Philippine Seven Corporation · PSE:SEVN

Philippine Seven — Q2 2015 Earnings Presentation

22 slides from Philippine Seven's earnings presentation, July 2015

  1. Slide 1: SEVN Q2 Investor Briefing

    SEVN Q2 INVESTOR BRIEFING Philippine Seven Corpora;on 7th Floor The Columbia Tower, Or;gas Avenue, Mandaluyong City Email: investor-­‐rela0ons@7-­‐eleven.com.ph

  2. Slide 2: Who We Are

    Who We Are MISSION: To make daily life easier by providing modern convenience. VISION: To be the best retailer of convenience for emerging markets. VALUES: We value integrity, teamwork, and reliability. We are data-­‐driven and customer focused in our decisions.

  3. Slide 3: A Global Brand

    A Global Brand The World’s Largest Retailer: ~ 55,000 Stores Norway SERVING OVER 44M Sweden Canada Denmark GUESTS United States China Japan South Korea DAILY Mexico Hong Kong Taiwan Macau 2015 Thailand 2X $100 Billion Malaysia Philippines WORLD’S POPULATION in Sales Singapore Indonesia EVERY Estimat

  4. Slide 4: Local Coverage

    Local Coverage By Location Store Count % Metro Manila 627 45% Luzon-ex MM 640 46% Visayas 136 9% Mindanao 2 0% Total 1,405 100% As of June 30, 2015 7-Eleven has at least 60% market share in the Philippines.

  5. Slide 5: PSC History at a Glance

    PSC History at a Glance 1982 PSC was established 2005 Moved to a full-scale distribution center 1984 Opened first store 2007 PhilSeven Foundation was established 1996 Opened 100th Store 2010 Opened 500th Store PSC launches its IPO; Opened first Opened 711th Store and entered Visayas 1998 2012 Franch

  6. Slide 6: Shareholding Structure

    Shareholding Structure Agus Development Corp. Present 3% Shareholding Others-Foreign Structure 14% Others-Filipino 4% Progressive Development Corp. 2% President Chain Store (Labuan) Holdings, Asian Holdings Corp. Ltd. 7% 52% As of June 30, 2015 % Paterno Family 8% President Chain Store (Labuan) Hold

  7. Slide 7: SEVN Share Information

    SEVN Share Informa;on Price (July 27, 2015) Php 110.00 Hi/Low (12 months) Php 80.00 – Php 140.00 Free Float 32% Outstanding Shares 458.44 million Market Capitalization USD 1.11 billion Dividend 2008 2009 2010 2011 2012 2013 2014 2015 Payment Stock .10 .10 .05 .15 .15 .15 - - Cash - - .05 .10 .10 .10

  8. Slide 8: Store Count

    Store Count Store Count Store Count by Type 1,400 1,200 1,000 Corporate, FC1 44% 37% 800 600 400 FC2, 19% 200 - 1989 1990 1991 1992 1993 1994 1996 1997 1998 1999 2000 2001 2002 2003 2004 2006 2007 2008 2009 2010 2011 2012 2013 2014 1995 2005 • Number of stores grew by 20% to 25% annually • 63% of st

  9. Slide 9: Proprietary Products

    Proprietary Products By Section Services 1% Non-food 7-Eleven 18% fresh food and cup drinks 25% Food 56% 1. 7-Eleven fresh food and drinks includes, rice meal, sandwiches, Slurpee® and coffee. 2. Food section are FMCG and alcoholic beverages 3. Non-food are cigarettes and health & beauty items 4. Se

  10. Slide 10: Promotions and Events

    Promotions and Events WiFi Now available at , ; >) 1 point = 15 mins of wifi = (ARUNISOD, iia. “Ra Paty LE. PROMO® oni can Pp oun Me ——— CONGRATULATIO ¥ i =ELEVEN ita & A.THE WINNER = = ‘Cy . i ie : )_ & & i 2

  11. Slide 11: Franchise Packages

    Franchise Packages FC1 FC2 Franchise Type Investor Industrial USD USD Investment 80,000-­‐100,000 20,000-­‐25,000 Building Franchisee PSC Merchandise Franchisee Equipment PSC Cash Bond (PGD) -­‐ Franchisee Term 5+5 years 66% FC, 40% FC, GP Split 34% PSC 60% PSC Rent Franchisee PSC Electricity 50 -­‐

  12. Slide 12: Financial Highlights

    Financial Highlights 2014 2013 % change 20,566.5 Sales 17,240.5 19.3 873.3 Net income 682.6 27.9 2,134.2 EBITDA 1,709.2 24.9 (Php million) Net income 1,000.0 900.0 5.8% R+2 800.0 700.0 5Y CAG 600.0 500.0 400.0 300.0 200.0 100.0 - (100.0) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Net inc

  13. Slide 13: Financial Highlights

    Financial Highlights 8,000 Balance Sheet and Cash Flow As of % (in Php Million except Book Value per Share) Dec. 31, change 7,000 2014 Total Assets 7,882.3 31% 6,000 Current Assets 3,365.4 28% 5,000 Total Assets Non-current Assets 4,516.9 33% Current Liabilities 4,225.3 33% 4,000 Total Liabilities T

  14. Slide 14: Financial Highlights

    Financial Highlights EPS 2.50 Selected Financial Ratio 2014 2013 2.00 Liquidity and Leverage Ratio: 1.50 Current Ratio (x) 0.80 0.83 1.00 Net Debt to Equity (%) -15.3% -16.7% 0.50 Profitability Ratio: - 2010 2011 2012 2013 2014 Return on Equity (%) 30.0 30.7 EPS 0.60 0.78 1.01 1.49 1.91 Return on Ca

  15. Slide 15: Comparative Metrics

    Compara;ve Metrics 2014 PSC PCSC CPALL 7-­‐Eleven (Thailand) (Philippines) (Taiwan) Key Performance Ra.o: Store count 1,282 5,040 8,127 Net Margin % 4.2* 6.9 3.8 EBITDA % 10.4* 8.9 9.5 EBIT % 6.2* 4.8 7.7 ROE 30.0 36.1 42.3 Days inventory outstanding 29.3 21.4 23.0 Days payable outstanding 41.8 50.1

  16. Slide 16: Q1 Financial Highlights

    Q1 Financial Highlights 2015 2014 % change 5,501 Sales 4,430 24.2 113 Net income 100 12.8 410 EBITDA 335 22.4 (Php million) Q1 Net Income 5 Year Trend 120.0 100.0 80.0 60.0 40.0 20.0 - 2011 2012 2013 2014 2015 Q1 37.1 56.3 113.9 100.1 112.9

  17. Slide 17: Q2 Financial Highlights

    Q2 Financial Highlights 2015 2014 % change 6,652 Sales 5,349 24.4 244 Net income 224 8.8 620 EBITDA 530 16.9 (Php million) Q2 Net Income 5 Year Trend 300.0 250.0 200.0 150.0 100.0 50.0 - 2011 2012 2013 2014 2015 Q2 81.6 107.9 179.8 223.9 243.6

  18. Slide 18: YTD Financial Highlights

    YTD Financial Highlights 2015 2014 % change 12,153 Sales 9,779 24.3 357 Net income 324 10.1 1,035 EBITDA 870 18.9 (Php million) YTD Net Income 5 Year Trend 400.0 300.0 200.0 100.0 - 2011 2012 2013 2014 2015 YTD 118.7 164.3 296.1 323.9 356.5

  19. Slide 19: CAPEX

    CAPEX 2015 Budget of Php3.5 3 Year Trend billion 4,000 3,500 Warehouse 3,000 Others Equipment expansion 3% replacement 7% 2,500 and new product line 2,000 11% 1,500 1,000 Opening of new stores 500 71% - 2013 2014 2015 Opening of new stores 1,013 1,394 2,476 Store Equipment replacement 35 208 382 and

  20. Slide 20: Future Growth Affected by Trend of Traditional Stores

    Future Growth affected by trend of tradi;onal stores PHILS by Channel | YTD TY vs YTD LY PHILS by Channel | Period Ended MAY14 Value Share of Trade Value Change % vs Year Ago Source: AC Nielsen 2014

  21. Slide 21: Potential to Improve Penetration

    Poten;al to improve penetra;on… 90,000 Philippines Thailand Taiwan 80,000 Urbaniza0on 49% 34% 75% Philippines 70,000 AGE % % % Popula;on Per Store 0-­‐14 34% 20% 15% 60,000 Demographics 15-­‐24 19% 15% 14% 50,000 25-­‐54 37% 46% 48% 55+ 6% 10% 12% 40,000 Luzon Density 896/sq.mi. 342/sq.mi. 1,664/sq.

  22. Slide 22: End of Presentation

    * End of Presentation *

Philippine Seven — Q2 2015 Earnings Presentation on 6ix