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.