FAQ

• Strategic Direction

  Why is F&N structured the way it is today?

  Over 137 years, F&N has become a household name in Singapore and Malaysia.  Recognising the constraints of growth in these markets, we started to embark on regional expansion for long-term sustainable growth. It is precisely this multi-industry, multi-location strategy that has helped F&N survive the economic downturn and scale new heights in profitability.
  
  
  

  How would F&N position itself? What is the strategic roadmap for F&N?

  F&N remains steadfast in our multiple-business model. We aim to be a leading Asian-based company focused on a balanced portfolio comprising Food & Beverage and Publishing & Printing, with significant business presence in overseas markets and renowned for our product quality, brands, sound management and reputation of delivering value to all our stakeholders.
  
  While our businesses may appear seemingly unrelated, we have built up market leadership positions in each of our business as well as strategic capabilities over the years in brand management, extensive marketing expertise, distribution networks, and financial strength and discipline, which are applicable to all our businesses. F&N is one of the few companies with brands that transcend borders. 
  
  Our priority is to drive earnings, placing emphasis on sharpening capital management, widening and deepening our presence in new and existing geographical markets, and creating product extensions.
  
  
  

  How does F&N decide when to enter or exit a new business?

  Any new business to be considered must satisfy certain criteria pertaining to these earnings targets: Existing businesses should generate returns that exceed the Cost of Capital whilst new businesses should achieve satisfactory return on investment. Other factors taken into consideration include the ability to strengthen our market positions, distribution networks and research and development capabilities.
  
  F&N has demonstrated great resolve when required to exit an existing business; e.g. the ending of our licensing partnership with The Coca-Cola Company in Singapore, Malaysia and Brunei allowed F&N to regain full control of all aspects of our Soft Drinks business, placing us in a better position to face challenges in this highly competitive environment, as well as realise future growth opportunities. This strategic move had proven successful as Soft Drinks recorded strong volume and revenue growth since the expiry of the licensing agreements. To date, F&N remains a leading beverage player in Singapore and Malaysia.
  

• Performance Targets

  What are F&N's key performance indicators?

  Growth target: F&N aims to achieve a long-term sustainable growth rate averaging 10% per annum.
  
  ROE target: We are targeting to raise our ROE to above 10%.
  
  
  
  

  What is F&N's asset allocation policy?

  Capital is allocated within F&N on the basis of merit. A key consideration is the ability of an investment to meet internal returns criteria.
  
  
  
  

  What are F&N's capital expenditure requirements?

  The recurring capital expenditure is about $100 million per annum.
  
  
  
  

  What is F&N's target gearing?

  The Group aims to keep the group net gearing to 0.8 times. As at 30 September 2019, the Group has net debt of $409 million (or gearing of 0.12x). 
  
  
  
  

  How is senior management compensated?

  Listed subsidiaries such as Fraser & Neave Holdings Bhd have independent compensation schemes. Management compensation for the rest of the Group is structured in a combination of fixed and variable compensation, including share-based remuneration incentive plans. F&N benchmarks executive remuneration to corporate and individual performance, based on an annual appraisal of employees and using indicators such as core values, competencies, key performance indicators, performance rating and potential of employees. Long-term incentive schemes are put in place to motivate and reward employees and align their interests to maximise long-term shareholder value. These are reviewed by the Remuneration Committee to ensure that compensation is appropriate and competitive.
  
  

• Shareholder Value

  What is F&N's dividend policy?

  In determining dividends, the Board balances the need for a satisfactory return to shareholders against the company's investment requirement to ensure sustainable growth in the future. Over the years, the Board has maintained a track record of generous shareholder distributions.  The Board remains committed to paying approximately fifty percent (50%) of Group Attributable Profit Before Fair Value Adjustment and Exceptional Items.
  
  

  For the financial year ended 30 September 2019, the directors have recommended a final dividend of 4.0 cents, which together with the interim dividend of 1.5 cents paid earlier brings total dividend for the year to 5.5 cents per share, an increase of 22% over last year's dividend of 4.5 cents.
  
  

• Human Capital

  What succession planning is in place for F&N's senior management team?

  The Remuneration Committee reviews the development and succession plans for key management and the leadership pipeline for the Company annually.The Company also identifies, develops and attracts high potential employees, through mentoring, training and job rotation, for them to be groomed to take on bigger jobs and leadership roles at the appropriate time.