confidential march 2014 -...
TRANSCRIPT
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Confidential March 2014
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Agenda
1. Company Overview
2. Financial Summary
3. Investment plan 2014
4. How we will continue growing
2
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Investment Highlights
Brand Builder and Specialty
Retailer
Regional Presence in
Latin America
Strong Management
Team
Solid Financial Structure
Footwear, apparel and accessories
→ Brand builder: solid and wide brand portfolio of 32 brands.
→ Huge portfolio of 20 different concepts of retail stores in Latam.
→ 100% Focus on Retail Business (and not in real state and financial).
With operations in Chile, Peru, Uruguay and Colombia
→ 421 stores and 48,003 square meters in Latin America.
→ 273 stores in Chile 37 in Colombia
→ 45 in Uruguay 66 in Peru
Experienced management team in the retail sector
→ Expertise and Know-how of the business.
Solid financial structure with excellent financial track record
→ Strong growth in sales (CAGR = 17%) and profitability (CAGR = 31%) over the past 8 years (2005 to 2013).
→ High level of Cash. MM US$ 80.2 as of December 2013.
→ Low level of debt. Leverage below 0.4 since 2006. December 2013: 0.22
→ Market Cap. of MM US$ 1,203 as of March 5, 2014. 3
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4
Forus: Brands & Retail
32 Brands
20 stores’ concepts
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Our Brands – 32 brands
Licensed Brands
International Licensors:
Wolverine World Wide (USA)
Columbia Sportswear (USA)
Jones New York Group (USA)
Brooks (USA)
Sanuk (USA)
Jansport (USA)
Azaleia (Brazil)
Church’s (England)
Burton (USA)
Skullcandy (USA)
Alpinestars (USA)
Dakine (USA)
Burleigh Point Ltd (Australia)
26 brands
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Our Brands – 32 brands
Own Brands 6 brands
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e-commerce
Forus buys
2011
New stores of:
New stores of:
Forus buys Hush Puppies Peru operation
Enter in Colombia.
Forus buys the Uruguayan brand
Forus is opened in the stock market.
Enter in Peru.
Forus buys the brands Azaleia and Norseg.
New stores of:
New stores of:
Our History: 34 years of experience
1980 1982
Alfonso Swett S. start with Hush Puppies in Chile with 70% of participation. The remaining 30% was in the Wolverine World Wide hands
1995 1996 2001
2006 2007
Enter in Uruguay
Alfonso Swett S. buys the remaining 30% from the WWW
1988 1991
Forus buys the brand Calpany.
Born of the company name Forus S.A.
New stores of:
1990 1992
New
Brand
New
Chain
New Chain& Brand
2008 2009
Construction of the footwear’s factory in Chile
1993 2003
2010
New Distributi-on Center in Chile.
Joint Venture with WWW in Colombia.
New stores of:
20122005 2013
7
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In the last 6 years, since 2008 until 2013 Forus:
Created / acquired 15 brands
Entered into Peru
Created / acquired 11 new concepts of stores
Opened 203 stores: 34 as an average per year (2008-2013).
How fast can we be
8
20092008 2010 2011 20132012
e-commerce
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Corporate Structure
9
Forus S.A
Uruforus S.A.
(Uruguay)
Topsafety S.A.
(Norseg)
Peruforus S.A.
(Peru)
Forus Colombia
S.A.(Colombia)
LBC S.A.S.
(Colombia)
51.00%99.98% 49.00%100% 99.89%
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Management
10
BoardAlfonso Swett S. (33)
President+ 6 Board Members
CEOGonzalo Darraidou (13)
Commercial and MKT ManagerSebastián Swett (25)
Factory ManagerCarlos Espinoza (7)
Corporate Retail Real State Manager
Claudio Cabrera (9)
L&D ManagerPatricio Ramírez (7)
Corporate CFOMarisol Céspedes (14)
Uruguay CEO – Juan Strauch (8)
Colombia CEO – Alejandro Cruz (5)
Peru CEO – Eduardo Balbin (3)
HR & Legal ManagerManuel Somarriva (5)
Planning ManagerCarlos Díaz (7)
TopSafety CEOAndrés Infante (4)
Retail ManagerMatías Topali (7)
CFO ChileAndrés Celedón (1)
Head of IRMacarena Swett (6)
Investor RelationsJeanne Marie Benoit
Executive Director Alfonso Swett O. (20)
() years working in the company.
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Ownership Structure
Free Float: 31.9%
February 2014
Costanera63,0%Companies
related to Costanera
5,1%
Investment Funds18,0%
Institutional Investors
7,8%
Brokers5,7%
Others 0,4%
Free Float; 31,9%Controlling
Group68,1%
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Where are we
12
Uruguay
N° Stores: 45
% of total Sales: 8,1%
Sales: US $30.1 MM
# Concept stores : 8
Colombia
N° Stores: 37
% of total Sales: 2,8%
Sales: US $10.7 MM
# Concept stores : 5
Peru
N° Stores: 66
% of total Sales: 6,2%
Sales: US $22.8 MM
# Concept stores: 8
Chile
N° Stores: 273
% of total Sales: 82,8%
Sales: US $313.6 MM
# Concept stores : 18
Population: 30 MM
GDP per capita: US$6,441
Population: 46 MM
GDP per capita: US$7,673
Population: 17 MM
GDP per capita: US$15,037
Population: 3 MM
GDP per capita: US$14,432
Figures in US$ converted using the January 2, 2014 USD/CLP 524,61 exchange rate. MM = million. Chile’ Sales includes Top Safety business’ Sales.
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Retail Chile81,6%
Uruguay8,5%
Perú5,7%
Colombia3,0%
TopSafety1,2%
Revenues by Subsidiaries 2012
Retail Chile81,5%
Uruguay8,1%
Perú6,2%
Colombia2,8%
TopSafety1,4%
Revenues by Subsidiaries 2013
Sales by Subsidiaries
13
International Subsidiaries weight 17.2% of the total Revenues
in 2013.
17,2%17,2%
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Footwear is still the most important
Sales per Category Forus Chile
14
Footwear73%
Apparel20%
Accesories7%
2013
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# of Concepts’ Stores
Our Retail Stores per Country
18
8
5
8
Store’s ConceptsCountry
15
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Agenda
1. Company Overview
2. Financial Summary
3. Investment plan 2014
4. How we will continue growing
16
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Highlights 4Q 2013
New Brand and Retail chain Billabong in Chile & Perú
17
Launch E-commerce brand Merrell
Secondary Offering of Shares – 3% of the property
2 New Concept’ Store in Peru
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New stores openings 4Q 2013: 47
Highlights 4Q 2013
18
Chile 12
Uruguay 6
Colombia 5
Perú 24
5
1625
47
93
-4 -2 -1 -2 -9
1
14
24
45
84
1Q'13 2Q'13 3Q'13 4Q'13 2013
Opened Closed Net Openings
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4Q'13 % Revenues 4Q'12 % Revenues Var. % 13/12
Th Ch$ Th Ch$
Revenues 49.814.378 43.095.652 15,6%
Cost of Sales (20.294.217) -40,7% (17.443.871) -40,5% 16,3%
Gross Margin 29.520.161 59,3% 25.651.781 59,5% 15,1%- -
Logistic costs (145.249) -0,3% (376.918) -0,9% -61,5%
Administrative Expenses (19.354.847) -38,9% (15.486.822) -35,9% 25,0%
Selling, General and Administrative Expenses (19.500.096) -39,1% (15.863.740) -36,8% 22,9%
Operating Income 10.020.065 20,1% 9.788.041 22,7% 2,4%
Other incomes of total operation 939.106 501.380 87,3%
Other expenses of total operation (183.309) (124.350) 47,4%
Financial Income 359.645 385.418 -6,7%
Financial Expenses (118.979) (107.324) 10,9%
Participation in gains (losses) of joint venture businesses 193.120 79.551 142,8%
accounted by using the proportional value of participation
Exchange Differentials 1.044.655 507.206 106,0%
Result of Indexation units (15.066) (17.040) -11,6%
Other gains and losses (551.651) (288.378) 91,3%
Non-Operating Income 1.667.521 3,3% 936.463 2,2% 78,1%
Profit before income tax 11.687.586 23,5% 10.724.504 24,9% 9,0%
(Expenses) Income Taxes (1.854.068) (1.462.091) 26,8%
Profit (loss) 9.833.518 19,7% 9.262.413 21,5% 6,2%
Profit (loss) attributable to equity holders of parent 9.751.255 9.101.244 7,1%
Profit (loss) attributable to minority interest 82.263 161.169 -49,0%
Profit (loss) 9.833.518 19,7% 9.262.413 21,5% 6,2%
EBITDA 11.478.647 23,0% 11.056.825 25,7% 3,8%
expressed in Thousands of Chilean Pesos from October 1st to December 31
FORUS S.A. & SUBSIDIARIES
Consolidated Income Statement 3rd Quarter
Consolidated Income Statement 4Q’13
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2013 % Revenues 2012 % Revenues Var. % 13/12
Th Ch$ Th Ch$
Revenues 193.630.849 170.767.842 13,4%
Cost of Sales (81.426.550) -42,1% (73.455.167) -43,0% 10,9%
Gross Margin 112.204.299 57,9% 97.312.675 57,0% 15,3%
Logistic costs (1.607.588) -0,8% (1.559.106) -0,9% 3,1%
Administrative Expenses (67.708.467) -35,0% (57.622.935) -33,7% 17,5%
Selling, General and Administrative Expenses (69.316.055) -35,8% (59.182.041) -34,7% 17,1%
Operating Income 42.888.244 22,1% 38.130.634 22,3% 12,5%
Other incomes of total operation 2.049.895 660.154 210,5%
Other expenses of total operation (366.329) (245.500) 49,2%
Financial Income 1.854.216 1.557.119 19,1%
Financial Expenses (481.817) (410.815) 17,3%
Participation in gains (losses) of joint venture businesses 390.842 171.926 127,3%
accounted by using the proportional value of participation
Exchange Differentials 655.075 (1.011.827) -164,7%
Result of Indexation units (32.899) (35.425) -7,1%
Other gains and losses (607.234) (211.230) 187,5%
Non-Operating Income 3.461.749 1,8% 474.402 0,3% 629,7%
Profit before income tax 46.349.993 23,9% 38.605.036 22,6% 20,1%
(Expenses) Income Taxes (8.462.387) (7.239.408) 16,9%
Profit (loss) 37.887.606 19,6% 31.365.628 18,4% 20,8%
Profit (loss) attributable to equity holders of parent 37.822.476 31.194.225 21,2%
Profit (loss) attributable to minority interest 65.130 171.403 -62,0%
Profit (loss) 37.887.606 19,6% 31.365.628 18,4% 20,8%
EBITDA 48.209.871 24,9% 42.494.713 24,9% 13,4%
FORUS S.A. & SUBSIDIARIES
Consolidated Income Statement
expressed in Thousands of Chilean Pesos accumulated to December
Consolidated Income Statement 2013
20
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Data in nominal values (in local currency)
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2012 2013
SSS 14,0% 17,9% 5,7% -2,0% 2,2% 4,3% 5,9% 8,4% 8,3% 5,3%
20132012
P&L 4Q '13 % Revenues 4Q '12 % Revenues Var. % 13/12
Revenues 34.340 29.469 16,5%
Cost of Sales -13.115 -11.189 17,2%
Gross Margin 21.225 61,8% 18.280 62,0% 16,1%
Operating Income 8.624 25,1% 7.543 25,6% 14,3%
P&L 4Q '13 % Revenues 4Q '12 % Revenues Var. % 13/12
Revenues 39.203 34.603 13,3%
Cost of Sales -15.678 -13.991 12,1%
Gross Margin 23.525 60,0% 20.611 59,6% 14,1%
Operating Income 8.957 22,8% 8.245 23,8% 8,6%
Retail Chile
Retail 4Q
Same Store Sales
21
Wholesale 4Q
Retail + Wholesale 4Q
12% of Sales in
Chile
88% of Sales in
Chile
P&L 4Q '13 % Revenues 4Q '12 % Revenues Var. % 13/12
Revenues 4.863 5.134 -5,3%
Cost of Sales -2.563 -2.802 -8,5%
Gross Margin 2.299 47,3% 2.331 45,4% -1,4%
Operating Income 333 6,9% 702 13,7% -52,5%
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P&L 2013 % Revenues 2012 % Revenues Var. % 13/12
Revenues 37.177 33.901 9,7%
Cost of Sales -19.113 -18.532 3,1%
Gross Margin 18.064 48,6% 15.369 45,3% 17,5%
Operating Income 10.125 27,2% 8.266 24,4% 22,5%
P&L 2013 % Revenues 2012 % Revenues Var. % 13/12
Revenues 124.132 108.940 13,9%
Cost of Sales -49.415 -43.528 13,5%
Gross Margin 74.717 60,2% 65.413 60,0% 14,2%
Operating Income 29.308 23,6% 26.002 23,9% 12,7%
Retail Chile
Retail 2013
22
23% of Sales in
Chile
Wholesale 2013
77% of Sales in
Chile
Retail + Wholesale 2013
P&L 2013 % Revenues 2012 % Revenues Var. % 13/12
Revenues 161.309 142.841 12,9%
Cost of Sales -68.528 -62.060 10,4%
Gross Margin 92.781 57,5% 80.781 56,6% 14,9%
Operating Income 39.433 24,4% 34.268 24,0% 15,1%
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Data in nominal values (in local currency)
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2012 2013
SSS -0,6% 11,0% 6,7% 11,2% 18,2% -1,3% 8,9% 11,9% 8,0% 9,3%
2012 2013
Colombia
Financial Statement 4Q
Same Store Sales
23
4,0% Consolidated
2013
Without Intra-company Sales 4Q
P&L 4Q '13 % Revenues 4Q '12 % Revenues Var. % 13/12
Revenues 1.970 1.925 2,3%
Cost of Sales -959 -901 6,5%
Gross Margin 1.011 51,3% 1.024 53,2% -1,3%
Operating Income 170 8,6% 325 16,9% -47,7%
P&L 4Q '13 % Revenues 4Q '12 % Revenues Var. % 13/12
Revenues 1.970 1.836 7,3%
Cost of Sales -959 -812 18,2%
Gross Margin 1.011 51,3% 1.024 55,8% -1,3%
Operating Income 170 8,6% 325 17,7% -47,7%
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P&L 2013 % Revenues 2012 % Revenues Var. % 13/12
Revenues 5.517 5.093 8,3%
Cost of Sales -2.642 -2.158 22,4%
Gross Margin 2.875 52,1% 2.935 57,6% -2,0%
Operating Income -120 -2,2% 246 4,8% -148,9%
P&L 2013 % Revenues 2012 % Revenues Var. % 13/12
Revenues 5.589 6.270 -10,9%
Cost of Sales -2.714 -3.335 -18,6%
Gross Margin 2.875 51,4% 2.935 46,8% -2,0%
Operating Income -120 -2,2% 246 3,9% -148,9%
Colombia
Financial Statement 2013
24
2,8% Consolidated
2013
Without Intra-company Sales 2013
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Data in nominal values (in local currency)
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2012 2013
SSS 15,3% 22,0% 19,2% 10,5% 12,6% 0,2% 0,9% 4,2% 16,5% 4,2%
2012 2013
P&L 2013 % Revenues 2012 % Revenues Var. % 13/12
Revenues 11.967 9.687 23,5%
Cost of Sales -5.025 -4.369 15,0%
Gross Margin 6.942 58,0% 5.319 54,9% 30,5%
Operating Income 1.525 12,7% 986 10,2% 54,6%
P&L 4Q '13 % Revenues 4Q '12 % Revenues Var. % 13/12
Revenues 3.846 2.564 50,0%
Cost of Sales -1.484 -1.177 26,1%
Gross Margin 2.362 61,4% 1.387 54,1% 70,3%
Operating Income 534 13,9% 246 9,6% 117,4%
Peru
Financial Statement 4Q
Same Store Sales
25
7,7% Consolidated
2013
Financial Statement 2013
6,2% Consolidated
2013
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P&L 4Q '13 % Revenues 4Q '12 % Revenues Var. % 13/12
Revenues 4.466 4.221 5,8%
Cost of Sales -2.086 -1.812 15,1%
Gross Margin 2.380 53,3% 2.409 57,1% -1,2%
Operating Income 365 8,2% 899 21,3% -59,4%
P&L 2013 % Revenues 2012 % Revenues Var. % 13/12
Revenues 15.770 14.373 9,7%
Cost of Sales -7.229 -6.809 6,2%
Gross Margin 8.541 54,2% 7.564 52,6% 12,9%
Operating Income 1.990 12,6% 2.542 17,7% -21,7%
Data in nominal values (in local currency)
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2012 2013
SSS 12,6% 11,1% 8,8% 6,6% -5,7% -5,1% -12,0% -9,4% 9,5% -8,0%
2012 2013
Uruguay
Financial Statement 4Q
Same Store Sales
26
9,0% Consolidated
2013
Financial Statement 2013
8,1% Consolidated
2013
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108121
173202 199
230
271
326
369
2005 2006 2007 2008 2009 2010 2011 2012 2013
Growing Sales
Forus Consolidated Revenues
27
Historical Data in MM US$ (January 2, 2014 USD/ClP)
13,4%
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14,7%17,6%
19,0%18,3%
16,3%
20,7%
26,5%24,9%
24,9%
1621
3337
32
48
72
81
92
2005 2006 2007 2008 2009 2010 2011 2012 2013
EBITDA Margin
Forus Consolidated EBITDA
CAGR nominal (2005-2013) = 24,6%
EBITDA Margin
EBITDA 2828
13,4%
Historical Data in MM US$ (January 2, 2014 USD/ClP)
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813
1822
19
37
5460
72
2005 2006 2007 2008 2009 2010 2011 2012 2013
CAGR nominal (2005-2013) = 31,2%
Net Income
29ROSNet Income
20,8%
Forus Consolidated Net Income
29
7,6%
11,1%10,2% 11,1%
9,4%
16,0%
20,0%
18,4%19,6%
Historical Data in MM US$ (January 2, 2014 USD/ClP)
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0
50
100
150
200
250
300
350
400
450
2007 2008 2009 2010 2011 2012 2013
Chile Perú Colombia Uruguay
Operational Efficiencies
We have been achieving a more efficient operation through
decreasing Operational Costs as a percentage over Revenues
40,5%
39,8%
37,8% 38,0%
36,2%
34,7%
35,8%
Operational Cost / Revenues
30
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Agenda
1. Company Overview
2. Financial Summary
3. Investment plan 2014
4. How we will continue growing
31
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Investment Plan 2014
MM US$ 12
32
Consolidated Forus
Capex
40 new stores
New Stores
Estimated 2014
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Agenda
1. Company Overview
2. Financial Summary
3. Investment plan 2014
4. How we will continue growing
33
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How we will continue growing
34
International Expansion
Inorganic Growth
OrganicGrowth
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2-14 15-25 +26
Years
New Brands
Oportunities
35
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New Brands Comming
20
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# Stores
# Concept Stores
% of Total Forus Sales
Gross Margin %
2012
34
6
5,7%
54,9%
2013
66
8
6,2%
58,0%
Enhancing consolidation in Peru
37
2012 Stores51%
Organic Growth
23%
Billabong26%
Otros49%
Others
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Confidential March 2014