Contents Investor 03 Information Financial 04 Highlights Message from 20 the Chairman Board of 40 Directors Shareholding 24 Structure Executive 42 Committee Report of the Board 28 of Directors Profile of Directors 44 &Key Management Organization 52 Structure Product 58 Portfolio Operating and 60 Financial Review Our people 94 Our Success Credit Rating 96 Announcement 98 Awards Corporate Governance 100 Report Corporate Social Financial 108 Responsibility Report 118 Statements PR Interested Persons 112 Talk 149 Transactions Report Audit Committee Accounting Manual Policy/ 116 Report 213 SAP System Audit Report of Announcements to 117 Certified Public 215 SGX 2007 Accountant General Corporate 216 Information Annual Report 2007 Thai Beverage Public Company Limited 03 Investor Information President’s Talk Thai Beverage is listed on the Singapore Exchange (SGX-ST) main board STI ticker THBEV Reuters tbev.si Bloomberg thbev sp Google Finance SIN:Y92 IPO date 30 May 2006 8,760 HOURS OF IPO offer price S$ 0.28 Fiscal year ends December 31 External Auditor KPMG Phoomchai Audit Ltd. HAPPINESS Dividend Policy Not less than 50% of net profit after deducting all appropriated reserves They say time flies right by you when you're enjoying life. How true that is! Still, the past year's nearly 9,000 hours ThaiBev's stock performance Vol. Price (M shares) (S$) somehow didn't seem enough for the bustling energy with Share price* Thaibev close Volume which we filled every bottle of ThaiBev products. Simply put, 2007 High S$ 0.29 1600 0.3 2007 Low S$ 0.24 our steady growth truly stemmed from our 110% dedication. *data from January 3 to December 31, 2007 Source: www.shareinvestor.com For us at ThaiBev, the mere sight of sparkling bubbles and 1400 a golden smile-shaped reflection no Investor Relations Contact Investor Relations Department doubt convey our brimming happiness 1200 0.25 Thai Beverage Public Company Limited to customers worldwide. With such 14 Vibhavadi Rangsit Road, Chomphon 1000 Chatuchak, Bangkok 10900, THAILAND rippling effects across the globe, this Mr. Richard W. Jones happiness and your collective trust 800 0.2 Tel: +662 127 5035 Fax: +662 272 2280 in us concurrently foster our robust E-mail: [email protected] 600 business.By any standard, 2007 Ms. Namfon Aungsutornrungsi Tel: +662 127 5037 E-mail: [email protected] was a memorable year for all ... 400 0.15 so much so that I wish there were Ms. Ariya Silakorn Tel: +662 127 5036 Mr. Thapana Sirivadhanabhakdi more than 24 hours in a day! 200 E-mail: [email protected] President Corporate website: www.thaibev.com January April June July August September October 0 February March May November December 0.1 IR website: www.thaibev.com/set/investor.html 2007 Annual Report 2007 Thai Beverage Public Company Limited 05 Financial Highlights ANNUAL REPORT 2007 Thai Beverage Public Company Limited (Consolidated) (Consolidated) 2007 2006 2005 2007 2006 2005 Million Baht Million Baht Million Baht Million Baht Million Baht Million Baht Income Statement ( Mil.Baht ) Profitability Ratio Revenue from sales 100,541 97,798 94,903 Gross Profit Margin % 29.51 29.11 31.31 Total revenues 100,839 97,956 95,190 EBITDA Margin % 21.14 21.06 22.40 Cost of sales 70,873 69,325 65,188 EBIT Margin % 16.19 16.31 17.73 Gross profit 29,668 28,473 29,715 Other Profit Margin % 0.30 0.16 0.30 Operating profit 15,979 15,789 16,534 Operating Cash Flows to EBIT 16,277 15,946 16,822 Operating Profit Ratio % 101.02 90.07 169.82 Net profit 10,383 10,055 10,337 Net Profit Margin % 10.33 10.28 10.89 Depreciation and amortisation 4,974 4,652 4,432 Return on Equity % 19.32 23.86 31.58 EBITDA 21,251 20,598 21,254 Balance Sheet ( Mil.Baht ) Efficiency Ratio Current assets 33,129 33,522 36,349 Return on Assets % 12.58 11.64 11.35 Non-current assets 46,398 52,058 50,788 Return on Fixed Assets % 22.41 20.22 21.17 Total assets 79,527 85,580 87,137 Fixed Assets Turnover times 1.22 1.13 1.04 Current liabilities 19,049 26,151 55,228 Non-current liabilities 5,568 6,875 195 Total liabilities 24,617 33,026 55,423 Shareholders’ equity 54,910 52,554 31,714 Total liabilities and shareholders’ equity 79,527 85,580 87,137 Liquidity Ratio Leverage Ratio Current Ratio times 1.74 1.28 0.66 Debt to Equity Ratio times 0.45 0.63 1.75 Quick Ratio times 0.27 0.20 0.14 Interest Bearing Debt to Operating Cash Flows Ratio times 0.86 0.55 0.52 Equity Ratio times 0.29 0.46 1.43 Receivable Turnover times 72.20 70.32 60.51 Interest Coverage Ratio times 20.29 13.13 12.20 Average Collection Period days 5.06 5.19 6.03 Dividend Payout Ratio % 70.13 54.94 51.08 Inventory Turnover times 2.51 2.43 2.09 Average Inventory Period days 145.16 150.22 174.37 Payable Turnover times 31.32 34.95 35.20 Average Payable Period days 11.65 10.44 10.37 Cash Cycle days 138.57 144.97 170.03 Annual Report 2007 Thai Beverage Public Company Limited 07 What's New SHOW TIME MY TIME Full-bodied Beer a cut above the rest Making its grand splash into the UK market with its premium look, Beer Chang is the talk of the Archa Beer town these days. Would it surprise you then to see Elephants toasted in every pub there? Archa Beer Crowned and in the Game Sooner than one can say Archa, this beer has chalked up 600% growth in revenue, sending our competitors scurrying back to their marketing textbooks. Old Liquor in New Bottles Rebottled and rebranded, your perennial favorites have now transformed into heartbreakers. 1998 1983 1982 Gold Medal from International Gold Medal from International Gold Medal from International Beer Awards Australia Spirit Awards in Madrid Spirit Awards in Madrid Chang Beer SangSom Rum SangSom Rum Annual Report 2007 Thai Beverage Public Company Limited 09 GUESS WHOSE Beer: Volume , Total 2007 : 957 2006 : 923 million liters Special Report SMILE YOU LL Low Alcohol Low Alcohol Beer Beer SEE WITH 313 102 RISING SALES ? Chang Chang 644 821 Total Sales 2007 2006 million baht 100,541 110,000 Spirits: Volume 97,798 100,000 Total 2007 : 446 2006 : 476 90,000 million liters 80,000 368 70,000 329 Sales of THB 100.5 bn in 2007 60,000 50,000 from industrial 1% 117 alcohol and others 40,000 from beer and water 30,000 108 47% from spirits 20,000 52% 10,000 0 White Brown White Brown 2007 2006 2007 2006 Annual Report 2007 Thai Beverage Public Company Limited Time Travels As the lights go out in our Bangkok headquarters, they are coming on in our New York offices, and it is ROCK only half way through the day at our Airdrie offices. Whatever the AROUND time, somewhere in the world ThaiBev is getting down to THE CLOCK business. Believe it or not ... in any given second, a ThaiBev guy is whistling away, working in a distant corner of the world. Annual Report 2007 Thai Beverage Public Company Limited 13 Hot Issue Spirits Beer GLOBAL COOLING So torrid is the alcohol beverage market these days, but not because of global warming. ThaiBev has made waves in practically all aspects of the business this past year, ranging from new looks for its brands, Expansion into global markets, to the quenching of a million thirsts. Annual Report 2007 Thai Beverage Public Company Limited 15 made in Thailand around the world Annual Report 2007 Thai Beverage Public Company Limited 17 Sukhumvit 09.00 pm Chiangmai 10.30 pm Lifestyle Kaosan Road 08.22 pm Silom Soi 4 08.38 pm Phuket 06.30 pm Asoke 09.46 pm HAPPY HOURS Ramintra 06.26 pm Lung Suan 11.00 pm Bangkok 06.30 pm Rachadapisek 07.13 pm Annual Report 2007 Thai Beverage Public Company Limited 19 Society GENTLE AS RAIN DROPS In that it is our duty to play an active role in national development, to better our society, and to assist those in need, Thai Beverage Public Company Limited (ThaiBev) has a long history of contribution to projects and activities to display our loyalty to the monarchy and improve society, education, sports, public health, safety and dissemination of a good reputation for Thailand. The following accounts describe our major contributions in 2007. Annual Report 2007 20 Message from the Chairman Dear Shareholders, Since our listing on the Singapore Exchange in May We also intend to continue what we call a premiumisation 2006, the Company has begun to plan for changes that process by launching higher margin products to lift will make it more professional and competitive inside our portfolio into the standard and premium ends and outside of Thailand. It was the Board’s intention of both spirits and beer. This will enable us to gain when we were established as a public company, with higher margins over time and prepare for consumer all that that entails regarding corporate governance and aspirations as the economy improves in the long term. greater professionalism. While these internal projects To achieve this, we will continue to invest in our brands by have not warranted detailed reports previously, needless investing in integrated marketing communications and to say, we believe that improvements to our human premiumisation. Some passing examples would be the resources structure and greater accountability at all introduction of gift boxes for some of our spirits products levels of management will assist us in implementing like Sangsom and Mekhong.