Retail Financing Divisions2.q4cdn.com/740885614/files/doc_presentations/2014/... · 2016-02-11 ·...
Transcript of Retail Financing Divisions2.q4cdn.com/740885614/files/doc_presentations/2014/... · 2016-02-11 ·...
Retail Financing Division
Cencosud Day
September 2014
Our Vision of Cencosud Retail Financing
To be recognized as the retail financing company that provides the best customer experience in Latin America, strategically supporting attainment of retail objectives and achieving high profitability, with a global perspective of Cencosud.
Vision
Brazil
Argentina Chile
Colombia
Peru • Supermarkets
• Department Stores
• Shopping Centers
• Retail Financing
• Supermarkets
• Home Improvement
• Department Stores
• Shopping Centers
• Retail Financing
• Supermarkets
• Home Improvement
• Shopping Centers
• Retail Financing
• Supermarkets
• Retail Financing
• Supermarkets
• Home Improvement
• Retail Financing
Retail Financing at Cencosud
... we have more than 300 million
potential customers
17MN
30 MN
41MN
199 MN
335 MN
Total
48 MN
... if we look at it by family
(No. of households)
96 MN
Total
11 MN
60 MN
12 MN
7 MN
5 MN
... we are currently only reaching 1 out of
every 17 of these households
10%
2%
39%
7%
6%
Total
6%
RETAIL BUSINESSES
Products that Customers Need:
• Food • Clothing • Housewares • Construction materials • Other
Other Customer Needs:
• Financing
• Insurance • Travel and Entertainment • Internet, Catalogs, etc.
Getting to Know the Customer:
• Customer Loyalty Program
• Segmentation
• Identification of new needs
Business Model
Maximizing the potential of the retail financing
business requires expanding the product portfolio…
Base offer Store charge card, for store use only
- Connection with customers - Access to Cencosud products - Deepening customer relationships
Evolution of Retail Financing
Evolution of the offer Store charge card, accepted at partner retailers Insurance Consumer loans / "Super" cash advances Credit cards (Visa/MasterCard) Store gift cards Cash advances
Comprehensive financial solution for our customers Retail banking Deposits and investments
1
2
3
We must expand our financial product offer…
Size of the Customer Portfolio
Base Offer Evolution of the Offer Comprehensive Financial Solution for our Customers
Customers seek suppliers with a wider offer of financial products
Customers seek comfort and simplicity in financial products
"One-stop shopping"
Time
1
2
3
Time
Base Offer Evolution of the Offer Comprehensive Financial Solution
Store charge card, for store use only
Cash advances Insurance Store charge card, can be used at partner retailers Consumer loans Credit cards (Visa/MasterCard) Gift cards
Retail banking Deposits and investments
Customers seek suppliers with a wider offer of financial products Customer seeks comfort
and simplicity "One-stop shopping"
Products:
Evolution of the Retail Financing Business
Our business is at a different stage in each country; optimizing it means pushing it to the next level.
Retail Financing Today
Cards associated with each of the retailers / Visa and MasterCard
Store charge card
/ Visa and MasterCard
Store charge
card
/ Visa (Br)
JV with
Bradesco
.
Store Charge
Card
/ Visa
JV with
Colpatria
Cencosud-owned
Insurance Brokerage
Banco Paris
CREDIT/ CHARGE CARDS
BANKING
INSURANCE
Store charge
card / Accepted at Cencosud
retailers
Banco Cencosud
Third-party (SOAT)
Insurance Distributor
Insurance Distributor
Insurance Distributor
Purchases and
payment in our retail locations
Purchases at partner
companies
Access to money
Accepted at our retailers: Jumbo,
Sisa, Easy, Johnson and Paris
Cash advances (3-36 months) and "Super"
cash advances (12-48 months) at retail
checkouts and ATMs
Customer loyalty
program
Cencosud Points Program
Redeemable in-store. Every purchase earns
points.
Gas stations, pharmacies,
telecommunications, health, education,
entertainment, travel, etc.
Accepted at: Wong, Paris and
Metro
Partnered with Visa and MasterCard
Cash advances and "Super" cash advances at
retail checkouts
Bonus program. Redeemable at
select locations.
Accepted at our retailers: Jumbo, Easy, VEA, Disco and Blainstein
LAN Airlines, entertainment partnered with
MasterCard
Jumbo Program
Accepted at: GBarbosa and
Bretas
Cash advances (only at Bretas)
No customer loyalty program
NO
Accepted at: Jumbo, Metro
and Easy
Partnered with Visa
ATM-only cash advances for co-branded
cards
Colpatria Points
Program
Partnered with Visa (Bretas)
Credit Card Features
Products
Payment protection
Unemployment
Theft or fraud
Accidents (health)
Auto
Home
Extended warranty
Sales Channels Service Centers
Account Statements Telemarketing
Stands Retail Stores
Insurance Features
State-of-the-art Technology: - Authorizations - Up time - Scoring
Low-cost Processes
Critical Mass
Business Analysis
Segmen-
tation & Models
Credit Discipline
Optimum Service
Quality
First-rate Human Resources
Business Characteristics
Insurance Brokerage Corredora de Seguros París
Low Cost
Critical Mass
Efficient Channels
Business Analysis
Segmen-
tation
Prestigious Insurance Company
Reasonable Prices
Credit and Charge Cards
Insurance
Model of Business Processes
Function
Prospect Management
Product Management
Order Processing
Attracting Customers
Card Sales
Sales Campaign
Management
Sales
360-degree View of Customer
Historic Record of Contacts
Status Inquiry
Operations Support Processes
Handling Inquiries
Suggestions and Complaints
Requests to Close Accounts
Theft/Loss Reports
Charge Disputes
Updating Data
Customer Service
Prevention of Default Early Default Management
Recovery
Agency Management
Mgt. of Default Segments
Mgt. of Payment Promises
Mgt. of Collections Campaigns
Renegotiations
Collections Management
One-by-one Application Entry
Closing Accounts
Adjustments
Blocking/Unblocking
Debt Refinancing
Updating Customer Information
Updating Product Information
Updating Group Information
Reconciliation of Transactions
Sending and Receiving Bundles
Document Recovery
Operations
Processing Exceptions
Report Follow-up
Complaint Follow-up
Complaints Escalated from the
Branch
Claims Management
Solutions/
Exceptional Modifications
Consumer Protection
Analysis of Disputes
Complaint Management
Charges
Payments Renegotiations
Transactions
Channels Function
Front Office
Custo
mer
Business Processes Back Office
CRM ABM for Customers
Customer Contact
Data Management
Campaign Management
Historical Data Management
CUSTOMER PROCESSES
PRODUCT PROCESSES RISK PROCESSES
SUPPORT PROCESSES
Transaction
Management
(Charges, Payments
and Adjustments)
Payments to Customers
Payments to Businesses
Issuance of Summaries
Accounting Information
Financial Trusts
Updating
Process
Embossing
Cards
Policy Management
Decision Engine (Bureau Integration)
Quota and Limit Management
Predictive Models
Fraud Prevention
Case Monitoring
Identity Verification
Segmentation
Marketing Actions
Reporting
Campaign Analysis
Regulatory Bodies
Central Bank/Tax Info.
Auditing Processes
Accounting Records
Controlling and Budget
Payments to Businesses
Daily Balances
Delay and Default (days)
Accounting Interfaces
Reconciliation of
Transactions
Define Products' Parameters of
Operation
Maintenance
Admission and Scoring
Business Intelligence Administration/Accounting Processor Integration
In 2012, we launched the Cencosud Card –
a single card for the entire region.
A card with a value proposition that is
relevant, consistent and has multi-segment
appeal, while transmitting brand values.
A card that allows us to create a brand
experience that will produce a world of
enjoyment in the world of Cencosud.
It will also be the brand ambassador for the
entire region.
A Global Brand
One card for all our retailers
With the Values and Personality that Identify Us
+ + Energized and Cheerful
In touch and Empathetic Genuine and Clear
Cheerful and full of life. Active and
dynamic. Fun! Constantly doing
things and seeking benefits for
others.
Understanding, kind and friendly. Supports and
accompanies every step of the way. A
person who is always there when needed.
It is what it seems. Natural, spontaneous and current, in tune with
the times. Speaks directly, clearly and openly. Has a distinctive spirit, a
vibe, with its own distinguishing style, that make it attractive and likable.
Cheerful – Dynamic – Fun – Enjoying Life – Optimistic – In touch – Fresh
With a tone and style of communication all our own
What color identifies us?
• Recognizable graphic codes that
identify Cencosud communication
• A distinctive color: Orange
communicates energy and
cheerfulness while transmitting
optimism and vitality
• A frame that is part of the card's branding: parentheses
Branding that is Representative and Consistent
Cencosud Card
The best of retail cards +the best of bank cards
Accepted at our retail locations, other businesses and abroad (credit card)
... a shared image
... a shared image and presence
... a shared image and presence
... a shared image and presence
... a shared image and presence
Sales (in millions of US$)
2012 2013 2010 2011 2008 2009 2006 2007 2004 2005
Acquisition of A Paris
Acquisition of GBarbosa
Creation of the financial
services division
ARG
Creation of the financial services division
PERU
Creation of the financial services division BRAZIL
Regional implementation of the
Cencosud Card
Acquisition of Johnson
Acquisition of Prezunic
Acquisition of Carrefour
Creation of the financial services division
Colombia
Time
Creation of the financial services division CHILE
What has happened in the last 10 years?
US$ 5 billion
As of June 2014, sales reached US$ 2.8 billion
20132010 2011 20122004 2005 2006 2007 2008 2009
Tarjeta cerrada
Tarjeta Cencosud
Regional
Tarjeta abierta
Avances
Super Avances
Seguros
Evolution of Products
Store charge card, for store use only
Regional Cencosud
card
Credit card
Cash advances
"Super” cash advances
Insurance
Credit Card Sales (in billions of USD)
As of 2010, Cencosud-issued card sales reached US$ 3.1 billion.
Number of active cardholders as of December of each year.
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
3.6
0.2
2.0 2.3
2.9 3.0
4.2
4.6
5.4
1.8
More than 5.4 million cards in the region, establishing trust relationships with a wide variety of Cencosud customers
Active Cards
As of June 2014, the number of cards reached 5.5 million;
the number of Cencosud cards totaled 2.2 million.
Card Sales (in billions of USD)
As of 2010, Cencosud-issued card sales reached US$ 3.1 billion.
Easy Card
Card Sales (in millions of US$)
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
2.7
0.6
1.5 1.8
2.5
2.1
3.3
3.8
5.2 In 2013, RF sales exceeded US$ 5 billion.
1.2
USD 2013 average
As of June 2014, sales reached US$ 5 billion
US$ Dec. 2013: 529.45 and loans at each year-end
Loans (in millions of US$)
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
2.1
1.4
1.2
1.4
0.8
1.2
1.5
1.0
Prior to the 2009 financial crisis, loans had reached US$ 1.4 billion. Today, they are in recovery, with US$ 2.1 billion in 2013.
1.6
0.5
As of June 2014, loans reached US$ 2.3 million.
Of every 3 dollars sold at
Cencosud,
1 will be put on our cards.
We aspire to be
Cencosud's most popular payment method
10,000,000 clients using
our Cencosud cards to
purchase at our retailers.
US$1 US$1
US$1
Joint Venture Cencosud – Scotiabank
On June 20, 2014, Cencosud announced an agreement with Banco
Scotiabank to jointly manage Cencosud's financial business in Chile,
Cencosud Administradora de Tarjetas (CAT), including credit cards and
a portfolio of consumer loans through Banco Paris.
Scotiabank will pay US$ 280 million for 51% of the financial business in
Chile for a period of 15 years.
Furthermore, Scotiabank commits to financing 100% of the financial
business portfolio in Chile and future growth of up to US$ 3.0 billion.
The deal is subject to regulatory approval in Chile and Canada. It is
expected to be closed in 4Q '14.
Post-Deal Structure
Description of the Deal
Cencosud Administradora de Tarjetas
(CAT)
51% 49%
The Deal is Positive for the Company
The deal will reduce Cencosud's Total Consolidated Debt by ~US$ 1.2 billion, strengthening its financial position.
Since Scotiabank will finance growth, Cencosud will reduce its working capital requirements (currently 50% of accounts receivable and 5% of accounts payable are related to Cencosud's retail financing business).
The deal allows for greater focus on retail operations.
This deal brings the business model that is already implemented in Brazil and Colombia to Chile.
We expect a positive reaction and we maintain our HOLD recommendation
BICE Inversiones June 2014
Positive on Scotiabank deal; upgrade to Buy and increase Target Price
CITI June 2014
Deal With Scotiabank Decreases Risks Of a Ratings Downgrade. Move To OW From Neutral
JP Morgan June 2014
Deal to reduce leverage (maintain investment grade) and release future cash flow to accelerate growth LARRAIN VIAL
June 2014
Cencosud's Credit Card Joint Venture in Chile Positive to Credit Quality
Fitch Ratings June 2014
Retail Financing Division
Cencosud Day
September 2014