Earnings Presentation Q12015 May, 2015 This material was prepared - - PowerPoint PPT Presentation

Earnings Presentation Q1’2015

May, 2015

This material was prepared solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities. This presentation may include forward-looking statements or statements about events or circumstances which have not yet occurred. We have based these forward-looking statements largely on our current beliefs and expectations about future events and financial trends affecting our businesses and our future financial performance. These forward-looking statements are subject to risk, uncertainties and assumptions, including, among other things, general economic, political and business conditions, both in Peru and in Latin America as a whole. The words “believes”, “may”, “will”, “estimates”, “continues”, “anticipates”, “intends”, “expects”, and similar words are intended to identify forward-looking statements. We undertake no obligations to update or revise any forward-looking statements because of new information, future events or other factors. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this presentation might not occur. Therefore, our actual results could differ substantially from those anticipated in our forward-looking statements. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. It should not be regarded by recipients as a substitute for the exercise of their own judgment. We and our affiliates, agents, directors, employees and advisors 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 material does not give and should not be treated as giving investment advice. You should consult with your own legal, regulatory, tax, business, investment, financial and accounting advisers to the extent that you deem it necessary, and make your own investment, hedging and trading decision based upon your own judgment and advice from such advisers as you deem necessary and not upon any information in this material.

2

AGENDA

Q1’15 RESULTS BY SEGMENT Q1’15 CONSOLIDATED RESULTS

01 02 03 04

FINANCIAL DEBT

01

Q1’15 CONSOLIDATED RESULTS

117 163 475 604 650 Q1'14 Q1'15 2013 2014 LTM Q1'15 1,406 1,611 5,322 6,147 6,353 Q1'14 Q1'15 2013 2014 LTM Q1'15

Margin 1.2% 1.8% 2.4% 0.6%

 

Highlights Revenues

Margin 8.9% 9.8% 8.4% 10.1%

Double digit growth in Revenues and Adj. EBITDA; decrease in Net Income vs. Q1’14

• Revenues +14.6% vs. Q1’14
• Adj. EBITDA +39.0% vs. Q1’14
• Adj. EBITDA Margin 10.1% vs. 8.4% in Q1´14
• Net Income for Q1’15 was S/. 10 million; excluding FX

and mark-to-market, Net Income increased 84.3%

5

Q1’15 Consolidated Highlights

Million Soles (S/. mm)

• Adj. EBITDA

Net Income

10.2% 1.4%

34 10 63 113 89 Q1'14 Q1'15 2013 2014 LTM Q1'15

36 63 115 202 229 Q1'14 Q1'15 2013 2014 LTM Q1'15 66 103 215 349 386 Q1'14 Q1'15 2013 2014 LTM Q1'15

59% 56% 58% 56% 55% 41% 44% 42% 44% 45%

Q1'14 Q1'15 2013 2014 LTM Q1'15

64% 64% 65% 64% 64% 36% 36% 35% 36% 36%

Q1'14 Q1'15 2013 2014 LTM Q1'15

 

InRetail Shopping Malls InRetail Consumer

Financial Results by Segment

Million Soles (S/. mm) 6

Revenues Revenues

• Adj. EBITDA

Net Rental Margin 75.9% 80.2% 77.3% 82.9% 7.1% 7.1% 6.9% 6.7%

• Adj. EBITDA

1,350 1,520 5,142 5,833 93 101 364 415 6,002 Supermarkets Pharmacies 423

7.0% 81.4% Margin

02

Q4´14 RESULTS BY SEGMENT

02

Q1´15 RESULTS BY SEGMENT

Resultados por Segmentos 2014

Millones de Soles (S/. mm)

Q1’15 Results by Segment

SUPERMARKETS

8

S/. mm Q1'15 Q1 '14 Var% Revenues 973 869 11.9% Gross Profit 251 219 14.6% EBITDA 57 55 4.2% Gross Mg 25.8% 25.2% 25.2% EBITDA Mg 5.8% 6.3% 6.3%

• Opened one Plaza Vea store of 2.9k sqm in Lima (+24k sqm of

sales area since Q1’14, +9.7%)

• SSS growth of 5.6%
• Remodeled and improved layouts on 2 stores (10 stores since

Q1’14)

• Increased gross margin in 59 bps due to more efficient promotional

campaigns and higher commercial and logistic contributions from suppliers

• Efficiencies in SG&A (decrease in 31 bps, excl. D&A) mainly driven

by lower logistic expenses and higher employee productivity

• EBITDA growth of 30.8%, excluding extraordinary income of S/.11

mm in Q1’14 from the sale of an unused landplot. EBITDA margin increased in 80 bps.

01

PHARMACIES

• Opened 5 pharmacies and closed 4 pharmacies, including 2

temporary closings for relocation (107 additional pharmacies since Q1’14, +14.6%)

• SSS growth of 6.4%
• Increased gross margin in 33 bps due to a change in the mix of

products sold

• Higher rental and personnel incentives, partially compensated by

lower marketing expenses and logistic efficiencies obtained

9

S/. mm Q1'15 Q1 '14 Var% Revenues 550 483 13.7% Gross Profit 172 150 14.9% EBITDA 45 39 15.9% Gross Mg 31.3% 31.0% 31.0% EBITDA Mg 8.2% 8.0% 8.0%

Q1’15 Results by Segment

• Expanded 4.6k sqm of GLA (+133k sqm of GLA since

Q1’14, +31.2%)

• Maintained high occupancy rates in malls (~97%)
• Increased gross margin by 460 bps driven by fixed costs dilution and
• perational efficiencies
• Adjusted EBITDA growth of 74.4% mainly explained by the

contribution of new shopping malls (Real Plaza Salaverry, opened in May 2014, and Real Plaza Centro Civico, acquired in August 2014)

• Mark-to-market income of S/.6 mm generated by shopping

mall expansions

01

SHOPPING MALLS

10

S/. mm Q1'15 Q1 '14 Var% Revenues 103 66 55.6% Gross Profit 71 42 66.8%

• Adj. EBITDA

63 36 74.4% Gross Mg 68.7% 64.1% 64.1% Net Rental Mg 82.9% 77.3% 77.3%

Q1’15 Results by Segment

425 499 542 553 558 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 731 754 787 837 838 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15

Quarterly Openings and SSS by Segment

Openings

11

Pharmacies Supermarkets

GLA (‘000 sqm)

Pharmacies

N° Stores

Supermarkets

Sales Area (‘000 sqm) 9.3% 10.8% 8.2% 5.9% 6.4% Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 4.8% 5.2% 2.6% 4.9% 5.6% Q1'14 Q2'14 Q3'14 Q4'14 Q1'15

249 253 261 270 273 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15

N° Stores 98 98 100 101 102 N° Malls 15 16 17 17 17

Shopping Malls SSS Averages 2013: 0.4% 2014: 4.4%

Same Store Sales

SSS Averages 2013: 2.7% 2014: 8.5%

Adjusted EBITDA Evolution

Million Soles (S/. mm)

InRetail Consolidated Pharmacies Supermarkets Shopping Malls

12 45 42 42 81 55 44 48 85 57 Q1 Q2 Q3 Q4 2013 2014 2015 104 101 110 160 117 131 154 202 163 Q1 Q2 Q3 Q4 2013 2014 2015 26 24 26 38 36 43 55 68 63 Q1 Q2 Q3 Q4 2013 2014 2015 34 36 43 41 39 46 52 49 45 Q1 Q2 Q3 Q4 2013 2014 2015

27 50 120 97 120 Q1'14 Q1'15 2013 2014 LTM Q1'15 34 10 63 113 89 Q1'14 Q1'15 2013 2014 LTM Q1'15

• Excl. Forex and Mark-to-Market, Net Income Increased 84.3% vs Q1’14
• EBITDA growth of 39.0%
• 25.7% increase in depreciation expenses due to the

pharmacy’s new distribution center, and new supermarkets and pharmacies stores

• Net financial expenses:
• 43.6% increase in InRetail Shopping Malls due to

increase in total debt to finance growth

• 13.7% reduction in InRetail Consumer due to

lower cost of debt obtained by refinancing

• Forex:
• Q1’15: Loss of S/. 63 mm
• Q1’14: Loss of S/.6 mm
• Mark-to-market:
• Q1’15: Gain of S/.5 mm
• Q1’14: Gain of S/.15 mm

Consolidated Net Income Q1’15 vs Q1’14

Million Soles (S/. mm) 13 Net Income excluding after-tax forex and mark-to-market gains: Net Margin Net Income:

1.2% 2.4% 0.6% 3.1% 2.2% 1.9% 1.8% 1.4%

Net Margin

1.6% 1.9%

03

FINANCIAL DEBT

Financial Debt and Consolidated Capex

Million Soles (S/. mm) 15

Financial Debt

Capex

114 242 333 104 74 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Debt Cash Net Debt 1,668 1,125 542 1,722 324 1,398 2,446 285 2,160 2,499 302 2,197 Debt/Adj. EBITDA Net Debt/Adj.EBITDA

4.0x 3.6x 4.0x 3.8x

1.3x 2.9x 3.6x 3.4x

2012 2013 2014 LTM Q1'15

2014: S/. 792 mm Free Cash Flow Q1’15: S/. 23 mm

16

Debt by Segments

Million Soles (S/. mm) as of March 31st, 2015

Debt / EBITDA: 3.8x Net Debt / EBITDA: 3.4x

Total Consolidated Debt: S/. 2,499 mm

Debt Cash Net Debt 1,347 1,095 976 168 215 306 1,179 880 670 1,139 624 691 161 81 656 977 543 35

v

1,374 148 1,226 1,111 124 987

InRetail Consumer InRetail Shopping Malls

8.2x 5.4x 5.5x 5.0x 0.4x 4.7x 4.9x 4.3x 2012 2013 2014 LTM Q1'15 Debt/EBITDA Net Debt/EBITDA 2.9x 3.0x 3.2x 3.2x 2.0x 2.4x 2.8x 2.9x 2012 2013 2014 LTM Q1'15 Debt/EBITDA Net Debt/EBITDA

For more information please contact: ir@inretail.pe www.inretail.pe