Gourmet — Annual Report 2014

May 5, 2014

Gourmet Master Co. Ltd.

Ticker : 2723 TT

2014.03.17

Company Overview

• Brand Name :

• Founder/Chairman：Wu, Cheng-Hsueh

• Paid-in Capital：NT$1.411 billion (as of 2013.12.31)

• Focusing on chain stores of fresh bread, cakes and

beverages

2

Company History

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US
No. of store：9 China
No. of stores：421
Taiwan
No. of store 336
Hong Kong
No. of store 5
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Australia
As of February 28, 2014 No. of stores：5
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2004

• －

• 2004 Opened the 1st store in Taiwan －

• 2005/02 Established company in Taiwan

• －

• 2005/12 Established the central kitchen and R&D center in central Taiwan

－ 2006/09 Established Golden 85

Investments, Inc. (US company)

2006

• － Opened the 1st store in Sydney

－ 2007/12 Opened the 1st store in Shanghai

• －

• 2008/09 Opened the 1st store in Irvine, CA in US

－ 2010/11 Listed on TWSE

－ 2012/07 Opened the 1st store in Hong Kong － 2013/09 US central kitchen in operation

3

Group structure

Gourmet Master (Cayman)

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100% 100% 100% 51% 50%
Taiwan China USA Australia Hong Kong
Self-own：35 Self-own：421 Self-own：7 JV：5 JV：5
Franchise：299 Cent kitchen：11 Cent kitchen :1 Cent kitchen：1 JV with Café de
Better Simple : 2 Coral (341.HK)
(small size)
65%
Cent kitchen：3
JV：2
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As of February 28, 2014

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Investment Highlights

- Well-established brand image

- Fully integrated value chain

- Product innovation capability

• Turnaround in China / Taiwan

• New growth engine in the US

Financial Results

Sales Breakdown by Region

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NT$mm
5yr CAGR 25%
16,000 6%
14,000 5%
22%
12,000 4%
25%
10,000
Others
5% 32%
8,000
Taiwan
5%
40%
6,000 China
72%
70%
2% 52%
4,000
64%
55%
2,000 84%
99% 43%
14%
0
2007 2008 2009 2010 2011 2012 2013
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Number of Stores V.S. Sales -China

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Sales(NT$mm) +16% YoY
440 12,000
Store #
10,949
400
360 10,000 9,428
320
8,000
7,312
280
240
6,000
200
4,690
160
4,000
120 2,704
80
2,000
40 509
1
0 0
2007 2008 2009 2010 2011 2012 2013 2007 2008 2009 2010 2011 2012 2013
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Number of Stores V.S. Sales -Taiwan

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Sales(NT$mm)
320
3,619
3,425
3,500
3,291
280 3,251 3,229
2,952
3,000
2,786
240
Number of Stores
2,500
200 Self-owned
Franchise 2,000
160
1,500
120
1,000
80
500
40
0 0
2006 2007 2008 2009 2010 2011 2012 2013 2007 2008 2009 2010 2011 2012 2013
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Number of Stores v.s. Sales
-Others (USA and Australia)
Sales(NT$mm) +34% YoY
15 1000
937
12 Number of stores 800
698
9 600
526
6 400 365
329
3 200
65
23
0 0
2007 2008 2009 2010 2011 2012 2013 2007 2008 2009 2010 2011 2012 2013
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• Monthly sales in US is US$500 – 700K/store, 5-7 times of average monthly sales per store in Shanghai

• The major client base has extended from Asian to Non-Asian

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Income Statement

NT$mn 2009 2010 2011 YoY 2012 YoY	2013 YoY
Sales 6,283 8,347 11,456 37.3% 13,551 17.7%	15,114 11.5%
Gross Profit 3,173 4,411 6,133 39.1% 7,485 21.4%	8,395 12.2%
Operating ~~Expense~~ 2130 3,320 4,729 42.5% 6,180 29.9%	7,454 20.6%
Operating ~~Income~~ 1043 1,091 1,404 28.7% 1,306 -7.3%	941 -27.9%
NI before tax 1054 1,156 1,526 32.0% 1,427 -6.8%	924 -35.3%
NI after tax 758 837 1138 36.0% 1,009 -11.6%	604 -40.1%
GP Margin % 50.50% 52.80% 53.50% 55.24%	55.54%
Operating ~~Margin %~~ 16.60% 13.10% 12.30% 9.65%	6.23%
Net Margin % 12.10% 10.00% 9.90% 7.46%	4.00%

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Balance Sheet

NT$mn 2011.12.31 %	2012.12.31 % 2013.12.31 %
Cash and Bank Deposit 4,144 52%	3,284 38% 2,789 32%
Inventory 371 5%	389 5% 455 5%
Current Assets 5,444 68%	4,612 54% 3,995 45%
Fixed Assets 2,552 32%	3,951 46% 4,833 55%
Total Assets 7,996 100%	8,563 100% 8,828 100%
Current Liabilities 2,016 25%	2,258 26% 2,438 28%
L/T Liabilities 1 0%	0 0% 116 1%
Total Liabilities 2,085 26%	2,329 27% 2,554 29%
Equity 5,911 74%	6,234 73% 6,274 71%

12

Business plan for 2014 - 2016

China-

Launch new format stores and test new operating model

Taiwan-

Store format upgrades and New franchise system to enhance brand image

Other RegionsAccelerate store openings in the US following the operation of Brea central kitchen

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