Resultados Grupo Pão de Açúcar

CORPORATE PRESENTATION
August 2013
2
Leading Worldwide Company
Global Powers of Retailing
Deloitte Top 250 Retail Companies of the World 2012
34th Largest Company of the World,
the Largest of Latin America
Carrefour
US$ 115 bi
WalMart
US$ 447 bi
GPA
US$ 28 bi
Cencosud
US$ 16 bi
8th Largest Company of the World,
considering GPA + Casino
Carrefour
US$ 115bi
1st
2nd
1st
2nd
34th
63rd
Net Sales
WalMart *Casino (including
GPA)
US$ 447 bi
US$ 75 bi
8th
Net Sales
3
Our Strategic Guidelines
To continue our sustained growth
Growth
•
•
•
•
Aggressive organic expansion plan
Business strategy by region
Multichannel opportunities
Increase group’s ROCE
Market share gains with
higher profitability
Operational
excellence
•
•
•
•
Price competitiveness
Expenses rationalization
Optimized logistics
Intra-group synergies gains
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Stores located in 20 of the 27 Brazilian States*
Strong logistic network
NORTH-EAST
Brazil’s GDP: 13.5%
GPA Sales**: 7.4%
NORTH
Brazil’s GDP: 5.3%
GPA Sales**: 0.3%
Super: 31
Hyper: 19
Electro: 54
Self-service
Wholesale: 9
Total: 113
Hyper: 1
Electro: 2
Total: 3
SOUTH-EAST
MIDDLE-WEST
Brazil’s GDP: 55.4%
GPA Sales**: 81.9%
Brazil’s GDP: 9.3%
GPA Sales**: 7.3%
Super: 14
Hyper: 13
Electro: 81
Self-service
Wholesale: 4
Total: 112
55 Distribution centers in the country
Centralization rate: 85% GPA Food***
100% GPA Non-Food
SOUTH
Brazil’s GDP: 16.5%
GPA Sales**: 3.1%
Super: 4
Hyper: 2
Electro: 89
Self-service
Wholesale: 1
Total: 96
Super: 325
Hyper: 103
Electro: 745
Cash & Carry: 53
Proximity: 141
Total: 1,367
* Stores as of 1Q13. Gas station and drugstores are not included.
** Participation in GPA 2012 gross sales.
*** Excluding Assaí operation.
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Company changes as the environment moves
2005
In 2011, class C showed the biggest growth in the last 7
years, representing 54% of Brazilian population.
2011
A/B
42,4MM
26,4MM
62,7MM
103,0MM
92,9MM
E-COMMERCE
D/E
CASH & CARRY
C
45,2MM
GPA: limited offering
(only Food, 556 stores)
GPA: multiformat business for both Food
and Non Food, 1,828 stores
Population in each social class (in million)
Source: O Observador 2012, Cetelem BGN Research – IPSOS 2011
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Multiformat Strucuture
To reach all income classes at distinct purchase moments
NON FOOD
FOOD
Banner
Avg. Sales
Area (sqm)
Public
Stores
Hypermarket
6,000
ABCD Classes
138
Supermarket
1,200
BCD Classes
209
Supermarket
1,200
AB Classes
165
Neighborhood
350
ABCD Classes
141
Cash & Carry
5,000
Transformers
Food Service
67
Format
Drugstores
-
ABCD Classes
157
Gas Stations
-
ABCD Classes
85
Specialized Store
1,600
BCD Classes
576
Specialized Store
800
ABC Classes
395
E-Commerce (B2C)
-
ABC Classes
-
962
Stores
54%
of gross
sales
1,933
Stores
971
Stores
46%
of gross
sales
E-Commerce (B2B)
*Stores as of 1Q13.
-
-
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Change in supermarkets format
Improved assortment of higher value-added products
CONVERSION
Protein
Bakery
Dairy
Frozen Fish
Protein
• Jun/10 to Aug/11:
Fish
221 stores converted
Frozen
• Increased exposure of higher
Fruits
Veg.
Dairy
value-added products
Groceries
• SSS >15%
Groceries
Bakery
Fruits
Veg.
Coffee
Checkouts
Checkouts
New layout favors categories with higher
value-added
Merchandise
Perishables
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Neighborhood stores review
More perishables and services
CONVERSION
PREVIOUS FORMAT (until 1H12)
Focus: groceries, self-service
SALES AREA: from 150 to 200 sqm
BAKERY: baken product (selfservice)
NEW MODEL
Focus: perishables, service
SALES AREA: from 300 to 400 sqm
BAKERY: services and broaden
assortment of products
BUTCHERY: vacuum packed
SLICED CHEESE/MEAT: sliced at
the purchase moment , selfservice exposure and broaden
assortment
GROCERIES: day-by-day product
BUTCHERY: customized services
FRUITS/VEGETABLES: day-by-day
GROCERIES: refined products line
product
FRUITS/VEGETABLES: day-by-day
products better exposed.
SLICED CHEESE/MEAT: ready-to-go
(from industry)
LOW DIFFERENTIATION AB/CD
income classes
SKUS: 3,600
GROCERIES: 2,800
PERISHABLES: 800
DIFFERENTIATION AB/CD income
classes
SKUS: 3,600
GROCERIES: 2,600
PERISHABLES: 1,000
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Hypermarket: Increase Attractiveness
Strengthen one-stop-shop concept
New Apparel Positioning
• Fashion’s new approach: near to specialized stores in terms of collection,
communication and suppliers, but with hypermarket pricing strategy.
Private Label Development
• Strategic approach due to higher margin, profitability and customer loyalty;
• Launch of Finlandek in April/13: new general merchandise brand focused on
non-food categories in housewares and bed, bath & table linen.
Malls Revitalization
• Expansion of current galleries and development of new spaces to increase
customers flow and complement the one-stop-shop concept.
Electronics and Home Appliances Corner Stores
• We are evaluating to implement some pilots of Pontofrio and Casas Bahia
store-in-store corners in Extra hypermarkets, innovating the operation of these
non-food departments.
Restructure in cash-and-carry model
Focus on resellers and foodservice
MANAGEMENT MODEL EVEN MORE FOCUSED ON THE
TARGET PUBLIC:
> foodservice/catering/hospitality
> small/medium resellers
> users (associations, condos, churches etc.)
30% OF THE ASSORTMENT WAS RENEWED:
> bakery and butchery were eliminated, giving
space to the storage of frozen/refrigerated foods
> private label focused only on foodservice/catering
STORAGE AREA WAS ENLARGED:
> increased square footage and higher ceiling stores,
improving operational processes and inventory
turnover
New format store opened in October 2012
João Pessoa /PB
ASSAÍ NEW FORMAT
> OPERATIONAL COST REDUCTION
> FOCUS ON ORGANIC EXPANSION
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Real Estate Strategy
Accelerate GLA and stores expansion plan
•
•
•
•
•
•
Expand, develop and renovate commercial centers and malls, 189,000 sqm in 2012;
Boost recurring lease revenue;
Increase traffic in stores;
Complement the one-stop-shop experience;
Improve the Group’s profitability;
Increase GLA by 35,000 sqm in 2013 and accelerate this growth over the coming years:
- Expanding the existing galleries in hypermarkets, where there is space and potential demand;
- Developing commercial centers, a new model of layout and tenants mix, similar to shopping malls,
offering advantages and convenience of one-stop shop concept to the neighborhood.
1st Commercial center in the new concept: Américas, Barra da Tijuca – RJ (Launched in June/2013)
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Viavarejo Turnaround Program
Main opportunities to boost growth and profitability
Approx. R$ 200-250 million in synergy gains in 2013
will come from the following areas:
Area
Main opportunities
Distribution center sharing between the Group
Headquarter
Expenses
10%
Store
Operation
15%
Technology
Expenses
20%
Other
5%
Supply Chain Freight outsourcing
Furniture assembly workforce optimization
Optimization in administrative personnel in store
Supply
Chain
20%
Store
Operation
Reduction in store consumables
Reduction in overtime expenses
Reduction in inventory loss expenses
Technology
Contracts renegotiations
Expenses
Optimize personnel
Marketing
30%
Headquarter
Expenses Reduction of indirect materials/services consumption
Shared services expansion
Marketing
Media expenses reduction
Graphic materials expenses reduction
More than 60bps increase
in Ebitda margin YoY
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High potential growth of Brazilian e-commerce
Good perspectives for our online business
Development of new strategic business
Partiu Viagens (online travel agency) and Barateiro
(minor damaged products with up to 60% discount)
Expansion of product portfolio
Apparel category sales in Extra banner.
The forecast is to increase the website’s
assortment for 2013.
Increase efficiency/productivity
Synergies with brick-and-mortar stores,
centralized distribution centers and
multichannel opportunities.
Launch of Market Place
in Extra.com.br, adding 30 new stores at the
opening, doubling the website’s assortment.
Internet and E-commerce Facts in Brazil
▪ 36.5% of households have internet access;
▪ 29.6% of mobile phones have broadband access;
▪ In 100 people, only 8.6 have access to broadband
CAGR of 108% over the past 5 years;
▪ Almost 42.2 million people, 22% of total population,
have made at least one online purchase.
Source: Teleco / Ebit, April 2013
Source: Teleco / Ebit
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There is still room to grow in Electronics
Stronger opportunities in North, North-East and Middle-West regions
PORTABLE
Radio
Coffee Maker
Vacuum Cleaner
Ar Conditioner
Food Processor
MP3
Penetration Brazil
84
27
18
10
8
10
Stronger Opportunities
MW and South
All regions
North, NE and MW
All regions
HOME APPLIANCES
Penetration Brazil
Stronger Opportunities
PHOTO & VIDEO
Penetration Brazil
Stronger Opportunities
COMPUTERS
Penetration Brazil
Stronger Opportunities
North, North-East and Middle-West
Fridge
Laundry Sink
Washing Machine
Microwave
Duplex Fridge
Freezer
58
47
49
51
41
10
North, NE and
South
All regions
SP, RJ and Middle- Rio de Janeiro,
West
North and NE
Televison
North, North-East and Middle-West
DVD
Digital Camera
Videogame
Flat TV
81
39
26
30
99
Middle-West and South
North, North-East and Middle-West
Computer
Notebook
Tablet
Mobile Phone
39
21
3
91
All regions
Video Camera
5
All regions
-
Source: Kantar WorldPanel – Jan/Feb 2013 Analysis of Penetration (% of households that own the item)
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Growth strategy
Focus on Minimercado, Assaí and Casas Bahia banners expansion
in the Northeast and Middle-West regions.
The average number of stores openings in 2013,
to achieve 4.0% of sales area growth guidance:
- Extra Hiper: approximately 3 stores
- Extra Supermercado: approximately 5 stores
- Pão de Açúcar: approximately 5 stores
- Minimercado: around 100 stores
- Assaí: 12 to 15 stores
- Home Appliances (bricks & mortar): 30 to 40 stores
2Q13 Faster store opening pace
GPA Food
 29 stores were opened: 23 Minimercado Extra, 3 Assaí, 2 Pão de Açúcar and 1 Drugstore.
 On June, 30: 962 stores and sales area of 1,614 thousand sqm, 2.9% increase over the past 6 months..
Viavarejo
 4 Casas Bahia stores were opened, specially in the Northeast region.
 On June, 30: 971 stores and sales area of 1,412 thousand sqm, 1.3% increase over the past 6 months.
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2Q13 Results
Highlights:

Focus on expansion: opening of 33 new stores. In 1H13, 58 stores were opened with a sales area increase
of 2.2% (more than half of the guidance for 2013);

Same-store sales:
- Food categories grew above inflation, considering the Easter effect reached 7.8%, highlighting the
flags Assaí and Minimercado Extra;
- Non-food categories grew 9.3% benefited from the acceleration of Viavarejo (bricks&mortar stores
and e-commerce);
Adjusted EBITDA up 20.6%, due to the gain of synergies, implementation of new processes and reduction
of operating expenses at Viavarejo;


Adjusted net income up 35.8%, due to the operational development combined with control over financial
expenses;

Other operating income and expenses totaled R$350 million, worth mentioning the provisions for tax
risks (R$ 163 million), effects related to the association between Pontofrio and Casas Bahia (R$ 67
million), restructuring expenses and results from fixed assets (R$ 51 milion) and provisions related to labor
claims and others (R$ 69 million).
Outlook:

Accelerated organic expansion of all formats in 2H;

Renovation and development of commercial galleries: goal of 35,000 m2 additional GLA by the end of
2013;

E-commerce growth above market;


Government’s ‘Minha Casa Melhor’ program should sustain furniture and home appliance sales;
Additional operational efficiency gains, specially at Viavarejo.
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GPA Consolidated
Including
Real Estate Projects
2Q13 Results
Gross Sales
R$ million, 2Q13 x 2Q12
Same-store-sales growth vs 2Q12
Adjusted EBITDA
Adjusted Net Income
Indebtedness
14,919 +10.4%
ML +7.3%
14,919 +11.2%
ML +7.3%
R$ million, 2Q13 x 2Q12
Adjusted EBITDA margin
958 +20.6%
7.2%
958 +37.6%
7.2%
R$ million, 2Q13 x 2Q12
Adjusted net margin
327 +35.8%
2.4%
327 +129.1%
2.4%
06/30/12
Net Debt(1) (R$ billion)
Net Debt/EBITDA(2)
4.90
1.44x
06/30/13
Consolidated Net Financial Expenses
(R$ million)
2.4%
2.2%
164
170
121
129
2Q12
2Q13
4.17
1.16x
% of net
sales
(1)
(2)
Excluding
Real Estate Projects
Net Debt with payment book
EBITDA of the last twelve months
GPA Food
Viavarejo
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GPA Food*
Retail and Self-Service Wholesale
Gross Sales
Adjusted EBITDA
Adjusted Net Profit
2Q13
R$ million, 2Q13 x 2Q12
7,984 +8.8%
R$ million, 2Q13 x 2Q12
Adjusted EBITDA margin
512 +8.1%
7.0%
R$ million, 2Q13 x 2Q12
Adjusted net margin
172 +26.6%
2.4%
Same-store sales growth, impacted by the early Easter in 2013, which was celebrated in the 1Q, estimated
effect of approx. 300 basis points: Minimercado Extra and Assaí posted double-digit growth.
Retail
Self-Service Wholesale
Outlook :
Operating expenses reduction over the year,
the gains may be converted into lower prices
for consumers to increase store traffic. The
Company expects to increase its market share
over the next quarters.
Outlook :
Strong sales growth, combining dynamic LFL growth
and expansion plan in 2H: expectation of opening 8
new stores;
Focus on organic expansion: 26 stores were
opened in 2Q13, of which 23 Minimercado Extra.
Reinforcing Assaí’s presence over Brazil in 1S13:
6 stores openings in 5 new States;
In the last 10 months, doubled its presence from 6 to 12
Brazilian States.
Improve the Group’s ROCE.
*Exclui empreendimentos imobiliários
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Eletro (Bricks&Mortar stores and E-Commerce)
2Q13
Gross Sales
Adjusted EBITDA
Adjusted Net Profit
R$ million, 2Q13 x 2Q12
Same-store-sales growth vs 2Q12
6,936 +14.2%
SSS +11.8%
R$ million, 2Q13 x 2Q12
Adjusted EBITDA margin
446 +100.5%
7.4%
R$ million, 2Q13 x 2Q12
Adjusted net margin
Bricks&mortar stores
SSS of 9,5%: effective marketing campaigns
combined with the commercial strategy,
highlighting the Mother’s Day purchases;
Gains in sinergy: rationalization of personnel,
marketing and IT expenses (-160 basis points
decline in SG&A).
Outlook:
155
+20x
2.6%
E-commerce
Increased sales and market share:
supply processes and pricing improvement;
Awards:
- Websites classified in the Diamond category (E-bit);
- Extra.com.br was elected by clients as the most
beloved Brazilian e-commerce website;
- NPC was elected the most innovative company in
customer service (Consumidor Moderno).
Participation in the “Minha Casa Melhor” program: special credit line for furniture and consumer appliances;
Continuity of Productivity Plan to boost Viavarejo’s growth and profitability: more than 60bps increase in
Ebitda margin YoY;
E-commerce: market share gains and results close to break even.
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Guidances 2013
GPA Food
GPA Non-Food
Financials
Gross sales
in R$ billion
EBITDA
2013 margin
Net fin. expenses
as % of net sales
Above
34.5
Above
28.5
Above
63.0
Around
7.7%
Above
6.6%
Around
7.2%
Below
1.8%
Below
2.9%
Below
2.3%
Operational
Capex
1.5
in R$ billion
Expansion (sqm)
growth vs Dec/12
(1)
Above
2.0
0.5
6.0%
2.0% to 3.0%
(1)
Above
4.0%
Does not consider the settlement agreement signed with Brazil’s anti-trust authorities (CADE).
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Ownership Structure
Free Float
49.6%
Banco Itaú
50.4%
50%
Controlling Group
44%
36%
FIC
Financial JV
14%
53%
47%
50%
6%
Casas Bahia Founders
Klein Family
Management
As of June 30, 2013.
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Investor Relations Contacts
Grupo Pão de Açúcar (GPA) | Viavarejo
Investor Relations Team
Phone: +55 (11) 3886-0421
Fax: +55 (11) 3884-2677
gpa.ri@grupopaodeacucar.com.br
www.gpari.com.br
www.viavarejo.com.br/ri
> Foward-looking statements
> The forward-looking statements contained herein are based on our management’s current
assumptions and estimates, which may result in material differences regarding future results,
performance and events. Actual results, performance and events may differ substantially from
those expressed or implied in these forward-looking statements due to a variety of factors, such as
general economic conditions in Brazil and other countries, interest and exchange rate levels, legal
and regulatory changes and general competitive factors (whether global, regional, or national).
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