Corporate Presentations2.q4cdn.com/.../2016/oct/Cencosud-Corporate-Presentation-ENG.pdf · Focus on the experience as a central axis 3. ... Excellent land bank ... Corporate Presentation

Corporate

Presentation

October 2016

The Company

Strategy

Opportunities by Country

Financials

Index

2 Corporate Presentation | The Company |

Cencosud in the Region

• 283 Supermarkets

• 51 Home Improvement

• 22 Shopping Centers

• Financial Services

• 89 Supermarkets

• 9 Department Stores


• Financial Services


• Atacarejo format

• 3 different regions

• JV Bradesco




• JV Colpatria

• 245 Supermakets


• 78 Department Store


• JV Scotiabank

Since

2007 Since

1978 Since

1982 Since

2008 Since

2012


Regional Presence / Market Share1

3º SUPERMARKETS 2º HOME IMPROVEMENT

1st SUPERMARKETS 4th DEPARTMENT STORES

2º SUPERMARKETS 2º HOME IMPROVEMENT 2º SHOPPING CENTERS 2º DEPARTMENT STORES

4º SUPERMARKETS NORDESTE (#2)

MINAS GERAIS (#1) RIO DE JANEIRO (#3)

2º SUPERMARKETS 1º HOME IMPROVEMENT 2º SHOPPING CENTERS

15 Brands

220 MM Clients

60 MM Tickets

Monthly

4

137.400 Employees

Corporate Presentation | The Company |

1. As of june 30th, 2016

Relevant brand portfolio with high

consumer awareness

5

930 Supermarkets

96 Home

Improvement

87 Department

Stores

53 Shopping Center

Brands focused

on high and

medium/low

segments


39.7%

27.9%

14.6%

9.5%

8.3%

Chile

Argentina

Brasil

Perú

Colombia

Breakdown by Country: Revenues LTM1


Andean Region

6,424 USD MM

1,545 USD MM

1,341 USD MM

Atlantic Coast

2,361 USD MM

4,526 USD MM

1. Exchange Rates: June, 2016 (CLP/USD = 661,4)

USD 16,197 MM

Atlantic Coast

26 USD MM

362 USD MM

53.8% 29.4%

2.1%

10.1%

4.6%

Chile

Argentina

Brasil

Perú

Colombia

Breakdown by Country: Adjusted EBITDA1 LTM2

7

1. Adjusted EBITDA: Corresponds to EBITDA +/- Exchange Variations +/- Asset Revaluation +/- Result of Indexed Units.


Andean Region

662 USD MM

125 USD MM

56 USD MM


USD 1,231 MM

72.5%

13.2%

10.2%

1.6% 2.3%

Supermercados

Mejoramiento del Hogar

Tiendas por Departamento

Servicios Financieros

Centros Comerciales

Breakdown by Business: Revenues LTM1

8


1. Shopping Centers figure only reflect contribution by third parties

11,748 USD MM

2,134 USD MM

1,651 USD MM

26 USD MM

362 USD MM


USD 16.197 MM

Supermarkets

Home Improvement

Department Stores

Financial Services

Shopping Centers

51.0%

14.1%

6.0%

7.7%

21.1%

Supermercados

Mejoramiento del Hogar

Tiendas por Departamento

Servicios Financieros

Centros Comerciales

Breakdown by Region: Adjusted EBITDA LTM1

9


1. Shopping Centers figure only reflect contribution by third parties

696 USD MM

193 USD MM

82 USD MM

105 USD MM

288 USD MM


USD 1.231 MM

Supermarkets

Home Improvement

Department Stores

Financial Services

Shopping Centers

A story of sustained regional growth

10

2.2

3.9 4.8

5.9

9.5 8.6

9.7

11.8

14.3

16.2 16.7

15.5

1976 1982 1988 1993 2000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 LTM 2T16

1. Values using Exchange Rates at the end of each period

16.2


Growth reflected in the size of our operations

11

+70%

2016

2.386

2010

1.405

799

2010 2016

672

+19%

2010

234

2016

416

+77%

Home Improvement

Supermarkets

+77%

2016

2,007

2010

1,136

Shopping Center1

Department Stores

Jun 2010 – Jun 2016 / Thousands M2 Surface

1. Total M2 in shopping centers includes leases to related companies


The Company

Strategy


Financials

12 Corporate Presentation | Focos Estratégicos |

Index

Guidance and Investment Plan

2016 - 2019

Working

Spotlights

Organic

Growth Plan

1. Cost Efficiency and Profitability

2. Omni-quality

3. Financial Strengthening

4. Shopping Centers IPO

5. Non-strategic assets divesting

For the period 2016–2019 investment

contemplates US$ 2.500 million, to be

financed mainly by the generation of

own resources 60% 22%

18%

Distribution by type of investment

Organic Growth and Renovation

Technology, Logistics & Omnicanal

Maintenance & Current Capex

13 Corporate Presentation | Strategy |

Cencosud ADN We define 6 key competences that build Culture

1. Costumer - Centered

2. Individual talents at the service of the Team

3. Permanent evolution and challenges

4. Strong culture focused on People

5. Owner Mentality

6. Accountability

1. Promises generation

2. Focus on the experience as a central axis

3. Authority in relevant / available categories

4. Check out speed

5. Speed and impeccability in post sale service

6. CRM: knowledge and fidelization

Internal Client Happiness at Work and Productivity

Consumer From transaction to emotion

Strategic Pillars – 1.Clients


1. Sustainability & Entry to DJSI

2. Healthy Life

3. Omnichannel Strategy Development

4. Fidelity & Datamining

5. Mobility

Strategic Pillars – 2.Trends

15

Buy online and we

deliver it

Buy in the Store and

we deliver it

Buy online and pick

up with your car

Buy with your phone

and we deliver it

Buy online and pick it

up in the nearest locker

Buy online and pick up

them from your closest

Jumbo

Corporate Presentation | Strategy |

Corporate Strategy Plan 1. Review of the route and role of each business unit within the

portfolio

2. Ensure capital allocation alignment

3. Same methodology for the entire organization

Productivity and Efficiency 1. Review of structures and headcount

2. Non-core assets and landbank divestiture

3. Inventory health (Aging)

4. Energy Efficiency

5. Organic growth

6. SG&A growing below income

7. Centralization of productive processes

8. Technology at the service of stores and costumers

Program for Stores with Negative EBITDA

Own Brands

Regional Trade Synergies

Strategic Pillars – 3.Profitability


The Company

Strategy


Financials

17 Corporate Presentation | Opportunities by Country |

Index

Opportunities by

Country - Argentina

We expect a change in the economy trend for

2017:

Strong project pipeline, in our own land

Closeness format at Jumbo

The market is increasing its formality level

The market is opening to imports

We are leaders in e-commerce

Consolidated team / strong local player

18 Corporate Presentation | Opportunities by Country |

19

Opportunities by

Country - Brazil

End of recession, growth from 2018

Renowned brands, with history and

prestige in their markets

We have a successful Atacarejo format,

with positive growth

We have built a local team of excellent

level, acknowledged by the market

Transformational initiatives in supply

chain, pricing, selection and efficiency

Commercial synergies, improving margin

and competitiveness

Corporate Presentation | Opportunities by Country |

20

A country with a solid economy, growing

below its potential

Key openings for our main brands

Landbank of 2.7 mm sqm

Full multiformat, 6 retail flags + shopping

+ financial services

Strong growth of the financial business

together with scotiabank

Leaders in e-commerce food, strong

growth in non-food

Costanera project expansion

Opportunities by

Country -Chile


21

Opportunities by

Country - Perú Political change, confidence in the country’s

economy

Higher growth and lower inflation

expectations

Young country: 2/3 of the population in full

production, savings and investment capacity

Low penetration of the modern channel

Potential for a 3 times growth of Paris share

Excellent land bank

Wong with an unbeatable positioning in the

high segment

The best loyalty program - bonus

Strong development of own brand


22

Opportunities by

Country - Colombia

Consolidated team with experience in the local

market

We grow more than our main competitors

Omnichannel, e-commerce and telephone sales

development

Profitability opportunity for our current assets

Our brands are consolidating

Great development potential together with

landbak and unrivalled locations

Easy format showing 2-digit growth for the last

2 quarters


The Company

Strategy

Oportunities by Country

Financials

23 Corporate Presentation | Financials |

Index

Key Figures

Revenues (USD Bn)1

Adj. EBITDA (% Revenues)1

1. Figures translated into USD at end of period exchange rate as of June 2016 (CLP/USD 661.4)

Adj. EBITDA (USD Mn) 1

268 260 254 234 281

2012 2013 2014 2015

13.8 15.3 16.2 16.8 16.2

2012 2013 2014 2015 2016 LTM Jun

2016

LTM Jun

Adj. EBITDA / M2

979 1,101 1,115 1,035

1,231

2012 2013 2014 2015 2016 LTM Jun

7.1% 7.2% 6.9% 6.2%

7.6%

2012 2013 2014 2015 2016 LTM Jun


Financial Ratios

Interest Coverage Ratio

1.86x

1.32x 1.43x 1.51x 1.44x

2012 2013 2014 2015

4.6x

3.4x 3.7x 3.3x 3.2x

2012 2013 2014 2015 2016 LTM Jun

2016

LTM Jun

Total Liabilities / Equity

0.89x

0.58x 0.60x 0.58x 0.65x

2012 2013 2014 2015 2016 LTM Jun

3.73x 3.02x 2.90x 2.84x

3.27x

2012 2013 2014 2015 2016 LTM Jun


1. Figures translated into USD at end of period exchange rate as of June 2016 (CLP/USD 661.4)

Debt / Adj.EBITDA1 Debt to Equity

Financial Discipline: Commitment to investment grade

26

Fitch Ratings BBB -

Moody’s Baa3

I Decreasing Debt/

Adj. EBITDA1

II Non-core

assets

divestiture

III Stable Outlook Feller Rate

AA- Humphrey

AA-

Local Ratings International Ratings

1. Excludes banking operarations Since 2014 Adj. EBITDA excludes Fair Value of Derivatives effect

4.6

3.4 3.7 3.3 3.5 3.2

2012 2013 2014 2015 2015 LTM Jun

2016 LTM Jun

Executed

Executed

Executed

In progress

In progress

• Divestiture of Pharmacies in Colombia and Perú

• Divestiture (minority interest) of Marina Arauco Mall, Viña del Mar

• Contract renegotiation of Colpatria, Colombia

• Divestiture of improductive, non strategic land

• Gas stations in Colombia

Corporate Presentation | Financials |

164 127 234 214 52

780

18

1219

20

700

51 40 217 40 29 81 350

298

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2041 2045

Structured Debt Non Structured

Amortization Schedule ( USD Mn)

CLP & UF

78%

USD 14%

Others LatAm

8%

Int. Bond 64%

Local Bond 14%

Banks 18%

Others 4%

Debt

USD 4,611 MM1

Fixed 69%

Variable 31%

1. As of June 30th, 2016

2. USD exposure is net of cash dollar and is calculated after Cross Currency Swaps

Main features of Debt Breakdown by Interest

Rate

Breakdown by type of

issue

Breakdown by Currency2


Corporate

Presentation

October 2016

Documents

Corporate Presentations2.q4cdn.com/.../2016/oct/Cencosud-Corporate-Presentation-ENG.pdf · Focus on the experience as a central axis 3. ... Excellent land bank ... Corporate Presentation