VIETNAM RECORDS GROWTH SLOWDOWN IN Q1’16

Higher CPI growth vs. Q1’15

GDP Q1’16 but still low
6.9
5.5% 4.8
vs. YA CPI Q1’16
0.7 1.3
Driven by slowdown of Agriculture, Forestry
+1.3%
& Fisheries, Industrial & Construction vs. YA Q1'13 Q1'14 Q1'15 Q1'16

GDP % growth vs. YA breakdown by Sector

Vietnam is also impacted by
8.7 6.7
6.1 5.5 5.7 6.1 global economic difficulties
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2.1
16.3 12.0
6.9 8.1 4.1
-1.2
GDP Industrial & Services Agriculture,
Construction Forestry &
TRADE -4.8
Fisheries SECTOR EXPORT IMPORT

Q1'15 Q1'16 Q1/15 2015 Q1/16

Source: Government Statistics Office (2016) 2

 RELIANCE ON EXPORT MAKES OUR INDUSTRIAL
SECTOR SENSITIVE TO GLOBAL TURMOIL
Slowdown of Industrial sector is driven EXPORTS SOFTEN DUE TO:
by both Mining & Manufacturing
% Growth vs. YA by Sub-sector IMPACT FROM REDUCED DEMAND
FROM OTHER ECONOMIES,
ESPECIALLY CHINA
9.5 9.9
6.7 7.9
4.4

-1.2
Coal ↓ 93% Chemicals ↓ 14%
Mining & Manufacturing Construction
quarrying
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Q1'15 Q1'16
COMING FROM SLOWDOWN OF : SHARP DROP OF OIL PRICE

OIL COAL COMPUTER & Crude Oil ↓ 53%

ELECTRONICS
Source: General Statistics Office (2016) 3
 STILL A DIFFICULT YEAR AHEAD FOR AGRICULTURE

□ Affected Areas
CROPS comprise half of
agriculture production value,
49% with main products such as rice,
pepper, coffee, cashew nuts…

IMPACT OF DROUGHT & SALTWATER INTRUSION ON CROPS

• Start: Late-2014 due to El Nino phenomenon

• Areas: from South Central Coast to Mekong Delta
• Damage:
 Food/water shortages
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 Agricultural land damage

39/63 US $232m
2.3 MILLION Estimated total
provinces
People affected damage to
affected
agriculture sector

Source: General Statistics Office (2016), “Vietnam: Drought and Saltwater Intrusion Update” by United Nations Vietnam (2016, Apr) 4
 RETAIL VOLUME GROWTH STILL MUCH HIGHER THAN
2014 YET SLOWING DOWN

Retail Sales Growth Y-O-Y (inc. Services)

12.6

10.7 11.1
10.2 10.6
10 9.8 9.8 9.5 9.1
5.6

5.1 5.7 6.2

6.3

9.2 8.3 8.4

9.1 7.9
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7
5.1 5 4.9 4.3

0.8 1.5 1.1 1.2

0.7

Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16
Unit change Retail Volume Sales Retail Value Sales

Source: General Statistics Office (2016) 5

 FMCG GROWTH REMAINS POSITIVE, A BIT SLOWER

Fast Moving Consumer Goods dynamics - Total 6 cities

8%
5.7%
6%
4.5%
3.7% 3.4% 3.6%
4% 3.1%
2.2% 4.9%
1.1% 1.8% 3.6%
2% 2.8% 2.9% 3.0%
0.5% 0.5% 0.9%
0.5%
0.0%
0%
-2.0% -1.9%
-2%
-5.2%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.

-4%

-6%

Unit value change Volume change Nominal growth

Source: Nielsen Retail Index – Versus year ago 6

 BEVERAGE IS STILL SHINING STAR, DRIVEN BY BEER

Super Category Contribution and Growth - Total 6 Cities

39% 15% 16%

BEVERAGE FOOD MILK BASED

8.2%
9.7% 9.6% 9.9% 9.7% 10.0%
6.7%
7.3% 7.7% 8.1% 3.7%
6.9% 8.1% 8.1% 4.7% 2.6%
5.2%
-2.5% 3.0%
-4.4% 0.9%-3.8%
-0.9% -0.6%-0.1%
-1.3%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.

-3.0% -3.5%

Unit Value Change Volume Change Nominal Value Growth

Source: Nielsen Retail Index – Versus year ago; % is value contribution to Total FMCG MAT TY 7
 WHILE OTHER CATEGORIES STILL STRUGGLE

Super Category Contribution and Growth - Total 6 Cities

6% 8% 13% 4%
HOME CARE PERSONAL CARE CIGARETTE BABY CARE

7.1%
6.9%
6.1%
4.5% 3.9%
2.1% 4.0%4.1%
6.3% 5.6% -0.1% 0.6%
-0.6% -0.3% -0.8%
3.4% -1.4% -2.8% 2.8%
-4.0% -3.7%
-0.4%
-5.9%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.

-5.0% -10.8-11.2
-5.2%-4.8%
% %

Unit Value Change Volume Change Nominal Value Growth

Source: Nielsen Retail Index – Versus year ago; % is value contribution to Total FMCG MAT TY 9
 CONSUMERS ARE CAUTIOUSLY OPTIMISTIC

CONSUMER CONFIDENCE INDEX (CCI) RETAILER CONFIDENCE INDEX (RCI)

+6 +1
106 112 104 105 108 109

71 72 76 75 74
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Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16

Consumer Confidence Index Calculation Retailer Confidence Index Calculation

• Perceptions of local job prospects • State of retail industry
• Perceptions of state of personal finances over • State of retailer’s own business
the next 12 months • Stocking intention in the next 12Ms
• Perceptions of good/bad time for people to buy
the things they want and need over the next 12
months
Source: Nielsen Global Survey Consumer Confidence Section (Q1’16), Retailer Sentiment Report Q1’16 10
 AFTER Q2’16, FUTURE STILL LIES MANY CHALLENGES FOR
MANUFACTURERS
Copyright ©2012 The Nielsen Company. Confidential and proprietary.

• EXPECTED AVERAGE FORECAST as the most likely scenario , 95% chance will be within 2-3% of this scenario
• EXPECTED MAX FORECAST most likely happens in optimistic market, with the signal of:
• Big increase in FDI.
• Strengthening Forex
• Big increase in consumer confidence.
• EXPECTED MIN FORECAST most likely happens in pessimistic market, with the signal of:
• Recession – 2 periods of declining GDP growth
• Tax hikes – introduction of GST, gas prices tax increase
• Political turmoil
11