Thai Beverage - OCBC Investment 2023-02-13: Reopening Drove Volume Recovery

• Sales revenue improved across segments except for Spirits.
• Margin pressure but is likely manageable.
• Benefiting from the reopening.

ThaiBev's 1QFY23 business update –

• Thai Beverage (SGX:Y92)’s 1QFY23 revenue increased by 4.9% y-o-y to THB80.9b, boosted by the reopening and recovery of economic activities in Thailand and Vietnam. See Thai Beverage's announcement dated 10 Feb 2023. Sales revenue increased for all segments except for Spirits due to a high base effect in 1QFY22 on the back of trade-inventory loading ahead of price increases for Spirits.
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Recovery in sales revenue but EBITDA margin was weighed by higher marketing activities and input cost pressure –

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• For Beer, its sales revenue grew 13.7% y-o-y to THB37.9b in 1QFY23. The reopening of Thailand and Vietnam saw sales volume increasing 4.6% y-o-y, together with an increase in price and product mix improvement. However, EBITDA was down 18.3% y-o-y to THB3.7b due to increasing brand investment and marketing activities during the festive season.
• For the non-alcoholic beverages (NAB) segment, revenue rose 15.6% y-o-y to THB4.6b while EBITDA fell 31.4% y-o-y to THB409m, benefiting from the reopening in Thailand but weighed by higher operating expenses.
• Separately, the Food business reported a 24.0% y-o-y growth in revenue, driven by a recovery in dine-in traffic at restaurants while EBITDA was down 4.0% y-o-y to THB523m.

Cost pressure likely to be manageable

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Chu Peng OCBC Investment Research | https://www.iocbc.com/ 2023-02-13 SGinvestors.io

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