Slide 1: Investor Presentation
Improving GROWTH INVESTOR PRESENTATION IMPROVING LIFE
Slide 2: 1. Strategic Directions
1 STRATEGIC 1. DIRECTIONS 2
Slide 3: Where we are going and why?
WHERE WE ARE GOING AND WHY? International Diversifying Leverage Expansion investment the exceptional style asset base in Portugal The main strategic Adopt the most appropriate Innovate; Generate new priority investment style businesses; Strengthen for each business our competitive position 3
Slide 4: How do we get there?
HOW DO WE GET THERE? Reorganise R i Retail R il Merger off the M h Holding H ldi into three separate and Retail Corporate businesses Centres 2 Core Businesses Sharper focus on retail 1 related business and related areas Long term Set up of a new Investment core partnerships Management area Sonae Sie
Slide 5: How do we position ourselves?
HOW DO WE POSITION OURSELVES? WE ARE A RETAIL COMPANY • Market k leader l d in food f d andd specialized l d retaill formats f • With Board control of a Shopping Centre and a Telecommunications business SONAE Turnover 5.7 billion euros (2009) ; EBITDA 667 million euros (2009); Invest Capital 4.8 bil
Slide 6: 2. Growth, Profitability, and a Greater International Presence
2 GROWTH, 2. GROWTH PROFITABILITY PROFITABILITY, AND A GREATER INTERNATIONAL PRESENCE 6
Slide 7: We achieved our growth and profitability objectives
WE ACHIEVED OUR GROWTH AND PROFITABILITY OBJECTIVES NET DIRECT TURNOVER EBITDA PROFITS +6% +8% +11% In spite of macro-economic difficulties and a strongg deflationary y background g 7
Slide 8: Investing in future growth
INVESTING IN FUTURE GROWTH GROSS CAPEX OUTSIDE PORTUGAL 614 M€ 117 M€ High levels of investment in retail unit organic expansion: 100,000 m2 +100,000 8
Slide 9: Reducing net debt and improving debt ratios
REDUCING NET DEBT AND IMPROVING DEBT RATIOS REDUCTION NET DEBT NET DEBT/EBITDA -3 3% 14% 9
Slide 10: While sustaining ROE of direct income
WHILE SUSTAINING ROE OF DIRECT INCOME 6% 21% 15% 15% -7% 7% 14% -7% 8% 7% ROE (direct income) 2007 2008 2009 ROE (indirect income) ROE 10
Slide 11: And distributing economic value
AND DISTRIBUTING ECONOMIC VALUE Economic Value Customers Distributed Community • €204M of discounts • €10M of support to the community on loyalty cards/sales receipts • 2,619 institutions supported • 4% fall in unit pprices 5,678M€ of products sold (2009) Employees • + 1,935 new jobs created Bank •
Slide 12: 3. Performance of the Businesses
3 PERFORMANCE 3. OF THE BUSINESSES 12
Slide 13: 3.1. Leadership and Profitability
3.1.LEADERSHIP AND PROFITABILITY 13
Slide 14: Increased leadership of the food retail market
INCREASED LEADERSHIP OF THE FOOD RETAIL MARKET INCREASE IN SALES (+6%) ABOVE THAT OF THE MODERN RETAIL MARKET (+3%) MODELO CONTINENTE 1 7X 1.7X 2.6X 3.1X 3.1X 3 4X 3.4X FOOD MARKET Market 2nd 3rd 4th 5th 6th Leader Plyer Plyer Plyer Plyer Plyer HYPERMARKETS CAFETERIAS BOOKSHOP, Continente +2% Bom Bo
Slide 15: Leadership has enabled growth and profitability to be achieved
LEADERSHIP HAS ENABLED GROWTH AND PROFITABILITY TO BE ACHIEVED TURNOVER = + 6% | EBITDA= + 6% TURNOVER (M€) EBITDA (M€) 2,930 3,106 187 199 2 391 2,391 141 +6% +6% +23% 23% +33 33% TURNOVER 2007 2008 2009 2007 2008 2009 AND EBITDA SALES ON A LIKE EBITDA margin = 6.4% EBITDAR margin = 10% FOR LIKE BA
Slide 16: Performance reflects the strong programme of organic growth in Portugal
PERFORMANCE REFLECTS THE STRONG PROGRAMME OF ORGANIC GROWTH IN PORTUGAL STORES = 378 | SALES AREA = 528,000 M2 528 465 492 +7% 7% N stores: New t +39,000m2 +89 stores ORGANIC GROWTH 2007 2008 2009 IN 2009 Sales l area (‘000 ( m2) 16
Slide 17: Strong investment in innovation
STRONG INVESTMENT IN INNOVATION 2,400 2,500 2,100 23% 20% 17% BENCHMARKS 2007 2008 2009 % Sales FMCG INVESTMENT IN OWN BRAND • Broadening of the Own Brand range • Representing a quarter of FMCG sales • Own Brands include: • The Th Continente C b d (20% cheaper than the sales category leader) brand s
Slide 18: Strong investment in innovation
STRONG INVESTMENT IN INNOVATION Without loyalty card 16% With loyalty card 84% LOYALTY CARD % OF SALES THE SUCCESS OF THE CUSTOMER LOYALTY CARD • 84% of sales made using the customer loyalty card • Improved efficiency and greater customization of sales promotions undertaken • Highly distinctive valu
Slide 19: Strong investment in innovation
STRONG INVESTMENT IN INNOVATION 30% 27% Perishables FMCG Perishables Light household goods T til Textiles PERISHABLES Hiper Super SHARE OF SALES INVESTMENT IN PERISHABLES • “Traffic Generator” category • Clear value proposal in price/quality terms • Increase in sales on like for like basis • Strengt
Slide 20: Large number of incremental innovations
LARGE NUMBER OF INCREMENTAL INNOVATIONS Extension of the Broadening of the range Development of new Producers’ Club to: of controlled brands formats and in-store Baking and Confectionery, concepts Olive Oil and Coastal Fishermen 20
Slide 21: Strengthening of our competencies and value proposal
AND THE STRENGTHENING OF OUR COMPETENCIES AND VALUE PROPOSAL Continente and Modelo each h have h di i i distinctive competencies STRONG BRAND PRODUCT EXCELLENCE RECOGNITION OFFER VARIETY OF THE LOGISTICS INFRASTRUCTURE Continente Continente: 2 logistics g warehouses is considered to be the ~70,000 s
Slide 22: 3.2. Growth and International Expansion
3.2.GROWTH AND INTERNATIONAL EXPANSION 22
Slide 23: Significant growth of 22%, strong organic expansion in Portugal and Spain
SIGNIFICANT GROWTH OF 22% STRONG ORGANIC EXPANSION IN PORTUGAL AND SPAIN…. STORES = 454 | SALES AREA = 304,000 M2 ORGANIC GROWTH TURNOVER (M€) Sales area (‘000 m2) 304 1,132 247 928 783 185 +23% +22% +19% ORGANIC GROWTH 2007 2008 2009 2007 2008 2009 AND TURNOVER New stores: +61,000m2 +77 stores t 23
Slide 24: Portugal: turnover increased 10%
PORTUGAL: TURNOVER INCREASED 10% TURNOVER (M€) 988 898 783 +10% +15% 2007 2008 2009 STRENGTHENING SPORTZONE GOOD PERFORMANCE MODALFA OF LEADERSHIP POSITION #1 in Portugal BY THE TEXTILES +13% IN THE CONSUMER +13% FORMATS ZIPPY ELECTRONICS AND WORTEN +28% SPORTS GOODS SECTORS #1 in Portugal +9% 24
Slide 25: Portugal: sustained increase in profitability
PORTUGAL: SUSTAINED INCREASE IN PROFITABILITY EBITDA SONAE SR PORTUGAL 71 58 53 +21% 2007 2008 2009 • Market share gains, increasing leadership in consumer electronics and sports goods • Increased efficiency in more recent formats 25
Slide 26: International sales: accounts for 13% of total Sonae SR sales
INTERNATIONAL SALES: ACCOUNTS FOR 13% OF TOTAL SONAE SR SALES INCREASE OF PRESENCE IN SPAIN: REPRESENTS 56% OF THE INCREASE IN SONAE SR SALES TURNOVER (M€) 144 N stores: New 30 +22 stores 4.8X +22 000m2 +22,000m TURNOVER SONAE SR 2008 2009 ESPANHA (M€) STORES = 38 (+22) SPORTZONE = 14 (+8) WORTEN =
Slide 27: International expansion effort impacting profitability
INTERNATIONAL EXPANSION EFFORT IMPACTING PROFITABILITY BUT IN LINE WITH THE GOAL OF POSITIVE EBITDA IN 2012 -8% 53 52 48 Impact of Spanish business EBITDA S Sonae SR EBITDA (M€) 2007 2008 2009 SONAE SR EBITDA REFLECTS TWO OPPOSING FACTORS: • Sonae SR Portugal: increasing profitability in Portugal p
Slide 28: We are meeting the goal of long term growth
WE ARE MEETING THE GOAL OF LONG TERM GROWTH S Sonae MC and d Sonae S SR SR: combined growth of 10% Sonae SR International: accounts for 30% of this growth 28
Slide 29: 3.3. Retail Real Estate Asset Management
3 3 RETAIL 3.3. REAL ESTATE ASSET MANAGEMENT 29
Slide 30: Focus on partially freeing up capital invested in assets held
FOCUS ON PARTIALLY FREEING UP CAPITAL INVESTED IN ASSETS HELD INVESTED CAPITAL 09 = 1,523 M€ (increase of 112 M€) TURNOVER 09 = 123M€ HYPERMARKETS SUPERMARKETS CONTINENTE MODELO 34 stores owned 102 stores 90% of total sales area 84% of total sales area 2 Sale & Lease Back transactions currently y un
Slide 31: 3.4. Good Performance of the Core Partnerships
3.4.GOOD PERFORMANCE OF THE CORE PARTNERSHIPS 31
Slide 32: EBITDA maintained and direct profits increased by 20%
EBITDA MAINTAINED AND DIRECT PROFITS INCREASED BY 20% 86 77 • Occupancy rate = 95% (+1.5pp ) 64 • Total T t l rents t collected ll t d (fixed and variable) up by 2% • Expansion restricted in Europe but partially offset by greater +20 20% development activity in Brazil DIRECT PROFITS 2007 2008* 2009
Slide 33: EBITDA grew 10% and cash flow was positive
EBITDA GREW 10% AND CASH FLOW WAS POSITIVE CAPACITY TO EXCEED THE OBJECTIVES SET FOR THE YEAR... MOBILE SEGMENT EBITDA CUSTOMERS (M) (M€) 3 220 3,269 3,327 , 3,433 176 3 192 3,220 3,192 162 160 +10% +8% 4Q08 1Q09 2Q09 3Q09 4Q09 2007 2008 2009 • Growth in mobile customers and customer revenues • Gain
Slide 34: 4. Debt and Leverage Ratios
4.DEBT AND LEVERAGE 4 RATIOS 34
Slide 35: Net debt was reduced by 79M€
NET DEBT WAS REDUCED BY 79M€ DESPITE THE CAPITAL INVESTMENT MADE IN GROWTH AND INTERNATIONAL EXPANSION % of total 39% 30% 12% 3% 16% 100% 496 376 93 927 3,080 1,188 Retail Sonae Sierra Sonaecom IM Holding Total Net Debt Businesses This performance can be explained by the cash flow generated and by g
Slide 36: An appropriate capital structure in each business
AN APPROPRIATE CAPITAL STRUCTURE IN EACH BUSINESS TO SUPPORT FUTURE GROWTH PLANS Leveraging Ratio of Retail of Sonae Sierra and Telecommunications and Holding assets Debt 4.4x 4.3x 4.2x 48.6% 49.3% 50.5% 49.9% 46.7% 3.5x 3.4x .5 2.5x 2.6x 2 2x 2.2x 2.1x 22 2.2x 23.2% 22.5% 18.7% 14.8% 14.7% 4Q08 1Q0
Slide 37: Major improvement in debt ratios
MAJOR IMPROVEMENT IN DEBT RATIOS ON TRACK TO ACHIEVE INVESTMENT GRADE BY 2012 Have the option of issuing debt if needed to finance growth and/or repay debt EBITDA/INTEREST / NET DEBT/EBITDA / Consolidated figures 7.7x Consolidated figures Excluding Sonae Sierra 6.1x 5.6x 5.7x 5.7x 5.6x 5,1x 4 9x 4.9
Slide 38: 5. Outlook for 2010
5 OUTLOOK 5. FOR 2010 38
Slide 39: Outlook for 2010: Core businesses
OUTLOOK FOR 2010 Continue profitable growth and strengthen market positions, while at the same time reducing net debt CORE BUSINESSES Sonae MC Sonae SR Sonae RP Ensure growth and high levels International expansion: Conclude sale & leaseback off profitability fit bilit in i Portugal. P t l strengthe
Slide 40: Outlook for 2010: Core partnerships
OUTLOOK FOR 2010 Continue profitable growth and strengthen market positions, while at the same time reducing net debt CORE PARTNERSHIPS Sonae Sierra Sonaecom Ensure that the business remains resilient by Manage cash flow and optimize operational controlling t lli costst andd reducing d i capital it
Slide 41: Investor Presentation
Improving GROWTH INVESTOR PRESENTATION IMPROVING LIFE