Puregold Price Club Inc. · PSE:PGOLD
Puregold Price Club — H1 2022 Earnings Presentation
42 slides from Puregold Price Club's earnings presentation, Aug 17, 2022
Slide 1: Puregold
€- PUREGOLD
Slide 2: 1H22 Results & Performance
1H22 Results & Performance PUREGOLD PRICE CLUB, INC. Company Presentation August 2022
Slide 3: Disclaimer
DISCLAIMER These presentations and/or other documents have been written and presented by Puregold Price Club, Inc. (PGOLD). PGOLD is solely responsible for the accuracy and completeness of the contents of such presentations and/or other documents. Third parties, other than PGOLD, do not have any res
Slide 4: Puregold Enterprise
Puregold Enterprise • Caters to the low income and low-middle income customers • Lower C, D and E market • Sari sari store customers/resellers • Popular local and small sized SKUs • Membership shopping model • Catering to the upper income customers • Class A & B and upper C segment • Imported and la
Slide 5: Pure Play Philippine Food Retailer
Pure Play Philippine Food Retailer A Proxy for the Philippine Consumption Story • Robust topline growth from an enterprise with the broadest consumer segments. • Healthy cash flows and a simple capital structure. • Two marquee brands in Philippine retail. Puregold stores and S&R WHs. • Beneficiary o
Slide 6: 1H22 Results Highlights
1H22 Results Highlights GROSS PROFIT CONSO REVENUE EBITDA MARGIN % NIAT MARGIN % 1H22 Php 82.24 bn 19.10% 11% Php 4.2 bn YoY 7.9% +32 bps -7 bps 5.4% PUREGOLD S&R PUREGOLD S&R +3.7% +18.9% -2.6% +13.7% REVENUE YTD NET INCOME YTD
Slide 7: Macro Highlights In 2022
Macro Highlights In 2022 • Resilient mid-C, D and E markets. • Sustained strength from A, B and upper C markets. • Greater mobility in 2Q22. • Construction & Manufacturing led in jobs. • Phil Mfg. PMI still in expansion. • Peso weakest among peers and will still see pressure • BPO revenues, exports
Slide 8: Store Portfolio 1H22
Store Portfolio 1H22 GEOGRAPHIC COVERAGE KEY STATICS NEW STORES 1H22 Puregold Stores TOTAL NUMBER 9 New Stores 507 S&R Warehouse OF STORES Puregold - La Paz NW Luzon N. Luzon 129 S&R QSR 271 hypermarkets Puregold - Eastland Cogeo Rizal 119 3 7 Puregold - Allacapan NE Luzon 100 supermarkets NO. OF ST
Slide 9: Operating Performance 1H22
Operating Performance 1H22 REVENUE Gross Profit (PHP million) & Margin (%) 9,588 (16.8%) 6,087 (24.2%) CONTRIBUTION Total Traffic (Million) 59.4 5.2 Average Net Ticket (PHP) 961 4,833 31% Net Sales Growth (%) 3.7% 11.4% Traffic Growth (%) 10.4% 3.5% 69% Average Net Ticket Growth (%) -6.0% 7.6% Same
Slide 10: Financial Performance 1H22
Financial Performance 1H22 CONSO 1H22 NET SALES (in PHP Billions) GROSS PROFIT & MARGIN (in PHP Billions) 29.16 30.08 168.63 164.12 154.49 25.95 14.28 15.68 76.18 82.24 18.3% 16.8% 17.3% 19.1% 18.7% 2019 2020 2021 1H21 1H22 2019 2020 2021 1H21 1H22 Gross Profit GP Margin 3YCAGR 3.1% 7.9% 3YCAGR 7.7%
Slide 11: Financial Performance 1H22
Financial Performance 1H22 CONSO 1H22 EBITDA & MARGIN (in PHP Millions) OPERATING EXPENSES (in PHP Millions) 20,350 17,680 17,614 18,953 17,830 15,204 9,033 9,697 10,367 8,421 11.5% 11.2% 12.4% 12.7% 12.6% 9.8% 10.5% 10.7% 11.1% 11.0% 2019 2020 2021 1H21 1H22 2019 2020 2021 1H21 1H22 EBITDA EBITDA M
Slide 12: Financial Performance 1H22
Financial Performance 1H22 CONSO 1H22 OTHER OPERATING INCOME OPERATING INCOME/EBIT & MARGINS (in PHP Millions) (in PHP Millions) 3,263 3,210 13,358 3,155 12,942 11,384 1,561 6,774 1,465 6,143 7.9% 7.9% 8.1% 8.2% 2.1% 1.9% 2.0% 2.0% 1.8% 7.4% 2019 2020 2021 1H21 1H22 2019 2020 2021 1H21 1H22 Other Op
Slide 13: Financial Performance 1H22
Financial Performance 1H22 CONSO 1H22 NET INCOME & MARGINS (in PHP Millions) Net Income NI Margin 0.1 8,067 8,180 0.09 6,773 0.08 4,199 0.07 3,986 0.06 4.4% 0.05 5.2% 5.1% 5.0% 4.8% 0.04 2019 2020 2021 1H21 1H22 3YCAGR 9.9% 5.4%
Slide 14: Net Sales Breakdown
Net Sales Breakdown NET SALES BREAKDOWN QTR NET SALES TREND In PHP Billions In PHP Billions 7.9% 50 Puregold S&R 57.1 2019 44 55.0 3.7% 2020 2021 38 2022 21.1 18.9% 25.1 32 1H21 1H22 Q1 Q2 Q3 Q4 1H21 1H22 Steep trajectory from Q1 to Q2 as economy opened up TRAFFIC TICKET TRAFFIC TICKET more. Stark c
Slide 15: Profitability
Profitability 1H21 1H22 CHANGE NET INCOME AFTER TAX In PHP Millions Strong continuing supplier GPM support generated by GROSS PROFIT MARGIN 18.74% 19.06% +32bps numerous in-store events. Buffers and protection Php4,199.12 orders helped lift margins Due to higher cash opex +5.4% EBITDAM 11.05% 10.98%
Slide 16: Shopper Trends 2022
Shopper Trends 2022 Pre-pandemic Sari-sari Stores are thriving key categories rebound (work & school) Importance of Pantry stocking normalizing AFFORDABILITY across all segments Increasing foot traffic
Slide 17: Pillars of Growth '22-'23
Pillars of Growth ’22-‘23 01 04 Store Expansion Increase Demand Robust End-to-End Shopper Count Creation Supply Chain • +15% increase pace in • “Just in Case” vs. “Just in • Increase high potential • Reboot of marketing Puregold-only stores accounts from 220K to events Time’ • more provincial areas
Slide 18: TNAP Negosyo Convention 2022
TNAP Negosyo Convention 2022
Slide 19: Out of Store Chassis
Out of Store Chassis uregold APARs uregold Rolling Stores uregold Caravan
Slide 20: e-Commerce
e-Commerce Experience Pure Shopping Power with Puregold Mobile app! Major Services: In-store Pick up / Delivery / Express Delivery (2-hour) / P-Wallet / Bills Pay / Buy Load / Pure Treats (vouchers) / Donation Drive App Features: Sally’s Chatbot / Suggested Items / Inbox Message / PERKS & TNAP Point
Slide 21: Social Media & Retailtainment
Social Media & Retailtainment Retailtainment Puregold pioneers retailtainment by maximizing social media as a way of connecting and interacting where consumers are; in or outside Puregold stores. Puregold Channel Combining content with modern retailing gives Puregold more opportunities for branded m
Slide 22: Management Guidance 2022
Management Guidance 2022 Consolidated Revenue Growth 7% to 9% target Gross Profit Margin Puregold Stores: 15% to 16% target S&R WH: 22% to 22.50% target
Slide 23: CAPEX Guidance for FY 2022
CAPEX Guidance for FY 2022 CAPEX Budget of Php 5.8 billion in 2022 Php 2 billion for 35 new Puregold Stores Php 2.8 billion for 3 S&R stores + 5 S&R QSR Php 1 billion for maintenance capex, solar projects and IT upgrades
Slide 24: Q&A
Q&A
Slide 25: Annex
PUREGOLD PRICE CLUB, INC. Company Presentation Annex
Slide 26: Financial Performance 1H22 - Puregold Only
Financial Performance 1H22 PUREGOLD ONLY 1H22 NET SALES (in PHP Billions) GROSS PROFIT & MARGIN (in PHP Millions) 25,000 25.0% 124.03 118.24 115.14 17,659 18,528 18,476 18,750 21.8% 12,500 18.5% 57.11 9,072 9,588 55.05 16.5% 16.8% 16.0% 6,250 15.3% 14.9% 14.9% '- 12.0% 2019 2020 2021 1H21 1H22 2019
Slide 27: Financial Performance 1H22 - Puregold Only
Financial Performance 1H22 PUREGOLD ONLY 1H22 EBITDA & MARGIN (in PHP Millions) NIAT & MARGIN (in PHP Millions) 9,930 9,281 9,471 0.16 4,542 4,330 0.048 4,130 0.043 3.7% 0.12 3.6% 3.5% 0.038 4,786 4,964 3.7% 3.7% 2,033 1,980 0.033 7.8% 8.0% 8.2% 8.7% 8.7% 0.08 0.028 0.023 0.04 0.018 2019 2020 2021 1
Slide 28: Financial Performance 1H22 - S&R Only
Financial Performance 1H22 S&R ONLY 1H22 NET SALES (in PHP Billions) GROSS PROFIT & MARGIN (in PHP Millions) 15,000 0.3 49.04 11,607 44.61 10,628 0.28 11,250 36.32 8,291 0.26 7,500 24.6% 25.13 6,087 21.14 5,206 0.24 24.2% 3,750 23.8% 23.7% 22.8% 0.22 '- 0.2 2019 2020 2021 1H21 1H22 2019 2020 2021 1H
Slide 29: Financial Performance 1H22 - S&R Only
Financial Performance 1H22 S&R ONLY 1H22 EBITDA & MARGIN (in PHP Millions) NIAT & MARGIN (in PHP Millions) 0.15 4,492 8,209 4,000 7,750 0.22 5,922 2,917 2,219 0.1 4,069 1,952 3,635 0.17 17.4% 9.2% 17.2% 9.0% 9.2% 8.8% 16.3% 16.6% 16.2% 8.0% 0.12 0.05 2019 2020 2021 1H21 1H22 2019 2020 2021 1H21 1H22
Slide 30: Comparative Sales
Comparative Sales PUREGOLD ONLY S&R ONLY SSSG 1H22 0.6% 3.8% 1H22 1Q22 -4.5% -1.3% 1Q22 FY21 -9.7% 4.7% FY21 1H22 6.8% -4.1% 1H22 -8.7% 1Q22 TRAFFIC 1Q22 2.8% FY21 -16.4% 2.1% FY21 1H22 -5.8% 8.2% 1H22 TICKET 1Q22 -7.1% 8.0% 1Q22 FY21 8.0% 2.6% FY21
Slide 31: Margins
Margins MARGIN TRENDS 18.3% 19.1% 16.8% 17.3% GPM EBITDAM 10.5% 10.7% 11.0% 9.8% 7.4% 7.9% 7.9% 8.2% EBITM 4.4% 4.8% 5.0% 5.1% NM 2019 2020 2021 1H22
Slide 32: Financial Performance 1H22
Financial Performance 1H22 2021 1H21 1H22 Trade Receivables Days 3.3 2.9 2.4 Inventory Days 57.5 63.6 64.6 Elevated inventory days to ensure availability Favorable payment terms to Trade Payables Days 24.8 20.0 21.0 suppliers to get bigger allocation and avail of discounts Cash Conversion Cycle 36.1
Slide 33: Financial Position - Assets
Financial Position - Assets PHP (in Thousands) JUNE 2022 JUNE 2021 Current Assets Cash and cash equivalents ₱31,398,784 ₱30,634,131 Investments in trading securities 3,027,489 28,285 Receivables - net 2,318,724 1,678,054 Merchandise inventory 26,232,989 22,853,898 Prepaid expenses & other current as
Slide 34: Financial Position - Liabilities
Financial Position - Liabilities PHP (in Thousands) JUNE 2022 JUNE 2021 Current Liabilities Accounts payable & accrued expenses ₱9,502,945 ₱8,185,769 Income tax payable 653,664 543,500 Due to related parties 28,437 27,414 Current maturities of long term debt - net of debt issue cost 120,000 120,000
Slide 35: Financial Position - Equity
Financial Position - Equity PHP (in Thousands) JUNE 2022 JUNE 2021 Equity Capital Stock ₱2,904,214 ₱2,904,214 Reserve for retirement plan - net of tax 151,224 (118,634) Additional paid in capital 25,361,671 25,361,671 Treasury stock - at cost (182,786) (102,351) Retained earnings 51,370,599 44,411,2
Slide 36: Cash Flows
Cash Flows PHP (in Thousands) JUNE 2022 JUNE 2021 Income before tax ₱5,547,497 ₱4,963,876 Noncash operating items 3,486,374 3,455,167 Operating income before changes in working capital 9,033,871 8,419,043 Increase in merchandise inventory (4,674,356) (1,935,577) Decrease (increase) in other operatin
Slide 37: Cash Flows
Cash Flows PHP (in Thousands) JUNE 2022 JUNE 2021 Additions to property and equipment (P 1,619,625) (P 1,846,142) Decrease (increase) in other investing activities (3,300,279) (2,427,953) Net cash provided by (used in) investing activities (₱4,919,904) (₱581,811) Payment on lease liabilities (528,72
Slide 38: Sustainability Highlights
Sustainability Highlights ENVIRONMENTAL PERFORMANCE Monthly upsizing through regular promotions Gearing towards 100% LED main lighting to reduce single-use packaging Migration to cross-docking operations to Almost 50% of total Puregold stores have help reduce CO2 emission by up to 36% discontinued t
Slide 39: Sustainability Highlights
Sustainability Highlights ECONOMIC CONTRIBUTION 11,647 total no. of direct employees PHP 4.25B taxes paid to the government >95% local hiring PHP 10.7M invested to scholarship and PHP 3B employee wages and benefits community development 97% of Cosco economic value generated 0 incidents of corruption
Slide 40: Sustainability Highlights
Sustainability Highlights SOCIAL RESPONSIBILITY 753 scholars graduated, 107 passed licensure 612 employees in Puregold and S&R promoted exam, 381 current no. of scholars 4,325 employees attended technical and 238 employees from indigenous communities behavioral skills training and vulnerable sector
Slide 41: Thank You!
THANK YOU!
Slide 42: Puregold
€- PUREGOLD