Message from Chairman of the Board

We still committed to expand this business which is our expertise to create a stable and sustainable business growth.

To: Company Shareholders BEC World Public Company Limited

8,310

Million Baht

Total Revenues in 2019

2019 was a challenging year for the total TV industry. Even though the NBTC approved the exit of 7 digital TV channels, returning their licenses under Section 44, competition remains fierce amongst the 15 channels still operating, amidst a stagnant advertising market. Advertising revenue for BEC World in 2019 was at 6,743 million Baht, 22% lower than in 2018 at 8,643 million Baht, while total non-advertising revenue was up 6% to 1,567 million Baht from several big concerts and shows. However, revenue from copyrights and other services decreased by 87 million Baht, mainly due to a missed opportunity in simulcast revenue from our global licensing business.

Resulting impact to BEC World’s bottom line was lower, with net loss of -397 million Baht, down 20.3% from -330 million Baht in 2018, primarily due to gain from the return of two digital TV licenses (Ch.28 & Ch.13) and reduced programming & network costs. Selling and administrative expenses decreased 4.2% despite one-time expenses from compensation expenses (severance pay) from organization downsizing. However, we expect these savings from restructuring to be fully realized in 2020.

Despite a loss in profit compared to the previous year, BEC World’s financial position remains stable, generating cashflow from operations of 2,442 million Baht in 2019. Cash and cash equivalents as of December 31, 2019 was at 2,665 million Baht, which increased by 549 million Baht from December 31, 2018. This increase was mainly from the return of the two digital TV licenses.

2020 continues to be challenging both in terms of global and domestic factors impacting the economy. Already in 1Q/2020, concerns over the COVID-19 outbreak has resulted in (a) lower GDP growth outlook for the year and (b) subdued domestic consumption, which directly affects local advertising spend. However, we remain hopeful that a return in domestic spending will take place within 3Q/2020, resulting in a recovery of advertising expenditure. Whilst there are headwinds, we continue our journey to transform BEC World, starting the year with a content strategy focusing on a wider prime time (18.00 to 22.35), supported by our improved TV ratings performance in 1Q/2020 versus 4Q/2019, while better monetizing non-prime time with new partners. We are also committed to double non-advertising revenue from our global licensing and online businesses, half of which is already secured, to mitigate impact from a lower TV market and build a foundation for future growth. Last but not least, cost savings measures of at least 10% have already been identified, which include, but are not limited to, analog switch-off, programming cost reductions, and ongoing organization restructuring. These efforts are our top priority this year to ensure we become a profitable company.

On behalf of the Board of Directors, we would like to express our sincere appreciation to our shareholders, customers, agencies, partners, artists, directors, and employees for the ongoing support. We are committed to grow BEC World to become “Thailand’s leading content & entertainment platform” as outlined in our newly updated vision statement, while building a solid foundation for the company to grow new sources of revenue and profitability. We look forward to many more exciting years to come.

Mr. Somchai Boonnamsiri

Chairman of the Board

Mr. Ariya Banomyong

President