cencosud day buenos aires 2016...
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CENCOSUD DAY BUENOS AIRES 2016
CONSOLIDATING OUR STRATEGY
1. CENCOSUD INDICATORS
2. STRATEGIC THRUSTS AND PROGRESS
OF THE LAST 12 MONTHS
3. VISION FOR THE FUTURE
4. OPPORTUNITIES PER COUNTRY
AGENDA
STRONG REGIONAL PRESENCE AND HIGH
ACKNOWLEDGMENT BY CLIENTS
137,400 Collaborators
15 Brands
Cencosud jun-2016
1,113 Retail
stores & 53 Malls
220 MM Clients
60 MM Monthly Tickets
16B P&l 3° SUPERMARKETS
2° HOME IMPROVEMENT
1st SUPERMARKETS
4th DEPARTMENT STORES
2° SUPERMARKETS
2° HOME IMPROVEMENT
2° MALLS
2° DEPARTMENT STORES
4° SUPERMARKETS
NORDESTE (#2)
MINAS GERAIS (#1)
RIO DE JANEIRO (#3)
2° SUPERMARKETS
1° HOME IMPROVEMENT
2° MALLS
GROWTH PER DIVISION LAST 5 YEARS jun 2010 – jun 2016 / Thousand M2 GLA
+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
+61%
2016
5.881
2010
3.656
Malls
Department Stores
7,0%
7,5%
9,0%
8,0%
8,5%
6,5%
0,0%
2011
7,1% 6,9%
6,2%
2010
8,5%
2015 2014 2013
7,2%
2012 2016 LTM
7,6%
8,3%
Margin EBITDA Aj Income
279 EBITDA
Aj/m2
(US$)
303 268 260 234 254
9,4 11,4
13,8 15,3
16,2 16,6
INCOME EVOLUTION
(US$ MM) and Mg. EBITDA Aj (%)
20
15
10
5
0
Income Mg. EBITDA Aj
Note: Data in Chilean pesos (CLP) for each year converted to the dollar as of June 2016 ($661.4)
EBITDA 2016 LTM jun would be 7.1% if eliminating the effect of Marina Arauco divestiture
16,2
281
MAIN INDICATORS
2013 2012 2014 2015 2016 LTM Jun
Income (US$Bn)
29,2% 28,9%
2014
27,9%
2015 2016 LTM Jun
2013
28,7% 28,4%
2012
Margin (% Income)
Expense (% Income) EBITDA Aj.(% Income)
2013
23,9% 24,3%
2015
23,5%
2014
24,3%
2016 LTM Jun
23,0%
2012 2014
6,9%
2016 LTM Jun
7,6%
2015
6,2%
2013 2012
7,2% 7,1%
13,8 15,3 16,2 16,8 16,2
Note: Data in Chilean pesos (CLP) of each year converted to the dollar as of June 2016 ($661.4)
2016 LTM Jun
2015 2014 2013 2012
EBITDA (US$MM)
2016 LTM Jun
2015 2014 2013 2012
Debt/ EBITDA Aj
Market Cap (US$Bn)
2016 LTM Jun
2015 2014 2013 2012
979 1.101 1.115 1.035
1.231
10,7 8,4
6,7 7,4 8,2
4,6
3,4 3,7 3,3 3,2
Note: Data in Chilean pesos (CLP) of each year
converted to the dollar as of June 2016 ($661.4)
MAIN INDICATORS
2. STRATEGIC THRUSTS
AND PROGRESS DURING
THE LAST 12 MONTHS
IN 2015 WE DEFINED
OUR ROADMAP
3 STRATEGIC CORES
CLIENTS – TRENDS - PROFITABILITY
CLIENTS
INTERNAL CLIENT
HAPPINESS AT WORK AND
PRODUCTIVITY
CENCOSUD DNA
WE DEFINE 6 KEY COMPETENCES THAT BUILD
A CULTURE
1. CLIENT IS THE FIRST IN MIND
2. INDIVIDUAL TALENT AT THE TEAM’ SERVICE
3. PERMANENT EVOLUTION AND CHALLENGES
4. STRONG CULTURE FOCUSED ON INDIVIDUALS
5. OWNER’S MENTALITY
6. SEEKING ACCOUNTABILITY
INTERNAL CLIENT
HAPPINESS AT WORK
AND PRODUCTIVITY
LEADERSHIP & TRAINING.
5,000+ LEADER’S ESSENCE.
140,000+ E-LEARNING, SCHOOL SHOPS IN
MOST OF FORMATS, FOCUS ON CLIENT
EXPERIENCE
WOMAN & TRENDS.
MQDH CAMPAIGN (1,000 NOMINEES), STUDY
ON MAN-WOMAN SALARY GAPS. HEALTHY
FEEDING. INCLUSION POLICIES.
HAPPINESS & CONFIDENCE.
+19 POINTS IN 4 YEARS, 6 FLAGS IN GPTW
RANKING.
CONSUMER
FROM TRANSACTION TO EMOTION
1. PROMISES GENERATION
2. FOCUS ON EXPERIENCE AS THE CORE
IDEA
3. AUTHORITY IN SIGNIFICANT
CATEGORIES / AVAILABILITY
4. SPEEDY CHECK OUT
5. SPEEDY AND IMPECABLE POST SALES
6. CRM: LOYALTY PROGRAM AND
KNOWLEDGE
TRENDS
SUSTAINABILITY
A NEW MANNER OF BUILDING
ENTREPRENEURSHIP
1. DEFINITION OF A SUSTAINABLE
ENTREPRENEURSHIP POLICY AND
STRATEGY FOR ALL BUSINESSES IN
CHILE, PERU AND COLOMBIA
2. SUSTAINABILITY REPORTS AND CARBON
FOOTPRINT MEASUREMENT
3. DIVERSITY AND INCLUSION NEW POLICY
4. CENCOSUD ENTERS DJSI
5. 3 BRANDS IN PROHUMANA CHILE 2016
RANKING
HEALTHY LIFE
PIONEERS AND LEADERS OF HEALTHY
FOOD IN THE REGION
1. WE INTEND TO TRAIN THE CONSUMER IN
THE CORRECT USE OF FOOD
2. DEVELOPMENT OF FOOD TRENDS AND
SPECIFIC NEEDS
3. EAT HEALTHY AND EAT FREE CAMPAIGNS
BY JUMBO, LIVE HEALTHY AT WONG,
HEALTHY WORLD BY JUMBO COLOMBIA
4. TEAM CHILE SPONSORSHIP
5. ORGANIC AND FUNCTIONAL FOODS
OMNICHANNEL &
ECOMMERCE
MAIN CHANGE TO THE MODEL
1. INVESTMENT PROJECTS / 30% TOTAL IT.
2. ECOMMERCE HIGH GROWTH RATE THROUGHOUT
THE REGION
3. FULL PROCESS TO DEVELOP ASSETS, CLICK &
COLLECT, DRIVE THROUGH…
4. CENCOSUD CAPILLARITY AS DIFFERENTIATION
CORE
5. SELECTION AS A KEY FOR BRANDING AND
PURCHASE AT THE STORE
6. WE INTEND TO BECOME THE MAIN FOOD
OPERATOR IN THE REGION
PURCHASE AT THE
STORE AND WE DELIVER
IT TO YOUR HOME
PURCHASE ONLINE AND
WITHDRAW IT IN YOUR
CAR
PURCHASE BY TELEPHONE
AND WE DELIVER IT TO YOUR
HOME
PURCHASE ONLINE AND
WITHDRAW IT AT YOUR
CLOSEST LOCKER
PURCHASE ONLINE AND
WITHDRAW IT AT YOUR JUMBO
PURCHASE ONLINE AND
WE DELIVER IT TO YOUR
HOME
LOYALTY AND
DATAMINING
MAXIMIZING THE VALUE OF EACH
CLIENT WITHIN THE GROUP
OVER 16 MILLION CLIENTS
REGISTERED IN 5 LOYALTY
PROGRAMS AT EACH COUNTRY
WHERE WE OPERATE
MOBILITY
TO BE AT THE RIGHT SPOT
1. DEVELOPMENT OF NEW
RESPONSIVE SITES
2. MOBILE FIRST DESIGN
3. NEW BUSINESS APPS
4. CENCO WALLET
PROFITABILITY
CORPORATE
STRATEGIC
PLANNING
REVIEWING EACH BUSINESS ROAD AND
EACH BUSINESS ROLE IN OUR PORTFOLIO
ENSURING ALIGNMENT OF CAPITAL
ALLOCATION WITH OUR STRATEGY
THE SAME WORKING METHODOLOGY FOR
THE ENTIRE ORGANIZATION
EFFICIENCY &
PRODUCTIVITY
1. REVIEW OF STRUCTURES AND HEADCOUNT
2. ASSETS AND LANDBANK NONCORE
DIVESTITURE
3. MERCHANDISE HEALTH ( AGING )
4. ENERGY EFFICIENCY
5. NO M&A
6. SG&A GROWING BELOW INCOME
7. PRODUCTIVE PROCESSES CENTRALIZATION
8. TECHNOLOGY AT THE SERVICE OF STORE AND
CLIENTS
STORES WITH
NEGATIVE EBITDA
A MULTIDISCIPLINARY TASK
1. 173 INTERVENED STORES
2. 20 STORES CLOSED
3. 1,000 PLANS CARRIED OUT
4. ADAPTATION OF SELECTION &
LAYOUT
OWN BRANDS
1. 50 BRANDS AT SUPERMARKETS,
DEPARTMENT STORES AND HOME
IMPROVEMENT
2. 5 MARGIN POINTS IN EXCESS OF
THE CORRESPONDING CATEGORY
3. HIGH DEVELOPMENT AND GROWTH
POTENTIAL
DIFFERENTIATION &
PROFITABILITY
REGIONAL COMMERCIAL
SYNERGIES
CENCOSUD JOINT NEGOTIATION/PURCHASE
• TOP 50 SUPPLIERS
• COMMODITIES FOOD
• RETAIL DIVISIONS JOINT
PURCHASE
• LINE REVIEWS
• IMPORTED FOOD
POTENCIAL SYNERGIES
2Q
Acum
2016
29,1%
2Q
Acum
2015
28,6%
+57 bps +288 bps
2Q
Acum
2016
7,9%
2Q
Acum
2015
5,0%
+49%
2Q
Acum
2016
2Q
Acum
2015
262.518
392.224
Mg Bruto
(%Vta)
EBITDA
Aj. (%Vta)
EBITDA
Aj. ($MM)
+55,9%
Last year’s evolution
of Cencosud Share
Price
Ago 15 Sep 16 Dic 15
2.000
1.500
1.000
THE ACTIONS DESCRIBED HAVE HAD A SUCCESSFUL OUTCOME, WHICH IS REFLECTED IN RESULTS AND SHARE PRICE
COMPANY FIT
1. EXPENSES GROW LESS THAN SALES
2. STOCKS GROW LESS THAN SALES
3. DECREASED AGING
4. FOLLOW UP AND STRICTNESS TO WATCH
WORKING CAPITAL
AUSTERITY AND GREATER
ACCOUNTABILITY CULTURE
STRONG CULTURE
FOCUSED ON
INDIVIDUALS
1. LEADERSHIP AS A PERFORMANCE AND
BUSINESS SUSTAINABILITY DRIVER
2. TALENT REVIEW TOP EXECUTIVES 500
3. MANAGEMENT 6 KEY COMPETENCES
4. RELEVANCE OF WOMEN, HEALTH &
WELLBEING AND LABOR INCLUSION
5. TRAINING AND PRODUCTIVITY
6. LABOR ENVIRONMENT
TRENDS / CONSUMER
(LEADING NEW TRENDS IN THE REGION)
INTERNET AND OMNICHANNELING
SUSTAINABLE COMPANY
HEALTHY FOOD
TAKE AWAY MEALS
WOMEN AND BEAUTY WORLD
EASY AND FAST PAYMENT
FRESH
GROWTH ACCELERATING ORGANIC
MULTIFORMAT GROWTH
BECOMING LEADERS IN EVERY AREA
POSITIVE SSS IN ALL FORMATS
QUALITY AND SERVICE FORMATS AS
CORNERSTONES
LANDBANK DEVELOPMENT
E-COMMERCE HIGH EXPECTATIONS
ACCELERATING REMODELLING PROCESS
SELECTIVE DEVELOPMENT OF NEW STORES
FINANCIAL DISCIPLINE
2012 2015 2014 2016 2013
Fitch Ratings BBB -
Moody’s Baa3
I
Decreasing
Debt/
EBITDA
II
Non-core
assets
divestiture
III
Stable
Outlook
• Divestiture of improductive, non strategic land
• Divestiture of Marina Arauco Mall Viña del Mar
• Divestiture of Pharmacies in Colombia and Perú
• Gas stations in Colombia
4,6 3,4 3,7 3,3 3,2
ARGENTINA WE EXPECT A CHANGE IN THE ECONOMY TREND
FOR 2017:
A GOOD PROJECT PIPELINE, ON ITS OWN LAND
CLOSENESS FORMAT AT JUMBO
THE MARKET IS INCREASING ITS FORMALITY
LEVEL
THE MARKET IS OPENING TO IMPORT
WE ARE LEADERS IN E-COMMERCE
CONSOLIDATED TEAM / STRONG LOCAL PLAYER
BRAZIL END OF RECESSION, GROWTH AS FROM
2018
RENOWNED BRANDS, WITH A HISTORY
AND PRESTIGE IN THEIR MARKETS
WE HAVE A SUCCESSFUL ATACAREJO
FORMAT, WITH A POSITIVE GROWTH
WE HAVE BUILT A LOCAL TEAM OF
EXCELLENT LEVEL, ACKNOWLEDGED BY
THE MARKET
TRANSFORMATION INITIATIVES IN SUPPLY
CHAIN, PRICING, SELECTION AND
EFFICIENCY
COMMERCIAL SYNERGIES, IMPROVING
MARGIN AND COMPETITIVENESS
CHILE
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 RETAIL
STRONG GROWTH OF THE FINANCIAL
BUSINESS TOGETHER WITH SCOTIABANK
LEADERS IN E-COMMERCE FOOD, STRONG
GROWTH IN NON-FOOD
COSTANERA PROJECT EXPANSION
COLOMBIA WE GROW MORE THAN OUR MAIN COMPETITORS
OMNICHANNEL, E-COMMERCE AND TELEPHONE
SALES DEVELOPMENT
OPTIMISM BY INVESTORS ON THE PEACE
PROCESS
CONSOLIDATED TEAM WITH EXPERIENCE IN THE
LOCAL MARKET
PROFITABILITY OPPORTUNITY FOR OUR
CURRENT ASSETS
OUR BRANDS ARE CONSOLIDATING
GREAT DEVELOPMENT POTENTIAL TOGETHER
WITH LANDBAK AND UNRIVALLED LOCATIONS
2-DIGIT GROWTH AT EASY FOR THE LAST 2
QUARTERS
PERÚ POLITICAL CHANGE, CONFIDENCE IN THE
COUNTRY’S ECONOMY
HIGHER GROWTH AND LOWER INFLATION
EXPECTATIONS
YOUNG COUNTRY: 2/3 OF THE POPULATION
WITH FULL PRODUCTION, SAVINGS AND
INVESTMENT CAPACITY
LOW PENETRATION OF THE MODERN
CHANNEL
POTENTIAL FOR A 3 TIMES GROWTH OF PARIS
SHARE
EXCELLENT LAND PORTFOLIO
WONG WITH AN UNBEATABLE POSITIONING IN
THE HIGH SEGMENT
THE BEST LOYALTY PROGRAM - BONUS
STRONG DEVELOPMENT OF OWN BRAND
CONFIDENCE
41
We are in a better position than 15
months ago
We have started actions that are
yielding profits
We are going to address the future with
an ambitious but responsible growth
And always faithful to the DNA that has
characterized Cencosud: our clients are our
main concern for any decision
FINALLY…
THANK YOU VERY MUCH
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