PCSC — Annual Report 2021

Mar 29, 2021

President Chain Store Corp.

2912 TT

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2020 Highlights and Results

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P.2

2020 Performance Overview

Leadership Advantage

• Taiwan 7-ELEVEN exceeded 6,000 stores with market share > 50% and stable franchise ratio of 90%. Introduced lifestyle and co-brand stores to meet diversified needs

• Strong foundation and adaptability: Continued growth in per-store daily (PSD) sales; revenue growth over NT$10B

• Ranked No.1 (Industry Leader) among 63 international food and staples retailers by Dow Jones Sustainability Index

O2O Service Platform:

O2O Integration

• Improved OpenPoint APP provides easy access to a virtual storefront; sales from preorders through APP over NT$3B since launch

• OpenPoint membership extended to other PCSC businesses; now over 12 million members

• Integration of delivery platform with PCSC businesses to create synergy and extend service into homes

Expansion across Asia

Continued expansion of retail presence with 10,000+ stores in Asia

• Taiwan: Retail, drugstore, F&B, logistics support, e-commerce, delivery etc.

• • Overseas: Philippine 7-ELEVEN , retail business in China

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P.3

Financial Highlights

◆Historical revenue and profit

Unit: NTD billion

2016 2017 2018 2019 2020 YOY

Revenue (Company Only)

140.1 144.5 154.1 158.0 168.1 6.4%

Revenue (Consolidated)

215.4 221.1 244.9 256.1 258.5 1.0%

Net Profit

Net Profit 9.8 31.0 10.2 10.5 10.2 -2.9% One-off gain from - - - - 20.4 Starbucks deal EPS (NT$) 9.46 29.83 9.82 10.14 9.85 -2.9%

One-off gain from Starbucks deal

• 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 ： The operating profits of Taiwan 7-ELEVEN grew year on year in 2020. Given that the one-off tax refund from subsidiaries was recognized in 2019, and overseas subsidiaries were hit hard by lockdown measures due to the impact of COVID-19, the net profit attributable to the parent company declined in 2020.

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P.4

Sales and Profitability (Company)

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($NT bn)
(store no.) Store no. and PSD-Sales ($NT) Sales
PSD及7-11店數
160
6,200 82,000
80,000
5,700 140
78,000
76,000
5,200 120
74,000
4,700 72,000
100
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
sales 140.2 144.5 154.1 158.0 168.1
10 OP NI 個體淨利
12 8.0%
5.0%
8 6.0%
8
4.8% 4.0%
6
4
2.0%
4.6%
4
0 0.0%
2016 2017 2018 2019 2020
2 4.4% net profits (one off impact
9.7 10.6 10.2 10.5 10.2
removed)
($NT bn) 0 4.2% NI(%) (one off impact
2016 2017 2018 2019 2020 6.9% 7.3% 6.6% 6.7% 6.1%
removed)
operating profits 6.7 6.3 7.7 7.0 7.5
Note: Figures in 2016 and 2017 excluded BankPro E-service and Shanghai Starbucks
OPM(%) 4.8% 4.3% 5.0% 4.5% 4.5%
disposal gain respectively. Net profit declined in 2020 because overseas subsidiaries
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Note: Figures in 2016 and 2017 excluded BankPro E-service and Shanghai Starbucks disposal gain respectively. Net profit declined in 2020 because overseas subsidiaries were hit hard by lockdown measures due to the impact of COVID-19.

P.5

Sales and Profitability (Consolidated)

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($NT bn)
(store no.) Store no.集團店數 Sales
250
11,000
220
10,500
190
10,000
160
9,500
130
9,000
100
8,500
2016 2017 2018 2019 2020
2016 2017 2018 2019 2020
sales 215.4 221.1 244.9 256.1 258.5
Note: Outlets included Shanghai Starbucks before 2017
15 NI 8%
15 OP 8.0%
6%
10
4%
6.0%
10 5
2%
4.0%
0 0%
5 2016 2017 2018 2019 2020
2.0%
net profits (one off impact
11.0 11.9 11.7 12.1 11.3
removed)
($NT bn) 0 0.0%
2016 2017 2018 2019 2020 NI(%) (one off impact
5.1% 5.4% 4.8% 4.7% 4.4%
operating profits 10.4 10.4 12.8 13.1 12.1 removed)
OPM(%) 4.8% 4.7% 5.2% 5.1% 4.7%
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Note: Figures in 2016 and 2017 excluded BankPro E-service and Shanghai Starbucks disposal gain respectively. Net profit declined in 2020 because overseas subsidiaries were hit hard by lockdown measures due to the impact of COVID-19.

Note: OPM declined because overseas subsidiaries were hit hard by lockdown measures due to the impact of COVID-19.

P.6

Steady Cash Flow

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Net Cash(Consolidated)
Unit: NTD billion
35.0 32.4
29.2
28.5
30.0
24.3
25.0 22.4
20.0
15.0
10.0
5.0
-
2016 2017 2018 2019 2020
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P.7

Sustainable Cash Dividend

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30 95%
25
20 90%
15
10 85%
5
Unit: $NT
0 80%
2016 2017 2018 2019 2020
cash dividends 8.0 25.0 8.8 9.0 9.0
Payout Ratio 84.57% 83.81% 89.64% 88.76% 91.39%
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Note：2020 cash dividend has not been approved by AGM.

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P.8

Outlook

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P.9

Key Milestones to Create New Momentum for Growth

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PSD Sales 6,000 Stores
Reliance Service Platform
100K
5,000 Stores
Reliance Store
4,000 Stores
Surpass
Convenience Store
Customer
Satisfy
Expectations
Expectations
80K and Desires
Meet Basic
Needs Lifestyle stores, differentiated
categories and services,
digital economy, points ecosystem
E-service, product mix optimization,
franchise program improvements
60K Bigger store format, TK
Marketing campaigns, CITY CAFE, iBon kiosks
2005 2008 2012 2014 2018 2020~
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2005

P.10

Expand Physical Store Services

Benefit from O2O Integration

Surpass Customer Expectations

Building a Reliance-based Service Platform to Create New Growth Momentum

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Online Service

Offline Experience

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-Virtual storefront -Expand into new fields

• -Enhance core business -Strengthen brand

• Mobile ordering and pickup

• Lifestyle Stores

• Differentiated

• i-Preorder

categories

• Membership benefits

• E-service

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Adjust structure to align with growth

People, Stores, Products, Logistics, Culture, Systems, Policy

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P.11

Aggressive Expansion to Drive Growth

6000 stores: each store flourish in its own way

• Aggressive expansion focusing on both quality and quantity to ensure economy of scale

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and quantity to ensure economy of scale
•
Stable growth in franchise ratio of total stores;
new high in renewal rate
(Store No. 6000: Fengyi Store)
7-ELEVEN Taiwan Market PSD growth for new Franchisee Overview
淨增加店數
Net increase in stores
Share by No. of Stores stores in past 5 years
加盟續約率Franchisee renewal rate
50.4% 92% 400
51% 加盟佔比Franchisee share
350
10,000 91%
49.8% 300
50%
7,500 49.5% 49.6% 90% 250
49.3% 200
50% + 369
5,000 89% + 286 150
2,500 5,107 5,221 5,369 5,655 6,024 49% 88% + 148 100
+ 79 + 114 50
0 49% 87% -
2016 2017 2018 2019 2020 第0年 第1年 第2年 第3年 第4年… 2016年2016 2017 2018 2019 20202017年 2018年 2019年 2020年
0 year 1 [st] year 2 [nd] year 3 [rd] year 4 [th] year
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P.12

Diverse Lifestyle Platforms to Meet Local Needs

• Leverage internal and external resources to provide the 4E experiences: Experience, Education, Entertainment, Exploration

Any Lifestyle

• Continue to introduce new elements for possibilities∞

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2018
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2019
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Coca-Cola theme store Kanahei theme store

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K.Seren
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Bakery !+? CAFE RESERVE
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Books.com

Heineken theme store

Lay’s theme store

21 TO GO

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PIZZA
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BEING fit

Draft Beer

Candy Store

Disney theme store

Maserati theme store

P.13

Diverse Lifestyle Platforms to Meet Local Needs

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2020
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2021

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Snoopy theme store Hello Kitty theme store Sumikko Gurashi theme store

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Cold Stone

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… more ways to interact

OPEN! theme store

Cooking classroom

Frozen food focus

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Pokemon theme store

To be continued…

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Diverse Lifestyle stores

Simple-Fit concept store

P.14

Fresh Food: A Community Kitchen that Meets All Needs

Digital Tools

• ✔ Dual AI: Precise ordering, less shortages

• ✔ i-Love Food discounts: Less waste

Fresh food revenue

• /higher earnings

• ✔ Mobile Ordering and Pickup: Digital marketing channel

hits new record

• ✔ Broaden customer Delivery Platform: base

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New Trends & Opportunities

Better and Safer

Fresh Food Revenue

• ✔ Health/fitness/frozen food trends

• ✔ Continue to improve taste and quality

• ✔ Differentiated products through collaboration with five-star hotels and famous restaurants

• ✔ Rigorous food safety standards

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• ✔ New line: Paninis, vegetarian brand

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2016 2017 2018 2019 2020
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P.15

Strengthen CITY CAFE Brand and Seize Digital Opportunities

Digital Opportunities

Market Trends

Brand Equity

• Mobile ordering and pickup drives cloud business growth

• Continue to upgrade coffee beans and equipment

• • High-value differentiated products

• Four major focuses

• Develop new products for different customer segments

• Intelligent coffee vending machines create new sales

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Mobile ordering
2020 NT$15B+ sales (physical+cloud)
and pickup
!+? CAFE RESERVE
2019 NT$14B+ sales
CITY PRIMA
premium beans RAPID GROWTH IN
2018 NT$13B+ sales
bubble tea
CLOUD SALES
Launch Fresh Teas
2015 NT$10B+ sales
1000 stores
2007 NT$500M sales
2004 Introduce CITY CAFE 2020Q1 2020Q2 2020Q3 2020Q4
30 stores
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P.16

Comprehensive and Convenient Services Drive Growth

Enhanced E-Service

• ✔ MyShip business

• -Own platform share up

• -No. 4 in no. of packages!

✔ Quick Collection Service Pickup at home; capacity still growing

• ✔ Cold Chain Pickup

• A second growth curve

• ✔ Local Collaboration

Help physical retailers pivot to online

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New Collection Options

• ✔ Collection/Payments Platform

Migrant worker remittances/loan collection

• ✔ Mask/Stimulus Voucher Preorders

New opportunities during the pandemic

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ES Collection transactions/yr transactions/yr 200-300M 300-400M

YOY+ 15~20%

YOY +5~10%

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ES Commission Income
2016 2017 2018 2019 2020
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P.17

A High-Quality Comprehensive Digital Service Platform

Building up the OpenPoint Ecosystem in 2021

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(Mobile ordering and pickup)

Precision Marketing

• Expanding to key products

• Membership tiers

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Community
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• Integration across group

• Data value creation

(i-Preorder)

• convenient store on

e-commerce

Holiday dishes, appliances, consumer electronics, etc.

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Upgraded Features

• Store communities

+1

• “+1”ordering

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P.18

Building the OpenPoint Ecosystem

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15M Members
12M Members
Everyone
6M Members Every day
A Way of Life
Some people,
(2021~)
sometimes
Development
(2020)
First Contact
Point
(~2019) Retail
Redemption
website
Beauty F&B
POS E-Point
Invoice
Logistics Sport
ibon Journal
LINE for Stores
business Mobile EC
Open
Wallet ordering and
pickup
FB fan BU integration +
page
External partners
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P.19

Innovative Technologies for the Future

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Intelligent Vending
Machine
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Intelligent Coffee Vending Machine

Self-Checkout Counter

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• Multiple temperature zones allow diverse product stock

• New opportunity to generate sales outside of stores

• QR code + contactless technology for accuracy

• IoT network for precise control

• Diverse payment methods for a variety of locations

• Quick, easy, efficient

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P.20

7-Eleven Philippines: Ready for the New Normal

Digital Development and New Services

Flexible Operations

High-Quality Expansion

• More daily necessity and grocery products; flexible shelving & pricing strategies

• Market share leader for

• Keep up with customer trends to provide more comprehensive and convenient service

• convenience store segment; 2,978 stores in 2020, continued expansion in 2021

• Continue to develop differentiated product categories, and strengthen fresh food and coffee brands

• Develop e-commerce platform and ATM services etc.

• Franchise program improvements and stable franchise ratio

• CliQQ Wallet user base growing

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• Expand delivery service

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P.21

Sustainable Company for Customers, Society, and Environment

Rigorous Supplier Management for Food Safety

Plastics and Packaging Charity Platform for i-Love Food program for Disadvantaged Groups Reduction Programs Food Waste Reduction and Global Issues

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Quality inspection lab est. 2012; full source tracing to ensure food safety

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Prioritization of packaging with less plastic and biodegradable plastics; eliminated plastic straws and used sip lids in 2019

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Goal to reduce food waste by half by 2030

Meal deliveries for disadvantaged elderly on weekends; care for seniors with dementia; community health stations

2 years running Dow Jones Sustainability Indices (DJSI World and DJSI Emerging market Index)

First Honor First Honor 2020 DJSI Industry Leader Enterprise Asia of Food and Staples Responsible Enterprise Retailing Award

FTSE4Good Emerging Markets Index; MSCI ESG Leaders Indexes and Global SRI Indexes; TWSE Corporate Governance 100 Index; FTSE4Good TIP Taiwan ESG Index; Top 5% in Taiwan Corporate Governance Evaluation System

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P.22

The end

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