Fraser & Neave Holdings Bhd Annual Report 2021

PERFORMANCE REVIEW Contributions from diversified products and geographical presence were key to the Group’s resilient performance for the year, while prudent cost management partially mitigated higher input costs. Strong brand performance, especially in Dairies, together with double- digit growth in Exports and maiden contribution from our new Halal Packaged Food pillar, enabled us to produce a commendable financial scorecard. Group revenue grew by 3.6 per cent from RM3.99 billion in FY2020 to RM4.13 billion despite the tough environment. However, increasing costs attributed to commodity and freight, restructuring and COVID-related expenses, and a lower share of profit from an associate – were reflected in our bottom line. Excluding one- off/non-operating items in both years, including RM20.9 million restructuring expenses this year and RM7.8 million gain on the disposal of “TEAPOT” brand last year, Group profit before tax declined by 3.9 per cent to RM479.4 million. Meanwhile, Group net profit declined 3.7 per cent from RM410.1 million in FY2020 to RM395.1 million, partially mitigated by investment tax incentives at F&B Thailand and deferred tax assets recognised for F&B Malaysia. Concerted e$orts to create value for our customers and consumers contributed to F&NHB maintaining our market leadership in core categories. 100PLUS remains the undisputed No. 1 Isotonic drink in Malaysia. We are also leaders in the Tea segment of the Asian Drinks category, Sweetened Condensed Milk and Evaporated Milk categories; while in Thailand, we have captured the Sweetened and Evaporated Milk categories; and in Cambodia and Laos, TEAPOT is the No. 1 Condensed Milk brand. FOOD & BEVERAGES MALAYSIA Higher sales captured in the first nine months of the financial year by Food & Beverages Malaysia (F&B Malaysia) helped cushion the dip in the fourth quarter due to the nationwide lockdown in July/August 2021. Aided by higher exports, sustained demand in the Dairies segment and contribution from Food business, F&B Malaysia grew its revenue by 4.4 per cent to RM2.13 billion from RM2.04 billion in 2020. However, operating profit declined to RM97.7 million from RM144.9 million in FY2020 due to higher input costs and restructuring expenses. Cognisant of the economic constraints on households spending, there was also a delay and phasing of price increase for dairy products in Malaysia. Excluding restructuring expenses and one-o$/non-operating items in both years, operating profit for F&B Malaysia declined by 15.0 per cent. 036 CHI EF EXECUT IVE OFF ICER’S STATEMENT