August 2019
Q2 ’19 1 CONSOLIDATED RESULTS RESULTS BY 2 SEGMENT OTHER FINANCIAL 3 RESUL TS IFRS 16 BRIDGE AND 4 RECONCILIATION
1 Q2’19 CONSOLIDATED RESULTS
Q2’19 CONSOLIDATED FINANCIAL RESULTS Million Soles (S/ mm) Highlights Revenues Low single-digit growth in Revenues mainly explained by a contraction in the MDM unit of our Pharma segment, despite 6,405 5,805 the solid Revenues growth in Food Retail and Shopping Malls +2.0% Solid growth in Adjusted EBITDA in our three segments 3,156 3,095 Consolidated Gross Margin, Adjusted EBITDA and Net Income margin expansions due to good operating performance and Q2’18 Q2’19 YTD’18 YTD’19 absence of one-time expenses incurred in Q2 ’ 18 Gross 28.4% 30.0% 28.6% 29.6% Margin Adj. EBITDA (Pre-IFRS 16) 1/ Net Income (Pre-IFRS 16) 1/ 645 221 498 +631% +18.9% 110 324 272 15 Q2’18 Q2’19 YTD’18 YTD’19 -6 Q2’18 Q2’19 YTD’18 YTD’19 Margin 8.8% 10.3% 8.6% 10.1% Margin 0.5% 3.5% -0.1% 3.4% Note: YTD’18 consolidated figures include five months of Quicorp’s operation and one-time expenses related to the acquisition. 1/ Adj. EBITDA excludes mark-to-market gains from valuation of investment properties of Food Retail and Shopping Malls segments and IFRS 16 effect. Net Income excludes IFRS 16 effect. 4
LTM Q2’19 FINANCIAL AND OPERATIONAL SNAPSHOT Million Soles (S/ mm) Food Shopping Pharma Retail Malls 1/ + + = LTM Q2’19 figures (S/ mm; %) Revenues 5,487 6,939 519 12,847 % Revenues Contribution 42% 54% 4% Adj. EBITDA (Pre-IFRS 16) 2/ 368 656 314 1,330 % EBITDA Contribution 27% 49% 24% Adj. EBITDA Margin 6.7% 9.4% 78.9% 10.4% (Pre-IFRS 16) 3/ _ Market Position 1 st 1 st 1 st # of Stores 477 2,061 21 _ # of Employees 16,254 21,287 435 37,976 1/ Consolidated figures for InRetail include intercompany eliminations and consolidation adjustments. 2/ Adj. EBITDA excludes mark-to-market gains from valuation of investment properties in the Food Retail and Shopping Malls segments and IFRS 16 effect. 3/ InRetail Shopping Malls’ Adjusted EBITDA margin is represented here as our Net Rental Margin, calculat ed as Adj. EBITDA 5 (Pre-IFRS 16) /Net Rental Income.
2 RESULTS BY SEGMENT
FOOD RETAIL S/ mm Q2'19 Q2'18 Var % Revenues 1,360 1,223 11.2% Gross Profit 364 318 14.6% Adj. EBITDA 1/ (Pre-IFRS 16) 88 76 15.6% Gross Mg 26.8% 26.0% 80 bps Adj. EBITDA Mg 1/ 6.4% 6.2% 25 bps (Pre-IFRS 16) Net opening of 39k sqm (+11.7%) of sales area since Q2 ’ 18, excluding temporal closings of Cusco, Sullana and Zarate. 21 net Mass stores opened (+3.4k sqm) in Q2 ’ 19 SSS growth of 4.1% in Q2 ’ 19, despite high comparison basis of Q2 ’ 18 due to Peru’s participation in the FIFA World Cup Gross margin increased 80 bps in Q2 ’ 19, mainly due to lower weight of electronic categories of lower margins in the product mix, and higher rebates from higher sales volumes Adjusted EBITDA margin of 6.4% in Q2 ’ 19 % Revenues per format (Q2’19) 2/ 85% 5% 7% 3% 1/ Adjusted EBITDA excludes mark-to-market gains from valuation of investment properties and excludes IFRS 16 effect. 2/ Includes Mimarket sales. 7
PHARMA Pharmacies 1/ MDM 1/ Total S/ mm Q2'19 Var % Q2'19 Var % Q2'19 Q2'18 Var % Revenues 1,231 1.2% 637 -11.4% 1,688 1,777 -5.0% Gross Profit 426 10.9% 87 -25.9% 511 490 4.2% Adj. EBITDA 2/ (Pre-IFRS 16) 131 21.7% 26 2.6% 161 126 28.0% Gross Mg 34.6% 31.5% 13.7% 16.4% 30.3% 27.6% 268 bps Adj. EBITDA Mg 2/ 10.7% 8.9% 4.0% 3.5% 9.5% 7.1% 246 bps (Pre-IFRS 16) Pharmacies Top line growth of 1.2% impacted by the closing of ~100 stores throughout Q2 ’ 18, as part of the synergies plan related to the acquisition of Quicorp SSS growth of 2.3% in Q2 ’ 19 Gross margin of 34.6%, 303 bps above Q2 ’ 18 Adjusted EBITDA margin of 10.7% MDM Lower revenues due to fine tuning of distribution business to focus on more profitable pharma lines Gross margin of 13.7% in Q2 ’ 19, which considers reclassification of logistic expenses related to the distribution of products, from operating expenses to cost of goods sold, implemented in Q4 ’ 18 as per IFRS 15 Adjusted EBITDA margin of 4.0% in Q2 ’ 19, above Q2 ’ 18 1/ Pharmacies refers to the retail pharma unit which operates mainly Inkafarma and Mifarma stores. MDM refers to the Manufacturing, Distribution and Marketing unit. Segment breakdown considers management figures. 8 2/ Adj. EBITDA excludes IFRS 16 effect.
SHOPPING MALLS S/ mm Q2'19 Q2'18 Var % Revenues 130 124 5.1% Gross Profit 87 83 4.8% Adj. EBITDA 1/ (Pre-IFRS 16) 78 74 4.7% Gross Mg 66.8% 67.0% -19 bps Net Rental Mg 2/ 78.0% 79.0% -95 bps (Pre-IFRS 16) Revenue growth of 5.1% in Q2 ’ 19, with tenant SSS growth of 2.9%, which was impacted by lower sales growth from anchor tenants due to the high comparison basis of Q2 ’ 18 in the context of Peru’s participation in the FIFA World Cup Maintained high occupancy rates in malls of ~96% in Q2 ’ 19 Net Rental Margin of 78.0%, lower than Q2 ’ 18 due to higher property taxes, and increased insurance and security expenses Mark-to-market 1/ gain of S/3.8 mm in Q2 ’ 19 vs S/5.5 mm in Q2 ’ 18 Puruchuco mall construction as of Jul’19. View from Javier Prado Avenue 1/ Adjusted EBITDA excludes mark-to-market gains from valuation of investment properties and excludes IFRS 16 effect. 2/ Net Rental Margin is calculated as Adj. EBITDA Pre-IFRS 16/Net Rental Income. Net Rental Income is defined as total income 9 minus reimbursable operating costs related to the maintenance and management of Shopping Malls.
QUARTERLY OPENINGS AND SSS BY SEGMENT Openings Same Store Sales (SSS) Food Retail Food Retail 2018: 7.9% Sales Area (‘000 sqm) YTD: 6.8% 375 372 361 10.2% 335 9.5% 324 9.1% 53 56 47 43 7.8% 36 23 23 Mass 4.1% 296 296 296 Economax 287 288 Spmkts Q2’18 Q3’18 Q4’18 Q1’19 Q2’19 Q2’18 Q3’18 Q4’18 Q1’19 Q2’19 N o Spmkts 104 104 106 106 106 N o Economax - 1 4 5 5 N o Mass 208 247 285 326 347 2018 : 5.3% Pharmacies Pharmacies YTD: 4.3% N o Stores 2,087 2,068 2,063 2,062 2,061 7.4% 6.3% 1,006 986 980 983 981 4.7% 4.8% Mifarma 2.3% Inkafarma 1,081 1,082 1,083 1,079 1,080 Q2’18 Q3’18 Q4’18 Q1’19 Q2’19 Q2’18 Q3’18 Q4’18 Q1’19 Q2’19 Shopping Malls Shopping Malls 1/ 2018 : 5.7% GLA (‘000 sqm) YTD: 4.0% 671 671 676 676 676 5.8% 5.3% 5.1% 5.0% 2.9% Q2’18 Q3’18 Q4’18 Q1’19 Q2’19 Q2’18 Q3’18 Q4’18 Q1’19 Q2’19 N o malls 21 21 21 21 21 1/ Shopping Malls’ tenant SSS include anchor stores. 10
3 OTHER FINANCIAL RESULTS
CONSOLIDATED NET INCOME Million Soles (S/ mm) Net Income (Pre-IFRS 16) 1/ Net Income Breakdown (Pre-IFRS 16) 1/ 221 -12 23 -6 +631% -39 78 110 110 51 15 15 Net EBITDA Lower Net Lower Net FX Higher Higher Net -6 Income Growth Financial Mark to Effect D&A Taxes Income Q2’18 Q2’19 YTD’18 YTD’19 Q2’18 Expenses Market Q2’19 Margin 0.5% 3.5% -0.1% 3.4% Net Income excluding one-time financial expenses, FX and mark-to-market 2/ (Pre-IFRS 16) 211 173 +11.1% 104 94 Q2’18 Q2’19 YTD’18 YTD’19 Margin 3.0% 3.3% 3.0% 3.3% 1/ Net Income excludes IFRS 16 effect. 2/ Net Income adjusted for (i) one-time financial expenses related to the acquisition of Quicorp and associated liability management of S/102 mm in Q1’18 and S/73 mm in Q2’18, (ii) FX loss/gain , (iii) mark-to-market income from the valuation of investment properties and (iv) IFRS 16 effect. 12
CAPEX AND CASH-FLOW BREAKDOWN Million Soles (S/ mm) Consolidated CAPEX Cash-Flow Breakdown 2018: S/998 mm 2019: S/336 mm 1/ 335 -336 501 45 -204 243 180 643 223 196 -127 183 152 -113 409 155 Q1’18 Q2’18 Q3’18 Q4’18 Q1’19 Q2’19 Starting Operating CAPEX Financial Financial Dividend Other Non- Ending Cash Cash Flow Debt and Expenses Distribution Operating Cash Balance Lease Investing Balance 2019 Liability Activities Q2’2019 1 / Q1’18 CAPEX includes ~S/180 mm of the acquisition of Real Plaza Pucallpa and Estación Central.. 13
CONSOLIDATED FINANCIAL DEBT Million Soles (S/ mm) Consolidated Financial Debt 1/ USD Exposure Net Debt/Adj. EBITDA Debt/Adj. EBITDA 4.8x 4.0x 4.0x 4.0x 3.9x 3.6x 39% 40% 42% 4.3x 47% 49% 3.3x 3.3x 3.6x 3.5x 3.5x 3.4x 3.2x 2.8x 2% 23% 3% 22% 2.5x 23% 51% 48% 38% 38% 35% 2014 2015 2016 2017 LTM 2018 LTM LTM Dec-15 Dec-16 Dec-17 Dec-18 Jun-19 Q1’18 PF Q1’19 Q2’19 Hedge USD PEN Quicorp acquisition Debt 2,446 2,670 2,659 2,704 5,089 5,069 5,187 5,181 2/ InRetail Peru distributed a US$ 35mm Cash 285 325 432 599 497 671 700 575 dividend in Q2’19 Net 2,160 2,344 2,227 2,105 4,592 4,398 4,487 4,606 Debt 1/ Periods of 2018 consider a normalized Adj. EBITDA, which includes LTM Adj. EBITDA for Quicorp and excludes one-time expenses related to the acquisition of Quicorp. Includes cash equivalents as cash. Since 2015, ratios are adjusted for currency hedge effect. Adj. EBITDA excludes IFRS 16 effect. 2/ Cash includes S/33.5 mm and S/83.8 mm of short term loans from SPSA and InRetail 14 Pharma to a related party, which were repaid on August 14th, 2019.
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