Sonaecom Sgps Sa · EURONEXT:SNC
Sonaecom Sgps Sa — Sonae SGPS — J.P. Morgan Retail Conference, London 2008
39 slides from Sonaecom Sgps Sa's conference presentation, June 2008
Slide 1: Sonae SGPS Management Presentation 1Q08
SONAE SGPS MANAGEMENT PRESENTATION 1Q08 June 2008
Slide 2: Agenda
AGENDA 1 Sonae corporate profile 2 Retail 3 Shopping Centres 4 Telecommunications 5 1Q08 Group results Appendix: Success factors Macroeconomic environment #1
Slide 3: Sonae corporate profile
Sonae corporate profile
Slide 4: Sonae corporate profile
SONAE CORPORATE PROFILE Sonae SGPS controls and actively manages a portfolio of companies, each run in an independent manner SONAE SGPS* 100% 50% 52.2% 100% Sonae Distribuiç Distribuição Sonae So ae S Sierra e a Sonaec Sonaecom FOOD & NON FOOD SHOPPING CENTRES TELECOMMUNICATIONS RETAIL Market leader
Slide 5: Retail
Retail
Slide 6: Retail - Composition
RETAIL - COMPOSITION SONAE DISTRIBUIÇÃO Food Retail Non--Food Retail Non C Consumer El Elect. t Computers Hypermarkets (Average sales area = 8,000 m2) Hypermarkets (Average sales area = 2,000 m2) Sports Goods Apparel DIY Supermarkets (Average sales area = 1,000 m2) Travel Agencies + 6 format start s
Slide 7: Retail - Key Facts
RETAIL - KEY FACTS The leading food retailer in Portugal, considered an international benchmark in the sector in terms of profitability MODERN FOOD No.1 FOOD MARKET SHARE RETAILER (%) in Portugal 30% Market Share Others, 1.1% 655 STORES Plus, 1.6% 12 brands amounting to MARKET LEADER Leclerc, 3% 714
Slide 8: Retail - Quarterly Corporate Developments
RETAIL – QUARTERLY CORPORATE DEVELOPMENTS On 2 January 2008, Carrefour Portugal stores were successfully integrated, Integration of including IT systems, Human Resources and rebranding; Carrefour Portugal The twelve units were closed for only 2 days, and have delivered very promising sales figures i
Slide 9: Retail - 1Q08 Results
RETAIL – 1Q08 RESULTS BOLDNESS Strengthen of leadership position in Portugal, with turnover up by 28% and EBITDA increasing 18%, despite the launch of the loyalty card in January 2007 48.8 926.5 TURNOVER EBITDA 45 8 45.8 (M.€ (M. €) +28% (M.€ (M. €) +7% 725.5 6.3% 5.3% 1Q07 1Q08 1Q07 1Q08 Sales Area
Slide 10: Retail - Outlook for 2008
RETAIL – OUTLOOK FOR 2008 Maintain strong organic growth and store refurbishment SALES AREA • 2008: Above 10% CAGR in sales area; more than 60,000 m2 of new sales area. TURNOVER • 2008: Above 20% turnover increase. EBITDA • 2008: Sustain recurrent EBITDA margin; • 2008: Total CAPEX of 300 Million eu
Slide 11: Shopping Centres
Shopping Centres
Slide 12: Shopping Centres - Composition
SHOPPING CENTRES - COMPOSITION SONAE SIERRA Shopping Centres Sierra development Sierra investment Sierra management Sierra Brazil Responsible p for Owns Sonae Sierra’s Responsible p for day y to Similar business development of assets t – shopping h i day management of structure in Brazil; sh
Slide 13: Shopping Centres - Key Facts
SHOPPING CENTRES - KEY FACTS BOLDNESS International shopping centre specialist with an integrated approach to the business INTERNATIONAL INTERNATIONA PRESENCE INTERNATIONAL SHOPPING CENTRE SPAIN 29 SPECIALIST INTEGRATED Projects in pipeline APPROACH 14 Development+ Under development with ITALY Owner
Slide 14: Shopping Centres - Quarterly Corporate Developments
SHOPPING CENTRES – QUARTERLY CORPORATE DEVELOPMENTS On 27 March 2008, Sonae Sierra launched its second shopping centre investment Launch of fund with a total equity of 300 million euros; Sierra Portugal Fund The SPF is seeded with eight Portuguese shopping centres, representing a total (SPF) market
Slide 15: Shopping Centres - 1Q08 Results
SHOPPING CENTRES – 1Q08 RESULTS BOLDNESS higher profitability, achieving a good set of results underpinned by the significant portfolio of assets under management and the increased pipeline of projects under development EBITDA 47.6 NET (M.€ (M. €) +31% PROFIT +34% 18.7 59.7% 36.3 GROUP SHARE 14.0 57
Slide 16: Shopping Centres - Outlook for 2008
SHOPPING CENTRES – OUTLOOK FOR 2008 Continue developing project pipeline and looking for value adding opportunities Yields at historically low levels and scope for valuation gains more limited; YIELDS Operating performance of well-located, well-designed, well-managed shopping centres will remain str
Slide 17: Telecommunications
Telecommunications
Slide 18: Telecommunications - Composition
TELECOMMUNICATIONS - COMPOSITION SONAECOM 100% 100% 100% 100% Telco Mobile Mobile Telco Wireline Media SSI (1) SSI (1) #3 mobile Operator; Leading altnet Reference newspaper Information system operator in Portugal; in Portugal; and Technology Mobile communications products provider; in Por
Slide 19: Telecommunications - Key Facts
TELECOMMUNICATIONS - KEY FACTS BOLDNESS Organic growth acceleration and strengthening of market shares PORTUGUESE TELECOMS MARKET LEADING EVOLUTION(1) INTEGRATED (%) ALTERNATIVE TELCO 5 6% 5.6% 5 5% 5.5% 5.2% In Portugal 19.4% 19.9% 20.9% 13.5% MARKET 20% MARKET SHARE SHARE Portuguese Telecoms 11.6%
Slide 20: Telecommunications - Quarterly Corporate Developments
TELECOMMUNICATIONS - QUARTERLY CORPORATE DEVELOPMENTS On 21 February 2008, Sonaecom announced its 3-year investment plan totalling 240 million euros for deployment of fibre; Next Generation Payback: 9 years; Break-even: year 5; Network Will allow coverage of over 1 million homes and approximately 25
Slide 21: Telecommunications - 1Q08 Results
TELECOMMUNICATIONS - 1Q08 RESULTS BOLDNESS Growth in customers and customer revenues, on the back of increased marketing and commercial activity 237.7 34.0 34.1 TURNOVER EBITDA (M.€ (M. €) 198.9 +20% (M.€ (M. €) +0.2% 17.1% 14.3% 1Q07 1Q08 1Q07 1Q08 MOBILE BROADBAND 2 927 2,927 ACCESSES CUSTOMERS (‘
Slide 22: Telecommunications - Outlook for 2008
TELECOMMUNICATIONS - OUTLOOK FOR 2008 Push for growth, improve customer management and lead innovation ACCELERATE GROWTH AND • Increase mobile brand presence/investment; INCREASE • Further develop substitution, integrated and convergent offers / market approach. MARKET SHARE SUPERIOR • Accelerate in
Slide 23: 1Q08 Group results
1Q08 Group results
Slide 24: 1Q08 Group Results: Turnover and EBITDA
1Q08 GROUP RESULTS BOLDNESS Turnover and Operational Cash Flow improved across all our business units… TURNOVER 1,204.2 TURNOVER 926.5 (M.€ (M. €) +26% BY 956.6 BUSINESS 725.5 (M.€ (M. €) 1Q07 1Q08 237.7 198.9 63.3 79.7 Retail Shopping Telco 1Q07(R) 1Q08 110.3 EBITDA EBITDA BY +9% (M.€ (M. €) BUSINE
Slide 25: 1Q08 Group Results: Net Debt and Capex
1Q08 GROUP RESULTS BOLDNESS Investment for growth accelerated and leverage increased… 3,013.2 , NET DEBT NET DEBT +43% (M.€ (M. €) BY 1,265.7 2,106.6 BUSINESS (M.€ (M. €) 887 3 887.3 1Q07(R) 1Q08 541.1 542.9 340.3 276.1 Retail Shopping Telco 1Q07(R) 1Q08 CAPEX CAPEX BY +8% 133.6 BUSINESS (M.€ (M. €)
Slide 26: 1Q08 Group Results: Financial Structure
1Q08 GROUP RESULTS BOLDNESS …notwithstanding, consolidated financial structure is comfortable 7.7 7 6.7 6.1 6.2 56 5.6 5.4 4 5.3 4.9 INTEREST 4.6 COVER (last 12 months) 3.7 3.6 3.6 3.7 4.3 3.2 3.4 27 2.7 29 2.9 1.9 NET DEBT TO EBITDA (last 12 months) 2005 1Q06 2Q06 3Q06 2006 1Q07 2Q07 3Q07 2007 1Q08
Slide 27: Appendix: Success factors
Appendix: Success factors
Slide 28: Success Factors: Holding as Value Enhancer
APPENDIX – SUCCESS FACTORS: HOLDING AS VALUE ENHANCER Value Proposal: Collaboration with the sub-holdings sub holdings in strategy and strategic goals definitions; Capital allocation among current business areas and to new growth opportunities; Explore the Group global size and set of competencies;
Slide 29: Success Factors: Strong Values and Management Culture
APPENDIX – SUCCESS FACTORS: STRONG VALUES AND MANAGEMENT CULTURE Sonae: a Group with confirmed sustainable growth and profitability LONG-TERM LONG- AMBITION PERSPECTIVE aimed at growth approach to its and creating businesses shareholder value ABOVE AVERAGE SHAREHOLDE R RETURN AIMING FOR LEADERSHIP t
Slide 30: Success Factors: Ambition Aimed at Growth & Creating Value
APPENDIX – SUCCESS FACTORS: AMBITION AIMED AT GROWTH & CREATING VALUE Ambition aligned to offer superior economic value to our shareholders Industry consolidation and portfolio value management • Demerger of Sonae Indústria (2005) Expansion into new • Demerger of Sonae Capital territory at (2007) Sh
Slide 31: Success Factors: Long-Term Perspective Approach
APPENDIX – SUCCESS FACTORS: LONG-TERM PERSPECTIVE APPROACH Focus on profitability does not stop us from preparing the future LONG TERM GROWTH EVENTS Retail and Shopping • Assets’ location are premium, unique and difficult to replicate; centres assets • Important competitive advantage on the long-run
Slide 32: Success Factors: Efficiency Driven
APPENDIX – SUCCESS FACTORS: EFFICIENCY DRIVEN Continuously pushing for efficiency gains Merger of mobile and • Anticipating the future convergence of technologies; fixed divisions • Separation of fixed and mobile markets became obsolete • Continuing efforts to modernize the company: 30 major refurbi
Slide 33: Success Factors: Eternal Challenger in Its Markets
APPENDIX – SUCCESS FACTORS: ETERNAL CHALLENGER IN ITS MARKETS BOLDNESS Relentlessly exploring new and challenging business opportunities BOLDNESS Pioneering the expansion of mobile frontiers at our telco business • Fixed-mobile convergent product • Wireless broadband offer INNOVATION Launch of the A
Slide 34: Success Factors: Aim for Leadership
APPENDIX – SUCCESS FACTORS: AIM FOR LEADERSHIP BOLDNESS Aiming to be number one player in our markets • Reinforcement of market leadership from 25% to 30%; Acquisition of • 12 hypermarkets in operation; Carrefour • 13 licensed projects; • Total sales area (including projects):166.500 m2 Acquisition
Slide 35: Appendix: macroeconomic environment
Appendix: macroeconomic environment
Slide 36: Macroeconomic Environment: Portuguese Indicators
APPENDIX – MACROECONOMIC ENVIRONMENT: PORTUGUESE INDICATORS Portuguese GDP is expected to decelerate in the forecasted period, damped by the slowdown in economic activity in major trading partners, as well as by the credit market turmoil and the increase in energy and food prices. Contribution of in
Slide 37: Macroeconomic Environment: Portuguese Inflation
APPENDIX – MACROECONOMIC ENVIRONMENT: PORTUGUESE INFLATION Total inflation as been rising and is forecasted to reach higher levels than in last year as a result of increasing oil and commodity prices. Pressure on the demand side for food and energy has been rising, specially due to China sustained d
Slide 38: Macroeconomic Environment: Coincident Indicators of Growth and Private Consumption
APPENDIX – MACROECONOMIC ENVIRONMENT: PORTUGUESE COINCIDENT INDICATORS OF GROWTH AND PRIVATE CONSUMPTION Coincident indicator for private consumption has been declining since the beginning of the financial markets turmoil, however the same indicator for economic activity inflected its path only by S
Slide 39: Macroeconomic Environment: Glossary
APPENDIX – MACROECONOMIC ENVIRONMENT: GLOSSARY Euro Area Consumer Confidence Indicator (Eurostat), is a short-term statistics based on a consumer survey that includes questions about respondents respondents’ perception about their financial situation over the next 12 months months, general economic
Sonae SGPS — J.P. Morgan Retail Conference, London 2008 on 6ix