corporate presentation fourth quarter results...
TRANSCRIPT
Fourth QuarterResults 2014
Corporate Presentation
2Fourth Quarter www.cencosud.com
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.
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.
3www.cencosud.comFourth Quarter
• Positive revenue trends, boosted by encouraging supermarket SSS
• Aggressive promotional activities maintain market share
• Delivered on stated goals for Brazil and Colombia• Successful international bond offering provides
financial flexibility• Recent progress towards strengthening balance
sheet with closing of Scotia JV
4Q
14
Hig
hlig
hts
Positive Revenue Trends in Food Retail
4www.cencosud.comFourth Quarter
• Supermarket Sales Up By 7,7% YoY
• Positive Trends in SSS:• Chile Accelerated to highest in 11 quarters• Colombia sustains recent progress posting above inflation expansion• Brazil posts positive SSS for first time in 7 quarters while positing positive
EBITDA
• Maintained Market Leadership Despite Competitive Environment With Gains inChile Supermarkets YoY
• D-Stores in Peru Deliver Positive SSS for First Time While Colombia HI Are Positivefor First Time in 5 Quarters, in Both Cases With Positive Profitability Trends
5www.cencosud.com
Revenue Evolution (CLP mm)
• Revenue gains in all five business divisions andcountries
• Chile, Colombia & Peru SSS Above Inflation DataShowing Favorable Trend for Supermarkets
• Peru D-Stores Greenfield & Colombia HomeImprovement Showed Positive SSS Momentum
Fourth Quarter
Adjusted EBITDA Evolution (CLP mm)
• Argentina, Chile & Colombia Adj, Ebitda contracted partiallyoffset by increases in Peru & Brazil
• Chile D-Store Adj, Ebitda dropped 40% as a result of weakerYoY consumption and challenging competitive environment
• Argentina Adj Ebida fell on ARS depreciation of 18% and higherSG&A on 2nd installment of collective bargaining agreements
• Colombia Showed a decrease due to lower results in the creditcard business, partially offset better Ebitda in all the other 3business units
+ 6,9% -5,6%W/ DO W/ DO
7Third Quarter 7Fourth Quarter
Revenue evolution (CLP mm) Adjusted EBITDA evolution (CLP mm)SSS evolution by country
(local currency)
8www.cencosud.com
• Revenue pushed upwards by positive SSS in all of our markets
• 12 Net Store Openings YoY or 1.,45% Selling Space Growth
• Colombia continued to improve SSS trend with above inflation numbers
• Santa Isabel in Chile consolidating market share
• Brazil posts market share gains versus 3Q14
• Argentine operations posted a 64% EBITDA contraction YoYmainly as a result of the 2nd instalment of Collective bargainingagreements and weaker consumption environment
• Brazil posted a weak YoY EBITDA generation; despite positing itshighest Ebitda of the last 5 quarters, with sequentialimprovement vs 3Q14. The company reduced headcount in 4,5%YoY
• Chile, Colombia & Peru Posted EBITDA growth of 7,1% onincreased promotional activity and SG&A dilution
Fourth Quarter
-F
igu
res i
n C
LP
mil
lio
n
Supermarkets
• Revenue increased 6.2% on positive SSS across markets & the opening of 3 new stores since December 2013
• Ebitda generation fell on 2nd installment of collective bargaining agreements in Argentina and tougher competitive environment in Chile
• Colombia ebitda loss narrowed 35%
• 95.4% revenue expansion from our Peruvian operations was on the back of 3 new stores since 4Q13 and positive SSS,
• Ebitda generation fell on greater promotional activity in Chile due to weaker spending, strategy helped curb inventories in 17 days YoY
Department Stores
9www.cencosud.comFourth Quarter
-F
igu
res i
n C
LP
mil
lio
n
Home Improvement
- Higher revenues across the region, led by Chile and Peru- Shopping Center EBITDA due to higher occupancy rates in
Chile & Peru
- Revenues were boosted by larger portfolio in all markets- Financial Service Ebitda grew as a result of better
performances in all markets but Colombia
10www.cencosud.comFourth Quarter
-F
igu
res i
n C
LP
mil
lio
n
Shopping Centers Financial Services
11
Costanera Center Leasing
Process
www.cencosud.com
• Traffic mitigation works associated with current stage ("3A") completed
• Currently in the process of reception of traffic mitigation works and the first 15,000 sqm of GLA from involved authorities
• Strong interest for office space at landmark location
• In negotiation / closing stage with a number of prospective tenants
• Lease revenues in line with market terms
Fourth Quarter
IPO Real Estate DivisionBTG Pactual to Advise on Possible Share Offering
Total GLA of over
2,000,000 sqm
Landbank of over 6MM sqm
48 Shopping Centers across
the region
Total Revenues of CLP
214,850 MM (excluding
related parties)
12
Financial Ratios
www.cencosud.com
Net debt evolution (US$ bn) Net leverage (net debt / EBITDA)
Fourth Quarter
Breakdown by Rate(After CCS)
Breakdown by Currency(After CCS)
4,3
13www.cencosud.comF
INA
NC
IAL
DE
BT
US
D M
MFourth Quarter
Proforma Debt Amortization Schedule (USD million) after bond issuance
FIN
AN
CIA
L D
EB
TU
SD
MM
Debt Amortization Schedule (USD million) as of December 2014
14www.cencosud.com
Positive momentum in Colombia to enhance performanceFocus on core retail operations: Supermarkets, Home
Improvement, Department StoresExamine options to further strengthen balance sheet
Potential to unlock value from real estate assetsDiscretionary spending at D-Stores seemingly
bottomed out in 4Q14 in Chile
Fourth Quarter
Closing
Comments
14
Marisol Fernández León
IR Manager
Phone +562 2959 0545
Natalia Nacif
Senior IR Analyst
Phone +562 2959 0368
Ignacio Reyes Miranda
Senior IR Analyst
Phone +562 2959 0804
Upcoming Events
BTG Pactual Conference – London
April 13 & 14
Shareholder Meeting – Santiago
April 24
JP Morgan Conference – London
May 19 through 21