Philippine Seven Corporation · PSE:SEVN
Philippine Seven — Q3 2020 Earnings Presentation
28 slides from Philippine Seven's earnings presentation, March 2021
Slide 1: Q3 2020 Investor Briefing
PHILIPPINE SEVEN CORPORATION (SEVN) Q3 2020 Investor Briefing www.7-eleven.com.ph [email protected]
Slide 2: Contents
Contents • Company update • CEO’s report • Financial performance 9M YTD 2020 • COVID response
Slide 3: Company Update
Company Update w PHILIPPINE SEVEN CORPORATION
Slide 4: A Global Brand
A Global Brand Norway: 155 Sweden: 86 South Korea: 10,298 Canada: 630 United States: 9,917 China: 2,615 Denmark: 173 Japan: 20,884 Taiwan: 5,852 Mexico: 1,809 Vietnam: 45 UAE: 11 71,000+ Philippines: 2,942 STORES Thailand: 12,145 WORLDWIDE Singapore: 406 Malaysia: 2,369 Australia: 707 *Store Counts
Slide 5: Global Recognition
Global Recognition 3 ti Pictured left to right: Jackie Lai, Marketing Director 7-Eleven Philippines; Kazuki Furuya, Chairman of SEJ; Richard Lee, Vice President Marketing & Operations 7-Eleven Philippines; Armi Cagasan, Division Head of Strategic Merchandising, 7-Eleven Philippines Global licensor 7
Slide 6: SEVN Share Information
SEVN Share Information Price (Feb. 26, 2021) Php 98.00 Hi/Low (1Y) Php 98.00 – Php 155.00 Free Float 33.1% or 250.5 million shares Outstanding Shares 756.4 million Market Capitalization USD 1.52 billion Listing Date Feb. 4, 1998 Dividend 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 20
Slide 7: Store Network – FY 2020
Store Network – FY 2020 7-Eleven By Location Store Count % Jan. 1 Net additions Dec. 31 Metro Manila 1,006 4 1,010 34% Luzon-ex MM 1,172 79 1,251 42% Visayas 411 21 432 14% Mindanao 275 10 285 10% Total 2,864 114 2,978 100% As of Dec. 31, 2020 All Store Count 2,978 472 74 1,012 62 100 SSSG -18% ~-40
Slide 8: CEO's Report
CEO’s Report 1-2] PHILIPPINE SEVEN CORPORATION
Slide 9: Operational Metrics
Operational Metrics % Change PSD Sales -19% Ave CC -41% Ave Trans +37% Basket Size +21% Ave Price per Item +11%
Slide 10: Project Background
Project Background In the works since 2018: A. Pricing pilot in an increasing number of Project Alpha = more essentials at lower stores in the outskirts prices in addition to core impulse offerings B. Per-store AI driven planograms in 3 = CVS + Minimart model categories in an increasing number of =
Slide 11: COVID Acceleration
COVID Acceleration 1. Replace seating with shelving (+3 gondolas/store avg?) 2. Obtain 5000 sqm near main DC 3. Roll out new warehouse management system w/ online capability 4. AI planograms for all dry goods categories 5. Procure 1,500 additional recommended essential SKUs 6. Pricing model for 50 e
Slide 12: Fill Rate Issues
Fill Rate Issues ● Some essentials in short supply due to pandemic ● Plant shutdowns during Dec holidays ● Misalignment of incentives: no penalties for short deliveries, but items returnable (who would you allocate scarce supply to?) ● Last minute changes in planograms due to late and unexpectedly a
Slide 13: Rollout Issues: Speed Has A Price
R O L L O U T I S S U E S 12/5 : Speed Has A Price ● 25% essentials supplier fill rate = empty shelves ● Errors on shelf & product dimensions = confusion ● Not all 2,000 displaced SKUs (2M pcs) returned by stores ● Underperformance of 5% vs non-Alpha stores?
Slide 14: The Fix: 1/15 - 3/15
The Fix: 1/15 - 3/15 CPFR+ PUSH+ ● CPFR: suppliers input reserved stock ● PUSH: weekly push replenishment for committed according to forecasted existing items (stores count rather than demand order, minimart SOP) ● + : insufficient commitment = risk shelf ● + : New items pushed down when old space c
Slide 15: Online Grocery: cliqqgrocery.com
O N L I N E G R O C E R Y : cliqqgrocery.com ● Unit economics combine DC fulfillment and in-store pickup (scalable on demand; research estimates Ocado at scale +1500bp operating advantage vs Instacart model) ● Value proposition: Supermarket prices, 12 hour lead time, no minimum; option for home deli
Slide 16: Other Digital Opportunities
OTHER DIGITAL OPPORTUNITIES ● Payments growth of +48% GMV during pandemic ● Pickup in store for large platform in Q2 (50% of ec packages in taiwan picked up in CVS) ● Payments database of 32M unique customers for credit scoring w permission to contact, wallet for lending; partnered w 2 digital lendi
Slide 17: Financial Performance
Financial Performance w PHILIPPINE SEVEN CORPORATION
Slide 18: Q3 2020 Financial Performance
Q3 2020 Financial Performance System-wide IFRS IFRS sales - P195.6million P1.0 billion P10.3 billion - 193% - 26% - 25% Non-IFRS Non-IFRS Same-store sales - P170.9 million P448.1 million - 25.2% - 154% - 56% SALES NET LOSS EBITDA Q3 Net Income 5 Year Trend 250.0 200.0 150.0 100.0 50.0 - (50.0) (100.
Slide 19: 9M 2020 Financial Performance
9M 2020 Financial Performance System-wide IFRS IFRS sales - P585.3 million P2.9 billion P34.3 billion - 184% - 33% - 16% Non-IFRS Non-IFRS Same-store sales - P291.4 million P1.5 billion - 16.1% - 126% - 54% SALES NET LOSS EBITDA 9M Net Income 5 Year Trend 1,000.0 800.0 600.0 400.0 200.0 - (200.0) (4
Slide 20: Income Statement and Cash Flow Highlights
Income Statement and Cash Flow Highlights YTD Sep YTD Sep % 3Q20 % 2Q20 vs. 2020 2019 % 3Q20 2Q20 1Q20 vs. 2Q20 1Q20 Systemwide Sales 34,338 40,632 -15.5% 10,291 9,920 14,127 -28.8% -29.8% Revenue from contracts with customers 32,165 38,275 -16.0% 9,899 9,169 13,098 8.0% -24.4% Cost of merchandise s
Slide 21: Balance Sheet Highlights
Balance Sheet Highlights As at September 30, As at December 2020 31, 2019 % Change Cash 4,740 4,625 2.5% Current Assets 12,126 12,703 -4.5% Total Assets 27,699 29,674 -6.7% Loans 2,920 559 422.4% Total Liabilities 20,474 21,636 -5.4% Equity 7,225 8,038 -10.1% BV per Share 9.55 10.63 -10.2%
Slide 22: COVID Response
COVID Response w PHILIPPINE SEVEN CORPORATION
Slide 23: Wider product assortment
Wider product assortment ALSO AVAILABLE: FRY-YOUR-OWN PACKS
Slide 24: Partnership with aggregators
Partnership with aggregators
Slide 25: Launch of franchise support and rental concession efforts
Launch of franchise support and rental concession efforts
Slide 26: Implementation of health and safety standards
Implementation of health and safety standards
Slide 27: Collaboration with government on CSR
Collaboration with government on CSR
Slide 28: Slide 28