Topic analysis of nancial statements of vietnam dairy products joint stock company vinamilk

aS UEF UNIVERSITY OF ECONOMICS & FINANCE UNIVERSITY OF ECONOMICS AND FINANCE Topic: Analysis of financial statements of Vietnam Dairy Products Joint Stock Company - Vinamilk Members:

aS

UEF

UNIVERSITY OF ECONOMICS & FINANCE

UNIVERSITY OF ECONOMICS AND FINANCE

Topic: Analysis of financial statements of Vietnam Dairy Products Joint

Stock Company - Vinamilk

Members:

Student’s ID Trân Thị Bích Thủy

Dinh Thuy

Bui Thi Thuy An Pham Ngoc H Duong Cat Minh Thu

Lecturer: Tran Minh Tu

HCM City, 04/10/2024

Table of Concye

1 COmpany OV©IVỈOW cuc HH HH HH HH HH HH HT T HT 3

2 COmpany”S DOSIIOH ST HT HT HT HT Hàn TH TH TH TH Tà HT HT HT 4 8) Milk and dairy DrOCUGS HH HH HH HH HH HH Hành nrưện 4 BD) COImpGI[OFS HH HH HH HH hon 5

Il Sustainable developmernl ch HH HH HH ghi

` 5

8) COIDOFA[ÏOT LH HH HH HH HH Hàn 9 DD) LOCAD 10

Company typ{ Public joint-stock company

Industry Dairy products, juice

Subsidiaries e - CÔNG TY TNHH MTV BÒ SỮA VIỆT NAM

e - CÔNG TY TNHH MTV BÒ SỬA THỎNG NHẤT THANH HÓA

® - CÔNG TY CÓ PHẢN GTNFOODS

e CONGTY CO PHAN DUONG VIET NAM

e DRIFTWOOD DAIRY HOLDING CORPORATION

e ANGKOR DAIRY PRODUCTS CO., LTD

Milk and dairy products

Vinamilk is a leading company in the milk processing industry with 10,000 employees At the same time, Vinamilk is also the leading enterprise in many business fields in Vietnam with a market share of liquid milk of more than 54.4%, a market share of powdered milk of 40.6%, a market share of drinking yogurt of 33.6%, and a market share of yogurt consumption is 84.5% and condensed milk market share is 79.7% Not only has its domestic position, Vinamilk is also recognized by the world market Vinamilk is the only representative from Southeast Asia in the Top 10 most valuable global milk brands and Top 5 strongest global milk brands

After 48 years of operation, Vinamilk has a staff of nearly 25,000 people with

13 domestic manufacturing factories, spread across provinces and cities from North to South and 1 factory located in Cambodia Not only that, Vinamilk also has 14 dairy farms, 2 logistics enterprises, 8 affiliated subsidiaries both domestically and internationally and 5 sales office branches, 3 direct sales branches (Vinamilk, 2023)

- With the vision of "Becoming a symbol of Vietnam's leading belief in nutritional and health products to serve human life", Vinamilk carries the mission of "Committed to providing the community with top quality nutrition and quality." Leading with our own respect, love and high responsibility for human life and society" on the basis of promoting the core values "Becoming Vietnam's leading symbol of trust in nutritional products and Health serves human life"

b) Competitors

- By the end of 2023, the Vinamilk brand is competing fiercely with brands in the milk and dairy products, and juice/oeverage markets such as: TH True Milk,

FrieslandCampina, Abbott Nutrition Vietnam, Nutifood, Nestlé, Vinasoy,

Yakult, However, Vinamilk still maintains its foothold in this market with a nationwide sales system through traditional sales channels, including: 208 stores distributed with a retail point system of up to 250,000 points, at the same time Vinamilk also appears in most supermarkets and convenience stores nationwide, Vinamilk's "Vietnamese Milk Dream" store chain has also reached

654 operating points and connected to the online purchasing system on websites and e-commerce platforms (Vinamilk, 2013) With these numbers, Vinamilk has continued to dominate the Vietnamese Dairy market with a market share of about 50% in late 2023 and early 2024

thousand nutritional products of all KiNds* = 2% me es m= meme men mies ener $ E sem

with a total value of more than 1 billion Vinamilk chung tay chia sẻ khó khăn với

đồng bào miền Trung

VND to people in flooded provinces ¬

through the Fatherland Front Of QUANG „ sasacoseunnl

lụt đo ảnh hưởng bởi cơn bão số 4 và số 5, Công ty cố phần sữa Việt Nam Nam and Da Nang provinces and the Vinamilk) đã ứng hộ hơn 155 ngàn sản phấm dinh đưỡng các loại với tống

trị giả hơn 1 tỉ d6ng théng qua Mặt trận tố quốc các tỉnh Quảng Nam, Đã Nẵng và Sở giáo dục tỉnh Thừa Thiên Huế

Department of Education Thua Thien

Hue province That has contributed to helping people, especially children, be

somewhat assured of nutrition, physical support, and resistance so that they can feel secure in going to school and people can recover their lives after the flood

“A healthy life for returning to youth” 1s a series of practical health care activities for the elderly after the pandemic In 2022, Vinamilk consulted on health care and spread the spirit of positive and optimistic life to 10,000 elderly people in 27 provinces and cities nationwide

[OR aa”

Quy SUA VUON CAO VIETNAM

} LY SA YÊU THUONG, CHO MO HANH

On October 21, 2021, at the

Ministry of Labor, War

Invalids and Social Affairs, pp — oS

VND and 1 million glasses of

milk to support and care for

® vn TRE PM VIETNAM children in special

LỄ TIẾP NHẬN TÀI TRỤ circumstances, affected by

ra EM Bi ANH HUONG BOI DICH COVID-19

result of the campaign "Healthy

Friends, Healthy Vietnam"

carried out by Vinamilk and VTV_ Digital recently, with active response and participation from the community towards the goal of care and protection children during the pandemic With the spirit of not leaving any child behind, through the community campaign "Healthy Friends, Healthy Vietnam", Vinamilk donated 10 billion VND to the Ministry of Labor - Invalids and Social Affairs (LISA) to coordinate support for 2 purposes: Supporting funding to purchase Vaccines Covid-19 prevention for children and Support for children in special circumstances and affected by the pandemic

In addition, Vinamilk also donated 1 million glasses of milk to nearly 10,000 unlucky children in difficult circumstances through the Stand Tall Vietnam Milk Fund, a program that Vinamilk accompanied with the Vietnam Children's Fund in The past 14 years This is also Vinamilk's commitment when VTV Digital implemented the "Green Zone of Hope" project in phase 2 of the "Healthy Friends, Healthy Vietnam" campaign with the positive response of the Central Communist Youth Union Ho Chi Minh products The campaign brought the message "each person is healthy, Vietnam is healthy" to nearly 23 million users, recorded nearly 9 million interactions and especially, attracted nearly 170,000 participations from the online community Beyond the framework of a media campaign, "Healthy Friends, Healthy Vietnam" has become a bridge to bring love and "green zones of hope" from the community to children in special circumstances especially, difficulties due to the pandemic

In early May 2021, Angkormilk, a

subsidiary of Vinamilk in Cambodia,

supported 1,000 cartons of milk,

Vao dan thang 5/2021, Angkormilk, eng ty con cia Vinamilk tai Campuchia da h6 tr

1.000 thùng sửa, tương đương 48.000 hộp sửa eho những người đân sống trong “vùng

Angkormilk trao tén tay 1.0

cho ngudi dan va tré em

of milk, for people living in

the "red zone" of the Covid-

19 epidemic in the capital

Phnom Penh This timely support has helped people, especially children, have more necessary nutritional products to contribute to improving health and resistance during epidemics In the first 6 months of 2021, facing the new development of the epidemic, Vinamilk has continued to support 2 million nutritional products, equivalent to about VND 15 billion, to those affected by the pandemic, especially children In addition, Vinamilk has donated VND 10 billion to the Covid-19 Vaccine Fund, joining hands with individuals, organizations and communities to quickly bring vaccines to the people of Vietnam Since the outbreak, Vinamilk has donated a total of more than VND 65 billion to the Government's epidemic prevention and control activities and support the frontline, nutritional care for the community during the pandemic

On April 14, 2023 in Binh Lieu district, Quang Ninh, Vinamilk and the Vietnam

Children's Fund officially

ar Ny launched the Stand Tall

KHỞI ĐỘNG HANH TRINH

Cn + 16th year of this program In

Fund will continue to support nearly 17,000 children’ in

milk with more than 1.5 million boxes of milk with a value equivalent to 10 billion VND

Up to now, after 16 years of persistent implementation, the Stand Tall Vietnam Milk Fund has donated more than 42 million boxes of nutritious milk and sent love to more than 500,000 children across Vietnam with a total value of support up to Now

it has reached 200 billion VND It can be said that this is one of the nutritional care programs for children with the largest scale of support and is implemented long- term and regularly every year to create significant improvements in health and physical health nutrients for children through nutrition

to increase steadily from 2020 †O Giá nguyên vật liệu va logistics đột biến đang "ăn mòn"

lợi nhuận: Áp lực bao trùm ngành sữa và Vinamilk

2021 Hevenue increases by thương tru xng 5.90% (2020) and 2.16% (2021)

Profit after tax increased by ©

by 2.16% (2021) but decreases slightly by 1.538% (2022) Profit after tax decreases

by 5.34% (2021) and 19.36% (2022) The decrease in profits in 2021 was explained

by Vinamilk's board of directors due to the impact of the Covid-19 epidemic Prices

of raw materials, animal feed, transportation costs have all increased due to disruptions in the global supply chain and a sharp increase in the need to store goods

in some large countries Specifically, some important milk production ingredients such as skimmed milk powder have recorded a price increase of 30-40% in the period 2020-2021

- From 2022 to 2023, Vinamilk's revenue will decrease by 1.53% (2022) but increase by 0.67% (2023) Profit after tax decreases 19.36% (2022) and increases 5.10% (2023) Due to reasonable marketing strategies spanning from the first quarter to the fourth quarter, along with raw material price adjustments

and effective operating cost control in the second quarter

- So, after many years of ups and downs, continuous setbacks and reduced profits, Vinamilk has overcome and earned a significant amount of revenue for the company Continuous efforts have helped Vinamilk maintain its leading position in the market

* Fully perform tax obligations and other obligations as prescribed by the laws of the countries

¢ Economic development in localities

* Invest in facilities, contribute to the construction of local infrastructure

* Create jobs and vocational training for the local workforce

¢ Develop dairy farming

* Apply advanced science and technology in dairy farming in the world to Vinamilk's farms, contributing to the development of Vietnam's dairy farming

¢ Actions

-The farms are strategically located, scientifically connected to Vinamilk's most modern factory to ensure the quality of raw milk during transportation Dairy breeds imported from the US, Australia, New Zealand, 100% purebred and have a feed source of dairy cows that meet 100% Global G.A.P standards

-Vinamilk Green Farm farms all carry out organic farming, without using chemical fertilizers, pesticides and applying soil regeneration cycles to manage resources 100% of farms use renewable energy Modern waste treatment system and biogas technology help significantly reduce CO2 emissions, converting waste into resources In addition, the application of organic atomic carbon technology reduces methane emissions and odors in livestock

-In mid-2023, Vinamilk was also confirmed as the first dairy company in Vietnam

to have both factories and farms that achieve carbon neutrality according to Pas 2060:2014 standards, with 2 units, Vinamilk Nghe An Dairy Factory and Vinamilk Nghe An Dairy Farm Pathways to Dairy Net Zero 2050, demonstrating Vinamilk's commitment to environmental and climate change issues

3 Environment

a) Positive influence

*« In 2019: On the occasion of the 65th anniversary of the Capital's Liberation, Vinamilk together with the Ministry of Natural Resources and Environment and the Ministry of Labor, War Invalids and Social Affairs organized the Tree Planting Ceremony of the 1 Million Green Trees for Vietnam Fund for Hanoi City Vinamilk held a ceremony to donate more than 60,000 trees with a total value of about 1.1 billion VND and planted trees at preschools, elementary schools, and residential areas, especially near the existing waste complex Air pollution levels are quite high to improve the environment This activity will

help form green areas and shade landscapes for schools and contribute to improving the learning and living environment for students At the same time,

it helps students form awareness of environmental protection and living close

to nature In 2019, Vinamilk planted 800,000 trees in 22 provinces and cities, with a total value of 11 billion VND Vinamilk aims to contribute to improving and protecting the environment for future generations

From 2012 to 2020, Vinamilk and the Ministry of Natural Resources and Environment coordinated to implement the 1 million green trees fund for Vietnam at 56 locations in 20 provinces and cities with a total value of 12.5 billion VND This program is a typical example of efforts and actions for the environment, for life and for a green future

It is estimated that the solar energy produced by the farm will help reduce carbon emissions by about 6,000 tons per year, equivalent to planting 310,000 trees By early 2022, all Vinamilk farms will be installed with solar power In addition, other initiatives to help conserve soil resources and regenerate the soil include rotating legumes to restore soil fertility, farming according to organic standards and applying land management software Thanks to that, the soil becomes more porous, reducing erosion and providing a stable, high-quality feed source for livestock

By 2023, Vinamilk has completed the installation of solar energy at its headquarters, system of farms and factories with an installed capacity of 72.55 MWp, contributing to reducing nearly 85,000 tons of CO2, equivalent to equivalent to planting 4.6 million trees The proportion of green energy in Vinamilk's production activities has reached 87% of the total energy used Vinamilk is also a leading enterprise in sustainable development in Vietnam, considered an enterprise with good management of greenhouse gas emissions, good application of circular economy and a typical sustainable enterprise in Vietnam five consecutive years

b) Negative influence

« In 2020: Vinamilk's Ha |

Tinh dairy farm, located

Tinh province, is the

largest cow farm in the

and an investment capital

of 300 billion VND

Local people reported serious environmental pollution from this farm The surrounding air is surrounded by the strong smell of wastewater and cow

dung, affecting the Source: moitruongplus.wordpress

quality of drinking water and people's health Households living near the farm, especially within 1

km, said the odor spreads far and gets worse on windy days Photos from reporters show turbid black wastewater from the farm spilling into the sedimentation lake and nearby streams, polluting the water source Although Vinamilk has taken measures to treat waste, the pollution continues, causing people to call for authorities to inspect and handle it

Ill Stakeholder

1 Internal stakeholders

- Mrs Mai Kieu Lien

13

- Member of the Board of

Directors, Chairman of the

© Certificate in Economic Management, Leningrad

University of Economic Engineering, Russia

® Certificate in Political Management, National

Academy of Politics, Vietnam

@ Milk and dairy products processing technology engineer, University of Meat and Dairy

Processing Industry, Moscow, Russia

® Training certificate in Corporate Administration

awarded by the State (2006); Four times voted by Forbes as one of the 50 most powerful

businesswomen in Asia (2012 - 2015); Outstanding Corporate Administrator Award

(2014) voted by Corporate Governance Asia; Nikkei Award, New Zealand Asia Award

for her contributions; "Lifetime Achievement" award honored by Forbes for the first

® From 1976 to 1983, she held positions in many different departments at many factories

and became Deputy Technical Director - Thong Nhat dairy factory in 1982

- Mrs Mai Kieu Lien holds 0.31% of the company's shares, this is proof of her agency

costs with Vietnam Dairy Products Joint Stock Company In addition, she has not been

involved in any scandals in the company's management

- Mr Le Thanh Liem - Member of the Board of <`

Directors, Member of the Strategy Committee, = a\

Metropolitan University (UK) (2012)

e Bachelor of Economics, City University of Finance

and Accounting Ho Chi Minh City (1994)

- Mrs Bui Thi Huong - Executive Director of

Human Resources, Administration & Foreign

Affairs

© Bachelor of Russian Literature, major in

Interpretation, Orion National University

of

Foreign Languages, former Soviet Unio

(1985)

® Bachelor of Economics - Business Administration

and Trade Union, Trade Union University (2000)

General Director of Sales, member of the Board of Directors

- Mrs Bui Thi Huong holds 0.01% of the company's shares, this is proof of his agency

costs with Vietnam Dairy Products Joint Stock Company In addition, she has not been

involved in any scandals in the company's management

16

- Mr Alain Xavier Cany - Non-executive member

of the Board of Directors, Member of the Strategy

Committee and Member of the Audit Committee

management at many financial institutions

© From 2007 to present, he has held the position of

Chief Representative - Chairman of Jardine Matheson Limited Group (Vietnam)

© Between 2000 and 2003, he held the position of Head of European Business

Development - HSBC Asia Pacific, and then held the position of President and General

Director of the bank

e HSBC Vietnam (2003 — 2007)

e For more than 30 years from 1969 to 2000, he held many senior management positions

at Credit Commercial de France and Banque Worms financial institutions

e In addition, he also holds many positions as foreign trade advisor to the French government and is Chairman of Eurocharm, Vietnam Business Forum and a member

of the Board of Directors of Asia Bank

2 External stakeholders

« Customers

o Vinamilk's target customers

¢ Individual target customers

- This is a group of customers who have shopping needs and are willing to pay for good products, especially families with children from 0-6 years old This group has quite diverse product needs, such as good nutritional value, product quality, beautiful packaging, reasonable prices, ) accounting for a very high proportion of the total revenue of the business career

17

¢ Business target customers

- Vinamilk's corporate customers will be richer than individual target customers The first

is that Vinamilk provides products to distribution agents, grocery stores, and supermarkets But compared to individual customers, this group will have commitments,

contracts, profit percentages, selling prices, sales bonuses

- Next are organizations that consume products such as canteens, schools, and food stores The prices these units receive will also be more affordable than individual customers

- With an extremely large number of customers, stretching from all over the country, Vinamilk had to apply high technology in controlling the system A typical example is the use of CRM management software products to synchronize business activities

o How does Vinamilk take care of customers?

- Vinamilk's customer care process includes: receiving feedback from customers, classifying and processing feedback, resolving arising problems, evaluating service quality and creating relationships contact with customers

- Inaddition, Vinamilk also applies customer care support services via phone This service helps businesses create a wide connection network to meet customer needs Specifically, Vinamilk's customer relationship management system meets 10 outstanding features, including: transactions, analysis, planning, reporting and administration, contact management, storage and updates , project support, interactive space, contract management and administration

- The results that Vinamilk achieved were increased sales, reduced the rate of customers switching to competitors, increased customer satisfaction and created long-term relationships with customers

o Vinamilk's target customer-oriented product strategy

- With the canned milk product line - Vinamilk's core product line, customers with usage needs

will be able to buy different product capacities: from 110ml to 180ml cans according to need

In addition, Vinamilk always has promotional campaigns or giveaways with milk boxes that attract children to both collect and use as toys

- Vinamilk's milk flavors do not stop at the basic types but have been added to many new types such as almond milk, walnut milk, The elderly, people with blood pressure problems, and diabetes can also enjoy it Unsweetened sterilized milk without worrying about affecting your health

o Customer impact on Vinamilk

Customer satisfaction has contributed to building and strengthening reputation and helping Vinamilk's brand recognition become more widespread Through customer needs, Vinamilk has the direction to research, improve and develop better products Besides, loyal customers bring a stable source of revenue, helping Vinamilk maintain its leading position in the market This helps Vinamilk strive to improve product quality, creating a difference from competitors

+ With domestic raw materials: Vinamilk company sources milk from various local dairy farms Some of its major local milk suppliers include: TH Milk VS Milk Hafar Farms Quang Ngai Dairy Ba Hai Dairy Moc Ginny Dairy These suppliers are responsible for providing fresh milk to Vinamilk's processing facilities, which are then converted into a variety

of dairy products such as milk , yogurt, and cheese

+ Overseas suppliers: Vinamilk meticulously sources imported raw materials from countries renowned for their advanced agricultural practices, ensuring adherence to stringent international safety, hygiene, and quality standards Key suppliers include Fonterra (SEA) Pte Ltd, a leading provider of raw milk powder, Hoogwegt International BV, another significant source of raw milk powder, and Perstima Binh Duong, a supplier of packaging materials

+ To maintain the highest product quality, Vinamilk employs state-of-the-art machinery and equipment sourced from Sweden and other European G7 countries These systems are

meticulously controlled according to ISO-certifiied quality management standards, ensuring that every Vinamilk product meets the highest international standards

« Distributors

- Vinamilk owns a large distribution system, spanning 63 provinces and cities in Viet Nam and

exports to more than 80 countries entails

GIAC MO SUA VIET

around the world, ensuring

3 CHI NHANH BAN HANG

products reach consumers quickly

and effectively CUNG UNG DIEU VAN

MIEN TAY, MIEN TRUNG GAN 251.000

DIEM BAN LE TOÀN QUỐC HƠN 200

- Frequently exported items NHA PHAN PHỐI

include: baby milk powder, GIÁC MƠ SỮA VIỆT

KHO VẬN nox.e 9 ĐỐI TÁC

THUONG MẠI

nutritional powder, condensed

milk, canned milk, soy milk,

HE THONG PHAN PHO! CUA Q

1.356 =

CỬA HÀNG TIEN LOL

5 Promoting sports culture: Vinamilk organizes sports tournaments and cultural events to connect the community and promote healthy lifestyles

« Mass communication

- Vinamilk is known as one of the businesses with the most effective mass communication strategies in Vietnam Thanks to its methodical, creative and continuous innovation strategy, Vinamilk has succeeded in building its brand, attracting customers and consolidating its leading position in the dairy market

- Vinamilk effectively utilizes traditional and modern communication channels

to reach customers widely, including:

¢ Television: Advertise on national and local television channels, especially programs for families and children

Press: Advertise in reputable newspapers and magazines, especially publications for women and health

Internet: Online advertising on websites, social networks, mobile applications

¢ Outdoor advertising: Billboards in city center locations and crowded areas

¢ Promotional activities: Promotional programs, minigames to attract customers to

experience the product

- Resolution No 4655/QD-UBND, approving the project to develop corn production in Nghe

An province for the period 2015-2020

- Resolution 4222/QD-UBND, on approving the project on developing livestock farming associated with processing and consumption of products in Nghe An province for the period

2021 - 2030

- Resolution 4288/QD-UBND, on approving the "Project on developing key agricultural products of Nghe An province for the period 2021 - 2025, with a vision to 2030"

IV Analysing the company

1 Analysing the ratios

Current assets are 1.71 times more than Current liabilities in 2019; 2.09 times in 2020; 1.84

times in 2021; 2.06 times in 2022 and 2.10 times in 2023 This shows that Current assets are enough to cover Current liabilities for 5 years The index tends to increase over 5 years as well However, the Current ratio index in 2021 decreased slightly (1.84) due to the impact of the COVID-19 Pandemic Vinamilk's business activities are also affected by social distancing measures, causing supply chains to be enhanced, transportation costs to increase, and people's consumer demand for certain dairy products to decrease due to people tightening their spending In general, the trend of the index increasing and being much larger than the industry average (1.58) is good and shows that businesses own more assets and less debt Businesses need to maintain the index

* Quick ratio

Quick ratio

@ Ratio 1,74

The average inventory sold to the market is 5.97 times in 2019, 6.52 times in 2020, 5.11 times

in 2021, 6.51 times in 2022 and 5.85 times in 2023 The trend of increasing and decreasing is uneven over the years and is larger industry average (4.51) This shows that Vinamilk sells inventory ineffectively and inventory is sold slowly Vinamilk is also aware of the importance

of technology-based inventory management, applying inventory management software to improve work efficiency However, applying the EOQQ model to Vinamilk’s inventory management also causes the company to encounter a situation of scarcity of goods and raw materials if the forecast of consumer demand is inaccurate Therefore, businesses need to push inventory through incentive programs, advertising, dealer discounts and e-commerce

» Average age of inventory

25