Philippine Seven Corporation · PSE:SEVN

Philippine Seven — Q2 2019 Earnings Presentation

22 slides from Philippine Seven's earnings presentation, Dec 4, 2019

  1. Slide 1: 2019 Second Quarter Investor Briefing

    Philippine Seven Corpora/on (SEVN) 2019 Second Quarter Investor Briefing 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 68,600 Stores (as of May 31, 2019) b. Philippines ranked 6th out of 26 countries and territories Norway SERVING OVER 62M Sweden Canada Denmark GUESTS United States China South Korea Japan DAILY Mexico Hong Kong Taiwan Vietnam 2018 Thailand Ma

  3. Slide 3: Global Recognition

    Global Recognition Asian Convenience Industry Leader of the Year Award = 7 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 Me

  4. Slide 4: Shareholding Structure

    Shareholding Structure Agus Development Corp. Present 3% Shareholding Others-Foreign Structure Others-Filipino 15% 4% Progressive Development Corp. 2% President Chain Store Asian Holdings Corp. (Labuan) Holdings, Ltd. 6% 52% As of June 30, 2019 % ownership President Chain Store (Labuan) Holdings, Lt

  5. Slide 5: SEVN Share Information

    SEVN Share Informa/on Price (June 30, 2019) Php 136.00 Hi/Low (YTD) Php 110.00 – Php 141.00 Free Float 33.1% Outstanding Shares 756.42 million Market Capitaliza4on USD 2.00 billion Dividend 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Payment Stock 0.10 0.10 0.05 0.15 0.15 0.15 - - -

  6. Slide 6: Philippine Economy

    ege e Philippine Economy "india forecasted to grow 6.9% POA T2 6.967 - 6.7 656.6 6.5 6.6 63 6 8% . s s Sn Vietnam Wa 6.2" ee 5.5% eee a ee ee BEE & 56-5.5°~ arget: : Philippines on © © oc ©KR KR KR KR 2 DOD 0D 0 B® @ 3, RRR 88359835935 58 5.0% Indonesia Source: Philippine Statistic Authority € ECONO

  7. Slide 7: Market Performance

    Market Performance Market Share per Trade 2018 YTD (%) 2019 YTD (%) Difference (%) Channel Supermarket 45.3 45.8 +0.5 Grocery 5.5 5.6 +0.1 Convenience Stores 3.6 3.9 +0.3 Sari-sari Stores 33.5 33.5 0 Market Stall 5.2 4.9 -0.3 Drugstore 3.3 3.2 -0.1 Others 2.6 2.3 -0.3

  8. Slide 8: Store Network: Q2 2019

    Store Network: Q2 2019 7-Eleven By Loca/on Store Count % Jan. 1 Net addi4ons June 30 Metro Manila 938 25 963 36% Luzon-ex MM 1,027 53 1,080 41% Visayas 365 15 380 14% Mindanao 220 21 241 9% Total 2,550 114 2,664 100% As of June 30, 2019 + 279 stores vs. Q2 2018 All Store Count 2,664 518 70 628 25 0

  9. Slide 9: Q2 2019 Financial Performance

    Q2 2019 Financial Performance System-wide IFRS IFRS sales P373.2 million P1.6 billion P14.4 billion + 9% + 71% + 25% Non-IFRS Non-IFRS Same-store sales P505.3 million P1.2 billion + 13% + 47% + 29% Sales Net income EBITDA Q2 Net Income 5 Year Trend 600.0 500.0 400.0 300.0 200.0 373.2 100.0 - 2015 20

  10. Slide 10: 6M YTD 2019 Financial Performance

    6M YTD 2019 Financial Performance System-wide IFRS IFRS sales P485.3 million P3.0 billion P27.0 billion - 9% + 72% + 22% Non-IFRS Non-IFRS Same-store sales P787.9 million P2.2 billion + 10% + 48% + 25% Sales Net income EBITDA H1 Net Income 5 Year Trend 900.0 800.0 700.0 600.0 500.0 400.0 300.0 485.3

  11. Slide 11: Adoption of new IFRS on Leases

    Adop/on of new IFRS on Leases 100,000 90,000 80,000 70,000 60,000 Sample Illustra/on 50,000 2019 2020 2021 2022 2023 Year Rent ROU Deprecia4on Interest IFRS 16 Impact payment Asset B C D = B+C A-D Rent payment Deprecia4on IFRS 16 A 2019 70,000 70,000 67,714 22,828 90,542 (20,542) • The new lease acc

  12. Slide 12: Annual IFRS 16 Impact

    Annual IFRS 16 Impact ESTIMATED BASED FROM 2,764 (95%) CONTRACTS REVIEWED LOWER NET INCOME Depreciation of ROU asset approximates cash flow rent expense. Interest expense is significant based from the higher outstanding balance of lease liability. NEUTRAL EFFECT Sum of ROU asset depreciation − and a

  13. Slide 13: SSSG grew 13.0% in Q2 driven by strong customer count

    SSSG grew 13.0% in Q2 driven by strong customer count Systemwide sales (in millions) Store count SSSG % 50,000.0 2,700 2,664 14.0% 46,128.7 12.9% 13.0% 45,000.0 2,593 2,600 12.0% 2,550 40,000.0 37,530.8 2,500 10.0% 35,000.0 8.8% 30,000.0 2,385 2,400 8.0% 2,329 6.8% 25,000.0 6.3% 2,285 2,300 6.0% 20,

  14. Slide 14: Financial Position as at June 30, 2019

    Financial Posi/on as at June 30, 2019 30,000 % change Balance Sheet and Cash Flow As at (vs. 12/31/2018 except CF, w/c is (in Php Million except Book Value per Share) June 30, 2019 comp. vs. 6Mos. 2018) 25,000 Total Assets 27,416.2 57.5% Current Assets 10,040.5 11.7% 20,000 Non-current Assets * 17,3

  15. Slide 15: Selected Financial Ratio

    Selected Financial Ra/o EPS (First Half) 0.80 Selected Financial Ra/o H1 2019 H1 2018 0.60 0.40 IFRS Non-IFRS 0.20 Non- IFRS Liquidity and Leverage Ratio: EPS P1.05 - Current Ratio (x) 0.87 1.05 0.97 2015 2016 2017 2018 2019 EPS 0.47 0.62 0.59 0.70 0.64 Debt to Equity (x) 2.63 1.35 1.28 Profitabilit

  16. Slide 16: Crunch Time and City Blends drive Foodservice sales, while service revenues outperform

    Crunch Time and City Blends drive Foodservice sales, while service revenues outperform 112.2

  17. Slide 17: Marketing income continued to boost margins

    Marke/ng income con/nued to boost margins 112.2

  18. Slide 18: Update on Digital Strategy

    Update on Digital Strategy 2019 Performance YTD Ave daily orders (Ecommerce) More than 2,000 per day CLiQQ App downloads 2.9 million (+40% increase) CLiQQ App monthly ac4ve users 1.2 million (+140% increase) 112.2

  19. Slide 19: New Store Concepts

    New Store Concepts Customized racks and counters New City Blends Cafe 112.2 Alloked area for e-commerce order and pick-up

  20. Slide 20: 55% of stores are franchised, dominated by FC1 package

    55% of stores are franchised, dominated by FC1 package FC1 FC2 FC3 Investment Php 4.0 million Up to P1.0 million < P500,000 Building Franchisee Company Merchandise Franchisee Equipment Company Cash Bond (PGD) - Franchisee Term 5+5 years 66% FC, 40% FC, Varies per GP Split 34% PSC 60% PSC Store Rent

  21. Slide 21: Continued store expansion and support infrastructure

    Con/nued store expansion and support infrastructure 2019 CAPEX of P3.7 billion 14 Opera4ng DCs New product Warehouse San Jose FDC line and expansion Others equip. 5% 0% Pampanga RDC replacement 20% La Union RDC Pasig RDC Store Naga FDC expansion Batangas FDC 50% Revenue Iloilo RDC enhancement 25% Ba

  22. Slide 22: End of Report

    - End of Report-

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