wal-mart stores, inc. (nyse: wmt) charles...

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

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

Bank of America Merrill Lynch Consumer & Retail Conference March 12, 2013

Charles Holley Executive Vice President & CFO


Forward-looking statement

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,” “estimate,”

“expect,” “forecast,” “plan,” “projected,” “will be” or words or phrases of similar import. Statements of our

expectations for FY14, 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 of factors

including, among others, recessionary economic environment, cost of goods, 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 forward-looking statement. Walmart undertakes no obligation to update

any forward-looking statement to reflect subsequent events.

Wal-Mart Stores, Inc. (NYSE: WMT) 3 Historical Figures as Reported

Fiscal year 2013 results

$405 $419

$444

$466

FY10 FY11 FY12 FY13

Net Sales ($ Billions)

Strong sales growth

10-yr. CAGR: 7.3%

Leveraged expenses

19.7%

19.4%

19.2%

19.1%

FY10 FY11 FY12 FY13

SG&A (% Sales)

3-yr. improvement:60 bps

$3.73

$4.18 $4.54

$5.02

FY10 FY11 FY12 FY13

EPS

Returned value

10-yr. CAGR: 11.1%

Q4 snapshot: FY13 vs. FY12

Sales growth: 3.9% $127.1B vs. $122.3B

Op Inc growth: 2.4% $8.6B vs. $8.4B

EPS growth: 10.6% $1.67 vs. $1.51


Productivity loop facilitates consistent EPS growth

Note: Source: EPS based on internal forecasts and are dependent on actual share repurchase completed and potential acquisitions through FY13. * Guidance as of Feb 21, 2013

$1.76 $2.03

$2.46 $2.72

$2.93 $3.15

$3.35

$3.73

$4.18

$4.54

$5.02

$5.20 – $5.40*

FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY14E

Growth

Share Repurchase

EDLC

EDLP 10-yr. CAGR: 11%

Future Growth


Free cash flow ($ Billions)

$4.5 $5.4

$11.6

$14.1

$10.9 $10.7

$12.7

FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY14

Free cash flow grew by 18.1% to $12.7B in FY13

Continued strong free cash flow

FY14 not drawn to scale


$0.36

$0.52 $0.60

$0.67

$0.88 $0.95

$1.09 $1.21

$1.46

$1.59

$1.88

FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14

Strong cash position rewards shareholders

10 yr CAGR: 18%

Annual dividend per share

Increase of 18%


$1.6 $2.2 $2.5 $2.8 $3.6 $3.7 $4.2 $4.4 $5.0 $5.4

$5.0 $4.5 $3.6 $1.7

$7.7

$3.5

$7.3

$14.8

$6.3 $7.6

FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13

Dividends Share repurchase

Returns to shareholders remain a top priority

$6.6 $6.8 $6.1

$4.5

$11.3

$7.3

$11.5

$19.2

$11.3

$13.0

Over the last 10 years, we’ve returned nearly $100 B to our

shareholders.


Company priorities for success

U.S. operating segments Delivering a strong Walmart U.S. and Sam’s Club business

Capital allocation Driving greater efficiency through disciplined capital allocation

Global eCommerce Investing in Global eCommerce

Compliance Continuing to strengthen our company’s compliance organization

International Improving returns for International

Leverage Meeting our FY17 leverage goal


Walmart U.S. delivered strong FY13

*For the 52-week period ending Jan 26, 2013 as reported by Nielsen , including Food, Consumables and H&W (OTC)

Net sales

~$274.5B Increase of 3.9% or $10.3B

Operating expenses

27bps of Leverage

Operating income

~$21.5B Increase of 5.4%

Grew profit faster than sales

each quarter this year

Gained 50 bps of market share in FY13*

Gross profit rate down 16 bps

27.37% vs. 27.53%

Price investment

U.S. Segments


0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

Walmart U.S. increases sales through core strategy

• Increased SKU count • EDLP • Back to basics • One-stop shopping

U.S. Segments


-40

-30

-20

-10

0

10

20

30

40

50

60 Three consecutive years of

leveraging operating expenses

Walmart U.S. continues operating expense leverage B

asis

po

int

Ch

ange

Yo

Y

U.S. Segments


-40

-20

0

20

40

60

80

100

Operating expense change Gross margin change

Walmart U.S. also improved gross profit leverage B

P C

han

ge Y

oY

U.S. Segments


0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

Net sales Operating income

Walmart U.S. operating income growing faster than sales G

row

th R

ate

U.S. Segments


$1.6 $1.6 $1.5

$1.7 $1.9

$2.0

$0

$2

$4

08 09 10 11 12 13 Future Net sales Operating income

Sam’s Club grows sales and operating income steadily

(In B, USD)

$56.4

$53.8 $49.5 $47.8 $48

$44.3

Total sales Op. Inc.

FY

$160

$0

$120

$80

$40

U.S. Segments

(Data includes fuel) Future not drawn to scale


International is still a growth engine

12.1%

15.2%

7.4%

FY 11 FY 12 FY 13

Sales growth (YoY)

Note: Sales growth figures based on reported financials.

21

42

19

FY 11 FY 12 FY 13

Organic square footage growth (in millions)

• Continue to drive EDLC & EDLP

• Disciplined growth by

improving new store openings

• Focus on improving

profitability in Brazil & China

International


International gaining market share FY13 Walmart growth vs. market growth

31.6%

11.7% 13.5%

9.9%

7.3%

0.6%

15.8%

4.9% 5.2%

25.7%

11.0% 12.8%

9.5%

15.4%

0.2%

8.9%

2.4% 3.1%

Argentina Brazil Chile Mexico/ Central America

China Japan South Africa

Canada UK

Walmart growth

Market growth

Latam Asia EMEA & Canada

Note: Canada through November

International

Sources: Market Growth: Argentina: AC Nielson; Brazil & Mexico: AC Nielson; Chile: INE & internal projections; Japan: METI with adjustments; China & South Africa: Planet Retail; Canada: StatsCan & internal projections; UK: Kantar Retail.


$4.2 $4.5

$5.2 $5.6

$6.0

$6.8

$2

$4

$6

$8

$10

$12

08 09 10 11 12 13 Future

Net sales Operating income

International sales, operating income growing

(In B, USD)

$135

$126

$109

$97 $96 $88

Total sales Op. Inc.

FY

$160

$0

$120

$80

$40

FY08 - FY13 CAGR Sales 8.9%

Operating Income 10.3%

International

Note: Figures based on reported results.


1. Grow the business

o Organic growth • Stores • eCommerce • Leverage

o Acquisitions

2. Dividends

3. Share repurchases

Cash from

operations

AA-rated Balance Sheet

Capital Allocation

Disciplined capital allocation drives efficiency


Sources and uses of cash in FY13 Capital Allocation

Sources of cash Uses of cash

FCF

$12.7B Cash flow from Ops

$25.6B

CapEx $12.9B

Dividends $5.4B

Share repurchase

$7.6B

Acquisitions

$0.3B

Debt

$0.6B

$26.2B $26.2B


Capital Allocation Consistent capital efficiency

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

FY07 FY08 FY09 FY10 FY11 FY12 FY13

Share Repurchase

Dividends

Acquisitions

CapEx


$10.5 $9.8

$5.2 $6.3 $6.9

FY07 FY08 FY11 FY12 FY13

Delivering greater total company capital efficiency Capital Allocation

$ (

Bill

ion

s) s

pe

nt

on

Ne

w s

q f

t


On track to deliver FY17 leverage goal

Note: FY17 not drawn to scale; Source: Company financials

FY 10 FY 11 FY 12 FY 13 FY 17E

~50 bps > 100 bps

SG&A % of sales

19.1% 19.2% 19.3%

19.7%

14 bps

Optimizes performance and

efficiency

Accelerates the productivity

loop across the company

Drives greater P&L

performance

Leverage


Investing in Global eCommerce for future Global eCommerce

FY14 priorities:

Penetrate key markets

Develop global technology

platform

Develop next generation fulfillment network


Strengthening our compliance organization Compliance

• Made significant improvements to global compliance organization in FY13

• Re-aligned corporate structure to have global compliance,

ethics, investigations, and legal functions under the Corporate Secretary

• Increased associate training • Implementing market specific procedures


Strong underlying operations

Investments to drive growth through stores and E-commerce

AA-rated balance sheet

Strong free cash flow

Consistent returns to shareholders

Walmart – always a strong investment


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