La Comer S.A.B. De C.V
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L A COMER S.A.B. DE C.V. March, 2016 Disclaimer “The following material is submitted by way of general information regarding La Comer, S.A.B. de C.V., “La Comer” , as it stands to date. Said information is presented in a summarized fashion and is not intended to be comprehensive. Nor does it constitute a recommendation for potential investors. This presentation is strictly confidential and shall not be divulged to any other person. No representation or guarantee, either expressed or implied, is intentional, and its exactness, precision or comprehensive information herein presented shall not be emphasized. This presentation may contain declarations that express the expectations of management regarding future events or results in lieu of historic events. These forward-looking declarations imply risk and uncertainty that may cause the real results to differ materially from those forecast, and La Comer cannot ensure that said declarations will prove to be correct. These risks and uncertainties include factors related to the Mexican economy, which in turn may show volatility and may be adversely affected by factors pertaining to other countries, related to the business of retail sales, that by its very nature is cyclical and linked to the highly competitive industry of which La Comer is a part and in which it operates. For additional information regarding factors that may cause La Comer’s real results to differ from the expectations herein presented, please refer to La Comer reports on file at the Mexican Stock Exchange (Bolsa Mexicana de Valores). This presentation does not constitute a recommendation, invitation, and request or offer to tender or purchase securities: neither this presentation nor anything herein comprised shall be considered grounds for a contract or any similar commitment.” 2 Mission Food retail company that best serves medium and high socioeconomic level in the country, offering the best shopping experience in the market based on quality, customer support and service. 3 Corporate Structure Listed on the Mexican Stock Exchange 43% float Major Shareholders Free Float 57.27% * 42.73%* *As of January 2016 Comercial City Fresko Hipertiendas Metropolitanas * * 3 Real Estate Personnell Services La Comer Summary 54 stores (246,224 m 2) • 6 City Market • 10 Fresko • 12 Sumesa • 26 La Comer After conversion program 70% of the stores located in Mexico City metropolitan area Real Estate: • 46 units (31 stores +15 additional assets) • 364 commercial spaces (+85,000 m 2 leasing area); Net income of $129 million pesos, 10% EBITDA Approximately 8,000 employees. Brands and logos : Comercial Mexicana, La Comer, City Market, Fresko, Sumesa, Golden Hills, Farmacom, Pet’s Club, “Monedero Naranja” and Pelican logo Licences : Comercial Mexicana brand and pelican logo are granted for two years Marketing Campaigns: “Miércoles de plaza”, “¿Vas al Super o a La Comer?”, Carnisalchichonería Distribution Center: Mexico City, Vallejo (24,000 m 2); capacity: 80 to 100 stores 5 Strategy • Differentiation: La Comer is a different option, – Remodel our stores to our distinctive formats – Comfort and convenience shopping – Turn our stores into a "one stop shop“ – Competitive fair prices • Value proposition: La Comer will offer, – Quality of goods – Quality and unmatched reputation of freshness and superiority of our perishable food division – Focus in organic and healthy natural food – Variety of products and brands – Personalized and expert attention for our clients – Total supply availability – New and innovative products • Focused on medium and high socioeconomic levels: – Underserved segment – We do better – Resilient to crisis – Potential profitability Formats La Comer´s formats will show common and consistent elements, to reinforce image and create a shopping experience. Concept Wide range of gourmet products as wines, cheeses, meat, imported groceries, and organic products. Exclusive product agreements with international brands. Sophisticated atmosphere and high quality service. Prepared foods for consumption in and out of the store Specialized departments of prepared foods as tapas, seafood, pizza, chocolate, ice cream, coffee and cakes, 6 stores Sales area of approximately 3,000 sq. mts. Located in high income areas 8 Concept Supermarket with a variety of special products by region (kosher, organic). Excellent quality of perishables, emphasizing freshness. It is designed especially for an agile and quickly purchase, providing customers also with quality products. 10 stores Sales area of about 1,500 to 4,000 square meters. It will be located in areas where it can take advantage of vertical growth (buildings) of large cities. 9 Concept In addition to perishable and grocery products, this format will offer general merchandise and household appliances as tableware, plastic, among others. La Comer will offer greater range and variety of products . Special departments of prepared food, fine pastry and coffee shop. Can be found alone or together with shopping centers. Sales area of 4,000 to 7,500 square meters 10 La Comer Selected Financial Data 4th Quarter Dec-13* % Dec-14* % Dec-15** % 2015** % Net sales 12,071 100.0 13,078 100.0 14,041 100.0 3,545 100.0 Cost of sales 9,078 75.2 9,781 74.8 10,531 75.0 2,752 77.6 Gross profit 2,993 24.8 3,297 25.2 3,509 25.0 793 22.4 Sales expenses 1,969 16.3 2,166 16.6 2,330 16.6 538 15.2 Operating income 981 8.1 1,077 8.2 1,174 8.4 255 7.2 EBITDA 1,228 10.2 1,378 10.5 1,465 10.4 401 11.3 Inventories 1,369 1,639 1,454 - Trade Payables 1,626 1,678 836 - *Million pesos. Proforma Financial information, La Comer Prospectus, BMV **Millions pesos. Preliminar internal proforma financial information 11 2016: Transition year 2016 sales will be affected by the following factors: 1) Absence of the annual “ Julio Regalado ” campaign 2) Temporary and/or partial closures for store remodeling program (will represent a significant increase in sales on following years) 3) Store cuts in some exceeded size stores, to be dedicated to commercial spaces 4) Getting out of the sale of clothes Margins will be affected by a smaller scale operation 1) Direct costs of merchandise 2) Lower logistical efficiencies 3) Lower operating leverage over certain fixed expenses 4) Pre-operating costs of new and remodeled stores 12 La Comer Financial Statement Balance Sheet Million pesos as of December 2015 Assets Liabilities and Stockholders' Equity Cash and temporary investments 3,077 Trade payables 836 Clients 85 Provisions 169 Other accounts and notes receivable 28 Other liabilities 1,374 Inventories 1,454 Taxes payable 188 Related parties 118 Total current liabilities 2,567 Creditable taxes 761 Advance payments 164 Defered Income taxes 43 Total current assets 5,687 Employee benefits 66 Non-current Assets Total Liabilities 2,676 Intangible assets 7,350 Other non-current assets 1,049 Capital Stock 19,782 Deferred asset tax 58 Legal reserve 11 Investments Properties 16 Accrued net income 797 Property, plant and equipment (Net) 9,107 Total Stock Holders' Equity: 20,590 Total Asset 23,267 Total Liabilities and Stockholders' Equity 23,267 Note: Preliminary internal pro-forma financial information 13 CAPEX 2016 Investment Program Concept # units Million pesos New stores 6 1,037 Conversion & remodeling 12 1,107 New image to La Comer 74 Maintenance 135 Real estate business 3 117 Distribution Center 30 Total $ 2,500 14 Store Openings La Comer, will initiate an aggressive plan to open new stores giving priority to the formats Fresko and City Market to increase sales participation of these formats. 2016E 2017E 2018E 2019E 2020E 2021E 2022E Openings 6 7 8 9 10 11 12 City Market 3 1 6 2 3 3 3 Fresko3 4 1 5 6 7 8 LaComer- 2 1 2 1 1 1 Total units at end of period 60 67 75 84 94 105 117 City City Market Market 13% 30% La Fresko Fresko Comer 8% 30% Sumesa La 71% 8% Comer 40% 0% 15 .