APB in Indochina/Thailand:

Transcription

1 APB in Indochina/Thailand: A regional success story led by Vietnam Christopher Kidd Regional Director Indochina APB, Singapore Singapore 8 December 2011

2 Agenda APB in Indochina/Thailand: A regional success story led by Vietnam 1 Indochina/Thailand an attractive growth region 2 APB in Indochina/Thailand 3 Vietnam An APB success story 2

3 Indochina and Thailand region Overview Indochina/Thailand in 2010 Population 173m Total beer consumption: 47mhl* Total profit pool of S$900m Six major brewers Laos Thailand Cambodia Vietnam 3 (*) Plato Logic's International Beer Reports

4 Country Snapshot Laos Land area: 236,800sq km Population: 6.4m GDP per Capita: US$984 GDP CAGR : 8% Top 2 brewers market share: 100% Laos Vietnam Vietnam Land area: 331,698 sq km Population: 86.9m GDP per Capita: US$1,174 GDP CAGR : 7% Top 3 brewers market share: ~80% Thailand Thailand Land area: 513,115 sq km Population: 65.6 m GDP per Capita: US$4,992 GDP CAGR : 3.6% Top 3 brewers market share: ~95% Cambodia Cambodia Land area: 181,035 sq km Population: 14.4 m GDP per Capita: US$814 GDP CAGR : 6.2% Top 3 brewers market share: ~90% Source: IMF and internal estimate 4

5 Considerable diversity across the Indochina/Thailand region Channel 30% 48% 65% 60% 70% 52% 35% 40% Vietnam Laos Cambodia Thailand On-premise Off premise Indochina/Thailand market volume split Thailand 37% 47mhl Vietnam 55% Market segment 13% 1% 6% 11% 61% 51% 75% 98% 33% 38% 12% 1% Vietnam Laos Cambodia Thailand Economy Mainstream Premium Pack Type 1% 15% 2% 13% 25% 2% 17% Cambodia 5% Laos 3% Excise Regime 31% 33% 27% 65% 60% 97% 86% 81,00 % 69% 67% 73% 1% 35% Vietnam Laos Cambodia Thailand Bottles Cans Draught Vietnam Thailand Laos Cambodia RSP Excise Source: Plato and Internal estimates 5

6 Indochina/Thailand has many of Asia Pacific s highest potential beer markets Fast growing markets in Asia Pacific (CAGR ) Beer consumption: litres per capita in 2010 Myanmar India 14.8% 17.3% Australia 83 Cambodia Vietnam 14.8% 13.4% Japan 47 Laos China 8.2% 12.6% South Korea 37 Singapore Malaysia 5.8% 4.2% China 33 Thailand Indonesia 2.2% 1.9% Vietnam 29 South Korea 1.2% Thailand 27 Taiwan 1.0% Philippines 0.8% Laos 24 Australia 0.7% Hong Kong -0.6% Cambodia 14 Japan -1.5% 6 Source: Plato Logic s International Beer Report and APB internal data

8 APB s footprint in Indochina/Thailand LAPB 2008 TAPB 1995 Laos Thailand Vietnam Cambodia APBHN 2003 VBL Da Nang 2006* VBL Quang Nam 2007 APB Indochina 5 operating companies 8 breweries 2,700 employees 13 brands Leading Brewer #1 by profit #3 by volume VBL Hoc Mon 1993 CBL 1996 VBL Tien Giang 2006* 8 (*) acquired from Foster s in 2006

9 APB s ambition in Indochina/Thailand region is to be the leading brewer Strategy Maintain premium segment leadership and grow mainstream profitably 1 through strong brand portfolios Strategy Opportunistically increase economic interests 2 Strategy Continuously enhance value chain capability and efficiency 3 9

10 Profit has more than doubled over the past 5 years underpinned by high volume growth Profit Before Interest and Tax (PBIT) and PBIT Margin S$ and % of gross revenue Annual Volume Growth in % CAGR 11.5% Acquired Foster s Business in Vietnam First brew in Laos % 16% % 28% 29% 11% -2% 19% 19% 20% FY0607 FY0708 FY0809 FY0910 FY1011 FY0607 FY0708 FY0809 FY0910 FY

11 Region contributes nearly half of APB s PBIT Revenue contribution to APB 100% PBIT Contribution to APB 100% 80% APB acquired breweries in Indonesia and New Caledonia 80% APB acquired breweries in Indonesia and New Caledonia 60% 40% 37% 39% 42% 37% 35% 60% 40% 50% 53% 52% 49% 47% 20% 20% 0% FY0607 FY0708 FY0809 FY0910 FY1011 0% FY0607 FY0708 FY0809 FY0910 FY

12 APB s largest region for Tiger and Heineken 12% of Heineken brand volume worldwide Heineken volume development Tiger volume development CAGR 10% CAGR 13.6% FY0607 FY0708 FY0809 FY0910 FY1011 FY0607 FY0708 FY0809 FY0910 FY

13 Key success factors for APB in Indochina First mover advantage bringing high quality internationally renowned beers to the region Wide portfolio of brands supported by strong sustained marketing Strong nationwide sales and distribution Competitive employment scheme to attract and retain top talent Pragmatic risk management in a market commonly considered high risk Effective management of key partnerships Proactive engagement with local authorities 13

15 APB Vietnam shareholder structure Hanoi Brewery Da Nang Brewery 100% 100% 100% Quang Nam Brewery 80% 60% Hoc Mon Brewery Tien Giang Brewery 100% 100% 40% 15

16 A 20 year journey in Vietnam VBL and APBHN expand capacity 2011 Expanded capacity in Hoc Mon and Da Nang Breweries 2010 VBL and APBHN expanded capacity 2008 Incorporated Joint venture VBL Quang Nam 2007 Acquired Foster s Vietnam business in Sept 2006 Established BBI a sales/distribution company APB acquired 100% of APBHN and start commercial production of Heineken, Tiger and Anchor in APBHN VBL reached 1,000,000 hls 1996 APBHN established with 55% APB equity and 45% local partner 1994 VBL s Heineken Beer first brew in July 1993 VBL s Tiger Beer first brew in Oct VBL established with 60% APB equity and 40% SATRA 16

17 APB Vietnam: Consistently strong results Vietnamese Dong Revenue Total volume FY0607 FY0708 CAGR 28% FY0607 FY0708 FY0809 CAGR 25% FY0809 FY0910 FY1011 FY0910 FY1011 Heineken Volume EBIT FY0607 FY0708 FY0809 FY0910 CAGR 23% FY0607 FY1011 FY0708 CAGR 50% Tiger Volume FY0809 FY0910 FY0607 FY0708 FY0809 CAGR 12% FY1011 FY0910 FY

18 Heineken brand gaining market share 10,0% 9,0% 8,0% 7,0% Heineken brand share of the Vietnamese market: Heineken has grown its share of the total beer market in Vietnam from just under 7% in 2006 to over 9% by the end of ,0% 5,0% 4,0% IPS in Vietnam is relatively large for market stage of development 3,0% 2,0% 1,0% 0,0% Heineken growth now primarily coming from outside HCMC and Hanoi reflecting brand s broad penetration 18

19 Vietnam expected to remain an attractive beer market in the future Size Population 87m Third largest beer market in Asia Pacific Growth Potential Young demographic Urbanisation trend High GDP growth 19

20 Vietnam s primary beer age group will grow by 5% (or 1.7m) drinkers by Total Population 86.9 Mil Total Population 94.3 Mil Male Population Female Population Male Population Female Population Age Group Count Share of Total Mil 30% Mil 28% Mil 16% Age Group Count Share of Total Mil 27% Mil 30% Mil 19% 20 Sources: USCB_IDB

21 Vietnam expected to remain an attractive beer market in the future Size Population 87m Third largest beer market in Asia Pacific Growth Potential Young demographic Urbanisation trend High GDP growth 21

22 Population in Thousands Rate of urbanisation is expected to continue rising By 2020, the urban population in Vietnam will grow by 9 million people (+34%) with beer per capita consumption 3.5 times the level of rural drinkers ,600 98,000 84,100 86, , , ,000 31,500 36,300 Urban Population Total Population % 27.3% 30.4% 33.6% 37.0% Source: UN Dept of E&SA, World Urbanization Prospects

23 Vietnam expected to remain an attractive beer market in the future Size Population 87m Third largest beer market in Asia Pacific Growth Potential Young demographic Urbanisation trend High GDP growth Drinking Culture Beer culture, not liquor Affordability Upside to per capita consumption 23

24 A strong beer culture in Vietnam Vietnam s current low consumption and high beer percentage of total alcohol market makes it uniquely attractive Pure Alcohol Consumption Beer as a % of Total Recorded Alcohol Market 27% 24% 31% 34% 38% 97% 0% 20% 40% 60% 80% 100% 24 Source: WHO Status Report on Alcohol and Health (2011)

25 Vietnam expected to remain an attractive beer market in the future Size Population 87m Third largest beer market in Asia Pacific Growth Potential Young demographic Urbanisation trend High GDP growth Drinking Culture Beer culture, not liquor Affordability Upside to per capita consumption Market Structure Government policies have avoided overcapacity Global brewer presence limited Top 3 brewers account for >80% of market Profitability Attractive EBIT/hl Low labour costs, high productivity Growing premium segment 25

26 APB in Vietnam - The future We are optimistic about capitalising on the market s potential 1.Strong distribution network 2.Improving productivity and efficiency 3.Full portfolio approach 26

27 ABP has an advantaged route to market in Vietnam 5 Breweries Hoc Mon Hanoi Da Nang Quang Nam Tien Giang Beer Exports 2 Trading Companies/ 10 Depots Distributors Sub-Distributors/ wholesalers On/ off premise outlets Key account (Modern trade) 27

28 On Premise Outlets On street Along walking areas In normal houses in big cities Along the beach In garden house at rural/minor cities In alley In big house 28

29 On Premise Outlets Beer Garden 29

30 Horeca Bar Pub Disco 30

31 Off Premise Sundry Shop & Sub-Distributor 31

32 Modern Trade 32

34 Significant efficiency & productivity gains over the past 5 years Saving in Electricity in kwh/hl Saving in Thermal in KJ/hl Tien Giang 57% Tien Giang 65% Hanoi 42% Hanoi 32% Quang Nam 41% Quang Nam 28% Hoc Mon 18% Hoc Mon 24% Da Nang 14% Da Nang 6% Saving in water Higher productivity in HL/hl in HL/FTE Tien Giang 60% Tien Giang 125% Hanoi 37% Hanoi 90% Quang Nam 18% Quang Nam 41% Hoc Mon 17% Hoc Mon 38% Da Nang 9% Da Nang 26% 34

36 A full product portfolio offering #1 in Premium % #4 in Mainstream Strong presence in Central Vietnam % Economy/Value 12% 55 36

37 Larue brand in Vietnam Heritage brand (since 1909) thriving under APB s ownership Larue brand volume growth: APB CAGR +25% Foster s CAGR 1%

38 Summary Indochina/ Thailand a significant and growing beer region in Asia Pacific A key region for APB with Vietnam the anchor market The most important region for Heineken brand in Asia Pacific region Positive socio-demographic trends to support future beer market growth APB well positioned for the future in Indochina/Thailand 38

39 Questions please Singapore 8 December 2011