Slides
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December 11, 2024
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10:00 Welcome and Safe Harbor Raimundo Monge, IRO 10:05 Opening Remarks 10:10 Falabella Group’s Vision and Strategy Alejandro González, CEO Key Strategic Enablers Andrea Gonzalez, Chief Loyalty Officer Benoit de Grave Chief Strategy and Transformation Officer Financial Performance Juan Pablo Harrison - CFO 11:15 Coffee Break 11:25 Focused Discussions on Core Businesses (cont.) Renato Giarola, CEO of TottusTottus Fernando de Peña, CEO of MallplazaMallplaza Juan Manuel Matheu, CEO of Banco FalabellaDigital Banking 12:00 Key Takeaways Alejandro Gonzalez - CEO 12:05 Q&A Session 12:55 Closing Remarks Alejandro Gonzalez - CEO 13:00 Lunch with Falabella Group's Management Team Agenda Enrique Ostalé, Chairman 10:45 Focused Discussions on Core Businesses Alejandro Arze, CEO of Home Improvement Sodimac Francisco Irarrazaval, CEO of Falabella Retail Falabella Retail
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These webcasts, presentations and transcripts contain "forward-looking statements," relating to, among other things, future operating and financial results, project performance, expenses, the impact of acquisitions and divestments, business strategy and any restructuring plans. These statements use words, and variations thereof, such as the future tense verbs generally, "plan", "intend", "expect", "anticipate", "estimate", "maintain", "project", "continue", "reduce" and "grow". We caution you not to rely on these forward- looking statements as the basis for any investment or divestment decisions regarding securities issued by the Company. These statements are based on assumptions and expectations of future events at the time they are made and, therefore, are subject to uncertainty. If the underlying assumptions prove to be inaccurate, or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations and projections expressed in these forward-looking statements. Uncertainties relate to, among other things, the company's ability to successfully execute its planned projects and strategic plans, the possibility that expected benefits and opportunities may not materialize in the expected timeframe or at all, the impact of divestments, as well as risks related to the political and economic scenario; new regulations or more demanding regulatory changes; breach of rules and/or regulations; inability to attract and retain talent; cyber-attacks; failures or crashes of key systems; technological obsolescence; financial and market risks (exchange rate, inflation, interest rate, credit and liquidity); climate change causing natural disasters that affect operational continuity and/or increase costs in the value chain; inconsistency between ESG declarations and implementation; damage to infrastructure affecting physical security and operational continuity; conflicts with the community; accidents, illnesses or other events that impact the minimum number of people required to operate; failures in the supply chain and inventories; relationships with suppliers who fail to meet minimum standards; sale of products harmful to people's health or safety; inadequate identification and response to the preferences of our current and prospective customers. A more detailed list and description of these risks can be found in the Annual Report and in the notes to the financial statements of Falabella S.A., which are available online at the company's website (https://investors.falabella.com), as well as on the website of the Financial Market Commission (www.cmfchile.cl). The information contained in each of these presentations pertain to the dates and for the time periods indicated therein, and the company assumes no obligation to update any of the information contained in these materials. Accordingly, you should not rely on the accuracy of any statements or other information contained in any archived webcast or video on demand as the basis for investment or divestment decisions in securities issued by the company. All numbers in this presentation are converted to US Dollars and rounded to millions. Disclaimer
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ALEJANDRO GONZÁLEZ Focusing on Our Five Growth Engines to Strengthen Our Ecosystem
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35 million clients #1 Home Improvement (1) Omnichannel Multi-Specialist Retailer#1 Shopping Centers#1 Loyalty Program (2)#1 #1 Credit Cards & Checking Accounts(4) Market position Supermarket(3) #2 Connecting leading Global Brands, Retailers, Financial Services, and Shopping Centers in a virtuous business cycle (1) In Chile, Peru, Colombia and Uruguay. (2) In Chile. (3) In Peru (4) In Chile.
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Enhance the value proposition of our five core businesses to accelerate growth Refocus our digital strategy and ecosystem development Drive a more effective organization Prioritize investment decisions and capital allocation to restore profitability Our strategy is driven by four key priorities that guide our efforts
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Shopping CentersOmnichannel retail Financial Services Strategic enablers Loyalty Program Home Delivery Technology & Data Talent Focus on our five growth engines: enhancing their value proposition and improving the customer experience, while restoring profitability
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20% emissions Scopes 1 and 2 (vs 2021) Climate action 73% of our energy Supply from renewable sources Circularity and waste 7% food loss and waste (vs 2021) Diversity, equity and inclusion 51.2% Women in total workforce 39.4% Women in top and middle management position ESG risks integration Greenwashing, community conflicts and climate risks integrated into ERM policy and model Human Rights due diligence processes in all our business units Corporate governance While strengthening our ESG leadership in LatAm and securing long-term value(1) +100k Boys and girls reached by educational initiatives +130k Participants in training and/or commercial activities for entrepreneurs and sellers People benefitted by infrastructure improvement projects Social impact +33k (1) End of period figures as of 2023..
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Evolving Digital & IT Strategy to Strengthen our Virtuous Cycle 2018 2023 Building digital capabilities Leveraging digital capabilities to drive growth & profitability 2022 2024
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Home DeliveryProduct Digital MarketingCustomer Experience Partnering with the Best Brands More Specialized Marketplace Cross-Functional Enabler Sellers Sellers Sellers Strengthening Our Brands’ and E-commerce Specialist Experience
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Empowerment and Accountability Business Results-Driven Incentive Model Organizational Redesign to Simplify Operations Reinforcing a Results-Driven and Empowered Organization with Simpler and More Focused Operations
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Focused on Driving Profitability through Disciplined Expense Control, Capital Allocation and Investment Processes Efficient cash flow management and expense control Capital allocation aligned with strategic priorities Portfolio investment optimization
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Lessons Learned Adapting Our Way of Working The Importance of an Agile Organization to respond quickly and effectively Simplified and Focused Operations around our 5 core businesses Stronger focus on data-driven decisions to anticipate market trends and drive smarter strategies Enhanced inventory management to ensure better efficiency and flexibility
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We aim to capitalize and accelerate growth opportunities in our 5 core businesses Accelerate expansion in Mexico Restore profitability in Chile Strengthen our leadership in the region Leading Digital Bank in the region Strengthen omnichannel offering Grow Loan Book in Chile and Mexico Drive profitability In Peru and Colombia Specialist offering with the best brands Accelerate 3P growth Physical expansion in Peru Enhance value proposition in Chile Enhance and Differentiate Our Value Proposition Consolidate as the leading shopping mall operator in the region Consolidate operation in Peru Brownfield growth + M&A in the Andean region
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Trends that are shaping The future of our industry The experience will become inseparable from the product Customers increasingly value seamless omnichannel options Monetizing Core Capabilities to Drive Growth Driving Value through Loyalty Programs
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ANDREA GONZÁLEZ LOYALTY Falabella loyalty program: our ecosystem’s value creation catalyst
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Varied Rewards Special Events Flexibility VALUE PROPOSITION Leadership positions in our core markets #1 #2 #2 CMR Puntos is the preferred Loyalty Program in Chile
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6,2 20,3 2019 2024 # of participants (# MM) 3.3x 1,8 3,3 2019 2024 3,3 8,9 2019 2024 LTM 1.8x 2.7x # of redeemers (# MM) # of redemptions (# MM) Participants: any customer who has accumulated points within the last 12 or 24 months, depending on their Loyalty category; E lite or Premium: 24 months, Fan 12 months. Redeemers: participating customer who has redeemed points within the last 12 or 24 months, depending on their Loyalty categor y; Elite or Premium: 24 months, Fan 12 months. LTM: Last Twelve Months. CMR Puntos is one of the largest and more dynamic loyalty programs in the Andean Region
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Boost customer lifecycle Data Access (Opt-in) The program plays a key role as an enabler of two business objectives:
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9.6 MM11.8 MM 6.8 MM Loyalty Customer Portfolio Participating customers (MM) Enabling data sharing and expanding value creation within our ecosystem 33.4 MM Registered customers 20.3 MM Participating customers 12 MM
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Customer Acquisition Welcome Packs Strategic Onboarding Retention Increase Frequency Reduce churn Cross-selling Driving traffic to malls and stores Personalized offerings Customer Journey Marketing Savings E-mail marketing Custom audiences Risk Assessment Pre qualified credit cards Monetization Custom audiences for 3rd parties pilots Media By multiple uses across the whole business cycle Business Objectives Fraud Prevention
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And allowing for personalization on the bank’s app 2X incremental sales(2) +30% incremental sales(1) Personalized retail promotions in the Bank App with newly launched functions Third party promotions in the app which we monetize (1) Based on preliminary results after launching the functionality for our entire customer portfolio. As of nov -24 (2) Comparing behavior of customers who see the personalized Retail promo in the carousel versus those who don’t, we found that t hose who saw it spent twice as much as those who don’t.
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44% 20% 16% 20% The program generates stickiness Redemption Revenues Others ~80% Loyalty Program spending converted to sales at Falabella retailers (Chile, % of total) Redemption revenue considers payment for redeemed products and the use of gift cards in each format. Redemptions of Points + $ included in the format that corresponds to the share in the cart at the time of redemption.
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1.4x 1.5x -55% …and incremental value per customer Increase in spending Redeemer & Banco Falabella customer Potential Redeemer Increase in transactions Decrease In churn Churn: clients who did not purchase during a 6 month testing period - data as of Sep'24
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BENOIT DE GRAVE TECHNOLOGY & HOME DELIVERY Optimized transversal logistics and technology capabilities to strengthen and differentiate our ecosystem
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Allows us to deliver an enhanced experience while unlocking new revenue streams TECHNOLOGY
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We have successfully developed four highly scalable platforms, designed to adapt and grow seamlessly with evolving needs Supply Chain Exceed customer delivery expectations and leverage group synergies Digital Commerce Accelerate GMV growth by expanding 3P categories Build labels, maintain leadership in 1P and enhance the omnichannel experience 4 technological enablers that complement and comprehensively strengthen our digital platforms: Data, Security, Infrastructure & Development Engineering. Banking Position Banco Falabella as the leading digital bank Stores & Merchandising
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Evolving Digital & IT Strategy to Strengthen our Virtuous Cycle Relaunch of Tottus and Sodimac standalone sites Acceleration of Third-Party Sales Deployment of logistics managed network Launch of instore functionalities Retail Media & Value-Added Services GenAI & Analytical Data Products + 2018 2022 2023 2024 Deployment with focus on Customer Experience and scalability 100% Digital Bank & CMR = Launch & growth of Marketplace / F.com Click and Collect Home Delivery Fulfill by Falabella Building digital capabilities Leveraging digital capabilities to drive growth & profitability
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Logistics is a key driver of e-commerce growth and plays a fundamental role in customer loyalty HOME DELIVERY
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Logistics enhances customer experience and is crucial in their purchase decision, driving business growth Our focus is on meeting our customers' expectations regarding service, speed and convenience Logistics outsourcing Development of Fulfillment facilities Last mile development Logistics services sale 1 2 3 4 Fulfillment by FalabellaThird-Party Logistics Delivery through local operators Supply centers Marketplace development through the creation of Fulfillment by Falabella Development of a logistics network Development of logistics network through cross-dock hubs and regional transfer centers Home Delivery Service focused on delivery speed and customer service Sale of Fulfillment and Logistics services by Falabella 2018 2020 2022 2024
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1P Fulfillment centers Transfer network Transport fleet Final costumer 55 Distribution Centers Fulfillment by Falabella.com Fulfillment by Seller Cross Dock Hubs Transfer Centers Dedicated fleet & Third-Party Logistics Home Delivery Click and Collect First Parties 3P Third Parties We develop our own logistics network by leveraging our facilities and capturing efficiencies in route densification, enabling us to increase our delivery speed 41 Facilities 1.500 Trucks per day 35 MM deliveries per year 531 C&C in stores +1.000 C&C points Service Meet our customers' service and delivery expectations Speed Develop a logistics network that delivers our products to most of our customers in less than 48 hours Efficiency Support the scalable growth of our network by efficiently using our logistics network and identifying synergies between the volumes of our 1P and 3P sellers
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53% (1) Information as of 3Q24 for Chile, Peru and Colombia, includes C&C and Home Delivery, does not include packages delivered by Sellers or food. 47%Home Delivery Click and Collect Falabella delivery options Same day 24H / 48H Pick a date Total deliveries(1) Nearby stores georeferentiation Next-day pick-up at external locations Same day pick-up alternatives Next-day pick-up at colaboratives points Next day pick-up alternatives Falabella leverages its stores and logistics capabilities to offer competitive delivery options for 1P and 3P
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(1) Information as of 3Q24 for Chile, Peru and Colombia, includes C&C and Home Delivery, does not include packages delivered by Sellers or food; (2) OTD 3Q24, does not include packages delivered by Sellers or food; (3) Average last -mile cost for portable capital from Jan- Sept 2024 +95% customer service level(2) -34% in average last-mile cost(3) +84% orders delivered with Falabella managed network(1) +61% of our customers with delivery in the capital get their orders in less than 24 hours(1) +71% of our customers receive their orders in less than 48 hours(1) Delivery speed and service levels have improved in the region, and we are now accelerating with 3P sellers
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JUAN PABLO HARRISON Improved Margins and Financial Strength Lay the Foundation for Sustainable Growth
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EBITDA Margin (%) 7,5 4,8 5,8 9M19 9M23 9M24 3,4 -6,2 1,6 9M19 9M23 9M24 5,5 5,0 7,1 9M19 9M23 9M24 81,4 77,1 76,8 9M19 9M23 9M24 28,5 4,5 16,6 9M19 9M23 9M24 Our strategy has allowed to enhanced profitability across our five core engines Revenue Share(2) (%) 4%20%27%31% 16% (1) Figures for Falabella Retail include the operation of the Marketplace since 2023 and excludes the operation of Argentina in 2019.
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Restoring profitability and financial strength Inventory reduction Marketing expense optimization Logistics cost management enhancement Corporate efficiencies Improving operational efficiency Deepening operational efficiency wins and restoring profitability across our businesses Consolidating financial strength 2,9 3,6 5,0 6,3 7,3 8,6 8,2 6,5 5,7 4,7 3,7 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 Net Debt / EBITDA(1) (non-banking segment) Efficiency initiative Oct 2022 Selective CAPEX only in 2024 Monetizing non- core assets: ~US $700 MM achieved to date 10,0 8,0 6,0 6,8 4,6 5,2 6,7 9,4 10,4 11,2 11,6 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 EBITDA Margin (%) Target 2.5x - 3.0x (1) EBITDA LTM = Gross margin - distribution costs - administrative expenses -expenses by function + depreciation. Net financial debt = current financial liabilities + non-current financial liabilities - hedging assets - cash and cash equivalents
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We remain committed to maximizing value for our shareholders Continue enhancing profitability Strengthen financial position to capture opportunities across our 5 growth engines Focus investment and capital allocation to ensure sustainable growth
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Debt profile and allocation optimized to support our business needs Strategic Business Investment: Prioritize growth through our 5 growth engines 32% 1% Non-banking businesses, after hedging derivatives 79 661 527 358 184 3.038 2024 2025 2026 2027 2028 2029+ Debt Maturity Profile (US$ MM) Non-banking businesses, after hedging derivatives HoldCo 59% 3% 1% Others 4% Gross Debt by Company
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Investment Plan 2025 (US$ MM) Our 2025 Investment Plan(1) strategy is designed to drive sustainable growth with a strong focus on enhancing our omnichannel customer experience 108 650 58 26 99 359 Opex Technology Capex Technology Logistics Store Openings Expanding and Transforming Footprint Total Investment Plan 2025 (1) Includes operations that Falabella does not consolidate.
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Investment Plan 2025 (US$ MM) Our 2025 Investment Plan(1) strategy is designed to drive sustainable growth with a strong focus on enhancing our omnichannel customer experience 108 650 58 26 99 359 Opex Technology Capex Technology Logistics Store Openings Expanding and Transforming Footprint Total Investment Plan 2025 Stores Opening in 2025 15 new stores with focus in supermarket in Peru and Sodimac in Mexico (1) Includes operations that Falabella does not consolidate.
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Investment Plan 2025 (US$ MM) Our 2025 Investment Plan(1) strategy is designed to drive sustainable growth with a strong focus on enhancing our omnichannel customer experience 108 650 58 26 99 359 Opex Technology Capex Technology Logistics Store Openings Expanding and Transforming Footprint Total Investment Plan 2025 • Enhancing Mallplaza assets in Peru and transformation in Chile • Store renovations to improve experience across retailers Expanding & Transforming Footprint (1) Includes operations that Falabella does not consolidate.
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We expect to continue driving profitability on the different BUs 10.6% LTM Sep-24 ~200-300 bps EBITDA margin 12.5% - 13.5% By end of 2026 Highlights: Recovery of Home Improvement Improvement in e-commerce Expansion in financial services Revenue: Mid-to high single digit growth SG&A: Flat in real terms
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Recovering growth, profitability and investment to achieve a balanced and successful physical-digital future Key takeaways Funds to cover Jan-25 international bond already in balance Recovering historical investment levels and well positioned to reach profitability targets Expected breakeven in e-commerce by YE 2026
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ALEJANDRO ARZE HOME IMPROVEMENT Market Leadership Through an Enhanced Value Proposition
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Market leaders in our core countries #1in Market Share(2) in Chile, Uruguay, Peru and Colombia +US$ 5.7 B in revenues(1) with more than 260 stores +20 MM Customers 7 Countries 42 55 87 7 4 54 15 # of stores per country (1) LTM figures as of September 2024 includes Colombia and Mexico, operations that we do not consolidate. (2) Market share: Internal estimation.
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Global slowdown in the construction industry Leading Indicator of Remodeling Activity (1) US$B Rate of change 12% 16% 17% 16% 13% 9% 5% 2% -1% -3% -3% -6% -3% -1% Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024P Q1 2025P Q2 2025P (1): LIRA (USA)
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Expected future recovery of the construction market 13,7 19,8 18,1 17,0 17,2 17,9 2020 2021 2022 2023 2024P 2025P 203,8 251,0 232,4 143,0 132,2 152,6 2020 2021 2022 2023 2024P 2025P Sale of new homes (K) Chile: Santiago (1) Peru: Lima / Callao (1) Colombia (1) 1,7 3,8 0,9 2,8 2,4 -0,8 -1,9 -0,3 1,3 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 4Q 23 1Q 24 2Q 24 Construction GDP (2) (YoY variation) 5,5 9,8 14,4 -1,3 -3,1 -2,7 -8,4 -2,1 0,6 2,4 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 4Q 23 1Q 24 2Q 24 22,7 29,7 21,0 26,0 25,6 30,5 2020 2021 2022 2023 2024P 2025P +3% +19% +6% +4% +15% -10% Chile Peru Colombia -0,8 3,1 3,2 4,4 -11,5 -7,2 -9,3 -4,5 4,7 3,3 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 4Q 23 1Q 24 2Q 24 (1) Source: Central Bank of Chile, SAE (Peru) and CAMACOL (Colombia). (2) Source: CChC (Chile), Central Bank of Peru and DANE (Colombia). GDP YoY variation in real terms.
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Winning strategy for our three client segments: Consumers, PRO and B2B Consumers PRO B2B “Offering all products and services at the best price and in the quantities our customers need, all in one place with a seamless omnichannel experience.” Construction Decor Painting Bath & KitchenFlooring Price dominance • Private Labels • Stock for projects • Commercial Innovation • Assortment • Omnichannel • Expert advice for projects • Fast and simple buying experience • Complement our assortment with third-party products Products Extended assortment with 3P products Key attributes Categories Clients Customer experience VALUE PROPOSITION ~50% of revenue
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Brand awareness Top of mind awareness +90% +60% Our strategy has resulted in strong brand awareness and recognition by our customers Data from GFK Research 2024
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Focus on PRO Clients Private Labels Growth in omnichannel Product and experience innovation To lead the HI market in the main countries where we operate, our strategy is focused on 4 pillars
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FINANCING Helping them to finance their projects PRODUCT Everything they need in bulk quantity PRICE Lowest price guaranteed RELATIONSHIP Best advisory service in the market SPEED Ensuring a fast purchase experience +2.1 MM Círculo de Especialistas (CES(1)) Total Clients +1.4 MM CES1 Active Clients +3.7 MM PRO Active Clients Sodimac is a trusted ally of our PRO customers, helping them execute more and better jobs, helping them grow Focus on PRO Clients Building PRO loyalty through personalized services, a superior omnichannel experience and a targeted loyalty program to increase purchase frequency. Data LTM September 2024. Círculo de Especialistas (1) CES: Loyalty Program focused on PRO clients. Active clients: customers who bought in the period.
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Customized Home page with PRO products CES details PRO App customization We enhance the PRO shopping experience with greater personalization in our app Focus on PRO Clients Customized discounts through de navigation flow, adapted to browsing behavior
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Personalized PRO in store service Personalized service to our best CES clients All the services used by the PRO in one place Product collection area, co-work space and especial benefits +95 Stores provide this service at a regional level Focus on PRO Clients We enhance the PRO shopping experience in our stores
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Private Label A growing, profitable business driving differentiation and exclusive customer value Private label strategy Private label categories Maintain profitability by Improving commercial conditions with suppliers Business profitability Market differentiation Maintain an exclusive portfolio of products and brands in all our channels Product authority Development of products that meet the specific needs of our consumers Supplier negotiation Investment in brand development, making spending more efficient through direct sourcing Good Better OPP Best Private label categories Private labels of total sales ~30%(1) (1) LTM figures as of September 2024.
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Assortment dominance Focus on core Home Improvement categories Frictionless purchasing experience Improved findability, including in-store screens to offer extended assortment Streamlined checkout and after-sales services Digital solutions for a perfect after-sales process Differentiated PRO client functionalities Develop digital functionality and experience that make a difference for the client Augmented profitability Strengthen the profitability of digital retail We aim to become a Specialist Superstore in home improvement e-commerce by leveraging: strategic axes 5 We defined five strategic pillars to become regional market leaders by improving the omnichannel experience for our customers Growth in omnichannel
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+404 K SKUs listed(1) We relaunched Sodimac.com to position ourselves as the Home Improvement leaders in LatAm Chile + Peru Strengthen the brand Improve our value proposition through a more specialized HI website Research Online effect on purchases offline 69% of listed SKUs are 3P(1) +19% Visits (Web + App)(2) +30% GMV(2) +84% Growth of Monthly Active Users(2) Growth in omnichannel (1) (1) YTD October 2024 (2) (2) September v/s June
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Transformations from Maestro to Sodimac in Peru Strengthening in-store exhibition to improve customer experience Product & experience innovation ~50%(1) Revenue growth vs non transformed stores (1) Revenue growth Maestro Plaza Norte & Maestro Chiclayo vs other Maestro stores in the region 3Q24 vs 3Q23.
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Opening July 2022 Plaza Central Mexico City Interlomas Mexico State Sincelejo Sincelejo Compact format M2 +4,000 Opening July 2023 M2 +5,000 Opening September 2023 M2 +3,000 Adapting our footprint to the local markets Product & experience innovation
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Well positioned to capture growth in main markets Chile Revenue US$ MM (LTM sep-24) % CES/PRO(1) Maintain leadership position Strategy by categories to recover growth and margins Expense control without affecting CX 53%2,631 Peru Colombia Expand footprint to new cities Operational efficiency without compromising customer experience Improve B2B value proposition: ecommerce, enhanced assortment Continue Maestro store transformation (already converted 4 stores) Enhance CX throughout the customer’s journey, improving our NPS Innovate via showrooms 20% 39% 835 1,496 (1) Círculo de Especialistas (CES): Loyalty Program focused on PRO clients. CES/PRO ratio shows % clients of PRO segment who are part of CES.
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Monterrey Saltillo Guadalajara San Luis Potosi Leon Mexico City Veracruz 15 Stores in 7 relevant cities Mexico: highest growth potential for Sodimac 6 years in operation US$ 217 MM in revenues (1), ~25% CAGR 3Q24 vs 3Q19 36% CES/PRO clients (2) Optimized and standardized store layouts, for a better CX and improved profitability Looking for benefits of scale with new stores in relevant cities within delivery coverage area to continue strengthening our brand Enhanced PRO loyalty program, improving purchase frequency in this segment (1) LTM figures as of September 2024. (2) Círculo de Especialistas (CES): Loyalty Program focused on PRO clients. CES/PRO ratio shows % clients of PRO segment who are part of CES.
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We are prepared to resume growth and increase profitability in our main countries Improve our extended assortment to become an omnichannel Home Improvement Superstore Keep developing the PRO value proposition in order to increase that segment’s loyalty Expand our footprint in Mexico Key takeaways Market leaders despite global slowdown in the construction industry.
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FRANCISCO IRARRÁZAVAL FALABELLA RETAIL Becoming an Omnichannel Multi- Specialist for our core categories, in partnership with top-quality brands
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We lead the retail industry in the three countries we operate Total Sales (1) US$4.8 B 1P 3P 26 34 44 2.6 1.4 0,8 85 MM Total transactions #1 Kantar Brand Index 692 K Store sqm(2) +19 MM Active clients #1 Market Share 11 MM #Loyalty Program Clients Falabella Stores 105 Falabella.com CO, CL,PE Best Brand Stores 74 (1) LTM approximated figures as of September 2024 (2) Stores sqm includes Best Brand stores..
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E-commerce has been our focus and growth driver, transforming us into the regional leader $1.9 B Total Sales (1) 40% Online GMV/ Total GMV LTM >50% Click & Collect 1.6 B Visits LTM >60% Under 48-Hour Delivery / Total Deliveries 6.6MM Active Users on the App +15% 3P Growth LTM (1) LTM approximated figures as of September 2024.
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Advertising services Stand alone websites Fulfillment services Home Delivery services Benefits program 1.6% %NMV 3P LTM 5 Stand Alone websites >20% %NMV FBF/3P LTM >80% Delivery by Falabella Network 60% Five stars Sellers orders delivery +75% Best Brands 3P Growth LTM *Deliveries by Falabella Network, land Five stars Seller orders, last 3 months; Shift towards a Curated Marketplace, supported by our long-term relationships with Best Brands and providing them omnichannel services
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From a Generalist Store and Marketplace Our strategy is to leverage the power of our brand to differentiate in our specialty categories
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To an Omnichannel Multi-Specialist Hub for top brands To an Omnichannel Multi-Specialist Hub for top brands Apparel FootwearBeauty TechnologyHome Decor 90% of Sales
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80% 20% 10% 70% Brands Strategy Apparel Local and Global Brands Traffic & Fashion Private Label and Licenses Fashion & Convenience & Profitability Exclusive Brands Differentiation & Fashion Differentiation: 80% of what we sell, can only be bought through Falabella Channels. Channel Strategy Revenue Share Online Client engagement, Catalog extension through 3P Offline Experience and profitability *LTM approximated figures as of September 2024. Revenue Share 20%+ 1P: 20% 3P: High Growth
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Apparel Differentiation & Fashion Exclusive Brands (1P) Our licenses and exclusive brands set us apart, providing a strong source of differentiation
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FORMAL / CASUAL LADY YOUNG WOMAN YOUTH / NIGHT YOUTH JEANS YOUTH SURF ENTRY PRICE VALUE PRICE CONSUMER SEGMENT <$25 US MM <$25 US MM >$100 US MM >$50 US MM >$50 US MM <$50 US MM >$100 US MM <50 US MM <$50 US MM <$50 US MM Apparel Convenience & Fashion Private Label and Licenses(1P) Women brand segmentation example *LTM approximated figures as of September 2024.
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Our strategy is focused on strengthening exclusive brands with emphasis on global brands, that differentiate us through exclusive launches Beauty 70% 20% Brands Strategy Global Brands Traffic & Fashion Private Label and Licenses Convenience & Profitability Exclusive Brands Differentiation & Fashion Channel Strategy Revenue Share Online International Trends and Catalog extension through 3P Offline Experience, Traffic and profitability 70% 10% Exclusive Launches 35% *LTM approximated figures as of September 2024. Revenue Share >50% Market Share >10% Market Growth 30% 1P: 30% 3P: High Growth
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Current International 3P Brands provide access to an unlimited portfolio, innovative and trending brands The 3P has a role as a trends laboratory +35% of digital sales are 3P +80 trendy brands Beauty Traffic & Fashion Local and Global Brands (1P+3P) 90% 10% 0% 2018 75% 20% 5% 2023 70% 20% 10% LTM Sep 24 Sales by Channel 3P *LTM approximated figures as of September 2024.
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Strong market share in footwear, supported by the best brands with a crucial role for the physical store Footwear 55% Brands Strategy Global Brands Traffic, Fashion & Profitability Private Label and Licenses Fashion & Convenience Exclusive Brands Differentiation Channel Strategy Online Profitability & Catalog Extension 1P & 3P Offline Experience & Traffic & profitability 10% 60% 30%+ *LTM approximated figures as of September 2024. Revenue Share Revenue Share 45% 1P: 45% 3P: High Growth
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3P Current Best Brands We are expanding online footwear sales in close collaboration with top brand partners, while enhancing our catalog with 3P offerings Traffic & Fashion & Profitability Local and Global Brands (1P+3P) Footwear 90% 10% 0% 65% 30% 5% 60% 30% 10%Sales by Channel 3P 2018 2023 LTM Sep 24 *LTM approximated figures as of September 2024.
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In Home Decor, we have developed our own brands and transitioned to an online model Home Decor Brands Strategy Local and Global Brands Traffic & Trends Private Label and Licenses Convenience & Profitability Exclusive Brands Differentiation & Trends Channel Strategy Online Profitability and Catalog Complement through 3P Offline Experience & Showrooming 15%+ 15%+70% 30% *LTM approximated figures as of September 2024. Revenue Share Revenue Share 70% 1P: 70% 3P: High Growth
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Home Decor Convenience & Profitability Private Label and Licenses(1P) Crafting an inspiring and convenient value proposition for mass formats, mainly driven by our Private Labels
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Minimal product differentiation, with competition primarily driven by price, making the customer experience a key challenge Brands Strategy Global Brands Traffic & Fashion Private Label and Licenses Convenience & Profitability Exclusive Brands Differentiation Channel Strategy Online Complement Catalog Offline Traffic and profitability 40% 10%+ 0%90% Technology Revenue Share Revenue Share 60% 1P: 60% 3P: High Growth *LTM approximated figures as of September 2024.
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A differentiated strategy for each product category Technology Traffic & Fashion Local and Global Brands (1P+3P) Core Products Low-differentiation and high-cost products where we must ensure convenience. Peripheral or Complementary Accessories for core and emerging products, with growth focused on 3P in online. Key to profitability. Emerging Technologies Products that have become trendy and that we must have to showcase #LoÚltimo.
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70% Apparel 10% 20% 80% 20% Offline Differentiate through private and exclusive brands that bring higher margins and traffic. Beauty 70% 20% 10% 70% 30% Offline Strengthen exclusive brands and focus on customer experience. Technology 100% 0% 0% Online 60%40% Offer competitive central products, showcase #LoÚltimo in trends, and provide a full accessories catalog to enhance results. Home Decor 70% 15% 15% Online 70%30% Continue developing our private label offering and boost 3P online growth. Footwear 10% 30% 60% 50% 40% Offline Expand our online catalog with 3P offerings while enhancing the physical store experience. Global Brands Exclusive Brands Private L. & Licenses Specific strategy per product category and channel *LTM approximated figures as of September 2024.
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Become an Omnichannel Multi Specialist for our core categories, in partnership with top brands, whose interests are aligned with ours Key takeaways Focus on Omnichannel e-commerce (1p + 3P) to drive future growth Build on high-quality brand attributes to grow own products in specific niches and across channels Leverage our relationship with top brands to grow online and offer hard-to-replicate omnichannel services
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RENATO GIAROLA TOTTUS Refocusing Our Strategy to Better Serve Our Customers
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More than 15 million customers in our supermarket reflect the strength of our business #2 in Market Share(1) in Peru and 4th in Chile 90 Stores 73 Stores(2) +US$ 2.6 B in revenue LTM sep-24 7.1% LTM EBITDA Margin 2pp (YoY growth) (1) Market share: Nielsen (2) Considering the new stores opening in December 2024 (Punta Hermosa in Peru, and Quillayes in Chile) (3) Local currency Revenue +7% in Chile +8% in Peru (3Q24 vs 3Q23 growth)(3)
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Supermarkets Lead in Customer Frequency(2) Purchases per client/year (#) (1) +1.6X +1.4X Business with Stable Essential Demand(1) DemandHousehold Spending on food & non-alcoholic beverages (%) Average Top Quintile Tottus a stable, resilient business with Frequent Customer Engagement 42,5 21,2 53,2 31,6 (1) Source: Household spending (INEI, Kantar). 2023 data for Chile and 2022 for Peru (2) LTM figures as of September 2024.
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Improved experience with low- priced perception Operational excellence Customer engagement through differentiation The new Tottus A better client price/experience equation Our strategy is built on three pillars
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Unmatched value through consistently attractive prices and compelling promotions Best price for value products Structured Negotiations That enables a strategic approach to enhancing margins and drive efficiency. More aggressive pricing model That drives margin optimization through enhanced pricing strategies. Dynamic promotional model That boosts campaign effectiveness and supports sales growth. We are developing better and more structured models Position Tottus as the go-to choice for competitive pricing
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Optimized assortment of products and leveraging our Falabella's loyalty program Strengthening perishables offering to drive customer experience through quality, price, and reliability. Reviewing our portfolio to align with our strategy and customer needs. In 2024, we launched Quality Private Label Labs to enhance development, testing, and foster a culture of innovation. Leverage our corporate loyalty program to continue to offer special benefits to our clients. What we expect from differentiation? Differentiate through stronger branding, leveraging our ecosystem Outstanding client experience to set the brand apart and build customer loyalty
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Enhanced in-store layout to optimize the shopping experience: Higher relevance of food categories Improved perishable counters (with personalized services) New pastry and bread counter offering freshly-baked products Optimized assortment, with new exclusive brands and an elevated private label +5pp NPS in Chile and Peru Examples of Improvement in Customer Experience +15pp Of perishables participation in new Punta Hermosa store in Peru Driving Profitability While Strengthening Our Omnichannel Strategy with Physical Growth
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90 minutes for food and smaller items minutes 24-48 for non-food large items hours Faster delivery Relaunch of our specialist website with a complete assortment of food & non-food items in digital channels Strengthen the brand through a seamless omnichannel experience and faster delivery Leverage unique features such as a seamless e-commerce platform Leverage digital marketing and monetization to increase revenues
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Achieve superior efficiency and reliability through streamlined processes, cost- effective operations, consistent delivery Customer-focused approach that enhances overall shopping experiences Physical expansion with a focus on our discounter format “Precio Uno” (Peru). Continuing to Enhance Profitability Simplifying our operation Ensuring low operating costs Strengthening our commercial strategy and client offering. Driving efficiency and elevating customer experience
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Opportunity to grow in Peru through our discounter brand ~10% lower prices compared to supermarkets ~30% sales penetration of private label 5 new stores in 2025 (32 stores to date) Fast growing demand, particularly in the peripheral area of Lima and other provinces. Emphasis on the lower price with private label and first price brands Focus on volume, high turnover and contribution Efficiency in stores, better logistics and less costs
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Key takeaways Expanding Our Footprint (+6 stores in 2025) to reach more communities and grow our customer base Transforming In-Store Experiences, implementing layout changes and strengthening food categories to drive engagement during 2025 Introducing a New Private Label Brand Architecture to enhance customer loyalty and elevate our market presence (2Q25) Driving Operational Excellence by continuously refining internal processes to boost efficiency and maximize productivity
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FERNANDO DE PEÑA MALL PLAZA Becoming the largest mall operator in South America with a compelling value proposition
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The largest operator in the region with a unique portfolio of top tier assets and top of mind brands and stores 5 15 17 343 MM visitors per year +4,900 stores 10 Tier A Assets +60% of company’s EBITDA 2.3 MM sqm of GLA 47% GLA focused on experiences & convenience 3.7 B US$ Market Cap 37 shopping centers in 23 citiesGATEWAY in the Andean region for global brands and investors As of September 2024, includes Open Plaza Perú
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Fashion F&B+entertainment A valued platform for renowned brands seeking entry or expansion in the Andean Region (Attract new brands and boost flagship sport stores in Tier A assets) 28% Convenience 22% Department stores 21% Specialty Retail 15% F&B and Entertainment 10% Mixed Use 4% Automotive & Others % GLA Essentials Business Develop clusters of daily flow- generating services (Grow civic centers, sports facilities, convenience) New Formats and uses New formats catering to all segments of the population such as Educational Centers, Healthcare, Offices, etc Innovative gastronomic and entertainment offerings that foster enjoyment and social connection. (Strengthen Tier A and B+ assets with proven concepts: Sweet Zones, Markets, Beer Garden) • Supermarkets • Home Improvement • Financial services • Gyms A strategically balanced retail mix delivers an exceptional visitor experience ensuring traffic and frequency
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Expand our digital value proposition to generate new revenue streams in an integrated phygital space Generate digital visitor flow to our urban centers +730 K packages delivered through our 19 Click&Collect LTM, as of September 2024 Increase sales of our tenants Generating more than US$ 91 MM in GMV LTM, as of September 2024 Become an omnichannel differentiator in the Shopping Center industry 1st place Most Innovative Companies Chile 2024 in Shopping center categories and 3rd place in Chile ranking (277 companies) in Omnnichannel Index 2024 Generate data and better understanding customer habits + 560 K contactable clients and 332 stores using Followup tools to measure conversion, heat maps and footfall as of September 2024 Omnichannel services On and off-site marketing media services to monetize customer touchpoints Frictionless smart parking New revenue streams 408% growth as of September 2024 YTD vs 2023 25% penetration of digital parking in Chile as of September 2024
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+100K m2 Mallplaza Vespucio Case in Chile: Brownfiel dTangible growth avenues with relevant projects already under execution Faster, low risk execution Cost attractive Drives market share of current urban centers Available landbank for future developments GLA in the next 5 years: Benefits 1990 2024 +125K m2 8x growth in brownfield in 34 years 24k m2 190k m2* Diversified offer of fashion, F&B, entertainment, services, automobile sales and mixed use spaces (Health, Education and Offices) Leadership position in the southeast part of Santiago +2 million visitors per month
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M&A Tangible growth avenues with relevant projects already under execution Future market opportunities 31% MS 21% MS 4% MS Acquisition success stories: 2020: Mallplaza NQS 2024: Falabella Peru Acquisitions: 66.6% Mallplaza Peru 100% of Open Plaza Peru Complete renewal of the commercial offer 3x increase in footfall 137% increase in sales
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JUAN MANUEL MATHEU BANCO FALABELLA Paving the Way to Become the #1 Digital Bank in Our Markets
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Our aspiration is to become the #1digital bank in the countries where we operate 6.5 B US$ loan portfolio 76% Active App Users 23.5 B US$ credit / debit card purchases (LTM) 0.5 million 1.7 million 1.6 million 4.0 million 7.8 million active customers As of September 2024
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Our strategy has outperformed the market 2.498 2.423 1.021 904 841 834 799 6.560 5.636 4.965 2.998 2.750 2.555 1.628 2.654 2.197 1.721 1.163 1.069 723 486 22.319 6.526 6.106 6.103 4.183 2.073 1.216 5.736 5.343 4.221 3.207 3.137 3.120 2.590 Credit Cards (# ´000; Aug-24) Credit Card Purchases ($MMM; Aug-24 YTD) Current Accounts (# ´000; Sep-24) Debit Card Purchases ($MMM; Sep 24 YTD) Consumer Loans ($MMM; Sep-24) Branches (#; Sep-24) +1% CAG R +17% CAGR +40% CAGR +38% CAGR 0% CAGR -15% CAGR411 235 198 174 167 88 87 2024 v/s 2019 1% CAGR +17% CAGR +40% CAGR +38% CAGR 0% CAGR -15% CAGR
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Our strategy is suited to deliver profitable growth A mobile-first experience with a strong presence in our high-traffic retail stores Simple, intuitive products enhanced by the best benefits Accurate risk prediction and personalized offers leveraging ecosystem data Low spending discipline Decoupled modular and API oriented architecture combined with an agile organization to shorten time to impact
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Mobile-first digital client journey with intuitive UX 2.5 5.9 Sep-19 Sep-24 2.4x Driving a significant increase in our App Active Users (million) Our app offers a wide range of features Instant credit card & account opening Immediate & simple transfers Loyalty point redemptions Personalized anti-fraud settings Frictionless cross-selling Debt payment alerts & refinancing Contactless Payments (Apple Pay & Google Pay)
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Integrating AI into customer interactions Impact Gen AI Bot for transaction disputes that offer self-served interactions for 65% of the cases Resolution81% NPS Survey61% FTE reduction-13% AI Interactions in the first month3K More accuracy than agents+9.4 pp
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4.2 8.2 LTM Sep-19 LTM Sep-24 Monthly purchases by customer (#) Promotions within Falabella ecosystem Promotions with business partners Best loyalty program in the region Our benefit-based value proposition drives primary usage across our payment methods Outside At Falabella Group 6.6 18.83.9 4.7 LTM Sep-19 LTM Sep-24 Card purchases (US$ B) 2.2x 1.9x
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Artificial Intelligence Models Credit / debit card transactions 788 MM transactions +15,000 variables in our model Ecosystem data usage to enhance risk prediction Assets and liabilities with Banco Falabella (transactions; balance) 7.8 MM customers Seguros Falabella 9 MM insurance policies Falabella group transactions 274 MM transactions Loyalty Program 20 MM participants Ecosystem sources(1) Superior credit risk assessment Solid fraud management Low customer acquisition cost External sources Leveraging our ecosystem data… Personalized offers (1) Customers, participants and policies as of September 2024. Transactions LTM as of September 2024.
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… to drive impact 93% 90% 25 90 -53% Industry benchmark(2) Digital marketing in falabella.com vs public site 2,9 4,0 5,6 3,6 3,4 5,6 5,5 8,1 Peer Group(3) 0.18% 0.30% Industry benchmark(1) Industry benchmark(1) Cost Per Acquisition US$ / new credit card active customer PSP fraud % total payment volume PSP acceptance rate % transactions NPL % loan book (1) Industry benchmark from BCG analysis in 2023. (2) Industry benchmark from BCG analysis in 2024. (3) Peer Group: Chile: BCI, Banco Estado, Ripley; Colombia: Serfinanza, Tuya; Peru: Ripley, Financiera Oh!, Cencosud; Mexico: Nubank.
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Contained expenditure to drive financial efficiency 0,8 1,2 Sep-19 Sep-24 Loan Portfolio/FTE (US$ MM) 868 1.372 LTM Sep-19 LTM Sep-24 Active customers/FTE 1.6x 1.5x
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We are well positioned to grow in the countries we operate… Becoming our customers’ primary bank Sight Deposits (US$ MM) Credit and debit card purchases (US$ B) At Falabella Ecosystem Outside Falabella Ecosystem 2.5x Business model redefinition 1 2 5.5 7.0 152 134 LTM Sep-23 LTM Sep-24 +1.5pp -12% % fee revenue/ loan book Sep-23 Sep-24 Operating expenses (US$ MM) 22.9 -29.5 -16.4 1.6 1.3 11.3 Profitability recovery enables future growth Net Income (US$ MM) 2019 2020 2021 2022 2023 LTM Sep-24 LTM Sep-19 LTM Sep-24 30% 70% 86% Continue growing our customer base and increasing our product offering Credit card purchases (US$ MM) At Falabella Ecosystem Outside Falabella Ecosystem 729 LTM Sep-19 LTM Sep-24 45% 55% 59% 41% 182 Transition to SOFIPO(1) in 2025 4.0X 14% 7.0 18.0 583 1,732 3.0x Sep-19 Sep-24 (1) Sociedades Financieras Populares of Mexico” that allows Falabella Soriana to hold customer deposits.
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…and in the industry, we are beginning to observe more stable and 'normal' consumer credit delinquency rates across the region Source: Chile: CMF – Perú: SBS – Colombia: Superintendencia Financiera. 2.5 2.62.6 3.23.1 6.1 2019 2020 2021 2022 2023 Sep-24 Industry NPL (%) Industry NPL % consumer loan book Industry NPL (%) Industry consumer loan growth YoY % 6.7 12.9 23.9 1.4 -1.4 -9.5 2019 / 2024
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Key takeaways We are well positioned to grow in the countries we operate A more stable credit risk context will allow us to accelerate loans growth Our customer base, benefits and ecosystem data generate a distinctive competitive advantage Our value proposition has traction among customers
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ALEJANDRO GONZÁLEZ Closing Remarks
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Closing Remarks Delivering Unmatched Omnichannel Customer Experiences Continuously delivering customer-centric omnichannel value by staying ahead of evolving customer needs Unlocking Growth Potential Across Markets Our 5 growth engines are ready to capture opportunities and drive a balanced physical-digital expansion Driving Stronger Profitability Focused on consistently maximizing returns to create value for our shareholders.