corporate presentation march...
TRANSCRIPT
CORPORATE PRESENTATION
March 2016
• Highlights First Quarter
• Cencosud Snapshot
• Key Figures
• Strategy Cencosud
• Corporate Governance
Corporate Presentation | Contents | 2
Contents
Investment Highlights
Core in food retailing business, more resilient to economic downturns
Premier brand portfolio with high consumer recognition
Corporate Presentation | Highlights First Quarter | 3
Leading retailer in Latin America with the highest geographic diversification in the region
Investment Grade Company with strong & diversified real estate food print
Opportunity to continue expanding in markets with high growth and low penetration
Highlights First Quarter
Corporate Presentation | Highlights First Quarter | 4
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
1Q15 reaching 3.27x. Excluding one offs the
ratio was 2.86x in 1Q16
• Highlights First Quarter
• Cencosud Snapshot
• Key Figures
• Strategy Cencosud
• Corporate Governance
Contents
Corporate Presentation | Contents | 5
THE REGION
SCENARIO IN LATINAMERICA AFFECTED BY
ECONOMIC SLOWDOWN
Currency devaluation
against chileanpeso reflects
economic slowdown
Good expectations for possible politic
changes
Confidence will be a key factor to deal with more informed and empowered customers
Instability in Brazil affects
the expectations of
the region
1 2 3 4
Corporate Presentation | Cencosud snapshot | 7
Corporate Presentation | Cencosud snapshot | 8
• 284 Supermarkets
• 50 Home
improvement
• 22 Shopping centers
• 90 Supermarkets
• 9 Department
Stores
• 4 Shopping
centers
• 217 Supermarkets
• Atacarejo format
• 3 different regions
• JV Bradesco
• 101 Supermarkets
• 10 Home
improvements
• 2 Shopping centers
• JV with Colpatria
Cencosud in the Region
Operations started in
1978
• 245 Supermarkets
• 35 Home improvements
• 78 Department Stores
• 25 Shopping centers
• JV Scotiabank
Operations started in
1982Operations started in
2007Operations started in
2008Operations started in
2012
87Store
Departments
937Supermarkets
53Shopping Centers
95Home
Improvement
Corporate Presentation | Cencosud snapshot | 9
Strong brand Portfolio,
with high consumer recognition
High and low end brands
Fourth Quarter
Overview by Country:
Revenues
38.9%
28.9%
14.6%
9.3%8.3% Chile
Argentina
Brazil
Peru
Colombia
Revenues LTMUS$ 16,158 milion1
Andean Region
USD 1,338 MM
USD 1,505 MM
USD 6,278 MM2
Atlantic Cost
2,366 USD MM
4,670 USD MM
Corporate Presentation | Cencosud snapshot | 10
1 Figures for LTM as of March 2016, translated into USD at end of period exchange rate ( CLP / USD 669,8 ) 2 Figures from Chile exclude results from the Financial Service division after the completion of the Scotiabank transaction to jointly develop the business in May 1st, 2015.
Fourth Quarter
Overview by Country: Adjusted
EBITDA
Adjusted EBITDA LTM USD 1,238 MM3
Andean Region Atlantic Cost
Presentación Corporativa | Cencosud en una mirada |
53.4%30.1%
2.2%9.8% 4.4%
Chile
Argentina
Brazil
Peru
Colombia
USD 55 MM
4.1% mg
USD 122 MM
8.1% mg
USD 662 MM2
10.5% mg
USD 27 MM
1.1% mg
USD 373 MM
8.0% mg
1 Figures for 2016, translated into USD at end of period exchange rate ( CLP / USD 669,8 ) 2 Figures from Chile exclude results from the Financial Service division after the completion of the Scotiabank transaction to jointly develop the business in May 1st, 2015.3 Adjusted EBITDA excluding all one-off charges: CLP 105,038
11
Fourth Quarter
Overview by Business: Revenues
Revenues LTM USD 16,158 MM1,2,3
Corporate Presentation | Cencosud snapshot | 12
USD 372 MM
USD 252 MM2
Others:
USD 19 MM3
USD 11,750 MM
USD 2,158 MM
USD 1,606 MM
1 Translated into USD at CLP/USD 669,82 Financial Services figures exclude Financial Services Chile 3 Shopping Centers figures only reflect revenues and adjusted EBITDA contributed by third party transactions.
72,6%
9,9%13,3%
2,3%1,7%0,1%
Supermarkets
Department Stores
Home Improvement
Shopping Centers
Financial Services
Others
Fourth Quarter
Overview by Business: Adjusted
EBITDA
Corporate Presentation | Cencosud snapshot | 14
USD 290 MM
78.1% Mg
USD 100 MM2
39.7% Mg
Others:
USD - 136 MM
USD 685 MM
5.8% Mg
USD 211 MM
9.8% Mg
USD 88 MM
5.5% Mg
Adjusted EBITDA LTM USD 1,238 MM1,2,3,4
1 Translated into USD at CLP/USD 669,82 Financial Services figures exclude Financial Services Chile 3 Adjusted EBITDA (excluding all one-off charges of CLP 105,038 million)4 Shopping Centers figures only reflect revenues and adjusted EBITDA contributed by third party transactions.
55,3%
7,1%17,1%
23,4%
8,1%-11,0%
Supermarkets
Department Stores
Home Improvement
Shopping Centers
Financial Services
Others
3RD SUPERMARKETS2ND HOME IMPROVEMENT
1st SUPERMARKETS4th STORE DEPARTMENTS
2nd SUPERMARKETS2nd HOME IMPROVEMENTS2nd SHOPPING CENTERS2nd STORE DEPARTMENT
4th SUPERMARKETSNORTHEAST (#2)
MINAS GERAIS (#1)RIO DE JANEIRO (#3)
2nd SUPERMARKETS1st HOME IMPROVEMENT2nd SHOPPING CENTERS
Strong Brand Portfolio
with high consumer recognition
Corporate Presentation | Cencosud Snapshot | 14
Regional presence / Market position
Fourth Quarter
2.2
3.94.8
5.9
9.5
8.6
9.711.8
14.3
16.2
16.7
Colombia
15.5
2015 1Q16 LTM
A Development Story thru
Organic Growth & Acquisitions
Acquisitions and Revenues (USD bn)1
Corporate Presentation | Cencosud snapshot | 15
1 Figures translated into USD at end of period exchange rate as of December 2015 (CLP/USD 669,8).
16.1
Fourth Quarter
Fix73%
Variable27%
1 Figures translated into USD at the end of the period of March 2016 (CLP/USD 669,8).2 Net Financial Debt/ Adj. EBITDA ratio excluding baking operations.
3In 3Q15 faire value of derivatives was reclassified from “Other gains/losses” to “Net financial Costs” and “Income/loss of FX foreign variations. 4Ratios from 2014’ and 2015 are comparable,
5 After CCS6 Net Financial Debt ratio (Adjusted EBITDA excluding one offs CLP 105,038 millions)
Breakdown by Interest Rate5
60%16%
19%
3%
0% 1%
1%
CLP
UF
USD
BRL
COP
PEN
ARS
Leverage ratio2,3,4
2012 2013
4.6
2014 2015
3.43.7
3.3
1Q16
3.27
2,866
Breakdown by currency5
A Development Story thru
Organic Growth & Acquisitions
Corporate Presentation | Cencosud snapshot | 16
1T15 1T16
3,6
Fourth Quarter
Net Financial Debt Evolution (USD BN)1
1 Figures translated into USD at the end of period exchange rate as of March 2016 (CLP/USD 669,8).2 Considers only principal amortizations and excludes banking operations.
Amortization Schedule (USD MN)2
2012 2013
6,316
2014 2015
4,6844,265
3,239
1Q16
294
127
231 213
51
780
18
1.218
34
699
50 40
213
4014
81
355
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2045
Investment Grade Company:BBB- with stable outlook by FitchBaa3 with negative outlook by Moody´s
1Q15
4.227 3.641
A Development Story thru
Organic Growth & Acquisitions
Corporate Presentation | Cencosud snapshot | 17
• Highlights First Quarter
• Cencosud Snapshot
• Key figures
• Strategy Cencosud
• Corporate Governance
Contents
Corporate Presentation | Contents | 18
Revenue Performance
• Decreased revenues mostly explained by currency
devaluation in Colombia, Brazil and Peru against CLP
• In local currency, business remain resilient with positive
SSS, except of Brazil
Adjusted EBITDA Performance
• Strong Performance from financial services, department
stores and supermarkets divisions
• Considering constant exchange rates YoY, Adjusted EBTDA
would have increased by 33,5%
• Adjusted EBITDA Margin expanded 149 bps.
All figures are in CLP million
1Q15 1Q16
2,652,647
2,483,844
185,581
1Q15 1Q16
158,759+16.9%
Delivering Improvements in Profitability
19
-6.4%
19Corporate Presentation | Key figures |
+7.5%+6.0%
Focusing on Core Businesses
Standby IPO of the Shopping Centers due
to market conditions
Non-performing store program
implemented.
120 stores under program, all
already under review
8 stores closed to date
17 stores have already showed a
turnaround in performance
Continue divesting non-core assets
As of March, 16 properties are with
sale agreement.
Gas Station business sale in Colombia,
process in final stage
Corporate Presentation | Key figures | 20
• Highlights First Quarter
• Cencosud Snapshot
• Key Figures
• Strategy Cencosud
• Corporate Governance
Contents
Corporate Presentation | Contents | 21
Fourth Quarter
Regional Efficiency
Measures
Short-term Roll Out
Cost Savings of 120 Bps in
SG&A/Sales
Headcount reductions
One-time severance payments
Store level service unaffected
Corporate Presentation | Strategy Cencosud | 22
Fourth Quarter
Omnichannel experience
- Supermarkets
Corporate Presentation | Strategy Cencosud | 23
Chile: delivery to tourist cities for holiday season, be mobile, drive through, locker retreat, exclusive offers & new web sitepurchase in store delivery to home
Argentina: offline purchase, new web site in Disco and Vea, new platform in Jumbo, non food delivery
Peru: new platform in Wong, drive though, click&collect, ecommerce in Metro
Colombia: market place, drive through in Jumbo, food delivery in Jumbo and Metro
Fourth Quarter
Omnichannel experience
– Home Improvement
Corporate Presentation | Strategy Cencosud | 24
Increased assortment (SKUs)Argentina: MobileChile: new web siteColombia: social network
Argentina: new contact centerChile & Colombia: service quality poll
Argentina: delivery options & drive throughChile: click &collectColombia: telesales
Argentina: distribution center improvementChile: debit paymentColombia: reduce delivery time
Argentina: electronic bill & online paymentColombia: improve back office
Fourth Quarter
Omnichannel experience –
Department Stores
Corporate Presentation | Strategy Cencosud | 25
• Wifi in Store
• Increase online assortment
• Click & collect
• Ship from store
• Drive through
• Customer social media
channel
Mobile App
Websphere commerce
upgrade
Change in leadership &
governance
Order & delivery tracking
Back Office enhancement
Fourth Quarter
Strategic Focus On
Brazil
Corporate Presentation | Strategy Cencosud | 26
Maneuvering Macro and Political –Deterioration – Slow Capture of Synergies – Margin Improvements – Atacarejo – SG&A
• Highlights First Quarter
• Cencosud Snapshot
• Key Figures
• Strategy Cencosud
• Corporate Governance
Contents
Corporate Presentation | Contents | 27
Source: ILACAD and US Census Bureau, figures as of December 2013
2015
Corporate Presentation | Corporate Governance | 28
Ownership Structure
Ownership Structure
The direct and indirect participation of Mr. Horst Paulmann Kemna
and his immediate family in Cencosud S.A. is 60%
As of March 31, 2016 Cencosud S.A. capital was made up of
2,842,459,622 common shares held by 1.732 shareholders.
Corporate Presentation | Corporate Governance | 28Corporate Presentation | Corporate Governance | 28
0,80%17,55%
59,76%
21,89%ADRs
Chilean Pension Funds
Controlling shareholders
Others
1200
1300
1400
1500
1600
1700
1800 2015
Corporate Presentation | Corporate Governance | 29
Stock Market Performance last twelve months
$ per share (CLP)
Average amount transacted LTM as of March 31 2016
USD7.9 MM
+14.2%
Source: ILACAD and US Census Bureau, figures as of December 2013
• Board elected on April 29th 2016 for the 2016-2019 period.
• Seasoned 9 Member Board:
• 3 family members: Horst Paulmann, Peter Paulmann and Heike Paulmann
• 2 Independent members: Mario Valcarce y Richard Büchi
• Board of Directors Committee:
• Roberto Philipps
• Mario Valcarce (Independent)
• Richard Büchi (Independent)
Board of Directors
30Corporate Presentation | Corporate Governance |
• Cencosud has a CSR
strategy for each business,
adapted to each country
they operate.
• Common and defined
groups of interest.
• Commitments to each
stakeholder
• Programs that build
internal and external brand
value
Employees
Suppliers
Community
Environment
Customers
Corporate Social Responsibility
Corporate Presentation | Corporate Governance | 31
Corporate Social Responsibility
ENVIRONMENT
CUSTOMERS
EMPLOYEES
SUPPLIERS
COMMUNITY
HOME
IMPROVEMENTSUPERMAKETS
DEPARTMENT
STORES
WASTE MANAGEMENT
REUSABLE BAGS
HEALTHY NUTRITION
LABOR INCLUSION
Elderly, Disability
DEVELOPMENT OF SMALL
SIZE SUPPLIERS
SEDEX
JUMBO CIRCUS
CORSO WONG
WASTE MANAGEMENT
REUSABLE BAGS
HEALTHY CONSUMPTION
LABOR INCLUSION
Quality of Life - Work
DEVELOPMENT OF SMALL
SIZE SUPPLIERS
SUSTAINABLE COLECTIONS
PARIS PARADE
WASTE MANAGEMENT
ECO EASY
LABOR INCLUSION
SEDEX
“LEVANTEMOS CHILE”
CHALLENGE, A roof for my
country
Corporate Presentation | Corporate Governance | 32
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.
Corporate Presentation | Disclaimer | 33
Marisol Fernández León
IRO
Phone +562 2959 0545
Natalia Nacif
Senior IR Analyst
Phone +562 2959 0368
Upcoming Events
Valentina Klein
IR Analyst
Phone +562 2200 4395
• June 14 - 16
2016 CalGEMs Conference of
Bank of America
• August 3 – 4
10th Annual Credit Suisse
CEO/CFO Mid-Summer LatAm
Conference
• September 13 - 14
Cencosud Day in Buenos Aires
Corporate Presentation | IR Information | 34
Contact