Q2’2019 KEY HIGHLIGHTS
117% Net Profit Branch Expansion on Consistent Innovation of Growth YoY Track New Products • Revenue increased by THB 106 • Domestic expansion: • 10 new products including OEM million or 51% YoY i. 6 branches in 1H/2019 products in 1H/2019 • Gross profit increased by THB 63 ii. 2-4 branches in 2H/2019 • 5 new products to be launched in million or 46% YoY • International expansion: Hong 2H/2019 • Net profit increased by THB 34 Kong branch opening soon • New product line – expanding to million or 117% YoY (Q4/2019) longer shelf-life products (Pancake Mix) Industry Outlook 01 Identifies factors affecting the Thai Food and Dessert Industry
Company Performance Displays After You financial performance from the latest 02 quarter
Company Overview and Direction Outlines After You company background and its strategic 03 direction Thailand Foodservice Industry is Expected to Grow at 4.12% Driven by Tourism, Accessibility Channels and Consumer Behaviors
Thailand Consumer Foodservice Industry (Million Baht) Driving Factors of Foodservice Industry 1,085,206
4.12% CAGR
886,916 Tourism • Increasing tourists’ food expenditure 5.08% CAGR • Increasing expenditure per head • Increasing international arrivals 692,369 • Seasonality in tourism
Accessibility Channels • Delivery & Takeaway • The Platform-to-Consumer (Foodpanda, Line-Man, Grab, Get)
Consumer Behaviors • 2013 2018 2023F Growing private consumption • Driving consumer behaviors • Trending consumer behaviors Consumer Foodservice Industry • 4.12% CAGR increase in foodservice industry by 2023 • This growing industry is supported by the increase in tourism, accessibility channels and changing consumer behaviors.
Consumer foodservice consists of desserts & cafés, bars, limited-service restaurant, full-service restaurant, self service and street stalls & kiosks. Source: Euromonitor Consumer Foodservice in Thailand 2019
Industry Outlook Company Performance Company Overview and Direction 4 Foodservice Industry: Incoming tourists play an important role
Tourists’ Food Expenditure per head (Baht/Visit) Seasonality in tourism (Million People) 10,870 10,585 • The comeback of Chinese • The peak season is 10,259 10,308 10.6 9,911 10,038 tourists play a major role between November and 9,866 9.4 9.7 in boosting the tourists’ 9.0 9.2 8.8 8.99.1 March (Q4-Q1) 8.3 8.1 9,027 7.8 7.8 7.6 7.8 8,789 expenditure 7.5 7.07.3 6.4 5.9 5.1 Forecast
2013 2014 2015 2016 2017 2018 2019F 2020F 2021F 2014 2015 2016 2017 2018 Food Expenditure by Tourists (Million Baht) International Arrivals by 2023 (Million People)
1,085,206 CAGR ‘18-’23 51.9 CAGR ‘18-’23
5.05% 6.80% CAGR CAGR Domestic 53% Expenditure 37.4 40% Others (+4.79%) (+2.53%) 7.10% CAGR 505,602 3% Russia (+3.27%) 26.5 44% 4% South Korea (+4.01%) 5% India (+10.34%) 376,132 5% Laos (+9.99%) 4% 52% 5% 10% Malaysia (+8.21%) Tourists’ 4% 53% Others 5% 47% Expenditure USA 7% 10% 4% 5% 5% UK (+6.13%) 4% 5% Malaysia 4% 32% China (+8.97%) 7% 11% 29% 26% China 17%
2017 2023F 2023F 2013 2018 2023F Expected 5.05% CAGR growth in food expenditure by Tourists 6.80% CAGR increase in international arrivals by 2023. • Tourists’ food expenditure are forecasted to increase based on • The recovery and rising of Chinese tourists are expected the expected increase in number of tourists and expenditure per taking the larger proportion, following by Malaysian visitors. head
Source: Euromonitor Tourism Flows in Thailand 2018, Ministry of Tourism and Sports 2017
Industry Outlook Company Performance Company Overview and Direction 5 Foodservice Industry: Asian Tourists are important factors in driving food expenditure
Food Expenditure by Tourists (Million Baht)
376,132
329,145
36% Others (+12.3%) 283,230
35%
230,066 228,053 36% 3% India (+13.4%) 3% Germany (+6.7%) 3% 4% Australia (+4.8%) 183,894 4% 4% Japan (+10.2%) 38% 38% 4% 3% 4% Korea (+14.3%) 4% 4% 4% 4% 4% USA (+11.5%) 41% 5% 3% 4% 4% UK (+8.4%) 3% 4% 4% 4% 5% 5% Malaysia (+13.1%) 5% 5% 4% 5% 3% 5% 4% 6% 7% Russia (+8.6%) 5% 4% 4% 6% 6% 5% 4% 5% 5% 6% 6% 5% 4% 5% 5% 5% 6% 26% 10% 11% 26% China (+38.3%) 5% 25% 9% 15% 16% 11%
2012 2013 2014 2015 2016 2017 15.40% CAGR increase in food expenditure by tourist • Chinese tourists’ expenditure experienced a tremendous • Asian tourists having a very strong • Chinese tourists’ expenditure played an important role growth of 38.3% CAGR during 2012 – 2017. growth are from China, Korea, India and in accelerating the country foodservice industry, with Malaysia and Japan. over a quarter of the total expenditure by tourists.
Source: Ministry of Tourism and Sports
Industry Outlook Company Performance Company Overview and Direction 6 Foodservice Industry: Private consumption expansion influences consumer behaviors
Private Consumption and Consumer Confidence Index Driving Consumer Behaviors
79.9 80.6 Consumer 77.7 76.8 73.5 Confidence 68.8 Index Increasing Faster pace of spending everyday life
129 Private 123 Consumption 121 Index 118 113 110
All-day snacking Increasing use of Eating out with from street stalls food delivery friends or family 2014 2015 2016 2017 2018 2019
Consumer Confidence Index Private Consumption ✓ Consumers are regaining their ✓ This increasing trend is in line confidence about the future with the expansion of consumer economy. income. ✓ The rebound of the index came ✓ The increasing consumption is from the greater confidence in an evidence to consumer FOOD job opportunity and future increasing spending, and INDUSTRY income. influencing changes in consumer behaviors.
Source: The University of the Thai Chamber of Commerce, Bank of Thailand, Euromonitor Consumer Foodservice in Thailand 2019
Industry Outlook Company Performance Company Overview and Direction 7 Foodservice Industry: Delivery and takeaway as another main driver
Foodservice Industry by Eat-In vs Delivery and (Million Baht) Delivery & Takeaway Drive-through
• Rising trend of Platform-to- Consumer • 886,916 Offer food discounts • 841,042 2% Drive-Through Low delivery prices (+22.17%) 807,604 1% • Greater convenience value 768,964 1% • Faster pace of everyday life 735,290 1% • Changing lifestyles order for 1% 692,369 Delivery & Takeaway delivery 1% 38% 37% (+7.17%) • Accessibility to more food options 36% 35% 35% 35% Platform-to-
Consumer Mobile Platform Restaurants Delivery Man Consumers
Eat-In 60% 64% 63% 61% (+3.60%) 64% 64%
2013 2014 2015 2016 2017 2018 7.17% CAGR increase in Restaurants will increase Increase in revenue • Delivery and Takeaway gradually increased at 7.17% CAGR mainly from delivery and takeaway is both their reach and sales will contribute to the the support of Platform-to-Consumer taking a larger portion from Platform-to- expansion of food • Eat-In grew by 3.60% CAGR and still retained its majority position Consumer industry
Source: Euromonitor Consumer Foodservice in Thailand 2019, Statista Online Food Delivery in Thailand
Industry Outlook Company Performance Company Overview and Direction 8 Dessert and cafés: New trends and behaviors drive to outperform the food industry
Trending Consumer Behaviors Average Desserts and Cafés Spending per head (Baht)
3,169 3,387 Average Spending per 2,990 head 2,791 • 2,610 Thai consumer are 2,454 expected to spend more on desserts and cafés due to the rising trends and changing in 2018 2019F 2020F 2021F 2022F 2023F behaviors.
Bubble milk tea Dessert is a lifestyle Desserts for breakfast Desserts and Cafés (Million Baht)
The market value is People want to have it Many dessert cafés are CAGR ‘18-’23 estimated to be 2.5 for socializing and opening earlier and 73,265 5.24% CAGR billion baht. sharing with friends offering sweet breakfast Cafés 21% and family. menu. 56,748 (+5.16%)
8.87% CAGR 21% Desserts 35% 35,243 (+4.00%) 38% 27%
48% 44% Specialist Coffee 42% (+6.35%) 25%
2013 2018 2023F
Desserts and Cafés ✓ Overall Desserts and Cafés outperformed the food service industry CAGR and projected to continue with 5.24% CAGR.
Desserts and Cafés consists of revenues from dessert restaurants, specialist coffee shops and cafés. Source: Euromonitor Consumer Foodservice in Thailand 2019, Bangkok Post
Industry Outlook Company Performance Company Overview and Direction 9 After You is one of the Top 10 key players in desserts and café industry
Desserts and Cafés Market Contribution (Revenue 2018)
Other 11.2%
1.7% 2.4% 30.5% • Revenue of Café Amazon and 2.5% Starbucks represent the 3.1% majority part of the desserts and cafés market.
4.3% • The remaining portion in the Top 10 is separated among dessert brands 5.3% • After You is the youngest 5.7% brand ranked in the Top 10.
21.8% 11.4%
Other restaurants include: Krispy Kreme, Häagen-Dazs, Cold Stone Creamery, Gateaux House, True Coffee, Intanin, McCafé, Coffee World, Punthai Coffee, Coffee Bean & Tea Leaf, Chester’s Coffee, Gloria Jean’s Coffees, Banrie Coffee
Source: Euromonitor Consumer Foodservice in Thailand 2019
Industry Outlook Company Performance Company Overview and Direction 10 Short-Term Challenges Ahead: Supply Side (1)
CPI of Raw Materials Bangkok CRD rental (Baht/SQM/month) Average Wages (Baht)
CPI– Eggs & Dairy Products
101.8 3.75% 3.95% Vacancy 400 Minimum 100 Rate Daily Wage 99.6 99.2 99.5 3.10% 3.10% 325 2.70% 300 300 300 305
2015 2016 2017 2018 2019F 3,908 3,900 12,000 CPI - Flour 3,800 103.1 3,700 100 99.6 100.2 11,087 97.7 10,821 Retail 10,731 Average Rental Rate Monthly 10,415 Salary 2015 2016 2017 2018 2019F 3,500 10,172 CPI – Vegetables & Fruits
106.2 105.4 103.5 100 100.5
2015 2016 2017 2018 2019F 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2019F
CPI of Raw Materials Bangkok CRD rental Average Wages • Price of vegetables and fruits is the most • Retail market slightly expanded due to the • Thai labors are expecting the rise in daily fluctuated and the price is expected to increase in both private and public investment minimum wage to 400 Baht from the new increase further • Vacancy rate is expected to increase resulting government • Price of Flour has gradually increased and is in a higher rental supply as many significant • Average monthly salary in private food forecasted to continue projects are still under construction industry has increased over years and is • Price of eggs and dairy products is expected • Retail rental rate is expected to maintain at forecasted to reach 12,000 Baht per month to slightly decrease this level after the new minimum wage policy
Source: CEIC Data, Nexus Marketbeat Retail Snapshot in Thailand 2018, Bank of Thailand
Industry Outlook Company Performance Company Overview and Direction 11 Short-Term Challenges Ahead: Demand Side (2)
Expected of Consumer Confidence Index TTM Number of Tourists (Million Visitors) Thai Baht Exchange Rate (Baht)
(Million Visitors) (1 USD / THB) (1 CNY / THB) 12 Chinese 37.0 7.0 80.7 Tourists 80.0 16.7% CAGR 10 Consumer 36.0 75.5 Confidence 8 Index 6.5 6 35.0 74.5 5.3% CAGR Malaysian 4 Tourists 34.0 6.0 2 33.0 0 2015 2016 2017 2018 2019 32.0 5.5 130.2 124.3 Private Chinese Tourists Malaysian Tourists 119.2 31.0 Consumption 116.9 -8% 5.0 Index YoY 30.0 3.12 +5% 2.76 2.53 YoY 29.0 4.5 0.96 0.92 1.01 28.0
27.0 A 2 2 2 4.0 u 0 0 0 g 1 1 1 2 20177 20188 20199 2016 2017 2018 2019 0 1 Q2/2018 Q1/2019 Q2/2019 Q2/2018 Q1/2019 Q2/2019 6 Monthly CCI and PCI Index TTM Chinese and Malaysian Tourists Thai Baht Exchange Rate • CCI and PCI Index showed decreasing • Trailing-Twelve-Month (TTM) numbers of • Thai Baht has been appreciating over the past trends in the near future as consumers have Chinese tourists has a positive CAGR over the three years resulting in weakened USD and less confidence over the overall economy, job long run, while in the short-run, the number is CNY. opportunity and future income. expected to decline because of the boat accident. • A strong Thai Baht could discourage • Malaysian tourists, after seasonality adjusted, incoming tourists coming to Thailand in the are expected to level off later. foreseeable future. • In Q2/2018, Malaysian visitors was increased both YoY and QoQ, while Chinese tourists was declined both YoY and QoQ. Source: Bank of Thailand, Ministry of Tourism and Sports, University of the Thai Chamber of Commerce
Industry Outlook Company Performance Company Overview and Direction 12 Industry Outlook 01 Identifies factors affecting the Thai Food and Dessert Industry
Company Performance Displays After You financial performance from the latest 02 quarter
Company Overview and Direction Outlines After You company background and its strategic 03 direction Financial Highlights
51% Revenue 46% Gross Profit 117% Net Profit Growth YoY Growth YoY Growth YoY • Revenue increased by THB 106 • Gross Profit was increased by • Net profit increased by THB 34 million or 51% YoY, and increased THB 63 million or 46% YoY, and million or 117% YoY, and by THB 194 million or 48% from increased by THB 116 million or increased by THB 63 million or 1H/2018 42% from 1H/2018 105% from 1H/2018 • SSSG was 16.4% which improved • Net Profit Margin increased by by 23.8% YoY 6.1% YoY and 5.7% from 1H/2018 • 8 branches were opened
Industry Outlook Company Performance Company Overview and Direction 14 Dessert Café Dominates as the Largest Portion of After You Revenues
Q2/2019 After You Revenue
(Unit: Million Baht) +51% Pop-up Store Catering YoY 312 2% Catering / Pop-Up 287 4% Non-Café 2% 6%
Online Sales OEM 206 2%
94% Dessert Café 93% Dine-In Take-Away (71%) (29%) 98%
Q2/18 Q1/19 Q2/19
Industry Outlook Company Performance Company Overview and Direction 15 Revenue Increased YoY and 1H/19 driving by the Increase in Dessert Cafe Sales
Total Revenue by Business Category (Million Baht) YoY Q2/2019 vs Q2/2018
+48% • Revenue from Dessert Café in Q2/2019 was THB 292 million 599 increased by THB 91 million or 45% from Q2/2018 due to 8 2% Catering/Pop-Up 5% more branches compared to Q2/2018, together with better Same Non-Café Store Sale Growth mainly from take-home products, new menus and seasonal menus. +51% 405 • Revenue from Non-café in Q2/2019 was THB 14 million 2% increased by THB 13 million or 1,300% from Q2/2018 due to the 312 higher volume of major OEM customers’ orders. 2% • Revenue from Catering and Pop-Up in Q2/2019 was THB 6 4% Dessert 93% Café million increased slightly by THB 2 million or 50% from 206 Q2/2018 due to additional catering teams which results in 2% 98% generating more revenue from pop-up stores. 94% 98% 1H 1H/2019 vs 1H/2018
Q2/18 Q2/19 1H/18 1H/19 • For the first half (1H) of 2019, total operating revenue was THB 599 million increased by THB 194 million or 48% from 1H/2018, Dessert Café Sales and Same-Store-Sales-Growth as the total operating revenue from both Q1 and Q2/2019 rose from the same period last year. The increase was mainly due to: 292 266 Dessert Café • Revenue from Dessert Café in 1H/2019 increased by THB 232 Sales (MB) 201 207 161 million or 41% from 1H/2018 as more branches are opened, together with significant improvement in SSSG. Same-Store-Sales- 16.4% • Revenue from Non-Café in 1H/2019 increased by THB 29 11.7% Growth (%) million or 2,900% from 1H/2018 from the higher OEM order 4.2% SSSG volumes, which started from late 2018. -7.4% -11.1% Q2/18 Q3/18 Q4/18 Q1/19 Q2/19
Industry Outlook Company Performance Company Overview and Direction 16 Gross Profit Increased In Line with the Increase in Revenue while GPM Decreased because of Higher Take-Home and OEM Sales
Gross Profit and Gross Profit Margin (Million Baht,%) YoY Q2/2019 vs Q2/2018
67.0% 67.4% 64.4% 64.9% Gross Profit Margin Gross profit in Q2/2019 was THB 201 million increased by THB 63 million or 46% from Q2/2018 in line with higher sales in Q2/2019 compared to Q2/2018. +42% 389 Gross profit margin in Q2/2019 was 64.4% decreased by 2.6% from Q2/2018, due to an increase in sales of take-home and +46% OEM products, which usually have lower gross profit margin. 273
201 Gross Profit 138 1H 1H/2019 vs 1H/2018
Gross profit was increased by THB 116 million or 42% from 1H/2018. The increase was mainly attributable to 4 branches opened in Q1 and 2 branches in Q2 with continuous launch of take-home products, new menus Q2/18 Q2/19 1H/18 1H/19 and seasonal menus during 2019.
Gross profit = Total Operating Revenue – Cost of Sales Gross profit margin in 1H/2019 was 64.9% decreased by Cost of sales mainly consists of cost of raw materials, packages, supplies, 2.5% from 1H/2018. The decrease was mainly attributable salary of production unit’s staff, depreciations, kitchen utensils and space to the higher portion of OEM and take-home sales which usage expense of production unit. Major part of cost of sales is raw yields lower GPM. materials.
Industry Outlook Company Performance Company Overview and Direction 17 Selling Expenses to Revenue Improved from Higher SSSG while Expenses At Branch are Well-Managed
Selling Expenses & Selling Expenses to Revenue (Million Baht,%) YoY Q2/2019 vs Q2/2018
32.5% 32.7% 27.0% 26.5% Percentage to Total Selling expenses in Q2/2019 was THB 85 million increased Revenue by THB 17 million or 25% from Q2/2018 in line with the new +19% branch opening in Q2/2019.
160 Selling expenses to total revenue in Q2/2019 was 27.0% improved by 5.5% from Q2/2018. The increase was due to +25% 134 higher SSSG from take-home product sales, while limited additional selling expenses are needed. Moreover, manpower expenses per branch reduced from operational improvement.
85 Selling 68 Expenses 1H 1H/2019 vs 1H/2018
Selling expenses was THB 160 million, increased by THB 26 million or 19% from 1H/2018, due to the increase in selling expenses regarding new 4 branches opened in Q1/2019 and 2 new branches opened in Q2/2019
Q2/18 Q2/19 1H/18 1H/19 Selling expenses to total revenue in H1/2019 was 26.5% improved by 6.2% from 1H/2018. The decrease was mainly from significant increase in sales from dessert café Selling expenses mainly consist of salaries of dessert café’s staff, space both in Q1 and Q2/2019, while the selling expenses per and equipment rental expenses, utility expenses, and other selling store did not increase significantly as a result of expenses such as marketing and promotional expenses, and depreciation manpower expense control at each branch and process of asset in each branch. efficiency.
Industry Outlook Company Performance Company Overview and Direction 18 Admin Expenses to Revenue Improved from Higher Revenue Growth while Admin Expenses Slightly Increased
Administrative Expenses & Admin Expenses to Revenue (Million Baht,%) YoY Q2/2019 vs Q2/2018 18.7% 17.6% 13.0% 13.6% Percentage to Total Administrative expenses in Q2/2019 was THB 41 million, Revenue increased slightly by THB 2 million or 5% from Q2/2018 mainly due to an increase in salary expenses in the back +14% office. 82 Admin expenses to total revenue in Q2/2019 was 13.0% +5% 72 improved by 5.7% from Q2/2018 due to higher revenue growth while administrative expenses increased insignificantly from better expense control in the back office.
Administrative 41 39 Expenses 1H 1H/2019 vs 1H/2018
Administrative expenses was THB 82 million increased by THB 10 million or 14% from 1H/2018 due to the higher back office salary expenses from business expansion. Q2/18 Q2/19 1H/18 1H/19 Admin expenses to total revenue in 1H/2019 was 13.6% improved by 4% from 1H/2018 due to better control of the back-office expenses while sales increased Administrative expenses mainly consist of salaries of back office significantly in 1H/2019. staff, utility expenses, and depreciation of property, plant, and equipment in the back office.
Industry Outlook Company Performance Company Overview and Direction 19 Net Profit Margin Increased from Higher Dessert Cafe and Better Expense Management
Net Profit and Net Profit Margin (Million Baht,%) YoY Q2/2019 vs Q2/2018
20.0% 20.3% 13.9% 14.6% Net Profit Margin Net profit in Q2/2019 was THB 63 million increased by THB 34 million or 117% from Q2/2018 due to the increase in +105% operating revenue resulting from the increase in sales from dessert café, non-café, and catering and pop-up stores.
Net profit margin in Q2/2019 was 20.0% increased by 6.1% 123 from Q2/2018 due to the increase in revenue from dessert +117% café, better expense management and production efficiency in Q2/2019
1H 1H/2019 vs 1H/2018
63 60 Net Profit Net profit was THB 123 million increased by THB 63 million or 105% from 1H/2018, due to better operation and economies of scale of operating 38 branches 29 Net profit margin in 1H/2019 was 20.3% increased by 5.7% from 1H/2018 as the operating revenue increased, while the SG&A expenses did not increase significantly as the company had better expense control.
Q2/18 Q2/19 1H/18 1H/19
Industry Outlook Company Performance Company Overview and Direction 20 Balance Sheet as at 30 June 2019
Total Assets (Million Baht) Total Liabilities and Equities (Million Baht)
-2% -2%
1,097 1,097 1,080 1,080 Other non-current 6% 70 53 5% assets
Land, Property 46% 505 and Equipment 596 55% 87% 957 925 86% Equity Other current 5% 57 assets 57 5% Short-term 37% 403 Investment 313 29% 2% 24 27 2% Non-current Liabilities Cash and 11% 116 128 12% Current Liabilities Cash equivalent 6% 62 61 6% 31 18Dec 18 30 19Jun 19 31 18Dec 18 30 19Jun 19 Total Assets Total Liabilities The total assets of the company decreased by THB 17 million or 2% The total liabilities of the company increased by THB 15 million or from 31 December 2018. Changes are highlighted as follows: 11% from 31 December 2018. The increase was due to the THB 10 • Short-term investment decreased by THB 90 million or 22% as a million increase in tax payable as a result of the higher net profit. result of dividend payment in Q2/2019. Total Equity • Land, property, plant and equipment increased by THB 91 million The total equity of the company was decreased by THB 32 million or or 18% because of the plant expansion and the increase in new 3% from 31 December 2018. The decrease was due to the dividend branches. payment for the year ended 2018, which was paid in Q2/2019 with the amount of THB 155 million.
Industry Outlook Company Performance Company Overview and Direction 21 Key Financial Ratios
ROA* (%) D/E (Times)
0.17 20.6% 0.15 0.14 0.10 0.09 15.9% 14.2% 13.4% 13.8%
Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19
EPS (Baht per share) ROE* (%)
23.4%
0.07 0.08 17.7% 0.06 15.7% 15.6% 0.05 14.7% 0.04
Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19
*Note: The net profit used to calculate ROA and ROE is actual 4-quarter net profit. The assets and equities are the weighted average assets and equities between the beginning and ending of the period.
Industry Outlook Company Performance Company Overview and Direction 22 Industry Outlook 01 Identifies factors affecting the Thai Food and Dessert Industry
Company Performance Displays After You financial performance from the latest 02 quarter
Company Overview and Direction Outlines After You company background and its strategic 03 direction After You Business at a Glance
Company structure
‘After You Dessert After You Public Company Limited Café began with a (Sale of Desserts) passion to share love, recreating 100% 100% 100% something delightful, just like M & M 2007 Aurum and Aurum After You mom’s kitchen’ Company Limited Company Limited Hong Kong Limited (Not yet in operation) (Distributor and supplier of bakery (Not yet in operation) products and equipment)
Company History and Background
2007 2011 2014 2017 Q2’2019 THE 1ST AFTER YOU Introduced take-away Increased registered • Launched ‘After You Durian’ • Introduced first home-cooked @ J-AVENUE THONGLOR products capital to THB 50 mm • Received GMP and HACCP product (Pancake Mix) • Opened 6 new branches in 1H/2019
2H’2019 FIRST OVERSEAS 2010 2012 2016 2018 BRANCH IN HONG Established ‘After You 2007’ • Established After You • LISTED IN ‘MAI’ MARKET • Started collaboration KONG Company Limited • New factory at Samutsakorn with corporate customer • Started Catering Services • Launched Maygori and airlines • Increased registered capital to • Partner with delivery THB 80 mm for IPO operator
Industry Outlook Company Performance Company Overview and Direction 24 After You Strengths
01 Pioneer of PioneerDessert Café of Dessert with Leading LeaderProduct in Innovation Product and R&D Quality Product and Service Café with Quality Innovations Product and Service
✓ After You opened the first branch at J Avenue Thonglor in 2007 ✓ After You has a strong R&D team that continuously offers new menus and recipes to enhance customers’ experience and ✓ The company offers products made from the finest ingredients and retains the satisfaction highest standard of quality and service creating a unique cozy and warm atmosphere
Strengths
01 Pioneer of HighDessert Growth Café with LeadingStrategic Product Locations Innovation and R&D Quality ProductPotential and Service with Strong Under Multiple Formats
Brand Awareness ✓ After You offers multiple store formats in all high traffic, strategic locations in ✓ Continuous growth through domestic and international branch expansion Bangkok and other main provinces with remodeling of existing store to increase takeaway and capability improvement ✓ The aim is to reach every target group of different genders, occupations, and ✓ Strong brand awareness among dessert café in Thailand lifestyles
Industry Outlook Company Performance Company Overview and Direction 25 After You Strategic Direction
Dynamic Branch Leading Product Sales Channel Expansion Innovation and R&D Enhancement ✓ Domestic Expansion: ✓ Strong and consistently innovative ✓ Actively seeking collaboration ▪ Selectively expand through R&D team opportunities pop-up store ✓ More take-home products ▪ OEM partnership with airlines ▪ Remodeling existing stores ✓ Expansion into new product line and corporates ✓ Branch as a distribution hub (Pancake Mix) ▪ Distribution Channel ✓ International Expansion: partnership with delivery ▪ Through Partnership players (Grab, GET, Lineman) ▪ Co-marketing partners Efficiency and Capability Improvement ✓ Expanding production facilities and benefit through economies of scale • Increasing staff capabilities
Industry Outlook Company Performance Company Overview and Direction 26 1. Branch Expansion: Opened 6 Branches Domestically in 1H/2019
Domestic Expansion
✓ Increasing sales ✓ Increasing distribution hub ✓ Larger area coverage 38 North 32 Chiangmai – 1 27 20 North East Korat – 1 15 Udornthani – 1 11 8 Central Dynamic Branch 1 2 4 7 Bangkok – 26 Nontaburi – 3 Expansion Samutprakarn – 2 Patumthani – 1
✓ Domestic Expansion: 6 Branches Opened in 1H/2019, 2-4 Branches in 2H/2019 East ▪ Selectively expand Pattaya – 1 through pop-up store ▪ Remodeling existing stores ✓ Branch as a distribution hub Icon Siam – 16 Jan 101 The Third Place – 5 Feb Central Patong – 15 Feb ✓ International Expansion: South ▪ Through Partnership Phuket – 1 Hadyai – 1
The Market – 20 Feb Sukhumvit 11 – 30 Apr Central Hadyai – 15 Jun
Industry Outlook Company Performance Company Overview and Direction 27 1. Branch Expansion: Seek new opportunities through pop-up store and expanding existing store sales through remodeling
Pilot locations through Pop-Up Remodeling After You Existing Stores Stores (1-2 per month)
✓ Test new market & explore demand ✓ Increasing takeaway sales ✓ Obtaining potential branches at low costs ✓ Increasing turnover rate ✓ 7-10 days sales at up-country malls & events ✓ Convert existing store into a distribution hub
Dynamic Branch Expansion
✓ Domestic Expansion: Central Plaza Surat Thani ▪ Selectively expand through pop-up store ▪ Remodeling existing stores ✓ Branch as a distribution hub
✓ International Expansion: ▪ Through Partnership
MRT – Pop up store Silom Complex – first store remodeling
Industry Outlook Company Performance Company Overview and Direction 28 1. Branch Expansion: Hong Kong branch expansion through partnership is on track
International Expansion Through Partnership
✓ New market opportunity ✓ Expanding customer base Why Hong Kong? ✓ Relatively Low regulations for FDI ✓ High numbers of tourists from China ✓ High spending per head as a result of high income
Dynamic Branch Hong Kong Branch Partnership Expansion Criteria ✓ Have restaurant business in China ✓ Domestic Expansion: facilitating growth to China ▪ Selectively expand through pop-up store ▪ Remodeling existing stores ✓ Branch as a distribution hub Hong Kong Branch Progress Update
Complete ✓ International Expansion: Operate ▪ Through Partnership Contract Store Staff training at Store Preparation for Design + Bangkok Office Construction + Store Opening
Q2/2019 Q3/2019 Q4/2019
Industry Outlook Company Performance Company Overview and Direction 29 2. Strong Product Innovation: Launched Approximately 8 Products in 1H/2019
Innovative R&D Team Launches Continuously Increasing Take-Away 8-10 Products Per Year Products ✓ Enhance SSSG ✓ Increase Sales ✓ Retain Existing Customers ✓ Use existing branch as a distribution hub
Jan 21
Feb 5
Feb 11 Leading Product Feb 26 Innovation and Mar 7 Apr 11 R&D Expansion into New Product Line May 5 ✓ Strong and consistent ✓ Longer shelf life innovative R&D team May 14 ✓ Supported by more distribution channel (Modern Trade) Jun 1 ✓ More take-home products Jun 19
✓ Expansion into new ?? product line (Pancake Mix) ?? ??
Industry Outlook Company Performance Company Overview and Direction 30 3. Sales Channel: Strong Partnership for Product Collaboration, Distribution Channel and Co-marketing Activities
Airlines and Corporates OEM Delivery Services Partners Partners
✓ Continuous revenue stream ✓ Higher area coverage of potential ✓ Increase brand visibility customers
Sales Channel Enhancement Co-Marketing Partners ✓ Ensured revenue stream ✓ Actively seeking ✓ Increase brand visibility collaboration opportunities ▪ OEM partnership with airlines and corporates ▪ Distribution Channel partnership with delivery players (Grab, GET, Lineman) ▪ Co-Marketing Partners
Industry Outlook Company Performance Company Overview and Direction 31 4. Efficiency and Capability: Continuous Investments to Improve Capacity, Capability and Productivity
Investment in Facilities for Growth Machineries and 1 New Plant 2 Equipment 3 Cold Storage
✓ Accomodate increasing ✓ Improve efficiency ✓ Reduce cold storage rental demands ✓ Increase production Better supply management ✓ Facilitate export and capacity ✓ Preparation for exports for international operation ✓ Increase economies of scale international operation
Efficiency and Capability Improvement
✓ Expanding production facilities and benefit through economies of scale Investment for Staff Capability Improvement
✓ Increasing Staff ✓ Increase productivity Capabilities
Industry Outlook Company Performance Company Overview and Direction 32 Summary of Action Plan in 2H/2019
Strategies Initiatives in 2H/2019
• 2-4 branches Dynamic Branch • Remodeling branch 1 Expansion • Pop up stores in selected locations • 1st Hong Kong outlet before Christmas
Leading Product • New flavors of dine-in and take-home products Innovation and • Return of seasonal menus R&D 2 • Dessert for festival (Mooncake)
• New OEM partner with exclusive products Sales Channel Enhancement • Promotion with platform provider (Grab, GET,Lineman,) 3 • Increasing orders from exisitng OEM partners
Efficiency and • Continuous development of store design and manpower at branches Capability • Utilization of new phase facility Improvement 4 • Ecomomy of scale for procurement functions
Industry Outlook Company Performance Company Overview and Direction 33