Post on 10-Jul-2020
1
Corporate PresentationApril 2011
2
About Grupo Pão de Açúcar
Operational
1.8k points of sales, located in 19
States and the Federal District
Multi-format distribution
600 million tickets per year
2.8 million m² of sales areas
Key figures
R$ 50+ bi Sales1
#1 Retailer in Brazil
Growth of 2x over 2nd player2
140,000+ employees
1 2011 Estimated2 In the past 10 quarters, according to ABRAS – Brazilian Supermarket Association
3
Market leader in the Company‟s
main businesses
13.3%
10.4%
10.4%
65.9%
13.8%
14.1%
11.0%
61.1%
13.2%
14.2%
10.7%
61.9%
14.8%
14.5%
11.1%
59.6%
2006 2007 2008 2009
Others
Source: Abras – Brazilian Supermarket Association
Electronics RetailMarket share
Food RetailMarket share
16%
7%3% 3% 3% 3%
4
IndicatorsE-commerceElectronicsCash-and-
carryRetail
Specialized
Businesses
New Management model developed in 2010
ExpansionMarket Strategy
Commercial
Margin
Commercial
Strategy
ImageCorporate
Relations
Logistics ResultSupply Chain
Financial CostsCorporate Services,
Finance / IT
Retention and
Succession
Human
Resources
Retail
Results
Cash-and-carry
Results
Specialized
Businesses’
Results
Electronics
Results
E-commerce
Results
Expenses
Control
Management
Control
5
2010 Challenges
Early 2010 Challenges
CEO Replacement
Multiformat management
Casas Bahia negotiations:
Half year negotiation delay
Interruption of the Ponto Frio
turnaround process
Doubts about the ability to work
together to capture synergies
following the conclusion of the
agreement
2010 End
Successful transition
Multibusiness company
Casas Bahia‟s negotiation
concluded
“Governance” initial basis kept
Integration: commercial and
operational gains, cooperation
between teams
Also…
Conversion of 93 Sendas and
CompreBem and 44 Extra Eletro
47 new stores in GPA Food
6
What lies ahead
A multibusiness company with sales
over R$50 billion
Right people in the correct places with processes and systems
Integration with synergy‟s capture of Ponto Frio and Nova
Casas Bahia reaching guidance
Consolidation and expansion of cash-and-carry, supermarkets,
hypermarkets, proximity stores, specialized businesses,
electronics stores and e-commerce formats taking advantage
of the Brazilian middle class growth
7
Company changes as the environment moves
Brazil
2005
Population in each social class (in million)
C
A/B
D/E
26.4
62.7
92.9
C
A/B
D/E
42.2
101.7
47.9
GPA: limited
offering (only
Food, 556 stores)
GPA: multiformat
business for both Food
and Electro, 1,646 stores
Brazil 201032mn ascended
only in 2010
Fo
od
Co
mp
l.
Fo
od
erv
ice
& in
sti
tuti
on
al
E-c
om
me
rce
8
Company changes as the environment moves
Source: IBGE, BACEN, O observador
Brasil 2011, Estado de SP, 23/03/2011
Unemployment rate
Credit avaliabe to population(As % of GDP)
Real income growth
Avaliable income1
Social Class
2009 2010 % Change
A/B R$ 680 R$ 991 46%
C R$ 204 R$ 243 19%
D/E R$ 61 R$ 104 70%
Total R$ 230 R$ 368 60%
1 Total income less all family expenses
Buying intention (% Δ 2011-2010)Based on yearly survey of buying intention for the year
per category.
Product A/B C D/E
Furniture 9 11 26
Home Appliances 19 0 23
Mobile Phone 5 4 40
TV/Video 26 24 25
9
R$36.1 bn of gross sales in 2010
Gross
Sales
Gross
Margin
• 4Q10: 25.4%
GPA Food1: 26.0%
Globex2: 24.5%
• 2010: 24.5%
• 4Q10: R$12.6 bn
„Same-store‟ sales increased by 11.5%
• 2010: R$ 36.1 bn
„Same-store‟ sales moved up by 12.1%
• Nova Casas Bahia consolidation as of Nov, 2010
1 Refers to GPA consolidated excluding Globex2 Includes Nova Casas Bahia as of November, 2010
10
EBITDA of R$2.1 bn in 2010
EBITDA
Net
Income
• 4Q10: R$769.3 mn 54.9% (margin of 7.0%)
• GPA Food1:R$567.1 mn (margin of 8.7%, the
highest of the last 15 years)
• Globex2: R$202.2 mn (margin of 4.5%)
• 2010: R$2.1 bn 37.5% (margin of 6.4%)
3 Proposal to be ratified in the Annual Shareholders’ Meeting1 Refers to GPA consolidated excluding Globex2 Nova Casas Bahia is included as of November, 2010.
• 4Q10: R$447.0 mn (margin of 4.0%)
• 2010: R$722.4 mn (margin of 2.3%)
• Dividends3 of R$171.6 mi, R$0.69 per preferred share
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GPA overcomes the main guidances for 2010
GPA+
Ponto Frio
GPA+
Ponto Frio2
GPA + Ponto
Frio
GPA+
Ponto Frio
GPA+
Ponto Frio1
Guidances 2010
OK
1 GPA Consolidated with Nova Casas Bahia: R$36.1 bn2 GPA Consolidated with Nova Casas Bahia: R$2.1 bn
REAL GROWTH OF
„SAME-STORE‟ GROSS SALES
EBITDA
CAPEX
NET DEBT/ EBITDA
TOTAL GROSS SALES
GPA Food
6.4%Between 4.0%
and 5.0%
Above R$ 1.8 bn
Around R$ 1.6 bn
Less than 1x
R$ 26.1 bnAbove R$ 26 bn
R$ 33.1 bnAbove R$ 33 bn
R$ 2.0 bn
R$ 1.2 bn
0.6 x
12
Guidance for New Globex
(1) % of net sales.
Projections include estimated synergies.
GROSS SALES (R$)Above
R$ 20 billion
Growth (SSS)
above the market
GROSS MARGIN(1)
EBITDA MARGIN(1) 4.5 to 6.0% Higher than 7.5%
Higher than 25.5% Higher than 26.5%
CAPEX R$ 100 mn to
R$ 120 mn
FINANCIAL RESULT(1) -3.5 to -4.5% Up to -4.0%
2011E Year Model
13
Main Synergies
1 – Commercial and operating
management
2 – Management ofinfrastructure and
back-office
3 – Management of
financial and capital
structure
‣ Integrate the Ponto Frio operating management to Casas Bahia model with margin
and sales gains
‣ Centralization of purchase management with margin gains;
‣ Improvement of sales and pricing mix;
‣ Increase the penetration of services sales;
‣ Repositioning of Ponto Frio brand and maintaining strong the Casas Bahia brand
‣ Centralization of the companies’ inventories and stock ups;
‣ Utilization of GPA’s back-office platform with Shared Services Center and total
integration among Casas Bahia, Ponto Frio and the other areas;
‣ Refine the operational processes;
‣ Take advantage of other synergies with GPA (logistics, IT etc);
‣ Manage the cash / Working Capital inside GPA platform;
‣ Reduction in funding costs / negotiation of financing instruments and lines at GPA
cost;
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Synergies
1.0% - 2.0%
(R$ 170 - 340 mn)
1.5% - 2.0%
(R$ 255 - 340 mn)
0.5% - 1.0%
(R$ 85 - 170 mn)
3.0% - 5.0%
(R$ 510 - 850 mn)
Potential per year – after total capture of synergies(1)
(1) Synergy calculated over the net sales.
1 – Commercial and operating management
2 – Management of infra-structure and back-office
3 – Management of
financial and capital
structure
Total
15
Formats
16
GPA Stores and Formats
GLO
BEX
GPA
Food Cash-and-carry
Proximity
Hypermarkets
Supermarkets
Specialized Stores
Gas stations and drugstores
Eletronics
E-commerce
# Stores
380
57
110
68
233
1,032
1 Gross Sales 2010. Consider 2 months of Casas Bahia.
17
GPA Food Retail store characteristics
Public Stores2010
Additions
Avg Sales Area
(m2)
ABCD classes 110 +7 6,000
AB classes 149 +4 1,500
BCD classes 101 +88 1,500
TransformersFood service
57 +17 4,000
ABCD classes 68 +16 300
18
Globex stores count
Public Stores2010
Additions
ABC classes 506 +51
CD classes 526 0
19
Ownership structure
Free float
19
Controlling group
Casas Bahia FoundersKlein Family
Management
38%
62%
47%53%
50%
Globex
NovaPontoCom
6%
44%
Nova Casas
Bahia
100%
FICFinancial JV 14%
36%
Banco Itaú
50%
20
Regional Presence
North
Super: 0
Hyper: 1
Electro: 0
Total: 1
Middle-West
Super: 13
Hyper: 11
Electro: 83
Total: 107
North-East
Super: 29
Hyper: 16
Electro: 81
Total: 126
South-East
Super: 334
Hyper: 80
Electro: 753
Total: 1,167
South
Super: 4
Hyper: 2
Electro: 115
Total: 121
GDP: 5.1%
GDP: 9.2% GDP: 56.0%
GDP: 13.1%
GDP: 16.6%
21
Nova Pontocom
22
Consistent Sales Growth
22
Gross Revenues (in R$ Mn)Under Nova Pontocom management
* Source: e-bit.
14
51
640
366
1087
637
2009 2010
Full year May to December Only December
Sales GrowthGross Revenue - Annualized (comparable basis)
640
1087
530
833
84
213
458
534
2009 2010
1.731
2.695
Δ E-commerce71%
2009 2010
23
Improvement in operating profitability
23 * Amounts without Stock Option non-cash expenses.
Gross Profit (R$ Mn)
Operating Expenses (R$ Mn)*
Gross margin has grown, despite VAT tax change
(“Substituição Tributária”)
• Better negotiations / beginning of the expansion of the
assortment
• Still little synergy from groups commercial conditions
Expenses reduction of more than 3 pp. in 2010
• Strong fixed expenses dilution
• Greater variable expenses efficiency Synergies with
the group
24
Increasing EBITDA and break-even in Net Income
24
EBITDA (R$ Mn)*
EBITDA has approached 5% in 2010 with
gains in both margin and expenses
Net income (R$ Mn)**
Operation in the break-even point
of Net Income
0,2
0,0%
-2,3%
2009 2010
* Amounts without Stock Option non-cash expenses.
** Amounts without Stock Option non-cash expenses; 2009 pro-forma: adjusted amounts for the current deferral aaccounting practice.
25
2010 Guidances‟ Feedback
Achieved
Free cash flow generation:- Growing EBITDA margin
- Capex at low levels
- Working capital efficiency
Consistent EBITDA growth, working
capital under control and low capex
Grow 50% above marketGrowth of 71% in e-commerce
(compared to market growth of 40%)
2010 EBITDA margin in the same level
as GlobexEBITDA of 4.7% (Globex 4.0%) ¹
Casas Bahia and Wholesale operation
integration in 2010.100% integrated in Nov„2010
Guidance
¹ % of the net revenue
26
Guidances 2011
¹ % of net revenue
² % of net revenue; does not consider M&A transactions
Guidance
GROSS SALESAnnual growth between
2011-13
B2C Grow at least 30% to 50% above market (e-bit)
Wholesale Grow above inflation
EBITDA MARGIN2011 Between 6.0% and 7.0%¹
2013 Between 8.0% and 10.0%¹
WORKING CAPITALInventory financing
Keep, at least, +20 days in inventory financing
(suppliers - inventory)
Receivables discount expense (100% of receivables) Between 3.5% and 4.5%¹
CAPEX Up to 2.0%²
FOCUS ON CASH GENERATION
27
4Q10 Results
28
+18.5%+15.5%
„SAME-STORE‟ SALES MOVED UP BY 7.2% IN THE 4Q10
Gross sales of R$7.3 bn in the 4Q10,
7.9% up year-on-year
7.9%
‘Same-store’ highlights in the 4Q10:
Gross Sales (R$ mn)
(ex-Globex)
4Q09 4Q10
By banner By category
+8.4%Food
BeveragePerishables
In 2010:
R$ 26.1bn = +12.0%
„Same-store‟ grew by 9.5%
Growing higher than the 2nd player for the 10th consecutive quarter
GPA FOOD
6,746
7,282
4T09 4T10
29
Gross profit increased 8.3% to
R$1.7 bn in the 4Q10
25.9%26.0%
4Q09 4Q10
10% 14%Cash-and-Carry2
27.1%27.8%
a qualified team that seeks a win-
win relationship with suppliers
use of the intelligence of a pricing
tool in 60% of sales
reduction of the informal market
In 2010, gross profit of R$ 5.9 bn, growth of 12.2%
8.3%
Gross Profit (R$ mn)
(ex-Globex)
4Q09 4Q10
Gross Margin (R$ mn)
(ex-Globex)
1 GPA Food excluding cash-and-carry operation (Assaí)2 Cash-and-carry operation share in GPA Food net sales
GPA FOOD
1,5681,698
4T09 4T10
30
Operating Expenses of R$ 1.1 bn in 4Q10
account for 17.3% of net sales
In 2010, operating expenses represented 18.0%
of net sales (18.1% in 2009) in spite of:
IT growth to support expansion
Expenses with the opening of 47 stores
and with the conversion of 93 Sendas and
CompreBem stores
GPA Management and
Control Executive Office
was created in 4Q10
INITIATIVES:
Resumption of expenses groups
Implementation of matrix expenses
management
Zero-based budget in the second half of
2010
GPA FOOD
31
EBITDA margin of 8.7% in 4Q10
is the highest since 1995
8.6% 8.7%
4Q09 4Q10
9.1%9.6%
2010 EBITDA: R$ 1.7 bn = +12.2%
Retail1 operational margin of 9.6% in
the period
Cash-and-Carry210% 14%
EBITDA(ex-Globex)
EBITDA Margin(ex-Globex)
1 GPA Food excluding cash-and-carry operation (Assaí)2 Cash-and-carry operation share in GPA Food net sales
(R$ mn)
4Q09 4Q10
GPA FOOD
520
5679,1%
32
Financial Result
Financial expenses representing 2.0% of 4Q10
net sales:
increase in the SELIC rate
receivables discount: R$ 38.0 mn (0.6%)
Net Financial Expense (R$ mn)
(ex-Globex) % of Net Sales
102
131
2.0%1.8%
3Q10 4Q10
33
4Q10
Investments in 2010
1 Compared to December, 2009.
2010
R$
495.4
mn New stores and lands
R$132.6 mn
Renovations and
conversions:
R$ 185.4 mn
Infrastructure
R$177.4 mn R$
1,1
51.4
mn
New stores and lands
R$ 295.4 mn
Renovations and
conversions:
R$ 466.2 mn
Infrastructure
R$ 389.8 mn
15 new stores
9 Assaí
5 Extra Hiper
1 Extra Fácil
3.6% of area expansion
(+49.3 thousand m2) 1
47 new stores 13 Assaí
8 Extra Hiper
3 Extra Super
23 Extra Fácil
93 conversions of CompreBem
and Sendas
6.1% of area expansion (+84.9
thousand m2) 1
Amount
Invested
Stores and
Area
GPA FOOD
34
Consolidation
of marketing
intelligence
2) Centralization of the
operational command of nearly
1,000 stores
FOCUS: OPERATION AND RESULT, CUSTOMER COMES
FIRST
Strengthening
the brands‟
positioning
PMO creation
Management of:
•Logistics - Booz & Co.
•Systems (front/back) – PwC
•Operations SSC – Accenture
•Special projects - Galeazzi
GLOBEX
1) Unification of
negotiations with suppliers,
(complying with the APRO)
2010 Main Achievements
35
Globex – Results Consolidation GLOBEX
GLOBEX 1
NOVA PONTOCOM NOVA CASAS BAHIA (NCB)
•Ponto Frio stores (12 months)
• Wholesale (10 months)
•PontoFrio.com.br (12 months)
•E-Hub (12 months)
•Extra.com.br (9 months)
•CasasBahia.com.br (2 months)
•Wholesale (2 months)
•Casas Bahia stores (2 months)
•Bartira (2 months)
•CBCC (2 months)
NOVA CASAS BAHIA RESULTS CONTEMPLATE LAST 2 MONTHS OF 4Q10
1 Considers the results consolidation in the end of the 4Q10.
36
Gross sales of R$ 2.3 bn in the 4Q10
(ex-Nova Casas Bahia)
1,610
2,35046,0%
In 2010:
Globex (ex-NCB): R$ 7.0 bn, +47.0%
„Same store‟ sales growth of 42.1%
Globex (with NCB2): R$10.0 bn
GLOBEX
‘Same store’ highlights in 4Q10:
e-commerce:
+63.0%
Guidance achievement of
R$ 7 bn1 in 2010
Gross Sales1 (R$ mn)
(Ponto Frio and e-commerce)
4Q09 4Q10
1 Nova Casas Bahia is excluded for comparison purposes.
2 Nova Casas Bahia is included as of November, 2010.
37
Gross profit of R$391 mn in the 4Q10, with
a margin of 19.1% (ex-Nova Casas Bahia)
The improvement in the result
was achieved by:
Beginning of the integration
process with NCB and synergies
capture
181
391
+116.0%
12.9%
19.1%Adjusted Gross Profit1
of R$419 mn, with a
margin of 20.4% if the
effects of R$27.3 mn
related to the ICMS
tax substitution are
excluded.
In 2010:
Globex (ex-NCB): R$ 1.2 bn with a margin of 19.4%
Globex (with NCB2): R$ 1.9 bn with a margin of 22.1%
GLOBEX
% of Net SalesGross Profit1 (R$ mn)
(Ponto Frio and e-commerce)
4Q09 4Q10
1 Nova Casas Bahia is excluded for comparison purposes.
2 Nova Casas Bahia is included as of November, 2010.
38
Expenses represent 13.9% of net sales in
the 4Q10 (ex-Nova Casas Bahia)
15.2%
13.9%
214285
In 2010:
Globex (ex-NCB): R$ 943 mn (15.3% of net sales)
vs R$ 920 mn (23.2%) in 2009
Globex (with NCB2): R$ 1.6 bn
In the 4Q101: 13.9% of net sales,
130 bps down on 4Q09.
The process continues in 2011.
GLOBEX
% of Net Seles
Operating expenses1 (R$ mn)
(Ponto Frio and e-commerce)
4Q09 4Q10
1 Nova Casas Bahia is excluded for comparison purposes.
2 Nova Casas Bahia is included as of November, 2010.
39
EBITDA of R$106 mn in the 4Q10, with a
margin of 5.2% (ex- Nova Casas Bahia)
Highlights: Significant sales increase in the
period;
Gross margin improvement through
the beginning of the integration with
NCB
Ongoing expense management and
control
Ponto Frio: the best margin
since the acquisition
-33
106
Adjusted EBITDA3 of R$133.5 mn
and margin of 6.5%
In 2010:
Globex (ex-NCB): R$ 252 mn
Globex (with NCB2): R$ 348 mn
-2.4%
5.2%
GLOBEX
EBITDA1
(Ponto Frio and e-commerce)
% of Net Seles
4Q09 4Q10
1 Nova Casas Bahia is excluded for comparison purposes.
2 Nova Casas Bahia is included as of November, 2010.
3 Adjusted by non-recurring events of R$27.3 mn.
40
Financial Result
In 2010:
Globex (ex-NCB) R$ 293 mn
Globex (with NCB2): R$ 415 mn
90
99
5.9%4.8%
GLOBEX
Financial Expenses1 of R$105 mn,
representing 5.1% of net sales
• R$ 80.7 mn excluding non-
recurring effects of R$18.0 mn,
equivalent to 3.9% of net sales
Receivables discount of R$ 61.2 mn,
equivalent to 3.0% of net sales, a 50 bps
reduction compared to the 3Q10
Net Financial Expenses1 (R$ mn)
(Ponto Frio and e-commerce) % of Net Sales
3Q10 4Q10
1 Nova Casas Bahia is excluded for comparison purposes.
2 Nova Casas Bahia is included as of November, 2010.
41
Net Result (Consolidated)
Net Income1 (R$ mn)
In 2010
Consolidated net income: R$ 722 mn,
2.3% of net sales
1 Exclui-se NCB para efeitos de comparação2 Inclui NCB a partir de novembro2010
% of Net Sales
Adjusted net result of Globex
ex-NCB is positive: R$ 40 mn, with
margin of 2.0%, compared to a net
loss of R$112 mn and margin of
-8.0% in the 4Q09
247
4473,3%
4,0%
Adjusted net
income of
R$254.7 mn, with
margin of 2.3%+ 81%
4Q09 4Q10
42
Net debt (GPA Consolidated)
Investments of R$ 509 mn in the 4Q10
Initiatives underway as of
October 2010 to reduce
working capital:
Increase the sales with
interest
Interest-free payment term
reduction
Consolidated Net debt evolution(1)
3Q10 4Q10
(1) Net debt in the end of the period(2) Net debt does not consider receivables discount.
2.0
1.2
1.1xNet debt(2)
EBITDA=0.6x
43
FIC in 4Q10
3.0
11.4
+273.9%
Adjusted Equity Income (R$ mn)
4Q09 4Q10
FIC 2010 in figures:
Result of R$47.4 mn, R$34.6 mn relates to GPA and
R$12.8 mn to Globex:
50% of the current clients have hired
services (insurance, etc.)
50% of the use of the cards is out of GPA
7.8 million active clients
14% share in Group’s total sales
44
Investor Relations contacts
Forward-looking Statements
The forward-looking statements contained herein arebased on our management’s current assumptionsand estimates, which may result in materialdifferences regarding future results, performanceand events. Actual results, performance and eventsmay differ substantially from those expressed orimplied in these forward-looking statements due to avariety of factors, such as general economicconditions in Brazil and other countries, interest andexchange rate levels, legal and regulatory changesand general competitive factors (whether global,regional, or national).
Grupo Pão de Açúcar (GPA)
Globex Utilidades S.A.
Investor Relations Team
Phone: +55 (11) 3886-0421
Fax: +55 (11) 3884-2677
gpa.ri@grupopaodeacucar.com.br
www.grupopaodeacucar.com.br/ir/gpa