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April 26, 2024

Masan's profit in 1Q2024 doubled in comparison to the preceding quarter.

Ho Chi Minh City, 25 April 2024 – Masan Group Corporation (HOSE: MSN, “Masan” or the “Company”, today released its unaudited management accounts for the first quarter (“1Q2024”). 

“We look to drive WinCommerce’s, Masan MEATLife’s and Phuc Long’s profitability to catch up to Masan Consumer. Profitability will be the key metric in the next 18-24 months to enhance shareholder value,” said Dr. Nguyen Dang Quang, Chairman of Masan Group.

Strategic Highlights:
  • Masan's core consumer-retail businesses1 grew combined operating profits (“EBIT” or “earnings before interest and taxes”) by 69.7% YoY in 1Q2024, demonstrating growth momentum as innovations pick up steam and overall domestic consumption starts to recover. 

    • Masan Consumer Holdings (“MCH”) grew revenue 7.4% YoY and delivered a gross margin of 45.9% for 1Q2024, up 400 basis points (“bps”) versus the same period last year, while posting EBITDA margin of 25.3% in 1Q2024. 

    • WinCommerce (“WCM”) delivered 8.5% YoY increase in net revenue in 1Q2024, driven by a 5.7% YoY, like-for-like2 (“LFL”) sales growth across the store network. The company's EBITDA surged by 3.6x compared to the previous year, primarily attributed to the enhanced gross margin and LFL growth.

    • Masan MEATLife’s (“MML”) revenue grew by 7.5% YoY in 1Q2024, driven by increased contributions from branded pork and higher prices in pork and poultry. EBITDA margin also improved to 6.9% in 1Q2024, compared to 1.7% in 1Q2023, resulting in positive EBIT for MML. 

  • Strengthened and deleveraged Masan’s balance sheet while protecting the Company’s from potential macro uncertainty:

    • Masan successfully closed its US$250 million equity investment from Bain Capital on 22nd April. The investment will bolster Masan’s financial reserves, enhancing its liquidity profile, with cash balance increasing by VND6,228 billion3 and pro-forma Net Debt to EBITDA4 decreasing to 3.7x. Masan will continue to explore strategic alternatives to reduce its debt position thereby lowering interest expense. 

    • Per the Company’s report at the end of 2023, Masan has hedged 100% long-term USD-debt exposure with favorable terms, which aligned with the Company’s risk management policy. As a result, the recent appreciation of USD will not materially impact Masan Group’s consolidated profitability profile. 


Business Performance Highlights: 
  • In 1Q2024, MSN’s consolidated revenue grew slightly to VND18,855 billion. Strong performance of the consumer-retail business units was offset by underperformance at Masan High-tech Materials (“MHT”). NPAT Post – MI shows positive momentum, doubling compared to the 4Q2023.

  • Consumer-retail business units and Techcombank (“TCB”) delivered strong EBITDA growth of 31.7% and 27.9%.

  • The CrownX (“TCX”), Masan’s integrated consumer-retail platform that consolidates WCM and MCH, recorded top-line growth of 6.4% YoY to VND14,152 billion in 1Q2024, compared to VND13,300 billion in 1Q2023, driven by strong revenue growth in MCH and LFL growth at WCM. TCX’s posted consolidated EBITDA of VND1,950 billion in 1Q2024, up 27.6% YoY:

    • Maintaining a healthy level of stock at distributors, MCH continued to grow its top line while sustaining high profitability margins in 1Q2024.  

      • MCH net revenue delivered growth of 7.4% YoY growth to VND6,727 billion in 1Q2024. Other categories experienced double-digit growth rates: Convenience Foods, Beverages, and Home Personal Care (“HPC”) grew 10.3% YoY, 23.4% YoY, and 15.2% YoY, respectively. 

      • MCH’s distributor stock levels were normalized at 16 days, signaling healthy growth. 

      • MCH’s gross margin remained at 45.9% in 1Q2024, up 400 bps compared to 1Q2023. MCH’s NPAT Pre-MI increased by 31.5% to VND1,505 billion in 1Q2024 from VND1,144 billion in 1Q2023.  

      • The newly launched tea product, BupNon Tea365, demonstrated initial positive performances. Launched in November 2023, the product recorded VND106bn in revenue in 1Q2024, while achieving retailer’s repurchase rate of nearly 60%. 

  • WCM enhanced EBIT margin in 1Q2024, maintaining positive grocery NPAT5.

    • WCM’s net revenue witnessed a 8.5% YoY increase to VND7,957 billion from VND7,335 billion in 1Q2023. This growth in net revenue is driven by net new store openings, store ramp-ups from the previous year, and a notable 5.7% YoY growth in LFL6 sales across the entire network. Additionally, minimarts (“WMP”) observed an 11.4% YoY increase in net revenue, reaching VND5,364 billion, while supermarkets (“WMT”) achieved VND2,523 billion in 1Q2024, marking a 3.1% YoY increase. 

    • LFL revenue growth in 1Q2024 of WMP and WMT were 6.4% YoY and 4.2% YoY, respectively. 

    • In 1Q2024, 40 new minimarts (“WinMart+” or “WMP”) were opened in 1Q2024 resulting in 3,667 stores nationwide. Minimarts demonstrated improved store-level margins7 compared to previous years, driven by higher gross margins and accelerated LFL growth. Additionally, new store formats such as WIN and WinMart+ showed positive traction with distinct value propositions, contributing to both LFL growth and profitability. WIN, positioned as the “Point of Life” outlets for urban consumers, achieved a 7.3% LFL growth and a 30.2% fresh penetration, while WinMart+ Rural, positioned as value-for-money, achieved an 11.2% LFL growth. Both store cohorts have delivered positive NPAT margin. These initiatives underscore the company's commitment to diversifying its offerings and capturing a wider market share.

    • In 1Q2024, WCM continued to record 200bps YoY improvements in gross margin to 24.1% from 22.1% in 1Q2023, driven by enhanced total commercial margins (“TCM”) and improved shrinkage cost management. The EBITDA margin increased by 210bps, reaching 3.1% compared to 1.0% in 1Q2023, reflecting significant absolute EBITDA growth YoY. WCM delivered a -0.1% EBIT margin and positive grocery NPAT8 again in 1Q2024.   

  • MML delivered solid revenue and EBITDA growth driven by increased pork and chicken prices and better margin mix from processed meat

    • MML's revenue climbed to VND1,720 billion in 1Q2024, a 7.5% increase from VND1,600 billion in 1Q2023. This growth was attributed to the growth in its branded pork segment and pork farm operations, which grew by 23% YoY in total, offsetting declines in the poultry segment. Revenue from its chicken farm operations declined by 29.7% YoY as MML rationalized chicken farms operations.

    • MML's gross profit margin surged from 11.7% in 1Q2023 to 23.3% in 1Q2024, primarily driven by higher prices for pork and poultry. Pork prices reached approximately VND60,000 per kg by March’s end, while chicken prices were VND34,400 per kg in the North and VND36,800 per kg in the South. Although processed meat revenue slightly decreased year-on-year, gross margins improved significantly from 26.4% in 1Q2023 to 35.7% in 1Q2024.

    • MML’s EBITDA margin rose from 1.7% in 1Q2023 to 7.2% in 1Q2024. 

  • PLH improved profitability by rationalizing kiosk footprints 

    • Despite the challenging macro environment, PLH’s EBITDA margin stayed flat at 15.8% in 1Q2024, primarily driven by the rationalization of underperforming kiosks within WCM, highlighting the company's efforts to enhance operational efficiency. 

  • Although MHT’s performance continued to be impacted by lower global customer demand, blasting resumed at the end of 1Q2024, demonstrating positive upside for the remainder of the year

    • MHT will continue to explore all opportunities to monetize its copper inventory, current market value of $90 million as of March 31st, 2024.

  • Techcombank (“TCB”), Masan’s associated company, contributed VND1,229 billion in EBITDA in 1Q2024, representing a 27.9% YoY growth. For detailed results, please refer to the bank’s website.
1 Consumer-retail businesses include TCX (comprising MCH & WCM), MML, and PLH
2 LFL for WCM refers to matured stores cohort which was opened before 2023 and are still operating
3 Proceeds net off transaction fees
4 Pro-forma Net debts / EBITDA is calculated by deducting Bain’s cash injection from Net Debts as of Mar 31st 2024
5 Grocery NPAT excludes impact from incurred by non-grocery business
6 LFL for WCM refers to matured stores cohort which was opened before 2023 and are still operating
7 Store EBITDA and EBIT remove back office and head office expenses
8 Grocery NPAT excludes impact from WinEco’s amortization and losses incurred by non-grocery business

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