Ripley Chile S.A. Emisión de Bonos Desmaterializados Series

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Ripley Chile S.A. Emisión de Bonos Desmaterializados Series
Ripley Corp
Presentation
September 2009
RIPLEY CORP
One of the largest department
stores companies in Chile and
Peru
RIPLEY CORP
Revenues 2008: MUS$1,928
EBITDA 2008: MUS$ 180
Market Cap Jun-09: MUS$ 1,456
CHILE
38 Stores - Selling space 232,820 sqm
Revenues 2008: US$1,390 million
Loan Portfolio Jun-09: MUS$ 827
PERU
11 Stores – Selling space 102,110 sqm
Revenues 2008: US$ 538 million
Loan Portfolio Jun-09: MUS$ 272
Figures in real Chilean pesos as of Jun-09 converted to US$
using Jun 30th FX of $531.76/US$
CONTENTS
• Ripley - 53 years of history
• Recent Developments
• Next Steps
• Why Invest in Ripley?
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$257)
2005
IPO of Ripley Corp.
2007
First store outside Lima (Trujillo). First shopping mall of Aventura Plaza S.A. JV in Peru
2009
Acquisition of 22.5% of Nuevos Desarrollos S.A.(Plaza Alameda, Plaza Sur and future developments)
Sale of the participation in Mall Calama, Mall del Centro, Mall del Centro Rancagua and Mall Panoramico.
4
ONE OF THE LARGEST DEPARTMENT STORES COMPANY IN
CHILE AND PERU
• Third player on department store business in Chile and second in Peru
• Sales of US$ 1.8 billion
• MUS$ 1,323 in Chile (LTM)
• MUS$ 504 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%
Source: Ripley and Companies Press Releases
La Polar
12.9%
Source: Ripley
Figures in real Chilean pesos as of Jun-09 converted to US$
using Jun 30th FX of $531.76/US$
5
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$1,335 (Tarjeta Ripley + Banco Ripley) as
of Dec-08
• Loan Portfolio of Tarjeta Ripley: MUS$ 967
• Loan Portfolio of Banco Ripley: MUS$ 368
• Fifth actor in consumer credits market in Peru with a loan portfolio of MUS$359 as of Dec-08.
• 5.6 million cards issued in Chile and 2.1 million in Peru
Market share in Chile
(consumer credits 2008)
Market share in Peru
(consumer credits 2008)
Other Small
Retailers
6.7%
Other Banks
6.8%
Scotiabank
12.5%
Santander
21.1%
Interbank
17.0%
Corpbanca
4.6%
Falabella
11.9%
Ripley
8.3%
BBVA
4.7%
La Polar
4.9%
Banco De Chile
17.7%
Banco Ripley +
Tarjeta Ripley
6.4%
Banco Paris +
Tarjeta Mas
6.9% BCI
9.4%
Source: SBIF (w/o considering BancoEstado)
Falabella + CMR
10.8%
Continental
7.7%
BCP
31.0%
Others del Trabajo
1.2%
4.3%
Source: SBS Peru
Figures in real Chilean pesos as of Jun-09 converted to US$
using Jun 30th FX of $531.76/US$
6
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
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
(2006-2008)
8
CONTENTS
• Ripley - 53 years of history
• Recent Developments
• Next Steps
• Why Invest in Ripley?
9
FIRST HALF 2009 RESULTS (MUS$)
32.8%
40.7
27.4
1S 2008
1S 2009
Net Income
MCH$ as of Jun-09
1H 2008
1H 2009
Variation
Var %
Revenues
881.8
780.6
-101.2
-11.5%
Operating Result
63.8
-35.6
-99.4
-255.7%
Non Operating Result
-14.9
43.4
58.3
Net Income
40.7
27.4
-13.4
-32.8%
Figures in real Chilean pesos as of Jun-09 converted to US$
using Jun 30th FX of $531.76/US$
10
FIRST HALF 2009 REVENUES IN CHILE (MUS$)
Evolution of financial revenues and loan portfolio
(MUS$)
Revenues in Chile 1H 2009 (MUS$)
CAGR*: 13.9%
661
10.1%
967
595
827
204
658
195
503
4.5%
450
931
670
522
423
394
214
231
269
1H 2009
2003
2004
2005
422
350
314
12.3%
1H 2008
Retail
Financial
2006
2007
Gross Loan Portfolio
ƒ Retail Revenues in Chile fell 12.3% (SSS -15.8% in real pesos)
ƒ Financial revenues in Chile fell 4.5% due to lower loan portfolio
Source: SBIF
Figures in real Chilean pesos as of Jun-09 converted to US$
using Jun 30th FX of $531.76/US$
11
2008
.
Financial revenues
Jun-09
FIRST HALF 2009 REVENUES IN PERU
Revenues in Peru 1H 2009
(Million Soles)
Evolution of financial revenues and loan portfolio
Banco Ripley Peru** (MUS$)
359
CAGR: 35.7%
272
267
202
9.2%
608
1H 2008
Revenues Peru
552
92
1H 2009
2006
191
185
112
2007
Loan Portfolio
2008
.
Jun-09
Financial revenues
ƒ Revenues in Peru decreased 9.2% in real soles, 15.7% in pesos (SSS -13.1% in
real soles )
ƒ Important conversion effect of Peruvian financial statements due to the appreciation
of Chilean peso v/s Peruvian sol
Figures in real Chilean pesos as of Jun-09 converted to US$
using Jun 30th FX of $531.76/US$
12
**Banco Ripley Peru doesn’t consolidate
line by line with financial statements of
Ripley Corp S.A.
FIRST HALF OPERATING RESULT (MUS$)
-29.2
-15.7
63.8
-35.6
-54.8
0.3
Operating
Result
2Q 2008
∆ Chilean
∆ Peruvian
Margin (before Margin
provisions)
∆ Provision ∆ Total SG&A
charges Chile
Operating
Result
2Q 2009
ƒ Reduction in consumption impacted retail sales and margins, specially durable goods
ƒ Conservative approach and reduction of consumer confidence caused a drop in loan portfolio
ƒ Financial revenues decreased MUS$ 9.1 due to a lower Loan Portfolio
ƒ Provision charges increased 94.6%, equivalent to a rise of MUS$ 54.8 due to increased delinquency
Figures in real Chilean pesos as of Jun-09 converted to US$
using Jun 30th FX of $531.76/US$
13
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 to sell 20% of Ripley. The first part of this agreement was executed on
August 24th, with the sale of 5% of Ripley Corp to Corpvida Insurance Company (Related to A.Saieh). The remaining
15% should be completed before November 30th 2009.
• Alvaro Saieh has a successful experience on very complementary businesses to Ripley (food retail, banking and real
estate).
Major Shareholders
Inversiones
Bujorico Ltda.**
15%
Free Float
19%
Inversiones R
S.A.*
61%
Corpvida S.A
(Related to
A.Saieh)
5%
Free Float
Retail
54.4%
Insurance
Companies
1.2%
Mutual Funds
7.3%
International
Investors
19.7%
Figures in real Chilean pesos as of Jun-09 converted to US$
using Jun 30th FX of $531.76/US$
14
Pension Funds
16.0%
SELLING PROCESS OF NON STRATEGIC AND MATURE
SHOPPING MALLS
BEFORE
Shopping
Mall
Panoramico
Mall del Centro Santiago
Mall del Centro Rancagua
Mall Calama
Marina Arauco
Mall del Centro Curico
Total Weighted Average Selling Space
CURRENT
Selling
Property
Space (m2)
Ripley
5,671
100%
18,917
100%
13,046
100%
44,206
25%
57,968
33%
45,911
33%
81,860
Shopping
Mall Chile
Marina Arauco
Mall del Centro Curico
Mall Plaza Sur
Mall Plaza Alameda
Weighted Average Selling Space Chile
Shopping
Mall Peru
Trujillo
Callao
Weighted Average Selling Space Peru
Total Weighted Average Selling Space
Selling
Property
Space (m2)
Ripley
57,968
33%
45,911
33%
74,583
22.5%
57,355
22.5%
63,966
Selling
Property
Space (m2)
Ripley
44,114
40%
76,460
40%
48,230
112,196
Î Strategy is focused in divesting on mature shopping malls and participating in the development of new projects with
higher profitability with the leading group of the industry .
• Selling process of mature shopping malls in Chile, with a total price of MUS$136 and a net income of over
MUS$94
• Acquisition of 22.5% of Nuevos Desarrollos S.A which belongs to Mall Plaza. (Chile)
• JV in Peru called Aventura Plaza, with 2 opened shopping malls and 40% of ownership
15
CHANGE ON WRITE OFFS POLICY
Before
Past Due Days
0
30
X%
% Provisioned
60
90
180
Y%
Z%
100%
Provisions / Loan Portfolio = 20.6%
Gross Loan Portfolio = MUS$ 827
Current
Past Due Days
0
% Provisioned
30
X%
60
90
180
Y%
Z%
100%
WRITE OFF
Provisions / Loan Portfolio = 9.3%
Gross Loan Portfolio = MUS$ 723
Falabella = 6.4%
Cencosud = 12.5%
• Write off of a past due loan is made after 180 days (previously it was done after 360 days)
• No effect in the income statement or cash flow, just in the balance sheet
• New policy allows to be comparable with other players of the industry
16
360
WRITE
OFF
NEW DISTRIBUTION CENTER
• New Distribution center has the most advanced technology in
South America:
• Improve customer service
• More efficient operations
• Increase inventory turnover
• The new facility was officially inaugurated on June 22nd, with the
assistance of Chilean President Ms. Michelle Bachelet
17
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 term)
• Rate: 5.04% (spread of 167 bps over Chilean Central Bank)
• Series F:
• UF 2,000,000 (MUS$ 79)
• Duration: 4.7 years (7 year term)
• Rate: 4.45% (spread of 170 bps over Chilean Central Bank)
On July 27th 2009 Ripley Chile prepaid old series A and B for UF 4.462.053 (MUS$ 176), using both proceeds from the
series E and F and available cash.
Considering prepayment of series B:
Î Annual Savings of MUS$1 in financial expenses
Î Savings in Present Value: MUS$6.2
Î Average Duration increases from 6.1 to 6.8 years
Figures in real Chilean pesos as of Jun-09 converted to US$
using Jun 30th FX of $531.76/US$
18
FINANCIAL STRUCTURE
MUS$ as of Jun-09
JUNE 2008
JUNE 2009
Proforma Aug 10th
495.8
496
457.8
458
483.6
484
615.5
616
53
498.1
498
362.5
362
211.0
211
182
183.2
Jun-08
Cash
428.9
429
364.7
365
Jun-09
Short Term Debt
Long Term Debt
128.5
129
Proforma Aug 10th
Net Debt
MUS$ as of Jun-09
182
ƒ Net debt decreased 30.3% from Jun-08
to Aug-09
167
166
152
ƒ2009-2010 maturities pre-financed with
cash position
64
34
Jun 2009-2010
2011-2012
Cash
2013-2014
2015-2016
ƒ Strong cash position
2017-2030
Maturities
Figures in real Chilean pesos as of Jun-09 converted to US$
using Jun 30th FX of $531.76/US$
19
CONTENTS
• Ripley - 53 years of history
• Recent Developments
• Next Steps
• Why Invest in Ripley?
Brands & Fashion
(Variety and Design)
Convenience and
easy Financing
Purchase
experience
20
NEXT STEPS
• New Face
• Financial Business
• Efficiency
21
NEW FACE
We hired the BEST fashion face
22
NEXT STEPS
• New Face
• Financial Business
• Efficiency
23
FINANCIAL BUSINESS – RIPLEY CARD “MAKEOVER”
NEW IMAGE
BETTER BENEFITS
24
BEST LOYALTY PROGRAM
FINANCIAL BUSINESS – IMPROVING PERCEPTION
First results: Important growth on benefits perception, lower interest rates and
identification with Ripley Card
Ripley Card
March 09
Ripley Card
July 09
Offers the best benefits
13
19
Allows to buy in many associated stores
23
28
Has the lower interest rates and fees
11
18
Is the best card
12
15
Is the most convenient
13
18
Is always concerned on improving
19
25
Is for people like me
12
24
Significant Variation
Source: IPSOS. Total Base N=300.
25
FINANCIAL BUSINESS – TARGET: PORTFOLIO GROWTH
920
Jun-08
933
Sep-08
967
Dec-08
914
Mar-09
359
827
Jun-09
Loan Portfolio Chile
(MUS$ of each period)
307
297
Jun-08
Sep-08
297
Dec-08
Mar-09
Loan Portfolio Peru
(MUS$ of each period)
Î Increase loan portfolio both in Chile and Peru
ƒ Take advantage of higher consumer confidence
ƒ Better perception of Ripley Card
ƒ Focus on activating customers with low use of card
ƒ Taking advantage of Ripley’s data base
Figures in real Chilean pesos as of Jun-09 converted to US$
using Jun 30th FX of $531.76/US$
26
273
Jun-09
NEXT STEPS
• New Face
• Financial Business
• Efficiency
27
EFFICIENCY – EXAMPLE: LOGISTICS
• Since beginning of 2009 all the operations were consolidated at REDEX (new Distribution Center)
•Reduction of 51,000 m2 of distribution
• In the first year of operations were achieved international levels on the main KPI
• Important savings of transport, HH.RR and logistics expenses
Main Service KPIs
98.0%
Precision of
inventory
98.7%
Store Fill Rate
Expenses Reductions 2009 vs. 2008
97.8%
12%
Fulfillment of
Home delivery
Transport
28
14%
11%
HH.RR
Logistics
CONTENTS
• Ripley - 53 years of history
• Recent Developments
• Next Steps
• Why Invest in Ripley?
29
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
• Focus 2009-2010
• Improve efficiency in Chile
• Growth in Peru (3 new stores during 4Q 2009 and 2010)
• Increase Loan Portfolio
• Company is more sensitive to economic cycles compared to its peers
• Stock price at attractive levels, reflecting the low period of the economic cycle
• P/BV 1.2x
30
Ripley Corp
Presentation
September 2009

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