Distribuidora Internacional De Alimentacion Sa · BME:DIA
Distribuidora Internacional De Alimentacion Sa — FY2018 Earnings Presentation
33 slides from Distribuidora Internacional De Alimentacion Sa's earnings presentation, February 2019
Slide 1: FY 18 Results
FY 18 Results February 2019 1
Slide 2: Legal disclaimer
Legal disclaimer This document does not constitute a purchase, sale or exchange of securities invitation or offer, nor does it constitute advice on any securities issued by DIA. DIA cautions that this document contains forward-looking statements found in various places throughout the presentation an
Slide 3: Today's speakers
Today’s speakers Borja de la Cierva Enrique Weickert María Miralles Chief Transformation Chief Executive Officer Chief Financial Officer Officer >30 years of experience >20 years of experience 16 years of experience • Appointed BoD member in September • Appointed CFO in December 2018 • Appointed CTO
Slide 4: DIA at a glance
DIA at a glance #1 Spanish convenience network >2.1x larger than #2 competitor 1 Deep expertise in private label Well-diversified footprint Serving all principal customer missions >45% private label penetration in Spain 1 under DIA, La Plaza and DIA&Go banners Loyal customer base € EUR7.3Bn in net s
Slide 5: Index
Index 01 Financial review 6 02 Strategy update 14 03 Conclusions 25 04 Appendix 28 5
Slide 6: Financial Review
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Slide 7: Sales performance
Sales performance EURm • -40.3% Euro/Argentinian Peso • -16.2% Euro/Brazilian Real Gross Sales Under Banner Net Sales Change -3.6% +2.7% -14.0% -14.9% +842.0 -36.5 -1,538.6 11,040.7 -397.5 8,217.5 -161.3 +298.1 -1,551.1 -34.4 9,390.2 7,288.7 FY 2017 LFL Space FX Effect FY 2018 FY 2017 Spain Portugal
Slide 8: Adjusted EBITDA
Adjusted EBITDA EURm Organic adj. EBITDA -105.8 518.5 -95.9 -12.1 +8.1 -5.9 -38.6 -36.2 +36.2 +11.3 385.4 337.9 EUR350-400m target achieved FY 2017 Spain Portugal Argentina Brazil FX effect IAS29 FY 2018 IAS29 Discontinuing FY 2018 (Argentina) (Argentina) operations 8
Slide 9: FY 2018 results summary
FY 2018 results summary 2018 2018 2017 Var Var EURm As Reported Impairment Adjusted Re-expressed (%) (EURm) NET SALES 7,288.7 7,288.7 8,217.5 -11% -928.7 Adjusted EBITDA 1 337.9 337.9 2 518.5 -35% -180.6 Other cash items -91.9 -91.9 -47.5 93% -44.3 EBITDA 246.0 0.0 246.0 470.9 -48% -224.9 D&A -235.2
Slide 10: Change in net debt
Change in net debt EURm +12.8 1,451.6 +86.3 +18.8 +110.3 +274.1 945.4 -337.9 +343.8 -93.9 +91.9 FY 2017 Adj. EBITDA Other cash Capex Divestments TWC Dividends Net Taxes FX & FY 2018 items (cash) financial result paid other 10
Slide 11: Three distinct phases in our performance as an independent company
Three distinct phases in our performance as an independent company 2011 2015 2016 2017 2018 “End 2018+” Growth and M&A Loss of focus on execution Refocus on execution: our new strategy Avg. net rollout: +221 p.a. Stores (000s) 6.8 7.7 6.2 6.1 6.2 Avg. LfL: 1.9% LfL (%) 1.8 1.3% 1.2 (4.9) (3.6) Avg.
Slide 12: What led to deterioration of performance in 2017 – 2018?
What led to deterioration of performance in 2017 – 2018? Highly competitive environment in Iberia Profit warnings Low franchisee support Lower customer centricity Multiple changes in Board and Management Acquisition strategy Too many formats Rating downgrades Institutional focus on margins Liquidity
Slide 13: Next steps: working towards a sustainable capital structure
Next steps: working towards a sustainable capital structure Post Capital Increase Deleveraging EURm, as of December 2018 2 • Indicative support from the syndicated facility lenders for an extension of the final maturity of the syndicated facilities post Rights Issue (EUR 3.8x 2.3x 765m) until March
Slide 14: Strategic Update
02 Strategic Update
Slide 15: Grocery retail is changing rapidly
Grocery retail is changing rapidly CONSUMER SEEK ENVIRONMENT EVOLVES COMPETITION ADAPTS FREQUENTLY MORE PRICE PRESSURE SOURCING FRESH & LOCAL HEALTHY VA L U E DIGITAL VALUE SOURCING SOFT DISCOUNT CONVENIENCE SOFT DISCOUN T ACCELERATION SERVICE P R I V A T E L A B E L / EVERY DAY LOW DIGITAL PRICE SM
Slide 16: Our mission
Our mission “Our ambition is to be the day-to-day grocery retailer closest to our customers; providing them with the best value convenience through our extensive omnichannel store network” 16
Slide 17: Our structural advantages
Our structural advantages We are close to our We have strong operational We manage capital customers know-how efficiently Our convenience focus We benefit from We keep a developed provides exposure a large, loyal range of private label to favorable and data-rich with over 2,000 SKUs in consumption t
Slide 18: The new DIA
Transformation programme focused on Spain & Portugal and supported by renewal of our culture The new DIA Spain & Portugal Brazil & Argentina 1 2 3 4 Transform our Reinvigorate our Re-engage with Re-focus on Focus on the commercial estate and franchisees effective core offer formats execution 5 Cultu
Slide 19: Transform our commercial offer
1 Transform our commercial offer $ Offer Price Perception Rationalise assortment and space Step-up Fresh offering with Invest in on-shelf prices while via SKUs reduction aligning with higher share and frequency reducing promotions customer needs Higher quality private label Personalised promotions d
Slide 20: Reinvigorate our estate and formats
2 Reinvigorate our estate and formats Omnichannel ecosystem built around convenience: what customers need, where they need it, when they need it Case study: DIA&Go Brick • 144 stores operating in 2018 • 75% of stores showing high and in-line On-the- Grab, go bag & go performance throughout the year
Slide 21: Re-engage with franchisees
3 Re-engage with franchisees Review and upgrade franchisee Review the incentive Invest in franchisee training and Introduce new model of onboarding portfolio system for existing and career planning with increased standards for new new franchisees franchisees We Invest in Our Franchisees on Equal Ter
Slide 22: Re-focus on effective execution
4 Re-focus on effective execution Re-engineer store Transform each link of Modernise our backbone operating model the supply chain Upgrade the store labour model Refocus on servicing the stores Implement ZBB 1 + ZBO 2 Reduce operational complexity Review cost structure Review processes / ways of wor
Slide 23: Renew and strengthen our company culture
5 Renew and strengthen our company culture $ Culture of openness and ROI-based performance Focus on the customer Recruit the best talent transparency incentives Reinvigorated Corporate Leadership to Build the New DIA María Miralles Borja de la Cierva Previous Enrique Weickert Previous Previous exper
Slide 24: Our management team
Our management team Executive Committee Borja de la Cierva Enrique Weickert Chief Executive Officer Chief Financial Officer 32 Years of Experience 21 Years of Experience María Miralles José Antonio Lombardía Faustino Dominguez de la Torre Executive Director of Transformation Executive Director of Cl
Slide 25: Conclusions
03 Conclusions
Slide 26: A clear vision of the transformed company
A clear vision of the transformed company DIA has historically We have Our transformation We have a clear performed but recently multiple structural plan is focused on strategy to build the went through a advantages execution new DIA setback 26
Slide 27: Reconfirmation of the outlook for DIA
Reconfirmation of the outlook for DIA 2018 2019 2020 – 2023 Reset A Transition Year Completion of Turnaround We guided towards: Sharpen our commercial model Mid-single digit top-line growth Adj. EBITDA of EUR350 – 400m EBITDA upturn in 2020E and Refocus on effective execution (before IAS29) healthy
Slide 28: Appendix
04 Appendix
Slide 29: Gross sales under banner by country
Gross sales under banner by country EURm FY 2017 % FY 2018 % Change FX effect Change (ex-FX) Spain 5,275.1 47.8% 5,147.7 54.8% (2.4%) 0.0% (2.4%) Portugal 834.4 7.6% 808.4 8.6% (3.1%) 0.0% (3.1%) Argentina 2,934.1 26.6% 1,794.5 19.1% (38.8%) (41.8%) 3.0% Brazil 1,997.1 18.1% 1,639.6 17.5% (17.9%) (1
Slide 30: Currency performance
Currency performance (%) 6.5 (7.4) (12.2) (12.0) (16.1) (17.5) (16.2) (19.7) (19.0) (30.9) (37.5) (40.3) (44.0) (51.2) Q4 2017 FY 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018 EUR/ARP EUR/BRL Source: Bloomberg average currency rates (a negative change in exchange rates implies a depreciation versus t
Slide 31: Gross sales under banner & adjusted EBITDA by segment
Gross sales under banner & adjusted EBITDA by segment FY 2017 Gross sales under banner FY 2018 Gross sales under banner 18.1% 17.5% 47.8% 54.8% 19.1% 26.6% 8.6% 7.6% FY 2017 adjusted EBITDA FY 2018 adjusted EBITDA 13.1% 16.0% 0.8% 11.2% 8.9% 8.0% 74.1% 67.7% Spain Portugal Argentina Brazil 31
Slide 32: Summary of stores
Summary of stores 2017 2018 DIA GROUP 1 Owned Franchised TOTAL Owned Franchised TOTAL Total stores at the beginning of the period 2.608 3.543 6.151 2.462 3.639 6.101 New openings 150 271 421 163 173 336 Owned to franchised net transfers -105 105 0 20 -20 0 Closings -191 -280 -471 -35 -245 -280 Total
Slide 33: Other items
Other items Other cash items Other non-cash items EURm 2017 2018 Change EURm 2017 2018 Change Expenses relating to store remodellings 18.0 18.6 0.6 Write-off of fixed assets -17.2 -25.4 -7.6 Expenses relating to transfer of own stores to franchises 10.8 10.4 -0.4 Impairment of fixed assets -12.1 -79
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