Strictly Private & Confidential Carabao Group Public Company Limited Opportunity Day FY17 0 Mar 2018
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 of information currently available and obtainable, 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
2017 Business Highlights & 2018 Looking Forward 2
2017 Performance Analysis: With VS Without ICUK ICUK and Global Football Sponsorship: a strategic investment to build our footprint in global stage Ex-ICUK & football sponsorship vs Incl. ICUK (Proportionate to 51% CBG’s stake holdings) & CBG’s portion of sponsorship 3
Non-ICUK profitability – domestic business (1/3) Non-ICUK profitability – domestic business (1/3) Portfolio expanded and new product groups took turn serving as the key driver to domestic sales growth in 2017 New product groups i.e. other branded products and 3rd-party products led the way to an 18.6% • increase yoy, accounting for 22.3% of domestic sales Wider range of 3rd-party products alone pushed sales up THB 310mn yoy, thanks to the white spirit • Channel-wise, cash van turned in a powerhouse where most of the growth and pricing upside are • driven through By Products as a % of FY2015 Domestic Sales By Product as a % of FY2016 Domestic Sales 100.0% 11.2% 0.9% 4.3% 3.6% 120.1% 100.0% 0.6% -1.5% 10.6% 9.2% 119.0% 606 699 41 195 238 51 614 (99) Branded Branded OEM, OEM, Branded Branded 12.0% 5,477 6,576 6,576 7,822 3.6% OWN, OWN, 3rd-party 3rd-party 77.8% 93.4% Products, Products, 10.3% 3.0% 2015 Energy Sports Other 3rd-party 2016 2016 Energy Sports Other 3rd-party 2017 Domestic Drinks Drinks Branded Products Domestic Domestic Drinks Drinks Branded Products Domestic Sales Products Sales Sales Products Sales Note: Pie charts represent annual sales derived from individual product groups as a % of domestic sales in respective finanical reporting period 4
Non-ICUK profitability – domestic business (2/3) Strategic diversification and growth potential are the two compelling factors weighed positively against possible drop in near-term gross profits margin Fast growing products namely coffee and white spirit came to shoulder our own energy drinks that • had been faced with rising production costs over the year 3rd-party products were blended with differing margin and their return are considered accretive • By Products as a % of FY2015 Domestic Gross Profits By Product as a % of FY2016 Domestic Gross Profits 100.0% 10.4% 0.8% 1.8% 1.4% 114.5% 100.0% -4.0% -1.2% 3.3% 2.6% 100.7% 31 38 63 18 221 79 (97) (28) Sports Sports Drinks 0.6% Drinks 1.7% Branded Energy Energy 2,123 2,430 2,430 OEM 4.8% 2,447 Branded Drinks Drinks OEM 1.5% 3rd-party 95.5% 90.9% Products 3.8% 3rd-party Products 1.3% 2015 Energy Sports Other 3rd-party 2016 2016 Energy Sports Other 3rd-party 2017 Domestic Drinks Drinks Branded Products Domestic Domestic Drinks Drinks Branded Products Domestic GP Products GP GP Products GP Note: Pie charts represent annual gross profits from individual product groups as a % of total gross profits in respective finanical reporting period 38.8% 37.0% 31.3% 39% 28% 16% 16% 37% 28% 13% 12% 5
Non-ICUK profitability – domestic business (3/3) Energy drinks were put under margin pressure due to rising costs of amber glass container and sugar content despite our modest gain from the new excise tax regime + New excise tax regime booked us • with cost saving of 0.11 THB for every bottle sold domestically at least until 2 years from now + Our cluster of vertically integrated • manufacturing units in Bangpakong intended to reduce energy and operating costs going forwards + Sugar price set free in line with global • market mechanism has tendency to benefit us • Amber glass bottle became more - costly due in large part to increased price of cullet and hit gross profits margin by 1-2% We expect depreciations to total • - +500 THBmn in 2018, up from 263 THBmn in 2017 6
Export Business Profitability Export sales made a further jump on the back of both existing and new markets CLMV soared a further 29.4% growth, led by Cambodia that broke record high during the last quarter • with volume sold up from 28 to 40 million cans sold in Dec • China market shining out with a total of 1,019 THBmn in export sales this year is expected to play a vital role tin and by all means By country as a % of FY2016 Export Sales 100.0% 22.3% 30.4% -8.5% 44.1% 5.6% 149.7% 1,019 187 1,481 (286) 747 China 20.3% 3,356 5,024 Afghanistan CLMV CBD & Yemen ICUK 65.6% 96.0% 4.0% 9.6% UK and Outside Others, Asia 4.0% 0.5% 2016 Export Sales CLMV China Other Existing Export by CBD Export by ICUK 2017 Export Sales Markets Note: Pie charts represent annual sales derived from key export markets as a % of export sales in respective finanical reporting period 7
2017 SG&A Analysis - Conso Marketing (THBmn) Selling (THBmn) Admin (THBmn) Sponsorship +413 (Non-ICUK THB 30mn, ICUK THB Cash Van Expenses +c.100 Services & Fees Expenses +54 (due 393mn) to Consulting Fees 15 THBmn) Above-the-line Mktg +40 (due to initial launch of branded Moving & re-installation production coffee products = 68 THBmn) lines 40 THBmn Listing Fee (ICUK) +54 Other marketing expenses (ICUK) +156 8
China Looking-forward: 2018 Market Stimulus Plan POS and Marketing Plan Business Status: 26 Branches (Up by 2 Branches) c. 900 Staffs Marketing Timeline 9
China Looking-forward: 2018 Focusing Strategy 8-3-3-3 Strategy Fujian 2. Nanping 1. Fuzhou 3. Putian 10 10
2017 UK Development Increasing visibilities prompt us to move on to the next step Current Customers Q1 2017 Q2 2017 2016 Q3 2017 Q4 2017 More facings in modern trade channels 11 11
UK Looking-forward: 2018 Investment Phase to create fans Potential Customers Product Differentiations Engaging Marketing Campaign: Continue our distinguish position of 2018 To match digital-lifestyle consumers with successful flavours initiation reasonable expenses The Bonkers Drink for Bonkers Lives NEW - Listed in Jan’18 - To be on-shelf in Mandarin Orange Apr’18 on shelf (F) 2Q2018 - To be listed in Jul’18 - In negotiation 12 12
UK Looking-forward: Driving Stronger Sales with Push & Pull PUSH Retail Wholesales 13 13
UK Looking-forward: Driving Stronger Sales with Push & Pull PULL 14 14
Looking-forward: 2018 Continue to utilize our global asset investments Potential Export Countries Windows of opportunity are widening thanks to Carabao Cup Global Marketing Platform From ICUK Status: Done Status: Early Negotiation Azerbyjan Germany From CBD Ghana Belgium/Netherland France Balkans Region Status: Done Status: Early Negotiation Peru (Slovenia, Croatia, Bosnia) Australia Turkey Denmark KSA (Arabian Region) Nigeria Received Interest Romania India Macedonia Switzerland/ Austria Received Interest Honduras Senegal Philippines Nepal 15 15
2017 Business Highlights Reaping Carabao Group’s Assets Carabao Dang Assets of CBG hold a strong customer base (+0.3%YoY) amid the Thai energy drink market shrink of -2.7%YoY RTD Coffee Quality Product Strong Brand received overwhelming demand reaching maximum production capacity of OEM supplier at c.8-9 million cans per month 3 rd Party Products Cash Van Extensive Internal driven by new key product i.e. BaoDang Distribution System Spirits – 1 st time sold in Apr’17 ) Ladies Girls Export markets CLMV: +29% sales growth New market: China 1 st time export in Feb’17, Product Global Marketing Differentiation Platform now contributing to c. 20% of total Overseas Revenue in FY2017 ICUK Expansion Updates: Increasing visibilities in nationwide Bottling Capacity: c.1,800 mn bottles/ modern trades; reaching c. 20,000 year (1Q18) POS vs 8,000 POS in FY2016 Canning Capacity: c.1,400 mn cans/ Production facilities year (since Dec’17) ready for larger sales of Carabao energy Amber Glass Bottle Capacity: c. 1,300 drink in both domestic and export markets mn bottles/year (since Dec’17) 16 16
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