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0 Strictly Private & Confidential Mar 2019 Carabao Group Analyst Meeting FY18
00
Strictly Private & Confidential
Mar 2019
Carabao GroupAnalyst Meeting FY18
11
DisclaimerThe provision herein does not constitute legal advice or investment opinions of any kind, neither is it intended as anoffer, solicitation for Carabao Group PCL. (“CBG” or “The Group”). The information presented within this material isintended 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 educationalmaterial in order to understand CBG’s operation only. The Group makes no representation that all information iscomplete and accurate for the purpose of producing a projection of CBG’s operations, performance, or financial positionand may be susceptible to uncertainty and important changes based on political, economic, strategic, and other suchuncontrollable factors. Forward looking statements in this presentation are based on the management’s assumption inlight of information currently available and obtainable, as well as the aforementioned/unmentioned risks anduncertainties. CBG’s actual results may vary materially from those expressed or implied in its forward-lookingstatements, and no assurance is made as to whether such future events will occur. The Group accepts no liabilitywhatsoever for any loss arising directly or indirectly from the use or endorsement of any information contained hereinby any users and/or third parties.
NET SALES
฿14,463mn 12%YoY 52% of
ENERGY DRINK SALES
OVERSEAS
CLMV SALES
฿5,498mn 67%YoY
ENDED 31 DECEMBER 2018
EBITDA
฿1,899mn 38%YoY
FY18 AT A GLANCE
33
Total Sales
Sales by Quarter (THBmn) Growth Portion4Q2018
Sales YTD (THBmn)
GPM
GPM
Domestic sales
Overseas sales
Domestic sales
Overseas sales
44
Sales (THBmn) & GPM (%) by BusinessOVERSEASDOMESTIC: BRANDED OWN
DOMESTIC: DISTRIBUTION for 3rd PARTYDOMESTIC: BRANDED OEM
55
Domestic Sales
DOMESTIC SALES BY CHANNEL BREAKDOWN OF DOMESTIC GPM BY BUSINESS
Domestic sales of Carabao Dang recovered in 4Q18 i.e. +7.4% YoY, thanks to improved market conditions
QoQ as a combined result of economies of scale and reduction of key material prices
YoY due to gradual adjustment for selling price of Coffee RTD
66
THB mn FY15 FY16 FY17 FY18 %YoY 3Y-CAGR 4Q17 3Q18 4Q18 %YoY %QoQCambodia 1,547 2,074 2,489 4,438 78% 42% 739 1,177 1,267 72% 8%Myanmar 223 279 422 678 61% 45% 126 132 205 63% 56%Vietnam 98 173 356 349 -2% 53% 75 40 73 -3% 83%Yemen 167 202 225 137 -39% -6% 112 31 67 -40% 113%Afghanistan 164 481 257 65 -75% -27% - 26 9 0% -67%China - - 1,019 592 -42% n/a - 116 72 N/A -38%Others 77 132 53 133 152% 20% 11 30 35 219% 20%Overseas sales from CBD 2,276 3,340 4,821 6,392 33% 41% 1,062 1,551 1,727 63% 11%Overseas sales from ICUK - 16 202 84 -58% n/a 34 45 27- -180% -160%Total 2,276 3,356 5,024 6,476 29% 42% 1,097 1,597 1,700 55% 6%
Overseas salesOverseas Cambodia and Myanmar made a new record high in 4Q18
77
Strong our expansion projects; but still well below our group p rise on the funding side to support olicy i.e. 2.0x
Decomposed EBITDA & Debt Profile
Note: CBG started to consolidate ICUK in an aftermath of takeover exercise since 4Q2016
Non-ICUK (THBmn) ICUK (THBmn) Consolidation (THBmn)
Interest bearing debts / Total Equity Total Liabilities / Total Equity
Key indicator of consolidated debt profile
Representing global sponsorship fees incurred by Non-ICUKgroup of companies
Representing global sponsorship fees incurred by ICUK group of companies
Representing global sponsorship fees incurred by consolidation
88
Unit: THB millionASSETS Dec-17 Dec-18 Change LIABILITIES Dec-17 Dec-18 ChangeCurrent Assets Current LiabilitiesCash, Cash Equivalents 147 138 (9) Short-term loans 845 275 (570)Current Investments 7 - (7) Trade and other payable 1,897 1,810 (87)Trade and other receivable 960 907 (53) Current portion of long-term loans 300 401 101Inventories 656 887 231 Other current liabilities 164 278 114Other current assets 389 546 157 Total Current Liabilities 3,207 2,764 (442)Total Current Assets 2,159 2,477 318 Long-term loans 2,190 1,279 (912)
Debentures - 2,786 2,786Other non-current liabilities 118 126 9Total non-current liabilities 2,308 4,191 1,883
Non-Current Assets Total Liabilities 5,515 6,955 1,441Long-term Investment - - 0 SHAREHOLDERS' EQUITYInvestment Properties 103 100 (3) Issued and fully paid up share capital 1,000 1,000 0Property, plant & equipment 9,609 11,090 1,481 Premium on shares 3,963 3,963 0Intangible Assets 67 77 10 Retained earnings 1,775 2,240 465Deferred Tax Assets 31 63 32 Other components of shareholders' equity 376 26- 1Other non-current assets 15 12 (3) Equity attributable to owners of the Company 7,114 7,177 63Goodwill 535 500 (36) Non-controlling interests of the subsidiary 108- 188 296Total Non-Current Assets 10,361 11,843 1,482 Total shareholders' equity 7,005 7,365 359Total Assets 12,520 14,320 1,800 Total liabilities and Equity 12,520 14,320 1,800
STATEMENT OF FINANCIAL POSITION
Statement of financial position
99
Unit: THB million 2017 2018 Change 2018 4Q2017 4Q2018 Change 4Q2017 4Q2018YoY %sales YoY %sales %sales
Revenue from sales 12,904 14,463 12.1% 100.0% 3,197 3,847 20.3% 100.0% 100.0%Costs of goods sold 8,840 9,813 11.0% 67.9% 2,286 2,565 12.2% 71.5% 66.7%Gross profits 4,065 4,649 14.4% 32.1% 911 1,282 40.7% 28.5% 33.3%Selling expenses 2,379 2,561 7.7% 17.7% 588 515 -12.3% 18.4% 13.4%G&A expenses 741 788 6.4% 5.5% 217 191 -12.1% 6.8% 5.0%Operating profits 945 1,301 37.6% 9.0% 107 576 440.5% 3.3% 15.0%Other incomes 164 135 -17.5% 0.9% 34 45 33.8% 1.1% 1.2%EBIT 1,109 1,435 29.4% 9.9% 140 621 343.1% 4.4% 16.1%EBITDA 1,372 1,899 38.4% 13.1% 219 750 242.5% 6.9% 19.5%Interest expenses 48 107 124.0% 0.7% 19 31 63.1% 0.6% 0.8%EBT 1,061 1,329 25.2% 9.2% 121 590 386.8% 3.8% 15.3%Income tax expenses 261 368 41.3% 2.5% 42 123 191.2% 1.3% 3.2%Net profits for the period 801 960 19.9% 6.6% 79 467 491.5% 2.5% 12.1%
1,246 1,159 -7.0% 8.0% 209 513 145.0% 6.5% 13.3%Equity Holder of the Company
Statement of comprehensive income
Remark: *CBG increased shareholdings in ICUK, a subsidiary operating marketing and distribution of Carabao products in the UK and other countries outside Asia,from 51% to 84% since 1Q18 onwards.
*
1010
SEA TV, CTN SEA TV, CTN, HANG MEAT
HDTV, CNC, MY TV,
ชอ่ง 8, ชอ่ง 5
2019 CAMBODIA
1111
2019 MYANMAR
1212
2019 DOMESTIC
Centralised sales force management plan
New SKUs Marketing Activities
460,000 membersคาราบาวแดง
180 ml
New agents appointed
AgentSub-agent
Cash Van
Mktg
Activities to increase
rate of sales
Manage relationship with retailers
support marketing/media plan
DETAILED PLAN
Bao Dang Lady Team
To promote sales and communicate activities
at every channel
More to come
1313
2019 ICUK
Coverage expansion from current customerReceived confirmation on more stores to be listed
Marketing ActivityUtilise our assets, Carabao Cup
250 stores (Mar’19)
16 stores (2018)
350 stores (2018)
+220 in chiller (220 Stores, Jan’19)
+330 Petrol stations (Feb’19)
676 Stores (Mar’19)
376 Stores (2018)
>700 Stores (in 2019)
N/A (2018)
3rd year consecutive operation in the UK with strategy to focus on selective channels with high margins and to exploit maximize benefits on spending under provided budget
1414
2019 CHINAChinese energy drink market grew by 7% YoY (value) in 2018
Source: JV China company
CARABAO shares in China’s energy drink market Carabao Promoters: Instructive force to create trial
Target distribution mix in 2019 CARABAO PROMOTERs (สาวบาวแดง)’ Manpower Plan
JV China to begin promisingly yet challenges remained ahead
Strategies adapted to changing market conditions
Progress made as a result of current business plan i.e. More focus on below the line activities and penetration into gas station segment
1515
2019 CHINA
1818
Appendix:Corporate Profile
1919
Categories Product Portfolio
Energy drink
Coffee
Others
Company overview Carabao is the 2nd largest energy drink company in Thailand with strong distribution channel and a successful overseas business, which represents c.45% of the total revenue Business overview Product overview
Carabao Sportelectrolyte drink Drinking water
3-in-1 instant coffee RTD coffee drink
Source: 1. Nielsen energy drink market report, December 2018 ("Nielsen Report")
Carabao's market share evolution1
% of Thailand energy drink market share
• Founded in 2001 as a partnership between 3 founders one of which is the leading singer of Carabao (Thai legendary folk band), the Carabao Group is now the 2nd largest energy drink company in Thailand with 23.2% market share1
• Its main product, Carabao Energy Drink, is packaged into amber glass bottles or aluminum cans. Other branded products include bottled water, coffee, Carabao Sport electrolyte drink and other 3rd party products
• Vertically integrated business model - CBG manufactures and distributes its own products, while excess distribution is maximize by distributing 3rd party products
• Carabao has strong in-house production capabilities of glass bottle, and aluminum can (production to commence in Q4 2018)
• Strong distribution channel with presence in both traditional and modern channel
o Over 50 first tier agents
o 31 distribution centers across Thailand
o c. 330 cash vans, covering over 200,000 retailers
• Successfully tapped into global markets
o Strong presence in international markets including Cambodia,
Myanmar, Vietnam, Laos and other countries
o Penetrating into new key strategic countries i.e. China, UK
2020Note: A number of niche positioned brands expanded their consumer groups and thus gained increasing shares in the market,
altogether commanding higher market shares, up to 11% in FY18 from 8% in 2017
78% 84% 84% 90% 91% 91% 90%
Selling Distribution (Coverage)
Significant share of Thai energy drink marketEnergy drink market picked up by 3.9%YoY in 4Q18, driving FY18 +0.2%YoY after two year consecutive contraction during the FY16-FY17
Source: Nielsen report as of Dec’18
2222
Domestic and international business overview
Sales breakdown
Increasing presence in the international market to drive growth
Domestic revenue by products
FY2018 domestic revenue:
THB 7,928m (+1% YoY)
International revenue by products
FY2018 international revenue:
THB 6,476m (+29% YoY)
International revenue by country
FY2018 international revenue:
THB 6,476m (+29% YoY)
Established overseas
business diversifies
dependence on Thailand
2323
FOUNDERS
Founded TawandangGerman Brewery in 1999Founded CarabaoTawandang in 2002
Mr. Sathien Setthasit CEO
Miss Nutchamai Thanombooncharoen Managing Director
Mr. Yuenyong Opakul (Add Carabao)Senior Deputy Managing Director
Managed business with Mr. Sathien since 1999Managing Director of Carabao since inception
Formed the origin of Carabao - the Carabao band - in1977Gathered millions of fans for the brand since
2424
Carabao is Thailand’s legendary music-for-life & one of the most respected band in Thailand
Carabao & Santana in Bangkok 29th Feb. 2016[Est. 1981]
Strong brand recognition associated with Carabao band
Songs for life music are reflections of aspects of Thai society
For over 30 years, Carabao songs have been known to speakto the Thai people in a manner that can easily be related totheir own life experience and provide the hope and strengthto keep fighting.
The result is a truly passionate fan base that are overlappingwith energy drink target groups across the country that livesand breathes the Carabao “Fighting Spirit”.
2525
Shareholding structure
Mr. Sathien Setthasit’sGroup
Ms. NutchamaiThanombooncharoen’s
Group
Mr. Yuenyong Opakul’sGroup
Free Float
34% 23% 14% 26%
Note: (1) CBG’s shareholding in CVHLUX increased from 51.0% to 84.3% effectively on 8 January 2018 due to exercising the right offerings of CVHLUX and converting
shareholders’ loans to equity, in accordance with the Change of Overseas Subsidiaries’ Capital Structure transaction
(2) The remaining portion of 26% is held by Showa Denko Group, a Japanese business partner
Others
3%
Remark: Shareholding portion as of December 28, 2018
Manufactures, markets and sells the Group’s products
Manages the domestic distribution of the Group’s product
Manufactures and supplies glass bottles required for the manufacturethe Group’s product
CBD DCM APG ACM CHHK
CVHLUX
ICUK
CTHK
Manufactures and supplies aluminumcans used as packaging materials for the Group’s Product
Operating Subsidiaries
Holding Subsidiaries
CARABAO GROUP
100% 100% 100% 100% 100%
100%
74% (2)
84% (1)
THAILAND OUTSIDE THAILAND
Registered and Fully Paid-up Capital THB 1,000 Million
Distribution, selling and marketing in the UK and outside-Asia
International trading arm
2626
Management TeamINSTRUMENTAL TO BUILDING COMPANY’S SUCCESS
1. People: Develop our people with good attitude, willingness to learn, innovation, accountability
2. Work System: Execute with concise and international standard work system
3. Organization & Management: Operate with clear objective and understandable responsibility, proper organization structure, and project-based approach
4. Technology: Embed technology and innovation in our processes through production, management, sustainability development
5. Product: Produce quality and well-known world class product
6. Brand: Be wealthy and modern world class brand
7. Corporate Image: Be known as world class organization with good governance and social responsibility
MISSION
VISION
World Class Product, World Class BrandMr. Sathien SetthasitChief Executive Officer
Co-Founder of the Group in 2001
Ms. Nutchamai ThanombooncharoenManaging Director
Co-Founder of the Group in 2001
Mr. Yuenyong Opakul (Add)Senior Deputy Managing Director• Co-Founder of the
Group in 2001• Lead singer of
Carabao• Brand Ambassador of
Carabao energy drink
Mrs. Wongdao ThanombooncharoenSenior Deputy Managing Director
Been with the Group since 2008
Mr. Kamoldist SmuthkochornDeputy Managing Director – Marketing
Been with the Group since 2002
Mr. Pongsarn KhlongwathanakithChief Financial Officer
Joined in 2015, from CIMB Investment Bank
Mr. Kartchai Jamkajornkeiat Assistant Managing Director –Production/ Int’l BusinessBeen with the Group
since 2012
Mr. Romtham SetthasitDeputy Managing Director – Int’l Business
Been with the Group since 2015
2727
Key Milestones and Developments
NO. 1 Challenger
2004 Began
exporting to 15 countries
Oct 2002 Carabao Dangwas launched
2012 DCM established as a
distributor for Carabao products
2013 APG manufactured glass bottles for Carabao products
2004 In 18 months of the launch, Carabao overtook Krating Daeng position to
become the No. 1 challenger in the market
2014 Start Plus Zinc an electrolyte beverage was
launched; renamed to Carabao Sport in 2018
Nov 2014 Carabao Group began
trading in Stock Exchange of Thailand
2015 Start establishing own distribution centers
with a national coverage of 300,000 outlets
Jul 2016 Carabao 3in1 Coffee
was launched
Oct 2016 Carabao RTD Coffee
was launched
2016 Carabao Drinking Water was
launched
2015
Sponsorship of Chelsea F.C.
June 2017 Sponsorship of the
EFL Cup; The Carabao Cup.
Mar 2017 APC established as a JV with SHOWA to produce
aluminum cans
June 2018 Carabao Green
Apple was launched in Thailand
2828
Manufacturing facilities
Energy drink production facilities
• 11 production lines
• Prod. Cap. of 1,800 million bottles p.a.
• 7 production lines
• Now: Prod. Cap. of 1,400 million cans p.a.
Bottles filling
Cans filling
• Prod. Cap. of 1,300 million bottles p.a.
• Maximum molten glass production of 310X2 tons per day
APG glass bottle manufacturing facility
ACM Aluminum can manufacturing facility
• Prod. Cap. of 1,000 million cans p.a.
• To be commercialized in 4Q2018
• Technology knowhow supported by Showa Denko Group, a leading aluminum company from Japan
(JV with Showa Denko Aluminum Can)
Certifications:
Certifications:
State-of-the-art manufacturing facilities to ensure safe and efficient production
Plant location: 50 KM from central Bangkok
2929
Dedicated in-house marketing team has established strong relationships with multiple media channels, enabling us to react to market trends and minimize lead time and costs
Flexible uses of multimedia channels to reach target consumers: media advertising, on-the-ground marketing team, brand ambassador and event sponsorships
Global marketing platform via international football sponsorships to widen windows of opportunity in global stage
Below the Line
On-ground marketing
More than 80 BaoDangGirl Teams, consisting of c.600 members, promote social activities
Brand Ambassador and events sponsorships
Celebrity spokesperson promoting our brand, as well as enhancing corporate image
Contributes significantly in establishing our brand
Regularly sponsor events which appeal to target consumers
Above the Line
TV commercials for wider reach
Print ads in magazines, newspapers and posters
Marketing Channels
3030
End Consumers
Carabao Group
1. Traditional Trade – 80%1
2. Modern Trade – 20%1
3. Importers, Distributors, International Dealers
Domestic Market – c.55%1
International Market – c. 45%1
End Consumers…
… …
Tier 1
Tier 2Tier 2
Tier 3Tier 3 Tier 3
Retailers
Convenience stores, Supermarkets, Hypermarkets
Traditional retail shops
~ 50 agents
~ 500-1,000 sub- agents
Note: (1) Sales Figure, 12M2018
(2) Launched in Q2/15 . Reach 31 distribution centers in March 2017
B. Cash Vans – 30%2
A. 3-tiered agent distribution network – 50%
• 31 DCs • 328 Vans• 180,000 identifiable retailers
Strong distribution network covering both modern and traditional channels with unique cash van strategy
Comprehensive Distribution Network
3131
7 DCs
9 DCs
3 DCs
W
31 DCs with 328 Vans, covering approx. 180,000 registered retailers nationwide
4 DCs
2 DCs
6 DCs
Note : Base on Information at December 2018
Cash Vans & DCs nationwide
3232
Carabao Energy Drink
(Original)
Carabao Energy Drink (Original
Export)
CarabaoCarbonated
Carabao Ginseng Edition
Carabao Carbonated (Original)
Carabao Carbonated
(Sugar Free)
CarabaoCarbonated
(Green Apple)
Carabao Energy Drink
(The PRC Market)
CarabaoCarbonated (Mandarin Orange)
• 150ml amber glass bottle
• Flat taste
• Caffeinated + 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
• 250ml aluminum can
• Non-Carbonated
• 325 ml aluminum can
• Carbonated
• Caffeinated + Multivitamins
• Orange Flavour
Domestic (mainly)
Export Only Export in Asia First market: Afghanistan
First market: UK First market: UK First market: UK The PRC Market First market: UK
October 2001 2004 May 2015 February 2016 April 2016 August 2016 October 2016 March 2017 April 2018
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 6 CNY 1.19 GBP
Our Product Portfolio (Energy Drink SKUs)
3333
Products Carabao SportCarabao
Drinking WaterCarabao 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
Our Product Portfolio (Non-Energy Drink SKUs)
3434
Products Seaweed Dish Washing Liquid
Peanuts Toothbrush Razor Juice Fabric Softener
Squid Snacks
Retail Selling Price (THB)
5 10 5 10 10 10 10 5
Launch Date
November 2015 April 2016 June 2016 July 2016 August 2016 September 2016
Products Toilet Cleaner Tissue Detergent Canned fish Coconut Nectar
Bandages
Retail Selling Price (THB)
25 5 10
Launch Date
October 2016 December 2016 December 2016
October 2017
January 2018 October 2018
Note: As of December 2016
3rd Party Products for distribution
3535Note: Based on an assumption of THB 31.50 = 1 USD
Statistic Information
Carabao Group PLC. As of 27 February 2019 Closing Price: THB 55.00
Ticker SET: CBGReuter: CBG.BKBloomberg: CBG:TBGoogle Finance: BKK:CBG
Listing date 21 November, 2014Listing Venue SET F&B, SET50Par Value 1 BahtShares outstanding (mil.) 1,000Market Cap. THB 54,750mn/USD1.7 bn52 weeks High/Low THB 66.75 / THB 29.25Free Float 25.91%Foreign Limit 49.0%Dividend policy at least 40% of consolidated net profitEPS (TTM) THB 1.16P/E (TTM) 47.3xP/BV 7.6xDividend Yield 1.5%Auditor: EYBoard of Directors 9 members (4 independent)
3636
WORLD CLASS WORLD CLASS
Carabao Group Public Co., Ltd.
Tel: +66 2636 6111 Ext.882
Email : [email protected]
www.carabaogroup.com/en PRODUCT BRAND
Investor Relations
