7 Quick Things Investors Should Learn About Super Group Ltd

Super Group Ltd (SGX: S10) is one of the cool companies which shares a webcast for their quarterly earnings presentations (the link is here).

As a leading instant food and beverage brand, the company’s business can be segmented into branded consumer (BC) products and food ingredients (FI). You can read more about Super Group here.

Beyond Coffee, Beyond Asia

Below are seven useful (additional) things I learned about Super Group from listening to its latest webcast for its fiscal 2014 earnings release:

  1. Summing up the year, Chief Financial Controller Koh Chun Yuan highlighted the key events that affected the financials for Super Group:
    1. Full year revenue in 2014 was $539.5 million, down 3% from 2013. Net income was down 31% to $71.6 million.
    2. In 2014, the political crisis in Thailand – Super Group’s largest branded consumer market – affected sales for the year. The company’s top-line was also hindered by the depreciation of regional currencies against the Singapore dollar, the delisting of non-performing products in the Philippines, and the move of the packaging plant from Singapore to Malaysia.
    3. On the cost side, the 40% increase in palm kernel oil prices during the year had impacted the gross margin.
  2. The balance sheet for Super Group remains strong with a debt to equity ratio of just 0.22. Although $20 million in debt was taken on in 2014, the capital expenditures for Super Group’s expansion is largely completed and is expected to support the company’s needs for the next three years. Management expects capital expenditures to moderate between $4 million and $5 million annually as replacement capex.
  3. The management team stressed that the company is clear on what needs to be done. Future growth will come from a three-pronged strategy: Branding; product innovation; and geographical diversification.
  4. On branding, Assistant General Manager Darren Teo talked about changes in how the company’s approaching things. Instead of simply attaching the Super brand name on to different products, Super Group’s now putting product managers behind each brand. Each sub-brand will represent a different thing. (For instance, the Owl brand represents heritage coffee – think “kopi siu dai”)
  5. On product innovation, management shared its aspirations for product categories beyond coffee. Several examples were given, from the new botanical extracts category, to broadening the use of creamers into ice cream and bakeries.
  6. On geographical diversification, Super Group is looking to move beyond the perception that it is only a company for markets in South East Asia and China. In the last call, Super Group spoke about expanding to eastern European countries and the Middle East.
  7. Last but not least, Teo commented that management will be building up the company’s war chest in view of any acquisitions down the road with the three-pronged strategy in mind.

In closing, Teo felt that Super Group has the right people, mindset, and tools to execute its three-pronged growth strategy.

Foolish takeaway

To buy and hold a company’s shares for the long term also means keeping up with developments in the company.

The access to management teams via webcasts gives the Foolish investor a fair chance to judge for themselves whether they would like to be invested alongside those teams. It also helps us put together a more complete thesis around a company and keep up with developments in the firm’s industry.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong owns shares in Super Group