Mexican Supermarkets & Grocery Stores Industry Report

Mexican Supermarkets & Grocery Stores
Industry Report

July 2018

Food Retail Report Mexico 2018

Washington, D.C.



Mexico City



Monterrey

Overview of the Mexican Food Retail Industry

•

The Mexican food retail industry consists in the distribution and sale of products to third parties; it also generates income from developing and leasing the real estate where its stores are located

•

Stores are ranked according to size (e.g. megamarkets, hypermarkets, supermarkets, clubs, warehouses, and other)

According to ANTAD (National Association of Food Retail and Department Stores by its Spanish acronym), there are 34 supermarket chains with 5,567 stores and 15 million sq. mts. of sales floor in Mexico

••••

Estimates industry size (as of 2017) of MXN$872 billion Industry is expected to grow 8% during 2018 with an expected investment of US$3.1 billion ANTAD members approximately invested US$2.6 billion and created 418,187 jobs in 2017 7 states account for 50% of supermarket stores: Estado de Mexico, Nuevo Leon, Mexico City, Jalisco, Baja California, Sonora and Sinaloa

•

Key players in the industry include, Wal-Mart de Mexico, Soriana, Chedraui and La Comer. Other regional competitors include, Casa Ley, Merza, Calimax, Alsuper, HEB and others

•••

Wal-Mart de México has 5.8 million of m² of sales floor, Soriana 4.3 m², Chedraui 1.2 m² and La Cómer 0.2 m² Wal-Mart de México has a sales CAGR (2013-2017) of 8.73%, Soriana 9.98% and Chedraui 9.26% Wal-Mart de México has a stores growth CAGR (2013-2017) of 3.30%, Soriana 5.75% and Chedraui 5.82%

Number of Supermarkets by State in Mexico

Data: DENUE-INEGI Total: 6,129 Supermarkets

372
352
243
691

462

80
244
327
512
95

69
229

50
66
104
218
56
130

133
102
80
380

48
29
173
161
286

78
51

States with: More than 200 supermarkets

93

12
7

98

Between 100 and 200 supermarkets Less than 100 supermarkets

117

13

Key Players – 2017 Revenue

Number of Stores - ANTAD

Sales Floor - ANTAD

MXN Million
Million m²

$466

5,733

15.0

14.7

5,565
5,428

5,410

14.4
14.2

5,183

13.8

4,954

13.5

$154
$67
$17

2012 2013 2014 2015 2016 2017

Sources: S&P Capital IQ, Profeco, INEGI, ANTAD

Food Retail Industry – Leading Companies in Mexico

Enterprise value of US$41,975 million, representing implied multiples of 15.4x (EBITDA) and 1.5x (revenue)

•

Present in six countries: Costa Rica, El Salvador, Guatemala, Honduras, Mexico and Nicaragua

••

2,369 units in Mexico and 787 in Central America as of March 2018 2017 annual sales in Mexico of MX$465,886 million, with an EBITDA margin of 15.2%

•

Solid sales growth rate with a 8.73% 2013 – 2017 CAGR

•••

Present in 277 municipalities in the 32 Mexican states 824 units as of March 2018 2017 annual sales of MX$153,637 million, with an EBITDA margin of 8.1%

•

Solid sales growth rate with a 9.98% 2013-2017 CAGR

•••

Present in Mexico and in the United States 260 units in Mexico and 59 in the United States as of March 2018 2017 annual sales in Mexico of MX$67,027 million, with an EBITDA margin of 6.3%

•

Solid sales growth rate with a 9.26% 2013-2017 CAGR

Food Retail Industry – ANTAD Members

Sources: S&P Capital IQ, ANTAD

Food Retail Industry – Current Market Situation

The following section presents financial information of publicly traded companies in the food retail industry in Latin America and in the world

Comparable Public Companies – Global

Average EV / EBITDA

7/3/2018

Revenue

US$M
EBITDA Margin
Market Cap. US$M
Enterprise Value
Price

Company

Country

EV /

7/3/2018

2014

8.5x 10.1x 5.4x 7.6x 6.6x 7.6x 16.6x 10.8x 11.3x 5.0x 14.3x 6.5x 6.5x 10.6x 8.6x 6.3x 9.1x 8.3x 7.6x NR

2015

7.8x

2016

7.8x 8.8x 8.7x 7.8x 7.8x 7.6x 13.0x 6.2x 10.4x 5.4x 9.5x 9.3x 11.7x 11.3x 12.1x 7.7x 9.3x 9.7x 7.1x NR

2017

8.6x

EBITDA

Revenue

Wamart, Inc.

USA

AUS NLD USA JPN FRA HKG HKG RSA GBR RUS NLD GBR CHL CAN JPN KOR FIN
$84.44 $22.60 $23.64 $28.70 $20.17 $16.12 $8.85
$505,491 $44,339 $76,325 $122,662 $78,617 $96,651 $11,289 $15,725 $11,761 $39,472 $19,593 $23,628 $24,372 $17,149 $10,167 $6,159
6.5% 6.3% 6.5% 4.0% 5.6% 4.5% 5.1% 7.1% 7.2% 4.1% 7.4% 6.9% 4.7% 6.1% 7.2% 18.9% 6.4% 3.9% 6.3% 3.5%
$249,169
$29,603 $27,935 $22,865 $16,930 $12,296 $11,971 $12,208
$9,094 $9,230 $7,444 $6,952 $7,762 $7,078 $7,686 $5,990 $6,215 $5,940 $5,396 $4,466
$290,665
$30,694 $30,806 $36,446 $35,634 $25,524 $12,639 $10,791
$9,199

8.9x

0.6x

0.7x 0.4x 0.3x 0.5x 0.3x 1.1x 0.7x 0.9x 0.3x 0.5x 0.4x 0.4x 0.7x 0.9x 1.3x 0.6x 0.5x 0.6x 0.2x

0.6x 0.5x

Woolworths Group Limited Koninklijke Ahold Delhaize N.V. The Kroger Co.

8.1x

10.5x

7.6x
11.7x 6.5x 6.8x 8.4x 6.0x NR
7.4x

8.9x

6.6x

Aeon Co., Ltd.

8.2x

7.8x

Carrefour SA

8.6x

7.4x

Dairy Farm Int. Holdings Limited Sun Art Retail Group Limited Shoprite Holdings Limited J Sainsbury plc
13.7x 7.3x
NR

$1.28

7.9x

9.7x

12.0x 7.6x 7.0x 6.2x 8.5x 11.5x 10.9x 7.0x 9.5x 12.5x 10.0x 5.0x

8.7x 8.5x

$16.40 $4.20
10.7x 5.1x
11.3x

6.6x

$11,743

$9,148

Public Joint Stock Company Magnit

X5 Retail Group N.V. Wm Morrison Supermarkets PLC Cencosud S.A.
$73.05 $25.60 $3.31
10.6x 7.5x
10.2x

9.1x

$10,071

$9,086

10.7x

10.8x 11.7x 7.9x
9.2x

$2.47

$11,535

$8,606
12.8x 10.8x 6.9x

Metro Inc.

$33.80

$59.86 $222.94 $61.34 $20.25 $12.30

Lawson, Inc.

$7,930

E-MART Inc.

$15,299

$12,974 $13,745 $45,697

$9,358

10.1x

10.3x 5.5x
9.9x

Kesko Oyj

$6,026

12.0x

10.5x 7.2x
Companhia Brasileira de Distribuição Metro AG
BRA GER
$7,134

$7,646

NR

NR: Not Relevant

Mean Median

Comparable Public Companies – Latin America

Average EV / EBITDA

7/3/2018

Price

Revenue

US$M
EBITDA Margin
Market Cap. US$M
Enterprise Value

Company

Country

EV /

7/3/2018

2014

13.8x 7.6x

2015

14.7x 5.5x

2016

15.2x 7.1x

2017

14.0x 10.5x 8.8x

EBITDA

Revenue

Wal-Mart de México, S.A.B. de C.V. Companhia Brasileira de Distribuição Organización Soriana, S.A.B. de C.V. InRetail Perú Corp.
MEX BRA MEX PER COL
$2.63 $20.25 $1.75
$32,207 $13,745 $8,340
9.8% 6.3% 8.1% 9.9% 6.1%
$45,990
$5,396 $3,151 $2,557 $2,477
$41,975
$7,134 $4,323 $4,085 $8,759
15.4x 10.0x 6.9x
1.5x 0.6x 0.6x 1.5x 0.4x
10.3x 13.8x 17.0x

9.1x

11.1x

11.2x 11.3x
$25.00 $5.53

$2,669

10.6x

11.7x
11.0x 8.0x
15.5x

7.4x

Almacenes Éxito S.A.

$20,292

Grupo Chedraui, S.A.B. de C.V.

MEX

ARG
$2.35 $0.93
$5,261 $1,772
6.3% 1.9%
$2,264
$465
$2,423
$558
10.6x 9.2x
10.6x 8.2x
9.8x 9.2x
7.5x 14.4x

Mean

7.8x NR
0.5x 0.5x

0.8x

Sociedad Anónima Importadora y Exportadora de la Patagonia

NR: Not Relevant

10.5x

Median

8.9x

0.6x

Source: S&P Capital IQ

Global Transactions – Food Retail Industry

Size

EV/

Date

Target

Country

Description

Buyer

US$M Revenue EBITDA

Apr-18 Apr-18 Feb-18 Jan-18 Aug-17 Feb-17 Feb-17 Dec-16 Nov-16

Fiesta Mart, L.L.C.

USA

POL CHN HKG USA ROM JPN

Minisupers

Grupo Comercial Chedraui

MAXIMA GRUPE, UAB
$265 $336

-

Emperia Holding S.A.

Supermarkets

Supermarkets chain Hypermarkets

11.9x

0.4x

1.4x 0.4x 0.9x
-
Yonghui Superstores Co., Ltd. Sun Art Retail Group Limited Whole Foods Market, Inc. S.C. Profi Rom Food S.R.L. Lawson, Inc.

Linzhi Tencent Tech. Company Ltd.

$637

-

Monicole Exploitatie Maatschappij BV; Taobao China Holding Limited
$2,907 $14,621
$562
5.9x
Organic food supermarket Supermarkets chain Convenience stores Supermarkets and hypermarkets Owns hypermarkets and supermarkets Supermarkets and hypermarkets Supermarkets

Amazon.com, Inc.

10.3x

Mid Europa Partners LLP Mitsubishi Corporation
-
$3,292
$122

7.7x

1.6x

-

Lianhua Supermarket Holdings Co., Ltd.

Kesko Food Rus
CHN FIN
Shanghai Yiguo E-Commerce Co., Ltd. Lenta Limited
-

$172

-

Nov-16 * Renrenle Commercial Group Co., Ltd. Jul-16 Groupe Delhaize SA May-16 * Tienda Inglesa
Big C Supercenter Public Company Ltd.
CHN BEL URU THA VIE

Undisclosed buyer

$123

-

0.2x

0.5x
-
Koninklijke Ahold Delhaize N.V. Klaff Realty, LP
$13,588
$140
8.6x

Supermarkets

-

May-16 Apr-16 Mar-16 Jan-16 Jan-16 Dec-15 Oct-15 Oct-15 Oct-15 Sep-15 Aug-15
Operates hypermarkets Hypermarkets and supermarkets Operates hypermarkets Minisupers
BJC Supercenter Company Limited The Central Group; Nguyen Kim BJC Supercenter Company Limited Kenan Investments S.A. Wumei Holdings, Inc.
$2,333 $1,145 $1,881
$235

-

1.7x

1.7x 1.6x 0.7x 0.2x
-

Big C Vietnam

-

Big C Supercenter Public Company Ltd. Migros Ticaret A.S.
THA TUR CHN FRA AUT KOR USA ESP FRA
-
11.5x

Wumart Stores Inc.

Supermarkets

$717

6.4x

Segisor, S.A.

Supermarkets

Almacenes Éxito S.A.

$1,536

$225
-
OBI Group Holding SE & Co.KGaA; Supernova Management GmbH
70 Hipermercados "Baumax" Homeplus Co., Ltd.

Hypermarkets

-

Temasek Holdings Ltd,CPP Investment Board,entre otros
Owns and operates hypermarkets Supermarkets
$6,475
$146

9.1x

0.8x

-

24 Supermercados y otros activos

Portafolio Caprabo Blue Box Libertad S.A.
The Stop & Shop Supermarket Co LLC Meridia Capital Partners SGEIC, S.A. Almacenes Éxito S.A.
-

-

2 Supermarkets

$109

-

Hypermarkets

$293

11.3x

0.5x

* = Announced Transaction

NR: Not Relevant

Mean

9.2x

9.1x
0.9x

0.7x

Median

Latin American Transactions – Food Retail Industry

Size

EV/

Date

Target

Country

Description

Buyer

US$M Revenue EBITDA

Jun-18 Jan-18 Sep-16 Jun-16 Jan-15
Walmart Brasil Ltda. Casa Ley, S.A. de C.V.

BRA

Supermarkets and hypermarkets

Owns and operates supermarkets Supermarkets chain
Advent International Corporation Tenedora CL del Noroeste, S.A. de C.V. L Catterton
$250 $345 $70

-

MEX

BRA MEX MEX
-

St. Marche Ltda

-

-
-
Comercial Mexicana Comercial Mexicana
Hypermarkets and supermarkets Hypermarkets and supermarkets
Tiendas Soriana, S.A. De C.V. Tiendas Soriana, S.A. de C.V.
$159
$2,375
1.8x

0.7x

9.2x

* = Announced Transaction

NR: Not Relevant

Mean

9.2x

9.2x
1.2x

1.2x

Median

Source: S&P Capital IQ

Global Representative Transactions – Food Retail Industry

Deal Summary
Buyer
Target

On June 16, 2017, Amazon.com, Inc., a company focused on e-commerce and cloud computing services, announced the acquisition of Whole Foods Market, Inc., an organic food supermarket chain, for US$14,620 million, representing implied multiples of 10.3x (EBITDA) and 0.9x (revenue)

On June 24, 2015, Koninklijke Ahold N.V., a Dutch supermarket company, announced the acquisition of Groupe Delhaize, S.A., a Belgian supermarket chain, for US$13,588 million, representing implied multiples of 8.6x (EBITDA) and 0.5x (revenue)

On September 07, 2015, Temasek Holdings, CPP Investment Board and MBK

Partners, government and private funds, announced the acquisition of Homeplus Co., Ltd., hypermarkets in South Korea, for US$6,475 million

On September 16, 2016, Mitsubishi Corporation, a Japanese conglomerate that operates in various industries, announced the acquisition of an additional 16.6% stake of Lawson Inc., a Japanese convenience store chain, for US$3,291 million, representing implied multiples of 7.7x (EBITDA) and 1.6x (revenue)

On July 29, 2015, Almacenes Éxito S.A., a Colombian supermarket company, announced the acquisition of 49.97% of Segisor, S.A., subsidiary of Casino,

Guichard-Perrachon S.A., a French company of food retail stores, for US$1,536 million

Segisor, S.A.

On April, 29, 2018, “El Super” subsidiary of Grupo Comercial Chedraui, a Mexican supermarket chain, announced the acquisition of Fiesta Mart, L.L.C., an American food retailer, for US$265 million to ACON Investments, L.L.C., representing implied multiples of 6.6x (EBITDA) and 0.2x (revenue)

Latin American Representative Transactions – Food Retail Industry

Target

Buyer

Deal Summary

On January 28, 2015, Tiendas Soriana, S.A. de C.V., a Mexican chain of food retail stores, announced the acquisition of Comercial Mexicana, a Mexican food retail company, for US$2,181 million, representing implied multiples of 9.2x (EBITDA) and 0.7x (revenue)