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7/31/2019 The Journey to Cencosud Peru - Jul 2010
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The Journey to Cencosud PeruLima, July 2010
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Agenda
Welcome to PERU Full immersion in the Supermarket Industry in Peru Cencosud Peru journey Challenges towards the future
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Some Highlights
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Population of29.5 million habitants (9 million in Lima) which 66% is between 15-64 years old.
Total area comparison to the world: 20th largest country. Boundaries: Bolivia, Brazil, Chile, Colombia, Ecuador 25 regions and 1 province Gross Domestic Product (GDP): US$131 billion Services sectorrepresents 60% of GDP (industry 32%, Agric 8%) Private consumption represents 70% of the GDP Import Partners US 23.4%, China 10.5%, Brazil 8.7% Inflation 2010(e): 2-3 % (food contribution 15%) Public Debt: 25.7% of the GDP Direct foreign investment represents 29% of theGDP
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Source: IMF, World Economic Outlook Database
Stable Macroeconomic Environment (cont.)
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Latin-American 2010
GDP P/C : US$ 8,047 (World US$ 9,068) PPP* P/C : US$ 11,022 (Mundo no data)Fuente: Fondo Monetario Internacional Octubre 2009
ARGENTINA
PPP per Capita: $ 15,030PPP GDP: $ 609.0 billPopulation : 40.5 mill
CHILEPPP per Capita: $ 14,940
PPP GDP: $ 256.8 billPopulation : 17.2 mill
MEXICO
PPP per Capita: $ 14,151PPP GDP: $ 1,537.2 billPopulation : 108.6 mill
PARAGUAYPPP per Capita: $ 4,711
PPP GDP: $ 30.2 billPopulation : 6.4 mill
BOLIVIAPPP per Capita:$ 4,576
PPP GDP: $ 47.7 billPopulation : 10.4 mill
COLOMBIA
PPP per Capita: $ 9,092PPP GDP: $ 413.8 billPopulation: 45.5 mill
ECUADORPPP per Capita:$ 8,022PPP GDP: $ 114.8 billPopulation : 14.3 mill
URUGUAY
PPP per Capita: $ 13,961PPP GDP: $ 46.9 billPopulation : 3.4 mill
VENEZUELAPPP per Capita: $ 11,727
PPP GDP: $ 342.2 billPopulation : 29.2 mill
BRAZILPPP per Capita: $ 11,066PPP GDP: $ 2,138.5 bill
Population : 193.3 mill
PERPPP per Capita:$ 9,108PPP GDP: $ 269.1 bill
Population: 29.6 mill
* PPP = PurchasingPower Parity
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Source: APEIM Peruvian Market Research Association, 2010
SEG - Socioeconomic Groups (Homes, %)
There is a new middle class that has alot of unsatisfied needs. They now haveaccess to high valued products and theconsumer behavior is changing.
5.5
16.5
31.8
30.1
16.1
5.2
17.7
33.1
30.2
13.8
56.0
53.8
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Supermarkets in Peru
We have great opportunities not only in Lima, but also in Provinces
There is a low formal retail penetration. By March 2010, there are 3 supermarkets chains, totaling 135 stores. In July 2009, Makro (Cash and Carry) started operations in Lima with 3 store openings so far. There are many strip and shopping centers projects going on that will boost supermarket growth plans.We outlook migration from traditional retailing (mom & pops, fairs) to supermarkets
(formal retail) because we see: Concentration of a wide variety of products in one place (one stop shopping). Competitive prices, healthy and safety environments. Products Traceability is highly value by customers. Access to credit increase the turn over rate.There are limited room of growth for new players
Current players are achieving scale economies and have heavily.covered the high and medium SEGs, specially in Lima.
The 3 main players in Peru has an Integrated retail strategy. We developed a deep local shopper knowledge.
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Retail Sales Evolution
Source: Apoyo y Asociados, Empresas Mayo 2010
Supermarkets in Peru (cont.)
CAGR : 14%
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Sales Floor Evolution
Thousandso
fSqm
Supermarkets in Peru (cont.)
Source: Apoyo y Asociados, Empresas Mayo 2010
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Source: Estimation from Cencosud Commercial IntelligenceSource: Axur
MARKET SHARE, MAR. 2010
Tottus
GSW
SPSA
16%
47%
36%
DISTRIBUTION CHANNELS
190,367
62,627
54,446
150
49%
22%
15%
15%
No RetailsSales %
Supermarkets
Convenience Stores
Traditional Markets
Others
IN CONSUMER MARKET
Supermarkets in Peru (cont.)
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Grupo de Supermercados Wong (GSW)
Founded by the Wong family in 1983, it has become the leader inthe Peruvian supermarket industry with the half of the market share. Cencosud SA acquired 100% of GSW SA equity by January 2008.
the acquisition included the whole supermarket business, satellitebusinesses, support areas and the real estate division, includingPlaza Lima Sur Shopping Center.
2009 Net sales were US$1,042 millions and the EBITDA marginwas US$84MM (8,1% of sales). GSW contributes with around 10%of the Cencosud total sales and is expected to be one of the growthengines of the group.
As of June 2010, GSW operates 59 stores, with a total sales area of192 thousands square meters
14 Wong Supermarkets
2 Wong Hypermarkets
32 Metro Supermarkets
11 Metro Hypermarkets
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Cencosud Peru Organizational Chart
General Manager(Juan Manuel Parada)
CencosudPeru
Corp- Areas
Finance.(M. Holzapfel)
FinancialBusiness
(M. Campodnico)
Real Estate(J. P. Escudero)
Logistics(T. Rodrguez)
Legal(M. Moreyra)
IT(F. Los Ros)
HumanResources(Juan C. Justo.)
Int. Auditor(P. Gamm)
CommercialFood
(A. Arruiz)
Commercial NonFood
(F. Bayly)
CommercialPlanning(O. Bonfil)
Operations(W. Ceballos)
Processes(N. Muoz)
Marketing(M. A. Merino)
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1.5351.729
1.982 1.9942.118 2.149
2.406
2.687
3.029 3.014
729 744
0
500
1.000
1.500
2.000
2.500
3.000
3.500
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 mar09 mar10
Net Sales
In 2008 we started a journey
CAGR : 12.8%
THE JOURNEY TO CENCOSUD PERUSHAREHOLDERS
VALUE
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A strategy aiming a transformation
CUSTOMER/CONSUMEREnhance client culture & innovationRevitalize the Wong brandImprove price image in Metro
Reinvent the client experiencein Wong
OPERATIONSImprove operating effectiveness& efficiency
Bring best practices from CencosudRevamp our operating model
ORGANIZATIONPolish the diamond
Redefine the Group organizationEnhance company values
TODRIVEPROFIT
TODRIVEGROWTH
FINANCIAL STRATEGYService for the Excellency
Financial FlexibilityCAPEX and OPEX discipline
Achieve Project goalsSynergies
SHAREHOLDERSVALUE
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Financial Business
Financial Business Project in Peru, operated in a
first stage through Cencosud Supermarkets, and in a second stage through aBank owned by Cencosud.
Objetives:
Providing financial solutions to customers of Cencosud formats in Per.
Making Cencosud cards the primary payment through the chain.
Strategy:
Issuing Credit Cards in order to facilitate and increase the marketing of goods
and services in the Metro Wong Supermarkets.
Capture synergies between the financial business and retail business.
Develop Business Insurance.
Deepening Customer focus: Fidelity Program and Metro Credit Card database.
Implement Retail Financial Centers, which integrate into a single space:
Cards, Insurance and New Business related .
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Cencosud best practices implemented and delivering results
Cencosud Peru corporate areas fully integrated to Cencosud S.A.
Knowledge exchange activities taking place
Global sourcing improved Peru's margins
A whole new company within a love mark aura
The Picture after 28 months
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We have an aggressive Investment PlanWe are launching our own private credit cardWe are increasing efficiencies in Working CapitalBalance in the exchange ratio (liabilities in Soles)
Invest more than 230 MM USD Improve of Market Share Increase in Same Store SalesCost Control while we are growingKeep a Solid Financial Position while Minimizing Exchange
Rate Risks.
The Competitive Situation Raises Several Challenges
OBJECTIVES
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