Good day, ladies and gentlemen, and welcome to Falabella Earnings Call. My name is Gigi, and I will be your coordinator for today. At this time, all participants are in a listen-only mode. In the first part, Mr. Juan Luis Carrasco, Head of Investor Relations, will present a summary of the consolidated results for the second quarter of 2021. Following this, Mr. Gastón Bottazzini, Chief Executive Officer, will share some highlights on the performance of the company. Afterwards, we will then open the line for questions. If you would like to participate in this part of the call, please press star followed by one at any time during the conference. If you need assistance at any time during the call, please press star followed by zero, and a coordinator will be happy to assist you. Now we'll start with the conference with Mr. Juan Luis Carrasco. Thank you, Gigi. Good afternoon, everyone, and welcome to Falabella's second quarter 2021 earnings call. Joining me on today's call are Gastón Bottazzini, our Chief Executive Officer, Alejandro González, our Chief Financial Officer, and Benoit de Grave, CEO of falabella.com. I would like to remind you that numbers presented during the call will be presented in US dollars and rounded to millions. Therefore, certain differences may arise with the published financial statements. I will start the call by going over the key financial highlights of the period. Let us begin reviewing from slide four onwards to go over the financial results for the period. During the second quarter of 2021, the company's consolidated revenue reached $3.6 billion, an increase of over 50% on a year-over-year basis. This increase was explained by higher revenues from our retail businesses across the region, partially offset by lower revenue from the banking businesses. Retail formats in Chile performed strong, with department store revenue growing by over 98%, home improvement by 96%, and supermarket by 25%. Banking revenues fell by 13.9%, mainly due to an 8.6% contraction in the loan portfolio on a year-over-year basis, which generated lower interest income. Shopping centers reported growth of over 110% on a year-over-year basis, associated with increased lease income due to higher operational GLA when comparing to the second quarter of 2020. During the second quarter, our omni-channel platform reported total sales growth of 79% in the region. This is considering both e-commerce and physical stores. Our e-commerce platform achieved an online sales record, with GMV totaling $1.2 billion, representing an increase of 38% on a year-over-year basis, on an FX neutral basis as well. Online GMV for the last 12 months totaled $4.1 billion. Gross profit reached $1.2 billion in the second quarter 2021, representing an increase of almost 90% on a year-over-year basis, mainly because higher contributions from home improvement in Chile, which increased its margin by over 300 basis points, and department stores in Chile, which increased its margin by over 400 basis points, explains mainly by lower markdowns. The Chilean banking business also produced a higher margin, explained by lower cost of risk. Turning into slide five, consolidated EBITDA was $493 million for the quarter, up from the negative $35 million in the same period in last year. This increase reflected a 30.6% margin, mainly due to higher contributions from retail businesses in Chile and banking operations in the same country. Net income reached $185 million for the second quarter of 2021, mainly resulting from higher contributions from home improvement in Chile, department stores in Chile, Banco Falabella in Chile as well, and to a lesser extent, from home improvement in Peru and the real estate business. I will now turn the call over to Gastón. Thank you, Juan Luis. Thank you everybody, who's joining us this morning. As you know, we are entering a period of greater mobility and greater activity throughout the region, and particularly in Chile. At this point, I would really like to recognize and express our gratefulness for the whole Falabella team that has really done an incredible job and rose to the challenge of keeping operations as normal as possible through a very difficult period. Having said that, we continue to be extremely cautious and recognize that we are still navigating a changing environment. The performance of this quarter is driven by three sets of factors. The first one has to do with the strong consumption dynamic we are operating in. In Chile and across the region, this has served as a major tailwind as individuals continue to hold increased liquidity and have oriented their spending to consumption goods. At the same time as mobility restrictions have begun to ease, our physical stores continue to recover performance, and they are driving, combined with the online sales, a very strong top-line growth. Our omni-channel retail platform reported sales growth of 79% in the region, combining physical stores and e-commerce, highlighting the value of our physical and digital ecosystem. Home improvement continues to be a very relevant engine growth, capturing strong demand levels throughout the region. We continue to see very positive trends in e-commerce, and particularly in our mix. Our private label brands, and especially in apparel, continue to grow participation and share in overall sales, providing a differentiating factor to our value proposition. Overall, shares in soft categories continue to expand, with apparel reaching close to 35% of online sales in department stores. In the banking operation, we have reached a turning point in which, during this quarter, we have started to see overall loan growth, particularly in Chile and Colombia. The second set of factors has to do with the way we have managed different aspects of cost. During the pandemic, we have made, as I have mentioned in prior calls, many efforts around reducing our cost structure in a sustainable way. This has translated into more positive results as sales and demand expand and our cost structure doesn't move in the same direction and at the same rate. In the second place, we have kept inventory levels very controlled. Again, the rise in demand has also had a very positive effect on that. Finally, risk management has been very proactive, has been helped, of course, by liquidity in the market, but we are seeing unprecedented levels, unprecedentedly low levels of risk in each one of our operations. The third set of factors have to do with our company-wide initiatives to continue to strengthen our ecosystem, particularly in e-commerce, logistics, loyalty, and our digital platforms. They have translated into increased customer stickiness and recurrence. To mention some of these, we have launched in the last few days falabella.com as the integrating platform where all of our 1P e-commerce and all of our 3P sellers publish their products, completing close to 8 million SKUs from retailers and from close to 14,000 sellers. The integrated e-commerce platform is a very powerful growth engine, as it allows us to enrich our value proposition to customers and sellers, fully leveraging all of the capabilities that we have in our ecosystem. This launch marks a turning point in our digital transformation and strengthens our value proposition, as I said. It's quite a relevant milestone, but at the same time, it's the beginning of a journey as we remain committed to constantly evolve and simplify the experience of our customers in our platforms. Secondly, in logistics, we have made great progress in making our logistics much more efficient and agile in order processing. We currently have over 1.5 million sq m of warehouses, and during the pandemic, have added 150,000 sq m. This has allowed us to improve service levels from a very low point at about one year ago. Not only that, but also give us increased inventory visibility and optimized product sourcing, which is translating into operational efficiencies, and it's allowing us to improve and optimize markdowns. In our digital banking operations, we have continued to drive digital functionalities and products to our customers. In particular, our card opening process has achieved a milestone of opening 195,000 fully digital credit cards in this quarter, which is more than five times what we did in 2020. Digital opening of current accounts, which is a new functionality that we are offering, is starting to gain traction as well. This quarter, we opened more than 50,000 accounts fully digitally. We continue to roll out our improved loan origination supported by improved risk models. This has allowed us to boost cross-sell and also improve the participation of digital loan origination, which stands at above 50% throughout the region. Our recently launched wallet, Fpay, has reached a TPV of CLP 2.9 billion over the quarter, which is mostly concentrated in our own platforms, and we are starting to do an outreach to third parties as well as to sellers so that this wallet becomes much more available in other merchants of high frequency. Thirdly, in loyalty, we have reached a level of 12.6 million participants in the program. This is a very sharp increase of 68% year over year. The most interesting or important impact of this for us is the much higher visibility it is giving us of the transactions in our ecosystem, which has gone about a year and a half ago from a level to about 30%, which was the participation of our own credit cards, to today, we can see about 80% of total transactions performed both in our digital platforms and our physical stores. As a result of that, we can make many improvements to our value proposition, both in terms of commercial offers, pre-approved credit cards and accounts, and several commercial initiatives that allow us to keep much closer to our customers. Finally, in technology, we are continuing to invest and evolve in the development of proprietary platforms that, over time, are replacing the existing platforms for our customers. These are our e-commerce platform, which is completely replaced as of today. Our marketplace platform, which we are continuing to replace in a gradual stage. Logistics platform, which is at a more early stage, but we are putting a lot of energy in it. Our banking platform, which is quite mature today and is offering most of our banking products with a fully digital experience. Our loyalty platform that is more and more embedded with all of our other digital platforms that we operate. The development of these platforms is a very important engine of growth going forward. To be able to accomplish all that, we continue to grow our in-house development centers in India, Argentina, Chile, and Mexico, reaching over 1,400 developers working in the Falabella ecosystem right now. As closing remarks, I would like to highlight the implementation and execution of falabella.com, and particularly how this has served as a very strong example of collaboration and change in the culture of our business, and how it is driving a much more customer-centric organization over time. We are encouraged by the results of the second quarter. More importantly, committed to continue to advance in our journey of digital transformation and building digital platforms for a much better customer experience. As a result of that, sustainable growth throughout the region. Thank you very much. Thank you, Gaston. We will now open the line for questions. Ladies and gentlemen, we are ready to open the lines up for your questions. If you wish to ask a question, please press star, followed by one on your touch tone telephone. If your question has been answered or you wish to withdraw your question, press the pound key. Again, press star one to ask a question. Please stand by for your first question. Your first question comes from the line of Marko Kraljevic from LarrainVial. Your line is now open. Hi, everybody. Thanks for taking my question. Could you please share with us more color on falabella.com? What are the key differentiating factors of the value proposition of falabella.com? Thanks. Hi, Marko. Benoit de Grave here. I will answer your question. Thank you very much for being here with us and for your question. The key main differentiating factor that we see, first of all, is the access in a single place to a broader product offering, combining 1P and 3P products. The second one is the fact that our customers are able to have access to a single shopping cart and check out for products from all our retailers in marketplace. We leverage Fpay as a key engine for growing our online platform. This allows us to a better and smoother payment experience for customers by taking full control of the checkout and the payment process without relying on third parties, right? Through that, we've managed to increase conversion rates and also decrease credit card fraud rate, right? The fourth point are the benefits for the sellers, because we are focused on helping them growing their business, mainly through the access to a large traffic base, combining all our offering through 1P and 3P. We have the largest traffic base in the region. We give them access to marketing and analytic tools in order to boost their business through different tools of marketing and data and analytics. As Gastón mentioned, we give them access to our loyalty programs with more than 2.6 million customers. This allows us to have a strong product recommendation for third-party products. The payment processing and financing, we are starting to give cash advances to our sellers and working capital financing as well. Lastly, logistics. We're putting all of our logistic networks for the sellers, mainly for order fulfillment, with larger warehouses where we are starting to give access to our sellers, then the click and collect points in all of our stores and shopping malls. Thanks. Thank you. Our next question comes from the line of Emilio Acevedo from Santander. Your line is now open. Hello to everyone, and congrats for the result. I have also a question on the e-commerce platform for falabella.com. I would like to know how do you lever on the key elements and assets of your ecosystem for this new platform. Thank you. Thank you very much, Emilio, for your question. First of all, I would say that we lever on the networks of more than 500 stores and 46 shopping malls. This allows us to enhance and complement the omni-channel experience for our customers, both on the shopping experience and on the returns and exchange processes. Second, we lever the established and well-recognized selection of private level brands that we have from all of our formats. Third, we give access to our leading and highly valued loyalty program, as I just mentioned in the previous question, with more than 2 million participants. The financing alternative that we are giving our customers and sellers through Banco Falabella and Fpay, and payment processing services through Fpay. Also the extended product delivery options, where we are accelerating on express and on-demand delivery and two-day delivery, click and collect, returning products, and exchanges. Thank you very much. Thank you. Our next question comes from the line of Irma Sgarz from Goldman Sachs. Yes, hi. Thank you for taking my question. I was curious, looking ahead into the fourth quarter holiday season, do you foresee any bottlenecks? Are you comfortable with current inventory levels? The second question, in terms of the provision reversals that have helped, obviously, the result in the Banco Falabella and the financing operations in the year to date. When you look into the back half of this year and into next year, how should we think about where profitability can go and where provisioning levels also should be going from here? Should they be going back to historical levels from here? Do you foresee any further releases of provisions? Thank you, Irma, for your question. This is Gastón. Regarding your question around supply chain bottlenecks, this is a situation in which worldwide availability of vessels is definitely less than ideal. We do have secured levels that we are comfortable with in terms of supplying the holiday season in particular. We are going to be tight in inventories in general, across all of our formats for the next few months, for sure. Also in relative terms, we think we're going to be in a relatively good position. On the other hand, talking about supply chain bottlenecks in terms of distribution, we are, as I mentioned previously, making additional investments in logistics, building transfer centers, which are going into operation in the next couple of months. We think that will allow us to support the period of highest demand with very good delivery systems. I'm sorry, with very good delivery services and times. At least that's our objective as we're doing all of this. We think if we accomplish both of those things, which is securing a level of vessel availability that is, even though being less than ideal, puts us in a good position to supply all of the markets in which we operate. Combine that with a robust distribution system, we should be in good shape. Regarding provision reversals, these are both a result of the liquidity that has been in the market and the fact that we have grown less, there has been much less demand of credit. Both factors are affecting the reversal of provisions. As we increase the loan book over time, we expect that provisions will start to increase again. We don't think they will go back to pre-pandemic levels because we are putting more and more energy into our models. As I mentioned before, we are gaining increasing visibility of customer behavior, which should allow us to improve our origination, both of new credit card holders and of bank loans. In addition to that, you mentioned expenses in general. We are investing heavily, as I said before, in the digital banking solutions. This is translating into a reduction in the expenses of our physical branch network. In a period of a year, we should probably be operating about 30% less branches than now. All of that should translate into higher efficiency. Of course, there will be a rebound in provisions, but our objective is to make that rebound not back to pre-pandemic levels, but below that. Great. Thank you very much. Thank you. Our next question comes from the line of Gabriela Benjamin from BlackRock. Your line is now open. Hi. Thank you. Those are very amazing results, especially in Chile. If you could just highlight a little bit if this was due to a market share gain of you guys within the market or did the overall market grow in line with this? Put in there the Cyber Day pension money that at some point will come to an end. If you could give us perspective, if you're gaining market share or if this is just you're growing along with the market. My second question is regarding physical footprint. Similar to what you just mentioned with digital banking, as the business becomes more digital, I think there's less need for physical footprint also for your traditional department stores as well as the home improvement store. How do you think of rationalizing your physical space versus your online growth? Thank you, Gabriela, for your question. In terms of the source of the better results and the growth, there is no doubt that Chile has been the main driver and the liquidity in the market as well as the restrictions that made it not so easy to spend money on everything that usually was taking part in the wallet. Therefore, we have a greater share of wallet in the share of wallet of the consumer in consumer goods versus others like travel or entertainment, et cetera. That is a very big driver. In terms of the visibility of market share, the visibility we have is very low, particularly, if you were talking about the last quarter. We have longer term visibility of market share. We do believe we have some market share gain. In those areas where we have very good visibility of market share, for example, our banking operation, we are seeing a very healthy gain of market share, for example, of credit card sales. We are growing above market levels in credit card sales. That is also an indication of what may be happening in other parts of the business, but we don't really have such exact numbers in areas like electronics or home improvement, et cetera. In terms of the physical footprint, we are actually in a permanent review of our physical footprint. We have been closing stores. We do that very selectively and very gradually. You will see in the department store operations, some stores being closed. We really are leveraging our physical footprint in many different ways today, which really is giving the stores roles that they didn't have, for example, two or three years ago. Probably the most important role is that, for example, the proportion of click and collect or the proportion of orders that is picked up in stores, which was around 60% before the pandemic and went almost to zero or very low levels during the pandemic, today is returning to levels of 30% or even 40%, and we expect that to continue to grow, and therefore, we are putting more energy and focus into the quality of these pickup points, the level of technology we put in these pickup points, and the kind of experience we offer the customer integrating the experience of the pickup points, for example, with the usage of the app. All of that is driving actually adoption of our digital tools. Another example is the large number of functionalities in our app that are very linked to activities in the store, from searching products, trying clothing, again, picking up products, returning products, getting in contact with an advisor. Many of those activities that in the store were purely physical today are starting to be driven by a digital interaction, and we are going to put a lot of focus in the coming months and years into improving that digital interaction within the store. We are finding that that is driving visits, it's driving engagement. Actually, the stores, to summarize, we will close some stores very selectively, particularly when they have overlap geographically, et cetera. For the most part, we want to have a good store coverage of the different regions in which we operate, because they are giving us, we think, strong advantages going forward. Thank you. Thank you. Our next question comes from the line of Rodrigo Echagaray from Scotiabank. Your line is now open. Thank you, and congratulations on the results. I guess my question is more related to the challenges, culturally speaking, for the firm. Obviously, as the online channel gains share within the firm, and you continue to strengthen the falabella.com side and the delivery, I was just wondering, what do you think are the next challenges for you, Gastón, culturally speaking, for you to take that digital transformation to the next level? Thank you. Thank you, Rodrigo, for your question. Of course, not being a digitally native and incorporating some businesses that are digitally native, like we did with Linio a couple of years, and trying to transform our business, entails a very strong challenge of changing the culture. Probably that is the most relevant challenge we have had over the last two years, and we will continue to have going forward. The way I see the challenges and the way the management team is working through that is, number one, the way we looked at our business in the past was, these are businesses that have very strong positions and that can be improved or can gain synergies from collaboration. When you look at the businesses we're building today, like payments, Fpay, or falabella.com, they are very horizontal business. They cannot win without being supported by the overall organization. Therefore, collaboration becomes not a nice-to-have that will enhance our performance, but a condition for success. That's probably the number one value and the number one change we're making in the way of working, which is collaborating across businesses, having initiatives where the goal is the most important thing and not the organization or the part of the organization you belong to is the most important thing, is the main change. Collaboration is number 1, and what drives collaboration is, as I said, working based on objectives that are oriented towards an end goal and towards the customer. That's another very important change is that we fix objectives. We put together teams that are multi-business, multi-function, and the main driver of those teams is the objective and not the performance of a single business or the optimization of a single part of the organization. That is another change, and we're pushing that. Initially, it was the driver of the development of these digital platforms, but today more and more it's the driver of the development of the whole business. This way of working around sales, around objectives, around having interdependencies incorporated to the working teams, rather than having people have to go to different places to resolve interdependencies, and therefore giving these teams autonomy to operate once the objective has been set. That's probably, around those two or three things, the most important cultural changes, together with this increased tolerance to error, right? Which in the physical world, error has a cost level that is relatively much higher than it does in the digital world, and therefore trial and error becomes also a very important driver of our performance going forward. Got it. Makes sense. You touched on this briefly, but just to follow up on my end. How do you make sure that you have the right incentives in place to let the falabella.com have a chance to succeed against Amazon and Mercado Libre and whatnot? In many ways, the Falabella.com is competing against the store, right? They would need to have their own independence on pricing, on availability of SKUs, promotions. How do you think about having the right incentives to allow for that to happen? Yes. Thank you for the question, Rodrigo. Really the change we are making is actually to allow for that alignment for incentives. Instead of having retail and marketplace integrated, make marketplace an umbrella sales platform for all of the retailers and also the umbrella sales platform for all of the sellers. Therefore, the objective of the marketplace is to permanently improve the offering and maximize the level of sales. The objective of all of the retailers is to maximize their 1P sales in that marketplace. In that way, everybody's pushing for sales growth, from a slightly different perspective, but both the marketplace and the retailers are benefiting from that sales growth. At the same time as the marketplace improves the value proposition to the final customer, that should turn into increased traffic, which should turn into improved sales of the first-party retailers. What you say is true, that they compete, but at the same time that they compete, they have access to a much broader or a much higher level of traffic by joining all the forces in a single destination. Doing a double-click on that, the incentives are placed so that everybody wins when there is sales and growth. The marketplace wins because they have a better take rate. The retailers win because they have, of course, better sales and, as a result of that, higher leverage of their investments. Very clear, Gastón. Thank you. Thank you. Our next question comes from the line of Antonio Hernández from Barclays. Hi. Good morning. Thanks for taking my question, and congrats on your results. My question is, you've already mentioned a little bit on your performance in Chile, the fact that there's not that much of industry there in terms of market share. I don't know if you could elaborate a little bit on the other regions as well, Brazil and the rest of the countries, how you see the industry there, competition, and market share performance? Thanks. Thank you, Antonio. I would divide the rest of the region into two. One is the rest of the region where we have several of our businesses and are really developing the same ecosystem model that we are in Chile, and that would be Colombia and Peru. In those two, we are seeing a very rapid recovery of demand and, in all of the businesses, seeing a better commercial dynamic. In Peru, in particular, department stores and home improvement are recovering very well. In grocery in Peru, actually, that business did very well throughout, so you don't see an improvement there, but you see a continued good performance. In Colombia, both in home improvement and department stores, we are seeing healthy growth rates and maybe a story that is similar to the one we saw in Chile, but comes three to six months delayed from that. The other set of countries around the region would be Brazil and Mexico. In Brazil, we operate our home improvement business. We have continued to remodel our Dicico stores into Sodimac Dicico stores, which means basically turning a construction specialist into a broader home improvement value proposition. This has turned into very healthy sales growth for each one of the stores that we remodel. Therefore, we have no doubt there has been both market share gain and also performance improvements in Brazil with very healthy growth rates. Mexico would be the other newer country where we operate home improvement and our financial business. The reality is we haven't been able to open stores at the rate we would have liked in Mexico. Our plan is a little slower than our aspiration. We have the good news that we have just opened our first store in Monterrey about a week ago. We are going to open more stores in that city and continue to grow our footprint in Mexico. Mexico is still a story around footprint development for that business, where we still have too few stores to call it a consolidated business. Our financial business is starting to grow better this year. It slowed down quite a bit during the pandemic, but it's starting to grow much better in the last couple of months, and we foresee a better second semester of 2021. Perfect. Thanks a lot, and have a nice day. Thank you. Sir, we will now turn to Juan Luis Carrasco for closing remarks. We would like to thank everyone for joining us on Falabella's second quarter 2021 earnings call. Our investor relations teams will remain available for any follow-up questions you may have. Thank you. Have a nice day. Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.