Post on 08-Aug-2020
SONAE SGPS
MANAGEMENT PRESENTATION
October 2007
# 1
AGENDA
Sonae SGPS: Who we are1
Business units overview
Challenges going forward
2
3 Financial results
4
Sonae SGPS: Who we are
Sonae SGPS controls and actively manages a portfolio of companies, by:
� setting strategic guidelines and objectives together with management teams;
� monitoring and driving performance;
� supporting joint value creation initiatives;
� identifying new business opportunities.
# 3
Mission
Mission
Each of the businesses is run by a fully dedicated management team that develops independent strategies focused on its own key value-adding drivers.
Organization
Organization
CORPORATE PROFILESONAE SGPS
BUSINESS PORTFOLIOSONAE SGPS
50%50%
SONAE SGPSSONAE SGPS
50.1%50.1%
SonaeSonaeccomom
100100%%
Sonae DistribuiSonae Distribuiççãoão
100%100%
# 4
Sonae Sonae SierraSierra SonaeSonae CapitalCapital
Market leader
in food retail and
various non food
retail markets
Market leader
in shopping centre
development ,
ownership and
management
Leading integrated
alternative telecom
provider
(Mobile & fixed)
Complementary
businesses to the
group or able to
become a
reference in their
markets
FOOD & NON FOODRETAIL
SHOPPING CENTRES TELECOMMUNICATIONS SERVICES
Listed since June
2000
Spin-off in December
2007
SONAE SGPS TRACK RECORD
Total shareholder return:Total shareholder return:
19%
24%
10%
23%
46%
9%
9%
8%
34%
11%
yearsyears
1155
1010
1515
2020
SonaePSI 20
� No capital calls since 2000;
� Spin off Sonae Indústria (2005);
� Spin off Sonae Capital (2008);
� Consistently delivering above
average shareholder return for
more than 20 years
# 5
Reference date: Dec 06
TRACK RECORDSONAE SGPS
Long term perspectiveLong term Long term perspectiveperspective FlexibilityFlexibilityFlexibility EntrepreneurshipEntrepreneurshipEntrepreneurship
� Acquisitions of Tafisa and
Glunz;
� Expansion to Brazil (retail,
wood industry and Shopping
Centres);
� Rapid expansion of Sonae
Sierra in Europe;
� Tender offer for Portugal
Telecom.
� Joint-venture approach:
� Promodés;
� Grosvenor;
� France Télécom.
� Prompt change in strategy in
response to changes in the
environment:
� Divestment from Brazil
(Retail);
� Acquisitions at
Sonaecom.
� Intrinsic to the Sonae Culture
and sponsored by the Group
Chairman;
� Continuous search for new
business opportunities:
� New retail formats;
� Expansion of business
frontiers at Sonaecom;
� Portfolio development
by Sonae Capital.
Sonae SGPS structure, organization, and tasks at the corporate level create
and enhance value of its portfolio of companies
# 6
Business units overview
distribuiçãosonae
SONAE DISTRIBUISONAE DISTRIBUIÇÇÃOÃO
BUSINESS PORTFOLIO
NonNon--FoodFood RetailRetailFood RetailFood Retail
Hypermarkets
Supermarkets
HypermarketsConsumer Elect.
Apparel
Sports Goods
Computers
DIY
Travel Agencies
SONAE DISTRIBUIÇÃO
# 9
+ 4 format start+ 4 format start--ups over the last 4 yearsups over the last 4 years
STRATEGIC GUIDELINES
# 10
SONAE DISTRIBUIÇÃO
� Growth, both organic and through acquisition opportunities;
� Develop and fine-tune recently launched concepts;
� Launch new concepts in Portugal, leveraging on all synergies available;
� Expansion of current businesses to new geographical areas (Spanish market).
� Continuous fine tune of the organizational model, information systems and
internal procedures;
� Best practices approach encompassing continuous investment in efficiency
and innovation
� Develop the competitive advantage on the relationship with customer
through a value proposal based on innovation
Growth
Growth
Efficiency
Efficiency
Innovation
Innovation
KEY FACTSSONAE
3.1 Bn€2006 turnover
(205,000 articles in portfolio)
3.1 Bn€2006 turnover
(205,000 articles in portfolio)
~565,000sqm sales area
(in 517 stores)
~565,000sqm sales area
(in 517 stores)
No.1 retailerin Portugal
(with food and non food retail)
No.1 retailerin Portugal
(with food and non food retail)
~ 1.1 Bn€Real Estate Book Value
(77% of own sales area
generating 80% of sales)
~ 1.1 Bn€Real Estate Book Value
(77% of own sales area
generating 80% of sales)
~25,000employees
~25,000employees
254 Mn€2006 EBITDA
254 Mn€2006 EBITDA
DISTRIBUIÇÃO
CONSOLIDATED FIGURESSONAE DISTRIBUIÇÃO
EBITDA (M.€)
Sales Area (‘000 sqm) Number of Stores
# 12
Turnover (M.€)
POC IFRS POC IFRS
195
158
242
254
235233252
2002 2003 2004 2005 2006 9M07
535480
335
282270258
2002 2003 2004 2005 2006 9M07
574543495
433427415
2002 2003 2004 2005 2006 9M07
2,197
2,394
3,091
2,7452,6212,5762,474
2002 2003 2004 2005 2006 9M07
9M06
# 13
SONAE CORPORATE DEVELOPMENTS
3Q07:Acquisition of Carrefour’s hypermarket operations in Portugal (subject to approval by the competition authority).
� Strengthen leadership in the Portuguese food retail market;
� Immediate increase installed sales area by 17%;
� Modern retail market share increase of 4pp (from 30% to 34%);
� Year on year turnover growth of more than 16%;
� Higher competitiveness in international sourcing;
� Logistics and marketing fixed costs dilution.
Sonae SGPS feels confident in the approval of the operation by the competition authority,
even at the expenses of diverting some stores to non-food formats
Value accretiveValue accretiveValue accretive
DISTRIBUIÇÃO
sonae sierra
SONAE SIERRASONAE SIERRA
BUSINESS PORTFOLIOSONAE SIERRA
Shopping CentresShopping Centres
Sierra developmentSierra development Sierra managementSierra management Sierra BrazilSierra Brazil
� Owns Sonae Sierra’s
assets – shopping
centres and retail
parks;
� 51% control of Sierra
investment property
fund;
� Asset management
services.
� Responsible for
development of
shopping centres;
� Role of overseeing the
procurement and
design process.
� Responsible for day to
day management of
shopping centres
(property
management);
� Operational
management of
Sierra’s assets and
others owned by third
parties.
� Similar business
structure in Brazil;
� Fully dedicated local
management team and
partnership with DDR
(Developers Diversified
Realty).
Sierra investmentSierra investment
# 15
STRATEGIC GUIDELINESSONAE SIERRA
# 16
Growth
Growth
International
International
expansion
expansion
Partnership
Partnership
approach
approach
� Increase shareholder value through developing, owning or co-owning and
managing Shopping Centres;
� Be the best international Shopping Centre specialist
� Expand presence to new geographical areas.
� Reinforce presence on a specific number of markets to become a local key
player (Portugal, Spain, Italy, Germany, Greece, Romania and Brazil).
� Maintain a partnership approach and establish joint-ventures with national and
international partners.
KEY FACTSSONAE SIERRA
# 17
150 M€2006 Net Operating Income
150 M€2006 Net Operating Income
~5.4 Bn€2006 Market value of investments
1.5 Bn€2006 Net Asset Value
~5.4 Bn€2006 Market value of investments
1.5 Bn€2006 Net Asset Value
International Shopping centre
specialist
International Shopping centre
specialist
~ 2M sqmTotal managed Gross Lettable Area
(GLA) in Portugal(900K),
Spain(585K), Italy(135K),
Brazil(321K), Germany(96),
Greece(46K) and
Romania(12)
~ 2M sqmTotal managed Gross Lettable Area
(GLA) in Portugal(900K),
Spain(585K), Italy(135K),
Brazil(321K), Germany(96),
Greece(46K) and
Romania(12)
46Shopping centres co-owned
1.8M sqmTotal owned/co-owned Gross
Lettable Area (GLA)
46Shopping centres co-owned
1.8M sqmTotal owned/co-owned Gross
Lettable Area (GLA)
461K sqmTotal Gross Lettable Area (GLA)
under development in
Spain(113K), Italy(107K),
Portugal(77K), Brazil(43K),
Greece(62K)
and Germany(60K)
461K sqmTotal Gross Lettable Area (GLA)
under development in
Spain(113K), Italy(107K),
Portugal(77K), Brazil(43K),
Greece(62K)
and Germany(60K)
12
1413
ROMANIAROMANIA
ITALYITALY
PORTUGALPORTUGAL SPAINSPAIN
GREECEGREECE
BRAZILBRAZIL
GERMANYGERMANY
CONSOLIDATED FIGURESSONAE SIERRA
# 189M06
Net Profit (M.€)
155
207
271
219
127
249
149
2002 2003 2004 2005 2006 9M07
EBITDA (M.€)
105
112
150
126
1089895.5
2002 2003 2004 2005 2006 9M07
Market Value of Investments (M.€) NAV per Share (€)49.75
45.82
38.90
32.6029.1627.67
'12/02 '12/03 '12/04 '12/05 '12/06 '09/07
4,728
4,096
3,3412,868
2,561
3,439
2,7452,498
1,9071,5891,471
'12/02 '12/03 '12/04 '12/05 '12/06 '09/07
Total Value Sonae Sierra (control)
5,840
# 19
CORPORATE DEVELOPMENTSSIERRASONAE
Acquisitions
Openings
� Sierra Investments acquired first property in Romania (River Plaza
Mall);
� Sierra Investments acquired, in a 50/50 partnership, the shopping
centre Modelo Albufeira and Continente Portimão (Algarve,
Portugal);
� Sierra Brazil acquired 5% of shopping Tivoli (S. Paulo), raising
position to 30%;
� Sierra Brazil acquired 73% of Metrópole shopping (S.Paulo, Brazil),
raising position to 83%;
� Sonae Brazil acquired 10% of Plaza Sul Shopping (S. Paulo),
raising position to 30%.
� July 07: Lima Retail Park (Viana do Castelo, Portugal)
� September 07: Alexa (Berlin, Germany);
� September: 8ª avenida (São João da Madeira, Portugal).
comsonae
BUSINESS PORTFOLIOCOM
SONAECOMSONAECOM
99%99%
SSI (1)
100%100%
(1) Software and Systems Information
SONAE
100%100%100%100%
Telco MobTelco Mobileile
� #3 mobile Operator;
� Mobile communications
in Portugal: traditional
voice; data; range of
mobile solutions;
wholesale services;
� Innovative convergent
fixed-mobile products
(Home; Kanguru).
Telco FixedTelco Fixed MediaMedia SSI SSI (1)(1)
� Leading altnet
operator in Portugal;
� Voice and internet
services to residential,
SME and corporate
client bases; voice,
data capacity and
connectivity services to
telco operators
worldwide.
� Reference newspaper
in Portugal;
� #3 in paid circulation;
� #3 in advertising.
� Information system
and Technology
products provider;
� IT/IS Consultancy.
# 21
SONAE COM STRATEGIC GUIDELINES
# 22
Organic
Organic
Growth
Growth
Non
Non-- organic
organic
Growth
Growth
Integrated
Integrated
strategy
strategy
� Extension of addressable market: Mobile-fixed convergence; wireless internet
access;
� Expand network coverage and capacity: full scale UMTS and HSDPA network;.
� Increase direct access broadband services;
� Lead innovation in the broadband market;
� Improve customer experience.
� Continuous focus on integrated strategy;
� Pursue productivity gains and financial and capital structure efficiencies.
� Consider acquisition opportunities for both telecoms businesses and SSI division
SONAE COM KEY FACTS
OPTIMUSOPTIMUSSONAECOM SONAECOM
FIXEDFIXED MEDIAMEDIA SSISSI
20% MS at end 9M07, with
2.8 million subscribers
+12% Active customers (EOPs) at
end 9M07 compared to
9M06
17.1%Data as % Service
Revenues at end 9M07 , a
growth of 3.3pp compared to
9M06
15% MS at the end of 9M07, with
472K direct services
59.1% of customer base at end
9M07 represented by direct
services
798.5 KTotal direct + indirect
services by end 9M07
12.7% MS of paid circulation at end
2Q07, ranking third in the
market
14.0% MS of advertising from January-
August 2007
#1 worldwide player
in Revenue Assurance
36 Countries where Wedo has
a footprint (after acquisition
of Cape)
~370employees, with main offices
in Portugal, Ireland, Brazil
and Poland
43 K of average paid circulation at
end 9M07
# 23
124*
121
72
146
201184
157
2002 2003 2004 2005 2006 1H07
836
644
789838
880843
610*
2002 2003 2004 2005 2006 9M07
SONAE COM
EBITDA (M.€)
FCF (M.€) CAPEX (M.€)
# 24
Turnover (M.€)
CONSOLIDATED FIGURES
159
122123127
141
2002 2003 2004 2005 2006 9M07
* Excluding Enabler’s contribution in the 1H06 and the 25 M.€ capital gain. 9M06
199.1
254
-55
35
62
13
-114.8
-81.7
2002 2003 2004 2005 2006 9M07
# 25
SONAE COM CORPORATE DEVELOPMENTS
� Strengthen growth in Direct Access and dilution of fixed costs;
� Opportunity to up-sell: Indirect to Direct; Low-end 2Play to higher
value offers; IPTV
� Direct services grow by 45% to 448.6K services;
� Broadband market share increases to approximately 15%;
� Fixed telephony market share increases to approximately 22%
(including Optimus Home)
Value accretiveValue accretiveValue accretive
� Consolidation and clear number 1 player in the international
Revenue Assurance arena (WeDo)
2Q07: Acquisition of Oni’s residential and SOHO
customer base; Acquisition of Tele2 Portugal
Sonaecom FixedSonaecom Fixed
2Q07/3Q07: Acquisition of Tecnológica; Acquisition of Cape
technologies
SSISSI
Financial results
1,999
6,276 6,260 6,464 6,392
4,384
2,137
2002 2003 2004 2005 2006 9M07
TURNOVERSONAE SGPS Million euro
* Excluding the contributions of Sonae Indústria and Sonae Distribuição Brasil, the investment income generated on the sale of the shareholding in
Imocapital/Gescartão, and considering the change in the method of consolidating Sonae Sierra from full to proportionate (50%).
9M07
2,203
7
322
109
624
(81)
2,394
113
644
313
(85)
14.7Holding
Sonae Capital
Telecom.
ShoppingCentres
Retail
POC IFRS
# 27
Eliminations
ContributionContribution to to consolidatedconsolidated
+5.9%+5.9%+5.9%
416
508
599
948938
637649
2002 2003 2004 2005 2006 9M07
EBITDA SONAE SGPS Million euro
# 28
158
(3)
10
126
132
197
169
128
21
(2)
(3)Holding
Sonae Capital
Telecom.
ShoppingCentres
Retail
POC IFRS Eliminations
* Excluding the contributions of Sonae Indústria and Sonae Distribuição Brasil, the investment income generated on the sale of the shareholding in
Imocapital/Gescartão, and considering the change in the method of consolidating Sonae Sierra from full to proportionate (50%).
ContributionContribution to to consolidatedconsolidated
+22%+22%+22%
9M07
GROSS INVESTMENTSONAE SGPS Million euro
# 29
121
276
148*
45
(34)**
223
Retail Portugal Shopping Centres Telecom. Sonae Capital Holding and Others 30-Sep-07
*Impacted by the disposal of PT shares (112 M.€).
**sale of non Strategic Assets (including sawmills and real estate management company)
September 2007
NET DEBTSONAE SGPS Million euro
# 30
2,466
2,063
1,6201,913 *
2,822
2004 2005 2006 9M07
* Excluding the contributions of Sonae Indústria and Sonae Distribuição Brasil, the investment income generated on the sale of the shareholding in
Imocapital/Gescartão, and considering the change in the method of consolidating Sonae Sierra from full to proportionate (50%).
142
337
377
477
731
564
747
314
591
251
Holding
Sonae Capital
Telecom.
ShoppingCentres
Retail
31 December 2006
NetNet DebtDebt//AnnualizedAnnualized EBITDAEBITDA NetNet GearingGearing(Net Debt/ShFunds+Minority interests)
+19.6%+19.6%+19.6%
30 September 2007
125%
106%
122%
134%
2004 2005 2006 9M07
3.4 x
2.8 x
3.4 x 3.6 x
2004 2005 2006 9M07
ContributionContribution to to consolidatedconsolidated
NET DEBT – STAND ALONE BASISSONAE SGPS Million euro
# 31
The adequacy of the capital structure in each business of its portfolio can be summarised, as follows:
(a) In this business, the ratio Asset Gearing (measured as net debt less cash and equivalents as a percentage of total assets) is currently
used (36.5% as at 30 September 2007).
* EBITDA for the last 12 months.
Sonae SGPS
591Net Debt:
1.9Net Debt/ EBITDA*:
291EBITDA*:
564Net Debt:
SonaeCapital
Sonae Distribuição SonaecomSonaeSierra (a)
9.4Net Debt/ EBITDA*:
161EBITDA*:
1,509Net Debt:
2.0Net Debt/ EBITDA*:
154EBITDA*:
313Net Debt:
8.1Net Debt/ EBITDA*:
31EBITDA*:
251Net Debt: