2017 highlights consolidated results. Subsequent events. CAPEX Guidance

Transcription

1 February 28 th, 2018

2 highlights 2017 consolidated results Subsequent events CAPEX Guidance

3 highlights 3

4 supermarkets highlights Consistent growth +2 new supermarkets (+5k sqm of sales area), totaling new Mass stores, totaling 161 Started Mass expansion in the North and in Modern Lima Plaza Vea Villa El Salvador Continued generating in-store efficiencies Higher employee productivity through flexible part-time shifts Lower maintenance and energy expenses New Distribution Center Finished construction of our new Distribution Center +48% expected increase in daily dispatch capacity CAPEX of S/ 145 mm Sorter to be operational in Q2 18 Continued developing e-commerce and omnichannel strategy High growth in online sales Introduced assisted sales and click and collect for electro and other non-food categories E-Commerce module inside Plaza Vea Ranked #1 in Great Place to Work for >1,000 employees 4

5 pharmacies highlights +73 new pharmacies (+46, net of closings) 28 in Lima and 45 in Provinces, totaling 1,153 pharmacies Slowdown in store openings to offset temporary oversupply Reinforced Inkafarma s commitment to provide healthcare access to Peruvian families Strengthened EDLP strategy New mass media campaign reinforcing low price positioning Continued developing our private label portfolio Growth and broadening of existing categories New categories, offering additional value to our customers Launched Inkafarma s transactional mobile App Inaugurated our first black store for delivery sales Ranked #11 in Great Place to Work for >1,000 employees 5

6 shopping malls highlights Promart Nuevo Chimbote +7k sqm of additional GLA 2 mall expansions New Promart homecenter in Real Plaza Chimbote Remodeled our existing malls Huancayo Finished implementing the 2 nd floor and renewed look and feel of the mall Arequipa Renewed look and feel of the mall Continued attracting new tenants Exclusivity with a new entertainment format (6 expected openings between ) Opening of a leading desk supplies and toy store in Huancayo and Salaverry Real Plaza Trujillo Ranked #4 in Great Place to Work, between 251 and 1,000 employees 6

7 CONSOLIDATED RESULTS 7

8 Q4 17 consolidated financial results Million Soles (S/ mm) Highlights Revenues High single digit growth in revenues and EBITDA, and double digit growth in net income in Q4 17 7, % 7,810 Supermarkets: double digit growth in revenues and EBITDA Pharmacies: revenue and EBITDA growth and SSS improvement Shopping Malls: high single digit growth in EBITDA, with high occupancy rates and positive tenants SSS +7.7% 1,968 2,120 Q4 16 Q Gross Margin 31.8% 31.1% 31.0% 30.7% Adj. EBITDA Net Income +4.0% +6.7% % +11.9% Q4 16 Q Q4 16 Q Margin 11.8% 11.8% 10.9% 10.6% Margin 4.6% 4.8% 3.7% 3.7% 8

9 Revenue and ebitda breakdown Million Soles (S/ mm) Revenues Adj. EBITDA 6, % 7,374 Pharmacies Supermarkets % % 37% 47% 43% 8.1% 8.0% 1,852 2,002 36% 35% 64% 65% 62% 63% % 62% % 64% 53% 57% Q4 16 Q Q4 16 Q Gross Margin: 29.7% 29.1% 28.8% 28.7% Margin: 8.5% 8.5% 7.5% 7.3% +3.9% +2.8% % % Q4 16 Q Q4 16 Q Gross Margin: 67.0% 67.4% 68.8% 67.0% Net Rental Margin: 80.1% 83.4% 82.1% 80.9% 9

10 SUPERMARKETS S/ mm Q4'17 Var % 2017 Var % Revenues 1, % 4, % Gross Profit % 1, % EBITDA % % Gross Mg 27.1% 27.7% 26.4% 26.7% EBITDA Mg 8.4% 8.3% 6.7% 6.5% Solid SSS growth of 6.0% in Q4 17 Net growth of 3k sqm in supermarkets sales area (+1.2%) and 111 additional Mass stores since Q4 16 (+102 net of closings) EBITDA margin increased from 8.3% in Q4 16 to 8.4% in Q4 17, mainly explained by dilution of fixed costs and in-store efficiencies Started moving to the new distribution center that will be fully operational in 1H 18 Constructing our new production facility and fresh food warehouse to initiate operation in 1H 18 10

11 Pharmacies S/ mm Q4'17 Var % 2017 Var % Revenues % 2, % Gross Profit % % EBITDA % % Gross Mg 33.2% 33.6% 33.0% 32.7% EBITDA Mg 8.7% 9.1% 8.4% 9.2% SSS of -1.2% in Q4 17 Opened 7 pharmacies and closed 9 in Q4 17 (+46 additional pharmacies since Q4 16, +4.2%) Gross margin decreased 37 bps in Q4 17 mainly due to the reinforcement of our EDLP strategy EBITDA margin decreased 32 bps in Q4 17 mainly due to gross margin reduction 11

12 Shopping malls S/ mm Q4'17 Var % 2017 Var % Revenues % % Gross Profit % % Adj. EBITDA % % Gross Mg 67.4% 67.0% 67.0% 68.8% Net Rental Mg 83.4% 80.1% 80.9% 82.1% Tenants SSS growth of 1.8% in Q4 17 Maintained high occupancy rates of ~97% in our malls Higher Net Rental margin mainly due to income from Real Plaza La Curva association, which is reported as Other Income EBITDA adjusted for mark-to-market gain of S/6.0 mm in Q4 17 vs S/2.6 mm in Q

13 Quarterly Openings and SSS by Segment Openings Same Store Sales (SSS) Mass Spmkts Supermarkets Sales Area ( 000 sqm) Supermarkets 3.4% 0.6% 0.0% 1.0% 7.9% 5.7% 3.9% 2016: 1.2% 2017: 5.9% 6.0% Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 N o Spmkts N o Mass Pharmacies N o Stores Pharmacies 2016: 5.9% 2017: -3.6% ,107 1,125 1,149 1,155 1, % 5.1% 7.2% 2.7% Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 16 Q2 16 Q3 16 Q % Q % Q % Q % Q4 17 Shopping Malls GLA ( 000 sqm) Shopping Malls 2016: 5.2% 2017: 2.6% % 6.3% 4.4% 2.4% 3.1% 4.6% 1.3% 1.8% Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 N o malls Note/ Shopping Malls SSS include anchor stores

14 Consolidated net income Million Soles (S/ mm) Net Income +6.7% Net Income Breakdown % Q4 16 Q Net Margin 4.6% 4.8% 3.7% 3.7% Net Income Q4 16 EBITDA Growth Flat Net Financial Expenses Higher Mark to Market Lower FX Gain Higher D&A Higher Tax Net Income Q4 17 Net Income excluding FX and mark-to-market +3.0% Net Income Q4 17: +7.1% +7.1% Q4 16 Q % Adjusted EBITDA +0.2% Financial Expenses, net +18.4% Taxes Net Margin 4.2% 4.2% 3.5% 3.3% 14

15 Capex and cash-flow breakdown Million Soles (S/ mm) Consolidated Capex Cash-Flow Breakdown 2016: S/ 523 mm 2017: S/ 541 mm Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Starting Cash Balance 2017 Operating Cash Flow CAPEX Debt Increase Financial Expenses Other Non- Operating Investing Activities Ending Cash Balance 2017 Free Cash Flow LTM 2017: S/ 273 mm 15

16 Consolidated financial debt Million Soles (S/ mm) Consolidated Financial Debt 1/ USD Exposure 4.0x 4.0x 3.6x 3.6x 3.6x 2.9x 3.2x 3.3x 3.3x 39% 42% 40% 2.8x 2.5x 72% 23% 23% 22% 1.3x 28% 38% 35% 38% Dec-14 Dec-15 Dec-16 Dec-17 Net Debt/EBITDA Debt/EBITDA Hedge USD PEN Debt 1,668 1,722 2,446 2,670 2,659 2,704 Cash 1, Net Debt 542 1,398 2,160 2,344 2,227 2,105 1/ Since 2015, ratios are adjusted for currency hedge effects 16

17 Debt by segment Million Soles (S/ mm) Total Consolidated Debt: S/2,704 mm Debt / EBITDA: 3.3x Net Debt / EBITDA: 2.5x 2.9x 3.0x 2.0x 2.4x 3.2x 2.8x 3.1x 2.6x 2.7x 2.8x 2.2x 2.2x 8.2x 0.4x 5.4x 5.5x 4.7x 4.9x 4.4x 4.3x 4.0x 3.7x 4.0x 3.1x Net Debt/EBITDA Debt/EBITDA Debt 976 1,095 1,347 1,422 1,402 1, ,111 1,248 1,257 1,193 Cash Net Debt ,179 1,220 1,125 1, ,120 1, / Since 2015, ratios are adjusted for currency hedge effects 17

18 3 Subsequent events 18

19 Subsequent events 1. Quicorp Acquisition 2. Real Plaza Acquisitions 19

20 Quicorp acquisition Quicorp s acquisition represents a unique opportunity for InRetail s Pharma Business Progressively combine the portfolio of private label products and optimize the portfolio of third party brands Continue strengthening our low price positioning Opportunity for footprint optimization, overhead, logistics and operational efficiencies Vertical integration leveraging on a best-in-class distribution platform Propel international expansion through a regional platform Two differentiated value propositions to continue providing healthcare access to Peruvian families through a broader network Every-day low prices Assisted sales model Promotions & discounts Mixed formats (drugstore & assisted sales) 20

21 INKAFARMA + QUICORP FINANCIAL and operational SNAPSHOT 2017 figures (PEN mm; %) Retail + 2/ Manufacturing, Distribution & + = Marketing InRetail Pharma 1/ Combined (Proforma) Revenues 2,734 2,017 2,666 6,898 EBITDA 3/ EBITDA Margin 8.4% 5.1% 3.4% 6.1% Market Position 1 st 2 nd 1 st 1 st # of Stores 1,153 1,042-2,195 # of Employees 11,451 8,167 3,088 23,177 Countries 1/ Preliminary proforma combined figures for / Mifarma includes Mifarma, Mimarket, BTL, Fasa, DLVI and Gloria (Bolivia). 3/ Mifarma EBITDA was adjusted for extraordinary expenses related to the acquisition of Albis. 21

22 Quicorp other operational and financial highlights MiFarma SSS Quicorp Financials by Country Mifarma 1/ - SSS Evolution 10.8% 2016: 5.7% 2017: 3.2% Revenues: ~1% EBITDA: ~1% 3.8% 3.3% 5.3% 3.5% 2.9% 5.7% Revenues: ~20% EBITDA: ~16% 0.4% Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Revenues: ~76% EBITDA: ~81% Revenues: ~3% EBITDA: ~2% 1/ Includes Mifarma, Fasa, BTL, Mimarket and Arcangel 22

23 Quicorp - Overview of the manufacturing, distribution & marketing segment Manufacturing Marketing Distribution & Marketing Sales Logistics 2 laboratories: Cifarma and Cipa Develops and manufactures proprietary branded generics Also manufactures for third parties Exclusive representation of own brands and third party brands Pharma and consumer segments Pharma: medical visit team focused on promoting prescription medicine Consumer: trade marketing Design and implement go-tomarket strategy Distribution of non-exclusive agreements with suppliers / vendors Manages client relationships with a specialized salesforce Most dense distribution network in the Andean pharma universe Logistics services to Quicorp companies and third parties Procurement, product reception, storage, picking, packing and transportation coordination Pharmaceutical and consumer products Contract manufacturing Logistics services to 3 rd parties Manufacturing of branded generics Own brand marketing Brand development Medical visits Exclusive distribution Go to Market Sales force Warehousing and planning Trade marketing Exclusive representations Non-exclusive distribution Third parties Third parties 23

24 INRETAIL + QUICORP - FINANCIAL AND OPERATIONAL SNAPSHOT Food Retail Pharma 1/ Shopping Malls 2017 figures (PEN mm; %) + + = (Proforma) 1/ Revenues % Revenues 4,652 40% 6,898 57% 476 4% 11,974 Adj. EBITDA 2/ % EBITDA % % % 1,016 Adj. EBITDA Margin 6.7% 6.1% 80.9% 8.5% Market Position 1 st 1 st 1 st 1 st # of Stores 268 2, # of Employees 14,590 23, ,206 Countries 1/ Preliminary proforma combined figures for / Shopping Malls EBITDA was adjusted for mark to market gains from valuation of investment properties. Mifarma EBITDA was adjusted for extraordinary expenses related to the acquisition of Albis. 24

25 Subsequent events 1. Quicorp Acquisition 2. Real Plaza Acquisitions 25

26 Acquisition of Real Plaza Pucallpa and Estación Central +37,483 sqm of GLA, totaling 670,393 sqm of GLA InRetail Shopping Malls now owns and operates 21 shopping centers Real Plaza Pucallpa: Pucallpa is a city located in the east of Peru (in the rainforest) with ~212k inhabitants 1 st mall to open in Pucallpa (and in the east of Peru) Opened in September anchor stores: Plaza Vea, Oechsle, Promart and Cineplanet Real Plaza Pucallpa Estación Central: Strip center in Downtown Lima Opened in September

27 4 Capex guidance 27

28 Capex guidance 2018 Key Investments Projected CAPEX of S/ 2 B for Opening of +7,600 sqm of sales area Supermarkets Start operations of our new distribution center in 1H18 Finish construction and start operations of our new production facility and fresh food warehouse Continue expanding Mass By Type of Investment Pharmacies # of store openings under revision Shopping Malls Start construction of Puruchuco mall (+120k sqm of GLA) ~+8k sqm of GLA from mall expansions Acquisition of Real Plaza Pucallpa and Estación Central (+37,483 sqm of GLA) 28

29 Vanessa Dañino IRO Alessandra Garrido IR Senior Analyst Shirley Perez IR Analyst IR Phone:

30 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