Fraser & Neave Holdings Bhd Annual Report 2020

086 FRASER & NEAVE HOLDINGS BHD BUSINESS REVIEW: Food and Beverages Malaysia (Cont’d.) OUTLOOK The immediate future is wrought with the ongoing pandemic as well as local and global uncertainties. Despite the volatile landscape, we have been able to discern emerging trends and harness opportunities as efficiently as possible. Most pertinently, demand for healthier beverages is set to increase further. Catering to this, we have already planted the seeds for a greater presence in the wellness category. We will be focusing on purposeful innovation to nurture our health and wellness basket. At the same time, we will remain nimble and responsive to changes in consumers’ behaviour to optimise our investments and deliver the most effective marketing strategies. Having already scaled up F&N Life, we will continue to build the momentum gained to leverage the potential of online consumer engagement and sales fully. Continued emphasis on meeting consumers’ and customers’ expectations will lend us an edge, and bring smiles to everyone. MARKETING HIGHLIGHTS MALAYSIA F&N LIFE F&N Life was launched on 9 January 2020, enabling consumers to order their favourite F&N products in bulk and at competitive prices. In addition to offering our products, F&N Life provides product details and nutrition values, recipes and loyalty programmes. It is also an effective platform for online campaigns, contests and marketing activities. During Ramadan, F&N Life more than made up for the absence of bazaars with its digital campaign, ‘Gerai Rasa Raya F&N’ offering ten value-add bundles that put together favourite soft drinks as well as dairy products. Not only were these delivered free to consumers throughout Peninsular Malaysia, but first- timers to the online store were also given a rebate. The campaign also included a cooking contest offering winners RM500 cash and RM500 F&N Life e-vouchers. OUR FINANCIAL PERFORMANCE Product innovation combined with execution excellence in both domestic and exports market helped to mitigate the market contraction due to COVID-19, enabling F&B Malaysia to record a slight 5.7 per cent decrease in revenue for the year to RM2.04 billion. Operating profit decreased by 10.0 per cent from RM161.1 million to RM144.9 million during the period under review, mainly due to lower revenue and higher input costs. This was despite various cost-saving initiatives and a gain of RM7.8 million from the disposal of the “TEAPOT” brand to Fraser and Neave, Limited (F&NL), which owns and manages all the F&N brands. FY2019 FY2020 Q4 Q3 Q2 Q1 Total 2,164.8 2,040.7 553.4 585.0 541.5 499.2 571.5 461.4 498.4 495.1 -5.7% +5.7% -7.8% -19.3% -0.6% REVENUE (RMmillion) FY2019 FY2020 Q4 Q3 Q2 Q1 Total 161.1 144.9 52.5 48.7 28.2 24.3 52.7 30.3 27.7 41.6 -10.0% -7.2% -13.7% -42.5% +50.2% OPERATING PROFIT (RMmillion)