Sonae Sgps Sa · EURONEXT:SON
Sonae Sgps Sa — Sonae — Caixabank BPI XV Iberian Conference (September 2018)
47 slides from Sonae Sgps Sa's conference presentation, September 2018
Slide 1: Investor Presentation
INVESTOR PRESENTATION At Sonae, each day is a new beginning for new opportunities, new challenges Caixabank BPI XV Iberian Conference and new triumphs Cascais, September 2018
Slide 2: Group Structure
Our group Group Structure Food retail Electronics retail Sports & Fashion retail Retail real estate * ** 100% 100% 100% 50% Retail properties Investment management Financial services Telco 26% 100% to 100% 23.4% 89.9% FULLYCONSOLIDATED EQUITYCONSOLIDATED * Sportzone, one of Sonae S&F’s brands is par
Slide 3: Who We Are: Our Diversified Portfolio
Our group Who We Are: 1. Leading market position in food retail, with profitability in- line with industry norms Our 2. The telco operator with the highest revenue growth in our Diversified market in FY17, and growing profitability Portfolio 3. Shopping centres with proven international strength; So
Slide 4: Sonae Investment Case
Our group SONAE *ASSUMPTIONS: 1. Large gap between NAV* and trading value Sonae MC: valuation based on sector's (reported NAV grew >4% CAGR from EV/EBITDA & EV/Sales applied to last 12 Investment €2.9bn in 2009 to €4.1bn in 1H18) months Sales & EBITDA reported Worten: valuation based on sector's EV
Slide 5: We Are at an Inflection Point
Our group SONAE 1. Portuguese economy is expected to continue to grow in the coming years We are at an 2. Upside potential from ongoing economic inflection recovery in Spain point 3. Turning the corner to profitability in Sports & Fashion business 4. Electronics business turnaround is underway 5
Slide 6: Board of Directors
Our group BOARD OF DIRECTORS A good balance A multidisciplinary BoD between (2015-2018) Executive Directors (2 members) and Non-Executive Directors (6 members) all 3 4 5 6 7 (from left to right) 1 2 of which independent (1) Tsega Gebreyes – Expertise in finance and strategy across (5) Christine Cros
Slide 7: Group Senior Executives
Our group GROUP SENIOR EXECUTIVES Since 2015 Sonae has been Responsible for adjusting its internal each division of the organisation, making its Group business units more autonomous, with clear separated Executive Committees, thus enabling higher levels of specialization and focus 1 2 3 4 5 6 7 8 (f
Slide 8: Our Mission and Our Way; Sonae and Capital Markets
Our group OUR MISSION SONAE AND AND OUR WAY CAPITAL MARKETS OUR MISSION We are a company which is majority owned by one shareholder who To create long-term economic and social value, taking the benefits of has shaped our culture and beliefs and we are a publicly traded progress and innovation to an
Slide 9: Our Values
Our group OUR VALUES TRUST AND INTEGRITY INNOVATION We are committed to creating economic value in the long term, built Innovation is at the heart of our businesses. We always question both our mental on sustainable relationships with all our stakeholders. We establish models and industry orthodoxie
Slide 10: Corporate Strategy: Value Creation through Sonae's Portfolio
Our group CORPORATE Strengthen and leverage our key assets and Drive international expansion Diversify business models and STRATEGY competencies investment approach VALUE Reinforcing our strongest competitive positions is a key condition for our long Internationalisation will remain our key growth d
Slide 11: Sonae as a Holding Company
SONAE 1. Enterprise Value AS A HOLDING 2. Invested Capital COMPANY 3. Balance Sheet 4. A stable shareholder structure 5. Shareholder Remuneration 6. Share Price 11
Slide 12: Enterprise Value: Sonae's Portfolio Divided by EV
Sonae as a Holding Company 01. ENTERPRISE SONAE’S PORTFOLIO VALUE DIVIDED BY EV A balanced portfolio Sonae’s EV split ASSUMPTIONS: of businesses (as of 1H18) Sonae MC: valuation based on sector's EV/EBITDA & EV/Sales applied to last 12 spanning multiple months Sales & EBITDA reported sectors Worten:
Slide 13: Invested Capital: Sonae's Portfolio Divided by IC
Sonae as a Holding Company 02. INVESTED SONAE’S PORTFOLIO CAPITAL DIVIDED BY IC €3,459 M IC Sonae’s IC split RoIC evolution (as of 1H18) (as of 1H18) Sierra; 16% MC; 21% Long-term target Worten; -1% RoIC 11% NOS; 20% S&F; 12% FS; 1% IM; 4% RP; 26% Maxmat; 1% Return on Invested Capital * Return on In
Slide 14: Balance Sheet
Sonae as a Holding Company 03. BALANCE SIGNIFICANT DELEVERAGING MADE POSSIBLE BY ORGANIC CASH FLOW SHEET GENERATION AND ASSET MONETISATION From 2Q13 to 2Q14 Sale & leaseback transactions Refinancing needs total decline of €571M Cash-In 2015 = €185M including €430M due Cash-In 2016 = €230M for next 1
Slide 15: Balance Sheet: Capital Structure
Sonae as a Holding Company 03. BALANCE CAPITAL SHEET STRUCTURE Retail Net Debt/EBITDA Retail Net Debt/ EBITDAR (1) NOS Net Debt/EBITDA AN APPROPRIATE Long-term target: <3.0 Long-term target: <3.5 Long-term target: 2.0 CAPITAL STRUCTURE 4.4 3.9 3.6 4.0 4.0 2.5 2.4 2.1 2.2 2.0 1.9 1.9 2.0 1.8 In each
Slide 16: Stable Shareholder Structure: Free Float
Sonae as a Holding Company 04. STABLE SHAREHOLDER STRUCTURE SHAREHOLDING STRUCTURE Reference FREE shareholder, EFANOR, FLOAT a family holding company Others; 32% of aprox. 42% Efanor; 53% a) shares held by top management plus * Norges Bank; 1% shares attributed to Sonae’s Directors (mid term perform
Slide 17: Shareholder Remuneration: Steadily Growing Dividend
Sonae as a Holding Company 05. SHAREHOLDER REMUNERATION STEADILY GROWING DIVIDEND Steadily growing dividend payer to maintain an adequate 4.20 cents Dividend per share evolution (in € cents) 4.20 shareholders dividend per share 3.31 3.31 3.31 3.48 3.65 3.85 4.00 remuneration 3.15 Annual shareholder*
Slide 18: Share Price; Analysts Valuation
Sonae as a Holding Company 06. SHARE ANALYSTS PRICE VALUATION €1.37 49% discount Some discount vs. Analysts average Sum of the Parts price target* when compared with share price as of 31.08.2018 (€0.917) valuation Share price performance Share price was particularly affected by the global financial
Slide 19: Recent Developments
Recent 1. Sonae analyses the possibility of listing part of Developments its retail portfolio Since March 15th 2018 (the process is underway) 2. Sonae reinforces stake in Sonae Sierra Announcement July 14th 2018 19
Slide 20: Rationale of the Potential Listing for Sonae
Recent Developments 1. Sonae analyses the possibility of listing part of its retail portfolio WHAT’S THE RATIONAL OF THIS POTENTIAL LISTING FOR SONAE ? Unlock shareholder value • Potential to reduce Sonae SGPS’ holding discount by providing visibility on Sonae MC’s standalone valuation Enhance Sonae
Slide 21: Perimeter Under Consideration
Recent Developments 1. Sonae analyses the possibility of listing part of its retail portfolio PERIMETER UNDER CONSIDERATION Note: For the purpose of the potential IPO and for this document, Sonae MC business is now defined as: i) the operation of food retail and adjacent formats (brands presented in
Slide 22: Why Reinforcing the Stake in Sonae Sierra
Recent Developments 2. Sonae reinforces stake in Sonae Sierra WHY REINFORCING THE STAKE IN SONAE SIERRA This investment allows Sonae to: • Reinforce its participation and influence in a leading business in the retail real estate sector • Increase the group’s international exposure, as Sonae Sierra i
Slide 23: Sonae Sierra at a Glance (1/2)
Recent Developments 2. Sonae reinforces stake in Sonae Sierra SONAE SIERRA Please click here for more info on Sonae Sierra AT A GLANCE (1/2) Highlights • More than 27 years with proven experience of successfully €7bn More than 60 46 own shopping OMV portfolio of shopping centres designing, developin
Slide 24: Sonae Sierra at a Glance (2/2)
Recent Developments 2. Sonae reinforces stake in Sonae Sierra SONAE SIERRA Please click here for more info on Sonae Sierra AT A GLANCE (2/2) Key figures OMV of owned assets (€ bn) # of tenant contracts under management (k) 7.0 7.4 9.0 9.1 9.4 6.0 Colombo, Lisbon 2015 2016 2017 2015 2016 2017 NAV (€
Slide 25: Impacts in Sonae Accounts of the New Accounting Methodology
Recent Developments 2. Sonae reinforces stake in Sonae Sierra IMPACTS IN SONAE ACCOUNTS OF THE NEW ACCOUNTING METHODOLOGY Sonae Sierra will now be fully consolidated in Sonae’s accounts • Up to now, Sonae Sierra’s results have been consolidated in the (until now: equity method consolidation) equity
Slide 26: Sonae Sierra Statutory Accounts
Recent Developments 2. Sonae reinforces stake in Sonae Sierra SONAE SIERRA STATUTORY ACCOUNTS CONSOLIDATED P&L 2016 2017 CONSOLIDATED FINANCIAL POSITION 2016 2017 Million euros Million euros TOTAL ASSETS 2,315.1 2,322.1 Services rendered 179.5 173.4 Non current assets 2,078.2 2,150.1 Variation in fa
Slide 27: Key Messages
KEY MESSAGES 1. A strong corporate culture with a clear mission and values instilled in SONAE its DNA 2. A stable shareholder structure A long-living 3. Oriented by a multidisciplinary Board with independent directors family 4. Leading market position in most of the formats controlled 5. Positioned
Slide 28: Backup
Backup 28
Slide 29: Consolidated Turnover FY17
Backup CONSOLIDATED TURNOVER FY17 Turnover reached € 5,710 M In million euros Turnover breakdown +7.1% Sonae consolidated (FY17) % Total 5,710 92 turnover increased by 5,329 24 117 92 18 72 126 78 7.1% +11.7% 589 527 In FY17, benefiting from the Maxmat; FS; 0% +10.2% 1,003 positive performance of th
Slide 30: Total EBITDA FY17
Backup TOTAL EBITDA FY17 EBITDA reached €396 M Total EBITDA (M€) EBITDA decreased y.o.y driven by the positive impact, last year, of non- FY17 396 recurrent items, due to S&LB transactions, in spite of the higher FY16 409 underlying EBITDA and Equity method results in FY17 Sonae MC Worten Sonae S&F
Slide 31: Consolidated Turnover 1H18
Backup CONSOLIDATED TURNOVER 1H18 Turnover reached € 2,680 M In million euros Turnover breakdown +7% Sonae consolidated (1H18) % Total 2,680 turnover increased 46 2,515 11 11 47 75 11 14 by 6.6% 69 168 167 36 40 Particularly impacted by Maxmat; FS; 1% 474 Sonae Retail IM; 3% 1% 443 +7.1% RP; 2% S&F;
Slide 32: Total EBITDA 1H18
Backup TOTAL EBITDA 1H18 EBITDA reached €154 M Total EBITDA (M€) EBITDA increased y.o.y supported by both higher underlying EBITDA 1H18 154 across almost all businesses and the equity method results line 1H17 139 EBITDA Sonae MC Worten Sonae S&F Sonae RP Sonae IM Sonae FS breakdown (1H18) 81 75 40 4
Slide 33: Sonae MC: Food Formats
Backup 1. LEADING MARKET POSITION IN FOOD RETAIL MARKET, Sonae MC WITH BENCHMARK PROFITABILITY: FOOD FORMATS Continente Continente Continente 41 Hypers Hypers Modelo Bom Dia 132 Supers •41 stores (25 are anchored with leading shopping •132 stores, typically located in medium sized • small, proximity
Slide 34: Sonae MC: Competitive Advantages
Backup 1. LEADING MARKET POSITION IN FOOD RETAIL MARKET, Sonae MC WITH BENCHMARK PROFITABILITY: COMPETITIVE ADVANTAGES Considered over the last Leadership in the Portuguese food retail market Continente 1 stop shopping (7% sales growth in 1H18) Loyalty Card (Hyper), combined with 13 years as one of
Slide 35: NOS
Backup 2. THE TELCO OPERATOR WITH HIGHEST TURNOVER GROWTH NOS IN THE MARKET, AND CONTINUOUSLY IMPROVED PROFITABILITY NOS strong operational Operating revenues Net results grew by 9%, to August 27th 2013: trends are generating increased 0.6% to €79 M market share gains €772 M, in 1H18, ZON OPTIMUS an
Slide 36: Sonae Sierra
Backup 3. Sonae SHOPPING CENTRES WITH PROVEN INTERNATIONAL BENCHMARK QUALITY SIERRA AND SIERRA PURSUING ITS RECYCLING CAPITAL STRATEGY 50% JV with Grosvenor In 1H18: Sonae should complete the • Occupancy rate = 95.8% acquisition of further 20% until YE • Tenant sales increased by 3.0% y.o.y. in Euro
Slide 37: Worten
Backup 4. THE IBERIAN OMNICHANNEL Worten ELECTRONICS PLAYER WITH TURNOVER OVER € 1 bn Competitive advantages of The reality in Spain Turnover and EBITDA evolution Aiming to build the Portuguese operation: (€M) a leading Iberian • Lack of scale is preventing omnichannel • Clear leader in the market f
Slide 38: Sonae S&F
Backup 5. FOCUS ON BUILDING COMPETENCIES TO REACH INTERESTING Sonae S&F PROFITABILITY LEVELS IN SONAE S&F SONAE FASHION Sonae Fashion ISRG Turnover and Underlying EBITDA evolution (€M) Turnover and Underlying EBITDA evolution (€M) OWN STORES: Period 1st Feb. - 5th May MO 111 Zippy 58 Salsa 89 Losan
Slide 39: Sonae RP: Sale & Leaseback Transactions
Backup 6. CAPITAL GAIN ABOVE €150 M Sonae RP SALE & LEASEBACK TRANSACTIONS OVER THE LAST 6 YEARS NET ASSET 908 From 2010 to 2011 Sonae completed Total Cash-In = €159 M VALUE Total net asset value = €101 M (1H18) million euros 8 sale & leaseback transactions GROSS BOOK 1,284 2014 2015 2016 2017 VALUE
Slide 40: Sonae IM
Backup 7. THE TECH CORPORATE VENTURING ARM OF SONAE GROUP Sonae IM A PORTFOLIO COMPOSED BY OPERATING COMPANIES AND MINORITY STAKES Aims to build a robust Operating Companies Minority Stakes Main goals Turnover €126 M portfolio of world (as of FY17) Financial returns as investments must be class tech
Slide 41: Sonae FS: Financial Services
Backup 8. FINANCIAL Sonae FS SERVICES Universo Card* Card Dá The recently created •Innovative open loop payment and loyalty card business unit aimed launched in Nov. 2015 A pre-paid card accepted in a network of more than •More than 667 thousand subscribers in a period of at fostering financial appr
Slide 42: Group Structure: Brands
Backup Group Structure: Brands ** * RETAIL REAL ESTATE FOOD ELETRONICS SPORTS& FASHION RETAIL INVESTMENT FINANCIAL DEVELOPER, TELCO RETAIL RETAIL RETAIL PROPERTIES MANAGEMENT SERVICES OWNER AND MANAGER FULLYCONSOLIDATED EQUITYCONSOLIDATED * Sportzone, one of Sonae S&F’s brands is part of the Iberian
Slide 43: History (1/3)
Backup HISTORY (1/3) 50’s to 70’s 80’s 90’s • Launch of Sonae in the Capital Markets (1983) Capital •7 IPOs for: Particleboard, Food Retail, Tourism, • Acquisition of a controlling position Markets Media, Robotics, Shopping Centres, electricity in Tafisa (wood panels) (1993) and cooling (1987) • Dis
Slide 44: History (2/3)
Backup HISTORY (2/3) 2007 2010 00’s to 2009 to 2012 • Sonae Sierra delisting (2001) Capital • Spin-off of Sonae Indústria (2005) • Spin-off of Sonae Capital Markets (2007) • Sonaecom takeover bid for PT and PT Multimédia (2006) • Partnership between MDS (insurance company) •Acquisition of Carrefour
Slide 45: History (3/3)
Backup HISTORY (3/3) 2013 and 2014 2015 to 2017 • Sonaecom launches a tender offer for the acquisition of a Capital maximum of 24.16% of its share capital. The level of Markets acceptance reaches 62%, corresponding to aprox. 55 million Sonaecom shares (2014) • Merger between Zon • Sonae IM pursues i
Slide 46: Investor Presentation: Events and Contacts
PREVIOUS EVENTS UPCOMING EVENTS INVESTOR 2018 Jan 17th: London roadshow with Haitong 2018 Sept 6th – 7th: Caixabank BPI Iberian Conference, Cascais PRESENTATION Feb 7th: Madrid Roadshow Feb 8th: Santander Conference, Madrid Sept. 24th – 27th: US and Canada roadshow (organized by Sonae) Oct. Date tbc
Slide 47: September 2018
September 2018
Sonae — Caixabank BPI XV Iberian Conference (September 2018) on 6ix