Ripley Corp. One of the biggest holdings of the department store business in Chile and Peru

Transcription

1 Ripley Corp Presentation July 2009

2 Ripley Corp One of the biggest holdings of the department store business in Chile and Peru RIPLEY CORP Revenues for almost MUS$2,000 EBITDA 2008: MUS$ 180 Market Cap: MUS$ 1,500 CHILE 38 Stores - Selling space 232,820 sqm Revenues LTM: US$1,331 million Loan Portfolio: Over MUS$ 900 PERU 11 Stores Selling space 102,110 sqm Revenues LTM: Over US$ 450 million Loan Portfolio: Over MUS$ Figures in US$ as of Jun-09 (FX: $531.76/US$)

3 Contents Ripley - 53 years of history Recent Developments Ripley Chile Ripley Peru Conclusion 3

4 More than 50 years in the retail industry 1956 First store in Santiago 1976 Credit business beginning 1985 First department store 1986 First store outside Santiago 1993 Ripley Parque Arauco biggest store in South America / New image positioning 1997 First store in Peru 2000 Insurance brokerage and e-commerce 2003 Opening of Hong Kong office / local bond of UF 6,500,000 (MUS$257) 2005 IPO of Ripley Corp First store outside Lima (Trujillo). First shopping mall of Aventura Plaza S.A. JV in Peru 2009 Acquisition of 22.5% of Nuevos Desarrollos S.A.(Plaza Alameda, Plaza Sur and future developments) Sale of the participation in Mall Calama, Mall del Centro, Mall del Centro Rancagua and Mall Panoramico. 4

5 One of the biggest holdings in the department store business Third player on department store business in Chile and second in Peru Sales of almost US$ 2 billion MUS$ 1,331 in Chile (LTM) MUS$ 538 in Peru (LTM) 38 Stores in Chile and 11 in Peru, with a total selling space of sqm Market Share in Chile (Retail Sales 2008) Market Share in Peru (Retail Sales 2008) Paris 24.4% Ripley 22.6% Falabella 54% Ripley 46% Falabella 40.1% La Polar 12.9% Source: Ripley and Companies Press Releases Source: Ripley 5 Figures in US$ as of Jun-09 (FX: $531.76/US$)

6 An important player in consumer credit in both countries Sixth actor in consumer credits market in Chile with a loan portfolio of MUS$1,282 (Tarjeta Ripley + Banco Ripley) as of Dec-08 Loan Portfolio of Tarjeta Ripley: MUS$ 914 Loan Portfolio of Banco Ripley: MUS$ 368 Fifth actor in consumer credits market in Peru with a loan portfolio of more than MUS$350. Market share in Chile (consumer credits 2008) Market share in Peru (consumer credits 2008) Other Small Retailers 6.7% Other Banks 6.8% Santander 21.1% Corpbanca 4.6% Interbank 17.0% Scotiabank 12.5% Falabella 11.9% BBVA 4.7% Ripley 8.3% La Polar 4.9% Banco Ripley + Tarjeta Ripley 6.4% Banco Paris + Tarjeta Mas 6.9% BCI 9.4% Source: SBIF (w/o considering BancoEstado) Falabella + CMR 10.8% Banco De Chile 17.7% 6 BCP 31.0% Others 1.2% del Trabajo 4.3% Source: SBS Peru Figures in US$ as of Jun-09 (FX: $531.76/US$) Continental 7.7% Citibank 6.0%

7 Successful business model Integration of synergic businesses gives a complete knowledge of client needs Focus on its target market with a clear value proposal and focused marketing efforts: Value Proposal Brands and Fashion Measures Strengthening own brands Wide variety of fashion products Permanent innovation Result Leadership in target segment Convenience and Financing Benefits / Discounts More than 8,000 associated stores Transactional card and client fidelity Purchase experience Quality product Convenient financing Integral service Purchase repetition Positive results of TOM Second place in TOM of Department stores and Credit cards 7

8 Strong corporate image Important characters helped us to build a very strong corporate image and brand Cindy Crawford: IPO of Ripley Corp Penelope Cruz: Face of the company 8

9 Permanent growth in Chile Attractive growth in sales, selling space and loan portfolio confirms successful positioning Evolution of consolidated revenues ( MUS$) Evolution of financial revenues and loan portfolio (MUS$) CAGR*: 5.5% CAGR*: 13.9% ,043 1,153 1,268 1,323 1,412 1, Mar- 08 Retail Financial Shopping Malls Mar Mar-09 Gross Loan Portfolio Financial revenues Source: SBIF Source: Ripley 9 * CAGR: Compounded average growth rate Figures in US$ as of Jun-09 (FX: $531.76/US$)

10 Permanent growth in Peru Strong increase on sales, financial revenues and loan portfolio confirm important growth in Peru Evolution of consolidated revenues ( MUS$) Evolution of financial revenues and loan portfolio Banco Ripley Peru (MUS$) CAGR*: 19.7% CAGR*: 35.7% Mar-08 Mar Mar-09 Loan Portfolio Financial revenues Source: Ripley 10 * CAGR: Compounded average growth rate Figures in US$ as of Jun-09 (FX: $531.76/US$)

11 Wide client base and efficient administration of strategic information More than 5.4 million issued cards in Chile and 2.1 million in Peru More than 3.0 million of active cards in Chile and 1.3 million in Peru Optimization of efforts in marketing, merchandising and promotional activities Issued cards in Chile Issued Cards in Peru

12 Strong financial structure Conservative Financial strategy let the company to have a solid financial position, even in the low cycles of the economy. Additionally, the debt profile of the company is well balanced, with maturities of 2009 and 2010 prefinanced with current cash position Maturity profile of current financial debt (MUS$) Cash position* (MUS$) Financial debt of MUS$ Cash Mar Apr-May Shopping Malls sale Bonds issue and prepayment 245 Total 12 * pro forma jun-09 with malls sale and bonds issue Source: Ripley Figures in US$ as of Jun-09 (FX: $531.76/US$)

13 Strong financial structure (Cont ) Good debt ratios financial flexibility Consolidated liabilities/ Equity* Net financial debt/ Equity** 0.69x 0.87x 0.89x 0.90x 0.39x 0.49x 0.47x 0.55x 0.44x *** Mar Mar-09 * Consolidated liabilities/equity : Total Liabilities/ (Equity + Minority Interest) ** Net Financial Debt/ Equity : Net financial liabilities / (Equity + Minority Interest) *** pro forma after shopping malls sale 13 Source: Ripley

14 Financial background Revenues (MUS$) EBITDA (MUS$) 1,684 1,786 1,890 1, % 9.5% 8.6% 7.7% Mar 09 LTM Mar 09 LTM EBITDA EBITDA Margin 14 Source: Ripley Figures in US$ as of Jun-09 (FX: $531.76/US$)

15 Ripley Corp 1Q 2009 Results (MUS$) Revenues decreasing due to the international crisis (especially on durable goods) Costs of sales rose due to provisions of the credit business associated to a higher risk (+91% in provision charges) Net Income 1Q 2008 Revenues Costs of sales -6.0 SG&As w/o dep -2.4 Depreciation 10.2 Mall Calama Income Others No Operational and tax Net Income 1Q 2009 Loan portfolio reduction explained by credit restrictions in order to keep risk controlled Provision stock / Gross Loan Portfolio in Chile increased from 12.2% to 16.4% during 1Q Negative net income is mainly explained by provision increase (not cash flow) 15 Figures in US$ as of Jun-09 (FX: $531.76/US$)

16 Contents Ripley - 53 years of history Recent Developments Ripley Chile Ripley Peru Conclusion 16

17 Controller group has an important knowledge of the business Calderon family have been connected to retail business for over 50 years excellent knowledge of the industry In May 2009, Inversiones Bujorico Ltda.(Calderon Kohon Family) subscribed with Inversiones Conca S.A. (related to Chilean entrepreneur Alvaro Saieh) a promise of selling 20% of Ripley, transaction that should be made before November 30th Alvaro Saieh has a successful experience on very complementary businesses to Ripley (food retail, banking and real estate). Major Shareholders Free Float Inversiones Bujorico Ltda.** 20% Insurance Companies 1.2% Retail 54.4% Inversiones R S.A.* 61% Free Float 19% Mutual Funds 7.3% International Investors 19.7% Pension Funds 16.0% 17

18 Partners of the leading group in the shopping malls business JV with Mall Plaza (main player of the real state business) in: Peru: Aventura Plaza S.A. (40% of property) Chile: Nuevos Desarrollos S.A. of Mall Plaza group in Chile (22.5% of property) Divest in mature shopping malls Focus in our core business (department store and financial business) 18

19 Selling process of non strategic and mature shopping malls Sales in Chile Mar-09: Sale of participation in Mall Calama (25% of the ownership) Selling price: MUS$ 19 approx. Apr-09: Sale of 100% of: Mall del Centro de Santiago Mall del Centro de Rancagua Mall Panoramico Selling price: MUS$ 117 approx. Income of these operations for over MUS$94 19

20 Strategy in real estate B E F O R E Shopping Mall Selling space (m2) Property Ripley Panoramico 5, % Mall del Centro 18, % Mall del Centro de Rancagua 13, % Mall Calama 44, % Marina Arauco 57,968 33% Mall del Centro de Curico 45,911 33% Total Selling Space 81,860 C U R R E N T Shopping Mall Chile Selling space (m2) Property Ripley Marina Arauco 57,968 33% Mall del Centro de Curico 45,911 33% Mall Plaza Sur 74, % Mall Plaza Alameda 57, % Total Selling Space Chile 63,966 Shopping Mall Peru Selling space (m2) Property Ripley Trujillo 44,114 40% Callao 76,460 40% Total Selling Space Peru 48,230 Total Selling Space 112,196 20

21 Successful bond issue Ripley Chile On June 25th 2009, Ripley Chile made a successful issue of UF 3,000,000 (MUS$118 approx.) Series E: UF 1,000,000 (MUS$ 39) Duration: 11 years (21 year period) Rate: 5.04% (spread of 167 bps) Series F: UF 2,000,000 (MUS$ 79) Duration: 4.7 years (7 year period) Rate: 4.45% (spread of 170 bps) On June 26th was informed an anticipated rescue of the previous bond series of Ripley Chile -series A UF (MUS$ 42) and series B UF (MUS$ 134). This amount will be paid on July 27 th 2009 with the funds from the bond issue of the series E and F and current available cash. Considering prepayment of series B: Annual Savings of MUS$1 in financial expenses Savings in Present Value: MUS$6.2 Average Duration increases from 6.1 to 6.8 years 21 Figures in US$ as of Jun-09 (FX: $531.76/US$)

22 Contents Ripley - 53 years of history Recent Developments Ripley Chile Ripley Peru Brands & Fashion (Variety and Design) Conclusion Convenience and easy Financing Purchase experience 22

23 Macroeconomic scenario in Chile IPSA (Chilean stock market index) 1.3% 3,015 3,055 2,550 Jul-08 Ene-09 Jun-09 Currency Exchange Rate (CH$/US$) Jul-08 Ene-09 Jun-09 23

24 New distribution center New Distribution center has the most advanced technology in South America. It will: Improve customer service Make more efficient operations Increase inventory turnover On June 22nd was made an official inauguration with the participation of Chilean president, Michelle Bachelet 24

25 Focus on efficiency Continuous improvement: SG&A/m2 2,015 1,932 1,862 1,749 1,687 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Cost efficiency program: Synergies between retail and credit divisions New organizational structure New distribution center Profitability of the operation 25 Source: SBIF Figures in US$ as of Jun-09 (FX: $531.76/US$)

26 Contents Ripley - 53 years of history Recent Developments Ripley Chile Ripley Peru Conclusion 26

27 Ripley Peru Department stores 11 stores with a selling space of 102,110 square meters One new opening in 2009 (Chiclayo) Important revenues growth in the last years Revenues (MUS$) M2 27 Figures in US$ as of Jun-09 (FX: $531.76/US$)

28 Ripley Peru Retail revenues growth vs. GDP 15.3% 7.6% 6.1% 8.9% 12.6% 9.4% % Var. GDP % Var. Revenues Source: Ripley, SBS Peru 28

29 Banco Ripley Peru Loan portfolio evolution 33.2% 26.2% % 27.9% % 18.7% % Var. Ripley % Var. Market Dec-08 Mar-09 ROA Banco Ripley 6.2% 5.1% ROA Financial System 2.6% 2.5% ROE Banco Ripley 37.3% 30.0% ROE Financial System 31.0% 30.5% 29 Figures in US$ as of Jun-09 (FX: $531.76/US$)

30 Contents Ripley - 53 years of history Recent Developments Ripley Chile Ripley Peru Conclusion 30

31 Why Invest in Ripley? Important player in the department store business in Chile and Peru: Revenues of almost US$2 billion 49 stores with over 330,000 sqm Wide client base: Over 4 million active customers of Tarjeta Ripley in Chile and Peru Strong financial position Conservative financial strategy Pre-financed two years debt Good debt profile Stock price at attractive levels, reflecting the low period of the economic cycle P/BV 1.2x Source: Ripley, SBS Peru. Considers consumer loan portfolio of banks and credit cards + Financiera CMR and Cordillera 31

32 Contact Information Speakers Lazaro Calderon CEO Ripley Corp Juan Diuana CFO Ripley Chile Andres Oksenberg Investor Relations Contact: Phone: (+56-2)

33 Ripley Corp Presentation July 2009