Corporate Presentation...

24
Fourth Quarter Corporate Presentation Cencosud April 2016

Transcript of Corporate Presentation...

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Fourth Quarter

Corporate Presentation

CencosudApril 2016

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Corporate Presentation | Contents | 2

• Investment Highlights

• Cencosud Snapshot

• Key Figures

• Strategy

• Corporate Governance

Contents

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• Investment Highlights

• Cencosud Snapshot

• Key Figures

• Strategy

• Corporate Governance

Contents

Corporate Presentation | Contents | 3

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Investment Highlights

Core in food retailing business, more resilient to economic downturns

Leading retailer in Latin America with the highest geographic diversification in the region

Premier brand portfolio with high consumer recognition

Committed Board of Directors and Seasoned Management Team

Opportunity to continue expanding in markets with high growth and low penetration

Corporate Presentation | Investment Highlights | 4

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Corporate Presentation | Contents | 5

• Investment Highlights

• Cencosud Snapshot

• Key Figures

• Strategy

• Corporate Governance

Contents

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73,3%

6,4%

20,3%

Retailing Areas Financial Services Real Estate

96,2%

1,5% 2,3%

Retailing Areas Financial Services Real Estate

Source: ILACAD and US Census Bureau, figures as of December 2013

Retail AreasSupermarkets , D-Stores & DYS

USD 11,329 MM

USD 2,069 MM

USD 1,481 MM

Support BusinessesShopping Centers &

Financial Services

1 Translated into USD at CLP/USD 710.162 Financial Services figures exclude Financial Services Chile.3 Revenue and Adjusted EBITDA breakdown graphs exclude segment “Others” 4 Adjusted EBITDA excluding all one-off charges of CLP 789,505 million.5 Shopping Centers figures only reflect revenues and adjusted EBITDA contributed by third party transactions.

Revenues Dec.2015

USD 15,477 MM1

Retail AreasSupermarkets, D-Stores & DYS

Support Businesses Shopping Centers &

Financial Services

Adjusted EBITDA Dec.2015

USD 1,112 MM4

USD 349 MM

USD 233 MM2

Others:

USD 16 MM3

Corporate Presentation | Cencosud Snapshot | 6

Overview by Business

USD 268 MM

76.7% mg

USD 84 MM2

36.0% mg

Others:

USD -209 MM3

USD 680 MM

6.0% mg

USD 202 MM

9.8% mg

USD 87 MM

5.8% mg

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Source: ILACAD and US Census Bureau, figures as of December 2013

Atlantic Coast

USD 2,369 MM

USD 4,592 MM

Andean Region

1 Figures for FY 2015, translated into USD at end of period exchange rate (CLP/USD 710.16). 2 Figures from Chile exclude results from the Financial Service division after the completion of the Scotiabank transaction to jointly develop the business in May 1st, 2015.3 Adjusted EBITDA excluding all one-off charges: CLP 105,038

Revenue Dec.2015 USD 15,477 MM1 Adjusted EBITDA Dec.2015 USD 1,112 MM3

USD 1,291 MM

USD 1,401 MM

USD 5,824 MM2

Corporate Presentation | Cencosud Snapshot | 7

Atlantic CoastAndean Region

• 245 Supermarkets

• 35 Home Improvement

• 79 Department Stores

• 25 Shopping Centers

• JV Scotiabank

• 286 Supermarkets

• 50 Home Improvement

• 22 Shopping Centers

• 90 Supermarkets

• 9 Department Stores

• 4 Shopping Centers

USD 48 MM

3.8% mg

USD 108 MM

7.7% mg

USD 538 MM2

9.2% mg

• 222 Supermarkets

• Atacarejo format

• 3 different regions

• JV Bradesco

• 101 Supermarkets

• 10 Home Improvement

• JV with Colpatria

USD 26 MM

1.1% mg

USD 392 MM

8.2% mg

Overview by Country

37,6%

29,7%

15,3%

9,1%

8,3%

Chile Argentina Brazil Peru Colombia

48,3%

35,3%

2,3%

9,7%

4,4%

Chile Argentina Brazil Peru Colombia

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Source: ILACAD and US Census Bureau, figures as of December 2013

3rd SUPERMARKET2nd HOME IMPROVEMENT

1st SUPERMARKETS4th DEPARTMENT STORES

2nd SUPERMARKETS2nd HOME IMPROVEMENT2nd SHOPPING CENTERS2nd DEPARTMENT STORES

4th SUPERMARKETSNORTHEAST (#2)

MINAS GERAIS (#1)RIO DE JANEIRO (#3)

2nd SUPERMARKETS1st HOME IMPROVEMENT2nd SHOPPING CENTERS

Strong Brand Portfolio

with High Consumer Recognition

Corporate Presentation | Cencosud Snapshot | 8

High and low end brands

Supermarkets

Home Improvement

Department Stores

Regional Presence / Market Position

HIGH INCOME CONSUMER

MID-TO-LOW INCOME CONSUMER

HIGH INCOME CONSUMER

MID-TO-LOW INCOME CONSUMER

95 stores

944

stores

Shopping Centers

53

Shopping Centers

FinancialServices

USD 1.812 bn Loan

Portfolio

• JV’s: Chile, Brazil &

Colombia

• Cencosud: Peru &

Argentina

88 stores

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Fourth Quarter

15.4 15.5

A Development Story

thru Organic Growth & Acquisitions

Corporate Presentation | Cencosud Snapshot | 9

Acquisitions & Revenues (USD bn)1

19821976 1988 1993 2000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20152014

OPENED THE FIRST SUPERMARKET

IPO SANTIAGO

STOCK EXCHANGE

IPO NYSE

1 Figures translated into USD at end of period exchange rate as of December 2015 (CLP/USD 710,2).

14.8

13.1

10.9

8.9

7.9

8.8

5.4

4.5

3.6

2.0

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Fourth Quarter

73%

27%

Fixed

Variable

A Development Story

thru Organic Growth & Acquisitions

Corporate Presentation | Cencosud Snapshot | 10

2,0

3,1

3,7

6,3

4,74,3

3,2

2009 2010 2011 2012 2013 2015 2014

Net Financial Debt Evolution (USD BN)1

1 Figures translated into USD at end of period exchange rate as of December 2015 (CLP/USD 710,2).2 Considers only principal amortizations and excludes banking operations.

3 Net Financial Debt / Adjusted EBITDA. 2015 ratio calculated with figures as of December. In 4Q15 Fair Value of Derivatives was reclassified from “Other gains/losses” to “Net Financial Cost” and “Income/Loss from

foreign exchange variations”. 2014’ & 2015 ratios are comparable,4 After CCS

Breakdown by Interest Rate4Breakdown by Currency4Leverage Ratio3

Amortization Schedule (USD MN)2

49%

15%

32%

1% 2% 1% CLP

UF

USD

PEN

BRL

ARS

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2045

250125

224

49

203

778

17

1,217

32

696

47 37

200

37 1476

350

2009 2010 2011 2012 2013 2014 2015 2015*

2,6 2,7

4,6

3,13,4

3,73,3

2,8

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• Investment Highlights

• Cencosud Snapshot

• Key Figures

• Strategy

• Corporate Governance

Contents

Corporate Presentation | Contents | 11

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Income Statement

Corporate Presentation | Key Figures | 12

(In millions of Chilean pesos as of December 31st, 2015)

2015 2014 ∆ % 2015 2014 ∆ %

Net revenues 3.048.854 3.014.833 1,1% 10.991.338 10.711.029 2,6%

Cost of sales -2.143.598 -2.177.047 -1,5% -7.813.226 -7.827.432 -0,2%

Gross profit 905.256 837.785 8,1% 3.178.112 2.883.597 10,2%

Gross margin 29,7% 27,8% 190 bps 28,9% 26,9% 199 bps

Selling and administrative expenses -682.708 -686.612 -0,6% -2.675.486 -2.482.777 7,8%

Other income by function 145.154 78.038 86,0% 210.521 114.438 84,0%

Other gain (Losses) -1.369 -1.648 -16,9% -63.082 -6.515 868,3%

Operating income 366.333 227.564 61,0% 650.065 508.743 27,8%

Participation in profit of equity method associates 5.296 5.730 -7,6% 14.067 8.893 58,2%

Net Financial Income -75.981 -49.025 55,0% -244.100 -173.548 40,7%

Income (loss) from foreign exchange variations -9.600 -3.657 162,5% -116.743 -24.411 378,2%

Result of indexation units -6.113 -13.207 -53,7% -22.009 -39.576 -44,4%

Non-operating income (loss) -86.398 -60.158 43,6% -368.784 -228.642 61,3%

Income before income taxes 279.935 167.405 67,2% 281.281 280.101 0,4%

Income taxes -92.400 -66.908 38,1% -58.540 -100.486 -41,7%

Profit (Loss) from continued operations 187.535 100.497 86,6% 222.740 179.615 24,0%

CONSOLIDATED INCOME DATA

Fourth Quarter

Twelve-Month, ended December

31st

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• Investment Highlights

• Cencosud Snapshot

• Key Figures

• Strategy

• Corporate Governance

Contents

Corporate Presentation | Contents | 13

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Fourth Quarter

Regional Efficiency

Measures

Short-term Roll Out

Cost Savings of 120 Bps in

SG&A/Sales

Headcount reductions

One-time severance payments

Store level service unaffected

Corporate Presentation | Strategy | 14

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Fourth Quarter

Intervention of

Underperforming

Stores

Set-up of Performance Review Committee

120 Stores Across Our Geographic Footprint

Review of Lease Agreements

Changes to Assortment

Headcount Review

Possible Closure

Corporate Presentation | Strategy | 15

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Fourth Quarter

Omni channel

Experience

Per Format Platform Development –

Leverage on Current Wallet Share –

Channel Innovation – Human Brands

– Health & Wellness

Corporate Presentation | Strategy | 16

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Fourth Quarter

Strategic Focus

On Brazil

Maneuvering Macro and Political –

Deterioration – Slow Capture of

Synergies - Margin Improvements –

Atacarejo – SG&A

Corporate Presentation | Strategy | 17

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Corporate Presentation | Contents | 18

• Investment Highlights

• Cencosud Snapshot

• Key Figures

• Strategy

• Corporate Governance

Contents

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Source: ILACAD and US Census Bureau, figures as of December 2013

2015

Corporate Presentation | Corporate Governance | 19

Ownership Structure

Ownership Structure

The direct and indirect participation of Mr. Horst Paulmann Kemna

and his immediate family in Cencosud S.A. is over 60.03%

60,0%16%

1%

23%

Controlling shareholders Chilean Pension Funds ADS Others

As of December 31, 2015 Cencosud S.A. capital was made up of

2,828,723,963 common shares held by 1.710 shareholders

Corporate Presentation | Corporate Governance | 19

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Source: ILACAD and US Census Bureau, figures as of December 2013

• Board elected on April 26th 2013 for the 2013-2016 period

• New Board to be elected in 2016’s AGM, for a period of 3 years

• Seasoned 9 Member Board:

• 3 Family members: Horst Paulmann, Peter Paulmann and

Heike Paulmann

• 2 Independent members: David Gallagher and Richard

Büchi

• Mr. Wong presented his resignation on August 26th 2015

• Board of Directors Committee:

• Roberto Philipps

• David Gallagher (Independent)

• Richard Büchi (Independent)

Corporate Presentation | Corporate Governance | 20

Board of Directors

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Corporate Presentation | Corporate Governance | 21

• Cencosud has a CSR

strategy for each business,

adapted to each country

they operate.

• Common and defined

groups of interest

• Commitments to each

stakeholder

• Programs that build

internal and external brand

value

Employees

Suppliers

Community

Environment

Customers

Corporate Social Responsibility

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Corporate Presentation | Corporate Governance | 22

Corporate Social Responsibility

ENVIRONMENT

CUSTOMERS

EMPLOYEES

SUPPLIERS

COMMUNITY

HOME

IMPROVEMENTSUPERMAKETS

DEPARTMENT

STORES

WASTE MANAGEMENT

REUSABLE BAGS

HEALTHY NUTRITION

LABOR INCLUSION

Elderly, Disability

DEVELOPMENT OF SMALL

SIZE SUPPLIERS

SEDEX

JUMBO CIRCUS

CORSO WONG

WASTE MANAGEMENT

REUSABLE BAGS

HEALTHY CONSUMPTION

LABOR INCLUSION

Quality of Life - Work

DEVELOPMENT OF SMALL

SIZE SUPPLIERS

SUSTAINABLE COLECTIONS

PARIS PARADE

WASTE MANAGEMENT

ECO EASY

LABOR INCLUSION

SEDEX

“LEVANTEMOS CHILE”

CHALLENGE, A roof for my

country

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The information contained herein has been prepared by Cencosud S.A.

(“Cencosud”) solely for informational purposes and is not to be construed as a

solicitation or an offer to buy or sell any securities and should not be treated as

giving investment or other advice. No representation or warranty, either express or

implied, is provided in relation to the accuracy, completeness or reliability of the

information contained herein. Any opinions expressed in this presentation are subject

to change without notice and Cencosud is under no obligation to update or keep

current the information contained herein. The information contained herein does not

purport to be complete and is qualified in its entirety by reference to more detailed

information included in the preliminary offering memorandum. Cencosud and its

respective affiliates, agents, directors, partners and employees accept no liability

whatsoever for any loss or damage of any kind arising out of the use of all or any

part of this material.

This presentation may contain statements that are forward-looking subject to risks

and uncertainties and factors, which are based on current expectations and

projections about future events and trends that may affect Cencosud’ s business.

You are cautioned that any such forward-looking statements are not guarantees of

future performance. Several factors may adversely affect the estimates and

assumptions on which these forward-looking statements are based, many of which

are beyond our control.

Corporate Presentation | Disclaimer | 23

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24

Marisol Fernández León

IR Manager

Phone +562 2959 0545

[email protected]

Natalia Nacif

Senior IR Analyst

Phone +562 2959 0368

[email protected]

Corporate Presentation | IR Contact Information |

Upcoming Events

Cencosud announces First Quarter

2016 Results Schedule

Wednesday, May 25

1Q16 Earnings Conference Call

Thursday, May 26

Southern Cone & Andean

Opportunities Conference

Buenos Aires, Argentina, May 11-12

11th. Annual J.P. Morgan Global

Consumer and Retail Conference

London, May 17-18

Valentina Klein

IR Analyst

Phone +562 2200 4305

[email protected]