CENCOSUD CORPORATE PRESENTATION Second Quarter 2020
About Cencosud Well Established Leading +6.2 MM Square Meters of Retailer in South America landbank fuel future grouth across the region +50 years of history +120K employees 1,107 Retail stores 3.49 MM SQm selling space 67 shopping centers 831 M SQm GLA to third parties in Shopping Centers SHOPPING HOME DEPARTMENT FINANCIAL SUPERMARKETS CENTERS IMPROVEMENT STORES SERVICES CENCOSUD (2004) US$ 4.0 BN Market Cap at June 30 FREE FLOAT: 46.8% Average trading volume 2Q20: US$ 7.31 MM (listed on the Santiago Stock Exchange) CENCOSUD SHOPPING (2019 IPO) Supermarkets FREE FLOAT: 27.7% Cencosud’s DNA Average trading volume 2Q20: US$ 5.93 MM (listed on the Santiago Stock Exchange) 2
Cencosud’s History Acquires 4 SM chains in the region Opens Alto Las Condes Shopping and 2 DS chains. JV in Colombia for JV of FS in Center & 1 st Easy store in Chile Easy development Peru Opens 1 st SM in Chile Acquires SM chain in Brazil. Open Opens Alto Las Condes IPO of Cencosud Open Jumbo Shopping Center & 1 st Easy Costanera Center Shopping Center. Shopping Store in Arg Buy SM in Colombia store in Chile 1963 1982 1993 2004 2007 2012 2018 2019 1970 1988 2002 2003 2005 2008 2010 2014 2020 Launches FS in Chile. Open 2 JV of FS in Chile Shopping Centers in Chile. Starts FS operations in Opens Mall Acquires SM Santa Isabel in Chile Argentina. Acquires HI Unicenter in Arg Closes Paris in Peru and in Arg Paris absorbs Johnson Chile. Cornershop strategic alliance Acquires 2 chains of HI in Acquires 2 chains of Opens Jumbo Acquires DS (Paris) Chile and Argentina SM in Brazil Kennedy in Chile 3
2020 Financial Highlights Tender Offer Closing Paris Peru and Johnson Chile Absorption In March, Cencosud completed the tender offer for all bonds In June, Cencosud reorganized the Department Store business maturing in 2021 and 2023. This transaction was carried out in Peru, by closing 11 Paris stores as of July 1 and in Chile will under the “Make -Whole Redemption” modality at a be either closing or absorbing the Johnson branded stores. redemption price of 103.34% and 109.51%, respectively for a Some of the Johnson stores will be absorbed under the new total amount of US$ 876 million. Simultaneously, it canceled “Paris Express” format, with inventory limited exclusively of the interest accrued on these bonds for a total savings of US$ 5 clothing, footwear, and sports. million. Cornershop Alliance Ordinary Shareholders Meeting In August, Cencosud and Cornershop signed a long-term collaboration agreement for the Supermarkets and Home In April, the Ordinary Shareholders Meeting of Cencosud S.A. was Improvement operations in Chile, Peru, Colombia, and Brazil, held: 1) Two new Board members were elected (Mr. Felipe allowing Cornershop customers to buy in stores no service Larrain y Mr. Stefan Krause); and charge. 2) The shareholders approved a 32 Chilean pesos per share final Uber and Uber Eats will access our products (Rincón Jumbo and dividend for the 2019 period. prepared meals from supermarkets). Change in Cencosud's rating - Fitch Ratings The agreement includes: • The technological integration that offers the best experience; • In July, Fitch Ratings affirmed Cencosud’s BBB - rating BBB- and The investment of US$ 10 MM for Dark Stores to be utilized for picking products changed the outlook to stable. 4
Why Invest in Cencosud? Established presence in largest economies of the region Healthy balance sheet supports growth opportunities Organic growth opportunities in fast developing countries supported by own landbank MAIN CORE ETHICS & SUSTAINABLE VALUES Strong Corporate Governance Further development of the omnichannel strategy Focus on productivity & efficiency initiatives 5
Well Diversified Operations – Contribution By Country 1 Adjusted EBITDA LTM Jun 2020 Revenues LTM Jun 2020 US$1,134 MM US$12,479 MM Adjusted Margin EBITDA : 9.1% 5% 9% 11% 11% 8% 47% 14% 54% 22% 19% 1 For calculation details please go to page 13 247 283 202 93 94 SUPERMARKETS SUPERMARKETS SUPERMARKETS SUPERMARKETS SUPERMARKETS 51 10 37 6 F.S JV WITH BRADESCO HOME IMPROVEMENT HOME IMPROVEMENT HOME IMPROVEMENT SHOPPING CENTERS 22 4 79 F.S: JV WITH SCOTIABANK SHOPPING CENTERS SHOPPING CENTERS DEPARTMENT STORES 35 FINANCIAL SERVICES F.S: JV WITH SCOTIABANK SHOPPING CENTERS F.S: JV WITH SCOTIABANK Close DS in Peru as of July 1 6
Financial Contribution By Business Units 1 Adjusted EBITDA LTM Jun 2020 Revenues LTM Jun 2020 US$1,134 MM US$12,479 MM Adjusted Margin EBITDA : 9.1% 1% US$ 115 MM US$ 1,216 MM 10% 61.6% mg US$ 186 MM 9% US$ 11 MM 1% 0.7% mg 12% US$ 1,453 MM 15% 2% US$ 175 MM 62% 12.0% mg US$ 237 MM US$ 738 MM 13% 8.0% mg 75% US$ 162 MM US$ 9,378 MM 67.7% mg PORTFOLIO OF LEADING BRANDS 1 For calculation details please go to page 13 7
Healthy Financial Structure Relevant News Debt by Currency (after CCS) ● Mar’ 20: Completed the repurchase of 2021 and 2023 bonds under the USD “Make -Whole Redemption” option for a total of US$ 881 MM; 3% USD ● 4% Investment Grade since 2011: ● Fitch Ratings: BBB- (stable); ● Moody’s : Baa3 (negative). ● Average amortization next 5 years of US$ 34 MM; CLP + CLP + ● Cash as of June 30 of US$ 291 MM. UF UF 96% 97% Jun20 Dec19 Gross leverage and financial evolution 1 Debt amortization schedule (US$ MM) 1,011 5.4 5.2 5.3 5.2 5.2 4.3 Gross Financial 5.1 5.1 5.0 5.0 569 5.5 560 Debt 4.1 385 GFD/Adj 193 175 105 usted 58 48 45 30 18 17 13 EBITDA 2015 2016 2017 2018 2019 Jun 20 LTM 20 21 22 23 24 25 26 27 28 29 30 41 44 45 8 1 Does not include One Off of the period
Omni-channel Strategy E-commerce Penetration • Launch of Marketplace; Purchasing COMPANY’S STRATEGY • Improving the offer of unique products; Service Department Home E-commerce Sales Supermarkets • Development of hyper personalization Stores Improvement tools; 2Q20 7.1% 88.9% 12.9% Customer • Ensure guarantee returns; 2Q19 1.9% 20.8% 5.6% Experience • Take advantage of economies of scale; Var 20/19 (bps) 526.0 6,804.0 730.0 • Invest in own technological developments; 2020 4.5% 48.9% 8.3% Cost • Deepen the ability to generate, manage 2019 1.8% 16.8% 4.4% and process data. Effectiveness Var 20/19 (bps) 276.9 3,205.1 393.4 Cornershop Alliance Long-term agreement for Supermarkets and Home Improvement in Chile, Peru, Colombia, and Brazil. • Allows customers to shop at Easy supermarkets and stores with no service charge; • It includes the technological integration that offers the best experience to our E-commerce clients, in the region and developments that improve business efficiency; penetration • Allows Uber and Uber Eats users to buy Rincón Jumbo products and prepared meals in supermarkets through their applications (including Argentina); and reaches • It includes investment in exclusive stores for e-commerce picking (Dark European levels Stores), to continue to provide the best service in physical stores and digital platforms. 9
Productivity & Efficiency Gains Offer services to the other units, reaching functional specialization in high volume transactions: • Evolving towards Global Business Services that is more streamlined and automated with over 180 digital robots Shared already installed to assist with repetitive, time-consuming tasks; • Transformational vision of processes seeking efficiency, regional consistency , and generating operational and Services transactional synergy in activities increasingly closer to the business; • Center Results: recovered of US$ 6.6 MM from accumulated commercial agreements and saved US$ 13 MM from operational improvements in inventory management; • Reduced operating costs by US$ 7.6 MM over the past 4 years. Regional Created a regional purchasing team with the purpose of having: • Procurement Greater availability of products out of season; • Cost savings of 16% with a reduction of US$ 11 MM per month (38% of the savings is permanent); & Private Cencosud is a pioneer in Latam for creating centralized teams for the development and purchase of own brand Label Regional products, Private Label penetration in 2020 is: • Team 17.6% DS / 9.6% Supermarkets / 19.7% Home Improvement The Big Data Analytics department has several projects in development: Big Data • Initiatives that improve the customer experience based on personalized recommendations; • Analytics Price Optimization Projects for inventory management and promoting commercial divisions; and • Operational Efficiency Projects based on advanced analytics algorithms. 10
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