BANGKOK, 27 September 2022 – Thai Beverage Public Company Limited (“ThaiBev” or the “Group”) has launched its sustainability strategy, with clear environmental, social and governance initiatives and goals, including a clear target to achieve net-zero carbon emissions by 2040.
The strategy will enable ThaiBev to drive sustainable development and resilience across its business, protect the environment, support local communities and enhance governance. It underscores ThaiBev’s goal of Enabling Sustainable Growth, in tandem with its business expansion in Thailand and in the region.
ThaiBev has successfully navigated its business through the challenges of COVID-19 over the past two years and delivered resilient financial and operating performances in the nine-month financial period ended June 2022 (“9M22”) amid changing consumer preferences. As the Group pursued its PASSION 2025 goal of “Creating and Sharing the Value of Growth”, it has continued to prioritise delivering on its corporate responsibility to operate with good governance and responsibility towards society, the environment and its people.
Mr. Thapana Sirivadhanabhakdi, President and CEO, said: “ThaiBev has delivered a solid performance despite the challenges of COVID-19. This year, the relaxation of border, social and dine-in restrictions in Thailand and Vietnam, two key markets for us, has contributed to the recovery of domestic and international tourism. The resulting rise in consumption has boosted our sales revenue and earnings, as you would note from our 9M22 financial results.
“Even as we celebrate a return to normality, we are now faced with new challenges of higher inflation and input costs, amid heightened geopolitical tensions, which could dampen domestic private consumption. We will continue to exercise prudent cost management to mitigate these pressures. With ThaiBev’s strong foundation, we are confident of tackling any challenge with tenacity and determination. While the worst of the pandemic is behind us, we cannot afford to be complacent, and will continue to strengthen our business and improve our financial resilience, while protecting the health and safety of our people.
“At the same time, we are reinforcing our commitment to Enabling Sustainable Growth by setting out quantifiable targets to help us achieve sustainability and net-zero emissions.”
During the period of COVID-19 restrictions, the Group nimbly adapted its operations and implemented cost control measures to mitigate the impact of the temporary closures of restaurants and entertainment venues on demand and consumption. The Group’s business segments focused resources on improving its brand equity on the ground, through more effective advertising and promotional activities, improving product mixes and other operational initiatives.
With the lifting of social and border restrictions in Thailand and Vietnam, social activity gradually increased as locals and tourists returned to dine and socialize. Sales volume improved in the 9M22 period, while dine-in activity also rose at the restaurants under its food business.
In view of these factors, Group sales revenue improved by 8.2% year-on-year to reach Baht 207,922 million in 9M22. The 9M22 sales revenue is even higher than sales revenue achieved in comparable periods in the past three years, demonstrating the strength of demand recovery and the success of our brand management efforts. Earnings before interest, taxation, depreciation and amortization from business operations rose by 6.7% year-on-year to Baht 39,110 million in 9M22. In all, the Group’s financial position remained resilient with strong free cash flow and continued deleveraging efforts.
Group Highlights
Spirits
Mr. Prapakon Thongtheppairot, Executive Vice President, Chief Spirit Product Group, said: “Our spirits business has proven to be resilient and has managed to maintain market share for both white and brown spirits. In Thailand, Ruang Khao remains the number one white spirit while Hong Thong remains the number one brown spirit. Based on a recent market research report, SangSom Rum grew by 9% due to brand strength, stable economic recovery, and the return of tourism to Thailand which supported the recovery of spirit sales, especially brown spirits. Despite facing difficulties in the past two years, the Grand Royal Group still delivered solid business performance, maintaining its position as the number one whisky in Myanmar, and generating strong positive cashflow.”
Beer
Mr. Michael Chye Hin Fah, Chief Beer Product Group, said, “We are encouraged by the recovery in beer segment performance in both Thailand and Vietnam. The Group’s beer business’ sales revenue increased 15.3% year-on-year to Baht 92,573 million in 9M22, driven by a healthy recovery in economic activity in these key markets.”
The beer business delivered a 26.5% increase in EBITDA to Baht 13,446 million in 9M22, on the back of higher sales volume and improved product mix, price increases and better cost control measures.
Beer – Thailand
Mr. Lester Tan Teck Chuan, Chief Beer Business – Thailand, said: “The improvement in the performance of Thailand’s beer business was driven by the resumption of on-trade consumption and marketing activities such as concerts and events. The Thai beer business has also seen margin improvements in the past nine months, amid ongoing effort to expand our market share in the mass premium segment with the launch of Chang Cold Brew in October 2019 and Chang Espresso in December 2020. Chang Cold Brew became the fastest growing beer brand in the mass premium segment and has become the number five beer brand in Thailand within a year. Looking ahead, we are engaging in Active Area Management as well as effective resource allocation to enhance cost efficiency.”
Beer – Vietnam
Mr. Bennett Neo Gim Siong, Chief Executive Officer, SABECO, said: “Vietnam’s reopening drove strong consumption recovery and SABECO has seen strong business performance and margin improvement as a result, with brand health continuing to strengthen. We strive to reinforce Bia Saigon as the National Pride of Vietnam – we launched 63 limited edition Bia Saigon Lager provincial can designs for 2022 Tet, featuring prominent Vietnamese landmarks. We have continued the implementation of SABECO 4.0 as a key enabler of our strategic pillars, focusing on transforming the way of work through centralization, simplification and standardization.”
During 9M22, SABECO invested in the Vietnamese Sports sector and National Football. It was most recently the sponsor for SEA Games 2022 and launched Bia Saigon Gold cans exclusively for the Games. SABECO also relaunched Bia Saigon Special in April 2022, with new taste and refreshed packaging to keep its products relevant with changing consumer tastes.
SABECO’s longstanding commitment to the sustainable development and prosperity of Vietnam and its people was recognized when it became the first beverage company to be honored at the Vietnam Glory Awards 2022 for its contributions to Vietnam’s socioeconomic development. During the COVID-19 pandemic, SABECO maintained jobs for more than 9,000 direct employees and contributed nearly USD435 million to the state budget in 2021. It also supported communities across Vietnam with a USD2.4 million contribution to initiatives such as Rise with Vietnam, Collecting Millions of Stars, and Tet-One Home.
Non-alcoholic Beverage
The Group’s NAB business recorded sales revenue of Baht 12,826 million in 9M22, an increase of 9.7% YoY stemming from the recovery in economic activity in Thailand. EBITDA rose by 5.4% to Baht 1,717 million.
Mr. Kosit Suksingha, Executive Vice President, Chief Non-alcoholic Beverages Product Group and Chief Digital and Technology, said: “There was recovery in the on-trade channels as customers returned to dine-in at the restaurants. We managed to capture opportunities in health and wellness trends by expanding our range of low- and no-sugar/calorie non-alcoholic beverages, and adding the certified “Healthier Choice” label for those beverage products.
“We also launched new products including “ZEA Tuna Essence”, a supplement rich in Omega-3 and Vitamin B12, to boost the nervous system and brain functions, and “Oishi Honey Lemon 0% Sugar”, which achieved 70% growth since its launch, further driving the ready-to-drink tea market. Oishi continued to dominate the ready-to-drink tea market and our successful marketing campaigns, such as the Oishi x Demon Slayer campaign, helped to capture opportunities from the re-opening of schools. Oishi export sales registered growth despite challenging market conditions and maintained its market leader position in Cambodia and Laos.
Food
In 9M22, the food business’ sales revenue increased 38.6% YoY to Baht 11,990 million due to the recovery of dine-in traffic at restaurants, as well as the Group’s continued drive to increase its brand penetration and accessibility. As a result of the Group’s efforts to improve the operational efficiency of the restaurants in its portfolio, the food business recorded a satisfactory 104.1% YoY improvement in EBITDA to Baht 1,578 million.
Mrs. Nongnuch Buranasetkul, Senior Vice President, Chief Food Business – Thailand, said: “We benefited from the resumption of economic activities after the lifting of COVID-19 lockdown, as customers returned to dine in at the restaurants. Although more people are dining out, home delivery sales continued on an uptrend. In addition, we have continued to drive brand penetration and accessibility to our food business by expanding the number of restaurant branches with a lighter model and focusing more out of shopping malls.
The Group strengthened existing core brands with new restaurant concepts in 2022. It launched OISHI BIZTORO under the concept of “Easy Delicious Choices in Modern Japanese Style”, with a focus on value-for-money dishes and opening restaurant outlets at accessible locations. The Group launched Shabu by Oishi, a new a la carte shabu-shabu concept offering good quality ingredients and a new consumer experience. New restaurant formats – the KFC & Oishi Food truck, KFC Kiosk & Oishi To Go – were also launched to capture a new consumer base who enjoys the convenience of takeaway meals. This year, the Group also aggressively worked to improve supply chain and operational efficiency, and reinforcing its Back to Basics ethos to raise service quality and labor productivity, so as to maximize the Group’s profitability.
ESG: Enabling Sustainable Growth
ThaiBev is committed to taking the Sufficiency Economy Philosophy (SEP) of our late King, His Majesty King Bhumibol Adulyadej The Great, as our guiding principle, and further guided by His Majesty King Maha Vajiralongkorn Phra Vajiraklaochaoyuhua’s first royal command to continue, sustain, and develop this legacy for the benefit and happiness of the people, as well as by the 17 United Nations Sustainable Development Goals.
Mrs. Tongjai Thanachanan, Executive Vice President, Chief Sustainability and Strategy, said: “We believe that the successful evolution of the company through PASSION 2025 is closely connected to a healthy natural environment, the improvement of the communities we serve, and the way we govern and conduct ourselves. As a company, we are confident of contributing to all aspects of environment, social and governance, and the United Nations Sustainable Development Goals, as an employer, a corporate citizen, and a business leader in the region.”
ThaiBev’s sustainability strategy is underpinned by three key pillars, each with clear targets:
Environment
- Net-zero emissions from its operations (Scope 1) and purchased energy use (Scope 2) by 2040
- 100% water replenishment by 2040
- Net positive impact on biodiversity
Social
- Employee engagement at more than or equal to 90% by 2030
- 80% of sales from its non-alcoholic beverage business to come from healthy beverages by 2030
- Community development across the five pillars of education, public health, sports, art and culture, and community development
Governance
- Effective governance standards across ThaiBev group entities
- 100% of ThaiBev’s strategic suppliers having implemented their own code of conduct
- Collaboration for positive ESG impact
ThaiBev has already rolled out a number of initiatives across its operations in Thailand to reach these targets. As at 2021, it has achieved the following:
- Completed phase 1 of the installation of solar rooftop panels at five factories in Thailand
- Expanded to seven biogas plants, which generates thermal energy from the combustion of vinasse, a by-product from alcohol distillation, to power its factories, instead of using fuel oil
- Increased the proportion of renewable energy used within the organization to 41.8%
- Reduced water withdrawal in water-stressed areas by 6.3% year-on-year
- Reduced Scope 1 and Scope 2 emissions by 9.9% year-on-year
- Disclosed Scope 3 emissions for the first time, with third-party verification
- Re-utilized 60.2% of food and other wastes for alternative purposes
- Reused and recycled 82% of its product packaging
ThaiBev was recognized as a Global Leader in the beverage industry under the Dow Jones Sustainability Index (DJSI). In 2021, it achieved the highest score of 90 out of 100 points among companies in the beverage industry that participated in the DJSI assessment, with top scores in the social, and the governance and economic categories, and the second highest score in the environmental category. This is the fourth consecutive year that ThaiBev attained this accolade. In addition, it has remained a constituent of the DJSI World Index and DJSI Emerging Markets Index for the fifth and sixth consecutive year respectively.
ThaiBev is also proud to be a part of the Pracharath Rak Samakkee Project, a major partnership network that brings together the public, private, academic, and civil sectors to improve income-generating opportunities for local communities, create jobs and equip youth with knowledge in three areas, namely agriculture, value-added produce and community-based tourism. To date, the Pracharath Rak Samakkee Project has generated over THB1.69 billion. As part of the Project, ThaiBev has contributed to number of activities in 2021, such as the Food Safety in Hospital Project and Local Pakaoma Handicraft Project.
Going forward, the Group will continue to work closely with its business partners to ensure it operates in a socially and environmentally responsible manner amid its pursuit of business growth and stability under the mission of “Creating and Sharing the Value of Growth.”
Human Capital
Dr. Agapol Na Songkhla, Executive Vice President, Chief People Officer, said: “With business presence across many Southeast Asian countries, ThaiBev aims to foster ASEAN as the home for all our people. We want to provide our employees with development and advancement opportunities. Helping them reskill and upskill are important to help strengthen ThaiBev’s position as a sustainable industry leader. To foster organizational strength from within, we have been actively laying the groundwork to realize our philosophy of Limitless Opportunities.”
Under its “Limitless Opportunities” philosophy, ThaiBev offers employees opportunities to learn and develop new skills, to enable them to succeed in and with the organization. Employees of all job levels across the organization are encouraged to take ownership of their self-development through Individual Development Plans (IDP). Employees can develop these IDPs through its Beverest System and select designed learning solutions while conveniently managing and completing ongoing plans at their own pace.
In recognition of its innovative efforts in career ecosystem development, ThaiBev received the Gold Award for HR Excellence in Learning and Development in 2022. It also achieved the following awards in:
- HR Asia Best Companies to Work For (4th consecutive year)
- HR Excellence in Learning and Development (Gold Award)
- HR Excellence in COVID-19 Response (Gold Award)
- Silver Award in HR Innovation (from our career eco-systems that cover 22 job families and 138 sub-job families)
ThaiBev is committed to being among the best employers in the region, with the firm belief that career satisfaction and advancement opportunities are the key to motivating employees to stay with the company for the long term.
ABOUT THAIBEV
Thai Beverage Public Company Limited (“ThaiBev” or the “Group”) is Southeast Asia’s leading beverage producer and distributor and the largest in Thailand. The Company’s vision is to be the stable and sustainable ASEAN Leader in beverage and food business.
ThaiBev was listed on the Singapore Exchange Mainboard in 2006. The Company expanded beyond Thailand with its acquisition of Fraser and Neave, Limited (“F&N”), a well-established conglomerate with a portfolio of highly recognized beverage brands. In 2017, ThaiBev further strengthened its regional presence by acquiring stakes in the Grand Royal Group (“GRG”), the largest whisky player in Myanmar, and in Saigon Beer-Alcohol-Beverage Corporation (“SABECO”), a leading beer producer in Vietnam, which makes ThaiBev the largest beer player by volume in Southeast Asia.
Today, ThaiBev’s business comprises four segments – spirits, beer, non-alcoholic beverages, and food. In Thailand, the Group operates 19 distilleries, three breweries, and 21 non-alcoholic beverage production facilities, and is supported by an extensive distribution network spanning over 500,000 points of sale. ThaiBev is present in over 90 countries, including five production facilities in Scotland which are known for producing single malt scotch whiskies such as Balblair, Old Pulteney, and Speyburn, two production facilities in Myanmar, and one distillery in China which produces the famous Yulinquan Chinese spirit.
The Company’s well-known spirits brands include Ruang Khao, Hong Thong, Blend 285, SangSom, and Mekhong, as well as GRG’s iconic Grand Royal whisky. Chang, the Group’s signature beer, is one of the most recognizable Thai beers locally and internationally, while SABECO’s Bia Saigon and 333 are Vietnam’s top-selling beer brands. ThaiBev’s leading non-alcoholic beverage brands include Oishi green tea, est cola, and Crystal drinking water, as well as F&N’s sparkling drinks and 100PLUS isotonic drink. The Company also operates Japanese restaurants, as well as ready-to-cook and ready-to-eat food businesses, through its subsidiary Oishi Group Public Company Limited. ThaiBev is accelerating the expansion of its food business by leveraging its subsidiary, Food of Asia, and its franchise outlets under KFC, the most popular quick service restaurant brand in Thailand.
ThaiBev is one of the top 10 largest companies on the Singapore Exchange by market capitalization and a constituent of the Straits Times Index. It is also recognized as the Dow Jones Sustainability Indices (“DJSI”) World Indices Leader in Beverages Industry and part of DJSI World family and DJSI Emerging Markets family.
