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Analyst Meeting
Q1’19 Financial PerformanceOpportunity Day Q1’ 19
28 May 2019
OSOTSPA
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 orexpectations 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 risksand 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 noliabilities against whatsoever about the opinion or statements of any analyst or other third party. OSP does not monitor or control the content to third party opinions or statements and does not endorse or acceptany responsibility for the content or the use of any such opinion or statement.
The information contained herein has been obtained from sources that the Company considers reliable, but the Company does not represent or warrant that the information is complete or accurate, in particularwith respect to data provided by or regarding third parties. The information in the presentation does not purpose to be comprehensive or to contain all the information that a prospective investor may desire orrequire to decide whether or not to purchase securities of the Company. The information in the presentation might be incomplete or summarized and has not been independently verified and will not be updated.Such information may in the future be subject to audit, limited review or any other control by an auditor or independent party. Therefore, the information included in the presentation may be modified or amendedin the future. The information in this presentation, including but not limited to forward-looking statements, applies only as of the date of this document and is not intended to give any assurances as to futureresults. The Company and each of its agents expressly disclaims any obligation or undertaking to update or release any updates or revisions to the information, including any financial date and any forward-lookingstatements, contained in this [presentation[. This presentation includes forward-looking representations or statements on purposes, expectations or forecasts of the Company or its management up to the date ofrelease of this document. Said forward-looking representations and statements or forecasts are mere value judgments of the Company and do not imply undertakings of future performance. Additionally, they aresubject to risks, uncertainties and other factors, which were unknown or not taken into account by the time this document was produced and released and which may cause such actual results, performance orachievements, to be materially different from those expressed or implied by these forward-looking statements. Moreover, these forward-looking statements are based on numerous assumptions (which are notstated in the presentation) regarding the Company’s present and future business strategies and the environment in which the Company expects to operate in the future. There are many factors, most of them outof the Company’s control, which may cause the Company’s actual operations and results to substantially differ from those forward-looking statements. Accordingly, you should not place undue reliance on forward-looking statements due to the inherent uncertainty therein.
Certain financial and statistical information contained in this document is subject to rounding adjustments. Accordingly, any discrepancies between the totals and the sums of the amounts listed may be due torounding. In additional, certain figures contained in this document, which have also not been subject to financial audit, are combined and pro forma figures. The information and opinions in this presentation arenot based upon a consideration of your particular investment objectives, financial situation or needs. You may wish to seek independent and professional advice and conduct your own independent research andanalysis of the information contained in the presentation and of the business, operations, financial condition, prospects, status and affairs of the Company. This presentation discloses neither the risks nor othermaterial issues regarding an investment in the securities of the Company. The information included in this presentation is subject to, and should be read together with, all publicly available information. Any personacquiring securities of the Company shall do so on their own risk and judgement over the merits and suitability of the securities of the Company, after having received professional advice or of any other kind thatmay be needed or appropriate but not only on the grounds of this presentation. By delivering this presentation, the Company is not providing any advisory, purchase or sale recommendation, or any otherinstrument of negotiation over the securities or financial instruments of the Company. This presentation does not constitute or form part of, and should not be construed as, any offer, inducement, invitation,solicitation or commitment to purchase, subscribe to, provide or sell any securities, services or products or to provide any recommendations for financial, securities, investment or other advice or to take anydecision.
This presentation is not and shall not constitute an offer for the sale of securities in Thailand or any jurisdictions.
By attending to or receiving this presentation you agree to be bound by the foregoing restrictions and limitations and acknowledge that you understand the legal and regulatory sanctions attached to the misuse,disclosure or improper circulation of the presentation.
Agenda
Company Overview
2019 Outlook
Core Strategies Updates
Financial Performance and Activities Updates
OSOTSPA’s 128 Years of History
4
Expanded to Women’s Beauty Care under brand “Twelve Plus”
Launched our Flagship M150
1st introduction of ED in Thailand, with Lipovitan-D from Japan
Expanded to Baby Care under Brand “Babi Mild”
Launched Vitamin C Drink under Brand C-Vitt from Japan
Launched RTD Coffee under Brand M-Presso
Listed in Stock Exchange of Thailand
18911965
1985
19891992
2016
2018
2012
…A move toward International Standards
Established pharmaceutical company in Bangkok, known as “Teck Heng Yoo”
Business Restructuring and Transformation Strengthened the Company with a professional
team of BOD and executives with extensive experiences from various multinational companies
>20 Years(as of December 2018)
Management Experience in the Industries
(2434)(2508)
(2528)
(2532)(2535)
(2555)
(2559)
(2561)
Product Portfolio
5
Beverage Personal Care
Healthcare and Confectionary OEM
6
Our Strengths and Strategies
Leveraging on solid strengths of our core
businesses…… To expand and enhance our position further
Broad and highly recognizable portfolio of brands
with established presence across product lines1
Well established “CLM” presence2
Highly penetrated and robust distribution network3
Strong R&D team with deep local insight4
Fully integrated, highly scaled and flexible
manufacturing allowing for cost competitiveness
and high margin
5
Experienced board of directors and management6
Strengthen domestic presence in broader non-
alcoholic beverages and expand personal care1
Leverage market-leading position in Thailand to
sustain and expand to other regional and
overseas markets
2
Focus on cost efficiency and margin enhancement
through the “net revenue management” principle3
Continuous investment in human capital and
innovation capability4
Our overall objective is to leverage our business strengths to grow faster than the market and also improve our margins
Experienced board of directors
Our board(1) comprises of…
Former/current Presidents/CEOs, Senior
level former public servants
Surin OsathanugrahChairman of the Board Joined Osotspa: 1974 Experience: Former Director of Nai Lert Park Hotel Company Limited;
Vice Chairman of Safety Insurance Public Company Limited
Somprasong BoonyachaiVice Chairman of the Board / Independent Director Joined Osotspa: 2016 Experience: Director of BEC World Public Company Limited, Vice
Chairman of Advanced Info Service Public Company Limited, Director of Intouch Holdings Public Company Limited
Kannikar ChalitapornVice Chairman of the Board Joined Osotspa: 2016 Experience: Chairwoman of Index Living Mall, Director of Siam
Commercial Bank
Krik VanikkulIndependent Director Joined Osotspa: 2016 Experience: Former Deputy Governor (Financial Institution Stability)
at the Bank of Thailand
(1) Board of directors is composed of 15 members in total
From Families7From External
Directors7 OSP President1
Penchun JarikasemIndependent Director and Chairman of the Audit Committee Joined Osotspa: 2016 Experience: Director and member of Risk Management Committee at PTTEP,
Former CFO of PTTEP
Sinee ThienprasiddhiIndependent Director Joined Osotspa: 2016 Experience: Director and member of the Executive Committee at
Dusit Thani PCL
Sethaput Suthiwartnarueput, Ph.D
Director Joined Osotspa: 2016 Experience: Director and member of the Financial Policy Committee
at the Bank of Thailand
Salin PinkayanIndependent Director Joined Osotspa: 2008 Experience: Managing Director of Southeast Asia Technology Co.,
Ltd, Managing Director of Thai Developer Co., Ltd.
Founding family
members
>32 Years of experience in the industry
7
Experienced Management
Our select management has …
23
Years of experience in the industry
On average
Global MNC experiences
Petch OsathanugrahChairman of Executive Committee & CEO Joined Osotspa: 1983 / Years in the industry: 35 Experience: Chairman of the Executive Committee and council
member of Bangkok University, Director of Shiseido (Thailand) Co., Ltd.
Wannipa BhakdibutrPresident Joined Osotspa: 2016 / Years in the industry: 32 Experience: Vice Chairman of the Executive Committee (Food and
Personal Care Products Marketing) at Unilever Thai Trading Co., Ltd.
Porntida BoonsaChief Financial Officer Joined Osotspa: 2017 / Years in the industry: 7 Experience: Vice President (Finance) at Unilever Thai Trading Co.,
Ltd. Held senior positions in different functions across geographies
with MNCs
Rob RijndersChief International Business Officer Joined Osotspa: 2017 / Years in the industry: 25 Experience: Vice President (Customer Development) at Unilever
Thai Holdings Co., Ltd.
Suthipa PanyamahasupChief Marketing Officer
Joined Osotspa: 2016 / Years in the industry: 20
Experience: Vice President (Homecare and Ice-Cream) at Unilever Thai Trading Co., Ltd.
Sarayut JitcharoongphornChief Customer Management Officer Joined Osotspa: 2016 / Years in the industry: 22 Experience: Former Senior Vice President at CPF Trading Co., Ltd.,
Head of General Trade Customer Development at Osotspa
Nukit ChonlacoopChief Manufacturing Officer Joined Osotspa: 2018 / Years in the industry: - Experience: Security, Safety, Health and Environment Manager,
Global Project Advisor and the Manager of Block 3/4 Operation at Esso (Thailand) PCL
Viwat Krisdhasima, Ph.DChief Supply Chain Officer Joined Osotspa: 2018 / Years in theindustry: > 20 years Experience: Vice President-Supply Chain at Unilever Thai Services,
Independent Director at Zarina Group PCL and Shera PCL,
3 from Founding Families Members
Vilairat Charoenwongse-PhelanChief Research and Development Officer
Joined Osotspa: 2018 / Years in the industry: 22 Experience: Vice President, R&D – Innovation at Ferrara Candy
Company USA, R&D Director at Pinnacle Food, USA, Senior R&D Program Manager at PepsiCo North America
8
A Suite of Iconic Brands Enables us to Implement the Portfolio Strategy
9
12 Baht
Energy Drink
Electrolyte Drink
RTD Coffee
Functional Drinks
Baht/Bottle
(Mass Market) (Premium Market)10 Baht 15 Baht
*Target Female Consumers
1
Health benefits from the lactobacillus contained
*Target young consumer,
Age 18-35 years
Vitamin CBenefits from Soy Peptide for cognitive and health benefits
* Target young consumer, Age 18-35 years
2
Launch in Feb 2018
* Launch in Aug 2018, Adding Herbal Benefits
#1 Energy Drink Brand in Thailand
*Target Adult age more than 40 years
Source : Report form Nielsen
Remark : 2018 Market share ranking
25+ Baht
Brain
and
Body
Boo
stW
ake-
Me-U
p Dr
inks
Look
-Goo
d-Fe
el-Go
od
(38 Baht) (15 Baht) (10-20 Baht)
*Regional Brand, strong in North and South
1
Launch in Feb 2019
Product Portfolio – Personal Care
10
Twelve Plus Fragrance Products
Twelve Plus Talcum
Twelve Plus Skin Cleansing
Twelve Plus Specialty Products
Babi Mild Lotion and Moisturizer Babi Mild Baby Home Care and Fabric Care
Babi Mild Baby Bath Babi Mild Baby Bar Soap Babi Mild Baby Talcum
1 21
2
BABY CARE
1
WOMEN’S BEAUTY
CARE
2
Distribution Network is One of Our Key Assets
11
Traditional trade Modern tradeCash van & Vending
Machines
Distributors
70 direct distributors
5,500 secondary distributors
Long-term relationship with Osotspa
Strengths
Key channel for Company’s high volume products
Widely available across the country
Low cost to serve
Key channel for selling Company’s premium and
personal care products
Accelerate distribution of newer
products
Deliver products directly to
retailers and consumers
Point of sales Over 470,000 point of sales
(1.1 point of sales for every km2 in Thailand)
Approximately 16,000 point of sales
(0.3 point of sales for every km2 in Thailand)
Products available across c.16k
vending machines
Proportion of
sales
Different product
nature requires
different distribution
mix78%
Beverage
38%
Personal care
62%
Beverage Personal care
22%
Close to 100% distribution for flagship products
95%(1)
95%(2)
Source: Company information
Note: (1) Numeric distribution coverage for 2018(2) Weighted distribution coverage for 2018
Capture Attractive Growth in International Landscape
12
Country Channel
Leverage strong brand identity and portfolio,
coupled with geographic+ cultural proximity
to grow in CLMV markets
Ensure deep market penetration by
working closely with leading local
distributors / partners
Category
Launch tailored energy and functional
drinks, aiming to become a regional leader
in these categories
Grow in Personal Care products by
leveraging brand strength and launching
new product ranges
Triple “Win” Strategy
Overseas revenue contribution
from International Markets
Domestic beverage &
personal care83%
International beverage
16%
International personal care
1%
Establishing local manufacturing facility through JV with Loi Hein
and backward integration into manufacturing and set up distribution
routes to cover untapped regions
2
1
1
Flexible manufacturing platform, with fully integrated beverage value chain, allowing for cost competitiveness and high margin
13
3 Glass Plants
Beverage Mixing and Filling Plants3
1 Cullet Plant
1 Labelling Plant
2 Personal Care Plant
Fully integrated value chain with
capacity headroom…
Fully integrated, with one of the
largest glass bottle manufacturing
capabilities in Thailand, with
practical capacity of 471,000 tons /
year
Capacity headroom, that can drive
future growth with limited capex
Margin Strategy: Our Margin Improvement Programs
14
Key e&ples
Continuous Efforts to Enhance Return on Assets and overall Profitability
Note: (1) An approach focusing on optimizing pricing and promotions, monitoring and optimizing costs, and coordinating delivery of net revenue and gross profit targets across brands and customers.
Identify savings on cost of raw materials and
packaging materials
Savings on price / unit or volume of raw materials
New formulations
New packaging designs
1
2
3
4
Identify savings from our logistics network
Optimization initiatives (such as transport
optimization)
Vendor management
Reduce administrative expenses
Reviewing each expense item and identify
opportunities for savings
Planning to expand the scope of the program to
cover manufacturing operations
Improve cost
efficiency
Objectives
New formulation of M150 that optimizes costs as well as
appeal to consumers’ preferences
New glass furnace in Ayutthaya which will be functional
in second half of 2018 would add to the operational and
cost efficiency
Implementation Use of proceeds
Enhance margin
Reinvest in the
business
Returns to
shareholders
Key examples
Sourcing strategy for glass cullet that minimizes the
impact of the increasing trend of glass cullet price
Implementation of Net Revenue Management(1) for
achieving sustainable and profitable growth
Agenda
Company Overview
2019 Outlook
Core Strategies Updates
Financial Performance and Activities Updates
Production Efficiency – New facilities
• New glass factory (SGA2)
• New factory in Myanmar
• New cullet treatment lines
• Total Productive Maintenance (Increase capacity without major investment in new production line)
Core Strategies Updates
Strengthen domestic presence in broader non-alc. beverages and expand PC
Leverage market-leading position in Thailand to sustain and expand to overseas markets
Focus on cost-efficiency and margin enhancement through NRM principle
Maintain Energy Drink Market Share (Value) : Q1’19
53.7%
Grow Functional Drink Market Share Q1’18 Q1’19
28.3%35.6%
Personal care sales growth in Q1’19 :
+6.4%Total CLMV sales growth for Q1’19 (at constant FX):
+11.8%
International PC sales growth For Q1’19:
+31.6%OEM Bottle sales – Improve margin overall beverage by sharing fixed costs
Q1'18 Q2'18 Q3'18 Q4'18 Q1'19
Fit Fast Firm
Q1’19 GM
= 34.8%+270bps YoY
+44.5%YoY
Continued impact in Q1’19:
Bev CLM sales growth for Q1’19 (at constant FX):
+10.7%
2019 “Fit Fast Firm” Project►Reap benefits from projects implemented in 2018► Increase efficiency through new cullet treatment lines ►New lighter weight bottles ►Warehouse and distribution optimization►OEM-PC initiatives16
Agenda
Company Overview
2019 Outlook
Core Strategies Updates
Financial Performance and Activities Updates
2019 Core Outlook
18
Company Target and Strategy
2019 Net sales growth: mid-single digit growth
Profitability Improvement
Consistent with mid-term business plan
Domestic Beverage:• Continue to focus on
herbal benefit and NPDs for functional drinks
• Further strengthen Som In-Sum, Chalarm Black Galingale, and C-Vitt
• Expect to add 2-4 NPDs
Domestic PC:• Strengthening key brands
and launching new PC pillars (facial/skin care)
International:• Continue to expand in CLMMyanmar highlights: • Implement route-to-market
model / Strengthen Shark MM / Further build M-150
• Manufacturing Facility to be completed by end-2019
Supply Chain Services:• Expect recovery in OEM
Beverage sales throughout 2019
Fit Fast Firm: • Embarked on various cost-saving
programs
Improved Bev GM: • Cost efficiency improvement after
commission SGA2 (expect to complete in Q3’19)
Improved PC GM:• Improvement driven by product
mix transition
Other Growth Initiatives
19
China: Vietnam:
Fantastic growth in recent years with more potential to come
Population: 90mn (1/3 is Urban)
Vienam PC:Contract signed, products are on main shelf
Vietnam Beverages:In progress of doing detailed market study with potential partner to ensure the best possible entry strategy for our beverages products.
Vending Machine (in Thailand):
992
3,095
2009
2010
2011
2012
2013
2014
2015
2016
2017
Energy Drink Market Size(mn Liters)
24.8
13.8 11.2 9.5 7.1 6.92.2
US
Japan
UK
Thaila
nd
Vie
tnam
Germ
any
Chin
a
Energy Drink Consumption (litre/person/year)
8,571
21,110
2014
2015
2016
2017
As
of
Nov'1
8
Thai Vending Machine Market (# machines)
33,000
450,000
Y0
Y5
Y8
Y10
Future Growth for China(# machines)
>13X growth
CAGR = 25%
CAGR =8 %
Agenda
Company Overview
Financial Performance and Activities Updates
Core Strategies Updates
2019 Outlook
Net profit* +6% vs. 2017Net profit margin** at 12.0% vs. 11.2% in 2017
FY2018 Financial Highlights – by Segment12M18 Normalized sales -0.7% YoY, dragged by OEM sales
21
Myanmar +11.1% (at constant FX). With FX impact, sales flat at +1.4%
•PC Int’l sales grew +42.8% YoY in FY2018
2018 sales dropped from lower OEM and absence of Unicharmsales2H18 OEM bottle sales increase by 29% from 1H18 (after completion of cold tank repair)
Babi Mild +10%Twelve Plus +7%Increased from various NPDs along the period and promotional activities
Som In-Sum +109%C-Vitt +75% M-Presso launched in Feb 2018Launch of ChalarmBlack Galingale turnaround Chalarmfrom -15% Pre-launch to +18% Post Launch
+6% vs. 2017
12.0%Net Profit Margin**
Remark : * Net Profit attributable to owners of the parent ** Net Profit margin to Total Revenue
*
Dividend Payment and Policy
Dividend Paid (after IPO)
• Interim Dividend 0.30 Baht paid on 28 Feb 2019
• Final Dividend 0.39 Baht paid on 23 May 2019
Dividend policy
• At least 60% of consolidated net profit after deducting the legal reserve specified by law or Articles of Association of the CompanyNonetheless, the consideration of a dividend payout shall depend on the Company’s performance, financial position, cash flow, contractual obligations (i.e. loan payments), working capital, investment plans, general economic situation, and related factors as deemed appropriate by the Board of Directors and when in compliance with the laws & regulations.
22
Q1’ 19 Financial Highlights – by Segment
Net profit* +13.4% YoY
Net profit margin** at 14.0% vs. 12.8% in Q1’18
Favorable GM at 34.8%improved by 270 bps YoYfrom “Fitness First” project driving overall costs down
CLMV +11.8% at constant FX, reported Net sales +0.8%
PC Int’l sales +31.6% mainly from Babi Mild launch in Vietnam
OEM +13.8% driven by OEM-Bottle sales (+44.5% YoY & 4% QoQ) after completion of cold tank repair in Q2’18, however partly offset with OEM-PC
Healthcare 19.5% driven by Banner and Tard 4
Twelve Plus +22.2% driven by momentum of Cool Powder and Perfume Mist launched last year.
Babi Mild -7.8% driven high last year stock build-up to prepare for company name change
C-Vitt +148.9%maintained no. 1 position in functional drinks for 3 consecutive quarters since Q3’18
Chalarm +25.7% continued strong growth momentum of ChalarmBlack Galingale
Som In-Sum +21.6% Peptein Launched Peptein
Plus (NPD) in Feb’19
Thailand Beverages
Net Sales: THB 4,388M
4.0%
Thailand Personal Care
Net Sales: THB 564M
3.4%
Others (OEM/ Health care/ Confectionary)
Net Sales: THB 397M
19.2%
International
Net Sales: THB 1,018M
0.3%At constant FX: 8.6 %
Net Profit*
THB 888M
14.0%
Net Profit Margin**
Remark : * Net Profit attributable to owners of the parent ** Net Profit attributable to owners of the parent to Total Revenue from Sales
Total Revenue from Sale 6,366M (+4.2%YoY) driven by Energy Drinks-Herbal Variants, C-Vitt and OEM-Bottle sales
23
(15.1%) (13.9%)
(5.6%) (6.9%)
Q1'18 Q1'19
32.1%
34.5% 34.8%
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
Q1'18 Q4'18 Q1'19
783888
12.8%
14.0%
7.5%
8.5%
9.5%
10.5%
11.5%
12.5%
13.5%
14.5%
0100200300400500600700800900
1,000
Q1'18 Q1'19
To the owner of the parents
24
Total Revenue Growth 2.7% Revenues Gross Margin
SG&A Net Profit
Q1’19 Financial Highlights
Admin Exp
Selling Exp
Net Profit Margin
6,340 6,512
Q1'18 Q1'19
+2.7%
+0.3%
(1,262) (1,322)
Other Income
(20.7%) (20.8%)
Net Sales Analysis: Thai Beverages
+21.6%SALES GROWTH YOY
Chalarm Black Galingale Turnaround Chalarm brandContinued Success of Campaign
“Aroi Jing Mai Manoh” through Activation promotion nationwide
Continued reinforcing brand awareness and ensure adequate supply
+148.9%SALES GROWTH YOY +25.7%
SALES GROWTH YOY
Focus on below-the-line activities
25
Net Sales Analysis: Thai Beverages
37.2%MARKET SHARE
Sponsorship in both music (Bodyslamconcert) and sports (World Super Flyweight Boxing Championship)Communication campaign “Poo
Klar LIPO” with local activations (emphasize of Japan heritage)
8.6%MARKET SHARE
Focus more on online channels and below-the-line activities
Launch new formula Peptein Plus in Mar’19 with Impressive performance in 7-11
4.2%MARKET SHARE
26
+22.2%SALES GROWTH YOY
Net Sales Analysis: Thai Personal Care
Babi Mild White Sakura Massive Trial Campaign in Feb’19
Twelve Plus x BNK48 Cosmetic RangeLaunched in Feb’19
Summer CampaignLaunched in Feb’19
-7.8%SALES GROWTH YOY
The Launch of EXIT x BNK48 Special Collaboration in Jan’19
+22.3%SALES GROWTH YOY
EXIT x BNK48 Collectable Premium in Feb’19
27
Beverage
• M-Family: LINE Official Account for M-Point Collection Campaign
• C-Vitt: New Packaging to expand target customers and occasions
Personal Care
• Babi Mild: New Product Range and Organic Range Launched
Confectionary
• Ole: New Flavors and New Packaging
28
Q2’19 Activities Update
New Facilities Update
29
Brick Laying Ceremony for New Glass Plant (SGA2)
Myanmar Update
JAN’19 FEB’19 Mar’19
Construction Thilawa progress is on track
30
Thilawa Site
31
Thank you
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