3 Things Investors Should Know About Thai Beverage Public Company Limited’s Beer Business Segment
Thai Beverage Public Company Limited (SGX: Y92) is a food & beverages company with four different business segments, namely, Spirits, Beer, Food, and Non-Alcoholic Beverages.
Despite the segments all being classified under F&B, they actually have different business and financial characteristics. In here, I want to have a quick overview of the Beer segment from three perspectives: Its financials, products, and future plans. The Beer segment is the second largest for Thai Beverage in terms of both revenue and profit.
Financials of Beer segment
Here’s a table that shows the income statement of the Beer segment for Thai Beverage’s financial year ended 30 September 2016 (this fiscal year actually only consists of nine months) and for the same period a year ago:
Source: Thai Beverage FY2016 annual report
FY2016 was a strong year for the Beer business, with its revenue up by 62.3% as a result of the re-branding of Chang beer in late 2015. Operating income grew even faster at 266% due to a slower increase in raw material costs.
The product portfolio
Here’s some of the products in Thai Beverage’s Beer segment:
Source: Thai Beverage FY2016 annual report
Thai Beverage is one of two major beer brewers in Thailand. According to an analyst report, its beer market share in the country rose to roughly 40% as of June 2016 compared with about 30% at the same period last year. All this is thanks to the Chang beer rebranding effort that took place in late 2015.
Future plans
For the Beer segment, Thai Beverage aims to be the market leader in Thailand and attain significant growth in Southeast Asia as part of its Vision 2020. The company also wants to achieve profitability that is in line with the standards of leading global beverage companies.
To achieve its aims, Thai Beverage is focusing on innovation, “such as launching products and devising strategies to capture the market share and drive sales across distribution channels, including carrying out creative marketing activities in order to effectively communicate with the target groups.” In addition, Thai Beverage has a policy on controlling production costs and selling expenses.
