Corporate
Presentation
2016 YE
INVESTMENT HIGHLIGHTS
THE STRATEGY
LOOKING AHEAD
2
WHY CENCOSUD?
1
LEADING SOUTH AMERICAN
MULTI-FORMAT RETAILER1
 5 Business Divisions & 5 countries
 Leadership positions across the region
 Market Cap USD 7.9 billion
 138,160 employees
 1,118 retail stores + 53 shopping centers
 3.6 mm sqm of retail space
 778,848 sqm of shopping centers GLA to
third parties
4
SEASONED MANAGEMENT TEAM
 Sound Corporate Governance standards
in line with regulatory requirements for a
fully registered U.S. issuer (NYSE)
 9 Seasoned Board Members
 3 Paulmann Family members
 2 Independent members
 Board of Directors Committee:
 Total of 3 members; 2 independent
2
PREMIER BRAND PORTFOLIO WITH AN
INTEGRATED MULTI-FORMAT STRATEGY
3
UNPARALLELED GROWTH TRACK
RECORD HOLDING VALUABLE
LAND BANK
 6.2 mm sqm of land bank to fuel
future growth across the region
 Recognized brand portfolio
TOTAL SELLING SPACE (‘000 sqm)
CAGR: 5.0%
3.629
2012
5
LISTED AT NYSE & BCS2
RATED IG BY MOODY’S AND FITCH
 Listed on BCS (2004)
 46.3% Free Float
 Daily Avg Trading Volume: USD8.4mm
 Total Trading Volume: USD2,109mm
 Listed on NYSE (2012)
 Rated Investment Grade by Moody’s and
Fitch Ratings
 Member of the DJSI
6
4.238
4.387
4.417
4.418
2013
2014
2015
2016
PRIVILEDGED POSITION TO BENEFIT
FROM IMPROVED ECONOMIC
REGIONAL ENVIRONMENT
 Leadership positions across the region
 Peru:
 132,517 sqm land bank
 La Molina Project
 Brazil and Argentina
 Turnaround economy
 3.2 mm sqm land bank in Argentina
1 Figures as of December 2016. Market Cap as of December 2016 denominated in USD using a constant Exchange rate of CLP 669.47 per US dollar
2 BCS stands for Bolsa de Comercio de Santiago (Santiago Stock Exchange)
3 Total trading volume full year 2016
3
CENCOSUD: A PAN-REGIONAL MARKET LEADER
JV
COLOMBIA
3RD SUPERMARKET
2ND HOME IMPROVEMENT
JV
PERU
4TH SUPERMARKET
Leadership position in Northeast,
Minas Gerais, and Rio de Janeiro
2ND SUPERMARKET
4TH DEPARTMENT STORES
CHILE
2ND
JV
SUPERMARKET
HOME IMPROVEMENT
ND
2 SHOPPING CENTERS
2ND DEPARTMENT STORES
2ND
BRAZIL
ARGENTINA
2ND SUPERMARKET
1ST HOME IMPROVEMENT
1ST SHOPPING CENTERS
Note: Financial Services provided through a Joint Venture in Chile (Scotiabank), Brazil (Bradesco) and Colombia (Colpatria)
44
CENCOSUD IS A PAN-REGIONAL MARKET LEADER
REVENUE BREAKDOWN BY GEOGRAPHY (FY 2016)
US$ 15,435 mm
ADJUSTED EBITDA BREAKDOWN BY GEOGRAPHY (FY 2016)
US$ 1,144 mm1,2
9%
11%
5%
3.9% mg
8.3% mg
10%
1%
0.5% mg
42%
15%
26%
58%
7.7% mg
10.3% mg
24%
CHILE
•
•
•
•
•
245 supermarkets
35 home improvement
79 department stores
25 shopping centers
F.S.: JV with Scotiabank
ARGENTINA
•
•
•
•
283 supermarkets
51 home improvement
22 shopping centers
Financial services
BRAZIL
•
•
•
•
211 supermarkets
Atacarejo format
3 different regions
F.S.: JV with Bradesco
PERU
•
•
•
•
91 supermarkets
10 department stores
4 shopping centers
Financial services
COLOMBIA
•
•
•
•
103 supermarkets
10 home improvement
2 shopping centers
F.S.: JV with Colpatria
Note: Figures converted to US dollars using a constant exchange rate of CLP 669.47 per US dollar
1 EBIT represents profit attributable to controlling shareholders before net interest expense and income taxes. EBITDA represents EBIT plus depreciation and
amortization expenses. Adjusted EBITDA represents EBITDA plus exchange differences and gains (losses) from indexation units minus revaluation of assets
2 mg= Adjusted EBITDA margin
55
STRONG PLAYER IN FOOD RETAIL, A MORE RESILIENT BUSINESS TO ECONOMIC DOWNTURNS
REVENUE BREAKDOWN BY BUSINESS (FY 2016)1
US$ 15,435 mm2
2% 2%
Retail accounted for 96% of
Revenues
ADJUSTED EBITDA BREAKDOWN BY BUSINESS (FY 2016)1
US$ 1,144 mm (7.4% Adjusted EBITDA margin)2,3
Complementary
Business
Retail accounted for 71%
of Adjusted EBITDA4
Complementary
Business
9%
11%
US$11,185mm
13%
5.7% mg6
US$222mm
US$1,933mm
72%
11.5% mg
US$83mm
US$1,683mm
48%
US$641mm
US$367mm5
20%
6%
17%
US$122mm
4.9% mg
46.146.1% mg
US$272mm
US$265mm
Supermarkets
Home Improvement
Department Stores
74.174.1% mg
Shopping Centers
Financial Services
1 Graph excludes the “Others” Segment. EBIT represents profit attributable to controlling shareholders before net interest expense and income taxes. EBITDA represents EBIT plus
depreciation and amortization expenses. Adjusted EBITDA represents EBITDA plus exchange differences and gains (losses) from indexation units minus revaluation of assets.
2 “Others” Segment contributed with USD 11 million in Revenues and USD (195) million in Adjusted EBITDA in 2016
3 Includes US 105 million of one-offs, mainly related to the sale of non-core assets
4 Excluding the “Others” Segment
66
5 Revenues and Adjusted EBITDA from Shopping Centers doesn`t include related party transactions
6 Mg = Adjusted EBITDA margin
PROVEN GROWTH TRACK RECORD1
•
(CAGR:
7.6%)
Total selling space grew from 2.6mm
sqm in 2010 to 4.4mm m2 in 2016
Consolidation and synergies
IPO
NYSE
Internationalization process
•
(CAGR:
8.9%)
Revenues increased from US$9.3bn in
2010 to US$15.4bn in 2016 (CAGR: 8.9%)
Peru
16,3
16,4
15,4
15,4
13,7
11,4
Consolidation in the Chilean market
9,3
9,2
8,2
IPO
BCS1
5,6
Opening of firsts
supermarkets
4,7
3,8
1,0
1,4
1976 1982
1988
2,1
1993 2000 2002 2003 2004 2005 2006 2007
2008 2009
1 Revenues denominated in USD using a constant Exchange rate of CLP 669.47 per US dollar
2 BCS stands for Bolsa de Comercio de Santiago (Santiago Stock Exchange)
2010 2011
2012 2013
2014 2015
2016
77
STRONG LIQUIDITY POSITION AND CONFORTABLE AMORTIZATION SCHEDULE
DEBT BY CURRENCY (AFTER CCS)
● Ongoing efforts to improve the Company’s liquidity
position
rating since its first international bond issuance
● Fitch Ratings:
● Moody’s:
Others
LatAm
4%
Others
LatAm
7%
● Cencosud has maintained its Investment Grade
USD
17%
BBB- (stable)
USD
32%
CLP & UF
64%
CLP &
UF
76%
Baa3 (stable)
● Reduced exposure to dollar denominated debt
NET FINANCIAL DEBT EVOLUTION1
DEBT AMORTIZATION SCHEDULE (USD MM)2
6,3
40
1 Debt denominated in USD using end of period exchange rate of each year
2 Amortization schedule does not consider overdrafts or comex liabilities. Presented net of Mark to market of derivatives (excluding forwards)
40
15
81
197
2045
51
2031
2021
2020
2019
2018
2017
2016
2015
2014
2013
34
2030
57
52
2012
350
217
2041
214 230 210
2029
NFD/Adjusted EBITDA
(times)
2028
3,2
2027
3,3
2026
3,7
714
638
2025
3,4
991
2024
3,2
4,6
3,7
Net Financial Debt
(US$ mm)
2023
4,3
2022
4,7
88
EXPERIENCED MANAGEMENT TEAM
CORPORATE GOVERNANDE AND BOARD OF DIRECTORS
MANAGEMENT TEAM
• Sound corporate governance standards in line with regulatory
requirements for a fully registered U.S. issuer (NYSE)
• 9 Seasoned Board members:
• Board of Directors Committee
• David Gallagher
• Richard Büchi (Independent)
• Mario Valcarce (Independent)
Independent
members
Heike
Paulmann K.
Peter
Paulmann K.
Roberto
Philipps
David
Gallagher
Cristián
Eyzaguirre
Julio Moura
Richard
Büchi
Jaime
Soler
10 years in the
industry
Horst
Paulmann K.
• 3 Paulmann Family members
• 2 Independent members
(SVS1):
Bronislao Jandzio
6
Rodrigo Hetz
25
Carlos Madina
SCM
18
8
Mario
Campodónico
SM Peru
7
HHRR
4
18
MD of Audit
11
CEO
19 years in the
industry
Rodrigo
Larraín
CFO
Ricardo Yunge
SM Chile
Cristián
Gutierrez
SM Brazil
11
Dag
Loebenstein
CLM
3
Tomás Zavala
CSM
19
Matías Videla
SM Argentina
20
Eric Baset
SM Colombia
14
Patricio Rivas
FSM
22
Carlos
Mechetti
GC
Mario
Valcarce
#
14
Antonio Ureta
HIM
10
Ricardo Bennett
DSM
Years in
Cencosud
1 As required under Chilean law, we have established a Directors’ Committee composed of three
directors. The Company has also established an audit committee comprised of three non-management
members of our Board of Directors. The members are Roberto Philipps, David Gallagher and Cristián
CEO: Chief Executive Officer. HHRR: Human Resources. CFO: Chief Financial Officer. CLM:
Eyzaguirre, each of whom is independent within the meaning of the SEC corporate governance rules.
Corporate Logistic Manager. CSM: Corporate Strategy Manager. SCM: Shopping Centers Manager.
Our board of directors has determined that Roberto Philipps is “audit committee financial expert” as
SM: Supermarkets Manager. FSM: Financial Services Manager. GC: General Counsel. HIM: Home
defined by the SEC.
Improvement Manager. DSM: Department Stores Manager.
99
INVESTMENT HIGHLIGHTS
THE STRATEGY
LOOKING AHEAD
10
10
THE THREE PILLARS OF OUR STRATEGY
1
OUR CLIENT
2
KEY TRENDS
3
BUSINESS
PROFITABILITY
 Healthy organization
 Connectivity
 Efficiency and productivity
Strong organizational culture, with an
outstanding work environment
• Native digital consumer
• Austerity culture
• Digital marketing
• Cost control
• Social networks
Client centric
• The client is first
• Memorable shopping experience
• Sustain our differentiation in service
• Client centric culture
 Sustainable brands in tune with the
environment
• Clients
• Community
• Suppliers • Environment
• Collaborators
 Health & Wellness
• Organics
 Constant growth and
strong market share
Positive SSS across all
geographies except Brazil
• Functional
• Healthy
 Fidelization and
Data Mining
STRONG VALUES
 Bottom line,
profitability and
cash flow generation
11
11
CORPORATE SOCIAL RESPONSIBILITY
CONTRIBUTORS
•
•
•
•
•
•
Committed to work together
and build the best team
CUSTOMERS
•
Proud to be part of
Cencosud
Promote happiness, good
work environment where
trust, mutual respect and
inclusion prevail
•
•
Policy of Diversity and
Inclusion
Training programs to
promote career development
Great place to work
•
We work to create
memorable shopping
experiences for our
customers
SUPPLIERS
•
Seek to be strategic allies
with our suppliers
•
Grow while promoting
progress and development
of every party interacting
with us along our value
chain
Deliver transparent
information on a timely
basis
•
Enhance the emotional
connection of our clients
with our brands
Consumer Loyalty Award
by ALCO1 (Jumbo)
•
•
COMMUNITY
•
Care about the communities
around us
•
Generate awareness
among our stakeholders
•
Seek to create social value
•
•
Enhance long term
sustainability
Seek to preserve and
protect the environment
by reducing our
environmental footprint
•
“Eat Healthy” program
promoted by Jumbo
•
Energy efficiency
•
Ropa por Ropa (Paris)4
•
ECOKIT (Easy
Argentina)5
•
Alliances with local
entities such as ADO
Chile
Cenconline Platform (B2B)
Special payment program
for small & medium size
suppliers (30 days)
ENVIRONMENT
•
“Conciencia Celeste” (social &
environmental commitment)
•
Alliance with United Way
(Volunteer activities)
Participation in2: CNC,
•
ASACH, SOFOFA, Chile
transparente, among others
Publication of missing children
pictures in Easy Arg catalogs
1 ALCO = Customer experience consulting firm
2 CNC stands for Cámara Nacional de Comercio (National Chamber of Comerce); ASACH stands for Asociación de Supermercados de Chile (Chilean Association of Supermarkets): SOFOFA stands for Sociedad
de Fomento Fabril (Manufacturing Corporation).
3 Ado Chile = Chilean organization which has the objective of supporting local athletes thru private and governmental contributions
12
4 Ropa por Ropa = Campaign aiming to recover clothes in disuse thru the of offering discounts
5 Bottle caps recycling program. Bottle caps are used for the production of sustainable products. Sales related to such products are then donated to the Garrahan Hospital Foundation.
INVESTMENT HIGHLIGHTS
THE STRATEGY
LOOKING AHEAD
13
GUIDANCE AND INVESTMENT PLAN FOR 2017
CAPEX DISTRIBUTION BY INVESTMENT TYPE
USD 500 mm
•
The Company expects to achieve revenues of USD 16,500
million1 in 2017 explained by a better performance from the
businesses, online business growth, selected store openings
and an improved regional economic environment, particularly in
Peru, Argentina and Brazil
•
Adjusted EBITDA anticipated in the range of 7.3% to 7.6%
•
Capex Plan of USD 500 million for 2017 and USD 2,500 million
for 2017-2020
Remodeling and
Organic Growth
21%
23%
56%
Technology, Logistics
and Omnichannel
Mantainance and
recurring Capex
Working
Spotlights
•
Reinforcement of value proposition and
store competitiveness through increased
store remodeling, standardization of
operational processes and improved
logistic capabilities
•
Omnichannel developments, innovation
and leadership in new trends
•
Efficiency, productivity and financial
discipline
14
OPPORTUNITIES BY COUNTRY
CHILE
1.
Solid economy, growing below its
potential (GDP growth 2017E of 1.9% &
2018E 2.5%)
2.
Land bank of 2.7 million sqm
3.
Develop medium size formats (~1,000
sqm)
4.
5.
Full multi-format: 6 retail flags + Shopping
+ Financial Services
Drive financial business growth together
with Scotiabank
6.
Leaders in food e-commerce, strong
growth in non-food
7.
Costanera project expansion
8.
Further reorganization at Santa Isabel
PERU

Political change, confidence in the country’s
economy

COLOMBIA

Consolidated team with local market
experience
Higher growth & lower inflation expected
(GDP growth of 3.8% in 2017 and 4.0% in
2018 - Inflation 2.85% in 2017 & 2.5% in
2018)

Omni-channel, e-commerce and
telephone sales development

Profitability upside for our current assets

Young country: 2/3 of the population in full
production, savings and investment capacity

Our brands are consolidating

Low penetration of the modern channel

Great development potential together with
land bank and unrivalled locations

Excellent land bank

Wong with an unbeatable positioning in the
high income segment & potential to 3x Paris
share

The best loyalty program – Bonus
15
OPPORTUNITIES BY COUNTRY
ARGENTINA

Change in economy trend expected
for 2017
BRAZIL

End of recession, growth expected to
resume in 2018

Challenging environment due to
bankruptcy of Rio the Janeiro and
Minas Gerais States

Renowned brands, with history and
prestige in their markets

Built a strong local team,
acknowledged by the market

Closeness format with Jumbo brand

Increased competition from
wholesale format and informal
market

Market opening to imports

Leaders in e-commerce


Consolidated team / Strong local
player
Transformational initiatives in supply
chain, pricing, selection and efficiency

Commercial synergies, improving
margin and competitiveness
16