Wal-Mart Stores, Inc.library.corporate-ir.net/library/11/112/112761/items/236406/... · Wal-Mart...

Balance … Returns & Growth

Wal-Mart Stores, Inc.Analysts and InvestorsInternational Field Trip

March 20, 2007


2

Upcoming Key Dates at Wal-Mart

• June 1, 2007 - Annual Shareholders’ Meeting,Bentonville, AR

• October 23-24, 2007 – Annual Investors and Analysts Meeting, Bentonville, AR


3

Forward-Looking Statement

Wal-Mart includes the following cautionary statement to take advantage of the “safe harbor” provisions of the PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 for any forward-looking statements made by, or on behalf of, Wal-Mart.You are referred to Wal-Mart’s SEC filings for additional information regarding the safe harbor. The factors which could cause actual results to differ materially from predicted resultsinclude, among other things, cost of goods, competitive pressures, geopolitical conditions, labor and healthcare costs, inflation, consumer spending patterns and debt levels, currency exchange fluctuations, trade restrictions, changes in tariff and freight rates, fluctuations in the costs of gasoline, diesel fuel and other energy,accident and insurance costs, interest rate fluctuations and other capital market conditions, weather conditions, storm related damage to our facilities and customer traffic, regulatory matters and other risks set forth with the company’s filings with the SEC.


Wal-Mart Stores, Inc.NYSE: WMT

March 20, 2007


Update on Wal-Mart Stores, Inc.

Charles Holley, EVP Finance & TreasurerWal-Mart Stores, Inc.

March 20, 2007


6

Wal-Mart’s Mission Worldwide

•We save people money• so they can live better.



8

Wal-Mart Stores, Inc. – January 31, 2007

International 2,757

Argentina 13

Brazil 299

Canada 289

Puerto Rico 54

China 73

Mexico 889

UnitedKingdom335

Japan 392

Central America 413137 Costa Rica137 Costa Rica132 Guatemala132 Guatemala

41 Honduras41 Honduras40 Nicaragua40 Nicaragua63 El Salvador63 El Salvador

United States 4,022


9

WalWal--MartMart’’s Expansion Programs Expansion Program

• FY ’08Expansion

• Supercenters 265 - 270• Discount Stores 5 - 10• Neighborhood Markets 15 - 20• Sam’s Club 20 - 30• Total U.S. Expansion 305 - 330• International 320 - 330

• Total Unit Growth 625 - 660


10

Wal-Mart’s Focus: Balance

• Improve ROI• Gross margin• Expenses• Working & fixed capital

• Continue to grow via new & existing units• Expansion & acquisition• Comp store traffic & ticket


11

Consolidated Income StatementAmounts in millions except EPS

2007 2006 % CHGNet Sales $345.0 $308.9 11.7%Gross Profit $80.8 23.4% $71.3 23.1% 13.4%SG&A Expenses $64.0 18.6% $55.7 18.0% 14.8%Income Before Taxes $19.0 5.5% $17.5 5.7% 8.2%Net Income Cont. Ops. $12.2 3.5% $11.4 3.7% 6.7%

Discontinued Ops. ($0.9) ($0.2)

Net Income $11.3 $11.2 0.5% EPS (cont. ops) $2.92 $2.72 EPS $2.71 $2.68

YEAR ENDED JANUARY 31


12

FY 07 Business Segments Sales & Operating Profit vs. FY 06

11.1% 9.2%

30.2%

4.5%7.8%

21.5%

0%5%

10%15%20%25%30%35%

Wal-Mart Sam's International

Fiscal Year 2007- Continuing Operations

Sales Operating Profit


13

Revenues by Segment

Wal-MartSam'sInternational

FY2007: $345 Billion

12%

22% 66%

Wal-MartSam'sInternational

75%

20%

5%

FY1997: $100 Billion


14

Cash Flow from Operations after Paying Capex & Dividends

18.517.1

15.1

11.910.6

20.2

17.8

15.316.2

13.0

$5

$10

$15

$20

FY03 FY04 FY05 FY06 FY07

9.210.3

12.2

14.615.713.0

16.215.3

17.8

20.2

$5

$10

$15

$20

FY03 FY04 FY05 FY06 FY07

Net Cash from OpsNet Cash from Ops.. CAPEXCAPEX DividendsDividends

$US billions

Continuing Operations


15

Wal-Mart U.S. Focus on Merchandising

• Apparel

Grocery

Home

Entertainment Health & Wellness


16

ASDA Continues Overall SalesGrowth in Four Weeks

(20.0)

(15.0)

(10.0)

(5.0)

0.0

5.0

10.0

15.0

Mar 06 May 06 Jul 06 Sep 06 Nov 06 Jan 06 Feb 07 Apr 07 Jun 07 Aug 07 Oct 07 Dec 07 Jan 07

For 2 consecutivemonths, ASDA shows

strongest YoYgrowth of big 4.

Source: TNS 4-week Till Roll to Feb. 25, 2007

Feb 07


17

ASDA to Build 18 New Stores FY 08

• First ASDA Living opens in Belfast, Northern Ireland


18

Seiyu Comp Store Sales

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

FY92FY93

FY94FY95

FY96FY97

FY98FY99

FY00FY01

FY02FY03

FY04FY05

FY06


19

Seiyu’s FY 07 Initiatives

• Store remodels• Convenience: 24-hour operations• Assortment: merchandise quality & value• Supply chain efficiency• Strengthen partnership with suppliers• Environmental sustainability key focus


20

Wal-Mart China Update

• Change in leadership effective Feb. 1• Ed Chan, president & CEO, Wal-Mart China

• Invested in Trust-Mart (35% equity) • 101 stores, 34 cities, geographically complements

Wal-Mart China’s current locations• Leverage supplier relationships• Integrate systems & logistics• Run as independent parallel businesses• Continue organic growth


21

Trust-Mart’s Store Network: Perfect Fit For Wal-Mart ChinaWith 101 hypermarkets and 12 distribution centers, Trust-Mart’s

presence is strongest in China’s South and East regions. There is practically no overlap.

Chongqing (3)

Zhejiang (13)

Jiangsu (6)Anhui (2)

Hubei (2)

Beijing (4)

Liaoning (3)

Heilongjiang (3)

Hunan (1)Jiangxi (1)

Fujian (10)

Guangdong (29)

Sichuan (11)

Shaanxi (2)

Yunnan (2)

Shanghai (9)

East (32 stores)

North (10 stores)

South (41 stores)

West (18 stores)

Distribution Centers

Stores


22

Trust-Mart’s Store Network: Perfect Fit For Wal-Mart ChinaWith 101 hypermarkets and 12 distribution centers, Trust-Mart’s

presence is strongest in China’s South and East regions. There is practically no overlap.

Chongqing (6)

Zhejiang (17)

Jiangsu (8)Anhui (3)

Hubei (4)

Beijing (7)

Liaoning (8)

Heilongjiang (6)

Hunan (4)Jiangxi (3)

Fujian (17)

Guangdong (41)

Sichuan (13)

Shaanxi (3)

Yunnan (6)

Shanghai (11)

East (32 | 15 stores)

North (10 | 16 stores)

South (41 | 25 stores)

West (18 | 12 stores)TM | WMT

Distribution Centers

Trust-Mart Stores

Wal-Mart Supercenters

Tianjin (2)

Jilin (3)

Shandong (4)

Guizhou (2)

Guangxi (1)


23

Trust-Mart Has Good Store Locationsin Key Cities



March 20, 2007


Update on Americas Wal-Mart Stores, Inc.

• Craig Herkert• CEO & President of the Americas

• Wal-Mart InternationalMarch 20, 2007


Major Objectives for Wal-Mart International

• Accelerating presence in markets with greatest growth and greatest returns

• Growing comp sales and operating income by focusing on the basics

• Leveraging strengths to provide innovation and benefits to all markets

• Focusing strategically on customer needs throughout the Americas


Wal-Mart Americas

Canada289 units

Mexico889 units

Puerto Rico54 units

Brazil302 units

Argentina13 units

Central America413 units

10 Countries

30 Banners

9 Formats

1,960 Total Units*

* as of March 2007


Wal-Mart Americas Banners


Wal-Mart Americas: Sales and Store Growth

FY '02 FY '03 FY '04 FY '05 FY '06 FY '070

500

1,000

1,500

2,000

2,500Sales

Store Count


Wal-Mart Americas: Operating Income

FY '02 FY '03 FY '04 FY '05 FY '06 FY '07

Includes consolidated WMCA results from March, 2006; Sonae acquisition from Dec 2005; Bompreco acquisition from March, 2004.


Credit Programs


Banco Wal-Mart de MexicoAdelante, S.A.


Wal-Mart Mexico

• Established in 1991

• 140,000 associates

• 6 formats


Wal-Mart Mexico Projected 2007 Expansion Program

Units

125

58

15

5

4

11

32

Total


Mexico - Apparel Fast Fashion


Mexico In-Store Merchandising


Mexico - Giving is Also an Art

Provides local communities sources of income through handicrafts sold in Wal-Mart formats


Wal-Mart Brazil

• First store in 1995

• Acquired Bompreco in 2004

• Acquired Sonae in 2005

• 5 formats



Integration Brazil South


Integration Brazil Northeast


Brazil Soft Discount


Brazil Merchandise - Organic


Brazil Sustainability

Cooperative Pro-Recife


Wal-Mart Argentina


• 5,500 Associates

• 2 formats


Argentina Soft Discount


Argentina Merchandise Assortment


Wal-Mart Central America

• First year anniversary

• Costa Rica -137 stores

• El Salvador – 63 stores

• Guatemala – 132 stores

• Honduras – 41 stores

• Nicaragua – 40 stores

Store data as of Jan. 31, 2007


Central America Integration


Central America Discount Stores


Central America Pineapple Export


Central America Supply Chain

• Costa Rica: 1,500 producers

• Nicaragua: 600+ producers

• Honduras: 300+ producers

• El Salvador & Guatemala: recently incorporated markets with developmentplans

Tierra Fertil

Program


Central America Global Procurement


Wal-Mart Puerto Rico



• 4 formats


Puerto Rico $4 Generic Drugs


Amigo


Wal-Mart Canada

• Acquired in 1994


• 3 formats




March 20, 2007

59

The Retail Sector in CanadaThe Retail Sector in Canada

Diane J. BriseboisDiane J. BriseboisPresident & CEOPresident & CEOMarch 20, 2007March 20, 2007

60

Outline

Overview of the Retail Sector in CanadaChanges that Shaped the Sector Factors that Make Retail in Canada UniqueTrends Affecting Retail in Canada

61

Retail Sector in Canada$391B - Total Sales in 2006

Statistics Canada data 18%

49%

33%

Food G.M. Auto/Gas

62

Retail Sector in Canada

12.3% of Payroll Employment12% of Canadian Labour Force10% of Business Establishments2nd Largest Employer after Manufacturing6.4% increase in sales in 2006

63

The Canadian Market

Population: 31,612,8971.2 million international immigrants since 2001Canada has the highest per-capita immigration rate among industrialized countriesMore than two-thirds of Canadians live in urban areasOnly 1 in 5 Canadians living in rural areasTwo Official Languages

64

65

66

The Canadian Market

3.5 people per sq. km. in Canada.Population density in U.S. is 9 times greater and 70 times greater in the U.K.Canada: 9,976,140 (sq. km), U.S.: 9,962,091, and U.K.: 244,8202 out of 3 Canadians live near the southern border shared with the U.S.Most major urban centres have a strong ethnic population and immigrants continue to retain their ethnic identity

67

Events that Changed Retail in Canada10 foreign retailers in Canada in 1985 to more than 100 in 2005Introduction of value-added tax in 1990Deep recession from 1990 to 1994Cross-border shopping in 1991 (80 million person trips with 75% same day travel)Higher taxes to get public debt under controlRecord number of Canadian bankruptciesNew players bringing discipline and innovation to the marketInternational brands entering Canada at a faster paceNew formats offering depth of merchandise assortment and competitive pricing

68

Factors that Make Retail in Canada Unique

0 50 30 19 99 79 59 39 18 98 78 58 38 17 97 77 57 37 1

8 5

8 0

7 5

7 0

6 5

6 0

S o u rc e : S ta t is t ic s C a n a d a , B u re a u o f E c o n o m ic A n a ly s is , R B C E c o n o m ic s

C a n a d ia n l iv in g s ta n d a r d sR e a l p e r s o n a l d is p o s a b le in c o m e p e r c a p i ta ,C a n a d a a s % o f U . S . a t 8 0 c e n t p . p . p r a te o f e xc h a n g e

69

Factors that Make Retail in Canada Unique

Lower Real Disposable Income (compared to US)

Value Focused ConsumerMulti-Cultural (not a melting pot)Concentration of Population in urban marketsClose proximity to U.S.Well Informed & SavvyLots of geography and few people48% of Canadian retail in 6 markets versus 20% in the U.S.

70

Retail Trends in CanadaFormat Evolution (large to larger, one-stop shopping)Shifting investments to Customer CareMulti-cultural MerchandisingBlurring of Channels & Leveraging Private BrandsValue Selling with more Customer ExperienceAcquisitions/Mergers/New Players

71

Food for ThoughtNon-Market Issues

• Corporate Social Responsibilities• Retail Environmental Footprint• Labour Supply & Human Resources

Issues

72

Retail in Canada

THANK YOU



March 20, 2007


Wal-Mart Canada’s History and Growth

Mario PilozziPresident and CEO

Wal-Mart Canada Corp.

March 20, 2007


75

Woolco Store - 1980s


76

Wal-Mart Store - 1990s


77

Canada’s First “Sign” of Rollbacks


78

Wal-Mart Store - 1990s


79

Wal-Mart Canada


80

Wal-Mart Supercentre 2006


81

Wal-Mart Canada Store Count Since 1994

0

50

100

150

200

250

300

'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06


82

Wal-Mart Canada Associate Growth Since 1994

01020304050607080

'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06

in thousands


83

Wal-Mart Canada Customer Transactions Since 1994

050

100150200250300350400

'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06

in millions


84

Sales Growth Since 1994 - over 700%

'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06


85

Profit Growth since 1994

'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06


86

National Opportunities


87

Wal-Mart Supercentre 2006


88

Wal-Mart Canada Five-Year Plan

We will be#1 for our customers

#1 for our people#1 for shareholders



March 20, 2007


Wal-Mart CanadaTurning Strategy into Action

Violet KonkleChief Operating OfficerWal-Mart Canada Corp.

Sylvain Prud’hommeSVP, Operations

Wal-Mart Canada Corp.March 20, 2007


91

Turning Strategy into Action

One-stop shopping – Wal-Mart Supercentres are the preferred destination


92


#1 for our Customers

They tell us……we’re relevant…they shop us “most”…much greater than

80% of householdsvisit us


93


For our customers, this means delivering…


94

Meet Linda

Our high potential shopper• 35-44 years old• Mom• Life is “hectic”• Wants quality• Wants convenience

…Wants what she wantswhen she wants it


95


Crop ceiling and add customers


96


= Smart ServiceDecisions


97

Effective and Efficient Shopping

• Ease of navigation

• Clarity of message

• Rational adjacencies


98

Front-End Enhancements

Management and trained associates Service alternatives


99

Creative Solutions

“Seven nights before Christmas” shop around

the clock

50+ stores open 24 hours a day


100

Customers Love 24-Hour Shopping

“I’ve worked nights for the past 19 years. For me…it’s great.”

“There are a lot of kids in my family and I couldn’t start shopping until I finished all my exams.”

“Oh my God, first we couldn’t find a parking spot…I thought it would be dead and we’d be the only people in the entire store.”

“I left everything to the last minute, so I’m happy I can still do some shopping after the mall closed.”


101

Every Day Low Price Starts with Every Day Low Cost

Wal-Mart Canada is merchandise driven…and dependent on execution.


102


Every Day Low Cost depends on execution:

• Merchandising programs

• Customer expectations

• Regulatory compliance


103

Refining Processes to Reduce Costs

Every Day Low Cost = Consistent and Disciplined Process

• Investment in process change• Smart structure• Store-level training• Productivity• Merchandise flow


104

The Value of “Ease”

Measuring and refining improves performance and productivity

• For customers• For associates• For shareholders


105


Building winning teams.Get, keep, grow people to support growth.



March 20, 2007


Wal-Mart Canada’s People

Mary-Alice VuicicVice President, PeopleWal-Mart Canada Corp.

March 20, 2007


108

Our Best Source of “People”

Baby Boomers Millennials New Canadians Women


109

What Our Key Generations Want

Supportive manager

Interesting work

Work-life flexibility

Learning opportunities

Social interaction

A “good” company


110

Diversity in Our Stores


111

Better Female Representation

0

10

20

30

40

2005 2006 2007

0

10

20

30

2005 2006 2007

Female executives up 200%

Female store management

up nearly 200%


112

Reputation as “Best Employer”



March 20, 2007


Wal-Mart Canada Putting Strategy on Our Shelves

Mike Huffaker Chief Merchandising Officer


Jim ThompsonSVP, Merchandising

Wal-Mart Canada Corp.March 20, 2007


115

Putting Strategy on Our Shelves

• Clear value proposition• Newness, change and innovation in core

businesses• Store of the community• All the services of a one-stop shopping

destination• Sustainability


116

Wal-Mart: Canada’s Price Leader


117


QUALITY

*Fine foods shop

* *Youth apparel shop

PRICE


118



119



120



121


Change this out


122

Core Categories

Health & Beauty

Home

Apparel

Electronics Food


123

Apparel


124

Apparel – Private Brands

Fashion with affordable European-influenced style and design for the

Canadian family

Junior’s attitude and style, anchored with jeans, hoodies and tees for

school or hanging out

Classic, traditional essentials like polos, cardigans and capris for

work or play

Fitness-influencedstyling, with form,

function and great prices

Stylish, comfortable weekend wear combining comfort and

quality at a great price


125

George Fashion Show


126

Electronics


127

Electronics


128

Electronics


129

Home


130

Health and Beauty


131

Your Fresh Market


132

Wide Selection of Private Labels


133

Private Labels


134

Store of the Community


135



136



137

Building our Business

E-CommerceNewness & Innovation

Financial Services Rollbacks


138

Licensees


139

Sustainability


140

Sustainability

One product’s waste reduction:

• 28 metric tonnes of paper

• 40 metric tonnes of plastic


141

Merchandise Excitement



March 20, 2007


Communicating to CanadiansMarketing Touch Points

Mike DombrowDirector, Marketing



144

Marketing Speaks To

Linda Diverse

Canadians

Empty

Nesters


145

It’s True!


146

It’s True!


147

Linked to the Canadian Identity


148

“Fresh” Communication


149

Shopcast TV: Targeted Messages


150

Mixing Marketing for GEORGE

Fashion Show

The “Industry”Marketing and Media


151

Marketing our Commitments

INSERT CMN SCREEN SHOT FROM ALFIO

To Customers To Canadians


152

Marketing



March 20, 2007


Wal-Mart Canada’s Reputation & Commitment to Stakeholders

Andrew Pelletier Vice President, Corporate Affairs

Wal-Mart CanadaMarch 20, 2007


155

Independent Research on Reputation

Ryerson University Study, 2002

Decima Research Survey, 2004

Synovate Research Survey, 2006


156

Ryerson University Study

“It is difficult to make the case that a Wal-Mart store actually puts other retailers out of business.”

- Ryerson University, 2002


157

Decima ResearchMajority of small business owners:

“Big box retailers like Wal-Mart do not compete with us.”

Decima Research , 2004

53% do notcompete26% no realimpact5% positiveimpact16% negativeimpact


158

Synovate Research

66% say WMT is a good corporate citizen

80% glad WMT came to their community

Research conducted 2006 66% said WMT takes care of its associates


159

Lobbied, Petitioned, Contacted

Since 2000, more than 100 Canadian communities have contacted Wal-Mart to have a store built in their town.

Alberta B.C. Saskatchewan Quebec Nova ScotiaCold Lake Terrace Weyburn Simcoe Midland St. Georges de Beaux Digby

Brooks Fort St. John Kindersley Lanark Toronto (Jane & Finch) Ville de Paspebiac YarmouthBonnyville Salmon Arm Downtown Regina Burlington Bolton Cowansville Glace Bay

Crowsnest Pass Maple Ridge Creighton Waterloo Sault Ste. Marie Masson (40 minutes from Hull) LawrencetownGrimshaw Richmond Tisdale Stratford Emo Ville Notre Dame du Lac WindsorMcLennan Pitt Meadows Milfort London (downtown) Schreiber BridgewaterCamrose Prince George Malva Marathon North Cowichan

Slave Lake Campbell River Humboldt Rexdale Fort Frances New BrunswickOnoway Dawson Creek Nepean Amherstburg Newcastle Newfoundland

Whitecourt Seashelt Richmond Hill Wingham Bathurst Harbour GraceGrande Prairie Trail Manitoba St. Catharines (downtown) Keswick Dalhousie Happy Valley – Goose Bay

Edson Barriere Winnipeg (downtown) Walkerton Wallaceburg Grand FallsHigh Prairie Williams Lake The Pas Cobourg Cochrane St. Stephen

Rocky Mountain House Squamish Altona Kirkland Lake WoodstockDevon North Cowichan Brampton South St. Leonard

Beaumont Houston Elliott Lake Acadian PeninsulaFort Nelson Wasaga Beach

Collingwood

Ontario


160

New Market Entry – Guelph, ON


161

Corporate Social Responsibility

CommunityInvolvement

Sustainability Diversity

PeoplePrograms

EthicalSourcing

CorporateSocial

Responsibility


162

Wal-Mart Good Works


163

Sustainability

To create zero waste.

To sell products that sustain our resources

and environment.

To be supplied 100% by

renewableenergy.


164

Corporate Values Report, 2007

* Note: concept design



March 20, 2007


Mario PilozziPresident and CEO


Building a Chain of Balance

March 20, 2007


167

Our Focus for the Future

Turning strategy into action.

Putting strategy on our shelves.

Communicating strategically to Canadians.


168

Building a Chain of Balance

Discount Store Supercentre SAM’S CLUB


169

SAM’S CLUB

• First four (2003)

• Two more (2004)

• Strong business membership

• Strong team


170

Discount Store

• Smart investment where appropriate in markets big and small

• Prototype:

60,000 – 135,000 s. ft.


171

Supercentre

• Smart investment wherever possible

• 50% bigger than discount stores

• Prototype:

102,000 – 215,000 sq. ft.


172

2007 Growth Plans

• 5 brand new discount stores

• 3 relocations of existing discount stores

• 10 discount stores expand to Supercentres

• 1 discount store relocated into Supercentre

• 10 new Supercentres



March 20, 2007

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