Hot Pot Public Company Limited Presentation
As of November 21 , 2013
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Agenda
• Company Overview
• Business Strategies
• Future Projects
• Financial Highlights
• Q&A
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Company Overview
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Company Profile
Company • Hot Pot Public Company Limited (“Hot Pot” or the “Company)
Registered Capital • Common shares : THB 101.5 mm comprise of 406.0 mm shares at par value of THB 0.25 per share
Paid-up Capital • Common shares : THB 101.5 mm comprise of 406.0 mm shares at par value of THB 0.25 per share
Establishment • Operated since 1995 and registered as Hot Pot since 2004
Business• Chain restaurant operator under brand “Hot Pot” and “Daidomon” offering variety of food such
as international buffet, suki shabu, Japanese noodles , and yakiniku
Address • 350 Ram Indra Rd, Ta Rang, Bangkhen, Bangkok, 10230
Number of employee • Over 3,400 persons
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Major Development
1995• First Suki Shabu restaurant namely “Coca Fresh Suki” was opened in Tawanoak Complex in Chachoengsao
province
2001 • Changed restaurant brand from “Coca Fresh Suki” to “Hot Pot Suki Shabu Restaurant”
2005
• Expanded international buffet restaurants in shopping malls
− First international buffet with suki and shabu restaurant in Central Rama II under name “Hot Pot Inter Buffet”
2006 • Aureos Southeast Asia Fund and Government Saving Bank Private Fund invested in the Company
2011
• Acquired business and sauce from Daidomon which has 25 outlets in total with central kitchen
• Converted into a public company and changed the Company’s name to Hot Pot Public Company Limited
• Increase its registered capital to THB 101.5 mm with paid up capital of THB 86.2 mm
2004• Established Hot Pot Company Limited on 28 January with registered capital of THB 16 mm
• Increased its registered capital to THB 56.0 mm in October
2007 • Developed food production factory and central kitchen in Prathumthani province
September 2013
• Has 143 restaurant outlets in total as of September 30, 2013 comprise of 122 outlets under Hot Pot brand (not including franchise) and 21 outlets under Daidomon brand
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Shareholder’s Structure and Management
Board of Directors
Audit Committee
Executive Committee
Chief Executive OfficerMr. Sompon Roekwibunsi
Internal Audit
Deputy Chief Executive OfficerMs.Sakuna Baicharoen
Company Secretary
Chief Financial OfficerMr. Wisit
Wachiralappaitoon
Chief Operation OfficerMr. Sompon Roekwibunsi
Chief Administration OfficerMr.Somchai Roekwibunsi
Management Structure
Name of management Position
1 Mr. Metta CharuchindaChairman, Chairman of the Audit
Committee and Independent Director
2 Mr.Sompon Roekwibunsi Director
3 Ms.Sakuna Baicharoen Director
4 Mr. Somchai Roekwibunsi Director
5 Mr. Supakrit MekpanuwatAudit Committee and Independent
Director
6 Mr. Amornsakdi KetcharoonAudit Committee and Independent
Director
Board of Directors as of 30/09/2013
Shareholder as of 28/8/2013
52.50%
47.50%
Mr.Sompon Group Other Investors
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Business Overview
• 122 Outlets Operate by the Company
• 1 FranchiseRights to use the Hot Pot Buffet Value trademark
Hot Pot Inter Buffet Hot Pot Buffet Value
Hot Pot Prestige Hot Pot Suki Shabu
Hot Pot Ramen Buffet
As of 30 September 2013
International Buffet Restaurant
With the concept of “All You Can Eat” that offers international buffet e.g. Chinese dim sum, Japanese noodle , sushi, shabu and western salad under Hot Pot’s 5 trademarks
Yakiniku Buffet Restaurant
Hot Pot has recently acquired Daidomon in Q4 2011
• 21 Outlets Operate by Hot Pot under Daidomon brand with buffet concept
As of 30 September 2013
http://www.hotpot.co.th/brand.php?bid=91http://www.hotpot.co.th/brand.php?bid=89http://www.hotpot.co.th/brand.php?bid=88http://www.hotpot.co.th/brand.php?bid=90http://www.hotpot.co.th/brand.php?bid=87
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1. Hot Pot Inter Buffet
Hot Pot Inter Buffet : International buffet restaurant that offers Sukiyaki, Shabu, and over 100 menus of international dishes e.g. dim sum, fried rice, yakisoba, teppanyaki, sushi, tempura, steak, salad bar, fruit, ice-cream and dessert, as well as seasonal menus and menus for special events
• Adult THB 339 / Child 159 THB
Time limit of 1 hour and 30 minutes
• 44 outlets in leading shopping complexes which attract middle to high income earners, such as Central, The Mall, and Seacon Square
• 3 outlets of HD (Hot Pot Inter Buffet and Daidomon)
Note: Buffet price and number of outlets as of 30 September 2013
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2. Hot Pot Buffet Value
Hot Pot Buffet Value : International buffet restaurant similar to Hot Pot Inter Buffet but Hot Pot Buffet Value positions itself in the lower market while maintaining the same quality of food and service. It has less variation of menu compared to Hot Pot Inter Buffet but emphasizes on the value by setting a lower price
• Adult THB 319 / Child THB 149
No time limit 37 outlets, Time limit of 1 hour and 30 minutes 34 outlets.
• 71 outlets in small shopping complexes and modern trade stores in the community with moderate income level
Note: Buffet price and number of outlets as of 30 September 2013
http://www.hotpot.co.th/brand.php?bid=87
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3. Hot Pot Ramen Buffet
Hot Pot Ramen Buffet : New Japanese-style ramen restaurant that offers new experience and value for customers with fine and rare ingredients buffet line, such as, Hokkaido squid, Tilapia, Shabu roasted pork, imitated crab claw, Siberian pork, seasoning minced pork, Wakame seaweed, and variety of sushi
• Adult THB 289 /Child THB 149 No time limit
• 1 outlet at Central Rama II
Note: Buffet price and number of outlets as of 30 September 2013
http://www.hotpot.co.th/brand.php?bid=90
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4. Hot Pot Prestige
Hot Pot Prestige: International buffet and Sukiyaki and Shabu restaurant with a five-star luxurious hotel atmosphere offering a variety of international dishes that are carefully selected and prepared by professional chefs in each area of expertise. Hot Pot Prestige positions itself above all other Hot Pot trademarks
• Adult THB 499/ Child 259 No time limit
• 1 outlet at Central Bangna
Note: Buffet price and number of outlets as of 30 September 2013
http://www.hotpot.co.th/brand.php?bid=88
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5. Hot Pot Suki Shabu
Hot Pot Suki Shabu : An A La Carte type of Sukiyaki and Shabu restaurant which renowned for its delicious Hot Pot’s traditional sauce
• 2 Outlets
In Surin and Buriram provinces
Note: Number of outlets as of 30 September 2013
http://www.hotpot.co.th/brand.php?bid=89
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6. Daidomon
Daidomon Bar-B-Q and Japanese restaurant, focusing on Yakiniku buffet with variety of additional side dishes apart from Yakiniku menu. Daidomon restaurant has been established since 1983 with its first outlet at Siam Square
Currently, there are 2 buffet price under Daidomon brand as follows;
1) Original store with buffet lineAdult THB 289 / Child 149 (price exclude drinks) No time limit
2) New concept store with buffet line Adult THB 339 / Child 159Time limit of 1 hour and 30 minutes
However, the Company will continue to major renovate all existing Daidomon outlets to be new concept store
• 21 outlets in leading shopping complexes
Note: Number of outlets as of 30 September 2013
http://www.daidomon.co.th/gallery_view_catelogy.php?category_id=19&filename=menu_daidomonhttp://www.hotpot.co.th/brand.php?bid=91
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Daidomon New Concept store
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Daidomon New Concept store
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Business Strategies
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Industry Overview
Total Revenue of Restaurants , Food and Drinks Business
• Total revenue of restaurants, food and drinks industry grew continuously from 2006 to 2011 with CAGR of 11.58%
• The industry revenue declined in 2009 due to domestic political unrest and US financial crisis, which affected many countries globally. However, the industry revenue in 2010 bounced back to the normal growth rate due to the economic recovery
• Franchise restaurants offering fast food
• Fried chicken, hamburger, pizza, donut, ice-cream, etc.
Types of Restaurants, Food and Drinks Business in Thailand
Quick Service Restaurant
• Luxurious restaurants offering foreign food
• Japanese, Korean, Italian restaurantsFine Dining
• Moderately decorated restaurants with comfortable atmospheres and reasonable prices
Casual Dining
Source: Business Online Co.,Ltd.
• Small food and drinks business with lower investment and shorter payback period compared to other types
Retail
• Hot Pot is classified as ”Casual Dining” restaurant
• Restaurants classified in the same category as Hot Pot with similar products offerings are MK Restaurant, Coca Suki, Texas Suki, Shabushi, Shukishi, Oishi Ramen, Hachiban Ramen and BBQ Plaza
• In 2011, top 50 of industry had total revenue of THB 75,892 mm, which accounted for 63.48% of total industry revenue
• Hot Pot has total revenue of THB 1,476.72 mm in 2011, which is ranked at no. 11 in the industry
THB
mm 69,118
79,038
88,391 85,544
100,400
119,548
-
20,000
40,000
60,000
80,000
100,000
120,000
2006 2007 2008 2009 2010 2011
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Target Customers
Type of Restaurant Target Customer
BrandPrice
(Baht/Person)Target Group Lifestyle Income Level
1. Hot Pot Inter BuffetAdult 339Child 159
Teenager, Student,Working group and
family
Convenience, Independence, Worthiness and
group party
Medium
2. Hot Pot Buffet ValueAdult 319Child 149
Lower Medium to Medium
3. Hot Pot Ramen BuffetAdult 289Child 149
Lower Medium to Medium
4. Hot Pot PrestigeAdult 499Child 259 Working group and
family
Medium to Upper Medium
5. Hot Pot Suki Shabu A La Carte Medium
6. DaidomonAdult 289 and 339Child 149 and 159
Teenager, Student,Working group and
familyMedium
Note : Price as of 30 September 2013
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Pricing Strategies
Price is set by considering costs of raw materials and services, as well as the price comparisons with comparable competitors
Price is set at affordable values to emphasize on price worthiness by mainly considering costs of raw material and services, economic condition, as well as purchasing power of target customers
Price is set at premium with values of carefully selected raw materials and luxurious atmosphere
Hot Pot Inter Buffet Hot Pot Prestige
Hot Pot Buffet Value
Hot Pot Ramen Buffet
Hot Pot Suki Shabu
Price is set by considering costs of raw materials and services, price comparisons with comparable competitors and current economic condition
In addition, the Company also set condition for buffet customers. If the customers cannot finish the food, the customers have to pay additional of THB 50 per person
Daidomon
Pricing strategy is similar to Hot Pot Inter Buffet
Currently, there are 2 buffet price depending on outlet concept. However, after major renovation, there will be all new concept store with a single price
http://www.hotpot.co.th/brand.php?bid=91http://www.hotpot.co.th/brand.php?bid=89http://www.hotpot.co.th/brand.php?bid=88http://www.hotpot.co.th/brand.php?bid=90http://www.hotpot.co.th/brand.php?bid=87
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Competitive Strategies
Quality, freshness, variety, tasteness, good service and reasonable prices
Cover across wide market segment
Outlet expansion at modern trades and shopping complexes
Product and recipe creativity as well as introduction of new promotional menus
“Buffet on Bar” concept
Focused marketing to attract target customers
Sale promotion activities
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Outlets
All outlets are located in shopping complexes, modern trade, community malls in Bangkok and metropolitan area
Hot Pot Daidomon Total
Bangkok and metropolitan Area
50 10 60
Provincial Area 72 11 83
- Center 4 - 4
- North 21 2 23
- East 13 - 13
- North East 20 5 25
- West 7 1 8
- South 7 3 10
Total 122 21 143
Distribution of all domestic Hot Pot and Daidomon Restaurants Total of 143 outlets as of 30 September 2013 1. Hot Pot Inter Buffet 47* Outlets
2. Hot Pot Buffet Value 71 Outlets
3. Hot Pot Ramen Buffet 1 Outlet
4. Hot Pot Prestige 1 Outlet
5. Hot Pot Suki Shabu 2 Outlets
6. Daidomon 21 Outlets
Total 143 Outlets
* Include 3 outlets of HD (Hot Pot and Daidomon)
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Outlets Expansion
Number of Outlets Brand
Total
2008 2009 2010 2011 2012 Q3 /2013
19 16 20 24 40 44
1 3
37 52 54 73 72 71
4 3 1 1 1 1
13 5 2 2 2 2
4 1 1 1 1 1
- - - 24* 21 21
77 77 78 125* 138 143
Hot Pot initiated its strong expansion effort in 2011
*Acquisition in Dec 2011
http://www.hotpot.co.th/brand.php?bid=91http://www.hotpot.co.th/brand.php?bid=89http://www.hotpot.co.th/brand.php?bid=88http://www.hotpot.co.th/brand.php?bid=90http://www.hotpot.co.th/brand.php?bid=87http://www.hotpot.co.th/brand.php?bid=91
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Centralised Procurement Process
Supplier Selection
Procurement department evaluates suppliers as supplier selection policy
Product Development department approves product quality
Procurement department proposes supplier names to committee
Pass
Procurement Process
Product Preparation
All products are distributed to all outlets by trucks and vans as follows: • 13 vans• 3 6-wheels trucks• 3 4-wheels trucks
1 32
4Quality and quantity inspection, Inventory on warehouse and waiting
for distribution
OrderingCount Inventory at the end of day and
register on procurement
system
Product InspectionBeverage and Ice Cream
Distribution
Check all inventories on warehouse Print
PR Print
PO
General Products
Outlet WarehouseProcurement
dept.Supplier
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Factory
Factory (Main Kitchen) : Located on 11/1, Boungkumploy, Lumlooka, Pathumthani in 13-0-96 rai area size
Certificate on GMP Standard (Good Manufacturing Practice) and HACCP Standard (Hazard Analysis & Critical Control Points)
Factory is responsible for control such as fresh food, dried food, ingredient, and instant food in order to distribute to allHot Pot outlets.
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Production Line
Ingredient Preparation
Raw Material PreparationMixed raw material
with ingredientTransformation and
decorationCooking by boiling or/and steaming
PackagingPreserving in Cooling
Storage
Evaluated and approved
New Product
Existing Product
Sealing
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Future Projects
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Progress of Acquired Daidomon
• Closed 10 outlets• Rebranded to HD 3 outlets
Purchased 25 Outlets
• Operating 12 outlets• Completely Renovated 9 outlets• Renovating 1 outlets• Not Renovated 2 outlets
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Expansion Plan
Expansion and renovation of Hot Pot and Daidomon restaurants
5-year plan
- Hot Pot plans to expand approx. 20 - 25 outlets per year
- CAPEX per outlet is approx. THB 7-9 mm depending on the location
Year 2013
New expansion of 14 outlets Jan – September 14 outlets- Bangkok and Metropolitan 4 outlets- Upcountry 10 outlets
Renovation of 6 outlets Jan - September 6 outlets- Bangkok and Metropolitan 5 outlet- Upcountry 1 outlet
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Financial Highlights
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Financial Highlights
• Over the past 4 years, Hot Pot has shown a high CAGR sales growth of 29.52% from 2009-2012 highlighting its strong performance.
• Key contribution comes from Hot Pot Buffet Inter and Hot Pot Buffet Value, together accounting for approx. 80% - 90% of sales. Starting from 2012, Daidomon has generated sales, accounting for 10% of sales.
• Gross profit margin stood at around 53% – 56%.
THB
mm
THB
mm
Sales Gross profit and gross profit margin
862
1,130
1,457
1,873
1,386
1,750
2009 2010 2011 2012 9M2012 9M2013
HD 37
Daidomon 10 194 148 204
HP Ramen Buffet 7 9 11 11 8 9
HP Suki Shabu 94 44 38 36 28 26
HP Prestige 75 63 40 34 26 25
HP Buffet Value 368 611 817 877 660 718
HP Inter Buffet 318 403 541 721 517 732
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
460 620 795 1,049 805 986
53.3%
54.9%54.6%
56.0%
58.1%
56.4%
52.0%
53.0%
54.0%
55.0%
56.0%
57.0%
58.0%
59.0%
-
200
400
600
800
1,000
1,200
2009 2010 2011 2012 9M2012 9M2013
Gross Profit
Gross Profit Margin
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Financial Highlights
EBIT and EBIT margin
THB
mm
EBITDA and EBITDA margin
THB
mm
• EBIT margin stood at 2.2% as of end 2012, a decline from 5.0% in the previous year due to the Daidomon operation, adjusted the wage as per the
policy of the government, Investment on human recourse for supporting the Company’s growth. EBIT in 9M 2013 has been improved.
• EBIT and EBITDA in 9M 2013 was increased by 17 MB and 38 MB or 33.9% and 25.6%, respectively, compared to 9M 2012.
EBITDA EBITDA MarginEBIT EBIT Margin
2 57 74 41 50 67
0.3%
5.0% 5.0%
2.2%
3.6%3.8%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
0
10
20
30
40
50
60
70
80
2009 2010 2011 2012 9M2012 9M2013
69 130 162 173 149 187
7.9%
11.4%10.9%
9.1%
10.7% 10.7%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
0
50
100
150
200
2009 2010 2011 2012 9M2012 9M2013
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Financial Highlights
Net profit and net profit margin
THB
mm
Cash flow from operation
THB
mm
• Net Profit 2012 was decrease due to rising costs expenditure and one time expenses.
• Currently, the company has measures for control costs . Therefore, Net Profit in 9M 2013 was 45.9 MB, an increase of 13 MB or 39.5% from 9M 2012.
• In terms of cash flow, Hot Pot generates strong operating cash flow which reflects growth prospect of the company
Net Profit MarginNet Profit
86
147
230
119
90
238
0
50
100
150
200
250
2009 2010 2011 2012 9M2012 9M2013
-11 34 48 23 32.9 45.9
-1.3%
2.9%
3.2%
1.2%
2.4%2.6%
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
-20
-10
0
10
20
30
40
50
60
70
2009 2010 2011 2012 9M2012 9M2013
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Financial Summary (THB mm)
2009 2010 2011 2012 9M2012 9M2013
Sales 862 1,130.3 1,456.8 1,872.8 1,385.9 1,750.3
Sales Growth 31.13% 28.89% 28.56% 26.29%
Other Income 8.5 12.4 27.6 35.3 28.8 24.4
Total Revenue 870.5 1,142.7 1,484.4 1,908.1 1,414.7 1,774.7
COGS 402.4 510.3 661.4 824.1 609.7 788.3
Gross Profit 459.6 620.1 795.4 1,048.7 805.0 986.4
Gross Profit Growth 34.90% 28.29% 31.85% 22.53%
Gross Profit Margin 53.32% 54.86% 54.60% 56.00% 58.08% 56.36%
EBIT 2.5 57.1 74.1 40.6 50.2 67.2
EBIT Growth 2184.00% 29.77% -45.21% 33.86%
EBIT Margin 0.29% 5.00% 4.99% 2.13% 3.62% 3.84%
EBITDA 69.1 130.2 161.7 173.1 148.8 186.9
EBITDA Growth 88.42% 24.19% 7.05% 25.60%
EBITDA Margin 7.94% 11.39% 10.89% 9.07% 10.74% 10.68%
Net Profit -11.4 33.6 47.6 23.3 32.9 45.9
Net Profit Growth -394.74% 41.67% -51.05% 39.51%
Net Profit Margin -1.31% 2.94% 3.21% 1.22% 2.37% 2.62%
Total Assets 363.4 388.4
698.0 834.7 870.5 885.6
Total Liabilities
312.6
304.0
488.0
451.7 464.2
473.1
Total Equity 50.8 84.4
210.0
383.0 406.3
412.6
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Selling Expense (MB)
Admin Expense (MB)
SG&A (MB)
Total 800.1 MB9M2013
Total 105.2 MB9M2013
393
507
659
900
659
800 49
53
74
125
82
105
11
11
14
14
11
10 52.0%
49.9%
50.6%
52.9%
53.1%
51.6%
40.0%
42.0%
44.0%
46.0%
48.0%
50.0%
52.0%
54.0%
-100
100
300
500
700
900
1,100
2009 2010 2011 2012 9M 2012 9M 2013
Mgt remuneration
Admin exp
Selling exp
%SG&A/Revenue 219 ; 27.4%
256 ; 32.0%
101 ; 12.6%
97 ; 12.1%
55 ; 6.9%
72 ; 9.0%Rental
Staff compensation
Depre & amortization
Utilities
Mktg.
Others
74; 70.0%
13 ; 12.4%
19 ; 17.6% Staff compensation
Depre &
amortizationOthers
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Liability & EquityAsset Breakdown
• Current Ratio: 0.29 times • Debt/Equity Ratio: 1.14 times
• Debt Service Coverage Ratio: 2.84 times
THB 885.6 mm
9M 2013 THB 885.6 mm
9M2013
2.1%8.5%
65.2%
9.2%
13.8%
1.1%
Cash
WC&Other current
assets
PP&E
Leasehold Right
Deposit Guarantee
Oth non current assets
23.1%
9.4%
8.1%
7.5%5.3%
46.6%
A/P
Current Portion of
LT Loan
Other Current Liab.
LT Loan
Other Non-current
Liab.
Equity
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Financial Highlight
• D/E ratio has been decreased from 4.14x in 2009 to 1.15x in 9M 2013
• ROA and ROE turned to be positive on 2010
• ROA and ROE in 9M 2013 has been improved to 6.4% and 8.6% as compared to 9M 2012.
Capital structure
THB
mm
ROA and ROE
Equity Debt D/E
313 304
488 451 473
51 84
210 382
413
4.14 3.60
2.33
1.18 1.15
-10.00
-8.00
-6.00
-4.00
-2.00
-
2.00
4.00
0
200
400
600
800
1,000
2009 2010 2011 2012 9M2013
-3.0%
8.9% 7.3%
3.1%6.4%
-20.2%
49.6%
27.8%
7.9% 8.6%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
2009 2010 2011 2012 9M2013
ROA ROE
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Same Store Sale Growth
87 Stores 9M13 9M12 Diff ( +/- ) % Inc./(Dec.)
Sales (MB) 1,126.38 1,058.03 68.35 6.46%
BKK 504.76 470.94 33.82 7.18%
UPC 621.62 587.08 34.54 5.88%
Customer (KHC) 4,195 4,025 170 4.23%
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Q&A
Q&A