Corporate Presentation

Transcription

1 Corporate Presentation Colombia Global Consumer and Retail Conference JP Morgan May 17-18, 2016 Brazil Argentina Uruguay The Issuers Recognition -IR granted by the Colombian Stock Exchange is not a certification about the quality of the securities listed at the BVC nor the solvency of the issuer.

2 Grupo Éxito Grupo Éxito is the regional leader retail company in South America. The Company operates more than 2,600 stores in Colombia through Grupo Éxito; in Brazil with Grupo Pão de Açucar; in Uruguay with Grupo Disco and Grupo Devoto, and inargentina with Libertad. Grupo Éxito s solid omni-channel model and its multi-format and multi-brand strategies make it the leader in hypermarkets under its Éxito, Extra, Geant and Libertad brands; in premium supermarkets under Carulla, Pão de Açucar, Disco and Devoto brands; in proximity under Carulla and Éxito Express, Devoto and Libertad Express and Minuto Pão de Açucar; in discount, the Company leads with Surtimax and Super Inter brands and in Cash and Carry with the Assaí brand. The Group is also the e-commerce leader in Colombia with and cdiscount.com.co and second player in Brazil with Cnova.com. Consolidated Net Revenues in 2015 totaled COP$33.4 billion derived from retail sales and its strong portfolio of complementary businesses: credit card, travel, insurance and real estate business with shopping malls in Colombia, Brazil and Argentina. Grupo Éxito is a company with clear competitive advantages derived from its strength in bricks and mortar, e-commerce and complementary businesses, the value of their brands and especially from the quality of its human resource. Today, the Company positions as one of the largest multinationals in Colombia and second in the retail sector in Latin America.

3 2015 Grupo Éxito s key facts starting point Large scale and powerful retail platform in South America 4 countries in South America ~300 MM potential customers 75% of region s population Combined GDP of US$ 3,300 Bn - 80% of the region s GDP* Consolidated Net Revenues 1 : USD$ 10.6 Bn Consolidated recurrent EBITDA 1 : USD$ 640 million 2,606 stores Leader in all modern retail segments Our management team has in average more than 15 years of retail experience + 200,000 employees Largest private employer of South America Top of class e-commerce retailer in South America # 6 global pure player by sales Real estate dual business model 790,000 m² GLA Best in class omnichannel model + 18 million customers *Source: IMF. 1 As of Dec 31, Includes Brazil and Argentina figures since September 1 st, 2015 using a FX rate COP /USD 3

4 Grupo Éxito: Proven Track Record of Successful Integrations Acquisition of Alliance with Acquisition of Acquisition of Acquisition of Leadership in supermarkets, strong presence in Bogota and expertise in prepared foods Became the biggest retailer in Colombia with nationwide presence Market share in Bogota and ramp up in sales 2010 International expansion Outperformed original business plan 2011 Launch of Viva Brand for shopping centers 2012 Acquisition of control in Brazilian and 100% of Argentinian 2015 Incorporation of Local expansion International expansion Format expansion EPS (COP) Sales Area ('000 m2) Number of Stores Market Cap 2005 (Colombia) x 11.1x 26.3x 5.69x 2015 (Col+Uru+Bra+Arg) Acquisition of new brands Net Income x 0.5 EBITDA x 2.0 Net Sales x 31.8 Source: Capital IQ Figures in COP Tn 4

5 Grupo Éxito Consolidated Overview Strong Leadership Position in Four Countries Combined Group As of Dec 31, 2015 ** Total sales (USD MM) 3,266 5, ,097 Recurring EBITDA (USD MM) Stores 573 1, ,606 Local Market share 1 44% 14.5% (2) 45% 15% Notes: **2015 figures include the financial results of the operations in Brazil and Argentina since September 1 st, GPA, Brazil is fully consolidated FX rate COP$3.149/ USD (2) Source: ABRAS (Brazilian Supermarket Association) as of December 31, 2014 for Food Retail only Source: IMF. 1 Nielsen: Market share in modern retail 5

6 Omni-channel Strategy Reaching all customers at distinct purchasing moments Multi-Brand & Multi-format: Opportunity to complement value proposition E-commerce: Opportunity to replicate expertise Specialized non-food: 1,014 stores Supermarket: 597 stores Proximity stores: 446 stores Hypermarkets: 243 stores Discount/cash & carry: 306 Drive In e-commerce Brick & Mortar #6 global e-commerce pure player by sales US$ 5.3 Bngross merchandise volume Mobility #2 e-commerce company in Brazil ~18 MM active customers ~32 MM placed orders ~18,000 click & collect stations Cnova s key figures (2014) Travel: 1.4 MM clients Insurance: ~1 milion clients Mobile: +700,000 users Money transfers: 2.1 MM transactions Financial retail: 1.8 MM cards issued Home Delivery Virtual Kiosks Click & Collect Consolidated operating GLA: 790,000 m2 Argentinian GLA: 145,000 m2 Colombian GLA: 310,000 m2 Brazilian GLA: 343,000 m 2 Distribution centers: 79 Complementary Businesses Know-how to be transferred to new operations Real Estate: Dual business model to be replicated 6

7 Formats in Colombia Well positioned brands & formats 58 stores 573 stores 262 stores 100 stores 153 stores 58 stores 1,095 At your service Hypermarkets, Supermarkets & Convenience stores Value for Money Customer Service A pleasure for everyday Supermarkets & Convenience stores Best in Fresh & Imported products Premium products Where buying costs less Convenience stores Soft-discount Proposition High % of Private Label Aliados Surtimax Commercial alliance with independent stores Food and non-food Top Experience 7

8 E-commerce Leading the on-line market ~ 2% of total sales in Colombia Food & non-food products Click & Collect Drive-in App for mobiles Food products Premium & imported Recipes First on-line discounter Non-food products only Market Place Alliance with Groupe Casino Young, dynamic & innovative 8

9 Complementary Businesses Profitable models based on strategic alliances Financial Retail Mobile Virtual Operator JV with Bancolombia 3 rd credit card issuer 1.8 million cards issued Over 700k users 24 months of operations The cheapest minute in the market Travel Business JV with Avianca 1 st travel agency in tourism packages 1.4 million clients Insurance JV with Grupo Sura Over 1 million clients International Money Transfer Service Starting from the USA 2.1 million transactions 9

10 Summary of Colombia Operation Strengths Retail Omni-channel leadership and Complementary Business with strong ROI Contribution. Leader in Four Relevant Market Segments (Premium, Mid-market, Discount, Ecommerce). Discount Market - Super Inter + Surtimax Aliados, representing 8% Market Share. Premium Segment- Carulla Service Oriented - High Profitability stores in 11 cities. Exito Brand - Compact Hyper to Intermediate Cities - Fresh Product & Textile EDLP positioning. Ecommerce - Market Place + Mobile Apps + Click & Collect Strong Real Estate Operator- 310k sqm GLA - Real State Vehicle in 2016 Substantial Income and Margins from Complementary Businesses (Credit, Insurance, Financial Services, Mobile) 10

11 Formats and Brands in Brazil 1,941 stores GPA formats provide high-quality products for households throughout the country 185 stores 336 stores 311 stores 95 stores Premium Format Supermarket & Proximity stores Hyper & Super Targeting Brazilian Families Proximity Mini Mercado Extra & Minuto Pao de Acucar Multi-business Strategy Low Operating Costs & Competitive Prices 760 stores 254 stores Non-Food Retailer To make the dreams of customers come true Pioneer in Electronics Present in the South, Southeast & Midwest regions Second player in the market Neighborhood Mall First in Brazilian retail market to operate with this real estate proposal 11

12 Diversified Portfolio Balanced mix sales between food and non-food offers resilience and flexibility Food: 52.3% Non Food: 47.7% Traditional Food Retail: Hypermarkets, Supermarkets, Proximity, Drugstores, Gas Stations, Food Delivery and Commercial Spaces 28.3% Electronics/Furniture Bricks & Mortar 37.6% Gross Sales Mix (2015) Cash & Carry 14.7% 19.4% E-Commerce B2C and B2B 12

13 Summary of Brazil Operation Strengths Resilient Food Business with Strong Performance in Assai brand Management strengthening with Focus on Multivarejo Store Extra - 62 stores (25% sales) + Commercial strategy repositioning Pao de Acucar - 5 new stores, market share gain, renovation of near to 80% store floor Proximity - continue expansion with focus in Minuto Pao de Acucar Via Varejo - drastic downsizing, synergies with Cnova, Market Share gains CNova - Management change, focus in market place, profitability & synergies with VVar Positive Cash Position - net Cash balance of near to R3 billion 13

14 Formats and brands in Uruguay Solid growth in a country with high purchase power 65 stores Supermarkets Supermarkets & Proximity stores Hypermarkets 29 stores 34 stores 2 stores Outcome positively driven by Devoto and Géant performance. Market share gain from 42% to 44% in the last 5 years. Synergies with the development of the loyalty program. Opening of the first 10 proximity stores in 2015 under the Devoto Express Brand. Development of devoto.com and launch of geant.com. SSS of 10.6% in local currency in FY2015. Potential - Real Estate projects Min Montevideo & Punta del Este 14

15 Argentina - Libertad Third real estate player in Argentina 3 rd real estate player, 145k sqm of GLA (leader in Cordoba region) & 50 k sqm of GLA in commercial galleries in 3 years. Food retailer leader in the region of Córdoba. Market share increase of 20 basis points in Total sales growing 27.9% and 26.7% in SSS derived from improvement in hyper productivity. Argentina, a country with better expected economic Outlook. 15 hypermarkets and 12 mini-markets, fully owned. 15

16 Synergies Plan Strong value added through synergies implementation Unlocking synergies Key know-how Expert country Margin on additional revenues Cash & Carry Textile Premium proximity Cash & Carry expertise Textile business model for hypermarkets Brazil Colombia Purchasing synergies Food Non food National brands Private labels Costs and capex synergies Shared services Marketing spend Procurement of maintenance equipment Differentiated premium proximity concept Discount proximity expertise Real estate dual business model E-commerce accelerated sales development Loyalty program Colombia Brazil Colombia Colombia Brazil Colombia Objective: 50 bps EBITDA margin increase in 4 years 16

17 Synergies Innovative commercial activities Fast roll-out of innovative strategies developed and proven in one of our countries SIMPLIFIED COMMERCIAL ACTIVITY DEVELOPED IN ARGENTINA Customers save more when the buy more items The strategy impacts suppliers positively because they increase turnover Win-Win strategy that allows customers save more, suppliers increase sales and stores improve contribution Fast implementation and execution in local hypermarket banners 17

18 Real Estate Portfolio in Colombia 310,000 sqm of GLA, 11 Shopping Centers operating and 3 more under construction Shopping Centers Opened 2015 Under Construction Villavicencio Villavicencio GLA: 53,000sqm (51% Stake) San Pedro Neiva GLA: 37,500sqm (51% Stake) Buenaventura Buenaventura GLA: 6,500sqm (100% Stake) Fontibon Bogotá GLA: 4,500sqm (100% Stake) Wajiira Riohacha GLA: sqm (100% Stake) Palmas Medellín GLA: 6,500sqm (51% Stake) Envigado Medellín GLA: sqm (100% Stake) Barranquilla Barranquilla GLA: 64,500sqm (90% Stake) Sincelejo Sincelejo GLA: 20,500sqm (51% Stake) Laureles Medellín GLA: sqm (80% Stake) Puerta Norte Medellín GLA: 7,500sqm (100% Stake) Caucasia Caucasia GLA: 2,500sqm (100% Stake) Iwana Barrancabermeja GLA: 1,500sqm (51% Stake) La Ceja La Ceja GLA: 10,000sqm (100% Stake) Grupo Exito is structuring a real estate vehicle to accelerate its expansion: Aiming to raise USD200 million. To include at a first stage, 13 shopping centers and commercial galleries already operating and other 6 projects either under structuring or development. Creation of additional near to 360,000 square meters of GLA. Expected timing for launching the vehicle by mid Note: Images are illustrative 18

19 Real Estate Dual Business Model Unlocking hidden value Business expertise in the whole value chain: Developing Commercialization - Operation Income stability Great opportunities to develop the business model in Brazil and Uruguay 95% High Occupancy Rates 92% 90% Colombia Brazil Argentina 600, , ,000 Current & Expected GLA 200,000 55, ,000 Opportunity to Replicate Colombian Expertise COP $540,000 MM tenant annual sales 11 operating shopping centers 17 commercial galleries 5,130 commercial tenants +800 international partners 1.7 MM vehicles/year 32 MM pedestrian traffic Opportunity 343,000 Opportunity Colombia Argentina Brazil Uruguay Operating GLA Additional GLA '19 790,000 sqm of GLA in South America 19

20 Summarized P&L under IFRS Solid Net Income growth despite equity tax burden and financial expenses related to debt Consolidated Income Statement FY15 FY14 Millions of COP Millions of COP FY15/14 Net Revenues 33,402,211 10,484, % Gross Profit 8,254,435 2,629, % Gross Margin 24.7% 25.1% SG&A expenses 6,748,950 2,012, % SG&A/Net Revenues 20.2% 19.2% Recurring Operating Income 1,505, , % Recurring Operating margin 4.5% 5.9% Operating Income (Ebit) 1,356, , % Operating margin 4.1% 5.8% Net Income attributable to Grupo Éxito 573, , % Net margin 1.7% 4.8% Recurring EBITDA 2,021, , % Recurring EBITDA margin 6.1% 7.8% EBITDA 1,872, , % EBITDA margin 5.6% 7.7% Notes: The 2015 base includes the financial results of the operations of Brazil and Argentina since September 1st, 2015 The 2014 base is not comparable as excludes the operation of Grupo Disco in Uruguay as well the financial results in Brazil and Argentina. 20

21 Financial Results by Country Information in IFRS Colombia Brazil Uruguay Argentina Millions of COP FY15 FY14 FY15/14 FY15 FY15 FY14 FY15/14 FY15 Net Revenues 10,622,539 9,812, % 19,980,882 2,162, , % 637,699 Gross Profit 2,611,361 2,405, % 4,660, , , % 236,458 Gross Margin 24.6% 24.5% 23.3% 34.5% 33.3% 37.1% SG&A Expenses 2,017,693 1,823, % 3,925, , , % 190,758 SG&A /Net Revenues 19.0% 18.6% 19.6% 28.5% 28.1% 29.9% Recurring Operating Income 593, , % 735, ,507 35, % 45,700 Recurring Operating margin 5.6% 5.9% 3.7% 6.0% 5.2% 7.2% Recurring EBITDA 804, , % 996, ,302 43, % 50,309 Recurring EBITDA margin 7.6% 7.9% 5.0% 7.8% 6.5% 7.9% FY2015 % Sales by country 2015 Consolidated Sales mix Uruguay 7% Argentina 2% Colombia 32% Brazil 59% Non Food 36% Food 64% Notes: The 2015 base includes the financial results of the operations of Brazil and Argentina since September 1st, 2015 The 2014 base is not comparable as excludes the operation of Grupo Disco in Uruguay as well the financial results in Brazil and Argentina. 21

22 Debt Ratios and Maturity DFN/Ebitda ratio Holding Consolidated 2,000 1,800 1,600 1,400 1,200 1, Holding Debt Maturity 97 1, Long Term COP Medium Term COP USD Syndicated Figures in Bn COP Exito Colombia refinanced its financial debt from 3.4 to 4.3 years Debt in COP as at 31/12/2015: 2,688 Bn up to 10 years Rate: < IBR + 3.5% Debt in USD as at 31/12/2015: 450 MUSD 3 years maturity Rate: < LIBOR % GPA Stable Rating braa+ ratified by S&P supported by: Low levels of indebtedness, strong operating FCF Conservative management of costs, WC and expansion plan Well positioned to face macroeconomic challenges, will maintain strong credit metrics (debt to EBITDA below 1.5x, FFO to debt higher than 45%). Initiatives of costs cuts Would resist to a hypothetic sovereign default in Brazil, due to strong liquidity and flexibility Fitch ratified AA+ in October 2015 supported by: Capability of preserving its conservative capital structure and strong liquidity, Leadership in the sector, diversification and conservatism has shown positive negotiation capacity with suppliers, serving as support for the cash flow generation. 22

23 Falabella Walmex Pricesmart Cencosud Éxito Carrefour Walmex Pricesmart Cencosud Falabella Carrefour Éxito Positive Effect on Profitability Indicators Clear upside in multiples versus peers EPS expected evolution (4 year plan) Expected effect on ROE (4 year plan) 30.8% 9.6% 6.5% 6.4% Before synergies Synergies run-rate Stand alone Post-transaction including synergies EV/EBITDA & P/E (x) Dividend Yield EV/EBITDA P/E 5.0% 1.3% 0.8% 1.5% 1.7% 2.5% Source: Bloomberg market consensus as of 31/12/

24 Grupo Éxito wrap up ( Takeaways) Latam Platform - Historial Step Game Changer Focus In Consolidation (Management, Synergies,Productivity) Strong Omnichannel Model - Latam Leader 3,8 m2 retail / 60m Customers 2,606 Stores Business Model Monetization Customer Traffic Real Estate (790 K ) GLA Credit Insurance Mobile Loyalty Data base Potential 3 out of 4 operations > 7% Ebitda - Brazil Will Comeback Éxito Consolidation Integration Synergy Capture Value Creation ( Historial Track Record) 24

25 2016 Perspectives Colombia High single-digit growth of the top line. Store expansion with 20k sqm of sales area with Capex between COP$300k and COP$350k million. Real Estate expansion near to 70,000 sqm of GLA with the opening of Viva Barranquilla and Viva La Ceja. Brazil Expected Sales growth of around low single-digit Retail expansion focused on Assai and proximity stores Expected Capex near to R$1.5 billion. Uruguay Increasing market share and strengthening the convenience format. Expected Capex between COP$100k million and COP$150 k million. Argentina Focus on the real estate business with more tan 50k sqm of GLA in the next 3 years. Expected Capex between COP$40k and COP$60 million. Grupo Éxito will continue focusing on price positioning across banners and executing cost and expense control activities 25

26 Appendixes 26

27 Ownership Structure International ownership structure consolidates best in class LATAM retail platform 54.7% 18.8% / 50% 18.8% / 50% 100% 100% 62.5%* Recent acquisitions % Economic rights % Voting rights * Grupo Exito consolidates Grupo Disco since January 1 st,

28 Corporate Governance Standards Exito is committed to continuously improve and advance on Corporate Governance Standards Adoption of OECD Corporate Governance Standards in Colombia Amendment of existing corporate governance documents and policies - rules for shareholders meetings, conflict of interest regulation, control system, among others. New rules regarding approval of related party transactions, privilege information measurements and disclosure of information. Composition of the Board and Supporting Committees Board of Directors recently elected on March 30, Risk and Audit Committee integrated only by Independent Members. An Independent member is the Chairman of the Board Chairman of Supporting Committees are independent Members. Conflict of Interest and RPT Management Conflict of Interests at the Board Level to be solved by non-conflicted members. Related Party Transactions to be evaluated by the Risk and Audit Committee. Shareholders approval required for transactions above 10 MUSD. 28

29 Related Party Transactions and Conflict of Interest Management Related Party Transactions Approval Procedure General Counsel as responsible for mapping related parties and building an RPT data base. The leader of a negotiation process involving a related party should inform the General Counsel about possible RPT. Risk and Audit Committee responsible for verifying compliance with corporate governance requirements specially arm s length principle compliance, and approving RPT. Risk and Audit Committee should submit an out of ordinary course of business RPT which amount is 10 MUSD to the Board s approval. Conflict of Interest Management Procedure Conflict of Interest Committee in charge of evaluating and solving conflict of interest situations, as well as deciding on penalties. Conflict of Interest Committee integrated by: Board s Corporate Governance Committee, when conflicted person is a Management member. Non-conflicted Board members, when conflicted person is a Board member. HR Vp, General Counsel and Internal Auditor, when conflicted person is an employee. Reporting channels, such as an and a HR software, were implemented to motivate reporting on conflict of interest situations. 29

30 Colombia current Board Structure Luis Fernando Alarcon Independent Yves Desjacques Daniel Cortés McAllister Independent Ana Maria Ibañez Independent Felipe Ayerbe Muñoz Independent Philippe Alarcon Bernard Petit Hervé Daudin Expansion To define real estate investment projects and strategies Appointment, Remuneration and Corporate Governance To define recruitment and remuneration policies. To verify corporate governance rules compliance Investment To define cash investment policies Risk and Audit To control adequacy of accounting and financial procedures Sustainability To define sustainability strategy and work plan Mathieu Santon Brazil current Board Structure Jean Charles Naouri - President Arnaud Strasser - Vice president Eleazar de Carvalho Filho Luis Augusto de Castro Neves Maria Helena S F.Santana Yves Desjacques Luiz Aranha Correa do Lago Carlos Mario Giraldo Moreno José Gabriel Loaiza Herrera Ronaldo Iabrudi dos Santos Pereira Carlos Mario Diez Gomez 30

31 Management Structure Colombia Brazil Uruguay CEO Carlos Mario Giraldo CEO GPA Ronaldo Iabrudi General Manager Luis E. Cardoso President Carlos Mario Diez CEO Multivarejo Luis Moreno(1) Devoto Guillermo Destefanis CFO Filipe Da Silva Financial & Corporate Services Chistophe Hidalgo Int Business VP José Gabriel Loaiza Assaí Belmiro Gomes Via Varejo Peter Estermann Argentina General Manager Jean Christophe Tijeras Director General Tijeras Jean Christophe Real Estate VP Juan Lucas Vega Gerente Recursos Humanos Peralta Daniel Gerente de Legales y Asuntos Corporativos Sabat Diego GPA Malls Luiz Henrique Costa Director Operaciones Vallcaneras Daniel Cnova Brasil Flávio Dias Asistente Director Maria Tricárico Director Comercial Ricci Renzo Director Administrativo Financiero Bonnaud Nicolás Gerente Compras Gerente Operaciones Gerente Administración (1) To be elected. The designation of Masivo López Diego Luis Moreno was approved by the Board Castro of Natalia Directors in January 26, 2016 Trombatore Daniela 31 Dire I B

32 Grupo Éxito Ownership Structure As of December 31, 2015 Other Shareholders 10.5% ADR program 3.0% Colombian Pension Funds 15.8% Casino Groupe 54.8% International Funds 15.9% 32

33 Social Commitment We are a solidary and responsible company A fairer and more competitive country Niños beneiciarios delprograma Infancia Sana de la Fundación Éxito, atendidos en el Hogar Infantil Católico Claret en Cali $ Millions COP invested in child nutrition Families supported by the program of child nutrition Childs between 0 and 5 years supported by Fundacion Exito 29 new allies Gen Cero Program FundaciónÉxito andpricesmart Signed an agreement to support 134 families and assure proper nutrition for low income Childs We reach La Guajira fighting against famish in native communities 33

34 Tel Contact: Maria Fernanda Moreno R Investor Relations Director The Issuers Recognition -IR granted by the Colombian Stock Exchange is not a certification about the quality of the securities listed at the BVC nor the solvency of the issuer.