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

Opportunity Day 21 st March 2018 1

Agenda • Company Overview • Business Update • Financial Results • Forward Looking 2

Company Overview 3

Our Business 4

Shareholding Structure Nationality No. of % Share Shareholding Gutsche Family Thai 134,775,833 67.65 % Investments Foreign 64,442,167 32.35% Total 199,218,000 100.00% Chirabandhu Note: Foreign limit ≤ 35% Group Aberdeen Small Cap Fund Rattakul Group Others 5

Key Milestones 1974 1949 1988 Sec. Lt. Phairoch Rattakul first HTC was listed in SET entered Thailand assumed leadership of the company 1969 1978 2013 Bottling & distribution Nakornthip changed Manufacturing capability franchise granted to name to Haad Thip expanded to Surat Thani Nakornthip Ltd. province with new Poonpin plant 6

HTC Today • 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 Production plant DC 7

Our Portfolio Sparkling Still 8

South Overview Thailand South NORTH Population (Million) 66.2 9.4 NORTHEAST Population Mix 100% 14% Annual Income per capita* (THB) 112,704 99,612 * 1H2017 source: www.nso.go.th South Key Highlights: � Consist of 14 provinces stretching from Chumporn WEST EAST downwards to the Malaysian border BANGKOK � 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, SOUTH Samui, Satun, Haad Yai � On-going violence in the 4 southernmost provinces: 3 of these 4 areas serviced via Manual Distribution Centre (MDC) agents 9

Business Update 10

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% % Volume Change (Y17 vs. Y16) Total NARTD -5.4% Total Thailand South -4.1% Softdrink -7.4% 0.7% Drinking Water -5.3% -8.8% RTD Juice -8.1% -12.9% RTD Tea -11.8% -8.7% Sport Drink -7.6% -2.8% Energy Drink 0.7% 3.1% RTD Coffee 0.1% -13.8% Asian Drink -14.5% 0.0% Flavour Milk* 1.9% -3.4% Soy Milk -0.5% -2.3% Drinking Yoghurt -1.3% 17.1% Cereal Drink 16.5% 6.3% Tonic Food Drink 12 3.5%

HTC’s volume also declines in 2017 but at a slower rate than the market Vol. Growth by Category +/- Category (Y17 vs. Y16) Sparkling -1.7% Sales Volume (MUC) Water +1.9% Still (excl. water) -2.1% Total -1.5% 53 52 50 47 42 39 2012 2013 2014 2015 2016 2017 +/- vs. PY +14% +10% +12% +5% +6% -1.5% 13

Financial Results 14

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 5,704 due to improved avg. selling price. Whilst, volume dropped 5,671 as a result of contracting NARTD market, severe flood and continual rain throughout Summer in Southern TH. Y16 Y17 Gross Profit Despite declined sales, gross profit increased by 4% 1,835 (GPM improved from 31.0% to 32.4%) , due to higher 1,840 35.0% 1,820 34.0% selling price but lower production cost driven by increase in 1,800 33.0% production capability. 1,769 1,780 32.0% 32.4% 1,760 31.0% 31.0% 1,740 30.0% 1,720 29.0% Y16 Y17 Net Profit Highest record of Company’s profit with improved net 00.00 10.0% profit margin from 4.2% to 5.0%, mainly due to increased 283 9.0% 80.00 8.0% gross profit but stable SG&A exp. (higher admin exp. was 7.0% 60.00 6.0% 241 5.0% offset by lower distribution costs and f/x loss) 40.00 4.0% 5.0% 4.2% 3.0% 20.00 2.0% 1.0% 00.00 0.0% Y16 Y17 15

HTC has been growing its net profit significantly despite slight increased/ dropped sales revenues Net Sales Revenues Y2017 by Quarter 5,704 5,671 • 1H2017: Severe 5,316 flooding in Q1’17 and continual rain throughout summer (MB) • 2H2017: Recovered 1,439 1,449 1,399 1,384 sales volume but still with contracting market constraint Y15 Y16 Y17 Q1 Q2 Q3 Q4 +7% -0.6% -1% -11% +8% +4% • Y16: Full-year operation 283 Y2017 by Quarter of 2 nd injection machine 241 & 3 rd PET line operated Net Profit in Q2’16 (MB) 101 85 • Q2’17: Higher per-unit 73 68 56 cost due to declined volume Y15 Y16 Y17 Q1 Q2 Q3 Q4 • Q3-Q4’17: higher GP mainly from lower per- unit cost as a result of +139% +18% +8% -26% +70% +111% recovered sales vol. 16

Continuously growing profitability Y2017 by Quarter % Gross Profit 33.9% 32.3% 32.4% 31.5% 31.7% 31.0% 27.4% % Net Profit 5.9% 5.0% 4.9% 5.1% 4.2% 4.1% 1.9% 3 1 • Annual salary increase Full-year operation of 2 nd • Recruitment of new talents injection machine and 3 rd PET for future business line was in operational in Q2’16 4 2 Lower production costs from economy of scale (higher volume), • Improved average selling prices resulting in increased profit margin and pack & channel mix 5 • Full-year operation of 3 rd PET line • Flat SG&A exp. • Lower discount to customer • Increased employee benefit to in line with Company’s performance 17

2017 vs. 2016 Lower Assets and Liabilities, Higher Equity Total Assets Total assets decreased by 100MB (-2%) 4708 in 2017 due mainly to lower cash (used 4609 for early repayment of long-term loans), 4466 less inventory (shorter inventory holding day), and decreased other A/Rs (e.g. A/R-Excise Tax Dept.) 2015 2016 2017 Total Liabilities Total liabilities declined by 291MB 2,235 (-13%) vs. 2016 because of no 2,116 significant loan drawdown in 2017, 1,944 while continuing loan repayment. 2015 2016 2017 Total Equity Total shareholders’ equity rose by 2,665 192 MB (+8%) in 2017 from 2,473 increased operating profit and land 2,350 revaluation (+65MB) during the year. 2015 2016 2017 18

Key Financial Ratio Liquidity Ratio 1.05 Current ratio Current and Quick ratio was slightly lower as 0.93 a result of less cash which was used for early 0.70 Quick ratio repayment of long-term loans. 0.62 Y16 Y17 Financial Policy Ratio 0.90 D/E ratio Significant decrease in interest-bearing debts 0.73 (both short and long terms) led to lower D/E 0.44 IBD/E ratio and IBD/E ratio in 2017 0.30 Y16 Y17 Profitability - Efficiency Ratio 11.0 • Higher return on assets (ROA) because of ROE 10.0 increased net profit but lower asset base. 7.3 • Higher return on equity (ROE) due mainly to 6.3 ROA increase in net profit. Y16 Y17 19

HTC’s Dividend 1.00 Dividend per Share (Baht) 0.65 0.40 0.30 0.25 2013 2014 2015 2016 2017 Dividend Payout 43% 52% 49% 54% 70% Dividend Yield 2.48% 3.33% 2.29% 1.32% 3.22% 20

Forward Looking +6% p.a. SALEs REVENUE: 7,000 MB 5,671 MB +6.8% p.a. SALEs VOL: 62.5 MUC 52 MUC +6.3% p.a. NARTD SHARE: +3.2 pts. 26% 23% SPARKLING SHARE: 85% +3.2 pts. 84% 2017 2020 “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” 21

Awards & Certificate รางวัลชนะเลิศ Carbon Footprint for NACC Integrity Green Industry หญ้าแฝกทองคํา Organization & Awards 2017 Level 4 Products (24SKUs) รางวัลชมเชยองค์กรโปร่งใส โล่พระราชทาน การรับรองอุตสาหกรรมสีเขียว ระดับ 4 การรับรองคาร์บอนฟุตพริ0นท์ ปี 2017 พระบาทสมเด็จพระปรมินทร (วัฒนธรรมสีเขียว) องค์กรและสินค้าจํานวน 24 โดย ปปช. มหาภูมิพลอดุลยเดช โดยกระทรวงอุตสาหกรรม SKU 22

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