Nueva Polar Non-deal roadshow
May 2013
Company Overview Plan Aconcagua Financial Highlights Q&A
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Where do we come from
Aconcagua Plan October 2012: US$280 million capital increase May 2012: Agreement with Chile´s Consumer Protection Agency (SERNAC , Class action)
November 2011: Settlement with creditors is reached August 2011: New CEO is appointed (Patricio Lecaros) July 2011: New Board of Directors takes office
June 2011: La Polar goes into a severe financial crisis
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New Corporate Governance Committed Board of Directors Georges de Bourguignon A., Vice-chairman Alberto Marraccini V. , Director Juan Pablo Vega W., Director
Controller
Jorge Id S., Director
Control and transparency
Aldo Motta C., Director
Reports directly to the Board
Bernardo Fontaine T., Director
César Barros M. Chairman of the Board • • •
Internal Audit
Ph.D. and M.A. in Economics at Stanford University. Former Chairman of SalmonChile (2007-2011) Vast experience in Banking and Financial Industry Committee
Audit
Gino Manríquez Controller
Risk
Retail
Colombia
Finance
Fraud Prevention
César Barros M.
Georges de Bourguinon A. Alberto Marraccini V.
Jorge Id S.
Juan Pablo Vega W.
Bernardo Fontaine T. Aldo Motta C.
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La Polar in the Chilean Retail Industry
Established in 1920, the brand has been present in the Chilean market for almost a century
Brand valued by customers, with 850,000 clients with available credit line
40 stores throughout Chile
Sales per square meter show a significant recovery after the crisis, reaffirming our brand value, but still below industry standards
The strategic location of our stores, enables the company to reach a broad range of income groups
4th Player in the Industry in Chile by Retail Revenues
N°
38
39
38
40
40
Johnson
Cencosud
5% 36%
22% 28%
14 Falabella
9%
Ripley
Hites
La Polar
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5 Source: Company Reports
Colombia Project Growth opportunity Stores
Expansion Plan
Carabobo Opening: August 2011
18 projects in development and study stages 2 new stores in 2013 Remodeling stores
Centro Mayor Opening: October 2010
Barranquilla Cartagena de Indias
Bucaramanga Bogotá
Medellín
Pereira
Villavicencio
Cali Los Molinos Opening: October 2011
Floresta Opening: November 2011
New Store Bucaramanga Mall Cacique Opening : November 2012 Area of 5,000 m2
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Company Overview Plan Aconcagua Financial Highlights Q&A
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3-Year Plan 2012-2014 Sales $437 Billion
10 UF/m2 (US$ 480) Retail Direct Margin 30% Financial revenues / retail revenues 30% SG&A expenses / Retail revenues 30%
Risk rate 12% Retail EBITDA Margin 10%
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REASONS…
why we will reach the
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REASON
Clear and achievable goals 2014
2012
10 30%
6.8 25%
Apparel and shoes (% sales retail)
55%
54%
Private labels (% sales retail)
30%
25%
30% 12% 50%
20% 11.6% 48%
30% 10%
37% -3.9%(*)
Retail
Monthly retail revenues (UF/M2) Retail Direct Margin
Financial Retail
Financial revenues/retail revenues Risk rate Sales % with LP credit card Operational
SG&A expenses / Retail revenues Retail Ebitda margin
(*) w/o non recurring expenses
10
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REASONS
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
Legal Mngr. Andrés Escabini
Planning Mngr. José Tomás Larraín
HR Mngr. María Olivia Brito
Sales Mngr. Marcelo Acosta
IT Mngr. Ricardo Rubio
Home and electronics Mngr. Rodrigo Karmy
Marketing Mngr. Rodrigo Nazer
Colombia CEO Francisco Martínez
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REASON
New and renewed brands Full renovation of the apparel department
New mix of exclusive brands 2.0 Increase square meters of exclusive brands in stores Improvements in the purchasing process New design department
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New Layout in our stores
BEFORE
ďƒź Remodeling stores AFTER Ahumada: before and after
AFTER
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Ahumada before and after remodeling Before
After
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Capex Program for 2013 and 2014 ďƒź Remodeling 17 stores in Chile of aprox. 100,000 m2 ďƒź Opening 6 new stores in Colombia
Capex Program (US$ million) 2013-2014 Chile Remodeling and others
50
Colombia New stores Total
60 110
15
4
Attracting 200,000 new premium customers annually
REASON
Development of a new Visa / Master La Polar credit card
More than 850,00 clients WITH AVAILABLE CREDIT LINE
New credit and collection policy New benefit plan New sales channel
Ta
Stabilized Risk rate (1) 21.9% 18.2%
12%
17.0% 14.8% 11.6%
DEC´11
MAR´12
JUN´12
SEP´12
DEC´12
Aconcagua Plan (1) Provisions stocks /Gross receivables
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Source: La Polar
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5 REASONS
Brand valued by customers
Customers are one of the most valuable assets of the company
December 22/2012 was the bestselling day in LA POLAR HISTORY
Sales show a significant recovery, reaffirming our BRAND VALUE www.nueva-polar.cl
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6
REASON
Corporate Governance Transparency A new culture of responsibility Strongly committed Board of Directors
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Company Overview Plan Aconcagua Financial Highlights Q&A
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Chile: Retail Business Revenues Performance, a strong recovery after the crisis SSS (CLP Billions)
Retail Gross Margin
e
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e
20
Chile: Credit Business Gross Loans (CLP Billions)
Risk Rate (Provisions)
e
Portfolio by Aging Segments
e
21
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Chile: EBITDA 2012 EBITDA Chile Revenues Gros s margin % Revenues
SGA w/o depreciation % Revenues
EBITDA % Revenues
Non-recurring expens es Sernac pro visio ns Extrao rdinary severance Fees and penalties Other non-recurring
EBITDA w/o recurring % Revenues
Retail 2012 293,754 65,032 22% (92,646)
Financial 2012 58,176 5,916 10% (15,527)
Consolidated 2012 351,930 70,949 20% (108,173)
32%
27%
31%
(28,890) -10%
(11,428) -20%
(40,318) -11%
(7,621)
(21,220)
(28,841)
(21,220)
(21,220) (5,155) (1,864) (602)
9,792 17%
(11,476) -3%
(5,155) (1,864) (602)
(21,268) -7%
Financial margin includes a lower cost of B$ 4.7, resulting from reduction of the financial debt related to the financing company. This effect does not affect the EBITDA calculation 22
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Financial Debt
Financial Debt Restructuring
Bond Amortization Profile (CLP$ billion)
Senior Bond Amortization: Semiannual starting in 2015
Interest: From 2013 to 2022 with
442 120
a rate between 4% and 10%
Senior amortization
100
Junior Bond (UF) Amortization: One coupon in 2032 Interest: No interest payments
Junior amortization
Senior Interest
80 60
Tranche C (PS 27) Amortization: Semiannual starting in
40
July 2018 until July 2024 Interest: BCP 10 Rate + 1% starting July 31, 2013
20 0 2013
2014
2015
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2016
2017
2018
2019
2020
2021
2022
‌
2032
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Debt Restructuring and Revaluation ($ billion) Nov 7, 2011
Oct 16, 2012 IFRS, cash flow from new debt discounted at market rates.
CJP splits the debt into 2 Bonds (Senior and Junior)
Initial Debt: • • •
Bank debt Bonds Commercia l paper
Senior Bond
New debt is recorded at a discount
Discount rate 69%
Differential with the face value is booked as profit
Senior Profit: $ 60
Senior Bond $ 196
14,1 %
$ 136
Junior Bond
Junior Profit:
$ 231 $ 445
$ 249
18,1% PS 27 $ 25
Total debt:
PS 27 $ 25
$470
7%
$ 18 81%
9,6%
$ 20
Average rate: 14,9%
IFRS debt: $174
PS 27 : $5
IFRS Profit: $296
CJP: Preventive Judicial Settlement, signed on November 7, 2011 PS 27: Bank debt BCI, guaranteed by 1.85 times of normal receivables portfolio of La Polar 24
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Appendix 1 New layout
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Remodeling Stores in Chile 2013 -2014 100,000 m2 with a CAPEX US$40 million
Mar-13
Jun-13
Jul-13
2 store
1 store
6 stores
First half 2014 8 stores
Estaci贸n Central before remodeling
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Estaci贸n Central after remodeling
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Ahumada after remodeling Ahumada / Ahora
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Ahumada / Ahora
Ahumada after remodeling
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Ahumada / Ahora
Ahumada after remodeling
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Appendix 2 Private Brands
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New brands }
Private Brand Customer: women 18-25 years Business area: apparel, and shoes Price level: Medium–High Style: Sport casual
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New brands }
Private Brand Customer: women 28-35 years Business area: apparel, accessories, shoes, handbags and home Price level: Medium–High Style: Sport Fashion
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New Brands
}
Private Brand Customer: men 30-40 years Business area: apparel Price level: Medium Style: Sport Casual
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Renewed brands
Private Brand Customer: women and men 18-25 years
Business area: apparel Price level: Medium – High Style: Sport Casual
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Renew brands
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Renew brands
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Renew brands
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Renew brands
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Renew brands
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