Robinsons Retail Holdings, Inc.

Good afternoon, everybody. Thank you for joining us to review RRHI's unaudited 2020 financial results. I am Gina Dipaling, the company's investor relations officer. On this call, you will hear from our president and CEO, Ms. Rubina Gokongwepe, our CFO, Ms. Maylene Casiban, our managing director of the supermarket segment mr jody daria our deputy gm of our robinson's department store uh miss carmina the group general manager of diy effects and mass merchandise mr stanley paul our deputy gm of ministop mr shoresh Our general manager of South Star is Christine Tuarez. Next slide, please. This presentation will cover the financial highlights of our operations for 2020, an update on our store network, a detailed discussion on our financials on both the group and per segment level, some recent company developments and our plans and prospects. A brief question and answer session will follow the formal presentation to be answered by the management team. As a reminder for the Q&A portion, please use the Q&A function on your Zoom dashboard. We will appreciate it if you limit yourself initially to a maximum of three questions, including follow-up, so we can accommodate as many participants as possible. You may queue back. in for further questions. If you have any concerns regarding the sound quality of the call, please feel free to send your concerns via a private chat to the host, Eric Prisolubo. With that, I'll turn it over to our president and CEO.

Good afternoon, everyone. Let me summarize RHI's consolidated results for the 12-month period ended December 2020. Blended Saints store sales growth of minus 8.9%. Store portfolio of 2,157 stores and 2,025 PGP franchise branches nationwide. Online sales grew three times year on year. 7.3% shortfall in consolidated net sales. Gross profit margin at 21.8% of sales. Even the margin at 8.5% of sales after PMRS 16 and net income attributable to equity holders of the parent company was at 2.9 billion for 2020 after PMRS 16. Robinson's Retail ended the year with 2,157 stores. composed of 264 supermarkets, 49 department stores, 225 DIY stores, 472 convenience stores, 829 drugstores, composed of 532 South Star drugstores and 297 Rose Pharmacy stores, and 318 specialty stores, including the 2,025 franchise stores of PGP, the group store network totaled 4,182 stores. We currently have four banners on their supermarket, Robinson Supermarket with 143 stores, The Marketplace with 35 stores, Shopwise with 16 stores, and Robinson's Easy Mart with 70 stores. In 2021, we target to accelerate the expansion of Robinson's Easy Mart or Mini Mart banners. We have accelerated our e-commerce presence by launching our own e-commerce sites, namely GoRobinsons.ph, SoundstarDrag.com.ph, and RobinsonsAppliances.com.ph. We also sell via third-party platforms and have call and collect delivery service. GoRobinsons is a concierge service that picks up from the stores, so it is an asset-like operation. It now has a mobile app which can be downloaded in iOS and Play Store. The platform is also integrated with the Robinsons Rewards Program, whose 3.1 million members can earn rewards points if they purchase products through GoRobinsons.ph. RHI ended the year with consolidated net sales down by 7.3 to 151 billion, mainly due to the COVID and the lockdowns. excluding Rose Pharmacy net sales declined by 8% to 149.8 billion. Blended same-store sales growth was minus 15.6% in the fourth quarter and minus 8.9% in 2020. The supermarket segment posted positive 7.7 SSSG for the year, while the drugstore segment recorded flat SSSG given the high base of plus 9.9% last year and the reduction in sales of prescriptive medicines due to less people going to hospitals. Meanwhile, the rest of the formats registered negative SSSG, mainly due to the lockdowns imposed by government and ordinances prohibiting individuals below 15 and above 65 years old to go out. aggregate online sales rose to 1.4% of total RHI sales in the fourth quarter compared to only 0.2% in the first quarter of the year. It reached 1.6 billion in 2020, registering three times increase in accounting for 1.1% of total sales from 0.4% the previous year. With no change in full year figures, we restated our quarterly 2019 financials to make the impact of PMRS 16 comparable with 2020. Gross profit was 22.3% in the fourth quarter, mainly due to the consolidation of Rose Pharmacy. Due to lack of scale, Rose Pharmacy does not enjoy the same margins as South Star Drug. But matching trade margins will be our top priority, just like the time we gained margins from the consolidation of Robinson Supermarket and Rustam Supercenters. Excluding Ross Pharmacy, gross margin increased to 22.6% in the fourth quarter. For EBITDA, RHI has implemented cost containment measures to cushion the impact of weakened sales performance. OPEX has percent of sales declined by 80 bps. Net income attributable to equity holders of the parent company declined by 25.2% to 2.9 billion in 2020. The next speaker will be Jody Gadia, who will discuss the supermarket segment.

Thank you, Ms. Rubina. Good afternoon, everyone. The year-to-date consolidated net sales of the whole supermarket segment of RHI was at 94.1 billion. This was 66.3%. higher than last year's level uh this was despite uh fourth quarter 20 slow down uh where sssg or same source hills growth is to 2.3 percent minus 2.3 percent caused mainly by the decline in mall food traffic particularly in stores based in central business district malls or cbd malls as more people work from home now as well as increasing competition from social commerce and online grocery platforms. Year-to-date same-store sales growth, however, still ended at a robust 7.7% given the strong pandemic-induced sales in the first three quarters of the year. Our fourth quarter online sales amounted to 1.4% of total company sales. Meanwhile, year-to-date 2020 online sales breached already the 1 billion mark, representing 1.1% of total company sales and 3.1% of the total sales of all 58 stores that offer this online grocery service. Our gross margins expanded by 90 basis points up to 22.1% in the fourth quarter of 2020. driven by the recovery in back end margins or other income as we call it, narrowing the decline for the full year by 20 basis points to 20.8%. The margins likely declined by 10 basis points to 8.6% in the fourth quarter of 2020, but expanded by 60 basis points to 8.4% in the whole of 2020. due to the cost efficiencies from the integration of restaurants, rent discounts that we were able to avail of, and better DC, or distribution center, cost recovery. As of end of the year, December, we have 143 Robinson supermarket stores, 35 The Marketplace, 16 Shopwise, and 70 Robinson's Easy Mart, bringing our total network to 265. 264 stores. Our next speaker will be Nina to discuss department store.