May 2014 Morgan Stanley Global Emerging Markets Conference London
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Contents Company Overview
Company Challenges Financial Highlights
2
La Polar in the Chilean Retail Industry Retail Market Share – 4Q
Established in 1920, the brand has been present in the Chilean market for almost a century.
10% 6%
Falabella
35%
Cencosud Ripley
21%
Hites La Polar
40 stores in Chile, 15 in Santiago , 25 in regions 8.000 employees
29%
Sales per square meter (USD$) – 4Q Number of stores 4Q-2013
20 Private Labels
42 2,630
2,677
519 M active credit card holders
41
77 1,668 1,455
1,464
1,611
40
15 1,235
1,162
1,172
1,237
3 Falabella
Cencosud
2013
Ripley
2012
Hites
La Polar
Retail
..
15.6
Retail Income (Last 12 months) 7,5 6,8
7,1
6,9
SSS 2013: 11%
317
9.2
7,3
324
330
7,0
306
298 12M 4Q 2012
12M 1Q 2013
12M 2Q 2013
Incomes LTM ($CLP MM)
27%
9.5
12M 3Q 2013
12M 4Q 2013
UF/M2
28% Industry
26% 26% 25%
72
76
12M 4Q 2012
12M 1Q 2013
24%
82
86
89
12M 2Q 2013
12M 3Q 2013
12M 4Q 2013
Increase in Gross Margin 24%
Gross Margin LTM (%) Falabella
ParĂs
Ripley
Hites
4
Retail EBITDA Retail (Last 12 Months) 0,2%
2
0,2%
0,5%
1
0,0%
1
0
-7
.. .
5% Industry
-3
-0,5%
-2 -1,0%
-0,9%
-4
-1,5%
-10 -2,0%
First year of positive Retail EBITDA
-6
-2,5% -8
-2,4%
-3,0%
-10
-3,5%
-3,3% -12
-4,0% 4Q 12
1Q 13
2Q 13
3Q 13 Retail EBITDA
4Q 13 EBITDA Margin
5
Financial Financial Income (Last 12 months) 179
Loans Portfolio Incomes 80
139
70
121
Loans Portfolio increase : CLP $ 180 MM
112
114
60 50 40 30
54
53
56
61
4Q 12
1Q 13
2Q 13
3Q 13
68
20 10 0
26,2%
DEC´11
22,6%
MAR´12
19,1%
JUN´12
16,1%
SEP´12
12,4%
DEC´12
12,9%
MAR´13
10,8%
JUN´13
8,3%
7,9%
SEP´13
DEC´13
4Q 13
NPLs 7,9%
6
Financial Financial EBITDA (Last 12 months) 10
14,0%
EBITDA8 increase CLP
12,2%
$ 11 MM
12,0% 10,0%
8,5% 6
8,0%
6,3%
8
4
4
2
6,0% 4,0%
5
2,0% 0,0%
0
-1 -3
-2
-2,0%
-1,5% -4,0%
-4
-5,1%
EBITDA Financial 4Q 12
1Q 13
2Q 13
Ebitda Margin 3Q 13
-6,0% 4Q 13
7
First year with positive EBITDA Consolidated EBITDA (Last 12 months) 10
2,2%
1,5% 5
.. .
10% Industry 3,0%
2,0%
9 6
1,0%
1
0
0,0%
0,1%
-1,0%
-5
-8 -13 -2,0%
-2,3% -10 -3,0% -3,6%
EBITDA TOTAL
EBITDA Mg
-15
-4,0% 4Q 12
1Q 13
2Q 13
3Q 13
4Q 13
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Contents Company Overview
Company Challenges Financial Highlights
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Profitability 1
Company Challenges
Operational Efficiency 2
Debt Restructure 3
10
Profitability
RETAIL Margin increase (Boost private labels) Sales Increase/sqm Profitability Multi-Channels
Financial Retail
Company Challenges Operational Efficiency
Keep NPLs Increase in the number of costumers Boost other financial products
Debt Restructure
11
Operational Efficiency Optimization of logistic processes Profitability
New Service Model Company Challenges
Decresase SG&A
Operational Efficiency
Debt Restructure
12
Debt Restructure Profitability
ďƒź No funding for further growth
Company Challenges Operational Efficiency
Debt Restructure
ďƒź High financial expenses, makes it difficult to generate profits
13
Contents Company Overview Company Challenges Financial Highlights
14
Consolidated Income Statements: 2013 USD M$
2013 723,8
% Income
2012 639,9
% Income
Cost of Sales Margin
(470,7) 253,1
-65% 35%
(481,8) 158,1
-75% 25%
SGA (w/o depreciation)
(241,4)
-33%
(228,1)
-36%
0,1 16,2
0% 2%
(81,0)
-13% -11%
Revenues
Operating Income EBITDA
(73,3)
Depreciation
(11,6)
(11,0)
Non - Operating Profit Profit (loss) before taxes
(42,1)
519,9
(42,0)
-6%
438,8
Benefits (expenses) income tax 14,0
(74,2)
Profit (loss) Chile
(28,0)
364,6
Profit (loss) Colombia
(80,6)
(23,7)
Profit (loss) Consolidated
(108,6)
341,0
69%
15
Cash Flow Cash Flow Statements
31-12-2013
31-12-2012
USD M$
USD M$
(123,3)
9,1
Cash flow (used in) investing activities
(54,0)
(8,0)
Cash Flow (used in) financing activities
(31,0)
229,2
(208,2)
230,4
247,2
16,7
38,9
247,2
Net decrease in cash and cash equivalents
2,0
(4,1)
Cash and cash equivalents at the beginning of the period
3,1
7,1
Cash and cash equivalents at the end of the period
5,1
3,1
Cash flow from (used in) operating activities
Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period
Cash Flow of Discontinued Operations
16
Cash Flow USD M$ Capital Increase
$240 Loans Portfolio Increase
CAPEX SERNAC
EBITDA Colombia Interests: 16 Buy Back Debt: 13 Others
Nov - 12
Final $38
Dec- 13 17
Appendix
18
Summarized Balance Sheet – December 2013
Assets Current Assets Cash & Equivalents Inventory Short Term Receivables Others
2013 441 40 93 247 60
2012 594 263 91 206 33
Liabilities Current Liabilities Short Terms Financial Liabilities Trade Payables Provisions Others
2013 217 54 131 7 24
2012 230 29 139 44 19
Non Current Assets Long Terms Receivables Fixed Assets Others
241 89 111 40
205 28 128 49
Non Curren Liabilities Long Terms Financial Liabilities Others
410 322 87
404 323 81
Equity
54
166
Liabilities directly associated with noncurrent assets held for sale
38
Total
718
Non-Current Assets held for sale
37
Total
718
799
799
19
Where do we come from March 2014: The Board of announces a debt restructure
March 2014: The Board of announces the retreat of Colombia in the short term June 2013: We repurchased of 26% of the Junior Bond October 2012: US$280 mill capital increase May 2012: Agreement with Chile´s Consumer Protection Agency (SERNAC, Action Class) November 2011: Settlement e with creditors is reached August 2011: New CEO is appointed (Patricio Lecaros) July 2011: New Board of Director takes office June 2011: La Polar goes into a severe financial crisis 20
Corporate Governance: Committed Board of Directors Board of Directors Alberto Marraccini V. , Vice Chairman Pedro Pellegrini R., Director Juan Pablo Vega W., Director Jorge Id S., Director Aldo Motta C., Director César Barros M. Chairman of the Board • • •
Ph.D. and M.A. in Economics at Stanford University. Former Chairman of SalmonChile (2007-2011) Vast experience in Banking and Financial Industry
Bernardo Fontaine T., Director
Controller Control and transparency Reports directly to the Board Internal Audit Gino Manríquez Controller
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Experienced Management Team
Retail Apparel Mngr. Andrés Molina
Patricio Lecaros, CEO • Commercial Engineer, PUC • Vast experience in the retail Industry as Executive and Entrepreneur. • 14 years in Ripley Chile • 5 years as CEO in Ripley Peru
Financial Financial retail Mngr. Vìctor Wipe
Support CFO Álvaro Araya
Logistics Mngr. Carlos Arredondo
HR Mngr. María Olivia Brito
Planning Mngr. José Tomás Larraín
IT Mngr. Ricardo Rubio
Sales Mngr. Marcelo Acosta
Marketing Mngr. Rodrigo Nazer
Home and electronics Mngr. Rodrigo Karmy
Legal Mngr. Felipe Bunster
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For all our investors information please visit: www.nuevapolar.cl Contact Info:
Felipe Contesse Head of Investor Relations +56 2 2383 3313 ir@lapolar.cl Disclaimer: This presentation contains forward-looking statements which reflect management's best judgment based on factors currently known but involve significant risks and uncertainties. Actual results could differ materially from these forward-looking statements as a result of a number of factors, including but not limited to risks more fully described in our financial statements. 23
May 2014 Morgan Stanley Global Emerging Markets Conference London
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