Analyst Meeting. Q3 18 and 9M18 Financial Performance

Transcription

1 Analyst Meeting Q3 18 and Financial Performance

2 Disclaimer Statements included or incorporated in these materials that use the word believes, anticipate, estimate, target, or hope, or that otherwise relate to the objectives, strategies, plans, intentions, beliefs or expectations or that have been constructed as statements as to future performance or events, are forward-looking statements within the meaning that are not guarantees of future performance and involve risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated at the time the forward-looking statements are made. Osotspa Public Company Limited ( OSP or the Company ) undertakes no obligation to publicly update or revise any forward-looking statement, whether as result of new information, future events or otherwise. OSP makes no representation and assume no liabilities against whatsoever about the opinion or statements of any analyst or other third party. 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3 Agenda Company Overview Financial Performance Core Strategy Updates 3

4 Company Overview A leading consumer products company in Thailand with 127 years of legacy Leading Thai consumer products company with products in non-alcoholic beverages, personal care products, healthcare products, and confectionery 127 years of legacy in Thailand with iconic brands and leadership across categories Strong distribution with ~470,000 points of sales throughout Thailand Well-established and leading regional presence with strong positioning to capture the attractive growth in consumer spending in CLM markets Global presence with Osotspa s products distributed in 25 countries in 5 continents Key Brand Families Beverage Brain and Body Boost including energy drinks, sports drinks and RTD coffee (together called Wake-Me-Up ) and functional drinks ( Look Good, Feel Good drinks) Lipovitan-D Krisnaklan Yatard4 M-Presso Som In-Sum Supply chain services Producing products under OEM and JV Chalarm Personal care Baby and women s care products Other Confectionary business and media business (2) Botan Revenue by Segment Supply chain services 13% Personal care 9% Other 1% Beverage 77% 2017 (1) : THB 24,571 mm Revenue from sales of beverage and personal care products Domestic beverage 71% Domestic personal care 9% International beverage 19% International personal care 1% Revenue from International Sales Other overseas markets (3) 11% Indonesia 9% Cambodia 8% Myanmar 64% 2017: THB 21,171 mm 2017: THB 4,209 mm Laos 9% Company Overview Note : (1) Revenue from sales and services, adjusted for impact of White Group (deconsolidated in 2016) and Future Group (divested in Jan 2018) as well as Unicharm termination (Osotspa terminated distribution agreement with Unicharm in 2017; Underwent SKU rationalization of personal care products from 2015 to 2017) (2) Osotspa disposed equity interest in Future Group, which operates media business, in January 2018 (3) Primarily sales to customers in Cyprus, the United Arab Emirates, and Saudi Arabia

5 Financial Performance 5

6 Business Update: Disposal of Interactive Communications and impact to financial statements In September 2018, the Company divested its entire shareholding in Interactive Communications and booked an accounting gain of THB 12.3 million. As the Company completely divested out of the advertising media service business, this transaction has led to the re-presentation in the Company s statement of income in 3Q18 by combining all line items in relation to Interactive Communications in the statement of income into one line and recording it under Profit for the period from discontinued operation, net of tax. Business Updates ก ำไรส ำหร บงวดจำกกำรด ำเน นงำนท ยกเล ก ส ทธ จำกภำษ 6

7 Financial Snapshot for Q3 18 and Net Profit achieved 78% of FY2017 while normalized net sales -0.7% YoY Normalized YTD Net Sales -0.7% YoY YTD Net Profit = 78.2% of FY2017 Net Profit Unit: THB mn 2017 Q3 17 Q3 18 Total revenues from sales ( Net Sales ) Total revenues 25,027 26,211 6,168 5,901 18,663 17,964 6,223 6,063 18,993 18,452 Profit for the period 2, ,701 2,266 Minority Profit attributable to owners of the parent ( Net Profit ) Net profit margin (%)* 2, % ,620 2, % 13.1% 14.3% 12.3% 3Q18 Financial Performance Note*: Net profit margin = Profit for the period / total revenues 7

8 Quarterly Net Sales Analysis Without Unicharm sales, normalized sales -0.7% YoY Unit: THB 7,000 Unicharm Sales 6, ,372 6,364 6,000 6,110 5,953 6,168 5,901 5,500 5,544 5,000 Q1 Q2 Q3 Q4 *Note: Normalized net sales after adjusting out Unicharm sales Q18 Financial Performance 8

9 Quarterly Performance Analysis: Net Profit 3Q18 normalized net profit improved 9.0% YoY. 4Q17 net profit very low from one-time expenses. Unit: THB 2,620M 1,023M 710M 46M 664M 886M 178M 708M 224M 2,396M 3Q18 vs. 3Q17 Decrease of THB 114mn to THB 772mn One-time impact from Unicharm in 3Q17 of THB 178mn 3Q18 normalized net profit improved 9.0% YoY Unicharm impact Normalized Profit* vs. Drop of THB 404mn or 15.4% YoY to THB 2,216mn Normalized net profit fell 7.5% YoY Higher A&P spending this year from NPDs (M-Presso, Chalarm Black Galingale, Babi Mild Pure Natural, Twelve Plus Cool Powder) *Note: Normalized profit after adjusting out Unicharm impact 3Q18 Financial Performance 9

10 Net Sales Analysis by Segment Normalized sales -0.7% YoY, dragged by OEM sales Thailand Beverages and C-Vitt & Calpis Thailand Personal Care OEM / Health Care / Unicharm International +1.5% Net sales: THB 12,307mn +9.1% -50.7% -2.4% -28.2% Excl. At constant Unicharm: FX: +2.3% Net sales: THB 1,575mn Net sales: THB 909mn Net sales: THB 3,022mn Som In-Sum % C-Vitt +61.3% after capacity expansion M-Presso Launch since Feb 18 Chalarm Black Galingale Launch in Aug 18 Increased from various NPDs along the period and promotional activities Babi Mild +13.6% Twelve Plus +3.0% sales dropped from lower OEM sales and last year Unicharm sales OEM bottle sales QoQ is recovering after completion of cold tank repair Myanmar is growing on track at +9.1% (at constant FX). With FX impact, sales grew +3.0% Total International Sales grew +2.3% (at constant FX) 3Q18 Financial Performance 10

11 Net Sales Analysis: Thai Beverages and C-Vitt & Calpis grew +1.5% C-Vitt sales grew further after capacity expansion in Q2 18 and distribution expansion: New Product Launched : Chalarm Black Galingale in Aug % Q1'18 Q2'18 Q3'18 Som In-Sum continued its strong growth after product re-positioning last year New Product Launched : M-Presso in Feb % 3Q18 Financial Performance 11

12 Net Sales Analysis: Thailand PC Marketing Update +9.1% from both Babi Mild (+13.6%) and Twelve Plus (+3.0%) marketing activities Twelve Plus Perfume Mist Twelve Plus Body Wash Launched in Jul 18 Launched in Jul 18 Twelve Plus x BNK48 Limited Edition Perfume Set Box Launched in Oct 18 Babi Mild Ultra Mild 3Q18 Financial Performance 12

13 Net Sales Analysis: OEM bottles sales dropped from Cold Tank Repair; sales is recovering in Q3 18 (Unit: THB mn) Quarter Avg. = 292 Under ramp-up phase +33.1% Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 3Q18 Financial Performance 13

14 Net Sales Analysis: International Sales International at constant FX +2.3% (-2.4% reported) driven by Myanmar growth at constant FX of +9.1% (+3% reported) International Sales (Unit: THB mn) Myanmar Sales 3, , ,098 3,022 2,018 2,078 Int'l Sales FX Impact Myanmar FX Impact 3Q18 Financial Performance 14

15 Quarterly Performance Analysis: Gross Profit Margins hit by Cold Tank Repair, high cullet cost and spending for NPDs Gross Profit (THB Million) -9.7% 2,078 1, % 6,181 5,697 8,447 3Q17 3Q (% GM of Total Revenues from Sales) w/ Future Group as reported in FS 2017 Q3'17 Q3' Q18 Financial Performance Q2 18 GM = 31.5% 15

16 Quarterly Performance Analysis: SG&A Higher SG&A from last year s abnormally low base; driven by reversal related to Unicharm SG&A (THB Million) 223 Impact from Unicharm reversal +5.3% 1,100 1, , % 3,611 5,322 3Q17 3Q (% SG&A of Total Revenues from Sales) Reported w/o Unicharm reversal Selling and Distribution expenses increased slightly from more advertising and promotional spending 15.6 w/ Future Group as reported in FS 2017 Q3'17 Q3' Q18 Financial Performance 16

17 Quarterly Performance Analysis: Profit attributable to owners of the parent profit accounts for 78% of FY 2017 Profit attributable to owners of the parent (Net Profit) (THB Million) Impact from Unicharm reversal % % 2,477 2,266 2,939 3Q17 3Q (% NPAT of Total Revenues from Sales) Reported 13.1 w/o Unicham Reversal w/ Future Group as reported in FS 2017 Q3'17 Q3' Q18 Financial Performance 17

18 Balance Sheet (as of 30 Sep 2018) THB 15,197.6mn 6, , , , , , , ,439.4 THB 15,280.6mn 4, ,132.1 As at 31 Dec 2017 As at 30 Sep 2018 Current assets Non-current assets Short-term loans Other current liabilities Non-current liabilities Shareholders' equity Key Changes in Balance Sheet Items Total assets: slight increase of THB 83.0mn driven by : THB 820mn higher cash and cash equivalents from operations (see cash flow analysis) : THB 312mn higher other assets from acquisition of leasehold rights in Thilawa : Offset with THB 1,186mn absence of non-current assets classified as held for sale post divestment of Future Group this year. Total liabilities: fell by THB 1,609.7mn primarily from : THB 681.7mn net decrease in short-term loans : THB 526.7mn lower payables and accruals : THB 401.3mn decline in liabilities classified as held for sale post divestment of Future Group. Shareholders equity: increased by THB 1,692.7mn : THB 2,265.6mn consolidated net profit : THB 2,266.0mn increase in paid-up capital : offset by THB 2,808.9mn dividend payments (THB 2,742.3mn to owners of the parent). 3Q18 Financial Performance ASSETS (THB mn) As at 31 Dec 2017 As at 30 Sep 2018 Cash and cash equivalents ,195.8 Trade and other receivables 2, ,804.9 Inventories 1, ,625.4 Other current assets Non-current assets classified as held for sale 1, Total Current Assets 6, ,787.3 Net PP&E 6, ,943.3 Long term investments 1, ,396.5 Other assets ,153.5 Total Non-Current Assets 8, ,493.3 Total Assets 15, ,280.6 LIABILITIES and EQUITIES (THB mn) As at 31 Dec 2017 As at 30 Sep 2018 Trade and other payables 4, ,811.7 Short term loans 6, ,400.0 Other liabilities Liabilities classified as held for sale Total Liabilities 11, ,148.4 Issued and paid-up share capital ,497.0 Retained earnings 3, ,508.7 Surplus on business combination under common control Other components of SE Non-Controlling Interest Total Shareholders' equity 3, ,132.1 Total Liabilities & Equity 15, ,

19 Cash Flows and Key Ratios Cash Flow (as at 30 Sep 2018) Units: THB mn Beginning cash (31 Dec 2017) 2,318.9 (421.6) Net cash from operating activities Net cash from investing activities (1,158.9) Net cash from financing activities 81.7 Cash and equivalents classified as non-current assets held for sale 1,195.8 Ending cash (30 Sep 2018) Cash Flow Movement Operating CF: THB 2,318.9mn from 1) net profit of THB 2,265.6mn, 2) depreciation THB 805.6mn and 3) change in working capital of THB mn Investing CF: THB 421.6mn cash outflow from THB 795.7mn net investment in property, plant and equipment, THB 355.4mn acquisition of leasehold rights at Osotspa Myanmar, offset by cash inflow from THB 715.1mn net proceeds from disposal of Future Group and THB 139.0mn dividends received Financing CF: THB 1,158.9mn cash outflow from THB 2,808.9mn dividend payments, THB 633.5mn net payment of short-term loans from financial institutions, offset by 2,266.0mn proceeds from issuance of shares Cash & cash equivalents classified as non-current assets held for sale: +THB 81.7mn as a result of Future Group divestment Key Financial Ratios Q3 18 Q3 17 Profitability Ratios Gross profit margin (%) EBITDA margin (%) Net profit margin (%) Return on equity (%) - trailing Return on assets (%) - trailing Efficiency Ratios Number of days of inventory Collection period (days) Accounts payable days Cash cycle (days) Liquidity and Leverage Ratios Current ratio (times) Total debt to equity (times) Notes: ROE and ROA are annualized 3Q18 Financial Performance 19

20 Core Strategy Updates 20

21 Business Update: Core Strategies Progress Update Strengthen domestic presence in broader non-alc. beverages and expand PC Leverage marketleading position in Thailand to sustain and expand to overseas markets Maintain Energy Drink Market Share (Value) YTD 18: 54% Myanmar sales growth on track for (at constant FX): +9.1% Grow Functional Drink Market Share vs. : 26% 30% Myanmar sales ( reported): +3.0% Babi Mild sales growth in : +16.7% Twelve Plus sales growth in : +5.3% International PC sales growth for : +44% Focus on costefficiency and margin enhancement through NRM principle Chalarm s New Variant - Black Galingale THB 10 with more benefits Premiumize Twelve Plus Cologne Fitness First on track. GM Q3 18 better than Q2 18 OEM Bottle is recovering: Cold tank repair impact and OEM performance Q1'18 Q2'18 Q3'18 Business Updates 21

22 Business Update: 8 November 2018 First Piling for Myanmar s Manufacturing Plant Osotspa Myanmar Co., Ltd. New beverage plant in Myanmar Location: in Thilawa Special Economic Zone Phase I Investment: THB 2,424mn Expected completion: 4Q 2019 Business Updates 22

23 APPENDIX 23

24 Key Financial Overview Osotspa Consolidation P&L Amount in Million Baht 2017* %YoY Q3 17 Q3 18 %QoQ Revenue from Sales and Service 25,877 18,663 17, % 6,168 5, % Other Revenue % % Total Revenue 26,211 18,912 18, % 6,223 6, % Gross Profit 8,447 6,181 5, % 2,078 1, % Gross Profit (% to Sales) 32.6% 33.1% 31.7% 33.7% 31.8% SG&A Selling and Distribution 2,139 1,584 1, % % A&P 1, , % % A&P (% to Sales) 4.8% 4.7% 6.0% 4.8% 5.5% Admin 1, , % % Profit for the Period 2,939 2,701 2, % % Minority % % Profit attributable to owners of the parents 2,834 2,620 2, % % Net Profit margin (%) 11.2% 14.3% 12.3% 14.6% 13.1% Note*: As reported in FY2017 Financial Statements. Adjustments have not been made to reflect the discontinued operations of the media business. Appendix 24

25 Reported: Quarterly Sales: Total Revenues from Sales Normalized Revenues from Sales was flat YoY (-0.7% YoY) -4.3% -3.7% 18,663 17,964 25,027 (THB million) 6,168 6,364 6,110 5,953 5,901 Q3'17 Q4'17 Q1'18 Q2'18 Q3' Normalized (Excluding Unicharm): -4.3% 6,168 6,364 6,110 5,953 5, % 18,084 17,964 24,448 Q3'17 Q4'17 Q1'18 Q2'18 Q3' Appendix 25

26 Net Sales Analysis - Overview More Focus: 94% of sales from core products (vs. 89% in ) Sales continues to grow from Thailand s Beverage and Personal Care portfolio 3,022 17% 910 5% 151 1% THB 17,964 million 3,098 16% 1,845 10% 147 1% THB 18,663 million 1,575 9% 12,307 68% 1,444 8% 12,129 65% TH Beverage and C-Vitt&Calpis TH Personal Care International OEM/Health Care Others TH Beverage and C-Vitt&Calpis TH Personal Care International OEM/Health Care/Unicharm Others Appendix 26

27 Quarterly Sales: Domestic Beverage and C-Vitt & Calpis -1.8% 4,200 4,111 4,217 3,967 4, ,839 3,778 3,906 3,570 3, % 12,129 12, ,242 11,189 11,065 16,240 1, ,967 (THB million) Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Beverage C-Vitt & Calpis Q3 18 vs. Q3 17 : Decreased from last year s strong sales driven by promotions and TVC on air Herbal variants are growing strong: Som In-Sum % YoY, Chalarm +7.7% C-Vitt continued its momentum after capacity expansion on Mar 18: +85.0% vs. : Increased from sales of Som In-Sum (+158.9%), C-Vitt (+61.3%), M-Presso (NPD Feb 18), Chalarm Black Galingale (NPD Aug 18) 2017 Appendix 27

28 Quarterly Sales: Domestic Personal Care (THB million) -5.7% +9.1% ,444 1,575 1,995 Q3'17 Q4'17 Q1'18 Q2'18 Q3' Q3 18 vs. Q3 17 : Decreased from high base last year due to NPD Babi Mild Talcum (White Sakura) and Twelve Plus promotion Bab Mild -3.5%; Twelve Plus -9.9% vs. : Increased from both Babi Mild (+13.6%) and Twelve Plus (+3.0%) driven by various NPDs along the period. Appendix 28

29 Quarterly Sales: Supply Chain Services (excl. C-Vitt & Calpis) Progressively building up OEM bottle sales after completion of cold tank repair (THB million) -28.7% , % 909 2,372 Q3'17 Q4'17 Q1'18 Q2'18 Q3' Q3 18 vs. Q3 17 : Cold tank repair completed in Q2 18 (Apr 18) Decreased from lower OEM bottle sales (-25.5%) and OEM PC sales (-42.7%) vs. : Decreased from lower OEM bottle sales (-35.0%) and OEM PC sales (-16.4%) Appendix 29

30 Quarterly Sales: International Myanmar growth (without FX impact) almost double digits 1, w/o FX: +3.8% -2.8% 1, Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Other Countries 1,126 Myanmar 882 w/o FX: +9.5% +1.2% YoY -8.8% YoY -2.4% 3,098 3,022 2,018 2,078 1, w/o FX: +2.3% w/o FX: +9.1% +3.0% YoY -12.6% YoY 4,209 2,6 71 1, (THB million) Q3 18 vs. Q3 17 : Sales decreased -2.8% to THB 882mn; without FX impact, sales improved +3.8% driven by Myanmar sales growth (+1.2%; without FX impact, +9.5%) vs. : Sales decreased -2.4% to THB 3,022mn; without FX impact, sales improved +2.3% driven by Myanmar sales growth (+3.0%; without FX impact, +9.1%) Appendix 30

31 Quarterly Sales: Others slight improvement in confectionary sales (THB million) -5.4% +2.5% Q3'17 Q4'17 Q1'18 Q2'18 Q3' Q3 18 vs. Q3 17 : Decreased by -5.4% YoY predominantly based on confectionary sales vs. : Increased by +2.5% YoY predominantly based on confectionary sales Appendix 31