Philippine Seven Corporation · PSE:SEVN

Philippine Seven — Q1 2020 Earnings Presentation

18 slides from Philippine Seven's earnings presentation, June 2020

  1. Slide 1: Q1 2020 Investor Briefing

    Philippine Seven Corporation (SEVN) Q1 2020 Investor Briefing 7th Floor The Columbia Tower, Ortigas Avenue, Mandaluyong City 1550 Email: investor-relations@7-eleven.com.ph

  2. Slide 2: A Global Brand

    A Global Brand The World’s Largest Retailer: a. more than 70,304 Stores (as of Feb. 29, 2020) b. Philippines ranked 6th out of 18 countries in store count Norway SERVING OVER Sweden 62M Canada Denmark GUESTS United States China South Korea Japan DAILY Mexico Hong Kong Taiwan Vietnam 2018 Thailand Ma

  3. Slide 3: Global Recognition

    Global Recognition Asian Convenience Industry Leader of the Year Award ° seven re) Leven y ° WS a A ——— Pictured left to right: Jackie Lai, Marketing Director 7-Eleven Philippines; Kazuki Furuya, Chairman of SEJ; Richard Lee, Vice President Marketing & Operations 7-Eleven Philippines; Armi Cagasan,

  4. Slide 4: Shareholding Structure

    Shareholding Structure Agus Development Corp. Present 3% Shareholding Others-Foreign Structure Others-Filipino 15% 3% Progressive Development Corp. 2% President Chain Store Asian Holdings Corp. (Labuan) Holdings, Ltd. % As of March 31, 2020 7% 52% ownership President Chain Store (Labuan) Holdings, L

  5. Slide 5: SEVN Share Information

    SEVN Share Information Price (Jun. 3, 2020) Php 131.00 Hi/Low (YTD) Php 125.00 – Php 172.00 Free Float 33.1% Outstanding Shares 756.42 million Market Capitalization USD 1.98 billion Dividend 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Payment Stock 0.10 0.10 0.05 0.15 0.15 0.15 - - -

  6. Slide 6: Market Performance

    Market Performance Market Share per Trade 2019 YTD (%) 2020 YTD (%) Difference (%) Channel Supermarket 46.0 46.6 +0.6 Grocery 5.5 5.4 -0.1 Convenience Stores 3.8 4.1 +0.3 Sari-sari Stores 33.3 32.5 -0.8 Market Stall 4.9 5.1 +0.2 Drugstore 3.2 3.3 +0.1 Others 3.3 3.0 -0.3 Source: Nielsen YTD March 20

  7. Slide 7: Store Network: Q1 2020

    Store Network: Q1 2020 7-Eleven By Location Store Count % Jan. 1 Net Mar. 31 additions Metro Manila 1,006 11 1,017 35% Luzon-ex MM 1,172 23 1,195 41% Visayas 411 12 423 14% Mindanao 275 6 281 10% Total 2,864 52 2,916 100 % As of March 31, 2020 All Store Count 2,916 511 82 800 63 0 SSSG (Q1) +2.5% ne

  8. Slide 8: FY 2019 Financial Performance

    FY 2019 Financial Performance System-wide IFRS IFRS sales P1.4 billion P6.8 billion P56.3 billion - 6% + 61% + 22% Same-store sales Non-IFRS Non-IFRS + 10.3% P2.0 billion P5.1 billion + 30% + 20% Sales Net income EBITDA FY Net Income 5 Year Trend 1,800.0 1,600.0 1,400.0 1,200.0 1,000.0 800.0 600.0 4

  9. Slide 9: Adoption of new IFRS on Leases

    Adoption of new IFRS on Leases 100,000 90,000 80,000 70,000 60,000 Sample Illustration 50,000 Year Rent ROU Depreciation Interest IFRS 16 Impact B C 2019 2020 2021 2022 2023 payment Asset D = B+C A-D A Rent payment Depreciation IFRS 16 2019 70,000 70,000 67,714 22,828 90,542 (20,542 • The new lease

  10. Slide 10: Annual IFRS 16 Impact

    Annual IFRS 16 Impact ESTIMATED BASED FROM 2,764 (95%) CONTRACTS REVIEWED LOWER NET INCOME Depreciation of ROU asset approximates cash flow rent expense. Interest expense is significant based from the higher outstanding balance of lease liability. NEUTRAL EFFECT Sum of ROU asset depreciation − and a

  11. Slide 11: Crunch Time and City Blends drive Foodservice sales, while service revenues outperform

    Crunch Time and City Blends drive Foodservice sales, while service revenues outperform 112.2

  12. Slide 12: Marketing income continued to boost margins

    Marketing income continued to boost margins 112.2

  13. Slide 13: Q1 2020 Financial Performance

    Q1 2020 Financial Performance System-wide IFRS IFRS sales P103.8 million P1.4 billion P14.1 billion - 7% + 2% + 13% Same-store sales Non-IFRS Non-IFRS + 2.5% P230.2 million P917.1 million - 18% - 1% Sales Net income EBITDA Q1 Net Income 5 Year Trend 250.0 200.0 150.0 100.0 112.2 50.0 - 2016 2017 201

  14. Slide 14: Financial Position as at Mar. 31, 2020

    Financial Position as at Mar. 31, 2020 % change 30,000 Balance Sheet and Cash Flow As at (vs. 12/31/2019, (in Php Million except Book Value per Share) Mar. 31, 2020 except CF) 25,000 Total Assets 29,682.3 0% Current Assets 12,614.6 -1% 20,000 Non-current Assets * 17,067.6 +1% Total Liabilities 21,54

  15. Slide 15: 55% of stores are franchised, dominated by FC1 package

    55% of stores are franchised, dominated by FC1 package FC1 FC2 FC3 Count 1,322 109 173 Investment Php 4.0 million Up to P1.0 million < P500,000 Building Franchisee PSC Merchandise Franchisee Equipment PSC Cash Bond (PGD) - Franchisee Term 5+5 years 66% FC, 40% FC, Varies per GP Split 34% PSC 60% PSC

  16. Slide 16: COVID-19 Impact

    COVID-19 Impact Mar. 15 Mar. 17 Mar. 28 Apr. 4 May 1 May 15 June 1 Store Status NCR Luzon ECQ Cebu Davao ECQ MECQ for NCR NCR ECQ ECQ low risk MECQ GCQ Temporary closed 20% to 30% 10% 24/7 10% to 15% 12% Operating 12H 50% to 60% 78% Impact to sales Reduced sales due to ECQ pass Gradual improvement d

  17. Slide 17: COVID-19 Response

    COVID-19 Response PPE for Front-liners Physical distancing markers 112.2 Hand sanitizer Improvised sneeze guard

  18. Slide 18: End of Report

    - End of Report-

Philippine Seven — Q1 2020 Earnings Presentation on 6ix