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Everyone sees Vietnamsobvious consumption story 2010 Packaged food and beverages per capita USD per annum 2010 GDP per capita USD PPP thousands Source: Euromonitor; Global Financial Stock database; USGS; BGR Coal; Austrade; Vinacomin; Lit search
But the privatesector is toofragmented 2.9%Avg. size of top20 private sector 2.2% 2.2%companies as %of 2010 GDP 1.5% 0.5% Vietnam Indonesia Philippines India Thailand Source: EIU; Euromonitor; Global Insight; MGI; WDI; Bloomberg; IMF World Economic Outlook Database; Team analysis
Capital markets areundeveloped 33,367Avg. size of top 20 listedcompanies (US$ mm) 11,565 9,643 5,221 1,081 Vietnam Philippines Thailand Indonesia India Source: EIU; Euromonitor; Global Insight; MGI; WDI; Bloomberg; IMF World Economic Outlook Database; Team analysis
And overcompetitive…. Profit before tax Net turnover Profit before tax (margins %) 5.2% = average 5.8% State-owned enterprises 1.2% Local private sector Foreign-owned/ 12.2% partnerships Source: EIU; Euromonitor; Global Insight; MGI; WDI; Bloomberg; IMF World Economic Outlook Database; Team analysis
A: The private sectorneeds a consolidator.Q: How can Masan builda consolidator?
Selecting only the scalable sectors wherea local private sector company can dominateLargest local private sector companies in more developedAsian economies are multi-billion market cap businesses Consumer Financial services Resources US$3.0bn US$28.3bn US$9.0bn US$14.5bn US$56.1bn US$16.2bn US$5.5bn US$21.0bn US$8.2bn Source: Bloomberg
Do less butgo deep 70%+ market share of key products Fastest growing ATM and branch network, #1 ROAE One of the largest tungsten mines outside China
Not enough to be “Vietnam Plus”……we have to be “Global Standard” Professional Strategy management Risk management Corporate Operational governance Reputable platform partners
Consolidation Consolidate Vietnams Consolidate private Consolidate sectors of sector stakes in existing with new existing businesses verticals businesses
The “Masan Way”Getting the best personfor each job and Risk management &partnering to deliver capital allocation Local access & execution Professional operators
A: Build the bestoperating platforms.Q: But how do wesurvive the volatilemacro environment?
Businesses have togrow and make money 25% 43% 69% Return on Average77% 2010 Gross margin 2006-2010 Net Income CAGR Equity #1 Vietnam2006-2010 #1 Vietnam Top in regionRevenueCAGR#1 Vietnam
Investors and Partners withdeep pockets – access to capital
Ruthless capital allocationSince 2009Sources (US$ mm) Uses (US$ mm)Consolidated cash raised ~555 Increasing stakes in existing ~212 businesses & deleveragingInternally generated cash ~138 Nui Phao funding commitments ~130 Masan Consumer ~57 capital expenditure Masan Consumer ~49 planned debt payments ~693 ~448 Current cash for M&A and investments: US$245mm
A: Making money isimportant and savingeven more.Q: But is it enough to be“Vietnam Plus”?
“We have themjust where theywant us” Capt James T Kirk Starship Enterprise
The world is flat – theregional leaders are coming Consumer Financial services Resources US$8.1bn US$39.1bn US$25.1bn Nestle India State Bank NMDC US$14.5bn US$260.1bn US$93.2bn Tingyi ICBC China Shenhua US$5.5bn US$21.0bn US$8.2bn Indofood BCA Adaro Energy US$4.9bn US$26.9bn US$26.6bn Asia Pacific Breweries DBS Group Wilmar US$6.9bn US$13.0bn US$7.0bn CP Group Siam Comm Banpu Pub US$11.2bn US$21.9bn US$7.5bn IOI Corp Bhd Maybank Petronas Gas Source: Bloomberg
Our leadership Mr Hồ Hùng Anh Mr Nguyễn Đức Vinh Mr Trương Công Thắng Vice-Chairman Masan Group CEO Techcombank CEO Masan Consumer Mr Dominic Heaton Mr Nguyễn Thiều Nam CEO Masan Resources Deputy CEO Masan Group