Walmart International

Wal-Mart Stores, Inc. (NYSE: WMT)

18th Annual Meeting for the Investment Community

Doug McMillon
President and CEO of Walmart International

1 Wal-Mart Stores, Inc. (NYSE: WMT)

 Today’s speakers

Doug McMillon Cathy Smith

President & CEO, SVP, CFO and Strategy,
Walmart International Walmart International

Eduardo Solorzano Scott Price David Cheesewright

President & CEO, President & CEO, President & CEO,
Walmart Latin America Walmart Asia Walmart EMEA/Canada
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 The global economy presents an opportunity
Nominal GDP (USD, 2011-16) Inflation (2011-16)

14.0%
4.8%

4.5% 1.2%

WMT Developed WMT Emerging WMT Developed WMT Emerging

In today’s economy, price leadership matters even more

Source: IHS Global Insights
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 Key trends: What customers are telling us
Emerging markets Developed
middle class market flux
Urbanization Aging

Rising income Affordability

Conscious
Connectivity
consumerism
Internet
Social
penetration
Social
Environmental
networks

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 FY12 H1 sales growth vs. retail market
43.2%
WMT Growth
Market Growth
28.2%

16.8%

8.9% 10.9% 12.2% 11.3%

6.8% 4.8% 8.6%
3.9%
3.6% 4.1% 1.9%
-0.4% -1.4%

UK Canada Mexico Brazil Chile Argentina China Japan

Latin America Asia

Source: See Appendix A
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 FY12 H1 operating performance
YOY Sales Growth YOY Op. Income Growth
Reported Reported

8.9%
16.2%

11.5%
1.2%

FY12 Q1 FY12 Q2 FY12 Q1 FY12 Q2

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 FY12 H1 operating performance
YOY Sales Growth YOY Op. Income Growth
Reported Constant currency Reported Constant currency

8.9%
16.2%

11.5%

7.1% 1.2%
6.2% 0.5%

-3.3%
FY12 Q1 FY12 Q2 FY12 Q1 FY12 Q2

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 Aggressive growth in four dimensions
Comp sales New stores
Across International, we have FY12 estimated new sq. ft. (MM)
two top priorities to drive comp EMEA/Canada
15%
sales:
53% Latam
Everyday low price (EDLP) Asia 32%
Being great merchants

eCommerce / multi-channel Strategy for store acquisitions

M&A Strategy
Build scale in existing markets
Evaluate remaining large,
high growth markets

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 EDLP
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 EDLP
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 EDLP
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 Our EDLP journey is ongoing

EDLP Continuum

China Argentina Chile Brazil UK Japan

South Africa Canada Mexico &

Central
America
India

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 Live feed from Brazil

Marcos Samaha
President and CEO,
Walmart Brazil
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We’re still item merchants!
United States Canada

China
Mexico

India
Argentina Brazil

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Dogs can be style icons

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 Even for kids in Argentina!

Last year sales of 5,000 units

This year sales of 10,000 units

Next year:

50,000 units!
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 Emerging markets key for new store growth

New square footage (FY07) New square footage (FY12)

10%
24%

76% 90%

Developed Emerging Developed Emerging

Source: WMT data - FY07 actuals and FY12 estimates

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 Emerging markets key for new store growth

New square footage (FY07) New square footage (FY12)

10%
24%

76% 90%

Developed Emerging Developed Emerging

Source: WMT data - FY07 actuals and FY12 estimates

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 eCommerce / mobile commerce / multi-channel
Growth channel
Emerging markets: Developed markets:
Lead in eCommerce and
Lead in multi-channel
mobile Commerce

Source of leverage

Social commerce Mobile commerce

NextGen eCommerce NextGen tools &

platform processes

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 eCommerce country updates
GM Grocery Highlights
UK Strong grocery home delivery; enhancing general merchandise
Canada New general merchandise eCommerce site
Robust multi-channel ordering; expanding offering into general
Mexico
merchandise and wholesale
Latin America

Site-to-store capabilities; Growing 2x market growth, Best

Brazil
eCommerce site award in 2010 and 2011
Chile New eCommerce site
New eCommerce site with limited general merchandise
Argentina
assortment
China Sam’s Club pick from club model; Yihaodian investment
Asia

Strong grocery business; expand general merchandise, move to

Japan
common platform
Source: e-bit for Brazil market growth, best eCommerce site award
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 Growth through acquisitions

Evaluate remaining
Build scale in existing
large, high growth
markets
markets

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 Live feed from Sub-Saharan Africa

Grant Pattison
CEO, Massmart

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 Walmart International returns will improve

Operating • Emerging markets are key

income
improvement • All markets must be EDLC

Deliberate capital • By market and by format

allocation
• Capex efficiency

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 Emerging markets are key to improving returns
China and Brazil will grow
faster than WMT Int’l… ROI improvement for every 100 bps
FY12-FY17

SG&A % of sales reduction

CAGR

2.5x

1.4x
23 bps
China Brazil 19 bps
… and SG&A % of sales reduced
FY17 SG&A %

to WMT International level

sales

WMT Int’l

China Brazil China Brazil

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 Productivity loop drives EDLC in every market

Operate
for less Buy for
less

Grow
sales Sell for
less

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 Powered by Walmart
Working together where it makes us better, faster and/or cheaper
Process Information
Procurement Shared Services
engineering technology

Financial
Logistics Format expertise
services

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 Capex discipline guides new store program
Hold At pace Accelerate
Mexico & CAM
China
Investment Focus

Brazil
UK Based on
Canada
Chile
format
Argentina
India
performance
Japan

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 Driving returns
Operating income WMT International ROI
improvement performance goal
Risk adjusted
hurdle rates
+300-400 bps
Investment by
market, store format
New market
prioritization and entry
strategies

Portfolio risk and FY12 FY17

return correlations

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 UK, Canada and Sub-Saharan Africa update
United Kingdom Canada Sub-Saharan Africa

• Price leadership - price • Price leadership • Price leadership

Current

guarantee • Supercentre expansion • Integration and leverage

• Quality - Chosen by You • Urban 90 • Government relations
• Supermarkets - Netto
conversions

• Price leadership • Price leadership • Price leadership

• Geographic expansion
Strategy

• Operate for less • Merchandising

• New space and innovation • Integration and leverage
multi-channel • eCommerce/
multi-channel

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 Asia update
China Japan India

• Significant improvement • Earthquake recovery • India ahead of plan

Current

post Trust-Mart • Positive comp sales > • Rapid new space growth
re-bannering market • HO expense leverage
• > 50 new stores in • Continue EDLP
FY12

• Tier II / III city expansion • Scale up with improving • Growth in west and south
Strategy

• Item merchandising ROI • Global scale and expertise

• Productivity loop and - New stores • Driving multi-channel
leverage - Global leverage
- eCommerce

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 Actions to drive growth in China
Short-Term

Customer Sales productivity enhancement

Conversion of 104 stores to Walmart

Entering Tier II / III cities

Expanding discount compact hypermarket rollout
Refining Sam’s Club format strategy
Talent: Significant growth: 160k new associates by FY17
• Growth
Long-Term

• Retention Comprehensive acquisition and development plans

RE Strengthening Tier II / III city capabilities

Capabilities Entering into self-development

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 Latin America update
Mexico &
Brazil Chile Argentina
C. America
• Aggressive organic • EDLP • Reposition financial • Changomas
Current

growth • Business integration services expansion

• Central America • Local offering in • New formats
• Organic growth
integration format and general
• EDLP merchandise
• Organic growth • Portfolio • Financial services • Aggressive
• eCommerce/multi- management full potential Changomas
Strategy

channel • eCommerce/multi- • New format growth expansion

• New format growth channel (e.g., wholesale) • New format growth
(e.g., pharmacy) • New format growth • Finalize integration (e.g., supermarkets)
(e.g.,Bodega)
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 The best talent

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 Lead on social and environmental issues
Deliver on our Operate a Leverage business to
promise responsible business drive social change

Deliver EDLP Sustainability focus Women’s empowerment

Raise standard of living Ethical sourcing Hunger and nutrition
Serve the underserved Associate development Disaster recovery

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 Walmart International capex details
CapEx Detail FY11 Actual FY12 Estimate FY13 Projection
New Stores $2.2B $2.5-$2.8B $2.8-$3.1B
Remodels $0.4B $0.4B $0.4B
Logistics $0.2B $0.3B $0.5B
Maintenance, Systems,
$1.0B $0.8-$1.0B $0.8-$1.0B
Shopping Centers
Total International before Acquisitions $3.9B $4.0-$4.5B $4.5-$5.0
Post Acquisition Investments $0.5B $0.5B
Total International $3.9B $4.5-$5.0B $5.0-$5.5B
Additional International Sq. Ft. 21M 24-25M 26-28M
Post Acquisition Sq. Ft. 1-2M 4-5M
Additional Sq. Ft. w/ Acquisitions 21M 25-27M 30-33M
Note: FY11 and FY12 data on reported rates. FY13 data on constant currency basis. FY12 acquisitions do not include South Africa’s initial acquisition of 17 million
sq.ft. and Netto’s initial acquisition of 2 million sq.ft.
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 Walmart International capex details
CapEx Detail FY11 Actual FY12 Estimate FY13 Projection
New Stores $2.2B $2.5-$2.8B $2.8-$3.1B
Remodels $0.4B $0.4B $0.4B
Logistics $0.2B $0.3B $0.5B
Maintenance, Systems,
$1.0B $0.8-$1.0B $0.8-$1.0B
Shopping Centers
Total International before Acquisitions $3.9B $4.0-$4.5B $4.5-$5.0
Post Acquisition Investments $0.5B $0.5B
Total International $3.9B $4.5-$5.0B $5.0-$5.5B
Additional International Sq. Ft. 21M 24-25M 26-28M
Post Acquisition Sq. Ft. 1-2M 4-5M
Additional Sq. Ft. w/ Acquisitions 21M 25-27M 30-33M
Note: FY11 and FY12 data on reported rates. FY13 data on constant currency basis. FY12 acquisitions do not include South Africa’s initial acquisition of 17 million
sq.ft. and Netto’s initial acquisition of 2 million sq.ft.
39 Wal-Mart Stores, Inc. (NYSE: WMT)
 Walmart International capex details
CapEx Detail FY11 Actual FY12 Estimate FY13 Projection
New Stores $2.2B $2.5-$2.8B $2.8-$3.1B
Remodels $0.4B $0.4B $0.4B
Logistics $0.2B $0.3B $0.5B
Maintenance, Systems,
$1.0B $0.8-$1.0B $0.8-$1.0B
Shopping Centers
Total International before Acquisitions $3.9B $4.0-$4.5B $4.5-$5.0
Post Acquisition Investments $0.5B $0.5B
Total International $3.9B $4.5-$5.0B $5.0-$5.5B
Additional International Sq. Ft. 21M 24-25M 26-28M
Post Acquisition Sq. Ft. 1-2M 4-5M
Additional Sq. Ft. w/ Acquisitions 21M 25-27M 30-33M
Note: FY11 and FY12 data on reported rates. FY13 data on constant currency basis. FY12 acquisitions do not include South Africa’s initial acquisition of 17 million
sq.ft. and Netto’s initial acquisition of 2 million sq.ft.
40 Wal-Mart Stores, Inc. (NYSE: WMT)
 Walmart International capex details
CapEx Detail FY11 Actual FY12 Estimate FY13 Projection
New Stores $2.2B $2.5-$2.8B $2.8-$3.1B
Remodels $0.4B $0.4B $0.4B
Logistics $0.2B $0.3B $0.5B
Maintenance, Systems,
$1.0B $0.8-$1.0B $0.8-$1.0B
Shopping Centers
Total International before Acquisitions $3.9B $4.0-$4.5B $4.5-$5.0
Post Acquisition Investments $0.5B $0.5B
Total International $3.9B $4.5-$5.0B $5.0-$5.5B
Additional International Sq. Ft. 21M 24-25M 26-28M
Post Acquisition Sq. Ft. 1-2M 4-5M
Additional Sq. Ft. w/ Acquisitions 21M 25-27M 30-33M
Note: FY11 and FY12 data on reported rates. FY13 data on constant currency basis. FY12 acquisitions do not include South Africa’s initial acquisition of 17 million
sq.ft. and Netto’s initial acquisition of 2 million sq.ft.
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 Key takeaways

Aggressive growth with discipline

Prioritizing emerging markets
Expense leverage
EDLP/EDLC
Powered by Walmart
Returns will improve
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 Wal-Mart Stores, Inc. (NYSE: WMT)
18th Annual Meeting for the Investment Community

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