Robinsons Retail Holdings, Inc.

Thank you for joining us to review Providence Retail's unaudited results for the first nine months of 2025. I'm Angela Torres, the property planning and investor relations officer. The speakers for this call are Stanley Kuo, our president and CEO, Christine Juarez, our MD for the big format of the food segment, Joanne Arceo, our group GM for the drugstore segment, Selena Chua, Our advisors for the Robinson's department store, Voiceras, Tola Academy and Fashion Group. Ted Toluono, our group GM for the DIY segment and Vets. And Don Don Gao, our GM for Robinson's Appliances. Our chairman, Ms. Romina Gomoyembe, an advisor for corporate planning, Gina DeTalum, are also in this call. So flash this agenda for this afternoon's call. So we will provide an overview. of our financial performance and share key updates across the organization. As a reminder for the Q&A session, please use the Q&A function in the Zoom dashboard to type in your questions. Please limit to a maximum of three questions, including follow-ups, and you may queue back into the Q&A box for additional questions. You may also use the raise hand function if you would like to ask questions like, So with that, I turn you over to Scott McCall, our CEO, to discuss our financial thoughts. Here are the highlights of our third quarter 2021 results. Consolidated net sales increased by 4.3% to 15.8 billion. Blended central sales growth of 1.6%. Cross-profit growth by 5.9% to 12.5 billion. EBIT grew by 3.1% to 2.3 billion. net earnings increased 13% to $1.5 billion. Net income to parent down by 13.5% to $872 billion due to higher interest expense and enterprise losses from wholesale. Earnings per share rose by 12.9% to $0.79 per share due to lower number of outstanding shares from the PLI buyback. For the first nine months of 2025, consolidated Lended same-store sales flow registered at 3.1%. Cost profit rose by 6.2% to $36.4 billion. Event grew by 4.5% to $6.6 billion. Order trainings improved by 3.9% to $4.2 billion. Earnings per share declined 2.45% per share. Now, if we look at our P&L, net sales grew 4.3%, 50.8 billion in the third quarter, bringing nine-month sales to 149.3 billion, up 4.8%, despite heavy rainfall affecting portfolio. Same short sales growth still grew by 1.6%, year-to-date SSG at 21.1%. Even close by 3.1% to 2.3 billion in the third quarter, and by 4.5% to 6.6 billion year-to-date, driven by improved category mix and continued vendor support. The income to parent declined by 13.5% to 807.2 billion in Q2, due to higher interest expense from the EFI retail buyback, and higher associate losses Earnings per share, however, increased by 12.9% due to lower shares outstanding from the shares by half of their BFI legal shares last year. Year-to-date net income apparent reached 3.1 billion, but lower by 60%, reflecting last year's high base that included the PPI R-Bank merger gains. For earnings, however, rose 3% to 1.5 billion in third quarter. 4.2 billion here today, up by 3.9%, supported by the growth in eBit. All segments posted positive net sales growth in the third quarter, except for the department stores, which was impacted by the earlier starting school year. Drug stores delivered strong performance, exceeding 12-digit growth in the third quarter. The core staple of the businesses, food and drug stores, accounted for 80% of total net sales and 85% of total EBITDA for year-to-date September. Meanwhile, our discretionary formats, namely the department stores, the annual specialty, comprise 20% of net sales and 15% of EBITDA, respectively. In the first nine months, we opened 48 new stores, mostly under the food and drug store banners. They are a total score count of 2,501. Our score count is comprised of 777 full segment scores, 1,158 short scores, 51 department scores, 299 PAY scores, and 286 specialty scores. In addition, we have 2,118 franchise scores of PPP, and most store openings are expected with the coming months. Passing me over to Dean Perez for the full segment. Thanks, Frank. Food segment sales rose by 4.5% to $31.1 billion in the third quarter of 2025, driven by same-store sales growth of 2.8% and the contribution of 19 newly opened stores. Same-store sales growth was supported by higher basket size. Year-to-date sales reached $90.2 billion, up by 4% during the year. Our gross profit grew by 7.8% to $7.3 billion in the third quarter and 5.6% to $20.7 billion in nine months. outpacing revenue growth. And this also supported the increased vendor support and higher penetration of private label imported products. This led to a deeper growth of 6.6% to $2.7 billion in the third quarter and 5.2% to $7.7 billion in nine months. I turn it over to Joanne for growth scores. The growth score segment posted double-digit sales growth in the third quarter, reaching $10 billion, driven by same-store sales growth of 5.1%. and contributions from 57 new stores. For year-to-date September, net sales increased by 9.8% to $28.9 billion. Gross profit rose by 14.9% in third quarter, and 15.4% year-to-date, outpacing revenue growth. This was supported by price adjustments, higher penetration of house brands, and improved vendor support. As a result, EBITDA grew by 14.2% to $899 million in third quarter, and developed 0.3% to $3.5 billion year-to-date. Moving over to Sydney Health. Department store net sales declined by 11.7%, so $3.3 billion in the third quarter due to the shift in school opening to June this year from July last year. Store renovations also in preparation for the fourth quarter season and skip competition. Year-to-date, Net sales still rose by 2.1% to $11 billion, driven by the opening of Robinson's department store, Pagadigan, in the second quarter. As a result, gross profit declined by 10.5% in the third quarter. However, gross profit for the first nine months of the year still grew by 3.1%, faster than net sales growth, driven by a favorable category mix and strong vendor support. EBITDA declined to $535 million in the first nine months, reflecting higher operating costs. Let me turn you over to Ted for the DIY segment. Our DIY segment hosted a 2% growth in head sales in the third quarter, to $2.9 billion, supported by Hibs Forest and a friend around with SSSG, which turned positive at 1%. YTP head sales reached $8.6 billion, or that year-on-year. Gross profit was flat at 951 million in the third quarter and 2.8 billion in the first nine months. But markdowns were affected by increased private label penetration and introduction of new higher margin items. However, EBITDA declined to 916 million pesos in the first nine months due to higher open funnel and profit improvement at the distribution sector. I cannot remember who Limits for the specialty segment those 7.1% return to $3.5 billion, fully up-to-date limits yield to $10.6 billion. All formats offer positive gains, with toys, mass merchandise, and right-side sneakers delivering lower digital growth in January. Appliances return to positive lows in $9 billion due to the trade demand in home entertainment and home appliances. Gross profit increased by 2.8% to 3 billion in 9 months, lower than the revenue growth, weighted down by clearance activities in appliances. Evita declined to 423 million due to higher OPEX. However, appliances Evita improved quarter-on-quarter up by 14.1% with market recovery. I'll turn it over to Galeon. Our cash conversion title rose to 29.9 days, driven by higher inventory days at 81.4, as stocks of in-debt products and important items increased to meet strong demand for the peak season, and also our payable days were lower at 56.0. On our balance sheet, our net debt as of September 30 increased to 30.1 million, This is largely due to the acquisition loan for the BFI retail cherry purchase, which she did last May. Despite this, our balance sheet remains fairly ugly, with an inept debt-to-equity ratio of 0.4x. Return on assets and return on equity normalized to 3.4% and 6.9% respectively. This is following the absence of a one-time gain from the BPI and Robertson stock merger, which was booked in early 2021. In terms of our money topics, this amounted to 3.3 billion as of 9 months. This is up around 4% year-on-year. Hold accounted for 61%, followed by growth score segment of 13% share. So the balance is accounted for by the discretionary formats. And now I'll turn you over to our policy vote. Now, allow me to update you on some of our minority investments in the OSAE growth and growth side. OSAID's store count in the Philippines more than doubled to 662 in nine months from 318 last year. This led to net sales rising by 2.8 to $349 million. Meanwhile, OSAID's customer base climbed to 7.5 million. total platform value or the value of all its business lines increased by 21% from last year to $693 million gaining a total growth in corporates. From there we have taken on some key corporate developments across the business. So since eBay was named one of the one of my magazines from We were one of the only 10 Philippine firms on the global list. Southstar Jobs welcomed 13 Eurodivergent employees in August, marking their transition to regular employment after completing training under Project Incredibles, part of Southstar's ongoing commitment to inclusive hiring since 2017. On our guidance, we are maintaining our full-year 2025 guidance, targeting 130-170 net new stores, mostly from the food and drugstore segments, where a bulk of the stores will be open this quarter. We are aiming for a blended soon-source CSQ, 2-4%, 20-30-bitch expansion in gross margin, and allocating 5-7 billion for organic topics. This ends our presentation for our nine-month results. We will now open the floor for Q&A session. We begin the Q&A with the questions we received ahead of time. So from Felix of Philippine Equity Partners, can you give us an update on the remaining balance of the debt used for the acquisition of the DTI shares? Also, what is the 925 interest related to this? Thanks for the question. Out of nine months, outstanding balance on the ZPI-related acquisition loan is $10.8 billion. So this is unchanged versus June 2025. Interest expense is $500 million. The second question, are all remaining treasury shares coming from the buyback of BFI ownership treasury shares. Okay, so our treasury shares consist of two components. The first one will be 158 million shares. This is coming from the regular buyback that we started last March 2020. And then we have also around 315.3 million shares from the BFI in the bear buyback. So it's a component of a combination of two types of buybacks. So total shares under treasury has come about 474 million. But if you will recall, we are currently in the process of retiring the 158 million shares. This is from the regular buyback program. We sought shareholder approval last September 16th to cancel or retire these shares. And it could take about six months to complete the entire process, at least six months. For the final question, how much dividends did RHI receive from its 6.5 state and DPI? Okay, so the dividends, the dividend income from this state is about 680 million pesos in nine months. For questions from Nadine Bautista of J.D. Morgan's, What is the SSSG of the supermarket and CVS banners in the third quarter of 2025 respectively? How are basket size and transactional kind of pending in both sub-centres? Thank you for the question, Sandeep. For 3Q of supermarkets, SSSG is about 3%. And for Humphrey Johns, in 3Q, it's negative 1%. In terms of basket size, in 3Q for supermarkets, we're up about 7% to 8% versus last year. And for Hondo Johns, we're up by about 1% in 3Q versus 3Q to 3Q. Another follow-up from the interview is, in the follow-up, can you share color of trends and intensity of supplier support in 3Q 2025 versus 2Q 2025 and N2024? Which product categories are seeing higher than average supplier support? Okay, sequentially from 2Q to 3Q, we saw an improvement in supplier support. So generally in the third quarter and in the fourth quarter of every year, supplier support comes up. This is particularly because in preparation of the holiday, it takes even. On a year-on-year basis, for a full year, we should be seeing an increase in supplier support. The product categories where we're seeing more supplier support would be in the food segment, or in the food categories, Again, this is largely related to business-related shopping, but the other categories, the non-food categories, are also seeing very decent supply and support. This is Joe from the Dean. On wholesale, what is SSSG in 3G 2025, and what is the trend between market size and transaction count? Can you share the latest EBITDA figures for wholesale? What is the target EBITDA rate even for wholesale? Sorry. Okay. Maybe we can have your Ness answer the questions. Hi, Ness.

Yes, sure. I'm here. Thanks so much. Thanks for the question. I appreciate that. So our SSSG is at around 19%. Can you hear me? Hello?

Okay. Okay, go ahead.

Okay, perfect. Yeah. So our SSSG for the third quarter is around 19%. And that primarily comes from transaction count. So that is, yeah, almost all of that is transaction count. But this last year, basket size remains relatively stable. In terms of EBITDA break-even, we are still targeting or we are targeting at the moment on a four-year basis to break even in 2026.

Thank you. For premium bikes, what is the latest update on the approvals for the premium bikes acquisition? When are you expecting it to close? Okay, so this is still under review by the Philippine Competition Commission. We're still in phase one. And we still expect to close this year. So this is the target. Thank you. And then outlook for 2025, top line SSG and margins per second? Okay, on a blended basis, as was what was mentioned earlier, we're looking at 2.4%. and gross margin expansion of up to 30 basis points. On a per-segment basis, more or less should be aligned with this one. So food would be about 3-4%, which is the main driver of margin expansion of around 30 basis points. So a question from Victor Cook. Will the shares purchased from VFI be cancelled? And the second question, how will this purchase affect your dividend policy for the company to maintain UPS? Thank you, Victor. Still no plans as of today. We mentioned in the stockholders' meeting that there's no limit or there's no time limit as to when we can hold treasury shares. So, again, no plans yet for this fund. In terms of dividend policy, we're maintaining 943 cents. payout ratio versus the previous year's net income comparison. Comparison of buy-off for a supermarket only excluding overdones. What is the SSSG in 3D2025 and 9M2025? What is the same store growth and ticket size versus transaction count in 3D2025? Another question would be what were the revenues from gross profit even though in 3D2025 40.5. Hi, Teresa. So, for supermarkets, when we excluded Uncle John's, M3Q, SSSGF about 3%. And then for 911s, about close to 4%. Pickup size for supermarkets would be about 7% to 8%. In the third quarter, it's And then revenues were up about 5 to 6% for supermarkets only in 3Q. For 9M, it's about the same. And then a bit, though, we're growing faster than net sales for both 3Q and 9M. And JPM supermarkets only were up about around 20 to 40 basis points, 3Q and 9M combined. All right, thank you. For Department Store, so from Nadine Bautista. Can you share what specific sub-setments drove the steep drop in sales in SFSU? Any SSSG sales indications you can share so far for October? And then we have the second question. Can you expound on the SIF competition mentioned online for the Department Store? Who are the key players you're looking out for? Okay. For the sub-segments that affected the SSSG, these are more or less the departments, the faculty school-related departments, such as shoes and bags, sports, children, men's and ladies of color. So next question. We're affected by the online sales and marketplaces. Thank you for the question. I think that what we see is the first few months um some of our mini mini marks are affected in terms of dropping but this is because of that element of curiosity um yeah element of curiosity and in the local in the neighborhood but after a few months we're able to see our recovery in our sales because um number one is a different market they're targeting the lower end mass market we target the broad middle income market plus um at about We actually complete the weekly basket requirements of shoppers. So we have fresh items as well that normally discount is not being provided. All right, thank you. From Denise Hokey, what were the respective financing cost amounts related to pay, the DPI share buyback, and the financing of PPI shares for 9-10-20-25? Okay, hold on. For 925 for BPI, it's 500 million pesos. For BFI, it's about 280 million pesos. All right, thank you. From Q1T, how much dividend from BPI units expect to receive in 4Q2025? Okay, the dividend per share is paid in the second quarter was 2.08 from UPI. So they usually pay in June and sometimes the fourth quarter. So they pay at 2.08 and the other one 300 million shares. So that's the amount in 4G. And then another follow-up. Can you share the expected interest expenses in 4G 2025 and 2026? Or Okay, thank you. What? I know there's another question from T1P. Why would they find an SSSG department store and outlook for 4Q? The SSSG department store declined in the third quarter of this year due to the shift in the Baku Schools opening, which was from July last year to June this year. But we expect to rebound in the last quarter of this year as our major renovations of our key stores will be completed by then. and sales will normalize. All right, thank you. From Paul Garcia Regis, given the recent buyback of GIFI shares, how much debt was available to complete the transaction, and what is the increased interest expense as a result? This is a question that has been answered already. The issue to provide further on that, it's about around 15, a little over 15 billion pesos to finance the GFI retail buyback. And in nine months, we think it's expensed about 280 million pesos. All right. Thank you. Another question from Paolo. How have the different segments performed so far for the month of October? Are we seeing sales and management pay down for discretionary? This is mid-month October, so our flash. Our food industry is holding up pretty well, even for our drugstore business. For the other formats, like DIY is positive, but we're still seeing some challenges in the rest of the discretionary items, sorry, formats. All right, thank you. And then a final question for the food segment. How do you describe the current issue or behavior trends? Is general trading and or preference for value so prevalent? Downgrading isn't that evident anymore, at least in the last two quarters. And the reason why we think this is so is because basket sizes are actually increasing. So in second quarter, basket sizes were up double digits. And then 3Q were up 7% to 8% on a year-on-year basis. So with inflation, it's quite steady at 1%. below 2%, we're seeing a very positive impact in terms of consumer baskets. Very well, thank you. From . What led to the 6% year-on-year decline in royalty, rent, and other revenues in 2020 size? I think this is just timing in terms of I can get back to you for more details. Thank you. What drove the 17% year-to-year increase in cash flow effects in 3G 2025? Can you define it in a fast-forward? Can you clarify that question on such OPEX? OPEX is only an inclusive six-person name. OPEX excluding depreciation or cash OPEX And then another question. What drove the higher effective tax rate in BD 2025 to 29.5% versus 25.6% in BD 2024 to under 20.2% in first half 2025? What effective tax rate are you looking at, Morris? Those are just quarterly timing, according to our taxes, but we're taking a look at around 23% per year. Great, thank you. Two questions from Chris. How is SSE trending so far in October, and what is your sense of mixing yourself in? Are you seeing improvement in supply chain? I'll just clarify this again. For mid-month, this is a splash. We're about over 3%, So this is slightly above the midpoint of that 2 to 4 percent blended guidance that we have for COVID. Thank you. From the email piece of the department store, any SSG sales indications you can share so far in October? Where do you expect FY25's SSG to end up? Well, Our operations remain challenged due to many weather disturbances and earthquakes, and also our major renovations are still not completed. So, we expect to end the year positive at low single digits. Thank you. From Rainier View, what is the impact of the G5 divestment with RHS partnership in Meadows, France? Thank you, Rainier. So, the partnership with BFI in terms of their Meadows Private Maple brand is intact. So, this will be maintained even if they're no longer shareholders in the company. All right. Thank you. For Michaela Germana, can you expand on the breakdown in revenue for the specialty site? What person did revenues account for appliances in other specialty stores? Thank you, Michaela. Appliances would be about 60 to 65%. Max merchandise and toys would be about 15 to 16% each. And then the balance would be vets, beauty and lifestyle sneakers or social products. Great, thank you. From PIR, can you comment on the overall demand scenarios across your various business formats? Any trend of the consumption that you can share What would be SSH 8-order drivers going forward? Very healthy for our food and drugstore businesses, for the four safest businesses. In fact, master sizes in the third quarter alone are up. We're very happy with what we're seeing. In terms of margin drivers, a couple of things. Number one, for the Increasing our mix of private items, the for the drugstores and we're always improving the mix to see what works best and hopefully we get margin of living from that. And then we're also adding in there for important items, especially for the food business, which I'd also like to know. All right, thank you. Couple of questions from followers here. will 2026 see similar store expansion plans? We opened about, on a net basis, around 50 new stores. Our target for this year is at least 130. We're still aiming to achieve that. Historically, we're opening a lot more stores in the second half of each year. For 2026, we will provide more fodder in the next two years. Another question from Paolo. Given that the joining store openings will be in 4Q, did we see an increase in re-operating expenses in 3Q? Actually, Paolo, I think it's not much because our cash flow tax in 3Q, or this tax, excluding depreciation, is up by only 6%. Paolo, can you expand for 2026? We'll provide more for you, Paolo, on the next one. Perfect, thank you. From Nadine Movista on DIY, when should we expect more wind pressures from workdowns to subside? I think it would subside by the year 10. Thank you. From Micaela Bermata, which regions or areas in our HR are we prioritizing for new slow openings? Thank you for that question. We tried to open where we think we can make money, but in the first nine months, around For 70% of our new stores are more outside Metro Manila. And for very few regions, because it's much more saturated here in the Metro. Great, thank you. From a casino, can alert have been included in Q3 performance? If so, how much did it function with the top line of permits? And how much do you expect? I have a scene we haven't consolidated yet. premium bikes yet because we still have to wait for a formal approval from the regulator, in particular the Philippine Competition Commission. But to give you context, in 2024, the performance of premium bikes was about just 2% of RRH and consolidation on a top and bottom line basis. Thank you. From Paolo Garcia, what is the percentage contribution of FTO to food sales versus the market to the grocery store, respectively? For the supermarket, for food segment, it's from 7.2% to 7.8% share of business, and increase of 13.5% for private food. For drugstores, around 3%. This is combined for gross financing, and it's outside of that. Sorry, thank you. From Priya, IR. Does this, so when this needed any up-trading, is there any up-trading or is there any cross-trading in the score levels or the SCA levels? Hi Priya, not that it's early. Maybe in some banners, some premium banners, we see up-trading, but then generally across all the banners, no, not much. I think what's driving our basket size growth is that we're seeing more spontaneous additions to their baskets. All right, thank you. And then from Nadim, are we seeing the same challenge for specialty in October following decent SSSG and 3DQ? What do you think are causing the divergence in discretionary formats? Hi, Nadim. I think the overall dispatch of design metrics still holding up in October. I guess, generally, consumers are maybe really prioritizing the staples items. But with inflation easing, we're very stable at some 2%. Our discretionary formats are holding up. Some are challenged, but month-on-month basis, a lot of them are also improved. Hopefully with the Christmas ending happening soon, we see more positive results across the board for this same. So those are all our questions. Thank you. For your questions, we will end the call. Thank you, everyone, for your time, and we look forward to seeing you at the next training course. Thank you.