Inretail Peru Corp. · BVL:INRETC1
Inretail Peru — Q1 2016 Earnings Presentation
32 slides from Inretail Peru's earnings presentation, May 2016
Slide 1: Corporate Presentation May 2016
CORPORATE PRESENTATION May 2016
Slide 2: InRetail Overview
InRetail Overview Multi-format retailer with exclusive focus in Peru Leading positions in its 3 segments #2 supermarket chain #1 pharmacy chain #1 shopping center operator Controlled by Intercorp Peru, one of Peru’s largest business groups 2
Slide 3: InRetail is part of the retail arm of one of Peru's leading business groups
InRetail is part of the retail arm of one of Peru’s leading business groups 100.0% 77.6% Education Float1/ 28.5% BVL: INRETC1 1/ Includes 6.3% of Nexus 3
Slide 4: InRetail at a Glance
InRetail at a Glance Supermarkets Pharmacies Shopping Malls LTM Q1’16 (US$ millions) Revenues 1,262 737 134 2,117 % of Revenues 59.2% 34.5% 6.3% Adjusted EBITDA 81 65 84 226 Adj. EBITDA Margin1/ 6.4% 8.8% 82.5% 10.7% % of Adj. EBITDA 35.3% 28.2% 36.5% # Stores / S.Centers 127 922 18 Sales area / GLA
Slide 5: Key Investment Highlights
KEY INVESTMENT HIGHLIGHTS 1 FAST GROWING 2 MARKET 3 STRONG 4 INVESTMENTS SECTOR LEADERSHIP FINANCIAL 2016 - 2018 WITH SIGNIFICANT WITH CLEAR RESULTS UPSIDE POTENTIAL STRATEGY 5
Slide 6: Fast Growing Sector with Significant Upside Potential
1 FAST GROWING SECTOR WITH SIGNIFICANT UPSIDE POTENTIAL 6
Slide 7: Fastest growing economy boosts emerging middle class
Fastest growing economy boosts emerging middle class Real GDP Growth Population by Socio-Economic Category (2009-2015 CAGR) 5.4% ~1.7x Annual SEC 2005 2014 3.2% Income % of total population A $ 45,962 Perú Latin America 1/ 5.1% 12.5% +17.8 1/ Average Real GDP growth of Colombia, Brazil, Chile, Mexic
Slide 8: Significant upside potential for modern retail
Significant upside potential for modern retail Supermarkets Pharmacies Shopping Malls Penetration as a % of Total Sales - 2015 Sales of Retail Pharma per capita US$ - 2015 Malls per million people - 2015 Sales area per capita: Peru 0.24 sqm vs Chile 0.67sqm 58% 59% 208 5.0 Mean ex-Peru: Mean ex-Peru
Slide 9: Market Leadership with Clear Strategy
2 MARKET LEADERSHIP WITH CLEAR STRATEGY 9
Slide 10: Leading positions and highly recognized brands in all business segments
Leading positions and highly recognized brands in all business segments Supermarkets Pharmacies Shopping Malls 2nd 1st 1st Others 5.5% 5.1% 27.8% 22.5% Others 36.3% 12.6% 30.9% 52.8% 19.9% 24.0% 8.5% 35.9% 8.9% 9.4% Plaza Vea is the most remembered brand InkaFarma is the brand that more Real Plaza i
Slide 11: Largest nationwide footprint of premier retail locations
Largest nationwide footprint of premier retail locations Supermarkets Pharmacies Shopping Malls 104 Spmkts 922 Stores 18 Malls 23 Mass (8) (30) (7) (52) (6) (2) Piura (2) (1) Cajamarca (41) (30) Chiclayo (21) (5) (59) Trujillo (34) (15) Chimbote Huánuco (3) (1) (16) (1) (5) (72) (2) (43) (4) Lima (7
Slide 12: Openings and SSS by Segment
Openings and SSS by Segment Openings Same Store Sales (SSS) Supermarkets Supermarkets Sales Area (‘000 sqm) 4.4% 270 290 288 225 249 3.7% 3.4% 3.2% 2012 2013 2014 2015 Q1’16 No Stores1/ 86 98 101 123 127 Pharmacies 0.4% No Stores 2012 2013 2014 2015 Q1’16 837 921 922 725 580 Pharmacies 13.6% 2012 20
Slide 13: Supermarkets Segment
Supermarkets Segment Formats Revenues One stop shop: food and non-food products, and Sales area # of Stores Brand LTM Q1’16 entertainment to differentiate from traditional markets range (m2) Total / Provinces S/4,143 mm Attractive price positioning through High/Low strategy Fastest growing cha
Slide 14: Piloting New Discount Model
Piloting New Discount Model • Piloting a low CAPEX, low cost, every day low price format to capture untapped demand and penetrate traditional trade • 23 stores between 100 and 300 sqm in Lima • Testing value proposition (assortment, price, store size, etc.) • Ensuring cost structure through store pr
Slide 15: Pharmacies Segment
Pharmacies Segment Pharmaceutical Retail Market Sustainable “Every Day Low Price” strategy… Modern Total # of Annual sales Player Market Market High market-share Stores per store S/4.2bn S/7.2bn Strong bargaining power with suppliers High penetration of profitable private labels Operationa
Slide 16: Shopping Malls Segment
Shopping Malls Segment Shopping Malls Sales Sales (S/ millions) 2015 7,087 Nationwide premium portfolio of 18 locations 5,159 4,570 582k sqm of GLA, an expansion of 25% over the last 24 months 2,150 2,034 1,953 Preferred partner for local and international tenants: Other 1/ High tenant renew
Slide 17: Profitable Growth Initiatives
Profitable Growth Initiatives Value proposition to client • Develop customer identification and loyalty programs • Optimize promotions and discounts • Enhance product portfolio (including private labels) and tenant mix • Launch digital and e-commerce strategies • Launched PlazaVea e-commerce • Incre
Slide 18: Strong Financial Results
3 STRONG FINANCIAL RESULTS 18
Slide 19: Consolidated Financial Results
Consolidated Financial Results Million Soles (S/. mm) Highlights Revenues Sustained growth: CAGR13-LTMQ1’16: 12.6% 6,798 6,951 • Revenues: +9.5% vs Q1’15 6,147 5,322 • Adj. EBITDA: +10.1% vs Q1’15 9.5% • Adj EBITDA Margin: 10.2% vs 10.1% 1,611 1,765 • Net Income: +574.7% vs Q1’15 Q1’15 Q1’16 2013 20
Slide 20: Financial Results by Format
Financial Results by Format Million Soles (S/. mm) Revenues Adj. EBITDA CAGR13-LTMQ1’16: 11.4% CAGR13-LTMQ1’16: 12.7% 6,406 6,551 476 459 5,833 415 5,142 Pharmacies 36% 37% 364 36% Spmkts 44% 44% 35% 44% 42% InRetail 9.5% 16.7% Consumer 1,520 1,665 64% 64% 63% 101 118 65% 56% 56% 56% 36% 38% 46% 58%
Slide 21: InRetail Consumer - Financial Results
InRetail Consumer - Financial Results Million Soles (S/. mm) Revenues Adj. EBITDA CAGR13-LTMQ1’16: 10.2% CAGR13-LTMQ1’16: 11.0% 4,077 4,143 3,757 259 266 3,329 232 210 6.7% Supermarkets 12.8% 973 1,038 64 57 Q1’15 Q1’16 2013 2014 2015 LTM Q1’15 Q1’16 2013 2014 2015 LTM Q1’16 Q1’16 Gross Margin: 5.8%
Slide 22: Consolidated Net Income
Consolidated Net Income Million Soles (S/. mm) Net Income Net Income Breakdown 199 144 +574.7% 113 -27 64 64 63 79 10 Q1’15 Q1’16 2013 2014 2015 LTM -9 Q1’16 10 16 -5 Net Margin 0.6% 3.6% 1.2% 1.8% 2.1% 2.9% Net Income EBITDA Higher Lower Mark FX Gain Other Net Income Q1’15 Q1’16 Net Income excludin
Slide 23: Consolidated Capex and Free Cash Flow
Consolidated Capex and Free Cash Flow Million Soles (S/. mm) CAPEX Cash-Flow Breakdown 2015: S/510 mm 197 41 235 -79 -52 61 134 -39 105 74 79 168 Q1’15 Q2’15 Q3’15 Q4’15 Q1’16 Starting Operating CAPEX Debt Financial D&A and Ending Cash Cash Flow Increase Expenses Tax Cash Balance Expenses Balance De
Slide 24: Consolidated Financial Debt
Consolidated Financial Debt Million Soles (S/. mm) Consolidated Financial Debt USD Exposure 4.0x 4.0x 3.6x 3.6x 3.6x 3.6x 3.2x 3.2x 2.9x 39% 37% 72% 23% 23% 1.3x 38% 40% 28% 2012 2013 2014 2015 LTM Q1’16 dic-14 dic-15 mar-16 Net Debt/EBITDA Debt/EBITDA Hedge USD PEN Debt 1,668 1,722 2,446 2,670 2,69
Slide 25: Debt by Segment
Debt by Segment Million Soles (S/. mm) Total Consolidated Debt: S/.2,694 mm Debt / EBITDA: 3.6x Net Debt / EBITDA: 3.2x 3.2x 8.2x 3.0x 3.1x 3.0x 2.9x 2.8x 2.6x 2.7x 2.4x 5.4x 5.5x 4.4x 4.5x 2.0x 4.9x 4.7x 4.0x 4.1x 0.4x 2012 2013 2014 2015 LTM Q1’16 2012 2013 2014 2015 LTM Q1’16 Net Debt/EBITDA Debt
Slide 26: USD Debt Exposure and Debt Maturity by Segment
USD Debt Exposure and Debt Maturity by Segment Million Soles (S/. mm) USD Exposure Debt Maturity 1,072 24% 23% 13% 64% 21% 21% 283 InRetail 36% 200 202 173 Consumer 55% 56% 49% 41% 45% 87% 36% 64% 51% 59% 55% dic-14 dic-15 mar-16 2016 2017 2018 2019 2020+ Hedge USD PEN Interests Debt Maturity 1,300
Slide 27: Composition of Stores by Age
Composition of Stores by Age Supermarkets 9% 11% 10% 7% 4% 6% 5% 12% 14% 14% 8% 9% 11% 10% 9% 12% 10% 10% 10% 9% 7% 6% 4% 9% 10% 9% 10% 73% 72% 72% 72% 72% 72% 75% 78% 70% Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15 Q3’15 Q4’15 Q1’16 0-1 years 1-2 years 2-3 years Mature Pharmacies 16% 15% 15% 14% 12% 11% 11
Slide 28: Cash Cycle
Cash Cycle Supermarkets 99 100 94 93 90 93 93 92 93 93 80 59 59 59 61 56 54 60 52 52 52 1 0 4 4 2 3 2 3 2 3 -20 -32 -31 -31 -30 -38 -39 -35 -36 -39 -40 Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15 Q3’15 Q4’15 Q1’16 Days Acc Receivables Days Acc Payables Inventory Turnover Cycle Pharmacies 140 126 116 116 120
Slide 29: Investments 2016 - 2018
4 INVESTMENTS 2016 - 2018 29
Slide 30: Investments 2016 - 2018
Investments 2016 - 2018 2016 Key Investments Projected CAPEX of S/2 B for 2016-2018 By Segment Opening of 10k sqm of sales area (+3.5% growth) Initiate construction of additional 5k sqm to Shopping Supermarkets be opened in Q1 2017 Malls 37.7% Supermarkets 54.1% Initiate construction of new automate
Slide 31: things, general economic, political and business conditions, both in Peru and in Latin America
This material does not constitute an offering document. This material was prepared solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities. Any offering of securities will be made solely by means of an offering memorandum, which will c
Slide 32: For more information contact
For more information contact: ir@inretail.pe www.inretail.pe