NUEVAPOLAR
NON-DEAL ROADSHOW
January 2013
Company Overview
Where do we come from
Aconcagua Plan October 2012: US$280 millions capital increase May 2012: Agreement with Chile´s Customer 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 Director takes office
Jun 2011: La Polar goes into a severe financial crisis 3
Committed Board of Directors
Company overview
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
Andrés Eyzaguirre A., 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
Gino Manríquez Controller
Directors (1) Directors (2)
Risk
Retail
Colombia
Finance
César Barros M.
Georges de Bourguinon A.
Alberto Marraccini V.
Jorge Id S.
Juan Pablo Vega W.
Andrés Eyzaguirre A. (*)
Aldo Motta C.
(1) Committee from Jul/11 to May/12, (2) Committee from May/12 (*) Appointed on January 8, 2013 after the resignation of Fernando Tisné
4
New Management Team
Company overview
First-class team with a strong experience in the industry CEO
Patricio Lecaros CEO + 23 years of exp. Ripley, C&I, Quintec
Andrés Molina
Rodrigo Karmy
Rodrigo Nazer
Ricardo Rubio
Álvaro Araya
Olivia Brito
Andrés Escabini
Apparel Mngr.
Home and Electronics Mngr.
Marketing Mngr.
IT Mngr.
CFO
H.R. Mngr.
Legal Mngr.
+ 11 years of exp. SQM
+ 21 years of exp. Servipag and Corpgroup
+ 11 years of exp. V. Undurraga
Carlos Arredondo
+ 17 years of exp. Ripley, Hites
+ 16 years of exp. Epson Chile
+ 9 years exp. La Polar
+ 27 years of exp. Salcobrand
Colombia CEO
Francisco Martínez
Sergio López
Claudio Sierpe
Fernado Silva
Enrique Vitar
Eduardo Lobos
Marcelo Acosta
Risk Mngr.
Costumers and Payment Mngr.
Insurance Brokerage Mngr.
Collecting Mngr
Planning Mngr.
Sales and Distrib. Mngr.
CEO Colombia
+ 30 years of exp. Hites and Scotiabank
+ 18 years of exp. Falabella
+ 27 years of exp. Din, Conosur, Ripley
+ 34 years of exp. Banco Estado, others
+ 28 years of exp. Banefe, B. Falab., Johnson
+ 22 years of exp. La Polar, BCI
+ 21 years of exp. Ripley Johnson
Logistics Mngr.
+ 20 years of exp. Ripley
5
4th Player in Department Stores … … with
Company overview
9% Market Share in Sales Market Share by Revenues (Sept 2012 LTM)
Relevant Market Share in Chile
The retail market in Chile has significant
barriers to entry
La Polar has smaller stores, with an average of 4,021 m2 per store Source: Company Reports
Monthly Revenues by Selling Space (Sept 2012 LTM)
Number of Department Stores
UF/M2
N°
Avg. 6,634m2
Avg. 2,967m2
Avg.. 6,777m2
Avg. 4,021m2
Avg.. 6,384m2 Avg. 6,214m2
Source: Company reports Cencosud: includes Johnson and A. Paris UF Unidad de Fomentto (Indexed Unit of Account Chilean Peso)
For more information about the Chilean Retail Industry please see appendix 2
6 6
Unique Portfolio of Strategic Locations throughout Chile Chile
With stores in 20 of the 24 largest cities in the country, 50% of the stores are in the largest cities throughout Chile
LOCATIONS are a
significant barrier to entry
The strategic locations of our stores, enables the
Company overview
Santiago
Iquique Antofagasta Calama
Copiapó Coquimbo La Serena Ovalle Valparaíso Viña del Mar Los Andes El Belloto Santiago San Antonio Curicó Rancagua Talca San Fernando Linares Los Ángeles Concepción Bío Bío Osorno Chillán Puerto Montt Valdivia
Colina
Panamericana
Estación Central Las Rejas Maipú
Puente Ahumada
La Reina
La Florida Gran Avenida El Bosque
San Bernardo
Puente Alto
Mall Plaza Sur
40 STORES Punta Arenas
Plaza Norte
+ 161,000 m2 of SELLING SPACE
company to reach a broad range of income segment of the population 7
La Polar, a strong Brand Rebounding Established in 1920, the brand has been present in the Chilean market for almost a century
Customers are one of the most valuable asset of the company
Company Overview
December 22/2012 was the bestselling day in LA POLAR HISTORY
Sales show a significant recovery, reaffirming our BRAND VALUE
Revenues Performance, a strong recovery after the crisis (UF/m2) July 12.7%
August 9%
September 9%
4Q 8.6%
Source: La Polar / UF Unidad de Fomento (currency indexed to Chilean Peso)
8
Business Overview
New Business Model … … Retail the Core Business of the Company
Business overview
New products – brand mix 55% sales from Apparel and Shoes 30% sales from Private Labels New store concept
US$40 million in Capex in the next 2 years, for remodeling stores Searching for new premium customers % of Revenues by Source
Monthly Revenues (recovering the focus in retail)
UF/m2”
10
Reducing the financial risk…
Business overview
453,473 customers with LA POLAR CREDIT CARD (TLP) with debt Decrease Risk rate (1)
Attracting new customers New credit card 12%
New credit policy
Aconcagua Plan
New collection policy (1) Provisions
stocks /Gross receivables
Source: La Polar
New Visa / Master La Polar credit card New Benefit Plan La Polar Credit Card approved by SBIF New financial regulations in Chile
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Capex Program for 2013 and 2014 ďƒź Remodeling 14 stores in Chile of aprox. 100,000 m2 ďƒź Opening 6-8 new stores in Colombia
Capex Program (US$ millions) 2013-2014 Chile Remodeling and others
50
Colombia New stores Total
60 110
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Remodeling Stores in Chile 2013 -2014 100,000 m2 with a CAPEX US$40 million
Jan-13
April-13
Jun-13
Aug-13
2 stores
3 stores
1 store
3 stores
First half 2014
7 stores
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La Polar Colombia‌ ‌growth
Business Overview
opportunity
Stores
New Store Bucaramanga Mall Cacique Opening : November 2012 Area of 6,103 m2
Carabobo Opening: August 2011
Centro Mayor Opening: October 2010
Los Molinos Opening: October 2011
Floresta Opening: November 2011
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La Polar Colombia… …growth
Business Overview
opportunity Expansion Plan
3 years Capex USD 100 million Barranquilla
Cartagena de Indias
Bucaramanga Bogotá
Medellín Pereira Cali
For more information about the Colombian Retail Industry please see appendix 2
Villavicencio
18 projects in development and study stages 2 new stores in 2013 Remodeling stores
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Aconcagua Strategic Plan
Aconcagua
Strategic Plan
La Polar has set specific goals for the Chilean operation, for the short and medium term, to be achieved in 2014
ACONCAGUA
Sept. 2012 LTM
10
6.5
30%
21%
Apparel and shoes (% sales retail)
55%
54%
Private labels (% sales retail)
30%
23%
SG&A expenses / Retail revenues
30%
39%
Financial revenues/retail revenues
30%
23%
Risk rate
12%
15%
Sales % with LP credit card
50%
49%
10%
-5.3%
Monthly retail revenues in Chile (UF/M2) Retail Direct Margin
Retail Ebitda margin
>
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Financial Highlights
Financial Performance
Company Financial Highlights overview
Key indicators show an increase in revenues
Income Statement
Retail Sales in Chile CLP Billion
(CLP Billion)
1Q ’12
2Q ’12
3Q ’12
REVENUES
81.1
91.6
86.5
Retail Financial
64.8 16.3
76.4 15.2
72.1 14.4
Gross profit
-7.2
20.4
19.7
EBITDA Chile Colombia
-32.4 -29.8 -2.7
-5.5 -2.2 -3.3
-8.9 -5.4 -3.5
Adjusted EBITDA Chile Colombia
-10.6 -6.9 -2.7
-4.7 -1.4 -3.3
-7 -3.5 -3.5
Net Earnings
-34.9
-10.2
-13.6
(1)
(1) EBITDA adjusted nonrecurring expenses (2) Business Plan
+7%
Plan Aconcagua
(2)
+4%
+5%
Ajusted EBITDA Margin (1) over Chile Retail (2)
Plan Aconcagua
19 19
Financial Debt Financial Debt Restructuring Senior Bond CLP$ 185 billion Original Debt CLP$ 450 billion
Present Value Settlement ** CLP$ 200 billion
Junior Bond (UF) CLP$ 236 billion Legal settlement
Senior Bond Amortization Semiannual starting in
PS 27 CLP$ 24 billion
@ rate UF + 10 * * Discount rate to be defined by an external study
Bond Amortization Profile (CLP$ billion)
2015
Interests From 2013 to 2022 with a rate between 4% and 10%
Junior Bond (UF) Amortization One coupon in 2032 Interests No interest payments Tranche C (PS 27) Amortization Semiannual starting in July 2018 until July 2024 Interests BCP 10 Rate + 1% starting July 31, 2013
20 20
Balance Sheet Pro-forma Balance Sheet As of September 2012 Balance Sheet (CLP Billion) Cash and equivalents
Main Impacts of the Capital Increase Dec ‘11
Sep ’12 Proforma*
Sep ’12
Cash Effect:
35
10
143
132
92
92
44
52
52
Fixed Assets
69
67
67
Other Assets
55
75
75
335
296
429
Financial Debt Effect:
476
488
232
- CLP$ 256 billion financial debt restructuring
470
483
14
6
5
218
Accounts Payables
68
59
59
Other Liabilities
20
37
37
-228
-288
101
335
296
429
Accounts Receivables Inventories
Total Assets Financial Debt Current Non-current
Equity Total Liabilities and Equity
+ CLP$ 133 billion due to Capital Increase
Efect on Equity : + CLP$ 133 billion due to Capital increase + CLP$ 256 billion financial debt restructing
(*) Effect of the capital increase
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HIGHLIGHTS November 2012: A new store was opened in Bucaramanga, Colombia December 2012: release credit card restrictions from regulator (SBIF) December 2012: New Senior and Junior bond filling as part of the Settlement January 2013: NUEVAPOLAR part of the IPSA Chilean Stock Exchange Index
NEXT STEPS January 2013: Customer Compensation Plan (SERNAC) January 2013: Start store remodeling 1Q 2013: New web page for Investors www.nuevapolar.cl March 20, 2013: 2012 Financial Statements March 22, 2013: Conference Call 4Q 2012 Results
Investor Relations Contact: María Paz Ortega,,Head of Investor Relations Phone (562) 2383226 (mortega@lapolar.cl) 22
Appendix 1
Products 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
New mix of private brands and local suppliers
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New Brands
Private Brand Customer: woman 28-35 years Business area: apparel, accesories, shoes, handbags and home Price level: Medium–High Style: Sport Fashion
251
New Brands
}
Private Brand Customer: women 18-25 years Business area: apparel, and shoes Price level: Medium–High
Style: Sport casual
26
New Brands
Private Brand Customer: woman and man 18-25 years Business area: apparel Price level: Medium – High Style: Sport Casual
27
New Brands
}
Private Brand Customer: man 30-40 years Business area: apparel Price level: Medium Style: Sport Casual
28
New
Store Proposal
Change of image/ layout
Remodeling 100.000 m2 in the next 2 years Capex: USD 40 MM
1st place award: Shop window of the year by the Santiago Chamber of Commerce
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Store proposal main goals are….
Increase sales and returns by m2 Improve visual merchandising to make more efficient takeoffs spaces Upgrade stores Increase market share
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Appendix 2
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33
34
35
36
Disclaimer This presentation contains forward-looking statements, including statements regarding the intent, belief or current expectations of the Company and its management. The forward-looking statements are not guarantee of future performance and involves a number of risks and uncertainties including, but not limited to, the risks detailed in the company’s financial statements, and the fact that actual results could differ materially from those indicated by such forwardlooking statements.