President and Chief Executive Officer Walmart de México y Centroamérica

Transcription

1 President and Chief Executive Officer Walmart de México y Centroamérica 1

2 10 years of Profitable Growth Sales (Mx$ billion) EBITDA (Mx$ billion) $420.6 $40.2 CAGR: 13.6% CAGR: 15.5% $118.0 $

3 Headwinds in 2013 GDP (% Growth) Public Spending (% Growth) Remittances (% Growth) 4.0% 3.9% 9.1% 7.7% 7.0% 4.2% 1.1% % -3.8% Source: INEGI. Source: INEGI. Source: Mexico s Central Bank. 3

4 Retail and Wholesale trends Retail Channel Sales % Growth Wholesale Channel Sales % Growth 10% % 10% 8% % 6% 4% 2% 0% -2% -4% -6% -8% -10% -12% 4% 2% 0% -2% -4% -6% -8% -10% -12% Source: INEGI, data in real terms. 4

5 P&L Walmex (Mx$ million) Total Revenues $ ,161 % $ 412, % % Increase 3.2 % Increase ex one-time store lease expense* 3.2 Gross Margin 93, , General Expenses 62, , Operating Income 31, , EBITDA 40, , Net Income 22, , * Non-cash. 5

6 Leverage, Growth & Returns 1.Market Forces : Hits & Misses 3.Foundations for Leverage 4.Actions for Growth Self-service Mexico Specialty Retail Mexico Central America 5.Strategies to improve Returns 6

7 Market Forces 7

8 Population growth has slowed, but is stable at 1.2% per year 2.6% Mexico: Population % Growth (CAGR) 1.5% 1.2% 1.2% e Source: CONAPO Consejo Nacional de Población (National Population Council). 8

9 However, demographic bonus is positive for near-term consumption Prime Retail Consumer Women Men Prime shopping age cohort is expected to add 10.3 million consumers e > Women Men Source: CONAPO. 9

10 Urbanization continues, but at slower rate Mexico: % of Population by City Size Urban Population > 100,000 15,000-99,999 Urban 2,500-14,999 Semi rural < 2,500 Rural U.S.A. U.K. Mexico China % 80% 78% e Source: INEGI with CONAPO estimates. Source: RetailNet Group. 51% 10

11 Mexico s relatively high level of urbanization and growing Internet and Mobile usage, support ecommerce economics Internet Users (Millions) 61.5 Mobile Subscriptions (Millions) e e Source: COFETEL, INEGI; 2015 estimate based on E-marketer growth projection. 11

12 Household size has decreased, but is stable at 3.9 people per household Mexico: Average Household Size 4.9 Average Household Size U.S.A U.K. Mexico China e 3.1 Source: CONAPO and RetailNet Group estimates. Source: RetailNet Group. 12

13 Trend towards women in the workforce gradually increasing Mexico: Women s Share of the Labor Force 32.0% 35.7% 36.9% 23.0% e Source: CONAPO. 13

14 Mexico s informal market share is still a big opportunity Informal Market Formal Market Mexico: Trade Sector (%) 45% 55% Source: Formal Market: INEGI; Informal Market: Available information at INEGI ( Cuenta Satélite del Subsector Informal de los Hogares ). 14

15 Structural reforms will have a positive mid-term impact Mexico: 2013 Structural Reforms Labor Education Telecom Energy Political Fiscal Financial 15

16 Market Forces for Retail growth in Mexico are still favorable Demographic bonus Internet and mobile usage Household size Women in the workforce Informal market opportunity Structural reforms + Population growth Urbanization slows Economic growth slow build 16

17 Key to continue sales growth will be to evolve the sources of growth Sources of Growth New stores Comp stores Omnichannel Past 5 years Next 5 years 17

18 2013: Hits & Misses 18

19 Hits Food and Consumables Self-service Small Stores: Bodega Aurrerá Express ecommerce: Infrastructure and Investment Central America Performance 19

20 Positive trend in Food & Consumables Self-service 2013 Food & Consumables Same Store Sales Growth 0.8% +140 bps -0.6% ANTAD Self-service ex-walmex Walmex Self-service Source: ANTAD and Company data. 20

21 Small Stores: Bodega Aurrera Express 865 Stores* *As of February 24,

22 ecommerce Platform: Infrastructure and Investment General Merchandise Online Distribution Center Home Launched June 25,

23 2013 Central America Performance Increase in Constant Currency Basis* (%) Total revenues Gross margin General expenses Operating income EBITDA 32.6 * Comparable basis, ex one-time non-cash, store lease expense. 23

24 Misses Sam s Club General Merchandise Division Financial Services Inventories 24

25 Repositioning Sam's Club 2013 Same Store Sales Growth ANTAD Self-service ex-walmex Sam's Club -0.9% -4.4% Source: ANTAD and Company data. 25

26 General Merchandise Division 2013 Same Store Sales Growth 5.7% -2.0% -1.8% ANTAD Department ANTAD Self-service ex-walmex Walmex Self-service Source: ANTAD and Company data. 26

27 Financial Services: Own and Controlled Credit Cards 40% Banco Walmart 2013 Credit Sales (% Growth) BBVA Private Label 30% 20% 10% 0% -10% -20% -30% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 27

28 Inventories increased 2013 Days on Hand DOH vs. Last Year Walmex Inventory Reduction Plan Prevention Self-service New replenishment system (GRS) Increase control on Open to Buy Rollbacks and New products analysis Modular strategy review Improve inventory allocation process Correction Self-service Clearance on aged inventory 1 Reduce unproductive inventory 2 Redefine service level by item based on turnover Sam s Club SKU control Focus on inventories at item-club level Purchase control Markdown procedure Flow visibility to DC 1 Aged Inventory: more than 90 days without sales and purchases. 2 Unproductive Inventory: >2X Business Plan. 28

29 Foundations for Leverage 29

30 Productivity Infrastructure Control and Compliance 30

31 Process Innovation team producing constant innovation Dedicated Resources Mexico Global Business Processes Disruptive Processes Central America Process Engineering Bentonville 31

32 Investments in Productivity are paying off 2013 Expense Growth vs. Sales Floor Growth 7.2% 4.7% Sales Floor Growth General Expenses Growth* * Ex depreciation and one-time, non-cash effect. 32

33 Labor and energy productivity are improving Store Labor Existing Store Labor Hours (% Growth) DC Labor Cases per Labor Hour (% Growth) Energy Comp Units KWH (% Growth) -7.6% +12.2% -3.3%

34 Shrink is also down Shrink (% of Sales) - 8%

35 Back Office Services: Global Shared Services Mexico and Central America Finance Administration Back Office Mexico and CAM Walmart GSS in Costa Rica 35

36 Central America: Systems conversion and distribution integration contributed to solid increase in Gross Margin Systems Conversion 100% Gross Margin (%) 22.4% New Distribution Center: 543,743 sq. ft. Coyol, Costa Rica 20.7%

37 We continue to invest significant resources in Compliance +300 Reports Processes Systems Procedures Training Dedicated Associates in Mexico and Central America 37

38 Associates are motivated and committed to the Company s success Associate Engagement Scores % 85% 82% 90% Mexico Central America 38

39 Actions for Growth Self-service Mexico Specialty Retail Mexico Central America 39