Robinsons Retail Holdings, Inc.

Hi, good afternoon, everyone. Thank you for joining us to review Robin's details and all the tech results covering the first nine months of this year. I'm Gina Devali, the company's Investor Relations Officer. The panelists for this call are Ms. Rubina Tokong-Waite, the President and CEO of RHI. Stan Pippo, our COO. Malin Casiban, our CFO. Christine Tuarez, the Group General Manager of Robinson Supermarket. Marielle Crisostomo, the General Manager of Slotstar Drug. Ted Sobono, the Group General Manager of DIY and Pets. Mina Crison, the General Manager of Robinson's Department Store and UT. Suresh Gamanilgam, the General Manager of Humble Chance. Roby Santos, Group General Manager of the Appliance Business. And remember, he is the general manager of Volcoin. This presentation will cover the company's financial performance in the first nine months of its year, an update on our store network, and recent company developments. A Q&A session will follow after the presentation. As a reminder for the Q&A portion, please use the Q&A function on your Zoom dashboard to type in your questions. We would appreciate if you limit yourself initially to a maximum of three questions, including follow-ups, so we can accommodate as many participants as possible. Here we peel back into the Q&A box for additional questions. You may also use the raise hand function if you would like to ask a question live. I will turn you over now to our president and CEO.

Good afternoon. Here are the highlights of our results for year-to-date September 2023. Consolidated net sales grew by 8.7% to 138.2 billion. Blended same-store sales grew of 5%. Capital expenditures of 2.5 billion. Gross profits increased by 9.4% to 32.9 billion, with gross margin expanding by 15 bps. EBIT of 6.1 billion, up by 3.7%. Core net earnings rose by 4% to 3.8 billion. Store network of 2,368 stores and 2,080 BGP franchise branches. Our store count in the Philippines stood at 2,368, comprising of 341 supermarkets, 1,033 drug stores, 50 department stores, 230 DIY stores, 416 convenience stores, and 298 specialty stores. We also have 2,080 franchise stores of KGB. For the nine months ending, we opened 102 stores and closed 44 for net store openings of 58. Both of the new stores came from drugstores and supermarkets. Note that most of our store openings happen in the latter half of each year. Meanwhile, GoCart, our e-commerce platform, continues to complement our offline store network. SSS denormalized to 2.5% in the third quarter due to elevated inflation in the high days last year, which benefited from economic reopening and election-related spending. Net sales for the quarter came in at $47.2 billion, higher by 5.6%. For the nine-month period, SSSG came at 5%, with net sales of 138.2 billion, up by 8.7%. The deals have outperformed your supermarkets, drugstores, and department stores. In terms of revenue breakdown, the Staples businesses accounted for 78% of total sales, while the discretionary formats comprise the 22% products. This is a more detailed picture of our P&L. Net sales grew by 8.7%, driven by 5% SSSB and new stores. Gross margin expanded by 15 dips to 23.8% from higher in-depth penetration and improvements in category mix. Event rose 3.7% to 6.1 billion as revenue growth and GPM expansion were offset by store expansion costs, higher utility expenses, but elevated fuel prices and higher personnel costs. Net income to parent declined by 41.4% to 2.6 billion due to equitized losses from minority startup investments, which continue to ramp up. The derecognition of Robinson's Bank's net income under equitized earnings following the ongoing merger with EPIs, interest expense from the acquisition financing of the EPI shares that were purchased earlier this year, and the absence of cash dividends from BPI in the third quarter. We note that BPI has historically paid dividends in the second and fourth quarters of each year. Recall that in the second quarter, the cash dividends related to BPI fully offset the interest expense from the acquisition financing of the bank shares. As such, the expenses, the expected cash dividends from BPI in the fourth quarter of this year should fully cover for the acquisition-related financing interest expense. Our core earnings, which exclude interest income from bonds, forex, losses from associates, interest expense, and dividends related to the BPI shares, rose by 4% to $3.8 billion for the nine-month period. The next speaker will be Tim Wares, who will Discuss the supermarket segment.

Thank you, Ms. Rubina. Supermarket net sales came in at 78.6 billion in nine months of 2023, which grew by 8.9% year-on-year. Revenues were driven by fresh contributions from new stores and resilient same-store sales growth, which continued to benefit from double-digit growth in transaction count. Gross margin is increased by 17 bps to 21.6%. in nine months of 2023, which we attribute to the increasing share of business of grocery. If we exclude the impact of grocery, supermarket gross margin would have increased by 22 bps year-on-year to 23.1%, largely due to the higher sales contribution of imported products. Meanwhile, it beat the gross by 10.3% to 6.7 billion on the back of healthy top-line growth, while store-related expenses were kept in check. Now I turn you over to Marielle for the drugstore segment. Thanks, Dean. Drugstore segment revenues increased by 12.8% over the first nine months to 24.4 billion on higher SSSG store expansion. Blended SSSG of South Star and Rose Pharmacy came in at 6.6% in nine months, driven by prescription drugs and maintenance medicine. Growth margin expanded by 91 pips to 21.1%. In nine months, due to increased penetration of house grants, coupled with a strong growth of prescription drugs, our healthy top-line growth, augmented by cross-profit market expansion, increased by 11.9% to $2.2 billion in nine months.

Our next speaker is Mia. Net sales of the department store segment rose by 11.2% in nine months of 2023 to $10.8 billion. Same-store sales continued to normalize to 9.8% after accelerating by 76% in the same period last year. Dropping the top line are categories related to back-to-school activities. Gross market increased by 33.5% to 30.9% in the 9 months of 2023 as a result of sustained growth of our higher-margin categories. The beta grew by 2.6% in the 9 months of 2023 to 717 in November. Similar to the trends in the first half of 2023, double-digit top line growth and GPM expansion were offset by higher OPEX from land power, utilities, and rent. Passing on to Ken.

The DIY segment posted flat excess G and net sales in the nine months of 2023. Stiff competition, particularly in one of our top categories, could affect the top line. However, Excluding pet food sales, DIY's SSS breed would have increased by 3% in the nine months of 2023. Gross margin for the segment was slightly down from 31.7% to 31.6%, largely due to markdowns in the cookware category, which slowed down after the pandemic. EBITDA decreased by 24% to 925 million, due to flattish to negative SSSG, while OPEC slows on higher, within this manpower and revenue. I turn you over to Serge.

Thank you, Ted. 100 million net sales grew by 6.4% in 9 months 23, 4.7 billion by 3.3% of 7% which benefited from the strong performance of the P&G stores, all located near schools and universities, and trusting Himalaya for RTE products. Roth money plus other income was steady for the nine-month period. NVIDIA declined by 7.9% in nine months to $408 million on the fact of increased effects at more stores are now operating 24-7 times this year.

Thank you. The specialty segment net sales rose by 5.6% to $10.7 billion in the first nine months, with SSSG of 4.5%. Mass merchandise, toys, and pet retail posted double-digit top-line growth for the period. Meanwhile, revenues of appliances and electronics were flat in the first nine months due to slow demand for home entertainment, laptops and tablets, and kitchen appliances, following increased face-to-face and out-of-home activities. Cross-margin expanded by 123 digits to 27.3% in the first nine months on the back of campaign and promotional support from vendors, higher DCPs, and assortment changes. Meanwhile, EBITDA for the same period for the segment declined by 15.5% to 764 million, which was dragged by the performance of Sabres Appliances, which has been affected by lower demands in sub-dealer channel. We note, however, that Sabres Appliances is pivoting towards the retail channel, which is a higher margin business. Thank you.

Yeah, thanks, Ruby. Moving on to our working capital, RHI's cash conversion cycle is at 26 days as of September versus 24.6 last year. This is due to lower payables as we keep advantage of vendors and stocks. For our balance sheet, we are in a net debt position of 9.2 billion with borrowings of 22 billion driven by the acquisition financing for the WPI shares. Not standing in that debt position, our balance sheet remains healthy with a net That's the equity ratio of just 0.12. ROA and ROE in the training 12-month basis came in at 2.8 and 5.2%, lower than last year due to the decline in income compared. Our CAPEX for nine months came in at 2.5 billion. 56% of CAPEX went to supermarket, 12% to drugstores, 11% for DIY, 10% for department stores, 6% for specialty, and 5% for convenience stores. I'll turn it over now to Stanley.

Thank you, Maylene. For corporate development, Robinson Sridhar has once again been recognized by the Institute of Corporate Directors with the Golden Arrow Award for our continuous efforts in improving our corporate governance standards and practices. We received a rating of 89.16 for our 2022 exposures. Just that kind of one shot at garnering two golden arrows. This is an improvement of our previous scores of 83.9 for 2021 and 66.93 for 2020. We will continue to review and update our corporate governance standards and practices to improve our scores. Rose Pharmacy Inc. gathered 3,000 runners in Cebu City for its fourth annual cancer runners run last July 16, 2023. This year's run raised 1 million pesos toward the benefit of Cancer Warriors Foundation, a patient support organization for families of children with cancer. South Star Drugs, in partnership with Maxicare Healthcare Corporation, hosted its 12th annual Run for Wellness. Gathering over 7,000 runners, the Metro Manila leg was held at the UP Diliman Academic Oval in Quezon City on August 13, while Naga Leg was held on September 10. A donation of P500,000 was made to UP Diliman's University Health Services for the maintenance of medical facilities and equipment, and P50,000 to Naga's Persons with Disabilities Affairs Office. To help give underserved communities access to vital information and healthcare services, EGP has intensified its Kaibigan sa Kalusugan Caravan throughout the country. From April to August, the caravan reached close to 13,000 individuals and communities in Metro Manila, Davao, Bulacan, General Santos, Zambales, Nueva Ecija, Isabela, Cebu, Laguna, and Cavite. The caravan features a generics 101 forum, free blood pressure and sugar monitoring, and free medical consultations and generics medicines.

Thank you.

Robinson Supermarket, in partnership with Century Pacific Food and Friends of Hope, bolstered its Fleas of Wellness campaign as it enters its second year. Coconut seedlings were planted in Barangay Ambon in Malungon, Sarangani, last August 31, contributing to the campaign's goal of 100,000 coconut trees planted in five years to benefit small businesses holder coconut farmers in Mindanao to foster sustainable livelihoods and promote environmental stewardship. In support of responsible seafood sourcing in the Philippines, we participated in the first Responsible Seafood Summit hosted by the United States Agency for International Development with over 200 representatives from the public and private sectors. Since 2021, our supermarket segment has been a partner of the fish-dried programs which fish the seafood in USAID, bringing responsibly sourced seafood products to select stores. Robeson Supermarket, Robeson Easy Market Shumwise, in partnership with Alaska Milk Corporation and the Philippine Department of Education, turned over 91,473 glasses of milk from June to September, benefiting 762 schoolchildren for 120 days. It started in June during the World Annual World Milk Day celebrations, and with the help of our partners, the Las Karamay Initiative benefits school children in Sinzayan Elementary School in Santiago City, Isabela, and Calabasas Elementary School in Mayamak Elementary School in Antipolo City. In terms of key milestones, Rojas Supermarket opened its 158th store at Juan Ayala in Makati City last August 3, while Robinson's Easy Mart opened its 128th store at TITX in Paranaque City last September 22. Both stores are in strategic locations, allowing daily commuters and local residents with a diverse range of options from fresh produce, grocery items, and on-the-go essentials with great ease and convenience. Meanwhile, Shopwise opened its newest store at Gateway 21, in Araneta City last July 28th. The new 4,000 square meter store features top-wise wide selection of groceries, general merchandise, and home and kitchen essentials from well-loved brands from all over the world. The store also has an expensive wine collection and a well-stocked deli with an array of cold cuts and cheeses. Blue Valley, Philippines. was recognized by True Value International as part of its 3 Million Club for 2022. The recognition was presented during the True Value Fall Reunion held in Houston, Texas last September 14-16. True Value Philippines has annually been a recipient of True Value International's 1 Million Club Award since 2014. The 3 Million Club Award is a significant milestone in our journey highlighting our continuous efforts in establishing true value as the go-to premium destination for home improvement in the Philippines. Moving on to our guidance for 2023, we are now looking at the net addition of 120 to 116 from 160 to 190 stores previously. A number of our projects may now slide to 2024, due to the late turnover of properties from investors, hence the lower guidance for store count. Meanwhile, we are now aiming for a blended SSMG of 4% to 5% from 4% to 6% previously due to the impact of high inflation with exemption. On margins, we are guiding for 10 to 30 bps GPM expansion versus 20 to 40 bps expansion previously. This new guidance takes into account the impact of lower margin growth in our business, which is growing fast. Finally, we are earmarking $4 billion to $5 billion for organic capital expenditures, down from $4 billion to $6 billion previously. This is in line with the lower store addition guidance. This ends our presentation for our nine-month updates. We will now open the virtual floor for the Q&A session.

Good afternoon. So we will be reading questions sent via the Zoom Q&A facility. But if you would like to ask your questions live, you can do this through the raise hand function. If you prefer this option, please do not forget to introduce yourself and identify the company that you are working for before you ask your question. So our first question is from Philip Felix from Philippine Equity Partners. First question, may I know when the merger between BPI and Robinson's Bank would be completed? I remember end of this year from previous disclosures. And then second question still related to BPI and our bank. On the balance sheet, what would be the account used to book this investment once completed? How many shares are you expecting after the completion of the merger? And the last question, when will the debt used to fund the purchase of BPI be fully paid?

For the... For the BPI, the PCC has actually approved already the construction. However, BPI has yet to secure the SEC and BSP approvals as of today. But even if BPI can obtain the approvals of SEC and BSP in November and December of this year, the merger can only take place on the first day of the following quarter, January 1st. And if it happens in first quarter, then the merger will happen in April 1. So that's the BSP rules option. And number two, the balance sheet of what would be the account used to book this investment. The shares that will be received from the BPI or bank merger will be booked under financial assets. It's similar on how we book it for the purchase of the 4.4% stake in BPI. and we will be getting around 125.6 million additional BPI shares. And total will be 341.6, or equivalent to 6.5% of the land. On the third question, on when will be the debt used to fund the purchase of BPI be fully paid? Based on our forecast, assuming the defense of the performance of our profitability and cash flow, we're looking at paying off the debt between 2027 and 2020.

Thank you, Gina. So the next set of questions would be from Carissa of Macquarie, all related to the supermarkets business. First question, how much was transaction count versus ticket growth in 3Q and 9M? Second question, how much did gross salary contribute to sales in the first nine months? And third question, how much did private label contribute to sales in the first nine months?

Hi, Carissa. So for the Q3 ticket size, it's down actually by 8% compared to the white label of negative 7.8%. While for the transaction count, we're up by 11.4% for Q3. and up by 14% for YTV September. For the second question, how much did Dulzari contribute? It's a little less than 10%. The third one, how much did private label contribute to sales in nine months of 2023? It's around 6.6%.

Thank you. Next question is from Nadine of JP Morgan. Which segments are driving the cut in the high end of SSSG and GPM guidance for this year? How about for the huge cut in store opening targets for 2023? Can you also ask for the latest breakdown of store openings for 70?

On the cut in the same-store sales growth, it's mainly because we're coming from a high base, and since 3Q were already down in terms of our same-store sales growth because of the high inflationary environment, yeah, we think, you know, But it's still within our target. They were initially looking at 4% to 6% same-store sales growth for the year. Now, year-to-date, we're at 5%, except that in 4Q last year, we're really coming from a very high basis, around 10% same-store sales. On the store additions, there's a lot of delays in terms of completion of the store expansion. Now we're looking at 120 to 160. So in terms of breakdown, supermarket would be around 30, drugstore at 80, DIY is around 7, CVS negative 7, and then the balance would be specialty stores. On the high end, which is around 160, depending on, you know, how many projects can be closed, and so we're looking at 35 for supermarket, 100 for ground stores. And then 10 for DIY, 0 for CDS, and then the balance would be specialty stores.

Thank you, Gina. Next set of questions would be from Carissa on Regus Partners. Could you provide more quarter or inter-quarter SSSG trends across the various formats? For supermarkets, how is 3Q SSG broken down between traffic entities? in basket sense. I think that was the second question was already answered, but maybe just more on the three key trends that we saw for each segment. Okay. Any indications in the fourth quarter? It says the three trends.

Yeah, four point ground source.

This is basket size and the transaction .

Yeah, for drug stores, it's positive 1.3%. Transaction called basket size, positive 2.2%. So they're one of the few where basket size and transaction crowd increase. For department store, positive 2%. Transaction count and 4.4% basket size increase, so also positive, both transaction count and basket size. For DIY, it's down 5% for transaction count, positive 4% for the basket size. And convenience store, it's 2.5% up transaction count, basket size is Negative 0.7%. And specialty depends on the format.

It's a lot.

I will come up to you on specialty.

Yeah. There is this next question. Third quarter, has the history broken down between traffic and basket size? Just to reiterate, plus 11% transaction count in 3Q for supermarkets, and negative 9.6 basket size for supermarkets. And then her next question would be, any indications on fourth quarter SSSU?

I think so far, positive. Fourth quarter. The few that I saw are positive.

Okay. Yeah, thank you. Next question. Chairs of RHI at an all-time low. Does management intend to increase and extend its share-by-lock program?

For now, there's no nothing yet on the buy-back.

No addition.

Thank you. Next set of questions from Stephen Oliveira. Hi, thank you for the presentation. Number one, you mentioned the prior rental costs partly contributed to higher OPEX in the first nine months. Can you share what led to this development? And just to follow up to that, given OPEX pressures, do you expect operating margins to hold for the balance of the year? So that's his first set of questions.

Yeah, there's no rental discounts now.

That's why it's higher. But actually, in terms of rent per square meter, it's the same, except that we were getting discounts last year and also in 2020 and 2021.

So, yes, Stephen's next question is related to Robinson's Bank and BPI deal. So, do you have the option to acquire more shares as part of this merger?

I think we will stop at 6.5%. We already incurred a load for that.

Okay, next question is from Ishen. What led to the lowering guidance of 2020 in BGN? I want to repeat what you mentioned earlier.

The lower guidance on store additions because there are projects that will slide to 2024, meaning delayed turnover by the net serve of the site and also delayed construction. And also we have some issues on getting permits from FDA and other, you know, government agencies.

Thank you, Gina. Next set of questions from Toner Tanare. Number one, how much interest expense related to BPI financing in the third quarter? And how much do you expect in the fourth quarter?

Yeah, around 250 this quarter. We expect it to go lower this quarter for as we pay off some of our debts related to BPI.

Next question is still from Don. Will you help explain why gross margin and competitive margin of the CVS format declined in the very quarter quite significantly?

It's because of the increase on high rental costs and all tax went up because we are operating more credit for our sports compared to last time. And second thing, which is we have a slow sales in amount of all this, which is impacting the dividend margins. Thank you so much.

Next question is from John Day of UBS. Equity losses widened in the third quarter. What businesses are driving this, and are you expecting these to widen more in 2024? And second question is, who's driving increased competition for the DIY segment?

For the equity losses that would come from our investment in Gontay, however, we're doing something about it that will lessen the losses and maybe eliminate some of this.

For DIY, the competition is in the dog food category. Without the dog food sales, our SSHG is up by 3%.

Okay, next question is from Anthony Atikera. Did you build a Robinson supermarket in Vermosa in Cavite?

Hi, Anthony. No, we did not. It's a good development, but then again, we already have several stores within the area, so we opted not to go into Vermosa.

Thank you. Next question is from Han. As the supermarket's deficiency in any market share loss to hard discounters like DALI, do you plan to reduce prices to protect market share?

There's a slight effect. We've actually felt a slight effect. But we actually do not have any intentions of reducing our prices because that's not our business model. We, however, have OSAVE that competes directly with DALI.

All right. Next question, Rainier, Ivan Yu. Can you give more color on the decline of EBIT margins? Is it coming from manpower or rent? And will this trend be the same for the following quarters?

It's actually the three major costs or expenses are rent, utilities, and manpower. Those all three. We're seeing higher increase compared to the increase in sales.

Thank you, Gina. Clarissa from Macquarie has a few follow-up questions on the other segments. Her first one is relating to the department stores. So what's the reason for the margin decline year-on-year in the third quarter?

Similar to what Gina said, it's due to increasing manpower, utilities, and rent.

Then her next question is for CBS. What's the sales contribution of RTE or Ready2Me in the first nine months? Our current trend is 40% of our business needs. Okay, 40%. And then DIY, what's the reason for GPM subtraction in the third quarter? How do you plan to improve on gross margins moving forward?

The slight decline is caused by the moving out of our pandemic products. Moving forward, we need to focus on our core categories.

Okay, and then the next question is from Denise Mokhin. How much of the around 800 million interest expense booked in the third quarter was attributable to the financing of the DPI share purchase?

Thank you. Yeah, between 600 to 650.

All right, thank you. Next question is from Kimberly Naro, BDO. Which minority investments led to the negative equity in their earnings and associates?

Go time? What is go time?

The next question is from Miguel Reyes, BBO, BDO Securities. Good afternoon. Thanks for the presentation. Do you expect Robinson's Retail's interest expense to be higher than expected, given higher for longer interest rates?

We expect it to be lower in Q4 as we partially repay some of our BPI-related loans. some of the working capital moves as well.

Okay, thank you. Then Yixing has a few follow-up questions. The first one, given the pushback on store expansion to next year, so for next year, are you expecting much higher store openings?

We are not done yet with our budget, but we expect it to be higher.

Okay, and then he has a follow-up. Any plans to inject more capital in GoTrend?

There are cash calls, yes.

All right, thank you. And then Carissa has a few questions again from Carissa from Aquari. What's the reason for the higher effective tax rate in the third quarter? This is amounting to about 29% versus 24% in the first half and 18% in third quarter of 2022.

It's because of the I feel dicey losses and the interesting experience.

And her follow up question is, can you provide a breakdown of the store closures in the first few months? So we closed 44 stores. In total, the supermarket, we closed four drugstores, 13. DIY, five department stores, one CVS, 14 specialty center. The next question is from Yong Hwase. Could you share more on the expansion plans for CVS in the next three to five years, if any?

Right now, we're focusing more on Robinson's Easy Mart. So the expansion will be on Robinson's Easy Mart. Like this year, we're opening like 20 plus, 30 new stores on Robinson's Easy Mart. 36 on Robinson's Easy Mart. And now more will be, it will be higher, more new store openings for Robinson's Easy Mart in the coming years, next year in the coming years.

Thank you. Nanine Bautista from J.P. Morgan has two follow-up questions. The first one, do you still foresee the three main OPEX drivers growing faster than the top nine in 2020?

The base will be higher now, which means it should be growing more or less like say, for example, for Retano, Recto, discounts anymore, so it's like 5%, I guess, because that's the annual increase in our rent. And then utility costs, I think in September we're seeing already a reduction in utility costs. And then for Manpower, that one we're seeing a bit of increase because of some regional adjustments for minimum wages.

Thank you, Gina. Second follow-up question, Nadine, is there a deliberate push to increase Grocery's share as percent of supermarket sales? Does management have a mid- to long-term target for this? And can you remind us again of the margin differential for sales to Grocery?

It's not a deliberate push. It's just that the business is really growing very strong because they're expanding in new territories and areas. And they're, you know, opening new hubs. Right now, the number of active Sarisari stores in Rosari's portfolio is around 90,000. So imagine if they will double the number.

Right, and then Nadine sent two more questions. Can you share more further on the capital allocation framework and strategy of the company? What is... management's approach for non-performing investments?

For non-performing investments, we're trying to limit stock capital inflation.

Yeah, and then Nidhi also has a question on BPMML. So what's the latest update or the possible divestment?

We are writing off our investments in UDML.

Great. Thank you. Don't ask the follow-up question. What is the known outstanding for DPI acquisition as of September 2023? And how much do you expect this to be by the end of this year?

Yeah, it's around 15.4 billion. We expect to end the year between 13 to 13.5 billion.

And then the last question in the Q&A box is from Ray. So in supermarkets, third quarter and 2023 sales, do you have a figure on volume growth? Then do you have a forecast of dividend income coming from BPI for next year, for a full year next year?

For supermarket, transaction count increases

Volume.

Volume. Ah, we don't have volume. We only monitor transactions.

It's already flat. Units, I guess.

Are you asking for units?

But if it's units versus absolute sales, it's already almost flat. Almost the same.

Almost the same. We have a forecast of dividend income coming from BPI for 2020 for... We know that their payout ratio is around 35% to 40% of their prior years. All right.

Thank you. Next question is from Joyce of CLSC. Is there a threshold that management is setting for growth, given that its growth is also putting down blended margins of the supermarket division?

I think what we're after is really the absolute increase in our revenues and profitability. The margin, I guess, you know, it also gives us leverage when we negotiate with our vendors, even if Rosario has a lower margin. I think you need to look at the business based on absolute amount, not anymore on margin.

Yeah, and then Joyce has a follow-up question. What are the company's expansion plans for Jose?

Jose has its own management. They're also expanding aggressively. They're probably going to hit, what, Dallas store network maybe in two years.

Thank you. Next question is from Tone. What kind of growth in terms of annual sales and store network expansion for supermarkets and drugstores can we expect for the next few years? Which geographical areas are potential opportunities for Robinson Street to tap into?

So for the drugstore segment, we're looking at a five-year figure of 10% to 12%. And for the expansion areas, still the area of dominance is solid and zone, and also NTR would like to demonstrate.

And same with the supermarket, more or less a figure of about 10% year-on-year. Store network increasing by... about 40 stores in the year.

Right, so at this point, there are no more questions from the audience, and we can now end this one, Mr. Mina.

Thank you very much. See you at the next earnings call.