Via "windscreen surmounting," Vinamilk reclaimed domestic market share.

DNHN - Vietnam Dairy Products Joint Stock Company (Vinamilk) disclosed that its consolidated after-tax profit amounted to VND 2,533 billion and total revenue of VND 15,681 billion, respectively, for the third quarter of 2023.

By overcoming "headwinds," Vinamilk increased its market share.

The company's sales operations are subject to the overall conditions of the fast-moving consumer goods (FMCG) and dairy sectors. AC Nielsen projects that the value of the fast-moving consumer goods industry will decline by 2% in the third quarter of 2023, relative to the corresponding period in 2022. This decline can be attributed to the deceleration in the purchasing power of consumer goods and services. Likewise, the dairy industry as a whole experienced a 4% decline. Nevertheless, Vinamilk's operating results remain superior to those of the entire industry, sustaining the company's regaining of market share.

Commencing in the third quarter of 2023, Vinamilk additionally executed promotional initiatives with the aim of augmenting product visibility in the media. A sequence of liquid milk products undergoes "redressing" to disseminate the effect of brand repositioning. The company intends to complete the packaging transition by mid-2024 and will continue to introduce new packaging for the remaining product lines in the subsequent quarters. Exceptional marketing initiatives have yielded favorable business outcomes for a multitude of brands. On average, the cumulative growth rate for the first nine months of 2023 was in the double digits for Ong Tho condensed milk and Sure Prevent adult powdered milk. Comparing the third quarter of 2023 to the corresponding period in 2022, sales of Super Nut 9-nut milk and Green Farm fresh milk increased by nearly three and two times, respectively.

Additionally, primary distribution channels continue to be stable during the third quarter of 2023. As part of a rebranding initiative, Vinamilk has recently introduced a new online shopping interface that partners with retail chains to promote demand stimulation programs, encourage consumers to shop, and enhance the purchasing experience. Comparing the beginning of the year to the end of the third quarter of 2023, the Company has expanded its Vietnamese Dairy Dream footprint by 11 locations, to 657 locations.

Foreign markets generated a net revenue of VND 2,384 billion in the third quarter of 2023, in addition to the VND 7,218 billion amassed in the preceding nine months. The export segment, which increased by 5% due to the recovery of several markets, was particularly noteworthy. The political climate and the markets in the Middle East and Southeast Asia are more stable than they were during the initial half of the year. Another encouraging indication originated from China, where Vinamilk entered into a collaborative agreement with two prominent enterprises specializing in import and distribution, to introduce dairy products to this market of billions of people.

Over the same period, the Driftwood branch in the United States maintained a strong foundation while the AngkorMilk foreign branch in Cambodia expanded by approximately 10%.

The consolidated gross profit margin increased by 243 basis points to 41.9% in the third quarter of 2023, compared to the corresponding period in 2022. This represents the most robust growth for the same period since Covid-19 (Q4 /2021).

As a result, consolidated profit after taxes increased by 9.1% to VND 2,533 billion in the third quarter of 2023, surpassing the corresponding period in 2022 and reaching its highest level since the third quarter of 2021. The consolidated profit after taxes for the nine months amounted to 6,669 billion VND, which is equivalent to the previous period's figure and fulfills 77% of the annual budget.

As of September 30, 2023, there was a substantial net cash balance. Moreover, during the twelve months ending September 30, 2022, the operating cash flow to profit after taxes ratio decreased, but it still stands at 1.1x, ensuring the quality of the company's profits.

Solidifying the standing of Vietnamese brands on the dairy industry's map of sustainable development

A collaborative effort between Vinamilk, the Gaia Nature Conservation Centre, and Ca Mau Cape National Park aimed to restore 25 hectares of mangrove forest at the southernmost tip of the nation in August 2023. This is an activity of Vinamilk employees as part of a large project called "NET ZERO VINAMILK FORESTS" that aims to form green areas to help absorb carbon. With an anticipated absorption of between 62,000 and 73,000 tonnes of CO2e, the initiative brings the Vietnamese government closer to its goal of achieving net-zero emissions by 2050.

In the past, this organization collaborated with the Ministry of Natural Resources and Environment to plant trees to reach Net Zero over five years (2023-2027). As of the second quarter of 2023, two of its facilities (the factory and the farm) had attained carbon neutrality by the PAS 2060:2014 standard.

Professional organizations have acknowledged Vinamilk's diligent pursuit of sustainable development. Brand Finance ranks Vinamilk first among the ten most sustainable brands in Vietnam and ranks as the sole Southeast Asian brand among the top five most sustainable dairy brands worldwide, surpassing numerous industry titans.

Vinamilk maintains its sixth position among the top ten most valuable milk brands worldwide and the top two strongest global brands in the dairy industry with a brand value increase of USD 3 billion. Additionally, Vinamilk was recently ranked as Southeast Asia's most valuable food brand. It is evident that, in addition to strength and value, the "sustainable development" component of the brand is a focal point that is garnering international attention and serves as an indicator of a sustainable, enduring enterprise.

PV