Thai Beverage Pcl Ord

Good evening, everyone, and thank you for joining the Thai Beverage Fiscal Year 2024 results call. All participants have been placed in a lesson-only mode. Later, we'll conduct a question-and-answer session, and instructions will be given at the time. I will now hand over the call to the presenters, Ms. Nemphong Ongston-Ronsi, Thai BEV's Head of Investor Relations, and the members of Thai BEV's Senior Management Team. Thank you.

Good evening, ladies and gentlemen. Welcome to Thai Privates' full year 2024 and the 30th of September 2024 Financial Resource Conference call. I am Namphu, Aung San Suu Kyi, Head of Investor Relations. For the call tonight, I will start with a summary of the full year results. Then we will open the line for Q&A with our management team here. For the summary of the full year results, on 28th of September 2024, InterBelf Investment Limited, or IBIL, an indirectly owned subsidiary of ThaiBel, completed a share swap transaction with TCC Asset Limited, or TCCAL. The transaction resulted in an increase in IBIL's percentage interest in Fraser & Neve Limited shares from 28.31% to 69.64%, making Tybeft the holding company of F&N and seed to hold any interest in Fraser's Property Limited. As IBIL and TCCAL are under common control of the same ultimate controlling shareholder, the transaction is accounted for as a business combination under common control. Accordingly, the group's full year 2023 consolidated financial statements have been restated for comparative purposes. Total sales revenue of the company for the fiscal year ended 30th September 2024 was 340,289 million baht, an increase of 2.2% when compared to the same period last year, driven by growth across our beverage and food segments. Net profit was 35,270 million, an increase of 0.6% compared to the same period last year. This was due to an increase in net profit from the beer business, non-alcoholic beverage business, and others business, partly offset by a decrease of net profit from spirits and food business. The Board of Directors has proposed a dividend for full year 2024 of 11,810 million baht, or 0.62 baht per share, which is higher than last year. This translates to a payout ratio of 53.9% of profit attributable to shareholders, which includes net profit of FNN Group, attributable to former shareholders during the year based on the group's percentage interest received for business restructuring under common control. Please note that the interim dividend was paid in June 2024 at 0.15 baht per share. Therefore, the final dividend will be 0.47 baht per share. In 2024, the spirits business reported sales revenue of 120,728 million baht, up 0.8% year-on-year. This was driven by an increase in sales volume of white spirits, as well as robust performance in Myanmar market. which showed improvement in both sales revenue and EBITDA. However, higher raw material costs, increased investment in brand and marketing activities led to a 4.6% year-on-year decline in net profit to 21,385 million baht. The beer business recorded sales revenue amounting to 126,332 million baht in 2024, an increase of 2.4% year-on-year, supported by rebound in tourism and higher beer consumption due to the warmer weather in Thailand, with lower raw material costs, improved operational efficiencies, and effective brand and marketing investments. The beer business achieved a net profit of 5,221 million baht, a 3.9% increase compared to previous year. The non-alcoholic beverage business saw a 4.2% year-on-year rise in sales revenue to 65,802 million baht in full year 2024. This was due to a higher sales volume across all categories, as a result of successful brand building from distribution expansion and effective consumption campaigns. Despite higher investment in brand and marketing activities, the business posted 9.3% year-on-year growth in net profit to 5,934 million baht, supported by lower packaging costs, favorable commodity price, and enhanced production efficiency. In 2024, the food business registered 5.5% year-on-year increase in sales revenue to 22,288 million baht, driven by the opening of new stores. However, the net profit fell to 301 million baht due to a combination of higher raw material costs, increased operational expenses, and investments to enhance brand visibility and accessibility. Additionally, the results were further impacted by a decrease in one-time fair value gains from the re-measurement of F&N investment in Cocoa Land in the prior year. In 2024, the group's other business registered a decline in sales revenue from publishing and printing business of 6% year-on-year to 5,400 million baht. This was mainly due to a decrease in sales revenue from lower international printing demand and the closure of unprofitable business units. Net profit, which includes a share of profit of investment in Fraser Property Limited, was 2,429 million baht. So this is the summary of our fiscal year 2024 financial results. Now we will open the call to any questions on our results. Operator, please help open the line for Q&A.

Thank you. We now begin the question and answer session. Participants with questions to pose, please press star 1 1 on the telephone keypad, and you will be placed in the queue. To cancel the queue, please press star 1 1 again.

Hello. Hi.

Our first question comes from the line of Nathan Tan from UOB. Please go ahead.

Okay, hi. Okay, so I'll just repeat. So my first question is for the beer, because of goods sold. So I see that it has fallen about 0.6 percentage points, the sales revenue. So I just want to see what the outlook or this to go to fall moving forward. Then also, I see that the SG&E has also fallen. So is that due to, do you see lesser competition, or do you try to spend more, or do you see it's just better cost efficiency? Then the next question is about the spirit. So can I just have an update about the brown spirit? So I see that revenue is... Hello, Leighton.

We couldn't hear you.

Sorry, Latham was somehow muted. Just give me one second. Let me. I'm sorry to let you know that Latham's line is got disconnected. Oh, he's back. Just give me one second. Latham, your line is open.

Yeah.

Please go ahead.

Yeah, okay. So for the bear, I see that the cost of goods has fallen. So I just want to know what's the outlook going forward, and do you expect it to trend downwards? And the SG&E as well, is it because of lesser spending, because of lesser competition, or is it just cost efficiency? Then for the spirits, I just want to know what's going on with the brown spirits. So could you share some color on the brown spirits? Thank you.

OK. Hi. This is from Thailand. So if I understand your question completely, there are two things. Number one is, what is the reason behind the decreasing of the cost of ? And the second question is, what is the reason behind the decreasing of the cost of ? So for the first one, it will say that we see that from last year, we see that, yes, we have the lower raw material cost, and we also have the improve of the operational efficiency. And then for the outlook for this year, we still see in the positive trend. And for the second question, I would say that we didn't have the less competitors. The beer market in Thailand is still very intense. All the competitors are still playing on the ground. So the reason that we have lower SENA is mainly due to the more efficiency for the investment in the ANP and the control of our overhead. So I hope that answers your question.

Yep, thank you.

Leighton, hi, this is Lester here. Let me just give you a little bit of background into the Vietnam COGS as well as SG&A. COGS actually for us remains fairly high. We are still using the hedged materials from a couple of years ago. This should run out by our Q1 next year, the first Jan to March next year. So moving forward, I think trending, it should be better. SG&A, of course, it continues to be very competitive in Vietnam. But what we've done is we have made our spending more efficient. I think in the Sabeko call last week, I was explaining how we – We use an ROI model for AMP activities, and so we have reclassified a lot of our activities to make sure that we spend only on the more efficient ones. And so while we gain share, we've been doing it at a lower cost.

Okay, just to sum up, the cost of goods generally in Thailand for beer have already come down, and we have high efficiency in spending, contributing to a lower HG&A. For Vietnam, we're expecting to have a lower cost of goods that are coming up in the next six months. So they're trending downward, would be, and continue to be fairly efficient in terms of spending and controlling our SG&A. So that's a general answer on the beer side. On the spirit side, for the brow spirit, well, I think in Thailand, over the past 12 months, as we reported, we have a quite decent widespread volumes. As for biosphere, it has a small decline due to consumptions at lower year-on-year. And the year before, we had a good increase, so this one is lower back to the base of the year earlier. So that's generally what happened. We start to see an increase or improvement towards September now into October month and November month. So we're expecting the browse rate to give us a low single-digit growth coming up in this few months as well.

Okay, thank you.

Thank you. Our next question comes from the line of Zhenfeng Qi from DBS. Your line is open. Please go ahead.

Thanks for your presentation. So just two questions for Mike. Firstly, maybe on DearCo, could you share about any updates, you know, regarding partnerships or potential IPO, the DearCo IPO, your color on that? And number two, maybe a bit more color in terms of your strategy in the food and non-alcoholic beverage fund given this recent shift and a few other acquisitions we have done in Thailand. Maybe just these two questions. Thank you.

Michael, can you help answer for the Biaco IPO, please?

I think while we are waiting for good Michael, hi, this is Kosit. I'll be answering on the NAB questions. Regarding the synergy after the share swaps, I think what we have put it in the paper earlier, I think we do expect the have a synergy in terms of the volume aggregations of how we procure, you know, raw materials, you know, and also all the supply chain costs, right? And that's the other part is on the R&D because we started to do all the combining our research development initiative all together, and that would probably help reduce our cost of the R&D. Yes. The second, I think, synergy we are expecting is the joint, you know, of the virtual market. I think the infrastructure network in Thailand is very – I think we have a very extensive infrastructure, especially in virtual market. So combining this will probably ensure us a better distribution capabilities of our NAB products. And I think the last part is that I think we do expect that we'll be able to bring some of the products, you know, from F&N into other markets as well. I think we'll be having a new product launch for this coming year. All right. Thank you.

Hi. Can you hear me now?

Yes, we can hear you, Carl.

Okay, great. Okay, the question, the vehicle IPO. Well, just as an update, as you know, with the recent interest rate cuts in the US and the results of the US elections, the markets have turned rather optimistic and there have been a lot of IPO activity in Asia Pacific. So this is the time that we're going to start to evaluate whether we should in fact relaunch our IPO. I would say that this is subject to assessment of the current conditions. point in time, we have no complete plans just to be clear. But as soon as we make a decision, Taipei will make an announcement at the appropriate time. Okay, so I hope that clarifies that because it's often asked question these days. On the second part about strategic partnerships, we continue to engage with several potential strategic partners, but nothing has materialized at this point in time. It is a normal course of our business. We are always regularly in touch with peers and potential partners from all sorts of segments. And we will continue to explore opportunities with them. Once again, when we have anything concrete in this area, Taipei will also make an announcement. I hope that's sufficient to address your questions. Thank you very much.

Yeah, thank you. Thank you, Michael. That's very helpful. Thank you. Yeah, I will jump back in the queue. Thank you.

Thank you. Thank you. Our next question comes from the line of Shen Tan from Goldman Sachs. Your line is open. Please go ahead.

Hi, good evening. Can you hear me?

Yes, we can hear you, Xuan.

Great. Thanks for the time. First question is on going to next financial year. I think you talk a bit about brown spirit, what you're seeing currently for low single digit. Can you talk a bit more about what you're seeing for white spirit Thai beer and Vietnam beer as well.

Hi, this is , but generally we don't give much forward indicator, but I think the answer The answer I was giving earlier, because I think the question is relating to softening of the browse rate that we have experienced in the past year. So what we have seen in the current month, as we're expecting in the next few months, is probably a recovery of a single-digit growth in the browse rate. That's as much as we're indicating. So we wouldn't give much indications on the other business, as usual.

Okay, got it. Can you touch a bit about the spirit, cause of good soil, and actually raw material there?

Yeah, the cause of good soil have increased up in Thailand. I think some earlier call we had discussed about raw material have to do with molasses in the previous crop that was quite expensive. I would say a user word expensive because it's much higher than... in the previous year or many years. And so that's considered a peak for us. And we have now start to experiencing much lower or acquiring molasses for the new crop that much, much lower price. This is the crop that we'll start harvesting in December of this year, which is next month, so that we can indicate that our last acquisition for this new crop are much lower in assurance of over 10% to 20%, much lower than the year before.

Okay, got it. Thank you. I will jump back to the queue.

Thank you. Our next question comes from the line of Tai Thu Thap from PathTrak Financial Group. Your line is open. Please go ahead.

Hi, thank you. I have two questions. The first one, the Thai government distributed 10,000 baht cash now towards the end of September. Do you think that would overall boost consumption and then the consumption for the beverage that, you know, beer and spirits? And the second one, my understanding is that the Thai parliament has passed the law that would make it easier for people to obtain the license to operate these tools and approvals, but they only passed in the first reading. When do you expect the law to be passed? And may I have your view on the potential implication? Thank you.

This is Suhaishai. The first 10,000 baht, you really benefit from that because it's cash. The next 10,000 baht, if it is cash, it will benefit our business. But if they use digital wallet, I suspect that will probably be difficult because they will have a lot of rule and regulation on what to spend, what product you can spend and all. So the next one I think is for the 60 years old people. I'm not sure because they are too old to be a drinker. It's not like the last 10 minutes, the 10,000 baht.

Right. We have follow-up questions on that. From my calculation, if I calculate correctly, your fourth quarter sales of food and beer grew quite strong Do you think it has anything to do with the cash handout? Here the cash handout doesn't come until towards the end of the quarter, right? Or is there any other factor that drives the fourth quarter sales?

I think it starts coming back, the consumption of both beer and spirit, especially beer, Kuntitite. Because beer has a full benefit from tourists, brown spirit doesn't get that benefit because... The tourists, they don't drink brow spirit in Thailand. When they're coming in, they drink beer mostly. That's why beer is doing very well. But overall, it's getting better in the last quarter. And then for these two months, we can see the same trend. I hope it will be even better next year if people have more money. I mean, the government probably trying to do a lot of measure to increase money in the pocket. So we should be benefit from that.

Okay, thank you. This is Prabhakar. I think the questions earlier also, your second question is about the draft law or change of law and regulations about licensing a new license. I think, well, first of all, we believe the current law itself is quite relaxed. It's open up for varieties of producer or small producer. In fact, for... Sprint producer, the small producer, have over 1,000 producers already in place. So I think the kernel, as it is, we think is probably operatable for a small producer to... introduce new products and grow to become bigger. However, there are draft laws that it is true that three draft laws went into the parliament and one was rejected and two were accepted in the first round. At the moment, we understand that the subcommittee continues to have a... a long debate over what to be coming out in the second round for Parliament to vote. So at the moment, still have no indications of when it will come out. But we do expect further relaxation of regulations or make it easier. But I think this is... a debate between regulations and public health and standard qualities of products that will be easily made, but at the same time have to be of high quality. So that's something we understand is still under debate.

Thank you very much.

Thank you. Our next question comes from the line of Paul Chu from Philippe Securities. Your line is open. Please go ahead.

Yeah, thanks. Thanks so much for the presentation. Just three, mainly housekeeping items. In your account, at least on the SGX filing, there's this item called former shareholders before business restructuring. Just wanted to understand the nature of this item and whether would this also be reflected in your FY26 results? That's my first question. The second question is just regarding your non-alcoholic beverage on slide 16. Just wondering, there was a difference between the net profit and the attributable profit to shareholders. So I just want to understand the minority interest. Was there some change? Because this is the first time you're revealing the full year. NAB numbers. My last question would be maybe just on the Myanmar exchange rate that you're using. Are you using the official rate or are you using the bank bought rates? Yeah, thanks.

Hi, Paul speaking from . Maybe I ring out there one by one. The first one you asked about the former shareholder profit owner, right? I think this one based on the accounting standard, actually they tried to Separating the owner of the share, even we are under common control by the same shareholders, but it's different of the group of company. Then they try to breaking that the share that actually Taipei owning for the F&N side in the past 28%. Then we additional acquire from 41%. They will try to mention that this is a part of the consolidation group based on accounting standard, but used to belong to the former shareholder. That means that next year, I mean, 2025 fiscal year, this one will be reflected to the type F book. This is going to be the meaning of the former shareholder in the sense. Second one is about you asking about why the net profit of the NAB when translated to be attributable profit to shareholder, why is going sacrificed to the minority? Actually, the consolidation basis after the share swap, we include the F&N as a total. But actually, when we look at the effective shareholding from Thai BEF, to FNN, which is about 69.6%. Then FNN will taking shareholder to the FNN holding Berhad, another 55%. That's mean that actually some of the profit that we take out from the FNN side in this part for attributable to shareholder, just solely the matter that we own is not count at the non-controlling interest of the FNN. That is the second question. The third question is about the exchange rate in Myanmar. According to the IFRS or the Thai FIS in terms of accounting standard, right now when we consult with auditors, the broadening market rate in Myanmar is still uncertainty, which is accounting standard cannot allow to use this. We actually use the official rate that will be announced by the government and the some of the international deals will use the reference at the same rate to book as account. That's hope clear your question.

Oh yeah, thanks so much for the explanation. Can I just want to again confirm, so this former shareholders before restructuring that $4.7 billion, I think, is that part of your earnings per share computation? And so you're saying that in financial year 25, this line item will be considered as part of your earnings per share competition. Sorry, I just wanted to clarify. Thank you.

Thanks, Paul. Let me clarify again. In terms of earnings per share, we're actually based on what they call in accounting standards, they call basic earnings per share. Actually, we will not count as a former shareholder, but we already disclosed in the note to financial on the number 32 on the earnings per share that assume that when we announce the shareholder that we acquire after restructuring, If include the 41% of FNN profit into the EPS, we will have like a performance that we will calculate the EPS including the after return to comparison when we announce the share swap. But the basic you can see in the note that actually we have both include and not include the percentage of the additional shareholder that we have. But this shareholder will reflecting in fiscal year 2025.

Hi, for more information, you can look at page 119 and 120 of our note to financial statement. That one will explain more in detail for EPS.

100, sorry, pitch in your circular, you mean?

For the financial statement, page 119 and 120, under note 32. Oh, okay, okay. Yeah.

Okay. That's not the exact one, right? That's the other.

Yes, that part of our announcement tonight.

Okay. Okay, sure. Thanks for taking my question.

Thank you. So, ladies and gentlemen, there are currently no questions. If you would like to ask a question, please press star 1 1 on the telephone keypad now. Once again, if you would like to ask a question, please press star 1 1 on the telephone keypad now. Our next question comes from the land of Divya from Morgan Stanley. Your line is open. Please go ahead.

A few questions for me. The first one is just if you can help us understand the drivers of the higher spirits volume growth in the fourth quarter. And, you know, you did comment that on brown spirits you expected to improve, but just wanted to see if you've already seen that improvement in the September quarter that's helped the overall numbers. The second question is on the bear volume growth. Could you help us understand the difference between the domestic bear volume as well as on Vietnam? And if you can give any color on how that's been trending in October and November. And then the last question is just on the overall spirits margins. I just wanted to understand, like, the decline in margins year on year. Even though this is a low quarter, what's really driven that, besides the higher molasses, which was already baked into the previous quarters? Is there anything else that's driving the lower margins? Thank you.

Dipya, this is Prabhakar. I'll address the spread market, and then later on, we will have Khun Songwit run the Thailand beer, and Khun Lester will run the Vietnam beer business to help give you some highlight on their business. The drivers, in terms of that, the widespread consumption or widespread sale for us is quite consistent. We have a large scale of widespread base. And that continues to... to be stable. I would use the word be stable. It's been consistent with last year. The browse rate, however, we have experienced some dose decline earlier in the year. And the fourth quarter browse rate itself start to, from the year on year, start to stabilize. So I think it have adjusted down to a lower base and therefore we have seen that been back to the base. And in Like mentioned in just earlier, in the other earlier questions, we have seen October, November improve in our brow sprit cell, so that we are expecting that going forward in the next few months. So I think as far as we can see in the next few months, we think that's continue to be improved based on a lower base that we experienced from last year. That's from the brow sprit in Thailand.

Hi, this is from Thailand. So the question from you is first, what are the drivers that drive all the top revenue in the Q4? It would say that they are both from the external and internal factors. From the external factors, for sure for Thailand, we see the recovery of the tourists that are already coming to Thailand at the level for the tourist number right now is almost the same as the pre-COVID-19 level. And second one, we know that You may know that we have a new government, so they try to reboot the economy. So some kind of the positive atmosphere. And the last one for the key strategic platform for the Changbe in Thailand, we have one of that is the football. And if you remain for the Q4, we gain some benefit from the football euro that coming during June and July, and also some support from the Olympic Games that we have in July and August. And so our team, we try to cap that opportunities. And the second question is what the outlook for first quarter. We still see the positive trend on this. That's all.

Hi Divya, Lester here. Just talking about beer Vietnam. For us, I think you would have seen the numbers from last year where we had almost 12 consecutive months of decline for the total overall market. Obviously, the market has picked up since June quarter. So June, July, August, we have seen some recovery in the beer market and so it is looking good. that the market is growing again. It is down to a few things. One, obviously, is the government spending into infrastructure projects. Although we see that more in the north of Vietnam, the government spending is heavy there, as well as new FDI money coming into the country. So, so with the market just on the on the cusp of new recovery, we actually have quite positive about 2025. Especially our position now where we have become number one for six consecutive months in a row. So things are looking good for for both the beer industry as well as a bakers role within the beer industry. Thank you.

Sorry, I think Divya, my colleague, remind me we'll have an answer to you on the cost of goods or the cross-profit margin for the spread. That's contributed from a change in product mix as we just have a smaller percentage of brown spread in the mix. So that would make the cross-profit margins slightly lower.

Got it. Can I just follow up on the market share comment for Thailand as well? Like compared to overall industry, have you guys grown and, you know, how is the market share now above 40%?

Yes, for the market share in Thailand, it would say that we still have a chunk going up, but overall for the company, you would say that they're still in the range of the 40%.

So, so the overall industry growth itself has been positive and we've grown in line with the industry.

This this quarter, uh, we, we, we, uh, how to say we are a little bit stronger than the market.

Got it. And can you also comment on just the beer margins for the domestic business? I can understand for Vietnam, it was mentioned that the high cost inventory would extinguish by March, so that should improve margins. How about for the domestic beer business?

As you can see from the last year, FY2024 compared to FY23, that the cross-margin performed better. Let me back that up. Okay. But overall, we perform better due to lower raw material and also better efficiency for the production and supply chain. And we continue to see that trend.

Got it. Thank you very much.

Thank you. Our next question comes from the line of Andy Sim from TBS. Your line is open. Please go ahead.

Can you hear me? Hello? Hello?

Hi, Andy. We can hear you.

Yeah, sorry. Okay. Yeah, just a follow-up question from earlier on the market share and competition. Can you get more color in terms of the Thailand beer market? I understand that you are growing slightly stronger than competition. Is it trending better against the larger competitor or the new entrant? And how do you see yourself comparing against these two? That's my first question, more specifically on the Thailand beer market. And the second question is actually more maybe housekeeping. Maybe you can understand in terms of notice that the tax has actually gone up a fair bit. Maybe I haven't had a chance to go through the detailed financials, but I just want to understand what is actually the reason for the increased higher tax, total tax.

Thank you for the question. Normally we don't disclose the number, but we say that we are strong right now.

I think for the tax, corporate total tax this year, we have some of the few points that we have some changes from last year. Some of the increasing is included from the spread and some of the both sweet beer and non-alcohol beverage because for spirit actually some of the profit that we generated it came from some of the Myanmar profit growing actually that one we also keep paying high tax on that one For the beer one, as you see that actually, especially on the sub-beer profit growing for some part of the Thailand. So we have some higher profit based on the profit increase this year. So tax increase accordingly. For NAB, actually year-on-year growing, some of the major parts, some of the BU, we have some certain incentive of the tax coverage expire this year. So some of the tax will be back to normal. That would be the critical key point that turning the tax higher than last year.

So can I just confirm, so this will be roughly the effective tax that roughly we can expect going forward? given the expiry of some tax benefits that, I mean, you say that the tax benefits have expired.

I think the number for us that released this period, it's a bit difficult to compare last year because when we consolidate F&N to the book, that number, when you compare, then you start to look like we're paying more tax. But I think In general, FNN has its own profit and loss, and that tax is blending into what we have. And right now, because we are based on the number you see, we actually do operate in Thailand and Vietnam, then we're followed by Malaysia, Singapore, Myanmar. So it's a blend of many jurisdictions inside. But generally, like what Khun Kitsada mentioned, some of the businesses have come out from the BOI or tax-free in Thailand, and then that made their effective tax rate have gone up. But that's in a non-alcoholic beverage side of the business. Because for the alcoholic beverage, those businesses do not have tax incentives.

Okay, so what we can do is actually take what F&M was reporting, and we roughly will get a sense. So essentially, there are actually not much to this. That's more of the business combination that actually what we can see here. Is that the right way to look at it?

Yeah, I think that's correct. In terms of taxes, there's no significant change in our tax or tax planning or strategies. We're just operating as normal. But because the businesses are quite complex in many jurisdictions, But because I think a lot of these are coming from when we add F&N into the NAB business that see the compositions of tax being higher just because that's what it looked like in the F&N as a company.

All right. Okay. Thank you. Thanks a lot.

Our next question comes from the line of Latham Tan from UOB. Your line is open. Please go ahead.

Well, just previously, so yeah, no more questions. Sorry.

Thanks. Thank you. Our next question comes from the line of Xuan Tan from Goldman Sachs. Please go ahead.

Hello, hi, Suen.

Sorry, Suen has gone back to the participants' poll. Shall we open the next one? Our next question comes from the line of Ataiti Thap from Ketanai King Fatra Financial Group. Please go ahead.

Mason, I just want to confirm that I understand the new accounting practice correctly, because right now you consolidate F&A, right? So if I look at revenue, cost of goods sold, and SG&A, you consolidate evidence from the beginning of the period, but then the actual restructuring didn't happen until September, so you made adjustment in July that's called former shareholder before business restructuring. Is that accurate?

Correct. At the console level, we include all, but we're breaking the line for the ownership, breaking the line. Okay.

That's very clear. Thank you very much. Thank you.

Thank you. Ladies and gentlemen, once again, if you would like to ask a question, please press star 1 1 on the telephone keypad. Once again, as a reminder, if you'd like to ask a question, please press star 11 on your telephone keypad. Our next question comes from the line of Selvina Arupeng from HSBC. Please go ahead.

Thank you for the opportunity. This is a question for Colesta specifically. You know, with, I guess, I guess one of your key competitors in Vietnam, outrightly saying that they are actually looking at reinvesting a little bit more into advertising and brand building. How are you thinking about the state of competition going into the next year? What are you doing to basically counter some of these competitive challenges as well as maintain what is the number one position for you guys right now? Thank you.

Hi, Salviana. No, I think competition overall has always been quite intense. All the major international players are in the market and spending quite a lot of money. So all of us do invest heavily behind our brands and it's no different for us. So we do the full range of marketing activities both above the line as well as below the line. It is an open market, it's not a dark market like many of the other alcoholic industries in other countries in Asia. So it is a light market and we continue to invest heavily behind our brands. I don't know if you read the news yesterday, we just launched a new R&D centre in our brewery. So not only is it a matter of advertising, but also being at the head of the curve in terms of launching new products that cater to the needs of the market. So earlier this year, we launched a new brand It's a lighter beer that caters to the changing taste of the new drinkers in the market. So we will continue to do such things as we move forward, spending correctly but at the same time meeting the needs of the consumers.

Thank you.

Thank you. There are currently no questions, so ladies and gentlemen, if you would like to ask a question, please press star 11 on your telephone keypad. Our next question comes from Longline of Shrentine from Goldman Sachs. Please go ahead.

I have a question on Vietnam beer. I guess earlier when consumption was weak, tobacco actually benefited from down trading. So with the improvement in consumption, how are you thinking about a reversal of that and back into premiumization? And in terms of how you're planning your marketing dollars, is there anything that you would do differently?

I think that is a very good question. Yes, you are correct. In the last couple of years, 2023 especially, there was quite heavy down trading from the highs of 2022. What we saw last year was a gradual moving up along the premiumness index. So what we did earlier this year, like I mentioned, we launched a new beer, which is in the mass premium space. So as drinkers move up the margin ladder, we have brands there that capture that demand and capture that space as well. Moving forward, again, we have a finger on the pulse of the market. As we see the way the consumers are moving, we adjust accordingly, not just with our marketing activities but also with our portfolio. So, yesterday when we launched our R&D center, we have quite a few recipes that are ready on hand to launch in the market. As and when consumer demand is there, we are ready to fulfill all the needs of the market.

Thank you. Would you be able to share what's the third quarter market share trend?

Third quarter market share, sorry, third quarter as in which months are you talking about?

The June to September, July to September.

July to September, we continued to grow. So the gap widened between ourselves and our competitor. So at the end of September, we recorded the sixth month in a row of being number one in the market. And the gap, the share gap opened up further in September. I think there are some, I know there are some people, some investment houses who also subscribe to AC Nielsen. All our numbers are AC Nielsen numbers. It's just that we cannot report. I mean, our agreement doesn't allow us to report the numbers.

Got it. By number one, you're talking about volume, right?

Yes, by volume, correct.

Volume. Yes. By beer brand.

Correct. So we are the number one beer brand in, we have the number one beer brand in Vietnam. And as a company, we're also number one when you put all the brands together.

Okay. We got it. That's very helpful. Thank you.

Thank you.

Our next question comes from the line of Lathan Tan from UOB. Your line is open. Please go ahead.

Just one quick question. How are we looking at ASP hikes? So given that demand is about to, is there any potential for any ASP hikes across any of the SKU, either beer or spirits?

Leitan, can you explain your question again? We couldn't catch what you were talking about.

So given that demand has started to pick up or the outlook has improved, how are we looking at potential ASP hikes, like raising prices? Do you see any potential to raise prices for either the beer or the spirit segment?

In terms of the price increase, this one we are careful and we don't give a forward outlook for the price increase.

Okay. Okay. Thank you.

Thank you. Our next question comes from the line of Bernice Chu from UBS. Your line is open. Please go ahead.

I have a question on NAB. So, could you explain a little bit on your aspirations for the segment? I think there was an article that commented that you expect a double-digit growth for Thaibest following the investment in Agribest. So, just a little bit more color of that.

Hello. Hi, this is Cosit. I think regarding your questions on I think the outcome after the chess warps, right? I think as you can see that we still I think process a lot of brands that are number one in every market, right? So I think we will continue to be the lady leader in that particular market right as as for others um i think heads up on you know our aspirational i think um i think that's what could not just mention we normally don't give that forward-looking statement right thank you thank you

Our next question comes from Lanif Shrentine from Goldman Sachs. Please go ahead.

Two more questions from my end. Interest expense up 10% year on year. Can you talk a bit about your – what's your average cost of debt now? And if you look at next year's refinancing versus current spot, has interest expense peaked?

Okay, well. This is Bapakon. The answer is have our net effective interest rate peak? The answer is no, because I think, well, a long explanation to that was we do actually run fixed and float debt portfolio, and most of our debt are fixed. And in this past year, our blended interest costs, just from the Thai debt perspective, not FNN, because we just consolidate FNN across, have Inchab, Baibao, a 50 basis point. But we believe that it could go up by a bit more because as our fixed rate bond mature and we refixed with the new rate. However, we don't expect it to jump that much anymore. It's very close. I think within this year, it should probably inch up a bit, but will peak, would have peak already. And as a trend globally, the interest rate already start coming down. So I think we don't expect our net effective interest rate to go up much higher. I hope that's worth.

Yeah, that's clear. Second question is on the restatement. So if I look at both FY24 and FY23, that consolidates FNN assuming on 100% basis and then less out the online. Is that right?

Hi, Sean Kisda speaking. I think the total consolidation of the FNN, when you look at the 2024 and 2023, actually we include all of that together as a total.

Okay. So what was left in the associate and JV is just dinner milk, mostly. Is that it?

The major one of the associate will be the Vietnam milk. It's a part of the FNN where we consolidate, and we have some small associate in Thailand, just small one.

Okay, safe to assume majority Vietnam milk.

Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star 11 on your telephone keypad. As there are no further questions, we'll now begin the closing comments. Please go ahead, Ms. Nemphong Anston-Ronsi.

Thank you for joining TiberX conference call tonight. Again, if you have any more questions, please feel free to contact IR department at ir.tiberx.com. Thank you and have a good night.

This concludes today's conference call. Thank you for your participation. You may now disconnect.