What Does Fraser and Neave Limited Do and How Does It Make Money?

It is important to know what a particular company does and how it makes money before investing in it. Investing in a business without such knowledge is akin to travelling to an unknown territory without a map.

On that note, let’s check out what business Fraser and Neave Limited (SGX: F99), or F&N for short, is involved in and how it generates its revenue.

F&N, as a quick background, is a consumer group with expertise in the food and beverage (F&B), and publishing and printing sectors. As at 12 December 2016, Thai Beverage Public Company Limited (SGX: Y92) had a 28.53% stake in F&N.

Let’s take a look at the table below for the revenue contribution of each segment for the financial year ended 30 September 2016 (FY2016):Source: Fraser and Neave Limited Annual Report 2016

The Dairies business segment was the largest contributor to total revenue, giving 55% of total sales. This segment and the Beverages segment make up the F&B segment for the company.

Under the F&B segment, the firm sells flavoured carbonated soft drinks, isotonic drinks, ready-to-drink tea, ready-to-drink milk, soya milk, canned milk, and ice-cream, among others.

Some of its top brands are shown below:

Source: Fraser and Neave Limited Annual Report 2016

Together with Thai Beverage, F&N has a vision to be the leading F&B player in ASEAN (Association of Southeast Asian Nations) by 2020.

Over at the Printing & Publishing business segment, it operates a publishing business under the brand, Marshall Cavendish. The segment also has a retail arm under Times Bookstores.

F&N gives a further geographical breakdown of its revenue, as seen below:

Source: Fraser and Neave Limited Annual Report 2016

For FY2016, Singapore and Malaysia contributed to 67% of total revenue.

Other ASEAN countries – Myanmar, Thailand, Vietnam and Indonesia – collectively contributed to 29% of total revenue.

Meanwhile, outside ASEAN countries – China, Taiwan, India, Australia, Europe and the USA – together contributed 4% of total sales.

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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 Sudhan P doesn’t own shares in any companies mentioned.