Opportunity Day 21 st March 2018 1 Agenda Company Overview - - PowerPoint PPT Presentation

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Opportunity Day

21st March 2018

Agenda

• Company Overview
• Business Update
• Financial Results
• Forward Looking

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Company Overview

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Our Business

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Shareholding Structure

Rattakul Group Gutsche Family Investments Aberdeen Small Cap Fund Others

Nationality

• No. of

Share % Shareholding Thai 134,775,833 67.65% Foreign 64,442,167 32.35% Total 199,218,000 100.00%

Note: Foreign limit ≤ 35%

Chirabandhu Group

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Key Milestones

1949 first entered Thailand 1969 Bottling & distribution franchise granted to Nakornthip Ltd. 1974

• Sec. Lt. Phairoch Rattakul

assumed leadership of the company 1978 Nakornthip changed name to Haad Thip 1988 HTC was listed in SET 2013 Manufacturing capability expanded to Surat Thani province with new Poonpin plant

• Head office in Haad Yai, Songkhla with

Executive offices in Bangkok

• 2 Production plants at Haad Yai (Songkhla)

and Poon Pin (Surat Thani)

• 20 Branches throughout 14 provinces in the

South

• 8 production lines + 2 injection machines
• 14 Brands, 114 SKUs (products)
• Over 2,000 employees
• 200 sales trucks
• Service over 45,000 outlets
• Leadership in South sparkling market with

84% share (sparkling >90% of total sales)

• Hybrid route-to-market: pre-sell, van sales,

telesales, MDC

HTC Today

Production plant DC 7

Our Portfolio

Sparkling Still

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NORTH NORTHEAST SOUTH

BANGKOK

South Overview

WEST EAST

South Key Highlights: Consist of 14 provinces stretching from Chumporn downwards to the Malaysian border Economy depends largely on rubber, rubber related industry, palm oil, fishery, canned food industry, local fruits, coffee and tourism Major tourist areas – Phuket, Krabi, Phang-Nga, Trang, Samui, Satun, Haad Yai On-going violence in the 4 southernmost provinces: 3 of these 4 areas serviced via Manual Distribution Centre (MDC) agents Thailand South Population (Million) 66.2 9.4 Population Mix 100% 14% Annual Income per capita* (THB) 112,704 99,612

* 1H2017 source: www.nso.go.th 9

Business Update

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FMCG remains holding back for growth

FMCG Basket (excl. ABC*) % Value Change

*ABC = Alcohol Beverage and Cigarette Source: AC Nielson 11

NARTD market is contracting in Y2017

• 2.5%
• 4.1%

0.7%

• 8.8%
• 12.9%
• 8.7%
• 2.8%

3.1%

• 13.8%

0.0%

• 3.4%
• 2.3%

17.1% 6.3%

• 5.4%
• 7.4%
• 5.3%
• 8.1%
• 11.8%
• 7.6%

0.7% 0.1%

• 14.5%

1.9%

• 0.5%
• 1.3%

16.5% 3.5%

Total NARTD Softdrink Drinking Water RTD Juice RTD Tea Sport Drink Energy Drink RTD Coffee Asian Drink Flavour Milk* Soy Milk Drinking Yoghurt Cereal Drink Tonic Food Drink

Total Thailand South

% Volume Change (Y17 vs. Y16)

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HTC’s volume also declines in 2017 but at a slower rate than the market

39 42 47 50 53 52 2012 2013 2014 2015 2016 2017

+/- vs. PY +14% +10% +12% +5% +6%

• 1.5%

Category +/-

(Y17 vs. Y16)

Sparkling

• 1.7%

Water +1.9% Still (excl. water)

• 2.1%

Total

• 1.5%
• Vol. Growth by Category

Sales Volume (MUC)

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Financial Results

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5,704 5,671 Y16 Y17

Y2017 Financial Highlights

Net Sales Revenue Sales revenues declined by 0.6% vs. PY, but still lagged behind the decrease in sales volume (-1.5%), primarily due to improved avg. selling price. Whilst, volume dropped as a result of contracting NARTD market, severe flood and continual rain throughout Summer in Southern TH. Gross Profit Despite declined sales, gross profit increased by 4% (GPM improved from 31.0% to 32.4%), due to higher selling price but lower production cost driven by increase in production capability. Net Profit Highest record of Company’s profit with improved net profit margin from 4.2% to 5.0%, mainly due to increased gross profit but stable SG&A exp. (higher admin exp. was

• ffset by lower distribution costs and f/x loss)

1,769 1,835 31.0% 32.4%

29.0% 30.0% 31.0% 32.0% 33.0% 34.0% 35.0% 1,720 1,740 1,760 1,780 1,800 1,820 1,840

Y16 Y17

241 283 4.2% 5.0%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 00.00 20.00 40.00 60.00 80.00 00.00

Y16 Y17

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HTC has been growing its net profit significantly despite slight increased/ dropped sales revenues

5,316 5,704 5,671 1,439 1,399 1,449 1,384 Y15 Y16 Y17 Q1 Q2 Q3 Q4 +7%

• 0.6%
• 1%
• 11%

+8% +4% +139% +18% +8%

• 26%

+70% +111% 101 241 283 85 68 73 56 Y15 Y16 Y17 Q1 Q2 Q3 Q4

Net Sales Revenues (MB) Net Profit (MB)

• 1H2017: Severe

flooding in Q1’17 and continual rain throughout summer

• 2H2017: Recovered

sales volume but still with contracting market constraint

• Y16: Full-year operation
• f 2nd injection machine

& 3rd PET line operated in Q2’16

• Q2’17: Higher per-unit

cost due to declined volume

• Q3-Q4’17: higher GP

mainly from lower per- unit cost as a result of recovered sales vol.

Y2017 by Quarter Y2017 by Quarter

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1.9% 4.2% 5.0% 5.9% 4.9% 5.1% 4.1% 27.4% 31.0% 32.4% 31.5% 31.7% 32.3% 33.9%

Continuously growing profitability

Y2017 by Quarter % Gross Profit % Net Profit

Full-year operation of 2nd injection machine and 3rd PET line was in operational in Q2’16 Lower production costs from economy of scale (higher volume), resulting in increased profit margin

• Annual salary increase
• Recruitment of new talents

for future business

3 4 1 2

• Improved average selling prices

and pack & channel mix

• Full-year operation of 3rd PET line
• Flat SG&A exp.

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• Lower discount to customer
• Increased employee benefit to in line

with Company’s performance 17

2017 vs. 2016 Lower Assets and Liabilities, Higher Equity

18 4466 4708 4609

2015 2016 2017

Total Assets

2,116 2,235 1,944 2015 2016 2017

Total Liabilities

2,350 2,473 2,665 2015 2016 2017

Total Equity

Total assets decreased by 100MB (-2%) in 2017 due mainly to lower cash (used for early repayment of long-term loans), less inventory (shorter inventory holding day), and decreased other A/Rs (e.g. A/R-Excise Tax Dept.) Total liabilities declined by 291MB (-13%) vs. 2016 because of no significant loan drawdown in 2017, while continuing loan repayment. Total shareholders’ equity rose by 192 MB (+8%) in 2017 from increased operating profit and land revaluation (+65MB) during the year.

Key Financial Ratio

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Profitability - Efficiency Ratio

Current ratio Quick ratio 1.05 0.93 0.70 0.62 Y16 Y17 D/E ratio IBD/E ratio

Significant decrease in interest-bearing debts (both short and long terms) led to lower D/E and IBD/E ratio in 2017

Financial Policy Ratio Liquidity Ratio

0.44 0.30 0.90 0.73 Y16 Y17

Current and Quick ratio was slightly lower as a result of less cash which was used for early repayment of long-term loans.

• Higher return on assets (ROA) because of

increased net profit but lower asset base.

• Higher return on equity (ROE) due mainly to

increase in net profit.

ROE ROA

6.3 7.3 10.0 11.0 Y16 Y17

HTC’s Dividend

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0.40 0.30 0.25 0.65 1.00 2013 2014 2015 2016 2017

Dividend per Share (Baht)

Dividend Payout 43% 52% 49% 54% 70% Dividend Yield 2.48% 3.33% 2.29% 1.32% 3.22%

Forward Looking

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SALEs VOL: 52 MUC 62.5 MUC NARTD SHARE: 23% 26%

2017

+6.3% p.a. +3.2 pts.

2020

SPARKLING SHARE: 84% 85%

+3.2 pts.

SALEs REVENUE: 5,671 MB 7,000 MB

+6% p.a. +6.8% p.a.

“Continually increasing profitable, sustainable unit case sales of our products by satisfying new and existing consumers through excellent service to and with our customers at an increasing return”

Awards & Certificate

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NACC Integrity Awards 2017

รางวัลชมเชยองค์กรโปร่งใส ปี 2017 โดย ปปช.

รางวัลชนะเลิศ หญ้าแฝกทองคํา

Carbon Footprint for Organization & Products (24SKUs) Green Industry Level 4

การรับรองอุตสาหกรรมสีเขียว ระดับ 4 (วัฒนธรรมสีเขียว) โดยกระทรวงอุตสาหกรรม โล่พระราชทาน พระบาทสมเด็จพระปรมินทร มหาภูมิพลอดุลยเดช การรับรองคาร์บอนฟุตพริ0นท์ องค์กรและสินค้าจํานวน 24 SKU

Confidential

Q&A