Almacenes Exito SA · BVC:EXITO
Almacenes Exito SA — Grupo Éxito — Q1 2017 Earnings Presentation
32 slides from Almacenes Exito SA's earnings presentation, May 16, 2017
Slide 1: 1Q17 Financial Results
1Q17 Financial Results May 16th, 2017 “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”.
Slide 2: Agenda
Agenda 1Q17 Financial Highlights 1Q17 Operating Highlights International Strategy Follow-up 1Q17 Consolidated Financial Results Q&A Session 2
Slide 3: Disclaimer
Disclaimer Consolidated statements of income as of March 31st of 2016 include the effects of the restatement of the discontinued operation relevant to Via Varejo S.A. and Cnova N.V. for comparison purposes to 2017. They also include the effects of the restatement of Companhia Brasileira de Distribui
Slide 4: 1Q17 Financial Highlights
1Q17 Financial Highlights Strong operational result despite challenging macro conditions Latam Stronger sales and operational performance despite low inflationary trends and weak economics. Positive effect of transversal commercial activities favoured SSS market share gains in all countries. F
Slide 5: Key Commercial Drivers Latam
Key Commercial Drivers Latam Joint Strategies Favoring market share gains in all markets Commercial Unbeatable Fresh Textile Model Prices Products Model Successfully increased Best prices warranty. Differentiation strategy. Increased sales mix in sales levels in Brazil. Strategy focus in f
Slide 6: 1Q17 Operational Highlights
1Q17 Operational Highlights Expansion focus in key formats and businesses across the region Consolidated Capex COP$545.000 M (41% expansion, 59% maintenance). Colombia Capex was COP$185.000 M (35% real estate expansion). Food Retail Expansion 1Q17: 5 Openings Colombia: 1 Éxito flagship store
Slide 7: Loyalty Program – Puntos Colombia
Loyalty Program – “Puntos Colombia” Launch of Puntos Colombia, the new loyalty program in alliance with Grupo Bancolombia. Puntos Colombia, the biggest loyalty player in the country by number of customers. 50% stake each party, initial equity investment by Grupo Éxito of COP$9.000M. Puntos C
Slide 8: Sales Performance: Colombia
1Q17 Sales Performance: Colombia SSS (1) outperformed the market despite the retail contraction in the country Adjusted by calendar effect 1Q17 (1) Total sales % Var. Total % Var. SSS in 1Q17 In COP M sales in COP COP % Var. Total % Var. SSS Total Colombia 2,602,106 -2.4% -3.5% -1.0% -2.2% Éxito 1,7
Slide 9: Sales Performance: Brazil
1Q17 Sales Performance: Brazil Strong food sales (1) growth confirmed the recovery of Extra and solid contribution of Assaí % Var of Total % Var of SSS Total sales 1Q17 sales excluding excluding In COP M Calendar Effect (1) Calendar Effect (1) Total Brazil 9,742,308 9.5% 5.6% Sales grew 2x the CPI a
Slide 10: Operational Results: Colombia
1Q17 Operational Results: Colombia Sustained competitive margins despite macro winds Colombia 1Q17 1Q16 In COP M In COP M 1Q17/16 Recurring SG&A: the lowest Sales 2,602,106 2,665,179 -2.4% increase in the last two years Other Revenues 94,036 90,786 3.6% Net Revenues 2,696,142 2,755,965 -2.2% Gross P
Slide 11: Operational Results: Brazil
1Q17 Operational Results: Brazil Consistent productivity efforts and expense control led to higher profitability Brazil 1Q17 1Q16 Food Segment In COP M In COP M 1Q17/16 Sales 9,742,308 8,184,257 19.0% Other Revenues 67,603 54,995 22.9% Sales 2x CPI and operational Net Revenues 9,809,911 8,239,252 19
Slide 12: Sales & Operational Results: Uruguay
1Q17 Sales & Operational Results: Uruguay Recurrent Ebitda margin remained as one of the highest in LatAm retail Uruguay 1Q17 1Q16 In COP M In COP M 1Q17/16 Sales 668,377 630,450 6.0% Other Revenues 5,124 7,321 -30.0% Consistent growth and healthy Net Revenues 673,501 637,771 5.6% profitability leve
Slide 13: Sales & Operational Results: Argentina
1Q17 Sales & Operational Results: Argentina Libertad sales benefited mainly from the proximity format that grew above inflation Argentina 1Q17 1Q16 In COP M In COP M 1Q17/16 Sales 321,482 328,482 -2.1% Other Revenues 26,727 22,287 19.9% Resilient performance amidst Net Revenues 348,209 350,769 -0.7%
Slide 14: Consolidated Financial Results
1Q17 Consolidated Financial Results Consolidated financial results strongly benefited by Brazil and productivity efforts in all countries 1Q17 1Q16 In COP M In COP M 1Q17/16 Net Revenues 13,525,913 11,980,515 12.9% Gross Profit 3,237,947 2,828,593 14.5% Gross Margin 23.9% 23.6% SG&A Expenses -2,755,
Slide 15: Group Share Net Result
1Q17 Group Share Net Result Net result affected mainly by financial expenses and tax provisions The Net Result in 1Q17 versus 1Q16 derived from: o The positive quarterly variations of Recurring Operating Income of Brazil of COP$159,091 M and the consolidated non-recurring income of COP$23.900 M, off
Slide 16: Net Debt & Cash at Holding Level
1Q17 Net Debt & Cash at Holding (1) Level Results show QoQ deleveraging and cash improvements despite higher repo rates and the challenging macro environment +8.9% -8.2% -6.3% NFD at holding level: o COP$3.94 Bn as of march 31st, 2017 (-8.2% vs 1Q16 and including $450 M in USD). o A long term amor
Slide 17: International Strategy and Synergy Process Follow Up
International Strategy and Synergy Process Follow Up Joint commodity purchases Savings at 209 Containers Fruits, salmon, garlic, olive oil, wine, others 64% of 2016 volume cost level 3% to 15% Agreements negotiated in 2016 already providing recurring benefits in 2017 As a result of LatAm Business En
Slide 18: International Strategy and Synergy Process Follow Up
International Strategy and Synergy Process Follow Up Textile development in Brazil, Argentina and Uruguay Showroom Trip to Asia, March 13 -26 Spring - Summer 2018 Global Sourcing February 8-10, Colombia savings Sourcing Grupo Éxito 27% at cost level Styles Countries 4 22 112 991 displayed in showroo
Slide 19: International Strategy and Synergy Process Follow Up
International Strategy and Synergy Process Follow Up Allies 150 Partner stores in Sao Paulo 101% Positive sales performance vs budget Cash & Carry 2,7X Meat Grains Sales / sqm after conversion 3.100 Active SKU 57% Participation of professional buyers in total sales 19
Slide 20: International Strategy and Synergy Process Follow Up
International Strategy and Synergy Process Follow Up Commercial Model Shrinkage Implementation of Best practices exchange between Colombia Argentina’s and Brazil allows to improve shrinkage commercial model in levels all 4 countries Consistent - 227 - 41 implementation allow bps bps market share gro
Slide 21: International Strategy and Synergy Process Follow Up
International Strategy and Synergy Process Follow Up Premium Express format in Argentina Hiper Construcción, Córdoba 152 sqm 2600 SKU Express format in Uruguay Synergies Solymar store Run rate of USD$25 M by 2016 USD$50-60 M expected by 2017 196 sqm 3000 SKU 21
Slide 22: Conclusions
1Q17 Conclusions LatAm Strong quarterly consolidated results benefitted from GPA recovery. Focus and clear advances on cost and expense control. Synergy plan on track captured USD$25M in 1Q17 (same level attained in FY 2016). Colombia Resilient operational performance despite the contracted
Slide 23: 2017 Outlook
2017 Outlook Latam: Latam synergy outlook exceeding USD$50 million. Gradual decrease in interest rates (Col, Bra) to lower financial expenses and drive consumption levels. Mid-term economic recovery expected in Colombia, Brazil and Argentina. Focus on cost and expense control activities. E
Slide 24: Share Valuation
Share Valuation Share Valuation: Strong increase in valuation of Via Varejo and GPA still not fully reflected in Éxito´s share price. Local Currency Stock Market Evolution Closing Price as % Var from of May 15,2017 Jan 1st,2016 Grupo Éxito 15,960 18.2% GPA 74.20 77.3% Via Varejo 12.03 267.9% Local
Slide 25: 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
Slide 26: María Fernanda Moreno R., Investor Relations Director
María Fernanda Moreno R. Investor Relations Director +574 339 6156 + 574 339 6560 maria.morenorodriguez@grupo-exito.com Cr 48 No. 32B Sur – 139, Av. Las Vegas Envigado, Colombia www.grupoexito.com.co exitoinvestor.relations@grupo-exito.com •“The Issuers Recognition -IR granted by the Colombian Stock
Slide 27: Additional Financial Information: Debt
Additional Financial Information 1. Debt Net debt by country 4 5 7 6 March 31,2017 Colombia (1) Uruguay Brazil Argentina Consolidated (In millions of COP) Short-term debt 1,160,177 365,227 2,144,232 18,142 3,687,778 Long-term debt 3,382,003 0 2,336,899 0 5,718,903 (2) Total gross debt 4,542,180 365,
Slide 28: Additional Financial Information: Ebit, Ebitda, Capex by country
Additional Financial Information 2. Ebit –Ebitda – Capex by country Colombia Brazil Uruguay Argentina Consolidated In COP M FY16 FY16 FY16 FY16 FY16 Net Revenues 2,696,142 9,809,911 673,501 348,209 13,525,913 Gross Profit 684,233 2,194,959 232,814 126,626 3,237,947 % net revenues 25.4% 22.4% 34.6% 3
Slide 29: Additional Financial Information: Sum of the Parts
Additional Financial Information 3. Sum of the Parts LTM net revenues LTM recurring Net debt (Last Market Value of (Millions of COP) LTM ROI Éxito stake (1) EBITDA quarter) (2) the Stake (4) Colombia 11,358,063 829,159 589,999 - 3,865,027 100% Brazil 37,979,600 2,010,812 1,350,753 - 2,255,154 18.71%
Slide 30: Additional Financial Information: Consolidated Balance Sheet
Additional Financial Information 4. Consolidated Balance Sheet 30
Slide 31: Additional Financial Information: Separated P&L
Additional Financial Information 5. Separated P&L 1Q17 1Q16 In COP M In COP M 1Q17/16 Net Revenues 2,649,650 2,716,449 -2.5% Gross Profit 644,594 636,565 1.3% Gross Margin 24.3% 23.4% SG&A Expenses -572,522 -549,434 4.2% SG&A/Net Revenues -21.6% -20.2% Recurring Operating Income 72,072 87,131 -17.3%
Slide 32: Colombia Separated Balance Sheet
Additional Financial Information 6. Colombia Separated Balance Sheet 32 * Refers to Financial Statements of Almacenes Éxito Colombia without subsidiaries