3 Things Investors Should Know About Thai Beverage Public Company Limited’s Most Important Business Segment: Spirits

Thai Beverage Public Company Limited (SGX: Y92) is a food & beverages company with four different business segments, namely, Spirits, Beer, Food, and Non-Alcoholic Beverages.

Despite the segments all being classified under F&B, they actually have different business and financial characteristics. In here, I want to have a quick overview of the Spirits segment from three perspectives. Its financials, products, and future plans. With the Spirits segment, one important point worth noting is that it accounts for the majority of Thai Beverage’s total revenue.

Financials of Spirits segment

The table below shows the income statement of the Spirits segment for Thai Beverage’s financial year ended 30 September 2016 (it should be noted that FY2016 consists only of nine months) and for the same period a year ago:

Thai Beverage Spirits segment income statement
Source: Thai Beverage FY2016 Annual Report

It’s easy to observe that the Spirits business is stable, with most metrics in FY2016 being comparable to those in FY2015.

The product portfolio

Spirits are distilled beverages that contain no added sugar and has an alcohol content of at least 20% by volume. Examples of spirits are brandy, vodka, and whisky.

Here are some of the products in Thai Beverage’s Spirits segment:

Thai Beverage spirits products
Source: Thai Beverage FY2016 Annual Report

The company has a strong position in the spirits market. For instance, the company holds a 90% market share for white spirits in Thailand.

Future plans

Thai Beverage’s domestic Spirits business (the company is based in Thailand and generates most of itsr revenues from the country) was affected in FY2016 due to economic conditions, with some consumers shifting to lower priced-products. To address this, the company had “geared up efforts” to promote its brand of lower priced brown spirits.

During the fiscal year, Thai Beverage also grew its domestic distribution channels for its Spirits business by launching its premium spirits in luxury hotels and restaurants. Some examples of the company’s brands that were launched include Old Pulteney, anCnoc, and Mekhong.

Internationally, the Spirits segment had traditionally sourced revenue from Europe. But, Thai Beverage has plans to further penetrate ASEAN markets. The company thinks that ASEAN has “high potential for growth.” Examples of the countries that Thai Beverage has worked on are Myanmar, Philippines, Malaysia, and Vietnam.

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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 Lawrence Nga doesn’t own shares in any companies mentioned.