Title UFLP 2025 - Finance Digital Case 03.pdf ✅

F I N A N C E – CASE STUDY
Today, we have an exciting opportunity to step into the shoes of the Company's Finance members and make a real impact. We would like to hear your opinions and recommendations based on the business context. • Let's take10 minutes for yourself preparation. • And then, let's come together as a team to share your thoughts and have discussion. Your team will have 20’ minutes for this part. Each individual's view is valid with your own diverse perspective but as a Finance department, let's work together to make decisions that will drive our business growth. Let's make today's meeting counts! Here is your brief 20’ Group Case 10’ Discussion Individual Preparation PRIVATE & CONFIDENTIAL GENERAL GUIDE
DIGITAL INTERVIEW CHALLENGE Please take the next 20 minutes to share your thoughts and discuss with the team on the following mini challenge . You will have at least 10 minutes each for self-preparation before the group discussion. Please initiate the discussion when you feel ready. Company Landscape: ABC Co., Ltd. is an international Dairy company that possesses more than ten popular brands in the world. In Vietnam it has been operated for more than 20 years, and it has unceasingly widened the business by entering new markets and launching new products. The most recent launch of ABC's brands was PurePasture Organic, a super-premium range of sterilized fresh whole milk that follow EU Organic Standard, targeting people who have high standard for food and seek for organic source in E2E production process.
• The market demand of this product range is getting bigger with 15% contribution in the category and the market growth rate is high at approximately 20%, 3x vs market growth rate. • This product is expected to be a growth driver for Vietnam other SEA countries. This PurePasture Green product is currently not produced in Vietnam, it is imported entirely from Australia, utilizing the spare capacity of this country. It has only been 2 years since launch, but its revenue contribution has been more than 20% of Fresh Whole Milk category. • An affordable price on product with origin from a renown country for milk seems to be one of the factors that led to this fast initial growth. But now with the increased volume, sourcing becomes a challenge. There has been a discussion on changing the sourcing strategy to improve the situation. Three options have been put on the table. 1. Localize the product by setting up new production facilities in Vietnam and become the production hub for SEA region 2. Let Thailand localize the product, then import from Thailand instead of Australia 3. Continue to import the product from Australia to Vietnam Questions: 1. Which option would you recommend your supply chain partner? Why? 2. If the Board of Director in Vietnam want to localize production in Vietnam regardless of business case calculation, what are the risks and opportunities and key factors they need to consider? High Case (Payback 2 yrs) Turnover (billion VND) Gross Margin (% of TO) Brand & Marketing Investment (% of TO) Profit Before Overhead (% of TO) Base Case (Payback 2.9 yrs) Turnover (billion VND) Gross Margin (% of TO) Brand & Marketing Investment (% of TO) Profit Before Overhead (% of TO) Current PnL 2024 200 45% -28% 17% Localize to Vietnam 2026 2027 2028 338 423 528 44% 45% 46% -30% -28% -26% 14% 17% 20% Import from Thailand 2026 2027 2028 313 375 450 46% 47% 48% -30% -28% -26% 14% 17% 20% Import from Australia 2026 2027 2028 313 359 413 45% 46% 47% -30% -28% -26% 15% 18% 21% Current PnL 2024 200 45% -28% 17% Localize to Vietnam 2026 2027 2028 288 331 381 43% 44% 45% -30% -28% -26% 13% 16% 19% Import from Thailand 2026 2027 2028 265 304 350 46% 47% 48% -30% -28% -26% 16% 19% 22% Import from Australia 2026 2027 2028 265 304 350 45% 46% 47% -30% -28% -26% 15% 18% 21% • High case and Base case refer to different scenarios with different targeted revenue, which requires different level of CAPEX investment and thus, Payback period • Payback is calculated between option Localize to Vietnam versus option Import from Australia. Payback needs to be less than 3 years to be accepted. • Average lead time for import: from Australia: 3 months; from Thailand: 2 weeks