Distribuidora Internacional de Alimentacion SA · BME:DIA
Distribuidora Internacional de Alimentacion SA — FY2016 Earnings Presentation
58 slides from Distribuidora Internacional de Alimentacion SA's earnings presentation, February 2017
Slide 1: FY16 Results
FY16 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 8 03 Business overview 17 04 Q&A 26 05 Appendix 27 /3
Slide 4: Highlights
y I DELICIOUS : ——— una DELICIA para cada DIA
Slide 5: Full delivery of 2016 financial targets
Full delivery of 2016 financial targets +10.2% +29% +8.7% LFL EUR207m Gross Sales Under Banner* Cash From Operations** +8.6% Iberia: +1.4% EUR254.1m EM: +41.9% *Ex-currency adj. EBITDA* Net debt reduction **Defined as adjusted EBITDA – Non-recurring cash items – Capex; on organic basis /5
Slide 6: Strong performance despite demanding environment
Strong performance despite demanding environment Excellent business … in difficult market performance… places Positive LFL in all countries. Food market volume decline: Financial targets achieved. • Spain: -1.6%* Improvement in customer and • Argentina: -4%* franchise satisfaction. • Brazil: -4%** S
Slide 7: Customer and franchisee at the centre of our decisions
Customer and franchisee at the centre of our decisions Spain customer satisfaction # of franchise stores (Net Promoter Score)* +272 stores +7pp Improvement in franchisee satisfaction* Retailer with highest NPS increase in 2016 +9pp Net Promoter Score (NPS) as metric for assessing customer satisfacti
Slide 8: Financial review
O2 Financial review LOL KS b>» Woe
Slide 9: 10.2% increase of Gross Sales Under Banner
10.2%* increase of Gross Sales Under Banner Change +8.7% +1.5% -10.2% EURm +920 +160 -1,077 10,547 10,550 2015 LFL Space FX 2016 *Ex-currency /9
Slide 10: 8.6% adjusted EBITDA growth
8.6%* adjusted EBITDA growth EURm +45.7 -37.7 +7.0 625.1 610.1 2015 Iberia Emerging FX 2016 *Ex-currency / 10
Slide 11: Stable adjusted EBITDA margin in Iberia
Stable adjusted EBITDA margin in Iberia 8.84% 8.71% adj. EBITDA Price Customer Supermarket Sourcing Efficiency adj. EBITDA margin 2015 investment service mix programs margin 2016 / 11
Slide 12: Emerging markets: delivering further margin expansion
Emerging markets: delivering further margin expansion 3.75% 3.44% adj. EBITDA Price Sourcing Efficiency FX mix adj. EBITDA margin 2015 investment programs margin 2016 / 12
Slide 13: Increased profitability driving 3.9% underlying EPS growth
Increased profitability driving 3.9% underlying EPS growth EUR +0.084 -0.047 0.406 -0.021 -0.009 +0.009 0.422 Underlying adj. EBITDA D&A Financial FX # shares Underlying EPS 2015 result effect EPS 2016 / 13
Slide 14: Outstanding improvement in Cash From Operations
Outstanding improvement in Cash From Operations adj. EBITDA EURm 625 610 Cash From Operations* Capex 207 2015 2016 EURm EURm +197** 160 366 345 Non-recurring cash items 2015 2016 EURm 94 73 2015 2016 2015 2016 *Defined as adjusted EBITDA – Non-recurring cash items – Capex; on organic basis **Acquisi
Slide 15: Debt reduction, best-in-class returns and growing dividend
Debt reduction , best-in-class returns and growing dividend Solid balance sheet Industry-leading returns Growing dividend EURm ROI EUR/share +91% 0.21 1,132 19.4% 878 11.9% 0.11 2015 2016 Industry DIA 2011 2016 Net debt/ 1.9x adj. EBITDA 1.4x 47.8% Payout 49.8% List of ROI peers (2015 data): Carrefo
Slide 16: Financial outlook
Financial outlook Mid-single-digit growth in gross sales under banner (in local currency) in 2017. • Falling store selling area in Spain. • Lower inflation in Emerging Markets. Adj. EBITDA growth and margin stability for 2017. Capex to continue declining in 2017. 2016-18 period target reiterated: •
Slide 17: Business overview
oe 03 7 _— Business overview
Slide 18: Strong commitment to franchisees and employees drives customer satisfaction
Strong commitment to franchisees and employees drives customer satisfaction More DIA entrepreneurs Engaged employees** +272 franchise stores 94% commitment Improvement in franchisee satisfaction* 6pp above retail average +9pp Franchisee satisfaction measured as satisfied less non-satisfied *Nielsen
Slide 19: Significant improvement of franchise satisfaction
Significant improvement of franchise satisfaction Satisfaction Most improved General +9pp satisfaction* • Digital tools Opening new • Profitability +7pp store or keeping existing one** • Communication • Logistics service +10pp Profitabilty*** *Measured as satisfied less non-satisfied **Measured as %
Slide 20: Improvement of customer experience in Spain
Improvement of customer experience in Spain Out-of-Stock -15% Spain customer satisfaction* (Net Promoter Score)* Better offer +7 points >2,000 fresh counters in close to 1,000 stores Net Promoter Score (NPS) as metric for assessing customer satisfaction *Kantar / 20
Slide 21: Making the most of our diverse portfolio of private label brands
Making the most of our diverse portfolio of private label brands Continuous Participation* Strong development of DIA Delicious brand private label > 52% Iberia development > 34% Latam >200 SKU’s +40% sales >730.000 Launch in Spain of DIA Vital brand Quality analysis 70 SKU’s +7% sales Sales refer to
Slide 22: DIA Club: much more than a loyalty programme
DIA Club: much more than a loyalty programme > 700,000 More than 19.5 “digital” users million active of the DIA Club members app in Spain More than 5.6 million new members in 2016 / 22
Slide 23: Fast online growth today, huge opportunities tomorrow
Fast online growth today, huge opportunities tomorrow ≈ 50% of Spanish Online sales population already covered with DIA x3 Online More than 3,000 in Q4 2016 Click & Collect vs points in Spain Q4 2015 / 23
Slide 24: A story of consistent profitable growth in food retail
A story of consistent profitable growth in food retail 7,799 62% 4,394 34% 2010 2016 2010 2016 # of stores DIA banner franchised stores 10,550 625 7,568 409 2010 2016 2010 2016 Excluding France and Turkey *Ex-currency Gross Sales Under Banner adj. EBITDA / 24
Slide 25: Save the date
SAVE THE DATE 3rd DIA CAPITAL MARKETS DAY London, Wednesday 21 June 2017 Madrid, Thursday 22 June 2017 / 25
Slide 26: Q&A
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Slide 27: Appendix
04 Appendix
Slide 28: A story of consistent, profitable growth in food retail
A story of consistent, profitable growth in food retail # of stores DIA banner franchised stores 7,799 61% 62% 7,306 7,718 54% 6,463 52% 40% 44% 4,394 4,639 4,933 34% 2010 2011 2012 2013 2014 2015 2016 2010 2011 2012 2013 2014 2015 2016 Gross Sales Under Banner adj. EBITDA 10,547 10,550 610 625 9,29
Slide 29: A long track-record of guidance delivery
A long track-record of guidance delivery Outlook 2011 P +3% Net sales Guidance 2016 P EUR540m EBITDA P 6,800 stores 2016 targets FY 2016 Status P <1.1x ND/EBITDA Gross sales under banner growth (ex- Outlook 2012 P +4% GSUB currency) at high-single digit +10.2% P EUR595m EBITDA P EUR315m EBIT A
Slide 30: Gross Sales Under Banner & adjusted EBITDA by segment
Gross Sales Under Banner & adjusted EBITDA by segment FY 2015 Gross sales under banner FY 2016 Gross sales under banner Iberia 63.9% Iberia 64.6% Emerging 36.1% Emerging 35.4% FY 2015 adj. EBITDA FY 2016 adj. EBITDA Iberia 82.1% Iberia 81.3% Emerging 17.9% Emerging 18.7% / 30
Slide 31: Sales performance
Sales performance % change % Q4 % change % (EURm) 2016 ex-FX change 2016 ex-FX change Gross Sales Under Banner 10,550.1 10.2% 0.0% 2,750.2 7.6% 1.7% Net sales 8,867.6 9.0% -0.6% 2,304.0 6.1% 1.0% LFL 8.7% 7.9% Iberia 1.0% 1.1% Emerging Markets 19.1% 18.1% +700.4 +294.2 +8.6 -1,076.0 10,546.7 +51.7 +
Slide 32: Iberia: Gross Sales Under Banner
Iberia: Gross Sales Under Banner 1,736.6 +10.1 -35.0 EURm 1,711.7 Q4 2015 LFL Space Q4 2016 EURm 6,738.4 +58.6 +17.6 6,814.6 2015 LFL Space 2016 / 32
Slide 33: Emerging markets: Gross Sales Under Banner
Emerging markets: Gross Sales Under Banner EURm 967.3 +178.2 +52.4 -159.3 1,038.6 Q4 2015 LFL Space FX Q4 2016 +739.8 +263.3 -1,075.8 EURm 3,808.3 3,735.6 2015 LFL Space FX 2016 / 33
Slide 34: Operating performance
Operating performance % change % Q4 % change % (EURm) 2016 ex-FX change 2016 ex-FX change Adjusted EBITDA 625.1 8.6% 2.4% 196.0 13.9% 7.2% Adjusted EBITDA margin 7.0% -2 bps 21bps 8.5% 59 bps 49 bps Adjusted EBIT 392.7 5.8% -0.9% 138.3 18.3% 9.2% Adjusted EBIT margin 4.4% -13 bps -1 bps 6.0% 64 bps
Slide 35: Iberia: operating performance
Iberia: operating performance % Q4 % (EURm) 2016 change 2016 change Adjusted EBITDA 508.0 1.4% 147.1 2.8% Margin 8.8% 13 bps 10.2% 56 bps Adjusted EBIT 329.6 -2.0% 104.6 5.7% Margin 5.7% -11 bps 7.3% 58 bps / 35
Slide 36: Emerging markets: operating performance
Emerging markets: operating performance % change % Q4 % change % (EURm) 2016 ex-FX change ex-FX change 2016 Adjusted EBITDA 117.1 41.9% 7.3% 48.9 53.4% 22.7% Margin 3.8% 44 bps 31 bps 5.7% 125 bps 68 bps Adjusted EBIT 63.1 49.7% 5.6% 33.7 63.4% 22.0% Margin 2.0% 36 bps 14 bps 3.9% 115 bps 45 bps / 3
Slide 37: Attributable & Underlying Net Profit
Attributable & Underlying Net Profit % % change (EURm) 2015 2016 ex-FX change Adjusted EBIT 396.1 392.7 -0.9% 5.8% Non-recurring items (122.0) (97.7) -19.9% -16.1% of which cash items (94.2) (73.0) -22.6% EBIT 274.1 295.1 7.6% 15.5% Net financial expenses (56.0) (52.0) -7.1% 26.2% Income taxes 82.6
Slide 38: Underlying EPS +3.9% in 2016 (+6.1% ex-currency)
Underlying EPS +3.9% in 2016 (+6.1% ex-currency) 0.415 0.406 0.422 EUR 0.35 0.287 2012 2013 2014 2015 2016 FX and acquisitions impact in 2015 and 2016. *Ex-currency / 38
Slide 39: Circa EUR1bn distributed to shareholders since listing
Circa EUR1bn distributed to shareholders since listing 0.21 0.20 0.18 0.16 EUR 0.13 0.11 EUR0.21/share dividend distribution 2016 profits implies 49.8% pay-out / 39
Slide 40: Cash-Flow
Cash-Flow (EURm) 2015 2016 Adjusted EBITDA 610.1 625.1 Non-Recurring cash items (94.2) (73.0) Capex (563.3) (345.4) CASH FROM OPERATIONS (47.4)* 206.8 Income tax paid (57.2) (6.1) Change in Trade Working Capital (160.2) 287.1 Financial investments (14.0) (33.3) Capex suppliers change 18.2 0.0 Acquis
Slide 41: Balance sheet
Balance sheet 31 December 2015 31 December 2016 Non-current assets 2,355.1 2,507.3 Inventories 562.5 669.6 Trade & Other receivables 221.2 260.9 Other current assets 141.0 113.9 Cash & Cash equivalents 162.8 364.7 TOTAL ASSETS 3,442.6 3,916.3 Total equity 313.2 392.1 Long-term debt 921.0 1,062.3 Sho
Slide 42: Net debt
Net debt EURm 1,132.4 -206.8 -287.2 +97.8 878.3 +142.1 Net debt 2015 Cash from Change in TWC Dividend and Other Net debt 2016 operations Share buyback EUR38.5m related to divestments / 42
Slide 43: Debt structure as of 31 December 2016
Debt structure as of 31 December 2016 41 11 365 43 15 EURm 188 40 5 99 878 800 / 43
Slide 44: Financial leverage
Financial leverage 1,200 1,132 4 EURm 1,000 878 3 800 651 Net Debt 600 533 2 Net Debt/EBITDA 1.9x 400 1.4x 1 200 1.1x 0.9x - 0 2013 2014 2015 2016 / 44
Slide 45: Debt maturity and liquidity as of 31 December 2016
Debt maturity and liquidity as of 31 December 2016 225 EURm Total Drawn Undrawn 400 RCF 700.0 99.0 601.0 Other Credit Lines 133.4 41.4 92.0 75 500 Commercial Paper 45.0 - 45.0 300 10 Cash & Equivalent 364.6 364.6 121 2017 2018 2019 2020 2021 TOTAL 1,243.0 140.4 1,102.7 Bonds Bilaterals RCF 2014 RCF
Slide 46: Trade Working Capital
Trade Working Capital # of days of Trade Working Capital (over COGS, 365 base) -48 -51 -54 -38 32 29 35 25 10 14 12 14 -83 -97 -79 -103 2013 2014 2015 2016 Trade & other receivables Inventories Trade & other payables 2016 factoring of EUR88.4m, equivalent to 4.7 days of COGS / 46
Slide 47: Capex outlook
Capex outlook 400 33% 34% 300 200 67% 66% 100 0 Iberia Emerging markets Total capex 2016 2017E 2016 2017E Expansion On-going / 47
Slide 48: Leading industry returns, well ahead of sector average
Leading industry returns, well ahead of sector average 21.7% 21.7% 21.7%* 22.1%* 21.6%* 21.1% 20.9% 20.7% 19.4% Sector 11.9% average 2011 2012 2013 2014 2015 2016 ROI = EBITDAR / Average invested capital. Average invested capital = Equity + Net debt + Average D&A + 5x Rent adjustment Market average
Slide 49: Stores by country and operational model as of 31/12/2016
Stores by country and operational model as of 31/12/2016 COCO Franchise TOTAL Change Change in sqm Spain 2,728 2,147 4,875 -66 -3.3% Portugal 367 256 623 2 0.5% IBERIA 3,095 2,403 5,498 -64 -2.9% Dia 1,614 2,296 3,910 63 2.3% Market 938 1,935 2,873 77 Maxi 676 101 777 14 Cada DIA 0 260 260 -28 Clare
Slide 50: Dia banner store evolution at DIA Group
Dia banner store evolution at DIA Group 400 300 200 100 0 2011 2012 2013 800 600 400 200 0 2014 2015 2016 Openings Closings Net openings / 50
Slide 51: Growing penetration of Dia banner franchised stores
Growing penetration of Dia banner franchised stores 61% 62% 54% 48% 42% 38% 33% 27% 2009 2010 2011 2012 2013 2014 2015 2016 Reported data / 51
Slide 52: Business review: Iberia
Business review: Iberia 2015 2016 Change # stores 4,941 4,875 -66 # franchised stores 1,954 2,147 193 SPAIN Total store selling area (sqm) 1,939,900 1,876,400 -3.3% Gross Sales Under Banner (EURm) 5,914.9 5,966.6 0.9% Net Sales (EURm) 5,076.7 5,064.0 -0.2% # stores 621 623 2 PORTUGAL # franchised st
Slide 53: Business review: Emerging Markets
Business review: Emerging Markets Change 2015 2016 Change ex-FX ARGENTINA # stores 846 872 26 # franchised stores 584 576 -8 Total store selling area (sqm) 230,800 238,700 3.4% Gross Sales Under Banner (EURm) 1,922.1 1,642.6 -14.5% 36.4% Net Sales (EURm) 1,532.3 1,310.9 -14.4% 36.5% # stores 929 1,0
Slide 54: DIA Club figures in 2016
DIA Club figures in 2016 Spain Portugal Argentina China Brazil TOTAL Million of active card holders 8.05 1.69 4.34 1.5 4.05 19.63 Million of new members 1.06 0.14 0.99 0.19 3.29 5.67 % of sales 69% 68% 91% 86% 66% 76% / 54
Slide 55: Total Shareholder Return
Total Shareholder Return ANNUALISED TSR (from 5/July/2011 to 16/February/2017) 18.1% 10.6% 8.2% 6.0% 4.0% 0.7% 1.0% 1.2% -0.2% -10.1% / 55
Slide 56: LTIP 2016-18 performance metrics
LTIP 2016-18 40% weight. Cumulative Organic Cash From Operations (CFO). Minimum Operating Performance Target EUR800m of cumulated CFO in the 2016-18 period. • Threshold = EUR700m • Target = EUR800m • Maximum = EUR900m 20% weight. Relative Organic Sales Average Growth (ROSAG). No payment if growth is
Slide 57: Currency performance
Currency performance Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 FY 2016 24.5% 19.1% 18.6% 16.6% 17.2% 11.6% 9.7% 6.9% 8.0% 5.9% 5.2% EUR/ARP 0.7% EUR/BRL -2.7% EUR/CHY -3.2% -5.9% -5.9% -5.0% -4.8% -5.2% -10.0% -14.4% -17.4% -23.0% -24.4% -25.1% / January 2017 change: -3
Slide 58: PARQUE EMPRESARIAL DE LAS ROZAS Jacinto Benavente, 2 A Las Rozas (Madrid) Spain -
PARQUE EMPRESARIAL DE LAS ROZAS Jacinto Benavente, 2 A Las Rozas (Madrid) Spain - Postcode: 28232 +34 91 398 54 00 www.diacorporate.com
Distribuidora Internacional de Alimentación, S.A. (DIA) — FY2016 Earnings Presentation on 6ix