Joint Venture with Casa Bahia Investor Presentation. December 4, 2009



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Transcription:

Joint Venture with Casa Bahia Investor Presentation December 4, 2009 1

Disclaimer This presentation has been prepared in order to allow a better market understanding regarding the details of the announced transaction. In order to meet the abovementioned purpose, the companies management assumptions were considered, so as the evidences that make these the most likely scenarios. Future expectations related to this presentation shall consider the risks and uncertainties that involve any activities and transactions, and that are beyond the control of the companies involved in this transaction including, but not limited to, political and economic changes, volatility in the exchange and interest rates, technological changes, inflation, financial disintermediation, competitive pressure over products and prices, changes in corporate and tax regulation, and also the approval of CBD s Board of Directors and general shareholders meeting, and the relevant authorities). Therefore, forward-looking statements may result in material differences regarding future results. This material is not intended to be the sole basis for assessing the performance of the Company emerging from Ponto Frio acquisition, nor is it intended to contain all the information necessary for such an assessment. It does, however, reinforce CBD s strong commitment to transparency and the cementing of close investor relations. This presentation does not substitute or alter any information available in the terms of the current legislation and applicable corporate law. 2

Agenda 1) Rationale of the Joint Venture 2) Transaction Structure 3) Casa Bahia Highlights 4) The New Company 5) Next Steps 3

Tit: estrategia / abilio Rationale of the Joint Venture 4

Rationale of the Joint Venture Non-food Expansion Strategy Strategic decision made in 2007 to expand non-food operations and reinforce/protect core business of GPA First major strategic move made in June when GPA announced the acquisition of Ponto Frio Casa Bahia: Complementary market positioning in the durable goods segment Ponto Frio: focus on classes A, B and C Casa Bahia: focus on classes C and D Key dedicated players market share and positioning Ranking Positioning by social class A B C D E 1. Bahia 2. Ponto Frio 3. Magazine Luiza 4. Pernambucanas 5. Ricardo Eletro 6. Insinuante 5

Tit: estrategia / abilio Transaction Structure 6

Transaction Structure Setting-up of New Casa Bahia (NCB) i. CB brings operational assets to NCB; ii. CB brings assets and the CB.com brand to the subsidiary; CB CB Stores + DCs (~1.4 million m 2 ) 75% stake of Bartira (furniture factory) Receivables ~R$ 1 billion 100% Drop-down 100% Other non-operational assets CB.com NCB NCB Operational assets / liabilities Approximately R$ 950 million Net Debt Lease Agreement 10 years + 10 Approximately R$ 130 million/year 25% furniture factory Furniture supply agreement for 3 years Cost price; Fixed fee: R$ 18 million/year 7

Transaction Structure Setting-up of Globex i. GPA brings Extra Eletro operations to Globex; ii. Globex split up: PF.com + wholesale/ Ponto Frio + Extra Eletro; iii. GPA brings Extra.com to PF.com; GPA PF.com 100%¹ 100% ² Globex PF.com includes: Extra.com; Wholesale. Globex includes: Ponto Frio; Extra Eletro. 8 1) Considers total adhesion of Globex to PTO and does not consider management stock option 2) Considers total adhesion of Globex to PTO

Transaction Structure Integration i. Integration of NCB with PF; ii. Integration of CB.com with PF.com; GPA CB GPA CB 83% ¹ 17% 51%² 49%² Nova.com 100% Globex 100% CB.com NCB Internet Includes: Extra.com Ponto Frio.com PF Wholesale CB.com Store Operations Include: Extra Eletro Ponto Frio Casa Bahia 9 1) Does not consider Management stock option 2) Considers total adhesion of Globex to PTO

Transaction Structure Shareholders Agreement Joint Venture Agreement Term: 6 years; Governance: decisions taken by simple majority. Chairman: Michael Klein; GPA: 5 members; Casa Bahia: 4 members; Senior management 1 st mandate (2 years): CEO: Raphael Klein; VPs: Jorge Herzog, Roberto Fulcherberguer CFO: GPA Sale of shares : GPA as of 3 rd year; Casa Bahia: 12-month lock-up; from 12 to 48 months: 29%; from 49 to 72 months: 49%; as of the 73 rd month: 100%. Globex and Casa Bahia guarantee respective liabilities; Globex: GPA; Casa Bahia: properties and Globex shares; Properties: Lock-up: 6 years; Sale after lock-up: preemptive right for Globex; Total rental cost: approx. R$ 130m / year; Bartira: R$ 234 m: Put of 25% in 3 years; Call of 75% in 3 years. Shared services: centralization Accounting(GPA); Treasury (GPA); Suppliers (Globex); Logistics(Globex); 10

Tit: estrategia / abilio Casa Bahia Highlights 11

Casa Bahia Highlights Casa Bahia Ratios (2008) Market leader in durable goods segment; 513 stores (3Q09); Approximately 57,000 employees; Casa Bahia Gross Rev. (R$ Bn - exc interest) 13.9 Merchandise 12.7 Services 1.2 Stores 548 PF¹ 4.2 4.1 0.1 505 Strong brand, largest advertiser in Brazil; Sales Area (thousand m²) 1,005 Gross Revenue (R$ mm) / Stores 25.2 Gross Revenue (R$) / m² 13,766 365 8.3 11,525 Strong partnership with suppliers; Sales Area m²/stores 1,834 1)Ponto Frio: does not consider PF.com and wholesale 723 Well structured business (commercial, operations, logistics, IT, contact center, furniture factory); Casa Bahia 3% Sales Mix (2008) Ponto Frio Focus on low-income segments (C / D classes); 9% 9% 32% 30% 46% Largest Consumer Finance operation in retail: database of 30 million clients; 19% 28% 24% White goods Furniture Electronics Hard & Softw are Telecom Others Household appliances & furniture Electronics Photo, video, telecom, software 12

Tit: estrategia / abilio The New Company 13

The New Company CBD + Ponto Frio Highlights Leadership in the retail durable goods segment with approximately R$ 18.1 billion revenue (including e-commerce); 1,015 stores (3Q09); 28 Distribution Centers; Approximately 62,000 employees. E-commerce Income 2010 R$ 2 bi (including wholesale) Pro Forma Ratios (2008) Stores Only New Company Gross Rev. (R$ Bn - exc interest) 18.1 Merchandise 16.8 Services 1.3 Stores 1,053 Sales Area (thousand m²) 1,370 Gross Revenue (R$ mm) / Stores 17.2 Gross Revenue (R$) / m² 13,232 Sales Area m²/stores 1,301 Subject to the approval of Brazilian antitrust authorities 14

The New Company Main Synergies Centralized purchases; Integration of headquarters, logistics and IT; E-commerce platform integration; Partnerships with suppliers; Scale gains on advertising in CBD as a whole; Improved financial services; Rationalization of logistics. New Company s magnitude R$ 18.1 Bn Gross Revenue 5% normalized¹ EBITDA Margin Estimated Net Present Value of Synergies: R$ 2 Bn 15 Subject to the approval of Brazilian antitrust authorities 1) % of net sales

Tit: estrategia / abilio Next Steps 16

Next Steps Schedule December 4, 2009: Signing Day; Disclosure to Market; D + 20: January 11, 2010 CBD Extraordinary Shareholders Meeting; Creation of NCB; Before Closing: Separation of dot.com assets; Contribution of Extra Eletro to Ponto Frio; up to D + 120 : Closing (merger date). 17

Financial Advisor 18

Forward-looking Statements The forward-looking statements contained herein are based on our management s current assumptions and estimates, which may result in material differences regarding future results, performance and events. Actual results, performance and events may differ substantially from those expressed or implied in these forward-looking statements due to a variety of factors, such as general economic conditions in Brazil and other countries, interest and exchange rate levels, legal and regulatory changes and general competitive factors (whether global, regional, or national). Grupo Pão de Açúcar (GPA) Investor Relations Team Phone: +55 (11) 3886 0421 Fax: +55 (11) 3884 2677 gpa.ri@grupopaodeacucar.com.br www.gpari.com.br 19