Corporate Presentation Cencosuds2.q4cdn.com/.../2015/Corporate-Presentation-1Q15-(ENG).pdf · 2016. 2. 11. · Corporate Presentation 4 Cencosud is a leading multi-format retailer

Fourth Quarter

Corporate Presentation

Cencosud2015

Corporate Presentation | www.cencosud.com | 2

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.

3Corporate Presentation www.cencosud.com

Retailing Power

2015

936 Supermarkets; 2.4 mm sqm

53 Shopping Centers; 0.8 mm sqm

94 Home Improvement; 0.8 mm sqm

88 Department Stores; 0.4 mm sqm

Key Metrics

Revenue Evolution (USD Bn)

Cencosud snapshot

*

• Over 5.5 MM Cards Issued

• 148,700 Employees

• 800 MM Customers

• 4,394,604 sqm of Selling Space

• 1,117 Stores + 53 Malls

4.018 4.9746.032

9.785 8.847 9.88612.080

14.60116.503 16.830 17.353

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

CAGR OF 15.8%


Cencosud is a leading multi-format retailer in South America

Underpenetrated RegionRegional Footprint / Market Position

Source: ILACAD and US Census Bureau, figures as of December 2013

3rd Supermarkets2nd Home Improvement

1st Supermarkets4th Department Store

2nd Supermarkets2nd Home Improvement

2nd Shopping Centers2nd Department Stores

4th SupermarketsNortheast Region (#2)

Minas Gerais (#1)Rio de Janeiro (#3)

2nd Supermarkets1st Home Improvement2nd Shopping Centers

Source: Euromonitor

Sales Area Per Capita DYS (sqm/capita)

Sales Area Per Capita Food Retail (sqm/capita)

Sales Area Per Capita D-Stores (sqm/capita)


Cencosud a Development and Growth Story

Source: ILACAD and US Census Bureau, figures as of December 2013

1: this number includes shopping centers2. EBITDA is calculated as EBITDA minus revaluation of assets, indexation units and foreign exchange variations.3: Net Financial Debt does not include debt related to Cencosud´s banking activities.

Acquisitions and Revenue

(USD Billion)

2.2

4.04.9

6.0

9.7

8.8

9.912.0

14.6

16.5

16.8

Colombia

1,170

3.6x

192%

180%

89%

LTM 20152009

10,873,515

663,218 17.4

2015

Corporate Presentation www.cencosud.com 6

The Cencosud Roadmap

Strategic Focus: Healthy Organization, Focus on Consumer

The Business: Expense Control, Competitiveness

Main Market Trends, Omni-Channel, Loyalty Program, Brand Building

Consumer

Centric

Strong

Team

Focus

Efficiency &

Productivity

Sustainable

Brands

Growth &

Market Share

Bottom Line &

Cash

Generation

Loyalty

Programs

Competitive

Edge Private

Label with

Perceived

Value

Omni-Channel

Speeding up E-

Commerce

Corporate Presentation www.cencosud.com 7

High Income Brands Low Income Brands

Excellence in Perishables Imported Products Quality in Service

Promotional Pricing Quality on a Budget Proximity


1Q15 Highlights

• Revenue expansion in all divisions mainly

fueled by Supermarkets and Home

Improvement.

• Department Stores SSS back to positive

territory with gross profit gains.

• Colombia continues to deliver positive

SSS in Food retail and Home

Improvement.

• Significant expansion of gross margin

drives Adj. EBITDA growth.

• Closed Scotiabank financial services

transaction.

9

Food Retail and D-Stores

leading top line growth

• Robust SSS in Chile supermarkets.

• Santa Isabel repositioning gaining additional speed

• Stable gross margin with more efficient pricing strategy

• Declining traffic trend broken

• Further top line growth curbed by negative currency

swings in the COP and BRL.

• D-Stores bouncing back from 2014 lows.

• Positive SSS from Chile and Peru greenfield

• Gross margin recovery following improved

currency pass thru and better pricing

• Inventories in Check

Corporate Presentation | www.cencosud.com |

10

Food Retail in Brazil

Undergoing High Competitive

Pressures

• Depreciation of BRL and soft demand lead to negative

SSS & revenue contraction from Brazilian supermarkets.

• SAP rollout yielding results in gross profit through better

performance management

• Focus on profitability: EBITDA generation at around 2%

according to guided by management.

• Management changes in Brazil laying ground to later

develop improved commercial strategy.

• Leaner operations; Additional SG&A curbs & COGs

management to come


11

Consolidated Revenue

Evolution

• Revenue gains across all division despite

unfavorable currency swings in Colombia and

Brazil.

• Positive SSS across all markets and businesses

except Brazil.

• Colombia Home Improvement recovering SSS

traction on better product mix and recovering

construction industry in Bogota area.

Consolidated Adjusted EBITDA

Evolution

• Ebitda expansion on Supermarket improvements

in Peru, Brazil and Argentina.

• Department Stores posting Ebitda expansion of

over 100% on improved Chile performance.

• Home Improvement booked a reduction in Ebitda

generation on new store openings across its

footprint, labor contingencies in Argentina and

migration to new product mix in Colombia.

.

Fig

ure

s in

CL

P m

illi

on


ResultsBy Business

13

Revenue Evolution

Adjusted EBITDA Evolution

• Positive SSS in Argentina and stable currency led top

line gains in the division.

• 13 Net Store Openings YoY or 1.6% selling space

Growth.

• Chile recorded outstanding 1Q15 SSS performance

on recovering Santa Isabel.

• Price investment strategy in Peru continues to yield

SSS gains.

• Aggressive competitive scenario in Brazil and

slowing economy lead to negative SSS.

Fig

ure

s in

CL

P m

illi

on

SSS evolution by country

(local currency)

Supermarkets

• Peru Ebitda jumped 85.7% on expanding gross

margin and curbed SG&A.

• Brazil Ebitda growth was fueled by expanding gross

margin and SG&A cuts.

• Ebitda in Argentina posts expansion of 7.4% on

positive SSS and stable gross margin.

• Chile and Colombia posted lower Ebitda generation

on labor contingencies in Chile and higher

headcount in Colombia. Colombia margins remained

stable

303

813


14

Fig

ure

s in

CL

P m

illi

on

Home Improvement

• Revenue up 19% on positive SSS across all

markets led by Argentina.

• Ebitda for division dropped on greater SG&A

from Argentina on labor contingencies and

accounting changes at Blaisten, collective

bargaining agreements and one off in Chile.

• Colombia continues to improve performance.

Department Stores

• Gains in revenue on positive SSS in Chile and Peru.

• Progress in EBITDA on improved pricing and currency

management.

• Improved inventory management leading to reduced

working capital needs.

34.143


15

Fig

ure

s in

CL

P m

illi

on

Shopping Centers

• Revenue growth in all markets; Chile mainly

explained by retroactive lease collection for

antenna space and renegotiation of lease

agreements with Ripley.

• Shopping Center EBITDA contracted to higher

real estate taxes paid in Chile and Argentina

partially offset by higher occupancy rates in

Chile, Argentina & Peru.

Financial Services

• Argentina and Peru lead in top line growth on greater

portfolio.

• Lower risk in Brazil explains greater contribution to

revenues and Ebitda.

• Lower EBITDA in most markets was the result of

higher cost of funding

40.243

- 4.6%

- 21.1%

36.17328.542


16

Effective Tax Rate

• Chile

• Higher income tax rate of 22.5% vs. 20% in 1Q14

• Non- Cash effect of un-claimable tax losses at a HoldCo level of CLP

4,217 million (FUT effect)

• Brazil:

• Badwill due to corporate reorganization

• Non-Cash unrecoverable Tax Losses at our Brazilian Sub

• Total Effect of CLP 6,559 million

• Colombia

• Higher income tax rate of 39% vs. 34% in 1Q14

• Newly created wealth tax (non-deductible tax expense) as a one time

effect in the 1Q15 for the next 2 years

• Accelerated depreciation of tax goodwill Higher income tax in Colombia

due to tax reform

• Total effect of CLP 4,010 million

Conciliation


17

Financial RatiosCencosud estimates it can bring down its net financial leverage to under 3.0x by

YE15

Net debt evolution

(US$ bn)

Net leverage

(net debt / EBITDA)

Breakdown by Rate

(After CCS)

Breakdown by

Currency

(After CCS)


CLPCLFUSDBRLCOPPENARS

FixedVariable


Debt Amortization Schedule (USD million) as of March 2015

Chile Financial Services deal with Scotiabank materialized on

May 1st 2015.

Following reception of funds our liquidity position also

improves substantially.

FINANCIAL DEBT

USD MM

Amortizations as of

March 2015

Amortizations

Proforma as of

March 2015

Chile food strategy yields

above inflation SSS.

Positive momentum in

revenue across most division

D-Stores recovering with

some weak spots in April due

to weather related factors.

Leverage down closer to

target as of 2Q15.

Progress on Real Estate IPO

and Costanera Center.

First Quarter | www.cencosud.com | 20

Upcoming Events

Bank of America CalGems

ConferenceLos Angeles, CAJune 2 thru 4

Credit Suisse Annual Mid

Summer Latam ConferenceNew York, NYAug 5 & 6

2Q15 Earnings ReleaseAugust 28, 2015 After market

Marisol Fernández LeónIR Manager

Phone +562 2959 [email protected]

Natalia NacifSenior IR Analyst


Ignacio Reyes MirandaSenior IR Analyst


Documents

Corporate Presentation Cencosuds2.q4cdn.com/.../2015/Corporate-Presentation-1Q15-(ENG).pdf · 2016. 2. 11. · Corporate Presentation 4 Cencosud is a leading multi-format retailer