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Diapositiva 1

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... 2007 (2) Market Share According to NODO study considering only corporate stores ... Proven track record based on profitable growth. Market Share with proven brands ... – PowerPoint PPT presentation

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Title: Diapositiva 1


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History of growth
Total Stores
989
343
265
85
2008
2006
2002
2005
1992
1989
2007
2004
1998
1999
(July 2008))
First Opening
1st Distribution Center
Brazil
Mexico
Mexico
Initial Public Offer (IPO)
Mexico
Alsea becomes part of the IPC
Argentina Chile
Mexico
Brazil Argentina Chile
Colombia
Casual
New Markets
Distribution
Quick Service Restaurant
New Brands
QSR
Force
dining
3
4
1,079
stores
(July 2008)
Agreement
Master Franchise
Joint Venture
Franchisee
Master Franchise
Franchisee
Segment
Pizza (QSR)
Coffee (QSR)
Hamburgers (QSR)
Chicken (QSR)
Tex-Mex (CD)
601
267
176
11
24
Mexico / Colombia
Mexico
Mexico
México
México
111
229
423 / 21
Stores
Arg. Chile
Chile / Brazil/ Arg
Sub-franchisee
34 / 31
26 / 11 / 1
157
Sales 07 7,047
2,854
1,126
1,714 1,072 Mex 642 Latam
62
324
(1)
  • Administrative Services
  • Real estate / Finance and admon.
  • Technology and procedures / Internal audit
  • Human resources / Strategic Planning
  • 5 Distribution Centers
  • 139 served cities twice a week
  • 1,224 points of sales
  • 2,897 weekly deliveries

(1) Sales figures in million pesos as of Dec
2007 (2) Market Share According to NODO study
considering only corporate stores
4
5
Profitable Business Model
  • Advantages
  • Brand Store managers focus 100 in customer
    service
  • Operative independence of each brand
  • Constantly seeking for economies of scale
  • Building critical mass
  • Ready to support new brands and new markets
  • Operating leverage at store support and corporate
    level

1,224 Units
6
Market Opportunity
Mexico
955 stores
Brazil
Population 107 Million
11 stores
GDP(1) 665,522 USD
Population 188 million
Total - Actual Markets
Colombia
GDP(1) 764,552 USD
21 stores
Population
392 million
GDP/1
1,988 billion USD
Population 44 millones
(2)
GDP(1) 121,732 USD
GDP of Mexico, Brazil, Chile Argentina
Colombia represent 83 of the GDP of Latin
America excluding the Caribbean
(2)
Chile
57 stores
Population 16 million
POTENTIAL
GDP(1) 96,533 USD
Argentina
35 stores
Population 40 million
GDP(1) 340,347 USD
/1 Million U.S. Dollars
(2) Anuario Estadístico América Latina
Source CEPAL Anuario estadistico de America
Latina y el Caribe 2007
7
Store Economics Avg. LTM
(1)
(2)
(1) Proforma figures with 15 VAT
(2) ROI Ebitda at store level divided by
investment
8
Proven Track Record
Store Count CAGR 15.4
Revenues CAGR 21.8
EMPLOYEES CAGR 24.0
Extraordinary due to the useful life effect
EPS CAGR 25.5
CAGR Compound Annual Growth Rate from Dec 2003
to March 2008
Numbers as of December 2007, except EPS
  • (1) ROIC NOPLAT / (Total Assets Cash Non
    bearing liabilities)

9
Drivers of Growth
Organic Expansion Plan
Latin America Expansion
Same Store Sales
Potential Acquisitions
New Brands
10
Organic Expansion Plan
Mexico TACC(1) de 10.4
  • Mexico / Latam Combined
  • 1,824 total units by 2012
  • Total Stores CAGR (1) of 13.7
  • 1,514 corporate units by 2012
  • Corporate Stores CAGR of 13.0
  • 63 million USD Avg. Capex / year

18CAGR 5 YEARS
Latin America CAGR(1) of 31.4
2Business Mix S.S.S.- VAT
-VAT
13CAGR CorporateStores
(1) CAGR Compound Annual Growth Rate 2007 -
2012
11
  • Innovation and costumer service driving SSS
    offsetting cannibalization
  • 2020 Dominos Pizza units
    contributing with higher growth
  • (117 units as of the end of July 08)
  • Renovating existing stores in Burger King
    Argentina Chile

Same Store Sales

Developing our People New Image Product
Innovation
World Cup Presidential Elections
SSS 2006 6.0 2007 1.3
VAT change in Dominos Pizza Burger King Mexico,
and Popeye's
Consumption Slowdown
2Yr Avg
(1) SSS in numbers as of December 2007
12
Potential Acquisitions New Brands
  • NEW BRANDS
  • Build a multi-brand casual dining portfolio.
  • Acquisition of existing brands
  • Start-up a proven brand.
  • Consolidate the segment
  • Potential to develop new QSR brands in other
    categories
  • MEXICO (existing brands)
  • 265 Burger King units in 8 Franchisees.
  • 156 Domino's Pizza units in 21 Sub-franchisees.
  • 32 Chili's units in 1 Franchisee (exclusive
    territories).
  • LATAM (existing brands in QSR)
  • 18 Dominos Pizza units in Chile.
  • 12 Burger King stores in Brazil.

13
Latin America Expansion
  • Alsea has presence in Mexico, Brazil, Argentina,
    Chile and Colombia, which together account for
    83(1) of the total Latin American Market.

21
23
12
11
26
18
1
31
34

Territories where Alsea has presence
Potential New Territories for Alsea
Territories where the brand has presence
(1) ECLAC, Statistical Yearbook for the
Caribbean, 2006 (2) According to an AMAI (Mexican
Association of Market Public Opinion Agencies)
study (3) World Development Indicators database,
World Bank, 1 July 2007
14
REVENUE INCREASE 16.9
2007 Results
(1)
(2)
(3)
ROIC
ROE
EBITDA INCREASE 14.1
16.5
14.9
9.6
9.1
Revenue Increase by Brand
2006
2006
2007
2006
2007
2007
2007
2006
Sales Mix
2.5
Mexico
65.6
9.9
Latam
Latam
85.2
30.2
39.8
Mexico
2006 2007
2006 2007
2006 2007
2006 2007
2006 2007
2006 2007
(1) Figures in million pesos as of December 2007
(3) ROiC is defined as the operating income
after taxes (ttm) divided by operating
investment net (total assets-cash and temporary
investments-non interest bearing liabilities)
(2) ROE defined as net income (ttm) divided by
stock holders equity
15
(3)
2nd Quarter 2008 Results Highlights
  • The acquisition of Dominos Pizza Colombia
    Dominalco was completed during June, adding 21
    units
  • The first opening of Starbucks Coffee in
    Argentina took place on May 30, 2008 with great
    success
  • Growth of 9.8 in Revenues during second quarter
    2008
  • A 143.5-million-peso dividend was declared and
    paid in company shares at the rate of 1 share for
    every 62.5370 shares

Revenue Increase 9.8
ROIC
ROE
(4)
(5)
11.1
EBITDA decrease (19.2)
11.5
8.9
8.8
2Q 07
2Q 08
2Q 08
2Q 07
2Q 08
2Q 07
2Q 08
2Q 07
(1)EBITDA Operating income before depreciation
and amortization. (2) EPS refers to the earnings
per share of the last 12 months ended June 2008.
(3)Figures in million pesos in nominal terms for
second quarter 2008 and as of December 2007 for
second quarter 2007.
(4) ROiC is defined as the operating income
after taxes (ttm) divided by operating investment
net (total assets-cash and temporary
investments-non interest bearing liabilities)
(5) ROE defined as net income (ttm) divided by
stock holders equity
16
Strong Financial Position
Leverage
Potential Leverage (1)
Net Debt
  • Funding cash flow needs through debt

1,376
814
Cash
  • Fulfillment of covenants
  • Potential leverage 337.4 million pesos(1)
  • 89 of the debt is in Mexican pesos
  • Liabilities to Equity of 0.73 x
  • Net Debt to EBITDA of 1.19x

Numbers in millions of pesos in nominal terms
and as of Dec 07 (1) According to bank loan
covenants
17
  • Continuously investing in customer service and
    product innovation ( 180 mdp)
  • Building strong infrastructure to support growth
    Distribution and Technology ( 215 mdp)
  • Continuously seeking and investing to develop
    strategic synergies
  • Solid financial position (89 of debt in Mexican
    Pesos, Net Debt/EBITDA 1.19x)

Investing for Growth
  • Numbers in millions of pesos as of Dec 2007
  • 2007 Includes acquisitions and asset sales
    outperformed during the period
  • FCF Ebitda Capex Interest paid - Taxes
    Working Cap.

18
Commodities Price Effect in 2008 (1)
  • Cheese
  • Milk
  • Wheat
  • Meat
  • Coffee
  • Potato
  • Paper

1)
Cost increase of 16 (1)
1
3
Food inflation 9
2)
  • Other Products
  • 2,000 SKUs

Cost increase of 4 (1)
2
  • DIA 3rd parties
  • (mark-up)
  • royalties

3)
Cost increase of 0
  • Additional effects on cost of sales
  • Negative effect from change from 0 VAT to 15VAT
  • Positive effect from change in business mix
  • Exchange rate

(1) According to company estimates in nominal
terms
19
Key Indicators of Growth in Mexico
  • The number of middle class families has been
    increasing since 1992 representing a growth in
    potential consumers for QSR Casual Dining
  • Mexico has seen a continuous decrease of homes
    living in extreme poverty since 1998.

(1)
(1)
100 in 8 years
  • Estimates for Remittance entering Mexico continue
    to point in a positive direction
  • A continuous growth in the Mexican labor force

(3)
(2)
(2)
(2)
USD
(3) Strictly Macro, Santander March 2008
(2) El Enfoque Local del Mundo, HSBC January 2008
(1) Expansión with information from INEGI and
CONEVAL
20
Positive Expectations for the Future
S.S.S. correlation with Commerce, Restaurant
Hotel indicator in Mexico
Latam GDP by Country
Expected growth for Commerce, Restaurant Hotel
indicator Mexico
  • Growth in Mexico and Latin America looks
    promising as we see continuous increase in GDP in
    all the countries in which Alsea has presence
  • There is an expectation that Commerce, Restaurant
    Hotel spending in Mexico will continue to grow
    during the next years, which is a key indicator
    for Alseas future growth

Source HSBC January, 2008 El Enfoque Local del
Mundo
21
Attractive price valuation
  • Alsea has under performed relative to the IPC
  • Alsea EV/EBITDA multiple has had a significant
    drop over the last 12 months

EV/EBITDA LTM
June
  • Alsea price per share has dropped 40.4 since
    june 2007, at a time in which the company has
    reported excellent results and has been able to
    offset part of the unexpected contingencies
  • Alsea has the lowest multiple relative to its
    peers at 7.36x vs 10.32x Avg. a 29 discount
    suggesting an attractive opportunity

Industry Avg. EV/EBITDA multiple is 10.32x
Alseas EV/EBITDA multiple is 7.36x
Source Yahoo Finance, Prices August 12, 2008
22
Analyst Expectations
CAGR (1) Sales 13.3
9,548
8,125
7,022
5,792
CAGR(1) Ebitda 10.3
15.0
14.2
16.3
16.7
  • 2008 NEGATIVE EFFECTS
  • VAT reform from 0 to 15
  • Margin pressure from commodities
  • Management changes Future Growth
  • Profitability measures Real Estate
  • 2008 POSITIVE EFFECTS
  • Operating leverage from growth
  • Operating efficiencies
  • Price strategy
  • Alsea Long-term Goals
  • Annual sales growth above than 15
  • Improve margins back to 16s

Numbers in millions of pesos as of Dec 2007 (1)
Compounded Annual Growth Rate 06-09
23
  • Leader QSR Casual Dining operator in Latam
  • Proven track record based on profitable growth
  • Market Share with proven brands
  • Unique and dynamic business model with a
    diversified portfolio of leader brands with
    presence in four countries
  • High potential growth industry in Mexico and
    Latin America
  • Solid financial position ready to capture growth
    opportunities
  • Solid, transparent and institutional Corporate
    Governance
  • Attractive valuation with ratios below the
    industry

Investment Highlights
24
This presentation contains forward-looking
statements regarding the Companys results and
prospects. Actual results could differ materially
from these statements. The forward-looking
statements in this press release should be read
in conjunction with the factors described in the
risks summary in the Companys Annual Report,
which, among others, could cause actual results
to differ materially from those contained in
forward-looking statements made in this press
release and in oral statements made by authorized
officers of the Company. Readers are cautioned
not to place undue reliance on these
forward-looking statements, which speak only as
of their dates. The Company undertakes no
obligation to publicly update or revise any
forward-looking statements, whether as a result
of new information, future events or otherwise.
Mario Padilla (5255) 5241-7158 mpadillav_at_alsea.co
m.mx
Contact Diego Gaxiola (5255) 5241-7152 dgaxiola_at_a
lsea.com.mx
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