PB IR/ May 14, 2019

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Management Discussion and Analysis for the First Quarter of 2019 Ended 31 March 2019

14 May 2019

PB – IR/19-00002

May 14, 2019

Subject: Submission of Financial Statements and the Management Discussion and Analysis of Plan B Media Public Company Limited (“the Company”) for the three-month period ended March 31, 2019 (“1Q19”)

To: The President

The Stock Exchange of Thailand We are pleased to submit the following documents:

1. A copy of the Company Only and Consolidated Interim Financial Statements for the three-month period ended March 31, 2019 (a copy in Thai and English).

2. Management Discussion and Analysis (MD&A) for the three-month period ended March 31, 2019 (a copy in Thai and English).

3. The Company's performance report, Form F45-3 for the three-month period ended March 31, 2019 (a copy in Thai and English).

Please be informed accordingly.

Sincerely yours,

(Pinijsorn Luechaikajohnpan, Ph.D.) Authorized Director

Company Secretary Tel: +66 2 530-8053 Fax: +66 2 530-8053

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14 May 2019

2 | PAGE 1. Executive Summary

1.1 Key Financial Highlights for 1Q 2019

 Total Revenue stood at THB 1,207.2 million, an increase of 50.1% from the same period of the previous year.

 EBITDA was THB 428.0 million, a 52.9% rise from the same period of the previous year.

 Net Profit was recorded at THB 154.1 million, an increase of 10.8% from the same period of the previous year.

Unit: THB Million 1Q 2018 1Q 2019 % Change (YoY)

Total Revenue 804.5 1,207.2 50.1%

EBITDA 280.0 428.0 52.9%

Net Profit 139.1 154.1 10.8%

1.2 Summary of Other Important Details

 The Company generated the highest quarterly total revenue since the Company’s inception as total revenue skyrocketed at a rate of 50.1% from the same period of the previous year to reach THB 1,207.2 million. The increase in revenue was propelled by growth in all media platforms and engagement marketing business as the Company consolidated the financial statements of BNK48 Office Co., Ltd. since the third quarter of 2018.

o The jump in revenue from advertising media was derived from growth in revenue of all media platforms especially digital out-of-home media and airport media that the Company actively developed and diversified into during the past year. Transit media, static media, digital media, in-mall media and airport media registered growth rates of 7.7%, 5.5%, 12.5%, 22.1%and 5.4% respectively. ¹

1 The Nielsen Company (Thailand)Ltd.

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o The Company’s advertising media received positive market responses despite the seasonal factor as the first quarter is the quarter with the least demand on advertising of the year. The Company managed to maintain the utilization rate at 66.5%.

 The Company’s net profit edged up 10.8% while net profit margin slid to 12.8% as a result of the following.

o Continuous business and media service area expansion. This led to higher fixed costs from depreciation and rent. Given that the demand for advertising media was seasonally low, the Company experienced muted net profit margin.

o M&A activity. Even though gross profit margin of BNK48 Office Co., Ltd. which is the new business was higher than existing business, accounting standards require the Company to realize the whole revenue from BNK48 but only realize profit according to shareholding structure. As a result, net profit margin after deducting non-controlling interest stood at 10% which is lower than net profit margin of the Company’s existing business.

 The Company’s outlook for 2019

o For 2019, the Company estimated that overall media industry will continue on its growth path thanks to private consumption that improved consistently for all sectors during the first quarter of the year as well as expected high GDP growth rate.

Therefore, the Company is confident that its diverse media offering will meet marketing demands of product and service owners and the Company will continue to outpace the industry regarding its revenue growth.

o The Company currently teamed up with VGI Global Media Public Company Limited (“VGI”) in enhancing competitiveness for its out-of-home media. Plan B and VGI are both leaders in out-of-home media market and this collaboration will aid the two companies in obtaining market shares from traditional media and online media.

o Diversification of media platforms and extension of out-of-home media coverage will be carried out including digital media development projects such as Bangkok Jam that the Company planned to add another 50 digital displays to report traffic

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4 | PAGE conditions across Bangkok. Moreover, the Company has a plan to expand other out-of-home media from static media to airport media through collaborations with both public and private agencies.

o The Company will pursue the development of engagement marketing business leveraging on sports content from Football Association of Thailand, music content from BNK48 girl group and esports content from Thai E-League Pro as well as other new types of content to appeal to broader consumer groups.

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14 May 2019

5 | PAGE 2. Economic and Media Industry Environment

Thai economy during the first quarter of 2019 still encountered a number of risks from both internal factors and external factors. Domestic investment stalled as the general election took place at the end of the quarter and no clarity was in sight while US-China trade disputes put a dent on export which contracted -3.6%.² However, there were favorable factors such as rising aggregate domestic demand thanks to higher private consumption in all sectors as well as government expenditure that continued to grow from higher current expenditure. Given the mentioned factors, GDP during the first quarter of 2019 is expected to grow below the forecast level of 2019 GDP growth of 4.0%.²

Due to the above economic slowdown together with uncomplimentary seasonal effect of low demand during the first quarter of the advertising media industry, product and service owners cut down on their ad spending. As a result, overall advertising market during the first quarter of 2019 contracted with a negative growth rate of -2.3%³ compared to the same period of 2018 with the delclines of market value from almost all media platforms. Print media, cinema media, radio media and TV media recorded changes in market value of -20. 7%³, -4.4%³, -1.5%³ and +0 . 9 %³ respectively compared to the same period of the previous year.

Regarding out of home media, growth was maintained at a rate of 1.5%³ with the market value of THB 3,462 million³ during the first quarter of 2019.

Despite the weak growth of overall advertising media industry, Plan B managed to attain solid revenue growth with THB 1,207.2 million in total revenue, jumping 50.1% compared to the same period last year which is significantly higher that the industry. The Company’s investments in new media development together with the expanding engagement marketing business are accountable for Plan B’s robust revenue growth.

2 Bank of Thailand

3 The Nielsen Company (Thailand) Ltd.

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6 | PAGE

Overall Media Spending for 1Q 2018 and 1Q 2019 (THB Million)⁴

Spending on out-of-home media grew slightly at a rate of 1.5% during the first quarter of 2019 compared to the similar period of 2018 while the overall advertising industry shrank at a rate of 2.3%.

4 The Nielsen Company (Thailand) Ltd.

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7 | PAGE 3. Key Developments for 1Q 2019

Seasonally-low demand for advertising media during the first quarter did not affect the Company’s commitment in developing out-of-home media business and innovations to add value to its advertising media portfolio in order to support growing demand of advertising media in the future. Key developments during the first quarter are summarized below

February 2019 Plan B launched Bangkok Jam service through 50 digital displays on major streets across Bangkok equipped with traffic condition reporting system, intelligence traffic signs, accident report system and CCTVs to report traffic at those locations real-time. This is considered another solution to traffic issues in Bangkok that can help enhance quality of life of people in Bangkok.

Bangkok Jam on Major Streets Across Bangkok

March 2019 Plan B introduced Paragon Motion Block digital media at Parc Paragon which is the fountain square connecting Siam BTS Station and Siam Paragon shopping mall in order to further extend its digital media coverage to key landmarks in Bangkok.

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8 | PAGE Paragon Motion Block

March 2019 Plan B invested in BL Falcon Pte. Ltd. to expand its digital media network in Singapore which is the 5^th foreign market that the Company has presence in.

Digital Media of BL Falcon Pte. Ltd. in Singapore

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9 | PAGE 4. Summary of Performance

4.1 Service Revenue

For the first quarter of 2019, the Company recorded total service revenue of THB 1,195.2 million, a surge of 50.0% from the same period of the previous year thanks mainly to non-stop media capacity expansion especially digital media and airport media. Furthermore, the consolidation of financial statements of BNK48 Office Co., Ltd. (“BNK48”) also contributed favorably to the top line. Revenue by type of media is detailed below.

4.1.1 Revenue from digital media reached THB 374.5 million, equal to 12.5% growth compared to the same period last year. The revenue increase was driven mainly by media development and variety enhancement of digital media during the past year such as the PanOramix @ CentralWorld as well as other digital media that started to realize revenue during the past quarter e.g. Bangkok Jam and Paragon Motion Block.

4.1.2 Revenue from static media rose to THB 243.5 million, increasing 5.5% compared to the same period last year. The revenue increase was derived from higher utilization rate.

4.1.3 Revenue from transit media grew moderately at a rate of 7.7% from the first quarter of 2018 to THB 116.5 million in the first quarter of 2019 as utilization rate improved.

4.1.4 Revenue from in-mall media stood at THB 38.7 million, equal to a 22.1% increase from the same period last year. The growth was from higher utilization rate.

4.1.5 Revenue from airport media advanced 5.4% from the previous year to reach THB 42.0 million. This is a result of the extension of service areas that currently cover 31 airports across the country.

4.1.6 Revenue from engagement marketing business enjoyed exuberant growth of 618.6 % from 2018 to top THB 293.2 million. The increase in revenue came from music marketing business which the Company started to realize the revenue since the third quarter last year as well as higher contribution from sports marketing business.

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Total Service Revenue, Gross Profit and Net Profit 1Q 2018 and 1Q 2019 (THB Million)

The increase in revenue came from the continuous development of the Company’s advertising media as well as the consolidation of financial statements of BNK48. Nevertheless, net profit margin increased at a slower rate than total service revenue as the Company realized the whole amount of revenue from BNK48 but only realized profit according to its 35% ownership of BNK48.

Revenue by Type of Media for 1Q 2018 and 1Q 2019 (THB Million)

High revenue growth from engagement marketing business was derived from that fact that the Company started to recognize the revenue from music marketing. For advertising media business, all types of media registered higher revenue.

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11 | PAGE 4.2 Costs

Total costs of the Company for the first quarter of 2019 stood at THB 918.9 million, an increase of 44.6% from the previous year. The spike in total costs came from rising service costs from media service area expansion during the past year as well as expansion of engagement marketing business. Details of expenses are listed below:

4.2.1 Service costs for the first quarter of climbed dramatically at a rate of 48.4% from last year to stand at THB 781.1 million due to continuous expansion of media services and media capacity in the past year that resulted in rising variable costs such as rent, electricity charges, maintenance costs and revenue sharing costs. Besides, expenses of music marketing business the Company commenced during the past year also contributed to higher service costs.

4.2.2 Selling, general and administrative expenses for the period amounted to THB 137.8 million, a significant 26.4% surge from the past year. The increase was a result of the consolidation of SGA expenses of the Company’s subsidiaries such as BNK48, additional expenses from newly-established unit to develop esports content and higher personnel expenses from higher number of employees.

4.3 Profit

For the first quarter of 2019, the Company recorded net profit of THB 154.1 million or edging up modestly at a rate of 10.8% from last year as a result of additional new media development and improved revenue-generating capacity from advertising media. Net profit margin adjusted slightly downward to 12.8%

during the quarter due to the consolidation of financial statements of BNK48. According to the accounting standards, the Company realized the whole amount of revenue from BNK48 but only realized profit according to its 35% ownership of BNK48. As a result, net profit margin after deducting non-controlling interest stood at 10% which is lower than net profit margin of the Company’s existing business.

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12 | PAGE 4.4 Financial Position

As of March 31, 2019, total assets of the Company were 8,038.7 THB million which increased by 40.2 % from year end 2018. The increase in total assets was mainly due to proceed from newly-issued ordinary shares and business expansion

The Company’s total liabilities were equal to 1,207.1 THB million, which decreased by 13.1% from year end 2018 due to decress in account payable

The total shareholders’ equity was 6,831.5 THB million which slightly increased by 57.2%. This was attributable to newly-issued ordinary shares and increase in retained earnings appropriated from net profit for the period.

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13 | PAGE 5. Key Financial Ratio Position

Profitability Ratios 1Q 2018 1Q 2019

Gross Profit⁵ (%) 34.6 35.3

EBITDA (%) 34.8 35.5

EBIT (%) 21.2 23.8

Net Profit (%) 17.3 12.8

Return on equity⁶ (%) 15.0 11.0

Liquidity Ratio 1Q 2018 1Q 2019

Current Ratio (Times) 2.8 4.3

Quick Ratio⁷ (Times) 1.7 2.2

Average collection period (Days) 104 95

Payment days (Days) 81 70

Efficiency Ratios 1Q 2018 1Q 2019

Return on assets⁶ (%) 12.7 8.9

Asset turnover (Times) 0.7 0.8

Leverage Ratio 1Q 2018 1Q 2019

Liability to Equity (Times) 0.20 0.18

5 Calculated on Total Revenue

6 Annuailized by using the quarter no.X 4

7 (Cash & Cash Equivalents + Trade and other receivable )/ Current Liabilities

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14 | PAGE 6. Trends and Developments in 2019

Rising aggregate domestic demand from mounting private consumption of all sectors as well as high forecast 2019 GDP growth of 3.5-4.5%² are likely to drive ad spending of product and service owners for the rest of 2019. Furthermore, changing consumer behaviors toward spending more time outdoor will act in favor for out-of-home media to attract product and serviced owners to focus their media budgets more on

out-of-home media. The Company predicted that these positive factors will continue to support growth of advertising media in 2019. Thanks to our diverse and extensive media portfolio and engagement marketing business, Plan B is certain of its capabilities in addressing needs of marketers. In 2019, the Company is dedicated to planning and laying strong foundation to make further investments to enhance competitiveness in a sustainable manner. Our key strategies for 2019 include the following.

 The Company will continue to promote variety of its media offering as well as extend the coverage its out-of-home media according to the media network expansion plan below.

o Digital media: The Company planned to extend its digital media footprint through Bangkok Jam with over 40 additional digital displays in key strategic locations in Bangkok to report traffic conditions to commuters.

o Other media: The Company has plans to expand other out-of-home media including static media and airport media through collaborations with government agencies and private companies to offer advertising media that cater to diverse groups of target markets.

 The Company’s engagement marketing business will be developed and expanded continuously in order to enhance communication effectiveness between consumers and product and service brands as well as promote brand loyalty desired by marketers. The Company currently has 3 categories of quality content which are sports, music and esports. In the future, the Company planned to develop other types of content to respond to the diverse interests of consumer groups. Moreover, as a quality content manager, the Company can build on its content and expand into other media not limited to out-of-home media only.

8 Bank of Thailand

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 Plan B and VIG as 2 leaders in out-of-home media market joined force in gaining competitive edge to capture market shares from traditional media and online media. This cooperation will provide full ranges of products and services related to marketing communication in the business ecosystem comprising advertising, digital serrvices and logistics.