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AGM 2011 - CEO Presentation to Shareholders

  1. 1. Annual General Meeting CEO Presentation to Shareholders April 25, 2011
  2. 2. 3-year leadership vision #1 #1 30% place for talent in Vietnam 5% return per in each annum vertical for our of Vietnam's shareholders GDP and US$500 million of cashflows
  3. 3. A: Vietnam Tomorrow Today Q: What is the strategy and vision to achieve this?
  4. 4. “The universe is asymmetric.” Louis Pasteur
  5. 5. Everyone sees Vietnam's obvious consumption story 2010 Packaged food and beverages per capita USD per annum 2010 GDP per capita USD PPP thousands Source: Euromonitor; Global Financial Stock database; USGS; BGR Coal; Austrade; Vinacomin; Lit search
  6. 6. But the private sector is too fragmented 2.9% Avg. size of top 20 private sector 2.2% 2.2% companies as % of 2010 GDP 1.5% 0.5% Vietnam Indonesia Philippines India Thailand Source: EIU; Euromonitor; Global Insight; MGI; WDI; Bloomberg; IMF World Economic Outlook Database; Team analysis
  7. 7. Capital markets are undeveloped 33,367 Avg. size of top 20 listed companies (US$ 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
  8. 8. And over competitive…. 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
  9. 9. A: The private sector needs a consolidator. Q: How can Masan build a consolidator?
  10. 10. “Change before you have to.” Jack Welch
  11. 11. Selecting only the scalable sectors where a local private sector company can dominate Largest local private sector companies in more developed Asian 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$8.2bn Source: Bloomberg
  12. 12. Do less but go deep 70%+ market share of key products Fastest growing ATM and branch network, #1 ROAE One of the largest tungsten mines outside China
  13. 13. Not enough to be “Vietnam Plus”… …we have to be “Global Standard” Professional Strategy management Risk management Corporate Operational governance Reputable platform partners
  14. 14. Consolidation Consolidate Vietnam's Consolidate private Consolidate sectors of sector stakes in existing with new existing businesses verticals businesses
  15. 15. The “Masan Way” Getting the best person for each job and Risk management & partnering to deliver capital allocation Local access & execution Professional operators
  16. 16. A: Build the best operating platforms. Q: But how do we survive the volatile macro environment?
  17. 17. “You have to eat while you dream” Jack Welch
  18. 18. Businesses have to grow and make money 25% 43% 69% Return on Average 77% 2010 Gross margin 2006-2010 Net Income CAGR Equity #1 Vietnam 2006-2010 #1 Vietnam Top in region Revenue CAGR #1 Vietnam
  19. 19. Investors and Partners with deep pockets – access to capital
  20. 20. Ruthless capital allocation Since 2009 Sources (US$ mm) Uses (US$ mm) Consolidated cash raised ~555 Increasing stakes in existing ~212 businesses & deleveraging Internally 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
  21. 21. A: Making money is important and saving even more. Q: But is it enough to be “Vietnam Plus”?
  22. 22. “We have them just where they want us” Capt James T Kirk Starship Enterprise
  23. 23. The world is flat – the regional 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$7.5bn IOI Corp Bhd Maybank Petronas Gas Source: Bloomberg
  24. 24. We benchmark ourselves to the best
  25. 25. We have delivered high returns and growth 2010 ROE 33% 29% 37% 11% 10% 2006-2010 net profit CAGR 155% 34% 30% 24% 37% 2006-2010 net profit CAGR 69% 28% 21% 19% 40% Source: Bloomberg; audited reports
  26. 26. But we have not achieved relative scale yet ... EV / GDP 2.2% 7.8% 3.7% 23.3% 6.3% Market Cap US$bn 1.6 14.5 11.9 4.1 10.2 Book Value US$bn 0.5 4.8 2.1 3.8 20.3 Source: Bloomberg; audited reports
  27. 27. A: We have to achieve scale without sacrificing returns. Q: This is all medium term – why should I buy your stock today?
  28. 28. “Be fearful when others are greedy and greedy when others are fearful.” Warren Buffet
  29. 29. Liquidity is drying up Increase in borrowing costs Decrease in trading value
  30. 30. We are ready for the shakeout 3 market leading operating platforms Tested risk management platform War chest of US$250-500mm for investing and M&A
  31. 31. A: Solid fundamental businesses + capital Q: But isn't there more than just strategy for Masan to succeed?
  32. 32. “Talent wins games, but teamwork and intelligence wins championships.” Michael Jordan
  33. 33. A chairman with vision Dr. Nguyễn Đăng Quang
  34. 34. 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
  35. 35. Our team
  36. 36. “I think this is the start of something really big. Sometimes that first step is the hardest one, and we've just taken it.” Steve Jobs

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