ALON BLUE SQUARE אלון רבוע כחול ישראל. MEGA Retail

Transcription

1 ALON BLUE SQUARE אלון רבוע כחול ישראל MEGA Retail

2 2 FORWARD-LOOKING STATEMENTS This presentation may include forward-looking statements, including forecasts, evaluations, estimates and other information relating to future events and issues. Forward-looking statements may relate to, among other things, revenues, earnings, cash flows, capital expenditures and other financial items. Forward-looking statements may also relate to our business strategy, goals and expectations concerning our market position, future operations, profitability, liquidity and capital resources. All statements other than statements of historical facts are forward-looking statements and can be identified by the use of forward-looking terminology such as the words "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "will" and similar terms and phrases. Any forward-looking information contained in this presentation is based, in addition to existing information of the company, on present company expectations and evaluations regarding future developments and trends and on the interaction of such developments and trends. Although we believe the assumptions upon which any forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. Our business and operations involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially affect our results of operations and whether the forward-looking statements ultimately prove to be correct. Forward-looking statements are based on current expectations and are not guarantees of future performance. Actual results and trends in the future may differ materially from those suggested or implied by any forward-looking statements in this presentation depending on a variety of factors including those described in greater detail in Alon Blue Square Periodical and Annual Reports, Registration Statement on Form F-1, Annual Report on Form 20F and in other information we file and furnish with the Israel Securities Authority and the Securities and Exchange Commission, including under the heading Risk Factors. All written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the previous statements. Except for any obligations to disclose information as required by applicable securities laws, we undertake no obligation to update any information contained in this presentation or to publicly release the results of any revisions to any statements that may be made to reflect events or circumstances that occur, or that we become aware of, after the date of this presentation. The information contained herein does not constitute a prospectus or other offering document, nor does it constitute or form part of any invitation or offer to sell, or any solicitation of any invitation or offer to purchase or subscribe for, any securities of Alon Blue Square Israel Ltd. or any other entity, nor shall the information or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any action, contract, commitment or relating thereto or to the securities of Alon Blue Square Israel Ltd. The information in this presentation does not constitute investment advice and in any case intended only to qualified customers.

3 3 Alon Blue Square 100% 100% 100% 78% 78% You Phone BEE Group merging MEGA Retail Dor Alon Blue Square Real Estate Leisure 90% Kfar Hasha ashuim housewares and home textile 77% Na aman (Vardinon) 51% EDEN Teva Market 12.25% 36.75% Selling Diners אלון רבוע כחול The company intent to sell the activity

4 4 Holding s After MEGA/BEE merger Alon Blue Square 100% 100% 78% 78% You Phone MEGA Retail Dor Alon Blue Square Real Estate 77% 51% 12.25% 36.75% Na aman (Vardinon) EDEN Teva Market Logistic Centers Diners

5 Strategic Process Mile Stones Organizati on culture Core Processes & KPI s Operating Model From Strategy in to Action Vision & Mission Statement Marketing Strategy The process was lead by management with teams working on SWOT Analysis specific topics We used internal company knowledge gathered from previews strategic process as well as interviews with current & former company executives Orientation Process Leading consulting firms supported the process with global and local best practices & benchmarking January February March April May June July 5

6 6 Israeli Retail Market Snapshot Competition 1. Competitive market with price being the key differentiation factor but many examples of add value customer proposition 2. New entries and expansion of private retailers lead by a strong founder 3. High levels of retail space per capita vs WE Market 1. High & frequent involvement of all the family in the shopping cycle 2. Consumer conversation dominated by price perception 3. Most growth coming from Discount format 4. Increase in government Regulation 5. Technological development is playing a key role in this market, starting with on line shopping Market Share (2012) FMCG Market Growth Rate Mega Shufersal Rami levi 6.0% 14.0% 5.4% 4.4% 4.2% 4.6% 3.2% bitan/hinam 1.6% hatzi hinam tiv ta'am victory 6.2% 24.7% F Source : StoreNext, May 2013 Source : company estimation, market share out of FMCG

7 7 MEGA Market Positioning High cost base High price perception. Sub optimal Execution capability s Inconsistence customer proposition and branding Rich history (1937) which is rooted in the state of Israel foundation story Superior לפרוייקט store שלמים locations גיוס צוותים mainly city centers leveraging the YOU Leading in fresh food, loyalty club mainly meat Part of Alon group, Israel largest retail group

8 8 The Customer is in The Center

9 המוצר שלנו: חווית קניה 9

10 10 We want to optimize the customer proposition.and to achieve high satisfaction from Shopping at our stores אלון רבוע כחול We want our customers to love our stores

11 11 MEGA growth Recipe

12 12 MEGA s vision derives from our history (In Mega) We Listen To You! Always, everywhere, in every interaction Because, we really care

13 13 Strategic Mission

14 14 Mega s Virtual Value Chain Customer interface Multi formats, in & out of town to address key customer shopping needs Exploit technology & capture on-line growth Store operation Know Your Customer Market research & communication You club & Alon Group synergies Advance & Innovative commerce Leverage supplier category know how Increase shareholders & workers Value Operating Model Customers at the heart of everything we will do Business units close to customers with business partners to get scale Winning culture Supply Chain & Driving Cost Down 100 bps PA Optimize shop Flore space Integrated Supply chain Drive Economics of scale through growth

15 15 Supply Chain Operational Planning & Inventory Management Logical Replenishment Delivery Distribution centers Procurement Physical Thousand s of kilometers of shelves 650 million items per year 1,200,000 pallet over 25,000 square kilometers To 500 stores (203 mege stores) Fresh Chilled Room temp Food Vs. non food 25,000 SKU s Over 1 billion Nis of GNFR 1,500 suppliers Logistic centers distribution accounts for 75% of operations in 3 years improving on shelf availability while reducing inventory & replenishment cost Comprehensive approach to product loss Centralized GNFR buying

16 Market guidelines Annual growth above market rate Comprehensive solution to price challenge in all formats & Geographic's Keep gross margin at current levels by supply chain efficiency of 1% & innovative commercial OPEX reduction mainly due to optimizing store size & closing losing stores Closing operating margin gap Vs. Israeli average till 2014, afterward growth toward top quartile retailers margins Capex in line with depreciation and on going CF improvement

17 17 Supporting Strategic action Leading the healthy organic market Via EDEN Teve Market Strengthening Non food store activity (Na aman group) for broadening the group costumer point of sell and additional support in MEGA stores Loyalty club & credit card for focused added value based on a broad retail portfolio Cellular growth as a differentiating factor

18 18 Summery We built a customer focused plan, based on past experience, our competitive advantages & opportunities in the Israeli retail market We will build supporting organizational capabilities enabling execution We expect on going quarterly improvement

19 19 Thank You אלון רבוע כחול