SUPER HI INTERNATIONAL HOLDING LTD.

the 2021-2025 Earnest Call of Super High International. Attending this conference are Mrs. Yang Lijian, Executive Director and CEO, and Ms. Qu Cong, CFO and Secretary of the Board of Directors. Today's meeting may include forward-looking statements, including but not limited to the company's statements on strategic and business plans, as well as performance outlook. The updates at this earnest conference The management's comments and response to your questions only . Please refer to the latest safe harbor statement in the earnings press release, which applies to this conference call. This meeting will be conducted in Chinese. An external agency will provide simultaneous English interpretation. In case of any discrepancies, the Chinese content shall prevail. The meeting presentation materials have been uploaded to the company's Investors Relations page for your review. Now let's invite Ms. Yang Lijuan, Executive Director, to give you an update on the company's performance in Q1 2025. Thank you, moderator. Dear investors, analysts, hello, everyone. I'm Yang Lijuan, the executive director and CEO of I'd like to update you on the Q1 performance of Superhigh. In Q1, the overall average table turnover rate remained flat at 3.9 times per day compared to last year. while the same store turnover rate further increased by 0.1 times per day year-on-year to 4.0 times per day. The company achieved a revenue of $198 million, a year-on-year increase of Q1. In Q1, we proactively adjusted operating strategies by providing benefits and credits to our guests by including more reasonable pricing, bigger proportion of the food, and enriched and diversified dining gatherings and scenarios, helped by taking the initiative that more guests would be willing to choose us for the longer run. At the meanwhile, we also pay attention to team building them with better benefits packages. to better create synergy and collectivism among our staff members. So through this implementation of the initiatives, in the short period for sure, our operational margin were under pressure. That's in Q1. Our operating profit was 4.1%, a one-on-one decrease of 2.5 percentage points. But it is to our conviction that we must have a long-term dedication So we can achieve our strategy of dual focus on both employee empowerment and customer-centric cooperation. Next, I will update you on the main initiatives of this quarter. In Q1, we continue to implement our strategy of dual focus on both employee empowerment and customer-centric cooperation. In this year, we have revealed the management as well as the operation of various countries And we believe we need to continue our strategy or do our focus. In terms of our customer satisfaction, we believe we need to start from two directions. One is better quality for price. Second is building a differentiated high-deal love. In order to give the sense of a better quality for price, we have streamlined and revealed the table turnover rate, the growth margin, of different countries and stores, thus adjusting the pricing and proportion of the offerings to the guests. And also, we have tightened our management procedures by taking advantage of the full color card system so that the guests can have access to better quality of our services, dining environment, and product offerings. Also, we have launched a project called A Different Hai Di Lang. So based on the fundamental scenarios that we offered previously, we iterated our product offerings, furnishings, and operation. Especially, we have explored and created immersive dining scenarios in terms of a late night snack, fresh-cut meals, family gatherings, and pet gatherings so that we can bring the customer experiences to a high level by bringing with them improved quality of the food, freshness of the ingredients, and social bars. We have conducted a deep dive of the languages and cultural backgrounds of our employees, and we want to bring tangible benefits to increase the employee engagement in terms of a salary level, benefit packages, employee care, dormitory conditions, employee meals, team building, et cetera. This requires intensifying and more investment in the very beginning so that our staff globally can have a stronger sense of . So the country managers and the regional managers will be the chief owners of this initiative. So we have reshaped and rationalized our salary, benefit packages, standard for team building, and regular checks of the implementation from different countries. So we advocate to print diversified employee activities, such as outings, ball games, team buildings, to intensify our synergy in an official manner. By implementing these strategies in the short term, the operating margin will be short under pressure. Well, we're really starting to see the signal in the Q1 performance. But it is to our conviction these measures are necessary and worthwhile so that we can gain long-term customer loyalty and the trust from the employees. And we believe we should have a long-term easing perspective of the above-mentioned investment areas. building that will continue to focus on product innovation and the marketing campaign. Well, in terms of the product, we have a cumulatively launched 300 times of new products covering the super base, the manual offerings, snacks, beverages, and et cetera, and different regions have nurtured their killer categories. For example, In Southeast Asia, we have launched the grassland beef brisket. The local order rate was surpassing 20%. In Japan, we have also provided a localized twist to our traditional beef gallon base soup. This new and fresh choice saw the collection rate or the order rate surpassing 15%. While in terms of branding, we have diversified ways to engage and reach our... Yes, making a time in collaboration. In January this year, we have launched a peripheral and themed doors by featuring the happiness and the fortune hot pot as a social event. And also on March the 20th and the brand birthday, Together with the celebrities, we have launched a collaboration event with 250 million sets of meals sold out, receiving a buzz as well as positive feedback. These practices and initiatives do not only solidify the brand awareness, also inject impetus to our global expansion. In terms of the store expansion, we will adopt a motion-up model, i.e., the country manager... We have four net NSOs in Malaysia, the Philippines, Japan, and Australia. At the same time, we closed the three underperforming stores and continue to focus on the healthiness of... The rest of the stores with contract already signed but not yet open. and teams of locations for materialization. It is expected that we will have double-digit new stores open in 2025, reserving momentum for long-term development. Fourth, under our promenade gate plan, we are building the second curve. This quarter, the revenue of existing stores from the second curve increased by 25% YOY, and we are active Some country managers have already launched innovative plans in their territories, such as hot pot variances, barbecue, and fast food. The headquarters aim to provide all-round support to such projects in areas like market research, product development, and brand building through a standardized global playbook. Currently, the first barbecue store in Malaysia will come in soon, and we are evaluating expansion opportunities in countries we already played. This project is looking into the future with building a globally leading integrated catering group at Eurovision. We'll stay focused on five strategic pillars, customer experience improvement, restaurant network optimization, operational efficiency enhancement, emerging business cultivation, and headquarters capability strengthening. Through a solid operational foundation and innovative business layout, we will strive to achieve a higher ambition in the global market. of Heidi Lau restaurant reached $188 million, a 4.5% year-on-year increase, mainly driven by the continuous business expansion. The number of Haidilao restaurants increased by four compared to the same period in 2024. Meanwhile, the brand influence has continued to grow, with traffic increasing by 6.8% on a year-on-year basis. In this quarter, benefiting from new delivery menu offerings such as Mala hotpot at many stores and the great expansion of online delivery channels, and delivery radius, the revenue of a delivery business reached $4.024 million, a significant 37.9% year-on-year increase. Other income reached $5.357 million, a 22.7% year-on-year increase. This is partly due to the growing popularity of our hotpot and its sub-brands among local consumers and retailers, and partly due to the revenue growth contributed by restaurants incubated under the Promenade plan. While in terms of costs, the raw material cost was $67.167 million, with a growth margin of 66%, a year-on-year decrease of 0.5 percentage points, This is mainly attributed to our continued critical investment in expanding the guest base, as well as adjustment of the pricing strategies. Personnel cost was $69.832 million, accounting for 35.3% of revenue, a year-on-year increase of 1.4 percentage points. This is primarily because we increased the investment in team building in this quarter, improving employee benefits and talent reserves. Rent and facilities was $5.561 million, accounting for 2.2% of revenue, a year-on-year increase of 0.5 percentage points. Main contributors increased the number of leased properties versus last year, as the business expanded, along with an overall rise in property costs. Utility expenses were $6.963 million, accounting for 3.5% and 0.2% mainly due to scaling effects brought by increased revenue. Depreciation and amortization were $19.898 million, accounting for 10.1% of revenue, a year-on-year decrease of 0.8 percentage points, mainly due to the expiration of DNA for some stores and the benefits of store fleet rationalization. at $21.149 million, accounting for 10.7% of the revenue, a year-on-year increase of approximately 1.3 percentage points. This is mainly due to our incremental investment in dining experiences and product offerings and the rising cost of outsourcing services and daily maintenance as the restaurant network expands. The profit was $8.157 million, a decrease of $4.26 million from the $12.43 million in the same period last year. The operating profits in Q1 was 4.1%, decreased by 2.5% from 6.6% in the same period last year, mainly because we continue to implement the strategy of dual focus on employees and customers. Well, in terms of the regional performances, the overall local operations, the traffic increased by 33%, 37.5% compared with the same period last year. And also, the traffic in other regions increased by 20% on the year-on-year quarters. North America, traffic in North America increased by 11.1% compared to the same period last year. As Southeast Asia, the table turnover rate in Southeast Asia remained at 3.7 this quarter on par with the same period last year. Asia was $18.7, a decrease of $0.7 compared with the same period last year. While same-store performance this quarter, the average table turnover rate over 102 same-stores was four times per day, an increase of 0.1YY, mainly driven by the same-store table turnover in East Asia and ROW. The SSS performance per region is trending similar to the overall. So we will soon enter the Q&A session. In the first quarter, a decrease of $4.246 million from a $12.43 million in the same period last year. The operating profit in Q1 was 4.1%, a decrease of 2.5% each point from the 6.6% in the same period last year, mainly because we continue to implement the strategy of dual focus. In Q1, The company's net profit after tax was $11.88 million, turning around from a loss of $545 million in the same period last year. This is mainly due to FX fluctuations in the Q1 this year, which led to a revaluation of items in the US dollar, generating approximately $7.435 million non-cash FX gains compared to an FX loss of $13.045 million in the same period last year. The operating cash flow in Q1 2025 was $4.324 million from the same period last year. In Q1, we served about 7.8 million customers. a 6.8% increase compared to the same period in 2024. Average table turnover rate was 3.9 times per day, same as last year. Our ATV was $24.2, a decrease of $0.7 from a 24.9%. This is mainly due to the rationalization of menu offerings and marketing activities. providing customers with more choices. In addition, compared to last year, the overall FX impact on ATV was negative this quarter, excluding the FX impact ATV was decreasing by $0.4 YOY.

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