Post on 24-Jan-2015
description
BTG Pactual XIII CEO ConferenceFebruary – 2012
Agenda
� Overview– Magazine Luiza
� 2011 Main Events
� 2012 Expectations
2
Market Leadership
� One of Brazil’s largest durable goods retail chains with more than 728 stores nation-wide
− Gross revenues of R$5.3 billion and EBITDA of R$248 million in 9M11
− More than 20 thousand employees serving 23 million customers
Strong corporate culture and focus on people and innovation
Unique multi-channel model under a single brand
�Physical stores, virtual stores, e-commerce website and telephone sales
Overview – Magazine Luiza
3
Focus on Brazil’s fastest growing socioeconomic segment
�The “C” (emerging middle class) represents 53% of Brazil’s population or more than 102 million people
History of successful organic growth and acquisitions
�8 acquisitions in the last 10 years and recent entry in the high growth northeast market
� July 2011, conclusion of the acquisition of 121 stores of Baú da Felicidade
Pioneer in Financial Services for retail
�First retail chain to establish JVs with financial institutions focusing on consumer credit
Financial discipline focused on results
Proven History of Strong Organic Growth and Successful Acquisitions
5.3
604
253
351 346
391
455
444Northeast:
+136 storesMadol, Killar
São Paulo (Capital):
+121 stores
Overview – Magazine Luiza
5.0+ 42%
728 *
4
0.5 0.6 0.70.9
1.4
1.92.2
2.6
3.2
3.8
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
96111
127
174
São Paulo (Capital):
+46 storesLojas Líder
Santa Catarina:
+100 stores
Rio Grande do Sul:
+51 stores
Campinas:
+20 storesUpstate São Paulo:+5 stores
Rede Wanel
Gross Revenues from Retail Operations (R$ billion) Total Stores
9M11
3.5(9M10)
* Total of stores in december, 2011.
Overview – Magazine Luiza
Cabedelo
Simões Filho
Geographic footprint covering Brazil’s main regions(75% of GDP)
728 stores
% of Stores per regions
Northeast20%
South30%
Central West
5
Distribution centers (8 + 1 cross docking)
States with stores
Simões Filho
ContagemRibeirão Preto
LoureiraIbiporã
Navegantes
Caxias
West2%
Southeast50%
Strong corporate culture, focused on valuing people1
2 Integrated sales platform with multiple sales channels
Unique Business Model
Differentiated positioning to capitalize on industry growth
6
Large customer base, with relationship management targeting customer loyalty and retention3
4Broad, competitive portfolio of services and financial products
Today’s
Consumer search for product’s information and reviews
Once decided, purchase takes place..
� Personalized virtual store using Social Network to sell any of Magazine Luiza’s products
� Permits users to receive reviews from contacts they trust
� More than 25.000 virtual stores opened after 3 weeks of the release
Focus on Innovation: Magazine Você
7
Now with Magazine Você
Consumer search for product’s information and reviews
Purchases straight from those contacts and connections
Corporate Structure
8
(1) JV with Itaú Unibanco
(2) JV with Cardif
1 2
100%50%40.55%100%
9.45%
100%
(To be incorporated in 2012)
(Incorporated in 2011)
Ownership Structure
Pre- IPO Post- IPO
LTD
Administração e
Part. S.A.
75.4%
Capital Int'l. Inc.
(Private Equity
Fund)
12.4%
LTD
Administração e
Capital Int'l. Inc.
(Private Equity
Fund)
Free Float
29.7%
9
186,494,467 shares150,000,000 shares
75.4%
Wagner Garcia
Part. S.A.
5.6%
Founding Family
Members
6.7%
12.4% Administração e
Part. S.A.
60.6%
Wagner Garcia
Part. S.A.
4.5%
Founding Family
Members
2.7%
Fund)
2.5%
Agenda
� Overview – Magazine Luiza
� 2011 Main Events
� 2012 Expectations
10
2011 Main Events
IPO Process
1Q11 2Q11 3Q11 4Q11
Consolidation of Sao Paulo Office
(Kick-off in Feb. and conclusion in Jun.)
Continuing the organic growth
11
Integration Process – Lojas Maia
Acquisition and Integration Lojas do Baú
Initiated the process of refurbishment and brand name transition
Initiated process of refurbishment, corporate and systemic integration
Opened 24 new stores and refurbished 50 stores
Investments – TI and Logistics
Investments to ensure the success of the integrations
IPO Process
1Q11 2Q11 3Q11 4Q11
Consolidation of the Office of Sao Paulo
(Kick-off in Feb. and conclusion in Jun.)
Continuing the organic growth
2011 Main Events
12
Integration Process – Lojas Maia
Acquisition and Integration Lojas do Baú
Initiated the process of refurbishment and brand name transition
Initiated process of refurbishment, corporate and systemic integration
Opened 24 new stores and refurbished 50 stores
Investments – TI and Logistics
Investments to ensure the success of the integrations
IPO
Funds from the Offering(% of primary offering )
• Opening of new stores:
Lojas do Baú: 100 stores
Magazine Luiza: 18 stores
• Increase Working
Capital (Maia e Baú)
� Company listed on Novo Mercado
� Net amount of R$550 million
Work Capital /
13
Magazine Luiza: 18 stores
Lojas Maia: 6 stores
Total: 124 stores
• Magazine Luiza: 50 stores
• Lojas Maia: 39 stores
• Baú: 35 stores
• Total: 124 stores
Capital (Maia e Baú)
• Reduction of
product lines
• New distribution center in
Guarulhos
• Expansion of Louveira’s
distribution center
• Pilot project: own fleet (SP)
Opening Stores/ Acquisition
30%
Stores refurbishment20%
Technology andLogistics
20%
Work Capital / Decrease on debt
30%
IPO Process
1Q11 2Q11 3Q11 4Q11
Consolidation of Sao Paulo Office
(Kick-off in Feb. and conclusion in Jun.)
Continuing the organic growth
2011 Main Events
14
Integration Process – Lojas Maia
Acquisition and Integration Lojas do Baú
Initiated the process of refurbishment and brand name transition
Initiated process of refurbishment, corporate and systemic integration
Opened 24 new stores and refurbished 50 stores
Investments – TI and Logistics
Investments to ensure the success of the integrations
Integration Process – Lojas Maia
3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Integration Process of Lojas Maia
Brand name transition
Metropolitan Region of Recife
Metropolitan Region of Maceió
Metropolitan Region of Fortaleza
14 stores (Out.)
9 stores (Dec.)
15 stores (Dec.)
15
Metropolitan Region of Salvador
Metropolitan Region of João Pessoa
Corporation Integration
Systemic Integration of stores
Benefits (synergies) from integration
15 stores
15 stores
2011 Main Events
IPO Process
1Q11 2Q11 3Q11 4Q11
Continuing the organic growth
Consolidation of Sao Paulo Office
(Kick-off in Feb. and conclusion in Jun.)
16
Integration Process – Lojas Maia
Acquisition and Integration Lojas do Baú
Initiated the process of refurbishment and the brand name transition
Initiated process of refurbishment, corporate and systemic integration.
Investments – TI and Logistics
Opened 24 new stores and refurbished 50 stores
Investments to ensure the success of the integrations
Integration Process – Lojas do Baú
3Q11 4Q11 1Q12 2Q12
Integration process of Lojas do Baú
Acquisition of 121* stores of Baú
Documentation for starting operations
Virtual Stores
Opening of the Virtual Stores
July 29, 2011 - R$80,3 millions
Most of the stores closed during the period
(7 months)
35 stores (Paraná)
17
Refurbishment of stores
Systemic Integration
Conventional Stores
Opening of the Conventional Stores
Refurbishment of stores
Systemic Integration
Benefits (synergies) from integration
69 stores (34 Paraná, 34 São Paulo, 1 Minas Gerais)
Change in storefront and uniform
End of February
Complete refurbishment of stores
End of December
* 13 stores were sold and four conventional stores were refurbished and attached to the already existing Magazine Luiza´s stores
Agenda
� Overview – Magazine Luiza
� 2011 Main Events
� 2012 Expectations
18
2012 Expectations
Sales Growth
� Growth trend mainly in the 2nd half of 2012 (inverse performance 2011 X 2010)
� Effect of minimum salary
� Decrease in interest rates (SELIC)
� Stability of employment rate
� Inflation under control
� Maturation of new stores and acquired stores
1Essential Projects
3
� Continue projects focused on:
� Satisfaction of customers and employees
� Sales Performance
� Commercial and operational management
19
Selling & Administrative Expenses2
� Conclusion of the integration process (Lojas Maia e Baú)
� Dilution of administrative expenses of São Paulo Office
� Focus on rationalizing costs and expenses:
� Store operations, marketing, logistics and consulting
� Stability of delinquency rates and maintenance of conservative provisions in Luizacred
Investments4
� Investments Reduction
� ML 10 to 15 new stores
� Maia 10 to 15 new stores
� Total 20 to 30 new stores
� Finish the expansion of Louveira distribution center (from 60 to 95 square meters)
Investor Relations
ri@magazineluiza.com.brwww.magazineluiza.com.br/ri
20
Any statement made in this presentation referring to the Company’s business outlook, projections and financial and operating goals representbeliefs, expectations about the future of the business, as well as assumptions of Magazine Luiza’s management and are solely based oninformation currently available to the Company. Future considerations are not a guarantee of performance. These involve risks, uncertainties andassumptions since they refer to forward-looking events and, therefore depend on circumstances that may not occur. These forward-lookingstatements depend substantially on the approvals and other necessary procedures for the projects, market conditions, and performance of theBrazilian economy, the sector and international markets and hence are subject to change without prior notice. Thus, it is important to understandthat such changes in conditions, as well as other operating factors may affect the Company’s future results and lead to outcomes that may bematerially different from those expressed in such future considerations. This presentation also includes accounting data and non-accounting datasuch as operating, pro forma financial data and projections based on the Management’s expectations. Non-accounting data has not beenreviewed by the Company’s independent auditors.
Legal Disclaimer
Financial Information – 3Q11/9M11
Appendix
21
Financial Information – 3Q11/9M11
Highlights for the Period (3Q11)
�Sales growth above market average (+34%)
� Same Store Sales growth (+20%)
� Internet expansion (+48%) and Innovation (“Magazine You”)
� Lojas Maia impressive performance (+58%)
� Effective brand name transition in Recife region
22
� Fastest administrative integration of Baú stores
� Success in the opening of Parana’s virtual stores
� Organic expansion: 11 stores till Sep/11 + 13 stores till Dec/11
� Luizacred’s credit card base expanded to 4,2 million
� Decrease in overdue portfolio
� Adjusted EBITDA margin of 5.7%
3.52
4.99
3.80
5.33
Gross Revenue (R$ billion)
Retail Total
+ 41.7%
+ 33.8%
+ 40.5%
23
1.03 1.18 1.32
1.59 1.64 1.77
3.52
1Q10 2Q10 3Q10 1Q11 2Q11 3Q11 9M10 9M11
1.12 1.26
1.41 1.70 1.74
1.89
1Q10 2Q10 3Q10 1Q11 2Q11 3Q11 9M10 9M11
+ 33.6%
+ 33.8%
26.3%
16.6%
26.8%
16.3%
30.0%
20.0%
31.2%
19.8%
SSS- Same Stores Sales (%)
24
16.3%
3Q10 3Q11 9M10 9M11
Same Physical Stores Sales Growth Same Stores Sales Growth
385
570
+ 48.0%
+ 48.2%
Internet (R$ million)
25
110 130
145 174 182
214
1Q10 2Q10 3Q10 1Q11 2Q11 3Q11 9M10 9M11
Lojas Maia – Gross Revenue (R$ million)
426
734
+ 58.2%
+ 72.5%
26
127 145 154
253 237 244
1Q10 2Q10 3Q10 1Q11 2Q11 3Q11 9M10 9M11
Note: 2010 pro-forma figures, since Lojas Maia was acquired in Aug/10
Net Revenue and Gross Income (R$ million)
Consolidated Net Revenue Consolidated Gross Income
4,491 + 39.9% 1, 476
+ 31.7%
27
1,073 1,197 1,416 1,473 1,603
3,211
2Q10 3Q10 1Q11 2Q11 3Q11 9M10 9M11
+ 33.8%
368 413 470 483 524
1,121
2Q10 3Q10 1Q11 2Q11 3Q11 9M10 9M11
+ 26.8%
19.9% 20.0%20.9%
19.9%
+10bps -100bps
Operating Expenses (% NR)
28
5.2% 5.5% 4.6% 5.2%
3Q10 3Q11 9M10 9M11
Selling G&A
+30bps +60bps
Consolidated EBITDA (R$ million)
94
225
248
- 2.0%
+ 10.2%
29
9492
3Q10 3Q11 9M10 9M11
7.9% 5.8% 7.0 5.5%EBITDAMargin
Adjusted EBITDA (R$ million)
(=) EBITDA (reported) R$ 92.2 mm
(+) Pre-operation expenses at Baú stores R$ 14.1 mm
(+) Luizacred revenue recognition R$ 11.7 mm
(+) Sales at Lojas Maia R$ 4.0 mm
(+) Pre-operational expenses at new stores R$ 2.2 mm
(+) Consulting expenses at Magazine Luiza R$ 5.8 mm
30
(+) Consulting expenses at Magazine Luiza R$ 5.8 mm
(+) Pre-operational expenses at Consortium business R$ 1.6 mm
(-) Lojas Maia fiscal provision benefits R$ 32.6 mm
(-) Luizacred revenue from marketing selling structure R$ 21.4 mm
(+) Other expenses related to the network integration R$ 13.9 mm
(=) EBITDA (adjusted) R$ 91.5 mm
Financial Expenses (% NR)
3.2%
2.3%
2.9%2.8%
-90 bps
-10 bps
31
3Q10 3Q11 9M10 9M11
23
48
29
Consolidated Net Income (R$ million)
Adjusted Net Income*: R$18 millions / R$ 35 millions
(*) Adjusted by Income Tax and Social Contribution not accounted at Lojas Maia and Baú
32
23
12
3Q10 3Q11 9M10 9M11
1.9% 0.7% 1.5% 0.6%Net Margin
Financed Mix Sale (% total sales)
29% 29% 30%
23% 23%31% 36%
25%
33
35% 35% 29% 27% 34%
12% 13%
2% 0%
11%
38%37%
Total 3Q10 ML 3Q11 Maia 3Q11 Baú 3Q11 Total 3Q11
Luiza Card CDC Third Party Cards Cash Sales/ Down Payment
2,2712,642
3,9754,174
+ 58.0%
Cartão Luiza – Total Credit Card Base(‘000)
34
2,2712,642
2Q10 3Q10 2Q11 3Q11
PORTFOLIO (R$ million) Sep-11 Jun-11 Mar-11 Dec/10 Sep-10
Total Portfolio 3,011.7 100.0% 2,668.3 100.0% 2,424.2 100.0% 2,359.7 100.0% 1,994.9 100.0%
000 to 014 days A 2,309.5 76.7% 2,020.5 75.7% 1,771.8 73.1% 1,825.4 77.4% 1,554.3 77.9%
015 to 030 days B 80.5 2.7% 119.6 4.5% 128.1 5.3% 130.8 5.5% 88.2 4.4%
031 to 060 days C 71.6 2.4% 75.4 2.8% 76.6 3.2% 87.2 3.7% 51.2 2.6%
061 to 090 days D 73.8 2.4% 65.3 2.4% 72.4 3.0% 44.5 1.9% 38.9 2.0%
091 to 120 days E 67.8 2.3% 55.3 2.1% 83.2 3.4% 36.9 1.6% 35.3 1.8%
121 to 150 days F 53.6 1.8% 51.8 1.9% 63.3 2.6% 31.8 1.3% 32.2 1.6%
Portfolio Luizacred (R$ million)
35
151 to 180 days G 53.6 1.8% 64.6 2.4% 44.8 1.8% 29.3 1.2% 30.8 1.5%
180 to 360 days H 301.3 10.0% 215.9 8.1% 184.0 7.6% 173.7 7.4% 163.9 8.2%
Overdue up to 90 days 225.9 7.5% 260.2 9.8% 277.1 11.4% 262.6 11.1% 178.3 8.9%
Overdue above 90 days 476.3 15.8% 387.6 14.5% 375.3 15.5% 271.7 11.5% 262.3 13.1%
Total Overdue 702.2 23.3% 647.8 24.3% 652.4 26.9% 534.3 22.6% 440.6 22.1%
-100 bps