ROADSHOW FRANKFURT 1

Transcription

1 ROADSHOW FRANKFURT 1

2 1. SONAE AT A GLANCE 2

3 WE ARE A RETAIL COMPANY Market leader in food and specialized retail formats With Board control of a Shopping Centre and a Telecommunications business SONAE 100% 100% 100% 50% 53% 100% SONAE MC Food Retail Hypers and Supers CORE BUSINESSES SONAE SR Specialized Retail Non-Food Retail formats: sports, fashion and electronics RETAIL SONAE RP Retail Properties Retail real estate assets RELATED BUSINESSES SONAE SIERRA Shopping Centres Shopping centre developer, owner and manager CORE PARTNERSHIPS SONAECOM Telco Integrated telecom provider Investment Manag. Business with M&A activity: Insurance, Travel and DIY ACTIVE INVESTMENT

4 WITH A STABLE SHAREHOLDER STRUCTURE Reference shareholder, Efanor, a family holding company Others 34.0% Norges Bank 2.0% BPI 8.9% Sonae 53.0% Bestinver 2.1% Free float of circa 47% *Including BPI equity swap Share capital Average daily Market Free Float 2,000 million volume (2010) Capitalization (as of 12 Nov 10) ~6 million shares; (as of 12 Nov 10) 0.72 billion euros 5.2 million euros 1.5 billion euros BPI stake includes equity swap of million Sonae shares (~7% of share capital) 4

5 2. STRATEGIC AMBITIONS 5

6 WHERE WE ARE GOING AND WHY? International Expansion The main strategic priority Dilution of country risk New growth avenues Diversifying investment style Adopt the most appropriate investment style Wholly owned businesses Majority stakes Partnerships Minorityit stakes Leverage the exceptional asset base in Portugal Innovate Generate new businesses Strengthen our competitive position 6

7 WHAT ARE OUR STRATEGIC AMBITIONS? ROE > 15% 25% OF TURNOVER AND 35% OF ASSETS ABROAD TURNOVER CAGR>10% ~1/3 OF CE IN MINORITY STAKES OR PARTNERSHIPS WITHOUT FULL CONTROL 7

8 WHAT ARE OUR STRATEGIC AMBITIONS? CAPITAL LIGHT STRATEGIES To implement capital light growth strategies and look for opportunities to release capital employed 8

9 WHAT ARE OUR STRATEGIC AMBITIONS? REACH INVESTMENT GRADE PROFILE To ensure access to debt in competitive conditions and/or alternative financing solutions 9

10 3. WE CONTINUE TO DELIVER OURVALUE CREATION MODEL 10

11 IN9M10 WE CONTINUED TO DELIVER PROFITABLE GROWTH,ONTRACK OF OUR INTERNAL OBJECTIVES TURNOVER RECURRENT EBITDA +6% +12% TURNOVER RETAIL +8% NET DIRECT PROFITS +30% 11

12 WE CONTINUED TO IMPROVE OUR RETURN ON EQUITY Direct Income contribution to RoE ROE Indirect Income contribution to ROE 21% 21% 15pp 11pp 6pp 10pp 18pp 16pp 16pp 17pp 14% 15pp 15% 14% 14pp 13pp 14pp 13% 11% 11pp 11pp 7% 8% 5% 3pp 3% 2% 0pp -7pp -7pp -4pp -3pp -2pp -10pp -11pp -11pp 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 12

13 WHILE INVESTING IN FUTURE GROWTH GROSS CAPEX OUTSIDE PORTUGAL 278 M 70M High levels of investment in retail unit organic expansion: +40,000 m2 1 3 Number of stores outside Portugal M08 9M09 9M

14 ... AND WHILE REDUCING NET DEBT DELTA VS. SQLY NET DEBT 3,136M Q2 Q3 Q4 Q1 Q2 Q3 14

15 4. PERFORMANCE OF THE BUSINESSES 15

16 4.1. LEADERSHIP AND PROFITABILITY 16

17 SONAE MC KEY ACTION DRIVERS CONSOLIDATE LEADERSHIP position i in Portugal while looking for international opportunities... LEVERAGING ON OUR EXCEPTIONAL ASSET BASE IN PORTUGAL Coverage of the PORTUGUESE MARKET and CONSOLIDATE MARKET LEADERSHIP Explore new adjacent BUSINESS OPPORTUNITIES leveraging on a strong management team and know-how in retail Manage the business in Portugal as a SUSTAINABLE CASH FLOW GENERATOR 17

18 IN 2010 WE INCREASED LEADERSHIP OF THE FOOD RETAIL MARKET INCREASE IN SALES (+5%) ABOVE THAT OF THE MODERN RETAIL MARKET MODELO CONTINENTE 1.8X 2.9X 3.2X 4.1X 4.1X FOOD MARKET Market Leader 2nd Plyer 3rd Plyer 4th Plyer 5th Plyer 6th Plyer Source: Kantar World Panel 9M10 18

19 LEADERSHIP HAS ENABLED GROWTH AND PROFITABILITY TO BE ACHIEVED TURNOVER =+5% EBITDA= + 24% TURNOVER (M ) ,106 2,930 +6% +5% 3,275 EBITDA (M ) % % 149 Note: turnover figures released in January 2011 TURNOVER AND EBITDA SALES ON A LIKE FOR LIKE BASIS 2010 = 3% Benefiting from a clear value focused offering M09 9M10 EBITDA margin 9M10. = 6.3% EBITDAR margin 9M10 = 9.2% Reflecting scale, cost-cutting cutting measures and effectiveness of promotions through the loyalty card Increasing from 9.0% in 9M09 Benchmark in the portuguese market 19

20 PERFORMANCE LEVERAGES ON THE VALUE AND SUCESS OF THE LOYALTY PROGRAM NUMBER OF CLIENTS WITH LOYALTY CARD % OF SALES ASSOCIATED WITH CARD million 83% million 84.5% 2010 >3.0 million 86% NEW TECHNIQUES OF USING CLIENT INFORMATION: CUSTOMER CENTRICITY RETAIL 20

21 PERFORMANCE REFLECTS THE STATE OF THE ART BUSINESS PROCESSES Key issue: INTERNATIONAL SOURCING International procurement,, quality control, administrative and logistic management Since1994 ~ sku s and ~2.000 suppliers 700 M of global l imports for Sonae group Recurrent contacts in 50 countries Dedicated offices in China and Brazil Sonae MC with 14% of international sourcing 21

22 PERFORMANCE REFLECTS THE STRONG AND CONTINUOUS INVESTMENT IN PRIVATE LABEL OWN LABEL OFFERED IN ALL PRODUCT CATEGORIES AND INCREASING IMPORTANCE 2,400 2,500 2,100 26% 20% 23% #OWNREFERENCES AND % FMCG SALES INVESTMENT IN OWN BRAND Broadening of the Own Brand range Representing a quarter of FMCG sales OwnBrandsinclude: The Continente brand (20% cheaper than the sales category leader) 1 st price brands (best price on the market) Controlled brands (gourmet, selection, etc.) 22

23 PERFORMANCE REFLECTS THE SOLID ORGANIC GROWTH IN PORTUGAL STORES = 415 SALES AREA = 544,000 M % New stores: +1 7,000m f l d stores Note: 2010 figures released in January 2011 ORGANIC GROWTH IN LAST 12 MONTHS Sales area ( 000 m2)

24 PERFORMANCE REFLECTS OUR OPERATIONAL EFFICIENCY COST CONTROL Cost-cutting measures Specific teams focused on minimizing and controlling costs STOCK OPTIMIZATION Reduction on average stock ( 9M10 vs 9M09) 2% decrease in value (M ) from 42 to 39 days IMPROVEMENTS IN OPERATIONAL EFFICIENCY Implementation of the Kaizen method aimed at identifying, reducing and eliminating suboptimal processes 24

25 AND THE STRENGTHENING OF OUR COMPETENCIES AND VALUE PROPOSAL CONTINENTE AND MODELO EACH HAVE DISTINCTIVE COMPETENCIES EXCELLENCE STRONG BRAND RECOGNITION PRODUCT OFFER VARIETY OF THE LOGISTICS INFRASTRUCTURE Continente is considered to be the Continente: ~70, sales items 2 logistics warehouses to centralize distribution "Brand of Confidence" by consumers for the 8 th year running Modelo: ~40,000 sales items for the North and the South of the country Totallogistics og area: 221,000 m 2 25

26 4.2. GROWTH AND INTERNATIONAL EXPANSION 26

27 SONAE SR KEY ACTION DRIVERS CONSOLIDATE LEADERSHIP position i in Portugal and strong push towards internationalisation... LEVERAGING ON OUR EXCEPTIONAL ASSET BASE IN PORTUGAL Coverage ofthe Continue to use Manage the business PORTUGUESE MARKET PORTUGAL AS A TEST in Portugal with the current formats PLANT for new formats, as a SUSTAINABLE portfolio and leveraging g on a strong CASH FLOW CONSOLIDATE management team and GENERATOR MARKET LEADERSHIP know-how in retail 27

28 SONAE SR KEY ACTION DRIVERS... STRONG PUSH TOWARDS INTERNATIONALISATION... BECOME AN INTERNATIONAL RETAIL PLAYER, STARTING WITH A STRONG EXPANSION IN SPAIN of WORTEN, building a of SPORTZONE, leading of ZIPPY, exploring strong and DISTINCTIVE the REINFORCEMENT The DISTINCTIVENESS POSITION in the of the INTERNATIONA- OF THE CONCEPT IBERIAN MARKET LIZATION PROCESS in both geographies 28

29 SONAE SR KEY ACTION DRIVERS BUILD SKILLS AND EXPERIENCE Enter into NEWCOUNTRIES Configure an INTERNATIONAL in order to develop the international DEVELOPMENT MODEL based on identity of the formats portofolio franchising and joint venture as means to accelerate growth 29

30 WE MAINTAINED GROWTH AND PROFITABILITY IN PORTUGAL STORES = 414 SALES AREA = 256,000 M2 AS AT END 2010 TURNOVER (M ) % 1,041 EBITDA (M ) +21% % Note: turnover figures released in January 2011 TURNOVER AND EBITDA STRENGTHENING OF LEADERSHIP POSITION IN THE CONSUMER ELECTRONICS AND SPORTS GOODS SECTORS M09 9M10 SPORTZONE #1 in Portugal WORTEN #1 in Portugal GOOD PERFORMANCE BY THE TEXTILES FORMATS MODALFA ZIPPY New stores: Last 12 months +18,000m stores 30

31 WE ACCELERATED OUR INTERNATIONAL GROWTH STORES = 89 SALES AREA = 108,000 m2 AS AT END 2010 Note: figures released in January 2011 ORGANIC GROWTH AND TURNOVER ORGANIC GROWTH Sales area ( 000 m2) New stores: +94% Last 12 months TURNOVER (M ) % stores = 25( ,000m 2 WORTEN ) ZIPPY = 36(+26) SPORTZONE = 28(+14) 31

32 INTERNATIONAL EXPANSION EFFORT IMPACTING PROFITABILITY BUT IN LINE WITH THE GOAL OF POSITIVE EBITDA IN 2012 EBITDA (M ) % Impact of Spanish business EBITDA Sonae SR M08 9M09 9M10 SONAE SR EBITDA reflecting: Market entry costs Organic growth 32

33 ... AND EXPANDED OUR BUSINESS FRONTIERS 1st joint ventures Worten CANARY ISLANDS Sport Zone CANARY ISLANDS 1st franchising contracts Zippy CANARY ISLANDS Zippy MIDDLE EAST 70 stores I 9countries Kingdom of Saudi Arabia United Arab Emirates Jordan Egypt Lebanon Qatar Bahrain Kuwait Kazakhstan 33

34 4.3. RETAIL REAL ESTATE ASSET MANAGEMENT 34

35 SONAE RP KEY ACTION DRIVERS AN IMPORTANT SOURCE OF CAPITAL Execute an asset Focus on Asset Seek Property monetization plan to release circa 50% Management Development opportunities of invested capital freehold ownership of food retail sales area 35

36 RETAIL PROPERTIES BUSINESS UNIT AN IMPORTANT SOURCE OF CAPITAL RATIONALE Manage Assets more proactively Build Retail Real Estate competencies Partial release of invested capital INVESTED CAPITAL (end 9M10) 1.5 Billion Euros (Net book value) 8 SALE & LEASE BACK TRANSACTIONS COMPLETED Azambuja logistics platform Yield-7.62%IValue-33.2million I Capital gain - 7 million 2 Modelos stores Yield % I Value million I Capital gain - 3 million 6 Modelos stores ; 1 Continente; 1 Worten; 1 SportZone Yield - 6.8% I Value - 71 million I Capital gain - 29 million HYPERMARKETS I Continente t 34 stores owned I 90% total sales area SUPERMARKETS I Modelo 98stores owned I79 9 % total sales area 36

37 GOOD PERFORMANCE OF THE CORE PARTNERSHIPS 37

38 SONAE SIERRA KEY ACTION DRIVERS Grow in promising Continue to make Prepare the company markets: operational for European recovery Speed up expansion improvements in in selected countries in Brazil spite of the fall Reinforce emergent markets presence and in consumption in up with the best projects) services to third parties certain sectors in Europe (freeing up capital and starting 38

39 EBITDA UP BY 13% AND DIRECT PROFITS INCREASED BY 42% EBITDA (M ) % 90 DIRECT PROFITS (M ) % 44 Occupancy rate = 96% (+2pp ) Total of rents collected (fixed and variable) up 5% on a LfL basis Expansion restricted in Europe but partially offset by greater development activity in Brazil EBITDA AND DIRECT PROFITS (M ) 9M09 9M10 9M09 9M10 EBITDA PERFORMANCE REFLECTING ONGOING COST CUTTING MEASURES AND OPERATIONAL IMPROVEMENTS INDIRECT PROFITS SHOWING SIGNS OF STABILIZATION 39

40 SONAECOM KEY ACTION DRIVERS Manage cash flow Ensure continuous Reinforce SSI's and optimize operational efficiency market share gain in the mobile segment International presence and grow client base through h new services and sectors 40

41 EBITDA GROWS 9% AND CASH FLOW IS POSITIVE RESULTS CONTINUE TO SHOW A FAVOURABLE EVOLUTION MOBILE SEGMENT CUSTOMERS (M) 3, ,433 3,450 EBITDA (M ) 3,469 3, % +6% 3Q09 4Q09 1Q10 2Q10 3Q10 9M08 9M09 9M10 Growth in mobilecustomersand customer revenues Gains in mobile market share Cost control policies Strict investment management 41

42 5. FINANCIAL ANALYSIS 42

43 TURNOVER GREW BY 6% WITH RETAIL UNITS MAKING A SIGNIFICANT CONTRIBUTION TO THIS PERFORMANCE GROWTH +6% +8% +62% +5% +7% -5% +8% - 24% +6.1% 2, ,286 4,066 MC SR (PT) SR (SP) RP SIERRA S COM IM PS E&A 9M10 9M09 Sonae MC and Sonae SR growing 8% International business approaching 20% of Sonae SR turnover YTD 9M10; Million euros 43

44 EBITDA INCREASED BY 7% GENERATING A MARGIN OF 12% RETAIL UNIT MARGINS WERE SUSTAINED BY GAINS IN MARKET SHARE AND IN EFFICIENCY GROWTH +24% +20% n.m +0% +10% +9% +12% +7% MC SR (PT) SR (SP) RP SIERRA S COM IM E&A RECURRENT EBITDA TOTAL 9M10 TOTAL 9M09 9M10 EBITDA 9M10 includes capital gains of ~13m from Sonae RP with the sale & lease back of Retail real estate assets; EBITDA 9M09 includes 33m of capital gains. YTD 9M10; Million euros 44

45 DIRECT NET PROFITS INCREASED BY 17% REFLECTING STRONG EBITDA PERFORMANCE AND A SIGNIFICANT FALL IN NET FINANCIAL EXPENSES % 96 EBITDA D&A Net Financial activity Share in Results Othe r Items Taxes Minorities Direct Net Profit 9M10 Direct Net Profit 9M09 Considerable better net financial activity due to the reduction in average debt in 9M10 and the lower level of the interest rates. Higher taxes in retail formatsand Sonaecom YTD 9M10; Million euros 45

46 INDIRECT PROFIT REFLECTS A SIGNIFICANT SLOWING DOWN OF YIELDS Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 Relatively stable yields across all the countries where Sierra is present, with the exception of Portugal and Greece EoP quarterly data; Million euros 46

47 INVESTMENT TOTALED 278M REFLECTING THE ADOPTION OF A CAPITAL LIGHT STRATEGY INVESTMENT IM Sonae MC Million Euros 12% 19% % Sonaecom 278 9M08 9M09 9M10 36% Sonae SR 20% Sonae RP 4% Sierra 10% CAPEX 40% below that in 9M10 Despite the strong push to increase presence in the Spanish market Sonae RP investment t reaching 18 M compared to 78M in 9M09 Development of 3 shopping centres scheduled to open in 2011/

48 AN APPROPRIATE CAPITAL STRUCTURE IN EACH BUSINESS TO SUPPORT FUTURE GROWTH PLANS Shopping centres and Holding Loan to Value Retail and Telecom NET DEBT/EBITDA 50.2% 50.1% 46.1% 47.2% 46.8% 4.2x 3.4x 4.0x 3.7x 3.4x 14.8% 14.7% 15.4% 16.3% 14.8% 2.1x 2.2x 2.1x 2.0x 1.9x 3Q09 4Q09 1Q10 2Q10 3Q10 3Q09 4Q09 1Q10 2Q10 3Q10 Sierra Holding Retail SC 48

49 MAJOR IMPROVEMENT IN DEBT RATIOS EBITDA/INTEREST Consolidated figures 7.8x 9.7x 10.9x 11.4x NET DEBT/EBITDA Consolidated figures 5.3x 4.5x 4.7x 3.9x 4.0x 4.5x 6.2x 5.1x 6.0x 7.1x 7.9x 8.2x 5.1x 4.2x 5.6x 4.8x 5.3x 4.5x 5.1x 4.2x 4.5x 4.8x 4.6x 3.6x 4.1x 3.8x 4.4x 3.7x 4Q08 1Q09 2Q 09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q08 1Q09 2Q09 3 Q09 4Q09 1 Q10 2 Q10 3Q10 Without Sonae Sierra 49

50 SONAE AN ATTRACTIVE INVESTMENT OPPORTUNITY O Confirmed growth in Turnover and Profitability in the face of adverse macroeconomic conditions Value proposal p offer adapted to market demands A clear and ambitious strategy that will enable for future growth and value creation Strong culture and values High quality management teams 50