Fraser & Neave Holdings Bhd Annual Report 2020

092 FRASER & NEAVE HOLDINGS BHD BUSINESS REVIEW: Food and Beverages Thailand (Cont’d.) OUR JOURNEY AHEAD A tangible outcome of COVID-19 has been more significant consumer concern for maintaining good health. We are determined to capture more of the expanding healthy product market and have planned various new products that will satisfy consumers’ demand for nutritious beverages that boost well- being. In the face of economic uncertainties, and cost- conscious consumer behaviour, we will continue to offer attractive savings with value packs and bundles. This will be complemented by an internal focus on driving cost efficiencies through greater automation, innovation and upskilling of our people. We will leverage e-commerce more fully as more and more Thais are embracing social media and online networks. In FY2020, we started a web- ordering system through F&N Dairies Thailand’s website targeting foodservice customers as well as online shoppers. Moving forward, we seek to learn from the experience of F&N Life (e-commerce store in Malaysia) and make our e-commerce channel a success in the Thai market. As there remains a large number of customers who have yet to be connected online, we will ensure optimal reach leveraging ThaiBev’s distribution network which already has inroads into smaller towns along the length and breadth of the country. In Cambodia and Laos, we seek to convert more F&B players into F&N fans through our loyalty programme while, again, extending our coverage upcountry. The year will no doubt be challenging, but with new products and route to market, better service and expanded reach, we are certain of continuing to bring smiles to everyone. 1 Carnation Plus SCM with 0% Fat, 25% Reduced Sugar 2 TEAPOT SCM Squeeze Tube Matcha 3 Magnolia Milkies Milk tablets in Classic Malt, Hokkaido Milk and Strawberry Yogurt flavours New Products in FY2020 1 2 3 FY2019 FY2020 Q4 Q3 Q2 Q1 Total 1,909.5 1,943.8 -1.4% (THB terms) 456.5 525.9 483.6 504.2 493.9 455.7 475.5 458.0 +1.8% +15.2% +4.3% -7.7% -3.7% REVENUE (RMmillion) FY2019 FY2020 Q4 Q3 Q2 Q1 Total 362.0 381.0 +2.0% (THB terms) 99.3 110.9 103.0 105.5 99.1 91.6 60.6 73.0 +5.3% +11.7% +2.5% -7.6% +20.5% OPERATING PROFIT (RMmillion) OUR FINANCIAL PERFORMANCE F&B Thailand’s full-year results were resilient, mainly due to successful tactical strategies as well as recovery in Indochina and our export market, which compensated the temporary contraction in general trade and foodservice channels due to the emergency decree. Revenue increased by 1.8 per cent, from RM1.91 billion to RM1.94 billion, aided by a favourable Thai Baht/Ringgit exchange rate. Operating profit, meanwhile, grew by 5.3 per cent to RM381.0 million (2.0 per cent in Thai Baht terms), boosted by tightened cost control on overheads and advertising and marketing spend.