Universal Robina Corporation ($URC)

Ladies and gentlemen, please take your seats. Good afternoon, ladies and gentlemen. I'm pleased to welcome you all to the 2026 Annual Stockholders Meeting of Universal Robina Corporation. May I request our Corporate Secretary, Attorney Macel Fernandez-Estavillo to introduce the Board of Directors present with us here today.

Good afternoon, Mr. Chairman. Allow me to introduce the members of the Board of Directors of Universal Robina Corporation present with us here today. At the venue, we have our Chairman Emeritus, Mr. James L. Go, our Chairman of the Board, Mr. Lance Y. Gokongwei, President and Chief Executive Officer, Mr. Irwin C. Lee; Executive Vice President, Mr. Patrick Henry C. Go; and Director, Mr. Johnson Robert G. Go Jr. Our Independent Directors, Mr. Cesar V. Purisima, and Ms. Rizalina G. Mantaring;Mr. Antonio Jose U. Periquet, Jr.; and Ms. Christine Marie B. Angco are joining us remotely. Also present with us today are other URC executive officers, external auditors from SGV & Company and stock and transfer agents from BDO.

Thank you. May I now request the Corporate Secretary to certify that notice of this meeting was sent to the stockholders and that there exists a quorum to transact business at today's meeting.

Mr. Chairman, I hereby certify that notice of this meeting has been sent to the stockholders of record as of April 8, 2026, via the following methods: first, by publication in the Manila Standard and Business World for 2 consecutive days, specifically on April 22 and 23, 2026 in both online and print formats. Second, by posting on the website of the corporation and third, by disclosure to the Philippine Stock Exchange. Thus, the stockholders of the corporation have been notified of this meeting in compliance with applicable rules and regulations. I hereby certify that there are present in this meeting via remote communication or by proxy, stockholders entitled to vote representing 76.87% of the corporation's total outstanding shares and that this meeting is therefore competent to transact the business provided for in the agenda.

There being a quorum, the Annual Meeting of the Stockholders of Universal Robina Corporation is hereby call to order. May request the Corporate Secretary to share with us the rules and procedures for this meeting.

The rules and procedures are set forth in the definitive information statement and in the explanation of agenda items integrated into the notice of this meeting. All tabulation results for this meeting are subject to validation by Punongbayan and Araullo or Grant Thornton Philippines. For the information of the stockholders, the corporation has requested stockholders to send their questions or comments via e-mail. Questions received by May 8, 2026, have been collated and selected and will be answered later in this meeting. Questions not taken up during this meeting will be replied through via e-mail.

Let us now proceed to the first item on the agenda, which is the approval of the minutes of the 2025 Annual Meeting of the Stockholders held on May 15, 2025.

Mr. Chairman, copies of the minutes have been distributed to the stockholders by providing the link to the said minutes on the corporation's website, in the information statement and by showing the QR code on the screen prior to the meeting.

Mr. Chairman, having ready access to the 2025 Annual Stockholders Meeting minutes, I move that the reading of the said minutes to be waived, and that the same be approved as submitted.

I second the motion.

Mr. Chairman, the minutes have been approved as submitted by votes representing 76.6% of the total outstanding shares of the corporation.

Thank you. After having moved and seconded and hearing no objections, the minutes are hereby approved as presented. Moving on to the next item, the agenda. I may now call on the corporation's President and Chief Executive, Mr. Irwin Lee, to present the President's report together with the audited financial statements for the preceding calendar year.

Good afternoon to our distinguished members of the URC Board of Directors and all our beloved shareholders, my warmest greetings. For our Annual Shareholders Meeting today, I will be providing you a report on the company's final 2025 results, a brief recap of focus areas and an update on our first quarter results for 2026. And finally, a refresh of our strategy that guides us in our day-to-day operations and decision-making. For 2025, ending December 31, revenues for URC rose 4% to PHP 168 billion, driven by steady volume growth led by Branded Consumer Foods Philippines, with International branded consumer foods also holding firm. This was partly offset by weaker commodities, which is for lower sugar average selling prices amid high inventories and a temporary Bais distillery shutdown. Operating profits declined to PHP 16.1 billion on elevated coffee input costs, partly cushioned by significant gains in international margins, improving operations in Vietnam, strong Malaysia sales, and core net income to parent was at PHP 11 billion, down 4%, broadly tracking earnings before income tax. Building on the financial highlights. I just walked through, these outcomes reflect a disciplined execution against the 4 priorities we set forth at the start of the year. For Branded Consumer Foods Philippines, we are proving that our volume growth-driven strategy with sharper value messaging, better availability and stronger in-store execution is translating into sales that is consistently outperforming the market, setting up for market share recovery, which we will see improved further in the first quarter of 2026. Branded consumer food Philippines International, our main focus area there was to sustain our growth and to scale our Munchy's business across the region and broaden our snack platform for new legs across Southeast Asia. In Animal Nutrition & Health, we have seen strong growth in our new segment entries, notably in our pet food expansion into modern trade as well as our new entry into the cat food segment. And finally, in commodities, we prioritized profit recovery and stable cash generation strengthening margins and supply resiliency to support our branded business and fund targeted capital expenditures. Let me begin with the financial review with our largest engine in the portfolio that's branded consumer foods Philippines. For 2025, Philippines sales reached PHP 79 billion. That's up 5% and consistent with our volume first playbook. We sustained volume growth and translated this into gradual, steady share gains led by snacks and bakery in the foods business and recovery in instant coffee, in particular, and ready-to-drink beverages. Earnings before income tax was PHP 8.5 billion, it's down 12%, mainly due to the abnormally high coffee input costs that weighed down on margins despite solid branded goods momentum. This was partly offset by gross margin expansion in our noncoffee segments, supported by improved mix and cost discipline. Excluding coffee, fiscal year 2025 earnings would have grown 6% year-on-year, outpacing the top line growth of 5%. From branded consumer Food Philippines, let's move to international, where we kept the top line steady while improving the quality of our earnings. International revenue grew 2% in constant currency, up 4% year-on-year in reported Philippine pesos, led by strong volumes in Malaysia with deeper Munchy's penetration and of course, helped by some government subsidy programs in Malaysia as well. Vietnam, which softened in the second and third quarters amidst a tax regime implementation change in the -- by the government has returned to growth as market adjusted to the tax changes by the fourth quarter of the year. The key highlight, of course, for international is profitability, with earnings growing 7% year-on-year on constant currency, up 9% year-on-year on reported Philippine peso terms. Softer input costs helped with disciplined execution across all of the countries flowed through with scale and full year margin expanded 71 basis points to 14.3% driven mainly by 2 of our leading countries, Malaysia and Vietnam. Turning to Animal Nutrition & Health, sales were PHP 13.4 billion, down 4%, mainly reflecting the impact of the lower hog population on total feed sales. On the bright side, we are seeing signs of recovery with quarterly feed sales showing positive trajectory quarter-on-quarter as demand improves with hog repopulation initiatives continuing across the country. Expansion to new category segments also show encouraging growth trajectories with significant improvement in our poultry feather line feeds as well as in the cat category delivering very, very high growth as we just entered that segment a couple of years ago. In addition, our sales of pet food in modern trade nearly doubled versus last year. Despite the softer top line, earnings held essentially flat at PHP 1.7 billion, signaling operating leverage starting to reemerge as volumes recover and the business returns to scale. Lastly, on commodities, sales reached PHP 39.6 billion, up 4% year-on-year, supported by a more normalized sugar operating environment. This was partly tempered by softer sugar prices later in the year, alongside the temporary Bais plant closure in the fourth quarter. Despite these headwinds, earnings before income tax closed at PHP 4 billion up 6%, reflecting improved stability in sugar supply and operational execution. We are also seeing a clear uplift in our flour business as the new Sariaya plant continues to ramp up, strengthening production reliability and efficiency. And as utilization increases. We also expect further gain as we see when we come to report first quarter 2026. Our financial position in 2025 remains a key strength. We generated PHP 22 billion in EBITDA, more than enough to fully fund our PHP 6.4 billion in CapEx and support working capital needs ending the year with PHP 11.2 billion in cash, broadly stable versus last year. Consistent with our commitment to deliver reliable shareholder returns, we raised -- continue to raise our dividends. We recently announced and paid a regular dividend of PHP 2.10 per share last May 7, and that's up 5% from PHP 2 paid in the first half of 2025. Importantly, cash efficiency improved meaningfully with our cash conversion cycle improving by about 14 days, driven by better inventory discipline and more efficient collections. We maintained a conservative balance sheet with gearing at only 0.19x, giving us ample flexibility to fund organic growth, capacity builds and potential acquisitions without compromising our financial strength. Closing out 2025, let me move on to update you on our priorities for 2026 as well as our initial headline results for the first quarter of 2026. For 2026, we chose to continue our priorities set forth in 2025, clearly anchored on executing the levers that will drive both growth and earnings and quality across our portfolio. In branded consumer Food Philippines, continuing on that theme of accelerating volume growth. And this year, in 2026, not only to sustain but to become even more competitive in share recovery across our core categories while steadily lifting our segment profitability, particularly on the very challenged coffee segment due to the high coffee bean prices of the past 1.5 years. In Branded Consumer Philippines International, we will also continue to sustain that growth and build share and tighten our execution, continuing to scale our Munchy's expansion across the region through wider distribution and also developing our new snack platforms, leveraging URC's trusted brands into the international markets. In Animal Nutrition & Health, we will support the feeds recovery while expanding into higher value pools, mostly through our pet food segment. And in commodities, our journey continues to focus on recovery of profit, sustainable cash generation driven by tighter operating discipline and improved cash conversion across the cycle. So for the first quarter of 2026, we reported sales rising 6% to PHP 47.9 billion for the period January to March 2026, driven by higher branded volumes, sharper in-store execution, and the strategies coming from latter 2024 and '25, continue to take effect into 2026. Branded Consumer Food Philippines led that growth up 10% on sustained volume, delivering an all-time high record sales quarter. International remained on track, an upward trend and delivered strong profitability. Animal Nutrition & Health had a significant improvement on better feeds demand amidst hog repopulation and our flour business benefited from the ramp-up of the Sariaya plant. These were partly offset by lower sugar and renewables on softer distillery revenues from lower utilization as we just begin to reopen the Bais distillery plant. Earnings before income tax came in at PHP 5.4 billion for the first quarter of 2026, down slightly 2% year-on-year primarily due to weaker sugar and renewable profitability. Margins were further weighted by higher freight and handling costs late in the quarter linked to the Middle East conflict situation as well as our decision to front-load and invest in our brands with front-loaded advertising and promotion to capture the momentum of our volume builds in the branded business. These were partly offset by stronger Branded Consumer Foods Philippines profitability on improving coffee economics, and continued international upside from scale-driven leverage and margin expansion. Core net income to parent declined 2% to PHP 3.8 billion, broadly tracking earnings before income tax. These are the financial outcomes, a more important question as we move forward is how we will sustain this momentum, systemically lifting the quality of earnings. And so before I close, let me share a bit of a refinement in our playbook and strategic road map, guiding our strategic choices. We are sharpening our grow the core, expand for more where-to-play strategy and we are adjusting it in a couple of lenses. For our core leaders, businesses where we already lead. Here, the mandate is to defend, protect, and grow our leadership by building demand, investing in capacity and quality, rigorously tracking our key performance indicators to compound our incumbency strength. And we have a lot of core leaders in the Philippines, we are #1 in snacks. We are #1 in chocolates and candies. And in international, we've got leading positions in ready-to-drink beverage, which we are also #1 in the ready-to-drink tea category in the Philippines. And we have also leading positions in key biscuits categories in places like Thailand and Malaysia. So from growing the core, we are having a very focused intention to protect, defend and continually, to have that growth to fund the challenger segments. So on our challengers, categories where we have a path to leadership where we are typically #2, #3. Here, the focus is to outgrow the market, scale to unlock better profitability, deploy our A&P more efficiently, sharpen our route-to-market execution and concentrate on adjacencies that leverage our brands and distribution. We've got a number of categories where we are strong challengers like bakery in the Philippines, like coffee in the Philippines, and we have a number of snack positions in international where we can further build our challenger positions. With this where-to-play very clear, refined for further growth potential. The next step is how to win. And here, execution is where strategy earns its keep. We have refined our how-to-win strategies, to focus on 5 must-win execution capabilities. And these operate as one integrated system. At the end of it all, what URC stands for is a company that's best known for its best products and innovations and brands that people love and choose. So brand building and innovation is at the heart and center of all we do. We then deliver these brands and innovations into the market with superior systems in sales and distribution, to become a preferred partner in sales and distribution, and delivering products to market with a best-in-class supply chain network. So commercial excellence sustains this with sell-through and the supply network delivers it with high service and excellent cost. The foundation of URC is a values-led future-ready organization that maintains speed, quality, and we are calling out the importance of driving digital and AI engines to convert activity into insight and insight into faster, better decisions. With these capabilities moving in sync, we compound penetration, improve mix, lower our unit cost and raise returns on capital. This cycle of capability building, reinforced by disciplined key performance measures underpin sustained growth, stronger margins and superior returns. Before I close, let me step back from the numbers and the strategy discussions and reflect on what anchors all of it. URC's enduring commitment to building for the long term. This year marks a milestone for URC. We are celebrating our 70th year anniversary. And it's not just a number on the time line. It's proof of what consistent, focused work can build over decades. What brings that milestone to life is the same principle that has guided us through every cycle. We do the hard everyday work well, and we do it with purpose. We are committed to what we do, serving consumers with brands they trust, executing with discipline and investing with a long-term view. We stay close to the market. We keep improving how we operate, and we make decisions that protect the business today while strengthening it for tomorrow. Most of all, we remain committed to the people behind this company. The teams who show up, adapt and raise the bar year after year. That commitment is what has carried the URC forward, and it is the same commitment that will shape the next chapter we build, together with you are beloved stockholders. Thank you.

Thank you, Irwin. Are there any questions? If there are no questions from the floor, the Chair will entertain a motion to note the report and approve the audited financial statements for the preceding fiscal year.

Mr. Chairman, I move that the President's report be noted and that the audited financial statements for the preceding fiscal year will be approved as presented.

I second the motion.

Thank you. Are there any objections? If there are no objections, Ms. Corporate Secretary, may we please have the voting results for this agenda.

Mr. Chairman, we are pleased to report that stockholders representing 76.55% of the total outstanding shares of the corporation have approved the audited financial statements for the preceding calendar year as presented.

Thank you. The President's report is accordingly noted and audited financial statements for the preceding fiscal year are hereby approved as presented. We now go to the election of the members of the Board. May I request the Corporate Secretary for the names of the nominees to the Board of Directors.

Mr. Chairman, in accordance with the nomination process stated in the bylaws of the corporation, the following have been nominated as members of the Board of Directors: Mr. James L. Go, Mr. Lance Y. Gokongwei, Mr. Irwin C. Lee, Mr. Patrick Henry C. Go, Mr. Johnson Robert G. Go Jr. and as Independent Directors, Ms. Christine Marie B. Angco, Mr. Cesar V. Purisima, Ms. Rizalina G. Mantaring and Mr. Antonio Jose U. Periquet, Jr.

Thank you. Please inform the body of the voting results.

Mr. Chairman, the affirmative votes in favor of those nominees that are shown on the screen. The following are hereby declared as the duly elected members of the Board of Directors of the corporation for the ensuing year until their successors shall have been elected and qualified. Mr. Chairman, shown on the screen are the names of the elected directors and the percentage of affirmative votes each has received. Mr. James L. Go, Mr. Lance Y. Gokongwei, Mr. Irwin C. Lee, Mr. Patrick Henry C. Go and Mr. Johnson Robert G. Go, Jr., and for Independent Directors, Ms. Christine Marie B. Angco, Mr. Cesar V. Purisima, Ms. Rizalina G. Mantaring and Mr. Antonio Jose U. Periquet, Jr.

Thank you and congratulations to the elected members of the Board of the corporation for the ensuing year. Let us now move on to the next item of the agenda, which is the appointment of the external auditor of the corporation.

Mr. Chair, I nominate the accounting firm of SyCip Gorres Velayo & Company as external auditor of the corporation for the fiscal year 2026.

I move to close the nomination.

I second the motion.

Thank you having been moved and seconded that the nominations be closed. Does the Chair here any objections? As there are no objections, Ms. Corporate Secretary, do we have the voting results for the agenda item?

Mr. Chairman, after tabulation of the votes the appointment of SyCip Gorres Velayo & Company as external auditor of the corporation has been approved by stockholders, representing 75.66% of the total outstanding shares of the corporation.

Thank you. The accounting firm of SyCip Gorres Velayo & Company is hereby appointed as external auditor of the corporation for the fiscal year 2026. Let's now proceed to the next item of the agenda, which is the ratification of the acts of the Board, its committees, officers and the management of the corporation.

Mr. Chairman, the list of ratification of the stockholders is being shown right now on the screen. Copies of the said list have also been distributed to the stockholders in the information statement and by showing the QR code on the screen prior to this meeting.

Mr. Chairman, I move that all the acts of the Board of Directors, its committees, officers and management of the corporation for the period beginning from the last annual stockholders' meeting up to the current stockholders meeting, as duly recorded in the corporate books and records of the corporation be confirmed and ratified.

I second the motion.

There are no objections, Ms. Secretary can you please have the voting results for this item?

After tabulation of the votes, stockholders representing 76.54% of the total outstanding shares of the corporation have confirmed and ratified the acts of the Board of Directors, its committees, officers and management of the corporation for the mentioned period as duly recorded in the corporate books and records of the corporation.

Thank you. The acts of the Board, its committees, officers and management of the corporation for the mentioned period, as duly recorded in the books and records of the corporation are hereby confirmed and ratified. We will now respond to questions which are earlier submitted via e-mail. The questions will be answered by the corporation's President and Chief Executive, Mr. Irwin Lee.

Our first question. With the ongoing Middle East tension and its possible impact on commodity prices and then overall inflation, how is URC mitigating the risks?

Yes. Since the beginning of the conflict that started on the 28th of February, all the business units of URC have immediately gone into emergency crisis mode and captured all the impacts of the effects of that conflict into the business operations. And that obviously started with higher fuel costs with a spike in oil prices. So 2 months into the conflict, we have a fairly good idea and capture of all of the cost impacts of all of that's happening, starting with implications on transport costs, fuel costs, and then the carry-on effects of oil and oil derivative materials from -- to things like resins and packaging materials. All of this, we have assumed how that might continue for the balance of the year under a $100 oil environment. We have a good quantification of the impact of those and we have put forth mitigation plans in terms of savings efforts as well as price increases that are now being executed in market. That's the financial impact on dealing with the Middle East conflict. The second important thing is to ensure continued supply resiliency and supply contingencies, cost impacts aside, the important thing is to be able to continue to operate, to be able to continue to find sources of materials. And that is what we are doing day in, day out to make sure that we are there and being able to serve our customers, and that will be a source of competitive advantage for URC if we're able to secure those supplies. Last but not the least, we are looking forward on the forward implications on things like caloric impacts of higher fertilizer costs that will still come out and hit the market towards the balance of the year and into next year. So this is preparing ourselves for the future, understanding what our structural effects, what are temporary effects and extending our mitigation plans into 2027.

Thank you. Next question, with the international business seemingly slowing and with a slower Q1 2026 print, is management concerned about this segment?

Not at all. We continue to see significant earnings momentum and contribution from international. In the first quarter, international grew profits by about 11% on a constant currency basis and up 17% on a reported Philippine peso basis. From a top line standpoint, we continue to have good strength and growth from markets like Malaysia, we are seeing a quarter-on-quarter improvement on countries like Vietnam. We mentioned in my prepared remarks earlier that we did see disruption in the trade in Vietnam in the second and third quarters of 2025. That has begun to turn in the last quarter and we have seen continued improvement in 2026. So the comparator base is high, and there is a movement of festive periods from 2025 to 2026. Periods of Ramadan are different from 1 year to another, and we're beginning to see that sort of stabilize. Having said that, the international business is not going to be immune from the uncertainty that is arising from the Middle East conflict. So we remain vigilant, while our volumes remain strong into the start of the second quarter. We are watching very closely what the impact is on consumption as more price increases by other manufacturers and the continued spike in fuel costs affect consumers. It remains to be seen whether consumption patterns may have an effect in the second half of the year, and that's what we will have to be vigilant about and adjust our plans accordingly.

Thank you. And there are no further questions at this time.

Thank you. Other questions sent by the stockholders will be answered through e-mail. Are there any other matters to be taken up for consideration of our stockholders?

There are none, Mr. Chairman.

As we close today's Annual Stockholders' Meeting, allow me on behalf of the Board to extend our sincere thanks to our fellow directors to management and to our employees across the organization. Most of all, thank you, our dear shareholders, for your continued trust, support and confidence. As we look ahead, we remain committed to doing our part in nation building and to creating shared value for all our stakeholders, our people, the communities where we operate, our retailer and supplier partners, our consumers and you, our shareholders. This year also marks a special milestone as we celebrate our 70th anniversary, an enduring journey of transformation built on dedication, passion and commitment. Through every chapter of our history, our spirit has carried us forward. Our ability to dare, to build, to adapt and to move ahead together. In a changing macro environment, that same spirit continues to guide our decisions, staying disciplined in stewardship, prudent and investment and focused on execution. So we can continue to thrive and in doing so, create and compound value for our investors over the longer term. Once again, thank you for your presence and partnership, and we look forward to continuing this journey with you. Good day. May we now hear a motion for adjournment.

Mr. Chairman, I move that the meeting be adjourned.

I second the motion.

As it has been moved and seconded, the meeting is now adjourned. Thank you all for joining today's meeting.

This ends the 2026 Annual Stockholders Meeting of Universal Robina Corporation. A link where a replay of this meeting may be viewed shall be made available shortly at the website of the corporation. Thank you very much for joining.