New York V BTG Pactual Ceo Conference October 2014
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Contents Company Overview Growth Opportunities Debt Restructure
Financial Highlights
2
Company Overview
Retail Market Share – 1H 5% 3% Others)
Established in 1920, the brand has been present in the Chilean market for almost a century.
21%
27%
35%
9%
7,200 Employees
Chile Main Department Stores
38 Stores
38 40
524 th. active credit card holders ( N° 6 in the industry)
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42 42
More than 20 Private labels
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Contents Company Overview Growth Opportunities Debt Restructure
Financial Highlights
4
Retail
Retail Income LTM CLP $ B
8% CAGR 277
298
4Q 11
4Q 12
330
4Q 13
335
2Q 14
Challenges • •
•
Implementation of Self – Service model in stores 5
1,0% Retail EBITDA
1
0,0% EBITDA Margin
0
Take actions on underperforming stores
Continued focus on private labels
-5
-10
0,2%
-2,0%
-10 -15
-1,0%
-6 -1,9%
-3,3%
-3,0% -4,0%
4Q 12
4Q 13
2Q 14
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Financial
Open Accounts and Credit Card Loan Stock
Financial EBITDA LTM CLP $14,0% B
10
11,8%
8
10,0%
12,0%
8 8
8,0%
138
101
100 540 0 520
6,0%
4
4,0%
2
2,0% 0,0%
0
-4
165
113
10,0%
6
-2
560
500
-4,0%
519
480
524
4Q 12
-8,0%
4Q 13
Financial EBITDA
2Q 14
460
Credit Card Loan Stock ( CLP $ B)
-400
477
440
EBITDA Margin
-200
-300
-6,0%
-5,6%
Open accounts w/ balance (Th.)
547
-2,0%
-3
-100
-500 4Q´11
4Q´12
4Q´13
2Q´14
Challenges •
Implementation of Self – Service model in stores
•
Increase Loans Portfolio
•
Mantain Risk Rate under 10%
26,2%
Risk Rate 22,6%
19,1%
16,1%
12,4% 12,9% 10,8%
8,3%
7,9%
9,1%
9,9%
DEC´11 MAR´12 JUN´12 SEP´12 DEC´12 MAR´13 JUN´13 SEP´13 DEC´13 MAR´13 JUN´14
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Contents Company Overview Growth Opportunities Debt Restructure
Financial Highlights
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Debt Restructure Previous Debt Payment Schedule
Balance CLP $ B
456
$CLP B 120 Debt Stock Jun-14 Senior Bond(Bond F -Series) Junior Bond(Bond G -Series)
Current Situation
100
Other Debts Total
Other Liabilities
$ 196.217 MM $ 264.951 MM $ 37.264 MM $ 498.432 MM
80
126 Other Financial Debt 60
37 348
Junior Debt
14
Senior Debt
40
Equity 161 Total 9 Assets
Liabilities
20
0 2014 2015 2016 2017 2018 2019 2020 2021 2022
…
2032
Leverage Debt/Equity 23,6 X
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Debt Restructure Approval of the following terms was obtained in Shareholders, Bondholders and Creditors meetings. Issuance of a convertible bond into shares in the amount of CLP $ B 163,333 Maturity year 2113 payable in one payment at zero interest rate. Issuance of 1,997,235,044 shares of payment, which implies a dilution of 66.67% for current Shareholders The contracts of current F and G Bonds are modified to be partially prepaid through the convertible bonds. The unpaid part shall be rescheduled to be paid in one installment without any interest and denominated in CLP in the year 2113. 9
Debt Restructure **F Bond and Modified Senior CLP $ B 59
Senior Debt Senior Debt Par Value CLP $ B 196 Senior Debt *Book Value CLP $ B 161
Total Debt *Book Value CLP $ B 175
Changes in term and prepayment option
**F Bond and Modified Senior CLP $ B 59
1,677,677,437 Shares
Convertible Bond CLP $ B 137
(56%)
Junior Debt *Book Value CLP $ B 14
Junior Debt Par Value CLP $ B 197
Junior Debt
Issuance of the convertible bond
Convertible Bond CLP $ B 26 Changes in term and prepayment option **G Bond and Modified Junior CLP $ B 171
Conversion Option for 3 years
66,6%
319,557,607 Shares (11%)
**G Bond and Modified Junior CLP $ B 171
*Book Value: Value of the debt ( Senior and Junior), in the financial statements of June 2014 **Modified Bond: Unpaid part shall be rescheduled to be paid in one installment without any interest and denominated in CLP in the year 2113
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Debt Restructure Balance CLP $ B Current Situation
126
*Proforma After Restructure
126 Other Liabilities Other Financial Debt
37 348
37
14
Junior Debt Senior Debt Equity Total
161
184
9 Assets
Liabilities
Liabilities
Leverage
Leverage
Debt/Equity ďƒ¨ 23,6 X
Debt/Equity ďƒ¨ 0,2X
*Proforma unaudited effect on june 2014 balance sheet after the restructuring process is finished
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Debt Restructure New Ownership Structure Actual Shareholders Pension Funds Brokers Moneda *ILC Other Total
% 7% 57% 6% 10% 20% 100%
Shares 69,344,945 565,327,000 63,907,000 99,711,749 200,326,828 998,617,522
Convertible Bonholders from Senior Debt Pension Funds Banks Brokers Moneda Other Total
% 35% 21% 19% 2% 23% 100%
Shares 581,209,108 357,908,370 317,810,361 41,034,850 379,714,748 1,677,677,437
Convertible Bonholders from Junior Debt Pension Funds Banks Brokers Moneda Other Total
% 22% 13% 46% 2% 17% 100%
Shares 71,368,006 41,621,761 146,548,820 6,423,463 53,595,558 319,557,607
**New Shareholders Pension Funds Banks Brokers Moneda ILC Other Total
*ILC: Includes 5% of Corpvida S.A. and 5% of Corpseguros S.A., both companies controlled by ILC ** New Shareholders: It is assumed that the amounts that are associated with the debt are converted into shares
% 24% 13% 34% 4% 3% 21% 100%
Shares 721,922,059 399,530,131 1,029,686,180 111,365,312 99,711,749 633,637,135 2,995,852,566
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Contents Company Overview Growth Opportunities Debt Restructure
Financial Highlights
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Financial Highlights P&L 1H 2014
P&L CLP $ B Revenues Costs Gross Margin % Revenues SG&A ( w/o depreciation) % Revenues EBITDA % Revenues Depreciation Operating Income Non - Operating Income Profit (Loss) Before Taxes Benefits ( Expenses ) Income Tax Profit (Loss)
1H 2014 192.6 (126.2) 66.4 34.5% (69.8) -36.2% (3.1) -1.6% (3.8) (7.1) (13.9) (21.0) (0.4) (21.4)
Consolidated r 1H 2013 6.2% 181.4 (118.4) 5.4% 63.0 34.7% 16.3% (60.0) -33.1% 4.4 2.4% (3.1) (0.1) (10.1) (10.2) 2.1 (8.1)
1H 2014 155.8 (113.5) 42.3 27.1% (48.5) -31.1% (6.2) -4.0%
Retail r 3.5% 1.3% 18.2%
1H 2013 150.5 (108.8) 41.7 27.7% (41.0) -27% 0.7 0.5%
1H 2014 39.1 (12.7) 26.4 67.4% (23.5) -60.1% 3.1 8.0%
Financial r 26.6% 23.9% 24.2%
1H 2013 30.9 (9.6) 21.3 68.9% (18.9) -63% 3.6 12.1%
Extraordinary Expenses : CLP $ B 1.8
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Financial Highlights
Every 10,000 increase in the loans portfolio creates 5,000 in revenues
Focus in private labels
P&L LTM 2Q14
P&L CLP $ B Revenues Costs Gross Margin % Revenues SG&A ( w/o depreciation) % Revenues EBITDA % Revenues Depreciation Operating Income Non - Operating Income Profit (Loss) Before Taxes Benefits ( Expenses ) Income Tax Profit (Loss)
Consolidated LTM 2Q14 r LTM 2Q13 410.0 9.8% 373.3 (267.4) (249.7) 142.6 15.4% 123.6 34.8% 33.1% (142.6) 15.8% (123.1) -34.8% -33.0% 1.4 0.5 0.3% 0.1% (8.0) (8.0) (17.9) (25.9) 1.1 (24.8)
(3.2) (2.8) 279.1 276.3 (39.7) 236.6
LTM 2Q14 335.4 (245.7) 89.7 26.7% (96.0) -28.6% (6.3) -1.9%
Retail r 5.8% 1.3% 18.2%
LTM 2Q13 317.0 (235.4) 81.6 25.7% (84.7) -27% (3.1) -1.0%
Financial LTM 2Q14 r LTM 2Q13 76.9 36.6% 56.3 (21.7) (14.3) 55.2 31.5% 42.0 71.8% 74.6% (48.8) 27.0% (38.5) -63.5% -68% 7.8 3.5 10.1% 6.2%
Every 10,000 increase in the loans portfolio improves 3,500 in the gross margin Take actions on under performing stores Implementation of self – services model in stores
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Appendix
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Where do we come from July 2014: The Board of directors announces Mr Gino Manriquez as new Interim CEO
August 2014: The Shareholders meeting approves the debt restructure
March 2014: The company announces the beginning of the debt restructure
June 2011: La Polar goes into a severe financial crisis
July 2011: New Board of Director takes office
September 2014: The Creditors meeting approves the debt restructure
March 2014: The Board of directors announces the retreat of Colombia in the short term
August 2011: New CEO is appointed (Patricio Lecaros)
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
November 2011: Settlement with creditors is reached
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Corporate Governance Board of Directors Alberto Marraccini V. , Vice Chairman Pedro Pellegrini R. Juan Pablo Vega W. Jorge Id S. Aldo Motta C. César Barros M.
Gino Manriquez O. CEO
Bernardo Fontaine T. •
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
Business and Administration , Pontificia Universidad Catolica Former Controller of the Company
Directors Committees Committee Jorge Id Alberto Marraccini Juan Pablo Vega Bernardo Fontaine
Risk
Cash Flow
Retail
Directors
Crime Prevention
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Contact Info: Felipe Contesse Head of Investor Relations +56 2 2383 3313 ir@lapolar.cl For all our investors information please visit:
www.nuevapolar.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. 19
New York V BTG Pactual Ceo Conference October 2014
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