Distribuidora Internacional De Alimentacion Sa · BME:DIA
Distribuidora Internacional De Alimentacion Sa — Investor Day (2017)
199 slides from Distribuidora Internacional De Alimentacion Sa's investor day presentation, 2017
Slide 1: 3rd Capital Markets Day 2017 London
rd CAPITAL MARKETS DAY 2017 LONDON
Slide 2: David Peña, Investor Relations Officer
David Peña Investor Relations Officer, IRO
Slide 3: Agenda
Agenda 09:00H OPENING SESSION Richard Golding (First Vice-chairman of DIA's BOD) 09:30H FOCUS ON CUSTOMER Ricardo Currás (Chief Executive Officer, CEO) Miguel Guinea (Country Manager DIA Portugal) Jürgen Dietz (Regional Director) Eric Marot (Logistic & Supply Director Spain) Raquel Beneitez (Corpora
Slide 4: CMD significant event
• Dynamic organic growth in Emerging Markets: CMD a. Brazil: over 1,500 stores by 2020 significant event b. Argentina: more than 1,100 stores by 2020 • On-line sales are expected to grow by 6 times to more than EUR120m by 2020 • Capex expected to go down to the range of 3.5% - 4.0% over net sales •
Slide 5: Capital Markets Day
rd CAPITAL MARKETS DAY 2017 LONDON
Slide 6: Richard Golding
Richard Golding Vice - Chairman of DIA's BOD
Slide 7: ef
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Slide 8: Board of Directors (I)
1 BOARD OF Ana María Llopis DIA Non Exec Chairwoman (2011) Richard Golding DIA First Vice Chairman (2017) Member of DIA ACC Mariano Martín DIA Second Vice Chairman (2017) Chairman of DIA ARC Julian Díaz Chairman of DIA ACC (2011-2016) Member of DIA ACC Antonio Urcelay Member of DIA ARC (2015) Non Ex
Slide 9: Board of Directors (II)
2 BOARD OF Relevant features / Separation of CEO and Chairwoman role / Majority of independent directors DIRECTORS (II) / 30% of directors are women / 12 years maximum term A diverse, international, / Limited number of other BoD (6) independent and experimented Board / Effective evaluation and succe
Slide 10: DIA's Remuneration Policy
3 Principles Remuneration structure & shareholder approval BOARD / Prudence through moderate / Maximum compensation approved by AGM >EUR1.5m since 2012 remuneration aligned with DIA’s market practices / Compensation for membership of the BoD: EUR80,000 (50% in cash; 50% in shares to be held until en
Slide 11: Committed to engage with shareholders
/ Committed to engage with shareholders / Average quorum at AGM’s >60% high given 100% free float (46% of free float for Ibex35) / Full implementation of Spanish Governance Code, with the exception of separation of Remuneration and Nomination Committee, for agility reasons / Yearly outreach campaign
Slide 12: Approval of a 2017–19 ESG Master Plan
• 3 m Kg donated to Food Banks Committed to our • 1,5 m Kg “Food Waste” Project environment & our communities • Carbon & Energy Efficiency • 134,000,000 Kwh saved • 45% CO2 reduction in refrigeration Index Best Newcomer Award APPROVAL OF A 2017–19 ESG MASTER PLAN
Slide 13: Customer, digital and online transformation
Capital reallocated to Consistent Customer, digital and key markets while achievement of online transformation adding relevant financial targets with capabilities (fresh, HPC industry leading products…) returns
Slide 14: Capital Markets Day
rd CAPITAL MARKETS DAY 2017 LONDON
Slide 15: Ricardo Currás
Ricardo Currás Chief Executive Officer, CEO
Slide 16: A story of consistent profitable growth
1 3 . 2 % /1 5 .7% R 10,314 CAG 7,810 2011 2016 GROSS SALES UNDER BANNER FOOTPRINT + A STORY OF CAPABILITIES CONSISTENT .9% /1 0 . 5 % 1 PROFITABLE CAG R 5 628 GROWTH 471 2011 2016 Notes Excluding China, France and Turkey ADJUSTED EBITDA 1. Ex-currency
Slide 17: A story of consistent profitable growth: proximity, price, footprint
PROXIMITY More than 7,000 stores in Iberia, Brazil and Argentina PRICE Best-in-class price image DIA A STORY OF FOOTPRINT CONSISTENT FLEXIBILITY PROFITABLE Lowest-cost operator GROWTH FOCUS Food and HPC
Slide 18: A story of consistent profitable growth: capabilities
FRANCHISE More than 3,600 stores PRIVATE LABEL High share of total sales in every market DIA A STORY OF CAPABILITIES LEAN SUPPLY CHAIN CONSISTENT PROFITABLE GROWTH LOYALTY PROGRAM High customer penetration
Slide 19: Growth markets: Brazil & Argentina
(1) 8 . 4 % /2 A STORY OF CAG R 9 .6% 3,499 CONSISTENT 2,210 PROFITABLE GROWTH 2011 2016 GROSS SALES UNDER BANNER / LATAM (1) GROWTH MARKETS G R 1 6 . 0 % /3 6 . 2 % Brazil & Argentina C A • Young and growing population • 50% of the market non-organized • DIA: a distinctive commercial model 2011 201
Slide 20: Changes are accelerating
CHANGES ARE ACCELERATING CUSTOMERS INFORMATION TECHNOLOGY Diversity Inmediate Mobile
Slide 21: Markets are getting tougher
MARKETS ARE GETTING TOUGHER AGEING FOOD AS A NEW POWERFUL POPULATION COMMODITY COMPETITORS No growth No inflation Big on-line “pure players”
Slide 22: DIA is flexible and adaptable
DIA IS FLEXIBLE DIA becoming 100% customer-centric AND ADAPTABLE The new Push digital transformation to: environment is • Build customer centricity • Improve productivity an opportunity • Develop new channels to sell and communicate with customers
Slide 23: Digital challenge: turning threats into opportunities
DIGITAL CHALLENGE: TURNING THREATS INTO OPPORTUNITIES Challenge Opportunity • E-commerce exponential • DIA might not beat the big pure growth in food retail players but will be best in class • No economic model for within incumbents e-commerce • DIA is the closest to customers • Aggresive and powerf
Slide 24: Samuel Johnson quote on travelling
“ The use of travelling is to regulate imagination by reality and instead of thinking how things may be, to see them as they are ” Samuel Johnson
Slide 25: DIA invites you to join us on this journey
DIA INVITES YOU TO JOIN US ON THIS JOURNEY, HOW WE WORK TO BECOME CLOSER TO OUR CUSTOMERS AND MORE RELEVANT TO THEM EVERY DAY
Slide 26: Capital Markets Day
rd CAPITAL MARKETS DAY 2017 LONDON
Slide 27: Miguel Guinea
Miguel Guinea Country Manager DIA Portugal
Slide 28: We propose you a company journey
WE PROPOSE YOU A COMPANY JOURNEY
Slide 29: Through the customer experience
WE PROPOSE THROUGH THE YOU A CUSTOMER COMPANY EXPERIENCE JOURNEY
Slide 30: Challenge
CHALLENGE
Slide 31: Information systems
INFORMATION SYSTEMS
Slide 32: Make the client a promoter
MAKE THE CLIENT A PROMOTER
Slide 33: The franchise as a winning formula
THE FRANCHISE AS A WINNING FORMULA
Slide 34: Capital Markets Day
rd CAPITAL MARKETS DAY 2017 LONDON
Slide 35: Jürgen Dietz
Jürgen Dietz Regional Director
Slide 36: Supermarket acquisitions 2015-2017
SUPERMARKET ACQUISITIONS 2015-2017 a 2014 2015 +451 +144 Stores Stores
Slide 37: Main benefits of the supermarket acquisitions
A new shopping experience MAIN BENEFITS with more services for our OF THE customers: SUPERMARKET ACQUISITIONS • Larger assortment • Convenience products and services • Fresh categories with specialised staff counters: • Fish • Meat • Cold-cuts • Deli
Slide 38: More services
BAKERY FRESH CONVENIENCE MORE SERVICES…. CORNER COUNTERS SECTIONS
Slide 39: More emphasis on high-quality private label
MORE EMPHASIS ON HIGH-QUALITY PRIVATE LABEL
Slide 40: New store format in Portugal
NEW STORE Greater visibility of assortment and FORMAT IN shopping experience PORTUGAL materially improved Minipreço family
Slide 41: New store format in Portugal
NEW STORE Store entrance Areas with higher traffic with better visibility have shorter shelving FORMAT IN and more light PORTUGAL • Easier to see contiguous aisles New sections and services Minipreço family perceived at a first glance • Easier circulation with shorter aisles • “Hot spots” all across
Slide 42: New store format in Portugal
NEW STORE FORMAT IN PORTUGAL Minipreço family
Slide 43: New store format in Portugal
NEW STORE FORMAT IN PORTUGAL Minipreço family Coffee shop Hot spot Take Away Cold cuts Fruit & Vegetables Wine Meat counter Perfumery Promotional Area Frozen fish
Slide 44: 2017: New DIA Market stores in Spain
2017: NEW DIA MARKET STORES IN SPAIN Upgrading of existing DIA Market stores into the new DIA Market IV version
Slide 45: New DIA Market: interior design
NEW DIA MARKET: INTERIOR DESIGN Easier organization & better visibility
Slide 46: New customer surveys implemented
NEW CUSTOMER SURVEYS Net Promoter Score DIA Spain IMPLEMENTED IN 2016 NPS Out of Stock effects Graph that shows % of no satisfied customers who have not found the product 40.14% 59.86% YES NOT NPS customers who have found everything Source Qualtrics Period: From 8/05 to 13/06 Trigger and pain point
Slide 47: Out-of-stock and on-shelf availability ratios
1.What products OUT-OF-STOCK cannot be found AND ON-SHELF by our customers? AVAILABILITY ? RATIOS 2.What products ? ? are not in a condition ? to be sold? ? ? 3.What products are located where customers do not expect to find them?
Slide 48: Improving out-of-stock ratios
IMPROVING OUT-OF-STOCK RATIOS 2015 2016 2017 -24% -7.5%
Slide 49: Improvement of on-shelf availability
IMPROVEMENT OF ON-SHELF AVAILABILITY SUPPLIER (OSA) On-Shelf DIA LOGISTICS Availability PLATFORM The higher the OSA, the higher the sales STORE
Slide 50: OSA (on-shelf availability)
OSA (ON-SHELF Main reason for OSS As a potential solution, some (In-Store Stock-Out): departments devoted resources AVAILABILITY) to new projects such as: • Stock quality • Double E Project • In-store warehouse: merchandise not well • Optimize tasks in store deposit allocated and managed in the stor
Slide 51: Double E Project
DOUBLE E PROJECT: Non-value adding tasks EASY AND Manage excess stocks / Stock reserve EFFICIENT PUSH PULL Mentality: Mentality: Logistics Satisfying Operation customers´ Demands Pay attention to our customers´ demands
Slide 52: What does digital mean in our store operations?
WHAT DOES WITHOUT WITH DIGITAL MEAN DIGITAL: DIGITAL: IN OUR STORE What happened? What is happening? OPERATIONS?
Slide 53: DIA store app
DIA STORE APP Financial valuation
Slide 54: Our goals
OUR GOALS NEW REDUCE NEW SERVICES: INEFFICIENCY: TOOLS: Increase Easier Store Push Digital customer Organisation transformation satisfaction in Store
Slide 55: Capital Markets Day
rd CAPITAL MARKETS DAY 2017 LONDON
Slide 56: Eric Marot
Eric Marot Logistics & Supply Director
Slide 57: Customer experience: the view from the rear of the store
Customer experience: the view from the rear of the store
Slide 58: DIA Group logistics evolution
• Availability of our products was related to the The way cost it used PUSH • Reduced number of SKUs (of high rotation to be SYSTEM and low rotation) < 3,000 SKUs DIA GROUP • Service was concentrated on mass-market products (very limited range of perishables LOGISTICS with short expiration dates) EV
Slide 59: Adapting logistics to the new requirements of the market
• New concept of total proximity commerce: The new • Higher speed of service demands of • 100% availability: our schedule has been the market… ADAPTING defined by the customers LOGISTICS TO • Zero mistakes in deliveries THE NEW REQUIREMENTS OF THE MARKET … imply • Cost Sustainability (good balance b
Slide 60: The importance of logistics
DIA has integrated the service to all formats into the same logistics network • Adaptability of the service to the needs of our clients THE • Rapid response to demand IMPORTANCE • Global vision of the entire supply chain process: supplier – final client OF LOGISTICS • We take advantage of the servic
Slide 61: Implications of Double E project for logistics
FOCUSED ON CLIENT STORE NEEDS IMPLICATIONS EASY & EFFICIENT LOGISTICS OF DOUBLE E The cost of the order PROJECT FOR LOGISTICS The quality of the order CUSTOMER SATISFACTION
Slide 62: The rear of the store: efficiency through productivity
THE REAR OF THE STORE… EFFICIENCY THROUGH PRODUCTIVITY Production profit sharing system Big data analysis Dynamic stores system All these projects reduce our supply chain costs by 5%
Slide 63: The rear of the store: quality through processes
THE REAR OF THE STORE… ATTAINING QUALITY BY IMPROVING OUR PROCESSES Scanning tunnel Security combis Put to Light Significant reduction in picking errors Put to Light Scanning tunnel Double-checking process in the preparation of high value/low rotation products Security format of our combis Eliminati
Slide 64: New Helios combi
THE REAR OF THE STORE… NEW “HELIOS” COMBI • Faster download and store replenishment a • Improved security and reducing damage to product • Optimized volume of capacity • Easier reverse logistics • Proprietary development • Payback < 2 years
Slide 65: Transportation of goods
THE REAR OF Renovation of Mega truck first THE STORE… truck fleet movers: Reduction in the number of trips due to the increased TRANSPORTATION capacity (50%) OF GOODS • Reduction of carbon emissions • Length: 25,25 m • Reduction of noise during • Weight: 60 Tonnes delivery • Transport costs reduced
Slide 66: Real-time logistics
REAL-TIME LOGISTICS • Anticipates possible operating problems • It optimizes and designates the employees and equipment needed
Slide 67: Store management DIA app
YOUR ORDER HAS BEEN DISPATCHED AND IS EXPECTED TO BE DELIVERED STORE TODAY AT 11:45 MANAGEMENT DIA APP • Your order has been prepared (yesterday at 13:45) • Your order has been dispatched (today at 8:00) • In delivery process • In store (expected arrival today at 11:45)
Slide 68: Digitalisation of orders to suppliers
THE REAR OF THE STORE… DIGITALIZATION OF THE ORDERS (TO OUR SUPPLIERS) DIGITALISATION PROCESS • Algorithm machine learning: our supply system “learns about its own mistakes” which will lead to a continuous improvement purchase system • Quick and easy communication among all our supply chain favoring
Slide 69: Measuring NPS of the logistic services
NPS Clients • An online customer survey MEASURING NPS OF THE Stores & • Annual satisfaction survey to our LOGISTIC Supermarkets franchised and owned stores SERVICES • Quality of the order: zero mistakes Key topics • Format of service of logistics • Time to download the merchandise satisfaction • Spe
Slide 70: Our goal: customer satisfaction
EXCEL DELIVERY Caring about SERVICE products EMPLOYEE- Better ergonomics FRIENDLY OUR GOAL: CUSTOMER ACCURATE Zero mistakes SATISFACTION EFFICIENT & •Minimum cost ENVIRONMENTALLY •Lower emissions FRIENDLY JUST-IN-TIME Quick response to the market
Slide 71: Capital Markets Day
rd CAPITAL MARKETS DAY 2017 LONDON
Slide 72: Raquel Beneitez
Raquel Beneitez Corporate Development Director
Slide 73: Efficiency through process simplification and supply cost reduction
Efficiency through process simplification and supply cost reduction Flexibility in asset renegotiation Strategic commercial alliances
Slide 74: Efficiency through process simplification and supply cost reduction
Efficiency through process simplification and supply cost reduction Flexibility in asset renegotiation Strategic commercial alliances
Slide 75: Low-Cost Operator
Efficiency LCO through Low-Cost Operator processes simplification and supply cost Flexibility & efficiency: reduction Two key elements of DIA organization • We strive to do things right • With the best possible performance • And with the minimum use of resources
Slide 76: In our logistics
In our logistics Efficiency through processes simplification and supply cost reduction • Factory gate pricing models EXAMPLES: • Shared routes • Cross docking
Slide 77: In our warehouses
In our warehouses… Efficiency through processes simplification and supply cost reduction Preparation productivity
Slide 78: In our stores
In our stores… Efficiency through processes simplification and supply cost reduction
Slide 79: Efficiency through process simplification and supply cost reduction
Efficiency through process simplification and supply cost reduction Flexibility in asset renegotiation Strategic commercial alliances
Slide 80: Flexibility in assets renegotiation
Flexibility in ~ _ 15% 1/4 EUR8.5m assets of our rental savings in renegotiation contracts are Spain in average rent renegotiated reduction* 2016 each year Notes 1. In renegotiated contract
Slide 81: Efficiency through process simplification and supply cost reduction
Efficiency through process simplification and supply cost reduction Flexibility in asset renegotiation Strategic commercial alliances
Slide 82: Strategic commercial alliances
INTERNATIONAL Strategic commercial alliances NATIONAL
Slide 83: Strategic commercial alliances
INTERNATIONAL + Strategic commercial alliances NATIONAL Signed in November 2015
Slide 84: Growth sales levers and data sharing
International Negotiation is based on three areas Strategic commercial 3 alliances 2 “Strategic” alignment 1 Data sharing Growth sales levers
Slide 85: Before 2016, our international dimension was far behind
Before 2016, our international dimension was far behind that of other international groups Strategic commercial alliances DIA CASINO AGECORE CARREFOUR COOPERNIC EURAUCHAN
Slide 86: Continuing to improve international conditions was becoming difficult
Continuing to improve our international conditions was becoming difficult Strategic commercial AFTER BEFORE “SPIN OFF“ alliances “SPIN OFF“ 2011 2015
Slide 87: Thanks to the ICDC project, we achieved acceptable dimension
Thanks to the "ICDC" Project, we achieved an acceptable relative dimension Strategic commercial alliances ICDC AGECORE CARREFOUR COOPERNIC EURAUCHAN (DIA + CASINO)
Slide 88: From 2016, significant improvements in international trading conditions
From 2016, we again saw significant improvements in our international trading conditions Strategic commercial ICDC alliances PROJECT AFTER BEFORE “SPIN OFF“ “SPIN OFF“ 2011 2015 2017
Slide 89: Jointly negotiated private label brands
In addition, since 2016, we have jointly negotiated our private label brands •Binomial negotiation with Strategic Casino Group commercial •Coordination within "ICDC“ alliances •Good results in negotiations
Slide 90: Strategic commercial alliances
INTERNATIONAL Strategic commercial + alliances NATIONAL
Slide 91: In 2015, market share situation was not in our favor
In 2015, the market share situation was not really in our favor Strategic Extremely commercial large “GAP“ alliances #1 #2 #3 #4 DIA #6 #7 Source: Nielsen, 2015
Slide 92: With the CINDIA project, the balance shifted
With the CINDIA project, the balance versus competitors shifted drastically Strategic commercial alliances #1 #2 CINDIA #4 #5 #6 (DIA + INTERMARCHÉ) Source: Nielsen, 2015
Slide 93: Annual improvement for DIA Portugal
Before 2015, the market was a highly promotional one, where only two operators benefitted from supplier investments Annual improvement for DIA Portugal (National Brand) Strategic commercial alliances 3x 2.5x x BEFORE 2015 2016 2015
Slide 94: In 2017 we extended the perimeter of the agreement
In 2017 we have extended the perimeter of the agreement Strategic commercial •75 suppliers of National Brands alliances •Joint negotiation of private label brand •Purchase of assets and supplies
Slide 95: Strategic commercial alliances
INTERNATIONAL Strategic commercial + alliances • National brands NATIONAL • Private Label • Purchase of Assets and Supplies
Slide 96: Spanish market did not have a clear number 2 player
The Spanish market did not have a clear number 2 player Strategic commercial alliances #1 DIA #3 #4 #5 #6 #7 Source: Kantar, dic. 2015
Slide 97: With the Eroski agreement, DIA became number 2
With the Eroski agreement, DIA became the indisputable number 2 player in the market Strategic commercial alliances #1 DIA #3 #4 #5 #6 EROSKI Fuente: Kantar, dic. 2015
Slide 98: National Brands negotiation targets reached
In the negotiation of the National Brands we have reached the targets Annual Improvements in National Brands Strategic commercial alliances 2.5x x BEFORE 2016 2016
Slide 99: Additional projects with the Eroski Group
In addition, we developed two additional projects with the Eroski Group: “Private • Potential EUR3bn negotiation volume Strategic commercial Label Brand” • # 2 Indisputed Private Label volume in Spain alliances • In operation since May 2017, most key synergies already identified "Assets and • Potent
Slide 100: Financial efficiency to offer the best market prices
• Reducing all our Financial efficiency… costs on a permanent basis …to offer our customers • Improving our purchasing terms the best market prices through strategic commercial alliances
Slide 101: Capital Markets Day
rd CAPITAL MARKETS DAY 2017 LONDON
Slide 102: Capital Markets Day
rd CAPITAL MARKETS DAY 2017 LONDON
Slide 103: Jose Antonio Lombardía
Jose Antonio Lombardía Chief Marketing Officer, CMO
Slide 104: DIA Community: the voice of the customer
DIA COMMUNITY THE VOICE OF THE CUSTOMER
Slide 105: Where is the Customer in DIA?
The project was born after a cultural change in traditional efficient and productive DIA approach Where is the Customer in DIA? Cost savings + Productivity CLIENT
Slide 106: DIA Community
DIA COMMUNITY
Slide 107: What is Super Expert@s?
An online community that links DIA directly with the What is Super customer in order to ask, listen and co create to enrich Expert@s? our processes and decisions with the voice of the customer. Its main objective is to serve as the voice of the customer in key company decisions • 1,000 members, buye
Slide 108: How does it work?
How does it • Access to the community is open to any department in the company that needs to check customer opinion about any issue work? • Consumption and purchase habits. Needs, barriers • Pre-test and post test of product launches advertising campaigns • Ideas for innovation • Design preferences,
Slide 109: Main projects tested
Main projects •DIA and Delicious hero product tested identification •Private label deep study •DIA App vs Competitors •Delicious advertising campaign •Fruit & Veg
Slide 110: Customer: the voice of the customer
THE VOICE OF THE CUSTOMER
Slide 111: Retail is no longer only about price
Retail is no longer only about price
Slide 112: Price is still the number one reason for purchase
Price is still the number one reason for making a purchase, but it now works alongside a better shopping experience
Slide 113: Customers need to feel at the centre
Customers need to feel that they PRICE All wrapped up are at the centre in a pleasant ASSORTMENT of the retailer´s shopping strategy, delivering experience OMNICHANNEL what really matters to them
Slide 114: Strong empirical evidence that advocacy leaders
SALES GROWTH LOYALTY LEADER >2x CAGR Strong empirical AVERAGE evidence that YEARS advocacy leaders COST enjoy superior 15% Lower cost economics LOYALTY AVERAGE LEADER Source Bain & Company
Slide 115: Why is the shopping experience so important?
SOME FACTS 60-70% 66% Is the probability of selling to a current customer Of consumers switch Why is the to competitors due to poor customer While the chance of selling to a new customer shopping service The importance of is just experience so a good 5-20% important? shopping 86% 81% experience Of c
Slide 116: How are we going to manage customer experience at DIA?
How are we DATA 02 ANALYSIS AND going to COLLECTION DISTRIBUTION RIGHT INFORMATION manage 01 THE customer VOICE OF THE CUSTOMER RIGHT TIME experience 03 RIGHT PERSON at DIA? MONITORING ACTIONS PLANS 04
Slide 117: We implement action plans to improve experience
At DIA we do not just measure customer experience, we implement action plans to improve it day by day store by store
Slide 118: The starting point was asking customers and employees
Feedback was collected from more than 1,500 DIA employees... The starting and we held more than point was asking 6,000 meetings with customers to know their customers and opinion about DIA. employees This research process helped us to confirm our strengths... …and identify the areas to improve and d
Slide 119: Mapping customer journey, touch points and pain points
Mapping customer journey, touch points and identifying pain points was the following step
Slide 120: From customer journey to action plans
CUSTOMER JOURNEY PAIN POINTS From customer 67 Pain points 10 Pain points selected journey to QUICK-WINS SELECTIONS ENFORCING NEW INITIATIVES the definition of action plans 55>15 Initiatives finally chosen 15 Actions reports
Slide 121: Full implementation expected before 2017 year-end
The Voice of the Customer project has been launched Full successfully in Spain already at DIA, e-Commerce and implementation La Plaza stores and will be followed by Clarel. Argentina, Brazil and Portugal are already working with expected before the same structure to implement the system soon. 2017 y
Slide 122: Qualtrics measurement in real time
•Qualtrics measurement •Real time, one by one in each of the DIA stores •Direct involvement of store supervisors •Customer experience information flow in real time across all the organization
Slide 123: Customer experience
Customer OOS Reduction • Easy & Efficient Project experience • 3 days of stock guaranteed • Reduced assortment in new Maxi4 and Mkt4 • New promotional areas in the stores Fresh Products • Bakery assortment review • Upgraded baking protocols • Better fruit & Vegetables presentation in store • F&V as
Slide 124: Capital Markets Day
rd CAPITAL MARKETS DAY 2017 LONDON
Slide 125: Juan Pedro Agustín
Juan Pedro Agustín Head of Digital
Slide 126: A revolution doesn't happen when society adopts new tools
“A REVOLUTION DOESN’T HAPPEN WHEN SOCIETY ADOPTS NEW TOOLS. IT HAPPENS WHEN SOCIETY ADOPTS NEW BEHAVIORS” Clay Shirky Author, Consultant, Professor at NYU
Slide 127: More than 8 million DIA Club users in Spain
> 8 MILLION DIA CLUB USERS IN SPAIN
Slide 128: Blog: brand content
BLOG BRAND CONTENT
Slide 129: Digital users and business partners
The new way of working implies the management of ecosystems of DIGITAL USERS relationships with DIA Digital collaborators in customer management BUSINESS PARTNERS WEB CRM platform Development and web hosting E-COMMERCE DIGITAL MARKETING Implementation of the Web Platform and Web content about web an
Slide 130: www.dia.es
WWW.DIA.ES > 90,000 CUSTOMERS BASKET AVERAGE 5X ONLINE 3-HOUR LEAD TIME
Slide 131: Online expansion map
OVIEDO / GIJÓN BILBAO EXPANSION SANTANDER SAN SEBASTIÁN MARCH 2017 BURGOS PAMPLONA VIGO VITORIA VALLADOLID ZARAGOZA BARCELONA AROUND SEGOVIA 60% OF GUADALAJARA CASTELLÓN MADRID SPANISH CÁCERES MÉRIDA VALENCIA POPULATION BADAJOZ ALREADY ALBACETE PALMA DE MALLORCA COVERED. CÓRDOBA MURCIA ALICANTE SEVI
Slide 132: www.clarel.es
WWW.CLAREL.ES DARK STORE NEXT TO D.C. BASKET AVERAGE 4X OFFLINE 60% MOBILE TRAFFIC
Slide 133: The digital world allows companies to contact clients
THE DIGITAL WORLD ALLOWS COMPANIES TO CONTACT CLIENTS WITHOUT TIME OR SPACE LIMITATIONS
Slide 134: Oportunidades.dia.es
OPORTUNIDADES. DIA.ES > 135,000 CUSTOMERS > 5,000 SKUs
Slide 135: Can DIA become a genuine non-food retailer?
CAN DIA BECOME A >10,000 GENUINE NON-FOOD >2,000 RETAILER? >22,000 >5,000 >2,000
Slide 136: Technology is the answer but what was the question?
“TECHNOLOGY IS THE ANSWER BUT… WHAT WAS THE QUESTION?" Cedric Price 1965
Slide 137: Think big, start small
THINK BIG, START SMALL om. amazon cloud drive wee) bimeul by zendesk acua’ Intelligence DiA
Slide 138: Digital client
clarel® Increased Maturity Report Automation Dashboards
Slide 139: Age range
AGE RANGE 40% 35% “THE DIA 30% 25% DIGITAL CLIENT 20% IS MUCH 15% 10% YOUNGER” 5% 0% <30 30 40 50 60 >70 DIA STORES CLIENTS DIA.ES CLIENTS DIA APP CLIENTS
Slide 140: Our DIA fans also like these other brands
OUR DIA FANS ALSO LIKE THESE OTHER BRANDS…
Slide 141: E-mail marketing platform
if by hs. | ‘81 un producto no es una oportunidad no fe tenemos, Oportunidades Dia 15% DTO en la seccién Descanso Usa el cédigo: descansojunio E-MAIL MARKETING PLATFORM QUINGENA iPRRCIALAS! iEMPIEZA LA QUINCENA DE LOS PRECIAZOS! DiA
Slide 142: Increasing the value per customer
2.5 x 2.25 x INCREASING THE VALUE PER CUSTOMER AS x WE LAUNCH NEW DIGITAL PLATFORMS STORE DIA ONLINE OPORTUNIDADES DIA
Slide 143: Now is the time to step up to omni channel
NOW IS THE TIME BY SHARING AND WHEN WE FEEL CROSSING INFORMATION CONFIDENT TO FROM ALL CHANNELS… STEP UP TO THE OMNI CHANNEL WE CAN UNDERSTAND AND CHALLENGE. ANTICIPATE THE BEHAVIOUR OF ALL OUR CUSTOMERS… … AND ADAPT MARKETING BY CHANNEL.
Slide 144: Heading towards omni channel
HEADING TOWARDS OMNI CHANNEL
Slide 145: Catalogue sales: off/on line cross selling
CATALOGUE SALES: OFF/ON LINE CROSS SELLING IN OPORTUNIDADES. DIA
Slide 146: DIA customer app
DIA CUSTOMER App
Slide 147: Capital Markets Day
rd CAPITAL MARKETS DAY 2017 LONDON
Slide 148: Leo Tolosa
Leo Tolosa Customer APP Director
Slide 149: Unstoppable app phenomenon
APP PHENOMENON UNSTOPPABLE
Slide 150: App phenomenon: main digital transformation driver
APP PHENOMENON: MAIN DIGITAL TRANSFORMATION DRIVER
Slide 151: The use of apps in the world
THE USE OF APPS IN THE / 3 billion smartphones today, WORLD 6 BILLION EXPECTED FOR 2020 (1) / 89% of smartphone time is spent using apps (1) (1) App Annie Retrospective 2016
Slide 152: The use of apps in the world
THE USE OF APPS IN THE / 6 out of 10 mobile customers WORLD buy: travel, leisure and fashion (2) / Food will be next in mobile shopping. / Users who buy through mcommerce in apps, generate 120% more business (3) (2) 6th AppDate Telefonica (3) Criteo Q415 State of Mobile
Slide 153: Only 20% of apps are used more than once
ONLY 20% OF APPS ARE USED MORE THAN ONCE 95% ARE NO LONGER USED AFTER 1 MONTH (4) Flurry Analytics
Slide 154: App DIA: as close as the proximity client
APP DIA: AS CLOSE AS THE PROXIMITY CLIENT
Slide 155: Customer benefits & DIA benefits
CUSTOMER DIA CUSTOMER Savings More Business BENEFITS & Personalization Intelligence DIA Communication BENEFITS Control Channel Information Visit Frequency Communication Promotion Redemption.
Slide 156: How we listen
QUALTRICS CUSTOMER HOW WE Quantitative expectations, SERVICE LISTEN motivations and brakes of the app Problems and Doubts DIA SOCIAL COMMUNITY NETWORKS What excites us Qualitative about our app Experiences EMPLOYEES MARKETS Daily Customer Advanced users Feedback talking about D & F's app
Slide 157: How we listen
QUALTRICS CUSTOMER HOW WE Quantitative expectations, SERVICE LISTEN motivations and brakes of the app Problems and Doubts DIA SOCIAL COMMUNITY NETWORKS What excites us Qualitative about our app Experiences EMPLOYEES MARKETS Daily Customer Advanced users Feedback talking about D & F's app
Slide 158: The DIA app
/ DIA Club loyalty card THE / Selection and consultation of coupons DIA / Shopping thermometer / Ticket APP / Shop brochures / Store finder / Shopping lists / Link to online shopping
Slide 159: Digital coupon users
> 1,000,000 Downloads > 600,000 (1) Associated Cards > 400,000 (2) Digital Coupon users (1) Google Play + App Store (2) Internal Analytics
Slide 160: Heat map - app use
ecommerce HEAT MAP - e-coupon APP USE brochure savings card 68% 3% 1,5% 1,5% 2,5% Google Analytics
Slide 161: Heat map - user profile
HEAT MAP - USER PROFILE 60% 40% 16-34 years 35 & more Google Analytics
Slide 162: Customer testimonials on the app
“I love to have my coupons always at hand in the app” “No more forgetting my card” “It is great to control purchases and savings” “I like to know the offers near me”
Slide 163: Customer assessment
CUSTOMER ASSESSMENT GET IT ON | » Google Play | # Download on the § App Store
Slide 164: How they value us
HOW TOTAL THEY VALUE US 80% 50% Oct-16 Apr-17 Source: Markets
Slide 165: Milestones 2017
MILESTONES 2017 •Business intelligence •Omnichannel •Innovation
Slide 166: The customer at the center of our digital transformation
THE CUSTOMER AT THE CENTER OF OUR DIGITAL TRANSFORMATION
Slide 167: Capital Markets Day
rd CAPITAL MARKETS DAY 2017 LONDON
Slide 168: Ricardo Currás
Ricardo Currás Chief Executive Officer, CEO
Slide 169: Conclusion: we are at a turning point
CONCLUSION RETAIL CUSTOMERS MARKETS TECHNOLOGY WE ARE AT A TURNING POINT “EXPONENTIAL” CHANGES
Slide 170: The digital challenge is an opportunity for DIA
• TO BECOME 100% CUSTOMER-CENTRIC THE DIGITAL CHALLENGE • TO IMPROVE EFFICIENCY IS AN • TO OPEN NEW PROFITABLE CHANNELS TO OPPORTUNITY SELL TO, AND COMMUNICATE WITH, FOR DIA CUSTOMERS WE ARE WORKING HARD AND FAST IT IS OUR PRIORITY
Slide 171: DIA is in good shape
• PROFITABLE GROWTH TRACK RECORD • STRONG FOOTPRINT AND CAPABILITIES DIA IS IN • FOCUS ON FOOD AND HPC: DIA HAS GOOD SHAPE CAPTURED KEY KNOW-HOW FROM RECENT ACQUISITIONS • FLEXIBILITY AND ADAPTABILITY
Slide 172: DIA is working for the long-term
• A DISCIPLINED AND CONTINUED INVESTMENT IN BETTER STORES WITH BETTER OFFER • A NEW CUSTOMER-CENTRIC ORGANIZATION DIA IS WORKING • A REMUNERATION POLICY INCLUDING FOR THE CUSTOMER SATISFACTION AS A KEY LONG-TERM… INDICATOR • NEW CHANNELS AND SERVICES TO MEET CUSTOMERS´ NEEDS • MORE EFFICIENCY • FAST
Slide 173: N@><US |bia
N@><US |bia powering ideas
Slide 174: And delivering in the short-term
• PROFITABLE GROWTH • CASH GENERATION …AND DELIVERING • FRANCHISEE AND EMPLOYEE ENGAGEMENT AS THE BEST DRIVER OF CUSTOMER IN THE SATISFACTION SHORT-TERM • MORE EFFICIENCY SIMPLIFYING SUPPLY CHAIN OPERATIONS OR CREATING NEW PROCUREMENT PLATFORMS
Slide 175: The new customer
THE NEW THE NEW THE NEW CUSTOMER CUSTOMER CUSTOMER LOVES LOVES IS DIVERSE CONVENIENCE GOOD PRICES AND DIA IS BEST-IN-CLASS AND DIA IS BEST-IN-CLASS AND DIA IS DEPLOYING A IN CONVENIENCE IN PRICE CONVENIENT MULTIFORMAT, MULTICHANNEL STRATEGY TO BETTER MEET CUSTOMER NEEDS
Slide 176: Capital Markets Day
rd CAPITAL MARKETS DAY 2017 LONDON
Slide 177: Capital Markets Day
rd CAPITAL MARKETS DAY 2017 LONDON
Slide 178: Amando Sánchez
Amando Sánchez Chief Corporate Officer (CCO)
Slide 179: Driving strong and sustainable value creation since listing
# of stores Gross Sales Under Banner DRIVING STRONG 2% )1 3. AND SUSTAINABLE G R 11. 2 % CAG R 5 .7 % ( 1 C A 7,420 10.550 10,314 VALUE CREATION 7.420 7,810 7.568 SINCE LISTING 4,355 4.355 Emerging Markets weight in Gross Sales Under Banner 2011 2016 2011 2016 Growing, profitable and geographically
Slide 180: DIA's financial framework review
DIA’S FINANCIAL FRAMEWORK 1 2 3 4 5 REVIEW Cost efficiency Smart and Strong track Tangible Flexible and focus to active record of organic and efficient sustainably investment value inorganic capital support approach creation growth structure continued through opportunities improvement corporate incl
Slide 181: Cost efficiency focus to sustainably support improvement
Efficiency focus has allowed to reduce costs over sales… COST EFFICIENCY REAL ESTATE FOCUS TO GROUP -100 bps 1 SUSTAINABLY IBERIA -190 bps1 EM -110 bps1 SUPPORT LABOUR COST CONTINUED EFFICIENCY IMPROVEMENT 2011 2016 2011 2016 OF CUSTOMER PROPOSITION PURCHASING …while enhancing customer proposition i
Slide 182: Cost efficiency: leases and labour cost
COST EFFICIENCY ‣ 90% Leasehold FOCUS TO ‣ Significant lessor atomisation SUSTAINABLY LEASES ‣ Contract flexibility: < 1 year commitment on average1 7.0% 2 SUPPORT CONTINUED ‣ +2,650 openings and +1,300 closures cumulated since 2011 IMPROVEMENT OF CUSTOMER PROPOSITION ‣ Focus on employee productivit
Slide 183: Cost efficiency: purchasing synergies and energy
‣ Further development of COST EFFICIENCY recently signed sourcing agreements: FOCUS TO • ICDC (Casino) 50 bps • CINDIA (Intermarché) PURCHASING 1 SUSTAINABLY SYNERGIES • Eroski SUPPORT ‣ Private label agreements: • Red Libra (Eroski) CONTINUED IMPROVEMENT OF CUSTOMER PROPOSITION ‣ First food retaile
Slide 184: Smart and active investment approach: capex
CAPEX AS % OF NET SALES SMART AND ACTIVE INVESTMENT 5.9 6.3 APPROACH 4.4 1.52 2.22 3.9 3.5-4.01 3.6 3.3 0.72 2.9 Disciplined but 3.71 4.41 4.11 constant capex spending… Industry 2011 2012 2013 2014 2015 2016 2017-20 average 3 Capex to revert to Smaller surface per store, constant 3.5% - 4.0% after a
Slide 185: Smart and active investment approach: ROI
RETURN ON INVESTMENT (ROI) (%)1 SMART AND ACTIVE 21% 22% 22% 21% 3 21% 3 INVESTMENT 19% 3 APPROACH Target to remain clearly ahead of ….leading to above 12% 2 industry thanks to industry average smart investment returns and best-in-class Trade Working Capital management 2011 2012 2013 2014 2015 2016
Slide 186: Strong track record of value creation through corporate transactions
Effective capital allocation …with tangible results and further @ low multiples… uplift potential STRONG TRACK Transaction multiples Key synergies Current % of integration RECORD OF VALUE a ‣ EV of €69m 2.2x ‣ Cross-selling CREATION 1 ‣ Proximity HPC specialist ‣ Private label development 0% 100% ‣
Slide 187: Tangible organic and inorganic growth: Brazil market
MACRO CONDITIONS POSITIVE OUTLOOK FOR TANGIBLE WITH POSITIVE PROSPECTS THE BRAZILIAN FOOD RETAIL MARKET ORGANIC AND Consumer Price Index (%) Expected evolution of modern grocery retailers (USDbn) INORGANIC 11% 9% 60 1 E : 6.0% 7% 6 A -2 CAGR 1 GROWTH 5% 5% 50 3% 1% 40 OPPORTUNITIES 2013A 2015A 2017E
Slide 188: Brazil: stores by 2020
TANGIBLE Track-record Current footprint1 Our vision for expansion ORGANIC AND # stores +17% INORGANIC 1,050 480 GROWTH OPPORTUNITIES 2011 2016 Gross sales (€m) The Latam opportunity +18% +7% 1,856 Belo Horizonte 82 stores >1,500 – Brazil 1,342 Bahia 32 stores stores by 2020 Sao Paulo 800 stores Rio
Slide 189: Tangible growth: Argentina market
FAVOURABLE GROWING FOOD RETAIL MARKET TANGIBLE MACRO PROSPECTS IN ARGENTINA ORGANIC AND Consumer Price Index (%) Expected evolution of modern grocery retailers (USDbn) INORGANIC 45% 38% 30% 23% 60 CAGR 1 6 A -2 1 E : 6.4% GROWTH 15% 8% - 5% 50 40 OPPORTUNITIES 2013A 2015A 2017E 2019E 2021E 30 20 10
Slide 190: Argentina: stores by 2020
TANGIBLE Track-record Current footprint1 Our vision for expansion ORGANIC AND # stores 872 INORGANIC 495 +12% GROWTH Salta & Paraguay Jujuy OPPORTUNITIES 2011 2016 Gross sales (€m) The Latam +40% >1,100 opportunity – 1,643 stores +14% Argentina 868 2011 2016 Buenos by 2020 Aires CAGR 11-16 CAGR 11-1
Slide 191: Room for further capillarity in Iberia
Room for further capillarity in Iberia supported by recovering LFLs TANGIBLE DIA’s quarterly LFL evolution (Q-o-Q) ORGANIC AND 1.7% 1.3% 1.4% 1.4% 1.1% INORGANIC 2016-20 0.8% GROWTH (0.3%) OPPORTUNITIES +++ (0.9%) (2.4%) Q315 Q415 Q116 Q216 Q316 Q416 Apr Q117 Apr 17 17 YTD YTD Iberian Peninsula ++ S
Slide 192: Flexible and efficient capital structure: leverage
1,132 Financial leverage 1,132 878 FLEXIBLE Well-balanced 1.9x 878 AND EFFICIENT financial 1.9x 1.4x CAPITAL policy 1.4x Solid Investment STRUCTURE Grade rating with room to maintain financial 2015 2015A 2016 2016A flexibility to fund DIA committed to growth Net debt (€m) ND/EBITDA (x) maintain soli
Slide 193: Flexible and efficient capital structure: bonds
FLEXIBLE Well-balanced AND EFFICIENT financial €500m €500m July €500m July 2019 €500m July 2019 €500m 2019 July €500m July 2019 €500m 2019 July €300m July 2019 €300m April 2019 €300mApril 2021 €300m April 2021 €300m2021 April €300m April 2021 €300m April 2021 €300m April 2021 €300m April 2021 €300m
Slide 194: Maturity profile
OLD maturity profile (average maturity of 2.2yrs) FLEXIBLE Well-balanced AND EFFICIENT 225.0 financial 400.0 CAPITAL policy 75.0 500.0 STRUCTURE Recent capital 10.0 121.0 300.0 market transactions 2017 2018 2019 2020 2021 and financings Bonds Bilaterals RCF 2014 RCF 2015 present a comfortable maturi
Slide 195: Liquidity sources
FLEXIBLE Well-balanced Liquidity sources (December 2016) 1,243 AND EFFICIENT financial CAPITAL policy STRUCTURE Strong liquidity sources to fund growth 700 Prudent approach to liquidity leads to more 365 than EUR1.1bn of funds available 133 140 99 41 45 RCF Credit lines Commercial Cash and Total pap
Slide 196: Growing shareholder remuneration
Growing shareholder Annualised TSR1 Sustainable remuneration FLEXIBLE shareholder AND EFFICIENT returns CAPITAL Our efficient capital structure allows us .8% 13 12% STRUCTURE to maintain a growing dividend CA G R+ 0.21 0.20 policy, well above 0.18 the industry 0.16 average 0.13 6% 0.11 1% DIA Indust
Slide 197: Remuneration metrics aligned with long-term targets
REMUNERATION METRICS ALIGNED ANNUAL VARIABLE REMUNERATION LONG-TERM INCENTIVE PLAN (2016-2018) WITH DIA’S MINIMUM OPERATING PERFORMANCE 40% Adjusted EBIT LONG-TERM 40% CFO (Cash From Operations)1 ‣ Cumulative CFO in 2016-2018 Quantitative targets TARGETS 10% LFL sales ‣ Threshold = €700m ‣ Maximum =
Slide 198: Financial outlook on track
2017 Targets 2016 – 2018 mid-term targets FINANCIAL OUTLOOK Organic sales CAGR 2016-2018 Cash From Operations1 ‣ Mid-single-digit ON TRACK growth in gross sales under banner (in local currency) in 2017 8.6% On-track to meet our Target 2017 and mid-term ‣ Adj. EBITDA growth 2016-18 7% and margin stab
Slide 199: Capital Markets Day
rd CAPITAL MARKETS DAY 2017 LONDON
Distribuidora Internacional de Alimentación (DIA) — Investor Day (2017) on 6ix