Earnings Presentation FIRST QUARTER 2016
Agenda 1 Highlights of the period 2 Consolidated overview 3 Overview by Business Units 4 Overview by Country 5 Balance Sheet Financials 6 Q&A
First Quarter Highlights Businesses remain resilient with revenues and Same Store Sales growth in local currency across the region except Brazil Adjusted EBITDA margin improved across the region reaching 7.5% (+149 bps YoY) Adjusted EBITDA improved 16,9% despite of currency devaluation across de region Net Debt/ Adj. EBITDA ratio falls 56 bps vs reaching 3.27x. Excluding one offs the ratio was 2.86x in 3
Focusing on Efficient Core Businesses Non-performing store program implemented 170 stores under program, all already reviewed 15 stores closed to date 15% of the stores achieved positive EBITDA generation and 66% of total stores achieved an EBITDA growth greater that the average of its banner Continue divesting non-core assets Sale of unproductive real estate in Chile As of March, 16 properties had already reached an agreement for sale Due Diligence process of Gas Station business in Colombia in final stage 4
Agenda 1 Highlights of the period 2 Consolidated overview 3 Overview by Business Units 4 Overview by Country 5 Balance Sheet Financials 6 Q&A
jan/15 jan/15 mar/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 jan/15 feb/15 mar/15 apr/15 may/15 jun/15 jul/15 aug/15 sep/15 oct/15 dec/15 jan/16 feb/16 mar/16 jan/15 jan/15 mar/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 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 Currency Impact Lowers CLP Revenue 2,652,647 Revenues 2,483,844 80 70 60 50 40 LatAm currency depreciation against CLP ARS 250 230 210 190 170 150 BRL -6.4% 230 210 190 170 150 PEN 0,28 0,26 0,24 0,22 0,2 COP Revenues decreased due to currencies devaluation vs CLP, despite positive SSS across almost all markets All figures are in CLP million 6
Cost Management Drives Robust EBITDA COGS SG&A Adjusted EBITDA Performance 1,912,100 1,763,980 629,784 587,777 185,581-7.7% -6.7% 158,759 +6.0% +16.9% +7.5% Costs control program yields benefits across business Joint promotional activities with suppliers Centralization of own production Improvement in processes Decrease in travelling & discretionary expenses All figures are in CLP million Double digit adjusted EBITDA growth Considering constant exchange rates YoY, Adjusted EBITDA would have increased by 33.5% Strong performance from financial services, department stores and supermarkets divisions Adjusted EBITDA Margin expanded 149 bps 7
Agenda 1 Highlights of the period 2 Consolidated overview 3 Overview by Business Units 4 Overview by Country 5 Balance Sheet Financials 6 Q&A
Revenues by Business Units 1,989,177 Supermarkets 1,813,974-8.8% Home Improvement 348,006 324,369-6.8% All figures are in CLP million Department Stores 247,215 222,927 +10.9% Supermarket sales were mainly affected by currency devaluation of Argentina, Brazil and Colombia. Excluding Brazil, Supermarket SSS grew in all countries, moreover traffic increased in Colombia and Chile Home Improvement SSS growth QoQ in Chile. In Colombia SSS increased due to higher traffic Revenue growth in Department Stores driven by improved performance at Johnson and increased omnichannel sales, achieving double-digit SSS growth in Chile & Peru 9
Revenues by Business Units Shopping Centers Financial Services 55,258 55,964 36,464 39,733 +1.3% +9.0% Improvement in tenant sales and parking revenues in Chile Increased occupancy rate and updated tenant contracts in Peru Argentina impacted by currency devaluation All figures are in CLP million Revenues increased in Peru and Argentina explained mainly by the Portfolio expansion, higher fee income collection and increased insurance sales Lower business contributions due to increased cost of funding in Colombia and currency devaluation 10
Adjusted EBITDA by Business Units 112,361 Supermarkets 122,087 +8.7% Home Improvement 45,123 40,377-10.5% All figures are in CLP million Department Stores 7,735 4,819 +60.5% In supermarkets Adj. EBITDA increased despite the currency devaluation. Adj. EBITDA margin in Chile reached 10.4% in and Argentina, Brazil and Colombia improved over 50 bps YoY EBITDA margin expanded by 97 bps in Department Stores explained by increased profitability at Johnson and better transition among seasons Lower EBITDA margin in Home Improvement driven by high gross margin comparison bases in Chile and slowdown in consumption in Argentina 11
Adjusted EBITDA by Business Units Shopping Centers Financial Services 43,630 43,217 12,075 17,736-0.9% +46.9% Chile reflects higher parking sales and variable income by greater sales from tenants, partially offset by the impact of the Tax Reform In Peru higher EBITDA mainly reflects increased occupancy rates in the Arequipa Mall and the update of leasing contracts Argentina reflects the devaluation of the currency and higher utilities costs All figures are in CLP million Higher results from Argentina and Peru after the portfolio increase in these countries In Chile higher profitability driven by lower costs of funding and the positive impact after the JV with Scotiabank 12
Agenda 1 Highlights of the period 2 Consolidated overview 3 Overview by Business Units 4 Overview by Country 5 Balance Sheet Financials 6 Q&A
Overview by Country: CHILE Revenue Performance 961,745 1,031,718 Adjusted EBITDA Performance 73,098 93,990 +7.3% +7.6% +28.6% +9.1% Revenue growth across Supermarkets, Home Improvement and Department Stores SSS improvement as a result of higher ticket driven by more promotional activities, mix adjustment, good performance in campaigns and season categories Partially affected by Easter All figures are in CLP million Gross Margin improved in supermarkets and department stores Adj. EBITDA growth across the board, driven by lower SG&A and lower shrinkage 14
Overview by Country: Argentina Revenue Performance Adjusted EBITDA Performance 755,499 +21.0% +32.3% 62,470 622,353 56,773-17.6% +8.3% -9,1% +9.1% Lower revenues as a result of currency devaluation Revenues in local currency increased, driven by growth in Supermarkets and Home Improvement SSS Slowdown in consumption Adj. EBITDA increased in Supermarkets and Home Improvement in local peso terms In Chilean peso the Adjusted EBITDA reduced due to the impact of the Argentine Peso devaluation All figures are in CLP million % Growth in local currency 15
Overview by Country: Brazil Revenue Performance Adjusted EBITDA Performance 476,416-2.9% +25.0% 9,037 378,855 8,713-20.5% +1.8% +3.7% +2.4% All figures are in CLP million In Chilean peso terms revenues decreased as a result of the Real devaluation SSS declined by 2.3% as a result of lower sales in Bretas and non-food in Gbarbosa, which was partially offset by growth in Prezunic, Mercantil Rodriguez and food in Gbarbosa SSS improved QoQ as a result of higher food sales % Growth in local currency Gross Margin expanded YoY for the 6th consecutive quarter, growing 211 bps. This growth is the result of better promotional activity and lower shrinkage In supermarkets adjusted EBITDA improved 9.2% in Chilean peso and margin expanded 53 bps as result of better control expenses and pricing strategy 16
Overview by Country: Peru Revenue Performance Adjusted EBITDA Performance 231,528 +5.7% +58.8% 244,132 14,465 22,760 +5.4% +6.2% +57.3% +9.3% Revenues increased 2.9% in Supermarkets and 21.8% in Department Stores In local currency, revenues also grew as a result of Supermarkets SSS growth YoY and brand consolidation Gross Margin expanded 17 bps by increased contribution of private label, which was partially offset by higher promotional activities Adjusted EBITDA increased as a result of higher profitability from department Stores, Shopping centers and financial retail operation All figures are in CLP million % Growth in local currency 17
Overview by Country: Colombia Revenue Performance 227,459 +6.1% -9.1% 206,785 In supermarkets in local currency terms, revenues grow explained by SSS growth after getting traction from food Home Improvement, the revenue in local currency increased as a result of 9.9% growth in SSS In Chilean peso terms revenues decreased explain by the devaluation of the COP against CLP Isolating the effect of the wealth tax paid once a year (Mar 2015 6,519 MM CLP / Mar 2016 5,567 MM CLP Adjusted EBITDA Performance 6.533 2,9% 14 0% +1643.9 % 22174.7 % 8.588 4,2% 3,021 1.5% Gross margin growth as a result of lower shrinkage, higher rebates and lower logistic costs The profitability improvement was primarily the result of our efficiency plan, which decreased headcount and lowered promotional activity All figures are in CLP million % Growth in local currency % Adjusted EBITDA and Adj. EBITDA margin excluding wealth Tax effect 18
Agenda 1 Highlights of the period 2 Consolidated overview 3 Overview by Business Units 4 Overview by Country 5 Balance Sheet Financials 6 Q&A
Financial Ratios: reducing debt and leverage Net debt evolution (US$ bn) Net leverage (net debt / Adj. EBITDA) 6,316 4,684 4,265 3,239 3,641 4.6 3.4 3.7 3.3 3.27 3.0x 2012 2013 2014 2015 2012 2013 2014 2015 Net leverage (excluding one offs) 3.83 2.86 Since 3Q15 Fair Value of Derivatives was reclassified from Other gains/losses to Net Financial Cost and Income/Loss from foreign exchange variations. For further information please refer to note 35 on Consolidated Financial Statements. 20
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2045 Financial Ratios: Comfortable Liquidity Position Debt amortization schedule (USD MM) 1.218 294 127 231 213 51 780 18 34 699 50 40 213 40 14 81 355 In 2016 includes USD 23 MM in overdraft for working capital Breakdown by Rate (After CCS) Variable 27% Fix 73% Variable 37% Fix 63% Breakdown by Currency (After CCS) 0% 1% 1% 3% 19% 16% 60% CLP UF USD BRL COP PEN ARS 1% 4% 3% 31% 15% 46% 21
Agenda 1 Highlights of the period 2 Consolidated overview 3 Overview by Business Units 4 Overview by Country 5 Balance Sheet Financials 6 Q&A
Closing Comments Strong start to 2016 Strong performance despite downturn in consumption Continuing to deleverage Store profitability focus remains high priority Argentina showing near-term challenges, with a more favorable long-term growth outlook 23
24 The information contained herein has been prepared by Cencosud S.A. ( Cencosud ) solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities and should not be treated as giving investment or other advice. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. Any opinions expressed in this presentation are subject to change without notice and Cencosud is under no obligation to update or keep current the information contained herein. The information contained herein does not purport to be complete and is qualified in its entirety by reference to more detailed information included in the preliminary offering memorandum. Cencosud and its respective affiliates, agents, directors, partners and employees 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. Costanera Center - Chile This presentation may contain statements that are forward-looking subject to risks and uncertainties and factors, which are based on current expectations and projections about future events and trends that may affect Cencosud s business. You are cautioned that any such forward-looking statements are not guarantees of future performance. Several factors may adversely affect the estimates and assumptions on which these forward-looking statements are based, many of which are beyond our control.
Marisol Fernández IRO Phone: +562 2959 0545 mariasoledad.fernandez@cencosud.cl Natalia Nacif Senior IR Analyst Phone: +562 2959 0368 natalia.nacif@cencosud.cl Valentina Klein IR Analyst Phone: +562 2200 4395 valentina.klein@cencosud.cl Upcoming Events May 26 Earnings Conference Call June 1-2 Bank of America s Annual Emerging Markets Corporate Conference June 14-16 Bank of America s 2016 CalGEMs Conference August 3 4 10th Annual Credit Suisse CEO/CFO Mid- Summer LatAm Conference September 13 & 14 Cencosud Day in Buenos Aires