Operator: [Audio Gap] 2025 Results Call. [Operator Instructions] I will now hand over the call to the presenters, Ms. Namfon Aungsutornrungsi, ThaiBev's Head of Investor Relations and members of ThaiBev's senior management team. Thank you.
Namfon Aungsutornrungsi: Good evening, ladies and gentlemen, and welcome to the ThaiBev's Financial Results Conference Call for the year ended 30th of September 2025. I am Namfon Aungsutornrungsi, Head of Investor Relations. For the conference call tonight, I will begin with a summary of our full year 2025 results, then we will open the line for a Q&A session with our management team. For the summary of our results, the total sales revenue of the group for the fiscal year ended 30th of September 2025 was THB 333,286 million, a decrease of 2.1% compared to the same period last year. This was due to a decrease in sales revenue across all businesses. Net profit included associated companies was THB 31,153 million, a decrease of 11.7% compared to the same period last year. This was due to a decrease in net profit of spirits business, nonalcoholic beverage business, food business and other businesses, partly offset by an increase in net profit of the beer business. The Board of Directors has proposed a total dividend of THB 15,581 million or THB 0.62 per share, representing a 61.4% payout ratio. This includes an interim dividend of THB 0.15 per share that paid in June 2024 -- sorry, in June 2025 and a proposed final dividend of THB 0.47 per share. For the highlight of our operation, in 2025, the spirits business recorded a 1.8% year-on-year decline in sales revenue to THB 118,604 million. Sales volume decreased by 3.2%, primarily due to the weaker domestic consumption, while the international business, including Myanmar delivered a strong performance. Nevertheless, an increase in brand investment and marketing activities and a foreign exchange loss led to a decrease in net profit of 7% year-on-year to THB 19,880 million. The beer business recorded a decline of 2.5% year-on-year in sales revenue to THB 123,222 million in fiscal year 2025. Even as total sales volume rose 3.1%. The performance was affected by continued challenges in Vietnam market. offset partly by a steady recovery in Thailand. However, with lower key raw material costs and improved production efficiencies, the business delivered an impressive 24.6% jump in net profit year-on-year to THB 6,503 million. The nonalcoholic beverage business recorded a 1.6% year-on-year decline in sales revenue to THB 64,774 million in 2025, mainly due to a softer domestic consumer sentiment as well as the appreciation of Thai baht against the Singapore dollar. Despite lower packaging costs and improved production efficiency, higher brand investment and marketing activities to engage consumers across our channels together with increase in income tax expenses following the expiration of tax incentive in Thailand resulted in 13.4% year-on-year decrease in net profit to THB 5,141 million. In 2025, the food business reported sales revenue of THB 21,899 million, representing a 1.7% decrease year-on-year, primarily due to softening consumer sentiment, which affected spending. Increased labor costs and marketing expenses, along with higher depreciation from the restaurant expansion contributed to a net loss of THB 128 million in the food business. In 2025, the others business comprising publishing and printing registered a decline in sales revenue of 7.4% year-on-year to THB 4,999 million. This was mainly due to the absence of one-off contributions, including title sales and nonrecurring license income. As a result, the business reported a net loss of THB 243 million. Please note that in fiscal year 2024, the others business included a share of profit from the investment in FPL of THB 2,517 million. This contribution did not recur in 2025 and onwards. Now it comes to the Q&A session, and we will now open the call to any questions on our results. Ray, please open the line for Q&A.
Operator: [Operator Instructions] The first question is from Xuan Tan from Goldman Sachs.
Xuan Tan: First question is on spirits. So first question is on Spirits. Can you give some color on what happened to fourth quarter revenue in terms of the magnitude of decline specifically?
Sopon Racharaksa: Yes, this is from Sopon from Spirit Group. Okay. Let me again paint you the picture also from the whole year. We started with not so good in first quarter, as you know, and then we're climbing up, it was climbing up. From the second quarter and third quarter, I think these 2 quarters, I think we were doing so good, matching the expected. But then the fourth quarter that you just mentioned, actually, if you look at in Thailand because Thailand is our major market, if you look at the fourth quarter, there are several incidences that happened in Thailand as well. We look at first from actually the border conflict I think you might already well aware of this already that this happened in that area that actually in that region, our sales is -- most of the sales are in that area. So we -- our agent has had to stop from selling. And so we -- in the fourth quarter, almost the whole quarter that we have to actually be -- so taking the safety first, we try to actually avoid selling into that area because also no one's actually be living in that area. And also those Cambodian workers who were working in Thailand, they left the country and went back to Cambodia. So I must say that it's over 600,000 people that they were our customer before taking the white spirit. So that's quite the unfortunate incident for the border conflict. And then also in the -- almost to the -- during the fourth quarter, there were a flood in the North and also in the Central of Thailand. Now you might heard the news about the flood in the southern but there were flood in the North, Northern and the Central of Thailand during the fourth quarter as well. And then we were waiting also in the fourth quarter for the new policy from the Thai government looking to the new government coming and then waiting to see what will be the new policies in terms of the promoting. And they just launched that policy this quarter, which is the first quarter. So the fourth quarter, I would say there will be some stagnant and waiting period of what will be going on for this new government and also for the natural disaster coming and also the conflict between the 2 countries. So that caused us that we were almost to be good after the third quarter and then have -- unfortunately, we had to drop in the fourth quarter. So that will be the impact of what's going on in the fourth quarter.
Ueychai Tantha-Obhas: Xuan Tan, this is Ueychai. Another reason because fourth quarter last year, we sell in quite a bit because expected to have a sellout during the new year. And it doesn't come out because during the time, the economy is not as good as we thought. So it's kind of loaded too much on the fourth quarter. That's why when you compare the fourth quarter last year and this year, it's not a fair comparison. The impact of this year is also what Khun Sopon mentioned on the Cambodia border and everything but it's not that great because the other big reason is we're selling quite a bit on the fourth quarter last year. Expect a good new year, but it's not come out as we expected.
Xuan Tan: That's helpful. If I were to take a step back and look at spirits volume, it has been declining for the past 3 years. So do you think there is a structural issue going on? And if that's the case, does it make sense to actually scale back on brand investment and marketing activities?
Sopon Racharaksa: So we still don't see any structural change in Thailand or even in our international just yet. I think it's just only that in Thailand, particularly on the economy, if you look at the economy after the COVID time a couple of years ago, and then we are out of the COVID but the economy is still not so good. The grassroots, household debt are still around. So the purchasing power of the economy, so they're still impacting the consumption of the alcoholic beverages. So I think we still see as a typical impact from the general economy at this moment, still haven't seen the structural change, particularly in the Thai market as well.
Operator: Our next question is from Zheng Feng Chee from DBS.
Zheng Feng Chee: Okay. So a couple of questions. The first one, maybe touch on the marketing spend, right? So it seems a bit elevated as a percentage of sales. So do you foresee that level of spending going forward? Or is this higher level of sales is because of lower sales, the percentage is a bit higher? And how should we see that marketing spend going forward to FY '26? That's the first question. And maybe a second question would be, are you able to share some color in terms of potential corporate actions and time line for corporate actions maybe in your beer business or nonalcoholic beverage business? Maybe these 2 questions.
Namfon Aungsutornrungsi: When you talk about the marketing spend, you talk about across the group, right?
Zheng Feng Chee: No, more for spirit segment because it's quite high as a percentage of sales. But is this more like because sales is lower or...
Sopon Racharaksa: This is from Sopon from Spirit Group. Thank you for your question. On the marketing expenses and A&P, I think we are cautious about this spending. So we are trying to utilize our trading network better because that's our strength in Thailand. And we'll try to only do necessarily promotion for our products, even though that next year, we're going to launch new product more and more. But then again, we only try to do through the trade marketing networks that we have already in place in the country. So again, we are cautious about the spending, and we'll do our best to keep it as normal.
Unknown Executive: This is [ Tip ], based on the competition...
Namfon Aungsutornrungsi: Sorry, you want to ask anything more for the spirits side?
Zheng Feng Chee: No, no. That's very helpful.
Namfon Aungsutornrungsi: Okay. Then we update on the competition in the beer side.
Unknown Executive: This is Teck. The competition in beer in Thailand, we say that the competitive in the beer market is always like that. And it's only between only the 2 local companies, okay? But we do not see a big or any major change in the competition in Thailand as yet. Thank you.
Zheng Feng Chee: Okay. Got it. So maybe follow-up in terms of how is the beer performance doing? Because I think there is this Japan, China tension, right? Is it diverting more tourists to Thailand? Are you seeing some improved performance in beer or in the last couple of weeks?
Teck Tan: In Thailand, our performance is quite impressive, and we continue the good momentum. Thank you. You can see that our profit also grew by double digit. So still continue the momentum.
Ueychai Tantha-Obhas: Lester, maybe you comment on the Vietnam.
Teck Tan: Yes, I guess you may have said to our call a couple of weeks ago, I think local market conditions have been tough. So while we picked up market share, if you look at total volumes and total revenue, they are down slightly, and that's an indication of the total market, not just ourselves. But because it's an open market, so competition remains very, very fierce. And we've got all the international players that we compete against. But it's good to see that Bia Saigon continues to be the #1 brand in Vietnam, and we will have to keep it there at a very adequate level of spend. Back to your question about A&P. Because it is a competitive market, we will have to do it very efficiently to make sure we remain #1 at an adequate level of spend to meet competition.
Zheng Feng Chee: Okay. That's very helpful. So I mean, given that beer performance seems to be improving, is it any potential that IPO will be happening in FY '26? Or do you think that to be delayed further?
Unknown Executive: This is a repeat question. I asked this question at least. And I think the answer remains the same as before. As you well know, the market conditions now are not conducive to a listing of the company. So we will continue to drive performance in the company and improve in many other ways to get it ready so that when the market is ready, we will be ready to go for IPO.
Operator: Our next question is from Meghana Kande from CGS International.
Meghana Kande: So I have a couple of questions. Maybe first, just following up a little bit on the spirits side. So you've launched a few new products this year already, and you just mentioned that you plan to launch a few more next year. So just wondering when do you expect to see that scale up in your volumes where you start to achieve the economies of scale given the high A&P spend that you have planned -- you've already done this year and have planned for next year? Basically, just wondering your expected time line on the scale-up for your new products. That's my first question. Second is regarding your nonalcoholic beverage side in Thailand. So I think we're seeing F&N do quite well with the Malaysia dairy side. But I think on Thailand, the domestic market was a little bit weak, as mentioned, because of the domestic consumer headwinds. But we're also simultaneously hearing some competitors gaining market share on the NAB side. So maybe can you just help explain your strategy a little bit in terms of pricing action, marketing, any product development for your NAB specifically in Thailand? And my third question is regarding your beer segment. So I'm kind of looking at your other markets, international markets like Myanmar and Cambodia. So can you give any color on the volume trends for your beer and spirits as well in Myanmar? How has your market share trended this year? And also lastly, any progress update on your Cambodia brewery?
Songwit Sritham: This is Songwit, Chief of Spirits in Thailand. So regarding your question about the NPD. So let's say that for the last year, we launched 2 major brands that the first one was the new single malt that we call PRAKAAN that mainly we sell domestic and also export for some country, for example, in the Europe and Japan. And then the second brand that we launched with the new category we call the ready-to-drink or RTD. And if you asks about our expectation. I would say that for the new whiskey single malt, we still need time to get the breakeven but that's not a huge investment. But for the ready-to-drink category, we see the breakeven just only within the 1 year after the launch. So that in the last year. And then for this year, that Khun Sopon mentioned that for the series of our NPD, actually, we are cautious about our spending. So we launched the same brand mainly but we extend the SKU. For example, we launched the brown spirit in the affordable size, meaning the 200 ml and which is -- which are the current brands, meaning HongThong, Makro, Meridian and SangSom. And we see the trend that due to the phasing of the challenging of the economy. So we said the target price is more affordable. However, we still maintain our gross margin on that particular group. And then second one, we just launched a new product last week that is called HongThong ready-to-drink as well. And HongThong is the #1 brand in Thailand. So we don't need to invest any more A&P to build brand that put more of the distribution, especially for the off-trade and the modern trade channel. So I think that's all for our strategy in NPD.
Sopon Racharaksa: This is Sopon again. For the Myanmar market for spirit group, I must say that last year was a very good year for us, even though we was hit by the earthquake in March. but we came out quite solid after that, the sales revenue went up more than 20%. And then the result was so good. And then the only difficulty that we are facing in the market would be internal logistics that we will not be able to go into some area. Those are conflict area in the border of Myanmar and also difficult to find a hard currency, particularly the U.S. dollars. That's we have to slowly try to think along how to get the U.S. dollar for our importation. But in general, with our market share over 70%, and we strongly introduced quite a new products in the market as well. So I'm quite confident with this market.
Unknown Executive: Excuse me for NAB, actually, the information that you just mentioned about the market share, I think, is not the right information because, in fact, in the very high aggressive competition, we are able to secure and grow our market share in the core categories, and we are the only brand that grows both in drinking water and also in CSD categories, which are the biggest -- 2 biggest categories in NAB in Thailand. So we are still maintain -- secure our leadership in all core categories and also grow the volume offtake and also market share.
Sopon Racharaksa: In Cambodia, all the 3 facilities being built. It's completed -- going to be completed in the next few months within the end of the year. And I think commercial productions will probably sometime toward December into January. So that's the status.
Ueychai Tantha-Obhas: I think with the breweries and also the factories of NAB, we'll be able to claim that we are local production. So that will help, and we will start next year again in January. So we will come out with the product with all the packaging and everything Cambodian and made in Cambodia, which is now quite acceptable with the people in Cambodia.
Meghana Kande: Got it. It's very helpful. Just 2 small follow-up questions. So one on Myanmar. Did I hear correctly that the market share was over 20%? Just want to confirm if I heard that correctly. And second, on the NAB side, thank you again for clarifying regarding the market share trend there. But just wondering on your strategy for next year in terms of marketing or pricing action for next year for NAB?
Ueychai Tantha-Obhas: In Myanmar Spirit, I think we gained share. Right now, we're in the region of 72% of whiskey market increased from last year's 70%. So in NAB, I think we still have -- I mean, for Oishi still quite a small business there, but growing. But for F&N, it's doing quite well there. But I can't -- we don't have the information on market share actually for that market.
Namfon Aungsutornrungsi: Meg, I think the second question you asked about the marketing spend for NAB going forward. Is it?
Meghana Kande: Yes, that's right. Yes. Market share -- sorry, marketing spend and also your ASP pricing, any action on that?
Namfon Aungsutornrungsi: Actually, in terms of ASP, normally, we do not disclose because this one, we're quite careful because we also don't want our competitor to know what is the plan for us. Yes. In terms of the marketing spend for NAB as you know, it's not just spirits. I think it's all across the segment that we carefully spend our marketing. We try to do it more efficiently as well as in order to make the bottom line improve in 2026. Yes. So we all control it across category.
Operator: [Operator Instructions] Our next question is from Selviana Aripin from HSBC.
Selviana Aripin: I have a question with regards to commentary, if you could provide some comments around raw materials input costs, particularly going into 2026. What should we expect? I know there was -- I guess we have enjoyed quite favorable raw material costs, particularly in the beer in this financial year. Should we expect that to continue into next year? Probably if you could help us with that comment for beer as well as spirits division, that would be helpful as well packaging in general.
Ueychai Tantha-Obhas: Selviana, thanks for the questions. I think in terms of all that is quite favorable next year. Start with molasses, right now, the current trading is about 30% to 35% lower than last year. They start the trading already. In terms of malt, Dr. Pisanu will comment later on. But on NAB, there are 2 big cost of goods ingredients, which is packaging. We bought a resin, which is main for the packaging at about 60% price of last year, which means that we will have a very favorable cost in terms of resin. And this year, in Thailand, the sugar business -- the sugar is very good. That's why it's quite a lot of product sugar produced. So we expect the sugar price to come down. So all these 3 category, we believe to have a very favorable sort of cost of good, okay? That's the overall. In terms of malt, Dr. Pisanu, will give you more color.
Pisanu Vichiensanth: I think I can give you the short answer. The price of the malt declined heavily last year. And for next year, the price of the malt is still declining another 2 digits. So you can be rest assured that the cost of goods sold is going to be good. And the other part of the raw material is about the broken rice. The price come down more than 20%, another 20% further down from last year. So Khun Ueychai, kindly explained it to you. The rest, aluminum, carton, corrugated paper, labels are coming down in price. And I think the cost of goods sold is going to be good for next year. I mean, overall, for -- in the future, the market is very challenged for us, but we are lucky to have a very favorable cost of goods. So we should be able to really sort of protect our profitability this coming year.
Operator: Our next question is from Hussaini Saifee from Maybank.
Hussaini Saifee: Just a couple of questions. First is that maybe if you can help me with your expectations for broad level expectations on the growth side and margins outlook for various businesses in FY '26? And the second question is also at the macro level, how does the -- how do you see the impact of high and regional macro environment on the demand outlook? And what steps are being taken to mitigate the overall consumer softness?
Namfon Aungsutornrungsi: Saifee, can I recap your question? The first one, you asked about the growth outlook and the margin improvement in 2026. Is it right?
Hussaini Saifee: Yes, that's correct.
Namfon Aungsutornrungsi: Yes. For that first question, I think we cannot give you in terms of the forward-looking for -- in terms of the growth as well as the margin for next year. Normally, we don't give the forward-looking. Sorry about that. For the second question, you asked about demand and customer sentiment in the region as well as Thailand. Is it the question that you asked?
Hussaini Saifee: Yes. That's right. That's correct.
Ueychai Tantha-Obhas: Well, this coming year, the sentiment -- okay, we have to -- for Thailand, the government has tried so hard to really sort of promote the economy. I mean, like you probably heard about the half-half has worked very well for our products, all categories. And then we believe we heard the government that they will have a Phase 2 in January. That's also plus for us. It's probably positive for the consumer sentiment. They also try to promote local tourism by offer 50% of the cost, you can claim and all that. All that are positive because the government is trying hard to really push the economy for next year for this. So we believe that we will gain traction from those also. And next year, in Thailand, as I mentioned before, there will be elections. In the past history, every time we have election, the consumption of beverage alcohol is increasing during the elections. That also another plus for our alcoholic beverage in Thailand. So in conclusion, in Thailand, we believe that it will be a bit favorable, better than the current or last year.
Operator: Our next question is from Xuan Tan from Goldman Sachs.
Xuan Tan: Can I check on net gearing? Could you explain why the net gearing increased year-on-year? What is the CapEx plans and whether there's room to raise dividend payout ratio?
Kosit Suksingha: Tan, Kosit speaking. I think for the net gearing increasing, actually, the -- if you look at the interest-bearing debt by itself, actually, we -- as an absolute amount, we are lower. However, when we look at the gearing or some of the debt to EBITDA because of this year, some of the impact on EBITDA. So that's why the ratio looks to be high. Regarding to the CapEx, right, as we already informed during the -- even the last month on press conference, the majority of the investment in Malaysia and Cambodia is almost spending in terms of the operating. So we not expect the same level that will happen in 2026. So that's why I think we think it will be going back to the normal level probably mid of next year.
Xuan Tan: And how about dividend payout ratio? Any room to increase?
Prapakon Thongtheppairot: This is Prapakon. I think we'll maintain that our dividend will be at least half of the profit we made, and we maintain that. And subject to our cash flow availability, I think we maintain our dividend per share this year and although despite our earnings a bit softened. So in a way, the payout have increased slightly.
Xuan Tan: Second question, can I clarify on NAB business? First is why is minority interest so high relative to the reported net profit? And second, dairies volumes seem to have been restated. Is that the case? And what was the reason behind this?
Kosit Suksingha: Maybe I yes. I think the -- so the interest expense in the NAB segment because you know that actually, we have the CapEx investment on the cow farm AgriValley in F&N, then we fully consolidation of F&N the whole group into the ThaiBev consolidation. So part of the interest expense during the CapEx investment in the Malaysia also include in the ThaiBev this year fully. So that's why when we see the year-on-year, the ramp-up of the CapEx and interest in Malaysia will happen year-on-year increase this year. Can I get the questions again on your dairy? Are you asking about the volume of dairy?
Xuan Tan: Yes. The first half, I think dairy volume was about 300 over and then full year, we are still at 300. So I assume there was a restatement or what changed for dairies volume?
Kosit Suksingha: Sorry, Kosit, again. So I think actually, when the first half is -- when we look at the details, as we released the half year review, right, we probably will not like go into a deep dive in terms of how we categorize the dairy and nondairy. So then when we audit the full year, we try to reshuffle in the more comparable. The dairy right now, we focus on the key brand that like Carnation, Teapot and Magnolia. So that is both justify the dairy. Some part of that one like nutrisoy or other soy milk, we classify to be the soft drink. So that's why this dairy will be comparison wise to wise in terms of year-on-year on the key dairy product of the group.
Xuan Tan: Okay. Sorry. So the volume, which other segment did it go to?
Namfon Aungsutornrungsi: Sorry, Xuan, can you repeat your question, sorry?
Xuan Tan: Yes. So there was a restatement, right, in terms of where the certain volumes are.
Unknown Executive: Correct.
Namfon Aungsutornrungsi: Yes, yes. It's reticulaize.
Xuan Tan: Okay. Okay. Got it. Lastly, just a comment. I guess we have seen companies listed in both Thailand and Singapore giving forward-looking statements. So it will be really helpful if you can reconsider that for future earnings.
Operator: [Operator Instructions] As there are no further questions, we will now begin the closing comments. Please go ahead, Ms. Namfon Aungsutornrungsi.
Namfon Aungsutornrungsi: Thank you, everyone, for joining our conference call tonight. And if you have any more questions, please contact IR at ir@thaibev.com. Thank you, and have a good night.
