Philippine Seven Corporation · PSE:SEVN

Philippine Seven — FY2018 Earnings Presentation

19 slides from Philippine Seven's earnings presentation, 2019

1. Slide 1: Investor Briefing Q4 and FY 2018

   Philippine Seven Corpora/on (SEVN) INVESTOR BRIEFING Q4 and FY 2018 7th Floor The Columbia Tower, Or4gas Avenue, Mandaluyong City 1550 Email: [email protected]

2. Slide 2: A Global Brand

   A Global Brand The World’s Largest Retailer: a. more than 67,480 Stores (as of Dec. 31, 2018) b. Philippines ranked 6th out of 26 countries and territories Norway SERVING OVER 60M Sweden Canada Denmark GUESTS United States China South Korea Japan DAILY Mexico Hong Kong Taiwan Vietnam 2017 Thailand M

3. Slide 3: PSC History at a Glance

   PSC History at a Glance 1982 PSC was established 2007 PhilSeven Foundation was established 1984 Opened first store 2010 Achieved 500th Store Milestone Opened 711th Store and entered Visayas 1996 Reached 100th Store Mark 2012 Market via Cebu PSC launches its IPO; Opened first 1998 2013 Surpassed 1,00

4. Slide 4: Shareholding Structure

   Shareholding Structure Present Agus Development Corp. 3% Shareholding Structure Others-Foreign 15% Others-Filipino 6% Progressive Development Corp. President Chain Store 1% (Labuan) Holdings, Ltd. Asian Holdings Corp. As of December 31, 2018 % ownership 6% 52% President Chain Store (Labuan) Holdings

5. Slide 5: SEVN Share Information

   SEVN Share Informa/on Price (Dec. 31, 2018) Php 113.00 Hi/Low (YTD) Php 100.00 – Php 145.00 Free Float 33.1% Outstanding Shares 756.42 million Market Capitaliza4on USD 1.63 billion Dividend 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Payment Stock 0.10 0.10 0.05 0.15 0.15 0.15 - - - 0.65

6. Slide 6: Store Network: FY 2018

   Store Network: FY 2018 7-Eleven By Loca/on Store Count % Jan. 1 Net addi4ons Dec. 31 Metro Manila 879 59 938 38% Luzon-ex MM 923 104 1,027 40% Visayas 313 52 365 14% Mindanao 170 50 220 8% Total 2,285 265 2,550 100% As of Dec. 31, 2018 + 265 stores vs. 2017 All Store Count 2,550 499 70 526 25 0 SSSG

7. Slide 7: Q4 2018 Financial Highlights

   Q4 2018 Financial Highlights 2017 2018 % change 10,351.5 Sales 13,004.9 25.6 669.6 Net income 796.4 18.9 993.7 EBIT 1,185.4 19.3 (Php million) Q4 Net Income 5 Year Trend 1,000.0 800.0 600.0 400.0 200.0 - 2014 2015 2016 2017 2018 Q4 405.0 492.5 532.1 669.6 796.4

8. Slide 8: FY 2018 Financial Highlights

   FY 2018 Financial Highlights 2017 2018 % change 37,530.8 Sales 46,128.7 22.9 1,317.9 Net income 1,531.8 16.2 1,956.0 EBIT 2,272.7 16.2 (Php million) Full Year Net Income 5 Year Trend 2,000.0 1,500.0 1,000.0 500.0 - 2014 2015 2016 2017 2018 FY 873.3 1,008.0 1,175.5 1,317.9 1,531.8

9. Slide 9: SSSG surged 11.7% in Q4 to bring FY performance to +8.8%

   SSSG surged 11.7% in Q4 to bring FY performance to +8.8%, the highest in 5 years Systemwide sales (in millions) Store count SSSG % 50,000.0 46,128.7 3,000 14.0% 12.9% 45,000.0 2,550 2,550 11.7% 2,442 12.0% 2,500 2,329 2,386 40,000.0 37,530.8 2,285 2,285 2,172 2,087 10.0% 35,000.0 2,031 8.8% 2,000 7.

10. Slide 10: Consolidated Income Statements

    Consolidated Income Statements FULL YEAR ( in million Pesos except EPS) 2018 2017 2016 % change INCOME Revenue from contracts with customers P43,770.5 P- P- Revenue from merchandise sales - 32,088.4 28,357.3 Franchise revenue - 3,176.7 2,838.3 Marke4ng income - 1,252.6 954.2 Commission income - 126.

11. Slide 11: FY 2018 Financial Highlights

    FY 2018 Financial Highlights 20,000 Balance Sheet and Cash Flow As at Dec. 31, % (in Php Million except Book Value per Share) 2018 change 18,000 16,000 Total Assets 17,402.6 21.2% Current Assets 8,988.6 39.4% 14,000 Non-current Assets 8,414.0 6.4% 12,000 Total Assets Current Liabili4es 9,252.7 30.1%

12. Slide 12: FY 2018 Selected Financial Ratios

    FY 2018 Selected Financial Ra/o Selected Financial Ra/o 2018 2017 EPS 2.50 Liquidity and Leverage Ratio: 2.00 Current Ratio (x) 0.97 0.91 1.50 Net Debt to Equity (%) -27.5 -4.1 1.00 Profitability Ratio: 0.50 Return on Equity (%) 23.4 23.8 - 2014 2015 2016 2017 2018 EBITDA Margin (%) * 9.6 10.1 EPS 1

13. Slide 13: Fresh food and cup drinks contributed 24% of sales

    Fresh food and cup drinks contributed 24%, commission from services exceeded 1.0% of sales for the first /me By Sec/on Services Health & 1% beauty Cigarebes 4% 7% Food service Non-food 20% 4% Cup drinks Grocery and 4% snack food 18% Beer and liquor 10% Ice cream 6% Beverages 26% 1. 7-Eleven food serv

14. Slide 14: Marketing income continued, but lower display fees affected operating margin

    Marke/ng income con/nued, but lower display fees from cigarede manufacturers affected opera/ng margin

15. Slide 15: Update on Digital Strategy

    Update on Digital Strategy 2018 KPIs YTD Ave daily orders (Ecommerce) More than 3,000 Monthly Ac4ve Users (Ecommerce) About 200,000 # of SKUs (Ecommerce) At least 11,000 E-wallet daily ac4ve users per store More than 2 per store E-wallet average transac4on value Around P250.00

16. Slide 16: Store of the Future Concept

    Store of the Future Concept We now have three Customized racks and counters More space for dine-in SOF v. 3.0 stores 1. Ayala the 30th 2. Aseana 3. Monarch Allobed area for e-commerce order and pick-up Power efficient open show case

17. Slide 17: 55% of stores are franchised, dominated by FC1 package

    55% of stores are franchised, dominated by FC1 package FC1 FC2 FC3 Franchise Type Investor Industrial Investment Php 4.0 million Up to 1.0 million Php 300,000 Building Franchisee PSC Merchandise Franchisee Equipment PSC Cash Bond (PGD) - Franchisee Term 5+5 years 66% FC, 40% FC, Varies per GP Split

18. Slide 18: Continued store expansion and support infrastructure

    Con/nued store expansion and support infrastructure 2019 CAPEX of P3.7 billion 12 Opera4ng DCs New product Warehouse line and expansion Others equip. 5% 0% Pampanga RDC Stores replacement served: 206 20% La Union RDC Pasig RDC Stores Stores served: served: 120 1,144 Store Naga FDC Stores expansion B

19. Slide 19: End of Report

    - End of Report-

Philippine Seven — FY2018 Earnings Presentation on 6ix