DFI Retail Group Holdings Limited (DFA1.F) Earnings Call Transcript & Summary

Good morning, everyone. I'm Karen Chan, Strategy and Investor Relations Director at DFI Retail Group. It's my privilege to welcome everyone here and on the live stream to DFI Retail Group Investor Day 2025. Before we begin, I would like to remind everyone to please switch your mobile devices to silent mode. Please also be advised that there may be some swimming and photography taking place to capture a few highlights from the event today. Today, we have a full agenda. Over the next few hours, our management committee team will be presenting detailed strategy update, highlighting growth opportunities across our businesses, followed by a Q&A session. In the afternoon, we'll begin our 7-Eleven and Guardian store visit for those participants who have signed up. More details on the logistics will follow shortly before the lunch break. Now before we start, may I remind you of the following regarding forward-looking statements. The information about to be presented is for information purposes only and is not intended to be investment advised 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 Group's business and operations, market conditions, et cetera. Please refer to the full slide for our disclaimer. Now may I introduce you to the DFI Retail Group Management Committee team who are with us today. Mr. Scott Price, Group Chief Executive; Mr. Tom van der Lee, Group Chief Financial Officer; Mr. Andrew Wong, Chief Executive Officer of Health & Beauty; Mr. Yoep Man, Chief Executive Officer of 7-Eleven; Mr. Curtis Liu, Chief Executive Officer of Food; Mr. Martin Lindstrom, Chief Executive Officer of DFI IKEA; Mr. Wee Lee Loh, Group Chief Digital and yuu Rewards Officer; Ms. Crystal Chan, Group Chief Technology and Information Officer; Ms. Ella Chan, Group Chief Strategy Officer; Ms. Erica Chan, Group Chief Legal, Sustainability and Corporate Affairs Officer; and Ms. Joy Xu, Group Chief People & Culture Officer. May I now invite our Group Chief Executive, Mr. Scott Price, to come on the stage and deliver his opening remarks. Scott, please.

Good morning, everyone, and welcome to the inaugural Investor Day for DFI Retail Group. So it's a pleasure to be here with you this morning and appreciate what a great turnout. So we've been operating in a pretty dynamic environment over the last few years. There has been quite a disrupted customer out there, and we have seen it substantially through many of the products that we sell. We believe, though, that we are seeing green shoots of recovery. We've had, for example, in our home market of Hong Kong, 6 months of positive revenue after 14 months of decline. So we take that as a great news. We believe we have the right proposition. We believe that we have the right team. We think that we've got the right strategy moving forward. We're a pretty competitive group of people. We think the last few years have shown that out. We are determined to win. We're determined to win for our customers, for our fellow team members and for shareholders. So for those who may not be familiar, DFI Retail Group started as a dairy store in Hong Kong in 1886, which means we will celebrate our 140th year next year as an outstanding retailer in Asia. We operate across health and beauty, convenience, food, home furnishings, restaurant group Maxim's, all buttressed by an outstanding, what I believe, digital proposition with a very powerful loyalty program called yuu in Hong Kong and as well for those who are based here in Singapore, you're familiar with it here as well. A little bit more detail. We're 7,400 outlets across multiple markets, 12 in specifics, 5 formats, as I mentioned. We have 22 million transactions. It's a lot of very valuable data. And we have 5 million-plus members in the yuu program in Hong Kong. That's 2 million in Singapore. You'll see the split across our formats here. And the Maxim's Group, although not noted, is $3 billion in revenue, which is included in our overall business moving forward. We've had a very eventful couple of years. We have been focused upon a reset of our portfolio to ensure that as we gravitate towards more of a federation of retail businesses, including a number of minority shareholders, we're moving ourselves to much more of a focused operating company. As a result, over the last 2 years, we've divested 2 minority positions in Yonghui and Robinsons where through only influence, we did not believe that we saw a path to win. We also just closed a few days ago the divestment of our Singapore food business. We believe that as a single entity in Singapore, there is not a right to win. We believe that the Malaysia food purchasers will be able to create the synergy of value that we were not going to be able to provide on our own. We've reset our strategy and the focus of the business, very much around organic growth as well expansion of margin. We reset our digital strategy to one that you'll see in a few presenters from now, we believe, is highly modern and accretive as well our own brand strategy. And you'll have an opportunity during the breaks, if you've not done so already, to have a chance to look at some of the great work that's been done by the own brand team led by [ Fan Yuen ]. We strengthened our balance sheet, which has been very, very important. We started with a very high level of debt. We've now successfully deleveraged the balance sheet. We ended with a positive net cash by year-end 2025 and maintained, we believe, the right financial flexibility for strategically TSR-accretive acquisitions. I want to go back. I forgot. I'm going to hear from Tom later if I don't call out the cost optimization. Our CFO is relentlessly focused on cost reduction. You see that in our continuing improvement in reducing our overhead. And finally, we delivered on our TSR commitments. First, we've aligned management for the first time in DFI's history, and I'll talk about that in my closing in a little bit more detail. an 80% plus annualized TSR as of November 2025, 40% since the beginning of 2024. And we recently, in October, paid a special dividend of $600 million to shareholders. So that's where we've been. Where do we want to be? So first, driving organic revenue growth. As I mentioned, it's been a tough reset across the region as customers pivoted to value universally. And we're now starting to see, yes, balanced with value, but also some areas of opportunity for continued growth. And I'll talk about some of those megatrends in a few slides. We are absolutely focused upon very disciplined use of our capital. We have a ROCE target of 15%. And as we leverage our capital, we're ensuring that we focus our investments in the areas where we see that we will get that high level of investment. Building that accretive digital ecosystem, retail has quite interestingly emerged with a high-margin area of digital through data optimization, data monetization as well retail media, and that will be covered in a few speakers. And finally, continuing to drive that very strong balance sheet with a focus upon return on capital employed and only M&A that we are convinced will become TSR accretive to the overall business. So what are the megatrends that we're seeing in our customers? As we develop the strategy that we're sharing with you that was approved by our Board recently, 4 megatrends that we think are emerging. So the first is mindful of wellness. Although there is a focus on value, what we're finding is that our customers will pay a premium for the sense that they're taking care of themselves better. And for those who have not had a chance, please visit our health and beauty booth at the very back. Two areas where we're seeing great outcomes from our customers is to offer the services around this concept of wellness. As we then do this rollout across all of our markets, how do we help drive Mannings and Gardy in this part of Asia with that focus upon wellness. Convenience. I tell you, I always thought I was an incredibly impatient person. Our customers are becoming just as impatient as me. You have to be able to ensure customers don't want to wait, click and collect, the ability to check out quickly, get in and get out with the products they want. So this convenience focus is an area that we think 7-Eleven is doing an outstanding job of delivering upon. We believe there's an opportunity to continue to drive not only our growth, but also a better ROCE through franchise, which Yoep will speak to in a bit as well the ready-to-eat. More and more, we are becoming a quick service restaurant. We believe a bit different than the Maxim's portfolio and a synergistic but a QSR indeed. And finally, around value. We are seeing in our food business and as well our IKEA business, enormous opportunity for us to continue to reset our supply chain, reset our assortment to ensure that customers see DFI's formats and banners as the place to go for great value. And both Curtis and Martin will talk about some of the progress. And finally, we are leveraging AI. We're in the early days, but we see the ability to personalize assortment, leveraging not only our data and the loyalty program for the knowledge that we have of our customers, but the ability for them to, one, get a quicker, faster shop with us that's a little bit more personalized, but also capturing that market share and that eyeball through our retail media. So DFIQ was launched last year -- or was it earlier this year? Last month, plenty. Okay. I shouldn't have said that. But yes, it seems to go so quickly, but we've been talking about it for a year. We've only launched it just last month, and the vendor portal is now going to be reviewed in a few slides -- sorry, in a few presentations by Wee Lee. So with those insights, we then focus very much around how we're delivering it. Our purpose, which we launched, it's some of the reels, sustainably serve Asia for generations with everyday moments that everyday essentials, the role that we play is a very critical part of what we see as the reason for the DFI Retail Group's existence. Those everyday moments that we provide, not only products but also services to our customers. That strategic pillar, customer first, people-led, shareholder-driven and then our strategic deliverables, how we'll go about doing this. So the first is retail excellence. For me, retail excellence is how every year you continue to build incremental revenue per square foot in every one of your stores. It's a relentless focus. It's a huge part of how we will increase our margins moving forward. The second is access to customers through growth. We're doing that, again, in a capital-efficient way. We're leveraging franchise across multiple formats, in particular, convenience and as well our health and beauty. Omnichannel and digital ecosystem that will be talked about in a lot more detail by Wee Lee. And then again, this lean and agile operating model. You cannot deliver low price without having low cost to be able to deliver. So we have very much pivoted our business towards a focus upon cost that I think had been lost a bit. Very pleased with the progress that we're making. And finally, reshaping ourselves from a portfolio to an operating company, which means that we will operate the businesses that are part of our overall economic model. We will do so looking for synergies across those businesses so that the sum of the parts is not worth as much as what we believe to be the opportunity for the whole. Somebody once told me that retail is a simple business. You buy, you move, you sell. We are the most complicated simple business in the world, retail. So to excel at best-in-class mass retailing, there are a lot of things that you have to do. First, you have to become #1 or #2. We're very pleased by the fact that we're #1 in our markets in Hong Kong. We have to continue to grow presence in growth markets. We see Southeast Asia as a great opportunity to build upon the primacy that we have in North Asia. Strength in omnichannel and retail is a nonnegotiable. You absolutely must be able to deliver upon a digital proposition, meet customers where they want to be. It's no longer brick-and-mortar versus digital. Omni means that customers at any given time will have different missions. They want access to both. We have to be data empowered. We have been investing quite heavily in our AI capability and transformation, ensuring that our data is a valuable asset, not only to help us operate better, but also to be very, very attractive to how we personalize to our customers. Scale benefits and global standards. As I mentioned, synergies across our businesses. So as we think about property and our ability to negotiate with landlords, the size and scale of our business helps, our ability to procure services, the scale and the size of our business helps. We have a lot of focus around how across all 5 of our businesses that we look for those synergies, and we only create overhead when it's accretive to the 5 P&Ls that we operate. Very disciplined capital allocation. Pleased again, paying down debt. We'll be net cash positive by the end of this year. We have a very, very strong balance sheet. We'll be very focused on ensuring that we continue to maintain that. And then growing TSR and dividends. As I mentioned, we're very pleased with the progress that we made through paying that special dividend. And then importantly, focused upon, again, that very competitive proposition that we have delivered with an 83% 61% if you exclude the special dividend. We do focus upon how we're performing versus our peers. So you see here a number of benchmarks that we're looking at. Our peer averages, 6%, 20% Singapore, 29% Hong Kong, even 16% with the S&P. Now a lot of that has come from the core operating improvements that we put in the business. and as well the proceeds from divestments. So moving forward, how do we continue to maintain that world-class TSR? We believe there's an opportunity to continue to grow our business through strategic inorganic activity, but it's strategic. Strategic means that it falls within a number of important principles. Number one, the markets. We're only going to enter into markets where we think that we can win. And those markets will only be in Asia. We have no interest of expanding outside Asia. Second, synergy. We are not interested in moving into new formats. We'll not go into apparel or beyond what we're doing today. So it has to be synergistic to the 5 operating units that we have today. Ownership, we will not take minority positions. You cannot build the synergy when you're only influencing. You have to have operating control. And finally, it needs to match not only the 15% ROCE, but has to be very clearly a part of an overall TSR model. We're quite active now looking around the market in which we operate. We think that there are some opportunities. We're not in a position to give any indication as to what they are other than just to say that we have a strong balance sheet, and we're very focused upon continuing that TSR growth and see the opportunity to do so inorganically. So talked a lot about customers. I've talked a lot about team members, talked a lot about shareholders. And to me, that represents community. And we take very seriously the opportunity, but as well the obligation that we have to give back to the community. We launched earlier in the year our people, planet and product commitment around how we ensure that DFI Retail Group is a valued member of the community. It has become a little bit debated this whole commitment to sustainability. We have found time after time, research after research, customers will choose a sustainable product. They want a sustainable product, but they won't pay a penny more. Now that's a huge challenge, but it's also an enormous opportunity. We have focused and invested to, one, bring down our Scope 1 and Scope 2, which is, in essence, the power and how it flows through our business. We've had a 22% reduction by the end of '25 in terms of Scope 1 and 2, I think well on our way to that 50% commitment that we've made by 2030. Much more complex is the Scope 3, which are the products that we sell. We operate across sourcing in multiple markets, almost 25 markets that we source from that are varying levels of sophistication when it comes to the topic of sustainability and reducing the carbon footprint. We have made some great progress, though. There's a little bit of a video in the back there on our low-carbon rice, 380 tonnes has been sold, 205 tonnes now of deforest deforestation-free coffee. And we have also focused upon reduction on plastic and waste. So an 83% reduction in plastic packaging, well on our way, we think, to removing it pretty much from our supply chain. And 65% of our waste has been diverted away from landfills. You're going to hear from a number of leaders. We will follow up with Q&A at the end of the day before lunch. You're going to find as you speak to them, we're passionate, we're committed, but we're competitive. We truly do want to win. We want to win for our customers, for our fellow team members and importantly, for this group, for our shareholders. Thank you very much. Again, pleased to have you here, and we'll now turn it over to Andrew. Thank you.

Thank you very much, Scott. Good morning, everyone. Very glad to be here this morning with you all to share about our health and beauty strategy, together with our financial ambition. So let's first take a look at our business overview. We're one of Asia's largest health and beauty retailer with more than 1,500 stores across 8 different markets. In the past year, we've delivered strong top line and bottom line results, achieving USD 2.5 billion revenue and USD 211 million operating profit. This is actually built on a solid 4% like-for-like growth, and we actually serve 160 -- served our customer on 160 million transaction in the last year. It is also important that we continue to keep our top 1 and 2 position in core markets like Hong Kong, Singapore and Malaysia. Sorry, the slides are not moving. So why don't I start talking about the mix life first. It works now, sorry. It's that but -- yes, I did push that button sorry. Thank you, Scott. So where are we going to continue that growth trajectory? The answer is like what Scott shared is in wellness. We are very focused to be the trusted adviser in wellness. And what wellness means, it is a space where health and beauty converge, and it is an area of significant growth opportunity. So first, wellness is bringing higher functional value. It helps our customer beyond the basic needs. And it is about products that differentiate versus mass and conventional commodities products. Let me give you an example. Instead of just selling shampoo that you could get from every single channel, we're going to focus the shampoo being sold at Guardian and Mannings with a lot more functional value like anti- hair loss, product that actually helps you improve your scope and health. Another example is derma skin care. It is no longer just solely about hydration. It is actually helping our customer to understand what a healthier skin means. How are we going to help our skin building better natural barrier and then also even linking to what stress does to our skin and extending to a wider range of supplements that help us nourish our skin from within. Secondly, we're going to build our wellness assortment based on trust and prevention so that it drives tangible value for our customers. It has to be the product that we source has to be clinically proven, scientifically proven. And then wellness also represent a higher segmental growth. because the key thing is with wellness and our customers focusing on a healthier lifestyle, this represents, in our estimation, an 8.5% CAGR growth in this wellness segment from 2025 to 2028. So wellness is actually multidimensional. It is not limited just to health. It is a cross-category growth opportunity spanning across health, beauty and even personal care. While health and beauty market remains to be a strong and steady growth market at a projected 3.7% CAGR throughout 2025 to 2028, wellness is actually outpacing health and beauty general market, as I've mentioned before, at an 8.5% CAGR during the same period, which is more than double the health and beauty market category. Our strategy positions us well to capture this significant growth opportunity by leading in wellness, leveraging through the trust we've built over the past decades and also through differentiating offering to drive future growth. Now as Scott shared, we have our operational strategies and pillars for us to deliver and bring that strategy to life. So today, I'm going to cover 3 between retail excellence, access to customers together with omnichannel and data ecosystem. Now let's get started with win in wellness under the retail excellence pillar. As I mentioned earlier, we are very focused to become the trusted adviser in wellness. And that these are the 3 top priorities for us to focus on to continue our leadership in wellness. First, it is assortment that we're going to bring in new functional focused products that helps our customer to support their journey towards a multistep routine wellness target objective achieving journey for our customers. Second, we need to invest in technology in order to drive data-driven customer insights. And then finally, it's about personalization. With those insights, how we're going to use our multiple platform and touch point with the support from our team members to bring these leverage this data to bring the recommendation to our customer. And I will take you through one of each of them shortly. So first, to enhance our wellness assortment, we build our assortment based on trust and also our expertise in our team members. These are some of the examples of products that we're going to bring derma skincare with active ingredient to support our skin health, supplements with active ingredient that boost our long-term wellness and also hair care with functional solutions to improve the quality and the health of our hair and our scope. And our wellness product sourcing strategy is going to be guided by these following principles. They need to have clinically proven efficacy. They're going to be recommended by health professionals. And these products are aimed to minimize irritation and also reducing long-term side effect for our customers. And this is important for us to help them reducing exposure to synthetic chemicals. Nowadays customers coming into Mannings and Guardians do not only looking at getting just the product. They're looking forward to have the expertise that our team members offered. For example, they want to understand more about ingredients. What is B5 going to help me? And when it even comes to sleeping quality, which is something that actually bothers as a top 3 concern of our customers across Asia, they want to understand what choices do they have, something closer to medication, melatonin, how are they going to do it, how are they going to take it or some natural ingredients that's going to help them with a longer run improvement in terms of the sleeping quality. And with the right wellness assortment and the right service that our customer -- our team members provide, these translate into tangible financial benefit for DFI. For example, larger basket size because when they understand more about their wellness need, understand more about different products and active ingredient, they're going to buy more. higher profit margin when the education is there and they understand and they lean more towards premium product, which is clinically proven. And the fact that when we focus more into wellness product supported by our team members' expertise, we do not have to compete as much into the commodities discounting game. And finally, it will bring to increased visit frequency as they no longer just come back for replenishment of the products, but they continue engaging with our team members for the expert advice. If I have to share with you a little update because Hong Kong was a little bit early on this wellness journey as compared to our Southeast Asia business, the basket of wellness in Hong Kong actually delivers 2x the basket size of our average basket. And the profit margin of the wellness included basket is 280 basis points above the average basket when customers come in without a wellness purchase in the basket. So the second thing is about technology. How are we going to utilize technology to deepen our relationship with our customer. While we were very focused to deliver our growth in the past year, we have not forgotten about innovation. And at Guardians and Mannings, we've actually brought in various types of a range of assessment tools. The first example is the health part, which is a wellness assessment for preventative care. We conduct a proof of concept in Hong Kong, delivering more than 4,300 assessment for free for our customers. And our customers love this innovation. They actually gave us a 6.8 out of 7 points of satisfaction score. And very importantly, 6.7 out of 7 score on intent to repeat and revisit. It also comes with a pleasantly surprised conversion rate of 50% after utilizing this assessment and that they are spending 3.3x bigger basket as compared to normal customer walking through to our stores without doing the assessment. Now these tests, we have a light version there without the port. It conducts more than -- it gives you more than 20 vitals with 5 minutes assessment. Another example is the skin and scalp assessment. Within 5 minutes, again, it delivers more than 10 metrics about your skin condition and 10 metrics about your scalp condition. Now we have this service across our Hong Kong, Singapore, Malaysia business. With Hong Kong starting around midyear, we have some really exciting results. I think 70%, 7-0, 70% conversion rate with customers again spending 3x more in their basket as compared to people, our customers without using the service. We've also launched this service in Singapore and Malaysia just in October, and they're delivering similarly optimistic results with the basket uplift ranging from doubling to 4x the average basket. And our customers also love this service. They're actually giving us a 6 out of 7 satisfaction rate for this machine. We are planning to increase our tech-enabled store coverage from 3% to 25% by 2028. And it is a reflection of our focus on business case, return on investment. We're going to put the technology in the stores within our portfolio where there's business case, there's business return so that it helps us achieving our TSR target. Apart from having the technology, providing us with customer-driven data, we also have our personal services. Our team members from Guardian and Mannings not only our pharmacists, but our dietitian, our beauty adviser, our adviser, our health adviser and even in some certain markets, we have mental health practitioner offering various type of advice to our customers. So again, to help us becoming the trusted adviser for wellness. And by utilizing these customer data-driven insight, we understand our customer more. We help them understand their wellness requirement more and it also help our commercial team to refine the assortment in our store and online to provide the right solution for our customer. And the third priority is after having these insights, having our team member helping our customers, the key thing is also to recommend a very personalized recommendation of products to them so that our customer could improve their well-being. Taking this scope and skin analytic machine as an example. The key thing is trust. This is a technology owned by Samsung and DFI Health & Beauty have exclusivity. And as I've mentioned before, it provides a very detailed analysis for our customer so that they are confident that our team members, apart from the experience, they also based on scientific method to help coming up with recommendation of products for them. And I sincerely invite you to try the products, try the assessment. Our colleague also prepare some right product to fit with your problem area and help you improving your skin. And we welcome you to visit our Guardian stores in Singapore, am stores in Hong Kong and Malaysia and Guardian to continue purchasing after you've seen an improvement in your skin and scope condition. The other important area under our retail excellence pillar is our own brand reset. When we reposition our own brand strategy, the first thing that comes to mind is we got to listen to our customers. We've conducted more than 80,000 customer survey, understanding what are the right own brand category and the feedback about our products. And they tell us loud and clear. It is about quality, but giving our customers these products through great affordability. We've also, through this exercise, understanding from our customers, rationalized our SKU, taking away 40% of the low-performing SKU that might not fit their need. And this exercise also include a redesign of way more professional packaging, again, taking the feedback from our customers. and they result in measurable tangible results. Our own brand gross profit on a productivity per SKU level has improved by 30%. Our end-to-end gross margin uplift by 13% versus 2023. And we're on track to deliver a 500 basis point advantage in margin as compared to national brand by 2028. And it's worthy to mention as well, now we're in Singapore. Our future growth strategy of own brand is going to be very optimistic, and we're going to work with different partners. So we've actually recently just announced our collaboration partnership with the National Healthcare Group in Singapore, one of the very renowned institutions to develop a new line of products that fits into the wellness category. So please stay tuned. Another pillar under our strategy is the access to customers. Indonesia is one of our fastest-growing market. And we've recently done a survey asking our customers on the impression towards Guardian Indonesia. While we score well in a lot of the categories, the apparent gap or opportunity for us to improve is in terms of convenience, location and accessibility to our customers. which is why we are going to focus on accelerating our store growth in Indonesia through franchise, which is capital light. And at the same time, we could harness the local knowledge, especially when it comes to site availability. We're going to extend our presence to 32 provinces and also reaching a total number of 750 stores by year 2028, which basically double our size in Indonesia. The third pillar is omnichannel and data ecosystem. As we've mentioned before, it is extremely important nowadays that customers do not only focus on offline, but also on online. And we need to make sure that we bring seamless journey for our customers on both different channels. And it's so much important for us to have unified data point wherever they shop, they will be given a good customer seamless experience. So what we're going to do is going to -- number one, we're going to continue investing in our omnichannel capabilities, faster delivery time, click and collect solution in our store and also enhancing continuously on our UI/UX in the Mannings and Guardian channel with an ambition for us to grow our online sales penetration to 7% to 9% by 2020. Secondly, is to drive loyalty. We've actually started in all markets now having our Guardian and Mannings loyalty program and especially in Hong Kong as part of the yuu loyalty program. And we're going to leverage the personalized data so as to continue giving our customers better education in terms of certain new trend coming out from wellness, making recommendation of the right product that we understand that we anticipate that they will care about. And this is extremely important for us to continue growing our business. Third is also to leverage our extensive network, both online and offline to drive retail media monetization. As you can see from the picture, this is some of the examples of how we will be placing screens in different touch points at our store. It helps the customer to be exposed to more targeted advertising and recommendation in the areas of the stores that we want to shop at. It helps our supplier partner to bring more targeted advertising to our customers. And at the same time, it also represents new growth and monetization opportunity for us. My colleague, Wee Lee, will share with you more in this area in a session. So with the strategy that has been shared, it has to come with our financial ambition. First, about sales. We're going to deliver 4% to 6% CAGR growth between 2025 to 2028 in sales through increased productivity per square foot and also expansion of network. Secondly, we're going to deliver 9% to 11% operating margin by 2028, which is through P margin improvement initiatives and also continue growing our own brand penetration. And the third area is ROCE. We're going to deliver 55% to 60% ROCE through capital-light expansion model, CapEx-light model and continue with our very healthy store payback of less than a year in our offline stores. And at the same time, investing to accelerate our digital capability. So if there's one slide I would love to have everyone remembering in my presentation this morning. These are the key takeaways. Number one, we are fully focused to become the trusted adviser of wellness, whereas wellness is the space where health and beauty converge, that's going to deliver strong growth opportunity. Number two, wellness is a segment to grow very strongly. And our target is to have wellness to actually cover 35% of our sales with that sort of penetration and participation. Number three, we're going to continue to accelerate our access to customer. And one of the key focus is to accelerate in Indonesia, doubling our network through a franchise model that will be requiring less capital from DFI. And finally, we're going to enhance our digital capabilities by investing into omnichannel capabilities. Thank you very much for your time today. Thanks. And I'll pass the time to Yoep.

Thanks, Andrew. Good morning, everyone. I'm very pleased to stand in front of you and share with you the convenience business of the DFI Retail Group. In the next 25 minutes, I basically have 2 objectives. Number one, share with you the strategy that we're deploying in the convenience business. and number two, how we are executing against our strategy. I'm very pleased to have the opportunity to do this with you, but more importantly, being able to support a great brand like 7-Eleven. Before I share with you the future state of the 7-Eleven business, I want to take a step back and really share with you where we stand as of now. So we operate the master franchise agreement for 4 regions. Hong Kong, Macau, Singapore as well as in South China. With this agreement, we're able to grow the 7-Eleven brand by means of operating company-owned stores and at the same time, we're able to work with franchise stores who are able to get a sublicense agreement to operate their individual stores. And this model, we've been working on for the last 4 decades. So as a result, we operate 3,400 stores in the licensed geographies of Hong Kong, Macau, South China and Singapore. Our financials are robust. Last year, we posted a top line of USD 2.4 billion, and our operating profit is in excess of USD 100 million. We are the #1 player in Hong Kong, Singapore and Macau. We are the #1 international convenience player in South China. If you look at China, there are 12 franchise partners. DFI is one of them. We are by far the largest and the most profitable franchisee in China. So moving on, how are we're looking at the trends that we are observing and that are reshaping the convenience business. There are 3 that I want to highlight. Number one, if you look at urban areas like Hong Kong as well as Singapore, there's a lot of population living in concentrated area, and that drives the need for convenience. Imagine yourself working in marina area, and it's always hard to find your morning breakfast. It's hard to find your coffee. During lunch time, it becomes worse when you're not able to get into a quick-serve restaurant. And that's why when you look at big cities across the world, including Singapore as well as Singapore and Hong Kong, that drives the need for convenience. Mature market like Singapore, like Hong Kong, there are 2 convenience stores serving 10,000 population. In growth markets like Mainland China, that number is significantly lower, and hence, we see a big upside when we focus our efforts on growth markets. Secondly, when you look at the economic climate, customers are prioritizing value, but they are not willing to trade off on quality nor service. We, as a convenience retailer, we need to do multiple things all at the same time. The third trend that we see, we cannot just rely on offline to serve our customers. The channels are getting very blurry. We believe we need to serve customers across multiple channels so that we are able to build a strong relationship with our customers so that they visit us more often and hence spending more money. And these trends are giving us great confidence and encouragement. Our teams have been working on the business model as well as the format propositions for over 4 decades. And the testimony stands, we are the #1 player in all markets that we operate in. If we want to continue this growth and really accelerate, we need to double down on our assortment and specifically on ready-to-eat because that drives traffic, drives frequency and it also drives loyalty to the brand. The market -- addressable market for ready-to-eat will continue to grow with 4%, and we will grow faster than the market with 7% to 8%. It's not just around sales growth, but it's around winning market share. Secondly, we're able to lean into categories that are more accretive to the overall business model. Ready-to-eat, as an example, are posting margins 4x higher than a traditional category like cigarettes. And how we're able to unlock further growth is to double down on key shopping occasions. As said, breakfast is very important. Lunchtime occasion is very important, especially with customers who are living in urban areas. So when we dial down on our strategy and how we're executing against it, there are a few pillars that I want to address. Let's start with retail excellence and how we're driving how we're driving sales per square feet growth, how we're driving profit growth in our specific convenience format. Let's start with assortment. So we have been looking into our assortment, not recently, but we do it in a very robust way. All our categories will go through a category review cycle minimally once a year, on average, 2 times a year. But we are able to accelerate that cycle with data, with technology, and we're able to speed things up so that we're able to address our customers' needs. And at the same time, we're looking at margin productivity for every category in that review cycle. And hence, we're able to grow gross margins faster than the top line. It's very easy said, but let me also tell you the how. There are a few things that we are using to drive our category performance. First of all, RTE as said, we're tapping into more shopping occasions by means of dialing down our assortment and our new product launches in breakfast as well as in lunch. Secondly, it's not just the RTE that we're focusing on because customers who are coming in for a breakfast item, they also want to buy coffee. They also want to buy snack. And it's really the shift towards healthier options in drinks and snacks where we're able to build that holistic basket. And thirdly, we cannot compete just on price. We need to be different. And hence, we have been driving a lot of innovation in a lot of categories. So you're able to visit our booth. We are able to show you some products doing the coffee break. But also in the stores, we're able to show you innovation so that every shopping trip becomes exciting and customers are able to put one more item in their basket. We, as DFI, we have been recognized by 7-Eleven International for product innovation. And that is really a testimonial to what the teams have been doing across all the markets that we are operating. And we're using this process as a way to offset the decline in low-margin categories like cigarettes, which is subject to tax increases by the government. But more importantly, the customers are getting more health conscious. And it will not help when we are not dialing up on other categories. So moving into innovation. There are a few things that are on our mind, but let me play a video first. Yes, we want to be convenient. We want to offer value. We want to offer quality, but the assortment that we're driving needs to have its own personality. And hence, we are Japan inspired. Secondly, our customers are requesting us to offer them healthier options, more affordable products, and that's what we've been doing. And when we create newness in our categories, we need to put out new assortment, innovative assortment on the pedestal in the modern store experience. And that is exactly the journey that we are on. Let me also share with you some fun facts. Only 1/3 of our customers, 35% to be precise, are putting a ready-to-eat product in their basket. And we believe we're able to bring that percent up to 50%. By means of doing it, we were able to deliver a CAGR for RTE between 7% to 8% Store execution. Let me share with you 2 examples on how we are bringing this execution to life in the store. This is Hong Kong. This is a store in Causeway Bay, which is 2 blocks away from Times Square, 1 block away from Sogou department store. This store has been trading there for over 20 years. It is on Lockhart Road. So if you look at the catchment, it has evolved over the last couple of years. It used to be very close to Wan Chai, where people are spending their past midnight entertainment on that particular road. There are a few module pilers down the road a few years back. But this catchment has evolved. There are more -- much more trendier F&B options. There are more offices popping up in that catchment. And hence, when we look at the challenge the store was facing, the store was a bit outdated. The assortment was a bit outdated. We're focusing a lot on cigarettes. We're focusing a lot on beer. And hence, the team has taken this as a challenge and really did a big revamp on the store. The RTE did not stand out because it was on the wrong side of the store. What the team did flip the store around, putting RTE on the right side so that when the customers are going to the offices, they're able to see it during the morning. Secondly, we've looked at space productivity and assortment productivity by using our customer insights, we're using our data. We're using our tech in order to give us the right answers. And at the same time, we've been focusing a lot on digital elements and creating that omnichannel experience with our customers. The results are very good for a 20-year-old stores. We were expecting low single-digit growth, but we are able to post a 29% sales growth for a very old store. RTE penetration went up with 420 basis points. And more importantly, store profitability has grown with 170 basis points. It's not just the efforts that the teams have been put in, but it's really that journey of listening to the customers and really reacting upon what they need and bring it to life in our assortment in our stores. So in Hong Kong, we have a pipeline of 70 top stores where we go through this journey. And in the next 3 years' time, we'll take all those stores to a full refit program. The second example that I want to share is in China. As you know, China is a very competitive market. Global brands have been failing in China. We, as DFI, we will not fail our customers. We have been the #1 international convenience player in the market that we operate in. And we know the competition is coming from e-commerce, from F&B operators and on top our convenience peers. But we are not sitting still. We need to continuously evolve and challenge our model and really offer something that the customers want. So 4 quarters ago, the team started with a very small trial, 10 stores where they're able to put in a foot bar. We used to -- we are selling core RTE products like sandwiches on the gi, pack meals, yogurts. But the team came up with the idea and saying, this is Asia. Our customers need to have a hot breakfast. They need to have a hot lunch. And hence, we have been expanding our range and really brought hot RTE to the customers. We're able to sell noodles. We're able to sell oden. We're able to sell curry rice in the store. By end of this year, 20% of our store fleet will have a foot bar. And within 3 years' time, we will be having 1,250 foot bars, which translate into 50% of our store fleet will be operating our foot bar. If you look at a store with the foot bar versus one without the foot bar, we are able to stand out from the crowd. The competition is fighting on price, but we are fighting on meeting the customers' need by means of being different. RTE penetration is 200 basis points up versus an average store. Digital penetration is 600 basis points up and profitability is 120 basis points up. And hence, we've been accelerating this growth. Shifting gears into opening new stores and accessing more customers so that we're able to use the 7-Eleven brand to touch more customers. So we operate the province of Guangdong. Guangdong is the largest province when it comes to population. We have been operating in this province for over 30 years. We have the right to win. have the right brands, we have the right products and we have quality that our customers trust. Our franchise proposition, it is working not just against our peers in the industry who operate also convenience brands, but also coffee brands as well as tea shops. We've optimized our CapEx investments, and it has a very strong competitive edge versus other franchise brands. And we're able to bring a payback between 12 to 18 months to our franchisee partners. As an end result, we are the leading international CVS player in Guangdong by far. If you look at this province, Shenzhen is a city closest to Hong Kong. We operate close by end of this year, over 1,900 stores. There are 21 cities within the province and 2/3 of our stores are concentrated in 2 cities, Guangzhou as well as Shenzhen. We have deployed a very focused approach to go from first-tier cities where we want to penetrate deeply and create density of stores so that we're able to leverage the management cost, supply chain costs and create economies of scale so that we're able to reinvest in value. And then we're focusing on second -- high second-tier cities like Foshan,Zongshan, Zhuhai as well as Dongguan. And then we're moving into other second-tier cities as well as third-tier cities. 21 cities -- we only have a presence in 13 cities. There's massive upside if we continue to focus on a big market like Guangdong. So by 2028, we will be operating 2,400 stores, and we're projecting a sales CAGR of 8% to 10% and our profit margin will increase with 70 to 80 basis points, driven by operational efficiency, scale and as well as leveraging of our overall cost base due to increase of store numbers. So let me talk to you about omnichannel as well as data ecosystem. As said earlier, customers who are omnichannel are more loyal to the brand, and they are able to spend more money with us. We have multiple channels to address their need. Except for offline stores, we're focusing on the e-commerce ecosystem. Third-party platforms we have a massive MAU as well as DAU. We're partnering with them strategically so that we're able to acquire new users. And we bring them into our own web as well as app means of offering a proposition that they cannot get via the third-party platform, subscription vouchers, preorder, click and collect. And at the same time, if you look at the downtime that -- how do they spend their downtime, is screwing on social media, social media, and we're able to leverage this channel to build a stronger loyalty with our customers. And hence, we're able to foresee our sales penetration for e-commerce channels will grow from 3% to 7% to 10%, obviously, with China leading the pack. Additionally, we will leveraging retail media to create deeper engagement with our customers. We're able to share with them the latest product launch, what's new, what's on promotion, doing the whole shopper journey at the front of the store, when they shop within the category and even when they're checking out. We have a -- we started a few pilots with Swire, which is the bottler for Coca-Cola, and we're seeing great results. And we want to deploy this collaboration with more suppliers because it is working for us as a retailer, it's working for the supplier and more importantly, is working for the customer. And hence, we are on track to add 1% of incremental value to our overall top line. And my colleague, Wee Lee, will share more about in the next -- later today. So our financials. Yes, we are the #1 in Hong Kong, Macau, Singapore as well, we are the #1 in international -- as an international convenience player in South China. We are ambitious, and we will continue to grow our sales between 6% to 8% CAGR in the next few years. It is a combination of new stores, but more importantly, is around same-store growth, driven by acceleration of ready-to-eat as well as driving our omnichannel growth. Our operating margin, we're aiming at -- between 5% to 6% because we're shifting away from low-margin categories into high-margin categories. And those categories are exactly the ones that our customers want because we've been listening to them. And we're able to create new revenue streams by means of focusing on retail media. And at the same time, once we grow our top line, we're able to leveraging our scale and bring down the cost of doing business by means of keeping our operational costs very lean. Our ROCE, we're aiming between 25% to 27% because we have multiple models to grow our top line, not just corporate-owned stores, but more importantly, CapEx-light expansion through franchising. And we're able to leverage the scale and hence, confidence in delivering these numbers. So wrapping things up, we're aiming at 6% to 8% top line CAGR by means of continuously refining our assortment, driving innovation as well as driving omnichannel. Our total store network will exceed the 4,000 mark by 2028. Online penetration will reach between 7% to 10%, and our margin will expand to 5% to 6%, driven by a favorable sales mix, enhanced operational efficiency as well as scale benefits. So thank you very much, and this is how we drive our strategy and execution in 7-Eleven. Let me hand over to Curtis.

Thank you, Yoep, and good morning, everyone. It's my pleasure to share the DFI Food strategy and our key direction and the plan that how we will deliver in coming few years, even in a more tougher challenging markets. I think for the DFI, health and beauty, we have a 2 banner name. convenience store, banner name, IKEA, one banner name. Are you talking about food, different country, we have a different banner. So up to today, we are operating in 3 markets. Significantly, Hong Kong is still the most important market for us. In Hong Kong, we are a solid #1 supermarket channel. We operate the everyday value supermarket channel called Welcome. We also serve the premium customer with 3 banner names the Marketplace, 360 and Oliver's. And in Macau, we are top 2 retailers over there with 21 stores, the banner name called [indiscernible]. In Cambodia, we are the only nationwide modern chain, operate 15 of the total countries, 25 provinces in the country. And up to end of the Q3, we have 85 stores and forecast end of this year, close to 100 stores. Then we're talking about some of the market trends. We'll start from the Hong Kong. I think here, we would like to share 3 major market trends. The first one is that we see local customer outbound travel still continues. Year-to-date with a double-digit continued growth, even already with a high base in 2024. Second, more China e-commerce player competition coming through, as you understand, JD, Pinduoduo, Alibaba and the quick commerce with Meituan, when they are coming, they called Qita.y are coming very aggressively. And the third trend, actually, if you see from the PPT, you can see before COVID until now in past 5 years, actually, Hong Kong is falling into a deflationary cycle. Customers tend to buy something lower price. despite it looks like less of bad news, but in reality, we have performed very, very solid. We are very promising to be in the Hong Kong market. We have continued gaining market share in past 5 years. And even we are in a solid like a supermarket, we are more than 50% of market share. But we don't see it that way because we see all the addressable market, actually, our market share is below 20%. So have a huge room for us to capture. So that's why we are very confident we want to continue to go through the journey. So let me share what will be our strategic pillar, start with strengthen our price competitiveness. Let me share where we are today. Actually, based on the customer survey, we do that at a monthly basis. Our low price perception is #1. And not only #1, we are actually 6x better than our the next competitor. We are doing the -- even we have this one, we are very price competitive in Hong Kong. But we think the bigger -- to conquer the Chinese China competition start from end of the last year, we start to take the core basket item to compete with China. So we start to do the GBA price checking. From end of last year, we are more than double-digit more expensive, but we are making progress. Until the end of the September, our price index is already close to 105. And I can tell you actually the latest number, we are at 103. That's where we are on the journey to continue to make sure our item are competitive. There's no reason for local customer shop in the GBA. And once we're doing this, what is the result? Very significantly, year-to-date, our unit sales actually grew by 3%. So that customer actually prefer knows we're putting effort and they are staying with us. Let's turn to Cambodia. I think Cambodia for us, actually, we -- as I mentioned, we already opened the store outside of the Nongpan. Actually, in the capital city of the Nan, there's more than 12 retail chain, including retail and convenience store. They are all stay there. Why? Because that's a high population, relatively high income, but they don't have the supply chain capability to get outside of the nonpan. But we are the only one actually able to expand because we have a global leverage supply with a great item and also we have a supply chain capability. In that, we are open to expand another 50 stores -- and once we open the store in the outside of the non call provinces, they are really much faster ROI. And you can expect that in coming 3 years, our EBIT will be triple. So that's how -- let me further talking about how can we further drive our low price perception. As you understand, in Hong Kong, if you ever been there, I think that's a highly promotional market. All the promotions are 1 day, 3 day or 7 days. But we want to go to the journey, really go to the everyday low price. We start one program called Everyday Value and can only saying, that means the deal is for real. What does that mean? We choose a Phase 1 150 items across all the major category. We dropped the price average about 40%. We locked the price for 2 months. When we first doing this for -- in the market, actually, it's not -- it's very incredible because no one is able to do this. The initial results are encouraging. The sales growth very significantly came from more customer buying and the sales quantity growing. Our dry grocery, the sales growth more than 100%. And how about the margin? Actually, we are not doing this for loss-making. We do this one even more of profit making. Why? Because we are changing our buying model, go directly sourcing and also using the AI help on the negotiation with the supplier. So with this one, we expect it to open up to 600 items, basically cover all the core category and subcategory in coming 6 months. Own brand, as we mentioned, always important for us. We plan now overall own brand penetration about 10%. We expect it to grow to 15% own brand not only for selling in our 3 markets. I think own brand for us called metals. please go have a try. We will say it's a brand of Asia because today, we have more than 20% of our sales is outside of our dairy farm business. We sell into the different market, a lot of retailers actually ordering metals from us. So we will see this one is a really unique best quality, good value offer. So please have a try. If we mention about everyday value, 600 item in the future plus own brand, these are truly the everyday value they can save customer basket. We expected the customer basket penetration with these 2 initiatives can hit 80%. That means the customer they can enjoy everyday value, 80% of their items put into the basket, they enjoy the really value. How can we do this? Definitely, the most important is through our global sourcing capability. We will go upstreaming not only for own brand, for fresh, we go directly to the farm. Also, we are partnered with a strategic supplier and strategic platform. For example, maybe you heard about one news, we are partnered with one of the Chinese e-commerce platform called DDL. We partner with them and our overall cost saving is significant, 20% to 30% cheaper. So with that, we are able to fund our price investment, but overall, our margin even continue growing. So let's go to another pillar is about store fleet upgrade. As you understand, the best way and the lowest cost to drive the top line actually through like-for-like growth. So we want to put into our store into the remodel. We plan to do 5% to 10% of the store in coming 3 years with the remodel plan. We want to put more localized assortment tailored to the local customer. So customers shop better. Of course, upgrade the overall shopping environment. We expect that -- we call this one called Project: Every Store After Remodel, we expect it to grow 10% on top line and also better return on the bottom line. Of course, and also most important, all the store after remodel, we want to equip them with a digital capability, which is Car and collect. We will also continue to open the store even in Hong Kong, already very crowded, but we find the room to open smaller store, which they have the best sales per square feet, low investment, quick ROI. And most important, they have an important role to become a and collect hub. Then they will play a very important role for our future omni strategy. In Cambodia, as I mentioned, we will open a small express format, quick payback. In supermarket, the payback can be less than 1 year. It's quite incredible, right? And we were able to doing that with our global supply chain capability in coming up to 2028, we will open up to 140 stores above. The third pillar is omnichannel. I think omnichannel online Click & Collect actually is a fast-growing engine for us. Today, we are about 4% of the online penetration. We forecast to grow to 7% to 9%. And the growing engine mostly came from quick commerce. We believe there will be 3x of the quick commerce sales growth and also store Click and Collect, particularly in Hong Kong, everything is so expensive. We can use in our store network. We believe that Click & Collect can grow by 20x. We invested in the in-store pickup capability. So we are able to use in store as a service hub. So we are able to deliver to our customers from before 3 days to same day or next day. So it's happening for end of this year. From next year, we will see customers will enjoy the wider assortment, faster delivery. And most important of all, once we're using the store fulfillment model, actually on P&L-wise, it's much, much more profitable in Hong Kong. The last pillar, actually, cost is very important. Overall, with what I just mentioned, our margin will be continue growing up due to our upstreaming sourcing. Our costs will continue down because we invest on AI and automation. The cost for us, mostly we focus on 3 parts. One is the in-store labor cost. The second one will be DC cost and the third one, definitely the head office overhead. Once we invest all this initiate put into the pipeline, we will find we operate will be much, much efficient. And we have a new profit engine for us, which is retail media and data monetization. Just for everybody to know, actually, for food, we have the biggest customer data. We also have the most comprehensive transaction data. We were able to -- using them not able to drive the top line with gaining more share of wallet because we know them better. And with all this data, we are able to generate another retail media from our core supplier. Particularly in Hong Kong, we are such in a dominant position. We believe this will be a very, very important profit generation generator for the food business, particularly in Hong Kong. And overall, I think our margin will be going -- continue even going up. And don't forget, we have a very aggressive price investment target. We dropped our price 5% to 10% lower. In that situation, we are still able to be -- continue to improve our bottom line. This is our financial ambition. In the market we operate, except for Cambodia, most of them, actually, market are down, but we still believe we can drive the top line 1% to 3%. On the operation margin, compared to last year, it's 1.7%, but we do have ambition we can up to 2.5% to 4% through the sourcing cost control and also the new profit engine from retail media and data monetization. On the ROCE-wise, I think this number will be quite nice. We will more than double in the food environment, we can be hit 12% to 14%. Welcome Hong Kong originally already a good -- very, very good standard with the size of the itself and with the ROCE. But even in Cambodia, it's just starting, but we see the ROCE in up to 2028 can be hit 15% to 17%. Actually, it's a world-class on the top-tier market. We are very -- seeing this be a TSR accretive market for us. So for me, very quick sum this up. To drive the fresh and value, this is very important. Start from Hong Kong. We will continue to drive our GVA price to maybe HKD 103. And with all the initiatives we put 2/3 of them into the price, 1/3 into the profit. And with that leverage, we are able to help the Macau on their buying costs reduced by 10% to 15%. Today, Macau, 30% of the product already leveraged the Hong Kong cost. We will continue doing that. In coming 2 years, 50% will be leveraged. They can get a lot of benefit. And with Hong Kong's cost, we are able to leverage to Cambodia, the item they are imported from Hong Kong can get 20% to 30% cheaper. That's where the power of the food. Even we have 3 markets, but we will leverage as much as possible. store remodel and repositioning our upscale. I think at that one, 5% to 10% of our store we touch every year. Once we touch, we expect a 10% like-for-like sales growth. And number three, omnichannel will be continue our growing engine, particularly in Hong Kong. We were hitting to 7% to 9% of the sales penetration. Retail media and data monetization, definitely for the food business, we will leverage it and become our major profit growing engine. Last but not least, everyday cost is very important, and we are not using a traditional way. We'll definitely invest on AI and automation, particularly helping our store operation. We can help them to do their job easier. And also for us that everyone we can recruit the people willing to working in the retail environment. Those are the quick sharing with you. Looking forward, hoping you enjoy it, and we do have the confidence on all the plan we built up. And actually, at the past 1 year, we already see some very positive signs. And we think in coming 3 years, the result will be great and follow our plan. Thank you so much. Hope you enjoy this morning.

Thank you, Curtis. We will now take a 20-minute break. Our format experiences are now reopened. So please go and take a look at the innovation transformation that has been happening across our business format. Also please help yourself to some light refreshments, especially curated by our 7-Eleven Singapore team available just outside the forum, and of course, our own brand products available at the booth. Vegetarian options are also available for those with dietary restrictions. Please reach out to our working team Katie there if you would like. We'll reconvene here in 20 minutes at 10:50. Meanwhile, please enjoy a break, and I'll see you shortly. [Break]

Welcome back, everyone, and our online participants. We do hope you had a good break at to enjoy some of our products and also tried some of our assessment here, tools at the booth. Now we'll continue with. The next section of our program. May I invite Mr. Martin Lindstrom Chief Executive Officer of DFI IKEA to the stage.

Hope you had a good break. I'm really happy to be here with you today to share on how we at IKEA driving growth by doing 2 simple things, focusing on value and accessibility. And I will tell you what they've been doing, what we are up to and why it matters for customers who wants to have great home furnishing to the right price. So who are we? Well, we are operating a platform of IKEA stores across 4 markets, with Taiwan, Hong Kong, Macau and Indonesia. We operate in now some 26 locations, and that is a mix between full-scale standard IKEA stores as well as some smaller shops. In '24, we had a turnover of just over USD 700 million and an operating profit of USD 16 million. We have the #1 player on 3 out of our 4 markets with Taiwan, Hong Kong and Macau. And Taiwan is 50% of our turnover. You was mentioned on 7-Eleven being a franchise business. And IKEA is also operating under a franchise model. And from that perspective, DFI is one of just a handful of companies having the right to operate IKEA concept across -- in the world here. And in that, DFI is actually one of the longest serving franchisees. In Hong Kong, we have been operating since 50 years in Taiwan just over 30 years in Indonesia in 11 years. And that heritage brings us a really deep market knowledge and understanding, strong local teams and a mature operating rhythm. Let me share a few key opportunities that I see with the IKEA business. I mentioned 3, and I'll start off with Taiwan. Taiwan, as I mentioned, is 50% of our turnover. Taiwan actually is seen as one of the strongest IKEA markets globally. And we are seeing a resilient consumer demand and home furnishing category that is growing. The key to unlock now is on accessibility, turning this from a destination brand into an everyday brand easy to use. The second opportunity is omnichannel. And that is how do we unlock the headroom across all our markets. So today, online penetration is we have 13% in Taiwan, 21% in Hong Kong and 18% in Indonesia. But as you can see from the slide, we're actually under-indexed both in Taiwan and in Indonesia. And we see room that we could scale further in Hong Kong. So we see this as a meaningful opportunity to drive growth looking into 2028 with our economic model that is profitable today. And thirdly, it's about affordability and how we win price credibility here and now. And IKEA is trusted for our design and for our quality but when it comes to affordability, we are trailing, particularly so in Hong Kong and Indonesia to narrow that perception gap is, again, a truly meaningful opportunity to win more of the market, and I'll come back on that. So I will go through levers that we will work on to drive growth up to 2028. And it's about having strategic price investment where it will matter the most. It's about bringing relevance and more reasons to visit us. It will be about how do we reinvest where the returns are the best. How do we win an omnichannel and unlocking that headroom underpinned by a cost transformation that is funding price and protecting margins. So you can see it's actually a flywheel. It is how do we lower the cost so that we can have better prices, getting more traffic, better productivity and a higher return. But let me start from one of our strengths. And the IKEA brand and the IP brand equity is definitely one of our strengths. The we are one of the -- we are the category-defining brand within the region where customers are appreciating us and trusting us for the design for our quality and for our unique store experiences that customers are loving us for many years in these decades. I mentioned on both in Taiwan and Hong Kong, we can lead from a leadership position. In Indonesia, we have seen as an aspirational brand that is growing. So with that as a base, we have 2 drivers. In Taiwan, it is about accessibility to make IKEA more convenient to get closer to the customers with our stores. as well as to have an online offer that is really on becoming an everyday choice. In Hong Kong and Indonesia, it is about affordability, and that is to make the value the price signals where customers are comparing us the most. So how do we do that then in terms of changing the price perception? Well, we do 2 things. First of all, we offer more entry price products in every category, making value front and center for a range. So that IKEA customers really see IKEA as the affordable choice. Secondly, we will do targeted price investment, I would even call it a surgical price moves on those high-volume, high wares SKUs where customers are comparing us the most. And we have 2 rules to keep us disciplined. First of all, it has to be seen. We only invest in those prices where -- which is highly visible customers are actually noticing it. And secondly, it has to be paid for. And we are paying it from structural cost improvements to protect the price architecture and to protect the quality. We're not talking about blanket discounting. Across our portfolio, we are pivoting to everyday value. Scott was mentioning about Everyday Value and IKEA is really about creating an everyday value. That is true across our markets. the application of that is a little bit different between different markets. And I use 2 examples here. In Indonesia, what illustration is describing on the screen is that we have had too much of a price in the premium category. And we have acted on that. We have removed some 700 products from that premium category and instead build up our entry price category and boosting that with 17 percentage points. And these are really volume articles that drives traffic and baskets quickly. In Hong Kong, we are responding or reacting to the new competitor reality that we are facing over the last 2 years, where we are then calibrating the price gap with the Chinese mainland competitors. That has been at around 20 to 25 percentage points. We want to narrow that to 5 to 10 percentage points. We have all acted on the top 100 SKUs, where we have invested some 20 up to 25% on average. And we are seeing a great response on that. I should clarify, we're not talking about price war here. And we are talking about face value, which is including price for the delivery and assembly, which actually is one of our core competitive strength in Hong Kong and the customers are appreciating. So if we then have what we are selling at what price clear, what are then the more reasons to visit IKEA and how do we being relevant. And one of the clear areas to bring relevance into food. Food build habits and food matters here in Asia and food map is for IKEA. Actually, 14% of our sales is coming from food. This is 1 of the highest in the IKEA world, actually, and it brings conversion the customers are telling us that they come to IKEA because of food. And of those -- of that category, 70% of them are coming out of the IKEA store with a home furnishing product. So put it simply, food is our most profitable marketing tool. It pays its own ways. It builds frequency, and let's add to the basket. So with our Swedish unique menus, our local is managed that build relevance and more than 100 launches across our markets every year, really build that neighborhood relevance and strengthen the brand recognition. So a simple meal at IKEA turn into a home furnishing purchase. I would point out that this is actually one of our stronger competitive advantage as well. Outside of IKEA, there is no other home furnishing retailer that is having this as part of their proposition in the portfolio. So I talked about the relevance within food. But of course, it needs to be relevant in our product range for home furnishing as well. And we are addressing that -- and one way of addressing that is that we are cutting the tail to become more relevant. And we are doing that with 2 reasons in the mine, both have put value front and center and more visible. And secondly, to calibrate that range to be more fitting to the consumer needs here and now. and to fit relevance. Practically, that means that we are removing some 2,000 products from our product range. On average per market, we are dropping our SKUs with some 20 percentage points. concentrating the range like this will bring up the productivity and the sales per product some 30%, which adds on to availability as well as freeze up capital. On product relevance then, we are fine-tuning the range, and that is to also to address on the needs here and now and addressing to what people are looking for right now. There are some examples on the screen there, but just example in Hong Kong, for example. We are removing some of the more bulkier sofas that has challenged to fit into the Hong Kong apartments and having more of slim-fit and things that are fitting in. In Indonesia, I just mentioned about those premium prime range. prime range that customers are not really looking for right now. We're replacing it with more relevant range or humidity challenged product that doesn't work out and replacing that with more relevant products. So if you then have the demand engine, right, and we have the price rights, where do we then invest and where do we get the best return. And we think that one of the best returns we can get is in Taiwan. I mentioned it's 50% of our sales. We have a long track record in Taiwan since 30 years. Our sales CAGR over the last 5 years is 6%. We have an operating margin of 10%. Our online CAGR over the last 6 years is more than 30%. We have a strong platform of stores that are doing an excellent job, and I loved by the customers. What we're addressing now is the access GAAP. And we will do that by scale with small-scale profitable openings into those white spaces, what customers are telling us that it's too far to an IKEA store to become more convenient. At the same time, we are densifying our e-commerce offer so that we can be relevant on a daily basis through our whole Taiwan. We think that this is a meaningful opportunity to build for growth for 2028 in what is one of IKEA's strongest markets in the world. Moving into omni channel where customers are shopping today. And we strongly believe in online sales and omnichannel sales for IKEA. We will do it idea, which is profitable and with the scale growth. I talked about before about the share or the per market performance of online. We are aiming to scale by 2028, we hope to have around 18% to 20% of the IKEA business coming from online. And we will achieve it by having each channel assigned a different role. Our own channels with our web and app, we will use for loyalty. We will use for service that we use for the end-to-end IKEA experience. At the same time, we will carefully pilot curated on the third-party marketplaces to reach those demand pools that we are not capturing today. And here, Indonesia plays an important role. Indonesia is piloting third-party marketplaces not only for our group but actually on behalf of whole IKEA, Indonesia is one of only 2 markets in the IKEA wall that has the approval to operate on third-party marketplace. We have been on [ Tocopedia ] for the last few years, and we have recently, over the last few months, also opened up on Shopee. And we have turned it into a learning loop on what range and assortment to use how do we protect the brand and the unit economics, what is the service proposition. And our experience has been really promising, and we are really encouraged on what we are seeing. And as you can see from the expectation looking into 2028, we see that third-party marketplaces will play a significant role in driving growth also for Indonesia. And also here, Indonesia plays an important role for our other businesses, how this can inform us to scale up quicker once IKEA will give a general approval to work on third-party marketplace. So moving into the final lever, which is a lean and agile operating model. All of what I've described is funded. It's not wishful. And we are looking for -- we are looking at the cost transformation program that is in progress and delivering value month by month. It's either delivered or in motion. What is delivered is already on labor optimization where we see significant savings coming through already this year. What is also to a big degree delivered is on rental negotiations, particularly on Hong Kong. We're also in Taiwan testing with some of our biggest stores where they have some additional extra space, which we have rented out to third-party supermarkets and giving us a good return and experience. What is in motion is on the regional supply optimization. I mentioned about making the more efficient range and the cutting of the tail, but also the infrastructure optimization, where one example is on how we in Hong Kong benefit from the more open borders by moving some of our fulfillment activities into Mainland China. What is clear is that labor optimization, rental overheads will all decline as a percentage of sales in 2026 and further in 2028. And that will fuel our price signal and also protecting our margin. And this is really how we are able to pay for the customer promise. So our outlook into 2028. I would say it's measured and realistic. We're looking at the sales CAGR of 1% to 3% versus our 2024 base. an operating margin between 4% to 6% versus 2.3% in 2024 and arose between 5% to 7% versus 2% in 2024. That will come from mix and productivity. As you can see, it's not coming really from heroic top line expectations. It is about what I described here on growth coming from our online scaling up, our more efficient range, cost savings that is translating into PBIT savings and a better use of capital. What you should expect from IKEA over these years is that the profit growth should outpace the revenue growth. So bringing it all together, I would say we are seeing a like-for-like improving trend because I would say we are doing the simple things well. We are getting the price right and the products that fit people's home. We are growing in those areas, we are confident we will win in food, which is our most profitable marketing tool, and in our profitable online business, which we see headroom that we can scale across all our markets. We will expand in Taiwan, where the returns are the best, and we see that we can close an access gap in what is one of IKEA's strongest market. And we are funding it through a cost optimization that is either delivered or in motion. So our hope is that we shall be easier to reach and clearly was the price done in a way that compounds returns. So thank you very much. And over to Wee Lee.

Thank you, Martin, and good morning, everyone. It's a privilege to be here to share with you after having my name called out 8 times and having omnichannel online digital retail media mentioned around 48 times. So I'll spend the next 20 minutes with all of you to perhaps take you through why we are doing this, what we are doing and perhaps give you a glimpse of how we're going to do it. The DFI digital ecosystem has 4 parts. Let me try to explain them to you. Number one, e-commerce, digital commerce, digital channel. Number two, loyalty and membership. Number three, retail media or perhaps in your industry or what is more commonly known as advertising. Number four, retail insights, or what in the industry, perhaps people call it data monetization, insights monetization or even data packages, right? So all of these are somewhat synonyms. So first, let me start to explain about why you and membership. In Scott's presentation, if you pay attention, it was 5 million-plus members. But here, I want to expand to you that actually, we have 33 million members across all of our loyalty programs across the entire group. You Hong Kong has about 5 million plus, but we also have better specific loyalty programs, 7-Eleven Guangdong, with Guardian, Malaysia as well as Vietnam and also IKEA family in Taiwan and Indonesia. And also actually, we have Lucky Cambodia as well. All of these is 33 million. I'm very pleased that this 33 million members have accepted our membership proposition and have signed up and enjoyed it for value, convenience and access. Number two, on e-commerce, I want to give you a bit of the story as you read -- as you heard Scott talk about the digital reset. Before 2024, actually there was an ambition to build a super app in Hong Kong. And that was when we concentrated a lot of resources. But quite quickly, we identified 2 issues. That model was not customer-centric. And number two, it was not economically sustainable. And if you heard Scott mention, we need to meet our customers where they want to be. And if they want to meet us on shopping, we will meet them or shop it. So over the last 2 years, we've gone from 60 customer shopping touch points to 80, right? We built up a lot of our own assets our own apps, our own webs, mini programs and also launch many of our stores on [ Kita ], Food Panda, Lazada, Shopee, many of these other third-party platforms. And why this is important because that has allowed us to scale our business profitably, right? So in 2025, up to September, we have doubled our orders. We've grown 100% year-on-year while at the same time, improving positive unit economics. And more importantly, even in 2024 itself, we turned the whole e-commerce business around and delivered positive unit economics. And that's an important milestone as we think about sustainable and profitable growth. Thirdly, retail media. We launched the business as a pilot in 2024. We had some early traction, and we scaled out in 2025. And as you can see, we have 6x more campaigns this year. many of the brands, 80% of them are repeat customers. And they've enjoyed our solution, they have good ROAs and that gives us confidence to continue to invest as we are now rolling out the solution beyond just the online assets, parts across the stores. And last but not least, the entire digital ecosystem is driving sustainable growth. We've delivered 30% year-on-year revenue growth up to September this year. Next, let me explain a bit about the digital ecosystem. Digital interactions with our members, our customers starts with 2 aspects. One, you're either our loyalty member, where then we have a good understanding of who you are or two, you digitally transact with us. These are 2 core important ingredients for us as we think about the whole digital and data ecosystem. And then with this, we are able to build out extension. Just to give you a bit of a sense of what yuu is. yuu in Hong Kong as well as in Singapore is a coalition loyalty program. What that means is that he has partners both from DFI as well as outside of DFI. If you see this number, USD 9 billion worth of transactions annually, that's far bigger than our entire Hong Kong subsidiary business. of DFI. So that gives us tremendous insights into the retail and shopping behavior of customers to allow us in many instances as our -- as my former CEOs have described, more increased share of wallet because we have a better penetration. And what's more important is that every quarter, our loyalty members shop in more than one of our partners. So they don't join us because they only like 1 brand, but actually, they like the co-coalition concept, and they enjoy shopping across the different partners. And with knowing our customer better, we have 2 opportunities. We give them better offers. And then we actually also use it for our operations. We drive better sales, not just online but actually also in stock. And we are just beginning to drive this capability. And as you think about all the digital assets that we have, we have a much improved quantity as well as quality of engagement and transaction data. And all of that builds into insights for us to do a better business for our brands to have better promotions as well as the overall opportunities for us to monetize as retail media or insights. And overall, we would expect the digital ecosystem to be profitable by 2026 and will be more accretive than the offline business by 2027. E-commerce. Over the last 2 years, we've improved our e-commerce penetration. In 2023, it was less than 3%. And by 2024, is around 5%. And we want to reemphasize that half the business or e-commerce is done on our own sites and the other half on third-party platform. And that gives us a good balance to acquire customers as well as then to serve them on our own platforms. And that has also been shared by some of my colleagues in their earlier explanation as well. We are hedging against the increasing cost of doing business on third-party platform. And that is also why we need to have this balanced strategy. And all being equal, I want to iterate, and also that's what many of the format CEOs, including Martin in his articulation has talked about all being equal, we bias better experience, assortment, pricing and services on our own sites because that's where we can deliver the best experience as well as longer-term monetization opportunity for DFI. In health and beauty, Andrew spent a lot of time talking about tools and all this. And I wanted to emphasize our e-commerce online strategy is actually underpinned by the format-specific strategy. So it's differentiated by what the formats are doing, right? So when he talked about wellness, we are doing the tools, as I've also tested, they say pigmentary concerns. So they recommend me sunscreens to avoid more sun damage to my skin. And that is actually what we're trying to do with the diagnostic tools, we collect more data, we can then provide better offers and personalize them to our customers. And in 7-Eleven, you've heard you repeatedly talk about ready-to-eat. And the digital strategy is an extension of that strategy. So we provide click-and-collect services, you can pick up in store, as well as we focus on quick commerce platforms because it is coherent and consistent with the whole value proposition of convenience and speed. And in the last 12 months, they have launched their own app for 7-lever Hong Kong and Singapore. And with that, they've delivered more than 200% order growth year-on-year. Food. Curtis has been relentless about value and focus. The value focus extends online as well. We will provide the value assortment as our core hero product or perhaps at the last mile of your journey as a final add-on item. And together with that, we've grown tremendously on whole delivery in 24 as well as 25. But going forward, we'll double-click on click and collect in-store experience because no 1 is more than a few hundred meters away from the next welcome stock, and that will be a significant growth driver. And last but not least, with IKEA, Martin talked about marketplaces, and we continue to focus on leveraging them because we know they can help us access customers in the regions that we don't have a store today. And across all the businesses, we continue to uplift experiences, example, search. Why? Because we want customers to like what they find and they can find what they like. So these are all very core, and we build that upon the customer data that we have. And I want to give you one data point, why we are relentless in going after the omni shopper. The omni shopper spends 70% more with us annually. 15% from bigger basket and 50% from higher visit frequency. And that is why the omni strategy is driving our customers to be not mono channel and driving into omnichannel. Today is the largest program in Hong Kong by far. But we continue to drive members active rate and usage of the program. Today, the program accesses more than 2,500 stores and restaurants in Hong Kong, and we have more than 40 digital touch points, both ourselves and with our partners within the program. But as we go forth, we need to be relevant to our customers and continue to grow the new partners, so that we can be overall relevant to the whole retail share of wallet. And what that means as in Curt's presentation, he showed a bit of this outbound shopping into Shenzhen, Greater Bay area. So we need to go where our customers are. So we're going to expand the program into Greater Bay area to allow our customers who shop sometimes in Shenzhen to also be able to enjoy the program. And likewise, we're also seeing the trend of many new Hong Kong is, and it's better that we interact and touch them even before they come, or perhaps even the occasional new occasional Chinese mainland tourists, we want them to have an ability to use the program even back in Guangdong province. So that is where we are positioning ourselves for the incline porous GBA borders. And I also wanted to talk about paid loyalty. As you think about how do we continue to grow frequency as well as a basket. When you referenced the top loyalty grams, some of the paid loyalty programs in the world, either Amazon Prime, Alibabas, ADV IP or perhaps even closer to whole Walmart, Walmart Plus. All of them consistently have delivered higher frequency and higher basket annual spend of the paid members relative to nonpaid members. And that's also part of our segmentation. So we'll continue to define new benefits new propositions for our customers on value, convenience and access in order to serve them better, and that's what we need to do to continue to upgrade ourselves. And within this group, I also want to mention the top 25% of yuu customers, they account for more than 40% of the DFI Hong Kong retail sales. And the other group that we need to continue to serve and also to increase their omnichannel penetration that they can continue to deliver the value that I just described earlier. And with this, we continue to have then a differentiated retail media proposition. Why? There could be Chinese brands who want to test in Hong Kong. We could have Hong Kong brands who want to go into Greater Bay area. And all of them can then access our retail media solution across the entire GBA because we know the customers. As we have all of these data, we have 2 opportunities. One, as with more engagement and transaction data, we can personalize office, and that has allowed us cumulatively to improve our customer share of wallet, and we'll continue to do so. And secondly, we can do better business. And that's where you see increased sales per square foot and all that. What it means for the category team. As what Andrew shared earlier, they use the data in order to decide what assortment I need to put. And for you, he will say, well, rather than put 2 phasing or do 1 phasing because it doesn't need so much space. And then for Curtis, you will say, "I don't need so much promotion. I can cut back on promotion. I do value as a strategy. So I think that helps inform us as well as our brand suppliers to do better business. And all of that cumulatively allows us to improve revenue as well as profit margins. Data insights, what are we offering? And how does it? So first, as a vendor scorecard, I think it's always important for us as a brand for our brands and suppliers who work with us to have a healthy view of how their business is doing. They know how the sales is, they know how operationally are there items in stock, not in stock. That is then the honest view of how their business is. But at the same time, we'll give them a benchmarking, how they're doing against their category peers a bit to create that competition. At the same time, we will have a mixed solution. If you want to be able to see not just top line sales, you are curious to know your sales broken down by store, by off-line, online panels sales by different splits across different touch points, we can provide that in product performance. And at the same time, how they are doing on supply chain and many other facets will all be part of product performance. And this solution will be addressable to the entire base of suppliers and brands that we work with. Thirdly, there will be some brands who may have a bit more sophistication and have a bit more resources to do analysis themselves. And then they will ask for shopper insights. If you recall, I mentioned about the 33 million of customers. So we're relevant and where applicable, we will ingest that into this data platform. And what brands need to know, they can actually identify which segments like their product and which segments don't. And with that, they can also choose them later on. potential intervention to retail media to assess these customers. And last but not least, we are able to build new solutions like customer surveys. Brands are always interested, how much brand uplift I have or how much brand we call I have, and that's something that we can offer them as well as even new products. As they launch a new product in a store, they will be able to do a survey of customers through our digital touch points, whether a loyalty or e-commerce app. Retail Media, I just want to explain to everyone why we have a chance to win in this business. Number one, we have traffic, right. We have significant off-line and online traffic and that is the starting point of all retail media or advertising eyeballs. Number two, we have member loyalty. As I mentioned, we have 33 million member base, and that gives us insights and so this audience is what differentiates the quality of a retail media solution. And last but not least, we have surfaces, digital asset screens and apps. And this will allow us to have -- to build a differentiated and unique proposition. Why is this different? Because we'll be the only retailer or only network that will be Pan-Asia, and you can actually serve different proposition based on that. Let me explain to you the 3 use cases. So for example, one, you can be a local SME. You've launched a product, you decided to do a single market advertising in Malaysia. That's one. Number two, you can be a global or regional brand and then decide, I want to run a multi-country brand campaign and you can access our network with that. And thirdly, we'll also be purging in to open retail media network, where then we can have non-suppliers whom we call non-endemic. They will then be able to access and advertise with us as well. And across this network, we'll be having a tremendous amount of assets with more than 8,000 screens in our home market in Hong Kong and at least 1,000 each in our Southeast Asian markets. Next, I wanted to share with you about DFIQ vendor portal, which Scott mentioned earlier. Maybe I will show you a video on our launch. [Presentation]

So in building this DFIQ vendor portal, we've been inspired by Amazon, with Vendor Central or even just format with their Supplier One, which they launched just about 2 years ago. So we're going to provide this an integrated experience for suppliers to be able to do day-to-day trade activities, get performance of their business insights and have a choice to intervene, right, to amplify their business through promotions or retail media. Now to the flywheel, the economic flywheel. So there are 3 parts to this. Number one, e-commerce, as I mentioned, we have already planned this business positive unit economics in 2024. It will continue to become increasingly profitable. However, it will not be as profitable as the off-line business. But with Part 2, we will then have retail media and insights, which will both be highly accretive, and they will be able to deliver growth that would enable the entire digital ecosystem to be more accretive than the off-line business by 2027. So as a key takeaway, I have 4 points to leave with you. Number one, we are building a highly accretive digital ecosystem through the disciplined use of CapEx and other resources. Number two, we have a positive unit economics in e-commerce, and we'll further build out our loyalty network. Number three, our retail media is unique, differentiated proposition for advertisers. And last but not least, we offer simplicity for our suppliers to use, to understand and to buy solutions. Thank you very much.

Good morning. Good to see you all here. I think the last few years, we have simplified our portfolio. We reset our strategy, and we strengthened our balance sheet. As Scott shared, the TSR this year, year-to-date well over 80%. And even excluding our special dividend, it's more than 60%. And if you go back to 2024, January 24, now is 40% TSR. So very strong numbers where we return to the shareholders. So you've heard our former leaders and rely on our key priorities, very solid strategies anchored in data and forward-looking statements. I'm going to all bring it together now in how that all rolls up in our financials, both in growth in margins and very importantly, in returns. Let me start to go a bit back on our financial progress the past few years. Starting with the operating margin on the left side. We've done a strong executional strategy we improved market share gains and result in profit growth, supported by underlying reductions in cost. And you can see our operating margin move from 2.3% back in 2022 all the way up to 4% in the first half of this year. As you will see later, that's going to improve even further in the years to come. We saw a like-for-like sales recovery starting in the second quarter of this year after 4 quarters of consecutive decline. And also in the third quarter, we see very strong results on like-for-like, and we expect that to continue going forward. And as a result of this, you see our underlying pattern, our outlook for this. Our guidance is now between $250 million to $270 million, which is a 30% increase on the midpoint. And even if you exclude divestments, the wider divestments, Robinson divestments and the related lower interest cost, we are still up 11% year-on-year. It's all driven by the underlying business and their performance. Moving on to the right side to the balance sheet. We have simplified our portfolio. We've sold [ Yonghui ], minority share. We've sold Robinson Retail, again, a minority share. And now we move focused operating business. So no longer a portfolio but really operating business. As a result, we have strengthened our balance sheet. Yonghui divestments and Robert investment together were $900 million of proceeds. So where we had a net debt of almost $20 million back in 2023, in first half of this year -- sorry, September this year, we had $648 million. That was before we paid out our special dividend, which was up in October. As shared by Scott, by the end of the year, we will still be net cash positive. Then our special dividend, which we paid out in mid of October, with the special dividend and the interim dividend resulted in a net dividend yield of 16% for 2025. So strong numbers also on the underlying dividend, driven mainly this time by the special dividend going forward. Then going to the next few years, I'll sum all up our portfolio or property -- sorry, [indiscernible] have shared. The first key lever for us is growth. Our top line growth, if we add it all up for the next few years is between 2% to 3%. We focus on market share gain like-for-like sales growth, both stores and online and selective store growth in health and beauty and in our convenience formats. And over the past 12 to 18 months, our strategy demonstrated that we are gaining market share, even in markets where we have very strong leading positions. That's Hong Kong. Hong Kong, we are a strong player and even in Hong Kong, we've gained market share in all our formats. If I then touch on each key formats, starting with Health & Beauty. Health duty Customers are spending more and more wellness. That wellness trend, which Andrew shared, we are capturing. So this market, the health and beauty market, the wellness market is growing, and we are well positioned to capture that. In addition, there's a growing middle class in Indonesia and Vietnam. We've got a strong position in Indonesia, and we are growing in Vietnam. The growing middle class means more spend on health and beauty and therefore, also gives us confident on our top line growth for Health and Beauty. Convenience, this 6% to 8% is excluding cigarettes. Our focus is the non-cigaret sales. That's what drives fault. And there's a rising demand for quick prepared hot meals and 7-Eleven is turning into a food destination. In the past, we were more our cigarettes, more and more people go to us for a quick food for a snack, for a meal, breakfast, lunch and in dinner. That's a transformation of 7-Eleven as you've shared, and that drives partly the growth of 7-Eleven. The other driver of 7-Eleven is store growth. And again, store growth here is in South China. As we're going to go from 18 19, to 2,800 stores, in the next few years, which also drives the non-like-for-like sales growth for 7-Eleven. Food. Here you see a bit lower growth. But bear in mind, there's a deflationary cycle happened in Hong Kong, our largest market for food, which drives -- which keeps pressure on the total growth of the market as well as a mature markets as Hong Kong population not growing. Despite that, we see and in the past 12, 18 months, we are gaining market share, not only from the supermarket operators, but also from wet markets -- so the way we look at market is not a like-for-like condition, we say, what's the total share of stomach or share of wallet we are competing against. And there, we are gaining share in the last 12 to 18 months, and we will continue to do so in the next few years. Home Furnishing, 2% to 4% growth. Taiwan is very resilient. And you see Martin shared that, but we're also capturing the growing middle class in Indonesia. There you see income is rising as the growth of the middle class and also increased urbanization. And that drives the underlying growth for IKEA, Indonesia and that on a total level as well. And last, as you can see on this slide here, we are growing faster in higher-margin businesses. So health and beauty and convenience are becoming a bigger part of our business compared to what they are today. And this is because these markets are growing faster and also we are gaining market shares in these markets, and all that is driven by market share gains. The second key lever for us is margin growth. I think this is also very important for the future. So if you look at -- I'll come to the total later, but let's go former by format. For health and beauty, the current margins is 8.3%. We aspire 9% to 11% by 2028, again, driven by wellness as well as retail media. Moving on to convenience, 4.3% to 5.6%, Ibis a shift of low-margin cigarettes to a much higher margin and higher quality of RTE sales rate to sales, which drives the underlying margin for convenience. Food to 2.54%, so a significant increase in the food, which is I think it's almost comparable to best-in-class. Here, although Curtis shared we're going to lower our prices but we're lowering our prices by improving our sourcing. We no longer buy from distributors. We go straight to the stores for fresh products, but also non-fresh products. The lower costs are partly past all of our customers, and that drives volume and drive sales, but it also helps us improve our margins. And that's a key driver for us to improve the total margin for the food business. And IKEA, as Martin shared, is a lot of cost organization. Here, we see the rental for IKEA and mainly in Hong Kong and Macau coming down significantly, but also other costs throughout the IKEA business and supply chain are coming down. Partly, we reinvest in price, which is very important for our customers, but also partly driving down -- driving the bottom line improvements. And I want to be very clear, we -- margin growth can never come at the expense of quality of service or value. Those are the key drivers for every good retail business. So the focus is on strategy, on quality, on service and our value. Then on the last one is cost. Scott mentioned it, cost is very important for retail. It's a very, very large cost base. It's poor rental earlier, but also overhead costs. So overhead costs in the next few years or so the SG&A cost as we report back in 2024, 1.5%. And we've got programs in place to drive that down to 1.1%. We've started the program this year, and we're well on the way to deliver this. So I'm very confident that we get to the number by 2028 and hopefully, even earlier. And that reduction of about $30 million to $35 million improvement on the bottom line. Let me move on to the key building blocks, how we get from the profits in 2024 to our indication and ambition in 2028. And the ambition is between 310 to 350 million on profit come from 201. That's 11% to 15% CAGR over the next few years. And that excludes divestment by the way, so it's a like-for-like comparison on the key building blocks, starting on the left side, the first 2 key building blocks have been delivered. So they're not hope that are done. The first one is our portfolio optimization. We've sold Yonghui, which was a loss-making business. We sold Robinson, which is profitable. And as a result, we also lowered our debt. So the first 2 building blocks are a result of our portfolio simplification and lowering our total financing costs. The next few years focus as shared by the business leaders is on growing our still density and on e-commerce. The sales entity, the focus here is like-for-like growth as well as growing stores for health and beauty and convenience. And margin expansion in all our formats as we're lowering our cost and growing faster also in higher-margin businesses. The last big is e-commerce. So whilst e-commerce is less profitable than the store business, that's more than offset by the growth in retail media as well as data monetization. And on retail media, we are just starting. If you look in Europe or North America, where retail media is a big part already of the inco of large retailers. We are just starting the journey. And we at DFI, given our network in all our countries, our off-line presence, our online presence, we are confident that will drive a significant part of our profits going forward. The third lever is our return on capital. Back in 2022, we delivered 1.7% ROCE, which is low, say, very low. And we improved that by end of this year to be 9% to 9.5%. How we simplified our portfolio, the Yonghui, Robinsons, we are very disciplined on CapEx. We improved our working capital. And importantly, we improved the underlying margins of all our formats. Our ROCE target for 2028 is 15%. And the key drivers is improving our margins by improving our like-for-like sales and operational efficiency capital-light store growth, and we are growing faster in our higher ROCE businesses being Health & Beauty and 7-Eleven, which improves the mix overall which helped us deliver a 15% target by 2028.. Just one note on CapEx, and I'm sure we are disciplined. So if we are looking at CapEx, we don't open stores for opening stores sake. That has been very, very disciplined. So every store opening for every store innovation, there was a clear focus on for ROI, for ROCE. If it doesn't meet a target, we will not do it. And even after 1 month, 2 months or 1 year of opening, we'll look back, did we meet the targets or not? If not, why not, how can we improve? So a very disciplined focus on return on capital employed, also on CapEx, which drives part of the ROCE base. Then on CapEx, so it's our outlook on CapEx on the left side. We will continue to spend between 2% to 2.5% of sales on CapEx. I try to break it down in the key components on the left side. A few notes on stores, on health and beauty on new stores, I mean, on health and beauty, we're growing mainly in Indonesia, but up to 750 stores by 2028, although a lot of that is franchise. New store growth in convenience, that's mainly South China, up to 2,400 stores by 2028. Food store growth that is in Cambodia. And home furnishing, we are aiming to open 1 more store in Taiwan, where there's still room for us to grow in the market. The second block is store remodel. On story model here, health and beauty, we are reaffirming all our stores to better cater for wellness, making sure we have space for the health advisers. On convenience, an example is here the 1,250 so-called food bars in South China as well as refitting over 1,000 stores across the network, and that drives also sales. And food, as mentioned by Curtis, it's a standard remodeling cycle, although focus here will be to make the stores ready for click & collect, we can drive the online sales in the food business. So you can see there's more spend on new stores and more spend on store remodeling and that also drives underlying sales. On IT and automation, although it's smaller than maybe 2024 but in '24, we had a large tech debt and a lot of old systems, old infrastructure, which we slowly replaced in the last few years. Going forward, therefore, we will spend less on IT and CapEx because the tech debt is dealt with. However, there's more spend in there on and on automation. So it's a bit -- it's lower than spend, but the spend will return more on investments. And the last is sustainability and supply chain. Then on the right side, how are we going to use all the cash we generate. The CapEx is about 35% of our total cash generation. The other 35% is going to spend on dividends. And the last 1 is 30% on strategic value accretive. These are accretive, TSR. And I want to be clear, if we cannot find or we not find the right value-accretive M&As, we will return the cash to the shareholders, either via special dividends or other ways. But we're not going to spend it because it's there. We want to make sure it is helping to grow our TSR and helps the company to grow going forward. The last one is the flywheel here, but as you can see here, a very balanced approach on organic growth. So the focus is on organic growth and the focus there is on ROCE and TSR as our former leads have shared in the last -- this morning. A healthy balance sheet. So we target a leverage ratio of 25%. However, if we need to flex this for strategic value-accretive M&A, we will do so, but it will be temporary. On M&A, it's got to be accretive in the medium term to our TSR and target here is a shared 15%. And the last one is growing dividend. And it is new. So so far, we gave you a guidance of 60%, we are going to move to dividend payout policy. But from a 60% guidance to a 70% policy, and we will start as a financial year 2025. So the first final dividend payout, which happens in May next year, is going to be based on 70% payout ratio and no longer guidance. So that's a change in the guidance we've given so far. Then to sum it all up, a summary of the key initiatives. So as you can see, growth to 3% organic growth delivered by the key formats. Again, here, you see very strong growth of Health on beauty as well as convenience. The underlying pattern growth between 310 to 350 by 2028, which is a CAGR of 11% to 15%. So our underlying profit is growing faster than our top line growth, driven by mix but also initiatives for us to grow margin and to lower cost across the business. CapEx and 2% to 2.5% of our revenue in line with the so far to make sure -- but in CapEx, the focus is on store growth and store model, which helps us to generate top line growth as well as profitability. The payout, the ordinary payout from a 60% guidance to a 70% payout policy, starting 2025, and the first payment we May 2026. ROCE we came from a very low base back in '23, end of this year, 9% to 9.5%, and we are confident that by 2028, our return on capital employed will be around 15%. And free cash flow will be in line with our profit growth. We'll try to do better working capital, but I'm confident that free cash flow will align with profit growth. And as shared earlier, on our free cash flow. We will spend on strategic M&A. Again, if we cannot find good targets, we will return the cash to the shareholders as we've done so this year with our special dividend. That sums it up. I look forward later on to the Q&A session, where we might go in a bit more detail, but this is my sharing. Thank you.

So while the chairs are being set up, maybe I'll just give you some closing thoughts. So this leadership team has worked very hard over the last 2 years. to reset DFI. And we're a very different business. I understand if you've been a long-term shareholder, you might be a bit skeptical based on a few of the analyst reports, I think some of the skeptics may be in the room. And that's fine. That's fair enough. But we built this plan on 3 principles. So principal #1 constructive dissatisfaction. In retail, I'm a huge believer that you celebrate for 20 seconds and then for 20 minutes, you work on how you can do better. And to me, that's really critical, given the complexity of all the businesses and markets, formats that we operate. And I think we do constructive criticism well. The second under promise, over deliver. There's opportunity for us to do a bit better in this plan. This is not an aspirational plan. Our ambition, we're comfortable we can deliver. And then the third is aligned rewards. 2024, we completely reset our executive compensation. So for the top 80 executives of DFI of our nearly 70,000 team members somewhere between 15% to 40% as you go higher up in the organization of compensation, 15% to 40% of compensation is based upon delivering to shareholders. 50% in terms of the relative TSR, we worked very hard to benchmark ourselves against what we believe to be per companies. And then the second upon return on capital employed. So as we again, go through those 3 principles, we are laser-focused on ensuring that we live up to that strategy. So customer first, absolutely focused on the customer. people led, we have to be supportive in retail in terms of our team member, but that's shareholder-driven. We're pretty comfortable that what we've put together is deliverable. We've got the right people. We've got the right, I believe, culture in the organization to be the best-in-class retailer in Asia. Clear leader in Hong Kong, which we shared to you in detail, we're expanding rapidly in growth markets and what we believe to be a capital-efficient way and focused relentlessly upon operator as retail excellence. Clear business strategy that's aligned to what we call the sustainable growth loop, driving retail growth and margin expansion. And we shared with you many of the initiatives underway in terms of how we're going to deliver on that margin expansion. The store network will grow. It will grow across all 4, but primarily in health and beauty and CVS, which have significantly higher ROCE. Targeting a revenue growth CAGR of 2% to 3% as an ambition, not an aspiration with an underlying PATAM of $3.10 to $3.50 a share by Tom. Upside from digital monetization. This is something where it's underdeveloped in Asia. It's becoming quite mature. You'll see in North America, growing as well in Europe. We think there's great opportunity in terms of the margin to allow you to be able to drive market expansion through your share by being able to invest in price while also increasing your overall profitability margin. We will continue to focus on that fair share, making sure that our e-commerce penetration is equal to the market so that we don't lose customers. We meet the customer where they want to be met. Capital 0structure, again, ready to support that growth. So simplified portfolio as we've delivered here disciplined capital allocation as we've reviewed strategic M&A, where it's TSR-accretive. We're very, very focused upon, as Tom said, that if we're not able to find a good target, we'll give it back to shareholders. And then finally, we're comfortable that our balance sheet can support a 70% dividend payout policy. So quite an action-packed content packed morning. Look forward to being able to hear some of your questions. The management committee will be ready to answer those, and I believe I'm handing it over to Karen now. Thank you.

Thank you, Scott. We'll now start our Q&A session. They invite our empty members to the stage. Martin, Curtis, Crystal, Andrew, Ela, Scott, Tom, Erica, Wee Lee and John. In the meantime, let me go through some housekeeping. We'll start by taking questions from the room followed by online. Please keep to a maximum of 2 questions so that we can try to get to as many attendees as possible. For those in the room, if you have a question, please raise and we'll get you a microphone. Please kindly state your name and company before asking the questions. for online participants, you can take your question in its new chat, and we'll direct them to your speakers. Again, please state your name and organization before asking the question. All right. I saw a couple of hands already. Let's open up the floor.

This is Jayden from Macquarie. First of all, thank you so much for hosting today and sharing very detailed plans for the next 3 years. So it's very interesting. My first question is about Maxim's. We haven't heard it mentioned at all today. So I just want to understand how it fits into the strategy, how they will contribute to the profit aspiration? Where is the opportunity to work better with that business in other parts of the group? And my second was just on the digital strategy. In terms of the ownership of data, you've got obviously quite a few partners with you. How does that sort of work between the various partnerships? And how can you leverage that even better? And to what extent do your partners have claim on that data as well? And could they potentially leverage it for their benefit?

Why don't I take the first question, and I'll pass it to Eli on the second. So the last 2 years has been a little bit busy. And we have not focused upon the food restaurant synergy that I believe exists. We've reviewed operating units today and we still refer to [indiscernible] as an associate. I think there is upside opportunity over the next couple of years to drive Maxim's seems to be more of an operating unit. We own 50% and we have substantial say in how that business is run. We have never really looked at how you drive synergy and sourcing, procurement, the background in terms of landlords, let alone some of the growth initiatives across some of Southeast Asia. So I still think that there is upside in the portfolio from doing a much better job of driving a synergistic value between the 2. On to digital, Wee Lee?

Yes. So thanks for the question. I think first on the yuu. Let me first just reiterate that it is a coalition loyalty program, which fundamentally means both the program and all the partners need to be happy, right? They need to be sustainable and they need to appreciate how the program works. And to do that, actually, to your question in a more direct way, the yuu program owns and have access to all of the data that transacts the USD 9 billion that we talked about. But we do need to provide support and insights to all the partners of the program so that they can benefit in a meaningful way to engage and use the data for their own targeting and all that and including actually being able to access customers on the yuu-enabled channels. So I think it is healthy balance. But at the same time, that's what we need to also safeguard the customer privacy and data at the same time.

Next question?

It's [indiscernible] from [ Maxter ] Investment Managers. Just 1 question. You've talked a lot about simplification of the portfolio so far. I just wondered to what extent that is complete or whether you would consider further simplification and if so, on what basis?

So I think in terms of divestments, for the most part we're done, I think there may be maybe a 1 banner in a market that's not strategic, we may think about. But for the most part, I think we're in good shape to build from here.

Thank you so much, everybody, for today. I have 3 questions, if I may. The first one is actually regarding the franchise model. We've heard it so much today. But maybe if you could just get a little bit more color on how this works in terms of the revenue and your cost recognition and sharing with sharing between yourself and your franchise partners, how does that model work? And if there's any difference in how this model is between Health and Beauty and Indonesia versus 7-Eleven in China? Just some color on that. And my second one is about 7-Eleven, a little more specifically where you've mentioned that, I think on one of the slides, RTE would be 28% of your revenue share target for 2028. So just wondering if your food bars in China is also included in this RTE. If not because you have a significant amount, 50% coming from your non-SEC category, which is subject to competition from a lot of online players. So just wondering your strategy on how to prevent for margin erosion on the non RTE non-SIG part of your business? And third would be on the shareholder returns. So it was mentioned the 30% where if you don't identify opportunities, you would return it back to shareholders. Just wondering what kind of time line you give yourselves to decide between, okay, when do we stop pursuing an opportunity? And when do we give it back to shareholders?

Three questions. Got it. So first, maybe Andrew can talk about what we learned from 7-Eleven, which is one of the great values of the portfolio around franchising. Then we'll turn it over to you [ Hope ] to talk around the RTE question. And then maybe, Tom, you can talk about the approach in terms of our time line for dividend.

Sure, Scott. Thank you, and thanks for the question. As Scott mentioned, we actually took a lot of learning from Yoep from our 7-Eleven business, which has been a master in running franchise. One of the very early guardrail we set for ourselves, it has to be a win-win opportunity for us and our franchisee partners. Secondly, we're also in the market to compete of our potential franchisees investment versus the other operators, albeit might not be in health and beauty sector within the market. So even though this is early stage or we are starting this journey, we've actually got the assessment all done that we are confident of offering a better solution for prospective franchisees to be able to deliver the value for them as much as it is for us.

Yes. So the 7-11 is a beautiful business. but it's really around like making the flywheel stronger and stronger. And it really starts with the 7-Eleven as brand and is being brought to life by assortment as well as experience and the experience could happen either in the store or it could happen on the digital channel. In terms of the assortment, RTE plays a very important role. The numbers that we've called 28%. China specifically, it's over scoring or the fact that it is a competitive market, there's a lower cigarette penetration and also our franchisees, partners are buying into the differentiated assortment so that they're able -- they have the ability to compete. So we believe in this model, and we continue to push this one forward. And food bar is a critical element to bring the RTE strategy to life in China.

Just to supplement question on revenue recognition for franchise. We recognize all the revenue of the franchise. And the way it works, we share our margins. There's a margin sharing agreement between us and the franchisee. On the question on dividends, on the return to shareholders. So the first step for us is to increase to 70%. So starting what I shared earlier, our dividend policy will be 70%. That's a first increase to shareholders. I don't expect any other special dividends in the next 24 months. as we are looking for acquisitions. If we can't find them, and there are no value-accretive acquisitions, maybe after that, we'll have a look again and see what's the right timing to return the cash back to the shareholders.

Next question. [ Jamie ]?

It's Jamie Cho from M&G Investments. A couple of questions for you guys here. Given -- I don't know how much you guys have been following the retail landscape change in China disease, especially with like the pond online model. as well as the discount snacks and beverage retailers. It seems to me that there's a lot of channel disintermediation happening, especially from the procurement side. I think this could be applicable to a lot of your business from convenience stores to fresh grocery and potentially to health and beauty as well. What's the lesson that you guys can draw from what's happening in Mainland China? That's my question number one. Secondly, you mentioned value-accretive acquisitions in numerous times. Can you directionally share with the group here, broadly speaking, what are the gaps and molds that you're trying to fill here with potentially an acquisition?

So Yoep, why don't you talk about our learnings in terms of some of the other competitors, and then Ella will talk about the M&A strategy.

Yes. So a lot of our management committee members have a lot of experience in China. So we know China very well. If you look at the China retail market and it doesn't matter in which form, it could be supermarkets, hypermarkets, convenience stores, snacks, even into the cloud model, it is very competitive. And not -- some companies are able to get to scale without being profitable because they drive a different strategy. We, at 7-Eleven as a brand. First of all, we are the largest franchisee of the 7-Eleven brand in China, and we are the most profitable. To answer your question, there are many things that we're able to learn, but we cannot just copy what they've been doing because it might bring us down the path of getting to scale without being profitable. So if you look at what we are doing in China for the 7-Eleven brand, we try to get to scale by means of serving customers better. And hence, we have been listening to them and addressing the right shopping occasions. And we believe we're able to get to margin expansion by means of being differentiated -- we're different in our fresh assortment, especially around RTE, which other channels do not operate. For the non-RCE non-cigarette element, we are working towards own brand program, private brand. And at the same time, we're working on exclusive launches so that, again, we're able to be differentiated. So we want to do 2 things at the same time, getting to scale and at the same time being profitable whilst we're growing.

Thanks, Yoep. So I think this morning, you've heard about DFI's journey. And we're now a strong multi-format omnichannel retail platform. We're focused on serving our customers everyday moments. And so we believe we have the right mix of businesses to capitalize on our leading positions across Asia. You've heard a lot of our strategies from across our formats. We are focused on reinvesting and strengthening our value proposition, our customers' omnichannel experiences. And alongside our focus on organic growth, our portfolio decisions will be laser-focused on delivering against 2 key financial metrics. The return on capital employed and the TSR along with the strategic fit to our overall business. So given the lessons that we've learned from our past acquisitions, I think to sum it up, we would only be looking at opportunities that support the growth that you've heard our leaders talk about as well as investments where we have operating control. where we have a majority stake, investments where there is clear strategic fit and synergies as well as investments that accelerate our businesses in Asia and deliver against our return on capital employed and TSR within a reasonable time frame. Thanks so much for the question.

Let's take a moment and move to online. Two questions from Brian Cho of Citi Group. First, on Health and Beauty, how do you compete with online platforms that are known for offering competitive pricing for health and wellness products? And the second question is for CVS, location is of vital importance. In China, how do you compete with other brands in securing good location? We have a 12 to 18 month payback and how does that compare to our peers? And what is our franchisee store margin versus peers?

Andrew then Yoep.

Thank you very much. I think like what we shared in our session, we are an omnichannel player. So yes, there are online competition coming in. But as we mentioned from our presentation as well, it is by focusing on wellness. It is about the expert advice that our team members are also able to provide with them. And actually, that's also one element, which is exclusive branding partnership with suppliers, which with our scale in Asia, we are actually very confident of continuing that sort of exclusive partnership with our key partners, including also bringing local suppliers to a wider portfolio of our stores as well. And at the same time, when we continuously improve our digital capability, we're very confident that we'll continue to drive the growth and hit our target.

So I think it was Brian who asked a question, right? So I think Brian and Jamie asked a similar question around competition in China. And yes, China is very competitive. We're competing on proposition. We're competing for the best talent. And we're also competing for the best locations. The good thing around 7-Eleven brand in China, we are an omnichannel player. So for the offline part, we are not being disrupted for off-line property locations. But for the offline locations, we are moving our margins up by means of focusing on the differentiated assortment so that we're able to afford better locations, better locations than our competitors. When it comes to return on investment versus our peers, we are better than our peers. So we're able to provide our franchisees between 12 to 18 months return on their investments. And by means of growing scale, we are able to drive economies of scale and bring the overall CapEx down and hence, we have been improving our return on investment for our franchisees.

And when we say competitor, we just don't mean convenience stores. We look at coffee shops, lots and lots of opportunities for somebody who has property and wants into that business for a franchise. So we've been very, very aggressive about making sure that we are competitive against all of them. And I know we've got a lot of questions, but I think as I look over the next 3 years, there are some important areas that are critical enablers for us moving forward. So maybe Crystal, you can talk a little bit about where we are in the AI journey and then Joy, what that means in terms of how we develop our people to be able to be prepared for this world in which we're operating.

Thanks, Scott. So AI has been mentioned quite a few times through the presentation. So as we are reducing our debt, we are now investing in more modern technology. So the principle that we apply to that is really customer first and second is where do we get the best return on investment. So based on that, we have set some very clear focused priority to help our merchants to be using AI to help them plan the assortment, plan pricing, promotion and replenishment as well. So with our scale, and we believe there is a lot of opportunity there to improve our sales and our margin as well by providing our customers the right choice. The second focus area is AI for customers. So you have heard personalization a few times. So this is really leveraging our data to increase loyalty and increase basket size and also increased visit frequency as well. So all this is going to drive the top line for DFI. Last but not least, we are also investing AI to improve team member efficiency. But overall, where we see the biggest return on investment is where we'll be investing on the core of retail. A lot of our business case at the moment is less than 2 years payback and some are really just less than 1 year payback. So we have got a huge ambition to bring AI into DFI to make sure we have a more modern ways of working.

Okay. Great. So I'm going to share with you the people strategy, how we're going to embrace AI adoption. So firstly, as a company, we are aimed to build DFI into best-in-class retailer in high-growth Asian markets. In order to do that, we believe it's very important to upscale our organization with the latest knowledge around AI, data, digital, technology to really bring our omnichannel strategy to life. And secondly, it's also about we shape the future of work and the future job design so that the AI will become a tool to help our team members to do their job better, easier and faster. So it's very important to bring the future work and reimagine that what that really means in our commercial teams, operation teams and our supporting functions. So all bring this together, I think it's all important to anchor our all the people strategies in people led, meaning that how we support our frontline team members and leave a servant leadership culture in DFI.

Any questions from the floor? If not, I'll continue on online, another investor. What are the biggest challenges preventing you from reaching your 2028 targets?

Tom?

I think we -- it's always macro, right? So macro always plays a big role. So if macro is against us, we'll challenge. So I think macro will be the key underlying risk, I would say, going forward. So far, I mean, we spoke about Hong Kong, but the macro actions is also in our favor. If you look at the number of tourists going to Hong Kong, from Mainland China, which drives our health and beauty and CVS misses. So I also spoke about the outflow in Curt's presentation, don't forget the inflow as well, which is a macro trend. And the same you see a tourist arrivals across Asia. So marco is working well. I think you never know what happens, right? So we know back in 2019. There's always risks on the horizon. And that's, I think, one key one. Secondly, I think -- I mean, it's all about execution. It all sounds very simple today but it's very hard work every single day, and a lot can go wrong. We've got a strong team, strong focus, but we still got to deliver the plans going forward.

So of the 4 formats, I think home furnishing, IKEA has probably been the one that has been the most disrupted both in terms of consumer spending and as well competitive. So Martin, maybe you think -- talk a little bit about how you're seeing the next 3 years.

Yes. Thank you, Scott. What we are seeing now post cover really from an IKEA business point of view, we see a change in consumer behavior and need for acting on our markets. And what I explained in my presentation is our pivoting to value. And I think the ton points as well, this is about staying firm. To manage the next few years, it's to stay firm on our plans. It is to keep on delivering everyday value and having our ears to the ground and listen and really understand what the customers are leading and providing what the customer wants, and to be that super laser customer focused and delivering and continue on delivering on value. I think that will be the absolutely key and keeping our cost so low that we can have the room to invest in prices.

And I would point out, IKEA is probably the most strict franchise anyone can have in the world. So having a Swedish person running the business helps. He's brought a lot of influence to help our franchise understand we have to compete differently in Asia. We have to have a different assortment, a different proposition that builds upon the integrity, the positioning, the aspiration of what that means, but execute a little bit locally. So it's been a bit of a challenge the last 2.5, 3 years. It's not been entirely within a decision-making, but we've made a lot of good progress.

Jayden?

Can I ask a couple of follow-up questions? The first is about the profit target, I think, 11% to 15% CAGR. Just want to check, that's before any M&A -- and if we could have a sense of if there was any M&A, how much higher could that be? How much additional leverage can we get out of the business? And the second question is just about I guess, collaborating across the different business lines. It does feel like there's sort of 4 separate businesses. But what about selling of each other's products in different formats, like if the food is very popular at ICE, why not sell it in 7-Eleven, for example, or if the smoothies do really well in 7-Eleven, why not sell them in the supermarket format, for example, is there much thought going into that.

So Tom, maybe you cover the first. And then, Curtis, you talk a little bit about how much we've been leveraging Meadows across the format as an example.

That's correct. It's all organic business growth. There is no M&A in these numbers. What can M&A bring? It depends on the target and depends on the size of the targets and depends on the level of accretive ROCE and CSR. Again, it's got to be accretive to our overall numbers. It can dilute. So we'll see what these opportunities bring us the next few years.

Yes. I think for the leverage, on brand will be one of the best examples. Our own brand for food is not the name of the welcome brand. We enter Meadows. So now Meadows, not only within the DFI. So even here, we sell Meadows, several that we sell Meadows, mainly we see our Meadows and Indonesia, IKEA, and we are thinking about outside of the DFI for the EDR, the other country, maybe they also buy the Meadows. And for the supermarket, actually, thanks for the Andrew -- we also sell some of the mandates and audience household products. So we were finding the opportunity to leverage all of them together with the point on, particularly on the own brand. Secondly, I think in the future, we have a more cooperating aprotinity because now with data transparency, all the famous brands, actually, they sell across all 3 banners -- we can grow the data how we can see and also through the retail media, we will see how can we further leverage. We're using our leverage power and we can get more returns from all our suppliers.

Thank you. Any more questions? Jeff?

Jeffrey from CLSA. So I just wanted to check on the DFIQ. So we know it's quite early stage, but I just want to here, any colors on the take-up so far and also maybe the road map or our target for the next few years regarding the rollout?

So Wee Lee, do you think we're moving fast enough?

Can always be faster. So thank you for the question. I think, one, we've just soft launched. Actually, we've offered this solution to a very curated and very important group of suppliers who will help us to co-develop. And actually, that is the spirit of how we want to do our new business in collaboration with partners and 4 partners, right? So they will help us to shape what is to come, and they will give us good feedback as to how to construct the product. So that's the first. I think secondly, as with all products, it's roast built in a day. We are actually going to launch it in a multiphase. But actually, amongst the sequencing, I had trade, retail media and insights, I'm prioritizing the revenue generating ones first, media as well as insights where then you can do -- go towards self-serve, a bit like what you could do on Meta as well as Google. And those are the solutions we want to roll out first. So all being equal, I think we're prioritizing where there's value creation. And at the same time, to uplift the service, that will be along the way as we roll as a multiphase rollout for our partners as well. So I think it's a very intentional approach, which will scale accordingly.

I'm sure there's more questions, but again, another important point that I want to make and maybe I'll ask Erica to support. The politicization of what's been traditionally called ESG has happening globally. But I'm absolutely convinced over the next 5 to 10 years with weather events, et cetera, this will become another huge topic. And it can be, I think, dilutive if you're not well prepared, et cetera. So maybe, Erica, you talk a little bit about some of the global benchmarking and activities that we're doing to ensure that we can be on top of this in Asia.

Sure, Scott. SP1 So we have been on track on our reduction plan for Scope 1 and 2, and which is a 50 reductions by the end of 2030. So in terms of Scope 3, this is really important for our role to play to be the voice of Asia and working along with the other suppliers and also being part of the Consumer Goods Forum along with the other suppliers and also retailers and also being part of the food coalitions with the World Economic Forum. It is important for us to collaborate with the other suppliers and think of low cost options to make reduction. So maybe as an example, you can see in the booth that we are part of a pilot on the Rice project and to produce low carbon emissions rights for own brand. And that is also being sold on our supermarket and also IKEA across. And then from this project, we actually make -- we are selling this low-carbon rise and giving options to our customer at no increase of retail price. But at the same time, for our sales, it has been up by 25% because I think we are giving an options to our customers. And it is important for us to collaborate with other suppliers and to drive that demand signal to drive more influence and also working along, not just with our own pain suppliers, but also our national brand to make a difference in Asia.

Any more questions from the floor? If you have any follow -- sorry, [ Jonathan ]?

Just one question. Because with the exit of Singapore Food, maybe could you share how important is the digital aspect to yuu in Singapore? Is that a key priority now? Is that it?

Yes. So Singapore Food while they have exited from the DFI portfolio, they continue to be a member of the yuu program. And I think as with the next time period, then I think it's up for everyone's discussion, but I think it's for the program to continue to demonstrate value to all of these partners that they will continue to engage and use the program as a meaningful part of their business. I think that's always the way we like to approach this.

And maybe a follow-up -- maybe a follow-up in terms of the exit, right? So is there a kind of like a plan to continue selling Meadows on branch product under this new management or there would be a potential exit in the next few years?

Yes, I think they continue selling the Meadows. So if you like grocery Meadows, please or you can see buying the cold storage.

That's good news. That's good news to hear.

Okay. Great. Thank you all. If you have any follow-up queries, please e-mail to the Investor Relations team at [email protected]. Okay. So we've now come to the end of Q&A session. I'll turn it back to Scott briefly for his final remarks.

Yes. Thanks, everyone. We do appreciate the time. I know everyone is very busy, but we think that we've got a solid story to tell in terms of the investment case in DFI. As I said, we are not aspiration in terms of how we have put forward a plan. It's been well thought through. We have a very active Board of Directors who have guided us and have given us input. We're very comfortable that this is the base case for our business moving forward. And that as we find inorganic opportunities, they will be incremental opportunity, we believe, for shareholders moving forward. So with that, thank you very much and look forward to having chats over lunch.