EARNINGS PRESENTATION Q415 March 2016 2015 1 highlights 2015 - PowerPoint PPT Presentation

EARNINGS PRESENTATION Q4’15 March 2016

2015 1 highlights 2015 financial 2 results investments 3 2016-2018 2

1 2015 highlights 3

CONSISTENT GROWTH  +19k sqm of new sales area 5 new supermarkets, totaling 106 stores   2 store expansions • 101 new pharmacies  46 in Lima and 55 in Provinces, totaling 921 pharmacies  +29k sqm of additional GLA  Acquisition of Real Plaza Sullana  7 mall expansions 4

Refurbished and improved layouts of 10 supermarkets New logo and store facades Improved lighting New layout and signage Improved in-store look and feel Shelf-ready packaging Increased sales area After Before 5

Innovative promotions and campaigns Increase in Revenues +8.5% 4,077 3,757 2014 2015 Gross Profit Margin Improvement +49 bps 26.1% 25.6% 2014 2015 6

piloting new discount format Piloting a low CAPEX, low cost, every day low price format to capture untapped demand and penetrate traditional trade 19 stores between 100 and 300 sqm in Lima Testing value proposition (assortment, price, store size, etc.) Ensuring cost structure through store productivity and efficient supply chain Deployed CAPEX of approximate US$2 mm for pilot 7

Supply chain efficiencies Reduced logistic expenses over sales Inventory Days -7.3 bps 110 100 90 0 Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15 Q3’15 Q4’15 2014 2015  Enhanced distribution center productivity  New software to manage store inventory  Transfer center in Arequipa converted to new Distribution Center  2H15 preemptive inventory increase due to El Niño effect 3,500 m2 8

Great place to work The Best Companies The Best Companies The Best Companies #5 #5 #11 to Work for to Work for to Work for - 251 to >1,000 employees >1,000 employees 1,000 employees 9

2 2015 Financial results 10

2015 consolidated financial results Million Soles (S/. mm) Highlights 2015 Revenues 10.6% • Double digit growth in Revenues, Adj. EBITDA, and Net 6,798 Income vs. 2014 6,147 • Reduced debt exposure to USD: 23% vs. 72% in 2014 7.4% • Mark to-market gain of S/33 mm and net exchange loss of S/169 mm 1,868 1,738 • Increase in EPS from S/1.1 in 2014 to S/.1.4 in 2015 Q4’14 Q4’15 2014 2015 Adj. EBITDA Net Income 19.9% 27.3% 724 144 362.1% 604 113 99 8.4% 219 202 21 Q4’14 Q4’15 2014 2015 Q4’14 Q4’15 2014 2015 Margin 11.6% 11.7% 9.8% 10.7% Margin 1.2% 5.3% 1.8% 2.1% 11

2015 Financial results by segment Million Soles (S/. mm) Revenues Adj. EBITDA 9.8% 10.7% Pharmacies 6,406 459 Supermarkets 5,833 415 36% 44% 36% 44% InRetail 10.9% 7.7% Consumer 148 133 1,759 1,633 64% 64% 56% 36% 56% 36% 35% 33% 64% 65% 64% 67% Q4’14 Q4’15 2014 2015 Q4’14 Q4’15 2014 2015 7.2% Margin: 8.2% 8.4% 7.1% 24.5% 34.6% 435 272 349 202 InRetail 7.5% 7.9% Shopping Malls 118 73 110 68 Q4’14 Q4’15 2014 2015 Q4’14 Q4’15 2014 2015 Net Rental Margin: 82.1% 80.7% 80.2% 82.8% 12

SUPERMARKETS RESULTS BY SEGMENT S/. mm Q4'15 Var % Q4'14 2015 Var % 2014 Revenues 1,149 5.0% 4,077 8.5% Gross Profit 313 10.9% 1,065 10.6% EBITDA 96 12.3% 259 11.8% Gross Mg 27.2% 146 bps 26.1% 49 bps EBITDA Mg 8.3% 54 bps 6.3% 18 bps SSS +1.5% in Q4 ’ 15 and +3.7% in 2015 Gross margin expanded 49 bps • Innovative promotional campaigns • Higher rebates and store opening contributions • Higher rental and logistic revenues • Lower shrinkage due to logistic and operational initiatives EBITDA margin improved 18 bps • Store and logistic efficiencies • Employee and marketing productivity Excluding an extraordinary income in 2014, EBITDA grew 17.3% in 2015, and EBITDA margin improved from 5.9% to 6.3% 13

PHARMACIES RESULTS BY SEGMENT S/. mm Q4'15 Var % Q4'14 2015 Var % 2014 Revenues 613 13.3% 2,339 12.1% Gross Profit 194 14.7% 740 12.9% EBITDA 53 8.5% 202 9.7% Gross Mg 31.7% 41 bps 31.7% 23 bps EBITDA Mg 8.6% -38 bps 8.7% -19 bps SSS growth of 6.4% in Q4 ’ 15 and 5.1% in 2015 Gross margin improved 23 bps • Change in mix of products sold • Reduction in shrinkage Increased penetration of high margin products Excluding an extraordinary income in 2014, EBITDA grew 13.9% in 2015, and EBITDA margin improved from 8.5% to 8.7% in 2015 14

SHOPPING MALLS RESULTS BY SEGMENT S/. mm Q4'15 Var % Q4'14 2015 Var % 2014 Revenues 118 7.5% 435 24.5% Gross Profit 80 5.8% 301 30.1% Adj. EBITDA 73 7.9% 272 34.6% Gross Mg 68.1% -111 bps 69.1% 295 bps Net Rental Mg 80.7% -141 bps 82.8% 257 bps Maintained high occupancy rates in malls (~97%) Adjusted EBITDA growth of 34.6% mainly explained by the contribution of Real Plaza Salaverry (+S/27.5 mm), Centro Civico (+S/16.5 mm) and expansions of Huancayo, Guardia Civil and Juliaca Mark-to-market income of S/37.6 mm in 2015 from shopping mall expansions and acquisitions vs S/150.0 mm in 2014 15

Quarterly Openings and SSS by Segment Openings Same Store Sales (SSS) Supermarkets Supermarkets Sales Area (‘000 sqm) 5.6% 288 273 273 274 5.2% 270 261 253 249 4.9% 4.8% 4.3% 4.1% 2.6% Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15 Q3’15 Q4’15 1.5% N o Stores 102 98 98 100 101 102 102 106 Pharmacies N o Stores Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15 Q3’15 Q4’15 921 874 848 837 838 SSS Averages 2013: 0.4% 2014: 4.4% 2015: 3.7% 787 754 731 Pharmacies 10.8% Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15 Q3’15 Q4’15 9.3% 8.2% Shopping Malls GLA (‘000 sqm) 6.4% 6.4% 5.9% 5.7% 581 582 572 558 553 542 499 425 2.1% Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15 Q3’15 Q4’15 Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15 Q3’15 Q4’15 N o Malls SSS Averages 2013: 2.7% 2014: 8.5% 2015: 5.1% 15 16 17 17 17 18 18 18 16

Adjusted ebitda evolution Million Soles (S/. mm) InRetail Consolidated Shopping Malls +7.0% +7.9% 21.0% 54.8% 29.6% 10.6% 39.0% 216 74.4% 202 73 68 67 66 170 170 63 163 160 154 55 131 117 43 110 104 101 38 36 26 26 24 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2013 2014 2015 Supermarkets Pharmacies +12.3% 16.7% +8.5% -0.1% 96 15.9% 85 81 4.2% 53 12.7% 53 52 52 19.2% 49 46 45 43 41 57 39 55 54 36 52 34 48 45 44 42 42 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2013 2014 2015 17

Consolidated Net Income Million Soles (S/. mm) Net Income Breakdown Net Income +27.3% 144 +362.1% 113 82 -106 99 115 144 -5 -143 21 113 89 Q4’14 Q4’15 2014 2015 1.2% Net Margin 5.3% 1.8% 2.1% Net EBITDA Lower Lower Higher Hedge Other Net Income Growth Financial Mark to FX Loss + OMR Income Net Income excluding after-tax FX and mark-to- 2014 Expenses Market Effect 2015 market gains: +148.2% • -27.5% in financial expenses, net, in 2015, explained by a one-time expense in 2014 of S/.97 mm for bond tender 240 premiums Lower mark-to-market gains: • 113 • S/33 mm in 2015 vs. S/138 mm in 2014 97 • S/18 mm in Q4 ’ 15 vs. S/97 mm in Q4 ’ 14 • Additional FX loss, net: • FX loss of S/169 mm in 2015 vs S/115 mm in 2014 -6 • FX loss of S/37 mm in Q4 ’ 15 vs S/58mm in Q4 ’ 14 Q4’14 Q4’15 2014 2015 Net Margin -0.3% 6.0% 1.6% 3.5% 18

CapexAND CASH-FLOW Breakdown Million Soles (S/. mm) Consolidated Capex Cash-Flow Breakdown 2014: S/792 mm 2015: S/510 mm 333 242 -510 787 197 -111 134 114 104 105 -215 285 74 235 Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15 Q3’15 Q4’15 Starting Operating CAPEX Debt Financial Ending Cash Cash Flow Reduction Expenses Cash Balance and Other Balance Free Cash Flow 2015: S/276 mm 19

CONSOLIDATED Financial DebT Million Soles (S/. mm) Consolidated Financial Debt USD Exposure 4.0x 4.0x 3.8x 3.7x 3.6x 3.6x 3.6x 3.6x 3.4x 2.9x 38% 3.4x 3.2x 3.2x 72% 23% 38% 28% 1.3x dic-14 dic-15 Hedge USD PEN 2012 2013 2014 LTM LTM LTM 2015 1/ Q1’15 Q2’15 Q3’15 Net debt / EBITDA Debt / EBITDA • +S/224 mm debt in 2015 vs 2014, explained by: Debt 1,668 1,722 2,446 2,499 2,467 2,599 2,670 -S/111 mm from debt reduction • • +S/235 mm from depreciation of FX Cash 1,125 324 285 302 242 190 325 • +S/91 mm from call spread liability • +S/9 mm from structuring costs and Net interests payable 542 1,398 2,160 2,197 2,225 2,410 2,344 Debt 1/ Ratios consider positive hedge effect of S/57 mm 20

Debt by segment Million Soles (S/. mm) Total Consolidated Debt: S/.2,670 mm Debt / EBITDA: 3.6x Net Debt / EBITDA: 3.2x 3.3x 8.2x 3.2x 3.2x 3.1x 3.1x 3.0x 2.9x 2.9x 2.8x 2.7x 2.6x 3.0x 2.4x 5.5x 5.4x 5.0x 4.5x 4.5x 4.3x 2.0x 4.9x 4.3x 4.7x 4.1x 4.1x 4.1x 0.4x 2012 2013 2014 LTM LTM LTM 2015 1/ 2012 2013 2014 LTM LTM LTM 2015 1/ Q1’15 Q2’15 Q3’15 Q1’15 Q2’15 Q3’15 Net Debt/EBITDA Debt/EBITDA 1,422 Debt 976 1,095 1,347 1,374 1,339 1,456 691 624 1,111 1,139 1,128 1,144 1,248 Cash 306 215 168 148 144 127 202 656 81 124 161 93 66 128 Net 1,078 1,120 670 880 1,179 1,226 1,195 1,329 1,220 35 543 967 977 1,035 Debt 1/ Ratios consider positive hedge effect of S/19 mm for InRetail Consumer and S/38 mm for InRetail Shopping Malls 21

3 Investments 2016-2018 22