Company Overview (BMV: Walmex) August 31, 2015
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 30 Competitors 36 Walmex Resources 43 3
History of Walmex
History: founded in 1958 1958 1 City with Walmex presence First Aurrerá 1959 1958 1964 First Superama First Vips 1970 1977 First Bodega Aurrerá First Suburbia Cifra starts trading on the Mexican Stock Exchange 5
History: Walmart s first international business & 1991 11 Cities with Walmex presence Joint venture between Cifra and Wal-Mart Stores, Inc. First Sam s Club in Mexico City 1991 1993 First Walmart Supercenter in Mexico City 1997 Stores, Inc. STOCK MEXICAN EXCHANGE Wal-Mart Stores, Inc. acquires majority position in Cifra - Tender offer on the MSE 6
History: EDLP successfully introduced into Mexico 1999 38 Cities with Walmex presence Introduction of EDLP 2003 1999 2004 Walmart de México Foundation created First Mi Bodega 2005 2005 Wal-Mart Stores, Inc. acquires 33% of the shares of CARHCO (Central American Retail Holding Company) 2007 Superama.com.mx Online grocery sales pilot 2006 Wal-Mart Stores, Inc. increases its holding to 51% of CARHCO License issued to operate a bank in Mexico 7
History: Bodegas expansion and incorporation of Central America 224 Cities with Walmex presence 2008 2008 First Bodega Aurrerá Express 2010 2011 Walmart de México acquires 100% of Walmart Centroamérica First Walmart Supercenter in Central America (Honduras) 2013 2014 Walmart de México y Centroamérica sells its Restaurant Division to Alsea Walmart.com.mx launches 2015 Walmart de México y Centroamérica sells its Bank to Inbursa 8
Continuous profitable growth CAGR : 12.4% Sales (Mx$ billion) 437.7* EBITDA (Mx$ billion) CAGR: : 13.7% 42.9* 136.5 11.9 2004 2014 2004 2014 9 * Walmex fiscal year: January-December
Growth across multiple formats Total Sales (Mx$ billion) % CAGR 16.3% 41.0 185.5* Total Sales (Mx$ billion) % CAGR 12.3% 37.1 118.7* Total Sales (Mx$ billion) % CAGR 8.8% 39.3 91.3* 2004 2014 2004 2014 2004 2014 Total Sales (Mx$ billion) % CAGR 13.8% 8.0 29.2* Total Sales (Mx$ billion) % CAGR 6.8% 6.8 13.1* 2004 2014 2004 2014 * Walmex fiscal year: January-December 10
Walmex Today
Walmex: Listed on the Mexican Stock Exchange Wal-Mart Stores, Inc. 70% 30% ADR: WMMVY OTCQX Market Cap: Mx$ 701 bn 1 Weight on the MSE index: 7.84% 2 nd most traded stock on the MSE 12 1. As of August 31, 2015 Mexican Stock Exchange Sustainable Index
Company description Sales (Mx$ billion) Units Countries Cities Business formats e-commerce sites Distribution centers Associates (thousand) As of August 31, 2015 468.7 2,999 6 573 5 3 24 +229 * ** Contribution to 2014 sales Mexico 85.9% Central America 14.1% Costa Rica El Salvador Guatemala Honduras Nicaragua * Last 12 months to August 31, 2015 ** As of June 30, 2015 13
Basic general merchandise, food and household items at the best prices. Value Driver: Price % of 2014 Walmex sales Customer target Cities* Mexico Central America Operating units* Mexico Central America 42.3 D, E 435 124 1,675 574 SQ. FT. SKUs Proposition Bodegas 45,600 32,000 Weekly shopping 12,700 11,200 Small towns Tiendas de Descuento 3,850 4,400 Fill-in trip 14 * As of August 31, 2015
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 2014 Walmex sales Average sq. ft. SKUs Customer target 27.1 82,400 90,000 B, C, D+ Cities* Prototypes 88 3 Operating units* Mexico Central America 251 23 16 * As of August 31, 2015
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
Membership warehouse clubs focused on businesses and high income households. Value Drivers: Price leader, volume, new and unique merchandise % of 2014 Walmex sales Average sq. ft. SKUs 20.9 76,300 4,500 Customer target A, B, C+, Negocios Cities* Prototypes Operating units* Mexico Central America 87 4 159 1 18 * As of August 31, 2015
Business Member Individual Member 19
Supermarkets Supermarkets Neighborhood located supermarkets in residential with areas outstanding fresh and food departments at reasonable prices. Value Drivers: Quality, convenience and service % of 2014 Walmex sales Average sq. ft. SKUs Customer target 6.7 16,150 30,000 A, B, C+ Cities* Prototypes Operating units* Mexico Central America 45 2 94 97 20 * As of August 31, 2015
Local format branding Costa Rica Nicaragua Guatemala & Honduras Mexico El Salvador 21
Basic fashion for the entire family. Value Drivers: Fashion with the best value, price-quality ratio % of 2013 Walmex sales Average sq. ft. Customer target 3.0 41,500 C+, D Cities* Prototypes Operating units* Mexico 44 3 115 22 * As of August 31, 2015
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Superama.com.mx: online grocery sales leader Web page Mobile Apps 24 Source: Euromonitor International Call Center
Walmart.com.mx: online general merchandise Differentiated catalogue Delivery Audio Auto Baby Books Cell Phones Computers Electronics Health & Beauty Home Household Appliances Categories Jewelry & Accessories Musical Instruments Pets Photography Smart House Sports Toys Video Games Furniture Patio & Garden 25
Walmart.com.mx: groceries and perishables Meal Solution, grains & pasta Dairy Produce Meat & Fish Deli Bakery & Bread Beverages Wine & Liquor Frozen Foods Pharmacy Categories 26
Income Level Flexible multiformat operation Flexible Prototypes D E B C D+ A B C+ C+ D Sales Area (Sq. Ft.) 20,000 40,000 60,000 80,000 100,000 27
Regional store presence 573 Cities with Walmex presence 28 As of August 31, 2015
Efficient distribution network Monterrey (2) 24 Distribution Centers Culiacán (1) Mexico City (6) Guadalajara (2) San Pedro (2) Villahermosa (2) Guatemala (2) Managua (1) San José (2) Amatitlán (1) El Salvador (2) Tegucigalpa (1) 29
Financial Information
Walmex: 2014 Results* 2014 2013 % Increase (Mx$ million) $ % $ % Total revenues 440,988 100.0 423,823 100.0 4.1 Gross margin 97,619 22.1 92,948 21.9 5.0 General expenses 64,010 14.5 61,318 14.5 4.4 Operating income 34,716 7.9 31,636 7.5 9.7 EBITDA 42,854 9.7 40,305 9.5 6.3 Net income before disc. operations 25,041 5.7 21,988 5.2 13.9 Net income 30,435 6.9 22,713 5.4 34.0 * Walmex fiscal year: January-December 31
Walmex: 2Q15 Results* (Mx$ million) Total revenues Gross margin General expenses Earnings before Other income Other income Operating income EBITDA Net income before disc. operations Net income 2Q15 $ % $ % 114,398 24,888 17,218 7,670 151 7,821 10,293 5,401 6,811 100.0 21.8 15.1 6.7 0.1 6.8 9.0 4.7 6.0 104,123 22,579 15,172 2Q14 % 7,407-75 7,332 9,646 5,128 10,418 100.0 21.7 14.6 7.1-0.1 7.0 9.3 4.9 10.0 Growth 9.9 10.2 13.5 3.6 301.3 6.7 6.7 5.3-34.6 32 * Walmex fiscal year: January-December
Mexico: 2014 Results* 2014 2013 % Increase (Mx$ million) $ % $ % Total revenues 378,778 100.0 366,393 100.0 3.4 Gross margin 83,690 22.1 80,109 21.9 4.5 General expenses 52,970 14.0 50,610 13.8 4.7 Operating income 30,697 8.1 29,520 8.1 4.0 EBITDA 38,526 10.2 36,861 10.1 4.5 * Walmex fiscal year: January-December 33
Mexico: 2Q15 Results* (Mx$ million) Total revenues Gross margin General expenses Earnings before Other income Other income Operating income EBITDA 2Q15 $ % $ % 96,126 20,705 13,865 6,840 163 7,003 9,042 100.0 21.5 14.4 7.1 0.2 7.3 9.4 89,521 19,249 12,498 6,751-84 6,667 8,632 2Q14 % Growth 100.0 21.5 14.0 7.5-0.1 7.4 9.6 7.4 7.6 10.9 1.3 294.2 5.0 4.8 34 * Walmex fiscal year: January-December
Central America: 2014 Results* 2014 2013 % Increase (Mx$ million) $ % $ % In peso terms On a constant currency basis Total revenues 62,210 100.0 57,430 100.0 8.3 7.3 Gross margin 13,929 22.4 12,839 22.4 8.5 7.4 General expenses 11,040 17.7 10,708 18.6 3.1 2.1 Operating income 2,878 4.6 2,116 3.7 36.0 34.7 EBITDA 4,328 7.0 3,444 6.0 25.7 24.5 * Walmex fiscal year: January-December 35
Central America: 2Q15 Results* (Mx$ million) Total revenues Gross margin General expenses Earnings before Other income Other income Operating income EBITDA 2Q15 18,272 4,183 3,353 830-12 818 1,251 100.0 22.9 18.4 4.5-0.1 4.5 6.8 2Q14 $ % $ % 14,602 3,330 2,674 656 9 665 1,014 100.0 22.8 18.3 4.5 0.1 4.6 6.9 In peso terms % Growth 25.1 25.6 25.4 26.6-234.9 23.0 23.3 On a constant currency basis 5.9 6.3 6.1 7.0-212.8 4.1 4.4 36 * Walmex fiscal year: January-December
Financial strength Walmex Balance Statement June 30, 2015 (Mx$ million) Cash Inventories Assets 18,819 44,851 Liabilities & Shareholders Equity 44,692 Suppliers Fixed assets & others 166,235 185,213 Shareholders equity & others TOTAL $ 229,905 37
Growth Program 2015 Sales Area Growth 5.4% 2.4% 2.1% Total Walmex Additional million sq. ft. 1.7 Sales area Mexico Central America 38
Competitors
Selected self-service competitors Listed on the MSE 2014 Sales (Mx$ bn) 101.8 Private 71.4 47.9 40
ANTAD: Self-service and Department Stores Association 2014 Mx $1,184 billion in sales +100 Members 266.9 million sq. ft. Self-service Department Specialized % Participation 60 19 21 to sales 41
Informal market remains a large competitor 42
Associates 2014 highlights: $85 million pesos invested in training 1.5 average training days per associate 33% of management positions are filled by women 43
Community support 2014 highlights: 13,507 small producers developed and selling their products to Walmex 63,300 people benefitted in disaster relief program in Mexico 133,850 associates participated as volunteers 44
Environmental commitment and success 2014 highlights: Mx$ 874 million in savings from sustainability initiatives 42 million of kwh saved through energy efficiency initiatives in our stores 8% less water used at comp stores in Mexico 5 renewable energy projects that feed 49% of our stores in Mexico 45
Walmex resources Investor Relations: www.walmex.mx Corporate: www.walmartmexicoycam.com.mx Online & sales: www.superama.com.mx www.walmart.com.mx Other business formats: www.sams.com.mx www.suburbia.com.mx www.bancowalmart.com.mx 46