Almacenes Exito SA · BVC:EXITO
Almacenes Exito SA — Grupo Éxito — Q2 2018 Earnings Presentation
36 slides from Almacenes Exito SA's earnings presentation, Aug 15, 2018
Slide 1: 2Q18 Financial Results
2Q18 Financial Results Aug 15, 2018 “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 2Q18 Financial and Operating Highlights Performance by Country Financial Results International Strategy Follow-Up Q&A Session
Slide 3: 2Q18 Financial and Operating Highlights
2Q18 Financial and Operating Highlights Margin Growth from Improved Operating Performance at all Business Units Financial Highlights: Consolidated Net Revenue rose +8.7% (1) driven by sales growth at all countries and the strong 42.8% (1) Other Revenue growth Recurring EBITDA margin gained 70 bp
Slide 4: 2Q18 Financial and Operating Highlights
2Q18 Financial and Operating Highlights Margin Growth from Improved Operating Performance at all Business Units Expansion Activities: Consolidated CAPEX: COP$873,293 M in 2Q18 (53% expansion) o CAPEX Colombia: COP$143,815 M (50% in real estate including Viva Envigado and Viva Tunja) Food Retail
Slide 5: Net Sales Performance: Colombia
2Q18 Net Sales Performance: Colombia Sequential improvement in Net Sales (1) and SSS (1) 2Q18 Adjusted by calendar ( 1) 1H18 Adjusted by calendar ( 1) % Var. %Var. Var. Var. Var. Net In COP M Net Sales % Var. Total % Var. SSS Net Sales Var. SSS Net Sales SSS Net Sales SSS Sales Total Colombia 2,532,
Slide 6: Net Sales Performance: Colombia
2Q18 Net Sales Performance: Colombia Sequential improvement in Net Sales (1) and SSS (1) % Growth SSS Adj. by CE Éxito: 0.7% Sales trend improvement in the last 2 quarters -1.5% -1.7% Improved performance in all regions -2.9% -2.3% -1.3% Growth of the non-food categories, home, textile and -2.
Slide 7: Growth Leverage Activities in Colombia: Fresh Market Concept
Growth Leverage Activities in Colombia Fresh Market Concept Carulla Pepe Sierra • Innovation of Carulla´s fresh category Over 26k SKU´s • Quality, differentiation and service Coffee and chocolate experiences • Double-digit sales growth after model Dry aged meat implementation Wood oven organ
Slide 8: Growth Leverage Activities in Colombia: Loyalty Program Puntos Colombia
Growth Leverage Activities in Colombia Loyalty Program: “Puntos Colombia” 14.8 M clients enrolled versus 10 M initially expected Launched in August 1st, 2018, the largest ecosystem of point issuances and redemptions in Colombia. First true coalition program formed by a retailer and a bank in Latam,
Slide 9: Growth Leverage Activities in Colombia: Omni-channel Strategy
Growth Leverage Activities in Colombia Omni-channel Strategy 30% sales growth in 1H18 COP 159,000 M Websites Home Delivery 10% Sales growth 1.2 M deliveries in 1H18 73% dispatched by Rappi Click and Collect Brick & Mortar @ 300 stores 559 stores Mobile App Digital Catalogs 66% traffic at
Slide 10: Net Sales Performance: Brazil
2Q18 Net Sales Performance: Brazil Net sales growth driven by Multivarejo recovery and consistent Assaí performance 2Q18 Adjusted by Adjusted by 1H18 calendar ( 1) calendar ( 1) % Var. %Var. % Var. Var. Net Var. Var. Net Var. In COP M Net Sales % Var. Total Net Sales Net Sales SSS SSS Sales SSS Sale
Slide 11: Operating Results: Colombia
2Q18 Operating Results: Colombia(1) Operating margin improved by 120 bps from controlled cost and expenditure and top line recovery Colombia 2Q18 2Q17 1H18 1H17 In COP M In COP M 2Q18/17 In COP M In COP M 1H18/17 Net Sales 2,532,112 2,513,016 0.8% 5,107,929 5,115,122 -0.1% Other Revenue 146,280 130,
Slide 12: Operating Results: Brazil
2Q18 Operating Results: Brazil Higher profitability from solid growth at Assaí and operational improvements at Multivarejo Brazil 2Q18 2Q17 1H18 1H17 Food Segment In COP M In COP M 2Q18/17 In COP M In COP M 1H18/17 Net Sales 9,204,787 9,620,287 -4.3% 19,124,624 19,362,595 -1.2% Other Revenue 112,774
Slide 13: Net Sales & Operating Results: Uruguay
2Q18 Net Sales & Operating Results: Uruguay Solid top line (1) (3) and margin growth from efficiency gains Uruguay 2Q18 2Q17 1H18 1H17 In COP M In COP M 2Q18/17 In COP M In COP M 1H18/17 Net Sales 580,821 603,961 -3.8% 1,290,126 1,272,338 1.4% Results in COP Other Revenue 6,458 6,140 5.2% 12,205 11,
Slide 14: Net Sales & Operating Results: Argentina
2Q18 Net Sales & Operating Results: Argentina Libertad outperformed the market and improved productivity by 40 bps Argentina 2Q18 2Q17 1H18 1H17 In COP M In COP M 2Q18/17 In COP M In COP M 1H18/17 Net Sales 281,820 319,385 -11.8% 596,629 640,867 -6.9% Results in COP Other Revenue 17,933 20,563 -12.8
Slide 15: Consolidated Financial Results
2Q18 Consolidated Financial Results Top Line and Improved Operating and EBITDA Margins at all Business Units Consolidated Income Statement 2Q18 2Q17 1H18 1H17 In COP M In COP M %Var In COP M In COP M %Var Net Sales 12,598,247 13,053,737 -3.5% 26,117,317 26,386,981 -1.0% Other Revenue 282,343 213,984
Slide 16: Group Share Net Result
Group Share Net Result Net Income reflected financial and operational efficiencies across the region 8,153 1,113 51,853 -17,038 112,736 -44,628 119,004 33,521 -95,969 69,263 Net Income ∆ ROI ∆ Non-rec. ∆ Financial ∆ Income from ∆ ROI ∆ ROI ∆ Income ∆ Min Net Income 2Q17 Colombia expenses result asso
Slide 17: Net Debt and Cash at Holding Level
Net Debt and Cash at Holding(1) Level Improvements from lower financial expenses and debt rebalancing 1,482 894 Cash (& other assets) 2Q 2017 2Q 2018 Gross debt (financial liabilities & warranties) Net financial debt -2,912 -3,606 -4,501 -4,394 -19.3% NFD at the holding level: Increased cash level
Slide 18: Synergies Follow-up: 4 countries USD 120 M
Synergies Follow-up 4 countries USD 120 M 28 Initiatives under expected annual run rate in 2018 execution Formats & Brands Cash & Carry Autopista Sur Ciudadela Cafam Pradera Turbaco 2x +4 13 <1,000 sqm Sales growth vs Stores opened Stores operating Innovating with smaller converted stores in 2Q18 YT
Slide 19: Synergies Follow-up - Model Replication
Synergies Follow-up - Model Replication Leading the value format proposal in the region with the Fresh Market Model Additional sales growth after Implemented at 24 stores model implementation 3 stores +7.8% (1) 11 stores +8% (1) Carulla Pepe Sierra +1 store in 2Q18 9 stores +6% (1) 1 store Ibirapuer
Slide 20: Synergies Follow-up – Textile Model
Synergies Follow-up – Textile Model Arkitect & Bronzini positioning as regional brands 43.5% 47.2% 46.4% 33.6% 17.7% 4.9% 0% 0.5% 46% 45% 0% 0% 35% 39.6% 9% 0% 2015 2016 2017 2018 YTD Brand increase on share mix
Slide 21: Synergies Follow-up – Joint Activities
Synergies Follow-up – Joint Activities Growing food purchasing power from solid integration 400 x1.3 USD 18.6 USD 1.7 millions millions Food containers Volume in 1H18 vs 1H17 Joint purchasing Savings at cost level Example: mozzarella cheese purchasing USD 3.9 M 17% Savings at 49 Containers cost leve
Slide 22: Synergies Follow-up – Best practices
Synergies Follow-up – Best practices Operational Excellence implemented in Uruguay inspired by the Colombian experience Productivity increase in +8.5% stores´ operation vs n-1 Model Out of stock reduction implemented -2.5% at 45 Inventory value stores -7.7% reduction vs n-1 +11.4% GMROI increase vs
Slide 23: 2Q18 Conclusions
2Q18 Conclusions Top-line (1) and Recurring EBITDA margin growth in all countries. Recurring Operational margin (+40 bps) and Recurring EBITDA margin (2) (+70 bps) growth at consolidated level. Plans to control expenditures continue advancing and improving productivity across all business unit
Slide 24: Appendices
Appendices 24
Slide 25: 2018 Outlook
2018 Outlook Colombia Retail expansion of 12 to 15 stores (+20k sqm of gross sales area), including 8 Surtimayorista stores. Fresh Market concept at 5 stores and best performing initiatives to be rolled out at Carulla stores. SG&A expenses to grow below CPI, benefitted by ongoing productivity
Slide 26: Ongoing Strategies by Country
Ongoing Strategies by Country Ongoing Strategies in Colombia Ongoing Strategies in Brazil Activities to drive • “Fresh Market” model implementation Activities to • Operational Excellence Program performance • Improved portfolio of “Unbeatable” drive • “Textile model“ implementation at products perfo
Slide 27: Debt by Country and Maturity
2Q18 Debt by Country and Maturity Net debt breakdown by country 30 June 2018, (millions of COP) Colombia Uruguay Brazil Argentina Consolidated Short-term debt 1,563,827 396,254 1,393,684 111,329 3,465,094 Long-term debt 3,000,919 - 4,532,948 - 7,533,867 Total gross debt (1) 4,564,746 396,254 5,926,6
Slide 28: P&L and CAPEX by Country
2Q18 P&L and CAPEX by Country Colombia Brazil Uruguay Argentina Consolidated In COP M 2Q18 2Q18 2Q18 2Q18 2Q18 Net Revenue 2,678,392 9,317,561 587,279 299,753 12,880,590 Gross Profit 659,525 2,471,670 197,977 104,267 3,432,313 % Net revenue 24.6% 26.5% 33.7% 34.8% 26.6% SG&A Expense -504,617 -1,609,
Slide 29: SOTP Analysis
2Q18 SOTP Analysis LTM net LTM recurring Net debt (Last Market Value of (in COP M) (1) LTM ROI (2) Éxito stake revenues EBITDA quarter) the Stake (3) Colombia 11,149,210 621,477 372,074 2,992,595 100% Brazil 41,089,058 2,747,590 2,021,844 3,594,216 18.7% 2,954,978,681 Uruguay 2,631,708 214,395 188,9
Slide 30: Consolidated Balance Sheet
2Q18 Consolidated Balance Sheet Consolidated Balance Sheet Jun 2018 Dec 2017 Var % (In COP M) Assets 55,267,683 64,515,547 -14.3% Current assets 27,847,343 33,960,011 -18.0% Cash & cash equivalents 4,105,672 5,281,684 -22.3% Inventories 5,547,429 5,912,514 -6.2% Accounts receivable 795,639 1,172,380
Slide 31: Consolidated Cash Flow
2Q18 Consolidated Cash Flow Summary Consolidated Cash Flow Statement Jun 2018 Jun 2017 % Var (In COP M) Profit (loss) 708,885 469,460 51.00% Adjustment to reconciliate Net Income 2,384,761 2,290,562 4.1% Cash Net provided (used) in Operating Activities (2,307,057) (4,148,110) -44.4% Cash Net provide
Slide 32: Holding P&L
2Q18 Holding (1) P&L Income Statement Almacenes Éxito 2Q18 2Q17 1H18 1H17 In COP M In COP M 2Q18/17 In COP M In COP M 1H18/17 Sales 2,537,885 2,506,218 1.3% 5,108,402 5,103,245 0.1% Other Revenue 96,571 86,866 11.2% 177,389 139,489 27.2% Net Revenue 2,634,456 2,593,084 1.6% 5,285,791 5,242,734 0.8%
Slide 33: Holding Balance Sheet
2Q18 Holding (1) Balance Sheet Holding Balance Sheet Jun 2018 Dec 2017 Var % (In COP M) Assets 14,211,555 15,962,702 -11.0% Current assets 3,370,108 3,273,274 3.0% Cash & cash equivalents 1,482,016 1,619,695 -8.5% Inventories 1,273,348 1,111,981 14.5% Accounts receivable 128,052 189,750 -32.5% Asset
Slide 34: Stores & Selling Area
2Q18 Stores & Selling Area Selling Stores & Selling area Stores Area (sqm) Colombia Éxito 250 627,795 Carulla 99 85,273 Surtimax 124 65,325 Super Inter 73 66,272 Surtimayorista 13 17,179 Total Colombia 559 861,844 Uruguay Devoto 56 39,049 Disco 29 33,421 Geant 2 16,411 Total Uruguay 87 88,881 Brazil
Slide 35: 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 36: Investor Relations Contact
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