Almacenes Exito Sa · BVC:EXITO

Almacenes Exito Sa — Grupo Éxito — Q2 2019 Earnings Presentation

67 slides from Almacenes Exito Sa's earnings presentation, 2019

  1. Slide 1: Corporate Presentation As of 2Q19

    Corporate Presentation As of 2Q19 “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”.

  2. Slide 2: Note on Forward Looking Statements

    Note on Forward Looking Statements This document contains certain forward-looking statements. This information is not historical data and should not be interpreted as guarantees of the future occurrence of such facts and data. These statements are based on data, assumptions and estimates that the Gr

  3. Slide 3: Content

    Content • Grupo Éxito Overview …………………………………………………… 5 • Strategic Pillars 2019 – 2021 ..…………………………………………. 10 • Key Facts by Country: o Colombia ………………………………………………………......... Resultados 18 o Brazil …………………………………………………………………. 2018 29 o Uruguay ……………………………………………………………... 31 o Argentina ………………………………………

  4. Slide 4: Grupo Éxito: the Omni-Channel Retail Leader in South America

    Grupo Éxito: the Omni-Channel Retail Leader in South America Grupo Éxito is one of the largest multinationals in Colombia and a relevant food retailer in South America. The Company has clear competitive advantages derived from its strength in innovation, bricks and mortar, and the value of their bra

  5. Slide 5: Company Overview

    grupo Company Overview

  6. Slide 6: Track Record of Successful Integrations

    Track Record of Successful Integrations Puntos Colombia Acquisition of Alliance with Acquisition of 70th Éxito´s Control in in alliance with Bancolombia anniversary started a new phase: Digital Acquisition of Transformation Became the biggest retailer Market share Alliance with in Colombia with gain

  7. Slide 7: Grupo Exito Overview

    Grupo Exito Overview  Leads modern retail segments: #1 in Colombia and  Consolidated Net Revenues of COP $55.03 billion in 2018 Uruguay and co-leader in Brazil  More than 140 thousand employees  Solid omni-channel strategy  More than 1.500 stores across the region  Multi-format and multi-brand

  8. Slide 8: Comprehensive Coverage of Customers and Markets

    Comprehensive Coverage of Customers and Markets Brands and formats covering all segments of the population Colombia Brazil Uruguay Argentina High End 6 5 4 3 2 1 Low End 8

  9. Slide 9: Synergies Snapshot 2015-2018

    Synergies Snapshot 2015-2018 Run rate of USD 160 M achieved in 2018, one year ahead of schedule UDS$5 M * UDS$25 M * UDS$100 M * UDS$160 M * 2015 2016 2017 2018  Grupo Éxito became the largest  Set up of the integration office and the • Introduction of the textile model in • Run rate of USD 160 M

  10. Slide 10: Strategic Pillars 2019 - 2021

    Strategic Pillars 2019 - 2021 10

  11. Slide 11: Grupo Éxito Strategic Pillars 2019 - 2021

    Grupo Éxito Strategic Pillars 2019 - 2021 Leading transformation focusing on customer and retail trends Customer first Our people 3. Digital 4. Best Practices & 5. Sustainable Shared 1. Omni-channel 2. Innovation Transformation Integration Value  E-commerce  Models  Apps  Asset Monetization  Ge

  12. Slide 12: 1. Omnichannel

    1. Omnichannel Growth leverage activities in Colombia and Brazil The Strongest platform in South America Colombia Sales +33.4% Brazil 3.4% share (+80 bps) Ecommerce  11.5% sales growth  61 M visits (vs 51M)  Launch of Adega  Acquisition of James Delivery Last Mile &  Leadership in Brazil Home D

  13. Slide 13: 2. Innovation

    2. Innovation Models, formats and products La Flora-Cali Éxito WOW Llanogrande Carulla Fresh Market Models  2 stores in 2018  6 stores in 2018  5.9% of banner´s sales  12.0% of banner’s sales  Low double-digit sales growth  Low double-digit sales growth Portfolio Optimization - Brazil Cash & C

  14. Slide 14: 3. Digital Transformation

    3. Digital Transformation Key ongoing activities to adapt to changes in consumer trends Apps Activities Frictionless Customer Service Colombia Chatbot Social Marketing Éxito and Carulla Mobile POS Self check-out Social Wi-fi Kiosks Data Analytics Brazil Predictive Meu Desconto CRM Models  7.5 M dow

  15. Slide 15: 4. Best Practices and Integration

    4. Best Practices and Integration Key ongoing activities to adapt to changes in consumer trends Asset Monetization Traffic Monetization Operational Excellence Real Estate Loyalty Programs Logistics & Supply Chain Colombia Colombia Brazil  The largest  600 K Passaí Platform Click & Dark system of p

  16. Slide 16: 5. Sustainable Shared Value

    5. Sustainable Shared Value Grupo Éxito Strategic Pillars 2019 - 2021 Gen Cero Strategy Sustainable Trade My Planet  Focus on childhood nutrition  Direct local purchasing  Contribution to protect the environment  More than 63K children under  92% of the fruits and vegetables  More than 22K ton

  17. Slide 17: Key Facts by Country

    grupo Key Facts by Country

  18. Slide 18: Colombia – Formats and Banners

    Colombia – Formats and Banners Hyper, Supermarkets & Cash & Carry stores Convenience stores  Launched in 2016  Value for Money  B2B and B2C  Customer Service  Low prices  Food and non-food  ~ 3% share on Colombia sales  ~ 70% share on Colombia sales  47.8% sales growth in 2018 252 stores 18

  19. Slide 19: Colombia – Innovation in Formats

    Colombia – Innovation in Formats Éxito WOW: the hypermarket of the future Cash & Carry: successfully addressing profesional customers 3 Stores 25 Stores  9 stores expected by year-end  7.8% of banner´s sales share  Model adapted from GPA´s Assaí banner  Strong sales growth of nearly 2x after con

  20. Slide 20: Colombia – Innovation in Formats

    Colombia – Innovation in Formats Innovative strategies as key drivers for the Company’s growth and SSS protection Contribution per model to 2Q19 sales growth Others Innovation represented 94 % of the quarterly sales growth 20 Note: Net sales expressed in billion COP. Sales from Éxito WOW and Carulla

  21. Slide 21: Colombia – Innovation in Formats

    Colombia – Innovation in Formats Exito Wow Fresh Products area Co-working Zone Pet World Digital and Gamming universe Derma-cosmetics zone Omni-channel Integration 21

  22. Slide 22: Colombia – Innovation in Formats

    Colombia – Innovation in Formats Carulla Fresh Market 22

  23. Slide 23: Colombia – Innovation in Formats

    Colombia – Innovation in Formats Carulla Fresh Market Carulla Fresh Market, le Monoprix colombien ¨Depuis un an, la filiale colombienne de Casino teste un étonnant concept de supermarché urbain très premium, Carulla FreshMarket. Les produits frais et équitables, le vrac, la restauration, le local et

  24. Slide 24: Colombia – Innovation in Formats

    Colombia – Innovation in Formats Surtimayorista Cash and Carry 24

  25. Slide 25: Colombia – Complementary Businesses

    Colombia – Complementary Businesses A solid portfolio ~ 30% of Alliances with Strengthening the of other services Colombia ROI top partners retail offering Financial Retail Insurance Travel Virtual Mobile Money Transfer  2.7 M cards issued on  1 million clients  +30% sales growth  Over 500K acti

  26. Slide 26: Colombia – Omni-channel Strategy

    Colombia – Omni-channel Strategy Reaching 4.7% of sales penetration with food e-commerce growing 56% The Strongest Platform +47% sales Sales share 4.7% +911K deliveries COP 123,000 M (+140 bps vs 2Q18) (+38% vs 2Q18) Ecommerce  25% sales growth  21 M visits Marketplace  41% GMV(1) growth  32% pe

  27. Slide 27: Colombia – Digital Transformation

    Colombia – Digital Transformation Apps as tools of customer experience personalization “My Discount” 2x 1.2 M Av. ticket vs downloads physical store +0.5 M “My Discount” clients Wine community living in the app  Targeted discounts  Event targeting  Category communities (i.e. Wine)  Travel option

  28. Slide 28: Colombia – Asset & Traffic Monetization

    Colombia – Asset & Traffic Monetization Strong contributors to margin expansion Real Estate Business Puntos Colombia Grupo Éxito Viva Malls 1 2 High potential for 2.7 M clients  Revenues grew by  18 assets data monetization with Habeas Data 48.9% in 1H19  Total GLA(1)(2) of 565k sqm  Total GLA(1

  29. Slide 29: Brazil – Formats and Banners

    Brazil – Formats and Banners Multivarejo Assaí 298 stores Hyper & Super Cash & Carry  32.0% sales share 144 stores  Extra: offers food, electronics, apparel.  46.4% sales mix  CompreBem: Supermarkets focused on low income  Focus on professional level. Compatible with regional players. and commo

  30. Slide 30: Digital Transformation – Brazil

    Digital Transformation – Brazil Apps – Personalized Customer Experience Start ups – Partnering with traditional market through digital platforms 2:05 p.m. 76% 2x Av. ticket vs physical store 30% of clients use app once/month 9.3 M downloads (+58% vs N-1) New digital B2B platform developed for “Allie

  31. Slide 31: Uruguay – Formats and Brands

    Uruguay – Formats and Brands A profitable operation driven by a differentiated value proposal 29 stores 58 stores 2 stores Supermarkets & Hypermarkets Supermarkets proximity stores Omni-channel strategy  Leaders in proximity with Devoto Express stores.  devoto.com and geant.com  Pioneering the Fr

  32. Slide 32: Argentina – Formats & Brands

    Argentina – Formats & Brands  Libertad stores present in 9 states in the country. 15 stores  First shopping center operator outside Buenos Aires with ~170K sqm of GLA. Hypermarkets  Dual retail-real estate model.  Expansion in convenience. Mini 12 stores  Roll-out of Éxito´s textile model at al

  33. Slide 33: 2019 Outlook

    2019 Outlook Colombia  Retail expansion of 18 to 20 stores (from openings, conversions and remodeling), including at least 5 Éxito WOW, 5 Carulla Fresh Market and 10 Surtimayorista stores.  Revenue growth from retail and complementary businesses (mainly related to Real Estate contribution).  Over

  34. Slide 34: Ownership, Management and Shareholder Structures

    Ownership, Management and Shareholder Structures 34

  35. Slide 35: Ownership Structure

    Ownership Structure International ownership structure consolidates best in class LATAM retail platform 55.3% 18.70% / 50% 18.70% / 50% 100% 100% 62.5%* % Economic rights % Voting rights * Grupo Éxito consolidates Grupo Disco since January 1st, 2015 35 Information as of Dec 31, 2018.

  36. Slide 36: Management Structure

    Management Structure Colombia Brazil Uruguay CEO Grupo Éxito CEO GPA General Manager Carlos Mario Giraldo Luis E. Cardoso Peter Estermann Devoto COO CFO & Corporate Guillermo Destefanis Carlos Mario Diez Services Christophe Hidalgo CFO CEO Assaí Manfred Gartz Belmiro Gomes International Argentina Bu

  37. Slide 37: Grupo Éxito Shareholders´ Structure

    Grupo Éxito Shareholders´ Structure Total shareholders as of June 30, 2019: 9,180 BVC: Éxito *No governmental Institutions own more than 5% of the total voting rights 37 ADR 144: ALAXL

  38. Slide 38: Corporate Governance

    grupo Corporate Governance

  39. Slide 39: Corporate Governance Standards

    Corporate Governance Standards Evolution from 2016 to 2019 Grupo Éxito is committed to continuously improve and advance on Corporate Governance Standards  Comprehensive review of the Corporate Governance Code and the Transparency Program in 2017 and improvements applied to 2018 and Adoption of 2019

  40. Slide 40: Appendixes

    grupo Appendixes

  41. Slide 41: Financial Results 2Q19

    grupo Financial Results 2Q19

  42. Slide 42: 2Q19 Financial & Operating Highlights

    2Q19 Financial(1) & Operating Highlights Solid contribution from innovation and omni-channel activities 2Q19 Highlights +12.3% -0.2%(2) 6.7% Net Revenue Recurring EBITDA Recurring EBITDA margin Corporate Governance Financial Highlights Operating Highlights Investment & Expansion & Sustainability  T

  43. Slide 43: 2Q19 Consolidated Financial Results

    2Q19 Consolidated Financial Results Top line boosted by innovation and digital transformation activities in COP M 2Q19 2Q18 % Var 1H19 1H18 % Var Net Revenue 14,464,569 12,880,590 12.3% 28,739,778 26,624,378 7.9% Gross Profit 3,203,710 3,354,798 (4.5%) 6,511,457 6,628,009 (1.8%) Gross M argin 22.1%

  44. Slide 44: 2Q19 Group Share Net Result

    2Q19 Group Share Net Result Tax creditss negatively affected the base and operational performance in Brazil Highlights • Positive effect mainly from the contribution of Via Varejo disposal, improved operational performance in Uruguay and lower financial and non-recurrent expenses. • Negative effect

  45. Slide 45: 2Q19 Net Debt and Cash at Holding Level

    2Q19 Net Debt and Cash at Holding(1) Level Significant reduction in gross debt led to lower interest expenditure 1,482 881 Cash (& other assets) Gross debt (financial liabilities & warranties) Net financial debt -2,912 -2,902 -3,784 -0.3% -4,394 2018 2Q 2019 2Q Main highlights NFD at the holding lev

  46. Slide 46: 2Q19 Conclusions

    2Q19 Conclusions • Innovation and omni-channel leadership in the centre of commercial dynamics. • Material regional synergies from digital transformation, format innovation and Cash & Carry dynamics, among others. • Cash & Carry brands Assaí and Surtimayorista leading the trend in Brazil and in Colo

  47. Slide 47: IFRS 16 Impacts

    IFRS 16 Impacts Consolidated figures GRUPO ÉXITO (pre and post IFRS 16) CONSOLIDACIONPre CONSOLIDACIONAdj2Q19 IFRS162Q19 CONSOLIDACIONPost CONSOLIDACIONPre CONSOLIDACIONPre IFRS162Q19 CONSOLIDACIONAdj2Q18 CONSOLIDACIONPost IFRS162Q18 CONSOLIDACIONPost IFRS16%IFRS16% Var IFRS162Q18 Var Consolidated I

  48. Slide 48: IFRS 16 Impacts

    IFRS 16 Impacts Colombia and Brazil Colombia - (pre and post IFRS 16) COLOMBIAPre COLOMBIAAdj2Q19 IFRS162Q19 COLOMBIAPost COLOMBIAPre IFRS162Q19 COLOMBIAAdj2Q18 IFRS162Q18 COLOMBIAPost IFRS162Q18 Income Statement 2Q19 Adj 2Q19 2Q18 Adj 2Q18 % Var % Var Pre Post in COP M Pre IFRS16 2Q19 Post IFRS16 P

  49. Slide 49: IFRS 16 Impacts

    IFRS 16 Impacts Uruguay and Argentina Uruguay - (pre and post IFRS 16) URUGUAYPre URUGUAYAdj2Q19 IFRS162Q19 URUGUAYPost URUGUAYPre IFRS162Q19 URUGUAYAdj2Q18 IFRS162Q18 URUGUAYPost IFRS162Q18 Income Statement 2Q19 Adj 2Q19 2Q18 Adj 2Q18 % Var % Var Pre Post in COP M Pre IFRS16 2Q19 Post IFRS16 Pre IF

  50. Slide 50: 2Q19 P&L and CapEx by Country

    2Q19 P&L and CapEx by Country Income Statement Colombia Brazil Uruguay Argentina Consol in COP M 2Q19 2Q19 2Q19 2Q19 2Q19 Net Revenue 2,776,563 10,809,580 594,648 285,080 14,464,569 Gross profit 577,867 2,329,499 202,750 94,780 3,203,710 Gross M argin 20.8% 21.6% 34.1% 33.2% 22.1% SG&A Expense (376,

  51. Slide 51: 2Q19 Consolidated Balance Sheet

    2Q19 Consolidated Balance Sheet in COP M in COP M Jun 2019 Var % Dec 2018 Jun 2019 Var % Dec 2018 Assets 48,497,324 (33.5%) 72,970,588 Liabilities 32,112,160 (41.1%) 54,508,119 Current assets 13,896,821 (63.8%) 38,408,381 Current liabilities 16,147,898 (57.3%) 37,836,893 Cash & Cash Equivalents 5,19

  52. Slide 52: 2Q19 Consolidated Cash Flow

    2Q19 Consolidated Cash Flow in COP M Jun 2019 Jun 2018 Var % Profit 635,197 655,166 -3.0% Adjustment to reconciliate Net Income 2,146,121 2,555,133 -16.0% Cash Net (used in) Operating Activities (1,767,846) (810,380) N/A Cash Net (used in) Investment Activities 887,349 (814,906) N/A Cash net provide

  53. Slide 53: 2Q19 Debt by Country and Maturity

    2Q19 Debt by Country and Maturity Net debt breakdown by country 30 June 2019, (millions of COP) Colombia Uruguay Brazil (2) Argentina Consolidated Short-term debt 1,243,319 401,353 2,558,738 74,849 4,278,259 Long-term debt 2,777,991 - 4,041,013 - 6,819,004 Total gross debt (1) 4,021,310 401,353 6,59

  54. Slide 54: 2Q19 Holding P&L

    2Q19 Holding(1) P&L in COP M 2Q19 2Q18 % Var 1H19 1H18 % Var Net Sales 2,614,852 2,537,885 3.0% 5,259,483 5,108,402 3.0% Other Revenue 91,404 96,571 (5.4%) 177,603 177,389 0.1% Net Revenue 2,706,256 2,634,456 2.7% 5,437,086 5,285,791 2.9% Cost of Sales (2,179,595) (2,094,753) 4.1% (4,287,119) (4,116

  55. Slide 55: 2Q19 Holding Balance Sheet

    2Q19 Holding(1) Balance Sheet in COP M Jun 2019 Var % Dec 2018 in COP M Jun 2019 Var % Dec 2018 Assets 15,844,084 -6% 16,931,613 Liabilities 8,738,830 (8.2%) 9,520,410 Current assets 2,961,213 -24% 3,914,728 Current liabilities 4,616,403 (12.7%) 5,286,047 Cash & Cash Equivalents 881,242 (53.3%) 1,88

  56. Slide 56: 2Q19 Store Number and Sales Area

    2Q19 Store Number and Sales Area Banner by country Store number Sales Area (sqm) 2Q19 Colombia Éxito 246 625,386 Carulla 98 86,386 Surtimax 92 45,111 Super Inter 70 65,754 Surtimayorista 25 26,751 Total Colombia 531 849,388 Brazil Pão de Açúcar 185 237,483 Extra Hiper 112 684,760 Extra Super 128 131

  57. Slide 57: Financial Results 2018

    grupo Financial Results 2018

  58. Slide 58: 4Q/FY18 Strong Net Income Growth from Productivity and Innovation

    4Q/FY18 Strong Net Income Growth from Productivity and Innovation FY18 Net Revenue Recurring EBITDA Net Income Highlights + 8.9%(2) Margin +40 bps + 28.3% 5.7% (1) Financial Highlights:  Strong Consolidated Net Revenue growth (10.2% (2) in 4Q and 8.9% (2) for 2018).  Recurrent EBITDA margin grew b

  59. Slide 59: 4Q/FY18 Consolidated Financial Results

    4Q/FY18 Consolidated Financial Results Annual net sales growth of +8.6% (2) and recurring EBITDA margin gain of 40 bps (1) Consolidated Income Statement 4Q18 4Q17 FY18 FY17 In COP M In COP M %Var In COP M In COP M %Var Net Sales 15,382,189 15,476,821 -0.6% 54,009,077 55,556,241 -2.8% Other Revenue 2

  60. Slide 60: Group Share Net Result & Dividend Policy

    Group Share Net Result & Dividend Policy Net Income improvement of 28.3% driven by an optimized structure The Net Income result in 2018 of COP $279,403 M compares to the COP $217,713 M obtained in 2017, from:  Lower interest expenses from lesser rates in Bra (-50 bps to 6.5%) and Col (-50 bps to 4.

  61. Slide 61: FY18 Net Debt and Cash at the Holding Level

    FY18 Net Debt and Cash at the Holding Level (1) Improvement from lower financial expenses and better distribution in consolidated indebtedness 1,620 1,886 Cash (& other assets) Net Debt/Adjusted EBITDA ratio At Holding Level (2) -1,889 Gross debt -2,508 (financial -3,775 liabilities & -4,128 warrant

  62. Slide 62: 4Q/FY18 Debt by Country and Maturity

    4Q/FY18 Debt by Country and Maturity Net debt breakdown by country 31 Dec 2018, (millions of COP) Colombia Uruguay Brazil Argentina Consolidated Short-term debt 1,173,167 443,963 1,703,232 37,113 3,357,475 Long-term debt 2,895,570 - 4,419,625 - 7,315,195 Total gross debt (1) 4,068,737 443,963 6,122,

  63. Slide 63: FY18 P&L and CapEx by Country

    FY18 P&L and CapEx by Country Colombia Brazil Uruguay Argentina Consolidated In COP M FY18 FY18 FY18 FY18 FY18 Net Revenue 11,235,820 40,141,725 2,571,308 1,100,474 55,036,170 Gross Profit 2,803,217 9,391,076 868,617 385,100 13,444,560 % Net revenue 24.9% 23.4% 33.8% 35.0% 24.4% SG&A Expense -2,151,

  64. Slide 64: FY18 Consolidated Balance Sheet

    FY18 Consolidated Balance Sheet 64 Note: Data does include Via Varejo S.A., classified as held for sale.

  65. Slide 65: FY18 Consolidated Cash Flow

    FY18 Consolidated Cash Flow Summary Consolidated Cash Flow Statement Dec 2018 Dec 2017 % Var (In COP M) Profit (loss) 1,172,944 1,071,066 9.5% Adjustment to reconciliate Net Income 4,314,547 4,974,383 -13.3% Cash Net provided (used) in Operating Activities 3,888,393 2,722,484 42.8% Cash Net provided

  66. Slide 66: Note on Forward Looking Statements

    Note on Forward Looking Statements This document contains certain forward-looking statements. This information is not historical data and should not be interpreted as guarantees of the future occurrence of such facts and data. These statements are based on data, assumptions and estimates that the Gr

  67. Slide 67: Investor Relations contact

    María Fernanda Moreno R. Investor Relations Director +574 6049696 Ext 306560 maria.morenorodriguez@grupo-Éxito.com Cr 48 No. 32B Sur – 139, Av. Las Vegas Envigado, Colombia www.grupoÉxito.com.co Éxitoinvestor.relations@grupo-Éxito.com •“The Issuers Recognition -IR granted by the Colombian Stock Exch

Grupo Éxito — Q2 2019 Earnings Presentation on 6ix