Robinsons Retail Holdings, Inc.

and healthy. We once again salute all our medical frontliners and institutions at the forefront of battling this crisis. I am proud of our own frontliners and employees at Robinson's Retail who remain dedicated to doing their work well so that our stores may continue to provide access to essential goods and services to the market. Over the past few months, Robinson's Retail has remained vigilant in implementing measures to protect our employees. such as periodic sanitation of all points of contact, social distancing, and daily health monitoring. And the healthcare helpline for COVID information and access to testing. To support employee development, our human resources department began to offer training programs that are conducted and completed online in place of face-to-face modes of learning. We have also maintained our commitment to our customers and suppliers through our own e-commerce platform and digitizing our payments processes for greater ease and efficiency. Likewise, we continue initiatives that help aid communities and groups that are most affected by the pandemic, such as local farmers seeking stable avenues to sell their produce, impoverished families and children. As we face this unprecedented times, Robinson's Retail is indeed challenged, but unbound, and together we will weather COVID-19's profound impacts on society and business. Turning to our results, Let me summarize RHI's consolidated results for the six-month period ended June 2020. Blended same-store sales growth of negative 3.8%. Store portfolio of 1,890 stores and 2,010 TGP franchise branches nationwide. Gross floor area of 1.45 million square meters, excluding TGP. Shortfall in consolidated net sales by 2.9% year-on-year. Gross profit margin at 20.9% of sales. EBITDA margin at 8.2% of sales. And net income attributable to equity holders of the parent company was at 1.6 billion for the first half. The COVID-19 pandemic and the various lockdowns imposed by government affected our business performance and the full impact was felt in the second quarter. Identify the non-essential stores under the enhanced community quarantine guidelines. Our department stores, DIY and specialty stores were temporarily closed for a period of two months starting March 17, 2020. Majority of the company stores across all formats have resumed operations only in May 16th, following relaxed quarantine restrictions. However, store operating hours have been shortened and food traffic is down due to the lack of available transportation and limited movement of people. All these continue to hamper our growth. As a result, sales dropped by 12.4% to 34.9 billion in the second quarter. Consolidated net sales for the six-month period ended June declined by 2.9% to $75 billion. Vended same-store sales growth was negative 13.9% in the second quarter and negative 3.8% in the first half. From high double-digit growth in the first quarter, the SSSG of the supermarket and drugstore segments eased in the second quarter, but still remained high relative to historical levels. with first half SSSG at plus 16.4% and plus 6.9% respectively. While convenience stores are considered essential, SSSG was still challenged as people mobility restrictions and curfew hours resulted in store closures and shortened operating hours. The rest of the formats posted negative SSSG in the first half contracting further as the ECQ lockdown was longer at six weeks in the second quarter compared to two weeks in the first. Robinson's retail ended the quarter with 1,890 stores consisting of 262 supermarkets, 49 department stores, 222 DIY stores, 512 convenience stores, 520 South Star drug stores, and 325 specialty stores. Including the 2010 franchise stores of TGP, the group store network totaled 3,900 stores. Our gross floor area reached 1.25 million square meters at the end of June. We restated our 2019 financials to PFRS 16 to make it comparable with the figures in the first half. Blended gross profit compressed by 320 dips to 19.8% in the second quarter and 200 dips to 20.9% in the first half, primarily due to temporary closure of non-decentral stores. Although the discretionary formats were not operational during the ECQ period, these stores still incurred operating expenses, including salaries, depreciation expenses, and CUSA charges. Meanwhile, all operating stores incurred incremental expenses related to COVID-19, including sanitation costs and financial support to employees, like incentive pays, meals lodging, and shuttle allowances. These factors, coupled with a shortfall in sales, brought EBIT margin down by 170 bps to 3.3% in the second quarter and 70 bps to 3.7% in the first half. Net income attributable to equity holders of the parent company declined by 33.2% to 719 million in the second quarter and by 4.1% to 1.6 billion in the first half. Corn net income was at 547 million in the second quarter, bringing first half corn net earnings to 1.3 billion at the end of June.

Now, the next speaker will be Jody Gadia, who will talk about the supermarket segment. Thank you, Ms. Rubina. Good afternoon, everyone. The consolidated net sales of the supermarket segment increased by 14.1%. to 24.2 billion in the second quarter of 2020, bringing our total sales for the first half of the year to 48.6 billion, up by 15.9% year-on-year. Those plans accounted for 28% of the total turnover of the supermarket segment. Our same-store sales growth sustained double-digit levels at 14.2% in the second quarter, bringing first-half single-store sales growth to 16.4%. As essential goods, such as the usual shelf-steady products like canned meats, noodles, sardines, and the like, disinfecting products like alcohol and sanitizers and cleaning items continue to be in high demand. Transaction count declined, though, by 30%, but basket size surged by 46.9% in the first half, which indicates that consumers are shopping less frequent, but they're spending more per trip. Our gross margins, however, compressed by 180 bps to 19.3% in the second quarter, and 90 basis points to 19.8 in the first half. These are the following factors that drag our gross margins a bit. First is we're selling more lower margin staple products, the canned goods and the noodles and the like. There was also lower advertising support from vendors because of the canceled promotions starting middle of March up to May. Lower listing fees and gondola rentals, obviously because of fewer new product launches. during this period, and B, the drop in store opening support because of the slowdown in store expansion as compared to previous year. Meanwhile, our lease income was also affected by the rent waiver we extended to our supermarket and Robinson's Townville tenants. On the other hand, a bit the margin improved by 60 basis points though to 8% in the second quarter, and another increase of 110, which is points to 8.1 in the first half. As operating expenses decreased due to the savings we were able to generate from the response integration efforts. An example would be headcount reduction, rent discounts, lower marketing expenses, and corporate expenses, as well as the lower labor and utility expenses during this pandemic with a shortened store operating hours. This savings more than compensated for the incremental expenses we incurred during this ECQ and ECQ, which included incentive pays to our frontliners, meals, lodging, and shuttle allowances, as well as the regular disinfection expenses for our stores. As of end June 2020, we now have a total of 262 stores, with 182 stores from Robinson Supermarket, and 80 stores from Respanso presenters. On the e-commerce front, we officially launched our own e-commerce platform named GoRobinsons last June 3. The plan for this year is to expand the coverage to be able to serve the entire Metro Manila region. In addition to this, we also partner with Metro Mart and Grab Mart. Currently, this grocery delivery service, online delivery service, is available in 55 stores, and we project to end the year with 74 stores. Approximately 8,000 SKUs across all major categories are available online at any one time. That's all for supermarket. Let me turn you over now to our next speaker, Ms. Selena Chua.

Okay, hello. Robinson's Department Store recorded net sales amounting to $923 million in the second quarter and $3.7 billion for the six-month period ended June 2020. Same-store sales growth skidded to negative 79.6% in the second quarter and negative 53.8% in the first half due to the temporary closure of all 49 branches starting March 17 in compliance with enhanced community quarantine guidelines. All stores were fully reopened by May 20th. Despite the 410 BIPs decline to 27.9% in the second quarter, gross margin managed to stay up by 80 BIPs to 29.9% for the first half. On the back of the 290 BIPs expansion brought about by higher DC fees since the fourth quarter of 2019 and improved category mix resulting from better buying. Although the stores were not operational during the ECQ, Robinson's department stores still incurred operating expenses, which include salaries to employees and CUSA charges paid to the malls. As a result, EBITDA margin flipped to negative 3.1% in the second quarter. Meanwhile, the first half EBITDA margin was flat at 2.2%. We continued to improve our assortment mix and service levels in our flagship store in Lazada. And in addition to this, we were quick to roll out We Shop For You, our call and collect deliver initiative to serve our customers as Robinson's department store branches were required to close for two months during the ECQ. We also plan to launch in Go Robinson's and Shopee within the year. May I turn you over to Mr. Stanley Ko to present the DIY segment.