Slide 1: DIA: the Hard Discount Blue Chip
DRAFT DIA: the Hard Discount Blue Chip
Slide 2: Disclaimer
Disclaimer This document has been prepared by DIA solely for use at the presentation held in connection with the proposed allotment of DIA shares to the shareholders of Carrefour which shall be submitted to the approval of the shareholders general meeting scheduled on 21 June 2011 and the listing of
Slide 3: Key transaction highlights
Key transaction highlights BEFORE AFTER Description CARREFOUR CARREFOUR ‐ Board of directors of Carrefour will CARREFOUR CARREFOUR SHAREHOLDERS SHAREHOLDERS SHAREHOLDERS SHAREHOLDERS submit to Carrefour AGM, the distribution of 100% of DIA share capital Distribution to Carrefour shareholders, in the
Slide 4: Indicative Timetable
Indicative Timetable Preparation and publication of research reports DATES EVENTS May 17, 2011 Analyst presentation June 1, 2011, by 6:00pm CET Submission by analysts of draft research reports June 3, 2011 Comments with respect to factual accuracy of research reports and their compliance with the re
Slide 5: Introduction: A Leader Geared For Growth
DRAFT Introduction A Leader Geared For Growth Ricardo Currás ‐ CEO
Slide 6: DIA, a Compelling Investment Case
DIA, a Compelling Investment Case 1 HD pure player with leadership positions 2 An experienced management team 3 HD: an attractive segment with promising market dynamics 4 A distinctive strategy in the hard discount universe 5 A unique 3‐pillar geographic footprint: Iberia, France and Emerging countr
Slide 7: A Management Team with Extensive Experience
A Management Team with Extensive Experience Ricardo Currás Diego Cavestany Bruno Antonio Antonio Arnanz Martín de Don Pablos de Dalmases Pertriaux Coto Gutiérrez Chief Executive Financial Manager Senior Manager for Senior Manager for Senior Manager for the DIA Group DIA Group Operations France Ameri
Slide 8: Hard Discount: An Attractive Segment With Promising Market Dynamics
Hard Discount: An Attractive Segment With Promising Market Dynamics Two Two major major drivers drivers supporting supporting industry industry momentum momentum Demographics Socio‐economic trends Urban population increase, especially Increasing price awareness in emerging markets Hard Discount Stro
Slide 9: DIA: A Hard Discount Pure Player with Leadership Positions
DIA: A Hard Discount Pure Player with Leadership Positions DIA key figures (end of 2010) Nearly €10bn in sales AA Pure Pure Player Player Sales area: 2.6m sq.m Stores: 6,373 Pure Hard Discount (HD) player since ‐ of which 2,070 franchised stores inception in 1979 Warehouses: 42 Focus on food
Slide 10: A Unique HD Business Profile Combining Growth and Resilience
A Unique HD Business Profile Combining Growth and Resilience A Hard Discounter by Nature Product Optimized Cost‐Efficient Store 1 Sourcing Supply Chain IT System Productivity + Distinctive Operating Features Distinctive Product Flexible Store Dynamic Operating 2 Offering Formats Models + A Unique Ge
Slide 11: A Hard Discounter by Nature: DIA Masters All Key Features
A Hard Discounter by Nature: DIA Masters All Key Features of the HD Backbone… Product Optimized Cost‐Efficient Store Sourcing Supply Chain IT System Productivity Quality products Fully integrated State‐of‐the‐art Multifunction staff proprietary IT system Leading price image Cost‐efficiency from Auto
Slide 12: … With a Distinctive Value-Enhancing Strategy
… With a Distinctive Value‐Enhancing Strategy Attraction Proximity Store split (end of 2010) 32% Integrated * Franchise * 68% Distinctive Product Flexible Store Dynamic Operating Offering Formats Models An industrialized perishables Two evolving store formats Three operating models of offer with loc
Slide 13: DIA: More Than 30 Years of Continuous Growth
DIA: More Than 30 Years of Continuous Growth 2009 – Start of a 4‐year optimization and transformation plan of Ed France stores 2007 – Acquisition of Plus Supermarket chain International Expansion in 2003 – Establishment in China, first step on the Europe, Latin Asian market America, 2001 – First Dia
Slide 14: A Unique Geographical Footprint Offering Recurring Cash Flow and Strong Growth Prospects
A Unique Geographical Footprint Offering Recurring Cash Flow and Strong Growth Prospects Recurring cash flow Strong growth with high returns prospects Iberia France France Emerging Iberia Replicating Replicating Emerging countries countries AA proven proven model model the The The growth growth engi
Slide 15: A Strong Financial Track Record Combining Growth and Resilience
A Strong Financial Track Record Combining Growth and Resilience… Strong historical performance over 2006/2010 ... Average sales1 Average EBITDA2 growth growth (2006‐10): +6% (2006‐10): +8% … even in the last three years despite difficult macroeconomic environment DIA consolidated sales (€m) Adjusted
Slide 16: … Going Forward
… Going Forward 2011F 2010/13E Sales €9,970m 7% p.a. Adjusted EBITDA Cash (1) €540m 10% p.a. Adjusted operating profit €265m Emerging countries 30% of Sales and 20% of EBITDA in 2013 Capex €300‐350m p.a. by 2013 (1) Cf. Glossary section for definition 16
Slide 17: VIDEO 1: A leader geared for growth
VIDEO 1: A leader geared for growth
Slide 18: A Unique Business Profile Combining Growth and Resilience
Ricardo Currás A Unique Business Profile Combining Growth and Resilience A Hard Discounter by Nature Product Optimized Cost‐Efficient Store 1 Sourcing Supply Chain IT System Productivity + Distinctive Operating Features Distinctive Product Flexible Store Dynamic Operating 2 Offering Formats Models +
Slide 19: Our Product Strategy: Quality Products at Lowest Prices
1 A Hard discounter by nature Product Sourcing Our Product Strategy: Quality Products at Lowest Prices Good Value Lowest Price Recognized quality of products Strong price image in all countries and success of private label where we operate… products… … guaranteed by a centralized … ensured by strict
Slide 20: DIA's Price Image is Driven by Private Label
1 A Hard discounter by nature Product Sourcing DIA’s Price Image is Driven by Private Label… Private label is a key pillar of DIA’s price image strategy A broad assortment… … With the lowest prices in the market Total mass‐market private label items per country Weight of private label in mass‐market
Slide 21: Quality Guaranteed by the Integrated Quality Management Program
1 A Hard discounter by nature Product Sourcing … And Quality Guaranteed by the “Integrated Quality Management Program” High quality of private label products ensured by an internally‐developed ISO‐certified quality control system 1 Choice and definition of product Selection of ingredients/ Descripti
Slide 22: Best Price Image in 4 of 7 Countries
1 A Hard discounter by nature Product Sourcing Best Price Image in 4 of 7 Countries Spain 2 1 Best price image ahead of Aldi and Lidl 3 Portugal 1 Best price image ahead of Lidl and Pingo Doce 2 3 France 1 #3 player behind Lidl and Aldi 2 3 Best price image ahead of Changomas and Argentina 1 2 3 Sup
Slide 23: A Unique Business Profile Combining Growth and Resilience
Ricardo Currás A Unique Business Profile Combining Growth and Resilience A Hard Discounter by Nature Product Optimized Cost‐Efficient Store 1 Sourcing Supply Chain IT System Productivity + Distinctive Operating Features Distinctive Product Flexible Store Dynamic Operating 2 Offering Formats Models +
Slide 24: VIDEO 2: Supply chain efficiency at its best
VIDEO 2: Supply chain efficiency at its best
Slide 25: A Streamlined and Cost-Efficient Supply Chain
1 A Hard discounter by nature Optimized Supply Chain A Streamlined and Cost‐Efficient Supply Chain Supply Warehousing Transport Store Multi‐ Multi‐ temperature Strong temperature Truck‐loading relationships Automatic orders “Voice picking” optimization with suppliers RFID system Back‐hauling Optimal
Slide 26: A Cost-Efficient Value Chain Driven by Private Label
1 A Hard discounter by nature Optimized Supply Chain A Cost‐Efficient Value Chain Driven by Private Label Sourcing Logistics Display Packaging Large volumes Fully loaded trucks Pallets/semi‐pallets Multilingual per unit thanks to high help minimize packaging (same volumes product displaying products
Slide 27: A Unique Business Profile Combining Growth and Resilience
Ricardo Currás A Unique Business Profile Combining Growth and Resilience A Hard Discounter by Nature Product Optimized Cost‐Efficient Store 1 Sourcing Supply Chain IT System Productivity + Distinctive Operating Features Distinctive Product Flexible Store Dynamic Operating 2 Offering Formats Models +
Slide 28: An Integrated I.T. Structure
1 A Hard discounter by nature Cost‐Efficient I.T. System An Integrated I.T. Structure Internally developed Innovation‐driven In‐house … ensuring tools are well adapted to processes and needs Most tools are automatic Automatic (eg. automatic ordering at store level when level of inventories becomes c
Slide 29: A Unique Business Profile Combining Growth and Resilience
Ricardo Currás A Unique Business Profile Combining Growth and Resilience A Hard Discounter by Nature Product Optimized Cost‐Efficient Store 1 Sourcing Supply Chain IT System Productivity + Distinctive Operating Features Distinctive Product Flexible Store Dynamic Operating 2 Offering Formats Models +
Slide 30: Continuous Search for Improved In-Store Productivity
1 A Hard discounter by nature In‐store productivity Continuous Search for Improved In‐Store Productivity Multifunction staff Efficient display Efficient packaging Improved checkout Minimal amount of Shelf‐ready time dedicated to packaging Multiple bar codes Bi‐optical scanner (trays, lids) on privat
Slide 31: A Unique Business Profile Combining Growth and Resilience
Juan Cubillo A Unique Business Profile Combining Growth and Resilience A Hard Discounter by Nature Product Optimized Cost‐Efficient Store 1 Sourcing Supply Chain IT System Productivity + Distinctive Operating Features Distinctive Product Flexible Store Dynamic Operating 2 Offering Formats Models + A
Slide 32: VIDEO 3: Quality and price, always
VIDEO 3: Quality and price, always
Slide 33: A Unique Product Offering for a Hard Discounter
2 Distinctive Operating Features A Distinctive Product Offering A Unique Product Offering for a Hard Discounter Large range of private label products Broad assortment Large perishables offering Innovation Constant invention of new SKUs to meet customer expectations Profitability High sales volume en
Slide 34: DIA's Unique Positioning: Fresh Perishable Products
2 Distinctive Operating Features A Distinctive Product Offering DIA’s Unique Positioning: Fresh Perishable Products The DIA Difference DIA’s Added Value Large industrialized offer • Fruits and vegetables • Meat and chicken • Fish • Bread Perishables • Bakery products Mass‐market c. 20% Perishables p
Slide 35: Smart Pricing at the Core of DIA's Strategy
2 Distinctive Operating Features A Distinctive Product Offering Smart Pricing at the Core of DIA’s Strategy A three‐pillar pricing strategy to support price image and margins in all its markets Continuous monitoring of local Best price in local competitors’ prices to secure catchment areas best pric
Slide 36: ClubDIA: a Loyalty Program Which Guarantees Best Prices
2 Distinctive Operating Features A Distinctive Product Offering ClubDIA: a Loyalty Program Which Guarantees Best Prices Objectives of ClubDIA Targeted discounts 1. Increase sales Based on customer habits/preferences 2. Increase average basket of our customers Mostly on products beyond the usual scop
Slide 37: ClubDIA: Solid Results and Rapid Expansion
2 Distinctive Operating Features A Distinctive Product Offering ClubDIA: Solid Results and Rapid Expansion ClubDIA boosts sales volume to existing customers • Higher average basket for ClubDIA customers A program successfully implemented in mature countries • Successful in France in less than a year
Slide 38: A Unique Business Profile Combining Growth and Resilience
Juan Cubillo A Unique Business Profile Combining Growth and Resilience A Hard Discounter by Nature Product Optimized Cost‐Efficient Store 1 Sourcing Supply Chain IT System Productivity + Distinctive Operating Features Distinctive Product Flexible Store Dynamic Operating 2 Offering Formats Models + A
Slide 39: VIDEO 4: Two formats adapted to customers needs
VIDEO 4: Two formats adapted to customers needs
Slide 40: A Strategy Anchored Around Two Formats: DIA Maxi and DIA Market
2 Distinctive Operating Features A Strategy Anchored Around Two Formats: Flexible Store Formats DIA Maxi and DIA Market Two pre‐designed formats geared to: Meet customers’ main expectations Be adapted to local markets where implemented DIA DIA Market Market DIA Maxi Proximity Proximity Attraction At
Slide 41: DIA Market and DIA Maxi: Comparative Analysis
2 Distinctive Operating Features DIA Market and DIA Maxi: Flexible Store Formats Comparative Analysis DIA DIAMarket DIA Market Market DIA DiaMaxi Maxi Surface: 700‐1,000 sq.m Surface: 400‐700 sq.m Located on the outskirts of urban Key Features Located in urban areas centers No parking lot With a par
Slide 42: Update on DIA Market and DIA Maxi Transformation Plans
2 Distinctive Operating Features Update on DIA Market and Flexible Store Formats DIA Maxi Transformation Plans DIA DIA Market Market DIA Maxi More customer‐friendly shopping Higher average customer basket in The rationale experience (quicker, wider aisles, big value behind concept baskets with wheel
Slide 43: DIA Market and DIA Maxi Transformation Delivering Tangible Results
2 Distinctive Operating Features DIA Market and DIA Maxi Transformation Flexible Store Formats Delivering Tangible Results DIA DIA Market Market DIA Maxi Sales uplift in year 1 after transformation +20‐30% +10‐15% Sharper uplift on proximity format thanks to bigger changes (revamping, offering) Form
Slide 44: A Continuous Evolution of Formats to Meet Customer Expectations
2 Distinctive Operating Features A Continuous Evolution of Formats Flexible Store Formats to Meet Customer Expectations Proximity Focusing on … Urbana Market Market 2 Increasing visit frequency Fruits and vegetables Attraction Parking Maxi Maxi 2 Increasing average basket Offering large product form
Slide 45: A Unique Business Profile Combining Growth and Resilience
Antonio Coto A Unique Business Profile Combining Growth and Resilience A Hard Discounter by Nature Product Optimized Cost‐Efficient Store 1 Sourcing Supply Chain IT System Productivity + Distinctive Operating Features Distinctive Product Flexible Store Dynamic Operating 2 Offering Formats Models + A
Slide 46: DIA Group Operates with Three Operating Models
2 Distinctive Operating Features Dynamic Operating Models DIA Group Operates with Three Operating Models 2010 8,000 Company‐Owned, Company‐Owned, 4,303 4,303 6,094 6,373 COCO COCO 5,880 c.40% Company‐Operated Company‐Operated stores stores 22% 22% 22% 1% 32% 10% 5% Company‐Owned, 638 COFO COFO Franc
Slide 47: The Historic Company-Owned Model
2 Distinctive Operating Features Dynamic Operating Models The Historic “Company‐Owned” Model “Company‐Owned Company‐Operated” DIA owns the goodwill and does not own the property of its stores • DIA leases 90% of “Company‐Owned” stores Offers a greater command of the business and management • DIA Max
Slide 48: Two Growing Operating Models Based on Franchise
2 Distinctive Operating Features Dynamic Operating Models Two Growing Operating Models Based on Franchise “Franchise‐Owned Franchise‐Operated” 9 Lever for fast expansion Launched 20 years ago as a second‐step to COCO 9 FOFO benefits from DIA First reserved for rural areas where ‐ Strong reputation,
Slide 49: Sales and Margin Impacts of Transformation from COCO to COFO
2 Sales and Margin Impacts of Distinctive Operating Features Dynamic Operating Models Transformation from COCO to COFO COCO COFO DIA sales = Retail price Retail price Franchisee op. income Through COFO, DIA transfers … • Personnel costs Franchisee DIA • Shrinkage costs gross Franchisee costs margin
Slide 50: Franchising and COCO-to-COFO: Drivers of Expansion and Profitability
2 Distinctive Operating Features Dynamic Operating Models Franchising and COCO‐to‐COFO: the Drivers to Accelerate Expansion and Profitability Iberia Iberia France France Emerging Emerging countries countries # of stores 3,294 3,339 3,305 914 928 936 1,672 1,827 2,132 5% 3% 5% 6% 5% 17% 21% 25% 29% 2
Slide 51: Lunch
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Slide 52: Iberia: The Model for the Group
Diego Cavestany Iberia: The Model for the Group A Hard Discounter by Nature Product Optimized Cost‐Efficient Store 1 Sourcing Supply Chain IT System Productivity + Distinctive Operating Features Distinctive Product Flexible Store Dynamic Operating 2 Offering Formats Models + A Unique Geographical Fo
Slide 53: DIA Iberia: A Model for the Group as a Whole
3 A Unique Geographical Footprint DIA Iberia: A Model for the Group as a Whole Iberia Key Strengths Competitive Positioning Mass‐market Market Share 2010 (1) The largest store network in Spain and Portugal (2,766 and 539 respectively) Lidl Dia Lidl Strong EBITDA margin, at comparable levels 4% Minip
Slide 54: An Established Leader with Impressive Performance
3 A Unique Geographical Footprint An Established Leader with Impressive Performance… Iberia Key Figures (1) Historical Performance (Sales in €m) (1)(2) Spain – Launched in 1979 Portugal – Launched in 1993 4,938 5,025 4,943 7.6% 2,766 stores Successful acquisition of the Minipreço network 830 823 822
Slide 55: Striving for Even Further Growth and Expansion
3 A Unique Geographical Footprint Iberia … Striving for Even Further Growth and Expansion Growth Strategy Pillars Current Iberian Geographic Footprint Grow market share through expansion into new areas (for example Spanish islands) Seize possible consolidation opportunities Optimize the existing net
Slide 56: France: Replicating the Iberian success
Bruno Pertriaux France: Replicating the Iberian success A Hard Discounter by Nature Product Optimized Cost‐Efficient Store 1 Sourcing Supply Chain IT System Productivity + Distinctive Operating Features Disctinctive Distinctive Product Product Flexible Store Dynamic Operating 2 Offering Formats Mode
Slide 57: DIA France: All the Necessary Dynamics Already in Place
3 A Unique Geographical Footprint DIA France: All the Necessary Dynamics Already in Place… France Key Strengths Competitive Positioning (2) 2nd Hard Discount player by network and 3rd by Highly competitive market: HD represents c. 14% sales of the French market (3) Highly profitable prime locations
Slide 58: To Pursue a Successful Turnaround
3 A Unique Geographical Footprint France …To Pursue a Successful Turnaround… Key Figures (1) Historical Performance (Sales in €m) (2) Launched in 1979 2,818 2,677 2,518 2nd HD network in France • 936 stores 4.0% • 9 multi‐temperature warehouses 3.8% • Sales area of c.670,000 sq.m 3.5% c. 7,900 emplo
Slide 59: By Increasing Efficiency through Banner Conversion
3 A Unique Geographical Footprint …By Increasing Efficiency through Banner Conversion… France Economics of the Transformation From ED to the DIA Banner Temporary store closure for transformation to DIA • Average of 18 days in 2011 vs. 29 in 2010 • Quicker turnaround with experience Decreasing invest
Slide 60: Further Enhancing the Store Network, Image and Offering
3 A Unique Geographical Footprint …And Further Enhancing the Store Network, Image and Offering France Growth Strategy Pillars Potential Expansion Map Consolidate the #2 position behind Lidl Relaunch the expansion plan • Target of 50 to 60 store openings per year Existing ED stores Continue to conver
Slide 61: Emerging Countries: An Avenue of Profitable Growth
Antonio Coto Emerging Countries: An Avenue of Profitable Growth A Hard Discounter by Nature Product Optimized Cost‐Efficient Store 1 Sourcing Supply Chain IT System Productivity + Distinctive Operating Features Distinctive Product Flexible Store Dynamic Operating 2 Offering Formats Models + A Unique
Slide 62: Emerging Markets: An Avenue of Profitable Growth
3 A Unique Geographical Footprint Emerging Markets: An Avenue of Profitable Growth Emerging Markets Emerging Markets: The Largest Growth and Expansion Opportunity Emerging countries benefit from • Rapid urban population growth • Dynamic economic growth • Large potential for HD due to relatively frag
Slide 63: DIA Argentina: A Pioneer and Leader with the Dominant Network
3 A Unique Geographical Footprint DIA Argentina: A Pioneer and Leader with the Dominant Network… Emerging Markets Key Strengths Competitive Positioning Pioneer of Hard Discount in Argentina Leading market share in 2010 (1) # 1 store network today • 9.3% in region where it operates Only retail franch
Slide 64: With a Unique Loyalty Program Supporting a Strong Track Record
3 A Unique Geographical Footprint … With a Unique Loyalty Program Supporting a Strong Track Record… Emerging Markets Key Figures (1) Historical Performance (Sales in €m) (2) Launched in 1997 08‐10 08‐10 CAGR CAGR::+25.5% +25.5% Largest network with 448 stores in 5 provinces 559 Franchise network of
Slide 65: Looking to Cement its Leading Position in Argentina
3 A Unique Geographical Footprint … Looking to Cement its Leading Position Through Emerging Markets Geographic Expansion and Store Transformation Growth Strategy Pillars Potential Expansion Map Move to franchise model in remaining opportunities in the province of Buenos Aires Santa Fe/Entre Rios: Ca
Slide 66: DIA Brazil: A Leader in a Booming Market
3 A Unique Geographical Footprint DIA Brazil: A Leader in a Booming Market Emerging Markets Key Strengths Competitive Positioning Leader with the largest network in São Paulo Leading market share in 2010 (1) State and a strong expansion potential • 12.6% in São Paulo State Extremely high brand aware
Slide 67: Excellent Track Record Driven by Renowned Brand
3 A Unique Geographical Footprint Emerging Markets Excellent Track Record Driven by Renowned Brand Key Figures (1) Historical Performance (Sales in €m) (2) Launched in 2001 08‐10 08‐10 CAGR CAGR::+32.1% +32.1% 1,030 408 stores concentrated in the São Paulo state and mostly in the federal capital cit
Slide 68: Significant Potential for Geographic Expansion
3 A Unique Geographical Footprint Emerging Markets Significant Potential for Geographic Expansion Growth Strategy Pillars Potential Expansion Map Focus on geographic expansion, state by state Approved region opening: Porto Alegre region Continue the transformation of DIA Urbana, Further potential re
Slide 69: Emerging Countries: An Avenue of Profitable Growth
Javier La Calle Emerging Countries: An Avenue of Profitable Growth A Hard Discounter by Nature Product Optimized Cost‐Efficient Store 1 Sourcing Supply Chain IT System Productivity + Distinctive Operating Features Distinctive Product Flexible Store Dynamic Operating 2 Offering Formats Models + A Uni
Slide 70: DIA Turkey: A Large and Highly Fragmented Market
3 A Unique Geographical Footprint DIA Turkey: A Large and Highly Fragmented Market Emerging Markets Key Strengths Competitive Positioning The only franchiser in the industry Food retail industry still driven by the large Strong position in Istanbul and Izmir and footprint of the supermarket format c
Slide 71: Rapid Growth in a Dynamic Market
3 A Unique Geographical Footprint Rapid Growth in a Dynamic Market Emerging Markets Key Figures (1) Historical Performance (Sales in €m) (2) Launched in 1999 08‐10 08‐10 CAGR CAGR::+7.6% +7.6% Presence of a local partner Sabanci Holding, 381 with a 40% stake in the “DIA Sabanci” joint 329 302 ventur
Slide 72: Further Expansion in Existing and New Regions
3 A Unique Geographical Footprint Further Expansion in Existing and New Regions Emerging Markets Growth Strategy Pillars Potential Expansion Map Roll‐out of new stores and warehouses in Population: 12 m 2 Existing Regional Centers Potential: 343 stores existing and also new regions, accounting for 2
Slide 73: DIA China: The Latest Addition to DIA's Portfolio
3 A Unique Geographical Footprint DIA China: The Latest Addition to DIA’s Portfolio… Emerging Markets Key Strengths Competitive Positioning Concentration in 2 major regional hubs Larger hyper format already well developed Leader in the proximity segment But no large organized chains in Modern store
Slide 74: Where Proximity Format is a Major Opportunity
3 A Unique Geographical Footprint …Where Proximity Format is a Major Opportunity… Emerging Markets Key Figures (1) Historical Performance (Sales in €m) (2) Launched in 2003 08‐10 08‐10 CAGR CAGR::+14.9% +14.9% 386 stores, all proximity format (city stores) 145 161 • Concentrated in 2 hubs, Shanghai
Slide 75: To Rapidly Expand the Geographic Footprint
3 A Unique Geographical Footprint … To Rapidly Expand the Geographic Footprint Emerging Markets Growth Strategy Pillars Potential Expansion Map Expand geographic footprint mainly through the franchise model Northern Region Beijing, Tianjin, Hebei Population: 99 m Adapt the franchise model to new are
Slide 76: A Unique Business Profile Combining Growth and Resilience
Antonio Arnanz A Unique Business Profile Combining Growth and Resilience A Hard Discounter by Nature Product Optimized Cost‐Efficient Store 1 Sourcing Supply Chain IT System Productivity + Distinctive Operating Features Distinctive Product Flexible Store Dynamic Operating 2 Offering Formats Models +
Slide 77: Income Statement
Antonio Arnanz Income Statement A Hard Discounter by Nature Product Optimized Cost‐Efficient Store 1 Sourcing Supply Chain IT System Productivity + Distinctive Operating Features Distinctive Product Flexible Store Dynamic Operating 2 Offering Formats Models + A Unique Geographical Footprint 3 Iberia
Slide 78: A Strong Track Record of Store Expansion
4 Growth and Profitability A Strong Track Record of Store Expansion 2010 Sales €9.6 bn > 300 additional stores per year on average 6,373 6,094 5,769 5,880 5,403 5,039 4,607 4,178 3,760 3,526 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Note: network excluding stores in Greece which were transfe
Slide 79: 2008-2010 Sales Growth Mainly Driven by Emerging Countries
4 Growth and Profitability 2008‐2010 Sales Growth Mainly Driven by Emerging Countries… Mechanical negative impact of transfer to franchise on Iberia and France consolidated net sales Negative impact of temporary closures related to store conversion on France consolidated net sales Strong growth from
Slide 80: Delivering Resilient Profitability
4 Growth and Profitability … Delivering Resilient Profitability … Adjusted EBITDA Cash(1) (€m) Adjusted EBITDA Cash(1) Margin (% of sales) 507 5.3% +57bps +16.5% 4.7% (2)bps 4.7% 437 (0.5)% 435 2008 2009 2010 2008 2009 2010 (1) Cf. Glossary section for definition 80
Slide 81: Revenue and EBITDA Still Mainly Generated by Iberia and France
4 Growth and Profitability … With Current Revenue and EBITDA Still Mainly Generated by Iberia and France 2010 Sales Breakdown (€m) 2010 Adjusted EBITDA Cash Breakdown (€m) Emerging Emerging Countries Countries 7.1% 22.2% France 19.0% Iberia 51.5% France Iberia 26.3% 73.9% Sales: €9.6bn Adjusted EBIT
Slide 82: Summary P&L to EBITDA
4 Growth and Profitability Summary P&L to EBITDA €m 2008 2009 2010 Var. 08–09 Var. 09–10 Sales 9,239.8 9,226.6 9,588.0 (0.1%) 3.9% Gross Profit 1,822.7 1,863.7 1,935.7 2.2% 3.9% % Margin 19.7% 20.2% 20.2% Adjusted EBITDA Cash (1) 437.4 435.2 507.1 (0.5%) 16.5% % Margin 4.7% 4.7% 5.3% (1) Cf. Glossar
Slide 83: Operating Performance by Geography
Antonio Arnanz Operating Performance by Geography A Hard Discounter by Nature Product Optimized Cost‐Efficient Store 1 Sourcing Supply Chain IT System Productivity + Distinctive Operating Features Distinctive Product Flexible Store Dynamic Operating 2 Offering Formats Models + A Unique Geographical
Slide 84: Iberia: A Model for the Whole Group
4 Growth and Profitability Iberia: A Model for the Whole Group Sales (€m) Adj. EBITDA Cash(1) (€m) Adjusted CAGR EBITDA Cash 6.3% 6.6% 7.6% 5,026 (1.7)% (0.1)% Margin 375 4,943 4,938 319 +2.1% 325 +15.2% 853 847 989 7.7% (2.7%) 4,173 4,096 3,949 2008 2009 2010 2008 2009 2010 Integrated (1) Franchise
Slide 85: France: Replicating Iberian Success
4 Growth and Profitability France: Replicating Iberian Success Sales (€m) Adj. EBITDA Cash(1) (€m) Adjusted 2 818 (5.0)% 2 677 (5.9)% 2 518 CAGR EBITDA Cash 4.0% 3.5% 3.8% Margin 160 206 308 38.9% 113 (16.0)% +1.4% 95 96 2 658 2 471 2 210 (8.8%) 2008 2009 2010 2008 2009 2010 Integrated (1) Franchise
Slide 86: Emerging Countries: Profitable Growth
4 Growth and Profitability Emerging Countries: Profitable Growth Sales (€m) Adj. EBITDA Cash(1) (€m) 32.7% 2,132 CAGR Adjusted EBITDA Cash 0.4% 0.9% 1.7% +15.1% 1,607 423 72.6% Margin 36 1,396 +141% 195 142 1,709 16.7% +155% 15 1,254 1,412 6 2008 2009 2010 2008 2009 2010 Integrated (1) Franchise (1)
Slide 87: Operating Profit and Net Income
Antonio Arnanz Operating Profit and Net Income A Hard Discounter by Nature Product Optimized Cost‐Efficient Store 1 Sourcing Supply Chain IT System Productivity + Distinctive Operating Features Distinctive Product Flexible Store Dynamic Operating 2 Offering Formats Models + A Unique Geographical Foo
Slide 88: 2010 Operating Profit and Net Income Impacted by One-offs
4 2010 Operating Profit and Net Income Growth and Profitability Negatively Impacted by One‐offs and Temporary Items One‐off items: 3 ‐ Restructuring costs related to 2009 cost‐cutting 2 measures 1 ‐ Non cash impact (impairments, accelerated 1 depreciation of certain assets, etc.) ‐ Tax litigation Un
Slide 89: 2010 Operating Profit and Net Income: Guidance on One-offs
4 2010 Operating Profit and Net Income Growth and Profitability Negatively Impacted by One‐offs and Temporary Items Items Guidance Impact on Operating Net Income profit ‐ Limited restructuring costs going forward 9 9 with finalization of cost‐cutting plan One‐off Limited non‐cash impacts onwards wit
Slide 90: Adjustments to 2010 Operating Profit and Net Income
4 2010 Operating Profit and Net Income Growth and Profitability Negatively Impacted by One‐offs and Temporary Items Impact on financials of recent and ongoing store transformation plan explains the need to adjust operating profit and net income Given stores transformation plan completion by 2012, su
Slide 91: Cash Flow & Balance Sheet
Antonio Arnanz Cash Flow & Balance Sheet A Hard Discounter by Nature Product Optimized Cost‐Efficient Store 1 Sourcing Supply Chain IT System Productivity + Distinctive Operating Features Distinctive Product Flexible Store Dynamic Operating 2 Offering Formats Models + A Unique Geographical Footprint
Slide 92: Efficient Management of Operating Working Capital
4 Growth and Profitability Efficient Management of Operating Working Capital Operating Working Capital Comments Negative operating working capital normal given the Group’s business and typical in 28 27 26 the food retail industry accounting for 38 days of sales Agreements with suppliers regarding 38
Slide 93: A Disciplined Capex Policy
4 Growth and Profitability A Disciplined Capex Policy Capex(1) (€m) Integrated Stores Expansion (# stores) Franchise Expansion (# stores) As of % of sales 4.8% 3.7% 3.0% 653 707 700 696 (23)% (15)% 247 162 243 405 344 241 145 460 538 453 46 195 260 309 2008 2009 2010 2008 2009 2010 (2) Transformatio
Slide 94: Strong Cash Flow Generation
4 Growth and Profitability Strong Cash Flow Generation Net Cash Flow from Operating Activities (€m) Net Cash Flow Used in Investing Activities (€m) 548.2 410.7 348.9 (191.0) (302.1) (375.5) 2008 2009 2010 2008 2009 2010 Net Cash Flow from Strong increase of operating cash flow following implementati
Slide 95: Sharp Improvement in ROCE well above industry standards
4 Growth and Profitability Sharp Improvement in ROCE well above industry standards Pretax ROCE (1) (%) Comments 27% Sharp improvement of Pretax ROCE from 20% in 2008 to 27% in 2010 thanks to sustainable and profitable growth 20% 14% DIA Pretax ROCE significantly higher than median of other listed Eu
Slide 96: Solid Capital Structure
4 Growth and Profitability Solid Capital Structure Net Financial Debt/Adjusted EBITDA Cash Comments 2010 post spin‐off net financial debt 1.2x 1.2x equals 1.2x Adjusted EBITDA Cash due to an increase in financial debt pre spin‐ off in order to align leverage with peers DIA leverage ratio is in line
Slide 97: Debt Structure
4 Growth and Profitability Debt Structure 2010 Forecast Debt Structure Comments Type Amount Maturity Initial margin Carrefour parent company financing has been refinanced by long‐term debt and Bullet €350m 5 years 1.90% revolving credit facilities Amortizable €350m 5 years 1.75% Robust long‐term deb
Slide 98: Update on Q1 2011
Antonio Arnanz Update on Q1 2011 A Hard Discounter by Nature Product Optimized Cost‐Efficient Store 1 Sourcing Supply Chain IT System Productivity + Distinctive Operating Features Distinctive Product Flexible Store Dynamic Operating 2 Offering Formats Models + A Unique Geographical Footprint Optimiz
Slide 99: Dia on Track to Deliver 2011 Targets
4 Growth and Profitability Dia on Track to Deliver 2011 Targets Sales as of 31 march 2011 (€m) Comments YoY Change: (1.5)% (6.1)% 27.2% 2.9% Sales growth of c.3%, on track to deliver 571 2 317 2 251 2011 target of 4%, market share gains 586 in Iberia and all emerging markets 1161 Significant contrib
Slide 100: Conclusion
Spin-off DIQ may 17", 2011 Conclusion Ricardo Currds
Slide 101: DIA: an Autonomous Company Ready to Unleash its Full Potential
DIA: an Autonomous Company Ready to Unleash its Full Potential 9 Brand 9 Supply chain 9 Headquarters Already a standalone 9 Loyalty program 9 Most of purchasing company 9 Executive management 9 IT system Relationship maintained Partnership with Carrefour for private label in Europe with Carrefour DI
Slide 102: DIA's Corporate Governance Principles in Line with Best Practices
DIA’s Corporate Governance Principles in Line with Best Practices A new Board of Directors, 100% focused on Dia and business oriented 10 members, of which 7 are independent Composition compliant with the Spanish Good Governance Code best practices Board members Ana María Llopis (Chairman, non execut
Slide 103: DIA's Long-Term Vision
DIA’s Long‐Term Vision Mission: Mission: seize seize the the long‐term long‐term growth growth potential potentialof of hard hard discount discount ª 11 Continue to improve our Hard Discount backbone Focus on lowest prices Capitalize on our private label strategy Pursue cost‐efficiency across the HD
Slide 104: 3-year Operating Objectives
3‐year Operating Objectives Accelerate store openings Especially in emerging countries Over Over 8,000 8,000 stores stores by by 2013 2013 Seize positions for tomorrow: a driver of “strategic value” Complete transformation into DIA Market and DIA Maxi Complete Complete turnaround turnaround In Spain
Slide 105: Financial Objectives
Financial Objectives 2011F 2010‐13E Sales €9,970m 7% p.a. Adjusted EBITDA Cash (1) €540m 10% p.a. Adjusted operating profit €265m Emerging countries 30% of Sales and 20% of EBITDA in 2013 Capex €300‐350m p.a. by 2013 (1) Cf. Glossary section for definition 105
Slide 106: Financial Structure and Dividend Policy
Financial Structure and Dividend Policy Net financial debt Maintain net financial debt / EBITDA below 2.0x Dividend policy Payout of c.35% of consolidated net profit adjusted for exceptional items in each financial year (1) Adjusted EBITDA excluding logistics assets depreciation expense included in
Slide 107: DIA, a Compelling Investment Case
DIA, a Compelling Investment Case 1 HD pure player with leadership positions 2 An experienced management team 3 HD: an attractive segment with promising market dynamics 4 A distinctive strategy in the hard discount universe 5 A unique 3‐pillar geographic footprint: Iberia, France and emerging countr
Slide 108: Appendices
Spin-off DIQ may 17", 2011 Appendices
Slide 109: Glossary
Glossary ITEMS DEFINITION The “adjusted EBITDA cash,” is defined as “operating profit” before “gains (losses) on disposals of non‐ ADJUSTED EBITDA current assets,” “depreciation amortization and impairment” of logistics assets included in “cost of sales” CASH in the income statement and “other res
Slide 110: Summary Income Statement
Summary Income Statement 2008 2009 2010(1) Var. 08‐09 Var. 09‐10 Sales 9,239.8 9,226.6 9,588.0 (0.1%) 3.9% Gross profit 1,822.7 1,863.7 1,935.7 2.2% 3.9% % Margin 19.7% 20.2% 20.2% Adjusted EBITDA Cash 437.4 435.2 507.1 (0.5%) 16.5% % Margin 4.7% 4.7% 5.3% EBITDA 355.7 417.3 448.3 17.3% 7.4% % Margi
Slide 111: Increase in D&A Expense on the Back of Previous Strong Investments
Increase in D&A Expense on the Back of Previous Strong Investments Comments Majority of stores leased (90%) but still requires investments • Lay‐out Capex(1) • Equipment 3.0% 3.7% Investments in logistics centers, some of 4.8% which are owned 2.9% Acceleration of transformation program 2.9% since 20
Slide 112: Tax Rate in 2010
Tax Rate in 2010 Effective Tax Rate Evolution Statutory Tax Rate Spain 30% Portugal 29% France (1) 34% Comments Turkey 20% Tax litigation in Spain in 2010 Increase in Tax rate in Portugal in 2010 Argentina 35% Effect of negative profit before tax in some countries on consolidated effective tax rate
Slide 113: Companies Accounted for under Investments in Associates and Non-controlling Interests
Companies Accounted for under Investments in Associates and Non‐controlling Interests Investments in Associates(1) (€ ‘000) Minority Interests(1) (€ ‘000) Comments Comments Investments in Associates includes: Non‐controlling interests include: • Holdings in Proved SAS • Dia Sabanci Supermarketleri T
Slide 114: Summary Balance Sheet
Summary Balance Sheet €m 2008 2009 2010 Var.08–09 Var.09–10 Non‐current Assets 2,168.8 2,165.1 2,141.5 0% (1%) Current Assets 1,175.3 1,113.3 1,111.9 (5%) 0% Total Assets 3,344.0 3,278.4 3,253.4 (2%) (1%) Total Equity 744.7 804.9 422.5 8% (48%) Non‐current Liabilities 244.4 214.8 222.8 (12%) 4% Curr
Slide 115: Cash Flow Statement
Cash Flow Statement €m 2008 2009 2010 Profit before tax 114.4 154.5 204.3 Adjustments to profit 286.4 280.1 277.7 Working capital adjustments (51.9) (23.8) 66.2 Net cash flows from operating activities 348.9 410.7 548.2 Net cash flows used in investing activities (375.5) (302.1) (191.0) Net cash flo
Slide 116: Efficient Management of Operating Working Capital
Efficient Management of Operating Working Capital Operating Working Capital Var Var Operating Working Capital (€m) 2008 2009 2010 09‐08 10‐09 Inventories 577 541 539 (36) (2) Inventory Days (1) 28 27 26 (1) (1) Trade and Other Receivables 176 125 179 (51) 54 Trade and Other Receivables Days (1) 7 5