Carabao Group Public Company Ltd · SET:CBG
Carabao Group Public — FY2016 Earnings Presentation
48 slides from Carabao Group Public's earnings presentation, Mar 30, 2017
Slide 1: Strictly Private & Confidential
Strictly Private & Confidential 0 Feb, 2017
Slide 2: Disclaimer
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 fina
Slide 3: Agenda
Agenda 4Q16 & FY16 Performance Update 1) Financial 2) Business Update 3) Corporate Profile 2 2
Slide 4: 4Q16 & FY16 Performance Update: 1. Financial
4Q16 & FY16 Performance Update 1. Financial 3 3
Slide 5: Market Share Comparison For FY2016
Market Share Comparison For FY2016 Selling Distribution (Coverage) Selling Distribution (Coverage) 78% 84% 84% 90% 91% 95% 95% 95% 96% 96% Carabaodang M-150 CBG’s contribution by region Number 1 in Central region since June’ 16 • Central region is the largest region for energy drink consumption, rep
Slide 6: Total Sales Revenue
Total Sales Revenue (Baht mil) +28.5% Key growth contributors 3YR CARG +13.4% 9,965 • Domestic : Push Strategy (Cash Vans) & Pull Strategy coupled with New Products 7,448 7,753 • Export: : Continuous growth in export markets mainly due to growth 6,863 from Cambodia & Afghanistan +6.28% +37.6% 2,858
Slide 7: Sales Revenue Breakdown
Sales Revenue Breakdown (Bath Mill) +20.5% Annual domestic sales growth is attributed to the following: 2.2% Carabaodang and Start Plus grew 12% and 53% yoy respectively 6,603 2.1% New branded product launches in 2016 i.e. Water and 5,358 5,477 Coffee collectively amounted to THB 238mn in sales
Slide 8: Overseas Sales by Country
Overseas Sales by Country Baht Mil FY14 FY15 FY16 %YOY 4Q15 4Q16 %YoY Cambodia 1,006 1,547 2,074 34% 461 599 30% Myanmar 243 223 279 25% 40 100 150% Vietnam 66 98 173 77% 22 68 209% Yemen 169 167 202 21% 42 70 67% Afghanistan 531 164 481 193% 44 160 264% United Kingdom 62 100% 21 100% Others 76 77 9
Slide 9: Gross Profit Margin
Gross Profit Margin TOTAL 33.7% 36.9% 35.90% 36.80% 33.9% 32.40% 33.20% 32.70% 34.70% 32.5% Carabao &Start Plus : 38% 38.80% 37.30% 38.60% 33.30% 34.76% Remaining:15% FY14 FY15 FY16 4Q15 4Q16 Domestic Export 8 8
Slide 10: Statement of Consolidated Comprehensive Income
Statement of Consolidated Comprehensive Income Unit: THB million 2015 2016 FY2016 FY2016 4Q15 4Q16 4Q16 4Q16 %sales YoY %sales YoY Revenue from sales 7,753 9,965 100.0% 28.5% 2,076 2,859 100.0% 37.7% Costs of goods sold 4,893 6,388 64.1% 30.6% 1,312 1,889 66.1% 44.0% Gross profits 2,860 3,577 35.9%
Slide 11: Statement of Consolidated Financial Position
Statement of Consolidated Financial Position STATEMENT OF FINANCIAL POSITION Unit THB million ASSETS Dec-15 Dec-16 Change LIABILITIES Dec-15 Dec-16 Change Current Assets Current Liabilities Cash, Cash Equivalents 1,377 745 (632) Bank overdrafts&short-term loans from financial institutions - 750 750
Slide 12: Our SKUs (Energy Drink)
Our SKUs (Energy Drink) Carabao Carabao Energy Carabao Carabao Carabao Carabao Ginseng Carabao Carbonated Products Energy Drink Drink (Original Carbonated Carbonated Carbonated Edition (Green Apple) (Original) Export) (Original) (Sugar Free) Descriptions • 150ml • 250ml • 325ml • 325 ml • 325ml • 32
Slide 13: Our SKUs (non-Energy Drink)
Our SKUs (non-Energy Drink) Start Plus Carabao Carabao Coffee Carabao Coffee Carabao Coffee Carabao Coffee Products Drinking Water (Rich Aroma) (Espresso) (Robusta) (Espresso) Descriptions • 250ml • 2 size = • 30 small sticks in • 30 small sticks in • 180ml can • 180ml can glass 600ml & 1 pack 1 pac
Slide 14: 3rd Party Products in Cash Vans
3 Party Products in Cash Vans RD Products Seaweed Dish Washing Peanuts Fish Snacks Toothbrush Razor Juice Liquid Retail 5 10 5 5 10 10 10 Selling Price (THB) Launch November 2015 April 2016 June 2016 July 2016 Date 1 Products Fabric Softener Squid Snacks Cigarettes Toilet Cleaner Tissue Detergent (1
Slide 15: 4Q16 & FY16 Performance Update: 2. Business Update
4Q16 & FY16 Performance Update 2. Business Update 14 14
Slide 16: Cash Vans & DCs Plan Completed
1. Cash Vans & DCs Plan Completed • Began in Feb’15 and thus far accomplished 30 DCs located throughout the country • Average sale amounted to THB 17,800 per van per day with 70% of which contributed by our branded products 7 DCs % contribution of Branded products 8 DCs Total 70% 19% 7% 4% 4 DCs W C
Slide 17: UK Business Update
2. UK Business Update UK Branding 2017 Carabao = Football * Carabao CUP ¢ Chelsea Football Club Sponsorship * — Reading Football Club Sponsorship
Slide 18: UK Business Update (Cont'd)
2. UK Business Update (Cont’d) 17 17
Slide 19: UK Business Update (Cont'd)
2. UK Business Update (Cont’d) MT and TT account for 60% and 40% respectively of the market Our target For 2017 • Modern Trade (MT) 35% • Traditional Trade (Cash & Carry) 50% 60,000 UK’s shop nation wide • Others 18 18
Slide 20: New bottling lines at the Bangpakong site
3. New bottling lines at the Bangpakong site Construct a brand new factory to boost capacities in anticipation of increasing demands for energy drinks in bottle format Items Descriptions Project • Bangpakong Bottle Filing Project Size of investment • Approx THB 1,750mn Description • Build a brand ne
Slide 21: The Greater China JV arrangements
4. The Greater China JV arrangements Extended reach to the Greater China region through a JV arrangement with a group of Chinese investors and management Items Descriptions Project • Greater China Investment Project Size of investment • Equivalent to USD 40.0mn whereby CBG through the subsidiaries U
Slide 22: Structure of the transaction
Structure of the transaction USD 17.7mn by capital increase Operating company Operating company 4 21 21
Slide 23: Energy drinks in the PRC market
Energy drinks in the PRC market Billion USD 4 22 22
Slide 24: Our marketing plans in the PRC market
Our marketing plans in the PRC market 4 23 23
Slide 25: Our marketing plans in the PRC market (Cont'd)
Our marketing plans in the PRC market (Cont’d) 4 24 24
Slide 26: Brazil Market Opportunity
5. Brazil Market Opportunity Carabao Brand successful launched partnership with Flamengo F.C. in January 2017 Local distributor is responsible for the sponsorship with the Flamengo football club. • Football is the most popular sport ,which often refer to the country as "o País do Futebol " ("the cou
Slide 27: The Brazilian Market Of Energy Drink
The Brazilian Market Of Energy Drink 210m Population Market Share% (2015) Others 20% 130m Litres Monster 4% 1.6bn Euro • Brazil is the fifth largest Energy Drink in the World in 2016 Red bull 43% Globalbev 5% • Brazil’s energy drink market reached $1.9bn in 2015 • Growth is forecast to double by 202
Slide 28: New Factories Progress
6. New Factories Progress APG FURNACE 2 –30 % PROGRESS CAN FILLING FACTORY – Test run in February 2017 Increasing production capacity for amber glass bottle in Increase can filling production capacity (beginning with 2 new order to support ongoing growth of Carabaodang bottles lines) to support volu
Slide 29: Appendix: 3. Corporate Profile
Appendix 3.Corporate Profile 28 28
Slide 30: Shareholding & Company Structure
Shareholding & Company Structure Manufactures, markets and Manages the domestic Manufactures and sells the Group’s products distribution of the Group’s supplies glass bottles product required for the manufacture the Group’s product CBHHK ,Newly incorporated in 2016 to operate as an overseas
Slide 31: Management Team
Management Team INSTRUMENTAL TO BUILDING COMPANY’S SUCCESS Mr. Sathien Setthasit MISSION Chief Executive Officer 1. The company seeks to create customer satisfaction through proactive marketing innovations Co-Founder of the Group in 2001 2. The company is determined to expand its global footprint vi
Slide 32: Milestones and Developments
Milestones and Developments Oct 2016 Carabao RTD Coffee was launched Jul 2016 2016 2015 Start establishing Nov 2014 2014 Carabao 3in1 Coffee Carabao Drinking own distribution centers Carabao Group began Start Plus Zinc an was launched Water was launched with a national coverage trading in Stock elec
Slide 33: Milestones and Developments (Cont'd)
Milestones and Developments (Cont’d) • Paid up capital of APG increased in full to 450 mil. Bt. • Paid up capital of CBG increased to 1,000 mil Bt. 2014 2016 • New Carabao products • Krones bottling line installed 2003 (Water & 3in1 & RTD (increases total max. cap. to Coffee) 2010 2012 • Registered
Slide 34: Vertical Integration Business Model
Vertical Integration Business Model New products consistently Research & Development improved and developed Limit risk exposure to price Raw Materials & Sourcing volatility and reduce third party dependency (Mixing + bottling + capping) Manufacturing Maximized quality control ISO 22000 Stron
Slide 35: Strong brand recognition associated with Carabao band
Strong brand recognition associated with Carabao band Carabao is Thailand’s legendary music-for-life & one of the most respected band in Thailand Songs for life music are reflections of aspects of Thai society For over 30 years, Carabao songs have been known to speak to the Thai people in a manner t
Slide 36: The Carabao Legacy (Cont'd)
The Carabao Legacy (Cont’d) 35 35
Slide 37: The Fighting Spirit
From Band to Brand The Buffalo The Bird Strength, Power, Freedom, Unity, Creativity, Perseverance, Respect Self Expression “Carabao” is an energy drink inspired by the resilient, positive spirit of the Thai people. It is more than an energy drink, it is a Positive Energy Enabler. “The Fighting Spiri
Slide 38: Strong brand recognition associated with Carabao musical group
Strong brand recognition associated with Carabao musical group Thai energy drink market brand equity index1 2 47.57 Market Share of Top 4 Energy Drinks in Thailand 41.51 27.77 47.70% 46.90% 46.80% 21.20 44.40% 43.60% M150 CBD Red Bull Lipo 23.90% 21.10% 21.50% 21.70% 17.50% BEI = Brand Awareness 25%
Slide 39: Own manufacturing facility - Maximized quality control
Own manufacturing facility –Maximized quality control APG Glass Bottle Manufacturing Facility Commenced production in Aug, 2014 Maximum molten glass production of 310 tonnes per day Capable of producing approximately 650 million bottles p.a. State-of-the-art technology using glass cullet as raw mate
Slide 40: Marketing Channels
Marketing Channels Dedicated in-house marketing team has established strong relationships with multiple media channels, enabling us to react to market trends and minimize lead time and costs Flexible uses of multimedia channels to reach target consumers: media advertising, on-the-ground marketing te
Slide 41: Innovative Marketing: Advertising of Vitamin B12
Innovative Marketing: Advertising of Vitamin B12 Brand performances based on selected criteria CBG as an innovator advertising B12 in energy drinks 5.00 4.50 4.00 3.50 3.00 Is a popular Frequently seen Highly accessible Get rid of Refreshing Alert and Long acting Contain brain- Good taste Extremely
Slide 42: Comprehensive Distribution Network
Comprehensive Distribution Network 1. Traditional Trade – 78%1 A. 3-tiered agent distribution network – 63% > 320,000 retailers Tier 1 > 50 agents … End Consumers Tier 2 Tier 2 > 1,200 sub- Carabao Group agents … … Tier 3 Tier 3 Tier 3 Traditional retail shops B. Cash Vans – 15%2 2. Modern Trade – 2
Slide 43: The Global Market
The Global Market The growth in the Energy Drink market is predicted to continue with sales reaching $62bn by 2019 Europe North America $11.5bn $24.3bn UAE $2.7bn Asia Pacific Africa $14.85bn Latin $2.1bn America $4.7bn Australia $2.7bn The opportunity is to capture 10% of the Global Market by 2019
Slide 44: Global market strategy
Global market strategy Brand Exposure Global Football Platform Football Fan Culture THE WORLD’S NO.1 SPORT 3.5 BILLION FANS WORLDWIDE 43 43
Slide 45: Strategic Partnership
Strategic Partnership THE WORLD CLASS COMBINATION Principal partner sponsorship value Principal partner sponsorship value = £30* mil./3 seasons (start 2016-2019) = £18* mil./3 seasons (start 2017-2020) The EFL Cup will be renamed the “Carabao Cup” 44 44
Slide 46: Strategic Partnership (Cont'd)
Strategic Partnership(Cont’d) 45 45
Slide 47: Statistic Information
Statistic Information Carabao Group PLC. As of 16 March 2017 Closing Price: THB 56.25 Ticker SET: CBG Reuter: CBG.BK Bloomberg: CBG:TB Google Finance: BKK:CBG Listing date 21 November, 2014 Listing Venue SET F&B, SET50 Par Value 1 Baht Shares outstanding (mil.) 1,000 Market Cap. THB 59,500mn / USD 1
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Carabao Group Public Company — FY2016 Earnings Presentation on 6ix