CENCOSUD DAY BUENOS AIRES 2016 CONSOLIDATING OUR STRATEGY

Transcription

1 CENCOSUD DAY BUENOS AIRES 2016 CONSOLIDATING OUR STRATEGY

2 AGENDA 1. CENCOSUD INDICATORS 2. STRATEGIC THRUSTS AND PROGRESS OF THE LAST 12 MONTHS 3. VISION FOR THE FUTURE 4. OPPORTUNITIES PER COUNTRY

3 1. CENCOSUD MAIN INDICATORS

4 STRONG REGIONAL PRESENCE AND HIGH ACKNOWLEDGMENT BY CLIENTS 3 SUPERMARKETS 2 HOME IMPROVEMENT 4 SUPERMARKETS NORDESTE (#2) MINAS GERAIS (#1) RIO DE JANEIRO (#3) 137,400 Collaborators 16B P&l 1st SUPERMARKETS 4th DEPARTMENT STORES 220 MM Clients 60 MM Monthly Tickets 2 SUPERMARKETS 2 HOME IMPROVEMENT 2 MALLS 2 DEPARTMENT STORES 2 SUPERMARKETS 1 HOME IMPROVEMENT 2 MALLS 1,113 Retail stores & 53 Malls Cencosud jun Brands

5 GROWTH PER DIVISION LAST 5 YEARS jun 2010 jun 2016 / Thousand M2 GLA +70% +19% +77% Supermarkets Home Improvement Department Stores % % Malls

6 INCOME EVOLUTION (US$ MM) and Mg. EBITDA Aj (%) Income ,5% 9,4 8,3% 11,4 Income 13,8 7,1% Margin EBITDA Aj 15,3 16,2 16,6 7,2% 6,9% 6,2% Mg. EBITDA Aj 9,0% 8,5% 16,2 8,0% 7,5% 7,6% 7,0% 6,5% 0,0% LTM EBITDA Aj/m 2 (US$) Note: Data in Chilean pesos (CLP) for each year converted to the dollar as of June 2016 ($661.4) EBITDA 2016 LTM jun would be 7.1% if eliminating the effect of Marina Arauco divestiture 281

7 MAIN INDICATORS 13,8 Income (US$Bn) 15,3 16,2 16,8 16,2 Margin (% Income) 28,4% 28,7% 27,9% 28,9% 29,2% LTM Jun LTM Jun Expense (% Income) EBITDA Aj.(% Income) 23,0% 23,9% 23,5% 24,3% 24,3% 7,1% 7,2% 6,9% 6,2% 7,6% LTM Jun LTM Jun Note: Data in Chilean pesos (CLP) of each year converted to the dollar as of June 2016 ($661.4)

8 MAIN INDICATORS EBITDA (US$MM) Debt/ EBITDA Aj LTM Jun 4,6 3,4 3,7 3,3 3,2 Market Cap (US$Bn) 10,7 8,4 6,7 7,4 8, LTM Jun LTM Jun Note: Data in Chilean pesos (CLP) of each year converted to the dollar as of June 2016 ($661.4)

9 2. STRATEGIC THRUSTS AND PROGRESS DURING THE LAST 12 MONTHS

10 IN 2015 WE DEFINED OUR ROADMAP 3 STRATEGIC CORES CLIENTS TRENDS - PROFITABILITY

11 CLIENTS

12 INTERNAL CLIENT HAPPINESS AT WORK AND PRODUCTIVITY CENCOSUD DNA WE DEFINE 6 KEY COMPETENCES THAT BUILD A CULTURE 1. CLIENT IS THE FIRST IN MIND 2. INDIVIDUAL TALENT AT THE TEAM SERVICE 3. PERMANENT EVOLUTION AND CHALLENGES 4. STRONG CULTURE FOCUSED ON INDIVIDUALS 5. OWNER S MENTALITY 6. SEEKING ACCOUNTABILITY

13 INTERNAL CLIENT HAPPINESS AT WORK AND PRODUCTIVITY LEADERSHIP & TRAINING. 5,000+ LEADER S ESSENCE. 140,000+ E-LEARNING, SCHOOL SHOPS IN MOST OF FORMATS, FOCUS ON CLIENT EXPERIENCE WOMAN & TRENDS. MQDH CAMPAIGN (1,000 NOMINEES), STUDY ON MAN-WOMAN SALARY GAPS. HEALTHY FEEDING. INCLUSION POLICIES. HAPPINESS & CONFIDENCE. +19 POINTS IN 4 YEARS, 6 FLAGS IN GPTW RANKING.

14 CONSUMER FROM TRANSACTION TO EMOTION 1. PROMISES GENERATION 2. FOCUS ON EXPERIENCE AS THE CORE IDEA 3. AUTHORITY IN SIGNIFICANT CATEGORIES / AVAILABILITY 4. SPEEDY CHECK OUT 5. SPEEDY AND IMPECABLE POST SALES 6. CRM: LOYALTY PROGRAM AND KNOWLEDGE

15 TRENDS

16 SUSTAINABILITY A NEW MANNER OF BUILDING ENTREPRENEURSHIP 1. DEFINITION OF A SUSTAINABLE ENTREPRENEURSHIP POLICY AND STRATEGY FOR ALL BUSINESSES IN CHILE, PERU AND COLOMBIA 2. SUSTAINABILITY REPORTS AND CARBON FOOTPRINT MEASUREMENT 3. DIVERSITY AND INCLUSION NEW POLICY 4. CENCOSUD ENTERS DJSI 5. 3 BRANDS IN PROHUMANA CHILE 2016 RANKING

17 HEALTHY LIFE PIONEERS AND LEADERS OF HEALTHY FOOD IN THE REGION 1. WE INTEND TO TRAIN THE CONSUMER IN THE CORRECT USE OF FOOD 2. DEVELOPMENT OF FOOD TRENDS AND SPECIFIC NEEDS 3. EAT HEALTHY AND EAT FREE CAMPAIGNS BY JUMBO, LIVE HEALTHY AT WONG, HEALTHY WORLD BY JUMBO COLOMBIA 4. TEAM CHILE SPONSORSHIP 5. ORGANIC AND FUNCTIONAL FOODS

18 PURCHASE ONLINE AND WE DELIVER IT TO YOUR HOME PURCHASE AT THE STORE AND WE DELIVER IT TO YOUR HOME PURCHASE ONLINE AND WITHDRAW IT IN YOUR CAR PURCHASE BY TELEPHONE AND WE DELIVER IT TO YOUR HOME PURCHASE ONLINE AND WITHDRAW IT AT YOUR CLOSEST LOCKER PURCHASE ONLINE AND WITHDRAW IT AT YOUR JUMBO OMNICHANNEL & ECOMMERCE MAIN CHANGE TO THE MODEL 1. INVESTMENT PROJECTS / 30% TOTAL IT. 2. ECOMMERCE HIGH GROWTH RATE THROUGHOUT THE REGION 3. FULL PROCESS TO DEVELOP ASSETS, CLICK & COLLECT, DRIVE THROUGH 4. CENCOSUD CAPILLARITY AS DIFFERENTIATION CORE 5. SELECTION AS A KEY FOR BRANDING AND PURCHASE AT THE STORE 6. WE INTEND TO BECOME THE MAIN FOOD OPERATOR IN THE REGION

19 LOYALTY AND DATAMINING MAXIMIZING THE VALUE OF EACH CLIENT WITHIN THE GROUP OVER 16 MILLION CLIENTS REGISTERED IN 5 LOYALTY PROGRAMS AT EACH COUNTRY WHERE WE OPERATE

20 MOBILITY TO BE AT THE RIGHT SPOT 1. DEVELOPMENT OF NEW RESPONSIVE SITES 2. MOBILE FIRST DESIGN 3. NEW BUSINESS APPS 4. CENCO WALLET

21 PROFITABILITY

22 CORPORATE STRATEGIC PLANNING REVIEWING EACH BUSINESS ROAD AND EACH BUSINESS ROLE IN OUR PORTFOLIO ENSURING ALIGNMENT OF CAPITAL ALLOCATION WITH OUR STRATEGY THE SAME WORKING METHODOLOGY FOR THE ENTIRE ORGANIZATION

23 EFFICIENCY & PRODUCTIVITY 1. REVIEW OF STRUCTURES AND HEADCOUNT 2. ASSETS AND LANDBANK NONCORE DIVESTITURE 3. MERCHANDISE HEALTH ( AGING ) 4. ENERGY EFFICIENCY 5. NO M&A 6. SG&A GROWING BELOW INCOME 7. PRODUCTIVE PROCESSES CENTRALIZATION 8. TECHNOLOGY AT THE SERVICE OF STORE AND CLIENTS

24 STORES WITH NEGATIVE EBITDA A MULTIDISCIPLINARY TASK INTERVENED STORES STORES CLOSED 3. 1,000 PLANS CARRIED OUT 4. ADAPTATION OF SELECTION & LAYOUT

25 OWN BRANDS DIFFERENTIATION & PROFITABILITY BRANDS AT SUPERMARKETS, DEPARTMENT STORES AND HOME IMPROVEMENT 2. 5 MARGIN POINTS IN EXCESS OF THE CORRESPONDING CATEGORY 3. HIGH DEVELOPMENT AND GROWTH POTENTIAL

26 REGIONAL COMMERCIAL SYNERGIES CENCOSUD JOINT NEGOTIATION/PURCHASE TOP 50 SUPPLIERS COMMODITIES FOOD RETAIL DIVISIONS JOINT PURCHASE LINE REVIEWS IMPORTED FOOD POTENCIAL SYNERGIES

27 THE ACTIONS DESCRIBED HAVE HAD A SUCCESSFUL OUTCOME, WHICH IS REFLECTED IN RESULTS AND SHARE PRICE +57 bps +288 bps +49% 28,6% 29,1% 7,9% Mg Bruto (%Vta) EBITDA Aj. (%Vta) 5,0% EBITDA Aj. ($MM) Q Acum Q Acum ,9% 2Q Acum Q Acum Q Acum Q Acum 2016 Last year s evolution of Cencosud Share Price Ago 15 Sep 16 Dic 15

28 3- VISION FOR THE FUTURE

29 COMPANY FIT AUSTERITY AND GREATER ACCOUNTABILITY CULTURE 1. EXPENSES GROW LESS THAN SALES 2. STOCKS GROW LESS THAN SALES 3. DECREASED AGING 4. FOLLOW UP AND STRICTNESS TO WATCH WORKING CAPITAL

30 STRONG CULTURE FOCUSED ON INDIVIDUALS 1. LEADERSHIP AS A PERFORMANCE AND BUSINESS SUSTAINABILITY DRIVER 2. TALENT REVIEW TOP EXECUTIVES MANAGEMENT 6 KEY COMPETENCES 4. RELEVANCE OF WOMEN, HEALTH & WELLBEING AND LABOR INCLUSION 5. TRAINING AND PRODUCTIVITY 6. LABOR ENVIRONMENT

31 TRENDS / CONSUMER (LEADING NEW TRENDS IN THE REGION) INTERNET AND OMNICHANNELING SUSTAINABLE COMPANY HEALTHY FOOD TAKE AWAY MEALS WOMEN AND BEAUTY WORLD EASY AND FAST PAYMENT FRESH

32 GROWTH ACCELERATING ORGANIC MULTIFORMAT GROWTH BECOMING LEADERS IN EVERY AREA POSITIVE SSS IN ALL FORMATS QUALITY AND SERVICE FORMATS AS CORNERSTONES LANDBANK DEVELOPMENT E-COMMERCE HIGH EXPECTATIONS ACCELERATING REMODELLING PROCESS SELECTIVE DEVELOPMENT OF NEW STORES

33 FINANCIAL DISCIPLINE I Decreasing Debt/ EBITDA 4,6 3,4 3,7 3,3 3, II Non-core assets divestiture Divestiture of improductive, non strategic land Divestiture of Marina Arauco Mall Viña del Mar Divestiture of Pharmacies in Colombia and Perú Gas stations in Colombia III Stable Outlook Fitch Ratings BBB - Moody s Baa3

34 4- OPPORTUNITIES PER COUNTRY

35 ARGENTINA WE EXPECT A CHANGE IN THE ECONOMY TREND FOR 2017: A GOOD PROJECT PIPELINE, ON ITS OWN LAND CLOSENESS FORMAT AT JUMBO THE MARKET IS INCREASING ITS FORMALITY LEVEL THE MARKET IS OPENING TO IMPORT WE ARE LEADERS IN E-COMMERCE CONSOLIDATED TEAM / STRONG LOCAL PLAYER

36 BRAZIL END OF RECESSION, GROWTH AS FROM 2018 RENOWNED BRANDS, WITH A HISTORY AND PRESTIGE IN THEIR MARKETS WE HAVE A SUCCESSFUL ATACAREJO FORMAT, WITH A POSITIVE GROWTH WE HAVE BUILT A LOCAL TEAM OF EXCELLENT LEVEL, ACKNOWLEDGED BY THE MARKET TRANSFORMATION INITIATIVES IN SUPPLY CHAIN, PRICING, SELECTION AND EFFICIENCY COMMERCIAL SYNERGIES, IMPROVING MARGIN AND COMPETITIVENESS

37 CHILE A COUNTRY WITH A SOLID ECONOMY, GROWING BELOW ITS POTENTIAL KEY OPENINGS FOR OUR MAIN BRANDS LANDBANK OF 2.7 MM SQM FULL MULTIFORMAT, 6 RETAIL FLAGS + SHOPPING + FINANCIAL RETAIL STRONG GROWTH OF THE FINANCIAL BUSINESS TOGETHER WITH SCOTIABANK LEADERS IN E-COMMERCE FOOD, STRONG GROWTH IN NON-FOOD COSTANERA PROJECT EXPANSION

38 COLOMBIA WE GROW MORE THAN OUR MAIN COMPETITORS OMNICHANNEL, E-COMMERCE AND TELEPHONE SALES DEVELOPMENT OPTIMISM BY INVESTORS ON THE PEACE PROCESS CONSOLIDATED TEAM WITH EXPERIENCE IN THE LOCAL MARKET PROFITABILITY OPPORTUNITY FOR OUR CURRENT ASSETS OUR BRANDS ARE CONSOLIDATING GREAT DEVELOPMENT POTENTIAL TOGETHER WITH LANDBAK AND UNRIVALLED LOCATIONS 2-DIGIT GROWTH AT EASY FOR THE LAST 2 QUARTERS

39 PERÚ POLITICAL CHANGE, CONFIDENCE IN THE COUNTRY S ECONOMY HIGHER GROWTH AND LOWER INFLATION EXPECTATIONS YOUNG COUNTRY: 2/3 OF THE POPULATION WITH FULL PRODUCTION, SAVINGS AND INVESTMENT CAPACITY LOW PENETRATION OF THE MODERN CHANNEL POTENTIAL FOR A 3 TIMES GROWTH OF PARIS SHARE EXCELLENT LAND PORTFOLIO WONG WITH AN UNBEATABLE POSITIONING IN THE HIGH SEGMENT THE BEST LOYALTY PROGRAM - BONUS STRONG DEVELOPMENT OF OWN BRAND

40 CONFIDENCE

41 FINALLY We are in a better position than 15 months ago We have started actions that are yielding profits We are going to address the future with an ambitious but responsible growth And always faithful to the DNA that has characterized Cencosud: our clients are our main concern for any decision 41

42 THANK YOU VERY MUCH