Ginebra San Miguel Inc. ($GSMI)

Good afternoon. May we request everyone to rise for the national anthem and to remain standing for the invocation to be led by Mr. Delfin Jude Uy, Management Services Manager of the company.

[Foreign Language] Almighty God, we pause today to honor your presence throughout our company's long history. Your grace is our foundation as we deliver products and brands that ignite the Filipino spirit to aspire for better. We feel your guidance every step of the way. You grant us resilience in times of challenge and inspire us to keep striving in times of success. As we review our past performance today, we welcome every achievement as your blessing, and we pledge to remain responsible stewards of this company. As we move forward, we ask for your continued guidance, grant our Board and management clear insight, unity, and sound judgment. As we make decisions for the future, equip us to navigate market uncertainties with courage and to steer our company towards a sustainable, prosperous tomorrow that benefits our families, our consumers, and our stakeholders. Lord God, our ultimate source of hope and strength, bless everyone gathered here with renewed motivation and determination. We place our plans, our people, and the year ahead into your loving hands. This we pray through Christ, our Lord. Amen.

Meeting will come to order. Mr. Secretary, were notices to the stockholders duly sent?

Notices were sent, Mr. Chairman.

Do we have a quorum?

Mr. Chairman, we have a quorum. There are present in this meeting, in person or by proxy, 81.72% of the outstanding capital stock of the company. For the record, proxies for 81.63% of the outstanding capital stock have been issued in favor of the Chairman of the meeting, Mr. John Paul Ang, authorizing him to vote for the election of directors and the approval of all corporate acts, which require the conformity of the stockholders as provided in the agenda for this meeting. Voting shall be made in accordance with the procedures set forth in the information statement that has been made available in the company's website and the PSE Edge. We acknowledge the attendance of the directors of the company. We likewise acknowledge the attendance of the company's officers, led by the General Manager, Ms. Cynthia M. Baroy, and the company's external auditor for the year 2025, R.G. Manabat & Co. We invite the stockholders at an open forum. We will follow the presentation of the annual report for 2025. Questions sent to the company's email address for the meeting will be entertained and address. The full agenda for this meeting is presented on the screen and the rationale for each agenda item can be found in the information statement.

Thank you. The first item in the agenda is the approval of the minutes of the Annual Stockholders' Meeting held on May 29, 2025, which is attached to the information statement and posted in the company's website.

Mr. Chairman, I move that the minutes of the Annual Stockholders' Meeting of Ginebra San Miguel Inc. held on May 29, 2025, be approved.

I second the motion.

Moved and seconded. Moved and seconded. Next item is the presentation of the 2025 annual report. Ms. Cynthia Baroy, General Manager of the company, will report.

Fellow stockholders, ladies and gentlemen, good afternoon. For the 11th consecutive year, Ginebra San Miguel Inc. expanded its market share, achieving record sales of 51 million cases in 2025, a 12-year high despite ongoing challenges in the liquor industry. This growth, while marginal, further strengthens our leadership position and underscores the equity and resilience of our brands built through years of meaningful campaigns and reinforced by on-the-ground execution. Through the Kabayani Kita sa One Ginebra Nation campaign, our flagship Ginebra San Miguel reached more core consumers nationwide. This was amplified by the Ginstanalo sa One Ginebra Nation nationwide consumer promo, which effectively encouraged purchases as evidenced by our highest redemption rates on record. As a result, Ginebra San Miguel volumes were 3% higher than in the previous year. Vino Kulafu's Kul-disyon sa Naay Ambisyon campaign meanwhile resonated strongly with the Visayas and Mindanao markets, earning its first ever award of merit at the 21st Philippine Quill Awards, as it reflected the brand's deep connection with hard-working Filipinos who aspire to improve their lives and provide more for their families. The supporting Under The Cap promo further boosted consumption, helping Vino Kulafu sustain its recovery and achieved 3% growth versus last year. Primera Light Brandy's Primera Klaseng Ride Under The Cap Promo Gear 2, also enhanced aspirational appeal and helped drive volumes, which improved 9% from the previous year. As market competition intensified, we worked to bring our brands closer to even more consumers, enhancing their overall experience and engagement. Our lively and immersive Ginuman Fest Concert events and fest activations drew large crowds nationwide with attendance at a single event reaching 80,000, the highest of the year. House-to-house sampling and trade penetration activities were also effective in driving market expansion in high potential districts in the Visayas and Mindanao. To tap into upscale markets, we made sure our Archangel Reserve premium dry gin and 1834 premium distilled gin were featured at trade shows and high-end events. At the same time, we expanded penetration across on-premise and trade outlets. We captured new markets through continued nationwide expansion of distribution coverage, allowing our products to reach more communities, strengthen our presence in underserved areas and improve availability across key growth regions. These efforts, combined with the price adjustment resulted in an 8% increase in revenues to PHP 67.4 billion, improved efficiencies across the supply chain, meanwhile, reduced material costs and improved profitability. Diversified raw material sourcing, enhanced distillery efficiencies and yields, and initiatives that accelerated bottle retrieval collectively contributed to a gross profit of PHP 17.5 billion, up 15% year-ago level. While selling and administrative expenses increased 7% to PHP 7.1 billion, income from operations reached PHP 10.4 billion, an improvement of 21%. Net income hit PHP 8.7 billion, surpassing 2024 level by 20% and setting a new milestone as the highest ever in GSMI's history. We continue to strengthen our commitment to reducing our environmental impacts by advancing our environmental sustainability initiatives. Under our parent San Miguel Corporation's Water for All project, GSMI achieved a 43.8% reduction in water use. In total, since 2016, we have conserved 8.6 billion liters of water through various recovery and conservation initiatives implemented across our facilities. Moreover, as part of our continuing effort to reuse glass bottles, we expanded our BOTEful Philippines bottle recovery campaign to 21 barangays in Palawan last July. This effort led to the retrieval of some 70,000 bottles. Since the program was launched in 2017, we have already collected a total of 240,000 bottles. For the first quarter of 2026, we experienced a 3% volume decline as the ongoing effects of last year's economic slowdown continued to impact purchasing power and consumer demand. Still, we maintained profitability through supply chain efficiencies and low cost of inventory on hand. Revenues in the first quarter amounted to PHP 16.7 billion, 3% better than the same period last year. Lower material costs pushed gross profit to PHP 4.5 billion, 11% higher than year-ago level. This helped absorb higher selling and administrative expenses, which were up 4% at PHP 1.7 billion. As a result, income from operations was 15% higher at PHP 2.8 billion, while net income ended at PHP 2.3 billion, surpassing 2025 first quarter profits by 9%. With continued uncertainty across the broader economy due to the continuing conflict in the Middle East, we are determined to adapt and implement programs that will help sustain demand for our products and stabilize costs. None of what we achieved this year would have been possible without the continued support of our shareholders, the commitment of our employees and the confidence of consumers and partners we serve every day. On behalf of the Board, we extend our sincere appreciation for your continued trust, confidence and support. [Foreign Language].

Thank you. The Chair will now entertain questions.

We will start with the questions submitted in advance.

Question from Marcelino Torio of Pasig City. [Foreign Language].

[Foreign Language].

Another question from [indiscernible]. Given the continuing fuel crisis, what are the expected impacts moving forward? And what actions will GSMI take to mitigate the impact?

The extent and duration of the crisis remain uncertain. And given that, we anticipate that prolonged disruptions will actually deepen impact on both our sales volume and operating costs. To help mitigate the impact on demand, we will continue to adapt our communications by promoting product affordability and quality, strengthen our visibility, consumer engagement, and brand experience. And also, we will continue to strengthen our distribution. On the cost side, we will continue to capitalize on diversified raw material sourcing while sustaining operational efficiencies of our distillery and bottling plants.

Lastly, a question from Alma [indiscernible] of Calamba City, Laguna. Despite the economic challenges and industry headwinds in 2025, how did GSMI manage to deliver strong performance and substantial improvement over the previous year?

Well, last year's performance of GSMI was a testament of the strong brand equity. And our supply chain also gave their efforts, provided the efficiency improvements. That's why our business was able to sustain the income growth.

There are no more further questions, Mr. Chairman.

With no more questions, I move to close the open forum, and that the 2025 annual report as presented be approved.

I second the motion.

Moved and seconded. Next item is the ratification of all acts and proceedings of the Board of Directors and corporate officers of the company since the Annual Stockholders' Meeting held on May 29, 2025, until the date of this meeting.

Mr. Chairman, the list of the acts and proceedings for ratification is presented on the screen for your purposes.

The Chair will now entertain a motion.

I move that all acts, resolutions and proceedings of the Board of Directors and corporate officers of the company since the Annual Stockholders' Meeting held on May 29, 2025, until the date of this meeting, as reflected in the minutes of the meetings of the Board of Directors as well as financial statements and records of the company, be approved, confirmed and ratified.

I second the motion.

Moved and seconded. We shall now proceed to the election of directors. The Corporate Secretary will read the names of the nominees for election to the Board.

The names of the qualified nominees for election to the Board of Directors of the company, whose qualifications were evaluated and recommended by the Corporate Governance Committee during its meeting held on March 5, 2026, are included in the information statement and likewise presented on the screen. The nominees are as follows: Mr. Ramon S. Ang, Cecile L. Ang, Mr. John Paul L. Ang, Mr. Leo S. Alvez, Ms. Aurora T. Calderon, Mr. Gabriel S. Claudio, Justice Francis Jardeleza, Justice Martin Villarama, Jr., and Mr. Douglas LuYm. The information statement provides that the nominees for election as independent directors of the company are Mr. Martin S. Villarama and Douglas LuYm. This is in accordance with the mandatory requirement of the Securities and Exchange Commission for the election of directors.

The Chair will now entertain a motion.

I move that the balloting be dispensed with and the nominees presented earlier be considered unanimously elected as directors of the company.

I second the motion.

Moved and seconded. On behalf of management, I would like to extend our warmest welcome to the elected directors. Your expertise would be of great help to the company and its success. Next item is the appointment of the external auditor of the company for the fiscal year 2026. May we request the Corporate Secretary to present the recommendation of the Audit and Risk Oversight Committee on this matter?

Mr. Chairman, after deliberation and evaluation of the Audit and Risk Oversight Committee, during its meeting held on March 5, 2026, the committee recommends the reappointment of the auditing firm R.G. Manabat & Co. as external auditor of the company for fiscal year 2026.

Thank you. May I request Independent Director, Justice Villarama, Chairman of the Audit and Risk Oversight Committee, to please confirm.

Thank you, Mr. Chairman. I confirm the reappointment of the auditing firm of R.G. Manabat & Co. as external auditor of the company for the fiscal year 2026, Mr. Chair.

Thank you, sir. The Chair will now entertain a motion.

I move that the auditing firm of R.G. Manabat & Co. be designated as the external auditor of the company for the fiscal year 2026.

I second the motion.

Moved and seconded. Are there any other matters or business that you intend to present to this assembly? If none, the Chair will now entertain a motion to adjourn.

I move that the 2026 Annual Stockholders' Meeting of the company be adjourned.

I second the motion.

Thank you. Meeting is adjourned.