[Analyst]: Good morning, everyone. Thank you for taking your time to join the analyst session meeting with the IR team. Today, we have Ms. [inaudible], Finance Management Director, and me from the IR team. First, the agenda would be, we will start with some brief about the business performance of Q3 and 9M 2026, and then we will move directly with the Q&A session.
[Company Representative] (Vinamilk): All right. On behalf of the company, it is actually my pleasure to present our business result for the third quarter and also the first nine months 2026. We sincerely appreciate your attendance and also your continued confidence in Vinamilk. It is our hope that today's session will offer a clearer perspective on our performance, some of the perspective of our growth driver, and also the strategic priority moving forward, right? I think for this quarter, our central message, we focus on the growth, is being underpinned by the efficiencies and also the long-term value creation. We continue to advance the product innovations, market development, and also operational efficiency, guided by the financial discipline and also the prudence management, right? Our objective is to extend beyond the result of every single period. We are committed to strengthening the foundations of the sustainable growth in the years ahead, right?
[Company Representative] (Vinamilk): I think we would like to actually just quickly jump into the third quarter and also the 9M result, right? On the screen, you can able. Just give us a moment if the screen is actually presenting. All right. Okay, cool. I think we will actually begin with the key result in the third quarter. As you can able to see on the slide, consolidated total revenue VND 18,472 billion, an increase of 8.7% year-on-year, while consolidated profit after tax VND 2,962 billion, up 18%. For the first 9M, total revenue VND 53,506 billion, an increase of 14.4%. And consolidated profit after tax VND 8,605 billion, up 30.6%. A key result present for you today is actually also represent the 80.5% of the company's full year total revenue target and 87.6% of its full year profit after tax target.
[Company Representative] (Vinamilk): I think it is actually a significant result, and that will be actually reflecting a combination of our effective in term of the product innovation, our sales channel development, and also the enhance of the operational efficiency. The value added and also the specialized nutrition product continues to be very well received by the consumer. At the same time, we sustain our investment in brand and market while maintaining a very rigid cost control. Maybe would like to actually share with everyone in term of the domestic perspective. In the domestic market, we continue to reinforce our core category while expanding our value-added product offer. Green Farm and also the specialized nutrition product as areas of development, contributing to the highest quality growth and stronger brand value.
[Company Representative] (Vinamilk): We continue to innovate our products to address evolving consumer needs, including the high protein, low sugar, lactose-free, and also the requirements of very specialized nutrition. In parallel, we are expanding the modern trade, e-commerce, and Vinamilk store to broaden our consumer reach. In sales, our approach is emphasis to the roles of each channel. Traditional trade remains very core and also the main contribution, while modern trade, Vinamilk store, and also e-commerce are being developed to the reach of wider of the customer base, right? We also actually record big growth in term of our Vinamilk store and also the e-commerce, right? Now, would like to also share a bit of the perspective in term of the international visit as well, right? We continue to really develop our export operation and overseas subsidiary.
[Company Representative] (Vinamilk): Our priority is to sustain our presence in the existing market while also looking for an opportunity for us to diversify our source of market and also the source of growth over the long period. The Middle East remain an important contributor to our export mix. However, the international trade environment remain volatile and demand in recovering uneven across the market, right? Accordingly, we are maintaining our presence in the existing market while expanding the selective into new ones with a view to diversifying our long-term growth source, right? Turning a bit of talking about and focus on the profitability. In Q3, gross margin was 41.4% and consolidated profit after tax margin was 16%. For the first 9 months, this margin were approximately reaching about 42.5% and also 16.1% respectively.
[Company Representative] (Vinamilk): Raw material cost have been actually extend the pressures on the Q3 margin, and therefore, we actually remain focused on the product mix as well as the operational efficiency in order to support the profitability. In the response, we are proactively managing the supply, optimizing our product mix, and enhance the operational efficiency, right? Price, as you can able to aware of the market right now, for most of the raw mat have been actually secured throughout the year end. The key stock for the raw mat which we have been also sharing with you in the past is the- The strategies of the supply trail have been being agreed and also being hedged for upon 3 to 6 months ahead of the time, right? It's to making sure that it can able to provide the company with the retail visibility for the production plan.
[Company Representative] (Vinamilk): Nevertheless, I think we actually continue monitor the impact of the raw milk, also the another logistic cost and also another changes in term of the visit environment, right? We will be also continue manage our selling expense closely while sustaining investing in our brand and market development. Whatever we actually spend, we actually take into the considerations of accessing our ROI, ensuring the spend remain aligned with our growth. As today, meetings, we are not providing any new picks for the full year expand ratio, right? Now, we would like to actually move on with a bit of the perspective in term of the financial positions and also the capital allocation. As you can see from the slide, right, at 30 September 2026, a consolidated total assets shown up at VND 57,892 billion.
[Company Representative] (Vinamilk): Cash and cash equivalents and our short-term financial investment total approximately VND 26,538 billion, accessing our borrowing of about VND 8,482 billion. These positions have actually demonstrated our higher liquid financial result, accessing our borrowing, providing the uncap capacity for our operations and also investment. However, it is actually a quick note that it should not, however, it is being integrated as a cash available for the contribution. The company also actually has to make sure that we meet the working capital requirement and also another payment obligation. Return in both asset and also capital improved year on year, as you can see from some of our index on the screen. Based on the last nine-month period, ROA was approximately 15.5%, ROE was 23.7%, and ROIC was 19.6%. This improvement is really reflecting a stronger earning generating from our assets, equity, and invested capital.
[Company Representative] (Vinamilk): We remain committed to earning quality and discipline capital allocation in order to sustain this return over the long period. I think that is actually the quick recap in terms of our financial performance. The next one, I think we also actually like to quickly run through our ESG initiative and also the path. In terms of the story about sustainability, our efforts are concentrated in three areas: reducing our environmental impact, promoting the circular economy, and also creating the value for communities. In terms of the environment, the Vinamilk Net Zero Forest Program continues intact. The activity in Cà Mau and also Cúc Phương National Park is still continuing, and we have been actually receiving very positive feedback overall.
[Company Representative] (Vinamilk): In support of the sustainability and also the circular economy, we have continued seeing the "Vỏ Xinh, Vỏ Xinh." I think the core translation to English is giving the carton a new life. We have actually collected and recycled the milk carton nationwide while promoting the responsible consumer. The company also actually collaborates with a lot of different stakeholders to share Green Farm and also the circular productions practice to very delicate forums. Overall, in our community initiative, the Vươn Cao Việt Nam Milk Fund has reached its 19 years of operation. This year, the program has committed to donating about 500,000 cartons of the fresh milk to nearly 11,000 disadvantaged children. In addition, the company continues to implement nutrition and healthcare support programs for children, elderly people, and some vulnerable groups.
[Company Representative] (Vinamilk): This is actually all of the slide that we have. Our Q3 and 9M results are reflecting very positive growth in both revenue and profit. Looking ahead, we remain committed to quality of growth through the activity and also initiative of product development, market expansion, and a greater and much more efficiency in terms of our operation. I think we would like to actually spend more of the time to answer some of the questions from the chat box.
[Analyst]: We also welcome that you can open the mic and ask questions if you like. First of all, we received a question in the chat box. I am a shareholder of Vinamilk, would like to ask about the numerous Vinamilk stores. Are there any information on the profitability of these stores? When I pass by these stores, they are mostly empty.
[Company Representative] (Vinamilk): Okay. I think this is actually, we have just celebrating the milestone of 1,000th store in September, right? Early of September, we are celebrating the 1,000th milestone store of Vinamilk. In term of the profitabilities of these stores, they will be actually being addressing based on its size, right? As you can able to see, we have strategized and opening of our store in the different size, to making sure that we can able to meet the demand of that particular locations where the store have been actually operate, right? In term of the profitability, we actually keep track and also monitoring the EBITDA of the store instead of the net profit, right?
[Company Representative] (Vinamilk): Because as you know that from the initial investment perspective, the payback to opening of our store will be actually quite heavy and have been actually depreciated throughout the period, and definitely for the first few years of the period. We are yet to really looking into the net profit, but every single store have been actually turning out to become EBITDA positive.
[Analyst]: The second question is that, what is the split between the whole milk powder versus skim milk powder? How much they contribute to the cost, and how is the outlook, and how are you managing the price hedge?
[Company Representative] (Vinamilk): Okay. Whole milk and raw milk powder, I believe that you are actually referring to the fresh milk, right? As you know that we actually have close to about 1,000 SKU available, and we do actually have a difference and also kind of like very variety in term of our raw mat being used. Vinamilk have been actually leverage on our ecosystem where we have been the farming system as well. And currently now, the farming system have been actually able to produce and also support in term of the demand for the fresh milk for all of our range of the liquid milk available at the moment.
[Company Representative] (Vinamilk): In term of the whole milk powder, as you know that this is actually based on a market price, and it have been actually raising starting end of 2025, and also starting on the Q1 of 2026, you can able to actually seeing the trend of the price have been actually increasing, right? In term of contributions for the cost, what we can able to see because of the self-sufficient in term of the fresh milk, a certain amount of the whole milk that we actually imported from New Zealand, right, and also from Australia, where we actually source the most of our milk powder. We are still seeing that it is actually insignificant in term of the impacting, right? The outlook will be actually continue, we try to actually secure and also ensuring our stock available for different ingredients between three to six months.
[Company Representative] (Vinamilk): In term of the price, this is actually something that we want to making sure that we can able to actually strategize in term of the supply and demand. What exactly we want to making sure is we are looking into maintaining a very stable gross profit overall.
[Analyst]: Why is the whole milk and skim milk price diversion?
[Company Representative] (Vinamilk): This is actually the reactions of supply and demand.
[Analyst]: We also have the question that is in the chat. What is the CAPEX for this year and next year?
[Company Representative] (Vinamilk): Okay. Our investment into the CAPEX is actually also to making sure that we can able to maintain a sustainability of growth. As you can able to see that for the last 5 years, or even actually for 2026 as well, our CAPEX investment is actually ranging between 2.5% to 3% of our revenue.
[Analyst]: Can I ask about the Vinabeef performance this year and when is it profitable?
[Company Representative] (Vinamilk): Beef, our business currently makes insignificant contribution to the consolidated revenue. It is not yet profitable due to the high operating cost because we have actually just started to commercialize for the last two years. The company continues to monitor operations efficiency and also to assess the visit development potentials. We have not made any commitment regarding to timing of the break-even or the profit contribution in the upcoming period.
[Analyst]: Until when has Vinamilk hedged raw material costs for the whole milk powder and skim milk powder?
[Company Representative] (Vinamilk): For all of the key raw mat and also, which is like significant contribute to a certain SKUs of our production, we all were actually placed suppliers, and we not really actually play, but we actually strategize to making sure that the stock availability between three to six months.
[Analyst]: What is the overall performance of the consumers in Vietnam right now for the industry?
[Company Representative] (Vinamilk): Okay. We are actually seeing the recoveries of the consumer demanding, as you can able to see that it is actually really reflecting our 2-digit growth year-on-year for this year.
[Analyst]: Can you guide the EBITDA in Q4 and 2027?
[Company Representative] (Vinamilk): Well, that will be actually quite stable and also actually reflecting on Q2 and Q3. That will be actually the guide for the gross margin. However, the target, what we actually also want to make sure that we can able to actually watch out and continue monitor all of the visit changes from the policy to the forex to the availabilities of all of our raw mat input.
[Analyst]: Regarding to the newly restructuring sales team, does the company plan to expand the headcount of the OS or outlets in coming quarters?
[Company Representative] (Vinamilk): Okay. Restructuring of the sales team happened in Q1 of 2025, right? We have been actually very stabilized and expanding the team upon the demands of opening of our shops. In fact, I would like to actually share a bit of the perspective that the Vinamilk store is actually not 100% owned and operated by Vinamilk, right? We actually have franchised our shop and being operated by our business partner as well.
[Analyst]: What caused the export revenue to drop 10% year-to-date in Q3, and which markets are currently the main contributor? That leads to the problem with the Strait of Panama and Brexit. What is Vinamilk's forecast for the export revenue growth?
[Company Representative] (Vinamilk): I think our export revenue has not dropped. We are actually increasing, and overall, it actually increased two-digit number, right? Middle East is still actually our main market contributor to the total revenue. However, we would like to also be very diversified and also looking for new opportunity to the potential market out there. What will be actually the trend, as you can see that we are increasing our export revenue and also activities to Korea, Japan, right, ASEAN country. That will be actually, we can see that it is a huge demand overall in terms of the export.
[Analyst]: Are there any plans to introduce the juniorly high-protein Greek yogurt competing with the international brand rather than the regularly Greek-style formulation?
[Company Representative] (Vinamilk): The Greek style and also the new launch product that we have, I think the Greek style has been actually launched about 3 months ago. That is actually contain a high protein. It is a high protein product.
[Analyst]: Besides the alternative shipping route to the export to the Middle East, is the company seeking new export market to reduce reliance on this region?
[Company Representative] (Vinamilk): We are looking for the alternative route to making sure that our continue supply of the product to the customer without any interruption. However, from the beginnings and also starting the initiative of discussion with our existing partner, we have been actually switching from CIF term to FOB term to making sure that we can able to actually managing the risk due to the logistics.
[Analyst]: Given that the Thailand-Cambodia tension has supported the Angkormilk performance, does the company expect this as a short-term timing or the sustainable long-term factor?
[Company Representative] (Vinamilk): Okay. Whatever the conflicts of the borders that you have been mentioning, it is just one of very final factor. However, if you actually have been watching out and also been continuing to support Vinamilk for the last maybe 10 years, you have been able to see that we have been operating Angkormilk in Cambodia. Sorry, from Cambodia. It is actually for more than 10 years, right? We just celebrated 10 years, to be honest, right? From now, it is actually more than 10 years, which is correct. We have been actually heavily investing into that, including our factory, reopening the two new Vinamilk stores there. That is actually really reflecting our commitment in terms of the investment in the market, right?
[Company Representative] (Vinamilk): What we are actually seeing is we are seeing the demanding of the market in terms of the fresh milk, high protein, and also the condensed milk. In fact, that is actually a result of our investment for the last 10 years in Cambodia, in system, just the conflict. We can able to really see the sustainables of the growth in that market as well.
[Analyst]: When is the proposed selling price increase expected to take effect, and for which specific product lines and categories?
[Company Representative] (Vinamilk): Okay. In terms of the pricing strategy, we take into the considerations of the elasticities of the pricing range that how much and what will be actually the SKU that we can able to increase, right? Now, the benefit of Vinamilk is because we are having the mixed portfolio, which can able to support us in terms of the pricing. What you can able to see is to a certain extent, there will be actually a few SKUs as we have announced in Q1 during our AGM that we are raising the price for about 3% to 4%, right? But in fact that we can able to continue maintaining the efficiencies of our production, right? Where we can able to also leverage on our supply chain strategy, and we believe that pricing raising is not necessary at the moment.
[Analyst]: Could you share the percentage contribution of your premium products to total revenue and provide color market product characteristics? Also, what are the key margin range of these premium products compared to the mass market products?
[Company Representative] (Vinamilk): Okay. Premium product, I think you currently now actually referring to the Green Farm, right? Green Farm is actually standalone branch that we actually being invest into the product innovation and also one of the branch that we believe that we can able to scale up for the premiums product. In fact that, currently now, Green Farm have been actually just launched about less than three years, right? Close to three years, right? And that is still actually contribute less than 10% of our total revenue at the group level.
[Analyst]: Does pricing the average selling price pose the risk to the sale volume or market share, considering the current competitive landscape in the dairy industry?
[Company Representative] (Vinamilk): Which one? Sorry, I'm not quite clear on the question. Which question is that? Which one? Oh, okay. In fact that, our average selling volume have been actually also increasing, right, years on year. And that's also actually one of the key contributor in term of our two-digit growth for this year.
[Analyst]: What is the projected cash dividend policy for this year and next year, and will there be any change compared to the previous year, especially given the company's confidence in beating the profit target?
[Company Representative] (Vinamilk): Well, for dividend policy, we are committed to stick and remain a very stable dividend policy. Then, what we actually have been agree and also have been approved by our board is to maintaining at least the equivalent to 2025.
[Analyst]: Can you share the revenue breakdown for the first ratio between the GT and MT channel and the growth rate of each channel in Q3 and 9M?
[Company Representative] (Vinamilk): Okay. Revenue in traditional trade increased approximately between 2% to 3%. Modern trade and also Vinamilk store and the rest of others, we actually expected to growing two-digit number. For the H1, as you can see that because traditionals and also have been actually being there, and that is also actually reflecting the behaviors of our consumer that more people have been actually switching into the modern trade and also e-commerce.
[Analyst]: Could Vinamilk provide its view on the area growth rate and its impact on the imported skim milk powder?
[Company Representative] (Vinamilk): Hmm? Which one? Oh, I think that is also actually one of the impacts that we see in terms of the pricing for all of the skim milk powder and whole milk powder, right? The price, if you are actually referring to the market price of skim milk powder and whole milk powder, it has been actually increasing about 10% to 15%, right? For in terms of the pass-through the cost increase to the consumer, I think that is actually also reflecting into our pricing strategy. One of our strategy that we have been actually leverage on our operations efficiency, our supply chain strategy, where we believe that we should be able to actually monitor and also maintaining our gross profit margin.
[Analyst]: Could you share your expectation for the Q4 revenue growth and the key growth drivers?
[Company Representative] (Vinamilk): Okay. I think in Q4, we actually expect it to be very stable and also almost similar like Q3.
[Analyst]: Will Vinamilk be heavily impacted if the sugar price are expected to rise high and the current cost to sell right now?
[Company Representative] (Vinamilk): Okay. Sugars, as you know, let's say we are talking about the trend and also the consumer behavior and reflecting the demanding, people have been actually talking about less sugars right now. Also, sugar have been actually not really a key raw mat input for Vinamilk, hence it is not going to be actually impacting.
[Analyst]: We are still waiting for more questions.
[Company Representative] (Vinamilk): Yeah. We are open the mic for everyone who would like to speak up.
[Analyst]: Can you share the breakdown of the export and how much does it come from the Middle East alone?
[Company Representative] (Vinamilk): Okay. For the Middle East, still actually contributes between 45% to 50% of our export revenue. We are seeing the increasing in the ASEAN country, where we can see really a two-digit growth quarter-over-quarter and also year-on-year. The rest of others markets like Africa, the US, and also the North America is actually quite stable.
[Analyst]: Are there any significant exports to the China market?
[Company Representative] (Vinamilk): We do export to market where there is actually the demands of condensed milk and also milk powder. Liquid milk, we also actually have. What we are actually seeing the trend is the highly demanding in term of the drinking yogurt and also yogurt.
[Analyst]: Why was the Middle East so successful? Can you share more detail?
[Company Representative] (Vinamilk): Well, I think this is actually also reflecting the Middle East geography as well as the political and also the productions over there. So, what we actually have been very successful because we actually focused on we first is actually focused on the infant formulas, right, where we have been introduced the infant formula to the Middle East country for the last 30 year.
[Analyst]: Can you share Vinamilk's market share by product categories?
[Company Representative] (Vinamilk): Market shares of Vinamilk is really actually diversified and also varies by each category. As you know that in dairy, we actually have liquid milk, we are having the instant milk powder. We also actually have yogurt, right? However, I think from the perspective of condensed milk, we are actually as the market leader, right? Overall, I think we can able to actually just give a ranking, so a few key contributors. Son?
[Analyst]: For the liquid milk and the condensed milk, we are the top one.
[Company Representative] (Vinamilk): Yeah.
[Analyst]: For the spoon yogurt, right now we still have had. We gained back the market share, but the competition in the dairy industry right now is quite tough because we have compared with NutiFood, which they do a lot of the promotion for the spoon yogurt as well. For the instant milk powder, we also gained back a little bit of market share because the competition with the international market still affected. The probiotic drinks and plant-based without the soy until we did that, we hit the high growth of our key in our product portfolio. Could management comment on the medium-term net margin target and provide your perspective on current competitive landscape as the new players enter the market?
[Company Representative] (Vinamilk): Medium-term net margin target. Okay. I think the net margin market is actually contributed by more factors in terms of only the gross margin, right? Net margin is also actually we are talking about the production, efficiency, suppliers, supply chain, strategies, right? In term of the midterm, we are actually carrying out workings and preparing our 2027 plan. However, right now it is still actually quite premature for us to share the stance, right? We will be actually announcing in Q1 of 2027 in term of the 2027 budget. Okay. Maybe share a bit in term of the perspective in the reflex of very competitive landscape right now. I think it is actually what we have been expected, right? Because Vietnam's market has been growing, and we do expect that the market is going to open for all of the player, right?
[Company Representative] (Vinamilk): From small to medium to the champions and also the leader market players. What we actually have been really confident is a certain differentiation and also the local brand is really actually something that is difficult to replicate because Vinamilk has been in the market for 50 years. We are very confident in term of our product innovation and also we can really understand the requirement from the consumer. As you know that the trend right now, we are talking about a plant-based product, high protein, lactose-free, right? Very specialized in term of nutrition. That whole range of product is available in our store, even actually in MT channel, in many different channels available. Being able to actually reach to the certain segments of the consumer place.
[Analyst]: We have 5 minutes for Q&A session.
[Company Representative] (Vinamilk): Not to worry that you do not want to actually ask the question in a comment forum, but we very welcome everyone to actually schedule private sessions with IR team. I think that will be actually a very private conversation that we can have and being able to answer on certain levels of detail.
[Analyst]: Thank you everyone for this is also the end of the Q&A session. Thank you for your time joining the analyst today, analyst meeting today. We appreciate your continued interest and support. If you have any follow-up questions or require further detail, please feel free to reach out to our team, which is the IR team. Thank you again. We look forward to update you on our next quarters. Have a great day.
