Oishi Group Opportunity Day Q2/2019 For the period of Jan-Mar 2019 - - PowerPoint PPT Presentation

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Oishi Group

Opportunity Day Q2/2019

For the period of Jan-Mar 2019

June 14, 2019

Disclaimer

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• This presentation may include information which is forward-looking in nature. Forward-looking information involve known and unknown risks, uncertainties and other

factors which may impact on the actual outcomes, including economic conditions in the markets in which Oishi Group Public Company Limited and its Subsidiaries (“OISHI”)

• perate and general achievement of OISHI business forecasts, which will cause the actual results, performance or achievements of OISHI to differ, perhaps materially, from

the results, performance or achievements expressed or implied in this presentation.

• The information in this presentation has not been independently verified. No representation, warranty, express or implied, is made as to, and no reliance should be placed
• n, the fairness, accuracy, completeness or correctness of the information and opinions in this presentation. None of the OISHI or any of its agents or advisors or any of their

respective affiliates, advisors or representatives, shall have any liability (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation.

• This presentation and all other information, materials or documents provided in connection therewith, shall not, either in whole or in part be reproduced or recirculated

with out written consent from OISHI, save in strict compliance with all applicable laws.

Agenda

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Overview of Oishi Group and Financial Performances Food Business Strategy & Outlook Beverage Business

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Food & Beverages Key Entities Descriptions / Business Scopes Industrial Trading, Consumer Products and Retailers Real Estate Insurance & Leasing Agricultural

• One of ASEAN’s leading multi-format retail

platforms and hypermarket operators

• Packaging supply chain and consumer products
• Interests in a wide spectrum of residential,

hotel, hospitality, commercial, retail and industrial units

• One of the largest F&B group of companies in

ASEAN and leading F&B player in Asia.

• Provides general assurance, life assurance and

car leasing services

• Engaged in agro-plantation & technology, sugar

and food processing

Industry

A Member of One of the Largest Thai Conglomerates

Owned brands OEM

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Overview of Oishi Group

Restaurant Packaged Food

Products Food Beverage

Opened the first restaurant

• verseas, Shabushi

restaurant in Myanmar Thai Beverage PCL became Oishi’s major shareholder “Oishi Green Tea” was launched Started Japanese restaurant operation under the brand “Oishi”

2017 2014 2013 2008 2004 2003 2002 1999

All restaurants of the Company received GMP, HACCP and ISO 9001:2015 certificates

• Opened new Central

Kitchen at Ban-Bueng district, Saraburi province,

• Launched Packaged Food

business started with Gyoza and Sandwich Started trading in the Stock Exchange of Thailand Started Japanese buffet shabu in kaiten style under the brand “Shabushi”

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Sep 2017

• Excise Tax and Sugar Tax are imposed on Ready-to-drink Tea (RTD Tea) Category

Nov 2017

• Increase in Retailed Price of Green tea across all products as a result of Excise Tax
• Fire incident at Navanakorn which impacted UHT Beverage capacity

Dec 2017

• Revisit menu offerings and price adjustments for “Oishi Grand” from THB895 net to THB995

net Mar 2018

• Launched 350ml PET at THB15/bottle in traditional trade channel to fill in the gap of price

structure July 2018

• Completed partial bond repurchase of THB 299.3 mn due to the company’s abundant of cash

liquidity Oct 2018

• Relaunched Core Flavour, Oishi Green Tea Honey Lemon with Hyakkamitsu Honey and

Launched new flavor, Honey Double Lemon with Hyakkamitsu Honey Dec 2018

• Launched Oishi Gold, premium tea
• Resumption of UHT Beverage Capacity at Navanakorn
• Repayment of matured bond amounted THB700.7 mn

Key Events in the Past

Financial Snapshots: 2Q19 and YTD19

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Bond of THB 1,000 mn as of Mar’19 maturing on 6 July 2019, interest rate 2.20% per annum Quarter (Jan – Mar) YTD (Oct – Mar) (THB mn) 2Q19 2Q18 % Change YTD19 YTD18 % Change Revenue Beverage 1,684 1,516 +11.1% 3,303 3,058 +8.0% Food 1,798 1,607 +11.9% 3,546 3,223 +10.0% Total 3,482 3,122 +11.5% 6,849 6,281 +9.0% Net Profit Beverage 275 185 +48.6% 489 415 17.8% Food 122 59 +106.8% 234 125 87.2% Total 397 244 +62.7% 723 540 33.9% (THB mn) Mar-19 Sep-18 % Change Balance Sheet Items Total Asset 9,267 9,680

• 4.3%

Interest-bearing debt 1,000 1,701

• 41.2%

Total Liabilities 2,906 3,690

• 21.3%

Total Equity 6,361 5,990 +6.2% 2Q19’s total revenue increased 11.5% YoY as a contribution of revenue growth from both beverage and food businesses while 2Q19’s net profit increased strongly at 62.7% mainly due to better operational efficiency and expense management.

Financial Performances: Beverage

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Revenue

7,085 7,054 5,986 1,516 1,715 1,213 1,618 1,684

2016 2017 2018 2Q18 3Q18 4Q18 1Q19 2Q19 1,004 1,233 772 185 310 47 214 275

14.2% 17.5% 12.9% 12.2% 18.1% 3.9% 13.2% 16.3%

• 46.0%
• 36.0%
• 26.0%
• 16.0%
• 6.0%

• 400

2016 2017 2018 2Q18 3Q18 4Q18 1Q19 2Q19

Net Profit and Margin

THB mn THB mn

• Beverage revenue in 2Q19

increased strongly by 11.1% YoY

• Revenue increased mainly due to

successful of summer campaign and resumption of UHT capacity in Dec-18 which was previously affected by the fire incident

• Beverage net profit in 2Q19

improved significantly by 48.6% YoY

• Profit increased thanks to revenue

growth and lower selling expense. The company implemented a plan to control marketing spending and utilize it in the most efficient way to generate revenue for the business

Financial Performances: Food

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• Food revenue increased by 11.9%

YoY in 2Q19

• Increased in revenue YoY are as a

result of new outlets opening and positive SSSG (+5.6%) in the quarter

Revenue

6,552 6,497 6,610 1,607 1,630 1,757 1,748 1,798

2016 2017 2018 2Q18 3Q18 4Q18 1Q19 2Q19 119 210 287* 59 33* 129 112 122

1.8% 3.2% 4.3% 3.7% 2.0% 7.4% 6.4% 6.8%

• 10.0%
• 8.0%
• 6.0%
• 4.0%
• 2.0%

2016 2017 2018 2Q18 3Q18 4Q18 1Q19 2Q19

Normalized Net Profit and Margin

THB mn THB mn

• Net profit of food business

increased significantly at 106.8% YoY in 2Q19

• Profit increase significantly YoY

thanks to both increase in revenue and improvement in efficiency management of the restaurant business

Note: * Normalized net profit with non-recurring item adjustment

Better Profitability Ratios

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Gross Margin (%)

35.9% 36.0%

2Q18 2Q19

ROA* (%) EBITDA Margin (%) ROE* (%)

11.3% 15.6%

YTD18 YTD19 19.0% 22.7%

YTD18 YTD19

Note: *Annualized Ratio

7.8% 11.4%

2Q18 2Q19 15.7% 18.5%

2Q18 2Q19

Net Margin (%)

Strong Financial Status

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Current Ratio (x)

1.2 1.0

Mar-18 Mar-19

D/E and Net D/E Ratios (x)

0.4 0.2 0.1 0.0

Mar-18 Mar-19 D/E Net D/E

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Higher Interim Dividend for 1H19

THB/ share 0.30 0.55 0.55 1.10 1.10 0.90 1.10 1.00 1.05 1.45 1.40 2.30 1.90 1.30 1.60 2.00 2.50 3.40 2.80 2013 2014 2015 2016 2017 2018 2019 Interim Dividend Final Dividend 22.2% YoY

A+ Rating Affirmed Reflects Strong Financials

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TRIS Rating affirms the company rating of Oishi Group PLC (OISHI) at “A+” with “Stable” Outlook

October 12, 2018

Key Highlights Strong Positions ➢ The rating reflects OISHI’s well-known brand, leading market position in ready-to-drink (RTD) tea segment in Thailand and status as a strategically important subsidiary of Thai Beverage PLC ➢ Despite the recent drop in sales in the RTD tea segment, OISHI has remained the market leader with strong brand and an extensive distribution network which yields high market penetration Low leverage and abundant cash flow protection ➢ OISHI’s balance sheet as well as debt serviceability will remain strong

Source: TRIS

Corporate Governance and AGM Scores

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Oishi Group

Listed co Avg 2018

2014 2015 2016 2017 2018

Rights of Shareholders

89 94 95 95 95 94

Equitable Treatment of Shareholders

96 98 99 99 99 90

Role of Stakeholders

76 80 79 91 92 80

Disclosure and Transparency

84 87 89 93 96 85

Board Responsibilities

70 76 81 81 85 72

Total score

78 84 86 88 91 81 2014 2015 2016 2017 2018

Listed co Avg 2018

Oishi Group

97 100 99.25 100 99 92.42

Good Corporate Governance Scores AGM Quality Score

Source : Thai Institute of Directors (สมาคมส่งเสริมสถาบันกรรมการบริษัทไทย) Source : Thai Investors Association (สมาคมส่งเสริมผู้ลงทุนไทย)

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Beverage Business

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Thailand – % Market share of RTD Tea by Value

Source : Nielsen Retail Index Mar-19 Value

% YoY

MAT-Mar19

RTD Tea

• 8%

Oishi Corp.

• 10%

Second Player

• 10%

Moving Average 12 months (MAT) Mar-19’s Value = THB 11,993 mn 46.0% 44.9% 45.0%45.9%45.2%44.1%44.0%44.4%45.0%45.6%43.6%44.3%45.7%44.2%46.2% 31.0% 30.2% 29.9%29.7%29.6%31.2%30.5%29.2%28.7%30.0%31.9%31.6%30.2%30.0%30.2% 6.7% 7.6% 8.0% 7.4% 7.1% 7.0% 7.3% 8.1% 7.7% 6.8% 7.6% 7.8% 7.6% 8.7% 8.1%

Oishi Corporate Second Player Third Player

Beverage: Oishi Sustains Leadership Position

Beverage: Stronger Brand Health and Imageries

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Source : Kantar Millward Brown Mar19

(Any Oishi)

44 47 2Q18 2Q19

81 83

2Q18 2Q19 Oishi’s brand health strengthened over the time with decent awareness and improvement of key imageries. Top-of-Mind Awareness

87 90

2Q18 2Q19

85 88

2Q18 2Q19

88 92

2Q18 2Q19 Is brand for me Is suitable for teens Is cool brand Is modern brand

Beverage: Resumption of Capacity since Dec-18

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Remarks * Others including UHT green tea & dairy OEM and hot fill capacity

• Total beverage capacity increased to 129.5 mn unit/month thanks to the resumption of

UHT production lines since December 12, 2018. The UHT operation started with Green Tea immediately and then OEM products at the end of 2Q19.

• The new UHT production lines’ capacity of 33mn unit/month is slightly higher than the

previous lines that affected from the fire incident of 31mn unit/month due to new machine efficiency.

• Average utilization of 2Q19 was around 50%-60%

Capacity Snapshot (mn unit/ month) Mar’18 Mar’19 CAF (1-4) 60.0 60.0 Drinking water 24.0 24.0 Others* 12.5 45.5 Total 96.5 129.5

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Summer Campaign: First Cooperation Among Business Units

Campaign Period: 20 Feb – 31 May

2018 2019

Remark : Data as of 20 Feb – 17 Mar 2019 (1st lucky draw), in total 24 days

+20% Increase in Total Code Submission

▪ Beverage Products ▪ Packaged Food ▪ Restaurant

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Beverage: Oishi Gold Strengthens Oishi Healthy Positioning

Oishi Gold Now Available in Leading MT, CVS and Oishi Restaurants

Beverage: Strong Footprints in Asean

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Thailand

• No.1 RTD Tea

Cambodia*

• No. 1 RTD Tea

Singapore

• Proven products in a quality-

concern market

• Cooperation with F&N

Laos*

• No. 1 RTD Tea

Malaysia

• No.1 RTD Green tea
• Cooperation with F&N

Remarks : * Market share information is based on internal market survey from local distributors (unofficial data)

2Q18 2Q19

Export Revenue

+17% YoY % Export to Bev revenue

23% 24%

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Company’s Subsidiary Company’s Beverage Factory Partner’s Beverage Factory

Beverage: Continue Engagement with Marketing Activities

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Impactful promotions Building Brand love among youngsters Concerts TVC Local festive (boat racing) Movies sponsorship Online

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Food Business

Food: Continued Outlet Expansion

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Brand Type Balance as

• f

30 Sep 18 Opened Closed Balance as

• f

31 Mar 19

Buffet (THB 995 net) 1

• 1

Buffet (THB 659+) 7 + 1

• 8

Buffet (THB 569+) 11

• 1

10 Buffet (THB 399 net) 138 (1) + 9

• 5

142 (1) A-la-carte 54 + 2

• 2

54 A-la-carte and Buffet (THB399++ and 539++) 17

• 17

A-la-carte 22 + 3

• 25

Others A-la-carte 2

• 1

1 Total 252 + 15

• 9

258

Note: 1) include 2 outlets of Shabushi in Myanmar Remarks: Price might be vary in some outlets

3.2% 4.3% 6.6%

2017 2018 YTD19

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Food: Continue to Drive Efficiency While Expansion

Hokkaido soft serve

240 252 258

2017 2018 Mar-19

Number of Store Food‘s normalized net profit margin Continue store expansion while Rationalizing store expansion model

• Continue outlet expansion strategy
• Focus on high performing brands in
• rder to enhance profit margin
• Light store format that safe store

capex and penetrate to small provinces

• Improve performances of low-margin

brands

• Relocation of non-performing stores to

the right locations that match with target customers

Focus on profitability

Delivery Transaction

+17% YoY

After revamp

(Data as of Oct-18 to Mar-19 compared to the same period last year)

Online Delivery Platform Revamp

• More simplified and user-friendly

platform

• Extend coverage areas to broader

customer target

• New delivery menu to add

excitement

• Cost-saving platform compare to

call-center

Food: Online Delivery is a Next Growth Driver

Objective

• To build brand awareness for packaged Food with strong communication plan
• To strengthen and leverage on Oishi Brand
• To use a simplified logo for customers’ recognition

On-shelf target: 2Q19-3Q19

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Food: Building “One” Brand for Packaged Food

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Channel Expansion

• Currently, our distribution

channel depends heavily on 7- 11, Family Mart, Tesco Lotus and Mini BigC

• Due to synergy within ThaiBev’s

group, Packaged Food’s recently focus more on “Food Services” and “HORECA” channels

New Products

New Channels

Food: Packaged Food’s Channel Expansion and NPD

• Oishi Eato Sandwich

Salmon Salad with Teriyaki

• Oishi Eato Sandwich

Chicken Salad with Hawaiian

• Oishi Eato Gyoza

Smoked Chicken Yuzu ponzu

• Oishi Eato Gyoza Mala

sauce

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Strategy and Outlook

• Store Expansion
• To open 19 outlets in

2019 and 20 outlets in 2020

• Deeper penetration in

second-tier provinces

• Brand Building & Customer

Retention

• Brand Premiumization
• Improve Customer

Experience using services and technology

• Product Development
• New Innovation
• Menu Rationalization
• Platform Expansion
• Online ordering &

delivery platform

• Operational Excellence
• Sustainable Quality
• Dominance Leadership in

Thailand

• Grow portfolio share

through innovation and new product development

• Premiumization
• Healthier Products for the

future

• Larger Export Footprint
• Grow in CLMV
• Driving Synergy
• Synergy with stakeholders

2019-2020 Strategic Priorities

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Restaurant Packaged Food Beverage Group Food Group

• Brand Building
• Oishi “One” Brand
• Japanese brand for RTE
• Build Brand connection

and Engagement

• New Product
• New category and New

innovation

• Distribution
• Expand to new channels

and leverage Group Synergy

• Continue to grow in

existing channels – CVS and MT

• Grow Export
• Efficiency and Productivity
• Utilize technology
• Improve process to

reduce waste

Our Awards and Recognitions

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2018

Superbrands Thailand 2017 Awards from Superbrands for 3rd consecutive years Thailand’s Most Social Powerful Brand 2018 from BrandAge Thailand Top Company Awards 2018 from ARIP and UTCC Food Safety Award 2018 from Ministry of Public Health Certificate from Green House Gas Management Organization (องค์การบริหาร จัดการก๊าซเรือนกระจก)

2019

Thailand’s Most Admired Brand 2019 from BrandAge for 8th consecutive years The Most Powerful Brand 2018 from Chulalongkorn Business School

Give Back to the Community with CSR

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The Giving Project

• Renovation of Thai temple in Japan
• Clean drinking project
• The Co-operative Education Project
• The residence project
• Scholarships for children of staff

“Im-jung” Project

• Special meal for less fortunate children
• for schools in nearby area of

manufacturing plants

• Songkran events for disabled one and

elderlies in less developed areas Support and extend help to society in a number

• f ways – promotion for quality of life,

economic and social aspects through activities as follows: Donate our products for youth and those less fortunate in our community alongside with recreational activities that promotes good morality.

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THANK YOU