26 February 2009 The President The Stock Exchange of Thailand Dear Sir, Re: Management Discussion and Analysis on 4Q08 and year 2008 financial performance Financial Performance Summary - 4Q2008 In 4Q08, Berli Jucker Public Company Limited ("BJC") had total sales of 5,677 million Baht, increasing 11.4% YoY, and 1.0% QoQ. 4Q08 net profit was at 120 million Baht, declining 66.1% YoY and 57.9% QoQ. On November 1, 2008, BJC realigned its organization into four business groups:1) Industrial Supply Chain Group; 2) Consumer Supply Chain Group; 3) Healthcare & Technical Supply Chain Group; and 4) International Business Group. The 4Q07 and 3Q08 revenue breakdown shown in the below table has been restated to reflect the new business structure. Revenue (Million Baht) 4Q08 4Q07 % change 3Q08 % change 2008 2007 % change Industrial Supply Chain 2,967 2,586 14.7 2,817 5.3 10,742 8,684 23.7 Consumer Supply Chain 1,616 1,513 6.8 1,681 (3.9) 6,848 6,198 10.5 Healthcare & Technical Supply Chain 1,058 998 6.0 1,084 (2.4) 4,371 4,281 2.1 International Business 36 - n.a. 40 (10.0) 86 - n.a. Total 5,677 5,096 11.4 5,622 1.0 22,047 19,163 15.0 Industrial Supply Chain Group Sales of Industrial Supply Chain Group in 4Q08 was 2,967 million Baht, increasing 14.7% YoY, and 5.3% QoQ. Sales of all businesses in the Group including glass packaging, aluminium can, galvanized steel structure and engineering product and services have increased from the previous quarter. Sales of glass packaging products have continued to increase, with growth rate 31% YoY and 5% QoQ. However, gross margin declined significantly resulting in a net profit loss due primarily to 1) loss from fuel oil hedging at Thai Glass Industries Public Company Limited ;and 2) increase in raw material costs (e.g. soda ash, cullet) by around 50% YoY and by 5% QoQ. Natural gas cost also increased by over 30% YoY, but declined around 7% QoQ. On an overall basis in 2008, sales of Industrial Supply Chain Group continued to grow. In terms of profit, the aluminium can business' net profit increased by over 10% from the previous year. On the other hand, the glass packaging business had net loss in 2008 due mainly to loss from fuel oil hedging and an increase in energy and raw material costs. This resulted in a decline in net profit of Industrial Supply Chain Group in 2008. Consumer Supply Chain Group In 4Q08, sales of Consumer Supply Chain Group was 1,616 million Baht. Sales increased 6.8% YoY, but declined marginally by 3.9% QoQ. The decline in sales was mainly attributed to a shortage of potato supply to produce potato chips. In addition, sales of soap slightly declined due to seasonal effects. However, sales of Cellox Purify, recently launched in 4Q08, performed well resulting in increased sales in the tissue business. For the year 2008, sales has been growing with 30% increase in net profit. For snack business, sales increased by more than 14% and net profit improved by 23%. The improvement was primarily attributed to the successful robust marketing activities and new product launches, e.g. Tasto Color Max, Dozo sweet chili flavour, Party banana flavor. In addition, the company has implemented a tight control and planning over supply chain and material management. For tissue business, in 2008, sales of finished goods has shown a significant growth of more than 14% compared to average industry growth at 3%. The achievement was attributed to the introduction of innovative products e.g. Cellox Purify as well as an increasing market share on Zilk and Belle brands. Parrot soap products also achieved solid sales growth. In 2008, sales improved by over 20% higher than average industry growth rate at 5%. The success was due to a re-launch of Parrot Botanicals shower cream as well as continuous marketing activities.The company also achieved higher volume of OEM orders e.g. Dettol soap, Nivea facial foam and Sugus candy, growing by 23%. For logistics business, apart from providing logistics services to business units within BJC, it was able to leverage its expertise to significantly expand its foot-print in the external customer market with new contracts won such as Acer Computer. Healthcare and Technical Supply Chain Group Healthcare and Technical Supply Chain Group achieved 1,058 million baht sales in 4Q08, 6.0% increase YoY, but declined slightly by 2.4% QoQ. The marginal decline in sales QoQ was primarily due to slower purchase orders of pharmaceutical products by the government, in accordance with the budget closing period. However, gross margin of the Group has significantly improved due to higher sales proportion of products with higher margin. For the year 2008, sales of Healthcare and Technical Supply Chain Group was 4,371 million baht, increasing by 2.1%. Net profit of the Group also improved by over 10% from the previous year. Sales of medical equipment and medical imaging products has achieved impressive sales growth due to the high quality product ranges. The Group has implemented the first installation of a Smart Computerized Operating Room System (CORE system) in Thailand and Southeast Asia at Rajavithi Hospital and launched a new high technology Surgical Operating Microscope. Medical Product Division has experienced a strong growth due to market focus and key customer expansion. Sales of speciality chemical, stationery and graphic products also continuously improved in 2008. Key Highlights of 4Q08 and 2008 Income Statement Million Baht 4Q08 4Q07 % change 3Q08 % change 2008 2007 % change Revenue from Sales 5,677 5,096 11.4 5,622 1.0 22,047 19,162 15.1 Gost of good sold 4,965 4,099 21.1 4,369 13.7 17,370 14,558 19.3 Gross profit 712 996 (28.6) 1,253 (43.2) 4,677 4,604 1.6 Shares of profits from investments 16 10 57.0 35 (54.5) 96 41 138.0 Other income 68 53 27.4 64 5.3 305 196 55.4 - - - - - - - - Selling and administrative expenses 561 564 (0.5) 918 (38.9) 3,321 2,916 13.9 Interest expense 62 24 160.0 65 (3.7) 230 147 56.2 Income tax expense 25 54 (53.3) 47 (46.8) 295 391 (24.7) Net profit 120 353 (66.1) 284 (57.9) 1,076 1,255 (14.2) Earning Per Share (baht) 0.08 0.22 (66.1) 0.18 (57.9) 0.68 0.79 (14.2) %change %change %change Key Financial (ppts) (ppts) (ppts) Ratio (%) 4Q08 4Q07 3Q08 2008 2007 Gross Margin 12.5 19.6 (7.0) 22.3 (9.7) 21.2 24.0 (2.8) SG&A to sales 9.9 11.1 (1.2) 16.3 (6.5) 15.1 15.2 (0.2) Net Margin 2.1 6.9 (4.8) 5.1 (2.9) 4.9 6.5 (1.7) Gross Margin 4Q08 gross margin was 12.5%, declining from 19.6% in 4Q07 and 22.3% in 3Q08. The decline was primarily due to higher raw material and energy costs and loss on fuel oil hedging. Gross margin of Healthcare and Technical Supply Chain Group, however, improved by more than 4% due to a higher proportion of sales in products with higher gross margin. Gross margin for the year 2008 was at 21.2%, declining from 24.0% in 2007 mainly due to higher energy and raw material costs. Selling and Administrative Expenses Selling and administrative expenses in 4Q08 was 561 million baht, similar to 4Q07 levels and declined by 38.9% from 3Q08. SG&A as a percentage of sales was at 9.9% this quarter, decreasing from 11.1% in 4Q07 and 16.3% in 3Q08. The decline was due to better cost control in the Company and seasonal effects (4Q tends to have lower SG&A expenses) SG&A to sales for the year 2008 was approximately at the same level as year 2007. Net Profit Margin The Company's net profit in 4Q08 was 120 million baht, 66.1% and 57.9% lower than 4Q07 and 3Q08, respectively. This was mainly due to lower gross margins in the glass packaging business. 4Q08 net margin was 2.1%, declining from 6.9% in 4Q07 and 5.1% in 3Q08. 2008 net profit margin was at 4.9%, decreasing from 6.5% in the previous year. Debt to Equity Ratio Debt Ratio 2007 1Q08 2Q08 3Q08 4Q08 Interest Bearing Debt to Equity 0.51 0.55 0.56 0.62 0.63 Debt to Equity 0.99 1.10 1.10 1.16 1.16 Interest bearing debt to equity ratio was at 0.63x in 4Q08, approximately the same level as the previous quarter. The ratio increased from 0.51x in year 2007 due mainly to higher loans incurred to expand the capacity of Thai Glass Industrial Public Company Limited and acquire Thai Beverage Can Company Limited. Nevertheless, the Company's financial position still remains solid. Interest bearing debt to equity ratio was still significantly below the debenture covenant of 1.75x. Please be informed accordingly. Yours faithfully, Berli Jucker Public Company Limited Thirasakdi Nathikanchanalab Aswin Techajareonvikul Director Director