Omni-Channel Strategy

Corporate Presentation 2014
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Grupo Éxito
Grupo Éxito is a leading retailer in Colombia and Uruguay with Net Revenues of COP$10.7 billion in 2013 and
42% share of the formal market through a network of 524 stores. Its multi-format and multi-brand strategy
includes hypermarkets, supermarkets, convenience and soft-discount stores that operate under the nationallyrecognized brands Éxito, Carulla and Surtimax in Colombia and Disco, Devoto and Geant in Uruguay.
In addition to retail, Grupo Éxito has alliances and joint ventures with various industry specialists to offer its
clients in Colombia a well-positioned portfolio of complementary businesses. The Company is the third-largest
credit card issuer after Visa and MasterCard, the second-largest travel agency and the number 1 seller of
mandatory vehicle insurance in the nation. Moreover, Grupo Éxito operates 21 gas stations in its main
hypermarkets, is the first retailer in Colombia that provides virtual mobile services and recently launched
International Money Transfers. All this complementary businesses continue gaining share in the Company´s
results, specially its real estate business, which the Company develops and operates in property strategically
located.
Grupo Éxito also holds clear competitive advantages supported by its omni-channel strategy. It is an online
sales leader in Colombia through its sites: www.exito.com, www.carulla.com and cdiscount.com.co. The
Company has in-depth customer knowledge gathered by monitoring more than 80% of sales through its loyalty
program. Grupo Éxito has also developed a strong logistical network of 15 distribution centers and platforms,
as well as a full range of private label products in food and non-food categories.
Grupo Éxito is committed to responsible employment and human rights, the establishment of fair relationships
with suppliers and customers, the fight against climate change, the minimization of the environmental impact of
its operations, and the contribution to the progress of the local communities where it operates, with an emphasis
on the development of children through Fundación Éxito. The Company seeks to ensure that its activities
contribute to the country's growth by adhering to a framework of transparency and respect for federal
regulations, that are in line with Global Compact principles, all while ensuring value for all stakeholders.
www.grupoexito.com.co
exitoinvestor.relations@grupo-exito.com
Agenda
1. Grupo Éxito Strategy: Leading the Trends in Consumption
• Colombia & Uruguay: Opportunities for Retail
• Omni-Channel Strategy
• Retail Business
• Proximity & Convenience
• E-commerce Business
• Complementary Businesses
• Real Estate
• Financial Results
2. Key Strategic Drivers & Social Responsibility
Two Countries with Sound Macroeconomics
Colombia
Colombia
High End
Uruguay
A Country of Opportunities
End
 47 millionHigh
inhabitants
- 55% under 29
years of age
 Growing middle class – 16,3% (2002) to
28% (2013) - while poverty reduces
 3rd Regional Economy USD7,750
GDP/capita
 Informal Market Potential 52%
 More than 17 cities with > 200k inhabitants
Uruguay
A Country with High Purchasing Power
 USD14,450* GDP/capita (highest in the
Low End
Brands & Formats covering all
segments of the population
* Source: IMF
region)
 Wealthy and urbanized population
 Low penetration of formal market
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Strategy
Leading the Trends in Consumption
Omni-channel Strategy
• Multi-Brand & Multi-format
Hyper
Super
Express
Discount
• E-commerce
Proximity & Convenience
• To high & medium levels
• To the low income brackets
Click & Collect, Drive-in, Home Delivery
Complementary Businesses
•
•
•
•
•
•
Financial Retail
Travel
Insurance
Mobile Virtual Operator
Money Transfers
Gas Stations
Real Estate
Sustainability
• Shopping Centers
• Commercial
Galleries
• Casual Leasing
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Omni-channel Strategy
Connecting Physical & Virtual Channels
Omni-Channel Strategy
ecommerce
Bricks &
Mortar
Institutional
Sales
Drive In
Mobility
Complementary
Businesses
Home
Customer in
the center
Delivery
Click &
Collect
Virtual
Kiosks
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Omni-channel Strategy: Colombia
Retail Business: Well Positioned Brands & Formats
236 stores
« At your service »
Hypermarkets,
Supermarkets &
Convenience stores
 Value for Money
 Customer Service
 Food and non-food
86 stores
150 stores
50 stores *
«A pleasure for everyday» « Where buying costs less »
Supermarkets &
Convenience stores
Convenience stores
 Best in Fresh &
Imported products
 Soft Discount Proposition
 Premium products
 Top Experience
 High % of Private Label
 To low income levels
*pending integration
Omni-channel Strategy: Uruguay
Retail Business: Top-of-mind Brands
« With you everyday »
Supermarkets
28 stores
 Food & non-food products
 Customer Service
Supermarkets
24 stores
 Best in Fresh
Hypermarkets
2 stores
 High share of non-food
products
 Imported and
Premium products
 Complementary services
Proximity & Convenience
“Aliados Surtimax”, the Business Model
• “Aliados Surtimax”, a commercial alliance
with independent stores
• High penetration of Grupo Éxito´s private label
• Sourcing through Grupo Éxito´s logistics and
distribution networking
Before
After
• Surtimax brand recognition at the base of the
pyramid
Low Capex Investment




A shop sign to identify the ally
Outside lights
Tent
Signboards
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Omni-channel Strategy: e-commerce
Leading the On-line Market in Colombia
 Food and non-food
products
 Click & Collect
 Drive-in
 App for mobiles
 Food products
 Premium & imported
 Recipes
 First on-line discounter

Non-food products only
 Market Place
 Alliance with Groupe Casino
 Young, dynamic, innovative
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Complementary Businesses
Business Model Based on Profitable Alliances
Financial Retail
JV with Bancolombia
Third credit card issuer in Colombia
Near 1,8 million cards issued
Travel Business
JV with Avianca
61 travel agencies / 20 cities
2nd travel agency in Colombia
1.4 million clients
Real Estate Developments
11 “Viva” Shopping Centers
Over 200k sqm GLA in Shopping
Centers and Commercial Galleries
Insurance
JV with Grupo Sura
More than 140,000 policies issued
More than 600 thousand clients
Gas stations
Mobile Virtual Operator
The cheapest minute in the market
Over 200k users
Over 300 million loyalty points
redeemed
International Money
Transfer Service
Starting from the USA
2.1 million transactions
20 gas stations across the country
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Real Estate Projects 2012-2017
Developed in Current Land Bank Strategically Located
Operating
Under Construction
(Additional Gross Leasable Areas to the 140k sqm as of 2011)
+26,000 sqm
2012
+19,000 sqm
+35,000 sqm
+60,000 sqm
2013
2014
2015
2016
GE Share
GE Share
Envigado stage 0 100% Viva Sincelejo
51%
Viva San Pedro III
51%
Viva Riohacha 100%
Viva Barranquilla
100%
Viva Villavicencio
51%
Other projects 100%
Other projects
Viva Laureles
80%
Other projects
100%
Other projects
GE Share
+70,000 sqm
GE Share
GE Share
90%
100%
Vizcaya (under const) 51%
Other projects
100%
Under Structuring 2015 -2017
Viva Envigado Stage 1&2
Viva Suba
Viva Colina
Viva Cúcuta
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Financial Results
Income Statement FY2013
FY2012
Millions of
COP
Millions of
COP
10,696,961
10,229,673
4.6%
5,392,512
5,114,926
5.4%
2,842,154
2,669,801
6.5%
1,380,449
1,321,297
4.5%
26.6%
26.1%
+50 bp
25.6%
25.8%
-20 bp
544,588
494,167
10.2%
211,851
195,810
8.2%
5.1%
4.8%
+30 bp
3.9%
3.8%
+10 bp
438,407
475,305
-7.8%
180,329
169,247
6.5%
4.1%
4.6%
-50 bp
3.3%
3.3%
0 bp
932,026
858,725
8.5%
409,376
390,778
4.8%
8.7%
8.4%
+30 bp
7.6%
7.6%
0 bp
Net Revenues
Gross Profit
Gross Margin
Operating Income
Operating margin
Net Income
Net margin
EBITDA
EBITDA margin
FY13/12
1H14
1H13
Millions of COP
Millions of
COP
1H14/13
13
Consistent Growth and Profitability
Financial Results 2009-2013
Net Revenues (COP$bn)
EBITDA (COP$bn) and Margin (%)
CARG 09-13: 11.3%
10,229
8.4%
8.4%
10,697
7.7%
932
859
8.1%
8,844
6,982
8.7%
CARG 09-13: 14.7%
743
7,510
610
538
2,009
2010
2011
2012
2013
2,009
Net Income (COP$bn) and Margin (%)
2010
2011
4.6%
475
4.4%
2013
Market Cap (COP$bn)
15,889
CARG 09-13: 31.4%
4.4%
2012
13,428
4.1%
11,396
438
389
2.1%
7,787
255
6,497
147
2009
2010
2011
2012
2013
2009
2010
2011
Note: Billion (bn) as 000,000,000. Figures include Disco and Devoto since 4Q11.
2012
2013
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Our Key Strategic Drivers
Profitable Growth, Service & Innovation
1. Omni-Channel Expansion
Increase Coverage





Enter Mid-Sized Cities
Saturate Existing Urban Markets
Assure e-commerce Leadership
Strengthen Complementary Businesses
Real Estate Developments
5. International
2. Commercial Performance
Look Beyond
Accentuate Differentiation
 Synergies with Uruguay
 Explore Opportunities in other
LatAm Markets
Focus on
Customer
 Best Customer Service
 Enhance CRM
 Product Innovation
 “Allies” Business Plan with Key Suppliers
 Private Brand Strengthening
4. HR & Sustainable Development
Drive Superior Service
 Talent Development and Retention
 Children Nutrition
 Sustainability as Company Culture
3. Operating Excellence
Improve Competitiveness
 Improve Working Capital & Return on Investments
 Strict Cost / Expense Control
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Strategy
Capex 2014e: USD $250 million
Expansion
 Retail expansion by nearly 10% in sales areas
(7% Super Inter + 3% Organic)
 Transaction with Super Inter & Integration
 Viva projects
Omni-channel
 Investment in Cdiscount.com.co
• JV with Casino Enterprise: USD$10 million
• Pure Player website complementing exito.com & carulla.com
• Leadership & Consolidation of e-commerce in Colombia
 Investment in CNova and CLatam
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Sustainability Initiatives
Child Nutrition
 35k Children (US 9.5m)
 National Goal - GEN 0 (2025)
Fair Trade
Purchase from Origin
 95% Purchase in Colombia
 91% SMEs (Small & Medium Enterprises)
 100 fishermen cooperatives
 526 producers-suppliers
Surtimax Allies
 Allies – Mom & Pops
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Appendix
Exito “E“ new hypermarket design
1905
1949
Incorporation of Incorporation of
2001
Acquisition
77 stores
2006
Launch of Exito
Credit Card
2007
Acquisition
270 stores
Casino acquired
control
Launch of
exito.com
Launch of Exito
Travel
2011
2012
•Launch of
Capital
Viva Brand
increase
USD1,4 billion
Acquisition
52 stores in
Uruguay
2013
•Omni-channel
Strategy
• Lauch of
Surtimax Allies
• Launch of
Money transfer
& Mobile Virtual
Operator
 42% share of the formal market, 2x the second player
 Market leader in Colombia and Uruguay
A Track Record of Profitable Growth
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Ownership Structure
As of Dec 31, 2013
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20
Action Plan in Uruguay
Value Creation Opportunities
Stage 1
Loyalty Program Integration
Stage 2
Sales Mix Optimization
Stage 3
Introduction of New Formats
 Expansion in smaller cities with
 Disco “Mas” & Devoto “Hipercard”
cards
Cost Synergies
Complementary Businesses
 Development of E-Commerce,
proximity and convenience formats
in high and low end brackets.
consumer credit, travel and the
insurance businesses
Real Estate Optimization
 Increase % of centralization
 Cost Controlling Initiatives: hire own
personnel, implementation of Exito´s
Colombia software to optimize
check out productivity
Capex and Working Capital
 Cost Initiatives: upgrade of logistics
processes, centralized workshops
for perishables processing
 Working Capital: leverage on skills
developed by Éxito-Colombia in
inventory tracking
 Commercial development of
adjacent areas into mini-malls
and other related activities
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Infrastructure Impact – 4G Program
Septiembre de 2013
No. 1608
RIOHACHA
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PARAGUACHON
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BARRANQUILLA
Buenavista
San Juan
Ponedera
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PARAGUACHON
Cuestecitas
SANTA MARTA
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San
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í
PALO DE LETRAS
CÚCUTA
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Occidente
Camilo C
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SOGAMOSO
ZIPAQUIRA
PEREIRA
GIRARDOT
CALI
VILLAVICENCIO
CÚCUTA
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Pamplona
BUGA
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TAME
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PTO. SALGAR TUNJA
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La Manuela
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MANIZALES
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NEIVA
POPAYÁN
CHACHAGÜÍ
PASTOMOCOA
PASTO
Current Structure
New Structure APP - 4G
Source: Agencia Nacional de Infraestructura
22
8%
2013 T4
2013 T2
2012 T4
2012 T2
2011 T4
2011 T2
2010 T4
2010 T2
2009 T4
2009 T2
2008 T4
2008 T2
2007 T4
2007 T2
2006 T4
10%
2006 T2
2005 T4
2005 T2
Consumption – Real Annual Growth
Consumo de los hogares
Consumo del Gobierno
6.1%
4.9%
6%
4%
2%
0%
-2%
Source: DANE.
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Note on Forward-Looking
Statements
This presentation may contain forward-looking
statements regarding expected developments and
expectations about future events. These
statements are subject to economic, political,
governmental and market conditions, risks and
uncertainties, both domestically and globally,
which may affect the performance of the economy,
the retail industry and the Company overall.
Factors such as variations in interest rates,
inflation rates, exchange rate volatility and tax
rates, among others, may cause actual results,
performance and achievements of the Company
to differ from the estimates provided at any time.
For that reason, the Company does not accept
responsibility for any variations or for the
information provided by official sources.
www.grupoexito.com.co
exitoinvestor.relations@grupo-exito.com
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