Ripley Corp - Ripley Inversiones

Ripley Corp
Presentation
July 2009
Ripley Corp
One of the biggest holdings of
the department store business
in Chile and Peru
RIPLEY CORP
Revenues for almost MUS$2,000
EBITDA 2008: MUS$ 180
Market Cap: MUS$ 1,500
CHILE
38 Stores - Selling space 232,820 sqm
Revenues LTM: US$1,331 million
Loan Portfolio: Over MUS$ 900
PERU
11 Stores – Selling space 102,110 sqm
Revenues LTM: Over US$ 450 million
Loan Portfolio: Over MUS$ 350
2
Figures in US$ as of Jun-09 (FX: $531.76/US$)
Contents
• Ripley - 53 years of history
• Recent Developments
• Ripley Chile
• Ripley Peru
• Conclusion
3
More than 50 years in the retail industry
1956
First store in Santiago
1976
Credit business beginning
1985
First department store
1986
First store outside Santiago
1993
Ripley Parque Arauco Æ biggest store in South America / New image positioning
1997
First store in Peru
2000
Insurance brokerage and e-commerce
2003
Opening of Hong Kong office / local bond of UF 6,500,000 (MUS$257)
2005
IPO of Ripley Corp.
2007
First store outside Lima (Trujillo). First shopping mall of Aventura Plaza S.A. JV in Peru
2009
Acquisition of 22.5% of Nuevos Desarrollos S.A.(Plaza Alameda, Plaza Sur and future developments)
Sale of the participation in Mall Calama, Mall del Centro, Mall del Centro Rancagua and Mall Panoramico.
4
One of the biggest holdings in the department store business
• Third player on department store business in Chile and second in Peru
• Sales of almost US$ 2 billion
• MUS$ 1,331 in Chile (LTM)
• MUS$ 538 in Peru (LTM)
• 38 Stores in Chile and 11 in Peru, with a total selling space of 334.930 sqm
Market Share in Chile
(Retail Sales 2008)
Paris
24.4%
Market Share in Peru
(Retail Sales 2008)
Ripley
22.6%
Falabella
54%
Falabella
40.1%
La Polar
12.9%
Source: Ripley and Companies Press Releases
Source: Ripley
5
Figures in US$ as of Jun-09 (FX: $531.76/US$)
Ripley
46%
An important player in consumer credit in both countries
• Sixth actor in consumer credits market in Chile with a loan portfolio of MUS$1,282 (Tarjeta Ripley + Banco Ripley) as
of Dec-08
• Loan Portfolio of Tarjeta Ripley: MUS$ 914
• Loan Portfolio of Banco Ripley: MUS$ 368
• Fifth actor in consumer credits market in Peru with a loan portfolio of more than MUS$350.
Market share in Chile
(consumer credits 2008)
Market share in Peru
(consumer credits 2008)
Other Small
Retailers
6.7%
Other Banks
6.8%
Scotiabank
12.5%
Santander
21.1%
Interbank
17.0%
Corpbanca
4.6%
Falabella
11.9%
Ripley
8.3%
BBVA
4.7%
La Polar
4.9%
Banco De Chile
17.7%
Banco Ripley +
Tarjeta Ripley
6.4%
Banco Paris +
Tarjeta Mas
6.9% BCI
Others del Trabajo
1.2%
4.3%
Falabella + CMR
10.8%
9.4%
Source: SBIF (w/o considering BancoEstado)
Continental
7.7%
BCP
31.0%
6
Source: SBS Peru
Figures in US$ as of Jun-09 (FX: $531.76/US$)
Citibank
6.0%
Successful business model
• Integration of synergic businesses gives a complete knowledge of client needs
• Focus on its target market with a clear value proposal and focused marketing efforts:
Value Proposal
Brands and Fashion
Convenience and Financing
Purchase experience
Measures
Result
•
Strengthening own brands
•
Wide variety of fashion
products
•
Permanent innovation
•
Benefits / Discounts
•
More than 8,000 associated
stores
•
Quality product
•
Convenient financing
•
Integral service
• Positive results of TOM
• Second place in TOM of Department stores and Credit cards
7
Leadership in target segment
Transactional card and client
fidelity
Purchase repetition
Strong corporate image
• Important characters helped us to build a very strong corporate image and brand
• Cindy Crawford: IPO of Ripley Corp
• Penelope Cruz: Face of the company
8
Permanent growth in Chile
• Attractive growth in sales, selling space and loan portfolio confirms successful positioning
Evolution of consolidated revenues
( MUS$)
Evolution of financial revenues and loan portfolio
(MUS$)
CAGR*: 13.9%
CAGR*: 5.5%
1,043
2003
1,153
1,268
1,323
1,412
1,331
658
503
2004
2005
2006
2007
2008
316
289
Mar08
Mar09
931
Financial
917
670
522
423
214
231
269
2003
2004
2005
314
2006
426
350
2007
Gross Loan Portfolio
Retail
967
2008
.
Mar-09
Financial revenues
Shopping Malls
Source: SBIF
* CAGR: Compounded average growth rate
Source: Ripley
9
Figures in US$ as of Jun-09 (FX: $531.76/US$)
Permanent growth in Peru
• Strong increase on sales, financial revenues and loan portfolio confirm important growth in Peru
Evolution of consolidated revenues
( MUS$)
Evolution of financial revenues and loan portfolio
Banco Ripley Peru (MUS$)
CAGR*: 35.7%
CAGR*: 19.7%
191
158
142
104
538
368
2006
49
374
2007
2008
82
92
Mar-08
Mar-09
2006
103
102
60
2007
Loan Portfolio
2008
Financial revenues
* CAGR: Compounded average growth rate
Source: Ripley
10
.
Figures in US$ as of Jun-09 (FX: $531.76/US$)
Mar-09
Wide client base and efficient administration of strategic
information
• More than 5.4 million issued cards in Chile and 2.1 million in Peru
• More than 3.0 million of active cards in Chile and 1.3 million in Peru
• Optimization of efforts in marketing, merchandising and promotional activities
Issued Cards in Peru
Issued cards in Chile
2.1
5.1
1.9
5.4
1.6
1.6
2005
2006
4.3
3.7
2005
2006
2007
2008
11
2007
2008
Strong financial structure
• Conservative Financial strategy let the company to have a solid financial position, even in the low
cycles of the economy.
• Additionally, the debt profile of the company is well balanced, with maturities of 2009 and 2010 “prefinanced” with current cash position
Maturity profile of current financial debt
(MUS$)
Cash position*
(MUS$)
350
202
300
Financial debt of MUS$ 670
-53
250
150
200
136
150
2013
2015
1
2017
3
2019
5
5
15
2021
24 23 23
2023
13
2025
4
2027
4
4
2
2029
50
0
122
* pro forma jun-09 with malls sale and bonds issue
Source: Ripley
12
Figures in US$ as of Jun-09 (FX: $531.76/US$)
Total
2011
11
Bonds issue
and
prepayment
2009
22
245
100
Shopping
Malls sale
22
3
40
Apr-May 09
41
40
Cash Mar-09
53
Strong financial structure (Cont…)
• Good debt ratios Æ financial flexibility
Consolidated liabilities/ Equity*
0.87x
0.89x
Net financial debt/ Equity**
0.90x
0.49x
0.69x
0.47x
0.55x
0.39x
0.44x ***
2006
2007
2008
Mar-09
2006
2007
* Consolidated liabilities/Equity : Total Liabilities/ (Equity + Minority Interest)
** Net Financial Debt/ Equity : Net financial liabilities / (Equity + Minority Interest)
*** pro forma after shopping malls sale
13
Source: Ripley
2008
Mar-09
Financial background
EBITDA
(MUS$)
Revenues
(MUS$)
1,684
1,786
1,890
187
1,873
180
153
143
11.1%
9.5%
8.6%
2006
2007
2008
.
Mar 09
LTM
2006
2007
EBITDA
7.7%
2008
EBITDA Margin
Source: Ripley
14
Figures in US$ as of Jun-09 (FX: $531.76/US$)
Mar 09 LTM
Ripley Corp – 1Q 2009 Results (MUS$)
20
15
ƒ Revenues decreasing due to the
10
international crisis (especially on
durable goods)
5
0
ƒ Costs of sales rose due to
13.1
provisions of the credit business
-16.9
-5
associated to a higher risk (+91% in
provision charges)
-10
-15
ƒ Loan portfolio reduction explained
-13.2
10.2
-20
-6.0
-10.4
-25.7
risk controlled
15
Net Income 1Q
2009
Others No
Operational and
tax
ƒ Provision stock / Gross Loan
Mall Calama
Income
∆ SG&As w/o dep
∆ Costs of sales
∆ Revenues
Net Income 1Q
2008
Depreciation
-2.4
-25
-30
by credit restrictions in order to keep
Portfolio in Chile increased from
12.2% to 16.4% during 1Q 2009.
ƒ Negative net income is mainly
explained by provision increase (not
cash flow)
Figures in US$ as of Jun-09 (FX: $531.76/US$)
Contents
• Ripley - 53 years of history
• Recent Developments
• Ripley Chile
• Ripley Peru
• Conclusion
16
Controller group has an important knowledge of the business
• Calderon family have been connected to retail business for over 50 years Æ excellent knowledge of the industry
• In May 2009, Inversiones Bujorico Ltda.(Calderon Kohon Family) subscribed with Inversiones Conca S.A. (related to
Chilean entrepreneur Alvaro Saieh) a promise of selling 20% of Ripley, transaction that should be made before
November 30th 2009.
• Alvaro Saieh has a successful experience on very complementary businesses to Ripley (food retail, banking and real
estate).
Major Shareholders
Free Float
Inversiones Bujorico
Ltda.**
20%
Retail
54.4%
Insurance
Companies
1.2%
Free Float
19%
Mutual Funds
7.3%
International
Investors
19.7%
Inversiones R S.A.*
61%
17
Pension Funds
16.0%
Partners of the leading group in the shopping malls business
• JV with Mall Plaza (main player of the real state business) in:
•
Peru: Aventura Plaza S.A. (40% of property)
•
Chile: Nuevos Desarrollos S.A. of Mall Plaza group in Chile
(22.5% of property)
• Divest in mature shopping malls
• Focus in our core business (department store and financial
business)
18
Selling process of non strategic and mature shopping malls
Sales in Chile
• Mar-09: Sale of participation in Mall Calama (25% of the ownership)
•
Selling price: MUS$ 19 approx.
• Apr-09: Sale of 100% of:
•
•
•
•
Mall del Centro de Santiago
Mall del Centro de Rancagua
Mall Panoramico
Selling price: MUS$ 117 approx.
• Income of these operations for over MUS$94
19
Strategy in real estate
B
E
F
O
R
E
Shopping Mall
Panoramico
Property Ripley
5,671
100%
Mall del Centro
18,917
100%
Mall del Centro de Rancagua
13,046
100%
Mall Calama
44,206
22.5%
Marina Arauco
57,968
33%
Mall del Centro de Curico
45,911
33%
Total Selling Space
81,860
Shopping Mall Chile
C
U
R
R
E
N
T
Selling space (m2)
Selling space (m2)
Property Ripley
Marina Arauco
57,968
33%
Mall del Centro de Curico
45,911
33%
Mall Plaza Sur
74,583
22.5%
Mall Plaza Alameda
57,355
22.5%
Total Selling Space Chile
63,966
Shopping Mall Peru
Selling space (m2)
Property Ripley
Trujillo
44,114
40%
Callao
76,460
40%
Total Selling Space Peru
Total Selling Space
48,230
112,196
20
Successful bond issue – Ripley Chile
On June 25th 2009, Ripley Chile made a successful issue of UF 3,000,000 (MUS$118 approx.)
• Series E:
• UF 1,000,000 (MUS$ 39)
• Duration: 11 years (21 year period)
• Rate: 5.04% (spread of 167 bps)
• Series F:
• UF 2,000,000 (MUS$ 79)
• Duration: 4.7 years (7 year period)
• Rate: 4.45% (spread of 170 bps)
On June 26th was informed an anticipated rescue of the previous bond series of Ripley Chile -series A UF 1.071.428
(MUS$ 42) and series B UF 3.390.625(MUS$ 134). This amount will be paid on July 27th 2009 with the funds from
the bond issue of the series E and F and current available cash.
Considering prepayment of series B:
Î Annual Savings of MUS$1 in financial expenses
Î Savings in Present Value: MUS$6.2
Î Average Duration increases from 6.1 to 6.8 years
21
Figures in US$ as of Jun-09 (FX: $531.76/US$)
Contents
• Ripley - 53 years of history
• Recent Developments
• Ripley Chile
• Ripley Peru
Brands & Fashion
(Variety and Design)
• Conclusion
Purchase
experience
Convenience and
easy Financing
22
Macroeconomic scenario in Chile
IPSA (Chilean stock market index)
1.3%
3,055
3,015
2,550
Jul-08
Ene-09
Jun-09
Currency Exchange Rate (CH$/US$)
636
536
526
Jul-08
Ene-09
Jun-09
23
New distribution center
• New Distribution center has the most advanced technology in
South America. It will:
• Improve customer service
• Make more efficient operations
• Increase inventory turnover
• On June 22nd was made an official inauguration with the
participation of Chilean president, Michelle Bachelet
24
Focus on efficiency
Continuous improvement: SG&A/m2
2,015
1,932
1,862
1,749
1,687
Dec-07
Mar-08
Jun-08
Sep-08
Cost efficiency program:
• Synergies between retail and credit divisions
• New organizational structure
• New distribution center
Dec-08
Profitability of the operation
Source: SBIF
25
Figures in US$ as of Jun-09 (FX: $531.76/US$)
Contents
• Ripley - 53 years of history
• Recent Developments
• Ripley Chile
• Ripley Peru
• Conclusion
26
Ripley Peru – Department stores
• 11 stores with a selling space of 102,110 square meters
• One new opening in 2009 (Chiclayo)
• Important revenues growth in the last years
112.110
94.978
87.653
79.033
538
387
316
336
2005
2006
2007
Revenues (MUS$)
2008
M2
27
Figures in US$ as of Jun-09 (FX: $531.76/US$)
Ripley Peru – Retail revenues growth vs. GDP
15.3%
12.6%
8.9%
9.4%
7.6%
6.1%
2006
2007
% Var. GDP
Source: Ripley, SBS Peru
2008
% Var. Revenues
28
Banco Ripley Peru – Loan portfolio evolution
36.8%
33.2%
34.6%
27.9%
26.2%
18.7%
359
267
195
2006
2007
% Var. Ripley
2008
% Var. Market
Dec-08
Mar-09
ROA Banco Ripley
6.2%
5.1%
ROA Financial System
2.6%
2.5%
ROE Banco Ripley
37.3%
30.0%
ROE Financial System
31.0%
30.5%
29
Figures in US$ as of Jun-09 (FX: $531.76/US$)
Contents
• Ripley - 53 years of history
• Recent Developments
• Ripley Chile
• Ripley Peru
• Conclusion
30
Why Invest in Ripley?
• Important player in the department store business in Chile and Peru:
• Revenues of almost US$2 billion
• 49 stores with over 330,000 sqm
• Wide client base:
• Over 4 million active customers of Tarjeta Ripley in Chile and Peru
• Strong financial position
• Conservative financial strategy
• “Pre-financed” two years debt
• Good debt profile
• Stock price at attractive levels, reflecting the low period of the economic cycle
• P/BV 1.2x
Source: Ripley, SBS Peru.
Considers consumer loan portfolio of banks and credit cards + Financiera CMR and Cordillera
31
Contact Information
• Speakers
• Lazaro Calderon – CEO Ripley Corp
• Juan Diuana – CFO Ripley Chile
• Andres Oksenberg – Investor Relations
• Contact:
Phone: (+56-2) 694 1042
E-Mail: [email protected]
32
Ripley Corp
Presentation
July 2009