Presentation As of November 21 , 2013 - listed companyjckh.listedcompany.com/misc/PRESN/20131121-HOTPOT... · 11/21/2013 · Establishment •Operated since 1995 and registered as

Hot Pot Public Company Limited Presentation

As of November 21 , 2013

Private & Confidential

1

Agenda

• Company Overview

• Business Strategies

• Future Projects

• Financial Highlights

• Q&A


2

Company Overview


3

Company Profile

Company • Hot Pot Public Company Limited (“Hot Pot” or the “Company)

Registered Capital • Common shares : THB 101.5 mm comprise of 406.0 mm shares at par value of THB 0.25 per share

Paid-up Capital • Common shares : THB 101.5 mm comprise of 406.0 mm shares at par value of THB 0.25 per share

Establishment • Operated since 1995 and registered as Hot Pot since 2004

Business• Chain restaurant operator under brand “Hot Pot” and “Daidomon” offering variety of food such

as international buffet, suki shabu, Japanese noodles , and yakiniku

Address • 350 Ram Indra Rd, Ta Rang, Bangkhen, Bangkok, 10230

Number of employee • Over 3,400 persons


4

Major Development

1995• First Suki Shabu restaurant namely “Coca Fresh Suki” was opened in Tawanoak Complex in Chachoengsao

province

2001 • Changed restaurant brand from “Coca Fresh Suki” to “Hot Pot Suki Shabu Restaurant”

2005

• Expanded international buffet restaurants in shopping malls

− First international buffet with suki and shabu restaurant in Central Rama II under name “Hot Pot Inter Buffet”

2006 • Aureos Southeast Asia Fund and Government Saving Bank Private Fund invested in the Company

2011

• Acquired business and sauce from Daidomon which has 25 outlets in total with central kitchen

• Converted into a public company and changed the Company’s name to Hot Pot Public Company Limited

• Increase its registered capital to THB 101.5 mm with paid up capital of THB 86.2 mm

2004• Established Hot Pot Company Limited on 28 January with registered capital of THB 16 mm

• Increased its registered capital to THB 56.0 mm in October

2007 • Developed food production factory and central kitchen in Prathumthani province

September 2013

• Has 143 restaurant outlets in total as of September 30, 2013 comprise of 122 outlets under Hot Pot brand (not including franchise) and 21 outlets under Daidomon brand


5

Shareholder’s Structure and Management

Board of Directors

Audit Committee

Executive Committee

Chief Executive OfficerMr. Sompon Roekwibunsi

Internal Audit

Deputy Chief Executive OfficerMs.Sakuna Baicharoen

Company Secretary

Chief Financial OfficerMr. Wisit

Wachiralappaitoon

Chief Operation OfficerMr. Sompon Roekwibunsi

Chief Administration OfficerMr.Somchai Roekwibunsi

Management Structure

Name of management Position

1 Mr. Metta CharuchindaChairman, Chairman of the Audit

Committee and Independent Director

2 Mr.Sompon Roekwibunsi Director

3 Ms.Sakuna Baicharoen Director

4 Mr. Somchai Roekwibunsi Director

5 Mr. Supakrit MekpanuwatAudit Committee and Independent

Director

6 Mr. Amornsakdi KetcharoonAudit Committee and Independent

Director

Board of Directors as of 30/09/2013

Shareholder as of 28/8/2013

52.50%

47.50%

Mr.Sompon Group Other Investors


6

Business Overview

• 122 Outlets Operate by the Company

• 1 FranchiseRights to use the Hot Pot Buffet Value trademark

Hot Pot Inter Buffet Hot Pot Buffet Value

Hot Pot Prestige Hot Pot Suki Shabu

Hot Pot Ramen Buffet

As of 30 September 2013

International Buffet Restaurant

With the concept of “All You Can Eat” that offers international buffet e.g. Chinese dim sum, Japanese noodle , sushi, shabu and western salad under Hot Pot’s 5 trademarks

Yakiniku Buffet Restaurant

Hot Pot has recently acquired Daidomon in Q4 2011

• 21 Outlets Operate by Hot Pot under Daidomon brand with buffet concept

As of 30 September 2013

http://www.hotpot.co.th/brand.php?bid=91http://www.hotpot.co.th/brand.php?bid=89http://www.hotpot.co.th/brand.php?bid=88http://www.hotpot.co.th/brand.php?bid=90http://www.hotpot.co.th/brand.php?bid=87


7

1. Hot Pot Inter Buffet

Hot Pot Inter Buffet : International buffet restaurant that offers Sukiyaki, Shabu, and over 100 menus of international dishes e.g. dim sum, fried rice, yakisoba, teppanyaki, sushi, tempura, steak, salad bar, fruit, ice-cream and dessert, as well as seasonal menus and menus for special events

• Adult THB 339 / Child 159 THB

Time limit of 1 hour and 30 minutes

• 44 outlets in leading shopping complexes which attract middle to high income earners, such as Central, The Mall, and Seacon Square

• 3 outlets of HD (Hot Pot Inter Buffet and Daidomon)

Note: Buffet price and number of outlets as of 30 September 2013


8

2. Hot Pot Buffet Value

Hot Pot Buffet Value : International buffet restaurant similar to Hot Pot Inter Buffet but Hot Pot Buffet Value positions itself in the lower market while maintaining the same quality of food and service. It has less variation of menu compared to Hot Pot Inter Buffet but emphasizes on the value by setting a lower price

• Adult THB 319 / Child THB 149

No time limit 37 outlets, Time limit of 1 hour and 30 minutes 34 outlets.

• 71 outlets in small shopping complexes and modern trade stores in the community with moderate income level


http://www.hotpot.co.th/brand.php?bid=87


9

3. Hot Pot Ramen Buffet

Hot Pot Ramen Buffet : New Japanese-style ramen restaurant that offers new experience and value for customers with fine and rare ingredients buffet line, such as, Hokkaido squid, Tilapia, Shabu roasted pork, imitated crab claw, Siberian pork, seasoning minced pork, Wakame seaweed, and variety of sushi

• Adult THB 289 /Child THB 149 No time limit

• 1 outlet at Central Rama II




10

4. Hot Pot Prestige

Hot Pot Prestige: International buffet and Sukiyaki and Shabu restaurant with a five-star luxurious hotel atmosphere offering a variety of international dishes that are carefully selected and prepared by professional chefs in each area of expertise. Hot Pot Prestige positions itself above all other Hot Pot trademarks

• Adult THB 499/ Child 259 No time limit

• 1 outlet at Central Bangna




11

5. Hot Pot Suki Shabu

Hot Pot Suki Shabu : An A La Carte type of Sukiyaki and Shabu restaurant which renowned for its delicious Hot Pot’s traditional sauce

• 2 Outlets

In Surin and Buriram provinces

Note: Number of outlets as of 30 September 2013



12

6. Daidomon

Daidomon Bar-B-Q and Japanese restaurant, focusing on Yakiniku buffet with variety of additional side dishes apart from Yakiniku menu. Daidomon restaurant has been established since 1983 with its first outlet at Siam Square

Currently, there are 2 buffet price under Daidomon brand as follows;

1) Original store with buffet lineAdult THB 289 / Child 149 (price exclude drinks) No time limit

2) New concept store with buffet line Adult THB 339 / Child 159Time limit of 1 hour and 30 minutes

However, the Company will continue to major renovate all existing Daidomon outlets to be new concept store

• 21 outlets in leading shopping complexes

Note: Number of outlets as of 30 September 2013

http://www.daidomon.co.th/gallery_view_catelogy.php?category_id=19&filename=menu_daidomonhttp://www.hotpot.co.th/brand.php?bid=91


13

Daidomon New Concept store


14

Daidomon New Concept store


15

Business Strategies


16

Industry Overview

Total Revenue of Restaurants , Food and Drinks Business

• Total revenue of restaurants, food and drinks industry grew continuously from 2006 to 2011 with CAGR of 11.58%

• The industry revenue declined in 2009 due to domestic political unrest and US financial crisis, which affected many countries globally. However, the industry revenue in 2010 bounced back to the normal growth rate due to the economic recovery

• Franchise restaurants offering fast food

• Fried chicken, hamburger, pizza, donut, ice-cream, etc.

Types of Restaurants, Food and Drinks Business in Thailand

Quick Service Restaurant

• Luxurious restaurants offering foreign food

• Japanese, Korean, Italian restaurantsFine Dining

• Moderately decorated restaurants with comfortable atmospheres and reasonable prices

Casual Dining

Source: Business Online Co.,Ltd.

• Small food and drinks business with lower investment and shorter payback period compared to other types

Retail

• Hot Pot is classified as ”Casual Dining” restaurant

• Restaurants classified in the same category as Hot Pot with similar products offerings are MK Restaurant, Coca Suki, Texas Suki, Shabushi, Shukishi, Oishi Ramen, Hachiban Ramen and BBQ Plaza

• In 2011, top 50 of industry had total revenue of THB 75,892 mm, which accounted for 63.48% of total industry revenue

• Hot Pot has total revenue of THB 1,476.72 mm in 2011, which is ranked at no. 11 in the industry

THB

mm 69,118

79,038

88,391 85,544

100,400

119,548

-

20,000

40,000

60,000

80,000

100,000

120,000

2006 2007 2008 2009 2010 2011


17

Target Customers

Type of Restaurant Target Customer

BrandPrice

(Baht/Person)Target Group Lifestyle Income Level

1. Hot Pot Inter BuffetAdult 339Child 159

Teenager, Student,Working group and

family

Convenience, Independence, Worthiness and

group party

Medium

2. Hot Pot Buffet ValueAdult 319Child 149

Lower Medium to Medium

3. Hot Pot Ramen BuffetAdult 289Child 149

Lower Medium to Medium

4. Hot Pot PrestigeAdult 499Child 259 Working group and

family

Medium to Upper Medium

5. Hot Pot Suki Shabu A La Carte Medium

6. DaidomonAdult 289 and 339Child 149 and 159

Teenager, Student,Working group and

familyMedium

Note : Price as of 30 September 2013


18

Pricing Strategies

Price is set by considering costs of raw materials and services, as well as the price comparisons with comparable competitors

Price is set at affordable values to emphasize on price worthiness by mainly considering costs of raw material and services, economic condition, as well as purchasing power of target customers

Price is set at premium with values of carefully selected raw materials and luxurious atmosphere

Hot Pot Inter Buffet Hot Pot Prestige

Hot Pot Buffet Value

Hot Pot Ramen Buffet

Hot Pot Suki Shabu

Price is set by considering costs of raw materials and services, price comparisons with comparable competitors and current economic condition

In addition, the Company also set condition for buffet customers. If the customers cannot finish the food, the customers have to pay additional of THB 50 per person

Daidomon

Pricing strategy is similar to Hot Pot Inter Buffet

Currently, there are 2 buffet price depending on outlet concept. However, after major renovation, there will be all new concept store with a single price

http://www.hotpot.co.th/brand.php?bid=91http://www.hotpot.co.th/brand.php?bid=89http://www.hotpot.co.th/brand.php?bid=88http://www.hotpot.co.th/brand.php?bid=90http://www.hotpot.co.th/brand.php?bid=87


19

Competitive Strategies

Quality, freshness, variety, tasteness, good service and reasonable prices

Cover across wide market segment

Outlet expansion at modern trades and shopping complexes

Product and recipe creativity as well as introduction of new promotional menus

“Buffet on Bar” concept

Focused marketing to attract target customers

Sale promotion activities


20

Outlets

All outlets are located in shopping complexes, modern trade, community malls in Bangkok and metropolitan area

Hot Pot Daidomon Total

Bangkok and metropolitan Area

50 10 60

Provincial Area 72 11 83

- Center 4 - 4

- North 21 2 23

- East 13 - 13

- North East 20 5 25

- West 7 1 8

- South 7 3 10

Total 122 21 143

Distribution of all domestic Hot Pot and Daidomon Restaurants Total of 143 outlets as of 30 September 2013 1. Hot Pot Inter Buffet 47* Outlets

2. Hot Pot Buffet Value 71 Outlets

3. Hot Pot Ramen Buffet 1 Outlet

4. Hot Pot Prestige 1 Outlet

5. Hot Pot Suki Shabu 2 Outlets

6. Daidomon 21 Outlets

Total 143 Outlets

* Include 3 outlets of HD (Hot Pot and Daidomon)


21

Outlets Expansion

Number of Outlets Brand

Total

2008 2009 2010 2011 2012 Q3 /2013

19 16 20 24 40 44

1 3

37 52 54 73 72 71

4 3 1 1 1 1

13 5 2 2 2 2

4 1 1 1 1 1

- - - 24* 21 21

77 77 78 125* 138 143

Hot Pot initiated its strong expansion effort in 2011

*Acquisition in Dec 2011

http://www.hotpot.co.th/brand.php?bid=91http://www.hotpot.co.th/brand.php?bid=89http://www.hotpot.co.th/brand.php?bid=88http://www.hotpot.co.th/brand.php?bid=90http://www.hotpot.co.th/brand.php?bid=87http://www.hotpot.co.th/brand.php?bid=91


22

Centralised Procurement Process

Supplier Selection

Procurement department evaluates suppliers as supplier selection policy

Product Development department approves product quality

Procurement department proposes supplier names to committee

Pass

Procurement Process

Product Preparation

All products are distributed to all outlets by trucks and vans as follows: • 13 vans• 3 6-wheels trucks• 3 4-wheels trucks

1 32

4Quality and quantity inspection, Inventory on warehouse and waiting

for distribution

OrderingCount Inventory at the end of day and

register on procurement

system

Product InspectionBeverage and Ice Cream

Distribution

Check all inventories on warehouse Print

PR Print

PO

General Products

Outlet WarehouseProcurement

dept.Supplier


23

Factory

Factory (Main Kitchen) : Located on 11/1, Boungkumploy, Lumlooka, Pathumthani in 13-0-96 rai area size

Certificate on GMP Standard (Good Manufacturing Practice) and HACCP Standard (Hazard Analysis & Critical Control Points)

Factory is responsible for control such as fresh food, dried food, ingredient, and instant food in order to distribute to allHot Pot outlets.


24

Production Line

Ingredient Preparation

Raw Material PreparationMixed raw material

with ingredientTransformation and

decorationCooking by boiling or/and steaming

PackagingPreserving in Cooling

Storage

Evaluated and approved

New Product

Existing Product

Sealing


25

Future Projects


26

Progress of Acquired Daidomon

• Closed 10 outlets• Rebranded to HD 3 outlets

Purchased 25 Outlets

• Operating 12 outlets• Completely Renovated 9 outlets• Renovating 1 outlets• Not Renovated 2 outlets


27

Expansion Plan

Expansion and renovation of Hot Pot and Daidomon restaurants

5-year plan

- Hot Pot plans to expand approx. 20 - 25 outlets per year

- CAPEX per outlet is approx. THB 7-9 mm depending on the location

Year 2013

New expansion of 14 outlets Jan – September 14 outlets- Bangkok and Metropolitan 4 outlets- Upcountry 10 outlets

Renovation of 6 outlets Jan - September 6 outlets- Bangkok and Metropolitan 5 outlet- Upcountry 1 outlet


28

Financial Highlights


29


• Over the past 4 years, Hot Pot has shown a high CAGR sales growth of 29.52% from 2009-2012 highlighting its strong performance.

• Key contribution comes from Hot Pot Buffet Inter and Hot Pot Buffet Value, together accounting for approx. 80% - 90% of sales. Starting from 2012, Daidomon has generated sales, accounting for 10% of sales.

• Gross profit margin stood at around 53% – 56%.

THB

mm

THB

mm

Sales Gross profit and gross profit margin

862

1,130

1,457

1,873

1,386

1,750

2009 2010 2011 2012 9M2012 9M2013

HD 37

Daidomon 10 194 148 204

HP Ramen Buffet 7 9 11 11 8 9

HP Suki Shabu 94 44 38 36 28 26

HP Prestige 75 63 40 34 26 25

HP Buffet Value 368 611 817 877 660 718

HP Inter Buffet 318 403 541 721 517 732

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

460 620 795 1,049 805 986

53.3%

54.9%54.6%

56.0%

58.1%

56.4%

52.0%

53.0%

54.0%

55.0%

56.0%

57.0%

58.0%

59.0%

-

200

400

600

800

1,000

1,200

2009 2010 2011 2012 9M2012 9M2013

Gross Profit

Gross Profit Margin


30


EBIT and EBIT margin

THB

mm

EBITDA and EBITDA margin

THB

mm

• EBIT margin stood at 2.2% as of end 2012, a decline from 5.0% in the previous year due to the Daidomon operation, adjusted the wage as per the

policy of the government, Investment on human recourse for supporting the Company’s growth. EBIT in 9M 2013 has been improved.

• EBIT and EBITDA in 9M 2013 was increased by 17 MB and 38 MB or 33.9% and 25.6%, respectively, compared to 9M 2012.

EBITDA EBITDA MarginEBIT EBIT Margin

2 57 74 41 50 67

0.3%

5.0% 5.0%

2.2%

3.6%3.8%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

0

10

20

30

40

50

60

70

80

2009 2010 2011 2012 9M2012 9M2013

69 130 162 173 149 187

7.9%

11.4%10.9%

9.1%

10.7% 10.7%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

0

50

100

150

200

2009 2010 2011 2012 9M2012 9M2013


31


Net profit and net profit margin

THB

mm

Cash flow from operation

THB

mm

• Net Profit 2012 was decrease due to rising costs expenditure and one time expenses.

• Currently, the company has measures for control costs . Therefore, Net Profit in 9M 2013 was 45.9 MB, an increase of 13 MB or 39.5% from 9M 2012.

• In terms of cash flow, Hot Pot generates strong operating cash flow which reflects growth prospect of the company

Net Profit MarginNet Profit

86

147

230

119

90

238

0

50

100

150

200

250

2009 2010 2011 2012 9M2012 9M2013

-11 34 48 23 32.9 45.9

-1.3%

2.9%

3.2%

1.2%

2.4%2.6%

-1.5%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

-20

-10

0

10

20

30

40

50

60

70

2009 2010 2011 2012 9M2012 9M2013


32

Financial Summary (THB mm)

2009 2010 2011 2012 9M2012 9M2013

Sales 862 1,130.3 1,456.8 1,872.8 1,385.9 1,750.3

Sales Growth 31.13% 28.89% 28.56% 26.29%

Other Income 8.5 12.4 27.6 35.3 28.8 24.4

Total Revenue 870.5 1,142.7 1,484.4 1,908.1 1,414.7 1,774.7

COGS 402.4 510.3 661.4 824.1 609.7 788.3

Gross Profit 459.6 620.1 795.4 1,048.7 805.0 986.4

Gross Profit Growth 34.90% 28.29% 31.85% 22.53%

Gross Profit Margin 53.32% 54.86% 54.60% 56.00% 58.08% 56.36%

EBIT 2.5 57.1 74.1 40.6 50.2 67.2

EBIT Growth 2184.00% 29.77% -45.21% 33.86%

EBIT Margin 0.29% 5.00% 4.99% 2.13% 3.62% 3.84%

EBITDA 69.1 130.2 161.7 173.1 148.8 186.9

EBITDA Growth 88.42% 24.19% 7.05% 25.60%

EBITDA Margin 7.94% 11.39% 10.89% 9.07% 10.74% 10.68%

Net Profit -11.4 33.6 47.6 23.3 32.9 45.9

Net Profit Growth -394.74% 41.67% -51.05% 39.51%

Net Profit Margin -1.31% 2.94% 3.21% 1.22% 2.37% 2.62%

Total Assets 363.4 388.4

698.0 834.7 870.5 885.6

Total Liabilities

312.6

304.0

488.0

451.7 464.2

473.1

Total Equity 50.8 84.4

210.0

383.0 406.3

412.6


33

Selling Expense (MB)

Admin Expense (MB)

SG&A (MB)

Total 800.1 MB9M2013

Total 105.2 MB9M2013

393

507

659

900

659

800 49

53

74

125

82

105

11

11

14

14

11

10 52.0%

49.9%

50.6%

52.9%

53.1%

51.6%

40.0%

42.0%

44.0%

46.0%

48.0%

50.0%

52.0%

54.0%

-100

100

300

500

700

900

1,100

2009 2010 2011 2012 9M 2012 9M 2013

Mgt remuneration

Admin exp

Selling exp

%SG&A/Revenue 219 ; 27.4%

256 ; 32.0%

101 ; 12.6%

97 ; 12.1%

55 ; 6.9%

72 ; 9.0%Rental

Staff compensation

Depre & amortization

Utilities

Mktg.

Others

74; 70.0%

13 ; 12.4%

19 ; 17.6% Staff compensation

Depre &

amortizationOthers


34

Liability & EquityAsset Breakdown

• Current Ratio: 0.29 times • Debt/Equity Ratio: 1.14 times

• Debt Service Coverage Ratio: 2.84 times

THB 885.6 mm

9M 2013 THB 885.6 mm

9M2013

2.1%8.5%

65.2%

9.2%

13.8%

1.1%

Cash

WC&Other current

assets

PP&E

Leasehold Right

Deposit Guarantee

Oth non current assets

23.1%

9.4%

8.1%

7.5%5.3%

46.6%

A/P

Current Portion of

LT Loan

Other Current Liab.

LT Loan

Other Non-current

Liab.

Equity


35

Financial Highlight

• D/E ratio has been decreased from 4.14x in 2009 to 1.15x in 9M 2013

• ROA and ROE turned to be positive on 2010

• ROA and ROE in 9M 2013 has been improved to 6.4% and 8.6% as compared to 9M 2012.

Capital structure

THB

mm

ROA and ROE

Equity Debt D/E

313 304

488 451 473

51 84

210 382

413

4.14 3.60

2.33

1.18 1.15

-10.00

-8.00

-6.00

-4.00

-2.00

-

2.00

4.00

0

200

400

600

800

1,000

2009 2010 2011 2012 9M2013

-3.0%

8.9% 7.3%

3.1%6.4%

-20.2%

49.6%

27.8%

7.9% 8.6%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

2009 2010 2011 2012 9M2013

ROA ROE


36

Same Store Sale Growth

87 Stores 9M13 9M12 Diff ( +/- ) % Inc./(Dec.)

Sales (MB) 1,126.38 1,058.03 68.35 6.46%

BKK 504.76 470.94 33.82 7.18%

UPC 621.62 587.08 34.54 5.88%

Customer (KHC) 4,195 4,025 170 4.23%


37

Q&A

Q&A

Documents

Presentation As of November 21 , 2013 - listed companyjckh.listedcompany.com/misc/PRESN/20131121-HOTPOT... · 11/21/2013 · Establishment •Operated since 1995 and registered as