S.A.C.I. Falabella Corporate Presentation J a n u a r y 2 0 1 8
CONTENTS THE COMPANY INVESTMENT HIGHLIGHTS CONSOLIDATED STATEMENTS CORPORATE STRUCTURE BUSINESS UNIT OVERVIEW
THE COMPANY
Presence In 7 Countries In Latin America DEPARTMENT STORES HOME IMPROVEMENT SUPERMARKETS FINANCIAL SERVICES REAL ESTATE US$ 4.4 billion Revenues US$ 5.8 billion Revenues US$ 2.2 billion Revenues US$ 7.0 billion Loan Book 4,4 million CMR accounts 2.1 million m 2 of GLA 1 20/21 Shopping/ power centers 45 Stores 318,000 m 2 87 Stores 730,000 m 2 63 Stores 210,000 m 2 2,383,000 active CMR cards 26 shopping centers 1,557,000 m 2 GLA 29 Stores 177,000 m 2 56 Stores 372,000 m 2 61 Stores 225,000 m 2 966,000 active CMR cards 14 shopping centers 514,000 m 2 GLA 26 Stores 175,000 m 2 38 Stores 367,000 m 2 1,040,000 active CMR cards 1 shopping center 27,000 m 2 GLA 11 Stores 58,000 m 2 8 Stores 86,000 m 2 500,000 active CMR cards 56 Stores 158,000 m 2 3 Stores 25,000 m 2 COMING SOON! Recently launched Falabella-Soriana credit card 1. Does not include an 982,000 m2 of additional GLA in free standing stores in the region also owned by S.A.C.I. Falabella. Note: Revenues as of September 2017 LTM. Number of stores and sales area as of September 2017. Number of CMR accounts with balance. FX rate as of October 2 rd 2017 (637,93 CLP/US$). Home Improvement includes Sodimac Colombia, which the company does not consolidate. Does not include Uruguay revenue, which the company does consolidate. 4
Key Figures Main Figures TOTAL REVENUES (LTM) LOAN BOOK CMR ACCOUNT S STORES 483 SHOPPING CENTERS 41 US$ 13.8 billion US$ 7.0 billion + 4,390,000 2,900,000 m 2 sales area 2,100,000 m 2 GLA Mix by Country (LTM) Total Employees: COLOMBI A ARGENTINA 6% 6% BRAZIL 2% <1 % URUGUAY COLOMBIA 4% 3% ARGENTINA 16,000 29,700 3,200 20% 24% REVENUE PERU EBITDA 51,000 400 PERU 62% 74% 5,400 Total: 105,800 CHILE CHILE Note: Revenue and EBITDA percentages exclude Sodimac Colombia, which is not consolidated. CMR accounts with balance and employees as of September 2017. Total number of employees includes +130 employees in Asia and Mexico. 5
INVESTMENT HIGHLIGHTS
Strategic Pillars 1. Leadership in Latam across formats 2. Responsible growth strategy 3. Differentiating brands 4. Customer centric strategy 5. Sustainable business development 6. Experienced management team 7. Corporate governance practices 7
Leadership In Latam Across Formats Market Position 1 DEPARTMENT STORES HOME IMPROVEMENT SUPERMARKETS FINANCIAL SERVICES REAL ESTATE Revenues MMUS$ Revenues MMUS$ Revenues MMUS$ CMR Accounts 2,388 3,094 1,140 2,388,000 26 Shopping Centers 923 934 1,086 1,012,000 GLA 1.6 million m 2 582 1,201 1,039,000 14 Shopping Centers GLA 0.5 million m 2 488 264 512,000 1 Shopping Mall 290 Sales LTM / m2 (US$) 2 Department Stores in Chile Home Improvement in Chile Supermarkets in Peru 7.650 1.7x 4.291 1.7x 5.430 1.2x 4.505 4.531 2.505 4.609 4.592 Falabella Comp. 1 Comp. 2 Sodimac Comp. 1 Tottus Comp. 1 Comp. 2 1. Revenues as of September 2017 LTM. Number of CMR accounts, malls and GLA as of September 2017. FX rates as of October 2 nd, 2017 (637,93 CLP/US$). 2. Sales LTM per square meter as of September 2017. FX rates as of October 2 nd, 2017 (637,93 CLP/US$). Tottus sales area excludes check out area, in order to compare with peer s reported sales per square meter. 8
Responsible Growth Strategy Organic Initiatives Falabella launches CMR Entry to Argentina and Colombia Falabella.com launched in Chile First Tottus opened in Peru Falabella & CMR enter Colombia Launch of Homy Launch of Móvil Falabella Sodimac opens first Homecenter stores in Brazil and Uruguay 2015 Sodimac.com launched in Peru 1980 Falabella opens first Mall Plaza 1993 Banco Falabella launched in Chile 1999 Sodimac.com launched in Chile 2002 Falabella.com launched in Argentina 2006 2009 Falabella.com launched in Colombia Tottus.com launched in Chile 2013 Sodimac.com launched in Colombia Tottus.com launched in Peru 2015 1990 1998 2001 2005 2010-11 2014 Merges & Acquisitions Falabella acquires Saga 1995 2003 Falabella & Sodimac merge 2004 Falabella acquires San Francisco in Chile 2007 Sodimac acquires Imperial in Chile 200 8 Falabella acquires Casa Estrella in Colombia 2013 Sodimac Sodimac acquires acquires Dicico in Brazil Maestro in Peru Mall Plaza acquires Mall Las Americas in Chile 2014 2016 Falabella & Soriana form partnership to develop home improvement and financial services in Mexico 9
Investment Plan 2018-2021 Investment Plan 2018-2021 As of January 2018 US$ 3.9 bn Investment over the next 4 years Remodeling and expansion of existing stores & shopping centers 31% New stores & shopping centers 37% 108 stores 8 shopping centers IT, logistics & others 32% Investment (US$ million) Store and Shopping Centers Openings 984 996 975 989 3 2 2 1 23 28 29 28 2018 2019 2020 2021 2018 2019 2020 2021 Stores Shopping Centers Note: The investment plan includes 100% of expected capex for S.A.C.I. Falabella and subsidiaries, including Sodimac Colombia, Sodimac Mexico, CMR Mexico, which the Company does not consolidate. 10
Differentiating Brands Private Labels Exclusive Brands 11
Customer Centric Strategy +4.4 million +319 385 +1.6 497,000 million million million CMR accounts with a balance transactions in our retail businesses visits to our shopping centers in the region bank accounts with Banco Falabella Passengers travelled using Viajes Falabella Customer knowledge through consistent interaction Websites Commercial Platform Self Service Stations What does she like When does she purchase Mobile Apps ATM How much does she spend Means of paymen t What does she buy Where does she purchas e Contact Center Social Networks Points of Sale Data as of December 2016. 12
Experienced Management Team Top Executives CEO - 22 years - 15 years Average number of years that these executives have worked at the Falabella Group CFO - 10 years - Chief Planning and Development Officer - 8 years - Peru Country Manager - 13 years - Colombia Country Manager - 22 years - Argentina Country Manager - 10 years - Brazil Country Manager - 7 years - CIO - 18 years - Department Stores GM - 17 years - Home Improvement GM - 15 years - Supermarket GM - 15 years - Financial Services GM - 8 years - Mall Plaza GM - 27 years - Open Plaza GM - 22 years - General Counsel - 1 years - Employees +105,300 employees 52% women +85,300 Evaluated employees +4.2 million hours of training 30% of employees belong to a union. 58% in Chile. Note: Employee information as of December 2016. Top Executive Information as of June 2017. 13
Sustainable Business Development Community 100 Haciendo schoo Escuela ls +80,000 Benefited students Corporate Volunteer Work +96,900 hours Financial Education Program Juntos Juguemos 5,800 students from 60 schools from Haciendo Escuela Healthy Eating Program Implemented in lowincome schools 3,000 students from 16 schools Programa Buen Vecino 465,000 84 projects with +50,400 people benefited Suppliers Environment +30,600 Retail suppliers +15,200 Total SMEs Partnership with Falabella Sodimac 22 certified stores and 1 shopping center with LEED Certification and 1 with pre -certification 67 stores and 23 eco-friendly shopping centers Note: Information as of December 2016. 14
Corporate Governance Practices Board of Directors Board Committees Chairman Carlo Solari Donaggio Vice-Chairman Juan Carlos Cortés Solari Directors Sergio Cardone Solari Juan Pablo del Río Goudie José Luis del Río Goudie Carlos Heller Solari María Cecilia Karlezi Solari Paola Cúneo Queirolo Independent Director Hernán Büchi Buc Compensatio n and Talent Committee Audit Committee Strategy Committee Presence of an independent director at holding level and in relevant subsidiaries Controlling Group consisting of 7 families Controlling Group 75% Free Float 25% Note: Information as of December 2016. Controlling Group as of September 2017. 15
CONSOLIDATED STATEMENTS
Consolidated Statements Income Statement (Million of USD) 3Q16 % Rev. 3Q17 % Rev. Var % 9M16 % Rev. 9M17 % Rev. Var % Revenues of Non-Banking Operations 2.931 3.044 3,9% 8.948 9.263 3,5% Revenues of Banking Operations 274 279 1,9% 799 854 6,8% Total Revenues 3.204 100,0% 3.323 100,0% 3,7% 9.747 100,0% 10.117 100,0% 3,8% COGS of Non-Banking Operations (1.935) -66,0% (2.008) -66,0% 3,8% (5.925) -66,2% (6.062) -65,4% 2,3% COGS of Banking Operations (124) -45,3% (125) -45,0% 1,1% (372) -46,6% (407) -47,6% 9,2% Gross Profit 1.146 35,7% 1.190 35,8% 3,8% 3.450 35,4% 3.648 36,1% 5,7% SG&A Expenses (853) -26,6% (913) -27,5% 7,0% (2.521) -25,9% (2.682) -26,5% 6,4% Operational Income 292 9,1% 276 8,3% -5,5% 929 9,5% 966 9,5% 4,0% Depreciation + Amortization 104 3,2% 113 3,4% 9,1% 304 3,1% 332 3,3% 9,2% EBITDA 396 12,3% 389 11,7% -1,7% 1.233 12,6% 1.297 12,8% 5,2% Other Income / (Expenses) 215 (2) -100,9% 216 2-99,0% Net Financial Income / (Cost) (79) (73) -6,8% (264) (228) -13,7% Profit / (Loss) in Associates 7 4-39,1% 25 16-36,0% Exchange Rate Differences (5) 3 NM 5 2-69,1% Non-Operating Profit 139 4,3% (68) -2,0% -149,2% (18) -0,2% (208) -2,1% 1039,7% Profit Before Tax Expenses 431 13,4% 208 6,3% -51,7% 911 9,3% 757 7,5% -16,8% Income Tax (46) (56) 21,5% (149) (189) 27,0% Minority Interest (55) (18) -67,6% (86) (53) -38,4% Net Profit / (Loss) 329 10,3% 134 4,0% -59,4% 676 6,9% 516 5,1% -23,7% Note: All dollar figures are calculated based on the observed exchange rate as of October 2 nd, 2017 (637,93 CLP/US$). 17
Consolidated Statements Balance Sheet (Million of USD) Dec 16 Sep 17 (Million of USD) Dec 16 Sep 17 Cash & cash equivalents 316 328 Other current financial liabilities 1.681 1.717 Current trade & other receivables 2.819 2.742 Current trade & other payables 1.642 1.388 Inventories 1.892 1.943 Others 528 455 Others 330 387 Total Non-Banking Current Assets 5.357 5.400 Total Non-Banking Current Liabilities 3.851 3.560 Non-Current trade & other receivables 377 381 Other non-current financial liabilities 4.218 4.340 Goodwill 814 806 Others 1.016 1.034 PP&E & Investment properties 8.344 8.553 Others 1.031 1.100 Total Non-Banking Non-Current Assets 10.567 10.840 Total Non-Banking Non-Current Liab. 5.234 5.374 Total Non-Banking Operations Assets 15.924 16.239 Total Non-Banking Oper. Liabilities 9.085 8.934 Loans & accounts receivable from clients 4.110 3.966 Total Banking Oper. Liabilities 4.855 4.793 Others 1.821 1.887 TOTAL LIABILITIES 13.940 13.727 Total Banking Operations Assets 5.930 5.853 Shareholders' Equity 7.914 8.366 TOTAL ASSETS 21.854 22.093 TOTAL EQUITY & LIABILITIES 21.854 22.093 Note: All dollar figures are calculated based on the observed exchange rate as of October 2 nd, 2017 (637,93 CLP/US$). 18
Financial Situation Net Financial Debt/Ebitda (times) w/o Banking Operations 3,24 3,40 3,36 Debt Profile (US$ million) w/o Banking Operations 2.755 1.052 829 520 422 277 sep-16 dec 16 sep-17 2017 2018 2019 2020 2021 2022+ Leverage (times) w/o Banking Operations Debt By Maturity w/o Banking Operations Debt By Type w/o Banking Operations 1,02 1,14 1,07 49% 51% 31% 69% sep-16 dic 16 sep-17 Public Bonds Duration: 4.27 years Short Term Long Term Financial Debt w/o Banks 1 : US$ 5,856 MM Note: All dollar figures are calculated based on the observed exchange rate as of October 2 nd, 2017 (637,93 CLP/US$). 1. Does not include accrued interests 19
CORPORATE STRUCTURE
Corporate Structure SACI Falabella 99.8% Chile Peru 1 Argentina Colombia Falabella 100% Saga Falab. 98.0% Falabella 100% Falabella 65% 60% Brazil Uruguay 465,000 Sodimac 100% Sodimac 100% Sodimac 100% Sodimac 49% 3 Construdecor Sodimac 100% Imperial 60% Maestro 100% Tottus 88% Tottus 100% CMR 100% Banco Falab.100% CMR 100% Banco Falab. 65% Banco Falab.100% Open Plaza 100% Rentas Falabella (Open Plaza) 100% Mall Plaza Mall Plaza 59.3% Mall Plaza Peru 66.7% 2 33.3% 100% Nuevos Desarrollos 77.5% 1 Through Falabella Perú S.A.A. 2 New company created following the dissolution of Aventura Plaza JV. 3 Unconsolidated subsidiary 21
BUSINESS UNIT OVERVIEW
Department Stores Business Overview Main categories: apparel, home electronics and home accessories / furniture. Diverse portfolio of private brands and exclusive international brands. Leading online retailer, with click & collect implemented in all four countries. Operates specialty stores for exclusive and second generation apparel and footwear brands. Regional Footprint Chile 45 stores Peru 29 stores Revenues (US$ million, September 2017 LTM) 2,388 Total: 4,381 Sales /m 2 1 (US$, September 2017 LTM) 7,677 5,287 3,552 8,447 Colombia 26 stores 923 582 488 Argentina 11 stores Chile Peru Colombia Argentina TOTAL 111 Note: All dollar figures are calculated based on the observed exchange rate as of October 2nd, 2017 (637,93 CLP/US$). Number of stores as of September 2017. 1. Sales LTM divided by average m 2. 23
Home Improvement Business Overview Main categories: lumber & building materials, hardware, appliances, bath & kitchen, home accessories, furniture, outdoor & garden, lighting. Formats: Sodimac Homecenter, Sodimac Constructor, Sodimac Homecenter /Constructor, Imperial, Homy, Dicico and Maestro. Expertise in selling directly to construction sector players and large companies, as well as DIY customers and families. Strong online sales strategy, click & collect. Regional Footprint Chile 87 stores Revenues (US$ million, September 2017 LTM) Sales /m 2 1 (US$, September 2017 LTM) Peru Colombia Argentina 56 stores 38 stores 8 stores 3,094 934 1,201 Total: 5,783 4,291 2,525 3,390 3,069 1,872 Brazil 56 stores 264 290 Uruguay TOTAL 248 3 stores Chile Colombia Brazil Chile Peru Colombia Argentina Brazil Note: All dollar figures are calculated based on the observed exchange rate as of October 2 nd, 2017 (637,93 CLP/US$). Number of stores as of September 2017. 1. Does not include revenue from Sodimac Uruguay 2. Sales LTM divided by average m 2. 24
Supermarkets Business Overview Formats: hypermarkets, supermarkets and Hiperbodega Precio Uno in Peru. Started operations in 2002 in Peru under Tottus brand and entered Chilean market in 2004 with the acquisition of San Francisco, which was later rebranded as Tottus. Increased penetration of private labels (Tottus and Precio Uno). E-commerce platform. Regional Footprint Revenues (US$ million, September 2017 LTM) Sales /m 2 1 (US$, September 2017 LTM) Chile Peru 63 stores 61 stores 1,140 Total: 2,226 1,086 5,472 5,045 TOTAL 124 Chile Peru Chile Peru Note: All dollar figures are calculated based on the observed exchange rate as of October 2 nd, 2017 637,93 CLP/US$. Number of stores as of September 2017. 1. Sales LTM divided by average m 2. Sales area considered for Tottus does not include the check out area in order to be comparable with peer s sales area. 25
Financial Services Business Overview Falabella Financiero offers a wide range of integrated financial products and services. Provides customers access to credit, combining the traditional financial business with the proximity to customers through retail formats. Five business units: CMR Falabella (credit card), Banco Falabella (bank), Seguros Falabella (insurance broker), Viajes Falabella (travel agency) and Movil Falabella (mobile virtual operator). Operates in Chile, Peru, Colombia and Argentina. Regional Footprint Chile 2.4 m CMR ccounts 98 bank branches Gross Loan Portfolio (US$ million, September 2017) 4.962 Loan Loss Provision 1 % September 2017 11,5% Peru Colombia 1.0 m CMR accounts 78 bank branches 1.0 m CMR accounts 70 bank branches 1.076 Total: 6,966 668 261 4,6% 8,1% 2,4% Argentina 0.5 m CMR accounts 18 bank branches Note: All dollar figures are calculated based on the observed exchange rate as of October 2 nd, 2017 (637,93 CLP/US$). 1. Per local regulation (not comparable across countries). 26
Real Estate Business Overview Largest operator in Chile and one of the leaders in Latin America: Mallplaza: Operates large shopping malls in Chile, Peru and Colombia. Open Plaza: Operates small shopping centers with 2 or 3 anchor stores, as well as other stores. Regional Footprint # Shopping Malls '000 GLA Sep-16 Sep-17 Sep-16 Sep-17 Mall Plaza 15 16 1,213 1,328 Open Plaza 10 10 228 229 CHILE 25 26 1,441 1,557 AP/Mall Plaza Peru 1 2 3 159 199 Open Plaza 10 11 273 315 PERU 12 14 432 514 Mall Plaza 1 1 26 27 COLOMBIA 1 1 26 27 Integrated Offering 2 +2,761 specialty stores 18 medical centers +404 restaurants 10 public libraries 134 cinema screens 17 gyms TOTAL Real State 38 41 1,899 2,098 Free Standing Stores 1,021 982 Total GLA 2,920 3,080 38 game areas 13 educational institutions 3 exhibition rooms Owned by the company throughout the region. Information for Mallplaza shopping centers as of September 2017. 27
Contact Information www.falabella.com/inversionistas inversionistas@falabella.cl Phone: +56 (2) 2487-3910 Andrea González Bayón Head of IR agonzalezba@falabella.cl Constanza Saver IR Analyst csaver@falabella.cl Andrea Jiménez IR Analyst apjimenez@falabella.cl 28
Disclaimer This presentation contains forward-looking statements, including statements regarding the intent, belief or current expectations of S.A.C.I. Falabella and its management. Investors are cautioned that any such forward-looking statements are not guarantee of future performance and involve a number of risks and uncertainties including, but not limited to, the risks detailed in the S.A.C.I. Falabella s financial statements, and the fact that actual results could differ materially from those indicated by such forward-looking statements. 29