Marisa Lojas S.A. Corporate Presentation

Marisa Lojas S.A.
Corporate Presentation
Adalberto Pereira dos Santos: CFO and IRO
Francisco S. Bianchi: Financial and IR Manager
IR Team:
+55 (11) 2109-3121/6191
[email protected]
1
This
presentation
may
include
forward-looking
statements
about
future
events or results in accordance with Brazilian and international regulations
governing stock markets. Such statements are based on assumptions and
analyses made by the Company based on its experience and the economic
climate and on market conditions and expected future events, many of
which are beyond the Company’s control. Important factors which can lead
to significant differences between real results and these forward-looking
statements
include
the
Company's
business
strategy,
national
and
international
economic
conditions,
technology,
financial
strategies,
developments
in
the
credit
and
debit
card
industry,
financial
market
conditions,
uncertainty
regarding
the
results
of
the
Company’s
future
operations, plans, objectives, expectations, intentions, and other factors
described in "Risk Factors" in the Offering Memorandum filed with the
Brazilian Securities Commission. Because of these factors, the real results of
the Company may differ substantially from those expressed or implied in
forward-looking statements.
This presentation does not constitute an offer, or invitation, or solicitation
of
an
offer,
to
subscribe
for
or
purchase
any
securities.
Neither
this
presentation nor anything contained herein shall form the basis of any
contract or commitment.
Focus in Middle
Class
National Footprint
65 years of track
record
Multichannel
Market Share to
Efficiency Focus*
Street and Malls
Stores
 Few year later, the Company adopted the
name of Marisa, only, it had a gradual growth
and acquire fame as the Store of woman's
fashion and lingerie.
 1952 – Marisa opens stores in Brazilian major
cities.
 1982 – Present in all regions.
 2006 – Marisa start offering personal loans to
Marisa Card customers.
 1990 – Open it first store in Shopping Mall, in
São Paulo
 2007 – Marisa
BM&FBovespa.
at
 1999 – To better serve Brazilian woman, was
created Marisa Card.
 2008 – Partnership with Itaú to create Marisa
Co-branded card.
 Still in 1999 was created Marisa Virtual, a
pioneer in Internet sales.
opens
it
capital
 2012 – Creation of Marisa Direct Sales channel.
 2014 – Acquisition of 20% of Netpoints stake.
 2015 – Organizational restructuration.
2015
Since IPO (2007), a Marisa more than double its sales area.
107
152
Sales Area
(‘000 m2)
149
166
207
201
236
217
250
227
295
277
346
336
379
368
412
407
424
416
Number os
Stores
1948
...
2005
2006
2007
2008
2009
2010
2011
2012
2013
1999
Creation of Private label card
Creation of Marisa E-commerce
Co-Branded Card
Creation of Direct Sales Channel
Acquisition of 20% of Netpoints
2014

Largest woman
retail chain in Brazil

Sales Area (m²)
10 years CAGR 15%

Net Revenue
10 yrs CAGR 19,6%

Present in all States
– 179 Cities
New Committees
Board
 Audit
Marcio
Luiz
Goldfarb
CEO
 Strategy
Marketing
Internal audit
Projects &
Process
Legal &
Compliance
 Human
Resources
 Finance
Retail
Financial
Products &
Services
Procurement
and Logistics
CFO & IRO
Human
Resources
Expansion,
Engineering
& Quality
IT
Rene
Antonio
Silva
Adalberto
Pereira dos
Santos *
Janaina
Machado
da Silva
Adalberto
Pereira dos
Santos
Marília
Gonçalves
de Oliveira
Ricardo
José Ribeiro
dos Santos
Marcos
Guilherme
Caldas
*Interim
4,4% 4,3%
4,1%
2,9%
2,7%
 Unconsolidated apparel retail Market in Brazil
 Underpenetrated
income increases
and
growing
market
as
81,6%
 Addressable Market of 800 stores in Brazil
C&A
Marisa
 Brazilian consumers buy less clothes then
shoppers in countries with similar GDP per
capita.
 Consumer spending on apparel has room to
grow as the economy expands
Renner
Hering
Riachuelo
Outros
Apparel consumption per capita (usd | 000,s) vs GDP per
capita (usd)
1,6
UK
USA
1,2
0,8
Chile
0,4
Brazil
Source: Morgan Stanley and Companies Results
S.Africa
0,0
0
10
20
30
40
50
60
2011
2012
2013
2014
Habitation
Food at Home
Habitation
Food at home
Transportation
Transportation
Food at Home
Transportation
Food at Home
Apparel
Apparel
Apparel
Leisure
Education
Food away from
Home
Health
Apparel
Financial Services
Personal Hygiene
Habitation
Top 5 spending growth
Communications
+26,1%
(% growth 2013 vs 2014)
Personal
Services
Cerimonial
Parties
+23,8%
+16,5%
Source: Holistic View 2015 – Kantar Worldpanel.
Health
Apparel
+16,3%
+13,2%
Apparel Market by category
(R$ billion)
Changing in Brazilian Apparel
Consumption (R$ billion)
160
Average Spending
Per capita
Total Estimated
786
810
+50%
800
140
670
120
128
900
6
12
700
583
85
600
100
500
80
60
40
109
129
138
15
Accessories
Kids wear
3
12
Men wear
19
200
20
100
0
4
7
400 Woman Shoes
300
76
Kids Shoes
Men Shoes
23
5
+73%
27
+39%
30
0
2011
2012
2013
2014
Source: Euromonitor; Pyxis Consumo 2014.
2009
+50%
+67%
20
44
Woman wear
+57%
2014
+46%

Brazilian Population per
Income Class
Income
Class 176 mm
201 mm
C
Average
monthly income
per capita
54%
+41
million
people
Apparel spending by Income
class (R$ billion)
216 mm
A /B
38%

A
15
B
55
C
56
D/E
12
58%
+16
million
people
R$ 320-1.120
D
E
2003
2013
2023
Source: Data Popular Jan/2014; Pyxis Consumo.
In the next 10 years, 16+ million people will climb to C Class, ~Chilean current
population.
Brazilian Middle Class
Population Equals to:
1/3x
USA
1x
Mexico
Brazilian C Class Consumption vs
others countries (USD Billion)
Germany
1.924
UK
1.683
France
1.454
Brazil
1.291
Italy
1.093
Australia
2x
South Africa
3x
Canada
It would be the 12th country in the world
by population
771
Russia
India
715
595
South Africa
501
Brazilian "C Class"
500
Switzerland
294
Singapore
92
It would be close to South Africa’s total
consumer spending
Source: Data Popular Jan/2014, ONU and IBGE
Marisa ‘Top 2’ in women apparel
Marisa brand positioning
5,9%
Feminine and
Sensual
5,8%
2,4%
2,3%
Renner
Riachuelo
C&A
Young and
Trendy
4,5%
Mature and
Sophisticated
4,7%
1,7%
1,7%
1,7%
Traditional
1,0%
Source: Euromonitor; Pyxis Consumo 2014.
Source: Officina Sophia. Conducted with women of the B and C income
classes between 18 and 55 years old in different regions in Brazil
Profile of our 413 stores portfolio as of June 2015.
Expanded
Feminine
1
Format
289
102
Lingerie
Shopping Malls
Venue
2
22
7
12
6
Street
224
2
2
Region
227
69
NE
6
1
CW
12
4
10
11
N
61 29 27
3
17
3
S
5
4
189
SE
12
5
29
8
148
42
20
14
27
Distribution center
Number of Marisa Stores
2014
3%
 424,7 thousand m² of total sales area as of June
2015.
2013
8%
2012
8%
 31% of sales area is up to 4 year old.
 Large portion of the sales area still under
maturation
Prior to
2009
55%
2011
12%
2010
11%
2009
4%
Expanded
1,000m² to 3,000m²
400m² to 1,000m²
Lingerie
100m² to 400m²
Feminine
Stores
E-commerce
Direct Sales...
Main differences between players
Expansion of
product mix
Parity with
competitors
and Differential
Consolidation
Expressive
Media
investments
Sales
Partnership
Construction
3 days
Minimum Delivery
Time
(São Paulo DC)
2 days
12 Hours
5 days*
12 Hours
3 days
Free Freight
Ticket over
R$99,90
Ticket over
R$99,00
Ticket over
R$159,00
Ticket over
R$49,00
Ticket over
R$199,00
Ticket over
R$99,00
# of Installments
(Credit Card)
Up to 12x
Up to 12x
Up to 12x
Up to 12x
Up to 5x
Up to 12x
*Renner don’t disclose delivery time.
Source: OThink, 2013
(Delivery to
South
Region: 2
days)
Expansion of
product mix
Parity with
competitors
and Differential
Consolidation
Expressive
Media
investments
Sales
Partnership
Construction
Visit Flow
9.154.345
8.748.049
7.059.484
6.019.934
5.139.000
3.860.922
2.351.144
1.673.273
3.533.988
5.689.739
Revenue
FPS
Revenue
Receita
PSF
1.755.744
1.434.560
2.075.682
1.702.762
2.450.315
1.990.263
OpEx
Retail
Revenue
Receita
Varejo
2.877.388
3.092.010
2.398.936
2.515.009
1.241.435
3.336.596
1.054.239
917.202
2.602.866
321.184
372.920
460.052
478.452
577.001
733.730
2009
2010
2011
2012
2013
2014
620.450
2009
750.238
2010
EBITDA
EBITDA
PSF
FPS
EBITDA
281.588
403.329
262.166
271.510
EBITDAEBITDA
Varejo
Retail
2009
2013
2014
177.493
160.344
387.237
100.050
141.251
85.498
51.082
213.790
67.798
2012
229.914
208.675
370.821
320.146
2011
Net Profit
498.841
383.500
1.365.823
121.334
131.819
178.695
210.477
2010
2011
2012
2013
287.187
2014
2009
2010
2011
2012
2013
2014
13,2%
SSS
0,2%
2010 2011 2012 2013 2014
Cons.
EBITDA &
Margin
384
403
499
22,5% 20,3% 20,8%
371
387
14,7% 14,9%
2010 2011 2012 2013 2014
Net
Profit
208
51
2010 2011 2012 2013 2014
33,42
24,00
Stock
Martes
8,95
2010
2011
2012
IBOV
2013
2014
AMAR3
• New store ramp up curve – 188 new stores in 5yrs
• Exploring new markets – 67 new cities in 5 yrs
• New Categories support +28.8% Average Price
• Increased Opex
• Chiefly driven by outpaced Personnel Expenses
• Risen Occupation Costs from recent momentum
• Bold Investments
• Higher Leverage & cost of capital for Brazilian Cos.
• Leading to diminishing profitability
• Losing edge…
• Consequently, Lagging market indexes
• And Underperforming peers
Board of
Directors
•
•
•
•
Independent Chairman Appointment – Apr’14
Extensive seasoned Directors
Comprehensive Role of Committees
New Officers’ Nomination – up from Nov’14
Officers
•
•
•
•
Definition of Straight-forward Officers Mandates
Corporate Cultural Mindset Change
Zero and Matrix Budgeting System
Cost Control Measures and FUPs
New CFO’s
Mandate
• Focus on P&L Efficiency
• Focus on B&S Efficiency
• Redesign of Growth Strategy
Measures
Introduced
• Cash Flow Generation Oriented
• ROIC introduced
• Deleveraging Process
30
Potential
Market
Unfolding of
new
Measures
Deeper Understanding of Addressable Market
• Timid Growth in 2016
• Store Revamp Plan for long-run Strategy
• Resumption of New Store Growth Pace after 2017
•
•
•
•
Broadening extension of Efficiency Measures
Discontinuing Inefficient Operations
Aligning C-Level Compensation
Massive use of Retail Analytics
31
Independent Chairman Appointment – Apr’14
Extensive seasoned Directors
Comprehensive Role of Committees
New Officers’ Nomination – up from Nov’14
Board of
Directors
•
•
•
•
Israel
Vainboim
• Nominated Chairman in April ‘14
• Chairman & Decisive Role at Itaú Unibanco Deal
• Director for decades at Embraer, Usiminas, Iochpe
Cassio
Casseb
• Designated Director in April ‘14
• Former CEO at CBD, BB & Credicard
• Advisor for Morgan Stanley and Principal F. Group
Founding
Holders
• Marcio G., CEO, has been at Marisa since ‘67
• Decio G. started in ’74. He served as VP ‘92-’07
• Denise G. initiated in ‘68. Purchase Chief ’90-’07
32
Officers
•
•
•
•
Definition of Straight-forward Officers Mandates
Corporate Cultural Mindset Change
Zero and Matrix Budgeting System
Cost Control Measures and FUPs
Rene
Silva
•
•
•
•
Sales & Logistics Officer
Worked at Marisa ’01-’09, returning in mar’14
Leading Position at Leroy Merlin Brazilian subsidiary
BA in Business at PUC-Campinas
Janaina
Machado
•
•
•
•
Purchase Officer
Joined Marisa in ago’15
20+ yrs experience at PCAR, Wal-Mart, Lasa &C&A
BA in Journalism and MBA from UFRJ
Adalberto
Santos
•
•
•
•
CFO & IRO. Came in to Marisa in nov’14
Institutional Investor – Triplet Best CFO (’11-’13)
Relevant Role at Lojas Renner and at Brasal
BA in Economics at PUC-GO, eMBA from IBMEC
33
P&L
Efficiency
Measures
• Outside Firms set Internal & External Benchmarks
• Stricter Control with simplified Compasses
• Prompt P&L monthly Closing
B&S
Efficiency
Measures
• > Tenor with int’l suppliers, still lower than market
• Disciplined & Recurring control on Inventory
• Compatible Capex with current momentum
Redesign
of Growth
Strategy
• High Sigma among stores (in sqm term)
• Evaluation on Stores Venues adherence
• Opened & Reassessed New Channels rationale
Results
Obtained
• Cash Flow Generation Oriented
• ROIC introduced
• Deleveraging Process
34
 Retail Net Revenues with variation of -2.6%. and -4.2% in same
store sales.
 Retail Gross Margin reached 49.0% increase of 30 bps over 2Q14.
repeating the evolution of previous quarters.
 Retail SG&A grew 8.2% in total and 3.9% in recurring basis for
Brick and Mortar stores.
 FPS EBITDA reached R$ 16.4 million with it portfolio quality level
similar to 2Q14.
 Cash from Operations reached R$ 104.1 million over R$ 0.7 million
2Q14.
 Maintaining the focus on measures to Gain Operational
Efficiency and Reduce Variability of Results.
CASH FLOW (R$ million)
2Q14
EBITDA
- Income Tax
100.606
56.937
-43,4%
1.451
13.158
806,8%
(640)
23.857
-3827,7%
1.664
10.516
532,0%
2.395
22.680
847,0%
GROSS CASH FLOW
103.721
80.611
-22,3%
205.347
168.445
-18,0%
Working Capital
(34.357)
54.860
-259,7%
(300.554)
(130.209)
-56,7%
Investments
(68.635)
(31.325)
-54,4%
(118.532)
(64.162)
-45,9%
14186,1%
(213.739)
(25.926)
-87,9%
- Financial Expenses, net (excluding debts)
CASH FROM OPERATIONS
729
2Q15
104.146
Chg. (%)
1HQ14
1H15
203.592
121.908
Chg. (%)
-40,1%
Equity
(19.940)
(12.008)
-39,8%
(19.296)
(11.520)
-40,3%
Debt
141.834
29.162
-79,4%
253.998
22.717
-91,1%
Increase (decrease) in Cash and Cash Equivalents 122.623
121.300
-1,1%
20.963
(14.729)
-170,3%
374.652
495.952
139,8%
At the Beginning of the Period
At the End of the Period
156.223
278.846
77,9%
 Strong Operating Cash Generation
257.883
278.846
510.680
495.951
98,0%
77,9%