CARABAO GROUP 2Q21 Analyst Meeting 19 August 2021 - investor relations
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
CARABAO GROUP
2Q21 Analyst Meeting 19 August 2021
Strictly Private & Confidential
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 regarded only as indicative,
preliminary and for illustrative purposes and to be used, downloaded, and distributed for this meeting with CBG. No representation,
warranties, or undertakings, express or implied, are made by CBG, or any of its respective members, directors, officers, employees,
agents, affiliates, advisers or representatives or any other person as to, and no reliance should be placed on, the fairness, accuracy,
completeness or correctness of, the information or opinions presented or contained therein. The information and opinions presented or
contained therein are provided as at the date of this meeting based on the economic, regulatory, market and other conditions as in
effect on the date hereof and are subject to verification, completion, updating, revision and change without notice and the accuracy of
the information is not guaranteed. This presentation contains forward-looking statements that may be identified by their use of words
like “plans,” “expects,” “will,” “anticipates,” “believes,” “intends,” “depends,” “projects,” “estimates” or other words of similar meaning
and that involve assumptions, risks and uncertainties. Such forward looking statements are not necessarily indicative of the future or
likely performance or projection of CBG and involve known and unknown risks, uncertainties and other important factors beyond the
control of CBG. CBG’s actual results may vary materially from those expressed or implied in its forward-looking statements, and no
assurance is made as to whether such future events will occur. The Group accepts no liability whatsoever for any loss arising directly
or indirectly from the use or endorsement of any information contained herein by any users and/or third parties.
3
Agenda
CBG Summary
Financial Performance
Business Update
Q&A
4
Company Structure
CBD APG DCM ACM APM
• Head office • Glass bottle • Distribution • Aluminum can • Packaging
• Beverage production productions channels productions productions
AWD
• Brand and
marketing
management of ICUK
functional drinks • Marketing and
distribution channels
outside Asia
Remark: * CBG’s shareholding in ACM increased to 100% from 74% on March 1, 2021 by shares acquired from SHOWA DENKO Group, with reference to resolutions of the Board of Director's
Meeting No.1/2021 on February 19, 2021 5
CBG 2Q21 Summary
2Q21 Review Financial Performance Business Highlights
2Q21 %YoY
• Revenue was all time high • China
growing double digit was mainly
due to overseas sales Revenue (THB mn) 4,995 +10.8% Sales to China in 2Q21 grew
2.1x YoY and accounted for 10%
• CLMV and China sales are the of total sales
key success
Net Profit* (THB mn) 967 +9.7% • New functional drink (April)
• Woody C+ Lock Vitamin C Drink
Mixed Berry was launched on • New products launched
April 19th driving the functional from 3rd party to distribute
drink sales improved QoQ
Gross Profit Margin 38.1% -0.5%
ROE* 39.1% 0.0%
Remark: * Contributing to major shareholders of the company 6
Agenda
CBG Summary
Financial Performance
Business Update
Q&A
7
Performance
Sales Mix
Sales (THB mn) and Gross Profit Margin
41.6%
Revenue
41.5%
40.7% • 2Q21 revenue grew both
39.3%
38.6% 38.3% Overall - GPM
YoY and QoQ mainly due
38.1%
to overseas sales
10.8%
5.3%
23.9%
9,025
8,568 .0%
1. % Others
1 . % 1 .7% Gross Profit Margin
.4% . %
3rd Party Distribution
• 2Q21 Gross profit margin
.1% 0. %
dropped both YoY and
4,995
4,508 4,405 4,257 .4% Branded OEM
QoQ due to higher raw
.4% 0. %
4,030 1 .0%
1 . % 1 . % .1%
17.1% 1. % . % material costs such as
1. % .1% 17. %
.4% .7% .4% sugar and aluminium
.1% . % Branded own - Domestic
.1% . %
1.1% 4 .0%
4 . % 4 . % 0. % Branded own - Overseas
. % 44. %
2Q20 3Q20 4Q20 1Q21 2Q21 6M20 6M21
8
Branded Own
Revenue breakdown (Domestic and Overseas)
Sales (THB mn) and Gross Profit Margin
Branded own revenue
48.4%
47.3% 47.5% • 2Q21 branded own
46.7% 46.7%
44.8% revenue grew both YoY
Branded own GPM
43.2% and QoQ due to higher
overseas sales
6.1%
-0.5%
25.0% Domestic sales
• 2Q21 branded domestic
7,127 7,089 sales -5.1% YoY but
+5.5% QoQ
. % . %
Branded own - Domestic
3,713 3,939
3,617 Overseas sales
3,338 3,150
40. %
.0% • 2Q21 overseas sales
4 .4%
4 . % 4 . %
1.4%
+13.6% YoY and +39.5%
1.1%
Branded own - Overseas QoQ
. % 4.0%
. % 0.1% 7.4%
2Q20 3Q20 4Q20 1Q21 2Q21 6M20 6M21
9
Branded Own
Revenue breakdown (Overseas)
Overseas Sales by Product
Overseas sales
Carbonated can
Non-carbonated bottle 2% • 2Q21 overseas sales grew
10% both YoY and QoQ mainly
due to higher sales to
2Q21 CLMV and China
Non-carbonated can
• 2Q21 sales to China grew
88% 2.1x YoY driving the
proportion to 19.4% of
Overseas Sales by Geography (THB mn) overseas sales
13.6%
-1.1%
39.5%
4,376 4,330
7. % . %
0. % 1.4% Others
.1% 1 .1%
2,522 Country 2Q20 1Q21 2Q21 %YoY %QoQ
2,219 2,048 .1% ICUK
11. % 11. % 1,674 1,808 1. % CLMV 1, 00 1,4 4 1, 4 7. % 0. %
0. % 1.4% 10.1% 4. % 1 .4% .1%
7.1% 1. % 1. % 7 .1% China 1 7 10 4 10. % 1 . %
. % China
1. % 11. %
1.1% 0. % 77.0% 4 1. % .0%
. % .1% ICUK
CLMV
Others 7 4 -7 .0% - .7%
2Q20 3Q20 4Q20 1Q21 2Q21 6M20 6M21
10Distribution for 3rd Party
Revenue breakdown
3rd Party Distribution Sales by Product
Product Mix of 3rd Party
Non-alcohol Distribution
6% • Sales from Alcohol-
distribution for 3rd party
2Q21 were gradually increased to
94% in 2Q21
Alcohol
94%
Sales (THB mn) and Gross Profit Margin Distribution for 3rd Party
7.2% 6.6% 6.2%
7.5% 7.5% 6.8% • 2Q21 distribution for 3rd
6.0%
3rd Party Distribution GPM party sales grew both YoY
and QoQ due to new
products launched by 3rd
33.7%
party
40.3%
13.2%
1,505
1,073 3rd Party Distribution
727 706 799
598 613
2Q20 3Q20 4Q20 1Q21 2Q21 6M20 6M21
11Branded OEM
Revenue breakdown
Branded OEM Sales by Product
Product Mix of Branded
Drinking water OEM
17% • 2Q21 Sales from Branded
OEM were 83% of coffee
2Q21 which includes 3-in-1 and
Coffee RTD
83%
Sales (THB mn) and Gross Profit Margin Branded OEM
17.9% 16.2% 15.0% 13.8% 14.9% 14.9% 14.4% • 2Q21 sales grew both YoY
Branded OEM GPM and QoQ due to higher
sales from both coffee and
58.8%
drinking water
21.0%
25.3%
206 250 Branded OEM
87 135 102 111 139
2Q20 3Q20 4Q20 1Q21 2Q21 6M20 6M21
12SG&A
SG&A breakdown
SG&A (THB mn) and SG&A to sales
SG&A
18.0%
• 2Q21 SG&A increase due
17.4%
17.0%
16.3% 16.6% SG&A to sales
to higher admin expenses
15.7% 15.4% as per the human resources
development plan.
0.5%
0.2%
5.9%
1,492 1,495
.0% . %
SG&A to sales
• 2Q21 SG&A to sales
Admin exp. dropped to 15.4% due to
765 769
719
670
726 higher sales
. % . % 4.7% . %
0.4%
.0% 4.1%
Selling exp.
1. % .7% . % . % .1%
2Q20 3Q20 4Q20 1Q21 2Q21 6M20 6M21
13Profitability Trend
Consolidated EBITDA
EBITDA (THB mn) and EBITDA margin
EBITDA
32.8% • 2Q21 EBITDA grew both
30.7%
30.1%
29.3% EBITDA margin YoY and QoQ mainly due
28.5% 28.1% (Excl. Sponsorship)
27.7% to higher sales
4.8%
-3.7%
27.3%
2,635
2,537
187 135
EBITDA Margin
• 2Q21 EBITDA margin
Sponsorship fee dropped YoY due to higher
1,446 1,421
1,356
1,249
costs of raw material, while
94 63
93
51
1,116 2,448 grew QoQ due to higher
2,402
72
sales
1,263 1,351 1,358 EBITDA
1,198
1,044
2Q20 3Q20 4Q20 1Q21 2Q21 6M20 6M21
14Profitability Trend
Net profit attribute to owners
Net profit (THB mn) and Net profit margin
Net profit
22.0%
• 2Q21 net profit grew both
19.6% 20.5% 19.4% 19.6%
17.4% 18.5% YoY and QoQ due mainly
Net profit margin
to the all time high sales
9.7%
-0.9%
38.1%
Net profit margin
• 2Q21 net profit margin
dropped a little YoY due to
1,682 1,667
higher raw material costs,
Net profit while grew QoQ due to
higher sales
881 970 967
873
700
2Q20 3Q20 4Q20 1Q21 2Q21 6M20 6M21
15Capital Management
Capital structure & Key financial ratios
Capital structure as of June 2021 Dividend payment
Others
15% 68% 69% 68% 68%
3.0 54% 100%
LT Loan
5% 2.0 2.4 0%
Equity 1.7
2Q21 54% 1.0 -100%
0.9 0.8 0.9
ST Loan 0.0 -200%
26% 1H21
Dividend (THB/share) Payout ratio
Gearing ratios Key financial ratios
Covenant ≤ . x
Profitability Ratios 2Q20 1Q21 2Q21
Gross profit margin 40.7% . % .1%
EBITDA margin .7% 0. % .7%
1.0 0.9
0.7 0.7 Net profit margin 1 . % 17.4% 1 .4%
D/E ratio
0.7 0.6 ROA . % 1 .4% 1. %
0.5 0.5 IBD/E ratio
2Q21 ROE .1% . % .1%
16Agenda
Company Overview
Financial Performance
Business Update
Q&A
17Industry Outlook
Thailand Economy (2021F) Industry
• GDP: 1.8% (from previously 3.06%) • Energy drinks market (Volume) in 2Q21: +3.8% YoY
• Core Inflation: 0.2% (form previously 0.3%) o CBD Market Share: 21.0%, No. 2nd
• Private Consumption Index (PCI): Jun 21 = 121.80
(Mar 21 = 142.29) • Healthy shot market (Volume) in 2Q21: +6.5% YoY
o Woody C+ Lock Market Share: 9.1%, No. 2nd
• CPI - Non-Alcoholic Beverages: Jul 21 = 101.17
(Mar 21 = 101.49)
Key drivers Challenges
• Adjust sugar content for domestic energy drink to • Covid-19
support gov’t health campaign • Freight rate height & Container shortage
• Overseas sales • Aluminum cost
• NPD to accelerate growth and expand business • Sugar price
opportunity
• Costs saving from ACM, APG, APM, Solar roof,
and discontinued of sponsorship with CFC in July
Source: Fiscal Policy Office - Ministry of Finance, Bank of Thailand, Ministry of Commerce, Thailand Board of investment 18Business Update
Issuing new debenture
A two-year debenture
• Worth 1.5 billion baht
• Fixed interest rate of 1.27% per annum
• Interest payment every 6 months throughout the bond life
• TRIS rating: A
Objectives
• To pay off the short-term loan used to redeem the debentures due in June
• To use as working capital for business operations
19Business Update
A further two-year extension of EFL sponsorship until May 2024
20Business Update
Overseas sales
Freight rate height &
COVID-19
Container shortage
• Surge in COVID-19 cases as Delta variant tears • Freight rate continue rising resulting customers
through many countries including Thailand to slow ordering
• However, there is a fast vaccination speed in • There is container shortage to ship to some
some countries countries such as Yemen
USD/40 ft box
Container Freight Rate
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
Apr-21
Apr-20
Oct-20
Jul-21
Jul-20
Jan-20
Jan-21
Source: Bloomberg, WHO 21Agenda
Company Overview
Financial Performance
Business Update
Q&A
22Appendix
24Statement of financial position
Unit: THB mn
2Q20 1Q21 2Q21 %YoY %QoQ 6M20 6M21 %YoY
Revenue from sales 4,508 4,030 4,995 10.8% 23.9% 8,568 9,025 5.3%
Costs of goods sold 2,674 2,475 3,094 15.7% 25.0% 5,013 5,569 11.1%
Gross profits 1,834 1,555 1,901 3.7% 22.2% 3,556 3,457 -2.8%
Selling expenses 470 474 485 3.0% 2.3% 970 959 -1.2%
G&A expenses 294 252 284 -3.5% 12.6% 522 536 2.7%
Operating profits 1,069 829 1,133 5.9% 36.6% 2,064 1,962 -4.9%
Other income 29 35 39 33.4% 12.7% 60 74 23.1%
Other expenses 0 0 0 N.A. N.A. 6 0 N.A.
EBIT 1,099 864 1,172 6.7% 35.6% 2,118 2,036 -3.9%
EBITDA 1,099 864 1,172 6.7% 35.6% 2,118 2,036 -3.9%
Interest incomes 2 0 0 -79.0% 306.0% 4 1 -83.3%
Interest expenses 32 21 21 -33.5% -1.6% 63 42 -32.4%
EBT 1,069 843 1,151 7.7% 36.6% 2,059 1,994 -3.1%
Income tax expenses 179 147 198 11.0% 34.6% 345 345 0.2%
Net profits for the period 891 695 953 7.0% 37.0% 1,714 1,649 -3.8%
Net profits attributed to the Company's shareholders 881 700 967 9.7% 38.1% 1,682 1,667 -0.9%
Key ratios
Gross profit margin 40.7% 38.6% 38.1% -2.6% -0.5% 41.5% 38.3% -3.2%
Operating margin 23.7% 20.6% 22.7% -1.0% 2.1% 24.1% 21.7% -2.3%
Net profit margin 19.6% 17.4% 15.7% -3.9% -1.7% 19.6% 18.5% -1.2%
EBITDA margin 24.4% 21.4% 14.9% -9.4% -6.5% 24.7% 22.6% -2.2%
Remark: * Contributing to major shareholders of the company 25Statement of comprehensive income
Unit: THB mn
ASSETS Dec-20 Jun-21 Change LIABILITIES Dec-20 Jun-21 Change
Current Assets Current Liabilities
Cash, Cash Equivalents 947 742 -204 Short-term loans 2,335 4,680 2,345
Current Investments 0 0 0 Trade and other payable 1,573 1,779 206
Trade and other receivable 1,420 2,118 698 Current portion of long-term loans 169 169 0
Inventories 1,489 1,513 24 Current portion of Debentures 1,090 0 -1,090
Other current assets 136 181 45 Other current liabilities 488 445 -43
Total Current Assets 3,992 4,554 562 Total Current Liabilities 5,655 7,074 1,419
Non-Current Assets Long-term loans 894 809 -85
Long-term Investment 0 0 0 Debentures 0 0 0
Investment Properties 107 105 -2 Other non-current liabilities 380 529 148
Property, plant & equipment 12,032 12,411 379 Total non-current liabilities 1,274 1,338 64
Intangible Assets 100 100 -1 Total Liabilities 6,929 8,412 1,482
Goodwill 495 540 46 SHAREHOLDERS' EQUITY
Other non-current assets 361 511 150 Issued and fully paid-up share capital 1,000 1,000 0
Total Non-Current Assets 13,094 13,666 572 Premium on shares 3,963 3,963 -0
Total Assets 17,087 18,220 1,134 Retained earnings 5,051 5,218 167
Key ratios Other components of shareholders' equity -58 -290 -232
D/E 0.68 0.86 0.18 Equity attributable to owners of the Company 9,956 9,891 -65
IBD/E 0.44 0.58 0.14 Non-controlling interests of the subsidiary 201 -82 -284
ROA 20.6% 21.2% 0.6% Total shareholders' equity 10,157 9,809 -349
ROE* 35.4% 39.1% 3.7% Total liabilities and Equity 17,087 18,220 1,134
26Sugary Drinks Tax
Phrase I: Phrase II: Phrase III: Phrase IV:
Sugar content
Sept 16, 2017 – Oct 1, 2019 – Oct 1, 2021 – Oct 1, 2023
(Grammes/100 ml)
Sept 30, 2019 Sept 30, 2021 Sept 30, 2023 onward
Bt/Litre
x≤ 0.0 0.0 0.0 0.0
18 1.0 .0 .0 .0
27Company Overview
Carabao is the 2nd largest energy drink company in Thailand and a successful overseas business
Business overview Product overview
• Founded in 2001 as a partnership between 3 founders one of which is the leading Categories Product Portfolio
singer of Carabao (Thai legendary folk band), the Carabao Group is now the 2nd
largest energy drink company in Thailand with 21% market share1
Energy
• Its main product, Carabao Energy Drink, is packaged into amber glass bottles or drink
aluminum cans. Other branded products include bottled water, coffee, Carabao
Sport electrolyte drink.
• Vertically integrated business model - CBG manufactures and distributes its own
products, while excess distribution is maximized by distributing 3rd party products Coffee
• Carabao has strong in-house production capabilities of glass bottle and aluminum 3-in-1 instant coffee RTD coffee drink
can (production commenced in late 4Q/18)
Others
• Started to diversify product portfolio into functional drink segment by launching branded
WOODY C+ Lock in March 2020 products Carabao Sport WOODY C+ Lock
Drinking water
electrolyte drink Functional drink
• Strong local distribution channel with presence in both traditional and modern
channels Carabao's market share evolution1
o Over 50 first tier agents
o 31 distribution centers across Thailand 24.2%
23.6%
o >300 cash vans (direct distribution) covering c.180,000 retailers 23.2%
22.6%
• Successfully tapped into global markets
21.1%
21.5% 21.7% 21.4%
21.0%
o Strong presence in international markets including Cambodia, Myanmar,
Vietnam, Laos, China and other countries
o Opportunities in new export markets thanks to the fame of Carabao Cup
2Q21
Remark: 1. Nielsen energy drink market report, as of June 2021 ("Nielsen Report"), in terms of volume.
Note: Since 2018, the market has been driven by some niched players, combining herbal ingredients with energy drinks, which Nielsen categorizes these as energy drink segment. 28Key Milestones
Jun 2017 Mar 2017 Jun 2018 2020 Mar 2020
Sponsors the EFL Cup; established as a JV with Carabao Green Apple was established as a AWD established as a JV with
consequently renamed to SHOWA DENKO Group to launched in Thailand; packaging manufacture WOODY, and WOODY C+
Carabao Cup. produce aluminum cans; CBG resized to 180ml in Mar for Carabao Products Lock a vitamin C drink was
owned 100% of ACM in Mar 2019 launched
2020
2016 2015 2015 Nov 2014 2014
Carabao Drinking Water, Sponsorship of established own DCs Carabao Group began Start Plus Zinc an electrolyte
3in1 Coffee, RTD Coffee Chelsea F.C. and Cash van fleet trading in Stock Exchange beverage was launched;
was launched of Thailand renamed to Carabao Sport in
2018
NO. 1
Challenger
Oct 2002 2004 2004 2012 2013
Carabao Dang In 18 months of the launch, Carabao Began exporting to DCM established as a APG manufactured glass
was launched overtook Krating Daeng position to 15 countries distributor for Carabao bottles for Carabao
become the No. 1 challenger in the products products
market
29Distribution Channels
Strong distribution network covering both modern and traditional trade with unique cash van strategy
Traditional Trade – 83%1
3-tiered agent distribution network – 53%
Domestic
market
c. 50%1 > 50 agents > 1,000 Small to medium
Sub agents/ wholesalers
large wholesalers
Retailers
Cash Vans – 30% 2 (Traditional)
• 31 DCs
• 326 Vans
• 180,000 retailers
Consumers
Modern Trade – 17%1 Convenience stores,
Supermarkets,
Hypermarkets
Others – 0%1
International
Importers, Distributors,
market
International Dealers
c. 50%1
Retailers Consumers
Note: 1. Sales Figure, 2Q21
2. Launched in 2Q15. Reached 31 distribution centers in March 2017 30Distribution Channels
International market
EUROPE ASIA
United Kingdom Malta Afghanistan Laos
Netherlands Azerbaijan Yemen Brunei
Germany Czech Republic Israel South Korea
Greece Denmark China Malaysia
Bulgaria Estonia Cambodia United Arab Emirates
Poland Norway Myanmar India
Italy Sweden Vietnam Iran
Iceland
AFRICA NORTH AMERICA OCEANIA
Nigeria USA Australia
Africa Mexico Tonga
South Africa Papua New Guinea
Senegal SOUTH AMERICA
Ghana Brazil
Mauritius Trinidad
Djibouti Uruguay
Somalia Bolivia
Libya
Pakistan
Kenya
31Marketing Channels
Be wealthy and modern world class brand
• TV commercials for
wider reach
ABOVE • Print ads in
THE LINE magazines,
newspapers and
posters
• Celebrity spokesperson promoting
our brand, as well as enhancing
corporate image
BRAND
• Contributes significantly to
AMBASSADOR • On-ground marketing
establishing our brand
• Regularly sponsor events which • More than 80
appeal to global target consumers BELOW BaoDang Girl Teams,
THE LINE consisting of c.600
members, promote
social activities
32Manufacturing Facilities
State-of-the-art manufacturing facilities to ensure safe and efficient production
Filling production facilities Glass bottle manufacturing facility
• Production capacity of 2.5 billion bottles p.a. • Production capacity of 1.3 billion bottles p.a.
• Production capacity of 2.0 billion cans p.a. • Maximum molten glass production of 310X2 tons
per day
Certifications:
Packaging manufacturing facility Aluminum can manufacturing facility
• Engaged in the manufacture and distribution of • Production capacity of 1.0 billion cans p.a.
packaging such as film, carton box and label. • Technology knowhow supported by SHOWA
• Expect to start commercial operation in 2Q21 DENKO Group, a leading aluminum company
from Japan
33Management Team
Key success of the company Mr. Sathien Setthasit
Chief Executive Officer
VISION
Co-Founder of the Group in 2001
World Class Product, World Class Brand
MISSION Ms. Nutchamai
1. People: Develop our people with good attitude, Thanombooncharoen
willingness to learn, innovation, accountability Managing Director
2. Work System: Execute with concise and Co-Founder of the Group in 2001
international standard work system
3. Organization & Management: Operate with
clear objective and understandable responsibility,
proper organization structure, and project-based
approach
4. Technology: Embed technology and innovation
in our processes through production,
management, sustainability development
Mr. Yuenyong Opakul Mr. Kamoldist Mr. Romtham Mr. Pongsarn
5. Product: Produce quality and well-known world
(Add) Smuthkochorn Setthasit Klongwathanakith
class product
Senior Deputy Managing Deputy Managing Deputy Managing Chief Financial
6. Brand: Be wealthy and modern world class Director Director – Director – Int’l Business Officer
brand • Co-Founder of the Group Production
7. Corporate Image: Be known as world class in 2001 Been with the Group Joined in 2015,
organization with good governance and social • Lead singer of Carabao Been with the since 2015 from CIMB
responsibility • Brand Ambassador of Group since 2002 Investment Bank
Carabao energy drink
34Brand Recognition
Carabao is Thailand’s legendary music-for-life & one of the most respected band in Thailand
35Investor Relations
Carabao Group Public Co., Ltd.
+66 2636 6111 Ext. 882
IR@carabaogroup.com
www.carabaogroup.com/en
393, 393 Silom Building 7th - 10th floor,
Silom Road Silom,
Bangrak, Bangkok 10500
Thailand
36You can also read
