Carrefour Sa · EURONEXT:CA
Carrefour Sa — Grupo Carrefour Brasil — Merger or Acquisition (March 2021)
29 slides from Carrefour Sa's merger presentation, Mar 24, 2021
Slide 1: Acquisition of Grupo BIG
Grupo Carrefour Brasil Acquisition of Grupo BIG March 24th, 2021
Slide 2: Disclaimer
Disclaimer This document contains both actual figures and c IR Contact assessments of expectations about operational and financial results. These are based on Grupo Carrefour Brasil management's current views and assumptions. Such statements are not guarantee of future Sébastien Durchon performance.
Slide 3: Table of Contents
Table of Contents Executive Summary Grupo BIG at a glance A transformational transaction High value creation for all our for Grupo Carrefour Brasil stakeholders Transaction Highlights Key Takeaways 3
Slide 4: Executive Summary
Executive Summary 4
Slide 5: A unique opportunity to enhance and expand our ecosystem
A unique opportunity to enhance and expand our ecosystem 1 A compelling strategic Strong geographic complementarity between the two players, with combined revenues of ~R$100bn rationale Addition of a high-growth potential format with Sam’s Club 2 An operation benefiting all Larger variety of p
Slide 6: Grupo BIG at a glance
Grupo BIG at a glance 6
Slide 7: Grupo BIG is a strategic player in Brazilian food retail
Grupo BIG is a strategic player in Brazilian food retail… Key Operational Data FY 2020 Geographic Footprint2 • 387 stores • R$21.7bn of net sales Northeast: 185 stores • R$0.9bn of adjusted EBITDA1 • 41,000 employees 48% • 15 distribution centers and 6 wholesale centers (B2B) • 13 gas stations • 47%
Slide 8: Operating banners with high customer recognition
… operating banners with high customer recognition Data as of Dec/20 Format Club Hypermarkets Supermarkets Proximity Cash & Carry Banner Positioning Premium Mainstream Mainstream Soft Discount Discount # of stores 35 1071 99 97 49 % of total net 21% 52% 27% sales Addition to ~ 3x in number of stores
Slide 9: Sam's Club is a unique format with a premium value proposition
Sam’s Club is a unique format with a premium value proposition and significant growth potential Format Specifics Key Operational Metrics Membership-only warehouse chain operated under a licensing agreement with Walmart. It sells a variety of bulk grocery items, electronics & home 2m members R$340
Slide 10: An improving financial trajectory
An improving financial trajectory c GRUPO BIG HAS INITIATED A PROCESS OF TRANSFORMATION SINCE ITS ACQUISITION BY ADVENT IN 2018 Hiring of a very experienced management team Immediate closure or sale of non-profitable stores Sustained pace of conversions of some hypermarkets to Club and Cash &
Slide 11: Grupo BIG also owns valuable property assets
Grupo BIG also owns valuable property assets c c HIGH ASSET QUALITY & STORE LOCATIONS SIZEABLE REAL ESTATE PORTFOLIO Excellent store conditions especially for Cash & Close to half of Grupo BIG’s stores are owned which is in line Carry and Hypermarkets thanks to recent store with Grupo Carrefour
Slide 12: A transformational transaction for Grupo Carrefour Brasil
A transformational transaction for Grupo Carrefour Brasil 12
Slide 13: The combination of two complementary players will result in ~R$100bn sales
The combination of two complementary players will result in ~R$100bn sales and R$50bn billings in banking business Combined network North North North Northeast Northeast Northeast 4 18 4 18 8 54 160 19 168 73 6 6 13 24 4 5 17 24 Midwest Midwest Midwest 5 248 86 31 8 279 94 Southeast 21 Southeast 21
Slide 14: Grupo Carrefour Brasil already has a powerful, omnichannel ecosystem
Grupo Carrefour Brasil already has a powerful, omnichannel and integrated ecosystem… Tenants B2B R$31bn Professional Customers R$ 51.8 bn R$ 22.9 bn B2C B2C R$20.8bn B2B Sellers 45m Atacadão Sellers Card customers1 Off Us On us R$ 6.5 bn R$11.1 bn 8.2m credit R$ 38.2 bn cards 290M Carrefour Acquirin
Slide 15: Maximizes monetization and increases customer lifetime value
… which maximizes monetization and significantly increases customer lifetime value With a single visit in 1 c one of our 6 c Customer goes grocery shopping in our 2 c hypermarkets, this Pamplona hypermarket in SP: R$200 in sales client brings R$662 Customer subscribes to our mobile Customer pays w
Slide 16: Addition of Grupo BIG will make our ecosystem stronger
This addition of Grupo BIG’s stores, banners and customers to our ecosystem will make it stronger and more comprehensive Grupo Carrefour Brasil has strong business foundations… … and Grupo BIG will help us reinforce them One of the leaders in the Brazilian food retail sector ~400 stores in complem
Slide 17: High value creation for all our stakeholders
High value creation for all our stakeholders 17
Slide 18: The transaction will greatly benefit Brazilian consumers
The transaction will greatly benefit Brazilian consumers… We have been protecting and improving the purchasing power of our customers… » Atacadão & Carrefour have best-in-class models in, respectively, Cash & Carry and Hypermarkets » We offer the lowest prices across the food retail market Price Ind
Slide 19: As well as Brazilian society as a whole
… as well as Brazilian society as a whole The transaction will result in new investments & jobs… » Higher investments: Grupo Carrefour Brasil invested ~R$15bn since 2019, including this transaction. Additional capex will be dedicated to store conversions and expansion of Sam’s Club footprint c » Sig
Slide 20: Significant annual synergies expected (~R$1.7bn in 3 years)
The transaction is expected to generate very significant annual synergies for our shareholders (~R$1.7bn in 3 years) Increase sales density & thus profitability via conversion of Maxxi stores to Atacadão banner and c BIG/Bompreço hypermarkets either to Atacadão, Sam’s Club or Carrefour banners Finan
Slide 21: Upside potential from the performance gap between Grupo BIG and Carrefour Brasil
Upside potential from the significant performance gap between Grupo BIG and Grupo Carrefour Brasil Data for FY20 Hypermarkets Hypermarkets +67% +61% Net Sales/sqm R$12k/sqm R$20k/sqm R$23k/sqm R$37k/sqm # of stores # of stores Network increase 107 stores + 100 stores 49 stores + 206 stores 4.3% of n
Slide 22: A clear integration plan for Grupo BIG's banners
A clear integration plan for Grupo BIG’s banners… Sam’s Club will maintain independent operations because of its unique format. Club We see significant upside through model optimization and organic expansion. BIG and Bompreço hypermarkets will either be converted to the Carrefour, Atacadão or Sa
Slide 23: In order to strengthen and leverage our ecosystem
… in order to strengthen and leverage our ecosystem Unique & premium format, new to our ecosystem ~ +25% in number of stores: Increase our hypermarket network Acceleration equivalent to more than 2 45m Reinforce our supermarket segment with years of expansion customers relevant regional play
Slide 24: Transaction Highlights
5 Transaction Highlights 24
Slide 25: A very attractive transaction structure
A very attractive transaction structure, designed to align both parties’ interests… % TO BE • 100% of Grupo BIG’s share capital (Advent selling its full 81% stake and Walmart Inc. its 19% stake) ACQUIRED PRICE • R$7.0 billion of Enterprise Value (pre-IFRS 16) REFERENCE • EPS accretion expected from
Slide 26: 30% stock component and additional cash payment
…through a 30% stock component in the offer and an additional cash payment based on our share’s appreciation The mix of cash and stock (70/30) intends to reach the following: Advent / Walmart and Grupo Carrefour Brasil believe that: 1 At signing • CRFB’s share price has growth potential on a standal
Slide 27: Post-transaction shareholding structure
Post-transaction shareholding structure Grupo Carrefour Brasil Current Shareholding Structure Grupo Carrefour Brasil Pro-Forma Shareholding Structure 20.7% 19.5% 5.6% 7.7% 7.2% 71.6% 67.7% Carrefour SA Peninsula Free Float Carrefour SA Peninsula Advent & Walmart Free Float 27
Slide 28: Key Takeaways
6 Key Takeaways 28
Slide 29: A transformational deal for Grupo Carrefour Brasil
A transformational deal for Grupo Carrefour Brasil A milestone to accelerate A high potential model, A smooth & quick integration A value accretive transaction growth & profitability Sam’s Club, to complement with low execution risk for all stakeholders our ecosystem c c c c Acquisition of over 15
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