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Earnings Presentation 3Q15
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- 3. 3 • Improving trajectorydespite softening retail environment. • Enhanced commercial strategy delivers improved gross margin. • Results impacted by ~CLP34 trillion (USD49 MM) of one offs: severance and inventory charges. • Adjusting asset base to focus on core operations. Third Quarter | www.cencosud.com | Third Quarter Highlights
- 4. 4 Consolidated Revenue Evolution •Modest revenue growth despite currency depreciation in Brazil and Colombia. • Positive SSS in local currencies in most businesses. Consolidated Adjusted EBITDA Evolution • Adjusted EBITDA performance impacted by severance costs and inventory obsolesce provision. • Excluding one-offs, Adj. EBITDA rose, boosted by Colombian, Peruvian and Chilean operations. Third Quarter | www.cencosud.com | 1 All figures are in CLP million 2 For comparison purposes, 3Q14 figures exclude the Financial Retail operation in Chile 3 Adjusted EBITDA excluding one-offs 3Q142 3Q15 2.621.001 2.672.728 +2% 137.546 172.012 3Q1533Q142 3Q15 +44% 119.192 +15%
- 5. 5 Active Workings to ImproveMargins • Commercial strategy drives 200+ bps expansion in gross margin. - Negotiations with suppliers. - Limited promotional activity. Third Quarter | www.cencosud.com | • Continued progress in SG&A control program. • Non-performing store program implemented. - 120 stores under program. - 95 have presented plan for improved results. - 1 store closed to date.
- 6. 6 Adjusting asset baseto focus on core operations • Possible IPO Shopping Centers: Board of Directors approved continuing the project & investment banks were selected for the structuring of the transaction. Third Quarter | www.cencosud.com | • Sold non-core Colombian pharmacy assets • Gas Station sale in Colombia, process in final stage
- 7. 1 Fair Valueof Derivatives was reclassified from “Other gains/losses” to “Net Financial Cost” and “Income/Loss from foreign exchange variations”. For further information please refer to note 35 on Consolidated Financial Statements. 2 Leverage before and after the change in FV of derivatives, excluding one-off items. 7 Net debt evolution (US$ bn) Net leverage (net debt / EBITDA) Breakdown by Rate (After CCS) Breakdown by Currency (After CCS) Third Quarter | www.cencosud.com | Breakdown by Type of Credit 3Q14 4Q14 1Q15 2Q15 3Q15 4.7 4.3 4.2 3.6 3.6 3Q14 4Q14 1Q15 2Q152 3Q152 3.8 4.0 3.5 3.7 3.6 3.8 3.0 3.2 3.3 33% 67% 82% 18% 31% 15% 51% 2% 1% Before the change1 After the change Financial Ratios Fixed
- 8. 8 Revenue Evolution AdjustedEBITDA Evolution • Revenue decline reflects currency depreciation in Brazil and Colombia. • Best Colombian SSS since acquisition. • Prezunic SSS positive for first time in five quarters. • Brazil continues positive trend on gross margin gains SSS evolution by country (local currency) Supermarkets • Ex-one offs, growth driven by Colombia and Peru. • Successful managed commercial strategy to improve gross margin. Third Quarter | www.cencosud.com | Figures in CLP million 1 Adjusted EBITDA excluding one-offs 3Q14 2.027.814 3Q15 1.967.123 -3.0% 3Q14 96.558 -14% 3Q15 3Q151 83.233 106.927 +11% 4.4% 3.8% 16.5% -0.7% -7.7% 4.1% -0.7% 0.8% 4.2% Chile Argentin a Brazil Peru Colombia 27.3%
- 9. 9Third Quarter |www.cencosud.com | Revenue Evolution 3Q14 212.795 3Q15 232.703 +9% 3Q14 3Q15 9.5% 3Q14 6.4% -11.1% -4.4% Chile Peru 3Q15 7.710 -2.481 Adjusted EBITDA Evolution SSS evolution by country (local currency)Figures are in CLP millions Department Stores • SSS growth above inflation in Chile and Peru • Launch of click & collect in early September 2015 • Improved profitability in Chile • Peru narrows its loss on increased scale and synergies achieved with the Chilean operation for private labels
- 10. 10 Figures in CLPmillion 1 Adjusted EBITDA excluding one-offs Third Quarter | www.cencosud.com | • Shopping Center Adj. EBITDA grows 2.9% on improved performance in Argentina and Peru. • Chile profitability was curbed by higher land taxes due to the Tax reform and one-off expenses. Revenue Evolution 51.580 63.050 +22% 3Q14 3Q15 Adjusted EBITDA Evolution 37.667 3Q14 3Q1513Q15 45.906 46.031 +22% +22% 98% 98% 28% 30% Chile Argentina Peru Colombia 96% 97% 91% 89% Occupancy Rates Evolution • Top line growth as a result of higher rents across Argentina & Chile with stable occupancy. 3Q15 3Q14 Shopping Centers
- 11. 11 Figures in CLPmillion 1 Adjusted EBITDA excluding one-offs • Resilient revenue growth in Argentina • Chilean operation facing weather conditions Third Quarter | www.cencosud.com | 297.499 360.823 +21% 3Q14 3Q15 22.730 3Q14 3Q1513Q15 22.443 30.883 -1% +36% Revenue Evolution Adjusted EBITDA Evolution Home Improvement • Affected by one-off charges (CLP 8.4 bn) • Ex one-offs: • Strong performance in Argentina • Narrowed loss in Colombia
- 12. 12Third Quarter |www.cencosud.com | • Chile financial services reported figures explained by the deconsolidation of its financial retail business following the JV with Scotiabank. • Provision rate continues to show healthy trend. • Portfolio continues to grow across the footprint. • Cost of funding increases across the region. 81.041 45.640 -44% +43% 3Q14 3Q15 31.699 3Q14 3Q1513Q15 21.233 21.272 -33% -33% Figures in CLP million 1Adjusted EBITDA excluding one-offs Revenue Evolution Adjusted EBITDA Evolution Financial Services 31.828 10.764 +99% Variation in blue reflects business growth/decrease excluding Chile in both period. Variation in green reflects business growth/decrease including Chile in 3Q14.
- 13. 13 • Healthy operationalresults show retail expertise. • Stable cash generation base from strong shopping center business. • SG&A savings program to improve results. • Further room to expand gross margin. • Target net debt/ EBITDA ratio of ~3.0x by year end, excluding one-offs. Third Quarter | www.cencosud.com | Closing Comments
- 14. Third Quarter |www.cencosud.com | 14 The information contained herein has been prepared by Cencosud S.A. (“Cencosud”) solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities and should not be treated as giving investment or other advice. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. Any opinions expressed in this presentation are subject to change without notice and Cencosud is under no obligation to update or keep current the information contained herein. The information contained herein does not purport to be complete and is qualified in its entirety by reference to more detailed information included in the preliminary offering memorandum. Cencosud and its respective affiliates, agents, directors, partners and employees accept no liability whatsoever for any loss or damage of any kind arising out of the use of all or any part of this material. This presentation may contain statements that are forward-looking subject to risks and uncertainties and factors, which are based on current expectations and projections about future events and trends that may affect Cencosud’s business. You are cautioned that any such forward-looking statements are not guarantees of future performance. Several factors may adversely affect the estimates and assumptions on which these forward-looking statements are based, many of which are beyond our control.
- 15. IRO Phone: +562 29590545 mariasoledad.fernandez@cencosud.cl Marisol Fernández León Senior IR Analyst Phone: +562 2959 0368 natalia.nacif@cencosud.cl Natalia Nacif
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