Nueva Polar Non-deal roadshow Brazil July 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
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
40 stores throughout Chile
4th Player in the Industry in Chile by Retail Revenues**
N째 Stores
5% 10%
77*
36% 21% 42
40
40
29% 14 Falabella
Cencosud
* 38 Stores Johnsons and 39 Stores Paris
Ripley
Hites
La Polar
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** 1Q 2013
Source: Company Reports
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Colombia Project Growth opportunity Stores
Expansion Plan
18 projects in development and study stages 2 new stores in 2013 Remodeling stores Carabobo Opening: August 2011
Centro Mayor Opening: October 2010 Remodeling June 2013
Barranquilla Cartagena de Indias
Bucaramanga BogotĂĄ
MedellĂn Pereira Cali Los Molinos Opening: October 2011
Villavicencio
Floresta Opening: November 2011
New Store Bucaramanga Mall Cacique Opening : November 2012
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Company Overview Plan Aconcagua Financial Highlights Q&A
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3 - Ye a r P l a n 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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6
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
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2
REASONS
Experienced Management Team Retail
Financial retail Mngr. Vìctor Wipe
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
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
Colombia CEO Francisco Martínez
Home and electronics Mngr. Rodrigo Karmy
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3
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
Remodeling stores AFTER Ahumada: before and after
AFTER
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Ahumada before and after remodeling Before
After
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Attracting 200,000 new premium customers annually
REASON
More than 850,00 clients WITH AVAILABLE CREDIT LINE
Development of a new Visa / Master La Polar credit card New credit and collection policy New benefit plan New sales channel
Ta
Stabilized Risk Rate (1)
21.9% 18.2%
17.0% 14.8%
DEC´11
MAR´12
JUN´12
(1) Provisions Stocks
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SEP´12
11.6%
12.3%
DEC´12
MAR´13
/Gross Receivables
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) +14%
+14%
+24%
+22%
52
+24%
+15%
46
+5%
+7% 23
21
21 18
17
Aug
Sep
18
19
Oct
25
23
19 17
Nov
Dec
L8M 2011 - 2012
18
20
Jan
Feb
21
Mar
L8M 2012 - 2013
Retail Gross Margin 28%
19%
Jan
20%
19%
19%
Feb
23%
23%
22% 21%
Mar 2012
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Q1
19%
L8M
2013 Source: Company Reports
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Chile: Credit Business Gross Loans (CLP Billions)
77.1
Risk Rate (Provisions)
58.5 39.5
29.9
20.6 23.0
21.9% 18.7
18.2%
17.0% 14.8%
82.6
85.8
77.8
80.5
78.6
SEP´11
DEC´11
MAR´12
JUN´12
SEP´12
Normal
93.3
92.3
DEC´12
MAR´13
DEC´11
MAR´12
JUN´12
SEP´12
11.6%
12.3%
DEC´12
MAR´13
Renegotiated
Portfolio by Aging Segments
18%
13%
13%
7% 11%
8% 10%
9% 8%
7% 7%
15%
14%
14%
6% 6% 10%
6% 8% 14% [91 to 180]
14%
[31 to 90] 70%
68%
70%
MAR´12
JUN´12
71%
78%
73%
[Current ]
55%
SEP´11
DEC´11
[01 to 30]
SEP´12
DEC´12
MAR´13
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Source: Company Reports
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Chile: EBITDA 1Q-2013 Retail 1Q 2013 1Q 2012 67,327 59,358 15,426 11,910
EBITDA (CLP Billions) Revenues Gross Margin % Revenues
SGA w/o depreciation % Revenues
EBITDA % Revenues
EBITDA w/o recurring % Revenues
Financial 1Q 2013 1Q 2012 15,664 15,328 7,540 (18,764)
Consolidated 1Q 2013 1Q 2012 82,991 74,686 22,966 (6,854)
23%
20%
48%
-122%
28%
-9%
(19,164)
(18,864)
(6,677)
(5,779)
(25,841)
(24,643)
-28%
-32%
-43%
-38%
-31%
-33%
(3,737)
(6,918)
951
(22,868)
(2,787)
(29,786)
-6%
-12%
6%
-149%
-3%
-40%
(3,737)
(5,163)
951
(1,648)
(2,787)
(6,811)
-6%
-9%
6%
-11%
-3%
-9%
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Financial Debt Financial Debt Restructuring Senior Bond Amortization: Semiannual starting in 2015 Interest: From 2013 to 2022 with a rate between 4% and 10%
Bond Amortization Profile (CLP$ billion) 442 120 Senior amortization
100
Junior Bond (UF) Amortization: One coupon in 2032 Interest: No interest payments Tranche C (PS 27) Amortization: Semiannual starting in July 2018 until July 2024 Interest: BCP 10 Rate + 1% starting July 31, 2013
Junior amortization
Senior Interest
80 60 40 20 0 2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
‌
2032
On 28th June, we repurchased of 26% of the Junior Bond
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Appendix 1 New layout
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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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Appendix 3 Debt Restructuring
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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:
Senior Bond
Differential with the face value is booked as profit
New debt is recorded at a discount
Discount rate 69%
• • •
Bank debt Bonds Commercia l paper
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
9,6% Average rate: 14,9%
7%
$ 18 $ 20
IFRS debt: $174
81%
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
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