q3 2017 earnings presentation...confidential overall performance q3 2017 and 9m 2017 6 overall...

CONFIDENTIAL AND PROPRIETARY

Any use of this material without specific permission of Big C Supercenter PCL is strictly prohibited

Q3 2017

Earnings Presentation

24th November 2017

Confidential

Disclaimer

2

The following presentation may contain forward looking statements by the management of Berli

Jucker Public Company Limited (“BJC”), relating to financial or other trends for future periods,

compared to the results for previous periods.

Some of the statements contained in this presentation that are not historical facts are

statements of future expectations with respect to the financial conditions, results of operations

and businesses, and related plans and objectives. Forward looking information is based on

management’s current views and assumptions including, but not limited to, prevailing economic

and market conditions. These statements involve known and unknown risks and uncertainties

that could cause actual results, performance or events to differ materially from those in the

statements as originally made. Such statements are not, and should not be constructed as a

representation as to future performance of BJC. In particular, such targets should not be

regarded as a forecast or projection of future performance of BJC. It should be noted that the

actual performance of BJC may vary significantly from such targets.

Confidential

Agenda

3

▪ Highlights

▪ Overall performance

▪ Performance by Supply Chain

▪ Operations update

Confidential

3Q and 9M 2017 Highlights

4

Financial performance

Delivered a strong third quarter results.

Solid performance across supply chains.

Strong SSSG recovery driving double-digit sales growth at Modern trade

supply chain.

Robust recurring net income growth.

Operations

Packaging Supply Chain: SB4 furnace commercialized on 25th October 2017.

Consumer Supply Chain: Food and Non-Food continued delivering strong

performance after various successful product launches during the first half of the

year.

Completed successful acquisition of Vina Paper on 22nd September 2017.

Modern Retail Supply Chain: Store expansion speed ramped-up with opening of 3

hypermarket and 61 Mini Big C stores.

HIGHLIGHTS

Confidential

Agenda

5

▪ Highlights




Confidential

Overall Performance Q3 2017 and 9M 2017

6

OVERALL PERFORMANCE

• On September 12th, 2017, the BJC Group completed its tender offer to purchase all the remaining shares of theBig C at the price of THB 225.00 per share, acquiring additional 15,789,939 shares or 1.91% of total shares

• This increased BJC Group’s holding to 99.85% of Big C

1,606 1,387

526

1,387

Q3 2016 Q3 2017

Net profit Normalized net profit

33,481 37,067

Q3 2016 Q3 2017

88,685 109,851

9M 2016 9M 2017

Q3 2017 Net Profit (MB)Q3 2017 Sales (MB)

Q3 2017

Highlights

9M 2017 Sales (MB)

23.9% YoY

9M 2017 Net Profit (MB)

2,269

3,348

1,448

3,348

9M 2016 9M 2017

9M 2017

Highlights

10.7% YoY

47.6% YoYNet profit

131.2% YoYNorm. Net profit

Norm. Net profit

Net profit 13.6% YoY

163.7% YoY

Confidential

Q3 2017 Normalized Net Profit of THB 1,387 million, an increase of THB 861 million or 131.2% YoY

• PSC’s net profit increased by THB 3 MN. The flattish net profit growth was mainly due to the increase energy cost, and lower net profit from glass manufacturing in Malaysia and Vietnam.

• CSC’s net profit increased THB 72 MN. Net profit increase came from both Food and Non-Food businesses due to higher sales and lower raw material costs.

• H&TSC’s net profit increased THB 6 MN due to higher sales from both pharmaceutical and galvanized steel structure businesses.

• MSC’s net profit increased by THB 278 MN due to strong revenue growth and good margin performance across the line.

• Interest expenses declined due to debt repayment and refinancing

THB MN

Q3 2017 vs. Q3 2016 – Supply Chain Performance (Recurring)

7

OVERALL PERFORMANCE

526 526 529 601 607

885

1,387

3 72 6

278

502

PSC CSC H&TSC OthersMSC

33,481

37,067 171 324 79

3,097

(85)

7

Q3 2017 Sales of THB 37,067 million, an increase of THB 3,586 million or 10.7% YoY

• PSC’s sales improved by THB 171 MN due to higher sales in aluminum can business especially from the energy drink segment.

• CSC’s sales increased by THB 324 MN. This increase was driven by strong sales performance on Food and Non-Food segments.

• H&TSC’s sales increased by THB 79 MN due to higher sales from pharmaceutical business from Wang Prom herbal products, and galvanized steel structure business.

• MSC‘s sales increased by THB 3,097 MN driven by strong same-store-sales growth of +9.2% and new store openings.

Q3 2016 Q3 2017

THB MN

+10.7% YoY

+131.2% YoY


PSC: Packaging Supply Chain, CSC: Consumer Supply Chain, H&TSC: Health Care and Technical Supply Chain, MSC: Modern Retail Supply Chain

Q3 2016 Q3 2017

Confidential

PSC’s net profit decreased by THB 69 MN due to lower sales in glass business and lower net profit from glass manufacturing in Malaysia and Vietnam.

CSC’s net profit increased THB 118 MN, driven by higher sales and lower raw material costs in Food and Non-Food businesses.

H&TSC’s net profit increased THB 116 MN due to higher sales from both H&TSC businesses as well lower SG&A expenses.

MSC’s net profit increased THB 1,242 MN due to full consolidation of Big C’s results into BJC’s financial statements.

Interest expenses declined due to debt repayment and

refinancing.

9M 2017 vs. 9M 2016 – Supply Chain Performance (Recurring)

OVERALL PERFORMANCE

8

88,685

109,851

178 425 316

20,611

(364)

1,448 1,379 1,379 1,497 1,613

2,855 3,348

(69) 118 116

1,242

493


9M 2017 Normalized Net Profit was THB 3,348 million, an increase of THB 1,900 million or 131.2% YoY

THB MN

THB MN


9M 2017 Sales were THB 109,851 million, an increase of THB 21,166 million or 23.9% YoY


9M 20179M 2016

9M 2016 9M 2017

+23.9% YoY

+131.2% YoY

• PSC’s sales increased by THB 178 MN due to higher sales in aluminum can business especially from the energy drink segment.

• CSC’s sales increased by THB 425 MN especially from food and non-food businesses.

• H&TSC’s sales increased by THB 316 MN due to higher sales from both H&TSC businesses.

• MSC‘s sales increased by THB 20,611 MN due to full consolidation of Big C’s results into BJC’s financial statements together with strong sales growth in Q3 2017.

Confidential

PSC

13%

CSC

11%

H & TSC

5%Others

0%

MSC

70%

PSC

24%CSC

6%

H & TSC

5%

MSC

65%

PSC

24%

CSC

7%

H & TSC

5%

MSC

64%

Performance breakdown

9

OVERALL PERFORMANCE

Q3 2017 9M 2017Sales Breakdown Sales Breakdown

EBITDA Breakdown EBITDA Breakdown

PSC

13%

CSC

12%

H & TSC

5%

Others

0%

MSC

70%


Confidential

BJC completed 97.94% Big C acquisition on 11th May 2016,

BJC did tender offer to purchased all the remaining share of Big C at the price of THB 225.00 per share, acquiring additional 15,789,939 shares or 1.91% of total shares on 12nd September 2017

BJC Group’s holding to 99.85% of Big C

150,142 155,956

122,000

150,142

5,814 612

33,344

BJC Q2 2017 Net Debt Change in short term and long term loans Change in cash BJC Q3 2017 Net Debt

Financing Structure – Net Debt and Deleveraging Components

THB MM

Net Interest Baring Debt to Shareholders’ Equity

1.4x1.3x

Capital structure

10

OVERALL PERFORMANCE

155,344

BJC & Big C

remaining debt

Debenture

Confidential

Agenda

11

▪ Highlights




Confidential

• 9M 2017 sales increased by +1.3 % YoY, and our gross profit margin increased by +103 bps driven by aluminum can business.

• Our EBIT increased by +7.7% YoY, and EBIT margin increased by +55 bps due lower COGS in aluminum can business.

• Our net profit decreased by -4.3% YoY, and net profit margin decreased by -63 bps due to lower sales in glass business and lower net profit from glass manufacturing in Malaysia and Vietnam.

Packaging Supply Chain – Q3 2017 and 9M 2017

12

PERFORMANCE BY SUPPLY CHAIN

GP% 49 bpsSales 3.6%

NP% 36bps NP 0.5%

EBIT% 21 bpsEBIT 5.0%

776 814

2,048 2,205

16.5% 16.8%14.7% 15.6%

Q3 2016 Q3 2017 9M 2016 9M 2017

• Q3 2017 sales reached THB 4,860 MN, up +3.6% YoY due to higher sales in aluminum can business especially from the energy drink segment.

• Our gross profit margin increased by +49 bps YoY, reaching 22.4% for the quarter. This increase was driven by higher sales and lower COGS in aluminum can business.

• Our EBIT reached THB 814 MN, up +5.0% YoY, and our EBIT margin increased by +21bps YoY, reaching 16.8% for the quarter.

• Our net profit reached THB 571 MN, up +0.5% YoY, and our net profit margin decreased by -36 bps YoY, reaching 11.7% for the quarter. This decreased was due to lower sales in glass business and lower net profit from glass manufacturing in Malaysia and Vietnam.

EBIT% 55 bps EBIT 7.7%

NP% 63 bpsNP 4.3%

Q3 2017 Highlights


568 571

1,584 1,515

12.1% 11.7% 11.4% 10.7%

Q3 2016 Q3 2017 9M 2016 9M 2017

9M 2017 Highlights

4,689 4,860

13,942 14,120

21.9% 22.4%20.7%

21.8%

Q3 2016 Q32017 9M 20169M 2017

EBIT and EBIT Margin Net Profit and Net Profit Margin Sales and Gross Profit Margin

Confidential

• 9M 2017 sales increased by +3.5% YoY, and our gross profit margin increased by +167 bps, driven by higher sales and decreases in some raw material costs such as palm oil, crude palm oil, fresh potato, hardwood and softwood.

• Our EBIT increased by +26.7% YoY, and EBIT margin increased by +87 bps.

• Our net profit increased by +40.4% YoY, and net profit margin increased by +86 bps due to abovementioned reasons.

Consumer Supply Chain – Q3 2017 and 9M 2017

13


NP% 86 bpsNP 40.4%

EBIT and EBIT Margin Net Profit and Net Profit Margin



NP% 153 bps NP 85.0%

141 227

475

601

3.5%

5.3%

3.9%

4.8%

Q3 2016 Q3 2017 9M 2016 9M 2017

86 158

294

412

2.1%

3.7%

2.4%

3.3%

Q3 2016 Q3 2017 9M 2016 9M 2017

• Q3 2017 sales reached THB 4,314 MN, up +8.1% YoY, mainly driven by strong sales performance on food and non-food businesses.

• Our gross profit margin increased by +150 bps YoY, reaching 18.8% for the quarter. This increase was mainly driven by higher sales in food and non-food businesses as well as lower COGS from crude palm oil and crude coconut oil.

• Our EBIT reached THB 227 MN, up +61.0% YoY, and our EBIT margin increased by +173 bps YoY, reaching 5.3% for the quarter.

• Our net profit reached THB 158 MN, up +85.0% YoY, and our net profit margin increased by +153 bps YoY, reaching 3.7% for the quarter, due to abovementioned reasons.


Sales and Gross Profit Margin


Q3 2017 Highlights 9M 2017 Highlights

3,990 4,314

12,152 12,577

17.3%18.8%

17.0%18.7%

Q3 2016 Q32017 9M 20169M 2017

Confidential

• 9M 2017 sales increased by +6.2% YoY, but our gross profit margin decreased by -54 bps.

• Our EBIT increased by +20.9% YoY, and EBIT margin increased by +125 bps driven by higher sales and lower SG&A-to-sales ratio from both H&TSC businesses.

• Our net profit increased by +33.2% YoY, and net profit margin increased by +170 bps due to higher sales, together with an improvement in gross profit margin from Healthcare Supply Chain.

Healthcare & Technical Supply Chain – Q3 2017 and 9M 2017

14


157 164

351 467

8.3% 8.3%6.7%

8.4%

Q3 2016 Q32017 9M 2016 9M 2017

201 199

473 571

10.6% 10.0%9.0%

10.3%

Q3 2016 Q32017 9M 2016 9M 2017

1,901 1,980

5,239 5,565

32.4%30.3%

31.9% 31.4%

Q3 2016 Q32017 9M 2016 9M 2017


NP% 2 bpsNP 4.3%


EBIT% 125bpsEBIT 20.9%

• Q3 2017 sales reached THB 1,980 MN, up +4.1% YoY, due to higher sales pharmaceutical business from Wang Prom herbal products, and galvanized steel structure business.

• Our gross profit margin decreased by -208 bps YoY, reaching 30.3% for the quarter due to gross profit margin decreases at pharmaceutical and galvanized steel structure businesses.

• Our EBIT reached THB 199 MN, down -1.1% YoY, and our EBIT margin decreased by +53 bps YoY, reaching 10.0% for the quarter.

• Our net profit reached THB 164 MN, increase of +4.3% YoY, and our net profit margin increased by +2 bps YoY, reaching 8.3% for the quarter.

NP% 170 bpsNP 33.2%



EBIT and EBIT Margin Net Profit and Net Profit Margin Sales and Gross Profit Margin

Confidential

Net Profit and Net Profit Margin EBIT and EBIT MarginSales and Gross Profit Margin

• 9M 2017 sales increased by 36.5% YoY, and our gross profit margin increased by +57bps, this was driven by strategic shift of focus to quality of sales, coupled with strong sales growth in Q3 2017.

• Our EBIT increased by +23.5% YoY, but EBIT margin declined by -76bps due to increased COGS expenses.

• Our net profit increased by +42.2% YoY, and net profit margin increased by +22 bps.

Modern Retail Supply Chain – Q3 2017 and 9M 2017

15



1,757 2,070

4,519 5,580

7.7%8.0% 8.0%

7.2%

Q3 2016 Q32017 9M 2016 9M 2017

NP% 39 bpsNP 21.5%

22,708 25,805

56,475

77,086

17.8% 17.7%

15.9%16.5%

Q3 2016 Q32017 9M 20169M 2017

GP% 57bps Sales 36.5%

GP% 15 bps Sales 13.6%

EBIT% 76 bpsEBIT 23.5%

• Q3 2017 sales reached THB 25,805 MN, up +13.6% YoY, driven by strong same-store-sales growth of +9.2% and new store openings.

• Our gross profit margin decreased by -15 bps YoY, reaching 17.7%, comparing to gross profit margin at 17.8% last year.

• Our EBIT reached THB 2,070 MN, up +17.8% YoY, and our EBIT margin increased by +29 bps YoY, reaching 8.0% for the quarter. This increase was driven by higher retail sales, other income and improvement of efficiency.

• Our net profit reached THB 1,575 MN, up +21.5% YoY, and our net profit margin increased by +39 bps YoY, reaching 6.1% for the quarter, due to abovementioned reasons and lower interest expenses.

NP% 22 bpsNP 42.2%

1,297 1,575

2,945

4,187

5.7%6.1%

5.2% 5.4%

Q3 2016 Q32017 9M 2016 9M 2017


Confidential

Agenda

16

▪ Highlights




Confidential

PSC – Update

17

OPERATIONS UPDATE

Glass

Packaging

Construction work of SB4 furnace completed on schedule

Furnace was opened on 6th of October 2017 and

full operations started on 25th of October 2017.

Capacity: 300 tons / day furnace

Increasing our total capacity in Thailand to

3,035 tons / day.

Construction work of SB5 furnace progressing on

schedule

Targeted to be commercialized in Q3 2018

Confidential

CSC – Non-Food update

OPERATIONS UPDATE

18

Vina Paper Acquisition

On September 22nd 2017, BJC completed an acquisition

of Vina Paper Company Limited:

– Number 3 tissue manufacturer in Vietnam.

– Manufacturing various tissue paper (facial paper, toilet

paper, kitchen paper) under E’mos brand.

Acquisition rational:

– To further strengthen BJC’s position in Vietnamese tissue

paper market.

– Vina Paper’s massmarket E’mos brand

complementing BJC’s premium Cellox brand.

– Lowering BJC’s production cost for Cellox tissue

paper.

– Reduced distribution costs.

Vina Paper in figures:

– Acquisition price: THB 482.7 million.

– Capacity: 16,000 tons / year.

– Market share 13%

Confidential

MSC – SSSG and Margin trend improvement continues

19

Big C’s total sale like-for-like performance, recurring gross profit and EBIT margins, percentage

Rebasing Same-Store Sales Growth (SSSG) and improving margins due to strategic change

-2.9% -4.0%

-22.6% -22.3%-20.0%

-15.2%

9.2%13.2% 14.4%

17.8%14.1%

16.1%15.6%

17.7%

Q1 2016 Q2 2016 Q3 2016 Q4 2016¹ Q1 2017 Q2 2017 Q3 2017

1 Q4 2016 Excluding one-off items: GP -74 million baht.

Strong SSSG recovery driven by increased B2B sales, and strong Fresh Food and Home Line performance during Q3 2017.

Confidential

MSC – B2B Sales

OPERATIONS UPDATE

Business-to-Business sales

Since discontinuing unprofitable B2B sales practices in mid-

2016, we have been working to develop profitable way in

continuing serving B2B customers.

Mainly targeting corporate customers, and HoReCa

customers.

We have developed E-Campaign tool to recognize B2B

customers:

B2B customers will receive wholesale prices.

We service HoReCa customers through 30 stores with

capacity and capability to sell Fresh Food in bulk.

Preorder and pick-up from store, or have their orders

delivered within 3km – 5km radius.

At the end of September 2017 we had nearly 7,000 active

B2B customers.

Whilst most of the B2B sales are in Dry Food category, we have

B2B sales also in Fresh Food, Homeline, and Hardline

categories.

20

Confidential

MSC – DC update

21

Thanyaburi 2:

– Construction of new Mini Big C distribution center started

in May 2017

– Thanyaburi 2 distribution center:

– Dedicated for Mini Big C format.

– Space of 34,944 sq.m.

– Pick-to-light and voice picking.

– Capacity to handle 1,300 stores.

– Construction work has been slightly delayed as heavy

rains impacted piling work.

– However still on schedule to be opened in early 2018.

Confidential

MSC – Solar Rooftop

22

Reducing electricity expenses by utilizing store

rooftops:

– Increasing electricity price has prompted Big C to

explore alternative energy source.

– Electricity generated from rooftop solar plant can

substitute the high priced electricity from

MEA/PEA during peak hours.

– Solar rooftop supplier builds and operates the

solar plant.

– Big C purchases electricity from solar plant at

discounted rate from MEA/PEA rate.

– Power Purchase Agreement is signed for long

term, after which Big C will operate and receive

full benefit from the system.

– The first solar rooftop systems are targeted to be

completed at 3 sites by the end of 2017.

– We expect to complete additional 13 – 15 sites

by the end of 2018.

OPERATIONS UPDATE

Confidential

MSC - Expanding store footprint and improving existing assets

23

Retail and Rental Area Q3 2017¹

Total space:

c. 1,150,000 sq.m.

Total space:

c.871,000 sq.m.

Expansion

9 Hypermarket stores

1 Big C Market store

200 Mini Big C in combination of owned stores

and franchise stores.

Renovations

4 Extension renovations, 1 Right-sizing

renovations, and 3 Full Renovations.

Store improvement renovations in 42 stores.

Targets for 2017

Q3 2017 Progress

Strong rental income growth continued in

third quarter.

Opened 3 hypermarket (Pathumthani,

Ubonratchathani, and Udonthani), and 61

Mini Big C (including 13 franchise stores).

We completed 3 extension renovations

(Kamphengphet, Phetburi, and Sikhio) and

1 right-sizing renovation (Phetburi).

We have completed 32 store

improvement renovations during 9M 2017

Operations update

1 Including Hypermarket, Big C Market, Mini Big C, and Pure Drugstores

2,503 2,690

7,530 7,970

3Q16 3Q17 9M16 9M17

5.8%

7.4%

Rental Income

(THB Million)

Confidential

MSC – First 3K/4K low-cost model stores opened

24

Operations update

3K Low Cost Model

Opened first two 3K/4K Low Cost Model

stores in

Ban Dung, Udonthani

Retail area: c.3,700 sq.m.

Rental area: c.2,500 sq.m.

Namyuen, Ubonratchathani

Retail area: c.2,600 sq.m.

Rental area: c.1,900 sq.m.

Confidential

Synergies – Update Q3 2017

25

OPERATIONS UPDATE

We are on track of achieving 1/3rd of THB1.7Bn recurring synergies in 2017 and full amount in 2019

Economies of scale through leveraging manufacturing capability

for private brands

Leveraging BJC’s leadership in consumer supply chain and logistics and improving Big C’s current backend infrastructure

• Leverage BJC’s import customs clearances

• Started operations at the new Hardline Hub for BKK and nearby area in the beginning of October

• Consolidation of deliveries from suppliers to be launched in Q4

Potential to increase penetration of private label with BJC products

• Successfully worked together to launch new SKUs (i.e. seasoning, sausages, bakery ingredients) during the past nine months

• Solid new SKUs in pipeline for Q4 launch i.e. hand soap, yoghurt and snacks

IT Synergies between BJC and Big C • All integration projects between BJC’s retail

units and Big C on track for Q4 completion

Utilizing Big C’s superior expertise in retailto improve performance of BJC’s smaller retail banners

• Successfully introduced new experiences in stores by leveraging on BJC’s products i.e. Japanese shelf and Asia Book corners

• Combined key procurements to save cost both at BJC and Big C

Leveraging resources across companies• Successfully delisted BigC • Further integrated back office teams in

merchandising area

Combine purchasing power and optimize retail operations

Fully integrate logistics operations

across entire value chain

Cross-utilize IT and back office infrastructureSynergies:

c.THB1.7Bn

Note

1. Projected annual recurring EBITDA level synergies upon full implementation

Utilize TCC assets to open 8 MBC and market stores which have generated positively to the business

Confidential

Community focus update

26

Volunteer Activities

– On 27th July 2017. BJC, Big C, BJL, BJF, Rubia, TSS

and BJC Cellox arranged a volunteer activities to pay

royal courtesy to His Majesty King Maha Vajiralongkorn

Bodindradebayavarangkun in the occasion of His Majesty

the King’s 65th Birthday celebration.

Alms Giving Ceremony

– On 28th July 2017 at Big C Supercenter Rajdamri Branch.

Khun Charoen and Khunying Wanna Sirivadhanabhakdi,

Khun Aswin and Khun Thapanee Techajareonvikul,

management team, staff from BJC and Big C and local

people join hand offering food to 66 monks at Big C

Supercenter Headquarter to pay royal courtesy to His

Majesty Maha Vajiralongkorn Bodindradebayavarangkun

in the occasion of His Majesty the King’s 65th Birthday

anniversary

Children’s Magazine “Tonfun”

– On September 2017 Children’s Magazine “Tonfun”,

Tonfun arranged special activities inside Big C store for

the pleasure of our customers through stories telling and

other creative activities throughout September 2017

OPERATIONS UPDATE

Confidential

Conclusion

27

Very strong third quarter SSSG recovery at Modern Retail Supply Chain

Hypermarket and Mini Big C expansion plan on track with full year targets

confirmed.

Continued good momentum in synergy teams in Big C and BJC,

with confidence in achieving synergy targets.

Continued solid performance across supply chains, with particularly storing

Consumer Supply Chain and Modern Retail Supply Chain performance.

Confidential

Q&A

28

Berli Jucker Public Company LimitedBerli Jucker House 99 Soi Rubia, Sukhumvit 42 Road, Phrakanong, Klongtoey, Bangkok 10110, THAILAND Website: www.bjc.co.th

IR contactsInvestor Relations DepartmentE-mail: [email protected]: www.bjc.co.th/en/investor-relations/investor-relations.php

1. Rami Piirainen [email protected] +66 2 367 10472. Tanaporn Teachaviwat [email protected] +66 2 367 1189

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