16

New Products

Malee Group Public Company Limited |

9M/2017 Branded Export Grew 35% YoY

Cambodia 34% China 18% Philippines 10% Hong Kong 8% Myanmar 6% Others 24%

Q3/2017 Branded Export Grew 60% YoY

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SLIDE 17

Source: www.scoonest.com

Why Indonesia…

17 Malee Group Public Company Limited |

Fast Growing Economy Rising Middle Class More than 260 Million Population

(Real GDP, constant prices, US$ in billion) Source: KINO

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New JV Partner: PT Kino Indonesia Tbk (KINO) -- one of the leading FMCG businesses in Indonesia

18 Malee Group Public Company Limited |

  • Total distribution points of sale: 1,161k (28% direct / 72% indirect coverage)

with 31 distribution centers countrywide

  • 2016 Beverage Market Value in Indonesia grew by 8.5%, compared with 7.5%

growth in 2015.

) share)

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AGENDA

Company Overview Business Update Results of Operations and Profitability Forward Looking

19 Malee Group Public Company Limited |

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Financial Highlights

20

  • Net profit in Q3/2017 decreased by 52% YoY due to 1) higher

cost per unit resulted from lower capacity utilization; and 2) higher depreciation resulted from additional investment in machinery to improve production efficiency and reduce production cost, in order to prepare for an increased level of production.

  • Q3/2017 net profit rebounded remarkably 27% QoQ due to

sales recovery in almost every segment, while cost per unit decreased QoQ due to higher capacity utilization and improved cost management.

  • Q3/2017sales decreased by15% YoY due to the slowdown in

domestic branded sales and export CMG sales. On the other hand, export branded sales continued to grow remarkably by c.60% YoY, while domestic CMG sales are back on track for growth from sales recovery plus good response of new product.

  • Q3/2017 sales grew 9% QoQ due to an increase in domestic

branded sales from new packaging launch, new crop season for canned fruit production, domestic CMG sales recovery plus good response of the new product, and continual growth of export branded sales.

Malee Group Public Company Limited |

4,771 5,389 6,541 1,515 1,370 1,500 1,760 1,500 5,034 4,384

1,000 2,000 3,000 4,000 5,000 6,000 7,000

2014 2015 2016 Q1/17 Q2/17 Q3/17 Q3/16 Q3/17 9M/16 9M/17 Sales Revenue

Unit: Million Baht +9% QoQ

  • 15%

YoY

  • 13%

YoY

307 331 530 118 61 78 161 78 413 257

100 200 300 400 500 600

2014 2015 2016 Q1/17 Q2/17 Q3/17 Q3/16 Q3/17 9M/16 9M/17

Net Profit

Unit: Million Baht

  • 38%

YoY

  • 52%

YoY +27% QoQ

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Profitability Margin

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  • Lower Q3/2017 and 9M/2017 %GPM YoY was due to lower

capacity utilization as well as higher depreciation resulted from additional investment in machinery to improve production efficiency and reduce production cost, in order to prepare for an increased level of production for future sales growth.

  • On the other hand, %GPM improved QoQ as a result of higher

sales and lower cost per unit due to higher utilization and improved cost management.

  • Higher Q3/2017 selling expenses to sales QoQ was mainly due

to new packaging launch and marketing campaign expense.

  • Higher 9M/2017 administrative expenses to sales was due to

higher personnel expenses to prepare for the upcoming aggressive growth in the future, gradual improvement of employee benefits as well as higher R&D expenses for new product development.

  • Lower Q3/2017 and 9M/2017 %NPM YoY was mainly due to 1)

higher cost per unit resulted from lower capacity utilization and 2) higher depreciation resulted from additional investment in machinery to improve production efficiency and reduce production cost, in order to prepare for an increased level of production in the future.

  • %NPM rebounded QoQ due to sales recovery in almost every

segment resulted in higher capacity utilization as well as improved cost management.

Malee Group Public Company Limited |

33.7% 31.4% 32.2% 31.3% 27.6% 29.7% 34.4% 29.7% 32.1% 29.6%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%

2014 2015 2016 Q1/17 Q2/17 Q3/17 Q3/16 Q3/17 9M/16 9M/17

%Gross Profit Margin

18.6% 17.4% 14.4% 13.4% 14.3% 15.7% 15.7% 15.7% 15.1% 14.5% 7.6% 7.0% 7.1% 9.1% 8.9% 7.7% 7.7% 7.7% 7.0% 8.6%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

2014 2015 2016 Q1/17 Q2/17 Q3/17 Q3/16 Q3/17 9M/16 9M/17

%SG&A to Sales

%Admin/ Sales %Selling/ Sales 6.4% 6.1% 8.1% 7.7% 4.4% 5.1% 9.1% 5.1% 8.2% 5.8%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0%

2014 2015 2016 Q1/17 Q2/17 Q3/17 Q3/16 Q3/17 9M/16 9M/17

%Net Profit Margin

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1,012 1,250 1,575 1,583

0.0% 20000.0% 40000.0% 60000.0% 80000.0% 100000.0% 120000.0% 140000.0% 160000.0% 180000.0%

2014 2015 2016 Q3/17

Equity

Unit: Million Baht

2,992 3,042 3,640 4,170

0.0% 50000.0% 100000.0% 150000.0% 200000.0% 250000.0% 300000.0% 350000.0% 400000.0% 450000.0%

2014 2015 2016 Q3/17

Total Assets

Unit: Million Baht

Statements of Financial Position

22

  • Increased total assets were mainly resulted from

higher trade receivables and inventories as well as additional investment in machinery to improve production efficiency and reduce production cost, in

  • rder to prepare for increased level of production in

the future.

  • Increased liabilities were mainly due to higher trade

payables resulted from the purchase of raw materials and packaging materials for the new crop season of canned fruit production as well as an increase in loans from financial institutions for the use of the Company’s working capital and capital expenditure.

  • Increased equity of parent Company's shareholders

slightly increased by 1% as a result of operating profit during the year as well as interim dividend payment.

Malee Group Public Company Limited |

1,976 1,788 2,061 2,587

0.0% 50000.0% 100000.0% 150000.0% 200000.0% 250000.0% 300000.0%

2014 2015 2016 Q3/17

Total Liabilities

Unit: Million Baht

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Liquidity

23

  • Lower current ratio and quick ratio was mainly resulted

from increased trade payables as well as short-term borrowings from financial institutions for the use of the Company’s working capital.

  • Extended cash cycle days was resulted from longer A/R

days due to higher portion of domestic sales whose trade term is longer, while extensive inventory days was caused by the new crop season of canned fruit production.

  • Longer A/P days was mainly owing to the raw materials

and packaging materials purchase for the new crop season

  • f canned fruit production.
  • Increased IBD/E was due to higher borrowings and

liabilities under financial lease agreements for the use of the Company’s working capital and capital expenditure.

  • Increased D/E was resulted from the same reasons as

higher IBD/E plus higher trade payables resulted from the purchase of raw materials and packaging materials for the new crop season of canned fruit production

Malee Group Public Company Limited |

0.98 1.13 0.95 0.87 0.53 0.66 0.50 0.45

30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% 110.0% 120.0%

2014 2015 2016 Q3/17

Current Ratio (x) Quick Ratio (x) 1.12 0.68 0.75

1.03 1.95 1.43 1.31 1.63

0.0% 50.0% 100.0% 150.0% 200.0% 250.0% 300.0% 350.0%

2014 2015 2016 Q3/17

IBD/E (x) D/E (x)

49 43 32 43 52 57 45 51 88 76 64 83 91 90 77 90

0.0% 5000.0% 10000.0% 15000.0% 20000.0% 25000.0% 30000.0%

2014 2015 2016 Q3/17 Cash Cycle Days

  • Avg. Inventory Days
  • Avg. Collection Days
  • Avg. Payment Days
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0.750 0.525 0.555 0.600 0.950 0.300

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0%

2012 2013 2014 2015 2016 6M/2017

Dividend per Share

Remark: Adjusted at par value of Baht 0.50 which was effective on 16 May 2017

Return to Shareholders

24

  • The Company has a policy to pay dividend not less than

50% of the net profit from normal operation according to consolidated financial statements after deduction of tax revenue and legal reserve (with additional conditions).

  • The Company normally pays dividend twice a year.

Unit: Baht

  • Lower ROA was due to lower earnings but increased

assets, as a result of additional investment to improve production efficiency and reduce production cost, in order to prepare for increased level of production in the future.

  • Lower ROE was mainly due to lower earnings, as a result
  • f higher fixed costs from various key investments as a

preparation for the Company’s future growth, while sales are not generated immediately.

Malee Group Public Company Limited |

15.5% 14.8% 20.4% 12.1%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

2014 2015 2016 9M/17

ROA

33.3% 29.3% 37.5% 24.6%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%

2014 2015 2016 9M/17

ROE

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AGENDA

Company Overview Business Update Results of Operations and Profitability Forward Looking

25 Malee Group Public Company Limited |

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Our 9-Year Strategy

26 Malee Group Public Company Limited |

Phase 1

2015 - 2017

Building and Strengthening Organization and Foundation

  • Brand / Product Repositioning
  • Organizational Restructuring
  • New Business Model Formulation
  • Infrastructure Readiness and Development
  • Technology-driven Organization

Phase 2

2018 - 2020

Sprinting Business Performance

  • Top of Mind on Product Champion /

Brand Awareness

  • Business / Market Portfolio Balancing
  • Inorganic Business Diversification
  • Accelerating Financial Performance

Phase 3

2021 - 2023

Sustaining Business with Global Presence

  • Excellence in Business, Operations and

Finance

  • Business and Organization Expansion
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4R Strategy

27 Malee Group Public Company Limited |

RENOVATE REORGANIZE RECONNECT

  • Brand Identity
  • Brand Concept “Growing

well together”

  • Product Portfolio

REBRAND

  • Strategic Partners
  • Capability and Skill
  • New Function
  • Motivation
  • Master Plan
  • New Machine / Technology
  • IT
  • New Office

4R Strategy

to become a Health-Driven Global F&B Firm

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New Excise Tax on Non-alcoholic Beverages

28 Malee Group Public Company Limited |

Effective on 16 September 2017 Sugar Tax

Sugar Content (g/100 ml.) 16 Sep 17 – 30 Sep 19 (Baht/Litre) 1 Oct 19 – 30 Sep 21 (Baht/Litre) 1 Oct 21 – 30 Sep 23 (Baht/Litre) 1 Oct 23

  • nwards

(Baht/Litre) 0-6 6.01-8 8.01-10 10.01-14 14.01-18 18.01 Up 0.10 0.30 0.50 1 1 0.10 0.30 1 3 5 0.30 1 3 5 5 1 3 5 5 5

Source: Excise Department (Translated from Thai version), as of 16 September 2017

Excise Tax

Carbonated Drink = 14% / Energy Drink = 14% / Soda = 14% Vegetable and Fruit Juice (if gets no exempt) = 10% / Coffee and Tea = 10% of suggested retail prices

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Share Endorsements

29

Added to MSCI Global Small Cap Indexes

Effective as of the close of 30 November 2016

Partner

“Very Good” Level of CG Scoring Selected to be a constituent stock of SET100 Index

For calculating the index during 1 July - 31 December 2017

Malee Group Public Company Limited |

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Thank You

For more information, please visit our website: http://www.malee.co.th

  • r contact: ir@malee.co.th. Tel: +66 2080 7899 Ext 1137