CORPORATE PRESENTATION

Transcription

1 CORPORATE PRESENTATION 2017

2 InRetail Overview Multi-format retailer with exclusive focus in Peru Leading positions in its 3 segments #1 supermarket chain #1 pharmacy chain #1 shopping center operator Controlled by Intercorp Peru, one of Peru s largest business groups 2

3 InRetail is part of one of Peru s leading business groups 100.0% 77.6% Education Float 1/ 28.8% BVL: INRETC1 1/ Includes 6.3% of Nexus 3

4 InRetail at a Glance Supermarkets Pharmacies Shopping Malls LTM (US$ millions) Revenues 1, ,322 % of Revenues 58.8% 35.1% 6.1% Adjusted EBITDA Adj. EBITDA Margin 1/ 6.6% 8.5% 80.0% 10.5% % of Adj. EBITDA 36.5% 28.2% 35.2% # Stores / S.Centers 231 1, Sales area / GLA 319,168 sqm N/A 627,231 sqm # Employees 14,249 11, Note: FX of (average LTM ) 1/ For Shopping Malls is calculated over the Net Rental Income 4

5 SIGNIFICANT UPSIDE POTENTIAL MARKET LEADERSHIP WITH CLEAR STRATEGY STRONG FINANCIAL RESULTS CAPEX

6 1 SIGNIFICANT UPSIDE POTENTIAL 6

7 Fastest growing economy boosts emerging middle class ( CAGR) Real GDP Growth Population by Socio-Economic Category 4.6% ~1.9x 2.4% SEC Annual Income % of total population A Perú Latin America 1/ 1/ Average Real GDP growth of Colombia, Brazil, Chile, Mexico Source: IMF World Economic Outlook B $ 24,180 5% 15% +29 p.p. (2016, US$ 000) GDP per Capita C $ 13,575 14% 33% Average: US$ D E $ 7,272 $ 4,545 25% 54% 35% 17% -29 p.p. Source: APOYO Consultoría 2017 Argentina Chile Mexico Brazil Colombia Peru Source: IMF World Economic Outlook Estimates 7

8 Significant upside potential for modern retail Supermarkets Pharmacies Shopping Malls Penetration as a % of Total Sales Sales of Retail Pharma per capita US$ Malls per million people Mean ex-peru: 58.8% ~2.4x Sales area per capita: Peru 0.23 sqm vs Mexico 0.40 sqm 52% 56% 59% 68% Mean ex-peru: ~2.6x 208 Mean ex-peru: 3.9 ~1.7x % Peru Brazil Ecuador Chile Mexico Peru Colombia Mexico Brazil Chile Peru Brazil Colombia Ecuador Chile Source: Euromonitor, 2016 Source: Business Monitor, 2015 Source: Accep

9 Peru: Rising Retailing Market in Peaking Stage Global Retail Development Index Opportunities Opening Peaking Maturing Closing Peru top-ranked LatAm country in the GRDI 2016 Ranking Peru (2015) Brazil (2013) Mexico (2009) 1. China 6. Turkey 9. Peru 15. Colombia 20. Brazil 25. Paraguay Brazil (2005) Chile (1998) Mexico (2003) Peru (2002) Chile (2016) Mexico (2016) Peru: Growing middle class Consumers willing to explore organized formats Consumers seek organized formats and global brands Real estate affordable and available Consumer spending has expanded Sophisticated local competition Real estate difficult to secure Consumers used to modern retail Higher discretionary spending High competition Real Estate expensive and not readily available Retail is gaining force, mainly in some of Lima s emerging neighborhoods and in secondary cities Consumer confidence is the highest in LatAm Increasing development of malls with space for new players. Strong interest from fast-fashions Source: ATKearney The 2016 Global Retail Development Index TM 9

10 2 MARKET LEADERSHIP WITH CLEAR STRATEGY 10

11 Largest nationwide footprint of premier retail locations Supermarkets Pharmacies Shopping Malls 106 Spmkts 125 Mass 1,155 Stores 19 Malls (8) (7) (1) (5) (2) (59) (7) (52) (37) (77) (23) (39) Piura (2) Chiclayo Trujillo Cajamarca (3) (1) (1) (41) (20) (9) (21) Chimbote Huánuco (74) (125) (3) (2) (2) (2) (2) (47) (483) (3) (51) (15) (34) (4) (70) (5) (25) Lima (8) Huancayo Cusco Juliaca Arequipa (1) (1) (9) (16) Only modern shopping mall First mover in 17 out of the 23 cities outside of Lima Total sales area (sqm): 319,168 62% of stores are owned 1/ Present in all of Peru s 24 departments 100% of stores are rented 42% in Lima / 58% in Provinces First mover in 6 out of the 12 cities Total GLA (sqm): 627,231 1/ Owned by Supermercados Peruanos or through a related party 11

12 Openings and SSS by Segment Openings Same Store Sales (SSS) Supermarkets Sales Area ( 000 sqm) Supermarkets 4.4% 3.2% 0.4% 3.7% 1.2% 7.9% 5.8% YTD 17: 5.8% 3.9% Q1 17 Q Q1 17 Q2 17 N o Spmkts N o Mass Pharmacies N o Stores Pharmacies YTD 17: -4.5% ,107 1,125 1,149 1, % 2.7% 8.5% 5.1% 5.9% Q1 17 Q % Q % Q % Shopping Malls GLA ( 000 sqm) Shopping Malls YTD 17: 2.9% % 5.2% 2.6% 4.7% 5.2% 3.1% 4.6% 1.3% Q1 17 Q Q1 17 Q2 17 N o Malls Note/ Shopping Malls SSS include anchor stores 12

13 Supermarkets Segment Formats One stop shop: food and non-food products, and entertainment to differentiate from traditional markets Brand Sales area range (m2) # of Stores Total / Provinces Revenues LTM S/4,532 mm Attractive price positioning through Every Day Low Price strategy Fastest growing chain with largest presence across Peru 2,000 5, / 28 Compact Hypermarkets 79% Compact sized formats provide flexibility to grow Secured access to landbank and Real Estate team to sustain growth Launched e-commerce platforms for Plaza Vea and Vivanda brands 500 2, / 6 Supermarkets 15% Ranked 12 th among the most valuable brands in Peru (Brandz) 900 1,200 9 / 0 Figures as of the las twelve months September2017 *Supermarkets consider revenues from Mass format High-end 6% 13

14 Discount Model Low CAPEX, low cost, every day low price format to capture untapped demand and penetrate traditional trade 125 stores between 100 and 300 sqm in Lima Testing value proposition (assortment, price, store size, etc.) Ensuring cost structure through store productivity and efficient supply chain Piloting a small distribution center in the south of Lima 14

15 Pharmacies Segment Pharmaceutical Retail Market Sustainable Every Day Low Price strategy High market-share Player # of Stores Modern Market Total Market Strong bargaining power with suppliers High penetration of profitable private labels Operational efficiencies with fast store growth Mom & Pops ~7,000 32% Small, standardized formats (~120 sqm) Limited Capex of US$60,000 per store 100% leased stores with proven renewal track record Other chains ~ 1,500 53% 35% Ranked 11th among the most valuable brands in Peru (Brandz) 1,149 48% 32% Assisted Sales Model Note: Figures as LTM Source: IMS. 15

16 Shopping Malls Segment Nationwide premium portfolio of 19 locations Sales (S/ millions) ,458 Shopping Malls Sales 7, k sqm of GLA, an expansion of 7% over the last 24 months 4,135 2,580 2,173 2,167 Preferred partner for local and international tenants: High tenant renewal rates and low concentration of renewal per year Source: ACCEP 2017 Falabella includes Open Plaza and 60% of Mall Aventura Plaza Parque Arauco includes its malls and 50% of Mega Plaza 1/ 6 additional malls, 40% of Aventura Mall and 50% of Mega Plaza Otros 1/ High occupancy levels despite recent important additions in GLA Occupancy Rates 92% 93% 94% 97% 97% 96% 96% 97% Secured access to landbank to sustain growth Ranked 4 th among most valuable brands in Peru (Brandz) Q1 17 Q

17 3 STRONG FINANCIAL RESULTS 17

18 Consolidated Financial Results Million Soles (S/ mm) Highlights Revenues Resilient growth in revenues and double digit growth in net income, in a still slow macroeconomic environment 5, % 5,690 Supermarkets: high single digit growth in revenues and double digit growth in EBITDA 6.5% Pharmacies: revenue growth improvement and consistent gross margin expansion 1,794 1,912 Shopping Malls: high occupancy rates and positive tenants SSS Adj. EBITDA +2.5% Gross Margin Net Income YTD 16 YTD % 31.0% 30.7% 30.5% +4.0% % 28.9% YTD 16 YTD 17 YTD 16 YTD 17 Margin 10.9% 10.5% 10.6% 10.1% Margin 2.7% 3.3% 3.3% 3.2% 18

19 Financial Results by Format Million Soles (S/ mm) Revenues Adj. EBITDA +7.4% +2.8% 6.7% 5,001 39% 5,372 38% Pharmacies Spmkts 4.7% % % 1,689 40% 60% 1,802 39% 61% 61% 62% % 48% % 51% 50% 54% YTD 16 YTD 17 YTD 16 YTD 17 Gross Margin 28.8% 28.8% 28.5% 28.5% Margin: 7.2% 7.1% 7.1% 6.8% +4.2% +0.4% % -0.4% YTD 16 YTD 17 YTD 16 YTD 17 Gross Margin Net Rental 70.3% 69.4% 69.4% 66.9% 83.1% 79.5% 82.8% Margin: 79.9% 19

20 Pharmacies Supermarkets InRetail Consumer - Financial Results Million Soles (S/ mm) Revenues Adj. EBITDA 3, % 3, % % 10.7% 1,018 1, YTD 16 YTD 17 YTD 16 YTD 17 Gross Margin 26.5% 26.4% 26.3% 26.1% Margin: 5.8% 6.0% 5.8% 6.0% 1, % 2, % % -1.2% YTD 16 YTD 17 YTD 16 YTD 17 Gross Margin 32.6% 32.9% 32.4% 32.9% Margin: 9.4% 8.9% 9.2% 8.3% 20

21 Consolidated Net Income Million Soles (S/ mm) Net Income +4.0% Net Income Breakdown % Net Margin 2.7% 3.3% YTD % YTD % Net Income EBITDA Growth Lower Net Financial Expenses Higher Mark to Market FX Higher D&A Higher Tax Net Income Net Income excluding FX and mark-to-market +1.0% Net Income : +8.3% +8.3% +2.2% Adjusted EBITDA % Financial Expenses, net YTD 16 YTD % Taxes Net Margin 3.3% 3.3% 3.2% 3.0% 21

22 Consolidated Capex and Free Cash Flow Million Soles (S/ mm) CAPEX Cash-Flow Breakdown 2016: S/ 523 mm YTD 17: S/ 408 mm Q1 16 Q2 16 Q4 16 Q1 17 Q2 17 Starting Cash Balance 2017 Operating Cash Flow CAPEX Debt Increase Financial Expenses Other Non- Operating Investing Activities Ending Cash Balance Free Cash Flow LTM : S/ 247 mm 22

23 Consolidated Financial Debt Million Soles (S/ mm) Consolidated Financial Debt USD Exposure 4.0x 4.0x 3.6x 2.9x 3.6x 3.6x 3.2x 3.3x 2.8x 3.5x 2.9x 3.4x 2.9x 72% 39% 42% 39% 23% 23% 22% 1.3x 28% 38% 35% 40% LTM LTM dic-14 dic-15 dic-16 sep-17 Net Debt/EBITDA Debt/EBITDA Hedge USD PEN Debt 1,668 1,722 2,446 2,670 2,659 2,792 2,780 Cash 1, Net Debt 542 1,398 2,160 2,344 2,227 2,357 2,330 1/ Since 2015, ratios are adjusted for positive hedge effect 23

24 Debt by Segment Million Soles (S/ mm) Total Consolidated Debt: S/2,780 mm Debt / EBITDA: 3.4x Net Debt / EBITDA: 2.9x 3.2x 2.9x 3.0x 2.8x 2.4x 2.0x 3.1x 2.6x 2.7x 2.2x 3.0x 2.4x 3.0x 2.6x 8.2x 5.4x 4.7x 5.5x 4.9x 4.4x 4.0x 4.3x 3.7x 4.3x 3.7x 4.2x 3.3x 0.4x LTM LTM LTM LTM Net Debt/EBITDA Debt/EBITDA Debt 976 1,095 1,347 1,422 1,402 1,519 1, ,111 1,248 1,257 1,273 1,205 Cash Net Debt ,179 1,220 1,125 1,245 1, ,120 1,095 1, / Since 2015, ratios are adjusted for positive hedge effect 24

25 USD Debt Exposure and Debt Maturity by Segment Million Soles (S/ mm) USD Exposure Debt Maturity 24% 31% 27% % 21% 55% 36% 22% 47% 19% 55% dic-14 dic-15 dic-16 sep Hedge USD PEN Interests Debt Maturity 1,277 55% 53% 54% % % 25% 26% 19% 20% 21% 20% dic-14 dic-15 dic-16 sep , Hedge USD PEN Interests Debt Maturity 25

26 4 CAPEX

27 CAPEX Key Investments Projected CAPEX of S/2 B for Supermarkets Opening of 4,800 sqm of sales area Initiated construction of new Distribution Center to be fully operational in 1H 2018 Shopping Malls 47% Supermarkets 40% Pharmacies 13% Pharmacies +70 new pharmacies By Type of Investment Logistics, IT, other 12% Maintenance 7% Shopping Malls Start construction of Puruchuco mall (120k sqm of GLA) Refurbishing and expansions 12% New stores, malls and landbank 70% 27

28 5 APPENDIX 28

29 Composition of Stores by Age Supermarkets 9% 12% 14% 11% 10% 7% 4% 6% 5% 5% 5% 10% 10% 10% 10% 9% 12% 14% 8% 9% 7% 10% 9% 11% 14% 7% 6% 4% 8% 10% 9% 10% 4% 6% 3% 5% 3% 8% 9% 7% 3% 5% 5% 3% 4% 73% 72% 72% 70% 72% 72% 72% 75% 78% 77% 78% 83% 83% 85% 88% Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q4 16 Q1 17 Q years 1-2 years 2-3 years Mature Pharmacies 18% 17% 16% 15% 15% 14% 12% 11% 11% 10% 12% 24% 23% 23% 18% 15% 15% 14% 13% 13% 12% 11% 8% 11% 18% 21% 20% 6% 20% 16% 14% 13% 12% 18% 19% 20% 9% 9% 8% 11% 10% 10% 17% 10% 9% 52% 52% 51% 49% 49% 51% 54% 59% 62% 64% 65% 62% 61% 62% 64% Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q4 16 Q1 17 Q years 1-2 years 2-3 years Mature 29

30 30 Cash Cycle Pharmacies Supermarkets Q Q Q Q Q Q Q Q Q Q Q Q Q Cycle Inventory Turnover Days Acc Payables Days Acc Receivables Q Q Q Q Q Q Q2 16 Q Q Q Q Q Q Days Acc Receivables Days Acc Payables Inventory Turnover Cycle

31 This material does not constitute an offering document. 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. Any offering of securities will be made solely by means of an offering memorandum, which will contain detailed information about the company and its business and financial results, as well as its financial statements. Securities may not be offered or sold in the United States unless they are registered or exempt from registration under the U.S. Securities Act of 1933, as amended. This p<resentation includes 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 forwardlooking 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.

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