FIRST QUARTER 2016 Agenda Highligh hlights s of of the period 1 - - PowerPoint PPT Presentation

Earnings Presentation FIRST QUARTER 2016

Agenda

Highligh hlights s of

• f the period

2 3 Overview by Business Units 5

Balance Sheet Financials

6

Q&A

1

Consolidated overview Overview by Country

4

3

Businesses remain resilient with revenues and Same Store Sales growth in local currency across the region except Brazil Adjusted EBITDA margin improved across the region reaching 7.5% (+149 bps YoY) Adjusted EBITDA improved 16,9% despite of currency devaluation across de region Net Debt/ Adj. EBITDA ratio falls 56 bps vs 1Q15 reaching 3.27x. Excluding one offs the ratio was 2.86x in 1Q16

1st Quarter Earnings Release

First t Quarter er Hi High ghlight ights

Focusing ing on Effic ficient ient Core Busines esse ses

4

Non-performing store program implemented 170 stores under program, all already reviewed 15 stores closed to date 15% of the stores achieved positive EBITDA generation and 66% of total stores achieved an EBITDA growth greater that the average of its banner Continue divesting non-core assets Sale of unproductive real estate in Chile As of March, 16 properties had already reached an agreement for sale Due Diligence process of Gas Station business in Colombia in final stage

1st Quarter Earnings Release

Agenda

Highlights of the period

2 3 Overview by Business Units 5

Balance Sheet Financials

6

Q&A

1

Con

• nso

solida lidated ed ov

• verview

ew Overview by Country

4

Revenues

All figures are in CLP million

1Q15

Currenc ncy Impa pact t Low

• wers

rs CLP Reven enue

6

Revenues decreased due to currencies devaluation vs CLP, despite positive SSS across almost all markets

1Q16

2,652,647

• 6.4%

1Q15 1Q16

2,483,844

LatAm currency depreciation against CLP

1st Quarter Earnings Release

40 50 60 70 80 jan/15 jan/15 mar/15 mar/15 apr/15 may/15 jun/15 jul/15 aug/15 sep/15

• ct/15

nov/15 dec/15 jan/16 feb/16 mar/16

ARS

150 170 190 210 230 250 jan/15 feb/15 mar/15 apr/15 may/15 jun/15 jul/15 aug/15 sep/15

• ct/15

nov/15 dec/15 jan/16 feb/16 mar/16

BRL

150 170 190 210 230 jan/15 jan/15 mar/15 mar/15 apr/15 may/15 jun/15 jul/15 aug/15 sep/15

• ct/15

nov/15 dec/15 jan/16 feb/16 mar/16

PEN

0,2 0,22 0,24 0,26 0,28 jan/15 feb/15 mar/15 apr/15 may/15 jun/15 jul/15 aug/15 sep/15

• ct/15

dec/15 jan/16 feb/16 mar/16

COP

COGS SG&A

All figures are in CLP million

1Q15 1Q16

1,763,980 1,912,100 587,777

1Q15 1Q16

629,784

• 6.7%

Cos

• st Managem

gemen ent Drives ves Rob

• bust

t EBITDA TDA

7

• 7.7%

Costs control program yields benefits across business Joint promotional activities with suppliers Centralization of own production Improvement in processes Decrease in travelling & discretionary expenses

Adjusted EBITDA Performance

185,581

1Q15 1Q16

158,759

+16.9%

Double digit adjusted EBITDA growth Considering constant exchange rates YoY, Adjusted EBITDA would have increased by 33.5% Strong performance from financial services, department stores and supermarkets divisions Adjusted EBITDA Margin expanded 149 bps +7.5% +6.0%

1st Quarter Earnings Release

Agenda

Highlights of the period

2 3 Overview

ew by Busi sines ness s Units its

5

Balance Sheet Financials

6

Q&A

1

Consolidated overview Overview by Country

4

9

• Supermarket sales were mainly affected by currency devaluation
• f Argentina, Brazil and Colombia. Excluding Brazil, Supermarket

SSS grew in all countries, moreover traffic increased in Colombia and Chile

• Home Improvement SSS growth QoQ in Chile. In Colombia SSS

increased due to higher traffic

• Revenue growth in Department Stores driven by improved

performance at Johnson and increased omnichannel sales, achieving double-digit SSS growth in Chile & Peru

All figures are in CLP million

1Q15 1Q16 1Q16 1Q15 1Q16

Supermarkets Home Improvement Department Stores

222,927

+10.9%

1Q15 1Q16

247,215 1,989,177 1,813,974

• 8.8%

1Q15 1Q16

• 6.8%

348,006 324,369

Revenu enues es by by Busines ess Units

1st Quarter Earnings Release

10 10

All figures are in CLP million

55,258 55,964 1Q15 1Q16

+1.3%

36,464 39,733 1Q15 1Q16

+9.0%

• Improvement in tenant sales and parking

revenues in Chile

• Increased occupancy rate and updated

tenant contracts in Peru

• Argentina impacted by currency

devaluation

• Revenues increased in Peru and Argentina explained

mainly by the Portfolio expansion, higher fee income collection and increased insurance sales

• Lower business contributions due to increased cost
• f funding in Colombia and currency devaluation

Reven enues es by Busines ess Units Shopping Centers Financial Services

1st Quarter Earnings Release

All figures are in CLP million

1Q15 1Q16 1Q16

Adjusted ed EBITDA TDA by Busines ess s Units

11 11

Supermarkets Home Improvement Department Stores

1Q15

112,361

1Q16

122,087 +8.7%

• In supermarkets Adj. EBITDA increased despite the currency
• devaluation. Adj. EBITDA margin in Chile reached 10.4% in

1Q16 and Argentina, Brazil and Colombia improved over 50 bps YoY

• EBITDA margin expanded by 97 bps in Department Stores

explained by increased profitability at Johnson and better transition among seasons

• Lower EBITDA margin in Home Improvement driven by high

gross margin comparison bases in Chile and slowdown in consumption in Argentina

1Q15 1Q16

7,735 4,819

+60.5%

45,123

1Q15 1Q16

40,377

• 10.5%

1st Quarter Earnings Release

12 12

All figures are in CLP million

1Q15 1Q16

• 0.9%

1Q15 1Q16

+46.9%

43,630 43,217

• Chile reflects higher parking sales and variable income

by greater sales from tenants, partially offset by the impact of the Tax Reform

• In Peru higher EBITDA mainly reflects increased
• ccupancy rates in the Arequipa Mall and the update of

leasing contracts

• Argentina reflects the devaluation of the currency and

higher utilities costs

12,075 17,736

• Higher results from Argentina and Peru after the

portfolio increase in these countries

• In Chile higher profitability driven by lower costs of

funding and the positive impact after the JV with Scotiabank

Adjusted ed EBITDA TDA by Busines ess s Units Shopping Centers Financial Services

1st Quarter Earnings Release

Agenda

Highlights of the period

2 3 Overview by Business Units 5

Balance Sheet Financials

6

Q&A

1

Consolidated overview Overview ew by Coun

• untry

ry

4

Overview ew by Cou

• untry:

ntry: CHILE

14 14

All figures are in CLP million

1Q15 1Q16 1Q15 1Q16

Revenue Performance Adjusted EBITDA Performance

93,990 73,098

+28.6% +7.3%

+9.1% +7.6%

961,745 1,031,718

• Revenue growth across Supermarkets, Home Improvement and

Department Stores

• SSS improvement as a result of higher ticket driven by more

promotional activities, mix adjustment, good performance in campaigns and season categories

• Partially affected by Easter
• Gross Margin improved in supermarkets and department

stores

• Adj. EBITDA growth across the board, driven by lower SG&A

and lower shrinkage

1st Quarter Earnings Release

Overview ew by Coun untry: try: Argentina

15 15

All figures are in CLP million

1Q15 1Q16

• 17.6%

755,499 622,353

1Q15 1Q16

• 9,1%

+9.1% +8.3%

62,470 56,773

• Lower revenues as a result of currency devaluation
• Revenues in local currency increased, driven by growth in

Supermarkets and Home Improvement SSS

• Slowdown in consumption
• Adj. EBITDA increased in Supermarkets and Home

Improvement in local peso terms

• In Chilean peso the Adjusted EBITDA reduced due to the

impact of the Argentine Peso devaluation

%

Growth in local currency

+21.0% +32.3%

Revenue Performance Adjusted EBITDA Performance

1st Quarter Earnings Release

Overview ew by Cou

• untry:

ntry: Brazil

16 16

1st Quarter Earnings Release

All figures are in CLP million

1Q15 1Q16

• 20.5%

476,416 378,855

1Q15 1Q16

+3.7%

8,713 9,037

+2.4% +1.8%

• In Chilean peso terms revenues decreased as a result of

the Real devaluation

• SSS declined by 2.3% as a result of lower sales in Bretas

and non-food in Gbarbosa, which was partially offset by growth in Prezunic, Mercantil Rodriguez and food in Gbarbosa

• SSS improved QoQ as a result of higher food sales
• Gross Margin expanded YoY for the 6th consecutive

quarter, growing 211 bps. This growth is the result of better promotional activity and lower shrinkage

• In supermarkets adjusted EBITDA improved 9.2% in

Chilean peso and margin expanded 53 bps as result of better control expenses and pricing strategy

• 2.9%

+25.0%

Revenue Performance Adjusted EBITDA Performance

Growth in local currency

%

Overview ew by Cou

• untry:

ntry: Peru

17 17

All figures are in CLP million

• Revenues increased 2.9% in Supermarkets and 21.8% in

Department Stores

• In local currency, revenues also grew as a result of

Supermarkets SSS growth YoY and brand consolidation

• Gross Margin expanded 17 bps by increased contribution
• f private label, which was partially offset by higher

promotional activities

• Adjusted EBITDA increased as a result of higher

profitability from department Stores, Shopping centers and financial retail operation

1Q15 1Q16

+5.4% 231,528

1Q15 1Q16

+57.3%

+9.3% +6.2%

244,132 14,465 22,760

+5.7% +58.8%

Revenue Performance Adjusted EBITDA Performance

Growth in local currency

%

1st Quarter Earnings Release

Overview ew by Cou

• untry:

ntry: Colombia

18 18

All figures are in CLP million

1Q15 1Q16

• 9.1%

227,459

1Q15 1Q16

22174.7 %

1.5% 0%

206,785 14 3,021

• In supermarkets in local currency terms, revenues grow

explained by SSS growth after getting traction from food

• Home Improvement, the revenue in local currency increased as a

result of 9.9% growth in SSS

• In Chilean peso terms revenues decreased explain by the

devaluation of the COP against CLP

• Gross margin growth as a result of lower shrinkage,

higher rebates and lower logistic costs

• The profitability improvement was primarily the result
• f our efficiency plan, which decreased headcount and

lowered promotional activity

+6.1%

+1643.9 %

Revenue Performance Adjusted EBITDA Performance

Growth in local currency

%

1st Quarter Earnings Release

4,2%

8.588 6.533

2,9% %

Adjusted EBITDA and Adj. EBITDA margin excluding wealth Tax effect Isolating the effect of the wealth tax paid

• nce a year (Mar 2015

6,519 MM CLP / Mar 2016 5,567 MM CLP

Agenda

Highlights of the period

2 3 Overview by Business Units 5

Balan lance Sheet Financi ancials als

6

Q&A

1

Consolidated overview Overview by Country

4

Since 3Q15 Fair Value of 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.

Net debt evolution (US$ bn) Net leverage (net debt / Adj. EBITDA)

Financia ancial l Rat atios: s: reducing debt and leverage

20 20

2012 2013 6,316 2014 2015 4,684 4,265 3,239

2012 2013

4.6

2014 2015

3.4 3.7 3.3

1Q16

3.0x 3.27 1Q16 3,641

Net leverage (excluding one offs)

1Q16 1Q15

2.86 3.83

1st Quarter Earnings Release

294 294 127 127 231 231 213 213 51 51 780 780 18 18 1.218 34 34 699 699 50 50 40 40 213 213 40 40 14 14 81 81 355 355

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2045

Fix 73% Variable 27%

1Q16

Financia ancial l Rat atios: s: Comfortable Liquidity Position

21 21

Debt amortization schedule (USD MM)

In 2016 includes USD 23 MM in overdraft for working capital

Breakdown by Rate (After CCS) Breakdown by Currency (After CCS)

60% 16% 19% 3% 0% 1% 1%

1Q16

CLP UF USD BRL COP PEN ARS

Fix 63% Variable 37%

1Q15

1st Quarter Earnings Release

46% 15% 31% 1% 4% 3%

1Q15

Agenda

Highlights of the period

2 3 Overview by Business Units 5

Balance Sheet Financials

6

Q&A

1

Consolidated overview Overview by Country

4

Clos

• sing

ing Com

• mments

23 23

Strong start to 2016 Strong performance despite downturn in consumption Continuing to deleverage Store profitability focus remains high priority Argentina showing near-term challenges, with a more favorable long-term growth outlook

1st Quarter Earnings Release

24 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

• f 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.

Costanera Center - Chile

1st Quarter Earnings Release

IRO Phone: +562 2959 0545 mariasoledad.fernandez@cencosud.cl

Natalia Nacif

Senior IR Analyst Phone: +562 2959 0368 natalia.nacif@cencosud.cl

Marisol Fernández

Upcoming Events

• May 26

1Q16 Earnings Conference Call

• June 1 - 2

Bank of America´s Annual Emerging Markets Corporate Conference

• June 14 - 16

Bank of America´s 2016 CalGEMs Conference

• August 3 – 4

10th Annual Credit Suisse CEO/CFO Mid- Summer LatAm Conference

• September 13 & 14

Cencosud Day in Buenos Aires

Valentina Klein

IR Analyst Phone: +562 2200 4395 valentina.klein@cencosud.cl

1st Quarter Earnings Release