MARKET PULSE Q2’2016

OPPORTUNITIES IN A VOLATILE MARKET

 GLOBAL GROWTH REMAINS SLUGGISH,
EAST ASIA & PACIFIC IS EXPECTED TO EASE MODESTLY
Growth prospects weakened throughout the world economy. World Bank projects
Real GDP % Growth global growth for 2016 at 2.4%, unchanged from 2015

Euro Area
USA 2015 2016f
2015 2016f 1.6% 1.6% East Asia & the Pacific
2.4% 1.9% 2015 2016f
MENA
6.5% 6.3%
2015 2016f
2.6% 2.9% Country 2015 2016f
LAC China 6.9 6.7
Copyright ©2012 The Nielsen Company. Confidential and proprietary.

2015 2016f Thailand 2.8 2.5

-0.7% -1.3% Indonesia 4.8 5.1

Philippines 5.8 6.4
#: Increase vs. 2015 Vietnam 6.7 6.2
#: Decrease vs. 2015
#: No change vs. 2015
Note: Europe & Central Asia only includes Developing Countries in the region, Euro Area refers to countries with high income
Source: Global Economic Prospects - World Bank Group (June, 2016) 2
 MODERATE GROWTH DUE TO IMPACT OF UNFAVORABLE
WEATHER CONDITIONS, BUT SERVICE SECTOR IS THE STAR
KEY HIGHLIGHTS
GDP % GROWTH Y-O-Y INDUSTRY & CONSTRUCTION | 33% GDP

10
Mining industry experienced the deepest plunge
MINING driven by CRUDE OIL & NATURAL GAS
8
↓2.2% ↓3.7%
SERVICES | 41% GDP
6 6.7
6.3 6.4 Services recorded the highest
6.1 6.1
5.5 growth in the last 5 years
5.8 5.9
4
2016
RETAIL & WHOLESALE
Target:
2 ↑8.1%
6.7%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.

0 AGRI-FORESTRY & FISHERY | 16% GDP

H1'15 2015 H1'16
1st time in many years experienced negative growth (-0.2%)
Total GDP Impacted by the most severe drought in Vietnam in 90 years
Agri-forestry and fishery and salinity intrusion in SCC & MKD.
Forecast:
Industry & Construction
AGRICULTURAL OUTPUT • Rice output ↓1.5%
Services • Rice exports ↓10%
↓0.7% vs. YA in H1’16
• Coffee exports ↓25%
Source: GSO 3
 INFLATION SLIGHTLY UP TICKED BUT REMAIN MODERATE

Higher CPI growth vs. H1’15 Driven by Healthcare & Education fees,
but still low while Food & Beverage remain low
6.8 Inflation Composition
6.0
CPI 1.7
Medicine & Healthcare 17.7
CPI H1’16 Education 4.1
1.8
+1.7% 0.6
1.7
Beverages & Cigarette 2.4
Food & food stuff 2.0
vs. YA
2012 2013 2014
Clothes & footware 2.5
2015 H1'16 Transportation -9.4
Copyright ©2012 The Nielsen Company. Confidential and proprietary.

“CPI inflation is expected to remain moderate mainly due to soft commodity prices and
stay well below 5 percent mark the authorities are aiming for this year”
– World Bank (June, 2016)

Source: GSO, World Bank (June, 2016) 4

 VIETNAMESE CONSUMERS STILL SHOW POSITIVITY
BUT STILL CAUTIOUS

CONSUMER CONFIDENCE INDEX (CCI) Concern about The state of

Economy jumped +4 pts
104 105 108 109 107 vs. last quarter

…BUT THAT DOESN’T MEAN THEY WILL

HESITATE TO SPEND
Where do Vietnamese consumers channel their spare cash?
Copyright ©2012 The Nielsen Company. Confidential and proprietary.

Q2/15 Q3/15 Q4/15 Q1/16 Q2/16

41% 37%
Consumer Confidence Index Calculation
• Perceptions of local job prospects HOLIDAY/ OUT OF HOME
• Perceptions of state of personal finances over VACATIONS ENTERTAINMENT
the next 12 months
• Perceptions of good/bad time for people to buy +5 +3
the things they want and need over the next 12 *compared versus last quarter
months
Source: Nielsen Global Survey Consumer Confidence Section (Q1’16), Retailer Sentiment Report Q1’16 5
 IN 6 KEY CITIES, FMCG SURGED IN 1ST HALF OF 2016
DRIVEN BY UPLIFT IN Q2
Fast Moving Consumer Goods dynamics - Total 6 cities
7% 6.3%

6%
4.7% 5.4%
4.8% 4.6%
5%
4.3%
4.0%
4%
3.2% 5.2%
2.8% 2.9%
3% 4.6%
3.9% 3.7% 3.8%
3.0% 1.2% 2.0% 3.7%
2% 1.5% 1.5%
0.7% 2.3%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.

0.6%
1% 2.0%
1.3% 1.4% 1.1%
0.9% 1.0% 0.9% 0.6% 0.9% 0.9% 0.8% 0.6%
0%

Unit value change Volume change Nominal growth

Source: Nielsen Retail Index – Versus year ago 6

 FOOD SEES STRONG PICKUP POST-TET WHILE
MILK-BASED SUSTAINS MOMENTUM
Super Category Contribution and Growth - Total 6 Cities

41% 15% 15%

BEVERAGE FOOD MILK BASED

9.9% 10.4% 10.2%9.4%

8.3%
7.0% 8.9%9.2%

8.9% 7.5% 7.4% 7.1% 6.9% 4.7% 4.0%

7.0% 8.3% 5.0% 3.0%
5.6% 1.7%
-1.9% 3.0%
-4.9% 0.7% -3.5% -0.4%-0.0%
-1.2% -0.9%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.

-2.3%-2.9%

Unit Value Change Volume Change Nominal Value Growth

Source: Nielsen Retail Index – Versus year ago; % is value contribution to Total FMCG MAT TY 7
 OTHER CATEGORIES HAVE ALSO BOUNCED BACK IN Q2

Super Category Contribution and Growth - Total 6 Cities

6% 8% 13% 3%
HOME CARE PERSONAL CARE CIGARETTE BABY CARE

7.5% 8.1%
6.4%
4.5% 4.6% 3.8% 4.6%
2.3% 2.2% 3.3%2.7%
6.1% -0.1% 0.7%
-0.7% 0.4% -0.5% 5.4%
3.9% -1.5% -2.7% -2.8%3.1%
-0.8%-5.6% -4.1%
-4.7%
-6.0%
-10.1
Copyright ©2012 The Nielsen Company. Confidential and proprietary.

-4.8%-3.5% -11.5
%
%

Unit Value Change Volume Change Nominal Value Growth

Source: Nielsen Retail Index – Versus year ago; % is value contribution to Total FMCG MAT TY 8
 FOR THE FIRST TIME, NON-ALCOHOLIC BEVERAGE GROWTH
IS SLUGGISH, SHOWING OPPOSITE TREND WITH BEER
Super Category Contribution and Growth - Total 6 Cities

22% 19%
BEER NON-ALCOHOLIC BEVERAGE

14.1% 13.9%14.3% 14.2%

12.0%
11.7%
10.6% 9.9% 9.5%
8.7% 8.7% 8.3%
8.7%
8.1% 10.0%
10.3% 7.3% 7.1% 6.5% 10.5% 14.4%
5.4% 6.8% 11.7% 3.7% 4.1%
4.6% 9.7% 3.9% 9.1% 8.6% 8.7% 8.1%
5.0% 3.8%
4.9% 1.5%
3.2% 3.1% 3.4%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.

Beverages (Soft Drink, Energy Drink, Packaged Water, RTD Tea,

Sport Drink, Fruit Juice, Coffee, Tea Bag and Healthy Food Drink)

Unit Value Change Volume Change Nominal Value Growth

Source: Nielsen Retail Index – Versus year ago; % is value contribution to Total FMCG MAT TY 9
 IN URBAN & RURAL AREA, FMCG SOFTENS THIS YEAR
AND SHOWS MUCH VOLATILITY TO BE PREDICTABLE
Fast Moving Consumer Goods dynamics - Urban vs Rural

Rural
46%
Total Urban 54% Urban
Total Rural
10% 9.8%
10%
8% 7.6% 9.3%
6.3% 8%
5.6% 5.2% 5.5%5.9% 6.0%
6% 4.4% 4.9% 4.6% 6%
4.3%
6.0% 3.8%
4% 3.1% 5.6%
4%
4.0% 3.9% 2.2%
2% 2%
0% 0%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.

-2% -2%
-4% -4%
-6% -6%

Unit Value change Volume change Nominal growth

Source: Nielsen Retail Index – Versus year ago
Note: This slide only includes Feminine Protection, Hair Conditioner, Shampoo, Toothpaste, Toothbrush, Personal Wash, Dishwashing Liquids, Fabric
Softener, Laundry Products, Bouillon-MSG, RTDM, Soft Drink, Packaged Water, Energy Drink, RTDT, Cigarette, Sport Drink, Sweet Condensed Milk,11
Fruit Juice , Household Cleaners, Beer, Instant Noodles, Household Insecticide
 FMCG SOFTENS PARTICULARLY IN NORTH, CENTRAL & MKD DUE
TO UNFAVORABLE WEATHER CONDITIONS
FMCG Nominal Value Growth vs. YA by regions

6.2%
Cold Winter 6.3%
7.5% 6.8%
4.7% 4.1% 3.7%
NORTH 2.9% 2.1%
1.0%
25%

8.3% 6.9% 7.2% 6.7%

6.4% 6.2% 5.6%
CENTRAL 4.6%
3.4%
28% 1.0%

Val % SOT Drought

– FMCG – YTD TY
Copyright ©2012 The Nielsen Company. Confidential and proprietary.

7.8% 9.0% 7.5%

6.2% 6.5% 6.1% 5.5%
SOUTH 4.5% 5.5%
2.5%
47%
Salinity intrusion
7.0% 8.3% 8.4% 7.8% 8.6% 8.7% 6.4% 10.3%
S.East (33%) 3.3% 7.4%
7.7% 9.7% 3.9%
MKD (14%) 2.8% 3.2% 2.3%
-1.8% -5.2% -3.4% -1.5%
12