Masan Group Corporation · HOSE:MSN
Masan — Q2 2024 Earnings Presentation
31 slides from Masan's earnings presentation, Jul 26, 2024
Slide 1: 2Q2024 Community Day
2Q2024 Community Day 26th July 2024 1
Slide 2: Table of contents
Table of contents Macro Environment & Consumer Sentiment 2Q2024 Highlights and Consolidated Financial Results 2Q2024 Business Segments Commentary 2024 Key Initiatives Updates 2
Slide 3: Macro Environment & Consumer Sentiment
01 Macro Environment & Consumer Sentiment 3
Slide 4: Vietnam's macro environment continued to show signs of recovery and re-acceleration in 2Q2024
Vietnam’s macro environment continued to show signs of recovery and re- acceleration in 2Q2024 GDP growth momentum continued in …with very positive signals in export, …which is further supported in the long- 2Q2024… supporting manufacturing and labor market term by higher level of FDI in Vietnam… 2Q
Slide 5: 2Q2024 Highlights and Consolidated Financial Results
02 2Q2024 Highlights and Consolidated Financial Results 5
Slide 6: 2Q2024 Highlights
2Q2024 Highlights Masan grew revenue and EBITDA by 8.2% and 20.9% YoY, respectively, supported by ongoing momentum of consumer businesses1 and recovery of our non-core businesses. NPAT Post-MI in 2Q2024 surpassed full-year earnings for FY2023, amounting to VND503 billion (+379% YoY). Masan Consumer
Slide 7: Masan grew 2Q2024 revenue and EBITDA by 8.2% and 20.9% YoY
Masan grew 2Q2024 revenue and EBITDA by 8.2% and 20.9% YoY, respectively, supported by ongoing momentum of consumer businesses1 and recovery of our non-core/non-operating businesses MSN consolidated results Key highlights (VND billion) 2Q2024 YoY Growth 1H2024 YoY Growth ▪ Masan Group (“MSN”)’s topl
Slide 8: Consumer business maintains momentum, while earnings bolstered by non-core recovery
Consumer business maintains momentum, while quarterly earnings is bolstered by substantial recovery in non-core/non-operating activities NPAT Pre-MI Consumer-retail businesses Non-core/Non-operating activities Unit in VNDbn Consumer businesses maintained momentum Recovery of our non-core businesses
Slide 9: Net debt to EBITDA declined significantly to 3.3X
Net debt to EBITDA declined significantly to 3.3X thanks to improved working capital and equity raised MSN (Cash & Debt)(1) VND billion MSN Cash Flow (Capex, FCF) VND billion 4Q2023 2Q2024 LTM 2Q2023 LTM 2Q2024 7,429 69,572 67,871 4,338 3,410 21,977 16,919 1,558 Cash & Equivalent Total debts CAPEX F
Slide 10: 2Q2024 Business Segments Commentary
03 2Q2024 Business Segments Commentary 10
Slide 11: MSC enhanced topline growth to 14.0% YoY
MSC enhanced topline growth to 14.0% YoY, 1.5X 1Q2024’s YoY growth rate, mainly driven by growth in Convenience Foods and Beverages MSC’s Financial performance MSC’s Profit margins Unit in VNDbn Unit in VNDbn 7,387 6,478 46.0% 46.6% 47.3% 46.7% 46.3% 26.2% 25.4% 28.3% 25.7% 25.6% 26.0% 25.4% 25.0% 2
Slide 12: All categories delivered strong growth except Home & Personal Care
All categories delivered strong growth except for Home & Personal Care which awaits a 2H2024 rebound with launch of Chante in GT and new innovations in market Seasonings Convenience Foods Beverages Home & Personal care Coffee ▪ Revenue: VND2,509 bn ▪ Revenue: VND2,183 bn ▪ Revenue: VND1,477 bn ▪ Rev
Slide 13: WCM grew revenue 9.2% YoY and achieved NPAT positive in June
WCM grew revenue 9.2% YoY and achieved NPAT positive in June due to accelerated 9.7% LFL(1) network growth Revenue and EBITDA grew healthily Highlights Unit in VNDbn ▪ Net revenue increased 9.2% YoY in 2Q2024 driven by the net impact of LFL growth of 6.8% YoY, new store openings, and ramping up of s
Slide 14: LFL revenue growth continued momentum for minimarts
LFL(1) revenue growth continued growth momentum of 6.9% YoY for minimarts (“WMP”), resulting in minimart’s revenue growth of 11.1% YoY… Revenue from WMP Revenue from WMT Unit in VNDbn Unit in VNDbn 5,026 5,582 2,083 2,163 459 69 232 121 5,123 2,094 4,794 1,962 2Q2023 2Q2024 2Q2023 2Q2024 LFL Others
Slide 15: Improved LFL store-level margins delivering NPAT positive for 4th consecutive quarter
…and improved LFL store-level margins(1) YoY delivering NPAT positive for the 4th consecutive quarter WMP LFL(2) margins WMT LFL margins Unit in % YoY Unit in % YoY 1.7% 5.9% 4.8% 3.6% 0.9% 2.5% Store-EBITDA margin Store-EBIT margin -0.5% -2.2% Store-EBITDA margin Store-EBIT margin 2Q2023 2Q2024 2Q2
Slide 16: WCM's entire network maintained margins despite absence of financial product income
WCM’s entire network maintained margins thanks to strong LFL growth, despite the absence of profit from financial product distribution Gross margin in 2Q2024 declined YoY as a result of LFL growth and stable cost structures improved bottom the absence of financial product distribution income line de
Slide 17: Continued strong LFL growth and profitability of new formats
Continued strong LFL growth and profitability of new formats, testament to their winning models Target consumers: Urban Target consumers: Rural One-stop shop for daily needs, addressing 80% of consumer wallet Grocery in rural areas, with limited fresh offerings; focused on share; High quality fresh
Slide 18: FCF improvements driven by lower days of inventory
FCF improvements driven by 5 lower days of inventory with more accurate demand planning and supply chain operation End-to-end supply chain transformation Automated Demand Forecasting using Machine Learning Supply chain intelligence Strategic architecture 400+ Scenarios iterated based on: • End-to-en
Slide 19: MML's topline growth driven by focus on processed meat
MML’s topline growth was driven by strategic focus on processed meat while leveraging strong momentum from fresh pork MML performance Revenue by segments Unit in VNDbn Unit in in VNDbn 1,790 1,703 Chick farm rationalization & higher internal farm pig sales Meat revenue increased 19.4% YoY 613 558 42
Slide 20: Gross margin received 1250bps uplift
Gross margin received 1250bps uplift resulted from higher market prices of poultry and pork, lower feed prices, and increased processed meat mix Gross margin by segment Gross profit by segments Unit in % Unit in VNDbn 46.5% 33.7% 27.6% 22.9% 20.5% 17.7% 7.6% 6.7% 9.0% -18.8% Farm pig Fresh pork Farm
Slide 21: MML improving operational efficiency in farm businesses
MML has been consistently improving operational efficiency in farm businesses and porker utilization for meat segments -10% -13% -18% 7.2% Pork farm unit Chicken farm unit Unit conversion Porker utilized for production cost production cost cost of fresh pork processed meat (vs. 1Q2023) (vs. 1Q2023)
Slide 22: Revenue growth turned positive in 2Q2024 due to kiosk closures
Revenue growth turned positive in 2Q2024 and profit improved due to kiosk closures Kiosk footprints rationalized to protect profitability Performance of PLH outside WCM(1) Store count Unit in VNDbn 148 163 Unit in VNDbn 391 308 372 284 63 71 57 51 12 31 Revenue EBITDA NPAT Pre-MI Revenue EBITDA 2Q20
Slide 23: Favorable material market prices provided tailwinds for MHT's results
Favorable material market prices provided tailwinds for MHT’s results MHT performance Copper price (USD / mtu) Unit in VNDbn +20.7% $10,134 3,529 3,652 $9,481 $8,675 $8,393 $8,343 $8,309 582 371 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Revenue EBITDA 2Q2023 2Q2024 APT (USD / mtu) +9.0% $327 ▪ MHT’s
Slide 24: Revenue and profit improved driven by higher materials prices
Revenue and profit improved in 2Q2024 driven by higher materials prices MHT revenue bridge 2Q2024 vs 2Q2023 Unit in USD mn Main drivers of the uplift in MHT’s revenue and NPAT: ▪ APT revenue increased $7.6mn, driven by higher quantity sold and higher tungsten price in 2Q2024 at avg. of $323/mtu, com
Slide 25: Updates on Key Initiatives
04 Updates on Key Initiatives 25
Slide 26: MSN is on track for all strategic pillars of 2024
MSN is on track for all strategic pillars of 2024, which will unlock shareholder values KEY PILLARS ACTION PLAN Progress ▪ MCH: 10%+ growth driven by Convenience Foods, Beverages, HPC while maintaining EBITDA margin 23%+ ✓ Continued focus on Achieved ~60% of Base case’s ▪ WCM: higher growth and full
Slide 27: Signing of definitive agreements between MHT and Mitsubishi Materials
Signing of definitive agreements between MHT and Mitsubishi Materials substantiated MSN’s efforts to reduce exposure to non-core business and de-lever USD ~135mn USD ~40mn USD 20-30mn Reduce Net debt to Equity purchase price of a one-time profit long-term NPAT uplift EBITDA <3.5x1 100% H.C. Starck H
Slide 28: Masan's guidance for 2024
Masan’s guidance for 2024: ~60% Base-case NPAT Post-MI has been achieved in 1H2024, with momentum toward High-case 2024 Budgets Growth vs. 2023 (VNDbillion) 2023 Base case High case Base case High case Revenue 78.252 84.000 90.000 7% 15% The CrownX 57.684 63.000 68.000 9% 18% MCH 29.066 32.500 36.00
Slide 29: 2H2024 initiatives to exceed Base case's NPAT guidance
2H2024 initiatives to enhance profitability and exceed Base case’s NPAT guidance Accelerate topline growth Focus on NPAT breakeven: Invest in long-term profit Enhance sales productivity: Improve earnings on the in 2H2024: ▪ Target LFL growth drivers: ▪ Improve SSSG with local back of higher commodit
Slide 30: Thank you!
Thank you! 30
Slide 31: Disclaimer
Disclaimer This Presentation has been prepared by Masan Group Corporation and/or its affiliated companies (collectively, “MSN”; together with any officer, director, employee, advisor or agent of MSN, collectively, the “Preparers”) for the purpose of setting out certain information in respect of MSN’