apresentação 1t16 eng - final...apresentação 1t16 eng - final author: 621447 created date:...

1Q16 ResultsMay 11, 2016

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1st Quarter 2016 Earnings Presentation – May 11, 2016

Net sales reach R$17.8 billion, driven by 10.9%

growth in the food segment

� Improved sales trend across all banners in Multivarejo, especially in

food categories

� Assaí sales grow 36.2%, the highest quarterly growth since 1Q14

� Recovery in sales trend and market share gains at Via Varejo

� Optimization of expenses:

� Nominal decrease in SG&A at Via Varejo due to adjustments

in cost structure

� SG&A increase of Assaí lagged sales growth due to higher

discipline in expenses control;

� More selective approach to expansion plan:

� Focus on higher return formats: 1 Minimercado Extra and 1

Assaí opened; 15 stores currently under construction (approx.

42,000 sqm);

� Continuation of asset modernization plan and store

conversions

� Continuation of cash management strategy:

� Financial result grew 12.6%, below interest rate hike during

the period

� Reduction of R$62 million in gross debt

� Cash and cash equivalents of R$4.5 billion

� Reduction in volume of receivables sold, especially at Via

Varejo

1Q16:

Net sales: R$17.8 billion

EBITDA(1): R$ 484 million

Number of Stores: 2,126

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(1) Adjusted EBITDA.


R$ ‘000 1Q16 Change vs. 1Q15

Net Sales 17,754 +3.0%

Gross Profit 3,873 -6.3%

Gross Margin 21.8% -220 bps

SG&A -3,452 +8.7%

SG&A (% net sales) 19.4% -100 bps

EBITDA(1) 484 -52.4%

EBITDA Margin(1) 2.7% -320 bps

Net income (loss) – Controlling shareholder(1) -17 n.a.

Net margin(1) -0.1% -140 bps

Key figures in 1Q16

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� Gross margin impacted by lower contribution from Via Varejo, coupled with continued investments in price

competitiveness at the Multivarejo operation, especially in the Extra banner

� Adjusted EBITDA reached R$ 484 million, mainly reflecting the lower contribution from Via Varejo due to the

weaker scenario for consumer goods

(1) EBITDA and Net income (loss) adjusted by Other Operating Income and Expenses

Consolidated


Financial Result

� Growth of 12.6% in 1Q16, below the 15.8% increase in the

average interbank rate (CDI):

� Reduction of R$ 10 million or 5.6%, in the cost of

sale of receivables (credit card and payment book)

� Cash management strategy helped reduce volume of

receivables discounted, especially at Via Varejo

� Increase in the cost of debt below the hike in

interest rate during the period

Indebtedness

� Reduction of R$62 million in gross debt

� Cash and cash equivalents of R$4.5 billion

� Balance of R$2.9 billion in receivables not sold

(R$ million)

Reduction in gross debt and financial result increase below interest rate hike

(1) Including debt from Via Varejo’s payment book operation and balance of R$2.9

billion in receivables not sold. (2) EBITDA in the last 12 months.

Net Debt(1)/ EBITDA(2)

Net Debt(1)

-0.30x

(1,456) (1,797)

-0.84x

1Q15 1Q16

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Better sales trends across all banners

� Multivarejo:

� Adjusted EBITDA of R$308 million reflects the initial impacts of

the new campaign at Extra and the inflationary hikes on key

SG&A lines

� Pão de Açúcar and Proximity with profitability similar to the

same period last year

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(1) EBITDA adjusted by “Other Operating Income and Expenses”

� Extra:

� Improved trend of sales and market share, despite ongoing

macroeconomic challenges

� Continuation of store modernization plan and conversions:

- 3 hypermarkets renovated in April

- 2 “pilot-stores” will be converted into Assaí

� New commercial dynamics tested in March resulted in the

launch of the "1,2,3 Savings Steps" campaign:

- Promotional strategy better adapted to current scenario

- Focus on monthly purchases: 1,000 items distributed across

categories that address the main monthly needs of

consumers

- Economic balance: increase in customer traffic and

purchase volume will enable dilution of costs and expenses

- Additional efficiency gains in logistics and store operations,

with optimization of promotions.

Multivarejo

1Q16:

Net sales: R$ 6.7 billion


Number of stores: 1,052

Pão de Açúcar

Minimercado Extra

Minuto Pão de Açúcar

Extra Hyper

Extra Super

Drugstores

Gas Stations

185

239

62

137

194

157

78


Better sales trends across all banners

� Pão de Açúcar:

� Maintenance of high profitability with market share gains

� Important efficiency gains with lower shrinkage rates,

supporting profitability

� Continued focus on customer satisfaction – organic/healthy

products, exclusive launches and differentiated services

� Increased loyalty to “Mais” Program (70% sales

penetration) – enabling better customization of assortment

and services

� 1st store in the state of Bahia, opened in April

� Proximity:

� +300 stores with substantial market share gains

� Significant increase in efficiency and profitability through

scale gains and process optimization

� More selective approach to the expansion plan: prioritizing

Minuto Pão de Açúcar (higher return)

� 60 stores opened in the last 12 months.

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(1) EBITDA adjusted by “Other Operating Income and Expenses

Multivarejo

1Q16:

Net sales: R$ 6.7 billion


Number of stores: 1,052

Pão de Açúcar

Minimercado Extra

Minuto Pão de Açúcar

Extra Hyper

Extra Super

Drugstores

Gas Stations

185

239

62

137

194

157

78


1Q16:


EBITDA: R$100 million

EBITDA Margin: 3.2%

Number of Stores: 96

EBITDA and net income outperform strong

sales performance

� Total sales grew 36.2%, the highest quarterly growth since

1Q14:

� Double-digit same-store sales growth, significantly above

inflation

� Well-positioned format to the current macroeconomic

scenario

� Substantial market share gains

� Increased relevance in GPA Food sales: the most

representative banner in the segment, with 32% share in

1Q16 (vs. 28% in 2015)

� Increase in selling expenses below net revenues growth

� EBITDA grew 43.9%, significantly above sales growth in the

period

� Significant net income increase of 103% in the quarter

� Focus on organic expansion:

� 9 stores opened in the last 12 months

� Forecast of 12 to 15 new stores in 2016

� Deleveraged financial structure finance the banner’s

organic expansion

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1Q16:



EBITDA Margin(1): 4.2%

Number of Stores: 978

(1) Adjusted EBITDA and adjusted EBITDA margin;

(2) Includes the balance of credit card receivables not sold in the period

Market share gain in total market, with

sequential same-store sale improvement

� Measures taken in 2015 and 1Q16 to reduce expenses supported

competitiveness efforts in the period:

� SG&A expenses decreased 0.2%, despite inflation pressures

in the period and the end of tax exemption on payroll impact

� Maintenance of solid capital structure and financial protection in

a scenario of higher uncertainty:

� Receivables selling strategy and higher financial income

helped reducing net financial result

� Strong Net Cash position of R$ 3.0 billion(2)

� Delinquency level remained stable compared to 1Q15:

� Investments in approval and collection tools to minimize loan

risks

� Improved client segmentation by risk, with lower approval

rates for the higher-risk segment

� Outlook for 2016:

� Focus on sales increase through higher competitiveness

� Expense streamlining: media, capturing of logistics and back-

office synergies, outsourcing contracts and shared-

procurement

� Improved service level, better segmentation of pricing by

region and productivity gains in stores

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Progress in Cnova Brasil operations

Cnova BR: Increase in share of marketplace to 15.6% (vs. 7.1% in

1Q15) with the addition of +650 sellers in the period, totaling 2,300

active sellers. Traffic through mobile grew + 102% (share reached

44.0%), with efforts on SEO

Operational improvements achieved in 1Q16:

� Logistics processes enhancement, increasing productivity andquality of service

� Significant reduction of stockout rate, improving the customerservice

Priorities for 2016:

� Sustainable growth

� Increase traffic focused on optimizing marketing investments and increasing SEO

� Continuous improvement of shopping experience through mobile and Apps

� Category management aiming a more balanced product mix

� Operational excellence and customer service

� New systems (ERP, WMS and CRM)

� Expand the Click & Collect service

� Improve the logistics operation, reduce stockout and increase productivity in distribution centers

� Accelerate logistics synergies with Via Varejo

� Expansion of Marketplace

� Expand the base of vendors with the focus on quality

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GMV: R$1.7 billion

Share of marketplace: 15.6%

Gross margin: 10.2%

Investor Relations Team

Telephone: +55 (11) 3886-0421

Fax: +55 (11) 3884-2677

[email protected]

www.gpari.com.br

The forward-looking statements in this presentation are based on the current assumptions andprojections of the Company's management, which could differ materially from actual results andperformance and future events. These projections include future results that could be influenced byhistorical results and investments. Actual results, performance and events may differ significantly fromthose expressed or implied by these forward-looking statements due to a variety of factors, such asgeneral economic conditions in Brazil and other countries, interest and exchange rate variations,future renegotiations or prepayments of liabilities or loans denominated in foreign currency, legal andregulatory changes and general competitive factors at the regional, national or global levels.

Forward-looking statements

apresentação 1t16 eng - final...apresentação 1t16 eng - final author: 621447 created date:...

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