HSBC – 9TH EQUITY CONFERENCE - Sonae – 9th equity conference ... the corporate guidelines ......
Transcript of HSBC – 9TH EQUITY CONFERENCE - Sonae – 9th equity conference ... the corporate guidelines ......
HSBC – 9TH EQUITY CONFERENCE
March 2011
INVESTOR’SINVESTOR’S
KEY QUESTIONSKEY QUESTIONSAND CONCERNSAND CONCERNS
2
Q1Q1.
WHAT ISWHAT ISSONAE?SONAE?
Q1. WHAT IS SONAE?
WE ARE SONAEWE AREA RETAILCOMPANY 100% 100%
SONAE MC SONAE SR
100%
SONAE RP
SONAE50%
SONAE SIERRA
55%
SONAECOM
• Market leader in foodand specialized retail
SONAE MCFood Retail
Hypers Non Food Retail
SONAE SRSpecialisedRetail
Retail real
SONAE RPRetail Properties
Shopping centre
SONAE SIERRAShopping Centres
Integrated
SONAECOMTelco
pformats
• With Board controlof a Shopping Centreand a Telecommunications CORE RELATED
Hypersand Supers
Non-Food Retailformats:sports, fashionand electronics
Retail realestate assets
CORE
Shopping centredeveloper, ownerand manager
Integratedtelecomprovider
and a Telecommunicationsbusiness
COREBUSINESSES
RELATEDBUSINESSES
COREPARTNERSHIPS
RETAIL & RELATED BUSINESSES
4
Q1. WHAT IS SONAE?
WITH A STABLE FREE FLOAT31 .4%WITH A STABLESHAREHOLDERSTRUCTURE
FREE FLOATOF CIRCA47%
53.1 %
Reference shareholder,Efanor, a family holding
47%EfanorBestinverBPI
*including BPI equity swap
2.5%, y gcompany
Fundação BerardoNorges Bank
BPI
2.1%
2.0%
8.9%Others
BPIstake includesequity swapof 132.8 millionSonae shares
SHARE CAPITAL2,000 million
AVERAGE DAILYVOLUME (2010)~6 million shares;5 2 million e ros
MARKETCAPITALIZATION(as of 31 Dec 10)1 5 billion e ros
FREE FLOAT(as of 31 Dec 10)0.72 billion euros
5
Sonae shares(~7% of sharecapital)
5.2 million euros 1.5 billion euros
Q2Q2.
WHAT ISWHAT ISYOUR CORPORATEYOUR CORPORATESTRATEGY?STRATEGY?
Q2. WHAT IS YOUR CORPORATE STRATEGY?
CORPORATE STRATEGIC PILLARSVALUE CREATIONTHROUGHINTERNATIONALEXPANSION
GO INTERNATIONAL DIVERSIFYINVESTMENT STYLE
LEVERAGEEXCEPTIONAL ASSETBASE IN PORTUGAL
AND THESTRENGTHENINGOF THE CORE
• THE MAIN STRATEGIC PRIORITY• DILUTION OF COUNTRY RISK• NEW GROWTH AVENUES
• ADOPT THE MOST APPROPRIATEINVESTMENT STYLE
• WHOLLY OWNED BUSINESSESPARTNERSHIPS
• INNOVATE• GENERATE NEW BUSINESSES• STRENGTHEN OUR COMPETITIVE
POSITIONBUSINESSES
PORTUGAL IS A SMALL COUNTRY• Current core business with leader
• Use capital light models(renting vs. owning;
• PARTNERSHIPS• MINORITY STAKES
POSITION
• Capitalize on assetsand competencies in base market
formats in mature markets
• Widens competences, knowledgeand experience pool
• New sources of value creation
partnerships vs. full control)
• Release capital from real estate
• Accelerate growth whileminimizing indebtedness level
to launch new projectsin adjacent areas
• Reinforce the asset baseand protect core markets
7
g
• Minimizes risk
Q2. WHAT IS YOUR CORPORATE STRATEGY?
CORPORATE SONAE MC SONAE SR SONAE RP
STRATEGYREFLECTEDIN EACH RETAIL
FOCUS ON LEADERSHIPAND PROFITABILITY
FOCUS ON GROWTH ANDINTERNATIONALIZATION
ASSETMONETIZATION
BUSINESSSTRATEGY
• Consolidate market leadership
• Explore new adjacent businessopportunities leveraging on a strongmanagement team and know-how
• Configure an ambitious internationaloperation, with a strong expansionin Spain
• Explore franchising and/or
• Plan to release investedcapital freehold ownership of salesarea in food retail
• Focus on Asset Managementmanagement team and know howin retail
• Manage the business in Portugalas a sustainable cash flow generator
• Look for international opportunities
Explore franchising and/orjoint-venture opportunitiesas means to accelerate growth
• Consolidate market leadershipin Portugal and improve profitability
Focus on Asset Management
• Seek Property Developmentopportunities
Sonae’s businessesaccommodatedthe corporate guidelinesand developed pp
of growth • Continue to use Portugal as a testplant for new formats
and developedthe correspondentstrategic planning
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Q2. WHAT IS YOUR CORPORATE STRATEGY?
CORPORATE PROFITABLEGROWTH
INTERNATIONALEXPANSION
REDUCEDEBT LEVELSTRATEGY
MATERIALISEDIN MLT FINANCIAL
GROWTH EXPANSION DEBT LEVEL
ROE>15%
25% of turnoverd 35% f t
Deleveraging overti i b l t
Deliver growthinturnover and profitability
GOALS >15% and 35% of assetsin internationaloperations
time in absoluteand relative terms
inturnover and profitability,while pursuing a longterm strategyof internationalizationand strengthening of core
Turnover growth rate>10%
~1/3 of investedcapital in partnershipswithout full control
Investment gradeprofile in 2012
and strengthening of corebusinesses, and graduallyreduce debt level, improvingleverage ratios
without full control
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Q3Q3.
WHATWHATHAVE YOU DONEHAVE YOU DONESO FAR?SO FAR?
Q3. WHAT HAVE YOU DONE SO FAR?
PROFITABLE GROWTHPROFITABLE GROWTHAND NEW ADJACENTBUSINESS AREAS
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ProfitableG th
Q3. WHAT HAVE YOU DONE SO FAR?
Growth
IN 2010 FOOD MARKETWE INCREASEDLEADERSHIPOF THE FOOD
INCREASE IN SALES(+5%) ABOVE THAT
MODELOCONTINENTEOF THE FOOD
RETAIL MARKET(+5%) ABOVE THATOF THE MODERNRETAIL MARKET
1.3x .
2 4X 2 7x3.6x
2.4X 2.7x3.5x
MarketLeader
2ndPlayer
3rdPlayer
4thPlayer
5thPlayer
6thPlayery y y y y
Source: Homescan Nielsen12
Q3. WHAT HAVE YOU DONE SO FAR?
ProfitableG thGrowth
LEADERSHIP SALES ON A LIKE FOR LIKEBASIS 2010 3%
EBITDA margin 2010 = 7.1%I i f 6 4% i 2009LEADERSHIP
HAS ENABLEDGROWTH ANDPROFITABILITY
BASIS 2010 = 3%Benefiting from a clear valuefocused offering
Increasing from 6.4% in 2009reflecting scale, cost-cuttingmeasures and effectiveness ofpromotions through the loyalty card
PROFITABILITYTO BE ACHIEVED TURNOVER (M€) EBITDA (M€) TURNOVER = +5%
EBITDA= +16%2,930
3,2753,106231
187231
199+6% +5%
+6% +16%
2008 20102009 2008 20102009
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Q3. WHAT HAVE YOU DONE SO FAR?
ProfitableG th
NEW TECHNIQUES OF USING CLIENT INFORMATION:PERFORMANCE
Growth
Q
‘CUSTOMER CENTRICITY RETAIL’PERFORMANCELEVERAGESON THE VALUEAND SUCESSAND SUCESSOF THE LOYALTYPROGRAM
2008NUMBER OF CLIENTSWITH LOYALTY CARD
2009 2010
2.8 million 2.9 million >3.0 million
% OF SALES ASSOCIATEDWITH CARD 83% 84.5% 86%
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Q3. WHAT HAVE YOU DONE SO FAR?
ProfitableG th
KEY ISSUE:PERFORMANCE
Growth
INTERNATIONAL SOURCINGPERFORMANCEREFLECTSTHE STATEOF THE ARTOF THE ARTBUSINESSPROCESSES
• Internationalprocurement,quality control,
• Recurrentcontactsin 50 countries
• Sonae MCwith 14%of international
• ~80.000 SKU’sand ~2.000suppliers
administrativeand logisticmanagementSi 1994
• Dedicated officesin China and Brazil
sourcing• 700 M€of global importsfor Sonae group
• Since 1994
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Q3. WHAT HAVE YOU DONE SO FAR?
ProfitableG th
PERFORMANCE # OWN REFERENCES AND % FMCG SALES
Growth
PERFORMANCEREFLECTSTHE STRONGAND CONTINUOUS
AND
OWN LABEL OFFERED IN ALL PRODUCT CATEGORIESAND INCREASING IMPORTANCEAND CONTINUOUS
INVESTMENTIN PRIVATE LABEL
INVESTMENT IN OWN BRAND• Broadening of the Own Brand range• Representing a quarter of FMCG sales
2,1002,400 2,500
• Representing a quarter of FMCG sales• Own Brands include:• The Continente brand
(20% cheaper than the sales category leader)1st i b d
20%23%
26%
• 1st price brands(best price on the market)
• Controlled brands(gourmet, selection, etc.)2008 2009 2010
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Q3. WHAT HAVE YOU DONE SO FAR?
ProfitableG th
PERFORMANCE ORGANIC GROWTH IN LAST 12 MONTHS
Growth
PERFORMANCEREFLECTSTHE SOLIDORGANIC GROWTH
Sales area (‘000 m2) STORES415
NEW STORES:
+17 000m2
492 528 544
ORGANIC GROWTHIN PORTUGAL
415 +17,000m2
+44 stores+3%+3%
SALES AREA544,000 M2
2008 2009 2010
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Q3. WHAT HAVE YOU DONE SO FAR?
ProfitableG th
PERFORMANCE COST CONTROL STOCK IMPROVEMENTS
Growth
PERFORMANCEREFLECTS OUROPERATIONALEFFICIENCY
COST CONTROL STOCKOPTIMIZATION
IMPROVEMENTSIN OPERATIONALEFFICIENCY
EFFICIENCYCost-cutting measuresSpecific teams focusedon minimizing
d ll
Implementationof the Kaizen methodaimed at identifying,
d d l
Reductionon average stock(less 3 days in 2010)
and controlling costs reducing and eliminatingsuboptimal processes
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Q3. WHAT HAVE YOU DONE SO FAR?
ProfitableG th
AND THE CONTINENTE AND MODELO EACH HAVE DISTINCTIVE COMPETENCIES
Growth
… AND THESTRENGTHENINGOF OURCOMPETENCIES
STRONG BRANDRECOGNITION
PRODUCTOFFER VARIETY
EXCELLENCEOF THE LOGISTICS
Continente is considered Continente: 2 logistics warehouses
COMPETENCIESAND VALUEPROPOSAL
RECOGNITION OFFER VARIETY OF THE LOGISTICSINFRASTRUCTURE
to be the “Brandof Confidence”by consumersfor the 8th year running
~70,000 sales items
Modelo:~40 000 sales items
gto centralize distributionfor the North and the Southof the countryTotal logistics area: 221 000 m2for the 8 year running 40,000 sales items Total logistics area: 221,000 m2
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Q3. WHAT HAVE YOU DONE SO FAR?
New adjacentb i t iti
LEVERAGE
business opportunities
A t t R i f t f thC i b i
LEVERAGEON KNOW-HOWIN RETAIL
• A new store conceptfor Deep Frozen Products
• Offers a wide rangeof products, such as readyto eat meals desserts
• Reinforcement of theexisting wholesale business(since 2008 supplier to a numberof petrol station conveniencestores)
• Convenience business• Franchised local food retail
stores• Between 150 m2 and 999 m2
• Located mainlyto eat meals, desserts,snacks, as well as basicingredients such as fishand meat
stores)• Satisfy the needsof professional customerswho operate in the hoteland restaurant sectors
• Located mainlyin residential areas
• Partners with guaranteedcompetitive prices, accessto own brand Continente and restaurant sectors
supplying public and privateinstitutions
• Own sales force, makingdeliveries to the customer’sd
and other suppliers’ products
door
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PROFITABLE GROWTHPROFITABLE GROWTHAND INTERNATIONALAND INTERNATIONALEXPANSIONEXPANSION
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Q3. WHAT HAVE YOU DONE SO FAR?
ProfitableG th
WE MAINTENED NEW STORES:L 12 h
Growth
EBITDAP t l (M€)
TURNOVERP t l (M€)
WEGROWTHAND PROFITABILITYIN PORTUGAL
Last 12 months
+18,000m2
+18 stores1,041988
Portugal (M€)Portugal (M€)
STORES414
+18 stores898988
587271
Strengthening of leadershipposition in the consumerelectronics and sports goods
+5%+2%
+21%
414
2008 20102009 2008 20102009
p gsectorsSPORTZONE #1 in PortugalWORTEN #1 in Portugal
Good performance
SALES AREA256,000 M2
2008 20102009 2008 20102009Good performanceby the textiles formatsMODALFAZIPPY
256,000 MAS AT END 2010
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InternationalE i
Q3. WHAT HAVE YOU DONE SO FAR?
Expansion
WE ACCELERATED SPORTZONE = 28 (+14) | WORTEN = 25 (+11) | ZIPPY = 36 (+26)
NEW STORES:Last 12 months
WEOUR INTERNATIONALGROWTH
SPORTZONE ( 14) | WORTEN ( 11) | ZIPPY ( 26)
INTERNATIONALORGANIC GROWTHSales area (‘000 m2)
TURNOVERInternational (M€)
231108+51 stores+52,000m2
+60%
Sales area ( 000 m2)
144
34
+94%+60%
56STORES89
30
2008 20102009 2008 2009 2010
SALES AREA108,000 M2
AS AT END 2010
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InternationalE i
Q3. WHAT HAVE YOU DONE SO FAR?
Expansion
INTERNATIONAL Sonae SREBITDA (M€)
EXPANSION EFFORTIMPACTINGPROFITABILITY BUT
Sonae SR Portugal
Sonae SR International
-
58
7172
IN LINE WITH THEGOAL OF POSITIVEEBITDA IN 2012,
SONAE SR EBITDAREFLECTING:
Market entry costs
58
,IN SPAIN • Market entry costs
• Organic growth20% 4852 45
6 23
20092008
-6 -23-27
2010
24
Q3. WHAT HAVE YOU DONE SO FAR?
InternationalE i
INTERNATIONALI- 1ST JOINT-VENTURES 1ST FRANCHISING > 110 STORES
Expansion
INTERNATIONALIZATION BASEDON NEW EXPANSIONMODELS:
Worten Canary IslandsSportZone Canary Islands
CONTRACTS 10 COUNTRIES
Zippy Canary IslandsZippy Middle East
SpainKingdom of Saudi ArabiaJOINT-VENTURES
AND FRANCHISING
SportZone Canary Islands Zippy Middle East Kingdom of Saudi ArabiaUnited Arab EmiratesJordanEgyptEgyptLebanonQatarBehrainBehrainKuwaitKazakhstan
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ASSETASSETMONETIZATIONMONETIZATION
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AssetM ti ti
Q3. WHAT HAVE YOU DONE SO FAR?
Monetization
RETAIL HYPERMARKETSINVESTED CAPITAL 9 SALE & LEASE BACKRETAILPROPERTIESBUSINESS UNITAN IMPORTANT
Continente34 stores owned90% total sales area
(end 20 10)
1.4 Billion Euros(Net book value)
TRANSACTIONSCOMPLETEDTotal Cash-In = 153million €Capital Gain = 56 million €AN IMPORTANT
SOURCEOF CAPITAL
SUPERMARKETSModelo98 stores owned79% total sales area
Azambuja logisticsplatformValue - 33 million €
79% total sales area2 Modelos storesValue - 12 million €
6 Modelos stores;;1 Continente; 1 Worten;1 SportZoneValue -65 million €
1 Continente/1 Worten
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1 Continente/1 WortenValue -42 million €
Q4Q4.WHAT ARE YOURWHAT ARE YOURSTRATEGIC OPTIONSFOR THE SHOPPING CENTREFOR THE SHOPPING CENTREAND TELECOMMUNICATIONSAND TELECOMMUNICATIONSBUSINESSES?
Q4. WHAT ARE YOUR STRATEGIC OPTIONS FOR THE SHOPPING CENTRE BUSINESS?
A SELF AN INTERNATIONAL SHOPPING CENTRESPECIALIST 50% OWNED JOINT VENTURE
COMMITMENT TO ACHIEVE ABOVE INDUSTRYAVERAGE RETURNA SELF
SUSTAINABLECOMPANY WITH NO“CALL FOR MONEY”
SPECIALIST, 50% OWNED JOINT-VENTUREWITH GROSVENOR• With presence in Portugal, Brazil, Spain, Italy,Germany, Greece and RomaniaOwning 53 Shopping centres with open market value
AVERAGE RETURN• Return on Equity - long term target of 15%• Dividends - 50% of direct net profit after minoritiesplus 50% gain on salesCALL FOR MONEY
AND A DIVIDENDPAYER ON AREGULAR BASIS
• Owning 53 Shopping centres with open market valueof ~6.5 billion euros
EBITDA (M€) DIRECT PROFITS (M€) EBITDA PERFORMANCE
IN 2010 :• Occupancy rate = 96%• Total rentscollected (fixed
andvariable)up 4% on a LfL basis
109123
REFLECTING ONGOINGCOST CUTTING MEASURESAND OPERATIONALIMPROVEMENTS+13%andvariable)up 4% on a LfL basis
• Expansion restricted in Europebut partially offset by greaterdevelopment activity in Brazil
4358 INDIRECT PROFITS
SHOWING SIGNSOF STABILIZATION
+13%
+36%
2009 2010 2009 2010
29
Q4. WHAT ARE YOUR STRATEGIC OPTIONS FOR THE SHOPPING CENTRE BUSINESS?
GROW CONTINUE TO MAKEGROW IN PROMISING NEW APPROACHGROWIN EMERGENTMARKETS
OPERATIONALIMPROVEMENTS,in spite of the fallin consumption in certain
MARKETS:• Speed up expansionin Brazil, so as to capitalizeon the country s rapid
TOWARDS EUROPE ASSETPORTFOLIO• Shift to a more capital lightapproach in Iberiain consumption in certain
sectors in Europeon the country s rapideconomic growth
• Reinforce emergentmarkets presence andservices to third parties
approach in Iberia,concentrating on keyassets
• Prepare the companyfor European recoveryservices to third parties,
developing new growthavenues profiting fromthe expertise as retail
d l
for European recoveryin selected countries,freeing up capitaland starting withh bproperty developers
and property and assetmanagers
the best projects
30
Q4. WHAT ARE YOUR STRATEGIC OPTIONS FOR THE TELECOMMUNICATIONS BUSINESS?
A SUSTAINABLE• Stable/growing mobile business:
i k t h t i i d i• Comfortable capital structure
St bl f h h ldA SUSTAINABLESTAND ALONEBUSINESS
growing market share; sustaining good margins• Good performing wholesale:
Corporate & Wireline business• Fully integrated telecom’s structure
and convergent market approach
• Stable reference shareholder• Strong management team• Growth in mobile customers and customer revenues• Gains in mobile market share• Cost control policies
Strict investment management
EBITDA (M€)MOBILE SEGMENT CUSTOMERS (thousand)
• Strict investment management
3 5613,604
3,433 3,450 3,4693,561
176
194
3,604
160
+5%+10%
4Q10 2008 2009 20104Q09 1Q10 2Q10
31
3Q10
Q4. WHAT ARE YOUR STRATEGIC OPTIONS FOR THE TELECOMMUNICATIONS BUSINESS?
CASH FLOWCASH FLOWMANAGEMENT
FOCUSOn the growth On cash-generation,
FOCUSg
of the mobile business,leading mobile marketshare gains
greinforcing efficiencyprograms
share gains,particularly in the mobiledata segmentdata segment
32
Q5Q5.
HAVE YOU REACHEDHAVE YOU REACHEDYOUR FINANCIALYOUR FINANCIALOBJECTIVES?OBJECTIVES?
Q5. HAVE YOU REACHED YOUR FINANCIAL OBJECTIVES?
IN 2010 WE CONTINUEDIN 2010 WE CONTINUEDTO DELIVER PROFITABLEGROWTH ON TRACKGROWTH, ON TRACKOF OUR INTERNALOBJECTIVESOBJECTIVES
NET DIRECT PROFITS
22RECURRENT EBITDA
9TURNOVER TURNOVER RETAIL
+22%+9%+4% +7%34
Q5. HAVE YOU REACHED YOUR FINANCIAL OBJECTIVES?
W EW ECONTINUEDTO IMPROVE
21% 21%
13%14%
14%11pp
15pp14pp 13pp 14pp
16pp15pp
17pp 16pp
15%
18pp
11% 14%
16pp
TO IMPROVEOUR RETURNON EQUITY
7%
3% 2%5%
8%
6pp
pp
3pp0pp
10pp11pp 11pp
14%
ON EQUITY
Direct Incomecontribution to RoE
-7pp
-10pp -11pp -11pp
-7pp-4pp
-2pp-3pp
-2pp
ROE
Indirect Incomecontribution to ROE
4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 3Q102Q10 4Q10
35
4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 3Q102Q10 4Q10
Q5. HAVE YOU REACHED YOUR FINANCIAL OBJECTIVES?
W HILE GROSS CAPEX NUMBER OF STORESOUTSIDE PORTUGAL(2010)W HILE
INVESTINGIN FUTURE
GROSS CAPEX
412 M€OUTSIDE PORTUGAL
OUTSIDE PORTUGAL
(2010)
IN FUTUREGROWTH
89
OUTSIDE PORTUGAL
~100M€38
High levels of investmenti t il it i i
2007 2008 2010
1316in retail unit organic expansion:
+74,000m2(2010)2009
0
36
2007 2008 20102009
Q5. HAVE YOU REACHED YOUR FINANCIAL OBJECTIVES?
AND DELTA VS. SQLYNET DEBT... AND
W HILEREDUCING
NET DEBT
2,852M€335
REDUCINGNET DEBT 52
-79
2Q 3Q 4Q 1Q 2Q 3Q 4Q
-299-258
-301-228
37
2Q09
3Q09
4Q09
1Q10
2Q10
3Q10
4Q10
Q5. HAVE YOU REACHED YOUR FINANCIAL OBJECTIVES?
MAJORMAJORIMPROVEMENTIN DEBT EBITDA/INTEREST
CONSOLIDATED FIGURESNET DEBT/EBITDACONSOLIDATED FIGURES11 .5x
RATIOS9.7x
10.9x 11.4x
8 2x4.5x
4.8x4.6x
4.4x8.5x
7.8x
6 0x
7.1x
7.9x 8.2x 4.4x
3.6x4.1x 3.8x 3.7x
3.9x
4Q09
1Q10
2Q10
3Q10
4Q10
4Q09
1Q10
2Q10
3Q10
4Q10
WITHOUT SONAE SIERRA
6.0x3.1 x
38
09 10 10 10 10 09 10 10 10 10
Q6Q6.
ISN’T SONAEISN T SONAEA HIGHLY LEVERAGEDA HIGHLY LEVERAGEDCOMPANY?COMPANY?
Q6. ISN´T SONAE A HIGHLY LEVERAGED COMPANY?
AN APPROPRIATECAPITALSTRUCTUREIN EACH BUSINESS
SHOPPING CENTRESAND HOLDING LOAN
RETAIL AND TELECOMNET DEBT/EBITDA
TO SUPPORTFUTURE GROW THPLANS
TO VALUE
50.1%46.1% 47.2% 46.8%
3.4x
4.0x3.7x
3.4x46.4%
15% 15% 16% 15%2.2x 2.1x 2.0x 1.9x16%
2.5x
1 .8x
4Q09
1Q10
2Q10
3Q10
4Q10
SIERRA
HOLDING
4Q09
1Q10
2Q10
3Q10
4Q10
RETAIL
SONAECOM
40
09 10 10 10 10 09 10 10 10 10
Q6. ISN´T SONAE A HIGHLY LEVERAGED COMPANY?
TOTAL NET DEBTTOTAL NET DEBT PLAN TO REACHIS EXPECTED TO DROPSTEADILY DURINGTHE NEXT 6 YEARS
IS EXPECTEDTO DROPSIGNIFICANTLY
INVESTMENT GRADEBY 2012
• Strong growth efforts combinedwith planned reduction of debt
• Leveraging on the cash flow generated
• Each company should be perceivedas investment grade by 2012
• Have the option of issuing debt if neededg g gby the market leader operationsin Portugal
• Reflecting sale of retail propertyassets owned
p gto finance growth and/or repay debt
assets owned• Capital light growth approach,
with expansion based on operatingthe leasing of properties rather than
41
g p ptheir ownership
Q7Q7.
WHY SHOULD WE BUYWHY SHOULD WE BUYINTO YOUR STOCK?INTO YOUR STOCK?
Q7. WHY SHOULD WE BUY INTO YOUR STOCK?
UNDERVALUED SONAE’S PER HAS BEEN UNDERVALUED BOTH WHEN COMPAREDSHARE PRICE
HAS BEEN UNDERVALUED BOTH WHEN COMPAREDTO THE MARKET AND TO THE RETAIL SECTOR
SONAE PERComputed using total income
SONAE PER (DIRECT)Computed using direct income
22
Computed using total income Computed using direct income
1416 17
22
15 1416 17
19
14
19
1514
1215 16
15 14
1215 16
1414
2006
11
2007
14
2008
21
2009
15
2010
9
2006 2007 2008 2009 2010
814 19 11 8RETAIL PER (avg)GLOBAL PER (avg)
43
Q7. WHY SHOULD WE BUY INTO YOUR STOCK?
DIVIDEND PAYER The resilence of the cash flows generated gives confidenceth bilit t i t i h h ld ti liON A REGULAR
BASISon the ability to maintain shareholder remuneration policy
3 31 C t 4 2% 35% 39%MAINTAIN THESHAREHOLDERREMUNERATION DIVIDEND PER
SHARE 20 0DIVIDENDYIELD
PAY OUTRATIO
3.31 Cents 4.2% 35% 39%
PAY OUTRATIO
REMUNERATIONPOLICY
Considering Considering 2010 Considering 2010
SHARE 2010 YIELD RATIO RATIO
Proposed by the2010 .12.31 SharePrice
Direct Net Profits*attributable toequity holders
total Net Profitsattributableto equity holders
Board;+5% vs 2009
44* Excluding indirect income impact from devaluation of properties; non-cash impact
Q7. WHY SHOULD WE BUY INTO YOUR STOCK?
AN ATTRACTIVEINVESTMENTOPPORTUNITY
• Confirmed growth in Turnover and ProfitabilityConfirmed growth in Turnover and Profitabilityin the face of adverse macroeconomic conditions
• A clear and ambitious strategy that will enablec ea a d a b t ous st ategy that will enablefor future growth and value creation
• Strong culture and valuesg• High quality management teams
45