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Wal-Mart Stores, Inc. (NYSE: WMT) 1
Wal-Mart Stores, Inc. (NYSE: WMT)
Bank of America Merrill Lynch Consumer & Retail Conference March 12, 2013
Charles Holley Executive Vice President & CFO
Wal-Mart Stores, Inc. (NYSE: WMT) 2
Forward-looking statement
Walmart includes the following cautionary statement so that any forward-looking statements made by, or on
behalf of, Walmart will enjoy the safe harbor protection of the PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995, as amended. Such forward-looking statements, which will describe our objectives, plans, goals,
targets or expectations, can be identified by their use of words or phrases such as “anticipate,” “estimate,”
“expect,” “forecast,” “plan,” “projected,” “will be” or words or phrases of similar import. Statements of our
expectations for FY14, and any subsequent fiscal years are forward-looking. Walmart’s actual results might
differ materially from those expressed or implied in a forward-looking statement as a result of factors
including, among others, recessionary economic environment, cost of goods, competitive pressures, availability
of credit, geopolitical conditions and events, labor and healthcare costs, inflation, deflation, consumer
spending patterns, debt levels and credit access, currency exchange fluctuations, trade restrictions, tariff and
freight rate changes, fluctuations in fuel, other energy, transportation and utility costs, health care and other
insurance costs, accident costs, interest rate fluctuations, other capital market conditions, weather conditions,
storm-related damage to facilities, customer traffic, factors limiting our ability to construct, expand or relocate
stores, regulatory matters and other risks set forth in our SEC filings. Our most recent Annual Report on Form
10-K and our other filings with the SEC contain more information concerning factors that, along with changes
in facts, assumptions not being realized or other circumstances, could cause actual results to differ materially
from those expressed or implied in a forward-looking statement. Walmart undertakes no obligation to update
any forward-looking statement to reflect subsequent events.
Wal-Mart Stores, Inc. (NYSE: WMT) 3 Historical Figures as Reported
Fiscal year 2013 results
$405 $419
$444
$466
FY10 FY11 FY12 FY13
Net Sales ($ Billions)
Strong sales growth
10-yr. CAGR: 7.3%
Leveraged expenses
19.7%
19.4%
19.2%
19.1%
FY10 FY11 FY12 FY13
SG&A (% Sales)
3-yr. improvement:60 bps
$3.73
$4.18 $4.54
$5.02
FY10 FY11 FY12 FY13
EPS
Returned value
10-yr. CAGR: 11.1%
Q4 snapshot: FY13 vs. FY12
Sales growth: 3.9% $127.1B vs. $122.3B
Op Inc growth: 2.4% $8.6B vs. $8.4B
EPS growth: 10.6% $1.67 vs. $1.51
Wal-Mart Stores, Inc. (NYSE: WMT) 4
Productivity loop facilitates consistent EPS growth
Note: Source: EPS based on internal forecasts and are dependent on actual share repurchase completed and potential acquisitions through FY13. * Guidance as of Feb 21, 2013
$1.76 $2.03
$2.46 $2.72
$2.93 $3.15
$3.35
$3.73
$4.18
$4.54
$5.02
$5.20 – $5.40*
FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY14E
Growth
Share Repurchase
EDLC
EDLP 10-yr. CAGR: 11%
Future Growth
Wal-Mart Stores, Inc. (NYSE: WMT) 5
Free cash flow ($ Billions)
$4.5 $5.4
$11.6
$14.1
$10.9 $10.7
$12.7
FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY14
Free cash flow grew by 18.1% to $12.7B in FY13
Continued strong free cash flow
FY14 not drawn to scale
Wal-Mart Stores, Inc. (NYSE: WMT) 6
$0.36
$0.52 $0.60
$0.67
$0.88 $0.95
$1.09 $1.21
$1.46
$1.59
$1.88
FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14
Strong cash position rewards shareholders
10 yr CAGR: 18%
Annual dividend per share
Increase of 18%
Wal-Mart Stores, Inc. (NYSE: WMT) 7
$1.6 $2.2 $2.5 $2.8 $3.6 $3.7 $4.2 $4.4 $5.0 $5.4
$5.0 $4.5 $3.6 $1.7
$7.7
$3.5
$7.3
$14.8
$6.3 $7.6
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13
Dividends Share repurchase
Returns to shareholders remain a top priority
$6.6 $6.8 $6.1
$4.5
$11.3
$7.3
$11.5
$19.2
$11.3
$13.0
Over the last 10 years, we’ve returned nearly $100 B to our
shareholders.
Wal-Mart Stores, Inc. (NYSE: WMT) 8
Company priorities for success
U.S. operating segments Delivering a strong Walmart U.S. and Sam’s Club business
Capital allocation Driving greater efficiency through disciplined capital allocation
Global eCommerce Investing in Global eCommerce
Compliance Continuing to strengthen our company’s compliance organization
International Improving returns for International
Leverage Meeting our FY17 leverage goal
Wal-Mart Stores, Inc. (NYSE: WMT) 9
Walmart U.S. delivered strong FY13
*For the 52-week period ending Jan 26, 2013 as reported by Nielsen , including Food, Consumables and H&W (OTC)
Net sales
~$274.5B Increase of 3.9% or $10.3B
Operating expenses
27bps of Leverage
Operating income
~$21.5B Increase of 5.4%
Grew profit faster than sales
each quarter this year
Gained 50 bps of market share in FY13*
Gross profit rate down 16 bps
27.37% vs. 27.53%
Price investment
U.S. Segments
Wal-Mart Stores, Inc. (NYSE: WMT) 10
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
Walmart U.S. increases sales through core strategy
• Increased SKU count • EDLP • Back to basics • One-stop shopping
U.S. Segments
Wal-Mart Stores, Inc. (NYSE: WMT) 11
-40
-30
-20
-10
0
10
20
30
40
50
60 Three consecutive years of
leveraging operating expenses
Walmart U.S. continues operating expense leverage B
asis
po
int
Ch
ange
Yo
Y
U.S. Segments
Wal-Mart Stores, Inc. (NYSE: WMT) 12
-40
-20
0
20
40
60
80
100
Operating expense change Gross margin change
Walmart U.S. also improved gross profit leverage B
P C
han
ge Y
oY
U.S. Segments
Wal-Mart Stores, Inc. (NYSE: WMT) 13
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
Net sales Operating income
Walmart U.S. operating income growing faster than sales G
row
th R
ate
U.S. Segments
Wal-Mart Stores, Inc. (NYSE: WMT) 14
$1.6 $1.6 $1.5
$1.7 $1.9
$2.0
$0
$2
$4
08 09 10 11 12 13 Future Net sales Operating income
Sam’s Club grows sales and operating income steadily
(In B, USD)
$56.4
$53.8 $49.5 $47.8 $48
$44.3
Total sales Op. Inc.
FY
$160
$0
$120
$80
$40
U.S. Segments
(Data includes fuel) Future not drawn to scale
Wal-Mart Stores, Inc. (NYSE: WMT) 15
International is still a growth engine
12.1%
15.2%
7.4%
FY 11 FY 12 FY 13
Sales growth (YoY)
Note: Sales growth figures based on reported financials.
21
42
19
FY 11 FY 12 FY 13
Organic square footage growth (in millions)
• Continue to drive EDLC & EDLP
• Disciplined growth by
improving new store openings
• Focus on improving
profitability in Brazil & China
International
Wal-Mart Stores, Inc. (NYSE: WMT) 16
International gaining market share FY13 Walmart growth vs. market growth
31.6%
11.7% 13.5%
9.9%
7.3%
0.6%
15.8%
4.9% 5.2%
25.7%
11.0% 12.8%
9.5%
15.4%
0.2%
8.9%
2.4% 3.1%
Argentina Brazil Chile Mexico/ Central America
China Japan South Africa
Canada UK
Walmart growth
Market growth
Latam Asia EMEA & Canada
Note: Canada through November
International
Sources: Market Growth: Argentina: AC Nielson; Brazil & Mexico: AC Nielson; Chile: INE & internal projections; Japan: METI with adjustments; China & South Africa: Planet Retail; Canada: StatsCan & internal projections; UK: Kantar Retail.
Wal-Mart Stores, Inc. (NYSE: WMT) 17
$4.2 $4.5
$5.2 $5.6
$6.0
$6.8
$2
$4
$6
$8
$10
$12
08 09 10 11 12 13 Future
Net sales Operating income
International sales, operating income growing
(In B, USD)
$135
$126
$109
$97 $96 $88
Total sales Op. Inc.
FY
$160
$0
$120
$80
$40
FY08 - FY13 CAGR Sales 8.9%
Operating Income 10.3%
International
Note: Figures based on reported results.
Wal-Mart Stores, Inc. (NYSE: WMT) 18
1. Grow the business
o Organic growth • Stores • eCommerce • Leverage
o Acquisitions
2. Dividends
3. Share repurchases
Cash from
operations
AA-rated Balance Sheet
Capital Allocation
Disciplined capital allocation drives efficiency
Wal-Mart Stores, Inc. (NYSE: WMT) 19
Sources and uses of cash in FY13 Capital Allocation
Sources of cash Uses of cash
FCF
$12.7B Cash flow from Ops
$25.6B
CapEx $12.9B
Dividends $5.4B
Share repurchase
$7.6B
Acquisitions
$0.3B
Debt
$0.6B
$26.2B $26.2B
Wal-Mart Stores, Inc. (NYSE: WMT) 20
Capital Allocation Consistent capital efficiency
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
FY07 FY08 FY09 FY10 FY11 FY12 FY13
Share Repurchase
Dividends
Acquisitions
CapEx
Wal-Mart Stores, Inc. (NYSE: WMT) 21
$10.5 $9.8
$5.2 $6.3 $6.9
FY07 FY08 FY11 FY12 FY13
Delivering greater total company capital efficiency Capital Allocation
$ (
Bill
ion
s) s
pe
nt
on
Ne
w s
q f
t
Wal-Mart Stores, Inc. (NYSE: WMT) 22
On track to deliver FY17 leverage goal
Note: FY17 not drawn to scale; Source: Company financials
FY 10 FY 11 FY 12 FY 13 FY 17E
~50 bps > 100 bps
SG&A % of sales
19.1% 19.2% 19.3%
19.7%
14 bps
Optimizes performance and
efficiency
Accelerates the productivity
loop across the company
Drives greater P&L
performance
Leverage
Wal-Mart Stores, Inc. (NYSE: WMT) 23
Investing in Global eCommerce for future Global eCommerce
FY14 priorities:
Penetrate key markets
Develop global technology
platform
Develop next generation fulfillment network
Wal-Mart Stores, Inc. (NYSE: WMT) 24
Strengthening our compliance organization Compliance
• Made significant improvements to global compliance organization in FY13
• Re-aligned corporate structure to have global compliance,
ethics, investigations, and legal functions under the Corporate Secretary
• Increased associate training • Implementing market specific procedures
Wal-Mart Stores, Inc. (NYSE: WMT) 25
Strong underlying operations
Investments to drive growth through stores and E-commerce
AA-rated balance sheet
Strong free cash flow
Consistent returns to shareholders
Walmart – always a strong investment
Wal-Mart Stores, Inc. (NYSE: WMT) 26
Questions