non deal roadshow
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Non Deal mes de mayo 2013TRANSCRIPT
Nueva Polar Non-deal roadshow
May 2013
Company Overview Plan Aconcagua Financial Highlights
Q&A
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Where do we come from
October 2012: US$280 million capital increase
May 2012: Agreement with Chile´s Consumer Protection Agency (SERNAC , Class action)
November 2011: Settlement with creditors is reached August 2011: New CEO is appointed (Patricio Lecaros) July 2011: New Board of Directors takes office
June 2011: La Polar goes into a severe financial crisis
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Aconcagua Plan
New Corporate Governance Committed Board of Directors
Gino Manríquez
Controller
Controller
Control and
transparency
Reports directly
to the Board
Internal Audit
Committee Audit Risk Retail Colombia Finance Fraud
Prevention
César Barros M.
Georges de Bourguinon A.
Alberto Marraccini V.
Jorge Id S.
Juan Pablo Vega W.
Bernardo Fontaine T.
Aldo Motta C.
Georges de Bourguignon A., Vice-chairman
Alberto Marraccini V. , Director
Juan Pablo Vega W., Director Jorge Id S., Director
Aldo Motta C., Director
Bernardo Fontaine T., Director
César Barros M. Chairman of the Board • Ph.D. and M.A. in Economics at
Stanford University. • Former Chairman of SalmonChile
(2007-2011) • Vast experience in Banking and
Financial Industry
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36%
28%
22%
9%5%
3839 38
40
14
40
Falabella Johnson Cencosud Ripley Hites La Polar
La Polar in the Chilean Retail Industry
4th Player in the Industry in Chile by Retail Revenues 40 stores throughout Chile
Sales per square meter show a
significant recovery after the crisis,
reaffirming our brand value, but still
below industry standards
The strategic location of our stores,
enables the company to reach a broad
range of income groups
Established in 1920, the brand
has been present in the Chilean
market for almost a century
Brand valued by customers, with
850,000 clients with available
credit line
Source: Company Reports
N°
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Colombia Project
Growth opportunity
Stores
Floresta
Opening: November
2011
Los Molinos
Opening: October 2011
Centro Mayor
Opening: October 2010
Carabobo
Opening: August 2011
Bucaramanga
Mall Cacique
Opening : November
2012
Area of 5,000 m2
New Store
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Expansion Plan
Barranquilla
Cartagena de Indias
Medellín
Pereira
Cali Villavicencio
Bogotá
Bucaramanga
18 projects in development and study
stages
2 new stores in 2013
Remodeling stores
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Company Overview Plan Aconcagua Financial Highlights
Q&A
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Sales $437 Billion
10 UF/m2 (US$ 480)
Retail Direct Margin 30%
Financial revenues / retail revenues 30%
SG&A expenses / Retail revenues 30%
Risk rate 12%
Retail EBITDA Margin 10%
3 - Y e a r P l a n
2 0 1 2 - 2 0 1 4
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why we will reach the
6 REASONS…
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1 Clear and achievable goals
REASON
10
(*) w/o non recurring expenses
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2014 2012
Retail
Monthly retail revenues (UF/M2) 10 6.8
Retail Direct Margin 30% 25%
Apparel and shoes (% sales retail) 55% 54%
Private labels (% sales retail) 30% 25%
Financial Retail
Financial revenues/retail revenues 30% 20%
Risk rate 12% 11.6%
Sales % with LP credit card 50% 48%
Operational
SG&A expenses / Retail revenues 30% 37%
Retail Ebitda margin 10% -3.9%(*)
2
REASONS
Experienced Management Team
Patricio Lecaros, CEO • Commercial Engineer, PUC • Vast experience in the retail
Industry as Executive and Entrepreneur.
• 14 years in Ripley Chile • 5 years as CEO in Ripley Peru
Retail Financial Support Colombia
Apparel Mngr.
Andrés Molina
Logistics Mngr.
Carlos Arredondo
Planning Mngr.
José Tomás Larraín
Sales Mngr.
Marcelo Acosta
Home and electronics
Mngr.
Rodrigo Karmy
CFO
Álvaro Araya
Legal Mngr.
Andrés Escabini
HR Mngr.
María Olivia Brito
IT Mngr.
Ricardo Rubio
Marketing Mngr.
Rodrigo Nazer
CEO
Francisco Martínez
Financial retail
Mngr.
Vìctor Wipe
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3
REASON
Full renovation of the apparel department
New mix of exclusive brands 2.0
Increase square meters of exclusive brands in stores
Improvements in the purchasing process
New design department
New and renewed brands
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New Layout
in our stores Remodeling stores
Ahumada: before and after
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BEFORE
AFTER
AFTER
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Ahumada before and after
remodeling
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Before After
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Capex Program (US$ million)
Capex Program for 2013 and 2014
Remodeling 17 stores in Chile of aprox. 100,000 m2
Opening 6 new stores in Colombia
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2013-2014
Chile
Remodeling and others 50
Colombia
New stores 60
Total 110
More than 850,00 clients WITH AVAILABLE CREDIT LINE
4
REASON Attracting 200,000 new
premium customers annually
Development of a new Visa / Master La Polar credit card
New credit and collection policy
New benefit plan
New sales channel
Aconcagua Plan
Stabilized Risk rate (1)
12%
Source: La Polar (1) Provisions stocks /Gross receivables
Ta
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21.9%
18.2% 17.0%
14.8%
11.6%
DEC´11 MAR´12 JUN´12 SEP´12 DEC´12
5
REASONS
Brand valued by customers
Sales show a significant recovery, reaffirming our BRAND VALUE
Customers are one of the most valuable assets of the company
December 22/2012 was the best- selling day in LA POLAR HISTORY
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Transparency
A new culture of responsibility
Strongly committed Board of Directors
6
REASON
Corporate Governance
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Company Overview Plan Aconcagua Financial Highlights
Q&A
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Chile: Retail Business
SSS (CLP Billions)
Retail Gross Margin
Revenues Performance, a strong recovery after the crisis
e e
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Chile: Credit Business Gross Loans (CLP Billions)
Portfolio by Aging Segments
Risk Rate (Provisions)
e
21
e
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Chile: EBITDA 2012
Retail Financial Consolidated
EBITDA Chile 2012 2012 2012
Revenues 293,754 58,176 351,930
Gross margin 65,032 5,916 70,949% Revenues 22% 10% 20%
SGA w/o depreciation (92,646) (15,527) (108,173)
% Revenues 32% 27% 31%
EBITDA (28,890) (11,428) (40,318)
% Revenues -10% -20% -11%
Non-recurring expenses (7,621) (21,220) (28,841)Sernac provisions (21,220) (21,220)
Extraordinary severance (5,155) (5,155)
Fees and penalties (1,864) (1,864)
Other non-recurring (602) (602)
EBITDA w/o recurring (21,268) 9,792 (11,476)
% Revenues -7% 17% -3%
Financial margin includes a lower cost of B$ 4.7,
resulting from reduction of the financial debt related to
the financing company. This effect does not affect the
EBITDA calculation
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Financial Debt Restructuring Financial Debt
0
20
40
60
80
100
120
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 … 2032
Senior amortization Junior amortization
Senior Interest
442
Bond Amortization Profile (CLP$ billion)
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Senior Bond
Amortization: Semiannual starting in
2015
Interest: From 2013 to 2022 with
a rate between 4% and 10%
Junior Bond (UF)
Amortization: One coupon in 2032
Interest: No interest payments
Tranche C (PS 27)
Amortization: Semiannual starting in
July 2018 until July 2024
Interest: BCP 10 Rate + 1% starting
July 31, 2013
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Initial Debt:
• Bank debt • Bonds • Commercia
l paper
$ 445
PS 27 $ 25
Junior Bond
$ 249
PS 27 $ 25
Senior Bond
$ 196 14,1 %
Senior Bond
$ 136
Senior Profit:
$ 60
$ 18
Junior Profit:
$ 231
$ 20
CJP splits the debt into 2 Bonds (Senior and Junior)
18,1%
9,6%
Total debt: $470
New debt is
recorded at a
discount
Differential with
the face value is
booked as profit
Discount rate
IFRS debt:
$174
IFRS Profit:
$296
IFRS, cash flow from new debt discounted
at market rates.
Average rate:
14,9%
PS 27 : $5
69%
7 %
81%
Nov 7, 2011 Oct 16, 2012
CJP: Preventive Judicial Settlement, signed on November 7, 2011
PS 27: Bank debt BCI, guaranteed by 1.85 times of normal receivables portfolio of La Polar
Debt Restructuring and Revaluation ($ billion)
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Appendix 1
New layout
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Remodeling Stores in Chile 2013 -2014 100,000 m2 with a CAPEX US$40 million
Mar-13
2 store 1 store
Jun-13 Jul-13
6 stores 8 stores
First half 2014
Estación Central before remodeling
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Estación Central after remodeling
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Ahumada / Ahora Ahumada after remodeling
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Ahumada / Ahora Ahumada after remodeling
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Ahumada / Ahora
Ahumada after remodeling
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Appendix 2
Private Brands
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New brands
}
Private Brand
Customer: women 18-25 years
Business area: apparel, and
shoes
Price level: Medium–High
Style: Sport casual
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}
New brands
Private Brand
Customer: women 28-35
years
Business area: apparel,
accessories, shoes,
handbags and home
Price level: Medium–High
Style: Sport Fashion
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New Brands
}
Private Brand
Customer: men 30-40
years
Business area:
apparel
Price level: Medium
Style: Sport Casual
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Renewed brands
Private Brand
Customer: women and men
18-25 years
Business area: apparel
Price level: Medium – High
Style: Sport Casual
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Renew brands
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Renew brands
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Renew brands
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Renew brands
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Renew brands
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