March 31, 2018 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) 569.4 EBITDA (Mx$ billion) 55.5 219.7 22.0 2007 2017 2007 2017 9 Walmex fiscal year: January-December
Growth across multiple formats Total Sales (Mx$ billion) CAGR 13.5% 255.3 CAGR 9.8% 157.0 72.2 61.4 2007 2017 2007 2017 CAGR 6.8% 115.8 CAGR 13.1% 38.8 59.8 11.3 2007 2017 2007 2017 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$ 808 bn 1 Weight on the MSE index: 6.9% 2 nd most traded stock on the MSE Mexican Stock Exchange Sustainable Index 12 1 As of March 31, 2018
Company description As of March 31, 2018 Revenues (Mx$ billion) 586 * Units 3,156 Countries 6 Cities 637 Business formats 4 ecommerce sites 3 Distribution centers 23 Associates (thousand) +238 Mexico 81.2% Contribution to 2017 sales 18.8% Central America 13 * Last 12 months as of March 2018
Basic general merchandise, food and household items at the best prices. % of 2017 Walmex sales 45.1 Customer target C, D, E Cities* 625 Value Driver: Price Operating units* Mexico 1,830 Central America 663 SQ. FT. (average) SKUs (average) Units Approach 45,000 32,000 504 Weekly shopping 12,620 11,200 480 Small towns 3,800 4,400 1,509 Fill-in trip 14 * As of March 31, 2018
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 2017 Walmex sales 27.7 SQ. FT. (average) 80,900 SKUs 90,000 Customer target A/B, C, D+ Cities* 93 Prototypes 4 Operating units* Mexico 272 Central America 29 16 * As of March 31, 2018
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 2017 Walmex sales 6.8 SQ. FT. (average) 16,100 SKUs 30,000 Customer target A, B, C Cities* 45 Prototypes 2 Operating units* Mexico 94 Central America 95 18 * As of March 31, 2018
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 2017 Walmex sales 20.4 SQ. FT. (average) 76,700 SKUs 4,500 Customer target A, B, C, D, Business Cities* 86 Prototypes 4 Operating units* Mexico 163 20 * As of March 31, 2018
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 TV s & video Sports Consumer Appliances Electronics Cameras Home Musical Instruments Jewelry & accessories Toys Books Pets Health & Beauty Video Games 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 C, D, E A/ B, C, D A, B, C, D A, B, C, D 26 Sales Area (Sq. Ft.)
Regional store presence 637 Cities with Walmex presence Mexico 485 31 Honduras Guatemala 47 El Salvador 21 28 25 Nicaragua Costa Rica 27 * As of March 31, 2018
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 March 31, 2018
29 Financial Information
Walmex: 1Q18 Results 1Q18 1Q17* % Growth (Mx$ millon) $ % $ % Total revenues 145,054 100.0 132,576 100.0 9.4 Gross margin 33,213 22.9 30,386 22.9 9.3 General expenses 21,973 15.1 20,645 15.6 6.4 Earnings before other income 11,240 7.7 9,741 7.3 15.4 Other income 94 0.1 156 0.1 (39.9) Operating income 11,334 7.8 9,897 7.5 14.5 EBITDA 14,378 9.9 12,778 9.6 12.5 Income from continuing operations 8,349 5.8 7,061 5.3 18.2 Net income 8,349 5.8 7,130 5.4 17.1 30 *2017 figures adjusted for accounting reclassifications
Mexico: 1Q18 Results 1Q18 1Q17* % Growth (Mx$ million) $ % $ % Total revenues 117,921 100.0 105,825 100.0 11.4 Gross margin 26,716 22.7 23,993 22.7 11.4 General expenses 17,157 14.5 15,794 14.9 8.6 Earnings before other income 9,559 8.1 8,199 7.7 16.6 Other income 82 0.1 152 0.1 (46.0) Operating income 9,641 8.2 8,351 7.9 15.5 EBITDA 11,986 10.2 10,558 10.0 13.5 31 *2017 figures adjusted for accounting reclassifications
Central America: 1Q18 Results 1Q18 1Q17* % Growth (Mx$ million) $ % $ % In peso terms On a constant currency basis Total revenues 27,133 100.0 26,751 100.0 1.4 11.4 Gross margin 6,497 23.9 6,393 23.9 1.6 11.7 General expenses 4,816 17.8 4,851 18.1 (0.7) 9.1 Earnings before Other income 1,681 6.2 1,542 5.8 9.0 19.8 Other income 12 0.0 4 0.0 181.7 203.9 Operating income 1,693 6.2 1,546 5.8 9.5 20.3 EBITDA 2,392 8.8 2,220 8.3 7.8 18.4 32 *2017 figures adjusted for accounting reclassifications
Financial strength Cash Inventories 33,938 54,450 Balance sheet statement (March 31 2018 Mx$ Million) TOTAL: $279,277 68,758 Suppliers Fixed assets and other 190,889 210,519 Shareholders equity and other Assets Liabilities & shareholders' equity 33
Growth Program 2018 (Mx$ billion) CAPEX (% Total) 12.7 12.5 14.3 17.4 20.9 Fresh Upstreaming ecommerce & Technology Logistics 28% 10% 3% Total CapEx: $20.9B 30% Existing Stores (Remodels & maintenance) 2014 2015 2016 2017 2018 29% New Stores 34
35 Competitors
Selected self-service competitors Listed on the MSE Revenues* (Mx$ billion) Private 153.9 95.6 17.1 36 * Last 12 months as of March 2018
ANTAD: Self-service and Department Stores Association March 2018* Mx $ 1,667 billion in sales Department 22% % Participation to sales 26% Specialized +100 Members 308.9 million sq. ft. Self-service 52% 37 * Last 12 months as of March 2018
Informal market remains a large competitor 38
Associates 2017 highlights: 01 MX$65 million invested in training 02 23,413 promoted associates 03 35% of management positions are filled by women 39
Community support 2017 highlights: 01 15,966 small producers developed 02 29,971 tons were donated household necessities donated through the armed forces 03 75,558 volunteers Associates, family members and customers participated as volunteers 40
Environmental commitment and success 2017 highlights: 01 MX$ 1,310 million investment in sustainability initiatives 02 1.41% energy savings vs. 2016 03 1,046 water treatment plants 04 91% of our units are supplied by renewable energy 05 The zero waste objective: 73% progress in Mexico & 50% 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