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We care

Mega Lifesciences Public Company Limited (MEGA) Investor Presentation – March 2018

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Disclaimer

The presentation contains forward-looking statements which are based on MEGAs’ current expectations, estimates and projections about its industry, management’s beliefs and certain assumptions.

These forward-looking statements are subject to various risks and uncertainties. No assurance is given that future events will occur or that our assumptions are correct. Actual results may differ materially from those projected.

For any further queries please contact:

Email : [email protected]

Telephone: +66 27694222 Ext. 4230

Fax: +66 27694244

mailto:[email protected]



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1. Business Overview

The journey

Business Segments

• OEM business

• Mega We CareTM branded products business

• MaxxcareTM distribution business

2. Financial Overview

3. Leadership and Shareholders

4. Future outlook

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The journey so far…. Key milestones..

Company

Incorporated

1982

• Commenced branded products business

• Acquired Medicrafts brand

1993-94

• Received approval from Thai FDA for Samut Prakarn facility in Thailand

• Began manufacturing nifedipine for Berlin Pharmaceutical Industry Co. Ltd

1985-86

Expanded into Vietnam, Myanmar and Cambodia to sell branded products and started distribution business

1995-96

Established manufacturing plant in Australia

2002

• Became market leading branded products company in key Southeast Asian markets

• Leading distributor of pharmaceutical and OTC products

• Acquisition of Eugica brand in Vietnam

2012

• Commissioning of new plant in Australia

• Planned manufacturing expansion in Thailand

• Successful IPO on SET

2013

• Acquired Bio-Life Marketing SDN. BHD. Malaysia

• Mega Malee joint venture

• Wellness We Care center established

• Construction of own state-of-art warehouse in Myanmar approved

2016

Started as an OEM player and became largest soft gel

manufacturer in Southeast Asia

Started branded and distribution business

Emerged as a leading branded and international distribution

player in Southeast Asia

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Distribution Business

Branded Products Business

What we do…

OEM Business

Mega Lifesciences PCL business segments

THB 3,428 mn 48.8%

THB 473 mn

6.7%

THB 2,179 mn 73.6%

We develop, manufacture,

market and sell our own brand of

market leading medicinal

supplements, prescription

pharmaceutical products and

OTC products, mainly sold in

developing countries with

market leading presence in

Southeast Asia and growing

presence in Sub-Saharan Africa.

We market, sell and distribute

various branded prescription

pharmaceutical products, OTC

and consumer products in

Myanmar, Vietnam and

Cambodia. Our clients include

leading domestic and

international pharmaceutical and

consumer goods companies.

In addition to manufacturing our

own branded products, our

manufacturing facilities in

Thailand and Australia accept

various production orders from

third-party customers.

Mega We Care and Maxxcare are key

businesses

*

* The information under this segment includes impact from Bio-Life (a newly acquired company in Dec’16 ) and new projects which are in their nascent stage.

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76.1%

21.0%

2.9%

52.9%42.2%

4.9%

Mega We Care contributes maximum to the business…

Mega We Care

Maxxcare

OEM

Revenue by Segments FY2017

THB

4,053mn

THB

5,078mn

THB

466mn

THB

9,597mn

THB

4,320mn

Mega We Care contributed 53% of total revenue and 76% of total gross profits while Maxxcare contributed 42% of total revenue and 21% of total gross profits in 2017

Gross profits by Segments FY2017

THB

907mn

THB

3,289mn

THB

124mn

Mega We Care

Maxxcare

OEM

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We derive majority of our revenue from Southeast Asia while our reach in African continues to widen

Southeast Asia and Indochina contributed 85% and 76% of our operating revenue in FY2017

1.Revenues exclude other income

Philippines

Indonesia

Malaysia

Singapore

Myanmar

Cambodia

Vietnam Thailand

Azerbaijan

Sri Lanka

Uzbekistan

Yemen

United Arab Emirates

Mongolia

Hong Kong

Ghana Kenya

Nigeria

Tanzania

Uganda

Kazakhstan Ukraine

Russia

Belarus

Peru

Legend

Countries with sales of our branded products

Countries with manufacturing or product development capabilities

Ausralia

India Trinidad

Rwanda

Burundi

South East Asia 85%

Rest of World 15%

Southeast Asia accounts for majority of revenues1 Revenue Breakdown by Region (FY2017)

Sudan Ethiopia

Zambia

Nepal

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Key value drivers

Leading distributor of pharmaceutical and OTC products in select frontier markets of Myanmar, Vietnam and Cambodia (Refer to slide 17)

2

Focused on fast growing markets including a unique established and market leading presence in the Myanmar market (Refer to slide 18)

3

High quality products manufactured in world-class manufacturing facilities accredited by international regulatory agencies (Refer to slide 12)

4

Strong product pipeline driven by an efficient and targeted product development strategy (Refer to slide 15) 5

Proven track record of delivering growth and profitability (Refer to slide 24) 6

Experienced management team instrumental in building the business is significantly invested in the Company (Refer to slide 37)

7

Market leading own consumer health and pharmaceutical brands in fast growing developing markets (Refer to slide 11) 1

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The journey

Business Segments

• OEM business





4. Future outlook

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TM Branded products business

Categories Description Key Brands

Medicinal

supplements

• Products which provide health benefits in addition to the basic nutritional value found in normal diet.

• Regulation varies across jurisdictions but generally regulated for their manufacturing, safety, efficacy, labeling and marketing.

• Dermatology , general health/Immunity, gastroenterology, men’s/women health and orthopedics are the key therapeutic categories.

Prescription Products

• Medicines only available for purchase by consumers with a medical prescription

• Strictly regulated by authorities as to their manufacturing, safety, efficacy, labeling and marketing.

• Diabetology, dermatology , gastroenterology and orthopedics are the key therapeutic categories.

OTC

Products

• Medicines sold directly to consumer without a prescription from a healthcare professional.

• Analgesics , gastroenterology and cough and cold are the key therapeutic categories.

We sell medicinal supplements, prescription and OTC products within our branded business

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Own Brand Rank Therapeutic

Category (TC)

Nat C

#1 Vitamin C

Nat B

#1 Vitamin B Complex

Fish oil

#1 Anti-atheroma

Natural

Gofen

#4 Anti-rheumatics Non-

steroidal


Category (TC)

Ferrovit

#1 Haematinics

Enat

#1 Vitamin E

Calcivita

#1 Calcium Supplements

Livolin Forte

#1 Hepatoprotectant

Prenatal

#2 Prenatal

Nutrivita

#2 MVMM


Category (TC)

Enat

#1 Vitamin E

Eugica candy

#2 Pharyngeal preparation

Acnotin

#1 Oral Anti-acne

Preparation

Ferrovit

#4 Iron Combination

Products

Giloba

#2 Cerebral and

Peripheral Vascular

NNO

#3

Emollients and Protectives

Our market leading medicinal supplements, branded generic and OTC brands

Source: Internal assessment and analysis

Thailand Vietnam Myanmar

Acnotin

#1

Oral Anti-acne Preparation

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Thailand Manufacturing Facility 1 – Soi 6, Samutprakarn • Commenced production in 1985

• Manufactures: Soft gels, Hard gels and Sachets

• Approved by German health authorities, the Thai FDA and the Australian TGA

Thailand Manufacturing Facility 2 – Soi 8, Samutprakarn • Commenced production in 2009

• Manufactures: Soft gels, Hard gels, Tablets and Sachets

• Approved by German health authorities, the Thai FDA and the Australian TGA

Australian Manufacturing Facility – Pakenham Facility • Facility replaces the manufacturing facility established in Dandenong, Melbourne

• Commenced production in 2nd quarter 2013

• Manufactures: Hard capsules, Tablets and Powders

• Approved by Australian TGA

World-class manufacturing facilities subordinated to

Mega We CareTM branded products

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High quality products manufactured in world-class facilities accredited by international regulatory bodies

State of the art quality control laboratory Internationally accredited manufacturing facilities

Manufacturing facilities in Australia and Thailand

These facilities are accredited and regularly inspected by:

• German health authorities

• Australian TGA

• Thai FDA

• Additional GMP certifications from other countries

• Australian TGA approved since 1992 • Amongst the few manufacturers globally,

who apply the same standards for the manufacturing of medicinal supplements as with pharmaceutical products

• Team of more than 160 professionals in our Quality Assurance and Quality Control teams to ensure our products comply with the highest quality standards

• State of the art QC laboratory with world class Quality Assurance (“QA”) systems and EU GMP standard manufacturing facilities make us amongst the leading such facility in its category in Thailand and Southeast Asia

Internationally accredited facilities Sizeable and dedicated teams monitor quality Significant investment made into

infrastructure

We manufacture medicinal supplements to pharmaceutical standards

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Science-based sales and marketing approach to build awareness of the safety and efficacy of our brands

“Science-based” sales and educational approach catering to medical customers

Overview

• Customers of branded products business include:

– Pharmacies

– Hospitals

– Clinics

– Health practitioners

– Physicians

• Direct promotion to these channels to strengthen market recognition and build brand loyalty

• Sales representatives and product consultants promote products through

– Educational seminars

– Trade shows

– Product information and promotional material

– Academic trainings

– Informational sessions for medical professionals

• Sales force includes members with a medical background

Sales and product consultants promoting Mega products

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Product development strategy

Efficient and targeted product development strategy drives a strong product pipeline

Medicinal supplements

• Identify new clinically-effective and safe product candidates

• Create line extensions of existing established products

Prescription Pharmaceuticals

• Review effective pharmaceutical compounds which have been successful for major originator companies

• Products with expired or due to expire patents

OTC

• Develop products which offer the following: faster relief, are easy to use, have better formulations for self medication, and will be recommended by pharmacies

Our objective is to develop new products which offer consumers health and wellness benefits

Products - Key information as at 31 Dec 2017

Existing registered unique formulations:

# of unique formulations as at Dec'16 256

# net increase during the period* 73

# of unique formulations as at Dec'17 329

Existing product registrations:

# of product registrations as at Dec'16 873

# net increase during the period* 136

# of product registrations as at Dec'17 1,009

Product pipeline:

Applications pending for registration:

# of unique formulations 67

# of product registrations 361

# of unique product formulations under development 74

* includes products from Bio-Li fe (Malays ia).

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The journey

Business Segments

• OEM business





4. Future outlook

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Key Distribution Markets

Myanmar Vietnam Cambodia

Market Positioning • Leading international

distributor of pharmaceutical and OTC products

• Leading international distribution of pharmaceutical and OTC products

• Leading international distributor of pharmaceutical and OTC products

Distribution Infrastructure

• 9 warehouses strategically located across Yangon, Mandalay, Mawlamyaing, Naypyidaw, Taungyyi and Lashio

• Access to around 30,000 outlets representing c.85% geographical coverage

• 3 strategic storage locations

• Access to around 12,000 outlets

• 2 warehouse located in Phnom Penh and Battambang

• Access to around 9,900 outlets

% of Distribution Sales (FY2017)

56% 31% 12%

We are a leading distributor of pharmaceutical and OTC products in select frontier markets

Distribution business

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72

120

2017 2022

8

38

86

Myanmar Vietnam Thailand

Mega is well-positioned to capitalize on this development

… With a leading position in Myanmar A key market with significant growth potential

1995

85%

9

56%

1 Estimates IMF, April 2017, 2 as at 31Dec 2017.

Establishment date testament to our long-standing presence in the country

of FY2017 MaxxcareTM revenues generated in Myanmar

# of strategically located warehouses

Extensive distribution reach covering 85% of the country

Myanmar significantly lags behind Vietnam

and Thailand in healthcare spend

c.1,4432 # of employees in Myanmar

1GDP in USDbn. Expected to growth at healthy rates

Pharma market (USD per capita) Significant head room in Myanmar for future growth

11% Of consolidated Mega We CareTM revenue in FY2017 with market leading products in select categories

• Economy likely to grow at a healthy rate of 10.7% in 2017 -’22

• Existing Pharma market size at 1/10 of Thailand, offers tremendous future growth opportunities

• Required infrastructure to capitalize growth opportunity already in place

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Our value-added distribution business models for pharmaceutical and consumer products

Conventional distribution services (CDS)

• Our integrated approach lends enhanced efficiency and quality control of our products at every stage of our operations from procurement to delivery to our end consumers

• We purchase products from our principals, subject them to a quality control inspection, then warehouse the products in a climate-controlled environment until receipt of end customer orders. We arrange for logistics services and ensure the timely delivery of products

1

2

3

Sales and conventional distribution services (SCDS)

• In addition to our conventional distribution services, we also provide sales support to our principals

• Our sales channels include pharmacies, hospitals and clinics for pharmaceutical products and supermarkets, department stores, key accounts, wholesalers and dealers for consumer products

Marketing, sales and conventional distribution services (MSCDS)

• Our pharmaceutical and consumer products teams provide a complete package of marketing, sales and distribution services tailored to our principals and their products

• The teams market directly and engage in marketing activities through available channels

Principals can choose from any of our three service models to help meet their distribution needs

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Advanced information technology systems provide valuable business intelligence for our principals Overview

• Our advanced IT systems allow us to collect, analyze and derive business intelligence across each of our distribution markets

• We offer a broad range of value-added services, including: – Inventory tracking systems – Inventory management systems – Access to valuable market data – Real-time information sharing

• Our principals can leverage on the array of value-added services we offer in order to: – Increase operational efficiency – Reduce inventory cost, fulfillment cost and operational

expenses – Tailor their marketing activities to target their

customers – Improve overall efficiency of their businesses

• We believe this is a key competitive advantage and it strengthens the existing principal and customer relationships

Through our advanced IT systems we can provide value-added services to help our principals increase operational efficiency, reduce inventory cost, fulfillment cost and operational expenses, and tailor their marketing activities

Our teams collecting real time data on the field

We capture all aspects of our relationship

with customers,

providing us with current

market insights which

we use for effective sales & marketing

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The journey

Business Segments

• OEM business





4. Future outlook

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OEM Business

In addition to manufacturing our own branded products, our manufacturing facilities in Thailand and Australia accept production orders from third-party customers

• OEM business contributed 4.9% and 2.9% to our overall operating revenues and overall gross profits for FY2017.

• We provide contract manufacturing of nutraceuticals, prescription pharmaceuticals and OTC products for third-party customers.

• Most are long standing customers of the business.

• OEM business provides us productivity and efficiency benefits through the utilization of available manufacturing capacity.

• The contribution of OEM to overall business of MEGA is expected to remain around current levels.

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The journey

Business Segments

• OEM business





4. Future outlook

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1

Figures inTHB mn 2012 2013 2014 2015 2016 2017 CAGR

Operating Revenue 5,965 7,034 7,730 7,945 8,810 9,597 10.0%

Gross profit 2,633 2,959 3,105 3,406 3,687 4,320 10.4%

Selling and Admin. exp (SGA) 1,980 2,236 2,471 2,660 2,674 2,965 8.4%

SGA (% to revenue) 33.2% 31.8% 32.0% 33.5% 30.4% 30.9% na

EBITDA 800 888 787 986 1,107 1,479 13.1%

EBITDA (% optg.revenue) 13.4% 12.6% 10.2% 12.4% 12.6% 15.4% na

EBIT 723 789 655 841 955 1,324 12.9%

Net Profit 578 624 548 696 795 1,113 14.0%

Net profit (% optg.revenue) 9.7% 8.9% 7.1% 8.8% 9.0% 11.6% na

EPS (in THB) 0.79 0.84 0.63 0.80 0.92 1.29 na

Return on equity 38.2% 23.1% 14.3% 16.7% 17.6% 22.4% na

Net cash from operations 342 466 614 609 1,250 927 na

• Given, MEGA’s market position, strategy and future potential in its markets, we expect to double 2014 business in 5 years ; growth trajectory expected to be non-linear.

• Net profit CAGR 2012-‘17 of 14%. Net profit decline in 2014 was mainly a result of lower growth in Mega We CareTM revenue, additional overheads from the capacity expansion, and spending towards business expansion activities in Africa and Myanmar.

• Net profits in FY17 of THB 1,112.8mn (including THB 41mn from Bio-Life), up 40% YoY. Increase in net profits was mainly a result of growth in Mega We CareTM revenue, better gross profits and steady SGA expenses. New projects caused a net outflow of THB 25.9mn.

• Board of Directors proposed final dividend of 40 satang per share taking FY17 dividends to 70 satang per share representing 54.4% of FY17 net profits and growth of 48.9% YoY in FY17.

Steady earnings and healthy cash flows ….

2

1. THB 57.7 million attributable to forex loss in 2015 has been classified as selling expenses in audited financials per TFRS guidance; given the charge being a forex loss, the amount has been adjusted from forex

gain/loss for the year. 2. EPS in 2013 is calculated on weighted average number of shares totaling to 746.8mn shares compared to actual outstanding shares of 865.2mn as 31 December’13 ,given the requirement

of TFRS. EPS for 2013 based on 865.2mn shares would have been THB 0.72 per share.

• 2017 revenue grew by

8.9% YoY,

• net profits were up by

40% YoY, and

• dividends for 2017 at 70

satang per share, 54.4%

of profits, up 48.9% YoY

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498 473 424 480 399 467

2,767 3,132 3,694 3,558 4,160 4,053

2,700

3,428 3,612 3,907

4,251 5,078

2012 2013 2014 2015 2016 2017

Key business continues to grow with significant head room for future growth…

1. Thailand, Myanmar, Vietnam, Cambodia, Malaysia, Philippines, Indonesia and Singapore. 2. Thailand, Myanmar, Vietnam and Cambodia.

Mega We Care

Maxxcare

OEM

Operating revenues (THBmn)

CAGR 13.5%

CAGR 7.9%

CAGR (1.3%)

Revenue mix (%) across segments

Mega We Care

Maxxcare

OEM

• Overall operating revenue CAGR of 10% in 2012-’17, driven by Mega We

Care (+13.5%) and Maxxcare (+7.9%).

• Overall operating revenue in FY17 grew by 8.9% YoY driven by Mega We

Care growth of 19.4% YoY. Mega We Care growth excluding Bio-Life (the

newly acquired company in Dec’16) was 9.5% YoY in FY17.

• SEA1 and Indochina2 contributed 84.8% and 76.4% of overall operating

revenues in FY17.

5,965

7,034

7,730 7,945

8,810

9,597

8 7 5 6 5 5

46 45 48 45 47 42

45 49 47 49 48 53

2012 2013 2014 2015 2016 2017

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2012 2013 2014 2015 2016 2017

• Net profits grew at healthy CAGR of 14% between 2012-‘17.

• Net profit in FY17 was up by 40% YoY. Increase in net profits was mainly a result of growth in Mega We Care revenue, better segmental gross margins and steady SG&A expenses.

• Decline in FY14 net profit was mainly a result of lower growth in Mega We CareTM revenue (slow down in Thailand and Ukraine), additional overheads from the manufacturing capacity expansion, and spending towards business expansion activities in Africa and Myanmar.

• Key segmental gross margins remained steady over years.

• Improvement in overall gross margins in FY17 was mainly led by growth in Mega We CareTM revenue resulting in better revenue mix and higher segmental gross margins.

Steady segmental gross margins and growing net profits

Gross margins

Net profits (THBmn)

Overall gross margins are influenced by segmental gross

margins and revenue mix.

578 624

548

696

1,113

795

44.1% 42.1% 40.2% 42.9% 41.8% 45.0%

64.2% 63.6% 62.1% 64.8% 63.9% 64.8%

28.2% 22.4% 21.5% 21.0% 21.5% 22.4%

23.8%17.0% 16.2%

26.1%

19.5%

26.5%

2012 2013 2014 2015 2016 2017

Overall

Mega We Care

Maxxcare

OEM

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362 422

325 280

380 424

2012 2013 2014 2015 2016 2017

2,077

2,676 2,898 3,182

3,399

4,064

2012 2013 2014 2015 2016 2017

262 330

388 445

472

589

2012 2013 2014 2015 2016 2017

Mega We CareTM revenue mainly driven out of Southeast Asia complimented well by Africa

Revenue by geography (THBmn)

Southeast Asia (THBmn) Africa (THBmn)

Top 15 products contributing over 55% of revenue Market leading position in key markets, growing reach in Africa

and new product launches to lead future growth underpinned

by under-penetration and low per capita consumption of

medicinal supplements in our key markets compared to

developed countries.

• Mega We Care revenue CAGR 2012-’17 of 13.5%, driven by SEA

CAGR of 14.4% and a CAGR of 17.6% in Africa.

• SEA contributed 80% and Africa 11.6% of Mega We Care

revenues in FY17.

• Mega We Care revenue in FY17 grew by 19.4% mainly driven by

SEA growth of 19.6% YoY.

Others (THBmn)

34.0% 33.2% 31.7% 30.2% 29.6% 29.9%

51.6% 49.9% 47.7% 46.4% 46.0% 45.9%

64.7% 62.6% 60.1% 57.9% 56.7% 56.9%

2012 2013 2014 2015 2016 2017

Top 5 products

Top 10 products

Top 15 products

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2%7%

6% 6% 10% 10% 12%

36%31% 28%

31% 30% 31%

55%63% 66%

59% 60% 56%

2012 2013 2014 2015 2016 2017

MaxxcareTM revenue growth driven by Myanmar…

Revenue mix (%) across geographies

Myanmar

Vietnam

Cambodia

Nigeria

Myanmar

• largest market with significant historic growth and

future opportunities …

• Pharma market size at 1/10 of Thailand

• Infrastructure and capabilities in place to support

future growth in business

• We provide distribution business to third party principals in Myanmar, Vietnam and Cambodia (The operations for third parties in Nigeria was discontinued since 2013).

• Revenue CAGR of 7.9% during 2012-’17; mainly driven by Myanmar with CAGR of 8.5% during the same period.

• MaxxcareTM revenue in FY17 was down by 2.6% YoY. Decline in FY17 was mainly a result of loss of a principal in Myanmar; newly joined principals are expected to offset this decline in due course. Maxxcare business is expected to fair better in FY18.

CAGR 7.9%

Revenue

THBmn 2,767 3,132 3,694 3,558 4,160 4,053

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Mega We CareTM and MaxxcareTM gross margins remain steady ….

• Maxxcare gross margins have remained steady over years.

• Higher gross margin in 2012 was mainly a result of change in business model for one of our principal in 2012.

• Gross margins are mainly influenced by change in principal and service mix amongst other factors.

Mega We Care gross margins

Maxxcare gross margins

• Mega We Care gross margins have remained steady over years.

• Slight variation in the margins are mainly a result of product mix and country mix amongst other factors.

64.2% 63.6%62.1%

64.8%63.9%

64.8%

2012 2013 2014 2015 2016 2017

25.4%22.4% 21.5% 21.0% 21.5% 22.4%

0%

10%

20%

30%

2012 2013 2014 2015 2016 2017

Reported gross margin Normalized gross margin

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17% 19% 25%34%

23% 31%

31% 29% 16% 7%

5%4%

52% 53% 59% 60%72% 65%

2012 2013 2014 2015 2016 2017

OEM business

Revenue mix (%) across geographies

Australia

Thailand

Others

Revenue

THBmn 498 473 424 480 399 CAGR

(1.3%)

Gross margins

• Revenue CAGR has seen a decline of 1.3% over 2012-’17. Revenue growth of 16.9% YoY in FY17 was mainly driven by demand from overseas customers.

• Gross margins are driven by revenue growth and customer mix amongst other factors.

OEM business contributed 4.9% of total operating

revenue and 2.9% of total gross profits in FY17.

466

23.8%

17.0% 16.2%

26.1%

19.5%

26.5%

2012 2013 2014 2015 2016 2017

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596 631 670 732 737 790

653 833 910 932 863 922

731 771

891 996 1,074

1,252

2012 2013 2014 2015 2016 2017

13.9% 12.3% 11.7% 12.6% 11.8% 11.6%

19.3% 19.5% 20.2% 20.9%18.5% 19.3%

33.2% 31.8% 32.0% 33.5%30.4% 30.9%

2012 2013 2014 2015 2016 2017

Admin expense Selling expense Overall SGA expense

• SG&A expense was 30.9% of operating revenue in FY17 as compared to 30.4% in FY16. In absolute terms SG&A expense in FY17 increased by 10.9% YoY. Apart from relatively higher spending in FY17; Bio-life inclusion also contributed to increase in SG&A expenses.

• Advertisement and personnel cost constituted 42% and 31% of total SG&A expenses in FY17.

SGA benefiting from increased scale

SG&A as a percentage to revenue

Advertisement and personnel cost are key elements of SG&A (THBmn)

Personnel

Advertisements

Others

1,980 2,236

2,471 2,660 2,674

CAGR 8.4%

SG&A as a percentage to revenue has reduced over

years from 33% in 2012 to 31% in recent years.

2,965

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Strong balance sheet and stable cash cycle..

Note : Balance sheets elements of previous years are based on reclassifications of audited financials.

1. Cash and bank balances as at balance sheet dates includes non-restricted term deposits with banks. 2.Capex towards tangible assets and acquisitions.

Key balance sheet elements (THBmn) 1

Net cash position of THB 662mn and net debt to equity

of (0.13) times as at Dec’17

• Increase in equities in 2013 was driven by issue of ordinary shares as part of IPO.

• Cash cycle days of 120 to 130 days; remained steady at 123 days in Dec’17 compared to 121 days in Dec’16.

• Capex spending during 2012-2014 includes, commissioning of new plant in Australia, expansion of manufacturing capacity in Thailand to double the softgel capacity and acquisition of Eugica brand for THB 185mn.

• Capex spending in 2016 mainly includes THB 592mn towards acquisition of Bio-Life (outflow, net of pre-existing cash in transferee company). THB 167mn towards new land near manufacturing plant in Thailand as part of future expansion plan and THB 151mn towards acquisition of leasehold rights of land in Myanmar for construction of state-of-art warehouse.

• Capex spending of THB 270mn spent in FY17, mainly towards construction of state-of-art warehouse and office space in Myanmar and towards construction of warehouse at manufacturing plant in Thailand.

Dec'12 Dec'13 Dec'14 Dec'15 Dec'16 Dec'17

Assets 4,332 6,551 6,732 7,610 7,941 8,720

Outside liabilities 2,621 2,858 2,754 3,275 3,261 3,475

Equity 1,710 3,693 3,978 4,335 4,680 5,244

Net cash/(debt) (845) 543 714 748 547 662

Capex spent2 624 352 160 181 1,016 270

Net debt/Equity (times) 0.49 (0.15) (0.18) (0.17) (0.12) (0.13)

Receivables 1,288 1,747 2,024 2,263 2,233 2,520

Days 81 78 88 97 92 89

Inventories 1,442 1,685 1,649 2,067 1,889 2,219

Days 127 138 130 147 139 140

Trade payables (769) (1,168) (1,306) (1,603) (1,519) (1,598)

Days (84) (86) (96) (115) (110) (106)

Cash cycle days 123 130 121 129 121 123

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Healthy cash flows1 ….

1. Cash and bank balances includes cash and cash equivalents and unrestricted term deposits with banks ; hence redemption and investment in term deposits with bank has not been considered as investing activities.

Cash flows (THBmn)

Inflow from operating activities Inflow/(Outflow) – financing activities Outflow from investing activities

• Healthy operating cash flows over years. Improvement in 2016, driven by higher profits and improvement in working capital. Operating cash in FY17 came in at THB 927mn driven by higher profits and investment in working capital.

• Capex spending is mainly towards capacity expansion, improvements and acquisitions. Capex spending in 2016 mainly includes THB 592mn towards acquisition of Bio-Life (outflow, net of pre-existing cash in transferee company). THB 167mn towards new land near our manufacturing plant in Thailand as part of future expansion plan and THB 151mn towards acquisition of leasehold rights of land in Myanmar for construction of state-of-art warehouse. Capex spending in FY17 was mainly towards construction of state-of-art warehouse and office space in Myanmar and towards construction of warehouse at our manufacturing plant in Thailand.

• Cash flows from financing activity primarily includes movements in loan and dividend payouts. In FY17, net cash outflow from financing activities was THB625mn, mainly arising from dividend payouts during the year and reduction in working capital loans.

342 466

614 609

1,250

927

2012 2013 2014 2015 2016 2017

626

396

202 174

1,006

307

2012 2013 2014 2015 2016 2017

304

1,103

(671)

(247)(473)

(625)

2012 2013 2014 2015 2016 2017

We care


The journey

Business Segments

• OEM business





4. Future outlook

35 We care

Our organization structure

Mega Lifesciences Public Company Limited ( MEGA)

(Thailand)

99.99% 99.99%

98.99% 99.99% 99.96% 99.99% 99.99%

99.99% 99.99% 99.99% 99.99% 99.99% 49.00%

99.99%

Natural Health Foods Ltd. (Thailand)

99.99%

Mega Lifesciences PTY. Ltd.

(Thailand)

99.96%

Mega We Care Ltd. (Thailand)

Mega Lifesciences PTY Peru S.A.C.

(Peru)

Mega Products (Mauritius) Ltd.

(Mauritius)

97.87%

Mega Lifesciences Sdn. Bhd. (Malaysia)

PT Mega Lifesciences (Indonesia)

Mega Lifesciences PTY Ltd.

(Cambodia)

E-Sense Ltd. (Thailand)

Mega Lifesciences Ltd. (Myanmar)

Mega Lifesciences (Vietnam) Ltd.

(Vietnam)

Mega Lifesciences Nigeria Ltd.

(Nigeria)

Mega Lifesciences Ghana Ltd.

(Ghana)

Mega Lifesciences Pvt. Ltd.

(India)

Mega Lifesciences Pte. Ltd.

(Singapore)

Mega Lifesciences (Australia) Pty. Ltd.

(Australia)

Mega Product (Yemen) Ltd.

(Yemen)

Note: As at 31 December 2017

Mega Lifesciences Limited (Ukraine)

100.00%

Bio-life Marketing Sdn.Bhd (Malaysia)

100.00%

MEGA MALEE LTD (THAILAND)

51.00%

Direct subsidiary of MEGA

Subsidiary of subsidiary

Joint venture

Associate of subsidiary

Maxxcare Limited (Myanmar)

100.00%

Pranaa Food For Life

Company Ltd. (Thailand)

30.00%

36 We care

Our Board of Directors

10

1. Mr. Mechai Viravaidya ‐ Chairman of the Board of Directors & Independent Director

6. Mr. Ishaan Shah – Director

2. Mr. Alan Kam ‐ Independent Director / Chairman of Audit Committee 7. Ms. Sameera Shah – Director

3. Mr. Manu SawangJaeng ‐ Independent Director / Chairman of Remuneration and Nomination Committee

8 Mr. Shiraz Erach Poonevala – Director

4. Mr. Thor Santhisiri ‐ Independent Director / Audit Committee 9. Mr. Vivek Dhawan – Director and CEO / Remuneration and Nomination Committee, Chief Coach

5. Mr. Kirit Shah ‐ Director / Remuneration and Nomination Committee 10. Mr. Thomas Abraham – Director , CFO and Head Coach

1

2

3 4

5

6 7 8

9

37 We care

Management ably supported by other experienced in-country personnel and teams

Management team instrumental in building the business is significantly invested in the Company

Vivek Dhawan Chief Executive Officer and Chief coach

• Joined Mega in 1986

Thomas Abraham Chief Financial Officer and

Head coach


Duangnapa Tongsiri President and Head coach, Mega We Care , Thailand

(excluding Manufacturing)


Girish Wadhwa President and Head coach,

Mega We Care and Maxxcare, Myanmar


Paramjit Singh President International and

Head coach , Mega We Care and Maxxcare

(excluding Thailand , Myanmar and Manufacturing) Joined Mega in 1993

Management team has a collective history of over 180 years working with the Company. As at 31 Dec 2017, management including their family members held 11.4% of MEGA shares.

Apichai Chancharusiri Manufacturing, 1985

Pornchai Wongpayak Quality Control, 1990

38 We care

Our shareholding structure as at 31 December 2017

Management Shah Family

38.12% 11.36% 50.08% 0.44%

Other Investors Unistretch Company Ltd.

Mega Lifesciences Public Company Limited ( MEGA)

Shah group 50.52%

Foreign inst. 50.3%

Thai retail 12.6%

Thai inst. 25.8%

Others 11.3%

39 We care

23 27 25 28 26 28

947 1,062 985 1,058 1,014 1,062

1,467 1,720 1,744 1,769 1,778 1,614

1,348

1,444 1,540 1,512 1,574 1,665

2012 2013 2014 2015 2016 2017

Steady growth in our peoples strength

MEGA’s core assets – its people…

Overview

• Mega prides on its ‘people-first’ culture which focuses on the development of human capital.

• We focus on educating and developing skills of managers and employees.

• Seek to help all employees capitalize on their strengths and develop to their full potential.

• There have been no major labour disputes in the workforce.

Mega We Care

Maxxcare

Manufacturing

3,785

4,253 4,294 4,367 4,392

Corporate/ others

4,369

We care


The journey

Business Segments

• OEM business





4. Future outlook

41 We care

Future Outlook... The future of our past and present ….

2014 1994

Became the largest OEM supplier of soft gel caps out of Southeast Asia

Mega We CareTM Branded Products Business

MaxxcareTM Distribution Business

1985

OEM Business

Achieved leadership position in Indochina

Became leading international distribution company in Myanmar, Vietnam and Cambodia

Expect to double business

Nutraceutical, OTC and prescription products

Pharma and consumer products

Expect to double business

2019

42 We care

Continue OEM

• Helps service our long standing customers and helps improve the productivity and efficiency of our manufacturing processes

Grow our market leading brands

• Leverage brand strength and recognition to increase demand

• Expand specialized sales and marketing team to increase our coverage of the market

Launch new branded products

• Launch new products and line extensions

• Leverage on speed to market competitive advantage

Expand distribution business

• Strengthen relations with existing principals, add new principals and invest in infrastructure

Enter new markets

• Selectively enter new markets where we can compete effectively

• Identified new markets in Middle East and South America

Expand margins and profitability

• Minimize manufacturing and distribution cost inefficiencies

• Improving yield in manufacturing processes

Selective acquisitions and new ideas

• Lookout for acquisition opportunity and foster path into new business ideas to be ahead in human wellness space

The road map pursued and moving ahead…..

Our strategies for the branded and distribution business will drive future growth

43 We care

Future Outlook... Mega We CareTM branded products business •Emerging trends in consumer health care, disease prevention than

struggling for cure is the way forward ….. a sunrise industry.

•Market leading positions in Southeast Asia and growing presence in Sub-Saharan Africa.

•Products sold in developing countries which are underpenetrated markets with significant growth opportunities.

•329 unique products and 1,009 product registrations across the world. Strong pipeline of 67 new products under registrations and 74 new products under development.

•Manufacturing capacity adequate to meet growth requirements of ensuing 3-5 years.

•A strong balance sheet with net cash position and business generating healthy cash flows.

•Fundamental growth drivers in place to help deliver the expected growth.

MEGA expects to grow by expansion of customer base

in its existing underpenetrated

developing markets, launching

new products, strengthening

product categories and entering new countries. Create

significance in SEA and Sub-Saharan

Africa.

MEGA is constructing a warehouse for storing raw material and finished goods and plans to rebuild its product development and quality control center on the newly acquired land in Thailand near our current manufacturing plant causing an estimated future capex of THB 330mn. Improvement and maintenance capex to be incurred in addition to aforementioned capex.

Notwithstanding tremendous future opportunity. Due to the nature of the industry and the markets we are in, growth may not be a straight line up but with occasional disruptions that may be caused by economic, political and other factors.

44 We care

Future Outlook... MaxxcareTM distribution business

MEGA expects to capture the strong growth

potential offered by Myanmar,

given MEGA’s leadership

position as a distributor of pharma and consumer products.

As part of MEGA’s plan to construct its own state-of-art warehouse and office space on leased land in Myanmar on which work has already started; an approximate future outlay of THB 350mn may be spent.

Notwithstanding tremendous future opportunity. Due to the nature of the industry and the markets we are in, growth may not be a straight line up but with occasional disruptions that may be caused by economic, political and other factors.

MYANMAR • Largest market with significant historic growth and future opportunities … • Pharma market size at 1/10 of Thailand. • Leading multinational and regional companies as its principals. • Infrastructure and capabilities in place to support future growth in business:

• Coverage to more than 85% of geographical area.

• Access to more than 30,000 outlets.

• More than 1400 employees.

• Robust information system and market intelligence in place.

VIETNAM AND CAMBODIA TO GROW WITH INDUSTRY.

45 We care

Q&A

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