PCPPI - Petition For Voluntary Delisting and Annexes (Execution Copy 2020-09-15)

Annex A (Corporate Secretary's Certificate
containing the resolutions passed

by the Board of Directors of PCPPI
approving the Voluntary Delisting)

Annex B (Affidavit of Publication of the
Notice of the Voluntary Delisting and
the Tender Offer as published by
PCPPI in the Manila Times on
11 September 2020)
Annex C (Initial Tender Offer Report in
SEC Form 19-1 filed with
the SEC on 15 September 2020)

September 15, 2020
PEPSI-COLA PRODUCTS PHILIPPINES, INC.

Km. 29 National Road, Tunasan,
Muntinlupa City, Metro Manila,
Philippines 1773
Attention: MR. FREDERICK DY ONG

Chief Executive Officer
MR. YOUNG DUK KANG

SVP – Chief Strategy Officer Compliance Officer
and Data Protection Officer
ATTY. KRISTINE N.L. EVANGELISTA

Corporate Secretary
Re: Tender Offer by LOTTE CHILSUNG BEVERAGE CO. LTD.

to the shareholders of Pepsi-Cola Products Philippines, Inc.
=================================================
Ladies and Gentlemen:
We write in connection with the tender offer by LOTTE CHILSUNG BEVERAGE CO. LTD. (“Lotte Chilsung”)
to acquire up to 77,858,236 common shares in PEPSI-COLA PRODUCTS PHILIPPINES, INC. (“PCPPI”) from
all shareholders of PCPPI other than Lotte Chilsung, Lotte Corporation and Quaker Global Investments B.V.
In compliance with the rules and regulations implementing the Securities Rgeulation Code, enclosed herewith
is the Tender Offer Report, a copy of which has been filed with the Securities and Exchange Commission and
the Philippine Stock Exchange, Inc. on 15 September 2020.
To provide as much information on the Bidder's tender offer as possible, we respectfully request that the
Company provide details of and information relating to the foregoing to its common shareholders as appropriate
or as may be convenient for the Company. Furthermore, in order to disseminate information on the Bidder's
tender offer and in anticipation of the usual queries in relation thereto, we respectfully request the Company to
provide access to the Tender Offer Report to its common shareholders through the Company’s usual disclosure
procedures.
Very truly yours,
LOTTE CHILSUNG BEVERAGE CO. LTD.

Bidder
By:
LUIS MANUEL L. GATMAITAN

Authorized Representative
MOISES RONETTE C. COLOBONG

SECURITIES AND EXCHANGE COMMISSION
SEC FORM 19-1
TENDER OFFER REPORT
Check the appropriate box:
Initial Filing
Amendment
Amendment No.
Items Amended by the Filing
1. Exact Name of Subject Company as Specified in its Charter:
(a) Address of Principal Offices
Km. 29 National Road, Tunasan, Muntinlupa City
Postal Code: 1773
(b) SEC Identification Number 160968
(c) (SEC Use Only)

Industry Classification Code
(d) BIR Tax Identification Number 000-168-541
2. Name of Bidder:
(a) Address of Bidder
4th & 5th Fl., Lotte Castle Gold, 269 Olympic-ro, Songpa-gu, Seoul, South Korea
Postal Code 138-727
3. Title or Class of Securities Subject to Tender Offer
Common Shares
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Item 1. Subject Company and Class of Security Subject to the Tender Offer
(a) The subject company is Pepsi-Cola Products Philippines, Inc. (“PCPPI” or “Company”), a corporation duly
organized and existing under Philippine laws and with principal office at Km. 29 National Road, Tunasan,
Muntinlupa City.
(b) As of August 31, 2020, the authorized capital stock of PCPPI is Seven Hundred Fifty Million Pesos
(Php750,000,000.00) divided into Five Billion (5,000,000,000) shares of common stock, with a par value of
Fifteen Centavos (Php 0.15) per share, of which Three Billion Six Hundred Ninety Three Million Seven
Hundred Seventy Two Thousand Two Hundred Seventy Nine (3,693,772,279) common shares are issued,
outstanding and fully paid-up equivalent to Five Hundred Fifty Four Million Sixty Five Thousand Eight
Hundred Forty One and 85/100 Pesos (Php554,065,841.85).
(c) On September 9, 2020, the Board of Directors of the Company approved the voluntary delisting (the
“Delisting”) of the Common Shares from the Main Board of the Philippine Stock Exchange, Inc. (the
“PSE”). As part of the Delisting, the Bidder shall undertake a delisting tender offer under such terms and
conditions as it may determine. In relation to the Delisting and in accordance with the delisting rules and
regulations of the PSE (the “Delisting Rules”), the Bidder shall undertake the tender offer (the “Tender
Offer”) to acquire up to 77,858,236 Common Shares held collectively by all shareholders of the Company
other than the Bidder, Lotte Corporation, and Quaker Global Investments B.V. (the “Non-Public
Shareholders”), subject to the following conditions:
(i) The obligation of the Bidder to purchase the Tender Offer Shares through the tender offer will be under
the condition (among other conditions that the Bidder may prescribe) that during the Bidder’s tender
offer, the Common Shares will have been:
(1) Validly tendered by the Bidder’s shareholders other than the Non-Public Shareholders;
(2) Eligible for or otherwise capable of being purchased by the Bidder; and
(3) Accepted for purchase by the Bidder;
in each case, in accordance with the terms and conditions of the tender offer as prescribed by the Bidder
attached as Exhibit A hereof (the “Tender Offer Conditions”). In the event the Tender Offer
Conditions are not met, the Bidder may, upon notice to the Securities and Exchange Commission
(“SEC”) and the PSE, withdraw the tender offer.
(ii) upon completion of the tender offer, at least 97% of the total listed and outstanding Common Shares of
the Bidder shall collectively be held by the Non-Public Shareholders.
The Bidder has agreed with the other Non-Public Shareholders to delist the Company from the PSE. On
September 15, 2020, the Company filed a petition for the Voluntary Delisting (the “Delisting Application”).
Subject to the Tender Offer Conditions, and pursuant to the Delisting Application and the Delisting Rules,
the Bidder proposes to acquire, through a tender offer (the “Tender Offer”) up to 77,858,236 Common
Shares (the “Tender Offer Shares”) held collectively by all shareholders of the Company other than the
Non-Public Shareholders.
The Tender Offer is being made at the price of ONE PESO AND 95/100 (Php 1.95) per share (the
“Tender Offer Price”), which is payable in cash or by check as hereafter provided.
The Tender Offer Price does not include customary selling charges amounting to 0.621% of the total
transaction value (excluding broker’s commission), which shall be levied on the Tendering Shareholder’s
account, and shall include:
(1) Stock transaction tax of 0.6% of the value of the transaction;
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(2) Securities Clearing Corporation of the Philippines fee of 0.01% of the value of the transaction;
(3) PSE transaction fee of 0.005% of the value of the transaction;
(4) SEC Fee of 0.005% of the value of the transaction; and
(5) Stock Investment Protection Fund fee of 0.001% of the value of the transaction;
(collectively, the “Selling Charges”).
After deducting the Selling Charges from a tendering shareholder’s account, the net Tender Offer Price is
estimated to be Php1.9324 per share. Other fees such as lodgment fee and EQ trade transfer fee (as applicable)
are also for the account of the Tendering Shareholder. The selling broker’s commission, including value
added tax, shall be payable by the Tendering Shareholder, subject to mutual agreement between the
Tendering Shareholder and the broker.
The Tender Offer gives existing shareholders of the Company the opportunity to sell their Common Shares
through the facilities of the PSE prior to the Delisting, and realize their investment at a premium to (meaning
an amount that is more than) the current trading price of the Common Shares as of September 9, 2020, the
date on which the Board of Directors of the Company approved the Delisting. The Tender Offer Price of
ONE PESO AND 95/100 (Php 1.95) per Common Share represents a 4.24% premium over the six-month
volume weighted average price (“VWAP”) and a 3.83% premium over the three-month VWAP of the
Company’s Common Shares.
A holder of the Common Shares should be aware that following completion of the Tender Offer, assuming
that the Tender Offer Conditions are met and the Delisting is approved by the PSE, any Common Shares
will no longer be available for trading on the PSE, and this may impact the ability of a holder of the
Common Share to sell his/her/its Common Shares. In addition, any subsequent sale or transfer of
his/her/its Common Shares will be subject to the prevailing capital gains tax (levied on any capital gain
generated by such holder through such sale of transfer) and documentary stamp tax as provided in Section
3(b)(i) of this Report, instead of the stock transaction tax applicable to sales of listed shares of stock
transacted through the PSE.
The Bidder has engaged Unicapital, Inc., an independent financial advisor (the “IFA”), to give a fairness
opinion on PCPPI (the “Fairness Opinion”). The IFA was of the opinion that the Tender Offer Price of ONE
PESO AND NINETY FIVE CENTAVOS (Php 1.95) per share that is fair from a financial point of view as
of September 4, 2020. A copy of the Fairness Opinion Report is attached as Exhibit B.
The Tender Offer will commence at 9:00am on September 16, 2020 and end at 5:00pm on October 13, 2020
(the “Tender Offer Period”). The Bidder reserves the right to extend the Tender Offer Period with the
approval of the SEC and notice to the PSE.
For Certificated or Scrip Shareholders
Tendering shareholders who hold stock certificates and who wish to offer all or a portion of their Common
Shares for acceptance and sale to the Bidder should, within the Tender Offer Period: (i) present their original
stock certificates to the Stock and Transfer Agent for authentication by the Stock and transfer Agent; (ii)
upon due authenticating by the Stock Transfer Agent, submit their original stock certificates duly endorsed
in blank and the duly accomplished Application to Tender Shares (the “Application”) together with all the
requirements stated therein, to the Tender Offer Agent at the address as stated below.
For Certificated or Scripless Shareholders
Tendering Shareholders whose shares are lodged with the Philippine Depository & Trust Corp. (“PDTC”)
should instruct their brokers (“Participating Brokers”) to accomplish and submit, on their behalf, the duly
accomplished Application, together with all the requirements stated therein, to the Tender Offer Agent, and
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instruct their Participating Brokers to electronically transfer their shares to the Tender Offer Agent for receipt
by the tender Offer Agent prior to 12:00 pm on October 13, 2020 in order to participate in the Tender Offer.
A Participating Broker is required to comply with the Instructions to brokers attached to the Application. The
terms of the Application and the Instructions to brokers shall form integral parts of the Tender Offer
Condition.
Delivery of each required document in relation to the Tender Offer to the Tender Offer Agent shall be deemed
made only upon actual receipt thereof by the Tender Offer Agent. The Bidder or the Tender Offer Agent
reserves the right to require presentation or submission of any additional documents for the purpose of,
among others, enabling the Bidder or the Tender Offer Agent to determine from such additional documents
submitted by a tendering shareholder (or any person acting on its behalf, including any participating Bidder),
the validity, eligibility, and acceptability of any Common Shares of the Company tendered pursuant to the
Tender Offer.
Tender Offer Agent
First Metro Securities Brokerage Corporation

18F PSBank Center
777 Paseo de Roxas cor. Sedeño St.
Makati City
Ronald Emmanuel A. Co
Head - Operations
(02) 8859-0672
Email: [email protected]
Christine U. Chan
Head - Customer Management Dept.
(02) 8859-0688
Josephine O. So
Head - Securities Settlements
(02) 8859-0628
Securities Settlement Unit

Stock Transfer Agent
Stock Transfer Service Incorporated

Address : 6784, Unit D 34/F Rufino Pacific Tower, Ayala Avenue, Makati
Tel. No.: (02) 8403-2410/8403-2412
Fax No.: (02) 8403-2412
All the tendered and accepted Tender Offer Shares accepted for purchase will be purchased by the Bidder
via a block sale through the facilities of, and subject to approval by, the PSE, on or about October 26, 2020
(the “Cross Date”), unless the Tender Offer Period is extended with the prior approval of the SEC and notice
to the PSE. In this case, the block sale for the Tender Offer Shares (subject to approval of the PSE) will be on
or around the 10th business day after the end of the extended Tender Offer Period. For purposes hereof, a
“business day” shall mean any day other than a Saturday, Sunday, or holiday on which banks are required to be
open for business in Makati City, Philippines.
The maximum aggregate purchase price of the Tender Offer Shares that may be payable by the Bidder is
approximately Php 151,823,560.20. KEB Hana Bank has confirmed that the resources available to the Bidder
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are sufficient to satisfy full acceptance of the Tender Offer Shares. A copy of the confirmation by KEB Hana
Bank is attached as Exhibit C.
PCPPI’s shares are listed and traded on the Main Board of the PSE. The high and low sales price for the
Company’s common shares traded on the PSE for each quarter of 2018 and 2019, and the first and second
quarters of 2020 are set out below:
Closing Price per Common Share

(in Php)
High Low
2018 1st quarter 3.03 2.17
2nd quarter 2.89 2.2
3rd quarter 2.35 1.66
4th quarter 1.81 1.29
2019 1st quarter 1.51 1.34
3rd quarter 2.15 1.67
4th quarter 1.92 1.27
2020 1st quarter 1.92 1.30
Item 2. Identity and Background
Lotte Chilsung is a corporation duly organized and existing under the laws of the Republic of Korea, with
principal office address at 4th & 5th Fl., Lotte Castle Gold, 269 Olympic-ro, Songpa-gu, Seoul, South Korea.
Lotte Chilsung was established in 1967 to engage in manufacturing and selling of soft drink, liquor, fruit/vegetable
drink, cereal drink, food and other beverages. On June 21, 1973, Lotte Chilsung listed its stock on the Korea
Exchange.
As of June 30, 2020, the Bidder has an authorized capital stock of KRW12,000,000,000 (equivalent to
Php515,242,593.39 @ Php1.00 to KRW23.29), divided into 2,400,000 shares with a par value of KRW5,000 per
share (equivalent to Php214.68 @ Php1.00 to KRW23.29) out of which 600,000 are preferred shares.
(a) Persons Controlling the Bidder
Lotte Chilsung is a subsidiary of Lotte Corporation, one of the principal shareholders of PCPPI. As of June
30, 2020, Lotte Chilsung has a total of 7,993,460 common shares issued and outstanding, of which 2,121,660
common shares equivalent to 26.54% of its total issued and outstanding capital stock is owned by Lotte
Corporation. Lotte Corporation is the single-largest shareholder of Lotte Chilsung.
Lotte Corporation is a corporation duly organized and existing under the laws of the Republic of Korea with
principal office address at Seoul, South Korea. Lotte Corporation was organized in 1967 to engage in the
confectionary, food and beverage, retail, and chemical business. In 2017, Lotte Corporation was formally
established through the divestiture and merger of the four (4) public Lotte affiliates.
(b) Members of the Board of Directors of the Bidder and the Person Controlling the Bidder
(i) The members of the board of directors of the Bidder are as follows:
Name Citizenship Position Business Address

Lee, Younggoo Korean Executive Director Lotte Castle Gold, 269,
Olympic-ro, Songpa-gu, Seoul
Korea
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Lee, Dong Jin Korean Executive Director Lotte Castle Gold, 269,
Korea
Lim, Jun Beom Korean Executive Director Lotte World Tower, 300
Korea
Chu, Gwang Sik Korean Non-Executive Director Lotte World Tower, 300
Korea
Moon, Jung Hoon Korean Independent Director -
Kim, Jong Yong Korean Independent Director -
Lee, Boc Sil Korean Independent Director -
Paek, Won Sun Korean Independent Director -
Han, Bohyung Korean Independent Director -
(ii) The members of the board of directors of Lotte Corporation are as follows:

Shin, Dong-Bin Korean Executive Director Lotte World Tower, 300
Korea
Hwang, Kak-gyu Korean Executive Director Lotte World Tower, 300
Korea
Song, Yongdok Korean Executive Director Lotte World Tower, 300
Korea
Yoon, Jongmin Korean Independent Director -
Kwak, Su-Keun Korean Independent Director -
Kwon, O-Gon Korean Independent Director -
Lee, Youn-Ho Korean Independent Director -
Kim, Byung-Do Korean Independent Director -
Lee, Jang Young Korean Independent Director -
(c) Key Officers of the Bidder

Lee, Younggoo Korean CEO/President Lotte Castle Gold,
269, Olympic-ro,
Songpa-gu, Seoul
Korea
Lim, Jun Beom Korean Chief Financial Officer Lotte Castle Gold,
269, Olympic-ro,
Songpa-gu, Seoul
Korea
(d) Involvement in Legal Proceedings
(i) During the last five (5) years, neither the Bidder nor Lotte Corporation has been convicted in a criminal
proceeding.
(ii) Neither the Bidder nor Lotte Corporation is currently involved, and in the past five (5) years have not
been involved, in any criminal or civil proceedings before any judicial or administrative body of
competent jurisdiction, domestic or foreign, where as a result of such proceedings, the Bidder or Lotte
Corporation is or was subject to any order, judgment or decree, not subsequently reversed, suspended
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or vacated, permanently or temporarily enjoining, barring, suspending or otherwise limiting
involvement in any type of business, securities, commodities or banking.
(iii) To the best of the Bidder’s knowledge, the current members of the board of directors and key officers
of the Bidder are not presently involved, and during the past five (5) years have not been involved, in
criminal, bankruptcy or insolvency investigations or proceedings. To the best of the Bidder’s
knowledge, these people have not been convicted by any final judgment of any offense punishable by
the laws of its home country, of the Republic of the Philippines or of the laws of any other nation or
country.
(iv) To the best of the Bidder’s knowledge, the current members of the board of directors and key officers
of the Bidder are not currently involved, and during the past five (5) years have not been involved, in a
civil proceeding of a judicial or administrative body of competent jurisdiction, domestic or foreign, and
as a result of such proceeding were or are subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, permanently or temporarily enjoining, barring, suspending or otherwise
limiting involvement in any type of business, securities, commodities or banking.
Item 3. Purpose of the Tender Offer and Plans or Proposals of the Bidder
a) Purpose of the Tender Offer
On September 9, 2020, the Board of Directors of PCPPI approved the Delisting of the Common Shares from
the Main Board of the PSE, and on September 15, 2020, the Company filed the Delisting Application with
the PSE.
Under the Delisting Rules, a petition for voluntary delisting of listed shares will require the conduct of a
tender offer to all stockholders of record of the listed company by the listed company itself, or the persons(s)
proposing the delisting thereof.
Pursuant to the Delisting Application and in compliance with the Delisting Rules, the Bidder proposes to
acquire, through the Tender Offer, the Tender Offer Shares subject to the Tender Offer Conditions. Upon
completion of the Tender Offer and assuming the Tender Offer Threshold Condition is met, more than 95%
of the total listed and outstanding Common Shares of PCPPI will collectively be held by the Bidder and the
Non-Public Shareholders.
The Tender Offer gives existing shareholders of PCPPI the opportunity to sell their Common Shares through
the facilities of the PSE prior to the Delisting. The Tender Offer Price is slightly higher than the current
trading price of the Common Shares, and represents a 4.24% premium over the six-month volume weighted
average price (“VWAP”) and a 3.83% premium over the three-month VWAP of the Company’s Common
Shares.
The IFA was of the opinion that the Tender Offer Price of ONE PESO AND NINETY FIVE CENTAVOS
(Php 1.95) per share of the Company's Common Shares from a financial point of view as of September 4,
2020. A copy of the Fairness Opinion Report is attached as Exhibit B.
b) Plans or Proposals of the Bidder
(i) Listed Status of the Company
Following completion of the Tender Offer, assuming that the Tender Offer Conditions are met and all
of the Tender Offer Shares are purchased by the Bidder in line with the Tender Offer Conditions and
the Delisting is approved by the PSE, all of the issued and outstanding Common Shares will be delisted
from, and will no longer be available for trading on the PSE.
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If the Company is delisted, its shares will no longer be traded on the PSE, which could affect investors’
ability to liquidate their investment. Also, any capital gains generated by an investor from any sale or
transfer of their Common Shares will be subject to the following taxes:
• Capital Gains Tax
Pursuant to Republic Act No. 10963, otherwise known as the Tax Reform for Acceleration and
Inclusion (“TRAIN Law”), the net capital gains realized by a citizen, resident alien, non-resident
alien, whether or not engaged in trade or business within the Philippines, or a domestic corporation
(other than a dealer in securities) during each taxable year from the sale, exchange or disposition of
shares of stock outside the facilities of the PSE, are subject to capital gains tax at the rate of 15% of
the net capital gains realized, beginning January 1, 2018.
The net capital gains realized by a resident foreign corporation or a non-resident foreign corporation
during each taxable year from the sale, exchange or disposition of shares of stock in a domestic
corporation outside the facilities of the PSE are subject to the following rates:
Not over ₱100,000 ..................................................................................... 5%

On any amount in excess of ₱100,000 ....................................................... 10%
Furthermore, if the fair market value of the shares of stock in a Philippine corporation sold outside
the facilities of the local stock exchange is greater than the consideration received by the seller or
the selling price, the amount by which the fair market value of the shares exceeds the selling price
shall be deemed a gift that is subject to donor’s tax under Section 100 of the Tax Code; provided,
however, that a sale, exchange or other transfer of such shares outside the facilities of the local stock
exchange made in the ordinary course of business (a transaction which is bona fide, at arm’s length
and free from donative intent) will be considered as made for an adequate and full consideration in
money or money’s worth and will not be subject to donor’s tax.
If an applicable income tax treaty exempts net gains from such sale from capital gains tax, an
application for tax treaty relief has to be filed with the Bureau of Internal Revenue (“BIR”) in
accordance with BIR regulations, and approved by the BIR, to avail of the exemption.
The transfer of shares shall not be recorded in the books of a company, unless the BIR has issued a
Certificate Authorizing Registration (“CAR”), certifying that capital gains and documentary stamp
taxes relating to the sale or transfer have been paid or, where applicable, tax treaty relief has been
confirmed by the International Tax Affairs Division of the BIR in respect of the capital gains tax, or
other conditions have been met.
• Documentary Stamp Tax
The original issue of shares is subject to a documentary stamp tax (“DST”) of ₱2.00 for each
₱200.00, or a fractional part thereof, of the par value of the shares issued. The Philippines imposes
a DST upon the transfer outside the PSE of shares issued by a Philippine corporation at the rate of
₱1.50 on each ₱200.00, or a fractional part thereof, of the par value of the shares.
The DST is imposed on the person making, signing, issuing, accepting or transferring the document
and is thus payable by either or both the vendor or the vendee of the shares.
The above taxes are substantially higher than the stock transaction tax (at the rate of 0.6% of the gross
selling price or gross value in cash of the shares) applicable for selling shares through the facilities of
the PSE.
Once the Company is delisted from the PSE, the Company will no longer be subject to the reporting
obligations of a listed company under the applicable rules of the PSE.
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It should likewise be noted that, under the Tender Offer Conditions, the Company reserves the right to
waive or otherwise dispense with the Tender Offer Conditions. In the event that the Company decides
to proceed with the Tender Offer (notwithstanding that the Tender Offer Conditions have not been met),
it is possible that less than 10% of the Company’s total outstanding Common Shares will be held by the
public. In such a case, the Company may be cited by the PSE for violation of the applicable minimum
public float level (currently at 10% for the Company) and, thereafter, in accordance with the Delisting
Rules, trading of the Common Shares through the facilities of the PSE may be suspended and the
Common Shares may be involuntarily delisted.
In making a decision to participate in or abstain from the Tender Offer, the holders of the Common
Shares are advised to consider carefully the impact of the Delisting of their Common Shares.
(ii) Other Plans and Proposals of the Company
As of the date hereof, except for the filing of the petition for Delisting and Tender Offer and except as
otherwise disclosed by the Company, the Company does not have any plans or proposals which relate
to or would result in:
(a) Any extraordinary non-public corporate transaction being implemented involving the Company;
(b) Any sale or transfer of a material amount of assets of the Company;
(c) Any change in the Board of Directors or management of the Company;
(d) Any material change to be implemented in the present dividend rate or policy or indebtedness or
capitalization of the Company; and
(e) Any other material change in the Company’s corporate structure or business.
Subject to the results of the Tender Offer, the Company may no longer be subject to the reporting
requirements of Rule 17 of the Securities Regulation Code (“SRC”).
Item 4. Interest in Securities of the Issuer
(a) The Tender Offer Shares is up to 77,858,236 Common Shares held collectively by all shareholders of the
Company other than the Non-Public Shareholders, representing approximately 2.11% of the Company’s
outstanding Common Shares.
Assuming all of the Tender Offer Shares are validly tendered, eligible for acceptance and accepted by the
Bidder in line with the Tender Offer Terms, the Bidder will own, upon closing and completion of the Tender
Offer, an additional of Seventy Seven Million Eight Hundred Fifty Eight Thousand Two Hundred
Thirty Six (77,858,236) Common Shares, representing approximately 2.11% of the Company’s
outstanding Common Shares.
(b) On June 18, 2020, as part of a tender offer undertaken by the Bidder from December 2019 until June 2020,
the Bidder acquired 1,132,950,431 common shares of PCPPI from public shareholders of the Company. The
shares were purchased at a tender offer price of Php1.95 per share.
In addition, as part of an internal restructuring of its shareholdings in PCPPI, Lotte Corporation intends
to transfer all of its shares in the Company to Lotte Chilsung by way of an in-kind contribution. The
contemplated transfer will undergo court-approval under the Korean Commercial Code and is expected
to be completed in December 2020 after obtainment of the court approval and compliance with applicable
Korean and Philippine share transfer regulations.
Except as disclosed above, to the best of its knowledge, the Bidder is not aware of any material transaction
regarding any of the shares of stock of the Company (including the Common Shares) during the past sixty
(60) days, by any of the directors or officers of the Bidder and/or Lotte Corporation.
Item 5. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
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Lotte Chilsung has agreed with the other Non-Public Shareholders to delist PCPPI from the PSE. Aside from the
foregoing, there are no contracts, arrangements, understandings or relationships between or among the Bidder
and any other persons with respect to any securities of PCPPI, including, but not limited to, transfer or voting of
any of the securities, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of
profits or loss, or the giving or withholding of proxies.
To the best of the knowledge of the Bidder, none of the common shares of PCPPI are pledged or otherwise subject
to a contingency, the occurrence of which gives another person voting power or investment power over such
common shares.
Other than what is disclosed in this Tender Offer Report, there are no definitive contracts, arrangements,
understandings or relationships between the Bidder and any person regarding any securities of the Company. This
includes, but is not limited to, the transfer or voting of any of the securities, finder’s fees, joint ventures, loan or
option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding
of proxies.
Item 6. Materials to be Filed as Exhibits
The following Tender Offer materials will be published, sent or made available to the holders of the Tender Offer
Shares:
Exhibit A Terms of the Tender Offer
Exhibit B Fairness Opinion dated September 4, 2020 issued by Unicapital, Inc.
Exhibit C Certification by KEB Hana Bank on sufficiency of Bidder’s resources to satisfy full
acceptance of Tendered Shares
Exhibit D Application to Tender Offer Shares with the following annexes:
Annex A Terms of the Tender Offer

Annex B Form of Irrevocable Power of Attorney for PCPPI’s individual shareholders
Annex C Form of Board Resolution for PCPPI’s corporate stockholders
Annex D Form of Partnership Resolution for PCPPI’s partnership stockholders
Annex E Form of Affidavit of Loss
Exhibit E Form of Announcement of Intention to Conduct Tender Offer
Exhibit F Form of Letter from Lotte Chilsung to PCPPI stockholders transmitting the Tender
Offer Report
Exhibit G Form of Instruction to Participating Brokers for delivering the shares to their clients to
the Tender Offer Agent, First Metro Securities Brokerage Corporation
Exhibit H Form of Letter to Tender Offer Agent from Participating Brokers Delivering Shares of
their Clients
Exhibit I List of Top 100 Shareholders of PCPPI as of June 30, 2020
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this
report is true, complete and correct. This report is signed in the City of Makati on September 15, 2020.

Bidder
By:
LUIS MANUEL L. GATMAITAN

MOISES RONETTE C. COLOBONG

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Exhibit A (Terms of the Tender Offer)
and Annex A to Exhibit D the Application to Tender Shares:

th th
4 & 5 Fl., Lotte Castle Gold, 269 Olympic-ro, Songpa-gu,
Seoul, South Korea
TERMS AND CONDITIONS

Tender Offer for Public Shares in
Pepsi-Cola Products Philippines, Inc.
Lotte Chilsung Beverage Co. Ltd. (the “Bidder” or “Lotte Chilsung”) shall purchase common shares held
by shareholders other than Lotte Corporation and Quaker Global Investments B.V., in Pepsi-Cola Products
Philippines, Inc. in accordance with the Terms and Conditions set out below (the “Terms”). Unless
otherwise specifically defined herein or the context otherwise requires, capitalized terms used in these
Terms have the same meanings given to them in Form 19-1 filed by the Bidder with the Securities and
Exchange Commission (“SEC”) and the Philippines Stock Exchange, Inc. (“PSE”) on September 15, 2020.
The Bidder Lotte Chilsung Beverage Co. Ltd.
Tender Offer Shares The Bidder intends to acquire up to 77,858,236 common shares in Pepsi-
Cola Products Philippines, Inc. (“PCPPI”) held by shareholders other than
the Bidder, Lotte Corporation, and Quaker Global Investments B.V, (the
“Non-Public Shareholders”). Lotte Chilsung and the other Non-Public
Shareholders have agreed to delist the Company from the PSE.
On September 9, 2020, the Board of Directors of the Company approved

the voluntary delisting (the “Delisting”) of the Common Shares from the
Main Board of the Philippine Stock Exchange, Inc. (the “PSE”). In relation
to the Delisting and in compliance with the delisting rules and regulations
of the PSE (the “PSE Delisting Rules”), Lotte Chilsung will undertake the
tender offer for all of the outstanding common shares of PCPPI owned and
held by shareholders other than the Non-Public Shareholders (the “Tender
Offer”), consisting of approximately 77,858,236 Common Shares (the
“Tender Offer Shares”) equivalent to 2.11% of the total issued and
outstanding capital stock of PCPPI as of August 31, 2020.
Tender Offer Price The Bidder shall purchase all Tender Offer Shares duly tendered by the
tendering minority PCPPI shareholders (“Tendering Shareholders”), at a
price of Php1.95 per share (the “Tender Offer Price”), payable in cash,
before deduction for the customary selling charges amounting to 0.621%
of the total transaction value (excluding broker’s commission) and which
shall be levied on the Tendering Shareholder’s account and include:
• Stock transaction tax of 0.6% of the value of the transaction;

• Securities Clearing Corporation of the Philippines fee of 0.01% of the
value of the transaction;
• PSE transaction fee of 0.005% of the value of the transaction;
• SEC Fee of 0.005% of the value of the transaction; and
• Stock Investment Protection Fund fee of 0.001% of the value of the
transaction.
(collectively, the “Selling Charges”)
Other fees such as lodgment fee and EQ trade transfer fee (as applicable)
are also for the account of the Tendering Shareholder. The selling broker’s
commission, including value added tax, shall be payable by the Tendering
Shareholder subject to mutual agreement between the Tendering
Shareholder and the broker.
Entitlement Every PCCPI shareholder, as of any date during the Offer Period (as
defined below), is entitled to sell all its/his/her Tender Offer Shares to the
Bidder in accordance with, and subject to, these Terms of the Tender Offer.
Tender Offer Period The Tender Offer will commence at 9:00am on September 16, 2020 and
end at 5:00pm on October 13, 2020. The Bidder reserves the right to
extend the Tender Offer Period with the approval of the Securities and
Exchange Commission (“SEC”).
Closing Date (End of 5:00pm of October 13, 2020

Tender Offer Period)
Applications by Scrip Scrip shareholders (i.e. shareholders who hold stock certificates) of PCPPI
Shareholders who wish to sell their shares to the Bidder must complete the Application
to Tender Common Shares (the “Application”) in triplicate and submit the
same with the attachments set out below to First Metro Securities
Brokerage Corporation (the “TO Agent”) at the address set forth below.
The Application must be received by the TO Agent not later than the end
of the Tender Offer Period:

18F PSBank Center
Makati City
Head - Operations
(02) 8859-0672
Christine U. Chan
(02) 8859-0688
Josephine O. So
(02) 8859-0628

a. Original PCPPI stock certificates duly endorsed, subject to verification

by the TO Agent as valid and authentic certificates. For those whose
stock certificate/s is/are lost: (i) one (1) original of a duly notarized
affidavit of loss (in substantially the form of Annex E to the Application);
(ii) copy of the affidavit of loss as published in a newspaper of general
circulation; (iii) affidavit of publication (of affidavit of loss) executed by
the publisher; and (iv) bond issued in favor of PCPPI by a financial
institution or other company acceptable to the TO Agent, in the amount
of the Tender Offer Price of the shares covered by a lost stock
certificate.
b. For Individuals:
i. For Tendering Shareholders acting through an attorney-in-
fact, a duly notarized Irrevocable Power of Attorney (in
substantially the form attached as Annex B to the Application).
For married individuals who are Philippine citizens, their
respective spouses must sign the space provided in the
Irrevocable Power of Attorney to indicate marital consent to
the sale of the Tender Offer Shares.
ii. Photocopies of two (2) valid identification cards issued by a
government agency of the Republic of the Philippines,
showing the Tendering Shareholder’s signature and
photograph, i.e., driver’s license, tax identification card, Social
Security Services/Government Services and Insurance
System card, or passport.
iii. Duly accomplished Additional Personal Information Sheet
and signature card containing the specimen signature of the
Tendering Shareholder and verified by the Tendering
Shareholder’s broker or by an officer of the bank at which the
Tendering Shareholder maintains an account (the signature
card must specify the name of the broker and the broker’s
signatory or the name of the bank and the bank’s signatory,
as the case may be).
iv. Duly accomplished Lodgment Form, Authority to Lodge Form
and Indemnity Letter in favor of the TO Agent authorizing the
TO Agent to return the stock certificates to the Tendering
Shareholder if the lodgment is rejected.
For Tendering Shareholders acting through an attorney-in-
fact, photocopy of an identification card of the registered
Tendering Shareholder shall form part of the notarized
irrevocable power of attorney.
For Tendering Shareholders domiciled abroad, the power of
attorney should be consularized. If the Tendering Shareholder
is unable to sign, the following should be presented:
i. Medical certificate explaining the condition of the
Tendering Shareholder, issued by a medical
practitioner and indicating the doctor’s license number;
and,
ii. Photocopy of the doctor’s hospital identification cards.
For heirs who wish to tender inherited shares covered by stock

certificate/s still in the name of the decedent:
i. Shares inherited by Judicial Settlement
(a) Stock certificate in the name of the decedent;

(b) Death certificate certified true and correct by
the Civil Registrar;
(c) Certified true copy of the relevant court order;
(d) Original Bureau of Internal Revenue Certificate
Authorizing Registration; and
(e) Specimen signature card and photocopies of
two (2) valid government-issued identification
cards
ii. Shares inherited by Extra-Judicial Settlement

(c) Original or certified true copy of extra-judicial
settlement stamped received or annotated by
the Registrar of Deeds;
(d) Affidavit of publication executed by the
publisher;
(e) Original Bureau of Internal Revenue Certificate
Authorizing Registration;
(f) Two (2) years heirs’ bond; and
(g) Specimen signature card and photocopies of
cards.
c. For Corporations:
i. Notarized Board Resolution (in substantially the form of the
Secretary’s Certificate attached as Annex C to the
Application) authorizing the sale of the Tender Offer Shares,
designating signatories for the purpose and indicating the
specimen signatures of those signatures.
ii. Copy of SEC Certificate of Incorporation or equivalent
constitutive document, certified as a true copy of the original
by the Corporate Secretary or equivalent person having
official custody of company records.
iii. Copy of the latest Articles of Incorporation and By-laws of the
Tendering Shareholder or equivalent charter documents,
each certified as a true copy of the original by the Corporate
Secretary or equivalent person having official custody of
company records.
iv. Duly accomplished Additional Personal Information Sheet
Tendering Shareholder’s designated authorized signatories
and verified by the Tendering Shareholder’s broker or by an
officer of the bank at which the Tendering Shareholder
maintains an account (the signature card must specify the
name of the broker and the broker’s signatory or the name of
the bank and the bank’s signatory, as the case may be)
v. Duly accomplished Lodgment Form, Authority to Lodge Form
d. For Partnerships:
i. Copy of SEC Certificate of Registration or equivalent
constitutive document certified as a true copy of the original
by the Partnership Secretary or equivalent person having
official custody of the partnership records.
ii. Copy of the latest Articles of Partnership of the Tendering
Shareholder or equivalent charter document, certified as a
true copy of the original by the Partnership Secretary or
equivalent person having official custody of the partnership
records.
iii. Notarized Partnership Resolution (in substantially the form of
the Partners’ Certificate attached as Annex D to the
specimen signature of the signatories.
Application by Scripless Scripless shareholders (i.e., PCPPI shareholders whose shares are
Shareholders lodged with the Philippine Depository and Trust Corporation (“PDTC”) who
wish to accept the offer must complete the Application in triplicate and
submit the same with the attachments referred to in item (b), (c) or (d)
above (as applicable) to the TO Agent at the address set out above no later
than the end of the Tender Offer Period.
In addition, such Scripless Tendering Shareholders must instruct their

brokers to electronically transfer their Tender Offer Shares to the TO
Agent. The member broker(s) of the PSE who hold(s) the Tender Offer
Shares, should, upon receipt of the notice of the Tender Offer, immediately
notify the relevant Tendering Shareholder that should the Tendering
Shareholder wish to sell its/his/her shares in PCPPI to the Bidder, the
Tendering Shareholder must instruct the said participating broker to
electronically transfer its/his/her shares to the TO Agent, as custodian for
such shares, not later than 5:00pm on October 13, 2020.
When tendering shares, the participating brokers are required to submit

the letter to the TO Agent (in the form of Annex A to the Instructions to
Participating TO Agents, which is Exhibit F to the SEC Form 19-1 filed by
the Bidder with the SEC) not later than 5:00pm on October 13, 2020 as
well as the duly completed Application.
Conditions to Acceptance The Tender Offer Shares shall be deemed accepted by the Bidder if the
TO Agent has determined that the Tendering Shareholders had submitted
the required documents and obtained all the required approvals and
authorizations to enable it to transfer the Tender Offer Shares to the Bidder
before the expiration of the Tender Offer.
The obligation of the Bidder to purchase the Tender Offer Shares through
the tender offer will be subject to the condition (among other conditions that
the Bidder may prescribe) that, during the Bidder’s tender offer, the
Common Shares will have been:
(1) Validly tendered by the Bidder’s shareholders other

than the Non-Public Shareholders;
(2) Eligible for or otherwise capable of being purchased

by the Bidder; and
in each case, in accordance with the terms and conditions of the tender
offer as prescribed by the Bidder (the “Tender Offer Conditions”). In the
event the Tender Offer Conditions are not met, the Bidder may, upon notice
to the Securities and Exchange Commission (“SEC”) and the Philippine
Stock Exchange (“PSE”), withdraw the tender offer.
Acceptance of Application Acceptance of Application is subject to the terms hereof. The Bidder,
through the TO Agent, at its sole discretion, shall have the right to reject
any Application that does not qualify and accept qualified Applications at
any time before the Tender Offer Shares are sold to the Bidder through the
facilities of the PSE. Applications (i) received after the Tender Offer Period,
or (ii) that are not properly completed, or (iii) lack any of the requirements,
will be rejected.
The TO Agent will accept Applications on the condition that it is able to

verify the signature/endorsement on PCPPI stock certificates by verifying
the signature on file with PCPPI’s stock transfer agent, if such is available.
The TO Agent will rely on the signature affixed on the Application and on
the supporting identification documents or board resolution when it verifies
the endorsement of the relevant PCPPI stock certificates. The TO Agent
shall not be required to make further inquiries into the authenticity of the
signature. If the TO Agent is unable to verify the signature on the
Application or the endorsement of the PCPPI stock certificate, the TO
Agent will also reject the Application.
Tendering Shareholders whose Applications have been rejected, in

whole or in part, shall be notified of such by the TO Agent on or before
October 26, 2020.
All Applications shall be accepted only in the Philippines.
Rejected shares shall be returned in the same form they were received to
the Tendering Stockholder’s broker (for scripless shares) or to the
Tendering Stockholder (for certificated shares) no later than ten (10)
business days from the end of the Tender Offer Period. Any and all costs
and expenses incurred in connection with the return of the rejected shares
shall be borne by the Tendering Shareholder.
Cross Date The accepted Tender Offer Shares are intended to be crossed at the PSE
on or about October 26, 2020 (the “Cross Date”), subject to the approval
by the PSE of the crossing of the Tender Offer Shares. The Cross Date
shall be on or about 10 business days from the close of the Tender Offer
Period.
Any change in the Cross Date shall be announced by the Bidder in the
following newspapers of general circulation in the Philippines: The Manila
Times and Business Mirror.
Settlement The sale and purchase of the accepted Tender Offer Shares shall be
settled on the Cross Date (the “Settlement Date”), subject to any
extension of the Tender Offer Period with the approval of the SEC.
All accepted Applications shall be settled only in the Philippines.
The TO Agent will act as agent for the Tendering Shareholders for the
purpose of receiving the check payments from the Bidder and transmitting
the check payments to such Tendering Shareholders. The check
payments to be issued to Tendering Shareholders shall be made available
by the TO Agent for pick-up by the Tendering Shareholders starting on
Settlement Date at its offices.
When collecting payment, the Tendering Shareholders shall present the

“Applicant’s Copy” of the Application as well as proper government
identification (i.e., driver’s license, tax identification card, Social Security
Services/Government Services and Insurance System card, or passport).
Duly authorized representatives shall be required to present an
authorization letter from the Tendering Shareholders.
Tendering beneficial owners of Tender Offer Shares are advised to
consult with their custodian, fiduciaries, or other similar agents to the
manner by which they may collect payment from such agents.
In any event, no payment shall be made without the TO Agent having

timely received the duly accomplished Application, the stock certificates
evidencing the Tender Offer Shares and other documents required herein.
Any payment not collected within thirty (30) business days from the Cross
Date shall be dispatched via registered mail, to the address of the
Tendering Shareholder indicated in the Application, at the risk of the
Tendering Shareholders.
Withdrawal Tendering Shareholders shall have the right to withdraw any Tender Offer
Shares at any time during the Tender Offer Period but only until October
13, 2020 at 5:00pm, by submitting a written request for the withdrawal of
the Tender Offer Shares to the TO Agent with a copy of the “Applicant’s
Copy” of the Application issued by the TO Agent.
For withdrawal of tendered shares to be effective, a written notice of

withdrawal must be received by the TO Agent before 5:00pm on October
13, 2020 at the address set forth herein. The notice must specify the name
of the Tendering Shareholder and the number of Tender Offer Shares to
be withdrawn. If the stock certificates evidencing the Tender Offer Shares
have been delivered to the TO Agent, the serial numbers shown on such
certificates must be submitted to the TO Agent prior to the physical release
of such certificates. No request for withdrawal of fractions of Tender Offer
Shares will be considered. The TO Agent shall have the right in its sole
discretion, to determine the form and validity of the notice of withdrawal,
including the time receipt thereof.
All expenses incurred by the TO Agent in respect of withdrawal of Tender

Offer Shares shall be borne by the Tendering Shareholder making the
withdrawal.
Transfer Expenses All expenses in relation to the sale of the Tender Offer Shares attributable
to the Tendering Shareholders shall be borne by the Tendering
Shareholder.
The Selling Charges will be deducted by the Bidder from the Tender Offer
Price payable to the Tendering Shareholder.
SEC Form 19-1 and other The terms set out in the Tender Offer Report (SEC Form 19-1) filed with
Tender Offer Documents the SEC on September 15, 2020 shall form integral parts of these Terms
of the Tender Offer. Any Tendering Shareholder wishes to obtain a copy of
the said Tender Offer Report may do so at the office of the TO Agent.
Copies of the Tender Offer Report have also been filed with the SEC and
PSE and submitted to PCPPI.
Inquiries For inquiries regarding the Tender Offer, please contact the following:

18F PSBank Center
Makati City
Head - Operations
(02) 8859-0672
Christine U. Chan
(02) 8859-0688
Josephine O. So
(02) 8859-0628

For inquiries on the number of shares and stock certificates, please contact
PCPPI’s Stock and Transfer Agent.:

Address: 6784, Unit D 34/F Rufino Pacific Tower, Ayala Avenue,
Makati
Tel. No.: 8403-2410/8403-2412
Fax No.: 8403-2412
Exhibit B
Fairness Opinion dated September 4, 2020
issued by Unicapital, Inc.
FAIRNESS OPINION AND VALUATION REPORT
4 September 2020
The Engagement Pepsi-Cola Products Philippines, Inc. 4 September 2020
4 September 2020 R-L3039
The Board of Directors of:

LOTTE CHILSUNG BEVERAGE CO., LTD.
4F, LOTTE Castle Gold Bldg., 269, Olympic-ro,
Songpa-gu, Seoul, Korea
Gentlemen:
Pursuant to our engagement, we are pleased to present to the Board of Directors of LOTTE Chilsung Beverage Co., Ltd. (“LOTTE Chilsung”)
the Final Valuation Report on the common shares of Pepsi-Cola Products Philippines, Inc. in accordance with the valuation methodologies
agreed upon.
The Transaction public ownership level down to 2.11%, and there remain
Pepsi-Cola Products Philippines, Inc. (“PIP” or the “Company”), is a 1,001,431,407 outstanding shares post-tender.
publicly listed company on the Philippine Stock Exchange (“PSE”),
primarily engaged in the manufacturing, sale and distribution of We understand that LOTTE Chilsung seeks to arrive at a fair and
carbonated soft drinks and non-carbonated beverages, and equitable valuation of PIP’s common shares in connection with the
confectionery products to retail, wholesale, restaurants and bar tender offer for the remaining 77,988,345 common shares of PIP
trades. held by the public equivalent to a 2.11% equity stake in PIP (the
“Transaction”).
PIP's major shareholder is LOTTE Corporation (“LC”), which has a
42.22% beneficial ownership in PIP. In March 2020, the Philippine Our Engagement
Competition Commission approved the proposed acquisition of LC's On 5 August 2020, Unicapital, Inc. (the “Financial Advisor” or “FA”
subsidiary, LOTTE Chilsung Beverage Co., Ltd. (“LOTTE or “UI”) was engaged by LOTTE Chilsung to arrive at an
Chilsung”), of up to 2,134,381,838 common shares of PIP. LOTTE independent third-party valuation and issue a fairness opinion on the
Chilsung completed its tender offer in June 2020, under which it was fair market value of PIP’s outstanding common shares subject of the
able to acquire 30.67% of the total outstanding and issued shares of Transaction.
PIP or 1,132,950,431 common shares, bringing the Company's
Fairness Opinion and Valuation Report 2|Page

Prior to this engagement, UI has not acted as a financial advisor in CPC EV/EBITDA – CY 26,660.86 31,761.24 7.22 8.60
relation to the Transaction, to PIP and any affiliates, or any of the ‘19
parties involved in the Transaction. CPC P/S – LTM ‘20 23,434.37 26,880.61 6.34 7.28
CPC P/E – LTM ‘20 4,244.94 4,869.20 1.15 1.32
For this engagement, we will receive a financial advisory fee, which CPC P/BV – LTM ‘20 8,750.23 10,037.03 2.37 2.72
is not dependent on the success of the Transaction, but upon CPC EV/EBITDA – 22,193.76 26,514.34 6.01 7.18
LTM ‘20
delivery of the Fairness Opinion and Valuation Report.
Overall Average 12,971.98 14,711.95 3.51 3.98
Fair Value 5,665.60 6,159.93 1.53 1.67
Based on the terms of reference of the engagement, UI immediately
*CY ‘19 – Calendar year ending 31 Dec. 2019
conducted a review of PIP’s financial statements as made public by
*LTM ’20 – LTM ending 31 Mar. 2020
the Company, and other publicly accessible information on PIP that Values in PhP Millions, except per share data
were considered to be relevant for the analysis. Subsequently, a
structured approach was applied using the following valuation Primary Valuation Methodologies Applied:
methodologies, when applicable, namely: In arriving at the fair value of the shares of PIP, the Financial Advisor
• Volume Weighted Average Price Approach, which examines the applied the following valuation methodologies:
trading history of PIP shares on the PSE in order to assess the • 6-month Volume Weighted Average Price
market’s perception of PIP’s value;
• 2019 Calendar-year Price-to-Earnings
• Asset-Based Approach, which entails the adjustment of the
• 2020 Last Twelve Months Price-to-Earnings
Company’s financial statements, taking into account the latest
property valuations as conducted by an independent appraisal
Complementary Valuation Methodologies as Presented:
company as necessary; and,
Accompanying the Primary Valuation Methodologies, the Financial
• Comparable Public Company Approach, which attempts to Advisor examined the following complementary methods, without
benchmark the value of PIP’s shares compared to its impact to the resulting fair valuation:
counterparts, using applicable metrics, i.e. price-earnings,
• 1-Year Volume Weighted Average Price
price-to-book value, and the like.
• Net Asset Value
Valuation Summary
• 2019 Calendar-year Price-to-Sales
Valuation Market Capitalization Share Price
Methodology Min Max Min Max • 2019 Calendar-year Price-to-Book Value
6-month VWAP 6,912.35 6,912.35 1.87 1.87 • 2019 Calendar-year EV/EBITDA
1-year VWAP 6,712.91 6,712.91 1.82 1.82 • 2020 Last Twelve Month Price-to-Sales
2-year VWAP 6,248.81 6,248.81 1.69 1.69 • 2020 Last Twelve Month Price-to-Book Value
Net Asset Value 9,142.51 9,161.07 2.48 2.48 • 2020 Last Twelve Month EV/EBITDA
CPC P/S – CY ‘19 24,562.16 28,174.24 6.65 7.63
CPC P/E – CY ‘19 5,839.50 6,698.26 1.58 1.81
CPC P/BV – CY ‘19 10,961.34 12,573.31 2.97 3.40
Our Opinion considered fairly valued within the range of PhP5,665.60 Million
In arriving at the fair value of the shares of PIP, the Financial Advisor to PhP6,159.93 Million or equivalent to PhP1.53 per share to
carefully examined the relevance of each valuation methodology PhP1.67 per share based on 3,693,772,279 shares outstanding as
used and the results of the different valuation methodologies of 30 June 2020.
performed.
Therefore, the Financial Advisor is of the opinion that the
The Financial Advisor determined that the NAV is not a suitable Tender Offer Price of PhP1.95 per share subject of the
metric for PIP due to the fact that no revaluation of assets has been Transaction is fair from a financial point of view as of 4
applied; the Company will continue to be a going concern; and, September 2020.
because it does not take into account the actual earnings and cash
flow generated by PIP from the assets. We further noted that PIP Scope and Limitations
has historically traded at below book value. Similarly, the Price-to- We have not audited or otherwise reviewed the accuracy of the
Sales, Price-to-Book and EV/EBITDA approaches were also audited financial statements which have been taken from publicly
disregarded for purposes of the valuation exercise as these are available sources. It was assumed that these financial statements
better suited for start-ups, banks and real estate companies, and are true and accurate and are reflective of PIP’s financial condition
M&A transactions, respectively. during the date of the financial statements. We have further relied
on the market value of PIP’s property, plant, and equipment as
While the Financial Advisor received financial projections, the disclosed in PIP’s audited financial statements.
figures were deemed to not be substantially sufficient for the
Financial Advisor to be able to satisfactorily verify the basis for such The preparation of the Fairness Opinion and Valuation Report by UI
projections and is unable to satisfactorily perform DCF and DDM is limited to the purpose of the Transaction.
valuation approaches.
Some of the information contained in this report may have been
The resulting valuations from the 1-year and 2-year VWAP were not taken from third-party sources or publicly available information. We
reasonable valuation metrics for PIP since historical developments have not independently verified whether such facts or information
from before 2020 are no longer reflective of recent market are true and correct.
developments’ impact on the trading price of the Company.
No representation or warranty, expressed or implied, is made by UI,
After careful examination, the 6-month VWAP approach, the CPC or its respective affiliates subsidiaries, principals, directors,
P/E – CY ’19 and CPC P/E – LTM ’20 was used to determine the shareholders, officers, employees, agents, advisors, or
fair value of PIP’s common shares subject of the Transaction. representatives, as to the accuracy or completeness of any
information, whether written or oral, contained in this Fairness
Based on the analysis undertaken and on the valuation Opinion and Valuation Report. UI expressly disclaims any and all
considerations described in the attached Valuation Report, the liability which may be based on such information, errors therein or
Financial Advisor is of the opinion that the shares of PIP may be omissions therefrom.

Nothing contained within this Fairness Opinion and/or Valuation • Final Tender Offer Report dated 18 June 2020; and
Report, is or should be relied upon as, a promise of representation • Certain publicly available financial and stock market information
as to the future performance of the Company. The (FactSet Research Systems, Inc., PSE Edge) regarding
recommendations and valuations contained therein were prepared selected listed companies in a similar line of business we
by the Financial Advisor based on information available at the time believe are comparable to that of Pepsi-Cola Products
the Valuation Report was prepared, and there are no Philippines, Inc.
representations, warranties, or other assurances that any of the
conditions set forth herein will be realized. For the purposes of our analysis, we have assumed that all financial
and other information received from all sources listed above were
We have no obligation to update this report or our recommended accurate and complete and have relied on this information without
valuation for information that comes to our attention after the date of accepting any responsibility for independent verification.
this report. This Valuation Report is based on the prevailing market,
corporate and economic conditions at the time of writing. Very truly yours,
We have also assumed that all governmental, regulatory and other
consents and approvals necessary for the consummation of the UNICAPITAL, INCORPORATED
Transaction and any of PIP’s business dealings will be obtained
without any material adverse effect on PIP.
This Fairness Opinion and Valuation Report does not constitute a Jaime J. Martirez
selling document, a recommendation to purchase or sell the shares President
of any of the companies mentioned herein, and makes no reference
to the likelihood or relative benefits of any alternative transaction.
Information Sources Pamela Louise Q. Victoriano

The following sources of information were used in the preparation of First Vice President
this report:
• Annual Reports for the periods ended Dec 31, 2019, 2018 and
2017
• Quarterly Reports for the periods ended March 31, 2020 and
2019
• Audited Consolidated Financial Statements as published on
PSE Edge;
• Interim Unaudited Financial Statements, as of the relevant date
of the report as published on PSE Edge;
About Unicapital, Inc. Pepsi-Cola Products Philippines, Inc. 4 September 2020
ABOUT UNICAPITAL
UI is a full-service investment house that is duly licensed by the SEC to provide the widest array of finance and investment-
banking product lines. Incorporated in 1994, the firm has successfully established itself as an active player in the trading of fixed
income and equity securities, the underwriting and distribution of commercial papers, bonds, preferred shares and equity issues
for listing in the Philippine Stock Exchange (“PSE”), and the provision of financial advice to its corporate clients.
On 28 June, 2018, the PSE issued memorandum CN-No. 2018-0036 (see Annex V) confirming the re-accreditation of UI as an
accredited firm for issuing Fairness Opinions and Valuation Reports for a period of five years.
The Fairness Opinion and Valuation Report was not approved by a committee created within UI but instead was subject to an
internal process of review and preparation. The Fairness Opinion for PIP was initially prepared by two analysts assigned to the
transaction. It was then reviewed by the Corporate Finance Department Head and approved by the President of the firm before
it was issued out to the Board of Directors of the Company.
Mr. Jaime J. Martirez, President and CEO. He is concurrently the President and Chief Executive Officer of Unicapital Finance
and Investments, Inc., Vice President and Director of MAJALCO, Inc., XCT Corporation, and Des Eaux Utilities Co., Inc.; Vice
President of MJ Realty; Treasurer of GJ Holdings; and President of Unoventure Inc. He also sits as Director of Unicapital
Securities, Inc., Malayan Savings and Mortgage Bank, Basic Energy Corp., Acme Pawnshops, Inc., and in several private and
publicly listed corporations that are engaged in the fields of energy, real estate, water distribution, and information technology.
He holds a degree in Business Administration from De La Salle University and took post-graduate courses from the Ateneo de
Manila Graduate School of Business. Mr. Martirez is a member of the Makati Business Club, Charter member of the Rotary
Club of Makati Ayala and a past member of the Manila Jaycees.
Ms. Pamela Louise Q. Victoriano, First Vice President, is the Corporate Finance Department Head of UI. She graduated from
the Ateneo de Manila University with a Bachelor of Science Degree in Management and has experience in a broad range of
private & public equity transactions, financial advisory, and mergers & acquisition.
While Mr. Martirez and Ms. Victoriano have extensive experience in business and finance, the Code of Ethics for professional
accountants is not applicable to their professions.

Table of Contents Pepsi-Cola Products Philippines, Inc. 4 September 2020
TABLE OF CONTENTS
ABOUT UNICAPITAL ........................................................................................................................................................................................................................... 6

1 | ABOUT PEPSI-COLA PRODUCTS PHILIPPINES, INC. .......................................................................................................................................................... 9
2 | INDUSTRY OVERVIEW ............................................................................................................................................................................................................... 14
3 | FINANCIAL AND OPERATING HIGHLIGHTS.......................................................................................................................................................................... 19
4 | VALUATION ................................................................................................................................................................................................................................... 34
ANNEX I | SUMMARY OF AUDITED CONSOLIDATED FINANCIAL STATEMENTS ............................................................................................................ 47
ANNEX II | HISTORICAL STOCK PRICE (PSE: PIP)................................................................................................................................................................... 54
ANNEX III | PEER GROUP SELECTION........................................................................................................................................................................................ 60
ANNEX IV | FINANCIAL PROJECTIONS ....................................................................................................................................................................................... 62
ANNEX V | FREE CASH FLOW TO EQUITY ................................................................................................................................................................................ 63
ANNEX VI | MANDATE LETTER...................................................................................................................................................................................................... 64
ANNEX VII | PSE ACCREDITATION............................................................................................................................................................................................... 67

About the Company Pepsi-Cola Products Philippines, Inc. 4 September 2020
1 | ABOUT PEPSI-COLA PRODUCTS PHILIPPINES, INC.


COMPANY OVERVIEW
Pepsi-Cola Products Philippines, Inc. was registered with the Philippine Securities and Exchange Commission (“SEC”) on 8 March, 1989, after
the acquisition of Pepsi-Cola Distributors of the Philippines, Inc. of the franchising and bottling rights of PepsiCo International, Inc. in 1985. It is
primarily engaged in manufacturing, sales and distribution of carbonated soft-drinks and non-carbonated beverages, and confectionery products
to retail, wholesale, restaurants and bar trades. On 27 August, 2014, the SEC approved the Company’s amendment of its Articles of
Incorporation, adding to its primary purpose the engagement in the manufacturing, sale and distribution of snacks, food and food products. The
Company is listed on the Philippine Stock Exchange (“PSE”) and has been included in the PSE composite index since 1 February, 2008. As of
30 June 2020, the Company’s authorized capital stock is at PhP750,000,000.00, divided into 5,000,000,000 common shares, of which
3,693,772,279 shares are issued and outstanding.
On 11 December 2019, the Company received a Tender Offer from LOTTE Chilsung addressed to all shareholders except LOTTE Corporation
and the Company’s Board of Directors, offering to acquire up to 2,134,381,838 qualifying common shares of the Company, as a strategic
initiative to acquire a significant economic interest in the Company. As of 31 December, 2019, LOTTE Corporation (“LOTTE Corp.”) and Quaker
Global Investments B.V. (“Quaker”) are the major shareholders of PIP with a 38.88% and 25.00% stake of the Company, respectively. LOTTE
Corp. is the holding company of LOTTE Chilsung Beverage Co. Ltd, which is one of the biggest beverage companies in South Korea. LOTTE
Corp’s Chief Executive Officer directly owns several shares of the Company, which further increases the total beneficial ownership of LOTTE
Corp. in the Company to 42.22%. Quaker was organized under the laws of the Netherlands and is a wholly owned subsidiary of PepsiCo, Inc.
which is an American multinational food, snack and beverage corporation.
On 5 February 2020, the Company disclosed to the PSE that it has been notified by LOTTE Chilsung regarding the cessation of its tender offer,
following the order of the SEC pending resolution of certain matters.
In a decision issued by Philippine Competition Commission on 26 March 2020, it approved the proposed acquisition by LOTTE Chilsung of
PIP’s common shares, stating that it “will not likely result in substantial lessening of competition” and that “there remains sufficient competitive
constraints in the market for the supply of carbonated soft drinks, non-carbonated beverage and bottled water in the country”.
In the Company’s disclosure to the PSE on 23 April 2020, the Company announced the SEC’s approval on LOTTE Chilsung’s request to re-
open and resume its mandatory tender offer in the second-half of May 2020. And on 17 June 2020, the tender offer of LOTTE Chilsung has
been completed after accepting 1.13 billion common shares at PhP1.95 per share, which effectively increased its ownership to the Company
by 30.67%. In turn, this brought down the Company’s public ownership down to 2.11% which immediately prompted the PSE to suspend trading
of PIP on the Exchange for breaching its 10.00% minimum public ownership requirement.

BUSINESS OPERATIONS
Pepsi-Cola Products Philippines, Inc. is the licensed bottler of PepsiCo (“PepsiCo”) up to year 2029, Pepsi Lipton International Limited (“Pepsi
Lipton”) as renewed up to year 2029, as well as being a licensed snacks appointee of The Concentrate Manufacturing Company of Ireland in
the Philippines. It operates two (2) major categories, namely: Carbonated Soft Drinks (“CSD”) and Non-Carbonated Beverages (“NCB”). The
Company had a third production category, the Snacks category, but was discontinued in September 2019 after operating for a little over four
(4) years, citing that the Company’s focus will be towards strengthening its CSD and NCB categories.
As of 31 December 2019, the CSD category generates 74.50% of revenue and includes household-name brands PepsiCo, 7-Up, Mountain
Dew, Mug, and Mirinda. Meanwhile, the NCB category, that generates the remaining 25.50% of revenue houses the brands Gatorade, Lipton,
Tropicana, Sting, Milkis, Tropicana - Twister, Coco Quence, Let’s Be coffee, and also includes drinking water brands Premier and Aquafina.
The major brands of the Company’s Snacks category, prior to being discontinued, were Cheetos and Lays. The Company has a broad customer
base across the Philippines; majority of which include supermarkets, convenience stores, groceries bars, sari-sari stores and carinderias.
Carbonated Soft Drinks Non-Carbonated Beverages Snacks (Discontinued)
PIP also has investments in associates Nadeco Realty Corporation (NRC) and Nadeco Holdings Corporation (NHC), from which the Company
leases land for its bottling plants and warehouses. PIP has a 40% equity stake in each of these associates.
The Company produces its products under licenses from PepsiCo, Pepsi Lipton and LOTTE Corporation and depends upon them to provide
concentrates and access to new products, but does not own any intellectual property that is material to the business. Under various agreements,
the Company is authorized to use brands and the associated trademarks owned by PepsiCo, Unilever N.V (in the case of the Lipton brand and
trademarks) and LOTTE Corporation. Trademark licenses are registered with the Philippine Intellectual Property Office.
As of 31 December, 2019, the Company had employed approximately 3,304 regular employees, where all of the regular and permanent
employees at its bottling plants and sales offices are represented by a union. Employees are primarily working at the thirteen (13) manufacturing
plants of the Company across the Philippines. As a foreign-owned entity, the Company is not permitted to own land in the Philippines, hence,
Fairness Opinion and Valuation Report 10 | P a g e
it leases land on which its owned bottling plants, warehouses, and sales offices are located, namely in: Muntinlupa City, Sto. Tomas, Rosario,
Pampanga, Naga, Cebu, Iloilo, Bacolod, Tanauan, Davao, Cagayan de Oro, and Zamboanga. The discontinued Snacks category was housed
in its facilities in Cabuyao. All properties are reported to be in good condition.
SHAREHOLDER AND SENIOR MANAGEMENT

The stockholders of PIP as of 30 June, 2020 are as follows:
Name Shares Ownership

LOTTE Corporation 1,436,315,932 38.88%
LOTTE Chilsung Beverage Co. Ltd. 1,132,950,431 30.67%
Quaker Global Investments B.V. 923,443,071 25.00%
Pcd Nominee Corp (Non-Filipino) 173,813,270 4.71%
Pcd Nominee Corp. (Filipino) 21,816,227 0.59%
Joseph Martin H. Borromeo 450,000 0.01%
Lucio W. Yan 300,000 0.01%
Rene B. Blancaver 255,000 0.01%
Winefreda O. Madarang 250,000 0.01%
Valeriano A. Lugti 150,000 0.00%
Felix S. Yu 149,998 0.00%
Ma. Celeste S. Narciso 100,000 0.00%
Jose I. Umali 100,000 0.00%
Juanito R. Ignacio 100,000 0.00%
Rosauro P. Dino 70,000 0.00%
Roberto E. Tongcua 70,000 0.00%
Roberto H. Goce 60,000 0.00%
Cecilia R. Duguran 60,000 0.00%
Felicito C. Sebastian 57,000 0.00%
Manuel J. Catungal 53,000 0.00%
Public Ownership 3,208,350 0.09%
TOTAL 3,693,772,279 100.00%
The Board of Directors of PIP as of 20 July, 2020 are as follows:
Name Age Citizenship Position

Oscar S. Reyes 74 Filipino Chairman of the Board and Independent Director
Frederik D. Ong 54 Filipino Director
Yongsang You 51 Korean Director
Younggoo Lee 57 Korean Director
Parinya Kitjatanapan 55 Thai Director
Tae Hyeon Kim 54 Korean Director
Jay Buckley 42 Australian Director
Samir Moussa 49 Grenadian Director
Rafael M. Alunan III 72 Filipino Independent Director
The Executive Officers of PIP as of 20 July, 2020 are as follows:
Name Citizenship Position

Frederik D. Ong Filipino President and Chief Executive Officer
Yongsang You Korean Managing Director
Jin Man Kim Korean Executive Vice President, Strategic Supply Chain & Operations
Vishal Malik Indian SVP and Chief Financial Officer/Chief Audit Executive
Domingo F. Almazan Filipino SVP, National Sales
Ma. Vivian A. Cheong Filipino SVP, Human Resources
Young Duk Kang Korean SVP and Chief Strategy Officer/Compliance Officer/Data Protection Officer
Kristine Ninotschka L. Evangelisa Filipino Corporate Secretary
Julia Patricia C. Herrera-Lim Filipino Assistant Corporate Secretary

Industry Overview Pepsi-Cola Products Philippines, Inc. 4 September 2020
2 | INDUSTRY OVERVIEW

FOOD & BEVERAGE SECTOR GLOBAL OUTLOOK Projected Consumer Expenditure CAGR F&B Growth from
The global GDP totalled U.S.$83.3 trillion in 2018 and it is expected 2018-2030 (In %)
to reach up to U.S.$99.0 trillion in 2023, and up to U.S.124.7 trillion
in 2030 according to Gulfood (an in-depth market research study Philippines
commissioned by the Dubai World Trade Centre to the agencies
Indonesia
Euromonitor International and GRS Research and Strategy as of
2019). The Asia Pacific region is forecasted to achieve a rapid Pakistan
increase in its GDP as its main drivers will be led by the strong
Mexico
manufacturing and export-led economies as well as the growth of
private consumption coming from its respective countries. It has Brazil
been mentioned that the food and beverage (F&B) industry is
South Korea
expected to grow significantly, primarily due to an increase in the
busy lifestyle of individuals, along with a growing disposal income France
which will further strengthen demand for food and beverage items.
Spain
A projected compound annual growth rate (CAGR) for consumer Italy

expenditure on F&B growth starting from 2018 up until the year 2030
Japan
has been made by Gulfood and based on the forecast, the consumer
0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0%
spending on food and beverages were significantly higher in
emerging and developing countries compared to developed Table 2.1 Source: Gulfood
countries. It was forecasted that Bangladesh and Philippines would
have a projected CAGR for consumer expenditure on F&B of 7.1% sectors which they believe will help their respective country’s
and 6.4%, respectively. Additionally, India, Indonesia, and China are economy stay afloat. However, establishments providing basic
forecasted to have CAGRs of 6.4%, 4.7%, and 4.7%, respectively necessities or essential services will continue to operate during the
(Table 2.1). pandemic. There was no publicly available information regarding the
future projections of the industry incorporating the COVID-19 impact
Since the cases of the COVID-19 has spread globally in the early as of the date of this report. Although, this will still greatly affect the
portion of the year 2020, the industry has felt its impact and several industry as 1) they would have to comply first with safety guidelines
countries in the Asian region are taking action to prevent the regulated by their respective countries in order to stay operational,
increase of cases in their respective countries. According to Food 2) their customers will be limited due to social distancing and the
Industry Asia (2020), majority of the measures being done by Asian reduction of their operational hours to comply with imposed curfews
countries are the imposition of lockdowns and temporary closure of in several countries such as the Philippines and Thailand, and 3)
operations in non-essential businesses, with exceptions to several permanently changing the purchasing behaviour of consumers.

OUTLOOK ON THE PHILIPPINE ECONOMY Household final consumption expenditure (HFCE) is the primary
In 2019, the economic growth in the Philippines slowed down to its driver for the increase in GDP as this represents nearly 72.5% of the
lowest growth level in eight years according to Worldbank (2019). country’s GDP in the year 2018, which increased further to 73.2%
The deceleration was mainly driven by a slowdown in public by the year 2019. HCFE consists of miscellaneous goods and
investment due to the delay of the 2019 national government budget services, restaurants and hotels, education, recreation and culture,
along with the spending ban on new projects before the 2018 May communication, transport, health, furnishings, household equipment
elections. This results to the country’s year-on-year (y-o-y) Gross and routine household maintenance, housing, water, electricity, gas,
Domestic Product (GDP) growth for the 1Q2019 of 7.8% compared and other fuels, clothing and footwear, alcoholic beverages,
to its GDP growth for the 1Q2018 of 9.5% as per Philippines tobacco, food, and non-alcoholic beverages. The reason for its
Statistics Authority (PSA). Despite the slowdown in growth, the increase in 2019 was due to the decline of inflation as well as several
country’s full-year GDP in 2019 reported an increase 6.9%, due to factors such as growth in remittances from overseas Filipinos,
growth in household final consumption expenditure, construction, continued expansion of credit, and improvement in the job market.
and breeding stocks and orchard development (Table 2.2). Its improvement is expected to continue throughout the year 2020
(Table 2.3).
Gross Domestic Product Household Final Consumption Expenditure

In %
In PhP millions
6,000,000 12.0% 2018 2019
5,000,000 10.0%
27.5%
4,000,000 8.0%
3,000,000 6.0%
2,000,000 4.0%
1,000,000 2.0% 72.5%

73.2%
- 0.0%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Household final consumption Household final consumption
2018 2019 expenditure expenditure
Real GDP Quarter to Quarter Growth Others Others
Table 2.2 Source: Philippine Statistics Authority (PSA) Table 2.3 Source: Philippine Statistics Authority (PSA)

However, on December 2019, there was a new breed of a disease LOCAL MARKET ANALYSIS
being observed which takes form of an individual appearing to have The F&B sector is among the largest contributors within the
pneumonia like symptoms. This was later classified as a coronavirus manufacturing industry, which is also the top contributor to the
disease 2019 (COVID-19). On 11 March, 2020, the World Health economic growth of the country. The F&B sector accounts for 9.7%
Organization (WHO) assessed the COVID-19 and characterized it of the country’s GDP in 2018 as per PSA. According to EMIS (2019),
as a pandemic. The effect of this virus has caused many countries the introduction of the excise tax on sugar-sweetened beverages
to enforce total lockdown and shutting down operations of several (SSB) will slightly hinder the growth of drinks that have a sugary
companies and business to prevent the virus from spreading. consumption but will promote non-alcoholic beverages that may
Hence, severely affecting people’s lives as well as the global have alternative sweeteners or content with minimal to low sugar
economy. consumption. Despite the imposed tax, the reduced inflation in 2019
will boost consumer spending and increase private consumption.
Based on a press release by the PSA, the Philippine’s GDP declined The Philippine’s food and non-alcoholic beverage sales is expected
in the 1Q2020 by 2.0%, the first contraction since the 4Q1998. This to grow at a CAGR of 7% in the period 2019-2023, generating a
is due to a significant decline in manufacturing, transportation and projected amount of PhP6,816.0 billion for food and PhP625.0 billion
storage and accommodation and food service activities. The for non-alcoholic beverages totaling to an amount of PhP7,441.0
agriculture, forestry and fishing; and Industry sectors contracted by trillion by 2023, as per Fitch Solutions (Table 2.4).
0.4% and 3.0%, respectively. Despite the contraction in GDP, it was
noted that the HFCE and the Government Final Consumption Sales of Food and Non-Alcoholic Beverages Projection
Expenditure (GFCE) recorded a positive growth of 0.2% and 7.1%, In PhP Bns
respectively. 8,000
7,000
After the imposition of quarantine measures that put a halt on 75% 6,000
of economic activity, the country has fallen into a technical 5,000
recession, recording a 16.5% contraction in GDP in 2Q2020, year- 4,000
on-year. This is the worst economic contraction across regional 3,000
peers, as neighbouring countries like Indonesia, Hong Kong, and
2,000
Singapore report contractions of 5.3%, 9%, and 12.6%, respectively.
1,000
-
Economic experts expect the Philippine economy to decline by 5.5% 2019 2020 2021 2022 2023
for the entire year of 2020, as COVID-19 cases in the country (Forecast) (Forecast) (Forecast) (Forecast) (Forecast)
continue rise, and with the imposition of a second lockdown in
Food Non-Alcoholic Beverages
August.
Table 2.4 Source: EMIS Insights

Since the COVID-19 pandemic has affected the economy both on a As per the Company’s 2019 annual report, the CSD and NCB
local and global scale, there was a significant decline in the country’s markets in the Philippines are highly competitive. Sales and
GDP for 1Q2020 due to a decline in several industries which profitability are affected by the overall performance of the Philippine
includes the manufacturing industry. Despite the decrease, HFCE economy, the natural seasonality of sales, the competitive
still recorded an increase by 0.2% during the same period. environment of the beverage market in the Philippines, as well as
According to PSA, as of 1Q2020, majority of consumer spending changes in cost structures, among other factors. The Company’s
was used for food and non-alcoholic beverages as it represents major competitors in the CSD category are The Coca-Cola
33.7% of total consumer spending. (Table 2.5). Company and Asiawide Refreshments Corporation. While its major
competitors in the NCB are Del Monte Pacific Limited, Universal
Total share of Essential & Non-essential items of HCFE Robina Corporation, Zesto Corporation, The Coca-Cola Company,
1Q 2020 and Asia Brewery Incorporated.
In %
According to Euromonitor International (2019), The Coca-Cola

Company leads in terms of retail volume as it represents nearly
59.2% of the overall retail volume for the CSD category in the
33.70%
46.60% Philippines with the Company running in second as it represents
28.0% of retail volume. While for its NCB, Zesto Corporation and Del
Monte Philippines are the leading companies in terms of retail
volume as it represents 29.4% and 28.4%, respectively, of the
overall retail volume for the NCB category. The Company has the
third largest retail volume for the NCB category as it represents 7.5%
19.70% of the overall retail volume. The companies generating the most
retail volume for each respective category is due to their intensified
Food & Non-Alcoholic Beverages Essential Items Non-Essential Items efforts with their marketing campaigns. The Company, however,
believes that it can effectively compete by maximizing its marketing
Table 2.5 Source: Philippines Statistics Authority (PSA)
efforts as well as its efforts to expand its beverage offerings with
According to Fitch Solutions (2020), Non-alcoholic beverages is their wide manufacturing platform giving the Company advantage to
considered as an essential item, thus they project that the spending achieve extensive distribution to meet consumer demands.
on non-alcoholic drinks will grow by 11.1% for 2020 with an average
growth of 7.7% a year over the medium term. Based on the Fitch
report published as of August 7, 2020, the country’s soft drink’s
industry is and will remain as one of the most dynamic food and
beverage sub-sectors as the level of investment being done remains
vast. With this being said, the consumer spending on non-alcoholic
drinks will be shielded from the negative impact of the COVID-19.
Financial and Operating Highlights Pepsi-Cola Products Philippines, Inc. 4 September 2020
3 | FINANCIAL AND OPERATING HIGHLIGHTS


The Consolidated Audited Financial Statements for the periods as of and for the years ending 31 December, 2017, 2018, and 2019 were
audited by R.G. Manabat & Co.in accordance with the Philippine Standards on Auditing (“PSAs”) and were obtained from the public disclosures
of PIP to the PSE. Unicapital, Inc. did not verify the accuracy or the completeness of the information contained in the Financial Statements.
Please see Annex I for the condensed consolidated audited financial statements.
Profit or Loss and Other Comprehensive Income

Amounts in PhP Thousands 2019 2018 2017
Continuing Operations
Gross Sales 40,080,245 38,175,672 35,526,599
NET SALES 35,183,763 33,394,239 30,037,602
Cost of Goods Sold 28,370,170 27,685,013 22,784,614
Gross Profit 6,813,593 5,709,226 7,252,988
Operating Expenses 5,787,722 5,742,342 6,226,092
OPERATING PROFIT (LOSS) 1,025,871 (33,116) 1,026,896
Finance And Other Income (Expenses) (308,169) (118,884) (88,570)
Profit (Loss) Before Tax 717,702 (152,000) 938,326
Income Tax Expense (Benefit) 208,238 (29,837) 277,776
Profit (Loss) From Continuing Operations 509,464 (122,163) 660,550
Discontinued Operations
Loss From Discontinued Operations Net Of Tax (210,738) (77,377) (119,225)
PROFIT (LOSS) FOR THE YEAR 298,726 (199,540) 541,325
GROSS SALES
PIP’s gross sales is generated from the external sales of the operating categories and with its discontinued manufacturing
Company’s Carbonated Soft Drink (CSD), Non-Carbonated category.
Beverage (NCB), and Snacks categories. Since the Snacks
category of the Company discontinued its operations in 2019, the On average, the Company generated 74.50% of its Gross Sales
gross sales figure booked in its financial statement only takes into from its Carbonated Soft Drinks category, 25.50% of its Gross Sales
account the sales generated from the Company’s products of CSD from its Non-Carbonated Beverage category. It posted a
and NCB. compounded annual growth rate (CAGR) of 6.22% from
PhP35,526.60M in 2017 to PhP40,080.25M by the end of 2019.
The Company presents its operating segments performance based
on profit. For all the years covered in this report, the Company does
not have any inter-category recognition of sales between the two

Gross Sales, 2017-2019
In PhP’M COST OF GOODS SOLD
45,000 Cost of Goods Sold (COGS) mainly consists of materials and
40,000 supplied used, and taxes, depreciation and amortization, delivery
35,000 and freight, personnel and expenses, rentals and utilities, and other
30,000 expenses. In 2018, there was a significant increase in COGS by
25,000 21.51% due to an increase in materials and supplies used and taxes
20,000 which carried throughout the rest of year as well as for the year
15,000 2019. A “sugar tax” of Php6.00 per liter for caloric and noncaloric
10,000 sweeteners and Php12.00 per liter for high-fructose corn syrup
5,000 (HFCS) was imposed under the Tax Reform for Acceleration and
- Inclusion (TRAIN) Act in 2018. Over half of total costs comprise
2019 2018 2017 purchases of raw materials, of which the largest purchases are
Carbonated Soft Drinks (CSD) Non-Carbonated Beverages (NCB) sugar and beverage concentrates. Thereafter, COGS marginally
increased by 2.41% from 2018 to 2019. COGS averaged 79.80%
Source: 2017-2019 AFS, Unicapital analysis
of the Company’s net sales for the period.
NET SALES
The Company’s net sales are derived from its gross sales less sales GROSS PROFIT
discounts, returns and allowances. It posted an 11.17% increase in PIP recorded gross profits of PhP7,252.99M for the year 2017 which
2018 to PhP33,394.24M from PhP30,027.60M in 2017. The translates to a Gross Profit Margin (GPM) of 24.15%. PIP’s GPM
increase was mainly due to a decrease in its sales discounts returns significantly decreased to 17.10% in 2018 due to an increase in its
and allowances. By 2019, its net sales increased by 5.36% COGS, then slightly increased to 19.37% in 2019.
amounting to PhP35,183.76M due to an increase in its gross sales
for the same year, while net sales as a % of gross sales remained Gross Profit Margin
In PhP’M
relativly flat at 87.78% for 2019
8,000 30.0%
25.0%
Cost of Goods Sold 6,000
20.0%
In PhP'M 2019 2018 2017
4,000 15.0%
Materials, supplies & taxes 21,941.89 21,810.94 16,154.64
Depreciation & Amortization 2,150.30 2,101.92 2,263.85 10.0%
2,000
Delivery & freight 2,111.28 1,694.77 2,172.34 5.0%
Personnel expenses 610.97 533.09 521.00 - -
Rental & utilities 494.99 624.21 652.64 2019 2018 2017
Others 1,060.74 920.09 1,020.15 Gross Profit Gross Profit Margin (GPM)
28,370.17 27,685.01 22,784.61
Source: 2017-2019 AFS, Unicapital analysis Source: 2017-2019 AFS, Unicapital analysis
OPERATING EXPENSES
PIP’s Operating Expenses consists of selling and distribution, LOSS FROM DISCONTINUED OPERATIONS
general and administrative, and marketing expenses. It decreased In September 2019, the Company’s Board of Directors (BoD)
by 7.77% for the year 2018 due to a decrease in its selling and approved the closure of its snacks production line and to discontinue
distribution expenses along with a 23.17% decrease in its marketing the locally-made Cheetos with PepsiCo, to focus on and strengthen
expenses. As a result, operating expenses amounted to the Company’s core business categories. Net Losses from its
PhP5,742.34M for 2018 compared to its previous year amount of Discontinued Operations were recorded throughout the years
PhP6,226.09M. However, it slightly increased by 2019 to covered by this report. Losses from discontinued operations
\PhP5,787.72M due to an increase in its selling and distribution as amounted to -PhP119.23M, -PhP77.38M, and -PhP143.74M net of
well as its general and administrative expenses as these sub- taxes, for the years 2017, 2018, and 2019, respectively.
accounts increased by 3.64% and 3.32%, respectively for the same
year. PROFIT OR LOSS FOR THE YEAR
In 2017, the Company recorded a PhP541.33M total Profit or a net
Operating Expenses profit margin (NPM) of 1.52% for the year 2017. However, it
In PhP'M 2019 2018 2017 significantly decreased by 136.86% to a total Loss of PhP199.54M
Selling and distribution 4,085.67 3,942.30 4,360.52 for the year 2018 due to higher Cost of Sales, brought about by the
General and higher than expected rise in sugar prices, and the challenge
administrative 1,210.61 1,171.70 1,047.78 introduced by higher excise taxes for beverages containing caloric
Marketing 491.44 628.34 817.79 or non-caloric sweeteners. This resulted to a NPM of -0.52% for the
5,787.72 5,742.34 6,226.09 same year. By 2019, with an increase in sales and flat overhead
Source: 2017-2019 AFS, Unicapital analysis expenses the Company generated total Profits of PhP298.73M for
the year, equivalent to a NPM of 0.75% as this signifies the
OPERATING PROFIT (LOSS) Company slowly recovering its loss from its previous year.
The Company recorded an Operating Profit of PhP1,026.90M or an
operating profit margin (OPM) of 2.89% for the year 2017. However,
by 2018, the Company reported a significant decrease by 103.22%
which translates to an Operating Loss of PhP33.12M due to a
significant increase in its COGS, which represented nearly 82.90%
of the Company’s net sales for that year. This results to its OPM of
-0.09% for 2018. However, in 2019, the Company was able to
recover and generated operating profits of PhP1,025.87M due to a
4.99% increase in its gross sales coupled with better gross profit
margins and flat growth in operating expenses. This translates to an
OPM of 2.6% which remains in the same range as its previous OPM
in 2017.

Financial Position
ASSETS
Cash 711,895 548,598 498,352
Receivables - net 2,823,843 2,542,413 2,404,681
Inventories 3,915,506 5,039,641 2,484,230
Due from related parties 552,990 567,309 580,174
Prepaid expenses and other current assets 618,693 281,643 284,299
Assets held for sale 126,428 - -
Total Current Assets 8,749,355 8,979,604 6,251,736
Noncurrent Assets
Investments in associates 635,384 612,656 596,077
Bottles and cases - net 4,669,755 4,440,968 4,970,119
Property, plant and equipment - net 11,162,438 11,819,220 11,920,635
Right-of-use assets 422,948 - -
Intangible assets 264,053 - -
Deferred tax assets 102,354 115,781 125,397
Other noncurrent assets 218,519 204,411 280,407
Total Noncurrent Assets 17,475,451 17,193,036 17,892,635
TOTAL ASSETS 26,224,806 26,172,640 24,144,371
LIABILITIES AND EQUITY
Accounts payable and accrued expenses 8,733,614 9,221,397 8,132,493
Short-term debt 1,250,000 1,000,000 3,100,000
Current portion of long-term debt 1,494,541 795,456 598,749
Income tax payable - 8,861 42,343
Total Current Liabilities 11,478,155 11,025,714 11,873,585
Long-term debt - net of current portion 4,142,877 4,626,874 1,147,783
Deferred tax liabilities 560,378 696,564 870,002
Other noncurrent liabilities 900,886 664,423 807,545
Total Noncurrent Liabilities 5,604,141 5,987,861 2,825,330
Total Liabilities 17,082,296 17,013,575 14,698,915
Equity
Share capital 1,751,435 1,751,435 1,751,435
Remeasurement losses on net defined benefit liability (338,224) (195,079) (270,754)
Retained earnings 7,729,299 7,602,709 7,964,775
Total Equity 9,142,510 9,159,065 9,445,456
TOTAL LIABILITIES AND EQUITY 26,224,806 26,172,640 24,144,371
CASH
The Company’s Cash account amounted to PhP498.35M, Accounts receivable constantly increased throughout the historical
PhP548.60M, and PhP711.90M for the years 2017, 2018, and 2019, period as it posted a CAGR of 8.37%, due to an increase in its trade
respectively which translates to a CAGR of 19.52%. Cash as a % of receivable from PhP2,404.68M in 2018 to PhP2,823.84M by the end
Total Assets stood at 2.06%, 2.10%, and 2.71%, for the years of 2019. Accounts Receivable (AR) turnover was faster in 201at
indicated respectively. While the Company’s cash ratio is 15.02x than in 2017 with an AR turnover of 14.77x. By 2019, AR
determined to be at 0.04x, 0.05x, and 0.06x for 2017, 2018, and turnover slowed down to 14.19x. The Company’s allowance for
2019 respectively. impairment losses remained stable throughout its historical period
as it represented an average 8.1% of the Company’ total trade
RECEIVABLES receivables.
The Company’s receivables account consists of trade receivables
from third parties, Others, and allowance for impairment losses and INVENTORY
others. Trade receivables are noninterest-bearing and generally PIP’s Inventories include Raw Materials and Packaging, Work in
have a 15 to 60 days’ term. Others consist mainly of receivables process, Finished Goods, and Spare parts and Supplies. There was
from employees, freight and marketing related reimbursements a 102.87% increase from PhP2,484.23M in 2017 to PhP5,039.64M
which are collected in cash. in 2018, mainly due to a significant increase in its sub-accounts of
raw and packaging materials as well as its finished goods.
Accounts Receivable turnover, 2017-2019
In PhP’M Inventory
2,900 15.2x In PhP'M 2019 2018 2017
Raw and packaging materials 2,363.01 3,720.08 1,603.39
2,800 15.0x
Finished goods 1,213.21 1,101.78 680.07
2,700 14.8x Spare parts and supplies 334.84 214.63 195.13
Work in process 4.45 3.14 5.64
2,600 14.6x
3,915.51 5,039.64 2,484.23
2,500 14.4x Source: 2017-2019 AFS, Unicapital analysis
2,400 14.2x
The sudden increase of the Company’s inventory resulted to a lower
2,300 14.0x inventory turnover of 5.49x in 2018 compared to its inventory
turnover in 2017 of 9.17x. This implies that the Company had an
2,200 13.8x
excessive supply of its product compared to the demand coming
2,100 13.6x from its consumers. Inventory turnover improved to 7.25x in 2019,
2019 2018 2017 mainly due to the Company decreasing its sub-account of raw and
Receivables - net AR Turnover packaging materials for the year.

Inventory Turnover, 2017-2019 means to measure PIP’s ability to pay short-term obligations through
In PhP’M its Current Ratio which was at 0.53x, 0.81x, and 0.76x, for the years
6,000 10.00x 2017, 2018, and 2019 respectively.
5,000 8.00x
4,000 INVESTMENTS IN ASSOCIATES
6.00x
3,000 The Company’s investment in associates consist of investments in
4.00x NADECO Realty Corporation (NRC) and NADECO Holdings
2,000
1,000 2.00x Corporation (NHC), which amounted to PhP596.08M, PhP612.66M,
- -
and 635.38M for the years 2017, 2018, and 2019, respectively. The
2019 2018 2017 constant increase is due to its accumulated equity in net earnings
per year being included in its carrying value. PIP owns 40.00% each
Inventory Inventory Turnover
of NRC and NHC as of December 31, 2019.
Investment in Associates
DUE FROM RELATED PARTIES In PhP’M 2019 2018 2017
The Company’s Due from Related Parties consists of advances to Acquisition cost
NADECO Realty Corporation (NRC) and outstanding net NRC 231.49 231.49 231.49
receivables from NRC. It constantly decreased from PhP580.17M in NHC 0.13 0.13 0.13
2017 to PhP552.99M by year end 2019. The decrease was due to 231.62 231.62 231.62
the Company collecting its receivables within the respective years. Accum. equity in net
Moving forward, this account shall remain materially unchanged as earnings
Balance at beg. of year 381.03 364.46 352.58
this will not be affected by the Transaction.
Equity in net earnings 22.73 16.58 11.88
403.76 381.03 364.46
ASSETS HELD FOR SALE 635.38 612.66 596.08
The Company’s Board of Directors approved the closure of its Source: 2017-2019 AFS, Unicapital analysis
Snacks category on September 2019, consequently classifying the
related assets in the category as either useable for the Company’s BOTTLES AND CASES
current operations or to be written-down as part of its disposal. The The Company’s bottles and cases account is derived by adding the
net realizable value of the assets held for sale amounted to deposit value of returnable bottles and cases on hand and in trade,
PhP126,43M as of 31 December, 2019. carrying amount at end of the year, and the bottles and cases in-
transit. There was a decrease in 2018 by 10.65% to PhP4,440.97M
CURRENT ASSETS due to a lower carrying amount at the end of the year. It then
Total Current Assets of the Company amounted to PhP6,251.74M, increased by 5.15% in 2019 to PhP4,669.76M due to a higher
PhP8,979.60M, and PhP8,749.36M for the years 2017, 2018, and balance of returnable bottles and cases which is net of accumulated
2019, respectively. Additionally, the current assets account gives a amortization.
which measures how well the Company uses its noncurrent assets
Bottles and Cases to generate revenue, was determined to be at 0.03x, -0.01x, and
In PhP'M 2019 2018 2017 0.02x, for the years 2017, 2018, and 2019, respectively.
Deposit value 727.73 650.43 563.99
Carrying amount at end of year 3,914.77 3,687.02 4,195.31 ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Bottles and cases in-transit 27.25 103.52 210.82 Accounts payable and accrued expenses consists of trade
4,669.76 4,440.97 4,970.12 payables, accrued advertising and marketing, non-trade payables,
accrued contract services, current portion of lease liability, accrued
personnel cost, rent, utilities, financing charges, and other accrued
PROPERTY, PLANT AND EQUIPMENT
expenses.
As of December 2019, approximately 45.70% of the Company’s total
assets was comprised of the property, plant and equipment of the
Accounts payable and accrued expenses Turnover, 2017-2019
Company which consists of Machinery and Other Equipment, In PhP’M
Buildings and Leasehold Improvements, Furniture and Fixtures, and 9,400 4.00x
Construction in-Progress. It slightly decreased in 2018 to an amount
9,200 3.50x
of PhP11,819.22M from an amount of PhP11,920.64M in 2017. This
9,000
decreased further by 5.56% amounting to PhP11,162.44M due to an 3.00x
8,800
increase in its accumulated depreciation and amortization. 2.50x
8,600
8,400 2.00x
RIGHT-OF-USE ASSETS & INTANGIBLE ASSETS
8,200
The Company’s Right-of-Use assets relates to the leased properties 1.50x
8,000
of PIP such as warehouses, facilities, and vehicles which amounted 1.00x
to PhP422.95M for the year 2019. The duration of the leases on its 7,800
7,600 0.50x
warehouses, facilities, and vehicles are for 25 years. However, the
lease does not provide an option for the Company to purchase or 7,400 -
2019 2018 2017
transfer ownership of the property at the end of the lease. The
Company’s intangible assets pertain to the software and licenses Accounts payable and accrued expenses Payables turnover
which were acquired in 2019. However, the software and licenses
acquired are not yet available for use as of December 2019 which
translates to an amount of PhP264,053 thousands for the same
There was a 13.39% increase for the year 2018 amounting to
year.
PhP9,221.40M as a result of an increase in its trade payables which
pertain to raw material purchases made by the Company with
NONCURRENT ASSETS
general payment term of 30 to 90 days. A slight decrease in 2019
The Company’s total Noncurrent Assets amounted to
by 5.29% amounting to PhP8,733.61M was mainly due to a
PhP17,892.64M, PhP17,193.04M, and PhP17,475.45M for the
decrease in its trade payables which implies that the Company has
years 2017, 2018, and 2019, respectively. Fixed Asset Turnover,
been able to pay its suppliers faster than in 2017.This is further Long-term debt
supported by its Accounts Payable (AP) turnover as it was In PhP'M 2019 2018 2017
constantly increasing throughout the historical period. It posted an Current 1,494.54 795.46 598.75
AP turnover of 2.50x in 2017 but increased to 2.73x in 2018 which Noncurrent 4,142.88 4,626.87 1,147.78
increased further to 3.38x by the year 2019. 5,637.42 5,422.33 1,746.53
SHORT-TERM DEBT
The Company’s short-term debt represents unsecured, interest- On March 2013, the Company entered into a loan agreement with
bearing short-term loans from local banks, with various maturity MBTC amounting to PhP1,000.00M to partially finance the
Company’s capital expenditure for its CSB and NCB business. The
dates. The loans were acquired to finance the Company’s working
loan is unsecured with a term of 7 years, payable in 20 successive
capital requirements. There was a significant decrease of 67.74% in
2018 which amounts to PhP1,000.00M as the Company paid off quarterly principal repayments to commence at the end of the 9th
several of its loans which had various maturity dates up to February quarter from the initial drawdown date and with a fixed interest rate
22, 2019. In 2019, it increased by 25.00% amounting to based on PDST-F at drawdown date plus a certain spread. The
PDST-F rate is derived from the average of the best 50.00% of the
PhP1,250.00M which consists of loans with various maturity dates
live bids of participating fixing banks in the secondary market for the
up to February 26, 2020. As of the date of this report, we understand
5-year Philippine peso-denominated Treasury Bills and bonds.
that the Company requested for a rollover for its short-term loans
that mature in 2020 and/ or have availed new loans within the year.
On March 2018, the Company entered into a loan agreement with
CURRENT LIABILITIES MBTC amounting to PhP2,500.00M to assist in refinancing its short-
term debt and partially finance its capital expenditures. The loan is
Current Liabilities of PIP includes all accounts payables, accrued
expenses, short-term liabilities, current portion of its long-term unsecured with a term of 5 years, payable in 12 successive quarterly
liabilities, and any income tax payable. PIP has recorded current principal repayments to commence at the end of the 9th quarter from
liabilities amounting to PhP11,873,585 thousand, PhP11,025,714 the drawdown date.
thousand, and PhP11,478,155 thousand for the years 2017, 2018,
and 2019, respectively. As a means to measure the Company’s The loan agreement with MBTC provides several covenants with the
more significant of which are listed below:
ability to cover its recorded current assets through the use of its most
liquid assets, its quick ratio has been computed to be at 0.32x, 0.36x,
and 0.42x, for the years indicated, respectively. • Debt-to-equity ratio shall not exceed 2:1 based on the financial
statements
LONG-TERM DEBT • Current ratio of at least 0.40:1 based on the financial
The Company’s long-term debt represents several loans from statements; or
Metropolitan Bank & Trust & Co. (MBTC), Bank of the Philippine • The company shall not declare or pay any cash dividends or
Islands (BPI), Shinhan Bank (Shinhan), and Industrial Bank of Korea redeem or repurchase any outstanding share or make any
(IBK). It increased by 210.5% in 2018 and 4.0% in 2019.

capital or asset distribution to its stockholders without prior capital or asset distribution to its stockholders without prior
written consent of the lender written consent of the lender
On October 2013 and March 2014, the Company entered into a loan On March 2018, the Company entered into a loan agreement with
agreement with BPI amounting to PhP2,000.00M to refinance the Shinhan amounting to PhP500.00M to refinance its short-term
Company’s short-term debt. The loan is unsecured with a term of 7 loans. The loan is unsecured with a term of 5 years, payable in 12
years, payable in 20 successive quarterly principal repayments to successive quarterly principal repayments to commence at the end
commence at the end of the 8th quarter from the initial drawdown of the 9th quarter from the drawdown date and with a fixed interest
date along with a fixed interest rate which will be determined using rate. Within the same month, PIP entered into a loan agreement with
the base rate plus a certain spread per annum on the drawdown IBK amounting to PhP500.00M to finance its capital working loan.
date. The loan is unsecured with a term of 3 years, payable in 10
successive quarterly principal repayments to commence at the end
On December 2018, the Company entered into a PhP800.00M loan of the 5th quarter from the drawdown date and with a fixed interest
agreement with BPI to refinance or to partially refinance its short- rate.
term bank loans. The loan is unsecured with a term of 7 years,
payable in 20 equal quarterly repayments to commence at the end DEFERRED TAX LIABILITIES
of the 9th quarter from the drawdown date. It further entered into The deferred tax liabilities of the Company amounted to
another loan agreement with BPI with an amount of PhP1,000.00M PhP870.00M, PhP696.56M, and PhP560.38M for the years 2017,
to further assist in refinancing its short-term bank loans. The loan is 2018, and 2019, respectively. It was decreasing at a compounded
unsecured with a term of 5 years, payable in 12 equal quarterly rate of 19.74% due to an increase in its set off of taxes per year.
installments to commence at the end of the 9th quarter of the Noncurrent liabilities cover the non-current portion of the Company’s
borrowing date. long-term obligations, deferred tax liabilities, and other noncurrent
liabilities such as Defined Benefit Liability and Lease Liability.
The loan agreement with BPI provides several covenants with the
more significant of which are listed below: OTHER NONCURRENT LIABILITIES
The Company’s other noncurrent liabilities consists of its defined
• Debt-to-equity ratio shall not exceed 2:1 based on the financial benefit plan. The Company has a funded, non-contributory, final
statements salary benefit plan which covers a substantial amount of its regular
• Current ratio of at least 0.40:1 based on the financial and full-time employees. It has created as well committees to help
statements; or maintain the plan. The plan as of December 31, 2019 is comprised
• Debt service coverage ratio of 1:1 based on the financial of cash and cash equivalents, debt securities, investment in equity
statements; or securities and other financial assets which are primarily receivables
• The company shall not declare or pay any cash dividends or and payables. There was a decrease by 17.7% in 2018 due to a
redeem or repurchase any outstanding share or make any decrease in its debt securities and its other financial assets. Other
financial assets are primarily receivables and payables. By 2019, it

increased by 35.6% due to an increased in its debt securities as well 2018 due to the loss recorded for the year, and PhP7,729.30M in
as its investment in equity securities. Debt securities consists of 2019. The Company’s BoD also approved the following declaration
investment in government securities and debt securities while its of cash dividends: P162.5 million in the calendar year ended 31
equity securities invest in food and drink, holding company, and real December 2019, P163 million in calendar year ended 31 December
estate. 2018, and P255 million in calendar year ended 31 December 2017.
Remeasurement losses on net deferred benefit liability decreased
PIP’s Total Debt-to-Equity (D/E) ratio stood at 1.56x in 2017 which from -PhP270.75M in 2017 to -PhP195.08M thousand in 2018, but
increased in 2018 to 1.86x a D/E ratio. By 2019, the Company’s D/E increased to -PhP338.22M in 2019 due to additional losses from the
ratio was at 1.87x indicating that the Company has increasingly remeasurement of the account.
financed growth and business operations through debt in 2019 and
2019, though debt levels remain manageable.
EQUITY
The Company’s Share Capital remained the same for the reporting
years presented in this report at PhP1,751.44M. Retained earnings
of the Company was at PhP7,964.78M in 2017, PhP7,602.71M in
Cash Flows
Net cash provided by operating activities 3,180.88 759.46 3,380.32
Net cash used in investing activities (2,745.03) (1,897.59) (3,692.83)
Net cash provided by (used in) financing activities (272.55) 1,188.38 490.82
NET INCREASE IN CASH 163.30 50.25 178.30
CASH FLOWS FROM OPERATING ACTIVITES CASH FLOWS FROM INVESTING ACTIVITES
The Company’s operating cash flows in 2017 amounted to Throughout the historical 3-year period, the Company’s focused its
PhP3,380.32M. However, it significantly decreased by 77.53% to use of cash for its investing activities as it posted PhP3,692.83M
PhP759.46M for the year 2018 due to a significant increase in cash being used for investing activities in 2017. Majority of the cash is
expense for its inventories within the year as well as Contribution to directly being used for its property, plan, and equipment which
plan assets. Contribution to plan assets consists of debt securities amounted to PhP2,215.11 for the year 2017. Cash spent on PPE
invested as well as investments in equity securities which increased however, decreased significantly by 45.6% to PhP1,205.09M in
significantly from 2017 to 2018 by 275.76%. By 2019, its operating 2018 resulting in total investing activities amount of PhP1,897.59M
cash flows significantly increased by 318.8% YoY to PhP3,180.88M which is a 48.61% decrease coming from 2017. In 2019, the
due to a decrease in its contribution to plan assets as well as a Company increased its spending by 44.66% to PhP2,745.03M due
significant decrease in its inventories. to an increase in its bottles and cases as well as its intangibles.

CASH FLOWS FROM FINANCING ACTIVITES
Cash from financing activities was generated from proceeds from by its financing activities has increased significantly by 142.12% in
short-term debt with an amount of PhP18,200.00M for the year 2019 amounting to PhP1,188.38M due to the Company receiving
2017, and repayments of PhP17,800.00M in debt for the same proceeds from its long-term debt. By 2019, the Company used its
period, resulting in net cash provided by financing activities of cash for repayments of short-term and long-term debt which
PhP490.82M for the same year. However, in 2019, its proceeds from outweighed its proceeds from short-term and long-term debt. This
its short-term debt decreased by 10.71% to PhP16,250M. Despite translates to a significant decrease of 122.93% resulting to a total
its decrease in short-term debt availment, its total amount provided amount used for financing activities of PhP272.55M.
Profit or Loss and Other Comprehensive Income (1Q 2019, 2020)

The Interim Financial Statements for the periods as of and for the quarters ending 31 March 2019 and 2020 were obtained from the publicly
disclosed unaudited quarterly reports of PIP to the PSE and the SEC. Unicapital, Inc. did not verify the accuracy or the completeness of the
information contained in the quarterly reports. Please see Annex I for the condensed consolidated financial statements.
Amounts in PhP Thousands 31 March 2020 31 March 2019

Unaudited Unaudited
GROSS SALES 8,785,451 9,372,153
LESS SALES DISCOUNTS, RETURNS AND ALLOWANCES (1,084,336) (1,084,100)
NET SALES 7,701,115 8,288,053
COST OF GOODS SOLD (6,436,753) (6,586,827)
GROSS PROFIT 1,264,362 1,701,226
OPERATING EXPENSES (1,442,081) (1,499,584)
OPERATING PROFIT (LOSS) (177,719) 201,642
FINANCE AND OTHER INCOME (EXPENSES) (69,890) (102,890)
PROFIT (LOSS) BEFORE TAX (247,609) 98,752
INCOME TAX EXPENSE (BENEFIT) (85,221) 27,657
PROFIT (LOSS) FOR THE YEAR (162,388) 71,095
NET SALES
During the first quarter of 2020, the Company recorded net sales of Net sales from its CSD category amounted to PhP6,315.00M, which
PhP7,701.12M. This was 7.08% lower than the recorded is 2.82% higher than the PhP6,142.00M net sales from CSD
PhP8,288.05M net sales recorded in the same quarter in 2019. The recorded in 2019. Its NCB category on the other hand recorded
decline in net sales was mainly driven by the Philippine PhP1,383.00M net sales, which is 35.04% lower than the
government’s imposition on March 2020 of the Enhanced PhP2,129.00M net sales recorded in the same quarter of 2019. The
Community Quarantine (“ECQ”) as a control response to the Company continued to move the remaining inventory from its
COVID-19 pandemic. Snacks category, recording net sales of PhP3.00M in the first
quarter of 2020, 82.35% lower than the same quarter sales in 2019 gross profit booked in the same quarter of 2019. This results to a
of PhP17.00M. lower gross profit margin of 16.42% in 2020 from 20.53% in 2019.
Net Sales Product Mix OPERATING PROFIT (LOSS)

In PhP’M The Company recorded an operating loss of PhP177.72M for the
NET SALES first quarter of 2020, this is a 188.14% decline from the operating
profit of PhP201.64M recorded in the same quarter 2019. The
7000 decline was due to the lower gross profit recorded in the first quarter
6000 of 2020, and operating expenses amounting to PhP1,442.08M in the
5000 same period; operating expenses were relatively flat, declining only
4000 by 3.83% from its 2019 first-quarter expense of PhP1,499.58M.
3000
2000 PROFIT (LOSS) FOR THE YEAR
1000 During the first quarter of 2020, the Company recorded a net loss of
0 PhP162.39M, which is 328.41% lower than the PhP71.10M net profit
CSD NCB SNACKS recorded in the first quarter of 2019. This translates to a net income
2019 2020
margin of -2.11% and 0.86% during the first quarters of 2020 and
2019 respectively. Collectively, the 2020 year-to-date losses of the
company has been attributable to sales volume decline due to the
GROSS PROFIT imposition of the community quarantine, unfavorable product sales
Gross profits of the Company in the first quarter of 2020 amounted mix brought by lower sales of its NCB products, and timing of
to PhP1,264.36M, which is 25.68% lower than the PhP1,701.23M expenses.
Financial Position (1Q 2019, 2020)

ASSETS
Current Assets
Cash 967,499 521,647
Receivables - net 2,427,553 2,137,282
Inventories 4,335,291 4,634,064
Due from related parties 487,666 563,154
Prepaid expenses and other current assets 975,005 400,373
9,193,014 8,622,927
Assets held for sale 126,428 -

Total Current Assets 9,319,442 8,256,520
Noncurrent Assets
Investments in associates 642,239 619,060
Bottles and cases - net 4,670,646 4,566,922
Property, plant and equipment - net 10,631,183 11,753,697
Right-of-use assets 339,874 510,249
Intangible assets 264,053 -
Deferred tax assets 102,354 102,309
Other noncurrent assets 207,891 185,877
Total Noncurrent Assets 16,858,240 17,738,114
TOTAL ASSETS 26,177,682 25,994,634
Current Liabilities
Accounts payable and accrued expenses 8,153,680 7,893,169
Short-term debt 1,687,500 1,650,000
Current portion of long-term debt 1,042,091 798,022
Income tax payable - 88,416
Total Current Liabilities 10,883,271 10,429,607
Noncurrent Liabilities
Long-term debt - net of current portion 4,496,993 4,477,024
Deferred tax liabilities 560,378 633,469
Other noncurrent liabilities 1,256,918 1,233,983
Total Noncurrent Liabilities 6,314,289 6,344,476
Total Liabilities 17,197,560 16,774,083
Equity
Share capital 1,751,435 1,751,435
Remeasurement losses on net defined benefit liability (338,224) (195,079)
Retained earnings 7,566,911 7,664,195
Total Equity 8,980,122 9,220,551
TOTAL LIABILITIES AND EQUITY 26,177,682 25,994,634
CURRENT ASSETS
The Company recorded an increase in Total current assets of and other current assets worth PhP575M, a 144% year-on-year
PhP1,063M or a 13% increase from March 31, 2019 to 2020. This change.
was primarily due to an increase in Cash amounting to PhP445.85M,
an 86% year-on-year change, and an increase in Prepaid expenses
NONCURRENT ASSETS NONCURRENT LIABILITIES
There was an PhP880M decrease, or a 5% year-on-year decrease Total noncurrent liabilities remained mostly stable, recording only a
in Total noncurrent assets from 2019 to 2020. This was primarily due 0.5% decrease from 2019 to 2020 amounting to PhP30M. This was
to a decrease in Property, plant, and equipment worth PhP1,123M, due to a PhP30M decrease, or a 12% decrease in Deferred tax
mostly caused by ordinary depreciation. liabilities, offset by increases in Long-term debt and Other
noncurrent liabilities worth PhP20M and PhP23M, respectively.
CURRENT LIABILITIES
The Company recorded an increase in Total current liabilities of EQUITIES
PhP454M, or a 4% increase year-on-year, mostly due to increases There was no change in Share capital from March 31, 2019 to 2020;
in both the Current portion of long-term debt and Accounts payable the account remained at PhP1,751M for the period. However, there
and accrued expenses worth PhP244M and PhP261M, respectively. was also a 73% year-on-year increase in Remeasurement losses on
net defined benefit liability, worth PhP143M. This was offset by a
decrease in Retained earnings of PhP97M. Overall, this led to a
2.6% decrease in Total equity.

Valuation Pepsi-Cola Products Philippines, Inc. 4 September 2020
4 | VALUATION

4 | VALUATION
For the Valuation section of the report, the Financial Advisor used the total number of common stock outstanding as of 30 June, 2020 – a total
of 3,693,772,279 common shares, with a par value of PhP0.15 per share. The Company’s authorized capital stock is at PhP750,000,000.00,
divided into 5,000,000,000 common shares. The Financial Advisor further notes that the shares subject of the Transaction represents 2.11%
of the total outstanding common shares of PIP as of writing.
VOLUME WEIGHTED AVERAGE PRICE

The Volume Weighted Average Price (“VWAP”) approach estimates the value of a listed company based on its historical trading volume and
price. The market price of a listed company is considered the indication of how the investors perceive the value of a company to be. In this
valuation report, the Financial Advisor examines the value of PIP’s shares as traded on the Philippine Stock Exchange. For the full historical
trading prices of the Company, please refer to Annex II of this report.
VOLUME WEIGHTED AVERAGE PRICE APPROACH

As of 30 June, 2020, the Company had 3,693,772,279 common shares outstanding with a par value of PhP0.15 per share. The Company’s
shares are traded at the Philippine Stock Exchange with the ticker “PIP”. VWAP Approach uses historical trading activity of the stock within the
selected two-year active trading period, up until its trading suspension effective 18 June 2020.
Trading History Date Range High Low Average Volume VWAP

6-months December 16, 2019 to June 17, 2020 1.93 1.20 1,434,286 1.87
1-year June 18, 2019 to June 17, 2020 2.22 1.20 5,624,176 1.82
2-year June 18, 2018 to June 17, 2020 2.40 1.13 4,594,988 1.69
Data Source: FactSet Research
• Based on the 6-month VWAP of the Company immediately preceding PSE's Notice of Trading Suspension, PIP's price per share is
PhP1.87, indicating a market capitalization of PhP6,912.35 Million. During this period, the Company's stock price reached a high of
PhP1.93 per share, a low of PhP1.20 per share, and an average trading volume of 1.43 Million shares; showing a -10.53% change over
the 6-month period.
• Based on the 1-year VWAP of the Company immediately preceding PSE's Notice of Trading Suspension, PIP's price per share is PhP1.82,
indicating a market capitalization of PhP6,712.91 Million. During this period, the Company's stock price reached a high of PhP2.22 per
share, a low of PhP1.2 per share, and an average trading volume of 5.62 Million shares; showing a 26.87% change over the 1-year period.

share, a low of PhP1.13 per share, and an average trading volume of 4.59 Million shares; showing a -23.08% change over the 2-year
period.
For purposes of the Transaction, the Tender Offer being made by LOTTE Chilsung is at the price PhP1.95 per share, which is a premium of
4.28% over the 6-month VWAP; a 7.14% premium over the 1-year VWAP; and, a 15.38% premium over the 2-year VWAP of the Company’s
Common Shares.
SHARE PRICE AND TRADING VOLUMES

The chart shows the historical development of PIP’s share price and trading volume from 18 June 2018 to 04 August 2020.
1 2 3 4 5
Chart Source: FactSet Research
The Company’s historical trading developments may have also been influenced by market speculations, certain corporate announcements
regarding changes in its business and operations, changes in government regulations that either directly or indirectly affects the Company or
the industry where the Company operates, or the regulatory decisions over applications that directly affect the Company’s strategic initiatives.
1 On 25 September, 2019, the Company, through its disclosure to the Philippine Stock Exchange, announced that it has received approval
from its Board of Directors to close its production line for the Snacks category, to focus on strengthening its beverage categories.
2 On 12 December 2019, PIP announced that LOTTE Chilsung issued a tender offer report on 11 December, 2019, offering to buy 2.13
Billion common shares.
3 In a letter to PIP dated 4 February, 2020, the Securities and Exchange Commission stopped the tender offering of LOTTE Chilsung to the
minority shareholders of PIP citing “pending the resolution of certain issues” related to the tender offer.
4 On 26 March, 2020, the Philippine Competition Commission (“PCC”) cleared the tender offering of LOTTE Chilsung to the minority
shareholders of PIP, concluding that it will not result in substantial lessening of competition.
5 The Philippine Stock Exchange has suspended the trading of PIP as public ownership had fallen below the 10.00% minimum requirement.
NET ASSET VALUE

The Net Asset Value (“NAV”) method estimates the net residual value of the Company by carefully arriving at the round value of its assets,
using the publicly available reports published by the Company, and, subsequently deducting all its liabilities and non-controlling interests.
NET ASSET VALUE APPROACH

This Asset-based approach computes the value of a company or business based on its Net Asset Value, or the fair market value of its assets
minus its total liabilities. To use this this valuation approach, the NAV formula was applied to the Company’s latest and publicly available
consolidated audited financial statements.
Net Asset Value (in PhP Millions, except per share data) 2019 2018
Total Assets 26,224.81 26,172.64
Less: Total Liabilities 17,082.30 17,011.58
Net Assets 9,142.51 9,161.07
Outstanding Shares 3,693.77 3,693.77
Net Asset Value Per Share 2.48 2.48
For the period covered in this report, 45.70% of the Company’s Total Assets, on average, is comprised of its Property, Plant and Equipment,
which records its Machinery and Other Equipment, Buildings and Leasehold Improvements, Furnitures and Fixtures, and Construction in-
Progress. The Company annually reviews the estimated useful life of its Property, Plant and Equipment, based on its expected useable period,
and any adjustments if there are material variations from the estimates and the actual condition due to wear and tear, and technical
obsolescence. An average 31.19% of its Total Assets are comprised of its current assets account, and an average of 18.45% of its Total Assets
is from the bottles and cases, which is net of any allowances recorded for unusable and returnable bottles and cases. In 2019, the Company
recorded Right of Use Assets related to it leased properties whose lease terms are more than 12 months, and Intangible Assets relating to the
Company’s purchase of software and licenses, which only comprise 1.61% and 1.01% of total assets for the year, respectively. The remaining
4.66% of its average Total Assets are composed of its other assets.

An average of 53.55% of its Total Liabilities is comprised of its Accounts Payable and Accrued
Asset Breakdown Expenses. This account materially consists of its Trade Payables that pertains to raw material
as of December 31, 2019 purchases made by the Company on account and refundable customer deposits. 19.75% of its
Total Liabilities, on average, is from the Long-Term obligations of the Company, net of the
6%
current portion; this account includes all noncurrent long-term loan obligations from Philippine
Property, plant,
43% and Korean commercial banks, where for the periods covered in this report, PIP has been
18% and equipment
compliant with the terms of the financial covenants of its loan agreements.
Current assets
The derived Net Asset Value of PIP ranges from PhP9,142.51 million to PhP9,161.07 million.
Bottles and cases
This Net Asset Value range would correspond to an indicative share price of PhP2.48 per
share, when allocated to the total number of outstanding shares of PIP. No further adjustments
Other non-current
33% assets were made as 1) PIP does not own land from which revaluation gain can be recognized and 2)
no appraisal reports were provided.
The Financial Advisor is of the opinion that the derived valuation using Net Asset Value does not satisfactorily reflect the value of PIP’s common
shares. While the Company operates as a manufacturer, seller, and distributor of snacks, food, and food products, this valuation method is
deemed not suitable, considering that: historically, PIP traded below book value during the period covered in this report; it does not take into
account the Company’s ability to generate earnings and cash flow for its equity owners from its assets versus the book value of its assets; and
that the Company continues to be a going concern and the Transaction shall not be a trigger for liquidation . NAV, therefore, is presented for
illustrative purposes only, and without influence to the recommended fair value range.
COMPARABLE PUBLIC COMPANIES APPROACH

The Comparable Public Companies (“CPC”) approach is a form of relative valuation that estimates the value of a company based on valuation
metrics or multiples of publicly-listed companies in the same industry or business, or other similarities. The CPC approach operates under the
assumption that similar companies will have the same valuation multiples. Additional information regarding the comparable public companies
used in this valuation exercise can be found in Annex III of this valuation report.
A summary of the valuation metrics used can be found below:
2019 2019, Calendar Year-End Multiples

Comparable Company Country Market Capitalization P/S P/E P/B EV/EBITDA
Fraser & Neave Malaysia 158,213.02 3.06x 30.73x 4.81x 19.21x
Ceylon Cold Stores Sri Lanka 21,097.58 1.14x 42.27x 4.74x 14.32x
SermSuk Thailand 14,498.87 0.73x (30.73)x 0.97x 29.36x
Macay Philippines 7,712.98 0.63x 29.23x 0.87x 2.00x
Haad Thip Thailand 6,613.35 0.67x 10.27x 1.57x 6.45x
Chuong Duong Beverage Vietnam 509.53 0.87x 15.62x 1.19x 3.93x
Median 0.80x 22.42x 1.38x 10.39x
Data Source: FactSet Research on August 5, 2020
Market Cap. data as of 31 Dec. 2019
Average 1.2x 16.2x 2.4x 12.5x
12.82% Discount 0.70x 19.55x 1.20x 9.05x
The Financial Advisor carefully selected the peer group comparable companies based from the operating beverage manufacturing companies
in the Southeast Asian region which carry, manufacture, package, and distribute international brands under a license agreement. The median
valuation multiples derived from the 2019 calendar year-end results of the comparable companies were taken as to be reflective of the industry
where the Company operates, and was discounted by 12.82% to account for a discount of lack of control on the shares covered by the
Transaction. This discount was derived from the resulting control premium from the price per share tendered by LOTTE Chilsung which
concluded last June 2020, over the prevailing market price of PIP on the same date. As stated, the Transaction covers the common shares
which are held of the minority shareholders. Intrinsically, minority shareholders have little to no authority to make strategic decisions for the
Company as a whole, nor the power to directly influence the election of the Board of Directors.
The resulting multiples were then applied to the 2019 audited financial data of the Company to arrive at a corresponding valuation of the
company’s equity.
Indicative Valuation 2019, Calendar Year-End

Market Capitalization (in PhP Millions) P/S P/E P/B EV/EBITDA
High (Median) 28,174.24 6,698.26 12,573.31 31,761.24
Low (12.82%) 24,562.16 5,839.50 10,961.34 26,660.86
Price per share
High (Median) 7.63 1.81 3.40 8.60
Low (12.82%) 6.65 1.58 2.97 7.22
2020, LTM March-End Multiples

Median 0.78x 21.99x 1.13x 9.97x

Data Source: FactSet Research on August 5, 2020. Average 1.0x 12.6x 2.0x 10.4x
Market Cap data as of 18 Aug. 2020 12.82% Discount 0.68x 19.17x 0.98x 8.69x
Given that the Company’s Last Twelve Months (“LTM”) ending 31 March 2020 results are available, the Financial Advisor also took into
consideration the median valuation multiples derived from the LTM 2020 results of the comparable companies as this has been believed to be
reflective of the operating results brought about by events such as: the effect of the ongoing US-China Trade War, and the limitations brought
about by the COVID-19 pandemic among others. The resulting peer group median multiples was subsequently discounted by 12.82% to account
for a discount for lack of control.
The resulting multiples were then applied to the 31 March 2020 LTM financial data of the Company to arrive at a corresponding valuation of
the Company’s equity.
Indicative Valuation 2020, LTM March-End

High (0.00% disc.) 26,880.61 4,869.20 10,037.03 26,514.34
Low (12.82% disc.) 23,434.37 4,244.94 8,750.23 22,193.76
Price per share P/S P/E P/B EV/EBITDA

High (0.00% disc.) 7.28 1.32 2.72 7.18
Low (12.82% disc.) 6.34 1.15 2.37 6.01
Attention should be pointed to the unavailability of forward multiples of the peer group comparable companies identified herein and the exclusion
of the Company’s projections in this valuation exercise. As of the date of this report, forward multiples of the peer group comparable companies
have not been made available through any market research publications. And, while projections of the Company have been provided – it has
been determined through further analysis of the model that it would be impracticable to use for the purposes of this valuation, as it has been
prepared with pre-COVID-19 assumptions which raises concerns over its timeliness and relevance, and the limitation faced by the Financial
Advisor in independently verifying and deriving useful information for analysis and valuation purposes.
(P/E) PRICE-TO-EARNINGS
The P/E multiple measures the price that investors are willing to pay as risk and prospects for growth. It has to be noted that this
for each Peso of earnings after tax that a company generates. This approach is a popular benchmark for valuation, especially for
ratio, being easy to compute and widely available and used when manufacturing companies such as PIP, since the business model of
valuing stocks, makes comparison with the value of other listed the Company and its peer group comparable companies within the
companies within the same or similar industry or sector a lot easier. same industry provides for a relatively stable earnings result. The
It also serves as an indicator for other characteristics of the firm such P/E ratio is computed by dividing the estimated market value of a

Company by its earnings or net income for the year immediately to PhP4,869.20 Million, or an indicative share price of PhP1.15 to
succeeding the current year. PhP1.32 per share.
Based on the resulting P/E multiple for the 2019 calendar year-end The Company’s profit (loss) recorded for the year 2019 and LTM-
of 19.55x to 22.42x, the resulting valuation places the Company’s ending March 2020 has been considered for this valuation metric. It
indicative market valuation to be PhP5,839.50 Million to is composed of the Company’s net profit (loss) derived from its
PhP6,698.26 Million, or an indicative share price of PhP1.58 to continuing operations less the losses incurred from its discontinued
PhP1.81 per share. operations, net of tax.
Based on the resulting P/E multiple for the LTM ending 31 March The Financial Advisor is of the opinion that the P/E multiple is an
2020 of 19.17x to 21.99x, the resulting valuation places the appropriate valuation metric for PIP, given that it is reflective of
Company’s indicative market valuation to be PhP4,244.94 Million earnings that would accrue to common shareholders.
(P/S) PRICE-TO-SALES
A stock’s price/sales ratio (P/S ratio) is another stock valuation Based on the resulting P/S multiple for the LTM ending 31 March
indicator similar to the P/E ratio. The P/S ratio measures the price of 2020 of 0.72x to 0.82x, the resulting valuation places the Company’s
a company’s stock against its annual sales, instead of earnings. Like indicative market valuation to be PhP23,434.37 Million to
the P/E ratio, the P/S reflects how many times investors are paying PhP26,880.61 Million, or an indicative share price of PhP6.34 to
for every dollar of a company’s sales. This valuation method is PhP7.28 per share.
particularly useful for start-up businesses which are in the
introductory to early growth stages of operations. The sales considered for this valuation metric is based on the
Company’s total external sales for the year 2019 and the LTM-
Based on the resulting P/S multiple for the 2019 calendar year-end ending March 2020, less the sales returned and allowances for the
of 0.70x to 0.80x, the resulting valuation places the Company’s same years indicated. The Financial Advisor is of the opinion that
indicative market valuation to be PhP28,174.24 Million to the P/S multiple is not a suitable valuation metric for PIP, as PIP is
PhP24,562.16 Million, or an indicative share price of PhP6.65 to not a start-up or in the early stages of growth, and is presented for
PhP7.63 per share. illustrative purposes only.
(P/B) PRICE-TO-BOOK
This ratio measures the relationship of the market value of a firm extent of premium or discount imputed by stock market investors vis-
versus the amount the firm has received from its stockholders in the à-vis its net book value.
form of investments or money reinvested in their behalf—the
retained earnings. It indicates how much a firm is worth as the Based on the resulting P/B multiple for the 2019 calendar year-end
market dictates, and how much it took and is taking its owners to of 1.20x to 1.38x, the resulting valuation places the Company’s
keep it in operation. Thus, the price-to-book value ratio indicates the indicative market valuation to be PhP10,961.34 Million to

PhP12,573.31 Million, or an indicative share price of PhP2.97 to liabilities from the total assets for the year 2019 and LTM-ending
PhP3.40 per share. March 2020. The Financial Advisor is of the opinion that the P/B
multiple is not a suitable valuation metric for PIP, as the peer group
Based on the resulting P/B multiple for the LTM ending 31 March generally had higher return on equity in comparison, and is
2020 of 0.98x to 1.13x, the resulting valuation places the Company’s presented for illustrative purposes only. The Financial Advisor
indicative market valuation to be PhP8,750.23 Million to further notes that PIP’s shares have historically traded below its
PhP10,037.03 Million, or an indicative share price of PhP2.37 to book value which may be reflective of the Company’s ability to
PhP2.72 per share. generate earnings vis-à-vis the book value of its assets.
The book value considered for this valuation metric is equal to the
net asset value of the company, derived by subtracting the total
(EV/EBITDA) ENTERPRISE VALUE-TO-EBITDA

The Enterprise Value (“EV”) of a company is interpreted as the Based on the resulting EV/EBITDA multiple for the LTM ending 31
takeover value as it considers the level of debt that needs to be March 2020 of 8.69x to 9.97x, the resulting valuation places the
settled to gain 100% control of the target company. The Earnings Company’s indicative market valuation to be PhP22,193.76 Million
Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”), to PhP26,514.34 Million, or an indicative share price of PhP6.01 to
meanwhile, is usually used as a proxy for Free Cash Flow (“FCF”) PhP7.18 per share.
and measures profitability before payments are made to debt
holders, taxes are paid, and depreciation of assets are recognized. The Company’s EBITDA considered for this valuation metric is
In doing so, the EBITDA margin is a comparable measure between calculated from the Company’s reported operating profit (loss),
companies with different capital structures and tax regimes. adding back the booked Depreciation and Amortization expenses
However, while the EV/EBITDA is a good comparable multiple as it for the year 2019 and LTM-ending March 2020. The Financial
allows for the comparison of companies under different capital Advisor is of the opinion that the EV/EBITDA multiple is not a
structures, it does ignore the capital structure of the company; not suitable valuation metric for PIP, as it disregards Depreciation and
taking into consideration the leverage of the company and its impact Amortization which is significant in PIP's line of business, the peer
on income and operating cash flows to its equity investors. group have a relatively similar tax rate to the Company, and the
EV/EBITDA multiple is best suited for majority acquisitions where
Based on the resulting EV/EBITDA multiple for the 2019 calendar the amount of debt of a target company must be taken into account.
year-end of 9.05x to 10.39x, the resulting valuation places the As a result, the EV/EBITDA multiple is presented for illustrative
Company’s indicative market valuation to be PhP26,660.86 Million purposes only.
to PhP31,761.24 Million, or an indicative share price of PhP7.22 to
PhP8.60 per share.

RECOMMENDED VALUATION
The objective of this Valuation Report and Fairness Opinion is to determine the fair value of PIP’s outstanding common shares which are the
subject of the Transaction, which are the remaining 77,988,345 common shares of PIP held by the public equivalent to a 2.11% equity stake.
The Financial Advisor further considered the relevance of the various approaches used in this valuation exercise to the status and condition of
the Company.
The illustration below summarizes the resulting market capitalization derived from the different valuation methodologies employed, and the
Financial Advisor’s recommended valuation for the common shares of Pepsi-Cola Products Philippines, Inc. subject of the Transaction.
PIP Indicative Valuation

(In PhP Millions)
Market Capitalization Price per Share
Valuation Method Min Max Min Max
6-month VWAP 6,912.35 6,912.35 1.87 1.87
1-year VWAP 6,712.91 6,712.91 1.82 1.82
2-year VWAP 6,248.81 6,248.81 1.69 1.69
Net Asset Value 9,142.51 9,161.07 2.48 2.48
CPC P/S - CY '19 24,562.16 28,174.24 6.65 7.63
CPC P/E - CY '19 5,839.50 6,698.26 1.58 1.81
CPC P/BV - CY '19 10,961.34 12,573.31 2.97 3.40
CPC EV/EBITDA - CY '19 26,660.86 31,761.24 7.22 8.60
CPC P/S – LTM ‘20 23,434.37 26,880.61 6.34 7.28
CPC P/E – LTM ‘20 4,244.94 4,869.20 1.15 1.32
CPC P/BV – LTM ‘20 8,750.23 10,037.03 2.37 2.72
CPC EV/EBITDA – LTM ‘20 22,193.76 26,514.34 6.01 7.18
Overall Average 12,971.98 14,711.95 3.51 3.98
Fair Valuation 5,665.60 6,159.93 1.53 1.67
In arriving at a Fair Valuation for the outstanding common shares of the Company which is the subject of the Transaction, the Financial Advisor
examined the following complementary methods, without impact to the resulting fair valuation:
On the valuations resulting from the Volume Weighted Average Price method, the Financial Advisor is of the opinion that the derived 1-year
and 2-year Volume Weighted Average Price are not reasonable valuation metrics for PIP. Historical developments from before 2020 are no
longer reflective of recent market developments’ impact on the trading price of the Company. The Financial Advisor also considered that the
trading history of the Company prior to 2020 is not reflective of market speculation, certain corporate announcements regarding changes in its
business and operations, changes in government regulations that either directly or indirectly affects the Company or the industry where the
Company operates, or regulatory decisions over applications that directly affect the Company’s strategic initiatives.
The Financial Advisor is of the opinion that the derived valuation using Net Asset Value is not a good metric for PIP. While the Company
operates as a manufacturer, seller, and distributor of snacks, food, and food products, this valuation method is deemed not suitable for the
following reasons:
• It does not efficiently distinguish and identify the value of the assets held by the Company that are pledged as collateral, if any, to debt;
• The Company continues to be a going concern and the Transaction shall not be a trigger for liquidation
• No revaluation of any assets has been applied; and,
• It does not take into account the Company’s ability to generate earnings and cash flow for its equity owners from its assets vis-à-vis the
book value of its assets, which may vary from business to business.
Among the relative valuation approaches, Price-to-Sales is considered not a fitting valuation metric for the Company as it ignores the Company’s
cost and capital structure (tax and COGS, profit margins) and is a valuation approach better suited for start-ups. Price-to-Book was considered
to be inappropriate for this exercise as the metric disregards the Company’s actual ability to generate earnings and cash flow for its equity
owners from its assets vis-à-vis the book value of its assets, which may vary from business to business. In this exercise it was observed that
the peer group generally had higher return on equity in comparison. We believe this is further reflected in the fact that PIP’s shares have
historically traded at below its book value. The Financial Advisor considers the use of EV/EBITDA for the Company may be misleading due to
the exclusion of Taxes, Depreciation and Amortization of the Company in the analysis; while Depreciation and Amortization are non-cash
expenses, these are still important factors considering the Company operates as a manufacturer of products. Considering that the peer group
comparable companies identified for this valuation exercise shows a relatively similar tax rate with the Company, EV/EBITDA would not be a
reasonable metric – which is normally used for comparing companies with widely varying tax rates. In addition, the EV/ EBITDA multiple is
better suited for majority acquisitions where a potential acquirer would have to take into account the amount of debt when taking over a business.
The Discounted Cash Flow approach and the Dividend Discount Model were not considered as an appropriate method for valuing the Company
since the financial projections provided for the Company were not substantially sufficient for the Financial Advisor to be able to satisfactorily
verify the basis for such projections and prepare a corresponding valuation. See Annex IV Financial Projections. Furthermore, the projections
were determined to be inconsistent with observed historical trends of PIP’s financial performance from 2017 - 2019 and may not accurately
capture recent developments in the market and industry as these were prepared in 2019 without consideration to the effects of COVID-19 and
other social developments that occurred in 2020 or that may occur in the future.
A review of the Company’s historical dividend payout ratio and dividend yield also indicate that dividends may not be representative of the
Company’s earnings for the period as a release of dividends was permitted in 2018, during which there was a net loss for the year, while the
improvement in PIP’s 2019 earnings was not matched by a commensurate increase in dividends. Because of the inconsistent historical
dividends, it was determined that without sufficient basis for future dividend payments and taking into account the recent change in control of
the business, the Dividend Discount Model would not be a reliable measure of the fair value of the Company’s common shares.
PIP Indicative Market Capitalization

(In PhP Millions)
For this Fairness Opinion and Valuation Report, the valuations derived from the Price to Earnings ratio of Comparable Public Companies based
on both calendar year-end and LTM results, along with the valuation result from the 6-month VWAP were considered to be the most appropriate
for this valuation exercise and the corresponding average from these three approaches was used. The Price to Earnings approach is quite
suitable for manufacturing companies and isolates value that accrues specifically to equity shareholders of the company. The VWAP approach
on the other hand provides a clear indication of how the market perceives the value of the stock to be, especially given that PIP’s shares have
historically been well traded. We perceive these approaches to provide an indication on how the Company’s efforts in its operating changes
towards profitability and ultimate results of operations are perceived in the market, and the impact of recent global economic and market
developments.
As a result and upon careful examination of the valuation exercise, the Financial Advisor is of the opinion that the common shares
outstanding of Pepsi-Cola Products Philippines, Inc. subject of the Transaction may be considered fairly valued at a range of PhP1.53
per share to PhP1.67 per share, or equivalent to a market capitalization of PhP5,665.60 Million to PhP6,159.93 Million. Therefore, the
Financial Advisor is of the opinion that the Tender Offer Price of PhP1.95 per share subject of the Transaction is fair from a financial
point of view as of 4 September 2020.
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Annex Pepsi-Cola Products Philippines, Inc. 4 September 2020
ANNEXES

Annex I Pepsi-Cola Products Philippines, Inc. 4 September 2020
ANNEX I | SUMMARY OF AUDITED CONSOLIDATED FINANCIAL STATEMENTS

audited by R.G. Manabat & Co.in accordance with Philippine Standards on Auditing (“PSAs”) were obtained from the public disclosures of PIP
to the PSE. Unicapital, Inc. did not verify the accuracy or the completeness of the information contained in the Financial Statements.
Statements of Profit or Loss and Other Comprehensive Income

GROSS SALES 40,080,245 38,175,672 35,526,599
LESS SALES DISCOUNTS, RETURNS AND ALLOWANCES 4,896,482 4,781,433 5,488,997
NET SALES 35,183,763 33,394,239 30,037,602
COST OF GOODS SOLD 28,370,170 27,685,013 22,784,614
GROSS PROFIT 6,813,593 5,709,226 7,252,988
OPERATING EXPENSES
Selling and distribution 4,085,669 3,942,304 4,360,523
General and administrative 1,210,612 1,171,703 1,047,784
Marketing 491,441 628,335 817,785
5,787,722 5,742,342 6,226,092
FINANCE AND OTHER INCOME (EXPENSES)
Equity in net earnings of associates 22,728 16,579 11,880
Interest income 5,266 5,354 4,725
Interest expense (407,736) (275,329) (136,836)
Other income – net 71,573 134,512 31,661
(308,169) (118,884) (88,570)
PROFIT (LOSS) BEFORE TAX 717,702 (152,000) 938,326
INCOME TAX EXPENSE (BENEFIT) 208,238 (29,837) 277,776
PROFIT (LOSS) FROM CONTINUING OPERATIONS 509,464 (122,163) 660,550
LOSS FROM DISCONTINUED OPERATIONS NET OF TAX (210,738) (77,377) (119,225)
OTHER COMPREHENSIVE INCOME (LOSS)
Item that will not be reclassified to profit or loss
Remeasurement gains (losses) on defined benefit liability - net of deferred tax (143,145) 75,675 (3,602)
TOTAL COMPREHENSIVE INCOME (LOSS) 155,581 (123,865) 537,723
Basic/Diluted Earnings Per Share 0.08 (0.05) 0.15

Statements of Financial Position
ASSETS
Current Assets
Cash 711,895 548,598 498,352
Receivables - net 2,823,843 2,542,413 2,404,681
Inventories 3,915,506 5,039,641 2,484,230
8,622,927 8,979,604 6,251,736
Noncurrent Assets
TOTAL ASSETS 26,224,806 26,172,640 24,144,371
Current Liabilities
Short-term debt 1,250,000 1,000,000 3,100,000
Equity
Share capital 1,751,435 1,751,435 1,751,435
Total Equity 9,142,510 9,159,065 9,445,456
Statements of Cash Flows

CASH FLOWS FROM OPERATING ACTIVITIES
Profit (loss) before tax from continuing operations 717,702 (152,000) 938,326
Loss before tax from discontinued operations (301,054) (110,538) (170,322)
Profit (loss) before tax 416,648 (262,538) 768,004
Adjustments for:
Depreciation and amortization 2,804,723 2,632,271 2,952,727
Interest expense 407,736 275,329 136,837
Retirement cost 115,753 123,879 116,684
Impairment losses on receivables, inventories, bottles and cases, and machinery and equipment 292,060 61,559 327,306
Loss (gain) on disposal of property and equipment (8,439) 14,566 24,516
Equity in net earnings of associates (22,728) (16,579) (11,880)
Interest income (5,266) (5,354) (4,725)
Operating profit before working capital changes 4,000,487 2,823,133 4,309,469
Changes in operating assets and liabilities
Decrease (increase) in:
Inventories 1,079,692 (2,593,478) (773,110)
Prepaid expenses and other current assets (337,050) 2,656 (76,791)
Receivables (332,973) (174,718) (485,270)
Increase (decrease) in accounts payable and accrued expenses (901,317) 1,010,496 639,019
Cash generated from operations 3,523,158 1,080,954 3,618,317
Interest received 5,243 5,278 4,718
Income taxes paid (197,804) (166,737) (173,443)
Contribution to plan assets (99,000) (124,000) (33,000)
Retirement benefits paid directly to employees (50,721) (36,036) (36,276)
Net cash provided by operating activities 3,180,876 759,459 3,380,316
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of property and equipment 8,514 2,667 6,347
Additions to:
Bottles and cases (1,607,614) (771,168) (1,472,332)
Property, plant and equipment (867,771) (1,205,087) (2,215,112)
Intangibles (264,053) - -
Decrease (increase) in other noncurrent assets (14,108) 75,996 (11,737)
Net cash used in investing activities (2,745,032) (1,897,592) (3,692,834)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from:
Short-term debt 11,100,000 16,250,000 18,200,000
Long-term debt 1,000,000 4,300,000 -
Repayments of:
Short-term debt (10,850,000) (18,350,000) (16,700,000)
Long-term debt (787,500) (600,000) (600,000)
Cash dividends paid (162,526) (162,526) (254,870)
Interest paid (347,988) (279,345) (154,308)
Debt issuance cost 7,500 30,250 -
Payments of lease liability (232,033) - -
Net cash provided by (used in) financing activities (272,547) 1,188,379 490,822
NET INCREASE IN CASH 163,297 50,246 178,304
CASH AT BEGINNING OF YEAR 548,598 498,352 320,048
CASH AT END OF YEAR 711,895 548,598 498,352
The Consolidated Interim Financial Statements for the periods as of and for the quarters ending 31 March 2019 and 2020 were obtained from
the public disclosures of PIP to the PSE and the SEC. Unicapital, Inc. did not verify the accuracy or the completeness of the information
contained in the unaudited Financial Statements.

GROSS SALES 8,785,451 9,372,153
NET SALES 7,701,115 8,288,053
GROSS PROFIT 1,264,362 1,701,226

ASSETS
Current Assets
Cash 967,499 521,647
Receivables - net 2,427,553 2,137,282
Inventories 4,335,291 4,634,064
9,193,014 8,622,927
Noncurrent Assets
TOTAL ASSETS 26,177,682 25,994,634
Current Liabilities
Short-term debt 1,687,500 1,650,000
Equity
Share capital 1,751,435 1,751,435

Total Equity 8,980,122 9,220,551

Profit (loss) before tax (247,609) 98,753
Adjustments for:
Depreciation and amortization 685,995 678,987
Interest expense 82,726 110,085
Retirement cost 29,582 27,007
Impairment losses (reversal of impairment losses) on receivables, inventories,
bottles and cases, machinery and equipment and others 10,111 62,439
Loss on sale of property and equipment 334 3,613
Equity in net earnings of associates (6,855) (6,404)
Interest income (1,189) (1,223)
Operating profit before working capital changes 553,095 973,257
Changes in operating assets and liabilities:
Receivables 384,696 400,980
Inventories (427,487) 347,027
Prepaid expenses and other current assets (185,871) (118,730)
Increase (decrease) in accounts payable and accrued expenses 1,198,208 (1,348,979)
Cash generated from (absorbed by) operations 1,587,965 257,710
Interest received 6,332 1,208
Income taxes paid (85,221) (7,335)
Contribution to plan assets - (8,069)
Retirement benefits directly paid by the Company - (3,251)
Net cash provided by (used in) operating activities 1,509,076 240,263
Proceeds from disposal of property and equipment 539 660
Additions to:
Property, Plant and Equipment (1,081,916) (233,290)
Bottles and cases (347,222) (460,870)
Decrease in other current assets 10,628 18,534

Net cash used in investing activities (1,417,971) (674,966)
Proceeds from availments of:
Short-term debt 437,500 3,200,000
Long-term debt 526 -
Payments of:
Short-term debt - (2,550,000)
Long-term debt (98,385) (150,000)
Principal payments of lease liability (87,377) -
Interest paid (86,765) (92,248)
Net cash provided by financing activities 165,499 407,752
NET DECREASE IN CASH 256,604 (26,951)
CASH AT BEGINNING OF PERIOD 711,895 548,598
CASH AT END OF PERIOD 968,499 521,647

Annex II Pepsi-Cola Products Philippines, Inc. 4 September 2020
ANNEX II | HISTORICAL STOCK PRICE (PSE: PIP)

Date Price CVol Date Price CVol Date Price CVol
08/04/20 - - 06/18/20 - - 04/30/20 1.91 128,000
08/03/20 - - 06/17/20 1.70 743,000 04/29/20 1.91 644,000
07/30/20 - - 06/16/20 1.69 36,000 04/28/20 1.91 501,000
07/29/20 - - 06/15/20 1.69 245,000 04/27/20 1.91 3,229,000
07/28/20 - - 06/11/20 1.69 506,000 04/24/20 1.91 3,120,000
07/27/20 - - 06/10/20 1.76 36,000 04/23/20 1.91 3,057,000
07/24/20 - - 06/09/20 1.84 87,000 04/22/20 1.81 1,767,000
07/23/20 - - 06/08/20 1.84 30,000 04/21/20 1.84 1,109,000
07/22/20 - - 06/05/20 1.86 27,000 04/20/20 1.81 1,969,000
07/21/20 - - 06/04/20 1.91 6,000 04/17/20 1.78 816,000
07/20/20 - - 06/03/20 1.91 616,000 04/16/20 1.80 333,000
07/17/20 - - 06/02/20 1.91 174,000 04/15/20 1.80 783,000
07/16/20 - - 06/01/20 1.88 58,000 04/14/20 1.80 407,000
07/15/20 - - 05/29/20 1.89 947,000 04/13/20 1.81 658,000
07/14/20 - - 05/28/20 1.90 145,000 04/08/20 1.80 578,000
07/13/20 - - 05/27/20 1.90 108,000 04/07/20 1.80 191,000
07/10/20 - - 05/26/20 1.91 265,000 04/06/20 1.80 379,000
07/09/20 - - 05/22/20 1.92 297,000 04/03/20 1.79 131,000
07/08/20 - - 05/21/20 1.92 304,000 04/02/20 1.81 396,000
07/07/20 - - 05/20/20 1.91 72,000 04/01/20 1.80 5,803,000
07/06/20 - - 05/19/20 1.91 87,000 03/31/20 1.80 2,259,000
07/03/20 - - 05/18/20 1.90 258,000 03/30/20 1.73 1,873,000
07/02/20 - - 05/15/20 1.91 1,025,000 03/27/20 1.30 150,000
07/01/20 - - 05/14/20 1.91 39,000 03/26/20 1.40 368,000
06/30/20 - - 05/13/20 1.92 206,000 03/25/20 1.35 81,000
06/29/20 - - 05/12/20 1.92 125,000 03/24/20 1.34 53,000
06/26/20 - - 05/11/20 1.92 1,003,000 03/23/20 1.34 29,000
06/25/20 - - 05/08/20 1.91 930,000 03/20/20 1.30 455,000
06/24/20 - - 05/07/20 1.91 3,188,000 03/19/20 1.38 64,000
06/23/20 - - 05/06/20 1.91 121,000 03/16/20 1.51 78,000
06/22/20 - - 05/05/20 1.91 46,000 03/13/20 1.50 270,000
06/19/20 - - 05/04/20 1.91 316,000 03/12/20 1.49 88,000

03/11/20 1.60 380,000 01/23/20 1.85 430,000 11/29/19 1.32 2,741,000
03/10/20 1.60 682,000 01/22/20 1.60 124,000 11/28/19 1.38 2,960,000
03/09/20 1.66 923,000 01/21/20 1.59 151,000 11/27/19 1.39 2,752,000
03/06/20 1.81 203,000 01/20/20 1.64 255,000 11/26/19 1.36 5,807,000
03/05/20 1.82 174,000 01/17/20 1.61 507,000 11/25/19 1.27 7,550,000
03/04/20 1.82 379,000 01/16/20 1.70 991,000 11/22/19 1.41 2,379,000
03/03/20 1.83 620,000 01/15/20 1.84 710,000 11/21/19 1.40 3,027,000
03/02/20 1.85 2,658,000 01/14/20 1.91 559,000 11/20/19 1.45 1,696,000
02/28/20 1.85 2,081,000 01/10/20 1.92 3,691,000 11/19/19 1.45 5,944,000
02/27/20 1.85 1,925,000 01/09/20 1.92 2,067,000 11/18/19 1.45 4,497,000
02/26/20 1.79 450,000 01/08/20 1.92 1,496,000 11/15/19 1.45 13,563,000
02/24/20 1.82 674,000 01/07/20 1.91 1,822,000 11/14/19 1.53 27,188,000
02/21/20 1.83 110,000 01/06/20 1.91 2,914,000 11/13/19 1.79 6,240,000
02/20/20 1.83 3,589,000 01/03/20 1.91 7,640,000 11/12/19 1.76 4,957,000
02/19/20 1.83 152,000 01/02/20 1.91 23,669,000 11/11/19 1.68 910,000
02/18/20 1.84 430,000 12/27/19 1.92 12,747,000 11/08/19 1.67 3,777,000
02/17/20 1.83 685,000 12/26/19 1.91 1,886,000 11/07/19 1.70 2,895,000
02/14/20 1.83 637,000 12/23/19 1.91 1,949,000 11/06/19 1.69 3,003,000
02/13/20 1.84 360,000 12/20/19 1.91 5,555,000 11/05/19 1.71 1,766,000
02/12/20 1.84 1,077,000 12/19/19 1.91 5,197,000 11/04/19 1.70 1,489,000
02/11/20 1.84 174,000 12/18/19 1.91 6,876,000 10/31/19 1.70 955,000
02/10/20 1.84 1,570,000 12/17/19 1.91 12,113,000 10/30/19 1.72 751,000
02/07/20 1.82 864,000 12/16/19 1.90 4,338,000 10/29/19 1.73 1,699,000
02/06/20 1.80 3,978,000 12/13/19 1.90 32,354,000 10/28/19 1.73 2,284,000
02/05/20 1.81 2,610,000 12/12/19 1.88 57,076,000 10/25/19 1.73 1,226,000
02/04/20 1.86 159,000 12/11/19 1.40 - 10/24/19 1.72 2,878,000
02/03/20 1.86 81,000 12/10/19 1.40 9,007,000 10/23/19 1.75 2,627,000
01/31/20 1.85 390,000 12/09/19 1.38 4,751,000 10/22/19 1.78 3,102,000
01/30/20 1.82 51,000 12/06/19 1.35 4,687,000 10/21/19 1.85 4,734,000
01/29/20 1.83 40,000 12/05/19 1.35 3,820,000 10/18/19 1.85 8,046,000
01/28/20 1.82 147,000 12/04/19 1.29 4,349,000 10/17/19 1.83 8,966,000
01/27/20 1.82 140,000 12/03/19 1.33 323,000 10/16/19 1.73 1,938,000
01/24/20 1.85 787,000 12/02/19 1.37 1,653,000 10/15/19 1.75 1,681,000

10/14/19 1.78 4,158,000 08/28/19 1.73 6,581,000 07/09/19 1.79 14,782,000
10/11/19 1.70 1,858,000 08/27/19 1.79 11,100,000 07/08/19 1.86 7,993,000
10/10/19 1.68 937,000 08/23/19 1.81 14,714,000 07/05/19 1.91 14,474,000
10/09/19 1.69 1,346,000 08/22/19 1.75 44,083,000 07/04/19 1.92 17,142,000
10/08/19 1.70 5,114,000 08/20/19 1.89 16,323,000 07/03/19 1.80 13,105,000
10/07/19 1.67 1,755,000 08/19/19 1.90 17,139,000 07/02/19 1.84 10,325,000
10/04/19 1.68 6,569,000 08/16/19 1.92 44,934,000 07/01/19 1.80 13,693,000
10/03/19 1.60 10,402,000 08/15/19 1.80 15,663,000 06/28/19 1.82 26,660,000
10/02/19 1.72 1,410,000 08/14/19 1.83 12,146,000 06/27/19 1.70 28,599,000
10/01/19 1.73 7,472,000 08/13/19 1.68 11,811,000 06/26/19 1.53 8,629,000
09/30/19 1.69 20,098,000 08/09/19 1.80 1,320,000 06/25/19 1.47 8,022,000
09/27/19 1.72 31,090,000 08/08/19 1.83 3,491,000 06/24/19 1.40 2,116,000
09/26/19 1.93 3,676,000 08/07/19 1.75 7,431,000 06/21/19 1.40 6,574,000
09/25/19 1.94 29,221,000 08/06/19 1.81 8,527,000 06/20/19 1.40 9,463,000
09/24/19 2.05 2,901,000 08/05/19 1.85 17,036,000 06/19/19 1.33 7,497,000
09/23/19 2.03 5,647,000 08/02/19 1.88 13,884,000 06/18/19 1.34 5,930,000
09/20/19 2.08 2,135,000 08/01/19 1.75 1,178,000 06/17/19 1.31 3,684,000
09/19/19 2.09 2,889,000 07/31/19 1.77 4,786,000 06/14/19 1.32 28,476,000
09/18/19 2.10 3,109,000 07/30/19 1.75 2,341,000 06/13/19 1.27 2,647,000
09/17/19 2.05 8,977,000 07/29/19 1.72 4,690,000 06/11/19 1.28 16,391,000
09/16/19 2.05 13,943,000 07/26/19 1.67 2,747,000 06/10/19 1.23 402,000
09/13/19 2.15 6,175,000 07/25/19 1.67 6,721,000 06/07/19 1.23 1,064,000
09/12/19 2.15 8,011,000 07/24/19 1.73 2,619,000 06/06/19 1.23 1,645,000
09/11/19 2.08 6,114,000 07/23/19 1.75 4,891,000 06/04/19 1.24 2,989,000
09/10/19 2.07 8,453,000 07/22/19 1.77 2,876,000 06/03/19 1.24 4,540,000
09/09/19 2.05 23,481,000 07/19/19 1.78 3,270,000 05/31/19 1.23 2,884,000
09/06/19 2.11 19,456,000 07/18/19 1.73 7,162,000 05/30/19 1.23 3,206,000
09/05/19 2.12 24,801,000 07/17/19 1.79 7,412,000 05/29/19 1.24 793,000
09/04/19 2.08 78,847,000 07/16/19 1.85 10,722,000 05/28/19 1.24 1,312,000
09/03/19 1.92 11,308,000 07/15/19 1.77 3,341,000 05/27/19 1.24 2,395,000
09/02/19 1.92 12,311,000 07/12/19 1.77 6,123,000 05/24/19 1.30 1,822,000
08/30/19 1.90 27,150,000 07/11/19 1.80 7,593,000 05/23/19 1.31 4,417,000
08/29/19 1.78 6,903,000 07/10/19 1.71 20,195,000 05/22/19 1.28 1,500,000

05/21/19 1.27 1,339,000 03/28/19 1.42 9,901,000 02/08/19 1.51 34,813,000
05/20/19 1.28 2,128,000 03/27/19 1.38 4,860,000 02/07/19 1.40 6,236,000
05/17/19 1.24 1,679,000 03/26/19 1.40 1,656,000 02/06/19 1.40 7,398,000
05/16/19 1.22 2,478,000 03/25/19 1.39 5,909,000 02/04/19 1.38 3,387,000
05/15/19 1.23 7,049,000 03/22/19 1.41 3,212,000 02/01/19 1.40 6,703,000
05/14/19 1.15 5,680,000 03/21/19 1.40 6,578,000 01/31/19 1.34 5,744,000
05/10/19 1.20 5,910,000 03/20/19 1.41 6,040,000 01/30/19 1.36 6,552,000
05/09/19 1.23 653,000 03/19/19 1.40 1,183,000 01/29/19 1.38 4,747,000
05/08/19 1.24 731,000 03/18/19 1.40 799,000 01/28/19 1.39 3,332,000
05/07/19 1.25 985,000 03/15/19 1.41 3,764,000 01/25/19 1.40 7,150,000
05/06/19 1.24 1,271,000 03/14/19 1.39 1,168,000 01/24/19 1.40 4,326,000
05/03/19 1.27 1,884,000 03/13/19 1.40 3,902,000 01/23/19 1.40 9,046,000
05/02/19 1.31 1,607,000 03/12/19 1.37 4,124,000 01/22/19 1.43 9,533,000
04/30/19 1.29 3,566,000 03/11/19 1.38 1,549,000 01/21/19 1.40 10,117,000
04/29/19 1.25 1,500,000 03/08/19 1.36 13,391,000 01/18/19 1.38 5,876,000
04/26/19 1.24 1,516,000 03/07/19 1.40 7,572,000 01/17/19 1.35 13,588,000
04/25/19 1.25 733,000 03/06/19 1.40 6,796,000 01/16/19 1.42 4,025,000
04/24/19 1.24 1,882,000 03/05/19 1.38 5,483,000 01/15/19 1.45 7,244,000
04/23/19 1.25 1,039,000 03/04/19 1.38 6,415,000 01/14/19 1.44 6,630,000
04/22/19 1.24 801,000 03/01/19 1.42 9,221,000 01/11/19 1.47 8,387,000
04/17/19 1.25 1,025,000 02/28/19 1.41 4,253,000 01/10/19 1.49 37,268,000
04/16/19 1.25 4,730,000 02/27/19 1.43 12,995,000 01/09/19 1.50 27,910,000
04/15/19 1.26 36,223,000 02/26/19 1.40 10,878,000 01/08/19 1.38 3,438,000
04/12/19 1.40 2,483,000 02/22/19 1.43 16,657,000 01/07/19 1.40 16,273,000
04/11/19 1.39 1,493,000 02/21/19 1.38 3,246,000 01/04/19 1.37 9,101,000
04/10/19 1.41 4,417,000 02/20/19 1.37 3,018,000 01/03/19 1.34 1,508,000
04/08/19 1.38 3,428,000 02/19/19 1.37 2,044,000 01/02/19 1.34 1,299,000
04/05/19 1.40 10,087,000 02/18/19 1.38 2,492,000 12/28/18 1.34 1,052,000
04/04/19 1.43 10,585,000 02/15/19 1.36 4,436,000 12/27/18 1.34 2,425,000
04/03/19 1.45 16,152,000 02/14/19 1.40 5,540,000 12/26/18 1.38 866,000
04/02/19 1.40 3,889,000 02/13/19 1.38 15,147,000 12/21/18 1.40 3,922,000
04/01/19 1.40 1,248,000 02/12/19 1.42 12,046,000 12/20/18 1.37 1,168,000
03/29/19 1.41 3,761,000 02/11/19 1.46 22,060,000 12/19/18 1.34 2,192,000

12/18/18 1.34 1,676,000 10/29/18 1.70 312,000 09/12/18 1.93 488,000
12/17/18 1.40 4,246,000 10/26/18 1.67 113,000 09/11/18 2.06 367,000
12/14/18 1.40 9,977,000 10/25/18 1.64 8,000 09/10/18 2.10 105,000
12/13/18 1.35 247,000 10/24/18 1.75 43,000 09/07/18 2.08 9,000
12/12/18 1.32 45,000 10/23/18 1.66 3,358,000 09/06/18 2.07 57,000
12/11/18 1.31 553,000 10/22/18 1.70 24,000 09/05/18 2.07 195,000
12/10/18 1.36 1,444,000 10/19/18 1.65 55,000 09/04/18 2.08 8,056,000
12/07/18 1.39 284,000 10/18/18 1.63 147,000 09/03/18 2.07 81,000
12/06/18 1.35 322,000 10/17/18 1.62 204,000 08/31/18 2.06 412,000
12/05/18 1.38 586,000 10/16/18 1.61 1,478,000 08/30/18 2.10 1,195,000
12/04/18 1.37 589,000 10/15/18 1.73 51,000 08/29/18 2.16 75,000
12/03/18 1.38 1,016,000 10/12/18 1.64 58,000 08/28/18 2.15 204,000
11/29/18 1.35 300,000 10/11/18 1.62 245,000 08/24/18 2.18 161,000
11/28/18 1.34 5,000 10/10/18 1.75 8,000 08/23/18 2.19 605,000
11/27/18 1.34 106,000 10/09/18 1.76 29,000 08/22/18 2.19 68,000
11/26/18 1.34 517,000 10/08/18 1.77 90,000 08/20/18 2.16 147,000
11/23/18 1.30 434,000 10/05/18 1.78 5,469,000 08/17/18 2.17 61,000
11/22/18 1.29 1,432,000 10/04/18 1.80 49,000 08/16/18 2.17 102,000
11/21/18 1.36 1,078,000 10/03/18 1.80 53,000 08/15/18 2.17 11,823,000
11/20/18 1.44 197,000 10/02/18 1.80 89,000 08/14/18 2.20 103,000
11/19/18 1.44 308,000 10/01/18 1.81 33,000 08/13/18 2.22 22,000
11/16/18 1.49 226,000 09/28/18 1.80 88,000 08/10/18 2.22 74,000
11/15/18 1.49 791,000 09/27/18 1.79 108,000 08/09/18 2.22 43,000
11/14/18 1.56 21,000 09/26/18 1.88 68,000 08/08/18 2.25 35,000
11/13/18 1.56 31,000 09/25/18 1.75 77,000 08/07/18 2.23 73,000
11/12/18 1.57 100,000 09/24/18 1.75 79,000 08/06/18 2.21 195,000
11/09/18 1.57 36,000 09/21/18 1.66 943,000 08/03/18 2.26 231,000
11/08/18 1.52 807,000 09/20/18 1.80 237,000 08/02/18 2.35 261,000
11/07/18 1.59 413,000 09/19/18 1.90 254,000 08/01/18 2.27 31,943,000
11/06/18 1.62 93,000 09/18/18 1.83 46,000 07/31/18 2.25 210,000
11/05/18 1.65 289,000 09/17/18 1.90 1,120,000 07/30/18 2.21 38,000
10/31/18 1.65 345,000 09/14/18 1.90 178,000 07/27/18 2.25 60,000
10/30/18 1.70 261,000 09/13/18 1.92 380,000 07/26/18 2.24 45,000

07/25/18 2.25 6,000 07/11/18 2.24 291,000 06/27/18 2.22 1,875,000
07/24/18 2.27 2,000 07/10/18 2.26 262,000 06/26/18 2.25 139,000
07/23/18 2.21 7,000 07/09/18 2.28 542,000 06/25/18 2.25 177,000
07/20/18 2.30 15,000 07/06/18 2.25 1,188,000 06/22/18 2.20 13,946,000
07/19/18 2.25 2,892,000 07/05/18 2.26 520,000 06/21/18 2.20 56,000
07/18/18 2.25 162,000 07/04/18 2.20 3,043,000 06/20/18 2.28 288,000
07/17/18 2.25 356,000 07/03/18 2.20 1,609,000 06/19/18 2.21 28,000
07/16/18 2.25 12,389,000 07/02/18 2.20 4,349,000 06/18/18 2.21 1,521,000
07/13/18 2.25 571,000 06/29/18 2.22 283,000
07/12/18 2.25 1,208,000 06/28/18 2.20 212,000

Annex III Pepsi-Cola Products Philippines, Inc. 4 September 2020
ANNEX III | PEER GROUP SELECTION

Selected Financial Information
Comparable Public Market Enterprise Net Profit Total Debt/Enterprise
Company Stock Exchange Fiscal Period Capitalization Value Revenue Margin Value Return on Equity
Ceylon Cold Stores Plc
CSE (Sri Lanka) 06/30/2020 16,861 22,221 18,079 2.1% 0.3 9.0%
CCS.N0000-LK
Chuong Duong
Beverages JSC HSX (Vietnam) 06/30/2020 414 94 443 4.8% 0.2 4.9%
SCD-VN
Fraser & Neave
Holdings Bhd. KLSE (Malaysia) 06/30/2020 138,163 135,312 48,616 9.8% 0.01 15.4%
3689-MY
Haad Thip Public Co.
Ltd. SET (Thailand) 03/31/2020 5,606 6,117 11,061 5.3% 0.1 12.3%
HTC-TH
Macay Holdings, Inc.
PSE (Philippines) 03/31/2020 7,586 4,195 10,078 1.7% 0.1 2.2%
MACAY-PH
SermSuk Public Co. Ltd.
SET (Thailand) 06/30/2020 13,724 12,031 18,096 (1.5)% 0 -1.9%
SSC-TH
Values in PhP millions as of the fiscal periods indicated
Business Description
Comparable Public Company Business Description
Ceylon Cold Stores Plc Ceylon Cold Stores Plc engages in the manufacture and sale of carbonated soft drinks and frozen
CCS.N0000-LK confectionery food products. The firm operates its business under the Elephant House and IMORICH brands.
Its products include energy drinks, fruit flavoured tea, isotonic drinks, and flavoured fruit drinks. The company
was founded in 1866 and is headquartered in Colombo, Sri Lanka.
Chuong Duong Beverages JSC Chuong Duong Beverages JSC engages in the manufacture and sales of beverage products. It also offers raw
SCD-VN materials, packaging, equipment, and technology in the beverage industry. The company was founded in
1952 and is headquartered in Ho Chi Minh City, Vietnam.
Fraser & Neave Holdings Bhd. Fraser & Neave Holdings Bhd. engages in the manufacture, sale, and marketing of beverages and dairy
3689-MY products. The firm offers isotonic drinks; water and energy drinks, carbonated drinks; tea; soya; Asian soft
drinks; juices; condensed and evaporated milk; and liquid milk. It operates through the following segments:

Food and Beverages (F&B) Malaysia; F&B Thailand; Property; and Others. The company was founded by John
Fraser and David Chalmers Neave in 1883 and is headquartered in Kuala Lumpur, Malaysia.
Haad Thip Public Co. Ltd. Haad Thip Public Co. Ltd. engages in the manufacture and distribution of soft drinks. Its brands include Coca-
HTC-TH Cola, Sprite, Fanta, Schweppes, Minute Maid, Namthip, and Aquarius. The company was founded in 1969 and
is headquartered in Songkhla, Thailand.
Macay Holdings, Inc. Macay Holdings, Inc. engages in the manufacture and distribution of refreshment drinks. Its products include
MACAY-PH fruit, soft drinks, and root beer. The company was founded on October 16, 1930 and is headquartered in
Makati City, Philippines.
SermSuk Public Co. Ltd. SermSuk Public Co. Ltd. engages in the manufacture and distribution of beverages. It operates through the
SSC-TH following business segments: Carbonated Soft Drink and Non-Carbonated Soft Drink. The Carbonated Soft
Drink segment involves in the production and distribution of soft drinks, sport drink, and soda. The Non-
Carbonated Soft Drink segment includes the production and sale of drinking water, energy drink, tea, and
other beverages. The company was founded on April 18, 1952 and is headquartered in Bangkok, Thailand.

Annex IV Pepsi-Cola Products Philippines, Inc. 4 September 2020
ANNEX IV | FINANCIAL PROJECTIONS

Unit: Php 1 million
2018 2019 2020 2021 2022 2023 2024 2025
Net sales 33,394 35,184 37,647 40,282 43,102 46,119 49,347 52,801
Net sales CAGR 5.4 7.0 7.0 7.0 7.0 7.0 7.0
Cost of Goods Sold 27,685 28,370 30,072 31,877 33,789 35,817 37,966 40,244
% of COGS 82.9 80.6 79.9 79.1 78.4 77.7 76.9 76.2
Gross Profit 5,709 6,814 7,574 8,405 9,312 10,302 11,381 12,558
% of Gross Profit 17.1 19.4 20.1 20.9 21.6 22.3 23.1 23.8
Operating Expenses 5,742 5,788 6,077 6,381 6,700 7,035 7,387 7,756
% of Operating Expenses 17.2 16.4 16.1 15.8 15.5 15.3 15.0 14.7
Operating Profit -33 1,026 1,497 2,024 2,612 3,267 3,995 4,802
% of Operating Profit (0.1) 2.9 4.0 5.0 6.1 7.1 8.1 9.1
Other Income -103 -488 -100 -100 -100 -100 -100 -100
EBIT -136 538 1,397 1,924 2,512 3,167 3,895 4,702
Depreciation 2,602 2,775 2,886 3,001 3,121 3,246 3,376 3,511
CAPEX 1,976 2,871 2,900 2,900 2,900 2,900 2,900 2,900
Net Working Capital 200 245 249 257 269 300 300

Annex V Pepsi-Cola Products Philippines, Inc. 4 September 2020
ANNEX V | FREE CASH FLOW TO EQUITY

In PhP Millions March 2020 December 2019 December 2018 December 2017
Funds from operations 2,972.50 3,459.94 2,382.33 3,986.44
Extraordinary items 0 0 0 0
Changes in working capital 1,134.69 (627.05) (1,902.21) (760.43)
Net cash from operating activities 4,107.18 2,832.89 480.11 3,226.01
Less: Capital expenditure for fixed assets 3,210.36 2,475.39 1,976.26 3,687.44
Free cash flow to the firm 896.82 357.50 (1,496.14) (461.44)
Add: Net debt issued 302.1 462.5 1,600 900
Free cash flow to equity 1,198.92 820 103.86 438.56

Annex VI Pepsi-Cola Products Philippines, Inc. 4 September 2020
ANNEX VI | MANDATE LETTER



Annex VII Pepsi-Cola Products Philippines, Inc. 4 September 2020
ANNEX VII | PSE ACCREDITATION

3 / F Majalco Building, Benavidez corner Trasierra Streets, Legaspi Village, Makati City, Philippines 1229
Telephone: (+632) 88920991; Fax (+632) 88182127
Exhibit C
Certification by KEB Hana Bank on sufficiency of
Bidder’s resources to satisfy full acceptance of Tendered Shares
Exhibit D
Application to Tender Offer Shares
APPLICATION TO TENDER SHARES OF PEPSI-COLA PRODUCTS PHILIPPINES, INC.
This application must be prepared in This form (the Application) is made on the terms and conditions as set out in the Terms and Conditions of the Tender
triplicate and completed in all parts: Offer attached as Annex A to the Tender Offer Report (SEC Form 19-1, including any and all of its annexes and
schedules) which forms an integral part hereof. This Application is intended for shareholders of Pepsi-Cola Products
Copies to: Philippines, Inc. (the Company or PCPPI), who wish to tender their common shares in the capital stock of the Company
1. Bidder (the Tendered Shares) to Lotte Chilsung Beverage Co. Ltd. (the “Bidder”).
2. Tender Offer Agent
3. Applicant DO NOT COMPLETE THIS APPLICATION IF YOU ARE NOT OFFERING YOUR COMMON SHARES FOR PURCHASE
BY THE BIDDER.
Unless otherwise defined herein,
capitalized terms shall have the The Bidder has also prepared the Tender Offer Report, which was filed with the Securities and Exchange Commission
meanings ascribed to them in the (SEC) and the Philippine Stock Exchange (PSE) on 15 September 2020 for the purpose of describing the Tender Offer in
Tender Offer Report. detail. Each shareholder is advised to read and understand the provisions of the Tender Offer Report and the terms and
conditions stated therein and in this Application prior to making any decision. Inquiries and requests for assistance and
copies of the Tender Offer Report may be directed to First Metro Securities Brokerage Corporation (the Tender Offer
Agent), whose address and telephone number appear in the Terms and Conditions of the Tender Offer (Attachment 1 to
this Application), which forms an integral part of this Application. This Application, together with the required attachments
set forth below, must be duly accomplished and received by the Tender Offer Agent not later than 5:00 P.M. of October
13, 2020, unless otherwise extended by the Bidder with the prior approval of the SEC. The Bidder reserves the right to
accept or reject this Application (in whole or in part). This Application, after being submitted, may be withdrawn in writing in
accordance with the procedure set forth in the Terms and Conditions of the Tender Offer. The notice of withdrawal, to be
effective, must be received by the Tender Offer Agent before 5:00 P.M. of October 13, 2020.
DO NOT PROCEED UNLESS YOU HAVE DECIDED TO TENDER YOUR SHARES TO THE BIDDER
REPRESENTATIONS AND WARRANTIES

By executing this Application, I/We (the Tendering Shareholder) represents and warrants in favor of the Bidder and the Tender Offer Agent that: (a) all information
contained herein and in the attached documents are true and correct and that the signatures hereon are genuine, properly authorized and obtained without use of
fraud, coercion or any other vice of consent; (b) the Tendering Shareholder is the registered and absolute legal and beneficial owner of, with good and marketable titles
to the Tendered Shares; (c) the Tendered Shares have been validly issued and fully paid, and are non-assessable; (d) the Tendering Shareholder has obtained all the
required approvals and authorizations to enable it/him/her to transfer the Tendered Shares to the Bidders before the expiration of the Tender Offer Period and that
it/he/she is not aware of any objection, adverse claim, dispute, or notice concerning its/his/her right to tender and transfer the Tender Offer Shares; (e) upon the
transfer of the Tendered Shares in accordance with the Tender Offer, the Bidder will obtain full and valid legal and beneficial title to and ownership of the Tendered
Shares, free and clear from any warrants, interests, options, claims, objections, disputes, liens, or other encumbrances and will be able to freely and fully exercise all
rights and privileges arising from ownership of such Tendered Shares, including but not limited to the right to vote and receive dividends thereon; and (f) the tender of
any or all of the Common Shares by a Tendering Shareholder and/or the purchase or transfer thereof by the Bidder in accordance with the Tender Offer does not and
will not constitute a breach or other default of the Tendering Shareholder’s constitutive documents (as applicable) or of any agreement or arrangement, law, order, or
regulations applicable to the tendered Common Shares, the Tendering Shareholder, or to which any of the foregoing may be bound.
The undersigned Tendering Shareholder further warrants that it/he/she has read and has relied solely upon the provisions of the Tender Offer Report, any and all
documents and materials provided by the Bidder in connection therewith or in relation thereto, and the terms and conditions of the Tender Offer as stated therein, and
unconditionally accepts such terms and conditions. The Tendering Shareholder understands that no person has been authorized to give information or to make any
representation with respect to the Tender Offer other than those specified and made in the Tender Offer Report.
The undersigned Tendering Shareholder hereby expressly agrees and consents to the collection and processing of its/his/her personal information with respect to
information relating to or in connection with the Tender Offer, and hereby agrees and consents to the disclosure of the same for purposes of meeting the requirements
of the Tender Offer, any overseas or local regulators or tax authorities, or in compliance with rules of any exchange.
AUTHORIZATION
By virtue hereof, the Tendering Shareholder hereby authorizes the Tender Offer Agent to: (1) sell its/his/her Tendered Shares through the PSE; (2) to withhold and pay
from the proceeds of such sale such taxes, broker’s commission and other reasonable expenses that may be chargeable to its/his/her account; (3) to process, collect,
use, and/or store my personal information; (4) to disclose its/his/her personal information to the Bidder (or any person acting on its behalf), any overseas or local
regulators or tax authorities or in compliance with the rules of any exchange; and (5) to do or cause to be done and all such acts and things necessary or appropriate to
give full effect to and implement the foregoing.
Tendering Shareholder’s Full Name (in print)* Tendering Shareholder’s Address

(Building, Street Address, District, City and Country)
Tendering Shareholder’s Signature Tel No.(s) TIN/Passport Nationality
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- * This
Application shall be accomplished by the registered holder of the Tendered Shares or its/his/her duly authorized attorney-in-fact (for shareholders with stock certificates)
or by the broker with whom the Tendered Shares are maintained (for shareholders without stock certificates).
APPLICATION TO TENDER
The undersigned registered shareholder of PEPSI-COLA PRODUCTS PHILIPPINES, INC. (“PCPPI”) or the undersigned Participating Broker handling PCPPI
Common Shares on behalf of the beneficial owner of such PCPPI Common Shares and acting in accordance with and within the instructions of said beneficial owner,
as the case may be (in either case, the Applicant), hereby applies to sell ____________________________ PCPPI Common Shares (the Tendered Shares) for the
price stated below.
If covered by stock certificates, please fill up and attach separate sheet if needed:
PCPPI Stock Certificate No.(s) No. of Tendered Shares No. of Tendered Shares Price
Represented by Each Certificate*
The purchase price is PHP1.95 for each
share and will be payable in cash
(Philippine Pesos) subject to the Terms
and Conditions of the Tender Offer.
TOTAL PHP
ACKNOWLEDGEMENT
Tender Offer Agent’s Certification Acceptance
We received this Application, with all the required attachments below, at This Application is hereby accepted for _________________ common shares of
___________ a.m./p.m. on ___________________. PCPPI, subject to the terms and conditions set forth herein.
Tender Offer Agent’s Bidder’s Authorized

Authorized Signatory Signatory
REQUIRED ATTACHMENT TO THIS APPLICATION
A valid tender of the Common Shares shall be made by accomplishing and delivering this Application, which, along with the following attachments (applicable
to scrip or certificated shareholders only), must be received by the Tender Offer Agent not later than 5:00 P.M. of October 13, 2020.
1. Duly endorsed original stock certificates of PEPSI-COLA PRODUCTS PHILIPPINES, INC. (in blank) issued in the name of the Tendering Shareholder
and validated by the Stock Transfer Agent of the Company.
Tendering Shareholders whose shares are lodged with the Philippine Depository Trust Corporation (PDTC) who wish to offer all or a portion of
their Tender Offer Shares for sale to the Bidder should instruct their brokers (Participating Brokers) to accomplish and submit, on their behalf,
the duly accomplished Application, together with all the requirements as stated herein, to the Tender Offer Agent at its address as stated herein,
and instruct their Participating Broker to electronically transfer their Common Shares to the Tender Offer Agent for receipt by the Tender Offer
Agent prior to 5:00 P.M. of October 13, 2020 . The Participating Broker is required to comply with the Instructions to Brokers attached to this
Application as Attachment 6 hereof.
Delivery of each required document in relation to the Tender Offer to the Tender Offer Agent shall be deemed made only upon actual receipt
thereof by the Tender Offer Agent. The Bidder reserves the right to require presentation or submission of any additional documents for the purpose
of, among others, enabling the Bidder to determine from any Tendering Shareholder (or any person acting on its behalf, including any Participating
Broker) the validity, eligibility, and acceptability of any Common Shares in the Company tendered pursuant to the Tender Offer.
For individual shareholders:
(i) Photocopies of two (2) valid identification cards containing the Applicant’s photograph and specimen signature (i.e., driver’s license,
tax identification card, Social Security System/Government Service Insurance System identification card, or passport).
(ii) Two (2) duly accomplished specimen signature cards containing the specimen signature of the Applicant and verified by the Applicant’s
broker or by an officer of the bank at which the Applicant maintains an account (the signature card must specify the name of the broker
and the broker’s signatory or the name of the bank and the bank’s signatory, as the case may be). A copy of at least one valid ID of
the bank’s signatory is also required.
(iii) For shareholders acting through an attorney-in-fact, a duly notarized Irrevocable Power of Attorney (in substantially the form attached
to this Application). For married individuals who are Philippine citizens, their respective spouses must sign the space provided in the
Irrevocable Power of Attorney to indicate the marital consent to the sale of their PCPPI common shares.
For corporate shareholders:
(i) Notarized Board Resolution (in substantially the form of the Secretary’s Certificate attached to this Application) authorizing the sale of
its PCPPI common shares, designating signatories for the purpose and indicating the specimen signatures of those signatories.
(ii) Copy of the SEC Registration or equivalent constitutive document certified as a true copy of the original by the Corporate Secretary or
equivalent person having official custody of company records.
(iii) Copies of the latest Articles of Incorporation or By-laws of the Applicant or equivalent constitutive documents certified as true copies
of the original by the Corporate Secretary or equivalent person having official custody of company records.
(iv) Two (2) duly accomplished specimen signature cards containing the specimen signature of the Applicant’s designated authorized
signatories and verified by the Applicant’s Corporate Secretary or equivalent person having official custody of company records.
(v) Copy of the latest General Information Sheet (GIS) filed with the SEC and certified as a true copy of the original by the Corporate
Secretary or equivalent persons having official custody of company records.
For Partnership:
(i) Copy of SEC Registration or equivalent constitutive document certified as true copy of the original by the Partnership Secretary or
equivalent person having official custody of the partnership records.
(ii) Copy of the latest Articles of Partnership of the Applicant or equivalent constitutive document certified as true copy of the original by
the Partnership Secretary or equivalent person having official custody of the partnership records.
(iii) Notarized Partnership Resolution (in substantially the form of the Partners’ Certificate attached to this Application) authorizing the sale
of the Partnership’s PCPPI common shares, designating signatories for the purpose and indicating the specimen signature of the
signatories.
(iv) two (2) Duly accomplished signature cards containing the specimen signature of the Applicant’s designated authorized signatories and
verified by the Applicant’s Partnership Secretary or equivalent person having official custody of the partnership records.
For those with lost stock certificates:
(i) One (1) original of a duly notarized affidavit of loss (in substantially the form of the Affidavit of Loss
attached to this Application). (ii) Copy of the affidavit of loss as published in a newspaper of general
circulation.
(iii) One (1) original of the Affidavit of Publication executed by the relevant publishing entity attesting that the affidavit of loss and the
details required under the Revised Corporation Code of the Philippines have been published in a newspaper of general circulation in
the place where PCPPI has its principal office once a week for at least three consecutive weeks.
(iv) Applicable surety bond in an amount of twice the closing price per share of the PCPPI shares as of the date of execution of the
affidavit of loss, multiplied by the number of shares covered by each lost stock certificate, which bond shall run for a period of one
year.
OTHER INFORMATION
Without prejudice to the right of the Bidder (subject to prior approval by the SEC) to extend the Tender Offer Period, should any of the business days during
the period from September 16, 2020, the commencement of the Tender Offer Period, and October 13, 2020, inclusive, be officially declared as non-working
holidays after the filing of the Tender Offer Report on September 15, 2020 , the period shall be extended by the number of business days corresponding to
those which were declared as non-working holidays. For purposes hereof, a “business day” shall mean any day other than a Saturday, Sunday, or holiday on
which banks are required to be open for business in Makati City, Philippines.
This Application, together with all other required and applicable attachments as specified above (in form and substance as prescribed herein), must
be received by First Metro Securities Brokerage Corporation (the “Tender Offer Agent”) not later than 5:00 P.M. of October 13, 2020 at the 18F
PSBank Center, 777 Paseo de Roxas cor. Sedeño St., Makati City (Contact Persons: Ronald Emmanuel A. Co - Head – Operations, (02) 8859-0672;
[email protected]; Christine U. Chan - Head – Customer Management Dept., (02) 8859-0688; [email protected]; Josephine O.
So - Head - Securities Settlements, (02) 8859-0628; [email protected]. Applications received after the end of the Tender Offer Period
shall be rejected unless the Tender Offer Period is extended by the Bidder, upon prior approval by the SEC. Applications that are not properly
completed, or lack any of the required attachments will also be rejected. If the Tender Offer Agent is unable to verify the signature on the Application
or the endorsement of the relevant stock certificates, the Tender Offer Agent will also reject the Application.
Tendering Shareholders who hold stock certificates should submit within the Tender Offer Period their duly endorsed stock certificates and this duly
accomplished Application together with abovementioned requirements to the Tender Offer Agent not later than 5:00 P.M. of October 13, 2020 at the 18F
PSBank Center, 777 Paseo de Roxas cor. Sedeño St., Makati City (Contact Persons: Ronald Emmanuel A. Co - Head – Operations, (02) 8859-0672;
Christine U. Chan - Head – Customer Management Dept., (02) 8859-0688; Josephine O. So - Head - Securities Settlements, (02) 8859-0628.
Scripless Shareholders should likewise submit within the Tender Offer Period this duly accomplished Application and should cause and instruct their brokers
to electronically transfer their Tender Offer Shares to the Tender Offer Agent for receipt by the Tender Offer Agent prior to 5:00 P.M. of October 13, 2020.
The shares tendered may be withdrawn by the relevant Tendering Shareholder any time during the Tender Offer Period, but only up to 5:00 P.M. of October
13, 2020, by submitting a written request for the withdrawal of the relevant Tendered Shares to the Tender Offer Agent, together with a copy of the Tendering
Shareholder’s Copy of the Application issued by the Tender Offer Agent. For a withdrawal to be effective the written notice of withdrawal must be timely
received by the Tender Offer Agent at the address set forth herein and must be delivered in accordance with the procedure and conditions set forth in the
Tender Offer Report.
All the Tendered Shares shall be purchased by the Bidder (subject to prior approval by the PSE) by way of block sale through the facilities of the PSE on or
around October 26, 2020 (the Cross Date), unless the Tender Offer Period is extended with the prior approval of the SEC. In this case, the block sale for the
Tender Offer Shares (subject to approval of the PSE) will be within 10 business days after the end of the extended Tender Offer Period. Any change in the
Cross Date shall be announced by the Bidder in the following newspapers of general circulation in the Philippines: The Manila Times and BusinessMirror.
The Tender Offer Shares shall be settled on the Cross Date (the “Settlement Date”), subject to any extension of the Tender Offer Period with the approval of
the SEC. All accepted Applications shall be settled only in the Philippines. The Tender Offer Agent will act as agent for the Tendering Shareholders for the
purpose of receiving the check payments from the Bidder and transmitting the check payments to such Tendering Shareholders. The check payments to be
issued to Tendering Shareholders shall be made available by the Tender Offer Agent for pick-up by the Tendering Shareholders starting on Settlement Date
at its offices. When collecting payment, the Tendering Shareholders shall present the “Applicant’s Copy” of the Application as well as proper government
identification (i.e., driver’s license, tax identification card, Social Security Services/Government Services and Insurance System card, or passport). Duly
authorized representatives shall be required to present an authorization letter from the Tendering Shareholders. Tendering beneficial owners of Tender Offer
Shares are advised to consult with their custodian, fiduciaries, or other similar agents to the manner by which they may collect payment from such agents. In
any event, no payment shall be made without the TO Agent having timely received the duly accomplished Application, the stock certificates evidencing the
Tender Offer Shares and other documents required herein. Any payment not collected within thirty (30) business days from the Cross Date shall be dispatched
via registered mail, to the address of the Tendering Shareholder indicated in the Application, at the risk of the Tendering Shareholders.
Payments for the Tender Offer Shares that have been accepted and purchased by the Bidder shall be made available by the Tender Offer Agent to: (i) each
selling broker which delivered the scripless shares of its tendering clients, the Scripless Shareholders; or (ii) the Tendering Shareholders that have delivered
certificated shares directly to the Tender Offer Agent. Checks shall be available for pick-up at the Tender Offer Agent’s office beginning the Settlement Date
up to thirty (30) days thereafter at the following address:

18F PSBank Center 777 Paseo de Roxas cor. Sedeño St.
Makati City
Any payment not collected from the Tender Offer Agent within thirty (30) calendar days from the abovementioned date shall be dispatched, via registered mail,
to the last recorded address of the Tendering Shareholder at the Tendering Shareholder’s risk.
For inquiries on the Tender Offer, please contact any of the following personnel of First Metro Securities Brokerage Corporation:
Head - Operations
(02) 8859-0672
Christine U. Chan
Head – Customer Management Dept.
(02) 8859-0688
Josephine O. So
(02) 8859-0628

For inquiries on the number of shares and stock certificates, please contact PCPPI’s Stock and Transfer Agent.

Address: 6784, Unit D 34/F Rufino Pacific Tower, Ayala Avenue, Makati
Tel. No.: 8403-2410/8403-2412
Fax No.: 8403-2412
Exhibit D
Annex B to the Application to Tender Shares:
Form of Irrevocable Power of Attorney
REPUBLIC OF THE PHILIPPINES)

_____________ CITY, METRO MANILA) S.S.
IRREVOCABLE SPECIAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, (the Seller) holds common shares

(with a par value of PHP 0.15 per share) of PEPSI-COLA PRODUCTS PHILIPPINES, INC.
(PCPPI or the Company);
WHEREAS, LOTTE CHILSUNG BEVERAGE CO LTD. (the Bidder) has filed a Tender Offer
Report with the Securities and Exchange Commission (SEC), declaring its intention to acquire,
through a tender offer in accordance with and subject to the terms and conditions of the Tender Offer
as stated in the Tender Offer Report, from shareholders of the Company.
WHEREAS, for valuable consideration, the Seller hereby irrevocably names, constitutes,
and appoints (the Attorney-In-Fact) as its/his/her attorney-in-fact, with full
power and authority to:
(a) tender common shares of stock in PCPPI owned by the Seller to

the Bidder in response to the Tender Offer and in accordance with and subject to the
terms thereof, and to sign, execute, and deliver, for and on behalf of the Seller, the
shares of stock in PCPPI owned by the Seller as contemplated by the Tender Offer;
(b) give any notice, request, consent, or waiver of any right, or receive any notice or
communication, or act on any request, as may be required of or permitted to be made
by common shareholders of PCPPI under the Tender Offer and any other documents
contemplated thereby;
(c) receive or deliver any money or funds due to the common shareholders of PCPPI under
the Tender Offer and any other document contemplated thereby, and issue a receipt
for any money so received or delivered; and
(d) do any and all things necessary or appropriate to give full effect to and implement
the foregoing.
HEREBY GIVING AND GRANTING unto my Attorney-in-Fact full power and authority to do
or perform all and every act necessary to carry into effect the foregoing, as fully to all intents and
purposes as the Seller might or could lawfully do, with full power of substitution and revocation, and
HEREBY RATIFYING AND CONFIRMING all that my Attorney-in-Fact shall lawfully do or cause to
be done under and by virtue of these presents as well as those already done heretofore.
IN WITNESS WHEREOF, the Seller has executed this Special Power of Attorney this
at .
SELLER
With my marital consent:
_____________________
Name of Spouse (if applicable)
Conforme:
________________
Attorney-in-Fact
BEFORE ME, a Notary Public for and in the above jurisdiction, on ___________, personally appeared the
following:
Name ID No. Date and Place of Issue
known to me and by me known to be the same person who executed the foregoing special power of
attorney and they acknowledged to me that the same is their free and voluntary act and deed.
IN WITNESS WHEREOF, I have hereunto set my hand and seal on the date and in the place above written.
Doc. No. _______;

Page No. _______;
Book No. _______;
Series of 2020.
Exhibit D
Annex C to the Application to Tender Shares:
Form of Secretary’s Certificate

SECRETARY’S CERTIFICATE
I, ________, of legal age, (nationality), and with business address at , after

having been duly sworn in accordance with law, hereby depose and state that:
1. I am the duly elected and qualified Corporate Secretary of

_____________ (the Corporation), a corporation duly organized and existing under and by
virtue of the laws of the Republic of the Philippines, with principal office at _______;
2. As such Corporate Secretary, I have in my custody the books and records and other papers of
the Corporation, including, but not limited to, the minutes of the meetings of the Board of
Directors and of the stockholders of the Corporation.
3. In the meeting of the Board of Directors of the Corporation held on ___at___ ,

where a quorum was present, the Board approved the participation of the Corporation in the
Tender Offer by LOTTE CHILSUNG BEVERAGE CO LTD. (the Bidder) for the common
shares of PEPSI-COLA PRODUCTS PHILIPPINES, INC. (PCPPI), to wit:
“RESOLVED, that the Board of Directors of (the

Corporation) hereby authorizes the participation by the Corporation in the
Tender Offer of shares of stock of PEPSI-COLA PRODUCTS PHILIPPINES,
INC (PCPPI), offered by the Bidder pursuant to the Terms and Conditions
of the Tender Offer and, for this purpose, the Corporation is hereby authorized
to tender for acceptance and purchase by the Bidder
common shares in
PCPPI, at the Tender Offer Price (as defined in the Tender Offer Report
dated __________), in accordance with and subject to the terms and
conditions of the Tender Offer as stated therein;
“RESOLVED, further, that, for purposes of the Corporation’s

participation in said Tender Offer, the following officer/s of the Corporation,
acting singly, have been constituted to be its duly authorized agents, whose
respective signatures shall bind the Corporation, to wit:
(a)
(b)
(c)
4. The specimen signatures of the foregoing signatories of the Corporation are as follows:
Name Specimen Signature
5. The above-quoted Board resolutions are in full force and effect and have not been amended,
suspended, revoked nor in any manner superseded as of the date hereof.
IN WITNESS WHEREOF, I have hereunto set my hand on this in

_, Philippines.
Corporate Secretary
SUBSCRIBED AND SWORN TO before me this at

affiant exhibited to me his/her Number
issued at on .
Doc. No. _______;

Page No. _______;
Book No. _______;
Series of 2020.
Exhibit D
Annex D to the Application to Tender Shares:
Partnership Resolution
IRREVOCABLE POWER OF ATTORNEY FOR PARTNERSHIP STOCKHOLDERS

RELATING TO A PROPOSED OFFER TO BUY SHARES IN
[Name of Partnership] (the “Partnership”), with address at

, HEREBY IRREVOCABLY APPOINTS
[Name of Broker] (the “Broker”), acting through any of its directors
or officers, to be the attorney-in-fact of the Partnership, to act in the name of the Partnership and on
the Partnership’s behalf, to do all acts and things whatsoever requisite, necessary or convenient to be
done, as it may in its absolute discretion determine, in connection with the sale or transfer of the
[number of shares] common shares, held by the Partnership in PEPSI-COLA
PRODUCTS PHILIPPINES, INC. (“PCPPI”) (the “Shares”) in favor of LOTTE CHILSUNG BEVERAGE
CO. LTD. (the “Bidder”) under the Terms of the Tender Offer (Exhibit A of SEC Form 19-1 filed by
the Bidder with the Securities and Exchange Commission (“SEC”), and in particular:
(a) to represent and warrant, as the Partnership hereby represents and warrants, to the Bidder that:
(i) the Partnership is the sole, absolute, legal and beneficial owner of the Shares and has good,
valid and marketable title to the Shares, free from any liens, encumbrances, and restrictions of
any kind and nature, (ii) the Partnership can and has full authority to transfer good, valid and
clean title to the Shares, and is not aware of any objection, adverse claim, dispute or notice
concerning its right to tender and transfer the Shares; (iii) Bidder will obtain full and valid title
to Shares, free and clear from any warrants, interests, options, liens, claims, objections,
disputes, and encumbrances and will be able to freely and fully exercise all rights and
privileges arising from ownership of Shares, including but not limited to the right to vote and
receive dividends; and (iv) the Shares are fully paid and non-assessable and there are no
further amounts payable by the Partnership to PCPPI or to any other entity in respect of these
securities; and (v) the transfer of the Shares to the Bidder shall not constitute a breach of the
constitutive documents of the Partnership or of any agreement or arrangement, law, order or
regulations or other issuances applicable to the Shares or the partnership or its assets or
properties;
(b) to sell the Shares to the Bidder through the Philippine Stock Exchange (“PSE”) at the Tender
Offer Price (as defined in the Tender Offer Report dated September 15, 2020) (exclusive of
block sales fees and charges (such as any selling broker’s commissions, payable by the
Partnership, as applicable, and the taxes thereon), which are for the selling shareholder’s
account) in accordance with the Terms and Conditions of the Tender Offer;
(c) to sign, execute, and complete on behalf of the Partnership any agreement or document
required in connection with or for the purpose of the sale or transfer of the Shares and to
ensure that any transfer of the same is effected in the stock and transfer book of PCPPI and
in the system of the Philippine Depository & Trust Corp.;
(d) to receive and accept the payment for the Shares on behalf of the Partnership pursuant to the
sale or transfer of Shares, and to deduct all expenses in relation to the sale or transfer of
Shares; and
(e) to do or cause to be done any and all such acts and things as shall be necessary or desirable
to effect the transfer of the Shares including the appointment of substitute/s and /or broker(s)
who will effect the sale or transfer of the Shares through the PSE.
HEREBY CONFIRMING AND RATIFYING everything which the BROKER or any of its duly
authorized directors or officers or substitute/s shall do or purport to do under this Irrevocable Power
of Attorney and holding the BROKER, its directors, officers, agents, employees, representatives or
substitute/s, free from any liability and agree to indemnify the latter from any claims, damages or
liabilities which may result, directly or indirectly, from the performance of the transactions pursuant to
the terms of this Power of Attorney, which is given in consideration of the BROKER effecting the sale
of the Shares as soon as possible and in any event not later than the Cross Date as defined in the
Terms of the Tender Offer or any extended date approved by the SEC; provided that, if the sale is not
made by such date, this Irrevocable Power of Attorney shall automatically lapse without need of any
act on the part of the Partnership; and provided further that this Irrevocable Power of Attorney shall
be governed by and construed in accordance with the laws of the Republic of the Philippines.
This Irrevocable Power of Attorney is given in consideration of the BROKER effecting the sale of the
Shares as soon as possible and in any event not later than the Cross Date as defined in the Terms
of the Tender Offer filed by the Bidder with the SEC, or any extended date approved by the SEC. If
the sale is not made by such date, this Irrevocable Power of Attorney shall automatically lapse
without need of any act on the part of the Partnership.
IN WITNESS WHEREOF this Irrevocable Power of Attorney has been executed on this
day of 2020.
(Signature over Printed Name of Authorized

Signatory/ies of Partnership Stockholder)
Signature over Printed Name of Witness Signature over Printed Name of Witness
Exhibit D
Annex E to the Application to Tender Shares:
Form of Affidavit of Loss

AFFIDAVIT OF LOSS
I, _, of legal age, (nationality), married / single, and a

resident of _, after having been duly sworn in accordance with law, do hereby
depose and state:
That I am a stockholder of PEPSI-COLA PRODUCTS PHILIPPINES, INC. (PCPPI or the Company),

owning ___________ common shares registered under the name _____________________, represented by
the following Certificates of Stock:
Certificate No. Number of Shares
That the above-mentioned certificates of stock were discovered missing and have not been found
or located despite diligent search;
That the above-mentioned certificates of stock have not been sold, pledged, mortgaged, nor in any
way encumbered by me, and that they are free from any lien or encumbrances;
That this affidavit has been executed for the purpose of securing new certificate/s in replacement
of the certificates of stock mentioned above and to request the Company to take the necessary steps
to prevent the negotiation or transfer of said lost certificate/s.
IN WITNESS WHEREOF, I have hereunto set my hand on this ______________ at

__________________ , Philippines.
Affiant
SUBSCRIBED AND SWORN TO before me this _________________ at ________________ affiant

exhibited to me his/her _________________ Number ____________ issued at ______________ on
__________________.
Doc. No. _______;

Page No. _______;
Book No. _______;
Series of 2020.
Exhibit E
Form of Announcement of Intention to
Conduct Tender Offer
11 September 2020
TO HOLDERS OF COMMON SHARES OF PEPSI-COLA PRODUCTS PHILIPPINES, INC.
LOTTE CHILSUNG BEVERAGE CO LTD. (the “Bidder”), one of the principal stockholders of Pepsi-Cola
Products Philippines, Inc. (“PCPPI”), hereby announces its intention to conduct a tender offer to acquire, subject
to satisfaction of certain conditions, all of the outstanding Common Shares of PCPPI owned and held by
stockholders other than the Bidder, Lotte Corporation, and Quaker Global Investments B.V., or approximately
77,858,236 Common Shares of PCPPI (the “Tender Offer Shares”) equivalent to 2.11% of the total issued and
outstanding capital stock of PCPPI as of 31 August 2020.
The Tender Offer Price for the Tender Offer Shares shall be ONE PESO AND 95/100 (Php 1.95) per Common
Share. A Tender Offer Report (in the form of SEC Form 19-1, including its annexes, exhibits and schedules)
will be filed by the Bidder with the Securities and Exchange Commission and the Philippines Stock Exchange
(“PSE”) on 15 September 2020, which contains, among others, the terms and conditions of the Tender Offer.
Copies of the Tender Offer Report and the relevant tender offer materials will be sent by the Bidder to each
common stockholder.
This Tender Offer follows the approval of the Board of Directors of PCPPI to voluntary delist the Common Shares
of the Company from the Main Board of the PSE in a special meeting held last 9 September 2020.
Yours truly,
The Board of Directors

LOTTE CHILSUNG BEVERAGE CO LTD.
Yours truly,

PESI-COLA PRODUCTS PHILIPPINES, INC.

Exhibit F
Form of Letter form Lotte Chilsung to
PCPPI stockholders transmitting the
Tender Offer Report
NOTICE OF THE TENDER OFFER

TO COMMON SHAREHOLDERS OF THE COMPANY
TO HOLDERS OF COMMON SHARES OF PEPSI-COLA PRODUCTS PHILIPPINES, INC. (PCPPI)
All holders of common shares of PEPSI-COLA PRODUCTS PHILIPPINES, INC (the “Common Shareholders”
and the “Company”, respectively) are hereby notified that on September 9, 2020 the Board of Directors of PEPSI-
COLA PRODUCTS PHILIPPINES, INC. (“PCPPI”) approved the voluntary delisting of the Common Shares of the
Company (the “Delisting”) from the Main Board of the Philippine Stock Exchange, Inc. (the “PSE”). In relation to
the Delisting and in compliance with the voluntary delisting rules of the PSE (the “Delisting Rules”), LOTTE
CHILSUNG BEVERAGE CO LTD. (the “Bidder”), one of the stockholders proposing to delist PCPPI will acquire
through a public tender offer (the “Tender Offer”), subject to satisfaction of certain conditions, approximately
77,858,236 Common Shares of PCPPI (the “Tender Offer Shares”) equivalent to 2.11% of the total issued and
outstanding capital stock of PCPPI as of August 31, 2020. The Tender Offer Shares shall exclude all shares
owned by the Bidder, Lotte Corporation, and Quaker Global Investments B.V. (the “Non-Public
Shareholders”). On September 15, 2020, the Bidder filed a Tender Offer Report (SEC Form 19-1, including any
and all of its annexes, exhibits and schedules) with the Company, the Securities and Exchange Commission
(“SEC”) and PSE. The Bidder is prepared to acquire through the Tender Offer as stated in the Tender Offer
Report (the “Tender Offer Conditions”), the Tender Offer Shares, at the tender offer price of ONE PESO AND
95/100 (Php 1.95) per common share (the “Tender Offer Price”).
Background on the Tender Offer
Lotte Chilsung has agreed with the Non-Public Shareholders to delist PCPPI from the PSE. On September 9, 2020,
the Board of Directors of the Company approved the Delisting. In relation to the Delisting and in accordance with
the Delisting Rules, the Bidder will undertake the Tender Offer, subject to the following conditions:
(i) The obligation of the Bidder to purchase the Tender Offer Shares through the tender offer will be under
the condition (among other conditions that the Bidder may prescribe) that during the Bidder’s tender
offer, the Common Shares will have been:
(1) Validly tendered by the Bidder’s shareholders other than the Non-Public Shareholders;
(2) Eligible for or otherwise capable of being purchased by the Bidder; and
in each case, in accordance with the terms and conditions of the tender offer as prescribed by the Bidder
(the “Tender Offer Conditions”). In the event the Tender Offer Conditions are not met, the Bidder may,
upon notice to the SEC and PSE, withdraw the tender offer.
(ii) upon completion of the tender offer, at least 97% of the total listed and outstanding Common Shares
shall collectively be held by the Non-Public Shareholders.
On September 15, 2020, the Bidder filed a petition for the Delisting (the “Delisting Application”) with the PSE.
The Tender Offer
Subject to the Tender Offer Conditions, the Bidder is conducting the Tender Offer for the Tender Offer Shares,
at the Tender Offer Price, which is payable in cash or by check in accordance with the procedures set forth
in the Tender Offer Report.
The Tender Offer Price does not include customary selling charges which shall be levied on the tendering
shareholder’s account. After deducting customary selling charges from a tendering shareholder’s account, the
net Tender Offer Price will be Php1.9324. Further, the customary selling charges that will be deducted by the
Bidder do not include any selling broker’s commission and/or any taxes thereon, which shall be payable by a
tendering shareholder and/or their broker.
The Tender Offer gives existing shareholders of the Company the opportunity to sell their Common Shares through
the facilities of the PSE prior to the Delisting, and realize their investment at a premium to (meaning an amount
that is more than) the current trading price of the Common Shares as of September 9, 2020, the date on which
the Board of Directors of the Company approved the Delisting and Tender Offer. The Tender Offer Price of ONE
PESO AND 95/100 (Php 1.95] per Common Share represents a 4.24% premium over the six-month volume
weighted average price (“VWAP”) and a 3.83% premium over the three-month VWAP of the Company’s Common
Shares.
A holder of the Common Shares should be aware that following completion of the Tender Offer, assuming that the
Tender Offer Conditions are met and the Delisting is approved by the PSE, delisted Common Shares will no longer
be available for trading on the PSE. In addition, any subsequent sale or transfer of his/her/its Common Shares will
be subject to the prevailing capital gains tax (levied on any capital gain generated by such holder through such
sale of transfer) and documentary stamp tax, instead of the stock transaction tax applicable to sales of listed shares
of stock transacted through the PSE.
The maximum aggregate purchase price of the Tender Offer Shares that may be payable by the Bidder under
the Tender Offer is approximately Php 151,823,560.20. KEB Hana Bank has confirmed that the Bidder has
sufficient resources, including cash, which are available to satisfy full acceptance of all of the Tender Offer
Shares that may be tendered pursuant to the Tender Offer. The sale and purchase of the accepted Tender Offer
Shares shall be settled on the Cross Date (the “Settlement Date”), subject to any extension of the Tender Offer
Period with the approval of the SEC.
The Bidder has engaged Unicapital, Inc., an independent financial advisor (the “IFA”), to give a fairness opinion on
PCPPI (the “Fairness Opinion”). The IFA was of the opinion that the Tender Offer Price of ONE PESO AND
NINETY FIVE CENTAVOS (Php 1.95) per share of the Company’s Common Shares that is fair from a financial
point of as of September 4, 2020. The Tender Offer Price is within the range provided by the IFA. A copy of the
Fairness Opinion Report is attached as Exhibit B to the Tender Offer Report.
The Tender Offer shall start at 9:00 am on September 16, 2020 and end at 5:00 pm of October 13, 2020 (the
“Tender Offer Period”), during which period any tendering shareholder of the Company may offer all or a
portion of their Common Shares in the Company for sale to the Bidder in accordance with, and subject to, the
terms and conditions of the Tender Offer. Common Shares to be tendered (the “Tendered Shares”), if any, and
accepted by the Bidder for purchase, are intended to be sold to and purchased by the Bidder by way of block
sale through the facilities of the PSE (subject to approval by the PSE) on or about October 26, 2020 (the “Cross
Date”).
Without prejudice to the right of the Bidder (subject to prior approval by the SEC) to extend the Tender Offer
Period, should any of the business days during the period from September 16, 2020 to October 13, 2020 and
upon commencement of the Tender Offer Period be officially declared as a non-working holiday after the filing
of the Tender Offer Report on September 15, 2020, the Tender Offer Period shall be extended by the number
of business days corresponding to those which were declared as non-working holidays. For purposes hereof, a
“business day” shall mean any day other than a Saturday, Sunday, or a non-working holiday on which banks
are required to be open for business in Makati City, Philippines.
For inquiries on the Tender Offer, please contact any of the following personnel of First Metro Securities
Brokerage Corporation:
• Ronald Emmanuel A. Co
Head - Operations
(02) 8859-0672
• Christine U. Chan
Head - Customer Management Dept. (02) 8859-0688
• Josephine O. So
(02) 8859-0628

Application Forms, together with all documentary requirements, must be received by the Tender Offer Agent not
later than 5:00 pm of October 13, 2020.
For inquiries about the number of Common Shares of a shareholder in the Company, please contact Stock
Transfer Service Inc., the Company’s Stock and Transfer Agent, at 6784, Unit D 34/F Rufino Pacific
Tower, Ayala Avenue, Makati City, Telephone No. 8403-2410/8403-2412.
Tendering Shareholders who hold stock certificates and who wish to offer all or a portion of their Common Shares
for acceptance and sale to the Bidder should, within the Tender Offer Period: (i) present their original stock
certificates to the Stock Transfer Agent at its office as stated herein for authentication by the Stock Transfer Agent,
and (ii) upon due authentication by the Stock Transfer Agent, submit their original stock certificates duly endorsed
in blank and the duly accomplished Application to Tender Shares (the “Application”), together with all the
requirements stated therein, to the Tender Offer Agent at its address as stated above.
On the other hand, Tendering Shareholders whose shares are lodged with the Philippine Depository Trust
Corporation (“PDTC”) and who wish to participate in the Tender Offer should instruct their brokers (“Participating
Brokers”) to accomplish and submit, on their behalf, the Application Form together with all requirements stated
therein and instruct their Participating Broker to electronically transfer their Common Shares which they intend
to tender to the Tender Offer Agent for receipt by the Tender Offer Agent prior to 5:00 pm of October 13, 2020.
In addition:
If you are a If you are an

CORPORATE SHAREHOLDER, INDIVIDUAL SHAREHOLDER,
please submit the following: please submit the following:
1. Certified true copies of the SEC 1. Certified true copies of the SEC Registration,
Registration, the latest Articles of the latest Articles of Incorporation and By-
Incorporation and By-laws of the laws of the shareholder or equivalent
shareholder or equivalent constitutive constitutive documents thereof.
documents thereof.
2. A notarized Secretary’s Certificate 2. For shareholders acting through an attorney-
substantially in the form prescribed by the in-fact, a duly notarized Irrevocable Power of
Bidder setting forth resolutions of the Attorney substantially in the form prescribed by
tendering shareholder’s Board of Directors the Bidder (N.B. Endorsement of stock
authorizing the tender and sale of the certificate/s must be made by the shareholder
Company's shares and designating the himself)
signatories for the purpose.
3. Copy of the latest General Information 3. Two (2) duly accomplished signature cards
Sheet (GIS) filed with the SEC or any containing the specimen signature of the
equivalent documents thereof and certified shareholder and verified by his broker (the
as a true copy of the original by the name of the broker and the broker’s signatory
Corporate Secretary or equivalent persons must be specified) or officer of the bank (the
having official custody of corporate name of the bank and the bank’s officer must
shareholder’s records. be specified) where he is maintaining an
account.
4. Two (2) duly accomplished specimen
signature cards containing the specimen
signature of the Applicant’s designated
authorized signatories and verified by the
Applicant’s Corporate Secretary or
equivalent person having official custody
of corporate shareholder’s records.
If you have lost your share certificates:

Shareholders who have lost their share certificates are required to submit (1) a notarized Affidavit of Loss in
the form prescribed by the Bidder, (2) together with a copy of the affidavit of loss as published in a newspaper
of general circulation, one (1) original of the Affidavit of Publication executed by the relevant publishing entity
attesting that the affidavit of loss and the details required under Section 72 of the Revised Corporation Code
of the Philippines have been published in a newspaper of general circulation in the place where PCPPI has
its principal office once a week for at least three consecutive weeks, and (3) an applicable surety bond in an
amount of twice the closing price per share of the PCPPI shares as of the date of execution of the affidavit of
loss, multiplied by the number of shares covered by each lost stock certificate, which bond shall run for a
period of one year.
If you are a PARTNERSHIP, please submit the following:

1. Copy of SEC Registration or any equivalent constitutive document of the shareholder certified as true
copy of the original by the Partnership Secretary or equivalent person having official custody of the
partnership records.
2. Copy of the latest Articles of Partnership or equivalent constitutive document of the shareholder
certified as true copy of the original by the Partnership Secretary or equivalent person having official
custody of the partnership records.
3. Notarized Partnership Resolution authorizing the sale of the shareholder’s PCPPI common shares,
designating signatories for the purpose and indicating the specimen signature of the signatories,
substantially in the form prescribed by the Bidder.
4. Two (2) duly accomplished signature cards containing the specimen signature of the shareholder’s
designated authorized signatories and verified by the shareholder’s Partnership Secretary or
equivalent person having official custody of the partnership records.
Delivery of each required document in relation to the Tender Offer to the Tender Offer Agent shall be deemed
made only upon actual receipt thereof by the Tender Offer Agent.
The Bidder or Tender Offer Agent reserves the right to require any Tendering Shareholder (or any person acting
on its behalf, including any Participating Broker) to present or submit additional documents for purposes of,
among others, enabling the Bidder or Tender Offer Agent to determine the validity, eligibility, and acceptability
of any Tendered Shares. Defective applications (e.g., with discrepancy between the specimen signatures on
file and the endorsement) must be corrected within the Tender Offer Period to avoid being rejected by the
Bidder. Hence, Tendering Shareholders are strongly urged against tendering at the last minute to allow
sufficient time to correct any deficiency in their application (or any document submitted in support
thereof). Tendering Shareholders are also urged to indicate their telephone numbers in their respective
Application Forms to allow the Tender Offer Agent to inform them immediately of any deficiency in their
applications.
Acceptance of any or all of the Tendered Shares by the Bidder for purchase pursuant to the Tender Offer is
subject to the fulfilment (or waiver, in the Bidder’s sole discretion) of all conditions set forth in the Tender Offer
Report, including, in particular, the Tender Offer Condition.
The Bidder has the right to withdraw the Tender Offer at any time prior to the Settlement Date if any of the Tender
Offer Conditions are not met to its satisfaction, provided that written notice of the withdrawal of the Tender Offer
shall be sent to all Tendering Shareholders on or before Settlement Date.
Any or all Tendered Shares may be withdrawn by the relevant Tendering Shareholder at any time during the
Tender Offer Period by submitting a written request for the withdrawal of the relevant Tendered Shares,
together with a copy of the Tendering Shareholder’s Copy of the Application issued by the Tender Offer Agent.
The last day to withdraw tendered Tender Offer Shares shall be on 5:00 pm of October 13, 2020.
For a withdrawal to be effective, the written request of withdrawal must be timely received by the Tender Offer
Agent at the address stated above. The written request for the withdrawal of any Tendered Shares must specify:
(a) the name of the Tendering Shareholder, and (b) the number of Tendered Shares to be withdrawn. If the
stock certificates evidencing the Tendered Shares have been delivered to the Tender Offer Agent, the serial
number of such certificates must likewise be indicated in the written request for withdrawal. The Bidder has the
right, in its sole discretion, to determine the validity of the written request for withdrawal.
Any Tendered Shares that are withdrawn in accordance herewith shall be returned in the same form they
were received to the PDTC Participant within twenty (20) business days from the end of the Tender Offer
Period. The cost of returning the Tender Offer Shares shall be borne by the shareholder making the withdrawal.
Tendering Shareholders are advised to read the Application Form, the Tender Offer Report (including
in particular the Terms and Conditions of the Tender Offer appended as Exhibit A thereof) as filed by
the Bidder with the SEC, PSE and the Company. For queries, please contact the Tender Offer Agent
at the contact details set forth below. Copies of the Application Form and the Tender Offer Report may also
be obtained by Common Shareholders, free of charge, from the following:

Address: 18F PSBank Center
Makati City
Head - Operations
(02) 8859-0672
Christine U. Chan
(02) 8859-0688
Josephine O. So
(02) 8859-0628

Yours truly,

Exhibit G
Form of Instruction to Participating
Brokers for delivering the shares to
their clients to the Tender Offer Agent,
First Metro Securities Brokerage
Corporation
INSTRUCTIONS TO BROKERS
In connection with the tender offer by LOTTE CHILSUNG BEVERAGE CO LTD. (the Bidder)
to acquire common shares in PEPSI-COLA PRODUCTS PHILIPPINES, INC. (PCPPI or the
Company), the following are the stock transfer guidelines for brokers who hold shares of their
clients in the Company under their respective Philippine Depositary Trust Corporation (PDTC)
accounts (the Participating Brokers).
The Bidder is proposing to acquire the Tender Offer Shares (as herein defined) at the Tender Offer
Price (as herein defined) in accordance with the Terms and Conditions of the Tender Offer. The
Tender Offer Shares consist of up 77,858,236 common shares of the Company held collectively by
all shareholders of the Company other than Lotte Corporation and Quaker Global Investments B.V. The
consideration for the Tender Offer Shares shall be ONE PESO AND 95/100 (Php 1.95) per
common share (the Tender Offer Price), excluding any customary selling charges and any selling
broker’s commission and taxes thereon (all of which shall be levied on a tendering shareholder’s
account), payable in cash or by check beginning on the Settlement Date.
Participating Brokers should inform their clients that all shareholders of the Company other than
Lotte Corporation and the members of the Board of Directors, with respect to their qualifying
common shares, and the officers of the PCPPI are eligible to participate in the Tender Offer. The
Tender Offer Period shall begin at 9:00 am on September 16, 2020 and end at 5:00 pm of
October 13, 2020. Only those shares electronically transferred to First Metro Securities Brokerage
Corporation (the Tender Offer Agent) as of 5:00 pm of October 13, 2020 are eligible for the Tender
Offer. Shareholders of the Company may withdraw the tendered securities any time during the
Tender Offer Period in accordance with the procedures set out in the Tender Offer Report.
Should their clients wish to participate in the Tender Offer, the Participating Brokers should request
such clients to issue a formal instruction for the said Participating Brokers to electronically transfer
their Common Shares in the Company to the Tender Offer Agent who will act as custodian for
such Common Shares. Charges for withdrawal and/or transfer will be imposed on the Participating
Broker’s account.
For orderly transfer and accurate tracking, the Participating Brokers should deliver an originally
signed letter to the Tender Offer Agent (in substantially the attached form) citing the exact number of
Shares being transferred under the Tender Offer.
Exhibit H
Form of Letter to Tender Offer Agent
From Participating Brokers Delivering
Shares of their Clients
LETTER TO FIRST METRO SECURITIES BROKERAGE CORP.

FROM PARTICIPATING BROKERS
DELIVERING SHARES OF THEIR CLIENTS
FIRST METRO SECURITIES BROKERAGE CORPORATION

18/F, PS Bank Center,
777 Paseo de Roxas cor. Sedeno St.,
Makati City, Philippines
Date:
Attention: MR. RONALD EMMANUEL A. CO
Dear Sir:
__________________________________________________ (Name of Participating Broker) is
delivering _____________________________ common shares of PEPSI-COLA PRODUCTS
PHILIPPINES, INC. (the Subject Company) from our clients who wish to participate in the Tender Offer
by LOTTE CHILSUNG BEVERAGE CO. LTD. (the Bidder) under the Terms and Conditions of the
Tender Offer (Exhibit “A” of the Tender Offer Report, that is, SEC Form 19-1, and any and all of its
annexes, exhibits, and schedules, dated Sept. 15, 2019 filed by the Bidder with the Securities and
Exchange Commission on Sept. 15, 2019, which we have read and understood. Our clients commit to
sell and authorize First Metro Securities Brokerage Corporation (the Tender Offer Agent) to sell these
shares to the Bidder for the Tender Offer Price indicated in, and subject to, the said Terms and
Conditions of the Tender Offer. These common shares will be held in custodianship by the Tender
Offer Agent until such time that the transfer of these common shares of the Subject Company to the
Bidder has been effected by the Tender Offer Agent.
Thank you.
Very truly yours,
____________________________ __________________________
Broker’s Name PDTC Account No.
By:
______________________________
Signature over Printed Name of Authorized
Signatory/ ies.
Telephone Number: _________________________
Fax Number _________________________
ACCEPTANCE AND CONFORME:
The Tender Offer Agent hereby accepts _________________________________ common shares of

PEPSI-COLA PRODUCT PHILIPPINES, INC. from the foregoing broker and shall hold these shares
in custody under the terms and conditions of the Tender Offer.
Duly accepted and with our conformity
-----------------------------------------------------------
FIRST METRO SECURITIES BROKERAGE CORP.
Authorized Signatory
Exhibit I
List of Top 100 Shareholders of PCPPI
as of June 30, 2020
Stock Transfer Service Inc. Page No. 1
PEPSI-COLA PRODUCTS PHILIPPINES, INC
List of Top 100 Stockholders
As of 06/30/2020
Rank Name Holdings Rank

------------------------------------------------------------------------------------------------------------------------
1 LOTTE CORPORATION 1,436,315,932 38.88%
2 PCD NOMINEE CORP (NON-FILIPINO) 1,306,763,701 35.38%
3 QUAKER GLOBAL INVESTMENTS B.V. 923,443,071 25.00%
4 PCD NOMINEE CORP. (FILIPINO) 21,816,227 00.59%
5 JOSEPH MARTIN H. BORROMEO 450,000 00.01%
6 LUCIO W. YAN 300,000 00.01%
7 RENE B. BLANCAVER 255,000 00.01%
8 WINEFREDA O. MADARANG 250,000 00.01%
9 VALERIANO A. LUGTI 150,000 00.00%
10 FELIX S. YU 149,998 00.00%
11 MA. CELESTE S. NARCISO 100,000 00.00%
12 JOSE I. UMALI 100,000 00.00%
13 JUANITO R. IGNACIO 100,000 00.00%
14 ROSAURO P. DINO 70,000 00.00%
15 ROBERTO E. TONGCUA 70,000 00.00%
16 ROBERTO H. GOCE 60,000 00.00%
17 CECILIA R. DUGURAN 60,000 00.00%
18 FELICITO C. SEBASTIAN 57,000 00.00%
19 MANUEL J. CATUNGAL 53,000 00.00%
20 JOSE DANILO V. SISCAR 50,000 00.00%
21 MA. ELENA L. ESTADILLA 50,000 00.00%
22 MA. JUDITH D. TANEDO 50,000 00.00%
23 LUIS R. JULLY 50,000 00.00%
24 RENE D. ORTIZ-LUIS 50,000 00.00%
25 RUBEN R. YU, JR. 50,000 00.00%
26 EMELIANO L. BUGNA JR. 50,000 00.00%
User ID: ZALDY Time: 07/10/2020 15:32:02

As of 06/30/2020

------------------------------------------------------------------------------------------------------------------------
27 GLORIA CARLOS REYES 50,000 00.00%
28 AVELINA DE PAZ 50,000 00.00%
29 DELFIN P. DIZON 50,000 00.00%
30 DOMINGO F. ALMAZAN 50,000 00.00%
31 ALBERT LEONG 50,000 00.00%
32 ANGELITO A. SIMBA JR. 50,000 00.00%
33 ARISTEDES H. ALINDOGAN 50,000 00.00%
34 ATTY. CELERINO T. GRECIA III 50,000 00.00%
35 VERONICA G. DE JESUS 49,000 00.00%
36 MACONDRAY HOLDINGS (ITF EMPLOYEES) 44,500 00.00%
37 ERNANDO C. FLORES II 41,000 00.00%
38 ROSANNO S. DE GUZMAN 35,000 00.00%
39 VICENTE P. AREJOLA 30,000 00.00%
40 LYNDON J. CUADRA 30,000 00.00%
41 EUSEBIO P. BAGUIO 30,000 00.00%
42 RENERO V. ORTEGA 28,000 00.00%
43 MARVYN B. TANINGCO 26,000 00.00%
44 FRANCISCO B. RAMIREZ 25,000 00.00%
45 ALFREDO A. PEDROSA 25,000 00.00%
46 MARIA ANNA BOGNOT DALBY 20,600 00.00%
47 MARIO A. CATACUTAN 20,000 00.00%
48 REX D. TEMPLONUEVO 20,000 00.00%
49 ALMA C. PACURIBAT 20,000 00.00%
50 ANTONIO B. YOUNG 20,000 00.00%
51 ANASTACIO CABADING, JR. 20,000 00.00%
52 CONSTANTE USON 20,000 00.00%

As of 06/30/2020

------------------------------------------------------------------------------------------------------------------------
53 BENJAMIN ESPIRITU 20,000 00.00%
54 CESAR R. PINON 20,000 00.00%
55 FEBY B. CABADING 20,000 00.00%
56 EDMUND Y.B. MABUTI 20,000 00.00%
57 GILBERT SAGCAL 20,000 00.00%
58 IVAN R. PAPERA 20,000 00.00%
59 CARLO MIKHAIL SANCHEZ CABAERO 18,000 00.00%
60 ALEJANDRO C. ESTRADA SR. 18,000 00.00%
61 MICHELLE EVELYN J. DYTIAN 16,500 00.00%
62 MYRA A. SISON 16,000 00.00%
63 LARS DALBY ITF: LARS DALBY, JR 16,000 00.00%
64 MARILENE B. LAYCO 15,333 00.00%
65 LAMBERTO F. YAP JR. 15,000 00.00%
66 LYN R. UDARBE 15,000 00.00%
67 JOSE AMIEL R. BACAL 15,000 00.00%
68 JUANITA U. LARA 15,000 00.00%
69 SUSANA D. PALO 15,000 00.00%
70 ROMEO A. LARA 15,000 00.00%
71 SALVADOR I. FACTOR 15,000 00.00%
72 ANTONIO M. OSTREA 15,000 00.00%
73 JAIME S. HULIGANGA 15,000 00.00%
74 MA. BELEN V. CARDONA 14,000 00.00%
75 FERNANDO F. PADERES 13,000 00.00%
76 YSRAEL PEDRASA MARCELINO 13,000 00.00%
77 LEO D. CAJULAO 12,000 00.00%
78 SALVADOR C. QUERIMIT 12,000 00.00%

As of 06/30/2020

------------------------------------------------------------------------------------------------------------------------
79 ROMEO B. MOLANO 12,000 00.00%
80 LIZARRO P. DIONG 11,000 00.00%
81 MELANIUS S. SUMADIC 11,000 00.00%
82 MARICEL M. GURO 10,000 00.00%
83 MARIO R. MANUEL 10,000 00.00%
84 MANSUETO B. SENDIONG 10,000 00.00%
85 LAURO RODERICK L. BIGLETE 10,000 00.00%
86 LEJENDRE PIEDAD 10,000 00.00%
87 MA. DOLORES DULAY 10,000 00.00%
88 JOVITO BERONDO JR. 10,000 00.00%
89 JOSE JEFFREY WAYNE 10,000 00.00%
90 RUEL M. SALERA 10,000 00.00%
91 VISMINDA S. GUILOT 10,000 00.00%
92 WINSTON SANTOS MENDOZA 10,000 00.00%
93 YOLANDA BATARA 10,000 00.00%
94 YOLANDA O. LOPEZ 10,000 00.00%
95 REYES CONCEPCION 10,000 00.00%
96 RODRIGO O. SEVERINO 10,000 00.00%
97 ROLANDO CONCEPCION 10,000 00.00%
98 ROLANDO LISING 10,000 00.00%
99 OSCAR EGAY 10,000 00.00%
100 RAMILIO DIOALAN 10,000 00.00%

As of 06/30/2020

------------------------------------------------------------------------------------------------------------------------
--------------- -------
Total Top 100 Shareholders : 3,692,460,862 99.96%
=============== =======
---------------
Total Issued Shares 3,693,772,279
===============

1 of 2
OUTSTANDING BALANCES FOR A SPECIFIC COMPANY

Company Code - PIP000000000
Business Date: June 30, 2020

BPNAME HOLDINGS
UPCC SECURITIES CORP. 200
A & A SECURITIES, INC. 59,000
ABACUS SECURITIES CORPORATION 1,059,200
PHILSTOCKS FINANCIAL INC 625,205
A. T. DE CASTRO SECURITIES CORP. 33,000
BA SECURITIES, INC. 30,000
AP SECURITIES INCORPORATED 89,300
ANSALDO, GODINEZ & CO., INC. 500
AB CAPITAL SECURITIES, INC. 677,700
SARANGANI SECURITIES, INC. 88,000
SB EQUITIES,INC. 110,800
ASIA PACIFIC CAPITAL EQUITIES & SECURITIES CORP. 10,000
ASIASEC EQUITIES, INC. 100,000
BELSON SECURITIES, INC. 10,000
BENJAMIN CO CA & CO., INC. 13,000
BPI SECURITIES CORPORATION 3,701,122
SINCERE SECURITIES CORPORATION 275,000
BDO NOMURA SECURITIES INC 741,821
IGC SECURITIES INC. 50,000
DBP-DAIWA CAPITAL MARKETS PHILPPINES, INC. 165,000
DAVID GO SECURITIES CORP. 44,000
DIVERSIFIED SECURITIES, INC. 52,000
E. CHUA CHIACO SECURITIES, INC. 168,000
EASTERN SECURITIES DEVELOPMENT CORPORATION 5,000
EQUITIWORLD SECURITIES, INC. 20,000
EVERGREEN STOCK BROKERAGE & SEC., INC. 1,344,000
F. YAP SECURITIES, INC. 69,000
AURORA SECURITIES, INC. 10,000
GUILD SECURITIES, INC. 2,000
HK SECURITIES, INC. 1,000
I. ACKERMAN & CO., INC. 30,000
I. B. GIMENEZ SECURITIES, INC. 1,300
INVESTORS SECURITIES, INC, 154,000
IMPERIAL,DE GUZMAN,ABALOS & CO.,INC. 10,000
LOPEZ, LOCSIN, LEDESMA & CO., INC. 1,000
LUCKY SECURITIES, INC. 200,700
LUYS SECURITIES COMPANY, INC. 40,000
MANDARIN SECURITIES CORPORATION 589,900
COL Financial Group, Inc. 3,924,693
DEUTSCHE REGIS PARTNERS, INC. 632
MOUNT PEAK SECURITIES, INC. 1,500
OPTIMUM SECURITIES CORPORATION 8,000
RCBC SECURITIES, INC. 507,400
PAN ASIA SECURITIES CORP. 149,000
PAPA SECURITIES CORPORATION 42,300
MAYBANK ATR KIM ENG SECURITIES, INC. 2,107,445
PNB SECURITIES, INC. 154,000
PREMIUM SECURITIES, INC. 180,000
SALISBURY BKT SECURITIES CORPORATION 1,300
R & L INVESTMENTS, INC. 40,000
R. COYIUTO SECURITIES, INC. 13,000
REGINA CAPITAL DEVELOPMENT CORPORATION 204,100
2 of 2
BPNAME HOLDINGS
AAA SOUTHEAST EQUITIES, INCORPORATED 10,000
RTG & COMPANY, INC. 67,000
SECURITIES SPECIALISTS, INC. 5,000
FIDELITY SECURITIES, INC. 95,000
TANSENGCO & CO., INC. 273,000
TOWER SECURITIES, INC. 22,200
APEX PHILIPPINES EQUITIES CORPORATION 9,000
UCPB SECURITIES, INC. 91,000
UOB KAY HIAN SECURITIES (PHILS.), INC. 650,000
FIRST METRO SECURITIES BROKERAGE CORP. 1,137,197,842
WEALTH SECURITIES, INC. 304,700
YU & COMPANY, INC. 35,000
BDO SECURITIES CORPORATION 136,300
SOLAR SECURITIES, INC. 46,000
G.D. TAN & COMPANY, INC. 228,000
UNICAPITAL SECURITIES INC. 431,000
KING'S POWER SECURITIES, INC. 1,000
TIMSON SECURITIES, INC. 10,000
CITIBANK N.A. 4,070,560
DEUTSCHE BANK MANILA-CLIENTS A/C 5,825,138
STANDARD CHARTERED BANK 703,300
THE HONGKONG AND SHANGHAI BANKING CORP. LTD. -CLIENTS' ACCT. 160,202,770
MBTC - TRUST BANKING GROUP 252,000
TOTAL 1,328,579,928
If no written notice of any error or correction is received by PDTC within five (5) calendar days from
receipt hereof, you shall be deemed to have accepted the accuracy and completeness of the details
indicated in this report.
Annex D (Notice sent by PCPPI to its stockholders
informing them of the Voluntary Delisting and the Tender Offer)
11 September 2020
TO HOLDERS OF COMMON SHARES OF PEPSI-COLA PRODUCTS PHILIPPINES,

INC.
LOTTE CHILSUNG BEVERAGE CO LTD. (the “Bidder”), one of the principal

stockholders of Pepsi-Cola Products Philippines, Inc. (“PCPPI”), hereby announces its
intention to conduct a tender offer to acquire, subject to satisfaction of certain conditions,
all of the outstanding Common Shares of PCPPI owned and held by stockholders other
than the Bidder, Lotte Corporation, and Quaker Global Investments B.V., or approximately
77,858,236 Common Shares of PCPPI (the “Tender Offer Shares”) equivalent to 2.11%
of the total issued and outstanding capital stock of PCPPI as of 31 August 2020.
The Tender Offer Price for the Tender Offer Shares shall be ONE PESO AND 95/100
(Php 1.95) per Common Share. A Tender Offer Report (in the form of SEC Form 19-1,
including its annexes, exhibits and schedules) will be filed by the Bidder with the
Securities and Exchange Commission and the Philippines Stock Exchange (“PSE”) on 15
September 2020, which contains, among others, the terms and conditions of the Tender
Offer. Copies of the Tender Offer Report and the relevant tender offer materials will be
sent by the Bidder to each common stockholder.
This Tender Offer follows the approval of the Board of Directors of PCPPI to voluntary
delist the Common Shares of the Company from the Main Board of the PSE in a special
meeting held last 9 September 2020.
Yours truly,


Annex E (Terms and Conditions of the Tender Offer)

th th
4 & 5 Fl., Lotte Castle Gold, 269 Olympic-ro, Songpa-gu,
Seoul, South Korea
TERMS AND CONDITIONS

Tender Offer for Public Shares in
Pepsi-Cola Products Philippines, Inc.
Lotte Chilsung Beverage Co. Ltd. (the “Bidder” or “Lotte Chilsung”) shall purchase common shares held
by shareholders other than Lotte Corporation and Quaker Global Investments B.V., in Pepsi-Cola Products
Philippines, Inc. in accordance with the Terms and Conditions set out below (the “Terms”). Unless
otherwise specifically defined herein or the context otherwise requires, capitalized terms used in these
Terms have the same meanings given to them in Form 19-1 filed by the Bidder with the Securities and
Exchange Commission (“SEC”) and the Philippines Stock Exchange, Inc. (“PSE”) on September 15, 2020.
The Bidder Lotte Chilsung Beverage Co. Ltd.
Tender Offer Shares The Bidder intends to acquire up to 77,858,236 common shares in Pepsi-
Cola Products Philippines, Inc. (“PCPPI”) held by shareholders other than
the Bidder, Lotte Corporation, and Quaker Global Investments B.V, (the
“Non-Public Shareholders”). Lotte Chilsung and the other Non-Public
Shareholders have agreed to delist the Company from the PSE.
On September 9, 2020, the Board of Directors of the Company approved

the voluntary delisting (the “Delisting”) of the Common Shares from the
Main Board of the Philippine Stock Exchange, Inc. (the “PSE”). In relation
to the Delisting and in compliance with the delisting rules and regulations
of the PSE (the “PSE Delisting Rules”), Lotte Chilsung will undertake the
tender offer for all of the outstanding common shares of PCPPI owned and
held by shareholders other than the Non-Public Shareholders (the “Tender
Offer”), consisting of approximately 77,858,236 Common Shares (the
“Tender Offer Shares”) equivalent to 2.11% of the total issued and
outstanding capital stock of PCPPI as of August 31, 2020.
Tender Offer Price The Bidder shall purchase all Tender Offer Shares duly tendered by the
tendering minority PCPPI shareholders (“Tendering Shareholders”), at a
price of Php1.95 per share (the “Tender Offer Price”), payable in cash,
before deduction for the customary selling charges amounting to 0.621%
of the total transaction value (excluding broker’s commission) and which
shall be levied on the Tendering Shareholder’s account and include:
• Stock transaction tax of 0.6% of the value of the transaction;

• Securities Clearing Corporation of the Philippines fee of 0.01% of the
value of the transaction;
• PSE transaction fee of 0.005% of the value of the transaction;
• SEC Fee of 0.005% of the value of the transaction; and
• Stock Investment Protection Fund fee of 0.001% of the value of the
transaction.
(collectively, the “Selling Charges”)
Other fees such as lodgment fee and EQ trade transfer fee (as applicable)
are also for the account of the Tendering Shareholder. The selling broker’s
commission, including value added tax, shall be payable by the Tendering
1
Shareholder subject to mutual agreement between the Tendering
Shareholder and the broker.
Entitlement Every PCCPI shareholder, as of any date during the Offer Period (as
defined below), is entitled to sell all its/his/her Tender Offer Shares to the
Bidder in accordance with, and subject to, these Terms of the Tender Offer.
Tender Offer Period The Tender Offer will commence at 9:00am on September 16, 2020 and
end at 5:00pm on October 13, 2020. The Bidder reserves the right to
extend the Tender Offer Period with the approval of the Securities and
Exchange Commission (“SEC”).
Closing Date (End of 5:00pm of October 13, 2020

Tender Offer Period)
Applications by Scrip Scrip shareholders (i.e. shareholders who hold stock certificates) of PCPPI
Shareholders who wish to sell their shares to the Bidder must complete the Application
to Tender Common Shares (the “Application”) in triplicate and submit the
same with the attachments set out below to First Metro Securities
Brokerage Corporation (the “TO Agent”) at the address set forth below.
The Application must be received by the TO Agent not later than the end
of the Tender Offer Period:

18F PSBank Center
Makati City
Head - Operations
(02) 8859-0672
Christine U. Chan
(02) 8859-0688
Josephine O. So
(02) 8859-0628

a. Original PCPPI stock certificates duly endorsed, subject to verification

by the TO Agent as valid and authentic certificates. For those whose
stock certificate/s is/are lost: (i) one (1) original of a duly notarized
affidavit of loss (in substantially the form of Annex E to the Application);
(ii) copy of the affidavit of loss as published in a newspaper of general
circulation; (iii) affidavit of publication (of affidavit of loss) executed by
the publisher; and (iv) bond issued in favor of PCPPI by a financial
institution or other company acceptable to the TO Agent, in the amount
of the Tender Offer Price of the shares covered by a lost stock
certificate.
2
b. For Individuals:
i. For Tendering Shareholders acting through an attorney-in-
fact, a duly notarized Irrevocable Power of Attorney (in
substantially the form attached as Annex B to the Application).
For married individuals who are Philippine citizens, their
respective spouses must sign the space provided in the
Irrevocable Power of Attorney to indicate marital consent to
the sale of the Tender Offer Shares.
ii. Photocopies of two (2) valid identification cards issued by a
government agency of the Republic of the Philippines,
showing the Tendering Shareholder’s signature and
photograph, i.e., driver’s license, tax identification card, Social
Security Services/Government Services and Insurance
System card, or passport.
iii. Duly accomplished Additional Personal Information Sheet
Tendering Shareholder and verified by the Tendering
Shareholder’s broker or by an officer of the bank at which the
Tendering Shareholder maintains an account (the signature
card must specify the name of the broker and the broker’s
signatory or the name of the bank and the bank’s signatory,
as the case may be).
iv. Duly accomplished Lodgment Form, Authority to Lodge Form
For Tendering Shareholders acting through an attorney-in-
fact, photocopy of an identification card of the registered
Tendering Shareholder shall form part of the notarized
irrevocable power of attorney.
For Tendering Shareholders domiciled abroad, the power of
attorney should be consularized. If the Tendering Shareholder
is unable to sign, the following should be presented:
i. Medical certificate explaining the condition of the
Tendering Shareholder, issued by a medical
practitioner and indicating the doctor’s license number;
and,
ii. Photocopy of the doctor’s hospital identification cards.
For heirs who wish to tender inherited shares covered by stock

certificate/s still in the name of the decedent:
i. Shares inherited by Judicial Settlement

(c) Certified true copy of the relevant court order;
(d) Original Bureau of Internal Revenue Certificate
Authorizing Registration; and
(e) Specimen signature card and photocopies of
cards
ii. Shares inherited by Extra-Judicial Settlement

3
(c) Original or certified true copy of extra-judicial
settlement stamped received or annotated by
the Registrar of Deeds;
(d) Affidavit of publication executed by the
publisher;
(e) Original Bureau of Internal Revenue Certificate
Authorizing Registration;
(f) Two (2) years heirs’ bond; and
(g) Specimen signature card and photocopies of
cards.
c. For Corporations:
i. Notarized Board Resolution (in substantially the form of the
Secretary’s Certificate attached as Annex C to the
specimen signatures of those signatures.
ii. Copy of SEC Certificate of Incorporation or equivalent
constitutive document, certified as a true copy of the original
by the Corporate Secretary or equivalent person having
official custody of company records.
iii. Copy of the latest Articles of Incorporation and By-laws of the
Tendering Shareholder or equivalent charter documents,
each certified as a true copy of the original by the Corporate
Secretary or equivalent person having official custody of
company records.
d. For Partnerships:
i. Copy of SEC Certificate of Registration or equivalent
constitutive document certified as a true copy of the original
by the Partnership Secretary or equivalent person having
official custody of the partnership records.
ii. Copy of the latest Articles of Partnership of the Tendering
Shareholder or equivalent charter document, certified as a
true copy of the original by the Partnership Secretary or
equivalent person having official custody of the partnership
records.
iii. Notarized Partnership Resolution (in substantially the form of
the Partners’ Certificate attached as Annex D to the
specimen signature of the signatories.
4
Application by Scripless Scripless shareholders (i.e., PCPPI shareholders whose shares are
Shareholders lodged with the Philippine Depository and Trust Corporation (“PDTC”) who
wish to accept the offer must complete the Application in triplicate and
submit the same with the attachments referred to in item (b), (c) or (d)
above (as applicable) to the TO Agent at the address set out above no later
than the end of the Tender Offer Period.
In addition, such Scripless Tendering Shareholders must instruct their

brokers to electronically transfer their Tender Offer Shares to the TO
Agent. The member broker(s) of the PSE who hold(s) the Tender Offer
Shares, should, upon receipt of the notice of the Tender Offer, immediately
notify the relevant Tendering Shareholder that should the Tendering
Shareholder wish to sell its/his/her shares in PCPPI to the Bidder, the
Tendering Shareholder must instruct the said participating broker to
electronically transfer its/his/her shares to the TO Agent, as custodian for
such shares, not later than 5:00pm on October 13, 2020.
When tendering shares, the participating brokers are required to submit

the letter to the TO Agent (in the form of Annex A to the Instructions to
Participating TO Agents, which is Exhibit F to the SEC Form 19-1 filed by
the Bidder with the SEC) not later than 5:00pm on October 13, 2020 as
well as the duly completed Application.
Conditions to Acceptance The Tender Offer Shares shall be deemed accepted by the Bidder if the
TO Agent has determined that the Tendering Shareholders had submitted
the required documents and obtained all the required approvals and
authorizations to enable it to transfer the Tender Offer Shares to the Bidder
before the expiration of the Tender Offer.
The obligation of the Bidder to purchase the Tender Offer Shares through
the tender offer will be subject to the condition (among other conditions that
the Bidder may prescribe) that, during the Bidder’s tender offer, the
Common Shares will have been:
(1) Validly tendered by the Bidder’s shareholders other

than the Non-Public Shareholders;
(2) Eligible for or otherwise capable of being purchased

by the Bidder; and
in each case, in accordance with the terms and conditions of the tender
offer as prescribed by the Bidder (the “Tender Offer Conditions”). In the
event the Tender Offer Conditions are not met, the Bidder may, upon notice
to the Securities and Exchange Commission (“SEC”) and the Philippine
Stock Exchange (“PSE”), withdraw the tender offer.
Acceptance of Application Acceptance of Application is subject to the terms hereof. The Bidder,
through the TO Agent, at its sole discretion, shall have the right to reject
5
any Application that does not qualify and accept qualified Applications at
any time before the Tender Offer Shares are sold to the Bidder through the
facilities of the PSE. Applications (i) received after the Tender Offer Period,
or (ii) that are not properly completed, or (iii) lack any of the requirements,
will be rejected.
The TO Agent will accept Applications on the condition that it is able to

verify the signature/endorsement on PCPPI stock certificates by verifying
the signature on file with PCPPI’s stock transfer agent, if such is available.
The TO Agent will rely on the signature affixed on the Application and on
the supporting identification documents or board resolution when it verifies
the endorsement of the relevant PCPPI stock certificates. The TO Agent
shall not be required to make further inquiries into the authenticity of the
signature. If the TO Agent is unable to verify the signature on the
Application or the endorsement of the PCPPI stock certificate, the TO
Agent will also reject the Application.
Tendering Shareholders whose Applications have been rejected, in

whole or in part, shall be notified of such by the TO Agent on or before
October 26, 2020.
All Applications shall be accepted only in the Philippines.
Rejected shares shall be returned in the same form they were received to
the Tendering Stockholder’s broker (for scripless shares) or to the
Tendering Stockholder (for certificated shares) no later than ten (10)
business days from the end of the Tender Offer Period. Any and all costs
and expenses incurred in connection with the return of the rejected shares
shall be borne by the Tendering Shareholder.
Cross Date The accepted Tender Offer Shares are intended to be crossed at the PSE
on or about October 26, 2020 (the “Cross Date”), subject to the approval
by the PSE of the crossing of the Tender Offer Shares. The Cross Date
shall be on or about 10 business days from the close of the Tender Offer
Period.
Any change in the Cross Date shall be announced by the Bidder in the
following newspapers of general circulation in the Philippines: The Manila
Times and Business Mirror.
Settlement The sale and purchase of the accepted Tender Offer Shares shall be
settled on the Cross Date (the “Settlement Date”), subject to any
extension of the Tender Offer Period with the approval of the SEC.
All accepted Applications shall be settled only in the Philippines.
The TO Agent will act as agent for the Tendering Shareholders for the
purpose of receiving the check payments from the Bidder and transmitting
the check payments to such Tendering Shareholders. The check
payments to be issued to Tendering Shareholders shall be made available
by the TO Agent for pick-up by the Tendering Shareholders starting on
Settlement Date at its offices.
When collecting payment, the Tendering Shareholders shall present the

“Applicant’s Copy” of the Application as well as proper government
identification (i.e., driver’s license, tax identification card, Social Security
Services/Government Services and Insurance System card, or passport).
Duly authorized representatives shall be required to present an
authorization letter from the Tendering Shareholders.
6
Tendering beneficial owners of Tender Offer Shares are advised to
consult with their custodian, fiduciaries, or other similar agents to the
manner by which they may collect payment from such agents.
In any event, no payment shall be made without the TO Agent having

timely received the duly accomplished Application, the stock certificates
evidencing the Tender Offer Shares and other documents required herein.
Any payment not collected within thirty (30) business days from the Cross
Date shall be dispatched via registered mail, to the address of the
Tendering Shareholder indicated in the Application, at the risk of the
Tendering Shareholders.
Withdrawal Tendering Shareholders shall have the right to withdraw any Tender Offer
Shares at any time during the Tender Offer Period but only until October
13, 2020 at 5:00pm, by submitting a written request for the withdrawal of
the Tender Offer Shares to the TO Agent with a copy of the “Applicant’s
Copy” of the Application issued by the TO Agent.
For withdrawal of tendered shares to be effective, a written notice of

withdrawal must be received by the TO Agent before 5:00pm on October
13, 2020 at the address set forth herein. The notice must specify the name
of the Tendering Shareholder and the number of Tender Offer Shares to
be withdrawn. If the stock certificates evidencing the Tender Offer Shares
have been delivered to the TO Agent, the serial numbers shown on such
certificates must be submitted to the TO Agent prior to the physical release
of such certificates. No request for withdrawal of fractions of Tender Offer
Shares will be considered. The TO Agent shall have the right in its sole
discretion, to determine the form and validity of the notice of withdrawal,
including the time receipt thereof.
All expenses incurred by the TO Agent in respect of withdrawal of Tender

Offer Shares shall be borne by the Tendering Shareholder making the
withdrawal.
Transfer Expenses All expenses in relation to the sale of the Tender Offer Shares attributable
to the Tendering Shareholders shall be borne by the Tendering
Shareholder.
The Selling Charges will be deducted by the Bidder from the Tender Offer
Price payable to the Tendering Shareholder.
SEC Form 19-1 and other The terms set out in the Tender Offer Report (SEC Form 19-1) filed with
Tender Offer Documents the SEC on September 15, 2020 shall form integral parts of these Terms
of the Tender Offer. Any Tendering Shareholder wishes to obtain a copy of
the said Tender Offer Report may do so at the office of the TO Agent.
Copies of the Tender Offer Report have also been filed with the SEC and
PSE and submitted to PCPPI.
Inquiries For inquiries regarding the Tender Offer, please contact the following:

18F PSBank Center
Makati City
Head - Operations
7
(02) 8859-0672
Christine U. Chan
(02) 8859-0688
Josephine O. So
(02) 8859-0628

For inquiries on the number of shares and stock certificates, please contact
PCPPI’s Stock and Transfer Agent.:

Address: 6784, Unit D 34/F Rufino Pacific Tower, Ayala Avenue,
Makati
Tel. No.: 8403-2410/8403-2412
Fax No.: 8403-2412
8
Annex F (The Fairness Opinion Report
rendered by Unicapital, Inc.)
1
FAIRNESS OPINION AND VALUATION REPORT
4 September 2020
4 September 2020 R-L3039
The Board of Directors of:

LOTTE CHILSUNG BEVERAGE CO., LTD.
4F, LOTTE Castle Gold Bldg., 269, Olympic-ro,
Songpa-gu, Seoul, Korea
Gentlemen:
Pursuant to our engagement, we are pleased to present to the Board of Directors of LOTTE Chilsung Beverage Co., Ltd. (“LOTTE Chilsung”)
the Final Valuation Report on the common shares of Pepsi-Cola Products Philippines, Inc. in accordance with the valuation methodologies
agreed upon.
The Transaction public ownership level down to 2.11%, and there remain
Pepsi-Cola Products Philippines, Inc. (“PIP” or the “Company”), is a 1,001,431,407 outstanding shares post-tender.
publicly listed company on the Philippine Stock Exchange (“PSE”),
primarily engaged in the manufacturing, sale and distribution of We understand that LOTTE Chilsung seeks to arrive at a fair and
carbonated soft drinks and non-carbonated beverages, and equitable valuation of PIP’s common shares in connection with the
confectionery products to retail, wholesale, restaurants and bar tender offer for the remaining 77,988,345 common shares of PIP
trades. held by the public equivalent to a 2.11% equity stake in PIP (the
“Transaction”).
PIP's major shareholder is LOTTE Corporation (“LC”), which has a
42.22% beneficial ownership in PIP. In March 2020, the Philippine Our Engagement
Competition Commission approved the proposed acquisition of LC's On 5 August 2020, Unicapital, Inc. (the “Financial Advisor” or “FA”
subsidiary, LOTTE Chilsung Beverage Co., Ltd. (“LOTTE or “UI”) was engaged by LOTTE Chilsung to arrive at an
Chilsung”), of up to 2,134,381,838 common shares of PIP. LOTTE independent third-party valuation and issue a fairness opinion on the
Chilsung completed its tender offer in June 2020, under which it was fair market value of PIP’s outstanding common shares subject of the
able to acquire 30.67% of the total outstanding and issued shares of Transaction.
PIP or 1,132,950,431 common shares, bringing the Company's

Prior to this engagement, UI has not acted as a financial advisor in CPC EV/EBITDA – CY 26,660.86 31,761.24 7.22 8.60
relation to the Transaction, to PIP and any affiliates, or any of the ‘19
parties involved in the Transaction. CPC P/S – LTM ‘20 23,434.37 26,880.61 6.34 7.28
CPC P/E – LTM ‘20 4,244.94 4,869.20 1.15 1.32
For this engagement, we will receive a financial advisory fee, which CPC P/BV – LTM ‘20 8,750.23 10,037.03 2.37 2.72
is not dependent on the success of the Transaction, but upon CPC EV/EBITDA – 22,193.76 26,514.34 6.01 7.18
LTM ‘20
delivery of the Fairness Opinion and Valuation Report.
Overall Average 12,971.98 14,711.95 3.51 3.98
Fair Value 5,665.60 6,159.93 1.53 1.67
Based on the terms of reference of the engagement, UI immediately
*CY ‘19 – Calendar year ending 31 Dec. 2019
conducted a review of PIP’s financial statements as made public by
*LTM ’20 – LTM ending 31 Mar. 2020
the Company, and other publicly accessible information on PIP that Values in PhP Millions, except per share data
were considered to be relevant for the analysis. Subsequently, a
structured approach was applied using the following valuation Primary Valuation Methodologies Applied:
methodologies, when applicable, namely: In arriving at the fair value of the shares of PIP, the Financial Advisor
• Volume Weighted Average Price Approach, which examines the applied the following valuation methodologies:
trading history of PIP shares on the PSE in order to assess the • 6-month Volume Weighted Average Price
market’s perception of PIP’s value;
• 2019 Calendar-year Price-to-Earnings
• Asset-Based Approach, which entails the adjustment of the
• 2020 Last Twelve Months Price-to-Earnings
Company’s financial statements, taking into account the latest
property valuations as conducted by an independent appraisal
Complementary Valuation Methodologies as Presented:
company as necessary; and,
Accompanying the Primary Valuation Methodologies, the Financial
• Comparable Public Company Approach, which attempts to Advisor examined the following complementary methods, without
benchmark the value of PIP’s shares compared to its impact to the resulting fair valuation:
counterparts, using applicable metrics, i.e. price-earnings,
price-to-book value, and the like.
• Net Asset Value
Valuation Summary
• 2019 Calendar-year Price-to-Sales
Valuation Market Capitalization Share Price
Methodology Min Max Min Max • 2019 Calendar-year Price-to-Book Value
6-month VWAP 6,912.35 6,912.35 1.87 1.87 • 2019 Calendar-year EV/EBITDA
1-year VWAP 6,712.91 6,712.91 1.82 1.82 • 2020 Last Twelve Month Price-to-Sales
2-year VWAP 6,248.81 6,248.81 1.69 1.69 • 2020 Last Twelve Month Price-to-Book Value
Net Asset Value 9,142.51 9,161.07 2.48 2.48 • 2020 Last Twelve Month EV/EBITDA
CPC P/S – CY ‘19 24,562.16 28,174.24 6.65 7.63
CPC P/E – CY ‘19 5,839.50 6,698.26 1.58 1.81
CPC P/BV – CY ‘19 10,961.34 12,573.31 2.97 3.40
Our Opinion considered fairly valued within the range of PhP5,665.60 Million
In arriving at the fair value of the shares of PIP, the Financial Advisor to PhP6,159.93 Million or equivalent to PhP1.53 per share to
carefully examined the relevance of each valuation methodology PhP1.67 per share based on 3,693,772,279 shares outstanding as
used and the results of the different valuation methodologies of 30 June 2020.
performed.
Therefore, the Financial Advisor is of the opinion that the
The Financial Advisor determined that the NAV is not a suitable Tender Offer Price of PhP1.95 per share subject of the
metric for PIP due to the fact that no revaluation of assets has been Transaction is fair from a financial point of view as of 4
applied; the Company will continue to be a going concern; and, September 2020.
because it does not take into account the actual earnings and cash
flow generated by PIP from the assets. We further noted that PIP Scope and Limitations
has historically traded at below book value. Similarly, the Price-to- We have not audited or otherwise reviewed the accuracy of the
Sales, Price-to-Book and EV/EBITDA approaches were also audited financial statements which have been taken from publicly
disregarded for purposes of the valuation exercise as these are available sources. It was assumed that these financial statements
better suited for start-ups, banks and real estate companies, and are true and accurate and are reflective of PIP’s financial condition
M&A transactions, respectively. during the date of the financial statements. We have further relied
on the market value of PIP’s property, plant, and equipment as
While the Financial Advisor received financial projections, the disclosed in PIP’s audited financial statements.
figures were deemed to not be substantially sufficient for the
Financial Advisor to be able to satisfactorily verify the basis for such The preparation of the Fairness Opinion and Valuation Report by UI
projections and is unable to satisfactorily perform DCF and DDM is limited to the purpose of the Transaction.
valuation approaches.
Some of the information contained in this report may have been
The resulting valuations from the 1-year and 2-year VWAP were not taken from third-party sources or publicly available information. We
reasonable valuation metrics for PIP since historical developments have not independently verified whether such facts or information
from before 2020 are no longer reflective of recent market are true and correct.
developments’ impact on the trading price of the Company.
No representation or warranty, expressed or implied, is made by UI,
After careful examination, the 6-month VWAP approach, the CPC or its respective affiliates subsidiaries, principals, directors,
P/E – CY ’19 and CPC P/E – LTM ’20 was used to determine the shareholders, officers, employees, agents, advisors, or
fair value of PIP’s common shares subject of the Transaction. representatives, as to the accuracy or completeness of any
information, whether written or oral, contained in this Fairness
Based on the analysis undertaken and on the valuation Opinion and Valuation Report. UI expressly disclaims any and all
considerations described in the attached Valuation Report, the liability which may be based on such information, errors therein or
Financial Advisor is of the opinion that the shares of PIP may be omissions therefrom.

Nothing contained within this Fairness Opinion and/or Valuation • Final Tender Offer Report dated 18 June 2020; and
Report, is or should be relied upon as, a promise of representation • Certain publicly available financial and stock market information
as to the future performance of the Company. The (FactSet Research Systems, Inc., PSE Edge) regarding
recommendations and valuations contained therein were prepared selected listed companies in a similar line of business we
by the Financial Advisor based on information available at the time believe are comparable to that of Pepsi-Cola Products
the Valuation Report was prepared, and there are no Philippines, Inc.
representations, warranties, or other assurances that any of the
conditions set forth herein will be realized. For the purposes of our analysis, we have assumed that all financial
and other information received from all sources listed above were
We have no obligation to update this report or our recommended accurate and complete and have relied on this information without
valuation for information that comes to our attention after the date of accepting any responsibility for independent verification.
this report. This Valuation Report is based on the prevailing market,
corporate and economic conditions at the time of writing. Very truly yours,
We have also assumed that all governmental, regulatory and other
consents and approvals necessary for the consummation of the UNICAPITAL, INCORPORATED
Transaction and any of PIP’s business dealings will be obtained
without any material adverse effect on PIP.
This Fairness Opinion and Valuation Report does not constitute a Jaime J. Martirez
selling document, a recommendation to purchase or sell the shares President
of any of the companies mentioned herein, and makes no reference
to the likelihood or relative benefits of any alternative transaction.
Information Sources Pamela Louise Q. Victoriano

The following sources of information were used in the preparation of First Vice President
this report:
• Annual Reports for the periods ended Dec 31, 2019, 2018 and
2017
• Quarterly Reports for the periods ended March 31, 2020 and
2019
• Audited Consolidated Financial Statements as published on
PSE Edge;
• Interim Unaudited Financial Statements, as of the relevant date
of the report as published on PSE Edge;
About Unicapital, Inc. Pepsi-Cola Products Philippines, Inc. 4 September 2020
ABOUT UNICAPITAL
UI is a full-service investment house that is duly licensed by the SEC to provide the widest array of finance and investment-
banking product lines. Incorporated in 1994, the firm has successfully established itself as an active player in the trading of fixed
income and equity securities, the underwriting and distribution of commercial papers, bonds, preferred shares and equity issues
for listing in the Philippine Stock Exchange (“PSE”), and the provision of financial advice to its corporate clients.
On 28 June, 2018, the PSE issued memorandum CN-No. 2018-0036 (see Annex V) confirming the re-accreditation of UI as an
accredited firm for issuing Fairness Opinions and Valuation Reports for a period of five years.
The Fairness Opinion and Valuation Report was not approved by a committee created within UI but instead was subject to an
internal process of review and preparation. The Fairness Opinion for PIP was initially prepared by two analysts assigned to the
transaction. It was then reviewed by the Corporate Finance Department Head and approved by the President of the firm before
it was issued out to the Board of Directors of the Company.
Mr. Jaime J. Martirez, President and CEO. He is concurrently the President and Chief Executive Officer of Unicapital Finance
and Investments, Inc., Vice President and Director of MAJALCO, Inc., XCT Corporation, and Des Eaux Utilities Co., Inc.; Vice
President of MJ Realty; Treasurer of GJ Holdings; and President of Unoventure Inc. He also sits as Director of Unicapital
Securities, Inc., Malayan Savings and Mortgage Bank, Basic Energy Corp., Acme Pawnshops, Inc., and in several private and
publicly listed corporations that are engaged in the fields of energy, real estate, water distribution, and information technology.
He holds a degree in Business Administration from De La Salle University and took post-graduate courses from the Ateneo de
Manila Graduate School of Business. Mr. Martirez is a member of the Makati Business Club, Charter member of the Rotary
Club of Makati Ayala and a past member of the Manila Jaycees.
Ms. Pamela Louise Q. Victoriano, First Vice President, is the Corporate Finance Department Head of UI. She graduated from
the Ateneo de Manila University with a Bachelor of Science Degree in Management and has experience in a broad range of
private & public equity transactions, financial advisory, and mergers & acquisition.
While Mr. Martirez and Ms. Victoriano have extensive experience in business and finance, the Code of Ethics for professional
accountants is not applicable to their professions.

Table of Contents Pepsi-Cola Products Philippines, Inc. 4 September 2020
TABLE OF CONTENTS
ABOUT UNICAPITAL ........................................................................................................................................................................................................................... 6

1 | ABOUT PEPSI-COLA PRODUCTS PHILIPPINES, INC. .......................................................................................................................................................... 9
2 | INDUSTRY OVERVIEW ............................................................................................................................................................................................................... 14
3 | FINANCIAL AND OPERATING HIGHLIGHTS.......................................................................................................................................................................... 19
4 | VALUATION ................................................................................................................................................................................................................................... 34
ANNEX I | SUMMARY OF AUDITED CONSOLIDATED FINANCIAL STATEMENTS ............................................................................................................ 47
ANNEX II | HISTORICAL STOCK PRICE (PSE: PIP)................................................................................................................................................................... 54
ANNEX III | PEER GROUP SELECTION........................................................................................................................................................................................ 60
ANNEX IV | FINANCIAL PROJECTIONS ....................................................................................................................................................................................... 62
ANNEX V | FREE CASH FLOW TO EQUITY ................................................................................................................................................................................ 63
ANNEX VI | MANDATE LETTER...................................................................................................................................................................................................... 64
ANNEX VII | PSE ACCREDITATION............................................................................................................................................................................................... 67



COMPANY OVERVIEW
Pepsi-Cola Products Philippines, Inc. was registered with the Philippine Securities and Exchange Commission (“SEC”) on 8 March, 1989, after
the acquisition of Pepsi-Cola Distributors of the Philippines, Inc. of the franchising and bottling rights of PepsiCo International, Inc. in 1985. It is
primarily engaged in manufacturing, sales and distribution of carbonated soft-drinks and non-carbonated beverages, and confectionery products
to retail, wholesale, restaurants and bar trades. On 27 August, 2014, the SEC approved the Company’s amendment of its Articles of
Incorporation, adding to its primary purpose the engagement in the manufacturing, sale and distribution of snacks, food and food products. The
Company is listed on the Philippine Stock Exchange (“PSE”) and has been included in the PSE composite index since 1 February, 2008. As of
30 June 2020, the Company’s authorized capital stock is at PhP750,000,000.00, divided into 5,000,000,000 common shares, of which
3,693,772,279 shares are issued and outstanding.
On 11 December 2019, the Company received a Tender Offer from LOTTE Chilsung addressed to all shareholders except LOTTE Corporation
and the Company’s Board of Directors, offering to acquire up to 2,134,381,838 qualifying common shares of the Company, as a strategic
initiative to acquire a significant economic interest in the Company. As of 31 December, 2019, LOTTE Corporation (“LOTTE Corp.”) and Quaker
Global Investments B.V. (“Quaker”) are the major shareholders of PIP with a 38.88% and 25.00% stake of the Company, respectively. LOTTE
Corp. is the holding company of LOTTE Chilsung Beverage Co. Ltd, which is one of the biggest beverage companies in South Korea. LOTTE
Corp’s Chief Executive Officer directly owns several shares of the Company, which further increases the total beneficial ownership of LOTTE
Corp. in the Company to 42.22%. Quaker was organized under the laws of the Netherlands and is a wholly owned subsidiary of PepsiCo, Inc.
which is an American multinational food, snack and beverage corporation.
On 5 February 2020, the Company disclosed to the PSE that it has been notified by LOTTE Chilsung regarding the cessation of its tender offer,
following the order of the SEC pending resolution of certain matters.
In a decision issued by Philippine Competition Commission on 26 March 2020, it approved the proposed acquisition by LOTTE Chilsung of
PIP’s common shares, stating that it “will not likely result in substantial lessening of competition” and that “there remains sufficient competitive
constraints in the market for the supply of carbonated soft drinks, non-carbonated beverage and bottled water in the country”.
In the Company’s disclosure to the PSE on 23 April 2020, the Company announced the SEC’s approval on LOTTE Chilsung’s request to re-
open and resume its mandatory tender offer in the second-half of May 2020. And on 17 June 2020, the tender offer of LOTTE Chilsung has
been completed after accepting 1.13 billion common shares at PhP1.95 per share, which effectively increased its ownership to the Company
by 30.67%. In turn, this brought down the Company’s public ownership down to 2.11% which immediately prompted the PSE to suspend trading
of PIP on the Exchange for breaching its 10.00% minimum public ownership requirement.

BUSINESS OPERATIONS
Pepsi-Cola Products Philippines, Inc. is the licensed bottler of PepsiCo (“PepsiCo”) up to year 2029, Pepsi Lipton International Limited (“Pepsi
Lipton”) as renewed up to year 2029, as well as being a licensed snacks appointee of The Concentrate Manufacturing Company of Ireland in
the Philippines. It operates two (2) major categories, namely: Carbonated Soft Drinks (“CSD”) and Non-Carbonated Beverages (“NCB”). The
Company had a third production category, the Snacks category, but was discontinued in September 2019 after operating for a little over four
(4) years, citing that the Company’s focus will be towards strengthening its CSD and NCB categories.
As of 31 December 2019, the CSD category generates 74.50% of revenue and includes household-name brands PepsiCo, 7-Up, Mountain
Dew, Mug, and Mirinda. Meanwhile, the NCB category, that generates the remaining 25.50% of revenue houses the brands Gatorade, Lipton,
Tropicana, Sting, Milkis, Tropicana - Twister, Coco Quence, Let’s Be coffee, and also includes drinking water brands Premier and Aquafina.
The major brands of the Company’s Snacks category, prior to being discontinued, were Cheetos and Lays. The Company has a broad customer
base across the Philippines; majority of which include supermarkets, convenience stores, groceries bars, sari-sari stores and carinderias.
Carbonated Soft Drinks Non-Carbonated Beverages Snacks (Discontinued)
PIP also has investments in associates Nadeco Realty Corporation (NRC) and Nadeco Holdings Corporation (NHC), from which the Company
leases land for its bottling plants and warehouses. PIP has a 40% equity stake in each of these associates.
The Company produces its products under licenses from PepsiCo, Pepsi Lipton and LOTTE Corporation and depends upon them to provide
concentrates and access to new products, but does not own any intellectual property that is material to the business. Under various agreements,
the Company is authorized to use brands and the associated trademarks owned by PepsiCo, Unilever N.V (in the case of the Lipton brand and
trademarks) and LOTTE Corporation. Trademark licenses are registered with the Philippine Intellectual Property Office.
As of 31 December, 2019, the Company had employed approximately 3,304 regular employees, where all of the regular and permanent
employees at its bottling plants and sales offices are represented by a union. Employees are primarily working at the thirteen (13) manufacturing
plants of the Company across the Philippines. As a foreign-owned entity, the Company is not permitted to own land in the Philippines, hence,
it leases land on which its owned bottling plants, warehouses, and sales offices are located, namely in: Muntinlupa City, Sto. Tomas, Rosario,
Pampanga, Naga, Cebu, Iloilo, Bacolod, Tanauan, Davao, Cagayan de Oro, and Zamboanga. The discontinued Snacks category was housed
in its facilities in Cabuyao. All properties are reported to be in good condition.
SHAREHOLDER AND SENIOR MANAGEMENT

The stockholders of PIP as of 30 June, 2020 are as follows:
Name Shares Ownership

LOTTE Corporation 1,436,315,932 38.88%
LOTTE Chilsung Beverage Co. Ltd. 1,132,950,431 30.67%
Quaker Global Investments B.V. 923,443,071 25.00%
Pcd Nominee Corp (Non-Filipino) 173,813,270 4.71%
Pcd Nominee Corp. (Filipino) 21,816,227 0.59%
Joseph Martin H. Borromeo 450,000 0.01%
Lucio W. Yan 300,000 0.01%
Rene B. Blancaver 255,000 0.01%
Winefreda O. Madarang 250,000 0.01%
Valeriano A. Lugti 150,000 0.00%
Felix S. Yu 149,998 0.00%
Ma. Celeste S. Narciso 100,000 0.00%
Jose I. Umali 100,000 0.00%
Juanito R. Ignacio 100,000 0.00%
Rosauro P. Dino 70,000 0.00%
Roberto E. Tongcua 70,000 0.00%
Roberto H. Goce 60,000 0.00%
Cecilia R. Duguran 60,000 0.00%
Felicito C. Sebastian 57,000 0.00%
Manuel J. Catungal 53,000 0.00%
Public Ownership 3,208,350 0.09%
TOTAL 3,693,772,279 100.00%
The Board of Directors of PIP as of 20 July, 2020 are as follows:

Oscar S. Reyes 74 Filipino Chairman of the Board and Independent Director
Frederik D. Ong 54 Filipino Director
Yongsang You 51 Korean Director
Younggoo Lee 57 Korean Director
Parinya Kitjatanapan 55 Thai Director
Tae Hyeon Kim 54 Korean Director
Jay Buckley 42 Australian Director
Samir Moussa 49 Grenadian Director
Rafael M. Alunan III 72 Filipino Independent Director
The Executive Officers of PIP as of 20 July, 2020 are as follows:
Name Citizenship Position

Frederik D. Ong Filipino President and Chief Executive Officer
Yongsang You Korean Managing Director
Jin Man Kim Korean Executive Vice President, Strategic Supply Chain & Operations
Vishal Malik Indian SVP and Chief Financial Officer/Chief Audit Executive
Domingo F. Almazan Filipino SVP, National Sales
Ma. Vivian A. Cheong Filipino SVP, Human Resources
Young Duk Kang Korean SVP and Chief Strategy Officer/Compliance Officer/Data Protection Officer
Kristine Ninotschka L. Evangelisa Filipino Corporate Secretary
Julia Patricia C. Herrera-Lim Filipino Assistant Corporate Secretary


FOOD & BEVERAGE SECTOR GLOBAL OUTLOOK Projected Consumer Expenditure CAGR F&B Growth from
The global GDP totalled U.S.$83.3 trillion in 2018 and it is expected 2018-2030 (In %)
to reach up to U.S.$99.0 trillion in 2023, and up to U.S.124.7 trillion
in 2030 according to Gulfood (an in-depth market research study Philippines
commissioned by the Dubai World Trade Centre to the agencies
Indonesia
Euromonitor International and GRS Research and Strategy as of
2019). The Asia Pacific region is forecasted to achieve a rapid Pakistan
increase in its GDP as its main drivers will be led by the strong
Mexico
manufacturing and export-led economies as well as the growth of
private consumption coming from its respective countries. It has Brazil
been mentioned that the food and beverage (F&B) industry is
South Korea
expected to grow significantly, primarily due to an increase in the
busy lifestyle of individuals, along with a growing disposal income France
which will further strengthen demand for food and beverage items.
Spain
A projected compound annual growth rate (CAGR) for consumer Italy

expenditure on F&B growth starting from 2018 up until the year 2030
Japan
has been made by Gulfood and based on the forecast, the consumer
0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0%
spending on food and beverages were significantly higher in
emerging and developing countries compared to developed Table 2.1 Source: Gulfood
countries. It was forecasted that Bangladesh and Philippines would
have a projected CAGR for consumer expenditure on F&B of 7.1% sectors which they believe will help their respective country’s
and 6.4%, respectively. Additionally, India, Indonesia, and China are economy stay afloat. However, establishments providing basic
forecasted to have CAGRs of 6.4%, 4.7%, and 4.7%, respectively necessities or essential services will continue to operate during the
(Table 2.1). pandemic. There was no publicly available information regarding the
future projections of the industry incorporating the COVID-19 impact
Since the cases of the COVID-19 has spread globally in the early as of the date of this report. Although, this will still greatly affect the
portion of the year 2020, the industry has felt its impact and several industry as 1) they would have to comply first with safety guidelines
countries in the Asian region are taking action to prevent the regulated by their respective countries in order to stay operational,
increase of cases in their respective countries. According to Food 2) their customers will be limited due to social distancing and the
Industry Asia (2020), majority of the measures being done by Asian reduction of their operational hours to comply with imposed curfews
countries are the imposition of lockdowns and temporary closure of in several countries such as the Philippines and Thailand, and 3)
operations in non-essential businesses, with exceptions to several permanently changing the purchasing behaviour of consumers.

OUTLOOK ON THE PHILIPPINE ECONOMY Household final consumption expenditure (HFCE) is the primary
In 2019, the economic growth in the Philippines slowed down to its driver for the increase in GDP as this represents nearly 72.5% of the
lowest growth level in eight years according to Worldbank (2019). country’s GDP in the year 2018, which increased further to 73.2%
The deceleration was mainly driven by a slowdown in public by the year 2019. HCFE consists of miscellaneous goods and
investment due to the delay of the 2019 national government budget services, restaurants and hotels, education, recreation and culture,
along with the spending ban on new projects before the 2018 May communication, transport, health, furnishings, household equipment
elections. This results to the country’s year-on-year (y-o-y) Gross and routine household maintenance, housing, water, electricity, gas,
Domestic Product (GDP) growth for the 1Q2019 of 7.8% compared and other fuels, clothing and footwear, alcoholic beverages,
to its GDP growth for the 1Q2018 of 9.5% as per Philippines tobacco, food, and non-alcoholic beverages. The reason for its
Statistics Authority (PSA). Despite the slowdown in growth, the increase in 2019 was due to the decline of inflation as well as several
country’s full-year GDP in 2019 reported an increase 6.9%, due to factors such as growth in remittances from overseas Filipinos,
growth in household final consumption expenditure, construction, continued expansion of credit, and improvement in the job market.
and breeding stocks and orchard development (Table 2.2). Its improvement is expected to continue throughout the year 2020
(Table 2.3).
Gross Domestic Product Household Final Consumption Expenditure

In %
In PhP millions
6,000,000 12.0% 2018 2019
5,000,000 10.0%
27.5%
4,000,000 8.0%
3,000,000 6.0%
2,000,000 4.0%
1,000,000 2.0% 72.5%

73.2%
- 0.0%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Household final consumption Household final consumption
2018 2019 expenditure expenditure
Real GDP Quarter to Quarter Growth Others Others
Table 2.2 Source: Philippine Statistics Authority (PSA) Table 2.3 Source: Philippine Statistics Authority (PSA)

However, on December 2019, there was a new breed of a disease LOCAL MARKET ANALYSIS
being observed which takes form of an individual appearing to have The F&B sector is among the largest contributors within the
pneumonia like symptoms. This was later classified as a coronavirus manufacturing industry, which is also the top contributor to the
disease 2019 (COVID-19). On 11 March, 2020, the World Health economic growth of the country. The F&B sector accounts for 9.7%
Organization (WHO) assessed the COVID-19 and characterized it of the country’s GDP in 2018 as per PSA. According to EMIS (2019),
as a pandemic. The effect of this virus has caused many countries the introduction of the excise tax on sugar-sweetened beverages
to enforce total lockdown and shutting down operations of several (SSB) will slightly hinder the growth of drinks that have a sugary
companies and business to prevent the virus from spreading. consumption but will promote non-alcoholic beverages that may
Hence, severely affecting people’s lives as well as the global have alternative sweeteners or content with minimal to low sugar
economy. consumption. Despite the imposed tax, the reduced inflation in 2019
will boost consumer spending and increase private consumption.
Based on a press release by the PSA, the Philippine’s GDP declined The Philippine’s food and non-alcoholic beverage sales is expected
in the 1Q2020 by 2.0%, the first contraction since the 4Q1998. This to grow at a CAGR of 7% in the period 2019-2023, generating a
is due to a significant decline in manufacturing, transportation and projected amount of PhP6,816.0 billion for food and PhP625.0 billion
storage and accommodation and food service activities. The for non-alcoholic beverages totaling to an amount of PhP7,441.0
agriculture, forestry and fishing; and Industry sectors contracted by trillion by 2023, as per Fitch Solutions (Table 2.4).
0.4% and 3.0%, respectively. Despite the contraction in GDP, it was
noted that the HFCE and the Government Final Consumption Sales of Food and Non-Alcoholic Beverages Projection
Expenditure (GFCE) recorded a positive growth of 0.2% and 7.1%, In PhP Bns
respectively. 8,000
7,000
After the imposition of quarantine measures that put a halt on 75% 6,000
of economic activity, the country has fallen into a technical 5,000
recession, recording a 16.5% contraction in GDP in 2Q2020, year- 4,000
on-year. This is the worst economic contraction across regional 3,000
peers, as neighbouring countries like Indonesia, Hong Kong, and
2,000
Singapore report contractions of 5.3%, 9%, and 12.6%, respectively.
1,000
-
Economic experts expect the Philippine economy to decline by 5.5% 2019 2020 2021 2022 2023
for the entire year of 2020, as COVID-19 cases in the country (Forecast) (Forecast) (Forecast) (Forecast) (Forecast)
continue rise, and with the imposition of a second lockdown in
Food Non-Alcoholic Beverages
August.
Table 2.4 Source: EMIS Insights

Since the COVID-19 pandemic has affected the economy both on a As per the Company’s 2019 annual report, the CSD and NCB
local and global scale, there was a significant decline in the country’s markets in the Philippines are highly competitive. Sales and
GDP for 1Q2020 due to a decline in several industries which profitability are affected by the overall performance of the Philippine
includes the manufacturing industry. Despite the decrease, HFCE economy, the natural seasonality of sales, the competitive
still recorded an increase by 0.2% during the same period. environment of the beverage market in the Philippines, as well as
According to PSA, as of 1Q2020, majority of consumer spending changes in cost structures, among other factors. The Company’s
was used for food and non-alcoholic beverages as it represents major competitors in the CSD category are The Coca-Cola
33.7% of total consumer spending. (Table 2.5). Company and Asiawide Refreshments Corporation. While its major
competitors in the NCB are Del Monte Pacific Limited, Universal
Total share of Essential & Non-essential items of HCFE Robina Corporation, Zesto Corporation, The Coca-Cola Company,
1Q 2020 and Asia Brewery Incorporated.
In %
According to Euromonitor International (2019), The Coca-Cola

Company leads in terms of retail volume as it represents nearly
59.2% of the overall retail volume for the CSD category in the
33.70%
46.60% Philippines with the Company running in second as it represents
28.0% of retail volume. While for its NCB, Zesto Corporation and Del
Monte Philippines are the leading companies in terms of retail
volume as it represents 29.4% and 28.4%, respectively, of the
overall retail volume for the NCB category. The Company has the
third largest retail volume for the NCB category as it represents 7.5%
19.70% of the overall retail volume. The companies generating the most
retail volume for each respective category is due to their intensified
Food & Non-Alcoholic Beverages Essential Items Non-Essential Items efforts with their marketing campaigns. The Company, however,
believes that it can effectively compete by maximizing its marketing
Table 2.5 Source: Philippines Statistics Authority (PSA)
efforts as well as its efforts to expand its beverage offerings with
According to Fitch Solutions (2020), Non-alcoholic beverages is their wide manufacturing platform giving the Company advantage to
considered as an essential item, thus they project that the spending achieve extensive distribution to meet consumer demands.
on non-alcoholic drinks will grow by 11.1% for 2020 with an average
growth of 7.7% a year over the medium term. Based on the Fitch
report published as of August 7, 2020, the country’s soft drink’s
industry is and will remain as one of the most dynamic food and
beverage sub-sectors as the level of investment being done remains
vast. With this being said, the consumer spending on non-alcoholic
drinks will be shielded from the negative impact of the COVID-19.


audited by R.G. Manabat & Co.in accordance with the Philippine Standards on Auditing (“PSAs”) and were obtained from the public disclosures
of PIP to the PSE. Unicapital, Inc. did not verify the accuracy or the completeness of the information contained in the Financial Statements.
Please see Annex I for the condensed consolidated audited financial statements.
Profit or Loss and Other Comprehensive Income

Gross Sales 40,080,245 38,175,672 35,526,599
NET SALES 35,183,763 33,394,239 30,037,602
Cost of Goods Sold 28,370,170 27,685,013 22,784,614
Gross Profit 6,813,593 5,709,226 7,252,988
Operating Expenses 5,787,722 5,742,342 6,226,092
Finance And Other Income (Expenses) (308,169) (118,884) (88,570)
Profit (Loss) Before Tax 717,702 (152,000) 938,326
Income Tax Expense (Benefit) 208,238 (29,837) 277,776
Profit (Loss) From Continuing Operations 509,464 (122,163) 660,550
Loss From Discontinued Operations Net Of Tax (210,738) (77,377) (119,225)
GROSS SALES
PIP’s gross sales is generated from the external sales of the operating categories and with its discontinued manufacturing
Company’s Carbonated Soft Drink (CSD), Non-Carbonated category.
Beverage (NCB), and Snacks categories. Since the Snacks
category of the Company discontinued its operations in 2019, the On average, the Company generated 74.50% of its Gross Sales
gross sales figure booked in its financial statement only takes into from its Carbonated Soft Drinks category, 25.50% of its Gross Sales
account the sales generated from the Company’s products of CSD from its Non-Carbonated Beverage category. It posted a
and NCB. compounded annual growth rate (CAGR) of 6.22% from
PhP35,526.60M in 2017 to PhP40,080.25M by the end of 2019.
The Company presents its operating segments performance based
on profit. For all the years covered in this report, the Company does
not have any inter-category recognition of sales between the two

Gross Sales, 2017-2019
In PhP’M COST OF GOODS SOLD
45,000 Cost of Goods Sold (COGS) mainly consists of materials and
40,000 supplied used, and taxes, depreciation and amortization, delivery
35,000 and freight, personnel and expenses, rentals and utilities, and other
30,000 expenses. In 2018, there was a significant increase in COGS by
25,000 21.51% due to an increase in materials and supplies used and taxes
20,000 which carried throughout the rest of year as well as for the year
15,000 2019. A “sugar tax” of Php6.00 per liter for caloric and noncaloric
10,000 sweeteners and Php12.00 per liter for high-fructose corn syrup
5,000 (HFCS) was imposed under the Tax Reform for Acceleration and
- Inclusion (TRAIN) Act in 2018. Over half of total costs comprise
2019 2018 2017 purchases of raw materials, of which the largest purchases are
Carbonated Soft Drinks (CSD) Non-Carbonated Beverages (NCB) sugar and beverage concentrates. Thereafter, COGS marginally
increased by 2.41% from 2018 to 2019. COGS averaged 79.80%
of the Company’s net sales for the period.
NET SALES
The Company’s net sales are derived from its gross sales less sales GROSS PROFIT
discounts, returns and allowances. It posted an 11.17% increase in PIP recorded gross profits of PhP7,252.99M for the year 2017 which
2018 to PhP33,394.24M from PhP30,027.60M in 2017. The translates to a Gross Profit Margin (GPM) of 24.15%. PIP’s GPM
increase was mainly due to a decrease in its sales discounts returns significantly decreased to 17.10% in 2018 due to an increase in its
and allowances. By 2019, its net sales increased by 5.36% COGS, then slightly increased to 19.37% in 2019.
amounting to PhP35,183.76M due to an increase in its gross sales
for the same year, while net sales as a % of gross sales remained Gross Profit Margin
In PhP’M
relativly flat at 87.78% for 2019
8,000 30.0%
25.0%
Cost of Goods Sold 6,000
20.0%
In PhP'M 2019 2018 2017
4,000 15.0%
Materials, supplies & taxes 21,941.89 21,810.94 16,154.64
Depreciation & Amortization 2,150.30 2,101.92 2,263.85 10.0%
2,000
Delivery & freight 2,111.28 1,694.77 2,172.34 5.0%
Personnel expenses 610.97 533.09 521.00 - -
Rental & utilities 494.99 624.21 652.64 2019 2018 2017
Others 1,060.74 920.09 1,020.15 Gross Profit Gross Profit Margin (GPM)
28,370.17 27,685.01 22,784.61
Source: 2017-2019 AFS, Unicapital analysis Source: 2017-2019 AFS, Unicapital analysis
OPERATING EXPENSES
PIP’s Operating Expenses consists of selling and distribution, LOSS FROM DISCONTINUED OPERATIONS
general and administrative, and marketing expenses. It decreased In September 2019, the Company’s Board of Directors (BoD)
by 7.77% for the year 2018 due to a decrease in its selling and approved the closure of its snacks production line and to discontinue
distribution expenses along with a 23.17% decrease in its marketing the locally-made Cheetos with PepsiCo, to focus on and strengthen
expenses. As a result, operating expenses amounted to the Company’s core business categories. Net Losses from its
PhP5,742.34M for 2018 compared to its previous year amount of Discontinued Operations were recorded throughout the years
PhP6,226.09M. However, it slightly increased by 2019 to covered by this report. Losses from discontinued operations
\PhP5,787.72M due to an increase in its selling and distribution as amounted to -PhP119.23M, -PhP77.38M, and -PhP143.74M net of
well as its general and administrative expenses as these sub- taxes, for the years 2017, 2018, and 2019, respectively.
accounts increased by 3.64% and 3.32%, respectively for the same
year. PROFIT OR LOSS FOR THE YEAR
In 2017, the Company recorded a PhP541.33M total Profit or a net
Operating Expenses profit margin (NPM) of 1.52% for the year 2017. However, it
In PhP'M 2019 2018 2017 significantly decreased by 136.86% to a total Loss of PhP199.54M
Selling and distribution 4,085.67 3,942.30 4,360.52 for the year 2018 due to higher Cost of Sales, brought about by the
General and higher than expected rise in sugar prices, and the challenge
administrative 1,210.61 1,171.70 1,047.78 introduced by higher excise taxes for beverages containing caloric
Marketing 491.44 628.34 817.79 or non-caloric sweeteners. This resulted to a NPM of -0.52% for the
5,787.72 5,742.34 6,226.09 same year. By 2019, with an increase in sales and flat overhead
Source: 2017-2019 AFS, Unicapital analysis expenses the Company generated total Profits of PhP298.73M for
the year, equivalent to a NPM of 0.75% as this signifies the
OPERATING PROFIT (LOSS) Company slowly recovering its loss from its previous year.
The Company recorded an Operating Profit of PhP1,026.90M or an
operating profit margin (OPM) of 2.89% for the year 2017. However,
by 2018, the Company reported a significant decrease by 103.22%
which translates to an Operating Loss of PhP33.12M due to a
significant increase in its COGS, which represented nearly 82.90%
of the Company’s net sales for that year. This results to its OPM of
-0.09% for 2018. However, in 2019, the Company was able to
recover and generated operating profits of PhP1,025.87M due to a
4.99% increase in its gross sales coupled with better gross profit
margins and flat growth in operating expenses. This translates to an
OPM of 2.6% which remains in the same range as its previous OPM
in 2017.

Financial Position
ASSETS
Cash 711,895 548,598 498,352
Receivables - net 2,823,843 2,542,413 2,404,681
Inventories 3,915,506 5,039,641 2,484,230
Noncurrent Assets
TOTAL ASSETS 26,224,806 26,172,640 24,144,371
Short-term debt 1,250,000 1,000,000 3,100,000
Equity
Share capital 1,751,435 1,751,435 1,751,435
Total Equity 9,142,510 9,159,065 9,445,456
CASH
The Company’s Cash account amounted to PhP498.35M, Accounts receivable constantly increased throughout the historical
PhP548.60M, and PhP711.90M for the years 2017, 2018, and 2019, period as it posted a CAGR of 8.37%, due to an increase in its trade
respectively which translates to a CAGR of 19.52%. Cash as a % of receivable from PhP2,404.68M in 2018 to PhP2,823.84M by the end
Total Assets stood at 2.06%, 2.10%, and 2.71%, for the years of 2019. Accounts Receivable (AR) turnover was faster in 201at
indicated respectively. While the Company’s cash ratio is 15.02x than in 2017 with an AR turnover of 14.77x. By 2019, AR
determined to be at 0.04x, 0.05x, and 0.06x for 2017, 2018, and turnover slowed down to 14.19x. The Company’s allowance for
2019 respectively. impairment losses remained stable throughout its historical period
as it represented an average 8.1% of the Company’ total trade
RECEIVABLES receivables.
The Company’s receivables account consists of trade receivables
from third parties, Others, and allowance for impairment losses and INVENTORY
others. Trade receivables are noninterest-bearing and generally PIP’s Inventories include Raw Materials and Packaging, Work in
have a 15 to 60 days’ term. Others consist mainly of receivables process, Finished Goods, and Spare parts and Supplies. There was
from employees, freight and marketing related reimbursements a 102.87% increase from PhP2,484.23M in 2017 to PhP5,039.64M
which are collected in cash. in 2018, mainly due to a significant increase in its sub-accounts of
raw and packaging materials as well as its finished goods.
Accounts Receivable turnover, 2017-2019
In PhP’M Inventory
2,900 15.2x In PhP'M 2019 2018 2017
Raw and packaging materials 2,363.01 3,720.08 1,603.39
2,800 15.0x
Finished goods 1,213.21 1,101.78 680.07
2,700 14.8x Spare parts and supplies 334.84 214.63 195.13
Work in process 4.45 3.14 5.64
2,600 14.6x
3,915.51 5,039.64 2,484.23
2,500 14.4x Source: 2017-2019 AFS, Unicapital analysis
2,400 14.2x
The sudden increase of the Company’s inventory resulted to a lower
2,300 14.0x inventory turnover of 5.49x in 2018 compared to its inventory
turnover in 2017 of 9.17x. This implies that the Company had an
2,200 13.8x
excessive supply of its product compared to the demand coming
2,100 13.6x from its consumers. Inventory turnover improved to 7.25x in 2019,
2019 2018 2017 mainly due to the Company decreasing its sub-account of raw and
Receivables - net AR Turnover packaging materials for the year.

Inventory Turnover, 2017-2019 means to measure PIP’s ability to pay short-term obligations through
In PhP’M its Current Ratio which was at 0.53x, 0.81x, and 0.76x, for the years
6,000 10.00x 2017, 2018, and 2019 respectively.
5,000 8.00x
4,000 INVESTMENTS IN ASSOCIATES
6.00x
3,000 The Company’s investment in associates consist of investments in
4.00x NADECO Realty Corporation (NRC) and NADECO Holdings
2,000
1,000 2.00x Corporation (NHC), which amounted to PhP596.08M, PhP612.66M,
- -
and 635.38M for the years 2017, 2018, and 2019, respectively. The
2019 2018 2017 constant increase is due to its accumulated equity in net earnings
per year being included in its carrying value. PIP owns 40.00% each
Inventory Inventory Turnover
of NRC and NHC as of December 31, 2019.
Investment in Associates
DUE FROM RELATED PARTIES In PhP’M 2019 2018 2017
The Company’s Due from Related Parties consists of advances to Acquisition cost
NADECO Realty Corporation (NRC) and outstanding net NRC 231.49 231.49 231.49
receivables from NRC. It constantly decreased from PhP580.17M in NHC 0.13 0.13 0.13
2017 to PhP552.99M by year end 2019. The decrease was due to 231.62 231.62 231.62
the Company collecting its receivables within the respective years. Accum. equity in net
Moving forward, this account shall remain materially unchanged as earnings
Balance at beg. of year 381.03 364.46 352.58
this will not be affected by the Transaction.
Equity in net earnings 22.73 16.58 11.88
403.76 381.03 364.46
ASSETS HELD FOR SALE 635.38 612.66 596.08
The Company’s Board of Directors approved the closure of its Source: 2017-2019 AFS, Unicapital analysis
Snacks category on September 2019, consequently classifying the
related assets in the category as either useable for the Company’s BOTTLES AND CASES
current operations or to be written-down as part of its disposal. The The Company’s bottles and cases account is derived by adding the
net realizable value of the assets held for sale amounted to deposit value of returnable bottles and cases on hand and in trade,
PhP126,43M as of 31 December, 2019. carrying amount at end of the year, and the bottles and cases in-
transit. There was a decrease in 2018 by 10.65% to PhP4,440.97M
CURRENT ASSETS due to a lower carrying amount at the end of the year. It then
Total Current Assets of the Company amounted to PhP6,251.74M, increased by 5.15% in 2019 to PhP4,669.76M due to a higher
PhP8,979.60M, and PhP8,749.36M for the years 2017, 2018, and balance of returnable bottles and cases which is net of accumulated
2019, respectively. Additionally, the current assets account gives a amortization.
which measures how well the Company uses its noncurrent assets
Bottles and Cases to generate revenue, was determined to be at 0.03x, -0.01x, and
In PhP'M 2019 2018 2017 0.02x, for the years 2017, 2018, and 2019, respectively.
Deposit value 727.73 650.43 563.99
Carrying amount at end of year 3,914.77 3,687.02 4,195.31 ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Bottles and cases in-transit 27.25 103.52 210.82 Accounts payable and accrued expenses consists of trade
4,669.76 4,440.97 4,970.12 payables, accrued advertising and marketing, non-trade payables,
accrued contract services, current portion of lease liability, accrued
personnel cost, rent, utilities, financing charges, and other accrued
PROPERTY, PLANT AND EQUIPMENT
expenses.
As of December 2019, approximately 45.70% of the Company’s total
assets was comprised of the property, plant and equipment of the
Accounts payable and accrued expenses Turnover, 2017-2019
Company which consists of Machinery and Other Equipment, In PhP’M
Buildings and Leasehold Improvements, Furniture and Fixtures, and 9,400 4.00x
Construction in-Progress. It slightly decreased in 2018 to an amount
9,200 3.50x
of PhP11,819.22M from an amount of PhP11,920.64M in 2017. This
9,000
decreased further by 5.56% amounting to PhP11,162.44M due to an 3.00x
8,800
increase in its accumulated depreciation and amortization. 2.50x
8,600
8,400 2.00x
RIGHT-OF-USE ASSETS & INTANGIBLE ASSETS
8,200
The Company’s Right-of-Use assets relates to the leased properties 1.50x
8,000
of PIP such as warehouses, facilities, and vehicles which amounted 1.00x
to PhP422.95M for the year 2019. The duration of the leases on its 7,800
7,600 0.50x
warehouses, facilities, and vehicles are for 25 years. However, the
lease does not provide an option for the Company to purchase or 7,400 -
2019 2018 2017
transfer ownership of the property at the end of the lease. The
Company’s intangible assets pertain to the software and licenses Accounts payable and accrued expenses Payables turnover
which were acquired in 2019. However, the software and licenses
acquired are not yet available for use as of December 2019 which
translates to an amount of PhP264,053 thousands for the same
There was a 13.39% increase for the year 2018 amounting to
year.
PhP9,221.40M as a result of an increase in its trade payables which
pertain to raw material purchases made by the Company with
NONCURRENT ASSETS
general payment term of 30 to 90 days. A slight decrease in 2019
The Company’s total Noncurrent Assets amounted to
by 5.29% amounting to PhP8,733.61M was mainly due to a
PhP17,892.64M, PhP17,193.04M, and PhP17,475.45M for the
decrease in its trade payables which implies that the Company has
years 2017, 2018, and 2019, respectively. Fixed Asset Turnover,
been able to pay its suppliers faster than in 2017.This is further Long-term debt
supported by its Accounts Payable (AP) turnover as it was In PhP'M 2019 2018 2017
constantly increasing throughout the historical period. It posted an Current 1,494.54 795.46 598.75
AP turnover of 2.50x in 2017 but increased to 2.73x in 2018 which Noncurrent 4,142.88 4,626.87 1,147.78
increased further to 3.38x by the year 2019. 5,637.42 5,422.33 1,746.53
SHORT-TERM DEBT
The Company’s short-term debt represents unsecured, interest- On March 2013, the Company entered into a loan agreement with
bearing short-term loans from local banks, with various maturity MBTC amounting to PhP1,000.00M to partially finance the
Company’s capital expenditure for its CSB and NCB business. The
dates. The loans were acquired to finance the Company’s working
loan is unsecured with a term of 7 years, payable in 20 successive
capital requirements. There was a significant decrease of 67.74% in
2018 which amounts to PhP1,000.00M as the Company paid off quarterly principal repayments to commence at the end of the 9th
several of its loans which had various maturity dates up to February quarter from the initial drawdown date and with a fixed interest rate
22, 2019. In 2019, it increased by 25.00% amounting to based on PDST-F at drawdown date plus a certain spread. The
PDST-F rate is derived from the average of the best 50.00% of the
PhP1,250.00M which consists of loans with various maturity dates
live bids of participating fixing banks in the secondary market for the
up to February 26, 2020. As of the date of this report, we understand
5-year Philippine peso-denominated Treasury Bills and bonds.
that the Company requested for a rollover for its short-term loans
that mature in 2020 and/ or have availed new loans within the year.
On March 2018, the Company entered into a loan agreement with
CURRENT LIABILITIES MBTC amounting to PhP2,500.00M to assist in refinancing its short-
term debt and partially finance its capital expenditures. The loan is
Current Liabilities of PIP includes all accounts payables, accrued
expenses, short-term liabilities, current portion of its long-term unsecured with a term of 5 years, payable in 12 successive quarterly
liabilities, and any income tax payable. PIP has recorded current principal repayments to commence at the end of the 9th quarter from
liabilities amounting to PhP11,873,585 thousand, PhP11,025,714 the drawdown date.
thousand, and PhP11,478,155 thousand for the years 2017, 2018,
and 2019, respectively. As a means to measure the Company’s The loan agreement with MBTC provides several covenants with the
more significant of which are listed below:
ability to cover its recorded current assets through the use of its most
liquid assets, its quick ratio has been computed to be at 0.32x, 0.36x,
and 0.42x, for the years indicated, respectively. • Debt-to-equity ratio shall not exceed 2:1 based on the financial
statements
LONG-TERM DEBT • Current ratio of at least 0.40:1 based on the financial
The Company’s long-term debt represents several loans from statements; or
Metropolitan Bank & Trust & Co. (MBTC), Bank of the Philippine • The company shall not declare or pay any cash dividends or
Islands (BPI), Shinhan Bank (Shinhan), and Industrial Bank of Korea redeem or repurchase any outstanding share or make any
(IBK). It increased by 210.5% in 2018 and 4.0% in 2019.

capital or asset distribution to its stockholders without prior capital or asset distribution to its stockholders without prior
written consent of the lender written consent of the lender
On October 2013 and March 2014, the Company entered into a loan On March 2018, the Company entered into a loan agreement with
agreement with BPI amounting to PhP2,000.00M to refinance the Shinhan amounting to PhP500.00M to refinance its short-term
Company’s short-term debt. The loan is unsecured with a term of 7 loans. The loan is unsecured with a term of 5 years, payable in 12
years, payable in 20 successive quarterly principal repayments to successive quarterly principal repayments to commence at the end
commence at the end of the 8th quarter from the initial drawdown of the 9th quarter from the drawdown date and with a fixed interest
date along with a fixed interest rate which will be determined using rate. Within the same month, PIP entered into a loan agreement with
the base rate plus a certain spread per annum on the drawdown IBK amounting to PhP500.00M to finance its capital working loan.
date. The loan is unsecured with a term of 3 years, payable in 10
successive quarterly principal repayments to commence at the end
On December 2018, the Company entered into a PhP800.00M loan of the 5th quarter from the drawdown date and with a fixed interest
agreement with BPI to refinance or to partially refinance its short- rate.
term bank loans. The loan is unsecured with a term of 7 years,
payable in 20 equal quarterly repayments to commence at the end DEFERRED TAX LIABILITIES
of the 9th quarter from the drawdown date. It further entered into The deferred tax liabilities of the Company amounted to
another loan agreement with BPI with an amount of PhP1,000.00M PhP870.00M, PhP696.56M, and PhP560.38M for the years 2017,
to further assist in refinancing its short-term bank loans. The loan is 2018, and 2019, respectively. It was decreasing at a compounded
unsecured with a term of 5 years, payable in 12 equal quarterly rate of 19.74% due to an increase in its set off of taxes per year.
installments to commence at the end of the 9th quarter of the Noncurrent liabilities cover the non-current portion of the Company’s
borrowing date. long-term obligations, deferred tax liabilities, and other noncurrent
liabilities such as Defined Benefit Liability and Lease Liability.
The loan agreement with BPI provides several covenants with the
more significant of which are listed below: OTHER NONCURRENT LIABILITIES
The Company’s other noncurrent liabilities consists of its defined
• Debt-to-equity ratio shall not exceed 2:1 based on the financial benefit plan. The Company has a funded, non-contributory, final
statements salary benefit plan which covers a substantial amount of its regular
• Current ratio of at least 0.40:1 based on the financial and full-time employees. It has created as well committees to help
statements; or maintain the plan. The plan as of December 31, 2019 is comprised
• Debt service coverage ratio of 1:1 based on the financial of cash and cash equivalents, debt securities, investment in equity
statements; or securities and other financial assets which are primarily receivables
• The company shall not declare or pay any cash dividends or and payables. There was a decrease by 17.7% in 2018 due to a
redeem or repurchase any outstanding share or make any decrease in its debt securities and its other financial assets. Other
financial assets are primarily receivables and payables. By 2019, it

increased by 35.6% due to an increased in its debt securities as well 2018 due to the loss recorded for the year, and PhP7,729.30M in
as its investment in equity securities. Debt securities consists of 2019. The Company’s BoD also approved the following declaration
investment in government securities and debt securities while its of cash dividends: P162.5 million in the calendar year ended 31
equity securities invest in food and drink, holding company, and real December 2019, P163 million in calendar year ended 31 December
estate. 2018, and P255 million in calendar year ended 31 December 2017.
Remeasurement losses on net deferred benefit liability decreased
PIP’s Total Debt-to-Equity (D/E) ratio stood at 1.56x in 2017 which from -PhP270.75M in 2017 to -PhP195.08M thousand in 2018, but
increased in 2018 to 1.86x a D/E ratio. By 2019, the Company’s D/E increased to -PhP338.22M in 2019 due to additional losses from the
ratio was at 1.87x indicating that the Company has increasingly remeasurement of the account.
financed growth and business operations through debt in 2019 and
2019, though debt levels remain manageable.
EQUITY
The Company’s Share Capital remained the same for the reporting
years presented in this report at PhP1,751.44M. Retained earnings
of the Company was at PhP7,964.78M in 2017, PhP7,602.71M in
Cash Flows
Net cash provided by operating activities 3,180.88 759.46 3,380.32
Net cash used in investing activities (2,745.03) (1,897.59) (3,692.83)
Net cash provided by (used in) financing activities (272.55) 1,188.38 490.82
NET INCREASE IN CASH 163.30 50.25 178.30
CASH FLOWS FROM OPERATING ACTIVITES CASH FLOWS FROM INVESTING ACTIVITES
The Company’s operating cash flows in 2017 amounted to Throughout the historical 3-year period, the Company’s focused its
PhP3,380.32M. However, it significantly decreased by 77.53% to use of cash for its investing activities as it posted PhP3,692.83M
PhP759.46M for the year 2018 due to a significant increase in cash being used for investing activities in 2017. Majority of the cash is
expense for its inventories within the year as well as Contribution to directly being used for its property, plan, and equipment which
plan assets. Contribution to plan assets consists of debt securities amounted to PhP2,215.11 for the year 2017. Cash spent on PPE
invested as well as investments in equity securities which increased however, decreased significantly by 45.6% to PhP1,205.09M in
significantly from 2017 to 2018 by 275.76%. By 2019, its operating 2018 resulting in total investing activities amount of PhP1,897.59M
cash flows significantly increased by 318.8% YoY to PhP3,180.88M which is a 48.61% decrease coming from 2017. In 2019, the
due to a decrease in its contribution to plan assets as well as a Company increased its spending by 44.66% to PhP2,745.03M due
significant decrease in its inventories. to an increase in its bottles and cases as well as its intangibles.

CASH FLOWS FROM FINANCING ACTIVITES
Cash from financing activities was generated from proceeds from by its financing activities has increased significantly by 142.12% in
short-term debt with an amount of PhP18,200.00M for the year 2019 amounting to PhP1,188.38M due to the Company receiving
2017, and repayments of PhP17,800.00M in debt for the same proceeds from its long-term debt. By 2019, the Company used its
period, resulting in net cash provided by financing activities of cash for repayments of short-term and long-term debt which
PhP490.82M for the same year. However, in 2019, its proceeds from outweighed its proceeds from short-term and long-term debt. This
its short-term debt decreased by 10.71% to PhP16,250M. Despite translates to a significant decrease of 122.93% resulting to a total
its decrease in short-term debt availment, its total amount provided amount used for financing activities of PhP272.55M.
Profit or Loss and Other Comprehensive Income (1Q 2019, 2020)

The Interim Financial Statements for the periods as of and for the quarters ending 31 March 2019 and 2020 were obtained from the publicly
disclosed unaudited quarterly reports of PIP to the PSE and the SEC. Unicapital, Inc. did not verify the accuracy or the completeness of the
information contained in the quarterly reports. Please see Annex I for the condensed consolidated financial statements.

Unaudited Unaudited
GROSS SALES 8,785,451 9,372,153
NET SALES 7,701,115 8,288,053
GROSS PROFIT 1,264,362 1,701,226
NET SALES
During the first quarter of 2020, the Company recorded net sales of Net sales from its CSD category amounted to PhP6,315.00M, which
PhP7,701.12M. This was 7.08% lower than the recorded is 2.82% higher than the PhP6,142.00M net sales from CSD
PhP8,288.05M net sales recorded in the same quarter in 2019. The recorded in 2019. Its NCB category on the other hand recorded
decline in net sales was mainly driven by the Philippine PhP1,383.00M net sales, which is 35.04% lower than the
government’s imposition on March 2020 of the Enhanced PhP2,129.00M net sales recorded in the same quarter of 2019. The
Community Quarantine (“ECQ”) as a control response to the Company continued to move the remaining inventory from its
COVID-19 pandemic. Snacks category, recording net sales of PhP3.00M in the first
quarter of 2020, 82.35% lower than the same quarter sales in 2019 gross profit booked in the same quarter of 2019. This results to a
of PhP17.00M. lower gross profit margin of 16.42% in 2020 from 20.53% in 2019.
Net Sales Product Mix OPERATING PROFIT (LOSS)

In PhP’M The Company recorded an operating loss of PhP177.72M for the
NET SALES first quarter of 2020, this is a 188.14% decline from the operating
profit of PhP201.64M recorded in the same quarter 2019. The
7000 decline was due to the lower gross profit recorded in the first quarter
6000 of 2020, and operating expenses amounting to PhP1,442.08M in the
5000 same period; operating expenses were relatively flat, declining only
4000 by 3.83% from its 2019 first-quarter expense of PhP1,499.58M.
3000
2000 PROFIT (LOSS) FOR THE YEAR
1000 During the first quarter of 2020, the Company recorded a net loss of
0 PhP162.39M, which is 328.41% lower than the PhP71.10M net profit
CSD NCB SNACKS recorded in the first quarter of 2019. This translates to a net income
2019 2020
margin of -2.11% and 0.86% during the first quarters of 2020 and
2019 respectively. Collectively, the 2020 year-to-date losses of the
company has been attributable to sales volume decline due to the
GROSS PROFIT imposition of the community quarantine, unfavorable product sales
Gross profits of the Company in the first quarter of 2020 amounted mix brought by lower sales of its NCB products, and timing of
to PhP1,264.36M, which is 25.68% lower than the PhP1,701.23M expenses.
Financial Position (1Q 2019, 2020)

ASSETS
Current Assets
Cash 967,499 521,647
Receivables - net 2,427,553 2,137,282
Inventories 4,335,291 4,634,064
9,193,014 8,622,927

Noncurrent Assets
TOTAL ASSETS 26,177,682 25,994,634
Current Liabilities
Short-term debt 1,687,500 1,650,000
Equity
Share capital 1,751,435 1,751,435
Total Equity 8,980,122 9,220,551
CURRENT ASSETS
The Company recorded an increase in Total current assets of and other current assets worth PhP575M, a 144% year-on-year
PhP1,063M or a 13% increase from March 31, 2019 to 2020. This change.
was primarily due to an increase in Cash amounting to PhP445.85M,
an 86% year-on-year change, and an increase in Prepaid expenses
NONCURRENT ASSETS NONCURRENT LIABILITIES
There was an PhP880M decrease, or a 5% year-on-year decrease Total noncurrent liabilities remained mostly stable, recording only a
in Total noncurrent assets from 2019 to 2020. This was primarily due 0.5% decrease from 2019 to 2020 amounting to PhP30M. This was
to a decrease in Property, plant, and equipment worth PhP1,123M, due to a PhP30M decrease, or a 12% decrease in Deferred tax
mostly caused by ordinary depreciation. liabilities, offset by increases in Long-term debt and Other
noncurrent liabilities worth PhP20M and PhP23M, respectively.
CURRENT LIABILITIES
The Company recorded an increase in Total current liabilities of EQUITIES
PhP454M, or a 4% increase year-on-year, mostly due to increases There was no change in Share capital from March 31, 2019 to 2020;
in both the Current portion of long-term debt and Accounts payable the account remained at PhP1,751M for the period. However, there
and accrued expenses worth PhP244M and PhP261M, respectively. was also a 73% year-on-year increase in Remeasurement losses on
net defined benefit liability, worth PhP143M. This was offset by a
decrease in Retained earnings of PhP97M. Overall, this led to a
2.6% decrease in Total equity.

4 | VALUATION

4 | VALUATION
For the Valuation section of the report, the Financial Advisor used the total number of common stock outstanding as of 30 June, 2020 – a total
of 3,693,772,279 common shares, with a par value of PhP0.15 per share. The Company’s authorized capital stock is at PhP750,000,000.00,
divided into 5,000,000,000 common shares. The Financial Advisor further notes that the shares subject of the Transaction represents 2.11%
of the total outstanding common shares of PIP as of writing.
VOLUME WEIGHTED AVERAGE PRICE

The Volume Weighted Average Price (“VWAP”) approach estimates the value of a listed company based on its historical trading volume and
price. The market price of a listed company is considered the indication of how the investors perceive the value of a company to be. In this
valuation report, the Financial Advisor examines the value of PIP’s shares as traded on the Philippine Stock Exchange. For the full historical
trading prices of the Company, please refer to Annex II of this report.
VOLUME WEIGHTED AVERAGE PRICE APPROACH

As of 30 June, 2020, the Company had 3,693,772,279 common shares outstanding with a par value of PhP0.15 per share. The Company’s
shares are traded at the Philippine Stock Exchange with the ticker “PIP”. VWAP Approach uses historical trading activity of the stock within the
selected two-year active trading period, up until its trading suspension effective 18 June 2020.
Trading History Date Range High Low Average Volume VWAP

6-months December 16, 2019 to June 17, 2020 1.93 1.20 1,434,286 1.87
1-year June 18, 2019 to June 17, 2020 2.22 1.20 5,624,176 1.82
2-year June 18, 2018 to June 17, 2020 2.40 1.13 4,594,988 1.69
• Based on the 6-month VWAP of the Company immediately preceding PSE's Notice of Trading Suspension, PIP's price per share is
PhP1.87, indicating a market capitalization of PhP6,912.35 Million. During this period, the Company's stock price reached a high of
PhP1.93 per share, a low of PhP1.20 per share, and an average trading volume of 1.43 Million shares; showing a -10.53% change over
the 6-month period.
share, a low of PhP1.2 per share, and an average trading volume of 5.62 Million shares; showing a 26.87% change over the 1-year period.

share, a low of PhP1.13 per share, and an average trading volume of 4.59 Million shares; showing a -23.08% change over the 2-year
period.
For purposes of the Transaction, the Tender Offer being made by LOTTE Chilsung is at the price PhP1.95 per share, which is a premium of
4.28% over the 6-month VWAP; a 7.14% premium over the 1-year VWAP; and, a 15.38% premium over the 2-year VWAP of the Company’s
Common Shares.
SHARE PRICE AND TRADING VOLUMES

The chart shows the historical development of PIP’s share price and trading volume from 18 June 2018 to 04 August 2020.
1 2 3 4 5
Chart Source: FactSet Research
The Company’s historical trading developments may have also been influenced by market speculations, certain corporate announcements
regarding changes in its business and operations, changes in government regulations that either directly or indirectly affects the Company or
the industry where the Company operates, or the regulatory decisions over applications that directly affect the Company’s strategic initiatives.
1 On 25 September, 2019, the Company, through its disclosure to the Philippine Stock Exchange, announced that it has received approval
from its Board of Directors to close its production line for the Snacks category, to focus on strengthening its beverage categories.
2 On 12 December 2019, PIP announced that LOTTE Chilsung issued a tender offer report on 11 December, 2019, offering to buy 2.13
Billion common shares.
3 In a letter to PIP dated 4 February, 2020, the Securities and Exchange Commission stopped the tender offering of LOTTE Chilsung to the
minority shareholders of PIP citing “pending the resolution of certain issues” related to the tender offer.
4 On 26 March, 2020, the Philippine Competition Commission (“PCC”) cleared the tender offering of LOTTE Chilsung to the minority
shareholders of PIP, concluding that it will not result in substantial lessening of competition.
5 The Philippine Stock Exchange has suspended the trading of PIP as public ownership had fallen below the 10.00% minimum requirement.
NET ASSET VALUE

The Net Asset Value (“NAV”) method estimates the net residual value of the Company by carefully arriving at the round value of its assets,
using the publicly available reports published by the Company, and, subsequently deducting all its liabilities and non-controlling interests.
NET ASSET VALUE APPROACH

This Asset-based approach computes the value of a company or business based on its Net Asset Value, or the fair market value of its assets
minus its total liabilities. To use this this valuation approach, the NAV formula was applied to the Company’s latest and publicly available
consolidated audited financial statements.
Net Asset Value (in PhP Millions, except per share data) 2019 2018
Total Assets 26,224.81 26,172.64
Less: Total Liabilities 17,082.30 17,011.58
Net Assets 9,142.51 9,161.07
Outstanding Shares 3,693.77 3,693.77
Net Asset Value Per Share 2.48 2.48
For the period covered in this report, 45.70% of the Company’s Total Assets, on average, is comprised of its Property, Plant and Equipment,
which records its Machinery and Other Equipment, Buildings and Leasehold Improvements, Furnitures and Fixtures, and Construction in-
Progress. The Company annually reviews the estimated useful life of its Property, Plant and Equipment, based on its expected useable period,
and any adjustments if there are material variations from the estimates and the actual condition due to wear and tear, and technical
obsolescence. An average 31.19% of its Total Assets are comprised of its current assets account, and an average of 18.45% of its Total Assets
is from the bottles and cases, which is net of any allowances recorded for unusable and returnable bottles and cases. In 2019, the Company
recorded Right of Use Assets related to it leased properties whose lease terms are more than 12 months, and Intangible Assets relating to the
Company’s purchase of software and licenses, which only comprise 1.61% and 1.01% of total assets for the year, respectively. The remaining
4.66% of its average Total Assets are composed of its other assets.

An average of 53.55% of its Total Liabilities is comprised of its Accounts Payable and Accrued
Asset Breakdown Expenses. This account materially consists of its Trade Payables that pertains to raw material
as of December 31, 2019 purchases made by the Company on account and refundable customer deposits. 19.75% of its
Total Liabilities, on average, is from the Long-Term obligations of the Company, net of the
6%
current portion; this account includes all noncurrent long-term loan obligations from Philippine
Property, plant,
43% and Korean commercial banks, where for the periods covered in this report, PIP has been
18% and equipment
compliant with the terms of the financial covenants of its loan agreements.
Current assets
The derived Net Asset Value of PIP ranges from PhP9,142.51 million to PhP9,161.07 million.
Bottles and cases
This Net Asset Value range would correspond to an indicative share price of PhP2.48 per
share, when allocated to the total number of outstanding shares of PIP. No further adjustments
Other non-current
33% assets were made as 1) PIP does not own land from which revaluation gain can be recognized and 2)
no appraisal reports were provided.
The Financial Advisor is of the opinion that the derived valuation using Net Asset Value does not satisfactorily reflect the value of PIP’s common
shares. While the Company operates as a manufacturer, seller, and distributor of snacks, food, and food products, this valuation method is
deemed not suitable, considering that: historically, PIP traded below book value during the period covered in this report; it does not take into
account the Company’s ability to generate earnings and cash flow for its equity owners from its assets versus the book value of its assets; and
that the Company continues to be a going concern and the Transaction shall not be a trigger for liquidation . NAV, therefore, is presented for
illustrative purposes only, and without influence to the recommended fair value range.
COMPARABLE PUBLIC COMPANIES APPROACH

The Comparable Public Companies (“CPC”) approach is a form of relative valuation that estimates the value of a company based on valuation
metrics or multiples of publicly-listed companies in the same industry or business, or other similarities. The CPC approach operates under the
assumption that similar companies will have the same valuation multiples. Additional information regarding the comparable public companies
used in this valuation exercise can be found in Annex III of this valuation report.
A summary of the valuation metrics used can be found below:
2019 2019, Calendar Year-End Multiples

Median 0.80x 22.42x 1.38x 10.39x
Data Source: FactSet Research on August 5, 2020
Market Cap. data as of 31 Dec. 2019
Average 1.2x 16.2x 2.4x 12.5x
12.82% Discount 0.70x 19.55x 1.20x 9.05x
The Financial Advisor carefully selected the peer group comparable companies based from the operating beverage manufacturing companies
in the Southeast Asian region which carry, manufacture, package, and distribute international brands under a license agreement. The median
valuation multiples derived from the 2019 calendar year-end results of the comparable companies were taken as to be reflective of the industry
where the Company operates, and was discounted by 12.82% to account for a discount of lack of control on the shares covered by the
Transaction. This discount was derived from the resulting control premium from the price per share tendered by LOTTE Chilsung which
concluded last June 2020, over the prevailing market price of PIP on the same date. As stated, the Transaction covers the common shares
which are held of the minority shareholders. Intrinsically, minority shareholders have little to no authority to make strategic decisions for the
Company as a whole, nor the power to directly influence the election of the Board of Directors.
The resulting multiples were then applied to the 2019 audited financial data of the Company to arrive at a corresponding valuation of the
company’s equity.
Indicative Valuation 2019, Calendar Year-End

High (Median) 28,174.24 6,698.26 12,573.31 31,761.24
Low (12.82%) 24,562.16 5,839.50 10,961.34 26,660.86
Price per share
High (Median) 7.63 1.81 3.40 8.60
Low (12.82%) 6.65 1.58 2.97 7.22
2020, LTM March-End Multiples

Median 0.78x 21.99x 1.13x 9.97x

Data Source: FactSet Research on August 5, 2020. Average 1.0x 12.6x 2.0x 10.4x
Market Cap data as of 18 Aug. 2020 12.82% Discount 0.68x 19.17x 0.98x 8.69x
Given that the Company’s Last Twelve Months (“LTM”) ending 31 March 2020 results are available, the Financial Advisor also took into
consideration the median valuation multiples derived from the LTM 2020 results of the comparable companies as this has been believed to be
reflective of the operating results brought about by events such as: the effect of the ongoing US-China Trade War, and the limitations brought
about by the COVID-19 pandemic among others. The resulting peer group median multiples was subsequently discounted by 12.82% to account
for a discount for lack of control.
The resulting multiples were then applied to the 31 March 2020 LTM financial data of the Company to arrive at a corresponding valuation of
the Company’s equity.
Indicative Valuation 2020, LTM March-End

High (0.00% disc.) 26,880.61 4,869.20 10,037.03 26,514.34
Low (12.82% disc.) 23,434.37 4,244.94 8,750.23 22,193.76
Price per share P/S P/E P/B EV/EBITDA

High (0.00% disc.) 7.28 1.32 2.72 7.18
Low (12.82% disc.) 6.34 1.15 2.37 6.01
Attention should be pointed to the unavailability of forward multiples of the peer group comparable companies identified herein and the exclusion
of the Company’s projections in this valuation exercise. As of the date of this report, forward multiples of the peer group comparable companies
have not been made available through any market research publications. And, while projections of the Company have been provided – it has
been determined through further analysis of the model that it would be impracticable to use for the purposes of this valuation, as it has been
prepared with pre-COVID-19 assumptions which raises concerns over its timeliness and relevance, and the limitation faced by the Financial
Advisor in independently verifying and deriving useful information for analysis and valuation purposes.
(P/E) PRICE-TO-EARNINGS
The P/E multiple measures the price that investors are willing to pay as risk and prospects for growth. It has to be noted that this
for each Peso of earnings after tax that a company generates. This approach is a popular benchmark for valuation, especially for
ratio, being easy to compute and widely available and used when manufacturing companies such as PIP, since the business model of
valuing stocks, makes comparison with the value of other listed the Company and its peer group comparable companies within the
companies within the same or similar industry or sector a lot easier. same industry provides for a relatively stable earnings result. The
It also serves as an indicator for other characteristics of the firm such P/E ratio is computed by dividing the estimated market value of a

Company by its earnings or net income for the year immediately to PhP4,869.20 Million, or an indicative share price of PhP1.15 to
succeeding the current year. PhP1.32 per share.
Based on the resulting P/E multiple for the 2019 calendar year-end The Company’s profit (loss) recorded for the year 2019 and LTM-
of 19.55x to 22.42x, the resulting valuation places the Company’s ending March 2020 has been considered for this valuation metric. It
indicative market valuation to be PhP5,839.50 Million to is composed of the Company’s net profit (loss) derived from its
PhP6,698.26 Million, or an indicative share price of PhP1.58 to continuing operations less the losses incurred from its discontinued
PhP1.81 per share. operations, net of tax.
Based on the resulting P/E multiple for the LTM ending 31 March The Financial Advisor is of the opinion that the P/E multiple is an
2020 of 19.17x to 21.99x, the resulting valuation places the appropriate valuation metric for PIP, given that it is reflective of
Company’s indicative market valuation to be PhP4,244.94 Million earnings that would accrue to common shareholders.
(P/S) PRICE-TO-SALES
A stock’s price/sales ratio (P/S ratio) is another stock valuation Based on the resulting P/S multiple for the LTM ending 31 March
indicator similar to the P/E ratio. The P/S ratio measures the price of 2020 of 0.72x to 0.82x, the resulting valuation places the Company’s
a company’s stock against its annual sales, instead of earnings. Like indicative market valuation to be PhP23,434.37 Million to
the P/E ratio, the P/S reflects how many times investors are paying PhP26,880.61 Million, or an indicative share price of PhP6.34 to
for every dollar of a company’s sales. This valuation method is PhP7.28 per share.
particularly useful for start-up businesses which are in the
introductory to early growth stages of operations. The sales considered for this valuation metric is based on the
Company’s total external sales for the year 2019 and the LTM-
Based on the resulting P/S multiple for the 2019 calendar year-end ending March 2020, less the sales returned and allowances for the
of 0.70x to 0.80x, the resulting valuation places the Company’s same years indicated. The Financial Advisor is of the opinion that
indicative market valuation to be PhP28,174.24 Million to the P/S multiple is not a suitable valuation metric for PIP, as PIP is
PhP24,562.16 Million, or an indicative share price of PhP6.65 to not a start-up or in the early stages of growth, and is presented for
PhP7.63 per share. illustrative purposes only.
(P/B) PRICE-TO-BOOK
This ratio measures the relationship of the market value of a firm extent of premium or discount imputed by stock market investors vis-
versus the amount the firm has received from its stockholders in the à-vis its net book value.
form of investments or money reinvested in their behalf—the
retained earnings. It indicates how much a firm is worth as the Based on the resulting P/B multiple for the 2019 calendar year-end
market dictates, and how much it took and is taking its owners to of 1.20x to 1.38x, the resulting valuation places the Company’s
keep it in operation. Thus, the price-to-book value ratio indicates the indicative market valuation to be PhP10,961.34 Million to

PhP12,573.31 Million, or an indicative share price of PhP2.97 to liabilities from the total assets for the year 2019 and LTM-ending
PhP3.40 per share. March 2020. The Financial Advisor is of the opinion that the P/B
multiple is not a suitable valuation metric for PIP, as the peer group
Based on the resulting P/B multiple for the LTM ending 31 March generally had higher return on equity in comparison, and is
2020 of 0.98x to 1.13x, the resulting valuation places the Company’s presented for illustrative purposes only. The Financial Advisor
indicative market valuation to be PhP8,750.23 Million to further notes that PIP’s shares have historically traded below its
PhP10,037.03 Million, or an indicative share price of PhP2.37 to book value which may be reflective of the Company’s ability to
PhP2.72 per share. generate earnings vis-à-vis the book value of its assets.
The book value considered for this valuation metric is equal to the
net asset value of the company, derived by subtracting the total
(EV/EBITDA) ENTERPRISE VALUE-TO-EBITDA

The Enterprise Value (“EV”) of a company is interpreted as the Based on the resulting EV/EBITDA multiple for the LTM ending 31
takeover value as it considers the level of debt that needs to be March 2020 of 8.69x to 9.97x, the resulting valuation places the
settled to gain 100% control of the target company. The Earnings Company’s indicative market valuation to be PhP22,193.76 Million
Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”), to PhP26,514.34 Million, or an indicative share price of PhP6.01 to
meanwhile, is usually used as a proxy for Free Cash Flow (“FCF”) PhP7.18 per share.
and measures profitability before payments are made to debt
holders, taxes are paid, and depreciation of assets are recognized. The Company’s EBITDA considered for this valuation metric is
In doing so, the EBITDA margin is a comparable measure between calculated from the Company’s reported operating profit (loss),
companies with different capital structures and tax regimes. adding back the booked Depreciation and Amortization expenses
However, while the EV/EBITDA is a good comparable multiple as it for the year 2019 and LTM-ending March 2020. The Financial
allows for the comparison of companies under different capital Advisor is of the opinion that the EV/EBITDA multiple is not a
structures, it does ignore the capital structure of the company; not suitable valuation metric for PIP, as it disregards Depreciation and
taking into consideration the leverage of the company and its impact Amortization which is significant in PIP's line of business, the peer
on income and operating cash flows to its equity investors. group have a relatively similar tax rate to the Company, and the
EV/EBITDA multiple is best suited for majority acquisitions where
Based on the resulting EV/EBITDA multiple for the 2019 calendar the amount of debt of a target company must be taken into account.
year-end of 9.05x to 10.39x, the resulting valuation places the As a result, the EV/EBITDA multiple is presented for illustrative
Company’s indicative market valuation to be PhP26,660.86 Million purposes only.
to PhP31,761.24 Million, or an indicative share price of PhP7.22 to
PhP8.60 per share.

RECOMMENDED VALUATION
The objective of this Valuation Report and Fairness Opinion is to determine the fair value of PIP’s outstanding common shares which are the
subject of the Transaction, which are the remaining 77,988,345 common shares of PIP held by the public equivalent to a 2.11% equity stake.
The Financial Advisor further considered the relevance of the various approaches used in this valuation exercise to the status and condition of
the Company.
The illustration below summarizes the resulting market capitalization derived from the different valuation methodologies employed, and the
Financial Advisor’s recommended valuation for the common shares of Pepsi-Cola Products Philippines, Inc. subject of the Transaction.
PIP Indicative Valuation

(In PhP Millions)
Market Capitalization Price per Share
Valuation Method Min Max Min Max
6-month VWAP 6,912.35 6,912.35 1.87 1.87
1-year VWAP 6,712.91 6,712.91 1.82 1.82
2-year VWAP 6,248.81 6,248.81 1.69 1.69
Net Asset Value 9,142.51 9,161.07 2.48 2.48
CPC P/S - CY '19 24,562.16 28,174.24 6.65 7.63
CPC P/E - CY '19 5,839.50 6,698.26 1.58 1.81
CPC P/BV - CY '19 10,961.34 12,573.31 2.97 3.40
CPC EV/EBITDA - CY '19 26,660.86 31,761.24 7.22 8.60
CPC P/S – LTM ‘20 23,434.37 26,880.61 6.34 7.28
CPC P/E – LTM ‘20 4,244.94 4,869.20 1.15 1.32
CPC P/BV – LTM ‘20 8,750.23 10,037.03 2.37 2.72
CPC EV/EBITDA – LTM ‘20 22,193.76 26,514.34 6.01 7.18
Overall Average 12,971.98 14,711.95 3.51 3.98
Fair Valuation 5,665.60 6,159.93 1.53 1.67
In arriving at a Fair Valuation for the outstanding common shares of the Company which is the subject of the Transaction, the Financial Advisor
examined the following complementary methods, without impact to the resulting fair valuation:
On the valuations resulting from the Volume Weighted Average Price method, the Financial Advisor is of the opinion that the derived 1-year
and 2-year Volume Weighted Average Price are not reasonable valuation metrics for PIP. Historical developments from before 2020 are no
longer reflective of recent market developments’ impact on the trading price of the Company. The Financial Advisor also considered that the
trading history of the Company prior to 2020 is not reflective of market speculation, certain corporate announcements regarding changes in its
business and operations, changes in government regulations that either directly or indirectly affects the Company or the industry where the
Company operates, or regulatory decisions over applications that directly affect the Company’s strategic initiatives.
The Financial Advisor is of the opinion that the derived valuation using Net Asset Value is not a good metric for PIP. While the Company
operates as a manufacturer, seller, and distributor of snacks, food, and food products, this valuation method is deemed not suitable for the
following reasons:
• It does not efficiently distinguish and identify the value of the assets held by the Company that are pledged as collateral, if any, to debt;
• The Company continues to be a going concern and the Transaction shall not be a trigger for liquidation
• No revaluation of any assets has been applied; and,
• It does not take into account the Company’s ability to generate earnings and cash flow for its equity owners from its assets vis-à-vis the
book value of its assets, which may vary from business to business.
Among the relative valuation approaches, Price-to-Sales is considered not a fitting valuation metric for the Company as it ignores the Company’s
cost and capital structure (tax and COGS, profit margins) and is a valuation approach better suited for start-ups. Price-to-Book was considered
to be inappropriate for this exercise as the metric disregards the Company’s actual ability to generate earnings and cash flow for its equity
owners from its assets vis-à-vis the book value of its assets, which may vary from business to business. In this exercise it was observed that
the peer group generally had higher return on equity in comparison. We believe this is further reflected in the fact that PIP’s shares have
historically traded at below its book value. The Financial Advisor considers the use of EV/EBITDA for the Company may be misleading due to
the exclusion of Taxes, Depreciation and Amortization of the Company in the analysis; while Depreciation and Amortization are non-cash
expenses, these are still important factors considering the Company operates as a manufacturer of products. Considering that the peer group
comparable companies identified for this valuation exercise shows a relatively similar tax rate with the Company, EV/EBITDA would not be a
reasonable metric – which is normally used for comparing companies with widely varying tax rates. In addition, the EV/ EBITDA multiple is
better suited for majority acquisitions where a potential acquirer would have to take into account the amount of debt when taking over a business.
The Discounted Cash Flow approach and the Dividend Discount Model were not considered as an appropriate method for valuing the Company
since the financial projections provided for the Company were not substantially sufficient for the Financial Advisor to be able to satisfactorily
verify the basis for such projections and prepare a corresponding valuation. See Annex IV Financial Projections. Furthermore, the projections
were determined to be inconsistent with observed historical trends of PIP’s financial performance from 2017 - 2019 and may not accurately
capture recent developments in the market and industry as these were prepared in 2019 without consideration to the effects of COVID-19 and
other social developments that occurred in 2020 or that may occur in the future.
A review of the Company’s historical dividend payout ratio and dividend yield also indicate that dividends may not be representative of the
Company’s earnings for the period as a release of dividends was permitted in 2018, during which there was a net loss for the year, while the
improvement in PIP’s 2019 earnings was not matched by a commensurate increase in dividends. Because of the inconsistent historical
dividends, it was determined that without sufficient basis for future dividend payments and taking into account the recent change in control of
the business, the Dividend Discount Model would not be a reliable measure of the fair value of the Company’s common shares.
PIP Indicative Market Capitalization

(In PhP Millions)
For this Fairness Opinion and Valuation Report, the valuations derived from the Price to Earnings ratio of Comparable Public Companies based
on both calendar year-end and LTM results, along with the valuation result from the 6-month VWAP were considered to be the most appropriate
for this valuation exercise and the corresponding average from these three approaches was used. The Price to Earnings approach is quite
suitable for manufacturing companies and isolates value that accrues specifically to equity shareholders of the company. The VWAP approach
on the other hand provides a clear indication of how the market perceives the value of the stock to be, especially given that PIP’s shares have
historically been well traded. We perceive these approaches to provide an indication on how the Company’s efforts in its operating changes
towards profitability and ultimate results of operations are perceived in the market, and the impact of recent global economic and market
developments.
As a result and upon careful examination of the valuation exercise, the Financial Advisor is of the opinion that the common shares
outstanding of Pepsi-Cola Products Philippines, Inc. subject of the Transaction may be considered fairly valued at a range of PhP1.53
per share to PhP1.67 per share, or equivalent to a market capitalization of PhP5,665.60 Million to PhP6,159.93 Million. Therefore, the
Financial Advisor is of the opinion that the Tender Offer Price of PhP1.95 per share subject of the Transaction is fair from a financial
point of view as of 4 September 2020.
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Annex Pepsi-Cola Products Philippines, Inc. 4 September 2020
ANNEXES

ANNEX I | SUMMARY OF AUDITED CONSOLIDATED FINANCIAL STATEMENTS

audited by R.G. Manabat & Co.in accordance with Philippine Standards on Auditing (“PSAs”) were obtained from the public disclosures of PIP
to the PSE. Unicapital, Inc. did not verify the accuracy or the completeness of the information contained in the Financial Statements.

GROSS SALES 40,080,245 38,175,672 35,526,599
LESS SALES DISCOUNTS, RETURNS AND ALLOWANCES 4,896,482 4,781,433 5,488,997
NET SALES 35,183,763 33,394,239 30,037,602
COST OF GOODS SOLD 28,370,170 27,685,013 22,784,614
GROSS PROFIT 6,813,593 5,709,226 7,252,988
OPERATING EXPENSES
Selling and distribution 4,085,669 3,942,304 4,360,523
General and administrative 1,210,612 1,171,703 1,047,784
Marketing 491,441 628,335 817,785
5,787,722 5,742,342 6,226,092
FINANCE AND OTHER INCOME (EXPENSES)
Equity in net earnings of associates 22,728 16,579 11,880
Interest income 5,266 5,354 4,725
Interest expense (407,736) (275,329) (136,836)
Other income – net 71,573 134,512 31,661
(308,169) (118,884) (88,570)
PROFIT (LOSS) BEFORE TAX 717,702 (152,000) 938,326
INCOME TAX EXPENSE (BENEFIT) 208,238 (29,837) 277,776
PROFIT (LOSS) FROM CONTINUING OPERATIONS 509,464 (122,163) 660,550
LOSS FROM DISCONTINUED OPERATIONS NET OF TAX (210,738) (77,377) (119,225)
OTHER COMPREHENSIVE INCOME (LOSS)
Item that will not be reclassified to profit or loss
Remeasurement gains (losses) on defined benefit liability - net of deferred tax (143,145) 75,675 (3,602)
TOTAL COMPREHENSIVE INCOME (LOSS) 155,581 (123,865) 537,723
Basic/Diluted Earnings Per Share 0.08 (0.05) 0.15

ASSETS
Current Assets
Cash 711,895 548,598 498,352
Receivables - net 2,823,843 2,542,413 2,404,681
Inventories 3,915,506 5,039,641 2,484,230
8,622,927 8,979,604 6,251,736
Noncurrent Assets
TOTAL ASSETS 26,224,806 26,172,640 24,144,371
Current Liabilities
Short-term debt 1,250,000 1,000,000 3,100,000
Equity
Share capital 1,751,435 1,751,435 1,751,435
Total Equity 9,142,510 9,159,065 9,445,456

Profit (loss) before tax from continuing operations 717,702 (152,000) 938,326
Loss before tax from discontinued operations (301,054) (110,538) (170,322)
Profit (loss) before tax 416,648 (262,538) 768,004
Adjustments for:
Depreciation and amortization 2,804,723 2,632,271 2,952,727
Interest expense 407,736 275,329 136,837
Retirement cost 115,753 123,879 116,684
Impairment losses on receivables, inventories, bottles and cases, and machinery and equipment 292,060 61,559 327,306
Loss (gain) on disposal of property and equipment (8,439) 14,566 24,516
Equity in net earnings of associates (22,728) (16,579) (11,880)
Interest income (5,266) (5,354) (4,725)
Operating profit before working capital changes 4,000,487 2,823,133 4,309,469
Changes in operating assets and liabilities
Inventories 1,079,692 (2,593,478) (773,110)
Prepaid expenses and other current assets (337,050) 2,656 (76,791)
Receivables (332,973) (174,718) (485,270)
Increase (decrease) in accounts payable and accrued expenses (901,317) 1,010,496 639,019
Cash generated from operations 3,523,158 1,080,954 3,618,317
Interest received 5,243 5,278 4,718
Income taxes paid (197,804) (166,737) (173,443)
Contribution to plan assets (99,000) (124,000) (33,000)
Retirement benefits paid directly to employees (50,721) (36,036) (36,276)
Net cash provided by operating activities 3,180,876 759,459 3,380,316
Proceeds from disposal of property and equipment 8,514 2,667 6,347
Additions to:
Bottles and cases (1,607,614) (771,168) (1,472,332)
Property, plant and equipment (867,771) (1,205,087) (2,215,112)
Intangibles (264,053) - -
Decrease (increase) in other noncurrent assets (14,108) 75,996 (11,737)
Net cash used in investing activities (2,745,032) (1,897,592) (3,692,834)
Proceeds from:
Short-term debt 11,100,000 16,250,000 18,200,000
Long-term debt 1,000,000 4,300,000 -
Repayments of:
Short-term debt (10,850,000) (18,350,000) (16,700,000)
Long-term debt (787,500) (600,000) (600,000)
Cash dividends paid (162,526) (162,526) (254,870)
Interest paid (347,988) (279,345) (154,308)
Debt issuance cost 7,500 30,250 -
Payments of lease liability (232,033) - -
Net cash provided by (used in) financing activities (272,547) 1,188,379 490,822
NET INCREASE IN CASH 163,297 50,246 178,304
CASH AT BEGINNING OF YEAR 548,598 498,352 320,048
CASH AT END OF YEAR 711,895 548,598 498,352
The Consolidated Interim Financial Statements for the periods as of and for the quarters ending 31 March 2019 and 2020 were obtained from
the public disclosures of PIP to the PSE and the SEC. Unicapital, Inc. did not verify the accuracy or the completeness of the information
contained in the unaudited Financial Statements.

GROSS SALES 8,785,451 9,372,153
NET SALES 7,701,115 8,288,053
GROSS PROFIT 1,264,362 1,701,226

ASSETS
Current Assets
Cash 967,499 521,647
Receivables - net 2,427,553 2,137,282
Inventories 4,335,291 4,634,064
9,193,014 8,622,927
Noncurrent Assets
TOTAL ASSETS 26,177,682 25,994,634
Current Liabilities
Short-term debt 1,687,500 1,650,000
Equity
Share capital 1,751,435 1,751,435

Total Equity 8,980,122 9,220,551

Profit (loss) before tax (247,609) 98,753
Adjustments for:
Depreciation and amortization 685,995 678,987
Interest expense 82,726 110,085
Retirement cost 29,582 27,007
Impairment losses (reversal of impairment losses) on receivables, inventories,
bottles and cases, machinery and equipment and others 10,111 62,439
Loss on sale of property and equipment 334 3,613
Equity in net earnings of associates (6,855) (6,404)
Interest income (1,189) (1,223)
Operating profit before working capital changes 553,095 973,257
Changes in operating assets and liabilities:
Receivables 384,696 400,980
Inventories (427,487) 347,027
Prepaid expenses and other current assets (185,871) (118,730)
Increase (decrease) in accounts payable and accrued expenses 1,198,208 (1,348,979)
Cash generated from (absorbed by) operations 1,587,965 257,710
Interest received 6,332 1,208
Income taxes paid (85,221) (7,335)
Contribution to plan assets - (8,069)
Retirement benefits directly paid by the Company - (3,251)
Net cash provided by (used in) operating activities 1,509,076 240,263
Proceeds from disposal of property and equipment 539 660
Additions to:
Property, Plant and Equipment (1,081,916) (233,290)
Bottles and cases (347,222) (460,870)
Decrease in other current assets 10,628 18,534

Net cash used in investing activities (1,417,971) (674,966)
Proceeds from availments of:
Short-term debt 437,500 3,200,000
Long-term debt 526 -
Payments of:
Short-term debt - (2,550,000)
Long-term debt (98,385) (150,000)
Principal payments of lease liability (87,377) -
Interest paid (86,765) (92,248)
Net cash provided by financing activities 165,499 407,752
NET DECREASE IN CASH 256,604 (26,951)
CASH AT BEGINNING OF PERIOD 711,895 548,598
CASH AT END OF PERIOD 968,499 521,647

ANNEX II | HISTORICAL STOCK PRICE (PSE: PIP)

08/04/20 - - 06/18/20 - - 04/30/20 1.91 128,000
08/03/20 - - 06/17/20 1.70 743,000 04/29/20 1.91 644,000
07/30/20 - - 06/16/20 1.69 36,000 04/28/20 1.91 501,000
07/29/20 - - 06/15/20 1.69 245,000 04/27/20 1.91 3,229,000
07/28/20 - - 06/11/20 1.69 506,000 04/24/20 1.91 3,120,000
07/27/20 - - 06/10/20 1.76 36,000 04/23/20 1.91 3,057,000
07/24/20 - - 06/09/20 1.84 87,000 04/22/20 1.81 1,767,000
07/23/20 - - 06/08/20 1.84 30,000 04/21/20 1.84 1,109,000
07/22/20 - - 06/05/20 1.86 27,000 04/20/20 1.81 1,969,000
07/21/20 - - 06/04/20 1.91 6,000 04/17/20 1.78 816,000
07/20/20 - - 06/03/20 1.91 616,000 04/16/20 1.80 333,000
07/17/20 - - 06/02/20 1.91 174,000 04/15/20 1.80 783,000
07/16/20 - - 06/01/20 1.88 58,000 04/14/20 1.80 407,000
07/15/20 - - 05/29/20 1.89 947,000 04/13/20 1.81 658,000
07/14/20 - - 05/28/20 1.90 145,000 04/08/20 1.80 578,000
07/13/20 - - 05/27/20 1.90 108,000 04/07/20 1.80 191,000
07/10/20 - - 05/26/20 1.91 265,000 04/06/20 1.80 379,000
07/09/20 - - 05/22/20 1.92 297,000 04/03/20 1.79 131,000
07/08/20 - - 05/21/20 1.92 304,000 04/02/20 1.81 396,000
07/07/20 - - 05/20/20 1.91 72,000 04/01/20 1.80 5,803,000
07/06/20 - - 05/19/20 1.91 87,000 03/31/20 1.80 2,259,000
07/03/20 - - 05/18/20 1.90 258,000 03/30/20 1.73 1,873,000
07/02/20 - - 05/15/20 1.91 1,025,000 03/27/20 1.30 150,000
07/01/20 - - 05/14/20 1.91 39,000 03/26/20 1.40 368,000
06/30/20 - - 05/13/20 1.92 206,000 03/25/20 1.35 81,000
06/29/20 - - 05/12/20 1.92 125,000 03/24/20 1.34 53,000
06/26/20 - - 05/11/20 1.92 1,003,000 03/23/20 1.34 29,000
06/25/20 - - 05/08/20 1.91 930,000 03/20/20 1.30 455,000
06/24/20 - - 05/07/20 1.91 3,188,000 03/19/20 1.38 64,000
06/23/20 - - 05/06/20 1.91 121,000 03/16/20 1.51 78,000
06/22/20 - - 05/05/20 1.91 46,000 03/13/20 1.50 270,000
06/19/20 - - 05/04/20 1.91 316,000 03/12/20 1.49 88,000

03/11/20 1.60 380,000 01/23/20 1.85 430,000 11/29/19 1.32 2,741,000
03/10/20 1.60 682,000 01/22/20 1.60 124,000 11/28/19 1.38 2,960,000
03/09/20 1.66 923,000 01/21/20 1.59 151,000 11/27/19 1.39 2,752,000
03/06/20 1.81 203,000 01/20/20 1.64 255,000 11/26/19 1.36 5,807,000
03/05/20 1.82 174,000 01/17/20 1.61 507,000 11/25/19 1.27 7,550,000
03/04/20 1.82 379,000 01/16/20 1.70 991,000 11/22/19 1.41 2,379,000
03/03/20 1.83 620,000 01/15/20 1.84 710,000 11/21/19 1.40 3,027,000
03/02/20 1.85 2,658,000 01/14/20 1.91 559,000 11/20/19 1.45 1,696,000
02/28/20 1.85 2,081,000 01/10/20 1.92 3,691,000 11/19/19 1.45 5,944,000
02/27/20 1.85 1,925,000 01/09/20 1.92 2,067,000 11/18/19 1.45 4,497,000
02/26/20 1.79 450,000 01/08/20 1.92 1,496,000 11/15/19 1.45 13,563,000
02/24/20 1.82 674,000 01/07/20 1.91 1,822,000 11/14/19 1.53 27,188,000
02/21/20 1.83 110,000 01/06/20 1.91 2,914,000 11/13/19 1.79 6,240,000
02/20/20 1.83 3,589,000 01/03/20 1.91 7,640,000 11/12/19 1.76 4,957,000
02/19/20 1.83 152,000 01/02/20 1.91 23,669,000 11/11/19 1.68 910,000
02/18/20 1.84 430,000 12/27/19 1.92 12,747,000 11/08/19 1.67 3,777,000
02/17/20 1.83 685,000 12/26/19 1.91 1,886,000 11/07/19 1.70 2,895,000
02/14/20 1.83 637,000 12/23/19 1.91 1,949,000 11/06/19 1.69 3,003,000
02/13/20 1.84 360,000 12/20/19 1.91 5,555,000 11/05/19 1.71 1,766,000
02/12/20 1.84 1,077,000 12/19/19 1.91 5,197,000 11/04/19 1.70 1,489,000
02/11/20 1.84 174,000 12/18/19 1.91 6,876,000 10/31/19 1.70 955,000
02/10/20 1.84 1,570,000 12/17/19 1.91 12,113,000 10/30/19 1.72 751,000
02/07/20 1.82 864,000 12/16/19 1.90 4,338,000 10/29/19 1.73 1,699,000
02/06/20 1.80 3,978,000 12/13/19 1.90 32,354,000 10/28/19 1.73 2,284,000
02/05/20 1.81 2,610,000 12/12/19 1.88 57,076,000 10/25/19 1.73 1,226,000
02/04/20 1.86 159,000 12/11/19 1.40 - 10/24/19 1.72 2,878,000
02/03/20 1.86 81,000 12/10/19 1.40 9,007,000 10/23/19 1.75 2,627,000
01/31/20 1.85 390,000 12/09/19 1.38 4,751,000 10/22/19 1.78 3,102,000
01/30/20 1.82 51,000 12/06/19 1.35 4,687,000 10/21/19 1.85 4,734,000
01/29/20 1.83 40,000 12/05/19 1.35 3,820,000 10/18/19 1.85 8,046,000
01/28/20 1.82 147,000 12/04/19 1.29 4,349,000 10/17/19 1.83 8,966,000
01/27/20 1.82 140,000 12/03/19 1.33 323,000 10/16/19 1.73 1,938,000
01/24/20 1.85 787,000 12/02/19 1.37 1,653,000 10/15/19 1.75 1,681,000

10/14/19 1.78 4,158,000 08/28/19 1.73 6,581,000 07/09/19 1.79 14,782,000
10/11/19 1.70 1,858,000 08/27/19 1.79 11,100,000 07/08/19 1.86 7,993,000
10/10/19 1.68 937,000 08/23/19 1.81 14,714,000 07/05/19 1.91 14,474,000
10/09/19 1.69 1,346,000 08/22/19 1.75 44,083,000 07/04/19 1.92 17,142,000
10/08/19 1.70 5,114,000 08/20/19 1.89 16,323,000 07/03/19 1.80 13,105,000
10/07/19 1.67 1,755,000 08/19/19 1.90 17,139,000 07/02/19 1.84 10,325,000
10/04/19 1.68 6,569,000 08/16/19 1.92 44,934,000 07/01/19 1.80 13,693,000
10/03/19 1.60 10,402,000 08/15/19 1.80 15,663,000 06/28/19 1.82 26,660,000
10/02/19 1.72 1,410,000 08/14/19 1.83 12,146,000 06/27/19 1.70 28,599,000
10/01/19 1.73 7,472,000 08/13/19 1.68 11,811,000 06/26/19 1.53 8,629,000
09/30/19 1.69 20,098,000 08/09/19 1.80 1,320,000 06/25/19 1.47 8,022,000
09/27/19 1.72 31,090,000 08/08/19 1.83 3,491,000 06/24/19 1.40 2,116,000
09/26/19 1.93 3,676,000 08/07/19 1.75 7,431,000 06/21/19 1.40 6,574,000
09/25/19 1.94 29,221,000 08/06/19 1.81 8,527,000 06/20/19 1.40 9,463,000
09/24/19 2.05 2,901,000 08/05/19 1.85 17,036,000 06/19/19 1.33 7,497,000
09/23/19 2.03 5,647,000 08/02/19 1.88 13,884,000 06/18/19 1.34 5,930,000
09/20/19 2.08 2,135,000 08/01/19 1.75 1,178,000 06/17/19 1.31 3,684,000
09/19/19 2.09 2,889,000 07/31/19 1.77 4,786,000 06/14/19 1.32 28,476,000
09/18/19 2.10 3,109,000 07/30/19 1.75 2,341,000 06/13/19 1.27 2,647,000
09/17/19 2.05 8,977,000 07/29/19 1.72 4,690,000 06/11/19 1.28 16,391,000
09/16/19 2.05 13,943,000 07/26/19 1.67 2,747,000 06/10/19 1.23 402,000
09/13/19 2.15 6,175,000 07/25/19 1.67 6,721,000 06/07/19 1.23 1,064,000
09/12/19 2.15 8,011,000 07/24/19 1.73 2,619,000 06/06/19 1.23 1,645,000
09/11/19 2.08 6,114,000 07/23/19 1.75 4,891,000 06/04/19 1.24 2,989,000
09/10/19 2.07 8,453,000 07/22/19 1.77 2,876,000 06/03/19 1.24 4,540,000
09/09/19 2.05 23,481,000 07/19/19 1.78 3,270,000 05/31/19 1.23 2,884,000
09/06/19 2.11 19,456,000 07/18/19 1.73 7,162,000 05/30/19 1.23 3,206,000
09/05/19 2.12 24,801,000 07/17/19 1.79 7,412,000 05/29/19 1.24 793,000
09/04/19 2.08 78,847,000 07/16/19 1.85 10,722,000 05/28/19 1.24 1,312,000
09/03/19 1.92 11,308,000 07/15/19 1.77 3,341,000 05/27/19 1.24 2,395,000
09/02/19 1.92 12,311,000 07/12/19 1.77 6,123,000 05/24/19 1.30 1,822,000
08/30/19 1.90 27,150,000 07/11/19 1.80 7,593,000 05/23/19 1.31 4,417,000
08/29/19 1.78 6,903,000 07/10/19 1.71 20,195,000 05/22/19 1.28 1,500,000

05/21/19 1.27 1,339,000 03/28/19 1.42 9,901,000 02/08/19 1.51 34,813,000
05/20/19 1.28 2,128,000 03/27/19 1.38 4,860,000 02/07/19 1.40 6,236,000
05/17/19 1.24 1,679,000 03/26/19 1.40 1,656,000 02/06/19 1.40 7,398,000
05/16/19 1.22 2,478,000 03/25/19 1.39 5,909,000 02/04/19 1.38 3,387,000
05/15/19 1.23 7,049,000 03/22/19 1.41 3,212,000 02/01/19 1.40 6,703,000
05/14/19 1.15 5,680,000 03/21/19 1.40 6,578,000 01/31/19 1.34 5,744,000
05/10/19 1.20 5,910,000 03/20/19 1.41 6,040,000 01/30/19 1.36 6,552,000
05/09/19 1.23 653,000 03/19/19 1.40 1,183,000 01/29/19 1.38 4,747,000
05/08/19 1.24 731,000 03/18/19 1.40 799,000 01/28/19 1.39 3,332,000
05/07/19 1.25 985,000 03/15/19 1.41 3,764,000 01/25/19 1.40 7,150,000
05/06/19 1.24 1,271,000 03/14/19 1.39 1,168,000 01/24/19 1.40 4,326,000
05/03/19 1.27 1,884,000 03/13/19 1.40 3,902,000 01/23/19 1.40 9,046,000
05/02/19 1.31 1,607,000 03/12/19 1.37 4,124,000 01/22/19 1.43 9,533,000
04/30/19 1.29 3,566,000 03/11/19 1.38 1,549,000 01/21/19 1.40 10,117,000
04/29/19 1.25 1,500,000 03/08/19 1.36 13,391,000 01/18/19 1.38 5,876,000
04/26/19 1.24 1,516,000 03/07/19 1.40 7,572,000 01/17/19 1.35 13,588,000
04/25/19 1.25 733,000 03/06/19 1.40 6,796,000 01/16/19 1.42 4,025,000
04/24/19 1.24 1,882,000 03/05/19 1.38 5,483,000 01/15/19 1.45 7,244,000
04/23/19 1.25 1,039,000 03/04/19 1.38 6,415,000 01/14/19 1.44 6,630,000
04/22/19 1.24 801,000 03/01/19 1.42 9,221,000 01/11/19 1.47 8,387,000
04/17/19 1.25 1,025,000 02/28/19 1.41 4,253,000 01/10/19 1.49 37,268,000
04/16/19 1.25 4,730,000 02/27/19 1.43 12,995,000 01/09/19 1.50 27,910,000
04/15/19 1.26 36,223,000 02/26/19 1.40 10,878,000 01/08/19 1.38 3,438,000
04/12/19 1.40 2,483,000 02/22/19 1.43 16,657,000 01/07/19 1.40 16,273,000
04/11/19 1.39 1,493,000 02/21/19 1.38 3,246,000 01/04/19 1.37 9,101,000
04/10/19 1.41 4,417,000 02/20/19 1.37 3,018,000 01/03/19 1.34 1,508,000
04/08/19 1.38 3,428,000 02/19/19 1.37 2,044,000 01/02/19 1.34 1,299,000
04/05/19 1.40 10,087,000 02/18/19 1.38 2,492,000 12/28/18 1.34 1,052,000
04/04/19 1.43 10,585,000 02/15/19 1.36 4,436,000 12/27/18 1.34 2,425,000
04/03/19 1.45 16,152,000 02/14/19 1.40 5,540,000 12/26/18 1.38 866,000
04/02/19 1.40 3,889,000 02/13/19 1.38 15,147,000 12/21/18 1.40 3,922,000
04/01/19 1.40 1,248,000 02/12/19 1.42 12,046,000 12/20/18 1.37 1,168,000
03/29/19 1.41 3,761,000 02/11/19 1.46 22,060,000 12/19/18 1.34 2,192,000

12/18/18 1.34 1,676,000 10/29/18 1.70 312,000 09/12/18 1.93 488,000
12/17/18 1.40 4,246,000 10/26/18 1.67 113,000 09/11/18 2.06 367,000
12/14/18 1.40 9,977,000 10/25/18 1.64 8,000 09/10/18 2.10 105,000
12/13/18 1.35 247,000 10/24/18 1.75 43,000 09/07/18 2.08 9,000
12/12/18 1.32 45,000 10/23/18 1.66 3,358,000 09/06/18 2.07 57,000
12/11/18 1.31 553,000 10/22/18 1.70 24,000 09/05/18 2.07 195,000
12/10/18 1.36 1,444,000 10/19/18 1.65 55,000 09/04/18 2.08 8,056,000
12/07/18 1.39 284,000 10/18/18 1.63 147,000 09/03/18 2.07 81,000
12/06/18 1.35 322,000 10/17/18 1.62 204,000 08/31/18 2.06 412,000
12/05/18 1.38 586,000 10/16/18 1.61 1,478,000 08/30/18 2.10 1,195,000
12/04/18 1.37 589,000 10/15/18 1.73 51,000 08/29/18 2.16 75,000
12/03/18 1.38 1,016,000 10/12/18 1.64 58,000 08/28/18 2.15 204,000
11/29/18 1.35 300,000 10/11/18 1.62 245,000 08/24/18 2.18 161,000
11/28/18 1.34 5,000 10/10/18 1.75 8,000 08/23/18 2.19 605,000
11/27/18 1.34 106,000 10/09/18 1.76 29,000 08/22/18 2.19 68,000
11/26/18 1.34 517,000 10/08/18 1.77 90,000 08/20/18 2.16 147,000
11/23/18 1.30 434,000 10/05/18 1.78 5,469,000 08/17/18 2.17 61,000
11/22/18 1.29 1,432,000 10/04/18 1.80 49,000 08/16/18 2.17 102,000
11/21/18 1.36 1,078,000 10/03/18 1.80 53,000 08/15/18 2.17 11,823,000
11/20/18 1.44 197,000 10/02/18 1.80 89,000 08/14/18 2.20 103,000
11/19/18 1.44 308,000 10/01/18 1.81 33,000 08/13/18 2.22 22,000
11/16/18 1.49 226,000 09/28/18 1.80 88,000 08/10/18 2.22 74,000
11/15/18 1.49 791,000 09/27/18 1.79 108,000 08/09/18 2.22 43,000
11/14/18 1.56 21,000 09/26/18 1.88 68,000 08/08/18 2.25 35,000
11/13/18 1.56 31,000 09/25/18 1.75 77,000 08/07/18 2.23 73,000
11/12/18 1.57 100,000 09/24/18 1.75 79,000 08/06/18 2.21 195,000
11/09/18 1.57 36,000 09/21/18 1.66 943,000 08/03/18 2.26 231,000
11/08/18 1.52 807,000 09/20/18 1.80 237,000 08/02/18 2.35 261,000
11/07/18 1.59 413,000 09/19/18 1.90 254,000 08/01/18 2.27 31,943,000
11/06/18 1.62 93,000 09/18/18 1.83 46,000 07/31/18 2.25 210,000
11/05/18 1.65 289,000 09/17/18 1.90 1,120,000 07/30/18 2.21 38,000
10/31/18 1.65 345,000 09/14/18 1.90 178,000 07/27/18 2.25 60,000
10/30/18 1.70 261,000 09/13/18 1.92 380,000 07/26/18 2.24 45,000

07/25/18 2.25 6,000 07/11/18 2.24 291,000 06/27/18 2.22 1,875,000
07/24/18 2.27 2,000 07/10/18 2.26 262,000 06/26/18 2.25 139,000
07/23/18 2.21 7,000 07/09/18 2.28 542,000 06/25/18 2.25 177,000
07/20/18 2.30 15,000 07/06/18 2.25 1,188,000 06/22/18 2.20 13,946,000
07/19/18 2.25 2,892,000 07/05/18 2.26 520,000 06/21/18 2.20 56,000
07/18/18 2.25 162,000 07/04/18 2.20 3,043,000 06/20/18 2.28 288,000
07/17/18 2.25 356,000 07/03/18 2.20 1,609,000 06/19/18 2.21 28,000
07/16/18 2.25 12,389,000 07/02/18 2.20 4,349,000 06/18/18 2.21 1,521,000
07/13/18 2.25 571,000 06/29/18 2.22 283,000
07/12/18 2.25 1,208,000 06/28/18 2.20 212,000

ANNEX III | PEER GROUP SELECTION

Selected Financial Information
Comparable Public Market Enterprise Net Profit Total Debt/Enterprise
Company Stock Exchange Fiscal Period Capitalization Value Revenue Margin Value Return on Equity
Ceylon Cold Stores Plc
CSE (Sri Lanka) 06/30/2020 16,861 22,221 18,079 2.1% 0.3 9.0%
CCS.N0000-LK
Chuong Duong
Beverages JSC HSX (Vietnam) 06/30/2020 414 94 443 4.8% 0.2 4.9%
SCD-VN
Fraser & Neave
Holdings Bhd. KLSE (Malaysia) 06/30/2020 138,163 135,312 48,616 9.8% 0.01 15.4%
3689-MY
Haad Thip Public Co.
Ltd. SET (Thailand) 03/31/2020 5,606 6,117 11,061 5.3% 0.1 12.3%
HTC-TH
Macay Holdings, Inc.
PSE (Philippines) 03/31/2020 7,586 4,195 10,078 1.7% 0.1 2.2%
MACAY-PH
SermSuk Public Co. Ltd.
SET (Thailand) 06/30/2020 13,724 12,031 18,096 (1.5)% 0 -1.9%
SSC-TH
Values in PhP millions as of the fiscal periods indicated
Business Description
Comparable Public Company Business Description
Ceylon Cold Stores Plc Ceylon Cold Stores Plc engages in the manufacture and sale of carbonated soft drinks and frozen
CCS.N0000-LK confectionery food products. The firm operates its business under the Elephant House and IMORICH brands.
Its products include energy drinks, fruit flavoured tea, isotonic drinks, and flavoured fruit drinks. The company
was founded in 1866 and is headquartered in Colombo, Sri Lanka.
Chuong Duong Beverages JSC Chuong Duong Beverages JSC engages in the manufacture and sales of beverage products. It also offers raw
SCD-VN materials, packaging, equipment, and technology in the beverage industry. The company was founded in
1952 and is headquartered in Ho Chi Minh City, Vietnam.
Fraser & Neave Holdings Bhd. Fraser & Neave Holdings Bhd. engages in the manufacture, sale, and marketing of beverages and dairy
3689-MY products. The firm offers isotonic drinks; water and energy drinks, carbonated drinks; tea; soya; Asian soft
drinks; juices; condensed and evaporated milk; and liquid milk. It operates through the following segments:

Food and Beverages (F&B) Malaysia; F&B Thailand; Property; and Others. The company was founded by John
Fraser and David Chalmers Neave in 1883 and is headquartered in Kuala Lumpur, Malaysia.
Haad Thip Public Co. Ltd. Haad Thip Public Co. Ltd. engages in the manufacture and distribution of soft drinks. Its brands include Coca-
HTC-TH Cola, Sprite, Fanta, Schweppes, Minute Maid, Namthip, and Aquarius. The company was founded in 1969 and
is headquartered in Songkhla, Thailand.
Macay Holdings, Inc. Macay Holdings, Inc. engages in the manufacture and distribution of refreshment drinks. Its products include
MACAY-PH fruit, soft drinks, and root beer. The company was founded on October 16, 1930 and is headquartered in
Makati City, Philippines.
SermSuk Public Co. Ltd. SermSuk Public Co. Ltd. engages in the manufacture and distribution of beverages. It operates through the
SSC-TH following business segments: Carbonated Soft Drink and Non-Carbonated Soft Drink. The Carbonated Soft
Drink segment involves in the production and distribution of soft drinks, sport drink, and soda. The Non-
Carbonated Soft Drink segment includes the production and sale of drinking water, energy drink, tea, and
other beverages. The company was founded on April 18, 1952 and is headquartered in Bangkok, Thailand.

Annex IV Pepsi-Cola Products Philippines, Inc. 4 September 2020
ANNEX IV | FINANCIAL PROJECTIONS

Unit: Php 1 million
2018 2019 2020 2021 2022 2023 2024 2025
Net sales 33,394 35,184 37,647 40,282 43,102 46,119 49,347 52,801
Net sales CAGR 5.4 7.0 7.0 7.0 7.0 7.0 7.0
Cost of Goods Sold 27,685 28,370 30,072 31,877 33,789 35,817 37,966 40,244
% of COGS 82.9 80.6 79.9 79.1 78.4 77.7 76.9 76.2
Gross Profit 5,709 6,814 7,574 8,405 9,312 10,302 11,381 12,558
% of Gross Profit 17.1 19.4 20.1 20.9 21.6 22.3 23.1 23.8
Operating Expenses 5,742 5,788 6,077 6,381 6,700 7,035 7,387 7,756
% of Operating Expenses 17.2 16.4 16.1 15.8 15.5 15.3 15.0 14.7
Operating Profit -33 1,026 1,497 2,024 2,612 3,267 3,995 4,802
% of Operating Profit (0.1) 2.9 4.0 5.0 6.1 7.1 8.1 9.1
Other Income -103 -488 -100 -100 -100 -100 -100 -100
EBIT -136 538 1,397 1,924 2,512 3,167 3,895 4,702
Depreciation 2,602 2,775 2,886 3,001 3,121 3,246 3,376 3,511
CAPEX 1,976 2,871 2,900 2,900 2,900 2,900 2,900 2,900
Net Working Capital 200 245 249 257 269 300 300

Annex V Pepsi-Cola Products Philippines, Inc. 4 September 2020
ANNEX V | FREE CASH FLOW TO EQUITY

In PhP Millions March 2020 December 2019 December 2018 December 2017
Funds from operations 2,972.50 3,459.94 2,382.33 3,986.44
Extraordinary items 0 0 0 0
Changes in working capital 1,134.69 (627.05) (1,902.21) (760.43)
Net cash from operating activities 4,107.18 2,832.89 480.11 3,226.01
Less: Capital expenditure for fixed assets 3,210.36 2,475.39 1,976.26 3,687.44
Free cash flow to the firm 896.82 357.50 (1,496.14) (461.44)
Add: Net debt issued 302.1 462.5 1,600 900
Free cash flow to equity 1,198.92 820 103.86 438.56

ANNEX VI | MANDATE LETTER



Annex VII Pepsi-Cola Products Philippines, Inc. 4 September 2020
ANNEX VII | PSE ACCREDITATION

3 / F Majalco Building, Benavidez corner Trasierra Streets, Legaspi Village, Makati City, Philippines 1229
Telephone: (+632) 88920991; Fax (+632) 88182127

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Annex A (Corporate Secretary's Certificate

containing the resolutions passed

PEPSI-COLA PRODUCTS PHILIPPINES, INC.

Attention: MR. FREDERICK DY ONG

MR. YOUNG DUK KANG

ATTY. KRISTINE N.L. EVANGELISTA

Re: Tender Offer by LOTTE CHILSUNG BEVERAGE CO. LTD.

Ladies and Gentlemen:

Very truly yours,

LOTTE CHILSUNG BEVERAGE CO. LTD.

LUIS MANUEL L. GATMAITAN

MOISES RONETTE C. COLOBONG

Check the appropriate box:

Items Amended by the Filing

1. Exact Name of Subject Company as Specified in its Charter:

PEPSI-COLA PRODUCTS PHILIPPINES, INC.

(a) Address of Principal Offices

Km. 29 National Road, Tunasan, Muntinlupa City

Postal Code: 1773

(b) SEC Identification Number 160968

(c) (SEC Use Only)

(d) BIR Tax Identification Number 000-168-541

LOTTE CHILSUNG BEVERAGE CO. LTD.

(a) Address of Bidder

Postal Code 138-727

3. Title or Class of Securities Subject to Tender Offer

(3) Accepted for purchase by the Bidder;

(1) Stock transaction tax of 0.6% of the value of the transaction;

(3) PSE transaction fee of 0.005% of the value of the transaction;

(4) SEC Fee of 0.005% of the value of the transaction; and

(collectively, the “Selling Charges”).

For Certificated or Scrip Shareholders

For Certificated or Scripless Shareholders

Tender Offer Agent

First Metro Securities Brokerage Corporation

Securities Settlement Unit

Stock Transfer Agent

Stock Transfer Service Incorporated

Closing Price per Common Share

Item 2. Identity and Background

(a) Persons Controlling the Bidder

Name Citizenship Position Business Address

Name Citizenship Position Business Address

(c) Key Officers of the Bidder

Name Citizenship Position Business Address

(d) Involvement in Legal Proceedings

a) Purpose of the Tender Offer

b) Plans or Proposals of the Bidder

(i) Listed Status of the Company

• Capital Gains Tax

Not over ₱100,000 ..................................................................................... 5%

• Documentary Stamp Tax

(ii) Other Plans and Proposals of the Company

Item 4. Interest in Securities of the Issuer

Item 6. Materials to be Filed as Exhibits

Exhibit A Terms of the Tender Offer

Exhibit B Fairness Opinion dated September 4, 2020 issued by Unicapital, Inc.

Exhibit D Application to Tender Offer Shares with the following annexes:

Annex A Terms of the Tender Offer