Puregold Price Club Inc. · PSE:PGOLD
Puregold Price Club — H1 2023 Earnings Presentation
45 slides from Puregold Price Club's earnings presentation, August 2023
Slide 1: Nasa Iyo Ang Panalo
NASAIYOANGPANALO NASAIYOANGPANALO NASAIYOANGPANALO NASAIYOANGPANALO NASAIYOANGPANALO
Slide 2: 1H23 Results & Performance
1H23 RESULTS & PERFORMANCE Puregold Price Club, Inc. Presentation Years of Serbisyong Always Panalo Para Sa Pilipino
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: 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 of a
Slide 5: 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 • Robust selling platform for all FMCG cos. doing business in PH • Membership shopping model • Catering to the upper inc
Slide 6: Most Chosen Retailer 2022, Kantar
Most Chosen Retailer 2022, Kantar Puregold recently ranked No. 1 in the Philippines as In addition, Puregold’s impact to consumers was also driven Kantar’s Most Chosen Retailer. upward by its accessibility. With over 445 stores nationwide and increasing footprint in the provinces, Puregold squarely
Slide 7: Shareholder Distribution
Shareholder Distribution YEAR EPS DIV 2016 2 0.4 2017 1.99 0.4 2018 2.24 0.4 2019 2.37 0.45 2020 2.81 0.5 2021 2.85 0.86* 2022 3.24 5YCAGR 10% 17% YoY 14% 72% EPS DIV * In Dec 2022, announced a policy to declare as dividend at least 30% of income of the previous year
Slide 8: 1H23 Results Highlights
1H23 Results Highlights CONSO GROSS PROFIT EBITDA REVENUE MARGIN % MARGIN % NIAT 1H23 Php 91.2 bn 18.5% 10.0% Php 4.4 bn YoY 10.9% -59 bps -101 bps 4.8%
Slide 9: Macro Highlights in 2023
Macro Highlights in 2023 SNAPSHOT : PHILIPPINES SNAPSHOT : THE WORLD • Resilient mid-C, D and E markets • Inflationary pressures linger • Sustained strength from A, B and upper C markets • Soft commodities & Brent oil prices strengthening • Employment gains continue • Continued high geopolitical unc
Slide 10: Pillars of Growth 2023
Pillars of Growth 2023 01 02 03 04 05 Store Increase Demand Robust Group Expansion Shopper Count Creation End-to-End Sustainability Supply Chain Objectives • +15% increase pace • Increase high • “Just in Case” vs. • Improving corporate • Reboot of marketing governance in Puregold-only potential shop
Slide 11: New Independent Directors
New Independent Directors Over 40 years of experience in the financial industry. President and CEO of Development Bank of the Phils. from 2019 to 2023. Best CEO for 2021 by the Association of Developmental Financial Institutions in Asia Pacific. President and CEO of Philippine Import-Export Credit A
Slide 12: New Independent Directors
New Independent Directors Over 30 years of experience in the telecommunications and financial industries. Over 12 years with Citibank in the Philippines, Singapore, Japan, Hong Kong, and New York, with stints in financial control, risk management, product development, treasury audit, corporate audit
Slide 13: Divimart Acquisition
Divimart Acquisition Opportunity • Access to 32 locations instantly • Fit-outs allow for faster store opening – i.e. new PG Stores within 6 months • Leverage on a partnership to find & build more locations for PG Stores Cost • One-time acquisition cost based on store area Transaction Overview • Subl
Slide 14: Store Portfolio 1H23
Store Portfolio 1H23 GEOGRAPHIC COVERAGE KEY STATS NEW PG + S&R STORES 2023 17 Doors Puregold Store METRO MANILA Puregold 88 Square, Paranaque TOTAL NUMBER 543 NORTH LUZON Puregold-Divi, Angat S&R Warehouse OF STORES NORTH LUZON Puregold-Divi, Mapulang Lupa N. Luzon 128 3 9 140 S&R QSR 301 hypermark
Slide 15: Financial Performance
Financial Performance CONSO 1H23 3YCAGR 4.5% 10.9% 3YCAGR 7.7% 7.5%
Slide 16: Financial Performance
Financial Performance CONSO 1H23 OTHER OPERATING INCOME (in PHP Millions) 3YCAGR 0.5% 3.4% 3YCAGR 4.1% -1.5%
Slide 17: Financial Performance
Financial Performance CONSO 1H23 EBITDA & MARGIN (in PHP Millions) OPERATING EXPENSES (in PHP Millions) 3YCAGR 3.9% 0.7% 3YCAGR 9.0% 12.8%
Slide 18: Financial Performance
Financial Performance CONSO 1H23 3YCAGR 7.3% 4.8%
Slide 19: Margins
+GPM ~EBITDAM ~EBITM ~NM MARGIN TRENDS 18.3% 18.4% 18.5% 17.3% 16.8% 10.5% 10.7% ° 9.8% 10.3% 10.0% 7.9% 7.9% 7.9% 7.4% 7.3% 4.8% 5.0% 5.0% 4.8% aay R48 2019 2020 2021 2022 1H23
Slide 20: CAPEX Guidance for FY 2023
CAPEX Guidance for FY 2023 CAPEX Budget of Php 11.9 billion in 2023 Php 2.3 billion for 30 new Puregold Stores Php 4.1 billion for 4 S&R WHs and 10 S&R QSRs Php 3.5 billion for logistics capex Php 2.0 billion for maintenance capex, solar projects and IT upgrades
Slide 21: Updated Management Guidance 2023
Updated Management Guidance 2023 Consolidated Revenue Growth 8% to 10% target Gross Profit Margin Puregold Stores: 15% target S&R WH: 22% to 22.2% target
Slide 22: Puregold CinePanalo Film Festival
Puregold CinePanalo Film Festival The CinePanalo Film Festival marks Puregold’s latest foray into integrating its sustainability and retailtainment efforts. Such an approach has allowed Puregold to reach out to the next generation of shoppers who are rediscovering the joys of heartwarming Filipino c
Slide 23: Marketing & Advertising Recognitions
Marketing & Advertising Recognitions GOLD WINNER 52 Weeks - TikTok Series Hashtag Asia Awards 2023 Best Social Media Campaign - TikTok
Slide 24: Marketing & Advertising Recognitions
Marketing & Advertising Recognitions SHORTLISTED Nasa Iyo Ang Panalo Campaign Asia Pacific Tambuli Awards 2023 Champions For Humanity Brand Purpose
Slide 25: Q&A
1H23 RESULTS & PERFORMANCE Puregold Price Club, Inc. Presentation Q&A
Slide 26: Annex
1H23 RESULTS & PERFORMANCE Puregold Price Club, Inc. Presentation ANNEX
Slide 27: Operating Performance 1H23
Operating Performance 1H23 REVENUE Gross Profit (PHP million) & Margin (%) 10,449 (16.8%) 6,403 (22.2%) CONTRIBUTION Total Traffic (Million) 65.7 5.8 Average Net Ticket (PHP) 961 4,892 32 Net Sales Growth (%) 9.2% 11.4% 68 % Traffic Growth (%) 10.6% 10.0% % Average Net Ticket Growth (%) -6.0% 1.2% S
Slide 28: Shopper Trends 2023
Shopper Trends 2023 Timely and complete fulfillment More “in-person” Emphasis on value Preference for impactful promotions Strength of traditional channels
Slide 29: In-store Brand Refresh
In-store Brand Refresh Modern & dynamic Visuals Communicate value for money by Strengthening local appeal highlighting partner brands, categories, promos
Slide 30: Financial Performance 1H23
Financial Performance 1H23 PUREGOLD ONLY 1H23 3YCAGR 0.1% 9.2% 3YCAGR 4.4% 9.0%
Slide 31: Financial Performance 1H23
Financial Performance 1H23 PUREGOLD ONLY 1H23 NIAT & MARGIN (in PHP Millions) EBITDA & MARGIN (in PHP Millions) 3YCAGR 1.1% 5.9% 3YCAGR 10.6% 27.8%
Slide 32: Financial Performance 1H23
Financial Performance 1H23 S&R ONLY 1H23 3YCAGR 16.0% 14.8% 3YCAGR 13.3% 5.2%
Slide 33: Financial Performance 1H23
Financial Performance 1H23 S&R ONLY 1H23 3YCAGR 7.3% -5.3% 3YCAGR 11.4% -16.0%
Slide 34: Financial Performance
Financial Performance NET SALES BREAKDOWN QTR NET SALES TREND in PHP Billions 10.9% 9.2% 14.8% >>Record 2Q sales. Best 1H trajectory ex-2022 reopening. Double-digit 1H sales growth YoY for the group. >>1H23 YoY major contributors are higher traffic in PG stores, higher traffic in S&R WHs, bigger bas
Slide 35: Profitability
Profitability NET INCOME AFTER TAX Series1 Php4,399.7 1H23 1H22 CHANGE >>Groupwide competitive pricing initiatives for GPM market share volume growth tempered by GROSS PROFIT MARGIN 18.47% 19.06% -59bps effect of joint business plans with suppliers 4.78% >>Higher frontloaded opex due to more store P
Slide 36: Financial Performance
Financial Performance JUNE 2023 JUNE 2022 DEC 2022 Trade Receivables Days 2.9 2.4 3.6 Inventory Days 68.2 64.6 60.0 Trade Payables Days 29.6 21.0 30.9 Cash Conversion Cycle 41.5 46.0 32.8 Notes: 1.Average of inventory at the beginning and end of the period / cost of sales x 363 (for full year)) 2.Av
Slide 37: Financial Performance: Actual vs. Last Year
Financial Performance: Actual vs. Last Year PHP (in Thousands) 1H 2023 % 1H 2022 % Change % Net Sales P91,230,530 100.0% P82,235,856 100.0% P8,994,674 10.9% Gross Profit 16,851,573 18.5% 15,675,568 19.1% 1,176,005 7.5% Other Operating Income 1,515,553 1.7% 1,465,191 1.8% 50,363 3.4% Operating Expens
Slide 38: Financial Position
Financial Position PHP (in Thousands) JUN 2023 JUN 2022 Change % DEC 2022 Change % Current Assets 67,575,083 64,376,267 3,198,816 5.0% 78,998,060 (11,422,977) 14.5% Non-current Assets P88,054,608 P74,607,294 13,447,314 18.0% P84,799,454 3,255,153 3.8% Total Assets 155,629,690 138,983,560 16,646,130
Slide 39: Cash Flows
Cash Flows PHP (in Thousands) JUNE 2023 JUNE 2022 Income before income tax P5,696,049 P5,547,497 Noncash operating items 3,405,705 3,486,374 Operating income before changes in working capital 9,101,754 9,033,871 Decrease (increase) in merchandise inventory 67,101 (4,674,356) Decrease (increase) in o
Slide 40: Cash Flows
Cash Flows PHP (in Thousands) JUNE 2023 JUNE 2022 Additions to property and equipment (P3,248,373) (P1,619,625) Increase in other investing activities (692,888) (3,300,279) Net cash provided by (used in) investing activities (P3,941,261) (P4,919,904) Payment on lease liabilities (820,031) (528,725)
Slide 41: Sustainability Highlights 2022
Sustainability Highlights 2022 ECONOMIC CONTRIBUTION PHP 4.98B taxes paid to the PHP 3.14B employee wages PHP 202.1M invested to government and benefits community including LCCK 12,038 total no. of direct 0 incidents of corruption employees
Slide 42: Sustainability Highlights 2022
Sustainability Highlights 2022 ENVIRONMENT PERFORMANCE 101M reduction of plastic bags used in Puregold 3% Clean electricity used stores compared to 2018 Rooftop Solar Power in 22 S&R 63% of Puregold stores use paper bags and Warehouse Clubs, 1 S&R Distribution promote monthly upsizing to reduce sing
Slide 43: Sustainability Highlights 2022
Sustainability Highlights 2022 SOCIAL RESPONSIBILITY 866 scholars graduated, 107 0 legal actions or 56% female employees in passed licensure exam, 312 employee grievance on the workforce current no. of scholars forced and child labor 760,000+ Puregold Sari-Sari 1.43M Puregold Mobile app Store member
Slide 44: Sustainability Highlights 2022
Sustainability Highlights 2022
Slide 45: Nasa Iyo Ang Panalo
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