EARNINGS PRESENTATION Fourth Quarter 2019 1
Disclaimer The information contained in this presentation has Cencosud and its respective subsidiaries, directors, been prepared by Cencosud S.A. ("Cencosud") for partners and employees accept any responsibility for informational purposes only and should not be any loss or damage of any kind arising from the use of construed as a request or an offer to buy or sell all or part of this material. securities and should not be construed as This presentation may contain forward-looking investment or other advice. No warranty, expressed statements subject to risks and uncertainties and or implied, is provided regarding the accuracy, factors, which are based on current expectations and completeness, and reliability of the information projections about future events and trends that may contained in this document. The opinions expressed affect Cencosud's business. You are cautioned that in this presentation are subject to change without these prospects are not guarantees of future prior notice and Cencosud has no obligation to performance. There are several factors that may update or keep updated the information contained adversely affect the estimates and assumptions in this document. The information in this document underlying these forward-looking statements, many is not intended to be complete. of which are beyond our control. 2
Strong Financial Position and Executing on Strategic Pillars 3
Financial Strengthening - debt reduction and liquidity management Relevant Figures 1 4Q19 4Q18 Total Financial Debt (US$ MM) 5,696 4,949 Cash and equivalents (US$ MM) 1,426 410 • Net financial debt down 36.3% YoY excluding IFRS16 Other Financial Assets (US$ MM) 622 703 • Net leverage ratio improved to 3.1x as of Dec19 Net Financial Debt (US$ MM) 3,648 3,836 Adj. EBITDA LTM (US$ MM) 1,164 921 Net Financial Debt / Adj. EBITDA LTM 3.1 4.2 Amortization Schedule 2 (US$ MM 3 ) Leverage 4 5.4 5.0 4.9 4.9 1,013 4.6 4.4 4.2 3.8 3.7 Gross 3.1 576 Leverage 572 Net 414 Leverage 208 188 113 63 49 52 49 33 18 14 20 21 22 23 24 25 26 27 28 29 30 41 44 45 2015 2016 2017 2018 2019 1 Figures converted to US$ using the period-end exchange rate for each period, not comparable due to the effect of IFRS16 in 2019. The EBITDA of the ratios does not include the EBITDA of Bank of Peru 2 Proforma amortizations after Tender Offer (bonds 2021 and 2023), net of derivatives, effect in the results of March 2020 3 Figures converted to US$ using the closing exchange rate as of December 31, 2019. The figures are presented net of mark to market gains / losses of derivatives, overdrafts and Comex debt. 4 4 Includes, from 2015 to 2018, a proforma of IFRS16 for data comparison
Conservative financial debt management By Currency 1 Dec19 Dec18 USD USD 21% 3% • As of December 2019, 70.5% of total cash remains in US$ (US$ 1.006 MM) compared to Others Latam CLP + UF 4.2% the previous year 6% CLP + UF 73% 97% • Exposure to other LATAM currencies reduced through debt repayment in Brazil By Rate 1 • Majority of derivatives have a positive mark to Dec19 Dec18 market Floating Floating 4% 17% Fixed Fixed 83% 96% 5 1 By currency and rate debt includes Cross Currency Swaps
Accelerating Omnichannel Results Department Stores • Chile : Focus on Marketplace with more than 20,000 products Website improvements that allow for a better customer experience in tracking delivery and returns Home Improvement • Chile: Focus on post-sale automation and increased omnichannel services • Argentina : Improve payment options • Colombia: Increase online assortment Supermercados • Chile : Only app with Click & Collect withdrawal Improvement in services: one click payment, scheduled or express sales, and frequent products Expansion to 10 locations in the summer season • Argentina: Department Home Supermarkets E-commerce Sales Stores Improvement Ecommerce expansion with Click & Collect service and Drive Thru 4Q19 2.1% 22.4% 6.6% National coverage in Non-Food (Jumbo), home delivery throughout the country 4Q18 1.9% 16.9% 4.9% • Colombia: Var 19/18 (bps) 15.0 550.5 165.3 S2S implementation in Click & Collect 2019 1.9% 18.2% 5.1% 2018 1.7% 14.3% 3.2% Ecommerce expansion with the opening of a website with operation in 18 stores Var 19/18 (bps) 25.4 387.7 189.7 • Perú: Implementation of click & collect store area as an experience center 6
Sustainability Strategy Responsible sourcing • Social protocols • Animal welfare • Eco Packaging • Food Waste Regional Diagnosis • Basis for joint sustainable development associated with our purpose and business model Provider development • Addressing climate risks strategically and comprehensively Environmental Culture • Environmental management with a focus on the efficient use of resources and comprehensive waste management • Capacity building at the regional level for the correct implementation Community Relations • Strategic plan to strengthen community ties jointly in our main operations 7
Quarterly Results 8
Executive Summary • At constant exchange rates, revenues grew 6.8% due to SSS growth in Supermarkets in Chile, Brazil, Argentina and Colombia, as well as Home Improvement across all countries of operations • Despite the social unrest and the resultant impact experienced in Chile and Colombia, 4Q19 as reported adjusted EBITDA Margin1, expanded 240 bps YoY. This increase is explained by improved results across all countries reflecting the efficiency initiatives implemented, better inventory management and the adoption of IFRS162 • Profit ex-IAS29 reached CLP 44,984 MM in 4Q19, reflecting a YoY non-cash decline in the revaluation of investment properties and an increase in taxes, partially offset by higher operating profit 1 Adjusted Ebitda: Gross profit + Other Income by Function + Other gains (losses) - GAV + D&A + Share in profits (losses) of associates - Revaluation of Assets 9 2 IFRS16 standard defines that all operating leases that exceed twelve months and are not of low value, must be recognized in the balance sheet
Consolidated Results 4Q19 vs 4Q18 As Reported IAS29 Dec'19 IAS29 Dec'18 Excl. IAS29 (A) (B) (C) (D) (E) (F) (G) (H) Inflation Conversion Inflation Conversion 4Q191 4Q18 Chg. YoY 4Q194 4Q18 Chg. YoY Chg. YoY Effect 2 Effect 3 Effect 2 Effect 3 Constant CLP MM CLP MM (%) CLP MM CLP MM CLP MM CLP MM CLP MM CLP MM Ex-IAS29 Currency Revenues 2,799,339 2,955,743 -5.3% 167,884 (26,878) 155,687 169,878 2,658,332 2,630,179 1.1% 6.8% Gross Profit 789,786 872,657 -9.5% 60,210 (9,837) 64,236 67,299 739,413 741,122 -0.2% 8.1% Gross Mg. 28.2% 29.5% -131 bps 35.9% 36.6% 41.3% 39.6% 27.8% 28.2% -36 bps SG&A (616,549) (724,853) -14.9% (55,383) 7,719 (49,710) (52,054) (568,885) (623,089) -8.7% -1.8% SG&A (% of revenues) -22.0% -24.5% 250 bps -33.0% -28.7% -31.9% -30.6% -21.4% -23.7% 229 bps Adjusted EBITDA 268,812 213,028 26.2% 14,073 (2,710) 20,940 5,955 257,450 186,133 38.3% 48.6% Adj. EBITDA Mg. 9.6% 7.2% 240 bps 8.4% 10.1% 13.4% 3.5% 9.7% 7.1% 261 bps Net Profit (25,861) 140,151 N.A (71,473) 628 628 (88,612) 12,317 44,984 216,446 N.A N.A Net Profit Mg. -0.9% 4.7% -42.6% -2.3% -56.9% 7.3% 1.7% 8.2% 1 Includes the adjustment by hyperinflation in Argentina. 2 ‘Inflation effect’ reflects the nine months period results from Argentina updated by inflation. 3 ‘Conversion effect’ reflects the translation from ARS to CLP figures of the 12 months period using end of period exchange rate as of December 2019. 4 Excludes the adjustment by hyperinflation in Argentina 5 (A) + (C) + (D) = (G) 6 (B) + (E) + (F) = (H) 10
Consolidated Results FY 2019 vs FY 2018 As Reported IAS29 Dec'19 IAS29 Dec'18 Excl. IAS29 (A) (B) (C) (D) (E) (F) (G) (H) Inflation Conversion Inflation Conversion 12M19 1 12M19 4 12M18 Chg. YoY 12M18 Chg. YoY Chg. YoY Effect 2 Effect 3 Effect 2 Effect 3 Constant CLP MM CLP MM (%) CLP MM CLP MM CLP MM CLP MM CLP MM CLP MM Ex-IAS29 Currency Revenues 9,548,213 9,646,002 -1.0% 334,685 (277,833) 331,553 (440,705) 9,491,362 9,755,154 -2.7% 6.8% Gross Profit 2,670,944 2,760,640 -3.2% 117,119 (101,532) 149,825 (165,779) 2,655,356 2,776,594 -4.4% 8.1% Gross Mg. 28.0% 28.6% -65 bps 35.0% 36.5% 45.2% 37.6% 28.0% 28.5% -49 bps SG&A (2,238,593) (2,365,711) -5.4% (117,780) 81,152 (111,062) 130,516 (2,201,965) (2,385,165) -7.7% -1.8% SG&A (% of revenues) -23.4% -24.5% 108 bps -35.2% -29.2% -33.5% -29.6% -23.2% -24.5% 125 bps Adjusted EBITDA 872,060 642,139 35.8% 27,550 (24,543) 55,163 (48,623) 869,053 635,599 36.7% 48.6% Adj. EBITDA Mg. 9.1% 6.7% 248 bps 8.2% 8.8% 16.6% 11.0% 9.2% 6.5% 264 bps Net Profit 154,617 190,594 N.A (128,453) (1,004) (49,247) (17,400) 284,074 257,241 N.A N.A Net Profit Mg. 1.6% 2.0% -38.4% 0.4% -14.9% 3.9% 3.0% 2.6% 1 Includes the adjustment by hyperinflation in Argentina. 2 ‘Inflation effect’ reflects the nine months period results from Argentina updated by inflation. 3 ‘Conversion effect’ reflects the translation from ARS to CLP figures of the 12 months period using end of period exchange rate as of December 2019. 4 Excludes the adjustment by hyperinflation in Argentina 5 (A) + (C) + (D) = (G) 6 (B) + (E) + (F) = (H) 11
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