Corporate Presentation March 2015
InRetail overview Multi-format retailer with exclusive focus in Peru Leading positions in its 3 segments: #2 supermarket chain #1 pharmacy chain #1 shopping center operator Controlled by Intercorp Peru, one of Peru’s largest business groups 2
InRetail is part of the retail arm of one of Peru’s leading business groups Market cap 1 : ~US$3.2bn Market cap 1 : ~US$1.5bn IPO entity 1 As of March 17, 2015 Note: Selected companies 3
InRetail at a Glance Supermarkets Pharmacies Shopping Malls 2014 (S/. millions) 3,757 2,086 349 6,147 Revenues % of Revenues 60.7% 33.7% 5.6% 232 185 202 604 Adjusted EBITDA % of Adj. EBITDA 37.4% 29.9% 32.7% 20 1 # Stores / S.Centers 101 837 269,718 sqm 607,120 sqm 2 Sales area / GLA N/A # Employees 14,598 10,697 435 1. Includes 3 managed properties 2. 553,431 sqm excluding managed properties 4
Key Investment Highlights 1 1 Presence in a Highly Attractive Market Clear and Consistent Growth Strategy 3 2 Market Leadership Across Formats 2 3 Strong Financial Results 4 4 5
1 Fastest growing economy boosts emerging middle class Real GDP Growth Population by socio-economic category (2008-2014 CAGR) % of total population ~1.8x Annual 5.6% SEC 2003 2013 Income 3.1% % of total population $ 45,962 A 5% 11% Peru Latin America¹ $ 22,852 B 1 Average Real GDP growth of Colombia, Brazil, Chile, Mexico +14% Source: Peruvian Central Bank and IMF 15% C $ 14,455 23% GDP per capita (2014, US$ 000) 29% 27% $ 8,777 Average: D 14.9 12.8 US$ 10.8 11.1 10.8 -14% 8.4 6.6 $ 6,163 E 51% 38% Source: Ipsos-Apoyo, 2013 Chile Argentina Mexico Brazil Colombia Peru Source: IMF. 6
1 Significant upside potential for modern retail Supermarkets Pharmacies Shopping Centers Sales area per capita - m 2 /1,000 inhabitants Sales of Retail Pharma per capita - US$ Malls per million people (2013) (2014) (2014) 226 5.2 67 Median ex-Peru: 122 Median ex-Peru: 3.9 130 4.1 113 3.6 ~2.3x 44 Median ex-Peru: 38 3.0 90 ~1.8x 33 2.1 ~1.7x 54 23 19 Peru Peru Colombia Mexico Brazil Brazil Colombia Mexico Chile Peru Brazil Colombia Chile Mexico Chile Source: Businessmonitor. Source: Businessmonitor. Source: ACCEP & INEI. 7
2 Proven track record of profitable growth Revenues 349 Million Soles (S/. mm) 2,086 SPSA TURNAROUND PERIOD 3,757 2004 2005 2006 2007 2008 2009 2010 2011 2013 2014 2012 Inauguration of Initial Public Partnership with SPSA and Aggressive Acquisition of Expansion into our flagship mall Offering Tarjeta Oh! Interbank launch expansion of InkaFarma provinces Salaverry malls and USD $460 MM the Vea Visa Inkafarma opens credit card supermarkets in Plaza Vea International SPSA launches bond placement Vivanda and International Plaza Vea Super bond placement formats First power center is launched International bond placement First mall International outside Lima bond placement (Chiclayo) 8
2 Supermarkets segment overview Overview Formats #2 largest supermarket chain Sales area # of stores US$ 1.3bn Brands #1 supermarket brand range (m 2 ) Total / Provinces Revenues Compact formats provide flexibility to grow 17 secured locations First to enter in 16 out of the 21 cities outside Lima where there’s a modern supermarket present Ranked 8 th among the best places to work in Peru 1/ Compact 2,000 – 5,000 61 / 25 Hypermarkets Market share evolution (79%) % of sales Cencosud SPSA Tottus 60% Supermarkets 52% 500 – 2,000 29 / 6 (14%) 44% 44% 40% 39% 30% 33% 31% 27% 34% 34% High-end 900 – 1,200 8 / 0 27% 25% 26% (7%) 23% 18% 13% Other (0%) 700 – 2,000 3 / 0 Other 2005 2008 2011 2012 2013 2014 Note: Figures as of December 2014. Source: Nielsen. Plaza Vea Super includes Plaza Vea Express 9 1/ Within the category of more than 1,000 employees in 2014.
2 Pharmacies segment overview Overview Pharmaceutical retail market #1 pharmacy chain Annual Modern Total # of Player sales per Market Market Largest and nationwide pharmacy footprint Stores store US$1.2bn US$2.1bn “Every day low price” strategy supported on: Increasing bargaining power with suppliers Highly profitable portfolio of private labels “Love brand” Mom & 41% ~7,000 ~ US$ 0.1mm Pops Successful business model Stores Other Small, standardized formats (120 m 2 ) 47% 28% 1,456 ~ US$ 0.5mm chains Low capex 100% leased stores with proven renewal track record Operations Assisted sales 53% 32% 837 US$ 0.9mm Incentives bonus for overall and private label sales Lower costs based on volume and efficiencies Note: figures as of December 2014. Source: IMS. 10
2 Shopping Centers segment overview Overview Average monthly visitors Million visitors #1 shopping center operator under Real Plaza brand Nationwide premium portfolio of 20 locations totaling 590k sqm of GLA 1/ 11.3 Preferred partner for retailers (~94% occupancy) Secured landbank to sustain growth Secured Growth Median ex-Real Plaza: 4.4 5.6 Contribution from the GLA added during 2014 is not fully reflected in our results 4.5 4.2 Inaugurated Real Plaza Salaverry with 73k sqm in May 2024 2.5 Acquired Real Plaza Centro Civico with 41k sqm in August 2014 Expanded our malls throughout the year, adding 41k sqm Source: ACCEP 2013. 10.3mm visitors as of May 2014. 8k sqm of expansion under construction as of 1/ Includes 2.5mm visitors from the shopping centers owned by third parties. 11 December 2014 to be opened in 2014
2 Quarterly Openings and SSS by Segment Openings Same Store Sales Supermarkets Supermarkets 270 5.2% 4.9% 4.8% 261 Sales Area (‘000 sqm) 253 249 249 228 227 227 2.6% 2.4% 2.1% Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 N ° Stores 88 88 90 98 98 98 100 101 -0.7% Pharmacies 837 -2.1% N ° Stores 787 754 731 725 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 675 636 610 10.8% Pharmacies 9.3% 8.2% Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 6.9% 553 5.9% Shopping Malls 542 499 GLA (‘000 sqm) 425 4.0% 399 336 319 297 0.4% -1.1% Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 12 N ° Malls 13 13 13 15 15 16 17 17
3 Leading positions and highly recognized brands in all business segments Supermarkets (% of sales) Pharmacies (% of sales) Shopping Centers (% of GLA) 2 nd 1 st 1 st Others 13% 27% 34% 20% 53% Others 54% 12% 13% 21% 13% 39% Plaza Vea is the most remembered InkaFarma is the brand that more Real Plaza is the shopping center brand among supermarkets Peruvians aspire to consume operator with more monthly visitors Source: Company filings. Source: IMS, InkaFarma estimates. Brand awareness - Arellano Source: Asociación de los Centros Comerciales del Perú (ACCEP). Brand awareness - IPSOS 2013. Marketing 2011. Note: Market figures refer to modern channel as of 2013. Note: Source Nielsen, market figures refer to modern channel as Note: Market figures refer to modern channel as of December of 2014 2014. 13
3 Largest nationwide footprint of premier retail locations Supermarkets Pharmacies Shopping Centers (7) (29) (5) Sullana (2) Talara Piura (2) (47) Cajamarca Piura (3) (28) Cajamarca Chiclayo Chiclayo (38) (21) Trujillo (5) Trujillo Pucallpa (56) (14) Chimbote Huánuco Chimbote (3) Huanuco (27) Pucallpa (16) (5) Lima Provincias (1) (363) Huancayo (2) Lima (8) (38) Huancayo Lima (70) (4) Cusco(2) (2) Cusco (17) (37) (3) Chincha Juliaca Juliaca (14) Pisco (10) Ica Arequipa (39) Puno Arequipa (2) (6) 17 secured locations (11) Tacna Total stores: 101 Total stores: 837 Total sites: 20 Total sales area (m 2 ): 269,718 Total GLA (m 2 ): 589,688 Note: As of December 2014. 14
4 2014 Consolidated Highlights 2013 Consolidated Results Million Soles (S/. mm) Million Soles (S/. mm) Full Year 2014 Highlights Revenues Double digit growth in Revenues, Adj. EBITDA, and Net Income vs. 2013 6,147 5,322 New corporate structure allowing its segments to have independent capital structures and more transparency Refinanced debt to reduce cost of debt (US$ 12 mm in annual savings from lower interest expenses) 1,738 1,492 Increase in fair value of investment properties of S/. 138.4 mm and exchange loss of S/.114.5 mm Increase in EPS from S/. 0.6 to S/. 1.1 Q4'13 Q4'14 2013 2014 Adj. EBITDA Net Income 113 604 475 66 63 202 160 21 Q4'13 Q4'14 2013 2014 Q4'13 Q4'14 2013 2014 15 Margin 10.7% 11.6% 8.9% 9.8% Margin 4.4% 1.2% 1.2% 1.8%
4 Financial Results by Segment Million Soles (S/. mm) InRetail Consumer InRetail Shopping Malls Supermarkets Pharmacies Revenues Revenues 349 5,833 5,142 36% 215 35% 110 1,633 1,439 64% 65% 63 33% 34% 67% 66% Q4'13 Q4'14 2013 2014 Q4'13 Q4'14 2013 2014 Adj. EBITDA Adj. EBITDA 415 364 202 44% 42% 115 133 123 68 56% 36% 58% 34% 38 64% 66% Q4'13 Q4'14 2013 2014 Q4'13 Q4'14 2013 2014 Net Rental Margin 82.9% 16 Margin 82.4% 75.9% 80.2% 8.5% 8.2% 7.1% 7.1%
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