Dear Shareholders,

Thailand’s economy improved year-on-year in 2017, fuelled by further export growth and the continued expansion of the tourism sector. Private consumption picked up gradually and while purchasing power has risen, this has been mostly limited to middle-class and high net worth consumers. Against this backdrop, our beverage business was also affected by the slowdown in consumption during the mourning period and the alcoholic beverage industry’s anticipation of an excise tax hike in the last quarter of the Company’s fiscal year. Nonetheless, despite facing rather difficult market conditions, we managed to maintain a similar level of revenue as the previous year and even achieved satisfactory profit growth in the fiscal year ended 30 September 2017, with sales revenue amounting to Baht 189,997 million and net profit from operations climbing 4.6% year-on-year to Baht 26,184 million.

In 2017, we made progress in our continuous development of brands across ThaiBev’s product groups, in line with Vision 2020. We elevated the prestige of our spirits business’

“Ruang Khao” brand – Thailand’s first spirits brand – with the launch of “Ruang Khao Silver” to penetrate the market for high-end white spirits and on-premise consumption. We redesigned the packaging of “Blend 285” as well, giving it a luxurious look on par with premium international spirits. We also launched “Chang” mineral water in emerald green bottles, premiumizing the image of the “Chang” brand. In addition, we further penetrated the high-end beer market with the re-launch of “Federbräu” beer with a new look, positioning it as the first and only beer in Thailand that uses high quality malt from a single source in Germany. Within the first year of its re-launch, “Federbräu” has already won two international accolades – one at the World Beer Awards 2017 and another at the International Beer Challenge 2017.

For product distribution, a synergy between the non-alcoholic beverage and alcoholic beverage product groups through the opening of “Crystal” drinking water production lines in the north-eastern and southern regions of Thailand, coupled with ThaiBev’s distribution network, enabled “Crystal” drinking water to achieve continuous growth and strongly become the No. 1 brand in Thailand’s drinking water market.

Our spirits business achieved satisfactory growth in the year ended 30 September 2017, generating sales revenue and net profit amounting to Baht 109,297 million and Baht 20,420 million, respectively. We maintained the Company’s dominance in the domestic spirits market and expanded further into the ASEAN market. In particular, we expanded our spirits business into Myanmar in late 2017 through the acquisition of a 75% stake in Grand Royal Group, which is the largest player in Myanmar’s spirits market, owns famous international whisky brands, and has a professional management team. This attests to our determination to achieve the business goals we have set for the Company as part of Vision 2020 and to be the leader in ASEAN’s beverage industry.

All players in Thailand’s beer industry faced challenging operating conditions in 2017 as the economy remained slow. Beer sales generated by the Company for the year ended 30 September 2017 decreased to Baht 57,326 million and a Baht 3,130 million net profit was recorded. Nevertheless, we continued focusing on constantly communicating with consumers through various marketing activities, entrenching “Chang” beer’s brand equity and keeping it in a leading position in the area of consumer attitudes towards beer brands.

Our non-alcoholic beverage business registered a turnaround this year as we adjusted advertising and promotional campaigns to better suit target groups and also rationalized costs. These enabled us to achieve sales revenue and EBITDA amounting to Baht 16,777 million and Baht 209 million, respectively, while reducing net loss by 45.5%.

Our food business did not grow much as the pace of the country’s economic recovery was still quite gradual. However, as we increased selling prices and managed raw material and staff costs more prudently, we recorded satisfactory profit growth. To offer more variety to consumers and cater to their needs for every occasion, we also expanded our food business in late 2017 with the acquisition of Thai and Western restaurants, including 252 KFC franchises in Thailand which will give ThaiBev’s food business a boost, making the Company one of the leader in food businesses in Thailand.

I am pleased to report that ThaiBev is now included in both the Dow Jones Sustainability Indices (“DJSI”) World family and DJSI Emerging Markets family just one year after being selected to be a member of the DJSI Emerging Markets family. This marks another major step in our journey towards becoming recognized on an international level as an organization which conducts business and delivers good results with social and environmental factors taken into account, nurturing business growth in a sustainable manner and maximizing long-term benefits for investors.

We began using SAP enterprise solution human capital management system in 2017 to aggregate employee information, both domestically and internationally. This technology supports employees and helps them find suitable avenues for developing their own potential and competencies in order to seize “Limitless Opportunities” according to Vision 2020.

I would like to express my gratitude towards all shareholders, customers, partners and relevant parties from all sectors for your unwavering trust. I am also grateful for the determination and hard work demonstrated by the Board of Directors, the senior management team, and all employees throughout the year. ThaiBev will continue working with all our stakeholders to pursue progress and nurture business growth in a sustainable manner, underpinned by good corporate governance and social responsibility, in order to create and share value of growth, as well as maximise benefits for all.

Thapana Sirivadhanabhakdi

President and CEO