PCSC — Annual Report 2019

May 9, 2019

President Chain Store Corp.

2912TT

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2018 Financial Results

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Financial Highlights

 Historical revenue and profit

Unit: NTD billion

2014 2015 2016 2017 2018 YOY

Revenue (Company Only) Revenue (Consolidated)

131.3 133.4 140.1 144.5 154.1 6.6% (Company Only) Revenue 200.4 205.5 215.4 221.1 244.9 10.7% (Consolidated) Net Profit 9.1 8.2 9.8 31.0 10.2 -67.1% One-off gain from - - - - - 20.4 Starbucks deal EPS (NT$) 8.74 7.92 9.46 29.83 9.82 -20.01

Note 1 ： The one-off gain from Starbucks deal includes disposal gain of Shanghai Starbucks, re-measurement gain of Taiwan Starbucks and relative expenses.

Note 2 ： Excluding one-off gain from Shanghai Starbucks deal in 2017, 2018 pre-tax profits grew.

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Store Number Trend

Taiwan 7-ELEVEN

PCSC

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Note: Outlets in 2018 increased by 443 compared to 2017, which excluded Shanghai Starbucks .

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Sales and Profitability

(Company)

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Sales
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GP NT$ billion
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Note ： 2018 GM% decreased because of tobacco tax.

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NI
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OP

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pcsc Note ： one-off expense from Shanghai Starbucks deal in 2017.

Note: Figures in 2014, 2016, 2017 and 2018 excluded MUJI disposal gain, BankPro E-service disposal gain, Shanghai Starbucks gain and one-off DTL impact respectively for like-for-like comparison .

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Sales and Profitability

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Sales
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(Consolidated)

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GP
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NT$ billion
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OP
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NI
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Note: The Figure for 2014, 2016, 2017 and 2018 does not include MUJI disposal gain, BankPro E-service disposal gain, Shanghai gain and one-off DTL impact respectively.

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Steady Cash Flow

NT$ billion

Net Cash(Company only)

Net Cash(Consolidated)

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Sustainable Cash Dividend

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NT$
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Note ： 2018 cash dividend has not been approved by AGM.

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Outlook

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Sustainable Growth of PCSC

Long-term goals

Taiwan 7-ELEVEN

Advancing PSD Sales to NTD 100K

Subsidiaries Seizing trends and opportunities

Let each store flourish in its own way; Steady Investment for stable growth

Adjust Structure to align with Growth

Realize synergies; Expand the business

Lifestyle Change ; Environment Challenge New Technology ; Regional Development

People, Store, Product, System, Logistics, Policy, Culture

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Key Milestones

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PSD Sales
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NT$ 100K Lifestyle stores, Differentiated products, Digital platform, Technology E-service, Product mix optimization, and Franchisee program improvements Bigger-store format, TK Marketing Campaign, CITY CAFE, ibon

NT$ 60K

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2008 2012 2018
Reliance Increase
Convenience
Tailor to various
Traffic and
Basic lifestyle Satisfy
ticket size
NEED WANT
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Upscale CITY Brand

 Upgrade coffee beans and equipment to enhance quality. CITY CAFE generated a revenue of over NT$13bn in 2018 with steady growth in coffee, tea and bubble drinks.

 Reinforce brand value and enrich customer experience with high quality and differentiated products.

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Introduced Premium coffee Expanded distribution of

2018 NT$13 bn+ Sales

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Bubble Drinks
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2015 NT$10 bn+ Sales 2007 NT$500 mn Sales

Launched Fresh Tea

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1,000 Stores

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Introduced CITY CAFE 30 Stores

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Provide Quality, Tasty, and Convenient Fresh Food Service

Famous restaurants & chefs Innovation Differentiation

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Advanced Technique Traceability Food Safety

Strengthen between peak times Healthy & Quality Consumption Trend

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Sales contribution up to 20% by 2020 (excluding CITY CAFE)

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Differentiated Product Mix

Sales of differentiated products

Exclusive and unique products from around the world

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YOY10%+
YOY10%+
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2016 2017 2018

Collaboration with SEJ, to introduce premium, famous, and 7-only products

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Constantly roll out four thematic gondolas

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Big-Packed
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Imported
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MUJI
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7 Premium 17

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Lifestyle Store for everyone

• Create PCSC synergy to meet the needs of One-stop shopping.

• Unlock unlimited potentials by cooperating with external resources

2018 PSD-sales

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1.5x
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• Offer a unique 3E experience: Experience, Education, & Entertainment

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Any Lifestyle

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Stores with same size in
Lifestyle stores
similar district
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…

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15 15
18
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Lifestyle Store for everyone

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Comprehensive Digital Service

Step 1 Step 2 Step 3 Various payment methods Points integration across Platform expansion and points rewards PCSC with strategic alliances

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E-commerce Physical
F&B F&B Insurance
platform Retail
Integration
Ecommerce
Virtual
Business OP VIP Cosmetic Transportation Medical
Retail care
Mobile
Business Sport & Financial
Transportation Telecom
service
Financing Exercise
Cash Flow: OPEN WALLET
increase visit frequency Strengthen VIP loyalty and Increase Traffic ASP improvement
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Logistics Flow:

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Information Flow :Completed customer consumption and engagement footprint
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Comprehensive Digital Platform

Leverage O2O Integration

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OP VIP Management
OP members Non-cash payment
20%
2.3x
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VIP members to grow by 100% in 2019

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Commission revenue
E-Commerce parcels ibon 、 ibon app transaction
1.1x
1.2x
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Offer new services to Increase traffic

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Go Digital in the Philippines

Aggressive Expansion

Growing Digital service

• Maintain dominant market

shares, and expect to net increase 300+ stores in 2019

Quality Improvement

• Enhance coffee brand image

• Launch E-Commerce gondola in physical stores

• Cooperate with Lazada and Shopee to increase parcels in-store pick up and return service

• Increase e-payment percentages

• Increase fried products offerings

• Optimize franchise system

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Regional Trend and Opportunities

• Utilize PCSC resources

• and transfer Know-how

 Adapt to lifestyle trend and drive sustainable growth for Takkyubin, Books.com, and Taiwan Starbucks

• Strengthen profitability of

• Philippine 7-ELEVEN

• Improve operations of Shanghai and Zhejiang

• 7-ELEVEN by enhancing infrastructure

 Evaluate potential investments in domestic and overseas markets

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Q&A

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