Distribuidora Internacional de Alimentacion SA · BME:DIA
Distribuidora Internacional de Alimentacion SA — H1 2018 Earnings Presentation
32 slides from Distribuidora Internacional de Alimentacion SA's earnings presentation, Nov 11, 2018
Slide 1: H118 Results
H118 Results
Slide 2: Legal disclaimer
Legal disclaimer This document does not constitute or form part of any purchase, sales or Exchange offer, nor is it an invitation to draw up a purchase sales or exchange offer, or advice on any stock issued by Distribuidora Internacional de Alimentación, S.A. (“DIA” or the “Company”). Nor shall this
Slide 3: Index
Index 01 Highlights 4 02 Financial review 7 03 Business review 15 04 Closing remarks 21 05 Appendix 24 /3
Slide 4: Highlights
01 Highlights
Slide 5: H1 2018 has been the toughest period since listing...
H1 2018 has been the toughest period since listing... Weaker LFL sales than expected in Iberia: • Tough general market conditions • Unusual rainy and cold weather in springtime Impact on gross margin from the end of purchasing alliances in Iberia Weak business performance in Brazil due to supply cha
Slide 6: ...but H2 2018 got off to a better start
...but H2 2018 got off to a better start Strong Spanish sales momentum in July (3% LFL) thanks to the uplift from remodellings Improving sales in Brazil in July New proximity formats in Iberia, and d , delivering very good results Softer comps in H2 2018
Slide 7: Financial review
02 Financial review
Slide 8: 10.6% negative FX effect on total sales
10.6% negative FX effect on total sales EURm Change +1.8% -0.5% +1.3% -10.5% -9.2% +91.2 -25.3 5,129.8 -529.4 5,063.9 4,600.4 H1 2017 LFL Space H1 20181 FX & H1 2018 Calendar effect2 Max Descuento (small C&C stores) presented as discontinuing activities 1. Ex-FX and ex-calendar effect 2. Calendar ef
Slide 9: Iberia sales: negative space contribution starting to ease
Iberia sales: negative space contribution starting to ease EURm Change -0.4% -2.6% -3.0% SELLING SPACE IN IBERIA (in million sqm) 2.20 3,179.1 -12.7 -81.6 2.15 3,084.8 2.10 2.05 2.00 1.95 1.90 H1 2017 LFL Space1 & Calendar H1 2018 effect 1. Negative net space contribution of -2.7% /9
Slide 10: Emerging Market sales: 8.7% growth in local currency, but negative FX impact
Emerging Market sales: 8.7% growth in local currency, but 28.3% negative FX impact EURm Change +5.0% +3.7% +8.7% -28.3% -19.6% +69.7 2,048.7 -533.1 Brazilian sales severely +94.2 impacted by 1,884.8 1,515.6 transport strike and supply chain disruption H1 2017 LFL Space H1 20181 FX & H1 2018 Calendar
Slide 11: 70 bps decline in the group's adjusted EBITDA margin in H1 2018
70 bps decline in the group’s adjusted EBITDA margin in H1 2018 Adjusted EBITDA margin Iberia Emerging DIA Group 8.5% 6.6% 3.4% 5.9% 7.3% 3.1% H1 2017 H1 2018 H1 2017 H1 2018 H1 2017 H1 2018 / 11
Slide 12: 2017 price realignment and purchasing alliances impacting Iberian margins
2017 price realignment and purchasing alliances impacting first half Iberian margins Bps over net sales Adjusted EBITDA margin in Iberia 2017 2018 40 28 -37 -39 -181 -387 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 / 12
Slide 13: Underlying Net Profit improved in Iberia in Q2 2018 vs Q1 2018
Underlying Net Profit improved in Iberia in Q2 2018 vs Q1 2018 EURm Iberia EM Total 61.9 66.9 43.1 5.0 40.0 2017 -3.1 Q1 Q2 Q1 Q2 Q1 Q2 43.7 37.2 34.8 28.9 2018 -5.9 -6.4 Q1 Q2 Q1 Q2 Q1 Q2 / 13
Slide 14: Net debt at EUR1.2bn by the end of June 2018
Net debt at EUR1.2bn by the end of June 2018 Higher net debt in Iberia due to weak sales, lower operating margins and (EURm) H1 2017 H1 2018 Change higher capex Iberia -997 -1,099 -102 Higher net debt in Emerging Emerging Markets -23 -131 -108 Markets due to lower trade working capital DIA GROUP -1,
Slide 15: Business review
Business’ ™ revieW=45
Slide 16: Main takeaways from new DIA&Go format
Main takeaways from new DIA&Go format 90 ≈30% >20% stores already sales remodelled uplift ROI 35% EUR0.3m ≈40% fresh sales average Capex #tickets weight growth (29% in Dia Market) per store Includes Minipreço express in Portugal / 16
Slide 17: A modern and wide-open store…
A modern and wide-open store… / 17
Slide 18: … with a strong fresh offer…
… with a strong fresh offer… / 18
Slide 19: … that makes your day-to-day easier
… that makes your day-to-day easier / 19
Slide 20: La Plaza, sustained and profitable growth
La Plaza, sustained and profitable growth +8.4% +25% 7th consecutive LFL in sales density quarter of H1 2018 vs 2016 LFL growth >6% >17% 42% adjusted fresh weight sales growth on sales EBITDA of fresh products (28% in Dia Maxi) margin / 20
Slide 21: Closing remarks
04 Closing remarks
Slide 22: 2018 outlook review
2018 outlook review What we said in February 2018: What we expect today: IBERIA Top line to improve in H2 2018 with positive LFL Adjusted EBITDA margin decline in Q3 and improvement in Q4 EMERGING MARKETS More cautious approach to expansion in Argentina GROUP Delivering the expected cost efficiencie
Slide 23: Closing remarks
Closing remarks • DIA has faced the most challenging business period since listing • Focus on top-line growth with continued effort on costs • Negotiation of new procurement alliances in progress • Business recovery in Brazil resumed after supply chain disruption • Less demanding comparison base of
Slide 24: Appendix
05 Appendix
Slide 25: Food inflation in Emerging Markets
Food inflation in Emerging Markets National Food Inflation in Brazil National Food Inflation in Argentina 16.7% 39.2% 39.1% 11.9% 29.9% 4.6% 26.1% 1.0% 23.3% 22.2% 21.7% 21.5% -2.8% -4.5% -4.0% -5.1% SOURCE: IBGE (Instituto Brasileiro de Geografia e Estatística) & INDEC (Instituto Nacional de Estadí
Slide 26: Gross sales under banner by country
Gross sales under banner by country Change (EURm) Q2 2018 % Change FX effect (ex-FX) Spain 1,403.9 57.8% -1.2% - -1.2% Portugal 203.9 8.4% -5.2% - -5.2% IBERIA 1,607.8 66.2% -1.7% - -1.7% Argentina 346.7 16.0% -23.1% -46.6% 23.5% Brazil 401.5 17.8% -19.9% -17.4% -2.5% EMERGING MARKETS 748.2 33.8% -2
Slide 27: Q2 2018 results summary
Q2 2018 results summary Change (EURm) Q2 2018 % Change FX effect (ex-FX) Net sales 1,939.9 100.0% -10.2% -11.2% 1.0% Adjusted EBITDA1 115.7 6.0% -25.3% -4.8% -20.5% D&A -54.2 -2.8% -5.5% -7.7% 2.2% Adjusted EBIT1 61.5 3.2% -37.0% -3.1% -33.9% Other items excluded from adjusted EBIT -35.9 -1.8% 0.9%
Slide 28: Underlying net profit declined in H1 2018
Underlying net profit declined in H1 2018 (EURm) H1 2017 H1 2018 Change (EURm) Change (%) Adjusted EBITDA 279.1 225.7 -53.4 -19.1% D&A -114.9 -111.3 3.6 -3.1% Adjusted EBIT 164.2 114.4 -49.8 -30.3% Other items excluded from adj. EBIT -48.1 -60.4 -12.3 25.6% EBIT 116.1 54.0 -62.1 -53.5% Financial inc
Slide 29: Trade working capital
Trade working capital Change (EURm) 30 June 2017 30 June 2018 Change (ex-FX) Inventories (A) 647.8 549.4 -15.2% -2.3% Trade & other receivables (B) 187.4 174.9 -6.7% 4.2% Trade & other payables (C) 1,578.3 1,370.1 -13.2% -3.4% TRADE WORKING CAPITAL1 -743.1 -645.9 -13.1% -6.3% 1. Trade working capita
Slide 30: Currency performance
Currency performance % EUR/ARP EUR/BRL 16.4 6.5 -2.5 -7.6 -7.4 -12.2 -17.8 -19.7 -16.1 -17.5 -30.9 -37.5 Q2 2017 Q3 2017 Q4 2017 FY 2017 Q1 2018 Q2 2018 SOURCE: Bloomberg average currency rates (a negative change in exchange rates implies a depreciation versus the Euro) / 30
Slide 31: Gross Sales Under Banner & adjusted EBITDA by segment
Gross Sales Under Banner & adjusted EBITDA by segment H1 2017 Gross sales under banner H1 2018 Gross sales under banner Iberia 62.8% Iberia 67.1% Emerging 37.2% Emerging 32.9% H1 2017 adj. EBITDA H1 2018 adj. EBITDA Iberia 80.7% Iberia 82.6% Emerging 19.3% Emerging 17.4% / 31
Slide 32: Parque Empresarial de Las Rozas
PARQUE EMPRESARIAL DE LAS ROZAS Jacinto Benavente, 2 A Las Rozas (Madrid) Spain - Post Code: 28232 +34 91 398 54 00 www.diacorporate.com
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