Corporate Presentation Second Quarter Results 2015
Second Quarter | www.cencosud.com | 2 The information contained herein has been prepared by Cencosud S.A. (“ Cencosud ”) solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities and should not be treated as giving investment or other advice. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. Any opinions expressed in this presentation are subject to change without notice and Cencosud is under no obligation to update or keep current the information contained herein. The information contained herein does not purport to be complete and is qualified in its entirety by reference to more detailed information included in the preliminary offering memorandum. Cencosud and its respective affiliates, agents, directors, partners and employees accept no liability whatsoever for any loss or damage of any kind arising out of the use of all or any part of this material. This presentation may contain statements that are forward-looking subject to risks and uncertainties and factors, which are based on current expectations and projections about future events and trends that may affect Cencosud’s business. You are cautioned that any such forward-looking statements are not guarantees of future performance. Several factors may adversely affect the estimates and assumptions on which these forward-looking statements are based, many of which are beyond our control.
Second Quarter | www.cencosud.com | 3 2Q15 Operational Highlights • Top line growth led by Home Improvement Department Stores & Shopping Centers • Gross margin gains in Supermarket fuel gross profit growth followed by D-Stores & HI • Operating Income jumped on improved Supermarket, Shopping Center & D-Store performances • Food Retail leading Adj EBITDA gains followed by D-Stores & Shopping Centers
Second Quarter | www.cencosud.com | 4 Food Retail in Supermarkets continues to perform well while non-food hurt by currency and high base due to World Cup Chile • Mid-Single digit SSS thrusted by perishable sales • Smart promotional strategy helps shield gross margin • High comparison basis in electronics due to the 2014 World Cup • Corporate restructuring curbs profitability gains Peru • Stable revenue on lower promotions and few openings • Smart Pricing and better benchmarking help improve gross margin • Lower operating income as a result of higher security & energy costs Colombia • Slower consumption affects spending on non-food items with high comparison basis due to World Cup • Perishables remain as a bright spot with SSS growth of 9.2% • Growth in traffic and ticket in food departments • Lower electro in sales mix gives gross margin a boost
Second Quarter | www.cencosud.com | 5 Cost-control initiatives • Company-wide initiatives to lower costs and boost profitability • Gross margin: negotiations with suppliers to maximize margin • New business heads in Brazil with mandate to prioritize profitability • SG&A: Headcount and vendor initiatives to reduce costs
Second Quarter | www.cencosud.com | 6 Discussion into Operational One-Off Items • Impairment of Brazilian Assets of CLP 116,771 million • Materialization of Scotiabank deal for financial services in Chile yields extraordinary profit of CLP ¨ 61,373 million • Severance payments in Supermarkets & D-Stores push SG&A upwards Discussion into Non-Operational One-Off Items • Reversal of differed taxes in Colombia of CLP 40,632 million
Second Quarter | www.cencosud.com | 7 Write-off in Brazil • Further potential deterioration of macro outlook leads to review of expected cashflows • Credit downgrade • Rising interest rates • Shrinking GDP • Cencosud developed an asset impairment model that was later reviewed by its auditor PWC and reviewed by an independent third party opinion • Debt servicing capacity not to be affected; in compliance with all financial covenants
Second Quarter | www.cencosud.com | 8 Progress in Brazil • EBITDA Up 93% YoY • EBITDA Mg Up 213 Bps YoY On: • Improved Business Performance • Headcount Reductions • Lower Service Contracts • Improved Pricing Strategy & Category Management • New Management Appointed at Prezunic and to Head Several Key Categories • Future strategy for Brazil to lie on 3 main pillars • Commercial planning • Price benchmarking and inflation pass-thru • Shrinkage
Second Quarter | www.cencosud.com | 9 Consolidated Revenue Evolution Consolidated Adjusted EBITDA Evolution 168.330 -31.2% *This number for Adjusted Ebitda in the quarter includes an extraordinary profit resulting 2.617.109 +1.24% w/D.O. - 142.073 36.1% w/D.O. - 0.4% 97.758 from the sale of the financial services business to Scotiabank in Chile Excluding 2.585.035 One-Offs Figures in CLP million +19% 2Q14 2Q15 2Q14 2Q15 SR -2Q15 • • Unfavorable currency swings in Brazil and Colombia curb Supermarket EBITDA generation jumps 18% on better revenue growth Argentina; Brazil and Chile performance • • High comparison basis & macro headwinds in the region D-store EBITDA jumps 110% on improved purchasing, better for non-food affect SSS and revenue growth inventory management and better foreign currency risk • Home Improvement at the forefront in revenue gains management • Greenfield projects continue to post positive SSS
Results By Business
Second Quarter | www.cencosud.com | 11 Revenue Evolution • 8 Net Store Openings YoY or 1.5% selling space Growth. • Pacific coast countries displaying healthy SSS performance when discounting for high comparison base in non food Supermarkets • Deteriorating macro and high inflation hurt SSS performance at supermarkets Figures in CLP million SSS evolution by country (local currency) Adjusted EBITDA Evolution • Better performance in Argentina, Chile & Brazil leads to EBITDA expansion of 18% in the division • Brazil EBITDA generation improved on greater gross margin resulting from improved negotiation with suppliers; lower shrinkage and headcount reductions • Argentina EBITDA jumps with margin gains of 60 bps
Second Quarter | www.cencosud.com | 12 Department Stores Home Improvement Figures in CLP million • • Positive SSS particularly in Argentina & Chile Top line growth in both Chile and Peru • • Lower adjusted EBITDA due to higher SG&A Strong EBITDA performance in Chile • Colombia loss narrows on improved performance at converted stores
Second Quarter | www.cencosud.com | 13 Financial Services Shopping Centers Figures in CLP million • Revenues in Chile consolidate only 1 month of • All markets show revenue growth and high occupancy operations in 2015 due to closing of deal with • Shopping Center Adj EBITDA grows 2.9% on Scotiabank • improved performance in Argentina and Peru Revenues from Brazil and Colombia drop due to • Chile profitability was curbed by higher taxes and currency devaluations one-off expenses • All markets but Brazil obtained portfolio growth in the period • Cost of funding increases across the region
Second Quarter | www.cencosud.com | 14 Effective Tax Rate Conciliation • CREE Disbursements in Colombia now to be eligible for deferred tax assets due to new legal precedent with an effect of CLP 40,632 million • Materialization of Financial Services deal in Chile deemed non- taxable resulting in a positive tax effect of CLP 13,051 million • Brazil impairment charge results in lower taxable income leading to a positive tax effect of CLP 39,702 million
Second Quarter | www.cencosud.com | 15 * Calculations made to arrive at this ratio do not include none cashe one-off items such Financial Ratios Cencosud is actively exploring options to accelerate deleveraging * Net debt evolution Net leverage (US$ bn) (net debt / EBITDA) as the Brazil impearment charge Breakdown by Breakdown by Rate Currency (After CCS) (After CCS)
Second Quarter | www.cencosud.com | 16 Debt Amortization Schedule (USD million) as of June 2015 After receiving proceeds from the Financial Services deal with Scotiabank; Cencosud finds itself in a solid financial situation. FINANCIAL DEBT USD MM
Pacific coast food retail continues to post healthy performance despite high non-food base Corporate restructuring to curb profitability gains in 2Q15 & 3Q15D-Stores posting profitability gains despite flatish SSS in Chile resulting from World Cup effect Healthy EBITDA expansion excluding One-Off Leverage down with further improvements to come from EBITDA growth
Second Quarter | www.cencosud.com | 18 Upcoming Events Cencosud Day Rio Rio de Janeiro, RJ Sept 1 & 2 BTG Pactual Latin America CEO conference New York, NY Oct 6 thru 8 3Q15 Earnings Release Nov 13, 2015 After market Marisol Fernández León Natalia Nacif Ignacio Reyes Miranda IR Manager Senior IR Analyst Senior IR Analyst Phone +562 2959 0545 Phone +562 2959 0368 Phone +562 2959 0804 mariasoledad.fernandez@cencosud.cl natalia.nacif@cencosud.cl Ignacio.reyesmiranda@cencosud.cl
Recommend
More recommend
