Earnings Presentation Q2 14

Transcription

1 Earnings Presentation Q2 14 August 13, 2014

2 This material was prepared solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities. This presentation may include forward-looking statements or statements about events or circumstances which have not yet occurred. We have based these forward-looking statements largely on our current beliefs and expectations about future events and financial trends affecting our businesses and our future financial performance. These forward-looking statements are subject to risk, uncertainties and assumptions, including, among other things, general economic, political and business conditions, both in Peru and in Latin America as a whole. The words believes, may, will, estimates, continues, anticipates, intends, expects, and similar words are intended to identify forward-looking statements. We undertake no obligations to update or revise any forward-looking statements because of new information, future events or other factors. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this presentation might not occur. Therefore, our actual results could differ substantially from those anticipated in our forward-looking statements. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. It should not be regarded by recipients as a substitute for the exercise of their own judgment. We and our affiliates, agents, directors, employees and advisors 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 material does not give and should not be treated as giving investment advice. You should consult with your own legal, regulatory, tax, business, investment, financial and accounting advisers to the extent that you deem it necessary, and make your own investment, hedging and trading decision based upon your own judgment and advice from such advisers as you deem necessary and not upon any information in this material. 2

3 AGENDA 01 Q2 14 Highlights 02 Q2 14 Financial Results by Segment 03 Recent Event: Senior Notes Issuance

4 01 Q2 14 Highlights

5 01 Q2 14 Highlights Opened Real Plaza Salaverry shopping mall on time and budget (+ 72k sqm of GLA) Opened 2 supermarkets in Lima (San Isidro and Salaverry), expanded one supermarket, and closed 2 legacy format Economax stores (+8,250 new sqm of sales area, +4,782 sqm of sales area net of closings) Remodeled and improved layouts on 3 supermarkets Opened 23 pharmacies (3 stores in Lima / 20 in provinces); successfully launched marketing campaigns of new high margin products in Pharmacies segment Accelerated same-store-sales growth in both Supermarkets and Pharmacies segments 5

6 Q2 14 Consolidated Consolidated Results Results Million Soles (S/. mm) Million Soles (S/. mm) 15.9% growth in Revenues Q2 14 Highlights Revenues 2 supermarkets opened 23 pharmacies added to the network +74k sqm of additional GLA of shopping malls (opening of Real Plaza Salaverry and expansions) +5.2% SSS in Supermarkets, +10.8% SSS in Pharmacies 29.2% growth in Adj. EBITDA Net Income for Q2 14 was S/.56 million; Excluding Forex and mark-to-market, Net Income increased 215.7% Adj. EBITDA 2,865 2,491 1,258 1,459 Q2'13 Q2'14 YTD'13 YTD'14 Net Income Q2'13 Q2'14 YTD'13 YTD'14 Margin 8.0% 9.0% 8.2% 8.7% Q2'13 Q2'14 YTD'13 YTD'14 Margin -4.3% 3.9% -1.6% 3.1% 6

7 02 Q2 14 Financial Results by Segment

8 Revenues Consolidated Growth Results of 15.9% vs Q2 13 Million Soles (S/. mm) Million Soles (S/. mm) Revenues Q2'14 Var% Q2'13 YTD'14 Var% YTD'13 Supermarkets % 1, % Pharmacies % % Shopping Centers % % Eliminations % % Total revenues 1, % 2, % Supermarkets +12.8% vs. Q2 13; +12.0% vs. YTD 13 Q2 14 SSS: +5.2%; YTD 14 SSS: +5.0% 4,782 sqm of additional sales area in Q2 14, 10 new stores since Q2 13 (+11.7%, 26,616 sqm), total 98 stores (253,391 sqm) Pharmacies +16.6% vs. Q2 13; +16.6% vs. YTD 13 Q2 14 SSS: +10.8%; YTD 14 SSS: +10.1% 23 pharmacies added to the network in Q2 14, 118 pharmacies since Q2 13 (+18.6%), total 754 stores LTM Q2 14 Revenues Breakdown Shopping Centers 4.6% +60.1% vs. Q2 13; +50.2% vs. YTD 13 Pharmacies 34.2% Shopping Malls Opening of Real Plaza Salaverry and expansion of one shopping mall (74k sqm) in Q2 14, 180k sqm of additional GLA since Q2 13 (+56.5%), total 499k sqm (558k sqm including related parties ) Supermarkets 61.2% 8

9 02 Quarterly Openings and SSS by Segment Openings Same Store Sales Supermarkets Sales Area ( 000 sqm) Supermarkets 4.8% 5.2% % 2.4% Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 N Stores Pharmacies N Stores % -2.1% Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2' Pharmacies 10.8% 9.3% Shopping Malls GLA ( 000 sqm) Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2' % 6.9% % Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14-1.1% Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 9

10 02 Adjusted EBITDA Growth of 29.2% vs Q2 13 Million Soles (S/. mm) Adj. EBITDA Q2'14 %Rev Var% Var% YTD'14 %Rev Q2'13 YTD'13 Adj. EBITDA: Supermarkets % 3.5% % 13.1% Pharmacies % 27.0% % 20.1% Shopping Centers % 76.5% % 56.1% Eliminations and holding % % Total Adj. EBITDA % 29.2% % 21.0% Supermarkets +3.5% vs. Q2 13; +13.1% vs. YTD 13 EBITDA Mg. 5.0% vs. 5.4% in Q2 13; 5.6% YTD 14 in line with YTD % vs Q2 13, that includes S/.20 mm paid by Tarjeta Oh! as entry fee, due to higher commercial and logistic contribution from suppliers and store efficiencies Pharmacies +27.0% vs. Q2 13; +20.1% vs. YTD 13 EBITDA Mg. 8.9% vs. 8.2% in Q2 13; 8.5% YTD 14 vs. 8.2% YTD 13 Higher gross margin due to an increase in penetration of high margin products compensated higher logistic and warehousing expenses, and higher operating expenses due to new stores in early stage of operation LTM Q2 14 Adj. EBITDA Breakdown Shopping Centers 26.9% +76.5% vs. Q2 13; +56.1% vs. YTD 13 Shopping Malls EBITDA Mg. 53.8% vs. 48.8% in Q2 13; 54.3% YTD 14 vs. 52.3% YTD 13 Higher margin driven by an increase in revenues and dilution of fixed costs despite higher pre-operational expenses related to the opening of Real Plaza Salaverry Pharmacies 31.6% Supermarkets 41.5% 10

11 02 Adjusted EBITDA Evolution Million Soles (S/. mm) InRetail Consolidated Supermarkets Q1 Q2 Q3 Q Q1 Q2 Q3 Q Pharmacies Shopping Malls Q1 Q2 Q3 Q Q1 Q2 Q3 Q

12 02 Consolidated Net Income Q2 14 vs Q2 13 Million Soles (S/. mm) Excl. Forex and Mark-to-Market, Net Income Increased of 215.7% vs Q2 13 Net Income: Consolidated Net Income of S/. 56 million in Q2 14, compared to a loss of S/. 54 million in Q2 13. Excluding forex and gain in fair value of investment properties, Net Income increased 215.7% in Q2 14 due to: Higher operating profit Lower financial expenses and higher financial income Net Margin Q2'13 Q2'14 YTD'13 YTD'14-4.3% 3.9% Net Income excluding after-tax forex and mark-to-market gains: % % 67 Foreign exchange effects: Exchange gain of S/. 7.1 million in Q2 14 vs. loss of S/ million in Q2 13 Exchange gain of S/. 1.0 million YTD 14 vs. loss of S/ million YTD 13 Higher increase in fair value of investment properties: Mark-to-market gain of S/ million in Q2 14 vs. S/. 0.8 million in Q2 13 Mark-to-market gain of S/ million YTD 14 vs. S/. 2.7 million YTD 13 Net Margin Q2'13 Q2'14 YTD'13 YTD'14 1.0% 2.7% 1.6% 2.3% 12

13 02 Consolidated Capex and Financial Debt Million Soles (S/. mm) Capex Financial Debt Total Capex 2013: S/. 1,034 mm 370 Debt / EBITDA Net Debt / EBITDA x x 4.0x 3.6x 3.6x 3.5x 2.9x 3.2x 3.1x 1.3x Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2' LTM Q1'14 LTM Q2'14 Debt 1,561 1,668 1,722 1,773 1,827 Cash 353 1, Net Debt 1, ,398 1,580 1,627 13

14 02 Debt by Segments As of June 30 th, 2014 Total Consolidated Debt: S/. 1,827 mm Debt / EBITDA: 3.5x Net Debt / EBITDA: 3.1x Retail Segments & Holding Co. 1/ Shopping Malls Segment Q2'14 Debt 1,111 Cash % Net Debt 974 EBITDA LTM Jun' Debt/EBITDA 2.9x Net Debt/EBITDA 2.5x Q2'14 Debt 716 Cash 63 Net Debt 653 EBITDA LTM Jun' Debt/EBITDA 5.0x Net Debt/EBITDA 4.6x 1/ The retail segments and the holding company (excluding shopping malls segment) represent restricted subsidiaries for purposes of the Intercorp Retail US$ 300 MM 8.875% Senior Guaranteed Notes due 2018, which, together with the US$ 29.1 MM debt (as of June 30 th, 2014) of our parent company, Intercorp Retail, comprise the total restricted group debt. 14

15 03 Recent Event: Senior Notes Issuance

16 03 InRetail Shopping Malls Recently Issued Two Bonds Issuer InRetail Shopping Malls Size US$ 350 million S/.141 million Format 144A / Reg. S Reg. S Coupon 6.500% 7.875% Structure 7NC4 Final: July 9 th 2021; 1 st Call Date: July 9 tth 2018 Senior Unsecured Notes 20 year, Amortization starting in 2030; Final: July 25 th 2034 Issue Ratings Ba2 (stable) by Moody s/ BB (stable) by Fitch Use of Proceeds / Impact i. Refinance US$ 180 million of Interproperties Holding Notes ii. Reduce cost of finance iii. Have a lighter amortization schedule, freeing up cash iv. Acquire a real estate property named Puruchuco, for the future development of a shopping mall (expected GLA of 110k sqm to be opened in 2016) v. Finance expansion of other shopping malls i. Refinance S/. 141 million of financial obligations ii. Reduce cost of finance iii. Have a lighter amortization schedule, freeing up cash 17

17 03 Issuance Structure Downstream Guarantee Panama Peru Issuer New Senior Notes: US$ 350 MM S/. 141 MM Upstream Guarantee Debt: Real Estate Trusts Leasings & Other debt: S/. 79 MM (US$ 28 MM) Debt: Management Companies Upstream Guarantee Leasings & Other debt: S/. 0.5 MM (US$ 0.2 MM) 18

18 03 Pro Forma Debt As of June 30 th, 2014 Shopping Malls Segment InRetail Consolidated Current Q2'14 Adj. Pro Forma Q2'14 Current Q2'14 Adj. ProForma Q2'14 Debt ,200 Cash Net Debt 73% EBITDA LTM Jun' Debt/EBITDA 5.0x 8.4x Net Debt/EBITDA 4.6x 5.2x Debt 1, ,312 Cash Net Debt 1, ,725 EBITDA LTM Jun' Debt/EBITDA 3.5x 4.5x Net Debt/EBITDA 3.1x 3.3x Covenants: Current Q2'14 Pro Forma Q2'14 Total Debt / Total Assets (<60%) 27.3% 38.7% Secured Debt / Total Assets (<30%) 27.3% 2.1% EBITDA / Interest Expense (>1.75x) 2.3x 2.3x Unencumb. Assets / Unsecured Debt (>150%) na 185.5% 19

19 03 Strong growth without additional CAPEX Our Shopping Malls segment and InRetail Peru Corp. Consolidated LTM EBITDA figures as of June 2014, do not fully reflect the EBITDA generated in a full year by the shopping malls recently opened and under operation: Real Plaza Salaverry Real Plaza Salaverry Real Plaza Cusco Real Plaza Cajamarca Date Opened GLA As of June 14 Occupancy As of June 14 May k 88.8% 2/ December k 96.6% December k 91.7% Flagship mall opened in a prime location in Lima Real Plaza Cusco Therefore, we expect our Net Debt/EBITDA as of December 2014 to be below our December 2013 figures: First and only mall in the city Real Plaza Cajamarca Expected Net Debt / EBITDA 2014 InRetail Peru Corp < 2.9x Retail Segments & Hold.Co. < 2.4x Shopping Malls Segment < 4.6x 2/ The mall is 100% leased as of August Largest mall in the city 20

20 For more information please contact: InRetail Perú Corp. Gonzalo Rosell, Head of Corporate Finance and IRO Phone: (511) , option 1, ext August 13, 2014