Puregold Price Club Inc. · PSE:PGOLD
Puregold Price Club — 9M 2020 Earnings Presentation
23 slides from Puregold Price Club's earnings presentation, October 2020
Slide 1: Company Presentation: 9M 2020 Results and Performance
Company Presentation 9M 2020 Results and Performance October 2020
Slide 2: 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 3: Store roll-out through FY 2019
Store roll-out through FY 2019 436 408 360 298 215 102 64 16 30 1 3 1998 2001 2006 2008 2010 2011 2013 2015 2017 2018 2019 First store Expansion Brand recognition Market leadership Rapid expansion via organic Continuing new stores roll- Opened in Launched loyalty Reader’s Digest The 2nd larg
Slide 4: Macroeconomic Updates: PH GDP Growth Rates
Macroeconomic Updates • PH GDP Growth Rates 10.0 7.2 7.5 6.7 6.4 6.6 6.5 6.4 6.1 6.4 6.3 5.0 5.7 5.4 0.0 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 -0.7Q2 20 Q1 20 -5.0 -10.0 -15.0 -16.5 -20.0 • Q3 2020 GDP forecast to decline by 11.1% (HSBC) source: PSA, NEDA, HSBC 4
Slide 5: Shopper Trends
Shopper Trends • Decline in Frequency of store visits – Local government restrictions/quarantine • Increase in spending per trip is not enough to offset big frequency drop • Shorter browsing time per store visit • Re-prioritization of spending – Focusing on essential needs – Health (vitamins) – Home
Slide 6: Update on Sari-sari stores customers
Update on Sari-sari stores customers Sari-sari stores challenged to stay afloat: • Less capital due to lower sales – Needs to prioritize assortment • Lower sales due to less foot traffic in general – No Work / No School – Limited Income of shoppers during ECQ – Limited operating hours • Sourcing Iss
Slide 7: Puregold Enterprise
Puregold Enterprise S&R • Membership shopping model • Catering to the upper income customers • Class A & B and upper C segment • Imported and large size SKUs Puregold • Caters to the low income and low-middle income customers • Lower C, D and E market • Sari sari store customers/resellers • Popular
Slide 8: 4 Pillars of Growth
4 Pillars of Growth 1. Protect our Supply Chain - Revised inventory targets for emerging categories, food preparation and health/sanitation - Increased inventory levels since most companies had supply chain disruptions during lockdown and raw materials/packaging material sourcing - Develop local sup
Slide 9: 4 Pillars of Growth
4 Pillars of Growth 3. New Channel Development & Digital Marketing Activities ‒ Reactivate coverage of sari-sari stores ‒ Opening up of new accounts ‒ E-commerce investments 4. Margin Improvement - House Brands - Streamlining of current operations thru Digitization - Front margin pricing strategy -
Slide 10: Update on Puregold – 9M 2020
Update on Puregold – 9M 2020 10
Slide 11: 9M 2020 Results and Performance
9M 2020 Results and Performance • Consolidated net sales were better than expected; grew by 10.1% in 9M 2020; • Gross profit grew by 7.9% in 9M 2020; with gross profit margin posted 16.4% • Operating income increased by 11.8% in 9M 2020; with operating margin at 7% • Consolidated Net income increase
Slide 12: Operating Performance – 9M 2020
Operating Performance – 9M 2020 Format Hypermarket, supermarket, extra Membership shopping S&R Puregold 25% Revenue contribution 75% Gross profit (PHP million) & Margin (%) 12,694 (14%) 7,150 (23.7%) Total traffic (million) 99 7.2 Average net ticket (PHP) 919 4,465 Net sales growth (%) 4.5% 24.5% Tr
Slide 13: Operating Performance – 9M 2020
Operating Performance – 9M 2020 Breakdown of Stores (per format) Net Selling Area of Stores (in sqm) Group 2018 2019 9M 20 800,000 518,862 537,965 565,995 582,889 700,000 Hypermarket 208 230 234 600,000 4,078 4,397 Supermarket 104 103 102 500,000 3,509 4,126 83,048 92,883 103,529 72,904 Extra 42 47
Slide 14: Store Portfolio – 9M 2020
Store Portfolio – 9M 2020 Key statistics 9M 2020 Geographic coverage Total no. of 455 BULACAN Caloocan stores North Luzon 234 hypermarkets; Valenzuela (112 stores) 102 supermarkets; Quezon City No. of stores 57 extras Navotas Malabon per format Caloocan 20 S&Rs Marikina Metro Manila 42 S&R Q
Slide 15: Financial Performance – 9M 2020
Financial Performance – 9M 2020 Net sales (in Php billions) Gross profit & Margin (in PHP billions) 154.49 141.14 35 124.7 121.14 30 25.95 109.98 23.93 27.0% 25 21.69 19.84 20 18.39 22.0% 15 17.4% 17.0% 16.8% 16.7% 16.4% 10 17.0% 5 0 12.0% 2017 2018 2019 9M 19 9M 20 2017 2018 2019 9M 19 9M 20 Gross
Slide 16: Financial Performance – 9M 2020
Financial Performance – 9M 2020 Other Operating Income (in PHP millions) Operating Expenses (in PHP millions) 25,000 40.0% 35.0% 20,000 17,830 00 3,263 15.0% 16,639 30.0% 2,941 14,611 13,097 13,645 25.0% 00 2,692 2,307 2,298 15,000 10.0% 20.0% 00 10,000 15.0% 2.2% 5.0% 00 2.1% 2.1% 2.1% 1.9% 5,000 1
Slide 17: Financial Performance – 9M 2020
Financial Performance – 9M 2020 Operating Income/EBIT and Margins (in PHP millions) Net Income & Margins (in PHP millions) 10,000 25.0% 5,000 35.0% 3,000 8,000 30.0% 20.0% 10,231 11,384 6,773 1,000 9,769 6,200 5,050 8,497 25.0% 6,000 5,494 15.0% 9,000 7,600 20.0% 4,553 7,000 4,000 10.0% 7.2% 7.4% 15
Slide 18: Financial Performance – Puregold Only
Financial Performance – Puregold Only Revenues (in PHP Billions) Gross Profit & Margins (in PHP millions) 50 25,000 30 118.24 24 98.7 109.53 17,659 10 90.99 20,000 15,758 16,997 22 84.93 12,632 90 15,000 12,694 20 70 18 10,000 16.0% 15.5% 14.9% 50 14.9% 14.0% 16 30 5,000 14 10 - 12 10 2017 2018 2019
Slide 19: Financial Performance – S&R Only
Financial Performance – S&R Only Revenues (in PHP Billions) Gross Profit & Margins (in PHP millions) 12,000 70.0 36.32 31.61 30.1 10,000 8,291 60.0 25.87 7,150 25 8,000 6,932 5,757 50.0 5,795 6,000 40.0 23.7% 4,000 22.4% 21.9% 22.8% 23.0% 30.0 2,000 20.0 - 10.0 2017 2018 2019 9M 19 9M 20 2017 2018 2
Slide 20: Financial Performance – 9M 2020
Financial Performance – 9M 2020 Working capital days due to S&R importations and Puregold rapid store expansions and acquisitions 2018 2019 9M 20 Trade Receivables Days 7.6 6.6 2.9 Inventory Days 58.0 55.4 57.0 New Puregold Store roll out and new S&R Stores to be opened in 2019 Trade Payables Days 2
Slide 21: Guidance for 2020
Guidance for 2020 • Consolidated net sales target to grow between 4 to 5% in 2020 – Opening of 25 new Puregold stores – Opening of 2 S&R Warehouse stores • Improve PGOLD gross and net profit margins versus 9M 2020 • Sustain S&R gross profit margins versus 9M 2020 • Pursue acquisitions and expand int
Slide 22: Use of Proceeds: Php 12 Billion
Use of Proceeds: Php 12 Billion 1. M&A Opportunities Php 5 billion 2. Increase Inventory Supply by 1.5 to 2 weeks Php 4.5 billion 3. Investments in Logistics (DC and Cross Dock) Php 2 billion 4. S&R Solar Projects for 8 warehouse clubs Php 200 million 5. S&R Store Renovations Php 300 million 22
Slide 23: CAPEX Guidance for FY 2020 / Q&A
CAPEX Guidance for FY 2020 • CAPEX Budget of Php 3.4 billion in 2020 – Php 1 billion for 25 new Puregold Stores – Php 1.6 billion for 2 S&R stores – Php 200 million for 10 S&R QSR – Php 600 million Maintenance Capex Q&A Thank you! 23