September 30, 2017 Company Overview (MSE: Walmex)
This presentation is property of Wal-Mart de México S.A.B. de C.V. and is intended for the use of the company s shareholders and the investment community. It should not be reproduced in any way. This presentation may contain certain references concerning Wal-Mart de Mexico S.A.B. de C.V. s future performance that should be considered as good faith estimates made by the Company. These references only reflect management expectations and are based upon currently available data. Actual results are always subject to future events, risks and uncertainties, which could materially impact the Company s actual performance. 2
Table of contents History of Walmex 4 Walmex Today 11 Financial Information 29 Competitors 35 Walmex Resources 42 3
4 History of Walmex
History: founded in 1958 1958 Aurrerá start operations 1964 Vips Restaurants start operations 1977 Cifra starts trading on the Mexican Stock Exchange Superama start operations 1959 Bodega Aurrerá & Suburbia start operations 1970 5
History: Walmart s first international business 1991 1997 2003 Joint venture between Cifra and Wal-Mart Stores, Inc. & Wal-Mart Stores, Inc. acquires majority position in Cifra - Tender offer on the MSE Walmart de México Foundation created Walmart Supercenter start operations Stores, Inc. Introduction of Every Day Low Prices 1993 1999 6
History: Bodegas expansion & incorporation of Central America 2004 2007 2010 Mi Bodega start operations License issued to operate a bank in Mexico Walmart de México acquires 100% of Walmart Centroamérica Superama.com.mx Online grocery sales pilot Wal-Mart Stores, Inc. acquires 33% of the shares of CARHCO (Central American Retail Holding Company) 2005 Bodega Aurrerá Express expansion 2008 7
History: Sells its Restaurant Division, the Bank and Suburbia 2011 2014 2017 First Walmart Supercenter in Central America (Honduras) Walmart de México y Centroamérica sells its restaurant division to Alsea Walmart de México y Centroamérica sells Suburbia to Liverpool Walmart.com.mx launches 2013 Walmart de México y Centroamérica sells its bank to Inbursa 2015 8
Continuous profitable growth Sales (Mx$ billion) 528.5 EBITDA (Mx$ billion) 50.1 194.0 19.0 2006 2016 2006 2016 9 Walmex fiscal year: January-December
Growth across multiple formats Total Sales (Mx$ billion) CAGR 14.2% 235.7 CAGR 10.6% 145.5 62.5 53.2 2006 2016 2006 2016 CAGR 7.3% 107.4 CAGR 14.1% 38.0 53.3 10.2 2006 2016 2006 2016 10 Walmex fiscal year: January - December
11 Walmex Today
Walmex: Listed on the Mexican Stock Exchange Wal-Mart Stores, Inc. 70% 30% ADR: WMMVY OTCQX Market Cap: Mx$ 755 bn 1 Weight on the MSE index: 6.94% 3 rd most traded stock on the MSE Mexican Stock Exchange Sustainable Index 12 1 As of September 30, 2017
Company description As of September 30, 2017 Revenues (Mx$ billion) 563 * Units 3,076 Countries 6 Cities 623 Business formats 4 ecommerce sites 3 Distribution centers 23 Associates (thousand) +239 Mexico 81.3% Contribution to 2016 sales 18.7% Central America 13 * Last 12 months as of September 2017
Basic general merchandise, food and household items at the best prices. % of 2016 Walmex sales 44.8 Customer target D, E Cities* 607 Value Driver: Price Operating units* Mexico 1,782 Central America 641 SQ. FT. (average) SKUs (average) Units Approach 45,000 32,000 496 Weekly shopping 12,620 11,200 462 Small towns 3,800 4,400 1,465 Fill-in trip 14 * As of September 30, 2017
Mama Lucha She is the average Mexican housewife: she wants the best for her family, but faces a constant struggle (lucha in Spanish) to make ends meet. She is Mexico s favorite luchadora, who fights against high prices together with Bodega Aurrerá. She brings the lowest prices to all families. 15
Widest assortment of goods at Every Day Low Prices. Value Drivers: Price and assortment % of 2016 Walmex sales 27.6 SQ. FT. (average) 80,900 SKUs 90,000 Customer target B, C, D+ Cities* 93 Prototypes 4 Operating units* Mexico 266 Central America 28 16 * As of September 30, 2017
Carrito Carrito is the perfect shopping partner. He knows our customer better than anyone and he understands what motivates her to shop. Only Carrito can join, advise and listen to our customer in order to help her find everything she needs when she comes to Walmart. Qualities: Friendly, curious, helpful, observer, good listener, fun, responsible, practical, intelligent, ally, accomplice. 17
Neighborhood supermarkets with outstanding fresh and food departments at reasonable prices. Value Drivers: Quality, convenience and service % of 2016 Walmex sales 7.2 SQ. FT. (average) 16,100 SKUs 30,000 Customer target A, B, C+, C Cities* 45 Prototypes 2 Operating units* Mexico 94 Central America 94 18 * As of September 30, 2017
Local format branding Costa Rica Nicaragua Mexico El Salvador Guatemala & Honduras 19
Membership warehouse clubs focused on businesses and high income households. Value Drivers: Price leader, volume, new and unique merchandise % of 2016 Walmex sales 20.4 SQ. FT. (average) 76,700 SKUs 4,500 Customer target A, B, C+, Business Cities* 86 Prototypes 4 Operating units* Mexico 161 20 * As of September 30, 2017
Business Member Individual Member 21
Superama.com.mx: online grocery sales leader Web page Delivery Mobile Apps 22 Call Center
Walmart.com.mx: online general merchandise Differentiated catalogue Delivery Categories Audio Auto & tires Baby & toddler Books Cell Phones Computers & tablets T V s & video Sports Cameras Home Musical Instruments Jewelry & accessories Toys Books Pets Health & Beauty Consumer Appliances Video Games Electronics Patio & Garden Furniture 23
Walmart.com.mx: groceries and perishables Categories Meal Solution, grains & pasta, snacks Pharmacy, Health & Beauty Beverages, Wine & liquor Cleaning Supplies & Pets Frozen Food Produce Dairy, Eggs & Cheese Meat, Seafood & Poultry Baby & toddler Deli Bakery & Bread 24
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Flexible multiformat operation Income Level Flexible Prototypes D, E B, C, D+ A, B, C+ A, B, C+, C 26 Sales Area (Sq. Ft.)
Regional store presence 623 Cities with Walmex presence Mexico 475 31 Honduras Guatemala 45 El Salvador 21 27 24 Nicaragua Costa Rica 27 * As of September 30, 2017
Efficient distribution network 2 2 23 Distribution Centers Culiacán Monterrey 2 Mexico City Guadalajara 5 2 Villahermosa Guatemala El Salvador Nicaragua 3 3 1 1 Honduras 2 Costa Rica 28 * As of September 30, 2017
29 Financial Information
Walmex: 3Q17 Results 3Q17 3Q16 % Growth (Mx$ millon) $ % $ % Total revenues 136,792 100.0 126,863 100.0 7.8 Gross margin 30,946 22.6 28,515 22.5 8.5 General expenses 20,292 14.8 19,248 15.2 5.4 Earnings before other income 10,654 7.8 9,267 7.3 15.0 Other income (184) (0.1) (133) (0.1) 38.1 Operating income 10,470 7.7 9,134 7.2 14.6 EBITDA 13,356 9.8 11,792 9.3 13.3 Income from continuing operations 8,003 5.9 6,695 5.3 19.5 Net income 8,677 6.3 10,049 7.9 (13.7) 30
Mexico: 3Q17 Results 3Q17 3Q16 % Growth (Mx$ million) $ % $ % Total revenues 112,109 100.0 102,948 100.0 8.9 Gross margin 24,964 22.3 22,773 22.1 9.6 General expenses 15,757 14.1 14,855 14.4 6.1 Earnings before other income 9,207 8.2 7,918 7.7 16.3 Other income (181) (0.2) (160) (0.2) 13.1 Operating income 9,026 8.1 7,758 7.5 16.3 EBITDA 11,292 10.1 9,850 9.6 14.6 31
Central America: 3Q17 Results 3Q17 3Q16 % Growth (Mx$ million) $ % $ % In peso terms On a constant currency basis Total revenues 24,683 100.0 23,915 100.0 3.2 10.2 Gross margin 5,982 24.2 5,742 24.0 4.2 11.3 General expenses 4,535 18.4 4,393 18.4 3.2 10.3 Earnings before Other income 1,447 5.9 1,349 5.6 7.3 14.6 Other income (3) (0.0) 27 0.1 (110.6) (111.3) Operating income 1,444 5.9 1,376 5.8 5.0 12.1 EBITDA 2,064 8.4 1,942 8.1 6.3 13.6 32
Financial strength Cash Inventories Balance sheet statement (September 30 2017 Mx$ Million) TOTAL: $270,570 26,444 64,006 57,548 Suppliers Fixed assets and other 186,578 206,564 Shareholders equity and other Assets Liabilities & shareholders' equity 33
Growth Program 2016 (Mx$ billion) CAPEX (% Total) 14.7 14.0 12.7 12.5 14.3 ecommerce & Technology Logistics 6% 13% 37% New Stores 44% 2012 2013 2014 2015 2016 Existing Stores (Remodels & maintenance) 34
35 Competitors
Selected self-service competitors Listed on the MSE Revenues* (Mx$ billion) Private 153.2 93.3 16.1 36 * Last 12 months as of September 2017
ANTAD: Self-service and Department Stores Association June 2017* Mx $ 1,601 billion in sales Department 19% % Participation to sales 27% Specialized +100 Members 27.0 million sq. ft. Self-service 54% 37 * Last 12 months as of September 2017
Informal market remains a large competitor 38
Associates 2016 highlights: 01 $110 million pesos invested in training 02 27,012 associates were promoted 03 33% of management positions are filled by women 39
Community support 2016 highlights: 01 17,629 small producers developed and selling their products to Walmex 02 13,405 people benefitted in disaster relief program in Mexico 03 113,411 associates, family members, and customers participated as volunteers 40
Environmental commitment and success 2016 highlights: 01 Mx$ 360 million in savings from sustainability initiatives 02 23.9 million of kwh saved through energy efficiency initiatives in our stores 03 16% less water used in Mexico 04 5 projects of renewable energy that feed 72% of our stores in Mexico 05 The zero waste objective 73% progress in Mexico & 60% in Central America 41
Walmex resources Investor Relations: www.walmex.mx Corporate: www.walmartmexico.com.mx Online & sales: www.superama.com.mx www.walmart.com.mx www.sams.com.mx 42