Walmart International Footprint Customers
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1 Wal-Mart Stores, Inc. (NYSE: WMT) 2012 International Conference for the Investment Community Thursday, April 12, 2012 2 2012 International Conference for the Investment Community • Meeting is being video webcast – French audio translation available • All presentations, including those completed at conferences, are archived at www.walmartstores.com/investors • Upcoming dates in 2012: – Thurs, May 17: FY13 Q1 Earnings – Fri, June 1: Annual Shareholder’s Meeting, Fayetteville, AR – Thurs, August 16: FY13 Q2 Earnings – Tues-Wed, October 9-10: Annual meeting for the investment community, Bentonville, AR 3 Our agenda: Thursday, April 12, 2012 Toronto Time Business Topic 7:50 am – 8:20 am Walmart International Overview 8:20 am – 8:40 am EMEA Overview 8:40 am – 8:55 am Q&A, Walmart International 8:55 am – 9:55 am Walmart Canada Overview 9:55 am – 10:15 am Q&A, Walmart Canada 10:15 am – 10:30 am Break Breakout Sessions on Walmart Canada •Customer Insights & Retail Strategy 10:30 am – 12:30 pm •Leverage & Productivity •Merchandising Growth Strategy 12:30 pm – 5:45 pm Store Tours 4 Forward looking statements will be made during this meeting Walmart includes the following cautionary statement so that any forward-looking statements made by, or on behalf of, Walmart will enjoy the safe harbor protection of the PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, as amended. Such forward-looking statements, which will describe our objectives, plans, goals, targets or expectations, can be identified by their use of words or phrases such as “anticipate,” “estimate,” “expect,” “forecast,” “plan,” “projected,” “will be” or words or phrases of similar import. Statements of our expectations for FY13, and any subsequent fiscal years are forward-looking. Walmart’s actual results might differ materially from those expressed or implied in a forward-looking statement as a result of factors including, among others, recessionary economic environment, cost of goods, competitive pressures, availability of credit, geopolitical conditions and events, labor and healthcare costs, inflation, deflation, consumer spending patterns, debt levels and credit access, currency exchange fluctuations, trade restrictions, tariff and freight rate changes, fluctuations in fuel, other energy, transportation and utility costs, health care and other insurance costs, accident costs, interest rate fluctuations, other capital market conditions, weather conditions, storm-related damage to facilities, customer traffic, factors limiting our ability to construct, expand or relocate stores, regulatory matters and other risks set forth in our SEC filings. Our most recent Annual Report on Form 10-K and our other filings with the SEC contain more information concerning factors that, along with changes in facts, assumptions not being realized or other circumstances, could cause actual results to differ materially from those expressed or implied in a forward-looking statement. Walmart undertakes no obligation to update any forward-looking statement to reflect subsequent events. 5 6 Doug McMillon President and CEO, Walmart International Walmart International footprint Customers: Sales: Countries: Units: 94 million / week $126 billion 8 26 5,651 Walmart International priorities Growth Leverage Returns Multi-dimensional Powered by Lower costs with Walmart less inventory 9 Disciplined growth in four dimensions Comp sales New stores This year’s sq ft projection Two top priorities: UK, Canada Being great merchants & Africa 22% 46% Latin Everyday low price (EDLP) Asia 32% America eCommerce Strategy for acquisitions Existing markets Acquire capabilities Selectively enter new markets 10 Driving comp store sales 11 Ongoing EDLP journey Planning Transition Delivering China India UK Japan Argentina Brazil South Africa Chile Canada Mexico & CAM 12 New stores drive aggressive growth New Store Square Footage Growth (Million sq. ft.) 30-33 311-14 23 21 20 203 14 +108-111 million sq. ft. 281 ~7.5% CAGR between 257 FY09 and FY13 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013E FY2013E 13 Customer behavior has changed Ecommerce Video 2:10 14 Serving customers in new ways 26 e-commerce sites 4 mobile apps 7 facebook pages M&A Priorities Expand within existing markets Acquire capabilities Selectively evaluate & enter in new markets Global leverage is driving value 17 Global leverage is driving value Business Logistics Procurement Shared Services Process Information Technology 18 18 Merchandise flow In-Store Supply Chain Labor Productivity Replenishment Backroom Modular Integrity Front End 19 Merchandise flow In-Store Supply Chain Labor Productivity Replenishment Backroom Results Front End Modular Integrity - Days-on-hand - Wage expense - On-shelf availability - Front-end productivity 20 Front End process systems productivity 21 On-shelf availability 22 On-shelf availability issue notification diagnosis sales recovery 1 accurate shelf label? modular shelf 2 capacity accurate in system? sales floor 3 and backroom quantity? 23 Improving returns Operating income International ROI goal improvement Risk adjusted +300- hurdle rates 400 bps Investment by market, store format New market prioritization and entry strategies Portfolio risk and return correlations FY 12 FY 17 24 Walmart International footprint Customers: Sales: Countries: Units: 94 million / week $126 billion 25 26 5,651 Walmart International business update Mexico & C. America •Strengthen EDLP •Aggressive organic growth •Multi-format capability 26 Walmart International business update Brazil •Lower cost structure •Deliver EDLP •Expand eCommerce 27 Walmart International business update Chile •Improved assortment •New store/format expansion •Expand eCommerce 28 Walmart International business update Argentina •New store/format expansion •Improve productivity 29 Walmart International business update China •Improved merchandising •Aggressive organic growth •Compliance/reputation 30 Walmart International business update Japan •EDLP •EDLC •New store growth 31 Walmart International business update India •Expand C&C •Refine retail •Improve productivity 32 Talent and sustainability are key enablers 33 High performance talent Culture Merchant Driven Diversity & Talent Base Inclusion 34 Lead on social & environmental issues Women Sustainable Ag Sustainability Increase sourcing Small farmer programs 20% green house gas Farms & factories Advance palm oil, reduction Train for first job seafood, & Increase implementation sustainable beef of LED & closed Philanthropic giving refrigeration technology 35 Key takeaways Disciplined, multi-dimensional growth Comp store sales are a priority Powered by Walmart Returns will improve Reduce SG&A expenses Improve inventory management 36 David Cheesewright President and CEO, EMEA Region Walmart EMEA & Canada 544 stores 175,000 associates 18 million customers per week 4 formats 333 stores 330 stores 90,000 associates 30,000 associates 8 million customers per week 8 formats 2 formats Store counts as of Jan 31, 2012 for Walmart Canada and Asda, Dec 31, 2011 for Massmart Regional priorities • Deliver profitable growth • Develop and deliver new business opportunities – M&A (expand existing, acquire capability, new) – Integration • Drive leverage opportunities • Develop high performance talent • Ensure strong alignment, control and governance Performing strongly… Walmart performance vs. market (12 weeks ending March 31st) Kantar Nielsen Source* * Based on Massmart Interim Results, 26 weeks to 25 December 2011 & Stats SA Retail Trade Sales July to December 2011 Regional priorities • Deliver profitable growth plans • Develop and deliver new business opportunities – M&A (expand existing, acquire capability, new) – Integration • Drive leverage opportunities • Develop high performance talent • Ensure strong alignment, control and governance Leverage U.S. International Regional Leverage Regional priorities • Deliver profitable growth plans • Develop and deliver new business opportunities – M&A (expand existing, acquire capability, new) – Integration • Drive leverage opportunities • Develop high performance talent • Ensure strong alignment, control and governance Sub-Saharan Africa – A huge opportunity Large market with strong growth Fastest growing & youngest population Emerging middle class Rapid urbanization Large informal trade But… there are challenges and complexity Massmart overview Massmart Holdings Divisions Shared Services Sales: USD 3,936mm Channel Massdiscounters Masswarehouse Massbuild Masscash Sales: USD 977mm Sales: USD 975mm Sales: USD 530mm Sales: USD 1454mm 122 stores 16 stores 84 stores 108 stores Wholesale Retail Builders Builders Builders Food/ Game DionWired Makro CBW Cambridge Warehouse Express Trade Depot liquor/ groceries General Electrical Food/liquor/ Home Home Building merchandise appliances general improvement improvement materials/ and FMCG merchandise supplies/ supplies/ tools Food/ Jumbo tools/building tools/ groceries/eth materials building nic cosmetics materials Food/ Shield groceries 517 buying members Store counts as of Dec 31, 2011 Massmart – Presence in Africa • Operational in 12 countries Uganda 1 – Game • Focused on major cities Tanzania Ghana 1 – Game 1 – Game Nigeria • Game & CBW formats Zambia 2 – Game Malawi 1 – Game 2 – Game Namibia 2 – Game Mozambique 1 – CBW 1 – Game Foodco South Africa – 303 Nigeria – 2 Botswana Mozambique – 1 Swaziland – 1 3 – Game Swaziland 8 – CBW 1 – CBW Botswana – 12 Tanzania – 1 1 – Builders Warehouse Lesotho 2 – CBW Namibia – 3 Uganda – 1 South Africa Lesotho – 2 Zambia