Cencosud Day Daniel Rodríguez. September 24, 2014

Transcription

1 September 24, 2014

2 2 As a region, Latin America has performed spectacularly in the past 20 years GDP Growth Poverty (1) Latin America World U.S. Europe Japan Average Age Brazil Peru Latin America has led economic growth rates in the world in recent years and has also significantly reduced poverty. Source: FMI, World Bank, UN. (1) Percentage of the population that lives with less than US$4 per day.

3 3 These achievements have led to a profound change in society reflected in basic quality of life indicators Population 1 GDP per Capita 2 Life Expectancy 3 Infant Mortal. 4 Years of Democracy Population 1 GDP per Capita 2 Life Expectancy 3 Infant Mortal. 4 Years of Democracy Brazil Peru The population grew 31%, equivalent to 78 million people The weighted GDP per capita of these countries grew by 258% Life expectancy increased by 6 years Source: IMF, World Bank, UN. (1) Population in millions; (2) Total GDP per capita is the population-weighted average; (3) Local life expectancy is the population-weighted average; (4) Rate of infant mortality (between 0 and 1 year) for every 1,000 live births, the total is the population-weighted average.

4 4 Currently, the region is facing a slowdown but medium and long-term prospects are still attractive GDP per Capita Between 2005 and the beginning of 2008, the economy showed strong growth, which was affected by the crisis World Currently, one can see greater dynamism in the economy With the exception of Argentina, estimates point to economic recovery In recent years, GDP per capita has increased at slower rates, a scenario that is expected to reverse in the future Source: IMF. CAGR or compound annual growth rate corresponds to the weighted average of Argentina, Brazil, Chile, Colombia and Peru

5 5 At Cencosud, we have executed a successful expansion process during the region s growth period 2002 Sales US$ 1 BN 2013 Sales US$ 20.8 BN

6 6 This has given us a powerful regional footprint SUPERMARKETS Argentina Brazil Chile Colombia Peru 922 Supermarkets / Revenue: US$ 14.3 BN DEPARTMENT STORES Chile Peru 83 Stores / Revenue: US$ 1.8 BN HOME IMPROVEMENT Argentina Chile Colombia 89 Stores / Revenue: US$ 2.2 BN FINANCIAL RETAILING Argentina Brazil Chile Colombia Peru 5.5 MN active accounts / Revenue: US$ 0.5 BN SHOPPING CENTERS Argentina Brazil Chile Colombia Peru 48 Malls / Revenue: US$ 0.4 BN Cencosud has 3.5 million m 2 in its retail businesses throughout the region and 1.9 million in the shopping center business

7 7 We have a diverse and experienced board of directors, aligned with our plan for regional expansion Horst Paulmann Chile Chairman and Cencosud founder David Gallagher U.K. MA in Modern Languages from Oxford University Cristián Eyzaguirre Chile Economics degree from U. de Chile and Masters in Economics from the University of California, Berkeley Heike Paulmann Chile Commercial Engineer from U. de Chile and MBA from U. Adolfo Ibáñez Erasmo Wong Peru Engineer from U. Nacional de Ingeniería, Senior Management Program from U. de Piura and Presidents Program from U. de Piura Julio Moura Brazil Engineer from the Instituto Federal Suizo de Tecnología and Masters from the MIT Sloan School of Management Peter Paulmann Chile Commercial Engineer from U. Católica de Chile Roberto Philipps Argentina Degree in Business Administration and Accounting from U. de Buenos Aires and AEP from Kellogg School of Management, Northwestern University Richard Büchi Chile Engineer from U. de Chile and MBA from Wharton School of Business of the University of Pennsylvania

8 Financial Retailing Home Improvement Department Stores Supermarkets Cencosud Day 8 Our current regional presence allows us to continue growing, leveraging our assets

9 9 Cencosud s operations are divided into two regions: Pacific and Atlantic Exports as a % of GDP Investment as a % of GDP Inflation Unemployment Brazil Peru The stability in the Pacific region is supported by its rating and balanced macroeconomic data

10 10 Sustainability: CSR Customers: E-Commerce and Loyalty People: Talent Management Productivity

11 11 Empowered consumers, who demand accountability from companies Chile is the Latin American Country with the Highest Human Development Index Rating According to the UNDP According to the 2013 report by the United Nations Development Program, Chile is ranked 40th in the world in human development. The list of 187 countries is led by Norway and ends with Niger. Challenge to Dilma / The Countdown to the World Cup A Day of Protests, Strikes and Looting Escalate Social Tension in Brazil Thousands of protesters took the streets in the country in the fight against the Cup, relief felt in the government as it had expected an even larger turnout Evolution of Annual GDP per Capita in Chile Consumer s Eye Companies Fined $5.8 billion for False Advertising In the last few days, two such cases have surfaced: one involving Alpina and the other Maxiboletos S.A.S. Last year, the Superintendent of Industry and Commerce issued fines for $5.8 billion pesos to companies for pulling the wool over consumers eyes. C O N S U M E R C O M P L A I N T S A G A I N S T F I N A N C I A L I N S T I T U T I O N S Objective: Helps customers express complaints about bad service or attention How the complaint book works All businesses with unique consumer registration open to the public are required to have a complaint book. If not, they can be fined. Consumers increasingly have greater protection from government and influence over the media and social networks

12 12 This situation has not overlooked us Discovery of 3 brands of olive oil sold in Chile not apt for human consumption SERNAC beats Cencosud: it must refund excess charges to Jumbo Mas cardholders The Supreme Court upheld a class action lawsuit against the chain for unilaterally increasing its commission from $460 to $990 pesos. The highest court said that the clause that permits it is abusive, null and void. Published by Christian Leal In this Tuesday s edition, the Canal 13 Contacto program investigated various food industries to determine up to what point they comply with current health regulations or with promises made in their marketing.

13 13 Sustainability: The evolution of our society encourages us to further define CSR strategies and commitments to our stakeholders CUSTOMERS EMPLOYEES CSR at Cencosud Customers Employees We approach the issue with a CSR strategy for each business, with programs that create value for each brand SUPPLIERS Environment Suppliers We generate programs that are easy to communicate to increase brand value internally and externally COMMUNITY ENVIRONMENT Community

14 14 Customers: In e-commerce we are working so that our digital channels support the value proposition of our retailers What are we doing? We work on strategies to provide our customers with a unique experience through our media and digital businesses We support our retailers to prepare for a future that is driven by technology with a higher share of online purchases

15 15 Customers: We are focusing on our loyalty program in Chile by putting our customers at the center of our strategy and improving their experience What are we doing? In Chile We are taking advantage of having one of the richest customer databases in the region We are improving our offering and will leverage the operational and promotional efficiency of our business More than 4 million customers belong to the program 80% of loyalty sales in supermarkets 80% redemption rate, one of the highest in the world

16 16 Our business is people: talent management at all levels is key to our performance and sustainability Executives We manage our talent at all levels in the organization, not just at the top. Each segment has its own challenges, even if some issues are common to all. DNA CENCOSUD + EACH BRAND S CULTURE Executives Middle Managers Store Management In-Store Operations Policies, processes and systems are developed to serve as the "basic infrastructure" for talent management (e.g. role assessment, incentives and KPIs, performance evaluation, leadership skills, My Career Portal, talent inventory, leader in action system, etc.). Our customers experience will never be better than that of our employees. We measure it with GPTW (90 +% participation). Leadership in managing people and teams is key in an organization with our geographic distribution (over 1,000 stores) and volume (150,0000 associates).

17 17 People: We have worked closely with the different organizational cultures to identify and disseminate the common Cencosud DNA Our cultures are leveraged for talent management Each of our companies has its own culture, which comes from its history, traditions and value proposition to the customer However, the companies in our group share principles we call Cencosud DNA" Our growth and size challenges us to "share" our way of doing things while preserving local characteristics Conveying our "DNA" to our newest businesses is a central role of our leaders and HR teams Our "DNA" and values are a guide so our employees and executives can make decisions that are consistent with our convictions We are aware that talent is increasingly mobilized by the culture of the companies where they choose to work

18 Department Stores Home Improvement Supermarkets Cencosud Day 18 Productivity: We care about productivity and see it as a key way to improve our performance and fund future growth What are we doing? Energy efficiency in stores Reductions in bags and packaging Mobile apps for shopping Self-service scales, self-scanning Greater efficiency at registers LEAN leadership and people management Process standardization Performance management Labor management Management tools Master plan for staffing Management of brand performance

19 19 Conclusions Advantages of the Region Cencosud Advantages Latin America has shown sustained growth over the last decade with a significant reduction of poverty. Substantive improvement of quality of life indicators in a more stable democratic environment and with a higher proportion of middle class. Slowdown in growth in recent years, but with expectations that this will reverse in the future. Market leadership, scale and high diversification. Leadership position (#1/2) in the supermarket businesses in Chile, Peru, Argentina and Colombia. Presence in markets with an even lower penetration of the formal market. Profitable operations with clear growth opportunities and increased profitability in the markets and businesses in which we participate.

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