Brazil - Grupo Éxito

Corporate Presentation
2nd Grupo Éxito´s Open Day
Colombia
March 17, 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”.
2015 Grupo Éxito’s key facts starting point
Large scale and powerful retail platform in South America
Consolidated Net Revenues1:
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*
USD$ 10.6 Bn
Consolidated recurrent
EBITDA1:
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.
1As of Dec 31, 2015 . Includes Brazil and Argentina figures since September 1 st, 2015 using a FX rate COP 3.149 /USD
2
Grupo Éxito: Proven Track Record of Successful Integrations
Acquisition of
Acquisition of
Acquisition of
Acquisition of
Alliance with
Market share in
Leadership in
Bogota and ramp
supermarkets, strong
presence in Bogota and up in sales
expertise in prepared
foods
International
expansion
Outperformed
original
business plan
Became the biggest
retailer in Colombia with
nationwide presence
•Launch of
Viva Brand
for
shopping
centers
Acquisition of
control in Brazilian
and 100% of
Argentinian
2015
2012
2011
2010
2007
Incorporation of
2001
1949
Local expansion
2005
(Colombia)
EPS
(COP)
Sales Area
('000 m2)
325
345
Number of Stores
99
International expansion
Format expansion
Acquisition of new brands
Market Cap
Net Income
EBITDA
Net Sales
1.6
0.1
0.3
3.4
Figures in COP Tn
Source: Capital IQ
2015
(Col+Uru+Bra+Arg)
1281
3.94x
3.863
11.1x
2606
26.3x
6.04
5.69x
5.0x
6.66x
9.35x
0.5
2.0
31.8
3
Management Structure
Colombia
Brazil
CEO
Uruguay
General Manager
Luis E. Cardoso
CEO GPA
Ronaldo Iabrudi
Carlos Mario Giraldo
President
Devoto
Guillermo Destefanis
CEO Multivarejo
Luis Moreno(1)
Carlos Mario Diez
Financial &
Corporate Services
Chistophe Hidalgo
CFO
Filipe Da Silva
Assaí
Belmiro
Gomes
Argentina
Int Business VP
José Gabriel Loaiza
Via Varejo
Peter
Estermann
Real Estate VP
Director
General
General
Manager
Tijeras Jean Christophe
Jean Christophe Tijeras
Asistente Director
Maria Tricárico
GPA Malls
Luiz Henrique
Costa
Juan Lucas Vega
Gerente Recursos Humanos
Peralta Daniel
Gerente de Legales y Asuntos
Corporativos
Sabat Diego
Director Operaciones
Vallcaneras Daniel
Director Comercial
Ricci Renzo
Cnova Brasil
Flávio
Dias
Gerente Operaciones
(1) To be elected
López Diego
Gerente Compras
Director Administrativo
Financiero
Bonnaud Nicolás
Gerente Administración
Dire
I
B
4
. The designation ofMasivo
Luis Moreno was approved by the Board
Directors in January 26, 2016
CastroofNatalia
Trombatore Daniela
Grupo Éxito Consolidated Overview
Strong Leadership Position in Four Countries
Combined
Group
As of Dec 31, 2015 **
Total sales
(USD MM)
3,266
5,968
256
316
Stores
573
1,941
Local Market
share1
44%
14.5% (2)
Recurring EBITDA
(USD MM)
674
189
10,097
16
642
65
27
2,606
45%
15%
54
Notes:
**2015 figures include the financial results of the operations in Brazil and Argentina since September 1 st, 2015.
GPA, Brazil is fully consolidated
FX rate COP$3.149/ USD
(2) Source: ABRAS (Brazilian Supermarket Association) as of December 31, 2014 for Food Retail only
Source: IMF.1Nielsen: Market share in modern retail
5
Omni-channel Strategy
Reaching all customers at distinct purchasing moments
Multi-Brand & Multi-format:
Opportunity to complement value proposition
E-commerce:
Opportunity to replicate expertise
• #6 global e-commerce pure player by sales
• US$ 5.3 Bn gross merchandise volume
• Specialized non-food: 1,014 stores
• Supermarket: 597 stores
• #2 e-commerce company in Brazil
e-commerce
• Proximity stores: 446 stores
Brick &
Mortar
• ~18 MM active customers
• ~32 MM placed orders
• Hypermarkets: 243 stores
• Discount/cash & carry: 306
• ~18,000 click & collect
Drive In
stations
Mobility
• Consolidated
operating GLA:
• Travel: 1.4 MM clients
• Insurance: ~1 milion clients
Home
Delivery
• Mobile: +700,000 users
• Money transfers: 2.1 MM transactions
• Financial retail: 1.8 MM cards issued
Cnova’s key figures (2014)
Click &
Collect
Virtual
Kiosks
790,000 m2
• Argentinian GLA:
145,000 m2
• Colombian GLA:
310,000 m2
• Brazilian GLA:
343,000 m2
• Distribution centers: 79
Complementary Businesses
Know-how to be transferred to new operations
Real Estate:
Dual business model to be replicated
6
Formats in Colombia
Well positioned brands & formats
262 stores
At your service
Hypermarkets,
Supermarkets &
Convenience stores
 Value for Money
 Customer Service
 Food and non-food
573 stores
58 stores
153 stores
100 stores
A pleasure for
everyday
Where buying costs less
 Premium products
1,095
Aliados
Surtimax
Convenience stores
Supermarkets &
Convenience stores
 Best in Fresh & Imported
products
58 stores

Soft-discount Proposition
 High % of Private Label
 Commercial
alliance with
independent
stores
 Top Experience
7
E-commerce
Leading the on-line market
~ 2% of total sales in Colombia
 Food & non-food
products
 Food products
 Click & Collect
 Premium & imported
 Drive-in
 Recipes
 App for mobiles
 First on-line discounter

Non-food products only
 Market Place
 Alliance with Groupe Casino
 Young, dynamic & innovative
8
Complementary Businesses
Profitable models based on strategic alliances
Financial Retail
JV with Bancolombia
3rd credit card issuer
1.8 million cards issued
Travel Business
JV with Avianca
1st travel agency in
tourism packages
1.4 million clients
Mobile Virtual Operator
Over 700k users
24 months of operations
The cheapest minute in the market
Insurance
JV with Grupo Sura
Over 1 million clients
International Money
Transfer Service
Starting from the USA
2.1 million transactions
9
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 + 1095 Aliados, representing 8% Market Share.
Premium Segment- Carulla – Service Oriented - High Profitability - 100 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
Formats and Brands in Brazil
1,941 stores
GPA formats provide high-quality products for households throughout the country
185 stores
336 stores
Premium Format
Supermarket &
Proximity stores
Hyper & Super
Targeting Brazilian Families
760 stores
Non-Food Retailer
To make the dreams of
customers come true
311 stores
Proximity
Mini Mercado Extra &
Minuto Pao de Acucar
95 stores
Multi-business Strategy
Low Operating Costs &
Competitive Prices
254 stores
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
Diversified Portfolio
Balanced mix sales between food and non-food offers resilience and flexibility
Food: 52.3%
Traditional Food Retail:
Hypermarkets,
Supermarkets,
Proximity,
Drugstores,
Gas Stations,
Food Delivery and
Commercial Spaces
Non Food: 47.7%
Electronics/Furniture
Bricks & Mortar
28.3%
37.6%
Cash & Carry
Gross Sales Mix (2015)
14.7%
19.4%
E-Commerce B2C and B2B
12
Summary of Brazil Operation Strengths
Resilient Food Business with Strong Performance in Assai brand
Management strengthening with Focus on Multivarejo
Store renovations @ 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
Formats and brands in Uruguay
65 stores
Solid growth in a country with high purchase power
Supermarkets
Supermarkets &
Proximity stores
29 stores
34 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
Hypermarkets
2 stores
14
Argentina - Libertad
Third real estate player in Argentina
 3rd 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 2015.
 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
Synergies Plan
Synergies Follow-up
Strong value added through synergies implementation
Unlocking synergies
Key know-how
Expert country
 Integration office set up
Margin on additional revenues
• Cash & Carry
• Textile
• Premium proximity
Purchasing synergies
• Food
• Non food
• National brands
• Private labels
Costs and capex synergies
• Shared services
• Marketing spend
• Procurement of maintenance
equipment
Cash & Carry expertise
Brazil
 Initial benefits in 2015 of
approximately USD $5 million
Textile business model
for hypermarkets
Colombia
Differentiated premium
proximity concept
Colombia
Brazil
Discount proximity
expertise
Colombia
 18 joint projects under
execution:
• Loyalty program
• Purchasing conditions
• Launching new formats
• Centralization of back office
 Implementation of best
commercial practices:
Real estate dual
business model
Colombia
E-commerce
accelerated sales
development
Brazil
Loyalty program
Colombia
• First Cash & Carry in Colombia
• Proximity format in Uruguay
• Dual Retail – Real Estate model
in Argentina
• Textile business model in Brazil
and Argentina
Objective: 50 bps EBITDA margin increase in 4 years
16
Real Estate Portfolio in Colombia
310,000 sqm of GLA, 11 Shopping Centers operating and 3 more under construction
Shopping Centers
Villavicencio
Villavicencio
GLA: 53,000sqm
(51% Stake)
San Pedro
Neiva
GLA: 37,500sqm
(51% Stake)
Sincelejo
Sincelejo
GLA: 20,500sqm
(51% Stake)
Opened 2015
Note: Images are illustrative
Envigado
Medellín
GLA: 100.000sqm
(100% Stake)
Wajiira
Riohacha
GLA: 20.000sqm
(100% Stake)
Buenaventura
Buenaventura
GLA: 6,500sqm
(100% Stake)
Palmas
Medellín
GLA: 6,500sqm
(51% Stake)
Fontibon
Bogotá
GLA: 4,500sqm
(100% Stake)
Barranquilla
Barranquilla
GLA: 64,500sqm
(90% Stake)
La Ceja
La Ceja
GLA: 10,000sqm
(100% Stake)
Caucasia
Caucasia
GLA: 2,500sqm
(100% Stake)
Laureles
Medellín
GLA: 20.000sqm
(80% Stake)
Puerta Norte
Medellín
GLA: 7,500sqm
(100% Stake)
Under Construction
Grupo Exito is structuring a real estate vehicle to accelerate its expansion:
Iwana
Barrancabermeja
GLA: 1,500sqm
(51% Stake)
•
•
Aiming to raise USD200 million.
•
•
Creation of additional near to 360,000 square meters of GLA.
To include at a first stage, 13 shopping centers and commercial galleries
already operating and other 6 projects either under structuring or
development.
Expected timing for launching the vehicle by mid-2016.
17
Real Estate Dual Business Model
Unlocking hidden value
•
Business expertise in the whole value
chain: Developing – Commercialization
- Operation
Current & Expected GLA
600,000
Opportunity
300,000
•
Income stability
•
Great opportunities to develop the
business model in Brazil and Uruguay
200,000
310,000
55,000
145,000
Colombia
Argentina
Operating GLA
High Occupancy Rates
343,000
Opportunity
Brazil
Uruguay
Additional GLA '19
Opportunity to Replicate Colombian Expertise
95%
COP $540,000 MM tenant annual sales
92%
90%
790,000 sqm of GLA in South America
11 operating shopping centers
17 commercial galleries
Colombia
Brazil
Argentina
5,130 commercial tenants
+800 international partners
1.7 MM vehicles/year
32 MM pedestrian traffic
18
Summarized P&L under IFRS
Solid Net Income growth despite equity tax burden and financial expenses related to debt
Consolidated Income Statement
Net Revenues
Gross Profit
Gross Margin
SG&A expenses
SG&A/Net Revenues
Recurring Operating Income
Recurring Operating margin
Operating Income (Ebit)
Operating margin
Net Income attributable to Grupo
Éxito
Net margin
Recurring EBITDA
Recurring EBITDA margin
EBITDA
EBITDA margin
FY15
FY14
Millions of
COP
Millions of
COP
33,402,211 10,484,822
8,254,435
2,629,421
24.7%
25.1%
6,748,950
2,012,135
20.2%
19.2%
1,505,485
617,286
4.5%
5.9%
1,356,807
605,317
4.1%
5.8%
573,495
499,431
1.7%
4.8%
2,021,392
814,614
6.1%
7.8%
1,872,714
802,645
5.6%
7.7%
FY15/14
218.6%
213.9%
235.4%
143.9%
124.1%
14.8%
148.1%
133.3%
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.
19
Financial Results by Country
Information in IFRS
Colombia
Millions of COP
Net Revenues
Gross Profit
FY15
FY15/14
FY15
2,162,401
671,842
221.9%
637,699
2,611,361
2,405,740
8.5%
4,660,878
746,695
223,681
233.8%
236,458
24.6%
24.5%
23.3%
34.5%
33.3%
2,017,693
1,823,514
3,925,268
616,188
188,621
19.0%
18.6%
19.6%
28.5%
28.1%
593,668
582,226
735,610
130,507
35,060
5.6%
5.9%
3.7%
6.0%
5.2%
804,911
770,875
996,870
169,302
43,739
7.6%
7.9%
5.0%
7.8%
6.5%
FY2015 % Sales by country
Colombia
32%
FY14
19,980,882
Recurring EBITDA margin
Uruguay
7%
FY15
8.2%
Recurring Operating margin
Recurring EBITDA
FY15
9,812,980
SG&A /Net Revenues
Recurring Operating Income
FY15/14
Argentina
10,622,539
Gross Margin
SG&A Expenses
FY14
Uruguay
Brazil
10.6%
2.0%
4.4%
37.1%
226.7%
190,758
29.9%
272.2%
45,700
7.2%
287.1%
50,309
7.9%
2015 Consolidated Sales mix
Argentina
2%
Non Food
36%
Brazil
59%
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.
20
Debt Ratios and Maturity
Holding Debt Maturity
DFN/Ebitda ratio
4
3.5
3
2.5
2
1.5
1
0.5
0
3.8
0.35
Holding
Consolidated
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
1,502
213 313 313
97 195 195 195 195 195 195 195 195 193
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
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 + 1.75%
GPA Stable Rating AA+ 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.
21
Positive Effect on Profitability Indicators
Clear upside in multiples versus peers
Expected effect on ROE (4 year plan)
EPS expected evolution (4 year plan)
30.8%
9.6%
6.5%
6.4%
Before synergies
Synergies run-rate
Stand alone
Dividend Yield
EV/EBITDA & P/E (x)
P/E
28.42
Éxito
2.5%
Carrefour
1.7%
Falabella
Pricesmart
Source: Bloomberg market consensus as of 31/12/2015
1.5%
Cencosud
0.8%
Walmex
16.32
6.91
1.3%
Carrefour
10.54
7.77
Éxito
17.97
10.26
5.0%
Cencosud
Pricesmart
13.86
30.5
16.62
Walmex
21.14
Falabella
16.96
EV/EBITDA
Post-transaction including synergies
22
Grupo Éxito wrap up
Grupo Éxito is the leading retail in South America:
Leader in E-commerce, Cash & Carry, Premium and Proximity formats.
Significant geographical footprint in 4 countries, bringing the opportunity to
reach over 280 million people.
Regional leader in omni-channel strategy.
#1 in Colombia, Brazil (food & non-food), Uruguay and #3 in commercial real
estate in Argentina.
Value creation for shareholders through synergy potential to be captured and
the creation of a Real Estate vehicle to finance its expansion.
23
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
24
Appendixes
25
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 1st, 2015
26
Social Commitment
We are a solidary and
responsible company
A fairer and more competitive country
Niños beneiciarios del programa Infancia Sana de la Fundación Éxito,
atendidos en el Hogar Infantil Católico Claret en Cali - 2014.
7.627
+ $18.570
Millions COP invested in child
nutrition.
allies
29 new
Gen Cero Program
Families supported by the
program of child nutrition
FundaciónÉxito andPriceSmart
Signed an agreement to
support 134 families and
assure proper nutrition for low
income Childs
35.529
Childs between
0 and 5 years
supported by
Fundacion Exito
We reach La Guajira
fighting against famish in
native communities
27
Ownership Structure
As of December 31, 2015
ADR program
Other
Shareholders
10.5%
Colombian
Pension
Funds
15.8%
3.0%
Casino
Groupe
54.8%
International
Funds
15.9%
28
www.grupoexito.com.co
[email protected]
Tel +574 3396560
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”.