Berli Jucker : Management Discussion and Analysis Quarter 3 Ending 30 Sep 2020

November 12th, 2020

The President

The Stock Exchange of Thailand

Re: Management Discussion and Analysis on 3Q20 and 9M20 performance

1. Financial performance of Berli Jucker Public Company Limited for 3Q20 and 9M20

COVID-19 pandemic

During the third quarter of the year, whilst COVID-19 situation was well under the control in Thailand with significantly reduced number of daily cases due to the effective control measures, and the overall economic activity did post some relative improvements from the previous quarter as the lockdown measures, in Thailand and abroad, were gradually lifted, the general economic conditions remained still soft with declining exports, and lack of foreign tourists due to strict travel restrictions on foreign tourist arrivals.

Regarding the impact of the situation to the operations of the Company's different supply chains during the third quarter of the year:

Packaging Supply Chain: Although the Packaging Supply Chain's overall sales still declined slightly year-on-year, the improvement we started seeing in late second quarter, after the various COVID-19 related measures such as alcohol sales ban were lifted, continued in Thailand in both glass and aluminum packaging business, with both of the businesses recovering well from previous quarter in Thailand, whilst in Vietnam we did experienced some negative impact from the COVID- 19 second wave related measures during the quarter.

Consumer Supply Chain: Overall, our Consumer Supply Chain delivered continued solid growth in third quarter with Non-Food, Logistics, and International trading businesses growing year-on- year, whilst our Foods Group continued being negatively impacted by the soft overall snack sales. However also the Food business recorded sales recovery from the previous quarter.

Healthcare and Technical Supply Chain: At the Healthcare and Technical supply chain, whilst our healthcare supply chain continued seeing some benefits from the COVID-19 related sales, the lower than usual demand in certain types of medicine such as antibiotics continued, as social distancing and increased personal hygiene has lowered certain common illnesses. Our Medical Division also faced high base effect from large project sale recorded in 3Q1 9 . At the Technical Supply chain, the negative effects of economic slowdown from COVID-19 situation continued from the previous quarter. When compared with the previous quarter, healthcare and technical supply chains remained relatively flat.

Modern Retail Supply Chain: Our retail operations continued to be negatively affected by the general soft economic conditions leading to slow consumer spending, and the lack of foreign tourist arrivals which remained a significant drag to our sales at tourist destinations. Due to these factors our total same-store-sale-growth remained at similar level recorded in second quarter of the year. However if we remove the B2B sales, we saw some improvement in our retail same-store-sales- growth from previous quarter. Meanwhile, whilst the rental income has still not reached the pre- COVID level, we saw significant improvement from previous quarter as we were able to maintain our occupancy rate at c.91% for the quarter.

Revenues

BJC's consolidated total revenue for 3Q20reached THB 38,239 million, representing a decrease of THB 4,483 million or -10.5% over the same period last year. This decrease was mainly driven by the

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consolidated sales and service revenue declining to THB 35,027 million, a decrease of THB 3,593 million or -9.3% over the same period last year, driven by decreasing sales at Packaging, Healthcare and Technical, and Modern Retail Supply Chain. Whilst the consolidated other income reached THB 3,179 million, a decrease of THB 891 million or -21.9% over the same period last year, mainly driven by declining other income at Modern Retail Supply Chain due to the rental discounts and lower occupancy rate when compared to the same period last year.

When compared to 2Q20, BJC's consolidated total revenue in 3Q20 decreased THB 365 million or - 0.9% from the previous quarter. The decrease was mainly driven by seasonality impact to Modern Retail Supply Chain's sales, whilst Packaging Supply Chain and Consumer Supply Chain both posted solid quarter-on-quarter improvements.

BJC's consolidated total revenue for 9M20reached THB 119,110 million, representing a decrease of THB 10,388 million or -8.0% over the same period last year, mainly driven by decreasing sales at the Packaging, Healthcare and Technical, and Modern Retail Supply Chains, and declining other income at Modern Retail Supply Chain due to the rental discounts and lower occupancy rate when compared to the same period last year.

Expenses

BJC's consolidated total expenses for 3Q20amounted to THB 36,923 million, a decrease of THB 3,550 million or -8.8% over the same period last year. This decrease was mainly due to (1) decreased cost of goods sold expenses due to lower sales, and (2) decreased SG&A expenses mainly due to strong cost control focus and lean organization initiatives.

When compared to 2Q20, BJC's consolidated expenses in 3Q20 decreased THB 994 million or -2.6% from the previous quarter. This decrease was mainly due to (1) decreased cost of goods sold expenses due to lower sales, and (2) decreased SG&A expenses mainly due to strong cost control focus and lean organization initiatives

BJC's consolidated total expenses for 9M20amounted to THB 115,353 million, a decrease of THB 7,697 million or -6.3% over the same period last year mainly due to (1) decreased cost of goods sold expenses due to lower sales, (2) decreased SG&A expenses mainly due to strong cost control focus and lean organization initiatives.

Earnings before Interest and Tax

BJC's earnings before interest and tax for 3Q20amounted to THB 2,648 million, a decrease of THB 814 million or -23.5% over the same period last year. This decrease was due to the abovementioned reasons. If we remove the one-time expense relating to the employee severance pay due to corporate restructuring amounting to THB 28 million, recorded in 3Q20, and the positive impact from the reversal of 1H2019 property tax provision impact of THB 366 million, recorded in 3Q19, the recurring earnings before interest and tax for 3Q20 reached THB 2,675 million, a decrease of THB 420 million or -13.6% from the same period last year.

When compared to 2Q20, BJC's consolidated earnings before interest and tax in 3Q20 increased THB 772 million or 41.2% from the previous quarter. This decrease was due to the abovementioned reasons. If we remove the one-time expense relating to the employee severance pay due to corporate restructuring amounting to THB 28 million, recorded in 3Q20, and THB 449 million, recorded in 2Q20, the recurring earnings before interest and tax for 3Q20 increased THB 351 million or 15.1% from the previous quarter.

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BJC's earnings before interest and tax for 9M20amounted to THB 7,598 million, a decrease of THB 2,123 million or -21.8% over the same period last year. This decrease was due to the abovementioned reasons. If we remove the one-time expense relating to the acquisition project amounting to THB 76 million, recorded in 1Q20, the one-time expense relating to the employee severance pay due to corporate restructuring amounting to THB 476 million recorded in 9M20, the non-cash impact from the expenses relating to amendment of the post-employment benefit plans of THB 306 million recorded in 2Q19, and the positive impact from the reversal of 1H2019 property tax provision impact of THB 366 million, recorded in 3Q19, the recurring earnings before interest and tax for 3Q20 reached THB 8,150 million, a decrease of THB 1,512 million or -15.6% from the same period last year.

Net Profit Attributable to Equity Holders

BJC's consolidated net profit attributable to the equity holders of the Company for 3Q20reached THB 1,062 million, a decrease of THB 712 million or -40.1% from the same period last year, driven by the abovementioned reasons. If we remove the one-time expense relating to the employee severance pay due to corporate restructuring amounting to THB 27 million after tax and minority interests, recorded in 3Q20, and the positive impact from the reversal of 1H2019 property tax provision impact of THB 298 million after tax and minority interests, recorded in 3Q19, the recurring net profit available for the equity holders of the Company for 3Q20 reached THB 1,090 million, a decrease of THB 386 million or -26.2% from the same period last year.

When compared to 2Q20, BJC's consolidated net profit attributable to the equity holders of the Companyin 3Q20 increased THB 756 million or 247.2% from the previous quarter. This increase strong improvements at the Packaging, and Modern Retail Supply Chains as they started to recover from the previous quarter. If we remove the one-time expense relating to the employee severance pay due to corporate restructuring amounting to THB 27 million, recorded in 3Q20, and THB 437 million, recorded in 2Q20, consolidated net profit attributable to the equity holders of the Companyin 3Q20 increased THB 347 million or 46.7% from the previous quarter.

BJC's consolidated net profit attributable to the equity holders of the Company for 9M20reached THB 2,648 million, a decrease of THB 2,158 million or -44.9% over the same period last year, driven by the abovementioned reasons. If we remove the one-time expense relating to the acquisition project amounting to THB 61 million after tax and minority interests, recorded in 1Q20, the employee severance pay due to corporate restructuring amounting to THB 464 million after tax and minority interests, recorded in 9M20, the non-cash impact from the expenses relating to amendment of the post- employment benefit plans of THB 237 million after tax and minority interests recorded in 2Q19, and the positive impact from the reversal of 1H2019 property tax provision impact of THB 298 million after tax and minority interests, recorded in 3Q19, the recurring net profit available for the equity holders of the Company for 9M20 reached THB 3,173 million, a decrease of THB 1,571 million or -33.1% from the same period last year.

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Key highlights of 3Q20 and 9M20

	Unit: Million THB			3Q20			2Q20			3Q19	%QoQ			%YoY			9M20			9M19		%YoY
	Packaging Supply Chain		4,943		4,433		5,064	11.5			(2.4)				14,414		14,949	(3.6)
	Consumer Supply Chain		5,146		4,956		4,470	3.8			15.1				15,681		13,931	12.6
	Healthcare and Technical Supply Chain	1,953		1,958		2,239	(0.3)			(12.8)				5,791		6,317	(8.3)
	Modern Retail Supply Chain		23,899		25,698		27,274	(7.0)			(12.4)				76,567		83,311	(8.1)
	Others				(913)		(926)		(427)	(1.4)			113.8				(2,824)		(1,063)	165.7
	Sales & Services			35,027		36,119		38,620	(3.0)			(9.3)				109,629		117,445	(6.7)
	Other income				3,179		2,485		4,070	27.9			(21.9)				9,360		12,042	(22.3)
	Gain from foreign exchange		33		-		32	100.0			1.3				121		11	1,010.7
	Total revenues			38,239		38,604		42,722	(0.9)			(10.5)				119,110		129,498	(8.0)
	Cost of goods sold			28,421		29,469		31,222	(3.6)			(9.0)				89,080		94,684	(5.9)
	Gross profit			6,606		6,650		7,398	(0.6)			(10.7)				20,549		22,761	(9.7)
	Selling expenses			6,155		5,975		6,739	3.0			(8.7)				18,822		20,982	(10.3)
	Administrative expenses		1,013		1,151		1,256	(12.0)			(19.3)				3,464		3,686	(6.0)
	Expenses	from	adjustment of	-		-		-	-			-				-		306	(100.0)
	employee benefit obligation
	Loss from foreign exchange		-		(61)		-	(100.0)			-				-		-	-
	Share of profits (loss) from investments	(2)		(72)		(44)	(96.8)			(94.7)				(146)		(119)	23.3
	Earnings before interest and tax	2,648		1,876		3,461	41.2			(23.5)				7,598		9,721	(21.8)
	(Recurring	earnings	before	2,675		2,325		3,095	15.1			(13.6)				8,150		9,661	(15.6)
	interest and tax)¹
	Interest expense			1,334		1,322		1,256	0.9			6.2				3,987		3,699	7.8
	Earnings before tax		1,314		554		2,205	137.4			(40.4)				3,610		6,022	(40.1)
	Tax				139		131		317	6.1			(56.2)				569		819	(30.5)
	Net profit				1,175		423		1,888	178.0			(37.8)				3,041		5,203	(41.6)
	Attributable to:
	Minority interests			113		117		114	(3.5)			(1.1)				393		398	(1.2)
	Equity holders of the Company	1,062		306		1,774	247.2			(40.1)				2,648		4,805	(44.9)
	One-time items after tax:
	Expenses from adjustment of	-		-		-	-			-				-		(237)	(100.0)
	employee benefit obligation
	Reversal of property tax		-		-		298	-			(100.0)				-		298	(100.0)
	provision
	Expenses relating to acquisition	-		-		-	-			-				(61)		-	100.0
	project
	Expenses relating to severance pay	(27)		(437)		-	(93.8)			100.0				(464)		-	100.0
	due to corporate restructuring
	Equity holder of	the	Company	1,090		743		1,476	46.7			(26.2)				3,173		4,744	(33.1)
	(Excluding one-time items) ¹
	Key Financial Ratios			3Q20			2Q20			3Q19		%QoQ			%YoY			9M20		9M19		%YoY
	Gross profit as % to sales*		18.9%		18.4%			19.2%		+45 bps			-30 bps	18.7%	19.4%		-64 bps
	SG&A as % to sales*			20.5%		19.7%			20.7%		+73 bps			-24 bps	20.3%	21.0%		-68 bps
	Recurring EBIT margin as % to sales*¹	7.6%		6.4%			8.0%		+120 bps			-38 bps			7.4%	8.2%		-79 bps
	Recurring Net Profit margin (attributable
	to equity holders of the Company) as %	3.1%		2.1%			3.8%		+105 bps			-71 bps	2.9%	4.0%		-115 bps
	to sales*¹
	Net IBD to equity (times)		1.3		1.3				1.3		+0 bps		-2 bps	1.3	1.3		-2 bps

* As percentage to sales excluding other income

• Excluding THB 306 million (THB 237 million after tax and minority interest expense) expenses relating to amendment of the post-employment benefit plans in 2Q19, reversal of property tax provision of THB 366 million (THB 298 million after tax and minority interests) in 3Q19, THB 76 million (THB 61 million after tax and minority interest expense) expenses relating to

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