Robinsons Retail Holdings, Inc.

Ms. Selena Chua, the Group GM of Robinsons Department Store and Toys R Us, and Charles Truison, the Group General Manager of DIY Pets and Mass Merchandise, and Teres Ramalingan, the General Manager of Ministop. Also joining us in the call are Jovi Santos, the General Manager of the Appliance Segment, Edna Dolieza, the General Manager of Gore Robinsons, and E.R. Rollyan, the co-founder and CEO of Grozary. This presentation will cover the financial highlights of our operations for the second quarter and first half of 2021, an update on our store network and e-commerce platform, a detailed discussion on our financials, and some recent company developments. 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 of the Zoom dashboard. We would appreciate if you would limit the questions to a maximum of three, including follow-up, so we can accommodate as many questions by the other participants. 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 the private chat to Jake Crisolugo. With that, I'll turn you over to our president and CEO.

Good afternoon. Let me summarize RRHI's consolidated response for the first half of 2021. Net sales reached 71.4 billion. Blended same-store sales growth of negative 10.2%. 200 BIPs expansion to gross profit margin at 22.8%. EBITDA margin at 8%. Net income attributable to equity holders of the parent company increased by 1.7% to 1.7 billion. Store portfolio of 2,153 stores and 1,935 TGP franchise branches nationwide. E-commerce sales grew four times year-on-year, accounting for 2.8% of sales. Robinson's Retail has an extensive store network with 270 supermarkets, 49 department stores, 226 DIY stores, 462 convenience stores, 849 drug stores, and 297 specialty stores for a total of 2,153 stores plus 1,935 franchise stores of PGP as of end June 2021. Our stores serve as the fulfillment centers of Go Robinson's, our e-commerce site, which is the main online hub for our formats. Go Robinson's has recently onboarded Robinson's department store and currently serves a total of eight banners. Our discretionary format showed marked improvement as it registered positive sales growth for the quarter as they were closed for six weeks last year. Rose Pharmacy contributed $1.9 billion in the second quarter and $3.7 billion in the first half. Meanwhile, the supermarket segment, which accounted for 59% of the business, posted lower sales growth as it came from a high base last year induced by the panic buying of essential goods. As a result, consolidated net sales increased by 2.7% to 35.8 billion in the second quarter to reach 71.4 billion in the first half. E-commerce performance remained strong, with sales consistently growing on a quarterly basis. E-commerce sales accounted for 2.8% of total RHI sales in the first half, nearing the upper bound of our 2% to 3% target. Blended SSSG for the quarter was negative 3.4%, a significant improvement from negative 13.9% in the same period last year and negative 16.1% last quarter of this year. All of our formats, except for supermarkets, recorded positive SSSG for the quarter. Year-to-date, SSSG was at negative 10.2%. Gross profit margin expanded by 290 dips and 200 dips in the second quarter and first half, respectively, to 22.8%. The margin improvement was driven mainly by higher vendor supports this year and better category mix. EBITDA margin was at 8.1% and 8% in the second quarter and first half. Slightly lower versus the second quarter of 2020 and the first half of 2020 with higher OPEX due to higher operating days and lower rent reprieves versus last year. Net income attributable to parents increased by 0.7% to $724 million for the second quarter and 1.7% to 1.7 billion in the first half, still benefiting from the impact of the CREATE law. The next speaker will be Jody Gadia, who will talk about the supermarket segment.

Thank you, Ms. Rubina. Starting 2021, grocery and no-brand financials are now under the supermarket segment from the specialty segment previously. The supermarket segment recorded net sales of 21.1 billion in the second quarter, bringing first half net sales to 42.2 billion. The 14.5% decline in first half same-store sales growth was attributable to the high base of 16.4% existing stores growth versus last year. resulting from the enhanced community quarantine imposed in March 2020 all the way to mid-May 2020. Meanwhile, our first half e-commerce sales ended at 1.2 billion, or 2.9% of sales, and has now surpassed the level of our total full-year e-commerce sales last year, ended at 1.2 billion. or 1 billion or 1.1% of sales last year. Our gross margin increased to 21.5% in the second quarter. For life-for-life comparison, if we exclude the consolidation of grocery and no brand, gross margin expanded by 280 basis points to 22.1% in the second quarter. and 170 basis points to 21.5% in the first half, primarily due to strong vendor support for our category promotions, rate increase in supplier portal fees that we implemented, the business advancement support or new store opening fees, as well as from conversions, as well as higher revenues from new product listings as our trade partners resumed innovations. EBITDA margin rose to 8.4% in the second quarter. Again, for a life-for-life basis, EBITDA margin improved by 80 basis points to 8.8% in the second quarter and 50 basis points to 8.6% in the first half due to lower operating expenses from the austerity measures we have implemented and lower ECQ-related costs or incentives and allowances to our frontliners, which we granted last year. As of end June, there are 145 Robinson supermarkets, 70 Robinsons Easy Mart, 34 The Marketplace, 16 Shopwise, and five no-brands, bringing our total network to 270 stores. Our next speaker is Ms. Serena Chua of Department Store.