Good evening, everyone, and thank you for joining the Thai Beverage first half 2022 results call. All participants have been placed in a listen mode, listen-only mode. Later, we will conduct a question and answer session, and instructions will be given at that time. I will now hand over the call to the presenters, Ms. Namfon Aungsutornrungsi, ThaiBev's Head of Investor Relations, and the members of ThaiBev senior management team. Please go ahead. Good evening, ladies and gentlemen. Welcome to Thai Beverage, the first half 2022 ended the thirty-first of March 2022 financial results conference call. I am Namfon Aungsutornrungsi, Head of Investor Relations. For the conference call tonight, I will start with a summary of the first half 2022 results, then we will open the line for Q&A session with our management team. For the summary of the first half financial results, total sales revenue of the company for the six months ended the thirty-first of March 2022 was THB 142,942 million, an increase of 8.9% when compared to last year. This was due to an increase in sales revenue of our business segment. Net profit was THB 18,365 million, increased 14.2% compared to last year. This was due to an increase in net profit of beer, non-alcoholic beverage business, food business, and associated companies, which is partly offset by a slight decrease in net profit of spirits business. ThaiBev's board of directors agreed to propose an interim dividend payment of THB 3,768 million, or 0.15 THB per share, the same as last year. The company remains committed with our full year dividend policy of not less than 50% of net profit after deducting of our specified reserve, subject to our investment plans and as the board of directors deem appropriate. In the first half 2022, the company's spirits business generated sales revenue of THB 65,186 million, a 2.1% increase compared to last year. Sales volume increased 6.4% year-on-year. The spirits business reported net profit of THB 12,816 million, a slight decrease of 0.4% year-on-year due to an increase in cost of goods sold. The company's beer business recorded sales revenue amounting to THB 61,939 million in the first half, a 14.7% increase compared to the previous year. Thanks to the measures to contain COVID-19 have been relaxed, total sales volume increased 5.5% year-on-year when including Sabeco sales, and increased 2.8% year-on-year when excluding Sabeco sales. The company's net profit for the beer business show a satisfactory increase by 62.2% year-on-year to THB 1,377 million. The company's non-alcoholic beverage business generated sales revenue of THB 8,204 million, an 8.1% increase year-on-year. Total sales volume rose 7.5% year-on-year, mainly due to the increase in sales volume for our drinking water and ready-to-drink tea, partially offset by a decrease in carbonated soft drink sales volume. Net profit for the non-alcoholic beverage business rose 31.5% to THB 438 million. The company's food business recorded sales revenue of THB 7,688 million in the first half, a 30.6% increase year-on-year following the resumption of dine-in services. Net profit increased significantly by 261.5% year-on-year to THB 272 million. This was mainly due to an increase in sales, as well as managing distribution costs and administrative expenses prudently. The company's international business recorded sales revenue of THB 36,867 million in the first half 2022, a 24% increase year-on-year. The increase was mainly due to a 29% increase in beer sales as a result of the relaxation of COVID-19 restriction in Vietnam and a growth from Chang Soda sales in China. The international spirits business reported sales revenue growth of 3% driven by Myanmar market. That is the summary of the first half 2022 results. Before we start the Q&A section, I would like to note that for regulatory reasons, management will not answering any question respect of the proposed spin-off of BeerCo Limited. Instead, please refer to ThaiBev's announcement on the fifth of May 2022. The announcement included certain information about the BeerCo Group that allow ThaiBev shareholders to better understand the scope of the proposed spin-off and the listing of BeerCo. Certain information about the BeerCo Group is also included in today's presentation materials for purposes of updating the information previously provided about the BeerCo. However, in this conference call, management will only speak about the ThaiBev beer segment, which is different from the BeerCo Group. Management may not respond to questions relating to the BeerCo Group for regulatory reasons. We will now open the call to any questions on our results. Operator, please help open the line for Q&A. We will now begin the question and answer session. Participants with questions to pose, please press zero one on your telephone keypad and you will be placed in the queue. To cancel the queue, please press zero two. We have got the first question from Selviana Aripin, HSBC. Please go ahead. Sure. Thank you very much, management, for the opportunity. Thank you as well for the presentation. My question is with regards to the spirits business. It seems that as the economy reopens in second Q this time, it appears that sales growth momentum is slowing down. Can management talks about what to expect in terms of outlook going ahead in terms of spirits business? Should we expect further slowdown in the spirits business? That's my first question. My second question is with regards to, you know, the performance of brown versus white spirits. Can management make some comments around that? Thank you. Yeah. In terms of the six months of spirit volumes reported, it's actually one of the highest since we listed. Actually the momentum is doing, our sales are doing well. In terms of profit that we actually have a flat profit compared to the same period before, because we have been experiencing some cost push from raw material that basically pressured us to have some price adjustment that happened in this first half of the year. We have completed the price adjustment in the white spirit space that should allow us to maintain our profitability. Due to price adjustment in the first six months, meaning the first half, there are some additional loading and increasing in sales in white spirit. The products mix have shifted to be more white spirit as a percentage than brown spirit because of the price increase in white spirit that causing the trade to stock up, and therefore, reducing the weighted, more like a weighted gross profit margins of the group in the first half. The first half have experienced some lack or leakage in brown spirit sale. I think this is happening throughout the industry, including beer industry as a whole. Brown spirit are experiencing some decline because in the first half the country experienced a lot of COVID infections, so social distance have been restricted. We are expecting, however, the second half, the brown spirit consumption will pick up because of the opening of the trades, opening and returning of the tourists. As we've seen in the news the past few days, the operators, meaning the pub and bars associations of the operators are requesting the government to allow them to open. They've been closed for, I think more than a year, close to a year. I think that with that opening, it will allow social gatherings and allow for a better brown spirit sale in the second half. Got it. Thank you very much. Thank you. Our next question is from Thitithat Nopaket from Kiatnakin Phatra Financial Group. Please go ahead. Hi. Can you hear me? Hello? Yes, we can hear you. Can you hear me? Yes. Hi. I have two questions. Number one, if you look at the sales in baht terms in the past six months, beer seems to be doing better than spirits, for both in Thailand and in Vietnam. Spirit is not doing that badly, but then it, you know, it's still negative by a low single-digit margin. You know, usually between beer and spirits is more resilient than beer. Why has beer performed better than spirit in the past six months? That's the first question. Second question, can you update us on the raw material situation on molasses? How the price inflation for the freight rate, for the gas, for the oil, affect your gross margin going forward? Thank you. Please go ahead to answer. Thank you. Thitithat, when beer better than spirit, then you ask question. When spirit better than beer, then you ask question again. Anyway, the thing is because beer, we have the Vietnam market also. Thitithat, Vietnam market, markets open before Thailand, and then the growth in Vietnam is quite significant this second quarter. Spirit, majority is in Thailand, and the opening of the market is slower. As you can see that the pub and bars and thing do not open up to today, okay? They probably will consider opening very soon because it's a lot of pressure from the operator to the government. That's hope. Hope next quarter we grow at the same percentage. Thank you. Mr. Prapakon. I'll answer about the molasses cost. Actually, Right. Because this is related only to Thailand 'cause our raw material, which is molasses for spirit and molasses are linked to sugarcane, sugar refinery. Those are the crops, and those are industry data that you can see that this crop, I think the sugar industry, the crop for this year is much better than last year. Last year was one of the probably worst year of sugar crops in Thailand. This year the sugar crop have increased by almost like more than 40, 50, almost 40% than the year before. Which mean the molasses that we purchase from this crop their prices are lower than the year before. The raw material cost in terms of that coming through into a cost of goods that you see in the first half year is actually relating to the molasses from last crop, not this crop. This crop that we bought in actually is still in the work in process and finished goods ready to be sold. Because of this is the fact that there are more molasses in the industry, so our molasses costs are lower currently than the year before. Hopefully that's answered the molasses expectation. Because of the industry also, the sugar industry also guarantee the price for the farmer in the next few years, so the sugar industry are expecting that there will be more sugarcane crop in a year for the next few years as well. We are expecting that next year, that's what the industry are expecting, that there will be more molasses and therefore price will come under pressure on the lower side. Right. Right. Speaking. You ask about the malt. I can inform you know, briefly about that. We are lucky in the way that we have the carry over, you know, stock, you know, from the last years. So I think we are lucky. I want to give you another information is that we never rely on, you know, the barley. Another way we call it malt from Ukraine and Russia. We don't have the sources over there. Okay, thank you. Just thank you very much. Just one follow-up question. I try to separate the beer sales in volume term in the first half of the year between Vietnam and Thailand. I'd just like to confirm that my calculation is correct. According to my calculation, beer sales volume increased in both markets. In Thailand by about 3% year-on-year, and in Vietnam it's about 7% year-on-year. If you can confirm that my calculation is accurate. It increased for both markets. When we report, we report the sales volume including Sabeco and excluding Sabeco. You can work on the increased amount from those and those numbers that we report. Right. Okay. Thank you very much. That's all the question I have. Thank you. Thank you. Our next question is from Nicholas Tay, Credit Suisse. Please go ahead. Hi. Just had a couple of questions. Maybe just wanna follow up on the raw materials. For the malt stocks, just wanted to ask how long that would last. And in terms of the molasses, did you mention that because of the, I guess, the higher volume or the higher crop this year, that the price is lower than it was in even 2021 or even 2020? And then just want to understand in terms of the price guarantee. So if the price comes down, basically you as Thai Beverage get to buy the cheaper price and then the government pays the farmers the difference between the net price and the guaranteed price? That's all. Thanks. Hi, Nicholas. In terms of the forward-looking for the malt price, sorry that we cannot give you the guidance on those. For molasses, kun Pakorn will help you to explain to you. Hi, Nicholas. I think from molasses, let me just clarify. What we're referring to, sorry, the sugar refinery industry are guarantee the purchase price for raw sugar, like raw sugarcane from the farmer for the next three years. Which mean it give the farmer a comfort level that they will have a good fixed price going out. That's why the farmer will be willing to keep growing or keeping the sugarcane, because the sugarcane in Thailand is a crop that switch between sugarcane and tapioca and all those. There are three crops. You can switch between corn, sugar and tapioca. Normally it take about three years for the farmer to recover those. Whatever the government, if the sugar refinery, sugar industry are giving some guarantee price, there will be more farmers, more number of farmers are convinced to stay in the sugar by growing sugar instead of switching to corn and tapioca. That's what I meant. Therefore, giving that outlook, we are expecting there will be more sugar in the next crop. The crop of sugar in Thailand starts in December and ends around April of this year of each year. That's why we are in May. That's why we can say that as of end of April, this last month, the sugar, this crop has provided more sugar and more sugarcane and more molasses than the year before. Because the year before was a really low year, okay? From what I said about the price guarantee for the farmer, which mean there will be more sugar and therefore by definition molasses is sugar by-products, there will be more molasses as well. Therefore, price of molasses should be kept low or lower than this year. Okay, thank you. On the malt, I wasn't asking in terms of the forecast. I was just asking if I heard correctly, you said you had. You still had some stocks. I just want to understand how much, how long do those stocks last? Hi, Nicholas. We also cannot tell you how long that we buy forward, because that one it will you will know how long we have it forward. That is something that we cannot provide. Sorry. Okay, that's fine. Thank you. Thank you. Thank you. The question and answer session is still open. If you would like to ask a question, please press zero one on your telephone keypad now. The Q&A session is still open. If you would like to ask a question, please press zero one on your telephone keypad now. We have got one from Lethan Tan, UOB Kay Hian. Please go ahead. Hi. Thanks for answering. I just have one question. Seeing that there's still some pressure in costs and due to inflation and whatsoever. Sorry. I just wanna ask whether there will be any future price adjustments for, let's say, beer or canned spirits. Because I understand that there's already price adjustments for the white spirit. Basically, I'm just trying to ask if there is any price adjustments for beer and maybe brown spirits. Hi, Lethan. You, what you ask, what your question is about future price increase. Is it right? Is it for future price in- More or less. Yeah, more. If it's for future price increase, this is something we normally don't disclose. Oh, okay. It's okay. Sure. Thank you. Bennett here from Vietnam. Just to reiterate that we have already increased price December last year, so I think we have also increased in December this year. April this year. So we already made the price adjustment already. Okay. Thank you. Thank you. Our next question is Horng Han Low from CLSA. Please go ahead. Hi. Thank you so much for giving me the chance to ask questions. I would like to know a little bit more in terms of A&P spending. Given that the economy in Thailand has already begun to reopen, you are also expecting tourists to return back to Thailand. Can we try to understand in terms of A&P spend, how do you see this trend as a percentage of sales tracking over the next few more quarters or next one or two years? Some clarity on this would be appreciated. Thank you. Hi, Horng Han. Did you hear? Hello? Did you hear it clear from Vietnam side? No, sorry. I thought I heard a repeat of myself. My apologies. Hello? Hello? Bennett, can you? Hi. Hi, hi. Hello. Give me a second. Let me just, Sure. Reach out to the speakers. Sure. Sure. Thank you. Hi, Bennett. Are you there? Namfon Aungsutornrungsi, would you like to say a few words? Difficult to answer. Of course, if the economy pick up and situation allow, then we would consider sort of increasing A&P just to make sure that we maintain our brand equities. And all that, it's difficult to answer because for example right now, Thailand, the pubs and bar not open, and then the government still have some regulations, so we don't know when will they totally open. If the economy is quickly coming back, and then situation is better, of course, as a brand company, we need to put money behind the brand. I mean, that's my general answer for both any market. Sure. Thank you. Can I follow up with regards to pricing? I understand that there was an earlier question with regards to Thailand and whether or you'd be considering price increase. Maybe we could shift gear a little bit and look at some of your competitors. Can we try to understand if competitors are raising prices so far this year? Because I understand that you did raise price once sometime in March. My question is particularly for beer, specifically for BSIF, which I think you raised in March. Just want to know whether any of your peers has raised prices as well. Thank you. Hello. Hi. This is Lester here. I think in Hi. Hello, yeah. Yeah, with regard to price increases, we always try to monitor the market situation as well as our internal situation and with regard to pricing, with our, sorry, our material pricing. This time around, yes, we did increase our prices in March, and there were some competitive movements around the same period as well. Okay. Got it. Seems to be something that concerns the industry altogether as well. Thank you. The Q&A session is still open. If you would like to ask a question, please press zero one on your telephone keypad now. The Q&A session is still open. If you would like to ask a question, please press zero one on your telephone keypad now. We have got Paul Chew from Phillip Securities. Please go ahead, sir. Thanks so much. Just two questions on the spirits business. I just wanted to confirm, the second quarter volumes was up 4%, revenue was I think flattish. Can I just confirm that this is just because of the product mix, this higher contribution of white spirits? That's my first question. The second question again on spirit. Could you give us the which month did you increase the price for white spirits? Yeah. Thanks so much. Yeah. Yeah. On the score, it is a product mix in the second quarter. The more white spirit sale actually very high, double digits and we do have a lower brown spirit sale compared to the same quarter before. That's the product mix. That's why it contribute to a slightly lower profit while the sale is higher. The price increase for our white spirit, we actually increased half the volumes, well, the large bottle was increased back in November and the small bottle was increased in February. We split it's actually split it off in two quarters. Okay. Okay. That's it for me. Thanks so much. Thank you. We have got a follow-up question from Nicholas Tay, Credit Suisse. Please go ahead. Hi. Thanks for taking my question. Just a quick one. In terms of the price increase that you've done this year already, can I just check how much it was for beer and for spirits? Hi. Hi, Nicholas. This is Lester here. For beer, we raised prices differently across the portfolio, but generally they were in the low single digits. For Vietnam, we do increase price and higher than Thailand, that's all I can say. We don't normally reveal the numbers. Nicholas, for white spirits, the price increase is roughly around 4%-6%, so that depend on the unit size, the SKU that we increase. But only on the white, but we did not increase brown spirit. The last time we increased brown spirit, brown spirit price was at the beginning of the COVID, which is considered to be the first and the second quarter of 2020 fiscal year. About 2 years ago. Okay. Got it. That's 4%-6% for white spirits, right? 4-6. Okay. Got it. Thank you. Thank you. Our Q&A session is still open. Please press zero one on your telephone keypad if you have questions to pose. The Q&A session is still open. If you would like to ask a question, please press zero one on your telephone keypad now. I see no further questions. I will hand over to Miss Namfon Aungsutornrungsi. Please go ahead, ma'am. Thank you for joining Thai Beverage conference call tonight. If you have more questions, please feel free to contact IR department at ir@thaibev.com. Thank you and have a good night.