Ripley Corp UBS Latam Opportunities

Transcription

1 Ripley Corp UBS Latam Opportunities June 2008

2 Ripley Corp 1. Ripley Today 2. Chile: increasing profitability 3. Peru: leadership on high growth market 4. Mexico: the implementation 5. Conclusions 6. Annexes 2 1

3 Ripley Today current operations Department stores 50 stores in Chile and Peru selling space: 323,064 sqm Financial Retail credit card loans: US$ 1,399 m Banco Ripley Chile loans: US$ 537 m Real Estate ownership in 7 malls weighted average leasing space: 101,211 sqm owned stores: 20 Loans as of March

4 Ripley Today 52 years of history Ripley Punta Arenas Ripley Alameda San Diego First Department Store in Santiago Credit business starts 1986 Barros Arana First Department Store outside Santiago Alto Las Condes 1997 Ripley Jockey Plaza First Department Store in Peru Banco Ripley Chile 2000 Insurance brokerage business starts 2005 Ripley Corp: IPO 2007 Mexico: JV with Palacio de Hierro Peru: JV with Mall Plaza Chile: JV with Plaza S.A. Ripley Corp: Capital increase Corporate Bond 1956 First Store opened in Chile 1993 Parque Arauco Ripley Chile begins its new positioning 2003 Ripley Chile Bond issuance 4 3

5 Ripley Today department stores CHILE 40 stores Revenues: US$ 1,045 m Market share: 25% Selling space: 228,086 sqm Paris 24.9% La Polar 12.4% Falabella 37.3% PERU 10 stores Revenues: US$ 361 m Market share: 47% Selling space: 94,978 sqm Ripley 25.4% Ripley 47.0% Falabella 53.0% Source: Ripley Revenues and market share as of december 2007 in million of USD. Selling space as of april

6 Ripley Today financial retail CHILE Tarjeta Ripley Loans: US$ 933 m Revenues 07: US$ 354 m Provisions/loans: 8.4% Banco Ripley Loans: US$ 474 m 48 branches PERU Financial business Loans: US$ 285 m Revenues 07: US$ 118 m Provisions/loans: 5.8% Banco Ripley 11 branches Loans 1,693 1,453 1, % 3% % 22% % 27% Perú (US$ m) Peru (US$ m) Chile (US$ m) Banco Ripley Chile (US$ m) Chile (US$ m) Banco Ripley Chile (US$ m) Source: Ripley Figures as of december

7 Ripley Today real estate business Ownership in 7 Shopping malls 101,211 sqm weighted average selling space Fully owned malls revenues 07: US$ 16 m Shopping Mall Country Leasing Space (sqm) % ownership Ripley Panoramico Chile 5, % Mall del Centro Chile 18, % Mall del Centro de RancaguaChile 13, % Calama Chile 44,206 25% Marina Arauco Chile 57,968 33% Mall del Centro de Curico Chile 45,911 33% Trujillo Peru 44,114 40% Peru: Joint venture with Mall Plaza, to build and manage shopping malls: Chile: o The first one was opened in Trujillo on December Ripley has an option to buy 22.5% of 3 shopping malls of Mall Plaza. Source: Ripley 7 6

8 Ripley Today revenues Ripley Corp revenues Peru 24% MM$ 2,173 (LTM as of March 08) Chile 76% Source: Ripley LTM: Last twelve months 8 7

9 Ripley Today revenues & EBITDA evolution ,023 1,239 1,439 1,642 1,774 1,906 2,029 2,159 2, LTM March 08 Revenues (US$ m as of March 2008) EBITDA (US$ m as of March 2008) Source: Ripley LTM: Last twelve months 9 8

10 Ripley Corp 1. Ripley Today 2. Chile: increasing profitability 3. Peru: leadership on high growth market 4. Mexico: the implementation 5. Conclusions 6. Annexes 10 9

11 Ripley Chile: increasing profitability Selective squared meters growth to follow market growth New Distribution Center start up New management structure Strength our solid consumer loans position Growth on real estate business through Mall Plaza 11 10

12 Ripley Chile: increasing profitability Selective squared meters growth to follow market growth Chile: The market grows, but the offer grows even more Variaton in real terms 26.9% 14.2% 14.8% Retail* Private consumption Industry selling space** * Real sales retail index, excluding cars (INE) ** Selling space sum of Ripley, Paris, Falabella and La Polar. Source: Companies reports 12 11

13 Ripley Chile: increasing profitability Selective squared meters growth to follow market growth Nominal Same Store Sales variation* 9.9% 3.9% 3.4% *Avarage reported by Falabella, La Polar, Paris y Ripley Source: Ripley based on quarterly reports informed by the Companies 13 12

14 Ripley Chile: increasing profitability Selective squared meters growth to follow market growth 6 new stores between Ripley Punta Arenas opening April ,297 sqm Ripley Alameda opening April ,262 sqm Ripley Agustinas closing January sqm Ripley Punta Arenas Store Ripley Alameda Store 14 13

15 Ripley Chile: increasing profitability Selective squared meters growth to follow market growth New Distribution Center start up New management structure Strength our solid consumer loans position Growth on real estate business through Mall Plaza 15 14

16 Ripley Chile: increasing profitability New Distribution Center start up 16 15

17 Ripley Chile: increasing profitability Selective squared meters growth to follow market growth New Distribution Center start up New management structure Strength our solid consumer loans position Growth on real estate business through Mall Plaza 17 16

18 Ripley Chile: increasing profitability New management structure Andrés Roccatagliata CEO Retail sfinancial Products Channels Marketing Risk Operations & Technology Development & Control 18 17

19 Ripley Chile: increasing profitability Selective squared meters growth to follow market growth New Distribution Center start up New management structure Strength our solid consumer loans position Growth on real estate business through Mall Plaza 19 18

20 Ripley Chile: increasing profitability Strength our solid consumer loans position Sixth player in chilean consumer loans market December 2007 Itau Chile 2.8% Others 10.9% Santander 20.6% Cencosud 4.9% BBVA 4.3% Corpbanca 5.1% Chile+Citi 16.8% Ripley+ Banco Ripley 6.1% BCI 8.9% Estado 8.9% Falabella+CMR 10.8% Source: Ripley based on SBIF data, Banks and more Department Stores are included 20 19

21 Ripley Chile: increasing profitability Strength our solid consumer loans position Sustainable growth on credit card loans portfolio Wide client base / cross selling Strong and strict credit and risk systems 16.3% 21.7% Loans (US$ m as of Dec 2007) 21 20

22 Ripley Chile: increasing profitability Selective squared meters growth to follow market growth New Distribution Center start up New management structure Strength our solid consumer loans position Growth on real estate business through Mall Plaza 22 21

23 Ripley Chile: increasing profitability Growth on real estate business through Mall Plaza Long term lease contract with Mall Plaza Alameda S.A., Plaza Cordillera S.A. and Plaza San Bernardo S.A. Option to buy 22.5% of those companies 23 22

24 Ripley Peru: leadership on high growth market Macroeconomic environment Excellent market positioning Important store opening plan Growth on loans portfolio with Banco Ripley Peru Growth on real estate business through Mall Plaza joint venture 24 24

25 Ripley Corp 1. Ripley Today 2. Chile: increasing profitability 3. Peru: leadership on high growth market 4. Mexico: the implementation 5. Conclusions 6. Annexes 25 23

26 Ripley Peru: leadership on high growth market Macroeconomic environment Peru: A growing market... Annual Private Consumption Growth 11.7% 5.5% 2.7% 0.3% Source: Banco Central del Peru 26 25

27 Ripley Peru: leadership on high growth market Macroeconomic environment...there is a lack of department stores... Persons for department store sqm Peru Chile Source: Banco Central del Peru 27 26

28 Ripley Peru: leadership on high growth market Macroeconomic environment Excellent market positioning Important store opening plan Growth on loans portfolio with Banco Ripley Peru Growth on real estate business through Mall Plaza joint venture 28 27

29 Ripley Peru: leadership on high growth market Excellent market positioning Ripley Peru is number 1 on market share in Lima and number 2 in the country Lima Peru Saga Falabella 46% Ripley 54% Saga Falabella 53% Ripley 47% Source: Ripley Ripley has the best preference level among retailers June 07 Others 15% Others June 08 4% Ripley 43% Falabella 33% Ripley Falabella 48% 32% Source: Inmark Peru Max 10% Max 15% 29 28

30 Ripley Peru: leadership on high growth market Macroeconomic environment Excellent market positioning Important store opening plan Growth on loans portfolio with Banco Ripley Peru Growth on real estate business through Mall Plaza joint venture 30 29

31 Ripley Peru: leadership on high growth market Important store opening plan 6 new stores Trujillo: first store outside Lima Opening of Trujillo Store 31 30

32 Ripley Peru: leadership on high growth market Important store opening plan Same Store Sales grows in Ripley Peru Real variationonsss in nuevos soles 15.2% 10.2% 11.2% 9.5% 3.2% Mar 07 Jun 07 Sep 07 Dec 07 Mar 08 Source: Press Release 1Q 08 of Ripley Corp 32 31

33 Ripley Peru: leadership on high growth market Macroeconomic environment Excellent market positioning Important store opening plan Growth on loans portfolio with Banco Ripley Peru Growth on real estate business through Mall Plaza joint venture 33 32

34 Ripley Peru: leadership on high growth market Growth on loans portfolio with Banco Ripley Peru 27.4% 30.4% Loans portfolio (US$ m Dec 2007) Source: Ripley 34 33

35 Ripley Peru: leadership on high growth markets Macroeconomic environment Excellent market positioning Important store opening plan Growth on loans portfolio with Banco Ripley Peru Growth on real estate business through Mall Plaza joint venture 35 34

36 Ripley Peru: leadership on high growth market Growth on real estate business with Mall Plaza joint venture Joint Venture with Mall Plaza s and Falabella s peruvian subsidiaries for the construction and operation of shopping malls in Peru. Opening of Trujillo Store 36 35

37 Ripley Corp 1. Ripley Today 2. Chile: increasing profitability 3. Peru: leadership on high growth market 4. Mexico: the implementation 5. Conclusions 6. Annexes 37 36

38 Mexico: the implementation Positive macroeconomic environment Grupo Bal: a partner of excellence Advances in the business plan 38 37

39 Mexico: the implementation Positive macroeconomic environment 130 CONSUMPTION EVOLUTION (2001 Base 100) CREDITS EVOLUTION CONSUMPTION & RISK Durable Goods Non durable goods Services Total Source: Banxico Miles de Millones de Pesos Consumer loans X % past due loans Portfolio 20.0% 15.0% 10.0% 5.0% 0.0% 39 38

40 Mexico: the implementation Positive macroeconomic environment LOW BANK PENETRATION (2006) 39 Loans/PGB Loans and Spread 180% 160% 140% 120% 100% 80% 60% 40% 20% 0% 60% 50% 40% 30% 20% 10% 0% China Malasia Chile Taiwan Corea India Hungria Brasil Czech Republic Polonia Colombia Mexico Argentina 0 10,000 20,000 30,000 40,000 50,000 Jan 99 Jun 99 SPREAD OF STABLE CONSUMPTION Deposits rate PIB/Cápita Loan rate Spread Nov 99 Apr 00 Sep 00 Feb 01 Jul 01 Dec 01 May 02 Oct 02 Mar 03 Japan Germany EEUU UK Ago 03 Jan 04 Jun 04 Nov 04 Apr 05 Sep 05 Feb 06 Jul 06 Dec 06 May 07 30% 25% 20% 15% 10% 5% 0% Depostis China India Argentina Colombia Mexico Brasil Poland Czech Republic Chile Hungary Malaysia South Corea Germany Taiwan UK Japan EEUU PER CAPITA CONSUMING LOANS (US$) (2006) ,002 1,752 2,699 3,509 Source: Banxico, Merrill Lynch 5,011 6,688 7,887 7,951 40

41 Mexico: the implementation Positive macroeconomic environment RETAIL REVENUES COMPOSITION (Billon US$) (ROIC) US$142 US$112 37% % 18.2% % 78% 63% % 16.1% 22% % Non Food Food % Formal retail Traditionals Jun % Source: Planet Retail as of Dec 2006 Source: Ripley based on Financial Estatements of Elektra, Liverpool, Famsa and Coppel 41 40

42 Mexico: the implementation Positive macroeconomic environment Department stores Mexico*: revenues and EBITDA margin evolution (US$ m) 14.7% 15.6% 15.5% 15.0% 14.6% 14.9% 4,372 5,104 5,635 6,120 7,304 8,472 9,346 10,728 11, Revenues EBITDA margin *Data based on Financial Estatements of Coopel, Liverpool, Elektra, Famsa. Source: Ripley 42 41

43 Mexico: the implementation Positive macroeconomic environment Grupo Bal: a partner of excellence Advances in the business plan 43 42

44 Mexico: the implementation A partner of excellence Grupo Bal is one of most important business group of Mexico o o It is Controlled by Baillères s Family It has participation on the followings businesses: Mining Industry, Industrial Activity, Financial Market, Agriculture Industry and Retail. Leading Holding s enterprise: o o Palacio de Hierro: Is the most exclusive and prestigious department store in Mexico Peñoles: Is the world leading company in production of Silver. Its Market Cap is estimated in about US$ 9,000 millions o GNP: Is the leading insurance company in Mexico with a market share of 20% o o Profuturo: Pension Fund Company with more than 3.4 million affiliates and number one in profits during the past 8 years Valmex: Brokerage and Rental Company In addition, Grupo Bal funded and participate in the board of directors of Instituto Tecnologico Autonomo of Mexico (ITAM), one of leading universities in Mexico with more than 5,000 students

45 Mexico: the implementation Positive Macroeconomic environment Grupo Bal: a partner of excellence Advances in the business plan 45 44

46 Mexico: the implementation Advances in the business plan Leaders of the JV are living in Mexico Second line team formation Negociations with several real estate developers First stores opening:

47 Ripley Corp 1. Ripley Today 2. Chile: increasing profitability 3. Peru: leadership on high growth market 4. Mexico: the implementation 5. Conclusions 6. Annexes 47 46

48 Conclusions Chile: Focus on creation of value Selective squared meters growth to follow market growth New Distribution Center start up New management structure Strength our solid consumer loans position Growth on real estate business through Mall Plaza Peru: leadership on high growth market Excellent market positioning Important store opening plan Growth on loans portfolio with Banco Ripley Peru Growth on real estate business through Mall Plaza joint venture Mexico: The implementation First stores opening:

49 Ripley Corp 1. Ripley Today 2. Chile: increasing profitability 3. Peru: leadership on high growth market 4. Mexico: the implementation 5. Conclusions 6. Annexes 49 48

50 2008 first quarter results Summary Profit Operating Income EBITDA US$ m (Mar 08) % 30.6% 6.7% Q Q 2008 Revenues grew 2.7% Operating income increased 30.6% Profit decreased 6.7% due to higher financial expenses and price level restatement. EBITDA increased 24.3% 50 49

51 2008 first quarter results Revenues Chile Real estate revenues Retail revenues Financial revenues US$ m (Mar 2008) % 3.9% Q Q 2008 Revenues increased in real terms 2.8% in Chile Financial revenues increased 20.8% in real terms (Loans portfolio grew 19.6% in real terms). Retail revenues increased a nominal 3.9% but diminished 3.9% in real terms, due to high inflation. Same Store Sales were 2.6% in nominal terms and 9.6% in real terms 51 50

52 2008 first quarter results Revenues Peru Retail revenues Financial revenues US$ m (Mar 08) 8.9% % 90 1Q Q 2008 Revenues in Peru increased 2.6% in real terms Same Store Sales were 14.1% in nominal terms and 9.5% in real terms. Both measured in nuevos soles. However, retail revenues grew only 0.2% in real chilean pesos. Financial revenues increased 8.9% in real terms (loans portfolio grew 17.5%) 52 51

53 2008 first quarter results Loans portfolio Chile Peru US$ m (Mar 08) % 19.6% 314 1,086 1Q Q 2008 Loans portfolio increased 19.2% in real terms 53 52

54 2008 first quarter results Operating income 30.6% US$ m (Mar 08) Q Q 2008 Operating income increased 30.6% in real terms Revenues increased 2.7% COGS decreased 4.4% due to minor sales volume and better margins. SG&A decreased 1.7% in Peru and increased 6.9% in Chile

55 2008 first quarter results Non operating income Non operating income decreased US$ 10.6 million Financial expenses increased US$ 4.6 million Investment plan financing Growth in loans portfolio Higher charges for price level restatement US$6.2 million Effect for the peso/sol variation in Peruvian financing

56 Ripley Corp UBS Latam Opportunities June 2008