Fraser & Neave Holdings Bhd Annual Report 2021

MEETING OUR CHALLENGES Challenge Keeping employees safe from Covid-19 Supply constraints Increased cost of goods due to cost of commodities & logistics Intensifying competition & price wars Along with most countries in the region, Thailand is gradually easing movement and social restrictions. Most pertinently, it is re-opening its tourism industry, which has been dormant for close to 18 months. 1 This will necessarily mean greater demand for our products by on-the-go retail outlets and the HORECA channel. As the team prepares for a pick-up in business, it will continue to focus on key elements that determine its performance, such as product innovation, distribution/logistics and customer/consumer engagement while building its export pillar. Meanwhile, the team will continue to promote the F&N e-commerce platform, “nom aroi” in Thailand and engage with its customers and consumers on various social media platforms. 1 https://www.reuters.com/world/asia-pacific/thailand-further-ease-coronavirus-restrictions-2021-09-27/ OUTLOOK Results • Maintained business continuity at all levels • Production was su!cient to meet demand • Achieved almost 100 per cent on-time performance by suppliers • Met all delivery commitments • Achieved cost and operational e!ciencies • Increased market share in the condensed milk and evaporated milk market despite overall market decline • Maintained market leadership in isotonic, sweetened condensed milk and evaporated milk segments* • The lates t variant of TEAPOT SCM Squeezable Tube – Strawberry Yogurt captured 2% of the total Thailand market shares in the SCM squeeze tube market within 8 months of launch * F&N Dairies (Thailand) Limited ranked first as a manufacturer in both value share and volume share in total Condensed Milk Market since 1 August 2016 to 30 September 2021. The Nielsen retail index report covers Supermarkets, Hypermarkets, Convenience Stores and Traditional Trades. Mitigation E#orts • Implemented all relevant measures to protect employees Read more in “Supporting COVID-19 Recovery” • Liaised closely with suppliers to meet production demand • Improved stock management • Hedging policy to smooth out the impact of any increase of raw material prices • Savings of operational costs and tighter control over expenditure • Defend our turf by ensuring we continue to delight our consumers with quality, taste, and value • Enhanced focus on innovation on products & packaging to meet customers’ expectations • Prioritised promotion activities, including thematic campaign and lucky draw, to secure sales volume and maintain brand awareness with optimal spend Management Discussion & Analysis 071 Fraser & Neave Holdings Bhd ! Annual Report 2021