Label`Vie Group - CFG conference

Label’Vie Group
October 16th, 2014
CFG Group Marrakech Investors Conference
Label’Vie as part of a diversified holding: Best Financière
Founded in 1985, Best Financière is a diversified investment company, operating in the
retail distribution sector, the commercial real estate industry, the medical equipment
distribution segment, and the fast food business.
Retail
Real Estate
Medical
equipment
Fast Food
(Catering)
Best Financière Organizational Chart
Best Financière
66%
51%
Retail Holding
52%
90%
50%
51%
100%
Label’Vie
Virgin N. A.
GFFS
Perfect Home
Modes & Nuances
66%
Petra
75%
Petra Management
100%
SPI HSC
100%
SCCM
100%
SCCS
100%
SCCD
100%
SCCRC
100%
SCCF
100%
FCE JAD
100%
FCE SAF
Best Health
100%
SCRIM
100%
SOMA
Overview of Label’Vie Group
Founded in 1985, Label’Vie is a diversified distribution retailer and the second market
player in Morocco with a market share of 30% (June. 2014).
Brands/Retail formats
Three distinct brands / formats / business models
 Supermarkets :44“Carrefour Market” stores
 Hypermarkets: 4 “Carrefour Hypermarché” stores
 Hyper Cash : 11 “ATACADAO” stores
Total retail space of 140,000m² (June-2014)
Strategic Partner
Carrefour Group (2009)
2012 Group Financials
Turnover: MAD 5.8bn
Net income group share : MAD 54.6m
Human Capital
3,658 collaborators (486 headquarter, 3,172 retail)
Costumer base
Over 25 million visits (bills) per annum
Major milestones achieved by the group
Building on a dynamic development strategy, the group has achieved major milestones,
thus continuously strengthening its market positioning, notoriety , and competitive
advantages.
2014
2012
2011
2010
Opening of the 4th Carrefour Hypermarket, 11th Atacadao, and 44nd Carrefour Market
Rebranding and transformation of the remaining 7 MCCM stores into ATACADAO
Launching the ATACADAO business model with a first pilot study on Ain Sebae
Rebranding of the "Label'Vie" supermarkets into "Carrefour Markets"
Launching operations at the 24,400 m² warehouse / procurement platform in Skhirat
Acquisition of the 8 Métro Cash and Carry stores and opening of 6 new supermarkets
Opening of the second Carrefour Hypermarket in Marrakech
Opening of the first Carrefour hypermarket in Salé/Rabat
2009
Sealing a strategic partnership with the Group Carrefour
Acquisition of the “Franprix” supermarkets chain in Casablanca
2008
Label’Vie goes public (IPO)
2003
Acquisition of the “Supersol” supermarkets network
2001
Rebranding of Hyper SA into Label’Vie
1986
Opening of the first “Hyper” supermarket in Rabat
1985
Founding of "Hyper SA"
Label’Vie Organizational structure
A diversified retailler operating 3 store formats with distinct business models
Label'Vie Group
Three specialized subsidiaries organized into separate business units
Label'Vie SA
(Mother Company)
HLV*
(95%)
MLV*
(95%)
VLV
(100%)
Operates the
supermarket stores
Operates the
hypermarket stores
Operates the
ATACADAO stores
Commercial real
estate investment
vehicle
Holds the real estate
of the Carrefour
hypermarket in Salé
and that of owned
supermarkets
(*) 5% owned by CPI
(*) 5% owned by CPI
Holds the real estate
of the 8 ATACADAO
stores and of new
openings (post 2012)
A strategic partnership with a prominent retailer Carrefour Group
Capital Partnership
Shareholder Agreement
Franchise Partnership
Franchisor
HLV
HLV
MLV
MLV
Signed on March 2010, for a period of
15 years renewable by tacit agreement
for a successive period of 10 years
Signed on March 2010, for a period of
15 years renewable by tacit agreement
for a successive period of 10 years
Franchisor
HLV
Franchisor
The partnership with Carrefour not only enabled the group to diversify its business by operating new
formats i.e. the hypermarket and the Atacadao stores, but also to capitalize on the know-how of one of
the world’s leaders on all mass market retailing segments in which Label’Vie operates
The partnership also enabled Label’Vie to access Carrefour procurement platforms internationally for
Carrefour private labels that are distributed in the group’s supermarkets “Carrefour Market” and its
Carrefour Hypermarkets.
The group benefited as well from the Carrefour brand strong notoriety and powerful brand image and
recognition in Morocco.
MLV
A dynamic development strategy and consistent growth pace
Acquisition of MCCM
Number of stores
IPO
CAGR 2004-2008: +22%
CAGR 2008-2013: +25%
18
8
11
11
13
2004
2005
2006
2007
2008
2009
9 450
13 250
13 250
2004
2005
2006
15 750
2007
22 050
2008
412
563
704
870
1 141
2004
2005
2006
2007
2008
Number of visitors (million)
CAGR 2004-2008: +22%
CAGR 2008-2013: +22%
2010
2011
101 280
50
59
2012
2013
106 380
113 380
139 680
36 850
2009
Sales (million MAD)
CAGR 2004-2008: +29%
CAGR 2008-2013: +38%
45
27
Retail Space
CAGR 2004-2008: +24%
CAGR 2008-2013: +42%
42
2010
2011
2012
2013
4 888
5 401
5 672
5 789
2010
2011
2012
2013
23
27
28
22
2010
2011
2012
2013
1 836
2009
17
7
8
10
11
5
2004
2005
2006
2007
2008
2009
Overview of the competitive landscape in Morocco
A sector at its early development stage with a relatively few number of players
(oligopoly)
Label’Vie Group market leader on the supermarket segment; and pioneer on the large hard
discount format with ATACADAO
 Marjane group pioneer in the hypermarket business in Morocco and market leader on this
segment
BIM aggressive development strategy, small proximity stores, introduced the hard discount
business model in morocco
Players
Marjane Group
Type of Stores
operated
Hypermarkets
Supermarkets
Supermarkets
Label Vie Group Hypermarkets
Hyper Cash
Number of stores
Surface area
(m²)
Market share
(expressed in m²)
Marjane
Acima
TOTAL
34
35
69
206 675
44 025
250 700
45%
10%
54%
Carrefour Market
Carrefour Hypermarché
ATACADAO
TOTAL
44
4
11
59
55 950
21 300
62 430
139 680
12%
5%
14%
30%
Network Brand
Aswak Assalam
Hypermarkets
Aswak Assalam
12
44 700
10%
BIM
Convinience stores
BIM
171
25 650
6%
TOTAL
311
460 730
Overview of modern distribution in Morocco
A sector endowed with strong growth opportunities and a significant development
potential thanks to a low penetration rate
Only 13% of households’ fresh produce
grocery shopping is capture by modern
distribution. Grocery shopping is still largely
conducted in traditional markets, mom and
pop stores and stand-alone specialty stores
 Per capita sale area in Morocco is low as
compared to international standards and
comparative benchmarks
Per 1,000 capita retail space (m²)
Morocco
Tunisia
Turkey
Spain
France
11
23
40
180
220
 While the sector embeds a strong
growth potential it is confronted with
several short comes which impede upon its
rapid development
 Lack of qualified work force
 Weak fresh produce supply chain
 Extensive informal sector
 Capital intensive business
 Scarcity and high cost of
commercial real estate
A strong coverage of the Moroccan territory
Tanger
Kénitra
Rabat Salé
11 Supermarkets
- Hassan
- Medina
- Riad
- Shem’s
- Zaers
- Sala Al Jadida
- Souissi
- Témara Massira
- Témara Wifaq
- Al manal
- SMS
1 Hypermarkets
- Carrefour Salé
1 Atacadao
- Salé
2 Supermarkets
- Kénitra I
- Kénitra II
Mohammedia
2 Supermarkets
- Mohammedia Alia
- Mohammedia Kasbah
1 Atacadao
-Oujda
1 Hypermarket
-Oujda
Sidi Kacem
El Jadida
1 Atacadao
--Sidi Kacem
1 Supermarket
- El Jadida
Casablanca
16 Supermarkets
-Vélodrome
- Anfa
- Anfa Place
- La Gironde
- Quartier des Hopitaux
- Lissasfa
- Maarif
- Taddart
- Romandie
- Oulfa
- Yacoub El Mansour
- Val Fleury
- Gautier
- La Résistance
- Ziraoui
- Sidi Othmane
2 Atacadao
- Bouskoura
- Ain Sebaa
Oujda
1 Atacadao
- Tanger
Settat
Fes
1 Supermarkets
- Settat
Safi
1 Supermarkets
- Safi
Marrakech
Agadir
2 Supermarkets
- Agadir I
- Agadir II
1 Atacadao
- Agadir
1 Supermarket
- Marrakech la Fontaine
1 Hypermarket
- Carrefour Al Mazhar
1 Atacadao
- Marrakech
Khenifra
1 Supermarché
--Khenifra
1 Supermarket
- Fes Immouzer
1 Atacadao
- Fes
1 Hypermarket
- Borj Fes
Meknes
2 Supermarkets
- Meknes I
- Meknes Plaisance
Khemissat
1 Supermarket
- Khemissat
Sidi Slimane
1 Supermarket
- Sidi Slimane
Benin Mellal
Fkih Bensaleh
1 Supermarché
--Beni Mellal
1 Atacadao
-- Fkih Bensaleh
Carrefour Market (Label’Vie SA)
Leader in the supermarket segment with a network of 44 stores spread throughout the
kingdom
 Large and rich product mix (10,000-15,000 references)
Sale surface area between 1,500-2,000m²on average
 Attractive store layout and image
 High level of in-store service
 Convenience stores located within the city inside neighborhood
 Tailored to the purchasing power and habits of the target population/neighborhood
Carrefour Hypermarché (HLV SA)
A Format at its early development phase within the group with strong rollout over the
upcoming years. One opening per annum for the upcoming 5 years
Large sale area between 5000 and 6000 m²
Rich product mix over 30,000 references
 Located in high end neighborhoods
 Sophisticated store layout
 Offering maximum in-store service
 Selling a comfortable shopping experience
ATACADAO (MLV SA)
A retailing business model tailored to the purchasing power of 85% of the Moroccan
population
 Initiated in Brazil, Morocco is the 3rd country after Argentina to launch this format
Lowest prices on the market over the 200 most consumed primary goods
Markets price rather than service
 Located on the outskirts of the cities where real estate is most affordable
Spot purchases, narrow product mix
 Less contractual procurement agreements with suppliers
 Rudimentary store layout and minimal store fitting investment
 Targeting 2 markets:
- B2C: Lower class households with low purchasing power (85% of the population) previously
disregarded/omitted by modern retail distributors
- C2C: Professionals: Restaurants, coffee shops, Hotels, Mom and Pop stores ect…
 Multiple pricing strategy, per unit price negatively correlated to volumes, offers a unit price per
unit, per box, per batch, and per container.
More than a change in brand name, Rather a change of concept
 Drop in the
number of SKUs
Liquidation of
non food stock in
2013
Number of
SKUs
Product mix
Pricing
policy
Target
costumers
6 000 SKUs
20 000 SKUs
Consumer staples, food
Varied covering food and
non food goods
1/ Lowest prices in the market
2/ Multi-pricing, price per box
and per unit
1/ Agressive pricing strategy
2/ Single price
1/ Professionals grocers and
other convenience stores
2/
Households
C&D
sociprofessional category
1/ Professionals
Coffe
shops, hotels, restaurants
 More
competitive prices
Positionning on a
new costumer base
Targeting C and D
socio-professional
category
Representing the vast
majority of the
population.
 Grocers and
convenience stores
customer base
~684,000 POS
2014 consolidated half year earnings
(in million MAD)
H1-2013
H1-2014
Growth y-o-y
Sale of goods
Sale of services
% of sales
Turnover
Cost of good sold
% of sales
Front margin
% of sales
Gross margin
% of sales
Operating costs
EBITDA
EBITDA margin
Dep. & amort.
2 549
272
10,7%
2 821
2 337
91,7%
212
8,3%
484
19,0%
329
154
6,0%
79
2 768
284
10,3%
3 052
2 532
91,5%
236
8,5%
520
18,8%
343
177
6,4%
88
Total costs
% of sales
408
16,0%
431
15,6%
+5,6%
-0,4 pts
76
3,0%
-42
0
33
11
23
0,9%
89
3,2%
-53
3
39
14
25
0,9%
+17.2%
+0,2 pts
EBIT
EBIT margin
Net interest
Non recurring income
IBT
Corporate taxes
Net income
Net margin
+8,6%
+8,2%
+0,2 pts
+7,4%
Sales leaped +8,6%, a growth
driven
mainly
by
the
contribution of the stores
opened in 2013.
The gross margin dropped
-0,2 pts due to the conversion
of the remaining Metro stores
into Atacadao which has a
lower back margin.
+14,8%
+0,4 pts
+10,2%
+0 pts
The front margin improved
+0,2 pts thanks to a higher
added value product mix
Operating costs dropped -0,4
pts thanks to the cost
streaming
program
implemented by the group.
Thus EBIT margin leaped +0,2
pts.
An ambitious development plan in line with the past opening pace
2014E
2015E
2016E
2017E
Openings
Network size
Total retail space (m²)
Capex (MADm)
4
46
59 000
200
6
52
65 000
202
9
61
74 000
293
9
73
86 000
385
Openings
Network size
Carrefour Hypermarket
Total retail space (m²)
Capex (MADm)
2
5
25 300
214
2
7
35 300
125
2
9
45 300
159
2
11
52 300
159
Atacadao
Openings
Network size
Total retail space (m²)
Capex (MADm)
1
11
62 400
65
11
61 600
0
3
14
74 600
191
3
17
87 600
191
Label'Vie Group
Openings
Network size
Total Retail space (m²)
Capex (MADm)
7
62
146 700
479
8
70
161 900
327
14
84
193 900
643
14
101
225 900
735
Carrefour Market
-
Thank you for your interest in Label’Vie
Vecteur LV