Executing the next chapter.
With discipline.

Dear Shareholders,

This is the first time I am writing to you as Group Managing Director of Octopus (APAC) Holdings Limited. I want to use this opportunity to do something that annual report messages rarely do: speak plainly about where we are, how we got here, and what I intend to do about it.

I founded Octopus Distribution Networks in 2011 with a clear conviction: that Singapore was underserved by sophisticated, relationship-driven beverage distribution, and that an operator who truly understood brands — not just logistics — could build something enduring.

Over the 15 years since, I have built ODN into one of Singapore’s leading integrated beverage solutions groups, representing more than 1,500 SKUs from about 200 brands sourced from 50 global brand owners. That journey earned us the Enterprise 50 award in 2019.

It also taught me that this industry rewards patience, precision and the kind of trust-based relationships with brand owners that take years to cultivate and cannot be manufactured overnight.

I bring more than two decades of business experience across Singapore, Malaysia and the broader region. I have built, managed and scaled operations in wholesale distribution, retail and consumer goods. I sit on boards and hold executive roles across multiple jurisdictions. I understand this industry from the inside — from the loading dock to the boardroom of a global brand principal. That accumulated knowledge is now fully directed toward the growth of Octopus (APAC) Holdings.

I am also the Company’s largest shareholder. I say this not as a boast but as a commitment: my personal capital is invested alongside yours, and my reputation is staked on what we build together. I have every reason to get this right.

What we are building

When the Board invited me to take the helm as Group MD, I accepted because I believed — and still do — that the foundation is genuinely strong. The disposal of the legacy food court and eating house businesses, completed in March 2026, was the right call. Those operations were structurally challenged in a way that was difficult to fix from within a listed entity. Closing that chapter has freed us to concentrate entirely on what we do best.

Our operating platform today has three distinct but interlocking capabilities. First, ODN: our core distribution engine, servicing retail, on-trade, and wholesale customers with a broad and growing portfolio of alcoholic and non-alcoholic beverages.

Second, Dyspatchr: a specialist distributor with exclusive Singapore rights to a curated selection of premium craft beers, spirits and wines. These products command strong loyalty in the bars, restaurants and boutique venues where consumer taste is shaped and brand premiums are earned.

Third, Tomorrow Brands: our brand incubation arm, designed to identify, develop and commercialise proprietary beverage brands. This is where our ambition extends beyond distribution into brand ownership, which can fundamentally change our earnings profile over time.

The partnership with Osborne, announced in April 2026 and formalised through a five-year distribution mandate alongside a S$5 million equity investment, is the clearest signal yet of our direction.

Osborne — founded in 1772, present in over 70 countries, with a portfolio spanning Carlos I brandy, Nordés gin, Bodegas Montecillo wines, and more — chose us not simply as a logistics provider but as a long-term commercial partner. That is a distinction that matters. It speaks to the quality of our relationships, the breadth of our channel coverage, and the seriousness with which global brand owners now regard this platform.

The questions I hear most from shareholders are the ones that matter most: how do we translate distribution revenue into sustainable profitability, and when?

My answer is that there is no single switch to flip. The pathway involves deepening our brand portfolio, growing volumes across both the on-trade and off-trade channels, building recurring revenue from exclusive mandates, and layering in proprietary brand income as Tomorrow Brands matures. Each of these moves is underway.

No hiding from challenges

I am not going to use this message to paper over difficulties. FP2026 results carried the full costs of building the new platform, including finance costs and depreciation on the acquired businesses, as well as professional fees on the acquisitions and the disposal of the discontinued F&B outlets business. Our focus now is on the operating performance of the continuing business.

The operating environment is not without headwinds. Global spirits volumes face pressure in certain categories as consumers trade down or moderate consumption. Imported beer competition in Singapore is intensifying, driven by a growing roster of regional brands. Costs — freight, duties, warehousing — remain elevated.

I know these challenges intimately, because I have navigated this industry through several cycles. What gives me confidence is not optimism for its own sake but the quality of the brands we represent, the stickiness of our channel relationships, and the operational infrastructure we have built over more than a decade.

What you can expect

I want to set realistic expectations. Profitability is our goal, but building a durable business is not the same as chasing a short-term bottom-line figure. What I commit to is transparency on our progress, disciplined capital allocation, and a clear-eyed focus on the metrics that lead profitability: gross margins per SKU, brand portfolio growth, channel penetration, and exclusive mandate wins.

On the regional front, our ambitions extend beyond Singapore. The Asia-Pacific premium beverage market is growing, and the distribution infrastructure we have built in Singapore is directly transferable — with the right local partnerships — to adjacent markets. This is a medium-term objective, and I will not overpromise the timeline. But the strategic logic is sound, and the groundwork is being laid.

The Grupo Osborne relationship is also more than a distribution contract. It is a template for how we intend to engage with world-class brand owners going forward — as a trusted regional partner with skin in the game on both sides, capable of growing their brands in Asia-Pacific in ways that a commodity distributor cannot.

In closing

I am proud of what the team has built, and I am clear-eyed about what remains to be done. Turning this Group to profitability will require sustained effort, disciplined execution and the continued trust of our shareholders. I am committed to earning that trust — not through words, but through results.

Thank you for your continued support. I look forward to seeing you in our upcoming AGM.

Dato Elaine Teh Chooi Peng
Group Managing Director and Executive Director