Welcome, thank you for joining us today for Uni-President Enterprises Corporation's Institutional Investor Briefing, hosted by Masterlink Securities. Today's meeting will be divided into two parts. First, an overview of the company performance, followed by a Q&A session. We're joined by Corrine and Tiffany from the IR team. I will now hand it over to Tiffany.
Thank you. Hello, investors. I am presenting UPEC's operational performance for the first three quarters of 2024. For the first nine months of this year, our operating revenue reached TWD 499.798 billion, representing an increase of almost TWD 66 billion or 15.2% year- over- year. This growth was driven by strong food and beverage sales growth from Uni-President China Holdings, strong performance from 7-Eleven Taiwan and 7-Eleven Philippines, as well as Cosmed. Number three, the inclusion of Carrefour in our consolidated statements since July 2023. Net operating margin was TWD 165.235 billion, up 16.62% year- over- year. Gross margin improved to 33.06%, up 0.4 percentage points. This improvement was primarily driven by lower raw material costs, along with increased capacity utilization. Accumulated operating profit for the first nine months reached TWD 28.79 billion, up 19% year- over- year. More info on that later.
Pre-tax net profit was TWD 35.48 billion, down 15.92% year- over- year. This decrease primarily reflects one-time gains recorded last year, including land disposal gains from UPCH and gains from the Carrefour stock acquisition. Excluding these one-time items, our accumulated pre-tax profit for the first nine months actually went up by 19%. Net profit attributable to the parent company was TWD 17.5 billion. EPS was TWD 3.09, up TWD 0.14 year- over- year. Looking at our consolidated revenue by segment, as shown in the chart on the right, all segments enjoyed revenue growth. The F&B and Feed segment accounted for 29% of the total revenue. UPCH's Food and Beverage business maintains healthy growth.
In particular, The King of Tomato line, tea products, and Hai Zhi Yan all delivered double digit growth, driving overall revenue up by 4%. CVS and other retail accounted for 57% of revenue, mainly driven by continued store expansion in both 7-Eleven Taiwan and 7-Eleven Philippines, along with strong growth in PSD sales. The addition of Carrefour to our consolidated statements helped push revenue growth to 23%. The Container and Packaging segment saw significant growth of 35%, benefiting from the recovery of tinplate product orders and steady growth in beverage packaging operations. Moving on to operating income by segment. As mentioned earlier, our consolidated operating income grew by 19%. The F&B and Feed segment made up 43% of this income.
Operating income in this segment grew by 39%, thanks to improved capacity utilization and stabilized raw material costs. The CVS and other retail segment accounted for 36% of the operating income, growing 8% year- over- year. This growth was driven by increased store counts for both 7-Eleven Taiwan and 7-Eleven Philippines, combined with seasonal promotions and diverse marketing campaigns. The container and packaging segment saw its operating profit grew by 64%, primarily due to increased output from Ton Yi Industrial Corp., which improved capacity utilization and gross margins. This segment's share of the overall operating profit increased from 5.7% last year to 8% this year. This slide is about our third quarter performance. Third quarter consolidated revenue grew by 8.4% year- over- year and 10.4% quarter- over- quarter, continuing to set new records.
As shown in the lower left chart, our consolidated revenue has now maintained positive year-over-year growth for 17 consecutive quarters. In Q3, consolidated gross profit reached TWD 59 billion, up 10.6% from the same period last year. As shown in the lower right chart, our quarterly gross profit maintained positive. Not only that, our gross profit margin grew for seven consecutive quarters, with the third quarter margin improving by 0.65% year-over-year. UPEC's operating profit in the third quarter exceeded TWD 10 billion, setting a historical high. Operating profit grew by 15.62% year-over-year, and our operating profit margin returned to above 6%. As of September 30th, 2024, our cash equivalents, and current financial assets totaled TWD 140.7 billion, an increase of TWD 10.8 billion year-over-year.
Interest-bearing debt stood at TWD 169.7 billion, up TWD 17.3 billion year-over-year, mainly due to operational and investment needs, including distribution center construction. Our current ratio and interest-bearing liabilities to equity ratio remained stable. As of September 30th, net cash flows from operating activities was TWD 57.4 billion. Investment activities resulted in a net cash outflow of TWD 34 billion, with net cash payments for M&A activities decreasing by TWD 24.5 billion compared to last year. This was primarily due to the Carrefour share acquisition. Capital expenditure was TWD 30.1 billion, including store expansion and equipment. Financing activities resulted in a net cash outflow of TWD 22.9 billion, higher than the same period last year, mainly due to increased borrowing for investment planning needs in the previous year. Our cash position at the end of September was TWD 102.2 billion.
UPEC has paid dividends for 41 consecutive years, with cumulative stock and cash dividends totaling TWD 82.3. Our dividend payout ratio has remained above 70% for the past nine years. Our commitment to ESG excellence continues to win recognition, including the Health Brand Awards and the National Occupational Safety and Health Award. For the ninth straight year, we have been recognized by TCSA as one of Taiwan's top 100 sustainable enterprises and have earned the Taiwan Corporate Sustainability Awards. We're included in many key sustainability indices such as FTSE4Good Emerging Index, FTSE4Good TIP Taiwan ESG Index, Taiwan High Compensation 100 Index, and Taiwan EMP 99 Index. We continue to expand our senior-friendly product offerings. Our innovative solutions have consistently earned international recognition. We are committed not only to enhanced product strength, but also to environmental sustainability.
Regarding water source management, we've set a target for water intensity of less than 100 million liters per TWD 10 million in revenue. For greenhouse gas emissions, our 2024 target is to reduce emission intensity by 1.5% annually, with a goal of reducing emissions by 38% by 2030 compared to 2005 levels. We're also gradually reducing use of plastics. Additionally, we've implemented an internal carbon pricing mechanism at TWD 300 per ton. This strengthens awareness on carbon reduction within our organization. For COD reduction, our 2024 target is less than 48 mg per liter. We hope to achieve our energy conservation and carbon reduction goals through the participation of all UPEC employees. This concludes our presentation. Thank you for your attention.
Thank you, Tiffany, for the presentation. We'll now start the Q&A. Question one. Despite intense competition in China's beverage market and downward pressure on consumption, UPCH has managed to deliver impressive results this year. What measures has the company taken to maintain revenue and profit growth in such a highly competitive environment? What are your strategic goals going forward?
Thank you for your question. Consumer needs remain our core focus. Through product innovation and test optimization, UPCH continually expand consumption scenarios. We aim to expand market channels and consumer segments through high-quality, differentiated products while maintaining our brand value-focused marketing approach and healthy channel inventory levels. We take a long-term approach to brand building and product development. As mentioned earlier, UPCH achieved record-breaking revenue in Q3 2024, with both food and beverage segments maintaining robust growth trajectories. Capitalizing on this year's sugar-free tea trend in China, we launched Chunfu Green Tea, an excellent value proposition in sugar-free beverage at the CNY 4 price bracket. This product has been well-received.
In late September, we expand our sugar-free portfolio with Assam Milk Tea and ready-to-drink coffee, further strengthening our brand presence. In the beverage market, both sugared and sugar-free segments offer unique opportunities. Our product-centric strategy focuses on strengthening classic products. For example, Uni-Iced Tea's formula upgrades in the first half of the year drove double digit revenue growth. While our new Shuangcui Lemon Tea established our authentic lemon tea positioning and contributed to revenue growth. That was on product strengths. Our channel strategy focuses on diverse consumption scenarios, leveraging peak season ready-to-drink opportunities, expanding food service presence, and developing festive gift boxes for lower-tier markets. For marketing, we integrate online, offline campaigns with e-commerce and social media content. During Hai Zhi Yan's June to November peak season, we emphasized work, exercise, and travel scenarios through high-frequency exposure across content commerce and live streams, reinforcing our electrolyte replenishment positioning.
We remain committed to our three pillars: product strength, channel capabilities, and marketing finesse.
Thank you for the answer. Another question from the chat. Sales momentum in China's instant noodles market remains soft. How does UPCH plan to address the weakness in instant noodles sales? Thank you.
Looking at sales data from Sam's Club and Pangdonglai, we're actually seeing continued growth. This suggests the issue isn't declining consumer spending power, but rather it's whether brands can effectively meet consumer needs. As a multi-brand company, UPCH has brands positioned across different price points. This year, we've focused on strengthening our product offering. For example, we've upgraded Uni Stewed Beef-flavored noodles . Online, our campus-focused marketing campaigns target a specific TA. Offline, we're offering more ways for consumers to experience these products. After completing the distribution rollout in Q3, market response has been very positive.
The King of Tomato line has seen its CAGR doubling and a double digit revenue growth in the first nine months. In Q3, we saw positive revenue growth in instant noodle sales. Going forward, we're focused on product refinement and market expansion, driving penetration through flavor innovations and line extensions based on consumer insights. Our marketing combines high-visibility events with targeted online engagement and enriched offline experiences. For example, we're leveraging Grandpa Laotan IP through short videos and live streaming from our production facilities to strengthen brand recognition. With our proven mix of quality products, effective marketing, and business discipline, we are confident in developing this into a major revenue driver through sustainable growth.
Thank you for that. Next question. Given that 7-Eleven Taiwan has more than 7,000 stores now, what is the company's medium to long-term store expansion target? Second question, given the recent openings of large format hybrid stores, does the company plan to make this the primary store format going forward? Thank you.
As of September 30th, 7-Eleven Taiwan had 7,062 stores, a net increase of 193 stores. The company targets a net addition of 200- 300 stores annually, with expansion plans being regularly adjusted based on market dynamics. The continued expansion strategy is driven by two key factors. First, demographic shifts in Taiwan, particularly the aging population and increasing number of small households, which heighten demand for convenience and accessibility. Second, our strategic vision to become a comprehensive lifestyle service platform. The company is developing various hybrid store formats to serve different market needs. This year, we have launched four large- format stores in Tainan, including ZEELAND-MARK, which opened in October.
This location features six brands from our group and offers fresh produce, meat, seafood, imported ingredients, reserve tea bar, Slurpee, and exclusive local products. Through these diverse store formats, we aim to create enriched shopping experiences while meeting customers' one-stop shopping needs. Long-term, we are enhancing our product mix and integrating digital services to increase customer reliance on 7-Eleven and fulfill their daily needs. This is how we strengthen our market position. Thank you.
Thank you for that. Another question. Given our rising operating costs, such as electricity bills, dented 7-Eleven's operating profit margin in Q3, what strategies does the company have in place to address this challenge?
We acknowledge that rising operating costs are an inevitable long-term trend. Due to our scale advantages compared to other retailers, 7-Eleven is relatively less affected by these cost pressures. Our strategy consists of several key initiatives. We are implementing differentiated store formats and optimizing product mix to build stronger brand value, thereby driving per store sales growth. Our PSD sales returned to pre-pandemic levels in 2023 and have maintained steady growth in 2024. We are deploying AI solutions to optimize energy consumption in stores. We are exploring green energy opportunities across this group, including potential self-built renewable energy facilities. We are implementing automation solutions like self-checkout systems and AI-powered ordering systems to improve operational efficiency.
These investments are essential to address future challenges. While they may increase our capital expenditure initially, we view them as necessary. On staffing, we encourage franchisees to operate multiple stores to improve ordering efficiency and optimize workforce management. Looking ahead, 7-Eleven Taiwan will continue its expansion based on market demand. We are focusing on offering differentiated products, developing digital platforms, and growing our OPEN POINT membership program. These initiatives aim to boost per-store sales and growth margins, making us more resilient against external market changes.
Thank you for the explanation. Next question. On the tinplate business, given that U.S. anti-dumping investigation concerns have subsided and Ton Yi Industrial is seeing tinplate orders gradually return, with Q2 and Q3 showing signs of recovery, what's your outlook for the tinplate and beverage packaging business?
Since June this year, we have seen Ton Yi Industrial's consolidated revenue return to a growth trajectory. The PET segment has maintained growth momentum quarter-over-quarter. Beyond the growing beverage orders from UPCH, we have been actively developing new clients, including TCP Red Bull. By diversifying our product lines, we are also reducing the impact of the traditional fourth quarter low season in the PET segment. Regarding the tinplate business, as mentioned, we have moved past the sales stagnation caused by the U.S. anti-dumping investigation. Orders are indeed coming back in. However, given the significant volatility in the steel market in recent years, we are taking a cautious view of the overall tinplate market. That said, most of our tinplate customers are in the food and beverage industry, where food safety and supply chain stability are paramount.
This long-term requirement for stable supply works to Ton Yi Industrial's advantage. Also, in 2019, we began production of NBC, new bottle can products. While this product line is still in its early adoption phase and requires time to build a customer base, we've seen some encouraging developments. For instance, in June, our group launched a pulpy citrus beverage packaged in NBC. This helps increase NBC's market visibility. As the world tries to cut carbon emissions and use less plastics, we are seeing some international companies choosing NBC products for their internal use, driven by plastics reduction initiatives. Looking ahead, we'll continue to develop this market gradually, working with customers to offer more diverse packaging options that meet their needs.
Thank you. Another question. Could you explain the group's rationale for investing in Yahoo e-commerce and your future plans in this area?
This is certainly a topic of great interest to many. As you know, Uni-President or UPEC already has a diverse portfolio in physical retail channels, including convenience stores, department stores, hypermarkets, and supermarkets. Our strategy is simple. We want to be there for all of our customers' daily needs and make their lives easier. We're now in an era where the boundaries between online and offline commerce are increasingly blurred. Consumer behaviors continue to evolve. We recognize Yahoo as a company that has built a strong presence in Taiwan over the past 20 years. Their deep expertise in digital operations and proven e-commerce track record made this acquisition strategically valuable. This investment will allow us to leverage their ecosystem building capabilities and deepen our understanding of the e-commerce landscape.
Looking at Taiwan's e-commerce landscape, we see significant growth potential compared to international markets. E-commerce currently accounts for about 12%-13% of total retail sales in Taiwan, whereas the global average is around 20%. This gap indicates substantial room for growth. We remain optimistic about the future growth potential of e-commerce. Through this investment, our group is positioning itself for the arrival of the digital economy era.
Thank you for that explanation. Question. Given your recent investments in logistics parks and numerous M&A activities, how might these impact future dividend distributions? Could you also elaborate on your dividend policy?
Regarding dividends, as mentioned in our presentation, UPEC has maintained an unbroken 41-year track record of dividend payments. Our cumulative stock and cash dividends total TWD 82.3. Over the past five years, we've consistently maintained cash dividends above TWD 2.5, and our dividend payout ratio has remained above 70% for the past decade. Looking ahead, the company will continue to pursue steady annual profit growth. We take a comprehensive approach in determining dividends, considering our group's capital requirements, profitability, and shareholder expectations. Our long-term policy is to maintain stable cash dividend distributions to reward our shareholders.
Thank you for that. Now, due to time constraints, this concludes our investor briefing today. I'd like to extend our appreciation to all participants online. Special thanks to UPEC's IR team, Corrine and Tiffany. Thank you everyone. Goodbye.