Good afternoon, ladies and gentlemen, and welcome to Spinneys Q4 and full-year 2025 earnings call. My name is Jean van Sittert, Investor Relations Officer for Spinneys.

With me today is our CEO Sunil Kumar and CFO Mukesh Agarwal. It is our pleasure to be with you today.

Thank you for joining us, and our thanks to Closer for hosting today's call. Before we begin, I'd like to direct your attention to the disclaimer on slide two, which contains important information regarding today's presentation and discussion, particularly concerning any forward-looking statements.

We will follow the same structure as our previous earnings calls, with Sunil taking you through the business overview and execution of our strategy, whereafter Mukesh will discuss financial highlights. Sunil will then conclude with strategic focus and 2026 guidance, whereafter we will open the floor to a Q&A session.

I will now pass to Sunil Kumar.

Hello, good afternoon everyone, and thank you for joining our 2025 earnings result today. If I look at the performance of 2025, you have seen these numbers, but just for the clarifications, I will just go through those numbers again.

13.1% growth year over '24, it's almost 3.6 billion. We have opened 13 stores last year.

Important thing is to see that 10.7% like-for-like growth. E-commerce grew almost from 14% to 17% participation with a 37% growth.

Profit after tax, 332, which is a 14.5%, and profit margin good at 9.1%. We have board recommendations, and the recommended dividend is 129.6 million, equivalent to 3.60 fils per share, which will result in full-year dividend at 75% of the profit of the year.

To give little more broader perspective, transaction, apart from that two elements I should say which I am very happy, one, the transaction growth from 37 million to 42 million, customers keep on coming. It's a very resilient demand from our customers and the brand loyalty.

Other thing I wanted to mention of the transaction growth is the fascias which we implemented from our smaller stores, The Kitchen by Spinneys, Spinneys cafes, and The Grocerant, which has helped us to get more transactions because customers come to our stores for breakfast, lunch, and dinner. Therefore, the basket also have reduced from 87 to 85, but we maintained gross profit as 42%.

Other two areas of the improvement, fresh food sales from 63 became 64, almost 90 basis points, and private participation to 210 basis points. I will give to Mukesh to go through the numbers, then we will answer the question and answers.

I would like to give you guys more time for question and answers because you have gone through the numbers already, I believe. It will be ideal to answer your questions.

Mukesh, can you take through this?

Yeah. Thank you, Sunil.

Great to meet all of you investors again after after a brief period. We met in the last quarter, and you can see quarter-on-quarter basis our numbers have are growing up, are going up significantly more than your or in our expectations, and more than pleased to present the results.

Sunil gave you the financial highlights, and you look at the number of the revenue, and how it translates in terms of the contribution from the new stores as well as the stores, the new stores we added and the existing stores. We added 13 stores this year.

We closed three stores, and all the stores which we closed were technically not closures, but were a migration to a bigger store, and which resulted in a bigger bigger supermarket, for example, Arabian Ranches 3, Nad Al Sheba Mall. We replaced a larger store smaller store with a larger store.

We ended up in 90 stores. Post-year-end also we have opened two more stores now, one in Two Towers in...

I hope there was a connection issue, and if you can raise your hand you can hear us now, it will be helpful. We saw...

You can hear now?

Hello. Yes, we will continue now.

Sorry, there was a connection issue. We have rejoined, and we will continue the presentation now.

If you look at the rollout of store opening, we opened 13 stores. We had three stores in the neighborhoods, which was the smaller versions: Nad Al Sheba, Barsha Heights, and one more store, and we closed those stores.

The intention was actually when we get a bigger site, we will close the smaller stores and move into there. That has helped us to get into 90 stores.

Other element of the business, if I'm looking at square feet, we have done consistently better on per square feet revenue, from 3,802 in 2023, now we have reached 3,961. The smaller stores, whichever the stores we open, it is more efficient in terms of the product assortment deployment, and it has helped us to achieve the numbers, square feet sales.

Now, we still getting to UAE market much as possible because this is our territory which we see a huge potential to get into the neighborhoods are developed, and we are consistently in discussion with property developers. Fortunately, we are also getting quite a lot of positive feedback from the developers.

They want us to be their anchor tenant for a food solution provider. We are looking at UAE as well as The Kitchen and the other fascias which we have defined based on customers' mission, whether it is The Kitchen by Spinneys or The Grocerant or Spinneys cafes or the largest format of the stores, which we are enhancing, and still we are looking at the opportunities of getting it better.

KSA, we opened three stores. By the way, I was in KSA yesterday.

We opened Jeddah yesterday. The result and the performance of one day is extremely good, and that is actually a success, and the customers were appreciating we opened Jeddah.

The e-commerce is growing, as I said, 33% plus, and it's almost on 17% of participation, which also has helped us. We never had, in some of the existing supermarkets, we never had our e-commerce solution for customers.

Now, it has helped us to serve those customers never had that opportunity. We are also looking at the brand presence to the other region, Kuwait, as we had mentioned it in the past.

We have signed with Alshaya, and we are looking at opening the stores on last quarter. We have identified couple of sites already.

One site's already signed, and the other locations will be probably on '27, second quarter or the third quarter. Philippines, we have already incorporated the JV.

We built the system requirement and the process in place. First and second store planned in quarter four, which will be on December first week, we aim to open two stores probably together, and we have committed a 18 million by the group.

We are looking at embedding our culture. One of the biggest challenges any retailer face when they expand faster, you guys asked me the question last call, what we should do if you are growing faster, what will happen to the culture and the people who are skilled to look after this business.

We are actually building that team. We are development for the team of the people who matters for us to deliver the result, and we are looking at giving and training and nurturing them to be better people.

Now, Mukesh, though I asked you to come earlier, now you can start your financial numbers.

Good afternoon again. I'll I'll not again dwell upon the same thing I discussed last time on revenue, but okay, I'll reiterate the financial highlights, more than happy to present to our investors.

The numbers are increasing quarter-on-quarter, year-on-year. You can see our revenue has grown from 3.226 billion last year to 3.6 billion this year, a growth of 13.1%.

Our GP has grown from 1.336 billion to 1.5 billion, a growth of 14.7%. Our adjusted EBITDA, which is our cash profit, has grown from almost by 100 million from 631 million last year to almost 16% year-on-year growth.

Our profit before tax has grown by 22.4%. It was 323 million last year.

It has grown to 395 million this year, which is a phenomenal increase if you look at the overall numbers that we have achieved this year. Our profit after tax, despite the impact of corporate Pillar Two taxation, has grown by 14.5% year-on-year.

It was 290 million last year. This year, it is 332 million.

Whatever cash we generate, we have been able to successfully convert 93.6% of that cash into real cash from business perspective. The free cash flow that we have generated is around 463 million.

The net debt on the balance sheet is nothing but the lease liabilities. If you remove the cash balance from the lease liabilities of 1.03 billion, and remove 776 million of cash, the net debt is only 259 million.

No real debt on the balance sheet other than 6 million dirhams we have on our London JHF Spinneys Sourcing Limited. We have renamed our JHF offices in in our overseas sourcing offices to Spinneys Sourcing Limited.

Other than 6 million that we have in our London subsidiary, there's no other debt, and giving us a total cash position of 776 million on the balance sheet. We propose to pay a dividend of 3.6 fils per share, amounting 129.6 million.

Now, this dividend, if you add the first half dividend of 3.32 fils per share, will give a total dividend of 6.92 fils per share. That equates to 4.52%, if you take the IPO price of 1.53, and if you take the current price, which is today's price of around 1.60, the total dividend yield, from shareholders' perspective, is around 4.35%.

If I have to dissect the revenue further, you can see the growth is mainly coming from LFL growth of 10.7%, as Sunil said, is mainly resulting from the transaction growth of around 13.1%. We were serving, if you just look at anecdotally, we were serving around almost 115 customers per day, if you just divide the transactions by 365.

Last year, we were serving 102,000 customers, or you can say 115,000, on a daily basis we generate the invoices. FY '24, if you look at the year-on-year, the growth is 10.7%, which is equal to our LFL growth, and the growth is 13.2%.

If you dissect the revenue from contribution perspective, 10% of the growth came from the existing stores, amounting to 331 million. Almost between 3% and 4% growth came from the new stores, around 4%, and some loss which we had to suffer because of the stores that we closed this year as well as in the previous year.

Most of the growth is driven by our LFL growth, as well as also online sales contribution, which has increased by 37%. The penetration has gone to 17%.

That has also helped us in increased in the overall revenue. To see the like-for-like growth, this is all for the last eight quarters, you'll be happy to know that we have consistently exceeded.

The like-for-like growth for Q4 2025 was 10.7%, and same for the entire year. Definition, as it says, that we include the stores even they were they were in existence in a partial period in the previous year.

As a result, you can see in some of the quarters there is a higher higher number because of the way the LFL is calculated. If you just If you just calculate the LFL on 12-month to 12-month basis, it will be around 8.4% for for the year 2025.

If you look at the GP, our GP has gone up from 41.4% to 42%. You may ask the question how the GP has gone up to 42.9% from 41.8% last year.

One good thing is last year we had Saudi, which was the first year of operations for us, six months, we had initial hiccup in terms of the inventory provisioning and and, of course, the margin. We're trying to achieve our desired set of margin in Saudi.

Now, we have been able to achieve that margin, and also overall the margin, both in Oman and as well as Saudi, have grown up from last year because of the realignment of the assortment that is in both in Oman as in Saudi. We have not achieved that level of alignment, which is directly in similar to what we sell in UAE.

As a result, the margins have gone up on a quarter-on-quarter basis. Even on year-on-year basis, you can see 41.4% has become 42%, and mainly driven by your increase in fresh and private label private label participation, and partly offset by the fact that there there is a there is a event wastage happens when we increase the number of store openings.

Our adjusted EBITDA is 21.7% for the quarter and 20% for the year for the entire year, from increase of 16% from 631 million to 731 million. Despite the fact there was a one-off IPO cost in the previous year amounting to 4 million, and we had pre-opening expenses in Saudi Arabia amounting to 10 million, we have been able to increase our EBITDA.

Our profit before tax as a percentage of sales is 10.8% for the entire year, which has gone up by 22.4%, which is 323 from 323 to 395 million. Our selling, general, and administration expenses, we have been able to keep them consistent in the range of 22.3%, similar to last year.

This gives indication, despite the fact that we are growing our business not only organically in UAE, but also expanding outside in Saudi as well as the other countries, we are able to maintain our level of efficiency. We had a 6% additional tax we provided this year on for on Pillar Two, and due to that, our profit after tax has slightly diluted.

Despite that, you can you can see in the numbers that our profit after tax we have achieved phenomenal 9.1% of overall revenue, which equates to 332 million dirhams, a growth of 14.5% from last year. I will discuss this free cash slide on the in the first slide.

The message is that 776 gives a very strong footing in terms of self-funding our growth, whether it's the FoodTech Valley, which will come in next next two years, or whether it is funding our Philippines and Kuwait expansion, as well as funding our funding our growth in UAE and KSA. I'll pass on to Sunil to discuss the strategic focus for 2026.

Thank you.

Thank you, Mukesh. As you see, UAE is our focus still, and the wider opportunity for different fascias to be in UAE is huge, and we are focusing on expanding further to UAE wherever it is possible, including the existing neighborhoods, and which has proven the existing neighborhoods we never had an opportunity in the past, and we opened four stores we never attempted, I should say, three years or four years back to go and open a store on those neighborhoods.

We saw we opened stores in Al Jafza, we opened a store in Bay Square, we opened a store in Twin Tower, TECOM, like Mukesh mentioned, and one in Media City. These are existing neighborhoods, very mature, but what we saw the value proposition what we have built recently, I should say since last three, four years, which has been accepted very well by our customers, and it gives us a huge confidence to open more stores on the existing neighborhoods.

UAE is a huge opportunity still for us. We have to start working on FoodTech.

Initial plans are in place. We are working to get a handover from the developer, and we should start our initial work-in-progress probably this quarter.

KSA, we opened our fourth store yesterday, and we will be opening two more stores this year, one is ROSHN, and the other one is Jawaharat. The other areas of improvement we are keenly watching, observing is how Spinneys Swift, which is our own platform, which last year we launched it.

We can see that growth of the e-commerce almost in 45%, and we are considering to get more share from the marketplaces on e-commerce platform. We have to give the same brick-and-mortar digital experience.

We are spending money and efforts and resources behind it to enhance that experience. Of course, the regional and international expansion through Kuwait and Philippines.

Mukesh, you can give the guidance.

I'll just briefly take you through the guidance. This time we've tried to give a range because especially in case of Saudi, we have suffered in the past when it comes to the handover of the sites from the landlord.

The store openings, depending on how the handover from the landlord spans out, we are confident that we will be able to give six stores this year, but it can probably go up to 10. This is our assessment from 6 to 10 stores, against 13 stores that we opened this year.

Store closures, one we have planned. There's a challenge in terms of the issue the landlord asked us to vacate, but if we succeed in continuing with that location, then probably there will not be any store closures.

The revenue growth is in the same range which we guided last year, even though we grew 13.1%, and we expect that with LFL growth of around 6% to 8%. Now, depending how the growth moderation happens in UAE, if we're able to achieve this 6% to 7% range of LFL growth, and additional 3% to 4% growth comes from new store, we are confident that we are able to achieve a revenue growth of 9% to 11% in the year 2026.

Our EBITDA margin is between 18% to 20%. Again, the slight dilution we have given because of the fact that we are growing in Saudi, and any store takes a bit longer gestation cycle for a store to become profitable, and when we go to Philippines and Kuwait, there will be initial pre-operating expenses that we have to incur.

As a result, as also during the IPO times we had given that there could be a 1% erosion due to that fact. That is the reason we have a guide on our EBITDA in the range of 18% to 20%.

Our capex slightly higher from this year because of the fact that FoodTech Valley is coming, and we will be incurring some costs in that aspect, so as a result capex is 3.5% to 4% of revenues.

Thank you, Mukesh. We will now hand over to Closer, who will moderate the Q&A session for us.

Yes, we can hear you.

Thank you, Emad, for your question. I knew it was coming.

If you look at overall store rollout plan in Saudi, and then if Kuwait comes up, we'll have to have the pre-opening expenses in Kuwait. In Saudi also, see, the margins have gone up as per expectations, whatever were our desired margins, we're able to achieve that.

Still the margins are slightly lower than what we achieve in UAE. As and when the Saudi becomes a larger pie of the pie from an overall business, then there will be a slight erosion.

Now, having said that, the e-commerce delivery, we're able to recoup significant portion of the costs that we pay to our aggregators by charging additional price on the product that we sell through e-commerce channel. That may have a slight erosion, but not to the extent that should really worry us.

We are confident that whatever we have guided, we'll be able to achieve. Without any doubt, there would be additional costs coming in Kuwait, which will come in SG&A, and the pre-opening costs, whether it's a staff costs or whether it is setting up new office, registering the product in Kuwait.

Those costs will be reflected next year, which will erode our EBITDA. Thank you.

Is that better? Sorry.

Good. Thank you very much for the opportunity.

Two questions, if I may. Firstly, on the revenue growth guidance.

Given that you're expecting like-for-like revenue growth of 6% to 8%, and you did a lot of store openings in '25 and planning for quite a few in 2026, it seems like the sort of 3% delta above the LFL growth is quite small. Do you have any comments around that?

That's the first question. The second one, just on Spinneys Swift, it'd be interesting to get your thoughts on what proportion of your sales do you think that could grow to, and whether there'll be cannibalization of third-party sales or where that growth actually is coming from?

Thank you.

Mukesh, you want to say?

Yeah. See, on the revenue growth guidance, see, our like-for-like has been say around 10.7% 10.7% for the way we calculate LFL.

You look at the when you look at like-for-like like-for-like growth of existing stores on a 12-month to 12-month basis, this is around 8.4%. That's where we have given the guidance.

The same time, economically we cannot predict the real growth of population when it comes to the overall stores store maturity, how the occupancy of the villas surrounding our neighborhood. Like for example, we have two, three new stores, classic example is Arabian Ranches and the store in Layan, those stores are new stores, population is still growing.

Now, that growth also depends on how the occupancy evolves in the next one or two years. We have we have been conservative in that, because we can't expect the country to grow at the same rate for the way it has been growing in the last 5 years.

We have moderated our LFL LFL expectations from that perspective between 6% to 8%. Over and above that, whatever new stores we add, now if we do six stores, then, of course, we'll be on the lower end on the range, but if we if we go on the higher side, say around 9 stores, 10 stores, then probably we will have we'll have a higher range of growth.

We're just trying to keep the expectations in terms of more realistic rather than being more on the on the aggressive side. Now, when it comes to e-commerce, for example, the main reason why we grew in e-commerce this year is because we Deliveroo was not on our Spinneys platform.

We started giving them more stores in our Spinneys platform this year, and until last year, they were only on our Waitrose platform. Now, Deliveroo has specific specific set of customers, and specific set of customers they cater to, and that that has really added our growth in terms of in terms of revenue, and that will continue to grow.

When it comes to any e-commerce store, like we we we don't have a dark store, but all our all our stores are serving as e-commerce e-commerce stores for for all our customers around. We are able to tap to those customers who who want to go for convenient shopping and want to order online.

We are able to add those customers. Very difficult for us to say to what extent it is cannibalizing, but if you look at the overall numbers, both physically our stores are growing, as well as the in-store sales are growing, as well as our online sales are growing.

We are we there is no concern as far as, overall sales growth trend is concerned. We are not too much really not really concerned about that.

Thank you.

Hi, Harry. Quite a lot of questions, and some of the questions we will not able to give you explicit answer, but I will give you a generic answer of KSA and e-commerce.

KSA, if I if you look at the our revenue growth, as I mentioned earlier, two pillars consistently delivered revenue growth, margin, therefore, the EBITDA growth as well as net profit, which is our fresh food participation, which moved from 90 basis points from 63 to 64, 63.7% to 64.1%, and private label moved from 43 to 44%. Now, these are the two biggest elements for a retailer why customers are coming in.

We saw the same trend in Saudi Arabia, particularly imported range of products. That has given us a better margin than what we anticipated, which I've been telling in the last many earnings calls.

We are happy with the KSA's trend. It is more or less similar to Spinneys what I have seen the trend.

The two, three categories, in fact, which is doing extremely well since last five years, I should say, one is the meal solution deli, the product range which is consumed now, consumed later, and take-home, that kind of range, which is a direct competition with food services, and also very competitively priced with a very lucrative margin, the efforts for the margin of course, that the efforts which we do, whether it is from the factories or from the store level. Those products, consumed-now products range, also there is a high possibility of a circular economic model, which means instead of instead of throwing it the near expiry date for whether it is a fruits or vegetables before its shelf life, we actually convert those into a finished product, which will give us an economies of scale in wastage as well as the margin, which helps us.

We have seen that product range and category range are actually moving faster than what we expected. That trend also is visible in KSA, and we are very happy for that.

We will be opening two more stores in KSA next year, as I said. One is in Jawaharat, which I think it is called Whitefield Whitefield now, not Jawaharat, but it was called as Jawaharat in the past, and one is ROSHN development in PIF community.

These two stores we should be opening next year. In UAE, one of the challenges we face, though we have signed and agreed upon a opening date with the property developers, a timeline, unfortunately, many of the developments, whether it is Emaar, Dubai Properties, or Nakheel, or any other single individual developers, sometimes there is a critical issue that they are not being in a position to open those community centers.

We take the previous question when Mukesh was answering, the larger stores normally take, and the larger stores we will be getting an opportunity to have larger stores only for the newer community neighborhoods, which is not necessarily which is already occupied. We will be the first movers, and our job is to ensure that we add value to that community, and that's why we are preferred retailer to be there, and that normally takes a maturity time.

In the existing neighborhoods, we get an opportunity only for the smaller fascia stores, whether it is Kitchen or whether it is Grocerant, but that immediately gives us a return on investment. The larger stores, it takes time normally once the community get established.

The third question is the e-commerce commissions. Now, two, if I analyze last year's e-commerce, whether it is a marketplaces or our own, and the fastest growth we have seen is from our own platforms, in the Spinneys Swift and spinneys.com.

One of the objectives we have is to ensure that we give most of the customers that opportunity to to go through our own Spinneys Swift. Deliveroo of course, as Mukesh mentioned earlier, was not there most of the stores most of the Spinneys stores last year.

We have added due to the request from the customers where we were not in a position to give Spinneys Swift. Our objective going forward is to ensure that we cover most of the stores through our Spinneys Swift because we wanted to give a Spinneys experience, whether it is in digital or brick-and-mortar.

Thank you for your question.

When we looked at the analysis of Kuwait, one of the important factors we noticed is the customer base is more affluent as well as accepting customers. Of course, it is a premium segment of customers where we have been catering in UAE.

Those customers are there, and their desire is to have a healthy option eating propensity for Kuwait particularly, in Kuwait City, I should say. We are going to open our first store in Kuwait City.

Of course there are two different maybe the majority of the customers are not Spinneys customers, maybe it is a value-focused customers, but our focus is to ensure that we deliver a fresh food credentials and private labels and what are our strength, we wanted to give that option for Kuwait City. When we told in public the JV with Alshaya, we have been getting a lot of comments when is the opening date.

We are very confident that the Kuwaiti customers will respond to the value proposition we are going to deliver to them. Thank you for the question.

We really appreciate, and we had a remarkable 2025. We ensure that we will continue that momentum for 2026.

All the deliverables which we are focusing, which matters for the customers and the stakeholders, we are critically looking at enhancement of those areas and looking at the new markets with the efficiency what we can achieve, focusing on the product assortment, what worked last year, what didn't work last year, how can we navigate around the products listing and getting to Saudi Arabia. We are working on daily basis, and we are hopeful that we will have a good result going forward 2026 based on the momentum what we have got in 2025.

We really thank you for attending this earnings calls, and once again thank you very much and good evening.

Thank you everyone. Really good talking to all of you.

Hope to see you soon in our one-to-one presentations or otherwise in the next quarterly earnings call. Thank you.