Robinsons Retail Holdings, Inc.

Good afternoon, everybody. Thank you for joining us to review Robinson's Retail's unaudited results covering the second quarter of 2022 and the first half of 2022. I am Gina Dipaning, the Company's Investor Relations Officer. The speakers for this call are our President and CEO, Ms. Robina Gokongweche, our CFO, Ms. Maylene Kasiban, the Managing Director of the supermarket segment, Mr. Stanley Paul, the Group General Manager of the drugstore segment, Christine Tuarez, the General Manager of DIY and Pets, Ted Sogono, the Group General Manager of the department store and toys, Mr. Lina Chua, the General Manager of our CVS business, Suresh Ramalingam, and the group general manager of the appliance business, Joby Sanchez. This presentation will cover the company's financial performance in second quarter and first half of this year, an update on our store network and e-commerce business, and some recent company developments. The Q&A session will follow after 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 would appreciate if you can limit the number of questions to three first, including the follow-up, so we can accommodate as many participants as possible. You may queue back in for the added questions. If you have any concerns regarding the sound quality of the call, please send your concerns via private chat to Leah Artus. With that, I'll turn you over to our President and CEO.

Good afternoon. Moving on to our consolidated results for the second quarter. Consolidated net sales grew by 19.8% to 42.9 billion. Blended same-store sales growth of 15.5%. E-commerce sales was 3.1% of total sales. 110 dips gross margin improvement to 23.8%. 90 dips EBITDA margin expansion to 8.9%. Net income attributable to equity holders of the parent company more than doubled to 1.6 billion. Store portfolio of 2,235 stores and 2,082 TGP franchise branches nationwide. Robinson's retail store counts to 2,235 as of June 30. Composed of 300 supermarkets, 938 drugstores, 223 DIY stores, 50 department stores, 443 convenience stores, and 281 specialty stores. We opened 68 new stores at the end of 2021. but we also closed 41 stores. We also have 2,082 franchise stores of TGP. Serving as fulfillment centers for our store network, our e-commerce operations is complementary to our store network. GoCart, our very own e-commerce site, currently has 14 banners in the platform. We have also added 61 stores in GoCart to end June with a total of 168 stores. RRHI continued its strong performance, posting net sales growth at 19.8% in the second quarter and 15.3% in the first half to 43 billion and 82.4 billion respectively, both surpassing pre-pandemic levels in 2019. Most formats contributed double-digit growth rates in the first half of 2022, Improved sales were driven by the 10.2% SSSG given improvements in mobility and easing of border restrictions aided by sales uplift from election spending and partially from series of price increases. With the rebound of the non-discretionary formats, sales contribution increased to 23% in the first half versus 20% last year. E-commerce sales grew 1.5 times and accounted for 3.6% of total sales in the first half from 2.8% last year. In the second quarter, however, e-com contributions slowed down to 3.1% with an ease of mobility. Blended SSG for the quarter was up 15.5%, a turnaround from previous years minus 3.4%. Department store DIY convenience stores and specialty store segments delivered double-digit quarter SSST. Gross margin expanded by 110 dips in the second quarter to 23.8%. This led to a year-to-date gross margin improvement by 60 dips to 23.5%. EBITDA margin advanced by 90 dips to 8.9% in the second quarter and 70 dips to 8.7% in the first half. OPEX has a percentage of sales decline due to the impact of the cost-cutting measures implemented during the pandemic. Net income attributable to parents more than doubled to 1.6 billion for the quarter to end the first half at 2.7 billion. The surge in profitability is attributed to extraordinary good operating performance, forex gains, and higher equitized earnings from Robinson's stock and dividend income. Coupled with our share buyback, earnings per share increased at a faster clip by 122% to one peso and four cents per share in the second quarter, and by 69.6% to 1.83 cents per share in the first half. The next speaker will be Stanley Koh, managing director of the supermarket segment.

Thank you, Mr. Bina. Good afternoon, everyone. The supermarket segment recorded net sales of 24.3 billion in 2Q, 15.2% ahead versus the same period last year. Same-store sales growth was at 9.4%, a turnaround from minus 14.4% in 2Q 2021, driven by a higher transaction count despite lower basket size. Consumers are shrinking their purchases or buying cheaper items in response to the high inflation that reached 6.1% in June. The reinvented Shopwise Antipolo store, which was relaunched on May 26, has also started to make positive contributions with an average daily sales improvement of 38% versus pre-launch ADS. Supermarket year-to-date net sales ended at 46.7 billion, up by 10.8%. E-commerce as a percent of sales grew to 3.5% in first half from 2.9% the previous year. With the opening of the economy, e-commerce sales contribution in 2Q has softened to 2.8% versus 3.9% in the same period last year and 4.2% in first quarter of 2022. Gross margin improvements were attributable to higher transaction count coupled with higher prices, increase in indent penetration across all banners, improvement in assortment mix. EBITDA margins were at par versus last year, as cross-margin improvements were offset by additional expenses from the new stores, still underutilized new distribution center in Pampanga and lower-end concessions. As of the end of June, there were 145 Robinson supermarkets, 91 Robinsons Easy Mart, 16 Shopwise, 35 The Marketplace, and 13 No Brand Stores, for a total of 300 stores. Next speaker is Finn for the drugstore segment.