EARNINGS PRESENTATION THIRD QUARTER 2016
CONTENT 01. Highlights 02. Progress on Strategy 03. Performance by Business 04. Balance Sheet Financials 05. Q&A 2
REVENUES Third Quarter Highlights 2,672,728 2,496,037 -6.6% Revenue expansion in local currency in all markets, except Brazil. Revenue • +7.9% decreased 6.6% YoY in CLP as a result of the devaluation of the Argentine peso (38.3%), Peruvian sol (5.9%) and Colombian peso (4.3%). Increased traffic in Supermarkets Chile, and Department Stores Chile and Peru • 3Q15 3Q16 Better SSS performance in Chile, Argentina and Brazil when compared to 2Q16 • ADJUSTED EBITDA Despite currency devaluation, Adjusted EBITDA grew 11.5% and margin expanded • 100 bps, mainly driven by improved performance at most operations and a low 153,418 +11.5% comparison basis . 137,546 Non recurring events resulting from the implementation of the strategy to drive • sustainable profitable growth: +33.4% 5.1% 6.1% Mg (%) Renewal of the agreement with Colpatria in Colombia: 50/50 JV was extended for a period of • 15 years. Aligned clauses to JV with Scotiabank in Chile. 3Q15 3Q16 Divestiture of Teleticket in Peru • NET PROFIT Severance payments and provisions of inventory obsolescence in 3Q15. • 34,950 Net profit reached CLP 34,950 million, reflecting a CLP 64,851 million increase due to • better performance at most operations, the positive impact of the exchange difference and non-recurring events in 3Q15. Figures translated from local currencies to -29,901 CLP using September 2015 exchange rates. Figures denominated in USD MM 3Q15 3Q16 3
CONTENT 01. Highlights 02. Progress on Strategy 03. Performance by Business 04. Balance Sheet Financials 05. Q&A 4
Progress on Strategy 1. 1. People ople GPTW score improved for fifth consecutive quarter; 25bps • increase since first measurement. CRM Argentina • Single Customer Vision Project • Mobile App Jumbo Más • Online surveys with loyalty database • CRM Colombia • Start of CRM program for suppliers: penetration higher • than 75% Re- launch of our loyalty program “ Puntos Cencosud” • Roll-out VIP customers • Development of the alliance with a group of women • (WikiMujeres) Growth of Healthy Lifestyle Program • Online registration in one hour • Website re-launch – 100% responsive • Integration of Easy to the BI model • 5
Progress on Strategy 2. 2. Trend ends (E-com ommerc rce e & Omni ni-chan hanne nel) l) Click & Collect/Omni-channel • • 28 stores in Department Stores Chile, 17 stores in Home Improvement Chile • Investment in DC for Department Stores increasing capacity by 3x in C&C • 39 stores with C&C (Capillarity) E-commerce Supermarkets • • Colombia: 25 stores with e-commerce delivery • Argentina: 59 stores with e-commerce delivery • Peru: 6 stores with e-commerce delivery • Chile: launch of services “buy online and we will deliver in 90 minutes” & “buy at the store and w e will deliver to your home” E-commerce Department Stores Chile • • Increased coverage of virtual kiosks to 41 stores • Launched Night dispatch window • Increased web assortment by 50% E-commerce Home Improvement • • Chile: continuous process improvements in mobile navigation and website • Argentina: 100% stores with store pickup, improved product sheet and online chat feature to facilitate inquiries 6
Progress on Strategy 3. 3. Prof ofit itabilit bility Increased private label penetration • 170 underperforming stores program: • 20 stores closed • 65% presents an EBITDA improvement over their respective flags • Recent developments on divestiture of non-core assets: • Colpatria, Colombia • Landbank, Chile • Teleticket, Peru • Synergies in commercial purchases : • Deepening trade agreements with the main 50 food suppliers • Development of a regional product portfolio in food commodities • Line Reviews • Centralization of supply in one brand for several countries • Market imported brands between several countries • Synergies in non-commercial purchases : • Savings through regional negotiations in maritime transport, insurances, • basic supplies (plastic bags, chemicals, etc.) and IT systems (regional contract with SAP, professional fees, Oracle). Local negotiations • 7
CONTENT 01. Highlights 02. Progress on Strategy 03. Performance by Business 04. Balance Sheet Financials 05. Q&A 8
Figures translated to CLP with exchange rates as of Sept 2015 Performance by Business Figures denominated in CLP MM “Others” segment excluded from graph CONSOLIDATED SUPERMARKETS HOME DEPARTMENT SHOPPING FINANCIAL IMPROVEMENT STORES CENTERS SERVICES 2,672,728 -6.8% 2,496,037 1,966,443 1,831,867 -6.6% REVENUES -15.3% +7.4% +7.9% 361,028 -3.5% 305,912 232,703 249,818 -0.1% 3Q15 3T15 63,207 60,989 3Q16 3T16 45,655 45,588 3Q15 3Q16 +5.3% +16.6% +7.9% +15.2% +42.3% +11.5% ADJUSTED +10.4% 153,418 EBITDA 137,546 82,983 91,635 -14.7% +0.1% +0.6% +33.4% 52,302 44,607 +15.1% 27,027 27,067 23,281 23,420 5.1% 6.1% Mg (%) 7,710 8,877 3Q15 3Q16 +21.6% +48.9% +13.9% +1.7% +42.9% 9
Figures translated to CLP with exchange rates as of Sept 2015 Performance by Business Figures denominated in CLP MM Supermarkets CONSOLIDATED CHILE ARGENTINA BRAZIL PERU COLOMBIA 1,966,443 +4.2% 1,831,867 -28.0% 643,388 +3.3% 617,549 REVENUES 544,677 -6.8% 405,393 -7.8% -2.1% 3Q15 3T15 392,133 392,316 +5.3% 3Q16 3T16 215,226 198,389 196,676 192,562 3Q15 3Q16 +19.0% -2.5% -2.1% +2.3% Revenue increase in local currency in all countries, except Brazil and Peru • 91,635 +10.4% ADJUSTED • Chile: 3.8% SSS, same as 3Q15 despite slower consumption EBITDA 82,983 • Argentina: 16.5% SSS, improved against 2Q16 and same as 3Q15, despite lower purchasing power • Colombia: 3.5% SSS despite weaker macroeconomic environment • In CLP revenues drop as a result of the devaluation of the ARS (38.3%), PEN (5.9%) & COP (4.3%) against CLP +21.6% Adjusted EBITDA up 21.6% excluding the currency effect and margin expanded 78bps. • • Adjusted EBITDA margin increase driven by all operations except Brazil, mainly due to efficiencies in expenses 4.2% 5.0% Mg (%) after the headcount reduction • Chile expanded its margin by 20bps as a result of efficiency initiatives • Argentina’s margin up by 253bps 3Q15 3Q16 • Peru increased its margin by 127bps • Brazil’s profitability decreased reflecting higher promotional activity to push sales 10
Figures translated to CLP with exchange rates as of Sept 2015 Performance by Business Figures denominated in CLP MM Home Improvement CONSOLIDATED CHILE ARGENTINA COLOMBIA 361,028 -25.4% -15.3% 235,188 REVENUES 305,912 +3.7% 175,507 114,417 110,299 3T15 3Q15 +16.6% +2.9% 3T16 3Q16 15,541 15,989 3Q15 3Q16 +23.3% +7.7% Revenue increase in local currency across all countries • Chile partially recovers its growth rate driven by a pick-up in wholesale and improved assortment • Argentina increased in local currency, driven by 21.3% SSS growth and one opening 27.027 27.067 • ADJUSTED +0.1% Colombia achieved positive SSS for the eighth consecutive month • EBITDA EBITDA margin increased 136bps, reflecting the results of the efficiency initiatives and greater profitability on • the retail segment. Non-recurring events were recorded in 3Q15. +48.9% Improvements shown at three operations • Margin expanded 239bps in Chile • 7.5% 8.8% Mg (%) In Argentina margin was up 159bps • Colombia decreased its negative contribution • 3Q15 3Q16 11
Figures translated to CLP with exchange rates as of Sept 2015 Performance by Business Figures denominated in CLP MM Department Stores CONSOLIDATED CHILE PERU +7.3% 249,818 +7.4% 218,095 233,976 232,703 REVENUES 3Q15 3T15 +8.4% +7.9% 3Q16 3T16 14,608 15,842 3Q15 3Q16 +14.8% Increased revenues in local currency at both operations • Chile improved SSS growth against 3Q15 driven by better performance at perfumery and clothing • 8,877 Peru continues double digit growth (12.6% SSS) for fourth consecutive quarter • +15.1% ADJUSTED EBITDA 7,710 Adjusted EBITDA up 15.1% and margin expanded 14bps, reflecting greater SG&A dilution due to the • efficiency program - the third consecutive quarter with lower SG&A/sales. In 3Q15 Chile registered non- recurring events +13.9% Margin expanded 239bps in Chile after greater SG&A dilution • Peru reduced its negative EBITDA explained by an improved commercial proposal and store • 3.3% 3.6% Mg (%) maturity 3Q15 3Q16 12
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