Strictly Private & Confidential 0 Feb, 2017 Strictly Private - - PowerPoint PPT Presentation

Strictly Private & Confidential

Feb, 2017

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Strictly Private & Confidential

Feb, 2017

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Disclaimer

The provision herein does not constitute legal advice or investment opinions of any kind, neither is it intended as an offer, solicitation for Carabao Group PCL. (“CBG” or “The Group”). The information presented within this material is intended to indicate the Group’s operational and financial position at a given period of time and to be used, downloaded, and distributed for analyst briefings, and general meetings with CBG, and to be used for educational material in order to understand CBG’s operation only. The Group makes no representation that all information is complete and accurate for the purpose of producing a projection of CBG’s operations, performance, or financial position and may be susceptible to uncertainty and important changes based on political, economic, strategic, and other such uncontrollable factors. Forward looking statements in this presentation are based on the management’s assumption in light

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information currently available and

• btainable,

as well as the aforementioned/unmentioned risks and uncertainties. CBG’s actual results may vary materially from those expressed or implied in its forward-looking statements, and no assurance is made as to whether such future events will occur. The Group accepts no liability whatsoever for any loss arising directly or indirectly from the use or endorsement of any information contained herein by any users and/or third parties. 1

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Agenda

4Q16 & FY16 Performance Update

1)

Financial

2)

Business Update

2

4

4Q16 & FY16 Performance Update

• 1. Financial

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5

M-150

Market Share Comparison For FY2016

Source: Nielsen energy drink market report, December 2016 ("Nielsen Report")

78% 84% 84% 90% 91% 95% 95% 95% 96% 96%

Selling Distribution (Coverage) Selling Distribution (Coverage) Carabaodang

31.0% 31.4% 30.7% 32.0% 30.9% 32.6% 32.6% 33.1% 33.1% 32.6% 33.0%

33.4%

32.8% 32.5% 33.3% 32.9% 33.0% 31.8% 31.6% 31.4% 30.6% 31.0% 31.5%

31.7%

JAN16 FEB16 MAR16 APR16 MAY16 JUN16 JUL16 AUG16 SEP16 OCT16 NOV16 DEC16

Number 1 in Central region since June’ 16

• Central region is the largest region for energy drink consumption, representing

35.40% of the Thai traditional trade channel CBG’s contribution by region 4

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6,863 7,448 7,753 9,965 2,076 2,858 2,102 2,316 2,689 2,858 FY13 FY14 FY15 FY16 4Q15 4Q16 1Q16 2Q16 3Q16 4Q16 (Baht mil)

Total Sales Revenue

BREAKDOWN OF DOMESTIC AND EXPORT SALES BREAKDOWN BY SALE CHANNEL OF DOMESTIC SALES

3YR CARG +13.4%

72% 71% 66% 28% 29% 34% FY14 FY15 FY16 70% 64% 30% 36% 4Q15 4Q16

EXP DOM

+37.6% +6.28% +28.5%

Key growth contributors

• Domestic : Push Strategy (Cash Vans) & Pull Strategy coupled with

New Products

• Export: : Continuous growth in export markets mainly due to growth

from Cambodia & Afghanistan

20.6% 5,477 6,603

24% 22%

73% 63%

2% 15%

FY15 FY16 TT(CV) TT(Agent) MT

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90.7% 3.7% 5.5%

91.1%

2.1% 3rd parties 3.1%

2.2%

1.5%

Sales Revenue Breakdown

FY2016 DOMESTIC

SALES

5,358 5,477 6,603 1,453 1,820 1,387 1,546 1,850 1,820 FY14 FY15 FY16 4Q15 4Q16 1Q16 2Q16 3Q16 4Q16 +25.2%

• 1.6%

+20.5% 2,094 2,276 3,362 624 1,038 717 769 838 1,038 FY14 FY15 FY16 4Q15 4Q16 1Q16 2Q16 3Q16 4Q16 +66.3% +23.86% +47.7%

(Bath Mill)

FY2016 OVERSEAS

SALES

Annual domestic sales growth is attributed to the following:

• Carabaodang and Start Plus grew 12% and 53% yoy

respectively

• New branded product launches in 2016 i.e. Water and

Coffee collectively amounted to THB 238mn in sales 6

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Overseas Sales by Country

Cambodia

CLMV GROWTH YoY

1,315 1,868 2,526 FY14 FY15 FY16 Cambodia 62% Afghanistan 14% Myanmar 8% Vietnam 5% Yemen 5% UK 2%

• thers 2%

Baht Mil FY14 FY15 FY16 %YOY 4Q15 4Q16 %YoY Cambodia 1,006 1,547 2,074 34% 461 599 30% Myanmar 243 223 279 25% 40 100 150% Vietnam 66 98 173 77% 22 68 209% Yemen 169 167 202 21% 42 70 67% Afghanistan 531 164 481 193% 44 160 264% United Kingdom 62 100% 21 100% Others 76 77 91 18% 15 20 33% Total 2,091 2,276 3,362 48% 624 1,038 66%

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Gross Profit Margin

33.30% 38.80% 37.30% 38.60% 34.76% 34.70% 32.40% 33.20% 32.70% 32.5% FY14 FY15 FY16 4Q15 4Q16

Domestic Export

33.7% 36.9% 35.90% 36.80% 33.9%

TOTAL

Carabao &Start Plus : 38% Remaining:15%

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Statement of Consolidated Comprehensive Income

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Unit: THB million 2015 2016 FY2016 FY2016 4Q15 4Q16 4Q16 4Q16 %sales YoY %sales YoY

Revenue from sales 7,753 9,965 100.0% 28.5% 2,076 2,859 100.0% 37.7% Costs of goods sold 4,893 6,388 64.1% 30.6% 1,312 1,889 66.1% 44.0% Gross profits 2,860 3,577 35.9% 25.1% 764 969 33.9% 26.8% Selling expenses 1,120 1,484 14.9% 32.5% 359 521 18.2% 45.1% G&A expenses 360 510 5.1% 41.7% 104 170 5.9% 63.5% Operating profits 1,380 1,583 15.9% 14.7% 301 278 9.7%

• 7.6%

Other incomes 121 147 1.5% 21.5% 30 27 0.9%

• 10.0%

Other expenses 35 42 0.4% 20.0%

• 42

1.5% 42.0% EBIT 1,466 1,686 16.9% 15.0% 331 261 9.1% -21.1% EBITDA 1,702 1,912 19.2% 12.3% 391 316 11.1%

• 19.2%

Interest expenses 2 4 0.0% 80.0% 1 2 0.1% 60.0% EBT 1,465 1,638 16.4% 11.8% 330 215 7.5% -34.8% Income tax expenses 209 278 2.8% 33.0% 42 63 2.2% 50.0% Net profits for the period 1,256 1,404 14.1% 11.8% 288 196 6.9%

• 31.9%

1,256 1,490 14.95% 18.6% 288 281 10%

• 2%

Non-Controlling interest in 2016 -85 THB million ,-1% Sales for FY2016

Equity Holder of the Company

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Statement of Consolidated Financial Position

ASSETS Dec-15 Dec-16 Change LIABILITIES Dec-15 Dec-16 Change Current Assets Current Liabilities Cash, Cash Equivalents 1,377 745 (632) Bank overdrafts&short-term loans from financial institutions

• 750

750 Current Investments 473 604 131 Trade and other payable 802 1,302 500 Trade and other receivable 425 562 137 Other Current Liabilities 150 272 122 Inventories 249 433 184 Total Current Liabilities 951 2,324 1373 Other current assets 17 110 93 Total non-current liabilities 77 354 277 Total Current Assets 2,541 2,454 (87) Total Liabilities 1,028 2,678 1650 Non-Current Assets SHAREHOLDERS' EQUITY Long-term Investment

• Issued and fully paid up share capital

1,000 1,000

• Investment Properties

108 104 (4) Premium on shares 3,963 3,963

• Property, plant & equipment

4,667 6,626 1,959 Retained earnings 938 1,477 539 Intangible Assets 16 15 (1) Other components of shareholders' equity 432 432

• Deferred Tax Assets

25 34 9 Equity attributable to owners of the Company 6,333 6,873 540 Other non-current assets 4 8 4 Non-controlling interests of the subsidiary

• 226

226 Goodwill

• 536

536 Total Non-Current Assets 4,820 7,323 2,503 Total shareholders' equity 6,333 7,099 766 Total Assets 7,361 9,778 2,417 Total liabilities and Equity 7,361 9,778 2,417

STATEMENT OF FINANCIAL POSITION

Unit THB million

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Our SKUs (Energy Drink)

Products Carabao Energy Drink (Original) Carabao Energy Drink (Original Export) Carabao Carbonated Carabao Ginseng Edition Carabao Carbonated (Original) Carabao Carbonated (Sugar Free) Carabao Carbonated (Green Apple) Descriptions

• 150ml

amber glass bottle

• Flat taste
• Caffeinate

d + B12

• 250ml

aluminum can

• Flat taste
• Caffeinated +

B12

• 325ml

aluminum can

• Carbonated
• Caffeinated +

Multivitamins

• 325 ml

aluminum can

• Carbonated
• Caffeinated +

Multivitamins

• Ginseng

Extract

• 325ml

aluminum can

• Carbonated
• Caffeinated +

Multivitamins

• Less sugar

(1:4)

• 325 ml

aluminum can

• Carbonated
• Caffeinated +

Multivitamins

• Sugar Free
• 325 ml

aluminum can

• Carbonated
• Caffeinated +

Multivitamins

• Green Apple

Flavour Markets Domestic (mainly) Export Only Export in Asia First market: Afghanistan First market: UK First market: UK First market: UK Launch Date October 2001 2004 May 2015 February 2016 April 2016 August 2016 October 2016 Retail Selling Price 10 THB (domestic) Differ in various countries 2,000 Riel (17 Baht) Differ in various countries 1.19 GBP 1.19 GBP 1.19 GBP

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Our SKUs (non-Energy Drink)

Products Start Plus Carabao Drinking Water Carabao Coffee (Rich Aroma) Carabao Coffee (Espresso) Carabao Coffee (Robusta) Carabao Coffee (Espresso) Descriptions

• 250ml

glass bottle

• Flat taste
• Electrolyte

& vitamins

• (No

caffeine)

• 2 size =

600ml & 1200ml

• Outsource

production

• Distribution

through Cash Vans Channel

• 30 small sticks in

1 pack

• Outsource

production

• Distribution

through Cash Vans Cannel and Tesco

• 30 small sticks in

1 pack

• Outsource

production

• Distribution

through Cash Vans Cannel and Tesco

• 180ml can
• Outsource

production

• Distribution

through Cash Vans Channel, BigC and 7- Eleven

• 180ml can
• Outsource

production

• Distribution

through Cash Vans Channel, BigC and 7-Eleven

Domestic Market Launch Date May 2014 February 2016 July 2016 November 2016 Retail Selling Price 10 THB 7 & 12 THB 85 THB 10 THB

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Products Seaweed Dish Washing Liquid Peanuts Fish Snacks Toothbrush Razor Juice Retail Selling Price (THB) 5 10 5 5 10 10 10 Launch Date November 2015 April 2016 June 2016 July 2016 Products Fabric Softener Squid Snacks Cigarettes (10Skus)1 Toilet Cleaner Tissue Detergent Retail Selling Price (THB) 10 5 40 - 86 25 5 10 Launch Date August 2016 September 2016 October 2016 December 2016

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RD Party Products in Cash Vans

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4Q16 & FY16 Performance Update

• 2. Business Update

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• 1. Cash Vans & DCs Plan Completed

12 7 DCs 8 DCs 3 DCs

W

4 DCs 2 DCs 6 DCs

Target reached since October 2016: 30 DCs with 337 Vans, covering approx. 320,000 retailers nationwide % contribution of Branded products

• Began in Feb’15 and thus far accomplished 30 DCs located throughout the country
• Average sale amounted to THB 17,800 per van per day with 70% of which contributed

by our branded products

70% 19% 7% 4% Total Carabao Coffee Drinking Water StartPlus 70% 30% Total Branded Product 3rd Paties

% contribution of total CV sales

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• 2. UK Business Update

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• 2. UK Business Update (Cont.)

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Retails/MT 50%

• Kick in and sell through approximately

3,000 POS in 2Q2017

• Make good headway in negotiation

with new MT accounts

• 2. UK Business Update (Cont.)

MT and TT account for 60% and 40% respectively of the market

approximately

10,000POS

Cash Vans

MT accounts expected in 2Q2017

Cash & Carry/TT 50%

• Improve and continue to expand distribution capabilities through cash & carry operators
• Adopt cash van strategies to promoting brand equity and product visibility at the shelves
• f nationwide grocery stores



Enlarge fleet of cash vans to 45-50 units in the short term



Develop promotional tools to push forwards sales continuously TT accounts at the present 18

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• 2. UK Business Update (Cont.)

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• 2. UK Business Update (Cont.)

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• 2. UK Business Update (Cont.)

Precision Offline Marketing of RONTEC and BP

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• 3. The Greater China JV arrangements

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Extended reach to the Greater China region through a JV arrangement with a group

• f Chinese investors and management

Items Descriptions Project

• Greater China Investment Project

Size of investment

• Equivalent to USD 40.0mn whereby CBG through the subsidiaries USD 17.7mn

Description

• Establish JV companies in partnership with Chinese investors and management
• Conduct marketing, sales and distributions of energy drinks and other drinks under

Carabao trademark and/or other trademarks to be developed or acquired by the JV companies

• Kick off with the PRC market and potentially further to other markets i.e. Hong Kong,

Macau and Taiwan Source of fund

• A combination of internal cash flows and loans from commercial bank(s)

Indicative timetable

• Mar 2017: Enter into the joint venture agreements; and
• Apr 2017: JV companies established

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Energy drinks in the PRC market

4

23

Billion USD

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Our marketing plans in the PRC market

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Sports Event Platform: For Brand Spirits

• China popular sports and the extreme sports loved by young people
• Sponsor sporting events for promote brand awareness

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Our marketing plans in the PRC market (Cont.)

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Event Exhibiting at China

• Build up a new product experience and consumer engagement

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• 5. Brazil Market Opportunity
• Football is the most popular sport ,which often refer to the

country as "o País do Futebol " ("the country of football")

• Flamengo FC is the most popular team with over 39.1 supporters
• One of Brazil’s richest football clubs and the second most valuable

club in South America

Carabao Brand successful launched partnership with Flamengo F.C. in January 2017 Local distributor is responsible for the sponsorship with the Flamengo football club.

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The Brazilian Market Of Energy Drink

Red bull 43% Ambev 10% Globalbev 5% Monster 4% Coca-Cola 10% Pretropolis 8% Others 20%

500 1,000 1,500 2,000 2,500

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Total Consumption (Million Litre )

Brazil Consumption of Energy Drinks

*Source: Euromonitor Oct 2016

Market Share% (2015)

• Brazil is the fifth largest Energy Drink in the World in 2016
• Brazil’s energy drink market reached $1.9bn in 2015
• Growth is forecast to double by 2020 to $4.3bn

210m

Population

130m

Litres

1.6bn

Euro

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• 6. New bottling lines at the Bangpakong site

4

Construct a brand new factory to boost capacities in anticipation of increasing demands for energy drinks in bottle format

Items Descriptions Project

• Bangpakong Bottle Filing Project

Size of investment

• Approx THB 1,750mn

Description

• Build a brand new and modernized 2-storey factory

covering approx 15 rais of land plot to accommodate up to 10 bottle filling machines

• Move away from fuel oil to natural gas base for heating
• perations
• Initially involve an installation of 2 new high-speed lines,

with each being capable of 1,000 bottles per minute or 24 million bottles per month, with option to relocate 5 existing lines from the Bang-bor site

• Total capacities of the Bang-bor and Bangpakong sites to

reach 1,535 million bottles per year Source of fund

• A combination of internal cash flows and loans of approx

<THB 1,500mn from commercial bank(s) Indicative timetable

• 1Q/2017: Construction and planning started
• 4Q/2017: Test run and production commencement
• 4Q/2017: Relocation of the existing bottling lines

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• 7. New JV Aluminum cans factory

Items Descriptions Project

• Aluminum can factory

Size of investment

• Approx THB 2,275mn
• CBG and SHOWA hold 74% and 26% of respectively

Description

• SHOWA is principally engaged in certain industries including

petrochemicals, chemicals, aluminum, electronics and battery with international footprints in Asia, Europe and North America

• Leverage SHOWA’s know-how to build a modernized factory of

aluminum cans for packaging purpose with installed capacity of 1,000 cans p.a. in the initial phase

• The site covers 32 rais in Bangpakong site and has flexibility for

future expansions

• Achieve lower cost of canned products by reduce dependency
• n OEM producers, which in turn an improvement in profitability

and costs more effectively Source of fund

• THB 700mn equity and THB 1,575mn project finance loans
• CBG and SHOWA hold 74% and 26%, respectively

Indicative timetable

• March 29, 2017: JVA signed
• Within 3Q18: Procurements and constructions completed
• Within 4Q18: Test run and production commenced

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CBG and SHOWA jointly invest and establish a factory of aluminum cans for packaging purpose

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• 8. New Factories Progress

Increasing production capacity for amber glass bottle in

• rder to support ongoing growth of Carabaodang bottles

Production Capacity : 650 mn bottles/annum Production starts : 4Q2017

APG FURNACE 2 –30 % PROGRESS CAN FILLING FACTORY – Test run in February 2017

Increase can filling production capacity (beginning with 2 new lines) to support volume growth of overseas business Production Capacity : 240 mn cans/annum (2 line) Production starts : 1Q2017 32