earnings presentation third...

Earnings Presentation

Third Quarter 2015

Financial Results

3

• Improving trajectory despite softening retail

environment.

• Enhanced commercial strategy delivers

improved gross margin.

• Results impacted by ~CLP34 trillion (USD49

MM) of one offs: severance and inventory

charges.

• Adjusting asset base to focus on core

operations.

Third Quarter | www.cencosud.com |

Third Quarter Highlights

4

Consolidated Revenue Evolution

• Modest revenue growth despite currency depreciation

in Brazil and Colombia.

• Positive SSS in local currencies in most businesses.

Consolidated Adjusted EBITDA Evolution

• Adjusted EBITDA performance impacted by severance costs

and inventory obsolesce provision.

• Excluding one-offs, Adj. EBITDA rose, boosted by Colombian,

Peruvian and Chilean operations.


1 All figures are in CLP million

2 For comparison purposes, 3Q14 figures exclude the Financial Retail operation in Chile

3 Adjusted EBITDA excluding one-offs

3Q142 3Q15

2.621.001 2.672.728

+2%

137.546

172.012

3Q153 3Q142 3Q15

+44%

119.192

+15%

5

Active Workings

to Improve Margins

• Commercial strategy drives 200+

bps expansion in gross margin.

- Negotiations with suppliers.

- Limited promotional activity.


• Continued progress in SG&A control

program.

• Non-performing store program

implemented.

- 120 stores under program.

- 95 have presented plan for

improved results.

- 1 store closed to date.

6

Adjusting asset base to

focus on core operations

• Possible IPO Shopping Centers:

Board of Directors approved

continuing the project & investment

banks were selected for the

structuring of the transaction.


• Sold non-core Colombian

pharmacy assets

• Gas Station sale in Colombia,

process in final stage

1 Fair Value of Derivatives was reclassified from “Other gains/losses” to “Net Financial Cost” and “Income/Loss from foreign exchange variations”. For further

information please refer to note 35 on Consolidated Financial Statements.

2 Leverage before and after the change in FV of derivatives, excluding one-off items.

7

Net debt

evolution

(US$ bn)

Net

leverage

(net debt /

EBITDA)

Breakdown by Rate

(After CCS) Breakdown by Currency

(After CCS)


Breakdown by

Type of Credit

3Q14 4Q14 1Q15 2Q15 3Q15

4.7 4.3 4.2

3.6 3.6

3Q14 4Q14 1Q15 2Q152 3Q152

3.8 4.0

3.5 3.7

3.6 3.8

3.0 3.2 3.3

33%

67% 82%

18%

31%

15%

51%

2% 1%

Before the change1

After the change

Financial Ratios

Fixed

8

Revenue Evolution Adjusted EBITDA Evolution

• Revenue decline reflects currency

depreciation in Brazil and Colombia.

• Best Colombian SSS since acquisition.

• Prezunic SSS positive for first time in

five quarters.

• Brazil continues positive trend on gross

margin gains

SSS evolution by country

(local currency)

Supermarkets

• Ex-one offs, growth driven by Colombia

and Peru.

• Successful managed commercial strategy

to improve gross margin.


Figures in CLP million


3Q14

2.027.814

3Q15

1.967.123

-3.0%

3Q14

96.558

-14%

3Q15 3Q151

83.233

106.927

+11%

4.4% 3.8%

16.5%

-0.7%

-7.7%

4.1%

-0.7%

0.8%

4.2%

Chile Argentin

a

Brazil Peru Colombia

27.3%

9 Third Quarter | www.cencosud.com |

Revenue Evolution

3Q14

212.795

3Q15

232.703

+9%

3Q14 3Q15

9.5%

3Q14

6.4%

-11.1%

-4.4%

Chile

Peru

3Q15

7.710

-2.481

Adjusted EBITDA Evolution

SSS evolution by country

(local currency) Figures are in CLP millions

Department Stores

• SSS growth above inflation

in Chile and Peru

• Launch of click & collect in

early September 2015

• Improved profitability in Chile

• Peru narrows its loss on increased

scale and synergies achieved with the

Chilean operation for private labels

10




• Shopping Center Adj. EBITDA grows 2.9% on

improved performance in Argentina and Peru.

• Chile profitability was curbed by higher land taxes

due to the Tax reform and one-off expenses.

Revenue Evolution

51.580 63.050

+22%

3Q14 3Q15

Adjusted EBITDA Evolution

37.667

3Q14 3Q151 3Q15

45.906 46.031

+22% +22%

98% 98%

28% 30%

Chile Argentina Peru Colombia

96% 97%

91% 89%

Occupancy Rates Evolution

• Top line growth as a

result of higher rents

across Argentina &

Chile with stable

occupancy.

3Q15

3Q14

Shopping Centers

11



• Resilient revenue growth in

Argentina

• Chilean operation facing

weather conditions


297.499

360.823

+21%

3Q14 3Q15

22.730

3Q14 3Q151 3Q15

22.443

30.883

-1% +36%


Home Improvement

• Affected by one-off charges

(CLP 8.4 bn)

• Ex one-offs: • Strong performance in

Argentina

• Narrowed loss in Colombia

12 Third Quarter | www.cencosud.com |

• Chile financial services reported figures explained by the deconsolidation

of its financial retail business following the JV with Scotiabank.

• Provision rate continues to show healthy trend.

• Portfolio continues to grow across the footprint.

• Cost of funding increases across the region.

81.041

45.640

-44%

+43%

3Q14 3Q15

31.699

3Q14 3Q151 3Q15

21.233 21.272

-33% -33%


1Adjusted EBITDA excluding one-offs


Financial Services

31.828

10.764

+99%

Variation in blue reflects business growth/decrease

excluding Chile in both period.

Variation in green reflects business growth/decrease

including Chile in 3Q14.

13

• Healthy operational results show retail

expertise.

• Stable cash generation base from

strong shopping center business.

• SG&A savings program to improve

results.

• Further room to expand gross margin.

• Target net debt/ EBITDA ratio of ~3.0x

by year end, excluding one-offs.


Closing Comments

Third Quarter | www.cencosud.com | 14

The information contained herein has been prepared by Cencosud S.A.

(“Cencosud”) solely for informational purposes and is not to be construed as a

solicitation or an offer to buy or sell any securities and should not be treated as

giving investment or other advice. No representation or warranty, either express or

implied, is provided in relation to the accuracy, completeness or reliability of the

information contained herein. Any opinions expressed in this presentation are

subject to change without notice and Cencosud is under no obligation to update or

keep current the information contained herein. The information contained herein

does not purport to be complete and is qualified in its entirety by reference to more

detailed information included in the preliminary offering memorandum. Cencosud

and its respective affiliates, agents, directors, partners and employees accept no

liability whatsoever for any loss or damage of any kind arising out of the use of all

or any part of this material.

This presentation may contain statements that are forward-looking subject to risks

and uncertainties and factors, which are based on current expectations and

projections about future events and trends that may affect Cencosud’s business.

You are cautioned that any such forward-looking statements are not guarantees of

future performance. Several factors may adversely affect the estimates and

assumptions on which these forward-looking statements are based, many of which

are beyond our control.

IRO

Phone: +562 2959 0545

[email protected]

Marisol Fernández León Senior IR Analyst

Phone: +562 2959 0368

[email protected]

Natalia Nacif

Earnings Presentation

Third Quarter 2015

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