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March 2015 Corporate Presentation
March 2015
Corporate
Presentation
Multi-format retailer with exclusive
focus in Peru
Leading positions in its 3 segments:
#2 supermarket chain
#1 pharmacy chain
#1 shopping center operator
Controlled by Intercorp Peru, one of
Peru’s largest business groups
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2
InRetail overview
1 As of March 17, 2015
Note: Selected companies
Market cap1 : ~US$3.2bn
Market cap1 : ~US$1.5bn
IPO entity
3
InRetail is part of the retail arm of one of Peru’s leading business groups
Sales area / GLA
# Employees
# Stores / S.Centers
N/A
10,697
837
607,120 sqm2
435
269,718 sqm
14,598
101
Supermarkets Pharmacies Shopping Malls
Adjusted EBITDA 185 202 232
Revenues 2,086 349 3,757 6,147
604
2014
(S/. millions)
60.7% 33.7% 5.6%
37.4% 29.9% 32.7%
% of Revenues
% of Adj. EBITDA
201
1. Includes 3 managed properties
2. 553,431 sqm excluding managed properties
4
InRetail at a Glance
5
Presence in a Highly Attractive Market 1
Market Leadership Across Formats 2
Clear and Consistent Growth Strategy 3
Strong Financial Results 4
1
2
3
4
Key Investment Highlights
Fastest growing economy boosts emerging
middle class
Real GDP Growth
Peru
Source: IMF.
Latin America¹
GDP per capita (2014, US$ 000)
(2008-2014 CAGR)
1 Average Real GDP growth of Colombia, Brazil, Chile, Mexico Source: Peruvian Central Bank and IMF
~1.8x
Source: Ipsos-Apoyo, 2013
Population by socio-economic category
% of total population
SEC
% of total population
Annual
Income 2003
51%
5%
15%
29%
2013
38%
11%
23%
27%
+14%
$ 45,962
$ 22,852
$ 14,455
$ 8,777
$ 6,163
-14%
A
B
C
D
E
5.6%
3.1%
6.6 8.4
10.8 11.1 12.8
14.9
Peru Colombia Brazil Chile Mexico Argentina
Average: US$ 10.8
1
6
2.1
3.0
3.6
4.1
5.2
19
23
33
44
67
54
90
113
130
226
Argentina
Significant upside potential for modern retail
Source: Businessmonitor.
Supermarkets Pharmacies Shopping Centers
Colombia Chile Brazil Peru Argentina Colombia Chile Brazil Peru
Argentina
Sales of Retail Pharma per capita - US$
(2014)
Median ex-Peru: 122
~2.3x
Source: ACCEP & INEI.
Chile Brazil Peru
Malls per million people (2013)
Colombia Mexico
Sales area per capita - m2/1,000 inhabitants
(2014)
Median ex-Peru: 38
~1.7x
Mexico
Median ex-Peru: 3.9
~1.8x
Mexico
1
7
Source: Businessmonitor.
2005 2006 2008 2009 2010 2011
Acquisition of
SPSA from
Royal Ahold
First mall opening
in Lima
(Primavera - 2001)
2004
SPSA and
Interbank launch
the Vea Visa
credit card
SPSA launches
Vivanda and
Plaza Vea Super
formats
First mall
outside Lima
(Chiclayo)
Inkafarma opens
in Plaza Vea
First power center
is launched
Aggressive
expansion of
malls and
supermarkets
Acquisition of
InkaFarma
International
bond placement
International
bond placement
SPSA TURNAROUND PERIOD
2007
Expansion into
provinces
2012 2013
Partnership with
Tarjeta Oh!
Inauguration of
our flagship mall
Salaverry
International
bond placement
International
bond placement
Initial Public
Offering
USD $460 MM
Revenues
Million Soles (S/. mm)
2014
3,757
2,086
349
2
Proven track record of profitable growth
8
#2 largest supermarket chain
#1 supermarket brand
Compact formats provide flexibility to grow
17 secured locations
First to enter in 16 out of the 21 cities outside Lima where
there’s a modern supermarket present
Ranked 8th among the best places to work in Peru1/
Supermarkets segment overview
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Source: Nielsen. 1/ Within the category of more than 1,000 employees in 2014.
Overview Formats
Compact
Hypermarkets
(79%)
Supermarkets
(14%)
High-end
(7%)
Other (0%)
2,000 – 5,000
500 – 2,000
900 – 1,200
700 – 2,000
61 / 25
29 / 6
8 / 0
3 / 0
Sales area
range (m2)
# of stores
Total / Provinces US$ 1.3bn
Revenues Brands
Note: Figures as of December 2014.
Plaza Vea Super includes Plaza Vea Express
Other
Market share evolution
% of sales
2
9
60%
52%
44% 44% 40% 39%
27% 30% 33% 31%
34% 34%
13% 18%
23% 25% 26% 27%
2005 2008 2011 2012 2013 2014
Cencosud SPSA Tottus
Pharmacies segment overview
#1 pharmacy chain
Largest and nationwide pharmacy footprint
“Every day low price” strategy supported on:
Increasing bargaining power with suppliers
Highly profitable portfolio of private labels
“Love brand”
Stores
Small, standardized formats (120 m2)
Low capex
100% leased stores with proven renewal track record
Operations
Assisted sales
Incentives bonus for overall and private label sales
Lower costs based on volume and efficiencies
32%
28%
41%
US$ 0.9mm
~ US$ 0.1mm
~ US$ 0.5mm
837
~7,000
1,456
# of
Stores
Annual
sales per
store
Total
Market
US$2.1bn
Other
chains
Mom &
Pops
Player
Note: figures as of December 2014. Source: IMS.
Modern
Market
US$1.2bn
47%
53%
2
10
Overview
Successful business model
Pharmaceutical retail market
11.3
5.6
4.5 4.2
2.5
Shopping Centers segment overview
26
#1 shopping center operator under Real Plaza brand
Nationwide premium portfolio of 20 locations totaling
590k sqm of GLA
Preferred partner for retailers (~94% occupancy)
Secured landbank to sustain growth
Contribution from the GLA added during 2014 is not fully
reflected in our results
Inaugurated Real Plaza Salaverry with 73k sqm in
May 2024
Acquired Real Plaza Centro Civico with 41k sqm in
August 2014
Expanded our malls throughout the year, adding
41k sqm
8k sqm of expansion under construction as of
December 2014 to be opened in 2014
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Median ex-Real Plaza: 4.4
Million visitors
1/
Source: ACCEP 2013. 10.3mm visitors as of May 2014. 1/ Includes 2.5mm visitors from the shopping centers owned by third
parties.
2
11
Overview
Secured Growth
Average monthly visitors
227 227 228
249 249 253
261270
Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14
Quarterly Openings and SSS by Segment
Openings Same Store Sales
-0.7%
-2.1%
2.1%2.4%
4.8%5.2%
2.6%
4.9%
Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14
-1.1%
0.4%
4.0%
6.9%
9.3%
10.8%
8.2%
5.9%
Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14
Pharmacies
Supermarkets
297 319 336 399 425
499 542 553
Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14
610 636675
725 731 754787
837
Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14
Shopping Malls
GLA (‘000 sqm)
Pharmacies
N° Stores
Supermarkets
Sales Area (‘000 sqm)
N° Stores 88 88 90 98 98 98 100 101
N° Malls 13 13 13 15 15 16 17 17
2
12
Leading positions and highly recognized brands in all business segments
Supermarkets (% of sales)
39%
21%
12%
Others 13%
13%
13%
Others
54%
Source: Company filings. Brand awareness - IPSOS 2013. Note: Source Nielsen, market figures refer to modern channel as of 2014
Source: IMS, InkaFarma estimates. Brand awareness - Arellano Marketing 2011. Note: Market figures refer to modern channel as of December 2014.
Source: Asociación de los Centros Comerciales del Perú (ACCEP). Note: Market figures refer to modern channel as of 2013.
27% 34%
53%
Pharmacies (% of sales) Shopping Centers (% of GLA)
20%
1st 1st 2nd
Plaza Vea is the most remembered
brand among supermarkets InkaFarma is the brand that more
Peruvians aspire to consume
Real Plaza is the shopping center
operator with more monthly visitors
3
13
Largest nationwide footprint of premier
retail locations
Huancayo
Piura (2)
Chiclayo
Trujillo
Arequipa
Juliaca
Chimbote
Lima (8)
Cajamarca
Cusco
Total sites: 20
Total GLA (m2): 589,688
Total stores: 837
Total stores: 101
Total sales area (m2): 269,718
(7)
(5) (29)
(21)
(16)
(14) (10)
(5)
(14) (27)
(28)
(4)
(6)
(39)
(17)
(38)
(11)
(37)
(363)
(56)
(47)
(38)
Huánuco
(3)
Ica
Huancayo (2)
Chiclayo
Trujillo (5)
Chimbote (3)
Tacna
Juliaca
Arequipa (2)
Piura (3)
Chincha
Lima (70)
Talara
Puno
Sullana (2)
Cajamarca
Huanuco
Cusco(2)
17 secured locations
Lima Provincias (1)
(2)
Pucallpa
Note: As of December 2014.
Pucallpa
Pisco
3
14
Supermarkets Pharmacies Shopping Centers
66
21
63
113
Q4'13 Q4'14 2013 2014
160 202
475
604
Q4'13 Q4'14 2013 2014
1,492 1,738
5,322
6,147
Q4'13 Q4'14 2013 2014
Margin 1.2% 1.8% 4.4% 1.2%
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2013 Consolidated Results Million Soles (S/. mm)
Full Year 2014 Highlights Revenues
Margin 8.9% 9.8% 10.7% 11.6%
Double digit growth in Revenues, Adj. EBITDA, and Net
Income vs. 2013
New corporate structure allowing its segments to have
independent capital structures and more transparency
Refinanced debt to reduce cost of debt (US$ 12 mm in
annual savings from lower interest expenses)
Increase in fair value of investment properties of
S/. 138.4 mm and exchange loss of S/.114.5 mm
Increase in EPS from S/. 0.6 to S/. 1.1
2014 Consolidated Highlights Million Soles (S/. mm)
Adj. EBITDA Net Income
4
15
66% 67%
65%64%
34% 33%
35%
36%
Q4'13 Q4'14 2013 2014
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InRetail Shopping Malls InRetail Consumer
Financial Results by Segment Million Soles (S/. mm)
66% 64%
58% 56%34% 36%
42%
44%
Q4'13 Q4'14 2013 2014
Revenues Revenues
63
110
215
349
Q4'13 Q4'14 2013 2014
38
68
115
202
Q4'13 Q4'14 2013 2014
Adj. EBITDA
Net Rental Margin 75.9% 80.2% 82.9% 82.4% 7.1% 7.1% 8.5% 8.2% Margin
Adj. EBITDA
1,439 1,633
5,142
5,833
Supermarkets Pharmacies
123 133
364 415
4
16
26 24 26
38 36 43
55
68
Q1 Q2 Q3 Q4
2013 2014
45 42 42
81
55 44
48
85
Q1 Q2 Q3 Q4
2013 2014
104 101 110
160
117 131
154
202
Q1 Q2 Q3 Q4
2013 2014
34 36
43 41 39
46 52
49
Q1 Q2 Q3 Q4
2013 2014
Adjusted EBITDA Evolution Million Soles (S/. mm)
InRetail Consolidated (+27.0 YoY)
Pharmacies (+19.5% YoY)
Supermarkets (+10.0% YoY)
Shopping Malls (+75.5% YoY)
4
17
Consolidated Capex and Financial Debt Million Soles (S/. mm)
Financial Debt Capex
658
1,034
792
2012 2013 2014
Capex by Quarter 2014
114
242
333
104
Q1'14 Q2'14 Q3'14 Q4'14
4.0x
3.6x 3.5x
4.0x 4.0x
1.3x
2.9x3.1x
3.6x3.6x
2012 2013 LTM Q2'14 LTM Q3'14 2014
Debt/EBITDA Net Debt/EBITDA
InRetail
Shopping Malls
Bond Issuances
InRetail
Consumer
Bond Issuances
Debt/EBITDA Net Debt/EBITDA
Debt
Cash
Net
Debt
1,668
1,125
542
1,722
324
1,398
2,226
238
2,028
2,446
285
2,160
1,827
201
1,627
4
18
InRetail Consumer
Debt / EBITDA: 4.0x Net Debt / EBITDA: 3.6x
Total Consolidated Debt: S/. 2,446 mm
Debt by Segments As of December 31st, 2014
Debt
Cash
Net
Debt
1,347 1,168 1,095 976
168 131 215 306
1,179 1,036 880 670
1,111 1,099 624 691
124 86 81 656
987 1,013 543 35
2.9x 3.0x2.9x 2.9x
3.2x
2.0x
2.4x2.5x 2.6x
2.8x
2012 2013 LTM Q2'14 LTM Q3'14 2014
Debt/EBITDA Net Debt/EBITDA
8.2x
5.4x5.0x
6.4x
5.5x
0.4x
4.7x 4.6x
5.9x
4.9x
2012 2013 LTM Q2'14 LTM Q3'14 2014
Debt/EBITDA Net Debt/EBITDA
716
63
653
1,111
131
981
Bond Issuances
Bond Issuances
InRetail Shopping Malls Million S/. Million S/.
4
18
19
20
Shareholders and Corporate Governance 4
71.4%
6.3%
22.3%
Intercorp and
Subsidiaries
Float
NG Pharma
Shareholders
Name Position
Carlos Rodríguez-Pastor Chairman & Director
Ramón Barúa Director
Julio Luque Director
Pablo Turner Director
Luis Carranza Director
Board of Directors
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InRetail Peru Corp. Financial Debt As of December 31, 2014
73%
Total Consolidated Debt: S/. 2,446 mm
IPH1
100% 100%
99.98%
100%
100% 100% 100% 100% 100%
IPH2 RP IPM
Covenant IRC Bond
Net Debt/EBITDA 2.8x <3.75x
Covenants IRSM Bond
Total Debt/Total Assets 37.2% (<60%)
Secured Debt/Total Assests 2.6% (<30%)
EBITDA/Interest Expense 2.28x (>1.75x)
Unencumbered
Assests/Unsecured Debt242.1% (>150%)
Coverage Ratio
2.8x
Coverage Ratio
2.5xCoverage Ratio
3.2x
S/. mm
Bonds 418
Other Debt 209
Total Debt 628
Debt/EBITDA 2.7x
Net Debt/EBITDA 2.2x
S/. mm
Bonds -
Other Debt 39
Total Debt 39
Debt/EBITDA 0.2x
Net Debt/EBITDA 0.0x
Consolidated S/. mm
Total Debt 1,347
Debt/EBITDA 3.2x
Net Debt/EBITDA 2.8x
S/. mm
Bonds -
Other Debt 73
Total Debt 73
S/. mm
Bonds -
Other Debt 3
Total Debt 3
Consolidated S/. mm
Total Debt 1,111
Debt/EBITDA 5.5x
Net Debt/EBITDA 4.9x
S/. mm
Bonds 681
Other Debt -
Total Debt 681
S/. mm
Bonds 1,035
Other Debt -
Total Debt 1035
Debt/EBITDA 4.0x
Net Debt/EBITDA 3.6x
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This material does not constitute an offering document. This material was prepared solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities. Any
offering of securities will be made solely by means of an offering memorandum, which will contain detailed information about the company and its business and financial results, as well as its financial
statements.
Securities may not be offered or sold in the United States unless they are registered or exempt from registration under the U.S. Securities Act of 1933, as amended.
This presentation includes forward-looking statements or statements about events or circumstances which have not yet occurred. We have based these forward-looking statements largely on our current beliefs
and expectations about future events and financial trends affecting our businesses and our future financial performance. These forward-looking statements are subject to risk, uncertainties and assumptions,
including, among other things, general economic, political and business conditions, both in Peru and in Latin America as a whole. The words “believes”, “may”, “will”, “estimates”, “continues”, “anticipates”,
“intends”, “expects”, and similar words are intended to identify forward-looking statements. We undertake no obligations to update or revise any forward-looking statements because of new information, future
events or other factors.
In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this presentation might not occur. Therefore, our actual results could differ substantially from those
anticipated in our forward-looking statements.
No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. It should not be regarded by recipients as a
substitute for the exercise of their own judgment. We and our affiliates, agents, directors, employees and advisors 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 material does not give and should not be treated as giving investment advice. You should consult with your own legal, regulatory, tax, business, investment, financial and accounting advisers to the extent
that you deem it necessary, and make your own investment, hedging and trading decision based upon your own judgment and advice from such advisers as you deem necessary and not upon any information
in this material.
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