vinamilk
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vinamilkTRANSCRIPT
18 September 2013
P R I V A T E A N D C O N F I D E N T I A L
1. Brief corporate profile
2. Group structure
3. Financial Highlights
4. Share capital structure
5. Production facilities
6. Cow farm developments
7. Key investment highlights
8. Five-Year Strategic CAPEX Plan
9. Updated financial performance
10. Q & A
AGENDA:
“To become the leading Vietnamese trusted brand on nutrient and healthy products for human life”
“Vinamilk commits to bring best-quality nutrition to communities that reflects our respect, love and responsibility for the people, life and society”
MISSION
VISION
CORE
VALUES
1. Integrity: Integrity and transparency in actions and transactions.
2. Respect: To have self-respect and respecting colleagues, Company, partners. Tocooperate with respect.
3. Fairness: To be fair with employees, customers, suppliers and other parties.
4. Compliance: To comply with legal regulations and the Company’s Code of Conduct, regulations and policies.
5. Ethics: To respect the established ethical standards and act accordingly.
5
1. Brief Corporate Profile
1991-1994
Introduced UHT milk and spoon yoghurt to the Vietnam dairy market.
1976
Company was founded under the Southern Coffee Dairy Company name with 2 factories.
Launched condensed milk
1988- 1989
Dielac Powdered Milk Factory, the first powdered milk in Vietnam, came into operation and introduced its first batch of product.
2003
Company was formally converted into a joint stock company and renamed as Vietnam Dairy Products Joint Stock Company
2006
Company’s shares were listed on HOSE
Today
No.1 dairy producer in Vietnam
The Region’s Top 200 best Small & Midsize Companies in Asia Pacific in 2010 (Forbes Asia)
Top 5 largest private companies in Vietnam
Own 19.3% stake of Miraka Limited, New Zealand
2017
Total sales reaches US$3bn
Become the World’s top 50 largest dairy products companies
2. Group Structure
3. Financial Highlights
( in VND billion) 2008 2009 2010 2011 2012 CAGRProfit & loss
Total revenue 8,381 10,820 16,081 22,071 27,102 34%
Profit before tax 1,371 2,731 4,251 4,979 6,930 50%
Profit after tax 1,249 2,376 3,616 4,218 5,819 47%
Dividend per share Basic EPS (VND/share) 3,563 6,769 6,834 5,145 6,981 Dividend (VND/share) 3,900 2,000 5,000 3,000 4,000
Balance sheet Registered capital 1,753 3,513 3,531 5,561 8,340 48%Shareholders' equity 4,666 6,455 7,964 12,477 15,493 35%Total assets 5,967 8,482 10,773 15,583 19,698 35%Long term borrowings 22 12 - - - Net book value (VND/share) 26,619 18,378 22,556 22,437 18,577
Financial ratios % profit before tax/Revenue 16% 25% 26% 23% 26%% profit after tax/ Equity 28% 43% 50% 41% 42%% total debts/ Equity 28% 31% 35% 25% 27%
3. Financial Highlights (continued…)
As at 14 August 2013:
- Share capital: 8,339 billion VND (~US$393m)
- Market capitalization: ~ US$5.86 billion
Listed on HOSE: Jan 2006
Vinamilk is highly sought after by foreign investors, proven by limited room left for foreign trading and significant out-performance against the index Trading performance (index is rebased to Vinamilk’s share price)
4. Share Capital Structure
4. Share Capital Structure
Top 10 companies with the largest market capital in Vietnam
Market price13-Aug-13
1 GAS 1,895,000,000 68,000 128,8602 VNM 833,490,871 147,000 122,5233 CTG 3,266,144,348 19,000 62,0574 MSN 705,140,873 88,000 62,0525 VCB 2,317,417,076 26,600 61,6436 VIC 882,459,899 65,000 57,3607 BVH 680,471,434 41,200 28,0358 STB 1,142,511,590 16,900 19,3089 EIB 1,235,522,904 14,400 17,79210 DMP 379,934,260 40,800 15,501
Seq StickerOutstanding
sharesMarket capital in
VND billion
Central
4 production factories Nghe An Binh Dinh Thanh Hoa Da Nang
1 sales office – Da Nang
North
1 production factory Tien Son
1 logistics enterprise
1 sales office – Hanoi
South
8 production factories Thong Nhat Truong Tho Dielac 1 & 2 Mega factory
1 logistics enterprise
1 healthcare branch
1 sales office – Can Tho City
Saigonmilk Can Tho Beverage
As at 30 June 2013, we have 5,389 (2012: 5,000) employees nationwide.
5. Production Facilities
13
North Central
South Central
North
South East
Vinamilk has currently 05 farms with the total of ~ 8,200 cows
Supply chain of milk:
- Local supply from farmers: only raw fresh milk and ~ 25% of the total production demand.
- Imports: only milk powders and ~75% of the total production demand. Imports are mainly from New Zealand, Australia and USA.
6. Cow Farm Developments
Extensive sales and distribution network
Strong “win-win” supplier relationship
Strong market-oriented research and development capabilities, combined with modern production facilities
Highly experienced management with proven track record
Diversified product portfolio
Leading market position in Vietnam’s fast-growing dairy market
Proven track record of robust financial growth
3
4
5
6
2
1
7
Vinamilk possesses the critical qualities to succeed:
7. Key Investment Highlights
Presentation2
The Vietnamese dairy market exhibits strong growth potential…
Source: Euromonitor International report 2009, Food and Agriculture Organization of the United Nations, GSO, DairyVietnam
Key drivers of the Vietnamese dairy product market
Vietnamese dairy product market sales (US$mm)
Continued strong growth of GDP (targeted 7.0-7.5% growth in the next 5 years) and increasing disposable income
Heightened desire for healthy living and greater demand for nutritional products
Increased awareness of the health benefits of dairy products
Supportive government programs encouraging the consumption of dairy products
CAGR = 11.8%
1
5
52 48
37
1624
32
China India Vietnam Indonesia Thailand Mexico US
Dairy sales growth 2010-2015E (%)
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Vietnamese fresh milk output (mt)
CAGR = 18.9%
Per capita production of dairy products in 2010E (kilo)
Source: Food and Agriculture Organization of the United Nations, DairyVietnam
665 698877
980 1039
2005 2006 2007 2008 2009
Advertising and marketing Product innovation Quality assurance
…and we have established ourselves as one of the leading dairy brands in Vietnam 1
Achieved dominant market position through our focus on:
Received numerous prestigious awards…
Vietnamese high quality product
Strong brand, Trusted brand
National Brand 2011-2012
One of the best annual report 2008-2012
The Region’s Top 200 best Small & midsize companies in Asia Pacific 2010(by Forbes Asia)
Top 5 largest private companies in Vietnam 2011
Top 50 companies with the best performance in VN
Top 500 companies with the strongest growth in VN
…on the back of well-defined business strategies
Expansion of market share in existing and new markets
Broaden consumer base while maintaining competitiveness in core products
Development of raw material sources to ensure a reliable and consistent fresh milk supply base
Develop modern cow farms in Vietnam
Import cows from New Zealand, Australia and Thailand to increase the number of cows in Vinamilk’s farms
Develop cow farms overseas, e.g. Cambodia, New Zealand
Diverse product portfolio capturing a larger share of the consumer wallet
Proves our market dominance in all core products of our diverse portfolio
2
Liquid milk Condensed milk
Contributed 22% of 2010 revenue
One of VNM’s core products since 1976
Market share: >80%
Competitors: Dutch Lady
Powdered milk
Include fresh, pasturized and UHT milk
Main competitors: Dutch Lady
Contributed 27% of 2010 revenue 8 lines of products, including Dielac
Mama, Dielac Alpha and Dielac Sure Market share: ~20% Competitors: Abbott, MeadJohnson
Including Powdered milk and Nutrition Powder
Competitors: Dutch Lady, Abbott, MeadJohnson, Nutrifood, Dumex, Nestle
Our traditional products
Competitors: Dutch Lady
Diverse product portfolio capturing a larger share of the consumer wallet (cont’d)
Proves our market dominance in all core products of our diverse portfolio
2
Spoon Yoghurt Healthy beverages
Contributed 22% of 2010 revenue
One of VNM’s core products since 1976
Market share: >80%
Competitors: Dutch Lady
Cheese and ice cream
With various flavors
Main competitors: Dutch Lady
Contributed 27% of 2010 revenue 8 lines of products, including Dielac
Mama, Dielac Alpha and Dielac Sure Market share: ~20% Competitors: Abbott, MeadJohnson
Ice cream is offered with various flavors
Cheese is produced from French production line and has very high nutritious value
Main competitors: Kinh Do
A strong brand, which specializes in pure fruit juice, green tea, milk mixed fruit juice, soft drinks and soya-bean milk
Main competitors: Tan Hiep Phat, URC, Uni-president, Tribeco
Pro
Beauty
Yoghurt
NEW
On average, approximately 15% of our revenue is generated from exports to 16 countries.
Key export markets are Middle East, Cambodia, Laos and Philippines
We have developed one of Vietnam’s most extensive sales and distribution networks
in the dairy industry
A historically strong export business…
… and the leading local distribution network
3
VINAMILKVINAMILK
EXCLUSIVE DISTRIBUTORS
EXCLUSIVE DISTRIBUTORS
RETAILERSRETAILERS
CONSUMERS/END USERS
SUPERMARKETS, METRO,…
SUPERMARKETS, METRO,…
Presentation2
Steady supply of high quality raw milk
Substantial pricing power for Vinamilk
Consistent, fresh supply of raw milk
Competitive pricing policies
Financial support to
farmers
Purchases over approximately 50% -60% of domestically produced raw milk in Vietnam
Offer farmers seasonal subsidies when prices of raw milk experience sharp changes
Milk collection centers located within 30 minutes from farms
Strong “win-win” supplier relationship4
Proximity of facilities
Close relationships with suppliers allow us to maintain and increase production output
Vinamilk gives… …and receives strong support from our suppliers
Strong market-oriented product development capabilities….5
Ability to develop new products based on evolving consumer preferences
Experienced in analyzing consumer preferences and trends
Conduct consumer research with market research companies
Marketing team
Dedicated R&D team of over 10 members
Committed to improve product quality and expand product portfolio.
Signed agreement with 3 leading companies named DSM, Lonza and Chr. Hansen for R&D for research, application and product development
Product R&D team
Thorough understanding of consumer preferences through constant contact at various outlets
Sales team
Packaging Packaging technologies provided by Tetrapak, Bencopack and SIG Combibloc
Inventory management
ERP technology powered by Oracle manages inventory and minimizes spoilage loss
Our state of the art facilities ensure high quality products
Production lines Technologies imported from Germany, Italy, and Switzerland for manufacturing
Spray drying Spray dry technology produced by Niro Inc. of Denmark
Retains high content of nutrients and minerals
… combined with modern production facilities5
Highly experienced management with a proven track record of delivering strong
business performance
Core management team with extensive industry experience in Vietnam
Solid platform and expertise to drive sustainable future growth
6
Vinamilk has a strong management team: CEO and 7 Executive Directors in charge of different areas, inclusive of Sales, Marketing, Finance, Production and R&D, Supply Chain, Raw Materials Development, Project.
The management team has strong education background and industry experiences. Most of them have been growing with the Company for more than 20 years.
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8. Five- Year Strategic CAPEX plan:
In billion dong
Total investment
to 2016
Already paid
Disbursement in 2013
Disbursement in 2014 - 2016
TOTAL 10,539 5,605 2,599 2,335
The CAPEX plan is mainly to increase the production capacity and develop dairy cow farms.
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DIELAC 2 -
(Powdered milk
plant)
Was put into
operations since
April 2013.
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MEGA FACTORY- LIQUID MILK PLANT
To be openned on 30 August 2013
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8. Five- Year Strategic Business Plan (continued…)
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9. Updated financial performance (audited): the first half 2013
% vs
( in VND billion) 2013 2012 % increase/
(decrese) AGM' target
Total sales 15,052 13,137 15% 46%Total profit before tax 4,114 3,370 22% 53%
Net profit after tax 3,374 2,776 22% 54%
YEAR-TO-DATE
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This presentation may contain forward-looking statements. Any such forward-looking statements are based on a number of assumptions about the operations of Vietnam Dairy Products Joint Stock Company (the “Company”) and factors beyond the Company’s control and are subject to significant risks and uncertainties, and accordingly, actual results may differ materially from these forward-looking statements. The Company undertakes no obligation to update these forward-looking statements for events or circumstances that occur subsequent to such dates.
The information in this presentation should be considered in the context of the circumstances prevailing at the time of its presentation and has not been, and will not be, updated to reflect material developments which may occur after the date of this presentation. The information is not intended to provide, and you may not rely on these materials as providing a complete or comprehensive analysis of the Company's financial or trading position or prospects. This presentation also contains information and statistics relating to the dairy industry and related industries. The Company has derived such information and data from unofficial sources, without independent verification. The Company cannot ensure that these sources have compiled such data and information on the same basis or with the same degree of accuracy or completeness as are found in other industries. You should not place undue reliance on statements in this presentation regarding the dairy and related industries. No representation or warranty, express or implied, is made as to, and no reliance should be place on, the fairness, accuracy, completeness or correctness of any information or opinion contained herein. None of the Company, any underwriter of securities of the Company, or any of their respective directors, officers, employees, agents or advisers shall be in any way responsible for the contents hereof, or shall be liable for any loss arising from use of the information contained in this presentation or otherwise arising in connection therewith.
DISCLAIMER