(mse: walmex)...% of 2018 walmex sales 45.3 customer target c, d, e cities* 644 operating units*...
TRANSCRIPT
June 30, 2019
Company Overview(MSE: Walmex)
2
This presentation is property of Wal-Mart de México S.A.B. de C.V. and is
intended for the use of the company’s shareholders and the investment
community. It should not be reproduced in any way.
This presentation may contain certain references concerning Wal-Mart de
Mexico S.A.B. de C.V.’s future performance that should be considered as
good faith estimates made by the Company.
These references only reflect management expectations and are based
upon currently available data. Actual results are always subject to future
events, risks and uncertainties, which could materially impact the
Company’s actual performance.
3
Table of contents
History of Walmex 4
Walmex Today 11
Financial Information 29
Competitors 35
Walmex Resources 42
4
History of Walmex
5
History: founded in 1958
1958
1970
1964
1959
Vips Restaurantsstart operations
Bodega Aurrerá& Suburbia
start operations
Aurrerástart operations
Superamastart operations
1977
Cifra starts trading on the Mexican Stock Exchange
6
History: Walmart’s first international business
1991
1999
1997
1993
Wal-Mart Stores, Inc.acquires majority
position in Cifra - Tender offer
on the MSE
Introduction of Every Day Low
Prices
Joint venture between Cifra and
Wal-Mart Stores, Inc.
Walmart Supercenterstart operations
2003
Walmart de México Foundation created
&
Stores, Inc.
7
History: “Bodegas” expansion & incorporation of Central America
2004
2008
2007
2005
License issued to operate
a bank in Mexico
Bodega AurreráExpress expansion
Mi Bodegastart operations
Superama.com.mxOnline grocery sales pilot
Wal-Mart Stores, Inc. acquires 33% of the shares of CARHCO
(Central American Retail Holding Company)
2010
Walmart de México acquires
100% of Walmart Centroamérica
8
History: Sells its Restaurant Division, the Bank and Suburbia
2011
2015
2014
2013
Walmart de México y Centroamérica
sells its restaurant division to Alsea
Walmart de México y Centroamérica
sells its bank to Inbursa
First Walmart Supercenter
in Central America(Honduras)
Walmart.com.mx launches
2017
Walmart de México y Centroaméricasells Suburbia to Liverpool
9
Continuous profitable growth
23.9
61.7
2008 2018
244.0
612.2
2008 2018
EBITDA(Mx$ billion)
Sales(Mx$ billion)
Walmex fiscal year: January-December
10
Growth across multiple formats
Walmex fiscal year: January - December
2008 2018
82.3
275.7
CAGR 12.8%
68.7
169.4CAGR 9.4%
2008 2018
66.0
124.9
CAGR 6.6%
12.4
39.2CAGR 12.2%
2008 2018
2008 2018
Total Sales(Mx$ billion)
11
Walmex Today
12
Walmex: Listed on the Mexican Stock Exchange
• Market Cap: Mx$ 914 bn1
• Weight on the MSE index: 10.9%2
• 3rd most traded stock on the MSE3
1 As of June 28th, 2019 / 2 Internal estimation as of June 28th, 2019 / 3 From April to June 2019
Wal-Mart Stores, Inc.
Mexican Stock ExchangeSustainable Index
ADR: WMMVY OTCQX
70% 30%
13
Company description
As of June 30, 2019
Revenues (Mx$ billion) 631
Units 3,291
Countries 6
Cities 654
Business formats 4
eCommerce sites 3
Distribution centers 27
Associates (thousand) +239
Contributionto
2018 sales
18.4%
Central America
81.6%
Mexico
*
* Last 12 months as of June 2019
14
Value Driver: Price
Basic general merchandise, food and household
items at the best prices.
* As of June 30, 2019
% of 2018 Walmex sales 45.3
Customer target C, D, E
Cities* 644
Operating units*
– Mexico 1,938
– Central America 691
SQ. FT. (average) SKUs (average) Units Approach
44,130 32,000 527 Weekly shopping
12,490 11,200 520 Small towns
3,710 4,400 1,582 Fill-in trip
15
Mama Lucha
She is Mexico’s favorite
luchadora, who fights against
high prices together with Bodega
Aurrerá. She brings the lowest
prices to all families.
She is the average Mexican
housewife: she wants the best for
her family, but faces a constant
struggle (lucha in Spanish) to
make ends meet.
16
Value Drivers: Price and assortment
Widest assortment of goods at Every Day Low Prices.
% of 2018 Walmex sales 27.8
SQ. FT. (average) 79,650
SKUs 90,000
Customer target A/B, C, D+
Cities* 96
Prototypes 5
Operating units*
– Mexico 277
– Central America 32
* As of June 30, 2019
17
Carrito
Qualities: Friendly, curious, helpful, observer,
good listener, fun, responsible, practical,
intelligent, ally, accomplice.
Only Carrito can join, advise and listen to our
customer in order to help her find everything she
needs when she comes to Walmart.
Carrito is the perfect shopping partner.
He knows our customer better than anyone and
he understands what motivates her to shop.
18
Neighborhood supermarkets with outstanding fresh
and food departments at reasonable prices.
% of 2018 Walmex sales 6.4
SQ. FT. (average) 16,150
SKUs 30,000
Customer target A, B, C
Cities* 47
Prototypes 2
Operating units*
– Mexico 92
– Central America 98
Value Drivers: Quality, convenience and service
* As of June 30, 2019
19
Local format branding
Costa Rica Nicaragua
El Salvador Guatemala & Honduras
Mexico
20
Membership warehouse clubs focused on businesses
and high income households.
% of 2018 Walmex sales 20.5
SQ. FT. (average) 76,750
SKUs 4,500
Customer target A, B, C, D, Business
Cities* 86
Prototypes 4
Operating units*
– Mexico 163
Value Drivers: Price leader, volume, new and unique merchandise
* As of June 30, 2019
21
Business Member
Individual Member
22
Superama.com.mx: online grocery sales leader
Call Center
Mobile Apps
Web page
Delivery
23
Walmart.com.mx: online general merchandise
•Audio •Cameras
•Auto & tires •Home
•Baby & toddler •Musical Instruments
•Books •Jewelry & accessories
•Cell Phones •Toys
•Computers & tablets •Books
•TV’s & video •Pets
•Sports •Health & Beauty
•Consumer Appliances •Video Games
•Electronics •Patio & Garden
•Furniture
CategoriesDifferentiated catalogue Delivery
24
Walmart.com.mx: groceries and perishables
•Meal Solution, grains & pasta, snacks
•Pharmacy, Health & Beauty
•Beverages, Wine & liquor
•Cleaning Supplies & Pets
•Frozen Food
•Produce
•Dairy, Eggs & Cheese
•Meat, Seafood & Poultry
•Baby & toddler
•Deli
•Bakery & Bread
Categories
25
26
Flexible multiformat operation
0 15,000 30,000 45,000 60,000 75,000 90,000Sales Area (Sq. Ft.)
Flexible PrototypesIncome Level
C, D, E
A/ B, C, D+
A, B, C, D+
A, B, C
27
Regional store presence
654 Cities withWalmex presence
Honduras31
Nicaragua27
Costa Rica24
Guatemala 49
El Salvador 22
Mexico 501
* As of June 30, 2019
28
Efficient distribution network
27 DistributionCenters
Monterrey
Guadalajara
Mexico City
Villahermosa
Culiacán
Guatemala
El Salvador
Honduras
Nicaragua
Costa Rica
2
5
3
3
2
3 3
3
1
2
* As of June 30, 2019
29
Financial Information
30
Walmex: 2Q19 Results
*2019 figures include IFRS 16
(MX$ Millions)
2Q192Q18
IFRS 16 Pro-formaVar.
2Q18 Reported
Var.
$ % $ % % $ % %
Total revenue 154,350 100.0 146,666 100.0 5.2 146,666 100.0 5.2
Gross margin 34,910 22.6 33,326 22.7 4.8 33,326 22.7 4.8
General expenses 22,952 14.9 22,307 15.2 2.9 22,883 15.6 0.3
Earnings before other income, net 11,958 7.7 11,019 7.5 8.5 10,443 7.1 14.5
Other income, net 122 0.1 (16) 0.0 8.4x (16) 0.0 8.4x
Operating income 12,080 7.8 11,002 7.5 9.8 10,427 7.1 15.9
EBITDA 16,276 10.5 14,831 10.1 9.7 13,502 9.2 20.5
Net Income 8,751 5.7 7,729 5.3 13.2 7,960 5.4 9.9
Note: Pro-forma 2018 figures are not audited, but are based on the 2018 audited reported results and adjusted with our best estimates to show the effects
related to the adoption of the IFRS 16.
X = times
31
Mexico: 2Q19 Results
*2019 figures include IFRS 16
(MX$ Millions)
2Q192Q18
IFRS 16 Pro-formaVar.
2Q18 Reported
Var.
$ % $ % % $ % %
Total revenue 126,898 100.0 119,152 100.0 6.5 119,152 100.0 6.5
Gross margin 28,386 22.4 26,730 22.4 6.2 26,730 22.4 6.2
General expenses 18,161 14.3 17,386 14.6 4.5 17,818 15.0 1.9
Earnings before other income, net 10,225 8.1 9,344 7.8 9.4 8,912 7.5 14.7
Other income, net 117 0.1 (26) 0.0 5.4x (26) 0.0 5.4x
Operating income 10,342 8.1 9,318 7.8 11.0 8,886 7.5 16.4
EBITDA 13,592 10.7 12,244 10.3 11.0 11,234 9.4 21.0
Note: Pro-forma 2018 figures are not audited, but are based on the 2018 audited reported results and adjusted with our best estimates to show the effects
related to the adoption of the IFRS 16.
X = times
32
Central America: 2Q19 Results
*2019 figures include IFRS 16
(MX$ Millions)
2Q192Q18
IFRS 16 Pro-formaVar. (%)
2Q18Reported
Var. (%)
$ % $ %Peso
terms
On a
constant
currency
basis
$ %Peso
terms
On a
constant
currency
basis
Total revenue 27,452 100.0 27,514 100.0 (0.2) 4.9 27,514 100.0 (0.2) 4.9
Gross margin 6,524 23.8 6,596 24.0 (1.1) 4.0 6,596 24.0 (1.1) 4.0
General expenses 4,791 17.5 4,921 17.9 (2.6) 2.4 5,065 18.4 (5.4) (0.5)
Earnings before other
income, net1,733 6.3 1,675 6.1 3.5 8.8 1,531 5.6 13.2 19.1
Other income, net 5 0.0 10 0.0 (47.4) (44.8) 10 0.0 (47.4) (44.8)
Operating income 1,738 6.3 1,685 6.1 3.2 8.5 1,541 5.6 12.8 18.6
EBITDA 2,684 9.8 2,587 9.4 3.7 9.1 2,268 8.2 18.3 24.4
Note: Pro-forma 2018 figures are not audited, but are based on the 2018 audited reported results and adjusted with our best estimates to show the effects
related to the adoption of the IFRS 16.
X = times
33
Financial strength
Assets Liabilities &shareholders' equity
Balance sheet statement
(June 30, 2019 – MX$ Million)
34
Growth Program 2019
12.514.3
17.4 17.920.0
2015 2016 2017 2018 2019
(Mx$ billion)CAPEX (% Total)
Existing Stores
(Remodels &
maintenance)Technology
&
eCommerce
35%
31%
20%
13%
1%
Logistics
Fresh Upstreaming
Total CapEx:
$20.0 B MXN
New Stores
35
Competitors
36
Revenues*(Mx$ billion)
154.0
127.5
20.3
Selected self-service competitors
* Last 12 months as of June 2019
Listed on the MSE Private
37
Informal market remains a large competitor
38
Associates
MX$53 million invested in training
22,996 promoted associates
36% of management positions are
filled by women
2018 highlights:
02
01
03
39
Community support
2018 highlights:
12,809 small producers
developed
Donations for over 34,120 food tons
benefiting +1M people per month
02
01
03
+1,261 million pesos were channeled
through social impact programs
93,405 volunteer participations04
40
Environmental commitment and success
01
05
03
02
04
2018 highlights:MX$ 1,040 million investment in
sustainability initiatives
1,111 water treatment plants
The zero waste objective:74% progress in Mexico & 50% in Central America
We reduced our emissions
by 5% versus 2015
84% of our units are supplied
by renewable energy
41
Walmex resources
Investor Relations:
www.walmex.mx
Corporate:
www.walmartmexico.com.mx
Online & sales:
www.superama.com.mx
www.walmart.com.mx
www.sams.com.mx