1 March 2012 DISCLOSURE DEPARTMENT The Philippine Stock Exchange Philippine Stock Exchange Plaza Ayala Triangle, Ayala Avenue Makati City Attention: Re : MS. JANET A. ENCARNACION PGOLD Analysts Briefing Gentlemen: Please see attached presentation of Puregold Price Club, Inc. (PGOLD) for this afternoon s Analysts Briefing on the company s audited financial statements and operating resultss for the calendar year ended December 31, 2011. Thank you. Very truly yours, ATTY. CANDY DACANAY-DATUON Corporate information Officer
PUREGOLD PRICE CLUB, INC. Analysts Briefing CY 2011 Results and Performance March 1, 2012
Briefing Outline Headlines Operating Performance Financial Performance Guidance for CY 2012 2
Headlines (1) Opened 38 new stores in CY 2011; operating 100 stores at year-end. Total net sales grew 33.%. Gross profit margin improved to 14.2%. Net profit margin posted at 4.0%. 3
Headlines (2) Targeting 25% growth in top-line in CY 2012; on top of aiming on current gross and net profit margins. Intends to open 25 new stores in CY 2012. Aims to address all income segments by acquiring the S&R membership shopping business 4
Operating Performance Formats Hypermarket Supermarket Discounter No. of stores 61 28 11 Net selling area (sqm) 184,773 25,436 4,528 Avg. net selling space (sqm) 3,02 08 412 Net selling area composition Hypermarket (Price Club) 86.0% Supermarket (Junior) 11.8% Discounter (Extra) 2.1% No. of stock-keeping units (SKUs) 30,000 50,000 Up to 8,000 1,500 2,000 Locations Close proximity to major intersections and transportation hubs Residential areas Residential areas Customer targets Retail consumers (65%) & re-sellers (35%) Retail consumers Re-sellers and retail consumers Wide Product Distribution Non-food 26% Food 74% Non-food 20% Food 80% Non-food 25% Food 75% 5
Operating Performance Key statistics Geographic coverage No. of stores 100 BULACAN Caloocan Presence in Net selling area 31 cities and 23 municipalities 214,737 sqm Metro Manila (53 stores) North Luzon (16 stores) Luzon Valenzuela Navotas Malabon Caloocan Quezon City Marikina 61 17 12 Number of retail outlets 28 South Luzon (31 stores) Visayas Manila Bay San Juan Manila Mandaluyong Pasig Makati Pateros Pasay Taguig RIZAL 32 6 3 1 11 8 1 2 Mindanao CAVITE Parañaque Las Piñas Muntinlupa Laguna de Bay Metro Manila North Luzon South Luzon LAGUNA Area with Puregold store coverage 6
Operating Performance Per format location distribution of 38 new stores in CY 2011 Expansion in net selling area % % 17 of 12 of of sqm. sqm. 7
Operating Performance Roll-out profile of new stores 8
Financial Performance Format Hypermarket Supermarket Discounter No. of stores 61 28 11 Net sales per format (PHP million) 33,556.5 4,64.7 736.7 Revenue contribution Hypermarket (Price club) 86.1% Supermarket (Junior) 12.0% Discounter (Extra) 1.% Gross profit per format (PHP million) 4,668.7 (13.%) 766.3 (16.3%).8 (13.6%) Sales per square meter (PHP) 181,60 184,572 162,687 Total traffic (million) 52 14 2 Average net ticket (PHP) 642 340 32 Net sales growth (%) 22 6 1,620 Traffic growth (%) 17 78 2,07 Average net ticket growth (%) 4 11-22 Like-for-like net sales growth (%) 6 14 Like-for-like traffic growth (%) 1 8 Like-for-like average net ticket growth (%) 5 6
Financial Performance Revenues PHP billion Gross profit PHP billion 3.0 5.5 24.1 2.1 3.5 2.2.2% 12.1% 14.2% CY 200 CY 2010 CY 2011 CY 200 CY 2010 CY 2011 Gross profit Gross margin (%) Strong revenue growth driven by continuing store roll out Scale of operations resulted to stronger support from suppliers in terms of discount and rebates Gross margins have improved from.2% to 14.2% in 2011 Note: Puregold Junior results were consolidated from 2H 2010 onwards 10
Financial Performance Selling expenses PHP million General and administrative and Other operating expenses PHP million.3% 3,568 8.6% 2,66.2% 2,082 CY 200 CY 2010 CY 2011 Selling expenses % of revenues Note: Puregold Junior results were consolidated from 2H 2010 onwards 11
Financial Performance Operating income PHP million Net income PHP million EPS PHP0.7 2,216 85 5.7% 458 1.% 3.4% CY 200 CY 2010 CY 2011 Operating income Operating margin (%) Note: Puregold Junior results were consolidated from 2H 2010 onwards 12
Financial Performance Stable working capital days 41.5 44.8 45.0 40.5 31.5 34.3 3.6 2.7 2.6 CY 200 CY 2010 CY 2011 Trade receivables turnover days Inventory turnover days Trade payables turnover days Notes: Average of inventory at the beginning and end of the period / cost of sales x 363 Average of trade receivables at the beginning and end of the period / net sales x 363 Average of trade payable at the beginning and end of the period / cost of sales x 363 13
Guidance for CY 2012 Net sales targeted to grow by 25% from PHP3.0 billion in CY 2011 like-for-like net sales growth anticipated at 4% full year operations of 38 new stores opened in CY 2011 to support targeted top-line for CY 2012 Gross and net profit margins aimed at about 14% and 4%, respectively Continuing suppliers support arising from scale of operations to dramatically contribute to the sustainability of margins 14
Guidance for CY 2012 Opening 25 new stores in CY 2012 1 st hypermarket for CY 2012 opened in La Trinidad, Benguet on January 18, 2012 remaining 24 new store locations contracted and in various stages of design development and construction Capex for CY 2012 estimated at about PHP3 billion; to be funded by the balance of the net IPO proceeds in the amount of about PHP2 billion and internally generated funds 15
Guidance for CY 2012 Targeted new stores per format in CY 2012 On-stream locations of new stores in CY 2012 16
Guidance for CY 2012 Picture during the opening of the hypermarket in La Trinidad, Benguet 17
Guidance for CY 2012 Aims to address all income segments by acquiring the S&R membership shopping business Board meeting of February 17, 2012 granted management authority to commence study and discussion for possible merger/acquisition of the S&R membership shopping business at terms and conditions satisfactory to both parties in compliance with fairness opinion rules of SEC and PSE, Punongbayan & Araullo, CPAs appointed to conduct an independent third-party valuation of PGOLD and the target company 18
Guidance for CY 2012 Basic information on the S&R membership shopping business S&R membership shopping business organized by the original owners in 2000 in partnership with Price Smart of the US Acquired by the Co family in 2006 Operated by Kareila Management Corporation, a company wholly-owned by the Co family Operating 6 stores located in: Bonifacio Global City - Congressional Ave., Q. C. Alabang, Muntinlupa - Aseana, Baclaran San Fernando, Pampanga - Mandaue City, Cebu 1
Analysts Briefing for CY 2011 Q & A Many thanks! 20