PCSC — Interim / Quarterly Report 2020

Sep 14, 2020

President Chain Store Corp.

2912 TT

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2019 Highlights

Listed for the first time on DJSI Word Index and DJSI Emerging Markets Index. Stayed on the FTSE4Good Index, MSCI Global Sustainability Index, and TWSE Corporate Governance 100 Index. Ranked top 5% by TWSE on Corporate Governance.

Number of 7-ELEVEN stores in Taiwan exceeded 5,600.

Multidimensional lifestyle and cobranded stores satisfied different needs of customers in different shopping districts.

Fresh foods revenue contribution exceeded 20%, thanks to equipment and process optimization, product upgrade, collaboration with famous restaurants & chefs, and capitalizing on customer trends.

CITY CAFE revenue exceeded NT$14 billion in 2019. Premium coffee made more widely available.

Launched Myship, a comprehensive and secure transaction platform. Handled more than 200 million EC parcels.

Number of OPENPOINT members surpassed 6.5 million. Member contribution kept increasing thanks to more engaging membership program.

Introduced various payment tools. Expanded the use of OPENPOINTS through diversified collection and redemption campaigns.

Franchisee percentage and renewal kept increasing.

Number of 7-ELEVEN stores in Philippines exceeded 2,800.

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Financial Highlights

 Historical Revenue and Profit

Unit: NTD billion

2015 2016 2017 2018 2019 YOY

Revenue 133.4 140.1 144.5 154.1 158.0 2.6% (Company Only) Revenue 205.5 215.4 221.1 244.9 256.1 4.6% (Consolidated) Net Profit 8.2 9.8 31.0 10.2 10.5 3.3% One-off gain from - - - - - 20.4 Starbucks deal EPS (NT$) 7.92 9.46 29.83 9.82 10.14 +0.32

One-off gain from Starbucks deal

1. The one-off gain from Starbucks deal includes disposal gain of Starbucks Shanghai, remeasurement gain of Starbucks Taiwan and related expenses.

2. The net profit decline in 2018 was due to the one-off gain from Starbucks Shanghai deal in 2017.

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2020H1 Financial Results

Unit: NTD billion

2019Q2 2020Q2 YOY 2019H1 2020H1 YOY

Revenue (Company Only)	39.6	41.4	4.6%	77.5	80.7	4.1%
Revenue (Consolidated)	64.0	61.5	-3.8%	125.0	124.5	-0.4%
Net Profit (Consolidated)	3.0	2.7	-8.9%	6.2	5.6	-10.3%
Net Profit
attributable to the	2.6	2.5	-2.0%	5.5	5.1	-7.4%
parent company
EPS (NT$)	2.49	2.44	-0.05	5.29	4.9	-0.39

Note: 7-11 Taiwan operations remained solid for first half in 2020, and the sales and operating profits of 7-11 Taiwan in 2020H1 grew year on year. Given that the one-off tax refund from subsidiaries was recognized in 2019H1, and 7-11 Philippine was hit hard by lockdown measures due to the impact of COVID-19, our net profit attributable to the parent company in 2020H1 declined 7.4% YoY to NT$5.1 billion.

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Sales and Profitability (Company)

Store numbers and PSD

Sales

Unit: NTD billion

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Note: 2020H1 PSD-sales declined year on year due to COVID-19 but slowed down in May and turned to growing since June.

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NI
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Gross and Operating Profits

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• Note1: Adjusted for the one-off gain from the BankPro in 2016; one-off gain from the Starbucks deal in 2017.

• Note2: 7-11 Taiwan had steady growth on net profits for 2020H1. Given that the one-off tax refund from subsidiaries was recognized in 2019H1 and 7-11 Philippine was hit hard by lockdown measures due to the impact of COVID-19, 2020H1 net profits declined year on year.

Note: 2020H1 Gross and Operating Profits continued to grow year on year.

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Sales and Profitability(Consolidated)

Store numbers

Sales

Unit: NTD billion

Note ： 2015~2017 store no. included Starbucks Shanghai. The number

of stores continued to grow in 2020H1.

Note ： In 2020H1,the sales of 7-11 Taiwan, Transnet and Books.com grew year on year but the sales of 7-11 Philippine and other subsidiaries declined due to the impact of COVID-19.

Gross and Operating Profits

NI

Note1: One-off expense from Shanghai Starbucks deal in 2017.

Note2: 2020H1 operating profits of 7-11 Taiwan grew year on year. However, our subsidiaries, e.g. 7-11 Philippine was hit hard by lockdown measures due to the impact of COVID-19. Thus, 2020H1 consolidated operating profits declined year on year.

• Note1: Adjusted for the one-off gain from the BankPro in 2016; one-off gain from the Starbucks deal in 2017.

• Note2: 7-11 Taiwan had steady growth on net profits for 2020H1. Given that the one-off tax refund from subsidiaries was recognized in 2019H1 and 7-11 Philippine was hit hard by lockdown measures due to the impact of COVID-19, 2020H1 consolidated net profits declined year on year.

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Segment Information

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Retail business: Philippine 7-11, Cosmed, Takkyubian(Transnet), Books.com, Mech-President etc. Logistics: Retail support, Cold Chain, Wisdom distribution etc. Others: China business, F&B business (e.g. Starbucks) and Support business

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Steady Cash Flow

Net Cash(Consolidated)

Unit: NTD billion

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2015 2016 2017 2018 2019
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Sustainable Cash Dividend

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Unit:NTD
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Note: The cash dividend has been approved by the shareholders meeting.

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2020 Outlook

PCSC keeps exceeding customer’s expectation and evolving into a reliable service platform.

Maintaining store expansion of 7-ELEVEN Taiwan to drive future growth.

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Introducing diversified lifestyle stores with boundless possibilities to meet customer’s needs.

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Providing quality, tasty, innovative and convenient fresh food service.

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Strengthening CITY CAFE brand value by expanding !+? CAFE RESERVE and CITY PRIMA. Offering convenience to customers by mobile pick up function.

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Introducing high-quality, exclusive and differentiated products from around the world.

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Developing a comprehensive digital platform by leveraging online to offline integration.

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Reinforcing OPENPOINT program to enhance the contribution and stickiness of members.

Leveraging high technology to enhance customer experiences and improve efficiency.

Up in quantity and quality for 7-ELEVEN Philippines.

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The End

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