DA NANG UNIVERSITY OF ECONOMICS Faculty of International Business REPORT FINANCIAL STATEMENT ANALYSIS SAIGON BEER ALCOHOL BEVERAGE CORPORATION Academic Advisor Ph D Thái Thị Hồng Ân Class Code FIN3004.
Trang 1DA NANG UNIVERSITY OF ECONOMICS Faculty of International Business
REPORT FINANCIAL STATEMENT ANALYSIS SAIGON BEER ALCOHOL BEVERAGE CORPORATION
Academic Advisor : Ph.D Thái Thị Hồng Ân Class Code : FIN3004_46K01.3 Group 4 : Lê Thị Hà An
Nguyễn Thị Thùy Dương Hoàng Thị Tường Vy Nguyễn Nhật Lam Nguyễn Như Quân
Class : 46K01.3
Da Nang, November, 2021
Trang 2INDIVIDUAL CONTRIBUTION EVALUATION
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Trang 3TABLE OF CONTENTS
I Overview Saigon Beer Alcohol Beverage Corporation (SAB) 6
1 General information of company 6
a) Vision: 6
b) Mission: 6
c) Core values: 6
2 Core business activities 7
3 Key milestones of Saigon Beer Beverage 7
4 Operation industry of company 7
5 Strategies to generate returns in the context of economic and industry conditions 8
a) Focus on 4Cs Commitment Strategy: 8
b) Promote stakeholder engagement: 8
c) Diversify different lines and designs of products on the domestic and international market: 8
d) Strengthen relationships with investors and maintain fairness and benefits for shareholders: 8
II Overview The Company’s Finance 8
1 Key assets 8
2 Key liabilities 8
3 The sight of the company’s main sources of income 8
a) Income classification by sales channel: 8
b) Income classification by distributions channel: 9
c) Income from business activities: 9
III Analyze the financial report: 10
1 Liquidity ratios 10
a) Analyzation: 10
b) Comparing to the industry averages ratios and competitors’ ratios: 10
c) Reasons for the tendency of changes in liquidity ratios: 12
2 Capital Structure ratios: 12
a) Analyzation: 12
b) Comparing to the industry averages ratios and competitors’ ratios: 13
c) Reasons for the tendency of changes in capital structure ratios: 16
3 Turnover ratios 16
Trang 4a) Analyzation: 16
b) Comparing to the industry averages ratios and competitors’ ratios: 18
c) Reasons for the tendency of changes in turnover ratios: 20
4 Profitability ratios 20
a) Analyzation: 20
b) Comparing to the industry averages ratios and competitors’ ratios: 22
c) Reasons for the tendency of changes in profitability ratios: 24
5 Market value ratios 24
a) Analyzation: 24
b) Comparing to the industry averages ratios and competitors’ ratios: 25
c) Reasons for the tendency of changes in market value ratios: 28
IV Conclusion 28
V Calcaluted data for SABECO: 29
VI References: 30
Trang 5LIST OF TABLES
Table 1.1 SABECO's current ratio in 5 years 2017-2021 10
Table 1.2 SABECO's quick ratio in 5 years 2017-2021 10
Table 1.3 Compared total quick ratio among SABECO, HABECO and industry from 2017 to 2021 11
Table 1.4 Compared total current ratio among SABECO, HABECO and industry from 2017 to 2021 11
Table 2.1 Total debt ratio of SABECO from 2017 to 2021 12
Table 2.2 Debt to equity ratio of SABECO from 2017 to 2021 13
Table 2.3 Equity multiplier of SABECO from 2017 to 2021 13
Table 2.4 Compared total debt ratio among SABECO, HABECO and industry from 2017 to 2021 14
Table 2 5 Compared debt to equity ratio among SABECO, HABECO and industry from 2017 to 2021 14
Table 2.6 Compared equity multiplier ratio among SABECO, HABECO and industry from 2017 to 2021 15
Table 3.1 Inventory turnover of SABECO from 2017 to 2021 16
Table 3.2 Receivables turnover of SABECO from 2017 to 2021 17
Table 3.3 Fixed asset turnover of SABECO from 2017 to 2021 17
Table 3.4 Total asset turnover of SABECO from 2017 to 2021 17
Table 3.5 Compared inventory turnover among SABECO, HABECO and industry from 2017 to 2021 18
Table 3.6 Compared receivables turnover among SABECO, HABECO and industry from 2017 to 2021 18
Table 3.7 Compared fixed asset turnover among SABECO, HABECO and industry from 2017 to 2021 19
Table 3.8 Compared total asset turnover among SABECO, HABECO and industry from 2017 to 2021 20
Table 4.1 SABECO’s profit margin from 2017 to 2021 21
Table 4.2 Analyzing SABECO’s ROA rates from 2017 to 2021 21
Table 4.3 Analyzing SABECO’s ROE rates from 2017 to 2021 22
Table 4.4 Compared profit margin among SABECO, HABECO and industry from 2017 to 2021 22
Table 4.5 Compared return on assets rate (ROA) among SABECO, HABECO and industry from 2017 to 2021 23
Table 4.6 Compared return on equity rate (ROE) among SABECO, HABECO and industry from 2017 to 2021 23
Table 5.1 EPS and P/E of SABECO from 2017 to 2021 25
Table 5.2 Sabeco’s P/B ratio from 2017 to 2021 25
Table 5.3 Compared earning per share (EPS) among SABECO, HABECO and industry from 2017 to 2021 26
Table 5.4 Compared price/earning ratio (P/E) among SABECO, HABECO and industry from 2017 to 2021 26
Table 5.5 Compared price/earning ratio (P/B) among SABECO, HABECO and industry from 2017 to 2021 27
Trang 6I Overview Saigon Beer Alcohol Beverage Corporation (SAB)
1 General information of company
- Corporate Name: TONG CONG TY CO PHAN BIA – RUOU – NUOC GIAI KHAT SAI GON
- English Name SAIGON BEER – ALCOHOL – BEVERAGE CORPORATION
- Abbreviated Name: SABECO
- Established day: 01/06/1977
- Charter Capital: VND 6,412,811,860,000
- Legal Representatives: Mr Koh Poh Tiong - Chairman of the Board of Directors
- Mr Neo Gim Siong Bennett - General Director
- Registered Office 187 Nguyen Chi Thanh, Ward 12, District 5, Ho Chi Minh City, Vietnam
- Headquarters 5th Floor, Vincom Center, 72 Le Thanh Ton, Ben Nghe Ward, District 1, Ho Chi Minh City, Vietnam
- Develop Vietnam’s beverage industry to keep pace with the world
- Promote the culinary culture of Vietnamese people
- Improve the quality of life by providing high-quality, safe and healthy beverages
- Bring practical benefits to shareholders, customers, partners, employees and society
- Satisfy and meet the needs of beverages under the international food safety standards “Food hygiene and safety and environmental protection”
- Fulfill obligations to the State on the basis of transparency in business
- Actively participate in community activities
- Ensure the development towards international integration
c) Core values:
Traditional brand: The superiority of a traditional brand is built and confirmed over time Customers have many choices and are well taken care of the services SABECO has become a “top of mind” in the hearts of customers
Social Responsibility: The development of social responsibility is the tradition of SABECO We provide the society safe and useful products, and we always wish to share and take responsibility for social work and environmental protection with practical action
Cooperation for Mutual Benefits: We build "mutually beneficial" partnerships as the basis for sustainable development We develop appropriate policies for long cooperation with partners
Sticking: Sticking to a friendly, sharing environment Where people are empowered to learn, create and contribute to the joy of success
Trang 7Continuous improvement: We are not satisfied with present and are always dreaming of rising, learning, creating, and innovating to meet constantly changing needs Continuous learning, creativity and innovation is our style
2 Core business activities
- Produce and sell beer, alcohol and beverages and related products including materials and packaging;
- Provide transportation, logistics and warehousing services;
- Manufacture mechanical products, build steel components and provide mechanical installation services; and
- Provide construction and real estate services
3 Key milestones of Saigon Beer Beverage
- 1875: A little brewery established by Victor Larue in Saigon
- 1977: The foundation of Saigon Beer Factory
- 1985: Introduction of 333 beer can on the market
- 1992 - 1999: Introduction of many lines of Saigon beer under the design of bottle & appearance of Saigon Beer Company (1993)
- 2003: The foundation of Saigon Beer - Alcohol - Beverage Corporation (SABECO)
- 2016 - 2018: SABECO has been listed on HOSE (2016) and accepted the transfer in the structure of the managerial organization (Thaibev)
- 2019 - 2021: The relaunch of 333 and Bia Saigon; achieve in the Australian international beer Awards
4 Operation industry of company
In recent years, Vietnam's food and beverage market has become attractive to foreign businesses through a series of transfer, merger, and acquisition deals between foreign and domestic enterprises The domestic market, when there are foreign enterprises, has become vibrant and since then the competition among domestic enterprises has also become stronger than ever Competing businesses can be mentioned such as:
➢ Heineken: It is a large enterprise in the world with the strength of beer
production Heineken has the strength of brand and class, so it has dominated most of the segments premium line beer Although the beer output is only ½ of that of SABECO (domestic beer production company), the profit is nearly 2,000 billion VND per year Heineken will not stop there; Heineken will continue to hit the Vietnamese market because this market is one of the strongest beer consumption markets
➢ Carlsberg: It is also a major beer producer in the world This company has been
present in Vietnam since the early 90s From the beginning, Carlsberg has had
"great tricks" and has gradually stood firm in the Vietnamese market
➢ Habeco: Although it is a domestic enterprise, it can still compete with the above
enterprises and SABECO With foreign enterprises, Habeco competes on brands, with domestic enterprises, Habeco competes on domestic prices and positioning products in customers' minds, preferring to use Vietnamese products
The active presence of foreign enterprises in the Vietnamese market opens up many opportunities for cooperation and investment in production in industrial parks, creating jobs for workers, transferring technology, and bringing products into the world
Trang 8diversification and utility However, this is also a big challenge for domestic enterprises when their competitiveness is still weak, requiring efforts in innovating and adapting to integrate into the common commercial "playground" Therefore, along with diversifying products to meet the trend of consumer tastes, it is more important for food and beverage businesses to increase product quality from every stage in the production chain We can see that the food and beverage industry is very potential and promising in the future
5 Strategies to generate returns in the context of economic and industry conditions
a) Focus on 4Cs Commitment Strategy:
The 4Cs Commitment Strategy belongs to the corporation’s sustainable
development activities, including four pillars: promoting consumption, adapting environment conversation, bringing the country's pride, and supporting traditional culture This strategy forwards building the brand in the long run
b) Promote stakeholder engagement:
SABECO should take advantage of its collaborative and close engagement with all stakeholders based on trust, transparency, and mutual benefits They can be the strongest motivators in orienting substantial development as well as expanding the scale
The company continue to ensure the public annual disclosures are accurate and timely and must to update the relevant document within 21 days before the shareholders’ meeting for the research process Moreover, proactively communicating with investors and interested parties through emails, phones, and press releases to attract investment sources better is considered as one good measure
II Overview The Company’s Finance
3 The sight of the company’s main sources of income
a) Income classification by sales channel:
- Retail: SABECO’s retail system is distributed throughout 63 provinces and
cities across the country with more than 600.000 outlets
Trang 9- Wholesale: SABECO has a wide wholesale network with 1 master trading
company, 10 regional trading companies, 26 Subsidiaries, and 18 Associates and Joint Ventures
- Export: SAB promotes export products to overseas markets, currently
accounting for only 2% of total income SAB planned to promote the export Saigon beer and 333 beer Up to now, SABECO has exported Saigon Beer products to many overseas markets, including:
+ The Americas: USA, Canada, Chile, Panama…
+ Europe: Denmark, Germany, France, Netherlands, Sweden, Switzerland,
Spain, Russia, England, …
+ Oceania: Australia, New Zealand
+ Africa: West Africa
+ Asia: Laos, China, Japan, Taiwan, Korea, Singapore, Philippines, Hong
Kong, Malaysia, Cambodia, Thailand,
b) Income classification by distributions channel:
SABECO has two main distribution channels: on-trade and off-trade Under the impact of Decree No.100 and Covid-19, off-trade became the main driver for the growth
of SABECO, while income from on-trade was almost equal to zero during social distancing
c) Income from business activities:
- Beer: Saigon beer, Gold Saigon, Chill Saigon Special, Saigon Export, Bia
Saigon Lager, Beer 333, In particular, SABECO's Saigon Beer has been the leading brand in Vietnam for many years This is the product group that accounts for SABECO's largest output Therefore, this source of income accounts for the majority of SABECO's total income, with 86,30% in 2020
- Materials Trading: Materials Trading is the second largest source of income
for SABECO, accounting for 13,17% of total income in 2020
- Beverages: SABECO provides a lot of beverages such as Sa Xi Chuong
Duong, Sa Xi Chuong Duong, Nam Phuong Bird’s Nest Aloe Vera, Soda Chuong Duong, Bottled Drinking Water Chuong Duong, However, they account for only a small part of total income at 0,69%
- Wines & Liquors: Ruou Nep Binh Tay Rice Liquor, Nang Huong Rice
Liquor, Feel Cocktails, De Binh Tay Rice Liquor, John Saigon, Caravelle Red
Trang 10Rhum, This product group brings the lowest income, accounting for only 0,15% of SABECO's total income
III Analyze the financial report:
19.164.602
511.633
19.513.381.452.440
22.877.033.322.264
Current
liabilities
7.401.584.603.555
5.925.696
932.383
6.087.830.053.039
5.173.043.219
872
7.258.020.535.153
Current
Table 1.1 SABECO's current ratio in 5 years 2017-2021
The ratio grew steadily from 2017 and reached 3,77 in 2020 but reduced in 2021 However, SABECO still keeps it at a high value, which shows that the company is ready
to pay its debts and pretty worthy to be invested On the other hand, SABECO may have invested too much in short-term assets or in other words, the management of short-term assets could be not effective
14.690.168
205.219
19.164.602.511.633
19.513.381.452.440
22.877.033.322.264
Inventory 2.003.535.
067.335
1.813.754.190.894
1.967.137.719.907
1.446.832.994.933
1.668.001.734.209
6.087.830.053.039
5.173.043.219.872
7.258.020.535.153
Table 1.2 SABECO's quick ratio in 5 years 2017-2021
As can be seen from the table, the quick ratio is much bigger than 1, which shows that SABECO 's solvency is still good, inventory accounts for a low and insignificant proportion in 5 years, the company does not need to worry about liquidating inventory b) Comparing to the industry averages ratios and competitors’ ratios:
➢ Quick ratio
Trang 12➢ From these two charts above, we can come to a conclusion that:
The quick ratio and current ratio of SABECO is higher than HABECO and their industry in 5 years recently SABECO’s quick and current ratios are respectively 1,4 and 1,2 times bigger than the average industry over this period HABECO’s current and quick ratios are always lower than the average industry SABECO has a steady growth year by year, increasing and decreasing almost equivalent to its competitors
All the current ratios and quick ratios reduced significantly in 2021, with the amount reduced quite similar (appropriately 1,2 times) However, the ratio is bigger than
1, which means that the industry still has good development and businesses can pay the short-term debt
c) Reasons for the tendency of changes in liquidity ratios:
The decline in 2021 with the current ratio can be attributed to the increase mainly
in short-term trade accounts payable and other short-term payables Moreover, the increase in inventory leads to a decline in the quick ratio
2 Capital Structure ratios:
20.076.247.056.364
21.215.276.390.928
22.594.785.703.161
Total assets 22.013.689
.109.910
22.366.742.792.213
26.962.476.094.045
27.374.972.775.358
30.487.024.372.425 Total debt ratio 34,49% 27,96% 25,54% 22,50% 25,89%
Table 2.1 Total debt ratio of SABECO from 2017 to 2021
As can be seen from the table, 34,49% of the total assets of SABECO in 2017 belonged to liability resources This rate had a tendency to decrease to 22,5% at the end
Trang 13of 2020 However, there was a slight increase of 3,39% in the figure of the total debt ratio in 2021 This indicates the ability of financial independence of SABECO during the whole period was better, reducing the debt and increasing the liquidity of the company despite a slight growth highlighted in the timeframe ends
Total equity 14.420.526
.434.948
16.111.905.568.169
20.076.247.056.364
21.215.276.390.928
22.594.785.703.161
Table 2.2 Debt to equity ratio of SABECO from 2017 to 2021
SABECO’s debt to equity ratio in 2017 was 0,53 (lower than 1), meaning that its total liabilities was smaller compared to its owners’ equity The market celebrated a continuous decline in this ratio of SABECO over 4 years, standing at 0,29 in 2020 However, there was a slight increase of 0,06 times (6%) within 2020-2021, which could portray that the company was under financial difficulties during the year 2021
26.962.476.094.045
27.374.972.775.358
30.487.024.372.425
Total equity 14.420.526
.434.948
16.111.905.568.169
20.076.247.056.364
21.215.276.390.928
22.594.785.703.161
Table 2.3 Equity multiplier of SABECO from 2017 to 2021
The value of SABECO’s equity multiplier recorded a gradual decrease (from 1,53 down to 1,29) in the period surveyed except for the year 2021 This proves that SABECO started restricting capital mobilization from the external environment Nevertheless, the figure for SABECO’s equity multiplier increased by 0,06 times (6%)
at the end of the period
b) Comparing to the industry averages ratios and competitors’ ratios:
➢ Total debt ratio
Trang 15➢ As can be seen from the three bar charts above:
Regarding the debt ratio and the debt-to-equity ratio, there was a downtrend recorded in this figure of SABECO, HABECO, and the average industry during the first
4 years This proves that most beverage industry corporations restricted borrowing and started to pay debt accounts gradually In particular, the debt ratio of HABECO