ripley corp january...

Ripley Corp January 2019

PHASE IVPROFITABILITY AND SELECTIVE GROWTH

PHASE IIISCALE

PHASE IIREPOSITIONING

PHASE IBEGINNING

First store in

Santiago

Beginning of credit business

First department

store

Opening of Ripley Parque

Arauco

First store in

Peru

Opening of Ripley Bank

Chile

IPO of Ripley Corp

Acquisition of 22.5% of NuevosDesarrollos S.A.

Opening of Ripley

Colombia

First bond placed by Ripley

Bank Chile

Closing Ripley

Colombia

Consolidation of Mall Aventura in

Peru

Over 60 Years of History

1956 1985

1976 1993

1997 2005

2002 2009

2013 2015

2014 2016

Organic growth

2017-2018

• Present in Chile and Peru• Listed in Santiago Stock Exchange and a member of the 30 Largest Chilean

Companies included in S&P Index

Ripley by Segments

Revenues: MMM$457

• MMUSD 725

EBIT: MMM$70

• MMUSD 111

Loan Portfolio: MMM$1,205

• MMUSD 1,911

82 branches

1,742 (Th) cards w/debt

Revenues: MMM$1,225

• MMUSD 1,944

EBITDA: MMM$37

• MMUSD 59

76 stores

484,803 m2

Online channel: + 40% YoY

Retail

Chile 67%

Peru33%

Sep-18 LTM Revenues

MMUSD 2,697

18%

60%

22%

Referential EBITDA(2)

27%

53%

20%

Assets

Real EstateBanking

Notes: Ripley’s functional currency is Chilean pesos. However for referential purposes, all amounts throughout the presentation are represented in USD at a fixed rate of 630.43 CLP/USD Data LTM as of September 2018. Segment details do not consider central offices Corp, Chile nor Peru.(1) Referential EBITDA considers the proportional EBITDA from non-consolidating investments properties (13%).

Revenues: MMM$1,701

• MMUSD 2,697

EBITDA: MMM$170

• MMUSD 269

Market Cap: MMM$1,123

MMUSD 1,781

Employees: 24,122

Ripley Corp

Revenues: MMM$26

• MMUSD 41

Invest. properties: MMM$511

• MMUSD 810

EBITDA(1): MMM$ 47

• MMUSD 75

13 malls

GLA: 329,775 m2 owned

Ripley by CountryR

eal E

stat

e

47 stores

291,919 m2

EBITDA: MMM$22

• MMUSD 35

Loan Portfolio: MMM$841

• MMUSD 1,334

1,273 (Th) cards w/debt

EBIT: MMM$49

• MMUSD 78

11 malls (1 fully owned)

Investment properties: MMM$312

• MMUSD 495

EBITDA(1): MMM$33

• MMUSD 53

29 stores

192,884 m2

EBITDA: MMM$15

• MMUSD 24

Loan Portfolio: MMM$364

• MMUSD 577

469 (Th) cards w/debt

EBIT: MMM$21

• MMUSD 34

2 malls fully owned

Investment properties: MMM$199

MMUSD 316

EBITDA: MMM$14

• MMUSD 22

Ripley Chile Ripley Peru

Ban

kin

gR

etai

l

Rea

l Est

ate

Ban

kin

gR

etai

l

Notes: Data LTM as of September 2018. Segment details do not consider central offices Corp, Chile nor Peru.(1) Referential EBITDA considers the proportional EBITDA from non-consolidating investments properties (13%).

Diversified Net Assets Structure Evolution

Note: Amounts do not include operation in Colombia. EBITDA: EBIT + Depreciation + amortization + interest expenses.

20% 25% 24% 23%

61% 63% 59% 54% 55% 52%

22% 21% 21% 21% 21% 24%

17%17%

2014 20162015 2017

Real Estate

Banking

Retail + Central offices

Sep-182013

Net Assets

EBITDA + Cash flows from/to JV shopping malls

Positive Operational Performance Evolution

Banking

Retail + Central offices

Real Estate + JV cash flows

62%

11%

LTM sep-17

15%

73%

12%

-8%

77%

30%

2016

15%

LTM sep-18

7%

2015

4%

73%

11%

2017

16%

81%

15%

2014

-1%

81%

21%

2013

27%

78%

Key Considerations

Over 60 years of experience in the retail industry in Chile and 20 years of experience in Peru, with vast knowledge of our clients and their purchase behavior

1

Continuous omnichannel development through strengthening the digitalization and e-Commerce channels in the retail and banking businesses

2

Profitable and low leveraged banking businesses, strongly integrated with the retail business. Banks are regulated by the SBIF(1) in Chile and SBS(1) in Peru

3

Stores in the best locations, along with modern distribution centers, allow the development of the retail business

4

Real Estate business with investments in various shopping centers, in the best locations and with projects at different levels of maturity

5

Solid financial stance with a healthy composition and controlled leverage indicators6

(1) SBIF: Superintendence of banking and financial institutions; SBS: Superintendence of banking, insurance and pension funds.

Retail Business

Banking Business

Real Estate Business

1

2

3

Index

Retail Business

Wide presence in Chile and Peru, with leadership in both countries

(1) Market-share calculated based on LTM sep-18 revenues, from companies with public information.(2) Does not consider Oechsle and other minor retailers since information is not publicly available.

Ripley38,0%

Falabella54,9%

Cencosud7,0%

80% of our selling surface is located in main shopping centers in major cities

Chile

Peru

Ripley18,5%

Falabella34,8%

Cencosud24,4%

AD Retail7,5%

Hites 4,8%

La Polar7,0%

Tricot3,0%Ripley

18,0%

Falabella34,3%

Cencosud24,5%

AD Retail8,4%

Hites 4,9%

La Polar7,2%

Tricot2,8%

Market-share LTM sep-17 (1)



1

Ripley37,0%

Falabella54,8%

Cencosud8,2%


Controlled growth of our selling surface

291.919287.753269.446276.080276.080272.3074746

42434342

20172016201520142013 Sep-18

N° of storesSelling surface (m2)

Selling surface Chile

192.884192.884192.884177.799173.189

156.842 2929292726

22

Sep-1820172016201520142013

N° of storesSelling surface (m2)

Selling surface Peru

556 626 635 643 646 645

1.0991.179 1.181 1.211 1.282 1.299

1.927 1.944

LTM sep-18

Chile

Peru

20172013

1.656

2016

1.854

2015

1.816

2014

1.806

Sales evolution (MMUSD)

SSS Evolution

-6%

-4%

-2%

0%

2%

4%

6%

2014 2015 2016 2017 9M18

Chile Peru

Retail Business 1

Retail Business

Large logistic infrastructure in place

Ripley Chile’s distribution center has a surface of 67,000 m2. Meanwhile, Ripley Peru’s distribution center has a surface of 45,000 m2

Both distribution centers have growth potential for the online and physical channels

Stores in the best locations, along with self-sufficient distribution centers, allow the development of the retail business

1

B2C e-Commerce in Chile 1999 – 2017 (MMUSD)

Greater emphasis in omnichannel experience and digitalization

Recent developments:

Online virtual assistant, Mobile POS, Mobile apps

MercadoRipley.com (Ripley’s Marketplace) allows third parties to sell their products through Ripley’s website

Launched in 2017 in Chile and in 2018 in Peru

Millions of visits to Ripley’s website in Chile and Peru

Awards

2015 2016 2016 2017

Source: Ripley Corp, Estimates from Santiago’s Chambers of Commerce. CAGR: compound annual growth rate.

Online sales YoY growth

40% 40% 40% 42%

23%25%

75%

41%

2014 2015 2016 2017

Chile Peru

2018

4.000

3.0742.480

2.0361.592

1.2751.066

730514447353294203947248362415

20

12

20

11

20

10

20

09

20

08

20

07

20

06

+25%

+36%

20

17

20

16

20

15

20

14

20

13

20

05

20

04

20

03

20

02

20

01

20

00

19

99

CAGR

CAGR

e-Commerce Business and OmnichannelExperience

1

Retail Business

12

CAMPAÑA #ElijoSerTestigo

No más Bullying

What we have been working on:

Increase traffic on our online and physical stores

Marketplace

Growing product availability in Ripley.com andenhanced look and feel of the website

Customer delivery focus

Entertaining store

Development of omnichannel and digitalexperience

Online virtual assistant

Omnichannel new tools

Mobile retail apps / digital store

Emphasis in fashion & private brands

Positioning of Ripley brand beyond retail

Success in high impact social campaignso Women relevanceo Chile’s Telethon / social commitmentso Anti-bullying

1

Retail Business

Banking Business


1

2

3

Index

Banking Business

Chile

Peru

47 branch offices

#1 in credit card market-share

#4 in the banking industry of credit card loans

3,8% ROA, the highest in the banking industry

Ripley27%

Cencosud + Scotiabank

17%Santander

14%

Banco de Chile13%

Banco Estado10%

BCI8%

Others11%

Source: SBIF and SBS, last available data. (1) As a percentage of the total credit cards in the industry.

Credit cards market-share(1)

Credit cards market-share(1)

35 branch offices

#2 in credit card market-share

3,0% ROA, second highest in the banking industry

Banco Falabella17%

Banco Ripley15%

Financiera Oh!12%

Interbank11%

BCP11%

Crediscotia9%

Banco Cencosud8%

Others17%

2

500 520 497 498 504 469

1.170 1.288 1.270 1.293 1.339 1.273

Peru

Chile

Sep-18

1.742

2017

1.844

2016

1.792

2015

1.767

2014

1.808

2013

1.670

Cards w/debt

385 516 570 564 577

1.0291.189

1.184 1.235 1.345 1.334

303

2017

1.909

2016

1.805

2015

1.699

2014

1.574

2013

1.332

Peru

Chile

Sep-18

1.911

Loan Portfolio (MMUSD)

163 195 223 234 223

353411

435 446 469 502

143Peru

Chile

LTM sep-18

725

2017

703

2016

669

2015

630

2014

575

2013

496

Revenues (MMCLP)

26 25 34 33 33 34

6281 65

81 73 78

Chile

LTM sep-18

Peru

111

2017

106

2016

114

2015

99

2014

106

2013

89

EBIT (MMUSD)

Note: Amounts in CLP currency, converted to USD for reference

Banking Business 2

Note: According to the information presented by the regulators SBIF in Chile and SBS in Peru

0

5

10

15

20

25

3Q

18

2Q

18

19,8

1Q

18

Oct

-18

1Q

17

4Q

17

3Q

17

2Q

17

2Q

16

3Q

16

4Q

15

2Q

15

3Q

15

3Q

14

4Q

14

1Q

15

1Q

14

2Q

14

1Q

16

4Q

16

Ripley Bank Ripley Bank’s averageChile’s Industry

ROE ROA

0

5

10

15

20

25

3Q

18

Oct

-18

17,6

2Q

18

1Q

18

4Q

17

3Q

14

2Q

16

4Q

16

1Q

17

2Q

17

3Q

16

3Q

17

4Q

14

1Q

15

2Q

15

3Q

15

1Q

16

4Q

15

2Q

14

1Q

14

Ripley Bank Peru’s Industry Ripley Bank’s average

ROE ROA

Chile

Peru

Profitable business with low leverage and highly integrated with the retail business

0

2

4

6

8

3Q

14

2Q

14

1Q

14

4Q

14

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

Oct

-18

4,5

2Q

18

3Q

18

0

1

2

3

4

5

1Q

14

2Q

14

3Q

14

4Q

14

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

Oct

-18

3,5

2Q

18

3Q

18

%

%

%

%

Banking Business 2

Healthy risk indicators in a more defiant macroeconomic scenario

(1) All Indicators shown as a percentage of total loan portfolio(2) In October 2016, Ripley Bank Chile changed its risk provisions model aligning it to the SBIF definitions.

1,0%

1,5%

2,0%

2,5%

3,0%

3,5%

4,0%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec0,0%

0,2%

0,4%

0,6%

0,8%

1,0%

1,2%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2015 2016 2017 2018

Provision expenses(2)

(Does not consider contingent nor additional provisions)

Chile

Peru

Over 90 days NPLs Provision expenses

Over 90 days NPLs

0,0%

0,3%

0,6%

0,9%

1,2%

1,5%

1,8%


2015 2016 2016 Old model 2017 2018

3,0%

3,5%

4,0%

4,5%

5,0%

5,5%

6,0%


Banking Business(1) 2


Digitalization

New Home Banking

Banking App

Strengthen loyalty programs

Puntos Go

Growing number of alliances

Data analytics

Growth of loan portfolio and cards, maintainingrisk under control

Increase preference and use

Launch of current accounts and debit cards

Growth of Ripley’s credit card outside Ripley store

Banking Business 2

Retail Business

Banking Business


1

2

3

Index

Strength of the segment and its solid evolution

Ripley Corp’s ownership in real estate businesses (sep-18)

EBITDA LTM sep-18 (MMUSD)

1621

1710

212222

10

17,8%

31,3%5,7%27,6%

4,7%

Total

75

64

Nuevos Desarrollos S.A.

Inmob. Mall Vina del

Mar S.A. (2)

Mall Aventura S.A.

Mall Concepción

& leased properties

LTM sep-18

LTM sep-17

Non-consolidating investments

More Details about the investment properties in the appendix.(1) On July 2016, the division of Aventura Plaza S.A. was executed and Ripley began to consolidate the operation of Mall Aventura S.A.(2) On April 2016 Ripley’s ownership of Inm. Mall Vina del Mar came up to 50% after the purchase of an extra 16.67% of it.(3) Amounts equivalent to the total of assets weighed by the percentage of Ripley Corp’s ownership.

2018 2017

Ownership CountryInvestment properties(3)

(MMUSD)

EBITDA LTM(3)

(MMUSD)

Net Income LTM(3)

(MMUSD)

GLA(3)

(m2)Malls

GLA(3)

(m2)Malls

Mall Concepcion & leased properties 100% Chile 121 10 10 36,800 1 26,000 1

Nuevos Desarrollos S.A. 22.5% Chile 240 21 44 105,075 8 76,605 6

Inm. Vina del Mar S.A. 50% Chile 134 22 18 59,700 2 58,500 2

Mall Aventura S.A. 100% Peru 316 22 13 128.200 2 122,900 2

Total 810 75 85 329.775 13 284,005 11

Real Estate Business: Shopping Malls 3


Recent openings in Chile Mall Concepcion Office Tower (GLA 10,975 m2) Nuevos Desarrollos Mall Los Dominicos (GLA 93,000 m2)

Mall Arica (GLA 34,000 m2)

Extensions in Chile and Peru:

Inmobiliaria Mall Vina del Mar• Marina Arauco (est. 2H18) (GLA 27,000m2)• Curico (est. H18) (GLA 8,000 m2)

Mall Aventura• Arequipa (est. 2H18) (GLA 7,000 m2)• Santa Anita (est. 2H19) (GLA 30,000 m2)

Greenfield projects: Iquitos (est. 2H21) (GLA 52,000 m2) San Juan de Lurigancho (est. 2H21) (GLA 64,000 m2)

Note: Estimated opening dates

Real Estate Business: Shopping Malls

Appendix

Recent Highlights

• The stock of Ripley Corp is part of the new S&P Chile index, which considers a group of publicly listed companies with high levels of presence and liquidity in the Chilean stock market

• Partial opening of Mall Marina Arauco’s expansion:

Expansion’s GLA: 27.000 m2

Total GLA(1): 97.000 m2

• NCD issuance by Banco Ripley Peru

PEN 65 million, one-year debt issuance

• On Premise to Cloud migration for online sales of retail and launching of Ripley’s MarketPlace in Peru

(1) Includes Mall Marina, Boulevard Marina and expansion

• Ripley was able to maintain its place as one of the best companies to work in Chile according to the Great Place to Work ranking.

Shareholders and Management

Involved shareholders and an executive team with vast experience

Name Position Years in Ripley

Felipe Lamarca President 13

Michel Calderon Vice-president 22

Mauricio Balbontin Director 1

Debora Calderon Director 7

Andres Calderon Director 23

Veronica Edwards Director 7

Laurence Golborne Director 4

Alejandro Rosemblatt Director 1

Hernan Uribe Director 14

Main Executives (1)

Exp: 4 years

RIPLEY BANK PERU CEORene Jaime

Exp: 3 years

RIPLEY BANK CHILE CEOAlejandro Subelman

Exp: 7 years

CORPORATE RETAIL CEOFrancisco Irrarazaval

Exp: 10 years

MALL AVENTURA CEOJavier Postigo

Exp: 7 years

COMPTROLLERMiguel Nuñez

Exp: 35 years

CORPORATE VPSergio Hidalgo

Exp:2 years

CFORafael Ferrada

35 years of experience

RIPLEY CORP CEOLazaro Calderon

Calderon Volochinsky

Family50%

Calderon Kohon Family

10%

Pension Funds22%

Mutual Funds5%

Others13%

Board MembersShareholders (nov-18)

(1) Years in Ripley Corp.

Net income reached MM$34,319 (+10.5%), while the operational result grew21.7%:

Significant improvement in the retail segment in Peru and the banking segment in Chile

Greater SG&A efficiencies at a consolidated level

Strength of the real estate segment

Depreciation of the PEN (-3.8%) had a negative impact on results measured in CLP

RIPLEY CORP

(amounts in MMCLP) 9M18 9M17 Var %

Total revenues 1,194,826 1,169,044 2.2%

Gross profit 447,948 432,242 3.6%

SG&A (402,822) (395,153) 1.9%

EBIT 45,126 37,089 21.7%

Income/loss before taxes 45,370 37,848 19.9%

Income/loss from continued operations 34,307 31,133 10.2%

Income/loss from discontinued operations 13 (62)

Non-controlling interest 0 (0)

Net income 34,319 31,071 10.5%

EBITDA 110,055 101,826 8.1%

Accumulated

Ripley Corp’s 9M18 Results Summary

143

55

126121

258

141

-8

171132

269-1,2%

+35,8%+8,9%

+4,2%

+2,0%

+2,9%

Net IncomeDiscontinued operations

EBTEBITEBITDAGross Profit

1.002983

Revenues

2.697

2.622

LTM sep-18

LTM sep-17

Sep-18 LTM Net Results (MMUSD)

Leverage

Excludes banking businesses

Bonds56%

Banks39%

Other5%

Non-banking businesses: Financial Debt Decomposition (sep-18) Non-banking businesses: NFD / Equity

Excludes banking businesses

(1) Includes hedging liabilities and financial leasings.(2) Considers only capital, Nov-18.

0,480,52

0,39

0,45

0,27

0,36

0,43

-7,1%-13,6%

Sep-18Sep-1720172016201520142013

1,231,251,18

0,99

0,78

-1,6%

20172016201520142013

Ripley Corp: NFD / Equity Ripley Corp

Includes all Ripley Corp’s businesses

31

34

6475

111627

Total

564

2021 +

343

4Q203Q102Q201Q204Q193Q192Q191Q194Q18

Non-banking businesses: Debt calendar(2)

Excludes banking businesses (MMUSD)


Ownership CountryGLA (m2)

Mall Concepcion & leased properties 100% Chile 36,800

Nuevos Desarrollos S.A. 22.5% Chile 105,075

Mall Plaza Alameda 22.5% 59,100

Mall Plaza Sur 22.5% 76,900

Mall Plaza Mirador Bio Bio 22.5% 45,000

Mall Las Americas 21.0% 24,000

Mall Plaza Egana 22.5% 92,000

Mall Plaza Copiapo 22.5% 46,100

Mall Plaza Los Dominicos 22.5% 91,500

Mall Plaza Arica 22.5% 34,000

Inm. Vina del Mar S.A. 50% Chile 59,700

Marina Arauco 50% 70,000

Mall del Centro de Curico 50% 49,400

Mall Aventura S.A. 100% Peru 126,000

Mall Aventura Arequipa 100% 68,600

Mall Aventura Santa Anita 100% 57,400

Total 716,800

Total Ripley 327,575

This presentation contains forward-looking statements, including statements regarding the intent, belief or current expectations of the Company and its management. Investors are cautioned that any such forward-looking statements are not guarantee of future performance and involve a number of risks and uncertainties including, but not limited to, the risks detailed in the company’s financial statements, and the fact that actual results could differ materially from those indicated by such forward-looking statements.

Disclaimer

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