Robinsons Retail Holdings, Inc.

Good afternoon, everybody. Thank you for joining us to review our company's unaudited results for the full year of 2023. Gina Lipari, the company's investor relations officer. The participants from our company for this call are our president and CEO, Ms. Rubina Gokin-Oyete, our COO, Sandy Paul, our CFO, Mylene Casiban, the Group General Manager of Robinson Supermarket and No Brand, Christine Torres, the Group General Manager of the Drugstore Segment, Joanne Arceo, the Group General Manager of Robinson's Department Store and Toys, Simina Chua, the Group General Manager of DIY and Pets, Ben Sobono, The group manager of Uncle Jam's, Donald Yoncho. The group general manager of our appliance business, Joey Santos. This presentation will cover the company's financial performance for the full year of 2023, an update on our store network, and the company's recent developments. Q&A session will follow after the presentation. As a reminder for the Q&A session, Kindly use the raise hand function if you would like to ask your questions live, or please use the Q&A function on your Zoom dashboard to type in your questions. Kindly limit your questions to a maximum of three during follow-up so we can accommodate as many participants as possible. You may key back in into the call or into the Q&A for additional questions. With that, I will turn it over to our president, Ms. Hughes. Good afternoon. Here are the highlights of our results for the full year 2023. Consolidated net sales grew by 7.4% to 192.1 million. Blended same-store sales growth of 3.9%. Gross profit increased by 7.9% to 45.6 million. EBIT of 8.9 billion, up by 2.3%. Core net earnings were slightly higher by 0.6% to 5.6 billion. Net income to parent declined by 29.5% to 4.1 billion. Capital expenditures of 4.2 billion. Concluded net sales for the fourth quarter came in at 53.9 billion, up by 4.2%. Lended SSSG continued to normalize in the fourth quarter due to the impact of inflation and a high base in the previous year. Full-year net sales reached 192.1 billion, higher by 7.4%, with SSS fees at 3.5%. The business units that posted net average, above-average net sales growth for the year were drugstores and department stores. This is a more detailed picture of our P&L for the full year. Gross margin expanded by 11% to 23.8% on better product assortment and increased vendor support. Even gross by 2.3% to 8.9 billion as revenue growth and gross margin expanded were offset by higher OPEX from new stores. Net income to parent declined by 29.5% to 4.1 billion. The decline is mainly due to the following. One, Reversal of Forex gains worth 357 million in 2022 to a 65 million loss in 2023 due to the appreciation of the TESO. And two, reversal of the equitized earnings in 2022 amounting to positive 14 million to a 708 million loss in 2023 with the derecognition of Robinson's Pax net income under equitized earnings following the merger with BPI, and three, losses from startup investments. Meanwhile, we note that our investment in BPI yielded a net positive carry in 2023, significantly better than earlier expected of the relative borrowing related to the purchase of BPI shares. Our core earnings, which exclude forex, interest income from bonds, losses from associates, Interest expense and dividends related to the BPI shares came in at 5.6 billion, up by 0.6%. In terms of contribution, the Staples businesses, namely supermarkets, drugstores, and convenience stores, accounted for 77% of total sales and 79% of total bid draw in 2023. Meanwhile, our discretionary formats mainly department stores, DIY stores, and specialty stores, comprised 23% of total sales and 21% of total rebate value. Our store count in the Philippines stood at 2,393 as of December 31, 2023, composed of 349 supermarkets, 1,054 drugstores, 50 department stores, 230 DIY stores, 408 convenience stores, and 302 specialty stores. We also have 2,127 franchise stores of QGP. In 2023, we added 84 net new stores, but most of the new stores came from supermarkets and drugstores. Now, Christine Flores, Group GM of Robinhood Supermarket, will discuss the supermarket segment. Good afternoon. Supermarket net sales increased by 7.4% in 2023, $203.6 billion driven by new stores and full-year sales for sales growth of 3.2%, which benefited from the double-digit growth in transaction counts. We saw a 30 bps improvement in new gross GPM in Q4 2023 to 21.7% due to higher sales of important products and increased vendor support. This allowed our full-year GPM to settle at 21.7% flat year-on-year. Excluding the impact of gross salary, which now accounts for almost 10% of supermarket sales, segment gross margin will have increased by 40 bps in 2023. EBITDA rose by 10.3% to 9.4 billion, supported by resilient top-line growth and efficient cost management. Now I turn you over to Joanne for the drugstore segment. Hi, good afternoon. Drugstore net sales rose by 30.2% in 2023. We created 3.4 billion in robust SSSG and incremental sales from new stores. Limited SSSG of South Star Drug and Rose Pharmacy came in at 7.1% for the whole year. Growth was driven by sustained demand for prescription drugs, particularly maintenance medications, while OPC cough and bone medicines and antihistamines also performed well. Growth margin expanded by 70 pips to 21% in 2023, which we attribute to the increased penetration of house rags and better category mix. Strong top-line growth augmented by 3 p.m. expansion allowed Vivenda to grow by 13.1% to 3 billion in 2023, in line with the increase in net sales. And I'll turn it over to Selena for the department store segment.

Net sales of the department store segment grew by 8.2% in 2023 to 16.3 billion. Same-store sales normalized to 7%. Categories related to back to school, travel, and sports drove the top line. Gross margin improved by 40 bps to 30.6% due to higher mix of higher margin categories. EBITDA was flattish in 2023, ending the year at 1.3 billion. Healthy top line trends coupled with gross margin improvements were offset by higher OPEX from rent, manpower, and utilities. Let me turn you over now to Ted for the DIY segment.

The DIY segment posted slightly lower top-line trends in 2022. Intense competition and a decline in demand for pandemic items like home and kitchen products affected revenue. Competition in the dog food segment, one of our top categories, was also intensified with more players entering the market in recent years. Excluding pet food sales, DIY segment-led sales would have increased by 5.5% in 2023. Gross margin was slightly down from 31.1% in 2022 to 30.8% in 2023 due to markdowns in the kitchen categories. EBITDA declined by 20% to 1.2 million pesos in 2023 due to lower SSSG and higher impacts from rent, utilities, and manpower. I turn you over to Donna of Uncle John's.