FY 2024 Full-Year Results Presentation

Good morning everyone and thank you for attending the DFI Retail Group 2024 full year results presentation. I'm Karen Chan, investor relations director. Joining us today is Mr. Scott Price, Group Chief Executive and Mr. Tom Van der Lee, Group Chief Financial Officer who will be providing remarks on our full year results followed by a Q&A section. Today's presentation is being webcast in its entirety. In addition, the full text of our results announcement and slide presentation have been uploaded on the investor relations section of our website. Before we start, I would like to remind you of the following information to be provided during the presentation. The information about to be presented is for information purposes only and is not intended to be investment advice for any person. There's no intention to invite for any dealings in any securities. There may be forward looking statements mentioned in the presentation materials which include statements regarding our intent, belief, or current expectations with respect to DFI retail groups business and operation, market condition, etc.

You're expressly advised not to rely on this forward looking statements, as they are subjective views which are subject to risks and uncertainties. And with that, I'll pass it over to Scott. Scott, please. Thank you, Karen. Good morning, everyone. And a pleasure to be with you here today to talk about our 2024 full year results. Just wanted to start off with a few key business highlights. I'll unpack quite a bit of this in more detail as we progress through just a review of our strategy and our current format performance. Overall macro, we're a business that's balanced between North Asia and Southeast Asia, gravity towards North Asia. We clearly see some northbound consumption, in particular cross-border from Hong Kong into China. We estimate roughly 5.5 meals a month have moved across the border, generally dining out. much less grocery coming back into Hong Kong. We think that we're balancing that,

and in fact saw growth in our food business in Q4. So I think that we're cycling that. A lot of competition from Chinese digital players, and I think as one prepares for a broader, greater Bay Area type of strategy, we're ensuring that we are set for success in Hong Kong, as more and more customers can shop across the border. And that's two-way. We believe there's some very attractive items that we sell that do well across the border in China. Number of steps taken to improve our profitability in 2024. Worked hard on cost savings. We very much applied to the everyday low-cost mindset, including across our overhead. We expanded our margin from 1.7% to 2.3% in 2023 and 2024, and saw our digital business turn to profitability. Driving own brand, there is a flight to value.

Customers across the region are concerned, and we see it in their buying behavior. For example, in the month of December in Hong Kong food, Although the total basket was basically flat in terms of number of items in the basket, the value per item went down by roughly 3%. And that's down trading. And what it means is that our own brand margin, which is actually quite healthy, higher than national brand benefits as customers trade down into the Meadows brands and other parts of our own brand portfolio. We're still optimistic in terms of 2025. There's concerns around, well, what does it all mean? My team well knows. I say people are still going to eat, they're still going to shower, they're still going to drink coffee. I think we're set with the right assortment. We think we'll continue to gain share in 2025 across our Hong Kong businesses, including

restaurants, capturing growth and health and beauty and convenience. and we'll talk a little bit more about that. Ongoing cost optimization. We constantly focus on reducing our cost to serve our customers. We see franchise as an opportunity not only to continue growing, for example, 7-Eleven in South China, but expanding our franchises now into our health and beauty portfolio format and are looking a couple of Southeast Asia markets where we think we can accelerate growth through franchise. Leveraging data, we have a very powerful YUU membership base of 5.3 million. Customers shop every single day earning points. That data is now helping us not only be a better operator, but we think also offers opportunities for monetization of that data with our vendor base. And we're continuing to expand our omnichannel presence, and I'll talk in a few slides a little bit more