Dec 6, 2010 - M&A: Leveraging due diligence capabilities in South Africa. Operations, Merchandising,. Tax and Real E
Wal-Mart Stores, Inc. (NYSE: WMT) Credit Suisse Conference
Walmart International December 6, 2010
Forward Looking Statements Walmart includes the following cautionary statement so that any forward-looking statements made by, or on behalf of, Walmart will enjoy the safe harbor protection of the PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, as amended. Such forward- looking statements, which will describe our objectives, plans, goals, targets or expectations, can be identified by their use of words or phrases such as “anticipate anticipate,” “estimate estimate,” “expect expect,” “forecast forecast,” “plan,” “projected,” “will be” or words or phrases of similar import. Statements of our expectations for all of FY11, and any subsequent fiscal years are forward-looking. Walmart’s actual results might differ materially from those expressed or implied in a forward-looking statement as a result off factors f t i l di including, among others, th recessionary i economic i environment, i t costt off goods, d competitive pressures, availability of credit, geopolitical conditions and events, labor and healthcare costs, inflation, deflation, consumer spending patterns, debt levels and credit access, currency exchange fluctuations, trade restrictions, tariff and freight rate changes, fluctuations in fuel, other energy, transportation and utility costs, health care and other insurance costs, accident costs, interest rate fluctuations, other capital market conditions, weather conditions, storm-related damage to facilities, customer traffic, factors limiting our ability to construct, expand or relocate stores, regulatory matters and other risks set forth in our SEC filings. Our most recent Annual Report on Form 10-K and our other filings with the SEC contain more information concerning factors that, along with changes in facts, assumptions not being realized or other circumstances, could cause actual results to differ materially from those expressed or implied in a forwardlooking g statement. Walmart undertakes no obligation g to update p anyy forward-looking g statement to reflect subsequent events. 2
Wal-Mart Stores, Inc. (NYSE: WMT)
Growth
3
Leverage
Wal-Mart Stores, Inc. (NYSE: WMT)
Returns
Growth through organic expansion and acquisitions Growth
(In Billions) $120
Trust-Mart China and JV Bharti India Sold S. Korea and Germany
Acquisition Organic
Wertkauf Germany Makro S. Korea
$90 Cifra Mexico
$60
Mexico
Sonae Brazil S B il CARHCO Central America Seiyu Japan Bompreco Brazil
Argentina and Brazil Interspar Germany ASDA UK
Woolco Canada $30
D&S Chile
China
$0 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11E Source: Public company filings, Walmart website, Factiva; All figures at reported currency exchange rates; Excludes Puerto Rico sales; FY11 estimate is as of September 30, 2010 4
Wal-Mart Stores, Inc. (NYSE: WMT)
Scale and expertise as a competitive advantage Leverage
Local Relevance Operating principles Values & Behaviors
Mission
Saving people money so they can live better`
Global talent
Global sourcing
eCommerce/ Multichannel
Global leverage 5
Wal-Mart Stores, Inc. (NYSE: WMT)
Processes, systems and technology
Disciplined capital allocation framework to deliver growth and improve returns Growth & earnings targets PORTFOLIO RETURN
New market prioritization process
New market entry strategies
Risk-adjusted hurdle rates PORTFOLIO RISK
Portfolio optimization model d l 6
Wal-Mart Stores, Inc. (NYSE: WMT)
Returns
Agenda
7
FY11 Q3 Highlights
● Q3 Earnings
South Africa Update
● Progress on Potential Massmart Acquisition
Global Leverage Overview
● Highlights on Global Capabilities
Wal-Mart Stores, Inc. (NYSE: WMT)
Q3 performance highlights Sales
Operating Income
($, Billions)
($, Billions)
New store growth in Mexico, Brazil, China and Canada Leveraging operating expenses for 7 consecutive quarters Note: Sales and Operating Income at reported currency rates 8
Wal-Mart Stores, Inc. (NYSE: WMT)
Progress on potential Massmart acquisition
Milestones Early FY2011
September-October
November
Market visits and
Non-binding offer
Competition
discussions
Due diligence
Commission filing
Store visits
Due diligence
Executive management
finalised
meetings
Meetings with principal shareholders
9
Q1 FY2012
Expected to close
Our strategic direction Local relevance
Global leverage
Aggressive growth with improving returns
Develop talent
Lead on social issues
10
Wal-Mart Stores, Inc. (NYSE: WMT)
Driving the productivity loop
p Operate for less
Buy for less
Buy for less
Sell for less Save people S l money So they can live better
Grow sales
Sell for less Grow sales
11
Wal-Mart Stores, Inc. (NYSE: WMT)
Leveraging Global Capabilities
Global Sourcing
Global Talent
eCommerce / Multi-Channel
M&A and Integration
12
Format De elopment Development
Knowledge g and Expertise p
Innovation
Scale Advantages
Logistics
Wal-Mart Stores, Inc. (NYSE: WMT)
Real Estate / Construction
Processes, systems and d technology
Global Sourcing: Ensuring sustainable and low cost sourcing Direct Imports
Filling brand and private label gaps Diff Differentiating ti ti through th h broader b d assortment
Direct Farming
Sourcing $1B in food directly from local farmers Training 1M farmers in sustainable farm practices 13
Wal-Mart Stores, Inc. (NYSE: WMT)
Direct Sourcing
Driving quality and decreasing cost in fresh Add Addressing i the th needs d off emerging i consumers
Global Collaboration
Utilizing suppliers’ excess capacity Consolidating purchases Exclusive manufacturing for Walmart
14
Wal-Mart Stores, Inc. (NYSE: WMT)
Format Development: Serving underserved customers < 10,000 sq. ft. store size
~90% Food & Consumables
Store design and feel Operating procedures Merchandise mix Low operational costs Organizational structure 15
Wal-Mart Stores, Inc. (NYSE: WMT)
Lowest price and proximity
Real Estate and Construction: Enhancing customer experience BEFORE
AFTER
I l Implementing i iin C Centrall A America, i P Puerto Ri Rico and dM Mexico i 16
Wal-Mart Stores, Inc. (NYSE: WMT)
Logistics: Flexible and low cost solutions Japan
Mexico
Highly Automated Multiple Multiple-Story Story DC Productivity up ~20%
India Semi-Automated Flexible Solutions Productivity up ~8%
Manual Processes Low Wage Productivity up ~ 15%
Automation Level Note: Productivity is measured using YTD cases per labor hour for total country DCs 17
Wal-Mart Stores, Inc. (NYSE: WMT)
M&A: Leveraging due diligence capabilities in South Africa
People and Logistics
Operations, Merchandising, Tax and Real Estate
Finance, Legal, Merchandising
Key Learnings
18
Wal-Mart Stores, Inc. (NYSE: WMT)
Integration: A repeatable and scalable framework Integration Priorities
Culture
Governance
Integration Modules Culture assessment
HR practices
Transition training
Culture communication program
Operational compliance
Legal compliance
Enhanced assortment Price leadership
Customers
Global sourcing
Supply chain
Operational efficiency Customer experience
19
Wal-Mart Stores, Inc. (NYSE: WMT)
eCommerce / Multi-Channel: Enabling customer reach ASDA Groceries Online
Flexible online platform to offer grocery solutions for our customers 20
Wal-Mart Stores, Inc. (NYSE: WMT)
Global Talent: A competitive advantage Merchandising Merchandising Real Estate General Management
Merchandising
Merchandising
Operations Real Estate
Operations Merchandising General Management
Merchandising
Since 2008 2008, we moved over 200 associates globally to share knowledge and expertise 21
Wal-Mart Stores, Inc. (NYSE: WMT)
Our strategic direction Local relevance
Global leverage
Aggressive growth with improving returns
Develop talent
Lead on social issues
22
Wal-Mart Stores, Inc. (NYSE: WMT)
Questions?
23
