Sonae Sgps Sa · EURONEXT:SON
Sonae Sgps Sa — Sonae — Investor Presentation (April 2014)
40 slides from Sonae Sgps Sa's investor presentation, April 2014
Slide 1: Investor Presentation April 2014
INVESTOR PRESENTATION April 2014
Slide 2: 1. Sonae Overview
Slide 3: Group Structure
1. SONAE OVERVIEW Group Structure COMPANY SONAE with 2 core 100% 100% 100% 50% 89% ° SONAE MC SONAESR SONAE RP SONAE SIERRA SONAECOM pa rtnerships Food Retail Specialised Retail Shopping Telco Retail Properties Centres * Market leader in Portugal Sports goods, Retail real Shopping centre Integrated
Slide 4: Shareholdings
1. SONAE OVERVIEW Shareholdings A STABLE SHAREHOLDER STRUCTURE Reference shareholder, Efanor, a family holding company NYX NYSE EURONEXT FREE FLOAT OF CIRCA Others 28,9% Efanor ce) wy 0% Norges Bank 2,0% Fundacao Berardo *BPI stake includes Equity swap 2.5% of circa123 million Sonae shares Bestinver
Slide 5: Group Breakdown
1. SONAE OVERVIEW Group Breakdown BREAKDOWN PER BUSINESS Turnover breakdown (2013) UNDERLYING EBITDA MARGIN % Total Turnover (2013) % Turnover 2012 2013 Sonae 71% 7.8% Sonae MC 7,6% 7,6% Sonae SR -2,1% 0,0% Sonae RP 89,4% 92.4% Investment Management 02% 66% CAPITAL EMPLOYED Breakdown of invested cap
Slide 6: Corporate Strategy
1. SONAE OVERVIEW Corporate Strategy VALUE CREATION THROUGH INTERNATIONAL EXPANSION AND THE STRENGTHENING ON THE CORE BUSINESSES >) CORPORATE STRATEGIC PILLARS INTERNATIONAL DIVERSIFY LEVERAGE EXPANSION INVESTMENT STYLE EXCEPTIONAL ASSETS AND COMPETENCIES * NEW GROWTH AVENUES + ADOPT THE MOST APPROP
Slide 7: Strategy reflected in each retail business
1. SONAE OVERVIEW Strategy CORPORATE STRATEGY REFLECTED IN EACH RETAIL BUSINESS STRATEGY SONAE MC FOCUS ON LEADERSHIP AND PROFITABILITY + Consolidate market leadership + Grow convenience channel + Explore new adjacent business opportunities . Continue to implement efficiency projects + Look for inte
Slide 8: 2. Operational Review
Slide 9: Strengthening of leading position in food retail market
STRENGHENING OF LEADING POSITION IN FOOD RETAIL MARKET, WHILE PROTECTING PROFITABILITY
Slide 10: A Leading Brand in Portugal
2. OPERATIONAL REVIEW - SONAE MC A LEADING BRAND INPORTUGAL CONTINENTE Considered over the last 11 years, one of the most trusted brands in Portugal by consumers (survey “Trusted brands” carried out by Reader's Digest) —~ EXPOSURE TO DIVERSE FOOD FORMATS SINGLE BRANDING OF SONAE MC STORES UNDER “CON
Slide 11: Retail Area
2. OPERATIONAL REVIEW - SONAE MC Retail Area 613,000 M2 SONAE MC RETAIL SPACE BY FORMAT (FY13) OF RETAIL SPACE, STORES (total=465) ‘000 M? (total=583 thousand) DISTRIBUTED 1 285 BETWEEN HYPERS 235 AND SUPERS 18 40 36 35 28 * Mainly parapharmacy i || and coffee shops Continente —C. Modelo C.Bom Dia O
Slide 12: Market Share Growth
2. OPERATIONAL REVIEW - SONAE MC Market Share Growth REINFORCEMENT OF LEADERSHIP IN THE PORTUGUESE FOOD RETAIL MARKET FOOD RETAIL MARKET SHARES - FY13 CONTINENTE Sonae MC 2ndPlayer 3rd Player 4th Player Sth Player Source: Homescan Nielsen, cumulative YTD evolution - 29 December2013 6th Player INCREA
Slide 13: Market share evolution 2007-2013
95% 90% 85% 80% 75% 2007 2008 2009 2010 2011 2012 2013
Slide 14: Online and adjacent offerings
>15% Orthopedy Contact Lenses Supplements annual growth ~500.000 deliveries/year ~30.000 SKUs Mattresses Tickets ~550.000 Registered users >50.000 Buying users/year School Books >100 M Pageviews/year
Slide 15: Sales area and performance by quarter
• • 70 • (total of ≈ 14k m2 sales area) 53 40 31 25 21 16 12 • 9 FY11 1Q12 1H12 9M12 FY12 1Q13 1H13 9M13 FY13 •
Slide 16: New adjacent business opportunities
2. OPERATIONAL REVIEW - SONAE MC New adjacent business opportunities LEVERAGE ON KNOW-HOW Wella IN RETAIL Coffe shops and small Health and well-being snack-bars + Tipically next to Sonae MC : Parapharmacu,t beauty supers products, health + Variety and quality with a fast and well-being care service
Slide 17: Private Label
2. OPERATIONAL REVIEW - SONAE MC Private Exported to Cap Verde, Timor and Thailand Label PERFORMANCE # OWN REFERENCES AND % FMCG SALES REFLECTS THE STRONG OWNLABEL PROGRAMME IS MANAGED INTERNALLY AND CONTINUOUS 3,600 ANDNOW COMPRISES MOST PRODUCT CATEGORIES INVESTMENT 3400 ee INPRIVATELABEL 300 INVE
Slide 18: Profitable growth
2. OPERATIONAL REVIEW - SONAE MC Profitable growth GROWING MARKET SHARE, WHILE REINFORCING REFERENCE PROFITABILITY CONTINENTE SALESONA “LfL" BASIS INFY13 ABOVE MARKET (+1.4%) Benefiting from an improved value offer and supported by the strategy of havinga high variaty of products, particularly helpf
Slide 19: International market outlook
• • • • • • • • • • (*) Source: IMF – World Economic Outlook and World Bank
Slide 20: International expansion and consolidation of market leadership in Portugal
4 i \ G iss) INTERNATIONAL EXPANSION AND CONSOLIDATION OF MARKET LEADERSHIP INPORTUGAL
Slide 21: Sonae SR store network
183 128 700 44 84 1.912 78 65 832 34 40 1.174 113 56 500 9 4 402 3 1 254 38 12 328 40 12 308 10 3 312 6 1 177 3 1 203 18 4 227 412 262 127 140 40 10
Slide 22: Worten, Sport Zone, MO, Zippy stores
Worten 183 Sport Zone 78 MO 113 zippy 38 Worten Spain 44 Sport Zone Spain 34 MO Spain 9 MO Malta 3 Zippy Spain 40 Zippy others 37
Slide 23: International Expansion
2. OPERATIONAL REVIEW - SR International Expansion INTERNATIONALI- JOINT-VENTURES FRANCHISING ZATION MOSTLY CONTRACTS BASED ON NEW Worten Canary Islands = Zippy Canary Islands EXPANSION MODELS: SportZone Canary Islands Zippy Middle East JOINT-VENTURES MO Canary Islands Zippy Latin America AND FRANCH
Slide 24: Active management of retail real estate assets
2. OPERATIONAL REVIEW ACTIVE MANAGEMENT OF RETAIL REAL ESTATE : ASSETS 24
Slide 25: Peer comparison
COLR MRW TSCO SBRY CARB MEO CASP JMT AHLN DELB DIDA OCDO KGF MKS HOME DRTY NTX DEB HM ITX ASC DXNS HFD
Slide 26: Assets Portfolio
2. OPERATIONAL REVIEW - RP Assets Portfolio FOCUSED ON THE MANAGEMENT AND ENHANCEMENT OF RETAIL REAL ESTATE ASSETS IN SUPPORT OF CORE BUSINESSES INVESTED CAPITAL (FY13) 1.3 billion Euros (Net book value) ™Sonae MC mSonae SR BLogistics and Offices Third Parties (commercial galleries) Expansion HYPERM
Slide 27: 3. Core Partnerships
4. CORE PARTNERSHIPS SONAE SIERRA (Shopping Centres) 50% ownership - Equity Consolidated SONAECOM / ZON OPTIMUS (elecomsy) 89% ownership - Equity Consolidated iN AN
Slide 28: Sonae Sierra geographic breakdown
Italy 6% Germany 15% Portugal Spain 45% 10% Brazil 24% • • •
Slide 29: Sonae Sierra Growth Avenues
3. CORE PARTNERSHIPS - SONAE SIERRA Growth Avenues GROW IN EMERGENT MARKETS AND SERVICES BUSINESS IPO of Sonae Sierra Brazil completed during 2011: ~33% of share capital, raising equity for future developments in the region GROW IN PROMISING MARKETS: * Focus on controlling dominant shopping centres
Slide 30: Sonaecom / ZON OPTIMUS Value Creation
3. CORE PARTNERSHIPS - SONAECOM 'ZON OPTIMUS: Value CONSOLIDATION UNLOCKS A SIGNIFICANT Creation VALUE CREATION *On 20 February 2014: Following Sonaecom’s voluntary tender offer for the acquisition of own shares (price equivalent to €2.45 per Sonaecom share, to be composed of ZON OPTIMUS shares with
Slide 31: 4. Recent Financial Performance
Slide 32: Overview
4.RECENT FINANCIAL PERFORMANCE Overview Turnover sustained by Efficiency gains allowing for market share gains increased operational profitability KEY FINANCIALS 2013 TURNOVER UNDERLYING EBITDA UNDERLYING EBITDA Mg. NETDEBT 4.82bn 378m 78% — -597 Moy ) ho) * Includes the deconsolidation of approx. 4
Slide 33: Turnover
4. RECENT FINANCIAL PERFORMANCE Turnover DESPITE THE SHARP. THANKS TO MARKET SHARE GAINS DECLINE IN PRIVATE CONSUMPTION FELT IN IBERIA CONSOLIDATED TURNOVER TURNOVER PER BUSINESS CONSOLIDATED Mlonues TURNOVER GREW 4670 4.821 2012 2013 Var. + SONAE 4.670 4821 3% TO €4.82 Bn In 2013 SONAE MC 3.281 3.4
Slide 34: EBITDA
4.RECENT FINANCIAL PERFORMANCE Ebitda IN A DIFFICULT _.. SUPPORTED BY THE IMPLEMENTATION OF OPERATIONAL MACRO EFFICIENCY PROGRAMMES ENVIRONMENT, ee GROUP'’S UNDERLYING EBITDA UNDERLYING EBITDA RECURRENT EBITDA GROWS 578 BY 0.8pp AGAINST = ewe FY12 SONAE MC 250 258 3% SONAE SR -25 is} SONAE RP. 107 1
Slide 35: Capital Structure
4. RECENT FINANCIAL PERFORMANCE Capital Structure FINANCIAL NET DEBT 1,214 ME with refinancing needs secured until 2015 LTE spectrum payment by Sonaecom: 83 ME Deconsolidation of Optimus: 430ME_ 1214 1qil 2qil 3qll 4ql1 1ql2 2qi2. 3Ql2.4qgi2-—s 1013 2013, 3Q13) 4Q13 17 consecutive quarters of debt r
Slide 36: Capital Structure
4.RECENT FINANCIAL PERFORMANCE Capital Structure RETAIL HOLDING CNA UATE NET DEBT/REC. EBITDA LOAN-TO-VALUE() STRUCTURE IN EACH BUSINESS ~s 31 ta TO SUPPORT *g 28 oy of 2s {18% % — x 17% ACTIVITIES AND 0 INVESTMENTS (10% | FY 1012) 1Hl2 9Ml2) FY12 1013 1H13) -9M13_—FY13 FY11 1Q12 1Hl2 9M12 FY12 1Q13
Slide 37: Shareholder Remuneration
4.RECENT FINANCIAL PERFORMANCE Shareholder Remuneration DIVIDEND PAYER The resilience of the cash flows generated gives confidence ONAREGULAR © onthe ability to maintain shareholder remuneration policy BASIS 0 0 OBJECTIVE 3.48 cents 5.3% 46% TO MAINTAIN DIVIDEND PER DIVIDEND YIELD ~— PAY-OUT RATIO A
Slide 38: Valuation
4.RECENT FINANCIAL PERFORMANCE Valuation DESPITE POSITIVE PERFORMANCE IN 2013, STILL SIGNIFICANT DISCOUNT VS “SUM- OF-THE-PARTS"” VALUATION Material share price over performance during 2013 +52.7% €2.1bn €0.55 2013 FY share price SONAEMCEVbased Market value of Core appreciation on European food Part
Slide 39: Conclusion
CONCLUSION AN ATTRACTIVE INVESTMENT OPPORTUNITY Growing leading market positions in Portugal, while protecting operational profitability An internationalisation strategy based on a “capital light” approach, enabling future growth and value creation Significant deleveraging made possible by organic c
Slide 40: Contacts
INVESTOR PRESENTATION March 2014 CONTACTS: Patricia Vieira Pinto Investor Relations Officer investor.relations@sonae.pt Tel: + 35122 010 4794 www.sonae.pt SONAE is listed on the Euronext Stock Exchange. Information may also be accessed on Reuters under the symbol SONP.IN and on Bloomberg under the s