ripley · ripley punta arenas ‐opening april 2008 – selling space 7,297 sqm ripley alameda...

RIPLEY CORP

September 2008

Ripley Corp

1.

Ripley Today

2.

Chile: increasing profitability

3.

Peru: leadership on a high growth market

4.

Mexico: the implementation

5.

Conclusion

Department stores50 stores in Chile and Peruselling space: 323,064 sqm

Financial RetailChilean credit card loans: US$ 929 mBanco Ripley Peru loans: US$ 310 mBanco Ripley Chile loans: US$ 461 m

Real Estateownership in 7 malls weighted average leasing space: 101,211 sqmowned stores: 20

Ripley Today

–

current operations

Figures as of June 2008

Ripley Today

‐

52 years of history

First Store opened in

Chile

1956

Credit business starts

San Diego

First Department

Store in Santiago

1976

1985

Barros Arana

First Department

Store outside Santiago

1986

Parque

Arauco

Ripley Chile

begins its new positioning

1993

Ripley Jockey Plaza

First Department Store

in Peru

1997

Alto Las Condes

Insurance brokerage business

starts

2000

Banco Ripley Chile

2002

Ripley Chile Bond issuance

2003

Ripley Corp: IPO

2005

2007

Ripley Punta ArenasRipley AlamedaBanco Ripley PeruRipley Corp Bond issuance in Peru

2008

Mexico:

JV with Palacio de HierroPeru: JV with Mall PlazaRipley Trujillo: first store outside LimaChile: Lease contract with Plaza S.A.Ripley Corp: Capital increase

Corporate Bond

Ripley Today

–

shareholders structure

Calderon Group81.0%

Free Float 19.0%

Source: Ripley.

Figures as of September 1st 2008

Mutual Funds3.9%

Insurance Co3.6%

Pension Funds19.8%

InternationalInvestors

19.0%Others53.7%

Ripley Today

–

department stores

Source: Ripley

LTM Revenues and market share as of June 2008

Selling space as of August 2008.

CHILE40 stores Revenues LTM: US$ 988 mMarket share: 24,1%Selling space: 228,086 sqm

PERU10 storesRevenues LTM: US$ 399 mMarket share: 47%Selling space: 94,978 sqm

Ripley47.0% Falabella

53.0%

Falabella37.9%

Paris25.0%

Ripley24.1%

La Polar12.9%

Ripley Today

–

financial retail

Source: Ripley

Figures as of June 2008.

CHILETarjeta Ripley:Loans: US$ 929 mRevenues LTM Jun ‘08: US$ 382 mProvisions/loans: 9.9%

Banco Ripley ChileLoans: US$ 461 m48 branches

PERUBanco Ripley PeruLoans: US$ 310 mRevenues LTM Jun‐08: US$ 134 mProvisions/loans: 6.7%11 branches

Ripley Today

– real estate business

Source: Ripley

Ownership in 7 Shopping malls

101,211 sqm weighted average selling space

Fully owned malls revenues LTM Jun‐08: US$ 16 m

Chile:

Ripley has an option to buy 22.5% in 3 shopping malls of Mall Plaza.

Peru:

Joint venture with Mall Plaza (20%) and Falabella (40%), to build, operate and manage shopping malls

o

The first one opened in Trujillo on December 2007.

Ripley Today

–

revenues breakdown

Source: Ripley

LTM: Last

Twelve

Months

Ripley Corp revenuesUS$ 1,785 m(LTM as of June‐08)

Chile

78%

Peru

22%

6

Source: Ripley

BRP: Banco

Ripley Perú

Ripley Today

–

Recent developments

Deconsolidation of financial statements of Banco Ripley Peru and reclassification of charges for provisions and write‐offs

Ripley Corp

Consolidated Jun‐08(MU$ of

each

period) Before Proforma Before Proforma ProformaRevenues 1,563.7 1,484.5 1,788.7 1,689.8 865.4Costs

of

sales ‐887.5 ‐941.5 ‐1,006.7 ‐1,081.5 ‐538.4SGAs ‐523.0 ‐412.2 ‐642.4 ‐500.2 ‐264.3Operating

Result 153.1 130.8 139.6 108.0 62.7Result

on

investment

in related

companies 11.1 27.0 5.5 25.6 16.3Net Income 109.8 109.8 28.7 28.7 40.0

EBITDA 187.4 176.9 176.4 150.2 86.6EBITDA Margin 12.0% 11.9% 9.9% 8.9% 10.0%

Ripley Corp

Consolidated Jun‐08(MU$ of

each

period) Before Proforma Before Proforma ProformaLoan Stock 846.6 656.8 1.089.0 830.6 850.0Investment

in relatedcompanies 76.5 116.3 80.5 131.8 159.1

Debt 547.8 397.7 851.6 633.3 649.6Equity 938.4 938.4 1,090.1 1,090.1 1,199.3

Dec‐06 Dec‐07

Dec‐06 Dec‐07

8

Ripley Corp first bond issuance in Peru: August 7th S./ 110.000.000 (US$39 MM) ‐ 9 years bullet ‐ 8.56%Rated AAA by Equilibrium (local Credit Risk Agency)The lowest spread of last comparable issuances: 0.81% over Peruvian Government Bond

US$125 million in 3 new medium term bank loans (2 years bullet)

Chilean credit risk confirmation by Humphreys and Feller‐Rate for Ripley Corp (A+) and Ripley Chile (AA‐), stable outlook

Ripley Today

–

Recent developments

Ripley Corp

1.

Ripley Today

2.


3.

Peru: leadership on high a growth market

4.


5.

Conclusions

Ripley Chile: increasing profitability

Selective square meter increase to follow market growth

New management structure

New distribution center start up

Loans portfolio and controlled risk

Growth on real estate business through Mall Plaza

Ripley Chile results


Selective square meter growth to follow market growth

6 new stores between 2008 – 2009Ripley Punta Arenas ‐ opening April 2008 – selling space 7,297 sqmRipley Alameda ‐ opening April 2008 – selling space 8,262 sqmRipley Agustinas ‐ closing January 2008 – selling space 953 sqm

Ripley Pun

ta Arena

s Store

Ripley Alamed

a Store



Andrés RoccatagliataCEO

sFinancialProducts

Channelsand

Services

Marketing RiskOperations

& Technology

LogisticsCommercial

CEO

RetailDivision

Financial BusinessDivision

CorporateServices

Current

Before


Loans portfolio & Controlled risk

29.8%

20.6%

593770 929

7.6% 7.7%9.9%

Jun‐06 Jun‐07 Jun‐08

Loans (MU$ Jun‐08) Provisions/ Loans

Source: Ripley

Figures in nominal terms



December 2007

Figures as of December 2007

Source: Ripley based on SBIF data, Banks and more Department Stores are included

Santander20.6%

Chile+Citi16.8%

Falabella+CMR10.8%Estado

8.9%

BCI8.9%

BBVA4.3%

Itau

Chile2.8%

Corpbanca5.1%

Others10.9%

Ripley +Banco Ripley Chile

6.1%

Cencosud4.9%

Sixth player in Chilean consumer loan financial market



COLLECTIONSSegmented, massive and with an appropriate technology

Step 1 Initial credit scoring

Step 2 First loans: Only for purchases in the store

Step 3 Behavior scoring: CRM/ risk/ profit

Step 4 Additional credit products (cash, term loans, associated commerce): Only to known costumer profiles

Risk model management



•

Long term lease contract with Mall Plaza Alameda S.A., Plaza Cordillera S.A. and

Plaza San Bernardo S.A.

•

Option to buy 22.5% of those companies. Due date 2010

•

Ripley

Corp

S.A

hired

Citibank

and

Banchile

to

start

a

selling

process

for

its

shopping malls business in Chile.

Shopping Mall Leasing Space % Ownership

RipleyPanoramico 5,671 100%Mall del Centro 18,917 100%Mall del Centro Rancagua 13,646 100%Calama 44,206 25%Marina Arauco 57,968 33%Mall del Centro Curico 45,911 33%

100%90,000Mall Concepcion(Under construction)


EBITDA, Operating margin & result

Source: Ripley

45.8 49.3

63.469.5

1S 2007 1S 2008

Operating Result EBITDA

7.5%

9.8%

Operating Margin

7.0%7.6%

MUS$

Ripley Corp

1.

Ripley Today

2.


3.

Peru: leadership on high growth market

4.


5.

Conclusions

Ripley Peru: leadership on high growth market

Macroeconomic environment

Excellent market positioning

Important store opening plan

Growth on loans portfolio with Banco Ripley Peru

Growth on real estate business with Aventura Plaza

‐0.3%

11.7%

5.5%

2.7%

1996‐1999 2000‐2002 2003‐2005 2006‐2008



Source: Banco Central del Peru

A growing market... Annual Private Consumption Growth



Source: Ripley, Banco Central del Peru, US Census

Figures as of dec‐2002

...There is a lack of department stores...

department sqm

/ 1000 inhabitants

6

49

322

Peru Chile USA

Annual department store sales per Capita (US$)



Figures as of April 2007

894

214

32

USAChilePeru



Source: Inmark

PeruMax: Ripley Store but focused in a lower level

Ripley Peru is number 1 on market share in Lima and number 2 in the country

Ripley has the best preference level among retailersJune‐07

Peru

Source: RipleyFigures as of June‐08

Ripley54%

Saga Falabella

46%Ripley47%Saga

Falabella53%

Lima

June‐08

Ripley43%

Max (Ripley)10%

Falabella32%

Others15%

Ripley48%

Max (Ripley)15%

Falabella33%

Others4%



6 new stores 2008 – 2009

Trujillo: first store outside Lima

Trujillo Store op

ening

3.8%

10.5%13.4%

18.7%

14.1%

8.3%

Mar‐07 Jun‐07 Sep‐07 Dec‐07 Mar‐08 Jun‐08



Source: Press Release 2Q‐08 of Ripley Corp

Same Store Sales increases (nominal variation in nuevos

soles)

186224

310

4.7% 5.6%6.7%

Jun‐06 Jun‐07 Jun‐08



Source: Ripley

20.4%

38.4%

Loans (MU$ Jun‐08) Provisions/ Loans

BCP 19.6%

Interbank 18.3%

Continental 15.5%Scotiabank Peru 15.4%

Falabella Peru 7%

Banco Ripley Peru 5.9%

Citibank 5.1%

Others 13.6%



Sixth player in Peruvian consumer loans marketJuly 2008



Association with Mall Plaza (20%) and Falabella (40%) for the construction and operation of shopping malls in Peru.

One shopping in TrujilloOne shopping under construction in CallaoThree other incoming projects: Santa Anita, Primavera and Arequipa.

Ope

ning of Trujillo Store

Aventura Plaza

Ripley40%

Falabella40%

Mall Plaza20%

Ripley Corp

1.

Ripley Today

2.


3.


4.


5.

Conclusion


Interesting opportunity in medium/low income segment

Grupo Bal: an excellent local partner

Advances in the business plan



RETAIL REVENUES

COMPOSITION (Billon US$)

Source: Planet Retail as of Dec 2006

22%

63%

78%

37%

Non Food Food

Formal retail Traditional

111,8

142,3



Mexican department stores*: revenues and EBITDA margin evolution (US$ m)

Source: Ripley

*Data based on Financial Statements of Coopel, Liverpool, Elektra, Famsa.

4,372 5,104 5,635 6,1207,304

8,472 9,34610,728 11,609

14.9%15.5% 15.0%14.6%14.7%15.6%

1999 2000 2001 2002 2003 2004 2005 2006 2007

Revenues EBITDA margin



Grupo Bal: an excellent local partner



Grupo

Bal: an excellent local partner

Grupo Bal is one of the most important business group of Mexicoo

It is Controlled by Baillères’s

Family

o

It has participation on the followings businesses: Mining Industry, Industrial

Activity, Financial Market, Agriculture Industry and Retail.

Leading Holding´s enterprise:o

Palacio de Hierro: Is the most exclusive and prestigious department store in

Mexico

o

Peñoles:

Is the world leading company in production of Silver. Its

Market Cap is estimated in about US$ 12,000 million

o

GNP:

Is the leading insurance company in Mexico with a market

share of 20%

o

Profuturo:

Pension Fund Company with more than 3,4 million affiliates

and number one in profits during the past 8 years

o

Valmex:

Brokerage and Rental Company

In addition, Grupo Bal funded and participate in the board of directors of InstitutoTecnologico Autonomo of Mexico (ITAM), one of leading universities in Mexico with more than 5,000 students.


Positive macroeconomic environment

Grupo Bal: a partner of excellence




Leaders of the JV are living in Mexico

Second line teams formation

Negotiations with diverse real estate developers

First stores openings: planned for 2009

Ripley Corp1.

Ripley Today

2.


3.


4.


5.

Conclusion

ConclusionsChile: increasing profitability

Peru: leadership on high growth market

Mexico: The implementation

First store openings: 2009









Strength our solid loans position


RIPLEY CORP

September 2008

ripley · ripley punta arenas ‐opening april 2008 – selling space 7,297 sqm ripley alameda...

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