September 2019 Strategy & 2Q19 Results · Shopping malls and department stores quickly adapted to...
Transcript of September 2019 Strategy & 2Q19 Results · Shopping malls and department stores quickly adapted to...
September 2019Strategy & 2Q19 Results
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OMNI-EXPERIENCE ENTITY
- Private label cards *- VISA cards- 5.2M card holders
126 boutiques (Presence in +65% of country)
27 Shopping malls (Presence across 17 states)
121 stores (Nationwide presence)
138 stores (Nationwide presence)
*For Liverpool & Suburbia.
Omni-experience
- Digital Sales- Click & Collect- Liverpool Pocket- Seller´s App- Extended Catalog- Marketplace
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ProfitabilityImprovement
Digital Transformation
Suburbia´sGrowth
STRATEGIC PRIORITIES
Omni-experience
CX & BD
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SUBURBIA´S PRIORITIESMaintain successful business model
Accelerated expansion to reach 250 total
units by 2022
Development of our own credit cardLaunched in July 2018
Omni-experiencelaunch
World class
Suburbia.com platform
Talent development model
Create CRM capabilities
Best in class IT(SAP S/4 Hana)Implementation
completed
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DIGITAL TRANSFORMATION PRIORITIES
Logistics: Shipments Consolidation &
Delivery TimeFulfilled delivery time & New DC for 2021
IT PlatformState of the art technology
New Payment Methods
Continue Development of Click & Collect
Half of e-commerce sales
Seller´s AppExtended Catalog
Marketplace -Full IT Integration
-10% of sales took place in-store-98% of returns were made on sales floor
As of June 30th 2019
Liverpool Pocket104% sales growth
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CUSTOMER EXPERIENCE & BIG DATA PRIORITIES
Customer 360° View
Business Intelligence
Segmentation
Customer Service
Advanced Analytics
Customer Knowledge
Holistic customer view
-Descriptive analytics -Predictive models-Prescriptive models-Cognitive models (AI)
-Personalized communication (CRM)-Increase R-F-M
-Customer identification-Unique customer
-Comprehensive knowledge of customer behavior-Experiences design & value generation
Clients, channels, products payment methods, etc.
Department stores closed some of these departments.
As well as the overexpansion, one of the main reason of the B&M fall.
E-commerceOverexpansion
Off-Price
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RETAIL EVOLUTION: USA & MEXICO
- Based on Quick Response method.
- The supply chain is the backbone of these business.
Fast Fashion
Offer convenient prices on selected items.
Price Clubs
- Offer a wide variety of consumer goods.
- Some of them follow the EDLP (everyday low price) policy.
New Breed ofSupermarkets
Physical department stores declined in sales and traffic while B&M openings were increasing .
Category Killers
In the USA, department stores failed on adapting to
new customer needs.
Usually offering surplusmerchandise from mayor retailers or from their parent brand at discount prices.
Shopping malls and department stores quickly adapted to the new trends
Department stores remain as a destination point for
consumers.
In Mexico:
Department Stores GrowthReplaced mom and pop’s with a convenient and self service shopping place.
Up to 1970s
In USA:
Mexico has endured these evolution steps
Apply for Mexico
Doesn´t apply for Mexico
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Highly Recognized Liverpool Brand
Liverpool Cards- Payment Solutions- Preferred Online Payment Method (+65%)- Lowest Fraud Index & Surcharges
Logistics Infrastructure121 Stores
2 National DCs1 Central Warehouse
+40 Regional WarehousesArco Norte under construction
Store Network-Click & Collect (half of e-commerce sales)-Seller´s App (Extended Catalog )-Store fulfillment (+87% of orders)-Customer Service (Seamless Returns)-Mobile POS (+10K units in store)
Retail Assortment, Extended Catalog
& Market Place
OMNI-EXPERIENCE RIGHT TO WIN
Liverpool PocketDownloads (67% increase YoY)Most important digital channel
1 40.7% Revenue growth and 57.4% EBITDA growth over the last 5 years
2 Mobile Only
3 Omni-experience
4 Marketplace
E-COMMERCE PRIORITIES
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LIVERPOOL DIGITAL ACHIEVEMENTS
MARKETPLACE5% of commercial offering
CLICK & COLLECTHalf of e-commerce sales
E-COMMERCE SALES30.2% increase 2019 YTD
DIGITAL SALES8.3% of total sales CUSTOMER 360° (BIG DATA)
Technological infrastructure on customer dataAlgorithms to create focused promotions
Customer personalizationData on over 15M customers
LIVERPOOL POCKET67% increase in downloads
Liverpool.com.mx50% increase in website visits
Top three in bounce rate & visit average time
EXTENDED CATALOGItems sold 3.4x vs. YA (approx.)
As of June 30th 2019:
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LIVERPOOL POCKET
Credit Card Payments
Account Balance
Safe Transactions
Access to Market Place & Extended Catalog
Real Time Inventory Availability by Store
Our most important digital channel104% sales growth
Click & Collect option Account Monthly Statement
Follow Up
Order Tracking
Our digital customer is worth 4x a normal customer.
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CUSTOMER EXPERIENCE & BIG DATAHyper-personalization
Web
App
SMS / Push
Contact Center
SMS/Push
SMS / Push
Seller’s App
Analytics ModelsNext best offer that generates value to our customers.
Communication PlatformIdentify & personalize our offers.
Unique Customer ProgramImprove our customer knowledge.
2018 – Unique Customer Program2019 – Next Best Offer & Action Model Design2020 – Hyper-Personalized Communication Enabled
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HYPER-PERSONALIZATION CUSTOMER MODEL
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CURRENT LOGISTICS PLATFORM
95% SKU´sCentrally received
+ 165 M Products delivered
by our DCs 1
+4.6 MAnnual home
deliveries 2
1 On a 12 month base2 Packages & Big ticket
121 Stores2 National DCs1 Central WHS
+40 Regional WHS
14% reduction in average
delivery time
94% delivered on or before
time
Savings by using store network to
deliver
Supplier
Distribution Center
Department Stores
Delivery
Customer
50% increase in purchase
orders
As of June 30th 2019
87% of home deliveries from store
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LOGISTICS PLATFORM CONTINUED GROWTHARCO NORTE PROJECT
$8.5MM MXPEstimated CAPEX
(2019-2021)
Hard LinesSoft Lines
20212022
SustainabilityFlexibility Scalability
1.2M sqmt
+450 acres
BEST-IN-CLASS TECHNOLOGY & PROCESSES
Consolidation of our DCs operations
$16.8MM MXPEstimated Total CAPEX
Master Plan
1800 mts
900 mts
LARGEST LOGISTICS CENTER IN LATIN AMERICA
Optimization of our Omni-experience
Click & Collect
Liverpool Pocket
Seller´s App Women´s Wear New Floor & Brand Layout
ExperienciaGourmet
New Gift Registry Experiences
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STORE ECOSYSTEM: EXPANDING EXPERIENCES
BX Beauty
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CAPEX (Ps $ in millions)
$3,944
$4,970
$7,958
2017201620152014
4K
3K
1K
2K
5K
0
$4,873
$8,418
2Q192Q182018
$3,403
6K
8K
7K
9K
10K
$8,592
10%
5%
0%
15%
20%
% RevenueCapex
Stores & Shopping
Mall Expansion
Maintenance
IT Investment
Store & Shopping
Mall Remodeling
Logistics
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FINANCIAL HIGHLIGHTS
EBITDA Margin
SG&A *
EBITDA *
Total Income *
Gross Margin
Net Income *
IFRS 16 Recognized in 1Q19
IFRS 9 Recognized in 2018
Total Debt
Net Debt / EBITDA
10.9%
39.8%
18.5%
10.3%
10.3%
14.9% 1
16.6%
0.73x
(1) Flat vs. YA* YoY
2018
1 Liverpool + Suburbia + Digital *Figures in Million MXP2 Liverpool + Suburbia **All figures without IFRS 163 Liverpool only.
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RETAIL SALES 2
2Q19 8.7% increaseYTD 8.1% increase
REVENUES2Q2019 $35,663MYTD $63,133M
CAPEX$3,403MYTD
EBITDA MARGIN2Q19 30 bps decreaseYTD 30 bps decrease
LIVERPOOL AT A GLANCE
SSS 12Q19 6.8% increaseYTD 5.6% increase
EBITDA2Q2019 $5,212MYTD $7,718M
NPL´s2Q2019 5.6%10 bps vs. YA
CREDIT CARD3
46% of total retail sales
CARD HOLDERSMore than 5.3M
OPERATING CF$820MYTD
STORE OPENINGS2 Liverpool Stores 3 Suburbia Stores through 2019
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8.7% 7.1% 4.8% 6.9%
Department Stores
SSS
SSSSSSSuburbia
SSSLiverpool
Retail Sales
15%
10%
0%
5%
RETAIL SALESANTAD Departmental Stores 2Q19
15%
10%
0%
5%
8.1% 6.1% 5.1% 3.6% 5.3%
Department Stores
SSS
SSSTrafficLiverpool
AverageTicket
Liverpool
SSSSuburbia
SSSLiverpool
Retail Sales
15%
10%
0%
5%
15%
10%
0%
5%
2Q19
ANTAD Departmental Stores 2019 YTD2019 YTD
Liverpool & Suburbia
5.0%
2.5%1.0%
Annual Growth:
Liverpool
Suburbia
TOTAL
2017 2018
5.8% 6.5%
10.6%
7.1%
22
4.6% (1)
(1) Starting in April ´17
SAME STORES SALES GROWTH
2019
6.1%
2.5%
5.6%
4.1%6.1% 6.8%
4Q173Q172Q171Q17
15%
10%
0%
5%
20%
-5%
Suburbia
Liverpool
5.1%5.9%
4Q193Q182Q181Q18 2Q191Q19
7.4%6.4%6.3%
4.9%
7.1%
4.7%7.3%3.2%
17.1%
11.4%
6.6%
11.5%
(0.5%)
5.0%
Quarter Growth:
Consistent growth above
ANTAD
ANTAD
Millions
Initial balance of reserve
(+) New Reserves
(-) Write off
201820182019 Dif. %
4,014 3,086 3,086 29.1%
10.2%
7.3%
2nd Quarter YTD
Ending balance of reserve
2019
3,982
Dif. %
30.1%
1,431 1,280 2,029 2,236 11.8%
(809) (726) (1,475) (1,583) 11.4%
27.3% 4,636 3,640 3,6404,636 27.3%
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CREDIT CARD DIVISION2Q2019
4.5%5.0%
4.5%
4Q173Q172Q171Q17
4%
3%
1%
2%
5%
0%
5.6% 5.1%
4Q183Q182Q181Q18 2Q191Q19
5.7%
4.5%
5.8%5.2% 5.6%
6%
10%
5%
-2.5%
0%
15%
20%
Preferred payment method
online and in B&M
NPL´s within company targets
Change vs. YANPLs
3,000 3,400 3,500
2019 2020 2021 2022 2023 2024 2025 2026 2027
Local Bonds 144A Reg S
100.0%
Fixed
(3) Fully hedged in Pesos: principal + interest
By interest type:
14,546 (2)
3,948 (1)
(1) LIVEPOL24 144A Reg S US$300 million, fixed exchange rate 13.15 MxPs/USD (2) LIVEPOL26 144A Reg S US$750 million, fixed exchange rate 19.39 MxPs/USD
By Instrument:
By currency:
34.9%
65.1%
Local Bonds
144A Reg S
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34.9%
65.1%
Pesos
Synthetic Pesos (3)
Leverage
Million Pesos (as of June 30th 2019)
Total Debt: Mx$28,394.1 (not including IFRS16)(Includes derivative instruments acquired for hedging purposes)
Average interest rate: 7.97% Average life: 6.5 years
DEBT STRUCTURE & MATURITY PROFILE
0.06x
1.0x
20142013
1.5
1.0
0
0.5
2.0
Net Debt/EBITDA
Debt/EBITDA
1.2x0.9x
2018201720162015 2Q192Q18
1.6x1.4x
1.8x1.6x
1.4x
0.6x
1.1x
0.4x0.7x
0.9x1.1x
0.8x
$12,536 $13,024$14,870
$16,051
$18,350$20,237
$7,224 $7,71816.9% 16.1% 16.3% 16.0% 15.0% 14.9%
12.5% 12.2%6.0%
11.0%
16.0%
21.0%
26.0%
31.0%
36.0%
1,000
6,000
11,000
16,000
21,000
2013 2014 2015 2016 2017 2018 2018 Σ2Q 2019 Σ2Q
$6,506
$4,821
$8,652
$11,691 $11,650$12,453
$2,802 $2,5828.7%
5.9%
9.5%11.6%
9.5% 9.2%
4.8%4.1%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
2,000
4,000
6,000
8,000
10,000
12,000
2013 2014 2015 2016 2017 2018 2018 Σ2Q 2019 Σ2Q
Cash flow
%Revenue
$74,504$81,214
$91,293$100,442
$122,168
$135,535
$57,896 $63,133
2013 2014 2015 2016 2017 2018 2018 Σ2Q 2019 Σ2Q
Liverpool has been a consistent performer, delivering solid results throughout the years
Same store sales growth
6%7%
6%
Revenues(Ps $ in millions)
7% 8%
10%
EBITDA and EBITDA margin(Ps $ in millions)
Operating Cash flow(Ps $ in millions)
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8%6%
Return on Invested Capital (ROIC)
11.10%
9.60%8.90%
9.40%8.60%
9.90%
-1.0%
1.0%
3.0%
5.0%
7.0%
9.0%
11.0%
13.0%
15.0%
2015 2016 2017 2018 2018 Σ2Q 2019 Σ2Q
FINANCIAL PERFORMANCE TRENDS
• Financial statements• Growth history
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Appendix
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INCOME STATEMENT2Q2019
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INCOME STATEMENT2019 YTD
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BALANCE SHEET2Q2019
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CASH FLOW
0 1 2 48
15
26
36
43
5156
61
70
8590
99104 106
112 114
131136
128
123
131
137
1.4x1.7x
1.0x
1.8x
0.9x
1.4x
0.5x 0.6x0.9x
1.1x
0.6x0.4x
0.06x
0.9x 0.7x 0.8x
0
1
2
3
4
5
6
7
8
0
20
40
60
80
100
120
140
Liverpool Stores Suburbia Stores Net Debt/EBITDA
Historically, Liverpool has reinvested its profits to expand its operations (Number of Stores)(1)
Profitable growth and significant value creation through the development of a dense network of stores across Mexico and selected acquisitions.
Source: Company website and annual reports.(1) Includes Liverpool and Fábricas de Francia formats. Does not include Suburbia
1982 – Inaugurates its first stores
outside of Mexico City
1988 – Acquisition of Fábricas de
Francia, incorporating 5 more stores
1997 – Acquisition of Las Galas, a
department store chain with 7 outlets
1934 – First Liverpool department
store inaugurated in Mexico City
1962 – Second Liverpool opens in
Insurgentes, Mexico City
2013 – Reaches 100 department
stores
1998 – Acquisition of Salinas y
Rocha, allowing Liverpool to increase
its portfolio by 11 stores
1965 – Launches IPO in the Mexican
Stock Market
2017 – Liverpool buys 100% of
Suburbia with its 122 stores (April)
1980 – Liverpool begins to operate
the Perisur mall, being its first real
estate operation
1847 – J.B. Ebrard arrives to Mexico
City from France
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COMPELLING STORY OF DISCIPLINEDGROWTH FOR THE LAST 170 YEARS
Contact [email protected]
IR: www.elpuertodeliverpool.mxwww.liverpool.com.mx
Stock Information
Bolsa Mexicana de Valores (BMV): LIVEPOL