THIRD QUARTER 2016 CONTENT 01. Highlights 02. Progress on Strategy - - PowerPoint PPT Presentation

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THIRD QUARTER 2016 CONTENT 01. Highlights 02. Progress on Strategy - - PowerPoint PPT Presentation

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EARNINGS PRESENTATION THIRD QUARTER 2016 CONTENT 01. Highlights 02. Progress on Strategy 03. Performance by Business 04. Balance Sheet Financials 05. Q&A 2 REVENUES Third Quarter Highlights 2,672,728 2,496,037 -6.6% Revenue

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SLIDE 1

EARNINGS PRESENTATION

THIRD QUARTER 2016

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SLIDE 2
  • 01. Highlights
  • 02. Progress on Strategy
  • 03. Performance by Business
  • 04. Balance Sheet Financials
  • 05. Q&A

CONTENT

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SLIDE 3

Third Quarter Highlights

  • Revenue expansion in local currency in all markets, except Brazil. Revenue

decreased 6.6% YoY in CLP as a result of the devaluation of the Argentine peso (38.3%), Peruvian sol (5.9%) and Colombian peso (4.3%).

  • Increased traffic in Supermarkets Chile, and Department Stores Chile and Peru
  • Better SSS performance in Chile, Argentina and Brazil when compared to 2Q16
  • Despite currency devaluation, Adjusted EBITDA grew 11.5% and margin expanded

100 bps, mainly driven by improved performance at most operations and a low comparison basis .

  • Non recurring events resulting from the implementation of the strategy to drive

sustainable profitable growth:

  • Renewal of the agreement with Colpatria in Colombia: 50/50 JV was extended for a period of

15 years. Aligned clauses to JV with Scotiabank in Chile.

  • Divestiture of Teleticket in Peru
  • Severance payments and provisions of inventory obsolescence in 3Q15.
  • Net profit reached CLP 34,950 million, reflecting a CLP 64,851 million increase due to

better performance at most operations, the positive impact of the exchange difference and non-recurring events in 3Q15.

2,672,728 2,496,037

  • 6.6%

REVENUES

137,546 153,418 +11.5%

ADJUSTED EBITDA

  • 29,901

34,950

NET PROFIT

Mg (%)

6.1%

Figures translated from local currencies to CLP using September 2015 exchange rates. Figures denominated in USD MM

3Q15 3Q16 3Q15 3Q16 3Q15 3Q16 5.1% +33.4% +7.9%

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SLIDE 4
  • 01. Highlights
  • 02. Progress on Strategy
  • 03. Performance by Business
  • 04. Balance Sheet Financials
  • 05. Q&A

CONTENT

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SLIDE 5

Progress on Strategy

1. 1. People

  • ple
  • GPTW score improved for fifth consecutive quarter; 25bps

increase since first measurement.

  • CRM Argentina
  • Single Customer Vision Project
  • Mobile App Jumbo Más
  • Online surveys with loyalty database
  • CRM Colombia
  • Start of CRM program for suppliers: penetration higher

than 75%

  • Re-launch of our loyalty program “Puntos Cencosud”
  • Roll-out VIP customers
  • Development of the alliance with a group of women

(WikiMujeres)

  • Growth of Healthy Lifestyle Program
  • Online registration in one hour
  • Website re-launch – 100% responsive
  • Integration of Easy to the BI model

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SLIDE 6

Progress on Strategy

2. 2. Trend ends (E-com

  • mmerc

rce e & Omni ni-chan hanne nel) l)

  • Click & Collect/Omni-channel
  • 28 stores in Department Stores Chile, 17 stores in Home Improvement Chile
  • Investment in DC for Department Stores increasing capacity by 3x in C&C
  • 39 stores with C&C (Capillarity)
  • E-commerce Supermarkets
  • Colombia: 25 stores with e-commerce delivery
  • Argentina: 59 stores with e-commerce delivery
  • Peru: 6 stores with e-commerce delivery
  • Chile: launch of services “buy online and we will deliver in 90 minutes” & “buy

at the store and we will deliver to your home”

  • E-commerce Department Stores Chile
  • Increased coverage of virtual kiosks to 41 stores
  • Launched Night dispatch window
  • Increased web assortment by 50%
  • E-commerce Home Improvement
  • Chile: continuous process improvements in mobile navigation and website
  • Argentina: 100% stores with store pickup, improved product sheet and online

chat feature to facilitate inquiries

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SLIDE 7

Progress on Strategy

3. 3. Prof

  • fit

itabilit bility

  • Increased private label penetration
  • 170 underperforming stores program:
  • 20 stores closed
  • 65% presents an EBITDA improvement over their respective flags
  • Recent developments on divestiture of non-core assets:
  • Colpatria, Colombia
  • Landbank, Chile
  • Teleticket, Peru
  • Synergies in commercial purchases :
  • Deepening trade agreements with the main 50 food suppliers
  • Development of a regional product portfolio in food commodities
  • Line Reviews
  • Centralization of supply in one brand for several countries
  • Market imported brands between several countries
  • Synergies in non-commercial purchases :
  • Savings through regional negotiations in maritime transport, insurances,

basic supplies (plastic bags, chemicals, etc.) and IT systems (regional contract with SAP, professional fees, Oracle).

  • Local negotiations

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SLIDE 8
  • 01. Highlights
  • 02. Progress on Strategy
  • 03. Performance by Business
  • 04. Balance Sheet Financials
  • 05. Q&A

CONTENT

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SLIDE 9

3T15 3T16

Performance by Business

  • 6.6%

2,672,728 2,496,037

CONSOLIDATED SUPERMARKETS HOME IMPROVEMENT DEPARTMENT STORES SHOPPING CENTERS FINANCIAL SERVICES

REVENUES ADJUSTED EBITDA

137,546 153,418 +11.5%

+7.9% +33.4%

Mg (%)

5.1%

1,966,443 1,831,867

  • 6.8%

361,028 305,912

  • 15.3%

232,703 249,818 +7.4%

  • 3.5%

63,207 60,989

  • 0.1%

45,655 45,588 82,983 91,635 +10.4% 27,027 27,067 7,710 8,877 52,302 44,607 23,281 23,420 +0.1% +15.1% +0.6%

  • 14.7%

Figures translated to CLP with exchange rates as of Sept 2015 Figures denominated in CLP MM “Others” segment excluded from graph

3Q15 3Q16 3Q15 3Q16 3Q15 3Q16 6.1%

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+5.3% +16.6% +7.9% +15.2% +42.3% +21.6% +48.9% +13.9% +1.7% +42.9%

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SLIDE 10

3T15 3T16

Supermarkets

  • 6.8%

1,966,443 1,831,867

CONSOLIDATED

643,388 617,549 +4.2%

  • 28.0%

544,677 392,133 392,316 405,393 +3.3%

  • 7.8%

215,226 198,389

  • 2.1%

196,676 192,562

CHILE ARGENTINA BRAZIL PERU COLOMBIA

REVENUES ADJUSTED EBITDA

82,983 91,635 +10.4%

  • Revenue increase in local currency in all countries, except Brazil and Peru
  • Chile: 3.8% SSS, same as 3Q15 despite slower consumption
  • Argentina: 16.5% SSS, improved against 2Q16 and same as 3Q15, despite lower purchasing power
  • Colombia: 3.5% SSS despite weaker macroeconomic environment
  • In CLP revenues drop as a result of the devaluation of the ARS (38.3%), PEN (5.9%) & COP (4.3%) against CLP
  • Adjusted EBITDA up 21.6% excluding the currency effect and margin expanded 78bps.
  • Adjusted EBITDA margin increase driven by all operations except Brazil, mainly due to efficiencies in expenses

after the headcount reduction

  • Chile expanded its margin by 20bps as a result of efficiency initiatives
  • Argentina’s margin up by 253bps
  • Peru increased its margin by 127bps
  • Brazil’s profitability decreased reflecting higher promotional activity to push sales

Mg (%)

4.2% 5.0%

Figures translated to CLP with exchange rates as of Sept 2015 Figures denominated in CLP MM

Performance by Business

3Q15 3Q16 3Q16 3Q15 3Q15 3Q16

10

+19.0%

  • 2.5%
  • 2.1%

+2.3% +5.3% +21.6%

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SLIDE 11

3T15 3T16

CONSOLIDATED

REVENUES

  • 15.3%

361,028 305,912

CHILE ARGENTINA COLOMBIA

110,299 114,417 235,188 175,507 15,541 15,989 +3.7%

  • 25.4%

+2.9%

ADJUSTED EBITDA

Mg (%)

7.5% 8.8%

27.027 27.067 +0.1%

  • Revenue increase in local currency across all countries
  • Chile partially recovers its growth rate driven by a pick-up in wholesale and improved assortment
  • Argentina increased in local currency, driven by 21.3% SSS growth and one opening
  • Colombia achieved positive SSS for the eighth consecutive month
  • EBITDA margin increased 136bps, reflecting the results of the efficiency initiatives and greater profitability on

the retail segment. Non-recurring events were recorded in 3Q15.

  • Improvements shown at three operations
  • Margin expanded 239bps in Chile
  • In Argentina margin was up 159bps
  • Colombia decreased its negative contribution

Home Improvement Performance by Business

3Q15 3Q16 3Q15 3Q16

Figures translated to CLP with exchange rates as of Sept 2015 Figures denominated in CLP MM

3Q15 3Q16

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+16.6% +48.9% +23.3% +7.7%

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SLIDE 12

CONSOLIDATED

REVENUES

232,703 249,818 +7.4%

3T15 3T16

218,095 233,976 14,608 15,842

CHILE PERU

+7.3% +8.4%

ADJUSTED EBITDA

+15.1%

  • Increased revenues in local currency at both operations
  • Chile improved SSS growth against 3Q15 driven by better performance at perfumery and clothing
  • Peru continues double digit growth (12.6% SSS) for fourth consecutive quarter
  • Adjusted EBITDA up 15.1% and margin expanded 14bps, reflecting greater SG&A dilution due to the

efficiency program - the third consecutive quarter with lower SG&A/sales. In 3Q15 Chile registered non- recurring events

  • Margin expanded 239bps in Chile after greater SG&A dilution
  • Peru reduced its negative EBITDA explained by an improved commercial proposal and store

maturity

7,710 8,877

Mg (%)

3.3% 3.6%

Department Stores Performance by Business

Figures translated to CLP with exchange rates as of Sept 2015 Figures denominated in CLP MM

3Q15 3Q16 3Q15 3Q16 3Q15 3Q16

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+7.9% +13.9% +14.8%

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SLIDE 13

CONSOLIDATED

REVENUES

3T15 3T16

63,207 60,989

  • 3.5%

+15.2%

33,068 36,203

CHILE ARGENTINA PERU COLOMBIA

ADJUSTED EBITDA

52,302 44,607

  • 14.7%

+1.7% 3Q15 3Q16 3Q15 3Q16

22,988 17,449 5,003 5,075 2,147 2,262 +9.5%

  • 24.1%

+1.4% +5.3%

  • Revenues increased in CLP at all operations except Argentina, reflecting currency devaluation
  • Adjusted EBITDA decreased 14.7%, affected by currency devaluation and EBITDA margin reached 73.1%
  • Profitability in Chile affected by the Tax Reform
  • In Argentina, Adjusted EBITDA influenced by currency devaluation
  • Greater profitability in Peru, driven by lower YoY provisions of leasing expenses.
  • Adjusted EBITDA margin expanded in Colombia driven by greater SG&A dilution reflecting lower

property taxes, partially offset by a slight increase in maintenance and uncollectable expenses.

Mg (%)

82.7% 73.1%

Shopping Centers Performance by Business

Figures translated to CLP with exchange rates as of Sept 2015 Figures denominated in CLP MM

3Q15 3Q16 +25,5% +7,6% +10,0%

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SLIDE 14

3T15 3T16

23,281 23,420

+42.9%

+0.6%

REVENUES ADJUSTED EBITDA

3Q15 3Q16

45,655 45,588

+42.3%

  • 0.1%

CONSOLIDATED CHILE

1,399 390 1,648 312 27,812 28,852 12.752 15.082 2,044 1,003

ARGENTINA BRAZIL PERU COLOMBIA

  • In local currency revenues increased in Argentina and Peru, driven by the loan portfolio growth
  • Adjusted EBITDA margin increased YoY reflecting better performance in Chile (including the JV1),

Argentina and Colombia.

  • Deepening value proposition for customers with a good risk profile in Chile and Colombia
  • Adjusted credit policies in Brazil to face the weaker macroeconomic environment
  • In Peru, loan portfolio growth resulted in higher risk in the period. Growth rate was adjusted and

credit policies reviewed.

  • 75.7%
  • 50.9%

+18.3%

  • 81.1%

+3.7%

Mg (%)

51.0% 51.4%

Figures denominated in USD MM Figures translated to CLP with exchange rates as of Sept 2015

1JV with Scotiabank incorporated in “Participation in related companies”

Financial Services Performance by Business

3Q15 3Q16 3Q15 3Q16 +71,6%

  • 83,2%

+25,7%

  • 49,7%

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SLIDE 15
  • 01. Highlights
  • 02. Progress on Strategy
  • 03. Performance by Business
  • 04. Balance Sheet Financials
  • 05. Q&A

CONTENT

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SLIDE 16

Debt Composition

DEBT BY CURRENCY (AFTER CCS) DEBT BY INSTRUMENT DEBT BY RATE (AFTER CCS)

70% 30% 75% 16% 9% 62% 14% 20% 4%

INTERNATIONAL BONDS OTHERS BANKS LOCAL BONDS FIXED CLP Y UF OTHER LATAM USD CLP & UF

3Q16 3Q15

65% 30% 5%

CLP & UF OTHER LATAM USD

67% 33%

FIXED FLOATING

64% 13% 17% 6%

INTERNATIONAL BONDS OTHERS BANKS LOCAL BONDS FLOATING

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SLIDE 17

Comfortable Debt Structure

NET FINANCIAL DEBT EVOLUTION1 (USD BN) NET LEVERAGE (NFD/ADJUSTED EBITDA)

4.6 3.4 3.7 3.3 3.9 3.2

AMORTIZATION SCHEDULE (USD MN)

6.3 4.7 4.3 3.2 3.8 4.1

1Figures translated to USD with end of period exchange rate. 3Q15 and 3Q16 translated using exchange rate as of September 2016.

3Q15 3Q16

2012 2013 2014 2015

3Q15 3Q16

2012 2013 2014 2015 135 149 228 207 51 780 19 1,220 36 702 53 42 229 43 16 56 350 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2045

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SLIDE 18

Consolidating Strategies to Support Long- Term Sustainable Profitable Growth

  • Further enhancing the customer experience
  • Establishing a strong and lean operational base
  • Continue divestiture of non-core assets and review of store portfolio
  • Commitment to prudent financial management
  • Diversified portfolio positioned to benefit from retail recovery

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SLIDE 19
  • 01. Highlights
  • 02. Progress on Strategy
  • 03. Performance by Business
  • 04. Balance Sheet Financials
  • 05. Q&A

CONTENT

19

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SLIDE 20

Th The inf nfor

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ained ed in in th this do docum umen ent ha has bee een pre prepare ared by by Cen Cencosud ud SA SA ( "Cen Cencosud

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for inf nformati

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ell securi ecuriti ties es and nd shoul uld not not be be tre treat ated ed as as gi giving investment tment adv dvice or

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SLIDE 21

Upcoming Events

UBS Global Emerging Markets 1x1 Conference November 29 – December 1

New York, USA

Santander XXI Latin-American Conference January 18 – 20

Cancun, Mexico

Credit Suisse Latin America Investment Conference January 31 – February 20 Sao Paulo, Brazil

Contacts

Marisol Fernández IRO

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

Natalia Nacif Senior IR Analyst

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

Valentina Klein IR Analyst

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

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