Ripley Corp. May st Quarter 2016 Results

Transcription

1 Ripley Corp May st Quarter 2016 Results

2 1Q16 HIGHLIGHTS Ripley Colombia: Closing of operations progressing according to plan Increase in Inmobiliaria Mall Viña del Mar share: Real estate assets at fair value reach US$ 707 million Ripley Corp dividend distribution 1Q16 RESULTS Ripley Corp: Net income of continued operations increases reaching $4,957 million, growth in the company s gross margin and positive tax behavior partially offset by $6,840 million in non-recurring charges Ripley Chile: Positive SSS and improving margins in retail; decrease in Bank s net risk costs reflecting positive trend Ripley Peru: Positive SSS but higher markdowns in retail; maintaining significant loan portfolio growth with controlled risk LOOKING FORWARD Retail: Focus on growth through profitability and efficiency Bank: Growth focused in existing clients, developing new products to create a bank focused on people Real Estate: Improve profitability as new projects launch and existing projects mature

3 1Q16 HIGHLIGHTS Ripley Colombia: Closing of operations progressing according to plan Increase in Inmobiliaria Mall Viña del Mar share: Real estate assets at fair value reach US$ 707 million Ripley Corp dividend distribution 1Q16 RESULTS Ripley Corp: Net income of continued operations increases reaching $4,957 million, growth in the company s gross margin and positive tax behavior partially offset by $6,840 million in non-recurring charges Ripley Chile: Positive SSS and improving margins in retail; decrease in Bank s net risk costs reflecting positive trend Ripley Peru: Positive SSS but higher markdowns in retail; maintaining significant loan portfolio growth with controlled risk LOOKING FORWARD Retail: Focus on growth through profitability and efficiency Bank: Growth focused in existing clients, developing new products to create a bank focused on people Real Estate: Improve profitability as new projects launch and existing projects mature

4 CLOSING OF RIPLEY COLOMBIA 1Q16: HIGHLIGHTS On February 18th 2016, Ripley announced the closing of operations in Colombia, after significant efforts to meet the investment plan This decision will generate approximately US$ 18 million in positive cash flow projected for 2016, including the expenses associated with the closure, in addition to the elimination of recurring losses in the country The development of the closure is progressing according to plan. As of May 30th 2016 all stores were already closed and the portfolio was sold and transferred to Banco Popular CLOSING OF OPERATIONS PROGRESSING ACCORDING TO PLAN

5 1Q16: HIGHLIGHTS SHARE IN INMOBILIARIA MALL VIÑA DEL MAR On march 1st 2016, Cencosud announced an agreement to sell its 1/3 stake in Inmobiliaria Mall Viña del Mar S.A. to Parque Arauco Based on the shareholders agreement, Ripley announced on march 29th the exercise of its preferred right to acquire from Cencosud 1/6 of the shares of Inmobiliaria Mall Viña del Mar S.A. On April 18th, 2016 this option was executed thus Ripley has a 50% stake of the company that owns Mall Marina Arauco and Boulevard Marina Arauco in Viña del Mar, and Mall Curico shopping center in the city of the same name. INCREASING SHARE ON UNIQUE ASSETS WITH LOW LEVERAGE

6 NON-ACCOUNTED FAIR VALUE 1Q16: HIGHLIGHTS Considering a 50% share in Inmob. Mall Viña del Mar and based on Cencosud/Parque Arauco price, Ripley s stake would worth MMUS$241 Valuing Nuevos Desarrollos and Aventura Plaza at fair value recognizes an additional value of MMUS$146 Real estate investments valued at fair value are worth MMUS$ Mall Concepción I. Mall Viña del Mar Nuevos Desarrollos Aventura Plaza Total 100% 50% 22,5% 40% Book Value (MMUSD Dec) Valuation (MMUSD) Amounts in USD millions REAL ESTATE INVESTMENTS, VALUED AT FAIR VALUE, REPRESENT MMUS$707 FOR RIPLEY Source: Nuevos Desarrollos and Aventura Plaza, Dec-2015 audited financial statements

7 RIPLEY CORP DISTRIBUTES DIVIDENDS 1Q16: HIGHLIGHTS On April 26th the Annual Shareholders Meeting agreed to distribute dividends from retained earnings of the company. Equivalent to CLP $11.62 per share, representing 50% of 2015 net income from continued operations. This dividend was distributed to every shareholder owning stocks by May 13th. Ripley Corp maintains a strong balance sheet with high levels of cash and low debt levels in each of the Company s business segments

8 RIPLEY CORP EBITDA CALCULATION As of 2016, for the purpose of calculating EBITDA financial expenses of bank subsidiaries are not considered, which were previously included as part of the operational cost. Thus, as of 1Q16, the EBITDA is calculated as operating income without depreciation and without financial expenses of banks which are included as operating costs. There have been no changes to Ripley Corp s income statement. The information necessary to calculate the EBITDA in both the new or previous methodology is available. 1Q16: HIGHLIGHTS THIS CHANGE IN PRESENTATION AIMS TO AVOID CONFUSION IN THE CALCULATION OF LEVERAGE AND VALUATION INDICATORS.

9 1Q16 HIGHLIGHTS Ripley Colombia: Closing of operations progressing according to plan Increase in Inmobiliaria Mall Viña del Mar share: Real estate assets at fair value reach US$ 707 million Ripley Corp dividend distribution 1Q16 RESULTS Ripley Corp: Net income of continued operations increases reaching $4,957 million, growth in the company s gross margin and positive tax behavior partially offset by $6,840 million in non-recurring charges Ripley Chile: Positive SSS and improving margins in retail; decrease in Bank s net risk costs reflecting positive trend Ripley Peru: Positive SSS but higher markdowns in retail; maintaining significant loan portfolio growth with controlled risk LOOKING FORWARD Retail: Focus on growth through profitability and efficiency Bank: Growth focused in existing clients, developing new products to create a bank focused on people Real Estate: Improve profitability as new projects launch and existing projects mature

10 REVENUES : 3.7% increase Positive SSS in both countries of operation 7.2% growth of consolidated loan portfolio RIPLEY CORP 1Q16 RESULTS EBITDA: increases 6.2% to $25,590 Increase in consolidated gross margins NOTE: As of 1Q16, the EBITDA is calculated as operating income without depreciation and without financial expenses of banks which are included as operating costs NET INCOME CONTINUED OPERATIONS: increases 150,8% to $4,957 Positive behavior in tax Non-recurring charges of $6,840 related to new service model & restructuring DISCONTINUED OPERATIONS: Profits due to a marginally higher than expected performance of the closing process in Colombia 1st QUARTER 2016 RESULTS GROSS MARGIN IMPROVEMENT AND POSITIVE TAX BEHAVIOR PARTIALLY OFFSET BY $6,840 MILLION IN NON-RECURRING CHARGES Amounts in CLP millions

11 1st QUARTER 2016 RESULTS RIPLEY CHILE RETAIL BUSINESS REVENUES: SSS increase 4.8% Retail revenues increased 3.4% driven by an increase in the apparel departments both men and women, in line with the strategic plan of the company GROSS MARGIN: Increased in 105 bps increase in sale of soft goods over hard goods, in line with the strategic plan of the company EBITDA: decreased to $488 SG&A increases 9.7% driven by inflation-adjusted expenditures, a lower contribution of the bank to the store and to non-recurring expenses of hiring and staff training associated with the new service model of stores SAME STORE SALES OF 4.8% IMPROVING GROSS MARGIN REACHING 27.7% Amounts in CLP millions

12 1st QUARTER 2016 RESULTS REVENUES: 0.7% increase Loan portfolio mainly flat, decreasing 0.3% OPERATIONAL COSTS: 2.7% decrease in comparable terms Funding costs increase 20.1% due to an increase in the financial debt Decrease of 9.0% in risk cost in comparable terms NET PROFIT increased 2.9% to $7,800 RIPLEY CHILE FINANCIAL BUSINESS SG&A increased 3.9% compared to 1Q15 due to nonrecurring expenses related to labor cost reduction process NET PROFIT GREW 2.9% 9.0% DECREASE IN NET RISK COST Amounts in CLP millions

13 1st QUARTER 2016 RESULTS In 2016 MIGRATION TO RIPLEY MASTERCARD - CHILE Resume growth in loan portfolio Greater selectivity with new clients based on risk profile Percentage of loan portfolio Continue with existing client migration from Private Label Card to Mastercard Temporary rise at the beginning of 2016 due to write-offs in refinanced portfolio after higher risk observed in early 2015 Amounts in CLP millions COST SHOWS POSITIVE TREND SINCE ITS PEAK IN FEBRUARY 2015 Source: Chilean Banking Regulator (SBIF)

14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 MMMCLP MMMCLP 1st QUARTER 2016 RESULTS CREDIT RISK SHOWING POSITIVE TREND 22% 20% 18% NPL's 1-90 Days Improvement to origination led to a credit risk positive behavior Indicators of early NPL s improving Latest increase in credit risk due to higher write offs in renegotiated loans Renegotiated loans portfolio decreases in recent months 16% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Net Provision Expense (Does not consider contingent and prudencial provisions) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Renegotiated Loans (Stock) RISK CONTINUES TO IMPROVE IN LINE WITH EXPECTATIONS Amounts in CLP Million

15 1st QUARTER 2016 RESULTS REVENUES: 2.1% increase in Chilean currency (2.5% measured in Peruvian currency) SSS increased 2.8% explained by a positive behavior in consumption Store remodeling limited selling space of the most significant stores in Peru, offset by the opening of one new store since 1Q15 GROSS MARGIN: Decreased by 109 bps to 25,2% Higher level of markdowns during the period due to higher inventory levels at the end of the previous period EBITDA: registered $-151 RIPLEY PERU RETAIL BUSINESS DECREASE IN MARGINS DUE TO MARK DOWNS BY HIGHER INVENTORY LEVELS AT THE END OF 4Q15 Amounts in CLP millions

16 4th QUARTER 2015 RESULTS REVENUES: increased 15.9% YoY RIPLEY PERU FINANCIAL BUSINESS Loan portfolio grew 28.7% 1. Enhanced network productivity and collection processes 2. Aligned relationship between the bank and the store NET INCOME: 13.6% increase, reaching $3,678 Operational costs increased 49.1% 1. Increase of 48.0% in risk provisions, in line with the growth of the loan portfolio 2. Financial expenses increased 54.8% Significant growth of loan portfolio during 2015 Deterioration in payment behavior of the Peruvian banking system, due greater political uncertainty LOAN PORTFOLIO GROWTHS 30.5% YoY NET INCOME GREW 13.6% YoY Amounts in CLP millions

17 1st QUARTER 2016 RESULTS NET INCOME GREW 29.1% Mall Concepción: Net income decreases due to legal fees and expenses associated with the construction of the office tower Inmobiliaria Viña del Mar: Net Income decreases by non-operational effects Nuevos Desarrollos: Lower comparable basis due to weather damages that affected Mall Plaza Copiapo at 1Q15 Aventura Plaza: Higher profitability as project continues to mature REAL ESTATE BUSINESS PROFITABILITY KEEPS INCREASING AS NEW PROJECTS ARE LAUNCHED AND SHOPPING MALLS MATURE Amounts in CLP millions

18 1Q16 HIGHLIGHTS Ripley Colombia: Closing of operations progressing according to plan Increase in Inmobiliaria Mall Viña del Mar share: Real estate assets at fair value reach US$ 707 million Ripley Corp dividend distribution 1Q16 RESULTS Ripley Corp: Net income of continued operations increases reaching $4,957 million, growth in the company s gross margin and positive tax behavior partially offset by $6,840 million in non-recurring charges Ripley Chile: Positive SSS and improving margins in retail; decrease in Bank s net risk costs reflecting positive trend Ripley Peru: Positive SSS but higher markdowns in retail; maintaining significant loan portfolio growth with controlled risk LOOKING FORWARD Retail: Focus on growth through profitability and efficiency Bank: Growth focused in existing clients, developing new products to create a bank focused on people Real Estate: Improve profitability as new projects launch and existing projects mature

19 LOOKING FORWARD MAIN FOCUS MAIN SOURCE OF GROWTH & PROFITABILITY ROE 2015 RETAIL - Fashion & Brands - Increase Profitability Increase in margins through strategic Plan 3D focused on brands and new service model Strengthening ecommerce channel Increase in square meters and higher store maturity 2.3% -5.9% BANK - Competitive Credit Card - New Core Banking System Migrate clients to Mastercard Continue growth leveraging on known clients Gradual increase in leverage Develop current accounts & debit cards 18.4% 18.0% REAL ESTATE - Begin Operation of Projects Under Development Greater maturity of existing shopping malls reflecting non-accounted fair value Developing projects and land banks begin operating 9.3% 8.7% 6.3%* *ROE of continuous operations Source: Ripley Corp s Mar-16 Financial Results

20 1Q16 HIGHLIGHTS Ripley Colombia: Closing of operations progressing according to plan Increase in Inmobiliaria Mall Viña del Mar share: Real estate assets at fair value reach US$ 707 million Ripley Corp dividend distribution 1Q16 RESULTS Ripley Corp: Net income of continued operations increases reaching $4,957 million, growth in the company s gross margin and positive tax behavior partially offset by $6,840 million in non-recurring charges Ripley Chile: Positive SSS and improving margins in retail; decrease in Bank s net risk costs reflecting positive trend Ripley Peru: Positive SSS but higher markdowns in retail; maintaining significant loan portfolio growth with controlled risk LOOKING FORWARD Retail: Focus on growth through profitability and efficiency Bank: Growth focused in existing clients, developing new products to create a bank focused on people Real Estate: Improve profitability as new projects launch and existing projects mature

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