Company Presentation November 2016 Important Notice The information in this presentation has been prepared solely by Vietnam Dairy Product Joint Stock Company (“Vinamilk”) and has not been independently verified, and no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein or as to the reasonableness of any assumptions herein or the grounds on which they are based The information set out herein may be subject to updating, revision, verification and amendment and such information may change materially Vinamilk is under no obligation to update or keep current the information contained in this presentation and any opinions expressed herein are subject to change without notice None of Vinamilk or any of its advisers or representatives, or any of their respective affiliates, shall have any liability whatsoever (in negligence or otherwise) for any loss whatsoever arising in connection with this presentation or any oral information provided in connection herewith This presentation is for information purposes only Nothing in this presentation constitutes an offer to sell or the solicitation of offers or bids to acquire any securities of Vinamilk In particular, this presentation is not an offer of securities for sale in the United States and is not for publication or distribution in the United States (within the meaning of Regulation S under the United States Securities Act of 1933, as amended) Attending this presentation in certain jurisdictions may be restricted by law No action has been taken by Vinamilk or any of its advisors or representatives that would permit the possession or distribution of this presentation in any jurisdiction where action for that purpose is required Persons attending this presentation are required to inform themselves about and to observe any such restrictions Certain statements in this presentation constitute "forward-looking statements" These statements, which contain the words "anticipate", "believe", "intend", "estimate", "expect" and words of similar meaning, reflect Vinamilk’s beliefs and expectations and are subject to risks and uncertainties that may cause actual results to differ materially These risks and uncertainties include, among other factors, changing business or other market conditions and the prospects for growth anticipated by the management of Vinamilk These and other factors could adversely affect the outcome and financial effects of the plans and events described herein As a result, you are cautioned not to place undue reliance on such forward-looking statements The management of Vinamilk disclaims any obligation to update its view of such risks and uncertainties or to publicly announce the result of any revisions to the forward-looking statements made herein, except where it would be required to so under applicable law Moreover, certain information in this presentation (including expectations and forecasts) relating to the Vietnamese dairy industry and other industry and economic data has been sourced from third party sources that Vinamilk believes are reliable; however, Vinamilk, its advisors and representatives and their respective affiliates cannot ensure you that such information third party information has been prepared on a reasonable basis or is otherwise fair, accurate, complete or correct Người trình bày Mai Kieu Lien Member of BOM and CEO Le Thanh Liem Executive Director - Finance and Chief Accountant Le Quang Thanh Truc Company Secretariat, Director of Foreign Subsidiaries Management Tran Chi Son Senior Finance Manager Table of Content Introduction Key Investment Highlights Financial Review Section – Introduction Vinamilk at a Glance Extensive Product Offering Across Multiple Categories Liquid Milk Yogurt Condensed Milk Powdered Milk Soymilk Cheese Ice Cream Beverages Net Revenue by Channel Net Revenue by Region FY15 (%) FY15 (%) Modern Trade & Others 13% Overseas 20% US$ US$ 1.8Bn 1.8Bn General Trade 87% Source Company Filings Domestic 80% Source Company Filings Vinamilk by the Numbers 40-year Heritage of Dairy in Vietnam 215,000 Points of Sale Diverse Product Portfolio with More than 200 SKUs 21% Net Revenue CAGR and 17% Net Income CAGR over Largest Consumer & Retail Company in Vietnam ~US$1.8Bn in FY15 Net Revenue(1) ~US$500MM in FY15 EBITDA(1)(2) 25% Margin last years Notes Exchange rate of VND22,260 per US$1.00 as of 14 October 2016 EBITDA = Net Revenue – COGS – SG&A + Depreciation & Amortization Vietnam – One the Most Attractive Markets in ASEAN One of the Fastest-Growing Economies Globally Large and Young Consumer Base of 93MM People 2015 Total Population (MM) 2015-20E Nominal GDP CAGR 9.4 9.4 8.7 Median Age 7.8 38 27 1,368 1,281 38 28 31 39 47 24 30 322 258 208 144 127 101 93 #4 #5 #9 #10 #12 #14 6.0 4.9 4.5 4.5 World #1 Ranking Global Insight Source Source #2 #3 Industry Data Significant Potential in GDP per Capita Emerging Middle Class with Rising Income Levels 2015 Real GDP per Capita (US$) 2015 Disposable Income per Capita (US$) ~27x 56,083 2,167 52,888 1,421 776 9,555 8,048 5,813 3,346 2,904 2,070 2010 Source Industry Data Source 2015 2020E Industry Data Section – Key Investment Highlights Key Investment Highlights Vinamilk – Vietnam’s Domestic Champion with a 40-Year Brand Heritage Strong Leadership Across Diversified Product Categories Extensive Nationwide Distribution Network Vertically Integrated Business Model Supported By Modern Production Facilities, Innovation Capability and Long-Term Supplier Relationships Highly Visible Growth Trajectory Driven Increasing Volumes, Enhanced Premiumization and Operational Efficiency Proven Historical Track Record of Financial Performance Highly Experienced Management Team 10 Highly Visible Growth Trajectory Continue to Drive the Volume Growth Over and Above the Market Growth Best-in-class marketing, sales, and R&D capabilities drive sales growth Marketing Team • Analyses consumer preferences and • trends Conduct consumer research with market research companies Sales Team • Understands consumer preferences through constant contact at various outlets Optimize the Product Mix to Drive Premiumization Targeting the growing upper-middle income class Vinamilk Twin Cows Premium quality milk manufactured and imported from New Zealand Vinamilk Organic First organic milk in Vietnam, manufactured in accordance with international standards Product R&D Team Optimum Gold • Improves product quality and expands 20% increase in DHA derived from pure microalgae, combined with Lutein product portfolio 19 Highly Visible Growth Trajectory (Cont’d) Selectively Expand Overseas Market Potential export markets in Africa and especially high-end markets like Japan, Canada Continued Improvement in Operational Efficiency to Drive Margins Explore Selective Inorganic Growth Opportunities Past acquisitions have proven effective in expanding Vinamilk’s international operational footprint Gross Margin (%) 40.6% 36.1% 34.2% 32.8% Vietnam 32.5% 30.5% Current Markets Potential Markets 2010 2011 2012 2013 2014 2015 20 Proven Historical Track Record of Financial Performance Strong 20%+ Revenue Growth over the L5Y Net Revenue (US$MM)(1) 708 Growth Source 972 1,193 1,390 1,576 1,801 2010 2011 2012 2013 2014 2015 48.4% 37.3% 22.8% 16.5% 13.3% 14.3% Company Filings Robust Operating Leverage Translating in Consistently Attractive EBITDA Margins EBITDA Margin (%) 26.1% 25.4% 24.6% 23.1% 22.7% 21.9% 2010 Source 2011 2012 2013 2014 2015 Company Filings Notes Exchange rate of VND22,260 per US$1.00 as of 14 October 2016 21 Highly Experienced Management Team 40 Mrs Mai Kieu Lien Mr Mai Hoai Anh Chief Executive Officer and Board Member Chief Operating Officer and Executive Director – Sales • • • • • Bachelor/Engineer in Meat and Milk Processing Certificate of Leningrad Economic Management Certificate of Government Management 20 Mr Trinh Quoc Dung Mrs Nguyen Thi Thanh Hoa Executive Director - Dairy Development Executive Director – Production and R&D • • Engineer of Energy and Automation 11 Bachelor in Milk Processing Technology 33 Mrs Bui Thi Huong Mr Nguyen Quoc Khanh Executive Director - Human Resources Administration & PR Executive Director – Research & Development • • • • • Bachelor in Russian language Bachelor in Economics 11 Bachelor in Chemical Technique and Foods Bachelor in Business Administration Bachelor in English 28 Mr Le Thanh Liem Mrs Ngo Thi Thu Trang Acting Executive Director - Finance anh Chief Accountant Executive Director – Project • 22 Bachelor in Economics MBA • Bachelor in Economics, major in Enterprise Financial Accounting Master of International Commerce and Finance • • Bachelor in Finance - Accounting MBA 31 Mr Phan Minh Tien Mr Tran Minh Van Executive Director - Marketing Executive Director - Production • • • • • Bachelor in Business Management Institute Years of Experience with Vinamilk 35 Bachelor in Engineering Bachelor in Business Administration Bachelor of Law with major in commercial laws MBA 22 Section – Financial Review Robust Sales Growth through the Cycle Attractive Sales Growth with Strength in Volumes Net Revenue(1) (US$MM)(2) CAGR 1,801 1,576 1,390 1,193 708 74 633 972 125 847 356 36.7% 17.9% 255 198 167 1,026 1,192 1,320 1,445 2010 2011 2012 2013 2014 2015 11% 13% 14% 14% 16% 20% % Domestic 89% 87% 86% 86% 84% 80% % Export Domestic Source Export Company Filings Notes Net Revenue = Total Revenue – Revenue Deductions (Sale Discounts, Sale Returns, Sales Allowances) Exchange rate of VND22,260 per US$1.00 as of 14 October 2016 24 Strong Operating Leverage Driving Superior Margins Strong Operating Leverage Driving Superior Margins Robust EBITDA Margin Consistently above 20% EBITDA(1) Margin (%) 26.1% 25.4% 24.6% 23.1% 22.7% 21.9% 2010 Source 2011 2012 2013 2014 2015 Company Filings Notes EBITDA = Net Revenue – COGS – SG&A + Depreciation & Amortization 25 Prudent Working CapitalCapital Management Prudent Working Management Average Inventory Days Increased to 56 in 2015 Average Receivable Days Decreased to 19 in 2015 Inventory Days(1) Receivable Days(2) 63 68 70 62 52 56 15 13 2010 Source 2011 2012 2013 2014 2015 Company Filings 2010 Source 2011 17 2012 19 2013 20 19 2014 2015 Company Filings Average Payable Days Increased to 31 in 2015 Stable Cash Conversion Cycle Stable at ~40 in the L5Y Payable Days(1) Cash Conversion Cycle (Days) 43 32 2010 Source 35 2011 Company Filings 2012 39 2013 30 31 2014 2015 47 44 41 43 44 2011 2012 2013 2014 2015 44 2010 Source Company Filings Notes Inventory turnover days and trade payable days assuming average of beginning and ending balances divided by cost of goods sold and multiplied by 365 Trade receivable days calculated assuming average of beginning and ending balances divided by net revenue and multiplied by 365 26 Strong Balance Sheet and Attractive Dividend Payout Ratio Conservative Capital Structure Consistent Improvement in Dividend Payout Selected Balance Sheet Items, US$MM(1) Dividend Payout Ratio (%) 30/06/2016 82.4 Gross Debt ST Debts and Current Portion of LT Debts LT Debts Total Gross Debt Less: Cash and Cash Equivalents(2) 56 56 Net Debt (463) Total Equity 1,003 Total Debt / Total Equity LTM EBITDA(2) Total Debt / LTM EBITDA 61.2 (519) 5.6% 43.9 60.4 44.9 503 0.1x 29.3 2010 Source Company Filings Notes Exchange rate of VND22,260 per US$1.00 as of 14 October 2016 Includes cash and cash equivalents and short-term financial investments EBITDA = Net Revenue – COGS – SG&A + Depreciation & Amortization Source 2011 2012 2013 2014 2015 Company Filings 27 Improved Capital Intensity over Time over Improved Capital Intensity Time Capex as % of Net Revenue Remained Low at 2.7% in 2015 Capex (US$MM)(1) and Capex as % of Total Revenue (%) 11.8% 9.1% 8.2% 4.8% 141 64 79 2.4% 67 39 2010 2011 2012 Capex Source 2.7% 2013 2014 48 2015 Capex as % of Total Revenue Company Filings Notes Exchange rate of VND22,260 per US$1.00 as of 14 October 2016 28 Q&A Appendix Financial Summary Financial Summary Income Statement Summary FYE 31 December, (US$MM)(1) 2010 Net Revenue % Growth Source 2015 LTM(4) 1,390 1,576 1,801 48.4% 37.3% 22.8% 16.5% 13.3% 14.3% 232 296 408 502 512 731 824 32.8% 30.5% 34.2% 36.1% 32.5% 40.6% 42.4% 163 213 303 363 357 443 503 23.1% 21.9% 25.4% 26.1% 22.7% 24.6% 25.9% 150 194 279 328 311 394 454 21.2% 20.0% 23.4% 23.6% 19.7% 21.9% 23.4% 162 189 261 294 273 349 402 23.0% 19.5% 21.9% 21.1% 17.3% 19.4% 20.7% Net Income to Company Net Margin 2014 1,193 EBIT(3) EBIT Margin 2013 972 EBITDA(2) EBITDA Margin 2012 708 Gross Profit Gross Margin 2011 1,941 Company Filings Notes Exchange rate of VND22,260 per US$1.00 as of 14 October 2016 EBITDA = Net Revenue – COGS – SG&A + Depreciation & Amortization EBIT = Net Revenue – COGS – SG&A Last 12 months up to 30 June 2016 31 Financial Summary (Cont’d)(Cont’d) Financial Summary Balance Sheet Summary As of 31 December Unless Stated Otherwise, (US$MM)(1) 2010 Cash and Cash Equivalent(2) 2011 2012 2013 2014 2015 30/06/2016 106 175 232 311 404 450 519 26 51 57 85 89 99 112 Inventories(4) 106 147 156 145 160 171 181 Others 293 227 286 356 446 482 546 425 425 499 585 694 752 839 PP&E(5) 146 215 350 377 379 388 273 Others (88) 60 36 66 84 95 170 59 275 386 443 463 483 443 484 700 885 1,028 1,158 1,234 1,282 Accounts Receivable(3) Current Assets Non-current Assets Total Assets Source Company Filings Notes Exchange rate of VND22,260 per US$1.00 as of 14 October 2016 Includes cash and cash equivalents, and short-term financial investments Includes accounts receivables from customers and allowance for doubtful debts Includes inventories and allowance for inventories Includes tangible fixed assets and long-term work in progress 32 Financial Summary (Cont’d)(Cont’d) Financial Summary Balance Sheet Summary (Cont’d) As of 31 December Unless Stated Otherwise, (US$MM)(1) 2010 2011 2012 2013 2014 2015 30/06/2016 ST Debt & Current Portion of LT Debt 26 - - 57 66 56 Accounts Payable(2) 49 82 101 88 85 99 76 Others 44 50 85 126 102 105 143 119 132 186 223 245 270 275 LT Debt - - - 16 17 - Others 7 8 7 16 23 25 Total Liabilities 126 140 189 238 268 294 280 Total Equity 358 561 696 789 889 940 1,003 Total Liabilities & Equity 484 700 885 1,028 1,158 1,234 1,282 Current Liabilities Non-current Liabilities Source Company Filings Notes Exchange rate of VND22,260 per US$1.00 as of 14 October 2016 Includes accounts payable to suppliers 33 ... CAGR 1 ,80 1 1,576 1,390 1,193 7 08 74 633 972 125 84 7 356 36.7% 17.9% 255 1 98 167 1,026 1,192 1,320 1,445 2010 2011 2012 2013 2014 2015 11% 13% 14% 14% 16% 20% % Domestic 89 % 87 % 86 % 86 % 84 % 80 % %... 2015 Total Population (MM) 2015-20E Nominal GDP CAGR 9.4 9.4 8. 7 Median Age 7 .8 38 27 1,3 68 1, 281 38 28 31 39 47 24 30 322 2 58 2 08 144 127 101 93 #4 #5 #9 #10 #12 #14 6.0 4.9 4.5 4.5 World #1... 56, 083 2,167 52 ,88 8 1,421 776 9,555 8, 0 48 5 ,81 3 3,346 2,904 2,070 2010 Source Industry Data Source 2015 2020E Industry Data Section – Key Investment Highlights Key Investment Highlights Vinamilk