Fraser & Neave Holdings Bhd. · MYX:F&N
Fraser & Neave Holdings Bhd — FY2019 Earnings Presentation
37 slides from Fraser & Neave Holdings Bhd's earnings presentation, Nov 6, 2019
Slide 1: FY2019 Group Financial Highlights
FULL YEAR FY2019 Group Financial Highlights
Slide 2: Important notice
Important notice Certain statements in this Presentation constitute “forward-looking statements”, including forward-looking financial information. Such forward looking statements and financial information involve known and unknown risks, uncertainties and other factors which may cause the actual res
Slide 3: FY2019 F&NHB Group Financial Performance
FY2019 F&NHB GROUP FINANCIAL PERFORMANCE
Slide 4: FY2019 F&NHB Group Financial Performance
FY2019 F&NHB GROUP FINANCIAL PERFORMANCE Revenue (RM'mil) RM4,077.1 5.3% Operating profit Profit before tax (RM'mil) (RM'mil) RM520.4 RM533.0 23.4% 25.7% Profit after tax Earnings per share (basic) (RM'mil) (sen) RM410.2 111.9 sen 6.1% 6.6 sen F&NHB FY2019 profit before tax rose by 25.7% to RM533.0m
Slide 5: Revenue grew 5.3% to RM4,077.1 million
Revenue grew +5.3% to RM4,077.1 million Uplifted largely by strong growth in revenue from F&B Thailand Revenue FY2019 Revenue by Business Segment (RM'mil) F&B Malaysia : F&B Thailand (% ) ------------------------------------------- +5.3% ------------------------------------------- +5.9% 4,077.1 in T
Slide 6: Operating profit grew 23.4% to RM520.4 million
Operating profit grew +23.4% to RM520.4 million Driven by strong contribution from F&B Thailand Operating Profit FY2019 Operating Profit by Business Segment (RM'mil) F&B Malaysia : F&B Thailand (% ) ------------------------------------------- ------------------------------------------- +33.5% +23.4%
Slide 7: F&B Malaysia
F&B MALAYSIA Positive revenue growth at RM2.16 billion, driven by successful festive sales for beverages F&B Malaysia overall performance in FY2019 was underpinned by: ▪ higher beverages sales from successful festive promotions during Chinese New Year, Hari Raya Aidilfitri and Harvest festival, wher
Slide 8: F&B Malaysia (continued)
F&B MALAYSIA (continued) ▪ F&B Malaysia’s operating profit in FY2019 eased 4.2% to RM161.1 million. ▪ Excluding one-off and non-operating items, operating profit for F&B Malaysia was 15.5 per cent higher compared to last year. It has been our mission to lower the overall sugar index and offer at lea
Slide 9: Positive response from consumers to our re-formulated products
Positive response from consumers to our re-formulated products 907, of our beverages sold in Malaysia are healthier options Below sugar-sweetened beverages excise duty threshold
Slide 10: F&B Thailand
F&B THAILAND Continued momentum and strong performance from F&B Thailand F&B Thailand revenue grew by 11.3% to RM1,909.5 million (in THB terms + 5.9%). The strong growth momentum in domestic, Indochina and export markets was driven by: ▪ successful innovations and effective execution of marketing an
Slide 11: Building Exports as Our Third Pillar
Building Exports as Our Third Pillar Expanding our reach to +7 new countries in FY 2019 (including Seychelles, Oman, Bahamas) In preparation to establish a new subsidiary in United Arab 75 countries Emirates worldwide CONTRIBUTION OF CONTRIBUTION OF The Group is committed to continue to build Export
Slide 12: Our Highlights
OUR HIGHLIGHTS
Slide 13: Upgrade of Can Making Facilities
UPGRADE OF CAN MAKING FACILITIES @ PULAU INDAH 1st phase : Completed 2nd & Final phase : In-Progress The commissioning of the new can making lines and replacement of aged equipment is to reduce our operational costs and sustain our quality standards. 13
Slide 14: Chilled and UHT Production Capability
CHILLED AND UHT PRODUCTION CAPABILITY @ PULAU INDAH Project In-Progress Construction of Chilled and UHT Production lines to increase product offerings (fresh milk and juices), improve product freshness and operational cost savings. 14
Slide 15: Integrated Warehouse
INTEGRATED WAREHOUSE @ SHAH ALAM Artist Impression Project In-Progress Integrated Warehouse building with Automatic Storage & Retrieval System (ASRS) will help to maximise the storage capacity per land area, reduce operational costs and the delivery lead time to customers. 15
Slide 16: Production Plant at Kota Kinabalu Industrial Park
PRODUCTION PLANT @ KOTA KINABALU INDUSTRIAL PARK (KKIP) Artist Impression Project In-Progress The investment will lower our carbon footprint (shorten supply chain in Sabah) as well as expand our production capability in the Greenfield of KKIP. 16
Slide 17: New SBC/SCM Processing Lines
NEW SBC/SCM PROCESSING LINES @ ROJANA FACTORY Artist Impression Completed in August 2019 The commissioning of new processing lines are to increase existing capacity for the production of sweetened beverage creamer (SBC)/sweetened condensed milk (SCM). 17
Slide 18: New Products in FY2019
NEW PRODUCTS in FY2019 New products launched in Malaysia in FY2019
Slide 19: New products launched in Thailand in FY2019
New products launched in Thailand F&N Magnolia in FY2019 Lactose Free Milk Product (Chocolate Mint, Plain, Vanilla White Choc) TEAPOT F&N Magnolia Sweetened Beverage Creamer Gingko Plus Caramel Salted Caramel Milk
Slide 20: Participation from over 20,000 Malaysians
Participation from over 20,000 Malaysians
Slide 21: Our Awards & Recognition
OUR AWARDS & RECOGNITION ENVIRONMENTAL MARKETPLACE WORKPLACE CSR-DIW Continuous Award 2019 FDA Quality Award 2019 Graduates’ Choice Award 2019 from Ministry of Industry, Thailand from Thai Food & Drug Administration 1st runner up (9th consecutive years) (7th consecutive years) - Most Attractive Empl
Slide 22: Final Dividend
FINAL DIVIDEND
Slide 23: Higher Final Dividend 33.0 sen/share
Higher Final Dividend 33.0 sen/share (2018: 30.5 sen/share) FY 2019 Change 3 Total equity1 2,529.4 9.7% (RM'mil) Total assets 3,503.8 4.7% (RM'mil) Net cash 446.4 121.5% (RM'mil) Net assets per share 6.90 9.7% (RM) Gearing ratio 2 4.9% 9.7 p.p. (%) 1 Includes non-controlling interest 2 Total debt /
Slide 24: Prospects
PROSPECTS
Slide 25: Prospects
PROSPECTS ▪ F&B Malaysia ▪ Overall domestic market for F&B Malaysia to remain challenging amidst the continuous competitive pressures in the canned milk and the ready-to-drink beverage segments. ▪ After the successful reformulation exercise, we will be sharpening our focus on commercial execution in
Slide 26: Prospects
PROSPECTS ▪ Exports ▪ The ongoing US-China trade war and geo-political tension in Middle East have created uncertainties in our operating environment. ▪ The stronger Thai Baht has also affected F&B Thailand export competitiveness. ▪ Remain committed to continue to build Exports as our third business
Slide 27: Establishing Our 4th Pillar
ESTABLISHING OUR 4th PILLAR Our Plans to Venture into Integrated Dairy and Crop Farming ▪ Entered into a conditional agreement to acquire 4,454 hectares of leasehold land in Chuping, Perlis (‘Ladang Chuping’). ▪ Pending approvals from relevant authorities, F&NHB is set to become a major player in th
Slide 28: Why Dairy Farming?
Why Dairy Farming? Z \ | »~ hd f. 7 Vs ’ YY Pau \Vy j ae ’ +.“ E . hs VEN . ly 4 : ‘ | ’ \" 2 is ‘ - a ij) <= B\ Mh /; y c® iy) ‘ x ik) fee at t x \ Wet - i J .. \) ;
Slide 29: F&N Supports the Government's Health Agenda
F&N Supports the Government’s Health Agenda F&N’s active actions to address our Government’s Agenda ORIGINAL RECIPES REDUCED SUGAR PORTFOLIO IN SMALLER PACK SIZE RECIPES TRANSFORMATION But F&N ▪ Portion control packs ▪ Products with GREAT TASTE ▪ Speed up innovations into for: LOWER SUGAR recipes wi
Slide 30: Fresh Milk is Identified as a New Pillar of Growth for F&N
Fresh Milk is Identified as a New Pillar of Growth for F&N F&N has the ambition to play more actively in fresh milk, a healthy product category. But there are massive constraints, resulting in F&N pulling back from further investments : Global RM4.20 per liter ▪ Local fresh milk is inadequate. As su
Slide 31: Low Local Fresh Milk Production Means Low Self Sufficiency
Low Local Fresh Milk Production Means Low Self Sufficiency At RM 5bil value, overall dairy consumption in Malaysia is not low. Malaysia is one of the highest per capita market in the region. • Dairy products consumed in Malaysia are almost entirely made from imported milk powder. MILK PRODUCTION (MA
Slide 32: F&N Dairy Farming Strategy
F&N Dairy Farming Strategy Z \ | »~ d f \ Rif \ x Saal! \ [\ \ ; A \\ ‘ \c fh f Ww! } ‘ WY Pay / ay . Ah ¢ wit ss Oy . ly : ‘ | ’ is ‘ a ij) Ee \ M Ys. } vA i ‘ Sons tha) eee ANE ‘ \ \ ook j Cs / Fah - ia\ a WN y= Qt y «3 : \ ¥ > i J .. \) ¢
Slide 33: Integrated Dairy Farming Strategy
Integrated Dairy Farming Strategy 1. Addressing the Heat and 2. Addressing High Feed 3. Addressing Bio Security Humidity Cost Adopt the American Commercial Large contiguous field is needed Global Farm Management Farming Model to grow self sufficient forage Practices • The European/Australia/NZ with
Slide 34: Crop Farming Ambition to support Agriculture Roadmap
Crop Farming Ambition to support Agriculture Roadmap 4.0 3.8 mil tons (USD$ 3.8 bil) 4.1 mil tons (USD$ 2.9 bil) 3.5 mil tons 2017/2018 (USD$ 3.1 bil) mil tons 2016/2017 (USD$ 2.6 bil) 2015/2016 2014/2015 • Malaysia imports 4+mil tonnes of corn grains annually from Argentina, Brazil, etc. for feed t
Slide 35: Expansion Plans for Community and Beyond
Expansion Plans for Community and Beyond Agriculture/Agronomy Manufacturing On-site manufacturing activities: (i) Goat farming as an alternative milk source • Dairy Processing and packaging factory for consumers. • Chocolate factory (ii) Develop R&D centre in • Ice cream factory grain or seed scienc
Slide 36: Conclusion: What do we Aim to Achieve?
Conclusion: What do we Aim to Achieve? • With the right model from grass to glass, F&N aims to be the producer of world class fresh milk at significantly lower costs. • With scale, we can price our fresh milk lower to enable conversion from imported milk powder. If Vietnam has 294,400 dairy cows, ho
Slide 37: Fraser & Neave Holdings Bhd
EN FRASER & NEAVE HOLDINGS BHD A member of the FRASER AND NEAVE Group
Fraser & Neave Holdings — FY2019 Earnings Presentation on 6ix