chile day final - ripley inversiones · 2 ripley corp chile ... • additionally, the debt profile...

Ripley CorpPresentation July 2009

2

Ripley Corp

CHILE

38 Stores - Selling space 232,820 sqm

Revenues LTM: US$1,331 million

Loan Portfolio: Over MUS$ 900

RIPLEY CORP

Revenues for almost MUS$2,000

EBITDA 2008: MUS$ 180

Market Cap: MUS$ 1,500

One of the biggest holdings of the department store business in Chile and Peru

PERU

11 Stores – Selling space 102,110 sqm

Revenues LTM: Over US$ 450 million

Loan Portfolio: Over MUS$ 350

Figures in US$ as of Jun-09 (FX: $531.76/US$)

3

Contents

• Ripley - 53 years of history

• Recent Developments

• Ripley Chile

• Ripley Peru

• Conclusion

4

More than 50 years in the retail industry

1956 First store in Santiago

1976 Credit business beginning

1985 First department store

1986 First store outside Santiago

2000 Insurance brokerage and e-commerce

1993 Ripley Parque Arauco biggest store in South America / New image positioning

2003 Opening of Hong Kong office / local bond of UF 6,500,000 (MUS$257)

2005 IPO of Ripley Corp.

2007 First store outside Lima (Trujillo). First shopping mall of Aventura Plaza S.A. JV in Peru

2009 Acquisition of 22.5% of Nuevos Desarrollos S.A.(Plaza Alameda, Plaza Sur and future developments)Sale of the participation in Mall Calama, Mall del Centro, Mall del Centro Rancagua and Mall Panoramico.

1997 First store in Peru

5

One of the biggest holdings in the department store business

• Third player on department store business in Chile and second in Peru

• Sales of almost US$ 2 billion• MUS$ 1,331 in Chile (LTM)• MUS$ 538 in Peru (LTM)

• 38 Stores in Chile and 11 in Peru, with a total selling space of 334.930 sqm

Paris24.4%

Ripley22.6%

La Polar12.9%Falabella

40.1%

Market Share in Chile(Retail Sales 2008)

Market Share in Peru(Retail Sales 2008)

Source: Ripley and Companies Press Releases Source: Ripley

Ripley46%

Falabella54%


6

An important player in consumer credit in both countries

• Sixth actor in consumer credits market in Chile with a loan portfolio of MUS$1,282 (Tarjeta Ripley + Banco Ripley) as of Dec-08

• Loan Portfolio of Tarjeta Ripley: MUS$ 914• Loan Portfolio of Banco Ripley: MUS$ 368

• Fifth actor in consumer credits market in Peru with a loan portfolio of more than MUS$350.

Source: SBIF (w/o considering BancoEstado)

Market share in Chile(consumer credits 2008)

Market share in Peru(consumer credits 2008)

Source: SBS PeruFigures in US$ as of Jun-09 (FX: $531.76/US$)

BCP31.0%

Others1.2%

Interbank17.0%

Scotiabank12.5%

Falabella11.9%

Ripley8.3%

Continental7.7%

Citibank6.0%

del Trabajo4.3%

Corpbanca4.6%

Other Small Retailers

6.7%Other Banks

6.8% Santander21.1%

Banco De Chile17.7%

Falabella + CMR10.8%

Banco Ripley + Tarjeta Ripley

6.4%

La Polar4.9%

BBVA4.7%

Banco Paris + Tarjeta Mas

6.9% BCI9.4%

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Successful business model

• Integration of synergic businesses gives a complete knowledge of client needs

• Focus on its target market with a clear value proposal and focused marketing efforts:

Leadership in target segment

• Strengthening own brands

• Wide variety of fashion products

• Permanent innovation

Brands and Fashion

Purchase repetition

• Quality product

• Convenient financing

• Integral service

Purchase experience

Transactional card and client fidelity

• Benefits / Discounts

• More than 8,000 associated stores

Convenience and Financing

ResultMeasuresValue Proposal

• Positive results of TOM• Second place in TOM of Department stores and Credit cards

8

Strong corporate image

• Important characters helped us to build a very strong corporate image and brand

• Cindy Crawford: IPO of Ripley Corp

• Penelope Cruz: Face of the company

9

Permanent growth in Chile

• Attractive growth in sales, selling space and loan portfolio confirms successful positioning

Evolution of consolidated revenues( MUS$)

2003 2004 2005 2006 2007 2008 Mar-08

Mar-09

Retail Financial Shopping Malls

1,1531,268 1,323

1,4121,331

316 289

1,043

CAGR*: 5.5%

* CAGR: Compounded average growth rateSource: Ripley

Evolution of financial revenues and loan portfolio (MUS$)

522

658 670

931 967917

503423

350314269231214

426

2003 2004 2005 2006 2007 2008 . Mar-09

Gross Loan Portfolio Financial revenues

CAGR*: 13.9%

Source: SBIF


10

Permanent growth in Peru

• Strong increase on sales, financial revenues and loan portfolio confirm important growth in Peru

368 374

538

82 92

2006 2007 2008 Mar-08 Mar-09

CAGR*: 19.7%

Source: Ripley

142

191

158

104

4960

102 103

2006 2007 2008 . Mar-09

Loan Portfolio Financial revenues

CAGR*: 35.7%

* CAGR: Compounded average growth rate

Evolution of consolidated revenues( MUS$)

Evolution of financial revenues and loan portfolio Banco Ripley Peru (MUS$)


11

Wide client base and efficient administration of strategic information

• More than 5.4 million issued cards in Chile and 2.1 million in Peru• More than 3.0 million of active cards in Chile and 1.3 million in Peru

• Optimization of efforts in marketing, merchandising and promotional activities

Issued cards in Chile

3.74.3

5.15.4

2005 2006 2007 2008

1.6 1.6

1.92.1

2005 2006 2007 2008

Issued Cards in Peru

12

Strong financial structure

• Conservative Financial strategy let the company to have a solid financial position, even in the low cycles of the economy.

• Additionally, the debt profile of the company is well balanced, with maturities of 2009 and 2010 “pre-financed” with current cash position

Maturity profile of current financial debt(MUS$)

3

150

2241

2211

40

1 3 5 5 15 24 23 23 13 4 4 4 2

53

202

2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029

Cash position*(MUS$)

122

40

136

-53

245

0

50

100

150

200

250

300

350

Cas

h M

ar-0

9

Apr

-May

09

Sho

ppin

gM

alls

sal

e

Bon

ds is

sue

and

prep

aym

ent

Tota

l

* pro forma jun-09 with malls sale and bonds issueSource: Ripley


Financial debt of MUS$ 670

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Strong financial structure (Cont…)

• Good debt ratios financial flexibility

Consolidated liabilities/ Equity* Net financial debt/ Equity**

0.90x0.87x 0.89x

0.69x

2006 2007 2008 Mar-09

0.39x

0.47x0.55x0.49x

2006 2007 2008 Mar-09

* Consolidated liabilities/Equity : Total Liabilities/ (Equity + Minority Interest)** Net Financial Debt/ Equity : Net financial liabilities / (Equity + Minority Interest)*** pro forma after shopping malls sale

Source: Ripley

0.44x ***

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Financial background

Revenues(MUS$)

EBITDA(MUS$)

1,684 1,7861,890 1,873

2006 2007 2008 . Mar 09LTM

180

143153

187

9.5%

7.7%8.6%

11.1%

2006 2007 2008 Mar 09 LTMEBITDA EBITDA Margin

Source: Ripley


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Ripley Corp – 1Q 2009 Results (MUS$)

Revenues decreasing due to the international crisis (especially on durable goods)

Costs of sales rose due to provisions of the credit business associated to a higher risk (+91% in provision charges)

Loan portfolio reduction explained by credit restrictions in order to keep risk controlled

Provision stock / Gross Loan Portfolio in Chile increased from 12.2% to 16.4% during 1Q 2009.

Negative net income is mainly explained by provision increase (not cash flow)

-25.7-10.4

10.2

-2.4-6.0

-13.2

-16.9

13.1

-30

-25

-20

-15

-10

-5

0

5

10

15

20N

et In

com

e 1Q

2008

∆ R

even

ues

∆ C

osts

of s

ales

∆ SG

&As

w/o

dep

Dep

reci

atio

n

Mal

l Cal

ama

Inco

me

Oth

ers

No

Ope

ratio

nal a

ndta

x

Net

Inco

me

1Q20

09


16

Contents



• Ripley Chile

• Ripley Peru

• Conclusion

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Controller group has an important knowledge of the business

• Calderon family have been connected to retail business for over 50 years excellent knowledge of the industry

• In May 2009, Inversiones Bujorico Ltda.(Calderon Kohon Family) subscribed with Inversiones Conca S.A. (related to Chilean entrepreneur Alvaro Saieh) a promise of selling 20% of Ripley, transaction that should be made before November 30th 2009.

• Alvaro Saieh has a successful experience on very complementary businesses to Ripley (food retail, banking and real estate).

Free FloatMajor Shareholders

Free Float19%

Inversiones Bujorico Ltda.**20%

Inversiones R S.A.*61%

Mutual Funds7.3%

International Investors

19.7%

Pension Funds16.0%

Insurance Companies

1.2%

Retail54.4%

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Partners of the leading group in the shopping malls business

• JV with Mall Plaza (main player of the real state business) in:

• Peru: Aventura Plaza S.A. (40% of property)

• Chile: Nuevos Desarrollos S.A. of Mall Plaza group in Chile

(22.5% of property)

• Divest in mature shopping malls

• Focus in our core business (department store and financial

business)

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Selling process of non strategic and mature shopping malls

Sales in Chile• Mar-09: Sale of participation in Mall Calama (25% of the ownership)

• Selling price: MUS$ 19 approx.

• Apr-09: Sale of 100% of:• Mall del Centro de Santiago• Mall del Centro de Rancagua• Mall Panoramico• Selling price: MUS$ 117 approx.

• Income of these operations for over MUS$94

20

Strategy in real estate

BEFORE

CURRENT

Shopping Mall Selling space (m2) Property RipleyPanoramico 5,671 100%Mall del Centro 18,917 100%Mall del Centro de Rancagua 13,046 100%Mall Calama 44,206 22.5%Marina Arauco 57,968 33%Mall del Centro de Curico 45,911 33%Total Selling Space 81,860

Shopping Mall Chile Selling space (m2) Property RipleyMarina Arauco 57,968 33%Mall del Centro de Curico 45,911 33%Mall Plaza Sur 74,583 22.5%Mall Plaza Alameda 57,355 22.5%Total Selling Space Chile 63,966

Shopping Mall Peru Selling space (m2) Property RipleyTrujillo 44,114 40%Callao 76,460 40%Total Selling Space Peru 48,230Total Selling Space 112,196

21

Successful bond issue – Ripley Chile

On June 25th 2009, Ripley Chile made a successful issue of UF 3,000,000 (MUS$118 approx.)

• Series E: • UF 1,000,000 (MUS$ 39) • Duration: 11 years (21 year period)• Rate: 5.04% (spread of 167 bps)

• Series F:• UF 2,000,000 (MUS$ 79)• Duration: 4.7 years (7 year period)• Rate: 4.45% (spread of 170 bps)

On June 26th was informed an anticipated rescue of the previous bond series of Ripley Chile -series A UF 1.071.428 (MUS$ 42) and series B UF 3.390.625(MUS$ 134). This amount will be paid on July 27th 2009 with the funds from the bond issue of the series E and F and current available cash.

Considering prepayment of series B:

Annual Savings of MUS$1 in financial expenses

Savings in Present Value: MUS$6.2

Average Duration increases from 6.1 to 6.8 years


22

Contents



• Ripley Chile

• Ripley Peru

• Conclusion

Brands & Fashion (Variety and Design)

Purchaseexperience

Convenience and easy Financing

23

Macroeconomic scenario in Chile

IPSA (Chilean stock market index)

3,015

2,550

3,055

Jul-08 Ene-09 Jun-09

1.3%

Currency Exchange Rate (CH$/US$)

526636

536

Jul-08 Ene-09 Jun-09

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New distribution center

• New Distribution center has the most advanced technology in South America. It will:

• Improve customer service• Make more efficient operations• Increase inventory turnover

• On June 22nd was made an official inauguration with the participation of Chilean president, Michelle Bachelet

25

Focus on efficiency

Source: SBIF

2,015

1,932

1,862

1,749

1,687

Dec-07 Mar-08 Jun-08 Sep-08 Dec-08

Continuous improvement: SG&A/m2

Cost efficiency program:• Synergies between retail and credit divisions• New organizational structure• New distribution center


Profitability of the operation

26

Contents



• Ripley Chile

• Ripley Peru

• Conclusion

27

Ripley Peru – Department stores

• 11 stores with a selling space of 102,110 square meters• One new opening in 2009 (Chiclayo)

• Important revenues growth in the last years

316 336387

538

79.03387.653

94.978112.110

2005 2006 2007 2008

Revenues (MUS$) M2


28

Ripley Peru – Retail revenues growth vs. GDP

Source: Ripley, SBS Peru

9.4%7.6%

8.9%

12.6%

15.3%

6.1%

2006 2007 2008

% Var. GDP % Var. Revenues

29

Banco Ripley Peru – Loan portfolio evolution


267195

359

2006 2007 2008

34.6%

18.7%

36.8%

33.2%

26.2%27.9%

Dec-08 Mar-09ROA Banco Ripley 6.2% 5.1%

ROA Financial System 2.6% 2.5%

ROE Banco Ripley 37.3% 30.0%

ROE Financial System 31.0% 30.5%

% Var. Ripley % Var. Market

30



• Ripley Chile

• Ripley Peru

• Conclusion

Contents

31

Why Invest in Ripley?

Source: Ripley, SBS Peru.

Considers consumer loan portfolio of banks and credit cards + Financiera CMR and Cordillera

• Important player in the department store business in Chile and Peru:• Revenues of almost US$2 billion • 49 stores with over 330,000 sqm

• Wide client base: • Over 4 million active customers of Tarjeta Ripley in Chile and Peru

• Strong financial position• Conservative financial strategy• “Pre-financed” two years debt• Good debt profile

• Stock price at attractive levels, reflecting the low period of the economic cycle• P/BV 1.2x

32

Contact Information

• Speakers• Lazaro Calderon – CEO Ripley Corp

• Juan Diuana – CFO Ripley Chile

• Andres Oksenberg – Investor Relations

• Contact:Phone: (+56-2) 694 1042E-Mail: [email protected]

Ripley CorpPresentation July 2009

chile day final - ripley inversiones · 2 ripley corp chile ... • additionally, the debt profile...

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